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):  May 27, 2011

Stoneridge, Inc.

(Exact name of registrant as specified in its charter)

Ohio	001-13337	34-1598949
(State of other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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

N/A

(Former name or former address, if changed since last report.)

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.

Effective January 1, 2011, Stoneridge, Inc. (the “Company”) elected to change the method of valuing inventories for certain U.S. businesses to the first-in, first-out (“FIFO”) method, while in prior years, these inventories were valued using the last-in, first-out method.  As a result of this change in accounting principle, all inventories are valued using the FIFO method.  The Company believes the change is preferable as it conforms the Company’s inventory costing methods for all inventories to a single method and improves comparability with industry peers.  The FIFO method also better reflects current acquisition cost of those inventories on the consolidated balance sheets.  The Company has applied this change in method of inventory costing retrospectively to prior periods in accordance with accounting principles relating to accounting changes. 

For informational purposes, included in Exhibit 99.1 to this Current Report on Form 8-K are historical unaudited consolidated balance sheets as of December 31, 2010 and 2009, and the related unaudited consolidated statements of operations and cash flows for the three years ended December 31, 2010 that apply the new accounting method retrospectively.

ITEM 9.01 Financial Statements and Exhibits.

(c)           Exhibits

Exhibit No.  Description

99.1 Consolidated Financial Statements, as adjusted (Unaudited).

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:  May 27, 2011	/s/ George E. Strickler
	George E. Strickler, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

EX-99.1

Exhibit 99.1

Consolidated Balance Sheets, as Adjusted
(Unaudited)
As of December 31 (in thousands)	2010			2009
ASSETS
Current assets:
Cash and cash equivalents	$	71,974		$	91,907
Accounts receivable, less reserves of $2,013 and $2,350, respectively		102,600			81,272
Inventories, net		54,959			42,654
Prepaid expenses and other current assets		20,443			19,320
Total current assets		249,976			235,153
Long-term assets:
Property, plant and equipment, net		76,576			76,991
Investments and other long-term assets, net		60,184			54,864
Total long-term assets		136,760			131,855
Total assets	$	386,736		$	367,008
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	68,341		$	50,947
Accrued expenses and other current liabilities		44,442			38,900
Total current liabilities		112,783			89,847
Long-term liabilities:
Long-term debt		167,903			183,431
Other long-term liabilities		14,831			17,263
Total long-term liabilities		182,734			200,694
Shareholders' equity
Preferred shares, without par value, authorized 5,000 shares, none issued		-			-
Common shares, without par value, authorized 60,000 shares, issued 25,994 and
25,301 shares and outstanding 25,393 and 25,000 shares, respectively,
with no stated value		-			-
Additional paid-in capital		161,587			158,748
Common shares held in treasury, 601 and 301 shares, respectively, at cost		(1,118	)		(292	)
Accumulated deficit		(77,620	)		(89,150	)
Accumulated other comprehensive income		4,062			2,669
Total Stoneridge Inc. and subsidiaries shareholders' equity		86,911			71,975
Noncontrolling interest		4,308			4,492
Total shareholders' equity		91,219			76,467
Total liabilities and shareholders' equity	$	386,736		$	367,008

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Consolidated Statements of Operations, as Adjusted
(Unaudited)
Years ended December 31 (in thousands, except per share data)	2010			2009			2008
Net Sales	$	635,226		$	475,152		$	752,698
Costs and Expenses:
Cost of goods sold		489,670			387,420			585,799
Selling, general and administrative		122,032			106,228			144,383
Goodwill impairment charge		-			-			65,175
Operating income (loss)		23,524			(18,496	)		(42,659	)
Interest expense, net		21,780			21,965			20,575
Equity in earnings of investees		(10,346	)		(7,775	)		(13,490	)
Loss on extinguishment of debt		1,346			-			770
Other expense (income), net		(1,280	)		893			(351	)
Income (loss) before income taxes		12,024			(33,579	)		(50,163	)
Provision (benefit) for income taxes		678			(1,003	)		46,034
Net income (loss)		11,346			(32,576	)		(96,197	)
Net income (loss) attributable to noncontrolling interest		(184	)		82			-
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries	$	11,530		$	(32,658	)	$	(96,197	)
Basic net income (loss) per share	$	0.48		$	(1.38	)	$	(4.12	)
Basic weighted average shares outstanding		23,946			23,626			23,367
Diluted net income (loss) per share	$	0.47		$	(1.38	)	$	(4.12	)
Diluted weighted average shares outstanding		24,333			23,626			23,367

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Consolidated Statements of Cash Flow, as Adjusted
(Unaudited)
Years ended December 31 (in thousands)	2010			2009			2008
OPERATING ACTIVITIES:
Net income (loss)	$	11,346		$	(32,576	)	$	(96,197	)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities -
Depreciation		19,070			19,875			26,196
Amortization, including accretion of debt discount		1,129			1,053			1,320
Deferred income taxes		(778	)		(3,200	)		45,521
Earnings of equity method investees, less dividends		(4,889	)		(474	)		(9,277	)
Loss (gain) on sale of fixed assets		(42	)		219			(571	)
Share-based compensation expense, net		2,266			1,252			2,103
Loss on early extinguishment of debt		1,346			-			770
Goodwill impairment charge		-			-			65,175
Changes in operating assets and liabilities -
Accounts receivable, net		(21,012	)		16,619			20,087
Inventories, net		(12,307	)		17,508			(2,398	)
Prepaid expenses and other		(1,624	)		(3,133	)		2,656
Accounts payable		16,705			(2,111	)		(14,769	)
Accrued expenses and other		2,641			(1,208	)		1,840
Net cash provided by operating activities		13,851			13,824			42,456
INVESTING ACTIVITIES:
Capital expenditures		(18,574	)		(11,998	)		(24,573	)
Proceeds from sale of fixed assets		56			201			1,652
Business acquisitions and other		-			(5,967	)		(980	)
Net cash used for investing activities		(18,518	)		(17,764	)		(23,901	)
FINANCING ACTIVITIES:
Extinguishment of senior notes		(183,000	)		-			(17,000	)
Proceeds from issuance of senior secured notes		170,625			-			-
Proceeds from issuance of other debt		690			-			-
Repayments of other debt		(278	)		(55	)		-
Revolving credit facility borrowings		8,389			1,274			-
Revolving credit facility payments		(8,335	)		(883	)		-
Other financing costs		(1,365	)		-			-
Repurchase of shares to satisfy employee tax withholding		(826	)		-			-
Excess tax benefits from share-based compensation expense		395			-			1,322
Premiums related to early extinguishment of debt		(324	)		-			(553	)
Net cash provided by (used for) financing activities		(14,029	)		336			(16,231	)
Effect of exchange rate changes on cash and cash equivalents		(1,237	)		2,819			(5,556	)
Net change in cash and cash equivalents		(19,933	)		(785	)		(3,232	)
Cash and cash equivalents at beginning of period		91,907			92,692			95,924
Cash and cash equivalents at end of period	$	71,974		$	91,907		$	92,692
Supplemental disclosure of cash flow information:
Cash paid for interest, net	$	20,755		$	21,969		$	20,985
Cash paid for income taxes, net	$	1,213		$	2,319		$	4,466
Supplemental disclosure of non-cash financing activities:
Fair value of interest rate swap	$	(3,017	)	$	-		$	-

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