Shares of Superior Industries International Inc. fell more than 5 percent on Monday after the Van Nuys-based supplier of aluminum wheels to automakers said it would be late in filing its full-year financial results due to a deficiency in its internal controls.
Superior Industries lost 4.6 percent to settle at $19.06 on Monday, after falling as low as $18.80 earlier in the session. Trading was heavy at nearly seven times than the average volume.
Superior Industries said in a regulatory filing that it was unable to complete without unreasonable expense and effort "the calculations related to assessing the impairment of long-lived assets." The company also said it also wasn't able to finish management's review of its internal control over financial reporting, as is required by Section 404 of the Sarbanes-Oxley Act.
Sarbanes-Oxley, which was passed in 2002, requires that companies evaluate their internal financial controls by hiring separate external accountants to review the work of their internal auditors every year. Critics of the act have focused their attention on one provision, known as Section 404, which calls for documenting and auditing a company's internal controls.
Superior Industries said it expects to complete the remaining work in time to file its Form 10-K within 15 days. The original report was due on March 10.
On Friday, the company announced its fourth-quarter results, reporting a net loss of $19.1 million (72 cents per share), compared with income of $11.9 million (45 cents) for the same period a year earlier. A write-down of assets in the company's suspension components and wheel businesses resulted in a fourth-quarter pre-tax charge of $45.7 million ($1.03 per share). Superior's suspension components business is currently being offered for sale.
In February, Superior Industries said it would lay off more than half of its 635 manufacturing employees in a restructuring of its Van Nuys manufacturing facility to concentrate on specialty operations and be profitable at lower volumes. Superior's corporate offices and 125 corporate staff, which also are located at this facility, were not affected by the downsizing.
On Monday, the company's stock rating was downgraded by Prudential Financial to "underweight" from "neutral weight." In a research note, analyst Michael Bruynesteyn said the benefits from the company's restructuring efforts will likely accrue later than had been expected. The analyst reduced the 12-month target price to $15 from $21.
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