Stoneridge Reports Fourth Quarter and Full-Year 2024 Results

Core Insights - Stoneridge, Inc. reported a net cash improvement of approximately $43 million year-over-year, primarily driven by a $36 million reduction in inventory [1][14] - The company established a midpoint revenue guidance for 2025 at $875 million and an EBITDA guidance of $40 million [1][19] - For 2026, Stoneridge targets revenue of at least $975 million and EBITDA of at least $70 million [1][19] Financial Performance - Fourth quarter sales reached $218.2 million, with a gross profit of $42.7 million (19.5% of sales) and an adjusted gross profit of $43.1 million (19.7% of sales) [3][4] - The operating loss for the fourth quarter was $(4.4) million, resulting in an adjusted operating loss of $(4.0) million [3][4] - The full-year sales totaled $908.3 million, with a gross profit of $189.3 million (20.8% of sales) and an adjusted EBITDA of $37.9 million (4.2% of sales) [4][11] Operational Highlights - The company focused on improving fundamentals to counteract market pressures, achieving a 120-basis point improvement in material costs and a 30-basis point improvement in direct labor costs [6] - Positive free cash flow of approximately $24 million was generated, an increase of about $56 million compared to the previous year, largely due to inventory management [6][14] - The Electronics segment saw fourth quarter sales of $149.4 million, a 1.8% increase year-over-year, driven by new program launches [7] Market Outlook - Stoneridge anticipates a decline of approximately 3.8% in OEM market volume for 2025 [19] - The company expects MirrorEye to contribute over $50 million in incremental revenue in 2025, with total expected revenue for the year ranging from $860 million to $890 million [19] - For 2026, the company projects a revenue target of at least $975 million, supported by a 7.4% growth in weighted-average end markets [19] Cash and Debt Management - As of December 31, 2024, Stoneridge had cash and cash equivalents of $71.8 million, with net cash provided by operating activities amounting to $47.7 million [14][15] - The company amended its credit facility to provide financial covenant relief, adjusting leverage ratios for the upcoming quarters [16][17] - Stoneridge aims to achieve a compliance net debt to EBITDA leverage ratio of 2.0x to 2.5x by the end of 2025 [17]