Stoneridge Reports Fourth-Quarter 2011 Results
- Annual Sales Reach New Record Level in 2011 -
- PST Transaction Positively Affects Results -
- 2012 Sales Guidance of $1.060 Billion to $1.120 Billion with 2012 EPS Guidance of $1.10 to $1.30 per Share -
WARREN, Ohio, Feb. 13, 2012 /PRNewswire/ -- Stoneridge, Inc. (NYSE: SRI) today announced financial results for the fourth quarter ended December 31, 2011.
Fourth-quarter 2011 net sales were $186.0 million, an increase of $25.5 million, or 15.9%, compared with $160.5 million for the fourth quarter of 2010. The increase in net sales was primarily due to higher volume in the commercial vehicle market in North America.
Net income for the fourth quarter of 2011 was $38.6 million, or $1.56 per diluted share, an increase of $34.0 million, or $1.37 per diluted share, compared with net income of $4.5 million, or $.19 per diluted share, in the fourth quarter of 2010. The increase was primarily due to a $65.4 million pretax gain and a $42.5 million after-tax gain or $1.72 per share recognized in conjunction with Stoneridge's previously announced purchase of additional ownership in its Brazil-based PST joint venture. Offsetting the positive impact of volume gains and the PST transaction during the quarter were certain costs associated with the PST transaction, other legacy projects and previous restructuring programs which totaled $9.1 million on a pretax basis or $.27 per share as well as other cost items associated with operations which totaled $5.5 million or $.21 per share. (see attached table of "Fourth Quarter Items affecting Net Income and EPS")
For the year ended December 31, 2011, the Company reported net sales of $765.4 million, compared with $635.2 million for the same period in 2010, an increase of $130.2 million, or 20.5%. Net income for 2011 was $49.4 million or $2.00 per diluted share and increased $37.8 million to $49.4 million, or $1.53 per diluted share, compared with $11.5 million, or $.47 per diluted share, for the year ended December 31, 2010.
As of December 31, 2011, Stoneridge's consolidated cash position was $78.8 million, an increase of $6.8 million from December 31, 2010, primarily due to cash borrowed and held to complete the final portion of the PST transaction.
"We experienced a difficult year in 2011 due to operational underperformance in our wiring business. However, we have addressed the operating issues and have improved service levels and labor efficiency significantly. Our new business wins and growth in end markets drove a record sales year for Stoneridge," said John C. Corey, president and chief executive officer.
"Our results for the fourth quarter, excluding the gain recognized by the PST transaction, did not meet our expectations due to costs related to legacy issues from previous restructurings, PST transaction costs and cost items associated with valuation of assets. While these costs negatively impacted the fourth quarter results, the improvements we have made in our operations will benefit us in 2012," Corey said.
Corey added, "We look forward to 2012 with cautious optimism. We expect to return to a more normal range for gross margin based on a weaker Mexican peso, lower copper prices and operational improvements. Though there are risks associated with our plan in 2012, especially in the European commercial vehicle market and other economic uncertainties, we believe sales from our existing business along with sales from the PST consolidation will be in the range of $1.060 billion to $1.120 billion with an EPS in the range of $1.10 per diluted share to $1.30 per diluted share."
Conference Call on the Web
A live Internet broadcast of Stoneridge's conference call regarding 2011 fourth-quarter results can be accessed at 11 a.m. Eastern time on Monday, February 13, 2012, 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.
Fourth Quarter 2011 Items affecting Net Income and EPS :
(In Millions of Dollars)
Legacy or Previous Restructuring Activity Related:
BCS non-cash Goodwill Impairment, net of elimination of earnout
Contractual and Environmental Related (SPL Lease/Sarasota Remediation)
ERP Cost Write Down
PST Transaction Related :
Non- Cash Gain on PST Transaction
Long Term Incentive Compensation
PST Transaction Fees
Subtotal Legacy/Restructuring/PST Transaction
Other Items affecting Net Income and EPS :
Annual Physical Inventory Adjustments/Excess Scrap
Increased Maintenance/Repair Expense
Unfavorable Overhead/Direct Labor Cost from Inventory reduction
Unfavorable Purchase Price Variance of Materials
Increased Warranty Expense
Total Other Items affecting Net Income :
Total Fourth Quarter 2011 Items affecting Net Income and EPS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
For the years ended
(in thousands, except per share data)
Costs and expenses:
Cost of goods sold
Selling, general and administrative
Goodwill impairment charge
Operating income (loss)
Interest expense, net
Equity in earnings of investees
Loss on early extinguishment of debt
Gain on previously held equity interest
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
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 $2,944 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
Current portion of long-term debt
Accrued expenses and other current liabilities
Total current liabilities
Deferred income taxes
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 27,097 and 25,994
shares and outstanding 26,222 and 25,393 shares, respectively, with no stated value
Additional paid-in capital
Common Shares held in treasury, 875 and 601 shares, respectively, at cost
Accumulated other comprehensive income (loss)
Total Stoneridge Inc. and subsidiaries shareholders' equity
Total shareholders' equity
Total liabilities and shareholders' equity
(A) Subject to modification for final purchase accounting entries in connection with the acquisition of additional interest in PST.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31 (in thousands)
Net cash provided by operating activities
Proceeds from sale of fixed assets
Capital contribution from noncontrolling interests
Business acquisitions and other
Net cash used for investing activities
Extinguishment of senior notes
Proceeds from issuance of senior secured notes
Proceeds from issuance of other debt
Repayments of other 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
Premiums related to early extinguishment of debt
Net cash provided by (used for) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease 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.