16 unchanged sentences
We have audited the accompanying consolidated balance sheets of Stoneridge, Inc.
−Removed: and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements“).
+Added: and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements“).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
12 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
+Added: Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the account or disclosure to which it relates.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Product warranty and recall reserves
62 unchanged sentences
Design and development 71,075 65,296 66,165
−Removed: Operating income (loss) 2,935 15,411 ( 7,664 )
+Added: Operating income 12,836 2,935 15,411
Interest expense, net 13,000 7,097 5,189
Equity in loss (earnings) of investee 522 823 ( 3,658 )
−Removed: Other expense (income), net 5,711 1,444 ( 1,528 )
+Added: Other expense, net 1,236 5,711 1,444
(Loss) income before income taxes ( 1,922 ) ( 10,696 ) 12,436
−Removed: Provision (benefit) for income taxes 3,360 9,030 ( 2,774 )
+Added: Provision for income taxes 3,261 3,360 9,030
Net (loss) income $ ( 5,183 ) $ ( 14,056 ) $ 3,406
8 unchanged sentences
AND SUBSIDIARIES
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Year ended December 31, (in thousands) 2023 2022 2021
Net (loss) income $ ( 5,183 ) $ ( 14,056 ) $ 3,406
−Removed: Other comprehensive (loss) income, net of tax:
+Added: Other comprehensive income (loss), net of tax:
Foreign currency translation (1)
9,118 ( 6,171 ) ( 8,408 )
−Removed: Unrealized gain (loss) on derivatives (2)
+Added: Unrealized gain on derivatives (2)
1,236 53 1,019
−Removed: Other comprehensive (loss) income, net of tax ( 6,118 ) ( 7,389 ) 1,837
−Removed: Comprehensive loss $ ( 20,174 ) $ ( 3,983 ) $ ( 6,113 )
+Added: Other comprehensive income (loss), net of tax 10,354 ( 6,118 ) ( 7,389 )
+Added: Comprehensive income (loss) $ 5,171 $ ( 20,174 ) $ ( 3,983 )
_____________________________
(1) Net of tax expense of $ 514 and $ 267 for the years ended December 31, 2022 and 2021, respectively.
−Removed: (2) Net of tax expense (benefit) of $ 14 , $ 271 and $( 223 ) for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: (2) Net of tax expense of $ 328 , $ 14 and $ 271 for the years ended December 31, 2023, 2022 and 2021, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
10 unchanged sentences
Loss (earnings) of equity method investee 522 823 ( 3,658 )
−Removed: (Gain) loss on sale of fixed assets ( 241 ) ( 165 ) 185
+Added: Gain on sale of fixed assets ( 860 ) ( 241 ) ( 165 )
Share-based compensation expense 3,322 5,942 5,960
2 unchanged sentences
Gain on disposal of business and joint venture, net — — ( 2,942 )
−Removed: Property, plant and equipment impairment charge 33 — 2,349
Change in fair value of earn-out contingent consideration — — 2,065
21 unchanged sentences
Earn-out consideration cash payment — ( 6,276 ) —
−Removed: Common Share repurchase program — — ( 4,995 )
+Added: Other financing costs ( 2,251 ) ( 484 ) ( 18 )
Repurchase of Common Shares to satisfy employee tax withholding ( 1,720 ) ( 791 ) ( 2,665 )
−Removed: Net cash (used for) provided by financing activities ( 7,297 ) 22,876 6,513
+Added: Net cash provided by (used for) financing activities 17,485 ( 7,297 ) 22,876
Effect of exchange rate changes on cash and cash equivalents 591 ( 1,677 ) ( 3,041 )
5 unchanged sentences
Cash paid for income taxes, net $ 10,302 $ 6,178 $ 11,267
−Removed: Supplemental disclosure of non-cash activities:
−Removed: Adoption of ASU 2019-12 (Note 2) $ — $ — $ 13,750
The accompanying notes are an integral part of these consolidated financial statements.
9 unchanged sentences
comprehensive
+Added: (loss) income Total
shareholders'
BALANCE , DECEMBER 31, 2020 27,006 1,960 $ 234,409 $ ( 60,482 ) $ 212,342 $ ( 89,635 ) $ 296,634
−Removed: Net loss — — — — ( 7,950 ) — ( 7,950 )
−Removed: Unrealized loss on derivatives, net — — — — — ( 840 ) ( 840 )
+Added: Net income — — — — 3,406 — 3,406
+Added: Unrealized gain on derivatives, net — — — — — 1,019 1,019
Currency translation adjustments — — — — — ( 8,408 ) ( 8,408 )
1 unchanged sentence
Repurchased Common Shares for treasury, net ( 80 ) 80 — 5,218 — — 5,218
−Removed: Common Share repurchase program ( 607 ) 607 10,000 ( 14,995 ) — — ( 4,995 )
Share-based compensation, net — — ( 1,919 ) — — — ( 1,919 )
−Removed: Adoption of ASU 2019-12 (Note 2) — — — — 13,750 — 13,750
BALANCE DECEMBER 31, 2021 27,191 1,775 $ 232,490 $ ( 55,264 ) $ 215,748 $ ( 97,024 ) $ 295,950
−Removed: Net income — — $ — $ — $ 3,406 $ — $ 3,406
+Added: Net loss — — $ — $ — $ ( 14,056 ) $ — $ ( 14,056 )
Unrealized gain on derivatives, net — — — — — 53 53
37 unchanged sentences
Revenues are principally generated from the automotive, commercial, off-highway and agricultural vehicle markets.
−Removed: The Company’s largest customers are PACCAR and Volvo, primarily related to the Electronics reportable segment and accounted for the following percentages of consolidated net sales:
+Added: The Company’s largest customers are PACCAR and Traton, primarily related to the Electronics reportable segment and accounted for the following percentages of consolidated net sales:
2023 2022 2021
PACCAR 16 % 15 % 6 %
−Removed: Volvo 11 % 9 % 8 %
+Added: Traton 15 % 11 % 9 %
Accounts receivable are recorded at the invoice price, net of an estimate of allowance for doubtful accounts and other reserves.
5 unchanged sentences
The Company does not have collateral requirements with its customers.
−Removed: Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value.
−Removed: The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis.
−Removed: Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period.
−Removed: The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: hand compared to anticipated sales or usage.
+Added: Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value.
+Added: The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis.
+Added: Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period.
+Added: 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.
10 unchanged sentences
In 2022, the Company entered into a long term supply agreement with a supplier for the purchase of certain electronic semiconductor components through December 31, 2026.
−Removed: Pursuant to the agreement, the Company paid a $ 1,000 capacity deposit in 2022 and is obligated to pay an additional $ 1,000 capacity deposit in 2023.
−Removed: The capacity deposit is recognized in prepaid and other current assets on our consolidated balance sheet.
+Added: Pursuant to the agreement, the Company paid capacity deposits of $ 1,000 in 2022 and 2023, respectively.
+Added: The capacity deposits are recognized in prepaid and other current assets on our consolidated balance sheet.
This long term supply agreement requires the Company to purchase minimum annual volumes while requiring the supplier to sell these components at a fixed price.
−Removed: The Company purchased $ 1,174 of these components during the year ended December 31, 2022.
+Added: The Company purchased $ 6,028 and $ 1,174 of these components during the years ended December 31, 2023 and 2022, respectively.
The Company is required to purchase $ 7,828 , $ 10,764 and $ 10,764 of components in each of the years 2024 through 2026, respectively.
8 unchanged sentences
Pursuant to the APA, the Company agreed to sell to the Buyers the Company’s assets located in Lexington, Ohio and Tallinn, Estonia related to the manufacturing of particulate matter sensor products and related service part operations (together, the “PM sensor business”).
−Removed: In the past, the Company has sometimes referred to the PM sensor assets as the Company’s soot sensing business.
The Buyers did not acquire any of the Company’s locations or employees.
4 unchanged sentences
The Company and SMP also entered into certain ancillary agreements, including a contract manufacturing agreement, a transitional services 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: On March 8, 2021 the Company’s Control Devices segment recognized net sales and cost of goods sold ("COGS") of $ 971 and $ 898 , respectively, for the one-time sale of Gen 1 inventory and a gain on disposal of $ 740 for the sale of Gen 1 fixed assets less transaction costs of $ 60 within selling, general and administrative ("SG&A") during the three months ended March 31, 2021.
−Removed: Pursuant to the contract manufacturing agreement, the Company produced and sold PM sensor Gen 1 finished goods inventory to SMP for net sales of $ 8,042 in the year ended December 31, 2021.
−Removed: In addition, the Company received $ 308 and
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: $ 783 for services provided pursuant to the transition services agreement which were recognized as a reduction in SG&A for the years ended December 31, 2022 and 2021, respectively.
+Added: On March 8, 2021 the Company’s Control Devices segment recognized net sales and cost of goods sold ("COGS") of $ 971 and $ 898 , respectively, for the one-time sale of Gen 1 inventory and a gain on disposal of $ 740 for the sale of Gen 1 fixed assets less transaction costs of $ 60 within selling, general and administrative ("SG&A") during the three months ended March 31, 2021.
+Added: Pursuant to the contract manufacturing agreement, the Company produced and sold PM sensor Gen 1 finished goods inventory to SMP recognizing net sales of $ 8,042 in the year ended December 31, 2021.
+Added: In addition, the Company received $ 308 and $ 783 for services provided pursuant to the transition services agreement which were recognized as a reduction in SG&A for the years ended December 31, 2022 and 2021, respectively.
PM sensor Gen 1 net sales, including sales of $ 8,042 to SMP pursuant to the contract manufacturing agreement and the sale of Gen 1 inventory components of $ 2,283 and operating income were $ 12,592 and $ 1,415 , respectively, for the year ended December 31, 2021.
−Removed: PM sensor Gen 1 net sales and operating income were $ 8,814 and $ 1,090 , respectively, for the year ended December 31, 2020.
The Company completed the PM sensor Gen 2 product supply commitments and ended production on September 23, 2021.
3 unchanged sentences
On June 17, 2021, pursuant to the Agreement, as amended after May 7, 2021, the Company closed the sale of the Canton Facility to the Buyer for an adjusted purchase price of $ 37,900 .
−Removed: The Company recognized in the Control Devices segment, net proceeds of $ 35,167 and a gain, net of direct selling costs, of $ 30,718 .
+Added: The Company recognized in the Control Devices segment, net proceeds of $ 35,167 and a gain, net of direct selling costs, of $ 30,718 within SG&A.
On November 2, 2021, the Company entered into a Share Purchase Agreement (the “SPA”) with Minda Corporation Limited (“Minda”), as the buyer, and MSIL.
45 unchanged sentences
The occurrence of certain events, including changes in economic and competitive conditions, could impact cash flows eventually realized and management’s ability to accurately assess whether an asset is impaired.
−Removed: On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line.
−Removed: As a result of the strategic exit of the PM sensor product line the Company determined an impairment indicator existed and performed a recoverability test of the related long-lived assets.
−Removed: The Company identified that there were two asset groups comprised of PM sensor fixed assets at the Company’s Lexington, Ohio and Tallinn, Estonia facilities.
−Removed: As a result of the recoverability test performed, the Company determined that the undiscounted cash flows did not exceed the carrying value of the PM sensor fixed assets at the Company’s Tallinn, Estonia facility.
−Removed: As such, an impairment loss of $ 2,326 was recorded based on the difference between the fair value and the carrying value of the assets.
−Removed: The Company used the income approach to determine the fair value of the PM sensor fixed assets at the Tallinn, Estonia facility.
−Removed: During the year ended December 31, 2020, the impairment loss of $ 2,326 was recorded on the Company’s consolidated statement of operations within SG&A expense.
Goodwill and Other Intangible Assets
2 unchanged sentences
Goodwill is not amortized, but instead is tested for impairment at least annually, or earlier when events and circumstances indicate that it is more likely than not that such assets have been impaired, by applying a fair value-based test.
−Removed: In conducting our annual impairment assessment testing, we first perform a qualitative assessment of whether it is
+Added: In conducting our annual impairment assessment testing, we first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount.
+Added: If not, no further goodwill impairment testing is performed.
+Added: If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if we elect not to perform a qualitative assessment of a reporting unit, we then compare the fair value of the reporting unit to the related net book value.
+Added: If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: more likely than not that a reporting unit’s fair value is less than its carrying amount.
−Removed: If not, no further goodwill impairment testing is performed.
−Removed: If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if we elect not to perform a qualitative assessment of a reporting unit, we then compare the fair value of the reporting unit to the related net book value.
−Removed: If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized.
The Company utilizes an income statement approach to estimate the fair value of a reporting unit and a market valuation approach to further support this analysis.
35 unchanged sentences
Capitalized software development and patents of $ 2,149 and $ 60 , respectively, related to the Control Devices segment at December 31, 2023.
+Added: The Company designs and develops software that will be embedded into certain products and sold to customers.
+Added: Software development costs are capitalized after the software product development reaches technological feasibility and until the software product becomes available for general release to customers.
+Added: These intangible assets are amortized using the straight-line method over estimated useful lives generally ranging from three to seven years .
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: The Company designs and develops software that will be embedded into certain products and sold to customers.
−Removed: Software development costs are capitalized after the software product development reaches technological feasibility and until the software product becomes available for general release to customers.
−Removed: These intangible assets are amortized using the straight-line method over estimated useful lives generally ranging from three to seven years .
The Company recognized $ 6,942 , $ 7,003 and $ 6,006 of amortization expense related to intangible assets in 2023, 2022 and 2021, respectively.
28 unchanged sentences
Adjustments resulting from translation of financial statements are reflected as a component of accumulated other comprehensive loss in the Company’s consolidated balance sheets.
−Removed: Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction with the resulting adjustments included on the consolidated statements of operations within other expense (income), net.
−Removed: These foreign currency transaction losses (gains), including the impact of hedging activities, were $ 5,534 , $ 2,037 and $( 997 ) for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction with the resulting adjustments included on the consolidated statements of operations within other expense, net.
+Added: These foreign currency transaction losses, including the impact of hedging activities, were $ 1,226 , $ 5,534 and $ 2,037 for the years ended December 31, 2023, 2022 and 2021, respectively.
STONERIDGE, INC.
26 unchanged sentences
Product warranty and recall includes $ 7,228 and $ 4,437 of a long-term liability at December 31, 2023 and 2022, respectively, which is included as a component of other long-term liabilities on the consolidated balance sheets.
+Added: During the second quarter of 2023, the Company received a request for arbitration of warranty claims related to past sales of PM sensor products, a product line we exited in 2019.
+Added: The claim notification was submitted by one of our customers seeking recovery for warranty related claims.
+Added: Based on our review of the technical merits and specific claims as well as prior discussions with the customer, we believe these claims lack merit and are significantly overstated.
+Added: While no assurances can be made as to the ultimate outcome of this matter, or any other future claims, we do not currently believe a material loss is probable.
The following provides a reconciliation of changes in the product warranty and recall reserve:
9 unchanged sentences
These product development costs amounted to $ 71,075 , $ 65,296 and $ 66,165 for the years ended December 31, 2023, 2022 and 2021, respectively, or 7.3 %, 7.3 % and 8.6 % of net sales for these respective periods.
−Removed: Research and Development Activities
−Removed: The Company enters into research and development contracts with certain customers, which generally provide for reimbursement of costs.
−Removed: The Company incurred and was reimbursed for contracted research and development costs of $ 23,784 , $ 15,849 and $ 19,302 for the years ended December 31, 2022, 2021 and 2020, respectively.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
+Added: Research and Development Activities
+Added: The Company enters into research and development contracts with certain customers, which generally provide for reimbursement of costs.
+Added: The Company incurred and was reimbursed for contracted research and development costs of $ 18,809 , $ 23,784 and $ 15,849 for the years ended December 31, 2023, 2022 and 2021, respectively.
Share-Based Compensation
−Removed: At December 31, 2022, the Company had two types of share-based compensation plans:
+Added: At December 31, 2023, the Company had two share-based compensation plans:
(1) 2016 Long-Term Incentive Plan for employees and (2) the 2018 Amended and Restated Directors’ Restricted Shares Plan, for non-employee directors.
4 unchanged sentences
Financial Instruments and Derivative Financial Instruments
−Removed: Financial instruments, including derivative financial instruments, held by the Company include cash and cash equivalents, accounts receivable, accounts payable, long-term debt, net investment hedge, interest rate swap agreement and foreign currency forward contracts.
+Added: Financial instruments, including derivative financial instruments, held by the Company include cash and cash equivalents, accounts receivable, accounts payable, long-term debt and foreign currency forward contracts.
The carrying value of cash and cash equivalents, accounts receivable and accounts payable is considered to be representative of fair value because of the short maturity of these instruments.
18 unchanged sentences
In 2022, the Company capitalized $ 484 of deferred financing costs as a result of entering into Amendment No.
−Removed: 1 to the Credit Facility.
−Removed: In 2022, the Company capitalized $ 484 of deferred financing costs as a result of entering into Amendment No.
−Removed: 3 to the Credit Facility.
+Added: 3 to the Fourth Amended and Restated Credit Facility.
In connection with Amendment No.
3, the Company wrote off a portion of the previously recorded deferred financing costs of $ 365 in interest expense, net during the year ended December 31, 2022.
−Removed: See Note 5 to the consolidated financial statements for additional details regarding the Credit Facility and related deferred financing costs.
−Removed: The Company has elected to continue to present deferred financing costs within long-term assets in the Company’s consolidated balance sheets.
−Removed: Deferred financing costs, net, were $ 996 and $ 1,563 , as of December 31, 2022 and 2021, respectively.
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: Equity and Changes in Accumulated Other Comprehensive Loss by Component
−Removed: Common Share Repurchase
−Removed: On October 26, 2018, the Company’s Board of Directors authorized the Company to repurchase up to $ 50,000 of Common Shares.
−Removed: Thereafter, on May 7, 2019, the Company entered into a Master Confirmation (the “Master Confirmation”) and a Supplemental Confirmation, together with the Master Confirmation, the Accelerated Share Repurchase Agreement (“ASR Agreement”), with Citibank N.A.
−Removed: (the “Bank”) to purchase Company Common Shares for a payment of $ 50,000 (the “Prepayment Amount”).
−Removed: Under the terms of the ASR Agreement, on May 7, 2019, the Company paid the Prepayment Amount to the Bank and received on May 8, 2019 an initial delivery of 1,349,528 Company Common Shares, which was approximately 80 % of the total number of Company Common Shares expected to be repurchased under the ASR Agreement based on the closing price of the Company’s Common Shares on May 7, 2019.
−Removed: These Common Shares became treasury shares and were recorded as a $ 40,000 reduction to shareholder’s equity.
−Removed: The remaining $ 10,000 of the Prepayment Amount was recorded as a reduction to shareholders’ equity as an unsettled forward contract indexed to our Common Shares.
−Removed: On February 25, 2020, the Bank notified the Company that it terminated early its commitment pursuant the ASR Agreement and would deliver 364,604 Common Shares on February 27, 2020 based on the volume weighted average price of our Common Shares during the term set forth in the ASR Agreement.
−Removed: The Bank’s notice of early termination and the subsequent delivery of Common Shares represented the final settlement of the Company’s share repurchase program pursuant to the accelerated share repurchase agreement.
−Removed: These Common Shares became treasury shares and were recorded as a $ 10,000 reduction to shareholders’ equity as Common Shares held in treasury with the offset of $ 10,000 to additional paid-in capital.
−Removed: On February 24, 2020, the Company’s Board of Directors authorized a new repurchase program of $ 50,000 for the repurchase of the Company’s outstanding Common Shares over the next 18 months.
−Removed: The repurchases could be made from time to time in either open market transactions or in privately negotiated transactions.
−Removed: Repurchases could also be made under Rule 10b-18 plans, which permit Common Shares to be repurchased through pre-determined criteria.
−Removed: On March 3, 2020, under the new repurchase program the Company entered into a 10b-18 Agreement Letter (the “10b-18 Agreement”), with the Bank to purchase Company Common Shares, under purchasing conditions of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 10b-18”), for up to $ 5,000 .
−Removed: Under the terms of the 10b-18 Agreement, commencing March 3, 2020 and ending March 6, 2020, the Company received delivery of a total of 242,634 Company Common Shares for the amount of $ 4,995 .
−Removed: These Common Shares became treasury shares and were recorded as a $ 4,995 reduction to shareholders’ equity as Common Shares held in treasury.
−Removed: In April 2020, the Company announced that it was temporarily suspending the 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: In 2023, the Company capitalized $ 332 of deferred financing costs as a resulting of entering into Amendment No.
+Added: 4 to the Fourth Amended and Restated Credit Facility.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: Accumulated Other Comprehensive Loss
−Removed: Changes in accumulated other comprehensive loss for the years ended December 31, 2022 and 2021 were as follows:
+Added: Additionally 2023, the Company capitalized $ 1,915 of deferred financing costs and wrote off $ 309 of previously recorded deferred financing costs as a result of entering into the Fifth Amended and Restated Credit Agreement.
+Added: See Note 5 to the consolidated financial statements for additional details regarding the Credit Facility and related deferred financing costs.
+Added: The Company has elected to continue to present deferred financing costs within long-term assets in the Company’s consolidated balance sheets.
+Added: Deferred financing costs, net, were $ 2,057 and $ 996 , as of December 31, 2023 and 2022, respectively.
+Added: Changes in Accumulated Other Comprehensive Income (Loss) by Component
+Added: Changes in accumulated other comprehensive income (loss) for the years ended December 31, 2023 and 2022 were as follows:
translation Unrealized
1 unchanged sentence
Balance at January 1, 2023 $ ( 103,374 ) $ 232 $ ( 103,142 )
−Removed: Other comprehensive (loss) income before reclassifications ( 6,171 ) 1,816 ( 4,355 )
+Added: Other comprehensive income before reclassifications 9,118 1,817 10,935
Amounts reclassified from accumulated other comprehensive loss — ( 581 ) ( 581 )
−Removed: Net other comprehensive (loss) income, net of tax ( 6,171 ) 53 ( 6,118 )
+Added: Net other comprehensive income, net of tax 9,118 1,236 10,354
Balance at December 31, 2023 $ ( 94,256 ) $ 1,468 $ ( 92,788 )
7 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 taxes partially based on income and the interim recognition of enactment of tax laws and rate changes.
−Removed: 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 $ 13,750 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, 2022
−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.
−Removed: Revenue is recognized when obligations under the terms of a contract with our customer are satisfied;
−Removed: generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises.
−Removed: Revenue is measured as the amount of consideration we expect to receive in exchange for
+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.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: transferring goods or providing services.
+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.
+Added: Revenue is recognized when obligations under the terms of a contract with our customer are satisfied;
+Added: generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises.
+Added: Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.
The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur.
14 unchanged sentences
Our Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products and electronic control units.
−Removed: These products are sold principally to the commercial vehicle market primarily through our OEM and aftermarket channels in the European, North American and Asia Pacific regions.
−Removed: The vision and safety systems are sold principally to the commercial vehicle and off-highway vehicle markets in the European and North American regions.
+Added: These products are sold principally to the commercial and off-highway vehicle markets primarily through our OEM and aftermarket channels in the European, North American and Asia Pacific regions.
Stoneridge Brazil.
−Removed: Our Stoneridge Brazil segment (“SRB”) primarily serves the South American region and specializes in the design, manufacture and sale of 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: Stoneridge Brazil sells its products through the aftermarket distribution channel, to factory authorized dealer installers, also referred to as original equipment services, directly to OEMs and through mass merchandisers.
+Added: Our Stoneridge Brazil segment primarily serves the South American region and specializes in the design, manufacture and sale of vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions.
+Added: Stoneridge Brazil sells its products through the aftermarket distribution channel, to factory authorized dealer installers, also referred to as original equipment services and directly to OEMs.
In addition, monitoring services and tracking devices are sold directly to corporate customers and individual consumers.
8 unchanged sentences
(1) Company sales based on geographic location are where the sale originates not where the customer is located.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Performance Obligations
2 unchanged sentences
The performance obligation does not exist until a customer release is received for a specific number of parts.
−Removed: The majority of the parts sold to OEM and Tier 1 supplier customers are customized to the specific customer, with the exception of camera monitoring systems (“CMS”) sold through our aftermarket channel that are common across all customers.
+Added: The majority of the parts sold to OEM and Tier 1 supplier customers are customized to the specific customer, with the exception of MirrorEye camera monitor systems (“CMS”) sold through our aftermarket channel that are common across all customers.
The transaction price is equal to the contracted price per part and there is no expectation of material variable consideration in the transaction price.
2 unchanged sentences
Certain customer contracts contain an enforceable right to payment if the customer terminates the contract for convenience and therefore are recognized over time using the cost to complete input method.
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: Our aftermarket products are focused on meeting the demand for repair and replacement parts, compliance parts and accessories and are sold primarily to aftermarket distributors and mass retailers in our South American, European and North American markets.
+Added: Our aftermarket products are focused on meeting the demand for safety and compliance parts and accessories as well as repair and replacement parts and are sold primarily to aftermarket distributors and direct to consumers in our South American, European and North American markets.
Aftermarket products have one type of performance obligation which is the delivery of aftermarket parts and spare parts.
2 unchanged sentences
Revenue for aftermarket part production contracts is recognized at a point in time when the control of the parts transfer to the customer which is based on the shipping terms.
−Removed: Aftermarket contracts may include variable consideration related to discounts and rebates which is included in the transaction price upon recognizing the product revenue.
+Added: Aftermarket contracts may include variable consideration related to discounts, rebates and extended warranties which are included in the transaction price upon recognizing the product revenue.
A small portion of the Company’s sales are comprised of monitoring services that include both monitoring devices and fees to individual, corporate, fleet and cargo customers in our Stoneridge Brazil segment.
7 unchanged sentences
Minda Stoneridge Instruments Ltd.
−Removed: The Company had a 49 % equity interest in MSIL, a company based in India that manufactures electronics, instrumentation equipment and sensors primarily for the motorcycle, commercial vehicle and automotive markets.
+Added: The Company had a 49 % equity interest in MSIL, a company based in India that manufactured electronics, instrumentation equipment and sensors primarily for the motorcycle, commercial vehicle and automotive markets.
As discussed in Note 2, the Company sold its equity interest in MSIL on December 30, 2021.
The investment was accounted for under the equity method of accounting.
−Removed: The Company’s investment in MSIL, recorded as a component of investments and other long-term assets, net on the consolidated balance sheet as of December 31, 2020 was $ 13,547 .
−Removed: Equity in earnings of MSIL included in the consolidated statements of operations were $ 1,776 and $ 1,477 for the years ended December 31, 2021 and 2020, respectively.
+Added: Equity in earnings of MSIL included in the consolidated statements of operations was $ 1,776 for the year ended December 31, 2021.
PST Eletrônica Ltda.
4 unchanged sentences
See Note 10 for the fair value and foreign currency adjustments of the earn-out consideration for the current and prior periods.
−Removed: Stoneridge Brazil had dividends payable to former noncontrolling interest holders of Brazilian real (“R$”) 24,154 ($ 6,010 ) as of December 31, 2019.
−Removed: These dividends were paid in January 2020.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Other Investments
1 unchanged sentence
The Company’s $ 10,000 investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund.
−Removed: The Company contributed $ 950 to the Autotech Fund II during the year ended December 31, 2022.
+Added: The Company has contributed $ 8,400 to the Autotech Fund II as of December 31, 2023.
+Added: The Company contributed $ 350 and $ 950 to the Autotech Fund II during the years ended December 31, 2023 and 2022, respectively.
The Company contributed $ 3,450 to and received $ 251 in distributions from the Autotech Fund II during the year ended December 31, 2021.
2 unchanged sentences
The Autotech Fund II investment recorded in investments and other long-term assets, net in the consolidated balance sheets was $ 8,472 and $ 8,644 as of December 31, 2023 and 2022, respectively.
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
2023 December 31,
2 unchanged sentences
Revolving Credit Facility
−Removed: Credit Facility $ 167,802 $ 163,957 6.29 % June 2024
+Added: Credit Facility $ 189,346 $ 167,802 8.16 % November 2026
Sweden short-term credit line — —
−Removed: Suzhou short-term credit line 1,450 3,149 3.70 % June 2023
+Added: Suzhou short-term credit line 2,113 1,450 3.25 % August 2024
Total debt 2,113 1,450
2 unchanged sentences
Revolving Credit Facility
−Removed: On June 5, 2019, the Company entered into the Fourth Amended and Restated Credit Agreement (the “Credit Facility”).
−Removed: The Credit Facility provided for a $ 400,000 senior secured revolving credit facility (which, as described below in the discussion of Amendment No.
−Removed: 3 to the Credit Facility was amended to be a $ 300,000 credit commitment) and it replaced and superseded the Third Amended and Restated Credit Agreement that provided for a $ 300,000 revolving credit facility.
−Removed: The Credit Facility had an accordion feature which allowed the Company to increase the availability by up to $ 150,000 upon the satisfaction of certain conditions and includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility.
−Removed: The Credit Facility has a termination date of June 5, 2024 .
−Removed: Borrowings under the Credit Facility bear interest at either the Base Rate or the LIBOR rate, at the Company’s option, plus the applicable margin as set forth in the Credit Facility.
+Added: On June 5, 2019, the Company entered into the Fourth Amended and Restated Credit Agreement, as amended, (the “Fourth Amended and Restated Credit Agreement”).
+Added: The Fourth Amended and Restated Credit Agreement provided for a $ 300,000 senior secured revolving credit facility.
+Added: As a result of entering into the Fourth Amended and Restated Credit Agreement and related amendments, the Company capitalized $ 332 and $ 484 of deferred financing costs during the years ended December 31, 2023 and 2022, respectively.
+Added: The Company wrote off a portion of the previously recorded deferred financing costs of $ 365 in interest expense, net during the year ended December 31, 2022.
+Added: On November 2, 2023, the Company entered into the Fifth Amended and Restated Credit Agreement (the “Credit Facility”).
+Added: The Credit Facility provides for a $ 275,000 senior secured revolving credit facility and it replaced and superseded the Fourth Amended and Restated Credit Agreement.
+Added: The Credit Facility has an accordion feature which allows the Company to increase the availability by up to $ 150,000 upon the satisfaction of certain conditions, including the consent of lenders providing the increase in commitments and also includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility.
+Added: The Credit Facility has a termination date of November 2, 2026.
+Added: Borrowings under the Credit Facility bear interest at either the Base Rate or the SOFR rate, at the Company’s option, plus the applicable margin as set forth in the Credit Facility.
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.
+Added: As a result of entering into the Fifth Amended and Restated Credit Agreement, the Company capitalized $ 1,915 of deferred financing costs and wrote off $ 309 of previously recorded deferred financing costs during the year ended December 31, 2023.
The Credit Facility contains customary affirmative covenants and representations.
−Removed: The Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated and junior lien indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) sale and leaseback transactions, (xiii) changes in organizational documents and fiscal year and (xiv) transactions with respect to bonding subsidiaries.
−Removed: The Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $ 30,000 , (v) any loan document shall cease to be a legal, valid and binding agreement, (vi) certain uninsured losses or proceedings against assets with a value in excess of $ 30,000 , (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings.
−Removed: Due to the expected impact of the COVID-19 pandemic on the Company’s end-markets and the resulting expected financial impacts to 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 in form and substance satisfactory to the administrative agent).
−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: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: Amendment No.
−Removed: 1 changed the leverage based LIBOR pricing grid through the maturity date of the Credit Facility and also provides for a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remain subject to a LIBOR floor of 0 basis points.
−Removed: As of December 31, 2022, Specified Hedge Borrowings were $ 50,000 .
−Removed: The Company capitalized $ 1,086 of deferred financing costs as a result of entering into Amendment No.
−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: 3 to the Fourth Amended and Restated Credit Agreement (“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 could not 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 changes the leverage based LIBOR pricing grid through the maturity date and also retains a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remain 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: The Company capitalized $ 484 of deferred financing costs as a result of entering into Amendment No.
−Removed: In connection with Amendment No.
−Removed: 3, the Company wrote off a portion of the previously recorded deferred financing costs of $ 365 in interest expense, net during the year ended December 31, 2022.
−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: 4 to the Fourth Amended and Restated Credit Agreement (“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: Borrowings outstanding on the Credit Facility were $ 167,802 and $ 163,957 at December 31, 2022 and 2021, respectively.
−Removed: As a result of the amendments, the Company was in compliance with all credit facility covenants at December 31, 2022 and 2021.
+Added: The Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) continuation of or change in business, (vii) restricted payments, (viii) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (ix) loans and investments and (x) changes in organizational documents and fiscal year.
+Added: The Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $ 30,000 , (v) any loan document shall cease to be a legal, valid and binding agreement,
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
+Added: (vi) certain uninsured losses or proceedings against assets with a value in excess of $ 30,000 , (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings.
+Added: Borrowings outstanding on credit facilities were $ 189,346 and $ 167,802 at December 31, 2023 and 2022, respectively.
+Added: The Company was in compliance with all credit facility covenants at December 31, 2023 and 2022.
The Company also had outstanding letters of credit of $ 1,586 and $ 1,626 at December 31, 2023 and 2022, respectively.
−Removed: 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 20,000 Swedish krona, or $ 1,922 and $ 2,213 at December 31, 2022 and 2021, respectively.
−Removed: At December 31, 2022 there were no borrowings outstanding on this overdraft credit line.
−Removed: At December 31, 2021, there was 18,973 Swedish krona, or $ 2,099 , outstanding on this overdraft credit line.
−Removed: During the year ended December 31, 2022, the subsidiary borrowed 380,652 Swedish krona, or $ 36,574 , and repaid 399,625 Swedish krona, or $ 38,397 .
−Removed: The Company’s wholly-owned subsidiary located in Suzhou, China (the "Suzhou subsidiary"), has lines of credit (the “Suzhou credit line”) which allow up to a maximum borrowing level of 20,000 Chinese yuan, or $ 2,900 at December 31, 2022 and 50,000 Chinese yuan, or $ 7,871 at December 31, 2021.
+Added: The Company’s wholly-owned subsidiary located in Stockholm, Sweden (the "Stockholm subsidiary"), has an overdraft credit line which allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $ 1,987 and $ 1,922 at December 31, 2023 and 2022, respectively.
+Added: At December 31, 2023 and December 31, 2022 there were no borrowings outstanding on this overdraft credit line.
+Added: During the year ended December 31, 2023, the subsidiary borrowed and repaid 358,484 Swedish krona, or $ 35,610 .
+Added: The Stockholm subsidiary has pledged certain of its assets as collateral in order to obtain a guarantee of certain of the Stockholm subsidiary’s obligations to third parties.
+Added: The Company’s wholly-owned subsidiary located in Suzhou, China (the "Suzhou subsidiary"), has lines of credit (the “Suzhou credit line”) which allow up to a maximum borrowing level of 20,000 Chinese yuan, or $ 2,818 and $ 2,900 at December 31, 2023 and 2022, respectively.
At December 31, 2023 and 2022 there was $ 2,113 and $ 1,450 , respectively, in borrowings outstanding on the Suzhou credit line with weighted-average interest rates of 3.25 % and 3.70 %, respectively.
1 unchanged sentence
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 60,000 Chinese yuan, or $ 8,699 at December 31, 2022 and 15,000 Chinese yuan, or $ 2,361 , at December 31, 2021.
+Added: The bank acceptance draft line of credit allows up to a maximum borrowing level of 60,000 Chinese yuan, or $ 8,453 and $ 8,699 at December 31, 2023 and 2022, respectively.
There was $ 2,387 and $ 1,998 utilized on the Suzhou bank acceptance draft line of credit at December 31, 2023 and 2022, respectively.
3 unchanged sentences
Total $ 191,459
−Removed: The income tax expense (benefit) included in the accompanying consolidated statement of operations represents federal, state and foreign income taxes.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
+Added: The income tax expense included in the accompanying consolidated statement of operations represents federal, state and foreign income taxes.
The components of (loss) income before income taxes and the provision (benefit) for income taxes consist of the following:
6 unchanged sentences
Federal $ 219 $ 435 $ —
−Removed: State and foreign 8,035 9,542 5,182
−Removed: Total current expense $ 8,470 $ 9,542 $ 5,179
+Added: State and local ( 101 ) 747 294
+Added: Foreign 7,181 7,288 9,248
+Added: Total current provision $ 7,299 $ 8,470 $ 9,542
Federal $ ( 2,265 ) $ ( 3,282 ) $ 714
−Removed: State and foreign ( 1,828 ) ( 1,226 ) 559
+Added: State and local 2 ( 25 ) ( 55 )
+Added: Foreign ( 1,775 ) ( 1,803 ) ( 1,171 )
Total deferred benefit ( 4,038 ) ( 5,110 ) ( 512 )
−Removed: Total income tax expense (benefit) $ 3,360 $ 9,030 $ ( 2,774 )
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
+Added: Total income tax provision $ 3,261 $ 3,360 $ 9,030
A summary of the differences between the statutory federal income tax rate of 21.0% and the consolidated provision for income taxes is shown below.
13 unchanged sentences
Other ( 301 ) 255 ( 1,100 )
−Removed: Provision (benefit) for income taxes $ 3,360 $ 9,030 $ ( 2,774 )
+Added: Provision for income taxes $ 3,261 $ 3,360 $ 9,030
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Significant components of the Company’s deferred tax assets and liabilities were as follows:
20 unchanged sentences
Net deferred tax assets $ 23,168 $ 20,651
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
The balance sheet classification of our net deferred tax asset is shown below:
8 unchanged sentences
The Company has net operating loss carry forwards of $ 39,638 and $ 77,027 for state and foreign tax jurisdictions, respectively.
−Removed: The state net operating losses expire from 2023-2041 and the foreign net operating losses expire from 2023-2027 or have indefinite lives.
+Added: The state net operating losses expire from 2024-2043 or have indefinite lives and the foreign net operating losses expire from 2024-2028 or have indefinite lives.
The Company has general business and foreign tax credit carry forwards of $ 20,422 , $ 1,054 and $ 714 for U.S.
1 unchanged sentence
federal general business credits, if unused, begin to expire in 2027, and the state and foreign tax credits expire at various times.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
The following is a reconciliation of the Company’s total gross unrecognized tax benefits:
8 unchanged sentences
The Company has classified its uncertain tax positions as a reduction to non-current deferred income tax assets.
−Removed: If the Company’s tax positions are sustained by the taxing authorities in favor of the Company, the amount that would affect the Company’s effective tax rate is approximately $ 2,545 and $ 2,891 at December 31, 2022 and 2021, respectively.
+Added: If the Company’s tax positions are sustained by the taxing authorities in favor of the Company, the amount that would affect the Company’s effective tax rate is approximately $ 2,545 at December 31, 2023 and 2022.
The Company classifies interest expense and, if applicable, penalties which could be assessed related to unrecognized tax benefits as a component of income tax expense.
1 unchanged sentence
On August 16, 2022, the U.S.
−Removed: enacted the Inflation Reduction Act of 2022, which, among other things, implemented a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy.
−Removed: Based on its current analysis of the provisions, the Company does not believe this legislation will have a material impact on our results of operations, but the Company is continuing to evaluate the implications.
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
+Added: enacted the Inflation Reduction Act of 2022 ("IRA"), which, among other things, implemented a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy.
+Added: The IRA did not have a material impact on the Company's consolidated financial statements.
The Company conducts business globally and, as a result, files income tax returns in the U.S.
19 unchanged sentences
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Under Leases (Topic 842), the Company determines an arrangement is a lease when we have the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.
1 unchanged sentence
For leases that have a calculated lease term of 12 months or less and do not include an option to purchase the underlying asset which we are reasonably certain to exercise, the Company has made the policy election to not apply the recognition requirements in Leases (Topic 842).
−Removed: For these short-term leases, the Company recognizes the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.
+Added: For these short-term leases, the Company recognizes the lease as a period expense on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.
For the leases identified, right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.
12 unchanged sentences
Total lease cost $ 5,913 $ 6,279
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
Balance sheet information related to leases is as follows:
4 unchanged sentences
Total leased liabilities $ 11,555 $ 14,532
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Maturities of operating lease liabilities are as follows:
19 unchanged sentences
The Company recognized lease income on a straight-line basis over the lease term until the time of the sale.
−Removed: The Company recognized, in its Control Devices segment, operating and variable lease income from leases in our consolidated statements of operations of $ 602 and $ 199 , respectively, for the year ended December 31, 2021 and $ 674 and $ 199 , respectively for the year ended December 31, 2020.
+Added: The Company recognized, in its Control Devices segment, operating and variable lease income from leases in our consolidated statements of operations of $ 602 and $ 199 , respectively, for the year ended December 31, 2021.
Share-Based Compensation Plans
2 unchanged sentences
The amendment to the 2016 Plan brought the total Common Shares available for issuance to 2,900,000 .
−Removed: Under the 2016 Plan, as of December 31, 2022, the Company has granted 2,905,947 share units, of which
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: 1,194,460 were time-based with cliff vesting using the straight-line method and 1,711,487 were performance-based.
+Added: Under the 2016 Plan, as of December 31, 2023, the Company has granted 3,351,074 share units, of which 1,378,385 were time-based with cliff vesting using the straight-line method and 1,972,689 were performance-based.
As of December 31, 2023, 1,624,076 of the shares granted have been forfeited.
3 unchanged sentences
The performance-based performance shares vest and are no longer subject to forfeiture upon the recipient remaining an employee of the Company for three years from the date of grant and, for a portion of the annual awards, upon the Company attaining certain targets of performance measured against a peer group’s three year performance in terms of total shareholder return and, for the remaining portion of the annual awards, upon achieving certain earnings per share targets and return on invested capital targets established by the Company during the performance period of the award.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
The allocation of performance shares granted between total shareholder return, earnings per share and return on invested capital were as follows for the years ended December 31:
3 unchanged sentences
Return on invested capital 18 % 18 % 18 %
+Added: In 2023, the Company granted retention-based phantom shares to certain employees that vest in June 2025 provided the employee remains employed with the Company.
+Added: The phantom shares will settle in cash based on the volume-weighted average closing price of the Company's stock for a 30 day period prior to the vesting date.
+Added: As of December 31, 2023, the Company has recorded a liability of $ 795 for the phantom shares which was included on the consolidated balance sheet as a component of other long-term liabilities.
In April 2005, the Company adopted the Directors’ Restricted Shares Plan (the “Director Share Plan”) and reserved 500,000 Common Shares for issuance under the Director Share Plan.
58 unchanged sentences
The fair value of debt approximates the carrying value of debt, due to the variable interest rate on the Credit Facility and the maturity of the remaining outstanding debt.
−Removed: Derivative Instruments and Hedging Activities
−Removed: On December 31, 2022, the Company had no open foreign currency forward contracts.
−Removed: The Company used foreign currency forward contracts solely for hedging and not for speculative purposes during 2022 and 2021.
−Removed: Management believes that its
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: use of these instruments to reduce risk is in the Company’s best interest.
−Removed: The counterparties to these financial instruments have been financial institutions with investment grade credit ratings.
+Added: Derivative Instruments and Hedging Activities
+Added: On December 31, 2023, the Company had open Mexican peso-denominated foreign currency forward contracts.
+Added: The Company used foreign currency forward contracts solely for hedging and not for speculative purposes during 2023 and 2022.
+Added: Management believes that its use of these instruments to reduce risk is in the Company’s best interest.
+Added: The counterparties to these financial instruments are financial institutions with investment grade credit ratings.
Foreign Currency Exchange Rate Risk
The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk.
−Removed: The Company uses derivative financial instruments as cash flow hedges and net investment hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.
+Added: The Company uses derivative financial instruments as cash flow hedges and used net investment hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.
Net Investment Hedges
During 2021, the Company entered into two cross-currency swaps, designated as net investment hedges, with notional values of $ 25,000 each that were scheduled to mature in August 2026 and August 2028.
−Removed: These swaps hedged a portion of the net investment in a euro-denominated subsidiary.
−Removed: As a result of favorable market conditions, on May 5, 2022, the Company unwound the two net investment hedges and recognized a net gain of $ 3,716 , which was recorded on the Company’s consolidated statement of operations as a component of other expense, net for the second quarter ended June 30, 2022 .
+Added: These swaps hedged a portion of the net investment in a certain euro-denominated subsidiary.
+Added: As a result of favorable market conditions during 2022 the Company unwound the two net investment hedges and recognized a net gain of $ 3,716 , which was recorded on the Company’s consolidated balance sheet in accumulated other comprehensive loss.
The cash received from the settlement of these swaps of $ 3,820 was classified in investing activities in the consolidated statement of cash flows.
−Removed: In the fourth quarter ended December 31, 2022, the Company determined it had incorrectly recognized the net gain in the consolidated statement of operations and reclassified the net gain of $ 3,716 to other comprehensive (loss) income, net of tax and accumulated other comprehensive loss.
−Removed: This item would have increased the loss for the three-months ended June 30, 2022, six-months ended June 30, 2022 and nine-months ended September 30, 2022 by $ 0.10 per share and recording the item in the three-months ended December 31, 2022 decreased the income per share by $ 0.10 .
−Removed: The Company assessed the materiality of this matter from a qualitative and quantitative perspective and concluded that the impact of the error is not material to the current or previous quarterly results.
The Company elected to assess hedge effectiveness of the net investment hedges under the spot method.
1 unchanged sentence
The change in fair value of these derivative instruments was recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the consolidated balance sheets.
−Removed: The Company had no outstanding net investment hedges as of December 31, 2022.
+Added: The Company had no outstanding net investment hedges as of December 31, 2023 or 2022.
Cash Flow Hedges
6 unchanged sentences
In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges and, therefore, are marked-to-market with gains and losses recognized in the Company’s consolidated statements of operations as a component of other expense, net.
−Removed: During 2022, all of the Company’s foreign currency forward contracts were designated as cash flow hedges.
+Added: During 2023 and 2022, all of the Company’s foreign currency forward contracts were designated as cash flow hedges.
The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows:
−Removed: dollar-denominated Foreign Currency Forward Contracts – Cash Flow Hedges
−Removed: The Company entered into U.S.
−Removed: dollar-denominated currency contracts on behalf of one of its European Electronics subsidiaries, whose functional currency is the euro, and expired ratably on a monthly basis during 2020.
−Removed: There were no such contracts at December 31, 2022 or 2021.
Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges
−Removed: The Company held Mexican peso-denominated foreign currency forward contracts which expired ratably on a monthly basis from January 2022 to December 2022.
+Added: The Company holds Mexican peso-denominated foreign currency forward contracts which expire ratably on a monthly basis from January 2024 to December 2024.
The notional amounts at December 31, 2023 and 2022 related to Mexican peso-denominated foreign currency forward contracts were $ 26,613 and $ 0 , respectively.
+Added: The Company evaluated the effectiveness of the Mexican peso-denominated foreign currency forward contracts held as of December 31, 2023 and the year then ended, and concluded that the hedges were highly effective.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: The Company evaluated the effectiveness of the Mexican peso-denominated foreign currency forward contracts held as of December 31, 2021 and the year then ended, and concluded that the hedges were highly effective.
Interest Rate Risk
Interest Rate Risk – Cash Flow Hedge
−Removed: On February 18, 2020, the Company entered into a floating-to-fixed interest rate swap agreement (the “Swap”) with a notional amount of $ 50,000 to hedge its exposure to interest payment fluctuations on a portion of its Credit Facility borrowings.
−Removed: The Swap was designated as a cash flow hedge of the variable interest rate obligation under the Company's Credit Facility that has a current balance of $ 167,802 at December 31, 2022.
−Removed: Accordingly, the change in fair value of the Swap is recognized in accumulated other comprehensive loss.
−Removed: The Swap agreement requires monthly settlements on the same days that the Credit Facility interest payments are due and has a maturity date of March 10, 2023, which is prior to the Credit Facility maturity date of June 4, 2024.
−Removed: Under the Swap terms, the Company pays a fixed interest rate and receives a floating interest rate based on the one-month LIBOR, with a floor.
−Removed: The critical terms of the Swap are aligned with the terms of the Credit Facility, resulting in no hedge ineffectiveness.
−Removed: The difference between amounts to be received and paid under the Swap is recognized as a component of interest expense, net on the consolidated statements of operations.
+Added: On February 18, 2020, the Company entered into a floating-to-fixed interest rate swap agreement (the “Swap”) with a notional amount of $ 50,000 to hedge its exposure to interest payment fluctuations on a portion of its Fourth Amended and Restated Credit Agreement borrowings.
+Added: The Swap matured on March 10, 2023.
+Added: The Swap was designated as a cash flow hedge of the variable interest rate obligation under the Company's Fourth Amended and Restated Credit Agreement .
+Added: Accordingly, the change in fair value of the Swap was recognized in accumulated other comprehensive loss.
+Added: The Swap agreement required monthly settlements on the same days that the Fourth Amended and Restated Credit Agreement interest payments were due and had a maturity date of March 10, 2023, which was prior to the Fourth Amended and Restated Credit Agreement maturity date of June 4, 2024.
+Added: Under the Swap terms, the Company paid a fixed interest rate and received a floating interest rate based on the one-month LIBOR, with a floor.
+Added: The critical terms of the Swap were aligned with the terms of the Fourth Amended and Restated Credit Agreement , resulting in no hedge ineffectiveness.
+Added: The difference between amounts to be received and paid under the Swap were recognized as a component of interest expense, net on the consolidated statements of operations.
The swap settlements (reduced) increased interest expense, net by $( 290 ), $( 156 ) and $ 651 for the years ended December 31, 2023, 2022 and 2021, respectively.
2 unchanged sentences
Prepaid expenses
−Removed: and other current assets Accrued expenses and
−Removed: other current liabilities
+Added: and other current assets
As of December 31, 2023 2022 2023 2022
3 unchanged sentences
Interest rate swap $ — $ 50,000 $ — $ 294
−Removed: Net investment hedges:
−Removed: Cross-currency swaps $ — $ 50,000 $ — $ 1,450 $ — $ —
_____________________________
(A) Notional amounts represent the gross contract of the derivatives outstanding in U.S.
−Removed: Gross amounts recorded for the cash flow hedges in other comprehensive (loss) income and in net (loss) income for the years ended December 31 were as follows:
+Added: Gross amounts recorded for the cash flow hedges in other comprehensive income (loss) and in net (loss) income for the years ended December 31 were as follows:
Gain (loss) recorded in other
−Removed: comprehensive (loss) income Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income (A)
+Added: comprehensive income (loss) Gain (loss) reclassified from other comprehensive
+Added: income (loss) income into net (loss) income (A)
2023 2022 2021 2023 2022 2021
5 unchanged sentences
_____________________________
−Removed: (A) Gains (losses) reclassified from comprehensive loss into net (loss) income recognized in COGS in the Company’s consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020 were $ 1,572 , $ 341 and $( 1,146 ), respectively.
−Removed: Gains (losses) reclassified from other comprehensive loss into net (loss) income recognized in D&D in the Company’s consolidated statements of operations were $ 0 , $ 0 and $( 29 ) for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Gains (losses) reclassified from other comprehensive loss into net (loss) income recognized in SG&A in the Company’s consolidated statements of operations were $ 504 , $ 107 and $( 324 ) for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Gains (losses)
+Added: (A) Gains reclassified from comprehensive income (loss) into net (loss) income recognized in COGS in the Company’s consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021 were $ 337 , $ 1,572 and $ 341 , respectively.
+Added: Gains reclassified from other comprehensive income (loss) into net (loss) income recognized in SG&A in the Company’s consolidated statements of operations were $ 109 , $ 504 and $ 107 for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Gains (losses) reclassified from other comprehensive income (loss) into net (loss) income recognized in interest expense, net in the Company’s consolidated statements of operations were $ 290 , $ 156 and $( 651 ) for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Cash flows from derivatives used to manage foreign exchange and interest rate risks are classified as operating activities within the consolidated statements of cash flows.
+Added: The Company has measured the ineffectiveness of the forward currency contracts and any amounts recognized in the consolidated financial statements were immaterial for the years ended December 31, 2023, 2022 and 2021.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: reclassified from other comprehensive loss into net (loss) income recognized in interest expense, net in the Company’s consolidated statements of operations were $ 156 , $( 651 ) and $( 433 ) for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: For the year ended December 31, 2022, the total net gains on the interest rate swap cash flow hedge of $ 294 are expected to be included in interest expense, net within the next 12 months.
−Removed: Cash flows from derivatives used to manage foreign exchange and interest rate risks are classified as operating activities within the consolidated statements of cash flows.
−Removed: The Company has measured the ineffectiveness of the forward currency contracts and any amounts recognized in the consolidated financial statements were immaterial for the years ended December 31, 2022, 2021 and 2020.
Fair Value Measurements
3 unchanged sentences
For forward currency and cross-currency contracts, inputs include forward foreign currency exchange rates.
−Removed: For the interest rate swap, inputs include LIBOR.
+Added: For the interest rate swap, inputs included LIBOR.
Fair values estimated using Level 3 inputs consist of significant unobservable inputs.
6 unchanged sentences
Financial assets carried at fair value:
−Removed: Forward currency contract $ — $ — $ — $ — $ 730
−Removed: Cross-currency swaps — — — — 1,450
+Added: Forward currency contracts $ 1,858 $ — $ 1,858 $ — $ —
Interest rate swap — — — — 294
Total financial assets carried at fair value $ 1,858 $ — $ 1,858 $ — $ 294
−Removed: Financial liabilities carried at fair value:
−Removed: Interest rate swap $ — $ — $ — $ — $ 503
−Removed: Earn-out consideration — — — — 7,351
−Removed: Total financial liabilities carried at fair value $ — $ — $ — $ — $ 7,854
The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis.
−Removed: Stoneridge Brazil
Balance at January 1 $ 7,351
4 unchanged sentences
The Company was required to pay the Stoneridge Brazil earn-out consideration based on Stoneridge Brazil’s financial performance in 2021.
−Removed: The fair value of the Stoneridge Brazil earn-out consideration was based on 2021 earnings before interest, taxes, depreciation and amortization (“EBITDA”).
+Added: The fair value of the Stoneridge Brazil earn-out consideration was based on 2021 earnings before interest, taxes, depreciation and amortization.
The Stoneridge Brazil earn-out consideration obligation was recorded within accrued expenses and other current liabilities in the consolidated balance sheet as of December 31, 2021.
The earn-out consideration obligation of $ 8,272 was paid in April 2022 and recorded in the consolidated statement of cash flows within operating and financing activities in the amounts of $ 1,996 and $ 6,276 , respectively, for the year ended December 31, 2022.
+Added: There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the year ended December 31, 2023.
+Added: No non-recurring fair value adjustments were required for nonfinancial assets for the years ended December 31, 2023 and 2022.
STONERIDGE, INC.
2 unchanged sentences
(in thousands, except share and per share data, unless otherwise indicated)
−Removed: The 2021 change in fair value of the earn-out consideration for Stoneridge Brazil was due to updated financial performance projections during 2021 and foreign currency translation fluctuations through settlement.
−Removed: The change in fair value of the Stoneridge Brazil earn-out consideration was recorded in SG&A expense and the foreign currency impact was included in other expense, net in the consolidated statements of operations.
−Removed: There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the year ended December 31, 2022.
−Removed: No non-recurring fair value adjustments were required for nonfinancial assets for the years ended December 31, 2022 and 2021.
Impairment of Long-Lived Assets or Finite-Lived Assets
8 unchanged sentences
The occurrence of certain events, including changes in economic and competitive conditions, could impact cash flows eventually realized and management’s ability to accurately assess whether an asset is impaired.
−Removed: On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line.
−Removed: As a result of the strategic exit of the PM sensor product line the Company determined an impairment indicator existed and performed a recoverability test of the related long-lived assets.
−Removed: The Company identified that there were two asset groups comprised of PM sensor fixed assets at the Company’s Lexington, Ohio and Tallinn, Estonia facilities.
−Removed: As a result of the recoverability test performed, the Company determined that the undiscounted cash flows did not exceed the carrying value of the PM sensor fixed assets at the Company’s Tallinn, Estonia facility.
−Removed: As such, an impairment loss of $ 2,326 was recorded based on the difference between the fair value and the carrying value of the assets.
−Removed: The Company used the income approach to determine the fair value of the PM sensor fixed assets at the Tallinn, Estonia facility.
−Removed: During the year ended December 31, 2020, the impairment loss of $ 2,326 was recorded on the Company’s consolidated statement of operations within SG&A expense.
−Removed: The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement."
Commitments and Contingencies
2 unchanged sentences
Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on its consolidated results of operations or financial position.
−Removed: As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at this site.
+Added: As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at the site.
The Company engaged an environmental engineering consultant to assess the level of contamination and to develop a remediation and monitoring plan for the site.
Soil remediation at the site was completed during the year ended December 31, 2010.
−Removed: A remedial action plan was approved by the Florida Department of Environmental Protection and ground water remediation began in the fourth quarter of 2015.
+Added: A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in the fourth quarter of 2015.
During the years ended December 31, 2023, 2022 and 2021, the Company recognized expense of $ 125 , $ 0 and $ 407 , respectively, related to ground water remediation.
2 unchanged sentences
Costs associated with the recorded liability will be incurred to complete the groundwater remediation and monitoring.
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: liability is based on assumptions in the remedial action plan as well as estimates for future remediation activities.
+Added: The recorded liability is based on assumptions in the remedial action plan as well as estimates for future remediation activities.
Although the Company sold the Sarasota facility and related property in December 2011, the liability to remediate the site contamination remains the responsibility of the Company.
Due to the ongoing site remediation, the Company is currently required to maintain a $ 1,489 letter of credit for the benefit of the buyer.
−Removed: The Company’s Stoneridge Brazil subsidiary has civil, labor and other tax contingencies (excluding income tax) for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company’s legal advisors in Brazil.
+Added: The Company’s Stoneridge Brazil subsidiary has civil, labor and other tax contingencies (excluding income tax) for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company which is supported by legal advisors in Brazil.
As a result, no provision has been recorded with respect to these contingencies, which amounted to R$ 41,681 ($ 8,609 ) and R$ 47,820 ($ 9,165 ) at December 31, 2023 and 2022, respectively.
2 unchanged sentences
The CADE tribunal imposed a R$ 7,995 ($ 1,651 ) fine which is included in the reasonably possible contingencies noted above.
−Removed: The Company is challenging this ruling in Brazilian federal court to reverse this decision by the CADE tribunal.
+Added: The Company continues to challenge this ruling in Brazilian federal courts to reverse this decision by the CADE tribunal.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Restructuring and Business Realignment
−Removed: On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line.
+Added: On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter sensor product line ("PM Sensor Exit").
The decision to exit the PM sensor product line was made after consideration of the decline in the market outlook for diesel passenger vehicles, the current and expected profitability of the product line and the Company’s strategic focus on aligning resources with the greatest opportunities.
1 unchanged sentence
Refer to Note 2 of the consolidated financial statements for additional details regarding this sale.
−Removed: As a result of the PM sensor restructuring actions, the Company recognized expense of $ 0 , $ 2,360 and $ 3,428 for the years ended December 31, 2022, 2021 and 2020, respectively, for non-cash fixed asset charges, including impairment and accelerated depreciation of PM sensor related fixed assets, employee severance and termination costs and other related costs including supplier settlements.
+Added: As a result of the PM Sensor Exit, the Company recognized expense of $ 2,360 for the year ended December 31, 2021, for non-cash fixed asset charges, including impairment and accelerated depreciation of PM sensor related fixed assets, employee severance and termination costs and other related costs including supplier settlements.
For the year ended December 31, 2021 restructuring related costs of $ 1,510 , $ 642 and $ 208 were recognized in COGS, SG&A and D&D, respectively.
−Removed: For the year ended December 31, 2020 restructuring related costs of $ 817 and $ 2,611 were recognized in COGS and SG&A, 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 $ 4,200 .
−Removed: The expenses for the exit of the PM sensor line that relate to the Control Devices reportable segment include the following:
+Added: The expenses for the PM Sensor Exit that relate to the Control Devices reportable segment include the following:
Accrual as of January 1, 2022 2022 Charge
9 unchanged sentences
Total $ — $ 2,360 $ ( 2,137 ) $ ( 188 ) $ 35
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: Accrual as of
−Removed: January 1, 2020 2020 Charge
−Removed: to Expense Cash Non-Cash Accrual as of December 31, 2020
−Removed: Fixed asset impairment and accelerated depreciation $ — $ 3,326 $ — $ ( 3,326 ) $ —
−Removed: Other related costs — 102 ( 102 ) — —
−Removed: Total $ — $ 3,428 $ ( 102 ) $ ( 3,326 ) $ —
On January 10, 2019, the Company committed to a restructuring plan that resulted in the closure of the Canton, Massachusetts facility (“Canton Facility”) on March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”).
−Removed: Company management informed employees at the Canton Facility of this restructuring decision on January 11, 2019.
The costs for the Canton Restructuring included employee severance and termination costs, contract terminations 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: As a result of the Canton Restructuring actions, the Company recognized expense of $ 0 , $ 13 and $ 2,978 for the years ended December 31, 2022 , 2021 and 2020, respectively, for employee severance and termination costs and other restructuring related costs.
+Added: As a result of the Canton Restructuring actions, the Company recognized expense of $ 13 for the year ended December 31, 2021, for employee severance and termination costs and other restructuring related costs.
For the year ended December 31, 2021 severance and other restructuring related costs of $ 13 were recognized in D&D in the consolidated statement of operations.
−Removed: For the year ended December 31, 2020 severance and other related restructuring costs of $ 1,659 , $ 551 and $ 768 were recognized in COGS, SG&A and D&D, respectively, in the consolidated statement of operations.
−Removed: We do not expect to incur additional costs related to the Canton Restructuring.
−Removed: Refer to Note 7 and Note 2 to the consolidated financial statements for additional details regarding the third-party lease and sale, respectively, of the Canton Facility.
+Added: Refer to Note 2 to the consolidated financial statements for additional details regarding the sale of the Canton Facility.
The expenses for the Canton Restructuring that relate to the Control Devices reportable segment include the following:
4 unchanged sentences
Total $ 93 $ — $ ( 93 ) $ — $ —
−Removed: Accrual as of January 1, 2021 2021 Charge
−Removed: to Expense Cash Non-Cash Accrual as of December 31, 2021
−Removed: Employee termination benefits $ 165 $ — $ ( 72 ) $ — $ 93
−Removed: Other related costs — 13 ( 13 ) — —
−Removed: Total $ 165 $ 13 $ ( 85 ) $ — $ 93
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Accrual as of January 1, 2021 2021 Charge
6 unchanged sentences
In addition, the Company announced a restructuring program to transfer the European production of its controls product line to China.
−Removed: As a result of these actions, the Company recognized expense of $ 0 , $ 290 and $ 2,400 respectively, for the years ended December 31, 2022, 2021 and 2020 for employee severance and termination costs, non-cash fixed asset charges for accelerated depreciation of fixed assets, contract termination costs and other related costs.
−Removed: Electronics segment restructuring costs recognized in COGS,
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
−Removed: SG&A and D&D in the consolidated statement of operations for the year ended December 31, 2021 were $ 37 , $ 210 and $ 43 , respectively.
+Added: As a result of these actions, the Company recognized expense of $ 290 for the year ended December 31, 2021 for employee severance and termination costs and other related costs.
Electronics segment restructuring costs recognized in COGS, SG&A and D&D in the consolidated statement of operations for the year ended December 31, 2021 were $ 37 , $ 210 and $ 43 , respectively.
−Removed: We do not expect to incur additional costs related to these Electronics segment restructuring actions.
The expenses for the restructuring activities that relate to the Electronics reportable segment include the following:
4 unchanged sentences
Total $ 227 $ 290 $ ( 517 ) $ — $ —
−Removed: Accrual as of January 1, 2020 2020 Charge
−Removed: to Expense Cash Non-Cash Accrual as of December 31, 2020
−Removed: Employee termination benefits $ 52 $ 1,034 $ ( 859 ) $ — $ 227
−Removed: Contract termination costs — 452 ( 452 ) — —
−Removed: Other related costs — 914 ( 914 ) — —
−Removed: Total $ 52 $ 2,400 $ ( 2,225 ) $ — $ 227
In addition to the specific restructuring activities, the Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results.
11 unchanged sentences
_____________________________
−Removed: (A) Severance costs for the year ended December 31, 2021 related to SG&A were $ 192 .
−Removed: Severance costs for the year ended December 31, 2020 related to COGS, D&D and SG&A were $ 724 , $ 283 and $ 745 respectively.
−Removed: (B) Severance costs (benefit) for the year ended December 31, 2021 related to COGS, SG&A and D&D were $ 1 , $( 7 ) and $ 9 , respectively.
−Removed: Severance costs for the year ended December 31, 2020 related to COGS, D&D and SG&A were $ 383 , $ 402 and $ 905 respectively.
+Added: (A) Severance costs for the year ended December 31, 2023 related to COGS and SG&A were $ 369 and $ 142 , respectively.
+Added: Severance costs for the year ended December 31, 2021 related to SG&A were $ 192 .
+Added: (B) Severance costs for the year ended December 31, 2023 related to COGS, SG&A and D&D were $ 423 , $ 2,057 and $ 382 , respectively.
+Added: Severance costs (benefit) for the year ended December 31, 2021 related to COGS, SG&A and D&D were $ 1 , $( 7 ) and $ 9 respectively.
(C) Severance costs for the year ended December 31, 2022 related to SG&A were $ 98 .
Severance costs for the year ended December 31, 2021 related to COGS and SG&A were $ 7 and $ 52 , respectively.
−Removed: Severance costs for the year ended December 31, 2020 related to COGS and SG&A were $ 124 and $ 110 , respectively.
−Removed: (D) Severance costs for the years ended December 31, 2022, 2021 and 2020 related to SG&A were $ 190 , $ 1,138 and $ 361 , respectively.
+Added: (D) Employee separation related costs for the year ended December 31, 2023 related to SG&A and D&D were $ 1,122 and $ 15 , respectively.
+Added: Severance costs for the years ended December 31, 2022 and 2021 related to SG&A were $ 190 and $ 1,138 , respectively.
+Added: STONERIDGE, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (in thousands, except share and per share data, unless otherwise indicated)
Business realignment charges classified by statement of operations line item were as follows:
4 unchanged sentences
Total business realignment charges $ 4,510 $ 288 $ 1,392
−Removed: STONERIDGE, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except share and per share data, unless otherwise indicated)
Segment Reporting
7 unchanged sentences
The Company’s management evaluates the performance of its reportable segments based primarily on revenues from external customers, capital expenditures and operating income.
−Removed: Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.
+Added: Inter-segment sales are eliminated upon consolidation.
The financial information presented below is for our three reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable.
24 unchanged sentences
( 32,509 ) ( 29,260 ) ( 28,015 )
−Removed: Total operating income (loss) $ 2,935 $ 15,411 $ ( 7,664 )
+Added: Total operating income $ 12,836 $ 2,935 $ 15,411
Depreciation and Amortization:
47 unchanged sentences
(C) Assets located at Corporate consist primarily of cash, intercompany receivables, fixed and leased assets for the headquarter building, information technology assets, equity investments and investments in subsidiaries.
−Removed: Subsequent Events
−Removed: Credit Facility Amendment
−Removed: On March 1, 2023, the Company entered into Amendment No.
−Removed: 4 to the Credit Facility.
−Removed: Refer to Note 5 of the consolidated financial statements for details regarding this amendment.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
18 unchanged sentences
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.