Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS THIRD-QUARTER 2004 RESULTS
— Net income up 26%; net sales increase 17% —
WARREN, Ohio – October 21, 2004 – Stoneridge, Inc. (NYSE: SRI) today announced sales of $164.3 million and net income of $3.9 million, or $0.17 per diluted share, for the third quarter ended September 30, 2004.
Net sales increased $23.5 million, or 17 percent, to $164.3 million compared with $140.8 million for the third quarter of 2003. As was the case in the previous two quarters, the increase in sales was primarily due to stronger performance in the Company’s served commercial vehicle markets. Net income for the third quarter was $3.9 million, or $0.17 per diluted share, an increase of 26 percent compared with $3.1 million, or $0.14 per diluted share, for the third quarter of 2003.
“We are very pleased with our third-quarter performance,” said Gerald V. Pisani, president and chief executive officer. “Like everyone in our industry, we have been operating in a difficult environment with rising commodity costs, customer pricing pressures and increased costs related to Sarbanes-Oxley requirements. The focus at Stoneridge on Six Sigma, Lean Manufacturing and supply chain excellence has enabled us to achieve our third-quarter estimate and maintain our guidance for the full year.”
For the nine months ended September 30, 2004, net sales were $518.4 million, an increase of 14 percent, compared with $455.4 million in the same period of 2003. Net income for the first nine months of 2004 was $22.4 million, or $0.98 per diluted share, compared with $16.3 million, or $0.72 per diluted share, in the comparable 2003 nine-month period.
Net cash provided by operating activities for the nine months ended September 30, 2004 was $26.9 million, compared with $51.0 million for the same period in 2003. The decrease in cash provided by operating activities was primarily due to an increase in accounts receivable resulting from the increase in sales, and a planned increase in inventories to cover customer requirements as the Company combined three plants in the United Kingdom and started up an operation in Mexico. The increase in inventory was also attributable to delays in certain product launches.
Outlook
Based on the current industry outlook, Stoneridge anticipates fourth-quarter 2004 net income to be in the range of $0.12 to $0.22 per diluted share, compared with $0.22 per diluted share for last year’s
-more-
2
fourth quarter. Fourth-quarter net income will include costs associated with the Company’s three- plant combination in the United Kingdom, additional costs associated with the Mexican start up operation and costs related to Sarbanes-Oxley requirements. For the full year of 2004, Stoneridge expects net income to be in the range of $1.10 to $1.20 per diluted share, compared with $0.94 per diluted share for 2003.
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2004 third-quarter results can be accessed at 11 a.m. Eastern time on Thursday, October 21, 2004, 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-road vehicle markets. Sales in 2003 were approximately $607 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. Factors 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 decline in automotive, medium- and heavy-duty truck or agricultural vehicle production, the failure to achieve successful integration of any acquired company or business, labor disputes involving the Company or its significant customers, risks associated with conducting business in foreign countries, or a decline in general economic conditions. In addition, this release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Stoneridge 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 Stoneridge’s periodic filings with the Securities and Exchange Commission.
-more-
3
For more information, contact:
Joseph M. Mallak
Vice President and CFO
330/856-2443
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands except for per share data)
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
NET SALES | $ | 164,286 | $ | 140,832 | $ | 518,365 | $ | 455,416 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of goods sold | 124,836 | 106,462 | 385,676 | 339,796 | ||||||||||||
Selling, general and administrative | 28,877 | 23,273 | 82,785 | 71,277 | ||||||||||||
OPERATING INCOME | 10,573 | 11,097 | 49,904 | 44,343 | ||||||||||||
Interest expense, net | 6,031 | 6,805 | 18,528 | 20,558 | ||||||||||||
Other income, net | (358 | ) | (187 | ) | (757 | ) | (180 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 4,900 | 4,479 | 32,133 | 23,965 | ||||||||||||
Provision for income taxes | 979 | 1,378 | 9,712 | 7,667 | ||||||||||||
NET INCOME | $ | 3,921 | $ | 3,101 | $ | 22,421 | $ | 16,298 | ||||||||
BASIC NET INCOME PER SHARE | $ | 0.17 | $ | 0.14 | $ | 0.99 | $ | 0.73 | ||||||||
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING | 22,630 | 22,410 | 22,605 | 22,410 | ||||||||||||
DILUTED NET INCOME PER SHARE | $ | 0.17 | $ | 0.14 | $ | 0.98 | $ | 0.72 | ||||||||
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING | 22,925 | 22,758 | 22,863 | 22,676 | ||||||||||||
-more-
4
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, 2004 | December 31, 2003 | |||||
(Unaudited) | (Audited) | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | 32,145 | $ | 24,142 | ||
Accounts receivable, net | 118,579 | 89,161 | ||||
Inventories, net | 58,992 | 48,047 | ||||
Prepaid expenses and other | 13,845 | 10,420 | ||||
Deferred income taxes | 9,763 | 7,856 | ||||
Total current assets | 233,324 | 179,626 | ||||
PROPERTY, PLANT AND EQUIPMENT, net | 112,933 | 116,262 | ||||
OTHER ASSETS: | ||||||
Goodwill | 255,292 | 255,292 | ||||
Investments and other, net | 29,202 | 28,487 | ||||
TOTAL ASSETS | $ | 630,751 | $ | 579,667 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Current portion of long-term debt | $ | 38 | $ | 417 | ||
Accounts payable | 64,474 | 53,594 | ||||
Accrued expenses and other | 65,585 | 54,569 | ||||
Total current liabilities | 130,097 | 108,580 | ||||
LONG-TERM LIABILITIES: | ||||||
Long-term debt, net of current portion | 200,149 | 200,245 | ||||
Deferred income taxes | 30,143 | 25,288 | ||||
Other liabilities | 2,623 | 2,148 | ||||
Total long-term liabilities | 232,915 | 227,681 | ||||
SHAREHOLDERS’ EQUITY: | ||||||
Preferred shares, without par value, 5,000 authorized, none issued | — | — | ||||
Common shares, without par value, 60,000 authorized, 22,759 (net of 7 treasury shares) and 22,459 issued and outstanding at September 30, 2004 and December 31, 2003, respectively, with no stated value | — | — | ||||
Additional paid-in capital | 145,125 | 143,535 | ||||
Retained earnings | 121,179 | 98,758 | ||||
Accumulated other comprehensive income | 1,435 | 1,113 | ||||
Total shareholders’ equity | 267,739 | 243,406 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 630,751 | $ | 579,667 | ||
-more-
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
For the nine months ended September 30, | ||||||||
2004 | 2003 | |||||||
Net cash provided by operating activities | $ | 26,867 | $ | 51,037 | ||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (18,108 | ) | (11,615 | ) | ||||
Proceeds from sale of fixed assets | 16 | 832 | ||||||
Business acquisitions and other | (714 | ) | (3 | ) | ||||
Net cash used by investing activities | (18,806 | ) | (10,786 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Repayments of long-term debt | (359 | ) | (22,355 | ) | ||||
Net repayments under revolving credit facilities | — | (715 | ) | |||||
Proceeds from exercise of share options | 376 | 258 | ||||||
Other financing costs | (134 | ) | — | |||||
Net cash used by financing activities | (117 | ) | (22,812 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 59 | 730 | ||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 8,003 | 18,169 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 24,142 | 27,235 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 32,145 | $ | 45,404 | ||||