EX-99.1 2 v358836_ex99-1.htm EX-99.1

Exhibit 99.1

STONERIDGE REPORTS THIRD-QUARTER 2013 RESULTS

| · | Continued Improvement in Operating Margin over Prior Year Driven by Sales Growth from New Business Awards and Cost Reductions

| · | Deleveraging from 2012 Cash Flow Lowers Interest Expense

| · | Company Maintains 2013 Guidance of $0.75-$0.95 per Share

WARREN, Ohio – October 31, 2013 – Stoneridge, Inc. (NYSE: SRI) today announced financial results for the third quarter ended September 30, 2013.

Third-quarter 2013 net sales were $233.5 million, an increase of $14.2 million, or 6.5%, compared with $219.3 million for the third quarter of 2012. The increase in the current quarter’s net sales was primarily due to higher sales in the Company’s Control Devices and Electronics business segments.

Net income for the third quarter of 2013 was $5.0 million, or $0.19 per diluted share, compared with net income of $0.4 million, or $0.02 per diluted share, in the third quarter of 2012. The increase in net income was primarily due to higher sales in the third quarter of 2013 compared with the same period in 2012.

As of September 30, 2013, Stoneridge’s consolidated cash position was $46.1 million, an increase of $1.5 million from December 31, 2012. The Company’s increased cash position was the result of increased net income in 2013 which was partially offset by increases in net working capital and capital expenditures to support sales growth.

John Corey, President and Chief Executive Officer, commented, “Current-year sales were up compared to prior year as a result of new business sales in our Control Devices and Electronics segments and volume increases. PST’s sales were up 12.5% compared to last year on a local currency basis; however, on a US dollar basis, PST’s sales were flat because the Brazilian real devalued compared to the US Dollar by 12.5%.”

Corey continued, “We have reported continued improvement in sales, operating earnings and net income in the third quarter in spite of the uncertainty in the economic environment. Given this uncertainty and continuing weakness in the North American commercial vehicle market, which has not rebounded as forecasted, we are encouraged by our continued sales performance and the contributions made to our net income over the past five quarters.”

Regarding the fourth quarter of 2013, Corey added, “Though the expected improvement in the North American commercial vehicle market and consumer confidence in Brazil remains uncertain, we have maintained our 2013 guidance of $0.75 to $0.95 per share as published on February 7, 2013, though most likely at the lower end of this range.”

1

Conference Call on the Web

A live Internet broadcast of Stoneridge’s conference call regarding 2013 third-quarter results can be accessed at 10 a.m. Eastern time on Thursday, October 31, 2013, at www.stoneridge.com, which will also offer a webcast replay.

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, 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

2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
(in thousands, except per share data) |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Net sales |  | $ | 233,511 |  |  | $ | 219,256 |  |  | $ | 712,006 |  |  | $ | 715,788 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods sold |  |  | 179,992 |  |  |  | 168,018 |  |  |  | 539,538 |  |  |  | 545,753 |
Selling, general and administrative |  |  | 42,814 |  |  |  | 44,623 |  |  |  | 139,646 |  |  |  | 149,954 |
Operating income |  |  | 10,705 |  |  |  | 6,615 |  |  |  | 32,822 |  |  |  | 20,081 |
Interest expense, net |  |  | 4,544 |  |  |  | 4,878 |  |  |  | 13,693 |  |  |  | 15,395 |
Equity in earnings of investees |  |  | (99 | ) |  |  | (207 | ) |  |  | (396 | ) |  |  | (443 | )
Other (income) expense, net |  |  | (269 | ) |  |  | 972 |  |  |  | 178 |  |  |  | 3,375 |
Income before income taxes |  |  | 6,529 |  |  |  | 972 |  |  |  | 19,347 |  |  |  | 1,754 |
Provision for income taxes |  |  | 1,016 |  |  |  | 383 |  |  |  | 3,160 |  |  |  | 717 |
Net income |  |  | 5,513 |  |  |  | 589 |  |  |  | 16,187 |  |  |  | 1,037 |
Net income (loss) attributable to noncontrolling interest |  |  | 466 |  |  |  | 170 |  |  |  | 1,260 |  |  |  | (1,703 | )
Net income attributable to Stoneridge, Inc. |  | $ | 5,047 |  |  | $ | 419 |  |  | $ | 14,927 |  |  | $ | 2,740 |
Earnings per share attributable to Stoneridge, Inc.: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.19 |  |  | $ | 0.02 |  |  | $ | 0.56 |  |  | $ | 0.10 |
Diluted |  | $ | 0.19 |  |  | $ | 0.02 |  |  | $ | 0.55 |  |  | $ | 0.10 |
Weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 26,692 |  |  |  | 26,430 |  |  |  | 26,663 |  |  |  | 26,358 |
Diluted |  |  | 27,177 |  |  |  | 27,144 |  |  |  | 27,236 |  |  |  | 27,009 |

3

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

|  | September 30, |  |  | December 31, |
(in thousands) |  | 2013 |  |  | 2012 |
|  | (Unaudited) |  |  |  |
ASSETS |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 46,057 |  |  | $ | 44,555 |
Accounts receivable, less reserves of $3,185 and $3,394, respectively |  |  | 150,988 |  |  |  | 141,503 |
Inventories, net |  |  | 118,976 |  |  |  | 96,032 |
Prepaid expenses and other current assets |  |  | 29,709 |  |  |  | 28,964 |
Total current assets |  |  | 345,730 |  |  |  | 311,054 |
Long-term assets: |  |  |  |  |  |  |  |
Property, plant and equipment, net |  |  | 112,953 |  |  |  | 119,147 |
Other assets |  |  |  |  |  |  |  |
Intangible assets, net |  |  | 73,570 |  |  |  | 84,397 |
Goodwill |  |  | 61,235 |  |  |  | 66,381 |
Investments and other long-term assets, net |  |  | 10,116 |  |  |  | 11,712 |
Total long-term assets |  |  | 257,874 |  |  |  | 281,637 |
Total assets |  | $ | 603,604 |  |  | $ | 592,691 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Current portion of debt |  | $ | 9,210 |  |  | $ | 18,925 |
Revolving credit facilities |  |  | - |  |  |  | 1,160 |
Accounts payable |  |  | 86,368 |  |  |  | 76,303 |
Accrued expenses and other current liabilities |  |  | 65,856 |  |  |  | 57,081 |
Total current liabilities |  |  | 161,434 |  |  |  | 153,469 |
Long-term liabilities: |  |  |  |  |  |  |  |
Long-term debt, net |  |  | 187,452 |  |  |  | 181,311 |
Deferred income taxes |  |  | 55,407 |  |  |  | 59,819 |
Other long-term liabilities |  |  | 4,123 |  |  |  | 4,258 |
Total long-term liabilities |  |  | 246,982 |  |  |  | 245,388 |
Shareholders' equity: |  |  |  |  |  |  |  |
Preferred Shares, without par value, authorized 5,000 shares, none issued |  |  | - |  |  |  | - |
Common Shares, without par value, authorized 60,000 shares, issued 28,803 and 28,433 |  |  |  |  |  |  |  |
shares and outstanding 28,484 and 27,913 shares at September 30, 2013 and December 31, 2012, |  |  |  |  |  |  |  |
respectively, with no stated value |  |  | - |  |  |  | - |
Additional paid-in capital |  |  | 186,857 |  |  |  | 184,822 |
Common Shares held in treasury, 319 and 520 shares at September 30, 2013 and December 31, |  |  |  |  |  |  |  |
2012, respectively, at cost |  |  | (519 | ) |  |  | (1,885 | )
Accumulated deficit |  |  | (7,975 | ) |  |  | (22,902 | )
Accumulated other comprehensive loss |  |  | (24,598 | ) |  |  | (10,282 | )
Total Stoneridge Inc. shareholders’ equity |  |  | 153,765 |  |  |  | 149,753 |
Noncontrolling interest |  |  | 41,423 |  |  |  | 44,081 |
Total shareholders' equity |  |  | 195,188 |  |  |  | 193,834 |
Total liabilities and shareholders' equity |  | $ | 603,604 |  |  | $ | 592,691 |

4

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |  |  |  |  |  |  |  |  |
(Unaudited) |  |  |  |  |  |  |  |  |
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
(in thousands) |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Net income |  | $ | 5,513 |  |  | $ | 589 |  |  | $ | 16,187 |  |  | $ | 1,037 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments |  |  | 167 |  |  |  | 1,018 |  |  |  | (11,947 | ) |  |  | (9,327 | )
Unrealized gain (loss) on derivatives |  |  | 309 |  |  |  | 3,979 |  |  |  | (2,369 | ) |  |  | 9,464 |
Other comprehensive income (loss) |  |  | 476 |  |  |  | 4,997 |  |  |  | (14,316 | ) |  |  | 137 |
Consolidated comprehensive income |  |  | 5,989 |  |  |  | 5,586 |  |  |  | 1,871 |  |  |  | 1,174 |
Comprehensive income (loss) attributable to noncontrolling interest |  |  | 466 |  |  |  | 170 |  |  |  | 1,260 |  |  |  | (1,703 | )
Comprehensive income attributable to Stoneridge, Inc. |  | $ | 5,523 |  |  | $ | 5,416 |  |  | $ | 611 |  |  | $ | 2,877 |

5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30 (in thousands) |  | 2013 |  |  | 2012 |
OPERATING ACTIVITIES: |  |  |  |  |  |
Net cash provided by operating activities |  | $ | 22,444 |  |  | $ | 40,029 |
INVESTING ACTIVITIES: |  |  |  |  |  |  |  |
Capital expenditures |  |  | (18,522 | ) |  |  | (20,243 | )
Proceeds from sale of fixed assets |  |  | 94 |  |  |  | 490 |
Payment for additional interest in PST |  |  | - |  |  |  | (19,779 | )
Net cash used for investing activities |  |  | (18,428 | ) |  |  | (39,532 | )
FINANCING ACTIVITIES: |  |  |  |  |  |  |  |
Revolving credit facility borrowings |  |  | - |  |  |  | 11,420 |
Revolving credit facility payments |  |  | (1,160 | ) |  |  | (38,433 | )
Proceeds from issuance of other debt |  |  | 21,574 |  |  |  | 21,315 |
Repayments of other debt |  |  | (22,262 | ) |  |  | (37,973 | )
Other financing costs |  |  | - |  |  |  | (134 | )
Repurchase of Common Shares to satisfy employee tax withholding |  |  | (729 | ) |  |  | (1,135 | )
Net cash used for financing activities |  |  | (2,577 | ) |  |  | (44,940 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | 63 |  |  |  | 1,278 |
Net change in cash and cash equivalents |  |  | 1,502 |  |  |  | (43,165 | )
Cash and cash equivalents at beginning of period |  |  | 44,555 |  |  |  | 78,731 |
Cash and cash equivalents at end of period |  | $ | 46,057 |  |  | $ | 35,566 |
Supplemental disclosure of non-cash financing activities: |  |  |  |  |  |  |  |
Change in fair value of interest rate swap |  | $ | (1,019 | ) |  | $ | 1,450 |
Issuance of Common Shares for acquisition of additional PST interest |  | $ | - |  |  | $ | 10,197 |

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