EX-99.1 2 l28632aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS SECOND-QUARTER 2007 RESULTS
•     Net sales of $172.8 million, EPS of $0.11
•     Company reaffirms full-year guidance of $0.45 to $0.55 per diluted share
•     Announces restructuring actions
WARREN, Ohio — November 2, 2007 — Stoneridge, Inc. (NYSE: SRI) today announced net sales of $172.8 million and net income of $2.6 million, or $0.11 per diluted share, for the third quarter ended September 30, 2007.
Net sales increased $0.4 million, or less than 1.0 percent, to $172.8 million, compared with $172.4 million for the third quarter of 2006. The increase was attributable to new product launches and favorable foreign currency translation. The effect of foreign currency translation increased third-quarter net sales by approximately $3.2 million compared with the same period in 2006. These favorable factors were offset by lower medium- and heavy-duty truck production in North America.
Net income for the third quarter was $2.6 million, or $0.11 per diluted share, compared with net income of $4.4 million, or $0.19 per diluted share, in the third quarter of 2006. The decrease in net income was primarily attributable to the non-recurrence of a $1.2 million one-time gain related to the settlement of the life insurance benefits portion of a postretirement benefit plan realized in the third quarter of 2006, along with increased design and development expenses. These unfavorable variances were partially offset by higher earnings from the Company’s fifty percent equity interest in its PST Indústria Eletrônica da Amazônia Ltda. joint venture in Brazil and a lower effective tax rate.
“The contribution from our new business awards helped Stoneridge generate positive earnings in a demanding operating environment in North America,” said John C. Corey, president and chief executive officer. “Our revenues were slightly above the prior year despite a greater than 40 percent decline in North American medium- and heavy-duty truck production during the quarter.”
For the nine months ended September 30, 2007, net sales were $541.6 million, an increase of 1.0 percent compared with $537.5 million for the nine months ended September 30, 2006. Net income for the 2007 nine-month period was $10.2 million, or $0.43 per diluted share, compared with $13.1 million, or $0.56 per diluted share, in the comparable 2006 period.
Net cash provided by operating activities for the nine months ended September 30, 2007 was $7.9 million, compared with net cash provided of $22.6 million for the corresponding period ended September 30, 2006. The decrease of $14.7 million in cash provided by operating activities was primarily due to lower earnings and a larger investment in working capital.
-more-

 

  2

Restructuring
Stoneridge also announced plans to improve its efficiency and cost position by ceasing manufacturing operations at its Sarasota, Florida and Mitcheldean, England locations. The Company will begin these initiatives in the fourth quarter of 2007 and expects to complete them by the fourth quarter of 2008. Fourth-quarter expenses related to these actions are expected to result in pretax charges of $1.0 million and the Company anticipates incurring total pretax restructuring charges of approximately $9.0-13.0 million after the expected benefit of a facility sale. Stoneridge expects to generate annual savings of $8.0-12.0 million by 2009 as a result of these initiatives.
“While these actions are not a reflection of our employees’ performance at these locations, neither plant has a reasonable cost profile to sustain manufacturing operations. The cessation of manufacturing at these sites will be another step consistent with the need to reduce overhead and SG&A to improve Stoneridge’s cost base and effectively compete in the global marketplace,” said Corey.
Outlook
The Company reaffirmed its previously issued guidance for full-year 2007 earnings of $0.45 to $0.55 per diluted share.
“We expect the North American medium- and heavy-duty production environment will remain challenging for the remainder of the year,” Corey said. “Stoneridge will stay vigilant in its cost-reduction efforts and will continue to aggressively respond to market conditions to meet our full-year earnings expectations.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2007 third-quarter results can be accessed at 11 a.m. Eastern time on Friday, November 2, 2007, 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 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     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Net Sales
   $ 172,814     $ 172,351     $ 541,644     $ 537,484  
 
                                
Costs and Expenses:
                                
Cost of goods sold
    134,944       134,173       422,045       414,619  
Selling, general and administrative
     32,407       29,074       99,209       92,044  
(Gain) Loss on sale of property, plant and equipment, net
     223       15       (1,465 )     (1,454 )
 
                        
 
                                
Operating Income
     5,240       9,089       21,855       32,275  
 
                                
Interest expense, net
     5,467       5,710       16,570       17,462  
Equity in earnings of investees
     (3,506 )     (1,838 )     (7,924 )     (4,804 )
Other (income) loss, net
     273       (55 )     785       1,697  
 
                        
 
                                
Income Before Income Taxes
     3,006       5,272       12,424       17,920  
 
                                
Provision for income taxes
     381       866       2,234       4,857  
 
                        
 
                                
Net Income
   $ 2,625     $ 4,406     $ 10,190     $ 13,063  
 
                        
 
                                
Basic net income per share
   $ 0.11     $ 0.19     $ 0.44     $ 0.57  
 
                        
Basic weighted average shares outstanding
     23,213       22,880       23,106       22,833  
 
                        
 
                                
Diluted net income per share
   $ 0.11     $ 0.19     $ 0.43     $ 0.56  
 
                        
Diluted weighted average shares outstanding
     23,694       23,396       23,656       23,250  
 
                        
-more-

 

4

STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    September 30,     December 31,  
    2007     2006  
    (Unaudited)     (Audited)  
ASSETS
               
 
                
Current Assets:
                
Cash and cash equivalents
   $ 67,649     $ 65,882  
Accounts receivable, less allowances for doubtful accounts and other reserves of $5,521 and $5,243, respectively
     123,916       106,985  
Inventories, net
     57,591       58,521  
Prepaid expenses and other
     19,925       13,448  
Deferred income taxes
     9,305       9,196  
 
            
Total current assets
     278,386       254,032  
 
            
 
                
Long-Term Assets:
                
Property, plant and equipment, net
     102,378       114,586  
Other Assets:
                
Goodwill
     65,176       65,176  
Investments and other, net
     40,317       30,875  
Deferred income taxes
     36,896       37,138  
 
            
Total long-term assets
     244,767       247,775  
 
            
Total Assets
   $ 523,153     $ 501,807  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
Current Liabilities:
                
Accounts payable
   $ 65,753     $ 72,493  
Accrued expenses and other
     53,949       45,624  
 
            
Total current liabilities
     119,702       118,117  
 
            
Long-Term Liabilities:
                
Long-term debt
     200,000       200,000  
Deferred income taxes
     2,030       1,923  
Other liabilities
     3,800       3,145  
 
            
Total long-term liabilities
     205,830       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 24,599 and 23,990 shares and outstanding 24,227 and 23,804 shares, respectively, with no stated value
     —       —  
Additional paid-in capital
     153,585       150,078  
Common Shares held in treasury, 373 and 186 shares, respectively, at cost
     (383 )     (151 )
Retained earnings
     31,891       21,701  
Accumulated other comprehensive income
     12,528       6,994  
 
            
Total shareholders’ equity
     197,621       178,622  
 
            
Total Liabilities and Shareholders’ Equity
   $ 523,153     $ 501,807  
 
            
-more-

 

5

STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    (unaudited)  
    Nine Months Ended  
    September 30,  
    2007     2006  
OPERATING ACTIVITIES:
                
Net cash provided by operating activities
     7,909       22,610  
 
            
 
                
INVESTING ACTIVITIES:
                
Capital expenditures
     (14,259 )     (19,794 )
Proceeds from sale of property, plant and equipment
     5,042       2,266  
Business acquisitions and other
     —       (668 )
 
            
Net cash used for investing activities
     (9,217 )     (18,196 )
 
            
 
                
FINANCING ACTIVITIES:
                
Repayments of long-term debt
     —       (44 )
Share-based compensation activity, net
     1,956       47  
Other financing costs
     —       (150 )
 
            
Net cash provided by (used for) financing activities
     1,956       (147 )
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     1,119       1,679  
 
            
 
                
Net change in cash and cash equivalents
     1,767       5,946  
 
                
Cash and cash equivalents at beginning of period
     65,882       40,784  
 
            
 
                
Cash and cash equivalents at end of period
   $ 67,649     $ 46,730  
 
            
###