Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of ~~July 30, 2021: 26,107,462~~April 28, 2022: 26,853,292

Three Months Ended

Six Months Ended

June 30,
2021

June 30,
2020

June 30,
2021

June 30,
2020

NET SALES

$
347,464

$
144,835

$
705,660

$
445,947

Cost of sales

314,844

167,676

630,000

445,627

GROSS PROFIT (LOSS)

32,620

(22,841
)

75,660

320

Selling, general and administrative expenses

17,100

11,276

34,421

23,811

Impairment of goodwill and indefinite-lived intangibles

—

—

—

193,641

INCOME (LOSS) FROM OPERATIONS

15,520

(34,117
)

41,239

(217,132
)
Interest expense, net

(10,486
)

(12,184
)

(20,759
)

(24,034
)
Other (expense) income, net

(2,420
)

(670
)

(3,934
)

653

INCOME (LOSS) BEFORE INCOME TAXES

2,614

(46,971
)

16,546

(240,513
)
Income tax (provision) benefit

(919
)

3,753

(1,729
)

7,213

NET INCOME (LOSS)

$
1,695

$
(43,218
)

$
14,817

$
(233,300
)
LOSS PER SHARE – BASIC

$
(0.26
)

$
(2.00
)

$
(0.07
)

$
(9.81
)
LOSS PER SHARE – DILUTED

$
(0.26
)

$
(2.00
)

$
(0.07
)

$
(9.81
)

	Three Months Ended
	March 31, 2022			March 31, 2021
NET SALES	$	400,526		$	358,196
Cost of sales		359,939			315,156
GROSS PROFIT		40,587			43,040
Selling, general and administrative expenses		16,950			17,321
INCOME FROM OPERATIONS		23,637			25,719
Interest expense, net		(9,962	)		(10,273	)
Other expense, net		(87	)		(1,514	)
INCOME BEFORE INCOME TAXES		13,588			13,932
Income tax provision		(3,518	)		(810	)
NET INCOME	$	10,070		$	13,122
EARNINGS PER SHARE – BASIC	$	0.04		$	0.19
EARNINGS PER SHARE – DILUTED	$	0.04		$	0.18

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
Net income (loss)	$	1,695		$	(43,218	)	$	14,817		$	(233,300	)
Net income													$	10,070		$	13,122
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss)		8,410			9,443			(7,268	)		(26,090	)		2,043			(15,678	)
Change in unrecognized gains (losses) on derivative instruments:
Change in fair value of derivatives		17,165			19,673			8,025			(38,752	)		17,252			(9,140	)
Tax (provision) benefit		(1,718	)		(4,375	)		(1,040	)		8,753			(431	)		678
Change in unrecognized gains (losses) on derivative instruments, net of tax		15,447			15,298			6,985			(29,999	)		16,821			(8,462	)
Defined benefit pension plan:
Actuarial gains on pension obligation, net of amortization		97			72			194			144
Tax benefit (provision)		21			(13	)		—			(30	)
Amortization of actuarial losses on pension obligation														83			97
Tax (provision) benefit														—			(21	)
Pension changes, net of tax		118			59			194			114			83			76
Other comprehensive income (loss), net of tax		23,975			24,800			(89	)		(55,975	)		18,947			(24,064	)
Comprehensive income (loss)	$	25,670		$	(18,418	)	$	14,728		$	(289,275	)	$	29,017		$	(10,942	)

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

	June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	149,171		$	152,423		$	133,681		$	113,473
Accounts receivable, net		85,065			48,995			124,507			83,447
Inventories, net		197,990			154,980			208,305			172,099
Income taxes receivable		5,334			4,957			5,508			4,957
Other current assets		24,586			22,301			40,248			30,279
Total current assets		462,146			383,656			512,249			404,255
Property, plant and equipment, net		503,086			522,124			491,847			494,401
Deferred income tax assets, net		27,940			30,860			25,843			27,715
Goodwill		—			—
Intangibles, net		93,942			110,796			69,533			76,870
Other non-current assets		61,241			61,889			55,446			50,906
Total assets	$	1,148,355		$	1,109,325		$	1,154,918		$	1,054,147
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	190,386		$	151,839		$	229,557		$	153,197
Short-term debt		6,545			6,112			5,971			6,081
Accrued expenses		75,567			71,079			76,974			71,525
Income taxes payable		1,408			2,107			1,170			1,076
Total current liabilities		273,906			231,137			313,672			231,879
Long-term debt (less current portion)		617,212			625,492			597,856			602,355
Non-current income tax liabilities		7,682			7,635			7,799			8,289
Deferred income tax liabilities, net		4,680			9,104			4,327			3,913
Other non-current liabilities		74,476			76,426			74,066			77,089
Commitments and contingent liabilities (Note 17)
Commitments and contingent liabilities (Note 16)								—			—
Mezzanine equity:
Preferred stock, $0.01 par value
Authorized - 1,000,000 shares
Issued and outstanding – 150,000 shares outstanding at June 30, 2021 and December 31, 2020		189,364			179,387
Issued and outstanding – 150,000 shares outstanding at March 31, 2022 and December 31, 2021								205,381			199,897
European non-controlling redeemable equity		1,590			1,666			1,140			1,146
Shareholders’ equity (deficit):
Shareholders’ deficit:
Common stock, $0.01 par value
Authorized - 100,000,000 shares
Issued and outstanding – 26,107,462 and 25,591,930 shares at June 30, 2021 and December 31, 2020		98,236			95,247
Issued and outstanding – 26,853,292 and 26,163,077 shares at March 31, 2022 and December 31, 2021								104,216			103,214
Accumulated other comprehensive loss		(99,535	)		(99,446	)		(107,027	)		(125,974	)
Retained earnings		(19,256	)		(17,323	)		(46,512	)		(47,661	)
Total shareholders’ equity (deficit)		(20,555	)		(21,522	)
Total liabilities, mezzanine equity and shareholders’ equity (deficit)	$	1,148,355		$	1,109,325
Total shareholders’ deficit								(49,323	)		(70,421	)
Total liabilities, mezzanine equity and shareholders’ deficit							$	1,154,918		$	1,054,147

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

	Six Months Ended						Three Months Ended
	June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	14,817		$	(233,300	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net income							$	10,070		$	13,122
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		50,970			48,316			24,082			25,361
Income tax, non-cash changes		(2,927	)		(13,975	)		1,979			(2,818	)
Impairment of goodwill and indefinite-lived intangibles		—			193,641
Stock-based compensation		4,331			210			2,646			1,847
Amortization of debt issuance costs		2,731			2,261			1,231			870
Other non-cash items		(3,928	)		(2,456	)		319			(4,528	)
Changes in operating assets and liabilities:
Accounts receivable		(37,231	)		9,839			(40,403	)		(36,981	)
Inventories		(46,139	)		17,053			(36,578	)		(14,702	)
Other assets and liabilities		15,894			1,186			4,415			13,875
Accounts payable		34,402			(31,276	)		78,141			21,328
Income taxes		(987	)		1,366			(901	)		779
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		31,933			(7,135	)
NET CASH PROVIDED BY OPERATING ACTIVITIES								45,001			18,153
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment		(20,551	)		(22,761	)		(17,954	)		(10,479	)
Proceeds from sale of fixed assets								150			—
NET CASH USED IN INVESTING ACTIVITIES		(20,551	)		(22,761	)		(17,804	)		(10,479	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		1,658			11,690			—			1,658
Repayments of debt		(2,129	)		(24,066	)		(1,331	)		(830	)
Proceeds from borrowings on revolving credit facility		—			213,825
Repayments of borrowings on revolving credit facility		—			(106,992	)
Cash dividends paid		(6,736	)		(6,767	)		(3,426	)		(3,368	)
Financing costs paid and other		(4,307	)		(4,938	)		—			(9	)
Payments related to tax withholdings for stock-based compensation		(1,342	)		—			(1,644	)		(1,342	)
Finance lease payments		(645	)		(547	)		(304	)		(288	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(13,501	)		82,205
NET CASH USED IN FINANCING ACTIVITIES								(6,705	)		(4,179	)
Effect of exchange rate changes on cash		(1,133	)		496			(284	)		(2,070	)
Net (decrease) increase in cash and cash equivalents		(3,252	)		52,805
Net increase in cash and cash equivalents								20,208			1,425
Cash and cash equivalents at the beginning of the period		152,423			77,927			113,473			152,423
Cash and cash equivalents at the end of the period	$	149,171		$	130,732		$	133,681		$	153,848

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

For the six months ended June 30, 2020
For the three months ended March 31, 2021
	Common Stock				Accumulated Other Comprehensive (Loss) Income															Common Stock				Accumulated Other Comprehensive (Loss) Income
	Number of Shares		Amount		Unrecognized Gains (Losses) on Derivative Instruments			Pension Obligations			Cumulative Translation Adjustment			Retained Earnings			Total			Number of Shares		Amount		Unrecognized Gains (Losses) on Derivative Instruments			Pension Obligations			Cumulative Translation Adjustment			Retained Earnings			Total
BALANCE AT DECEMBER 31, 2019		25,128,158	$	93,331	$	9,951		$	(5,571	)	$	(104,458	)	$	258,437		$	251,690
Net loss		—		—		—			—			—			(233,300	)		(233,300	)
Change in unrecognized gains/losses on derivative instruments, net of tax		—		—		(29,999	)		—			—			—			(29,999	)
BALANCE AT DECEMBER 31, 2020																					25,591,930	$	95,247	$	(1,738	)	$	(7,447	)	$	(90,261	)	$	(17,323	)	$	(21,522	)
Net income																					—		—		—			—			—			13,122			13,122
Change in unrecognized gains (losses) on derivative instruments, net of tax																					—		—		(8,462	)		—			—			—			(8,462	)
Change in defined benefit plans, net of taxes		—		—		—			114			—			—			114			—		—		—			76			—			—			76
Net foreign currency translation adjustment		—		—		—			—			(26,090	)		—			(26,090	)		—		—		—			—			(15,678	)		—			(15,678	)
Common stock issued, net of shares withheld for employee taxes		463,772		—		—			—			—			—			—			355,532		—		—			—			—			—			—
Stock-based compensation		—		210		—			—			—			—			210			—		505		—			—			—			—			505
Redeemable preferred 9% dividend and accretion		—		—		—			—			—			(15,755	)		(15,755	)		—		—		—			—			—			(8,290	)		(8,290	)
European non-controlling redeemable equity dividend		—		—		—			—			—			(46	)		(46	)		—		—		—			—			—			(13	)		(13	)
BALANCE AT JUNE 30, 2020		25,591,930	$	93,541	$	(20,048	)	$	(5,457	)	$	(130,548	)	$	9,336		$	(53,176	)

For the three months ended June 30, 2020
	Common Stock				Accumulated Other Comprehensive (Loss) Income
	Number of Shares		Amount		Unrecognized Gains (Losses) on Derivative Instruments			Pension Obligations			Cumulative Translation Adjustment			Retained Earnings			Total
BALANCE AT MARCH 31, 2020		25,474,477	$	92,678	$	(35,346	)	$	(5,516	)	$	(139,991	)	$	60,485		$	(27,690	)
Net loss		—		—		—			—			—			(43,218	)		(43,218	)
Change in unrecognized gains/losses on derivative instruments, net of tax		—		—		15,298			—			—			—			15,298
Change in defined benefit plans, net of taxes		—		—		—			59			—			—			59
Net foreign currency translation adjustment		—		—		—			—			9,443			—			9,443
Common stock issued, net of shares withheld for employee taxes		117,453		—		—			—			—			—			—
Stock-based compensation		—		863		—			—			—			—			863
Redeemable preferred 9% dividend and accretion		—		—		—			—			—			(7,905	)		(7,905	)
European non-controlling redeemable equity dividend		—		—		—			—			—			(26	)		(26	)
BALANCE AT JUNE 30, 2020		25,591,930	$	93,541	$	(20,048	)	$	(5,457	)	$	(130,548	)	$	9,336		$	(53,176	)

BALANCE AT MARCH 31, 2021																					25,947,462	$	95,752	$	(10,200	)	$	(7,371	)	$	(105,939	)	$	(12,504	)	$	(40,262	)

For the three months ended March 31, 2022
(Unaudited)	Common Stock				Accumulated Other Comprehensive (Loss) Income
	Number of Shares		Amount		Unrecognized Gains (Losses) on Derivative Instruments			Pension Obligations			Cumulative Translation Adjustment			Retained Earnings			Total
BALANCE AT DECEMBER 31, 2021		26,163,077	$	103,214	$	(9,051	)	$	(6,133	)	$	(110,790	)	$	(47,661	)	$	(70,421	)
Net income		—		—		—			—			—			10,070			10,070
Change in unrecognized gains (losses) on derivative instruments, net of tax		—		—		16,821			—			—			—			16,821
Change in defined benefit plans, net of taxes		—		—		—			83			—			—			83
Net foreign currency translation adjustment		—		—		—			—			2,043			—			2,043
Common stock issued, net of shares withheld for employee taxes		690,215		—		—			—			—			—			—
Stock-based compensation		—		1,002		—			—			—			—			1,002
Redeemable preferred 9% dividend and accretion		—		—		—			—			—			(8,910	)		(8,910	)
European non-controlling redeemable equity dividend		—		—		—			—			—			(11	)		(11	)
BALANCE AT MARCH 31, 2022		26,853,292	$	104,216	$	7,770		$	(6,050	)	$	(108,747	)	$	(46,512	)	$	(49,323	)

For the six months ended June 30, 2021

Common Stock

Accumulated Other Comprehensive (Loss)
Income

Number of
Shares

Amount

Unrecognized
Gains (Losses)
on Derivative
Instruments

Pension
Obligations

Cumulative
Translation
Adjustment

Retained
Earnings

Total

BALANCE AT DECEMBER 31, 2020

25,591,930

$
95,247

$
(1,738
)

$
(7,447
)

$
(90,261
)

$
(17,323
)

$
(21,522
)

Net income

—

—

—

—

—

14,817

14,817

Change in unrecognized gains/losses on
   derivative instruments, net of tax

—

—

6,985

—

—

—

6,985

Change in defined benefit plans, net of taxes

—

—

—

194

—

—

194

Net foreign currency translation adjustment

—

—

—

—

(7,268
)

—

(7,268
)

Common stock issued, net of shares withheld
   for employee taxes

515,532

—

—

—

—

—

—

Stock-based compensation

—

2,989

—

—

—

—

2,989

Redeemable preferred 9% dividend
    and accretion

—

—

—

—

—

(16,712
)

(16,712
)

European non-controlling redeemable
    equity dividend

—

—

—

—

—

(38
)

(38
)

BALANCE AT JUNE 30, 2021

26,107,462

$
98,236

$
5,247

$
(7,253
)

$
(97,529
)

$
(19,256
)

$
(20,555
)

For the three months ended June 30, 2021

Common Stock

Accumulated Other Comprehensive (Loss)
Income

Number of
Shares

Amount

Unrecognized
Gains (Losses)
on Derivative
Instruments

Pension
Obligations

Cumulative
Translation
Adjustment

Retained
Earnings

Total

BALANCE AT MARCH 31, 2021

25,947,462

$
95,752

$
(10,200
)

$
(7,371
)

$
(105,939
)

$
(12,504
)

$
(40,262
)

Net income

—

—

—

—

—

1,695

1,695

Change in unrecognized gains/losses on
   derivative instruments, net of tax

—

—

15,447

—

—

—

15,447

Change in defined benefit plans, net of taxes

—

—

—

118

—

—

118

Net foreign currency translation adjustment

—

—

—

—

8,410

—

8,410

Common stock issued, net of shares withheld
   for employee taxes

160,000

—

—

—

—

—

—

Stock-based compensation

—

2,484

—

—

—

—

2,484

Redeemable preferred 9% dividend
    and accretion

—

—

—

—

—

(8,422
)

(8,422
)

European non-controlling redeemable equity
   dividend

—

—

—

—

—

(25
)

(25
)

BALANCE AT JUNE 30, 2021

26,107,462

$
98,236

$
5,247

$
(7,253
)

$
(97,529
)

$
(19,256
)

$
(20,555
)

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

NOTE 1 – NATURE OF OPERATIONS AND PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Superior Industries International, Inc.’s (referred herein as the “Company,” “Superior,” or “we” and “our”) principal business is the design and manufacture of aluminum wheels for sale to original equipment manufacturers (“OEMs”) in North America and Europe and to the aftermarket in Europe. We employ approximately ~~7,700~~7,800 full-time employees, operating in 8 manufacturing facilities in North America and Europe. We are one of the largest aluminum wheel suppliers to global OEMs and we believe we are the #1 European aluminum wheel aftermarket manufacturer and supplier. Our OEM aluminum wheels accounted for approximately 9294 percent of our sales in the first ~~six~~three months of ~~2021~~2022 and are primarily sold for factory installation on vehicle models manufactured by BMW (including Mini), ~~Daimler AG Company (Mercedes-Benz, AMG, Smart),~~ Ford, GM, Honda, Jaguar-Land Rover, Lucid Motors, Mazda, Mercedes-Benz Group, Nissan, PSA, Renault, Stellantis, Subaru, ~~Stellantis,~~ Suzuki, Toyota, VW Group (Volkswagen, Audi, SEAT, Skoda, Porsche, Bentley) and Volvo. We ~~also~~ sell aluminum wheels to the European aftermarket under the brands ATS, RIAL, ALUTEC and ANZIO. North America and Europe represent the principal markets for our products, but we have a diversified global customer base consisting of North American, European and Asian OEMs. We have determined that our North American and European operations should be treated as separate reportable segments as further described in Note 5, “Business Segments.”

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements, in our opinion, include all adjustments, of a normal and recurring nature, which are necessary for fair presentation of ~~(i)~~ the condensed consolidated statements of income (loss) for the three and six-month periods ended June 30, 2021 and June 30, 2020, (ii) the condensed consolidated statements of comprehensive income (loss) for the three and six-month periods ended June 30, 2021 and June 30, 2020, (iii) the condensed consolidated balance sheets at June 30, 2021 and December 31, 2020, (iv) the condensed consolidated statements of cash flows for the six-month periods ended June 30, 2021 and June 30, 2020, and (v) the condensed consolidated statements of shareholders’ equity (deficit) for the three and six-month periods ended June 30, 2021 and June 30, 2020.financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and notes thereto filed with the SEC in our ~~2020~~2021 Annual Report on Form 10-K.

Interim financial reporting standards require us to make estimates that are based on assumptions regarding the outcome of future events and circumstances not known at that time. Inevitably, some assumptions will not materialize, unanticipated events or circumstances may occur which vary from those estimates and such variations may significantly affect our future results. Additionally, interim results may not be indicative of our results for future interim periods or our annual results.

~~Certain prior year amounts have been reclassified to conform with the current year presentation.~~

Cash paid for interest was ~~$18.3~~$5.2 million for each of the three months ended March 31, 2022 and March 31, 2021. Net cash income taxes paid was $2.4 million and ~~$21.5~~$2.8 million for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020, respectively. Net cash paid for income taxes was $5.9 million and $5.4 million for the six months ended June 30, 2021 and June 30, 2020,~~ respectively. As of ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020, $7.8~~$6.1 million and ~~$2.9~~$4.3 million, respectively, of equipment had been purchased but not yet paid and was included in accounts payable in our condensed consolidated balance sheets.

ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” As of January 1, 2022, we have adopted this standard on a prospective basis. The standard requires entities to disclose information about any transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. Disclosures under ASU 2021-10 include: information about the nature of the transactions and the related accounting policy used to account for the transactions, the financial statement line items affected by the transactions, the amounts applicable to each financial statement line item and significant terms and conditions of the transactions, including commitments and contingencies. The adoption of this accounting standard did not have a material effect on our financial statements or disclosures since we have not received any significant governmental assistance.

Accounting Standards Update (ASU) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In June 2016, the Financial Accounting Standards Board ~~(“FASB”)~~ issued ASU 2016-13 ~~"Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments",~~ which requires entities to use a new impairment model based on current expected credit losses (“CECL”) rather than incurred losses. Under CECL, estimated credit losses would incorporate relevant information about past events, current conditions and reasonable and supportable forecasts and any expected credit losses would be recognized at the time of sale. ~~The~~As a smaller reporting company (as defined under SEC regulations), the Company is not required to adopt the standard until January 1, 2023. We are evaluating the impact this standard will have on our financial statements and disclosures.

The Company disaggregates revenue from contracts with customers into our reportable segments, North America and Europe. Revenues by segment for the ~~three and six-month~~three-month periods ended ~~June 30,~~March 31, 2022 and March 31, 2021 ~~and June 30, 2020, respectively,~~ are summarized in Note 5, “Business Segments.”

The opening and closing balances of the Company’s customer receivables and current and long-term contract liabilities ~~balances~~ are as follows:

(Dollars in thousands)	June 30, 2021		December 31, 2020		Change			March 31, 2022		December 31, 2021		Change
Customer receivables	$	77,001	$	40,785	$	36,216		$	114,234	$	74,887	$	39,347
Contract liabilities—current		7,376		8,249		(873	)		6,156		6,887		(731	)
Contract liabilities—noncurrent		11,264		13,106		(1,842	)		9,453		10,526		(1,073	)

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis, while other assets and liabilities are measured at fair value on a nonrecurring basis, such as an asset impairment. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values due to the short period of time until maturity.

Our derivatives are over-the-counter customized derivative ~~transactions~~instruments and are not exchange traded. We estimate the fair value of these instruments using ~~industry-standard~~the income valuation ~~models such as discounted cash flow. These models~~approach. Under this approach, we project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates, foreign exchange rates, commodity prices and the contractual terms of the derivative instruments. The discount rate used is the relevant ~~interbank deposit~~benchmark rate (e.g., ~~LIBOR)~~SOFR) plus an adjustment for non-performance risk.

The following tables categorize items measured at fair value as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

			Fair Value Measurement at Reporting Date Using								Fair Value Measurement at Reporting Date Using
June 30, 2021			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022											Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(Dollars in thousands)
Assets
Derivative contracts	$	12,770	$	—	$	12,770	$	—	$	26,154	$	—	$	26,154	$	—
Total	$	12,770	$	—	$	12,770	$	—	$	26,154	$	—	$	26,154	$	—
Liabilities					.								.
Derivative contracts	$	10,502	$	—	$	10,502	$	—	$	17,002	$	—	$	17,002	$	—
Total	$	10,502	$	—	$	10,502	$	—	$	17,002	$	—	$	17,002	$	—

			Fair Value Measurement at Reporting Date Using								Fair Value Measurement at Reporting Date Using
December 31, 2020			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2021											Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(Dollars in thousands)
Assets
Derivative contracts	$	10,218	$	—	$	10,218	$	—	$	10,362	$	—	$	10,362	$	—
Total	$	10,218	$	—	$	10,218	$	—	$	10,362	$	—	$	10,362	$	—
Liabilities													.
Derivative contracts	$	15,259	$	—	$	15,259	$	—	$	19,711	$	—	$	19,711	$	—
Total	$	15,259	$	—	$	15,259	$	—	$	19,711	$	—	$	19,711	$	—

The carrying values of the Company’s debt instruments vary from their fair values. The fair values were determined by reference to transacted prices and quotes for these instruments (Level 2). The estimated fair value, as well as the carrying value, of the Company’s debt instruments are shown below:

	June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
(Dollars in thousands)
Estimated aggregate fair value	$	632,197	$	624,207	$	594,746	$	605,874
Aggregate carrying value ⁽¹⁾		632,941		643,184		610,913		616,215

We use derivatives to partially offset our exposure to foreign currency, interest rate, aluminum and other commodity price risks. We may enter into forward contracts, option contracts, swaps, collars or other derivative instruments to offset some of the risk on expected future cash flows and on certain existing assets and liabilities. However, we may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will fully offset the ~~full~~ financial impact resulting from movements in foreign currency exchange rates, interest rates, and aluminum or other commodity prices.

To help mitigate gross margin fluctuations due to changes in foreign currency exchange rates, certain of our subsidiaries, whose functional currency is the U.S. dollar or the Euro, hedge a portion of their forecasted foreign currency costs denominated in the Mexican Peso and Polish Zloty, respectively. We may hedge portions of our forecasted foreign currency exposure up to 48 months.

We ~~record all derivatives~~account for our derivative instruments as either assets or liabilities and adjust them to fair value each period. For derivative instruments that hedge the exposure to variability in ~~the condensed consolidated balance sheets at fair value. Our accounting treatment for these instruments is based on the hedge designation. Gains or losses on derivatives that~~expected future cash flows and are designated as ~~hedging instruments are~~cash flow hedges, the gain or loss on the derivative instrument is recorded in accumulated other comprehensive income ~~(loss)~~ (“AOCI”) or loss in shareholders’ equity or deficit until the hedged item is recognized in earnings, at which point accumulated gains or losses ~~will be~~are recognized in earnings and classified with the underlying hedged transaction. Derivatives that ~~are~~do not qualify or have not been designated as ~~hedging instruments~~hedges are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. ~~The Company has derivatives that are designated as hedging instruments, as well as derivatives that do not qualify for designation as hedging instruments.~~

The following tables display the fair value of derivatives by balance sheet line item at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

	June 30, 2021								March 31, 2022
	Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities		Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	2,642	$	6,404	$	456	$	2,147	$	7,105	$	6,673	$	2,682	$	12,007
Foreign exchange forward contracts not designated as hedging instruments		277		—		1,237		—		1,136		—		502		—
Aluminum forward contracts designated as hedging instruments		1,609		—		—		—		7,406		—		—		—
Natural gas forward contracts designated as hedging instruments		1,509		329		4		—		3,234		600		32		282
Interest rate swap contracts designated as hedging instruments		—		—		4,754		1,904		—		—		1,497		—
Total derivative financial instruments	$	6,037	$	6,733	$	6,451	$	4,051	$	18,881	$	7,273	$	4,713	$	12,289

	December 31, 2020								December 31, 2021
	Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities		Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	1,218	$	6,531	$	3,435	$	2,645	$	3,161	$	2,194	$	1,845	$	13,565
Foreign exchange forward contracts not designated as hedging instruments		1,167		—		122		—		579		—		3		—
Aluminum forward contracts designated as hedging instruments		262		—		—		—		2,677		39		—		—
Natural gas forward contracts designated as hedging instruments		816		224		22		70		1,294		418		135		276
Interest rate swap contracts designated as hedging instruments		—		—		4,771		4,194		—		—		3,887		—
Total derivative financial instruments	$	3,463	$	6,755	$	8,350	$	6,909	$	7,711	$	2,651	$	5,870	$	13,841

The following table summarizes the notional amount and estimated fair value of our derivative financial instruments:

Notional amounts are presented on a net basis. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the financial ~~risks.~~risks described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates or commodity prices.

The following tables summarize the gain or loss recognized in AOCI, the amounts reclassified from AOCI into earnings and the amounts recognized directly into earnings for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Three Months Ended June 30, 2021	Amount of Gain or (Loss) Recognized in AOCI on Derivatives		Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income		Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
Three Months Ended March 31, 2022								Amount of Gain or (Loss) Recognized in AOCI on Derivatives		Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income		Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)
Derivative Contracts	$	15,447	$	758	$	1,638		$	16,821	$	4,777	$	870
Total	$	15,447	$	758	$	1,638		$	16,821	$	4,777	$	870

Six Months Ended June 30, 2021	Amount of Gain or (Loss) Recognized in AOCI on Derivatives		Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income		Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)
Derivative Contracts	$	6,985	$	319	$	(1,266	)
Total	$	6,985	$	319	$	(1,266	)

Three Months Ended June 30, 2020	Amount of Gain or (Loss) Recognized in AOCI on Derivatives			Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income			Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
Three Months Ended March 31, 2021										Amount of Gain or (Loss) Recognized in AOCI on Derivatives			Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income			Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)
Derivative Contracts	$	15,298		$	(3,980	)	$	1,692		$	(8,462	)	$	(439	)	$	(2,904	)
Total	$	15,298		$	(3,980	)	$	1,692		$	(8,462	)	$	(439	)	$	(2,904	)

Six Months Ended June 30, 2020	Amount of Gain or (Loss) Recognized in AOCI on Derivatives			Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income			Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)
Derivative Contracts	$	(29,999	)	$	(5,094	)	$	(3,747	)
Total	$	(29,999	)	$	(5,094	)	$	(3,747	)

The North American and European businesses represent separate operating segments in view of significantly different markets, customers, and products in each of these regions. Within each of these regions, markets, customers, products, and production processes are similar. Moreover, our business within each region generally leverages common systems, processes, and infrastructure. Accordingly, North America and Europe comprise the Company’s reportable segments.

(Dollars in thousands)	Net Sales				Income (loss) from Operations					Net Sales				Income from Operations
Three Months Ended	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Three months ended										March 31, 2022		March 31, 2021		March 31, 2022		March 31, 2021
North America	$	176,990	$	58,916	$	7,542	$	(19,792	)	$	227,198	$	191,971	$	19,567	$	17,841
Europe		170,474		85,919		7,978		(14,325	)		173,328		166,225		4,070		7,878
	$	347,464	$	144,835	$	15,520	$	(34,117	)	$	400,526	$	358,196	$	23,637	$	25,719

(Dollars in thousands)	Depreciation and Amortization				Capital Expenditures
Three Months Ended	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
North America	$	9,499	$	8,420	$	3,447	$	5,876
Europe		16,110		15,504		6,625		3,020
	$	25,609	$	23,924	$	10,072	$	8,896

(Dollars in thousands)	Net Sales				Income (loss) from Operations					Property, Plant and Equipment, net				Intangible Assets
Six Months Ended	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
										March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
North America	$	368,961	$	214,467	$	25,383	$	(13,683	)	$	218,401	$	214,331	$	—	$	—
Europe		336,699		231,480		15,856		(203,449	)		273,446		280,070		69,533		76,870
	$	705,660	$	445,947	$	41,239	$	(217,132	)	$	491,847	$	494,401	$	69,533	$	76,870

(Dollars in thousands)	Depreciation and Amortization				Capital Expenditures
Six Months Ended	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
North America	$	18,720	$	17,225	$	8,107	$	12,436
Europe		32,250		31,091		12,444		10,325
	$	50,970	$	48,316	$	20,551	$	22,761


(Dollars in thousands)	Three Months Ended				Six Months Ended				Net Sales
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Net sales:
Three months ended									March 31, 2022		March 31, 2021
U.S.	$	1,549	$	3,619	$	2,819	$	19,796	$	1,658	$	1,270
Mexico		175,441		55,297		366,142		194,671		225,540		190,701
Germany		62,511		33,726		123,398		83,764		54,088		60,887
Poland		107,963		52,193		213,301		147,716		119,240		105,338
Consolidated net sales	$	347,464	$	144,835	$	705,660	$	445,947	$	400,526	$	358,196


(Dollars in thousands)					Property, Plant and Equipment, net				Property, Plant and Equipment, net
					June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
U.S.					$	4,343	$	7,324	$	1,899	$	2,152
Mexico						204,673		212,821		216,502		212,179
Germany						82,527		82,162		77,542		76,849
Poland						211,543		219,817		195,904		203,221
Property, plant and equipment, net					$	503,086	$	522,124	$	491,847	$	494,401

	June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
(Dollars in thousands)
Raw materials	$	48,401	$	46,712	$	54,107	$	47,392
Work in process		64,054		45,394		72,192		54,891
Finished goods		85,535		62,874		82,006		69,816
Inventories, net	$	197,990	$	154,980	$	208,305	$	172,099

Service wheel and supplies inventory included in other non-current assets in the condensed consolidated balance sheets totaled ~~$10.3 million and $12.1~~$9.7 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively.~~2021.

	June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
(Dollars in thousands)
Land and buildings	$	148,579		$	149,295		$	131,489		$	129,826
Machinery and equipment		873,928			899,764			884,009			861,097
Leasehold improvements and others		14,296			14,912			9,741			9,831
Construction in progress		44,983			46,718			62,250			67,529
		1,081,786			1,110,689			1,087,489			1,068,283
Accumulated depreciation		(578,700	)		(588,565	)		(595,642	)		(573,882	)
Property, plant and equipment, net	$	503,086		$	522,124		$	491,847		$	494,401

Depreciation expense for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~was $18.9 million and $37.6 million, respectively.~~

~~Depreciation expense for the three and six months ended June 30, 2020~~ was $17.8 million and ~~$36.1~~$18.7 million, respectively.

At March 31, 2020, the impact of COVID-19 and uncertainty with respect to the economic effects of the pandemic had introduced significant volatility in the financial markets and was having a widespread adverse effect on the automotive industry. In response to the COVID-19 pandemic, our key customers temporarily closed nearly all their production facilities in Europe and North America (our primary markets) during the quarter ended March 31, 2020. As a result, we concluded that an interim test of our goodwill was required

The Company’s finite-lived intangible assets as of March 31, 2020. More specifically, the Company concluded that the following events and circumstances, in the aggregate, indicated that it was more likely than not that the carrying value of our European reporting unit exceeded its fair value: (1) our European reporting unit’s carrying value was effectively set to fair value at December 31, 2019, due to the $102.2 million impairment charges to goodwill and indefinite-lived intangibles, (2) lower forecasted 2020 industry production volumes for Western and Central Europe, including those for our primary European customers, due to OEM shutdowns to mitigate COVID-19 spread and subsequent reduced production levels over the remainder of the year, as compared to our prior production forecasts (including estimates used in our 2019 assessment) and (3) the volatility in financial markets that had both increased European interest rates due to rising credit spreads and risk premiums and lowered median European automotive market multiples. Based on the results of our quantitative analysis, we recognized a non-cash goodwill impairment charge equal to the remaining goodwill balance of $182.6 million since the carrying value exceeded the fair value of the European reporting unit by more than the amount of the goodwill balance at March 31, 2020. ~~Additionally,~~ we recognized a non-cash impairment charge of $11.0 million related to our aftermarket trade name indefinite-lived intangible asset which was primarily attributable to a further decline in forecasted aftermarket revenues and a decline in associated profitability. Total impairment charges of $193.6 million were recognized as a separate charge at March 31, 2020 and included in income (loss) from operations.

We utilized both an income and a market approach, weighted 75 percent and 25 percent respectively, to determine the fair value of the European reporting unit as part of our goodwill impairment assessment. The income approach is based on projected debt-free cash flow, which is discounted to the present value using discount factors that consider the timing and risk of cash flows. The discount rate used is the weighted average of an estimated cost of equity and of debt (“weighted average cost of capital”). The weighted average cost of capital is adjusted as necessary to reflect risk associated with the business of the European reporting unit. Financial projections are based on estimated production volumes, product prices and expenses, including raw material cost, wages, energy and other expenses. Other significant assumptions include terminal value cash flow and growth rates, future capital expenditures and changes in future working capital requirements. The market approach is based on the observed ratios of enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA) of comparable, publicly traded companies. The market approach fair value is determined by multiplying historical and anticipated financial metrics of the European reporting unit by the EBITDA pricing multiples derived from comparable, publicly traded companies.

At March 31, 2020, we determined that the carrying value of the European reporting unit exceeded its fair value by an amount greater than the remaining goodwill balance. The decline in fair value was primarily due to significantly lower market multiples and increased discount rates, as well as further declines in forecasted industry production volumes in Western and Central Europe as a result of the COVID-19 pandemic and consequent economic instability. Forecasted revenues, EBITDA and cash flow for the European reporting unit also declined as compared to the prior year long-range plan due to lower forecasted industry production volumes which adversely impacted fair value under both the income and market approaches. Significant assumptions used under the income approach included a weighted average cost of capital (WACC) of 12.0 percent and a long-term growth rate of 1.5 percent, as compared to 10.0 percent and 2.0 percent, respectively, used in the 2019 assessment. In determining the WACC, management considered the level of risk inherent in the cash flow projections and current market conditions, including the significant increase in credit spreads and systemic market and Company specific risk premiums. The decline in the fair value under the market approach is attributable to the decline in the average EBITDA market multiple (4.9X EBITDA in 2020, 5.7X EBITDA in 2019) and ~~lower forecasted EBITDA, as compared to the 2019 assessment~~. The use of these unobservable inputs results in classification of the fair value estimate as a Level 3 measurement in the fair value hierarchy. A considerable amount of management judgment and assumptions are required in ~~performing~~ the quantitative impairment test, principally related to determining the fair value of the reporting unit. While the Company believes its judgments and assumptions are reasonable, different assumptions could change the estimated fair value.

~~Following is a summary of the Company’s finite-lived and indefinite-lived intangible assets and goodwill as of June 30, 2021~~2022 and December 31, ~~2020.~~2021 are summarized in the following table.

As of June 30, 2021	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Currency Translation			Net Carrying Amount		Remaining Weighted Average Amortization Period
As of March 31, 2022															Gross Carrying Amount		Accumulated Amortization			Currency Translation		Net Carrying Amount		Remaining Weighted Average Amortization Period
(Dollars in thousands)
Brand name	$	9,000	$	—		$	(7,577	)	$	322		$	1,745	1-2	$	9,000	$	(8,954	)	$	252	$	298	1-2
Technology		15,000		—			(12,628	)		537			2,909	2		15,000		(14,924	)		420		496	2
Customer relationships		167,000		—			(85,132	)		7,420			89,288	2-7		167,000		(100,610	)		2,349		68,739	2-7
Total finite		191,000		—			(105,337	)		8,279			93,942
Trade names		14,000		(13,772	)		—			(228	)		—	Indefinite
Total intangibles	$	205,000	$	(13,772	)	$	(105,337	)	$	8,051		$	93,942
Total finite-lived intangibles															$	191,000	$	(124,488	)	$	3,021	$	69,533

As of December 31, 2020	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Currency Translation			Net Carrying Amount		Remaining Weighted Average Amortization Period
Year Ended December 31, 2021															Gross Carrying Amount		Accumulated Amortization			Currency Translation		Net Carrying Amount		Remaining Weighted Average Amortization Period
(Dollars in thousands)
Brand name	$	9,000	$	—		$	(6,615	)	$	399		$	2,784	2-3	$	9,000	$	(8,503	)	$	258	$	755	1-2
Technology		15,000		—			(11,024	)		666			4,642	1-3		15,000		(14,172	)		430	$	1,258	2
Customer relationships		167,000		—			(74,322	)		10,692			103,370	3-8		167,000		(95,540	)		3,397	$	74,857	2-7
Total finite		191,000		—			(91,961	)		11,757			110,796
Trade names		14,000		(13,772	)		—			(228	)		—	Indefinite
Total intangibles	$	205,000	$	(13,772	)	$	(91,961	)	$	11,529		$	110,796
Total finite-lived intangibles															$	191,000	$	(118,215	)	$	4,085	$	76,870

Amortization expense for these intangible assets was $6.2 million and $6.7 million ~~and $6.1 million~~for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively. Amortization expense for the six months ended June 30, 2021 and 2020 was $13.4 million and $12.2 million,~~ respectively. The anticipated annual amortization expense for these intangible assets is ~~$26.5 million for 2021, $23.5~~$22.1 million for 2022, ~~and $21.4~~$20.1 million for 2023 and 2024, ~~and $10.5~~$9.9 million for ~~2025.~~2025 and $2.6 million for 2026.

A summary of long-term debt and the related weighted average interest rates is shown below:

	June 30, 2021 (Dollars in Thousands)											March 31, 2022 (Dollars in Thousands)
Debt Instrument	Total Debt		Debt Issuance Costs ⁽¹⁾			Total Debt, Net			Weighted Average Interest Rate			Total Debt		Debt Issuance Costs ⁽¹⁾			Total Debt, Net			Weighted Average Interest Rate
Term Loan Facility	$	349,200	$	(5,251	)	$	343,949			4.1	%	$	349,200	$	(3,891	)	$	345,309			4.2	%
6.00% Senior Notes		258,224		(3,933	)		254,291			6.0	%		242,206		(3,195	)		239,011			6.0	%
European CapEx Loans		22,212		—			22,212			2.3	%
Finance Leases		3,305		—			3,305			2.8	%
European CapEx loans													17,066		—			17,066			2.3	%
Finance leases													2,441		—			2,441			2.8	%
	$	632,941	$	(9,184	)		623,757					$	610,913	$	(7,086	)		603,827
Less: Current portion							(6,545	)										(5,971	)
Long-term debt						$	617,212										$	597,856

	December 31, 2020 (Dollars in Thousands)											December 31, 2021 (Dollars in Thousands)
Debt Instrument	Total Debt		Debt Issuance Costs ⁽¹⁾			Total Debt, Net			Weighted Average Interest Rate			Total Debt		Debt Issuance Costs ⁽¹⁾			Total Debt, Net			Weighted Average Interest Rate
Term Loan Facility	$	349,200	$	(7,155	)	$	342,045			4.1	%	$	349,200	$	(4,338	)	$	344,862			4.1	%
6.00% Senior Notes		266,928		(4,425	)		262,503			6.0	%		245,809		(3,441	)		242,368			6.0	%
European CapEx Loans		23,668		—			23,668			2.3	%
Finance Leases		3,388		—			3,388			3.0	%
European CapEx loans													18,595		—			18,595			2.3	%
Finance leases													2,611		—			2,611			2.8	%
	$	643,184	$	(11,580	)		631,604					$	616,215	$	(7,779	)		608,436
Less: Current portion							(6,112	)										(6,081	)
Long-term debt						$	625,492										$	602,355

On June 15, 2017, the Company issued €250.0 million aggregate principal amount of 6.00 percent Senior Notes (“Notes”) due June 15, 2025. Interest on the Notes is payable semiannually, on June 15 and December 15. The Company may redeem the Notes, in whole or in part, on or after June 15, 2021 at a redemption price of 101.5 percent and on or after June 15, 2022 at a redemption price of 100 percent, in each case plus any accrued and unpaid interest ~~as of~~to, but not including, the applicable redemption date. If we experience a change of control or sell certain assets, the Company may be required to offer to purchase the Notes from the holders. The Notes are senior unsecured obligations ranking equally in right of payment with all of its existing and future senior indebtedness and senior in right of payment to any subordinated indebtedness. The Notes are effectively subordinated in right of payment to the existing and future secured indebtedness of the Company, including the Senior Secured Credit Facilities (as defined below), to the extent of the assets securing such indebtedness.

The Notes are unconditionally guaranteed by all material wholly-owned direct and indirect domestic restricted subsidiaries of the Company (the “Subsidiary Guarantors”), with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract, or would result in adverse tax consequences.

Subject to certain exceptions, the indenture governing the Notes contains restrictive covenants that, among other things, limit the ability of the Company and the Subsidiary Guarantors to: (i) incur additional indebtedness or issue certain preferred stock; (ii) pay dividends on, or make distributions in respect of, their capital stock; (iii) make certain investments or other restricted payments; (iv) sell certain assets or issue capital stock of restricted subsidiaries; (v) create liens; (vi) merge, consolidate, transfer or dispose of substantially all of their assets; and (vii) engage in certain transactions with affiliates. These covenants are subject to several important limitations and exceptions that are described in the indenture.

The indenture provides for customary events of default that include, among other things (subject in certain cases to customary grace and cure periods): (i) nonpayment of principal, premium, if any, and interest, when due; (ii) failure for 60 days to comply with any obligations, covenants or agreements in the indenture after receipt of written notice from the Bank of New York Mellon, London Branch (“the Trustee”) or holders of at least 30 percent in principal amount of the then outstanding Notes of such failure (other than defaults referred to in the foregoing clause (i)); (iii) default under any mortgage, indenture or instrument for money borrowed by the Company or certain of its subsidiaries, (iv) a failure to pay certain judgments; and (iv) certain events of bankruptcy and insolvency. If an event of default occurs and is continuing, the Trustee or holders of at least 30 percent in principal amount of the then outstanding Notes may declare the principal, premium, if any, and accrued and unpaid interest on all the Notes to be due and payable. These events of default are subject to several important qualifications, limitations and exceptions that are described in the indenture. As of ~~June 30, 2021,~~March 31, 2022, the Company was in compliance with all covenants under the indenture governing the Notes.

On March 22, 2017, the Company entered into a senior secured credit agreement (“Credit Agreement”) with certain banks and other lenders. The Credit Agreement consisted of a $400.0 million senior secured term loan facility (“Term Loan Facility”), which matures on May 23, 2024, and a $160.0 million revolving credit facility originally maturing on May 23, 2022 (the “Revolving Credit Facility”), together with the Term Loan Facility, the USD Senior Secured Credit Facilities (“USD SSCF”). On May 3, 2021, the Company extended the term of the Revolving Credit Facility under its USD SSCF and reduced the commitment under the facility from $160.0 million to $132.5 million, with $25.0 million of the commitment maturing May 23, 2022 and the remaining $107.5 million maturing October 31, 2023. The extension was treated as a modification of the revolving credit facility and the related debt issuance costs have been recognized as a deferred charge in other non-current assets and are being amortized ratably over the remaining term of the extended facility.

Borrowings under the Term Loan Facility will bear interest at a rate equal to, at the Company’s option, either (a) LIBOR for the relevant interest period, adjusted for statutory requirements, subject to a floor of 0.00 percent per annum, plus an applicable rate of 4.00 percent or (b) a base rate, subject to a floor of 2.00 percent per annum, equal to the highest of (1) the rate of interest in effect as publicly announced by the administrative agent as its prime rate, (2) the federal funds rate plus 0.50 percent and (3) LIBOR for an interest period of one month plus 1.00 percent, in each case, plus an applicable rate of 3.00 percent.

Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) LIBOR for the relevant interest period, with a floor of 0.00 percent per annum, plus the applicable rate or (b) a base rate, with a floor of 0.00 percent, equal to the highest of (1) the rate of interest in effect as publicly announced by the administrative agent as its prime rate, (2) the federal funds effective rate plus 0.50 percent and (3) LIBOR for an interest period of one month plus 1.00 percent, in each case, plus the applicable rate. The applicable rates for borrowings under the Revolving Credit Facility are based upon the First Lien Net Leverage Ratio effective for the preceding quarter, with LIBOR applicable rates ranging between 3.50 percent and 3.00 percent, currently ~~3.25~~3.00 percent, and base rate applicable rates ranging between 2.50 percent and 2.00 percent, currently ~~2.25~~2.00 percent. Commitment fees for the unused commitment under the Revolving Credit Facility are also based upon the First Lien Net Leverage Ratio, effective for the preceding quarter, and range between 0.50 percent and 0.25 percent for the commitment maturing May 23, 2022, currently ~~0.375~~0.25 percent, and between 0.625 percent and 0.375 percent for the remaining commitment maturing October 31, 2023, currently ~~0.50~~0.375 percent. Commitment fees are included in interest expense.

As of ~~June 30, 2021,~~March 31, 2022, the Company had repaid $50.8 million under the Term Loan Facility resulting in a balance of $349.2 million. In addition, the Company had 0 borrowings outstanding under the Revolving Credit Facility, outstanding letters of credit of $4.8 million and available unused commitments under this facility of $127.7 million as of ~~June 30, 2021.~~March 31, 2022.

Our obligations under the Credit Agreement are unconditionally guaranteed by the Subsidiary Guarantors, with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in adverse tax consequences. The guarantees of such obligations, will be secured, subject to permitted liens and other exceptions, by substantially all of our assets and the Subsidiary Guarantors’ assets, including but not limited to: (i) a perfected pledge of all of the capital stock issued by each of the Subsidiary Guarantors (subject to certain exceptions) and up to 65 percent of the capital stock issued by each direct wholly-owned foreign restricted subsidiary of the Company (subject to certain exceptions) and (ii) perfected security interests in and mortgages on substantially all tangible and intangible personal property and material fee-owned real property of the Company and the Subsidiary Guarantors (subject to certain exceptions and exclusions).

The Credit Agreement contains a number of restrictive covenants that, among other things, restrict, subject to certain exceptions, our ability to incur additional indebtedness and guarantee indebtedness, create or incur liens, engage in mergers or consolidations, sell, transfer or otherwise dispose of assets, make investments, acquisitions, loans or advances, pay dividends, distributions or other restricted payments, or repurchase our capital stock. The Credit Agreement also restricts our ability to prepay, redeem, or repurchase any subordinated indebtedness, enter into agreements which limit our ability to incur liens on our assets or that restrict the ability of restricted subsidiaries to pay dividends or make other restricted payments to us, and enter into certain transactions with our affiliates. Solely with respect to the Revolving Credit Facility, the Credit Agreement also requires a Total Net Leverage Ratio (calculated as defined in the Credit Agreement) of not more than 4.5 to 1.0 as of each fiscal quarter-end.

In addition, the Credit Agreement contains customary default provisions, representations and warranties and other covenants. The Credit Agreement also contains a provision permitting the Lenders to accelerate the repayment of all loans outstanding under the USD SSCF during an event of default. As of ~~June 30, 2021,~~March 31, 2022, the Company was in compliance with all covenants under the Credit Agreement.

In connection with the acquisition of UNIWHEELS AG, the Company assumed $70.7 million of outstanding debt. At ~~June 30, 2021, $8.7~~March 31, 2022, $6.0 million of the assumed debt remained outstanding. This debt matures March 31, 2024 and is collateralized by financed equipment, guaranteed by Superior and bears interest at 2.2 percent. Covenants under the loan agreement include a default provision for non-payment, as well as a material adverse change default provision pursuant to which the lender could accelerate the loan maturity. As of ~~June 30, 2021,~~March 31, 2022, the Company was in compliance with all covenants under the loan agreement.

During the second quarter of 2021, the Company amended its European Revolving Credit Facility (“EUR SSCF”), extending the term to May 22, 2023 and increasing the applicable margin and commitment fees, while maintaining the €60.0 million commitment. All other terms of the EUR SSCF remained unchanged. At ~~June 30, 2021,~~March 31, 2022, the Company had 0 borrowings outstanding, outstanding letters of credit of ~~$0.5~~$0.4 million (€0.4million) and available unused commitments under this facility of ~~$70.9~~$66.5 million (€59.6 million). The EUR SSCF bears interest at Euribor (with a floor of 0.00 percent) plus a margin (ranging from 2.05 percent to 3.50 percent based on the net debt leverage ratio of Superior Industries Europe AG and its wholly owned subsidiaries, collectively “Superior Europe AG”), currently 2.05 percent. The annual commitment fee for unused commitments (ranging from 0.625 percent to 1.225 percent based on the net debt leverage ratio of Superior Europe AG) is currently 0.625 percent per annum. In addition, a management fee is assessed equal to 0.07 percent of borrowings outstanding at each month end. The commitment fee is included in interest expense. Superior Europe AG has pledged substantially all of its assets, including land and buildings, receivables, inventory, and other moveable assets (other than collateral associated with equipment loans) as collateral under the EUR SSCF.

The EUR SSCF is subject to a number of restrictive covenants that, among other things, restrict, subject to certain exceptions, the ability of Superior Europe AG to incur additional indebtedness and guarantee indebtedness, create or incur liens, engage in mergers or consolidations, sell, transfer or otherwise dispose of assets, make investments, acquisitions, loans or advances, pay dividends or distributions, or repurchase our capital stock, prepay, redeem, or repurchase any subordinated indebtedness, and enter into agreements which limit our ability to incur liens on our assets. In addition, the EUR SSCF includes an annual pay down provision requiring outstanding balances to be repaid but not reborrowed for a period of three business days and a material adverse change default provision pursuant to which the lender could accelerate the loan maturity. At ~~June 30, 2021,~~March 31, 2022, Superior Europe AG was in compliance with all covenants under the EUR SSCF.

The balance of certain post-acquisition equipment loans was ~~$13.5~~$11.1 million as of ~~June 30, 2021.~~March 31, 2022. The loans bear interest at 2.3 percent, mature September 30, 2027 and require quarterly principal and interest payments. The loans are secured with liens on the financed equipment and are subject to covenants that, among other things, include a material adverse change default provision pursuant to which the lender could accelerate the loan maturity, as well as a provision that restricts the ability of Superior Europe AG to reduce its ownership interest in Superior Industries Production Germany GmbH, its wholly-owned subsidiary and the borrower under the loan. The Company drew down ~~€10.6~~€10.6 million on these equipment loans in the first quarter of 2020 and drew the remaining €1.4 million in the first quarter of 2021. Quarterly installment payments of $0.5 million (€0.4 million) under the loan agreements began in June of 2021. At ~~June 30, 2021,~~March 31, 2022, the Company was in compliance with all covenants under the loans.

Debt maturities as of ~~June 30, 2021,~~March 31, 2022, which are due in the next five years and thereafter, are as follows:


(Dollars in thousands)
Debt Maturities	Amount		Amount
Six remaining months of 2021	$	3,374
2022		6,450
Nine remaining months of 2022			$	4,715
2023		6,031		5,720
2024		352,418		352,277
2025		260,563		244,407
2026				2,095
Thereafter		4,105		1,699
Total debt liabilities	$	632,941	$	610,913

During 2017, we issued 150,000 shares of Series A (140,202 shares) and Series B (9,798 shares) Perpetual Convertible Preferred Stock, par value $0.01 per share for $150.0 million. On August 30, 2017, the Series B shares were converted into Series A redeemable preferred stock, the “redeemable preferred stock,” after approval by our shareholders. The redeemable preferred stock has an initial stated value of $1,000 per share, par value of $0.01 per share and liquidation preference over common stock.

The redeemable preferred stock is convertible into shares of our common stock equal to the number of shares determined by dividing the sum of the stated value and any accrued and unpaid dividends by the conversion price of $28.162. The redeemable preferred stock

accrues dividends at a rate of 9.0 percent per annum, payable at our election either in-kind or in cash and is also entitled to participate in dividends on common stock in an amount equal to that which would have been due had the shares been converted into common stock.

We may mandate conversion of the redeemable preferred stock if the price of the common stock exceeds $84.49. The holder may redeem the shares upon the occurrence of any of the following events (referred to as a “redemption event”): a change in control, recapitalization, merger, sale of substantially all of the Company’s assets, liquidation or delisting of the Company’s common stock. In addition, the holder has the right, at its option, to unconditionally redeem the shares at any time after September 14, 2025. We may, at our option, redeem in whole at any time all of the shares of redeemable preferred stock outstanding. At redemption by either party, the redemption value will be the greater of two times the initial face value ($150.0 million) and any accrued unpaid dividends or dividends paid-in-kind, currently $300.0 million, or the product of the number of common shares into which the redeemable preferred stock could be converted (5.3 million shares currently) and the then current market price of the common stock. We have determined that the conversion option and the redemption option exercisable upon occurrence of a “redemption event” which are embedded in the redeemable preferred stock must be accounted for separately from the redeemable preferred stock as a derivative liability.

Since the redeemable preferred stock may be redeemed at the option of the holder, but is not mandatorily redeemable, the redeemable preferred stock has been classified as mezzanine equity and initially recognized at fair value of $150.0 million (the proceeds on the date of issuance) less issuance costs of $3.7 million and $10.9 million assigned to the embedded derivative liability at date of issuance, resulting in an initial value of $135.5 million.

The difference between the redemption value of the redeemable preferred stock and the carrying value (the “premium”) is being accreted over the period from the date of issuance through September 14, 2025 using the effective interest method. The accretion is treated as a deemed dividend, recorded as a charge to retained earnings and deducted in computing earnings per share (analogous to the treatment for stated and participating dividends paid on the redeemable preferred stock). The cumulative premium accretion as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was ~~$53.9~~$69.9 million and ~~$43.9~~$64.4 million, respectively, resulting in adjusted redeemable preferred stock balances of ~~$189.4~~$205.4 million and ~~$179.4~~$199.9 million, respectively.

On May 30, 2017, the Company acquired 92.3 percent of the outstanding shares of UNIWHEELS AG. Subsequently, the Company commenced a delisting and associated tender offer for the remaining shares. On January 17, 2018, the Company entered into a Domination and Profit and Loss Transfer agreement (“DPLTA”) retroactively effective as of January 1, 2018 pursuant to which we offered to purchase the remaining outstanding shares at €62.18. This price may be subject to change based on appraisal proceedings initiated by the minority shareholders which have not yet been concluded. The Company must also pay an annual dividend of €3.23 as long as the DPLTA is in effect. For any shares tendered prior to the annual dividend payment, we must pay interest at a statutory rate, currently 4.12 percent, in place of the dividend. As a result of purchases pursuant to the tender offer and the DPLTA, the Company has increased its ownership to 99.9 percent as of June 30, 2021. The following table summarizes the European non-controlling redeemable equity activity through the period ended June 30, 2021:

Basic earnings per share is computed by dividing net income (loss), after deducting preferred dividends and accretion and European non-controlling redeemable equity dividends, by the weighted average number of common shares outstanding. For purposes of calculating diluted earnings per share, the weighted average shares outstanding includes the dilutive effect of outstanding stock options and time and performance based restricted stock units under the treasury stock method. The redeemable preferred shares discussed in Note 10, “Redeemable Preferred Stock” have not been included in the diluted earnings per share because the inclusion of such shares on an as converted basis would be anti-dilutive for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.


	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
(Dollars in thousands, except per share amounts)
Basic Earnings Per Share:
Net income (loss)	$	1,695		$	(43,218	)	$	14,817		$	(233,300	)
Net income													$	10,070		$	13,122
Less: Redeemable preferred stock dividends and accretion		(8,422	)		(7,905	)		(16,712	)		(15,755	)		(8,910	)		(8,290	)
Less: European non-controlling redeemable equity dividend		(25	)		(26	)		(38	)		(46	)		(11	)		(13	)
Basic numerator	$	(6,752	)	$	(51,149	)	$	(1,933	)	$	(249,101	)	$	1,149		$	4,819
Basic loss per share	$	(0.26	)	$	(2.00	)	$	(0.07	)	$	(9.81	)
Basic earnings per share													$	0.04		$	0.19
Weighted average shares outstanding – Basic		25,974			25,562			25,841			25,403			26,397			25,707
Diluted Earnings Per Share:
Net income (loss)	$	1,695		$	(43,218	)	$	14,817		$	(233,300	)
Net income													$	10,070		$	13,122
Less: Redeemable preferred stock dividends and accretion		(8,422	)		(7,905	)		(16,712	)		(15,755	)		(8,910	)		(8,290	)
Less: European non-controlling redeemable equity dividend		(25	)		(26	)		(38	)		(46	)		(11	)		(13	)
Diluted numerator	$	(6,752	)	$	(51,149	)	$	(1,933	)	$	(249,101	)	$	1,149		$	4,819
Diluted loss per share	$	(0.26	)	$	(2.00	)	$	(0.07	)	$	(9.81	)
Diluted earnings per share													$	0.04		$	0.18
Weighted average shares outstanding – Basic		25,974			25,562			25,841			25,403			26,397			25,707
Dilutive effect of common share equivalents		—			—			—			—			1,017			980
Weighted average shares outstanding – Diluted		25,974			25,562			25,841			25,403			27,414			26,687

The estimated annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates and applied to year-to-date ordinary income. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances, settlements with taxing authorities and effects of changes in tax laws or rates, are reported in the interim period in which they occur.

The income tax provision for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 was ~~$0.9~~$3.5 million ~~and $1.7 million, respectively,~~ on a pre-tax income of ~~$2.6 million and $16.5~~$13.6 million, resulting in an effective income tax ~~rates~~rate of ~~35.2 percent and 10.4 percent, respectively.~~25.9 percent. The effective income tax rate for the three months ended ~~June 30,~~March 31, 2022 differs from the statutory rate primarily due to U.S. and Germany valuation allowances, the reversal of an uncertain tax position and the mix of earnings among tax jurisdictions.

The income tax provision for the three months ended March 31, 2021 ~~differs~~was $0.8 million on pre-tax earnings of $13.9 million, resulting in an effective income tax rate of 5.8 percent. The effective income tax rate for the three months ended March 31, 2021 differed from the statutory rate primarily due to U.S. valuation allowances, the reversal of an uncertain tax position and the mix of earnings among tax jurisdictions, partially offset by a favorable adjustment to a tax credit. The effective income tax rate for the six months ended June 30, 2021 differs from the statutory rate primarily due to a favorable adjustment to a tax credit and the reversal of an uncertain tax position, partially offset by the mix of earnings among tax jurisdictions and U.S. valuation allowances. jurisdictions.

The income tax benefit for the three and six months ended June 30, 2020 was $3.8 million and $7.2 million, respectively, on pre-tax losses of $47.0 million and $240.5 million, resulting in effective income tax rates of 8.0 percent and 3.0 percent, respectively. The effective income tax rate for the three months ended June 30, 2020 differed from the statutory rate primarily due to the mix of earnings among tax jurisdictions partially offset by the recognition of a valuation allowance on non-deductible interest. The effective income tax rate for the six months ended June 30, 2020 was lower than the statutory rate primarily due to the mix of earnings among tax jurisdictions and the impairment of goodwill for which there is no corresponding tax benefit, partially offset by the recognition of a valuation allowance on non-deductible interest.

The Company determines whether an arrangement is or contains a lease at the inception of the arrangement. Operating leases are included in other non-current assets, accrued expenses and other non-current liabilities in our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, net, short-term debt, and long-term debt (less current portion) in our condensed consolidated balance sheets.

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Finance and operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. Since we generally do not have access to the interest rate implicit in the lease, the Company uses our incremental borrowing rate (for fully collateralized debt) at the inception of the lease in determining the present value of the lease payments. The implicit rate is, however, used where readily available. Lease expense under operating leases is recognized on a straight-line basis over the term of the lease. Certain of our leases contain both lease and non-lease components, which are accounted for separately.

The Company has operating and finance leases for office facilities, a data center and certain equipment. The remaining terms of our leases range from over one year to ~~eight~~seven years. Certain leases include options to extend the lease term for up to ten years, as well as options to terminate which have been excluded from the term of the lease since exercise of these options is not reasonably certain.

Lease expense and cash flow for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ and operating and finance lease assets and liabilities, average lease term and average discount rate as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows:

	Three Months Ended				Six Months Ended						Three Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
(Dollars in thousands)
Lease Expense
Finance lease expense:
Amortization of right-of-use assets	$	350	$	290	$	671		$	644		$	314		$	321
Interest on lease liabilities		23		20		45			42			15			22
Operating lease expense		791		835		1,648			1,680			686			857
Total lease expense	$	1,164	$	1,145	$	2,364		$	2,366		$	1,015		$	1,200

Cash Flow Components
Cash paid for amounts included in the measurement of lease liabilities
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from finance leases	$	23	$	20	$	45		$	42		$	15		$	22
Operating cash outflows from operating leases		871		873		1,803			1,764			758			932
Financing cash outflows from finance leases		357		255		645			547			304			288
Right-of-use assets obtained in exchange for finance lease liabilities, net of terminations and disposals		79		72		835			220			124			756
Right-of-use assets obtained in exchange for operating lease liabilities, net of terminations and disposals		56		215		208			280			171			152


					June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
(Dollars in thousands, except lease term and discount rate)
Balance Sheet Information
Operating leases:
Other non-current assets					$	12,245		$	13,598		$	10,230		$	10,772
Accrued liabilities					$	(2,613	)	$	(2,868	)	$	(2,308	)	$	(2,371	)
Other non-current liabilities						(10,257	)		(11,513	)		(8,318	)		(8,860	)
Total operating lease liabilities					$	(12,870	)	$	(14,381	)	$	(10,626	)	$	(11,231	)

Finance leases:
Property, plant and equipment gross					$	6,938		$	5,735		$	6,743		$	6,603
Accumulated depreciation						(3,990	)		(3,319	)		(4,958	)		(4,644	)
Property, plant and equipment, net					$	2,948		$	2,416		$	1,785		$	1,959
Current portion of long-term debt					$	(1,188	)	$	(1,113	)	$	(947	)	$	(982	)
Long-term debt (less current portion)						(2,117	)		(2,275	)		(1,494	)		(1,629	)
Total finance lease liabilities					$	(3,305	)	$	(3,388	)	$	(2,441	)	$	(2,611	)

Lease Term and Discount Rates
Weighted-average remaining lease term - finance leases (years)						3.5			3.9			3.4			3.4
Weighted-average remaining lease term - operating leases (years)						5.4			6.1			5.0			5.0
Weighted-average discount rate - finance leases						2.8	%		3.0	%		2.8	%		2.8	%
Weighted-average discount rate - operating leases						3.7	%		3.8	%		3.6	%		3.6	%

~~Summarized future~~Future minimum payments under our leases as of ~~June 30, 2021~~March 31, 2022 are as follows:

	Amount						Amount
(Dollars in thousands)
Lease Maturities	Finance Leases			Operating Leases			Finance Leases			Operating Leases
Six remaining months of 2021	$	696		$	1,589
2022		1,093			2,838
Nine remaining months of 2022							$	947		$	2,066
2023		675			2,472			696			2,484
2024		241			2,228			285			2,227
2025		155			2,171			152			2,080
2026								127			1,951
Thereafter		605			2,834			340			731
Total		3,465			14,132			2,547			11,539
Less: Imputed interest		(160	)		(1,262	)		(106	)		(913	)
Total lease liabilities, net of interest	$	3,305		$	12,870		$	2,441		$	10,626

We have an unfunded salary continuation plan covering certain directors, officers and other key members of management. Subject to certain vesting requirements, the plan provides for a benefit based on final average compensation, which becomes payable on the employee’s death or upon attaining age 65, if retired. The plan was closed to new participants effective February 3, 2011.

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, payments to retirees or their beneficiaries totaled ~~approximately $0.7~~$0.3 million. We presently anticipate benefit payments in ~~2021~~2022 to total ~~approximately~~ $1.4 million. The following table summarizes the components of net periodic pension cost for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020		March 31, 2022		March 31, 2021
(Dollars in thousands)
Interest cost	$	206	$	251	$	412	$	502	$	218	$	206
Net amortization		97		72		194		144		83		97
Net periodic pension cost	$	303	$	323	$	606	$	646	$	301	$	303

Our 2018 Equity Incentive Plan (the “Plan”) was approved by stockholders in May 2018, authorizing us to issue up to 4.35 million shares of common stock, along with non-qualified stock options, stock appreciation rights, restricted stock units and performance restricted stock units to our officers, key employees, non-employee directors and consultants. In May 2021, the stockholders approved an amendment to the Plan that, among other things, increased the authorized shares by 2 million. At ~~June 30, 2021,~~March 31, 2022, there were ~~1.3~~0.3 million shares available for future grants under this Plan. It is our policy to issue shares from authorized but not issued shares upon the exercise of stock options.

Under the terms of the Plan, each year eligible participants are granted time value restricted stock units (“RSUs”), vesting ratably over a three-year period, and performance restricted stock units (“PSUs”), with a three-year cliff vesting. Upon vesting, each restricted stock award is exchangeable for one share of the Company’s common stock, with accrued dividends.

~~Restricted stock unit~~RSU, PSU and ~~restricted performance stock unit~~option activity for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 is summarized in the following table:

	Equity Incentive Awards															Equity Incentive Awards
	Restricted Stock Units			Weighted Average Grant Date Fair Value		Performance Shares			Weighted Average Grant Date Fair Value		Options			Weighted Average Exercise Price		Restricted Stock Units			Weighted Average Grant Date Fair Value		Performance Shares			Weighted Average Grant Date Fair Value		Options		Weighted Average Exercise Price
Balance at December 31, 2020		1,213,667		$	3.59		2,176,290		$	4.88		24,000		$	20.39
Balance at December 31, 2021																	966,429		$	4.62		2,484,581		$	6.67		9,000	$	16.76
Granted		411,291			5.94		653,438			8.41		—			—		333,673			4.28		667,345			5.33		—		—
Settled		(548,504	)		3.37		(193,778	)		5.45		—			—		(381,743	)		4.02		(719,659	)		6.68		—		—
Forfeited or expired		(32,525	)		8.13		(151,369	)		12.61		(15,000	)		22.57		(4,570	)		3.77		(109,166	)		7.24		—		—
Balance at June 30, 2021		1,043,929		$	4.49		2,484,581		$	6.67		9,000		$	16.76
Balance at March 31, 2022																	913,789		$	4.75		2,323,101		$	6.26		9,000	$	16.76

Awards estimated to vest in the future		987,615		$	4.55		2,200,512		$	6.78		9,000		$	16.76		897,734		$	4.79		2,056,141		$	6.31		9,000	$	16.76

Stock-based compensation expense for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was ~~$2.5~~$2.6 million and ~~$0.9~~$1.8 million, respectively. Stock-based compensation for the six months ended June 30, 2021 and 2020 was $4.3 million and $0.7 million, respectively. The higher expense for the three and six months ended June 30, 2021 was primarily attributable to the modification of the 2019 and 2020 PSU awards, substituting budgeted amounts for actual performance for the second quarter of 2020 (one of twelve quarters in the respective performance periods), to offset the impact of COVID-19. This increased stock-based compensation for the three and six months ended June 30, 2021 by $1.2 million and $2.3 million, respectively. In addition, 2020 stock-based compensation was lower due to the first quarter 2020 reversal of $1.2 million of previously accrued expense as a result of lower expected performance achievement, in light of the global pandemic. Unrecognizedrespectively.Unrecognized stock-based compensation expense related to non-vested awards of ~~$15.2~~$12.2 million is expected to be recognized over a weighted average period of approximately ~~1.9~~2.1 years as of ~~June 30, 2021.~~March 31, 2022.

When market conditions warrant, we may enter into purchase commitments to secure the supply of certain commodities used in the manufacture of our products, such as aluminum, natural gas and other raw materials. Prices under our aluminum contracts are based on a market index ~~the London Mercantile Exchange,~~ and regional premiums for processing, transportation and alloy components, which are adjusted quarterly for purchases in the ensuing quarter. Certain of our purchase agreements include volume commitments; however, any excess commitments are generally negotiated with suppliers and those which have occurred in the past have been carried over to future periods.

The Company sells certain customer trade receivables on a non-recourse basis under factoring arrangements with designated financial institutions. These transactions are accounted for as sales and cash proceeds are included in cash provided by operating activities. Factoring arrangements incorporate customary representations and warranties, including representations as to validity of amounts due, completeness of performance obligations and absence of commercial disputes. During the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company sold trade receivables totaling ~~$197.3~~$208.7 million and ~~$67.7~~$186.7 million, respectively, and incurred factoring fees of ~~$0.5~~$0.6 million and $0.2 million, respectively. During the six months ended June 30, 2021 and 2020, the Company sold trade receivables totaling $384.0 million and $137.6 million, respectively, and incurred factoring fees of $1.0 million and $0.4$0.5 million, respectively. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, receivables of ~~$100.1~~$92.2 million and ~~$96.6~~$97.6 million, respectively, had been factored and had not yet been paid by customers to the respective financial institutions. The collective limit under our factoring arrangements ~~as of June 30, 2021 was $129.0 million. The collective limit under our factoring arrangements~~increased from $125.1 million as of December 31, ~~2020 was $132.0 million.~~ 2021 to $140.1 million as of March 31, 2022 due to the permanent increase in the North American factoring limit that occurred in March 2022.

During the fourth quarter ~~ended June 30, 2020,~~of 2021, the Company ~~decided to discontinue the manufacture and sale of high performance aftermarket wheels for the automotive racing market segment. The Company incurred~~announced a ~~total non-cash charge of $3.4 million, including $2.8 million recorded~~reduction in cost of sales, comprised of $1.3 million relating to write-downs of certain after-market inventory to salvage value, $1.0 million of employee severance costs and $0.5 million in contract terminations and other costs, as well as a $0.6 million non-cash charge recorded in selling, general and administrative expense related to non-production employee severance costs. In addition, during the six-month period ended December 31, 2020, we recognized an additional $0.7 million of severance costs, including charges to costs of sales of $0.4 million and selling, general and administrative expense of $0.3 million. As of June 30, 2021, $0.1 million of the restructuring severance accrual remains.

~~During the third quarter of 2019, the Company initiated a plan to significantly reduce production and manufacturing operations~~its workforce at ~~its Fayetteville, Arkansas location.~~Werdohl, Germany. As a result, the Company recognized a ~~non-cash~~restructuring charge of ~~$13.0~~$4.5 million in cost of sales, principally comprised of ~~accelerated depreciation for excess equipment~~termination and the write-down of certain supplies inventory to net salvage value. In addition, relocation costs for redeployment of machinery and equipment of $1.8 million were recognized in the fourth quarter of 2019. During 2020, we recognized additional charges to cost of sales of $3.3 million, principally related to relocation costs for redeployment of machinery and equipment. During the three and six months ended June 30, 2021, we recognized additional relocation costs in cost of sales for redeployment of machinery and equipment of $0.7 million and $1.5 million, respectively. As of June 30, 2021, $0.2 million of the restructuring severance accrual remains. On July 15, 2021, the Company consummated the sale of the Fayetteville facility for a net sale price of $7.6 million, including $0.5 million which was deposited to escrow pending satisfactory completion of certain site repairs and remediation. The net sale price will be more than sufficient to recover the carrying value of the facility and the resulting gain will be recognized upon closing and classified as a part of selling, general and administrative expenses.benefits.

~~Production at our Werdohl Germany manufacturing site was temporarily halted due to flooding at the plant on July 14, 2021. On July 16~~^th, operations at this facility were restarted, with the exception of a painting line and certain machining cells. We have property and business interruption insurance coverage, each with a deductible of $2.5 million. We are in the process of determining the ultimate cost associated with this event.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. We have included or incorporated by reference in this Quarterly Report on Form 10-Q (including in the ~~section~~sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) and from time to time our management may make statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities ~~Exchange~~ Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon management’s current expectations, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, the impact of COVID-19 and the resulting supply chain disruption, as well as the Ukraine Conflict, on our future ~~business, results, operation~~growth and ~~prospects, anticipated future performance (including sales and earnings), expected growth, future business plans and costs and potential liability for environmental-related matters.~~earnings. Any statement that is not historical in nature is a forward-looking statement and may be identified using words and phrases such as “expects”, “anticipates”, “believes”, “will”, “will likely result”, “will continue”, “plans to”, “could”, “continue��, “estimates” and similar expressions. These statements include our belief regarding general automotive industry and market conditions and growth rates, as well as general domestic and international economic conditions.

Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company, which could cause actual results to differ materially from such statements and from the Company’s historical results and experience. These risks, uncertainties and other factors include, but are not limited to, those described in Part I—Item 1A—“Risk Factors” and Part II—Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 and Part I—Item 2—“Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations,” Part II – Item 1A – “Risk Factors” and elsewhere in this Quarterly Report and those described from time to time in our other reports filed with the Securities and Exchange Commission.

Readers are cautioned that it is not possible to predict or identify all the risks, uncertainties and other factors that may affect future results and that the risks described herein should not be considered to be a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto and with the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Superior Industries International, Inc.’s (referred to herein as the “Company”, “Superior”, or “we” and “our”) principal business is the design and manufacture of aluminum wheels for sale to original equipment manufacturers (“OEMs”) in North America and Europe and to the aftermarket in Europe. We employ approximately ~~7,700~~7,800 full-time employees, operating in eight manufacturing facilities in North America and Europe. We are one of the largest aluminum wheel suppliers to global OEMs and we believe we are the #1 European aluminum wheel aftermarket manufacturer and supplier. Our OEM aluminum wheels accounted for approximately 9294 percent of our sales in the first ~~six~~three months of ~~2021~~2022 and are primarily sold for factory installation on vehicle models manufactured by BMW (including Mini), ~~Daimler AG Company (Mercedes-Benz, AMG, Smart),~~ Ford, GM, Honda, Jaguar-Land Rover, Lucid Motors, Mazda, Mercedes-Benz Group, Nissan, PSA, Renault, Stellantis, Subaru, Suzuki, Toyota, VW Group (Volkswagen, Audi, SEAT, Skoda, Porsche, Bentley) and Volvo. We ~~also~~ sell aluminum wheels to the European aftermarket under the brands ATS, RIAL, ALUTEC and ANZIO. North America and Europe represent the principal markets for our products, but we have a diversified global customer base consisting of North American, European and Asian OEMs.

Demand for our products is primarily driven by the production of light vehicles in North America and Europe and customer take rates on specific vehicle platforms that we serve and wheel SKUs that we produce. The majority of our customers’ wheel programs are awarded two to four years in advance. Our purchase orders with OEMs are typically specific to a particular vehicle model.

GM, Ford, VW Group and ~~Ford were our only customers~~Toyota each individually ~~accounting~~accounted for 10 percent or more of our consolidated sales for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, while only GM, Ford and ~~2020.~~VW Group individually represented 10 percent or more of our consolidated sales for the three months ended March 31, 2021. Our sales to these customers infor the three months ended March 31, 2022 and 2021 ~~and 2020~~ were as follows:

Three months ended	June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
(Dollars in millions)	Percent of Sales	Dollars		Percent of Sales	Dollars		Percent of Sales	Dollars		Percent of Sales	Dollars
GM	27%	$	93.4	18%	$	27.4	26%	$	106.3	26%	$	94.1
Ford							14%	$	57.8	14%	$	49.1
VW Group	16%	$	53.8	19%	$	28.6	13%	$	54.0	15%	$	54.2
Ford	10%	$	30.9	10%	$	12.9


Six months ended	June 30, 2021			June 30, 2020
(Dollars in millions)	Percent of Sales	Dollars		Percent of Sales	Dollars
GM	27%	$	187.5	22%	$	100.1
VW Group	15%	$	108.0	16%	$	72.5
Ford	11%	$	80.0	12%	$	52.3
Toyota							10%	$	41.0	7%	$	26.1

~~In 2020, the COVID-19 pandemic introduced significant volatility in the financial markets~~Industry Overview, Supply Chain Disruption and ~~had a widespread adverse effect on the automotive industry.~~

~~While navigating through this period of volatility and uncertainty, Superior’s top priorities were:~~

In order to ensure the health and safety of our employees globally and respond to the then current industry production environment, we closed production at our European facilities in late March 2020. In North America, our manufacturing operations ceased production in early April 2020. The Company reopened all of its facilities by June 1, 2020, in line with industry demand and finished goods levels, and in accordance with local government requirements. As a result, ~~COVID-19 had a significant adverse effect on our business, results of operations and financial condition in 2020, but this effect had largely subsided by the end of the year.~~Ukraine Conflict

~~Based on recent IHS~~There is a broad range of factors which impact automotive industry sales and production ~~forecasts, full-year 2021~~volumes, including consumer demand and preferences, dealer inventory levels, labor relations issues, trade agreements, cost and availability of raw materials and components, fuel prices, regulatory requirements, government initiatives, availability and cost of credit, changing consumer attitudes toward vehicle ownership and other factors. Our sales are driven generally by overall automotive industry production volumes ~~are expected~~and, more specifically, by the volumes of the vehicles for which we supply wheels. In addition, larger diameter wheels and premium finishes command higher unit prices. Larger cars and light trucks, as well as premium vehicle platforms, such as luxury, sport utility and crossover vehicles, typically employ larger diameter wheels and premium finishes.

The automotive industry has been, and likely will continue to be, ~~up 10.6~~ impacted by supply chain disruption which~~percent in our key regions (12.3 percent in North America~~ emerged as OEM vehicle production resumed and ~~8.9 percent in Western and Central Europe) as compared~~began to ~~2020, but 13.8 percent lower than 2019 (down 10.4 percent in North America and 16.9 percent in Europe). We are continuing to monitor~~scale following the ~~recent resurgence~~shutdown because of the ~~virus, including the emergence of new virus strains, in certain U.S. states and countries in which we operate, the progress of the vaccination deployment and~~COVID-19 pandemic. The supply chain disruption includes shortages ~~affecting the automotive industry (including semiconductors,~~of semiconductor chips, electric vehicle batteries, shipping containers, steel, resin and ~~foam), as well as~~foam. In the ~~impact~~first quarter of ~~these developments on~~2022, the semiconductor chip shortage continued to constrain OEM vehicle production. In addition, the Ukraine Conflict has resulted in OEM announcements of temporary shutdowns at certain production facilities, which began to affect our production volume in March 2022. Our critical commodity costs, which increased significantly throughout 2021, continued to rise in the first quarter of 2022, particularly the cost of aluminum and energy. Rising commodity costs have been, and likely will continue to be, further exacerbated by the Ukraine Conflict. While the prices under our OEM contracts are adjusted for changes in the cost of aluminum, our aftermarket contracts do not provide such pass through of aluminum cost. Additionally, certain of our OEM contracts are also adjusted for changes in the cost of other metals. Rising raw material costs and OEM production volatility have caused our inventory levels to increase, negatively impacting our cash flows.

Automotive industry production volumes in the North American and Western and Central European regions in the first three months of 2022, as compared to the corresponding periods of 2021 and 2020, are shown below:

Automotive industry production volumes declined in the first quarter of 2022 as compared to 2021 and 2020 primarily due to continuing semiconductor chip supply shortages and, to a lesser extent, the Ukraine Conflict. The Ukraine Conflict may have a more significant impact on future automotive production volumes and, therefore, Superior production volumes.

In February 2022 prior to the Ukraine Conflict, the forecast by IHS, an independent automotive industry analyst firm, projected that full year 2022 automotive passenger and light truck vehicle production in North America and Western and Central Europe would increase 24.5 percent (17.9 percent in North America and 31.4 percent in Western and Central Europe) over 2021 but would lag 2019 pre-pandemic production volumes by 9.7 percent. The April 2022 IHS forecast now projects that the 2022 production will be 11.7 percent higher than 2021 (13.0 percent in North America and 10.3 percent in Western and Central Europe) and 15.2 percent lower than 2019. While semiconductor manufacturers have announced plans ~~for~~to expand capacity over the ~~year.~~next several years, it is unclear when automotive industry semiconductor chip shortages will begin to subside.

Superior conducted an assessment in 2021 to identify the sustainability interests of our stakeholders and inform our sustainability strategy. Superior is committed to reducing natural gas, electricity, and water consumption, solid waste and air emissions at our facilities globally. All Superior manufacturing plants have implemented Environmental Management Systems that are ISO14001 certified and are subject to annual audits by an independent third party. In ~~2019, we assessed the product carbon footprint of our European operations for the first time based on the Greenhouse Gas Protocol, and~~2021, we assessed the carbon footprint for each of our operations globally in connection with our Communication on Progress report to the UN Global Compact ~~Sustainability Report~~ published in June 2021. These assessments ~~can help~~are helping us identify potential opportunities to:

Superior has established a goal to ~~reduce fuel consumption~~be carbon neutral by 2039 and ~~greenhouse gas emissions. In this regard,~~we anticipate that by 2025 we will have reduced our emissions 40% from the level generated in 2020. Furthermore, our research and development team is ~~focused on~~ developing ~~automotive~~ light weighting solutions, such as our patented Alulite™ technology, ~~which~~and aerodynamic solutions that will assist in reducing our customers’ carbon footprint. ~~Superior is committed~~We continue to ~~reducing natural gas, electricity and water consumption and solid waste and air emissions at all of our facilities globally. We are also collaborating~~collaborate with our customers and suppliers regarding sustainability practices throughout their supply chains.

The following charts show the operational performance in the quarter ended ~~June 30, 2021~~March 31, 2022 in comparison to the quarter ended ~~June 30, 2020~~March 31, 2021 ($ in millions):

SALES AND PROFITABILITY FOR THE 3RD QUARTER OF 2019 AND 2018 ($ in millions) Sales for 3rd Quarter 2019 & 2018 $352.0 $347.6 2019 2019 Income from Operations 3rd Quarter 2019 & 2018$(0.2) $7.7 2019 218 Net Income & Adjusted EBITDA* for 3rd Quarter 2019 & 2018 Net Income Adjusted EBITDA $38.9 $30.6 $(6.6) 2019 2018 * See the Non-GAAP Financial Measures section of this quarterly report for a reconciliation of our Adjusted EBITDA to Net Income (Loss).

	Three Months Ended									Three Months Ended
	June 30, 2021			June 30, 2020			Net Change			March 31, 2022			March 31, 2021			Net Change
(Dollars in thousands, except per share data)
(Dollars in thousands, except per share amounts)
Net sales
North America	$	176,990		$	58,916		$	118,074		$	227,198		$	191,971		$	35,227
Europe		170,474			85,919			84,555			173,328			166,225			7,103
Net sales		347,464			144,835			202,629			400,526			358,196			42,330
Cost of sales		314,844			167,676			(147,168	)		359,939			315,156			(44,783	)
Gross profit (loss)		32,620			(22,841	)		55,461
Gross profit											40,587			43,040			(2,453	)
Percentage of net sales		9.4	%		(15.8	)%		25.2	%		10.1	%		12.0	%		(1.9	)%
Selling, general and administrative		17,100			11,276			(5,824	)
Income (loss) from operations		15,520			(34,117	)		49,637
Selling, general and administrative expenses											16,950			17,321			371
Income from operations											23,637			25,719			(2,082	)
Percentage of net sales		4.5	%		(23.6	)%		28.1	%		5.9	%		7.2	%		(1.3	)%
Interest expense, net		(10,486	)		(12,184	)		1,698			(9,962	)		(10,273	)		311
Other expense, net		(2,420	)		(670	)		(1,750	)		(87	)		(1,514	)		1,427
Income tax (provision) benefit		(919	)		3,753			(4,672	)
Net income (loss)	$	1,695		$	(43,218	)	$	44,913
Income tax provision											(3,518	)		(810	)		(2,708	)
Net income										$	10,070		$	13,122		$	(3,052	)
Percentage of net sales		0.5	%		(29.8	)%		30.3	%		2.5	%		3.7	%		(1.2	)%
Diluted loss per share	$	(0.26	)	$	(2.00	)	$	1.74
Diluted earnings per share										$	0.04		$	0.18		$	(0.14	)
Value added sales (1)	$	195,474		$	84,284		$	111,190		$	189,395		$	207,259		$	(17,864	)
Adjusted EBITDA (2)	$	44,645		$	(3,696	)	$	48,341		$	49,210		$	54,923		$	(5,713	)
Percentage of net sales		12.8	%		(2.6	)%		15.4	%		12.3	%		15.3	%		(3.0	)%
Percentage of value added sales		22.8	%		(4.4	)%		27.2	%		26.0	%		26.5	%		(0.5	)%
Unit shipments in thousands		4,178			2,068			2,110			4,084			4,515			(431	)

Wheel unit shipments were ~~4.2~~4.1 million for the ~~second~~first quarter of ~~2021~~2022 compared to unit shipments of ~~2.1~~4.5 million for the same period in ~~the prior year period, an increase~~2021, a decrease of ~~102.0~~9.5 percent. The ~~increase~~decrease was ~~driven by higher volumes~~attributable to a 6.6 percent decrease in ~~both regions~~North America and a 13.1 percent decrease in European volume and was primarily due to the ~~2020 shutdowns at our key OEM customers in response to the COVID-19 pandemic.~~ semiconductor shortage.

Net sales for the ~~second~~first quarter of ~~2021~~2022 were ~~$347.5~~$400.5 million, compared to net sales of ~~$144.8~~$358.2 million for the same period in ~~2020.~~2021. The increase in ~~the quarter~~revenue was ~~driven by higher volumes in both regions~~ due to ~~2020 shutdowns at key~~$60.5 million of higher aluminum and other cost pass throughs to our OEM customers, ~~in response to the COVID-19 pandemic, stronger product mix in both North America~~offset by lower shipment volumes and ~~Europe, as well as favorable EURO foreign exchange.~~$11.4 million of lower Euro exchange rates.

Cost of sales ~~were $314.8~~was $359.9 million for the ~~second~~first quarter of ~~2021~~2022 compared to cost of sales of ~~$167.7~~$315.2 million for the same period in ~~2020.~~2021. The increase ~~was principally driven by higher volumes~~ in ~~both regions~~cost of sales was due to ~~reduced prior period North American~~$60.0 million of higher raw material costs, offset by $10.7 million due to lower Euro exchange rates and ~~European manufacturing costs resulting from OEM customer and Superior production shutdowns in response~~$4.0 million primarily due to ~~the COVID-19 pandemic.~~lower net shipment volumes.

Selling, general and administrative (“SG&A”) expenses of $17.0 million for the ~~second~~first quarter of ~~2021~~2022 were ~~$17.1 million~~relatively flat as compared to SG&A expense of $11.3 million for same period in 2020. The increase in SG&A expenses is principally due to lower prior period compensation and benefit expense resulting from cost savings actions taken in response to the COVID-19 OEM and Superior production shutdowns.

Net interest expense for the second quarter of 2021 was $10.5 million compared to net interest expense of $12.2 million for same period in 2020. The decrease was primarily due to lower interest rates on the Term Loan Facility ~~in 2021 and elevated borrowings under our revolving lines of credit during the second quarter of 2020~~.

~~Other expense~~ ~~was $2.4 million~~ ~~for the second quarter of 2021 compared to $0.7~~$17.3 million for the same period in ~~2020.~~ ~~The current year expense is primarily attributable to an increase in the preferred stock embedded derivative liability due to the increase in the Company’s stock price.~~

The income tax provision for the second quarter of 2021 was $0.9 million on a pre-tax income of $2.6 million, representing an effective income tax rate of 35.2 percent. This differs from the statutory rate primarily due to U.S. valuation allowances and the mix of earnings among tax jurisdictions, partially offset by a favorable adjustment to a tax credit. The income tax benefit for the second quarter of 2020 was $3.8 million on a pre-tax loss of $47.0 million, representing an effective income tax rate of 8.0 percent. This was lower than the statutory rate primarily due to the mix of earnings among tax jurisdictions, partially offset by the recognition of a valuation allowance on non-deductible interest.

~~Net income for the second quarter of 2021 was~~ ~~$1.7 million, or a loss of $0.26 per diluted share, compared to a net loss of $43.2 million, or a loss of $2.00 per diluted share, for the same period in 2020.~~

~~Net sales for our North American segment for the second quarter of 2021~~ increased 200.4 percent, compared to the same period in 2020 predominantly due to a 150.3 percent increase in unit volumes along with stronger product mix and higher aluminum prices. For the second quarter of 2021, North American sales were almost exclusively from Mexico, which compares to U.S. sales of 6.1 percent and Mexico sales of 93.9 percent for the same period of the prior year. The change in North American sales by country is due to discontinuation of manufacturing activities at our Fayetteville, Arkansas location. North American segment income (loss) from operations for the second quarter of 2021 was higher than the same period of the prior year, principally due to higher volumes and improved manufacturing performance, as well as stronger product mix, partially offset by increased compensation expense. 2021.

~~Net sales for our European segment for the second quarter of 2021 increased~~ ~~98.4 percent, compared to the same period in 2020 predominantly due to a 68.9 percent increase in unit volumes along with~~ stronger product mix and favorable foreign exchange. European segment sales in Germany and Poland were 36.7 percent and 63.3 percent, respectively, for the second quarter of 2021, which compares to 39.3 percent and 60.7 percent for the same period of the prior year. European segment income from operations for the second quarter of 2021 was higher than the same period of the prior year, principally due to higher volumes and improved manufacturing performance, as well as stronger product mix and favorable foreign exchange, partially offset by increased compensation expense.

~~The following chart shows the operational performance in the six months ended June 30, 2021 in comparison to the six months ended June 30, 2020~~ ~~($ in millions):~~

Six Months Ended

June 30,
2021

June 30,
2020

Net
Change

(Dollars in thousands, except per share data)

Net sales

North America

$
368,961

$
214,467

$
154,494

Europe

336,699

231,480

105,219

Net sales

705,660

445,947

259,713

Cost of sales

630,000

445,627

184,373

Gross profit

75,660

320

75,340

Percentage of net sales

10.7
%

0.1
%

10.6
%
Selling, general and administrative

34,421

23,811

(10,610
)
Impairment of goodwill and indefinite-lived intangibles

—

193,641

193,641

Income (loss) from operations

41,239

(217,132
)

258,371

Percentage of net sales

5.8
%

(48.7
)%

54.5
%
Interest expense, net

(20,759
)

(24,034
)

3,275

Other (expense) income, net

(3,934
)

653

(4,587
)
Income tax (provision) benefit

(1,729
)

7,213

(8,942
)
Net income (loss)

$
14,817

$
(233,300
)

$
248,117

Percentage of net sales

2.1
%

(52.3
)%

54.4
%
Diluted loss per share

$
(0.07
)

$
(9.81
)

$
9.74

Value added sales (1)

$
402,733

$
254,375

$
148,358

Adjusted EBITDA (2)

$
99,568

$
35,834

$
63,734

Percentage of net sales

14.1
%

8.0
%

6.1
%
Percentage of value added sales

24.7
%

14.1
%

10.6
%
Unit shipments in thousands

8,693

6,375

2,318

~~Wheel unit shipments were~~ ~~8.7 million~~ ~~for the first half of 2021 compared to unit shipments of 6.4 million in the prior year period, an increase of~~ ~~36.4~~ ~~percent. The increase was attributable to higher volumes in North America and Europe primarily driven by the 2020 production shutdowns at our key OEM customers in response to the COVID-19 pandemic.~~

~~Net salesfor the first half of 2021 were $705.7 million~~, compared to net sales of $445.9 million for the same period in 2020. The increase in net sales was primarily driven by higher production volumes in North America and Europe due to the 2020 production shutdowns at our key OEM customers in response to the COVID-19, as well as favorable product mix, higher aluminum prices and favorable Euro foreign exchange.

Cost of sales were $630.0 million for the first half of 2021 compared to cost of sales of $445.6 million for the same period in 2020. The increase in cost of sales was primarily due to significantly higher production volumes in North America and Europedriven by the 2020 production shutdowns at our key OEM customers in response to the COVID-19, favorable mix, higher aluminum prices and reduced prior period manufacturing costs resulting from our production shutdowns in response to the onset of the pandemic in the latter part of first quarter and the second quarter of 2020.

~~Selling, general and administrative (“SG&A”) expenses for the first half of 2021 were~~ ~~$34.4~~ ~~million, compared to SG&A expense of $23.8 million for same period in 2020.~~ The increase in SG&A expenses is due to lower prior period compensation and benefit expense resulting from cost savings actions taken in response to the COVID-19 OEM and Superior production shutdowns and increased compensation expense in the current period related to the return to a steady production environment with improved operating performance.

During the first half of 2020, we recognized a goodwill and indefinite-lived intangible asset impairment charge totaling $193.6 million relating to our European reporting unit (refer to Note 8, “Goodwill and Other Intangible Assets” in the notes to the condensed consolidated financial statements).

Net interest expense for the first ~~half~~quarter of ~~2021~~2022 was $~~20.8~~$10.0 million and was relatively flat as compared to net interest expense of ~~$24.0~~$10.3 million for the same period in ~~2020. The decrease was primarily due to lower interest rates on the Term Loan Facility in~~ 2021 ~~and elevated borrowings under our revolving lines of credit during the first half of 2020.~~

Other expense, net, was ~~$3.9~~$0.1 million for the first quarter of 2022 compared to $1.5 million for the ~~first half of 2021 compared to other income of $0.7 million for~~ same period in ~~2020.~~2021. The ~~2021 expense was primarily~~majority of the decrease, $1.3 million, is attributable to the prior year expense which included an increase in the preferred stock embedded derivative liability due to the increase in the Company’s stock price ~~while~~in the ~~prior period income was primarily driven by foreign exchange gains~~first quarter of 2021..

The income tax provision for the ~~six months ended June 30, 2021~~first quarter of 2022 was ~~$1.7~~$3.5 million on a pre-tax income of ~~$16.5~~$13.6 million, representing an effective ~~rate of 10.4 percent.~~ ~~The effective~~ income tax rate ~~for the six months ended June 30, 2021~~of 25.9 percent. This differs from the statutory rate primarily due to ~~a favorable adjustment to a tax credit~~U.S. and Germany valuation allowances, the reversal of an uncertain tax position ~~partially offset by~~and the mix of earnings among tax jurisdictions ~~and U.S. valuation allowances.~~. The income tax ~~benefit~~ provision for the ~~six months ended June 30, 2020~~first quarter of 2021 was ~~$7.2~~$0.8 million on a pre-tax ~~loss~~income of ~~$240.5~~$13.9 million, representing an effective income tax rate of ~~3.0~~5.8 percent. This ~~was lower than~~differs from the statutory rate due to U.S. valuation allowances, reversal of an uncertain tax position and the mix of earnings among tax ~~jurisdictions and the impairment of goodwill for which there is no corresponding tax benefit, partially offset by the recognition of a valuation allowance on non-deductible interest.~~

Net income for the first ~~half~~quarter of ~~2021~~2022 was ~~$14.8~~$10.1 million, or ~~loss of $0.07~~$0.04 per diluted share, compared to a net ~~loss~~income of ~~$233.3~~$13.1 million, or ~~a loss of $9.81~~$0.18 per diluted share, for the same period in ~~2020.~~2021.

Net sales for our North American segment for the first ~~half~~quarter of ~~2021~~ 2022 increased ~~72.0~~18.4 percent despite a 6.6 percent decline in unit volume, compared to the same period in ~~2020,~~2021. The $35.2 million increase in net sales was primarily due to ~~a 48.9 percent increase~~$39.2 million in ~~volumes related~~higher aluminum and other cost pass throughs to our ~~prior period Q2 production shutdowns, stronger product mix comprised of larger diameter wheels and premium wheel finishes and higher aluminum prices. For~~OEM customers. Despite lower shipment volumes resulting from the ~~first half of 2021, North American sales were almost exclusively shipped from Mexico, which compares to~~ U.S. sales of 9.2 percent and Mexico sales of 90.8 percent for the prior year period. The change in North American sales by country is due to discontinuing manufacturing activities at our Fayetteville, Arkansas location in the fourth quarter of 2019.semiconductor shortage, North American segment income from operations for the first ~~half~~quarter of ~~2020~~2022 was ~~higher than~~relatively flat with the ~~prior year period, principally~~first quarter of 2021, primarily due to ~~higher volumes~~favorable pricing and ~~improved manufacturing performance, as well as stronger product mix, partially offset by increased compensation expense.~~

Net sales for our European segment for the first ~~half~~quarter of ~~2021~~2022 increased ~~45.5~~4.3 percent despite a 13.1 percent decline in unit volume, compared to the same period in ~~2020,~~2021. The increase in net sales of $7.1 million was primarily due to ~~a 24.8 percent increase~~$21.3 million in ~~volumes related~~higher aluminum and other cost pass throughs to our ~~production~~OEM customers, partially offset by unfavorable foreign exchange of $11.4 million and lower shipment volumes. The decline in shipment volumes was due to the continuing semiconductor chip shortage, as well as OEM plant shutdowns due to the Ukraine Conflict which began to impact our sales in the latter part of the first quarter and the second quarter of 2020, stronger product mix comprised of larger diameter wheels and premium wheel finishes, higher aluminum prices and favorable foreign exchange. European segment sales for Germany and Poland were approximately 36.6 percent and 63.4 percent, respectively, during the first half of 2021, which compares to 36.2 percent and 63.8 percent for the first half of 2020.March 2022. European segment income from operations for the first ~~half~~quarter of ~~2021~~2022 was ~~higher~~$3.8 million lower than the prior year ~~period principally~~primarily due to ~~improved~~higher labor costs and unfavorable manufacturing ~~performance associated with higher~~cost performance. The Ukraine Conflict may have a more significant impact on future automotive production volumes ~~favorable product mix~~ and, ~~favorable foreign exchange.~~therefore, Superior shipment volumes.

As of ~~June 30, 2021,~~March 31, 2022, our cash and cash equivalents totaled ~~$149.2~~$133.7 million compared to ~~$130.7~~$153.8 million and ~~$152.4~~$113.5 million at ~~June 30, 2020~~March 31, 2021 and December 31, ~~2020,~~2021, respectively. Our sources of liquidity primarily include cash and cash equivalents, cash provided by operating activities, borrowings under available debt facilities, factoring arrangements for trade receivables and, from time to time, other external sources of funds. Working capital (current assets minus current liabilities) and our current ratio (current assets divided by current liabilities) were ~~$188.2~~$198.6 million and 1.6:1.0, respectively, at March 31, 2022, versus $172.4 million and 1.7:1.0 ~~respectively, at June 30, 2021, versus $152.5 million and 1.7:1.0, respectively,~~ at December 31, ~~2020.~~2021. While the Company continues to ~~tightly~~effectively manage all elements of working capital, inventories have increased in ~~2021 not only~~2022 largely due to ~~the increase in production volumes, but also the volatility in customer orders arising from customer supply chain constraints, and to ensure our delivery capability in the second half of 2021.~~ higher material costs.

Our working capital requirements, investing activities and cash dividend payments have historically been funded from internally generated funds, debt facilities, cash and cash equivalents, and we believe these sources will continue to meet our future requirements. Capital expenditures ~~relate~~are expenditures to ~~improving~~improve production quality and efficiency, ~~and extending~~to extend the useful lives of existing property ~~plant~~ and ~~equipment (“maintenance”),~~expenditures for new product offerings, as well as ~~capital related to new product offerings and~~ expanded capacity for existing ~~products (“new business”). Over time,~~products. During 2022 we expect that our capital expenditures ~~have consisted of roughly equal components of maintenance and new business.~~will be approximately $80.0 million.

In connection with the acquisition of our European operations, we entered into several debt and equity financing arrangements during 2017. On March 22, 2017, we entered into a USD Senior Secured Credit facility (“USD SSCF”) consisting of a $400.0 million Senior Secured Term Loan Facility (“Term Loan Facility”) and a $160.0 million Revolving Credit Facility (“Revolving Credit Facility”). On May 22, 2017, we issued 150,000 shares of redeemable preferred stock for an aggregate purchase price of $150.0 million. On June 15, 2017, we issued €250.0 million aggregate principal amount of ~~6.00 percent~~6.00% Senior Notes due June 15, 2025 (“the Notes”). Finally, as part of the European business acquisition, we also assumed $70.7 million of outstanding debt, including a €30.0 million European Revolving Credit Facility (“EUR SSCF”) (subsequently increased to €60.0 million on January 31, 2020). In addition, the European business entered into equipment loan agreements totaling $13.4 million (€12.0 million) in the fourth quarter of 2019. ~~The Company drew down €10.6 million on these~~

Balances outstanding under the Term Loan Facility, Notes and equipment loans in the first quarter of 2020 and drew the remaining €1.4 million in the first quarter of 2021. With the onset of the COVID-19 pandemic and the ensuing economic uncertainty, the Company drew down on its USD SSCF and EUR SSCF revolving credit facilities to provide additional liquidity. Asas of March 31, ~~2020,~~2022 were $349.2 million, $242.2 million and $17.1 million, respectively. The redeemable preferred stock amounted to $205.4 million as of March 31, 2022. The Term Loan Facility matures May 23, 2024 and the Notes mature June 15, 2025. In addition, the redeemable preferred stock may be unconditionally redeemed on or after September 14, 2025 at the redemption amount, currently $300 million, provided the Company ~~had borrowings outstanding~~has sufficient available funds. Under Delaware law, any redemption payment would be limited to the “surplus” that our Board determines is available to fund a full or partial redemption without rendering us insolvent. The shares of preferred stock that have not been redeemed would continue to receive an annual dividend of 9 percent on the original stated value per share, plus any accrued and unpaid dividends, which would be paid quarterly. The Board would have to evaluate on an ongoing basis the ability of the Company to make any further redemption payments until the full redemption amount has been paid. The Company intends to refinance a portion or all of its debt obligations, including the Term Loan Facility and Notes, prior to maturity. As a part of any refinancing, the Company will review its overall capital structure and may evaluate other sources of capital which could include issuance of common stock or restructuring of the preferred stock.

On May 3, 2021, the Company extended the term of the Revolving Credit Facility under ~~these~~its USD SSCF. The commitment under the facility was reduced from $160.0 million to $132.5 million, with $25.0 million of the commitment maturing May 23, 2022 and the remaining $107.5 million maturing October 31, 2023. During the second quarter of 2021, the Company amended the EUR SSCF, extending the term to May 22, 2023 and increasing the applicable margins and commitment fees, while maintaining the €60.0 million commitment. Our liquidity totaled $327.9 million at March 31, 2022, including cash on hand of $133.7 million and available unused commitments under credit facilities of ~~$207.9~~$194.2 million. ~~The Company resumed all its operations by June of 2020 and repaid the borrowings under the revolving credit facilities by September 30, 2020.~~

As part of our ongoing efforts to improve our cash flow and related liquidity, we negotiate with suppliers to optimize our terms and conditions, including extended payment terms. Beginning in 2021, the Company receives extended payment terms for a portion of our purchases with one of our principal aluminum suppliers in exchange for a nominal adjustment to the product pricing. The payment terms provided to us are consistent with aluminum industry norms, as well as those offered to the supplier’s other customers. The supplier intends to finance these extended terms by factoring receivables due from us with a financial institution. We are not a party to the supplier’s factoring agreement with the financial institution. We remit payments directly to our supplier, except with respect to product purchased under extended terms which have been factored by the supplier. These payments are remitted directly to the financial institution in accordance with the payment terms originally negotiated with our supplier. As of ~~June 30, 2021,~~March 31, 2022, the Company

owed ~~$16.3~~$27.8 million to the financial institution which is included in accounts payable in the Company’s condensed consolidated balance ~~sheet.~~sheets. The Company made ~~$21.0~~$29.0 million in payments to the financial institution pursuant to the supplier’s factoring arrangement for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. These payments are included in cash flows from operations within the condensed consolidated statements of cash flows.

~~Balances outstanding under the Term Loan Facility, Notes and equipment loans as~~As of ~~June 30, 2021 were $349.2 million, $258.2 million and $22.2 million, respectively. The redeemable preferred stock amounted to $189.4 million as~~March 31, 2022, we had no significant off-balance sheet arrangements other than factoring of ~~June 30, 2021. Our liquidity totaled $347.8 million at June 30, 2021, including cash on hand of $149.2 million and available unused commitments under credit facilities of $198.6 million.~~

~~On May 3, 2021, the Company extended the term of the Revolving Credit Facility under its USD SSCF. The commitment under the facility was reduced from $160.0 million to $132.5 million, with $25.0~~$92.2 million of ~~the commitment maturing May 23, 2022 and the remaining $107.5 million maturing October 31, 2023~~. During the second quarter of 2021, the Company amended its European Revolving Credit Facility (“EUR SSCF”), extending the term to May 22, 2023 and increasing the applicable margins and commitment fees, while maintaining the €60.0 million commitment.our trade receivables.

The following table summarizes the cash flows from operating, investing, and financing activities as reflected in the condensed consolidated statements of cash flows.

	Six Months Ended						Three Months Ended
	June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
(Dollars in thousands)
Net cash provided by (used in) operating activities		31,933			(7,135	)
Net cash provided by operating activities							$	45,001		$	18,153
Net cash used in investing activities		(20,551	)		(22,761	)		(17,804	)		(10,479	)
Net cash (used in) provided by financing activities		(13,501	)		82,205
Net cash used in financing activities								(6,705	)		(4,179	)
Effect of exchange rate changes on cash		(1,133	)		496			(284	)		(2,070	)
Net (decrease) increase in cash and cash equivalents	$	(3,252	)	$	52,805
Net increase in cash and cash equivalents							$	20,208		$	1,425

Net cash provided by operating activities was ~~$31.9~~$45.0 million for the first ~~six~~three months of ~~2021~~2022 compared to net cash ~~used~~provided by operating activities of ~~$7.1~~$18.2 million for the same period in ~~2020.~~2021. The increase in cash flow provided by operating activities was primarily due to lower use of cash for working capital in the first quarter of 2022~~driven by increased profitability,~~ than in the prior year period, partially offset by ~~an increase in working capital to support increased sales and production volumes, as compared to the prior year~~decreased profitability ~~period.~~.

Net cash used in investing activities was ~~$20.6~~$17.8 million for the first ~~six~~three months of ~~2021~~2022 compared to ~~$22.8~~$10.5 million for the same period in ~~2020.~~2021. The ~~decrease~~increase in cash used in investing activities is driven by ~~timing of pending~~investments in capital projects to support increased production ~~requirements~~and paint line and finishing capabilities in both regions.

Net cash used in financing activities was ~~$13.5~~$6.7 million for the first ~~six~~three months of ~~2021~~2022 compared to net cash ~~provided by~~used in financing activities of ~~$82.2~~$4.2 million for the same period in ~~2020.~~2021. This change was primarily due to 2021 proceeds from the ~~draw down and partial repayment on borrowings under our revolving credit facilities, as well as prepayments on the Term Loan, in the first half of 2020.~~

~~As of June 30, 2021, we had no significant off-balance sheet arrangements other than factoring of $100.1 million of our trade receivables.~~

In this quarterly report, we discuss two ~~important~~financial measures that are not calculated according to U.S. GAAP, value added sales and adjusted EBITDA.

~~Value added sales is a key measure that is not calculated according to U.S. GAAP.~~ In the discussion of operating results, we provide information regarding value added sales. Value added sales represents net sales less the value of aluminum and other costs, as well as services provided by outsourced service providers (“~~OSP”~~OSPs”), that are included in net sales. ~~Our presentation of value~~Contractual arrangements with our customers allow us to pass on changes in aluminum and certain other costs. Value added sales is ~~intended to allow~~worthy of being highlighted for the benefit of users of our financial statements as it allows users of the financial statements to consider our net sales information both with and without the aluminum, other costs, and OSP ~~cost components.~~costs. Management utilizes value added sales as a key metric to determine growth of the Company because it eliminates the volatility of ~~aluminum prices.~~the cost of aluminum.

~~Adjusted EBITDA is a key measure that is not calculated according to U.S. GAAP.~~ Adjusted EBITDA is defined as earnings before interest income and expense, income taxes, depreciation, amortization, restructuring charges and other closure costs and impairments of long-lived assets and investments, changes in fair value of the redeemable preferred stock embedded derivative, acquisition and integration and ~~other related costs,~~ certain hiring and separation related costs, proxy contest fees, gains associated with early debt extinguishment, and accounts receivable factoring fees. We use adjusted EBITDA as an important indicator of the operating performance of our business. Adjusted EBITDA is used in our internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors and evaluating short-term and long-term operating trends in our operations. We believe the adjusted EBITDA financial measure assists in providing a more complete understanding of our underlying operational measures to manage our business, to evaluate our performance compared to prior periods and the marketplace and to establish operational goals. Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies.

The following table reconciles our net sales, the most directly comparable U.S. GAAP financial measure, to our value added sales:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
(Dollars in thousands)
Net sales	$	347,464		$	144,835		$	705,660		$	445,947		$	400,526		$	358,196
Less: aluminum value and outside service provider costs		(151,990	)		(60,551	)		(302,927	)		(191,572	)
Less: aluminum, other costs, and outside service provider costs														(211,131	)		(150,937	)
Value added sales	$	195,474		$	84,284		$	402,733		$	254,375		$	189,395		$	207,259

The following table reconciles our net income, the most directly comparable U.S. GAAP financial measure, to our adjusted EBITDA:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
(Dollars in thousands)
Net income (loss)	$	1,695		$	(43,218	)	$	14,817		$	(233,300	)
Net income													$	10,070		$	13,122
Interest expense, net		10,486			12,184			20,759			24,034			9,962			10,273
Income tax provision (benefit)		919			(3,753	)		1,729			(7,213	)		3,518			810
Depreciation		18,905			17,798			37,555			36,052			17,834			18,650
Amortization		6,704			6,127			13,415			12,264			6,248			6,711
Impairment of goodwill and indefinite-lived intangibles		—			—			—			193,641
Integration, restructuring, factoring fees and other ⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾		3,791			7,166			7,833			10,356
Change in fair value or redeemable preferred stock embedded derivative liability ⁽⁵⁾		2,145			—			3,460			—
Integration, restructuring, factoring fees and other ⁽¹⁾⁽²⁾														1,578			4,042
Change in fair value or redeemable preferred stock embedded derivative liability ⁽³⁾														—			1,315
Adjusted EBITDA	$	44,645		$	(3,696	)	$	99,568		$	35,834		$	49,210		$	54,923
Adjusted EBITDA as a percentage of net sales		12.8	%		-2.6	%		14.1	%		8.0	%		12.3	%		15.3	%
Adjusted EBITDA as a percentage of value added sales		22.8	%		-4.4	%		24.7	%		14.1	%		26.0	%		26.5	%

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to apply significant judgment in making estimates and assumptions that affect amounts reported therein, as well as financial information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. These estimates and assumptions, which are based upon historical experience, industry trends, terms of various past and present agreements and contracts, and information available from other sources that are believed to be reasonable under the circumstances, form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent through other sources. We believe the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are consistent with those described in the management’s discussion and analysis in our ~~2020~~2021 Form 10-K (refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2020)~~2021).

As a smaller reporting company, as defined in Rule 10(f)(1) of Regulation S-K under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.

The Company’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~June 30, 2021.~~March 31, 2022. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~June 30, 2021~~March 31, 2022 our disclosure controls and procedures were effective.

There has been no change in our internal control over financial reporting during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We are party to various legal and environmental proceedings incidental to our business. Certain claims, suits and complaints arising in the ordinary course of business have been filed or are pending against us. Based on facts now known, we believe all such matters are adequately provided for, covered by insurance, are without merit, and/or involve such amounts that would not materially adversely affect our consolidated results of operations, cash flows or financial position. See also under Item 1A, “Risk Factors - We are from time to time subject to litigation, which could adversely impact our financial condition or results of operations” of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

WeIn light of the recent events surrounding the Ukraine Conflict, we are ~~exposed to certain risks and uncertainties that could~~adding the below risk factor entitled “The Ukraine Conflict may have a material adverse ~~impact~~effect on our business, financial condition, results of operations and ~~operating results. There~~cash flows.”Other than as set forth below, there have been no material changes to the risk factors set forth in “Item 1A Risk ~~Factors described in Part I, Item 1A-Risk Factors in~~Factors” of our ~~annual report on~~ Form 10-K for the year ended December 31, ~~2020, except~~2021. However, many of the risk factors set forth in our Form 10-K for the year ended December 31, 2021 may be exacerbated by the Ukraine Conflict and any resulting worsening of the economic environment.

The Ukraine Conflict may have a material adverse effect on our business, financial condition, results of operations and cash flows.

On February 24, 2022, Russia launched a military invasion of Ukraine. In response to the Russian invasion, the United States, the United Kingdom and the European Union governments, among others, have developed comprehensive and coordinated sanctions and export restrictions on Russia and certain Russian individuals. The United States and other countries could impose wider sanctions and take other actions should the conflict escalate.

The Ukraine Conflict has given rise to macroeconomic risks which could lead to significant declines in global and regional economic growth, particularly in Europe. These risks may not only reduce global demand and automotive production volumes but also cause further supply chain disruption and drive higher energy and commodity prices, including further increases in aluminum and silicon prices, as ~~otherwise indicated in~~well as inflation and higher interest rates. Our OEM customers have announced temporary production shutdowns as a result of supply disruption.

The impact of the ~~following sentence. During May 2021, the NYSE notified the Company that, in view~~Ukraine Conflict including economic sanctions and export controls such as restrictions on energy exports, or additional war or military conflict as well as potential responses to such actions by Russia, is currently unknown. It could lead to further increases of our ~~improved market capitalization which has been well in excess~~costs, affect our supply chain and customers, and reduce our sales, earnings and cash flows. In addition, the continuation of the ~~required threshold for the past six months, we are again~~Ukraine Conflict could lead to other disruptions, instability and volatility in ~~compliance with its continued listing standards.~~global markets that could adversely impact our operations.

~~Not applicable.~~On April 28, 2022, the Board of Directors of the Company approved the Superior Industries International, Inc. Executive Severance Plan (the “Severance Plan”), which provides certain payments and benefits to the Company’s Senior Vice Presidents and Vice Presidents (“Participants”) whose employment is terminated under certain circumstances. The Severance Plan does not apply to Participants whose employment is terminated in connection with a Change in Control (as defined in the Severance Plan) and who are entitled to severance benefits under the Company’s Executive Change in Control Severance Plan.

Specifically, the Severance Plan provides the following benefits to Participants whose employment is terminated by the Company without “Cause” or who terminates his or her employment for “Good Reason” (other than due to death, “Disability” or circumstances under which he or she would be entitled to “Change in Control” severance benefits under the terms of the Company’s Executive Change in Control Severance Plan (as such terms are defined in the Severance Plan):

The Severance Plan also provides the following benefits to Participants who (a) separate from service without Cause and not in connection with a Change of Control, (b) have attained age 60; (c) have been in continuous service with the Company and its affiliates for at least five years; and (d) provide at least three months’ advance notice of his or her intent to retire:

Participants are required to execute a Separation Agreement and General Release in order to receive payments under the Severance Plan.

The foregoing description is qualified in its entirety by reference to the full text of the Severance Plan, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and incorporated by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware	95-2594729
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

26600 Telegraph Road, Suite 400
Southfield, Michigan	48033
(Address of Principal Executive Offices)	(Zip Code)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	SUP	New York Stock Exchange

					Page
PART I	-	FINANCIAL INFORMATION

		Item 1		Financial Statements (Unaudited)

				Condensed Consolidated Statements of Income (Loss)	1

				Condensed Consolidated Statements of Comprehensive Income (Loss)	2

				Condensed Consolidated Balance Sheets	3

				Condensed Consolidated Statements of Cash Flows	4

				Condensed Consolidated Statements of Shareholders’ Equity (Deficit)	5

				Notes to Condensed Consolidated Financial Statements	76

		Item 2	-	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2622

		Item 3	-	Quantitative and Qualitative Disclosures About Market Risk	3730

		Item 4	-	Controls and Procedures	3730

PART II	-	OTHER INFORMATION			3831

		Item 1	-	Legal Proceedings	3831

		Item 1A	-	Risk Factors	3831

		Item 2	-	Unregistered Sales of Equity Securities and Use of Proceeds	3831

		Item 5	-	Other Information	3831

		Item 6	-	Exhibits	3933

		Signatures			4034

	June 30, 2021					December 31, 2020
	Notional U.S. Dollar Amount		Fair Value			Notional U.S. Dollar Amount		Fair Value
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	472,229	$	6,443		$	421,253	$	1,669
Foreign exchange forward contracts not designated as hedging instruments		22,243		(960	)		71,217		1,045
Aluminum forward contracts designated as hedging instruments		12,446		1,609			4,068		262
Natural gas forward contracts designated as hedging instruments		5,447		1,834			5,523		948
Interest rate swap contracts designated as hedging instruments		200,000		(6,658	)		200,000		(8,965	)
Total derivative financial instruments	$	712,365	$	2,268		$	702,061	$	(5,041	)

	March 31, 2022					December 31, 2021
	Notional U.S. Dollar Amount		Fair Value			Notional U.S. Dollar Amount		Fair Value
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	465,599	$	(911	)	$	458,769	$	(10,055	)
Foreign exchange forward contracts not designated as hedging instruments		35,572		634			24,419		576
Aluminum forward contracts designated as hedging instruments		26,706		7,406			37,609		2,716
Natural gas forward contracts designated as hedging instruments		12,087		3,520			8,915		1,301
Interest rate swap contracts designated as hedging instruments		200,000		(1,497	)		200,000		(3,887	)
Total derivative financial instruments	$	739,964	$	9,152		$	729,712	$	(9,349	)

For the six months ended June 30, 2021
	Common Stock				Accumulated Other Comprehensive (Loss) Income
	Number of Shares		Amount		Unrecognized Gains (Losses) on Derivative Instruments			Pension Obligations			Cumulative Translation Adjustment			Retained Earnings			Total
BALANCE AT DECEMBER 31, 2020		25,591,930	$	95,247	$	(1,738	)	$	(7,447	)	$	(90,261	)	$	(17,323	)	$	(21,522	)
Net income		—		—		—			—			—			14,817			14,817
Change in unrecognized gains/losses on derivative instruments, net of tax		—		—		6,985			—			—			—			6,985
Change in defined benefit plans, net of taxes		—		—		—			194			—			—			194
Net foreign currency translation adjustment		—		—		—			—			(7,268	)		—			(7,268	)
Common stock issued, net of shares withheld for employee taxes		515,532		—		—			—			—			—			—
Stock-based compensation		—		2,989		—			—			—			—			2,989
Redeemable preferred 9% dividend and accretion		—		—		—			—			—			(16,712	)		(16,712	)
European non-controlling redeemable equity dividend		—		—		—			—			—			(38	)		(38	)
BALANCE AT JUNE 30, 2021		26,107,462	$	98,236	$	5,247		$	(7,253	)	$	(97,529	)	$	(19,256	)	$	(20,555	)

For the three months ended June 30, 2021
	Common Stock				Accumulated Other Comprehensive (Loss) Income
	Number of Shares		Amount		Unrecognized Gains (Losses) on Derivative Instruments			Pension Obligations			Cumulative Translation Adjustment			Retained Earnings			Total
BALANCE AT MARCH 31, 2021		25,947,462	$	95,752	$	(10,200	)	$	(7,371	)	$	(105,939	)	$	(12,504	)	$	(40,262	)
Net income		—		—		—			—			—			1,695			1,695
Change in unrecognized gains/losses on derivative instruments, net of tax		—		—		15,447			—			—			—			15,447
Change in defined benefit plans, net of taxes		—		—		—			118			—			—			118
Net foreign currency translation adjustment		—		—		—			—			8,410			—			8,410
Common stock issued, net of shares withheld for employee taxes		160,000		—		—			—			—			—			—
Stock-based compensation		—		2,484		—			—			—			—			2,484
Redeemable preferred 9% dividend and accretion		—		—		—			—			—			(8,422	)		(8,422	)
European non-controlling redeemable equity dividend		—		—		—			—			—			(25	)		(25	)
BALANCE AT JUNE 30, 2021		26,107,462	$	98,236	$	5,247		$	(7,253	)	$	(97,529	)	$	(19,256	)	$	(20,555	)

Year Ended December 31, 2020	Beginning Balance													Ending Balance
	Gross		Accumulated Impairment			Net Balance		Impairment			Currency Translation			Gross		Accumulated Impairment			Net Balance
(Dollars in thousands)
Goodwill	$	284,337	$	(99,505	)	$	184,832	$	(182,602	)	$	(2,230	)	$	282,107	$	(282,107	)	$	—

(Dollars in thousands)
Balance at December 31, 2019	$	6,525
Dividends accrued		205
Dividends paid		(46	)
Translation adjustment		2
Purchase of shares		(5,020	)
Balance at December 31, 2020		1,666
Dividends accrued		38
Dividends paid		(3	)
Translation adjustment		(53	)
Purchase of shares		(58	)
Balance at June 30, 2021	$	1,590

Automotive Industry Production (North America and Western and Central Europe)
Three months ended	March 31,						2022 vs 2021			2022 vs 2020
	2022		2021		2020		% Change			% Change
(Units in thousands)
North America		3,551		3,615		3,780		(1.8	%)		(6.1	%)
Western and Central Europe		3,229		3,950		3,940		(18.3	%)		(18.0	%)
Total		6,780		7,565		7,720		(10.4	%)		(12.2	%)



10.1		~~Fifth Amendment to Credit Agreement, dated May 3, 2021, among~~ Superior Industries International, Inc, the subsidiaries of Superior identified therein, CITIBANK, N.A., as Administrative Agent, JPMorgan Chase Bank N.A., as Sub-Agent, and the Lenders and Issuing Banks party thereto (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021). Inc. Executive Severance Plan dated April 28, 2022
~~10.2~~		~~2018 Equity Incentive Plan, As Amended (Incorporated by reference to Appendix B of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 15, 2021)~~. **

31.1		Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.**

31.2		Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.**

32.1		Certification of Majdi B. Abulaban, President and Chief Executive Officer, and C. Timothy Trenary, Executive Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document ****

101.SCH		Inline XBRL Taxonomy Extension Schema Document ****

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document ****

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document ****

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document ****

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document ****

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) ****