Stoneridge announced that sales and earnings for the year ended December 31, 2013 will be below previous guidance.
In a release on February 5, the Company noted that sales for the year ended December 31, 2013 are now expected to be in the range of $945.0 million to $950.0 million while earnings per share are expected to be in the range of $0.55 to $0.60. Previous guidance, which was originally published in February 2013 and reaffirmed in October 2013, projected sales in the range of $939.0 million to $974.0 million and earnings per share in the range of $0.75 to $0.95.
John Corey, President and Chief Executive Officer, commented, "Our consolidated sales will now come in at the low end of our original range. Our PST subsidiary's sales were lower than expected due to continued weakness in the Brazilian economy, higher relative sales of audio products compared with aftermarket products, and a sales hold due to a long lead time component supplier instituted by management to protect the brand position and image."
Corey continued, "Our Wiring business continued to experience higher-than-expected costs for premium freight and labor in the fourth quarter caused by abrupt changes to production schedules, which we had expected to stabilize in the fourth quarter. In addition, higher inventory and headcount positions were necessary to meet higher expected volumes in the commercial vehicle market projected in the first half of 2014."
Corey added, "Our financial position remains strong. The company's operating cash flow less capital expenditures was approximately $18.6 million for 2013, and our cash and cash equivalents balance at year end was $62.8 million. We will provide more detail on our results during our fourth quarter 2013 conference call which will be held in early March 2014."
Stoneridge also published its formal guidance for 2014. Corey commented, "We expect both Control Devices and Electronics to continue their good performance supported by improvements in the PST and Wiring businesses in 2014. Though we continued to face market and customer challenges in the third and fourth quarters of 2013, we believe that the Brazilian economy should stabilize in 2014 and that new program sales will allow us to achieve the earnings improvement we are forecasting for the coming year. In addition, we expect improved financial performance in our Wiring business, and we anticipate business conditions for our large North American commercial customer to moderate compared with 2013."
Corey continued, "Our new business pipeline, which is key to Stoneridge's growth, remains intact. We expect net new business to be in the $175.0 million range over the next five years, driven mainly by technologically advanced, higher value-added products. In addition, we were excited to see that our net new business sales were better than expected for 2013 by more than 20 percent compared to the high end of our expectations."
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