Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS SECOND-QUARTER 2007 RESULTS
• Net sales of $172.8 million, EPS of $0.11
• Company reaffirms full-year guidance of $0.45 to $0.55 per diluted share
• Announces restructuring actions
• Net sales of $172.8 million, EPS of $0.11
• Company reaffirms full-year guidance of $0.45 to $0.55 per diluted share
• Announces restructuring actions
WARREN, Ohio — November 2, 2007 — Stoneridge, Inc. (NYSE: SRI) today announced net sales of $172.8 million and net income of $2.6 million, or $0.11 per diluted share, for the third quarter ended September 30, 2007.
Net sales increased $0.4 million, or less than 1.0 percent, to $172.8 million, compared with $172.4 million for the third quarter of 2006. The increase was attributable to new product launches and favorable foreign currency translation. The effect of foreign currency translation increased third-quarter net sales by approximately $3.2 million compared with the same period in 2006. These favorable factors were offset by lower medium- and heavy-duty truck production in North America.
Net income for the third quarter was $2.6 million, or $0.11 per diluted share, compared with net income of $4.4 million, or $0.19 per diluted share, in the third quarter of 2006. The decrease in net income was primarily attributable to the non-recurrence of a $1.2 million one-time gain related to the settlement of the life insurance benefits portion of a postretirement benefit plan realized in the third quarter of 2006, along with increased design and development expenses. These unfavorable variances were partially offset by higher earnings from the Company’s fifty percent equity interest in its PST Indústria Eletrônica da Amazônia Ltda. joint venture in Brazil and a lower effective tax rate.
“The contribution from our new business awards helped Stoneridge generate positive earnings in a demanding operating environment in North America,” said John C. Corey, president and chief executive officer. “Our revenues were slightly above the prior year despite a greater than 40 percent decline in North American medium- and heavy-duty truck production during the quarter.”
For the nine months ended September 30, 2007, net sales were $541.6 million, an increase of 1.0 percent compared with $537.5 million for the nine months ended September 30, 2006. Net income for the 2007 nine-month period was $10.2 million, or $0.43 per diluted share, compared with $13.1 million, or $0.56 per diluted share, in the comparable 2006 period.
Net cash provided by operating activities for the nine months ended September 30, 2007 was $7.9 million, compared with net cash provided of $22.6 million for the corresponding period ended September 30, 2006. The decrease of $14.7 million in cash provided by operating activities was primarily due to lower earnings and a larger investment in working capital.
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Restructuring
Stoneridge also announced plans to improve its efficiency and cost position by ceasing manufacturing operations at its Sarasota, Florida and Mitcheldean, England locations. The Company will begin these initiatives in the fourth quarter of 2007 and expects to complete them by the fourth quarter of 2008. Fourth-quarter expenses related to these actions are expected to result in pretax charges of $1.0 million and the Company anticipates incurring total pretax restructuring charges of approximately $9.0-13.0 million after the expected benefit of a facility sale. Stoneridge expects to generate annual savings of $8.0-12.0 million by 2009 as a result of these initiatives.
“While these actions are not a reflection of our employees’ performance at these locations, neither plant has a reasonable cost profile to sustain manufacturing operations. The cessation of manufacturing at these sites will be another step consistent with the need to reduce overhead and SG&A to improve Stoneridge’s cost base and effectively compete in the global marketplace,” said Corey.
Outlook
The Company reaffirmed its previously issued guidance for full-year 2007 earnings of $0.45 to $0.55 per diluted share.
“We expect the North American medium- and heavy-duty production environment will remain challenging for the remainder of the year,” Corey said. “Stoneridge will stay vigilant in its cost-reduction efforts and will continue to aggressively respond to market conditions to meet our full-year earnings expectations.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2007 third-quarter results can be accessed at 11 a.m. Eastern time on Friday, November 2, 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. Net sales in 2006 were approximately $709 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) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net Sales | $ | 172,814 | $ | 172,351 | $ | 541,644 | $ | 537,484 | ||||||||
Costs and Expenses: | ||||||||||||||||
Cost of goods sold | 134,944 | 134,173 | 422,045 | 414,619 | ||||||||||||
Selling, general and administrative | 32,407 | 29,074 | 99,209 | 92,044 | ||||||||||||
(Gain) Loss on sale of property, plant and equipment, net | 223 | 15 | (1,465 | ) | (1,454 | ) | ||||||||||
Operating Income | 5,240 | 9,089 | 21,855 | 32,275 | ||||||||||||
Interest expense, net | 5,467 | 5,710 | 16,570 | 17,462 | ||||||||||||
Equity in earnings of investees | (3,506 | ) | (1,838 | ) | (7,924 | ) | (4,804 | ) | ||||||||
Other (income) loss, net | 273 | (55 | ) | 785 | 1,697 | |||||||||||
Income Before Income Taxes | 3,006 | 5,272 | 12,424 | 17,920 | ||||||||||||
Provision for income taxes | 381 | 866 | 2,234 | 4,857 | ||||||||||||
Net Income | $ | 2,625 | $ | 4,406 | $ | 10,190 | $ | 13,063 | ||||||||
Basic net income per share | $ | 0.11 | $ | 0.19 | $ | 0.44 | $ | 0.57 | ||||||||
Basic weighted average shares outstanding | 23,213 | 22,880 | 23,106 | 22,833 | ||||||||||||
Diluted net income per share | $ | 0.11 | $ | 0.19 | $ | 0.43 | $ | 0.56 | ||||||||
Diluted weighted average shares outstanding | 23,694 | 23,396 | 23,656 | 23,250 | ||||||||||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, | December 31, | |||||||
2007 | 2006 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 67,649 | $ | 65,882 | ||||
Accounts receivable, less allowances for doubtful accounts and other reserves of $5,521 and $5,243, respectively | 123,916 | 106,985 | ||||||
Inventories, net | 57,591 | 58,521 | ||||||
Prepaid expenses and other | 19,925 | 13,448 | ||||||
Deferred income taxes | 9,305 | 9,196 | ||||||
Total current assets | 278,386 | 254,032 | ||||||
Long-Term Assets: | ||||||||
Property, plant and equipment, net | 102,378 | 114,586 | ||||||
Other Assets: | ||||||||
Goodwill | 65,176 | 65,176 | ||||||
Investments and other, net | 40,317 | 30,875 | ||||||
Deferred income taxes | 36,896 | 37,138 | ||||||
Total long-term assets | 244,767 | 247,775 | ||||||
Total Assets | $ | 523,153 | $ | 501,807 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 65,753 | $ | 72,493 | ||||
Accrued expenses and other | 53,949 | 45,624 | ||||||
Total current liabilities | 119,702 | 118,117 | ||||||
Long-Term Liabilities: | ||||||||
Long-term debt | 200,000 | 200,000 | ||||||
Deferred income taxes | 2,030 | 1,923 | ||||||
Other liabilities | 3,800 | 3,145 | ||||||
Total long-term liabilities | 205,830 | 205,068 | ||||||
Shareholders’ Equity: | ||||||||
Preferred Shares, without par value, authorized 5,000 shares, none issued | — | — | ||||||
Common Shares, without par value, authorized 60,000 shares, issued 24,599 and 23,990 shares and outstanding 24,227 and 23,804 shares, respectively, with no stated value | — | — | ||||||
Additional paid-in capital | 153,585 | 150,078 | ||||||
Common Shares held in treasury, 373 and 186 shares, respectively, at cost | (383 | ) | (151 | ) | ||||
Retained earnings | 31,891 | 21,701 | ||||||
Accumulated other comprehensive income | 12,528 | 6,994 | ||||||
Total shareholders’ equity | 197,621 | 178,622 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 523,153 | $ | 501,807 | ||||
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2007 | 2006 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net cash provided by operating activities | 7,909 | 22,610 | ||||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (14,259 | ) | (19,794 | ) | ||||
Proceeds from sale of property, plant and equipment | 5,042 | 2,266 | ||||||
Business acquisitions and other | — | (668 | ) | |||||
Net cash used for investing activities | (9,217 | ) | (18,196 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Repayments of long-term debt | — | (44 | ) | |||||
Share-based compensation activity, net | 1,956 | 47 | ||||||
Other financing costs | — | (150 | ) | |||||
Net cash provided by (used for) financing activities | 1,956 | (147 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 1,119 | 1,679 | ||||||
Net change in cash and cash equivalents | 1,767 | 5,946 | ||||||
Cash and cash equivalents at beginning of period | 65,882 | 40,784 | ||||||
Cash and cash equivalents at end of period | $ | 67,649 | $ | 46,730 | ||||
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