Stoneridge Reports Fourth-Quarter 2012 Results

                Stoneridge Reports Fourth-Quarter 2012 Results

PR Newswire

WARREN, Ohio, March 1, 2013

WARREN, Ohio, March 1, 2013 /PRNewswire/ --

  oStrong Cash Flow Drives Debt Reduction in 2012
  oContinued Operating Improvements in the Fourth Quarter
  oReaffirms 2013 Guidance of $0.75 - $0.95 per share

Stoneridge, Inc. (NYSE: SRI) today announced financial results for the fourth
quarter ended December 31, 2012.

Fourth-quarter 2012 net sales were $222.7 million, an increase of $36.7
million, or 19.7%, compared with $186.0 million for the fourth quarter of
2011. The increase in the current quarter's net sales was primarily due to the
consolidation of the operating results of PST, the Brazilian subsidiary of
which the Company acquired controlling interest on December 29, 2011.
Excluding PST in the fourth quarter of 2012, net sales were $178.3 million, a
decrease of $7.8 million, or 4.2%, from the same period a year ago, primarily
as a result of lower sales in the Company's Wiring business segment, including
lower sales to a large North American commercial vehicle customer, and lower
sales to European commercial vehicle customers in the Company's Electronics
business segment.

Net income for the fourth quarter of 2012 was $2.6 million, or $0.10 per
diluted share, compared with net income of $38.6 million, or $1.56 per diluted
share, in the fourth quarter of 2011. The decrease in net income was
primarily due to a $65.4 million pretax gain ($42.5 million after-tax gain) or
$1.72 per share recognized in conjunction with Stoneridge's purchase of
additional ownership in its Brazil-based PST joint venture on December 29,
2011.

For the year ended December 31, 2012, the Company reported net sales of $938.5
million, a 22.6% increase from $765.4 million for the same period in 2011.
The increase in the current year's net sales was primarily due to the
consolidation of the operating results of PST. Excluding the net sales of
PST in 2012, net sales were $758.1 million, a decrease of $7.3 million, or
1.0%, from a year ago, primarily as a result of lower sales in the Company's
Wiring business segment and lower sales to European commercial vehicle
customers in the Company's Electronics business segment.

Net income for the year was $5.4 million, or $0.20 per diluted share, down
from $49.4 million, or $2.00 per diluted share, for the prior year which
included the $1.72 per share gain recognized in conjunction with the PST
purchase.

"As we announced in our press release of February 7, we finished 2012 with
strong cash flow and we have exceeded our debt reduction targets. We finished
the year generating approximately $49.1 million in free cash flow (net cash
provided by operating activities less capital expenditures)," said John C.
Corey, President and Chief Executive Officer.

As of December 31, 2012, Stoneridge's consolidated cash position was $44.6
million, a decrease of $34.2 million from December 31, 2011. The change in the
cash balance was partially the result of the $19.8 million in cash used to
fund the final portion of the PST transaction, which was completed on January
5, 2012. The Company also reduced its debt by $65.7 million during 2012.
Stoneridge repaid $38.0 million of borrowing on its asset-based lending
facility, and the remaining $27.7 million was primarily due to PST's repayment
of indebtedness.

"While our cost-reduction and other initiatives continued to drive gross
margin and operating margin improvements in the fourth quarter compared with
the second and third quarters of 2012, our earnings performance in the fourth
quarter was below our expectations and due primarily to a slower recovery in
the Brazilian market than anticipated and lower than expected sales in our
European operations as European OEMs extended their holiday shutdown," Corey
noted. "We have adjusted our cost structures to reflect the market weakness
and expect to see continued financial improvement in 2013 and reaffirm our
full 2013 guidance as published on February 7, 2013," Corey added.

Wiring as a Separate Reporting Segment

In the fourth quarter of 2012, Stoneridge changed its reportable segments in
accordance with accounting guidelines, which will provide better visibility to
Stoneridge's four operating segments: Control Devices, Electronics, PST and
Wiring. The revised segment information constitutes a reclassification and
has no impact on reported net income or earnings per share for any period.
These changes do not restate information previously reported in the
Consolidated Balance Sheets, Consolidated Statements of Operations,
Consolidated Statements of Comprehensive Income, Consolidated Statements of
Shareholders' Equity or Consolidated Statements of Cash Flows for the Company
for any period.

Conference Call on the Web

A live Internet broadcast of Stoneridge's conference call regarding 2012
fourth-quarter results can be accessed at 11 a.m. Eastern time on Friday,
March 1, 2013, at www.stoneridge.com, which will also offer a webcast replay.

A Non-GAAP Financial Measure

This press release includes the financial measure free cash flow. This measure
is defined as a non-GAAP financial measure by the Securities and Exchange
Commission and may be different from non-GAAP financial measures used by other
companies. The presentation of this financial information is not intended to
be considered in isolation or as a substitute for the financial information
prepared and presented in accordance with generally accepted accounting
principles. The Company believes that free cash flow is helpful when presented
in conjunction with the net cash provided by operating activities, which was
$75.5 million for 2012. Free cash flow is defined as net cash provided by
operating activities less capital expenditures. Reconciliation for 2012: Net
cash provided by operating activities of $75.5 million less capital
expenditures of $26.4 million equals free cash flow of $49.1 million. Free
cash flow is considered a liquidity measure and provides useful information to
management and investors about the amount of cash generated after the capital
expenditures. A limitation of free cash flow is that it does not represent the
total increase or decrease in the cash balance for the period.

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, motorcycle 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 volume change in commercial vehicle, automotive
or agricultural, motorcycle 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.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
                           Three Months Ended        For the years ended
                           December 31,              December 31,
(in thousands, except per  2012         2011         2012         2011
share data)
Net sales                  $  222,725  $         $  938,513  $  765,373
                                        186,048
Costs and expenses:
Cost of goods sold         168,116      153,730      713,869      618,596
Selling, general and       45,961       34,957       195,915      128,306
administrative
Goodwill impairment        -            4,945        -            4,945
charge
Operating income (loss)    8,648        (7,584)      28,729       13,526
Interest expense, net      4,638        4,432        20,033       17,234
Equity in earnings of      (317)        (4,957)      (760)        (10,034)
investees
Gain on previously held    -            (65,372)     -            (65,372)
equity interest
Other expense, net         1,521        220          4,896        56
Income before income       2,806        58,093       4,560        71,642
taxes
Provision for income       95           22,727       812          26,105
taxes
Net income                 2,711        35,366       3,748        45,537
Net income (loss)
attributable to            90           (3,209)      (1,613)      (3,820)
noncontrolling interest
Net income attributable    $         $        $         $  
to Stoneridge, Inc.       2,621       38,575       5,361       49,357
Earnings per share
attributable to
Stoneridge, Inc.:
Basic                      $        $       $        $    
                           0.10         1.58       0.20        2.04
Diluted                    $        $       $        $    
                           0.10         1.56       0.20        2.00
Weighted average shares
outstanding:
Basic                      26,435       24,380       26,377       24,181
Diluted                    27,177       24,760       27,032       24,645



CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
As of December 31 (in thousands)       2012                2011
ASSETS
Current assets:
Cash and cash equivalents              $      44,555  $      
                                                           78,731
Accounts receivable, less reserves of  141,503             162,354
$3,394 and $1,485, respectively
Inventories, net                       96,032              120,482
Prepaid expenses and other current     28,964              27,897
assets
Total current assets                   311,054             389,464
Long-term assets:
Property, plant and equipment, net     119,147             124,944
Other assets
Intangible assets, net                 84,397              98,039
Goodwill                               66,381              71,855
Investments and other long-term        11,712              11,193
assets, net
Total long-term assets                 281,637             306,031
Total assets                           $    592,691    $      695,495
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of debt                $      18,925  $      
                                                           44,246
Revolving credit facilities            1,160               39,181
Accounts payable                       76,303              83,509
Accrued expenses and other current     57,081              90,994
liabilities
Total current liabilities              153,469             257,930
Long-term liabilities:
Long-term debt, net                    181,311             183,711
Deferred income taxes                  59,819              67,721
Other long-term liabilities            4,258               5,494
Total long-term liabilities            245,388             256,926
Shareholders' equity:
Preferred Shares, without par value,   -                   -
authorized 5,000 shares, none issued
Common Shares, without par value,
authorized 60,000 shares, issued
28,433 and 27,097
shares and outstanding 27,913 and
26,222 shares at December 31, 2012
and 2011,
respectively, with no stated value     -                   -
Additional paid-in capital             184,822             170,775
Common Shares held in treasury, 520
and 875 shares at December 31, 2012
and 2011,
respectively, at cost                 (1,885)             (1,870)
Accumulated deficit                    (22,902)            (28,263)
Accumulated other comprehensive loss   (10,282)            (9,615)
Total Stoneridge Inc. and              149,753             131,027
subsidiaries shareholders' equity
Noncontrolling interest                44,081              49,612
Total shareholders' equity             193,834             180,639
Total liabilities and shareholders'    $    592,691    $      695,495
equity



CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
                               Three months ended       For the Years Ended
                               December 31,             December 31,
Years ended December 31 (in   2012          2011       2012         2011
thousands)
Net income                   $        $      $       $    
                               2,711        35,366    3,748        45,537
Other comprehensive income
(loss), net of tax:
Foreign currency translation  (1,175)       (2,505)    (10,502)     (5,971)
adjustments
Pension liability             (27)          -          (27)         -
adjustments
Unrealized gain on marketable -             -          -            16
securities
Unrealized gain (loss) on     398           5,391      9,862        (7,722)
derivatives
Other comprehensive income    (804)         2,886      (667)        (13,677)
(loss)
Consolidated comprehensive    1,907         38,252     3,081        31,860
income
Comprehensive gain (loss)
attributable to noncontrolling 90            (3,209)    (1,613)      (3,820)
interest
Comprehensive income          $        $      $       $    
attributable to Stoneridge,    1,817        41,461    4,694        35,680
Inc.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
Years ended December 31 (in            2012                2011
thousands)
OPERATING ACTIVITIES:
Net cash provided by operating         $     75,545    $       
activities                                                 921
INVESTING ACTIVITIES:
Capital expenditures                   (26,352)            (26,290)
Proceeds from sale of fixed assets     521                 3,863
Capital contribution from              -                   397
noncontrolling interest
Business acquisitions, net of cash     (19,779)            (7,753)
acquired
Net cash used for investing            (45,610)            (29,783)
activities
FINANCING ACTIVITIES:
Proceeds from issuance of other debt   22,146              1,408
Repayments of other debt               (48,327)            (968)
Revolving credit facility borrowings   21,579              38,993
Revolving credit facility payments     (59,600)            (554)
Other financing costs                  -                   (605)
Repurchase of shares to satisfy        (1,273)             (752)
employee tax withholding
Net cash provided by (used for)        (65,475)            37,522
financing activities
Effect of exchange rate changes on     1,364               (1,903)
cash and cash equivalents
Net change in cash and cash            (34,176)            6,757
equivalents
Cash and cash equivalents at           78,731              71,974
beginning of period
Cash and cash equivalents at end of    $     44,555    $      78,731
period
Supplemental disclosure of non-cash
financing activities:
Change in fair value of interest rate  $      1,134  $       4,095
swap
Issuance of Common Shares for
acquisition of additional PST          $     10,197    $       5,113
interest



SOURCE Stoneridge, Inc.

Website: http://www.stoneridge.com
Contact: Kenneth A. Kure, Corporate Treasurer and Director of Finance,
+1-330-856-2443