Stoneridge Reports Third-Quarter 2010 Results

WARREN, Ohio, Oct. 22 /PRNewswire-FirstCall/ -- Stoneridge, Inc. (NYSE: SRI) today announced improving financial results for the third quarter ended September 30, 2010.  

Net sales increased $42.4 million, or 36.0%, to $160.4 million, compared with $118.0 million for the third quarter of 2009, driven by market demand coupled with organic growth.  The increase in net sales was primarily driven by increased vehicle production volume in the third quarter of 2010 compared with the third quarter of 2009 in the passenger car and light truck markets in North America (26.3%) and medium- and heavy-duty truck markets in both North America (25.1%) and Europe (76.0%).

Net income for the third quarter of 2010 was $0.7 million, or $0.03 per diluted share, compared with a net loss of $0.8 million, or $(0.04) per diluted share, in the third quarter of 2009.  The increase in net income was primarily due to increased production volume.  Operating income for the third quarter of 2010 was $5.0 million, an increase of approximately 90.5% from a year ago.  However, our third quarter 2010 results were negatively impacted by component shortages and higher than expected program launch costs.

Equity earnings have improved to $3.9 million in the quarter due primarily to the improved profitability of PST, our Brazilian joint venture.  As a result of accounting guidelines, we provided deferred tax expense of $1.3 million, or $0.05 per diluted share, which does not impact our cash taxes.

As of September 30, 2010, Stoneridge's consolidated cash position was $84.9 million, $7.0 million lower than its 2009 year-end balance of $91.9 million. The decline was primarily the result of higher accounts receivable balances related to the increase in sales. Stoneridge's Asset Based Lending facility remains undrawn.

On October 4, 2010, Stoneridge completed the refinancing of its unsecured $183.0 million 11.5% notes that would have matured on May 1, 2012.  Stoneridge issued $175.0 million 9.5% new senior secured notes which mature October 15, 2017 and extended the maturity of the Asset Based Lending facility until November 1, 2012.

Outlook

"Although we are pleased that our net sales and net income increased in the third quarter, our results were negatively impacted by additional costs associated with the launch of a major customer program and supply shortages of electronic chips and electrical connectors," said John C. Corey, the Company's president and chief executive officer.  "These issues are being resolved, and the actions we are taking to support our customer commitments will benefit our future performance.  In the meantime, as the market continues to improve, we expect to see further improvement in our financial results.  We now expect our 2010 sales to be in the range of $630.0 to $640.0 million.  We remain committed to creating long-term value through growth, diversification and leveraging our lower cost structure.  In addition, we expect our future performance to benefit from our recently completed refinancing."

Conference Call on the Web

A live Internet broadcast of Stoneridge's conference call regarding 2010 third-quarter results can be accessed at 11 a.m. Eastern time on Friday, October 22, 2010, 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 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 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.

SOURCE Stoneridge, Inc.