Superior Industries adjusts loan terms, raises liquidity threshold

In a recent move to restructure its financial obligations, Superior Industries International Inc. (NYSE:SUP) has amended its existing term loan agreement, raising the liquidity threshold that triggers mandatory prepayment from $80 million to $115 million. The amendment, effective March 31, 2025, also allows the company to factor in assets under certain securitization agreements when calculating liquidity. According to InvestingPro data, the company carries a substantial debt burden of $496.34 million while maintaining a current ratio of 1.58, indicating its ability to meet short-term obligations.

This strategic adjustment was disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission on Wednesday. The amendment modifies the Amended and Restated Term Loan Agreement originally dated August 14, 2024, involving Superior Industries, various lenders, Oaktree Fund Administration, LLC as the administrative agent, and JPMorgan Chase (NYSE:JPM) Bank, N.A. as the collateral agent. InvestingPro analysis reveals that Superior Industries has been quickly burning through cash, with negative levered free cash flow of nearly $10 million in the last twelve months.

The revision of the liquidity threshold and the inclusion of securitization agreements in the liquidity calculation are the primary changes. These modifications provide Superior Industries with increased financial flexibility. All other material terms of the existing agreement remain unchanged.

This financial maneuver comes as Superior Industries, a key player in the motor vehicle parts and accessories sector, continues to navigate the competitive and dynamic automotive industry landscape. The company’s decision to amend the loan agreement is based on a material definitive agreement, which is standard practice for publicly traded companies managing their capital structures.

Superior Industries has not disclosed any further details regarding the potential impact of this amendment on its operations or financial performance. The information provided in this article is based on the company’s press release statement and the regulatory filing with the SEC.

In other recent news, Superior Industries International reported its fourth-quarter 2024 earnings, revealing a significant loss that exceeded expectations. The company posted an EPS of -$0.75, which fell short of the forecasted EPS of -$0.04. Revenue for the quarter was $310 million, missing the projected $348.57 million. For the full year, net sales decreased to $1.3 billion from $1.4 billion in 2023, with a net loss of $78 million. Despite these financial challenges, Superior Industries has consolidated its European manufacturing in Poland, closing its German facilities to improve efficiency. The company forecasts challenging market conditions in early 2025, with expected net sales between $1.3 billion and $1.4 billion for the year. Analysts have not yet provided any upgrades or downgrades, but Superior Industries continues to focus on innovation and premium product offerings. The company is also investing strategically in automation to enhance its competitive position.

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