Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS THIRD-QUARTER 2006 RESULTS
·Net Sales and Income Increase
·Full-year 2006 Earnings Outlook Unchanged at $0.50 to $0.60 Per Share
·2007 Earnings Expected to Match 2006 Level
·Full-year 2006 Earnings Outlook Unchanged at $0.50 to $0.60 Per Share
·2007 Earnings Expected to Match 2006 Level
WARREN, Ohio — October 27, 2006 — Stoneridge, Inc. (NYSE: SRI) today announced net sales of $172.4 million and net income of $4.4 million, or $0.19 per diluted share, for the third quarter ended September 30, 2006.
Net sales increased $13.7 million, or 8.6 percent, to $172.4 million, compared with $158.7 million for the third quarter of 2005. The increase in sales was primarily due to strong demand in the Company’s commercial vehicle markets. The effect of foreign currency translation resulted in a favorable impact of $2.1 million on net sales compared with the same period in 2005.
Net income for the third quarter was $4.4 million, or $0.19 per diluted share, compared with a net loss of $(3.3) million, or $(0.14) per diluted share, in the third quarter of 2005. The increase in net income was primarily attributable to improved gross profit, lower restructuring and bad debt expenses, and a lower marginal tax rate. The quarter was unfavorably affected by raw material price increases and product price reductions.
“We are pleased to report improved operating results from our commercial vehicle business as operational improvement initiatives take hold across the organization,” said John C. Corey, president and chief executive officer. “Our team remains focused on continuing to improve our operational performance as the North American industry outlook remains challenging over the near term.”
For the 39 weeks ended September 30, 2006, net sales were $537.5 million, an increase of 3.4 percent compared with $519.8 million for the 39 weeks ended October 1, 2005. Net income for the 2006 year-to-date period was $13.1 million, or $0.56 per diluted share, compared with $3.9 million, or $0.17 per diluted share, in the same 2005 period.
Net cash provided by operating activities for the 39 weeks ended September 30, 2006 was $22.6 million, compared with net cash provided of $15.5 million for the corresponding period ended October 1, 2005. The increase in cash provided by operating activities was primarily due to the improvement in net income.
Outlook
“For 2006, we are reaffirming our full-year guidance based upon the reduction in fourth-quarter production schedules,” Corey said. “For 2007, our target is to maintain our 2006 expected net income level despite the anticipated declines in North American medium- and heavy-duty truck production. Our planned cost-reduction activities, operational improvement initiatives and new product launches will support our 2007 goal.”
The Company’s full-year 2006 earnings outlook is unchanged at $0.50 to $0.60 per diluted share. Full-year 2005 net income was $0.04 per diluted share. Based upon the current industry outlook, the Company expects 2007 net income to remain basically level with its anticipated 2006 earnings of $0.50 to $0.60 per diluted share. For 2007, assumptions include a North American medium- and heavy-duty truck production decline of 25-35 percent and North American light vehicle production to approximate 2006 levels.
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Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2006 third-quarter results can be accessed at 11 a.m. Eastern time on Friday, October 27, 2006, 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 2005 were approximately $672 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 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
330/856-2443
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited) | ||||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
September 30, | October 1, | September 30, | October 1, | |||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Sales | $ | 172,351 | $ | 158,715 | $ | 537,484 | $ | 519,849 | ||||||||
Costs and Expenses: | ||||||||||||||||
Cost of goods sold | 134,173 | 127,154 | 414,619 | 401,238 | ||||||||||||
Selling, general and administrative | 28,956 | 28,357 | 91,346 | 88,943 | ||||||||||||
Provision for doubtful accounts | 38 | 2,671 | 544 | 3,604 | ||||||||||||
Loss (gain) on sale of property, plant and equipment | 15 | (5 | ) | (1,454 | ) | (344 | ) | |||||||||
Restructuring charges, net | 80 | 823 | 154 | 4,963 | ||||||||||||
Operating Income (Loss) | 9,089 | (285 | ) | 32,275 | 21,445 | |||||||||||
Interest expense, net | 5,710 | 5,936 | 17,462 | 17,973 | ||||||||||||
Equity in earnings of investees | (1,838 | ) | (1,397 | ) | (4,804 | ) | (3,203 | ) | ||||||||
Other (income) expense, net | (55 | ) | (108 | ) | 1,697 | (900 | ) | |||||||||
Income (Loss) Before Income Taxes | 5,272 | (4,716 | ) | 17,920 | 7,575 | |||||||||||
Provision (benefit) for income taxes | 866 | (1,424 | ) | 4,857 | 3,683 | |||||||||||
Net Income (Loss) | $ | 4,406 | $ | (3,292 | ) | $ | 13,063 | $ | 3,892 | |||||||
Basic net income (loss) per share | $ | 0.19 | $ | (0.14 | ) | $ | 0.57 | $ | 0.17 | |||||||
Basic weighted average shares outstanding | 22,880 | 22,726 | 22,833 | 22,701 | ||||||||||||
Diluted net income (loss) per share | $ | 0.19 | $ | (0.14 | ) | $ | 0.56 | $ | 0.17 | |||||||
Diluted weighted average shares outstanding | 23,396 | 22,726 | 23,250 | 22,940 | ||||||||||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, | December 31, | |||||||
2006 | 2005 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 46,730 | $ | 40,784 | ||||
Accounts receivable, less allowances for doubtful accounts of $4,841 and $4,562, respectively | 121,938 | 100,362 | ||||||
Inventories, net | 58,237 | 53,791 | ||||||
Prepaid expenses and other | 14,701 | 14,490 | ||||||
Deferred income taxes | 9,575 | 9,253 | ||||||
Total current assets | 251,181 | 218,680 | ||||||
Long-Term Assets: | ||||||||
Property, Plant and Equipment, net | 114,458 | 113,478 | ||||||
Other Assets: | ||||||||
Goodwill | 65,176 | 65,176 | ||||||
Investments and other, net | 31,500 | 26,491 | ||||||
Deferred income taxes | 36,899 | 39,213 | ||||||
Total long-term assets | 248,033 | 244,358 | ||||||
Total Assets | $ | 499,214 | $ | 463,038 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Current portion of long-term debt | $ | — | $ | 44 | ||||
Accounts payable | 69,020 | 55,344 | ||||||
Accrued expenses and other | 51,919 | 46,603 | ||||||
Total current liabilities | 120,939 | 101,991 | ||||||
Long-Term Liabilities: | ||||||||
Long-term debt, net of current portion | 200,000 | 200,000 | ||||||
Deferred income taxes | 1,411 | 923 | ||||||
Other liabilities | 5,074 | 6,133 | ||||||
Total long-term liabilities | 206,485 | 207,056 | ||||||
Shareholders’ Equity: | ||||||||
Preferred Shares, without par value, 5,000 authorized, none issued | — | — | ||||||
Common Shares, without par value, authorized 60,000 shares, issued 23,940 and 23,232 shares and outstanding 23,758 and 23,178 shares, respectively, with no stated value | — | — | ||||||
Additional paid-in capital | 148,876 | 147,440 | ||||||
Common Shares held in treasury, 182 and 54 shares, respectively, at cost | (150 | ) | (65 | ) | ||||
Retained earnings | 20,271 | 7,188 | ||||||
Accumulated other comprehensive income (loss) | 2,793 | (572 | ) | |||||
Total shareholders’ equity | 171,790 | 153,991 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 499,214 | $ | 463,038 | ||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) | ||||||||
For the Thirty-Nine Weeks Ended | ||||||||
September 30, | October 1, | |||||||
2006 | 2005 | |||||||
Net cash provided by operating activities | $ | 22,610 | $ | 15,521 | ||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (19,794 | ) | (20,934 | ) | ||||
Proceeds from sale of property, plant and equipment | 2,266 | 1,664 | ||||||
Business acquisitions and other | (668 | ) | (282 | ) | ||||
Net cash used by investing activities | (18,196 | ) | (19,552 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Repayments of long-term debt | (44 | ) | (96 | ) | ||||
Share-based compensation activity | 47 | 3 | ||||||
Other financing costs | (150 | ) | (75 | ) | ||||
Net cash used by financing activities | (147 | ) | (168 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,679 | (2,207 | ) | |||||
Net change in cash and cash equivalents | 5,946 | (6,406 | ) | |||||
Cash and cash equivalents at beginning of period | 40,784 | 52,332 | ||||||
Cash and cash equivalents at end of period | $ | 46,730 | $ | 45,926 | ||||
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