UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 20202021

Commission file number: 1-6615

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

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.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes  ☒    No  ☐

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

The aggregate market value of the registrant’s $0.01 par value common equity held by non-affiliates as of the last business day of the registrant’s most recently completed second quarter was $43,506,281,$225,046,322, based on a closing price of $1.70.$8.62. On February 26, 2021,24, 2022, there were 25,591,93026,163,077 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s 20212022 Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days after the close of the registrant’s fiscal year, are incorporated by reference into Part III of this Form 10-K.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. We have included or incorporated by reference in this Annual Report on Form 10-K (including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) and from time to time our management may make statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon management’s current expectations, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, the impact of COVID-19 and supply chain disruption on our future business, results, operation and prospects, anticipated future performance (including sales and earnings), expected growth, future business plans and costs and potential liability for environmental-related matters, and the impact of COVID-19 on our future business, results, operations and prospects.matters. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use ofusing words and phrases such as “expects,” “anticipates,” “believes,” “will,”“expects”, “anticipates”, “believes”, “will”, “will likely result,”result”, “will continue,”continue”, “plans to,” “could,” “continue,” “approximately,” “forecast,” “estimates,” “pursue”to”, “could”, “continue”, “estimates” and similar expressions. These statements include our belief regarding general automotive industry and market conditions and growth rates, as well as general domestic and international economic conditions.

Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company, which could cause actual results to differ materially from such statements and from the Company’s historical results and experience. These risks, uncertainties and other factors include, but are not limited to, those described in Part I, Item 1A, “Risk Factors” and Part II - Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K and elsewhere in thethis Annual Report and those described from time to time in our other reports filed with the Securities and Exchange Commission.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the risks described herein should not be considered to be a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ITEM 1 - BUSINESS

Description of Business and Industry

Superior Industries International, Inc.’s (referred to herein as the “Company,” “Superior,”“Company”, “Superior”, or “we” and “our”) principal business is the design and manufacture of aluminum wheels for sale to original equipment manufacturers (OEMs)(“OEMs”) in North America and Europe and to the aftermarket in Europe. We employ approximately 7,6007,800 full-time employees, operating in eight manufacturing facilities in North America and Europe with a combined annual manufacturing capacity of approximately 20 million wheels.Europe. We are one of the largest aluminum wheel suppliers to global OEMs and we believe we are the #1 European aluminum wheel aftermarket manufacturer and supplier. Our OEM aluminum wheels accounted for approximately 91 percent of our sales in 20202021 and are primarily sold for factory installation on vehicle models manufactured by BMW (including Mini), Daimler Group (Mercedes-Benz, AMG, Smart), FCA, Ford, GM, Honda, Jaguar-Land Rover, Lucid Motors, Mazda, Nissan, PSA, Renault, Stellantis, Subaru, Suzuki, Toyota, VW Group (Volkswagen, Audi, SEAT, Skoda, Porsche, Bentley) and Volvo. We also sell aluminum wheels to the European aftermarket under the brands ATS, RIAL, ALUTEC and ANZIO. North America and Europe represent the principal markets for our products, but we have a diversified global presence and diversified customer base consisting of North American, European and Asian OEMs. We continue to deliver on our strategic plan to be one of the leading light vehicle aluminum wheel suppliers globally, delivering innovative wheel solutions to our customers.

Demand for our products is mainly driven by light-vehicle production levels in North America and Europe as well as production levels at our key customers and customer take rates on specific vehicle platforms that we serve and wheel programsSKUs that we serve.produce. North American light-vehicle production in 20202021 was 13.0 million vehicles, as compared to 13.0 million and 16.3 million vehicles in 2019.2020 and 2019, respectively. In Western and Central Europe, light vehiclelight-vehicle production in 20202021 was 13.612.7 million vehicles, as compared to 13.6 million and 17.8 million vehicles in 2019. Industry2020 and 2019, respectively. While industry production volumes in 2020 were adversely impacted by the COVID-19 pandemic. pandemic, 2021 volumes were constrained by the semiconductor chip shortage which emerged in the first two quarters of 2021 and worsened in the last half of the year.

The majority of our customers’ wheel programs are awarded two to four years before actual production is scheduled to begin. Our purchase orders with OEMs are typically specific to a particular vehicle model. Each year, the automotive manufacturers introduce new models, update existing models and discontinue certain models. In this process, we may be selected as the supplier on a new model, we may continue as the supplier on an updated model or we may lose the supply contract for a new or updated model to a competitor.

Customer Dependence

We have proven our ability to be a consistent producer of high-quality aluminum wheels with the capability to meet our customers’ requirements regarding delivery, overall customer service, price, quality, and technology. We continually strive to enhance our relationships with our customers through continuous improvement programs, not only through our manufacturing operations but in the engineering, design, development and quality areas as well.

GM, VW Group and Ford were our only customers individually accounting for 10 percent or more of our consolidated sales in 2021 and 2020. Our sales to these customers in 20202021 and 20192020 were as follows:

The loss of all or a substantial portion of our sales to these customers would have a significant adverse effect on our financial results. Refer to Item 1A, “Risk Factors,” of this Annual Report.

Raw Materials

The raw materials used in manufacturing our products are readily available and are obtained through numerous suppliers with whom we have established trade relationships. Aluminum accounted for the vast majority of our total raw material requirements during 2020.2021. Our aluminum requirements are met through purchase orders with major global producers. During 2020,2021, we successfully secured aluminum commitments from our primary suppliers sufficient to meet our production requirements, and we anticipate being able to source aluminum requirements to meet our expected level of production in 2021.2022.

We establish price adjustment clauses with our OEM customers to minimize the aluminum price risk. In the aftermarket business, we use derivatives to hedge price variability on our aluminum purchases.

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When market conditions warrant, we may also enter into purchase commitments to secure the supply of certain other commodities used in the manufacture of our products, such as natural gas, electricity and other raw materials.

We establish price adjustment clauses with our OEM customers to minimize the aluminum price risk. In the aftermarket business, we use derivatives to hedge price variability on our aluminum purchases.

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Foreign Operations

We manufacture the majorityall of our North American products in Mexico for sale in the United States, Canada and Mexico. Net sales of wheels of our Mexico operations in 2020 totaled $522.2 million and represented 94.9 percent of our total net sales in North America as compared to $599.8 million and 85.2 percent in 2019. Net property, plant and equipment used in our operations in Mexico totaled $212.8 million at December 31, 2020 and $223.2 million at December 31, 2019. The overall cost for us to manufacture wheels in Mexico is currently lower than in the United States, due to lower labor costs as a result of lower prevailing wage rates.

Similarly, we manufacture the majority of our products for the European market in Poland, for sale throughout Europe. For the year ended December 31, 2020, net sales of wheels manufactured in Poland were $338.0 million and 61.4 percent of total net European sales, as compared to $422.4 million and 63.2 percent in 2019. Net property, plant and equipment used in our operations in Poland totaled $219.8 million at December 31, 2020 and $217.9 million at December 31, 2019. Similar to our Mexican operations, the overall cost to manufacture wheels in Poland is substantially lower than in both the United States and Germany at the present time due principally to lower labor costs.

We may enter into forward contracts, option contracts, swaps, collars or other derivative instruments to hedge the effect of foreign currency fluctuations on expected future cash flows and on certain existing assets and liabilities. In such cases, subsidiaries, whose functional currency is the U.S. dollar or the Euro, may hedge a portion of their forecasted foreign currency costs denominated in the Mexican Peso and Polish Zloty, respectively, in order to reduce the effect of fluctuating foreign currency exchange rates on our margins.

Competition

Competition in the market for aluminum wheels is based primarily on delivery, overall customer service, price, quality and technology. We currently supply 16.517.8 percent and 13.0 percent of the aluminum wheels installed on passenger cars and light-duty trucks in North America and Europe, respectively.

Competition is global in nature with a significant volume of exports from Asia into Europe and North America. There are several competitors with facilities in North America but we estimate that we have more than twice the North American production capacity of any competitor. Some of the key competitors in North America include Central Motor Wheel of America, CITIC Dicastal Co., Ltd., Prime Wheel Corporation, Enkei, Hands Corporation, and Ronal. Key European competitors include Ronal, Borbet, Maxion and CMS. We believe we are the leading manufacturer of alloy wheels in the European aftermarket, where the competition is highly fragmented. Key competitors include Alcar, Brock, Borbet, ATU and Mak. Refer to Item 1A, “Risk Factors,” of this Annual Report.

Steel and other types of wheels also compete with our products. According to Ward’s Automotive Group, the aluminum wheel penetration rate on passenger cars and light-duty trucks in North America was 89.6 percent for 2020 and 88.0 percent for the 2019 model year. Although similar industry data is not available for Europe, we estimate aluminum wheel penetration continues to marginally increase year-over-year with further opportunity to increase.Several factors can affect this rate including price, fuel economy requirements and styling preferences. Although aluminum wheels currently cost more than steel, aluminum is a lighter material than steel, which is desirable for both fuel and carbon dioxide efficiency and generally viewed as aesthetically superior to steel and, thus, more desirable to the OEMs and their customers.

Research and Development

Our policy is to continuously review, improve and develop our engineering capabilities to satisfy our customer requirements in the most efficient and cost-effective manner available. We strive 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. Our engineering centercenters located in Fayetteville, Arkansas supportsand Ludensheid, Germany, support our research and development in North America.America and Europe for our global OEM customers. We also have a technical sales function at our corporate headquarters in Southfield, Michigan that maintains a complement of engineering staff located near some of our largest customers’ headquarters and engineering and purchasing offices. Research and development of our OEM andEuropean aftermarket wheels is performed in GermanyBad Durkheim, Germany.

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, as amended. We believe that we are in compliance with all federal standards currently applicable to OEM suppliers and to automotive manufacturers.

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Environmental Compliance

Our manufacturing facilities, like most other manufacturing companies, 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. We believe our facilities are in material compliance with all presently applicable standards. The cost of environmental compliance was approximately $3.0 million in 2021 and $1.3 million in 2020 and $0.7 million in 2019.2020. We expect that future environmental compliance expenditures will approximate these levels and will not have a material effect on our consolidated financial position or results of operations. However, climate change legislation or regulations restricting emission of “greenhouse gases” could result in increased operating costs and reduced demand for the vehicles that use our products. Refer to Item 1A, “Risk Factors - We are subject to various environmental laws” of this Annual Report.

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Sustainability

Superior conducted an assessment in 2021 to identify the sustainability interests of our stakeholders and inform our sustainability strategy. Superior is committed to reducing natural gas, electricity, and water consumption, solid waste and air emissions at all of our facilities globally. All Superior manufacturing plants have implemented Environmental Management Systems that are ISO14001 certified and are subject to annual audits by an independent third party. 

In 2021, we assessed the carbon footprint for each of our operations globally in connection with our Communication on Progress report to the UN Global Compact published in June 2021. These assessments are helping us identify potential opportunities to:

Superior has established a goal to be carbon neutral by 2039 and we anticipate that by 2025 we will have reduced our emissions 40% from the level generated in 2020.   

Superior also reported through Carbon Disclosure Project’s (“CDP”) climate change and water security sections in 2021. Furthermore, our research and development team is developing automotive light weighting solutions, such as our patented Alulite™ technology, and aerodynamic solutions that will assist in reducing our customers’ carbon footprint. We continue to collaborate with our customers and suppliers regarding sustainability practices throughout their supply chains.

Employees

As of December 31, 2020,2021, we employed approximately 7,6007,800 full-time employees, and 1,400 contract employees, with 4,2004,500 employees in North America and 3,4003,300 employees in Europe.

Segment Information

We have aligned our executive management structure, organization and operations to focus on our performance in our North American and European regions. Financial information about our reporting segments is contained in Note 5, “Business Segments” in the Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” of this Annual Report.

History

We were initially incorporated in Delaware in 1969. Our entry into the OEM aluminum wheel business in 1973 resulted from our successful development of manufacturing technology, quality control and quality assurance techniques that enabled us to satisfy the quality and volume requirements of the OEM market for aluminum wheels. The first aluminum wheel for a domestic OEM customer was a Mustang wheel for Ford. On May 30, 2017, we acquired a majority interest in UNIWHEELS, AG, which was a European supplier of OEM and aftermarket aluminum wheels. UNIWHEELS, AG was renamed in 2018 to Superior Industries Europe AG. Our stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “SUP.”

Available Information

Our Annual Report on Form 10-K, quarterly reports on Form 10-Q and any amendments thereto are available, without charge, on or through our website, www.supind.com, under “Investor Relations,” as soon as reasonably practicable after they are filed electronically with the Securities and Exchange Commission (“SEC”). Also included on our website, www.supind.com, under “Investor Relations,” is our Code of Conduct, which, among others, applies to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. Copies of all SEC filings and our Code of Conduct are also available, without charge, upon request from Superior Industries International, Inc., Shareholder Relations, 26600 Telegraph Road, Suite 400, Southfield, Michigan 48033.

The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information related to issuers that file electronically with the SEC. The content on any website referred to in this Annual Report on Form 10-K is not incorporated by reference in this Annual Report on Form 10-K.

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ITEM 1A. Risk Factors

The following discussion of risk factors contains “forward-looking” statements, which may be important to understanding any statement in this Annual Report or elsewhere. The following information should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)” and Item 8, “Financial Statements and Supplementary Data” of this Annual Report.

Our business routinely encounters and addresses risks and uncertainties. Our business, results of operations, financial condition and cash flows could be materially adversely affected by the factors described below. Discussion about the important operational risks that our business encounters can also be found in the MD&A section and in the business description in Item 1, “Business” of this Annual Report. Below, we have described our present view of the most significant risks and uncertainties we face. Additional risks and uncertainties not presently known to us, or that we currently do not consider significant, could also potentially impair our business, results of operations, financial condition and cash flows. Our reactions to these risks and uncertainties as well as our competitors’ and customers’ reactions will affect our future operating results.

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Industry and Economic Risks

The COVID-19 pandemic has disrupted, and may continue to disrupt our business, which we expect willmay have a material adverse impact on our business, results of operations, financial condition and cash flows.

To date, the COVID-19 pandemic (including associated variants) has caused a widespread health crisis, resultingand resulted in an economic downturn and government imposed measures to reduce the spread of COVID-19. In Europe and North America (our primary markets), federal, state and local governments have, at varying times, either recommended or mandated actions to slow the transmission of COVID-19. Most U.S. states and most countries have been implementingimplemented shelter-in-place orders, quarantines, significant restrictions on travel, as well as work restrictions that prohibitprohibited non-essential employees from going to work. While these governmental actions have generally eased, it is possible that more stringent restrictions are imposed in the future. The impact of COVID-19 and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets and is havinghas had a widespread adverse effect on the automotive industry. In addition to public health considerations, the COVID-19 pandemic has also contributed to supply chain disruptions across a number of industries. The automotive industry has been, and will likely continue to be, impacted by the supply chain disruptions, which emerged in late 2020 as OEMs began to scale production following the industry shutdown and became a more significant challenge in 2021.

Specific risks to our Company associated with the COVID-19 pandemic include the following:

The ultimate impact that COVID-19 and associated variants will have on our business, results of operations, financial condition and cash flows will depend on a number of evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; the impact of recent resurgences of COVID-19 cases in North America and Europe, the efficacy and distribution of COVID-19 vaccines, governmental, OEMs’, suppliers’, customers’ and individuals’ actions that have been and continue to be taken in

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response to the pandemic and the impact of the pandemic on economic activity and actions taken in response to such impact by the OEMs’ suppliers and customers.

The automotive industry is cyclical and volatility in the automotive industry could adversely affect our financial performance.

Predominantly, our sales are made to the European and U.S. automotive markets. Therefore, our financial performance depends largely on conditions in the European and U.S. automotive industry, which in turn can be affected significantly by broad economic and financial market conditions. Consumer demand for automobiles is subject to considerable volatility as a result of consumer confidence in general economic conditions, levels of employment, prevailing wages, fuel prices and the availability and cost of consumer credit, as well as changing consumer preferences. Demand for aluminum wheels can be further affected by other factors, including pricing and performance comparisons to competitive materials such as steel.products. Finally, the demand for our products is influenced by shifts of market share between vehicle manufacturers and the market penetration of the specific vehicle models being sold by our customers. Decreases in demand for automobiles in Europe and the United States could adversely affect the valuation of our productive assets, results of operations, financial condition and cash flows.

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We operate in a highly competitive industry and efforts by our competitors to gain market share could adversely affect our financial performance.  

The global automotive component supply industry is highly competitive. Competition is based on a number of factors, including delivery, overall customer service, price, quality, technology and available capacity to meet customer demands. Some of our competitors are companies, or divisions or subsidiaries of companies, which are larger and have greater financial and other resources than we do. We cannot ensure that our products will be able to compete successfully with the products of these competitors. In particular, our ability to maintain or increase manufacturing capacity typically requires significant investments in facilities, equipment and personnel. Additionally, as a result of evolving customer requirements, we may incur labor costs at premium rates, experience increased maintenance expenses or have to replace our machinery and equipment on an accelerated basis. Furthermore, the nature of the markets in which we compete has attracted new entrants, particularly from low-cost countries. As a result, our sales levels and margins continue to be adversely affected by pricing pressures reflective of significant competition from producers located in low-cost foreign markets, such as China. Such competition with lower cost structures poses a significant threat to our ability to compete internationally and domestically.globally. These factors have led to our customers awarding business to foreign competitors in the past, and they may continue to do so in the future. In addition, any of our competitors may foresee the course of market developmentdevelopments more accurately, develop products that are superior to our products, have the ability to produce similar products at a lower cost or adapt more quickly to new technologies or evolving customer requirements. Consequently, our products may not be able to compete successfully with competitors’ products.

Risks Relating to our Business, Strategy and Operations

A limited number of customers represent a large percentage of our sales. The loss of a significant customer or decrease in demand could adversely affect our operating results.

GM, VW Group, Ford, Daimler Group, Volvo, BMW and Toyota, together, represented 8281 percent in 2020 and 7982 percent of our sales in 2019. Increasingly global2021 and 2020, respectively. Global procurement practices, the pace of new vehicle introduction andincluding demand for price reductions may make it more difficult to maintain long-term supply arrangements with our customers, and there are no guarantees that we will be able to negotiate supply arrangements with our customers on terms acceptable to us in the future. The contracts we have entered into with most of our customers provide that we will manufacture wheels for a particular vehicle model, rather than manufacture a specific quantity of products. Such contracts range from one year to the life of the model (usually three to five years), typically are non-exclusive and do not require the purchase by the customer of any minimum number of wheels from us. Therefore, a significant decrease in consumer demand for certain key models or group of related models sold by any of our major customers, or a decision by a manufacturer not to purchase from us, or to discontinue purchasing from us, for a particular model or group of models, could adversely affect our results of operations, financial condition and cash flows.

We may be unable to successfully launch new products and/or achieve technological advances which could adversely affect our ability to compete resulting in an adverse impact on our financial condition, operating results and cash flows.

In order to compete effectively in the global automotive component supply industry, we must be able to launch new products and adopt technology to meet our customers’ demands in a timely manner. However, we cannot ensure that we will be able to install and certify the equipment needed for new product programs in time for the start of production, or that the transitioning of our manufacturing facilities and resources under new product programs will not impact production rates or other operational efficiency measures at our facilities. In addition, we cannot ensure that our customers will execute the launch of their new product programs on schedule. We are also subject to the risks generally associated with new product introductions and applications, including lack of market acceptance, delays in product development and failure of products to operate properly. The global automotive industry is

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experiencing a period of significant technological change. As a result, the success of our business requires us to develop and/or incorporate leading technologies. Such technologies aremay be subject to rapid obsolescence. Our inability to maintain access to these technologies (either through development or licensing) may adversely affect our ability to compete. If we are unable to differentiate our products, maintain a low-cost footprint or compete effectively with technology-focused new market entrants, we may lose market share or be forced to reduce prices, thereby lowering our margins. Any such occurrences could adversely affect our financial condition, operating results and cash flows.

Increases in the costs and restrictions on availability of raw materials could adversely affect our operating margins and cash flow.

Generally, we obtain our raw materials, supplies and energy requirements from various sources. Although we currently maintain alternative sources, our business is subject to the risk of price increases and periodic delays in delivery. Fluctuations in the prices of raw materials may be driven by the supply and demand for that commodity or governmental regulation, including trade laws and tariffs. In addition, if any of our suppliers seek bankruptcy relief or otherwise cannot continue their business as anticipated, the availability or price of raw materials could be adversely affected.

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Although we are able to periodicallyour OEM contracts provide for the pass certainthrough of fluctuating aluminum cost increases on to our customers,costs, we may not be able to pass along alldo so in the future. Moreover, we establish our aftermarket selling prices six months in advance of the spring and winter sales periods. The aluminum we use to manufacture wheels contains alloying materials, including silicon. The cost of alloying materials is therefore a component of the overall cost of a wheel. The price of the alloys we purchase is based on certain published market indices; however, most of our OEM customer agreements do not provide price adjustments for changes in aluminum costs (e.g. for aftermarket),market prices of alloying materials. Increases or there may bedecreases in the market prices of alloying materials could have a delay in passing the aluminum costs ontomaterial effect on our customers. Ouroperating margins and cash flows. Furthermore, our customers are not obligated to accept energy or other supply cost increases that we may attempt to pass along to them. ThisThe inability to pass on these cost increases on to our customers could adversely affect our operating margins and cash flows.

In 2021, aluminum prices increased by approximately 45 percent and, while we were able to protect the margins of our OEM business by passing these costs on to our customers, rising aluminum prices have increased our investment in working capital and therefore reduced our operating cash flow. In addition, since we are not able to pass aluminum price increases on to our aftermarket customers, the margins of our aftermarket business were adversely affected in 2021. This and other price increases, such as rising silicon, natural gas and electricity costs if unabated could continue to adversely affect our margins in 2022.  

Aluminum and alloy pricing, and the timing of our receipt of payment from customers for aluminum price fluctuations, may have a material effect on our operating margins and cash flows.

The cost of aluminum is a significant component in the overall cost of our wheels and in our selling prices to customers. CustomerOur OEM customer prices are adjusted for fluctuations in aluminum prices based on changes in certain published market indices, but the timing of price adjustments is based on specific customer agreements and can vary from monthly to quarterly. As a result, the timing of aluminum price adjustments with customers flowing throughin sales rarely will match the timing of such changes in cost of sales and can result in fluctuations to our gross profit. This is especially true during periods of frequent and dramatic increases or decreases in the market price of aluminum.

The aluminum we use to manufacture wheels also contains additional alloy materials, including silicon. The cost of alloying materials is also a component of the overall cost of a wheel. The price of the alloys we purchase is also based on certain published market indices; however, most of our customer agreements do not provide price adjustments for changes in market prices of alloying materials. Increases or decreases in the market prices of these alloying materials could have a material effect on our operating margins and cash flows.

We experience continual pressure from our customers to reduce costs and, if we are unable to generate sufficient cost reductions, our revenues, operating margins and cash flows could be adversely affected.

The global vehicle market is highly competitive, at the OEM level, which drivesresulting in continual cost-cutting initiatives by our customers. Customer concentration, relative supplier fragmentation and product commoditization have translated into continual pressure from OEMs to reduce the price of our products. It is possible that pricing pressures beyond our expectations could intensify as OEMs pursue restructuring andor other cost-cutting initiatives. If we are unable to generate sufficient production cost savings in the future to offset such price reductions, our operating margins and cash flows could be adversely affected. In addition, changes in OEMs’ purchasing policies or payment practices could have an adverse effect on our business. Our OEM customers typically attempt to qualify more than one supplier for the vehicle programs we participate on and for programs we may bid on in the future. As such,Accordingly, our OEM customers aremay be able to negotiate favorable pricing or may decrease wheel orders from us. Such actions may result in decreased sales volumes and unit price reductions for the Company, resulting in lower revenues, operating margins and cash flows.

We may be unable to successfully implement cost-saving measures or achieve expected benefits under our plans to improve operations which could negatively impact our financial position, results of operations and cash flow.

As part of our ongoing focus to provide high quality products at reasonable prices, we continually analyze our business to further improve our operations and identify cost-cutting measures. We may be unable to successfully identify or implement plans targeting these initiatives or fail to realize the benefits of the plans we have already implemented, as a result of operational difficulties, a weakening of the economy or other factors. Cost reductions may not fully offset decreases in the prices of our products due to the time

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required to develop and implement cost reduction initiatives. Additional factors such as inconsistent customer ordering patterns, increasing product complexity and heightened quality standards are makingmay increase our costs and may make it increasingly more difficult to reduce our costs. It is possible that the costs we incur to implement improvement strategies may negatively impact our financial position, results of operations and cash flow.

We may be unable to attract and retain key personnel, including our senior management team, which may adversely affect our ability to conduct our business.

Our success depends, in part, on our ability to attract, hire, train and retain qualified managerial, operational, engineering, sales and marketing personnel. We face significant competition for these types of employees in our industry. We may be unsuccessful in attracting and retaining the personnel we require to conduct our operations successfully. In addition, key personnel may leave us and compete against us. Our success also depends, to a significant extent, on the continued service of our senior management team. During the last several years we have experienced significant turnover in our senior management members, additional losses of members of our senior management team or other experienced senior employees could impair our ability to execute our business plans and strategic initiatives, cause us to lose customers and experience lower revenues, or lead to employee morale problems and/or the loss of other key employees.

Purchase of additional shares of Superior Industries Europe AG (formerly UNIWHEELS, AG) may require a higher purchase price.

Superior executed a Domination and Profit Loss Transfer Agreement, “DPLTA”, which became effective in January 2018. According to the terms of the DPLTA, we offered to purchase any outstanding shares of UNIWHEELS, AG for cash consideration of €62.18 per share. The cash consideration paid to shareholders for shares tendered under the DPTLA may be subject to change based on appraisal proceedings that the minority shareholders of UNIWHEELS, AG have initiated.

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Legal, Compliance and Regulatory Risks

We are from time to time subject to litigation, which could adversely affect our results of operations, financial condition or cash flows.

The nature of our business exposes us to litigation in the ordinary course of our business. We are exposed to potential product liability and warranty risks that are inherent in the design, manufacture and sale of automotive products, the failure of which could result in property damage, personal injury or death. Accordingly, individual or class action suits alleging product liability or warranty claims could result. Although we currently maintain what we believe to be suitable and adequate product liability insurance in excess of our self-insured amounts, we cannot guarantee that we will be able to maintain such insurance on acceptable terms or that such insurance will provide adequate protection against future liabilities. In addition, if any of our products prove to be defective, we may be required to participate in a recall. A successful claim brought against us in excess of available insurance coverage, if any, or a requirement to participate in any product recall, could have a material adverse effect on our results of operations, financial condition or cash flows.

Our business requires extensive product development activities to launch new products. Accordingly, there is a risk that wheels under development may not be ready by the start of production or may fail to meet the customer’s specifications. In any such case, warranty or compensation claims might be raised, or litigation might be commenced, against the Company.

Moreover, there are risks related to civil liability under our customer supply contracts (civil liability clauses in contracts with customers, contractual risks related to civil liability for causing delay in production launch, etc.). If we fail to ensure production launch as and when required by the customer, thus jeopardizing production processes at the customer’s facilities, this could lead to increased costs, giving rise to recourse claims against, or causing loss of orders by the Company. This could also have an adverse effect on our results of operations, financial condition or cash flows.

International trade agreements and our international operations make us vulnerable to risks associated with doing business in foreign countries that can affect our business, financial condition, results of operations and cash flows.

We predominantly manufacture our products in Mexico, Germany and Poland and we sell our products internationally. Accordingly, unfavorable changes in foreign cost structures, trade protection laws, tariffs on aluminum or wheels, regulations and policies affecting trade and investments and social, political, labor or economic conditions in a specific country or region, among other factors, could have a negative effect on our business and results of operations. Legal and regulatory requirements differ among jurisdictions worldwide. Violations of these laws and regulations could result in fines, criminal sanctions, prohibitions on the conduct of our business and damage to our reputation. Although we have policies, controls and procedures designed to ensure compliance with these laws, our employees, contractors, or agents may violate our policies.

It remains unclear what the U.S. administration or foreign governments, including China, will or will not do with respect to tariffs or other international trade agreements and policies. In 2018, 25% tariffs (the “301 tariffs”) were imposed by the United States Trade

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Representative on various products imported from China, including aluminum wheels, based on Section 301 of the Trade Act of 1974. While the 301 tariffs are currently still in effect, there is a risk they could be removed or not extended. Removal of these tariffs may increase competitive pressure from Chinese producers who have cost advantages. This may have an adverse effect on our business, financial condition, results of operations and cash flows. The free trade agreement between the United States of America, the United Mexican States and Canada (the “USMCA”) was approved, ratified and became effectiveentered into force on July 1, 2020. The USMCA2020 and includes several provisions relating to automobile manufacturing. One provision requires that automobiles must have 75 percent of their components manufactured in Mexico, the United States, or Canada by 2023 to qualify for zero tariffs (up from 62.5 percent under NAFTA). Another provision requires vehicle producers to certify that 40 percent to 45 percent of automobile parts are made by workers who earn $16 per hour by 2023.  Although this requirement applies to vehicle producers, our workers in Mexico currently earn less than $16 per hour. As a result, we will be unable to assist the vehicle producers with meeting this requirement. Mexico has also agreed to passpassed new labor laws that are intended to make it easier for Mexican workers to unionize. As a result, the USMCA may increase our cost of manufacturing in Mexico which could have an adverse effect on our business, financial condition, results of operations and cash flows. The USMCA must be reviewed by the member countries every six years and sunsets inafter sixteen years.

A trade war, other governmental action related to tariffs or international trade agreements, changes in United States social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently manufacture and sell products, and any resulting negative sentiments towards the United States, these territories and countries as a result of such changes, likely would have an adverse effect on our business, financial condition, results of operations and cash flows.

The cost of manufacturing our products in Mexico, Germany and Poland may be affected by tariffs imposed by any of these countries or the United States, trade protection laws, policies and other regulations affecting trade and investments, social, political, labor, or general economic conditions. Other factors that can affect the business and financial results of our Mexican, German and Polish operations include, but are not limited to, changes in cost structures, currency effects of the Mexican Peso, Euro and Polish Zloty, availability and competency of personnel and developments in tax regulations.

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There is a risk of discontinuation of the European Union (E.U.)(EU) anti-dumping duty from China which may increase the competitive pressure from Chinese producers, including in the aftermarket.

In 2010, the European Commission imposed provisional anti-dumping duties of 22.3 percent on imports of aluminum road wheels from China after a complaint of unfair competition from European manufacturers. The European Commission argued that the EU manufacturers had suffered a significant decrease in production and sales, and a loss of market share, as well as price depression due to cheaper imports from China. On January 23, 2017, the European Commission decided to maintain the anti-dumping duties (Commission Implementing Regulation (EU) 2017/109) for another five-year period. The anti-dumping duties protect the EU producers until January 24, 2022. After this date,In October 2021, the EU manufacturers filed a petition seeking an extension and increase of these tariffs. The EU Commission did not render a decision prior to the January 24, 2022 expiration date; therefore, the current tariffs will stay in place until the EU Commission issues its decision. If the EU Commission does not extend these tariffs, the competitive pressures from Chinese producers, which have cost advantages, may adversely affect the Company’s financial condition, results of operations and cash flows.

We are subject to various environmental laws.

We incur costs to comply with applicable environmental, health and safety laws and regulations in the ordinary course of our business. We cannot ensure that we have been or will be at all times in complete compliance with such laws and regulations. Failure to comply with such laws and regulations could result in material fines or sanctions. Additionally, changes to such laws or regulations may have a significant impact on our cash flows, financial condition and results of operations.

We are subject to various foreign, federal, state and local environmental laws, ordinances and regulations, including those governing discharges into the air and water, the storage, handling and disposal of solid and hazardous wastes, the remediation of soil and groundwater contaminated by hazardous substances or wastes and the health and safety of our employees. The nature of our current and former operations and the history of industrial uses at some of our facilities expose us to the risk of liabilities or claims with respect to environmental and worker health and safety matters which could have a material adverse effect on our financial condition.

Further, changes in legislation or regulation imposing reporting obligations on, or limiting emissions of greenhouse gases from, or otherwise impacting or limiting our equipment, operations, or the vehicles that use our products could adversely affect demand for those vehicles or require us to incur costs to become compliant with such regulations.

Capital Structure Risks

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We do not expect to generate sufficient cash to repay all of our indebtedness (including the Term Loan Facility and Notes) by their respective maturity dates and we may be forced to take other actions to satisfy these obligations, which may not be successful. In addition, we may be unable to repay the redeemable preferred stock in the event the holder exercises its redemption rights.

The Company’s capital structure is heavily leveraged as a result of debt incurred in connection with the 2017 acquisition of our European business. At December 31, 2020,2021, our capital structure consisted of:

The Company also had available unused commitments under its Revolving Credit Facility and European Senior Secured Credit Facility (“EUR SSCF”) of $228.5$195.2 million at December 31, 2020.2021.

Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic, industry and competitive conditions and to certain other factors beyond our control. At the present time, we do not expect to generate sufficient cash to repay all principal due under our indebtedness, in full by the respective maturity dates, which will likely require us to refinance a portion or all of our outstanding debt. Our ability to restructure or refinance our debt will depend on the condition of the capital and credit markets and our financial condition at such time. We might not be able to refinance the debt on satisfactory terms. Any refinancing of our debt could be at higher interest rates and associated transactions costs and may require us to comply with more onerous covenants, which could further restrict our business operations and limit our financial flexibility. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit ratings, which could harm our ability to incur additional indebtedness or issue equity, or to refinance all or portions of these obligations.  

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In the absence of sufficient cash flows, refinancing or adequate funds available under credit facilities, we could face substantial liquidity constraints and might be required to reduce or delay capital expenditures, seek additional capital, sell material assets or operations to attempt to meet our debt service and other obligations. The credit agreements governing the USD SSCF and EUR SSCF, taken together the Global Senior Secured Credit Facilities (“GSSCF”), and the Indenture for the Notes restrict our ability to conduct asset sales and/or use the proceeds from asset sales. We may not be able to consummate these asset sales to raise capital or sell assets at prices and on terms that we believe are fair, and any proceeds that we do receive may not be adequate to meet any debt service obligations then due. If we cannot meet our debt service obligations, the holders of our debt may accelerate our debt and, to the extent such debt is secured, foreclose on our assets. In such an event, we may not have sufficient assets to repay all of our debt.

Under the USD SSCF and EUR SSCF, we had available unused commitments of $155.2$127.7 million and $73.3$67.5 million (€59.6 million), respectively, as of December 31, 2020,2021, which arecould become critical to the Company’s ability to pay its operating obligations in a timely manner. The credit linescommitment under the USD SSCF and EUR SSFC will mature in two tranches, $25.0 million on May 23, 2022 and the remaining $107.5 million on October 31, 2023, and the EUR SSCF will mature on May 22, 2022, respectively,2023, all of which isare prior to the maturities of our other outstanding debt.Term Loan Facility and Notes, as well as the date as of which our preferred shareholder could unconditionally redeem their shares. We might not be able to extend these credit lines beyond the current due dates or may only be able to extend them for smaller amounts. This in turn might reduce our ability to refinance our other outstanding debt or other obligations in future years. It might also cause the rating agencies to downgrade our credit ratings. Additionally, it might require us to hold more cash in our bank accounts to ensure our ability to pay our obligations in a timely manner, which in turn could reduce our ability to pay down debt or other obligations.

Under the Certificate of Designations for our redeemable preferred stock, the holders have redemption rights that allow them to force us to redeem the preferred stock either as a result of the occurrence of an early redemption event (a change in control, recapitalization, merger, sale of substantially all of the Company’s assets, liquidation or delisting of the Company’s common stock from the NYSE) or unconditionally on or after September 14, 2025.  The redemption obligation of our redeemable preferred stock consists of a redemption price equal to the greater of 2.02 times the then current Stated Value (defined in the Certificate of Designations as $150.0 million, plus any accrued and unpaid dividends or dividends paid-in-kind), currently $300.0 million, or the product of the number of common shares into which the redeemable preferred stock could be converted (5.3 million shares currently) and the then current market price of our common stock. Under Delaware law, any redemption payment would be limited to the “surplus” that our Board

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determines is available to fund a full or partial redemption without rendering us insolvent. The shares of preferred stock that have not been redeemed would continue to receive a dividend of 9 percent per annum on the then current Stated Value, as defined in the Certificate of Designations, until such shares of preferred stock are redeemed. The Board would have to evaluate on an ongoing basis the ability of the Company to make furtherany remaining payments until the full redemption amount has been paid. A redemption payment, if required, for some or all of our outstanding shares of preferred stock would negatively impact our liquidity and could adversely affect our business, results of operations and financial condition.

Our substantial indebtedness and the corresponding interest expense could adversely affect our financial condition

We have a significant amount of indebtedness. As of December 31, 2020,2021, our total debt was $643.2$616.2 million ($631.6608.4 million net of unamortized debt issuance costs of $11.6$7.8 million). Additionally, we had availability of $155.2$127.7 million under the USD SSCF, as well as $73.3$67.5 million (€59.6 million) under the EUR SSCF at December 31, 2020.2021.

A significant portion of our cash flow from operations will be used to pay our interest expense and will not be available for other business purposes.  We cannot be certain that our business will generate sufficient cash flow or that we will be able to enter into future financings that will provide sufficient proceeds to meet or pay the interest on our debt.

Subject to the limits contained in the credit agreements governing our GSSCF and the indenture governing the Notes (with outstanding principal balance of $266.9$245.8 million (€217.0 million) at December 31, 2020)2021) and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify.

In addition, the indenture covering the Notes (the “Indenture”) and the credit agreements governing the GSSCF and our other debt instruments contain restrictive covenants that among other things, could limit our ability to incur liens, engage in mergers and acquisitions, sell, transfer or otherwise dispose of assets, make investments or acquisitions, redeem our capital stock or pay dividends. In addition, the GSSCF agreement requires us to maintain appropriate insurance coverages, including insurance with respect to assets which secure the underlying debt obligations. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of the maturity of all of our debt.

A downgrade of our credit rating or a decrease of the prices of the Company’s common stock, the USD SSCF or the Notes could adversely impact our financial performance.

The Company, its USD SSCF, and the Notes, are rated by Standard and Poor’s and Moody’s. These ratings are widely followed by investors, customers, and suppliers, and a downgrade by one or both of these rating agencies might cause: suppliers to cancel our contracts, demand price increases, or decrease payment terms; customers to reduce their business activities with us; or investors to reconsider investments in financial instruments issued by Superior, all of which might cause a decrease of the price of our common stock, our Notes, or the price of the bilaterally traded Term Loan BFacility which is a part of the USD SSCF.

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A decrease in our common stock, Notes and/or Term Loan BFacility prices, in turn, might accelerate such negative trends. A reduction in the price of the Notes and Term Loan BFacility implies an increase of the yield debt investors demand to provide us with financing, which, in turn, would make it more difficult for us to refinance our existing debt, redeemable preferred stock obligations and/or future debt or redeemable preferred stock obligations.  

The terms of the credit agreementagreements governing the GSSCF, the Indenture, and other debt instruments, as well as the documents governing other debt that we may incur in the future, may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

The Indenture, the credit agreements governing the GSSCF and our other debt instruments, and the documents governing other debt that we may incur in the future, may contain a number of covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests, including restrictions on our ability to:

In addition, the restrictive covenants in the credit agreementagreements governing the GSSCF and other debt instruments require us to maintain specified financial ratios and satisfy other financial condition tests to the extent subject to certain financial covenant conditions. Our ability to meet those financial ratios and tests can be affected by events beyond our control. We may not meet those ratios and tests.

A breach of the covenants or restrictions under the Indenture governing the Notes, under the credit agreementagreements governing the GSSCF, or under other debt instruments could result in an event of default under the applicable indebtedness. Such a default may allow the creditors under such facility to accelerate the related debt, which may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the credit agreementagreements governing our GSSCF would permit the lenders under our revolving credit facilities to terminate all commitments to extend further credit under these facilities. Furthermore, if we were unable to repay the amounts due and payable under the GSSCF or under other secured debt instruments, those lenders could proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets as collateral under the GSSCF. In the event our lenders or holders of the Notes accelerate the repayment of our borrowings, we may not have sufficient assets to repay that indebtedness or be able to borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms acceptable to us. As a result of these restrictions, we may be:

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under our GSSCF are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. As of December 31, 2020,2021, approximately $349.2 million of our debt was variable rate debt. Our anticipated annual interest expense on $349.2 million variable rate debt at the current rate of 4.1 percent would be $14.3 million. We have entered into interest rate swaps exchanging floating for fixed rate interest payments in order to reduce interest rate volatility. As of December 31, 2020,2021, we have executedhad outstanding interest rate swaps forwith an aggregate principal amount of $200.0 million, maturing $50 million September 30, 2022, and $150 million December 31, 2022. In the future, we may

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again enter into interest rate swaps to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates.

The interest rates under our USD SSCF are calculated using LIBOR. On July 27, 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021 and it is unclear whether new methodswith the exception of calculating LIBOR will be established. ICE Benchmark Administration Limited (IBA), the administrator of LIBOR rates, had requested feedback by January 25, 2021 from the U.S. dollar LIBOR panel banks concerning the possibility of maintaining U.S. dollar LIBOR rates for certain tenors (one,one, three, six and twelve-month terms)terms which will be available through June 30, 2023. IBA is currently evaluating the feedback received and, at this time, no agreement has yet been reached regarding the extension of U.S. dollar LIBOR beyond December 31, 2021. IfNo later than when LIBOR ceases to exist, a comparable or successor reference rate as approved by the Administrative Agent under the USD SSCF will apply or such other reference rate as may be agreed by the Company and the lenders under the credit agreement governing the USD SSCF. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, is planning to replace U.S. dollar LIBOR with the secure overnight financing rate (SOFR), a newly created index, calculated based on repurchase agreements backed by treasury securities. It is not possible to predict the effect of these changes, other reforms or the establishment of alternative reference rates in the United Kingdom, the United States or elsewhere. To the extent these interest rates increase, our interest expense will increase, which could adversely affect our financial condition, operating results and cash flows.

A delisting of our common stock from the NYSE could reduce the liquidity and market price of our common stock; reduce the number of investors and analysts that cover our common stock; limit our ability to issue additional shares, and damage our reputation which could have a material adverse impact on our business, results of operations and financial condition.  In addition, a delisting of our

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common stock from the NYSE could cause a redemption of some or all of our outstanding redeemable preferred stock which would negatively impact our liquidity.

We are required under the NYSE continued listing standards to maintain a market capitalization of at least $50 million, over a consecutive 30 trading-day period, or maintain stockholders’ equity of at least $50 million. As of March 31, 2020, our market capitalization was less than $50 million over a consecutive 30-day trading period and our stockholders’ equity was less than the minimum threshold. As a result, on June 5, 2020, the NYSE sent us a formal notification that we were not in compliance with the NYSE continued listing standards. In response, on July 20, 2020, we submitted a remediation plan toMay 2021, the NYSE and on September 8, 2020 we publicly announcednotified the Company that, in view of our remediation planimproved market capitalization, which had been accepted bywell in excess of the NYSE. The cure period effectively began on July 1, 2020 and will end on January 1, 2022, unlessrequired threshold for the Company earlier surpasses thepreceding six months, we regained compliance with its continued listing standards. If our market capitalization were to fall below $50 million over a consecutive thirty-day trading period, we could again fail to maintain compliance with NYSE continued listing standards which could result in delisting. As of December 31, 2021, our market capitalization threshold for a period of six consecutive months at which point the Company would be in full compliance. In the event we are unable to cure the deficiency during the 18-month period, our stock may be delisted from the NYSE.was $117.2 million.

A delisting of our common stock could have a material adverse impact on our business, results of operations and financial condition by, among other things: reducing the liquidity and market price of our common stock; reducing the number of investors, including institutional investors, willing to hold or acquire our common stock, which could negatively impact our ability to raise equity; decreasing the amount of news and analyst coverage relating to us; limiting our ability to issue additional securities, obtain additional financing or pursue strategic restructuring, refinancing or other transactions; and impacting our reputation and, as a consequence, our ability to attract new business.

In addition, the holder of our redeemable preferred stock has the right to redeem all of the outstanding shares of redeemable preferred stock if our common stock is delisted from the NYSE. If we are delisted from the NYSE and the holder exercises its rightthis were to redeem all of the outstanding shares of redeemable preferred stock,occur, we would be required to: (1) increase the then carrying value of the redeemable preferred stock to the $300 million redemption value through a corresponding charge (decrease) to our retained earnings, and (2) make a redemption payment in any amount up to $300 million if our Board determined, under Delaware law, that there was a “surplus” sufficient to fund a full or partial redemption and such payment would not render us insolvent.  The shares of preferred stock that have not been redeemed would continue to receive a dividend of 9 percent per annum on the Stated Value (defined in the Certificate of Designations as $150.0 million, plus any accrued and unpaid dividends or dividends paid-in-kind), currently $150.0 million, until such shares of preferred stock are redeemed.  A redemption payment, if required, for some or all of our outstanding shares of preferred stock would negatively impact our liquidity and could adversely affect our business, results of operations and financial condition.

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Taxation Risks

We are subject to taxation related risks in multiple jurisdictions.

We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities, which may have a significant impact on our global provision for income taxes. Tax laws are dynamic and subject to change aschange; new laws are passed and new interpretations of the law are issued or applied. Changes in tax laws or interpretations of tax laws may result in higher taxes, including making it more costly to move funds amongst different tax jurisdictions. We are also subject to ongoing tax audits. These audits and may be subject to tax litigation. Audits and litigation can involve complex issues, which may require an extended period of time to resolve and can be highly subjective. Tax authorities may disagreehave disagreed with certain tax reporting positions taken by us and, as a result, may assess additional taxes against us. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision.

In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. Many countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws, including a global minimum tax, that, if enacted, could increase our tax obligations in countries where we do business.

The impact of tax law changes and tax law interpretation could result in an overall tax rate increase toadversely affect our business.results of operations, financial condition, cash flows and liquidity,

We may fail to comply with conditions of the state tax incentive programs in Poland.

The Company carries out its business activity in Poland in the area of Tarnobrzeg Special Economic Zone “Euro-Park Wislosan,” sub-zone of Stalowa Wola, Poland which provides various state income tax incentives under certain conditions. The Company conducts its business activity pursuant to permits that stipulate production, trade, and service activities relating to products and services manufactured/provided in the zone. These activities include processing of metals and applying coating on metals, tools, other finished metal products, machines for metallurgy, other parts and accessories for motor vehicles, excluding motorcycles, as well as services relating to recovery of segregated materials and recycled materials. The permits require certain conditions to be met, which include increasing the number of employees, keeping the number of employees at such level and incurring certain levels of capital

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expenditures. In addition, particular permits indicate deadlines for completion of respective stages of investments. 

As of December 31, 2020,2021, the Company had 5 permits that are effective until 2026, and we believe all conditions of the permits have been met. As of December 31, 2020,2021, the Company utilized Polish Zloty 139.3185.7 million of the zone-related credit and the total amount of the remaining eligible credit available to the Company amounted to Polish Zloty 50.06.4 million. In the event of failure to satisfy the permit conditions, the Company must reimburse the utilized public aid received together with interest which may have a material negative impact on our assets, financial condition, results of operations or cash flows.

Tax settlements and other areas of activity subject to specific regulations (e.g. customs or FX issues) may be inspected by administrative bodies which are entitled to impose penalties and sanctions. Tax regulations in Poland are dynamic and subject to varying interpretations, both inside state authorities and between state authorities and enterprises, which can result in a lack of clarity and consistent application. As a result, tax risks in Poland are higher than in countries with a more developed tax system.  Tax settlements and other areas of activity subject to specific regulations (e.g., customs or FX issues) may be inspected by administrative bodies which are entitled to impose penalties and sanctions. Tax settlements may be subject to inspections for five years from the end of the year in which the tax has been paid. Consequently, the Company may be subject to additional material tax liabilities, based on the result of these tax audits.

We are currently unable to fully deduct interest charges on German and US indebtedness.

The interest deduction barriers under German tax law (Zinsschranke) and US tax law limit the tax deductibility of interest expenses. If no exception to these limits apply,applies, the net interest expense (interest expense less interest income) is deductible up to 30 percent of the EBITDA taxable in Germany and the US, respectively, in a given financial year. Non-deductible interest expenses can be carried forward. Interest carry-forwards are subject to the same tax cancellation rules as tax loss carry-forwards. Whenever interest expenses are not deductible or if an interest carry-forward is lost, the tax burden in future assessment periods could rise, which might have alone, or in combination, a material adverse effect on our assets, financial condition, results of operation or cash flows.

We may be exposed to risks related to existing and future profit and loss transfer agreements executed with German subsidiaries of our European operations.

Profit and loss transfer agreements are one of the prerequisites of the taxation of Superior and its German subsidiaries as a German tax group. For tax purposes, a profit and loss transfer agreement must have a contract term for a minimum of five years. In addition, such agreement must be fully executed. If a profit and loss transfer agreement or its actual execution does not meet the prerequisites for taxation as a German tax group, Superior Industries International Germany GmbH (“SII Germany”), formerly known as Superior Industries International AG, and each subsidiary are taxed on their own income (and under certain circumstances even with retrospective effect). Additionally, 5 percent of dividends from the subsidiary to SII Germany, or other Superior European controlling entities within the European Union would be regarded as non-deductible expenses at the SII Germany level, or level of other Superior European controlling entities. Furthermore, the compensation of a loss of a subsidiary would be regarded as a contribution by SII

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Germany into the subsidiary and thus, would not directly reduce SII Germany’s profits. As a consequence, if the profit and loss transfer agreements do not meet the prerequisites of a German tax group, this could have a future material adverse effect on our assets, financial condition, results of operations or cash flows.

General Risk Factors

We may not be able to renew our various insurance policies or renew them on terms and condition acceptable to us.

We carry a variety of property, liability, and other insurance policies. These insurance policies might not cover all possible future risks we are exposed to, or we might not be able to successfully enforce an insurance claim. Additionally, although we carry insurance, coverage is limited to losses in excess of any applicable deductible. Coverage under such insurance is also limited to losses up to but not in excess of any applicable coverage limit. Furthermore, we may not be able to renew our various insurance policies or may have to renew them at terms and conditions adverse or unacceptable to us.

Fluctuations in foreign currencies and commodity and energy prices may adversely impact our financial results.

Due to our operations outside of the United States, we experience exposure to foreign currency gains and losses in the ordinary course of our business. We settle transactions between currencies (i.e. U.S. dollar to Mexican Peso, Euro to U.S. dollar, U.S. dollar to Euro and Euro to Polish Zloty.) To the extent possible, we attempt to match the timing and magnitude of transaction settlements between currencies to create a “natural hedge.” Based on our current business model and levels of production and sales activity, the net imbalance between currencies depends on specific circumstances. While changes in the terms of the contracts with our customers will create an imbalance between currencies that we hedge with foreign currency forward or option contracts, there can be no assurances that our hedging program will effectively offset the impact of the imbalance between currencies or that the net transaction balance will not change significantly in the future.

Additionally, we are exposed to commodity and energy price risks due to significant aluminum and silicon raw material requirements and the energy intensive nature of our operations. Natural gas and electricity prices are subject to a to large number of variables that

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are outside of our control. We use financial derivatives and fixed-price agreements with suppliers to reduce the effect of any volatility on our financial results.

The foreign currency forward or option contracts, the natural gas forward contracts, and the fixed-price agreements we enter into with financial institutions and suppliers are designed to protect against foreign exchange risks and price risks associated with certain existing assets and liabilities, certain firmly committed transactions and forecasted future cash flows. We have a program to hedge a significant portion of our foreign exchange or commodity and energy price exposures, typically for up to 48 months. However, we may choose not to hedge certain foreign exchange or commodity or energy price exposures for a variety of reasons including, but not limited to, accounting considerations, the prohibitive economic cost of hedging particular exposures, or our inability to identify willing counterparties. There is no guarantee that our hedge program will effectively mitigate our exposures to foreign exchange and commodity and energy price changes which could have material adverse effects on our cash flows and results of operations. In addition, fixed-price supplier and derivative contracts are subject to counterparty credit risk.

Fluctuations in foreign currency exchange rates may also affect the USD value of assets and liabilities of our foreign operations, as well as assets and liabilities denominated in non-functional currencies such as the Euro, and may adversely affect reported earnings and, accordingly, the comparability of period-to-period results of operations. Changes in currency exchange rates or commodity and energy prices may affect the relative prices at which we and our foreign competitors sell products in the same market. In addition, changes in the value of the relevant currencies or commodities and energy prices may affect the cost of certain items required in our operations. We cannot ensure that fluctuations in exchange rates or commodities and energy prices will not otherwise have a material adverse effect on our financial condition or results of operations or cause significant fluctuations in quarterly and annual results of operations.operations and cash flows.

A disruption in our information technology systems, including a disruption related to cybersecurity, could adversely affect our financial condition and financial performance.

We rely on the accuracy, capacity and security of our information technology systems. Despite the security measures that we have implemented, including those measures related to cybersecurity, our systems, as well asand those of our customers, suppliers and other service providers, could be breached or damaged byare subject to cyber security incidents, including computer viruses, malware, phishing attacks, and denial-of-service attacks,attacks. Our systems are also subject to natural or man-made incidents or disasters or unauthorized physical or electronic access. These types of incidents (collectively, a “system disruption”) have become more prevalent and pervasive across industries, including in our industry, and are expected to continue in the future. A breachsystem disruption could result in business disruption, theft of our intellectual property, trade secrets or customer information and unauthorized access to personnel information. Although cybersecurity and the continued development and enhancement of our controls, processes, practices and training designed to protect our information technology systems from attack, damage or unauthorized access are a high priority for us, our activities and investment may not be deployed quickly enough or successfully protect our systems against all vulnerabilities, including technologies developed to bypass our security measures. In addition, outside parties may attempt to fraudulently induce employees or customers to disclose access credentials or other sensitive information in order to gain access to our secure systems and networks. There are no assurances that our actions and investments to improve the maturity of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion.system disruption. Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks and we cannot predict the extent, frequency or impact these problems may have on us. To the extent that our business is interrupted or data is lost, destroyed or inappropriately used or disclosed, such disruptions could adversely affect our competitive position, relationships with our customers,

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financial condition, operating results and cash flows. In addition, we may be required to incur significant costs to protect against the damage caused by these disruptions or security breaches in the future.

We are also dependent on security measures that some of our third-party customers, suppliers and other service providers take to protect their own systems and infrastructures. Some of these third parties store or have access to certain of our sensitive data, as well as confidential information about their own operations, and as such are subject to their own cybersecurity threats.system disruptions. Any security breachsystem disruption of any of these third-parties’ systems could result in unauthorized access to our information technology systems, cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence in our products and services, any of which could adversely affect our financial performance.

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Competitors could copy our products or technologies and we could violate protected intellectual property rights or trade secrets of our competitors or other third parties.

We register business-related intellectual property rights, such as industrial designs, patents and trademarks, hold licenses and other agreements covering the use of intellectual property rights, and have taken steps to ensure that our trade secrets and technological know-how remain confidential. Nevertheless, there is a risk that third parties would attempt to copy, in full or in part, our products, technologies or industrial designs, or to obtain unauthorized access and use of Company secrets, technological know-how or other protected intellectual property rights. Also, other companies could successfully develop technologies, products or industrial designs similar to ours, and thus potentially compete with us.

Further, there can be no assurance that we will not unknowingly infringe intellectual property rights of our competitors, such as patents and industrial designs, especially due to the fact that the interpretations of what constitutes protected intellectual property may differ. Similarly, there is a risk that we will illegitimately use intellectual property developed by our employees, which is subject in each case to relevant regulations governing employee-created innovations. If a dispute concerning intellectual property rights arises, in which the relevant court issues an opinion on the disputed intellectual property rights contrary to us, identifying a breach of intellectual property rights, we may be required to pay substantial damages or to stop the use of such intellectual property. In addition, we are exposed to the risk of injunctions being imposed to prevent further infringement, leading to a decrease in the number of customer orders.

All these events could have a material adverse effect on our assets, financial condition, results of operations or cash flows.

ITEM 1B - UNRESOLVED STAFF COMMENTS

None.

ITEM 2 - PROPERTIES

Our worldwide headquarters is located in Southfield, Michigan. In our North American operations, we maintain and operate four facilities that manufacture aluminum wheels for the automotive industry including our facility for finishing wheels with physical vapor deposition. These facilities are located in Chihuahua, Mexico. These manufacturing facilities currently encompass approximately two million square feet of manufacturing space. We own all of our manufacturing facilities in North America, and we lease our worldwide headquarters located in Southfield, Michigan. During the third quarter of 2019, the Company initiated a plan to significantly reduce production and manufacturing operations at its Fayetteville, Arkansas, location. As of December 31, 2020, we are continuing to use the Arkansas facility for research and development activities and service wheel storage.

Our European operations include fivefour locations. The European headquarters is situatedlocated in Bad Dürkheim, Germany which includes our European management, sales and distribution functions, as well as the logistics center and warehouse for the aftermarket business. The largest of European production facilitiesfacility is located in Stalowa Wola, Poland whichand consists of 3 plants. The newest plant in Poland was put into operation in the beginning of June 2016. Another production facility is situatedlocated in Werdohl, Germany, where most development work is performed. Our Fußgönheim location, Germany, near the Bad Dürkheim offices, had historically been used to manufacture motor sport and forged wheels. We discontinued manufacturing of motor sport and forged wheels in Fußgönheim at the end of the third quarter of 2020. The European locationsbusiness also includeincludes a location in Lüdenscheid, Germany. Our European production facilities encompass approximately 1.5 million square feet.Germany, that supports our research and development in Europe. We own all of our manufacturing facilities in Europe and we lease our Lüdenscheid facility and our European headquarters located in Bad Dürkheim, Germany.

In general, our manufacturing facilities, which have been constructed at various times, are in good operating condition and are adequate to meet our current production capacity requirements. There are activeActive maintenance programs to keep these facilities in good condition, and we have an active capital spending program to replace equipment as needed to maintain factory reliability and remain technologically competitive on a worldwide basis.

Additionally, reference is made to Note 1, “Summary of Significant Accounting Policies,” Note 8, “Property, Plant and Equipment” and Note 15 “Leases,” in the Notes to the Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” of this Annual Report.

ITEM 3 - LEGAL PROCEEDINGS

We are party to various legal and environmental proceedings incidental to our business. Certain claims, suits and complaints arising in the ordinary course of business have been filed or are pending against us. Based on facts now known, we believe all such matters are adequately provided for, covered by insurance, are without merit, and/or involve such amounts that would not materially adversely affect our consolidated results of operations, cash flows or financial position. Refer to under Item 1A, “Risk Factors - We are from time to time subject to litigation, which could adversely affect our results of operations, financial condition or cash flows” of this Annual Report.

ITEM 4 - MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 4A -INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Information regarding executive officers who are also Directors is contained in our 20212022 Proxy Statement under the caption “Election of Directors.” Such information is incorporated into Part III, Item 10, “Directors, Executive Officers and Corporate Governance.”  All executive officers are appointed annually by the Board of Directors and serve at the will of the Board of Directors. The following table sets forth the names, ages and positions of our executive officers.

Set forth below is a description of the business experience of each of our executive officers.

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PART II

ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Superior Common Stock is traded on the NYSE under the symbol “SUP”. As of February 26, 2021,24, 2022, there were approximately 354349 holders of record of our common stock.

ITEM 6 - SELECTED FINANCIAL DATA

As a smaller reporting company, as defined in Rule 10(f)(1) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.– [RESERVED]

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” in this Annual Report. This discussion contains forward-looking statements, which involve risks and uncertainties. Please refer to the section entitled “Forward Looking Statements” at the beginning of this Annual Report immediately prior to Item 1. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including but not limited to those discussed in Item 1A, “Risk Factors” and elsewhere in this Annual Report.

Executive Overview

Our principal business is the design and manufacture of aluminum wheels for sale to OEMs in North America and Europe and to the aftermarket in Europe. We employ approximately 7,6007,800 full-time employees, operating in eight manufacturing facilities in North America and Europe with a combined annual manufacturing capacity of approximately 20 million wheels.Europe. We are one of the largest aluminum wheel suppliers to global OEMs and we believe we are the #1 European aluminum wheel aftermarket manufacturer and supplier. Our OEM aluminum wheels accounted for approximately 91 percent of our sales in 20202021 and are primarily sold for factory installation on vehicle models manufactured by BMW (including Mini), Daimler Group (Mercedes-Benz, AMG, Smart), FCA, Ford, GM, Honda, Jaguar-Land Rover, Lucid Motors, Mazda, Nissan, PSA, Renault, Stellantis, Subaru, Suzuki, Toyota, VW Group (Volkswagen, Audi, SEAT, Skoda, Porsche, Bentley) and Volvo. We also sell aluminum wheels to the European aftermarket under the brands ATS, RIAL, ALUTEC and ANZIO. North America and Europe represent the principal markets for our products, but we have a diversified global presence and diversified customer base consisting of North American, European and Asian OEMs. 

Globally, we shipped 15.2 million units in 2020, down from 19.2 million in 2019, a 21.1 percent decrease, which was slightly better than overall industry volume trends.  Demand for our products is mainly driven by light-vehicle production levels in North America and Europe, as well as production levels at our key customers and take rates on vehicle wheel programs we serve. North American light-vehicle production in 2020 was 13.0 million vehicles, as compared to 16.3 million vehicles in 2019. In Europe, the light vehicle production in 2020 was 13.6 million vehicles, as compared to 17.8 million vehicles in 2019. Industry production volumes in 2020 were adversely impacted by the COVID-19 pandemic.

Effect of COVID-19 Pandemic

The impact ofIn 2020, the COVID-19 pandemic and uncertainty with respect to the economic effects of the pandemic introduced significant volatility in the financial markets during the year ended December 31, 2020 and continues to have anhad a widespread adverse effect on the automotive industry, including reductions in consumer demand and OEM automotive production.industry.

While navigating through this period of volatility and uncertainty, Superior’s top priorities have been:were:

ToIn order to ensure the health and safety of our employees globally and respond to the then current industry production environment, we closed production at our North American facilities in early April 2020 and our European facilities in late March 2020. In North America, our manufacturing operations ceased production in early April 2020. The Company reopened all of its facilities by June 1, 2020, in line with productionindustry demand and finished goods levels, and in accordance with local government requirements.

Additionally, we developed and executed As a Safe Work Playbook across our footprint. We also institutedresult, COVID-19 had a Global Employee Health & Safety (“EH&S”) Steering Team, led by our Director of EH&S, and comprised of our global and regional leaders from Operations and Human Resources. The EH&S Steering Team is responsible for ensuring the Safe Work Playbook leverages global best practices and coordinating the consistent and complete implementation of the policies across our global footprint, including all policies and protocols in compliance with local rules and regulations.We have invested in facility updates to ensure social distancing, including changes in cafeteria layout and practices, transportation services and marked spacing throughout our manufacturing facilities. We have established Personal Protective Equipment levels for each location, based on local requirements, and purchasing controls are in place to ensure adequate supplies. Extended preventative actions were introduced which include no travel without written approval, wearing face masks at all times at our plants, quick testing implementation at our plants, with increased and standard criteria for testing and contact tracing, as well as working from home wherever possible. In the event of a COVID-19 incident, the local COVID-19 response team immediately executes the defined protocols, including isolation of any employee showing symptoms, and conducts traceability

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activities to identify and quarantine all potentially exposed individuals. Our management is actively monitoring COVID-19 developments in Europe and North America and met daily throughout much of 2020 to discuss the status of COVID-19 cases and any necessary actions.

Our global unit shipments declined approximately 21.1 percent in 2020, as compared to 2019 primarily due to the COVID-19 pandemic. The decline began in the second quarter of 2020, with unit shipments 92.2 percent and 67.6 percent lower in April and May, respectively, as compared to the same months of 2019. Volumes began to improve in June of 2020, with unit shipments only 12.5 percent lower on a year-over-year basis, as industry production volumes started to recover. The recovery continued in the third quarter with units shipped only 10.1 percent lower, as compared to the third quarter of 2019, and only 2.1 percent lower for the month of September of 2020. In the fourth quarter of 2020, our global unit shipments were essentially flat with the fourth quarter of 2019 as our units shipped in Europe were down 4.2 percent, offset by a 4.0 percent increase in units shipped in North America. As such, our North American volume recovery has been strong, while the European recovery has been slower (refer to the discussion under Results of Operations for further details on year-over-year comparisons and the impact of COVID-19 on our results).

While Superior experienced stronger demand from its customers during each of the third and fourth quarters of 2020 as compared to the second quarter, the Company extended certain cost reduction initiatives through the end of 2020. During the year ended December 31, 2020, Superior executed temporary and permanent cost savings including furloughs, compensation and benefit reductions, temporary facility closures, deferral of merit increases, reduced travel, and personnel restructurings. The Company also used government subsidies where available. While some of the temporary measures such as the wage reductions were discontinued in the third quarter, other temporary initiatives remained in place through the end of the year and are expected to be in place into 2021. In total, the cost initiatives implemented in response to the COVID-19 pandemic benefited 2020 by more than $40 million.  

The ultimate impact that COVID-19 will havesignificant adverse effect on our business, results of operations and financial condition will depend onin 2020, but this effect had largely subsided by the end of 2020 with the exception of supply chain disruptions which emerged late in 2020 and continued in 2021. We are continuing to monitor the resurgence of the virus, including the emergence of new virus variants and the progress of the vaccination efforts.

Industry Overview and Supply Chain Disruption

A broad range of factors impact automotive industry sales and production volumes, including consumer demand and preferences, dealer inventory levels, labor relations, trade agreements, cost and availability of raw materials and components, fuel prices, regulatory requirements, government initiatives, availability and cost of credit, changing consumer attitudes toward vehicle ownership and other factors. Our sales are driven generally by overall automotive industry production volumes and, more specifically, by the volumes of the vehicles for which we supply wheels. In addition, favorable product mix drives higher sales since larger diameter wheels and premium finishes command higher unit prices. Larger cars and light trucks, as well as premium vehicle platforms, such as luxury, sport utility and crossover vehicles, typically employ larger diameter wheels and premium finishes.

The COVID-19 pandemic has also contributed to supply chain disruptions across a number of evolving factorsindustries. The automotive industry has been, and will likely continue to be, impacted by the supply chain disruptions that emerged in late 2020 as OEM vehicle production resumed and began to scale following the shutdown caused by the COVID-19 pandemic. These supply chain disruptions became a more significant challenge in 2021 and include shortages of semiconductor chips, electric vehicle batteries, shipping containers, steel, resin and foam. The semiconductor chip shortage, which began to affect global automotive industry production in the first two quarters of 2021, drove significantly lower OEM vehicle production and high OEM production volatility in the third and fourth quarters of 2021. Although automotive industry production volumes in the first half of 2021 were higher than the first half of 2020, production volumes in the second half of 2021 were lower than 2020. Lower production volumes coupled with OEM customer order

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volatility have resulted in manufacturing inefficiencies, including elevated labor, scrap and equipment change over costs. In addition, certain of our costs increased significantly in 2021, particularly the cost of aluminum, energy and materials that incorporate resins. Although our OEM contracts provide for the pass through of fluctuating aluminum costs, the mechanisms generally do not adequately incorporate the current cost to alloy the aluminum. Our OEM contracts generally do not provide for the pass through of other costs, including energy and materials that incorporate resins. With respect to our aftermarket business, we may not be ableadjust our pricing periodically to accurately predict, including:reflect increased costs. Rising costs and OEM production volatility have caused our inventory balance to increase, negatively impacting our cash flows.

Automotive industry production volumes in the durationNorth American and scopeWestern and Central European regions, our principal markets, are shown below for the year ended December 31, 2021, as compared to the corresponding periods of the pandemic; the impact of recent resurgences of COVID-19 cases2020 and 2019:

Automotive passenger and light truck vehicle production volumes in North America and Western and Central Europe, remained relatively flat in 2021 as compared to 2020 (only 3.2 percent lower), but were 24.4 percent lower than 2019. North American volumes in 2021 were flat as compared to 2020, however volumes for Western and Central Europe declined 6.2 percent. While industry production volumes in 2020 were adversely impacted by the efficacyCOVID-19 pandemic, 2021 volumes were constrained by the semiconductor chip shortage which emerged in the first two quarters of 2021 and distributionworsened in the last half of COVID-19 vaccines,  governmental, OEMs’the year. Although volumes had improved 30.3 percent in the first half of 2021 as compared to the first half 2020, they declined 25.5 percent in the latter half of the year as compared to the second half of 2020. IHS, an independent automotive industry analyst firm, forecasts that 2022 production volumes in North America and Western and Central Europe will increase18.6 percent over 2021 (16.6 percent in North America and 20.6 percent in Western and Central Europe), suppliers’, customers’ and individuals’ actions that have been andbut volumes will continue to lag 2019 by 10.3 percent. While semiconductor manufacturers have announced plans to expand capacity over the next several years, it is unclear when automotive industry semiconductor chip shortages will begin to subside. The rebound in production volumes will be takendependent upon broader availability of semiconductor chips, among other factors.

During 2021, we experienced significant increases in responsethe cost of aluminum, the principal raw material used in the manufacture of our wheels, of over 45 percent on a year-over-year basis. While we were able to protect the pandemic;margins of our OEM business by passing these costs on to our customers in 2021, aluminum price increases have increased our working capital and reduced our operating cash flow. In addition, our electricity and natural gas costs have risen significantly in 2021, as has the impactcost of materials incorporating resins. If these cost pressures continue in 2022, our margins and operating cash flow could be adversely impacted.              

Business Overview

Globally, we shipped 16.1 million units in 2021, up from 15.2 million in 2020 but down from 19.2 million in 2019. Superior volumes increased 6.1 percent, better than the pandemic on economic activity and actions that continue to be taken3.2 percent decline in response to such impact by the OEMs’ suppliers and customers.overall industry volumes for 2021 but 16.2 percent lower than our 2019 volumes.

The following chart shows the comparison of our operational performance in 2021 and 2020 and 2019 (in thousands)millions):

InSales in 2021 were higher than 2020 sales were lowerprimarily due to reducedfavorable product mix and higher aluminum prices and shipment volumes (despite the semiconductor chip shortage which constrained OEM 2021 vehicle production volumes), as well as favorable foreign exchange rates. Our income from operations increased year-over-year due to the goodwill and indefinite-lived intangible asset impairment charge of $193.6 million recognized in both2020, as well as improved North AmericaAmerican profitability primarily associated with favorable product mix and Europe attributable to the COVID-19 pandemic. Our 2020higher shipment volumes. Similarly, our 2021 Adjusted EBITDA was lowerhigher than 20192020 primarily due to lower volumes attributable to the on-going COVID-19 pandemic, including production shutdowns in the second quarter, partially offset by improvedNorth American favorable product mix cost saving initiatives implemented during the year, and favorable foreign exchange rates.

higher shipment volumes.

The following table is a summary of the Company’s operating results for 20202021 and 2019:2020:

Results of Operations

20202021 versus 20192020

Shipments

Wheel unit shipments were 15.216.1 million for 2020,2021, compared to wheel unit shipments of 19.215.2 million in the prior year, a decreasean increase of 21.16.1 percent. The decrease occurredincrease was attributable to a 9.9 percent increase in both our European and North American operationsvolume and was driven by lower volumes at our key OEM customers due to the on-going COVID-19 pandemic, including production shut-downsa 2.2 percent increase in the second quarter of the calendar year.European volume.

Net Sales

Net sales for 20202021 were $1,100.8$1,384.8 million compared to net sales of $1,372.5 million for the same period in 2019, a decrease of 19.8 percent. The reduction in net sales was principally driven by lower production volumes and lower aluminum prices in North America and Europe related to the on-going COVID-19 pandemic, partially offset by improved product mix comprised of larger diameter wheels and premium finishes in both regions and favorable Euro foreign exchange.

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Cost of Sales

Cost of sales were $1,035.1 million in 2020, compared to $1,256.4$1,100.8 million in the prior year, period.an increase of $284.0 million or 25.8 percent. The decreaseincrease in revenue was due to $178.0 million attributable to higher pass through of aluminum to the OEMs; $88.3 million related to favorable product mix and higher shipment volumes; and $17.7 million resulting from favorable foreign exchange, primarily related to the Euro. The increase in shipment volumes was primarily due to the 2020 shutdowns at our key OEM customers in response to the COVID-19 pandemic, while the increase in aluminum pass through was due to the higher cost of aluminum and higher shipment volumes, as well as product mix.

Cost of Sales

Cost of sales was $1,270.0 million for 2021, compared to $1,035.1 million in the prior year, an increase of $234.9 million. The increase in cost of sales was principally due to lower production$159.3 million in higher raw material costs; $65.6 million related to increased shipment volumes and lower aluminum prices in North Americaproduct mix; and Europe$10.0 million resulting from higher foreign exchange, primarily related to the on-going COVID-19 pandemic, as well as lower utility expenses, reduced headcount and operating expenses, the use of European government subsidies and the rationalization of the Company’s North American manufacturing footprint in the prior year.Euro.

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Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses for 20202021 were $59.3 million, or 4.3 percent of net sales, compared to $52.4 million, or 4.8 percent of net sales compared to $63.9in the prior year.  The $6.9 million or 4.7 percent of net sales for the same period in 2019.  The decrease isincrease was primarily due to reduced employeea $10.7 million increase in compensation relatedand benefit expense, including $4.7 million due to boththe modification of the 2019 and 2020 PSU awards, and temporary and permanent cost savings initiatives, as well as reduced discretionary spending and travel expenses.actions taken in 2020 in response to the COVID-19 pandemic, partially offset by a $4.4 million gain on the sale of our Fayetteville, Arkansas facility in 2021.

Impairment of Goodwill and Indefinite-lived Intangibles

In the fourth quarter of 2019, we recognized a goodwill and indefinite-lived intangible asset impairment charge of $102.2 million relating to our European reporting unit.  In the first quarter of 2020, we recognized an additionala goodwill and indefinite-lived intangible asset impairment charge of $193.6 million relating to our European reporting unit (refer to Note 9, “Goodwill and Other Intangible Assets” in the Notes to Consolidated Financial Statements in Item 8 “Financial Statements and Supplementary Data” of this Annual Report.)Report).

Net Interest Expense

Net interest expense for 20202021 was $45.4$41.9 million, compared to interest expense of $47.0$45.4 million in 2019.the prior year. The reduction in interest expense$3.5 million decrease was primarily due to both early extinguishment and principal repayments during 2019 and 2020, as well as lower Termaverage interest rates on the term Loan Facility interest rates in 2020.  This was partially offset by incremental interest expenses dueand substantially lower borrowings under our revolving lines of credit during 2021, as compared to the Company’s drawings on its European and North American revolvers in 2020.

Other Income (Expense)

Other expense, net was$2.3 million in 2021, primarily due to a net casualty loss of $1.5 million associated with a flood at our Werdohl, Germany location. Other expense of $2.8 million in 2020 compared to other income of $4.0 million in 2019. The decline in other income in 2020 was primarily driven by a $3.7 million gain on early extinguishment of a portion of the Notes recognized in 2019, $1.6due to $2.4 million of expense related to an increase in the fair value of the preferred stock embedded derivative liabilities recognized in 2020 and higher foreign exchange losses in 2020 as compared to 2019.  losses.

Income Tax Provision

The income tax provision for 2021 was $7.4 million on pre-tax income of $11.2 million, representing an effective tax rate of 66.5 percent. The 2021 effective tax rate differs from the statutory rate primarily due to the recognition of a valuation allowance on deferred tax assets, nondeductible charges and U.S. tax on foreign earnings, partially offset by a favorable split of pre-tax jurisdictional income. The income tax provision for 2020 was $14.9 million on a pre-tax loss of $228.7 million, representing an effective income tax rate of (6.5) percent. The 2020 effective tax rate was lower thandiffers from the statutory rate primarily due to the effectseffect of the goodwill impairment in Germany and the recognition of a valuation allowance on deferred tax assets, partially offset by a favorable split of pre-tax jurisdictional pre-tax income. The

Net Income (Loss)

Net income tax provision for 2019 in 2021 was $3.4$3.8 million, onor a pre-taxloss per diluted share of $1.17, compared to net loss of $93.0 million, representing an effective income tax rate of (3.7) percent.

Net Loss

Net loss in 2020 was $243.6 million, or a loss per diluted share of $10.81 compared to net loss of $96.5 million, or a loss per diluted share of $5.10 in 2019.2020.

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Segment Sales and Income from Operations

North America

In 2020,2021, net sales of our North America segment decreased 21.9increased 35.4 percent, as compared to 2019, primarily2020. The increase in net sales was due to a 21.2 percent decrease$129.5 million in volumes, which was principally attributablehigher aluminum pass through to the on-going COVID-19 pandemic, includingOEMs and $65.3 million related to a production shut-down during the second quarter of the year9.9 percent increase in shipment volumes and lower aluminum prices, partially offset by improvedfavorable product mix comprised of larger diameter wheels and premium wheel finishes.  U.S. and Mexico sales as a percentage of North American total sales were approximately 5.1 percent and 94.9 percent, respectively, during 2020, which compares to 14.8 percent and 85.2 percent for 2019. The change in North American sales by country is due to discontinuing manufacturing activities at our Fayetteville, Arkansas location in the fourth quarter of 2019.mix. North American segment income from operations for the year ended 20202021 was lower$41.9 million higher than the prior year period, due to reduced$27.1 million related to favorable material and manufacturing cost performance and $20.2 million related to favorable product mix and higher shipment volumes, at our key North American OEM customers, partially offset by favorable product mix, utilities savings associated with plant investments madea $5.4 million increase in 2019 to use electricity from a competitively priced market and temporary and permanent cost reductions including furloughs, hourly and salary wagecompensation and benefit reductions, idling of our manufacturing facilitiesexpense. The increase in Aprilcompensation and May, reduced travel and personnel restructuring, as well asbenefit expense was largely due to the rationalizationmodification of the North American manufacturing footprint in the prior year.2019 and 2020 PSU awards.

Europe

In 2020,2021, net sales of our European segment decreased 17.6increased 16.2 percent, compared to 2019, primarily2020. The increase in net sales was due to a 20.9 percent decrease$48.5 million in volume, which was principally attributablehigher aluminum pass through to the on-going COVID-19 pandemic, including a production shut-down during the second quarter of the calendar year and lower aluminum prices, partially offset by improvedOEMs; $23.0 million related to favorable product mix comprised of higher diameter wheels and premium wheel finishesa 2.2 percent increase in shipment volumes; and $17.7 million in favorable Euro foreign exchange. Sales in Germany and Poland as a percentage of total European segment sales were approximately 38.6 percent and 61.4 percent, respectively, during 2020, which compares to 36.8 percent and 63.2 percent for 2019. European segment income from operations for the year ended 20202021 was lower$193.9 million higher than the prior year period primarily due to a $193.6 million goodwill and indefinite-lived intangible asset impairment charge of $193.6 millionrecognized in 2020 and lower volumes related to key European OEM customers, partially offset by favorable mix and temporary and permanent cost reductions, including second quarter facility closures, usage of government subsidies in both Poland and Germany, deferral of merit increases, reduced travel and personnel restructurings.2020.

Financial Condition, Liquidity and Capital Resources

As of December 31, 2020,2021, our cash and cash equivalents totaled $152.4$113.5 million as compared to $77.9$152.4 million at December 31, 2019.2020. Our sources of liquidity primarily include cash and cash equivalents, cash provided by operating activities, borrowings under available debt facilities, factoring arrangements for trade receivables and, from time to time, other external sources of funds. Working capital (current assets minus current liabilities) and our current ratio (current assets divided by current liabilities) were $152.5$172.4 million and 1.7:1, respectively, at December 31, 2020,2021, versus $163.1$152.5 million and 1.9:1.7:1 at December 31, 2019.2020. While the Company continues to effectively manage all elements of working capital, inventories have increased in 2021 due to rising raw material costs and, to a lesser extent, higher conversion costs. 

Our working capital requirements, investing activities and cash dividend payments have historically been funded from internally generated funds, debt facilities, and cash and cash equivalents, and we believe these sources will continue to meet our long-term  requirements, as well as our currently anticipated short-term needs.future requirements. Capital expenditures consist of expenditures relatedrelate to improving production quality and efficiency and extending the useful lives of existing property plant and equipment (“existing” business),expenditures for new product offerings, as well as expenditures related to new product offerings and expanded capacity for existing products (“new” business). Over time,products. During 2022, we expect that capital

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expenditures have consisted of roughly equal components of new and existing business, the most significantwill be approximately $80.0 million, $42.9 million of which in recent years has been our investment in physical vapor deposition (PVD) technology which went into production in 2019.committed under outstanding purchase orders at December 31, 2021.

In connection with the acquisition of our European operations, we entered into several debt and equity financing arrangements during 2017. On March 22, 2017, we entered into a USD Senior Secured Credit facility (“USD SSCF”) consisting of a $400.0 million Senior Secured Term Loan Facility (“Term Loan Facility”) and a $160.0 million Revolving Credit Facility (“Revolving Credit Facility”Facility,” together with the Term Loan Facility referred to as the USD Senior Secured Credit Facility, “USD SSCF”). On May 22, 2017, we issued 150,000 shares of redeemable preferred stock for an aggregate purchase price of $150.0 million. On June 15, 2017, we issued €250.0 million originalaggregate principal amount of 6%6.00% Senior Notes due June 15, 2025 (“Notes”(the “Notes”). As aFinally, as part of the European business acquisition, we also assumed $70.7 million of outstanding debt, including a €30.0 million European Revolving Credit Facility (“EUR SSCF”) (subsequently increased to €45.0 million during the second quarter of 2019)€60.0 million). On January 31, 2020, the available borrowing limit of the EUR SSCF was increased from €45.0 million to €60.0 million. All other terms of the EUR SSCF remained unchanged. In the fourth quarter of 2019,addition, the European operationsbusiness entered into equipment loan agreements totaling $13.4 million (€12.0 million). During in the fourth quarter of 2019. The Company drew down €10.6 million on these equipment loans in the first quarter of 2020 and drew the Company drew down on these equipment loans andremaining €1.4 million in the outstanding balance was $13.0 million asfirst quarter of December 31, 2020.

2021. With the onset of the COVID-19 pandemic and the ensuing economic uncertainty, the Company drew down on its USD SSCF and EUR SSCF revolving credit facilities to provide sufficient liquidity during the production shutdown and resumption of operations until we were able to scale production volumes and restore profitability and positive free cash flow.additional liquidity. As of March 31, 2020, the Company had borrowings outstanding under these facilities of $207.9 million. Beginning in MarchThe Company resumed all its operations by June 1, 2020 the Company took swift action to reduce costs, including temporary facility closures, salary reductions, layoffs, furloughs, personnel restructurings, deferral of merit increases and reduced selected employee benefits across our global workforce in accordance with local laws and regulations. In the third quarter of 2020, our sales volume returned to levels comparable to 2019, with quarterly sales 9.9 percent lower than 2019 and only 2.0 percent lower for the month of September. In addition, we restored profitability with net income of $11.1 million, generated cash flow from operating activities of $99.6 million and fully repaid the borrowings under the USD SSCF and EUR SSCF revolving credit facilities duringby September 30, 2020. There are no borrowings under the third quarter of 2020. In the fourth quarter of 2020, the recovery continued with sales of $337.7 million, increasing $27.4 millionCompany’s USD SSCF or 8.8 percent over the same period of 2019, cash flow from operating activities of $57.6 million, and income from operations of $17.5 million, an increase of $7.7 million over the same period of 2019 (excluding the $102.2 million goodwill and indefinite-lived intangible asset impairment charge recorded in the fourth quarter of 2019).  EUR SSCF at December 31, 2021.

Both of our revolving credit facilities mature in May 2022. The Company has no other significant funded debt obligations until May 2024. Superior expects, at this time, to remain compliant with the terms of all of its debt facilities.

Balances outstanding under the Term Loan Facility, Notes, and equipment loans as of December 31, 20202021 were $349.2 million, $266.9$245.8 million, and $23.7$18.6 million, respectively. The balance of the redeemable preferred stock was $179.4$199.9 million as of December 31, 2020. 2021. The Term Loan Facility matures May 23, 2024 and the Notes mature June 15, 2025. In addition, the redeemable preferred stock may be unconditionally redeemed on or after September 14, 2025 at the redemption amount, currently $300 million, provided the Company has sufficient available funds. Under Delaware law, any redemption payment would be limited to the “surplus” that our Board determines is available to fund a full or partial redemption without rendering us insolvent. The shares of preferred stock that have not been redeemed would continue to receive an annual dividend of 9 percent on the $150.0 million original stated value, plus any accrued and unpaid dividends, which would be paid quarterly. The Board would have to evaluate on an ongoing basis the ability of the Company to make any further redemption payments until the full redemption amount has been paid. The Company intends to

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refinance a portion or all of its debt obligations, including the Term Loan Facility and Notes, prior to maturity. As a part of any refinancing, the Company will review its overall capital structure and may evaluate other sources of capital which could include issuance of common stock or restructuring of the preferred stock.

On May 3, 2021, the Company extended the term of the Revolving Credit Facility under its USD SSCF. The commitment under the facility was reduced from $160.0 million to $132.5 million, with $25.0 million of the commitment maturing May 23, 2022 and the remaining $107.5 million maturing October 31, 2023. During the second quarter of 2021, the Company amended its European Revolving Credit Facility (“EUR SSCF”), extending the term to May 22, 2023 and increasing the applicable margins and commitment fees, while maintaining the €60.0 million commitment. Our liquidity totaled $380.9$308.7 million at December 31, 2020,2021, including cash on handand cash equivalents of $152.4$113.5 million and available unused commitments under credit facilities of $228.5$195.2 million.

As part of our ongoing efforts to improve our cash flow and related liquidity, we negotiate with suppliers to optimize our terms and conditions, including extended payment terms. Beginning in 2021, the Company receives extended payment terms for a portion of our purchases with one of our principal aluminum suppliers in exchange for a nominal adjustment to the product pricing. The payment terms provided to us are consistent with aluminum industry norms, as well as those offered to the supplier’s other customers. The supplier intends to finance these extended terms by factoring receivables due from us with a financial institution. We are not a party to the supplier’s factoring agreement with the financial institution. We remit payments directly to our supplier, except with respect to product purchased under extended terms which have been factored by the supplier. These payments are remitted directly to the financial institution in accordance with the payment terms originally negotiated with our supplier. As of December 31, 2021, the Company owed $17.6 million to the financial institution which is included in accounts payable in the consolidated balance sheets. The Company made $78.3 million in payments to the financial institution pursuant to the supplier’s factoring arrangement for the year ended December 31, 2021. These payments are included in cash flows from operations within the consolidated statements of cash flows.

As of December 31, 2021, we had no significant off-balance sheet arrangements other than factoring of $97.6 million of our trade receivables.

The following table summarizes the cash flows from operating, investing, and financing activities as reflected in the consolidated statements of cash flows.

20202021 versus 20192020

Operating Activities

Net cash provided by operating activities was $44.9 million in 2021, as compared to $150.1 million in 2020, as compared to $162.8 million in 2019.2020. The decrease in cash flow provided by operating activities was primarily driven by second quarter losses attributable to production shutdowns at our key North American and European OEM customers. This wasan increase in working capital, partially offset by higher year-over-year reductionsincreased profitability. In 2021, the increase in net working capital. Inventory decreases werecapital consumed $66.3 million of cash, while the reduction in working capital in 2020 provided $73.5 million of cash. The increase in working capital was primarily due to lower production volumes in 2020 from COVID-19 related shutdowns as well as improved inventory management, and the increases in accounts payable were primarily due to improved payment terms negotiated with certainhigher cost of our critical suppliers.aluminum.

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Investing Activities

Net cash used in investing activities was $57.5 million in 2021, as compared to $44.2 million in 2020, as compared to $54.7 million in 2019. The decrease2020. This increase in investing activities was driven by resumption of certain capital projects that were suspended in 2020 due to the 2020 reductionCOVID-19 production shutdowns and ongoing investments to support increased production capabilities in capital expenditures to align with industry production volumes,both the North American and European regions, partially offset by proceeds of $6.6 million from the sale of certain assets in the second quarter of 2019.our Fayetteville, Arkansas facility.

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Financing Activities

Net cash used in financing activities in 20202021 was $37.1$24.0 million, as compared to $76.6$37.1 million in 2019.2020. This decreasechange was primarily due to lower 2020 debt repayments, proceeds from capital equipment loans in the first quarter 2020 and the eliminationprepayments of the common stock dividendTerm Loan Facility in the third quarter of 2019.2020 that did not recur in 2021.

Off-Balance Sheet Arrangements

As of December 31, 2020, we had no significant off-balance sheet arrangements other than factoring of $96.6 million of our trade receivables.

NON-GAAP FINANCIAL MEASURES

In this Annual Report, we discuss two important measures that are not calculated according to U.S. GAAP, value added sales and Adjusted EBITDA.

Value added sales is a key measure that is not calculated according to U.S. GAAP. In the discussion of operating results, we provide information regarding value added sales. Value added sales represents net sales less the value of aluminum and services provided by outsourced service providers (“OSPs”) that are included in net sales. As discussed further below,Contractual arrangements with our customers allow us to pass on changes in aluminum prices; therefore, fluctuations in underlying aluminum prices generally do not directly impact our profitability over time. However, valueprices. Value added sales is worthy of being highlighted for the benefit of users of our financial statements as it allows users of the financial statements to consider our net sales information both with and without the aluminum and OSP cost components thereof.costs. Management utilizes value added sales as a key metric to determine growth of the Company because it eliminates the volatility of aluminum prices.

Adjusted EBITDA is a key measure that is not calculated according to U.S. GAAP. Adjusted EBITDA is defined as earnings before interest income and expense, income taxes, depreciation, amortization, restructuring charges and other closure costs and impairments of long-lived assets and investments, changes in the fair value of the redeemable preferred stock embedded derivative liability, acquisition and integration and certain hiring and separation related costs, proxy contest fees, gains associated with early debt extinguishment, and accounts receivable factoring fees. We use Adjusted EBITDA as an important indicator of the operating performance of our business. Adjusted EBITDA is used in our internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors and evaluating short-term and long-term trends in our operations. We believe the Adjusted EBITDA financial measure assists in providing a more complete understanding of our underlying operational measures to manage our business, to evaluate our performance compared to prior periods and the marketplace and to establish operational goals. Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies.

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The following table reconciles our net income, the most directly comparable U.S. GAAP financial measure, to our Adjusted EBITDA:

Critical Accounting Policies and Estimates

Accounting estimates are an integral part of the consolidated financial statements. These estimates require the use of judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the periods presented. We believe the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates actual results could differ from the original estimates, requiring adjustments to these balances in future periods (refer to Note 1, “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” in this Annual Report for our significant accounting policies related to our critical accounting estimates).

Revenue Recognition - Sales– Revenue estimation uncertainty primarily relates to deferral and recognition of tooling revenue and recognition of certain price adjustments on sales to our products and related costs are recognized when control transfers to the customer, generally upon shipment.OEM customers treated as variable consideration. Tooling reimbursement revenues, related to the initial tooling reimbursed by our customers, are deferred and recognized over the expectedaverage life of the vehicle wheel program on a straight-line basis. A portion of our selling prices to OEM customers is attributable to the aluminum content of our wheels. Our selling prices are adjusted for changes in the current aluminum market based upon specified aluminum price indices during specific pricing periods, as agreed with our customers. Our selling prices also incorporate a wheel weight price component which is based on customer product specifications. We estimate the variable consideration using the “most likely” amount estimation approach. Changes in aluminum prices are monitored and revenue is adjusted as changes in the aluminum index occur. Weights are monitored, and prices are adjusted as variations arise. Customer contract prices are generally adjusted quarterly to incorporate these price adjustments. Price adjustments due to production efficiencies are generally recognized as and when negotiated with customers. Adjustments to selling prices in 2021 and 2020 related to prior year revenues were $2.6 million and $0.7 million, respectively.

Fair Value Measurements - The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis, while other assets and liabilities are measured at fair value on a nonrecurring basis, such as when we have an asset impairment. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

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Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Our derivatives are over-the-counter customized derivative transactionsinstruments and are not exchange traded. We estimate the fair value of these instruments using industry-standardthe income valuation models such as discounted cash flow. These models projectapproach. Under this approach, future cash flows are estimated and discount the future amountsdiscounted to a present value using market-based expectations for interest rates, foreign exchange rates, commodity prices and the contractual terms of the derivative instruments. The discount rate used is the relevant interbank deposit rate (e.g., LIBOR) plus an adjustment for non-performance risk.

Impairment of Goodwill – Goodwill is not amortized but is instead evaluated for impairment annually at the end of the fiscal year, or more frequently if events and circumstances indicate that impairment may be more likely than not. AsA considerable amount of December 31, 2020, there was no goodwill associated with our acquired European operations duemanagement judgment and assumptions are required in performing the quantitative impairment test, principally related to determining the impairment charges takenfair value of the reporting unit. Estimation uncertainty in 2019determining the fair value of the reporting unit primarily relates to estimation of the cash flows and weighted average cost of capital used in the income valuation approach and the first quarter of 2020.estimated EBITDA and EBITDA market multiples used in the market valuation approach, among other factors.

At March 31, 2020, the impact of the COVID-19 developments and uncertainty with respect to the economic effects of the pandemic had introduced significant volatility in the financial markets and was having and continues to have, a widespread adverse effect on the automotive industry, including reductions in both consumer demand and OEM automotive production. In response, our key customers temporarily closed

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nearly all production facilities in Europe and North America (our primary markets) during the quarter ended March 31, 2020. As a result, we concluded that impairment was more likely than not, and that an interim test of our goodwill was required. More specifically, the Company concluded that the following events and circumstances, in the aggregate, indicated that it was more likely than not that the carrying value of our European reporting unit exceeded its fair value at March 31, 2020: (1) our European reporting unit’s carrying value was effectively set to fair value at December 31, 2019, due to the $102.2 million impairment charges to goodwill and indefinite-lived intangibles, (2) lower forecasted 2020 industry production volumes for Western and Central Europe, including those for our primary European customers, due to OEM shutdowns to mitigate COVID-19 spread and subsequent reduced production levels over the remainder of the year, as compared to our prior production forecasts (including estimates used in our 2019 assessment), and (3) the volatility in financial markets that both increased European interest rates due to rising credit spreads and risk premiums and lowered median European automotive market multiples. Based on the results of our quantitative analysis, we recognized a non-cash goodwill impairment charge equal to the remaining goodwill balance of $182.6 million since the carrying value exceeded the fair value of the European reporting unit by more than the amount of the goodwill balance at March 31, 2020. This impairment was recognized at March 31, 2020 as a separate charge (together with the indefinite-lived intangible asset trade name) included in loss from operations.

We utilized both an income and a market approach, weighted 75 percent and 25 percent respectively, to determine the fair value of the European reporting unit as part of our goodwill impairment assessment. The income approach is based on projected debt-free cash flow, which is discounted to the present value using discount factors that consider the timing and risk of cash flows. The discount rate used is the weighted average of an estimated cost of equity and of debt (“weighted average cost of capital”). The weighted average cost of capital is adjusted as necessary to reflect risk associated with the business of the European reporting unit. Financial projections are based on estimated production volumes, product prices and expenses, including raw material cost, wages, energy and other expenses. Other significant assumptions include terminal value cash flow and growth rates, future capital expenditures and changes in future working capital requirements. The market approach is based on the observed ratios of enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA) of comparable, publicly traded companies. The market approach fair value is determined by multiplying historical and anticipated financial metrics of the European reporting unit by the EBITDA pricing multiples derived from comparable, publicly traded companies. 

At March 31, 2020, we determined that the carrying value of the European reporting unit exceeded its fair value by an amount greater than the remaining goodwill balance.balance and we recognized a non-cash goodwill impairment charge equal to the remaining goodwill balance of $182.6 million. The decline in fair value was primarily due to significantly lower market multiples and increased discount rates, as well as further declines in forecasted industry production volumes in Western and Central Europe as a result of the COVID-19 pandemic and consequent economic instability. Forecasted revenues, EBITDA and cash flow for the European reporting unit also declined as compared to the prior year long-range plan due to lower forecasted industry production volumes which adversely impacted fair value under both the income and market approaches. Significant assumptions used under the income approach included a weighted average cost of capital (WACC) of 12.0 percent and a long-term growth rate of 1.5 percent, as compared to 10.0 percent and 2.0 percent, respectively, used in the 2019 assessment. In determining the WACC, management considered the level of risk inherent in the cash flow projections and current market conditions, including the significant increase in credit spreads and systemic market and Company specific risk premiums. The decline in the fair value under the market approach iswas attributable to the decline in the average EBITDA market multiple (4.9X EBITDA in 2020, 5.7X EBITDA in 2019) and lower forecasted EBITDA, as compared to the 2019 assessment.The use of these unobservable inputs results in classification of the fair value estimate as a Level 3 measurement in the fair value hierarchy. A considerable amount of management judgment and assumptions are required in performing the

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quantitative impairment test, principally related to determining the fair value of the reporting unit. While the Company believes its judgments and assumptions are reasonable, different assumptions could change the estimated fair value (refer to Note 9, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” in this Annual Report for further discussion of asset impairments)..

Impairment of Intangible Assets – Intangible assets include both finite and indefinite-lived intangible assets. Finite-lived intangible assets consist of brand names, technology and customer relationships. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives (since the pattern in which the asset will be consumed cannot be reliably determined). Indefinite-lived intangible assets are not amortized but are instead evaluated for impairment annually at the end of the fiscal year, or more frequently if events and circumstances indicate that impairment may be more likely than not. Indefinite-lived intangible assets, excluding goodwill, consist of trade names associated with our aftermarket business.  Estimation uncertainty in assessing impairment of our indefinite-lived intangible asset is primarily related to the assumptions used in estimating the underlying cash flows and the discount rate used in determining fair value. In the first quarter of 2020, we recognized a non-cash impairment charge of $11.0 million related to our aftermarket trade name indefinite-lived intangible asset which was primarily attributable to a further decline in forecasted aftermarket revenues and a decline in associated profitability. As a result, there were no indefinite-lived intangible assets associated with our European operations as of December 31, 2020 (refer(refer to Note 9, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” in this Annual Report for further discussion of asset impairments).

Impairment of Long-Lived Assets - Management evaluates the recoverability and estimated remaining lives of long-lived assets whenever facts and circumstances suggest that the carrying value of the assets may not be recoverable or the useful life has changed. Estimation uncertainty in evaluating recoverability of long-lived assets within a given asset group is primarily related to the assumptions used in estimating the cash flows associated with the respective asset group, as well as the discount rate used in determining fair value in the event of an impairment. The asset group is the unit of accounting for a long-lived asset or group of long-lived assets which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other asset groups. An impairment loss occurs when the carrying value of an asset group (including the carrying value of liabilities associated with the long-lived assets within the asset group) exceeds the undiscounted cash flows expected to be realized from the use and eventual disposition of thosethe respective long-lived assets. Fair value is determined primarily by discounting the estimated expected cash flows. If the carrying amount of a long-livedan asset group is considered impaired, a loss is recordedrecognized based on the amount by which the carrying amountvalue exceeds fair value. The Company’s asset groups consist of the North American and European reporting units are separately tested for impairment on an asset group basis.reportable segments.

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Retirement Plans - Subject to certain vesting requirements, our unfunded retirement plan generally provides for a benefit based on final average compensation, which becomes payable on the employee’s death or upon attaining age 65, if retired. The net periodic pension cost and related benefit obligations are primarily based on among other things, assumptions ofregarding the discount rate and the mortality of the participants.participants, among other factors. The net periodic pension costs and related obligations are measured using actuarial techniques and assumptions (refer to Note 16, “Retirement Plans” in the Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” in this Annual Report for a description of these assumptions).

The following information illustrates the sensitivity to a change in certain assumptions of our unfunded retirement plansplan as of December 31, 2020.2021. They also may not be additive, so the impact of changing multiple factors simultaneously cannot be calculated by combining the individual sensitivities shown.

The effect of the indicated increase (decrease) in selected factors is shown below (in thousands):

ValuationIncome Taxes – The Company operates in a number of Deferred Tax Assets - The abilitygeographic locations and is subject to foreign, U.S. federal, state and local taxes applicable in each of the respective jurisdictions. These tax laws are complex and involve uncertainties in the application to our facts and circumstances that may be subject to interpretation. We recognize benefits for uncertain tax positions based on a process that requires judgment in the technical application of laws, regulations and various related judicial opinions. If an uncertain tax position is more likely than not (probability of greater than 50 percent) to be sustained upon examination, we estimate the tax benefit as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement with tax authorities. Evaluation of tax positions, their technical merits, and measurements using cumulative probability are inherently subjective estimates since they require our assessment of the probability of future outcomes. We evaluate these uncertain tax positions on a quarterly basis, including consideration of changes in circumstances, such as new regulations, recent judicial opinions or the results of recent examinations by tax authorities. Any necessary changes to our estimates are recorded in the period in which the change occurs.

As a part of our income tax provision, we must also evaluate the likelihood that we will be able to realize our deferred tax assets dependswhich is dependent on theour ability to generate sufficient taxable income in the future.future years. A valuation allowance ismust be provided for deferred income tax assets when, in our judgment, based uponon currently available information, and other factors, it is more likely than not that all or a portion of such deferred income tax assets will not be realized. The assessment regarding whether a valuation allowance is required or should be adjusted is based on an evaluation of possible sources of taxable income and considers all available positive and negative evidence, factors. including the following:

Our accounting for the valuation of deferred tax assets represents our best estimate of future events. Changes in our current estimates, due to unanticipated market conditions, governmental legislative actions or events, could have a material effect on our ability to utilize our deferred tax assets. At December 31, 2021 and 2020, total deferred tax assets were $102.1 million and $90.7 million, respectively, and valuation allowances against those deferred tax assets were $69.4 million and $46.5 million (refer to Note 14, “Income Taxes” in the

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Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” in this Annual Report for additional information).

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined in Rule 10(f)(1) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.

ITEM 8 - FINANCIAL STATEMENTSAND SUPPLEMENTARY DATA

Index to the Consolidated Financial Statements of Superior Industries International, Inc.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Superior Industries International, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Superior Industries International, Inc. and subsidiaries (the "Company") as of December 31, 20202021 and 2019,2020, the related consolidated statements of income (loss), comprehensive income (loss), shareholders' equity (deficit), and cash flows, for each of the two years in the period ended December 31, 2020,2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20202021 and 2019,2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020,2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 5, 2021,3, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill – European Reporting Unit -Income Taxes — Refer to Notes 1 and 914 to the financial statements

Critical Audit Matter Description

The Company’s evaluationCompany operates in a number of their European reporting unit (“Europe”) goodwill for impairment involves the comparisongeographic locations and is subject to foreign, U.S. federal, state and local taxes applicable to each of the fair valuerespective jurisdictions. Determining the provision for income taxes, the realizability of the reporting unit to its carrying value. Fair value of the reporting unit is estimated based on a combination of discounted cash flowsdeferred tax assets and the userecognition and measurement of pricing multiples. The determination of fair value using the discounted cash flow modeltax positions requires management to make significant estimatesassumptions and assumptionsjudgments regarding the application of complex tax laws and regulations as well as projected future taxable income, eligible carry forward periods, and tax planning strategies.

The Company recorded an income tax provision of $7.4 million for the year ended December 31, 2021 and net deferred tax assets of $23.8 million, net of a valuation allowance of $69.4 million, and unrecognized tax benefits and related to forecastsinterest and penalties of future revenues, operating margins, earnings before interest,$22.2 million as of December 31, 2021. Accounting for income taxes depreciation, and amortization (EBITDA), capital expenditures and the discount rate. The determination of fair value using pricing multiples requires management to make significant assumptions derived from analysisand judgments. Performing audit procedures to evaluate the reasonableness of the EBITDA pricing multiples of comparable, publicly traded companies.

As a result of the Company’s interim goodwill impairment test in the first quarter of 2020, management determined that the carrying value of Europe exceeded its fair value by an amount greater than the remaining goodwill balance. As such, the Company recorded a non-cash goodwill impairment charge of $182.6 million in 2020 associated with Europe.  Changes in thesemanagement’s assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both. The Company’s goodwill balance was $0 as of December 31, 2020 after the impairment.

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We identified goodwill for Europe as a critical audit matter because of the significant estimates and assumptions made by management to estimate the fair value of Europe and the difference between its fair value and carrying value. Thisjudgments required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future revenues, operating margins, EBITDA and the selection of the discount rate.income tax specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to forecaststhe provision for income taxes, the realizability of future revenues, operating margins, and EBITDA (collectively, the “forecasts”)deferred tax assets and the selectionrecognition and measurement of the discount ratetax positions included the following which were performed with the assistance of our income tax specialists, among others:

/s/ Deloitte & Touche LLP

Detroit, Michigan

March 5, 20213, 2022

We have served as the Company's auditor since 2009.2009.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Superior Industries International, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Superior Industries International, Inc. and subsidiaries (the “Company”) as of December 31, 2020,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2020,2021, of the Company and our report dated March 5, 2021,3, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Detroit, Michigan  

March 5, 20213, 2022  

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Dollars in thousands, except per share data)

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

34

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

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

35

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)