UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2009

OR

¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________to ________

Commission file number: 001-13337

STONERIDGE, INC.
(Exact name of registrant as specified in its charter)

Ohio
 
34-1598949
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)

9400 East Market Street, Warren, Ohio
 
44484
(Address of principal executive offices)
 
(Zip Code)

(330) 856-2443
Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   
x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  
o Yes o No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

 
Accelerated filer x
 
Non-accelerated filer o
 
Smaller reporting company o
       
(Do not check if a smaller reporting company)
   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  o Yes x No

The number of Common Shares, without par value, outstanding as of July 24, 2009 was 25,175,801.

 
 

 

STONERIDGE, INC. AND SUBSIDIARIES
 
INDEX
 
Page No.
PART I–FINANCIAL INFORMATION
 
 
Item 1.
Financial Statements
 
 
Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2009 and December 31, 2008
2
 
Condensed Consolidated Statements of Operations (Unaudited) For the Three and Six Months Ended June 30, 2009 and 2008
3
 
Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2009 and 2008
4
 
Notes to Condensed Consolidated Financial Statements (Unaudited)
5
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
24
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
33
Item 4.
Controls and Procedures
34
     
PART II–OTHER INFORMATION
     
Item 1.
Legal Proceedings
34
Item 1A.
Risk Factors
34
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
34
Item 3.
Defaults Upon Senior Securities
34
Item 4.
Submission of Matters to a Vote of Security Holders
35
Item 5.
Other Information
35
Item 6.
Exhibits
35
     
Signatures
36
Index to Exhibits
37
EX – 10.1
 
EX – 10.2
 
EX – 10.3
 
EX – 31.1
 
EX – 31.2
 
EX – 32.1
 
EX – 32.2
 

 
1

 
 
PART I–FINANCIAL INFORMATION
 
Item 1.  Financial Statements.

STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

   
June 30,
   
December 31,
 
   
2009
   
2008
 
 
 
(Unaudited)
   
(Audited)
 
ASSETS
           
             
Current Assets:
           
Cash and cash equivalents
  $ 85,481     $ 92,692  
Accounts receivable, less reserves of $4,186 and $4,204, respectively
    70,689       96,535  
Inventories, net
    43,683       54,800  
Prepaid expenses and other
    16,453       9,069  
Deferred income taxes
    1,957       1,495  
Total current assets
    218,263       254,591  
                 
Long-Term Assets:
               
Property, plant and equipment, net
    80,287       87,701  
Other Assets:
               
Investments and other, net
    43,279       40,145  
Total long-term assets
    123,566       127,846  
Total Assets
  $ 341,829     $ 382,437  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
                 
Current Liabilities:
               
Accounts payable
  $ 41,020     $ 50,719  
Accrued expenses and other
    39,040       43,485  
Total current liabilities
    80,060       94,204  
                 
Long-Term Liabilities:
               
Long-term debt
    183,000       183,000  
Deferred income taxes
    5,379       7,002  
Other liabilities
    6,987       6,473  
Total long-term liabilities
    195,366       196,475  
                 
Shareholders' Equity:
               
Preferred Shares, without par value, authorized 5,000 shares, none issued.
    -       -  
Common Shares, without par value, authorized 60,000 shares, issued 25,286 and 24,772 shares and outstanding 25,176 and 24,665 shares, respectively, with no stated value
    -       -  
Additional paid-in capital.
    158,232       158,039  
Common Shares held in treasury, 110 and 107 shares, respectively, at cost
    (132 )     (129 )
Accumulated deficit
    (90,499 )     (59,155 )
Accumulated other comprehensive loss
    (1,198 )     (6,997 )
Total shareholders’ equity
    66,403       91,758  
Total Liabilities and Shareholders' Equity
  $ 341,829     $ 382,437  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
2

 

STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Net Sales
  $ 102,290     $ 213,229     $ 223,375     $ 416,299  
                                 
Costs and Expenses:
                               
Cost of goods sold
    88,694       163,875       190,504       315,128  
Selling, general and administrative
    26,338       36,884       53,415       73,166  
Restructuring charges
    1,551       1,713       2,509       3,135  
                                 
Operating Income (Loss)
    (14,293 )     10,757       (23,053 )     24,870  
                                 
Interest expense, net
    5,538       4,880       11,035       10,252  
Equity in earnings of investees
    (903 )     (3,016 )     (1,478 )     (6,835 )
Loss on early extinguishment of debt
    -       271       -       770  
Other expense (income), net.
    639       (124 )     645       278  
                                 
Income (Loss) Before Income Taxes
    (19,567 )     8,746       (33,255 )     20,405  
                                 
Provision (benefit) for income taxes
    197       4,062       (1,911 )     9,174  
                                 
Net Income (Loss)
  $ (19,764 )   $ 4,684     $ (31,344 )   $ 11,231  
                                 
Basic net income (loss) per share
  $ (0.84 )   $ 0.20     $ (1.33 )   $ 0.48  
Basic weighted average shares outstanding
    23,516       23,286       23,490       23,327  
                                 
Diluted net income (loss) per share
  $ (0.84 )   $ 0.20     $ (1.33 )   $ 0.47  
Diluted weighted average shares outstanding
    23,516       23,690       23,490       23,722  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
3

 

STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

   
Six Months Ended
 
   
June 30,
 
   
2009
   
2008
 
OPERATING ACTIVITIES:
           
Net income (loss)
  $ (31,344 )   $ 11,231  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities -
               
Depreciation
    10,267       14,316  
Amortization.
    485       784  
Deferred income taxes
    (2,282 )     7,281  
Equity in earnings of investees
    (1,478 )     (6,835 )
Loss on sale of property, plant and equipment
    280       145  
Share-based compensation expense
    597       1,903  
Changes in operating assets and liabilities -
               
Accounts receivable, net
    25,974       (17,924 )
Inventories, net.
    11,584       (11,739 )
Prepaid expenses and other
    (3,384 )     (625 )
Accounts payable
    (10,333 )     6,081  
Accrued expenses and other
    (2,966 )     7,956  
Net cash provided by (used for) operating activities
    (2,600 )     12,574  
                 
INVESTING ACTIVITIES:
               
Capital expenditures
    (6,743 )     (11,641 )
Proceeds from sale of property, plant and equipment
    92       307  
Business acquisitions and other
    -       (980 )
Net cash used for investing activities
    (6,651 )     (12,314 )
                 
FINANCING ACTIVITIES:
               
Repayments of long-term debt
    -       (17,000 )
Share-based compensation activity, net
    -       1,162  
Premiums related to early extinguishment of debt
    -       (553 )
Net cash used for financing activities
    -       (16,391 )
                 
Effect of exchange rate changes on cash and cash equivalents
    2,040       1,549  
                 
Net change in cash and cash equivalents
    (7,211 )     (14,582 )
                 
Cash and cash equivalents at beginning of period
    92,692       95,924  
                 
Cash and cash equivalents at end of period
  $ 85,481     $ 81,342  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
4

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

(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 “Commission”).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 have been condensed or omitted pursuant to the Commission’s rules and regulations.The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the results to be expected for the full year.

Although the Company believes that the disclosures are adequate to make the information presented not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2008.

(2)  Inventories

Inventories are valued at the lower of cost or market.Cost is determined by the last-in, first-out (“LIFO”) method for approximately 70% and 72% of the Company’s inventories at June 30, 2009 and December 31, 2008, respectively, and by the first-in, first-out (“FIFO”) method for all other inventories.The Company adjusts its excess and obsolescence reserve at least 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 consist of the following:

   
June 30,
   
December 31,
 
    
2009
   
2008
 
             
Raw materials
  $ 21,926     $ 32,981  
Work-in-progress
    3,138       8,876  
Finished goods
    22,103       15,890  
Total inventories
    47,167       57,747  
Less: LIFO reserve
    (3,484 )     (2,947 )
Inventories, net
  $ 43,683     $ 54,800  

(3)  Fair Value of Financial Instruments

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 estimated fair value of the Company’s senior notes (fixed rate debt) at June 30, 2009 and December 31, 2008, per quoted market sources, was $146.4 million and $124.4 million, respectively.The carrying value was $183.0 million as of June 30, 2009 and December 31, 2008.

Derivative Instruments and Hedging Activities

  Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 161, Disclosures About Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133, which expands the quarterly and annual disclosure requirements about the Company’s derivative instruments and hedging activities.The adoption of SFAS 161 did not have an effect on the Company’s financial position, results of operations or cash flows.

 
5

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

We make use of derivative instruments in foreign exchange and commodity price hedging programs.Derivatives currently in use are foreign currency forward contracts and commodity swaps.These contracts are used strictly for hedging and not for speculative purposes.They are used to mitigate uncertainty and volatility and to cover underlying exposures.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 strong credit ratings.

The Company conducts business internationally and therefore is exposed to foreign currency exchange risk.The Company uses derivative financial instruments as cash flow hedges to mitigate its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions and other foreign currency exposures.The currencies hedged by the Company include the British pound and Mexican peso.In certain instances, the foreign currency forward contracts are marked to market, with gains and losses recognized in the Company’s condensed consolidated statement of operations as a component of other expense (income), net.The Company’s foreign currency forward contracts substantially offset gains and losses on the underlying foreign currency denominated transactions.As of June 30, 2009 and December 31, 2008, the Company held foreign currency forward contracts to reduce the exposure related to the Company’s British pound-denominated intercompany receivables.These contracts expire in September 2009.For the six months ended June 30, 2009, the Company recognized a $191 loss related to the British pound contract in the condensed consolidated statement of operations as a component of other expense (income), net.The Company also holds contracts intended to reduce exposure to the Mexican peso.These contracts were executed to hedge forecasted transactions, and therefore the contracts are accounted for as cash flow hedges.These Mexican peso-denominated foreign currency option contracts expire monthly throughout 2009.The effective portion of the unrealized gain or loss is deferred and reported in the Company’s condensed consolidated balance sheets as a component of accumulated other comprehensive loss.The Company’s expectation is that the cash flow hedges will be highly effective in the future.The effectiveness of the transactions has been and will be measured on an ongoing basis using regression analysis.

To mitigate the risk of future price volatility and, consequently, fluctuations in gross margins, the Company has entered into fixed price commodity swaps with a financial institution to fix the cost of copper purchases. In December 2007, the Company entered into a fixed price swap contract for 1.0 million pounds of copper, which expired on December 31, 2008.In September 2008, the Company entered into a fixed price swap contract for 1.4 million pounds of copper, which covers the period from January 2009 to December 2009.Because these contracts were executed to hedge forecasted transactions, the contracts are accounted for as cash flow hedges.The unrealized gain or loss for the effective portion of the hedge is deferred and reported in the Company’s condensed consolidated balance sheets as a component of accumulated other comprehensive loss. The Company deems these cash flow hedges to be highly effective.The effectiveness of the transactions has been and will be measured on an ongoing basis using regression analysis.

 
6

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows:
 
               
Prepaid expenses
   
Accrued expenses and
 
    
Notional amounts1
   
and other assets
   
other liabilities
 
   
June 30,
   
December 31,
   
June 30,
   
December 31,
   
June 30,
   
December 31,
 
   
2009
   
2008
   
2009
   
2008
   
2009
   
2008
 
Derivatives designated as hedging instruments under SFAS 133:
                                   
Forward currency contracts
  $ 17,258     $ 35,457     $ -     $ -     $ 396     $ 2,930  
Commodity contracts
    2,042       4,085       -       -       464       2,104  
      19,300       39,542       -       -       860       5,034  
                                                 
Derivatives not designated as hedging instruments under SFAS 133:
                                               
Forward currency contracts.
    6,686       8,762       22       2,101       -       -  
Total derivatives.
  $ 25,986     $ 48,304     $ 22     $ 2,101     $ 860     $ 5,034  

  1 - Notional amounts represent the gross contract / notional amount of the derivatives outstanding.

Amounts recorded in other comprehensive loss in shareholders’ equity and in net loss for the three months ended June 30, 2009 were as follows:

   
Amount of gain
recorded in other
comprehensive loss
   
Amount of loss
reclassified from 
other comprehensive 
loss into net loss
 
Location of loss
reclassified from other
comprehensive loss into
net loss
Derivatives designated as cash flow hedges
             
Forward currency contracts
  $ 2,273     $ -    
Commodity contracts
    663       (281 )
Cost of goods sold
    $ 2,936     $ (281 )  

Amounts recorded in other comprehensive loss in shareholders’ equity and in net loss for the six months ended June 30, 2009 were as follows:

   
Amount of gain
recorded in other
comprehensive loss
   
Amount of loss
reclassified from 
other comprehensive
loss into net loss
 
Location of loss
reclassified from other
comprehensive loss into
net loss
Derivatives designated as cash flow hedges
             
Forward currency contracts
  $ 2,534     $ -    
Commodity contracts
    1,640       (758 )
Cost of goods sold
    $ 4,174     $ (758 )  

These derivatives will be reclassified from other comprehensive loss to the consolidated statement of operations over the next six months.

 
7

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

Statement of Financial Accounting Standard No. 157, Fair Value Measurements
 
Effective January 1, 2009, the Company adopted SFAS No. 157, Fair Value Measurements (“SFAS 157”) as it relates to nonfinancial assets and nonfinancial liabilities measured on a non-recurring basis.The Company adopted SFAS 157 for financial assets and financial liabilities on January 1, 2008.SFAS 157 clarifies the definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value and expands disclosures about the use of fair value measurements.The adoption of SFAS 157 did not have a material effect on the Company’s fair value measurements.

The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.

   
June 30, 2009
   
December 31,
 
          
Fair Value Estimated Using
   
2008
 
    
Fair Value
   
Level 1 inputs(1)
   
Level 2 inputs(2)
   
Fair Value
 
                         
Financial assets carried at fair value
                       
                         
Available for sale security
  $ 223     $ 223     $ -     $ 252  
Forward currency contracts
    22       -       22       2,101  
                                 
Total financial assets carried at fair value.
  $ 245     $ 223     $ 22     $ 2,353  
                                 
Financial liabilities carried at fair value
                               
                                 
Forward currency contracts
  $ 396     $ -     $ 396     $ 2,930  
Commodity hedge contracts
    464       -       464       2,104  
                                 
Total financial liabilities carried at fair value
  $ 860     $ -     $ 860     $ 5,034  

(1) 
Fair values estimated using Level 1 inputs, which consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.The available for sale security is an equity security that is publically traded.

(2) 
Fair values estimated using Level 2 inputs, other than quoted prices, that 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 and commodity hedge contracts, inputs include foreign currency exchange rates and commodity indexes.

 
8

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

(4)  Share-Based Compensation

Total compensation expense recognized in the condensed consolidated statements of operations for share-based compensation arrangements was $33 and $822 for the three months ended June 30, 2009 and 2008, respectively.For the six months ended June 30, 2009 and 2008, total compensation expense recognized in the condensed consolidated statements of operations for share-based compensation arrangements was $597 and $1,903, respectively.

(5)  Comprehensive Income (Loss)

SFAS No. 130, Reporting Comprehensive Income, establishes standards for the reporting and disclosure of comprehensive income (loss).

The components of comprehensive income (loss), net of tax are as follows:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Net income (loss).
  $ (19,764 )   $ 4,684     $ (31,344 )   $ 11,231  
Other comprehensive income (loss):
                               
Currency translation adjustments
    4,784       1,294       1,894       5,110  
Pension liability adjustments.
    (292 )     (1 )     (250 )     (10 )
Unrealized gain (loss) on marketable securities
    35       5       (19 )     (12 )
Unrecognized gain (loss) on derivatives
    2,936       (170 )     4,174       348  
Total other comprehensive income
    7,463       1,128       5,799       5,436  
Comprehensive income (loss).
  $ (12,301 )   $ 5,812     $ (25,545 )   $ 16,667  

Accumulated other comprehensive loss, net of tax is comprised of the following:

   
June 30,
   
December 31,
 
   
2009
   
2008
 
             
Foreign currency translation adjustments
  $ 1,900     $ 6  
Pension liability adjustments
    (2,209 )     (1,959 )
Unrealized loss on marketable securities
    (49 )     (30 )
Unrecognized loss on derivatives
    (840 )     (5,014 )
Accumulated other comprehensive loss
  $ (1,198 )   $ (6,997 )

6)  Long-Term Debt

Senior Notes

The Company had $183.0 million of senior notes outstanding at June 30, 2009 and December 31, 2008, respectively.During the first half of 2008, the Company repurchased and retired $17.0 million in face value of the senior notes.The outstanding senior notes bear interest at an annual rate of 11.50% and mature on May 1, 2012.The senior notes are redeemable, at the Company’s option, at 101.917 until April 30, 2010.The senior notes will remain redeemable at various levels until the maturity date.Interest is payable on May 1 and November 1 of each year.The senior notes do not contain financial covenants.The Company was in compliance with all non-financial covenants at June 30, 2009 and December 31, 2008.


 
9

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

Credit Facility

On November 2, 2007, the Company entered into an asset-based credit facility (the “credit facility”), which permits borrowing up to a maximum level of $100.0 million.At June 30, 2009 and December 31, 2008, there were no borrowings on this credit facility. The available borrowing capacity on this credit facility is based on eligible current assets, as defined.At June 30, 2009 and December 31, 2008, the Company had borrowing capacity of $45.5 million and $57.7 million, respectively based on eligible current assets.The credit facility does not contain financial performance covenants which would constrain our borrowing capacity. However, restrictions do include limits on capital expenditures, operating leases, dividends and investment activities in a negative covenant which limits investment activities to $15.0 million minus certain guarantees and obligations.The credit facility expires on November 1, 2011, and requires a commitment fee of 0.25% on the unused balance.Interest is payable quarterly at either (i) the higher of the prime rate or the Federal Funds rate plus 0.50%, plus a margin of 0.00% to 0.25% or (ii) LIBOR plus a margin of 1.00% to 1.75%, depending upon the Company’s undrawn availability, as defined.The Company was in compliance with all covenants at June 30, 2009 and December 31, 2008.

(7)  Net Income (Loss) Per Share

Basic net income (loss) per share was computed by dividing net income (loss) by the weighted-average number of Common Shares outstanding for each respective period.Diluted net income 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.For all periods in which the Company recognized a net loss the Company has recognized zero dilutive effect from securities as no anti-dilution is permitted under SFAS No. 128, Earnings Per Share.

Actual weighted-average shares outstanding used in calculating basic and diluted net income (loss) per share are as follows:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Basic weighted-average shares outstanding
    23,515,543       23,285,848       23,489,561       23,327,024  
Effect of dilutive securities
    -       403,988       -       394,793  
Diluted weighted-average shares outstanding
    23,515,543       23,689,836       23,489,561       23,721,817  

Options not included in the computation of diluted net income (loss) per share to purchase 183,250 and 50,000 Common Shares at an average price of $9.57 and $15.73, respectively, per share were outstanding at June 30, 2009 and June 30, 2008, respectively.These outstanding options were not included in the computation of diluted net income (loss) per share because their respective exercise prices were greater than the average market price of Common Shares.

As of June 30, 2009 and 2008, 628,275 performance-based restricted shares were outstanding.These shares were not included in the computation of diluted net income (loss) per share because not all vesting conditions were achieved as of June 30, 2009 and 2008.These shares may or may not become dilutive based on the Company’s ability to exceed future earnings thresholds.

(8)  Restructuring

On October 29, 2007, the Company announced restructuring initiatives to improve manufacturing efficiency and cost position by ceasing manufacturing operations at its Sarasota, Florida and Mitcheldean, United Kingdom locations.In the third quarter of 2008, the Company announced restructuring initiatives in our Canton, Massachusetts location. In the fourth quarter of 2008, the Company announced restructuring initiatives in our Orebro, Sweden and Tallinn, Estonia locations as well as additional initiatives in our Canton, Massachusetts location.In response to the depressed conditions in the North American and European commercial vehicle and automotive markets, the Company began additional restructuring initiatives in our Juarez, Mexico, Tallinn, Estonia and Canton, Massachusetts locations during the first quarter of 2009.The Company began additional restructuring initiatives during the second quarter of 2009 in our Lexington, Ohio, Orebro and Bromma, Sweden and Juarez and Monclova, Mexico locations as a result of decline in the North American and European commercial vehicle and automotive market conditions.In connection with these initiatives, the Company recorded restructuring charges of $1,551 and $3,657 in the Company’s condensed consolidated statement of operations for the three months ended June 30, 2009 and 2008, respectively.Restructuring charges for the six months ended June 30, 2009 and 2008 were $2,532 and $6,177, respectively.Restructuring expenses that were general and administrative in nature were included in the Company’s condensed consolidated statement of operations as part of restructuring charges, while the remaining restructuring related charges were included in cost of goods sold.
 
In 2009, the Company has classified the Sarasota, Florida facility as an asset held for sale and has included the net book value of the facility within the June 30, 2009 Balance Sheet as a component of prepaid expense and other.
 
 
10

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

The charges related to the restructuring initiatives that belong to the Electronics reportable segment included the following:

   
Severance
Costs
   
Contract
Termination
Costs
   
Other
Associated
Costs
   
Total
 
                         
Total expected restructuring charges
  $ 5,555     $ 1,720     $ 2,504     $ 9,779  
                                 
2007 charge to expense
  $ 468     $ -     $ 103     $ 571  
Cash payments
    -       -       (103 )     (103 )
                                 
Accrued balance at December 31, 2007
    468       -       -       468  
                                 
2008 charge to expense.
    2,830       1,305       2,401       6,536  
Cash payments
    (2,767 )     -       (2,221 )     (4,988 )
                                 
Accrued balance at December 31, 2008
    531       1,305       180       2,016  
                                 
First quarter 2009 charge to expense
    369       92       -       461  
Second quarter 2009 charge to expense
    1,435       -       -       1,435  
Foreign currency translation effect
    -       323       -       323  
Cash payments
    (1,519 )     (241 )     (180 )     (1,940 )
                                 
Accrued Balance at June 30, 2009
  $ 816     $ 1,479     $ -     $ 2,295  
                                 
Remaining expected restructuring charge
  $ 453     $ -     $ -     $ 453  


 
11

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

The charges related to the restructuring initiatives that belong to the Control Devices reportable segment included the following:

   
Severance
Costs
   
Other
Associated
Costs
   
Total (A)
 
                   
Total expected restructuring charges
  $ 3,491     $ 6,449     $ 9,940  
                         
2007 charge to expense
  $ 357     $ 99     $ 456  
Cash payments
    -       -       -  
                         
Accrued balance at December 31, 2007
    357       99       456  
                         
2008 charge to expense
    2,521       6,325       8,846  
Cash payments
    (1,410 )     (6,024 )     (7,434 )
                         
Accrued balance at December 31, 2008
    1,468       400       1,868  
                         
First quarter 2009 charge to expense
    497       25       522  
Second quarter 2009 charge to expense
    116       -       116  
Cash payments
    (2,060 )     (135 )     (2,195 )
                         
Accrued Balance at June 30, 2009
  $ 21     $ 290     $ 311  
                         
Remaining expected restructuring charge
  $ -     $ -     $ -  

(A)
Total expected restructuring charges does not include the expected gain from the future sale of the Company’s Sarasota, Florida, facility.

All restructuring charges, except for asset-related charges, result in cash outflows. Severance costs relate to a reduction in workforce.Contract termination costs represent costs associated with long-term lease obligations that were cancelled as part of the restructuring initiatives.Other associated costs include premium direct labor, inventory and equipment move costs, relocation expense, increased inventory carrying cost and miscellaneous expenditures associated with exiting business activities.No fixed-asset impairment charges were incurred because assets are being transferred to other locations for continued production.

(9)  Commitments and Contingencies

In the ordinary course of business, the Company is involved in various legal proceedings, workers’ compensation disputes and other commercial matters. The Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on the results of operations, cash flows or the financial position of the Company.

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 future and existing 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.The Company can provide no assurances that it will not experience material claims in the future or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued or beyond what the Company may recover from its suppliers.

 
12

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

The following provides a reconciliation of changes in product warranty and recall liability for the six months ended June 30, 2009 and 2008:

   
2009
   
2008
 
             
Product warranty and recall at beginning of period
  $ 5,527     $ 5,306  
Accruals for products shipped during period
    293       3,417  
Aggregate changes in pre-existing liabilities due to claims developments
    463       745  
Settlements made during the period (in cash or in kind)
    (2,179 )     (2,157 )
Product warranty and recall at end of period
  $ 4,104     $ 7,311  

(10)  Employee Benefit Plans

The Company has a single defined benefit pension plan that covers certain former employees in the United Kingdom.The components of net periodic cost (benefit) under the defined benefit pension plan are as follows:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Service cost
  $ 14     $ 35     $ 28     $ 70  
Interest cost
    219       316       438       632  
Expected return on plan assets
    (165 )     (361 )     (330 )     (722 )
Amortization of actuarial loss
    43       -       86       -  
Net periodic cost (benefit)
  $ 111     $ (10 )   $ 222     $ (20 )

The Company expects to contribute $94 to its pension plan in 2009.Of this amount, contributions of $53 have been made to the pension plan as of June 30, 2009.

Effective June 1, 2009 the Company discontinued matching contributions to the Company’s 401(k) plan covering substantially all of its employees in the United States.

(11)  Income Taxes

The Company recognized a provision from income taxes of $197, or (1.0)% of pre-tax loss, and $4,062, or 46.4% of pre-tax income, for federal, state and foreign income taxes for the three months ended June 30, 2009 and 2008, respectively.The Company recognized a provision (benefit) for income taxes of $(1,911), or 5.7% of pre-tax loss, and $9,174, or 45.0% of pre-tax income, for federal, state and foreign income taxes for the six months ended June 30, 2009 and 2008, respectively. As reported at December 31, 2008, the Company is in a cumulative loss position and provides a valuation allowance offsetting federal, state and certain foreign deferred tax assets. As a result, a tax benefit is not being provided for losses incurred in the first half of 2009, for federal, state and certain foreign jurisdictions. The inability to recognize a tax benefit for these losses and other deferred tax assets has a significant impact on our effective tax rate as well as the comparability of the current quarter and year-to-date effective tax rate to prior periods in which the Company had not recorded a federal valuation allowance.The difference in the effective tax rate for the three and six month periods ended June 30, 2009 compared to the three and six month periods ended June 30, 2008, was primarily attributable to the valuation allowance for federal and state deferred tax assets provided against the current year domestic loss which was partially offset by recording a tax benefit related to current period losses in certain foreign jurisdictions in which it is more likely than not that the benefit of those losses will be realized in the current year.

 
13

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

(12)  Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”).This standard improves reporting by creating greater consistency in the accounting and financial reporting of business combinations.Additionally, SFAS 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination.SFAS 141(R) was effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of SFAS 141(R) did not have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”).This standard improves the relevance, comparability and transparency of financial information provided to investors by requiring all entities to report noncontrolling (minority) interests in subsidiaries in the same way.Additionally, SFAS 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transactions.SFAS 160 was effective for financial statements issued for fiscal years beginning after December 15, 2008.The adoption of SFAS 160 did not have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2008, the FASB issued Staff Position 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets (“FSP 132(R)-1”).FSP 132(R)-1 requires entities to provide enhanced disclosures about how investment allocation decisions are made, the major categories of plan assets, the inputs and valuation techniques used to measure fair value of plan assets, the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period and significant concentrations of risk within plan assets.FSP 132(R)-1 is effective for the Company beginning with its year ending December 31, 2009.The Company is currently assessing the potential effect, if any, on its consolidated financial statements.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140, (“SFAS 166”). SFAS 166 amends various provisions of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities—a replacement of FASB Statement No. 125, by removing the concept of a qualifying special-purpose entity and removes the exception from applying FASB Interpretation No. 46, Consolidation of Variable Interest Entities—an interpretation of ARB No. 51, (“FIN 46(R)”)to variable interest entities that are qualifying special-purpose entities; limits the circumstances in which a transferor derecognizes a portion or component of a financial asset; defines a participating interest; requires a transferor to recognize and initially measure at fair value all assets obtained and liabilities incurred as a result of a transfer accounted for as a sale; and requires enhanced disclosure; among others. SFAS 166 becomes effective for the Company on January 1, 2010. Management does not currently expect SFAS 166 to have a material effect on the Company’s financial position, results of operations or cash flow.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R), (“SFAS 167”). SFAS 167 amends FIN 46(R), to require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; to add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. SFAS 167 becomes effective for the Company on January 1, 2010. Management does not currently expect SFAS 167 to have a material effect on the Company’s financial position, results of operations or cash flow.

 
14

 
STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162, (“SFAS 168”). SFAS 168 replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, and establishes the FASB Accounting Standards CodificationTM (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. The issuance of SFAS 168 and the Codification does not change GAAP. SFAS 168 becomes effective for the Company for the period ending September 30, 2009. Management has determined that the adoption of SFAS 168 will not have an effect on the Company’s financial position, results of operations or cash flow.

(13)  Segment Reporting

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments in financial statements.  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 president and chief executive officer.

The Company has two reportable segments: Electronics and Control Devices.  The Company’s operating segments are aggregated based on sharing similar economic characteristics.  Other aggregation factors include the nature of the products offered and management and oversight responsibilities.   The Electronics reportable segment produces electronic instrument clusters, electronic control units, driver information systems and electrical distribution systems, primarily wiring harnesses and connectors for electrical power and signal distribution.  The Control Devices reportable segment produces electronic and electromechanical switches and control actuation devices and sensors.

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 December 31, 2008 Form 10-K.  The Company’s management evaluates the performance of its reportable segments based primarily on net sales from external customers, capital expenditures and income (loss) before income taxes.  Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.

 
15

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

A summary of financial information by reportable segment is as follows:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
 
 
2009
   
2008
   
2009
   
2008
 
Net Sales                         
Electronics
  $ 65,894     $ 149,416     $ 148,665     $ 282,632  
Inter-segment sales
    1,939       4,004       3,797       7,747  
Electronics net sales
    67,833       153,420       152,462       290,379  
                                 
Control Devices
    36,396       63,813       74,710       133,667  
Inter-segment sales
    676       1,284       1,385       2,604  
Control Devices net sales
    37,072       65,097       76,095       136,271  
                                 
Eliminations
    (2,615 )     (5,288 )     (5,182 )     (10,351 )
Total consolidated net sales
  $ 102,290     $ 213,229     $ 223,375     $ 416,299  
                                 
Income (Loss) Before Income Taxes
                               
Electronics
  $ (8,954 )   $ 12,984     $ (11,160 )   $ 25,975  
Control Devices
    (5,408 )     (985 )     (12,428 )     1,091  
Other corporate activities
    301       1,739       1,316       3,646  
Corporate interest expense, net
    (5,506 )     (4,992 )     (10,983 )     (10,307 )
Total consolidated income (loss) before income taxes
  $ (19,567 )   $ 8,746     $ (33,255 )   $ 20,405  
                                 
Depreciation and Amortization
                               
Electronics
  $ 2,313     $ 3,406     $ 4,525     $ 6,922  
Control Devices
    2,829       3,672       5,618       7,501  
Corporate activities
    64       1       124       (5 )
Total consolidated depreciation and amortization(A)
  $ 5,206     $ 7,079     $ 10,267     $ 14,418  

(A)  These amounts represent depreciation and amortization on fixed and certain intangible assets.

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
 
 
2009
   
2008
   
2009
   
2008
 
Interest Expense (Income), net                                 
Electronics
  $ 33     $ (110 )   $ 54     $ (53 )
Control Devices
    (1 )     (2 )     (2 )     (2 )
Corporate activities
    5,506       4,992       10,983       10,307  
Total consolidated interest expense, net
  $ 5,538     $ 4,880     $ 11,035     $ 10,252  
                                 
Capital Expenditures
                               
Electronics
  $ 904     $ 2,973     $ 2,414     $ 4,744  
Control Devices
    1,741       3,238       3,676       6,932  
Corporate activities
    153       (83 )     653       (35 )
Total consolidated capital expenditures
  $ 2,798     $ 6,128     $ 6,743     $ 11,641  

 
16

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

   
June 30,
   
December 31,
 
 
 
2009
   
2008
 
Total Assets             
Electronics
  $ 158,187     $ 183,574  
Control Devices
    88,014       98,608  
Corporate(B)
    242,023       239,425  
Eliminations
    (146,395 )     (139,170 )
Total consolidated assets
  $ 341,829     $ 382,437  

(B)  Assets located at Corporate consist primarily of cash, deferred taxes and equity investments.

The following table presents net sales and non-current assets for each of the geographic areas in which the Company operates:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
 
 
2009
   
2008
   
2009
   
2008
 
Net Sales                         
North America
  $ 83,075     $ 156,101     $ 182,305     $ 303,299  
Europe and other
    19,215       57,128       41,070       113,000  
Total consolidated net sales
  $ 102,290     $ 213,229     $ 223,375     $ 416,299  

   
June 30,
   
December 31,
 
 
 
2009
   
2008
 
Non-Current Assets             
North America
  $ 105,398     $ 110,507  
Europe and other
    18,168       17,339  
Total consolidated non-current assets
  $ 123,566     $ 127,846  

(14)  Investments

PST Eletrônica S.A.

The Company has a 50% equity interest in PST Eletrônica S.A. (“PST”), a Brazilian electronic system provider focused on security and convenience applications primarily for the vehicle and motorcycle industry.  The investment is accounted for under the equity method of accounting. The Company’s investment in PST was $34,639 and $31,021 at June 30, 2009 and December 31, 2008, respectively.

Condensed financial information for PST is as follows:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Revenues
  $ 30,588     $ 46,446     $ 51,988     $ 90,392  
Cost of sales
  $ 15,947     $ 21,921     $ 26,998     $ 42,969  
                                 
Total pre-tax income
  $ 2,046     $ 7,036     $ 3,306     $ 15,799  
The Company's share of pre-tax income
  $ 1,023     $ 3,518     $ 1,653     $ 7,900  

 
17

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

Equity in earnings of PST included in the condensed consolidated statements of operations was $785 and $2,848 for the three months ended June 30, 2009 and 2008, respectively.  For the six months ended June 30, 2009 and 2008, equity in earnings of PST was $1,388 and $6,442, respectively.

Minda Stoneridge Instruments Ltd.

The Company has a 49% interest in Minda Stoneridge Instruments Ltd. (“Minda”), a company based in India that manufactures electronics and instrumentation equipment for the motorcycle and commercial vehicle market.  The investment is accounted for under the equity method of accounting.  The Company’s investment in Minda was $4,778 and $4,808 at June 30, 2009 and December 31, 2008, respectively.  Equity in earnings of Minda included in the condensed consolidated statements of operations were $118 and $168, for the three months ended June 30, 2009 and 2008, respectively.  For the six months ended June 30, 2009 and 2008, equity in earnings of Minda was $90 and $393, respectively.

(15)  Guarantor Financial Information

The senior notes and the credit facility are fully and unconditionally guaranteed, jointly and severally, by each of the Company’s existing and future domestic wholly owned subsidiaries (Guarantor Subsidiaries). The Company’s non-U.S. subsidiaries do not guarantee the senior notes (Non-Guarantor Subsidiaries).

Presented below are summarized consolidating financial statements of the Parent (which includes certain of the Company’s operating units), the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and the Company on a condensed consolidated basis, as of June 30, 2009 and December 31, 2008 and for each of the three and six months ended June 30, 2009 and 2008.

These summarized condensed consolidating financial statements are prepared under the equity method.  Separate financial statements for the Guarantor Subsidiaries are not presented based on management’s determination that they do not provide additional information that is material to investors.  Therefore, the Guarantor Subsidiaries are combined in the presentations on the subsequent pages.

 
18

 

STONERIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data, unless otherwise indicated)

   
June 30, 2009
 
   
Parent
   
Guarantor
Subsidiaries
   
Non-
Guarantor
Subsidiaries
   
Eliminations
   
Consolidated
 
                               
ASSETS
                             
                               
Current Assets:
                             
Cash and cash equivalents
  $ 45,938     $ 124     $ 39,419     $ -     $ 85,481  
Accounts receivable, net
    39,007       14,304       17,378       -       70,689  
Inventories, net
    21,745       8,620       13,318       -       43,683  
Prepaid expenses and other
    (302,030 )     299,437       19,046       -       16,453  
Deferred income taxes, net of valuation allowance
    -       -       1,957       -       1,957  
Total current assets
 
(195,340)
      322,485       91,118       -       218,263  
                                         
Long-Term Assets:
                                       
Property, plant and equipment, net
    45,854       22,494       11,939       -       80,287  
Other Assets:
                                       
Investments and other, net
    42,137       281       861       -       43,279  
Investment in subsidiaries
    390,439       -       -       (390,439 )     -  
Total long-term assets
    478,430       22,775       12,800       (390,439 )     123,566  
Total Assets
  $ 283,090     $ 345,260     $ 103,918     $ (390,439 )   $ 341,829  
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY
                                       
                                         
Current Liabilities:
                                       
Accounts payable
  $ 19,581     $ 11,292     $ 10,147     $ -     $ 41,020  
Accrued expenses and other
    6,168       9,873       22,999       -       39,040  
Total current liabilities
    25,749       21,165       33,146       -       80,060  
                                         
Long-Term Liabilities:
                                       
Long-term debt
    183,000       -       -       -       183,000  
Deferred income taxes
    4,828       -       551       -       5,379  
Other liabilities
    3,110       360       3,517       -       6,987  
Total long-term liabilities
    190,938       360       4,068       -       195,366  
                                         
Shareholders' Equity
    66,403       323,735