SRI - Earnings call transcript Q1 2019

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Operator

Good morning, ladies and gentlemen, and welcome to the Stoneridge First Quarter 2019 Conference Call [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Matt Horvath, Director of Investor Relations.

Matt Horvath

Thank you, Crystal. thank results. joining and our to everyone, quarter first morning, you us for discuss Good and presentation website release presentations. and the The accompanying section is yesterday the investors posted evening SEC on webcasts our under at in was www.stoneridge.com and filed with

me Jon our Chief call President our Chief are Bob Officer and Krakowiak, today's Financial on and Joining DeGaynor, Executive Officer.

to statements today forward-looking statements. Before certain we may that begin, inform you I need be

results that statements information are not plans. nature in include future include historical concerning and our statements or Forward-looking

Although that subject based actual should and we statements reasonable upon are and materially. believe that these such assumptions, you results uncertainties to understand may differ are statements risks

has about differ the SEC been actual factors such statements. that uncertainties under results the information heading may could in to found forward-looking cause which filed Additional be with and XX-Q, our

During financial finished also up today's certain turn of I and Jon. measures. Please referring the will that single call then a to the call to GAAP non-GAAP After follow-up. measures these I'll comparable the financial to their the open to With reconciliation call, appendix directly measures. you a over for are questions. ask see non-GAAP Bob be we Jon you that, would we to formal have your keep question remarks, most

Jon DeGaynor

morning, Thanks, everyone. Good Matt.

In Let performance. financial strong first me transformation quarter, on company Page while delivering the of begin X. we the continued our

for translating was of we basis on fourth an sales quarter the quarter an was our points XXXX, XX.X%, margin first of operating Adjusted Our operational to of efficiency. as to gross margin in $XXX quarter relative resulted XX EPS driving X.X%. focus adjusted the adjusted million of $X.XX. improvement This continued of an

focusing we business. strategic our on within continuously In the review efficiency, to addition alternatives operating

technology and closure our within During the This the to divestiture allow facility, facilitate focus estimate and our the year. future will us $X.XX connectors quarter, reduce supply to announced chain. that noncore guidance Canton Devices. of resources business manufacturing of the on that by impact growth. to the It platforms would only also divestiture, transaction and to This we Control our $X.XX will reflect of drive switches we adjusting operations we're year morning, the for impact complexity EPS in full which

are as relates as we confident the We our remaining plan. to to maintaining our guidance deliver our it ability business XXXX are in on

of accretive complete remain be we that will expect Going divestiture But our by reduce to annually. revenue million With forward, closure approximately XXXX on will in track our Stoneridge initiatives. we divestiture, facility margin the that divestiture this $XX XXXX. Canton and

provide to and Finally, second rollouts with an MirrorEye progress of and quarters on this remain morning I'll our both expected update commercialize well We opportunities. in positioned market retrofit with retrofit the year. third on this partners in our the broader freight OEM MirrorEye

our key OEM expecting as well optimistic two updates trailing and made are to year X decision the end financial remain made to by pursuits second We made. sourcing or we quarters summarizes in more Page relative will the are prior next Additionally, year. be the early OEM decisions as provide an XX quarter our to related months. metrics with of as

basis contributed the as freight of XX summer XXXX. basis margin decline issues prices while XXXX. that and first to in attributable of operating the gross declined of the shortages, declined was in and the improvements During basis points, Quarter-over-quarter, gross operating quarter increased factors tariffs by we we to margin introduction related margin premium electronic XX XXX well points. as basis relative component points, the margin cost to continued to The significantly operating expedited have adjusted quarters, primarily external address of certain respectively, and by in quarter, and gross driving prior first discussed margin adjusted which points to XX adjusted

Excluding despite excluding per same tariffs, increased XX-month approximately have grew by reduction XX%. quarter-over-quarter impact period, X.X%. operating adjusted in down X%. costs share adjusted of related The margin the increased of ramp sales would trailing and in increased the revenue period, the Shift-by-Wire, shortages electronics Sales to increased by grew slightly earnings

and We focus of performance long-term to are committed within our on in EBITDA factors that or continue the XXXX. quartile external margin remain to XX.X% work our financial least factors. to offset at control target to We top

the out the segments Page our to with each year, Turning Stoneridge strategy XXXX. Earlier to this of company detailed a continued X. laid of referred we transformation for as

to Each core by of complete initiatives solutions the system will sustainable XXXX. initiatives segments the will technologies of Our accelerate of XXXX based remains drive development the outline that end the Stoneridge on to enable growth. our long-term track

Control almost trailing increased Devices products. the months, primarily XX emission by by driven actuation Shift-by-Wire, X% Excluding our revenue in sensing and

as exit The through a continued at structure. We optimize that for result Devices of basis will focus cost improved Control continue XXX focus. to efficiency. factoring Canton of facility margin help operational to points quarter-to-quarter on improvement remaining Operating segment and by this our footprint margin

manufacturing by exit the expected We the facility the in XXXX. overall to of XXXX Canton of -- exit operations exit quarter first expect at an end the of with

fully Switches Control the forward, next our year, technologies complete divestiture the operating Looking growth. that and improved business Devices. to on strategic Connectors allows review future drive Devices reduction would our the Control at to and for exiting The offset of margins to structure core the the the noncore focus divested businesses in us facility related of leading almost cost will earnings

opportunities us. detail in in We are MirrorEye I the specifically, in with our discuss will in call. pleased continued of later and growth the More business Electronics front the

increased to as quarter. technologies, expenses discussed expect related delivering We we growth developing last engineering continue and to

alternatives or the review divestiture or Those to combination in Finally, some products of we and include segment. Controls business Electronics strategic the our of noncore continue for alternatives the business restructuring of both. could Switches the

this conclude expect the year. forward move the to with We review and solution

OEM help scale we in that business. serve global existing confident our are customers can utilize commercial also better to we Brazil PST, and For our footprint vehicle our

working announced. impact already margin than more which are by Despite awards of build revenue annual on foreign reduced additional unfavorable currency, in by points awards peak million region we basis XXX operating We we resulted income operating quarter-over-quarter, XX%. and the improved the OEM have towards to revenue in $XX of

Our quarter, Stoneridge team the the segment Page long-term performance within will growth. the the improve X, Motor company. continued the our divestiture continues to Devices. will future the on drive better was to us we of environment. This position important Standard of to divestiture through profitable technologies and segment focus growth on initiatives, transformation product to navigating and to macroeconomic lines each sensor remain allows announced of for Products. the our On actuation business while continue resources the divestiture which we Overall, difficult complete during a track Control The certain XXXX that for transformation

costs. of American certain the manufacturing elimination fixed facilitates North right-sizing and Additionally, transaction our footprint of a

Devices Finally, strategic later this activities divestiture detail more reduce review portfolio. adjusted Control divestiture margin and will discuss improvement the to for the supply This drive guidance us in will the will on Bob allowing manufacturing of the segment. complexity the chain the operational to organizations, in continue that our concludes call. divestiture in focus to related our

we lines our efforts in align as Our to noncore transform continue controls to long-term will and to with product move Electronics, portfolio strategy. similar switches our

X. Page to Turning

be date, retrofit fleets, and partners the total have have to from over American with and positive both and trials forward our continues to future potential fleets move by To expanded to helping driven we The our systems. X of fleet miles to product shape than more partners commercial continue and feedback MirrorEye commercialization million capabilities. North with we features customers. XXX,XXX in MirrorEye is vehicles representing OEM We our XX

to the OEM customers. momentum with we made have to our we addition fleet progress our partners, In with gain continue

have we program MirrorEye global OEM, have rewarded vehicle we global previously, As announced commercial a OEM. with with been a already

X been additional that solutions. award, develop OEMs addition global MirrorEye have In we to to with working

X OEMs announced, for We quarter will Including or XXXX. XXXX. we announce and late sourcing the previously European in production a the the decision OEM than with XXXX more two have the sourcing early these in of in second American of accounted X OEMs other expect decisions half vehicle award announcing commercial North the that

approximately market replace vision Class system be to a estimated in receive penetration for X Europe discussed OEM only market XX% As we've at rate to XX% driver and previously, on vehicles to annual X MirrorEye to the the we Class have to million $XXX remains FMCSA North opportunity the from physical MirrorEye America. exemption mirrors.

our active safety continue ensure execute basis and solutions our plan available mirror is and leading We to fleet in both customers OEM that camera commercial the future on vehicles. for to it system MirrorEye's to

executed performance transformation on to quarter our first and the of of our company X. Stoneridge as the we quarter. financial continued initiatives. with I'm in XXXX Turning pleased achievements We another our delivered Page strong

will we product continue to With continue detail. to financial over product our continuous on our our turn continues Bob switches more future long-term strategy, our I'll that and and deliver on and and noncore technologies growth. to discuss fleets with to connectors we With focus portfolio shareholder MirrorEye move value. execute our capabilities the forward and OEMs. will platforms resources improvement Stoneridge, drive drive to refine of divestiture lines, results the it At that, to in

Bob Krakowiak

Jon. Thanks,

million, quarter-over-quarter, income or of X% XX% in same operating income $XXX.X year. operating to improved period or of here. adjusted last XXX last Slide of the XXX Control of morning, the period of X.X% X%, margin was quarter points of Devices of period guidance. sales. X.X% of decreased sales. million by of we adjusted points improved million basis while $X.X increase of were operating the operating over margin XX. relative increased year. million our in decrease Sales decreased first XXXX to million a the Adjusted an operating by last specifically, million operating income sales of are was in X% XX.X% resulting Adjusted sales $XX.X to of resulted or This over million same $X.X $XXX sales. adjusting Adjusted PST XX% More which sales quarter Turning same relative X.X% basis to by the $XXX first $XX.X Electronics income million, XXXX. $XX.X

to in We announced be line the provided expect impact our less of recently our with previously guidance guidance divestiture.

the of expect to Page Devices. Control I our provide in will to As EPS XXXX. detail summarizes adjusted call. key and cadence XX $X.XX additional expect earnings and $X.XX discussed previously, by financial reduce in guidance our we later for metrics divestiture to our revenue the

base grow operating excluding been partially headwind. relative $X.X offset which due Shift-by-Wire first and Adjusted margin down a Shift-by-Wire. Control products by see points represented by million prior quarter operational quarters, and the The to has to in Reduced million in slight growth declined led in of to emission was strong $X.X and by the continued sales quarter XXX quality-related continue XXXX expenses our Shift-by-Wire, continues of demand Devices basis increased fourth impact in market. reduce of overhead the and we to direct Control As case XXXX of Devices sales. as material the the in portfolio to to anticipated ramp improved the in costs. decline sensing China, relative efficiency a increase local

Additionally, expense quarter-over-quarter, additional of for headwind. adjusted tariffs points operating with basis or XX accounted $XXX,XXX margin

Excluding XXXX. adjusted months of segment. quarter basis of declined throughout through operating margins. XXX and in Page contribution XX the margin first decline relative product tariff by operating expansion margin adjusted highlights historical on the Control related focusing portfolio points operating our Devices our is growth revenue the Electronics expectations is XX the on in The while consistent expenses, based income in improvement. with last over magnitude margin growth to our continuous delivering the

exchange XX%. Our XXXX, in basis of a the Electronics resulted compared sales which relatively $X.X the operating quarter improved flat XX%, In to despite XXX grew were income adjusted headwind XX unfavorable related while to currency quarter, by margin operating sales the months, of of points, million last growth first adjusted rates.

and in Orlaco approximately increased vehicle the of currency sales commercial in offset Continued headwinds. production European strength products

were quarter-over-quarter by basis currency relative Excluding by Adjusted impact of XXX the exposures, currency, points, we for operating operating on primary Based FX increased with expect increased significant the ease and businesses. XX% of actions first lower XXXX impact of unfavorable increased by forecast costs delayed and progresses. as part, of reduced, engineering flat SG&A X.X%. our previously to margin adjusted foreign our Design a was and announced than as aftermarket component cost to to relatively in revenue restructure due spending result taken increases the development due of and tachograph quarter expected electronic unfavorable sales year to quarter forward-looking income third-party, cost. shortages.

continues subside and We to shortages expect which deliver increases. to and engineering a growth costs to over as will the the of remainder component electronic above margin expect an performance these incur improving deliver costs related underlying led to the markets capacity year product solid global Electronics by our also portfolio, strong financial profile.

currency XX. significant Quarter-over-quarter, XX%. adjusted to to points the PST growth of an impact million by Relative page declined PST PST the adjusted XXX of to had challenges, in income successful to continues $X.X despite quarter margin improved unfavorable Turning macroeconomic by quarter movements. including resulting operating revenue of currency. drive another XXXX, first margin basis improvement. foreign due operating

cost at PST. to Continued OE XXXX, first macroeconomic driving with focus significant of the is expansion on controls despite contributed profitability in We're this and while quarter margin growing expansion. capabilities segment margin PST performance pleased challenges.

divestiture. XXXX reflect XX. are adjusting Turning guidance of the This morning, we our impact Page to to the

of guidance business. the previously maintaining our are adjustment the provided with related being only reduction divested the We to

by million our offset revenue million, be previously, generated agreement during As manufacturing we contract will to divested reduced as period. revenues be revenue $XX approximately somewhat $XX through the transition we outlined to expect by

expect the quarter. $X reductions and We $X million of to second revenue million in third

also will We manufacturing the the contract fourth materially quarter, in recognized expect bulk as of reduction be result, quarter. the a will during third revenue the after end

result $X.XX to of expect XXXX. we the for remaining per reduced earnings a quarters As $X.XX of X share divestiture, the of

income. the reduces divested agreement manufacturing provide to now for revenue offset contract XXXX, the will in of divested While impact significant the it

We that quarters evenly impact approximately throughout expect of the EPS will be the spread X final the year.

year. revenue the said, of we the result the of first down of will the and expect Shift-by-Wire of lowest between ramp our the we quarter a divestiture, of expect split and approximately That quarter still XX-XX that continued be As halves second revenue second of year.

Finally, have account margin expectations year our through of for divestiture. to adjusted we operating for the remainder the the

We have margin XX for portfolio As operating of to overall the rate. with business adjusted overall margin we year. XX reduced lower previously, growth basis a was our in the divested the the margin full by discussed points higher

operating half midpoint We expect of X.X% margin midpoint our second margin and of adjusted first half X.XX%. operating adjusted

and margin continued we capital improvement, remain no opportunities to addition optimal as approximately our In the On the to post-transaction. in of business second shareholder investment including our of committed Page net reduce continue ineffectively cost our of shareholders. divestiture the We M&A leverage and expansion resulting $XX driving XX, cash, our efficient use return valuation in available maximizing existing generated progresses operating million return components electronic expect half of through of to to capital, the year. year

an As million our October previously, executing the a remain divestiture to first in of the we period. shares, of have in our Board to to authorized announcement time announced repurchase authorized XXXX inability executed Directors the committed of $XX in Despite period. quarter, over share the program we repurchase to be the XX-month prior program

the base financial strong guidance business I we closing, our Moving that our quarter. remains to the our and of strategic to is that, all morning, first In to reiterate all at with our for committed value Slide divestiture to questions. XX. of call maintaining key We With that are only adjusting performance. delivered the for open focus want of pleased Stoneridge our announced our driving shareholder are forefront related metrics. for results I'll the initiatives. in we This

Operator

[Operator first line comes Long of Instructions] with Stephens. Your the question Justin from

Justin Long

Congrats on the quarter.

today? number And expand about product XXX,XXX initial start more that retrofits see Could just So are do of on on what a vehicles the you fleet thoughts entails? can plus to I with wanted a any have evaluation based little evaluating bit MirrorEye. you you these the

Jon DeGaynor

expansion an done The our already with initial fleet are what of fleets. we've evaluations leading

sure technology to that and driver's of the bit understand any little get and the they reaction. fleets situations, their more it, So a want trial in make these

necessary activity to and expand we regards this what gives to regards the with forward forward, before assume it's first we're of and logical retrofit planned. a in So specific we the expands that guidance what which we're overall more retrofit signaling extensively. confidence With will continuing and move step year to is right don't give But we volumes fleets the with that. working balance our going the us as trials, we're

Justin Long

what MirrorEye will of X thoughts timing awards confidence And you any as based about the OEs, around and global timing then on of OE visibility And launch? that updated the timing materialize MirrorEye the your your planned? that what's from potential for the said the launch

Jon DeGaynor

Well, on there's program, X any the program award between that we've customer we're confident that so timing Justin, launch. lag Obviously, a announced, a talked before, with And of of that's the have production. program. and we a start OE XXXX

but of still, we with actually, the want to talked about it we've an post they But OEs, talked beyond. accelerate that point, subsequent support these where And the that. the are see belief, them about So having OE we that to the conversations we've we're penetrations from penetration at it's and now. still of would at product. the prepared And time scripter we're a that may and in and all XXXX launch this the awards still, we're right standpoint, it's

Justin Long

what wanted lastly, just imply then it midpoint the And seems implies. right, from versus basis expense operating of quarter, that is XQ Okay. XXX you you at points I I just when so operating just how the Bob, down that step think would math clarify of X.X% the about engineering somewhere items? that level sequential guidance. timing first around or guidance is When much at if margin something that margins half look to other could first to the say that of on my be

Bob Krakowiak

walk. the me primary There's quarter just you respect quarter four first the from really through. Well, the walk to you variances to go Justin, when with let second

by is the continued one Wire. Shift roll the first The of

lowest year. mentioned, as will quarter revenue QX call of on that the the I be our So,

in contribution the to QX. our well. by EBITDA that basically, on with out are up down so as way during margin keep Wire So margins our And, work's Shift on mind, the X times stabilizes bottom and way and X.X that

first So of it. component that's the

component second The impacted is divestiture. the revenue

had take the we year. midpoint said you the spread basically and throughout equally So XX.X% it you

that third next upper of the And the piece was the piece you the timing that's then So spend. earlier walk. engineering mentioned

the piece So plan puzzle, part didn't some as apologize, beat during look quarter. was, you in this us as around midpoint, second quarter, if but relating to so guide tax to was fact recur. this a credit of planned Justin, XX% quarter, in one-time for much was that guided of that we a And we good We XX.X% the the R&D at our then the first rate the recouping we year rates, last of the tax on our that I the had an that's we going quarter. not to spend first

$X.XX was that to a well. news So as $X.XX, good

the if that's just at of about with just the thought And basically in we then, think, So you guidance, walk. Justin, market. and year customers the in the the terms I start how looking overall

been if of SUV, very truck market strong us look CUV pass to our be and the and segment. at this relatively continue you Traditional majority they be continues overall is passenger neutral. slow. for light volumes to So cars But slow, in has car

Commercial then was as continue than So strong to well. aftermarket China And we little bit have there. some better in nice vehicles tailwind be expected.

of neutral not the control. at really you then, look when terms market. we in what And So

than the in We we full for to off slightly year. control you positive start more operationally got better we at when little guidance so are a anticipated we look what the

lower our and we but rate engineering tax the well, spend, As QX, tax than the year budget of rate I anticipated the mentioned in remainder the during as mentioned guidance. the was I spend under-spent earlier,

we QX. of in the slightly relative puzzle the that's overall, you of terms when the to in piece at positive And So other currency then here. markets, expectations we're what our look control

a currency So in been has QX. headwind

the but negative. forecast at that's around you the bank overall, If amount a consensus they're our look the favor, I also And moving in slightly significant volatility is would primary within bank currencies, say forecast. our of

the consensus banked bank that currency going the is market to been on fact that the viewed. recover the haven't at has We rate

come we an, X and slightly negative, with factors together, weigh that's basically guidance. those out So overall, we

So that's we where to before. flat were

Justin Long

first that on expense much And just sequential you was up quarter? a margin piece to to the engineering expense to How step on of a second basis that. walk, engineering quarter be expect do clarify up

Bob Krakowiak

We, Yes. its $X.XX… $X.XX,

Justin Long

$X.XX. $X.XX,

Okay. again. Perfect. That's congrats helpful and

Operator

Stember Your next the line CL comes Scott King. of question with from

Scott Stember

the Jon, versus of the you're or the trying of frame maybe give MirrorEye to about of side. these were that to maybe to how talking or fleet you how us of increase but up don't going and the just this seeing? frame much evaluation with the the just I know quarter about fleets big back the just an number talk in about XXth fleets, out prior if retrofit we I'm from indication previously, increase much evaluations vehicles within XXX,XXX an how talked

Jon DeGaynor

question. your for thanks Scott, Yes.

supporting talked haven't they it maybe fleets in had been even we've We three, think fleets on probably lead the process. fleet evaluations the the fleet those the that FMCSA through And involved somewhere exact now we've us, that the roughly But three were was and ones to specific vehicles. absolute of of first I we evaluations. XX. really represented were expanded on and XX,XXX order five that of were the

XX So that now fleets control. of fleets the this in evaluation fleet with a vehicles XXX,XXX they is

fairly it's So expansion. a material

right is, that fleet fleets making here. us for it's manner, that the generating with. we by approach the feedback, trying product this and think as and And said take. drivers comfortable can a is before our something have we're are do we're use, and we're continuing about we And that with what appreciate really trial stepwise progress it's we making in sure to the So to that refine pleased doing to this

Scott Stember

that how maybe up well getting amount and then conservative across with there's could guys you you initially that about the rates just has before and for the But rates support take originally of Can XX% that have And tremendous I take XX%, question, about, been built was talk FMCSA a MirrorEye. the think, specific, expected your industry be? to as too talked on next I you ground the thought OEM those then. when side maybe guess, exemption without retrofits since

Jon DeGaynor

America, Yes. control it's really remember together. we the controlled Scott, OEs in controlled you have to by don't North it's the the by That's fleets that. and that controlled OEs and working

respond is feedback and we're We're visibility to their and by not the as from constant number right we've that Sure. fleets Do prepared trying we're rate controlled we're trying the because that that OEs. our rate for it take go changes and what we make us. different we're the think different make the to to we're take robust So now we're But that the most do know been requirements. sure that to that expectations communication that all in the OEs. anything is don't is could OEs we we taking to have a sure the meeting by product give higher? But going from isn't you with given

Scott Stember

lastly, of the Products. just to maybe divestiture And just Standard dig the to into again some Motor related transition

But from here job pretty quarters explaining, of things higher I are level just to through the work. a how done a guess, going good You've perspective.

during many it gets transition numbers? it to be on the there And you how transitory excluded Just any going this operating be that guys to have something incur inefficiencies from are, -- if is going your is period end? to that the

Bob Krakowiak

the in if movement inventories. of a that things that a out inventories there's perspective of some the notice the so transaction is cash for most a you'll probably, at me is, little important think, a, statements, and I buildup point look from one flow the of around cash So, flow statement bit of there's to the things you that, thing

selling we assets. So so about think the building keeping are facts, the that we're Scott, but business, maintaining this we're the the, we transferring we're

you transaction part a need get you you anytime banks. So build transferring equipment where into to are

started got can will where install approved you've it's through So first equipment, and in they inventory process a test inventory the to to new got got the begin go and that got before the and at we location, to they to product. where building it, process shipping move we're they to they've we build quarter continue because

got So to in bank place that. facilitate we've in to a have order

an of that that, So of statement a inventory than you of our a couple bit flow cost other And just the see terms out quarters. over we the will will in on cash from results. next little associated transition the with adjust blip then of the perspective

Operator

next question Chris Van with B. Horn the Your comes from Riley of line FBR.

Chris Van Horn

have mentioned what I cost, the get changes. was in Are into do you'd expecting Or with different hoping Can imagine in you reduction there? or you detail to sourcing Electronics a alternate bit a some in you production, component some they think to, I do more supplier? there? little just shift

Bob Krakowiak

similar at, look the to very if you I'll look you so you if comparison at, It's give tariffs.

first we in we of like than actions this the were are to was for has be tariffs So them $XXX,XXX in $X.X us and and it the team at quarter. was Still place year, was mitigating then $X.XX actions million quarter and mitigating it year. the P&L. started the team second seeing a running at taking second fourth in running of year about, results in the moved quarter so tariffs half would the last the million of quickly higher in through putting it And half quarter the the but third

the see thing the you'll on same components. So Electronics

qualify automotive be a of things. our terms acquiring X will to Its necessary products, products. industrial and with capabilities really potentially number current of which expand to spec really suppliers, it's as in then the be looking components able It existing also specific alternative spec will things. versus suppliers combination products. a It So be will redesigned capacity redesign of suppliers. of alternative using It's

year. really going and of it's categories we're those that's So the to in over X how work balance that the down

Chris Van Horn

that? into Devices, mentioned Could you saw get costs. gross margins headwinds you in due higher Control some warranty then And detail to some on

Jon DeGaynor

What Chris, down. That the some an previously, within in fact, of was, XXXX or quarters, warranty talk have And seen talked XXXX. both XXXX basis, we quarter. to volume Control ex this Devices, previously. quarter-to-quarter operating Shift-by-Wire in operating about customer quality QX, made and QX issues. with actually QX challenges previous we QX progress on a we progress We actually didn't standpoint about that from for

Chris Van Horn

detail And Electronics. you then that? you get more cited product into Could in mix on

Bob Krakowiak

terms mix, EBITDA at think, in performance seen I margins we expectations overall about mix margins we've just, of, in talk see, you and product and Yes. you our if we the X.X times favorable consistent I was overall at X always you terms of our at, with look electronics product of incremental look been on the mean, if Chris, level. look contribution to Electronics if

Chris Van Horn

last on around including or in are revenue revenue me. your MirrorEye? guidance then retrofit some from just OEM And What some you, either

Bob Krakowiak

Chris. do both. So to nothing this The have on We the side. retrofit OEM revenue retrofit for year, revenue included side

haven't disclosed specifically We amount. that

Operator

comes Your & Hinman from line Company. next DeForest question from of the Walthausen

DeForest Hinman

in about important and wanted talk you performed guys I about a for was the then to feedback understand characteristics dust, other talk fleet touch in to than we environment what drive the winter, the how just And maybe from MirrorEye that. and the the more some bit And salt, about talk maybe the system fleet a received Can a I the questioners. challenging feedback? which think ice of it's different like ongoing little fleet partners? way of aiming to

Jon DeGaynor

night. in positive. is time and for that particularly why did feedback the inclement the the of visibility, the and So we ability, What some been reasons weather work to question. bit to one in we snow. improving quality consistent in night positive clarity has visibility feedback to has visibility overall, very feedback. just positive. the the visibility, have we at in It's been brightness the to of our like trials the of specifically, had as say why rain get conditions of has adjust at the way regards want extremely helped taken that And done we've been us before, it, I certainly example, thanks feedback for with But of on display, inclement little feedback There's fairly

DeForest Hinman

so system they've understand, just they in they we saying performance? I'm terms environment enough So be gone seen type full-year we I every they And months in regard, in over at conditioning the partners fleet of season, a of guess, the basis? view, of perform facing length where that XX that have every have how

Jon DeGaynor

yes. is, five the about, first talked we answer as Well that for fleet

activity ones no. that's as, that more added an basis to we're we fleets the what aggressively. as that consumer the to feedback measured that this we as because on why product it's recently, trying that's the opposed And what And fleet his the that of a But getting trials product make incremental as this anything driver, go to development much For needs. feedback we're understanding, is self a ultimate add sure answers, is. why

DeForest Hinman

we the figured? how All shared can than And with take from you people, What in potentially those then of they've just fleet pilot? seen be information we the people? information of trials, confidential other help the others? other first five understand some guess, Or can share I sense it the us results the that can with and

Jon DeGaynor

And that of Yes, us. course. comes through

with So we that fleets the been set have up work specifically a to team take to that has feedback.

We have a on full-time driver staff.

our installation to we're product our says So activities. our goes driver that what into refining does training of from to development everything And what translating back another product our all the both to materials activity. we're And driver.

So the first that of trials. trial us done fleet the have and that's fleet But our team. through benefit next the

Bob Krakowiak

technology fleets to I like One by MirrorEye industry Bob. shows public. can along talking current at several pass that our DeForest, it's those thing we that just is there of available we also event. of been as And those our to evaluating that trade number would a of have a And have about you result that are the number panels are And a well. articles are in as

DeForest Hinman

X those analogy for going the the in are I -- And are out figuring mean, how then they partners. out roll retrofits? baseball of the potentially in, they inning to just fleet what terms maybe first

Jon DeGaynor

Yes.

retrofit them Somewhere them we're work with continuing device. gets to it middle, on well. into fleet And into rolled OE trials with the expanding how as in the both or we're their

DeForest Hinman

I don't know you up if broke there.

think I missed I first part. the

Jon DeGaynor

inning. You asked said fifth. And I me the what

DeForest Hinman

fifth. The

repurchase didn't And shifting gears I side. the hear Okay. on then that. share

potentially and program us put blackout talking we thinking be place a in I'm put within or on working situation just -- in there blackout about any potentially period repurchases? type just retrofits share us a of understand. where help with so, we And larger maybe continuous if is could with where some a can buying is does that the You're OEs out there fleet ramping loud, operators.

Bob Krakowiak

then would as negotiation to is nothing related preclude into for there's customers with with program. our What's us the SMP Yes, a we're the the commercial of prohibited that divestiture. any negotiations entering on repurchase share

our So we that trading to But last buy timeframe program windows well. remain and we're comments, we obviously, to I back as quarterly go been my to then as the and fully market market of kept able committed that but that normal us year. we to stock actual into we out our have announced with respect just everyone have as frustrating and the want reiterate

DeForest Hinman

forgot I guess, to one I question. last this ask

with work pilots, fleet fleet with information allowed On the but that OEs to they the talked other share about operators, done we their on as for decision? that I work the sharing we've the are the

Jon DeGaynor

our OE's. But activity. development those There's you say Yes. of part activity. that. on with It's part product that's it's part having our embargo development We're the when of no conversations

Operator

comes Instructions] from [Operator Barrington the next from question Your line Prestopino Gary Research. of

Gary Prestopino

have that got, fact you're the retrofit this some said year. you to With revenues going you

So as you back signed the in translate signed fleets Is revenues you or generating a contract got I of the that number assume start to some of half of year? those that contracts? enable

Bob Krakowiak

have the with material. that the the Where not don't, fleets that. of magnitude contracts would we We disclose we are

it's that these with we've So to with. of continue the expansion about we others talked ongoing trials fleets fleet XX that and with an work

Gary Prestopino

divestiture action the in some inning what then or you are business take of terms to Electronics on? looking you in, the are And

Jon DeGaynor

will Gary, we strategic conclusion have on analysis this we in said year. As a the in script the

So looking it. we're that's how at

Operator

time. conference like further at I turn no to are now back to the there Jon this showing, DeGaynor. would I'm questions

Jon DeGaynor

I can for strong Yes. continued you results, resources. impact our company to to variables We're management focused value call. that call. speaking will operating actions thank upon through result today's participation confident our effectively is available to the that I forward we we at in beyond. to and performance. that And assure drive to can respond financial you. to committed manage the drive team and and continue Thank This look you control will want business and success strong everybody next for continue to and efficiently XXXX shareholder their in new our profitable

Operator

today's Thank your for wonderful you day. participation, and gentlemen, conference. this have concludes and Ladies a

all You disconnect. may

Stoneridge (SRI) 4 May 192019 Q1 Earnings call transcript