Stoneridge Reports Strong First-Quarter 2016 Results

WARREN, Ohio, May 4, 2016 /PRNewswire/ --

• Reports Earnings Per Share From Continuing Operations of $0.26
• Adjusted Earnings Per Share From Continuing Operations of $0.31 Exceeds Adjusted Earnings Per Share From Continuing Operations of $0.17 in the First Quarter of 2015
• New Business Launches and Sales on Track to Meet Expectations in 2016
• Net New Business Forecast Range Revised Upward to $232.0 Million for 2016–2020, an Increase of $53.0 Million From February 2016 Estimate

Stoneridge, Inc. (NYSE: SRI) today announced financial results for the first quarter ended March 31, 2016, with sales of $162.6 million and earnings per diluted share from continuing operations attributed to Stoneridge, Inc. of $0.26.  Adjusted earnings per share from continuing operations of $0.31 exceeds adjusted earnings per share from continuing operations of $0.17 in the first quarter of 2015 (see Exhibit 2 for reconciliation of this non-GAAP financial measure).

On a constant currency basis, sales increased by $7.6 million, or 4.7%, during the first quarter of 2016 (see Exhibit 1 for reconciliation of this non-GAAP financial measure).  First-quarter 2016 net sales were $162.6 million, a decrease of $0.2 million compared with $162.8 million for the first quarter of 2015.  First-quarter 2016 sales were negatively affected by $7.8 million due to unfavorable foreign currency translation for the Company's PST and Electronics segments.                                                                                   

The Control Devices segment sales increased by $12.5 million, or 15.6%, to $92.4 million.  The sales increase in the Control Devices segment in 2016 reflects sales of new programs as well as a robust North American passenger car market.

The Electronics segment sales declined by $3.8 million, or 6.7%, in the first quarter of 2016 compared with the first quarter of 2015.  Electronics sales primarily decreased due to lower volumes in the North American commercial vehicle market and, to a lesser extent, unfavorable foreign currency translation.  The Electronics exposure to the North American commercial vehicle market has dropped significantly as a result of the divesture of the Wiring business in July 2014.

On a constant currency basis, in the first quarter of 2016, the PST segment sales decreased by $1.8 million, or 7.0%, compared with the first quarter of 2015 because of the adverse effects of the continued deterioration of economic conditions in Brazil (see Exhibit 1 for reconciliation of this non-GAAP financial measure).  PST experienced a sales decrease of $8.9 million, or 33.6%, compared with the first quarter of 2015, due to unfavorable foreign currency exchange translation and weaker economic conditions in Brazil.  During the first quarter of 2016, the Brazilian Real depreciated from R$2.86 per USD to R$3.91 per USD, or 36.7%, compared with the first quarter of 2015.  This reduced U.S. dollar reported sales for PST by approximately $7.1 million, or 26.6%.

Earnings per diluted share from continuing operations attributable to Stoneridge, Inc. was $0.26 for the first quarter of 2016 compared with earnings per diluted share from continuing operations attributable to Stoneridge, Inc. of $0.09 for the first quarter of 2015. The first-quarter 2016 net income from continuing operations included expense from business realignment charges of $1.5 million, or $0.05 per diluted share.  The first quarter 2015 net income from continuing operations included an expense of $2.2 million, or $0.08 per diluted share, for the acceleration of vesting of share-based awards in connection with the retirement of the Company's former President and Chief Executive Officer.

At March 31, 2016, Stoneridge's consolidated cash position was $48.4 million, a decrease of $6.0 million from December 31, 2015.  Cash decreased due primarily to capital expenditures to facilitate new business programs and seasonal working capital increases.   Stoneridge's Debt to Adjusted EBITDA from Continuing Operations ratio improved to 2.2x compared with 2.4x in the first quarter of 2015 (see Exhibit 4 for a reconciliation of this non-GAAP financial measure).

Jon DeGaynor, President and Chief Executive Officer, commented, "The Control Devices and Electronics segments continued to perform well during the first quarter as their combined operating margin including our Unallocated Corporate expenses delivered 8.0% to net sales, which is an improvement over last year's first quarter of 4.2% and the fourth quarter of 2015 performance of 7.5%.  Both segments saw significant improvement to operating margins in the first quarter from higher sales at Control Devices and currency tailwinds as well as operating improvements at Electronics.  Our profit plan for the first quarter was in line with our expectations for the year.  Our shift-by-wire launches are on track for 2016, although our first quarter experienced some sales delays in the Asian market, which are expected to be made up during the balance of 2016."  

DeGaynor added, "The continuing negative economic environment in Brazil has presented obstacles to PST's efforts to improve its performance.  PST's resilient response has been to embark on further cost reduction initiatives, the latest of which began in January.  This is the third business realignment initiative since April 2015.  PST expects to generate an operating profit (excluding non-cash intangible amortization expense related to the purchase of PST) in the second quarter of 2016.  Although we did not start the year believing the further cost reductions would be necessary, further reductions in demand have warranted such actions.  The PST management team continues to demonstrate their agility in face of economic adversity." 

DeGaynor concluded, "In the first quarter and the first two weeks of April, we won six new major business awards in our Electronics and Control Devices segments, which we expect to increase our net new business from $179 million to $232 million during the 2016 to 2020 period.  The recent wins and increases to our net new business pipeline are further validation that the strategies that we are executing are having a positive effect on our results. Despite our sales being slightly less than we were expecting for the first quarter, we believe sales are on track for the balance of the year.  We are also demonstrating the profitability leverage that we have projected in our 2016 guidance."  

Conference Call on the WebA live Internet broadcast of Stoneridge's conference call regarding 2016 first-quarter results can be accessed at 10 a.m. Eastern time on Wednesday, May 4, 2016, at www.stoneridge.com, which will also offer a webcast replay.

About Stoneridge, Inc.Stoneridge, Inc., headquartered in Warren, Ohio, is an independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the automotive, commercial vehicle, motorcycle, agricultural and off-highway vehicle markets.  Additional information about Stoneridge can be found at www.stoneridge.com.

Forward-Looking StatementsStatements 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 volume change in automotive, commercial vehicle, motorcycle, off-highway vehicle and agricultural equipment production; disruption in the OEM supply chain due to bankruptcies; 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.

 

 

 

 

 

 

 

 

 

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SOURCE Stoneridge, Inc.