Attached files
| file | filename |
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| 8-K - 8-K - STONERIDGE INC | v326609_8k.htm |
| EX-99.2 - EXHIBIT 99.2 - STONERIDGE INC | v326609_ex99-2.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS THIRD-QUARTER 2012 RESULTS
Results Consistent with Guidance
Continued Financial Improvement Expected in Fourth Quarter
Debt Pay-Down on Target
WARREN, Ohio – October 24, 2012 – Stoneridge, Inc. (NYSE: SRI) today announced financial results for the third quarter ended September 30, 2012.
Third-quarter 2012 net sales were $219.3 million, an increase of $23.4 million, or 11.9%, compared with $195.9 million for the third quarter of 2011. The increase in the current quarter’s net sales was primarily due to the consolidation of the operating results of PST, the Brazilian subsidiary of which the Company acquired controlling interest on December 31, 2012. Excluding the net sales of PST in the third quarter of 2012, net sales were $175.5 million, a decrease of $20.4 million, or 10.4%, from the same period a year ago primarily as a result of lower sales in the Company’s Electronics business segment, including lower sales to a large North American commercial vehicle customer, and lower sales to European commercial vehicle customers.
Net income for the third quarter of 2012 was $0.4 million, or $0.02 per diluted share, compared with net income of $4.5 million, or $0.18 per diluted share, in the third quarter of 2011. The decrease in net income was primarily due to lower sales in the commercial vehicle markets in both North America and Europe. In addition, the Company’s results were negatively impacted in the PST segment by lower sales in the third quarter of 2012 compared with the prior-year period and the effect of depreciation and amortization of purchase accounting adjustments of $1.7 million. However, PST sales did improve by $5.3 million, or 13.8%, compared with the second quarter of 2012.
For the nine months ended September 30, 2012, the Company reported net sales of $715.8 million, a 23.6% increase from $579.3 million for the same period in 2011. Net income for the first nine months was $2.7 million, or $0.10 per diluted share, down from $10.8 million, or $0.44 per diluted share, for the prior-year period.
As of September 30, 2012, Stoneridge’s consolidated cash position was $35.6 million, a decrease of $43.1 million from December 31, 2011. The change in the cash balance was partially the result of the $19.8 million in cash used to fund the final portion of the PST transaction, which was completed on January 5, 2012. The Company also has repaid $47.0 million of total indebtedness in the first three quarters of 2012. Stoneridge repaid $27.0 million of borrowing on its asset-backed lending facility and PST repaid approximately $20.0 million on its outstanding indebtedness during the first three quarters of 2012.
Outlook
“As we announced in our press release of October 5, we have revised annual sales guidance to the range of $940.0 million to $962.0 million,” said John C. Corey, President and Chief Executive Officer. “Each of our businesses has taken actions to mitigate a portion of the lower profitability resulting from the lower revenues, and we expect these actions to contribute to an improved performance in the fourth quarter. Though revenue for the third quarter was below our expectation, our financial performance improved compared with the second quarter despite lower revenues, partially as a result of our cost reductions, pricing actions and mix. Our revised guidance for gross margins in the range of 24.5% to 26.5% is near the range that we originally guided to in February. Our revised expectations for operating margins in the range of 3.5% to 4.5% and earnings per share in the $0.35 to $0.45 range are consistent with our projected benefits from management’s actions in response to changing market conditions. We expect to continue to reduce our debt by an estimated $14.0 million in the fourth quarter.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2012 third-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, October 24, 2012, at www.stoneridge.com, which will also offer a webcast replay. In addition, in mid-November of 2012, Stoneridge will release its new and enhanced website which will be easier to navigate and contains a number of new improvements including:
| · | Significantly improved product section, with search capability and the ability to see a selection of the Company’s products by vehicle segment, application or product type |
| · | Interactive Stoneridge location map, identifying all Stoneridge global locations and the capability to view by the business functions performed at the location |
| · | Enhanced information about Stoneridge leadership |
| · | Improved News and Events section; including current company news and events that company representatives will be attending |
| · | Enhanced investor section including annual reports, SEC filings, stock information, webcasts, presentations, event calendar, ownership information, analyst information and more |
| · | New Supplier section which identifies the main products the Company buys and how to do business with Stoneridge |
| · | Capability to share any information found on the website through social media interactions or email |
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 commercial vehicle, automotive and agricultural, motorcycle and off-highway vehicle markets. 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 volume change in commercial vehicle, automotive or agricultural, motorcycle and off-highway vehicle production; disruption in the OEM supply chain due to bankruptcies; 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands, except per share data) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net sales | $ | 219,256 | $ | 195,864 | $ | 715,788 | $ | 579,325 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 168,018 | 158,413 | 545,753 | 464,866 | ||||||||||||
| Selling, general and administrative | 44,623 | 30,454 | 149,954 | 93,349 | ||||||||||||
| Operating Income | 6,615 | 6,997 | 20,081 | 21,110 | ||||||||||||
| Interest expense, net | 4,878 | 4,247 | 15,395 | 12,802 | ||||||||||||
| Equity in earnings of investees | (207 | ) | (1,353 | ) | (443 | ) | (5,077 | ) | ||||||||
| Other expense (income), net | 972 | (1,697 | ) | 3,375 | (164 | ) | ||||||||||
| Income before income taxes | 972 | 5,800 | 1,754 | 13,549 | ||||||||||||
| Provision for income taxes | 383 | 1,543 | 717 | 3,378 | ||||||||||||
| Net income | 589 | 4,257 | 1,037 | 10,171 | ||||||||||||
| Net income (loss) attributable to noncontrolling interest | 170 | (272 | ) | (1,703 | ) | (611 | ) | |||||||||
| Net income attributable to Stoneridge, Inc. | $ | 419 | $ | 4,529 | $ | 2,740 | $ | 10,782 | ||||||||
| Earnings per share attributable to Stoneridge, Inc.: | ||||||||||||||||
| Basic | $ | 0.02 | $ | 0.19 | $ | 0.10 | $ | 0.45 | ||||||||
| Diluted | $ | 0.02 | $ | 0.18 | $ | 0.10 | $ | 0.44 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 26,430 | 24,164 | 26,358 | 24,114 | ||||||||||||
| Diluted | 27,144 | 24,589 | 27,009 | 24,574 | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, | December 31, | |||||||
| (in thousands) | 2012 | 2011 | ||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 35,566 | $ | 78,731 | ||||
| Accounts receivable, less reserves of $2,757 and $1,485, respectively | 153,107 | 162,354 | ||||||
| Inventories, net | 108,569 | 120,645 | ||||||
| Prepaid expenses and other current assets | 32,252 | 28,393 | ||||||
| Total current assets | 329,494 | 390,123 | ||||||
| Long-term assets: | ||||||||
| Property, plant and equipment, net | 120,216 | 124,802 | ||||||
| Other assets | ||||||||
| Intangible assets, net | 90,446 | 102,731 | ||||||
| Goodwill | 64,462 | 68,808 | ||||||
| Investments and other long-term assets, net | 13,382 | 11,193 | ||||||
| Total long-term assets | 288,506 | 307,534 | ||||||
| Total assets | $ | 618,000 | $ | 697,657 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of debt | $ | 28,214 | $ | 44,246 | ||||
| Revolving credit facilities | 12,168 | 39,181 | ||||||
| Accounts payable | 74,782 | 83,859 | ||||||
| Accrued expenses and other current liabilities | 57,682 | 91,417 | ||||||
| Total current liabilities | 172,846 | 258,703 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 181,914 | 183,711 | ||||||
| Deferred income taxes | 66,957 | 69,110 | ||||||
| Other long-term liabilities | 5,303 | 5,494 | ||||||
| Total long-term liabilities | 254,174 | 258,315 | ||||||
| Shareholders' equity: | ||||||||
| Preferred Shares, without par value, authorized 5,000 shares, none issued | - | - | ||||||
| Common Shares, without par value, authorized 60,000 shares, issued 28,433 and 27,097 | ||||||||
| shares and outstanding 27,915 and 26,222 shares, respectively, with no stated value | - | - | ||||||
| Additional paid-in capital | 183,600 | 170,775 | ||||||
| Common Shares held in treasury, 518 and 875 shares, respectively, at cost | (1,882 | ) | (1,870 | ) | ||||
| Accumulated deficit | (25,523 | ) | (28,263 | ) | ||||
| Accumulated other comprehensive loss | (9,478 | ) | (9,615 | ) | ||||
| Total Stoneridge Inc. and subsidiaries shareholders’ equity | 146,717 | 131,027 | ||||||
| Noncontrolling interest | 44,263 | 49,612 | ||||||
| Total shareholders' equity | 190,980 | 180,639 | ||||||
| Total liabilities and shareholders' equity | $ | 618,000 | $ | 697,657 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net income | $ | 589 | $ | 4,257 | $ | 1,037 | $ | 10,171 | ||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||
| Foreign currency translation adjustments | 1,018 | (7,956 | ) | (9,327 | ) | (3,490 | ) | |||||||||
| Unrealized gain on marketable securities | - | 51 | - | 16 | ||||||||||||
| Unrealized gain (loss) on derivatives | 3,979 | (13,793 | ) | 9,464 | (13,089 | ) | ||||||||||
| Other comprehensive income (loss) | 4,997 | (21,698 | ) | 137 | (16,563 | ) | ||||||||||
| Consolidated comprehensive income (loss) | 5,586 | (17,441 | ) | 1,174 | (6,392 | ) | ||||||||||
| Comprehensive income (loss) attributable to noncontrolling interest | 170 | (272 | ) | (1,703 | ) | (611 | ) | |||||||||
| Comprehensive income (loss) attributable to Stoneridge, Inc. | $ | 5,416 | $ | (17,169 | ) | $ | 2,877 | $ | (5,781 | ) | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine months ended September 30 (in thousands) | 2012 | 2011 | ||||||
| OPERATING ACTIVITIES: | ||||||||
| Net cash provided by (used for) operating activities | $ | 40,029 | $ | (17,422 | ) | |||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (20,243 | ) | (20,718 | ) | ||||
| Proceeds from sale of fixed assets | 490 | 5 | ||||||
| Capital contribution from noncontrolling interest | - | 396 | ||||||
| Payment for additional interest in PST | (19,779 | ) | - | |||||
| Net cash used for investing activities | (39,532 | ) | (20,317 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Revolving credit facility borrowings | 11,420 | 10,993 | ||||||
| Revolving credit facility payments | (38,433 | ) | (457 | ) | ||||
| Proceeds from issuance of other debt | 21,315 | 1,408 | ||||||
| Repayments of other debt | (37,973 | ) | (919 | ) | ||||
| Other financing costs | (134 | ) | (96 | ) | ||||
| Repurchase of Common Shares to satisfy employee tax withholding | (1,135 | ) | (751 | ) | ||||
| Net cash (used for) provided by financing activities | (44,940 | ) | 10,178 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1,278 | (1,178 | ) | |||||
| Net decrease in cash and cash equivalents | (43,165 | ) | (28,739 | ) | ||||
| Cash and cash equivalents at beginning of period | 78,731 | 71,974 | ||||||
| Cash and cash equivalents at end of period | $ | 35,566 | $ | 43,235 | ||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Change in fair value of interest rate swap | $ | 1,450 | $ | 1,983 | ||||
| Issuance of Common Shares for acquisition of additional PST interest | $ | 10,197 | $ | - | ||||