Stoneridge Reports Fourth-Quarter 2008 Results

Proactive Restructuring Efforts Continue

Positive Earnings and Cash Flow Expected in 2009

Company Records Non-Cash Impairment Charges

WARREN, Ohio, February 25, 2009: Stoneridge, Inc. today announced net sales of $158.0 million and a net loss of $108.4 million, or $(4.63) per diluted share, for the fourth quarter ended December 31, 2008. The loss for the quarter included an after-tax non-cash goodwill expense and non-cash deferred tax asset valuation allowance of $108.1 million or ($4.62) per share and $3.4 million or $(0.14) per share for after-tax expenses associated with previously announced restructuring initiatives. As indicated in the Company's press release of February 11, 2009 announcing a delay in its earnings release for the fourth quarter of 2008 to allow time to complete an asset impairment analysis, including goodwill, the effect of the goodwill impairment charges and deferred tax asset valuation allowance ("other non-recurring items") was not included in our previously affirmed guidance of $0.40 to $0.46. Excluding the other non-recurring items, the Company would have reported earnings of $0.45 per diluted share for 2008.

The Company achieved income from continuing operations (excluding restructuring and other non-recurring items) in 2008 of $22.8 million, or $0.98 per share, compared with $17.6 million, or $0.75 per share, in 2007. The Company aggressively pursued restructuring efforts starting in late 2007 and during 2008 to adjust its cost structure and eliminate overhead centers to enhance profitability in robust economic times and protect profitability when market adversity occurs. The Company recorded after-tax restructuring expenses of $12.3 million, or $0.53 per share in 2008, as a result of these restructuring efforts. In accordance with SFAS 142 (Accounting for Goodwill and Other Intangible Assets) and SFAS 109 (Accounting for Income Taxes), the 2008 results also include an after-tax non-cash goodwill impairment charge in the Company's control device segment of $46.1 million, or $1.97 per share, and a non-cash valuation allowance against deferred tax assets of $62.0 million or $2.65 per share. The impact of the non-cash impairment charge and deferred tax asset valuation allowance was driven by adverse equity market conditions that caused a decrease in current market multiples and the Company's stock price as of December 31, 2008.

Net sales decreased $27.5 million, or 14.8 percent, to $158.0 million, compared with $185.5 million for the fourth quarter of 2007. The decrease in net sales was primarily caused by significantly reduced production volumes in the North American passenger car/light truck market, lower production in the European and North American commercial vehicle markets and the impact of foreign currency translation. Foreign currency translation decreased fourth- quarter net sales by approximately $15.0 million compared with the same period in 2007. The sales decrease was partially offset by the strength in the North American agricultural and off-road market.

Net income excluding the restructuring initiatives and the after-tax non- cash goodwill expense and non-cash valuation allowance for the fourth quarter was $3.1 million, or $0.13 per diluted share, compared with net income excluding restructuring charges of $7.3 million, or $0.31 per diluted share, in the fourth quarter of 2007. The decrease in net income was due primarily to the reduced sales volumes described above and the loss of overhead recoveries because of lower production volumes which was the result of restructuring inventories built in the first half of 2008.

"While we are not satisfied with our reported operating results, given the volatility of the markets globally, we responded well in adjusting to lower volumes," said John C. Corey, president and chief executive officer. "In addition, we completed the two significant restructuring initiatives announced in late 2007. Beyond these, we further realigned our cost structure to the most recent market conditions. Excluding restructuring costs and after-tax non-cash goodwill expense and non-cash valuation allowance in the fourth quarter, we earned $0.13 per share."

Corey added, "We are in an extremely volatile time for the transportation industry globally. In this environment, we will continue to adjust our cost structure and target near-term revenue opportunities. Because of our efforts to improve our liquidity, we have $92.7 million in cash available for operating needs or other uses. While the year has not produced the results we expected, I am proud of the work our team has done in 2008."

For the year ended December 31, 2008, net sales were $752.7 million, an increase of $25.6 million or 3.5 percent compared with $727.1 million for the year ended December 31, 2007. The net loss for 2008 was $97.5 million, or $(4.17) per diluted share, compared with net income of $16.7 million, or $0.71 of income per diluted share, in 2007. Earnings per share for 2008 include $(5.15) per share for restructuring expenses, an after-tax non-cash goodwill expense and non-cash deferred tax asset valuation allowance. For the year ended December 31, 2008, the Company achieved income from continuing operations (excluding restructuring and other non-recurring items) of $22.8 million compared with $17.6 million in 2007.

Net cash provided by operating activities for the year was $42.5 million, compared with net cash provided of $33.5 million for the prior year. The increase of $9.0 million in cash provided by operating activities was primarily due to lower accounts receivable balances in the current year. Stoneridge has $92.7 million in cash at the end of 2008 available to support operations as needed. The Company's $183.0 million 11.5% senior notes and asset backed credit facility mature in May 2012 and November 2011, respectively. The Company's asset-backed credit facility remains undrawn and does not contain restrictive performance covenants.

Outlook

"The environment for 2009 will most likely be the most challenging the Company has ever experienced," Corey said. "The same is true for the entire industry given the interdependence of the supply chain to the OEMs. Although we have positioned Stoneridge to weather the storm as we see it now, we have decided not to provide specific earnings guidance at this time, due to the uncertainty of market conditions. However, we expect that Stoneridge should be both earnings and cash flow positive in 2009 based on our expected sales in 2009."

Conference Call on the Web

A live Internet broadcast of Stoneridge's conference call regarding 2008 fourth-quarter results can be accessed at 11 a.m. Eastern time on Wednesday, February 25, 2009, at STONERIDGE, which will also offer a webcast replay.