Slide 1: Second Quarter 2018 Results
Second - Quarter 2018 Results August 2, 2018 Exhibit 99.2
Slide 2: Forward-Looking Statements
2 Forward - Looking Statements Statements in this presentation 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 expectatio
Slide 3: Overview of Achievements
3 Overview of Achievements x Each segment contributed to our strong second quarter in which we drove significant margin improvement over Q1 x Control Devices gross margin improved by 130 basis points from Q1 to Q2 x Electronics revenue growth and margin expansion was driven by recent product launche
Slide 4: Financial Summary
4 Financial Summary We continue to deliver profitable growth and margin improvement
Slide 5: Connecting Drivers to Information
5 Connecting Drivers to Information Pending award for extension and expansion of our largest global Driver Information System program $38 million peak annual revenue $8 million expansion $3 million localization in Brazil Start - of - production – 2021 Deepening our existing customer relationships Fi
Slide 6: Mirror Eye Update
6 Mirror Eye TM Update Mirror Eye TM commercialization progressing as planned FMCSA exemption could accelerate market penetration and adoption rate Mirror Eye TM fleet trials ongoing Over one million miles driven with major U.S. fleets including Schneider, Maverick and J.B. Hunt Schneider and J.B. H
Slide 7: 2nd Quarter 2018 Overview
7 Each segment contributed to our strong 2 nd quarter Award pending for significant global Driver Information System extension and expansion $38 million peak annual revenue – 2021 Start - of - Production $8 million expansion $3 million localization in Brazil Mirror Eye TM progress remains on - track
Slide 8: Financial Update
Financial Update Stoneridge
Slide 9: 2nd Quarter 2018 Summary
9 2 nd Quarter 2018 Summary 2 nd Quarter 2018 Financial Results 2018 Performance and Guidance Sales of $220.6 million, an increase of 5% over Q2 2017 Control Devices sales of $112.4 million, a decrease of 3% over Q2 2017 Electronics sales of $100.1 million, an increase of 22% over Q2 2017 PST sales
Slide 10: Control Devices Financial Performance
10 Control Devices Financial Performance Gross margin improvement offset by SG&A and D&D initiatives to drive future growth Control Devices Overview Production volume reductions by our customers on key passenger car and light truck platforms contributing to flat revenue quarter - to - quarter Gross
Slide 11: Electronics Financial Performance
11 Electronics Financial Performance Continued strong revenue performance and margin expansion Segment level financial information includes intercompany sales *Due to centralizing certain procurement and operations functions we have allocated certain corporate costs to each segment t hat were not pr
Slide 12: PST Financial Performance
12 PST Financial Performance Responding effectively to dynamic macroeconomic challenges Segment level financial information includes intercompany sales *Due to centralizing certain procurement and operations functions we have allocated certain corporate costs to each segment t hat were not previousl
Slide 13: Tariff Update
13 Tariff Update Recently announced tariffs could create a $1 - $2 million headwind for the remainder of the year $1 - $2 million gross headwind for the remainder of the year On June 15, 2018 the United States imposed a 25% import tariff on certain Chinese goods and raw materials Stoneridge is impac
Slide 14: FY 2018 Outlook
14 FY 2018 Outlook Customer volume reductions on certain key platforms in China and North America Commercial vehicle volumes remain robust Movements in currency are creating headwinds, specifically in Europe and Brazil Recently announced tariffs have created $1 - $2 million gross headwind for the re
Slide 15: FY 2018 Full-Year Guidance
15 2017 Actual Results 2018 Guidance Sales $824.4 Million $870 - $890 Million Adjusted Gross Margin 30.3% 31.0% - 32.0% Adjusted Operating Margin 8.1% 9.0% - 10.0% Adjusted EPS $1.57 $2.05 - $2.20 Adjusted EBITDA Margin 11.6% 12.5% - 13.5% FY 2018 Full - Year Guidance Lower - end of guidance range i
Slide 16: All segments contributing to strong financial performance
16 All segments contributing to strong financial performance Control Devices – Flat revenue and gross margin improvement offset by additional SG&A and D&D expenses Electronics – Strong quarter - over - quarter revenue growth and margin expansion PST – Stable top - line performance and margin expansi
Slide 17: Thank You
Thank You Stoneridge
Slide 18: Appendix
18 Appendix
Slide 19: 2018 Q2 Adjustments
19 2018 Q2 Adjustments The expense related to the step - up in the fair value of the earn - out related to the acquisition of the remaining 26% minority interest in PST was $0.5 million resulting in an EPS adjustment of $0.02 Expenses related to certain one - time business realignment costs have bee
Slide 20: Income Statement (Unaudited)
20 Income Statement (Unaudited) (in thousands, except per share data) 2018 2017 2018 2017 Net sales $ 220,602 $ 209,111 $ 446,532 $ 413,422 Costs and expenses: Cost of goods sold 153,184 145,697 311,145 288,857 Selling, general and administrative 35,256 35,704 72,517 69,970 Design and development 12
Slide 21: Segment Financial Information
21 Segment Financial Information 2018 2017 2018 2017 Net Sales: Control Devices $ 109,956 $ 114,001 $ 225,313 $ 232,874 Inter-segment sales 2,481 1,368 4,662 2,151 Control Devices net sales 112,437 115,369 229,975 235,025 Electronics 90,313 71,610 180,341 135,415 Inter-segment sales 9,771 10,223 20,
Slide 22: Balance Sheet
22 Balance Sheet CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, (in thousands) 2018 2017 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 58,965 $ 66,003 147,729 142,438 Inventories, net 80,232 73,471 Prepaid expenses and other current assets 29,056 21,457 Total current as
Slide 23: Statement of Cash Flows (Unaudited)
23 Statement of Cash Flows (Unaudited) Six months ended June 30, (in thousands) 2018 2017 OPERATING ACTIVITIES: Net income $ 28,500 $ 18,092 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 11,535 10,538 Amortization, including accretion of deferred fina
Slide 24: Statement of Cash Flows (Cont.)
24 Statement of Cash Flows (Cont.) (Unaudited) Six months ended June 30, (in thousands) 2018 2017 FINANCING ACTIVITIES: Acquisition of noncontrolling interest, including transaction costs - (1,796) Revolving credit facility borrowings 26,500 84,000 Revolving credit facility payments (37,500) (19,000
Slide 25: Reconciliations to US GAAP
25 Reconciliations to US GAAP
Slide 26: Reconciliations to US GAAP
26 Reconciliations to US GAAP This 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 me
Slide 27: Reconciliations to US GAAP
27 Reconciliations to US GAAP (USD in millions) Q2 2017 Q1 2018 Q2 2018 Income Before Tax 14.1$ 16.6$ 18.9$ Interest expense, net 1.5 1.4 1.2 Depreciation and amortization 7.1 7.8 7.1 EBITDA 22.7$ 25.8$ 27.2$ Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 0.7 Add: Pre-Tax Step-Up in Fair Val
Slide 28: Reconciliations to US GAAP
28 Reconciliations to US GAAP (USD in millions) Q2 2017 Q1 2018 Q2 2018 Electronics Operating Income 2.8$ 7.9$ 8.3$ Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 0.7 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) 2.1 0.4 Add: Pre-Tax Allocation of Centralized Procurement and Operat
Slide 29: Reconciliations to US GAAP
29 Reconciliations to US GAAP (USD in millions) Q1 2018 Q1 2018 EPS Net Income Attributable to Stoneridge 13.4$ 0.46$ Add: After-Tax Step-Up in Fair Value of Earn-Out (Orlaco) 0.4 0.01 Add: After-Tax Step-Up in Fair Value of Earn-Out (PST) 0.5 0.02 Add: After-Tax Business Realignment Costs 0.2 0.01