Stoneridge Reports Fourth-Quarter 2010 Results

WARREN, Ohio, Feb. 4, 2011 /PRNewswire/ -- Stoneridge, Inc. (NYSE: SRI) today announced net sales of $160.5 million and net income of $4.4 million, or $0.18 per diluted share, for the fourth quarter ended December 31, 2010.  

For the 2010 fourth quarter, net sales increased $26.7 million, or 20.0%, to $160.5 million, compared with $133.8 million for the fourth quarter of 2009, driven by market demand as well as internal organic growth.  The increase in net sales was primarily caused by increased volume in the fourth quarter of 2010 compared with the fourth quarter of 2009 in the passenger car and light truck markets in North America (8.2%) and medium- and heavy-duty truck markets in both North America (29.3%) and Europe (78.1%).  

Net income for the fourth quarter of 2010 was $4.4 million, or $0.18 per diluted share, compared with a net loss of $0.2 million, or $(0.01) per diluted share, in the fourth quarter of 2009.  The increase in net income was primarily due to increased production volume, which was somewhat offset by one-time non-recurring expenses mostly from the write-off of deferred financing costs from the Company's $183.0 million bond refinancing, which reduced net income by $1.3 million, or $0.05 per diluted share, and costs associated with an environmental remediation of the idled asset held for sale in Sarasota, Florida in the amount of $0.9 million or $0.04 per diluted share.

On October 4, 2010, Stoneridge completed the refinancing of $183.0 million in unsecured 11.5% notes that would have matured on May 1, 2012.  Stoneridge issued $175.0 million in new senior secured 9.5% notes which mature October 15, 2017, and extended the maturity of the Asset Based Lending facility until November 1, 2012.  Expenses related to the refinancing unfavorably affected net income in the fourth quarter of 2010 by $1.3 million, or $0.05 per diluted share. Interest expense in the fourth quarter was favorably affected by the refinancing by $0.6 million or $0.02 per diluted share.

In addition, on November 8, 2010, the Company executed a secondary share issuance on behalf of shareholders affiliated with the Draime family (the "Selling Shareholders") of the sale of 10,173,285 Company Common Shares at $10.75 per Common Share, less underwriting commissions and discounts. The Company did not receive any proceeds from the offering and did not incur any third party expenses.

As of December 31, 2010, Stoneridge's consolidated cash position was $72.0 million, $19.9 million lower than its 2009 year-end balance of $91.9 million.  The decrease was primarily the result of higher accounts receivable balances from higher sales, as well as refinancing the Company's long-term debt and to reduce the outstanding balance by $8.0 million. The Company's Asset Based Lending facility remains undrawn.

For the year ended December 31, 2010, net sales were $635.2 million compared with $475.2 million for 2009; an increase of $160.0 million or 33.7%.  Net income for 2010 improved to $10.6 million, or $0.44 per diluted share, compared with a net loss of $32.4 million, or $(1.37) per diluted share, in 2009.

Outlook

"Our markets in the fourth quarter continued the trend of sequential and year-over-year improvement resulting in increased sales. Volume improvements and our cost control initiatives benefited the fourth quarter and led to improved financial results compared with the third quarter of 2010.  Our fourth quarter results were also affected by expenses related to the previously announced refinancing and costs associated with an environmental remediation at our asset-held-for-sale Sarasota, Florida facility," said John C. Corey, president and chief executive officer.  "We are closing out 2010 with significant improvement over the prior year.  We expect 2011 sales to continue the favorable trend which began in 2010 and consequently expect our 2011 sales to be in the range of $720.0 million to $750.0 million. Our 2011 sales will be the result of both increasing sales volumes and new business awards.  We expect 2011 to be another year of significant improvement in financial results."

Conference Call on the Web

A live Internet broadcast of Stoneridge's conference call regarding 2010 fourth-quarter results can be accessed at 11 a.m. Eastern time on Friday, February 4, 2011, 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 medium- and heavy-duty truck, automotive and agricultural and off-highway vehicle markets.  Additional information about Stoneridge can be found at www.stoneridge.com.

Forward-Looking Statements

Statements 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 change in medium- and heavy-duty truck, automotive or agricultural and off-highway vehicle 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.

SOURCE Stoneridge, Inc.