Stoneridge Reports Strong First-quarter 2012 Results As Net Sales Increase More Than 35 Percent

- Improved operating performance drives EPS growth -

- Company maintains full-year sales and EPS guidance -

May 01, 2012, 08:31 ET from Stoneridge, Inc.

WARREN, Ohio, May 1, 2012 /PRNewswire/ -- Stoneridge, Inc. (NYSE: SRI) today announced strong financial results for the first quarter ended March 31, 2012. 

Net sales in the first quarter of 2012 increased $69.2 million, or 35.9%, to $262.3 million, compared with $193.0 million for the first quarter of 2011. The increase in net sales reflects the consolidation of the operating results of PST, the Brazilian joint venture in which the Company now has a controlling ownership interest.  Excluding the results of PST in the first quarter of 2012, net sales were $208.6 million, an increase of $15.6 million, or approximately 8%, from a year ago as a result of increased production volumes in most of the Company's served markets.

Net income for the first quarter of 2012 was $5.9 million, or $0.22 per diluted share, compared with a net income of $2.9 million, or $0.12 per diluted share, in the first quarter of 2011.  The increase in net income was primarily due to improved operational profitability in the wiring business, as well as more favorable copper costs and Mexican peso exchange rate compared with the first quarter of 2011.

As of March 31, 2012, Stoneridge's consolidated cash position was $42.9 million, which was $35.8 million lower than its 2011 year-end balance of $78.7 million. The change in the cash balance was primarily 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, and higher accounts receivable from increased sales.

Outlook

"I am pleased with our performance and execution in the first quarter," said John C. Corey, president and chief executive officer.  "The hard work by our team to enhance our wiring business margins is clearly paying off as evidenced by the return of our gross margin to more normal levels in the first quarter. As expected, we have also benefited from the moderating costs for copper and the Mexican peso.

"As we look ahead at the balance of 2012, we now see some near-term softness, especially in the Brazilian and European markets, that may impact our quarterly performance," said Corey. "However, we still anticipate achieving our previous full-year sales guidance in the range of $1.060 billion to $1.120 billion.  We remain confident in our ability to continue to improve operations and execute against our growth strategy while managing our cost structures.  As a result, we are maintaining our full-year earnings guidance of $1.10 to $1.30 per diluted share."

Conference Call on the Web

A live Internet broadcast of Stoneridge's conference call regarding 2012 first-quarter results can be accessed at 11 a.m. Eastern time on Tuesday, May 1, 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 medium- and heavy-duty truck, automotive, motorcycle and agricultural 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 change in medium- and heavy-duty truck, automotive, motorcycle 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 (Unaudited)                                                                                  

Three months ended March 31 (in thousands, except per share data)

2012

2011

Net Sales

$   262,267

$       193,044

Costs and Expenses:

Cost of goods sold

197,129

153,754

Selling, general and administrative

53,289

32,590

Operating income 

11,849

6,700

Interest expense, net

5,355

4,266

Equity in earnings of investees

(139)

(1,916)

Other (income) expense, net

(331)

999

Income before income taxes

6,964

3,351

Provision for income taxes

1,218

677

Net income

5,746

2,674

Net loss attributable to noncontrolling interest

(133)

(215)

Net income attributable to Stoneridge, Inc. and subsidiaries

$        5,879

$           2,889

Basic net income per share

$          0.22

$             0.12

Basic weighted average shares outstanding

26,220

24,018

Diluted net income per share

$          0.22

$             0.12

Diluted weighted average shares outstanding

26,857

24,474

 

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

(in thousands)

2012

2011

(Unaudited)

(Audited)

ASSETS

Current assets:

Cash and cash equivalents

$           42,934

$             78,731

Accounts receivable, less reserves of $1,671 and $1,485, respectively

182,622

162,354

Inventories, net

120,351

120,645

Prepaid expenses and other current assets

32,202

28,393

Total current assets

378,109

390,123

Long-term assets:

Property, plant and equipment, net

126,473

124,802

Other Assets

Intangible assets, net

104,074

102,731

Goodwill

71,256

68,808

Investments and other long-term assets, net

11,986

11,193

Total long-term assets

313,789

307,534

Total assets

$        691,898

$           697,657

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$           38,089

$             44,246

Short-term debt

31,921

39,181

Accounts payable

92,921

83,859

Accrued expenses and other current liabilities

59,187

91,417

Total current liabilities

222,118

258,703

Long-term liabilities:

Long-term debt

183,155

183,711

Deferred income taxes

68,611

69,110

Other long-term liabilities

5,482

5,494

Total long-term liabilities

257,248

258,315

Shareholders' equity:

Preferred Shares, without par value, authorized 5,000 shares, none issued

-

-

Common Shares, without par value, authorized 60,000 shares, issued 28,014 and 27,097

shares and outstanding 28,014 and 26,222 shares, respectively, with no stated value

-

-

Additional paid-in capital

182,230

170,775

Common Shares held in treasury, 373 and 875 shares, respectively, at cost

(2,988)

(1,870)

Accumulated deficit

(22,384)

(28,263)

Accumulated other comprehensive income (loss) 

4,752

(9,615)

Total Stoneridge Inc. and subsidiaries shareholders' equity

161,610

131,027

Noncontrolling interest

50,922

49,612

Total shareholders' equity

212,532

180,639

Total liabilities and shareholders' equity

$        691,898

$           697,657

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three months ended March 31 (in thousands)

2012

2011

OPERATING ACTIVITIES:

Net cash provided by (used for) operating activities

$            5,862

$         (15,476)

INVESTING ACTIVITIES:

Capital expenditures

(6,848)

(4,342)

Proceeds from sale of fixed assets

143

-

Capital contribution from noncontrolling interest

-

125

Payment for additional interest in PST

(19,779)

-

Net cash used for investing activities

(26,484)

(4,217)

FINANCING ACTIVITIES:

Revolving credit facility borrowings

160

753

Revolving credit facility payments

(16,266)

(423)

Repayments of debt, net

(44)

(68)

Other financing costs

(99)

(27)

Repurchase of Common Shares to satisfy employee tax withholding

(1,118)

(690)

Net cash used for financing activities

(17,367)

(455)

Effect of exchange rate changes on cash and cash equivalents

2,192

1,420

Net change in cash and cash equivalents

(35,797)

(18,728)

Cash and cash equivalents at beginning of period

78,731

71,974

Cash and cash equivalents at end of period

$         42,934

$           53,246

Supplemental disclosure of non-cash financing activities:

Change in fair value of interest rate swap

$                 86

$                144

Issuance of Common Shares for acquisition of additional PST interest

$          10,197

$                     -

 

SOURCE Stoneridge, Inc.



RELATED LINKS

http://www.stoneridge.com