Attached files
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| 8-K - 8-K - STONERIDGE INC | v302540_8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
STONERIDGE REPORTS FOURTH-QUARTER 2011 RESULTS
– Annual Sales Reach New Record Level in 2011 –
– PST Transaction Positively Affects Results –
– 2012 Sales Guidance of $1.060 Billion to $1.120 Billion with 2012 EPS Guidance of $1.10 to $1.30 per Share –
WARREN, Ohio – February 13, 2012 – Stoneridge, Inc. (NYSE: SRI) today announced financial results for the fourth quarter ended December 31, 2011.
Fourth-quarter 2011 net sales were $186.0 million, an increase of $25.5 million, or 15.9%, compared with $160.5 million for the fourth quarter of 2010. The increase in net sales was primarily due to higher volume in the commercial vehicle market in North America.
Net income for the fourth quarter of 2011 was $38.6 million, or $1.56 per diluted share, an increase of $34.0 million, or $1.37 per diluted share, compared with net income of $4.5 million, or $.19 per diluted share, in the fourth quarter of 2010. The increase was primarily due to a $65.4 million pretax gain and a $42.5 million after-tax gain or $1.72 per share recognized in conjunction with Stoneridge’s previously announced purchase of additional ownership in its Brazil-based PST joint venture. Offsetting the positive impact of volume gains and the PST transaction during the quarter were certain costs associated with the PST transaction, other legacy projects and previous restructuring programs which totaled $9.1 million on a pretax basis or $.27 per share as well as other cost items associated with operations which totaled $5.5 million or $.21 per share. (see attached table of “Fourth Quarter Items affecting Net Income and EPS”)
For the year ended December 31, 2011, the Company reported net sales of $765.4 million, compared with $635.2 million for the same period in 2010, an increase of $130.2 million, or 20.5%. Net income for 2011 was $49.4 million or $2.00 per diluted share and increased $37.8 million to $49.4 million, or $1.53 per diluted share, compared with $11.5 million, or $.47 per diluted share, for the year ended December 31, 2010.
As of December 31, 2011, Stoneridge’s consolidated cash position was $78.8 million, an increase of $6.8 million from December 31, 2010, primarily due to cash borrowed and held to complete the final portion of the PST transaction.
Outlook
“We experienced a difficult year in 2011 due to operational underperformance in our wiring business. However, we have addressed the operating issues and have improved service levels and labor efficiency significantly. Our new business wins and growth in end markets drove a record sales year for Stoneridge,” said John C. Corey, president and chief executive officer.
“Our results for the fourth quarter, excluding the gain recognized by the PST transaction, did not meet our expectations due to costs related to legacy issues from previous restructurings, PST transaction costs and cost items associated with valuation of assets. While these costs negatively impacted the fourth quarter results, the improvements we have made in our operations will benefit us in 2012,” Corey said.
Corey added, “We look forward to 2012 with cautious optimism. We expect to return to a more normal range for gross margin based on a weaker Mexican peso, lower copper prices and operational improvements. Though there are risks associated with our plan in 2012, especially in the European commercial vehicle market and other economic uncertainties, we believe sales from our existing business along with sales from the PST consolidation will be in the range of $1.060 billion to $1.120 billion with an EPS in the range of $1.10 per diluted share to $1.30 per diluted share.”
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2011 fourth-quarter results can be accessed at 11 a.m. Eastern time on Monday, February 13, 2012, 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 commercial vehicle, 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 commercial vehicle, 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.
For more information, contact:
Kenneth A. Kure, Corporate Treasurer and Director of Finance
330/856-2443
(Tables attached)
| - 2 - |
Fourth Quarter 2011 Items affecting Net Income and EPS :
| (In Millions of Dollars) | Expense/(Income) | |||||||||||||||||||||||||||
| COGS | SGA | Other | NC Interest | Tax | Net Income | EPS Impacts | ||||||||||||||||||||||
| Legacy or Previous Restructuring Activity Related: | ||||||||||||||||||||||||||||
| BCS non-cash Goodwill Impairment, net of elimination of earnout | - | 4.5 | - | (2.4 | ) | - | 2.1 | $ | (0.08 | ) | ||||||||||||||||||
| Contractual and Environmental Related (SPL Lease/Sarasota Remediation) | - | 1.1 | - | - | - | 1.1 | $ | (0.05 | ) | |||||||||||||||||||
| ERP Cost Write Down | - | 0.8 | - | - | - | 0.8 | $ | (0.03 | ) | |||||||||||||||||||
| Subtotal | - | 6.4 | - | (2.4 | ) | - | 4.0 | $ | (0.16 | ) | ||||||||||||||||||
| PST Transaction Related: | ||||||||||||||||||||||||||||
| Non-Cash Gain on PST Transaction | - | - | (65.4 | ) | - | 22.9 | (42.5 | ) | $ | 1.72 | ||||||||||||||||||
| Long Term Incentive Compensation | - | 2.4 | - | - | - | 2.4 | $ | (0.10 | ) | |||||||||||||||||||
| PST Transaction Fees | - | 0.3 | - | - | - | 0.3 | $ | (0.01 | ) | |||||||||||||||||||
| Subtotal | - | 2.7 | (65.4 | ) | - | 22.9 | (39.8 | ) | $ | 1.61 | ||||||||||||||||||
| Subtotal Legacy/Restructuring/PST Transaction | - | 9.1 | (65.4 | ) | (2.4 | ) | 22.9 | (35.8 | ) | $ | 1.45 | |||||||||||||||||
| Other Items affecting Net Income and EPS : | ||||||||||||||||||||||||||||
| Annual Physical Inventory Adjustments/Excess Scrap | 1.6 | - | - | (0.4 | ) | - | 1.2 | $ | (0.05 | ) | ||||||||||||||||||
| Increased Maintenance/Repair Expense | 0.9 | - | - | - | - | 0.9 | $ | (0.04 | ) | |||||||||||||||||||
| Unfavorable Overhead/Direct Labor Cost from Inventory reduction | 0.8 | - | - | - | - | 0.8 | $ | (0.03 | ) | |||||||||||||||||||
| Unfavorable Purchase Price Variance of Materials | 1.1 | - | - | - | - | 1.1 | $ | (0.05 | ) | |||||||||||||||||||
| Increased Warranty Expense | 1.1 | - | - | - | - | 1.1 | $ | (0.04 | ) | |||||||||||||||||||
| Total Other Items affecting Net Income: | 5.5 | - | - | (0.04 | ) | - | 5.1 | $ | (0.21 | ) | ||||||||||||||||||
| Total Fourth Quarter 2011 Items affecting Net Income and EPS | 5.5 | 9.1 | (65.4 | ) | (2.8 | ) | 22.9 | (30.7 | ) | $ | 1.24 | |||||||||||||||||
| - 3 - |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended | For the years ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (in thousands, except per share data) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
| As adjusted | As adjusted | |||||||||||||||
| Net Sales | $ | 186,048 | $ | 160,454 | $ | 765,373 | $ | 635,226 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 153,730 | 124,691 | 618,596 | 489,670 | ||||||||||||
| Selling, general and administrative | 34,957 | 30,006 | 128,306 | 122,032 | ||||||||||||
| Goodwill impairment charge | 4,945 | - | 4,945 | - | ||||||||||||
| Operating income (loss) | (7,584 | ) | 5,757 | 13,526 | 23,524 | |||||||||||
| Interest expense, net | 4,432 | 4,824 | 17,234 | 21,780 | ||||||||||||
| Equity in earnings of investees | (4,957 | ) | (4,160 | ) | (10,034 | ) | (10,346 | ) | ||||||||
| Loss on early extinguishment of debt | - | 1,346 | - | 1,346 | ||||||||||||
| Gain on previously held equity interest | (65,372 | ) | - | (65,372 | ) | - | ||||||||||
| Other expense (income), net | 220 | (140 | ) | 56 | (1,280 | ) | ||||||||||
| Income before income taxes | 58,093 | 3,887 | 71,642 | 12,024 | ||||||||||||
| Provision (benefit) for income taxes | 22,727 | (539 | ) | 26,105 | 678 | |||||||||||
| Net income | 35,366 | 4,426 | 45,537 | 11,346 | ||||||||||||
| Net loss attributable to noncontrolling interest | (3,209 | ) | (105 | ) | (3,820 | ) | (184 | ) | ||||||||
| Net income attributable to Stoneridge, Inc. and | ||||||||||||||||
| subsidiaries | $ | 38,575 | $ | 4,531 | $ | 49,357 | $ | 11,530 | ||||||||
| Basic net income per share | $ | 1.58 | $ | 0.19 | $ | 2.04 | $ | 0.48 | ||||||||
| Basic weighted average shares outstanding | 24,380 | 23,967 | 24,181 | 23,946 | ||||||||||||
| Diluted net income per share | $ | 1.56 | $ | 0.19 | $ | 2.00 | $ | 0.47 | ||||||||
| Diluted weighted average shares outstanding | 24,760 | 24,350 | 24,645 | 24,333 | ||||||||||||
| - 4 - |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, | December 31, | |||||||
| (in thousands) | 2011 (A) | 2010 | ||||||
| As adjusted | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 78,836 | $ | 71,974 | ||||
| Accounts receivable, less reserves of $2,944 and $2,013, respectively | 162,590 | 102,600 | ||||||
| Inventories, net | 123,108 | 54,959 | ||||||
| Prepaid expenses and other current assets | 29,048 | 20,443 | ||||||
| Total current assets | 393,582 | 249,976 | ||||||
| Long-term assets: | ||||||||
| Property, plant and equipment, net | 125,006 | 76,576 | ||||||
| Investments and other long-term assets, net | 179,289 | 60,184 | ||||||
| Total long-term assets | 304,295 | 136,760 | ||||||
| Total assets | $ | 697,877 | $ | 386,736 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 83,633 | $ | 1,689 | ||||
| Accounts payable | 114,012 | 68,341 | ||||||
| Accrued expenses and other current liabilities | 63,961 | 42,753 | ||||||
| Total current liabilities | 261,606 | 112,783 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 181,611 | 167,903 | ||||||
| Deferred income taxes | 68,683 | 8,303 | ||||||
| Other long-term liabilities | 5,708 | 6,528 | ||||||
| Total long-term liabilities | 256,002 | 182,734 | ||||||
| Shareholders' equity: | ||||||||
| Preferred Shares, without par value, authorized 5,000 shares, none issued | - | - | ||||||
| Common Shares, without par value, authorized 60,000 shares, issued 27,097 and 25,994 | ||||||||
| shares and outstanding 26,222 and 25,393 shares, respectively, with no stated value | - | - | ||||||
| Additional paid-in capital | 170,633 | 161,587 | ||||||
| Common Shares held in treasury, 875 and 601 shares, respectively, at cost | (1,870 | ) | (1,118 | ) | ||||
| Accumulated deficit | (28,263 | ) | (77,620 | ) | ||||
| Accumulated other comprehensive income (loss) | (9,843 | ) | 4,062 | |||||
| Total Stoneridge Inc. and subsidiaries shareholders’ equity | 130,657 | 86,911 | ||||||
| Noncontrolling interest | 49,612 | 4,308 | ||||||
| Total shareholders' equity | 180,269 | 91,219 | ||||||
| Total liabilities and shareholders' equity | $ | 697,877 | $ | 386,736 | ||||
(A) Subject to modification for final purchase accounting entries in connection with the acquisition of additional interest in PST.
| - 5 - |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Years ended December 31 (in thousands) | 2011 | 2010 | ||||||
| As adjusted | ||||||||
| OPERATING ACTIVITIES: | ||||||||
| Net cash provided by operating activities | $ | 921 | $ | 13,851 | ||||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (26,290 | ) | (18,574 | ) | ||||
| Proceeds from sale of fixed assets | 3,863 | 56 | ||||||
| Capital contribution from noncontrolling interests | 397 | - | ||||||
| Business acquisitions and other | (7,753 | ) | - | |||||
| Net cash used for investing activities | (29,783 | ) | (18,518 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Extinguishment of senior notes | - | (183,000 | ) | |||||
| Proceeds from issuance of senior secured notes | - | 170,625 | ||||||
| Proceeds from issuance of other debt | 1,408 | 690 | ||||||
| Repayments of other debt | (968 | ) | (278 | ) | ||||
| Revolving credit facility borrowings | 38,993 | 8,389 | ||||||
| Revolving credit facility payments | (554 | ) | (8,335 | ) | ||||
| Other financing costs | (605 | ) | (1,365 | ) | ||||
| Repurchase of shares to satisfy employee tax withholding | (752 | ) | (826 | ) | ||||
| Excess tax benefits from share-based compensation expense | - | 395 | ||||||
| Premiums related to early extinguishment of debt | - | (324 | ) | |||||
| Net cash provided by (used for) financing activities | 37,522 | (14,029 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1,798 | ) | (1,237 | ) | ||||
| Net decrease in cash and cash equivalents | 6,862 | (19,933 | ) | |||||
| Cash and cash equivalents at beginning of period | 71,974 | 91,907 | ||||||
| Cash and cash equivalents at end of period | $ | 78,836 | $ | 71,974 | ||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Change in fair value of interest rate swap | $ | 1,939 | $ | (3,017 | ) | |||
| - 6 - |