UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| ITEM 2.02 | Results of Operations and Financial Condition. |
On November 2, 2022, Stoneridge, Inc. (the “Company”) issued a press release announcing its results for the third quarter ended September 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1. On November 3, 2022, members of the Company’s management will hold a third quarter 2022 earnings conference call to discuss the Company’s financial results and the presentation attached hereto as Exhibit 99.2, will accompany management’s comments.
The press release and earnings conference call presentation contain certain non-GAAP financial measures, including Adjusted Sales, Adjusted Gross Profit and Margin, Adjusted Operating Income (Loss) and Margin, Adjusted Income Before Tax, Adjusted Net Income (Loss), Adjusted Earnings (Loss) per Share (“Adjusted EPS”), Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Income Tax Expense and Adjusted Tax Rate (collectively, the “Non-GAAP Financial Measures”). Management believes that the presentation of the Non-GAAP Financial Measures used in the press release and earnings conference call presentation are useful to both management and investors in their analysis of the Company’s financial position, results of operations and expected results of operations because the Non-GAAP Financial Measures facilitate a period to period comparison of operating results by excluding significant unusual, non-recurring items in 2022 and 2021. For 2022, these items relate to the after-tax and pre-tax Brazilian indirect tax credits, net, after-tax and pre-tax business realignment costs, sales from spot purchase recoveries and FX impact. For 2021, these items relate to the pre-tax gain from disposal of Soot Sensor Business, pre-tax sale of Soot Sensor product inventory, sales from disposed Soot Sensor Business, pre-tax operating gain from disposed Soot Sensor Business, pre-tax change in fair value of the earn-out consideration related to the acquisition of the remaining 26% minority interest in Stoneridge Brazil, pre-tax Stoneridge Brazil TSA and monetary correction, pre-tax gain from disposal of MSIL joint venture, pre-tax business realignment costs and pre-tax restructuring costs. These non-GAAP financial measures, however, should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures used by the Company may not be comparable to non-GAAP financial measures used by other companies. Adjusted Sales, Adjusted Gross Profit and Margin, Adjusted Operating Income (Loss) and Margin, Adjusted Income Before Tax, Adjusted Net Income (Loss), Adjusted EPS, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Income Tax Expense and Adjusted Tax Rate should not be considered a substitute for Sales, Gross Profit, Operating Income (Loss), Income Before Tax, Net Income (Loss), Earnings (Loss) per Share, Income Tax Expense or Tax Rate prepared in accordance with GAAP.
| ITEM 7.01 | Regulation FD Disclosure. |
The information set forth in Item 2.02 above is hereby incorporated herein by reference.
The information in this report, including the press release and the earnings conference call presentation furnished as Exhibits 99.1 and 99.2 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. In addition, the exhibits furnished herewith contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibits.
| ITEM 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit No. | Description | |
| 99.1 | Press release dated November 2, 2022, announcing results for the third quarter ended September 30, 2022 | |
| 99.2 | Third quarter 2022 results earnings conference call presentation materials, dated November 3, 2022 | |
| 104 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Stoneridge, Inc. | |
| Date: November 2, 2022 | /s/ Matthew R. Horvath |
|
Matthew R. Horvath Chief Financial Officer and Treasurer (Principal Financial Officer) |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Stoneridge Reports Third-Quarter 2022 Results
THIRD-QUARTER PERFORMANCE REFLECTS MARGIN EXPANSION DRIVEN BY STRONG OPERATING PERFORMANCE AND CONTINUED REVENUE GROWTH
SEQUENTIAL GROWTH EXPECTED TO CONTINUE IN Q4 PROVIDING STRONG RUN-RATE INTO 2023
2022 Third-Quarter Results
| · | Sales of $226.8 million |
| · | Adjusted sales of $214.0 million (4.0% growth over Q2 2022) |
| · | Gross profit of $49.4 million (23.1% of adjusted sales, a 440 basis point improvement over Q2 2022) |
| · | Operating income of $5.9 million |
| · | Adjusted operating income of $6.1 million (2.9% of adjusted sales, a 600 basis point improvement over Q2 2022) |
| · | Adjusted EBITDA of $12.1 million (5.6% of adjusted sales, a 450 basis point improvement over Q2 2022) |
| · | Earnings per share (“EPS”) of $0.03 |
| · | Adjusted EPS of $0.03 ($0.32 adjusted EPS improvement over Q2 2022) |
2022 Guidance Update
| · | Fourth quarter adjusted revenue guidance of $234 – $244 million (midpoint of $239 million or 11.5% growth vs. Q3) |
| · | Fourth quarter adjusted EPS guidance of $0.21 – $0.27 (midpoint of $0.24 adjusted EPS or $0.21 growth vs. Q3) |
| · | Updated full-year 2022 guidance |
| o | Reducing full-year midpoint adjusted revenue guidance by $10 million to $855 million ($850 - $860 million) to reflect improved, but continued material constraints and current end-market demand |
| o | Maintaining full-year adjusted gross margin guidance of 21.25% to 21.75% to reflect expectation of continued strong operating performance and our continued ability to offset a significant portion of incremental material costs as necessary |
| o | Reducing full-year adjusted operating margin guidance to 0.75% to 1.0% to reflect the re-timing of expected customer engineering recoveries of approximately $2.4 million (~$0.08 adjusted EPS) from Q4 2022 to 2023 offset by continued control of operating expenses |
| o | Reducing full-year adjusted EBITDA margin guidance to 4.5% to 4.75% driven primarily by the unfavorable, non-cash impact of foreign currency on non-operating income / expenses driven primarily by the revaluation of intercompany balances |
| o | Updating full-year adjusted EPS guidance to ($0.32) to ($0.26) (midpoint adjusted EPS of ($0.29)) |
NOVI, Mich. – November 2, 2022 – Stoneridge, Inc. (NYSE: SRI) today announced financial results for the third quarter ended September 30, 2022, with sales of $226.8 million and earnings per share of $0.03. Adjusted sales were $214.0 million in the third quarter which represents 4.0% growth over second quarter adjusted sales, and adjusted EPS was $0.03 which represents $0.32 adjusted EPS growth over the second quarter. Sales were adjusted to normalize the impact of $12.8 million of electronic component spot buys recovered from customers within the quarter. The exhibits attached hereto provide reconciliation detail on this and all other normalizing adjustments of Non-GAAP financial measures used in this press release.
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For the third quarter of 2022, Stoneridge reported gross profit of $49.4 million (23.1% of adjusted sales, a 440 basis point improvement over the second quarter). Operating income was $5.9 million and adjusted operating income was $6.1 million (2.9% of adjusted sales, a 600 basis point improvement over the second quarter). Adjusted EBITDA was $12.1 million (5.6% of adjusted sales, a 450 basis point improvement over the second quarter).
Jon DeGaynor, president and chief executive officer, commented, “In the third quarter, we continued to see the impact of new program ramp-up and expansion, supported by improved material availability, driving revenue growth and significantly improved earnings performance. We continued to effectively offset incremental costs through pricing and supply chain actions recognizing significant margin improvement during the quarter. As a result of our focus on continuous operating improvement and effective cost control, each of our segments drove sequential revenue growth and margin expansion during the quarter. Although we anticipate continued material cost pressure and volatility in production schedules, we expect to continue to drive sequential revenue growth and margin expansion for the remainder of the year.”
DeGaynor continued, “As we continue to navigate the current macroeconomic environment, we also remain focused on the initiatives that will drive long-term, profitable growth. Take rates for our first OEM MirrorEye program improved slightly to approximately 40% however production continues to be limited by certain material constraints. That said, we have taken actions to eliminate those constraints and expect continued improvement in our MirrorEye production capability for the remainder of the year. In 2023, we expect to be able to meet a continually expanding take-rate of over 50% for our first program as well as support the additional programs that are launching next year. In addition, Control Devices remains focused on executing program launches and the ramp-up of existing programs, particularly in our global actuation business. New program launches and the ramp-up of existing programs are expected to drive 2023 growth that will outpace our underlying end-markets.”
Third Quarter in Review
Control Devices sales totaled $89.4 million, an increase of 5.4% relative to adjusted sales excluding the impact of the divested business in the third quarter of 2021, primarily due to higher sales volumes in the North American passenger vehicle end-market, including new program launches, the ramp-up of existing programs and customer price increases recognized in the third quarter of 2022. Third quarter adjusted operating margin was 8.4%, an increase of 490 basis points relative to the third quarter of 2021, primarily due to lower material costs as a result of customer negotiated price increases and cost recoveries and lower overhead spend.
Control Devices sales increased by 5.1% compared to second quarter 2022 sales, primarily due to higher customer production volumes, despite continued volatility, and incremental revenue on actuation program ramp-ups. Third quarter operating margin increased 360 basis points relative to the second quarter of 2022, primarily due lower material costs driven by favorable sales mix as well as lower SG&A costs.
Electronics adjusted sales totaled $117.2 million, an increase of 39.7% relative to sales in the third quarter of 2021, primarily due to higher sales volumes in the European and North American commercial vehicle and European off-highway end markets, customer price increases and the ramp-up of new program launches partially offset by an unfavorable foreign currency translation impact of $8.2 million. Third quarter adjusted operating margin was 4.6%, an increase of 1,060 basis points relative to the third quarter of 2021 primarily due to fixed cost leverage on incremental sales offset by an increase in material costs due to supply chain constraints.
Relative to the second quarter of 2022, Electronics adjusted sales increased 1.8%, primarily due to higher sales volumes in the commercial vehicle end-markets, expansion of recently launched programs and pricing actions offset by an unfavorable foreign currency impact of $3.3 million. Excluding the unfavorable impact of foreign currency, sales increased by 4.7% versus the second quarter of 2022. Third quarter operating margin increased 680 basis points relative to the second quarter of 2022, primarily due to lower material costs and reduced SG&A costs offset by an unfavorable foreign currency impact of approximately $0.2 million.
Stoneridge Brazil sales were $13.8 million, a decrease of 16.2% relative to sales in the third quarter of 2021, primarily due to lower sales in most product lines offset by favorable foreign currency translation of $1.8 million. Third quarter adjusted operating margin was consistent with the third quarter of 2021, primarily due to favorable sales mix from higher monitoring services.
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Relative to the second quarter of 2022, Stoneridge Brazil sales increased by $0.5 million primarily due to higher sales in OEM products partially offset by the unfavorable foreign currency impact of $0.9 million. Stoneridge Brazil adjusted operating margin increased by 400 basis points relative to the second quarter of 2022 primarily due to lower SG&A spend.
Cash and Debt Balances
As of September 30, 2022, Stoneridge had cash and cash equivalents balances totaling $32.3 million. Total debt as of September 30, 2022 was $168.5 million. The 2022 amendment to the Company’s $300.0 million credit facility provides for a covenant relief period through the end of the first quarter of 2023 at which point covenants revert to pre-amendment levels. This amendment to the credit facility waives the maximum leverage ratio covenant for the first three quarters of 2022 and modifies the fourth quarter of 2022 covenant to include a maximum 4.75x leverage ratio. This amendment also modified the minimum interest coverage covenant for each quarter of 2022. The Company expects to remain in compliance with the amended existing covenants through the covenant relief period.
2022 Outlook
Matt Horvath, chief financial officer, commented, “We are reducing the midpoint of our 2022 adjusted revenue guidance by $10 million to $855 million to reflect improved, but continued material constraints and current end-market demand. Based on our expected contribution margins of 25% to 30%, this reduction would result in reduced adjusted EPS expectations of approximately $0.07. Our guidance also includes consideration for the re-timing of certain customer engineering recoveries of approximately $2.4 million, or approximately $0.08 adjusted EPS, which we now expect in 2023 rather than the fourth quarter of 2022. We expect to partially offset these reductions through a continued focus on a lean, efficient cost structure, continuous improvement in our manufacturing facilities and price recoveries aimed at offsetting incremental material costs. As a result, we are reducing our full-year adjusted EPS guidance by $0.09 to a midpoint of ($0.29).”
Horvath concluded, “Our updated full-year midpoint guidance implies fourth quarter revenue of approximately $239 million or growth of over 11% from the third quarter and adjusted EPS of $0.24, an increase of $0.21 quarter-to-quarter, creating a strong runway for continued growth and earnings expansion in 2023. We are expecting continued end-market growth in 2023 as current forecasts are suggesting our weighted average end-markets will grow by approximately 4% next year. We expect to outperform our underlying end-markets as we continue to reduce material constraints, launch new programs and ramp-up recently launched programs. We remain well positioned to drive long-term profitable growth.”
The Company announced updated full-year sales guidance of $850.0 million to $860.0 million. Full-year adjusted gross margin guidance remains at 21.25% to 21.75%. Adjusted operating margin guidance was updated to 0.75% to 1.0% and adjusted EBITDA margin guidance was updated to 4.5% to 4.75% to reflect the non-cash unfavorable impact of foreign currency on non-operating income/expenses. Full-year tax expense guidance was updated to $5.0 million to $6.0 million. Adjusted EPS guidance was updated to ($0.32) to ($0.26).
Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2022 third-quarter results can be accessed at 9:00 a.m. Eastern Time on Thursday, November 3, 2022, 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.
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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; |
| · | 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 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 or agricultural vehicle production; |
| · | competitive market conditions and resulting effects on sales and pricing; |
| · | our ability to manage foreign currency fluctuations; |
| · | 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 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 2021 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 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 2022 and 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.
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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 income and margin, adjusted operating income (loss) and margin, adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA, adjusted EBITDA margin, adjusted income before tax, adjusted income tax expense and adjusted tax rate 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 income and margin, adjusted operating income (loss) and margin, adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA, adjusted EBITDA margin, adjusted income before tax and adjusted tax rate should not be considered in isolation or as a substitute for sales, gross profit, operating income (loss), net income (loss), earnings per share, income before tax, income tax expense, tax rate, cash provided by operating activities or other income statement or cash flow statement data prepared in accordance with GAAP.
For more information, contact Kelly K. Harvey, Director Investor Relations ([email protected]).
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| CONDENSED CONSOLIDATED BALANCE SHEETS |
| September 30, | December 31, | |||||||
| (in thousands) | 2022 | 2021 | ||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 32,337 | $ | 85,547 | ||||
| Accounts receivable, less reserves of $1,841 and $1,443, respectively | 166,861 | 150,388 | ||||||
| Inventories, net | 150,704 | 138,115 | ||||||
| Prepaid expenses and other current assets | 48,629 | 36,774 | ||||||
| Total current assets | 398,531 | 410,824 | ||||||
| Long-term assets: | ||||||||
| Property, plant and equipment, net | 101,897 | 107,901 | ||||||
| Intangible assets, net | 43,116 | 49,863 | ||||||
| Goodwill | 31,347 | 36,387 | ||||||
| Operating lease right-of-use asset | 13,924 | 18,343 | ||||||
| Investments and other long-term assets, net | 44,241 | 42,081 | ||||||
| Total long-term assets | 234,525 | 254,575 | ||||||
| Total assets | $ | 633,056 | $ | 665,399 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of debt | $ | 2,826 | $ | 5,248 | ||||
| Accounts payable | 106,297 | 97,679 | ||||||
| Accrued expenses and other current liabilities | 68,827 | 70,139 | ||||||
| Total current liabilities | 177,950 | 173,066 | ||||||
| Long-term liabilities: | ||||||||
| Revolving credit facility | 165,695 | 163,957 | ||||||
| Deferred income taxes | 8,324 | 10,706 | ||||||
| Operating lease long-term liability | 10,903 | 14,912 | ||||||
| Other long-term liabilities | 6,020 | 6,808 | ||||||
| Total long-term liabilities | 190,942 | 196,383 | ||||||
| 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 27,327 and 27,191 shares outstanding at September 30, 2022 and December 31, 2021, respectively, with no stated value | - | - | ||||||
| Additional paid-in capital | 231,675 | 232,490 | ||||||
| Common Shares held in treasury, 1,639 and 1,775 shares at September 30, 2022 and December 31, 2021, respectively, at cost | (50,772 | ) | (55,264 | ) | ||||
| Retained earnings | 201,465 | 215,748 | ||||||
| Accumulated other comprehensive loss | (118,204 | ) | (97,024 | ) | ||||
| Total shareholders' equity | 264,164 | 295,950 | ||||||
| Total liabilities and shareholders' equity | $ | 633,056 | $ | 665,399 | ||||
6
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net sales | $ | 226,757 | $ | 181,680 | $ | 668,751 | $ | 566,809 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 177,317 | 145,680 | 539,304 | 441,882 | ||||||||||||
| Selling, general and administrative | 27,444 | 28,481 | 83,781 | 89,237 | ||||||||||||
| Gain on sale of Canton Facility, net | - | - | - | (30,718 | ) | |||||||||||
| Design and development | 16,133 | 16,447 | 48,715 | 46,593 | ||||||||||||
| Operating income (loss) | 5,863 | (8,928 | ) | (3,049 | ) | 19,815 | ||||||||||
| Interest expense, net | 1,845 | 1,447 | 4,848 | 5,073 | ||||||||||||
| Equity in (earnings) loss of investee | (34 | ) | (584 | ) | 424 | (1,694 | ) | |||||||||
| Other expense, net | 2,332 | 41 | 3,067 | 127 | ||||||||||||
| Income (loss) before income taxes | 1,720 | (9,832 | ) | (11,388 | ) | 16,309 | ||||||||||
| Provision for income taxes | 989 | 526 | 2,895 | 6,739 | ||||||||||||
| Net income (loss) | $ | 731 | $ | (10,358 | ) | $ | (14,283 | ) | $ | 9,570 | ||||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | 0.03 | $ | (0.38 | ) | $ | (0.52 | ) | $ | 0.35 | ||||||
| Diluted | $ | 0.03 | $ | (0.38 | ) | $ | (0.52 | ) | $ | 0.35 | ||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 27,281 | 27,147 | 27,250 | 27,100 | ||||||||||||
| Diluted | 27,524 | 27,147 | 27,250 | 27,432 | ||||||||||||
7
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| Nine months ended September 30, (in thousands) | 2022 | 2021 | ||||||
| OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (14,283 | ) | $ | 9,570 | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||
| Depreciation | 20,183 | 20,831 | ||||||
| Amortization, including accretion and write-off of deferred financing costs | 6,187 | 4,767 | ||||||
| Deferred income taxes | (2,834 | ) | 916 | |||||
| Loss (earnings) of equity method investee | 424 | (1,694 | ) | |||||
| Gain on sale of fixed assets | (95 | ) | (190 | ) | ||||
| Share-based compensation expense | 4,421 | 4,685 | ||||||
| Excess tax deficiency (benefit) related to share-based compensation expense | 266 | (295 | ) | |||||
| Gain on settlement of net investment hedge | (3,716 | ) | - | |||||
| Gain on sale of Canton Facility, net | - | (30,718 | ) | |||||
| Gain on disposal of business, net | - | (740 | ) | |||||
| Change in fair value of earn-out contingent consideration | - | 1,453 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (28,333 | ) | (2,746 | ) | ||||
| Inventories, net | (24,333 | ) | (36,580 | ) | ||||
| Prepaid expenses and other assets | (15,510 | ) | (11,144 | ) | ||||
| Accounts payable | 18,366 | 20,657 | ||||||
| Accrued expenses and other liabilities | 15,119 | 1,539 | ||||||
| Net cash used for operating activities | (24,138 | ) | (19,689 | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures, including intangibles | (22,877 | ) | (21,576 | ) | ||||
| Proceeds from sale of fixed assets | 95 | 656 | ||||||
| Proceeds from settlement of net investment hedge | 3,820 | - | ||||||
| Proceeds from disposal of business, net | - | 1,050 | ||||||
| Proceeds from sale of Canton Facility, net | - | 35,167 | ||||||
| Investment in venture capital fund, net | (700 | ) | (2,349 | ) | ||||
| Net cash (used for) provided by investing activities | (19,662 | ) | 12,948 | |||||
| FINANCING ACTIVITIES: | ||||||||
| Revolving credit facility borrowings | 21,817 | 34,000 | ||||||
| Revolving credit facility payments | (18,000 | ) | (40,000 | ) | ||||
| Proceeds from issuance of debt | 30,513 | 30,292 | ||||||
| Repayments of debt | (32,789 | ) | (36,286 | ) | ||||
| Earn-out consideration cash payment | (6,276 | ) | - | |||||
| Repurchase of Common Shares to satisfy employee tax withholding | (760 | ) | (2,658 | ) | ||||
| Net cash provided by (used for) financing activities | (5,495 | ) | (14,652 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (3,915 | ) | (2,525 | ) | ||||
| Net change in cash and cash equivalents | (53,210 | ) | (23,918 | ) | ||||
| Cash and cash equivalents at beginning of period | 85,547 | 73,919 | ||||||
| Cash and cash equivalents at end of period | $ | 32,337 | $ | 50,001 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest, net | $ | 4,992 | $ | 4,962 | ||||
| Cash paid for income taxes, net | $ | 5,808 | $ | 7,296 | ||||
8
Regulation G Non-GAAP Financial Measure Reconciliations
Reconciliation to US GAAP
Exhibit 1 - Adjusted EPS
Reconciliation of Q3 2022 Adjusted EPS
| (USD in millions) | Q3 2022 | Q3 2022 EPS | ||||||
| Net Income | $ | 0.7 | $ | 0.03 | ||||
| Add: After-Tax Business Realignment Costs | 0.2 | 0.01 | ||||||
| Adjusted Net Income | $ | 0.9 | $ | 0.03 | ||||
Exhibit 2 – Adjusted EBITDA
Reconciliation of Adjusted EBITDA
| (USD in millions) | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | |||||||||||||||
| Income (Loss) Before Tax | $ | (9.8 | ) | $ | (3.9 | ) | $ | (6.2 | ) | $ | (6.9 | ) | $ | 1.7 | ||||||
| Interest expense, net | 1.4 | 0.1 | 1.8 | 1.2 | 1.8 | |||||||||||||||
| Depreciation and amortization | 8.2 | 8.7 | 8.7 | 8.5 | 8.3 | |||||||||||||||
| EBITDA | $ | (0.2 | ) | $ | 5.0 | $ | 4.3 | $ | 2.8 | $ | 11.8 | |||||||||
| Add: Pre-Tax Change in Fair Value of Earn-Out (Stoneridge Brazil) | 0.2 | 0.6 | - | - | - | |||||||||||||||
| Less: Pre-Tax TSA and Monetary Correction (Stoneridge Brazil) | - | (1.1 | ) | - | - | - | ||||||||||||||
| Less: Pre-Tax Gain from Disposal of MSIL Joint Venture | - | (1.8 | ) | - | - | - | ||||||||||||||
| Add: Pre-Tax Restructuring Costs | 0.7 | 0.1 | - | - | - | |||||||||||||||
| Add: Pre-Tax Business Realignment Costs | 1.1 | 0.0 | 0.0 | - | 0.3 | |||||||||||||||
| Add: Pre-Tax Brazilian Indirect Tax Credits, Net | - | - | - | (0.6 | ) | - | ||||||||||||||
| Less: Pre-Tax Gain from Disposal of Soot Sensor Business | - | (0.4 | ) | - | - | - | ||||||||||||||
| Less: Pre-Tax Sale of Soot Sensor Product Inventory | - | 0.1 | - | - | - | |||||||||||||||
| Adjusted EBITDA | $ | 1.8 | $ | 2.4 | $ | 4.3 | $ | 2.3 | $ | 12.1 | ||||||||||
Exhibit 3 – Adjusted Gross Profit
Reconciliation of Adjusted Gross Profit
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Gross Profit | $ | 36.0 | $ | 38.6 | $ | 49.4 | ||||||
| Add: Pre-Tax Restructuring Costs | 0.6 | - | - | |||||||||
| Adjusted Gross Profit | $ | 36.6 | $ | 38.6 | $ | 49.4 | ||||||
Exhibit 4 - Adjusted Operating Income
Reconciliation of Adjusted Operating Income (Loss)
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Operating Income (Loss) | $ | (8.9 | ) | $ | (5.9 | ) | $ | 5.9 | ||||
| Add: Pre-Tax Change in Fair Value of Earn-Out (Stoneridge Brazil) | 0.2 | - | - | |||||||||
| Add: Pre-Tax Restructuring Costs | 0.7 | - | - | |||||||||
| Add: Pre-Tax Business Realignment Costs | 1.1 | - | 0.3 | |||||||||
| Add: Pre-Tax Brazilian Indirect Tax Credits, Net | - | (0.6 | ) | - | ||||||||
| Adjusted Operating Income (Loss) | $ | (6.9 | ) | $ | (6.5 | ) | $ | 6.1 | ||||
9
Exhibit 5 – Segment Adjusted Operating Income
Reconciliation of Control Devices Adjusted Operating Income
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Control Devices Operating Income | $ | 2.9 | $ | 4.1 | $ | 7.5 | ||||||
| Add: Pre-Tax Restructuring Costs | 0.6 | - | - | |||||||||
| Control Devices Adjusted Operating Income | $ | 3.5 | $ | 4.1 | $ | 7.5 | ||||||
Reconciliation of Electronics Adjusted Operating Income (Loss)
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Electronics Operating Income (Loss) | $ | (5.1 | ) | $ | (2.5 | ) | $ | 5.4 | ||||
| Add: Pre-Tax Restructuring Costs | 0.1 | - | - | |||||||||
| Electronics Adjusted Operating Income (Loss) | $ | (5.0 | ) | $ | (2.5 | ) | $ | 5.4 | ||||
Reconciliation of Stoneridge Brazil Adjusted Operating Income
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Stoneridge Brazil Operating Income | $ | 0.9 | $ | 1.0 | $ | 0.9 | ||||||
| Add: Pre-Tax Change in Fair Value of Earn-Out (Stoneridge Brazil) | 0.2 | - | - | |||||||||
| Add: Pre-Tax Business Realignment Costs | - | - | 0.1 | |||||||||
| Add: Pre-Tax Brazilian Indirect Tax Credits, Net | - | (0.6 | ) | - | ||||||||
| Stoneridge Brazil Adjusted Operating Income | $ | 1.1 | $ | 0.4 | $ | 1.0 | ||||||
Exhibit 6 – Adjusted Sales
Reconciliation of Adjusted Sales
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Sales | $ | 181.7 | $ | 220.9 | $ | 226.8 | ||||||
| Less: Sales from Spot Purchase Recoveries | - | (15.3 | ) | (12.8 | ) | |||||||
| Adjusted Sales | $ | 181.7 | $ | 205.7 | $ | 214.0 | ||||||
Exhibit 7 – Control Devices Adjusted Sales
Reconciliation of Control Devices Adjusted Sales Excluding Disposed Soot Sensor Business
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Control Devices Sales | $ | 88.0 | $ | 85.0 | $ | 89.4 | ||||||
| Less: Sales from Disposed Soot Sensor Business | (3.2 | ) | - | - | ||||||||
| Control Devices Adjusted Sales Excluding Disposed Soot Sensor Business | $ | 84.8 | $ | 85.0 | $ | 89.4 | ||||||
Exhibit 8 – Control Devices Adjusted Operating Income Excluding Disposed Soot Sensor Business
Reconciliation of Control Devices Adjusted Operating Income Excluding Disposed Soot Sensor Business
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Control Devices Adjusted Operating Income | $ | 3.5 | $ | 4.1 | $ | 7.5 | ||||||
| Less: Pre-Tax Operating Gain from Disposed Soot Sensor Business | (0.5 | ) | - | - | ||||||||
| Control Devices Adjusted Operating Income Excluding Disposed Soot Sensor Business | $ | 3.0 | $ | 4.1 | $ | 7.5 | ||||||
10
Exhibit 9 – Electronics Adjusted Sales
Reconciliation of Electronics Adjusted Sales
| (USD in millions) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Electronics Sales | $ | 83.9 | $ | 130.4 | $ | 130.0 | ||||||
| Less: Sales from Spot Purchase Recoveries | - | (15.3 | ) | (12.8 | ) | |||||||
| Electronics Adjusted Sales | $ | 83.9 | $ | 115.1 | $ | 117.2 | ||||||
Exhibit 10 – Adjusted Tax Rate
Reconciliation of Adjusted Tax Rate
| (USD in millions) | Q3 2022 | Tax Rate | ||||||
| Income Before Tax | $ | 1.7 | ||||||
| Add: Pre-Tax Business Realignment Costs | 0.3 | |||||||
| Adjusted Income Before Tax | $ | 2.0 | ||||||
| Income Tax Expense | 1.0 | 57.5 | % | |||||
| Add: Tax Impact from Pre-Tax Adjustments | 0.1 | |||||||
| Adjusted Income Tax Expense | $ | 1.1 | 53.4 | % | ||||
Exhibit 11 – Adjusted Q3 Results Excluding FX Impact
Reconciliation of Electronics Adjusted Sales Ex. FX Impact*
| (USD in millions) | Q3 2022 | |||
| Electronics Adjusted Sales | $ | 117.2 | ||
| Add: FX Impact | 3.3 | |||
| Electronics Adjusted Sales Ex. FX Impact | $ | 120.5 | ||
*Adjusted for estimated foreign currency translation and transaction impact using second quarter average foreign currency rates
11
Q3 2022 ResultsNovember 3, 2022 Exhibit 99.2 |
2 Forward-Looking StatementsStatements in this presentation that are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. Important factors that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the ability of suppliers to supply Stoneridge with parts and components at competitive prices on a timely basis; fluctuations in the cost and availability of key materials (includingsemiconductors, printed circuit boards, resin, aluminum, steel and copper) and components and our ability to offset cost increases through negotiatedprice increases with our customers or other cost actions; our ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions; 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 othercountries; 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 facility closures, business realignment or similar actions; a significant change in automotive, commercial, off-highway and agricultural vehicle production; competitive market conditions and resulting effects on sales and pricing; 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 customers products; labor disruptions at Stoneridges facilities or at any of Stoneridges significant customers or suppliers; the amount of Stoneridges indebtedness and the restrictive covenants contained in the agreements governing its indebtedness, including its revolving credit facility; customer acceptance of new products; capital availability or costs, including changes in interest rates or market perceptions; the occurrence or non-occurrence of circumstances beyond Stoneridges control; and the items described in Risk Factors and other uncertainties or risks discussed in Stoneridges periodic and current reports filed with the Securities and Exchange Commission.Important factors that could cause the performance of the commercial vehicle and automotive industry to differ materially from those in the forward-looking statements include factors such as (1) continued economic instability or poor economic conditions in the United States and global markets, (2) changes in economic conditions, housing prices, foreign currency exchange rates, commodity prices, including shortages ofand increases or volatility in the price of oil, (3) changes in laws and regulations, (4) the state of the credit markets, (5) political stability, (6) international conflicts and (7) the occurrence of force majeure events.These factors should not be construed as exhaustive and should be considered with the other cautionary statements in Stoneridges filings with the Securities and Exchange Commission.Forward-looking statements are not guarantees of future performance; Stoneridges actual results of operations, financial condition and liquidity, and the development of the industry in which Stoneridge operates may differ materially from those described in or suggested by the forward-looking statements contained in this presentation. In addition, even if Stoneridges results of operations, financial condition and liquidity, and the development of the industry in which Stoneridge operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods.This presentation contains time-sensitive information that reflects managements best analysis only as of the date of this presentation. Any forward-looking statements in this presentation speak only as of the date of this presentation, and Stoneridge undertakes no obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.Stoneridge does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.Rounding Disclosure: There may be slight immaterial differences between figures represented in our public filings compared to what is shown in this presentation. The differences are the result of rounding due to the representation of values in millions rather than thousands in public filings. |
3 Q3 2022 OverviewThird quarter adjusted EPS of $0.03 driven by continued revenue growth and EBITDA margin improvement of 450 bps vs. Q2First OEM MirrorEye program take rate improved to ~40% however still limited by material availability expecting continued production improvement to meet forecasted take rates expected to exceed 50% in 2023Updating full-year 2022 guidanceReducing midpoint full-year revenue guidance by $10 million (~$0.07 adjusted EPS)to reflect improved, but continued material constraints and current end-market demandRe-timing of expected customer engineering recoveries from Q4 2022 to 2023 (~$2.4 million) (~$0.08 adjusted EPS)Expecting continued strong operating performance and material cost recoveriesUpdated guidance implies midpoint Q4 revenue guidance of ~$239 million (~11.5% growth vs. Q3) and midpoint Q4 adjusted EPS of $0.24 ($0.21 increase vs. Q3) Q32022FinancialPerformance 2022AdjustedFull-YearGuidance 2022 Guidance Previously Provided2022 Guidance UpdatedMidpoint Change$855.0 -$875.0 million$850.0 $860.0 million($10.0) million21.25% -21.75%21.25% -21.75%-0.75% -1.25%0.75% -1.0%(12.5) bps$5.5 -$6.5 million$5.0 -$6.0 million($0.5 million)($0.25) ($0.15)($0.32) ($0.26)($0.09)4.75% -5.25%4.5% -4.75%(37.5) bps ReportedAdjustedSales$ 226.8 million$214.0 millionGross Profit Margin$49.4 million21.8%$49.4 million23.1%Operating MarginMargin$5.9 million2.6%$6.1 million2.9%Tax ExpenseRate$ 1.0 million57.5%$1.1 million53.4%EPS$0.03$0.03EBITDAMargin-$12.1 million5.6% |
4 ▸Adjusted sales increased by 6.2% in Q3 vs.Q2 (excluding the impact of FX) primarily due to higher customer production volumes and the continued ramp-up of recently launched programs ▸Adjusted gross margin increased ~480 bps in Q3 vs. Q2 (excluding the impact of FX) due to fixed cost leverage on incremental revenue and lower direct material costs▸Continued to offset large majority of incremental material costs through commercial and supply chain actions▸Adjusted operating margin increased by ~620 bps in Q3 vs. Q2 (excluding the impact of FX) due to fixed cost leverage on incremental sales as well as lower SG&A spend▸Adjusted EBITDA margin improved by ~580 bps in Q3 vs. Q2 (excluding the impact of FX)Financial Summary Revenue growth of 6.2% and adjusted EBITDA margin improvement of ~580 bps (excluding FX) relative to Q2 Q2 2022 vs. Q3 2022Adjusted SalesAdjustedGross ProfitAdjusted Operating LossAdjusted EBITDA$s in USD Millions Q3FinancialHighlights*Adjusted for estimated foreign currency translation and transaction impact using secondquarter average foreign currency rates $205.7 $214.0 $218.5 Q2 2022Q3 2022Q3 2022 Ex. FXImpact* $38.6 $49.4 $51.4 18.7%23.1%13%23%33%0204060Q2 2022Q3 2022Q3 2022 Ex. FXImpact* 23.5% $2.3 $12.1 $15.0 1.1%5.6%0%2%4%6%8%10%05101520Q2 2022Q3 2022Q3 2022 Ex. FXImpact*6.9% $(6.5)$6.1 $6.7 -3.2%2.9%-12%-2%8%-10-505 10 Q2 2022Q3 2022Q3 2022 Ex. FXImpact* 3.1% |
5 Macroeconomic Update Supply Chain Update ▸Material availability stabilizing which is driving improved production, however continued challenges still impacting certain product lines▸Material costs continue to experience inflationary pressure▸Effectively offsetting significant portion of incremental material costs through supply chain and pricing actions▸Continue to pass the majority ofspot-buy costs and out-bound premium freight to customers▸Due to continued rising material costs, price discussions with customers continue Forward Outlook ▸Expecting continued improvement in end-market production driven primarily by historically low vehicle inventory levels, large customer backlogs and improving material availability Stoneridge Specific Growth Drivers ▸Ramp-up of recently launched programs and new program launches expected to create Stoneridge specific growth drivers in 2023 to drive market outperformance▸Stoneridge is aligned with platforms likely to perform well against overall market dynamics electrified vehicle platforms and light truck / SUV / CUV platforms Material availability improving but residual challenges creating continued production volatilityEnd-markets expected to remain strong expecting outperformance driven by SRI specific factors |
6 50100150Q3 2022Q4 2022 110115120125 130 Q3 2022Q4 2022 Weighted average end-market expected to increase by 4.7% in Q4 vs. Q3 (Q4 midpoint guidance implies 11.5% revenue growth vs. Q3) Weighted average end-market expected to increase by 4.0% in 2023 vs. 2022 Expecting to outperform weighted average end-marketsdriven by new program launches, ramp-up of recently launched programs and favorable platform mix (SUV / CUV / Light Truck) Weighted average end-markets expected to increase 4.7% in Q4 vs. Q3 and 4.0% in 2023 vs. 2022 Expecting continued outperformance due to Stoneridge specific growth factorsProduction Volume Outlook PassengerVehicleForecast(MillionsofUnits)*Excludes Orlaco and Stoneridge Brazil CommercialVehicleForecast*(ThousandsofUnits) 46047048049050020222023 North America 12.4% of 2021 Adjusted Sales 46048050052020222023 Europe 20.6% of 2021 Adjusted Sales 13.514.014.515.015.516.020222023 North America35.0% of 2021 Adjusted Sales 25.526.026.5 27.0 20222023 China 4.5% of 2021 Adjusted Sales Source: October 2022 IHS LVP, Q3 2022 IHS MHCV 3.03.54.0 Q3 2022 Q4 2022 0.2% 7.07.17.27.37.47.5Q3 2022Q4 2022 |
7 1 2 7 1 4 9 8 5 3Control Devices Alignment with Electrification Electro-mechanical and Electro-magnetic Actuation (~52% of Sales**)Diverse portfolio of electro-mechanical and electro-magnetic actuationsystems focused on powertrain, driveline and control valve applications Temperature Sensors (~23% of Sales**)Sensor applications that accurately monitor and manage vehicle temperatures related to battery and EV electronics cooling, vehicle performance and exhaust systems Switches and Connectors (~25% of Sales**)Switch and connector technology is principally used for user-activated functions Control Devices Portfolio Progression*Shift-by-wire/Park Lock ActuatorsDisconnect Actuators 1 2Control Valves 3Temperature Sensors 4Trailer Tow 5 10 Control Devices portfolio is well aligned with vehicle electrification providing a strong foundation for future growth and market outperformance 6 7 8Transfer Case Disconnect ActuatorElectric Park Brake ActuatorTorque VectoringEV Thermal Management Systems 9 Trailer Tow enabling digital connection10 DRIVELINEDISCONNECTACTUATORS E-AXLEDISCONNECTACTUATORS PARKLOCKACTUATORSTEMPERATURESENSORS Control Devices Products on Electric Powertrains TRAILERTOWCONNECTORS 6 Current ProductProduct Progression* Products shown do not represent entire product category selected products for illustrative purposes**Estimated 2021 sales as a % of total Control Devices 2021 sales |
8 Summary Summary Q3 financial performance driven by strong margin performance on continued revenue growth expectingcontinued revenue growth and margin expansion in Q4 and into 2023Continued success largely offsetting incremental material costs and recovering historical costs materialchallenges improving but expected to remain into 2023Market demand continues to be strong for first OEM MirrorEye program material challenges improvingwith production expected to meet forecasted 50%+ take rates in 2023Weighted average end-markets expected to increase 4.7% in Q4 vs. Q3 and 4.0% in 2023 vs. 2022 expecting continued outperformance due to Stoneridge specific growth factorsControl Devices product portfolio aligned with industry trend to electrification creating another growthplatform for the Company Forward Outlook Updating full-year 2022 guidance to reflect current market conditionsUpdated guidance implies midpoint Q4 revenue guidance of ~$239 million (~11.5% growth vs. Q3) and midpoint Q4 adjusted EPS of $0.24 ($0.21 increase vs. Q3)Expecting continued improvement in weighted average end-markets in 2023. New program launches andramp-up of existing programs expected to drive outperformance of underlying markets. Driving shareholder value by executing on variables within our control, responding to factors that are out of our control and executing on our long - term strategy |
9 Financial Update |
10 3rdQuarter 2022 Financial Summary 3rdQuarter2022FinancialResults Adjusted sales of $214.0 million, an increase of 4.0% over Q2 2022 Control Devices sales of $89.4 million, an increase of 5.1% over Q2 2022 Electronics adjusted sales of $117.2 million, an increase of 1.8% over Q2 2022 Stoneridge Brazil sales of $13.8 million, an increase of 3.5% compared to Q2 2022 Adjusted operating income of $6.1 million (2.9% adjusted operating margin), an increase of ~600 bps over Q2 2022 Control Devices operating income of $7.5 million (8.4% operating margin), an increase of ~360 bps over Q2 2022 Electronics operating income of $5.4 million (4.6% adjusted operating margin), an increase of ~680 bps over Q2 2022 Stoneridge Brazil adjusted operating income of $1.0 million (7.0% adjusted operating margin), an increase of ~400 bps compared to Q2 2022 2022UpdatedFull-YearGuidance 2022 Guidance Previously Provided2022 Guidance UpdatedMid-point ChangeSales$855.0 $875.0 million$850.0 $860.0 million($10.0) millionAdjusted Gross Margin21.25% -21.75%21.25% -21.75%-Adjusted Operating Margin0.75% -1.25%0.75% -1.0%(12.5) bpsAdjusted Tax Expense$5.5 -$6.5 million$5.0 -$6.0 million($0.5 million)Adjusted EPS($0.25) ($0.15)($0.32) ($0.26)($0.09)Adjusted EBITDA Margin4.75% -5.25%4.5% -4.75%(37.5) bps Updated Guidance Summary Updating full-year 2022 guidance Reducing revenue expectations to reflect improved, but continued material constraints and current end-market demand Expecting unfavorable impact of re-timing of $2.4million of customer engineering recoveries from Q4 2022 to 2023 Expecting continued strong operating performance, including customer recoveries Midpoint Q4 adjusted revenue guidance of ~$239 million (growth of ~11.5% vs. Q3) Midpoint Q4 adjusted EPS guidance of $0.24 (increase of $0.21 vs. Q3) |
11 Q3 2022 Key Performance Drivers Operating performance, net material costs and continued focus on cost management resulted in Q3 outperformance vs. prior expectations despite significant non - cash FX headwinds Q3 Operating Performance Favorable material costs and product mix, net of production volatility that drove continued manufacturing inefficiencies, resulted in net favorable operating performance of ~$0.03 in Q3 vs. prior expectations Continued to focus on cost structure aligned with current market conditions and lean operating structure to drive ~$0.03 of outperformance vs. prior expectations in Q3 Recovered ~$0.05 of historical costs in Q3 continuing to pursue current and historical material cost recovery opportunities Q3 Non-operating Impact Significant net FX headwinds created primarily by the revaluation of intercompany loan balances (non-cash) FX~($0.09) Reduced Operating Expenses~$0.03 ~Net Impact of ~$0.11 Net Impact of ~($0.09) Q3OperatingPerformance Q3 Non-Operating ImpactOperatingPerformance~$0.03 Historical MaterialCost Recoveries~$0.05 |
12 Control DevicesFinancial Performance With material availability continuing to improve, focus remains on production output and offsetting incremental material costs as necessary through supply chain and pricing actions Control Devices Forward Expectations ▸Focused on production output as material availability continues to improve▸Continue to focus on supply chain strategy and price negotiations with customers to offset continued material inflation as necessary▸Continue to invest in and grow capabilities to meet significant incremental demand on electrified vehicle platform actuation and other advanced technology programs Q2 2022 vs. Q3 2022SalesOperating Income$s in USD Millions Control Devices Q3 Summary Q3 sales increased by 5.1% vs Q2 2022 primarily due to higher production volumes and incremental revenue from actuation program ramp-ups Sales in Q3 2022 include the unfavorable impact of foreign currency of approximately ($0.5) million vs. Q2 2022 Operating margin increased by 360 bps vs. Q2 2022 primarily due to lower material costs driven by favorable sales mix as well as favorable SG&A spend Operating income in Q3 2022 includes unfavorable foreign currency impact of approximately ($0.1) million vs. Q2 2022 *Adjusted for estimated foreign currency translation and transaction impact using secondquarter average foreign currency rates $85.0 $89.4 $89.8 Q2 2022Q3 2022Q3 2022 ExFX Impact* $4.1 $7.5 $7.6 4.8%8.4%2%7%12%17%0246810Q2 2022Q3 2022Q3 2022 ExFX Impact* 8.5% |
13 Q2 2022 vs. Q3 2022Adjusted SalesOperating Income (Loss)ElectronicsFinancial Performance Focused on continued margin expansion aligned with strong revenue growth expectations Continued momentum with MirrorEye OEM program launches and retrofit expansions Electronics Forward Expectations ▸Expecting revenue growth to outperform weighted average end-markets driven by new program launches and ramp-up of recently launched programs▸Focus remains on executing on MirrorEye OEM program launches and retrofit expansions▸Focused on efficient cost structure to ensure earnings potential is optimized with significant growth expectations in 2023$s in USD Millions Electronics Q3 Summary Q3 sales increased by 4.7% vs. Q2 2022 (excluding FX) primarily due to higher customer production volumes from continued strong end-market demand and improved material availability Adjusted sales in Q3 2022 include unfavorable foreign currency impact of approximately ($3.3) million vs. Q2 2022 Q3adjusted operating margin improved by 690 bps vs. Q2 2022 (excluding FX) primarily due to lower material costs driven primarily by continued cost recoveries and variable cost control Operating income in Q3 2022 includes unfavorable foreign currency impact of approximately ($0.2) million vs. Q2 2022 *Adjusted for estimated foreign currency translation and transaction impact using secondquarter average foreign currency rates $115.1 $117.2 $120.5 Q2 2022Q3 2022Q3 Ex FXImpact* $(2.5)$5.4 $5.6 -2.2%4.6%-6%-1%4%9%-505 10 Q2 2022Q3 2022Q3 Ex FXImpact* 4.7% |
14 Q2 2022 vs. Q3 2022SalesAdjusted Operating IncomeStoneridge BrazilFinancial Performance Expecting relatively stable performance despite continued macroeconomic challenges through careful cost management Stoneridge Brazil Forward Expectations Continue to expect macroeconomic challenges including price increases related to imported components and inflationary increases on labor and service costs Remain focused on the ramp-up of local OEM business and efficient management of variable costs to offset economic headwinds Continue to support global engineering capabilities with cost-efficient, highly capable technical resources increasing global engineering capacity and capabilities and reducing engineering cost structure Stoneridge Brazil Q3 Summary Q3 sales increased by 10.3% vs. Q2 2022 (excluding FX) primarily due to higher OEM sales Adjusted sales in Q3 2022 include unfavorable foreign currency impact of approximately ($0.9) million vs. Q2 2022 Adjusted operating income increased by 620 bps vs. Q2 2022 (excluding FX) primarily due to favorable SG&A Operating income in Q3 2022 includes unfavorable foreign currency impact of approximately ($0.4) million vs. Q2 2022 $s in USD Millions*Adjusted for estimated foreign currency translation and transaction impact using second quarter average foreign currency rates $13.3 $13.8 $14.7 Q2 2022Q3 2022Q3 2022 ExFX Impact* $0.4 $1.0 $1.4 3.0%7.0%1%6%11%00.511.5Q2 2022Q3 2022Q3 2022 ExFX Impact* 9.2% |
15 $32.3$136.2 - 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0Q3 2022Expected Q4 2022Long-term Target Cash Net Debt Expecting to remain compliant through covenant relief period Targeted long - term leverage ratio of less than 2.5x Net Debt / EBITDA Summary and Forward Expectations ▸Amended Credit Facility provides relief through Q1 2023▸Q4 2022 leverage ratio requirement of 4.75x▸Q1 2023 leverage ratio requirement of 3.50x▸Net debt / trailing-twelve-month EBITDA expected to continue to improve from higher earnings and cash performance with increasing revenue and margin performance expected forward▸Expecting to remain in compliance with required leverage ratios through the covenant relief period▸Targeted long-term leverage ratio <2.5x 3.0x 3.5xNet Debt / Adjusted EBITDA* Net Debt and Leverage Ratio$s in USD MillionsNet Debt <2.5xWaiver Period *Calculation for compliance purposes may differ |
16 Updated 2022 Adjusted EPS GuidancePreviously Provided2022 Midpoint Guidance DriversofUpdated2022AdjustedEPSGuidance($0.20)($0.29)2022 MidpointGuidance Updated Updated 2022 guidance implies strong fourth quarter growth and margin expansion Updated 2022 Guidance Drivers Reducing midpoint revenue guidance by $10 million (~$0.07 adjusted EPS based on 25% -30% expected contribution margin) to reflect improved, but continued material constraints and current end-market demand Expecting current and continued pricing actions and supply chain initiatives to continue to offset incremental material costs and recover portion of historical costs Expecting continued strong operating performance and reduced operating expenses / cost structure Guidance reflects unfavorable impact of expected re-timing of customer engineering recoveries of ~$2.4 million ($0.08 adjusted EPS) from Q4 2022 to 2023 Production Volume ~($0.07) Operating Performance /Cost Structure Timing of EngineeringRecoveries ~($0.08) Net IncrementalMaterial Costs /Recovery ofHistorical Costs Q3 Performance Q3 2022 Adjusted ActualsQ4 2022 Guidance (Midpoint)Change (Midpoint)Adjusted Sales$214.0 million~$239 million+ ~11.5%Adjusted EPS$0.03$0.24+ $0.21Adjusted EBITDA Margin5.6%~8%+ 240 bps |
17 Summary Q3 2022 Summary ▸Control Devices Sales increased versus Q2 primarily due to higher production volumes and incremental revenue from actuation programs. Continued focus on offsetting incremental material costs with pricing actions and supply chain strategies, while managing controllable costs.▸Electronics Continued strong sales growth during the quarter. Improved financial performance due to lower direct material costs and strong operating performance. Continued strong take rates on first MirrorEye OEM program in Europe. ▸Stoneridge Brazil Macroeconomic challenges continue focus on growing OEM business, maintaining margin profile and supporting global engineering efforts with highly capable, cost-efficient engineering footprint 2022 Outlook and Guidance ▸Reducing previously provided full-year 2022 adjusted revenue guidance to reflect improved, but continued material availability and current end-market demand▸Midpoint full-year adjusted revenue guidance of $855 million ($850 million -$860 million)▸Maintaining full-year 2022 adjusted gross margin considering continued strong operating performance and the expectation that pricing and supply chain actions will continue to offset incremental material costs and recover historical costs▸Midpoint full-year adjusted gross margin guidance of 21.5% (remains unchanged) ▸Reducing full-year 2022 operating and EBITDA margin guidance primarily related to re-timed engineering expenses offset by improved operating performance and non-cash impact of foreign currency on non-operating income/expenses driven by the revaluation of intercompany balances▸Midpoint full-year adjusted operating margin guidance of 0.875% (reduction of 12.5 basis points)▸Midpoint full-year adjusted EBITDA margin guidance of 4.75% (reduction of 37.5 basis points)▸Reducingfull-yearadjusted EPS guidance to a midpoint of ($0.29) (($0.32) -($0.26)) Adapting and responding to improving macroeconomic conditions to maximize financial performance and drive shareholder value |
18 Appendix |
19 Income Statement CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) (in thousands, except per share data) Net sales$226,757 $181,680 $668,751 $566,809 Costs and expenses: Cost of goods sold177,317 145,680 539,304 441,882 Selling, general and administrative27,444 28,481 83,781 89,237 Gain on sale of Canton Facility, net - - -(30,718) Design and development16,133 16,447 48,715 46,593 Operating income (loss)5,863 (8,928) (3,049) 19,815 Interest expense, net1,845 1,447 4,848 5,073 Equity in (earnings) loss of investee(34) (584) 424 (1,694) Other expense, net2,332 41 3,067 127 Income (loss) before income taxes1,720 (9,832) (11,388) 16,309 Provision for income taxes989 526 2,895 6,739 Net income (loss)$731 $(10,358) $(14,283) $9,570 Earnings (loss) per share: Basic$0.03 $(0.38) $(0.52) $0.35 Diluted$0.03 $(0.38) $(0.52) $0.35 Weighted-average shares outstanding: Basic27,281 27,147 27,250 27,100 Diluted27,524 27,147 27,250 27,432 Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 |
20 Balance Sheet CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) ASSETS Current assets: Cash and cash equivalents$32,337 $85,547 Accounts receivable, less reserves of $1,841 and $1,443, respectively166,861 150,388 Inventories, net150,704 138,115 Prepaid expenses and other current assets48,629 36,774 Total current assets398,531 410,824 Long-term assets: Property, plant and equipment, net101,897 107,901 Intangible assets, net43,116 49,863 Goodwill31,347 36,387 Operating lease right-of-use asset13,924 18,343 Investments and other long-term assets, net44,241 42,081 Total long-term assets234,525 254,575 Total assets$633,056 $665,399 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of debt$2,826 $5,248 Accounts payable106,297 97,679 Accrued expenses and other current liabilities68,827 70,139 Total current liabilities177,950 173,066 Long-term liabilities: Revolving credit facility165,695 163,957 Deferred income taxes8,324 10,706 Operating lease long-term liability10,903 14,912 Other long-term liabilities6,020 6,808 Total long-term liabilities190,942 196,383 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 27,327 and 27,191 shares outstanding at September 30, 2022 and December 31, 2021, respectively, with no stated value - - Additional paid-in capital231,675 232,490 Common Shares held in treasury, 1,639 and 1,775 shares at September 30, 2022 and December 31, 2021, respectively, at cost (50,772) (55,264) Retained earnings201,465 215,748 Accumulated other comprehensive loss(118,204) (97,024) Total shareholders' equity264,164 295,950 Total liabilities and shareholders' equity$633,056 $665,399 September 30, December 31, 2022 2021 |
21 Statement of Cash Flows CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Nine months ended September 30, (in thousands) OPERATING ACTIVITIES: Net (loss) income$(14,283) $9,570 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation20,183 20,831 Amortization, including accretion and write-off of deferred financing costs 6,187 4,767 Deferred income taxes(2,834) 916 Loss (earnings) of equity method investee424 (1,694) Gain on sale of fixed assets(95) (190) Share-based compensation expense4,421 4,685 Excess tax deficiency (benefit) related to share-based compensation expense266 (295) Gain on settlement of net investment hedge(3,716) - Gain on sale of Canton Facility, net -(30,718) Gain on disposal of business, net -(740) Change in fair value of earn-out contingent consideration -1,453 Changes in operating assets and liabilities: Accounts receivable, net(28,333) (2,746) Inventories, net(24,333) (36,580) Prepaid expenses and other assets(15,510) (11,144) Accounts payable18,366 20,657 Accrued expenses and other liabilities15,119 1,539 Net cash used for operating activities(24,138) (19,689) 2022 2021 |
22 Statement of Cash Flows (Cont.) INVESTING ACTIVITIES: Capital expenditures, including intangibles(22,877) (21,576) Proceeds from sale of fixed assets95 656 Proceeds from settlement of net investment hedge3,820 - Proceeds from disposal of business, net -1,050 Proceeds from sale of Canton Facility, net -35,167 Investment in venture capital fund, net(700) (2,349) Net cash (used for) provided by investing activities(19,662) 12,948 FINANCING ACTIVITIES: Revolving credit facility borrowings21,817 34,000 Revolving credit facility payments(18,000) (40,000) Proceeds from issuance of debt30,513 30,292 Repayments of debt(32,789) (36,286) Earn-out consideration cash payment(6,276) - Repurchase of Common Shares to satisfy employee tax withholding(760) (2,658) Net cash provided by (used for) financing activities(5,495) (14,652) Effect of exchange rate changes on cash and cash equivalents(3,915) (2,525) Net change in cash and cash equivalents(53,210) (23,918) Cash and cash equivalents at beginning of period85,547 73,919 Cash and cash equivalents at end of period$32,337 $50,001 Supplemental disclosure of cash flow information: Cash paid for interest, net$4,992 $4,962 Cash paid for income taxes, net$5,808 $7,296 |
23 Segment Financial Information(A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legalcosts as well as share-based compensation.(B)These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.(C)Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarterbuilding, leased assets, information technology assets, equity investments and investments in subsidiaries. SEGMENT REPORTING Net Sales: Control Devices$88,901 $87,618 $257,527 $273,581 Inter-segment sales474 414 1,855 2,768 Control Devices net sales89,375 88,032 259,382 276,349 Electronics124,066 77,585 372,040 250,440 Inter-segment sales5,948 6,319 21,027 19,527 Electronics net sales130,014 83,904 393,067 269,967 Stoneridge Brazil13,790 16,477 39,184 42,788 Inter-segment sales22 -22 - Stoneridge Brazil net sales13,812 16,477 39,206 42,788 Eliminations(6,444) (6,733) (22,904) (22,295) Total net sales$226,757 $181,680 $668,751 $566,809 Operating (Loss) Income: Control Devices$7,522 $2,899 $18,416 $50,129 Electronics5,416 (5,113) 180 (7,793) Stoneridge Brazil908 909 2,370 112 Unallocated Corporate (A)(7,983) (7,623) (24,015) (22,633) Total operating (loss) income$5,863 $(8,928) $(3,049) $19,815 Depreciation and Amortization: Control Devices$3,325 $3,840 $10,291 $11,777 Electronics3,372 3,102 10,495 8,970 Stoneridge Brazil968 737 2,991 2,783 Unallocated Corporate589 532 1,717 1,587 Total depreciation and amortization (B)$8,254 $8,211 $25,494 $25,117 Interest Expense (Income), net: Control Devices$30 $122 $73 $362 Electronics279 228 580 523 Stoneridge Brazil(298) (101) (989) (198) Unallocated Corporate1,834 1,198 5,184 4,386 Total interest expense, net$1,845 $1,447 $4,848 $5,073 Capital Expenditures: Control Devices$3,536 $2,305 $9,297 $7,046 Electronics2,293 3,353 7,052 7,264 Stoneridge Brazil757 744 2,684 2,163 Unallocated Corporate(C)(52) 249 649 947 Total capital expenditures$6,534 $6,651 $19,682 $17,420 Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 |
24 Reconciliations to US GAAP |
25 Reconciliations to US GAAPThis document contains information about Stoneridge's financial results which is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in the appendix of this document. The provision of these non-GAAP financial measures is not intended to indicate that Stoneridge is explicitly or implicitly providing projections on those non-GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this document and the adjustments that management can reasonably predict. |
26 Reconciliations to US GAAP (USD in millions)Q3 2022Q3 2022 EPSNet Income0.7$ 0.03$ Add: After-Tax Business Realignment Costs0.2 0.01 Adjusted Net Income0.9$ 0.03$ Reconciliation of Q3 2022 Adjusted EPS (USD in millions)Q2 2022Q2 2022 EPSNet Loss(7.3)$ (0.27)$ Add: After-Tax Brazilian Indirect Tax Credits, net(0.6) (0.02) Adjusted Net Loss(7.9)$ (0.29)$ Reconciliation of Q2 2022 Adjusted EPS |
27 Reconciliations to US GAAP Reconciliation of Adjusted Operating Income (Loss)(USD in millions)Q2 2022Q3 2022Operating Income (Loss)(5.9)$ 5.9$ Add: Pre-Tax Business Realignment Costs- 0.3 Add: Pre-Tax Brazilian Indirect Tax Credits, Net(0.6) - Adjusted Operating Income (Loss)(6.5)$ 6.1$ Reconciliation of Adjusted EBITDA(USD in millions)Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Income (Loss) Before Tax(9.8)$ (3.9)$ (6.2)$ (6.9)$ 1.7$ Interest expense, net1.4 0.1 1.8 1.2 1.8 Depreciation and amortization8.2 8.7 8.7 8.5 8.3 EBITDA(0.2)$ 5.0$ 4.3$ 2.8$ 11.8$ Add: Pre-Tax Change in Fair Value of Earn-Out (Stoneridge Brazil)0.2 0.6 - - - Less: Pre-Tax TSA and Monetary Correction (Stoneridge Brazil)- (1.1) - - - Less: Pre-Tax Gain from Disposal of MSIL Joint Venture- (1.8) - - - Add: Pre-Tax Restructuring Costs0.7 0.1 - - - Add: Pre-Tax Business Realignment Costs1.1 0.0 0.0- 0.3 Add: Pre-Tax Brazilian Indirect Tax Credits, Net- - - (0.6) - Less: Pre-Tax Gain from Disposal of Soot Sensor Business- (0.4) - - - Less: Pre-Tax Sale of Soot Sensor Product Inventory- 0.1 - - - Adjusted EBITDA1.8$ 2.4$ 4.3$ 2.3$ 12.1$ |
28 Reconciliations to US GAAP (USD in millions)Q3 2022Tax RateIncome Before Tax1.7$ Add: Pre-Tax Business Realignment Costs0.3 Adjusted Income Before Tax2.0$ Income Tax Expense1.057.5%Add: Tax Impact from Pre-Tax Adjustments0.1Adjusted Income Tax Expense1.1$ 53.4% Reconciliation of Adjusted Tax Rate |
29 Reconciliations to US GAAP*Adjusted for estimated foreign currency translation and transaction impact using secondquarter average foreign currency rates Reconciliation of Adjusted Sales Ex. FX Impact*(USD in millions)Q3 2022Adjusted Sales214.0$ Add: FX Impact 4.5 Adjusted Sales Ex. FX Impact218.5$ Reconciliation of Adjusted Sales(USD in millions)2021Sales770.5$ Less: Pre-Tax Sale of Soot Sensor Product Inventory(2.3) Less: Sales from Spot Purchase Recoveries(17.6) Adjusted Sales750.5$ Reconciliation of Adjusted Sales(USD in millions)Q2 2022Q3 2022Sales220.9$ 226.8$ Less: Sales from Spot Purchase Recoveries(15.3) (12.8) Adjusted Sales205.7$ 214.0$ |
30 Reconciliations to US GAAP*Adjusted for estimated foreign currency translation and transaction impact using second quarter average foreign currency rates Reconciliation of Gross Profit Ex. FX Impact*(USD in millions)Q3 2022Gross Profit49.4$ Add: FX Impact2.0 Gross Profit Ex. FX Impact51.4$ Reconciliation of Adjusted Operating Income Ex. FX Impact*(USD in millions)Q3 2022Adjusted Operating Income6.1$ Add: FX Impact 0.6 Adjusted Operating Income Ex. FX Impact6.7$ Reconciliation of Adjusted EBITDA Ex. FX Impact*(USD in millions)Q3 2022Adjusted EBITDA12.1$ Add: FX Impact 2.9 Adjusted EBITDA Ex. FX Impact15.0$ |
31 Reconciliations to US GAAP*Adjusted for estimated foreign currency translation and transaction impact using second quarter average foreign currency rates Reconciliation of Control Devices Sales Ex. FX Impact*(USD in millions)Q3 2022Control Devices Sales89.4$ Add: FX Impact 0.4 Control Devices Sales Ex. FX Impact89.8$ Reconciliation of Control Devices Operating Income Ex. FX Impact*(USD in millions)Q3 2022Control Devices Adjusted Operating Income7.5$ Add: FX Impact 0.1Control Devices Operating Income Ex. FX Impact7.6$ |
32 Reconciliations to US GAAP*Adjusted for estimated foreign currency translation and transaction impact using second quarter average foreign currency rates Reconciliation of Electronics Adjusted Sales Ex. FX Impact*(USD in millions)Q3 2022Electronics Adjusted Sales117.2$ Add: FX Impact 3.3 Electronics Adjusted Sales Ex. FX Impact120.5$ Reconciliation of Electronics Operating Income Ex. FX Impact*(USD in millions)Q3 2022Electronics Operating Income 5.4$ Add: FX Impact 0.2 Electronics Operating Income Ex. FX Impact5.6$ Reconciliation of Electronics Adjusted Sales(USD in millions)Q2 2022Q3 2022Electronics Sales130.4$ 130.0$ Less: Sales from Spot Purchase Recoveries(15.3) (12.8) Electronics Adjusted Sales115.1$ 117.2$ |
33 Reconciliations to US GAAP*Adjusted for estimated foreign currency translation and transaction impact using second quarter average foreign currency rates Reconciliation of Stoneridge Brazil Sales Ex. FX Impact*(USD in millions)Q3 2022Stoneridge Brazil Sales13.8$ Add: FX Impact 0.9 Stoneridge Brazil Sales Ex. FX Impact14.7$ Reconciliation of Stoneridge Brazil Adjusted Operating Income(USD in millions)Q2 2022Q3 2022Stoneridge Brazil Operating Income1.0$ 0.9$ Add: Pre-Tax Business Realignment Costs- 0.1 Add: Pre-Tax Brazilian Indirect Tax Credits, Net(0.6) - Stoneridge Brazil Adjusted Operating Income0.4$ 1.0$ Reconciliation of Stoneridge Brazil Adjusted Operating Income Ex. FX Impact(USD in millions)Q3 2022Stoneridge Brazil Adjusted Operating Income1.0$ Add: FX Impact(0.4) Stoneridge Brazil Adjusted Operating Income Ex. FX Impact0.6$ |