NOVI, Mich., Oct. 13, 2021 /PRNewswire/ -- Stoneridge, Inc.
(NYSE: SRI), a leading designer and manufacturer of highly
engineered electrical and electronic vehicle systems, today
provided a business update and preliminary third quarter results
reflecting continued supply chain-related challenges that resulted
in reduced production schedules by the Company's OEM customers and
incremental material and logistics costs.
On September 16, 2021, IHS Markit
released its latest forecast for worldwide automotive production.
Further, on October 1, 2021, LMC
released its latest forecast for worldwide commercial vehicle
production. Based on these updated forecasts, Stoneridge's weighted
average end-markets for the third quarter 2021 declined by
approximately 13.0% relative to third quarter forecasted production
assumptions provided during the Company's second quarter 2021
earnings call.
"The overall transportation industry continues to be challenged
by the global pandemic and its aftermath. Recent production
shutdowns and altered production forecasts at our automotive and
commercial vehicle OEM customers, often on short notice, have
created volatility and had a negative impact on our financial
results for the third quarter," commented Jon DeGaynor, president and chief executive
officer.
For the third quarter 2021, the Company announced that
preliminary sales are expected to be approximately $180.0 million. Third quarter 2021 operating loss
is expected to be between ($9.2)
million to ($8.2) million, or
approximately (5.1%) to (4.6%) of sales, and adjusted operating
loss is expected to be between ($7.2)
million to ($6.2) million, or
approximately (4.0%) to (3.5%) of sales. Third quarter 2021
loss per share ("EPS") is expected to be between ($0.40) to ($0.34)
and adjusted EPS is expected to be between ($0.29) to ($0.23).
The exhibits attached hereto containing Regulation G
reconciliations provide additional detail on the normalizing
adjustments.
"While our top-line performance has declined less than overall
market performance, we continue to face incremental material
costs, logistics expenses and component shortages due to the
unprecedented global supply chain disruptions and production
volatility. In response, we have built on the cost
mitigation processes we put in place during the second quarter,
while at the same time instituting price increases where possible.
Further, we have engaged in broader commercial discussions with our
customers and suppliers to further mitigate these elevated costs
and strengthen our future partnerships. Although these negotiations
are ongoing, we are beginning to realize the financial benefits of
these discussions and will continue to work closely with our
customers and suppliers to navigate these headwinds both now and as
we move forward," concluded Mr. DeGaynor.
Due to the continued market volatility expected for the
remainder of 2021, the Company will provide an update regarding its
previously provided full-year 2021 financial guidance during its
third quarter earnings 2021 conference call.
Third Quarter 2021 Earnings Conference Call
The
Company will webcast its third quarter 2021 earnings conference
call live on Thursday, October 28,
2021, at 9:00 a.m. ET with
president and chief executive officer, Jon
DeGaynor, and chief financial officer, Matt Horvath. The webcast can be accessed on the
Webcasts & Presentations page of the Investors section of the
Company's website,
www.stoneridge.com.
About Stoneridge, Inc.
Stoneridge, Inc., headquartered
in Novi, Michigan, is a leading
designer and manufacturer of highly engineered electrical and
electronic components, modules and systems principally for the
automotive, commercial vehicle, off-highway, motorcycle 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 impact of COVID-19, or other future pandemics, on the
global economy, and on our customers, suppliers, employees,
business and cash flows;
- 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,
motorcycle or agricultural vehicle production;
- competitive market conditions and resulting effects on sales
and pricing;
- our ability to manage foreign currency fluctuations;
- our ability to achieve cost reductions that offset or exceed
customer-mandated selling price reductions;
- 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 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;
- 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") of our
10-K filed with the SEC.
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 which 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
preliminary non-GAAP financial measures for the third quarter of
2021 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 preliminary 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 preliminary adjusted operating loss and margin, preliminary
adjusted net loss or preliminary adjusted loss per share 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.
Preliminary adjusted operating loss and margin, preliminary
adjusted net loss and preliminary adjusted loss per share should
not be considered in isolation or as a substitute for operating
loss, net loss, loss per share or other income statement or cash
flow statement data prepared in accordance with
GAAP.
Regulation G Non-GAAP Financial Measure Reconciliations
Reconciliation to US GAAP
Exhibit 1 -
Preliminary Adjusted Operating Loss
|
|
Reconciliation of
Preliminary Adjusted Operating Loss (1)
|
(USD in
millions)
|
Q3
2021
|
Operating
Loss
|
$
(8.7)
|
|
|
Add: Pre-Tax Change
in Fair Value of Earn-Out (Stoneridge Brazil)
|
0.2
|
Add: Pre-Tax
Restructuring and Business Realignment Costs
|
1.8
|
Adjusted Operating
Loss
|
$
(6.7)
|
|
(1)
Prepared at the mid-point of the Company's preliminary
third-quarter financial results range
|
Exhibit 2 –
Preliminary Adjusted EPS
|
|
Reconciliation of
Q3 2021 Preliminary Adjusted EPS(1)
|
(USD in
millions)
|
Q3
2021
|
Q3 2021
EPS
|
Net
Loss
|
$
(10.1)
|
$
(0.37)
|
|
|
|
Add: After-Tax Change
in Fair Value of Earn-Out (Stoneridge Brazil)
|
0.2
|
0.01
|
Add: After-Tax
Restructuring and Business Realignment Costs
|
1.5
|
0.06
|
Add: Adjustment to
Tax Impact Related to Sale of Canton Facility
|
1.4
|
0.05
|
Adjusted Net
Loss
|
$
(7.0)
|
$
(0.26)
|
|
(1)
Prepared at the mid-point of the Company's preliminary
third-quarter financial results range
|
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SOURCE Stoneridge, Inc.