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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________ to ___________
COMMISSION FILE NO. 1-6615
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 95-2594729
---------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) 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
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK, PAR VALUE $0.50
REGISTERED ON THE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this Form 10-K. / /
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 X No
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28,886,029 shares of common stock were outstanding as of March 18,
1996.
Aggregate market value of voting stock held by nonaffiliates of
registrant was $538,228,465 on March 18, 1996.
The following documents are incorporated by reference and made a part
of the Form 10-K:
1. Registrant's 1995 Annual Report to Shareholders (Parts I, II and
IV)
2. Registrant's Proxy Statement for its Annual Meeting of
Stockholders to be held May 17, 1996 (Part III)
Listing of Exhibits - Pages 20-22
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Superior Industries International, Inc.'s (the "Company" or the
"Registrant") principal business is the design and manufacture of cast aluminum
road wheels for original equipment manufacturers (OEMs). It also designs and
distributes a variety of products for the automotive aftermarket, including
custom road wheels and accessories. The Registrant was initially incorporated
in Delaware in 1969 and reincorporated in California in 1994 as the successor
to three businesses founded by Louis L. Borick, which had been engaged in the
design, manufacture and sale of automotive accessories and related products
since 1957.
Recent developments in the Company's business are described in the
Company's 1995 Annual Report to Shareholders ("Annual Report") which is
incorporated herein by reference.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company manages its business on an integrated one-segment basis.
Information relating thereto has been included in Note 8 of "Notes to
Consolidated Financial Statements" in the Annual Report which is incorporated
herein by reference.
NARRATIVE DESCRIPTION OF BUSINESS
Principal Products
The Registrant's products are divided into two categories:
1. OEM - Cast Aluminum Road Wheels (93.1 percent of net sales)
2. Aftermarket - Custom Road Wheels and Automotive Accessories
(6.9 percent of net sales)
The Company's net sales for these product lines for 1995, 1994 and
1993 are included in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the Annual Report which is
incorporated herein by reference.
OEM - Cast Aluminum Road Wheels
The Company's entry into the OEM road wheel business in 1973 resulted
from its successful development of manufacturing technology, quality control
and quality assurance techniques which enabled it to satisfy the quality and
volume requirements of the OEM market. The Company's OEM cast aluminum road
wheels are sold to The Ford Motor Company ("Ford"), General Motors Corporation
("General Motors"), Chrysler de Mexico, several Japanese manufacturers,
including Toyota Motor Corporation ("Toyota"), Mazda Motor Corporation
("Mazda"), Nissan Motor Corporation Ltd. ("Nissan"), Fuji Heavy Industries,
Ltd. ("Subaru"), and Isuzu Motors Limited ("Isuzu"), and two European
automotive manufacturers, Bayerische Motoren Werke ("BMW") and Jaguar Cars Ltd.
("Jaguar") for factory
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installation as optional or standard equipment on selected vehicle models. As
discussed below, there are several advantages to manufacturers, dealers and
consumers by installing cast aluminum wheels which help promote this product's
success. Consolidated net sales in 1995, 1994, and 1993 were to principally
two major automotive manufacturers, Ford and General Motors.
During the past twenty-two years the Company has provided cast
aluminum road wheels to Ford, General Motors, Chrysler and, beginning in 1989,
Japanese auto manufacturers for an increasing number of vehicle models, from
eight models in 1980 to 156 currently. It has been the Company's experience
that once the manufacturer has ordered the Company's cast aluminum wheels for
use on a particular year's model, the Company's wheel will be included in that
model's production in later years as well. In addition, the number of vehicle
models on which the Company's aluminum wheels are standard equipment has
increased from none in 1980 to 48 in 1995.
Demand for OEM cast aluminum wheels such as those manufactured by the
Company has been increasing. Ward's Automotive, an industry publication,
reports that the installation rate of such wheels for domestic cars rose from
approximately 4 percent in 1980 to 31 percent for the 1990 model year then to
almost 44 percent for the 1995 model year. Aluminum road wheel installation
rates for domestic light trucks and utility vehicles jumped from approximately
24 percent for the 1990 model year to almost 43 percent for the 1995 model
year. This growth in aluminum wheel installation rates has taken place while
the automotive market has been cyclical.
The Company believes that the increased use of cast aluminum wheels on
domestic vehicles is due to several factors. The aesthetic appeal of cast
aluminum wheels has fueled customer demand. Aluminum wheels typically weigh
less than conventional steel wheels and this weight savings contributes to
increasing the vehicle's fuel efficiency. Because the federal government
requires each domestic manufacturer's total annual production to meet certain
minimum fuel efficiency levels referred to as "CAFE" (Corporate Average Fuel
Economy), the Company's customers have sought to meet these levels in part by
reducing the weight of their vehicles. The installation of cast aluminum
wheels achieves this objective. Manufacturers and dealers also benefit from
the installation of aluminum wheels on their models because of higher profit
margins. Aluminum wheels contribute to the road handling ability and ride of a
vehicle because of the weight savings to critical suspension areas and because
of the greater precision achieved in manufacturing aluminum wheels over
conventional steel wheels.
With approximately 89 percent of the Company's 1995 sales made to Ford
and General Motors, the Company is dependent on these two significant
customers. The Company does not believe this represents a material risk due to
the following factors. First, in 1993 the Company was awarded a new five-year
contract with Ford. The contract, which expires in 1998, replaces previous
long term contracts and covers passenger cars, light trucks and utility
vehicles. This relationship should result in the Company continuing to be
Ford's primary aluminum wheel supplier. Second, in 1995, the Company signed a
"lifetime" contract with General Motors which extends from January 1, 1996
through December 31, 2000 and pertains to the "lifetime" of all current models.
In addition to securing all current models the contract also appoints the
Company to be the chosen supplier for all replacement wheels. Accordingly, the
Company should be awarded a significant portion of General Motors overall
aluminum requirements. Additionally, the Company has proven its ability to be
a consistently low-cost producer of quality aluminum wheels with the capability
of quickly expanding production capacity to meet increasing customer sales
demands. This has been evidenced not only through the Company's rapid plant
expansion program, but also through the
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Company's demonstrated ability to meet frequent customer requests to absorb
additional capacity requirements. The Company strives to continually enhance
its relationships with its customers through continuous improvement programs.
These factors have resulted in the Company's market share expanding to
approximately 40 percent of the domestic aluminum road wheel market. Moreover,
the Company ships over 150 different wheel models to Ford and General Motors
indicating the broad usage of the Company's wheels throughout both OEM
customers' product lines. Finally, both Ford and General Motors continue to
rank the Company as their highest rated supplier of cast aluminum road wheels.
The Company's long-term strategy involves broadening both its domestic
and international OEM customer base and expanding its product lines into
complementary areas which will utilize the Company's manufacturing expertise.
The Company has embarked on a strategy to develop and penetrate three new
international markets: Japan, Europe and Latin America as well as related
foreign OEMs with manufacturing facilities in the United States.
The Company's first step towards achieving this goal was to explore
and develop relationships with Japanese OEMs. In pursuit of this objective,
during 1989 the Company announced it had, in conjunction with Topy Industries,
Limited ("Topy"), Japan's largest wheel manufacturer, obtained its first order
with a Japanese OEM from Mazda. In 1990, the Company further penetrated this
market by receiving a contract from Toyota. Also in 1990, the Company
increased its marketing efforts into this area by forming a sales and marketing
joint-venture with Topy. The joint-venture, named Topy-Superior Limited
("TSL"), markets and sells wheels made by the Company to Japanese OEM customers
both in Japan and the United States. Since inception, the Company, through
TSL, has received many new contracts to manufacture wheels for domestic
Japanese OEMs as well as for three of their U.S. operations. In total, TSL has
contracts with five Japanese OEM customers. This venture is one key step
forward in the Company's international marketing efforts and the Company
expects continued sales growth from this venture.
A second step in the Company's international marketing efforts was
achieved in 1994 as the Company successfully entered the European marketplace
by obtaining two new customers. The Company was awarded a contract by Jaguar
to supply wheels. The wheels are manufactured in the United States and
exported to the United Kingdom. In addition, the Company received a contract
with European based BMW, to supply wheels for the new BMW roadster convertible.
Shipments began in 1995 to BMW's new plant in Spartanburg, South Carolina.
Moreover, in 1995, validating BMW's high regard for its quality and production
capabilities, the Company was awarded five additional wheel programs by BMW for
shipment to the Spartanburg plant as well as export to Germany.
Further in pursuit of developing its ties to the European market, the
Company in 1995 entered into a 50-50 joint venture with German based Otto Fuchs
Metallwerke ("Otto Fuchs") to establish a European manufacturing presence. The
joint venture, known as Suoftec Light Metal Products, KFT ("Suoftec") will
produce both light weight forged and cast aluminum wheels for sale to European
OEMs. Construction of the building began in the fourth quarter of 1995 and
initial shipments are slated to begin in January 1997. The facility, located
in Tatabanya, Hungary, a country with low labor and production costs and
available labor force, establishes the Company's commitment toward entering the
European market. The facility is located in close proximity to large European
OEMs and will bring new wheel making technology to the Company for use in
European and U.S. markets.
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Demonstrating OEMs' interest in this new light weight forging
technology, Suoftec received a long term contract from a major European OEM
calling for 700,000 wheels per year. The contract represents over $30 million
per year in revenues and represents almost half of first phase capacity of 1.5
million wheels per year. The Company anticipates receiving additional orders
in 1996.
Development of the Company's initial Latin American program commenced
during 1994 with the first shipments from the Company's Chihuahua, Mexico
plant. Relative to this market, the Company received orders from Ford and GM
and renewed its relationship with Chrysler by receiving orders to produce two
wheel models from Chrysler de Mexico for the 1995 and 1996 model years. The
wheels are produced at the Chihuahua, Mexico facility for installation on
Mexican-manufactured cars built for the Mexican market and for direct export
back to the U.S. Prior to the devaluation of the Mexican Peso (see
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" section of the Annual Report which is incorporated herein by
reference) the Mexican market was growing rapidly and major automotive
manufacturers were increasing production and adding capacity. Subsequent to
the devaluation, this expansion activity in the domestic Mexican automotive
industry has slowed. However, management still views the long-term prospects
of this market positively and, moreover, has held discussions with OEMs
regarding new and expanded export activities from this facility.
While non-domestic contracts are small in relation to domestic
original equipment contracts, they are nonetheless significant for the growth
of the Company by geographically diversifying and expanding its global
presence. The Company will continue to focus its efforts on new global markets
as they become the fastest growing segments of its business.
In 1994, in response to the steadily growing popularity of
chrome-plated cast aluminum wheels and to provide capacity for several new
customer orders, the Company completed construction of a new chrome-plating
wheel facility. The Company is the only OEM aluminum wheel manufacturer to
develop this in-house capability and the plant is the largest of its kind in
the world. This facility was, as of December 31, 1995, in a start-up mode.
The plant represents the Company's commitment toward diversifying into new
product lines complementary to its core business (See also "Manufacturing").
Aftermarket
The automotive aftermarket consists of products sold to vehicle owners
as replacements for, or additions to, OEM equipment to enhance the comfort,
safety, style, design and performance of vehicles such as passenger cars,
pick-up trucks, vans, recreational and off-road vehicles, light motor homes and
boat trailers. The Company designs, manufactures and distributes 61 different
product lines including 3,200 part numbers of custom steel, aluminum and
chrome-plated steel and aluminum road wheels and accessories, including
steering wheel covers, lighting products, suspension and other accessories for
this market. The Company's Sport Grip(R) steering wheel covers have been
highly successful over the years and have achieved national recognition.
Since 1991, aftermarket net sales, excluding the impact of the August,
1993 divestiture of the Canadian aftermarket mirror and light business, which
marketed products under the trade name "Do-Ray", have experienced a compounded
5.1 percent growth rate. This rate of growth was diminished in 1995 as sales
declined as soft economic conditions reduced customer order levels. The
Company has experienced growth in the roadwheel product lines, specifically,
stylized aluminum and chrome-plated aluminum wheels
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sold under the "Streetwear" trade name. The success of the "Streetwear" line
of wheels reflects the Company's strategy with regard to growing this product
line. Generally, this approach entails the identification of strategic
geographic markets throughout the United States and the development of key
alliances with distributors who maintain extensive lines of distribution within
those markets. Simultaneously, new styles of aluminum and chrome-plated
aluminum wheels with mass market appeal were successfully developed and
introduced to the product line. Strong consumer response to new wheel styles
has spurred further development of new wheel programs. The Company expects
continued growth in this product line as new wheels are developed and
introduced to our existing distributor base.
In 1993 and 1994 the general line of aftermarket accessories has
experienced modest sales increases as a result of a stronger economy and new
product introductions. This trend was broken in 1995 as high customer
inventory levels accentuated by a soft economic environment reduced orders.
The aftermarket general accessories line continues to be negatively impacted by
ongoing retail market contraction and intensive market competition. The trend
of manufacturers to incorporate more accessories as original equipment when
vehicles are sold has also impacted this business.
The Company is a major aftermarket road wheel and accessory supplier
to companies with multiple retail outlets such as Autozone, Pep Boys, Canadian
Tire, Wal-Mart, Northern Automotive (Schuck's, Checker, Kragen), Western Auto,
Paccar Automotive Inc. (formerly General Automotive/Grand Auto), NAPA and
Discount Auto Parts. The Company also supplies major tire distributors such as
Les Schwab, Interstate Tire Corp.(ITCO), Belle Tire, and other wheel and
performance distributors.
Manufacturing
The Company believes that its ability to efficiently process raw
materials into finished goods has enhanced its competitive position as a
manufacturer of OEM products. The Company's manufacturing capabilities also
enable it to manufacture and assemble many of the products it sells in the
aftermarket.
The manufacture of cast aluminum wheels, in which aluminum ingot is
melted, cast, de-sprued, heat treated, painted or chrome-plated, machined,
clearcoated and packaged, is performed entirely at the Company's facilities.
The Company employs low-pressure casting, a process which the Company believes
is the most efficient process for high volume, high quality aluminum wheels.
The Company operates six OEM aluminum wheel manufacturing facilities.
The facilities, located in Fayetteville and Rogers, Arkansas, Van Nuys,
California, Pittsburg, Kansas, Johnson City, Tennessee and Chihuahua,
Chihuahua, Mexico are recognized by the Company's customers as "world class"
manufacturing plants utilizing state-of-the-art processes and equipment. Five
of the facilities have been constructed and brought on-line over the past nine
years beginning with Fayetteville in 1986 (with subsequent expansion in 1993
and 1994), Rogers in 1988, Pittsburg in 1991, Johnson City in 1992 and
Chihuahua in 1994. Chihuahua began shipping wheels in the beginning of the
third quarter of 1994.
Implementing the Company's long-term strategy of penetrating the Latin
American market, the Company is expanding its OEM wheel facility in Chihuahua,
Mexico during 1996. The plant will ultimately have the capacity to ship 1.2
million wheels per year.
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Entry into the European market, through the joint-venture with Otto
Fuchs, will be facilitated through the construction of an aluminum wheel
facility located in Tatabanya, Hungary capable of two million wheels per year.
The manufacturing process will take advantage of a new forging technology
developed by Otto Fuchs to forge lighter weight aluminum wheels, supplemented
with Superior's own light weight low pressure process. The joint-venture
expects to begin shipping wheels sometime in January 1997. The cost of the
facility, currently estimated at $70 million, will be funded through capital
contributions by each partner and long-term project financing.
As the expansion programs came to completion during 1995 two events
transpired which resulted in excess manufacturing capacity. First, the value
of the Mexican peso experienced a precipitous decline in value relative to the
U.S. dollar and the local Mexican economy entered into a severe recession.
This, in turn, precipitated two further significant events. Immediately, the
domestic Mexican automotive market evaporated, along with the market for the
Company's product in Mexico. At the same time, however, the Company's
Chihuahua, Mexico facility continued to ramp-up and ultimately became the
Company's lowest cost based manufacturing facility.
The second event was the softening of the domestic U.S. automotive
market which was accentuated by harsh winter weather conditions in 1995 and in
to 1996. Taken together, the slow-down of these two critical automotive
markets have reduced the Company's production requirements thereby creating
excess manufacturing capacity. Absent some improvements in one or both of the
U.S. and Mexican automotive markets this excess capacity will adversely impact
operating margins in 1996. Management is currently evaluating additional
strategies to minimize the impact of this situation including further expansion
of the Chihuahua, Mexico plant.
Combined with existing production capabilities, these new and expanded
facilities will bring Company-wide North American production capacity to over
12 million wheels annually.
In response to the growing popularity of chrome-plated cast aluminum
wheels, and as a result of the Company's successful development of the
chrome-plating process, the Company in 1994 completed construction of a new
state-of-the-art chrome-plating facility primarily to service the OEM market.
The facility is located adjacent to the Company's Fayetteville, Arkansas wheel
plant and shipments commenced in 1995. However, continuing technical problems
at the chrome-plating facility may impact the results of operations in 1996.
The Company is the only world-wide manufacturer of OEM cast aluminum wheels
that is developing chrome-plating capability.
The Company maintains a high level of quality assurance in the
manufacture of its products and has built and maintained a reputation as a
supplier of high quality aluminum road wheels. This reputation is maintained
by day-to-day product, process and systems audits. In addition, Company-wide
continuous improvement programs are employed to ensure competitive leadership
in all facets of the Company's business. The Company's facilities and
processes are subject to continual technical and quality review by the OEM
engineering, quality and purchasing departments. To maintain its position as a
"world class" OEM supplier and ensure all products and underlying services meet
and exceed customer expectations the Company utilizes a Total Quality
Management ("TQM") system. Optimal process performance at the lowest cost is
significantly enhanced by the use of advanced statistical analysis, such as
design of experiments and loss function analysis. Quality Functional
Deployment ("QFD") and Quality Operating
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Systems ("QOS") are elements in place that provide management with a summary of
key measurables to monitor operations and to identify and promote continuous
improvement throughout the organization.
As a result of the Company's quality, management and employee efforts,
the Company was the first and one of only two wheel suppliers in the world to
earn General Motors' highest quality "Mark of Excellence" award for excellence
in all five categories (Quality, Cost, Delivery, Technology and Management).
Ford has awarded all of the Company's domestic OEM facilities producing Ford
wheels with the prestigious "Q1" quality rating.
In 1995, Ford awarded the Company the highly coveted "Full Service
Supplier" award in recognition of its advanced design, engineering and program
management capabilities. Superior is the only OEM wheel supplier in the world
to achieve this status.
In 1994 the Company was named by General Motors as one of the elite
171 suppliers selected from a total of 30,000 companies recognized as Worldwide
Suppliers of the Year 1993. The award reflects the Company's ability to exceed
specific performance standards established by GM relative to quality, service
and price.
Marketing
Commencing January 1, 1996 the Company established a technical sales
center in Detroit and terminated its relationship with a third party
representative. The office will provide technical engineering and sales staff
in closer proximity to the Company's major customers and will enhance the
Company's already strong sales and technical resources to meet the ever
demanding requirements of its OEM customers. Sales activities in Europe are
supported by sales representative organizations. Sales activities for Mexico
are managed internally. In addition, the Company's sales and marketing
joint-venture with Topy maintains an office in Japan which adds local support
to the Company's Japanese customers. The Company believes that it has
maintained its long-standing relationships with OEMs on the basis of quality
production with timely deliveries in accordance with OEM requirements, timely
response to customer needs and competitive pricing.
A large proportion of the Company's aftermarket sales are made through
eighteen independent manufacturers' representative organizations throughout
North America. These representative organizations solicit orders from catalog
houses, department and auto accessory stores and chain stores. These
manufacturers' representatives are also supported by the Company's internal
marketing and sales organization.
In 1995, the Company had approximately 425 aftermarket accounts
operating through thousands of retail outlets. The Company's ten largest
customers in 1995 accounted for approximately 72 percent of aftermarket sales.
Net Sales Backlog
The Company receives OEM tooling purchase orders to produce multi-year
requirements for cast aluminum road wheels. These purchase orders are for
vehicle model programs that can last three to five
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years. The Company manufactures and ships based on customer firm releases,
normally provided on a weekly basis, which can vary due to cyclical automobile
production.
Customer orders for aftermarket products are normally shipped within
ten days of receipt. As of December 31, 1995 and 1994, the Company had no
significant backlog of such orders.
Seasonal Variations
The automotive industry is cyclical and varies based on the timing of
consumer purchases of vehicles and general economic conditions. Production
schedules can vary significantly from quarter to quarter to meet customer
scheduling demands. During the past few years, there has been no significant
consistent seasonal variation.
Suppliers
The Company purchases substantial quantities of aluminum ingot for the
manufacture of its cast aluminum road wheels. These purchases accounted for
approximately 80 percent of the Company's total material requirements during
1995. The majority of the Company's requirements are met through purchase
orders with several major domestic aluminum producers. Generally, the orders
are fixed as to minimum and maximum quantities of aluminum which the producers
must supply during the term of the orders, which is typically one-to-two years.
The Company was able to successfully secure aluminum commitments from its
primary suppliers at the beginning of 1995 to meet its production requirements.
For 1996, the Company has procured contracts to meet the majority of its
estimated aluminum ingot requirements.
The aluminum market over the past several years has been extremely
volatile. During 1994 worldwide production of aluminum was curtailed which
resulted in increased aluminum prices throughout 1994 and 1995. Selling prices
are adjusted for these raw material increases.
The Company obtains its requirements for other materials through
numerous suppliers with whom it has established trade relations. In instances
where outside suppliers produce components for the Company's products, the
Company normally owns the tools and dies located in the supplier's facilities,
or has the right to purchase such items.
Patents And Licensing Agreements
The Company currently holds patents for 20 of its inventions and has
six other patents pending. While the Company has a policy of applying for
patents if and when it develops new products or processes, it believes that its
success is dependent upon its manufacturing and engineering skills and the
quality and market acceptance of its products, rather than upon its ability to
obtain and defend patents.
The Company is currently licensed to use five patents owned by other
persons. Most of these licenses are for the duration of the patent and are
exclusive for the United States.
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Research And Development
The Company's policy is to continuously review, improve and develop
engineering capabilities so that advance compliance with customer requirements
are met in the most efficient and cost effective manner available. The Company
strives to achieve this objective by attracting and retaining top engineering
talent and by maintaining the latest state-of-the-art computer technology to
support engineering development. Further in pursuit of this objective and to
enhance customer relationships, the Company opened, in 1996, a technical center
in Detroit which maintains a compliment of engineering staff centrally located
near the Company's largest customers.
The Company utilizes computer-aided design, computer-aided engineering
and computer-aided manufacturing (CAD/CAE/CAM) in the design of a wheel, finite
element analysis to identify potential design problems prior to manufacturing
and three dimensional prototyping for styling evaluation. Additionally, in
1994 the Company added fluid flow and thermal analysis capabilities to aid in
molds and casting cycles at both its engineering centers in Van Nuys,
California and Fayetteville, Arkansas. By continuously improving its
engineering capabilities, the Company is able to reduce the time required to
develop a wheel and identify cost saving technologies which can be shared with
customers.
As part of the Company's on-going continuous improvement programs,
manufacturing technologies and processes are continually challenged, refined,
and enhanced to ensure the Company maintains its position as the low cost and
highest quality manufacturer of cast aluminum wheels.
Development of the Company's patented helium leak testing device for
aluminum wheels has been a breakthrough in the Company's ongoing effort to
provide the most efficient manufacturing processes and methods. These
machines, which detect microscopic leaks at a rapid rate, are currently
utilized in several of the Company's facilities. The Company is continuing to
develop new and more advanced technologies in this field. In this regard, the
Company has recently released the newest and most advanced model of the helium
leak test machines to date, the HLT- 4000. Through its wholly-owned
subsidiary, Superior Engineered Technologies, Inc., the Company has begun to
market this technology and has made limited shipments of helium leak test
machines to other companies since 1993.
Further evidencing the Company's commitment towards diversifying its
product lines and maintaining a leadership position in new technologies,
shortly after year end 1995, the Company consumated a joint venture agreement
with Aluminum Company of America ("Alcoa") to manufacture and sell a new line
of cast aluminum wheels for commercial trucks and buses in the class 3 through
8 range. Class 3 through 8 vehicles include small or medium size wholesale and
retail delivery trucks, airport-type courtesy vans, motor homes, buses and
heavy duty over-the-road tractor trailer rigs. During 1995, the Company
developed a cast aluminum wheel for this market and will manufacture wheels at
its Van Nuys facility marketed under the Alcoa name through Alcoa's existing
Wheel Division sales organization. The joint venture could serve as a basis
for the Company to expand its technology to develop other cast aluminum parts.
Through joint-ventures and development projects, technological
advances, new processes and expanded engineering capabilities, the Company is
positioning itself to become a full spectrum manufacturer of aluminum wheels as
well as other aluminum products.
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The Company is currently engaged in 37 engineering programs for the
development of OEM wheels for future model years, including several wheel
models for Japanese, Latin American and European OEM manufacturers, including 5
engineering programs for the development of chrome-plated aluminum wheels.
Reference is made to Note 1 of "Notes to Consolidated Financial
Statements" in the Annual Report which is incorporated herein by reference for
a summary of research and development costs over the past three years.
Government Regulation
Safety standards in the manufacture of vehicles and automotive
equipment have been established under the National Traffic and Motor Vehicle
Safety Act of 1966. The Company believes that it is in compliance with all
federal standards currently applicable to OEM suppliers and to automotive
aftermarket manufacturers and products.
Environmental Controls
The Company's manufacturing facilities are subject to solid waste,
water and air pollution control standards mandated by federal, state and local
laws. Violators of these laws are subject to fines and in extreme cases plant
closure. Although from time to time the Company has paid fines arising out of
asserted violations of these standards, no such fines have been material in
nature. The Company believes it is substantially in compliance with all
standards presently applicable. Compliance with environmental regulations has
necessitated changes in processes and equipment upgrades and may in certain
instances require the acquisition of "trading credits". The 1995 annual cost
of environmental compliance is approximately $1,200,000 and the Company
anticipates spending no more than $1,000,000 relating to domestic capital
expenditures for environmental equipment over the next two years. The Company
will continue on an on-going basis to modify its processes in order to maintain
compliance with federal, state and local laws. See Item 3. "Legal Proceedings"
for information concerning the Company's involvement with certain United States
Environmental Protection Agency activities.
Liability Insurance
The Company maintains liability insurance including product liability,
for limits it believes are appropriate to match the risks and exposures
inherent to the Company's business. Over the past five years, the Company has
never settled claims in excess of the coverage then in effect.
Competition
The business sectors in each of the Company's product areas are highly
competitive. The Company is the world's largest supplier of cast aluminum road
wheels for OEM installations and the Company believes it holds approximately 40
percent of the domestic market for cast aluminum road wheels for automotive
installation. Since 1980 the demand for OEM cast aluminum road wheels has
grown from approximately four percent of vehicle installations to almost 44
percent. The Company anticipated this eventuality and developed new
state-of-the-art "world class" manufacturing facilities located closer to OEM
final assembly plants. The Company believes that as a result it has become
very competitive both in
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terms of cost and quality. The Company's primary competitor in the North
American market is Hayes Wheels International, Inc.
In the aftermarket business intense market competition has been
heightened by ongoing market contraction of major retailers and the presence of
more products manufactured outside the United States. In order to retain
valued customers, the Company has had to provide greater sales allowances to
its customers and has been generally unable to pass along timely and matching
selling price increases. These factors in the past have contributed to
diminished margins in the aftermarket business.
Employees
As of December 31, 1995, the Company had approximately 4,500 full-time
employees. At the present time approximately 80 employees at the Company's
Tijuana, Mexico maquiladora, which polishes wheels for aftermarket
applications, are covered by collective bargaining agreements.
In March 1995 the International Union, United Automotive, Aerospace &
Agricultural Implement Workers of American (the "UAW") filed a representation
petition with the National Labor Relations Board ("NLRB") seeking an election
among the production, maintenance and warehouse workers at the Company's
Johnson City, Tennessee production facility. On May 26, 1995, a secret ballot
election was conducted by the National Labor Relations Board at the Johnson
City plant to determine if employees wished to be represented by the UAW.
Employees voted 239 to 145 against representation by the UAW. In 1994, the
employees of the Johnson City plant had already voted against representation by
the same union.
ITEM 2. PROPERTIES
The Company maintains and operates 10 facilities (including an idle
facility in Oskaloosa, Iowa) located in Arkansas, California, Iowa, Kansas,
Tennessee, Puerto Rico, and Baja and Chihuahua, Mexico. The facilities
encompass manufacturing, warehouse and office space in 15 buildings with
approximately 2.2 million square feet. Six of the buildings are owned by the
Company, with the remainder operated under lease agreements expiring at various
dates through 2063.
The Company's corporate offices, manufacturing and warehousing
facilities located in Van Nuys, California are subleased from Louis L. Borick,
its President and Chairman of the Board, and Juanita A. Borick. The Company
also leases additional plant and warehousing facilities in Van Nuys, California
from Keswick Properties, owned jointly by Steven J. Borick, a director of the
Company, and two other of Mr. Louis L. Borick's children and the Borick
Building Corporation, a company wholly-owned by Louis L. Borick and Juanita A.
Borick. The Company believes that the terms of the aforementioned leases are
no less favorable than those which it could obtain from an unaffiliated party
on similar property with comparable facilities in the vicinity.
In general, the facilities are in good operating condition, have been
designed and constructed for their specific use, and are adequate to meet the
productive capacity requirements of each plant.
Page 12
13
Additionally, reference is made to Notes 3 and 10 of the "Consolidated
Financial Statements" and "Notes to Consolidated Financial Statements" section
of the Annual Report which are incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
In 1988, the Company was notified by the United States Environmental
Protection Agency (EPA), that the Company is considered a potentially
responsible party (PRP) for costs to clean up the Operating Industries, Inc.
(OII) site because of deposits, which were permitted and approved by
appropriate regulatory agencies when made, at the site located in Monterey
Park, California. The total costs to clean up the site cannot be determined
but the EPA has informed all PRP's that such costs may exceed $500 million.
The PRP's are jointly and severally liable although it is possible that the EPA
will accept contribution according to the severity of the deposits made. The
Company's insurance carriers have been placed on notice and their insurance
policies are currently under review to determine whether the Company's
liability is covered by insurance. To date, by private agreement with the
other settling defendants, the Company has paid $461,816, net of settlements
from other parties, to settle its liability under the first three phases of
clean-up. Based on facts now known to the Company, including the low level of
participation claimed against the Company by the EPA and based on the number
and financial strength of Companies with greater participation in the cleanup
activities, management believes sufficient reserves have been established to
cover the Company's ultimate financial exposure.
On December 5, 1995, a class action complaint was filed in the United
States District Court - Central District of California against the Company and
certain of its officers and directors. The complaint is on behalf of all
purchasers of the Company's common stock during the period from March 31, 1995
through September 7, 1995. The Complaint seeks unspecified damages, interest,
attorney's fees and other costs and extraordinary equitable and/or injunctive
relief. Management of the Company believes the action is without merit and
intends to vigorously defend against the allegations in the Complaint.
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Page 13
14
ITEM 4. SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of 1995 to a vote of
security holders through the solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information regarding executive officers of the
Company who are not directors. Information regarding executive officers who
are directors is contained in the Company's Proxy Statement issued in
connection with its Annual Meeting of Stockholders scheduled to be held on May
17, 1996 which is incorporated herein by reference (1996 Proxy Statement). All
executive officers are appointed annually by the Board of Directors and serve
one-year terms. Also see "Employment Agreements" in the Company's 1996 Proxy
Statement.
Name Age Position
---- --- --------
Joseph T. D'Amico 66 Vice President, Materiel
Michael D. Dryden 58 Vice President, International
Business Development
Ronald F. Escue 50 Vice President, General Manager -
Aftermarket Wheel Division
James M. Ferguson 47 Vice President, OEM Marketing Group
Morris Herstein 68 Vice President, Services
John Knott 55 Vice President, Manufacturing
Daniel L. Levine 37 Corporate Secretary and Assistant Treasurer
Henry C. Maldini 61 Vice President, Engineering
Michael J. O'Rourke 34 Vice President, Program Administration
Delbert J. Schmitz 63 Vice President, Aftermarket Marketing
Joseph T. D'Amico
Mr. D'Amico joined Superior in 1981 as Director of Materiel. In 1984,
he was promoted to Vice President, Materiel. He is responsible for domestic
and international purchasing, raw materials and finished goods inventories,
warehousing, receiving, distribution, traffic and material control.
Michael D. Dryden
Mr. Dryden joined Superior in March 1990 as Vice President,
International Business Development to assist Mr. Ferguson in the sales and
marketing of products to international original equipment manufacturers. For
the prior five years, he served as the Director of Business Development,
Asia-Pacific for Kelsey Hayes Company, Aluminum Wheel Group.
Page 14
15
Ronald F. Escue
Mr. Escue became Vice President, Aftermarket Sales in January 1987 and
he was promoted to Vice President, General Manager - Aftermarket Wheel division
in January 1995. He is responsible for the Company's aftermarket wheel
division including, nationwide sales, marketing and manufacturing activities.
He joined Superior in September 1975.
James M. Ferguson
Mr. Ferguson joined Superior in 1977 as an OEM Sales Engineer and
became an officer in 1984 and was promoted in 1990 to Vice President, OEM
Marketing Group. He is responsible for assisting Mr. Raymond C. Brown, Senior
Vice President, in directing the sales and marketing of products for national
and international original equipment manufacturers.
Morris Herstein
Mr. Herstein, Vice President, Services, has held this position since
1957, and is responsible for Superior's industrial relations and safety
programs. His brother-in-law, Louis L. Borick, is Superior's President and
Chairman of the Board of Directors.
John L. Knott
Mr. Knott joined Superior in 1995 as Vice President, Manufacturing.
Before coming to Superior, Mr. Knott was Vice President and General Manager of
the Norris Defense Unit of NI Industries.
Daniel L. Levine
Mr. Levine became Corporate Secretary in March 1996. He is also
responsible for overseeing the Company's taxes and assisting in the
administration of corporate treasury activities, including risk management and
credit. He joined Superior in 1990.
Henry C. Maldini
Mr. Maldini was appointed Vice President, Engineering in June 1986.
Previously he was Assistant Vice President, Engineering for the Company. He
joined the Company in 1975.
Michael J. O'Rourke
Mr. O'Rourke was appointed Vice President, Program Administration in
July 1995. He is responsible to assist in the administration of OEM sales and
marketing programs of the Company including executive oversight of the
Company's Detroit technical sales center. Mr. O'Rourke joined Superior in
1987. Prior to his promotion he held various managerial positions in the
marketing department.
Page 15
16
Delbert J. Schmitz
Mr. Schmitz was appointed Vice President, Aftermarket Marketing in
January 1987 and is responsible for the marketing and sales of the Company's
entire line of aftermarket accessories. Mr. Schmitz was employed as Vice
President, Sales from 1972 until January 1987.
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Page 16
17
PART II
ITEM 5. MARKET FOR REGISTRANT'S
SECURITIES AND RELATED
STOCKHOLDER MATTERS
Reference is made to the "Quarterly Common Stock Price Information,"
"Financial Highlights", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 15 to "Notes to Consolidated
Financial Statements" sections of the Annual Report which are incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Reference is made to the "Financial Highlights" section of the Annual
Report which is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Except for the historical information contained herein, the matters
addressed in this item 7 constitute "forward-looking statements". Such
forward-looking statements are subject to a variety of risks and uncertainties
that could cause actual results to differ materially from those anticipated by
the Company's management.
Reference is made to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the Annual Report
which is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA
Reference is made to the "Consolidated Financial Statements" and
"Notes to Consolidated Financial Statements" sections of the Annual Report
which is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
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Page 17
18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT
Reference is made to Item 4. "Executive Officers of the Registrant"
and the Company's 1996 Proxy Statement which is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the Company's 1996 Proxy Statement which is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Reference is made to the Company's 1996 Proxy Statement which is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Reference is made to the Company's 1996 Proxy Statement which is
incorporated herein by reference.
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Page 18
19
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
The following documents are filed as a part of this report:
(a)1. Financial Statements
The following financial statements of the Registrant, together with
the Report of Independent Public Accountants, are included in the
Annual Report, which is incorporated herein by reference, and filed
herewith as part of this report:
(1) Report of Independent Public Accountants
(2) Consolidated Statements of Income for each of the three years
in the period ended December 31, 1995
(3) Consolidated Balance Sheets as of December 31, 1995 and 1994
(4) Consolidated Statements of Shareholders' Equity for each of
the three years in the period ended December 31, 1995
(5) Consolidated Statements of Cash Flows for each of the three
years in the period ended December 31, 1995
(6) Notes to Consolidated Financial Statements
2. Supplemental Financial Statement Schedules
The following report and schedule appear on pages 24 and 26 of this
report:
(1) Report of Independent Public Accountants on Supplemental
Schedule
(2) Schedule II, Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted because the
required information is shown in the consolidated financial statements
or in the notes thereto, or the amounts involved are not significant
or the required matter is not applicable.
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Page 19
20
3. Exhibits
3.1 Articles of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.)
3.2 By-Laws of the Registrant (Incorporated by reference to Exhibit 3.2 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1994.)
9.1 Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1985.)
9.2 First Amendment to the Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1989.)
9.3 Second Amendment to the Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to Registrant's Quarterly
Report on Form 10-Q for the Quarter ended September 30, 1992.)
9.4 Third Amendment to the Voting Trust Agreement.
10.2 Lease dated March 2, 1976 between the Registrant and Louis L. Borick filed on Form 8-K dated May, 1976 (Incorporated
by reference to Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1983.)
10.9 Incentive Stock Option Plan and Third Amendment of Non-Qualified Stock Option Plan of the Registrant (Incorporated by
reference to the Registrant's 1984 Proxy Statement.)
10.11 Lease Agreement dated December 18, 1970 and amendments dated November 30, 1974 and April 20, 1981 between Borick
Building Corporation and Registrant (Incorporated by reference to Exhibit 10.11 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1983.)
10.15 Employment Agreement dated January 1, 1992 between Louis L. Borick and the Registrant (Incorporated by reference
to Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1991.)
10.16 Employment Agreement dated January 1, 1987 between Raymond C. Brown and the Registrant (Incorporated by reference
to Exhibit 10.16 to Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1986.)
10.17 Employment Agreement dated January 1, 1987 between R. Jeffrey Ornstein and the Registrant (Incorporated by reference
to Exhibit 10.17 to Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1986.)
10.19 Lease and Addenda thereto dated December 19, 1987 between Steven J. Borick, Linda S. Borick and Robert A. Borick as
tenants in common, d.b.a. Keswick Properties, and the Registrant (Incorporated by reference to Exhibit 10.19 to
Registrant's Annual Report on Form 10-K for the year ended December 31, 1987.)
Page 20
21
10.20 Supplemental Executive Retirement Plan of the Registrant (Incorporated by reference to Exhibit 10.20 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1987.)
10.24 1988 Stock Option Plan of the Registrant (Incorporated by Reference to Exhibit 10.24 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1988.)
10.26 $25 million Note Agreement dated as of September 15, 1989 between Aetna Life Insurance Company, Teachers Insurance
Annuity Association of America and the Registrant (Incorporated by Reference to Exhibit 10.25 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1989.)
10.27 Stock Option Agreement dated February 24, 1989 between the Registrant and Louis L. Borick (Incorporated by reference
to Exhibit 28.2 to Registrant's Form S-8 dated November, 1989.)
10.30 Amendment dated January 1, 1991 to Employment agreements between the Registrant and each of Raymond C. Brown and
R. Jeffrey Ornstein (Incorporated by Reference to Exhibit 10.29 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990.)
10.32 Employment Agreement dated January 1, 1994 between Louis L. Borick and the Registrant (Incorporated by reference to
Exhibit 10.32 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
10.33 1993 Stock Option Plan of the Registrant (Incorporated by reference to Exhibit 28.1 to Registrant's Form S-8 filed
June 10, 1993.)
10.34 Amendment to the 1988 Stock Option Plan of the Registrant (Incorporated by reference to Exhibit 10.34 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1991.)
10.35 1991 Non-Employee Director Stock Option Plan (Incorporated by reference to Exhibit 28.1 to Registrant's Form S-8
dated June, 1992.)
10.36 Stock Option Agreement dated March 9, 1993 between Louis L. Borick and the Registrant (Incorporated by Reference
to Exhibit 28.2 to Registrant's Form S-8 filed June 10, 1993.)
10.38 Stock Option Agreement dated January 4, 1993 between Robert F. Sloane and the Registrant (Incorporated by Reference to
Exhibit 28.3 to Registrant's Form S-8 filed June 10, 1993.)
10.39 Chief Executive Officer Annual Incentive Program dated May 9, 1994 between Louis L. Borick and the Registrant
(Incorporated by reference to Exhibit 10.39 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994.)
Page 21
22
10.40 Letter dated February 15, 1995 between Iftikhar H. Kazmi and the Registrant (Incorporated by reference to
Exhibit 10.40 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
10.41 Amendment dated December 15, 1995 to Employment agreements between Registrant and Raymond C. Brown and R. Jeffrey
Ornstein.
11.1 Computation of earnings per share (see Note 7 of "Notes to Consolidated Financial Statements" in the Annual Report
to Shareholders which is incorporated herein by reference.)
13.1 1995 Annual Report to Shareholders
21.1 List of Subsidiaries of the Company
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants for the Registrant
27.1 1995 Financial Data Schedule
1996 Proxy Statement
(b) Reports of Form 8-K
No reports on Form 8-K have been filed during the fourth quarter of
1995.
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Page 22
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(This page intentionally left blank)
Page 23
24
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE
To Superior Industries International, Inc.:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Superior Industries
International, Inc.'s annual report to shareholders incorporated by reference
in this Form 10-K, and have issued our report thereon dated February 13, 1996.
Our audits were made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed in the index above is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly state in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Los Angeles, California
February 13, 1996
Page 24
25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
March 22, 1996
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
By /s/ Louis L. Borick
-----------------------------------------
LOUIS L. BORICK
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Louis L. Borick President, March 22, 1996
- ----------------------- Chairman of the Board
Louis L. Borick and Director
(Principal Executive Officer)
/s/ R. Jeffrey Ornstein Vice President & CFO March 22, 1996
- ----------------------- and Director
R. Jeffrey Ornstein (Principal Financial Officer)
/s/ Raymond C. Brown Senior Vice President March 22, 1996
- ----------------------- and Director
Raymond C. Brown
/s/ Sheldon I. Ausman Director March 22, 1996
- -----------------------
Sheldon I. Ausman
/s/ Steven J. Borick Director March 22, 1996
- -----------------------
Steven J. Borick
/s/ Philip W. Colburn Director March 22, 1996
- -----------------------
Philip W. Colburn
/s/ V. Bond Evans Director March 22, 1996
- -----------------------
V. Bond Evans
/s/ Jack H. Parkinson Director March 22, 1996
- -----------------------
Jack H. Parkinson
Page 25
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
March 22, 1996
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
By
-------------------------------------
LOUIS L. BORICK
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
President, March 22, 1996
- --------------------------- Chairman of the Board
Louis L. Borick and Director
(Principal Executive Officer)
Vice President & CFO March 22, 1996
- --------------------------- and Director
R. Jeffrey Ornstein (Principal Financial Officer)
Senior Vice President March 22, 1996
- --------------------------- and Director
Raymond C. Brown
Director March 22, 1996
- ---------------------------
Sheldon I. Ausman
Director March 22, 1996
- ---------------------------
Steven J. Borick
Director March 22, 1996
- ---------------------------
Philip W. Colburn
Director March 22, 1996
- ---------------------------
V. Bond Evans
Director March 22, 1996
- ---------------------------
Jack H. Parkinson
Page 25
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SUPERIOR INDUSTRIES INTERNATIONAL, INC. AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
ALLOWANCE FOR DOUBTFUL ACCOUNTS
BALANCE AT DECEMBER 31, 1992 $ 832,000
ADD (DEDUCT):
PROVISION -
RECOVERIES 13,000
ACCOUNTS WRITTEN OFF (276,000)
---------
BALANCE AT DECEMBER 31, 1993 569,000
ADD (DEDUCT):
PROVISION -
RECOVERIES 1,000
ACCOUNTS WRITTEN OFF (29,000)
---------
BALANCE AT DECEMBER 31, 1994 541,000
---------
ADD (DEDUCT):
PROVISION 244,000
RECOVERIES 20,000
ACCOUNTS WRITTEN OFF (83,000)
---------
BALANCE AT DECEMBER 31, 1995 $ 722,000
=========