Attached files
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| EX-99.2 - EXHIBIT 99.2 - STONERIDGE INC | v336955_ex99-2.htm |
| 8-K - FORM 8-K - STONERIDGE INC | v336955_8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS FOURTH-QUARTER 2012 RESULTS
| · | Strong Cash Flow Drives Debt Reduction in 2012 |
| · | Continued Operating Improvements in the Fourth Quarter |
| · | Reaffirms 2013 Guidance of $0.75 - $0.95 per share |
WARREN, Ohio – March 1, 2013 – Stoneridge, Inc. (NYSE: SRI) today announced financial results for the fourth quarter ended December 31, 2012.
Fourth-quarter 2012 net sales were $222.7 million, an increase of $36.7 million, or 19.7%, compared with $186.0 million for the fourth 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 29, 2011. Excluding PST in the fourth quarter of 2012, net sales were $178.3 million, a decrease of $7.8 million, or 4.2%, from the same period a year ago, primarily as a result of lower sales in the Company’s Wiring business segment, including lower sales to a large North American commercial vehicle customer, and lower sales to European commercial vehicle customers in the Company’s Electronics business segment.
Net income for the fourth quarter of 2012 was $2.6 million, or $0.10 per diluted share, compared with net income of $38.6 million, or $1.56 per diluted share, in the fourth quarter of 2011. The decrease in net income was primarily due to a $65.4 million pretax gain ($42.5 million after-tax gain) or $1.72 per share recognized in conjunction with Stoneridge’s purchase of additional ownership in its Brazil-based PST joint venture on December 29, 2011.
For the year ended December 31, 2012, the Company reported net sales of $938.5 million, a 22.6% increase from $765.4 million for the same period in 2011. The increase in the current year’s net sales was primarily due to the consolidation of the operating results of PST. Excluding the net sales of PST in 2012, net sales were $758.1 million, a decrease of $7.3 million, or 1.0%, from a year ago, primarily as a result of lower sales in the Company’s Wiring business segment and lower sales to European commercial vehicle customers in the Company’s Electronics business segment.
Net income for the year was $5.4 million, or $0.20 per diluted share, down from $49.4 million, or $2.00 per diluted share, for the prior year which included the $1.72 per share gain recognized in conjunction with the PST purchase.
“As we announced in our press release of February 7, we finished 2012 with strong cash flow and we have exceeded our debt reduction targets. We finished the year generating approximately $49.1 million in free cash flow (net cash provided by operating activities less capital expenditures),” said John C. Corey, President and Chief Executive Officer.
As of December 31, 2012, Stoneridge’s consolidated cash position was $44.6 million, a decrease of $34.2 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 reduced its debt by $65.7 million during 2012. Stoneridge repaid $38.0 million of borrowing on its asset-based lending facility, and the remaining $27.7 million was primarily due to PST’s repayment of indebtedness.
“While our cost-reduction and other initiatives continued to drive gross margin and operating margin improvements in the fourth quarter compared with the second and third quarters of 2012, our earnings performance in the fourth quarter was below our expectations and due primarily to a slower recovery in the Brazilian market than anticipated and lower than expected sales in our European operations as European OEMs extended their holiday shutdown,” Corey noted. “We have adjusted our cost structures to reflect the market weakness and expect to see continued financial improvement in 2013 and reaffirm our full 2013 guidance as published on February 7, 2013,” Corey added.
Wiring as a Separate Reporting Segment
In the fourth quarter of 2012, Stoneridge changed its reportable segments in accordance with accounting guidelines, which will provide better visibility to Stoneridge’s four operating segments: Control Devices, Electronics, PST and Wiring. The revised segment information constitutes a reclassification and has no impact on reported net income or earnings per share for any period. These changes do not restate information previously reported in the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders' Equity or Consolidated Statements of Cash Flows for the Company for any period.
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2012 fourth-quarter results can be accessed at 11 a.m. Eastern time on Friday, March 1, 2013, at www.stoneridge.com, which will also offer a webcast replay.
A Non-GAAP Financial Measure
This press release includes the financial measure free cash flow. This measure is defined as a non-GAAP financial measure by the Securities and Exchange Commission and may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. The Company believes that free cash flow is helpful when presented in conjunction with the net cash provided by operating activities, which was $75.5 million for 2012. Free cash flow is defined as net cash provided by operating activities less capital expenditures. Reconciliation for 2012: Net cash provided by operating activities of $75.5 million less capital expenditures of $26.4 million equals free cash flow of $49.1 million. Free cash flow is considered a liquidity measure and provides useful information to management and investors about the amount of cash generated after the capital expenditures. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period.
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 | For the years ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (in thousands, except per share data) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net sales | $ | 222,725 | $ | 186,048 | $ | 938,513 | $ | 765,373 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 168,116 | 153,730 | 713,869 | 618,596 | ||||||||||||
| Selling, general and administrative | 45,961 | 34,957 | 195,915 | 128,306 | ||||||||||||
| Goodwill impairment charge | - | 4,945 | - | 4,945 | ||||||||||||
| Operating income (loss) | 8,648 | (7,584 | ) | 28,729 | 13,526 | |||||||||||
| Interest expense, net | 4,638 | 4,432 | 20,033 | 17,234 | ||||||||||||
| Equity in earnings of investees | (317 | ) | (4,957 | ) | (760 | ) | (10,034 | ) | ||||||||
| Gain on previously held equity interest | - | (65,372 | ) | - | (65,372 | ) | ||||||||||
| Other expense, net | 1,521 | 220 | 4,896 | 56 | ||||||||||||
| Income before income taxes | 2,806 | 58,093 | 4,560 | 71,642 | ||||||||||||
| Provision for income taxes | 95 | 22,727 | 812 | 26,105 | ||||||||||||
| Net income | 2,711 | 35,366 | 3,748 | 45,537 | ||||||||||||
| Net income (loss) attributable to noncontrolling interest | 90 | (3,209 | ) | (1,613 | ) | (3,820 | ) | |||||||||
| Net income attributable to Stoneridge, Inc. | $ | 2,621 | $ | 38,575 | $ | 5,361 | $ | 49,357 | ||||||||
| Earnings per share attributable to Stoneridge, Inc.: | ||||||||||||||||
| Basic | $ | 0.10 | $ | 1.58 | $ | 0.20 | $ | 2.04 | ||||||||
| Diluted | $ | 0.10 | $ | 1.56 | $ | 0.20 | $ | 2.00 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 26,435 | 24,380 | 26,377 | 24,181 | ||||||||||||
| Diluted | 27,177 | 24,760 | 27,032 | 24,645 | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| As of December 31 (in thousands) | 2012 | 2011 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 44,555 | $ | 78,731 | ||||
| Accounts receivable, less reserves of $3,394 and $1,485, respectively | 141,503 | 162,354 | ||||||
| Inventories, net | 96,032 | 120,482 | ||||||
| Prepaid expenses and other current assets | 28,964 | 27,897 | ||||||
| Total current assets | 311,054 | 389,464 | ||||||
| Long-term assets: | ||||||||
| Property, plant and equipment, net | 119,147 | 124,944 | ||||||
| Other assets | ||||||||
| Intangible assets, net | 84,397 | 98,039 | ||||||
| Goodwill | 66,381 | 71,855 | ||||||
| Investments and other long-term assets, net | 11,712 | 11,193 | ||||||
| Total long-term assets | 281,637 | 306,031 | ||||||
| Total assets | $ | 592,691 | $ | 695,495 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of debt | $ | 18,925 | $ | 44,246 | ||||
| Revolving credit facilities | 1,160 | 39,181 | ||||||
| Accounts payable | 76,303 | 83,509 | ||||||
| Accrued expenses and other current liabilities | 57,081 | 90,994 | ||||||
| Total current liabilities | 153,469 | 257,930 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, net | 181,311 | 183,711 | ||||||
| Deferred income taxes | 59,819 | 67,721 | ||||||
| Other long-term liabilities | 4,258 | 5,494 | ||||||
| Total long-term liabilities | 245,388 | 256,926 | ||||||
| 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 27,913 and 26,222 shares at December 31, 2012 and 2011, | ||||||||
| respectively, with no stated value | - | - | ||||||
| Additional paid-in capital | 184,822 | 170,775 | ||||||
| Common Shares held in treasury, 520 and 875 shares at December 31, 2012 and 2011, | ||||||||
| respectively, at cost | (1,885 | ) | (1,870 | ) | ||||
| Accumulated deficit | (22,902 | ) | (28,263 | ) | ||||
| Accumulated other comprehensive loss | (10,282 | ) | (9,615 | ) | ||||
| Total Stoneridge Inc. and subsidiaries shareholders’ equity | 149,753 | 131,027 | ||||||
| Noncontrolling interest | 44,081 | 49,612 | ||||||
| Total shareholders' equity | 193,834 | 180,639 | ||||||
| Total liabilities and shareholders' equity | $ | 592,691 | $ | 695,495 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended | For the Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| Years ended December 31 (in thousands) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net income | $ | 2,711 | $ | 35,366 | $ | 3,748 | $ | 45,537 | ||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||
| Foreign currency translation adjustments | (1,175 | ) | (2,505 | ) | (10,502 | ) | (5,971 | ) | ||||||||
| Pension liability adjustments | (27 | ) | - | (27 | ) | - | ||||||||||
| Unrealized gain on marketable securities | - | - | - | 16 | ||||||||||||
| Unrealized gain (loss) on derivatives | 398 | 5,391 | 9,862 | (7,722 | ) | |||||||||||
| Other comprehensive income (loss) | (804 | ) | 2,886 | (667 | ) | (13,677 | ) | |||||||||
| Consolidated comprehensive income | 1,907 | 38,252 | 3,081 | 31,860 | ||||||||||||
| Comprehensive gain (loss) attributable to noncontrolling interest | 90 | (3,209 | ) | (1,613 | ) | (3,820 | ) | |||||||||
| Comprehensive income attributable to Stoneridge, Inc. | $ | 1,817 | $ | 41,461 | $ | 4,694 | $ | 35,680 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Years ended December 31 (in thousands) | 2012 | 2011 | ||||||
| OPERATING ACTIVITIES: | ||||||||
| Net cash provided by operating activities | $ | 75,545 | $ | 921 | ||||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (26,352 | ) | (26,290 | ) | ||||
| Proceeds from sale of fixed assets | 521 | 3,863 | ||||||
| Capital contribution from noncontrolling interest | - | 397 | ||||||
| Business acquisitions, net of cash acquired | (19,779 | ) | (7,753 | ) | ||||
| Net cash used for investing activities | (45,610 | ) | (29,783 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of other debt | 22,146 | 1,408 | ||||||
| Repayments of other debt | (48,327 | ) | (968 | ) | ||||
| Revolving credit facility borrowings | 21,579 | 38,993 | ||||||
| Revolving credit facility payments | (59,600 | ) | (554 | ) | ||||
| Other financing costs | - | (605 | ) | |||||
| Repurchase of shares to satisfy employee tax withholding | (1,273 | ) | (752 | ) | ||||
| Net cash provided by (used for) financing activities | (65,475 | ) | 37,522 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1,364 | (1,903 | ) | |||||
| Net change in cash and cash equivalents | (34,176 | ) | 6,757 | |||||
| Cash and cash equivalents at beginning of period | 78,731 | 71,974 | ||||||
| Cash and cash equivalents at end of period | $ | 44,555 | $ | 78,731 | ||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Change in fair value of interest rate swap | $ | 1,134 | $ | 4,095 | ||||
| Issuance of Common Shares for acquisition of additional PST interest | $ | 10,197 | $ | 5,113 | ||||