Stoneridge Reports Fourth-Quarter 2012 Results

WARREN, Ohio, March 1, 2013 /PRNewswire/ --

  • 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

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.

 


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

 

SOURCE Stoneridge, Inc.



RELATED LINKS
http://www.stoneridge.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.