Stoneridge(SRI) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter sales were $218.2 million, with a gross profit of$42.7 million (19.5% of sales) and adjusted gross profit of $43.1 million (19.7$908.3 million, with a gross profit of $189.3 million (20.8$189.8 million (20.9% of sales) [4] - The company reported a net loss of $(6.1) million for Q4 2024 and an adjusted net loss of$(5.0) million [3] - Net sales for 2024 were $908.3 million, a decrease of 6.9$975.8 million in 2023 [32] - The net loss for 2024 was $16.5 million, compared to a net loss of$5.2 million in 2023, reflecting a significant increase in losses [32] - Adjusted operating income for 2024 was a loss of $0.4 million, down from an operating income of$12.8 million in 2023 [32] - Adjusted EBITDA for Q4 2024 was $6.0 million (2.7$5.5 million, with a full-year adjusted EBITDA of $35.1 million, compared to Q4 2023 adjusted EBITDA of$15.6 million and full-year 2023 adjusted EBITDA of $48.1 million [35] - Adjusted gross profit for Q4 2024 was$43.1 million, down from $45.7 million in Q4 2023, while full-year adjusted gross profit decreased to$189.8 million from $202.1 million [36] - The operating loss for Q4 2024 was$(4.4) million, with an adjusted operating income of $(4.0) million for the full year, compared to an operating income of$6.0 million in Q4 2023 [37] Cash Flow and Liquidity - Positive free cash flow of approximately $24 million was achieved, an increase of approximately$56 million compared to the previous year, driven by a $36 million reduction in inventory [6] - Free cash flow for 2024 was$47.7 million, a substantial increase compared to $4.9 million in 2023, indicating better cash management [33] - Cash and cash equivalents increased to$71.8 million in 2024 from $40.8 million in 2023, indicating improved liquidity [31] - Total Cash and Cash Equivalents are expected to rise from$54.1 million in Q3 2024 to $71.8 million in Q4 2024 [50] Debt and Leverage - As of December 31, 2024, cash and cash equivalents totaled$71.8 million, with adjusted net debt at $147.9 million [14][15] - The company aims for a compliance net debt to EBITDA leverage ratio of 2.0x to 2.5x by the end of 2025 [17] - The company’s total liabilities increased to$376.3 million in 2024 from $392.2 million in 2023, reflecting changes in debt structure [31] - Compliance Leverage Ratio (Net Debt / TTM EBITDA) is projected to rise from 2.79x in Q3 2024 to 3.08x in Q4 2024, remaining below the maximum requirement of 3.50x [50] - Total Debt is expected to increase from$196.3 million in Q3 2024 to $201.6 million in Q4 2024 [50] - Total Adjusted Debt (Compliance) is projected to increase from$197.9 million in Q3 2024 to $203.1 million in Q4 2024 [50] Future Guidance - The company established 2025 revenue guidance of$875 million and EBITDA guidance of $40 million [1] - The 2026 revenue target is set at least$975 million, with an EBITDA target of at least $70 million (7.2$50 million in incremental revenue in 2025, with total expected revenue for 2025 ranging from $860 million to$890 million [4] Operational Challenges - The company faced challenges including fluctuations in material costs and geopolitical risks, which may impact future performance [26] - The company incurred after-tax business realignment costs of $0.3 million in Q4 2024 and$2.5 million for the full year 2024 [34] Segment Performance - The electronics segment reported an adjusted operating income of $5.3 million in Q4 2024, down from$11.0 million in Q4 2023, while full-year adjusted operating income decreased to $27.9 million from$30.2 million [41] - Control devices segment showed an adjusted operating income of $(1.6) million in Q4 2024, compared to$0.9 million in Q4 2023, with full-year adjusted operating income at $6.6 million [39]