Stoneridge (SRI) Q4 2023 earnings summary

Executive summary

• FY 2023 adjusted sales grew 14.2% to $961.2M and adjusted EBITDA rose to $48.1M; adjusted EPS was $(0.08).

• Q4 adjusted EPS was $0.12; adjusted EBITDA was $15.6M, or 6.8% of adjusted sales.

• 2028 targets are revenue of $1.35B–$1.55B and EBITDA margin of 12%–14%.

Financial highlights

• FY reported net sales were $975.8M vs. $899.9M in 2022; adjusted sales were $961.2M vs. $841.5M, up 14.2%.

• FY adjusted gross profit was $202.1M at 21.0% margin; adjusted operating income was $16.2M at 1.7% margin, vs. $2.7M and 0.3% in 2022.

• FY adjusted EBITDA rose to $48.1M from $29.8M, with margin increasing to 5.0% from 3.5%; reported net loss was $5.2M and reported EPS $(0.19).

• Q4 reported sales were $229.5M; adjusted sales were $229.4M. Adjusted operating income was $6.2M at 2.7% margin, and adjusted gross profit was $45.7M at 19.9%.

• FY net loss was $5.2M, or $0.19 per share, compared with a $14.1M net loss, or $0.52 per share, in 2022.

Outlook and guidance

• 2024 guidance: sales of $990M–$1.01B, adjusted gross margin of 22.0%–22.75%, operating margin of 2.75%–3.25%, EPS of $0.30–$0.40 and EBITDA of $64M–$70M, or 6.5%–6.9% of sales.

• Guidance midpoint is $1.0B revenue and $67M EBITDA, with a 6.7% EBITDA margin and 170 bps margin expansion vs. 2023.

• Revenue midpoint implies ~4% growth while weighted-average OEM end markets are expected to decline ~5%; MirrorEye and Smart 2 tachograph launches are expected growth drivers.

• Expected EBITDA margin expansion is 150–190 bps, supported by revenue growth, gross-margin improvement, cost actions and operating leverage.

• 2028 targets are revenue of $1.35B–$1.55B and EBITDA margin of 12%–14%; midpoint targets are $1.45B revenue and 13% margin.