Technology

Stoneridge Reports Second Quarter 2024 Results

Published

2 months ago

July 31, 2024

Q2 Operating Performance Significantly Outperforms Previously Provided Expectations Driven by Strong Margin Expansion

2024 Second Quarter Results

Sales of $237.1 millionGross profit of $53.7 million (22.7% of sales)Operating income of $3.4 million Adjusted operating income of $5.4 million (2.3% of sales)Adjusted EBITDA of $16.1 million (6.8% of sales)Earnings per share (“EPS”) of $0.10Adjusted EPS of $0.17

2024 Full-Year Guidance Update

Reducing full-year 2024 revenue midpoint guidance by $45 million to reflect updated FX rates (~$12 million impact), updated OEM production volumes (~$18 million impact) and potential volatility in non-OEM and customer demand-based products (~$15 million impact)Revenue guidance of $940 million – $970 million (midpoint of $955 million)Increasing gross margin midpoint guidance by 50 basis points to reflect continued material cost improvement and operational excellenceGross margin guidance of 22.75% – 23.0%Reducing adjusted operating margin and EBITDA margin expectations to reflect lower contribution from reduced revenue expectations, offset by improved gross margin performance and continued operating cost controlAdjusted operating margin guidance of ~2.75%Adjusted EBITDA guidance of $58 million – $64 million (adjusted EBITDA margin of 6.2% – 6.6%)Adjusted EPS guidance of $0.18 – $0.28 (midpoint of $0.23)

NOVI, Mich., July 31, 2024 /PRNewswire/ — Stoneridge, Inc. (NYSE: SRI) today announced financial results for the second quarter ended June 30, 2024, with sales of $237.1 million and earnings per share of $0.10. Adjusted EPS was $0.17.

For the second quarter of 2024, Stoneridge reported gross profit of $53.7 million (22.7% of sales), an increase of 250 basis points relative to the first quarter of 2024. Operating income of $3.4 million resulted in adjusted operating income of $5.4 million (2.3% of sales), an increase of 210 basis points relative to the first quarter of 2024. Adjusted EBITDA was $16.1 million (6.8% of sales), an increase of 410 basis points relative to the first quarter of 2024. Second quarter results were favorably impacted by non-operating foreign currency of approximately $2.3 million.

The exhibits attached hereto provide reconciliation detail on normalizing adjustments of non-GAAP financial measures used in this press release.

Jim Zizelman, president and chief executive officer, commented, “Our second quarter performance highlights our continued focus on improving the fundamentals of our business leading to significantly improved margins and significant outperformance relative to our prior expectations. This was primarily driven by continued material cost reductions, improved operational excellence, including reduced quality-related costs, and operating cost control as we continue to execute on the key initiatives we set at the beginning of the year. Our efforts to reduce material costs and control operating costs contributed to a 250 basis point improvement in gross margin and a 210 basis point improvement in adjusted operating margin over the first quarter. Including the benefit of non-operating FX income, adjusted EBITDA margin improved by 410 basis points over the first quarter to 6.8% of sales. We continue to improve the financial performance of the business while maintaining our robust approach to technology innovation and growth.”

Zizelman continued, “While we continue to drive operational performance improvement, we remain focused on flawless execution of the program launches that will drive strong growth going-forward. We are excited to announce that during the second quarter we began shipping our first MirrorEye OEM systems to Volvo for the launch of their FH Aero model in Europe. Similarly, our MirrorEye program with Peterbilt launched on Models 579 and 567 in North America in July. Both customers are focusing significant marketing efforts on MirrorEye as a differentiating product in the market. Initial customer feedback has been excellent. For example, Volvo recently announced one of their largest deals ever, in which they have received an order for 1,500 vehicles all of which will be equipped with MirrorEye to be delivered throughout 2024 and 2025. While we have experienced some volatility as new truck production and our programs ramp up, we expect volumes to continue to accelerate for the remainder of the year bringing take rates at least inline with our original expectations. We continue to expect MirrorEye to gain momentum in the second half of this year, as our first OEM program in Europe maintains its strong take rates and the two recently launched programs continue to ramp up in production.”

Zizelman concluded, “Our robust backlog continues to provide a strong foundation for our strategy focused on technologies and capabilities that will drive continued long-term growth. Last month, Volvo Bus announced they have selected Stoneridge to provide connected services and digital solutions using our artificial intelligence-based fuel advice system in a pilot program this year. This partnership is aligned with our ongoing focus on data services, software and AI to drive advanced system capabilities and expansion of our existing technology platforms and products to drive long-term profitable growth.”

Second Quarter in Review

Electronics sales of $153.5 million decreased by 6.4% relative to adjusted sales of the second quarter of 2023. This decrease was primarily driven by lower sales in both the European and North American commercial vehicle end markets and the impact of retroactive pricing recognized in the second quarter of 2023 of approximately $3.3 million. This is partially offset by higher sales in the European off-highway vehicle end market. Second quarter adjusted operating margin of 7.6% improved by 230 basis points relative to the adjusted operating margin of the second quarter of 2023, primarily due to lower direct material costs as a percentage of sales, as well as lower D&D and SG&A costs.

Control Devices sales of $80.9 million decreased by 13.1% relative to sales of the second quarter of 2023. This decrease was primarily due to lower sales in the North American passenger vehicle end market due to lower customer volumes and the expected wind-down of end-of-life programs as well as lower China automotive sales. Second quarter operating margin of 4.6% decreased by 130 basis points relative to the adjusted operating margin of the second quarter of 2023, primarily due to lower contribution from lower sales, partially offset by lower direct material costs as a percentage of sales and lower D&D costs.

Stoneridge Brazil sales of $11.8 million decreased by $3.1 million relative to sales in the second quarter of 2023. This decrease was primarily due to lower sales in local OEM products, tracking devices and monitoring service fees. Second quarter operating performance of approximately break-even decreased by approximately $0.9 million relative to the second quarter of 2023, primarily due to lower contribution from lower sales volumes partially offset by lower direct material costs.

Relative to the first quarter of 2024, Electronics adjusted sales of $153.5 million, decreased by $2.6 million, or 1.7%. This slight decrease was driven primarily by the unfavorable impact of foreign currency of approximately $2.2 million. Second quarter adjusted operating margin increased by 310 basis points relative to the first quarter of 2024, primarily due to material cost improvements, lower quality-related costs and lower engineering costs.

Relative to the first quarter of 2024, Control Devices sales increased by 3.7%. This increase was primarily due to higher sales in the North American passenger vehicle end market as well as higher commercial vehicle sales in China. Second quarter adjusted operating margin increased by 180 basis points relative to the first quarter of 2024, primarily due to benefits recognized from completed negotiations related to price and volume, improved operational execution and lower SG&A and D&D costs as a result of operating cost control efforts.

Relative to the first quarter of 2024, Stoneridge Brazil sales decreased by $0.4 million. This was primarily the result of the unfavorable foreign currency impact of approximately $0.6 million. Second quarter operating performance decreased by $0.2 million relative to the first quarter of 2024, primarily due to unfavorable foreign currency impact of approximately $0.2 million.

Cash and Debt Balances

As of June 30, 2024, Stoneridge had compliance net debt of $161.4 million resulting in a net debt to trailing twelve-month EBITDA compliance leverage ratio of 2.89x, an improvement of 0.24x compared to December 31, 2023.

The Company continues to focus on both operating performance and working capital improvement to drive cash performance, particularly related to inventory reduction. During the first half of the year, inventory balances declined by $9.0 million. The Company expects to continue to reduce inventory balances throughout the year. The Company expects a net debt to EBITDA ratio for compliance purposes of approximately 2.5x by the end of 2024.

2024 Outlook

The Company is updating its previously provided full-year 2024 guidance ranges including sales guidance of $940 million to $970 million, gross margin guidance of 22.75% to 23.0%, adjusted operating margin guidance of approximately 2.75%, adjusted earnings per share guidance of $0.18 to $0.28 and adjusted EBITDA guidance of $58 million to $64 million, or 6.2% to 6.6% of sales.

Matt Horvath, chief financial officer, commented, “We are updating our full-year 2024 revenue guidance to reflect updated foreign currency rates, updated OEM production volumes and current expectations for non-OEM and customer demand-based products. This results in a midpoint of $955 million for the year. Due primarily to our year-to-date performance, expectation of continued reduction in material costs and a continued focus on operational excellence, we are increasing our full-year gross margin expectations by 50 basis points. We are expecting improved gross margin and operating cost control to significantly offset the decremental impact of reduced revenue. As a result, we are reducing our adjusted EBITDA margin midpoint guidance by 30 basis points, or $61 million of adjusted EBITDA. This results in a 130 basis point margin improvement and 27% growth in adjusted EBITDA over 2023. Finally, we are reducing our full-year adjusted EPS guidance to a midpoint of $0.23 to reflect the lower contribution from reduced sales partially offset by improved operating performance.”

Horvath, concluded, “By continuing to focus on improving the fundamentals of our business, we drove significant margin expansion across our business in the second quarter. Additionally, we continue to focus on inventory reduction to improve our cash position and reduce our leverage profile. We expect to continue those efforts in the second half of the year to help drive financial performance. Stoneridge remains well positioned to outpace our underlying end market growth and drive significant earnings expansion going forward.”

Conference Call on the Web
A live Internet broadcast of Stoneridge’s conference call regarding 2024 second quarter results can be accessed at 9:00 a.m. Eastern Time on Thursday, August 1, 2024, at www.stoneridge.com, which will also offer a webcast replay.

About Stoneridge, Inc.
Stoneridge, Inc., headquartered in Novi, Michigan, is a global designer and manufacturer of highly engineered electrical and electronic systems, components and modules for the automotive, commercial, off-highway and agricultural vehicle markets. Additional information about Stoneridge can be found at www.stoneridge.com.

Forward-Looking Statements
Statements in this press release contain “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this report and may include statements regarding the intent, belief or current expectations of the Company, with respect to, among other things, our (i) future product and facility expansion, (ii) acquisition strategy, (iii) investments and new product development, (iv) growth opportunities related to awarded business, and (v) operational expectations. Forward-looking statements may be identified by the words “will,” “may,” “should,” “designed to,” “believes,” “plans,” “projects,” “intends,” “expects,” “estimates,” “anticipates,” “continue,” and similar words and expressions. The forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among other factors:

the ability of our suppliers to supply us with parts and components at competitive prices on a timely basis, including the impact of potential tariffs and trade considerations on their operations and output;fluctuations in the cost and availability of key materials and components (including semiconductors, printed circuit boards, resin, aluminum, steel and copper) and our ability to offset cost increases through negotiated price increases with our customers or other cost reduction actions, as necessary;global economic trends, competition and geopolitical risks, including impacts from ongoing or potential global conflicts and any related sanctions and other measures, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and other countries;our ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions;the reduced purchases, loss or bankruptcy of a major customer or supplier;the costs and timing of business realignment, facility closures or similar actions;a significant change in automotive, commercial, off-highway or agricultural vehicle production;competitive market conditions and resulting effects on sales and pricing;foreign currency fluctuations and our ability to manage those impacts;customer acceptance of new products;our ability to successfully launch/produce products for awarded business;adverse changes in laws, government regulations or market conditions affecting our products, our suppliers, or our customers’ products;our ability to protect our intellectual property and successfully defend against assertions made against us;liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers;labor disruptions at our facilities, or at any of our significant customers or suppliers;business disruptions due to natural disasters or other disasters outside of our control;the amount of our indebtedness and the restrictive covenants contained in the agreements governing our indebtedness, including our revolving Credit Facility;capital availability or costs, including changes in interest rates;the failure to achieve the successful integration of any acquired company or business;risks related to a failure of our information technology systems and networks, and risks associated with current and emerging technology threats and damage from computer viruses, unauthorized access, cyber-attack and other similar disruptions; andthe items described in Part I, Item IA (“Risk Factors”) in our Form 10-K filed with the SEC.

The forward-looking statements contained herein represent our estimates only as of the date of this release and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, whether to reflect actual results, changes in assumptions, changes in other factors affecting such forward-looking statements or otherwise.

Use of Non-GAAP Financial Information
This press release contains information about the Company’s financial results that is not presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. The provision of these non-GAAP financial measures for 2024 and 2023 is not intended to indicate that Stoneridge is explicitly or implicitly providing projections on those non-GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict.

Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that adjusted sales, adjusted operating income and margin, adjusted income (loss) before tax, adjusted income tax expense (benefit), adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, adjusted net debt, adjusted debt and adjusted cash are useful measures in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company’s core operating performance or that may obscure trends useful in evaluating the Company’s continuing operating activities. Management also believes that these measures are useful to both management and investors in their analysis of the Company’s results of operations and provide improved comparability between fiscal periods.

Adjusted sales, adjusted operating income and margin, adjusted income (loss) before tax, adjusted income tax expense (benefit), adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, adjusted net debt, adjusted debt and adjusted cash should not be considered in isolation or as a substitute for sales, operating income, income (loss) before tax, income tax expense (benefit), net income, EPS, debt, cash and cash equivalents, cash provided by operating activities or other income statement or cash flow statement data prepared in accordance with GAAP.

CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30,
2024

December 31,
2023

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$ 42,112

$ 40,841

Accounts receivable, less reserves of $620 and $1,058, respectively

168,215

166,545

Inventories, net

178,749

187,758

Prepaid expenses and other current assets

32,882

34,246

Total current assets

421,958

429,390

Long-term assets:

Property, plant and equipment, net

103,061

110,126

Intangible assets, net

43,586

47,314

Goodwill

34,244

35,295

Operating lease right-of-use asset

8,722

10,795

Investments and other long-term assets, net

55,080

46,980

Total long-term assets

244,693

250,510

Total assets

$ 666,651

$ 679,900

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Current portion of debt

$ 2,064

$ 2,113

Accounts payable

108,085

111,925

Accrued expenses and other current liabilities

76,098

64,203

Total current liabilities

186,247

178,241

Long-term liabilities:

Revolving credit facility

187,417

189,346

Deferred income taxes

6,276

7,224

Operating lease long-term liability

5,814

7,684

Other long-term liabilities

10,446

9,688

Total long-term liabilities

209,953

213,942

Shareholders’ equity:

Preferred Shares, without par value, 5,000 shares authorized, none issued

—

Common Shares, without par value, 60,000 shares authorized, 28,966 and

28,966 shares issued and 27,679 and 27,549
shares outstanding at June 30, 2024 and December 31, 2023, respectively,

with no stated value

—

Additional paid-in capital

224,599

227,340

Common Shares held in treasury, 1,287 and 1,417 shares at June 30, 2024

and December 31, 2023, respectively, at cost

(39,066)

(43,344)

Retained earnings

193,169

196,509

Accumulated other comprehensive loss

(108,251)

(92,788)

Total shareholders’ equity

270,451

287,717

Total liabilities and shareholders’ equity

$ 666,651

$ 679,900

CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended
June 30,

Six months ended
June 30,

(in thousands, except per share data)

2024

2023

2024

2023

Net sales

$ 237,059

$ 266,814

$ 476,216

$ 508,139

Costs and expenses:

Cost of goods sold

183,319

206,326

374,119

404,849

Selling, general and administrative

31,876

33,491

62,299

63,354

Design and development

18,457

22,666

36,060

39,634

Operating income

3,407

4,331

3,738

302

Interest expense, net

3,801

3,120

7,435

5,866

Equity in loss of investee

329

500

Other (income) expense, net

(2,296)

2,387

(260)

3,535

Income (loss) before income taxes

1,850

(1,505)

(3,766)

(9,599)

(Benefit) provision for income taxes

(936)

1,487

(426)

779

Net income (loss)

$ 2,786

$ (2,992)

$ (3,340)

$ (10,378)

Income (loss) per share:

Basic

$ 0.10

$ (0.11)

$ (0.12)

$ (0.38)

Diluted

$ 0.10

$ (0.11)

$ (0.12)

$ (0.38)

Weighted-average shares outstanding:

Basic

27,611

27,452

27,570

27,400

Diluted

27,853

27,452

27,570

27,400

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended June 30, (in thousands)

2024

2023

OPERATING ACTIVITIES:

Net loss

$ (3,340)

$ (10,378)

Adjustments to reconcile net loss to net cash provided by (used for) operating activities:

Depreciation

13,054

13,161

Amortization, including accretion and write-off of deferred financing costs

4,440

4,004

Deferred income taxes

(7,004)

(3,782)

Loss of equity method investee

329

500

Loss (gain) on sale of fixed assets

258

(854)

Share-based compensation expense

2,207

1,271

Excess tax deficiency related to share-based compensation expense

238

Changes in operating assets and liabilities:

Accounts receivable, net

(6,094)

(28,100)

Inventories, net

3,438

(23,142)

Prepaid expenses and other assets

(1,038)

3,313

Accounts payable

(849)

27,069

Accrued expenses and other liabilities

12,123

12,184

Net cash provided by (used for) operating activities

17,762

(4,688)

INVESTING ACTIVITIES:

Capital expenditures, including intangibles

(12,920)

(18,025)

Proceeds from sale of fixed assets

222

1,729

Investment in venture capital fund, net

(260)

—

Net cash used for investing activities

(12,958)

(16,296)

FINANCING ACTIVITIES:

Revolving credit facility borrowings

57,000

42,000

Revolving credit facility payments

(58,000)

(38,068)

Proceeds from issuance of debt

17,677

16,402

Repayments of debt

(17,690)

(18,086)

Repurchase of Common Shares to satisfy employee tax withholding

(666)

(1,325)

Net cash (used for) provided by financing activities

(1,679)

923

Effect of exchange rate changes on cash and cash equivalents

(1,854)

(32)

Net change in cash and cash equivalents

1,271

(20,093)

Cash and cash equivalents at beginning of period

40,841

54,798

Cash and cash equivalents at end of period

$ 42,112

$ 34,705

Supplemental disclosure of cash flow information:

Cash paid for interest, net

$ 8,003

$ 5,622

Cash paid for income taxes, net

$ 4,372

$ 5,927

Regulation G Non-GAAP Financial Measure Reconciliations

Exhibit 1 – Reconciliation of Adjusted EPS

Reconciliation of Q2 2024 Adjusted EPS

(USD in millions, except EPS)

Q2 2024

Q2 2024 EPS

Net Income

$ 2.8

$ 0.10

Add: After-Tax Business Realignment Costs

1.9

0.07

Adjusted Net Income

$ 4.7

$ 0.17

Exhibit 2 – Reconciliation of Adjusted EBITDA

(USD in millions)

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Income (Loss) Before Tax

$ (8.1)

$ (1.5)

$ 4.4

$ 3.2

$ (5.6)

$ 1.9

Interest expense, net

2.7

3.1

3.3

3.8

3.6

3.8

Depreciation and amortization

8.3

8.4

8.5

8.4

8.6

8.5

EBITDA

$ 3.0

$ 10.0

$ 16.2

$ 15.5

$ 6.6

$ 14.2

Add: Pre-Tax Business Realignment Costs

1.3

1.9

1.2

0.1

—

1.9

Less: Pre-Tax Gain on Disposal of Fixed Assets

(0.8)

—

Add: Pre-Tax Environmental Remediation Costs

0.1

—

Add: Pre-Tax Brazilian Indirect Tax Credits, Net

—

(0.5)

—

Adjusted EBITDA

$ 3.6

$ 11.9

$ 17.0

$ 15.6

$ 6.6

$ 16.1

Exhibit 3 – Reconciliation of Adjusted Operating Income

(USD in millions)

Q1 2024

Q2 2024

Operating Income

$ 0.3

$ 3.4

Add: Pre-Tax Business Realignment Costs

—

1.9

Adjusted Operating Income

$ 0.3

$ 5.4

Exhibit 4 – Segment Adjusted Operating Income

Reconciliation of Control Devices Adjusted Operating Income

(USD in millions)

Q2 2023

Q1 2024

Q2 2024

Control Devices Operating Income

$ 5.1

$ 2.2

$ 3.7

Add: Pre-Tax Business Realignment Costs

0.4

—

Control Devices Adjusted Operating Income

$ 5.5

$ 2.2

$ 3.7

Reconciliation of Electronics Adjusted Operating Income

(USD in millions)

Q2 2023

Q1 2024

Q2 2024

Electronics Operating Income

$ 7.4

$ 7.1

$ 9.8

Add: Pre-Tax Business Realignment Costs

1.3

—

1.9

Electronics Adjusted Operating Income

$ 8.8

$ 7.1

$ 11.7

Exhibit 5 – Reconciliation of Electronics Adjusted Sales

(USD in millions)

Q2 2023

Q1 2024

Q2 2024

Electronics Sales

$ 168.3

$ 156.1

$ 153.5

Less: Sales from Spot Purchases Recoveries

(4.4)

—

Electronics Adjusted Sales

$ 163.9

$ 156.1

$ 153.5

Exhibit 6 – Reconciliation of Adjusted Tax Rate

Reconciliation of Q2 2024 Adjusted Tax Rate

(USD in millions)

Q2 2024

Tax Rate

Income Before Tax

$ 1.9

Add: Pre-Tax Business Realignment Costs

1.9

Adjusted Income Before Tax

$ 3.8

Income Tax Benefit

(0.9)

(50.6) %

Add: Tax Impact from Pre-Tax Adjustments

–

Adjusted Income Tax Benefit on Adjusted Income Before Tax

$ (0.9)

(24.3) %

Exhibit 7 – Reconciliation of Compliance Leverage Ratio

Reconciliation of Adjusted EBITDA for Compliance Calculation

(USD in millions)

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Income (Loss) Before Tax

$ (8.1)

$ (1.5)

$ 4.4

3.2

(5.6)

1.9

Interest Expense, net

2.7

3.1

3.3

3.8

3.6

3.8

Depreciation and Amortization

8.3

8.4

8.5

8.4

8.6

8.5

EBITDA

$ 3.0

$ 10.0

$ 16.2

$ 15.5

$ 6.6

$ 14.2

Compliance adjustments:

Add: Non-Cash Impairment Charges and Write-offs or Write Downs

—

0.2

—

Add: Adjustments from Foreign Currency Impact

1.4

3.1

0.4

(0.7)

2.2

(2.4)

Add: Extraordinary, Non-recurring or Unusual Items

0.2

—

0.5

—

Add: Cash Restructuring Charges

1.4

0.5

0.1

0.3

1.6

0.5

Add: Charges for Transactions, Amendments, and Refinances

—

0.3

—

Add: Adjustment to Autotech Fund II Investment

0.2

0.3

0.1

(0.1)

0.3

0.1

Adjusted EBITDA (Compliance)

$ 6.1

$ 13.9

$ 17.4

$ 15.3

$ 10.9

$ 12.3

Adjusted TTM EBITDA (Compliance)

$ 52.7

$ 57.5

$ 55.9

Reconciliation of Adjusted Cash for Compliance Calculation

(USD in millions)

Q4 2023

Q1 2024

Q2 2024

Total Cash and Cash Equivalents

$ 40.8

$ 48.4

$ 42.1

Less: 35% of Cash in Foreign Locations

(12.8)

(14.8)

(12.5)

Total Adjusted Cash (Compliance)

$ 28.0

$ 33.6

$ 29.6

Reconciliation of Adjusted Debt for Compliance Calculation

(USD in millions)

Q4 2023

Q1 2024

Q2 2024

Total Debt

$ 191.5

$ 196.5

$ 189.5

Outstanding Letters of Credit

1.6

Total Adjusted Debt (Compliance)

$ 193.0

$ 198.1

$ 191.1

Adjusted Net Debt (Compliance)

$ 165.0

$ 164.5

$ 161.4

Compliance Leverage Ratio (Net Debt / TTM EBITDA)

3.13x

2.86x

2.89x

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SOURCE Stoneridge, Inc.

Technology

Fiery to be Acquired by Epson

Published

2 hours ago

September 18, 2024

The wholesale purchase acquisition will preserve Fiery as an independent DFE provider and strengthen its industry leadership.

FREMONT, Calif., Sept. 18, 2024 /PRNewswire/ — Fiery, LLC (“Fiery”), the print industry’s leading innovator of digital front ends (DFEs) and workflow software, today announced that Fiery’s ownership has entered into an agreement with Seiko Epson Corporation (“Epson”) whereby Epson will acquire Fiery from Siris Capital Group, LLC (“Siris”, together with its affiliates, including Electronics for Imaging, Inc.) in a transaction valued at approximately $591 million.

Fiery’s industry-leading products have enabled the exceptional color, personalization, performance, and efficiency that print businesses have relied on for more than three decades. Fiery’s software, server, and workflow solutions will complement Epson’s strategic vision and hardware leadership to drive growth across a broad range of print devices and applications.

By joining Epson, a global leader in innovation, Fiery is better positioned to scale, drive innovation, and continue delivering cutting-edge solutions to its customers while maintaining its independence in areas where the company excels.

Following the consummation of the transaction, Fiery will continue to operate as an independent provider of DFEs and workflow solutions to empower OEM partners to deliver the best possible output from their devices and accelerate the development of digital printing around the world.

“Epson’s acquisition of Fiery showcases the uniquely important role we play in enabling success across the entire print industry,” said Toby Weiss, CEO of Fiery. “Fiery has a demonstrated track record of empowering OEM partners to deliver the best possible results for its customers, and we look forward to building upon this legacy with Epson and our valued partners. I’d also like to thank Frank and the entire Siris team for their invaluable guidance and expertise.”

“We are delighted to welcome Fiery into the Epson Group. We are confident that this agreement will not only drive further growth in our commercial and industrial printing businesses but also accelerate the digital transformation of the analog printing market in an innovative way,” said Yasunori Ogawa, President and Representative Director, Epson. “Together with Fiery, we remain committed to contributing to our customers’ success and enhancing corporate value as we pursue new opportunities in the evolving printing landscape.”

Siris acquired Fiery as part of Siris’s take-private acquisition of Electronics for Imaging, Inc. (“EFI”) in 2019. Under Siris’ ownership, Fiery separated from EFI in 2021 to become an independent company.

“Under our ownership, Toby and the Fiery team accelerated investments in innovative technologies and expanded the product portfolio for the benefit of their OEM partners,” said Frank Baker, a Co-Founder and Managing Partner at Siris. “Epson is the ideal partner for Fiery’s next chapter, and we look forward to seeing how Fiery builds upon its leading position within the print industry moving forward.”

DC Advisory and UBS Investment Bank acted as exclusive financial advisors to EFI in connection with the sale of its interests in Fiery to Epson.

The transaction remains subject to customary closing conditions including regulatory approvals and is expected to close within 2024.

About Fiery
Fiery is the leading provider of digital front ends (DFEs) and workflow solutions for the global print industry. With a customer base that includes over 2 million DFEs sold worldwide, Fiery’s industry-leading software and cloud-based technologies deliver the best possible performance, color, and print quality across a broad range of production printing devices.

Fiery’s innovative solutions empower commercial print, industrial, packaging, signs and display graphics, ceramics, building materials, textiles, and more. Through over 30 years of excellent support and service, Fiery has built an unmatched community of customers, dealers, and partners.

About Epson
Epson is a global technology leader whose philosophy of efficient, compact and precise innovation enriches lives and helps create a better world. The company is focused on solving societal issues through innovations in home and office printing, commercial and industrial printing, manufacturing, visual and lifestyle. Epson’s goal is to become carbon negative and eliminate use of exhaustible underground resources such as oil and metal by 2050.

Led by the Japan-based Seiko Epson Corporation, the worldwide Epson Group generates annual sales of more than JPY 1 trillion. www.global.epson.com

About Siris
Siris is a leading private equity firm that targets control investments in companies that provide mission-critical technology infrastructure. Siris leverages its network of exclusive Executive Partners to identify opportunities and drive strategic and operational value. Siris is based in New York and West Palm Beach and has approximately $7 billion in assets under management as of September 30, 2023.

Forward-Looking Statements
Except for historical information, all other information in this communication consists of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, and related oral statements Fiery may make, are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. For example, (1) conditions to the closing of the transaction may not be satisfied, (2) the timing of completion of the transactions is uncertain, (3) the business of Fiery may suffer as a result of uncertainty surrounding the transaction, (4) events, changes or other circumstances could occur that could give rise to the termination of the agreement, (5) there are risks related to disruption of the management’s attention from the ongoing business operations of Fiery due to the transaction, (6) the announcement or pendency of the transaction could affect the relationships of Fiery with its clients, operating results and business generally, including on the ability of Fiery to retain employees, (7) the outcome of any legal proceedings initiated against Fiery following the announcement of the transaction could adversely affect Fiery, including the ability to consummate the transaction, and (8) Fiery may be adversely affected by other economic, business, and/or competitive factors, as well as management’s response to any of the aforementioned factors. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere. Fiery does not undertake any obligation to update, correct or otherwise revise any forward-looking statements.

Fiery is a registered trademarks of Fiery, LLC in the U.S. and/or certain other countries. All other terms and product names may be trademarks or registered trademarks of their respective owners and are hereby acknowledged.

Nothing herein should be construed as a warranty in addition to the express warranty statements provided with Fiery products and services.

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SOURCE Fiery

Technology

Siris Announces Sale of Fiery to Seiko Epson Corporation

Published

2 hours ago

September 18, 2024

During its ownership period, Siris partnered with Fiery to expand product portfolio and deepen strategic partnerships

NEW YORK, Sept. 18, 2024 /PRNewswire/ — Siris (together with its affiliates, including Electronics for Imaging, “Siris”), a leading private equity firm focused on investing and driving value creation in technology companies, today announced the sale of Fiery, LLC (“Fiery”) to global technology leader Seiko Epson Corporation (“Epson”) in a transaction valued at approximately $591 million.

Fiery is a leading provider of digital front end (“DFE”) servers and workflow solutions for the growing industrial and graphic arts print sectors. Utilizing a combination of software and cloud-based technologies, Fiery has a demonstrated track record of delivering fast performance, stunning color and exceptional print quality across a broad range of production printing devices.

Fiery was acquired as part of Siris’ take-private acquisition of EFI in 2019. As part of its value creation strategy, Siris operationalized Fiery as an independent company in order to position it for a strategic exit. The divestiture of Fiery is the second carveout that Siris has completed from the broader EFI portfolio, after previously selling eProductivity Software to Symphony Technology Group, announced in 2022.

“Since our investment in Fiery in 2019, Toby and the team have grown the company’s leadership position in the DFE market, making significant progress expanding the product portfolio and deepening strategic partnerships,” said Frank Baker, a Co-Founder and Managing Partner at Siris. “Our partnership with Fiery is a great example of how we partner with management teams to drive value and position companies for continued long-term success. We look forward to seeing how the company continues to thrive with Epson moving forward.”

Mr. Baker added, “Post separation and divestiture of Fiery and eProductivity Software, EFI is now a streamlined, leading provider of industrial inkjet solutions for the display graphics, packaging and textiles industries with a broad range of printers, inks and service capabilities. We will continue to support EFI as it drives the exciting digital printing transition across a broad range of industrial end markets globally.”

“With Siris’ partnership and investment, we successfully raised the standards of digital printing excellence across a diverse range of operating segments,” said Toby Weiss, Chief Executive Officer of Fiery. “We are thrilled to embark on our next phase of growth alongside Epson, as we continue to provide our customers with dynamic solutions for their digital printing needs.”

The transaction is expected to close within 2024, subject to customary closing conditions including required regulatory approvals. Upon transaction close, Fiery will become part of the Epson group, retain its current name and organizational structure and continue to operate from its existing offices.

DC Advisory and UBS Investment Bank acted as exclusive financial advisors to EFI in connection with the sale of its interests in Fiery, LLC to Seiko Epson Corporation. Sidley Austin LLP served as legal advisor to Siris.

About Siris

Siris is a leading private equity firm that targets control investments in companies that provide mission-critical technology infrastructure. Siris leverages its network of exclusive Executive Partners to identify opportunities and drive strategic and operational value. Siris is based in New York and West Palm Beach and has approximately $7 billion in assets under management as of December 31, 2023. https://siris.com/

About Fiery

Fiery is the leading provider of digital front ends (DFEs) and workflow solutions for the global print industry. With a customer base that includes over 2 million DFEs sold worldwide, Fiery’s industry-leading software and cloud-based technologies deliver the best possible performance, color, and print quality across a broad range of production printing devices.

Forward-Looking Statements

Except for historical information, all other information in this communication consists of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, and related oral statements Siris may make, are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. For example, (1) conditions to the closing of the transaction may not be satisfied, (2) the timing of completion of the transactions is uncertain, (3) the business of Fiery may suffer as a result of uncertainty surrounding the transaction, (4) events, changes or other circumstances could occur that could give rise to the termination of the agreement, (5) there are risks related to disruption of the management’s attention from the ongoing business operations of Fiery due to the transaction, (6) the announcement or pendency of the transaction could affect the relationships of Fiery with its clients, operating results and business generally, including on the ability of Fiery to retain employees, (7) the outcome of any legal proceedings initiated against Fiery following the announcement of the transaction could adversely affect Fiery, including the ability to consummate the transaction, and (8) Fiery may be adversely affected by other economic, business, and/or competitive factors, as well as management’s response to any of the aforementioned factors.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere. Siris does not undertake any obligation to update, correct or otherwise revise any forward-looking statements.

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SOURCE Siris Capital Group, LLC

Technology

Inspection Robots Market to Grow by USD 5.70 Billion from 2024-2028, with AI Driven Advantages Over Manual Methods Boosting Revenue – Technavio Report

Published

3 hours ago

September 18, 2024

NEW YORK, Sept. 18, 2024 /PRNewswire/ — Report with the AI impact on market trends- The global inspection robots market size is estimated to grow by USD 5.70 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of almost 19.86% during the forecast period. Advantages of robotic inspection over manual inspection is driving market growth, with a trend towards shift towards cloud-based solutions in inspection robots. However, rising levels of unemployment due to use of robotics poses a challenge. Key market players include Blue Origin Enterprises LP, Cognex Corp., Cross Co., Cyberhawk Innovations, Eddyfi Technologies, FARO Technologies Inc., Flyability SA, GECKO ROBOTICS INC., General Electric Co., Genesis Systems, Groupe Gorge SA, Invert Robotics Group Ltd., IPG Photonics Corp., JH Robotics Inc, Mistras Group Inc., Robotic Automation Systems, SuperDroid Robots Inc., TechnipFMC plc, and Teradyne Inc..

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Forecast period

2024-2028

Base Year

2023

Historic Data

2018 – 2022

Segment Covered

Type (ROVs and Autonomous robots), End-user (Oil and gas, Petrochemicals, Food and beverages, and Others), and Geography (Europe, North America, APAC, South America, and Middle East and Africa)

Region Covered

Europe, North America, APAC, South America, and Middle East and Africa

Key companies profiled

Blue Origin Enterprises LP, Cognex Corp., Cross Co., Cyberhawk Innovations, Eddyfi Technologies, FARO Technologies Inc., Flyability SA, GECKO ROBOTICS INC., General Electric Co., Genesis Systems, Groupe Gorge SA, Invert Robotics Group Ltd., IPG Photonics Corp., JH Robotics Inc, Mistras Group Inc., Robotic Automation Systems, SuperDroid Robots Inc., TechnipFMC plc, and Teradyne Inc.

Key Market Trends Fueling Growth

The global inspection robots market is experiencing notable growth due to the adoption of cloud-based solutions. Cloud computing technologies are increasingly being utilized in this industry to facilitate data storage, processing, and analysis. Cloud-based inspection robots offer several advantages, including scalability, flexibility, and accessibility. Users can access inspection data from any location and collaborate with remote teams in real-time. Predictive maintenance is also facilitated through the analysis of historical inspection data. Cloud platforms enable secure sharing of inspection data among authorized users, promoting collaborative workflows and knowledge sharing. Real-time communication and updates ensure that stakeholders remain informed about inspection activities and results. The shift towards cloud-based solutions is driving the growth potential of the global inspection robots market by enhancing efficiency and effectiveness in inspection operations, improving asset management, and boosting overall performance.

Inspection robots are gaining popularity in various industries due to the need for worker safety and the adoption of collaborative robots or cobots. These robots are equipped with sensors, cameras, and specialized tools to collect data from assets in manufacturing, construction, energy, and other sectors. They can access hard-to-reach areas, hazardous environments, and confined spaces, providing real-time visual information for maintenance assessment and safety inspections. Businesses are recognizing the complementary need for human workers and robots, with robots taking on repetitive, dangerous, or time-consuming tasks. Initial investment in inspection robots includes training and infrastructure modifications, but the long-term benefits include increased cost-efficiency, consistency, and informed decisions based on real-time data. However, economic downturns and travel restrictions may hinder robot deployment, making it essential for businesses to consider the versatility and advanced sensors of inspection robots, such as lidar, for maximum effectiveness. Despite the initial costs, the benefits of worker safety, human intervention, and data collection make inspection robots a worthwhile investment.

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Market Challenges

The integration of robots and robotic applications in various industries, including manufacturing, has significantly boosted productivity, economies of scale, and cost savings. However, this automation trend raises concerns about employment, as it may lead to job losses. Process automation, fueled by machine learning and artificial intelligence, is increasingly common in manufacturing, transportation, finance, and energy management. While these technologies offer performance advantages, they also pose a threat to white-collar and blue-collar jobs, particularly those involving routine, process-driven tasks. Unemployment resulting from automation may lead to income inequality and a need for workforce skill development. Governments in North America and Europe are addressing this challenge by formulating strategies to mitigate the impact of robotic automation on employment. As a result, the rising unemployment rate may hinder the growth of the global inspection robots market during the forecast period.The Inspection Robots Market is experiencing significant growth due to the increasing demand for automation in various industries. However, challenges persist. Injuries and accidents during robot operation pose safety concerns. Data organization and operational costs are key challenges in implementing robot inspections. Integration of cameras, electronics, and operating software requires specialized skills. Robots must navigate hazardous situations, making safety a top priority. The Hotel and Transport industries are major adopters, with the Internet of Things and Artificial Intelligence driving innovation. However, lack of standardization and testing methodologies hinder market growth. Mobile robots in the Mobile Robots segment lead in terms of adoption due to their ease of use and versatility. The Pharmaceutical segment benefits from robots’ efficiency and accuracy in product inspection. Patents and intellectual property are crucial for market leaders like Cognite, Honeybee Robotics, Universal Robots, Inuktun Services, LEO Robotics, and Superdroid Robotics. Robot types include collaborative robots and human-robot cooperation models, with AI and quadruped robot dogs leading the way. Safety, ease of use, and specialized training are essential considerations. Testing Type, such as non-destructive testing and visual inspection, are critical applications. The market’s future lies in the development of more advanced robots and the integration of AI for improved human-robot cooperation in quality control.

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Segment Overview

This inspection robots market report extensively covers market segmentation by

Type 1.1 ROVs1.2 Autonomous robotsEnd-user 2.1 Oil and gas2.2 Petrochemicals2.3 Food and beverages2.4 OthersGeography 3.1 Europe3.2 North America3.3 APAC3.4 South America3.5 Middle East and Africa

1.1 ROVs- ROV (Remotely Operated Vehicles), also known as inspection robots, are mobile devices controlled from a central unit, typically tethered through a cable. Their diverse shapes and designs increase flexibility and performance, driving market growth. ROVs, primarily used for underwater exploration and inspection, have low power requirements and are easy to operate. Their affordability, low maintenance costs, and suitability for confined spaces make them popular in industries requiring assistance in navigating critical areas. These factors contribute to the revenue generation of the ROV inspection robot market.

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Research Analysis

Inspection robots are revolutionizing industries by automating quality control and product inspection processes, enhancing efficiency and accuracy while ensuring worker safety. These robots, including Cognite’s quadruped robot dog and ANYbotics’ human-robot cooperation models, employ AI and machine learning to identify faults, failures, leakages, and other critical issues. The adoption of cobots, such as those from Universal Robots and Mitsubishi Electric Corporation, allows for human-robot cooperation in various scenarios. Inspection robots are essential in unmanned facilities, remote locations, and harsh environments, where human presence is limited or dangerous. These robots can navigate complex terrain, inspect hard-to-reach areas, and work in extreme temperatures, ensuring the quality of products and the reliability of transportation systems. Fully autonomous inspection robots are increasingly being adopted to streamline processes and reduce costs, making them an indispensable tool for modern manufacturing and production.

Market Research Overview

Inspection robots are transforming industries by providing efficient and accurate solutions for quality control and maintenance assessment in various sectors. These robots, including quadruped robot dogs, utilize AI and collaborative robots for human-robot cooperation. They are equipped with sensors, cameras, and specialized tools to inspect assets and infrastructure in manufacturing, energy, construction, and other industries. The adoption of these robots is a complementary need to human workers, enhancing safety and consistency in product inspection and maintenance. Inspection robots are particularly valuable in harsh environments, confined spaces, and hazardous areas, where human intervention is risky or inefficient. Real-time data collection and analysis enable informed decisions, increasing cost-efficiency and effectiveness. Advanced sensors, such as lidar, ultrasonic, and thermal imaging, enable accurate defect detection and anomaly identification, leading to predictive maintenance and inspection efficiency. Businesses are investing in inspection robots to improve safety, reliability, and productivity. However, initial investment, training, and infrastructure modifications can be significant. Economic downturns and travel restrictions may impact robot deployment, but the long-term benefits outweigh the costs. Inspection robots are customizable, with options for mobile service robots, vision sensors, and semi-autonomous or fully autonomous operation. They are essential for critical scenarios, unmanned facilities, and remote locations, providing real-time data for informed decisions and ensuring safety in various industries, including aerospace, automotive, and oil and gas.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

TypeROVsAutonomous RobotsEnd-userOil And GasPetrochemicalsFood And BeveragesOthersGeographyEuropeNorth AmericaAPACSouth AmericaMiddle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/

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SOURCE Technavio