EX-99.1 2 l20110aexv99w1.htm EX-99.1 PRESS RELEASE EX-99.1 Press Release
 

Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS FIRST-QUARTER 2006 RESULTS
WARREN, Ohio — May 2, 2006 — Stoneridge, Inc. (NYSE: SRI) today announced net sales of $179.6 million and net income of $3.8 million, or $0.16 per diluted share, for the first quarter ended April 1, 2006.
Net sales decreased $1.2 million, or 0.7 percent, to $179.6 million, compared with $180.8 million for the first quarter of 2005. The decrease in sales was primarily due to the impact of foreign currency translation, unfavorable North American light vehicle production mix and product price reductions, slightly offset by an increase in production by the Company’s commercial vehicle customers. The effect of foreign currency translation reduced first-quarter net sales by approximately $4.0 million compared with the same period in 2005.
Net income for the first quarter was $3.8 million, or $0.16 per diluted share, compared with net income of $4.4 million, or $0.19 per diluted share, in the first quarter of 2005. The decrease in net income was primarily attributable to unfavorable material price variances resulting from raw material price increases, continued operating inefficiencies at some of the Company’s facilities in Mexico, and product price reductions. These factors were largely mitigated by lower restructuring expenses, an asset sale gain, and increased equity earnings from the Company’s PST joint venture.
“Our first-quarter results represent progress toward our goal of operational excellence. First-quarter earnings showed sequential improvement from our results for the second half of 2005,” said John C. Corey, president and chief executive officer. “We are not satisfied with our current performance levels and will continue to work diligently to build upon our first-quarter progress. Our focus for 2006 is to continue the pursuit of bringing Stoneridge back to operational and financial excellence.”
Net cash provided by operating activities for the quarter ended April 1, 2006 was $6.2 million, compared with net cash use of $(5.3) million for the quarter ended April 2, 2005. The increase of $11.5 million in cash provided by operating activities was primarily due to improvements in working capital management in the areas of accounts payable and accrued expenses. The cash provided from accounts payable resulted from better matching of the Company’s accounts receivable and accounts payable in the quarter compared with the prior year.
Outlook
“The rapid pace of change in the North American automotive industry continues to accelerate. Our response to this challenge is to remain committed to improving our financial performance in 2006 through focused operational efforts and improved working capital management,” Corey said. “Our current expectation is that robust demand in the global commercial vehicle market will mitigate the softness in the North American light vehicle market in 2006.”
Based on the current industry outlook, the Company reaffirms its previously issued full-year 2006 earnings outlook of $0.30 to $0.40 per diluted share.
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2006 first-quarter results can be accessed at 11 a.m. Eastern time on Tuesday, May 2, 2006, at www.stoneridge.com, which will also offer a webcast replay.
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About Stoneridge, Inc.
Stoneridge, Inc., headquartered in Warren, Ohio, is a leading independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the automotive, medium- and heavy-duty truck, agricultural and off-highway vehicle markets. Net sales in 2005 were approximately $672 million. Additional information about Stoneridge can be found at www.stoneridge.com.
Forward-Looking Statements
Statements in this release that are not historical fact are forward-looking statements, which involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied in this release. Things that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of a major customer; a significant change in automotive, medium- and heavy-duty truck or agricultural and off-highway vehicle production; a significant change in general economic conditions in any of the various countries in which the Company operates; labor disruptions at the Company’s facilities or at any of the Company’s significant customers or suppliers; the ability of the Company’s suppliers to supply the Company with parts and components at competitive prices on a timely basis; customer acceptance of new products; and the failure to achieve successful integration of any acquired company or business. In addition, this release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Further information concerning issues that could materially affect financial performance related to forward-looking statements contained in this release can be found in the Company’s periodic filings with the Securities and Exchange Commission.
For more information, contact:
Greg Fritz, Director of Corporate Finance and Investor Relations
330/856-2443
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                 
    (Unaudited)  
    For the Thirteen Weeks Ended  
    April 1,     April 2,  
    2006     2005  
Net Sales
   $ 179,634     $ 180,827  
Costs and Expenses:
                
Cost of goods sold
     138,942       135,592  
Selling, general and administrative
     31,240       30,372  
Provision for doubtful accounts
     355       16  
Gain on sale of fixed assets
     (1,489 )     —  
Restructuring charges
     224       2,126  
 
            
Operating Income
     10,362       12,721  
Interest expense, net
     5,919       5,989  
Equity in earnings of investees
     (1,416 )     (732 )
Other (income) loss, net
     7       (197 )
 
            
Income Before Income Taxes
     5,852       7,661  
Provision for income taxes
     2,085       3,292  
 
            
Net Income
   $ 3,767     $ 4,369  
 
            
Basic net income per share
   $ 0.17     $ 0.19  
 
            
Basic weighted average shares outstanding
     22,766       22,683  
 
            
Diluted net income per share
   $ 0.16     $ 0.19  
 
            
Diluted weighted average shares outstanding
     22,884       22,891  
 
            
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    April 1,     December 31,  
    2006     2005  
    (Unaudited)     (Audited)  
ASSETS
                
 
                
Current Assets:
                
Cash and cash equivalents
   $ 41,774     $ 40,784  
Accounts receivable
     121,434       100,362  
Inventories, net
     55,139       53,791  
Prepaid expenses and other
     14,842       14,490  
Deferred income taxes
     9,352       9,253  
 
            
Total current assets
     242,541       218,680  
 
            
Property, Plant and Equipment, net
     113,170       113,478  
Other Assets:
                
Goodwill
     65,176       65,176  
Investments and other, net
     29,372       26,491  
Deferred income taxes
     38,600       39,213  
 
            
Total Assets
   $ 488,859     $ 463,038  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
                
Current Liabilities:
                
Current portion of long-term debt
   $ —     $ 44  
Accounts payable
     68,788       55,344  
Accrued expenses and other
     53,016       46,603  
 
            
Total current liabilities
     121,804       101,991  
 
            
Long-Term Liabilities:
                
Long-term debt, net of current portion
     200,000       200,000  
Other liabilities
     7,693       7,056  
 
            
Total long-term liabilities
     207,693       207,056  
 
            
Total shareholders’ equity
     159,362       153,991  
 
            
Total Liabilities and Shareholders’ Equity
   $ 488,859     $ 463,038  
 
            
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    (Unaudited)  
    For the Thirteen Weeks Ended  
    April 1,     April 2,  
    2006     2005  
         
OPERATING ACTIVITIES:
                
Net cash provided (used) by operating activities
   $ 6,221     $ (5,335 )
 
            
 
                
INVESTING ACTIVITIES:
                
Capital expenditures
     (6,563 )     (4,054 )
Proceeds from sale of fixed assets
     2,266       —  
Business acquisitions and other
     (1,034 )     —  
 
            
Net cash used by investing activities
     (5,331 )     (4,054 )
 
            
 
                
FINANCING ACTIVITIES:
                
Repayments of long-term debt
     (44 )     (37 )
Share-based compensation activity
     (69 )     42  
Other financing costs
     (150 )     —  
 
            
Net cash (used) provided by financing activities
     (263 )     5  
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     363       (631 )
 
            
 
                
Net change in cash and cash equivalents
     990       (10,015 )
 
                
Cash and cash equivalents at beginning of period
     40,784       52,332  
 
            
 
                
Cash and cash equivalents at end of period
   $ 41,774     $ 42,317  
 
            
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