Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 001-13337 | |
Entity Registrant Name | STONERIDGE INC | |
Entity Incorporation, State or Country Code | OH | |
Entity Tax Identification Number | 34-1598949 | |
Entity Address, Address Line One | 39675 MacKenzie Drive, Suite 400 | |
Entity Address, City or Town | Novi | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48377 | |
City Area Code | 248 | |
Local Phone Number | 489-9300 | |
Title of 12(g) Security | Common Shares | |
Trading Symbol | SRI | |
Amendment Flag | false | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 26,993,184 | |
Entity Central Index Key | 0001043337 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 81,305 | $ 69,403 |
Accounts receivable, less reserves of $813 and $1,289, respectively | 138,438 | 138,564 |
Inventories, net | 95,777 | 93,449 |
Prepaid expenses and other current assets | 33,739 | 29,850 |
Total current assets | 349,259 | 331,266 |
Long-term assets: | ||
Property, plant and equipment, net | 116,149 | 122,483 |
Intangible assets, net | 51,463 | 58,122 |
Goodwill | 35,279 | 35,874 |
Operating lease right-of-use asset | 20,316 | 22,027 |
Investments and other long-term assets, net | 28,024 | 32,437 |
Total long-term assets | 251,231 | 270,943 |
Total assets | 600,490 | 602,209 |
Current liabilities: | ||
Current portion of debt | 2,516 | 2,672 |
Accounts payable | 79,222 | 80,701 |
Accrued expenses and other current liabilities | 48,731 | 55,223 |
Total current liabilities | 130,469 | 138,596 |
Long-term liabilities: | ||
Revolving credit facility | 161,000 | 126,000 |
Long-term debt, net | 255 | 454 |
Deferred income taxes | 11,335 | 12,530 |
Operating lease long-term liability | 16,569 | 17,971 |
Other long-term liabilities | 13,569 | 16,754 |
Total long-term liabilities | 202,728 | 173,709 |
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 26,993 and 27,408 shares outstanding at March 31, 2020 and December 31, 2019, respectively, with no stated value | ||
Additional paid-in capital | 230,506 | 225,607 |
Common Shares held in treasury, 1,973 and 1,558 shares at March 31, 2020 and December 31, 2019, respectively, at cost | (60,999) | (50,773) |
Retained earnings | 210,032 | 206,542 |
Accumulated other comprehensive loss | (112,246) | (91,472) |
Total Shareholders' equity | 267,293 | 289,904 |
Total liabilities and shareholders' equity | $ 600,490 | $ 602,209 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, reserves (in dollars) | $ 813 | $ 1,289 |
Preferred shares, no par value | $ 0 | $ 0 |
Preferred shares, authorized | 5,000 | 5,000 |
Preferred shares, issued | 0 | 0 |
Common shares, no par value | $ 0 | $ 0 |
Common shares, authorized | 60,000 | 60,000 |
Common shares, issued | 28,966 | 28,966 |
Common shares, outstanding | 26,993 | 27,408 |
Common shares held in treasury, shares | 1,973 | 1,558 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $ 182,966 | $ 218,297 |
Costs and expenses: | ||
Cost of goods sold | 137,569 | 157,444 |
Selling, general and administrative | 29,503 | 35,910 |
Design and development | 12,235 | 13,244 |
Operating income | 3,659 | 11,699 |
Interest expense, net | 1,030 | 1,003 |
Equity in earnings of investee | (457) | (364) |
Other income , net | (1,617) | (432) |
Income before income taxes | 4,703 | 11,492 |
Provision for income taxes | 1,213 | 1,835 |
Net income | 3,490 | 9,657 |
Net income attributable to Stoneridge, Inc. | $ 3,490 | $ 9,657 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.13 | $ 0.34 |
Diluted (in dollars per share) | $ 0.13 | $ 0.33 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 27,232,036 | 28,529,301 |
Diluted (in shares) | 27,591,171 | 29,084,808 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 3,490 | $ 9,657 | |
Net income | 3,490 | 9,657 | |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation | (17,119) | (3,804) | |
Unrealized (loss) gain on derivatives (1) | [1] | (3,655) | 42 |
Other comprehensive loss, net of tax | (20,774) | (3,762) | |
Comprehensive (loss) income | $ (17,284) | $ 5,895 | |
[1] | Net of tax (benefit) expense of $(972) and $11 for the three months ended March 31, 2020 and 2019, respectively. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Tax (benefit) expense | $ (972) | $ 11 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES: | ||
Net income | $ 3,490 | $ 9,657 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Depreciation | 6,650 | 5,697 |
Amortization, including accretion and write-off of deferred financing costs | 1,429 | 1,613 |
Deferred income taxes | 76 | (2,979) |
Earnings of equity method investee | (457) | (364) |
Loss (gain) on sale of fixed assets | 131 | (1) |
Share-based compensation expense | 1,372 | 1,548 |
Change in fair value of earn-out contingent consideration | (633) | 469 |
Change in fair value of venture capital fund | 39 | (16) |
Excess tax deficiency (benefit) related to share-based compensation expense | 17 | (656) |
Changes in operating assets and liabilities, net of effect of business combination: | ||
Accounts receivable, net | (3,730) | (17,821) |
Inventories, net | (5,838) | (13,655) |
Prepaid expenses and other assets | (3,702) | (660) |
Accounts payable | 2,327 | 16,395 |
Accrued expenses and other liabilities | (7,733) | (4,836) |
Net cash used for operating activities | (6,562) | (5,609) |
INVESTING ACTIVITIES: | ||
Capital expenditures, including intangibles | (7,140) | (8,684) |
Proceeds from sale of fixed assets | 8 | 1 |
Investment in venture capital fund | (400) | |
Net cash used for investing activities | (7,132) | (9,083) |
FINANCING ACTIVITIES: | ||
Revolving credit facility borrowings | 71,500 | |
Revolving credit facility payments | (36,500) | (5,000) |
Proceeds from issuance of debt | 1,958 | 34 |
Repayments of debt | (2,076) | (690) |
Earn-out consideration cash payment | (3,394) | |
Other financing costs | (1) | (2) |
Common Share repurchase program | (4,995) | |
Repurchase of Common Shares to satisfy employee tax withholding | (1,687) | (2,945) |
Net cash provided by (used for) financing activities | 28,199 | (11,997) |
Effect of exchange rate changes on cash and cash equivalents | (2,603) | (1,317) |
Net change in cash and cash equivalents | 11,902 | (28,006) |
Cash and cash equivalents at beginning of period | 69,403 | 81,092 |
Cash and cash equivalents at end of period | 81,305 | 53,086 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,150 | 1,109 |
Cash paid for income taxes, net | $ 1,832 | $ 3,327 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Number of Common Shares outstanding | Treasury shares | Additional Paid-In Capital | Common Shares held in treasury | Retained earnings | Accumulated other comprehensive loss | Total | |
Balance at Dec. 31, 2018 | $ 231,647 | $ (8,880) | $ 146,251 | $ (85,752) | $ 283,266 | |||
Net income | 9,657 | 9,657 | ||||||
Common Stock, Share, Beginning Balance (in shares) at Dec. 31, 2018 | 28,488 | |||||||
Treasury Stock, Shares, Beginning Balance at Dec. 31, 2018 | 478 | |||||||
Unrealized gain on derivatives, net | 42 | 42 | [1] | |||||
Currency translation adjustments | (3,804) | (3,804) | ||||||
Issuance of Common Shares ( in shares) | 305 | |||||||
Issuance of Common Shares ( in treasury shares) | (305) | |||||||
Repurchased Common Shares for treasury,net | (1,883) | (1,883) | ||||||
Repurchased Common Shares for treasury (in shares) | (98) | |||||||
Repurchased Common Shares for treasury (in treasury shares) | 98 | |||||||
Share-based compensation | 480 | 480 | ||||||
Balance at Mar. 31, 2019 | 232,127 | (10,763) | 155,908 | (89,514) | 287,758 | |||
Common Stock, Share, Ending Balance (in shares) at Mar. 31, 2019 | 28,695 | |||||||
Treasury Stock, Shares, Ending Balance at Mar. 31, 2019 | 271 | |||||||
Balance at Dec. 31, 2019 | 225,607 | (50,773) | 206,542 | (91,472) | 289,904 | |||
Net income | 3,490 | $ 3,490 | ||||||
Common Stock, Share, Beginning Balance (in shares) at Dec. 31, 2019 | 27,408 | 27,408 | ||||||
Treasury Stock, Shares, Beginning Balance at Dec. 31, 2019 | 1,558 | 1,558 | ||||||
Unrealized gain on derivatives, net | (3,655) | $ (3,655) | [1] | |||||
Currency translation adjustments | (17,119) | (17,119) | ||||||
Issuance of Common Shares ( in shares) | 267 | |||||||
Issuance of Common Shares ( in treasury shares) | (267) | |||||||
Repurchased Common Shares for treasury,net | 4,769 | 4,769 | ||||||
Repurchased Common Shares for treasury (in shares) | (75) | |||||||
Repurchased Common Shares for treasury (in treasury shares) | 75 | |||||||
Common Share repurchase program | 10,000 | (14,995) | (4,995) | |||||
Common Share repurchase program (in shares) | (607) | |||||||
Common Share repurchase program (in treasury shares) | 607 | |||||||
Share-based compensation | (5,101) | (5,101) | ||||||
Balance at Mar. 31, 2020 | $ 230,506 | $ (60,999) | $ 210,032 | $ (112,246) | $ 267,293 | |||
Common Stock, Share, Ending Balance (in shares) at Mar. 31, 2020 | 26,993 | 26,993 | ||||||
Treasury Stock, Shares, Ending Balance at Mar. 31, 2020 | 1,973 | 1,973 | ||||||
[1] | Net of tax (benefit) expense of $(972) and $11 for the three months ended March 31, 2020 and 2019, respectively. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | (1) Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s 2019 Form 10-K The Company’s investment in Minda Stoneridge Instruments Ltd. (“MSIL”) for the three months ended March 31, 2020 and 2019 has been determined to be an unconsolidated entity, and therefore is accounted for under the equity method of accounting based on the Company’s 49% ownership in MSIL. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2020 | |
Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | (2) Recently Issued Accounting Standards Recently Adopted Accounting Standards In August 2018, the Financial Accounting Standards Board (‘FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The guidance in ASU 2018-15 clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted this standard prospectively as of January 1, 2020 and the impact on the Company’s condensed consolidated financial statements will depend on the nature of our future cloud computing arrangements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” The guidance in ASU 2018-13 changes disclosure requirements related to fair value measurements as part of the disclosure framework project. The disclosure framework project aims to improve the effectiveness of disclosures in the notes to the financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted this standard as of January 1, 2020 and it did not have a material impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments”, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019. The guidance allows for various methods for measuring expected credit losses. The Company has elected to apply a historical loss rate based on historical write-offs by region, adjusted for current economic conditions and forecasts about future economic conditions that are reasonable and supportable. The Company adopted this standard as of January 1, 2020 and it did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance in ASU 2020-04 provides temporary optional expedient and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”) (also known as the “reference rate reform”). The guidance allows companies to elect not to apply certain modification accounting requirements to contracts affected by the reference rate reform, if certain criteria are met. The guidance also allows companies to elect various option expedients that allow them to continue to apply hedge accounting for hedging relationships affected by the reference rate reform, if certain criteria are met. The Company is currently evaluating the impact of this ASU on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The amendments in this update remove certain exceptions of Topic 740 including: exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items; exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. There are also additional areas of guidance in regards to: franchise and other taxes partially based on income and the interim recognition of enactment of tax laws and rate changes. The provisions of this ASU are effective for years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this ASU on the Company’s consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Revenue | (3) Revenue Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Incidental items that are not significant in the context of the contract are recognized as expense. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold. Customer returns only occur if products do not meet the specifications of the contract and are not connected to any repurchase obligations of the Company. The Company does not have any financing components or significant payment terms as payment occurs shortly after the point of sale. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of operations. Shipping and handling costs associated with outbound freight after control over a product is transferred to the customer are accounted for as a fulfillment cost and are included in cost of sales. Revenue by Reportable Segment Control Devices. Electronics. Stoneridge Brazil. The following tables disaggregate our revenue by reportable segment and geographical location (1) Control Devices Electronics Stoneridge Brazil Consolidated Three months ended March 31, 2020 2019 2020 2019 2020 2019 2020 2019 Net Sales: North America $ 80,410 $ 96,720 $ 19,441 $ 22,647 $ - $ - $ 99,851 $ 119,367 South America - - - - 14,570 17,332 14,570 17,332 Europe 7,388 4,412 51,306 66,942 - - 58,694 71,354 Asia Pacific 9,052 8,987 799 1,257 - - 9,851 10,244 Total net sales $ 96,850 $ 110,119 $ 71,546 $ 90,846 $ 14,570 $ 17,332 $ 182,966 $ 218,297 (1) Company sales based on geographic location are where the sale originates not where the customer is located . Performance Obligations For OEM and Tier 1 supplier customers, the Company typically enters into contracts to provide serial production parts that consist of a set of documents including, but not limited to, an award letter, master purchase agreement and master terms and conditions. For each production product, the Company enters into separate purchase orders that contain the product specifications and an agreed-upon price. The performance obligation does not exist until a customer release is received for a specific number of parts. The majority of the parts sold to OEM and Tier 1 supplier customers are customized to the specific customer, with the exception of off-highway products that are common across all customers. The transaction price is equal to the contracted price per part and there is no expectation of material variable consideration in the transaction price. For most customer contracts, the Company does not have an enforceable right to payment at any time prior to when the parts are shipped or delivered to the customer; therefore, the Company recognizes revenue at the point in time it satisfies a performance obligation by transferring control of a part to the customer. Certain customer contracts contain an enforceable right to payment if the customer terminates the contract for convenience and therefore are recognized over time using the cost to complete input method. Our aftermarket products are focused on meeting the demand for repair and replacement parts, compliance parts and accessories and are sold primarily to aftermarket distributors and mass retailers in our South American, European and North American markets. Aftermarket products have one type of performance obligation which is the delivery of aftermarket parts and spare parts. For aftermarket customers, the Company typically has standard terms and conditions for all customers. In addition, aftermarket products have alternative use as they can be sold to multiple customers. Revenue for aftermarket part production contracts is recognized at a point in time when the control of the parts transfer to the customer which is based on the shipping terms. Aftermarket contracts may include variable consideration related to discounts and rebates and is included in the transaction price upon recognizing the product revenue. A small portion of the Company’s sales are comprised of monitoring services that include both monitoring devices and fees to individual, corporate, fleet and cargo customers in our Stoneridge Brazil segment. These monitoring service contracts are generally not capable of being distinct and are accounted for as a single performance obligation. We recognize revenue for our monitoring products and services contracts over the life of the contract. There is no variable consideration associated with these contracts. The Company has the right to consideration from a customer in the amount that corresponds directly with the value to the customer of the Company’s performance to date. Therefore, the Company recognizes revenue over time using the practical expedient ASC 606-10-55-18 in the amount the Company has a “right to invoice” rather than selecting an output or input method. Contract Balances The Company had no material contract assets, contract liabilities or capitalized contract acquisition costs as of March 31, 2020 and December 31, 2019. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventories [Abstract] | |
Inventories | (4) Inventories Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on-hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consisted of the following: March 31, December 31, 2020 2019 Raw materials $ 69,316 $ 66,357 Work-in-progress 6,875 5,582 Finished goods 19,586 21,510 Total inventories, net $ 95,777 $ 93,449 Inventory valued using the FIFO method was $86,807 and $82,910 at March 31, 2020 and December 31, 2019, respectively. Inventory valued using the average cost method was $8,970 and $10,539 at March 31, 2020 and December 31, 2019, respectively. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Financial Instruments and Fair Value Measurements | (5) Financial Instruments and Fair Value Measurements Financial Instruments A financial instrument is cash or a contract that imposes an obligation to deliver or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The fair value of debt approximates the carrying value of debt. Derivative Instruments and Hedging Activities On March 31, 2020, the Company had open foreign currency forward contracts which are used solely for hedging and not for speculative purposes. Management believes that its use of these instruments to reduce risk is in the Company’s best interest. The counterparties to these financial instruments are financial institutions with investment grade credit ratings. Foreign Currency Exchange Rate Risk The Company conducts business internationally and therefore is exposed to foreign currency exchange rate risk. The Company uses derivative financial instruments as cash flow hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures. The Company hedged the euro and Mexican peso currencies during 2020 and the Mexican peso in 2019. These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges. As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive income, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated other comprehensive income will fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. The cash flow hedges were highly effective. The effectiveness of the transactions has been and will be measured on an ongoing basis using regression analysis and forecasted future purchases of the currency. In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges, and therefore are marked-to-market with gains and losses recognized in the Company’s condensed consolidated statement of operations as a component of other income (loss), net. At March 31, 2020, all of the Company’s foreign currency forward contracts were designated as cash flow hedges. The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows: U.S. dollar-denominated Foreign Currency Forward Contracts – Cash Flow Hedges During the quarter, The Company entered into U.S. dollar-denominated currency contracts on behalf of one of its European Electronics subsidiaries, whose functional currency is the euro, with a notional amount at March 31, 2020 of $2,100 which expire ratably on a monthly basis from April 2020 through December 2020. There were no such contracts at December 31, 2019. Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedge The Company holds Mexican peso-denominated foreign currency forward contracts with a notional amount at March 31, 2020 of $22,746 which expire ratably on a monthly basis from April 2020 to March 2021. There were no open Mexican peso-denominated foreign currency forward contracts at December 31, 2019. The Company evaluated the effectiveness of the Mexican peso and euro-denominated forward contracts held as of March 31, 2020 and 2019, and for the three months then ended, and concluded that the hedges were effective. Interest Rate Risk Interest Rate Risk – Cash Flow Hedge On February 18, 2020, the Company entered into a floating-to-fixed interest rate swap agreement (the “Swap”) with a notional amount of $50,000 to hedge its exposure to interest payment fluctuations on a portion of its 2019 Credit Facility. The Swap was designated as a cash flow hedge of the variable interest rate obligation under the Company's 2019 Credit Facility that has a current balance of $161,000 at March 31, 2020. The Swap agreement settles each month on the same day that the 2019 Credit Facility interest payments are due and has a maturity date of March 10, 2023 which is prior to the 2019 Credit Facility maturity date of June 4, 2024. Under the Swap terms, the Company pays a fixed interest rate and receives a floating interest rate based on the one-month LIBOR, with a floor. The critical terms of the Swap are aligned with the terms of the 2019 Credit Facility, resulting in no hedge ineffectiveness. The difference between amounts to be received and paid under the Swap is recognized as a component of interest expense, net on the condensed consolidated statements of operations. The Swap increased interest expense by The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows: Prepaid expenses Accrued expenses and Notional amounts (A) and other current assets other current liabilities March 31, December 31, March 31, December 31, March 31, December 31, 2020 2019 2020 2019 2020 2019 Derivatives designated as hedging instruments: Cash flow hedges: Forward currency contracts $ 24,846 $ - $ 66 $ - $ 3,230 $ - Interest rate swap contract $ 50,000 - - - $ 1,463 $ - (A) Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars. Gross amounts recorded for the cash flow hedges in other comprehensive income (loss) and in net income for the three months ended March 31 were as follows: Gain (loss) reclassified from Gain (loss) recorded in other other comprehensive income comprehensive income (loss) (A) (loss) into net income (B) 2020 2019 2020 2019 Derivatives designated as cash flow hedges: Forward currency contracts $ (3,320) $ 269 $ (156) $ 216 Interest rate swap (1,467) - (4) - (A) For the three months ended March 31, 2020, the total net losses on the foreign currency contract cash flow hedges of $3,164 are expected to be included in cost of goods sold (“COGS”) and design and development (“D&D”) within the next 12 months. Of the total net losses on the interest rate swap cash flow hedges, approximately $545 of losses are expected to be included in interest expense within the next 12 months and $918 of losses are expected to be included in interest expense in subsequent periods. (B) Gains (losses) reclassified from other comprehensive income (loss) into net income recognized in COGS in the Company’s condensed consolidated statements of operations were $(127 ) and $173 for the three months ended March 31, 2020 and 2019, respectively. Gains (losses) reclassified from other comprehensive income (loss) into net income recognized in design and development D&D in the Company’s condensed consolidated statements of operations were $(29 ) and $43 for the three months ended March 31, 2020 and 2019, respectively. Losses reclassified from other comprehensive income (loss) into net income recognized in interest expense in the Company’s condensed consolidated statements of operations was $4 for the three months ended March 31, 2020. C ash flows from derivatives used to manage foreign exchange and interest rate risks are classified as operating activities within the condensed consolidated statements of cash flows. Fair Value Measurements The Company’s assets and liabilities are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of the inputs used. Fair values estimated using Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Fair values estimated using Level 2 inputs, other than quoted prices, are observable for the asset or liability, either directly or indirectly and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward currency contracts, inputs include foreign currency exchange rates. For the interest rate swap, inputs include LIBOR. Fair values estimated using Level 3 inputs consist of significant unobservable inputs. The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used. March 31, December 31, 2020 2019 Fair values estimated using Level 1 Level 2 Level 3 Fair value inputs inputs inputs Fair value Financial assets carried at fair value: Forward currency contract $ 66 $ - $ 66 $ - $ - Total financial assets carried at fair value $ 66 $ - $ 66 $ - $ - Financial liabilities carried at fair value: Forward currency contracts $ 3,230 $ - $ 3,230 $ - $ - Interest rate swap 1,463 - 1,463 - - Earn-out consideration 8,610 - - 8,610 12,011 Total financial liabilities carried at fair value $ 13,303 $ - $ 4,693 $ 8,610 $ 12,011 The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis. Stoneridge Brazil Total Balance at December 31, 2019 $ 12,011 $ 12,011 Change in fair value (633) (633) Foreign currency adjustments (2,768) (2,768) Balance at March 31, 2020 $ 8,610 $ 8,610 Orlaco Stoneridge Brazil Total Balance at December 31, 2018 $ 8,602 $ 10,070 $ 18,672 Change in fair value - 469 469 Foreign currency adjustments (128) (133) (261) Earn-out consideration cash payment (8,474) - (8,474) Balance at March 31, 2019 $ - $ 10,406 $ 10,406 The Company will be required to pay the Stoneridge Brazil earn-out consideration, which is not capped, based on Stoneridge Brazil’s financial performance in either 2020 or 2021. The fair value of the Stoneridge Brazil earn-out consideration is based on discounted cash flows utilizing forecasted earnings before interest, depreciation and amortization (“EBITDA”) in 2020 and 2021 using the key inputs of forecasted sales and expected operating income reduced by the market required rate of return. The former Stoneridge Brazil owners may choose either the 2020 or 2021 financial performance period to be used to determine the earn-out consideration payment. The former Stoneridge Brazil owners must choose the 2020 financial performance period by March 31, 2021 otherwise the 2021 financial performance period will automatically be used. The earn-out consideration obligation related to Stoneridge Brazil is recorded within other long-term liabilities in the consolidated balance sheets as of March 31, 2020 and December 31, 2019. The change in fair value of the earn-out consideration for Stoneridge Brazil was primarily due to favorable foreign currency translation and updated forecast projections offset by the reduced time from the current period end to the payment date. The foreign currency impact for the Stoneridge Brazil earn-out considerations is included in other (income) expense, net in the condensed consolidated statements of operations. The fair value of the Orlaco earn-out consideration was based on a Monte Carlo simulation utilizing forecasted EBITDA for the 2017 and 2018 earn-out period as well as a growth rate reduced by the market required rate of return. The change in fair value of the earn-out considerations was recorded within selling, general and administrative (“SG&A”) expense in the consolidated statements of operations for the years ended December 31, 2019 and 2018. The Orlaco earn-out consideration reached the capped amount of €7,500 as of the quarter ended March 31, 2018 due to actual performance exceeding forecasted performance and remained at the capped amount until it was paid out in March 2019 for $8,474 . The earn-out consideration payout was recorded in the condensed consolidated statement of cash flows within operating and financing activities in the amounts of There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the three months ended March 31, 2020. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | (6) Share-Based Compensation Compensation expense for share-based compensation arrangements, which is recognized in the condensed consolidated statements of operations as a component of SG&A expenses, was $1,372 and $1,548 for the three months ended March 31, 2020 and 2019, respectively. The expenses related to share-based compensation awards for the three months ended March 31, 2020 was lower than the three months ended March 31, 2019 due to lower attainment of performance-based awards. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt [Abstract] | |
Debt | (7) Debt Debt consisted of the following at March 31, 2020 and December 31, 2019: March 31, December 31, Interest rates at 2020 2019 March 31, 2020 Maturity Revolving Credit Facility Credit Facility $ 161,000 $ 126,000 1.67 - 2.04% June 2024 Debt Stoneridge Brazil long-term notes 653 972 7.00% November 2021 Suzhou short-term credit line 2,118 2,154 4.70% - 5.00% August 2020 Total debt 2,771 3,126 Less: current portion (2,516) (2,672) Total long-term debt, net $ 255 $ 454 Revolving Credit Facility On September 12, 2014, the Company entered into a Third Amended and Restated Credit Agreement (the “Amended Agreement”). The Amended Agreement provided for a $300,000 revolving credit facility, which replaced the Company’s $100,000 asset-based credit facility and included a letter of credit subfacility, swing line subfacility and multicurrency subfacility. On June 5, 2019, the Company entered into the Fourth Amended and Restated Credit Agreement (the “2019 Credit Facility”). The 2019 Credit Facility provides for a $400,000 senior secured revolving credit facility and it replaced and superseded the Amended Agreement. The 2019 Credit Facility has an accordion feature which allows the Company to increase the availability by up to $150,000 upon the satisfaction of certain conditions and includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility. The 2019 Credit Facility has a termination date of June 5, 2024. In 2019, the Company capitalized $1,366 of deferred financing costs and wrote off previously recorded deferred financing costs of $275 as a result of entering into the 2019 Credit Facility. Borrowings under the 2019 Credit Facility bear interest at either the Base Rate or the LIBOR rate, at the Company’s option, plus the applicable margin as set forth in the 2019 Credit Facility. The 2019 Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio of 3.50 to 1.00 and more than a minimum interest coverage ratio of 3.50 to 1.00. The 2019 Credit Facility contains customary affirmative covenants and representations. The 2019 Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated and junior lien indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) sale and leaseback transactions, (xiii) changes in organizational documents and fiscal year and (xiv) transactions with respect to bonding subsidiaries. The 2019 Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $30,000, (v) any loan document shall cease to be a legal, valid and binding agreement, (vi) certain uninsured losses or proceedings against assets with a value in excess of $30,000, (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings. Borrowings outstanding on the 2019 Credit Facility and the Amended Agreement as applicable, were $161,000 and The Company was in compliance with all credit facility covenants at March 31, 2020 and December 31, 2019. The Company also has outstanding letters of credit of $1,768 at March 31, 2020 and December 31, 2019, respectively. Debt Stoneridge Brazil maintains long-term notes used for working capital purposes which have fixed or variable interest rates. The weighted-average interest rates of long-term debt of Stoneridge Brazil at March 31, 2020 was 7.0%. Depending on the specific note, interest is payable either monthly or annually. Principal repayments on Stoneridge Brazil debt at March 31, 2020 are as follows: $398 from April 2020 through March 2021 and $255 from April 2021 through December 2021. In December 2019, the Company’s wholly-owned subsidiary located in Brazil, established an overdraft credit line which allows overdrafts on Stoneridge Brazil’s bank account up to a maximum level of 5,000 Brazilian real (“R$”), or $962 and $1,244, at March 31, 2020 and December 31, 2019, respectively. There was no balance outstanding on the overdraft credit line as of March 31, 2020 and December 31, 2019. The Company’s wholly-owned subsidiary located in Sweden, has an overdraft credit line which allows overdrafts on the subsidiary’s bank account up to a maximum level of 20,000 Swedish krona, or $2,025 and $2,136, at March 31, 2020 and December 31, 2019, respectively. At March 31, 2020 and December 31, 2019, there was no balance outstanding on this overdraft credit line however, during the three months ended March 31, 2020, the subsidiary borrowed and repaid 19,155 Swedish krona, or $1,949. The Company’s wholly-owned subsidiary located in Suzhou, China (the “Suzhou subsidiary”), has two credit lines (the “Suzhou credit line”) which allow up to a maximum borrowing level of 40,000 Chinese yuan, or $5,649 and $5,746 at March 31, 2020 and December 31, 2019, respectively. At March 31, 2020 and December 31, 2019 there was $2,118 and $2,154, respectively, in borrowings outstanding on the Suzhou credit line with a weighted-average interest rate of 4.80%. The Suzhou credit line is included on the condensed consolidated balance sheet within current portion of debt. In addition, the Suzhou subsidiary has a bank acceptance draft line of credit which facilitates the extension of trade payable payment terms that have currently been extended by 180 days. This bank acceptance draft line of credit allows up to a maximum borrowing level of The Company was in compliance with all debt covenants at March 31, 2020 and December 31, 2019. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (8) Earnings Per Share Basic earnings per share was computed by dividing net income by the weighted-average number of Common Shares outstanding for each respective period. Diluted earnings per share was calculated by dividing net income by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows: Three months ended March 31, 2020 2019 Basic weighted-average Common Shares outstanding 27,232,036 28,529,301 Effect of dilutive shares 359,135 555,507 Diluted weighted-average Common Shares outstanding 27,591,171 29,084,808 There were 789,027 and 691,207 performance-based right to receive Common Shares outstanding at March 31, 2020 and 2019, respectively. The right to receive Common Shares are included in the computation of diluted earnings per share based on the number of Common Shares that would be issuable if the end of the quarter were the end of the contingency period. |
Equity and Accumulated Other Co
Equity and Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity and Accumulated Other Comprehensive Loss [Abstract] | |
Equity and Accumulated Other Comprehensive Loss | (9) Equity and Accumulated Other Comprehensive Loss Common Share Repurchase On October 26, 2018, the Company’s Board of Directors authorized the Company to repurchase up to $50,000 of Common Shares. Thereafter, on May 7, 2019, the Company entered into a Master Confirmation (the “Master Confirmation”) and a Supplemental Confirmation, together with the Master Confirmation, the Accelerated Share Repurchase Agreement (“ASR Agreement”), with Citibank N.A. (the “Bank”) to purchase Company Common Shares for a payment of $50,000 (the “Prepayment Amount”). Under the terms of the ASR Agreement, on May 7, 2019, the Company paid the Prepayment Amount to the Bank and received on May 8, 2019 an initial delivery of 1,349,528 Company Common Shares, which approximated 80% of the total number of Company Common Shares expected to be repurchased under the ASR Agreement based on the closing price of the Company’s Common Shares on May 7, 2019. These Common Shares became treasury shares and were recorded as a On February 25, 2020, the Bank notified the Company that it terminated early its commitment pursuant the ASR Agreement and would deliver 364,604 Common Shares on February 27, 2020 based on the volume weighted average price of our Common Shares during the term set forth in the ASR Agreement. The Bank’s notice of early termination and the subsequent delivery of Common Shares represents the final settlement of the Company’s share repurchase program pursuant to the accelerated share repurchase agreement. These Common Shares became treasury shares and were recorded as a $10,000 reduction to shareholders’ equity as Common Shares held in treasury with the offset of $10,000 to additional paid-in capital. On February 24, 2020, the Company’s Board of Directors authorized a new repurchase program of $50,000 for the repurchase of the Company’s outstanding Common Shares over the next 18 months . The repurchases may be made from time to time in either open market transactions or in privately negotiated transactions. Repurchases may also be made under Rule 10b-18 plans, which permit Common Shares to be repurchased through pre-determined criteria. On March 3, 2020, the Company entered into a 10b-18 Agreement Letter (the “10b-18 Agreement”), with Citibank N.A. (the “Bank”) to purchase Company Common Shares, under purchasing conditions of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 10b-18”), for up to $5,000. Under the terms of the 10b18 Agreement, commencing March 3, 2020 and ending March 6, 2020, the Company received delivery of a total of 242,634 Company Common Shares for the amount of $4,995 . These Common Shares became treasury shares and were recorded as a Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss for the three months ended March 31, 2020 and 2019 were as follows: Foreign Unrealized currency gain (loss) translation on derivatives Total Balance at January 1, 2020 $ (91,472) $ - $ (91,472) Other comprehensive loss before reclassifications (17,119) (3,781) (20,900) Amounts reclassified from accumulated other comprehensive loss - 126 126 Net other comprehensive loss, net of tax (17,119) (3,655) (20,774) Balance at March 31, 2020 $ (108,591) $ (3,655) $ (112,246) Balance at January 1, 2019 $ (86,044) $ 292 $ (85,752) Other comprehensive (loss) income before reclassifications (3,804) 213 (3,591) Amounts reclassified from accumulated other comprehensive loss - (171) (171) Net other comprehensive (loss) income, net of tax (3,804) 42 (3,762) Balance at March 31, 2019 $ (89,848) $ 334 $ (89,514) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | (10) Commitments and Contingencies From time to time we are subject to various legal actions and claims incidental to our business, including those arising out of breach of contracts, product warranties, product liability, patent infringement, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on its consolidated results of operations or financial position. As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at the site and engaged an environmental engineering consultant to develop a remediation and monitoring plan for the site. Soil remediation at the site was completed during the year ended December 31, 2010. A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in the fourth quarter of 2015. During the three months ended March 31, 2020 and 2019, environmental remediation costs incurred were immaterial. At March 31, 2020 and December 31, 2019, the Company accrued a remaining undiscounted liability of $235 and $82, respectively, related to future remediation costs which were recorded as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. Costs associated with the recorded liability will be incurred to complete the groundwater remediation and monitoring. The recorded liability is based on assumptions in the remedial action plan. Although the Company sold the Sarasota facility and related property in December 2011, the liability to remediate the site contamination remains the responsibility of the Company. Due to the ongoing site remediation, the Company is currently required to maintain a $1,489 letter of credit for the benefit of the buyer. The Company’s Stoneridge Brazil subsidiary has civil, labor and other non-income tax contingencies for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company’s legal advisors in Brazil. As a result, no provision has been recorded with respect to these contingencies, which amounted to R$29,300 ($5,600) and R$29,200 ($7,300) at March 31, 2020 and December 31, 2019, respectively. An unfavorable outcome on these contingencies could result in significant cost to the Company and adversely affect its results of operations. Product Warranty and Recall Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle existing and future claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. Our estimate is based on historical trends of units sold and claim payment amounts, combined with our current understanding of the status of existing claims and discussions with our customers. The key factors in our estimate are the stated or implied warranty period, the customer source, customer policy decisions regarding warranties and customers seeking to hold the Company responsible for their product warranties. The Company can provide no assurances that it will not experience material claims or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued. The current portion of product warranty and recall is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. Product warranty and recall included The following provides a reconciliation of changes in product warranty and recall liability: Three months ended March 31, 2020 2019 Product warranty and recall at beginning of period $ 10,796 $ 10,494 Accruals for warranties established during period 1,128 1,545 Aggregate changes in pre-existing liabilities due to claim developments 387 1,238 Settlements made during the period (2,134) (2,715) Foreign currency translation (385) (215) Product warranty and recall at end of period $ 9,792 $ 10,347 Brazilian Indirect Tax In March 2017, the Supreme Court of Brazil issued a decision concluding that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduced Stoneridge Brazil’s gross receipts tax prospectively and, potentially, retrospectively. In April 2019, the Company received judicial notification that the Superior Judicial Court of Brazil rendered a favorable decision on Stoneridge Brazil’s case granting the Company the right to recover, through offset of federal tax liabilities, amounts collected by the government from June 2010 to February 2017. Based on the Company’s determination that these tax credits will be used prior to expiration, the Company recorded a pre-tax benefit of $6,473 as a reduction to SG&A expense which is inclusive of related interest income of $2,392, net of applicable professional fees of $990 in the year ended December 31, 2019. The Company received administrative approval in January 2020 and is now able to offset eligible federal tax with these tax credits. The Brazilian tax authorities have sought clarification before the Supreme Court of Brazil (in a leading case involving another taxpayer) of certain matters that could affect the rights of Brazilian taxpayers regarding these credits. The timing for a decision is uncertain due to the COVID-19 pandemic. If the Brazilian tax authorities challenge our rights to these credits, we may become subject to new litigation that could impact the amount ultimately realized by Stoneridge Brazil. |
Business Realignment and Restru
Business Realignment and Restructuring | 3 Months Ended |
Mar. 31, 2020 | |
Business Realignment and Restructuring | |
Business Realignment and Restructuring | (11) Business Realignment and Restructuring On January 10, 2019, the Company committed to a restructuring plan that resulted in the closure of the Canton, Massachusetts facility (“Canton Facility”) on March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”). Company management informed employees at the Canton Facility of this restructuring decision on January 11, 2019. The estimated costs for the Canton Restructuring include employee severance and termination costs, contract terminations costs, professional fees and other related costs such as moving and set-up costs for equipment and costs to restore the engineering function previously located at the Canton facility. The Company recognized expense of $2,222 and $2,225, respectively, for the three months ended March 31, 2020 and 2019 as a result of these actions for employee termination benefits and other restructuring related costs. For the three months ended March 31, 2020 severance and other restructuring related costs of $1,490, $314 and $418 were recognized in COGS, SG&A and D&D, respectively, in the condensed consolidated statement of operations. For the three months ended March 31, 2019 severance and other related restructuring costs of $1,252, $195 and $778 were recognized in COGS, SG&A and D&D, respectively, in the condensed consolidated statement of operations. The estimated additional cost of this restructuring plan, that will impact the Control Devices segment, is approximately $700 and is related to additional costs to restore the engineering function previously located at the Canton Facility. These costs will be incurred throughout 2020. The expenses for the Canton Restructuring that relate to the Control Devices reportable segment include the following: Accrual as of 2020 Charge Utilization Accrual as of January 1, 2020 to Expense Cash Non-Cash March 31, 2020 Employee termination benefits $ 2,636 $ 1,118 $ (3,437) $ - $ 317 Other related costs - 1,104 (1,104) - - Total $ 2,636 $ 2,222 $ (4,541) $ - $ 317 Accrual as of 2019 Charge Utilization Accrual as of January 1, 2019 to Expense Cash Non-Cash March 31, 2019 Employee termination benefits $ - $ 1,980 $ - $ - $ 1,980 Other related costs - 245 (245) - - Total $ - $ 2,225 $ (245) $ - $ 1,980 In the fourth quarter of 2018, the Company undertook restructuring actions for the Electronics segment affecting the European Aftermarket business and China operations. The Company recognized expense of $7 and $216, respectively, for the three months ended March 31, 2020 and 2019 as a result of these actions for severance, contract termination costs, accelerated depreciation of fixed assets and other related costs. Electronics segment restructuring costs were recognized in SG&A in the condensed consolidated statement of operations for the three months ended March 31, 2020 and 2019. The Company expects to incur approximately $750 of additional restructuring costs related to these actions through 2020. The expenses for the restructuring activities that relate to the Electronics reportable segment include the following: Accrual as of 2020 Charge to Utilization Accrual as of January 1, 2020 Expense Cash Non-Cash March 31, 2020 Employee termination benefits $ 52 $ - $ - $ - $ 52 Other related costs - 7 (7) - - Total $ 52 $ 7 $ (7) $ - $ 52 Accrual as of 2019 Charge to Utilization Accrual as of January 1, 2019 Expense (Income) Cash Non-Cash March 31, 2019 Employee termination benefits $ 520 $ (15) $ (456) $ - $ 49 Accelerated depreciation - 98 - (98) - Contract termination costs 17 16 (33) - - Other related costs 119 117 (236) - - Total $ 656 $ 216 $ (725) $ (98) $ 49 In addition to the specific restructuring activities, the Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs which are referred to as business realignment charges. Business realignment charges by reportable segment were as follows: Three months ended March 31, 2020 2019 Control Devices (A) $ 377 $ 522 Stoneridge Brazil (B) 153 - Unallocated Corporate (C) 74 613 Total business realignment charges $ 604 $ 1,135 (A) Severance costs for the three months ended March 31, 2020 related to SG&A were $377 . Severance costs for the three months ended March 31, 2019 related to SG&A and D&D were $512 and $10 , respectively. (B) Severance costs for the three months ended March 31, 2020 related to COGS and SG&A were $86 and $67 , respectively. (C) Severance costs for the three months ended March 31, 2020 and 2019 related to SG&A were $74 and $613 , respectively. Business realignment charges classified by statement of operations line item were as follows: Three months ended March 31, 2020 2019 Cost of goods sold $ 86 $ - Selling, general and administrative 518 1,125 Design and development - 10 Total business realignment charges $ 604 $ 1,135 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | (12) Income Taxes In the three months ended March 31, 2020, income tax expense of $1,213 was attributable to the mix of earnings among tax jurisdictions as well as valuation allowances in certain jurisdictions. The effective tax rate of In the three months ended March 31, 2019, income tax expense of $1,835 was attributable to the mix of earnings among tax jurisdictions as well as the favorable benefit related to the annual vesting of share-based compensation. The effective tax rate of 16.0% is lower than the statutory rate primarily due to the annual vesting of share-based compensation. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | (13) Segment Reporting Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company has three reportable segments, Control Devices, Electronics and Stoneridge Brazil, which also represent its operating segments. The Control Devices reportable segment produces actuators, sensors, switches and connectors. The Electronics reportable segment produces driver information systems, camera-based vision systems, connectivity and compliance products and electronic control units. The Stoneridge Brazil reportable segment designs and manufactures electronic vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices and telematics solutions. The accounting policies of the Company’s reportable segments are the same as those described in Note 2, “Summary of Significant Accounting Policies” of the Company’s 2019 Form 10-K The financial information presented below is for our three reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable. Such costs and eliminations do not meet the requirements for being classified as an operating segment. Corporate costs include various support functions, such as corporate accounting/finance, executive administration, human resources, information technology and legal. A summary of financial information by reportable segment is as follows: Three months ended March 31, 2020 2019 Net Sales: Control Devices $ 96,850 $ 110,119 Inter-segment sales 1,347 1,861 Control Devices net sales 98,197 111,980 Electronics 71,546 90,846 Inter-segment sales 8,268 8,722 Electronics net sales 79,814 99,568 Stoneridge Brazil 14,570 17,332 Inter-segment sales - 6 Stoneridge Brazil net sales 14,570 17,338 Eliminations (9,615) (10,589) Total net sales $ 182,966 $ 218,297 Operating Income (Loss): Control Devices $ 7,322 $ 11,948 Electronics 2,872 9,031 Stoneridge Brazil 859 670 Unallocated Corporate (A) (7,394) (9,950) Total operating income $ 3,659 $ 11,699 Depreciation and Amortization: Control Devices $ 3,530 $ 3,094 Electronics 2,481 2,397 Stoneridge Brazil 1,450 1,525 Unallocated Corporate 526 213 Total depreciation and amortization (B) $ 7,987 $ 7,229 Interest Expense, net: Control Devices $ 81 $ 182 Electronics 87 56 Stoneridge Brazil 10 108 Unallocated Corporate 852 657 Total interest expense, net $ 1,030 $ 1,003 Capital Expenditures: Control Devices $ 2,314 $ 3,492 Electronics 2,650 3,738 Stoneridge Brazil 1,133 819 Unallocated Corporate (C) 572 635 Total capital expenditures $ 6,669 $ 8,684 March 31, December 31, 2020 2019 Total Assets: Control Devices $ 189,348 $ 191,491 Electronics 271,750 285,027 Stoneridge Brazil 65,258 89,393 Corporate (C) 390,475 358,766 Eliminations (316,341) (322,468) Total assets $ 600,490 $ 602,209 The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates: Three months ended March 31, 2020 2019 Net Sales: North America $ 99,851 $ 119,367 South America 14,570 17,332 Europe and Other 68,545 81,598 Total net sales $ 182,966 $ 218,297 March 31, December 31, 2020 2019 Long-term Assets: North America $ 87,375 $ 87,430 South America 37,446 52,518 Europe and Other 126,410 130,995 Total long-term assets $ 251,231 $ 270,943 (A) Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation. (B) These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets. (C) Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments [Abstract] | |
Investments | (14) Investments Minda Stoneridge Instruments Ltd. The Company has a 49% equity interest in Minda Stoneridge Instruments Ltd. (“MSIL”), a company based in India that manufactures electronics, instrumentation equipment and sensors primarily for the motorcycle, commercial vehicle and automotive markets. The investment is accounted for under the equity method of accounting. The Company’s investment in MSIL, recorded as a component of investments and other long-term assets, net on the condensed consolidated balance sheets, was $12,346 and $12,701 at March 31, 2020 and December 31, 2019, respectively. Equity in earnings of MSIL included in the condensed consolidated statements of operations was $457 and $364, for the three months ended March 31, 2020 and 2019, respectively. PST Eletrônica Ltda. The Company had a 74% controlling interest in Stoneridge Brazil from December 31, 2011 through May 15, 2017. On May 16, 2017, the Company acquired the remaining 26% noncontrolling interest in Stoneridge Brazil. As part of the acquisition agreement, the Company will be required to pay additional earn-out consideration, which is not capped, based on Stoneridge Brazil’s financial performance in either 2020 or 2021. See Note 5 for the fair value and foreign currency adjustments of the earn-out consideration for the current and prior periods. Stoneridge Brazil had dividends payable to former noncontrolling interest holders of R$24,154 ($6,010) as of December 31, 2019. The dividends payable balance included R$261 ($68) in monetary correction for the three months ended March 31, 2019 based on the Brazilian National Extended Consumer Price inflation index. The dividend payable related to Stoneridge Brazil was recorded within other current liabilities on the consolidated balance sheet as of December 31, 2019. These dividends were paid in January 2020. Other Investments In December 2018, the Company entered into an agreement to make a $10,000 investment in a fund managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology which is accounted for in accordance with ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10)”. This investment does not have a readily determinable fair value and is measured at cost, less impairments, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company’s to the Autotech fund as of March 31, 2019 and did not contribute to the Autotech fund during the three months ended March 31, 2020. The Company recognized |
Disposal of Non-Core Products
Disposal of Non-Core Products | 3 Months Ended |
Mar. 31, 2020 | |
Disposal of Non-Core Products [Abstract] | |
Disposal of Non-Core Products | (15) Disposal of Non-Core Products On April 1, 2019, the Company entered into an Asset Purchase Agreement (the “APA”) by and among the Company, the Company’s wholly owned subsidiary, Stoneridge Control Devices, Inc. (“SCD”), and Standard Motor Products, Inc. (“SMP”). On the same day pursuant to the APA, in exchange for product lines and assets related to certain non-core switches and connectors (the “Non-core Products”). the Company and SMP also entered into certain ancillary agreements, including a transition services agreement, a contract manufacturing agreement and a supply agreement, pursuant to which the Company would provide and be compensated for certain manufacturing, transitional, and administrative and support services to SMP on a short-term basis. The products related to the Non-core Products were manufactured in Juarez, Mexico and Canton, Massachusetts, and included ball switches, ignition switches, rotary switches, courtesy lamps, toggle switches, headlamp switches and other related components. During the three months ended March 31, 2019, the Company recognized transaction costs associated with the disposal of Control Devices’ Non-core Products of $322 within SG&A. The Company received $21 for services provided pursuant to the transition services agreement which were recognized as a reduction in SG&A for the three months ended March 31, 2020. There were no Non-core Product net sales for the three months ended March 31, 2020. Non-core Product net sales and operating income were $11,230 and $3,112, for the three months ended March 31, 2019, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | (16) Subsequent Events On May 4, 2020, the Company undertook business realignment actions that resulted in the reduction of our global salaried workforce by approximately 5.0 %. These actions were made to better align our resources and cost structure with our current business opportunities and market outlook as well as respond to the COVID-19 pandemic. One-time separation costs of $1,500 to $2,000 associated with these realignment actions are expected to be incurred in the second quarter of 2020. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Revenue by Segment and Geographical Location | The following tables disaggregate our revenue by reportable segment and geographical location (1) Control Devices Electronics Stoneridge Brazil Consolidated Three months ended March 31, 2020 2019 2020 2019 2020 2019 2020 2019 Net Sales: North America $ 80,410 $ 96,720 $ 19,441 $ 22,647 $ - $ - $ 99,851 $ 119,367 South America - - - - 14,570 17,332 14,570 17,332 Europe 7,388 4,412 51,306 66,942 - - 58,694 71,354 Asia Pacific 9,052 8,987 799 1,257 - - 9,851 10,244 Total net sales $ 96,850 $ 110,119 $ 71,546 $ 90,846 $ 14,570 $ 17,332 $ 182,966 $ 218,297 (1) Company sales based on geographic location are where the sale originates not where the customer is located . |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventories [Abstract] | |
Schedule of Inventory, Current | March 31, December 31, 2020 2019 Raw materials $ 69,316 $ 66,357 Work-in-progress 6,875 5,582 Finished goods 19,586 21,510 Total inventories, net $ 95,777 $ 93,449 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity and Accumulated Other Comprehensive Loss [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | Changes in accumulated other comprehensive loss for the three months ended March 31, 2020 and 2019 were as follows: Foreign Unrealized currency gain (loss) translation on derivatives Total Balance at January 1, 2020 $ (91,472) $ - $ (91,472) Other comprehensive loss before reclassifications (17,119) (3,781) (20,900) Amounts reclassified from accumulated other comprehensive loss - 126 126 Net other comprehensive loss, net of tax (17,119) (3,655) (20,774) Balance at March 31, 2020 $ (108,591) $ (3,655) $ (112,246) Balance at January 1, 2019 $ (86,044) $ 292 $ (85,752) Other comprehensive (loss) income before reclassifications (3,804) 213 (3,591) Amounts reclassified from accumulated other comprehensive loss - (171) (171) Net other comprehensive (loss) income, net of tax (3,804) 42 (3,762) Balance at March 31, 2019 $ (89,848) $ 334 $ (89,514) |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Notional Amounts and Fair Values of Derivative Instruments in the Consolidated Balance | The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows: Prepaid expenses Accrued expenses and Notional amounts (A) and other current assets other current liabilities March 31, December 31, March 31, December 31, March 31, December 31, 2020 2019 2020 2019 2020 2019 Derivatives designated as hedging instruments: Cash flow hedges: Forward currency contracts $ 24,846 $ - $ 66 $ - $ 3,230 $ - Interest rate swap contract $ 50,000 - - - $ 1,463 $ - (A) Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars. |
Amounts Recorded for the Cash Flow Hedges in Other Comprehensive Income (Loss) in Shareholders' Equity and in Net Income | Gross amounts recorded for the cash flow hedges in other comprehensive income (loss) and in net income for the three months ended March 31 were as follows: Gain (loss) reclassified from Gain (loss) recorded in other other comprehensive income comprehensive income (loss) (A) (loss) into net income (B) 2020 2019 2020 2019 Derivatives designated as cash flow hedges: Forward currency contracts $ (3,320) $ 269 $ (156) $ 216 Interest rate swap (1,467) - (4) - (A) For the three months ended March 31, 2020, the total net losses on the foreign currency contract cash flow hedges of $3,164 are expected to be included in cost of goods sold (“COGS”) and design and development (“D&D”) within the next 12 months. Of the total net losses on the interest rate swap cash flow hedges, approximately $545 of losses are expected to be included in interest expense within the next 12 months and $918 of losses are expected to be included in interest expense in subsequent periods. (B) Gains (losses) reclassified from other comprehensive income (loss) into net income recognized in COGS in the Company’s condensed consolidated statements of operations were $(127 ) and $173 for the three months ended March 31, 2020 and 2019, respectively. Gains (losses) reclassified from other comprehensive income (loss) into net income recognized in design and development D&D in the Company’s condensed consolidated statements of operations were $(29 ) and $43 for the three months ended March 31, 2020 and 2019, respectively. Losses reclassified from other comprehensive income (loss) into net income recognized in interest expense in the Company’s condensed consolidated statements of operations was $4 for the three months ended March 31, 2020. C ash flows from derivatives used to manage foreign exchange and interest rate risks are classified as operating activities within the condensed consolidated statements of cash flows. |
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used. March 31, December 31, 2020 2019 Fair values estimated using Level 1 Level 2 Level 3 Fair value inputs inputs inputs Fair value Financial assets carried at fair value: Forward currency contract $ 66 $ - $ 66 $ - $ - Total financial assets carried at fair value $ 66 $ - $ 66 $ - $ - Financial liabilities carried at fair value: Forward currency contracts $ 3,230 $ - $ 3,230 $ - $ - Interest rate swap 1,463 - 1,463 - - Earn-out consideration 8,610 - - 8,610 12,011 Total financial liabilities carried at fair value $ 13,303 $ - $ 4,693 $ 8,610 $ 12,011 |
Summary of the Change in Fair Value of the Level 3 Financial Liabilities Related to Contingent Consideration | The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis. Stoneridge Brazil Total Balance at December 31, 2019 $ 12,011 $ 12,011 Change in fair value (633) (633) Foreign currency adjustments (2,768) (2,768) Balance at March 31, 2020 $ 8,610 $ 8,610 Orlaco Stoneridge Brazil Total Balance at December 31, 2018 $ 8,602 $ 10,070 $ 18,672 Change in fair value - 469 469 Foreign currency adjustments (128) (133) (261) Earn-out consideration cash payment (8,474) - (8,474) Balance at March 31, 2019 $ - $ 10,406 $ 10,406 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt [Abstract] | |
Schedule of Debt | Debt consisted of the following at March 31, 2020 and December 31, 2019: March 31, December 31, Interest rates at 2020 2019 March 31, 2020 Maturity Revolving Credit Facility Credit Facility $ 161,000 $ 126,000 1.67 - 2.04% June 2024 Debt Stoneridge Brazil long-term notes 653 972 7.00% November 2021 Suzhou short-term credit line 2,118 2,154 4.70% - 5.00% August 2020 Total debt 2,771 3,126 Less: current portion (2,516) (2,672) Total long-term debt, net $ 255 $ 454 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted-Average Number of Shares | Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows: Three months ended March 31, 2020 2019 Basic weighted-average Common Shares outstanding 27,232,036 28,529,301 Effect of dilutive shares 359,135 555,507 Diluted weighted-average Common Shares outstanding 27,591,171 29,084,808 |
Equity and Accumulated Other _2
Equity and Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity and Accumulated Other Comprehensive Loss [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss by Component | Changes in accumulated other comprehensive loss for the three months ended March 31, 2020 and 2019 were as follows: Foreign Unrealized currency gain (loss) translation on derivatives Total Balance at January 1, 2020 $ (91,472) $ - $ (91,472) Other comprehensive loss before reclassifications (17,119) (3,781) (20,900) Amounts reclassified from accumulated other comprehensive loss - 126 126 Net other comprehensive loss, net of tax (17,119) (3,655) (20,774) Balance at March 31, 2020 $ (108,591) $ (3,655) $ (112,246) Balance at January 1, 2019 $ (86,044) $ 292 $ (85,752) Other comprehensive (loss) income before reclassifications (3,804) 213 (3,591) Amounts reclassified from accumulated other comprehensive loss - (171) (171) Net other comprehensive (loss) income, net of tax (3,804) 42 (3,762) Balance at March 31, 2019 $ (89,848) $ 334 $ (89,514) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies [Abstract] | |
Schedule of Product Warranty and Recall Liability | The following provides a reconciliation of changes in product warranty and recall liability: Three months ended March 31, 2020 2019 Product warranty and recall at beginning of period $ 10,796 $ 10,494 Accruals for warranties established during period 1,128 1,545 Aggregate changes in pre-existing liabilities due to claim developments 387 1,238 Settlements made during the period (2,134) (2,715) Foreign currency translation (385) (215) Product warranty and recall at end of period $ 9,792 $ 10,347 |
Business Realignment and Rest_2
Business Realignment and Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Restructuring and Related Costs | Business realignment charges by reportable segment were as follows: Three months ended March 31, 2020 2019 Control Devices (A) $ 377 $ 522 Stoneridge Brazil (B) 153 - Unallocated Corporate (C) 74 613 Total business realignment charges $ 604 $ 1,135 (A) Severance costs for the three months ended March 31, 2020 related to SG&A were $377 . Severance costs for the three months ended March 31, 2019 related to SG&A and D&D were $512 and $10 , respectively. (B) Severance costs for the three months ended March 31, 2020 related to COGS and SG&A were $86 and $67 , respectively. (C) Severance costs for the three months ended March 31, 2020 and 2019 related to SG&A were $74 and $613 , respectively. |
Schedule of Business Realignment Charges Classified by Statement of Operations | Business realignment charges classified by statement of operations line item were as follows: Three months ended March 31, 2020 2019 Cost of goods sold $ 86 $ - Selling, general and administrative 518 1,125 Design and development - 10 Total business realignment charges $ 604 $ 1,135 |
Canton Facility Restructuring Plan [Member] | |
Schedule of Restructuring and Related Costs | The expenses for the Canton Restructuring that relate to the Control Devices reportable segment include the following: Accrual as of 2020 Charge Utilization Accrual as of January 1, 2020 to Expense Cash Non-Cash March 31, 2020 Employee termination benefits $ 2,636 $ 1,118 $ (3,437) $ - $ 317 Other related costs - 1,104 (1,104) - - Total $ 2,636 $ 2,222 $ (4,541) $ - $ 317 Accrual as of 2019 Charge Utilization Accrual as of January 1, 2019 to Expense Cash Non-Cash March 31, 2019 Employee termination benefits $ - $ 1,980 $ - $ - $ 1,980 Other related costs - 245 (245) - - Total $ - $ 2,225 $ (245) $ - $ 1,980 |
Electronics [Member] | |
Schedule of Restructuring and Related Costs | The expenses for the restructuring activities that relate to the Electronics reportable segment include the following: Accrual as of 2020 Charge to Utilization Accrual as of January 1, 2020 Expense Cash Non-Cash March 31, 2020 Employee termination benefits $ 52 $ - $ - $ - $ 52 Other related costs - 7 (7) - - Total $ 52 $ 7 $ (7) $ - $ 52 Accrual as of 2019 Charge to Utilization Accrual as of January 1, 2019 Expense (Income) Cash Non-Cash March 31, 2019 Employee termination benefits $ 520 $ (15) $ (456) $ - $ 49 Accelerated depreciation - 98 - (98) - Contract termination costs 17 16 (33) - - Other related costs 119 117 (236) - - Total $ 656 $ 216 $ (725) $ (98) $ 49 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | A summary of financial information by reportable segment is as follows: Three months ended March 31, 2020 2019 Net Sales: Control Devices $ 96,850 $ 110,119 Inter-segment sales 1,347 1,861 Control Devices net sales 98,197 111,980 Electronics 71,546 90,846 Inter-segment sales 8,268 8,722 Electronics net sales 79,814 99,568 Stoneridge Brazil 14,570 17,332 Inter-segment sales - 6 Stoneridge Brazil net sales 14,570 17,338 Eliminations (9,615) (10,589) Total net sales $ 182,966 $ 218,297 Operating Income (Loss): Control Devices $ 7,322 $ 11,948 Electronics 2,872 9,031 Stoneridge Brazil 859 670 Unallocated Corporate (A) (7,394) (9,950) Total operating income $ 3,659 $ 11,699 Depreciation and Amortization: Control Devices $ 3,530 $ 3,094 Electronics 2,481 2,397 Stoneridge Brazil 1,450 1,525 Unallocated Corporate 526 213 Total depreciation and amortization (B) $ 7,987 $ 7,229 Interest Expense, net: Control Devices $ 81 $ 182 Electronics 87 56 Stoneridge Brazil 10 108 Unallocated Corporate 852 657 Total interest expense, net $ 1,030 $ 1,003 Capital Expenditures: Control Devices $ 2,314 $ 3,492 Electronics 2,650 3,738 Stoneridge Brazil 1,133 819 Unallocated Corporate (C) 572 635 Total capital expenditures $ 6,669 $ 8,684 March 31, December 31, 2020 2019 Total Assets: Control Devices $ 189,348 $ 191,491 Electronics 271,750 285,027 Stoneridge Brazil 65,258 89,393 Corporate (C) 390,475 358,766 Eliminations (316,341) (322,468) Total assets $ 600,490 $ 602,209 |
Schedule Of Revenue From External Customers and Long-Lived Assets, By Geographical Areas [Table Text Block] | The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates: Three months ended March 31, 2020 2019 Net Sales: North America $ 99,851 $ 119,367 South America 14,570 17,332 Europe and Other 68,545 81,598 Total net sales $ 182,966 $ 218,297 March 31, December 31, 2020 2019 Long-term Assets: North America $ 87,375 $ 87,430 South America 37,446 52,518 Europe and Other 126,410 130,995 Total long-term assets $ 251,231 $ 270,943 (A) Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation. (B) These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets. (C) Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries. |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | Mar. 31, 2020 | Mar. 31, 2019 |
MSIL | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 49.00% | 49.00% |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue [Abstract] | ||
Contract assets | $ 0 | $ 0 |
Contract liabilities | 0 | 0 |
Capitalized contract acquisition costs | $ 0 | $ 0 |
Revenue (Revenue by Segment and
Revenue (Revenue by Segment and Geographical Location) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total net sales | $ 182,966 | $ 218,297 |
North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 99,851 | 119,367 |
South America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 14,570 | 17,332 |
Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 58,694 | 71,354 |
Asia Pacific [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 9,851 | 10,244 |
Control Devices [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 96,850 | 110,119 |
Control Devices [Member] | North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 80,410 | 96,720 |
Control Devices [Member] | Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 7,388 | 4,412 |
Control Devices [Member] | Asia Pacific [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 9,052 | 8,987 |
Electronics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 71,546 | 90,846 |
Electronics [Member] | North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 19,441 | 22,647 |
Electronics [Member] | Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 51,306 | 66,942 |
Electronics [Member] | Asia Pacific [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 799 | 1,257 |
Stoneridge Brazil [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 14,570 | 17,332 |
Stoneridge Brazil [Member] | South America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | $ 14,570 | $ 17,332 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories [Abstract] | ||
Inventory amount, FIFO | $ 86,807 | $ 82,910 |
Inventory amount, weighted average cost | $ 8,970 | $ 10,539 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories [Abstract] | ||
Raw materials | $ 69,316 | $ 66,357 |
Work-in-progress | 6,875 | 5,582 |
Finished goods | 19,586 | 21,510 |
Total inventories, net | $ 95,777 | $ 93,449 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Narrative) (Details) € in Thousands, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Feb. 18, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2018EUR (€) | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Borrowings outstanding | $ 161,000 | $ 126,000 | |||
Interest expense | 1,030 | $ 1,003 | |||
Payment of earn-out consideration paid within operating activities | (633) | 469 | |||
Earn-out consideration cash payment within financing activities | 3,394 | ||||
Transfers in or out of Level 3 | 0 | ||||
Cash Flow Hedging [Member] | U.S. Dollar Denominated Foreign Currency Forward Contracts Euro Functional Currency [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Notional amounts | 2,100 | 0 | |||
Cash Flow Hedging [Member] | Mexican Peso-Denominated Foreign Currency Forward Contracts [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Notional amounts | 22,746 | $ 0 | |||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Notional amounts | $ 50,000 | ||||
Interest expense | 4 | ||||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Credit Facility [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Borrowings outstanding | 161,000 | ||||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Forward Currency Contracts [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Notional amounts | 24,846 | ||||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Notional amounts | 50,000 | ||||
Electronics [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Interest expense | $ 87 | 56 | |||
Orlaco [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Earn-out consideration | 8,474 | € 7,500 | |||
Payment of earn-out consideration paid within operating activities | 5,080 | ||||
Earn-out consideration cash payment within financing activities | $ 3,394 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value) (Details) - Cash Flow Hedging [Member] - USD ($) $ in Thousands | Mar. 31, 2020 | Feb. 18, 2020 |
Forward Currency Contracts [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 24,846 | |
Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 50,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | 50,000 | |
Prepaid Expenses and Other Current Assets [Member] | Forward Currency Contracts [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Financial assets carried at fair value | 66 | |
Accrued Expenses and Other Current Liabilities [Member] | Forward Currency Contracts [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Financial liabilities carried at fair value | 3,230 | |
Accrued Expenses and Other Current Liabilities [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Financial liabilities carried at fair value | $ 1,463 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements (Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)) (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Forward Currency Contracts [Member] | |||
Derivatives designated as cash flow hedges: | |||
Gain (loss) recorded in other comprehensive income (loss) | $ (3,320) | $ 269 | |
Gain (loss) reclassified from other comprehensive income (loss) into net income | (156) | $ 216 | |
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months | (3,164) | ||
Losses expected to be recognized in interest expense in next year | 545 | ||
Losses expected to be recognized in interest expense in after next year | 918 | ||
Interest Rate Swap [Member] | |||
Derivatives designated as cash flow hedges: | |||
Gain (loss) recorded in other comprehensive income (loss) | (1,467) | ||
Gain (loss) reclassified from other comprehensive income (loss) into net income | (4) | ||
Cost of Goods Sold [Member] | Forward Currency Contracts [Member] | |||
Derivatives designated as cash flow hedges: | |||
Gain (loss) reclassified from other comprehensive income (loss) into net income | (127) | $ 173 | |
Design and Development Expense [Member] | Forward Currency Contracts [Member] | |||
Derivatives designated as cash flow hedges: | |||
Gain (loss) reclassified from other comprehensive income (loss) into net income | (29) | $ 43 | |
Interest Expense [Member] | Forward Currency Contracts [Member] | |||
Derivatives designated as cash flow hedges: | |||
Gain (loss) reclassified from other comprehensive income (loss) into net income | $ 4 |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Recurring [Member] | ||
Financial assets carried at fair value: | ||
Forward currency asset contracts | $ 66 | |
Total financial assets carried at fair value | 66 | |
Financial liabilities carried at fair value: | ||
Forward currency liabilities contracts | 3,230 | |
Interest rate swap | 1,463 | |
Earn-out consideration | 8,610 | $ 12,011 |
Total financial liabilities carried at fair value | 13,303 | $ 12,011 |
Fair Value, Inputs, Level 2 [Member] | ||
Financial assets carried at fair value: | ||
Forward currency asset contracts | 66 | |
Total financial assets carried at fair value | 66 | |
Financial liabilities carried at fair value: | ||
Forward currency liabilities contracts | 3,230 | |
Interest rate swap | 1,463 | |
Total financial liabilities carried at fair value | 4,693 | |
Fair Value, Inputs, Level 3 [Member] | ||
Financial liabilities carried at fair value: | ||
Earn-out consideration | 8,610 | |
Total financial liabilities carried at fair value | $ 8,610 |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurements (Summary of the change in fair value of the Level 3 financial liabilities related to earn-out consideration) (Details) - Earnout Consideration [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Financial liability, Beginning balance | $ 12,011 | $ 18,672 |
Change in fair value | (633) | 469 |
Foreign currency adjustments | (2,768) | (261) |
Earn-out consideration cash payment | (8,474) | |
Financial liability, Ending balance | 8,610 | 10,406 |
Orlaco [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Financial liability, Beginning balance | 8,602 | |
Foreign currency adjustments | (128) | |
Earn-out consideration cash payment | (8,474) | |
Stoneridge Brazil [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Financial liability, Beginning balance | 12,011 | 10,070 |
Change in fair value | (633) | 469 |
Foreign currency adjustments | (2,768) | (133) |
Financial liability, Ending balance | $ 8,610 | $ 10,406 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,372 | $ 1,548 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) ¥ in Thousands, kr in Thousands, R$ in Thousands, $ in Thousands | 3 Months Ended | ||||||||||||
Mar. 31, 2020USD ($) | Mar. 31, 2020SEK (kr) | Mar. 31, 2020BRL (R$) | Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) | Mar. 31, 2020SEK (kr) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019SEK (kr) | Jun. 30, 2019USD ($) | Jun. 05, 2019USD ($) | Sep. 12, 2014USD ($) | Nov. 02, 2007USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Borrowings outstanding | $ 161,000 | $ 126,000 | |||||||||||
Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Capitalized deferred financing costs | $ 1,366 | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 400,000 | $ 300,000 | |||||||||||
Increase in maximum borrowing capacity of credit facility | $ 150 | ||||||||||||
Borrowings outstanding | $ 161,000 | 126,000 | |||||||||||
Maximum leverage ratio | 350.00% | 350.00% | 350.00% | 350.00% | |||||||||
Minimum interest coverage ratio | 350.00% | 350.00% | 350.00% | 350.00% | |||||||||
Write off of deferred debt issuance cost | $ 275 | ||||||||||||
Debt instrument covenant default of other debt maximum amount | $ 30,000 | ||||||||||||
Debt instrument covenant uninsured asset losses maximum amount | $ 30,000 | ||||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, weighted average interest rate | 2.04% | 2.04% | 2.04% | 2.04% | |||||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, weighted average interest rate | 1.67% | 1.67% | 1.67% | 1.67% | |||||||||
Asset-Based Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000 | ||||||||||||
Suzhou Short-Term Credit Line [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 5,649 | ¥ 40,000 | |||||||||||
Borrowings outstanding | $ 2,118 | 2,154 | |||||||||||
Outstanding credit lines weighted-average interest rate | 4.80% | 4.80% | 4.80% | 4.80% | |||||||||
Suzhou Short-Term Credit Line [Member] | Maximum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding credit lines interest rate | 5.00% | 5.00% | |||||||||||
Suzhou Short-Term Credit Line [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding credit lines interest rate | 4.70% | 4.70% | |||||||||||
Bank Acceptance Draft Credit Line [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit facility, borrowing capacity | $ 2,118 | ¥ 15,000 | 2,154 | ¥ 15,000 | |||||||||
Borrowings outstanding | 150 | ||||||||||||
Letter of Credit [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding letters of credit | 1,768 | ||||||||||||
Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit Facility covenant compliance | The Company was in compliance with all credit facility covenants at March 31, 2020 and December 31, 2019 | The Company was in compliance with all credit facility covenants at March 31, 2020 and December 31, 2019 | |||||||||||
Stoneridge Brazil?s Bank Overdraft Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit facility, borrowing capacity | R$ 5000 | 962 | 1,244 | ||||||||||
Borrowings outstanding | 0 | 0 | |||||||||||
Stoneridge Brazil Debt [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Notes covenant compliance | The Company was in compliance with all debt covenants at March 31, 2020 and December 31, 2019 | The Company was in compliance with all debt covenants at March 31, 2020 and December 31, 2019 | |||||||||||
Stoneridge Brazil [Member] | Term Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
2020 | 398 | ||||||||||||
2021 | $ 255 | ||||||||||||
Stoneridge Brazil [Member] | Stoneridge Brazil Long-Term Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, weighted average interest rate | 7.00% | 7.00% | 7.00% | 7.00% | |||||||||
Electronics [Member] | Line of Credit [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,025 | kr 20,000 | 2,136 | kr 20,000 | |||||||||
Borrowings outstanding | $ 0 | 0 | |||||||||||
Subsidiary borrowed and repaid | $ 1,949 | kr 19,155 | |||||||||||
Suzhou Short-Term Note [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 5,746 |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 161,000 | $ 126,000 |
Debt: | ||
Total debt | 2,771 | 3,126 |
Less: current portion | (2,516) | (2,672) |
Total long-term debt, net | 255 | 454 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 161,000 | 126,000 |
Debt: | ||
Debt, maturity | June 2024 | |
Suzhou Short-Term Credit Line [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 2,118 | 2,154 |
Debt: | ||
Debt, maturity | August 2020 | |
Maximum [Member] | Revolving Credit Facility [Member] | ||
Debt: | ||
Long-term debt, weighted average interest rate | 2.04% | |
Maximum [Member] | Suzhou Short-Term Credit Line [Member] | ||
Debt: | ||
Outstanding credit lines interest rate | 5.00% | |
Minimum [Member] | Revolving Credit Facility [Member] | ||
Debt: | ||
Long-term debt, weighted average interest rate | 1.67% | |
Minimum [Member] | Suzhou Short-Term Credit Line [Member] | ||
Debt: | ||
Outstanding credit lines interest rate | 4.70% | |
Stoneridge Brazil Long-Term Notes [Member] | ||
Debt: | ||
Long-term debt | $ 653 | $ 972 |
Debt, maturity | November 2021 | |
Interest rate | 7.00% |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares | Mar. 31, 2020 | Mar. 31, 2019 |
Performance Based Right to Receive Common Shares [Member] | ||
Common shares, non-vested | 789,027 | 691,207 |
Earnings Per Share (Weighted Av
Earnings Per Share (Weighted Average Shares Outstanding Used in Calculating Basic and Diluted Net Income Per Share) (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Basic weighted-average Common Shares outstanding | 27,232,036 | 28,529,301 |
Effect of dilutive shares | 359,135 | 555,507 |
Diluted weighted-average Common Shares outstanding | 27,591,171 | 29,084,808 |
Equity and Accumulated Other _3
Equity and Accumulated Other Comprehensive Loss (Common Share Repurchase) (Details) - USD ($) $ in Thousands | Mar. 06, 2020 | Mar. 06, 2020 | Mar. 03, 2020 | Feb. 25, 2020 | Feb. 24, 2020 | May 07, 2019 | Mar. 31, 2020 | Oct. 26, 2018 |
Stock Repurchase Program, Authorized Amount | $ 50,000 | $ 50,000 | ||||||
Payments for repurchase of common stock | $ 4,995 | |||||||
Weighted average price of common shares | 364,604 | |||||||
Period over which shares will be repurchased | 18 months | |||||||
Accelerated Share Repurchase Agreement [Member] | ||||||||
Payments for repurchase of common stock | $ 50,000 | |||||||
Stock repurchased and retired during period, shares | 1,349,528 | |||||||
Percentage of expected shares repurchased | 80.00% | |||||||
Treasury stock, retired, cost method, amount | $ 40,000 | |||||||
Equity increase (decrease) related to shares repurchase program. | $ 10,000 | |||||||
Agreement Letter 10b18 [Member] | ||||||||
Stock Repurchase Program, Authorized Amount | $ 5,000 | |||||||
Treasury stock, retired, cost method, amount | $ 4,995 | |||||||
Total company common shares | 242,634 | |||||||
Treasury shares | ||||||||
Treasury stock, retired, cost method, amount | $ (10,000) | |||||||
Additional Paid-In Capital | ||||||||
Treasury stock, retired, cost method, amount | $ 10,000 | |||||||
Additional Paid-In Capital | Agreement Letter 10b18 [Member] | ||||||||
Treasury stock, retired, cost method, amount | $ 4,995 |
Equity and Accumulated Other _4
Equity and Accumulated Other Comprehensive Loss (Changes in Accumulated Other Comprehensive Loss by Component) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Equity and Accumulated Other Comprehensive Loss [Abstract] | |||||
Foreign currency translation, Beginning balance | $ (91,472) | $ (86,044) | |||
Foreign currency translation, Other comprehensive income (loss) before reclassifications | (17,119) | (3,804) | |||
Foreign currency translation, Net other comprehensive income (loss), net of tax | (17,119) | (3,804) | |||
Foreign currency translation, Ending balance | (108,591) | (89,848) | |||
Unrealized gain (loss) on on derivatives, Beginning balance | 292 | ||||
Unrealized gain (loss) on on derivatives, Other comprehensive income (loss) before reclassifications | (3,781) | 213 | |||
Unrealized gain (loss) on on derivatives, Amounts reclassified from accumulated other comprehensive loss | 126 | (171) | |||
Unrealized gain (loss) on on derivatives, Net other comprehensive income (loss), net of tax | [1] | (3,655) | 42 | ||
Unrealized gain (loss) on on derivatives, Ending balance | (3,655) | 334 | |||
Total, Other comprehensive income (loss) before reclassifications | (20,900) | (3,591) | |||
Total, Amounts reclassified from accumulated other comprehensive loss | 126 | (171) | |||
Total, Net other comprehensive income (loss), net of tax | (20,774) | (3,762) | |||
Accumulated other comprehensive income (loss), net of tax, total | $ (112,246) | $ (89,514) | $ (91,472) | $ (85,752) | |
[1] | Net of tax (benefit) expense of $(972) and $11 for the three months ended March 31, 2020 and 2019, respectively. |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) R$ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Mar. 31, 2020BRL (R$) | Mar. 31, 2020USD ($) | Dec. 31, 2019BRL (R$) | Dec. 31, 2019USD ($) | |
Short-term Debt [Line Items] | |||||
Environmental remediation accrued undiscounted liability | $ 235 | $ 82 | |||
Product warranty and recall accrual | 3,059 | 3,111 | |||
Selling, General and Administrative Expenses [Member] | |||||
Short-term Debt [Line Items] | |||||
Gain on litigation | $ 6,473 | ||||
Interest Income [Member] | |||||
Short-term Debt [Line Items] | |||||
Gain on litigation | 2,392 | ||||
Professional Fees [Member] | |||||
Short-term Debt [Line Items] | |||||
Gain on litigation | $ 990 | ||||
Letter of Credit [Member] | |||||
Short-term Debt [Line Items] | |||||
Line of credit | 1,489 | ||||
Stoneridge Brazil [Member] | Civil, labor and other tax contingencies [Member] | |||||
Short-term Debt [Line Items] | |||||
Loss contingency, estimate of possible loss | R$ 29300 | $ 5,600 | R$ 29200 | $ 7,300 |
Commitments and Contingencies_3
Commitments and Contingencies (Reconciliation of Changes in Product Warranty and Recall Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments and Contingencies [Abstract] | ||
Product warranty and recall at beginning of period | $ 10,796 | $ 10,494 |
Accruals for warranties established during period | 1,128 | 1,545 |
Aggregate changes in pre-existing liabilities due to claim developments | 387 | 1,238 |
Settlements made during the period | (2,134) | (2,715) |
Foreign currency translation | (385) | (215) |
Product warranty and recall at end of period | $ 9,792 | $ 10,347 |
Business Realignment and Rest_3
Business Realignment and Restructuring (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Electronics [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 7 | $ 216 |
Additional restructuring costs | 750 | |
Control Devices [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 2,222 | 2,225 |
Canton Facility Restructuring Plan [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 2,222 | 2,225 |
Canton Facility Restructuring Plan [Member] | Control Devices [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated total cost | 700 | |
Employee Termination [Member] | Electronics [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | (15) | |
Employee Termination [Member] | Canton Facility Restructuring Plan [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 1,118 | 1,980 |
Other Restructuring [Member] | Electronics [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 7 | 117 |
Other Restructuring [Member] | Canton Facility Restructuring Plan [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 1,104 | 245 |
Contract Termination [Member] | Electronics [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 16 | |
Selling, General and Administrative Expenses [Member] | Canton Facility Restructuring Plan [Member] | Canton Facility [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 314 | 195 |
Cost of Goods Sold [Member] | Canton Facility Restructuring Plan [Member] | Canton Facility [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 1,490 | 1,252 |
Design and Development Expense [Member] | Canton Facility Restructuring Plan [Member] | Canton Facility [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 418 | $ 778 |
Business Realignment and Rest_4
Business Realignment and Restructuring (Schedule of Restructuring and Related Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | |
Canton Facility Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Beginning Balance | $ 2,636 | $ 1,980 | |
Charge to expense | 2,222 | $ 2,225 | |
Cash payments | (4,541) | (245) | |
Restructuring Reserve, Ending Balance | 317 | 1,980 | |
Control Devices [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Charge to expense | 2,222 | 2,225 | |
Electronics [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Beginning Balance | 52 | 49 | 656 |
Charge to expense | 7 | 216 | |
Cash payments | (7) | (725) | |
Utilization, Non-Cash | (98) | ||
Restructuring Reserve, Ending Balance | 52 | 49 | |
Employee Termination [Member] | Canton Facility Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Beginning Balance | 2,636 | 1,980 | |
Charge to expense | 1,118 | 1,980 | |
Cash payments | (3,437) | ||
Restructuring Reserve, Ending Balance | 317 | 1,980 | |
Employee Termination [Member] | Electronics [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Beginning Balance | 52 | 49 | 520 |
Charge to expense | (15) | ||
Cash payments | (456) | ||
Restructuring Reserve, Ending Balance | 52 | 49 | |
Accelerated Depreciation [Member] | Electronics [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Charge to expense | 98 | ||
Utilization, Non-Cash | (98) | ||
Contract Termination [Member] | Electronics [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Beginning Balance | 17 | ||
Charge to expense | 16 | ||
Cash payments | (33) | ||
Other Restructuring [Member] | Canton Facility Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Charge to expense | 1,104 | 245 | |
Cash payments | (1,104) | (245) | |
Other Restructuring [Member] | Electronics [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Beginning Balance | 119 | ||
Charge to expense | 7 | $ 117 | |
Cash payments | $ (7) | $ (236) |
Business Realignment and Rest_5
Business Realignment and Restructurings Realignment Charges Classified by Statement of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | $ 604 | $ 1,135 |
Cost of Goods Sold [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | 86 | |
Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | 518 | 1,125 |
Design and Development Expense [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | 10 | |
Control Devices [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | 377 | 522 |
Control Devices [Member] | Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 377 | 512 |
Control Devices [Member] | Design and Development Expense [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 10 | |
Stoneridge Brazil [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | 153 | |
Stoneridge Brazil [Member] | Cost of Goods Sold [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 86 | |
Stoneridge Brazil [Member] | Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 67 | |
Unallocated Corporate [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total business realignment charges | 74 | 613 |
Unallocated Corporate [Member] | Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | $ 74 | $ 613 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Taxes [Abstract] | ||
Income tax expense (benefit) on operations | $ 1,213 | $ 1,835 |
Effective income tax rate | 25.80% | 16.00% |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting (Schedule of
Segment Reporting (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Net Sales: | |||
Net sales | $ 182,966 | $ 218,297 | |
Operating Income (Loss) | |||
Total operating income (loss) | 3,659 | 11,699 | |
Total income before income taxes | 4,703 | 11,492 | |
Depreciation and Amortization: | |||
Total depreciation and amortization | 7,987 | 7,229 | |
Interest Expense, net: | |||
Total interest expense, net | 1,030 | 1,003 | |
Interest Expense, net: | |||
Total interest expense, net | 1,030 | 1,003 | |
Capital Expenditures: | |||
Capital expenditures | 6,669 | 8,684 | |
Long-Lived Assets | 251,231 | $ 270,943 | |
Total Assets: | |||
Total assets | 600,490 | 602,209 | |
Intersegment Eliminations [Member] | |||
Net Sales: | |||
Net sales | (9,615) | (10,589) | |
Total Assets: | |||
Total assets | (316,341) | (322,468) | |
Control Devices [Member] | |||
Net Sales: | |||
Net sales | 96,850 | 110,119 | |
Operating Income (Loss) | |||
Total operating income (loss) | 7,322 | 11,948 | |
Depreciation and Amortization: | |||
Total depreciation and amortization | 3,530 | 3,094 | |
Interest Expense, net: | |||
Total interest expense, net | 81 | 182 | |
Capital Expenditures: | |||
Capital expenditures | 2,314 | 3,492 | |
Total Assets: | |||
Total assets | 189,348 | 191,491 | |
Control Devices [Member] | Operating Segments [Member] | |||
Net Sales: | |||
Net sales | 98,197 | 111,980 | |
Control Devices [Member] | Inter-Segment Sales [Member] | |||
Net Sales: | |||
Net sales | 1,347 | 1,861 | |
Electronics [Member] | |||
Net Sales: | |||
Net sales | 71,546 | 90,846 | |
Operating Income (Loss) | |||
Total operating income (loss) | 2,872 | 9,031 | |
Depreciation and Amortization: | |||
Total depreciation and amortization | 2,481 | 2,397 | |
Interest Expense, net: | |||
Total interest expense, net | 87 | 56 | |
Capital Expenditures: | |||
Capital expenditures | 2,650 | 3,738 | |
Total Assets: | |||
Total assets | 271,750 | 285,027 | |
Electronics [Member] | Operating Segments [Member] | |||
Net Sales: | |||
Net sales | 79,814 | 99,568 | |
Electronics [Member] | Inter-Segment Sales [Member] | |||
Net Sales: | |||
Net sales | 8,268 | 8,722 | |
Stoneridge Brazil [Member] | |||
Net Sales: | |||
Net sales | 14,570 | 17,332 | |
Operating Income (Loss) | |||
Total operating income (loss) | 859 | 670 | |
Depreciation and Amortization: | |||
Total depreciation and amortization | 1,450 | 1,525 | |
Interest Expense, net: | |||
Total interest expense, net | 10 | 108 | |
Capital Expenditures: | |||
Capital expenditures | 1,133 | 819 | |
Total Assets: | |||
Total assets | 65,258 | 89,393 | |
Stoneridge Brazil [Member] | Operating Segments [Member] | |||
Net Sales: | |||
Net sales | 14,570 | 17,338 | |
Stoneridge Brazil [Member] | Inter-Segment Sales [Member] | |||
Net Sales: | |||
Net sales | 6 | ||
Unallocated Corporate [Member] | |||
Operating Income (Loss) | |||
Total operating income (loss) | (7,394) | (9,950) | |
Depreciation and Amortization: | |||
Total depreciation and amortization | 526 | 213 | |
Interest Expense, net: | |||
Total interest expense, net | 852 | 657 | |
Capital Expenditures: | |||
Capital expenditures | 572 | $ 635 | |
Total Assets: | |||
Total assets | $ 390,475 | $ 358,766 |
Segment Reporting (Schedule o_2
Segment Reporting (Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 182,966 | $ 218,297 | |
Long-term Assets: | |||
Total long-term assets | 251,231 | $ 270,943 | |
North America [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 99,851 | 119,367 | |
Long-term Assets: | |||
Total long-term assets | 87,375 | 87,430 | |
South America [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 14,570 | 17,332 | |
Long-term Assets: | |||
Total long-term assets | 37,446 | 52,518 | |
Europe and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 68,545 | $ 81,598 | |
Long-term Assets: | |||
Total long-term assets | $ 126,410 | $ 130,995 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) R$ in Thousands, $ in Thousands | 3 Months Ended | 64 Months Ended | |||||||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | May 15, 2017 | Dec. 31, 2019BRL (R$) | Dec. 31, 2019USD ($) | Mar. 31, 2019BRL (R$) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | May 16, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Income (loss) from equity method investments | $ 457 | $ 364 | |||||||
Fair value and other adjustments | 39 | 16 | |||||||
Investment | $ 28,024 | $ 32,437 | |||||||
MSIL | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment, ownership percentage | 49.00% | 49.00% | 49.00% | ||||||
Equity method investments | $ 12,346 | 12,701 | |||||||
Income (loss) from equity method investments | 457 | $ 364 | |||||||
Stoneridge Brazil [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage ownership in consolidated subsidiary | 74.00% | ||||||||
Percentage of additional noncontrolling interest acquired | 26.00% | ||||||||
Dividends Payable, Price Index Adjustment | R$ 261 | $ 68 | |||||||
Stoneridge Brazil [Member] | Noncontrolling interest | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Dividends payable | R$ 24154 | 6,010 | |||||||
Autotech Ventures [Member] | Venture Capital Funds [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Investment commitment | 10,000 | $ 10,000 | |||||||
Investment | $ 1,788 | $ 1,827 | |||||||
Contribution expected period (in years) | 10 years | ||||||||
Contribution by company | $ 400 |
Disposal of Non-Core Products (
Disposal of Non-Core Products (Disposal of Non-Core Products) (Details) - USD ($) $ in Thousands | Apr. 01, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Asset Purchase Agreement date | Apr. 1, 2019 | ||
Proceeds from sale of productive assets | $ 40,000 | ||
Selling, general and administrative | $ 29,503 | $ 35,910 | |
Non-core Switches and Connector Product [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||
Disposal group, net sales | 0 | 11,230 | |
Disposal group, operating income | 3,112 | ||
Control Devices [Member] | Non-core Switches and Connector Product [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||
Selling, general and administrative | $ 322 | ||
Services provided income per agreement recognized as reduction to selling general and administrative expenses | $ 21 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) $ in Thousands | May 04, 2020 | Jun. 30, 2020 |
Subsequent Event [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Restructuring initiation date | May 4, 2020 | |
Percentage reduction in global salaried workforce | 5.00% | |
Maximum [Member] | Scenario, Forecast [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Severance costs | $ 2,000 | |
Minimum [Member] | Scenario, Forecast [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Severance costs | $ 1,500 |