NOVI,
Mich., Aug. 2, 2023 /PRNewswire/ --
ADVANCING STRATEGIC PRIORITIES WHILE
DELIVERING 10%+ QUARTER TO QUARTER SALES GROWTH AND 400+ BASIS
POINT GROSS MARGIN EXPANSION
GUIDING TO THE HIGH END OF PREVIOUSLY
PROVIDED ADJUSTED SALES, ADJUSTED GROSS MARGIN AND ADJUSTED
OPERATING MARGIN RANGES
2023 Second Quarter Results
- Sales of $266.8
million
- Adjusted sales of $262.4
million
- Gross profit of $60.5
million
- Adjusted gross profit of $60.9
million (23.2% of adjusted sales)
- Operating income of $4.3
million
- Adjusted operating income of $6.2
million (2.4% of adjusted sales)
- Adjusted EBITDA of $11.9
million (4.5% of adjusted sales)
-
- Non-operating foreign currency and equity investment expense
unfavorably impacted adjusted EBITDA in the quarter by $(2.7) million. Excluding these non-operating
items adjusted EBITDA was $14.7
million (5.6% of adjusted sales).
- Loss per share ("EPS") of $(0.11)
- Adjusted loss per share of $(0.05)
-
- Non-operating foreign currency and equity investment expense
unfavorably impacted adjusted EPS in the quarter by ~$(0.08). Excluding these non-operating items
adjusted EPS was ~$0.03.
Reaffirming 2023 Full-year Guidance
- Expecting operating performance to be at the high end of the
previously provided ranges
-
- Adjusted sales of $960.0 -
$990.0 million
- Adjusted gross margin of 20.5% - 21.25%
- Adjusted operating margin of 1.5% - 2.25%
- Reaffirming previously provided guidance ranges for adjusted
EPS, adjusted EBITDA and adjusted tax expense driven by unfavorable
impact of year-to-date non-operating expenses
-
- Adjusted EPS of $(0.10) -
$0.10 (break-even
midpoint)
-
- Incremental non-operating expenses reduced adjusted EPS
guidance by ~$(0.12) in the first
half of the year
- Adjusted EBITDA margin of 5.3% - 5.9% ($50.9 - $58.4
million)
-
- Incremental non-operating expenses reduced adjusted EBITDA by
$(4.0) million in the first half of
the year
- Adjusted tax expense of $3.0 to $4.0
million
Stoneridge, Inc. (NYSE: SRI) today announced financial results
for the second quarter ended June 30,
2023, with sales of $266.8
million and loss per share of $(0.11). Adjusted sales for the second quarter
were $262.4 million and adjusted EPS
was $(0.05). Sales were adjusted to
normalize the impact of electronic component spot buys recovered
from customers of $4.4 million for
the second quarter of 2023. In addition, financial performance was
adjusted in relation to certain business realignment costs. The
Company expects that these realignment actions, which are primarily
related to the consolidation of global functions, will streamline
the organization and improve operational efficiency and overall
cost structure. The exhibits attached hereto provide reconciliation
detail on this and all other normalizing adjustments of Non-GAAP
financial measures used in this press release.
For the second quarter of 2023, Stoneridge reported gross profit
of $60.5 million and adjusted gross
profit of $60.9 million (23.2% of
adjusted sales). Operating income was $4.3
million and adjusted operating income was $6.2 million (2.4% of adjusted sales). Adjusted
EBITDA was $11.9 million (4.5% of
adjusted sales). Relative to the first quarter of 2023, adjusted
gross margin improved by 470 basis points, adjusted operating
margin improved by 390 basis points and adjusted EBITDA margin
improved by 300 basis points on adjusted sales growth of 13.0%.
Jim Zizelman, president and chief
executive officer, commented, "During the second quarter we drove
strong top-line growth and significant margin improvement resulting
in financial performance that exceeded the expectations we outlined
on the first quarter earnings call. As expected, we have completed
the majority of our customer pricing negotiations, which led to
better performance within the quarter as well as an improved
operating outlook for the remainder of the year."
Zizelman continued, "Today we are announcing new business that
encompasses both the extension of an existing front-axle disconnect
actuator program and the awarding of the next generation program.
The extension and new award secure our strategic position on high
demand light trucks and SUVs through 2032. These programs are
expected to generate approximately $20
million in peak annual revenue. This award demonstrates our
capabilities in advanced actuation devices and continued expansion
in 4x4 applications. Similarly, this award showcases our ability to
apply technologies across different drivetrain types as this
product is similar to the drive unit clutch actuator that we
discussed last quarter launching on the hybrid-electric Corvette
E-Ray."
Zizelman concluded, "In addition, we are proud to support
Kenworth as they now offer MirrorEye as an option on their T680
truck providing improved fuel economy, enhanced driver visibility
and the ability to track the trailer around a corner or while
backing through any driving environment. This industry leading and
innovative new platform is the first MirrorEye OEM solution offered
in North America. We remain
focused on executing on our long-term growth strategy focused on
drivetrain agnostic, platform-based advanced technologies in each
of our primary segments and end markets."
Second Quarter in Review
Control Devices sales of $93.1 million increased by 9.5% relative to
sales in the second quarter of 2022. This increase was primarily
due to higher sales in our North
America passenger vehicle end market and China end markets. Second quarter adjusted
operating margin of 5.9% improved by 100 basis points relative to
the second quarter of 2022, primarily due to higher contribution
from higher sales slightly offset by higher D&D spend.
Electronics adjusted sales of $163.9
million increased by 42.4% relative to sales in the second
quarter of 2022. This increase was primarily driven by higher sales
volumes in our Europe and
North America commercial vehicle
end markets and negotiated price increases. Second quarter adjusted
operating margin of 5.4% improved by 760 basis points relative to
the second quarter of 2022, primarily due to higher contribution
from higher sales, including negotiated price increases, and
relatively lower material costs. This was partially offset by
higher labor costs and the adverse impact of foreign exchange
fluctuations.
Stoneridge Brazil sales of $14.9
million increased by 11.7% relative to sales in the second
quarter of 2022, primarily due to higher sales in OEM products and
tracking devices. Second quarter operating margin of 6.0% improved
by approximately 300 basis points relative to adjusted
operating margin in the second quarter of 2022, primarily
due to contribution from higher sales partially offset by higher
SG&A costs.
Relative to the first quarter of 2023, Control Devices sales
increased by 7.4%. This increase was primarily due to higher sales
in the North America passenger
vehicle end market and China end
markets driven by production stability relative to the first
quarter. Second quarter adjusted operating margin increased by 420
basis points relative to the first quarter of 2023, primarily due
to lower direct material costs driven by favorable sales mix and
lower SG&A spend.
Relative to the first quarter of 2023, Electronics adjusted
sales increased by 16.6%. This increase was primarily due to
continued strong demand in our commercial vehicle end markets and
incremental pricing. Second quarter adjusted operating margin
increased by 410 basis points relative to the first quarter of
2023, primarily due to gross margin improvement as a result of
incremental pricing, partially offset by higher D&D spend
primarily related to program launch support. The Company expects
D&D spend to return to normalized levels by the fourth quarter
of 2023 as program launches mature.
Relative to the first quarter of 2023, Stoneridge Brazil sales
increased by 4.6%. This increase was primarily due higher sales in
our aftermarket products partially offset by lower OEM product
sales. Second quarter operating margin decreased by 340 basis
points relative to the first quarter of 2023, primarily due to
higher overhead and SG&A spend.
Cash and Debt Balances
As of June 30, 2023, Stoneridge
had cash and cash equivalents balances totaling $34.7 million. Total debt as of June 30, 2023 was $171.6
million. Per the terms of the existing Revolving Credit
Facility, the Company reported a net debt to trailing twelve-month
EBITDA compliance ratio of 2.97x, a 0.73x improvement relative to
the first quarter of 2023. The Company remains in compliance with
the Revolving Credit Facility and expects to remain in compliance
for the remainder of the year as financial performance is expected
to continue to improve resulting in reduced leverage ratios. The
Company expects to refinance the existing credit facility prior to
the issuance of the year-end 2023 financial statements.
2023 Outlook
The Company is expecting operating performance to be at the high
end of the previously guided ranges for adjusted sales guidance of
$960.0 million to $990.0 million, adjusted gross margin
guidance of 20.5% to 21.25% and adjusted operating margin guidance
of 1.5% to 2.25%.
Partially offsetting improved operating performance
expectations, the Company noted year-to-date non-operating expenses
of $4.0 million or $0.12 adjusted EPS. As a result of unfavorable
non-operating expenses, including foreign currency and equity
investment related expenses, the Company reaffirmed full-year
adjusted earnings per share guidance of $(0.10) to $0.10,
adjusted EBITDA guidance of $50.9 million to $58.4 million, or 5.3% - 5.9%, of adjusted
sales and adjusted tax expense guidance of $3.0 million - $4.0 million.
Matt Horvath, chief financial
officer, commented "Second quarter performance exceeded our
previously provided expectations across each of our key financial
metrics, putting us in a good position to achieve our full-year
2023 guidance. As a result of improved operating performance to
date and an improved outlook for the remainder of the year on
continued strong sales, we are guiding to the high end of the
previously provided guidance ranges for adjusted revenue, gross
margin and operating margin. In addition, we are reaffirming our
previously provided full-year guidance ranges for adjusted EPS,
EBITDA and tax expense, primarily as a result of improved operating
performance partially offset by below-the-line, non-operating costs
recognized to date of approximately $4.0
million or $0.12 adjusted EPS.
Stoneridge remains well positioned to continue to outperform our
underlying markets and drive margin expansion resulting in
long-term shareholder value creation."
Conference Call on the Web
A live Internet broadcast
of Stoneridge's conference call regarding 2023 second quarter
results can be accessed at 9:00 a.m. Eastern
Time on Thursday, August 3, 2023,
at www.stoneridge.com, which will also offer a webcast
replay.
About Stoneridge, Inc.
Stoneridge, Inc., headquartered
in Novi, Michigan, is a global
designer and manufacturer of highly engineered electrical and
electronic systems, components and modules for the automotive,
commercial, off-highway and agricultural vehicle markets.
Additional information about Stoneridge can be found
at www.stoneridge.com.
Forward-Looking Statements
Statements in this press
release contain "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. These statements appear
in a number of places in this report and may include statements
regarding the intent, belief or current expectations of the
Company, with respect to, among other things, our (i) future
product and facility expansion, (ii) acquisition strategy, (iii)
investments and new product development, (iv) growth opportunities
related to awarded business, and (v) operational expectations.
Forward-looking statements may be identified by the words "will,"
"may," "should," "designed to," "believes," "plans," "projects,"
"intends," "expects," "estimates," "anticipates," "continue," and
similar words and expressions. The forward-looking statements are
subject to risks and uncertainties that could cause actual events
or results to differ materially from those expressed in or implied
by the statements. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include, among other factors:
- the ability of our suppliers to supply us with parts and
components at competitive prices on a timely basis, including the
impact of potential tariffs and trade considerations on their
operations and output;
- fluctuations in the cost and availability of key materials
(including semiconductors, printed circuit boards, resin, aluminum,
steel and copper) and components and our ability to offset cost
increases through negotiated price increases with our customers or
other cost reduction actions, as necessary;
- global economic trends, competition and geopolitical risks,
including impacts from the ongoing conflict between Russia and Ukraine and the related sanctions and other
measures, or an escalation of sanctions, tariffs or other trade
tensions between the U.S. and China or other countries;
- our ability to achieve cost reductions that offset or exceed
customer-mandated selling price reductions;
- the reduced purchases, loss or bankruptcy of a major customer
or supplier;
- the costs and timing of business realignment, facility closures
or similar actions;
- a significant change in automotive, commercial, off-highway or
agricultural vehicle production;
- competitive market conditions and resulting effects on sales
and pricing;
- foreign currency fluctuations and our ability to manage those
impacts;
- customer acceptance of new products;
- our ability to successfully launch/produce products for awarded
business;
- adverse changes in laws, government regulations or market
conditions, including tariffs, affecting our products or our
customers' products;
- our ability to protect our intellectual property and
successfully defend against assertions made against us;
- liabilities arising from warranty claims, product recall or
field actions, product liability and legal proceedings to which we
are or may become a party, or the impact of product recall or field
actions on our customers;
- labor disruptions at our facilities or at any of our
significant customers or suppliers;
- business disruptions due to natural disasters or other
disasters outside of our control;
- the ability to refinance our existing revolving Credit Facility
on a timely basis prior to its June 5,
2024 maturity;
- the amount of our indebtedness and the restrictive covenants
contained in the agreements governing our indebtedness, including
our revolving Credit Facility;
- capital availability or costs, including changes in interest
rates or market perceptions;
- the failure to achieve the successful integration of any
acquired company or business;
- risks related to a failure of our information technology
systems and networks, and risks associated with current and
emerging technology threats and damage from computer viruses,
unauthorized access, cyber-attack and other similar disruptions;
and
- the items described in Part I, Item IA ("Risk Factors") in the
Company's 2022 Form 10-K.
The forward-looking statements contained herein represent our
estimates only as of the date of this release and should not be
relied upon as representing our estimates as of any subsequent
date. While we may elect to update these forward-looking statements
at some point in the future, we specifically disclaim any
obligation to do so, whether to reflect actual results, changes in
assumptions, changes in other factors affecting such
forward-looking statements or otherwise.
Use of Non-GAAP Financial Information
This press
release contains information about the Company's financial results
that is not presented in accordance with accounting principles
generally accepted in the United
States ("GAAP"). Such non-GAAP financial measures are
reconciled to their closest GAAP financial measures at the end of
this press release. The provision of these non-GAAP financial
measures for 2023 and 2022 is not intended to indicate that
Stoneridge is explicitly or implicitly providing projections on
those non-GAAP financial measures, and actual results for such
measures are likely to vary from those presented. The
reconciliations include all information reasonably available to the
Company at the date of this press release and the adjustments that
management can reasonably predict.
Management believes the non-GAAP financial measures used in this
press release are useful to both management and investors in their
analysis of the Company's financial position and results of
operations. In particular, management believes that adjusted sales,
adjusted gross profit and margin, adjusted operating income (loss)
and margin, adjusted income (loss) before tax, adjusted net income
(loss), adjusted earnings (loss) per share, adjusted EBITDA,
adjusted EBITDA margin, adjusted tax expense (benefit), adjusted
tax rate, adjusted net debt and adjusted cash are useful measures
in assessing the Company's financial performance by excluding
certain items that are not indicative of the Company's core
operating performance or that may obscure trends useful in
evaluating the Company's continuing operating activities.
Management also believes that these measures are useful to both
management and investors in their analysis of the Company's results
of operations and provide improved comparability between fiscal
periods.
Adjusted sales, adjusted gross profit and margin, adjusted
operating income (loss) and margin, adjusted income (loss) before
tax, adjusted net income (loss), adjusted earnings (loss) per
share, adjusted EBITDA, adjusted EBITDA margin, adjusted tax
expense (benefit), adjusted tax rate, adjusted net debt and
adjusted cash should not be considered in isolation or as a
substitute for sales, gross profit, operating income (loss), income
(loss) before tax, net loss, earnings (loss) per share, tax expense
(benefit), tax rate, debt, cash and cash equivalents, cash provided
by operating activities or other income statement or cash flow
statement data prepared in accordance with GAAP.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in
thousands)
|
|
June 30,
2023
|
|
December 31,
2022
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
34,705
|
|
$
54,798
|
Accounts receivable,
less reserves of $1,132 and $962, respectively
|
|
185,296
|
|
158,155
|
Inventories,
net
|
|
175,305
|
|
152,580
|
Prepaid expenses and
other current assets
|
|
43,277
|
|
44,018
|
Total current
assets
|
|
438,583
|
|
409,551
|
Long-term
assets:
|
|
|
|
|
Property, plant and
equipment, net
|
|
106,227
|
|
104,643
|
Intangible assets,
net
|
|
46,638
|
|
45,508
|
Goodwill
|
|
34,870
|
|
34,225
|
Operating lease
right-of-use asset
|
|
12,225
|
|
13,762
|
Investments and other
long-term assets, net
|
|
46,954
|
|
44,416
|
Total long-term
assets
|
|
246,914
|
|
242,554
|
Total assets
|
|
$
685,497
|
|
$
652,105
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Revolving credit
facility
|
|
$
171,597
|
|
$
—
|
Current portion of
debt
|
|
—
|
|
1,450
|
Accounts
payable
|
|
136,457
|
|
110,202
|
Accrued expenses and
other current liabilities
|
|
75,579
|
|
66,040
|
Total current
liabilities
|
|
383,633
|
|
177,692
|
Long-term
liabilities:
|
|
|
|
|
Revolving credit
facility
|
|
—
|
|
167,802
|
Deferred income
taxes
|
|
7,975
|
|
8,498
|
Operating lease
long-term liability
|
|
8,967
|
|
10,594
|
Other long-term
liabilities
|
|
7,284
|
|
6,577
|
Total long-term
liabilities
|
|
24,226
|
|
193,471
|
Shareholders'
equity:
|
|
|
|
|
Preferred Shares,
without par value, 5,000 shares authorized, none issued
|
|
—
|
|
—
|
Common Shares, without
par value, 60,000 shares authorized, 28,966 and 28,966
shares issued and 27,522 and 27,341 shares outstanding at
June 30, 2023 and
December 31, 2022, respectively, with no stated
value
|
|
—
|
|
—
|
Additional paid-in
capital
|
|
226,713
|
|
232,758
|
Common Shares held in
treasury, 1,444 and 1,625 shares at June 30, 2023 and
December 31, 2022, respectively, at cost
|
|
(44,367)
|
|
(50,366)
|
Retained
earnings
|
|
191,314
|
|
201,692
|
Accumulated other
comprehensive loss
|
|
(96,022)
|
|
(103,142)
|
Total shareholders'
equity
|
|
277,638
|
|
280,942
|
Total liabilities and
shareholders' equity
|
|
$
685,497
|
|
$
652,105
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
(in thousands,
except per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
266,814
|
|
$
220,936
|
|
$
508,139
|
|
$
441,994
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
206,326
|
|
182,372
|
|
404,849
|
|
361,987
|
Selling, general and
administrative
|
|
33,491
|
|
28,938
|
|
63,354
|
|
56,337
|
Design and
development
|
|
22,666
|
|
15,554
|
|
39,634
|
|
32,582
|
Operating income
(loss)
|
|
4,331
|
|
(5,928)
|
|
302
|
|
(8,912)
|
Interest expense,
net
|
|
3,120
|
|
1,217
|
|
5,866
|
|
3,003
|
Equity in loss of
investee
|
|
329
|
|
377
|
|
500
|
|
458
|
Other expense (income),
net
|
|
2,387
|
|
(596)
|
|
3,535
|
|
735
|
Loss before income
taxes
|
|
(1,505)
|
|
(6,926)
|
|
(9,599)
|
|
(13,108)
|
Provision for income
taxes
|
|
1,487
|
|
413
|
|
779
|
|
1,906
|
Net loss
|
|
$
(2,992)
|
|
$
(7,339)
|
|
$
(10,378)
|
|
$
(15,014)
|
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.11)
|
|
$
(0.27)
|
|
$
(0.38)
|
|
$
(0.55)
|
Diluted
|
|
$
(0.11)
|
|
$
(0.27)
|
|
$
(0.38)
|
|
$
(0.55)
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
27,452
|
|
27,269
|
|
27,400
|
|
27,234
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
27,452
|
|
27,269
|
|
27,400
|
|
27,234
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Six months ended
June 30, (in thousands)
|
|
2023
|
|
2022
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net loss
|
|
$
(10,378)
|
|
$
(15,014)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used for)
operating activities:
|
|
|
|
|
Depreciation
|
|
13,161
|
|
13,618
|
Amortization,
including accretion and write-off of deferred financing
costs
|
|
4,004
|
|
4,323
|
Deferred income
taxes
|
|
(3,782)
|
|
(1,868)
|
Loss of equity method
investee
|
|
500
|
|
458
|
Gain on sale of fixed
assets
|
|
(854)
|
|
(95)
|
Share-based
compensation expense
|
|
1,271
|
|
2,834
|
Excess tax deficiency
related to share-based compensation expense
|
|
66
|
|
259
|
Gain on settlement of
net investment hedge
|
|
—
|
|
(3,716)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
|
(28,100)
|
|
(15,481)
|
Inventories,
net
|
|
(23,142)
|
|
(11,864)
|
Prepaid expenses and
other assets
|
|
3,313
|
|
(15,538)
|
Accounts
payable
|
|
27,069
|
|
16,577
|
Accrued expenses and
other liabilities
|
|
12,184
|
|
7,689
|
Net cash used for
operating activities
|
|
(4,688)
|
|
(17,818)
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Capital expenditures,
including intangibles
|
|
(18,025)
|
|
(14,890)
|
Proceeds from sale of
fixed assets
|
|
1,729
|
|
140
|
Proceeds from
settlement of net investment hedge
|
|
—
|
|
3,820
|
Investment in venture
capital fund, net
|
|
—
|
|
(450)
|
Net cash used for
investing activities
|
|
(16,296)
|
|
(11,380)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Revolving credit
facility borrowings
|
|
42,000
|
|
11,190
|
Revolving credit
facility payments
|
|
(38,068)
|
|
(16,500)
|
Proceeds from issuance
of debt
|
|
16,402
|
|
19,163
|
Repayments of
debt
|
|
(18,086)
|
|
(20,358)
|
Earn-out consideration
cash payment
|
|
—
|
|
(6,276)
|
Repurchase of Common
Shares to satisfy employee tax withholding
|
|
(1,325)
|
|
(699)
|
Net cash provided by
(used for) financing activities
|
|
923
|
|
(13,480)
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(32)
|
|
(2,177)
|
Net change in cash and
cash equivalents
|
|
(20,093)
|
|
(44,855)
|
Cash and cash
equivalents at beginning of period
|
|
54,798
|
|
85,547
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$
34,705
|
|
$
40,692
|
|
|
|
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
Cash paid for
interest, net
|
|
$
5,622
|
|
$
3,022
|
Cash paid for income
taxes, net
|
|
$
5,927
|
|
$
3,936
|
Regulation G
Non-GAAP Financial Measure Reconciliations
|
|
Reconciliation to US
GAAP
|
|
Exhibit 1 -
Reconciliation of Adjusted EPS
|
|
(USD in millions,
except EPS)
|
Q2
2023
|
|
Q2 2023
EPS
|
Net
Loss
|
$
(3.0)
|
|
$
(0.11)
|
|
|
|
|
Add: After-Tax Business
Realignment Costs
|
1.6
|
|
0.06
|
Adjusted Net
Loss
|
$
(1.4)
|
|
$
(0.05)
|
Exhibit 2 –
Reconciliation of Adjusted EBITDA
|
|
(USD in
millions)
|
Q2
2022
|
|
Q3
2022
|
|
Q4
2022
|
|
Q1
2023
|
|
Q2
2023
|
Income (Loss) Before
Tax
|
$
(6.9)
|
|
$
1.7
|
|
$
0.7
|
|
$
(8.1)
|
|
$
(1.5)
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
1.2
|
|
1.8
|
|
2.2
|
|
2.7
|
|
3.1
|
Depreciation and
amortization
|
8.5
|
|
8.3
|
|
8.2
|
|
8.3
|
|
8.4
|
EBITDA
|
$
2.8
|
|
$
11.8
|
|
$
11.1
|
|
$
3.0
|
|
$
10.0
|
|
|
|
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
—
|
|
0.3
|
|
—
|
|
1.3
|
|
1.9
|
Less: Pre-Tax Gain on
Disposal of Fixed Assets
|
—
|
|
—
|
|
—
|
|
(0.8)
|
|
—
|
Add: Pre-Tax
Environmental Remediation Costs
|
—
|
|
—
|
|
—
|
|
0.1
|
|
—
|
Add: Pre-Tax Brazilian
Indirect Tax Credits, Net
|
(0.6)
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted
EBITDA
|
$
2.3
|
|
$
12.1
|
|
$
11.1
|
|
$
3.6
|
|
$
11.9
|
Exhibit 3 – Adjusted
Gross Profit
|
|
(USD in
millions)
|
Q1
2023
|
|
Q2
2023
|
Gross
Profit
|
$
42.8
|
|
$
60.5
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
0.2
|
|
0.5
|
Adjusted Gross
Profit
|
$
43.0
|
|
$
60.9
|
Exhibit 4 - Adjusted
Operating Loss
|
|
(USD in
millions)
|
Q1
2023
|
|
Q2
2023
|
Operating Income
(Loss)
|
$
(4.0)
|
|
$
4.3
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
1.3
|
|
1.9
|
Less: Pre-Tax Gain on
Disposal of Fixed Assets
|
(0.8)
|
|
—
|
Add: Pre-Tax
Environmental Remediation Costs
|
0.1
|
|
—
|
Adjusted Operating
Income (Loss)
|
$
(3.4)
|
|
$
6.2
|
Exhibit 5 – Segment
Adjusted Operating Income (Loss)
|
|
Reconciliation of
Control Devices Adjusted Operating Income
|
|
(USD in
millions)
|
Q2
2022
|
|
Q1
2023
|
|
Q2
2023
|
Control Devices
Operating Income
|
$
4.1
|
|
$
2.1
|
|
$
5.1
|
|
|
|
|
|
|
Less: Pre-Tax Gain on
Disposal of Fixed Assets
|
—
|
|
(0.8)
|
|
—
|
Add: Pre-Tax
Environmental Remediation Costs
|
—
|
|
0.1
|
|
—
|
Add: Pre-Tax Business
Realignment Costs
|
—
|
|
—
|
|
0.4
|
Control Devices
Adjusted Operating Income
|
$
4.1
|
|
$
1.4
|
|
$
5.5
|
Reconciliation of
Electronics Adjusted Operating Income (Loss)
|
|
(USD in
millions)
|
Q2
2022
|
|
Q1
2023
|
|
Q2
2023
|
Electronics
Operating Income (Loss)
|
$
(2.5)
|
|
$
1.4
|
|
$
7.4
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
—
|
|
0.3
|
|
1.3
|
Electronics Adjusted
Operating Income (Loss)
|
$
(2.5)
|
|
$
1.7
|
|
$
8.8
|
Reconciliation of
Stoneridge Brazil Adjusted Operating Income
|
|
(USD in
millions)
|
Q2
2022
|
|
Q1
2023
|
|
Q2
2023
|
Stoneridge Brazil
Operating Income
|
$
1.0
|
|
$
1.3
|
|
$
0.9
|
|
|
|
|
|
|
Add: Pre-Tax Brazilian
Indirect Tax Credits, Net
|
(0.6)
|
|
—
|
|
—
|
Stoneridge Brazil
Adjusted Operating Income
|
$
0.4
|
|
$
1.3
|
|
$
0.9
|
Exhibit 6 –
Reconciliation of Adjusted Sales
|
|
(USD in
millions)
|
Q2
2022
|
|
Q1
2023
|
|
Q2
2023
|
Sales
|
$
220.9
|
|
$
241.3
|
|
$
266.8
|
|
|
|
|
|
|
Less: Sales from Spot
Purchase Recoveries
|
(15.3)
|
|
(9.1)
|
|
(4.4)
|
Adjusted
Sales
|
$
205.7
|
|
$
232.2
|
|
$
262.4
|
Exhibit 7 –
Reconciliation of Electronics Adjusted Sales
|
|
(USD in
millions)
|
Q2
2022
|
|
Q1
2023
|
|
Q2
2023
|
Electronics
Sales
|
$
130.4
|
|
$
149.6
|
|
$
168.3
|
|
|
|
|
|
|
Less: Sales from Spot
Purchase Recoveries
|
(15.3)
|
|
(9.1)
|
|
(4.4)
|
Electronics Adjusted
Sales
|
$
115.1
|
|
$
140.5
|
|
$
163.9
|
Exhibit 8 –
Reconciliation of Adjusted Tax Rate
|
|
(USD in
millions)
|
Q2
2023
|
|
Tax
Rate
|
Loss Before
Tax
|
$
(1.5)
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
1.9
|
|
|
Adjusted Income
Before Tax
|
$
0.4
|
|
|
|
|
|
|
Income Tax
Expense
|
1.5
|
|
(98.8) %
|
|
|
|
|
Add: Tax Impact from
Pre-Tax Adjustments
|
0.4
|
|
|
|
|
|
|
Adjusted Income Tax
Expense
|
$
1.8
|
|
nm
|
Exhibit 9 –
Reconciliation of Compliance Leverage Ratio
|
|
Reconciliation of
Adjusted EBITDA for Compliance Calculation
|
(USD in
millions)
|
|
Q2
2022
|
|
Q3
2022
|
|
Q4
2022
|
|
Q1
2023
|
|
Q2
2023
|
Income (Loss) Before
Tax
|
|
$
(6.9)
|
|
$
1.7
|
|
$
0.7
|
|
$
(8.1)
|
|
$
(1.5)
|
Interest Expense,
net
|
|
1.2
|
|
1.8
|
|
2.2
|
|
2.7
|
|
3.1
|
Depreciation and
Amortization
|
|
8.5
|
|
8.3
|
|
8.2
|
|
8.3
|
|
8.4
|
EBITDA
|
|
$
2.8
|
|
$
11.8
|
|
$
11.1
|
|
$
3.0
|
|
$
10.0
|
|
|
|
|
|
|
|
|
|
|
|
Compliance
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Add: Adjustments from
Foreign Currency Impact
|
|
(0.4)
|
|
3.0
|
|
2.8
|
|
1.4
|
|
3.1
|
Add: Extraordinary,
Non-recurring or Unusual items
|
|
0.4
|
|
—
|
|
0.1
|
|
0.2
|
|
—
|
Add: Cash Restructuring
Charges
|
|
—
|
|
0.6
|
|
0.2
|
|
1.4
|
|
0.5
|
Add: Adjustment to
Autotech Investments
|
|
0.4
|
|
—
|
|
0.4
|
|
0.2
|
|
0.3
|
Adjusted EBITDA
(Compliance)
|
|
$
3.3
|
|
$
15.5
|
|
$
14.6
|
|
$
6.1
|
|
$
13.9
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted TTM EBITDA
(Compliance)
|
|
|
|
|
|
|
|
$
39.5
|
|
$
50.2
|
Reconciliation of
Adjusted Cash for Compliance Calculation
|
(USD in
millions)
|
|
|
|
|
|
Q1
2023
|
|
Q2
2023
|
Total Cash and Cash
Equivalents
|
|
|
|
|
|
$
35.2
|
|
$
34.7
|
|
|
|
|
|
|
|
|
|
Less: 35% Cash Foreign
Locations
|
|
|
|
|
|
(11.0)
|
|
(10.4)
|
Total Adjusted Cash
(Compliance)
|
|
|
|
|
|
$
24.2
|
|
$
24.3
|
Reconciliation of
Adjusted Debt for Compliance Calculation
|
(USD in
millions)
|
|
|
|
|
|
Q1
2023
|
|
Q2
2023
|
Total
Debt
|
|
|
|
|
|
$ 168.8
|
|
$ 171.6
|
|
|
|
|
|
|
|
|
|
Outstanding Letters of
Credit
|
|
|
|
|
|
1.6
|
|
1.6
|
Total Adjusted Debt
(Compliance)
|
|
|
|
|
|
$ 170.5
|
|
$ 173.2
|
|
|
|
|
|
|
|
|
|
Adjusted Net Debt
(Compliance)
|
|
|
|
|
|
$ 146.3
|
|
$ 148.9
|
Compliance Leverage
Ratio (Net Debt / TTM EBITDA)
|
|
|
|
|
|
3.70x
|
|
2.97x
|
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SOURCE Stoneridge, Inc.