Stoneridge, Inc. · NYSE:SRI
Stoneridge — 2019 Baird CTS Conference
23 slides from Stoneridge's conference presentation, Jun 4, 2019
Slide 1: 2019 Baird CTS Conference
2019 Baird CTS Conference June 5, 2019 Jon DeGaynor, President and CEO
Slide 2: Forward-Looking Statements
2 Forward - Looking Statements Statements in this presentation that are not historical facts are forward - looking statements, which involve risks and uncertaint ies that could cause actual events or results to differ materially from those expressed or implied by the statements. Important factors th
Slide 3: About Stoneridge
3 About Stoneridge 10 Manufacturing locations on 4 continents 5% 1965 Founded NYSE: SRI 27% 5 - year backlog** $3.4 billion 5.2x 2018 OEM sales 2018 Revenue growth 2018 Adj. EPS growth *End - markets include passenger car, light truck / SUV, commercial vehicle, aftermarket and other, including agric
Slide 4: Stoneridge Evolution Since 2014
4 28.9 % 29.7 % 2014 2018* Stoneridge Evolution Since 2014 Transformation of base business is complete and has resulted in improvement in every selected financial metric driving significant shareholder value *Based on actual result provided 2/28/19 ▸ Divestiture of wiring business in 2014 and contin
Slide 5: Stoneridge - A Vehicle Technology Company
5 Stoneridge - A Vehicle Technology Company 40% 45% 50% 55% 60% 65% 70% 75% 80% 2013 2014 2015 2016 2017 2018 Smart Products* (% of Sales) *Smart products include Stoneridge products with printed circuit boards and / or electronic content, including software MEGATRENDS These megatrends are expected
Slide 6: Current Portfolio Overview
6 Stoneridge, Inc (NYSE: SRI) 2019 Sales* : $847.5m ▸ Powertrain Actuation • Transmission • Axle - Based ▸ Sensing • Emissions • Position CONTROL DEVICES 51% of 2018 Sales ▸ Track and Trace ▸ Audio and Alarm • Aftermarket Audio • Security Alarms ▸ In - region OEM Business • Commercial Vehicle Connec
Slide 7: Stoneridge 2020 Update
7 Stoneridge 2020 Update Significant progress on Stoneridge 2020 initiatives Remain on - track for completion in 2020 CONTROL DEVICES PST ELETRÔNICA ELECTRONICS ▸ Drive operational efficiency ▸ Grow core product portfolio ▸ Complete review of strategic alternatives of non - core switches and connect
Slide 8: Leveraging Our Existing Technology Portfolio
8 Leveraging Our Existing Technology Portfolio We are investing in current and future technologies that will enable system - based solutions by combining vision systems, connectivity capabilities and driver information systems Our telematics and tachograph units provide a gateway for vehicles to con
Slide 9: MirrorEye Update
9 MirrorEye Update MirrorEye retrofit rollout expected Q2 / Q3 ramping - up through the end of 2019 Global commercial vehicle OEMs expected to announce sourcing decisions in 2019 / early 2020 ▸ Market Size • 10% – 15% penetration on North American retrofits (assuming newer vehicles more likely to re
Slide 10: Updated Long-Term Financial Targets
10 Updated Long - Term Financial Targets 15.5%+ EBITDA margin by 2021 Incremental volumes contribution margin of 2x – 3x current EBITDA margin Operational improvement expected to continue Control Devices quarter - over - quarter improvement of 140 bps in Q1 2019 Stoneridge 2020 initiatives expected
Slide 11: Summary
11 Summary ▸ We have successfully transformed our base business resulting in strong financial performance and a strong foundation for future growth ▸ Our portfolio of Smart Products is aligned with industry mega trends that will facilitate growth that exceeds the underlying transportation market by
Slide 12: Questions?
Questions? Severe
Slide 13: Appendix
Appendix Severe
Slide 14: Income Statement
14 Income Statement Year ended December 31 (in thousands, except per share data) Net sales $ 866,199 $ 824,444 $ 695,977 Costs and expenses: Cost of goods sold 609,568 576,304 500,538 Selling, general and administrative 138,553 141,893 111,145 Design and development 51,074 48,877 40,212 Operating in
Slide 15: Segment Financial Information
15 Segment Financial Information Year ended December 31 Net Sales: Control Devices $ 441,297 $ 447,528 $ 408,132 Inter-segment sales 8,348 5,044 1,826 Control Devices net sales 449,645 452,572 409,958 Electronics 344,727 282,383 205,256 Inter-segment sales 37,126 39,501 33,361 Electronics net sales
Slide 16: Balance Sheet
16 Balance Sheet CONSOLIDATED BALANCE SHEETS December 31, (in thousands) ASSETS Current assets: Cash and cash equivalents $ 81,092 $ 66,003 Accounts receivable, less reserves of $1,243 and $1,109, respectively 139,076 142,438 Inventories, net 79,278 73,471 Prepaid expenses and other current assets 2
Slide 17: Statement of Cash Flows
17 Statement of Cash Flows Year ended December 31, (in thousands) OPERATING ACTIVITIES: Net income $ 53,848 $ 45,049 $ 75,574 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 22,786 21,490 19,998 Amortization, including accretion of deferred financing co
Slide 18: Statement of Cash Flows (Cont.)
18 Statement of Cash Flows (Cont.) CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, (in thousands) FINANCING ACTIVITIES: Acquisition of noncontrolling interest, including transaction costs - (1,848) - Revolving credit facility borrowings 27,500 95,000 - Revolving credit facility payment
Slide 19: Reconciliations to US GAAP
19 Reconciliations to US GAAP
Slide 20: Reconciliations to US GAAP
20 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 21: Reconciliations to US GAAP
21 Reconciliations to US GAAP (USD in millions) 2017 2018 Gross Profit 248.1$ 256.6$ Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 1.6 Add: Pre-Tax Business Realignment Costs 0.8 Adjusted Gross Profit 249.8$ 257.5$ Reconciliation of Adjusted Gross Profit (USD in millions) 2017 2018 Income B
Slide 22: Reconciliations to US GAAP
22 Reconciliations to US GAAP 2014 Reported Earnings Per Share (1.40)$ Add: Goodwill PST 1.91$ Less: Noncontrolling Interest PST (0.42)$ Add: Bond Redemption Premium 0.30$ Add: Debt Discount / Deferred Financing 0.11$ Less: Swap (0.01)$ Adjusted Earnings Per Share 0.49$ Reconciliation of 2014 Adjust
Slide 23: Reconciliations to US GAAP
23 Reconciliations to US GAAP (USD in millions) 2018 2018 EPS Net Income Attributable to Stoneridge 53.8$ 1.85$ Add: After-Tax Step-Up in Fair Value of Earn-Out (PST) (0.2) ($0.00) Add: After-Tax Step-Up in Fair Value of Earn-Out (Orlaco) 0.4 $0.01 Less: After-Tax Impact of US Tax Cut and Jobs Act 0