Stoneridge Reports Second-Quarter 2010 Results
Increasing Volume Drives Net Sales up 62.6%
Cost Savings Initiatives Benefitting Operating Income and Leveraging Volume to Improve Gross Margin
WARREN, Ohio, July 28 /PRNewswire-FirstCall/ -- Stoneridge, Inc. (NYSE: SRI) today announced net sales of $166.3 million and net income of $4.2 million, or $0.17 per diluted share, for the second quarter ended June 30, 2010.
Net sales increased $64.0 million, or 62.6%, to $166.3 million, compared with $102.3 million for the second quarter of 2009, driven by market demand coupled with internal organic growth. The increase in net sales was primarily caused by increased volume in the second quarter of 2010 compared with the second quarter of 2009 in the passenger car and light truck markets in North America (72.7%) and medium- and heavy-duty truck markets in both North America (28.3%) and Europe (58.1%).
Net income for the second quarter of 2010 was $4.2 million, or $0.17 per diluted share, compared with a net loss of $19.8 million, or $(0.84) per diluted share, in the second quarter of 2009. The increase in net income was primarily due to increased production volume and the favorable impact of previous restructuring and cost-reduction initiatives.
Stoneridge generated operating income of $8.2 million in the second quarter as the Company leveraged its streamlined cost structure against improving industry volumes.
As of June 30, 2010, Stoneridge's consolidated cash position was $74.6 million, $17.3 million lower than its 2009 year-end balance of $91.9 million, and was primarily the result of higher accounts receivable balances from higher sales. The Company's Asset Based Lending facility remains undrawn.
Outlook
"We are encouraged by the improvement we are beginning to see in industry volumes," said John C. Corey, the Company's president and chief executive officer. "While the state of the economic recovery remains a variable in our future forecast, we now believe our 2010 sales will increase and be in the range of $605 million to $625 million based on the market outlook we have today. I am further encouraged by our team's ability to maintain the Company's cost structure vis-a-vis the improving industry volumes and our new business wins. We look forward to benefits that we believe we will recognize as higher industry volumes and new business wins enhance our financial results."
Conference Call on the Web
A live Internet broadcast of Stoneridge's conference call regarding 2010 second-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, July 28, 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.
STONERIDGE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
June 30, |
June 30, |
|||||||
2010 |
2009 |
2010 |
2009 |
|||||
Net Sales |
$ 166,262 |
$ 102,290 |
$ 314,336 |
$ 223,375 |
||||
Costs and Expenses: |
||||||||
Cost of goods sold |
126,642 |
88,694 |
241,189 |
190,504 |
||||
Selling, general and administrative |
31,447 |
27,889 |
61,015 |
55,924 |
||||
Operating Income (Loss) |
8,173 |
(14,293) |
12,132 |
(23,053) |
||||
Interest expense, net |
5,630 |
5,538 |
11,236 |
11,035 |
||||
Equity in earnings of investees |
(1,611) |
(903) |
(2,302) |
(1,478) |
||||
Other expense (income), net |
(749) |
639 |
(1,699) |
645 |
||||
Income (Loss) Before Income Taxes |
4,903 |
(19,567) |
4,897 |
(33,255) |
||||
Provision (benefit) for income taxes |
731 |
197 |
(758) |
(1,911) |
||||
Net Income (Loss) |
4,172 |
(19,764) |
5,655 |
(31,344) |
||||
Net Loss Attributable to Noncontrolling Interest |
(21) |
- |
(44) |
- |
||||
Net Income (Loss) Attributable to Stoneridge, Inc and Subsidiaries |
$ 4,193 |
$ (19,764) |
$ 5,699 |
$ (31,344) |
||||
Basic net income (loss) per share |
$ 0.17 |
$ (0.84) |
$ 0.24 |
$ (1.33) |
||||
Basic weighted average shares outstanding |
23,965 |
23,516 |
23,922 |
23,490 |
||||
Diluted net income (loss) per share |
$ 0.17 |
$ (0.84) |
$ 0.23 |
$ (1.33) |
||||
Diluted Weighted Average Shares Outstanding |
24,389 |
23,516 |
24,351 |
23,490 |
||||
STONERIDGE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
|||||
June 30, |
December 31, |
||||
2010 |
2009 |
||||
(Unaudited) |
(Audited) |
||||
ASSETS |
|||||
Current Assets: |
|||||
Cash and cash equivalents |
$ 74,608 |
$ 91,907 |
|||
Accounts receivable, less reserves of $1,363 and $2,350, respectively |
106,813 |
81,272 |
|||
Inventories, net |
47,061 |
40,244 |
|||
Prepaid expenses and other |
20,434 |
17,247 |
|||
Total current assets |
248,916 |
230,670 |
|||
Long-Term Assets: |
|||||
Property, plant and equipment, net |
73,424 |
76,991 |
|||
Investments and other, net |
55,553 |
54,864 |
|||
Total long-term assets |
128,977 |
131,855 |
|||
Total Assets |
$ 377,893 |
$ 362,525 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current Liabilities: |
|||||
Accounts payable |
$ 63,471 |
$ 50,947 |
|||
Accrued expenses and other current liabilities |
40,977 |
36,827 |
|||
Total current liabilities |
104,448 |
87,774 |
|||
Long-Term Liabilities: |
|||||
Long-term debt |
183,290 |
183,431 |
|||
Other long-term liabilities |
10,485 |
17,263 |
|||
Total long-term liabilities |
193,775 |
200,694 |
|||
Shareholders' Equity |
|||||
Preferred Shares, without par value, authorized 5,000 shares, none issued |
- |
- |
|||
Common Shares, without par value, authorized 60,000 shares, issued |
- |
- |
|||
Additional paid-in capital |
160,100 |
158,748 |
|||
Common Shares held in treasury, 529 and 301 shares, respectively, |
(411) |
(292) |
|||
Accumulated deficit |
(85,861) |
(91,560) |
|||
Accumulated other comprehensive income |
1,394 |
2,669 |
|||
Total Stoneridge Inc. and Subsidiaries shareholders' equity |
75,222 |
69,565 |
|||
Noncontrolling interest |
4,448 |
4,492 |
|||
Total shareholders' equity |
79,670 |
74,057 |
|||
Total Liabilities and Shareholders' Equity |
$ 377,893 |
$ 362,525 |
|||
STONERIDGE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
Six Months |
||||
2010 |
2009 |
|||
OPERATING ACTIVITIES: |
||||
Net cash used for operating activities |
$ (7,433) |
$ (2,600) |
||
INVESTING ACTIVITIES: |
||||
Capital expenditures |
(7,063) |
(6,743) |
||
Proceeds from sale of fixed assets |
21 |
92 |
||
Net cash used for investing activities |
(7,042) |
(6,651) |
||
FINANCING ACTIVITIES: |
||||
Share-based compensation activity |
294 |
- |
||
Revolving credit facility borrowings, net |
477 |
- |
||
Repayments of long-term debt |
(141) |
- |
||
Net cash provided by financing activities |
630 |
- |
||
Effect of exchange rate changes on cash and cash equivalents |
(3,454) |
2,040 |
||
Net change in cash and cash equivalents |
(17,299) |
(7,211) |
||
Cash and cash equivalents at beginning of period |
91,907 |
92,692 |
||
Cash and cash equivalents at end of period |
$ 74,608 |
$ 85,481 |
||
SOURCE Stoneridge, Inc.
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