Stoneridge Reports Strong Second-Quarter 2016 Results

WARREN, Ohio, Aug. 2, 2016 /PRNewswire/ --

• Reports Earnings Per Share From Continuing Operations of $0.41, an increase of $0.16 per share or 64.0% compared with 2Q15
• Sales of $186.9 million increased by $21.6 million or 13.1% compared with 2Q15
• Operating Income of $13.6 million increased by $6.2 million or 83.8% compared with 2Q15
• New program sales providing expected operating margin leverage
• Full-Year 2016 EPS Guidance revised upward

Stoneridge, Inc. (NYSE: SRI) today announced financial results for the second quarter ended June 30, 2016, with sales of $186.9 million and earnings per diluted share from continuing operations attributable to Stoneridge, Inc. of $0.41, an increase of $0.16 per share or 64.0% compared with the second quarter of 2015.  

Second-quarter 2016 net sales were $186.9 million, an increase of $21.6 million compared with $165.3 million for the second quarter of 2015.  Second-quarter 2016 sales were negatively affected by $2.5 million primarily due to unfavorable foreign currency translation primarily in the Company's PST segment. On a constant currency basis, second-quarter sales increased by $24.2 million, or 14.6%, compared with the second quarter of 2015 (see Exhibit 1 for reconciliation of this non-GAAP financial measure).                                                                    

The Control Devices segment sales increased by $24.5 million, or 29.0%, to $108.9 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 $0.1 million, or 0.2%, to $57.8 million in the second quarter of 2016, compared with the second quarter of 2015.  Electronics sales primarily decreased due to lower volumes in the North American commercial vehicle market.  The Electronics segment exposure to the North American commercial vehicle market dropped significantly as a result of the Wiring business divestiture in August 2014.

PST experienced a sales decrease of $2.7 million, or 11.9%, to $20.3 million, compared with the second quarter of 2015, due to unfavorable foreign currency exchange translation.  On a constant currency basis, in the second quarter of 2016, the PST segment sales increased by $0.1 million, or 0.5%, compared with the second quarter of 2015 because of the continued adverse effects of the deteriorated economic conditions in Brazil which have continued (see Exhibit 1 for reconciliation of this non-GAAP financial measure).  During the second quarter of 2016, the average Brazilian Real per US Dollar rate depreciated from R$3.07 per USD to R$3.50 per USD, or 14.0%, compared with the second quarter of 2015.  This reduced U.S. dollar reported sales for PST by approximately $2.9 million, or 12.4%.

Earnings per diluted share attributable to Stoneridge, Inc. was $0.41 for the second quarter of 2016 compared with earnings per diluted share attributable to Stoneridge, Inc. of $0.25 for the second quarter of 2015, an improvement of $0.16 per share or 64.0%.

At June 30, 2016, Stoneridge's consolidated cash position was $55.3 million, an increase of $0.9 million from December 31, 2015.  Cash increased due primarily to profitability which was offset by capital expenditures to facilitate new business programs and seasonal working capital increases.   Stoneridge's Debt to Adjusted EBITDA from Continuing Operations ratio improved to 2.0x compared with 2.5x in the second quarter of 2015 (see Exhibit 2 for a reconciliation of this non-GAAP financial measure).

Jon DeGaynor, President and Chief Executive Officer, commented, "This quarter, Stoneridge delivered its best earnings per share performance in the past 10 years, excluding the gain associated with the PST purchase transaction in the fourth quarter of 2011. Our performance was driven by significant improvement to operating margins in the second quarter from higher sales at Control Devices, currency tailwinds and operating improvements at Electronics.  We are achieving the kind of leverage on sales that we had planned for in 2016, and we continue to expect year-on-year improved performance for the balance of the year."  

DeGaynor added, "PST has endured the prolonged economic downturn that has plagued Brazil over the past three years. PST's continued efforts to mitigate the effect of the downturn are paying off.  PST improved its operating performance by $1.5 million in the second quarter of 2016, compared with the second quarter of 2015, despite a sales decrease of $2.7 million. PST generated its first operating profit in June and expects to generate an operating profit (excluding non-cash intangible amortization expense related to the purchase of PST) in the third and fourth quarters of 2016.  The PST management team continues to demonstrate their agility and tenacity in the face of economic adversity." 

DeGaynor concluded, "I am very proud of the financial performance Stoneridge delivered in the second quarter. We continue to demonstrate the profitability leverage that we have projected in our 2016 guidance.  We have also adjusted our 2016 earnings guidance upward (see Exhibit 3) to reflect higher profitability on a slightly lower sales expectation due primarily to PST's sales performance.  We look forward to continued strong execution for the balance of 2016."  

Conference Call on the WebA live Internet broadcast of Stoneridge's conference call regarding 2016 second-quarter results can be accessed at 10 a.m. Eastern time on Tuesday, August 2, 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.

 

 

PART I – FINANCIAL INFORMATION Item 1. Financial Statements

 

 

 

 

 

 

 

 

 

 

 

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SOURCE Stoneridge, Inc.