Welcome to the Business Journal Archives
Search for articles below, or continue to the all new BusinessJournalDaily.com now.
Search
Stoneridge Restructuring Charge Could Reach $7 Million This Year
"WARREN, Ohio -- Stoneridge, Inc. expects fourth-quarter and full-year 2004 results will include a pre-tax, non-cash charge of approximately $175 million to $195 million for the impairment of goodwill recorded in connection with the Company's 1998 acquisition of Hi-Stat Manufacturing Co. Inc., officials announced recently.The goodwill impairment charge is related to Stoneridge's change in its strategic growth initiative and the resulting focus on the design and development of highly engineered products by four operating units, according to Gerald V. Pisano, president and chief executive officer. This strategic redirection along with sales and organizational realignment was completed in the fourth quarter. Two of these four operating units will be aggregated for reporting purposes into the company's existing Vehicle Management & Power Distribution reportable segment and two will be aggregated into the company's existing Control Devices reportable segment.Stoneridge also expects to incur approximately $6 million to $7 million in restructuring charges in 2005 as it continues to rationalize its manufacturing facilities as a result of the company's successful lean enterprise initiatives and the company's shifting of production of certain products to low-cost locations, Pisani said."The planned growth in systems resulting from the integration of products and technologies has not met expectations," Pisani said. "Our current management believes that Stoneridge's value is driven by its technology and broad portfolio of highly engineered products and components that enhance performance of our customers' systems. Hi-Stat remains a strong company; however, its anticipated growth no longer justifies the previous carrying value of its goodwill."The non-cash adjustment to goodwill has no impact on previously reported revenues or operating income and will not result in any future cash expenditures. It will, however, cause the company to report a loss for the fourth quarter and full year of 2004, Pisani said.Stoneridge Inc. is a designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the automotive, medium- and heavy-duty truck, agricultural and off-road vehicle markets. Sales in 2003 were approximately $607 million. Visit Stoneridge Inc.: www.stoneridge.com"