A combination of lower aluminum prices, weaker unit volumes in North America due to its concentrated exposure to certain General Motor platforms (23% of last twelve-month sales ended June 30, 2023), and weaker demand for aftermarket wheels in Europe resulted in lower revenue. Still, EBITDA margins were modestly better due to negotiated cost recoveries and higher value-added content per wheel sold. We expected margins to contract, but energy costs in Europe were more modest than expected despite the ongoing conflict in Ukraine. We expect this will occur as Superior's operating efficiencies at its plants improve and original equipment manufacturer (OEM) production environment stabilizes. We expect 5.2x debt to EBITDA and 3.5% free operating cash flow (FOCF) to debt this year.
