Superior Industries International (SUP) 8-K Superior Industries Completes Sale of Suspension Components Business

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 28, 2006

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

California	1-6615	95-2594729
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

7800 Woodley Avenue
Van Nuys, California	91406
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (818) 781-4973

N/A

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.01 Completion of Acquisition or Disposition of Assets

Superior Industries International, Inc. (“Superior”), as seller, entered into an Asset Purchase Agreement (“Agreement”) with Saint Jean Industries, Inc., a Delaware corporation, as buyer, and the buyer’s parent, Saint Jean Industries, SAS, a French simplified joint stock company, for substantially all of the assets and working capital of Superior’s suspension components business located in Heber Springs, Arkansas (“Suspension Components Business”), and associated real estate. Subject to post closing adjustments and indemnification obligations, the $17.0 million purchase of the suspension components business by Saint Jean Industries, Inc., including a $2.0 million promissory note, was funded and completed on September 28, 2006 with title, risk and rewards transferring as of September 24, 2006. $5.0 million of the purchase price is to be paid after the completion date pending finalization of financing of that portion of the purchase price. Superior is retaining an equal amount of accounts receivable of the business until such amount is paid. All financial and pro forma information herein assumes full and timely payment of such amount. The $2.0 million promissory note is due in two equal installments on the 24^th and 36^th month anniversary date of the completion date, and bears interest at LIBOR plus 1%, adjusted quarterly. In addition, the buyer will assume selected liabilities of the business. During 2006, the assets and liabilities being sold have been designated as “held for sale” and the operating results have been reflected as discontinued operations in the first and second Quarterly Reports on Form 10-Q.

This Form 8-K supersedes and corrects the September 22, 2006 press release by Superior attached here to as Exhibit 99.1 solely with respect to the completion date stated in such press release.

This Form 8-K contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the company’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors and risks discussed from time to time in the company’s Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

Item 9.01 Financial Statements and Exhibits

(b) Pro Forma Financial Information

The accompanying unaudited pro forma consolidated financial information of Superior Industries International, Inc. reflects the sale of substantially all of the assets of the suspension components business in accordance with the terms of the sale agreement and has been prepared pursuant to rules and regulations of the United States Securities and Exchange Commission. The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and, therefore, are not necessarily indicative of the operating results and financial position that might have been achieved had the sale occurred as of an earlier date, nor are they necessarily indicative of operating results and financial position that may occur in the future. The unaudited pro forma consolidated financial statements do not reflect the use of the estimated net cash proceeds in our ongoing operations or the effect on our future financial position. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto in the Annual Report on Form 10-K for the year ended December 25, 2005.

The following Pro Forma Consolidated Statement of Operations presentation gives effect to the sale of the suspension components business as if it had occurred on the first day of fiscal years 2005, 2004 and 2003. The column titled “Elimination of Suspension Components Business” on the following statements of operation represents the direct revenues and costs associated with the suspension components business. The following Pro Forma Consolidated Balance Sheet presentation gives effect to the sale of the suspension components business as if it had occurred June 25, 2006.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 25, 2005
(Dollars in thousands, except per share amounts)

				Elimination of
				Suspension
				Components
	Superior			Business			Pro Forma
NET SALES	$	844,884		$	40,723		$	804,161
Cost of sales		808,649			53,602			755,047
GROSS PROFIT (LOSS)		36,235			(12,879	)		49,114
Selling, general and administrative expenses		21,019			34			20,985
Impairment of long-lived assets		41,895			34,040			7,855
INCOME (LOSS) FROM OPERATIONS		(26,679	)		(46,953	)		20,274
Equity earnings of joint ventures		5,206			—			5,206
Interest income, net		5,329			—			5,329
Other income (expense), net		(588	)		290			(878	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES		(16,732	)		(46,663	)		29,931
Income tax provision (benefit)(a)		(9,671	)		(17,497	)		7,826
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	(7,061	)	$	(29,166	)	$	22,105
EARNINGS (LOSS) PER SHARE
Basic	$	(0.27	)	$	(1.10	)	$	0.83
Diluted	$	(0.27	)	$	(1.10	)	$	0.83
Weighted average shares outstanding:
Basic		26,614						26,614
Diluted(b)		26,614						26,620

(a)	The effective tax rate before discrete items for the suspension components business is 37.5% which is comprised of 30.1% on operations and 40.2% on impairment of long-lived assets.
(b)	Approximately 6,000 shares of common stock equivalent units were excluded from diluted earnings (loss) per share calculation because they would have been anti-dilutive due to the net loss for the period.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 26, 2004
(Dollars in thousands, except per share amounts)

				Elimination of
				Suspension
				Components
	Superior			Business			Pro Forma
NET SALES	$	901,755		$	29,497		$	872,258
Cost of sales		819,639			39,887			779,752
GROSS PROFIT (LOSS)		82,116			(10,390	)		92,506
Selling, general and administrative expenses(a)		25,776			2,932			22,844
Impairment of long-lived assets		—			—			—
INCOME (LOSS) FROM OPERATIONS		56,340			(13,322	)		69,662
Equity earnings of joint ventures		8,611			—			8,611
Interest income, net		2,772			—			2,772
Other income (expense), net		(1,614	)		—			(1,614	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES		66,109			(13,322	)		79,431
Income tax provision (benefit)		21,454			(4,323	)		25,777
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	44,655		$	(8,999	)	$	53,654
EARNINGS (LOSS) PER SHARE
Basic	$	1.68		$	(0.34	)	$	2.01
Diluted	$	1.67		$	(0.34	)	$	2.00
Weighted average shares outstanding:
Basic		26,655						26,655
Diluted		26,809						26,809

^(a) Elimination of Suspension Components Business includes $2,904 provision for doubtful accounts for Tower Automotive, Inc., a suspension components customer, that filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 28, 2003
(Dollars in thousands, except per share amounts)

			Elimination of
			Suspension
			Components
	Superior		Business			Pro Forma
NET SALES	$	840,349	$	14,409		$	825,940
Cost of sales		716,558		25,027			691,531
GROSS PROFIT (LOSS)		123,791		(10,618	)		134,409
Selling, general and administrative expenses		22,902		—			22,902
Impairment of long-lived assets		—		—			—
INCOME (LOSS) FROM OPERATIONS		100,889		(10,618	)		111,507
Equity earnings of joint ventures		8,655		—			8,655
Interest income, net		2,727		—			2,727
Other income, net		1,144		—			1,144
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES		113,415		(10,618	)		124,033
Income tax provision (benefit)		39,695		(3,716	)		43,411
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	73,720	$	(6,902	)	$	80,622
EARNINGS (LOSS) PER SHARE
Basic	$	2.76	$	(0.26	)	$	3.02
Diluted	$	2.73	$	(0.26	)	$	2.98
Weighted average shares outstanding:
Basic		26,673					26,673
Diluted		27,033					27,033

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 25, 2006
(Dollars in thousands)

				Elimination of
				Suspension
				Components
	Superior			Business			Pro Forma
ASSETS
Current Assets
Cash and equivalents	$	52,370		$	15,000	(a)	$	67,370
Short-term investments		36,173			—			36,173
Accounts receivable, net		153,915			—			153,915
Inventories, net		102,826			—			102,826
Deferred income taxes, net		7,322			—			7,322
Prepaid and other current assets		5,957			—			5,957
Current assets of operations held for sale		13,579			(13,579	)(b)		—
Total current assets		372,142			1,421			373,563
Property, plant and equipment		301,214			—			301,214
Investments		45,856			2,000	(a)		47,856
Other assets		6,841			—			6,841
Non-current assets of operations held for sale		7,811			(7,811	)(b)		—
Total assets	$	733,864		$	(4,390	)	$	729,474
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	69,601		$	—		$	69,601
Accrued expenses		41,797			200	(a)		41,997
Liabilities retained		—			361	(c)		361
Income taxes payable		7,589			188	(a)		7,777
Liabilities of operations held for sale		5,487			(5,487	)(b)		—
Total current liabilities		124,474			(4,738	)		119,736
Executive retirement liabilities		19,212						19,212
Deferred income taxes		24,481						24,481
Commitment and contingent liabilities		—			—			—
Shareholders’ equity Preferred stock, $25.00 par value Authorized – 1,000,000 shares Issued – none		—			—			—
Common Stock, $0.50 par value Authorized – 100,000,000 shares Issued – 26,610,191		13,305			—			13,305
Additional paid in capital		24,316			—			24,316
Accumulated other comprehensive income		(49,189	)		—			(49,189	)
Retained earnings		577,265			348	(a)		577,613
Total shareholder’ equity		565,697			348			566,045
Total liabilities and shareholders’ equity	$	733,864		$	(4,390	)	$	729,474

See notes to Pro Forma Consolidated Balance Sheet

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 25, 2006
(Dollars in thousands)

(a) Represents the receipt of $17.0 million in total proceeds and the estimated gain on sale of the suspension components business, net of estimated selling costs and expenses and taxes as follows:

Cash proceeds from sale	$	15,000
Promissory note		2,000
Total proceeds		17,000
Assets sold		(21,390	)
Liabilities assumed (c)		5,126
Selling costs and expenses		(200	)
Estimated income taxes		(188	)
Estimated gain on sale	$	348

(b)	Represents the elimination of net assets of the suspension components business.
(c)	$361 of employee related liabilities originally included in liabilities of operations held for sale were retained by Superior.

The final calculation of the gain on sale is subject to post closing working capital adjustments as of the closing date, which could result in material changes from the pro forma amounts and calculations contained herein.

(d) Exhibits

99.1 Press release, dated September 22, 2006, issued by Superior Industries International, Inc., announcing the sale of substantially all of its assets of Superior’s suspension components business located in Heber Springs, Arkansas, to Saint Jean Industries, Inc.

SIGNATURES

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 hereunto duly authorized.

	SUPERIOR INDUSTRIES INTERNATIONAL, INC.
	(Registrant)
Date: October 4, 2006
	/s/ R. Jeffrey Ornstein
	R. Jeffrey Ornstein
	Vice President and Chief Financial Officer