Stoneridge(SRI) - 2023 Q1 - Quarterly Report

Front Matter This section details the Form 10-Q filing, compliance, and forward-looking statement disclaimers Form 10-Q Filing Information This section details Stoneridge, Inc.'s Q1 2023 Form 10-Q filing, confirming SEC compliance and accelerated filer status - The report is a Quarterly Report for the quarter ended March 31, 2023[2] - Stoneridge, Inc. (SRI) is registered on the New York Stock Exchange[2] - The registrant has filed all required reports in the preceding 12 months and for the past 90 days[2] - The registrant is classified as an 'Accelerated filer'[2] - Common Shares outstanding as of April 28, 2023, totaled 27,513,330[2] Forward-Looking Statements This section outlines forward-looking statements, noting their inherent risks and uncertainties, and disclaims any obligation to update them - Forward-looking statements relate to future product/facility expansion, acquisition strategy, investments, new product development, growth opportunities, and operational expectations[5] - Key risk factors include supplier ability, cost/availability of materials (e.g., semiconductors), global economic trends, competition, geopolitical risks (Russia-Ukraine, U.S.-China), COVID-19 impact, customer/supplier loss, business realignment costs, vehicle production changes, foreign currency fluctuations, new product acceptance, intellectual property protection, warranty/recall claims, labor disruptions, indebtedness, capital availability, acquisition integration, and IT system risks[7] - The company disclaims any obligation to update forward-looking statements to reflect actual results or changes in assumptions[6] PART I – FINANCIAL INFORMATION This part presents the unaudited condensed consolidated financial statements and management's analysis for Q1 2023 Item 1. Financial Statements This section presents Stoneridge, Inc.'s unaudited condensed consolidated financial statements for Q1 2023, including balance sheets, operations, comprehensive loss, cash flows, and shareholders' equity, with detailed notes Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show the company's financial position as of March 31, 2023, compared to December 31, 2022, indicating an increase in total assets and current liabilities, while shareholders' equity slightly decreased | (in thousands) | March 31, 2023 | December 31, 2022 | | :--------------- | :------------- | :---------------- | | Cash and cash equivalents | $35,165 | $54,798 | | Accounts receivable, net | $175,666 | $158,155 | | Inventories, net | $168,701 | $152,580 | | Total current assets | $423,136 | $409,551 | | Total assets | $670,738 | $652,105 | | Current portion of debt | $1,456 | $1,450 | | Accounts payable | $131,996 | $110,202 | | Total current liabilities | $201,999 | $177,692 | | Revolving credit facility | $167,393 | $167,802 | | Total liabilities and shareholders' equity | $670,738 | $652,105 | | Total shareholders' equity | $276,243 | $280,942 | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations show a net loss of $(7.4) million for the three months ended March 31, 2023, an improvement from $(7.7) million in the prior year, driven by increased net sales despite higher operating and interest expenses | (in thousands, except per share data) | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net sales | $241,325 | $221,058 | | Cost of goods sold | $198,523 | $179,615 | | Selling, general and administrative | $29,863 | $27,399 | | Design and development | $16,968 | $17,028 | | Operating loss | $(4,029) | $(2,984) | | Interest expense, net | $2,746 | $1,786 | | Loss before income taxes | $(8,094) | $(6,182) | | (Benefit) provision for income taxes | $(708) | $1,493 | | Net loss | $(7,386) | $(7,675) | | Basic loss per share | $(0.27) | $(0.28) | | Diluted loss per share | $(0.27) | $(0.28) | - Net sales increased by $20.3 million (9.2%) from $221.1 million in Q1 2022 to $241.3 million in Q1 2023[9] - Net loss improved slightly from $(7.7) million in Q1 2022 to $(7.4) million in Q1 2023[9] Condensed Consolidated Statements of Comprehensive Loss The condensed consolidated statements of comprehensive loss show a comprehensive loss of $(3.5) million for the three months ended March 31, 2023, compared to $(2.5) million in the prior year, primarily influenced by net loss and other comprehensive income from foreign currency translation | (in thousands) | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :--------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(7,386) | $(7,675) | | Foreign currency translation | $4,072 | $4,161 | | Unrealized (loss) gain on derivatives | $(232) | $1,048 | | Other comprehensive income, net of tax | $3,840 | $5,209 | | Comprehensive loss | $(3,546) | $(2,466) | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows indicate a net cash outflow of $(19.6) million for the three months ended March 31, 2023, a significant reduction from the $(44.2) million outflow in the prior year, primarily due to decreased cash used in operating and financing activities | (in thousands) | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :--------------- | :-------------------------------- | :-------------------------------- | | Net cash used for operating activities | $(9,182) | $(19,811) | | Net cash used for investing activities | $(8,755) | $(7,236) | | Net cash used for financing activities | $(2,119) | $(17,146) | | Effect of exchange rate changes on cash | $423 | $34 | | Net change in cash and cash equivalents | $(19,633) | $(44,159) | | Cash and cash equivalents at end of period | $35,165 | $41,388 | - Net cash used for operating activities decreased by $10.6 million, from $(19.8) million in Q1 2022 to $(9.2) million in Q1 2023[14] - Net cash used for financing activities decreased by $15.0 million, from $(17.1) million in Q1 2022 to $(2.1) million in Q1 2023[14] Condensed Consolidated Statements of Shareholders' Equity The condensed consolidated statements of shareholders' equity show a decrease in total shareholders' equity from $280.9 million at December 31, 2022, to $276.2 million at March 31, 2023, primarily due to net loss and share-based compensation, partially offset by currency translation adjustments | (in thousands) | Balance December 31, 2022 | Net loss | Unrealized loss on derivatives, net | Currency translation adjustments | Issuance of Common Shares | Repurchased Common Shares for treasury, net | Share-based compensation, net | Balance March 31, 2023 | | :--------------- | :------------------------ | :------- | :-------------------------- | :----------------------------- | :------------------------ | :---------------------------------------- | :-------------------------- | :--------------------- | | Total shareholders' equity | $280,942 | $(7,386) | $(232) | $4,072 | — | $5,649 | $(6,802) | $276,243 | - Total shareholders' equity decreased by $4.7 million from December 31, 2022, to March 31, 2023[15] - Net loss of $(7.4) million and share-based compensation expense of $(6.8) million were the primary reductions to equity[15] - Currency translation