Stoneridge Reports 7.5 Percent Q3 Earnings Increase
20 October 1998
Stoneridge Reports 7.5 Percent Third-Quarter Earnings Increase
WARREN, Ohio, Oct. 19 -_ Stoneridge, Inc. today
announced sales of $118.2 million and earnings of $7.2 million or $0.32 per
share for the third quarter ended September 30, 1998. As previously reported
on July 1, 1998, the ongoing General Motors work stoppage adversely impacted
earnings per share for the third quarter by approximately $0.02. The
strengths in the commercial vehicle markets partially offset the impact of the
GM work stoppage.
Sales, excluding the contract manufacturing business, increased
$16.2 million, or 19.2 percent, to $100.4 million compared with $84.2 million
in the third quarter of 1997. In line with the Company's expectations,
contract manufacturing sales continued to decline. Contract manufacturing
sales decreased $1.9 million to 15.1 percent of the Company's total sales for
the third quarter of 1998 compared with 19.0 percent of total sales in the
third quarter of 1997.
Net income for the third quarter ended September 30, 1998, was $7.2
million, an increase of 7.5 percent compared with pro forma net income of $6.7
million for the quarter ended September 30, 1997. The 1997 pro forma net
income was adjusted for the Company's conversion from an S Corporation to a C
Corporation using an effective tax rate of approximately 40 percent. On a pro
forma basis, reflecting shares issued in the initial public offering, basic
and diluted earnings per share increased to $0.32 in the third quarter of 1998
from $0.31 in the third quarter of 1997.
"The growth in earnings for 1998's third quarter was driven by
Stoneridge's increased content per vehicle resulting from our new product
launches in power distribution and instrumentation and information display
products," said Cloyd Abruzzo, president and chief executive officer.
For the nine months ended September 30, 1998, net sales were $371.2
million, an increase of 15.0 percent, compared with $322.7 million in the same
period of 1997. Net income for the nine months ended September 30, 1998, was
$25.4 million, an increase of 6.5 percent compared with pro forma net income
of $23.8 million for the same period in 1997. The 1997 pro forma net income
was adjusted for the Company's conversion from an S Corporation to a C
Corporation using an effective tax rate of approximately 40 percent. On a pro
forma basis, reflecting shares issued in the initial public offering, basic
and diluted earnings per share increased to $1.13 in the first nine months of
1998 from $1.10 in the first nine months of 1997. Pro forma net income for
the nine months ended September 30, 1997, included $1.0 million after income
taxes, or $0.04 per share, from the gain on the sale of fixed assets.
Stoneridge, Inc., headquartered in Warren, Ohio, is a leading independent
designer and manufacturer of engineered electrical and electronic components,
modules and systems principally for the automotive, medium and heavy-duty
truck and agricultural vehicle markets. Stoneridge completed its initial
public offering and its Common Shares began trading on the New York Stock
Exchange on October 10, 1997. Sales in 1997 were $450 million.
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. Factors which 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 decline in automotive, medium and heavy-duty truck
or agricultural vehicle production, the failure to achieve successful
integration of any acquired company or business, labor disputes involving the
Company or its significant customers, risks associated with conducting
business in foreign countries, or a decline in general economic conditions.
Further information concerning issues that could materially affect financial
performance related to forward-looking statements contained in this release
can be found in Stoneridge's periodic filings with the Securities and Exchange
Commission.
Stoneridge, Inc.
Consolidated Operating Results
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30
(Unaudited) (Unaudited)
1998 1997 1998 1997
Net Sales $118,194 $103,919 $371,173 $322,706
Operating Income 12,164 12,259 42,883 40,224
Earnings Before Taxes 12,144 11,384 42,323 39,219(a)
Provision for Income Taxes 4,932 239 16,936 564
Net Income 7,212 11,145 25,387 38,655(a)
Pro Forma Net Income (b) 7,212 6,717 25,387 23,850(a)
Basic & Diluted Earnings
Per Share $0.32 N/R $1.13 N/R
Pro Forma Per Share Data
Basic & Diluted Earnings
Per Share $0.32 $0.31 $1.13 $1.10
Weighted Average Shares
Outstanding (Pro forma
for 1997) 22,397 21,640 22,397 21,640
(a)-includes a one-time pre-tax gain of $1,733 on sale of fixed asset
(b)-assumes approximately 40% effective tax rate as a C Corporation on
income prior to October 10, 1997, and no adjustment of interest
expense for Offering proceeds
N/R - Not Reported
Condensed Balance Sheet Items
(In thousands)
(Unaudited)
September 30
1998 1997
Current Assets $138,240 $98,978
Property, Plant and Equipment 54,960 54,809
Total Assets 263,007 194,760
Current Liabilities 69,768 54,596
Noncurrent Portion of Term Debt 5,949 36,642
Total Liabilities 80,159 91,238
Shareholders' Equity 182,848 103,522