Stoneridge (SRI) Tops Q3 EPS by 33c, Revenues Beat; Offers FY20 EPS/Revenue Guidance Above Consensus

Stoneridge (NYSE: SRI) reported Q3 EPS of $0.18, $0.33 better than the analyst estimate of ($0.15). Revenue for the quarter came in at $175.8 million versus the consensus estimate of $154.9 million.

2020 Third-Quarter Results

• Earnings per diluted share ("EPS") of $0.25
• Adjusted EPS of $0.18
• Sales of $175.8 million
• Gross profit of $46.0 million
• Adjusted gross profit of $46.7 million (26.5% of sales)
• Operating income of $9.8 million
• Adjusted operating income of $8.2 million (4.7% of sales)
• Adjusted EBITDA of $16.9 million (9.6% of sales)
• Incremental adjusted operating margin on incremental revenue ("adjusted contribution margin") of 35.8% vs. Q2

GUIDANCE:

Stoneridge sees Q4 2020 EPS of ($0.05)-$0.05, versus the consensus of $0.02. Stoneridge sees Q4 2020 revenue of $165-175 million, versus the consensus of $166.75 million.

Stoneridge sees FY2020 EPS of ($0.22)-($0.12), versus the consensus of ($0.49). Stoneridge sees FY2020 revenue of $624-634 million, versus the consensus of $602.11 million.

2020 Fourth-Quarter Guidance

• Sales of $165 - $175 million (2020 sales of $624 - $634 million)
• Adjusted gross margin of 25.5% - 26.0% (2020 adjusted gross margin of 23.75% - 24.25%)
• Adjusted operating margin of 0.0% - 2.0% (2020 adjusted operating margin of (1.0%) - 0.0%)
• Adjusted EBITDA margin of 5.5% - 7.5% (2020 adjusted EBITDA margin of 4.5% - 5.5%)
• Q4 tax expense expected to be approximately $1.25 million
• Adjusted EPS of ($0.05) - $0.05 (2020 adjusted EPS of ($0.22) - ($0.12))

2021 Outlook

• Sales of at least $715 million (20%+ growth adjusted for discontinued soot sensor product lines) based on current market outlook

Stoneridge, Inc. (NYSE: SRI) today announced financial results for the third quarter ended September 30, 2020, with sales of $175.8 million and earnings per diluted share of $0.25. Adjusted EPS was $0.18 for the third quarter, considering normalizing adjustments as outlined in the exhibits attached hereto.

For the third quarter of 2020, Stoneridge reported gross profit of $46.0 million and adjusted gross profit of $46.7 million (26.5% of sales), which was an increase of adjusted gross margin of 12.1% relative to the second quarter of 2020. Operating income was $9.8 million and adjusted operating income was $8.2 million (4.7% of sales). Adjusted EBITDA was $16.9 million (9.6% of sales).

Jon DeGaynor, president and chief executive officer, commented, "In the third quarter, we experienced top-line growth that exceeded our previously outlined expectations due to strong recovery across our global end markets. We took advantage of the incremental revenue with improved gross and operating margins, resulting in an adjusted contribution margin of 35.8% relative to the second quarter, again exceeding our previously outlined expectations."

DeGaynor continued, "In the third quarter, we took several steps forward in our continued commercialization of MirrorEye®. Through our partnership with Daimler Trucks North America ("DTNA"), the pre-wire option became available at the end of the third quarter. We have already received orders from our existing fleet partners as well as from fleets that have not been a part of our long-term evaluation process. Looking forward to 2021, we expect the continued ramp-up of MirrorEye® retrofit orders in the traditional retrofit application, as well as through our pre-wire partnership with DTNA. In addition, we are pursuing pre-wire relationships with other OEMs and expect to launch our first OEM MirrorEye platforms in both North America and Europe in 2021."

For earnings history and earnings-related data on Stoneridge (SRI) click here.

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