THIRD-QUARTER PERFORMANCE REFLECTS CONTINUED MARGIN
EXPANSION DRIVEN BY STRONG OPERATING PERFORMANCE
2024 PRELIMINARY OUTLOOK EXPECTS SALES GROWTH OF AT LEAST
5%, SIGNIFICANTLY OUTPERFORMING WEIGHTED AVERAGE
END-MARKETS
NOVI,
Mich., Nov. 1, 2023 /PRNewswire/ --
2023 Third-Quarter Results
- Sales of $238.2
million
- Adjusted sales of $237.2
million
- Gross profit of $52.5 million
(22.1% of adjusted sales)
- Operating income of $6.5
million
- Adjusted operating income of $7.3
million (3.1% of adjusted sales)
- Adjusted EBITDA of $17.0
million (7.2% of adjusted sales)
- Earnings per share ("EPS") of $0.08
- Adjusted earnings per share of $0.10
2023 Full-year Guidance
- Refining previously provided guidance ranges to reflect
expectation of continued strong margin performance, partially
offset by production volume headwinds in the fourth quarter
including the expected impact of the UAW strike
- Adjusted sales of $965.0
- $975.0 million
- Adjusted gross margin of ~21.5%
- Adjusted operating margin of ~2.0%
- Adjusted EPS of $(0.10) -
$0.00
- Midpoint guidance change of ($0.05) aligned with the expected impact
of UAW strike of ~($0.05)
- Adjusted EBITDA margin of ~5.0%
- Adjusted tax expense of $4.5 - $5.0
million
- Midpoint guidance change of ~$1.25
million due to increase in expected tax expense as a result
of mix of jurisdictional earnings
2024 Preliminary Revenue Guidance
- Providing preliminary 2024 guidance for at least 5% growth,
which outpaces weighted-average end-markets by at least
6.5%
Stoneridge, Inc. (NYSE: SRI) today announced financial
results for the third quarter ended September 30, 2023, with
sales of $238.2 million and
earnings per share of $0.08. Adjusted
sales for the third quarter were $237.2 million and adjusted EPS was
$0.10. The exhibits attached hereto
provide reconciliation detail on normalizing adjustments of
Non-GAAP financial measures used in this press release.
For the third quarter of 2023, Stoneridge reported gross profit
of $52.5 million (22.1% of
adjusted sales). Operating income was $6.5 million and adjusted operating income
was $7.3 million (3.1% of
adjusted sales), an increase of 70 basis points relative to the
second quarter of 2023. Adjusted EBITDA was $17.0 million (7.2% of adjusted sales), an
increase of 260 basis points, relative to the second quarter of
2023.
Jim Zizelman, president and chief
executive officer, commented, "During the third quarter we
continued to take actions to improve our overall margin profile
driving significant margin improvement. Our performance was
primarily driven by continued material cost improvement and
operating cost control resulting in adjusted operating margin
expansion of 70 basis points and adjusted EBITDA margin expansion
of 260 basis points versus the prior quarter. Despite volatility in
our end-markets, we continue to deliver on our commitments driven
by an unwavering focus to both execute on our long-term strategy
and drive continuous operational excellence. Our third
quarter performance is built on improved results from the second
quarter as we continued to strengthen our foundation to drive
operating performance and grow the Company."
Zizelman continued, "As we continue to focus on margin
performance, we are also focused on executing on the program
launches that will drive growth for the Company to significantly
outpace our underlying end-markets. During the third quarter,
we launched the Smart 2 Tachograph program for commercial vehicles
in Europe. This next generation
smart tachograph was designed to meet the EU Mobility Package
Standards and provides us with significant revenue opportunities
with both European OEMs and aftermarket over the next several
years. This program is expected to generate approximately
$20 million in revenue in 2023 and
more than $60 million in revenue in
2024."
Zizelman concluded, "In addition, we are proud to support the US
Department of Energy's Super Truck II innovation truck program. The
DOE has funded four projects to develop and demonstrate
cost-effective technologies with the goal of more than doubling the
freight efficiency of Class 8 trucks with Navistar, Daimler Truck
North America, Peterbilt and Volvo Trucks. MirrorEye® was selected
as a partner for all four SuperTruck II teams to help achieve
significant increases in freight efficiency through improved fuel
economy. We remain well positioned as the industry continues to
focus on both vehicle efficiency and safety."
Third Quarter in Review
Control Devices sales of $90.1
million increased by 0.8% relative to the third quarter of
2022. This increase was primarily due to higher sales in our
China passenger and commercial
vehicle end-markets as well as the impact of negotiated price
increases, partially offset by lower sales in our North America passenger vehicle end-market.
Third quarter adjusted operating margin of 6.2% declined by 220
basis points relative to the third quarter of 2022, primarily due
to higher direct material costs and slightly higher SG&A and
D&D costs.
Electronics adjusted sales of $142.4
million increased by 21.4% relative to the third quarter of
2022. This increase was primarily driven by higher sales volumes in
our Europe and North America commercial vehicle end-markets,
due in part to new program launches and ramp-ups, and negotiated
price increases partially offset by lower sales in our off-highway
end-markets. Third quarter adjusted operating margin of 6.1%
improved by 150 basis points relative to the third quarter of 2022,
primarily due to higher contribution from higher sales, including
negotiated price increases, and lower material costs. This was
partially offset by higher SG&A and D&D costs, including
support for new product launches.
Stoneridge Brazil sales of $14.2 million increased by 2.6% relative to
sales in the third quarter of 2022, primarily due to favorable
foreign currency translation and higher sales in OEM and
aftermarket products. Third quarter adjusted operating margin of
5.6% declined by approximately 150 basis points relative to the
third quarter of 2022, primarily due to by higher SG&A and
overhead costs partially offset by lower material costs from
favorable foreign exchange rate fluctuations.
Relative to the second quarter of 2023, Control Devices sales
decreased by 3.2%. This decrease was primarily due to lower sales
in our North America passenger
vehicle end-market, partially offset by higher sales in our
China passenger vehicle
end-market. Third quarter adjusted operating margin increased by 40
basis points relative to the second quarter of 2023, primarily due
to lower direct labor costs.
Relative to the second quarter of 2023, Electronics adjusted
sales decreased by 13.1%. This decrease was due in part to the
expected production seasonality as well as the reduced demand in
our commercial vehicle and off-highway end-markets. Third quarter
adjusted operating margin increased by 80 basis points relative to
the second quarter of 2023, primarily due to the step-down in
D&D costs compared to the second quarter as elevated D&D
spend for program launches declined. This was partially offset by
the favorable impact of the one-time benefit of retroactive pricing
recognized in the second quarter related to prior periods.
Relative to the second quarter of 2023, Stoneridge Brazil
sales decreased by 5.0%. This decrease was primarily due to
lower OEM product sales partially offset by higher sales in
aftermarket products. Third quarter operating
margin decreased by 40 basis points relative to the second
quarter of 2023, primarily due to higher overhead and SG&A
spend.
Cash and Debt Balances
As of September 30, 2023, Stoneridge had cash and cash
equivalents balances totaling $36.8 million. Total debt as of
September 30, 2023 was $186.0 million resulting in net debt of
$149.2 million. Per the terms of the
existing Revolving Credit Facility, the Company reported a net debt
to trailing twelve-month EBITDA compliance ratio of 3.11x. The
Company is in the advanced stages of refinancing its existing
credit facility and anticipates that the refinancing will occur in
the near future.
2023 Outlook
The Company is refining the previously guided ranges for its
full-year performance including adjusted sales guidance of
$965.0 million to $975.0 million, adjusted gross margin
guidance of approximately 21.5%, adjusted operating margin guidance
of approximately 2.0%, adjusted earnings per share guidance of
$(0.10) to $0.00, adjusted EBITDA guidance of approximately
5.0%, of adjusted sales and adjusted tax expense guidance of
$4.5 million - $5.0 million.
Matt Horvath, chief financial
officer, commented "Our third quarter financial performance
continued to build on our second quarter performance as we
delivered strong sequential margin expansion. Despite some top-line
headwinds related to the UAW strike in the fourth quarter, we are
expecting continued EPS expansion in the fourth quarter as we
continue to build on a strong foundation and drive earnings
momentum into 2024. We are refining our full-year 2023 guidance to
reflect our expectation of continued strong margin performance,
offset by expected revenue headwinds in the fourth quarter
including the expected impact of the UAW strike. While we remain
within the guidance set at the beginning of the year, our updated
midpoint adjusted EPS guidance has been adjusted by $0.05 to reflect approximately $0.05 of UAW-strike related headwinds."
Horvath concluded, "We remain focused on building a strong
foundation for continued earnings expansion as we capitalize on our
robust backlog and impressive portfolio of advanced technologies.
We are expecting continued strong growth next year and are issuing
preliminary 2024 guidance for at least 5% revenue growth, which
outpaces our weighted-average end-markets by at least 6.5%. Our
growth will be driven by the continued ramp-up and expansion of our
current North American and European MirrorEye programs, the launch
of our next and largest MirrorEye program in Europe and the significant continued ramp-up
of our Smart 2 tachograph program in Europe. 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 third quarter results can be accessed at
9:00 a.m. Eastern Time on Thursday,
November 2, 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 global conflict 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 (including the UAW strike which impacted
certain 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 and
margin, adjusted income (loss) before tax, adjusted net income,
adjusted earnings per share, adjusted EBITDA, adjusted EBITDA
margin, adjusted tax expense, 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 and margin, adjusted income (loss) before tax,
adjusted net income (loss), adjusted earnings per share, adjusted
EBITDA, adjusted EBITDA margin, adjusted tax expense, 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, income (loss) before tax, net loss, earnings per share, tax
expense, 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)
|
|
September
30,
2023
|
|
December 31,
2022
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
36,758
|
|
$
54,798
|
Accounts receivable,
less reserves of $956 and $962, respectively
|
|
177,202
|
|
158,155
|
Inventories,
net
|
|
183,177
|
|
152,580
|
Prepaid expenses and
other current assets
|
|
39,281
|
|
44,018
|
Total current
assets
|
|
436,418
|
|
409,551
|
Long-term
assets:
|
|
|
|
|
Property, plant and
equipment, net
|
|
106,788
|
|
104,643
|
Intangible assets,
net
|
|
45,180
|
|
45,508
|
Goodwill
|
|
33,789
|
|
34,225
|
Operating lease
right-of-use asset
|
|
11,136
|
|
13,762
|
Investments and other
long-term assets, net
|
|
45,463
|
|
44,416
|
Total long-term
assets
|
|
242,356
|
|
242,554
|
Total assets
|
|
$
678,774
|
|
$
652,105
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Revolving credit
facility
|
|
$
183,918
|
|
$
—
|
Current portion of
debt
|
|
2,055
|
|
1,450
|
Accounts
payable
|
|
131,094
|
|
110,202
|
Accrued expenses and
other current liabilities
|
|
64,847
|
|
66,040
|
Total current
liabilities
|
|
381,914
|
|
177,692
|
Long-term
liabilities:
|
|
|
|
|
Revolving credit
facility
|
|
—
|
|
167,802
|
Deferred income
taxes
|
|
7,407
|
|
8,498
|
Operating lease
long-term liability
|
|
8,054
|
|
10,594
|
Other long-term
liabilities
|
|
8,057
|
|
6,577
|
Total long-term
liabilities
|
|
23,518
|
|
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 27,548 and 27,341 shares outstanding at
September 30, 2023 and December 31, 2022, respectively,
with no stated value
|
|
—
|
|
—
|
Additional paid-in
capital
|
|
226,382
|
|
232,758
|
Common Shares held in
treasury, 1,418 and 1,625 shares at September 30, 2023 and
December 31, 2022, respectively, at cost
|
|
(43,408)
|
|
(50,366)
|
Retained
earnings
|
|
193,485
|
|
201,692
|
Accumulated other
comprehensive loss
|
|
(103,117)
|
|
(103,142)
|
Total shareholders'
equity
|
|
273,342
|
|
280,942
|
Total liabilities and
shareholders' equity
|
|
$
678,774
|
|
$
652,105
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
(in thousands,
except per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
238,164
|
|
$
226,757
|
|
$
746,303
|
|
$
668,751
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
185,689
|
|
177,317
|
|
590,538
|
|
539,304
|
Selling, general and
administrative
|
|
28,111
|
|
27,444
|
|
91,465
|
|
83,781
|
Design and
development
|
|
17,852
|
|
16,133
|
|
57,486
|
|
48,715
|
Operating income
(loss)
|
|
6,512
|
|
5,863
|
|
6,814
|
|
(3,049)
|
Interest expense,
net
|
|
3,313
|
|
1,845
|
|
9,179
|
|
4,848
|
Equity in loss
(earnings) of investee
|
|
141
|
|
(34)
|
|
641
|
|
424
|
Other (income) expense,
net
|
|
(1,383)
|
|
2,332
|
|
2,152
|
|
3,067
|
Income (loss) before
income taxes
|
|
4,441
|
|
1,720
|
|
(5,158)
|
|
(11,388)
|
Provision for income
taxes
|
|
2,270
|
|
989
|
|
3,049
|
|
2,895
|
Net income
(loss)
|
|
$
2,171
|
|
$
731
|
|
$
(8,207)
|
|
$
(14,283)
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.08
|
|
$
0.03
|
|
$
(0.30)
|
|
$
(0.52)
|
Diluted
|
|
$
0.08
|
|
$
0.03
|
|
$
(0.30)
|
|
$
(0.52)
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
27,484
|
|
27,281
|
|
27,428
|
|
27,250
|
Diluted
|
|
27,734
|
|
27,524
|
|
27,428
|
|
27,250
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Nine months ended
September 30, (in thousands)
|
|
2023
|
|
2022
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net loss
|
|
$
(8,207)
|
|
$
(14,283)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used for)
operating activities:
|
|
|
|
|
Depreciation
|
|
19,800
|
|
20,183
|
Amortization,
including accretion and write-off of deferred financing
costs
|
|
6,077
|
|
6,187
|
Deferred income
taxes
|
|
(2,732)
|
|
(2,834)
|
Loss of equity method
investee
|
|
641
|
|
424
|
Gain on sale of fixed
assets
|
|
(861)
|
|
(95)
|
Share-based
compensation expense
|
|
2,272
|
|
4,421
|
Excess tax deficiency
related to share-based compensation expense
|
|
74
|
|
266
|
Gain on settlement of
net investment hedge
|
|
—
|
|
(3,716)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
|
(21,335)
|
|
(28,333)
|
Inventories,
net
|
|
(33,651)
|
|
(24,333)
|
Prepaid expenses and
other assets
|
|
7,473
|
|
(15,510)
|
Accounts
payable
|
|
23,322
|
|
18,366
|
Accrued expenses and
other liabilities
|
|
1,459
|
|
15,119
|
Net cash used for
operating activities
|
|
(5,668)
|
|
(24,138)
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Capital expenditures,
including intangibles
|
|
(28,584)
|
|
(22,877)
|
Proceeds from sale of
fixed assets
|
|
1,841
|
|
95
|
Proceeds from
settlement of net investment hedge
|
|
—
|
|
3,820
|
Investment in venture
capital fund, net
|
|
(200)
|
|
(700)
|
Net cash used for
investing activities
|
|
(26,943)
|
|
(19,662)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Revolving credit
facility borrowings
|
|
81,365
|
|
21,817
|
Revolving credit
facility payments
|
|
(64,568)
|
|
(18,000)
|
Proceeds from issuance
of debt
|
|
27,579
|
|
30,513
|
Repayments of
debt
|
|
(27,145)
|
|
(32,789)
|
Earn-out consideration
cash payment
|
|
—
|
|
(6,276)
|
Repurchase of Common
Shares to satisfy employee tax withholding
|
|
(1,697)
|
|
(760)
|
Net cash provided by
(used for) financing activities
|
|
15,534
|
|
(5,495)
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(963)
|
|
(3,915)
|
Net change in cash and
cash equivalents
|
|
(18,040)
|
|
(53,210)
|
Cash and cash
equivalents at beginning of period
|
|
54,798
|
|
85,547
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$
36,758
|
|
$
32,337
|
|
|
|
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
Cash paid for
interest, net
|
|
$
9,248
|
|
$
4,992
|
Cash paid for income
taxes, net
|
|
$
8,453
|
|
$
5,808
|
Regulation G
Non-GAAP Financial Measure Reconciliations
Reconciliation to US
GAAP
|
|
Exhibit 1 -
Reconciliation of Adjusted EPS
|
|
(USD in millions,
except EPS)
|
Q3
2023
|
|
Q3 2023
EPS
|
Net
Income
|
$
2.2
|
|
$
0.08
|
|
|
|
|
Add: After-Tax Business
Realignment Costs
|
1.0
|
|
0.04
|
Add: After-Tax
Brazilian Indirect Tax Credits, Net
|
(0.3)
|
|
(0.01)
|
Adjusted Net
Income
|
$
2.9
|
|
$
0.10
|
Exhibit 2 –
Reconciliation of Adjusted EBITDA
|
|
(USD in
millions)
|
Q4
2022
|
|
Q1
2023
|
|
Q2
2023
|
|
Q3
2023
|
Income (Loss) Before
Tax
|
$
0.7
|
|
$ (8.1)
|
|
$ (1.5)
|
|
$ 4.4
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
2.2
|
|
2.7
|
|
3.1
|
|
3.3
|
Depreciation and
amortization
|
8.2
|
|
8.3
|
|
8.4
|
|
8.5
|
EBITDA
|
$ 11.1
|
|
$
3.0
|
|
$
10.0
|
|
$
16.2
|
|
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
—
|
|
1.3
|
|
1.9
|
|
1.2
|
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
|
—
|
|
—
|
|
—
|
|
(0.5)
|
Adjusted
EBITDA
|
$ 11.1
|
|
$
3.6
|
|
$
11.9
|
|
$
17.0
|
Exhibit 3 – Adjusted
Gross Profit
|
|
(USD in
millions)
|
Q2
2023
|
|
Q3
2023
|
Gross
Profit
|
$
60.5
|
|
$
52.5
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
0.5
|
|
—
|
Adjusted Gross
Profit
|
$
60.9
|
|
$
52.5
|
Exhibit 4 - Adjusted
Operating Income (Loss)
|
|
(USD in
millions)
|
Q1
2023
|
|
Q2
2023
|
|
Q3
2023
|
Operating Income
(Loss)
|
$
(4.0)
|
|
$
4.3
|
|
$
6.5
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
1.3
|
|
1.9
|
|
1.2
|
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
|
—
|
|
—
|
|
(0.5)
|
Adjusted Operating
Income (Loss)
|
$
(3.4)
|
|
$
6.2
|
|
$
7.3
|
Exhibit 5 – Segment
Adjusted Operating Income
|
|
Reconciliation of
Control Devices Adjusted Operating Income
|
|
(USD in
millions)
|
Q3
2022
|
|
Q2
2023
|
|
Q3
2023
|
Control Devices
Operating Income
|
$
7.5
|
|
$
5.1
|
|
$
5.5
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
—
|
|
0.4
|
|
0.1
|
Control Devices
Adjusted Operating Income
|
$
7.5
|
|
$
5.5
|
|
$
5.6
|
Reconciliation of
Electronics Adjusted Operating Income
|
|
(USD in
millions)
|
Q3
2022
|
Q2
2023
|
|
Q3
2023
|
Electronics
Operating Income
|
$
5.4
|
$
7.4
|
|
$
7.6
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
—
|
1.3
|
|
1.1
|
Electronics Adjusted
Operating Income
|
$
5.4
|
$
8.8
|
|
$
8.7
|
Reconciliation of
Stoneridge Brazil Adjusted Operating Income
|
|
(USD in
millions)
|
Q3
2022
|
Q2
2023
|
|
Q3
2023
|
Stoneridge Brazil
Operating Income
|
$
0.9
|
$
0.9
|
|
$
1.2
|
|
|
|
|
|
Add: Pre-Tax Brazilian
Indirect Tax Credits, Net
|
0.0
|
—
|
|
(0.5)
|
Add: Pre-Tax Business
Realignment Costs
|
0.1
|
—
|
|
—
|
Stoneridge Brazil
Adjusted Operating Income
|
$
1.0
|
$
0.9
|
|
$
0.8
|
Exhibit 6 –
Reconciliation of Adjusted Sales
|
|
(USD in
millions)
|
Q3
2022
|
|
Q2
2023
|
|
Q3
2023
|
Sales
|
$
226.8
|
|
$
266.8
|
|
$
238.2
|
|
|
|
|
|
|
Less: Sales from Spot
Purchases Recoveries
|
(12.8)
|
|
(4.4)
|
|
(0.9)
|
Adjusted
Sales
|
$
214.0
|
|
$
262.4
|
|
$
237.2
|
Exhibit 7 –
Reconciliation of Electronics Adjusted Sales
|
|
(USD in
millions)
|
Q3
2022
|
|
Q2
2023
|
|
Q3
2023
|
Electronics
Sales
|
$
130.0
|
|
$
168.3
|
|
$
143.3
|
|
|
|
|
|
|
Less: Sales from Spot
Purchases Recoveries
|
(12.8)
|
|
(4.4)
|
|
(0.9)
|
Electronics Adjusted
Sales
|
$
117.2
|
|
$
163.9
|
|
$
142.4
|
Exhibit 8 –
Reconciliation of Adjusted Tax Rate
|
|
(USD in
millions)
|
Q3
2023
|
|
Tax
Rate
|
Income Before
Tax
|
$
4.4
|
|
|
|
|
|
|
Add: Pre-Tax Business
Realignment Costs
|
1.2
|
|
|
Add: Pre-Tax Brazilian
Indirect Tax Credits, Net
|
(0.5)
|
|
|
Adjusted Income
Before Tax
|
$
5.2
|
|
|
|
|
|
|
Income Tax
Expense
|
2.3
|
|
51.1 %
|
|
|
|
|
Add: Tax Impact from
Pre-Tax Adjustments
|
-
|
|
|
|
|
|
|
Adjusted Income Tax
Expense
|
$
2.3
|
|
44.8 %
|
Exhibit 9 –
Reconciliation of Compliance Leverage Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA for Compliance Calculation
|
|
|
(USD in
millions)
|
|
Q4
2022
|
|
Q1
2023
|
|
Q2
2023
|
|
Q3
2023
|
Income (Loss) Before
Tax
|
|
$
0.7
|
|
$
(8.1)
|
|
$
(1.5)
|
|
$
4.4
|
Interest Expense,
net
|
|
2.2
|
|
2.7
|
|
3.1
|
|
3.3
|
Depreciation and
Amortization
|
|
8.2
|
|
8.3
|
|
8.4
|
|
8.5
|
EBITDA
|
|
$
11.1
|
|
$
3.0
|
|
$
10.0
|
|
$
16.2
|
|
|
|
|
|
|
|
|
|
Compliance
adjustments:
|
|
|
|
|
|
|
|
|
Add: Adjustments from
Foreign Currency Impact
|
|
2.8
|
|
1.4
|
|
3.1
|
|
0.4
|
Add: Extraordinary,
Non-recurring or Unusual items
|
|
0.1
|
|
0.2
|
|
—
|
|
0.5
|
Add: Cash Restructuring
Charges
|
|
0.2
|
|
1.4
|
|
0.5
|
|
0.1
|
Add: Adjustment to
Autotech Investments
|
|
0.4
|
|
0.2
|
|
0.3
|
|
0.1
|
Adjusted EBITDA
(Compliance)
|
|
$
14.6
|
|
$
6.1
|
|
$
13.9
|
|
$
17.4
|
|
|
|
|
|
|
|
|
|
Adjusted TTM EBITDA
(Compliance)
|
|
|
|
|
|
|
|
$
52.1
|
|
Reconciliation of
Adjusted Cash for Compliance Calculation
|
(USD in
millions)
|
|
Q3
2023
|
Total Cash and Cash
Equivalents
|
|
|
|
|
|
|
|
$
36.8
|
|
|
Less: 35% Cash Foreign
Locations
|
|
|
|
|
|
|
|
(11.5)
|
Total Adjusted Cash
(Compliance)
|
|
|
|
|
|
|
|
$
25.2
|
|
Reconciliation of
Adjusted Debt for Compliance Calculation
|
(USD in
millions)
|
|
Q3
2023
|
Total
Debt
|
|
|
|
|
|
|
|
$ 186.0
|
|
|
Outstanding Letters of
Credit
|
|
|
|
|
|
|
|
1.6
|
Total Adjusted Debt
(Compliance)
|
|
|
|
|
|
|
|
$ 187.6
|
|
|
Adjusted Net Debt
(Compliance)
|
|
|
|
|
|
|
|
$ 162.3
|
Compliance Leverage
Ratio (Net Debt / TTM EBITDA)
|
|
|
|
|
|
|
|
3.11x
|
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SOURCE Stoneridge, Inc.