Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS SECOND-QUARTER 2008 RESULTS
· Net Sales and Income Increase Year-over-Year
· Second-Quarter 2008 Net Income per Diluted Share Increases to $0.20, up 82% from 2007
· Company Reaffirms Full-Year 2008 Earnings Outlook of $0.75 to $0.85 Per Diluted Share
WARREN, Ohio - July 31, 2008 - Stoneridge, Inc. (NYSE: SRI) today announced net sales of $213.2 million and net income of $4.7 million, or $0.20 per diluted share, for the second quarter ended June 30, 2008.
Net sales increased $29.4 million, or 16.0 percent, to $213.2 million, compared with $183.8 million for the second quarter of 2007. The increase in net sales was primarily attributable to new electronics program sales in North America, improvement in the Company’s European electronics business and the impact of foreign currency translation. The effect of foreign currency translation increased second-quarter net sales by approximately $4.4 million compared with the same period in 2007. The sales increase was partially offset by continuing weakness in the North American passenger car and light truck markets.
Net income for the second quarter was $4.7 million, or $0.20 per diluted share, compared with net income of $2.7 million, or $0.11 per diluted share, in the second quarter of 2007. The increase in net income was due primarily to strong electronics sales in North America and increased joint venture earnings. Partially offsetting these favorable impacts were $3.7 million in pre-tax expenses related to the Company’s previously announced restructuring initiatives and $0.3 million of pre-tax expenses related to the repurchase and retirement of $6.0 million in par value of the Company’s bonds.
“We continued our improved performance in the second quarter in the face of deteriorating conditions in our North American light vehicle markets,” said John C. Corey, president and chief executive officer. “This improved performance includes benefits resulting from our end-market strategy and we will continue pursuing diversity in our customers, business segments and geographic regions.”
For the six months ended June 30, 2008, net sales were $416.3 million, an increase of 12.9 percent compared with $368.8 million for the six months ended June 30, 2007. Net income for the 2008 six-month period was $11.2 million, or $0.47 per diluted share, compared with $7.6 million, or $0.32 per diluted share, in the comparable 2007 period.
Net cash provided by operating activities for the six months ended June 30, 2008 was $12.6 million, compared with net cash provided of $4.0 million for the six months ended June 30, 2007. The increase of $8.6 million in cash provided by operating activities was primarily due to favorable accounts payable variances relative to the previous year.
Outlook
“Based upon our first-half performance and the current industry forecasts, we are maintaining our previously issued guidance for full-year 2008 earnings of $0.75 to $0.85 per diluted share,” Corey said. “While I am encouraged by the progress we have made, the significant changes in the North American light truck and SUV market will impact our performance going forward. These market changes will continue to challenge our team and we have already begun adjusting to the new market realities.”
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Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2008 second-quarter results can be accessed at 11 a.m. Eastern time on Thursday July 31, 2008, at www.stoneridge.com, which will also offer a webcast replay.
About Stoneridge, Inc.
Stoneridge, Inc., headquartered in Warren, Ohio, is an 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 2007 were approximately $727 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:
Kenneth A. Kure, Corporate Treasurer and Director of Finance
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 | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
Net Sales | $ | 213,229 | $ | 183,802 | $ | 416,299 | $ | 368,830 | |||||
Costs and Expenses: | |||||||||||||
Cost of goods sold | 163,875 | 144,920 | 315,128 | 287,101 | |||||||||
Selling, general and administrative | 36,731 | 33,598 | 73,021 | 66,730 | |||||||||
(Gain) loss on sale of property, plant and equipment, net | 153 | (1,653 | ) | 145 | (1,688 | ) | |||||||
Restructuring charges | 1,713 | 31 | 3,135 | 72 | |||||||||
Operating Income | 10,757 | 6,906 | 24,870 | 16,615 | |||||||||
Interest expense, net | 4,880 | 5,619 | 10,252 | 11,103 | |||||||||
Equity in earnings of investees | (3,016 | ) | (2,298 | ) | (6,835 | ) | (4,418 | ) | |||||
Loss on early extinguishment of debt | 271 | - | 770 | - | |||||||||
Other expense (income), net | (124 | ) | 224 | 278 | 512 | ||||||||
Income Before Income Taxes | 8,746 | 3,361 | 20,405 | 9,418 | |||||||||
Provision for income taxes | 4,062 | 666 | 9,174 | 1,853 | |||||||||
Net Income | $ | 4,684 | $ | 2,695 | $ | 11,231 | $ | 7,565 | |||||
Basic net income per share | $ | 0.20 | $ | 0.12 | $ | 0.48 | $ | 0.33 | |||||
Basic weighted average shares outstanding | 23,286 | 23,114 | 23,327 | 23,052 | |||||||||
Diluted net income per share | $ | 0.20 | $ | 0.11 | $ | 0.47 | $ | 0.32 | |||||
Diluted weighted average shares outstanding | 23,690 | 23,702 | 23,722 | 23,603 |
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, | December 31, | ||||||
2008 | 2007 | ||||||
ASSETS | (Unaudited) | (Audited) | |||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 81,342 | $ | 95,924 | |||
Accounts receivable, less reserves of $5,587 and $4,736, respectively | 142,472 | 122,288 | |||||
Inventories, net | 70,175 | 57,392 | |||||
Prepaid expenses and other | 17,365 | 15,926 | |||||
Deferred income taxes | 9,963 | 9,829 | |||||
Total current assets | 321,317 | 301,359 | |||||
Long-Term Assets: | |||||||
Property, plant and equipment, net | 90,611 | 92,752 | |||||
Other Assets: | |||||||
Goodwill | 65,730 | 65,176 | |||||
Investments and other, net | 47,962 | 39,454 | |||||
Deferred income taxes | 20,774 | 29,028 | |||||
Total long-term assets | 225,077 | 226,410 | |||||
Total Assets | $ | 546,394 | $ | 527,769 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 76,809 | $ | 69,373 | |||
Accrued expenses and other | 56,104 | 47,198 | |||||
Total current liabilities | 132,913 | 116,571 | |||||
Long-Term Liabilities: | |||||||
Long-term debt | 183,000 | 200,000 | |||||
Deferred income taxes | 2,909 | 2,665 | |||||
Other liabilities | 2,168 | 2,344 | |||||
Total long-term liabilities | 188,077 | 205,009 | |||||
Shareholders' Equity: | |||||||
Preferred Shares, without par value, authorized 5,000 shares, none issued | - | - | |||||
Common Shares, without par value, authorized 60,000 shares, issued 24,755 and 24,601shares and outstanding 24,660 and 24,209 shares, respectively, with no stated value | - | - | |||||
Additional paid-in capital | 156,467 | 154,173 | |||||
Common Shares held in treasury, 95 and 373 shares, respectively, at cost | (129 | ) | (383 | ) | |||
Retained earnings | 49,603 | 38,372 | |||||
Accumulated other comprehensive income | 19,463 | 14,027 | |||||
Total shareholders’ equity | 225,404 | 206,189 | |||||
Total Liabilities and Shareholders' Equity | $ | 546,394 | $ | 527,769 |
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) | |||||||
Six Months Ended | |||||||
June 30, | |||||||
2008 | 2007 | ||||||
OPERATING ACTIVITIES: | |||||||
Net cash provided by operating activities | $ | 12,574 | $ | 4,019 | |||
INVESTING ACTIVITIES: | |||||||
Capital expenditures | (11,641 | ) | (10,814 | ) | |||
Proceeds from sale of property, plant and equipment | 307 | 4,951 | |||||
Business acquisitions and other | (980 | ) | - | ||||
Net cash used for investing activities | (12,314 | ) | (5,863 | ) | |||
FINANCING ACTIVITIES: | |||||||
Repayments of long-term debt | (17,000 | ) | - | ||||
Share-based compensation activity, net | 1,162 | 1,796 | |||||
Premiums related to early extinguishment of debt | (553 | ) | - | ||||
Net cash (used for) provided by financing activities | (16,391 | ) | 1,796 | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,549 | 232 | |||||
Net change in cash and cash equivalents | (14,582 | ) | 184 | ||||
Cash and cash equivalents at beginning of period | 95,924 | 65,882 | |||||
Cash and cash equivalents at end of period | $ | 81,342 | $ | 66,066 |
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