Stoneridge Reports Fourth-Quarter and Full-Year 2006 Results
* Fourth-quarter Net Sales and Net Income Increase
* Full-year 2006 Net Income Increases to $0.63 per Diluted Share
* 2007 Net Income Expected to Be $0.45 to $0.55 per Diluted Share
WARREN, Ohio, Jan. 31 -- Stoneridge, Inc. today announced net sales of $171.2 million and net income of $1.5 million, or $0.06 per diluted share, for the fourth quarter ended December 31, 2006.
Net sales increased $19.5 million, or 12.8 percent, to $171.2 million, compared with $151.7 million for the fourth quarter of 2005. The improvement in sales was attributable to increased North American commercial vehicle production and new product introductions in Europe.
Net income for the fourth quarter was $1.5 million, or $0.06 per diluted share, compared with a net loss of $(3.0) million, or $(0.13) per diluted share, in the fourth quarter of 2005.
"Our 2006 results reflect our organizational excellence initiatives and our team's dedication to these goals. We were able to generate a significant improvement in results despite the headwinds of higher raw material prices and softness in the North American light vehicle market," said John C. Corey, president and chief executive officer. "While our cash flow from operations and earnings-per-share improvement represent progress toward our long-term goals, we remain focused on building upon this momentum in 2007 and beyond."
For the year ended December 31, 2006, net sales were $708.7 million, an increase of $37.1 million compared with $671.6 million for the year ended December 31, 2005. The improvement in net sales is predominantly attributable to increased North American commercial vehicle sales and new product launches in Europe. These factors were mitigated by lower North American light vehicle demand and product price reductions. Net income for 2006 was $14.5 million, or $0.63 per diluted share, compared with net income of $0.9 million, or $0.04 per diluted share, in 2005.
Net cash provided by operating activities for the year ended December 31, 2006 was $46.5 million, compared with $19.1 million for the year ended December 31, 2005. The increase in cash provided by operating activities was primarily due to increased net income and lower working capital requirements.
Outlook
"Our current expectation is for full-year 2007 earnings to decline slightly from our 2006 results. This anticipated decline is predominantly due to the expected softness in North American commercial vehicle production as a result of new 2007 emissions standards," Corey said. "We expect our new product launches to offer some offset to these declines, and our ongoing cost- reduction initiatives to partially offset the expected volume decrease."
Based on the current industry outlook, the Company anticipates full-year 2007 net income to be in the range of $0.45 to $0.55 per diluted share.
Conference Call on the Web
A live Internet broadcast of Stoneridge's conference call regarding 2006 fourth-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, January 31, 2007, at http://www.stoneridge.com/, which will also offer a webcast replay.
About Stoneridge, Inc.
Stoneridge, Inc., headquartered in Warren, Ohio, is a leading 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; 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)
(unaudited)
For the Three Months For the Fiscal Years
Ended December 31, Ended December 31,
2006 2005 2006 2005
Net Sales $171,215 $151,735 $708,699 $671,584
Costs and Expenses:
Cost of goods sold 135,174 121,758 549,793 522,996
Selling, general and
administrative 32,956 27,892 124,302 116,836
Provision for doubtful
accounts, net (308) 107 236 3,711
(Gain) loss on sale of
property, plant and
equipment, net 151 (16) (1,303) (360)
Restructuring charges 454 135 608 5,098
Operating Income (Loss) 2,788 1,859 35,063 23,303
Interest expense, net 4,282 5,899 21,744 23,872
Equity in earnings of
investees (2,321) (849) (7,125) (4,052)
Other (income) loss, net (892) (53) 805 (953)
Income (Loss) Before Income Taxes 1,719 (3,138) 19,639 4,436
Provision (benefit) for
income taxes 269 (180) 5,126 3,503
Net Income (Loss) $1,450 $(2,958) $14,513 $933
Basic net income (loss) per share $0.06 $(0.13) $0.63 $0.04
Basic weighted average shares
outstanding 22,930 22,733 22,866 22,709
Diluted net income (loss) per
share $0.06 $(0.13) $0.63 $0.04
Diluted weighted average shares
outstanding 23,248 22,792 23,161 22,775
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
2006 2005
ASSETS
Current Assets:
Cash and cash equivalents $65,882 $40,784
Accounts receivable, less allowances
for doubtful accounts of $3,831 and
$3,829, respectively 106,985 100,362
Inventories, net 58,521 53,791
Prepaid expenses and other 13,448 14,490
Deferred income taxes 9,196 9,253
Total current assets 254,032 218,680
Long-Term Assets:
Property, Plant and Equipment, net 114,586 113,478
Other Assets:
Goodwill 65,176 65,176
Investments and other, net 30,875 26,491
Deferred income taxes 37,138 39,213
Total long-term assets 247,775 244,358
Total Assets $501,807 $463,038
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $- $44
Accounts payable 72,493 55,344
Accrued expenses and other 45,624 46,603
Total current liabilities 118,117 101,991
Long-Term Liabilities:
Long-term debt, net of current
portion 200,000 200,000
Deferred income taxes 1,923 923
Other liabilities 3,145 6,133
Total long-term liabilities 205,068 207,056
Shareholders' Equity:
Preferred Shares, without par value,
5,000 authorized, none issued - -
Common Shares, without par value,
authorized 60,000 shares, issued
23,990 and 23,232 shares and
outstanding 23,804 and 23,178 shares,
respectively, with no stated value - -
Additional paid-in capital 150,078 147,440
Common Shares held in treasury, 186
and 54 shares, respectively, at cost (151) (65)
Retained earnings 21,721 7,188
Accumulated other comprehensive
income (loss) 6,974 (572)
Total shareholders' equity 178,622 153,991
Total Liabilities and Shareholders'
Equity $501,807 $463,038
STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Fiscal Years
Ended December 31,
2006 2005
OPERATING ACTIVITIES:
Net cash provided by operating
activities $46,540 $19,061
INVESTING ACTIVITIES:
Capital expenditures (25,895) (28,934)
Proceeds from sale of fixed assets 2,266 1,664
Proceeds from sale of partnership
interest 1,153 -
Business acquisitions and other (2,133) (282)
Net cash provided (used) by investing
activities (24,609) (27,552)
FINANCING ACTIVITIES:
Repayments of long-term debt (44) (118)
Share-based compensation activity 301 1
Other financing costs (150) (241)
Net cash used by financing activities 107 (358)
Effect of exchange rate changes on
cash and cash equivalents 3,060 (2,699)
Net change in cash and cash
equivalents 25,098 (11,548)
Cash and cash equivalents at
beginning of period 40,784 52,332
Cash and cash equivalents at end of
period $65,882 $40,784