WARREN, Ohio, Feb. 25 /PRNewswire-FirstCall/ -- Stoneridge, Inc. (NYSE:
SRI) today announced net sales of $158.0 million and a net loss of $108.4
million, or $(4.63) per diluted share, for the fourth quarter ended December
31, 2008. The loss for the quarter included an after-tax non-cash goodwill
expense and non-cash deferred tax asset valuation allowance of $108.1 million
or ($4.62) per share and $3.4 million or $(0.14) per share for after-tax
expenses associated with previously announced restructuring initiatives. As
indicated in the Company's press release of February 11, 2009 announcing a
delay in its earnings release for the fourth quarter of 2008 to allow time to
complete an asset impairment analysis, including goodwill, the effect of the
goodwill impairment charges and deferred tax asset valuation allowance ("other
non-recurring items") was not included in our previously affirmed guidance of
$0.40 to $0.46. Excluding the other non-recurring items, the Company would
have reported earnings of $0.45 per diluted share for 2008. The Company achieved income from continuing operations (excluding
restructuring and other non-recurring items) in 2008 of $22.8 million, or
$0.98 per share, compared with $17.6 million, or $0.75 per share, in 2007. The
Company aggressively pursued restructuring efforts starting in late 2007 and
during 2008 to adjust its cost structure and eliminate overhead centers to
enhance profitability in robust economic times and protect profitability when
market adversity occurs. The Company recorded after-tax restructuring expenses
of $12.3 million, or $0.53 per share in 2008, as a result of these
restructuring efforts. In accordance with SFAS 142 (Accounting for Goodwill
and Other Intangible Assets) and SFAS 109 (Accounting for Income Taxes), the
2008 results also include an after-tax non-cash goodwill impairment charge in
the Company's control device segment of $46.1 million, or $1.97 per share, and
a non-cash valuation allowance against deferred tax assets of $62.0 million or
$2.65 per share. The impact of the non-cash impairment charge and deferred tax
asset valuation allowance was driven by adverse equity market conditions that
caused a decrease in current market multiples and the Company's stock price as
of December 31, 2008. Net sales decreased $27.5 million, or 14.8 percent, to $158.0 million,
compared with $185.5 million for the fourth quarter of 2007. The decrease in
net sales was primarily caused by significantly reduced production volumes in
the North American passenger car/light truck market, lower production in the
European and North American commercial vehicle markets and the impact of
foreign currency translation. Foreign currency translation decreased fourth-
quarter net sales by approximately $15.0 million compared with the same period
in 2007. The sales decrease was partially offset by the strength in the North
American agricultural and off-road market. Net income excluding the restructuring initiatives and the after-tax non-
cash goodwill expense and non-cash valuation allowance for the fourth quarter
was $3.1 million, or $0.13 per diluted share, compared with net income
excluding restructuring charges of $7.3 million, or $0.31 per diluted share,
in the fourth quarter of 2007. The decrease in net income was due primarily
to the reduced sales volumes described above and the loss of overhead
recoveries because of lower production volumes which was the result of
restructuring inventories built in the first half of 2008. "While we are not satisfied with our reported operating results, given the
volatility of the markets globally, we responded well in adjusting to lower
volumes," said John C. Corey, president and chief executive officer. "In
addition, we completed the two significant restructuring initiatives announced
in late 2007. Beyond these, we further realigned our cost structure to the
most recent market conditions. Excluding restructuring costs and after-tax
non-cash goodwill expense and non-cash valuation allowance in the fourth
quarter, we earned $0.13 per share." Corey added, "We are in an extremely volatile time for the transportation
industry globally. In this environment, we will continue to adjust our cost
structure and target near-term revenue opportunities. Because of our efforts
to improve our liquidity, we have $92.7 million in cash available for
operating needs or other uses. While the year has not produced the results we
expected, I am proud of the work our team has done in 2008." For the year ended December 31, 2008, net sales were $752.7 million, an
increase of $25.6 million or 3.5 percent compared with $727.1 million for the
year ended December 31, 2007. The net loss for 2008 was $97.5 million, or
$(4.17) per diluted share, compared with net income of $16.7 million, or $0.71
of income per diluted share, in 2007. Earnings per share for 2008 include
$(5.15) per share for restructuring expenses, an after-tax non-cash goodwill
expense and non-cash deferred tax asset valuation allowance. For the year
ended December 31, 2008, the Company achieved income from continuing
operations (excluding restructuring and other non-recurring items) of $22.8
million compared with $17.6 million in 2007. Net cash provided by operating activities for the year was $42.5 million,
compared with net cash provided of $33.5 million for the prior year. The
increase of $9.0 million in cash provided by operating activities was
primarily due to lower accounts receivable balances in the current year.
Stoneridge has $92.7 million in cash at the end of 2008 available to support
operations as needed. The Company's $183.0 million 11.5% senior notes and
asset backed credit facility mature in May 2012 and November 2011,
respectively. The Company's asset-backed credit facility remains undrawn and
does not contain restrictive performance covenants. Use of Non-GAAP Financial Measures A reconciliation of the Company's non-GAAP financial measures to the
corresponding GAAP measures, and an explanation of the Company's use of non-
GAAP measures, is included in the exhibits to this press release. Outlook "The environment for 2009 will most likely be the most challenging the
Company has ever experienced," Corey said. "The same is true for the entire
industry given the interdependence of the supply chain to the OEMs. Although
we have positioned Stoneridge to weather the storm as we see it now, we have
decided not to provide specific earnings guidance at this time, due to the
uncertainty of market conditions. However, we expect that Stoneridge should
be both earnings and cash flow positive in 2009 based on our expected sales in
2009." Conference Call on the Web A live Internet broadcast of Stoneridge's conference call regarding 2008
fourth-quarter results can be accessed at 11 a.m. Eastern time on Wednesday,
February 25, 2009, 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. 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;
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
(in thousands, except per share data)
For the Three Months For the Fiscal Years
Ended December 31, Ended December 31,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited) (Audited)
Net Sales $157,965 $185,476 $752,698 $727,120
Costs and Expenses:
Cost of goods sold 128,194 137,352 586,411 559,397
Selling, general and
administrative 31,687 34,573 136,563 133,708
Gain on sale of property, plant
and equipment, net (529) (245) (571) (1,710)
Goodwill impairment charge 65,175 - 65,175 -
Restructuring charges 2,514 852 8,391 926
Operating Income (Loss) (69,076) 12,944 (43,271) 34,799
Interest expense, net 5,274 5,189 20,575 21,759
Equity in earnings of investees (2,284) (2,969) (13,490) (10,893)
Loss on early extinguishment of
debt - - 770 -
Other (income) loss, net (395) (76) (351) 709
Income (Loss) Before Income
Taxes (71,671) 10,800 (50,775) 23,224
Provision for income taxes 36,723 4,319 46,752 6,553
Net Income (Loss) $(108,394) $6,481 $(97,527) $16,671
Basic net income (loss) per
share $(4.63) $0.28 $(4.17) $0.72
Basic weighted average shares
outstanding 23,407 23,215 23,367 23,133
Diluted net income (loss) per
share $(4.63) $0.28 $(4.17) $0.71
Diluted weighted average shares
outstanding 23,407 23,524 23,367 23,548
STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
2008 2007
ASSETS Unaudited
Current Assets:
Cash and cash equivalents $92,692 $95,924
Accounts receivable, less reserves of
$4,204 and $4,736, respectively 96,535 122,288
Inventories, net 54,800 57,392
Prepaid expenses and other 9,069 15,926
Deferred income taxes 1,495 9,829
Total current assets 254,591 301,359
Long-Term Assets:
Property, plant and equipment, net 87,701 92,752
Other Assets:
Goodwill 493 65,176
Investments and other, net 39,652 39,454
Deferred income taxes - 29,028
Total long-term assets 127,846 226,410
Total Assets $382,437 $527,769
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $50,719 $69,373
Accrued expenses and other 43,485 47,198
Total current liabilities 94,204 116,571
Long-Term Liabilities:
Long-term debt 183,000 200,000
Deferred income taxes 7,002 2,665
Other liabilities 6,473 2,344
Total long-term liabilities 196,475 205,009
Shareholders' Equity:
Preferred Shares, without par value,
authorized 5,000 shares, none issued - -
Common Shares, without par value,
authorized 60,000 shares, issued
24,772 and 24,601 shares and outstanding
24,665 and 24,209 shares, respectively,
with no stated value - -
Additional paid-in capital 158,039 154,173
Common Shares held in treasury, 107
and 392 shares, respectively, at cost (129) (383)
Retained (deficit) earnings (59,155) 38,372
Accumulated other comprehensive income
(loss) (6,997) 14,027
Total shareholders' equity 91,758 206,189
Total Liabilities and Shareholders' Equity $382,437 $527,769
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Fiscal Years
Ended December 31,
2008 2007
(Unaudited) (Audited)
OPERATING ACTIVITIES:
Net cash provided by operating activities $42,456 $33,525
INVESTING ACTIVITIES:
Capital expenditures (24,573) (18,141)
Proceeds from sale of fixed assets 1,652 12,315
Business acquisitions and other (980) -
Net cash used for investing activities (23,901) (5,826)
FINANCING ACTIVITIES:
Repayments of long-term debt (17,000) -
Share-based compensation activity 1,322 2,119
Premiums related to early
extinguishment of debt (553) -
Other financing costs - (1,219)
Net cash provided by (used for)
financing activities (16,231) 900
Effect of exchange rate changes on
cash and cash equivalents (5,556) 1,443
Net change in cash and cash equivalents (3,232) 30,042
Cash and cash equivalents at
beginning of period 95,924 65,882
Cash and cash equivalents at end of period $92,692 $95,924
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
To supplement Stoneridge's condensed consolidated financial statements
presented on a basis in accordance with generally accepted accounting
principles (GAAP) in the United States, the Company's management also uses and
discloses certain non-GAAP financial measures. These non-GAAP financial
measures are not in accordance with, nor are they alternatives for, GAAP-based
financial measures. The Company includes these non-GAAP financial measures
because it believes they provide useful information with which to evaluate the
performance of the Company. The non-GAAP measures included in this press
release have been reconciled to the comparable GAAP measures within the
accompanying table, as required under Securities and Exchange Commission (SEC)
rules regarding the use of non-GAAP financial measures. They should not be
considered in isolation or as a substitute for analysis of the Company's
results as reported under GAAP.
A reconciliation of GAAP net loss and EPS to adjusted net income before
restructuring related expenses and other non-recurring costs and EPS is
presented below:
For the Three Months Ended
December 31,
2008 2007
Dollars EPS Dollars EPS
(Unaudited) (Unaudited)
Adjusted net income per share
before restructuring related
expenses and other non-
recurring items
Net income (loss) $(108,394) $(4.63) $6,481 $0.28
Total restructuring related
expenses, net of tax benefits 3,386 0.14 867 0.04
Goodwill impairment, net of
tax benefits 46,052 1.97 - -
Deferred tax asset valuation
allowance 62,006 2.65 - -
Adjusted net income before
restructuring related
expenses and other non-recurring
items $3,050 $0.13 $7,348 $0.31
Diluted weighted average shares
outstanding (1) 23,407 23,524
For the Fiscal Year Ended
December 31,
2008 2007
Dollars EPS Dollars EPS
(Unaudited) (Audited)
Adjusted net income per share
before restructuring related
expenses and other non-
recurring items
Net income (loss) $(97,527) $(4.17) $16,671 $0.71
Total restructuring related
expenses, net of tax benefits 12,286 0.53 915 0.04
Goodwill impairment, net of
tax benefits 46,052 1.97 - -
Deferred tax asset valuation
allowance 62,006 2.65 - -
Adjusted net income before
restructuring related
expenses and other non-recurring
items $22,817 $0.98 $17,586 $0.75
Diluted weighted average shares
outstanding (1) 23,367 23,548
(1) - Basic and Diluted weighted average shares outstanding are the same
for 2008 periods as a net loss caused the dilutive shares to have an
anti-dilutive effect.
SOURCE Stoneridge, Inc. |
