Full-Year & Q4 2024 Results February 27, 2025 stoneridge.com © 2025 Full-Year & Q4 2024 Results Non-GAAP Financial Measures This presentation contains information about the Company's financial results that is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this presentation. The provision of these non-GAAP financial measures for 2024 and 2023 is not ...

Financial Data and Key Metrics Changes - In 2024, Stoneridge's sales reached $908.3 million, outperforming the weighted average OEM end markets by 490 basis points despite a 10.4% decline in those markets [11][16] - The company achieved a free cash flow of approximately $24 million, an increase of $56 million compared to the previous year, driven by a $36 million reduction in inventory [9][46] - Full year adjusted EBITDA margin declined by approximately 80 basis points compared to the prior year, with a decremental contribution margin of just 19% versus the historical average of 25% to 30% [15][16] Business Line Data and Key Metrics Changes - MirrorEye revenue increased by 22% year over year, driven by the launch of a program with Volvo in Europe, contributing $66 million in total revenue for 2024 [11][17] - Smart 2 Tachograph revenue reached just under $60 million for the full year, with sales almost doubling relative to 2023 [12][41] - Control Devices full year sales declined by approximately 14% to $296.3 million, primarily due to lower production volumes for a major North American passenger vehicle customer [38] Market Data and Key Metrics Changes - The commercial vehicle end markets saw a 24% decline in Europe and a 2.5% decline in North America [41] - Stoneridge Brazil's full year sales were approximately $50.1 million, declining year over year due to macroeconomic challenges in South America [45] Company Strategy and Development Direction - The company is focused on improving operational performance, cash flow, and quality-related costs, with a significant emphasis on material cost improvements and structural cost reductions [10][15] - Stoneridge plans to launch additional MirrorEye programs in North America with Volvo and Daimler Truck, expecting over $50 million of additional growth for MirrorEye in 2025 [12][24] - The company is also expanding its core technology and product areas, particularly in trailer connectivity, to drive long-term growth [27][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the macroeconomic environment but expressed confidence in the company's ability to navigate these challenges through strategic initiatives [7][9] - The company expects continued success with MirrorEye and Smart 2 Tachograph in 2025, with revenue growth projections for MirrorEye reaching approximately $120 million [24][53] - Management highlighted the importance of quality improvements and operational efficiency as key priorities for 2025 [10][15] Other Important Information - The company amended its existing credit facility to provide financial covenant relief through the third quarter of 2025, ensuring ample liquidity and flexibility [47][48] - Stoneridge updated its long-term revenue targets, projecting nearly triple revenue by 2029 to almost $300 million annually [25][64] Q&A Session Summary Question: Can you unpack the unexpected engineering and quality costs in Q4? - Management explained that engineering costs were influenced by customer reimbursements tied to program development hurdles, with good visibility for 2025 [74][76] - Quality-related costs were attributed to ongoing improvements in processes, with a focus on minimizing future quality issues [77][80] Question: What are the growth expectations for Smart 2 Tachograph? - Management indicated that revenue from Smart 2 is expected to remain stable, with opportunities for market share expansion in the aftermarket [90][91] Question: How will inventory and working capital be managed moving into 2026? - Management expressed confidence in continued improvement in inventory management, expecting no significant build in working capital despite potential growth [92][94]

Core Points - Stoneridge, Inc. has entered a three-year agreement with NRG Energy's Direct Energy to meet 100% of the electricity needs for its Lexington, Ohio manufacturing facility through renewable energy certificates (RECs) [1][2] - The initiative is expected to generate over 13,000 megawatt hours (MWh) of carbon-free electricity annually, equivalent to removing approximately 13.5 million pounds of CO₂ from the atmosphere each year [2] - Stoneridge is also sourcing green or low-carbon energy at its global operations in Manaus, Brazil; Tallinn, Estonia; and Örebro, Sweden, demonstrating a broader commitment to sustainability [3] Company Overview - Stoneridge, Inc. is headquartered in Novi, Michigan, and specializes in designing and manufacturing highly engineered electrical and electronic systems, components, and modules for various vehicle markets, including automotive, commercial, off-highway, and agricultural [4]

Financial Performance - Fourth quarter sales were $218.2 million, with a gross profit of $42.7 million (19.5% of sales) and adjusted gross profit of $43.1 million (19.7% of sales) [3] - Full-year sales reached $908.3 million, with a gross profit of $189.3 million (20.8% of sales) and adjusted gross profit of $189.8 million (20.9% of sales) [4] - The company reported a net loss of $(6.1) million for Q4 2024 and an adjusted net loss of $(5.0) million [3] - Net sales for 2024 were $908.3 million, a decrease of 6.9% compared to $975.8 million in 2023 [32] - The net loss for 2024 was $16.5 million, compared to a net loss of $5.2 million in 2023, reflecting a significant increase in losses [32] - Adjusted operating income for 2024 was a loss of $0.4 million, down from an operating income of $12.8 million in 2023 [32] - Adjusted EBITDA for Q4 2024 was $6.0 million (2.7% of sales) [3] - Adjusted EBITDA for Q4 2024 was $5.5 million, with a full-year adjusted EBITDA of $35.1 million, compared to Q4 2023 adjusted EBITDA of $15.6 million and full-year 2023 adjusted EBITDA of $48.1 million [35] - Adjusted gross profit for Q4 2024 was $43.1 million, down from $45.7 million in Q4 2023, while full-year adjusted gross profit decreased to $189.8 million from $202.1 million [36] - The operating loss for Q4 2024 was $(4.4) million, with an adjusted operating income of $(4.0) million for the full year, compared to an operating income of $6.0 million in Q4 2023 [37] Cash Flow and Liquidity - Positive free cash flow of approximately $24 million was achieved, an increase of approximately $56 million compared to the previous year, driven by a $36 million reduction in inventory [6] - Free cash flow for 2024 was $47.7 million, a substantial increase compared to $4.9 million in 2023, indicating better cash management [33] - Cash and cash equivalents increased to $71.8 million in 2024 from $40.8 million in 2023, indicating improved liquidity [31] - Total Cash and Cash Equivalents are expected to rise from $54.1 million in Q3 2024 to $71.8 million in Q4 2024 [50] Debt and Leverage - As of December 31, 2024, cash and cash equivalents totaled $71.8 million, with adjusted net debt at $147.9 million [14][15] - The company aims for a compliance net debt to EBITDA leverage ratio of 2.0x to 2.5x by the end of 2025 [17] - The company’s total liabilities increased to $376.3 million in 2024 from $392.2 million in 2023, reflecting changes in debt structure [31] - Compliance Leverage Ratio (Net Debt / TTM EBITDA) is projected to rise from 2.79x in Q3 2024 to 3.08x in Q4 2024, remaining below the maximum requirement of 3.50x [50] - Total Debt is expected to increase from $196.3 million in Q3 2024 to $201.6 million in Q4 2024 [50] - Total Adjusted Debt (Compliance) is projected to increase from $197.9 million in Q3 2024 to $203.1 million in Q4 2024 [50] Future Guidance - The company established 2025 revenue guidance of $875 million and EBITDA guidance of $40 million [1] - The 2026 revenue target is set at least $975 million, with an EBITDA target of at least $70 million (7.2% of sales) [4] - MirrorEye® is expected to contribute over $50 million in incremental revenue in 2025, with total expected revenue for 2025 ranging from $860 million to $890 million [4] Operational Challenges - The company faced challenges including fluctuations in material costs and geopolitical risks, which may impact future performance [26] - The company incurred after-tax business realignment costs of $0.3 million in Q4 2024 and $2.5 million for the full year 2024 [34] Segment Performance - The electronics segment reported an adjusted operating income of $5.3 million in Q4 2024, down from $11.0 million in Q4 2023, while full-year adjusted operating income decreased to $27.9 million from $30.2 million [41] - Control devices segment showed an adjusted operating income of $(1.6) million in Q4 2024, compared to $0.9 million in Q4 2023, with full-year adjusted operating income at $6.6 million [39]

Core Insights - Stoneridge, Inc. reported a net cash improvement of approximately $43 million year-over-year, primarily driven by a $36 million reduction in inventory [1][14] - The company established a midpoint revenue guidance for 2025 at $875 million and an EBITDA guidance of $40 million [1][19] - For 2026, Stoneridge targets revenue of at least $975 million and EBITDA of at least $70 million [1][19] Financial Performance - Fourth quarter sales reached $218.2 million, with a gross profit of $42.7 million (19.5% of sales) and an adjusted gross profit of $43.1 million (19.7% of sales) [3][4] - The operating loss for the fourth quarter was $(4.4) million, resulting in an adjusted operating loss of $(4.0) million [3][4] - The full-year sales totaled $908.3 million, with a gross profit of $189.3 million (20.8% of sales) and an adjusted EBITDA of $37.9 million (4.2% of sales) [4][11] Operational Highlights - The company focused on improving fundamentals to counteract market pressures, achieving a 120-basis point improvement in material costs and a 30-basis point improvement in direct labor costs [6] - Positive free cash flow of approximately $24 million was generated, an increase of about $56 million compared to the previous year, largely due to inventory management [6][14] - The Electronics segment saw fourth quarter sales of $149.4 million, a 1.8% increase year-over-year, driven by new program launches [7] Market Outlook - Stoneridge anticipates a decline of approximately 3.8% in OEM market volume for 2025 [19] - The company expects MirrorEye to contribute over $50 million in incremental revenue in 2025, with total expected revenue for the year ranging from $860 million to $890 million [19] - For 2026, the company projects a revenue target of at least $975 million, supported by a 7.4% growth in weighted-average end markets [19] Cash and Debt Management - As of December 31, 2024, Stoneridge had cash and cash equivalents of $71.8 million, with net cash provided by operating activities amounting to $47.7 million [14][15] - The company amended its credit facility to provide financial covenant relief, adjusting leverage ratios for the upcoming quarters [16][17] - Stoneridge aims to achieve a compliance net debt to EBITDA leverage ratio of 2.0x to 2.5x by the end of 2025 [17]

Company Overview - Stoneridge, Inc. is headquartered in Novi, Michigan and is a global supplier of electronic systems and technologies that enhance vehicle intelligence and ensure safety and security in transportation sectors [2]. Upcoming Events - Stoneridge, Inc. will host a live webcast of its fourth quarter 2024 earnings conference call on February 27, 2025, at 9:00 a.m. ET, featuring CEO Jim Zizelman and CFO Matt Horvath [1]. - The webcast will be accessible on the Presentations & Events page of the Investors section of the company's website [1].

Core Insights - Sparton Resources has announced positive developments in its investment in VRB Energy, following the signing of definitive agreements with Shanxi Red Sun Co., Ltd. and affiliates, finalizing previously announced transaction terms [1] Group 1: Company Developments - VRB Energy has successfully passed strict quality inspections for its flow battery systems, with a unit shipped to a customer in Okinawa, Japan, marking its entry into the global market for standardized products ranging from 100kW to 1000kW configurations [2] - The collaboration between Red Sun and VRB Energy has led to rapid advancements in the joint venture, showcasing effective execution and technological integration [3] - Sparton holds a 9.98% interest in VRB Energy through a 90% stake in VanSpar Mining Inc., translating to an indirect 4.4% interest in the joint venture [4] Group 2: Project Timeline - On October 15, 2024, definitive agreements for the formation of the VRB China joint venture were signed [6] - A groundbreaking ceremony for a 3GWh capacity vanadium flow battery manufacturing base took place on October 18, 2024, in Changzi, Shanxi Province, China [6] - A strategic cooperation agreement with Huadian Group was announced on December 11, 2024, which includes the development of a 10 MWh storage project in Hunan Province [6] - Initial production was achieved in the first phase of the new facility in Changzi on December 25, 2024 [6] - VRB China has entered into a joint venture with Chengde Vanadium Titanium Co., Ltd., ensuring a stable supply of vanadium resources for future projects [6]

Core Viewpoint - Sparton Resources Inc. has made significant progress in its mining operations, particularly with the Pense Critical Metals Project, confirming the presence of critical metals and gold mineralization, while also advancing its joint venture with VRB Energy in battery manufacturing in China [1][2][12]. Group 1: Pense Project Developments - The company has exercised its option to acquire a 100% interest in the Pense Property, which is located in northeastern Ontario [2][3]. - Recent drilling results from four diamond drill holes totaling 822 meters have confirmed the presence of critical metals, including significant values of zinc, gold, copper, and nickel [4][5][6]. - Hole P24-01 intersected a 38-meter mineralized zone with notable values: 1.73% zinc over 19.7 meters, 0.81g/t gold over 8.2 meters, and 0.14% copper over 27.7 meters [4][6]. Group 2: Historical Context and Future Potential - Historical drilling in the area has reported interesting values of critical metals, indicating the potential for further exploration and development [6][7]. - The mineralization at Pense is characterized by massive to semi-massive sulphide mineralization, suggesting a rich geological environment that warrants continued drilling [9][10]. - The presence of significant gold mineralization is highlighted as an added feature for the critical metals opportunity, especially with current gold prices at all-time highs [12]. Group 3: VRB Energy Developments - VRB Energy Inc. is advancing its operations in the United States and has established a joint venture in China aimed at reducing corporate energy consumption and promoting renewable energy development [15][16]. - The joint venture includes a strategic cooperation agreement in Guzhang County, Yunnan Province, focusing on vanadium battery energy storage and high-performance electrolytes [15]. - The collaboration with a Chinese partner is seen as a catalyst for generating new sales of storage units in China and other regions [16].

Core Insights - Stoneridge, Inc. will participate in the Stephens Annual Investment Conference on November 19, 2024, featuring a fireside chat with key executives [1] - The company will showcase its Innovation Truck, highlighting advanced technologies in vision systems, cockpit design, and connected trailer capabilities [2] Group 1: Innovation Truck Features - The Innovation Truck aims to redefine commercial driving with advanced touchscreen displays and driver assistance technologies, enhancing visibility and safety [3] - Key features include: - MirrorEye® camera monitor system for eliminating blind spots [3] - Integrated Driver Assistance Technologies using AI and machine learning for real-time hazard awareness [3] - Intelligent Connected Trailer System providing real-time insights into trailer and cargo conditions [3] - Enhanced Cockpit Displays with 360-degree visibility and adaptive views based on driving maneuvers [3] - Multi-Feature Camera Wing for improved safety during dark conditions [3] Group 2: Vision and Commitment - The company's vision for the future cockpit focuses on reducing driver stress and enhancing safety during challenging maneuvers [4] - Stoneridge continues to invest in advanced vehicle safety, efficiency, emissions reduction, and driver comfort [4] Group 3: Company Overview - Stoneridge, Inc. is a global designer and manufacturer of engineered electrical and electronic systems for various vehicle markets, including automotive and commercial [5]

Q3 2024 Results October 31, 2024 stoneridge.com © 2024 Q3 2024 Results Forward-Looking Statements Statements in this presentation that are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. Important factors that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the ability of our suppl ...