Stoneridge, Inc. today announced it anticipates that sales revenues and earnings for 2000 will be less than consensus estimates primarily as a result of softening market conditions for commercial vehicles and passenger cars, and the weak Euro. The Company’s strategic decision to withdraw from a low-margin production contract is also a factor in the lowered revenue expectations.
The Company said earnings for the year are expected to be in the range of $1.85 to $1.95 per share, compared with a current consensus estimate of $2.12 per share. Full-year financial results are anticipated to be slightly higher than in 1999, when the Company had annual sales of $675.2 million and EPS of $1.84. The Company expects the impact on sales and earnings to be felt beginning with the second quarter and last at least through the remainder of the year. Stoneridge is due to report its second quarter results in late July.
“We anticipate that our 2000 revenues will be less than originally forecasted as a result of several factors,” said Cloyd J. Abruzzo, president and chief executive officer. “Since the beginning of 2000, we have seen a gradual slowing of vehicle sales in all of our markets, especially commercial vehicles. Recent increases in interest rates and gasoline prices appear to be contributing to the acceleration of this trend. In addition, we made a business decision to withdraw from the price competition related to one of our power distribution contracts when it became apparent that the return on investment would be unacceptable. Revenues have been impacted to a lesser extent by the weakness of the Euro and customer delays in certain new vehicle launches.”
Abruzzo said, “Stoneridge has received significant new business awards during the first half of 2000 requiring increased levels of product development spending, which is having a short-term impact on earnings. However, we expect this increased product development spending to result in additional growth in the years ahead as these new products move into production for model years 2002-2004. Stoneridge remains committed to investing aggressively in those new business opportunities that will strengthen our future strategically and financially.”
Stoneridge, Inc., headquartered in Warren, Ohio, is a leading independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the automotive, medium and heavy-duty truck, agricultural and off-road vehicle markets. Sales in 1999 were approximately $675 million. Additional information about Stoneridge can be found on the World Wide Web at www.stoneridge.com .
Statements in this release that are not historical fact are forward- looking statements, which involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied in this release. Factors that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of a major customer, a decline in automotive, medium and heavy-duty truck or agricultural vehicle production, the failure to achieve successful integration of any acquired company or business, labor disputes involving the Company or its significant customers, risks associated with conducting business in foreign countries, or a decline in general economic conditions. Further information concerning issues that could materially affect financial performance related to forward-looking statements contained in this release can be found in Stoneridge’s periodic filings with the Securities and Exchange Commission.