Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS FOURTH-QUARTER AND FULL-YEAR 2006 RESULTS
•Fourth-quarter Net Sales and Net Income Increase
•Full-year 2006 Net Income Increases to $0.63 per Diluted Share
•2007 Net Income Expected to Be $0.45 to $0.55 per Diluted Share
•Fourth-quarter Net Sales and Net Income Increase
•Full-year 2006 Net Income Increases to $0.63 per Diluted Share
•2007 Net Income Expected to Be $0.45 to $0.55 per Diluted Share
WARREN, Ohio – January 31, 2007 – Stoneridge, Inc. (NYSE: SRI) today announced net sales of $171.2 million and net income of $1.5 million, or $0.06 per diluted share, for the fourth quarter ended December 31, 2006.
Net sales increased $19.5 million, or 12.8 percent, to $171.2 million, compared with $151.7 million for the fourth quarter of 2005. The improvement in sales was attributable to increased North American commercial vehicle production and new product introductions in Europe.
Net income for the fourth quarter was $1.5 million, or $0.06 per diluted share, compared with a net loss of $(3.0) million, or $(0.13) per diluted share, in the fourth quarter of 2005.
“Our 2006 results reflect our organizational excellence initiatives and our team’s dedication to these goals. We were able to generate a significant improvement in results despite the headwinds of higher raw material prices and softness in the North American light vehicle market,” said John C. Corey, president and chief executive officer. “While our cash flow from operations and earnings-per-share improvement represent progress toward our long-term goals, we remain focused on building upon this momentum in 2007 and beyond.”
For the year ended December 31, 2006, net sales were $708.7 million, an increase of $37.1 million compared with $671.6 million for the year ended December 31, 2005. The improvement in net sales is predominantly attributable to increased North American commercial vehicle sales and new product launches in Europe. These factors were mitigated by lower North American light vehicle demand and product price reductions. Net income for 2006 was $14.5 million, or $0.63 per diluted share, compared with net income of $0.9 million, or $0.04 per diluted share, in 2005.
Net cash provided by operating activities for the year ended December 31, 2006 was $46.5 million, compared with $19.1 million for the year ended December 31, 2005. The increase in cash provided by operating activities was primarily due to increased net income and lower working capital requirements.
Outlook
“Our current expectation is for full-year 2007 earnings to decline slightly from our 2006 results. This anticipated decline is predominantly due to the expected softness in North American commercial vehicle production as a result of new 2007 emissions standards,” Corey said. “We expect our new product launches to offer some offset to these declines, and our ongoing cost-reduction initiatives to partially offset the expected volume decrease.”
“Our current expectation is for full-year 2007 earnings to decline slightly from our 2006 results. This anticipated decline is predominantly due to the expected softness in North American commercial vehicle production as a result of new 2007 emissions standards,” Corey said. “We expect our new product launches to offer some offset to these declines, and our ongoing cost-reduction initiatives to partially offset the expected volume decrease.”
Based on the current industry outlook, the Company anticipates full-year 2007 net income to be in the range of $0.45 to $0.55 per diluted share.
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Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2006 fourth-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, January 31, 2007, atwww.stoneridge.com, which will also offer a webcast replay.
A live Internet broadcast of Stoneridge’s conference call regarding 2006 fourth-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, January 31, 2007, 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. 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. 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.
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) | ||||||||||||||||
For the Three Months | For the Fiscal Years | |||||||||||||||
Ended December 31, | Ended December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Sales | $ | 171,215 | $ | 151,735 | $ | 708,699 | $ | 671,584 | ||||||||
Costs and Expenses: | ||||||||||||||||
Cost of goods sold | 135,174 | 121,758 | 549,793 | 522,996 | ||||||||||||
Selling, general and administrative | 32,956 | 27,892 | 124,302 | 116,836 | ||||||||||||
Provision for doubtful accounts, net | (308 | ) | 107 | 236 | 3,711 | |||||||||||
(Gain) loss on sale of property, plant and equipment, net | 151 | (16 | ) | (1,303 | ) | (360 | ) | |||||||||
Restructuring charges | 454 | 135 | 608 | 5,098 | ||||||||||||
Operating Income (Loss) | 2,788 | 1,859 | 35,063 | 23,303 | ||||||||||||
Interest expense, net | 4,282 | 5,899 | 21,744 | 23,872 | ||||||||||||
Equity in earnings of investees | (2,321 | ) | (849 | ) | (7,125 | ) | (4,052 | ) | ||||||||
Other (income) loss, net | (892 | ) | (53 | ) | 805 | (953 | ) | |||||||||
Income (Loss) Before Income Taxes | 1,719 | (3,138 | ) | 19,639 | 4,436 | |||||||||||
Provision (benefit) for income taxes | 269 | (180 | ) | 5,126 | 3,503 | |||||||||||
Net Income (Loss) | $ | 1,450 | $ | (2,958 | ) | $ | 14,513 | $ | 933 | |||||||
Basic net income (loss) per share | $ | 0.06 | $ | (0.13 | ) | $ | 0.63 | $ | 0.04 | |||||||
Basic weighted average shares outstanding | 22,930 | 22,733 | 22,866 | 22,709 | ||||||||||||
Diluted net income (loss) per share | $ | 0.06 | $ | (0.13 | ) | $ | 0.63 | $ | 0.04 | |||||||
Diluted weighted average shares outstanding | 23,248 | 22,792 | 23,161 | 22,775 | ||||||||||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, | ||||||||||||||||
2006 | 2005 | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 65,882 | $ | 40,784 | ||||||||||||
Accounts receivable, less allowances for doubtful accounts of $3,831 and $3,829, respectively | 106,985 | 100,362 | ||||||||||||||
Inventories, net | 58,521 | 53,791 | ||||||||||||||
Prepaid expenses and other | 13,448 | 14,490 | ||||||||||||||
Deferred income taxes | 9,196 | 9,253 | ||||||||||||||
Total current assets | 254,032 | 218,680 | ||||||||||||||
Long-Term Assets: | ||||||||||||||||
Property, Plant and Equipment, net | 114,586 | 113,478 | ||||||||||||||
Other Assets: | ||||||||||||||||
Goodwill | 65,176 | 65,176 | ||||||||||||||
Investments and other, net | 30,875 | 26,491 | ||||||||||||||
Deferred income taxes | 37,138 | 39,213 | ||||||||||||||
Total long-term assets | 247,775 | 244,358 | ||||||||||||||
Total Assets | $ | 501,807 | $ | 463,038 | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Current portion of long-term debt | $ | — | $ | 44 | ||||||||||||
Accounts payable | 72,493 | 55,344 | ||||||||||||||
Accrued expenses and other | 45,624 | 46,603 | ||||||||||||||
Total current liabilities | 118,117 | 101,991 | ||||||||||||||
Long-Term Liabilities: | ||||||||||||||||
Long-term debt, net of current portion | 200,000 | 200,000 | ||||||||||||||
Deferred income taxes | 1,923 | 923 | ||||||||||||||
Other liabilities | 3,145 | 6,133 | ||||||||||||||
Total long-term liabilities | 205,068 | 207,056 | ||||||||||||||
Shareholders’ Equity: | ||||||||||||||||
Preferred Shares, without par value, 5,000 authorized, none issued | — | — | ||||||||||||||
Common Shares, without par value, authorized 60,000 shares, issued 23,990 and 23,232 shares and outstanding 23,804 and 23,178 shares, respectively, with no stated value | — | — | ||||||||||||||
Additional paid-in capital | 150,078 | 147,440 | ||||||||||||||
Common Shares held in treasury, 186 and 54 shares, respectively, at cost | (151 | ) | (65 | ) | ||||||||||||
Retained earnings | 21,721 | 7,188 | ||||||||||||||
Accumulated other comprehensive income (loss) | 6,974 | (572 | ) | |||||||||||||
Total shareholders’ equity | 178,622 | 153,991 | ||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 501,807 | $ | 463,038 | ||||||||||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Fiscal Years | ||||||||
Ended December 31, | ||||||||
2006 | 2005 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net cash provided by operating activities | $ | 46,540 | $ | 19,061 | ||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (25,895 | ) | (28,934 | ) | ||||
Proceeds from sale of fixed assets | 2,266 | 1,664 | ||||||
Proceeds from sale of partnership interest | 1,153 | — | ||||||
Business acquisitions and other | (2,133 | ) | (282 | ) | ||||
Net cash used by investing activities | (24,609 | ) | (27,552 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Repayments of long-term debt | (44 | ) | (118 | ) | ||||
Share-based compensation activity | 301 | 1 | ||||||
Other financing costs | (150 | ) | (241 | ) | ||||
Net cash provided (used) by financing activities | 107 | (358 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 3,060 | (2,699 | ) | |||||
Net change in cash and cash equivalents | 25,098 | (11,548 | ) | |||||
Cash and cash equivalents at beginning of period | 40,784 | 52,332 | ||||||
Cash and cash equivalents at end of period | $ | 65,882 | $ | 40,784 | ||||
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