Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS SECOND-QUARTER 2005 RESULTS
— Net income of $0.12 per diluted share —
— Reaffirms full-year 2005 outlook —
— Net income of $0.12 per diluted share —
— Reaffirms full-year 2005 outlook —
WARREN, Ohio — July 26, 2005 — Stoneridge, Inc. (NYSE: SRI) today announced net sales of $180.3 million and net income of $2.8 million, or $0.12 per diluted share, for the second quarter ended July 2, 2005.
Net sales increased $2.2 million, or 1 percent, to $180.3 million compared with $178.1 million for the second quarter of 2004. The increase in sales was primarily due to increased commercial vehicle production, which offset the decline in North American traditional domestic light vehicle production. The effect of foreign currency translation added approximately $1.4 million to second-quarter 2005 sales compared with the same period in 2004.
Net income for the second quarter of 2005 was $2.8 million, or $0.12 per diluted share, compared with $9.3 million, or $0.41 per diluted share, for the second quarter of 2004. The decrease in net income was primarily due to the Company’s previously disclosed restructuring activities and related operating inefficiencies, the decrease in North American traditional domestic light vehicle production, product price reductions and increased product development activities.
The Company recorded a pre-tax restructuring charge of $1.7 million in the second quarter of 2005, primarily related to severance costs, asset-related impairment charges, and facility closure costs associated with previously announced plant consolidations. These consolidations are part of the Company’s cost-reduction initiatives.
“Stoneridge’s North American automotive business continues to be faced with significant challenges,” said Gerald V. Pisani, president and chief executive officer. “As a result, we remain committed to our current restructuring plan and investment in product development, which will enable the Company to maintain its competitive position as we become a leaner, more flexible and more efficient organization.”
For the six months ended July 2, 2005, net sales were $361.1 million, an increase of 2 percent, compared with $354.1 million for the six months ended June 30, 2004. Net income for the first six months of 2005 was $7.2 million, or $0.31 per diluted share, compared with $18.5 million, or $0.81 per diluted share, in the comparable 2004 six-month period.
Net cash provided by operating activities for the six months ended July 2, 2005 was $5.0 million, compared with $19.4 million for the six months ended June 30, 2004. The decrease in cash provided by operating activities was primarily due to the decrease in net income and higher uses of cash for working capital requirements.
Outlook
Based on the current industry outlook, Stoneridge anticipates third-quarter 2005 net income per diluted share to be between negative $0.05 and positive $0.05 per diluted share, compared with $0.17 per diluted share for last year’s third quarter. The Company reaffirms its previously issued full-year 2005 outlook of $0.40 to $0.50 per diluted share.
Based on the current industry outlook, Stoneridge anticipates third-quarter 2005 net income per diluted share to be between negative $0.05 and positive $0.05 per diluted share, compared with $0.17 per diluted share for last year’s third quarter. The Company reaffirms its previously issued full-year 2005 outlook of $0.40 to $0.50 per diluted share.
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Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2005 second-quarter results can be accessed at 11 a.m. Eastern Time on Tuesday, July 26, 2005, atwww.stoneridge.com, which will also offer a webcast replay.
A live Internet broadcast of Stoneridge’s conference call regarding 2005 second-quarter results can be accessed at 11 a.m. Eastern Time on Tuesday, July 26, 2005, atwww.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 2004 were approximately $682 million. Additional information about Stoneridge can be found atwww.stoneridge.com.
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 2004 were approximately $682 million. Additional information about Stoneridge can be found atwww.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 or bankruptcy of a major customer; the costs and timing of facility closures, business realignment, or similar actions; 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 successful integration of any acquired businesses. 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.
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 or bankruptcy of a major customer; the costs and timing of facility closures, business realignment, or similar actions; 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 successful integration of any acquired businesses. 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
Greg Fritz, Director of Corporate Finance and Investor Relations
Greg Fritz, Director of Corporate Finance and Investor Relations
330/856-2443
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Unaudited)
(in thousands except for per share data)
| For the Three Months | For the Six Months | |||||||||||||||
| Ended | Ended | |||||||||||||||
| July 2, 2005 | June 30, 2004 | July 2, 2005 | June 30, 2004 | |||||||||||||
| NET SALES | $ | 180,307 | $ | 178,056 | $ | 361,134 | $ | 354,079 | ||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Cost of goods sold | 138,492 | 132,428 | 274,083 | 260,635 | ||||||||||||
| Selling, general and administrative | 31,128 | 25,848 | 61,517 | 53,909 | ||||||||||||
| Restructuring charges | 1,678 | 205 | 3,804 | 205 | ||||||||||||
| OPERATING INCOME | 9,009 | 19,575 | 21,730 | 39,330 | ||||||||||||
| Interest expense, net | 6,048 | 6,245 | 12,037 | 12,497 | ||||||||||||
| Other income, net | (1,669 | ) | (124 | ) | (2,598 | ) | (400 | ) | ||||||||
| INCOME BEFORE INCOME TAXES | 4,630 | 13,454 | 12,291 | 27,233 | ||||||||||||
| Provision for income taxes | 1,815 | 4,172 | 5,107 | 8,733 | ||||||||||||
| NET INCOME | $ | 2,815 | $ | 9,282 | $ | 7,184 | $ | 18,500 | ||||||||
| BASIC NET INCOME PER SHARE | $ | 0.12 | $ | 0.41 | $ | 0.32 | $ | 0.82 | ||||||||
| BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING | 22,695 | 22,604 | 22,689 | 22,584 | ||||||||||||
| DILUTED NET INCOME PER SHARE | $ | 0.12 | $ | 0.41 | $ | 0.31 | $ | 0.81 | ||||||||
| DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING | 22,985 | 22,873 | 22,933 | 22,849 | ||||||||||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| July 2, | December 31, | |||||||
| 2005 | 2004 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 44,570 | $ | 52,332 | ||||
| Accounts receivable, net | 114,812 | 100,615 | ||||||
| Inventories, net | 57,977 | 56,397 | ||||||
| Prepaid expenses and other | 16,133 | 11,416 | ||||||
| Deferred income taxes | 9,196 | 13,282 | ||||||
| Total current assets | 242,688 | 234,042 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, net | 109,682 | 114,004 | ||||||
| OTHER ASSETS: | ||||||||
| Goodwill | 65,176 | 65,176 | ||||||
| Investments and other, net | 26,776 | 24,979 | ||||||
| Deferred income taxes | 36,100 | 34,800 | ||||||
| TOTAL ASSETS | $ | 480,422 | $ | 473,001 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt | $ | 46 | $ | 109 | ||||
| Accounts payable | 63,153 | 57,709 | ||||||
| Accrued expenses and other | 50,719 | 52,907 | ||||||
| Total current liabilities | 113,918 | 110,725 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term debt, net of current portion | 200,044 | 200,052 | ||||||
| Other liabilities | 6,415 | 6,619 | ||||||
| Total long-term liabilities | 206,459 | 206,671 | ||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Preferred shares, without par value, 5,000 authorized, none issued | — | — | ||||||
| Common shares, without par value, 60,000 authorized, 23,212 (net of 12 treasury shares) and 22,780 (net of 8 treasury shares) issued and outstanding at July 2, 2005 and December 31, 2004, respectively, with no stated value | — | — | ||||||
| Additional paid-in capital | 146,508 | 145,764 | ||||||
| Retained earnings | 13,439 | 6,255 | ||||||
| Accumulated other comprehensive income | 98 | 3,586 | ||||||
| Total shareholders’ equity | 160,045 | 155,605 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 480,422 | $ | 473,001 | ||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Unaudited)
(in thousands)
| For the Six Months Ended | ||||||||
| July 2, | June 30, | |||||||
| 2005 | 2004 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net cash provided by operating activities | $ | 4,954 | $ | 19,396 | ||||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (12,366 | ) | (11,428 | ) | ||||
| Proceeds from sale of fixed assets | 1,654 | — | ||||||
| Net cash used by investing activities | (10,712 | ) | (11,428 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Repayments of long-term debt | (71 | ) | (263 | ) | ||||
| Share-based compensation activity | 55 | (432 | ) | |||||
| Net cash used by financing activities | (16 | ) | (695 | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (1,988 | ) | (80 | ) | ||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (7,762 | ) | 7,193 | |||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 52,332 | 24,142 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 44,570 | $ | 31,335 | ||||
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