For the quarterly period ended March 31, 2003

Commission file number 001-13337

STONERIDGE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Ohio

34-1598949

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

9400 East Market Street, Warren, Ohio

44484

(Address of Principal Executive Offices)

(Zip Code)

(330) 856-2443

Registrant’s Telephone Number, Including Area Code

Yes   x

No   o

Yes   x

No   o

Page No.

Part I  Financial Information

Item 1.  Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002

2

Condensed Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002

3

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002

4

Notes to Condensed Consolidated Financial Statements

5

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

17

Item 4.  Controls and Procedures

17

Part II  Other Information

18

Signatures

19

Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

20

Exhibit Index

22

March 31,
2003

December 31,
2002

(Unaudited)

(Audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

22,172

$

27,235

Accounts receivable, net

93,487

79,342

Inventories, net

46,905

51,139

Prepaid expenses and other

9,528

12,055

Deferred income taxes

6,391

5,904

Total current assets

178,483

175,675

PROPERTY, PLANT AND EQUIPMENT, net

109,826

111,838

OTHER ASSETS:

Goodwill

255,292

255,292

Investments and other, net

28,993

28,322

TOTAL ASSETS

$

572,594

$

571,127

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Current portion of long-term debt

$

2,018

$

1,992

Accounts payable

49,920

43,151

Accrued expenses and other

52,701

45,070

Total current liabilities

104,639

90,213

LONG-TERM LIABILITIES:

Long-term debt, net of current portion

228,274

248,918

Deferred income taxes

16,771

15,278

Other liabilities

790

816

Total long-term liabilities

245,835

265,012

SHAREHOLDERS’ EQUITY:

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

—  

—  

Common shares, without par value, 60,000 authorized, 22,402 and 22,399 issued and outstanding at March 31, 2003 and December 31, 2002, respectively, with no stated value

—  

—  

Additional paid-in capital

141,540

141,516

Retained earnings

84,384

77,379

Accumulated other comprehensive loss

(3,804

)

(2,993

)

Total shareholders’ equity

222,120

215,902

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

572,594

$

571,127

For the three months ended
March 31,

2003

2002

NET SALES

$

159,559

$

157,744

COSTS AND EXPENSES:

Cost of goods sold

118,634

118,462

Selling, general and administrative expenses

23,276

21,638

OPERATING INCOME

17,649

17,644

Interest expense, net

7,161

8,622

Other (income) expense, net

(175

)

100

INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE

10,663

8,922

Provision for income taxes

3,658

3,345

INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE

7,005

5,577

Cumulative effect of accounting change, net of tax

—  

(69,834

)

NET INCOME (LOSS)

$

7,005

$

(64,257

)

BASIC NET INCOME (LOSS) PER SHARE:

Income before cumulative effect of accounting change, net of tax

$

0.31

$

0.25

Cumulative effect of accounting change, net of tax

—  

(3.12

)

Basic net income (loss) per share

$

0.31

$

(2.87

)

WEIGHTED AVERAGE SHARES OUTSTANDING

22,402

22,399

DILUTED NET INCOME (LOSS) PER SHARE:

Income before cumulative effect of accounting change, net of tax

$

0.31

$

0.25

Cumulative effect of accounting change, net of tax

—  

(3.11

)

Diluted net income (loss) per share

$

0.31

$

(2.86

)

WEIGHTED AVERAGE SHARES OUTSTANDING

22,600

22,486

For the three months ended
March 31,

2003

2002

OPERATING ACTIVITIES:

Net income (loss)

$

7,005

$

(64,257

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities-

Depreciation and amortization

5,857

5,709

Deferred income taxes

1,104

1,693

Equity in (earnings) loss of unconsolidated subsidiaries

(261

)

11

Loss on sale of fixed assets

38

—  

Cumulative effect of accounting change, net of tax

—  

69,834

Changes in operating assets and liabilities-

Accounts receivable, net

(13,975

)

(13,835

)

Inventories

4,388

1,848

Prepaid expenses and other

534

3,542

Other assets, net

(792

)

(1,505

)

Accounts payable

6,662

3,917

Accrued expenses and other

9,462

7,238

Net cash provided by operating activities

20,022

14,195

INVESTING ACTIVITIES:

Capital expenditures

(4,357

)

(4,249

)

Proceeds from sale of fixed assets

182

—  

Other, net

(2

)

2

Net cash used for investing activities

(4,177

)

(4,247

)

FINANCING ACTIVITIES:

Repayments of long-term debt

(20,992

)

(8,514

)

Net borrowings (repayments) under revolving credit facilities

26

(887

)

Net cash used for financing activities

(20,966

)

(9,401

)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

58

(80

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

(5,063

)

467

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

27,235

4,369

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

22,172

$

4,836

1.

The accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”).  The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Commission’s rules and regulations.  Although the Company believes that the disclosures are adequate to make the information presented not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Company’s 2002 Annual Report to Shareholders.

The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results to be expected for the full year.

2.

Inventories are value