Stoneridge (SRI) Preliminary Q3 EPS Misses Consensus Estimates

Stoneridge, Inc. (NYSE: SRI), a leading designer and manufacturer of highly engineered electrical and electronic vehicle systems, today provided a business update and preliminary third quarter results reflecting continued supply chain-related challenges that resulted in reduced production schedules by the Company's OEM customers and incremental material and logistics costs.

On September 16, 2021, IHS Markit released its latest forecast for worldwide automotive production. Further, on October 1, 2021, LMC released its latest forecast for worldwide commercial vehicle production. Based on these updated forecasts, Stoneridge's weighted average end-markets for the third quarter 2021 declined by approximately 13.0% relative to third quarter forecasted production assumptions provided during the Company's second quarter 2021 earnings call.

"The overall transportation industry continues to be challenged by the global pandemic and its aftermath. Recent production shutdowns and altered production forecasts at our automotive and commercial vehicle OEM customers, often on short notice, have created volatility and had a negative impact on our financial results for the third quarter," commented Jon DeGaynor, president and chief executive officer.

For the third quarter 2021, the Company announced that preliminary sales are expected to be approximately $180.0 million. Third quarter 2021 operating loss is expected to be between ($9.2) million to ($8.2) million, or approximately (5.1%) to (4.6%) of sales, and adjusted operating loss is expected to be between ($7.2) million to ($6.2) million, or approximately (4.0%) to (3.5%) of sales. Third quarter 2021 loss per share ("EPS") is expected to be between ($0.40) to ($0.34) and adjusted EPS is expected to be between ($0.29) to ($0.23). The exhibits attached hereto containing Regulation G reconciliations provide additional detail on the normalizing adjustments.

(Consensus sees Q3 loss per share of $0.08 on revenue of $191.75 million)

"While our top-line performance has declined less than overall market performance, we continue to face incremental material costs, logistics expenses and component shortages due to the unprecedented global supply chain disruptions and production volatility. In response, we have built on the cost mitigation processes we put in place during the second quarter, while at the same time instituting price increases where possible. Further, we have engaged in broader commercial discussions with our customers and suppliers to further mitigate these elevated costs and strengthen our future partnerships. Although these negotiations are ongoing, we are beginning to realize the financial benefits of these discussions and will continue to work closely with our customers and suppliers to navigate these headwinds both now and as we move forward," concluded Mr. DeGaynor.

Due to the continued market volatility expected for the remainder of 2021, the Company will provide an update regarding its previously provided full-year 2021 financial guidance during its third quarter earnings 2021 conference call.

Third Quarter 2021 Earnings Conference CallThe Company will webcast its third quarter 2021 earnings conference call live on Thursday, October 28, 2021, at 9:00 a.m. ET with president and chief executive officer, Jon DeGaynor, and chief financial officer, Matt Horvath. The webcast can be accessed on the Webcasts & Presentations page of the Investors section of the Company's website, www.stoneridge.com.

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