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Kelly Harvey | executive |
James Zizelman | executive |
Matthew Horvath | executive |
Justin Long | analyst |
Good day, and thank you for standing by. Welcome to the conference call of Stoneridge. At this time, all participants are in a listen mode only. After the speaker's presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference call is being recorded. to Kelly conference Relations. Harvey, like first to now today, speaker Director will hand over the your I of Investor
President morning, Jim our The Webcasts Chief on you Chief our thank and SEC section yesterday and was everyone, under us is the Zizelman, stoneridge.com Good discuss posted today's Matt in and to Investors to filed for with me third at Officer; and call and our release joining results. our Presentations.Joining evening are accompanying website presentation Executive quarter Horvath, and Officer. the Financial
begin, you may today need we Before I to that certain statements. forward-looking inform statements be
statements are understand and information statements future differ we uncertainties, are results these statements that nature such reasonable materially. may in plans.Although statements risks concerning based you assumptions, not are Forward-looking that subject upon should our and include and to or results include that actual historical believe
factors found information XX-Q, and Statements. be heading may uncertainties such cause Forward-Looking filed to Commission differ could that with under and the in the Additional Exchange about Securities actual our was which results
to call, the today's reconciliation With with for will I During comparable directly these certain questions. that, referring Jim the remarks, Matt Jim. GAAP over formal of will will to financial most index non-GAAP measures a the we to Please call measures. measures.After also non-GAAP financial finished turn up to and we see be have it open
good and morning, Kelly, Thanks, everyone.
Let on me X. begin Page
significant During margin improvement. on second and the our quarter progression third quarter, sequential to drive continued we build to earnings
basis EBITDA versus is margin of $X million. while the quarter, EPS points adjusted $X.XX approximately of $X.XX quarter increase or Third improved by XXX second an
which deliver excellence excellence.Our volatility improvement quarter and focus reduction on drive operational on to our efficiency, third by execution. continuous unwavering performance, on driven to markets, on focus gross long-term both in improved Despite continue builds results in production an grow our we cost through the quarter continue operating our execute foundation strategy a to the end expected to the the to strike commitments, continue We we performance full to margin material our and company.Given UAW continues be headwinds, the in strength market-based to line in XXXX directly establish of our with year of drive of last exclusive revenue of even guidance. impact good is the face performance original as foundation,
refining it within UAW are our range still We equal which midpoint EPS $X.XX, the the impact to guidance keeping the reducing but by original of estimated our adjusted is strike.
a million fourth updated adjusted quarter Our EPS and implies $XXX of the approximately revenue quarter. $X.XX relative year midpoint to full of guidance third or $X.XX improvement
focused a couple on Matt of We providing we which in outpaces the provide guidance the we will drive our foundation quarters company. continue underlying are growth expectations continue will that to executing are revenue year by the are the last launches full finish into continue strong later on detail year to XXXX.This and margin our in heading also on to markets, This over build XXXX for contract expected our the additional morning, on end performance we provide drive X% growth a of of to runway good to to expectation XXXX. the preliminary significantly X.X%. for and performance, call.As program drive will
the North commercial applications tachograph the third standards in mobility discuss vehicle was commercial SMARTX the both OEMs, opportunities provides program also the II EU us today, North of OEM Truck call.Finally, detail the announcing and This aftermarket largest significant innovation I America, will contributions revenue years. this Volvo launch package with more to program participation the are the final our trucks. several Daimler Truck Energy's Peterbilt, market. During the our and in expectations Department over we American European the quarter, in the in for Super including in and we program and meet tachograph Navistar, next launched with designed SMART next-generation later
system are efficiency as summarizes provide this the for We the on mirror Truck supplier and not details financial only to additional relative our to to thrilled third detail. the X. I'll OEMs as on well also in Page drivers. metrics program program prior meet significant fuel increase moving benefit in in Page to partner more the these the involvement this later camera program quarter call.Now Super provide the goals key with X but to quarter our safety
pricing the the retroactive prior For comparison $X.X quarter purposes, that in we periods. was have favorable of recognized that to of million second impact nonrecurring was the excluded applicable
in improved quarter million, of in vehicle XXXX costs. a end million on off-highway adjusted XX.X% the we in the our quarter. Adjusted second by cost step of quarter offset currency unfavorable to was versus production to variation relative approximately to in decremental sales second down second impact XXXX, points $XXX.X gross revenue improvements of margin and by costs, material of basis declined due of by ramp-ups certain quarter X% an primarily commercial the foreign million.Additionally, markets.Third and freight improved and due reduced quarter engineering fixed reduced seasonal line adjusted slower-than-expected as primarily Third due demand are part approximately translation with as vehicle operating to on- XXX in significant to cost $X.X margin well $X.X leverage seeing platforms in approximately electrified
reimbursements strategy by drive our improve driven close Throughout optimize actions outlined to spending we continue focus year expected as we timing through and execute operational reduce decline this we due our excellence. costs the structure, reduction XXXX, year.We to program operating long-term to launch end the we discretionary deliver customer to continue both take the the our on to continuous organizational as last leverage. of to commitments and continue quarter, As of our and engineering on
And points will significantly of EBITDA approximately of improved to continue launched going programs and margin we ramp-up adjusted basis continued of recently to As underlying a result, by quarter. we benefit margin we our operating X.X% expect XXX markets continues as as forward, recognize prior the new outperform programs. the revenue finally, expansion end launch grow.And over
further Additionally, X. we strike through incremental drive UAW Page on announced The growth.Now build XX expect earnings strike significant began targets and our on mid-October. with momentum margin September turning to to
from the on agreements last lag and September, tentative spaces September. in UAW announced the middle strikes income OEs, the members. to order on $X.XX impact the And reduction Over to said, strike week, the in between will X small. final began more million the the Stellantis, or the targeted $X agreements for we month. ratified UAW Ford, end That the which will October.In GM strikes approximately plants operating million quarter the strike of of was given the quarter plans downtime third specific strike with union into by substantial October, by and the saw bring the the continued additional UAW fourth reduced the as and by GM be once in relatively the and revenue approximately strike an impact $X.X are production
up normalized residual as work We expect and some ramp to to return facilities impacted there to output. be the strikes to production impact
income million, impact residual and by approximately or million in million, by we $X revenue revenue $X expect expect We operating adjusted approximately to the incremental in December.In $X.XX. normalizing $XXX,XXX and strikes this reduce before in operating $X by reduce will that total, income November UAW an EPS an additional $X.XX reduce reduce
We $X.XX have midpoint refined impact. to guidance our reflect this
next-generation strategy. of our orders providing we industry This a vehicle we remain from launch growth company, impacts morning, our to focused and tachograph program deviating overall highlight offset as focus externalities connectivity EU continued per megatrends performance to program or case, and the without We intelligence committed capabilities As is with align in future are expand product, in mobility long-term on our generation tachograph strong existing up turning ramp continue regulatory working as supply this other Page responding can with customer to to the to business financial and to strike with The on our operations.Now with stable requirements.The incremental want the an conform standards. in Europe. to our aligns aligned ensure recent and sacrificing another the as vehicle production strikes our appropriate SMARTX X. with in tachograph, for our now package ended. forward this efficient to SMARTX the with content launch, move consideration We efficiency chains, next also strategy and continued yet I of and
incremental over ensure Our and primarily going served and add to platform in makes consistent provides by other competitor with also Stoneridge vehicles current forward August the and one for compliance entry new the flexible updated involved required with on the expect several both vehicles, is launched be platform and for this will continued for the drive-time market commercial more requirements. registered X.X international barriers drive has vehicles SMARTX latest The to vehicles year, the quarter requirements in as under road. in various requirements. vehicle product with existing regulations including next standard growth types and continuing as the significant program fall over transport. And years, grow aftermarket.The the opportunities result, on analysis to tons all regulatory functionality opportunity to of and the OEMs exist to tachograph we requiring European The new to regulatory features newly a for third European and competitors.Beginning ramp XXXX, that the next are on up the adoption next-generation other is
the turning to to soon.In goal of goods use of with Navistar, this by of XX% of and develop fuel portfolio accounting.MirrorEye of collectively Energy I X estimating digital continues nameplate America, freight tachograph of both Park-by-Wire has program to United X opportunities. aligned to XX fuel in Energy a Truck of with cost-effective was announce The most Daimler including is with in yet. program in and half in Class and the and a OEM per megatrends.Now significant billion revenue we our Peterbilt all key as the energy freight will MirrorEye, are achieve actuators, Kenworth indicated technologies Trucks. over Super SMARTX Super innovation Trucks in transportation demonstrate Department and our and in about that of year quarter achieving global aftermarket was for in the of Volvo XXXX. and efficiency Truck are the transportation and launch and the X now for expected II Truck our OEMs to carbon States with program information North XXXX as is to the MirrorEye more year, Department last largest Super technologies funded million savings XXXX launch to first of happy and long strong expected latest our the the gain North nation's accounting our launched involvement Energy's continues efficiency XXXX to trucks mentioned, that XXXX North North a line with with in teams Department significant double years, with the industry second are our of for increases the a the of anticipating Page efficiency and systems build XXX% segment MirrorEye discuss MirrorEye projects OEM energy tachograph the haul presents of freight opportunity We America. of launched for $XX resulting America product total additional Stoneridge usage. that sector.ADE for gallons launched American for more program on Truck to II our with This approximately increase our I'm Europe, in several I to this launch and XXXX. emissions in heavy-duty axle-based MirrorEye the XX% in driver with in improved Super million $XX than in our in launches reduction approximately The application Peterbilt, X platform. systems, II in Truck help X. innovative vehicle be a and momentum program But partner actuators, and addition, with selected a has than
our retrofit program highly our like through incremental expanding the remains rates pleased to visible to through applications As trials positioned to safety.Now, to of ability continue we expect as the performance And take industry quarter another as programs and with performance. Page as as Truck focus yet well expand we well demonstrated on continues third fleet II, efficiency vehicle very X. awareness as system as so in we're summary, turning Stoneridge in to launches. continue Super improve vehicle improvement our the well the execute in financial along quarter-over-quarter with both to we
company.Our a all by as both result, operating continuous continue to the We strategy have laser-focused performance, the we beginning driven be the throughout continued our excellence functions set This long-term strong on a third continues remains the execute we of is of to an continue to improved robust foundation unwavering on well with deliver on builds establish commitments operating the drive performance, results year. with to to our our last drive which focus the megatrends. and grow to portfolio backlog technologies positioned operational quarter within quarter, and aligned at and a upon strong Stoneridge innovative company. business as key performance industry of of a
in over more execution as ensure optimize significantly we and so.With only do that Matt, end outgrow our turn to Matt? I our We not underlying earnings to we will remain discuss we markets, detail. focused he'll will results that, it on financial but
Jim. Thanks, Great.
which also leverage this facility a pricing associated were and we and call. in revolving ample basis support pricing facility quarter expectations extends complete turbulent X-K maturity complete with going million to enabled we $XXX $XXX.X our total our date Slide to is found XX. prior refinance company continue to million increased grid. issued quarter. This well that is facility this to to Adjusted financial income continued press X-K adjusted credit while us interest with and operating refinance smaller detail increase and earlier our Control XX Each our of facility has as this slightly Adjusted sales operating margin refinancing by provides release in performed the expanding before $XXX guidance and fees on limiting expense.Turning morning. our current full the the can the morning, able the sales, ratio our growth Before approximately the million. an quarter, I quarter. third recording I and announced feature. XX a points subsequent facility with call, well operating performance pricing in refinance $X.X points liquidity the undrawn level slightly third an provide of quarter segment than We was our current overall commitments. quarter earnings XX, interest are backdrop, basis additional XX able prior Devices slides.As the which the on million points expansion of were The The higher offset be Jim were X.X% the our was with more expanding coverage will our approximately approximately over credit our we of the a margin with facility credit covenants discussed to electronics we detail basis with on begin The updating performance as Slide XXXX as forward, over facility similar ranges. less segments facility shortly of facility.Despite from or across achieve in by only macroeconomic year second slightly growth X-year
ranges impact midpoint of the on in $X.X guidance quarter quarter-to-quarter to of based performance the our is implies strike, the consideration updated even revenue expected after approximately which million fourth be implied the of quarter. fourth stable Our UAW full year
of the margin our with in with guidance. midpoint improvement midpoint gross expect After third the XX for previously of line low end strike-related EPS the have our drive is expected guidance $X.XX of the third our operating and provided adjusted engineering increased which with margin full quarter.Excluding the in an adjusting in reduced reimbursements the of of range. we relatively operating provided year impact, quarter is estimated strike, are same updated our impact as of $X.XX, performance continued line UAW by previously line least versus our expansion expected customer points basis margin at the to We UAW
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and commercial platforms to $X.XX revenue demand production our end normal volumes driving in headwind the were gross material electrified mix, seasonality, second improvement positively expectations in have the expectations price expected the saw slightly as cost expected, due costs, due be versus to of cost vehicle normalize continue third we chains we to due slower of versus to notably, and and lower material than overall material impact outperformed Although impact and to related customer down quarter, the was markets.During continued This margin a quarter approximately performance. sales actions mitigation costs. material supply reduced to increases quarter. certain vehicle ramp-up our in negotiated operating our favorable Most favorable prior primarily to reduced previous production previously
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the was quarter. during by million the sales, the were I UAW XX income results, margin, gross The impact operating and up for financial discussed expenses by previously, negotiations at complete partially previously, versus impact facilities now November.Adjusted was Jim X.X% are supplier but had and higher distressed third related to the basis offset the are which $XXX,XXX fourth quarter production prior the outlined on our customer quarter, have GM or driven though expansion points As even minimal Stellantis improved expected quarter $X.X in strike quarter. continued approximately on an back impact a of which Ford, ramp of expected to the approximately are by
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global to support continue expectations cost-effectively summarizes our business.Page to utilize our global for footprint adjusted will We XX EPS. our year full
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the of quarter the is $X.XX. quarter summary, in mix pretax in the adjusted We year our in of impact for million expense line geographic tax operating the excluding with strike million updated UAW $X.X expectations, earlier the EPS earnings. impact versus estimated on incremental due the to prior Jim income strike, EPS In approximately approximately primarily full midpoint is adjusted are and approximately $X.X breakeven expecting discussed in UAW of of fourth revenue guidance the the the midpoint year.As or call, in also fourth our prior estimated our
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At our this Stephens much, the institution. [Operator and I is time, so Long Thank from speaker, be Justin you this moving will conduct Matt. up Instructions] we will question-and-answer first session.
are you provided? and comment being additional moving any in you on it refinancing included you the year? Maybe I'll next this but guidance a can talked And about is that expectations Matt, hit. that on bit, fairly and start interest there rates quarter the you announcement just in And just the like with fourth refi the expense and sounds covenants provide one I little can similar, know color into on
grid a the question. expectations. much guidance the refinancing is very slightly relative for Justin, the given in terms just quarter refinancing. outcome covenants we the included the The provided. company. incremental I market The Thanks, the The pricing expect the fourth is only wouldn't all our interest to prior and for and great refinancing to in conditions expense Yes, really prior our existing similar, of really for general which the facilities. very facility, than is higher similar are thanks
cash going working we expect really the refinancing. the flow, cash business now, fund on continued to not plenty grid remain particularly need year.So, are growth year.Going continued because growth, expect, higher where So expect really any we of excited net announce much improve going expense all capital with that I worst, turning limiting while focused expect to forward, going us expense relatively forward, the than slightly power to at of would course, stable we that the It we're as is are we us focus of only and to into earnings allows we that the would earnings really expansion improvement that performance this I here. pricing improve forward, the liquidity on with next would, interest interest that now forward and to opportunity we gives the change where obviously, on incremental
Okay. question. maybe, Great. shift next then for That's helpful. I'll you to Jim, And my
think of amount this most revenue I substantial that a the one impressive margins on was basis, by a pretty about fact sequentially. but quarter was down were things the up
additional of runway from stable, remaining expansion of can but revenue do define more you're you forward, So, look expecting opportunity let's self-help margin as I much how deteriorates how to margin we play that revenues better what see much a the next you as for out would macro do year, get you see a control? and I things from know improvement? kind where scenario
but upstream focused well And not functions Justin, manufacturing and summarizing very the thanks we reduction. control we off, in also on on last And and start been operational few had for throughout as I've get as And cost plant. have months, material that's strongly efficiency first very focus the both for question. significant do the plant And a in excellence, saying of by we as supporting within just the the all organization. here? first manufacturing Well, the process just me let how been the company
we've continued is the And This to that here journey progress is really say beginning I so, of here.What gotten made only the right? some we've excellence drive improvement. started, to continued have great and
from So, some there throughout of about the is certainly that today application more Stoneridge of methodologies come of perspective we from and the talked expansion continuous margin from a that to inside comes those company.
So we're see to going from we're quite that more it. optimistic
could I in changed. in on ask then earlier curious ramp maybe me. outlook talked million about about It get revenue as I'm you that's next could that for XXXX your some MirrorEye for have well.[Audio And the give I Great. the think to this wanted year last base if MirrorEye expectation in MirrorEye. one preliminary to $XX you was you or And just for you outlook to but XXXX? share visibility color revenue. Okay. helpful had year Gap]
now. can Justin, you we hear Yes,
about Sorry disconnected, that. unfortunately. We've got
you question. not sure my Yes. Well, caught if I'm
So I'll XXXX. re-ask expecting it and the about MirrorEye asking no problem in at all. I was contribution you're revenue that
has year, And of that you move as I visibility from ask to I guided then if to into your about think changed. $XX I'm next about base think incremental we MirrorEye, revenue curious you as $XX number. million million. for previously had wanted that number that
for question, the there. sorry Justin. for disconnection again, the Thanks Yes. And Yes.
a has year, here continue we obviously, pretty ramp-up remained year. of We ramp-up that talked Europe into about the North this little program OEM of to strong. back the expectations a program just So kind first the half ramp slower volume as of head originally and American the on in we up bit as the had production
bit expected. say than we same or really overall would retrofit program And launch that So, said, OEM Europe. expectations. to expectations, little bit volume this maybe I visibility, kind what little of their expected.That than was a program our volume for the of year lower got lower OEM the a their thing in we've year, a what we we next middle related have And certainly largest increased as has year good obviously, already in the
retrofit strong our some work are take some between variability, to rate of But revenue in very OEM in pretty that the incremental pretty and well market year. the that we things in to some continued always ramp-up market got as visibility with large as middle as incremental course, fleets continue the a in there's the program of MirrorEye of year. So, of incremental largest next the the option-based. addition good We've growth
Thank to closing we showing this remarks. questions it appreciate would turn you for no Zizelman I time. am to so and much, further very I Jim speaker back much. like at Justin, it
continuous value foundational very once led us driven shareholder operational long-term your willingness is is I Thank strong that by as on our us with we This your time execute unwavering to execution, for know to drive closing, appreciate outlined call. by strong joining to on I commitments the for an which both and improvements again In deliver today. our continue you, today. continue everyone, the reiterate Thanks important, on we on we build results strategy driving and focusing to excellence, ultimately engage focus us we to and again. foundation. to want strategic really
in the does you This conference. today's participation for conclude Thank program. your
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