Stoneridge Reports Second-Quarter 2013 Results

WARREN, Ohio, Aug. 1, 2013 /PRNewswire/ -- 

  • Sequential Sales Growth Over the Last Three Quarters
  • Continued Improvement in Operating Margins and Earnings
  • Company Maintains 2013 Guidance of $0.75-$0.95 per Share
  • Lower Interest Expense from Deleveraging

Stoneridge, Inc. (NYSE: SRI) today announced financial results for the second quarter ended June 30, 2013.

Second-quarter 2013 net sales were $242.8 million, an increase of $8.5 million, or 3.6%, compared with $234.3 million for the second quarter of 2012. The increase in the current quarter's net sales was primarily due to higher sales in the Company's PST, Electronics and Control Devices business segments.

Net income for the second quarter of 2013 was $5.8 million, or $0.21 per diluted share, compared with a net loss of $3.6 million, or $(0.13) per diluted share, in the second quarter of 2012.  The increase in net income was primarily due to higher sales in the second quarter of 2013 compared with the same period in 2012 and continued improvement in PST's markets and operations in Brazil.

As of June 30, 2013, Stoneridge's consolidated cash position was $37.0 million, a decrease of $7.5 million from December 31, 2012, due primarily to increased receivables and inventories at PST resulting from the Brazilian market recovery.

John Corey, President and Chief Executive Officer, commented, "Year-over-year sales comparisons were higher in the second quarter and continued the sequential sales increases we have seen since the fourth quarter of 2012.  The higher sales are mostly the result of improved PST sales which continue to increase over the trough level experienced in the second quarter of 2012."

Corey further noted Company-wide cost reductions and other initiatives implemented during 2012 continued to improve operating margins.  PST margins improved as a result of previous cost actions and an improving sales mix driven largely by alarm systems in the aftermarket.

Corey continued, "While the commercial vehicle market demand remains less than robust, Stoneridge's participation in diversified markets has reduced this impact and improved our ability to generate operating profits with lower volumes.  In addition, even though the U.S. dollar has gained strength versus the Brazilian Real (BRL), we have been able to better manage our global foreign exchange exposure and have reduced PST's U.S. dollar denominated debt by $10.3 million since the start of 2013.  We have recorded a relatively minor currency impact in the second quarter of 2013 compared with the significant impact experienced in the second quarter of 2012."

Regarding the remaining quarters of 2013, Corey added, "We expect to see further financial improvement, continuing a trend that started in the third quarter of 2012.  We reaffirm our 2013 guidance of $0.75 to $0.95 per share as published on February 7, 2013, based on our expectation of continued market improvement and benefits from cost initiatives."

Conference Call on the Web
A live Internet broadcast of Stoneridge's conference call regarding 2013 second-quarter results can be accessed at 11 a.m. Eastern time on Thursday, August 1, 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.

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)




Three Months Ended


Six Months Ended



June 30,


June 30,

(in thousands, except per share data)


2013


2012


2013


2012



















Net sales


$     242,785


$     234,265


$     478,495


$     496,532










Costs and expenses:









Cost of goods sold


182,565


180,606


359,546


377,735

Selling, general and administrative


48,395


52,042


96,832


105,331










Operating Income


11,825


1,617


22,117


13,466










Interest expense, net


4,575


5,162


9,149


10,517

Equity in earnings of investees


(96)


(97)


(297)


(236)

Other expense (income), net


(170)


2,734


447


2,403










Income (loss) before income taxes


7,516


(6,182)


12,818


782










Provision (benefit) for income taxes


1,125


(884)


2,144


334










Net income (loss)


6,391


(5,298)


10,674


448










Net income (loss) attributable to noncontrolling interest


634


(1,740)


794


(1,873)










Net income (loss) attributable to Stoneridge, Inc.


$        5,757


$        (3,558)


$        9,880


$         2,321










Earnings per share attributable to Stoneridge, Inc.:









Basic


$          0.22


$          (0.13)


$          0.37


$           0.09

Diluted


$          0.21


$          (0.13)


$          0.36


$           0.09










Weighted average shares outstanding









Basic


26,692


26,424


26,649


26,322

Diluted


27,348


26,424


27,358


26,999

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)




June 30,


December 31,

(in thousands)


2013


2012



(Unaudited)



ASSETS










Current assets:





Cash and cash equivalents


$           37,023


$             44,555

Accounts receivable, less reserves of $3,411 and $3,394, respectively


158,371


141,503

Inventories, net


109,812


96,032

Prepaid expenses and other current assets


30,293


28,964

Total current assets


335,499


311,054






Long-term assets:





Property, plant and equipment, net


112,236


119,147

Other assets





   Intangible assets, net


75,189


84,397

   Goodwill


61,578


66,381

   Investments and other long-term assets, net


9,904


11,712

Total long-term assets


258,907


281,637

Total assets


$        594,406


$           592,691






LIABILITIES AND SHAREHOLDERS' EQUITY










Current liabilities:





Current portion of debt


$           10,858


$             18,925

Revolving credit facilities


-


1,160

Accounts payable


85,759


76,303

Accrued expenses and other current liabilities


60,345


57,081

Total current liabilities


156,962


153,469






Long-term liabilities:





Long-term debt, net


188,429


181,311

Deferred income taxes


56,554


59,819

Other long-term liabilities


4,369


4,258

Total long-term liabilities


249,352


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 28,487 and 27,913 shares at June 30, 2013 and December 31, 2012,
   respectively, with no stated value

 

 

-


 

-

Additional paid-in capital


185,498


184,822

Common Shares held in treasury, 316 and 520 shares at June 30, 2013 and December 31, 
   2012, respectively, at cost


(519)


(1,885)

Accumulated deficit


(13,022)


(22,902)

Accumulated other comprehensive loss


(25,074)


(10,282)

Total Stoneridge Inc. shareholders' equity


146,883


149,753

Noncontrolling interest


41,209


44,081

Total shareholders' equity


188,092


193,834

Total liabilities and shareholders' equity


$        594,406


$           592,691

 

 

 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS 

 (Unaudited) 





























Three months ended


Six months ended






June 30,


June 30,

 (in thousands) 





2013


2012


2013


2012













 Net income (loss) 





$            6,391


$           (5,298)


$         10,674


$              448

 Other comprehensive income (loss), net of tax: 












 Foreign currency translation adjustments 





(14,359)


(17,456)


(12,114)


(10,345)

 Unrealized gain (loss) on derivatives 





(2,937)


(1,771)


(2,678)


5,485

 Other comprehensive loss 





(17,296)


(19,227)


(14,792)


(4,860)

 Consolidated comprehensive loss 





(10,905)


(24,525)


(4,118)


(4,412)

 Income (loss) attributable to noncontrolling interest 





634


(1,740)


794


(1,873)













 Comprehensive loss attributable to Stoneridge, Inc. 





$        (11,539)


$         (22,785)


$         (4,912)


$         (2,539)

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


Six months ended June 30 (in thousands)


2013


2012






OPERATING ACTIVITIES:





          Net cash provided by operating activities


$            3,243


$           15,316






INVESTING ACTIVITIES:





Capital expenditures


(10,701)


(14,370)

Proceeds from sale of fixed assets


83


301

Payment for additional interest in PST


-


(19,779)

          Net cash used for investing activities


(10,618)


(33,848)






FINANCING ACTIVITIES:





Revolving credit facility borrowings


-


11,310

Revolving credit facility payments


(1,160)


(24,426)

Proceeds from issuance of other debt


19,234


18,871

Repayments of other debt


(16,953)


(26,124)

Other financing costs


-


(111)

Repurchase of Common Shares to satisfy employee tax withholding


(670)


(1,119)

          Net cash provided by (used for) financing activities


451


(21,599)






Effect of exchange rate changes on cash and cash equivalents


(608)


564






Net change in cash and cash equivalents


(7,532)


(39,567)






Cash and cash equivalents at beginning of period


44,555


78,731






Cash and cash equivalents at end of period


$         37,023


$           39,164






Supplemental disclosure of non-cash financing activities:





Change in fair value of interest rate swap


$          (1,394)


$                754

Issuance of Common Shares for acquisition of additional PST interest


$                    -


$           10,197

                                                  

 

SOURCE Stoneridge, Inc.



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