Superior Industries International, Inc. (NYSE:SUP) Q1 2020 Earnings Conference Call - Final Transcript

May 08, 2020 • 08:30 am ET

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Superior Industries International, Inc. (NYSE:SUP) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Superior Industries First Quarter 2020 Earnings Teleconference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Troy Ford. Please go ahead, sir.

Executive
Troy Ford

Thank you. Good morning, everyone, and welcome to our first quarter 2020 earnings call. During our discussion today, we will be referring to our earnings presentation, which, along with the earnings release, are available on the Investors section of Superior's website. I'm joined on the call by Majdi Abulaban, our President and CEO; and Matti Masanovich, our Executive Vice President and CFO.

Before I turn the call over to Majdi, I would like to remind everyone that any forward-looking statements contained in this presentation or commented on today are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to Slide 2 of this presentation for the full safe harbor statement and to the Company's SEC filings, including the Company's current annual report on Form 10-K, for a more complete discussion of forward-looking statements and risk factors.

We also will be discussing non-GAAP measures today, including value-added sales and adjusted EBITDA. These non-GAAP measures exclude the impact of certain items and, therefore, are not calculated in accordance with U.S. GAAP. Reconciliations of these measures to the most directly comparable U.S. GAAP measures can be found in the appendix of this presentation.

With that, I'll turn the call over to Majdi.

Executive
Majdi Abulaban

Thanks, Troy, and good morning, everyone. And thank you for joining us today to review our first quarter 2020 results. Before I begin my remarks, I would like to first thank our global team who has shown tremendous resiliency throughout these challenging times. There have been many shared sacrifices across the organization. On the bottom of the page, you see one of our employees back to work after we restarted production in Germany. My hat goes off to the men and women that have kept this Company moving forward during these challenging times.

Now moving on to Slide 4. I will discuss the highlights for the quarter as well as the impact that we have seen from the COVID pandemic. I'll then provide you an update on our operating strategy in the current economic environment. In line with the larger automotive industry, our first quarter results were significantly impacted by COVID as nearly all of our customers were shut down. However, prior to the escalation of these global crisis, we delivered significant progress on various key metrics of our value-creation road map, and we were actually on track to deliver on the targets we shared with you earlier.

First, we continued to execute on our portfolio of differentiated and premium technologies. This resulted in growth above market on value-added sales of about 5% with 32% of our portfolio consisting of 19-inch wheels or greater, substantially higher than where we were last year. Our efforts to enhance our margins in North America by reducing structural costs, rationalizing