Stoneridge(SRI) - 2024 Q4 - Annual Report

Financial Performance - The company reported a net loss of $16.5 million, or$ (0.60) per diluted share, for the year ended December 31, 2024, an increase in net loss by $11.3 million from the previous year[115]. - Total net sales for 2024 were$ 908.3 million, a decrease of $67.5 million or 6.9% compared to 2023's$ 975.8 million[142]. - The total loss before income taxes for 2024 was $13,597 thousand, compared to a loss of$ 1,922 thousand in 2023[295]. - Comprehensive loss income for 2024 totaled $45,749 thousand, a stark contrast to a comprehensive income of$ 5,171 thousand in 2023[214]. - The company reported a net loss of $16.5 million for 2024, compared to a net loss of$ 5.2 million in 2023, reflecting a significant increase in losses[212]. Sales and Revenue - Net sales decreased by $67.5 million, or 6.9%, in 2024, with the Control Devices segment experiencing a 14.5% decline in net sales[116][138]. - The Electronics segment's net sales decreased by 1.8%, primarily due to lower customer demand in agricultural and commercial vehicle markets, despite higher sales from the European commercial vehicle market[119]. - North American net sales decreased by$ 48.4 million or 9.8%, attributed to lower sales volume and expected end-of-life production impacts[142]. - Control Devices segment net sales in North America decreased to $245,208 thousand in 2024 from$ 290,213 thousand in 2023, a decline of 15.5%[277]. - Electronics segment net sales in North America slightly decreased to $201,934 thousand in 2024 from$ 205,328 thousand in 2023, a decline of 1.9%[277]. Cash and Liquidity - The company increased cash and cash equivalents to $71.8 million in 2024, up from$ 40.8 million in 2023, due to reduced working capital and lower inventory levels[123]. - Cash provided by operating activities increased to $47.7 million in 2024, up by$ 42.8 million from $4.9 million in 2023[158]. - The company holds approximately$ 71.8 million in cash and cash equivalents, with 65.8% held in foreign locations, and $73.4 million of undrawn commitments under the Credit Facility[172]. Expenses and Costs - The gross margin increased to 20.8% in 2024 from 20.6% in 2023, with material costs as a percentage of net sales decreasing by 1.8% to 57.6%[145]. - Interest expense for 2024 was$ 14.4 million, up from $13.0 million in 2023, reflecting the impact of floating-rate debt[212]. - Business realignment costs were$ 2.6 million in 2024, down from $4.5 million in 2023, primarily related to optimizing the engineering footprint[136]. - Share-based compensation expense increased to$ 4,094 thousand in 2024 from $3,322 thousand in 2023[217]. Investments and Obligations - The company has a total contractual obligation of$ 238.4 million as of December 31, 2024, including $201.6 million under the Credit Facility[160]. - The company entered into a new credit facility on November 2, 2023, providing for a$ 275,000 thousand senior secured revolving credit facility[286]. - The company has accrued for estimated losses related to legal proceedings and claims, assessing the likelihood of adverse judgments[185]. Foreign Currency and Risks - The company is exposed to foreign currency exchange rate fluctuations, particularly in Brazil, Argentina, Mexico, Sweden, Estonia, the Netherlands, the United Kingdom, and China[171]. - The company estimates that a 10.0% unidirectional change in currency exchange rates would have affected income before income taxes by approximately $2.9 million for the year ended December 31, 2024[198]. - The company has significant operations in multiple regions, including Europe and South America, which exposes it to translation risk due to currency fluctuations[195]. Research and Development - The company plans to focus on developing products addressing industry megatrends, including safety and vehicle intelligence, with ongoing projects like the OEM MirrorEye programs and next-generation tachograph[124]. - Research and development costs incurred were$ 11,883 thousand, $18,809 thousand, and$ 23,784 thousand for the years ended December 31, 2024, 2023, and 2022, respectively[256]. - Total product development costs amounted to $72,174 thousand in 2024, representing 7.9% of net sales, compared to$ 71,075 thousand (7.3%) in 2023[255]. Assets and Liabilities - Total current assets decreased to $387.5 million in 2024 from$ 429.4 million in 2023, primarily due to a reduction in inventories[211]. - The company's total liabilities increased to $376.3 million in 2024 from$ 392.2 million in 2023, with long-term liabilities rising to $226.3 million[211]. - The reserve for product warranty and recall totaled$ 27.5 million as of December 31, 2024, indicating ongoing management of product-related liabilities[209]. Accounting and Compliance - The Company adopted ASU No. 2023-07 for segment reporting, effective for annual periods beginning in fiscal 2025[191]. - The Company is evaluating the impact of recently issued accounting standards on its financial statement disclosures, with new standards effective for fiscal years beginning after December 15, 2024[193]. - Deferred tax assets are subject to valuation allowances if it is more likely than not that they will not be realized in future periods[187].