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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-06615

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware	95-2594729
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

26600 Telegraph Road, Suite 400
Southfield, Michigan	48033
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (248) 352-7300

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	SSUP	OTC Pink Market

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of August 1, 2025: 29,698,422

TABLE OF CONTENTS


				Page
PART I	-	FINANCIAL INFORMATION

		Item 1	Condensed Consolidated Financial Statements (Unaudited)	1

			Condensed Consolidated Statements of Income (Loss)	1

			Condensed Consolidated Statements of Comprehensive Income (Loss)	2

			Condensed Consolidated Balance Sheets	3

			Condensed Consolidated Statements of Cash Flows	4

			Condensed Consolidated Statements of Shareholders’ Equity (Deficit)	5

			Notes to Condensed Consolidated Financial Statements	7

		Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

		Item 3	Quantitative and Qualitative Disclosures about Market Risk	41

		Item 4	Controls and Procedures	41

PART II	-	OTHER INFORMATION

		Item 1	Legal Proceedings	42

		Item 1A	Risk Factors	42

		Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	45

		Item 3	Defaults upon Senior Securities	45

		Item 4	Mine Safety Disclosures	45

		Item 5	Other Information	45

		Item 6	Exhibits	46

		Signatures		47

PART I

FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Dollars in thousands, except per share amounts)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
NET SALES	$	207,897		$	318,967		$	529,499		$	635,243
Cost of sales		229,345			287,347			534,847			582,477
GROSS PROFIT (LOSS)		(21,448	)		31,620			(5,348	)		52,766
Selling, general and administrative expenses		24,861			21,376			40,339			42,208
Impairment of long-lived assets		66,906			—			66,906			—
INCOME (LOSS) FROM OPERATIONS		(113,215	)		10,244			(112,593	)		10,558
Interest expense, net		(18,133	)		(15,823	)		(35,165	)		(31,701	)
Other income (expense), net		(4,235	)		875			(6,195	)		338
INCOME (LOSS) BEFORE INCOME TAXES		(135,583	)		(4,704	)		(153,953	)		(20,805	)
Income tax (provision) benefit		(45,470	)		(6,420	)		(40,029	)		(23,068	)
NET INCOME (LOSS)	$	(181,053	)	$	(11,124	)	$	(193,982	)	$	(43,873	)
EARNINGS (LOSS) PER SHARE – BASIC	$	(6.66	)	$	(0.75	)	$	(7.63	)	$	(2.26	)
EARNINGS (LOSS) PER SHARE – DILUTED	$	(6.66	)	$	(0.75	)	$	(7.63	)	$	(2.26	)

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Net income (loss)	$	(181,053	)	$	(11,124	)	$	(193,982	)	$	(43,873	)
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss), net of tax		38,726			(18,247	)		48,924			(15,748	)
Change in unrecognized gains (losses) on derivative instruments:
Change in fair value of derivatives		214			(20,723	)		5,405			(17,257	)
Tax (provision) benefit		1,261			4,747			—			3,975
Change in unrecognized gains (losses) on derivative instruments, net of tax		1,475			(15,976	)		5,405			(13,282	)
Defined benefit pension plan:
Amortization of actuarial losses on pension obligation		—			3			—			3
Tax (provision) benefit		—			—			—			178
Pension changes, net of tax		—			3			—			181
Other comprehensive income (loss), net of tax		40,201			(34,220	)		54,329			(28,849	)
Comprehensive income (loss)	$	(140,852	)	$	(45,344	)	$	(139,653	)	$	(72,722	)

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)


	June 30, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	85,268		$	40,110
Accounts receivable, net		73,021			69,503
Inventories, net		128,336			145,736
Income taxes receivable		11,744			11,374
Current derivative financial instruments		—			22,578
Other current assets		22,314			19,460
Total current assets		320,683			308,761
Property, plant and equipment, net		274,838			329,892
Deferred income tax assets, net		—			39,046
Intangibles, net		5,190			12,612
Derivative financial instruments		—			14,736
Other noncurrent assets		29,610			35,082
Total assets	$	630,321		$	740,129
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	108,930		$	120,351
Short-term debt		15,776			7,939
Accrued expenses		56,165			65,731
Income taxes payable		377			1,905
Total current liabilities		181,248			195,926
Long-term debt (less current portion)		537,490			481,449
Noncurrent income tax liabilities		2,957			5,341
Deferred income tax liabilities, net		197			1,105
Other noncurrent liabilities		34,422			43,581
Commitments and contingent liabilities (Note 15)
Mezzanine equity:
Preferred stock, $0.01 par value
Authorized – 1,000,000 shares
Issued and outstanding – 150,000 shares outstanding at June 30, 2025 and December 31, 2024		318,162			288,465
Noncontrolling redeemable equity		550			480
Shareholders’ equity (deficit):
Common stock, $0.01 par value
Authorized – 100,000,000 shares
Issued and outstanding – 29,698,422 and 28,886,053 shares at June 30, 2025 and December 31, 2024		123,913			123,039
Accumulated other comprehensive income (loss)		(44,142	)		(98,471	)
Retained earnings (deficit)		(524,476	)		(300,786	)
Total shareholders’ equity (deficit)		(444,705	)		(276,218	)
Total liabilities, mezzanine equity and shareholders’ equity (deficit)	$	630,321		$	740,129

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Six Months Ended
	June 30, 2025			June 30, 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(193,982	)	$	(43,873	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization		38,164			43,834
Income tax, noncash changes		41,538			18,659
Stock-based compensation		1,655			4,086
Amortization of debt issuance costs		3,563			2,370
Interest paid-in-kind on long-term debt		11,791			—
Impairment of long-lived assets		66,906			—
Other noncash items		8,331			(2,902	)
Changes in operating assets and liabilities:
Accounts receivable		(1,957	)		(28,544	)
Inventories		28,044			(6,358	)
Other assets and liabilities		(8,863	)		(1,933	)
Cash proceeds from early termination of derivative instruments		37,537			—
Accounts payable		(22,944	)		16,249
Income taxes		(3,750	)		(6,132	)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES		6,033			(4,544	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment		(11,911	)		(14,844	)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES		(11,911	)		(14,844	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of short-term debt		10,000			—
Repayments on term loans and notes		(3,475	)		(2,774	)
Proceeds from borrowings on revolving credit facility		65,473			—
Repayments of borrowings on revolving credit facility		(23,000	)		—
Cash dividends paid		—			(3,383	)
Financing costs paid and other		(903	)		(299	)
Payments related to tax withholdings for stock-based compensation		(781	)		(1,345	)
Finance lease payments		(456	)		(293	)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES		46,858			(8,094	)
Effect of exchange rate changes on cash		4,178			(1,862	)
Net changes in cash and cash equivalents		45,158			(29,344	)
Cash and cash equivalents at the beginning of the period		40,110			201,606
Cash and cash equivalents at the end of the period	$	85,268		$	172,262

Supplemental Cash Flow Information
Cash paid during the period for interest	$	20,687		$	31,625
Cash paid during the period for taxes, net of refunds	$	5,344		$	10,435
Non-cash inventory charge due to customer resourcing actions	$	12,149		$	—
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	$	7,566		$	2,982

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(Dollars in thousands)

(Unaudited)


For the three months ended June 30, 2025
	Common Stock				Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Amount		Cumulative Translation Adjustment			Hedging Instruments		Pension Obligations		Retained Earnings (Deficit)			Total
BALANCE AT APRIL 1, 2025		29,474,394	$	123,288	$	(117,980	)	$	31,576	$	2,061	$	(327,606	)	$	(288,661	)
Net income (loss)		—		—		—			—		—		(181,053	)		(181,053	)
Change in accumulated other comprehensive income (loss), net of tax		—		—		38,726			1,475		—		—			40,201
Common stock issued, net of shares withheld for employee taxes		224,028		—		—			—		—		—			—
Stock-based compensation		—		625		—			—		—		—			625
Redeemable preferred 9% dividend and accretion		—		—		—			—		—		(15,811	)		(15,811	)
Noncontrolling redeemable equity dividend		—		—		—			—		—		(6	)		(6	)
BALANCE AT JUNE 30, 2025		29,698,422	$	123,913	$	(79,254	)	$	33,051	$	2,061	$	(524,476	)	$	(444,705	)

For the six months ended June 30, 2025
	Common Stock				Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Amount		Cumulative Translation Adjustment			Hedging Instruments		Pension Obligations		Retained Earnings (Deficit)			Total
BALANCE AT JANUARY 1, 2025		28,886,053	$	123,039	$	(128,178	)	$	27,646	$	2,061	$	(300,786	)	$	(276,218	)
Net income (loss)		—		—		—			—		—		(193,982	)		(193,982	)
Change in accumulated other comprehensive income (loss), net of tax		—		—		48,924			5,405		—		—			54,329
Common stock issued, net of shares withheld for employee taxes		812,369		—		—			—		—		—			—
Stock-based compensation		—		874		—			—		—		—			874
Redeemable preferred 9% dividend and accretion		—		—		—			—		—		(29,697	)		(29,697	)
Noncontrolling redeemable equity dividend		—		—		—			—		—		(11	)		(11	)
BALANCE AT JUNE 30, 2025		29,698,422	$	123,913	$	(79,254	)	$	33,051	$	2,061	$	(524,476	)	$	(444,705	)


For the three months ended June 30, 2024
	Common Stock				Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Amount		Cumulative Translation Adjustment			Hedging Instruments			Pension Obligations		Retained Earnings (Deficit)			Total
BALANCE AT APRIL 1, 2024		28,600,152	$	115,924	$	(80,503	)	$	62,553		$	1,030	$	(221,911	)	$	(122,907	)
Net income (loss)		—		—		—			—			—		(11,124	)		(11,124	)
Change in accumulated other comprehensive income (loss), net of tax		—		—		(18,247	)		(15,976	)		3		—			(34,220	)
Common stock issued, net of shares withheld for employee taxes		285,901		—					—			—		—			—
Stock-based compensation		—		2,158		—			—			—		—			2,158
Redeemable preferred 9% dividend and accretion		—		—		—			—			—		(10,353	)		(10,353	)
Noncontrolling redeemable equity dividend		—		—		—			—			—		—			—
BALANCE AT JUNE 30, 2024		28,886,053	$	118,082	$	(98,750	)	$	46,577		$	1,033	$	(243,388	)	$	(176,446	)

For the six months ended June 30, 2024
	Common Stock				Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Amount		Cumulative Translation Adjustment			Hedging Instruments			Pension Obligations		Retained Earnings (Deficit)			Total
BALANCE AT JANUARY 1, 2024		28,091,440	$	115,340	$	(83,002	)	$	59,859		$	852	$	(178,989	)	$	(85,940	)
Net income (loss)		—		—		—			—			—		(43,873	)		(43,873	)
Change in accumulated other comprehensive income (loss), net of tax		—		—		(15,748	)		(13,282	)		181		—			(28,849	)
Common stock issued, net of shares withheld for employee taxes		794,613		—		—			—			—		—			—
Stock-based compensation		—		2,742		—			—			—		—			2,742
Redeemable preferred 9% dividend and accretion		—		—		—			—			—		(20,519	)		(20,519	)
Noncontrolling redeemable equity dividend		—		—		—			—			—		(7	)		(7	)
BALANCE AT JUNE 30, 2024		28,886,053	$	118,082	$	(98,750	)	$	46,577		$	1,033	$	(243,388	)	$	(176,446	)

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

Superior Industries International, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2025

(in thousands, except share or per share amounts, or as otherwise noted)

NOTE 1 – DESCRIPTION OF THE BUSINESS

Description of the Business

The principal business of Superior Industries International, Inc. (referred herein as the “Company” or “Superior”) is the design and manufacture of aluminum wheels for sale to original equipment manufacturers (“OEMs”) in North America and Europe, and to the aftermarket in Europe. The Company’s aluminum wheels are primarily sold to OEMs for factory installation on new light vehicles. Aluminum wheels sold in the European aftermarket are under the brands ATS, RIAL, ALUTEC, and ANZIO. North America and Europe represent the primary markets for the Company’s products, but it has a diversified global customer base consisting of North American, European, and Asian OEMs.

Proposed Merger

On July 8, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SUP Parent Holdings, LLC, a Delaware limited liability company (“Parent”), and SUP Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”) with the Company surviving the Merger as a direct wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of the lenders party to the Company’s existing Term Loan Agreement (as defined below).

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share, of the Company (each, a “Common Share”) and each share of preferred stock, par value $0.01 per share designated as Series A Preferred Shares (the “Series A Preferred Shares”), in each case, issued and outstanding immediately prior to the Effective Time (other than shares owned by (i) Parent or Merger Sub or any of their respective Subsidiaries, (ii) the Company as treasury stock and (iii) holders of Common Shares who have not voted in favor of the Merger or consented thereto and have properly exercised and perfected and not withdrawn, waived or lost a demand for appraisal rights pursuant to Section 262 of the Delaware General Corporation Law), will be converted into the right to receive:

•

with respect to each Common Share, $0.09 per Common Share in cash, without interest thereon (the “Common Stock Merger Consideration” and the aggregate of such amount for all Common Shares, the “Aggregate Merger Consideration”); and

•

with respect to each Series A Preferred Share, (1) an amount equal to the quotient of (x) the product of (a) the Aggregate Merger Consideration plus the aggregate consideration payable to the holders of Cash-Settled RSUs and Cash-Settled PSUs (each as defined in the Merger Agreement) pursuant to the Merger Agreement, multiplied by (b) two, divided by (y) the total number of issued and outstanding Series A Preferred Shares as of immediately prior to the Effective Time, in cash, without interest thereon and (2) the number of fully paid and nonassessable units representing limited liability company interests of Parent to be issued by Parent such that immediately following such issuance and the Effective Time, the former holders of all Series A Preferred Shares shall hold, in the aggregate, 3.5% of Parent’s common equity.

At the Effective Time, each outstanding equity award will be treated as follows:

•

Each outstanding time-based restricted stock unit (a “Company Restricted Stock Unit”) that was granted under the Company’s 2018 Equity Incentive Plan (the “Company Stock Plan”) that is outstanding as of immediately prior to the Effective Time, whether vested or unvested, will become fully vested and will terminate and be automatically cancelled as of immediately prior to the Effective Time in exchange for the right to receive a lump sum cash payment of an amount equal to the product of (i) the number of Common Shares underlying such Company Restricted Stock Unit, multiplied by (ii) the Common Stock Merger Consideration.

•

Each outstanding performance-based restricted stock unit (a “Company Performance Stock Unit”) that was granted under the Company Stock Plan that is outstanding as of immediately prior to the Effective Time, whether vested or unvested, will become fully vested as if the applicable level of performance was achieved at target and will terminate and be automatically cancelled as of immediately prior to the Effective Time in exchange for the right to receive a lump sum cash payment of an amount equal to the product of (i) the number of Common Shares subject to such Company Performance Stock Unit that would vest based on the applicable target level of achievement of the performance metrics, multiplied by (ii) the Common Stock Merger Consideration.

The parties’ respective obligations to consummate the Merger are subject to the satisfaction or waiver of certain conditions, including, among others: (i) the adoption of the Merger Agreement by the holders of a majority of the voting power of the outstanding common

and preferred stock of the Company, voting together as a single class, (ii) the receipt of certain consents or approvals from governmental entities, (iii) the absence of any law or governmental order from any governmental entity of competent jurisdiction prohibiting the Merger, (iv) no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred since the signing of the Merger Agreement, (v) entering into a revolving credit facility on terms reasonably acceptable to Parent and the Company, (vi) the execution of certain contracts in form and substance reasonably acceptable to Parent and (vii) certain customary conditions relating to the parties’ representations and warranties in the Merger Agreement and the performance of their respective obligations.

The transactions are expected to close in the third quarter of 2025. The Company has incurred and will continue to incur significant costs relating to the Merger, such as legal, accounting, financial advisory, and other professional services fees.

Additional information about the Merger is set forth in our Current Report on Form 8-K/A filed with the SEC on July 9, 2025, and our preliminary proxy statement filed with the SEC on July 30, 2025.

NOTE 2 – BASIS OF PRESENTATION

Basis of Presentation - Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments, of a normal and recurring nature, which management believes are necessary for fair presentation of the financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 6, 2025 (the “2024 Form 10-K”).

These unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions are eliminated in consolidation.

Interim financial reporting standards require the use of estimates that are based on assumptions regarding the outcome of future events and circumstances not known at that time. Inevitably, some assumptions may not materialize, unanticipated events or circumstances may occur which vary from those estimates and such variations may significantly affect future results. Additionally, operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Going Concern

During the three months ended June 30, 2025, the Company was notified by certain customers in North America of their intent to resource to other suppliers substantially all outstanding purchase orders in the near-term with a minimal wind-down period and to not issue any additional purchase orders to the Company thereafter. Prior to receiving these notifications, the Company estimated these customers to represent approximately 33% of its projected consolidated net sales for the 2025 fiscal year. These customers represented approximately 40% of the Company’s consolidated net sales for the year ended December 31, 2024, and approximately 36% of the Company’s consolidated net sales for the year ended December 31, 2023. During the three months ended June 30, 2025, the Company borrowed $42.5 million on its revolving credit facility, as the actions described above are expected to significantly affect the Company’s ability to generate cash from operating activities or from the sale of trade receivables in the near term.

The Company engaged third party financial advisors to assist management in seeking opportunities to improve liquidity and operational performance, evaluate additional debt or equity financing opportunities, and seek other strategic transactions. On June 4, 2025, the Company entered into an amendment to its Term Loan Agreement (as defined below) to, among other things, provide for an incremental $70.0 million delayed draw term loan facility (the “Delayed Draw Term Loan Facility”), of which $10.0 million was funded on June 4, 2025 and the remainder of which will be funded in accordance with the terms and conditions in the Term Loan Agreement, as so amended; refer to Note 7 “Debt and Other Financing Arrangements” for additional details on these amendments. Concurrently with the entry into the amendment to the Term Loan Agreement, the Company also amended its Revolving Credit Agreement (as defined below) to, among other things, permit the incurrence of the Delayed Draw Term Loan Facility. The amendments to the Term Loan Agreement and Revolving Credit Agreement also included, among other things, a limited waiver of the financial covenants thereunder for the test period ending on June 30, 2025 and permission to unwind the Company’s hedging arrangements and retain the proceeds thereof.

On July 8, 2025, the Company entered into a Merger Agreement, which is more fully described in Note 1 “Description of the Business”. The closing of the proposed Merger is subject to the satisfaction or waiver of certain conditions, some of which are not solely within the Company’s control.

While the Company has obtained a waiver related to its financial covenants under its Credit Agreements for the test period ended June 30, 2025, it does not expect that it will be able to meet its financial covenants as early as September 30, 2025. In addition, based on its current estimates and forecasts, it does not expect that it will have the cash and cash equivalents or sufficient liquidity to fund its operations and meet its obligations as they become due over the next twelve months from the issuance date of these unaudited condensed consolidated financial statements if it does not obtain additional sources of funding, amend the applicable provisions in its credit agreements, or obtain waivers with respect thereto prior to that date. Furthermore, since the conditions to closing the proposed Merger are not solely within the Company’s control, there can be no assurance that the Merger will be consummated on the anticipated terms and timing, or at all. Therefore, these adverse conditions and events described above raise substantial doubt about the Company’s ability to continue as a going concern as of the issuance date.

The unaudited condensed consolidated financial statements as of June 30, 2025 have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Cash and Cash Equivalents

Cash and cash equivalents generally consist of cash, certificates of deposit, fixed deposits, and money market funds with original maturities of three months or less. The Company is required to provide cash collateral in connection with certain contractual arrangements. The Company has $0.8 million and $0.4 million of restricted cash as of June 30, 2025 and December 31, 2024 in support of these arrangements and requirements.

Accounting Standards Issued But Not Yet Adopted

Accounting Standards Update (ASU) 2023-09, “Income Taxes (Topic 740).” In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which is intended to enhance the transparency, decision usefulness, and effectiveness of income tax disclosures. This amendment requires a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state, and foreign taxes and also disaggregated by individual jurisdictions. The amendment is effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The Company is currently evaluating the effect of adopting this guidance.

Accounting Standards Update (ASU) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures.” In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which is intended to provide disaggregated information about a public business entity’s expenses to help financial statement users better understand the entity’s performance, better assess the entity’s prospects for future cash flows, and compare an entity’s performance over time and with that of other entities. The amendment is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The new standard may be applied either on a prospective or retrospective basis. The Company is currently evaluating the effect of adopting this guidance.

NOTE 3 – REVENUE

The Company disaggregates revenue from contracts by its reportable segments, North America and Europe. Revenues by segment for the three and six months ended June 30, 2025 and 2024 are summarized in Note 5, “Business Segments.”

The opening and closing balances of the Company’s trade receivables, and current and long-term contract liabilities are as follows:


	June 30, 2025		December 31, 2024
Trade receivables		63,839		56,690
Contract liabilities—current		4,454		6,819
Contract liabilities—noncurrent		4,931		6,845

During the three and six months ended June 30, 2025 the Company recorded a non-cash charge of $3.1 million to write-down a customer trade receivable associated with the customer resourcing actions described in Note 2 “Basis of Presentation”.

NOTE 4 - DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE

The Company is exposed to market risks such as fluctuations in foreign currency exchange rates, interest rates, and aluminum and other commodity prices. Derivative financial instruments may be used to offset some of the effects of these market risks on the expected future cash flows and on certain existing assets and liabilities. In certain cases, the Company may or may not designate certain derivative instruments as hedges for accounting purposes. The Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.

Market Risks

Foreign Currency Exchange Rate Risk

The Company has manufacturing locations primarily in Mexico and Poland and sells its products globally. As a result, the Company’s financial results could be significantly affected by foreign currency exchange rates. To help mitigate gross margin and cash flow fluctuations due to changes in foreign currency exchange rates, certain subsidiaries in Mexico and Poland, whose functional currency is the U.S. dollar or the Euro, may hedge a portion of their forecasted foreign currency exposure denominated in the Mexican Peso and Polish Zloty using foreign currency forward contracts up to 48 months. The Company has designated some of its foreign currency contracts as cash flow hedging instruments.

Interest Rate Risk

The borrowings under the Company’s Senior Secured Credit Facilities (as subsequently defined) are at variable rates of interest and expose it to interest rate risk. If interest rates increase, debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same. The Company hedges a portion of its interest rate risk through interest rate swaps that exchange floating for fixed-rate interest payments and has designated these contracts as cash flow hedging instruments.

Commodity Price Risk

The principal raw material used in manufacturing aluminum wheels is aluminum alloys. While wheel prices under OEM customer contracts are adjusted for fluctuations in the cost of this material, the prices of its aftermarket wheels are generally fixed months in advance of the spring and winter sales seasons. Accordingly, the Company hedges a portion of its aftermarket aluminum purchases to offset the effect of fluctuating aluminum cost on its margins. In addition, the manufacture of aluminum wheels is energy-intensive so, the Company also fixes a portion of its natural gas and electricity purchases with derivatives or contractual arrangements with energy suppliers.

Assets and Fair Values Measured at Fair Value on a Recurring Basis

Asset and Liability Instruments

The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to the short period of time until maturity.

Derivative Financial Instruments

During the three months ended June 30, 2025, the Company terminated its outstanding foreign exchange, commodity, and interest rate derivative instruments. The derivative instruments have been derecognized as of June 30, 2025 and amounts in accumulated other comprehensive income (loss) remain there until the forecasted transactions affect earnings unless the forecasted transaction becomes probable of not occurring.

The fair value of the Company’s derivative instruments is estimated using the income valuation approach, which projects future cash flows and discounts the future amounts to a present value using market-based expectations for interest rates, foreign exchange rates, commodity prices, and the contractual terms of the derivative instruments (Level 2). The discount rate used is the relevant benchmark rate (e.g., the secured overnight financing rate, “SOFR”) plus an adjustment for counterparty risk.

The fair value of the Company’s embedded derivatives is estimated using either a market based approach or an income based approach, which uses Company-specific inputs and assumptions (Level 3), such as discount rates.

The following tables display the fair value of derivatives by financial statement line item as of June 30, 2025 and December 31, 2024:


		June 30, 2025
	Fair Value Hierarchy	Current Derivative Financial Instruments		Derivative Financial Instruments		Accrued Liabilities		Other Noncurrent Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts	Level 2	$	—	$	—	$	—	$	—
Commodity contracts	Level 2		—		—		—		—
Interest rate contracts	Level 2		—		—		—		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Level 2		—		—		—		—
Embedded derivative contracts	Level 3		—		—		165		698


		December 31, 2024
	Fair Value Hierarchy	Current Derivative Financial Instruments		Derivative Financial Instruments		Accrued Liabilities		Other Noncurrent Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts	Level 2	$	20,443	$	14,722	$	451	$	3,664
Commodity contracts	Level 2		258		14		2,341		1,233
Interest rate contracts	Level 2		1,536		—		—		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Level 2		341		—		—		—
Embedded derivative contracts	Level 3		—		—		626		1,403

The following table summarizes the notional amount of the Company’s derivative financial instruments as of June 30, 2025 and December 31, 2024:


	Notional Amount
	June 30, 2025		December 31, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	—	$	434,327
Commodity contracts - Natural Gas (1)		—	3,402 Btu
Commodity contracts - Aluminum (2)		—	— MT
Interest rate contracts	$	—	$	150,000
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	—	$	25,856

(1) Notional units are in thousands of British thermal units (Btu)

(2) Notional units are in thousands of Metric Tons (MT)

Notional amounts are presented on a net basis. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties and, therefore, are not a direct measure of the exposure to the financial risks described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives.

The following table summarizes the gain or loss recognized in other comprehensive income (loss) (“OCI (OCL)”), the amounts reclassified from accumulated OCI or OCL into earnings, and the amounts recognized directly into earnings for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended					Six Months Ended
	June 30, 2025		June 30, 2024			June 30, 2025		June 30, 2024
Derivatives designated as hedging instruments:
Amount of gain or (loss) recognized in OCI on derivatives, net of tax	$	1,475	$	(15,976	)	$	5,405	$	(13,282	)
Amount of pre-tax gain or (loss) reclassified from accumulated OCI into:
Cost of sales		4,485		8,785			9,983		16,815
Interest expense, net		448		1,140			918		2,287
Derivatives not designated as hedging instruments:
Amount of pre-tax gain or (loss) recognized in other income (expense), net of tax		1,977		(2,049	)		3,135		(1,824	)

The Company estimates approximately $24.9 million included in OCI or OCL at June 30, 2025 will be reclassified into net income (loss) within the following twelve months.

The Company has derivative liabilities associated with embedded features within its redeemable preferred stock (refer to Note 9 “Redeemable Shares”) and its term loan facility (refer to Note 8 “Debt and Other Financing Arrangements”).

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

In addition to items measured at fair value on a recurring basis, assets may be measured at fair value on a nonrecurring basis. These assets include long-lived assets and intangible assets which may be written down to fair value as a result of impairment.

Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable. As a result of the customer actions described in Note 2 “Basis of Presentation”, the Company concluded certain impairment triggers had occurred for its North America asset group. After failing the undiscounted cash flow recoverability test, the Company estimated the fair values of the long-lived assets within the North America asset group at June 30, 2025 and compared it to the net carrying value. The fair value measurements related to this long-lived asset group relies primarily on Company-specific inputs and the Company’s assumptions about the use of the assets, as observable inputs are not available (level 3). To determine the fair value of the long-lived asset group, the Company utilized an income-based and market-based approach. The Company believes the assumptions and estimates used to determine the estimated fair values of the long-lived asset group are reasonable; however, the estimates and assumptions are subject to a high degree of uncertainty. Due to the many variables inherent in estimating fair value differences in assumptions could have a material effect on the results of the analyses.

As the fair value of the North America long-lived asset group exceeded its net carrying value, the Company recorded a non-cash impairment charge of $66.9 million to property, plant, and equipment, during the three and six months ended June 30, 2025.

Financial Instruments Not Carried at Fair Value

Debt Instruments

The carrying values of the Company’s debt instruments vary from their fair values. The fair values are determined by reference to quoted prices for similar instruments (Level 2). The estimated fair value, as well as the carrying value, of the Company’s debt instruments are shown below:


	June 30, 2025		December 31, 2024
Estimated fair value	$	595,075	$	531,461
Carrying value		553,266		489,388

NOTE 5 - BUSINESS SEGMENTS

North America and Europe comprise the Company’s reportable segments. Segment operating results for the three and six months ended June 30, 2025 and 2024 are as follows:


	Three Months Ended
	June 30, 2025									June 30, 2024
	North America			Europe			Total			North America		Europe			Total
Net Sales	$	93,804		$	114,093		$	207,897		$	203,203	$	115,764		$	318,967

Less:
Aluminum and other material costs		51,816			43,971			95,787			107,124		47,421			154,545
Manufacturing costs		55,351			59,739			115,090			61,603		49,476			111,079
Manufacturing depreciation and amortization		8,288			10,180			18,468			10,232		11,491			21,723
Selling, general, and administrative expenses		18,847			6,014			24,861			11,049		10,327			21,376
Impairment of long-lived assets		66,906			—			66,906			—		—			—
Segment expenses		201,208			119,904			321,112			190,008		118,715			308,723
Income (loss) from operations	$	(107,404	)	$	(5,811	)	$	(113,215	)	$	13,195	$	(2,951	)	$	10,244

Supplemental Segment Financial Information:
Depreciation and amortization	$	8,392		$	10,230		$	18,622		$	10,334	$	11,554		$	21,888
Capital expenditures		2,070			3,877			5,947			4,013		4,213			8,226


	Six Months Ended
	June 30, 2025						June 30, 2024
	North America		Europe		Total		North America		Europe		Total
Net Sales	$	297,512	$	231,987	$	529,499	$	396,711	$	238,532	$	635,243

Less:
Aluminum and other material costs		166,746		100,410		267,156		207,012		101,924		308,936
Manufacturing costs		121,962		107,861		229,823		127,069		102,987		230,056
Manufacturing depreciation and amortization		16,844		21,024		37,868		20,460		23,025		43,485
Selling, general, and administrative expenses		27,523		12,816		40,339

SUPERIOR INDUSTRIES INTERNATIONAL INC 10-Q