Stoneridge(US:SRI)2022-05-08 12:19Financial Data and Key Metrics Changes - Adjusted sales for Q1 2022 were $196.6 million, reflecting a 7.5% increase compared to Q4 2021 [9][32] - Adjusted gross margin was 21.1%, with an adjusted operating margin of negative 1.5%, and adjusted EPS was negative $0.27 [9][32] - Adjusted operating margin improved by 260 basis points compared to Q4 2021, primarily due to pricing actions and lower SG&A costs [18][32] Business Line Data and Key Metrics Changes - Control Devices segment reported sales of approximately $85 million, a 6.4% increase from Q4 2021, with an adjusted operating income of $6.8 million [35][36] - Electronics segment sales were approximately $108 million, a 12.2% increase from Q4 2021, with improved adjusted operating loss due to pricing actions [39][40] - Stoneridge Brazil's sales decreased by $2 million or 13.9% compared to Q4 2021, but adjusted operating income improved due to lower direct material costs [42][43] Market Data and Key Metrics Changes - The company experienced improved stability in customer production volumes in passenger vehicle markets and strong performance in commercial vehicle and off-highway markets [15] - The company expects ongoing discussions with customers regarding price increases to offset material costs, indicating a proactive approach to market challenges [11][22] Company Strategy and Development Direction - The company is focused on growth initiatives to drive long-term profitable growth in 2022 and beyond, particularly through the MirrorEye platform [13][30] - Continued investment in electrified drivetrain architectures is planned to drive future growth for the Control Devices segment [38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from global supply chain disruptions and rising material costs but expressed optimism about improved financial performance due to pricing actions [8][19] - The company confirmed its full-year revenue and adjusted EPS guidance, raising midpoint margin expectations by 25 basis points [12][34] Other Important Information - The company has successfully offset approximately 90% of incremental supply chain costs through pricing actions agreed upon with customers [10][22] - The company expects to continue to improve margins and reduce margin risk in 2022 due to proactive measures taken in Q1 [23] Q&A Session Summary Question: What is the expectation for MirrorEye revenue in 2022? - Management expressed excitement about the momentum of MirrorEye, indicating that some upside has been incorporated into the guidance while maintaining a broader range to account for potential volatility [57][59] Question: Are supply chain constraints driving commercial momentum in MirrorEye? - Management clarified that supply chain constraints are limiting take rates, but the need for technology to attract drivers is accelerating retrofit activities [60][62] Question: What is the visibility on revenue ramp in the second half of the year? - Management indicated strong forecasted production and demand, with expectations for sequential improvements in revenue driven by both customer forecasts and internal initiatives [64][66] Question: How is the growth split between Electronics and Control Devices? - Management noted that while both segments will grow, the relative growth is expected to be more weighted towards Electronics in the second half of the year [67]