EX-99.1 2 l29860aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS IMPROVED 4TH-QUARTER AND FULL-YEAR 2007 RESULTS
• Fourth-quarter Net Income up Dramatically on 8.3% Sales Increase
• Full-year 2007 Net Income per Diluted Share Increases to $0.71, up 12.7% from 2006
WARREN, Ohio – January 31, 2008 – Stoneridge, Inc. (NYSE: SRI) today announced net sales of
$185.5 million and net income of $6.5 million, or $0.28 per diluted share, for the fourth quarter ended December 31, 2007.
Net sales increased $14.3 million, or 8.3 percent, to $185.5 million, compared with $171.2 million for the fourth quarter of 2006.
Net income for the fourth quarter was $6.5 million, or $0.28 per diluted share, compared with $1.5 million, or $0.06 per diluted share, in the fourth quarter of 2006.
The improvement in fourth-quarter results was primarily attributable to new program sales of electronics in Europe and North America and a more favorable sales mix in the Company’s North America electronics business. These improvements were accomplished in spite of the approximate 42% fourth-quarter decline in the medium- and heavy-duty truck market in North America.
“The 2007 results reflect our organization’s responsiveness to meeting the challenges of the market, especially the decline in the North America commercial vehicle market, and our continuing focus on improving the operating performance of the Company,” said John C. Corey, president and chief executive officer. “We made significant progress in improving our profitability and generating cash in 2007. We look forward to continuing the execution of our operating and restructuring plan in 2008.”
For the year ended December 31, 2007, net sales were $727.1 million, an increase of $18.4 million compared with $708.7 million for the year ended December 31, 2006. The improvement in net sales was predominantly attributable to new activity in the Company’s European and North American commercial vehicle businesses and emissions sensing in our North American light vehicle business and favorable foreign exchange translation. These improvements were partially offset by lower medium- and heavy-duty truck production volume in the North American market. Net income for 2007 was $16.7 million, a 14.9% increase from net income of $14.5 million in 2006. Net income per diluted share increased 12.7% to $0.71 in 2007, compared with $0.63 per diluted share in 2006.
Full-year 2007 net income includes pre-tax restructuring expense of approximately $1.0 million for the Company’s previously announced restructuring initiatives. Stoneridge began these initiatives in the fourth quarter of 2007 and expects to substantially complete them by the fourth quarter of 2008. The Company anticipates incurring total pre-tax charges of approximately $9.0 million to $13.0 million in 2008 for the restructuring after the expected benefit of a facility sale. Stoneridge expects to generate annual savings of $8.0 million to $12.0 million beginning in 2009 as a result of these initiatives.
Net cash provided by operating activities for the year ended December 31, 2007 was $33.5 million, compared with $46.5 million for the year ended December 31, 2006. The decrease in cash provided by operating activities was primarily due to higher working capital requirements related to an increase in sales in the electronics segment to customers with contractually longer payment terms.
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Outlook
Because of the previously announced IPO transaction filing of the Company’s PST Eletrônica S.A. joint venture in Brazil, Stoneridge is not providing earnings guidance for the year 2008 at this time due to the volatility and uncertainty in the capital and equity markets. “For 2008, we expect to continue making the progress that we exhibited during 2007 with our previously announced restructuring plans,” Corey said.
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2007 fourth-quarter results can be accessed at 11 a.m. Eastern time on Thursday, January 31, 2008, at www.stoneridge.com, which will also offer a webcast replay.
About Stoneridge, Inc.
Stoneridge, Inc., headquartered in Warren, Ohio, is an 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. 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:
Kenneth A. Kure, Corporate Treasurer and Director of Corporate Finance
330/856-2443
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                 
    For the Three Months     For the Fiscal Years  
    Ended December 31,     Ended December 31,  
    2007     2006     2007     2006  
    (Unaudited)     (Unaudited)     (Unaudited)     (Audited)  
Net Sales
   $ 185,476     $ 171,215     $ 727,120     $ 708,699  
 
                                
Costs and Expenses:
                                
Cost of goods sold
     137,352       135,174       559,397       549,793  
Selling, general and administrative
     34,561       32,956       133,614       124,302  
Provision for doubtful accounts, net
     12       (308 )     94       236  
(Gain) loss on sale of property, plant and equipment, net
     (245 )     151       (1,710 )     (1,303 )
Restructuring charges
     852       454       926       608  
 
                        
 
                                
Operating Income
     12,944       2,788       34,799       35,063  
 
                                
Interest expense, net
     5,189       4,282       21,759       21,744  
Equity in earnings of investees
     (2,969 )     (2,321 )     (10,893 )     (7,125 )
Other (income) loss, net
     (76 )     (892 )     709       805  
 
                        
 
                                
Income Before Income Taxes
     10,800       1,719       23,224       19,639  
 
                                
Provision for income taxes
     4,319       269       6,553       5,126  
 
                        
 
                                
Net Income
   $ 6,481     $ 1,450     $ 16,671     $ 14,513  
 
                        
 
                                
Basic net income per share
   $ 0.28     $ 0.06     $ 0.72     $ 0.63  
 
                        
Basic weighted average shares outstanding
     23,215       22,930       23,133       22,866  
 
                        
 
                                
Diluted net income per share
   $ 0.28     $ 0.06     $ 0.71     $ 0.63  
 
                        
Diluted weighted average shares outstanding
     23,524       23,248       23,548       23,161  
 
                        
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    December 31,  
    2007     2006  
    (Unaudited)     (Audited)  
ASSETS
                
 
                
Current Assets:
                
Cash and cash equivalents
   $ 95,924     $ 65,882  
Accounts receivable, less allowances for doubtful accounts and other reserves of $4,736 and $5,243, respectively
     122,288       106,985  
Inventories, net
     57,392       58,521  
Prepaid expenses and other
     15,926       13,448  
Deferred income taxes
     9,829       9,196  
 
            
Total current assets
     301,359       254,032  
 
            
 
                
Long-Term Assets:
                
Property, plant and equipment, net
     92,752       114,586  
Other Assets:
                
Goodwill
     65,176       65,176  
Investments and other, net
     39,454       30,875  
Deferred income taxes
     29,028       37,138  
 
            
Total long-term assets
     226,410       247,775  
 
            
Total Assets
   $ 527,769     $ 501,807  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
Current Liabilities:
                
Accounts payable
   $ 69,373     $ 72,493  
Accrued expenses and other
     47,198       45,624  
 
            
Total current liabilities
     116,571       118,117  
 
            
 
                
Long-Term Liabilities:
                
Long-term debt
     200,000       200,000  
Deferred income taxes
     2,665       1,923  
Other liabilities
     2,344       3,145  
 
            
Total long-term liabilities
     205,009       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 24,601 and 23,990 shares and outstanding 24,209 and 23,804 shares, respectively, with no stated value
     —       —  
Additional paid-in capital
     154,173       150,078  
Common Shares held in treasury, 392 and 186 shares, respectively, at cost
     (383 )     (151 )
Retained earnings
     38,372       21,701  
Accumulated other comprehensive income
     14,027       6,994  
 
            
Total shareholders’ equity
     206,189       178,622  
 
            
Total Liabilities and Shareholders’ Equity
   $ 527,769     $ 501,807  
 
            
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    For the Fiscal Years  
    Ended December 31,  
    2007     2006  
    (Unaudited)     (Audited)  
OPERATING ACTIVITIES:
                
Net cash provided by operating activities
   $ 33,525     $ 46,540  
 
            
 
                
INVESTING ACTIVITIES:
                
Capital expenditures
     (18,141 )     (25,895 )
Proceeds from sale of fixed assets
     12,315       2,266  
Proceeds from sale of partnership interest
     —       1,153  
Business acquisitions and other
     —       (2,133 )
 
            
Net cash used for investing activities
     (5,826 )     (24,609 )
 
            
 
                
FINANCING ACTIVITIES:
                
Repayments of long-term debt
     —       (44 )
Share-based compensation activity
     2,119       301  
Other financing costs
     (1,219 )     (150 )
 
            
Net cash provided by financing activities
     900       107  
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     1,443       3,060  
 
            
 
                
Net change in cash and cash equivalents
     30,042       25,098  
 
                
Cash and cash equivalents at beginning of period
     65,882       40,784  
 
            
 
                
Cash and cash equivalents at end of period
   $ 95,924     $ 65,882  
 
            
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