Stoneridge Reports 21.9% Fourth Quarter Earnings Increase
29 January 1999
Stoneridge Reports 21.9% Fourth Quarter Earnings Increase
WARREN, Ohio, Jan. 29 -- Stoneridge, Inc. today
announced sales of $132.6 million and earnings of $8.0 million or $0.36 per
share for the fourth quarter ended December 31, 1998, and record sales and
earnings per share for fiscal 1998 of $504 million and $1.49 per share,
respectively. The results do not include operating results of Hi-Stat
Manufacturing Company, Inc., which, as previously announced, was acquired
effective at the close of business on December 31, 1998.
Sales of electrical and electronic components, modules and systems, our
core business, increased $6.2 million, or 6.2 percent, to $106.4 million for
the fourth quarter of 1998, compared with $100.2 million in the fourth quarter
of 1997. In line with the Company's expectations, contract manufacturing
sales continued to decline. Contract manufacturing sales decreased $0.3
million to $26.2 million or 19.8 percent of the Company's total sales for the
fourth quarter of 1998, compared with 20.9 percent of total sales in the
fourth quarter of 1997.
Net income for the fourth quarter ended December 31, 1998, was $8.0
million, an increase of 21.9 percent compared with pro forma net income of
$6.6 million for the quarter ended December 31, 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 $0.36 in the fourth quarter of
1998 from $0.29 in the fourth quarter of 1997.
"Fourth quarter revenue and earnings increases were largely the result of
continued strong industry volumes in our major market sectors, successful new
product introductions and our employees' commitment to continuous
improvement," said Cloyd J. Abruzzo, president and chief executive officer.
"Our internal development efforts continue to result in growth of our core
business while we maintain a culture of aggressive internal cost management."
For the year ended December 31, 1998, net sales were $503.8 million, an
increase of 12.1 percent, compared with $449.5 million in the same period of
1997. Net income for the year ended December 31, 1998, was $33.4 million, an
increase of 12.5 percent compared with pro forma net income of $29.7 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 $1.49 in the year ended December 31, 1998,
from $1.36 in December 31, 1997. Pro forma net income for the year ended
December 31, 1997, included $1.0 million after income taxes, or $0.04 per
share, from the gain on the sale of fixed assets.
Abruzzo said, "In addition to our vehicle information management systems,
control devices, and power and signal distribution products, we now have the
sensor products with the Hi-Stat acquisition. This closes the loop on
Stoneridge's ability to offer complete, integrated electrical and electronic
solutions for the global transportation industry."
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.
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 Twelve Months Ended
December 31 December 31
(Unaudited) (Audited)
1998 1997 1998 1997
Net Sales $ 132,648 $ 126,800 $ 503,821 $ 449,506
Operating Income 14,208 12,142 57,091 52,366
Earnings Before Taxes 13,713 11,676 56,036 50,895(a)
Provision for Income Taxes 5,700 3,367 22,636 3,931
Net Income 8,013 8,309 33,400 46,964(a)
Pro Forma Net Income (b) 8,013 6,575 33,400 29,714(a)
Basic & Diluted Earnings
Per Share $0.36 N/M $1.49 N/M
Pro Forma Per Share Data
Basic & Diluted Earnings
Per Share $0.36 $0.29 $1.49 $1.36
Weighted Average Shares
Outstanding (Pro forma for
1997) 22,397 22,397 22,397 21,830
(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/M Not meaningful