Stoneridge (SRI) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered significant margin expansion and earnings growth, with adjusted EPS at $0.17 and adjusted EBITDA margin up 410 bps sequentially to 6.8%, driven by material cost reductions, operational excellence, and cost control.

• Net income was $2.8M, up from a net loss of $3.0M in Q2 2023, as gross margin held steady at 22.7% despite an 11.2% sales decline year-over-year.

• MirrorEye OEM launches with Volvo in Europe and Peterbilt in North America are ramping up, with strong customer feedback and a major Volvo order for 1,500 vehicles.

• Announced a partnership with Volvo Bus for a pilot of an AI-based Fuel Advice system, marking the first customer deployment of this data-driven solution.

• Natalia Noblet was appointed President of Electronics, effective September 1, 2024, to drive growth and innovation.

Financial highlights

• Q2 2024 sales were $237.1M, gross profit $53.7M (22.7% margin), adjusted operating income $5.4M (2.3% margin), and adjusted EBITDA $16.1M (6.8% margin).

• Adjusted EPS was $0.17, up $0.39 sequentially from Q1 2024; net income was $2.8M.

• Favorable FX impact of $2.3M offset prior headwinds; inventory reduced by $9.0M in H1 2024.

• Cash and cash equivalents at June 30, 2024, were $42.1M; net debt at $161.4M; compliance leverage ratio improved to 2.89x.

• Operating income was $3.4M, down from $4.3M in Q2 2023.

Outlook and guidance

• Full-year 2024 revenue guidance reduced to $940–$970M (midpoint $955M) due to FX, OEM production, and demand volatility.

• Gross margin guidance raised to 22.75%–23.0%; adjusted operating margin guidance at ~2.75%; adjusted EBITDA guidance at $58–$64M (6.2%–6.6% margin).

• Adjusted EPS guidance narrowed to $0.18–$0.28 (midpoint $0.23), reflecting reduced fixed cost leverage and higher tax expense.

• Expect Q3 revenue to decline seasonally, with Q4 improvement possible from MirrorEye and tachograph sales.

• Net debt to EBITDA compliance ratio expected to improve to ~2.5x by year-end.