Stoneridge Reports First-Quarter 2011 Results Highlighted by Sales Growth
- Strong Demand Across Several End Markets Drives Continued Growth -
- Company Increases 2011 Sales Guidance -
WARREN, Ohio, May 6, 2011 /PRNewswire/ -- Stoneridge, Inc. (NYSE: SRI) today announced financial results – fueled primarily by continued sales growth – for the first quarter ended March 31, 2011.
First-quarter 2011 net sales increased $44.9 million, or 30.3%, to $193.0 million, compared with $148.1 million for the first quarter of 2010. The increase in the current quarter's net sales was primarily due to increased volume in the passenger car and light truck markets in North America (15.6%) and commercial vehicle markets in both North America (39.7%) and Europe (66.0%).
Net income for the first quarter of 2011 was $2.9 million, or $0.12 per diluted share, compared with a net income of $1.9 million, or $0.08 per diluted share, in the first quarter of 2010. The increase in net income was primarily due to increased production volume, which was somewhat offset, as discussed below, by operational inefficiencies, higher commodity costs and certain unfavorable foreign exchange rates.
As of March 31, 2011, Stoneridge's consolidated cash position was $53.2 million, a decrease of $18.8 million from December 31, 2010, primarily due to increased accounts receivable resulting from the higher sales level. The Company's asset-based credit facility remains undrawn.
"We are pleased with the continued momentum our growth strategy is generating for the Company. In particular, our European commercial vehicle, North American electronics and North American automotive businesses, along with our joint ventures in India and Brazil, are performing extremely well," said John C. Corey, president and chief executive officer. "That said, while we experienced strong revenue growth in the first quarter, we did not convert this volume increase at the same marginal contribution as past quarters due to reduced operational performance in our North American wiring business, which we are addressing, as well as higher commodity costs and an unfavorable exchange rate which affects Mexican peso-denominated costs. As we look ahead, we see positive underlying fundamentals in the markets we serve, such as commercial vehicle, agricultural/off highway and automotive. Therefore, we are increasing our guidance for 2011 sales to be in the range of $750 million to $775 million, up from the previous range of $720 million to $750 million provided in the 2010 fourth-quarter earnings release issued on February 4, 2011."
Recent Accounting Change
Effective January 1, 2011, Stoneridge elected to change the method of valuing inventories for certain U.S. businesses to the first-in, first-out (FIFO) method. In prior years, these inventories were valued using the last-in, first-out (LIFO) method. The Company has applied this change in method of inventory costing retrospectively to all prior periods. All of the financial comparisons in this press release for 2011 and 2010 reflect this change.
Conference Call on the Web
A live Internet broadcast of Stoneridge's conference call regarding 2011 first-quarter results can be accessed at 9 a.m. Eastern time on Friday, May 6, 2011, 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 and off-highway vehicle markets. Additional information about Stoneridge can be found at www.stoneridge.com.
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 change in commercial vehicle, automotive or agricultural 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31 (in thousands, except per share data)
Costs and Expenses:
Cost of goods sold
Selling, general and administrative
Interest expense, net
Equity in earnings of investees
Other expense (income), net
Income before income taxes
Provision (benefit) for income taxes
Net loss attributable to noncontrolling interest
Net income attributable to Stoneridge, Inc. and subsidiaries
Basic net income per share
Basic weighted average shares outstanding
Diluted net income per share
Diluted weighted average shares outstanding
CONDENSED CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Accounts receivable, less reserves of $1,925 and $2,013, respectively
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Investments and other long-term assets, net
Total long-term assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accrued expenses and other current liabilities
Total current liabilities
Other long-term liabilities
Total long-term liabilities
Preferred Shares, without par value, authorized 5,000 shares, none issued
Common Shares, without par value, authorized 60,000 shares, issued 26,450 and 25,994
shares and outstanding 25,598 and 25,393 shares, respectively, with no stated value
Additional paid-in capital
Common Shares held in treasury, 852 and 601 shares, respectively, at cost
Accumulated other comprehensive income
Total Stoneridge Inc. and subsidiaries shareholders’ equity
Total shareholders' equity
Total liabilities and shareholders' equity
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31 (in thousands)
Net cash used for operating activities
Proceeds from sale of fixed assets
Capital contribution from noncontrolling interest
Net cash used for investing activities
Repayments of debt
Revolving credit facility borrowings
Revolving credit facility payments
Other financing costs
Repurchase of shares to satisfy employee tax withholding
Excess tax benefits from share-based compensation expense
Net cash provided by (used for) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosure of non-cash financing activities:
Change in fair value of interest rate swap
SOURCE Stoneridge, Inc.