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    SEC Form 10-Q filed by Stoneridge Inc.

    4/30/25 5:22:26 PM ET
    $SRI
    Auto Parts:O.E.M.
    Consumer Discretionary
    Get the next $SRI alert in real time by email
    sri-20250331
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    Table of Contents
    UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549
    FORM 10-Q
    x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarter ended March 31, 2025
    or
    o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    Commission file number: 001-13337
    999.jpg
    STONERIDGE, INC
    (Exact name of registrant as specified in its charter)
    Ohio34-1598949
    (State or other jurisdiction of
    incorporation or organization)
    (I.R.S. Employer
    Identification No.)
    39675 MacKenzie Drive, Suite 400, Novi, Michigan
    48377
    (Address of principal executive offices)(Zip Code)
    (248) 489-9300
    Registrant’s telephone number, including area code
    Securities registered pursuant to Section 12(b) of the Act:
    Title of each classTrading Symbol(s)Name of each exchange on which registered
    Common Shares, without par value
    SRI
    New York Stock Exchange
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
    xYes oNo
    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
    xYes oNo
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
    Large accelerated filer o
    Accelerated filer x
    Non-accelerated filer o
    Smaller reporting company o
    Emerging growth company o
    If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period     for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). oYes xNo
    The number of Common Shares, without par value, outstanding as of April 25, 2025 was 27,846,292.


    Table of Contents
    STONERIDGE, INC. AND SUBSIDIARIES
    INDEXPage
    PART I–FINANCIAL INFORMATION
    Item 1.
    Financial Statements
    Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024
    4
    Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2025 and 2024
    5
    Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three Months Ended March 31, 2025 and 2024
    6
    Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2025 and 2024
    7
    Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the Three Months Ended March 31, 2025 and 2024
    8
    Notes to Condensed Consolidated Financial Statements (Unaudited)
    9
    Item 2.
    Management’s Discussion and Analysis of Financial Condition and Results of Operations
    24
    Item 3.
    Quantitative and Qualitative Disclosures About Market Risk
    31
    Item 4.
    Controls and Procedures
    31
    PART II–OTHER INFORMATION
    Item 1.
    Legal Proceedings
    32
    Item 1A.
    Risk Factors
    32
    Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds
    32
    Item 3.
    Defaults Upon Senior Securities
    32
    Item 4.
    Mine Safety Disclosures
    32
    Item 5.
    Other Information
    32
    Item 6.
    Exhibits
    33
    Signatures
    34
    2

    Table of Contents
    Forward-Looking Statements
    Portions of this report on Form 10-Q contain “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this report and may include statements regarding the intent, belief or current expectations of the Company, with respect to, among other things, our (i) future product and facility expansion, (ii) acquisition strategy, (iii) investments and new product development, (iv) growth opportunities related to awarded business and (v) operational expectations. Forward-looking statements may be identified by the words “will,” “may,” “should,” “designed to,” “believes,” “plans,” “projects,” “intends,” “expects,” “estimates,” “anticipates,” “continue,” and similar words and expressions. The forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by these statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among other factors:
    •the ability of our suppliers to supply us with parts and components at competitive prices on a timely basis, including the impact of potential tariffs and trade considerations on their operations and output;
    •fluctuations in the cost and availability of key materials and components (including semiconductors, printed circuit boards, resin, aluminum, steel and copper) and our ability to offset cost increases through negotiated price increases with our customers or other cost reduction actions, as necessary;
    •global economic trends, competition and geopolitical risks, including impacts from ongoing or potential global conflicts and any related sanctions and other measures, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and other countries;
    •tariffs specifically in countries where we have significant direct or indirect manufacturing or supply chain exposure and our ability to either mitigate the impact of tariffs or pass any incremental costs to our customers;
    •our ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions;
    •the reduced purchases, loss, financial distress or bankruptcy of a major customer or supplier;
    •the costs and timing of business realignment, facility closures or similar actions;
    •a significant change in commercial, automotive, off-highway or agricultural vehicle production;
    •competitive market conditions and resulting effects on sales and pricing;
    •foreign currency fluctuations and our ability to manage those impacts;
    •customer acceptance of new products;
    •our ability to successfully launch/produce products for awarded business;
    •adverse changes in laws, government regulations or market conditions affecting our products, our suppliers, or our customers’ products;
    •our ability to protect our intellectual property and successfully defend against assertions made against us;
    •liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers;
    •labor disruptions at our facilities, or at any of our significant customers or suppliers;
    •business disruptions due to natural disasters or other disasters outside of our control;
    •the amount of our indebtedness and the restrictive covenants contained in the agreements governing our indebtedness, including our revolving Credit Facility;
    •capital availability or costs, including changes in interest rates;
    •the failure to achieve the successful integration of any acquired company or business;
    •risks related to a failure of our information technology systems and networks, and risks associated with current and emerging technology threats and damage from computer viruses, unauthorized access, cyber-attack and other similar disruptions; and
    •the items described in Part I, Item IA (“Risk Factors”) in the Company’s 2024 Form 10-K.
    The forward-looking statements contained herein represent our estimates only as of the date of this filing and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, whether to reflect actual results, changes in assumptions, changes in other factors affecting such forward-looking statements or otherwise.
    3

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    PART I – FINANCIAL INFORMATION
    Item 1. Financial Statements
    STONERIDGE, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands)March 31,
    2025
    December 31,
    2024
    (Unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents$79,109 $71,832 
    Accounts receivable, less reserves of $699 and $1,060, respectively
    156,683 137,766 
    Inventories, net151,794 151,337 
    Prepaid expenses and other current assets30,435 26,579 
    Total current assets418,021 387,514 
    Long-term assets:
    Property, plant and equipment, net99,289 97,667 
    Intangible assets, net41,260 39,677 
    Goodwill34,610 33,085 
    Operating lease right-of-use asset9,607 10,050 
    Investments and other long-term assets, net54,572 53,563 
    Total long-term assets239,338 234,042 
    Total assets$657,359 $621,556 
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Accounts payable$97,037 $83,478 
    Accrued expenses and other current liabilities78,127 66,494 
    Total current liabilities175,164 149,972 
    Long-term liabilities:
    Revolving credit facility203,186 201,577 
    Deferred income taxes5,344 5,321 
    Operating lease long-term liability6,186 6,484 
    Other long-term liabilities14,383 12,942 
    Total long-term liabilities229,099 226,324 
    Shareholders' equity:
    Preferred Shares, without par value, 5,000 shares authorized, none issued
    — — 
    Common Shares, without par value, 60,000 shares authorized, 28,966 and 28,966 shares issued and 27,846 and 27,695 shares outstanding at March 31, 2025 and December 31, 2024, respectively, with no stated value
    — — 
    Additional paid-in capital221,130 225,712 
    Common Shares held in treasury, 1,120 and 1,271 shares at March 31, 2025 and December 31, 2024, respectively, at cost
    (32,936)(38,424)
    Retained earnings172,789 179,985 
    Accumulated other comprehensive loss(107,887)(122,013)
    Total shareholders' equity253,096 245,260 
    Total liabilities and shareholders' equity$657,359 $621,556 
    The accompanying notes are an integral part of these condensed consolidated financial statements.
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    STONERIDGE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
    Three months ended
    March 31,
    (in thousands, except per share data)20252024
    Net sales$217,890 $239,157 
    Costs and expenses:
    Cost of goods sold171,593 190,800 
    Selling, general and administrative31,696 30,423 
    Design and development17,826 17,603 
    Operating (loss) income(3,225)331 
    Interest expense, net3,167 3,634 
    Equity in (earnings) loss of investee(294)277 
    Other (income) expense, net(466)2,036 
    Loss before income taxes(5,632)(5,616)
    Provision for income taxes1,564 510 
    Net loss$(7,196)$(6,126)
    Loss per share:
    Basic$(0.26)$(0.22)
    Diluted$(0.26)$(0.22)
    Weighted-average shares outstanding:
    Basic27,68027,529
    Diluted27,68027,529
    The accompanying notes are an integral part of these condensed consolidated financial statements.
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    STONERIDGE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
    (Unaudited)
    Three months ended
    March 31,
    (in thousands)20252024
    Net loss$(7,196)$(6,126)
    Other comprehensive income (loss), net of tax:
    Foreign currency translation12,783 (4,879)
    Unrealized gain on derivatives (1)1,343 70 
    Other comprehensive income (loss), net of tax 14,126 (4,809)
    Comprehensive income (loss) $6,930 $(10,935)
    (1)
    Net of tax expense of $357 and $19 for the three months ended March 31, 2025 and 2024, respectively.
    The accompanying notes are an integral part of these condensed consolidated financial statements.
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    STONERIDGE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    Three months ended March 31, (in thousands)20252024
    OPERATING ACTIVITIES:
    Net loss$(7,196)$(6,126)
    Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
    Depreciation5,428 6,601 
    Amortization, including accretion of deferred financing costs2,054 2,164 
    Deferred income taxes(402)(2,279)
    (Earnings) loss of equity method investee(294)277 
    Loss on sale of fixed assets4 266 
    Share-based compensation expense1,136 1,092 
    Excess tax deficiency related to share-based compensation expense440 230 
    Changes in operating assets and liabilities:
    Accounts receivable, net(14,610)(6,676)
    Inventories, net5,263 3,699 
    Prepaid expenses and other assets(1,379)1,377 
    Accounts payable10,792 (709)
    Accrued expenses and other liabilities9,661 9,193 
    Net cash provided by operating activities10,897 9,109 
    INVESTING ACTIVITIES:
    Capital expenditures, including intangibles(6,070)(5,795)
    Proceeds from sale of fixed assets82 81 
    Net cash used for investing activities(5,988)(5,714)
    FINANCING ACTIVITIES:
    Revolving credit facility borrowings— 30,500 
    Revolving credit facility payments— (24,500)
    Proceeds from issuance of debt6,699 7,798 
    Repayments of debt(7,260)(7,790)
    Repurchase of Common Shares to satisfy employee tax withholding(226)(620)
    Net cash (used for) provided by financing activities(787)5,388 
    Effect of exchange rate changes on cash and cash equivalents3,155 (1,184)
    Net change in cash and cash equivalents7,277 7,599 
    Cash and cash equivalents at beginning of period71,832 40,841 
    Cash and cash equivalents at end of period$79,109 $48,440 
    Supplemental disclosure of cash flow information:
    Cash paid for interest, net$3,309 $4,194 
    Cash paid for income taxes, net$1,852 $2,653 
    The accompanying notes are an integral part of these condensed consolidated financial statements.
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    STONERIDGE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
    (Unaudited)
    (in thousands)Number of
    Common
    Shares
    outstanding
    Number of
     treasury
    shares
    Additional
    paid-in
    capital
    Common
    Shares held
    in treasury
    Retained
    earnings
    Accumulated
    other
    comprehensive
    loss
    Total
    shareholders'
    equity
    BALANCE DECEMBER 31, 202327,5491,417$227,340 $(43,344)$196,509 $(92,788)$287,717 
    Net loss——— — (6,126)— (6,126)
    Unrealized gain on derivatives, net——— — — 70 70 
    Currency translation adjustments——— — — (4,879)(4,879)
    Issuance of Common Shares154(154)— — — — — 
    Repurchased Common Shares for treasury, net(36)36— 3,958 — — 3,958 
    Share-based compensation, net——(3,484)— — — (3,484)
    BALANCE MARCH 31, 202427,6671,299$223,856 $(39,386)$190,383 $(97,597)$277,256 
    BALANCE DECEMBER 31, 2024
    27,6951,271$225,712 $(38,424)$179,985 $(122,013)$245,260 
    Net loss——— — (7,196)— (7,196)
    Unrealized gain on derivatives, net——— — — 1,343 1,343 
    Currency translation adjustments——— — — 12,783 12,783 
    Issuance of Common Shares192(192)— — — — — 
    Repurchased Common Shares for treasury, net(41)41— 5,488 — — 5,488 
    Share-based compensation, net——(4,582)— — — (4,582)
    BALANCE MARCH 31, 202527,8461,120$221,130 $(32,936)$172,789 $(107,887)$253,096 
    The accompanying notes are an integral part of these condensed consolidated financial statements.
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    (1) Basis of Presentation
    The accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s 2024 Form 10-K.
    Reclassifications
    Certain prior period amounts have been reclassified to conform to their 2025 presentation in the condensed consolidated financial statements.
    (2) Recently Issued Accounting Standards
    Accounting Standards Not Yet Adopted
    In December 2023, the FASB issued ASU No. 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. In addition, companies are required to disclose additional information about income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be adopted on a prospective basis; however, retrospective application is permitted. This ASU will modify the Company's financial statement disclosures, but will
    not have a significant impact on its consolidated financial statements.

    In November 2024, the FASB issued ASU No. 2024-03, "Income Statement – Reporting Comprehensive Income – Expense
    Disaggregation Disclosures," which requires companies to disclose certain costs and expenses within the notes to the
    financial statements. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within
    fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact on our annual consolidated financial statement disclosures.
    (3) Revenue
    Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; 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. 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. Incidental items that are not significant in the context of the contract are recognized as expense. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold. Customer returns only occur if products do not meet the specifications of the contract and are not connected to any repurchase obligations of the Company.
    The Company does not have any financing components or significant payment terms as payment occurs shortly after the point of sale. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of operations. Shipping and handling costs associated with outbound freight after control over a product is transferred to the customer are accounted for as a fulfillment cost and are included in cost of sales.
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    Revenue by Reportable Segment
    Control Devices. Our Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle. This segment includes product lines such as actuators, sensors, switches and connectors. We sell these products principally to the automotive market in the North American and Asia Pacific regions. To a lesser extent, we also sell these products to the commercial vehicle and agricultural markets in the North American and Asia Pacific regions. Our customers included in these markets primarily consist of original equipment manufacturers (“OEM”) and companies supplying components directly to the OEMs (“Tier 1 supplier”).
    Electronics. Our Electronics segment designs and manufactures advanced driver information solutions, vision systems, connectivity and compliance solutions and control modules. 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. Our vision and safety systems are sold principally to the commercial vehicle and off-highway vehicle markets in the European and North American regions.
    Stoneridge Brazil. 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, driver information systems, vehicle security alarms and convenience accessories, telematics solutions and multimedia devices. 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.
    The following tables disaggregate our revenue by reportable segment and geographical location(1) for the three months ended March 31, 2025 and 2024:
    Control DevicesElectronicsStoneridge BrazilConsolidated
    Three months ended March 31,20252024202520242025202420252024
    Net Sales:
    North America$58,322 $65,822 $42,769 $52,294 $— $— $101,091 $118,116 
    South America— — — — 14,274 12,216 14,274 12,216 
    Europe— — 91,043 96,374 — — 91,043 96,374 
    Asia Pacific10,511 11,336 971 1,115 — — 11,482 12,451 
    Total net sales$68,833 $77,158 $134,783 $149,783 $14,274 $12,216 $217,890 $239,157 
    _______________________
    (1)Company sales based on geographic location are where the sale originates not where the customer is located.



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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    Performance Obligations
    For OEM and Tier 1 supplier customers, the Company typically enters into contracts to provide serial production parts that consist of a set of documents including, but not limited to, an award letter, master purchase agreement and master terms and conditions. For each production product, the Company enters into separate purchase orders that contain the product specifications and an agreed-upon price. The performance obligation does not exist until a customer release is received for a specific number of parts. 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 mostly 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. For most customer contracts, the Company does not have an enforceable right to payment at any time prior to when the parts are shipped or delivered to the customer; therefore, the Company recognizes revenue at the point in time it satisfies a performance obligation by transferring control of a part to the customer. 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.
    Our aftermarket products including accessories and replacement parts are focused on meeting the demand for safety, compliance and entertainment applications and are sold primarily to aftermarket distributors in our South American and European markets, as well as direct to aftermarket customers in North America. Aftermarket products have one type of performance obligation, which is the delivery of aftermarket parts and spare parts. For aftermarket customers, the Company typically has standard terms and conditions for all customers. In addition, aftermarket products have alternative use as they can be sold to multiple customers. Revenue for aftermarket part production contracts is recognized at a point in time when the control of the parts transfers to the customer, which is based on the shipping terms. Aftermarket contracts may include variable consideration related to discounts and rebates, which is 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. These monitoring service contracts are generally not capable of being distinct and are accounted for as a single performance obligation. We recognize revenue for our monitoring products and services contracts over the life of the contract. There is no variable consideration associated with these contracts. The Company has the right to consideration from a customer in the amount that corresponds directly with the value to the customer of the Company’s performance to date. Therefore, the Company recognizes revenue over time using the practical expedient ASC 606-10-55-18 in the amount the Company has a “right to invoice” rather than selecting an output or input method.
    Contract Balances
    The Company had no material contract assets, contract liabilities or capitalized contract acquisition costs as of March 31, 2025 and December 31, 2024.
    (4) Inventories
    Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consist of the following:
    March 31,
    2025
    December 31,
    2024
    Raw materials$108,452 $108,283 
    Work-in-progress8,391 7,627 
    Finished goods34,951 35,427 
    Total inventories, net$151,794 $151,337 
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    Inventory valued using the FIFO method was $137,871 and $138,420 at March 31, 2025 and December 31, 2024, respectively. Inventory valued using the average cost method was $13,923 and $12,917 at March 31, 2025 and December 31, 2024, respectively.
    (5) Financial Instruments and Fair Value Measurements
    Financial Instruments
    A financial instrument is cash or a contract that imposes an obligation to deliver or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The fair value of debt approximates the carrying value of debt, due to the variable interest rate on our Credit Facility and the maturity of outstanding debt.
    Derivative Instruments and Hedging Activities
    On March 31, 2025, the Company had open Mexican peso-denominated foreign currency forward contracts. The Company used foreign currency forward contracts solely for hedging and not for speculative purposes during 2025 and 2024. Management believes that its use of these instruments to reduce risk is in the Company’s best interest. The counterparties to these financial instruments are financial institutions with investment grade credit ratings.
    Foreign Currency Exchange Rate Risk
    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 condensed consolidated statements of operations within other (income) expense, net. These foreign currency transaction (gains) losses, including the impact of hedging activities, were $(432) and $1,944 for the three months ended March 31, 2025 and 2024, respectively.
    The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk. The Company uses derivative financial instruments as cash flow 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.
    Cash Flow Hedges
    The Company entered into foreign currency forward contracts to hedge the Mexican peso currency in 2025 and 2024. These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges. As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive loss, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated other comprehensive loss fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. The cash flow hedges were highly effective. The effectiveness of the transactions was measured using regression analysis and forecasted future purchases of the currency.
    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 condensed consolidated statements of operations as a component of other (income) expense, net. At March 31, 2025, 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:
    Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges
    The Company holds Mexican peso-denominated foreign currency forward contracts with a notional amount at March 31, 2025 of $23,257, which expire ratably on a monthly basis from April 2025 to December 2025. The notional amounts at December 31, 2024 related to Mexican peso-denominated foreign currency forward contracts were $32,339.
    The Company evaluated the effectiveness of the Mexican peso denominated forward contracts held as of March 31, 2025 and concluded that the hedges were highly effective.
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows:
    Notional amounts (A)
    Accrued expenses and
    other current liabilities
    March 31,
    2025
    December 31,
    2024
    March 31,
    2025
    December 31,
    2024
    Derivatives designated as hedging instruments:
    Cash flow hedges:
    Forward currency contracts$23,257 $32,339 $729 $2,429 
    _____________________________
    (A)Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars.
    Gross amounts recorded for the cash flow hedges in other comprehensive income (loss) and in net loss for the three months ended March 31 were as follows:
    Gain recorded in other
    comprehensive income (loss)
    (Loss) gain reclassified from
    other comprehensive income
    (loss) into net loss (A)
    2025202420252024
    Derivatives designated as cash flow hedges:
    Forward currency contracts$1,103 $743 $(597)$654 
    _____________________________
    (A)
    (Losses) gains reclassified from other comprehensive income (loss) into net loss recognized in selling, general and administrative expenses (“SG&A”) in the Company’s condensed consolidated statements of operations were $0 and $117 for the three months ended March 31, 2025 and 2024, respectively. (Losses) gains reclassified from other comprehensive income (loss) into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $(597) and $537 for the three months ended March 31, 2025 and 2024, respectively.
    Cash flows from derivatives used to manage foreign currency exchange risks are classified as operating activities within the condensed consolidated statements of cash flows.
    Fair Value Measurements
    Certain assets and liabilities held by the Company are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of the inputs used. Fair values estimated using Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Fair values estimated using Level 2 inputs, other than quoted prices, are observable for the asset or liability, either directly or indirectly and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward currency and cross-currency contracts, inputs include forward foreign currency exchange rates. Fair values estimated using Level 3 inputs consist of significant unobservable inputs.
    The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used.
    March 31,
    2025
    December 31,
    2024
    Fair values estimated using
    Fair
    value
    Level 1
    inputs
    Level 2
    inputs
    Level 3
    inputs
    Fair
    value
    Financial liabilities carried at fair value:
    Forward currency contracts$729 $— $729 $— $2,429 
    Total financial liabilities carried at fair value$729 $— $729 $— $2,429 
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the three months ended March 31, 2025.
    (6) Share-Based Compensation
    Compensation expense for share-based compensation arrangements, which is recognized in the condensed consolidated statements of operations as a component of SG&A expense, was $1,136 and $1,092 for the three months ended March 31, 2025 and 2024, respectively.
    (7) Debt
    Debt consisted of the following at March 31, 2025 and December 31, 2024:
    March 31,
    2025
    December 31,
    2024
    Interest rates at March 31, 2025Maturity
    Revolving Credit Facility
    Revolving Credit Facility$203,186 $201,577 6.44 %November 2026
    Revolving Credit Facility
    On November 2, 2023, the Company entered into the Fifth Amended and Restated Credit Agreement (the “Credit Facility”). 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. 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. The Credit Facility has a termination date of November 2, 2026. 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.
    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. 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. 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.
    On February 26, 2025, the Company entered into Amendment No. 1 to the Fifth Amended and Restated Credit Agreement
    and Waiver (“Amendment No. 1”). Amendment No. 1 provides for certain covenant relief and restrictions during the
    “Covenant Relief Period” (the period ending on the date that the Company delivers a compliance certificate for the quarter
    ending December 31, 2025). During the Covenant Relief Period:
    •the maximum leverage ratio of 3.50 was increased to 6.00 for the quarter ended March 31, 2025, 5.50 for the quarter ended June 30, 2025, 4.50 for the quarter ended September 30, 2025 and 3.50 for the quarter ended December 31, 2025;
    •the minimum interest coverage ratio of 3.50 was waived for the quarter ended December 31, 2024 and was reduced to 2.00 for the quarters ended March 31 and June 30, 2025, and 2.50 and 3.50 for the quarter ended September 30, 2025 and December 31, 2025, respectively;
    14

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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    •the Company’s aggregate amount of cash and cash equivalents, defined as 100% of North American and 65% of foreign cash balances, cannot exceed $70,000;
    •the sale of significant assets (as defined) will require repayment in the amount of any net cash proceeds received and result in the reduction of the Credit Facility commitment, at the lesser of $100,000 or the net cash proceeds;
    •there were certain restrictions on Restricted Payments (as defined); and
    •a Permitted Acquisition (as defined) could not be consummated unless otherwise approved in writing by the required lenders.

    Amendment No. 1 added an additional level to the leverage ratio based pricing grid, through maturity, when the leverage
    ratio is greater than 3.50.
    As a result of entering into Amendment No.1, the Company capitalized $561 of deferred financing costs during the three months ended March 31, 2025.
    Borrowings outstanding on the Credit Facility were $203,186 and $201,577 at March 31, 2025 and December 31, 2024, respectively.
    The Company was in compliance with all Credit Facility covenants at March 31, 2025 and December 31, 2024.
    The Company also has outstanding letters of credit of $1,506 at March 31, 2025 and $1,571 at December 31, 2024.
    Debt
    The Company’s wholly owned subsidiary located in Stockholm, Sweden (the "Stockholm subsidiary"), has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $1,993 and $1,809, at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025 and December 31, 2024, there were no borrowings outstanding on this overdraft credit line. During the three months ended March 31, 2025, the subsidiary borrowed and repaid 70,618 Swedish krona, or $7,036. 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.
    The Company’s wholly owned subsidiary located in Suzhou, China (the “Suzhou subsidiary”), had lines of credit (the “Suzhou credit line”) that matured in March 2025 and allowed up to a maximum borrowing level of 20,000 Chinese yuan, or $2,740 at December 31, 2024. At December 31, 2024 there was $0 in borrowings outstanding on the Suzhou credit line. In addition, the Suzhou subsidiary had a bank acceptance draft line of credit that expired in October 2024 which facilitated the extension of trade payable payment terms by 180 days. The bank acceptance draft line of credit allowed up to a maximum borrowing level of 60,000 Chinese yuan.
    (8) Loss Per Share
    Basic loss per share was computed by dividing net loss by the weighted-average number of Common Shares outstanding for each respective period. Diluted loss per share was calculated by dividing net loss by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. However, for all periods in which the Company recognized a net loss, the Company did not recognize the effect of the potential dilutive securities as their inclusion would be anti-dilutive. Potential dilutive shares of 136,118 and 298,592 for the three months ended March 31, 2025 and 2024, respectively, were excluded from diluted loss per share because the effect would be anti-dilutive.
    Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows:
    Three months ended
    March 31,
    20252024
    Basic weighted-average Common Shares outstanding27,679,92427,528,831
    Effect of dilutive shares——
    Diluted weighted-average Common Shares outstanding27,679,92427,528,831
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    There were 1,002,950 and 660,124 performance-based right to receive Common Shares outstanding at March 31, 2025 and 2024, respectively. The right to receive Common Shares are included in the computation of diluted earnings per share, to the extent they are not anti-dilutive, based on the number of Common Shares that would be issuable if the end of the quarter were the end of the performance period.
    (9) Accumulated Other Comprehensive (Loss) Income
    Changes in accumulated other comprehensive (loss) income for the three months ended March 31, 2025 and 2024 were as follows:
    Foreign
    currency
    translation
    Unrealized
    gain (loss)
    on derivatives
    Total
    Balance at January 1, 2025$(120,095)$(1,918)$(122,013)
    Other comprehensive income before reclassifications12,783 871 13,654 
    Amounts reclassified from accumulated other comprehensive loss— 472 472 
    Net other comprehensive income (loss), net of tax12,783 1,343 14,126 
    Balance at March 31, 2025$(107,312)$(575)$(107,887)
    Balance at January 1, 2024$(94,256)$1,468 $(92,788)
    Other comprehensive (loss) income before reclassifications(4,879)587 (4,292)
    Amounts reclassified from accumulated other comprehensive loss— (517)(517)
    Net other comprehensive (loss) income, net of tax(4,879)70 (4,809)
    Balance at March 31, 2024$(99,135)$1,538 $(97,597)
    (10) Commitments and Contingencies
    From time to time, we are subject to various legal actions and claims incidental to our business, including those arising out of breach of contracts, product warranties, product liability, patent infringement, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably estimated. 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.
    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. 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 three months ended March 31, 2025 and 2024, the Company did not recognize any expense related to groundwater remediation. At March 31, 2025 and December 31, 2024, the Company accrued $217 and $244, respectively, related to expected future remediation costs. At March 31, 2025 and December 31, 2024, $117 and $144, respectively, were recorded as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets while the remaining amounts as of March 31, 2025 and December 31, 2024 were recorded as a component of other long-term liabilities. Costs associated with the recorded liability will be incurred to complete the groundwater remediation and monitoring. 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.
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    The Company’s Stoneridge Brazil subsidiary has civil, labor, environmental 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. As a result, no provision has been recorded with respect to these contingencies, which amounted to R$48,631 ($8,470) and R$42,834 ($6,918) at March 31, 2025 and December 31, 2024, respectively. An unfavorable outcome on these contingencies could result in significant cost to the Company and adversely affect its results of operations and cash flows.
    On August 12, 2020, the Brazilian Administrative Counsel for Economic Defense (“CADE”) issued a ruling against Stoneridge Brazil for abuse of dominance and market foreclosure through its prior use of exclusivity provisions in agreements with its distributors. The CADE tribunal imposed a R$7,995 ($1,392) fine which is included in the reasonably possible contingencies noted above. The Company continues to challenge this ruling in Brazilian federal court to reverse this decision by the CADE tribunal.
    Long Term Supply Commitment
    In 2022, the Company entered into a long term supply agreement, as amended, with a supplier for the purchase of certain electronic semiconductor components through December 31, 2030. Pursuant to the agreement, the Company paid capacity deposits of $1,000 each in December 2022 and June 2023. The capacity deposits are recognized in prepaid and other current assets on our condensed consolidated balance sheets and amortized ratably over the life of the purchase commitment. 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. The Company purchased $0 and $196 of these components during the three months ended March 31, 2025 and 2024, respectively. The Company is required to purchase $5,571, $6,314, $7,463, $8,313, $841 and $1,492 of these components in each of the years 2025 through 2030, respectively.
    Product Warranty and Recall
    Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle existing and future claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. Our estimate is based on historical trends of units sold and claim payment amounts, combined with our current understanding of the status of existing claims, forecasts of the resolution of existing claims, expected future claims on products sold and commercial discussions with our customers. The key factors in our estimate are the warranty period and the customer source. The Company can provide no assurances that it will not experience material claims or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued. The current portion of the product warranty and recall reserve is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets. Product warranty and recall reserve included $12,231 and $10,675 of a long-term liability at March 31, 2025 and December 31, 2024, respectively, which is included as a component of other long-term liabilities on the condensed consolidated balance sheets.
    In 2023, the Company received a demand for arbitration from one of our customers seeking recovery for warranty claims related to past sales of PM sensor products, a product line we exited in 2019. In March 2024, pursuant to the arbitration process, the customer submitted a formal statement of claim notification for 29,340 euro ($31,733). In May 2024, the Company responded with a formal statement of defense denying responsibility for the claim. Based on our review of the technical and legal merits, we believe these warranty claims lack substantive merit and are significantly overstated. The Company continues to vigorously defend this matter in private arbitration. 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 product warranty and recall reserve liability:
    Three months ended March 31,20252024
    Product warranty and recall reserve at beginning of period$27,523 $21,610 
    Accruals for warranties established during period4,059 5,398 
    Aggregate changes in pre-existing liabilities due to claim developments681 283 
    Settlements made during the period(3,960)(3,217)
    Foreign currency translation1,732 (692)
    Product warranty and recall reserve at end of period$30,035 $23,382 
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    (11) Business Realignment
    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. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs that are referred to as business realignment charges. The Company does not expect future charges related to the previously incurred termination actions noted below.
    Business realignment charges incurred by reportable segment were as follows:
    Three months ended
    March 31,
    20252024
    Control Devices (A)
    $377 $— 
    Electronics (B)
    1,373 — 
    Unallocated Corporate (C)
    1,077 — 
    Total business realignment charges$2,827 $— 
    _____________________________________
    (A)
    Severance costs for the three months ended March 31, 2025 related to COGS and design and development ("D&D") were $327 and $50, respectively. The majority of the business realignment costs relate to operational efficiency initiatives at our Juarez facility.
    (B)
    Severance costs for the three months ended March 31, 2025 related to COGS, SG&A and D&D were $1,073, $106 and $194, respectively. The majority of the business realignment costs relate to operational efficiency initiatives at our Juarez facility.
    (C)
    Severance related costs for the three months ended March 31, 2025 related to SG&A were $1,077 for executive separation costs.
    Business realignment charges incurred, classified by statement of operations line item were as follows:
    Three months ended
    March 31,
    20252024
    Cost of goods sold$1,400 $— 
    Selling, general and administrative1,183 — 
    Design and development244 — 
    Total business realignment charges$2,827 $— 
    Reconciliations of the beginning and ending liability balances related to business realignment were as follows:
    Utilization
    Accrual as of January 1, 20252025 Charge to ExpenseCashNon-Cash
    Accrual as of March 31, 2025
    Employee termination costs
    $411 $2,827 $(1,020)$— $2,218 
    Total$411 $2,827 $(1,020)$— $2,218 
    Utilization
    Accrual as of January 1, 20242024 Charge to ExpenseCashNon-Cash
    Accrual as of March 31, 2024
    Employee termination costs
    $1,230 $— $(1,095)$— $135 
    Total$1,230 $— $(1,095)$— $135 
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    (12) Income Taxes
    For interim tax reporting, we estimate our annual effective tax rate and apply it to our year to date ordinary income. Tax jurisdictions with a projected or year to date loss for which a benefit cannot be realized are excluded.
    For the three months ended March 31, 2025, income tax expense of $1,564 was attributable to the mix of earnings among tax jurisdictions, the impact of valuation allowances in certain jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (27.8)% varies from the statutory rate primarily due to the impact of valuation allowances in certain jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings.
    For the three months ended March 31, 2024, income tax expense of $510 was attributable to the mix of earnings among tax jurisdictions and U.S. taxes on foreign earnings offset by the impact of valuation allowances in certain jurisdictions and tax credits and incentives. The effective tax rate of (9.1)% varies from the statutory rate primarily due to U.S. taxes on foreign earnings offset by the impact of valuation allowances in certain jurisdictions and tax credits and incentives.
    (13) Segment Reporting
    Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer.
    The Company has three reportable segments, Control Devices, Electronics and Stoneridge Brazil, which also represent its operating segments. The Control Devices reportable segment produces actuators, sensors, switches and connectors. The Electronics reportable segment produces advanced driver information solutions, vision systems, connectivity and compliance solutions and control modules. The Stoneridge Brazil reportable segment designs and manufactures vehicle tracking devices and monitoring services, driver information systems, vehicle security alarms and convenience accessories telematics solutions and multimedia devices.
    The accounting policies of the Company’s reportable segments are the same as those described in Note 2, “Summary of Significant Accounting Policies” of the Company’s 2024 Form 10-K. The Company’s management evaluates the performance of its reportable segments based primarily on revenues from external customers, operating income and capital expenditures. Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.
    The Company's management, including the CODM, utilizes operating income as the key performance measure of segment
    profitability to evaluate segment performance, and for planning and forecasting purposes to allocate resources to the
    segments, as management believes this measure is most reflective of the financial performance of the Company's operating
    segments. The CODM regularly evaluates budget-to-actual and period-over-period variances for this metric when making
    decisions about the allocation of operating and capital resources to each segment. The CODM also uses operating income
    in evaluating the operating performance of each segment and as part of determining the compensation of the segment
    managers and certain other employees. COGS and D&D are the significant expenses regularly reviewed by the CODM.
    Other segment costs primarily include SG&A items.
    The financial information presented below is for our three reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable. Such costs and eliminations do not meet the requirements for being classified as an operating segment. Unallocated Corporate costs include various support functions, such as accounting/finance, executive administration, human resources, information technology and legal.





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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    A summary of financial information by reportable segment is as follows:
    Three months ended
    March 31,
    20252024
    Net Sales:
    Control Devices$68,833 $77,158 
    Inter-segment sales1,022 831 
    Control Devices net sales69,855 77,989 
    Electronics134,783 149,783 
    Inter-segment sales5,751 6,341 
    Electronics net sales140,534 156,124 
    Stoneridge Brazil14,274 12,216 
    Inter-segment sales135 — 
    Stoneridge Brazil net sales14,409 12,216 
    Eliminations(6,908)(7,172)
    Total net sales$217,890 $239,157 
    Cost of Goods Sold:
    Control Devices$57,786 $64,010 
    Electronics104,527 119,143 
    Stoneridge Brazil9,169 7,494 
    Unallocated Corporate (A)
    111 153 
    Total cost of goods sold$171,593 $190,800 
    Design and Development:
    Control Devices$4,134 $5,108 
    Electronics12,001 10,738 
    Stoneridge Brazil782 772 
    Unallocated Corporate (A)
    909 985 
    Total design and development$17,826 $17,603 
    Other Segment Costs:
    Control Devices$5,746 $5,875 
    Electronics12,751 12,814 
    Stoneridge Brazil3,738 3,746 
    Unallocated Corporate (A)
    9,461 7,988 
    Total other segment costs$31,696 $30,423 
    Operating (Loss) Income:
    Control Devices$1,165 $2,164 
    Electronics5,505 7,089 
    Stoneridge Brazil585 204 
    Unallocated Corporate (A)
    (10,480)(9,126)
    Total operating (loss) income$(3,225)$331 
    Depreciation and Amortization:
    Control Devices$2,326 $2,863 
    Electronics3,540 3,861 
    Stoneridge Brazil1,093 1,276 
    Unallocated Corporate313 584 
    Total depreciation and amortization (B)
    $7,272 $8,584 
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    Interest Expense (Income), net:
    Control Devices$(75)$— 
    Electronics255 603 
    Stoneridge Brazil(149)(370)
    Unallocated Corporate3,136 3,401 
    Total interest expense, net$3,167 $3,634 
    Capital Expenditures:
    Control Devices$1,063 $1,517 
    Electronics3,880 1,377 
    Stoneridge Brazil298 940 
    Corporate (C)
    160 434 
    Total capital expenditures$5,401 $4,268 
    March 31,
    2025
    December 31,
    2024
    Total Assets:
    Control Devices$145,978 $136,028 
    Electronics400,316 365,226 
    Stoneridge Brazil54,307 48,280 
    Corporate (C)
    458,013 471,793 
    Eliminations(401,255)(399,771)
    Total assets$657,359 $621,556 
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates:
    Three months ended March 3120252024
    Net Sales:
    United States$101,091 $118,116 
    North America$101,091 $118,116 
    Brazil14,274 12,216 
    South America$14,274 $12,216 
    Sweden38,048 44,107 
    Estonia30,198 28,448 
    Netherlands21,789 20,931 
    Other Europe1,008 2,888 
    China11,482 12,451 
    Europe and Other$102,525 $108,825 
    Total net sales$217,890 $239,157 
    March 31,
    2025
    December 31,
    2024
    Long-term Assets:
    United States$88,320 $90,111 
    Mexico6,974 5,254 
    North America$95,294 $95,365 
    Brazil26,353 25,222 
    South America$26,353 $25,222 
    Sweden36,224 32,918 
    Estonia8,302 8,363 
    Netherlands59,206 57,677 
    Other Europe623 653 
    China13,336 13,844 
    Europe and Other$117,691 $113,455 
    Total long-term assets$239,338 $234,042 
    __________________________________________________________
    (A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation.
    (B)These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.
    (C)Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries.
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    STONERIDGE, INC.
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands, except per share data, unless otherwise stated)
    (Unaudited)
    (14) Investments
    In December 2018, the Company entered into an agreement to make a $10,000 investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology which is accounted for under the equity method of accounting. The Company’s $10,000 investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. The Company has contributed $8,950 to the Autotech Fund II as of March 31, 2025. The Company did not contribute to or receive distributions from Autotech Fund II during the three months ended March 31, 2025 or 2024. The Company has a 6.7% interest in Autotech Fund II. The Company recognized (gains) losses of $(294) and $277 during the three months ended March 31, 2025 and 2024, respectively. The Autotech Fund II investment recorded in investments and other long-term assets in the condensed consolidated balance sheets was $8,024 and $7,730 as of March 31, 2025 and December 31, 2024, respectively.
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    Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
    We are a global supplier of safe and efficient electronics systems and technologies. Our systems and products power vehicle intelligence, while enabling safety and security for global commercial, automotive, off-highway and agricultural vehicle markets.
    The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes related thereto and other financial information included elsewhere herein.
    Segments
    We are organized by products produced and markets served. Under this structure, our operations have been reported using the following segments:
    Control Devices. This segment includes results of operations that manufacture actuators, sensors, switches and connectors.
    Electronics. This segment includes results of operations from the production of advanced driver information solutions, vision systems, connectivity and compliance solutions and control modules.
    Stoneridge Brazil. This segment includes results of operations that design and manufacture vehicle tracking devices and monitoring services, driver information systems, vehicle security alarms and convenience accessories, telematics solutions and multimedia devices.
    First Quarter Overview
    The Company had net loss of $7.2 million, or $(0.26) per diluted share, for the three months ended March 31, 2025.
    Net loss for the quarter ended March 31, 2025 increased by $1.1 million, or $(0.04) per diluted share, from net loss of $6.1 million, or $(0.22) per diluted share, for the three months ended March 31, 2024. Net sales decreased by $21.3 million, or 8.9%, compared to the three months ended March 31, 2024, primarily from lower volumes in our North American and European commercial vehicle markets for our Electronics segment and lower volumes in our North American automotive market including the expected end-of-life production for an actuator product for our Control Devices segment offset by higher OEM product sales at Stoneridge Brazil. Gross margin as a percent of sales for the quarter ended March 31, 2025 increased to 21.2% from 20.2% for the three months ended March 31, 2024 driven by lower material costs including favorable foreign exchange related variances offset by lower contribution from lower sales and business realignment costs incurred for operational efficiency initiatives at our Juarez facility. In addition, non-operating foreign currency gains and equity earnings favorably impacted results for the quarter ending March 31, 2025.
    Our Control Devices segment net sales decreased by 10.8% compared to the first quarter of 2024 primarily as a result of decreases in our North American automotive market, including the expected end-of-life production for an actuator product, as well as decreases in our off-highway and China commercial vehicle markets. These decreases were offset by sales increases in our China automotive and North American commercial vehicle markets. Segment gross margin as a percentage of sales decreased due to lower contribution from lower sales levels offset by lower warranty and premium freight costs. Segment operating income decreased due to lower contribution from lower sales partially offset by lower D&D spending.
    Our Electronics segment net sales decreased by 10.0% compared to the first quarter of 2024 primarily due to lower sales volumes in our North American and European commercial vehicle markets, partially mitigated by the on-going ramp-up of a recently launched European MirrorEye OEM program and higher sales of our next generation tachograph. We also experienced lower sales volume in our North American off-highway vehicle market and an unfavorable impact of foreign currency translation which were offset by higher sales in European off-highway market. Segment gross margin as a percent of sales increased compared to the prior year first quarter from lower material costs including favorable foreign exchange related variances, which were partially offset by lower contribution from lower sales and higher business realignment costs incurred for operational efficiency initiatives at our Juarez facility. Operating income for the segment decreased compared to the first quarter of 2024 because of lower gross profit and higher D&D expense as customer reimbursements declined more than spending driven by reduced launch activities.
    Our Stoneridge Brazil segment net sales increased by 16.8% compared to the first quarter of 2024 primarily from higher OEM product sales offset by unfavorable foreign currency translation and lower original equipment services ("OES") channel sales. Operating income increased due to higher contribution from higher sales levels partially offset by the adverse impact of U.S. dollar denominated material purchases.
    In the first quarter of 2025, SG&A expenses increased by $1.3 million compared to the first quarter of 2024 driven primarily by higher business realignment costs and professional services being offset by lower incentive compensation.
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    Table of Contents
    In the first quarter of 2025, D&D costs increased by $0.2 million compared to the prior year first quarter from higher expense in our Electronics segment as customer reimbursements declined more than spending driven by reduced launch activities offset by lower D&D spending in our Control Devices segment.

    At March 31, 2025 and December 31, 2024, we had cash and cash equivalents balances primarily held at our foreign locations of $79.1 million and $71.8 million, respectively, and we had $203.2 million and $201.6 million, respectively, in borrowings outstanding on our Credit Facility. The 2025 increase in cash and cash equivalents was mostly due to cash generated from operating activities including lower working capital levels.
    Outlook
    The Company believes that focusing on products that address industry megatrends has had and will continue to have a positive effect on both our top-line growth and financial performance. Expanding on our existing products and technology platforms with advanced capabilities, applications and data services is core to our long-term strategy. For example, we continue to develop safety, vehicle intelligence and connectivity based products, such as our OEM MirrorEye® programs in North America and Europe as well as our next generation tachograph in Europe.
    In April 2025, the U.S. government announced additional tariffs on various goods imported to the U.S. and other countries announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by Stoneridge. Some of these additional tariffs have been implemented and others have been conditionally paused, and it is reasonably possible that new or additional tariffs will be periodically announced given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs as well as heightened global trade disputes.
    Our business model of manufacturing by regions for the regions limits the global impact of certain trade restrictions and tariffs. Our primary tariff exposure relates to our Mexico operations that sell products into the U.S., most of which are exempt under the provisions of the United States-Mexico-Canada Agreement. Further, the majority of our supply components are not subject to the additional tariffs or are compliant with exceptions. We are taking and will continue to take actions to mitigate any direct and indirect impacts of new or additional tariffs including directly or indirectly passing the additional costs through to our customers. However, these matters are changing rapidly and there is significant uncertainty as to how long and to what degree that Stoneridge and the global transportation industry will be impacted by these new or additional tariffs, the adverse global trade environment and the resulting economic uncertainty.

    Based on IHS Market production forecasts, the North American automotive market is expected to decrease from 15.5 million units in 2024 to 14.0 million units in 2025. In our Control Devices segment, we remain focused on drivetrain agnostic technologies to drive new business awards as the market continues to evolve. However, we expect lower sales in 2025 related to the impact of end-of-life production for an actuator product. We expect continued volatility in our end markets as uncertainty remains related to the market’s response to tariff policies. We continue to focus on operational excellence and enterprise-wide cost reduction, including material cost reduction plans, to continue to drive margin improvement going-forward.
    Based on IHS Market production forecasts published in February 2025, in 2025 the European and North American commercial vehicle end market volumes are forecasted to increase 3.9% and decrease 3.3%, respectively. In 2025 and over the long-term, we expect our Electronics’ segment sales to outperform forecasted changes in production volumes due to strong demand for our existing products and the impact of ongoing launches of our OEM MirrorEye programs in North America and Europe as well as higher sales of our next generation tachograph in Europe. We expect continued growth in MirrorEye as we launch and ramp up new and existing OEM programs in both North America and Europe, and MirrorEye systems becomes standard on key truck platforms for existing OEM programs.
    In 2025, we expect net D&D spend to slightly decrease driven by a shift to spending for the development of next generation products, opposed to new product launch related spend. As a result of reduced launch activities, we expect lower customer reimbursements and capitalization of software development costs. We continue to evaluate and optimize our engineering footprint to enhance capabilities and capacity for the most efficient return on our engineering spend, including utilizing our Stoneridge Brazil engineering resources to support Electronics segment projects.
    In January 2025, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.2% in 2025, a decline from forecasted growth of 3.0% in 2024. We expect our served market channels to remain relatively stable in 2025 based on current market and economic conditions. Stoneridge Brazil continues to focus on growing our OEM capabilities in-region to better support our global customers. We expect this strategy will provide opportunities for future growth and a platform to continue to rotate our local portfolio to more closely align with our global products. In addition, we continue to align our global engineering capabilities and footprint by expanding our Brazilian engineering center.
    While we expect continued challenges across our end markets in 2025, we will continue to focus on overall operating cost improvement and operational execution to drive contribution margin and focus on inventory reduction to improve our cash position and reduce our leverage profile.
    25

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    Our future effective tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles and our jurisdictional mix of earnings. We monitor these factors and the impact on our effective tax rate.
    Other Matters
    A significant portion of our sales are outside of the United States. These sales are generated by our non-U.S. based operations, and therefore, movements in foreign currency exchange rates can have a significant effect on our results of operations, which are presented in U.S. dollars. A significant portion of our raw materials purchased by our Electronics and Stoneridge Brazil segments are denominated in U.S. dollars, and therefore movements in foreign currency exchange rates can also have a significant effect on our results of operations. In the first quarter of 2025, the U.S. Dollar strengthened against the Brazilian real, unfavorably impacting our reported results, while it weakened against the Swedish krona, favorably impacting our reported results.
    We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto in order to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. As a consequence of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $2.8 million and $0.0 million were incurred in the three months ended March 31, 2025 and 2024, respectively. We incurred $1.4 million in business realignment costs in the three months ended March 31, 2025 related to operational efficiency initiatives at our Juarez facility, which we expect will result in cost savings for direct and indirect labor and a more efficient overall operating structure. We expect to incur additional realignment costs related to this initiative and others in the remainder of 2025.
    Because of the competitive nature of the markets we serve, we face pricing pressures from our customers in the ordinary course of business. In response to these pricing pressures we have been able to effectively manage our production costs by the combination of lowering certain costs and limiting the increase of others, the net impact of which to date has not been material. However, if we are unable to effectively manage production costs in the future to mitigate future pricing pressures, our results of operations would be adversely affected.
    Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
    Condensed consolidated statements of operations as a percentage of net sales are presented in the following table (in thousands):
    Three months ended March 31,20252024Dollar
    increase
    (decrease)
    Net sales$217,890 100.0 %$239,157 100.0 %$(21,267)
    Costs and expenses:
    Cost of goods sold171,593 78.8 190,800 79.8 (19,207)
    Selling, general and administrative31,696 14.5 30,423 12.7 1,273 
    Design and development17,826 8.2 17,603 7.4 223 
    Operating (loss) income
    (3,225)(1.5)331 0.1 (3,556)
    Interest expense, net3,167 1.5 3,634 1.5 (467)
    Equity in (earnings) loss of investee
    (294)(0.1)277 0.1 (571)
    Other (income) expense, net
    (466)(0.2)2,036 0.9 (2,502)
    Loss before income taxes
    (5,632)(2.6)(5,616)(2.3)(16)
    Provision for income taxes
    1,564 0.7 510 0.2 1,054 
    Net loss
    $(7,196)(3.3)%$(6,126)(2.6)%$(1,070)
    26

    Table of Contents
    Net Sales. Net sales for our reportable segments, excluding inter-segment sales, are summarized in the following table (in thousands):
    Three months ended March 31,20252024
    Dollar
    increase (decrease)
    Percent
    increase (decrease)
    Control Devices$68,833 31.6 %$77,158 32.3 %$(8,325)(10.8)%
    Electronics134,783 61.8 149,783 62.6 (15,000)(10.0)%
    Stoneridge Brazil14,274 6.6 12,216 5.1 2,058 16.8 %
    Total net sales$217,890 100.0 %$239,157 100.0 %$(21,267)(8.9)%
    Our Control Devices segment net sales decreased $8.3 million because of decreases in our North American automotive market of $5.0 million including the impact of expected end-of-life production for an actuator product as well as decreases in our off-highway and China commercial vehicle markets of $2.2 million and $1.5 million, respectively. These decreases were partially offset by volume increases in our China automotive and North American commercial vehicle markets of $1.0 million $0.4 million, respectively.
    Our Electronics segment net sales decreased $15.0 million because of lower customer production volumes in our North American and European commercial vehicle markets of $7.9 million and $5.5 million, respectively, partially mitigated by higher MirrorEye sales, including the ramp-up of a recently launched European OEM program and higher aftermarket sales for our next generation tachograph. We also experienced lower sales volumes in our North American off-highway vehicle market of $1.7 million. These decreases were offset by an increase in our European off-highway market of $2.5 million. Net sales in the first quarter of 2025 were unfavorably impacted by euro and Swedish krona foreign currency translation of $2.7 million compared to the prior year quarter.
    Our Stoneridge Brazil segment net sales increased $2.1 million from higher OEM product sales partially offset by unfavorable foreign currency translation of $1.8 million and lower OES channel sales of $0.3 million.
    Net sales by geographic location are summarized in the following table (in thousands):
    Three months ended March 31,20252024
    Dollar
    increase (decrease)
    Percent
    increase (decrease)
    North America$101,091 46.3 %$118,116 49.4 %$(17,025)(14.4)%
    South America14,274 6.6 12,216 5.1 2,058 16.8 %
    Europe and Other102,525 47.1 108,825 45.5 (6,300)(5.8)%
    Total net sales$217,890 100.0 %$239,157 100.0 %$(21,267)(8.9)%
    The decrease in North American net sales was mostly attributable to a decrease in sales volume in our commercial vehicle, automotive and off-highway markets of $7.5 million, $5.0 million and $4.0 million, respectively. The decrease in our North American automotive market was primarily caused by lower customer volumes and the expected end-of-life production of an actuator product.
    The increase in net sales in South America was from higher OEM product sales of $4.2 million partially offset by unfavorable foreign currency translation of $1.8 million and lower OES channel sales of $0.3 million.
    The decrease in net sales in Europe and Other was due to decreases in customer production volumes in our European and China commercial vehicle markets of $5.5 million and $1.7 million, respectively, offset by an increase in our European off-highway and China automotive markets of $2.5 million and $1.0 million, respectively. Net sales were also impacted by an unfavorable foreign currency translation of $2.8 million.
    Cost of Goods Sold and Gross Margin. Cost of goods sold decreased compared to the first quarter of 2024 and our gross margin increased to 21.2% in the first quarter of 2025 from 20.2% in the first quarter of 2024. Our material cost as a percentage of net sales decreased to 56.3% in the first quarter of 2025 from 58.9% in the first quarter of 2024. The decrease in material cost percentage was due to lower material costs including favorable foreign exchange related variances. Overhead as a percentage of net sales was 17.8% and 16.2% for the first quarter of 2025 and 2024, respectively. The increase in overhead as a percentage of sales was attributable to lower sales as overhead spending was consistent with the prior year quarter.
    Our Control Devices segment gross margin decreased primarily because of lower contribution from lower sales.
    27

    Table of Contents
    Our Electronics segment gross margin increased from the prior year first quarter because of reduced material costs including favorable foreign exchange related variances which were partially offset by lower contribution from lower sales levels and higher business realignment costs incurred for operational efficiency initiatives at our Juarez facility.
    Our Stoneridge Brazil segment gross margin decreased primarily because of the unfavorable sales mix and the adverse impact of U.S. dollar denominated material purchases offset by higher contribution from higher sales levels.
    Selling, General and Administrative. SG&A expenses increased by $1.3 million primarily because of higher business realignment costs and professional services being offset by lower incentive compensation.
    Design and Development. D&D costs decreased by $0.2 million compared to the first quarter of 2024 from higher expense in our Electronics segment as customer reimbursements declined more than spending driven by reduced launch activities offset by lower D&D spending in our Control Devices segment.
    Operating (Loss) Income. Operating (loss) income by segment is summarized in the following table (in thousands):
    Three months ended March 31,20252024Dollar
    increase
    (decrease)
    Percent
    increase
    (decrease)
    Control Devices$1,165 $2,164 $(999)(46.2)%
    Electronics5,505 7,089 (1,584)(22.3)
    Stoneridge Brazil585 204 381 186.8 
    Unallocated corporate(10,480)(9,126)(1,354)(14.8)
    Operating (loss) income
    $(3,225)$331 $(3,556)(1074.3)%
    Our Control Devices segment operating income decreased because of lower contribution from lower sales levels offset by lower D&D spending.
    Our Electronics segment operating income decreased primarily because of higher D&D expense as customer reimbursements declined more than spending as well as slightly lower segment gross profit.
    Our Stoneridge Brazil segment operating income increased due to higher gross profit from higher sales levels offset by unfavorable sales mix and the adverse impact of U.S. dollar denominated material purchases.
    Our unallocated corporate operating loss increased from higher SG&A related to business realignment costs.
    Operating (loss) income by geographic location is summarized in the following table (in thousands):
    Three months ended March 31,20252024
    Dollar
    increase (decrease)
    Percent
    increase (decrease)
    North America$(12,889)$(5,606)$(7,283)(129.9)%
    South America585 204 381 186.8 
    Europe and Other9,079 5,733 3,346 58.4 
    Operating (loss) income
    $(3,225)$331 $(3,556)(1074.3)%
    Our North American operating loss increased due to lower contribution from lower sales levels and higher business realignment costs. Operating income in South America increased due to higher contribution from higher sales levels offset by unfavorable sales mix and the adverse impact of U.S. dollar denominated material purchases. Our operating results in Europe and Other increased because of lower material costs including favorable foreign exchange related variances which were partially offset by lower contribution from lower sales levels and higher D&D spending resulting from lower customer reimbursements.
    Interest Expense, net. Interest expense, net was $3.2 million and $3.6 million for the three months ended March 31, 2025 and 2024, respectively. The decrease for the quarter ended March 31, 2025, was the result of lower interest rates on our Credit Facility outstanding balances.
    Equity in (Earnings) Loss of Investee. Equity (earnings) loss for Autotech Fund II was $(0.3) million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively.
    28

    Table of Contents
    Other (Income) Expense, net. We record certain foreign currency transaction (gains) losses as a component of other income, net on the condensed consolidated statement of operations. Other income, net of $0.5 million increased by $2.5 million compared to the first quarter of 2024 due to foreign currency transaction gains in our Electronics segment.
    Provision for Income Taxes. For the three months ended March 31, 2025, income tax expense of $1.6 million was attributable to the mix of earnings among tax jurisdictions, the impact of valuation allowances in certain jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (27.8)% varies from the statutory tax rate primarily due to the impact of valuation allowances in certain jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings.
    For the three months ended March 31, 2024, income tax expense of $0.5 million was attributable to the mix of earnings among tax jurisdictions and U.S. taxes on foreign earnings offset by the impact of valuation allowances in certain jurisdictions and tax credits and incentives. The effective tax rate of (9.1)% varies from the statutory tax rate primarily due to U.S. taxes on foreign earnings offset by the impact of valuation allowances in certain jurisdictions and tax credits and incentives.
    Liquidity and Capital Resources
    Summary of Cash Flows:
    Three months ended March 31,
    20252024
    Net cash provided by (used for):
    Operating activities$10,897 $9,109 
    Investing activities(5,988)(5,714)
    Financing activities(787)5,388 
    Effect of exchange rate changes on cash and cash equivalents3,155 (1,184)
    Net change in cash and cash equivalents$7,277 $7,599 
    Cash provided by operating activities slightly increased compared to 2024 primarily due to cash provided from working capital levels. Cash used by receivables was unfavorable compared to 2024, however collection terms have remained consistent.
    Net cash used for investing activities increased compared to 2024 due to higher capital expenditures including costs to modernize our Juarez facility offset by lower capitalized software development costs.
    Net cash provided by financing activities decreased compared to 2024 due to a decrease in Credit Facility borrowings net of repayments.
    As outlined in Note 7 to our condensed consolidated financial statements, the Credit Facility permits borrowing up to a maximum level of $275.0 million. This variable rate facility has an accordion feature which allows the Company to increase its availability by up to $150.0 million upon the satisfaction of certain conditions and lender consent through its expiration in November 2026. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio. The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends. The Credit Facility had an outstanding balance of $203.2 million at March 31, 2025.
    On February 26, 2025, the Company entered into Amendment No. 1 to the Fifth Amended and Restated Credit Agreement
    and Waiver (“Amendment No. 1”). Amendment No. 1 provides for certain covenant relief and restrictions during the
    “Covenant Relief Period” (the period ending on the date that the Company delivers a compliance certificate for the quarter
    ending December 31, 2025). During the Covenant Relief Period:

    •the maximum leverage ratio of 3.50 was increased to 6.00 for the quarter ended March 31, 2025, 5.50 for the
    quarter ended June 30, 2025, 4.50 for the quarter ended September 30, 2025 and 3.50 for the quarter ended
    December 31, 2025;
    •the minimum interest coverage ratio of 3.50 was waived for the quarter ended December 31, 2024 and was
    reduced to 2.00 for the quarters ended March 31 and June 30, 2025, and 2.50 and 3.50 for the quarter ended
    September 30, 2025 and December 31, 2025, respectively;
    •the Company’s aggregate amount of cash and cash equivalents, defined as 100% of North American and 65% of foreign cash balances, cannot exceed $70.0 million;
    •the sale of significant assets (as defined) will require repayment in the amount of any net cash proceeds received
    and result in the reduction of the Credit Facility commitment, at the lesser of $100.0 million or the net cash
    proceeds;
    29

    Table of Contents
    •there were certain restrictions on Restricted Payments (as defined); and
    •a Permitted Acquisition (as defined) could not be consummated unless otherwise approved in writing by the
    required lenders.

    Amendment No. 1 added an additional level to the leverage ratio based pricing grid, through maturity, when the leverage
    ratio is greater than 3.50.

    The Company was in compliance with all covenants at March 31, 2025 and December 31, 2024. The Company has not experienced a violation that would limit the Company’s ability to borrow under the Credit Facility, as amended, and does not expect that the covenants under it will restrict the Company’s financing flexibility. However, it is possible that future borrowing flexibility under the Credit Facility may be limited as a result of lower than expected financial performance due to the adverse impact of significantly lower global demand in our markets and challenging macroeconomic conditions. The Company expects to make additional repayments on the Credit Facility when cash exceeds the amount needed for operations and to remain in compliance with all covenants.
    The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20.0 million Swedish krona, or $2.0 million and $1.8 million at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025 and December 31, 2024 there were no borrowings outstanding on this overdraft credit line. During the three months ended March 31, 2025, the subsidiary borrowed and repaid 70.6 million Swedish krona, or $7.0 million. 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.
    The Company’s wholly owned subsidiary located in Suzhou, China, had lines of credit that matured in March 2025 and allowed up to a maximum borrowing level of 20.0 million Chinese yuan, or $2.7 million at December 31, 2024. At December 31, 2024 there were no borrowings outstanding on the Suzhou credit line. In addition, the Suzhou subsidiary has a bank acceptance draft line of credit that expired in October 2024 which facilitated the extension of trade payable payment terms by 180 days. The bank acceptance draft line of credit allowed up to a maximum borrowing level of 60.0 million Chinese yuan.
    In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech, a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. As of March 31, 2025, the Company’s cumulative investment in the Autotech Fund II was $9.0 million. The Company did not contribute to Autotech Fund II during the three months ended March 31, 2025 and March 31, 2024, respectively.
    Our future results could also be adversely affected by unfavorable changes in foreign currency exchange rates. We have significant foreign denominated transaction exposure in certain locations, especially in Brazil, Argentina, Mexico, Sweden, Estonia, the Netherlands, United Kingdom and China. Currently, we have foreign currency forward contracts in place for Mexican pesos. See Note 5 to the condensed consolidated financial statements for additional details. Our future results could also be unfavorably affected by increased commodity prices and material cost inflation as these fluctuations impact the cost of our raw material purchases.
    At March 31, 2025, we had a cash and cash equivalents balance of approximately $79.1 million, of which 83.9% was held in foreign locations. The Company has approximately $71.8 million of undrawn commitments under the Credit Facility as of March 31, 2025, which results in total undrawn commitments and cash balances of more than $150.9 million. However, it is possible that future borrowing flexibility under our Credit Facility may be limited as a result of our financial performance.
    The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on-hand and (iii) borrowings from our Credit Facility. We believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital and other commitments during the next twelve months. While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity.
    Commitments and Contingencies
    See Note 10 to the condensed consolidated financial statements for disclosures of the Company’s commitments and contingencies.
    Seasonality
    Our Control Devices and Electronics segments are moderately seasonal, impacted by mid-year and year-end shutdowns and the ramp-up of new model production at key customers. In addition, the demand for our Stoneridge Brazil segment consumer products is generally higher in the second half of the year.
    30

    Table of Contents
    Critical Accounting Policies and Estimates
    The Company’s critical accounting policies, which include management’s best estimates and judgments, are included in Part II, Item 7, to the consolidated financial statements of the Company’s 2024 Form 10-K. These accounting policies are considered critical as disclosed in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis of the Company’s 2024 Form 10-K because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates. There have been no material changes in our significant accounting policies or critical accounting estimates during the first quarter of 2025.
    Information regarding other significant accounting policies is included in Note 2 to our consolidated financial statements in Item 8 of Part II of the Company’s 2024 Form 10-K.
    International Presence
    By operating internationally, we are affected by foreign currency exchange rates and the economic conditions of certain countries. Furthermore, given the current economic climate and fluctuations in certain commodity prices, we believe that an increase in such items could significantly affect our profitability. See Note 5 to the condensed consolidated financial statements for additional details on the Company’s foreign currency exchange rate risks.
    Item 3. Quantitative and Qualitative Disclosures About Market Risk
    There have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously presented within Part II, Item 7A of the Company’s 2024 Form 10-K.
    Item 4. Controls and Procedures
    Evaluation of Disclosure Controls and Procedures
    As of March 31, 2025, an evaluation was performed under the supervision and with the participation of the Company’s management, including the principal executive officer (“PEO”) and principal financial officer (“PFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the PEO and PFO, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2025.
    Changes in Internal Control Over Financial Reporting
    There were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
    31

    Table of Contents
    PART II–OTHER INFORMATION
    Item 1. Legal Proceedings
    We are involved in certain legal actions and claims primarily arising in the ordinary course of business. We establish accruals for matters that we believe that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, we do not believe that any of the litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations. We are subject to litigation regarding civil, labor, regulatory and other tax contingencies in our Stoneridge Brazil segment that we believe the likelihood of loss is reasonably possible, but not probable, although these claims might take years to resolve. We are also subject to product liability and product warranty claims. In addition, if any of our products prove to be defective, we may be required to participate in a government-imposed or customer OEM-instituted recall involving such products. There can be no assurance that we will not experience any material losses related to product liability, warranty or recall claims. See additional details of these matters in Note 10 to the condensed consolidated financial statements.
    Item 1A. Risk Factors
    There have been no material changes with respect to risk factors previously disclosed in the Company’s 2024 Form 10-K.
    Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    The following table presents information with respect to repurchases of Common Shares made by us during the three months ended March 31, 2025. There were 41,004 Common Shares delivered to us by employees as payment for withholding taxes due upon vesting of performance share awards and share unit awards.
    PeriodTotal number of
    shares purchased
    Average price
    paid per share
    Total number of
    shares purchased as
    part of publicly
    announced plans
    or programs
    Maximum number
    of shares that may
    yet be purchased
    under the plans
    or programs
    1/1/25-1/31/25
    649$6.27 N/AN/A
    2/1/25-2/28/25
    7,122$5.62 N/AN/A
    3/1/25-3/31/25
    33,233$5.47 N/AN/A
    Total41,004
    Item 3. Defaults Upon Senior Securities
    None.
    Item 4. Mine Safety Disclosures
    None.
    Item 5. Other Information
    During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
    32

    Table of Contents
    Item 6. Exhibits
    Exhibit
    Number
    Exhibit
    10.1
    Separation Agreement, dated January 29, 2025, by and between Stoneridge, Inc. and Salvatore Orsini, filed herewith.
    10.2
    Amendment No. 1 to Fifth Amended and Restated Credit Agreement and Waiver, filed herewith.
    31.1
    Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
    31.2
    Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
    32.1
    Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
    32.2
    Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
    101XBRL Exhibits:
    101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
    101.SCHXBRL Taxonomy Extension Schema Document
    101.CALXBRL Taxonomy Extension Calculation Linkbase Document
    101.DEFXBRL Taxonomy Extension Definition Linkbase Document
    101.LABXBRL Taxonomy Extension Label Linkbase Document
    104
    The cover page from our Quarterly Report on Form 10-Q for the period ended March 31, 2025, filed with the Securities and Exchange Commission on April 30, 2025, is formatted in Inline Extensible Business Reporting Language (“iXBRL”)
    33

    Table of Contents
    SIGNATURES
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
    STONERIDGE, INC.
    Date: April 30, 2025
    /s/ James Zizelman
    James Zizelman
    President, Chief Executive Officer and Director
    (Principal Executive Officer)
    Date: April 30, 2025
    /s/ Matthew R. Horvath
    Matthew R. Horvath
    Chief Financial Officer and Treasurer
    (Principal Financial Officer)
    34
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    • Stoneridge Launches Next-Generation SE5000 Smart 2 Tachograph For European Commercial Vehicles

      New system features OSNMA technology, delivering enhanced security for fleets NOVI, Mich., May 7, 2025 /PRNewswire/ -- Stoneridge, Inc. (NYSE:SRI) today announced the introduction of its next-generation SE5000 Smart 2 tachograph, now integrated with Open Service Navigation Message Authentication (OSNMA) technology, ensuring greater levels of security for European commercial vehicles.  The SE5000 Smart 2 with OSNMA utilizes Global Navigation Satellite System (GNSS) technology, specifically Galileo, Europe's satellite system — to accurately pinpoint a vehicle's position. To ensu

      5/7/25 8:00:00 AM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge Reports First Quarter 2025 Results

      Strong Quarter-to-Quarter Margin Progression MirrorEye® and SMART 2 Tachograph Set Quarterly Sales Records Maintaining Previously Provided Full-Year 2025 Guidance 2025 First Quarter Results Sales of $217.9 millionGross profit of $46.3 million (21.2% of sales)Adjusted gross profit of $47.7 million (21.9% of sales)Operating loss of $(3.2) million ((1.5)% of sales)Adjusted operating loss of $(0.4) million ((0.2)% of sales)Net loss of $(7.2) million ((3.3)% of sales)Adjusted net loss of $(5.1) million ((2.4)% of sales)Adjusted EBITDA of $7.6 million (3.5% of sales) 2025 Full-Year Guidance Maintaining previously provided full-year 2025 guidance rangesNOVI, Mich., April 30, 2025 /PRNewswire/ --

      4/30/25 5:18:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge, Inc. To Broadcast Its First Quarter 2025 Conference Call On The Web

      NOVI, Mich., April 17, 2025 /PRNewswire/ -- Stoneridge, Inc. (NYSE:SRI) will webcast its first quarter 2025 earnings conference call live on Thursday, May 1, 2025, at 9:00 a.m. ET with president and chief executive officer, Jim Zizelman, and chief financial officer, Matt Horvath. The webcast can be accessed on the Presentations & Events page of the Investors section of the Company's website, www.stoneridge.com.  Stoneridge, Inc., headquartered in Novi, Michigan, is a global supplier of safe and efficient electronic systems and technologies. Our systems and products power vehic

      4/17/25 5:00:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary

    $SRI
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    • Stoneridge Reports First Quarter 2025 Results

      Strong Quarter-to-Quarter Margin Progression MirrorEye® and SMART 2 Tachograph Set Quarterly Sales Records Maintaining Previously Provided Full-Year 2025 Guidance 2025 First Quarter Results Sales of $217.9 millionGross profit of $46.3 million (21.2% of sales)Adjusted gross profit of $47.7 million (21.9% of sales)Operating loss of $(3.2) million ((1.5)% of sales)Adjusted operating loss of $(0.4) million ((0.2)% of sales)Net loss of $(7.2) million ((3.3)% of sales)Adjusted net loss of $(5.1) million ((2.4)% of sales)Adjusted EBITDA of $7.6 million (3.5% of sales) 2025 Full-Year Guidance Maintaining previously provided full-year 2025 guidance rangesNOVI, Mich., April 30, 2025 /PRNewswire/ --

      4/30/25 5:18:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge, Inc. To Broadcast Its First Quarter 2025 Conference Call On The Web

      NOVI, Mich., April 17, 2025 /PRNewswire/ -- Stoneridge, Inc. (NYSE:SRI) will webcast its first quarter 2025 earnings conference call live on Thursday, May 1, 2025, at 9:00 a.m. ET with president and chief executive officer, Jim Zizelman, and chief financial officer, Matt Horvath. The webcast can be accessed on the Presentations & Events page of the Investors section of the Company's website, www.stoneridge.com.  Stoneridge, Inc., headquartered in Novi, Michigan, is a global supplier of safe and efficient electronic systems and technologies. Our systems and products power vehic

      4/17/25 5:00:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge Reports Fourth Quarter and Full-Year 2024 Results

      Net Cash Provided by Operating Activities Improvement of ~$43 Million Year-Over-Year Driven by Inventory Reduction of ~$36 Million Establishes 2025 Midpoint Revenue Guidance of $875 Million and EBITDA Guidance of $40 MillionEstablishes 2026 Revenue Target of at Least $975 Million and EBITDA Target of at Least $70 Million 2024 Fourth Quarter Results Sales of $218.2 millionGross profit of $42.7 million (19.5% of sales)Adjusted gross profit of $43.1 million (19.7% of sales)Operating loss of $(4.4) million ((2.0)% of sales)Adjusted operating loss of $(4.0) million ((1.8)% of sales)Net loss of $(6.1) million ((2.8)% of sales)Adjusted net loss of $(5.0) million ((2.3)% of sales)Adjusted EBITDA of

      2/26/25 4:54:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary

    $SRI
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    • Stoneridge Appoints Natalia Noblet as President of Electronics Division

      NOVI, Mich., May 22, 2024 /PRNewswire/ -- Stoneridge, Inc. (NYSE:SRI), a leading designer and manufacturer of highly engineered electrical and electronic vehicle systems, has announced the appointment of Natalia Noblet as president of its Electronics Division, effective September 1, 2024. Noblet succeeds Peter Österberg, who, by mutual agreement, is leaving the company to pursue other opportunities. Noblet will be responsible for leading financial performance, product development, business strategy and technical vision for Stoneridge's Electronics Division, the company's large

      5/22/24 5:10:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge Appoints Troy Cooprider as Chief Technology Officer

      NOVI, Mich., March 14, 2024 /PRNewswire/ -- Stoneridge, Inc. (NYSE:SRI) today announced the appointment of Troy Cooprider to the position of chief technology officer. Cooprider will set the company's strategic technology and product roadmaps and support future innovation and growth through oversight of the global engineering function. "We have a clear strategy for the future, and with Troy's proven track record in bringing advanced technologies to market, we will continue to redefine the standards of safe and efficient mobility," said Jim Zizelman, president and CEO, Stoneridg

      3/14/24 4:30:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Brink's Appoints Laurent Borne Chief Experience Officer

      RICHMOND, Va., April 24, 2023 (GLOBE NEWSWIRE) -- The Brink's Company (NYSE:BCO), a leading global provider of cash and valuables management, digital retail solutions, and ATM managed services, today announced that Laurent Borne will join the company as executive vice president and chief experience officer, effective May 15. Borne, who has proven expertise in global product development and management, will lead global marketing efforts and have responsibility for the company's expanding digital retail solutions business. He will join the executive leadership team and report to president and chief executive officer Mark Eubanks. "We are laser-focused on providing a superior customer exper

      4/24/23 4:56:56 PM ET
      $BCO
      $SRI
      Oil Refining/Marketing
      Consumer Discretionary
      Auto Parts:O.E.M.

    $SRI
    Insider Trading

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    • Director Korth Kim was granted 16,194 shares, increasing direct ownership by 18% to 107,543 units (SEC Form 4)

      4 - STONERIDGE INC (0001043337) (Issuer)

      5/15/25 3:16:32 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Director Reinhardt Carsten J was granted 16,194 shares, increasing direct ownership by 70% to 39,409 units (SEC Form 4)

      4 - STONERIDGE INC (0001043337) (Issuer)

      5/15/25 3:11:47 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Director Rutt Sheila M was granted 16,194 shares, increasing direct ownership by 63% to 42,061 units (SEC Form 4)

      4 - STONERIDGE INC (0001043337) (Issuer)

      5/15/25 3:01:13 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary

    $SRI
    Insider Purchases

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    • Zizelman James bought $102,180 worth of shares (6,500 units at $15.72) (SEC Form 4)

      4 - STONERIDGE INC (0001043337) (Issuer)

      5/8/24 11:05:13 AM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary

    $SRI
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    • Stoneridge upgraded by Barrington Research

      Barrington Research upgraded Stoneridge from Mkt Perform to Outperform

      8/3/23 8:39:08 AM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge downgraded by Barrington Research

      Barrington Research downgraded Stoneridge from Outperform to Mkt Perform

      10/13/21 2:22:03 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • Stoneridge upgraded by Barrington Research with a new price target

      Barrington Research upgraded Stoneridge from Mkt Perform to Outperform and set a new price target of $45.00

      3/2/21 12:56:39 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary

    $SRI
    Large Ownership Changes

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    • Amendment: SEC Form SC 13G/A filed by Stoneridge Inc.

      SC 13G/A - STONERIDGE INC (0001043337) (Subject)

      11/20/24 1:24:00 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • SEC Form SC 13G filed by Stoneridge Inc.

      SC 13G - STONERIDGE INC (0001043337) (Subject)

      11/14/24 12:25:39 PM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary
    • SEC Form SC 13G/A filed by Stoneridge Inc. (Amendment)

      SC 13G/A - STONERIDGE INC (0001043337) (Subject)

      2/14/24 10:16:21 AM ET
      $SRI
      Auto Parts:O.E.M.
      Consumer Discretionary