Superior Industries' Q1 2025: Unpacking Contradictions in Capacity, Costs, and New Business Prospects

Capacity flexibility, restructuring and cost efficiency, price increases and inflation recovery, working capital and liquidity management, and new business wins are the key contradictions discussed in Superior Industries International's latest 2025Q1 earnings call.



Volume and Revenue Trends:
- Superior Industries reported net sales of $322 million for Q1 2025, slightly higher than the $316 million in the prior year period.
- Despite a challenging macroeconomic environment, value-added sales outperformed the market, driven by a leading product portfolio. However, the company experienced a setback with certain customers in North America, representing 33% of expected 2025 revenue, leading to a decrease in volume and sales.

Profitability and Financial Performance:
- First quarter adjusted EBITDA was $25 million, with a margin of 15%, down from 18% in the previous year, mainly due to lower production volumes and unfavorable cost absorption.
- Net loss improved to $13 million, a $20 million improvement over the same period last year, reflecting cost reduction efforts and favorable FX impacting sales.

Liquidity and Financial Structure:
- Total cash on the balance sheet as of March 31, 2025, was $54 million, with net debt at $462 million, representing two consecutive quarters of reduction since refinancing.
- Due to sudden volume losses, the company is exploring short-term liquidity options, such as accessing up to $70 million of additional term loans and discussing broader recapitalization transactions to deleverage the balance sheet.

Tariff Dynamics and Localization Opportunities:
- Tariffs on Chinese wheel imports into the U.S. are over 100% and almost 50% on Moroccan imports into Europe, favoring Superior's local manufacturing footprint in Mexico and Poland.
- The company noted an unprecedented level of quoting activity, with over 53 million lifetime wheels quoted year-to-date, indicating OEMs' urgency to localize production in response to tariff pressure.