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The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes related thereto and other financial information included elsewhere herein.
−Removed: Global Market Conditions
−Removed: The coronavirus pandemic (“COVID-19”) and the ongoing supply chain disruptions, including the semiconductor shortages, have had a negative impact on the global economy since 2020.
−Removed: These conditions have disrupted, and likely will continue to disrupt, the global vehicle industry and customer sales, production volumes and purchases of automotive, commercial, off-highway and agricultural vehicles by end-consumers.
−Removed: The adverse impacts of the COVID-19 pandemic led to a significant vehicle production slowdown in the first half of 2020, which was followed by increased consumer demand and vehicle production schedules.
−Removed: This surge in demand led to a worldwide semiconductor supply shortage at the end of 2020, and other supply chain related constraints that have continued through 2022.
−Removed: We have experienced longer lead-times, higher costs, delays in procuring other component parts and raw materials and significant production volume reductions and volatility because of these shortages and continued impact of COVID-19.
−Removed: These supply chain disruptions became incrementally more challenging in the second half of 2021 resulting in higher related costs.
−Removed: Although the supply chain conditions have improved in 2022, we continued to experience production and supply chain volatility in several of our primary end-markets.
−Removed: In addition, rising COVID-19 infections in China and continued production volatility with our North American passenger car customers led to production reductions in 2022.
−Removed: Despite the continued challenges in 2022, we successfully negotiated appropriate, but significant price increases with our customers to offset material and labor cost headwinds.
−Removed: We are working closely with our suppliers and customers to minimize any potential adverse impacts, and we continue to closely monitor the availability of semiconductor microchips and other component parts and raw materials, customer vehicle production schedules and any other supply chain inefficiencies that may arise, due to this or any other issue.
−Removed: As these costs are expected to remain elevated in 2023, we will continue to work with our customers and implement supply chain and material cost reduction strategies to drive margin performance.
−Removed: The Company recognized $58.4 million and $17.6 million in 2022 and 2021, respectively, of cost recoveries related to spot buys of materials purchased for our customers.
−Removed: North American automotive vehicle volumes are expected to increase in 2022 due to a combination of higher demand and low inventory levels.
−Removed: Whereas North American and European commercial vehicle volumes are expected to slightly decline in 2022.
−Removed: Vehicle production volumes could continue to be negatively impacted by the ongoing supply chain disruptions, including semiconductor shortages.
−Removed: The magnitude of the adverse impact on our financial condition, results of operations and cash flows will depend on the evolution of the semiconductor supply shortage, vehicle production schedules and supply chain impacts.
We are organized by products produced and markets served.
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This segment includes results of operations from the production of driver information systems, vision and safety systems, connectivity and compliance products and electronic control units.
−Removed: Stoneridge Brazil (“SRB”).
+Added: Stoneridge Brazil.
This segment includes results of operations that design and manufacture vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions.
−Removed: The global macroeconomic environment in 2022 continued to provide a challenging backdrop for the global transportation industry and our served markets.
−Removed: The Company was able to navigate this volatile operating environment while at the same time continuing to execute on our long-term strategy of product development that aligns with industry megatrends, by focusing on product platforms that will drive future growth.
−Removed: The Company continues to work with our customers to preserve gross margin through price increases aligned with current market conditions and is executing on initiatives to reduce supply chain related costs.
−Removed: During 2022, the Company was able to mitigate a significant amount of the material headwinds we experienced, recognizing $32.1 million of negotiated price increases.
+Added: During 2023, we benefited from increased volumes in both our North American and European commercial vehicle markets, compared to the prior year, due to improvements in end market demand and launches of previously awarded programs including launches for our MirrorEye camera monitor system and our SE5000 Smart 2 tachograph.
+Added: We continued to benefit from both previously agreed pricing actions, as well as incremental actions taken within the year, with the majority of our customers, which offset a portion of the incremental material, supply chain and other input costs we incurred.
The Company had net loss of $5.2 million, or $(0.19) per diluted share, for the year ended December 31, 2023.
−Removed: Net income in 2022 decreased by $17.5 million, or $(0.64) per diluted share, from $3.4 million, or $0.12 per diluted share, for the year ended December 31, 2021 primarily due to the 2021 pre-tax gain on sale of the Canton Facility of $30.7 million, or $0.93 per diluted share, offset by lower restructuring and business realignment costs of $3.8 million as well as the impact of higher net sales and gross margin in our Electronics segment.
−Removed: In 2022, our net sales increased by $129.5 million, or 16.8%, while our operating income decreased $12.5 million.
−Removed: Our Control Devices segment net sales decreased by 3.7% primarily due to decreases in our China commercial, North American commercial and China automotive vehicle markets.
−Removed: Our European automotive and commercial vehicle markets decreased due to our exit of the PM sensor business.
−Removed: Segment gross margin decreased due to costs associated with supply chain disruptions offset by lower restructuring and business realignment costs of $1.5 million and favorable leverage of fixed costs from higher sales levels.
−Removed: Segment operating income decreased due to the 2021 gain on sale of the Canton Facility of $30.7 million, lower restructuring and realignment costs of $2.6 million and the 2021 gain on disposal of the PM sensor business of $1.1 million.
−Removed: Our Electronics segment net sales increased by 41.1% primarily due to higher sales volumes in our European commercial, North American commercial, European off-highway and North American off-highway vehicle markets as well as favorable customer pricing for recoveries of semiconductor spot buy purchases and negotiated price increases offset by unfavorable foreign exchange fluctuations .
−Removed: Segment gross margin as a percent of sales decreased primarily due to increased material costs associated with supply chain disruptions including spot purchases of electronic components, adverse foreign exchange fluctuations and inflation offset by increased contribution from higher sales levels and negotiated price increases.
−Removed: Segment operating income increased primarily due to higher sales and margin, lower SG&A spending and lower D&D cost from higher customer reimbursements.
−Removed: Our Stoneridge Brazil segment net sales decreased by 8.0% due to lower sales in most Stoneridge Brazil product lines offset by favorable foreign currency translation and slightly higher sales of tracking devices and monitoring services.
−Removed: Segment gross margin decreased due to lower sales levels compared with the prior year.
−Removed: Operating income increased primarily due to lower SG&A expense due to the unfavorable adjustment to the fair value of the Stoneridge Brazil earn-out consideration of $2.1 million in 2021 and lower selling costs offset by lower gross margin and net unfavorable adjustments for Brazilian indirect tax credits of $0.9 million.
−Removed: In 2022, SG&A expenses decreased compared to 2021 due to favorable non-recurring 2022 commercial and legal settlements, lower wages, incentive compensation, legal fees and selling costs.
−Removed: In addition, compared to 2021, SG&A was favorably impacted by an unfavorable adjustment to the fair value of the Stoneridge Brazil earn-out consideration in 2021, lower business realignment and restructuring costs and Sarasota environmental remediation costs incurred in 2021.
−Removed: Offsetting these favorable items were the 2021 gain on disposal of the MSIL joint venture, the 2021 gain on disposal of the PM Sensor business and unfavorable net adjustments for Brazilian indirect tax credits.
−Removed: D &D costs decreased slightly in 2022 as higher customer reimbursements in our Electronics segment for ongoing development activities were offset by increased spend for awarded business program launches and development of advanced technologies and systems in our Electronics, Control Devices and Stoneridge Brazil segments.
+Added: Net loss in 2023 decreased by $8.9 million, or $0.33 per diluted share, from $14.1 million, or $(0.52) per diluted share, for the year ended December 31, 2022 primarily due to additional contribution from higher sales levels, including the benefit of negotiated price increases and favorable foreign exchange fluctuations offset by higher Selling, General and Administrative (“SG&A”) and Design and Development (“D&D”) spending, including higher business realignment costs, and interest expense.
+Added: In 2023, our net sales increased by $75.9 million, or 8.4%, while our operating income increased $9.9 million.
+Added: Our Control Devices segment net sales decreased by 0.2% primarily due to a decrease in our North American automotive market, which was adversely impacted in the fourth quarter of 2023 by the UAW strike and a slower than expected penetration rate for electric vehicle platforms, as well as a decrease in our agricultural market.
+Added: These decreases were offset by negotiated price increases and an increase in our China commercial vehicle and automotive markets.
+Added: Segment gross margin as a percentage of sales decreased due to higher direct material costs from inflation and support costs for a troubled supplier.
+Added: Segment operating income decreased due to lower gross margin and higher SG&A and D&D spending.
+Added: Our Electronics segment net sales increased by 14.1% primarily due to higher sales volumes in our European and North American commercial vehicle markets, including the launches of a next generation tachograph product for OEM and aftermarket applications in Europe and our first OEM MirrorEye program in North America, and the impact of negotiated price increases offset by lower required electronic component spot buy purchases.
+Added: Segment gross margin as a percent of sales increased primarily due to higher contribution from higher sales levels, negotiated price increases, lower material costs including the favorable effect of foreign currency and lower required electronic component spot buy purchases offset by an increase in labor and overhead costs.
+Added: Operating income for the segment increased primarily due to higher gross margin partially offset by higher SG&A and D&D spending, including support for new product launches and business realignment expense of $2.9 million focused on centralizing critical functions in order to effectively utilize global resources.
+Added: Our Stoneridge Brazil segment net sales increased by 9.5% due to favorable foreign currency translation and higher sales of our OEM products offset by lower sales demand for our other product lines.
+Added: Segment gross margin increased due to increased contribution margin from higher sales and favorable foreign currency fluctuations.
+Added: Operating income increased due to higher gross margin offset by an increase in SG&A spending.
+Added: In 2023, SG&A expenses increased compared to 2022 due to higher business realignment costs of $3.0 million, higher incentive compensation due to the achievement of performance targets, consulting and professional service fees and travel related costs.
+Added: D &D costs increased in 2023 due to lower customer reimbursements as a result of a shift to platform development and higher costs related to product launch preparations offset by increased capitalized software development costs.
At December 31, 2023 and 2022, we had cash and cash equivalents of $40.8 million and $54.8 million, respectively.
At December 31, 2023 and 2022 , we had $189.3 million and $167.8 million , respectively, in borrowings outstanding on the Credit Facility.
−Removed: The 2022 decrease in cash and cash equivalents was due to capital expenditures for new product launches and to support higher working capital levels, mostly inventory as a result of supply chain disruptions, new product launches and expectations for increased production and new product launches.
−Removed: The Company believes that focusing on products that address industry megatrends will have a positive effect on both our top-line growth and underlying margins.
−Removed: For example, the Company is aligned with platforms likely to perform well against overall market dynamics including our content on electrified vehicle platforms.
−Removed: Beginning in the first quarter of 2020, COVID-19 caused worldwide adverse economic conditions and uncertainty in our served markets.
−Removed: Since the first quarter of 2021, we have been experiencing supply chain related disruptions, due to a worldwide semiconductor shortage, as well as other material availability constraints, which continue and have resulted in longer lead-times, higher costs and delays in procuring other component parts and raw materials.
−Removed: Although material cost challenges are moderating, the Company expects to experience ongoing impacts from supply chain disruptions, material cost inflation and COVID-19, which will continue to put pressure on margins.
−Removed: In order to recover these higher costs, we have negotiated and expect to continue to negotiate price increases and cost recoveries with our customers and implement supply chain strategies to help mitigate future costs.
−Removed: During the second half of 2022, we began to see the impacts of improving material availability on net sales, which favorably impacted gross margin.
−Removed: Based on IHS Market production forecast, the North American automotive market is expected to increase to 15.1 million units in 2023 from 14.3 million units in 2022 as this market continues to recover from supply chain disruptions and economic
−Removed: The Company expects sales volumes in our Control Devices segment to increase from 2022 based on year end production forecasts and market conditions as well as the ramp-up of actuation program launches.
−Removed: We will continue to focus on growing our core product portfolio aligned with powertrain electrification.
−Removed: We will continue to invest in our actuation business as we anticipate greater opportunities as powertrains become increasingly electrified.
−Removed: However, on-going global supply chain disruptions, including the global semiconductor supply shortage, material cost inflation and COVID-19 could adversely impact our sales volumes and gross margin for the remainder of 2023.
−Removed: For 2023, we expect an increase in our Electronics’ segment sales compared to 2022 primarily due to strong demand for our products in our off-highway and commercial vehicle end markets and the ramp-up of new product launches even though production volumes in our European and North American commercial markets are expected decrease approximately 2.0% to 3.5%.
−Removed: In addition, we expect increased sales from the continued roll out of our MirrorEye camera-based vision system in the retrofit markets and additional launches of our MirrorEye systems for OEM applications.
−Removed: MirrorEye OEM system take-rates continue to exceed prior expectations and customer production forecasts suggest these take-rates could continue to rise significantly as material becomes more readily available and customer truck production continues to shift to new models.
−Removed: Customer recoveries related to spot buys of materials purchased for our customers increased net sales by $58.4 million during 2022.
−Removed: Spot buy material purchasing activity, which is recognized as revenue and material costs, was mostly passed through to the customer and was driven by electronic component shortages.
−Removed: The Company expects spot buy activity to continue in 2023 but cannot predict the duration or magnitude of continued spot buy activity due to volatile supply chains and component availability.
−Removed: We expect to continue to offset a significant majority of spot buy related costs going forward and expect continued reduction in overall spot buy costs in 2023.
−Removed: In addition, we expect customer negotiated price increases to favorably impact sales in 2023.
−Removed: In 2021 and continuing throughout 2022, our gross D&D spend increased to support near term launches of awarded business in both our Electronics and Control Devices segments.
−Removed: In 2023, we expect that our D&D spending will stabilize as we continue to align our global engineering capabilities in order to develop advanced technologies and systems within our portfolio of products and we expect to sustain current levels of customer reimbursement to support specific programs and products.
−Removed: Our 2022 Stoneridge Brazil segment revenues decreased compared to the prior year due to lower sales of most of our product lines offset by favorable foreign currency translation and slightly higher sales of tracking devices and monitoring service fees.
−Removed: In October 2022, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.8% in 2022 and 1.0% in 2023.
−Removed: We expect our served market channels to remain stable based on current market conditions.
+Added: The 2023 decrease in cash and cash equivalents was due to capital expenditures for new product launches and relatively higher working capital levels to support higher sales and production levels as well as the residual impact of supply chain issues on inventory.
+Added: The Company believes that focusing on products that address industry megatrends has had and will continue to have a positive effect on both our top-line growth and underlying margins.
+Added: For example, the Company is aligned with platforms likely to perform well against overall market dynamics including light-trucks, SUVs and crossover vehicles and our continued focus on safety, vehicle intelligence and connectivity based products, such as the recent release of our next generation tachograph in Europe as well as current and future launches of our MirrorEye programs in North America and Europe for both OEM and aftermarket applications.
+Added: Global inflation has increased significantly since 2021.
+Added: Rising costs of materials, labor and other inputs used to manufacture and sell our products, have impacted, and may continue to impact, our results.
+Added: While incremental material and production costs have started to moderate, we expect continued cost inflation to persist into 2024 which will continue to put pressure on margins.
+Added: In order to minimize the impact of these incremental costs, we have taken several actions, including negotiating price increases and cost recoveries with our customers.
+Added: Additionally, we continued to focus on improving manufacturing performance and optimizing our global cost structure to both reduce costs and improve operational efficiency.
+Added: We expect these actions will benefit our future financial performance.
+Added: Based on IHS Market production forecasts, the North American automotive market is expected to increase from 15.6 million units in 2023 to 15.8 million units in 2024 as this market continues to recover from the effects of prior supply chain disruptions, the impact of the UAW strike in the fourth quarter of 2024 and economic headwinds.
+Added: In our Control Devices segment, we expect lower than previously anticipated growth rates for sales of products used in electric vehicle platforms due to reduced production expectations with some of our key customers.
+Added: We continue to focus on improved manufacturing execution, supply chain strategy, material cost improvement actions and enterprise-wide cost improvement plans and will continue to react to changes in our end-markets as needed to maintain and improve our margins.
+Added: During 2023, our Control Devices segment incurred $2.5 million of support costs for a troubled supplier.
+Added: We expect these costs to moderate in the first half of 2024.
+Added: We will continue to focus on growing our core product portfolio aligned with industry megatrends by investing in our actuation and system-level sensor products as we anticipate greater opportunities as powertrains become increasingly electrified and efficient.
+Added: In 2024, our European and North American commercial vehicle end market volumes are forecasted to decrease 10.5% and 7.6%, respectively.
+Added: We expect our Electronics’ segment sales to outperform forecasted changes in production volumes due to strong demand for our existing products and the ramp-up of recently launched programs, including our next generation tachograph product in Europe for both OEM and aftermarket applications and our first North American OEM MirrorEye program, as well as expected program launches, including our next OEM MirrorEye program launch in Europe in 2024.
+Added: Recovery from customers related to spot buys of materials purchased by the Company on behalf of those customers increased net sales by $14.6 million and $58.4 million for 2023 and 2022, respectively.
+Added: Spot buy material purchasing activity, which is recognized as revenue and material costs, was mostly passed through to customers and was driven by electronic component shortages.
+Added: The Company expects spot buy activity to continue to decline as supply chains normalize and material availability improves.
+Added: In 2024, we expect net D&D spend to increase primarily driven by spend for the development of next generation products as new product launch related spend decreases in the second half of 2024.
+Added: As a result of reduced launch activities we expect lower customer reimbursements and capitalization of software development costs.
+Added: We continue to evaluate and optimize our engineering footprint to enhance capabilities and capacity for the most efficient return on our engineering spend.
+Added: In January 2024, the International Monetary Fund forecasted the Brazil gross domestic product to grow 1.7 % in 2024.
+Added: We expect our served market channels to remain relatively stable in 2024 based on current market conditions.
Stoneridge Brazil will focus on continuing to grow our OEM capabilities in-region to better support our global customers.
−Removed: This will drive steady future growth and provide a platform to continue to rotate our local portfolio to more closely align with our global business.
−Removed: Our financial performance in our Stoneridge Brazil segment is also subject to uncertainty from movements in the Brazilian Real and Argentina Peso foreign currencies.
−Removed: Beginning in 2021, global transportation vehicle production was impacted by supply chain disruptions, including semiconductor shortages, primarily affecting our commercial vehicle and automotive end-markets.
−Removed: Based on the current market conditions, we expect continued but moderating impacts on production in 2023.
−Removed: We expect incremental costs related to supply chain disruptions and production schedule volatility to continue to adversely affect our gross margin in 2023.
−Removed: We continued to effectively offset a significant portion of incremental material and supply chain related costs through pricing and supply chain actions resulting in cost pass-throughs and the recovery of both current and historical costs in 2022.
−Removed: While incremental material costs have started to moderate, we expect material cost inflation to persist into 2023.
−Removed: We will continue to evaluate macroeconomic conditions and expect ongoing discussions with our customers regarding price increases and other cost recovery actions to help continue to improve our margin performance.
−Removed: As a result of these supply chain disruptions and production schedule volatility, our working capital balances, specifically inventory, have increased significantly compared to historical levels.
−Removed: In addition, inventory has also increased from product launches in our Electronics and Control Devices segments.
−Removed: We continue to engage in initiatives to reduce working capital including reducing on-hand inventory by refining our procurement process and managing the on-time collection of our accounts receivable balances.
+Added: This focus will provide opportunities for future growth and provide a platform to continue to rotate our local portfolio to more closely align with our global business.
+Added: We remain focused on improving cash generation and the reduction of debt through efficient operating performance and targeted actions to reduce net working capital, particularly our inventory levels, as the impacts from product launches and material availability normalizes.
+Added: We expect higher interest expense in 2024 driven by higher outstanding balances on our Credit Facility.
Our future effective tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles and our jurisdictional mix of earnings.
−Removed: We monitor these factors and adjust our effective tax rate accordingly.
+Added: We monitor these factors and the impact on our effective tax rate.
Other Matters
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dollars and, therefore, movements in foreign currency exchange rates can also have a significant effect on our results of operations.
−Removed: Dollar strengthened against the euro, Swedish krona
−Removed: and Argentine peso in 2022 and the euro, Swedish krona, Brazilian real, Argentine peso and Mexican peso in 2021, unfavorably impacting our reported results.
+Added: Dollar strengthened against the Chinese yuan and Argentine peso in 2023 and the euro, Swedish krona, Chinese yuan and Argentine peso in 2022, unfavorably impacting our reported results.
On November 2, 2021, the Company entered into a Share Purchase Agreement (the “SPA”) with Minda Corporation Limited (“Minda”), as the buyer, and MSIL.
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Non-cash charges included impairment and accelerated depreciation of fixed assets associated with PM sensor production.
−Removed: We recognized $0.0 million and $2.4 million of expense as a result of this initiative during the years ended December 31, 2022 and 2021, respectively.
−Removed: The only remaining costs relate to potential commercial settlements and legal fees that we continue to negotiate.
−Removed: The estimated additional cost related to these settlements and fees is up to $4.2 million.
−Removed: In January 2019, we committed to a restructuring plan that resulted in the closure of our Canton, Massachusetts facility (“Canton Facility”) as of March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”).
−Removed: The costs for the Canton Restructuring included employee severance and termination costs, contract termination 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.
−Removed: We recognized expense as a result of these actions during the years ended December 31, 2022 and 2021 of $0.0 million and less than $0.1 million, respectively.
−Removed: We do not expect to incur additional costs related to the Canton Restructuring.
−Removed: During the third quarter of 2020, we leased the Canton Facility to a third party.
−Removed: On June 17, 2021, we sold the Canton Facility for net proceeds of $35.2 million and a net gain of $30.7 million.
−Removed: On April 1, 2019, the Company entered into an Asset Purchase Agreement by and among the Company, the Company’s wholly owned subsidiary, Stoneridge Control Devices, Inc.
−Removed: (“SCD”), and Standard Motor Products, Inc.
−Removed: On the same day pursuant to the APA, in exchange for $40.0 million (subject to a post-closing inventory adjustment which was a payment to SMP of $1.6 million) and the assumption of certain liabilities, the Company and SCD sold to SMP product lines and assets related to certain non-core switches and connectors (the “Non-core Products”).
−Removed: On April 1, 2019, 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 provided and was compensated for certain manufacturing, transitional, administrative and support services to SMP on a short-term basis.
−Removed: 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.
−Removed: On April 1, 2019, the Company’s Control Devices segment recognized net sales and costs of goods sold of $4.2 million and $2.8 million, respectively, for the one-time sale of finished goods inventory and a gain on disposal of $33.9 million for the sale of fixed assets, intellectual property and customer lists associated with the Non-core Products less transaction costs.
−Removed: On June 17, 2020, the Company and SMP terminated the transition services agreement and the contract manufacturing agreement.
−Removed: In the fourth quarter of 2018, the Company undertook restructuring actions for the Electronics segment affecting the European Aftermarket business and China operations.
−Removed: In the second quarter of 2020, the Company finalized plans to move its European Aftermarket sales activities in Dundee, Scotland to a new location, which resulted in incurring contract termination costs as well as employee severance and termination costs.
−Removed: In addition, the Company announced an additional restructuring program to transfer the European production of its Controls product line to China.
−Removed: For the years ended December 31, 2022 and 2021, we recognized expense of $0.0 million and $0.3 million, respectively, as a result of these actions for related costs.
−Removed: The Company does not expect to incur additional restructuring costs related to the Electronics segment.
−Removed: On October 26, 2018, the Company announced a Board of Directors approved share repurchase program authorizing Stoneridge to repurchase up to $50.0 million of our Common Shares.
−Removed: Thereafter, on May 7, 2019, we announced that the Company had entered into an accelerated share repurchase agreement with Citibank N.A.
−Removed: to repurchase an aggregate of $50.0 million of our Common Shares.
−Removed: Pursuant to the accelerated share repurchase agreement we made an upfront payment of $50.0 million and received an initial delivery of 1,349,528 Common Shares which became treasury shares.
−Removed: On February 25, 2020, Citibank N.A.
−Removed: terminated early its commitment pursuant to the accelerated share repurchase agreement and delivered to the Company, 364,604 Common Shares representing the final settlement of the Company’s repurchase program which became treasury shares.
−Removed: On February 24, 2020, the Board of Directors authorized a new repurchase program of $50.0 million for the repurchase of our Common Shares over an 18 month period.
−Removed: The repurchases could be made from time to time in either open market transactions or in privately negotiated transactions.
−Removed: Repurchases could also have been made under rule 10b-18, which permit Common Shares to be repurchased through pre-determined criteria.
−Removed: The timing, volume and nature of common share repurchases was at the discretion of management, dependent on market conditions, other priorities of cash investment, applicable securities laws and other factors.
−Removed: This Common Share repurchase program authorization did not obligate the Company to acquire any particular amount of its Common Shares, and could have been suspended or discontinued at any time.
−Removed: For the quarter ended March 31, 2020, under this repurchase program, the Company repurchased 242,634 Common Shares for $5.0 million, which became treasury shares, in accordance with this repurchase program authorization.
−Removed: In April 2020, the Company announced that it was temporarily suspending the previously announced share repurchase program in response to uncertainty surrounding the duration and magnitude of the impact of COVID-19.
−Removed: This repurchase program authorization expired during the third quarter of 2021 and no additional shares were repurchased.
+Added: We recognized $2.4 million of expense as a result of this initiative during the year ended December 31, 2021.
+Added: In December 2018, the Company entered into an agreement to make a $10.0 million investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology.
+Added: The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten year life of the fund.
+Added: The Company has contributed $8.4 million to the Autotech Fund II since December 2018.
We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto in order to optimize our results.
2 unchanged sentences
Business realignment costs of $4.5 million and $0.3 million were incurred during the years ended December 31, 2023 and 2022, respectively.
+Added: Realignment expense for the year ended December 31, 2023 was primarily related to the centralization of the product line management, sales and engineering funct ions and executive separation costs.
Because of the competitive nature of the markets we serve, we face pricing pressures from our customers in the ordinary course of business.
8 unchanged sentences
Selling, general and administrative 117,395 12.0 106,695 11.9 10,700
+Added: Design and development 71,075 7.3 65,296 7.3 5,779
+Added: Operating income 12,836 1.3 2,935 0.3 9,901
+Added: Interest expense, net 13,000 1.3 7,097 0.8 5,903
+Added: Equity in loss of investee 522 0.1 823 0.1 (301)
+Added: Other expense, net 1,236 0.1 5,711 0.6 (4,475)
+Added: Loss before income taxes (1,922) (0.2) (10,696) (1.2) 8,774
+Added: Provision for income taxes 3,261 0.3 3,360 0.4 (99)
+Added: Net loss $ (5,183) (0.5) % $ (14,056) (1.6) % $ 8,873
+Added: Net sales for our reportable segments, excluding inter-segment sales are summarized in the following table (in thousands):
+Added: Year ended December 31, 2023 2022 Dollar
+Added: (decrease) Percent
+Added: Control Devices $ 342,065 35.1 % $ 342,596 38.1 % $ (531) (0.2) %
+Added: Electronics 576,539 59.0 505,097 56.1 71,442 14.1 %
+Added: Stoneridge Brazil 57,214 5.9 52,230 5.8 4,984 9.5 %
+Added: Total net sales $ 975,818 100.0 % $ 899,923 100.0 % $ 75,895 8.4 %
+Added: Our Control Devices segment net sales decreased $0.5 million due to a decrease in our North American automotive market of $6.3 million, including the adverse impact of the UAW strike in the fourth quarter of 2023 and a slower than expected penetration rate for electric vehicle platforms, as well as a decrease in our agricultural market of $1.1 million.
+Added: These decreases were offset by increases in our China commercial vehicle and automotive markets of $2.6 million and $2.2 million, respectively.
+Added: In addition, net sales for the year ended December 31, 2023 were impacted by negotiated price increases of $5.4 million offset by an increase in unfavorable foreign currency translation of $2.5 million.
+Added: Our Electronics segment net sales increased $71.4 million due to higher sales volumes in our European and North American commercial vehicle markets of $55.2 million and $52.4 million, respectively, including the launches of a next generation tachograph product in Europe for both OEM and aftermarket applications and our first OEM MirrorEye program in North America, and the impact of negotiated price increases of $7.5 million.
+Added: These increases were offset by the impact of lower required electronic component spot buy purchases of $40.8 million compared to 2022.
+Added: In addition, we experienced lower sales volumes in North American off-highway vehicle market of $3.5 million and unfavorable foreign currency translation of $3.2 million, mostly from euro and Swedish krona, compared to the prior year.
+Added: Our Stoneridge Brazil segment net sales increased $5.0 million due to higher sales in our OEM product line and favorable foreign currency translation offset by lower sales demand for our other product lines .
+Added: Net sales by geographic location are summarized in the following table (in thousands):
+Added: Year ended December 31, 2023 2022 Dollar
+Added: (decrease) Percent
+Added: North America $ 495,541 50.8 % $ 444,928 49.4 % $ 50,613 11.4 %
+Added: South America 57,214 5.9 52,230 5.8 4,984 9.5 %
+Added: Europe and Other 423,063 43.3 402,765 44.8 20,298 5.0 %
+Added: Total net sales $ 975,818 100.0 % $ 899,923 100.0 % $ 75,895 8.4 %
+Added: The increase in North American net sales was attributable to increased sales volume in our commercial vehicle market of $51.5 million and by negotiated price increases of $10.7 million.
+Added: These increases were offset by lower sales volume in our North American automotive, off-highway and agricultural markets.
+Added: The increase in net sales in South America was primarily due to higher sales in our OEM product line and favorable foreign currency translation offset by lower sales demand for our other product lines .
+Added: The increase in net sales in Europe and Other was due to increases in our European and China commercial vehicle markets of $55.2 million and $4.5 million, respectively, China automotive of $2.2 million and negotiated price increases o f $2.2 million.
+Added: These increases were offset by lower required customer recoveries of electronic component spot buys of $39.7 million.
+Added: In addition, we experienced unfavorable foreign currency translation of $5.7 million.
+Added: Cost of Goods Sold and Gross Margin.
+Added: Cost of goods sold increased compared to 2022 and our gross margin increased to 20.6% in 2023 compared to 19.4% in 2022.
+Added: Our material cost as a percentage of net sales de creased by 2.4% t o 59.4% in 2023 compared to 61.8% in 2022.
+Added: The decrease in the material cost percentage was partially due to the impact of required electronic component spot buy purchases that were offset by customer recoveries.
+Added: The impact of these spot buy purchases increased cost of goods sold by $14.6 million, or 1.5% of net sales, and $58.4 million, or 6.5% of sales, during 2023 and 2022, respectively, which reduced gross margin percent by 0.3 % and 1.4% in 2023 and 2022, respectively.
+Added: Other factors reducing the material cost percentage were favorable foreign currency fluctuations and favorable sales mix in our Electronics segment.
+Added: Overhead as a percentage of net sales was 15.1% and 14.2% for 2023 and 2022, respectively.
+Added: The increase in overhead as a percentage of sales was attributable to higher indirect wage inflation and warranty costs which offset favorable fixed cost leverage from higher sales levels.
+Added: Our Control Devices segment gross margin decreased primarily due to higher direct material costs associated with inflation and financial support for a troubled supplier as well as unfavorable sales mix.
+Added: Our Electronics segment gross margin increased due to the contribution from higher sales levels, including negotiated price increases, and the reduction of the adverse effect of required electronic component spot buy purchases, net of customer recoveries, offset by higher labor and overhead costs including wages and warranty expense.
+Added: Our Stoneridge Brazil segment gross margin increased primarily due to increased contribution from higher sales and favorable foreign currency fluctuations.
+Added: Selling, General and Administrative.
+Added: SG&A expenses increased by $10.7 million compared to 2022 due to higher business realignment costs of $3.0 million, higher incentive compensation due to achievement of performance targets, consulting and professional service fees and travel related costs.
+Added: In addition, our Control Devices segment recognized 2022 favorable legal settlements offset by a 2023 gain on the sale of fixed assets of an idled sensor production line.
+Added: Design and Development.
+Added: D&D costs increased by $5.8 million due to lower customer reimbursements and higher costs related to product launch preparations offset by increases in capitalized software development costs for our Electronics segment.
+Added: All other segments also incurred slightly higher spending attributable to product launch activities.
+Added: Operating Income.
+Added: Operating income (loss) is summarized in the following table by reportable segment (in thousands):
+Added: Year ended December 31, 2023 2022 Dollar
+Added: (decrease) Percent
+Added: Control Devices $ 13,582 $ 23,917 $ (10,335) (43.2) %
+Added: Electronics 27,309 5,128 22,181 432.5 %
+Added: Stoneridge Brazil 4,454 3,150 1,304 41.4 %
+Added: Unallocated corporate (32,509) (29,260) (3,249) (11.1) %
+Added: Operating income $ 12,836 $ 2,935 $ 9,901 337.3 %
+Added: Our Control Devices segment operating income decreased due to lower gross margin primarily resulting from higher material costs associated with inflation and troubled supplier support costs , unfavorable sales mix and a 2022 favorable legal settlement offset by a 2023 gain on disposal of fixed assets.
+Added: Our Electronics segment operating income increased primarily due to higher contribution from higher sales and negotiated pricing and favorable foreign exchange fluctuations offset by higher labor and overhead costs as well as higher SG&A and D&D spending including business realignment costs.
+Added: Our Stoneridge Brazil segment operating income increased due to contribution from higher sales levels offset by higher SG&A and D&D spending.
+Added: Our unallocated corporate operating loss increased primarily from higher service related costs, business realignment costs associated with employee separation related costs of $0.9 million and higher incentive compensation due to achievement of performance targets.
+Added: Operating income (loss) by geographic location is summarized in the following table (in thousands):
+Added: Year ended December 31, 2023 2022 Dollar
+Added: (decrease) Percent
+Added: North America $ (13,566) $ (2,066) $ (11,500) 556.6 %
+Added: South America 4,454 3,150 1,304 41.4 %
+Added: Europe and Other 21,948 1,851 20,097 1085.7 %
+Added: Operating income $ 12,836 $ 2,935 $ 9,901 337.3 %
+Added: Our North American operating loss increased due to higher material and labor costs, higher business realignment, higher incentive compensation and a 2022 favorable legal settlement offset by a 2023 gain on disposal of fixed assets.
+Added: Operating income in South America increased due to higher sales levels offset by higher SG&A and D&D spending.
+Added: Our operating results in Europe and Other increased primarily due to contribution from higher sales levels offset by higher D&D expense.
+Added: Interest Expense, net.
+Added: Interest expense, net increased by $5.9 million compared to 2022 due to both higher interest rates and outstanding balances for our Credit Facility in addition to the write-off of $0.3 million of deferred financing fees as a result of entering into the Fifth Amended and Restated Credit Agreement.
+Added: Equity in Loss of Investee.
+Added: Equity losses for Autotech Fund II were $0.5 million and $0.8 million for the years ended December 31, 2023 and 2022 .
+Added: The decrease in Autotech Fund II earnings was due to unfavorable 2023 and 2022 fair value adjustments to fund investments and fund expenses.
+Added: Other Expense, net .
+Added: We record certain foreign currency transaction losses (gains) as a component of other expense, net on the consolidated statement of operations.
+Added: Other expense, net of $1.2 million, decreased by $4.5 million in 2023 compared to other expense, net of $5.7 million for 2022 primarily due to the impact of favorable foreign currency movements in our Electronics and Control Devices segments from moderated strengthening of the U.S.
+Added: Provision for Income Taxes.
+Added: In 2023, the provision for income tax expense was $3.3 million, resulting in an effective tax rate of (169.7)%.
+Added: In 2022, the provision for income tax expense was $3.4 million, resulting in an effective tax rate of (31.4)%.
+Added: In 2023 and 2022, the provision for income taxes was impacted by jurisdictional earnings mix, U.S.
+Added: taxes on foreign earnings, various tax credits and incentives and tax losses for which no benefit is recognized due to valuation allowances.
+Added: The OECD implemented a 15% global corporate minimum tax to ensure that large multinational enterprises pay a minimum level of tax in the countries they operate.
+Added: While various countries have implemented the legislation as of January 1, 2024, we do not expect a material change to our income tax provision for the year ended December 31, 2024.
+Added: As additional jurisdictions implement this legislation, our effective tax rate and cash tax payments could increase in future years.
+Added: Year Ended December 31, 2022 Compared To Year Ended December 31, 2021
+Added: Consolidated statements of operations as a percentage of net sales are presented in the following table (in thousands):
+Added: Year ended December 31, 2022 2021 Dollar
+Added: Net sales $ 899,923 100.0 % $ 770,462 100.0 % $ 129,461
+Added: Costs and expenses:
+Added: Cost of goods sold 724,997 80.6 603,604 78.3 121,393
+Added: Selling, general and administrative 106,695 11.9 116,000 15.1 (9,305)
Gain on sale of Canton Facility, net — — (30,718) (4.0) 30,718
9 unchanged sentences
Year ended December 31, 2022 2021 Dollar
−Removed: increase / (decrease) Percent
−Removed: increase / (decrease)
+Added: (decrease) Percent
Control Devices $ 342,596 38.1 % $ 355,775 46.2 % $ (13,179) (3.7) %
12 unchanged sentences
Year ended December 31, 2022 2021 Dollar
−Removed: increase / (decrease) Percent
−Removed: increase / (decrease)
+Added: (decrease) Percent
North America $ 444,928 49.4 % $ 386,944 50.2 % $ 57,984 15.0 %
8 unchanged sentences
In addition, Europe and Other net sales decreased $31.1 million due to unfavorable foreign currency translation.
−Removed: Cost of Goods Sold and Gross Margin.
+Added: Cost of Goods Sold and Gross Marg in.
Cost of goods sold increased compared to 2021 and our gross margin decreased to 19.4% in 2022 compared to 21.7% in 2021.
7 unchanged sentences
Our Stoneridge Brazil segment gross margin as a percentage of sales was consistent with the prior year as adverse leverage of fixed costs from lower product sales was offset by favorable sales mix from a greater percentage of monitoring service fees.
−Removed: Selling, General and Administrative (“SG&A”).
+Added: Selling, General and Administrative .
SG&A expenses decreased by $9.3 million compared to 2021 due to favorable non-recurring 2022 commercial and legal settlements, lower wages, incentive compensation, legal fees and selling costs.
1 unchanged sentence
Offsetting these favorable items were the 2021 gain on disposal of the MSIL joint venture, the 2021 gain on disposal of the PM Sensor business and unfavorable net adjustments for Brazilian indirect tax credits.
−Removed: Design and Development (“D&D”).
+Added: Design and Development.
D&D costs decreased by $0.9 million due to higher customer reimbursements for ongoing development activities in our Electronics segment of $8.3 million that were offset by increased spend for awarded business program launches and development of advanced technologies and systems in our Electronics, Control Devices and Stoneridge Brazil segments.
21 unchanged sentences
and higher material costs from supply chain disruptions.
−Removed: these gains were increased contribution from higher sales levels and 2022 non-recurring commercial and legal settlements.
+Added: Offsetting these gains were increased contribution from higher sales levels and 2022 non-recurring commercial and legal settlements.
The increase in operating income in South America was primarily due to an unfavorable change in fair value of earn-out consideration adjustments of $2.1 million in 2021 and lower selling costs offset by lower contribution from lower sales levels and an unfavorable net adjustments for Brazilian indirect tax credits.
4 unchanged sentences
Equity in Loss (Earnings) of Investee.
−Removed: Equity loss (earnings) for Autotech were $0.8 million and $(1.9) million for the years ended December 31, 2022 and 2021 .
−Removed: The decrease in Autotech earnings was due to unfavorable 2022 fair value adjustments to fund investments.
+Added: Equity loss (earnings) for Autotech Fund II were $0.8 million and $(1.9) million for the years ended December 31, 2022 and 2021.
+Added: The decrease in Autotech Fund II earnings was due to unfavorable 2022 fair value adjustments to fund investments.
Equity earnings for MSIL were $1.8 million for the year ended December 31, 2021.
10 unchanged sentences
The effective tax rate of 72.6% was greater than the statutory tax rate primarily due to the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions, the tax impact of the sale of the Company’s minority interest in MSIL, partially offset by tax incentives.
−Removed: Year Ended December 31, 2021 Compared To Year Ended December 31, 2020
−Removed: Consolidated statements of operations as a percentage of net sales are presented in the following table (in thousands):
−Removed: Year ended December 31, 2021 2020 Dollar
−Removed: Net sales $ 770,462 100.0 % $ 648,006 100.0 % $ 122,456
−Removed: Costs and expenses:
−Removed: Cost of goods sold 603,604 78.3 493,810 76.2 109,794
−Removed: Selling, general and administrative 116,000 15.1 112,474 17.4 3,526
−Removed: Gain on sale of Canton Facility, net (30,718) (4.0) — — (30,718)
−Removed: Design and development 66,165 8.6 49,386 7.6 16,779
−Removed: Operating income (loss) 15,411 2.0 (7,664) (1.2) 23,075
−Removed: Interest expense, net 5,189 0.7 6,124 0.9 (935)
−Removed: Equity in earnings of investee (3,658) (0.5) (1,536) (0.2) (2,122)
−Removed: Other expense (income), net 1,444 0.3 (1,528) (0.2) 2,972
−Removed: Income (loss) before income taxes 12,436 1.5 (10,724) (1.7) 23,160
−Removed: Provision (benefit) for income taxes 9,030 1.2 (2,774) (0.4) 11,804
−Removed: Net income (loss) $ 3,406 0.3 % $ (7,950) (1.3) % $ 11,356
−Removed: Net sales for our reportable segments, excluding inter-segment sales are summarized in the following table (in thousands):
−Removed: Year ended December 31, 2021 2020 Dollar
−Removed: increase / (decrease) Percent
−Removed: increase /(decrease)
−Removed: Control Devices $ 355,775 46.1 % $ 342,576 52.9 % $ 13,199 3.9 %
−Removed: Electronics 357,910 46.5 257,767 39.7 100,143 38.9 %
−Removed: Stoneridge Brazil 56,777 7.4 47,663 7.4 9,114 19.1 %
−Removed: Total net sales $ 770,462 100.0 % $ 648,006 100.0 % $ 122,456 18.9 %
−Removed: Our Control Devices segment net sales increased $13.2 million due to recovery from 2020 COVID-19 impacts in our North American automotive and agricultural vehicle markets of $23.4 million and $2.7 million, respectively, and an increase in our China automotive and commercial vehicle markets of $3.8 million and $0.4 million, respectively, as well as a favorable foreign currency translation of $3.2 million.
−Removed: These increases were partially offset by a decrease in volumes in our European automotive market of $16.7 million due to the exit of PM sensor production and a decrease in volumes in our North American commercial vehicle market of $4.3 million.
−Removed: Our Electronics segment net sales increased $100.1 million due to recovery from 2020 COVID-19 impacts in our North American and European commercial vehicle and European and North American off-highway vehicle markets of $28.7 million, $28.4 million, $14.4 million and $5.3 million, respectively, as well as favorable euro and Swedish krona foreign currency translation of $5.0 million compared to the prior year period.
−Removed: In the fourth quarter, net sales increased by $17.6 million due to customer pricing for recoveries of electronic component spot buy purchases.
−Removed: Our Stoneridge Brazil segment net sales increased $9.1 million due to higher volumes for all of our product lines and for our Argentina market channel offset by unfavorable foreign currency translation of $3.0 million.
−Removed: Net sales by geographic location are summarized in the following table (in thousands):
−Removed: Year ended December 31, 2021 2020 Dollar
−Removed: increase Percent increase
−Removed: North America $ 386,944 50.2 % $ 330,528 51.0 % $ 56,416 17.1 %
−Removed: South America 56,777 7.4 47,663 7.4 9,114 19.1 %
−Removed: Europe and Other 326,741 42.4 269,815 41.6 56,926 21.1 %
−Removed: Total net sales $ 770,462 100.0 % $ 648,006 100.0 % $ 122,456 18.9 %
−Removed: The increase in North American net sales was attributable to sales volume increases in our North American commercial vehicle, automotive and off-highway markets of $24.5 million, $22.5 million and $6.2 million, respectively and customer pricing for recoveries of semiconductor spot buy purchases of $2.4 million.
−Removed: The increase in net sales in South America was
−Removed: due to higher volumes for all of our Stoneridge Brazil product lines and for our Argentina market channel offset by unfavorable Brazilian real foreign currency translation of $3.0 million.
−Removed: The increase in net sales in Europe and Other was primarily due to increases in our European commercial vehicle and off-highway markets of $28.4 million and $14.4 million, respectively, and increases in our China automotive and agricultural vehicle markets of $3.8 million and $2.2 million, respectively.
−Removed: Europe and Other net sales also increased due to customer pricing for recoveries of semiconductor spot buy purchases of $15.2 million and favorable foreign currency translation of $8.2 million.
−Removed: These increases were partially offset by a decrease in volumes in our European automotive market of $16.7 million due to the exit of PM sensor production.
−Removed: Cost of Goods Sold and Gross Margin.
−Removed: Cost of goods sold increased compared to 2020 and our gross margin decreased to 21.7% in 2021 compared to 23.8% in 2020.
−Removed: Our material cost as a percentage of net sales increased by 4.2% to 57.0% in 2021 compared to 52.8% in 2020 primarily caused by costs associated with supply chain disruptions including spot purchases of electronic components.
−Removed: In 2021, cost of goods sold increased by $17.6 million, or 2.3% of net sales, due to semiconductor spot buy purchases which was offset by customer recoveries.
−Removed: Overhead as a percentage of net sales decreased by 2.0% to 16.1% for 2021 compared to 18.0% for 2020 primarily due to leverage of fixed costs from higher sales levels offset by higher incremental freight costs .
−Removed: Our Control Devices segment gross margin decreased due to costs associated with supply chain disruptions offset by lower restructuring and realignment costs of $1.7 million and favorable leverage of fixed costs from higher sales levels.
−Removed: Our Electronics segment gross margin decreased primarily due to higher costs associated with supply chain disruptions including spot purchases of electronic components offsetting favorable leverage of fixed costs from higher sales levels.
−Removed: Our Stoneridge Brazil segment gross margin decreased due to adverse sales mix from higher product sales compared to monitoring fees and higher costs associated with supply chain disruptions offset by favorable leverage of fixed costs.
−Removed: Selling, General and Administrative.
−Removed: SG&A expenses increased by $3.5 million compared to 2020 due to a $5.3 million increase in net adjustments to the fair value of the Stoneridge Brazil earn-out consideration and higher professional service costs which were offset by lower incentive compensation costs and the 2021 gain on disposal of the PM sensor business of $1.1 million and the MSIL joint venture of $1.8 million.
−Removed: Design and Development.
−Removed: D&D costs increased by $16.8 million mostly due to increased spend in our Electronics segment of $14.4 million comprised of higher consulting and prototype costs as well as lower customer reimbursements offset by higher capitalized software development costs for ongoing development activities for awarded business programs and development of advanced technologies and systems.
−Removed: Operating Income (Loss).
−Removed: Operating income (loss) is summarized in the following table by reportable segment (in thousands):
−Removed: Year ended December 31, 2021 2020 Dollar
−Removed: (decrease) Percent
−Removed: Control Devices $ 54,933 $ 22,072 $ 32,861 148.9 %
−Removed: Electronics (12,502) (3,672) (8,830) (240.5) %
−Removed: Stoneridge Brazil 995 3,766 (2,771) (73.6) %
−Removed: Unallocated corporate (28,015) (29,830) 1,815 6.1 %
−Removed: Operating income (loss) $ 15,411 $ (7,664) $ 23,075 301.1 %
−Removed: Our Control Devices segment operating income increased due to the gain on sale of the Canton Facility of $30.7 million, the gain on disposal of the PM sensor business of $1.1 million and a decrease in restructuring expense of $4.0 million offset by higher costs from supply chain disruptions and higher Sarasota environmental remediation costs.
−Removed: Our Electronics segment operating loss increased primarily due to higher costs from supply chain disruptions including spot purchases of electronic components net of recoveries and higher D&D costs offset by higher sales.
−Removed: Our Stoneridge Brazil segment operating income decreased primarily due to a $5.3 million increase in net adjustments to the fair value of the Stoneridge Brazil earn-out consideration and the impairment of Brazilian indirect tax credits of $0.7 million offset by higher sales.
−Removed: Our unallocated corporate operating loss was lower due to lower incentive compensation benefits as a result of Company performance and the gain on the disposal of the MSIL joint venture offset by higher business realignment costs of $0.8 million and higher professional service costs.
−Removed: Operating income (loss) by geographic location is summarized in the following table (in thousands):
−Removed: Year ended December 31, 2021 2020 Dollar
−Removed: increase / (decrease) Percent
−Removed: increase / (decrease)
−Removed: North America $ 13,072 $ (22,179) $ 35,251 158.9 %
−Removed: South America 995 3,766 (2,771) (73.6) %
−Removed: Europe and Other 1,344 10,749 (9,405) (87.5) %
−Removed: Operating income (loss) $ 15,411 $ (7,664) $ 23,075 301.1 %
−Removed: Our North American operating income increased due to the gain on sales of the Canton Facility, the PM sensor business and the MSIL joint venture, higher sales in our automotive and commercial vehicle markets and lower restructuring costs offsetting higher costs from supply chain disruptions.
−Removed: The decrease in operating income in South America was primarily due to an unfavorable change in fair value of earn-out consideration adjustments of $5.3 million offsetting higher sales.
−Removed: Our operating results in Europe and Other decreased primarily due to higher costs from supply chain disruptions including spot purchases of electronic components net of recoveries and higher D&D costs offset by higher sales in our commercial vehicle and off-highway markets as well as a favorable foreign currency translation impact.
−Removed: Interest Expense, net.
−Removed: Interest expense, net decreased by $0.9 million compared to 2020 due to higher interest income of $1.2 million at Stoneridge Brazil from monetary correction on indirect tax credits.
−Removed: Offsetting this increase was higher interest expense from Credit Facility borrowings.
−Removed: Equity in Earnings of Investee.
−Removed: Equity earnings for MSIL were $1.8 million and $1.5 million for the years ended December 31, 2021 and 2020, respectively.
−Removed: As discussed in Note 2 to the consolidated financial statements, the Company sold its equity interest in MSIL on December 30, 2021.
−Removed: Equity earnings for Autotech were $1.9 million and $0.1 million for the years ended December 31, 2021 and 2020 .
−Removed: The increase in Autotech earnings was due to favorable 2021 fair value adjustments to fund investments.
−Removed: Other Expense (Income), net .
−Removed: We record certain foreign currency transaction losses (gains) as a component of other income, net on the consolidated statement of operations.
−Removed: Other expense (income), net of $1.4 million, increased by $2.9 million in 2021 compared to other income, net of $1.5 million for 2020 primarily due to 2021 foreign currency losses in our Electronics segment and 2020 foreign currency transaction gains in our Stoneridge Brazil and Electronics segments.
−Removed: Provision (Benefit) for Income Taxes.
−Removed: In 2021, income tax expense of $9.0 million was attributable to the gain on the sale of the Canton facility, the gain on the sale of the Company’s minority interest in MSIL, the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions.
−Removed: The effective tax rate of 72.6% is greater than the statutory tax rate primarily due to the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions, the tax impact of the sale of the Company’s minority interest in MSIL, partially offset by tax incentives.
−Removed: In 2020, income tax benefit of $(2.8) million was attributable to the mix of earnings and losses among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions.
−Removed: The effective tax rate of 25.9% is slightly greater than the statutory tax rate primarily due to non-deductible expenses and tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions offset by the impact of certain incentives.
Liquidity and Capital Resources
7 unchanged sentences
Net change in cash and cash equivalents $ (13,957) $ (30,749) $ 16,792
−Removed: Cash provided by operating activities increased compared to 2021 primarily due to a reduction in cash used to fund working capital levels primarily for inventory due to supply chain disruptions and new product launches.
+Added: Cash provided by operating activities decreased compared to 2022 primarily due to an increase in cash used to fund working capital levels from a combination of higher inventory levels for new product launches and the residual impact of supply chain issues on inventory , lower accounts payable and the 2022 increase in assets for spot buys not yet invoiced.
Our receivable terms and collections rates have remained consistent between periods presented.
−Removed: Net cash used for investing activities increased compared to the prior year due to 2021 proceeds from the sale of the Canton Facility, from the disposal of the MSIL joint venture and from the disposal of the PM sensor business as well as higher capital expenditures and capitalized software costs which were offset by 2022 proceeds from the settlement of the net investment hedges and lower investments in the Autotech Fund II.
−Removed: Net cash used for financing activities increased compared to the prior year primarily due to lower Credit Facility net borrowings and the 2022 cash payment of Stoneridge Brazil earn-out consideration.
+Added: Net cash used for investing activities increased compared to the prior year due to higher capital expenditures and capitalized software development costs and cash proceeds from the 2022 settlement of the net investment hedges offset by increased proceeds from the sale of fixed assets.
+Added: Net cash provided by financing activities increased compared to the prior year primarily due to higher Credit Facility net borrowings, offset by the 2022 cash payment of Stoneridge Brazil earn-out consideration and 2023 debt issuance costs.
Summary of Cash Flows for the years ended December 31, 2022 and 2021 (in thousands):
6 unchanged sentences
Net change in cash and cash equivalents $ (30,749) $ 11,628 $ (42,377)
−Removed: Cash used for operating activities increased compared to 2020 primarily due to an increase in cash used to fund working capital levels primarily for inventory, which was impacted by supply chain disruptions and production volatilities, offset by higher net income, net of the reconciling adjustment for the gain on the sale of the Canton Facility.
+Added: Cash provided by operating activities increased compared to 2021 primarily due to a reduction in cash used to fund working capital levels primarily for inventory due to supply chain disruptions and new product launches.
Our receivable terms and collections rates have remained consistent between periods presented.
−Removed: Net cash provided by investing activities increased compared to 2020 due to proceeds from the sale of the Canton Facility, from the disposal of the MSIL joint venture and from the disposal of the PM sensor business as well as lower capital expenditures and capitalized software costs which were offset by higher investments in the Autotech Fund II.
−Removed: Net cash used for financing activities increased compared to the prior year primarily due to higher Credit Facility net borrowings.
+Added: Net cash used for investing activities increased compared to the prior year due to 2021 proceeds from the sale of the Canton Facility, from the disposal of the MSIL joint venture and from the disposal of the PM sensor business as well as higher capital expenditures and capitalized software costs which were offset by 2022 proceeds from the settlement of the net investment hedges and lower investments in the Autotech Fund II.
+Added: Net cash used for financing activities increased compared to the prior year primarily due to lower Credit Facility net borrowings and the 2022 cash payment of Stoneridge Brazil earn-out consideration.
Summary of Future Cash Flows
10 unchanged sentences
(A) Includes estimated payments under the Company’s Credit Facility and other debt obligations using the most current interest rate and principal balance information available at December 31, 2023, extended through the end of the term.
−Removed: (B) In December 2018, the Company entered into an agreement to make a $10.0 million investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology.
+Added: (B) In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech, a venture capital firm focused on ground transportation technology.
The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten year life of the fund.
1 unchanged sentence
Management will continue to focus on efficiently managing its weighted-average cost of capital and believes that cash flows from operations and the availability of funds from our Credit Facility provides sufficient liquidity to meet our future growth and operating needs.
−Removed: As outlined in Note 5 to our consolidated financial statements, the Credit Facility permits borrowing up to a maximum level of $300.0 million, as amended on February 28, 2022, by Amendment No.
−Removed: 3 to the Fourth Amended and Restated Credit Agreement (“Amendment No.
−Removed: This variable rate facility provides the flexibility to refinance other outstanding debt or finance acquisitions through June 2024.
+Added: As outlined in Note 5 to our consolidated financial statements, the Credit Facility permits borrowing up to a maximum level of $275.0 million through November 2, 2026.
The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio.
−Removed: The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type
−Removed: including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends.
+Added: The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends.
The Credit Facility had an outstanding balance of $189.3 million at December 31, 2023.
−Removed: Due to the expected impact of the COVID-19 pandemic on the Company’s end-markets and the resulting expected financial impacts on the Company, on June 26, 2020, the Company entered into a Waiver and Amendment No.
−Removed: 1 to the Fourth Amended and Restated Credit Agreement (“Amendment No.
−Removed: Amendment No.
−Removed: 1 provided for certain covenant relief and restrictions during the “Covenant Relief Period” (the period ending on the date that the Company delivered a compliance certificate for the quarter ending June 30, 2021).
−Removed: The Covenant Relief Period ended on August 14, 2021.
−Removed: During the Covenant Relief Period:
−Removed: • the maximum net leverage ratio was suspended;
−Removed: • the calculation of the minimum interest coverage ratio excluded second quarter 2020 financial results effective for the quarters ended September 30, 2020 through March 31, 2021;
−Removed: • the minimum interest coverage ratio of 3.50 was reduced to 2.75 and 3.25 for the quarters ended December 31, 2020 and March 31, 2021, respectively;
−Removed: • the Company’s liquidity could not be less than $150,000;
−Removed: • the Company’s aggregate amount of cash and cash equivalents could not exceed $130,000;
−Removed: • there were certain restrictions on Restricted Payments (as defined);
−Removed: • a Permitted Acquisition (as defined) could not be consummated unless otherwise approved in writing by the required lenders.
−Removed: Amendment No.
−Removed: 1 increased the leverage based LIBOR pricing grid through the maturity date and also provided for a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remained subject to a LIBOR floor of 0 basis points.
−Removed: On December 17, 2021, the Company entered into Amendment No.
−Removed: 2 to the Fourth Amended and Restated Credit Agreement (“Amendment No.
−Removed: Amendment No.
−Removed: 2 implemented non-LIBOR interest reference rates for borrowings in euros and British pounds.
−Removed: Due to the ongoing impacts of the COVID-19 pandemic and supply chain disruptions on the Company’s end-markets and the resulting financial impacts on the Company, on February 28, 2022, the Company entered into Amendment No.
−Removed: Amendment No.
−Removed: 3 reduced the total revolving credit commitments from $400.0 million to $300.0 million and the maximum permitted amount of swing loans from $40.0 million to $30.0 million .
−Removed: Amendment No.
−Removed: 3 provides for certain financial covenant relief and additional covenant restrictions during the “Specified Period” (the period from February 28, 2022 until the date that the Company delivers a compliance certificate for the quarter ending March 31, 2023 in form and substance satisfactory to the administrative agent).
−Removed: During the Specified Period:
−Removed: • the maximum net leverage ratio was changed to 4.00 to 1.00 for the year ended December 31, 2021, suspended for the quarters ending March 31, 2022 through September 30, 2022 and cannot exceed 4.75 to 1.00 for the quarter ended December 31, 2022 or 3.50 to 1.00 for the quarter ended March 31, 2023;
−Removed: • the minimum interest coverage ratio of 3.50 was reduced to 2.50 for the quarter ended March 31, 2022, 2.25 for the quarter ended June 30, 2022 and 3.00 for the quarters ended September 30, 2022 and December 31, 2022;
−Removed: • an additional condition to drawing on the Credit Facility has been added that restricts borrowings if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;
−Removed: • there are certain additional restrictions on Restricted Payments (as defined);
−Removed: • a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Specified Period.
−Removed: Amendment No.
−Removed: 3 changed the leverage based LIBOR pricing grid through the maturity date and also retained a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remained subject to a LIBOR floor of 0 basis points.
−Removed: Amendment No.
−Removed: 3 also incorporates hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.
−Removed: Due to continued supply chain disruptions and macroeconomic challenges on the Company’s end-markets and the resulting financial impacts on the Company, on March 1, 2023, the Company entered into Amendment No.
−Removed: Amendment No.
−Removed: 4 provides for certain financial covenant relief and additional covenant restrictions during the “Amendment No.
−Removed: 4 Specified Period” (the period from March 1, 2023 until the date that the Company delivers a compliance certificate for the quarter ending September 30, 2023 in form and substance satisfactory to the administrative agent).
−Removed: During the Amendment No.
−Removed: 4 Specified Period:
−Removed: • the maximum net leverage ratio was changed to 4.75 to 1.00 for the quarter ended March 31, 2023 and 4.25 to 1.00 for the quarter ended June 30, 2023;
−Removed: • the minimum interest coverage ratio of 3.50 was reduced to 3.00 for the quarters ended March 31, 2023 and June 30, 2023;
−Removed: • drawing on the Credit Facility continues to be restricted if the Company's total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;
−Removed: • there continue to be certain additional restrictions on Restricted Payments (as defined);
−Removed: • consistent with Amendment No.
−Removed: 3, a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Amendment No.
−Removed: 4 Specified Period.
−Removed: As a result of the amendments, the Company was in compliance with all covenants at December 31, 2022.
−Removed: The Company has not experienced a violation that would limit the Company’s ability to borrow under the Credit Facility, as amended and does not expect that the covenants under it will restrict the Company’s financing flexibility.
−Removed: However, it is possible that future borrowing flexibility under the Credit Facility may be limited as a result of lower than expected financial performance due to the adverse impact of supply chain disruptions and COVID-19 on the Company’s markets and general global demand.
+Added: The Company was in compliance with all covenants at December 31, 2023.
+Added: The Company has not experienced a violation that would limit the Company’s ability to borrow under the Credit Facility and does not expect that the covenants under it will restrict the Company’s financing flexibility.
+Added: However, it is possible that future borrowing flexibility under the Credit Facility may be limited as a result of lower than expected financial performance.
The Company expects to make additional repayments on the Credit Facility when cash exceeds the amount needed for operations and to remain in compliance with all covenants.
−Removed: Stoneridge Brazil maintained short-term loans used for working capital purposes during 2021 and 2020.
−Removed: There were no borrowings outstanding on these notes at December 31, 2022.
The Company’s wholly-owned subsidiary located in Stockholm, Sweden, has an overdraft credit line which allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20.0 million Swedish krona, or $2.0 million and $1.9 million, at December 31, 2023 and 2022, respectively.
−Removed: At December 31, 2022, there were no borrowings outstanding on this overdraft credit line.
−Removed: At December 31, 2021, there was 19.0 million Swedish krona, or $2.1 million outstanding on this overdraft credit line.
−Removed: During the year ended December 31, 2022, the subsidiary borrowed 380.7 million Swedish krona, or $36.6 million, and repaid 399.6 million Swedish krona, or $38.4 million.
−Removed: The Company’s wholly-owned subsidiary located in Suzhou, China, has lines of credit which allow up to a maximum borrowing level of 20.0 million Chinese yuan, or $2.9 million at December 31, 2022 and 50.0 million Chinese yuan, or $7.9 million at December 31, 2021.
+Added: At December 31, 2023 and 2022, there were no borrowings outstanding on this overdraft credit line.
+Added: During the year ended December 31, 2023, the subsidiary borrowed and repaid 358.5 million Swedish krona, or $35.6 million.
+Added: The Company’s wholly-owned subsidiary located in Suzhou, China, has lines of credit which allow up to a maximum borrowing level of 20.0 million Chinese yuan, or $2.8 million and $2.9 million, at December 31, 2023 and 2022, respectively.
At December 31, 2023 and 2022 there was $2.1 million and $1.5 million, respectively, in borrowings outstanding recorded 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 by 180 days.
−Removed: The bank acceptance draft line of credit allows up to a maximum borrowing level of 60.0 million Chinese yuan, or $8.7 million, at December 31, 2022 and 15.0 million Chinese yuan, or $2.4 million at December 31, 2021.
+Added: The bank acceptance draft line of credit allows up to a maximum borrowing level of 60.0 million Chinese yuan, or $8.5 million, at December 31, 2023 and $8.7 million at December 31, 2022.
There was $2.4 million and $2.0 million utilized on the Suzhou bank acceptance draft line of credit at December 31, 2023 and 2022, respectively.
−Removed: On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter sensor product line.
−Removed: The costs for the PM Sensor Exit include employee severance and termination costs and other related costs including supplier settlements.
−Removed: Non-cash charges included impairment and accelerated depreciation of fixed assets associated with PM sensor production.
−Removed: We recognized $0.0 million and $2.4 million of expense as a result of this initiative during 2022 and 2021, respectively.
−Removed: The only remaining costs relate to potential commercial settlements and legal fees which we continue to negotiate.
−Removed: The estimated additional costs related to these settlements and fees is up to $4.2 million .
−Removed: In January 2019, the Company committed to a restructuring plan that resulted in the closure of its Canton Facility as of March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations.
−Removed: The costs for the Canton Restructuring included employee severance and termination costs, contract termination 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.
−Removed: We recognized expense as a result of these actions during the years ended December 31, 2022 and 2021 of $0.0 million and less than $0.1 million, respectively.
−Removed: During the third quarter of 2020, we leased the Canton facility to a third party.
−Removed: On June 17, 2021, we sold the Canton Facility for net proceeds of $35.2 million and a net gain of $30.7 million.
−Removed: On October 26, 2018, the Company announced a Board of Directors approved share repurchase program authorizing Stoneridge to repurchase up to $50.0 million of our Common Shares.
−Removed: Thereafter, on May 7, 2019, we announced that the Company had entered into an accelerated share repurchase agreement with Citibank N.A.
−Removed: to repurchase an aggregate of $50.0 million of our Common Shares.
−Removed: Pursuant to the accelerated share repurchase agreement we made an upfront payment of $50.0 million and received an initial delivery of 1,349,528 Common Shares which became treasury shares.
−Removed: On February 25, 2020, Citibank N.A.
−Removed: terminated early its commitment pursuant to the accelerated share repurchase agreement and delivered to the Company, 364,604 Common Shares representing the final settlement of the Company’s repurchase program which became treasury shares.
−Removed: On February 24, 2020, the Board of Directors authorized a new repurchase program for $50.0 million of our Common Shares over an 18 month period.
−Removed: The repurchases could be made from time to time in either open market transactions or in privately negotiated transactions.
−Removed: Repurchases could also have been made under rule 10b-18, which permits Common Shares to be repurchased through pre-determined criteria.
−Removed: The timing, volume and nature of repurchases of Common Shares was at the discretion of management, dependent on market conditions, other priorities of cash investment,
−Removed: applicable securities laws and other factors.
−Removed: This Common Share repurchase program authorization did not obligate the Company to acquire any particular amount of its Common Shares, and it could have been suspended or discontinued at any time.
−Removed: For the quarter ended March 31, 2020, the Company repurchased 242,634 Common Shares for $5.0 million in accordance with this repurchase program authorization.
−Removed: In April 2020, the Company announced that it was temporarily suspending the previously announced share repurchase program in response to uncertainty surrounding the duration and magnitude of the impact of COVID-19.
−Removed: This repurchase program authorization expired during the third quarter of 2021 and no additional shares were repurchased.
−Removed: In January 2020, Stoneridge Brazil paid dividends to former noncontrolling interest holders of Brazilian real (“R$”) 24.2 million ($6.0 million).
−Removed: The dividends payable balance included R$3.7 million ($1.0 million) in monetary correction for the year ended December 31, 2019 based on the Brazilian National Extended Consumer Price inflation index.
−Removed: In December 2018, the Company entered into an agreement to make a $10.0 million investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology.
+Added: In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech.
The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund.
7 unchanged sentences
At December 31, 2023, we had a cash and cash equivalents balance of approximately $40.8 million, of which 94.1 % was held in foreign locations.
−Removed: The Company has approximately $132.2 million of undrawn commitments under the Credit Facility as of December 31, 2022, which results in total undrawn commitments and cash balances of more than $185.4 million.
−Removed: However, despite the March 1, 2023 amendment, it is possible that future borrowing flexibility under our Credit Facility may be limited as a result of our financial performance.
+Added: The Company has approximately $85.7 million of undrawn commitments un der the Credit Facility as of December 31, 2023, which results in total undrawn commitments and cash balances of more th an $126.5 million.
Commitments and Contingencies
48 unchanged sentences
Recently Adopted Accounting Standards
−Removed: In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes.” The amendments in this update remove certain exceptions of Topic 740 including:
−Removed: exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items;
−Removed: exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment;
−Removed: exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary;
−Removed: 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.
−Removed: There are also additional areas of guidance in regards to:
−Removed: franchise and other
−Removed: taxes partially based on income and the interim recognition of enactment of tax laws and rate changes.
−Removed: The provisions of this ASU are effective for years beginning after December 15, 2020, with early adoption permitted.
−Removed: The Company adopted this standard prospectively as of January 1, 2020 using the modified retrospective basis.
−Removed: The impact of the adoption was a reduction to deferred tax liabilities and an increase to retained earnings of $13.8 million on the consolidated balance sheet as of December 31, 2020.
−Removed: The adoption of this standard did not have an impact on the Company’s consolidated results of operations and cash flows.
−Removed: Recently Issued Accounting Standards Not Yet Adopted as of December 31, 2021
−Removed: 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.
+Added: In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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”).
2 unchanged sentences
The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2023.
−Removed: As of December 31, 2022, the Company has not yet had contracts modified due to rate reform.
+Added: In February 2022, the Company amended its credit facility to incorporate hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.
+Added: The Company has applied the guidance to impacted transactions during the transition period.
+Added: The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
+Added: Recently Issued Accounting Standards Not Yet Adopted as of December 31, 2023
+Added: In November 2023, the FASB issued ASU No.
+Added: 2023-07, "Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures", which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.
+Added: The updated standard is effective for annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026.
+Added: Early adoption is permitted.
+Added: We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.
+Added: In December 2023, the FASB issued ASU No.
+Added: 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures," which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.
+Added: In addition, companies are required to disclose additional information about income taxes paid.
+Added: The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
+Added: The standard is to be adopted on a prospective basis;
+Added: however, retrospective application is permitted.
+Added: We are currently evaluating the impact on our annual consolidated financial statement disclosures.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.