STONERIDGE, INC. (NYSE:SRI) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05
On January 15, 2019, Stoneridge, Inc. (the “Company”) filed a Form 8-K (the “Initial 8-K”), disclosing that on January 11, 2019, employees at the Company’s Canton, Massachusetts facility (the “Canton Facility”) were informed that the Company was consolidating its manufacturing operations and closing the Canton Facility by the end of 2019. The closure is part of a Company initiative to realign its operations and engineering footprint to position the Company for future growth. The Canton Facility closure decision was made on January 10, 2019 by Company management with authority granted to management by the Company’s Board of Directors. This amendment is being filed to supplement the Initial 8-K to provide the estimated costs the Company expects to incur as a result of this initiative which includes employee severance, retention and termination costs, contract terminations costs, the non-cash write-off of impaired fixed assets and other transition costs. The Company expects to incur employee severance, retention and termination costs of between $6.2 million and $6.6 million, contract termination costs of approximately $0.1 million and non-cash write-offs of impaired fixed assets of approximately $0.2 million. The Company also expects to incur other transition costs for engineering function recruiting, relocation, duplicate wages and machinery and equipment move and set up costs of between $2.0 million and $2.6 million. The estimated total cost of the Canton Facility restructuring plan is between $8.5 million and $9.5 million and is expected to be incurred through 2020.
A copy of the Company’s press release announcing the Canton Facility closure was attached as Exhibit 99.1 to the Initial 8-K.
Forward-Looking Statements
Portions of this Current Report on Form 8-K contain “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the intent, belief or current expectations of the Company with the respect to the closure of the Canton Facility. 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 in this report are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among other factors:
| · | a significant change in automotive, commercial, off-highway, motorcycle or agricultural vehicle production; |
| · | competitive market conditions and resulting effects on sales and pricing; |
| · | customer acceptance of new products; |
| · | our ability to successfully launch/produce products for awarded business; |
| · | adverse changes in laws, government regulations or market conditions, including tariffs, affecting our products or our customers’ products; |
| · | our ability to protect our intellectual property and successfully defend against assertions made against us; |
| · | 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; |
| · | 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 |
| · | those items described in Part I, Item IA (“Risk Factors”) of the Company’s 2018 Form 10-K. |
About STONERIDGE, INC. (NYSE:SRI)
Stoneridge, Inc. is a designer and manufacturer of engineered electrical and electronic components, modules and systems for the automotive, commercial, motorcycle, off-highway and agricultural vehicle markets. The Company operates through three segments: Control Devices, Electronics and PST. The Company’s Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle and includes product lines, such as sensors, switches, valves, and actuators. The Company’s Electronics segment designs and manufactures electronic instrument clusters, electronic control units and driver information systems. The PST segment is engaged in the design, manufacture and sale of in-vehicle audio and video devices, electronic vehicle security alarms, convenience accessories, vehicle tracking devices and monitoring services primarily for the automotive and motorcycle industry. It operates in approximately 30 locations in over 10 countries.
