Superior Industries International, Inc. (SSUP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Tim McQuay, Chairman of the Board of Superior Industries International, Inc, and it is my pleasure to welcome all of you. We are excited to be hosting our meeting virtually again this year, which allows us to be more inclusive and reach a greater number of our stockholders. We have stockholders attending via the web portal. We will answer questions, which can be submitted via the portal prior to the voting though we may not be able to answer every single question, we will do our best to provide a response to as many as possible. It is just after 10:00 a.m. Eastern Time on May 25, 2021, and in accordance with the notice of the meeting, I call to order the Annual Meeting of Stockholders. Before we get to the formal business of the meeting, I should mention that the members of our Board of Directors are represented on the call with us today, as well as Amber Stack of Deloitte & Touche LLP, our independent registered public accounting firm. I will preside as Chairman of today's meeting, and Joanne Finnorn will act as the secretary for this meeting. In order to ensure an orderly meeting, we ask that you honor the rules of conduct and procedures for the meeting posted on the web portal. At this time, I will turn the meeting over to Superior's President and CEO, Majdi Abulaban.

Thank you, Tim. There are 4 items of business on today's agenda: first, the election of directors; second, the nonbinding advisory approval of the compensation of our named executive officers; third, the approval of the amendment to the 2018 equity incentive plan to, among other things, increase the number of shares of common stock available for issuance by 2 million shares; and fourth, the ratification of the selection of our independent registered public accounting firm. I will describe each proposal in more detail when we open the polls momentarily. There will be an opportunity for questions or comments prior to the vote. Please note that this meeting is being recorded. However, no one attending via webcast is permitted to use any audio recording device. To assure impartial vote tabulation, Broadridge has been designated as the inspector of election for this meeting. Christine Sundberg of Broadridge is representing Superior and has signed an oath to faithfully execute her duties as inspector of election. Ms. Finnorn will now report on the mailing of the proxy material and the presence of a quorum for this meeting.

As Secretary, I hereby present that a sworn affidavit of mailing has been delivered attesting to the mailing of the notice of this meeting on or about April 15, 2021, to company's stockholders of record at the close of business on March 31, 2021, which is the record date for purposes of voting at this meeting. Superior's transfer agent prepared a complete list of the holders of record of common stock entitled to vote at this meeting. The list includes the names and addresses of the stockholders arranged in alphabetical order and the number of shares held. As Secretary, I will file with the records of the company, a copy of the notice of this meeting, the proxy statement, the form of proxy, the 2020 annual report and the affidavit concerning the mailing of these materials. The stockholder list shows that as of the record date, there were 31,273,788 shares of common stock outstanding and entitled to vote at this meeting. We are informed by the inspector of elections that there are represented in-person or by proxy, shares of common stock representing 25,455,238 votes or approximately 81% of the voting power on the record date. Since this represents more than a majority of the voting power of all issued and outstanding stock entitled to vote on the record date, a quorum is present for purposes of transacting business.

Thank you. We will now proceed to the question-and-comment period. [Operator Instructions] Okay. We have received a question related to the company's commitment to net debt reduction. Let me take that. Our focus and our priority for some time has been on deleveraging the company. Our focus has been on growing EBITDA, on managing our net working capital, on prudent capital investments. This focus has resulted in a very strong liquidity position for our company. And this focus, frankly, will continue. Our liquidity position creates options for us that we continue to pursue, again, to improve our leverage position for the company. We have a second question related to the company's commitment to create environmentally friendly products. I would tell you that this has been a key focus area for us in the company, creating environmentally friendly products, and we will be communicating externally on this front. Over the past 2 years, our supply chain teams have been working very closely with suppliers on sustainable aluminum contracts. In fact, over 50% of our aluminum buy now comes through sustainable -- from sustainable aluminum through the contracts we have secured. We are today delivering what I would call sustainable wheels to several of our customers, both in North America and Europe using green aluminum, utilizing our lightweighting technology, lightweighting enables the vehicle to reduce CO2 emissions, utilizing clean energy. Our facility, for example, in Germany uses 100% renewable energy. Our facilities in Mexico use more than 60% energy utilizing Hydro Power. We feel good. We feel good about our position. We feel good about our progress, and we're going to continue this focus. Okay. Thank you. There are no more questions. As mentioned, there are 4 items of business to be voted on today. Detailed information concerning each of these items is contained in the proxy statement furnished in connection with this meeting. The first item of business to come before the meeting is the election of 8 directors to the Board of Directors. In accordance with the bylaws of the company, each director will be elected to serve until the next annual meeting and until his or her successor has been elected and qualified or until the director's earlier death, resignation or removal. The Board of Directors recommends that the following nominees for election: Majdi Abulaban, Ray Benvenuti, Mike Bruynesteyn, Dick Giromini, Paul Humphries, Ransom Langford, Tim McQuay and Ellen Richstone. The names of each of the aforementioned nominees shall be deemed duly placed in nomination. These 8 individuals are the only persons who have been nominated to stand for election as directors. The second item of business to come before the meeting is a nonbinding advisory vote to approve the executive compensation of Superior's named executive officers for the fiscal year ended December 31, 2020. The Board of Directors recommends a vote for this proposal. The third item of business to come before the meeting is the approval of an amendment to the company's 2018 incentive plan to, among other things, increase the number of shares of common stock available for issuers under the plan by 2 million shares. The Board of Directors recommends a vote for this proposal. The fourth and final item of business to come before the meeting is the ratification of the appointment of Deloitte & Touche LLP as Superior's independent registered public accounting firm for the fiscal year ending December 31, 2021. The Board of Directors recommends a vote for this proposal. All agenda items are deemed duly placed before the meeting. The polls are now open. Any stockholder who hasn't voted or wishes to change their vote, may do so by clicking on the Voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or internet and do not want to change their vote, do not need to take any further action. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls for the 2021 Superior Industries International Inc. Annual Stockholder Meeting closed. The inspector of election will provide a final report on the voting results next week. However, based on preliminary tally provided by Christine Sundberg, our inspector of election, Majdi Abulaban, Rav Benvenuti, Michael Bruynesteyn, Richard Giromini, Paul Humphries, Ransom Langford, Timothy McQuay and Ellen Richstone have been elected to the Board, and Proposals 2, 3 and 4 have been approved. Tim?

Thank you, Majdi, and thank you, ladies and gentlemen. This completes our agenda for the day, and the meeting is now adjourned.