EX-99.1 2 l27298aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS SECOND-QUARTER 2007 RESULTS
Company Reaffirms Full-Year 2007 Earnings Outlook of $0.45 to $0.55 Per Diluted Share
WARREN, Ohio — August 1, 2007 — Stoneridge, Inc. (NYSE: SRI) today announced net sales of $183.8 million and net income of $2.7 million, or $0.11 per diluted share, for the second quarter ended June 30, 2007.
Net sales decreased $1.7 million, or 1.0 percent, to $183.8 million, compared with $185.5 million for the second quarter of 2006. The decrease in sales was primarily due to lower North American medium- and heavy-duty truck and light vehicle production. The declines were offset by new product launches and increased European commercial vehicle production. The effect of foreign currency translation increased second-quarter net sales by approximately $3.7 million compared with the same period in 2006.
Net income for the second quarter was $2.7 million, or $0.11 per diluted share, compared with net income of $4.9 million, or $0.21 per diluted share, in the second quarter of 2006. The decrease in net income was primarily attributable to increased design and development investment and inefficiencies related to new product launches. These unfavorable variances were offset by higher earnings from the Company’s 50 percent equity interest in its PST Electronica joint venture and the sale of two closed facilities.
“Our new product launches and European market exposure mitigated the substantial decline in North American medium- and heavy-duty truck production,” said John C. Corey, president and chief executive officer. “We generated positive operating cash flow in the quarter and remain focused on continuing this trend in the second half of 2007.”
For the six months ended June 30, 2007, net sales were $368.8 million, an increase of 1.0 percent compared with $365.1 million for the six months ended July 1, 2006. Net income for the 2007 period was $7.6 million, or $0.32 per diluted share, compared with $8.7 million, or $0.38 per diluted share, in the comparable 2006 period.
Net cash provided by operating activities for the six months ended June 30, 2007 was $2.2 million, compared with net cash provided of $12.2 million for the corresponding period ended July 1, 2006. The decrease of $10.0 million in cash provided by operating activities was primarily due to lower accounts payable variances relative to the previous year. The Company’s 2007 second-quarter accounts payable balance was consistent with the prior year’s second-quarter level. However, the year-end 2006 figure was considerably higher than the year-end 2005 figure, resulting in a cash outflow during the first quarter of 2007 compared with the substantial cash inflow during the first quarter of 2006.
Outlook
“Based upon our first-half performance and the current industry forecasts, we are maintaining our previously issued guidance for full-year 2007 earnings of $0.45 to $0.55 per diluted share,” Corey said. “We have instituted several cost savings programs to improve our efficiency and cost structure.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2007 second-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, August 1, 2007, at www.stoneridge.com, which will also offer a webcast replay.
-more-

 

 

2

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 2006 were approximately $709 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

-more-

 

3

STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                 
    (unaudited)  
    Three Months Ended     Six Months Ended  
    June 30,     July 1,     June 30,     July 1,  
    2007     2006     2007     2006  
Net Sales
   $ 183,802     $ 185,499     $ 368,830     $ 365,133  
 
                                
Costs and Expenses:
                                
Cost of goods sold
     144,920       141,504       287,101       280,447  
Selling, general and administrative
     33,629       31,151       66,802       62,971  
(Gain) Loss on sale of property, plant and equipment, net
     (1,653 )     20       (1,688 )     (1,469 )
 
                        
 
                                
Operating Income
     6,906       12,824       16,615       23,184  
 
                                
Interest expense, net
     5,619       5,833       11,103       11,752  
Equity in earnings of investees
     (2,298 )     (1,550 )     (4,418 )     (2,966 )
Other loss, net
     224       1,745       512       1,750  
 
                        
 
                                
Income Before Income Taxes
     3,361       6,796       9,418       12,648  
 
                                
Provision for income taxes
     666       1,906       1,853       3,993  
 
                        
 
                                
Net Income
   $ 2,695     $ 4,890     $ 7,565     $ 8,655  
 
                        
 
                                
Basic net income per share
   $ 0.12     $ 0.21     $ 0.33     $ 0.38  
 
                        
Basic weighted average shares outstanding
     23,114       22,861       23,052       22,824  
 
                        
 
                                
Diluted net income per share
   $ 0.11     $ 0.21     $ 0.32     $ 0.38  
 
                        
Diluted weighted average shares outstanding
     23,701       22,902       23,621       22,884  
 
                        

-more-

 

4

STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    June 30,     December 31,  
    2007     2006  
ASSETS   (Unaudited)     (Audited)  
Current Assets:
                
Cash and cash equivalents
   $ 66,066     $ 65,882  
Accounts receivable, less allowances for doubtful accounts of $5,747 and $5,243, respectively
     113,818       106,985  
Inventories, net
     57,261       58,521  
Prepaid expenses and other
     21,037       13,448  
Deferred income taxes
     8,820       9,196  
 
            
Total current assets
     267,002       254,032  
 
            
Long-Term Assets:
                
Property, plant and equipment, net
     106,016       114,586  
Other Assets:
                
Goodwill
     65,176       65,176  
Investments and other, net
     36,138       30,875  
Deferred income taxes
     36,133       37,138  
 
            
Total long-term assets
     243,463       247,775  
 
            
Total Assets
   $ 510,465     $ 501,807  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current Liabilities:
                
Accounts payable
   $ 66,499     $ 72,493  
Accrued expenses and other
     46,597       45,624  
 
            
Total current liabilities
     113,096       118,117  
 
            
Long-Term Liabilities:
                
Long-term debt
     200,000       200,000  
Deferred income taxes
     1,921       1,923  
Other liabilities
     3,695       3,145  
 
            
Total long-term liabilities
     205,616       205,068  
 
            
 
                
Shareholders’ Equity:
                
Preferred Shares, without par value, authorized 5,000 shares, none issued
     —       —  
Common Shares, without par value, authorized 60,000 shares, issued 24,582 and 23,990 shares and outstanding 24,224 and 23,804 shares, respectively, with no stated value
     —       —  
Additional paid-in capital
     152,754       150,078  
Common Shares held in treasury, 358 and 186 shares, respectively, at cost
     (369 )     (151 )
Retained earnings
     29,266       21,701  
Accumulated other comprehensive income
     10,102       6,994  
 
            
Total shareholders’ equity
     191,753       178,622  
 
            
Total Liabilities and Shareholders’ Equity
   $ 510,465     $ 501,807  
 
            
-more-

 

 

5

STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    (unaudited)  
    Six Months Ended  
    June 30,     July 1,  
    2007     2006  
OPERATING ACTIVITIES:
                
Net cash provided by operating activities
   $ 2,171     $ 12,215  
 
            
 
                
INVESTING ACTIVITIES:
                
Capital expenditures
     (8,966 )     (13,150 )
Proceeds from sale of property, plant and equipment
     4,951       2,266  
Business acquisitions and other
     —       (673 )
 
            
Net cash used for investing activities
     (4,015 )     (11,557 )
 
            
 
                
FINANCING ACTIVITIES:
                
Repayments of long-term debt
     —       (44 )
Share-based compensation activity, net
     1,796       13  
Other financing costs
     —       (150 )
 
            
Net cash provided by (used for) financing activities
     1,796       (181 )
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     232       1,730  
 
            
 
                
Net change in cash and cash equivalents
     184       2,207  
 
                
Cash and cash equivalents at beginning of period
     65,882       40,784  
 
            
 
                
Cash and cash equivalents at end of period
   $ 66,066     $ 42,991  
 
            
###