Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS FIRST-QUARTER 2005 RESULTS
— Net sales up 3%; earnings of $0.19 per diluted share —
— Revises full-year 2005 earnings outlook —
WARREN, Ohio – April 28, 2005 – Stoneridge, Inc. (NYSE: SRI) today announced sales of $180.8 million and net income of $4.4 million, or $0.19 per diluted share, for the first quarter ended April 2, 2005.
Net sales for the first quarter increased $4.8 million, or 3 percent, to $180.8 million, compared with $176.0 million for the first quarter of 2004. The increase in sales was primarily due to increased commercial vehicle production, which more than offset the decline in traditional domestic North American light vehicle production. The effect of foreign currency translation added approximately $1.9 million to first-quarter 2005 sales compared with the same period in 2004.
Net income for the first quarter was $4.4 million, or $0.19 per diluted share, compared with net income of $9.2 million, or $0.40 per diluted share, in the first quarter of 2004. The decrease in net income was primarily the result of the Company’s restructuring activities, price reductions, and increased product development activities.
The Company recorded a pre-tax restructuring charge of $2.1 million in the first quarter of 2005, primarily related to severance costs and asset impairment charges associated with previously announced plant consolidations. These consolidations are the result of the Company’s cost-reduction initiatives.
“Stoneridge’s North American automotive business has faced many challenges in recent months,” said Gerald V. Pisani, president and chief executive officer. “As a result, we are even more committed to our current restructuring plan, which includes the consolidation of manufacturing facilities in the high-cost regions of North America and Europe.”
Pisani added, “We are a company that invests in the future. We think beyond the quarter and beyond the year. The actions we are taking will help us improve our long-term competitive position and will allow us to deliver superior results going forward.”
Net cash used by operating activities for the first quarter of 2005 was $5.3 million, compared with net cash provided by operating activities of $6.9 million for the first quarter of 2004. The increase in cash used by operating activities was primarily due to the decrease in net income and higher uses of cash for working capital requirements.
Change in Fiscal Year End
The Company is in the process of changing from a calendar year to a 52-53 week fiscal year ending on the Saturday nearest to December 31. Beginning in 2005, the Company’s fiscal quarters are now comprised of 13-week periods ending on the Saturday nearest to March 31, June 30, September 30 and December 31. The first quarter of 2005 and 2004 ended on April 2 and March 31, respectively.
Outlook
Based on the current industry outlook, Stoneridge anticipates second-quarter 2005 net income to be in the range of $0.05 to $0.15 per diluted share, compared with $0.41 per diluted share for last year’s second quarter. In addition, the Company has revised its full-year 2005 earnings outlook to a range of $0.40 to $0.50 per diluted share, from its previously announced range of $0.95 to $1.05 per diluted share. Unfavorable market conditions and operating inefficiencies related to the
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implementation of the Company’s previously announced restructuring actions have affected the Company’s full-year outlook.
“Despite these short-term challenges, we are confident that Stoneridge is positioned for long-term growth with an excellent product portfolio, growing global capabilities and a strong management team,” said Pisani. “We plan to continue to broaden our customer base in our served markets and achieve further efficiencies through lean thinking in all parts of our organization.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2005 first-quarter results can be accessed at 11 a.m. Eastern time on Thursday, April 28, 2005, 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. Sales in 2004 were approximately $682 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:
Joseph Mallak, Vice President and Chief Financial Officer or
Greg Fritz, Director of Corporate Finance and Investor Relations
330/856-2443
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
For the Three Months Ended | ||||||||
April 2, | March 31, | |||||||
2005 | 2004 | |||||||
NET SALES | $ | 180,827 | $ | 176,023 | ||||
COSTS AND EXPENSES: | ||||||||
Cost of goods sold | 135,592 | 128,207 | ||||||
Selling, general and administrative | 30,388 | 28,061 | ||||||
Restructuring charges | 2,126 | — | ||||||
OPERATING INCOME | 12,721 | 19,755 | ||||||
Interest expense, net | 5,989 | 6,251 | ||||||
Other income, net | (929 | ) | (275 | ) | ||||
INCOME BEFORE INCOME TAXES | 7,661 | 13,779 | ||||||
Provision for income taxes | 3,292 | 4,561 | ||||||
NET INCOME | $ | 4,369 | $ | 9,218 | ||||
BASIC NET INCOME PER SHARE | $ | 0.19 | $ | 0.41 | ||||
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING | 22,683 | 22,572 | ||||||
DILUTED NET INCOME PER SHARE | $ | 0.19 | $ | 0.40 | ||||
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING | 22,891 | 22,795 | ||||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
April 2, | December 31, | ||||||||
2005 | 2004 | ||||||||
(Unaudited) | (Audited) | ||||||||
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash and cash equivalents | $ | 42,317 | $ | 52,332 | |||||
Accounts receivable, net | 119,248 | 100,615 | |||||||
Inventories, net | 58,956 | 56,397 | |||||||
Prepaid expenses and other | 14,542 | 11,416 | |||||||
Deferred income taxes | 9,833 | 13,282 | |||||||
Total current assets | 244,896 | 234,042 | |||||||
PROPERTY, PLANT AND EQUIPMENT, net | 110,409 | 114,004 | |||||||
OTHER ASSETS: | |||||||||
Goodwill | 65,176 | 65,176 | |||||||
Investments and other, net | 25,295 | 24,979 | |||||||
Deferred income taxes | 35,549 | 34,800 | |||||||
TOTAL ASSETS | $ | 481,325 | $ | 473,001 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
CURRENT LIABILITIES: | |||||||||
Current portion of long-term debt | $ | 72 | $ | 109 | |||||
Accounts payable | 62,611 | 57,709 | |||||||
Accrued expenses and other | 53,694 | 52,907 | |||||||
Total current liabilities | 116,377 | 110,725 | |||||||
LONG-TERM LIABILITIES: | |||||||||
Long-term debt, net of current portion | 200,052 | 200,052 | |||||||
Other liabilities | 6,552 | 6,619 | |||||||
Total long-term liabilities | 206,604 | 206,671 | |||||||
SHAREHOLDERS’ EQUITY: | |||||||||
Preferred shares, without par value, 5,000 authorized, none issued | — | — | |||||||
Common shares, without par value, 60,000 authorized, 22,785 and 22,780 issued and outstanding at April 2, 2005 and December 31, 2004, respectively (net of 8 treasury shares for each period), with no stated value | — | — | |||||||
Additional paid-in capital | 146,128 | 145,764 | |||||||
Retained earnings | 10,624 | 6,255 | |||||||
Accumulated other comprehensive income | 1,592 | 3,586 | |||||||
Total shareholders’ equity | 158,344 | 155,605 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 481,325 | $ | 473,001 | |||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
For the Three Months Ended | |||||||||
April 2, | March 31, | ||||||||
2005 | 2004 | ||||||||
OPERATING ACTIVITIES: | |||||||||
Net cash (used) provided by operating activities | $ | (5,335 | ) | $ | 6,909 | ||||
INVESTING ACTIVITIES: | |||||||||
Capital expenditures | (4,054 | ) | (4,750 | ) | |||||
Net cash used by investing activities | (4,054 | ) | (4,750 | ) | |||||
FINANCING ACTIVITIES: | |||||||||
Repayments of long-term debt | (37 | ) | (13 | ) | |||||
Share option activity | 42 | (581 | ) | ||||||
Net cash provided (used) by financing activities | 5 | (594 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (631 | ) | (46 | ) | |||||
Net change in cash and cash equivalents | (10,015 | ) | 1,519 | ||||||
Cash and cash equivalents at beginning of period | 52,332 | 24,142 | |||||||
Cash and cash equivalents at end of period | $ | 42,317 | $ | 25,661 | |||||
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