Stoneridge, Inc. · NYSE:SRI
Stoneridge — Q3 2022 Earnings Presentation
33 slides from Stoneridge's earnings presentation, Nov 2, 2022
Slide 1: Q3 2022 Results
Q3 2022 ResultsNovember 3, 2022 Exhibit 99.2
Slide 2: Forward-Looking Statements
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
Slide 3: Q3 2022 Overview
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 forecaste
Slide 4: Financial Summary
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 i
Slide 5: Macroeconomic and Supply Chain Update
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
Slide 6: Production Volume Outlook
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
Slide 7: Control Devices Alignment with Electrification
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%
Slide 8: Summary
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 im
Slide 9: Financial Update
Financial Update Sserercee
Slide 10: 3rd Quarter 2022 Financial Summary
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 Br
Slide 11: Q3 2022 Key Performance Drivers
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 vo
Slide 12: Control Devices Financial Performance
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
Slide 13: Electronics Financial Performance
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
Slide 14: Stoneridge Brazil Financial Performance
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 p
Slide 15: Net Debt and Leverage Ratio
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 Credi
Slide 16: Updated 2022 Adjusted EPS Guidance
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 gu
Slide 17: Summary
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 cos
Slide 18: Appendix
Appendix Sserercee
Slide 19: Income Statement
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
Slide 20: Balance Sheet
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 $1,443, respectively166,861 150,388 Inventories, net150,704 138,115 Prepaid expenses and other current as
Slide 21: Statement of Cash Flows
21 Statement of Cash Flows CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Nine months ended September 30, (in thousands) OPERATING ACTIVITIES: Net (loss) income$(14,283) $9,570 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciatio
Slide 22: Statement of Cash Flows (Cont.)
22 Statement of Cash Flows (Cont.) INVESTING ACTIVITIES: Capital expenditures, including intangibles(22,877) (21,576) Proceeds from sale of fixed assets95 656 Proceeds from settlement of net investment hedge3,820 - Proceeds from disposal of business, net -1,050 Proceeds from sale of Canton Facility,
Slide 23: Segment Financial Information
23 Segment Financial Information(A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legalcosts as well as share-based compensation.(B)These amounts represent depreciation and amortization on property, plant and equipment and c
Slide 24: Reconciliations to US GAAP
24 Reconciliations to US GAAP
Slide 25: Reconciliations to US GAAP
25 Reconciliations to US GAAPThis document contains information about Stoneridge's financial results which is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP financial measures are reconciled to their closest GAAP financial measu
Slide 26: Reconciliations to US GAAP
26 Reconciliations to US GAAP (USD in millions)Q3 2022Q3 2022 EPSNet Income0.7$ 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
Slide 27: Reconciliations to US GAAP
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$ Reconcili
Slide 28: Reconciliations to US GAAP
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
Slide 29: Reconciliations to US GAAP
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
Slide 30: Reconciliations to US GAAP
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$ Reconc
Slide 31: Reconciliations to US GAAP
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 Sal
Slide 32: Reconciliations to US GAAP
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 Electron
Slide 33: Reconciliations to US GAAP
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 Braz