WARREN, Ohio, May 2 /PRNewswire-FirstCall/ -- Stoneridge, Inc. today announced net sales of $203.1 million and net income of $6.5 million, or $0.28 per diluted share, for the first quarter ended March 31, 2008.
The improvement in first-quarter results was primarily attributable to new program sales, continuing strength in the European commercial market and a more favorable sales mix in the Company's North American electronics business. These improvements were accomplished despite a first-quarter production decline of approximately 26% in the medium- and heavy-duty truck market in North America.
Net sales increased $18.1 million, or 9.8 percent, to $203.1 million, compared with $185.0 million for the first quarter of 2007. The increase in net sales was primarily attributable to strong electronics sales in North America and Europe and the impact of foreign currency translation. The effect of foreign currency translation increased first-quarter net sales by approximately $3.8 million compared with the same period in 2007. The sales increase was partially offset by lower sales volume in the Company's North American light vehicle and commercial vehicle markets.
Net income for the first quarter was $6.5 million, or $0.28 per diluted share, compared with net income of $4.9 million, or $0.21 per diluted share, in the first quarter of 2007. The increase in net income was due primarily to strong electronics sales in North America and increased joint venture earnings. These favorable impacts were partially offset by $2.5 million in costs related to the Company's previously announced restructuring initiatives. In addition, the Company was subject to a higher effective tax rate in the 2008 first quarter which was primarily attributable to the restructuring costs associated with ceasing manufacturing operations at the Mitcheldean, UK facilities, which provided no tax benefit.
"We are encouraged by our first-quarter results given the difficult conditions in our North American markets and the magnitude of the restructuring initiatives under way," said John C. Corey, president and chief executive officer. "We are particularly pleased that our end-market diversification strategy has helped offset the weak demand in the North American light vehicle and commercial vehicle markets."
Net cash provided by operating activities for the quarter ended March 31, 2008 was $8.6 million, compared with net cash used of $(5.1) million for the quarter ended March 31, 2007. The increase of $13.7 million in cash provided by operating activities was primarily due to increased accounts payable balances in the current year.
Outlook
"In our January 31, 2008 fourth-quarter 2007 earnings release, we stated that we would not provide earnings guidance for 2008 at that time because of the previously announced IPO transaction filing in Brazil by the Company's PST Eletronica S.A. joint venture and the volatility and uncertainty in the capital and equity markets. Although we remain hopeful that PST can continue the IPO process this year, it is dependent on stabilization of the global equity markets. Therefore, at this time, we have decided to provide our initial outlook for the 2008 full year excluding any potential impact from an IPO transaction for our Brazilian joint venture," Corey said.
"Based on the current industry outlook, our expectation is for full-year 2008 net income per diluted share to be in the range of $0.75 to $0.85, an increase from our earnings of $0.71 in 2007," Corey said. "This anticipated increase includes approximately $9 million to $13 million in restructuring- related expenses after the expected benefit from a facility sale. We expect our new product sales and our ongoing cost-reduction initiatives to more than offset these restructuring expenses as well as the expected volume declines in certain markets."
Conference Call on the Web
A live Internet broadcast of Stoneridge's conference call regarding 2008 first-quarter results can be accessed at 11 a.m. Eastern time on Friday May 2, 2008, 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 automotive, medium- and heavy-duty truck, agricultural and off-highway vehicle markets. Net sales in 2007 were approximately $727.0 million. 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 automotive, medium- and heavy-duty truck or agricultural and off-highway vehicle production; 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2008 2007
Net Sales $203,070 $185,028
Costs and Expenses:
Cost of goods sold 151,253 142,181
Selling, general and administrative 36,282 33,097
Restructuring charges 1,422 41
Operating Income 14,113 9,709
Interest expense, net 5,372 5,484
Equity in earnings of investees (3,819) (2,120)
Loss on early extinguishment of debt 499 -
Other loss, net 402 288
Income Before Income Taxes 11,659 6,057
Provision for income taxes 5,112 1,187
Net Income $6,547 $4,870
Basic net income per share $0.28 $0.21
Basic weighted average shares
outstanding 23,286 22,990
Diluted net income per share $0.28 $0.21
Diluted weighted average shares
outstanding 23,647 23,403
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2008 2007
ASSETS (Unaudited) (Audited)
Current Assets:
Cash and cash equivalents $88,273 $95,924
Accounts receivable, less reserves of
$5,495 and $4,736, respectively 136,983122,288
Inventories, net 66,591 57,392
Prepaid expenses and other 19,662 15,926
Deferred income taxes 10,188 9,829
Total current assets 321,697 301,359
Long-Term Assets:
Property, plant and equipment, net 91,853 92,752
Other Assets:
Goodwill 65,720 65,176
Investments and other, net 43,173 39,454
Deferred income taxes 24,618 29,028
Total long-term assets 225,364 226,410
Total Assets $547,061 $527,769
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $76,581 $69,373
Accrued expenses and other 58,023 47,198
Total current liabilities 134,604 116,571
Long-Term Liabilities:
Long-term debt 189,000 200,000
Deferred income taxes 2,951 2,665
Other liabilities 2,363 2,344
Total long-term liabilities 194,314 205,009
Shareholders' Equity:
Preferred Shares, without par value,
authorized 5,000 shares, none issued - -
Common Shares, without par value,
authorized 60,000 shares, issued
24,687 and 24,601 shares and outstanding
24,668 and 24,209 shares, respectively,
with no stated value - -
Additional paid-in capital 154,898 154,173
Common Shares held in treasury,
19 and 373 shares, respectively,
at cost (9) (383)
Retained earnings 44,919 38,372
Accumulated other comprehensive income 18,335 14,027
Total shareholders' equity 218,143 206,189
Total Liabilities and Shareholders' Equity $547,061 $527,769
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
March 31,
2008 2007
OPERATING ACTIVITIES:
Net cash provided by (used for)
operating activities 8,623 (5,056)
INVESTING ACTIVITIES:
Capital expenditures (5,513) (6,807)
Proceeds from sale of property, plant
and equipment 36 35
Business acquisitions and other (1,061) -
Net cash used for investing activities (6,538) (6,772)
FINANCING ACTIVITIES:
Repayments of long-term debt (11,000) -
Share-based compensation activity, net 42 355
Premiums related to early
extinguishment of debt (358) -
Net cash (used for) provided by
financing activities (11,316) 355
Effect of exchange rate changes on
cash and cash equivalents 1,580 (142)
Net change in cash and cash equivalents (7,651) (11,615)
Cash and cash equivalents at
beginning of period 95,924 65,882
Cash and cash equivalents at end of period $88,273 $54,267
Stoneridge, Inc.