8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2006

STONERIDGE, INC.

(Exact name of registrant as specified in its charter)

Ohio	001-13337	34-1598949
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification No.)
9400 East Market Street, Warren, Ohio		44484
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (330) 856-2443

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 Results of Operations and Financial Condition.

On July 28, 2006, Stoneridge, Inc. issued a press release announcing second quarter of 2006 earnings. A copy of the press release is attached hereto as Exhibit 99.1. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressed set forth by specific reference in such a filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Stoneridge, Inc.
Date: July 28, 2006	/s/ George E. Strickler
	George E. Strickler, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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Exhibit Index

99.1 Press release dated July 28, 2006, announcing second quarter of 2006 earnings.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

STONERIDGE REPORTS SECOND-QUARTER 2006 RESULTS

• Net Income Increase of 74% from Prior Year
• Company Raises Full-Year 2006 Earnings Outlook

WARREN, Ohio – July 28, 2006 – Stoneridge, Inc. (NYSE: SRI) today announced net sales of $185.5 million and net income of $4.9 million, or $0.21 per diluted share, for the second quarter ended July 1, 2006.

Net sales increased $5.2 million, or 2.9 percent, to $185.5 million, compared with $180.3 million for the second quarter of 2005. The increase in sales was primarily due to strong demand in the Company’s commercial vehicle markets. The effect of foreign currency translation reduced second-quarter net sales by approximately $0.9 million compared with the same period in 2005.

Net income for the second quarter was $4.9 million, or $0.21 per diluted share, compared with net income of $2.8 million, or $0.12 per diluted share, in the second quarter of 2005. The increase in net income was primarily attributable to improved gross profit, lower restructuring expenses and a lower marginal tax rate. The quarter was unfavorably affected by material price variances resulting from raw material price increases and product price reductions.

“During the second quarter, we continued to demonstrate progress toward achieving our goals of operational excellence. The second-quarter results marked our first quarterly year-to-year improvement in operating earnings since the third quarter of 2004 excluding the impact of a non-cash impairment charge,” said John C. Corey, president and chief executive officer. “We expect to build upon the momentum established in the second quarter and report year-to-year earnings improvement through the remainder of the year.”

For the 26 weeks ended July 1, 2006, net sales were $365.1 million, an increase of 1.1 percent compared with $361.1 million for the 26 weeks ended July 2, 2005. Net income for the 2006 period was $8.7 million, or $0.38 per diluted share, compared with $7.2 million, or $0.31 per diluted share, in the comparable 2005 period.

Net cash provided by operating activities for the 26 weeks ended July 1, 2006 was $12.2 million, compared with net cash provided of $5.0 million for the corresponding period ended July 2, 2005. The increase of $7.2 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

“Based upon our first-half performance and the current industry forecasts, we are raising our full-year 2006 earnings outlook,” Corey said. “Our current outlook incorporates expectations that lower North American light vehicle production will be offset by continued strength in our global commercial vehicle business.”

The Company increased its full-year 2006 earnings outlook to $0.50 to $0.60 per diluted share from its previously issued full-year earnings expectation of $0.30 to $0.40 per diluted share. Full-year 2005 net income was $0.04 per diluted share.

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Conference Call on the Web

A live Internet broadcast of Stoneridge’s conference call regarding 2006 second-quarter results can be accessed at 11 a.m. Eastern time on Friday, July 28, 2006, at www.stoneridge.com, which will also offer a webcast replay.

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.

Use of Non-GAAP Financial Information

In addition to the results reported in accordance with U.S. generally accepted accounting principles (“GAAP”) included throughout this news release, the Company has provided information regarding earnings per share excluding the effects of the goodwill impairment charge recorded during the fourth quarter of 2004. The Company believes that this non-GAAP financial measure is useful to both management and investors in their analysis of the Company’s financial performance when comparing 2004 results to prior periods.

Set forth, as required by Regulation G, is a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.

Diluted EPS by quarter (unaudited):

	Q1		Q2		Q3			Q4
2006	$	0.16	$	0.21	$	—		$	—
2005	$	0.19	$	0.12	$	(0.14	)	$	(0.13	)
2004	$	0.40	$	0.41	$	0.17		$	0.21	(1)
2003	$	0.31	$	0.28	$	0.14		$	0.22

NOTE: Earnings per share for the year may not equal the sum of the four fiscal quarters earnings per share due to changes in basic and diluted shares outstanding.

(1) Reconciliation of GAAP EPS to non-GAAP measures:

	Q4 2004
EPS (GAAP)	$	(5.07	)
Goodwill impairment loss		8.11
Tax benefit related to goodwill impairment loss		(2.83	)
EPS (non-GAAP)	$	0.21

Diluted net income per share, excluding the goodwill impairment loss, was calculated by dividing net income, excluding the goodwill impairment loss, by the weighted-average of all potentially dilutive common shares that were outstanding during the periods presented. Diluted net loss per share, as reported in the Company’s Statements of Operations in accordance with GAAP, disregards the effect of potentially dilutive common shares, as a net loss causes dilutive shares to have an anti-dilutive effect.

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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						For the Twenty-Six Weeks Ended
	July 1,			July 2,			July 1,			July 2,
	2006			2005			2006			2005
Net Sales	$	185,499		$	180,307		$	365,133		$	361,134
Costs and Expenses:
Cost of goods sold		141,504			138,492			280,447			274,083
Selling, general and administrative		31,150			30,211			62,390			60,587
Provision for doubtful accounts		151			917			507			933
Loss (gain) on sale of fixed assets		20			(336	)		(1,469	)		(339	)
Restructuring charges, net		(150	)		2,014			74			4,140
Operating Income		12,824			9,009			23,184			21,730
Interest expense, net		5,833			6,048			11,752			12,037
Equity in earnings of investees		(1,550	)		(1,074	)		(2,966	)		(1,806	)
Other expense (income) net		1,745			(595	)		1,750			(792	)
Income Before Income Taxes		6,796			4,630			12,648			12,291
Provision for income taxes		1,906			1,815			3,993			5,107
Net Income	$	4,890		$	2,815		$	8,655		$	7,184
Basic net income per share	$	0.21		$	0.12		$	0.38		$	0.32
Basic weighted average shares outstanding		22,861			22,695			22,824			22,689
Diluted net income per share	$	0.21		$	0.12		$	0.38		$	0.31
Diluted weighted average shares outstanding		22,902			22,985			22,884			22,933

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STONERIDGE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	July 1,		December 31,
	2006		2005
	(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	42,991	$	40,784
Accounts receivable, net		126,793		100,362
Inventories, net		57,501		53,791
Prepaid expenses and other		15,095		14,490
Deferred income taxes		10,020		9,253
Total current assets		252,400		218,680
Property, Plant and Equipment, net		114,223		113,478
Other Assets:
Goodwill		65,176		65,176
Investments and other, net		29,908		26,491
Deferred income taxes		36,847		39,213
Total long-term assets		246,154		244,358
Total Assets	$	498,554	$	463,038
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt	$	—	$	44
Accounts payable		72,600		55,344
Accrued expenses and other		51,428		46,603
Total current liabilities		124,028		101,991
Long-Term Liabilities:
Long-term debt, net of current portion		200,000		200,000
Deferred income taxes		1,430		923
Other liabilities		6,514		6,133
Total long-term liabilities		207,944		207,056
Total shareholders’ equity		166,582		153,991
Total Liabilities and Shareholders’ Equity	$	498,554	$	463,038

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STONERIDGE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	(unaudited)
	For the Twenty-Six Weeks Ended
	July 1,			July 2,
	2006			2005
OPERATING ACTIVITIES:
Net cash provided by operating activities	$	12,215		$	4,954
INVESTING ACTIVITIES:
Capital expenditures		(13,150	)		(12,366	)
Proceeds from sale of fixed assets		2,266			1,654
Business acquisitions and other		(673	)		—
Net cash used by investing activities		(11,557	)		(10,712	)
FINANCING ACTIVITIES:
Repayments of long-term debt		(44	)		(71	)
Share-based compensation activity		13			55
Other financing costs		(150	)		—
Net cash used by financing activities		(181	)		(16	)
Effect of exchange rate changes on cash and cash equivalents		1,730			(1,988	)
Net change in cash and cash equivalents		2,207			(7,762	)
Cash and cash equivalents at beginning of period		40,784			52,332
Cash and cash equivalents at end of period	$	42,991		$	44,570

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