Exhibit 99.1
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
On August 31, 2023 (the “Filing Date”), Superior Industries International, Inc.’s (“Superior” or the “Company”) subsidiary, Superior Industry Production Germany GmbH (“SPG”) filed voluntary petitions for preliminary insolvency proceedings in the Neustadt an der Weinstrasse, Germany Insolvency Court (the “Insolvency Court”) seeking relief under the German Insolvency Code (the "Insolvency Code") pursuant to Sections 270ss. As a result of SPG’s filing and applicable U.S. generally accepted accounting principles, the Company has concluded that it will no longer control SPG, and therefore, SPG will be deconsolidated from the Company’s consolidated financial statements effective as of the Filing Date.
The Company determined that the deconsolidation of SPG does not meet the criteria requiring presentation as discontinued operations in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") because it does not represent a strategic shift that will have a major effect on the Company's operations or financial results. The deconsolidation of SPG is considered a disposition of a significant business under Item 2.01 of Form 8-K. As a result, the Company prepared the unaudited pro forma condensed consolidated financial statements included herein, which were prepared in accordance with Article 11 of Regulation S-X and are based on the historical financial statements of the Company. The historical consolidated financial statements have been adjusted in the accompanying unaudited pro forma condensed consolidated financial statements to give effect to the deconsolidation of SPG. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by Securities and Exchange Commission rules and regulations.
Under the SEC rules applicable to preparation of pro forma financial statements, the following pro forma financial information does not reflect any projected synergies, including any administrative or manufacturing cost savings, resulting from the preliminary insolvency proceedings.
The unaudited condensed consolidated pro forma balance sheet as of June 30, 2023 is presented as if the deconsolidation of SPG had occurred on June 30, 2023. The unaudited condensed consolidated pro forma statements of income for the six months ended June 30, 2023 and the year ended December 31, 2022 are presented as if the deconsolidation of SPG had occurred as of January 1, 2022. Through the Filing Date, SPG’s results continue to be consolidated into the Company’s financial statements and Superior recognizes SPG’s losses in its earnings. Following deconsolidation, Superior will account for its interest in SPG in accordance with the measurement alternative under ASC 321, "Investments - Equity Securities" and initially recognize its investment at the estimated fair value on the Filing Date. The unaudited condensed consolidated pro forma financial information is subject to adjustment and is presented for informational purposes only and does not purport to represent what the Company’s results of operations or financial position would actually have been if deconsolidation had in fact occurred on the dates discussed above. It also does not project or forecast the Company’s consolidated results of operations or financial position for any future date or period.
In connection with the deconsolidation, Superior expects to recognize a non-cash charge of approximately $81.7 million in the third quarter of 2023, representing the excess of the carrying value over the estimated preliminary fair value of its interest in, and receivable from, SPG as of the Filing Date (based on the carrying value as of June 30, 2023). As a result, the Company has reduced the value of its investment in SPG to zero in the accompanying unaudited pro forma condensed consolidated balance sheet, as the fair value of SPG's liabilities, including amounts owed to the Company, substantially exceed the fair value of its assets. In addition, as a result of the deconsolidation, the Company has recognized an affiliated receivable due from SPG in the amount of $9.8 million, the estimated fair value of the Company’s claim as a creditor of SPG. The preliminary fair value estimates are subject to further refinement upon completion of the valuation of SPG's property, plant and equipment and definite-lived intangible assets expected to be finalized in connection with the 2023 third quarter close. If the preliminary fair value estimates increase (or decrease) by 10%, 20% or 30%, the resulting charge would decrease (or increase) by $1.0 million, $2.0 million or $2.9 million, respectively. Any increase or decrease in the fair value would result in an increase or decrease in the affiliated receivable due from SPG.
The SPG bankruptcy filing will not result in any default under Superior debt agreements.
The unaudited pro forma condensed consolidated financial statements of Superior should be read in conjunction with the historical consolidated financial statements of Superior and the related notes included in our 2022 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
(Unaudited)
As Of June 30, 2023 | As Reported |
|
| Transaction Accounting Adjustments |
|
|
| Pro Forma |
| |||
ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | 181,115 |
|
| $ | (2,403 | ) | (a) |
| $ | 178,712 |
|
Accounts receivable, net |
| 101,017 |
|
|
| (4,010 | ) | (a) |
|
| 97,007 |
|
Inventories, net |
| 181,860 |
|
|
| (23,513 | ) | (a) |
|
| 158,347 |
|
Income taxes receivable |
| 1,959 |
|
|
| — |
|
|
|
| 1,959 |
|
Other current assets |
| 58,421 |
|
|
| (4,103 | ) | (a) |
|
| 54,318 |
|
Total current assets |
| 524,372 |
|
|
| (34,029 | ) |
|
|
| 490,343 |
|
Property, plant and equipment, net |
| 476,834 |
|
|
| (71,963 | ) | (a) |
|
| 404,871 |
|
Deferred income tax assets, net |
| 22,408 |
|
|
| (1,685 | ) | (a) |
|
| 20,723 |
|
Intangibles, net |
| 42,492 |
|
|
| — |
|
|
|
| 42,492 |
|
Other noncurrent assets |
| 94,106 |
|
|
| (2,013 | ) | (a) |
|
| 92,093 |
|
Affiliated receivable from SPG | $ | — |
|
|
| 9,800 |
| (d) |
|
| 9,800 |
|
Total assets | $ | 1,160,212 |
|
| $ | (99,890 | ) |
|
| $ | 1,060,322 |
|
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities: |
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Accounts payable | $ | 148,455 |
|
| $ | (5,442 | ) | (a) |
| $ | 143,013 |
|
Short-term debt |
| 7,236 |
|
|
| (447 | ) | (a) |
|
| 6,789 |
|
Accrued expenses |
| 73,616 |
|
|
| (8,293 | ) | (a) |
|
| 65,323 |
|
Income taxes payable |
| 1,568 |
|
|
| — |
|
|
|
| 1,568 |
|
Total current liabilities |
| 230,875 |
|
|
| (14,182 | ) |
|
|
| 216,693 |
|
Long-term debt (less current portion) |
| 607,902 |
|
|
| (859 | ) | (a) |
|
| 607,043 |
|
Noncurrent income tax liabilities |
| 7,882 |
|
|
| — |
|
|
|
| 7,882 |
|
Deferred income tax liabilities, net |
| 4,583 |
|
|
| (1,256 | ) | (a) |
|
| 3,327 |
|
Other noncurrent liabilities |
| 49,923 |
|
|
| (1,933 | ) | (a) |
|
| 47,990 |
|
Commitments and contingent liabilities |
| — |
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|
| — |
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|
| — |
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Mezzanine equity: |
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Preferred stock |
| 235,143 |
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|
| — |
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| 235,143 |
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European noncontrolling redeemable equity |
| 1,087 |
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|
| — |
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|
|
| 1,087 |
|
Shareholders’ equity (deficit): |
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Common stock |
| 110,802 |
|
|
| — |
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|
|
| 110,802 |
|
Accumulated other comprehensive loss |
| (17,632 | ) |
|
| — |
|
|
|
| (17,632 | ) |
Retained earnings |
| (70,353 | ) |
|
| (81,660 | ) | (b) |
|
| (152,013 | ) |
Total shareholders’ equity (deficit) |
| 22,817 |
|
|
| (81,660 | ) |
|
|
| (58,843 | ) |
Total liabilities, mezzanine equity and shareholders’ equity | $ | 1,160,212 |
|
| $ | (99,890 | ) |
|
| $ | 1,060,322 |
|
Refer to accompanying notes to the Unaudited Pro Form Condensed Consolidated Financial Information.
2
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars in thousands, except per share amounts)
(Unaudited)
| Six Months Ended June 30, 2023 |
| |||||||||
| As Reported |
|
| Transaction Accounting Adjustments (c) |
|
| Pro Forma |
| |||
NET SALES | $ | 753,569 |
|
| $ | (64,361 | ) |
| $ | 689,208 |
|
Cost of sales |
| 677,958 |
|
|
| (73,349 | ) |
|
| 604,609 |
|
GROSS PROFIT |
| 75,611 |
|
|
| 8,988 |
|
|
| 84,599 |
|
Selling, general and administrative expenses |
| 36,458 |
|
|
| (2,938 | ) |
|
| 33,520 |
|
INCOME FROM OPERATIONS |
| 39,153 |
|
|
| 11,926 |
|
|
| 51,079 |
|
Interest expense, net |
| (31,388 | ) |
|
| 332 |
|
|
| (31,056 | ) |
Other expense, net |
| (2,787 | ) |
|
| 116 |
|
|
| (2,671 | ) |
INCOME BEFORE INCOME TAXES |
| 4,978 |
|
|
| 12,374 |
|
|
| 17,352 |
|
Income tax provision |
| (9,092 | ) |
|
| (98 | ) |
|
| (9,190 | ) |
NET (LOSS) INCOME | $ | (4,114 | ) |
| $ | 12,276 |
|
| $ | 8,162 |
|
LOSS PER SHARE – BASIC (f) | $ | (0.84 | ) |
|
|
|
| $ | (0.40 | ) | |
LOSS PER SHARE – DILUTED (f) | $ | (0.84 | ) |
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|
|
| $ | (0.40 | ) | |
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Weighted average shares outstanding – Basic |
| 27,669 |
|
|
|
|
|
| 27,669 |
| |
Weighted average shares outstanding – Diluted |
| 27,669 |
|
|
|
|
|
| 27,669 |
|
| Year Ended December 31, 2022 |
| |||||||||
| As Reported |
|
| Transaction Accounting Adjustments (c) |
|
| Pro Forma |
| |||
NET SALES | $ | 1,639,902 |
|
| $ | (129,736 | ) |
| $ | 1,510,166 |
|
Cost of sales |
| 1,473,515 |
|
|
| (141,811 | ) |
|
| 1,331,704 |
|
GROSS PROFIT |
| 166,387 |
|
|
| 12,075 |
|
|
| 178,462 |
|
Selling, general and administrative expenses |
| 68,347 |
|
|
| (1,253 | ) |
|
| 67,094 |
|
Loss on deconsolidation of SPG |
| — |
|
|
| 81,660 |
|
|
| 81,660 |
|
INCOME FROM OPERATIONS |
| 98,040 |
|
|
| (68,332 | ) |
|
| 29,708 |
|
Interest expense, net |
| (46,314 | ) |
|
| — |
|
|
| (46,314 | ) |
Other expense, net |
| (588 | ) |
|
| (131 | ) |
|
| (719 | ) |
INCOME BEFORE INCOME TAXES |
| 51,138 |
|
|
| (68,463 | ) |
|
| (17,325 | ) |
Income tax provision |
| (14,104 | ) |
|
| 5,039 |
|
|
| (9,065 | ) |
NET (LOSS) INCOME | $ | 37,034 |
|
| $ | (63,424 | ) |
| $ | (26,390 | ) |
EARNINGS (LOSS) PER SHARE – BASIC (g) | $ | 0.02 |
|
|
|
|
| $ | (2.34 | ) | |
EARNINGS (LOSS) PER SHARE – DILUTED (g) | $ | 0.02 |
|
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| $ | (2.34 | ) | |
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Weighted average shares outstanding – Basic |
| 26,839 |
|
|
|
|
|
| 26,839 |
| |
Weighted average shares outstanding – Diluted |
| 27,590 |
|
|
|
|
|
| 26,839 |
|
Refer to accompanying notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.
3
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
4