Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS THIRD-QUARTER 2008 RESULTS
· Net Sales Increase Year-over-Year; Restructuring Charges Result in Net Loss for Quarter
· Income Before Restructuring Charges Increases Year-over-Year
· Proactive Restructuring Efforts Continue
· Company Reaffirms Revised Full-Year Earnings Outlook of $0.40 to $0.46 Per Diluted Share
WARREN, Ohio - November 7, 2008 - Stoneridge, Inc. (NYSE: SRI) today announced net sales of $178.4 million and net loss of $0.4 million, or $(0.02) per diluted share, for the third quarter ended September 30, 2008. The earnings per share for the three months ended September 30, 2008 include $0.17 per share for expenses associated with previously announced restructuring initiatives.
Net sales increased $5.6 million, or 3.2 percent, to $178.4 million, compared with $172.8 million for the third quarter of 2007. The increase in net sales was primarily attributable to new electronics programs sales in North America, improvement in the Company’s European electronics business and the impact of foreign currency translation. Foreign currency translation increased third-quarter net sales by approximately $4.0 million compared with the same period in 2007. The sales increase was partially offset by rapid deterioration in the North American passenger car and light truck markets.
Net loss for the third quarter was $0.4 million, or $(0.02) per diluted share, compared with net income of $2.6 million, or $0.11 per diluted share, in the third quarter of 2007. The decrease in net income was due primarily to $4.8 million in pre-tax expenses related to the Company’s previously announced restructuring initiatives and the loss of overhead recoveries because of lower production volumes which were the result of restructuring inventories built in the first half of 2008. Partially offsetting these unfavorable impacts were strong commercial vehicle sales and higher joint-venture earnings due to continued improvement in the Company’s joint venture operations in Brazil and India.
“Our sales increase occurred despite a 23 percent drop in vehicle production at the traditional domestic light vehicle manufacturers,” said John C. Corey, president and chief executive officer. “Our management team’s proactive response to implement our manufacturing overhead rationalization starting last year will serve us well during the current slowdown.”
For the nine months ended September 30, 2008, net sales were $594.7 million, an increase of 9.8 percent compared with $541.6 million for the nine months ended September 30, 2007. Net income for the 2008 nine-month period was $10.9 million, or $0.46 per diluted share, compared with $10.2 million, or $0.43 per diluted share, in the comparable 2007 period. The earnings per share for the first nine months of 2008 include $0.37 per share for restructuring expenses.
Net cash provided by operating activities for the nine months ended September 30, 2008 was $30.7 million, compared with net cash provided of $7.9 million for the nine months ended September 30, 2007. The increase of $22.8 million in cash provided by operating activities was primarily due to lower accounts receivable balances in the current year. Stoneridge has approximately $90.0 million in cash at the end of the quarter available to support operations as needed. During this time of unprecedented economic uncertainty, the Company has taken steps to ensure that its financial assets are safeguarded and its liquidity protected. The Company’s asset backed credit facility remains undrawn and does not contain restrictive performance covenants.
Outlook
“As we announced on October 24, we expect full-year 2008 earnings of $0.40 to $0.46 per diluted share which includes $0.48 to $0.52 per share for restructuring charges,” Corey said. “We will continue to monitor the economic environment and take appropriate steps to navigate through this unprecedented period.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2008 third-quarter results can be accessed at 10 a.m. Eastern time on Friday November 7, 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
(Unaudited)
(in thousands, except per share data)
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
Net Sales | $ | 178,434 | $ | 172,814 | $ | 594,733 | $ | 541,644 | |||||
Costs and Expenses: | |||||||||||||
Cost of goods sold | 143,089 | 134,944 | 458,217 | 422,045 | |||||||||
Selling, general and administrative | 31,855 | 32,405 | 104,876 | 99,135 | |||||||||
(Gain) Loss on sale of property, plant and equipment, net | (187 | ) | 223 | (42 | ) | (1,465 | ) | ||||||
Restructuring charges | 2,742 | 2 | 5,877 | 74 | |||||||||
Operating Income | 935 | 5,240 | 25,805 | 21,855 | |||||||||
Interest expense, net | 5,049 | 5,467 | 15,301 | 16,570 | |||||||||
Equity in earnings of investees | (4,371 | ) | (3,506 | ) | (11,206 | ) | (7,924 | ) | |||||
Loss on early extinguishment of debt | - | - | 770 | - | |||||||||
Other expense (income), net | (234 | ) | 273 | 44 | 785 | ||||||||
Income Before Income Taxes | 491 | 3,006 | 20,896 | 12,424 | |||||||||
Provision for income taxes | 855 | 381 | 10,029 | 2,234 | |||||||||
Net Income (Loss) | $ | (364 | ) | $ | 2,625 | $ | 10,867 | $ | 10,190 | ||||
Basic net income (loss) per share | $ | (0.02 | ) | $ | 0.11 | $ | 0.47 | $ | 0.44 | ||||
Basic weighted average shares outstanding | 23,405 | 23,213 | 23,353 | 23,106 | |||||||||
Diluted net income (loss) per share | $ | (0.02 | ) | $ | 0.11 | $ | 0.46 | $ | 0.43 | ||||
Diluted weighted average shares outstanding | 23,405 | 23,694 | 23,728 | 23,656 |
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STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
September 30, | December 31, | ||||||
2008 | 2007 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 89,611 | $ | 95,924 | |||
Accounts receivable, less reserves of $5,029 and $4,736, respectively | 115,324 | 122,288 | |||||
Inventories, net | 67,543 | 57,392 | |||||
Prepaid expenses and other | 16,812 | 15,926 | |||||
Deferred income taxes | 10,150 | 9,829 | |||||
Total current assets | 299,440 | 301,359 | |||||
Long-Term Assets: | |||||||
Property, plant and equipment, net | 88,882 | 92,752 | |||||
Other Assets: | |||||||
Goodwill | 65,656 | 65,176 | |||||
Investments and other, net | 46,435 | 39,454 | |||||
Deferred income taxes | 21,714 | 29,028 | |||||
Total long-term assets | 222,687 | 226,410 | |||||
Total Assets | $ | 522,127 | $ | 527,769 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 66,465 | $ | 69,373 | |||
Accrued expenses and other | 53,864 | 47,198 | |||||
Total current liabilities | 120,329 | 116,571 | |||||
Long-Term Liabilities: | |||||||
Long-term debt | 183,000 | 200,000 | |||||
Deferred income taxes | 2,521 | 2,665 | |||||
Other liabilities | 1,926 | 2,344 | |||||
Total long-term liabilities | 187,447 | 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 24,772 and 24,601 | |||||||
shares and outstanding 24,668 and 24,209 shares, respectively, with no stated value | - | - | |||||
Additional paid-in capital | 157,281 | 154,173 | |||||
Common Shares held in treasury, 104 and 373 shares, respectively, at cost | (129 | ) | (383 | ) | |||
Retained earnings | 49,239 | 38,372 | |||||
Accumulated other comprehensive income | 7,960 | 14,027 | |||||
Total shareholders’ equity | 214,351 | 206,189 | |||||
Total Liabilities and Shareholders' Equity | $ | 522,127 | $ | 527,769 |
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STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended | |||||||
September 30, | |||||||
2008 | 2007 | ||||||
OPERATING ACTIVITIES: | |||||||
Net cash provided by operating activities | $ | 30,668 | $ | 7,909 | |||
INVESTING ACTIVITIES: | |||||||
Capital expenditures | (17,956 | ) | (14,259 | ) | |||
Proceeds from sale of property, plant and equipment | 435 | 5,042 | |||||
Business acquisitions and other | (980 | ) | - | ||||
Net cash used for investing activities | (18,501 | ) | (9,217 | ) | |||
FINANCING ACTIVITIES: | |||||||
Repayments of long-term debt | (17,000 | ) | - | ||||
Share-based compensation activity, net | 1,305 | 1,956 | |||||
Premiums related to early extinguishment of debt | (553 | ) | - | ||||
Net cash provided by (used for) financing activities | (16,248 | ) | 1,956 | ||||
Effect of exchange rate changes on cash and cash equivalents | (2,232 | ) | 1,119 | ||||
Net change in cash and cash equivalents | (6,313 | ) | 1,767 | ||||
Cash and cash equivalents at beginning of period | 95,924 | 65,882 | |||||
Cash and cash equivalents at end of period | $ | 89,611 | $ | 67,649 |
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