Stoneridge (SRI) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales were $213.8 million, down 9.8% sequentially and 10.2% year-over-year, impacted by seasonality, macroeconomic pressures, and reduced production volumes across all major end markets and geographies.

• Operational efficiency improvements and cost controls reduced quality-related and operating expenses, partially offsetting market headwinds.

• Year-to-date cash performance improved by $31.3 million versus the prior year, driven by working capital improvements and an $11.3 million inventory reduction.

• Key growth initiatives include new business awards and program launches, notably MirrorEye becoming standard on several OEM platforms and the first Leak Detection Module program for a hybrid vehicle in China.

• Reported a Q3 2024 net loss of $7.1 million ($(0.26) per share), compared to net income of $2.2 million in Q3 2023.

Financial highlights

• Q3 2024 net sales: $213.8 million, down from $237.1 million in Q2 2024 and $238.2 million in Q3 2023.

• Adjusted gross profit was $44.6 million (20.9% margin), down from $53.7 million (22.7%) in Q2 2024.

• Adjusted operating income was $0.7 million (0.3% margin), compared to $5.4 million (2.3%) in Q2 2024.

• Adjusted EBITDA was $9.2 million (4.3% margin), down from $16.1 million (6.8%) in Q2 2024, impacted by lower sales and $2.6 million in net non-operating expenses.

• Cash and cash equivalents at quarter-end were $54.1 million.

Outlook and guidance

• 2024 revenue guidance updated to $895–$905 million (midpoint $900 million), reflecting a 3.6% decline in weighted average end markets and continued production headwinds.

• Adjusted gross margin expected at ~21.5%; adjusted operating margin at ~1.0%; adjusted EBITDA $42–$44 million (~4.7% of sales); adjusted EPS $(0.35)–$(0.40).

• MirrorEye revenue for 2024 expected at $65–$70 million, a 25% increase year-over-year but below initial expectations.

• Focus remains on operational improvements, cost reduction, and cash performance to offset revenue declines and provide a strong foundation for 2025.