Stoneridge Reports Decline in Net Sales and Profitability in Q3 and Nine Months of 2024

Stoneridge, Inc. reported a challenging financial performance for the third quarter and the first nine months of 2024, with significant declines in net sales and profitability compared to the same periods in 2023. For the three months ended September 30, 2024, net sales totaled $213.8 million, a decrease of 10.2% from $238.2 million in Q3 2023. For the nine months ended September 30, 2024, net sales were $690.0 million, down from $746.3 million in the prior year.

The decline in sales was primarily attributed to lower volumes in the North American automotive and European/North American commercial vehicle markets. The Control Devices segment experienced a notable decrease in net sales, falling 18.1% in Q3 2024, largely due to reduced customer volumes in North American automotive and China commercial vehicle markets. The Electronics segment also saw a 5.3% decline, impacted by lower production volumes in commercial vehicle markets, although new program ramp-ups provided some offset.

Operating income for the third quarter plummeted to $315,000, down from $6.5 million in Q3 2023. For the nine-month period, operating income decreased to $4.1 million from $6.8 million. Stoneridge reported a net loss of $7.1 million for Q3 2024, compared to a net income of $2.2 million in the same quarter of 2023. The nine-month net loss also widened to $10.4 million from a loss of $8.2 million in the previous year.

Despite these challenges, Stoneridge's cash and cash equivalents increased to $54.1 million as of September 30, 2024, up from $40.8 million at the end of 2023, primarily due to improved cash generation from operating activities. The company also reported a net cash provided by operating activities of $28.5 million for the nine months ended September 30, 2024, a significant improvement from a cash outflow of $5.7 million in the same period of 2023.

Strategically, Stoneridge is focusing on improving cash generation and reducing debt, particularly through actions aimed at decreasing net working capital. The company has also entered into a new business award for a leak detection module targeting hybrid vehicle applications, which is expected to grow alongside traditional powertrain vehicles. However, the company anticipates higher interest expenses in 2024 due to increased outstanding balances on its Credit Facility.

Overall, Stoneridge's financial results reflect a period of adjustment amid challenging market conditions, with efforts underway to stabilize operations and enhance liquidity.