NOVI—Stoneridge Inc. (NYSE: SRI) reported first quarter net income of $130,000 or less than a penny a share in the first quarter, down from $3.5 million or 13 cents a share in the first quarter of 2020. Revenue was $193.8 million, up from $183 million in the first quarter a year earlier.
The company also reduced its full-year adjusted earnings per share guidance by 13 cents to a midpoint of 55 cents a share, due mostly to a trend toward less profitable products sold, higher costs, and foreign currency exchange rates.
Said Jon DeGaynor, president and CEO: “In the first quarter we delivered strong financial performance and exceeded our previously outlined expectations from both a revenue and earnings perspective. Most importantly, we achieved our operating objectives with strong operational efficiency and reduced controllable costs. However, similar to companies in our industry and around the world, we incurred incremental costs related to global supply chain disruptions which reduced our adjusted operating income by $2.7 million, or more than 40%, in the quarter. We will continue to execute on the things that we can control as we respond efficiently and effectively to the macroeconomic environment. During the quarter, we continued the transformation of the company by finalizing an agreement to divest our soot sensor business, which is yet another transaction that will allow us to focus our resources on the technology platforms that will drive future growth. We continue to expand our MirrorEye platform, as we prepare for our first OEM launches in the second half of 2021 and expand our retrofit programs. During the quarter, we announced that two fleets, Maverick and Montgomery, intend to install MirrorEye on 100% of their new trucks. In addition, we are excited to announce our partnership with PACCAR with the launch of our digital instrument cluster on their recently introduced heavy- and medium-duty trucks.”
Control devices adjusted sales, excluding the impact of the recently divested soot sensor business, totaled $97.6 million, a decrease of $300,000 million relative to the fourth quarter of 2020. First quarter adjusted operating margin, excluding the impact of the recently divested business, was 11.1%, a decrease of 140 basis points relative to the fourth quarter of 2020 primarily due to incremental costs related to supply chain related issues impacting gross margin.
Electronics sales totaled $88.7 million, an increase of $4.7 million relative to the fourth quarter of 2020 primarily due to increased sales in the off-highway end market as well as a favorable foreign currency impact of $1.0 million. First quarter adjusted operating margin was (0.7%), which was a decrease of 590 basis points relative to the fourth quarter of 2020 primarily driven by increased material and expediting costs as a result of supply chain disruptions, unfavorable product mix and incremental investment in engineering resources.
Stoneridge Brazil sales of $11.4 million decreased by $1.9 million relative to the fourth quarter of 2020 due to challenging macroeconomic conditions reducing demand in local end markets and unfavorable foreign currency impact of ($0.2 million). Stoneridge Brazil adjusted operating margin decreased by 90 basis points relative to the fourth quarter of 2020 primarily due to lower SG&A cost leverage from reduced sales offset by higher gross margin by 200 basis points.
As of March 31, Stoneridge had cash and cash equivalents balances totaling $60.5 million. Total debt as of March 31, 2021 was $158.7 million. Total debt less cash and cash equivalents yielded a current net debt to trailing-twelve-month adjusted EBITDA ratio of approximately 2.9x. The Company expects to return to a more normalized net debt to trailing-twelve month adjusted EBITDA ratio of less than 2.0x by the end of 2021.
To listen to a replay of a conference call discussing these results, visit www.stoneridge.com.
Stoneridge, headquartered in Novi, is an independent designer and manufacturer of electrical and electronic components, modules and systems principally for the automotive, commercial, off-highway, motorcycle and agricultural vehicle markets.