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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-13337
 STONERIDGE, INC.
 (Exact name of registrant as specified in its charter)
 Ohio
    
    34-1598949(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 9400 East Market Street, Warren, Ohio
    
    44484(Address of principal executive offices)
    
    (Zip Code)
 (330) 856-2443  Registrants telephone number, including area code
  Title of each class
    
    Name of each exchange on which registeredCommon Shares, without par value
    
    New York Stock Exchange
 None
  o þ
  o þ
 þ o
 o
  o þ o
 o þ




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##### 



STONERIDGE, INC. AND SUBSIDIARIES
 INDEX
  
 Page No.PART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    8Item 1B.
    
    Unresolved Staff Comments
    
    
    10Item 2.
    
    Properties
    
    
    11Item 3.
    
    Legal Proceedings
    
    
    12Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    12PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    14Item 6.
    
    Selected Financial Data
    
    
    15Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 8.
    
    Financial Statements and Supplementary Data
    
    
    29Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    70Item 9A.
    
    Controls and Procedures
    
    
    70Item 9B.
    
    Other Information
    
    
    72PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    72Item 11.
    
    Executive Compensation
    
    
    72Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    72Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    73Item 14.
    
    Principal Accounting Fees and Services
    
    
    73PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    73Signatures
    
    
    74EX-10.31EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




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PART I
 
 Item 1. Business.
 Overview
  Products
 Disclosures about Segments of an Enterprise and Related Information
 Vehicle Management & Power Distribution
 Control Devices.
 3




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For the Fiscal Years EndedDecember 31,2006
    
    2005
    
    2004Vehicle Management & Power Distribution:Vehicle electrical and power distribution systems
    
    
    32
    %
    
    
    29
    %
    
    
    28
    %Electronic instrumentation and information display products
    
    
    25
    
    
    
    24
    
    
    
    24Total
    
    
    57
    %
    
    
    53
    %
    
    
    52
    %Control Devices:Actuator and sensor products
    
    
    18
    %
    
    
    21
    %
    
    
    20
    %Switch and sensor products
    
    
    25
    
    
    
    26
    
    
    
    28Total
    
    
    43
    %
    
    
    47
    %
    
    
    48
    %
  Production Materials
  Patents and Intellectual Property
  Industry Cyclicality and Seasonality
   4




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Customers
   For the Fiscal Years EndedDecember 31,2006
    
    2005
    
    2004Navistar International
    
    
    25
    %
    
    
    22
    %
    
    
    21
    %DaimlerChrysler
    
    
    10
    
    
    
    12
    
    
    
    11Ford Motor Company
    
    
    6
    
    
    
    7
    
    
    
    7MAN AG
    
    
    6
    
    
    
    2
    
    
    
    2Deere & Company
    
    
    6
    
    
    
    6
    
    
    
    6General Motors
    
    
    5
    
    
    
    5
    
    
    
    7Other
    
    
    42
    
    
    
    46
    
    
    
    46Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Backlog
  Competition
   Vehicle Management & Power Distribution.
 Control Devices.
 5




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Product Development
       Environmental and Other Regulations
  Employees
  6




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Joint Ventures
   Available Information
   7




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Item 1A. Risk Factors.
 The loss or insolvency of any of our major customers would adversely affect our future results.
  Our business is cyclical and seasonal in nature and downturns in the automotive, medium- and
heavy-duty truck, agricultural and off-road vehicle industries could reduce the sales and
profitability of our business.
  Consolidation among vehicle parts customers and suppliers could make it more difficult for us
to compete favorably.
  Our physical properties and information systems are subject to damage as a result of disasters,
outages or similar events.
  8




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Our business is very competitive and increased competition could reduce our sales.
  We must implement and sustain a competitive technological advantage in producing our products
to compete effectively.
  We may experience increased costs associated with labor unions that could adversely affect our
financial performance and results of operations.
  Compliance with environmental and other governmental regulations could be costly and require us
to make significant expenditures.
  
    
    the discharge of pollutants into the air and water;
    
    the generation, handling, storage, transportation, treatment, and disposal of waste and other materials;
    
    the cleanup of contaminated properties; and
    
    the health and safety of our employees.
  9




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We may incur material product liability costs.
  We are subject to risks related to our international operations.
  
    
    political and economic instability;
    
    restrictive trade policies;
    
    economic conditions in local markets;
    
    currency exchange controls;
    
    labor unrest;
    
    difficulty in obtaining distribution support and potentially adverse tax consequences; and
    
    the imposition of product tariffs and the burden of complying with a wide variety of
international and U.S. export laws.
  The prices that we can charge some of our customers are predetermined and we bear the risk of
costs in excess of our estimates.
  We are dependent on the availability and price of raw materials.
  
 Item 1B. Unresolved Staff Comments.
  10




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Item 2. Properties.
  Owned/
    
    
    
    SquareLocation
    
    Leased
    
    Use
    
    FootageVehicle Management
& Power DistributionPortland, Indiana
    
    Owned
    
    Manufacturing
    
    
    182,000Juarez, Mexico
    
    Owned
    
    Manufacturing/Division Office
    
    
    178,000Chihuahua, Mexico
    
    Owned
    
    Manufacturing/Warehouse
    
    
    135,447El Paso, Texas
    
    Leased
    
    Warehouse
    
    
    93,000Orebro, Sweden
    
    Leased
    
    Manufacturing
    
    
    77,472Monclova, Mexico
    
    Leased
    
    Manufacturing
    
    
    68,436Orwell, Ohio
    
    Owned
    
    Manufacturing
    
    
    62,000Chihuahua, Mexico
    
    Leased
    
    Manufacturing/Warehouse
    
    
    49,250Stockholm, Sweden
    
    Leased
    
    Engineering Office/Division Office
    
    
    41,979Dundee, Scotland
    
    Leased
    
    Manufacturing/Division Office
    
    
    30,000Tallinn, Estonia
    
    Leased
    
    Manufacturing/Office/Warehouse
    
    
    28,352Warren, Ohio
    
    Leased
    
    Division Office
    
    
    24,570Tallinn, Estonia
    
    Leased
    
    Manufacturing/Warehouse
    
    
    21,635Chihuahua, Mexico
    
    Leased
    
    Warehouse
    
    
    10,000Bayonne, France
    
    Leased
    
    Sales Office/Warehouse
    
    
    8,267Madrid, Spain
    
    Leased
    
    Sales Office/Warehouse
    
    
    1,560Stuttgart, Germany
    
    Leased
    
    Sales Office/Engineering Office
    
    
    1,000Control DevicesLexington, Ohio
    
    Owned
    
    Manufacturing/Division Office
    
    
    152,742Canton, Massachusetts
    
    Owned
    
    Manufacturing/Division Office
    
    
    132,560Boston, Massachusetts
    
    Owned
    
    Manufacturing/ (Vacant)
    
    
    130,000Sarasota, Florida
    
    Owned
    
    Manufacturing/Division Office
    
    
    115,000Mitcheldean, England
    
    Leased
    
    Manufacturing/Division Office
    
    
    74,790Cheltenham, England
    
    Leased
    
    Manufacturing/ (Vacant)
    
    
    58,500Canton, Massachusetts
    
    Leased
    
    Manufacturing
    
    
    58,077Suzhou, China
    
    Leased
    
    Manufacturing/Division Office
    
    
    18,923Juarez, Mexico
    
    Leased
    
    Warehouse
    
    
    12,884Lexington, Ohio
    
    Owned
    
    Manufacturing
    
    
    10,120Sarasota, Florida
    
    Owned
    
    Warehouse
    
    
    7,500Lexington, Ohio
    
    Leased
    
    Warehouse
    
    
    5,000CorporateNovi, Michigan
    
    Leased
    
    Sales Office/Engineering Office
    
    
    9,400Warren, Ohio
    
    Owned
    
    Headquarters
    
    
    7,500Shanghai, China
    
    Leased
    
    Purchasing Office/Sales Office
    
    
    270Joint VenturesManaus, Brazil
    
    Owned
    
    Manufacturing/Fabricating/Warehouse
    
    
    73,550Pune, India
    
    Owned
    
    Manufacturing/Engineering/Purchasing/Sales/Warehouse
    
    
    61,000São Paulo, Brazil
    
    Owned
    
    Manufacturing/Purchasing/Engineering/Sales
    
    
    38,632
 11




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Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  Executive Officers of the Company
  Name
    
    Age
    
    PositionJohn C. Corey
    
    
    59
    
    
    President, Chief Executive Officer and DirectorGeorge E. Strickler
    
    
    59
    
    
    Executive Vice President, Chief Financial Officer and TreasurerEdward F. Mosel
    
    
    58
    
    
    Vice President and President of the Control Devices DivisionThomas A. Beaver
    
    
    53
    
    
    Vice President of Global Sales and Systems EngineeringAndrew Mark Oakes
    
    
    48
    
    
    Vice President and General Manager of China OperationsMark J. Tervalon
    
    
    40
    
    
    Vice President and President of the Vehicle Management & Power Distribution
Division
 John C. Corey, President, Chief Executive Officer and Director.
 George E. Strickler, Executive Vice President, Chief Financial Officer and Treasurer.
 Edward F. Mosel, Vice President and President of the Control Devices Division.
 Thomas A. Beaver, Vice President of Global Sales and Systems Engineering.
 12




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##### Table of Contents



Andrew Mark Oakes, Vice President and General Manager of China Operations.
 Mark J. Tervalon, Vice President and President of the Vehicle Management & Power Distribution
Division.
 13




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
    High
    
    Low2006
    
    April 1
    
    $
    7.11
    
    
    $
    4.95July 1
    
    $
    8.45
    
    
    $
    5.60September 30
    
    $
    9.89
    
    
    $
    7.05December 31
    
    $
    8.32
    
    
    $
    6.712005
    
    April 2
    
    $
    15.20
    
    
    $
    11.20July 2
    
    $
    12.47
    
    
    $
    6.10October 1
    
    $
    10.40
    
    
    $
    6.60December 31
    
    $
    8.80
    
    
    $
    5.95
   
 2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006Stoneridge, Inc.
    
    
    
    100.00
    
    
    
    
    130.77
    
    
    
    
    165.38
    
    
    
    
    166.26
    
    
    
    
    72.75
    
    
    
    
    90.00Hemscott Group Index
    
    
    
    100.00
    
    
    
    
    89.18
    
    
    
    
    131.69
    
    
    
    
    135.54
    
    
    
    
    120.5
    
    
    
    
    135.77NYSE Market Index
    
    
    
    100.00
    
    
    
    
    81.69
    
    
    
    
    105.82
    
    
    
    
    119.5
    
    
    
    
    129.37
    
    
    
    
    151.57
  14




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Item 6. Selected Financial Data.
  For the Fiscal Years Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(in thousands, except per share data)Statement of Operations Data:Net sales:Vehicle Management & Power Distribution
    
    $
    425,185
    
    
    $
    375,226
    
    
    $
    368,625
    
    
    $
    289,653
    
    
    $
    273,654Control Devices
    
    
    304,804
    
    
    
    316,064
    
    
    
    331,622
    
    
    
    333,051
    
    
    
    377,021Eliminations
    
    
    (21,290
    )
    
    
    (19,706
    )
    
    
    (18,452
    )
    
    
    (16,039
    )
    
    
    (14,168
    )Consolidated
    
    $
    708,699
    
    
    $
    671,584
    
    
    $
    681,795
    
    
    $
    606,665
    
    
    $
    636,507Gross profit
    
    $
    158,906
    
    
    $
    148,588
    
    
    $
    174,987
    
    
    $
    156,030
    
    
    $
    165,319Operating income (loss) (A)
    
    $
    35,063
    
    
    $
    23,303
    
    
    $
    (125,570
    )
    
    $
    58,370
    
    
    $
    74,320Income (loss) before income taxes and
cumulative effect of accounting change (A)Vehicle Management & Power Distribution
    
    $
    24,473
    
    
    $
    13,573
    
    
    $
    29,623
    
    
    $
    13,772
    
    
    $
    9,168Control Devices
    
    
    10,396
    
    
    
    5,640
    
    
    
    (150,021
    )
    
    
    48,033
    
    
    
    69,366Other corporate activities
    
    
    6,392
    
    
    
    8,217
    
    
    
    (4,477
    )
    
    
    (3,644
    )
    
    
    (7,344
    )Corporate interest
    
    
    (21,622
    )
    
    
    (22,994
    )
    
    
    (24,281
    )
    
    
    (27,141
    )
    
    
    (33,101
    )Loss on extinguishment of debt (B)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,771
    )Consolidated
    
    $
    19,639
    
    
    $
    4,436
    
    
    $
    (149,156
    )
    
    $
    31,020
    
    
    $
    32,318Income (loss) before cumulative effect of
accounting change (C)
    
    $
    14,513
    
    
    $
    933
    
    
    $
    (92,503
    )
    
    $
    21,379
    
    
    $
    21,056Net income (loss) (C)
    
    $
    14,513
    
    
    $
    933
    
    
    $
    (92,503
    )
    
    $
    21,379
    
    
    $
    (48,778
    )Basic income (loss) before cumulative effect of
accounting change per share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    (4.09
    )
    
    $
    0.95
    
    
    $
    0.94Diluted income (loss) before cumulative effect
of accounting change per share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    (4.09
    )
    
    $
    0.94
    
    
    $
    0.93Basic net income (loss) per share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    (4.09
    )
    
    $
    0.95
    
    
    $
    (2.18
    )Diluted net income (loss) per share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    (4.09
    )
    
    $
    0.94
    
    
    $
    (2.16
    )Other Data:Product development expenses
    
    $
    40,840
    
    
    $
    39,193
    
    
    $
    36,145
    
    
    $
    28,714
    
    
    $
    25,332Capital expenditures
    
    
    25,895
    
    
    
    28,934
    
    
    
    23,917
    
    
    
    26,382
    
    
    
    14,656Depreciation and amortization (D)
    
    
    26,180
    
    
    
    26,157
    
    
    
    24,802
    
    
    
    22,188
    
    
    
    21,900Balance Sheet Data (at period end):Working capital
    
    $
    135,915
    
    
    $
    116,689
    
    
    $
    123,317
    
    
    $
    72,832
    
    
    $
    87,112Total assets
    
    
    501,807
    
    
    
    463,038
    
    
    
    473,001
    
    
    
    573,001
    
    
    
    564,461Long-term debt, less current portion
    
    
    200,000
    
    
    
    200,000
    
    
    
    200,052
    
    
    
    200,245
    
    
    
    248,918Shareholders equity
    
    
    178,622
    
    
    
    153,991
    
    
    
    155,605
    
    
    
    243,406
    
    
    
    215,902
 15




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(A)
    
    Our 2004 operating loss, loss before income taxes and cumulative effect of accounting change,
net loss, and related basic and diluted loss per share amounts include a non-cash, pre-tax
goodwill impairment loss of $183,450, which was recorded in the fourth quarter of 2004.(B)
    
    During the second quarter of 2002, the Company recognized a non-cash, pre-tax loss on
extinguishment of debt of $5,771, as the result of an early extinguishment of debt.(C)
    
    In accordance with the transition provisions of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible
Assets, we determined during 2002 that the carrying value of the Companys goodwill exceeded
its fair value. Effective January 1, 2002, we recorded a non-cash, after-tax impairment charge
of $69,834 as a cumulative effect of accounting change.(D)
    
    These amounts represent depreciation and amortization on fixed and finite-lived intangible
assets. 16




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Overview
          Results of Operations
  17




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Fiscal Year Ended December 31, 2006 Compared To Fiscal Year Ended December 31, 2005
 Net Sales.
 For the Fiscal Years Ended December 31,
    
    
    $ Increase /
    
    
    % Increase /2006
    
    
    2005
    
    
    (Decrease)
    
    
    (Decrease)Vehicle Management & Power
Distribution
    
    $
    407,706
    
    
    
    57.5
    %
    
    $
    358,683
    
    
    
    53.4
    %
    
    $
    49,023
    
    
    
    13.7
    %Control Devices
    
    
    300,993
    
    
    
    42.5
    
    
    
    312,901
    
    
    
    46.6
    
    
    
    (11,908
    )
    
    
    (3.8
    )%Total net sales
    
    $
    708,699
    
    
    
    100.0
    %
    
    $
    671,584
    
    
    
    100.0
    %
    
    $
    37,115
    
    
    
    5.5
    %
   For the Fiscal Years Ended December 31,
    
    
    $ Increase /
    
    
    % Increase /2006
    
    
    2005
    
    
    (Decrease)
    
    
    (Decrease)North America
    
    $
    541,541
    
    
    
    76.4
    %
    
    $
    532,523
    
    
    
    79.3
    %
    
    $
    9,018
    
    
    
    1.7
    %Europe and other
    
    
    167,158
    
    
    
    23.6
    
    
    
    139,061
    
    
    
    20.7
    
    
    
    28,097
    
    
    
    20.2
    %Total net sales
    
    $
    708,699
    
    
    
    100.0
    %
    
    $
    671,584
    
    
    
    100.0
    %
    
    $
    37,115
    
    
    
    5.5
    %
  18




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For the Fiscal Years Ended December 31,
    
    
    $ Increase /2006
    
    
    2005
    
    
    (Decrease)Net Sales
    
    $
    708,699
    
    
    
    100.0
    %
    
    $
    671,584
    
    
    
    100.0
    %
    
    $
    37,115Costs and Expenses:Cost of goods sold
    
    
    549,793
    
    
    
    77.6
    
    
    
    522,996
    
    
    
    77.9
    
    
    
    26,797Selling, general and administrative
    
    
    124,302
    
    
    
    17.5
    
    
    
    116,836
    
    
    
    17.4
    
    
    
    7,466Provision for doubtful accounts
    
    
    236
    
    
    
    0.0
    
    
    
    3,711
    
    
    
    0.6
    
    
    
    (3,475
    )Gain on sale of property, plant & equipment, net
    
    
    (1,303
    )
    
    
    (0.2
    )
    
    
    (360
    )
    
    
    (0.1
    )
    
    
    (943
    )Restructuring charges
    
    
    608
    
    
    
    0.1
    
    
    
    5,098
    
    
    
    0.7
    
    
    
    (4,490
    )Operating Income
    
    
    35,063
    
    
    
    5.0
    
    
    
    23,303
    
    
    
    3.5
    
    
    
    11,760Interest expense, net
    
    
    21,744
    
    
    
    3.1
    
    
    
    23,872
    
    
    
    3.6
    
    
    
    (2,128
    )Equity in earnings of investees
    
    
    (7,125
    )
    
    
    (1.0
    )
    
    
    (4,052
    )
    
    
    (0.6
    )
    
    
    (3,073
    )Other (income) loss, net
    
    
    805
    
    
    
    0.1
    
    
    
    (953
    )
    
    
    (0.1
    )
    
    
    1,758Income Before Income Taxes
    
    
    19,639
    
    
    
    2.8
    
    
    
    4,436
    
    
    
    0.6
    
    
    
    15,203Provision for income taxes
    
    
    5,126
    
    
    
    0.7
    
    
    
    3,503
    
    
    
    0.5
    
    
    
    1,623Net Income
    
    $
    14,513
    
    
    
    2.1
    %
    
    $
    933
    
    
    
    0.1
    %
    
    $
    13,580
 Cost of Goods Sold.
 Selling, General and Administrative Expenses.
 Provision for Doubtful Accounts.
 Restructuring Charges.
 Interest Expense, Net.
 Equity in Earnings of Investees.
 19




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##### Table of Contents



Other (Income) Loss, Net.
 Income Before Income Taxes.
 For the Fiscal YearsEnded December 31,
    
    
    $ Increase /2006
    
    
    2005
    
    
    (Decrease)Vehicle Management & Power Distribution
    
    $
    24,473
    
    
    $
    13,573
    
    
    $
    10,900Control Devices
    
    
    10,396
    
    
    
    5,640
    
    
    
    4,756Other corporate activities
    
    
    6,392
    
    
    
    8,217
    
    
    
    (1,825
    )Corporate interest expense
    
    
    (21,622
    )
    
    
    (22,994
    )
    
    
    1,372Income before income taxes
    
    $
    19,639
    
    
    $
    4,436
    
    
    $
    15,203
    For the Fiscal Years Ended December 31,
    
    
    $ Increase /
    
    
    % Increase /2006
    
    
    2005
    
    
    (Decrease)
    
    
    (Decrease)North America
    
    $
    10,847
    
    
    
    55.2
    %
    
    $
    7,208
    
    
    
    162.5
    %
    
    $
    3,639
    
    
    
    50.5
    %Europe and other
    
    
    8,792
    
    
    
    44.8
    
    
    
    (2,772
    )
    
    
    (62.5
    )
    
    
    11,564
    
    
    
    417.2
    %Income before income taxes
    
    $
    19,639
    
    
    
    100.0
    %
    
    $
    4,436
    
    
    
    100.0
    %
    
    $
    15,203
    
    
    
    342.7
    %
  Provision (Benefit) for Income Taxes.
 20




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##### Table of Contents



Fiscal Year Ended December 31, 2005 Compared To Fiscal Year Ended December 31, 2004
 Net Sales.
 For the Fiscal Years Ended December 31,
    
    
    $ Increase /
    
    
    % Increase /2005
    
    
    2004
    
    
    (Decrease)
    
    
    (Decrease)Vehicle Management & Power
Distribution
    
    $
    358,683
    
    
    
    53.4
    %
    
    $
    352,706
    
    
    
    51.7
    %
    
    $
    5,977
    
    
    
    1.7
    %Control Devices
    
    
    312,901
    
    
    
    46.6
    
    
    
    329,089
    
    
    
    48.3
    
    
    
    (16,188
    )
    
    
    (4.9
    )%Total net sales
    
    $
    671,584
    
    
    
    100.0
    %
    
    $
    681,795
    
    
    
    100.0
    %
    
    $
    (10,211
    )
    
    
    (1.5
    )%
   For the Fiscal Years Ended December 31,
    
    
    $ Increase /
    
    
    % Increase /2005
    
    
    2004
    
    
    (Decrease)
    
    
    (Decrease)North America
    
    $
    532,523
    
    
    
    79.3
    %
    
    $
    539,412
    
    
    
    79.1
    %
    
    $
    (6,889
    )
    
    
    (1.3
    )%Europe and other
    
    
    139,061
    
    
    
    20.7
    
    
    
    142,383
    
    
    
    20.9
    
    
    
    (3,322
    )
    
    
    (2.3
    )%Total net sales
    
    $
    671,584
    
    
    
    100.0
    %
    
    $
    681,795
    
    
    
    100.0
    %
    
    $
    (10,211
    )
    
    
    (1.5
    )%
   For the Fiscal Years Ended December 31,
    
    
    $ Increase /2005
    
    
    2004
    
    
    (Decrease)Net Sales
    
    $
    671,584
    
    
    
    100.0
    %
    
    $
    681,795
    
    
    
    100.0
    %
    
    $
    (10,211
    )Costs and Expenses:Cost of goods sold
    
    
    522,996
    
    
    
    77.9
    
    
    
    506,808
    
    
    
    74.3
    
    
    
    16,188Selling, general and administrative
    
    
    116,836
    
    
    
    17.4
    
    
    
    114,480
    
    
    
    16.8
    
    
    
    2,356Provision for doubtful accounts
    
    
    3,711
    
    
    
    0.6
    
    
    
    354
    
    
    
    0.1
    
    
    
    3,357(Gain) loss on sale of property,
plant and equipment, net
    
    
    (360
    )
    
    
    (0.1
    )
    
    
    186
    
    
    
    0.0
    
    
    
    (546
    )Goodwill impairment charge
    
    
    
    
    
    
    
    
    
    
    183,450
    
    
    
    26.9
    
    
    
    (183,450
    )Restructuring charges
    
    
    5,098
    
    
    
    0.7
    
    
    
    2,087
    
    
    
    0.3
    
    
    
    3,011Operating Income (loss)
    
    
    23,303
    
    
    
    3.5
    
    
    
    (125,570
    )
    
    
    (18.4
    )
    
    
    148,873Interest expense, net
    
    
    23,872
    
    
    
    3.6
    
    
    
    24,456
    
    
    
    3.6
    
    
    
    (584
    )Equity in earnings of investees
    
    
    (4,052
    )
    
    
    (0.6
    )
    
    
    (1,698
    )
    
    
    (0.2
    )
    
    
    (2,354
    )Other (income) loss, net
    
    
    (953
    )
    
    
    (0.1
    )
    
    
    828
    
    
    
    0.1
    
    
    
    (1,781
    )Income (Loss) Before Income Taxes
    
    
    4,436
    
    
    
    0.6
    
    
    
    (149,156
    )
    
    
    (21.9
    )
    
    
    153,592Provision for income taxes
    
    
    3,503
    
    
    
    0.5
    
    
    
    (56,653
    )
    
    
    (8.3
    )
    
    
    60,156Net Income (Loss)
    
    $
    933
    
    
    
    0.1
    %
    
    $
    (92,503
    )
    
    
    (13.6
    )%
    
    $
    93,436
 21




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##### Table of Contents



Cost of Goods Sold.
 Selling, General and Administrative Expenses.
 Provision for Doubtful Accounts.
 Restructuring Charges
 Equity in Earnings of Investees.
 Other (Income) Loss, Net.
 Income (Loss) Before Income Taxes.
 For the Fiscal YearsEnded December 31,
    
    
    $ Increase /2005
    
    
    2004
    
    
    (Decrease)Vehicle Management & Power Distribution
    
    $
    13,573
    
    
    $
    29,623
    
    
    $
    (16,050
    )Control Devices
    
    
    5,640
    
    
    
    (150,021
    )
    
    
    155,661Other corporate activities
    
    
    8,217
    
    
    
    (4,477
    )
    
    
    12,694Corporate interest expense
    
    
    (22,994
    )
    
    
    (24,281
    )
    
    
    1,287Income (loss) before income taxes
    
    $
    4,436
    
    
    $
    (149,156
    )
    
    $
    153,592
   22




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##### Table of Contents



For the Fiscal Years Ended December 31,
    
    
    $ Increase /
    
    
    % Increase /2005
    
    
    2004
    
    
    (Decrease)
    
    
    (Decrease)North America
    
    $
    7,208
    
    
    
    162.5
    %
    
    $
    (157,868
    )
    
    
    105.8
    %
    
    $
    165,076
    
    
    
    104.6
    %Europe and other
    
    
    (2,772
    )
    
    
    (62.5
    )
    
    
    8,712
    
    
    
    (5.8
    )
    
    
    (11,484
    )
    
    
    (131.8
    )%Income (loss) before income taxes
    
    $
    4,436
    
    
    
    100.0
    %
    
    $
    (149,156
    )
    
    
    100.0
    %
    
    $
    153,592
    
    
    
    103.0
    %
  Provision (Benefit) for Income Taxes.
 Liquidity and Capital Resources
      23




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##### Table of Contents



Less than 1Contractual Obligations:
    
    Total
    
    
    year
    
    
    2-3 years
    
    
    4-5 years
    
    
    After 5 yearsLong-term debt
    
    $
    200,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    200,000Operating leases
    
    
    17,839
    
    
    
    5,737
    
    
    
    6,499
    
    
    
    1,493
    
    
    
    4,110Employee benefit plans
    
    
    9,988
    
    
    
    763
    
    
    
    1,527
    
    
    
    1,835
    
    
    
    5,863Total contractual obligations
    
    $
    227,827
    
    
    $
    6,500
    
    
    $
    8,026
    
    
    $
    3,328
    
    
    $
    209,973
   Inflation and International Presence
  Critical Accounting Policies and Estimates
 Estimates.
   Revenue Recognition and Sales Commitments.
 24




---



##### Table of Contents



Warranties.
 Allowance for Doubtful Accounts.
 Contingencies.
 Accounting for Contingencies
 Inventory Valuation.
 Goodwill. Goodwill and Other Intangible
Assets
 Share-Based Compensation.
 25




---



##### Table of Contents



Pension and Other Postretirement Benefits.
    Deferred Income Taxes.
 Accounting for Income Taxes
 Recently Issued Accounting Standards
  Accounting for Uncertainty in Income Taxes
 Fair Value Measurements
 26




---



##### Table of Contents



Accounting for Planned Major Maintenance Activities
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statements,
 Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87,
88, 106, and 132(
 Forward-Looking Statements
  
    
    the loss or bankruptcy of a major customer;
    
    the costs and timing of facility closures, business realignment, or similar actions;
    
    a significant change in automotive, medium- and heavy-duty or agricultural and off-highway vehicle production;
    
    our ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions;
    
    a significant change in general economic conditions in any of the various countries in which we operate;
    
    labor disruptions at our facilities or at any of our significant customers or suppliers;
    
    the ability of our suppliers to supply us with parts and components at competitive prices on a timely basis;
    
    the amount of debt and the restrictive covenants contained in our credit facility;
    
    customer acceptance of new products;
    
    capital availability or costs, including changes in interest rates or market perceptions;
    
    the successful integration of any acquired businesses;
    
    the occurrence or non-occurrence of circumstances beyond our control; and
    
    those items described in Part I, Item IA (Risk Factors).
 27




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rate Risk
  Commodity Price Risk
  Foreign Currency Exchange Risk
   28




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
 PageConsolidated Financial Statements:Report of Independent Registered Public Accounting Firm
    
    
    30Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    31Consolidated Statements of Operations for the Fiscal Years Ended December 31, 2006, 2005 and 2004
    
    
    32Consolidated Statements of Cash Flows for the Fiscal Years Ended December 31, 2006, 2005 and 2004
    
    
    33Consolidated Statements of Shareholders Equity for the Fiscal Years Ended December 31, 2006, 2005 and 2004
    
    
    34Notes to Consolidated Financial Statements
    
    
    35Financial Statement Schedule:Schedule IIValuation and Qualifying Accounts
    
    
    69
 29




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      Internal
Control-Integrated Framework
  
 30




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands)
 December 31,2006
    
    
    2005ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    65,882
    
    
    $
    40,784Accounts receivable, less allowances for
doubtful accounts of $3,831 and $3,829,
respectively
    
    
    106,985
    
    
    
    100,362Inventories, net
    
    
    58,521
    
    
    
    53,791Prepaid expenses and other
    
    
    13,448
    
    
    
    14,490Deferred income taxes
    
    
    9,196
    
    
    
    9,253Total current assets
    
    
    254,032
    
    
    
    218,680Long-Term Assets:Property, plant and equipment, net
    
    
    114,586
    
    
    
    113,478Other Assets:Goodwill
    
    
    65,176
    
    
    
    65,176Investments and other, net
    
    
    30,875
    
    
    
    26,491Deferred income taxes
    
    
    37,138
    
    
    
    39,213Total long-term assets
    
    
    247,775
    
    
    
    244,358Total Assets
    
    $
    501,807
    
    
    $
    463,038LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Current portion of long-term debt
    
    $
    
    
    
    $
    44Accounts payable
    
    
    72,493
    
    
    
    55,344Accrued expenses and other
    
    
    45,624
    
    
    
    46,603Total current liabilities
    
    
    118,117
    
    
    
    101,991Long-Term Liabilities:Long-term debt, net of current portion
    
    
    200,000
    
    
    
    200,000Deferred income taxes
    
    
    1,923
    
    
    
    923Other liabilities
    
    
    3,145
    
    
    
    6,133Total long-term liabilities
    
    
    205,068
    
    
    
    207,056Shareholders Equity:Preferred Shares, without par value,
authorized 5,000 shares, none issued
    
    
    
    
    
    
    Common Shares, without par value, authorized
60,000 shares, issued 23,990 and 23,232
shares and outstanding 23,804 and 23,178 shares,
respectively, with no stated value
    
    
    
    
    
    
    Additional paid-in capital
    
    
    150,078
    
    
    
    147,440Common Shares held in treasury, 186 and 54
shares, respectively, at cost
    
    
    (151
    )
    
    
    (65
    )Retained earnings
    
    
    21,701
    
    
    
    7,188Accumulated other comprehensive income (loss)
    
    
    6,994
    
    
    
    (572
    )Total shareholders equity
    
    
    178,622
    
    
    
    153,991Total Liabilities and Shareholders Equity
    
    $
    501,807
    
    
    $
    463,038
  31




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STONERIDGE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004Net Sales
    
    $
    708,699
    
    
    $
    671,584
    
    
    $
    681,795Costs and Expenses:Cost of goods sold
    
    
    549,793
    
    
    
    522,996
    
    
    
    506,808Selling, general and administrative
    
    
    124,302
    
    
    
    116,836
    
    
    
    114,480Provision for doubtful accounts
    
    
    236
    
    
    
    3,711
    
    
    
    354(Gain) loss on sale of property, plant and equipment, net
    
    
    (1,303
    )
    
    
    (360
    )
    
    
    186Goodwill impairment charge
    
    
    
    
    
    
    
    
    
    
    183,450Restructuring charges
    
    
    608
    
    
    
    5,098
    
    
    
    2,087Operating Income (Loss)
    
    
    35,063
    
    
    
    23,303
    
    
    
    (125,570
    )Interest expense, net
    
    
    21,744
    
    
    
    23,872
    
    
    
    24,456Equity in earnings of investees
    
    
    (7,125
    )
    
    
    (4,052
    )
    
    
    (1,698
    )Other (income) loss, net
    
    
    805
    
    
    
    (953
    )
    
    
    828Income (Loss) Before Income Taxes
    
    
    19,639
    
    
    
    4,436
    
    
    
    (149,156
    )Provision (benefit) for income taxes
    
    
    5,126
    
    
    
    3,503
    
    
    
    (56,653
    )Net Income (Loss)
    
    $
    14,513
    
    
    $
    933
    
    
    $
    (92,503
    )Basic net income (loss) per share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    (4.09
    )Basic weighted average shares outstanding
    
    
    22,866
    
    
    
    22,709
    
    
    
    22,622Diluted net income (loss) per share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    (4.09
    )Diluted weighted average shares outstanding
    
    
    23,062
    
    
    
    22,775
    
    
    
    22,622
  32




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STONERIDGE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004OPERATING ACTIVITIES:Net income (loss)
    
    $
    14,513
    
    
    $
    933
    
    
    $
    (92,503
    )Adjustments to reconcile net income to net cash provided (used) by
operating activities -Depreciation
    
    
    25,904
    
    
    
    25,861
    
    
    
    25,137Amortization
    
    
    1,657
    
    
    
    1,560
    
    
    
    1,620Deferred income taxes
    
    
    3,466
    
    
    
    815
    
    
    
    (57,563
    )Earnings of equity method investees, less dividends received
    
    
    (3,455
    )
    
    
    (1,894
    )
    
    
    (1,639
    )(Gain) loss on sale of fixed assets
    
    
    (1,303
    )
    
    
    (360
    )
    
    
    186Gain on sale of partnership interest
    
    
    (1,627
    )
    
    
    
    
    
    
    Share-based compensation expense
    
    
    1,953
    
    
    
    1,695
    
    
    
    1,389Postretirement benefit settlement gain
    
    
    (1,242
    )
    
    
    
    
    
    
    Goodwill impairment charge
    
    
    
    
    
    
    
    
    
    
    183,450Changes in operating assets and liabilities -Accounts receivable, net
    
    
    (2,739
    )
    
    
    (3,516
    )
    
    
    (9,511
    )Inventories, net
    
    
    (2,350
    )
    
    
    517
    
    
    
    (6,981
    )Prepaid expenses and other
    
    
    1,742
    
    
    
    (3,744
    )
    
    
    (440
    )Other assets
    
    
    2,228
    
    
    
    (1,762
    )
    
    
    505Accounts payable
    
    
    14,084
    
    
    
    505
    
    
    
    2,596Accrued expenses and other
    
    
    (6,291
    )
    
    
    (1,549
    )
    
    
    2,030Net cash provided by operating activities
    
    
    46,540
    
    
    
    19,061
    
    
    
    48,276INVESTING ACTIVITIES:Capital expenditures
    
    
    (25,895
    )
    
    
    (28,934
    )
    
    
    (23,917
    )Proceeds from sale of fixed assets
    
    
    2,266
    
    
    
    1,664
    
    
    
    1Proceeds from sale of partnership interest
    
    
    1,153
    
    
    
    
    
    
    
    Business acquisitions and other
    
    
    (2,133
    )
    
    
    (282
    )
    
    
    (702
    )Collection of loan receivable from joint venture
    
    
    
    
    
    
    
    
    
    
    4,695Net cash used by investing activities
    
    
    (24,609
    )
    
    
    (27,552
    )
    
    
    (19,923
    )FINANCING ACTIVITIES:Repayments of long-term debt
    
    
    (44
    )
    
    
    (118
    )
    
    
    (524
    )Share-based compensation activity
    
    
    301
    
    
    
    1
    
    
    
    (380
    )Other financing costs
    
    
    (150
    )
    
    
    (241
    )
    
    
    (134
    )Net cash provided (used) by financing activities
    
    
    107
    
    
    
    (358
    )
    
    
    (1,038
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    3,060
    
    
    
    (2,699
    )
    
    
    875Net change in cash and cash equivalents
    
    
    25,098
    
    
    
    (11,548
    )
    
    
    28,190Cash and cash equivalents at beginning of period
    
    
    40,784
    
    
    
    52,332
    
    
    
    24,142Cash and cash equivalents at end of period
    
    $
    65,882
    
    
    $
    40,784
    
    
    $
    52,332Supplemental disclosure of cash flow information:Cash paid for interest, net
    
    $
    20,565
    
    
    $
    22,683
    
    
    $
    23,321Cash paid for income taxes, net
    
    $
    2,394
    
    
    $
    4,891
    
    
    $
    4,536
  33




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STONERIDGE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 (in thousands)
 Number of
    
    
    Number of
    
    
    
    
    
    
    Common
    
    
    
    
    
    
    Accumulated OtherCommon
    
    
    Treasury
    
    
    Additional
    
    
    Shares Held
    
    
    Retained
    
    
    Comprehensive
    
    
    Total Shareholders
    
    
    ComprehensiveShares
    
    
    Shares
    
    
    Paid-in Capital
    
    
    in Treasury
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Equity
    
    
    Income (Loss)BALANCE, DECEMBER 31, 2003
    
    
    22,459
    
    
    
    
    
    
    $
    143,535
    
    
    
    
    
    
    $
    98,758
    
    
    $
    1,113
    
    
    $
    243,406Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92,503
    )
    
    
    
    
    
    
    (92,503
    )
    
    $
    (92,503
    )Exercise of share options
    
    
    221
    
    
    
    
    
    
    
    840
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    840
    
    
    
    Issuance of restricted Common Shares
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited restricted Common Shares
    
    
    (8
    )
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share-based
compensation matters
    
    
    
    
    
    
    
    
    
    
    1,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,389
    
    
    
    Other comprehensive income (loss):Minimum pension liability adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,224
    )
    
    
    (2,224
    )
    
    
    (2,224
    )Unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    12
    
    
    
    12Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,685
    
    
    
    4,685
    
    
    
    4,685Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (90,030
    )BALANCE, DECEMBER 31, 2004
    
    
    22,780
    
    
    
    8
    
    
    
    145,764
    
    
    
    
    
    
    
    6,255
    
    
    
    3,586
    
    
    
    155,605Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    933
    
    
    
    
    
    
    
    933
    
    
    
    933Exercise of share options
    
    
    10
    
    
    
    
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    Issuance of restricted Common Shares
    
    
    434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited restricted Common Shares
    
    
    (39
    )
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchased Common Shares for treasury
    
    
    (7
    )
    
    
    7
    
    
    
    
    
    
    
    (65
    )
    
    
    
    
    
    
    
    
    
    
    (65
    )
    
    
    Share-based compensation matters
    
    
    
    
    
    
    
    
    
    
    1,628
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,628
    
    
    
    Other comprehensive income (loss):Minimum pension liability adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396
    
    
    
    396
    
    
    
    396Unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89
    
    
    
    89
    
    
    
    89Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,643
    )
    
    
    (4,643
    )
    
    
    (4,643
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (3,225
    )BALANCE, DECEMBER 31, 2005
    
    
    23,178
    
    
    
    54
    
    
    
    147,440
    
    
    
    (65
    )
    
    
    7,188
    
    
    
    (572
    )
    
    
    153,991Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    
    
    
    
    14,513
    
    
    
    14,513Exercise of share options
    
    
    64
    
    
    
    
    
    
    
    393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393
    
    
    
    Issuance of restricted Common Shares
    
    
    694
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited restricted Common Shares
    
    
    (118
    )
    
    
    118
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchased Common Shares for treasury
    
    
    (14
    )
    
    
    14
    
    
    
    
    
    
    
    (86
    )
    
    
    
    
    
    
    
    
    
    
    (86
    )
    
    
    Share-based compensation matters
    
    
    
    
    
    
    
    
    
    
    2,245
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,245
    
    
    
    Other comprehensive income (loss):Minimum pension liability adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,625
    
    
    
    1,625
    
    
    
    1,625Cumulative effect of adopting
SFAS No. 158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized loss on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84
    )
    
    
    (84
    )
    
    
    (84
    )Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,025
    
    
    
    6,025
    
    
    
    6,025Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    22,079BALANCE, DECEMBER 31, 2006
    
    
    23,804
    
    
    
    186
    
    
    $
    150,078
    
    
    $
    (151
    )
    
    $
    21,701
    
    
    $
    6,994
    
    
    $
    178,622
  34




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (in thousands, except share and per share data, unless otherwise indicated)
 1. Organization and Nature of Business
  2. Summary of Significant Accounting Policies
 Basis of Presentation
   Cash and Cash Equivalents
  Accounts Receivable and Concentration of Credit Risk
  For the Fiscal Years EndedDecember 31,2006
    
    2005
    
    2004Navistar International
    
    
    25
    %
    
    
    22
    %
    
    
    21
    %DaimlerChrysler
    
    
    10
    
    
    
    12
    
    
    
    11Ford Motor Company
    
    
    6
    
    
    
    7
    
    
    
    7MAN AG
    
    
    6
    
    
    
    2
    
    
    
    2Deere & Company
    
    
    6
    
    
    
    6
    
    
    
    6General Motors
    
    
    5
    
    
    
    5
    
    
    
    7Other
    
    
    42
    
    
    
    46
    
    
    
    46Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  Inventories
  35




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  2006
    
    
    2005Raw materials
    
    $
    39,832
    
    
    $
    34,026Work in progress
    
    
    8,196
    
    
    
    8,644Finished goods
    
    
    12,614
    
    
    
    12,400Total inventories
    
    
    60,642
    
    
    
    55,070Less: LIFO reserve
    
    
    (2,121
    )
    
    
    (1,279
    )Inventories, net
    
    $
    58,521
    
    
    $
    53,791
 Property, Plant and Equipment
  2006
    
    
    2005Land and land improvements
    
    $
    4,654
    
    
    $
    5,370Buildings and improvements
    
    
    44,526
    
    
    
    43,954Machinery and equipment
    
    
    130,323
    
    
    
    113,377Office furniture and fixtures
    
    
    36,103
    
    
    
    30,799Tooling
    
    
    80,579
    
    
    
    72,523Vehicles
    
    
    470
    
    
    
    486Leasehold improvements
    
    
    2,190
    
    
    
    1,763Construction in progress
    
    
    18,835
    
    
    
    17,827Total property, plant and equipment
    
    
    317,680
    
    
    
    286,099Less: Accumulated depreciation
    
    
    (203,094
    )
    
    
    (172,621
    )Property, plant and equipment, net
    
    $
    114,586
    
    
    $
    113,478
  Buildings and improvements
    
    1040 yearsMachinery and equipment
    
    520 yearsOffice furniture and fixtures
    
    310 yearsTooling
    
    25 yearsVehicles
    
    35 yearsLeasehold improvements
    
    38 years
  Goodwill and Other Intangible Assets
 Goodwill and
Other Intangible Assets
 36




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
      2006
    
    
    2005Patents:Gross carrying amount
    
    $
    2,779
    
    
    $
    2,779Less: Accumulated amortization
    
    
    (2,372
    )
    
    
    (2,102
    )Net carrying amount
    
    $
    407
    
    
    $
    677
  EstimatedAmortizationExpense2007
    
    $
    2042008
    
    
    203
 37




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 Accrued Expenses and Other Current Liabilities
  2006
    
    
    2005Compensation-related obligations
    
    $
    15,128
    
    
    $
    13,712Insurance-related obligations
    
    
    4,178
    
    
    
    5,281Income tax-related obligations
    
    
    3,755
    
    
    
    3,576Warranty- and recall-related obligations
    
    
    5,825
    
    
    
    6,220Other
    
    
    16,738
    
    
    
    17,814Total accrued expenses and other current liabilities
    
    $
    45,624
    
    
    $
    46,603
 Income Taxes
 Accounting for
Income Taxes
 Currency Translation
  Revenue Recognition and Sales Commitments
  Allowance for Doubtful Accounts
  Product Warranty and Recall Reserves
  38




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  2006
    
    
    2005Product warranty and recall at beginning of period
    
    $
    6,220
    
    
    $
    6,644Accruals for products shipped during period
    
    
    3,695
    
    
    
    3,401Changes in estimates for existing liabilities
    
    
    31
    
    
    
    490Settlements made during the period (in cash or in kind)
    
    
    (4,121
    )
    
    
    (4,315
    )Product warranty and recall at end of period
    
    $
    5,825
    
    
    $
    6,220
 Product Development Expenses
  Share-Based Compensation
 Accounting for Stock-Based Compensation Accounting for Stock-Based Compensation 
Transition and Disclosure  an amendment of SFAS 123
 Share-Based Payment
 39




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  For the Fiscal Years EndedDecember 31,2005
    
    
    2004Net income (loss), as reported
    
    $
    933
    
    
    $
    (92,503
    )Add: Share-based compensation expense included in reported net income
(loss), net of related tax effects
    
    
    1,102
    
    
    
    868Deduct: Total share-based compensation expense determined under the fair
value method for all awards, net of related tax effects
    
    
    (1,103
    )
    
    
    (906
    )Pro forma net income (loss)
    
    $
    932
    
    
    $
    (92,541
    )Net income (loss) per share:Basic  as reported
    
    $
    0.04
    
    
    $
    (4.09
    )Basic  pro forma
    
    $
    0.04
    
    
    $
    (4.09
    )Diluted  as reported
    
    $
    0.04
    
    
    $
    (4.09
    )Diluted  pro forma
    
    $
    0.04
    
    
    $
    (4.09
    )
   2004Risk-free interest rate
    
    
    1.43
    %Expected dividend yield
    
    
    0.00
    %Expected life (in years)
    
    
    1.0Expected volatility
    
    
    35.18
    %
 Financial Instruments and Derivative Financial Instruments
  40




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 Common Shares Held in Treasury
  Accounting Estimates
  Net Income (Loss) Per Share
 Earnings Per Share
 For the Fiscal Years EndedDecember 31,2006
    
    2005
    
    2004Basic weighted-average shares outstanding
    
    
    22,866,015
    
    
    
    22,709,113
    
    
    
    22,622,188Effect of dilutive securities
    
    
    195,870
    
    
    
    65,861
    
    
    
    Diluted weighted-average shares outstanding
    
    
    23,061,885
    
    
    
    22,774,974
    
    
    
    22,622,188
    Comprehensive Income (Loss)
 Reporting Comprehensive Income
 41




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  Unrealized
    
    
    AccumulatedCurrency
    
    
    Pension
    
    
    Loss (Gain) on
    
    
    OtherTranslation
    
    
    Liability
    
    
    Marketable
    
    
    ComprehensiveAdjustments
    
    
    Adjustments
    
    
    Securities
    
    
    Income (Loss)Balance, January 1, 2004
    
    $
    2,458
    
    
    $
    (1,264
    )
    
    $
    (81
    )
    
    $
    1,113Current year change
    
    
    4,685
    
    
    
    (2,224
    )
    
    
    12
    
    
    
    2,473Balance, December 31, 2004
    
    
    7,143
    
    
    
    (3,488
    )
    
    
    (69
    )
    
    
    3,586Current year change
    
    
    (4,643
    )
    
    
    396
    
    
    
    89
    
    
    
    (4,158
    )Balance, December 31, 2005
    
    
    2,500
    
    
    
    (3,092
    )
    
    
    20
    
    
    
    (572
    )Current year change
    
    
    6,025
    
    
    
    1,625
    
    
    
    (84
    )
    
    
    7,566Balance, December 31, 2006
    
    $
    8,525
    
    
    $
    (1,467
    )
    
    $
    (64
    )
    
    $
    6,994
  Before Tax
    
    
    Benefit /
    
    
    After-TaxAmount
    
    
    (Provision)
    
    
    Amount2004Foreign currency translation adjustments
    
    $
    4,685
    
    
    $
    
    
    
    $
    4,685Pension liability adjustments
    
    
    (3,177
    )
    
    
    953
    
    
    
    (2,224
    )Unrealized loss on marketable securities
    
    
    18
    
    
    
    (6
    )
    
    
    12Other comprehensive income
    
    $
    1,526
    
    
    $
    947
    
    
    $
    2,4732005Foreign currency translation adjustments
    
    $
    (4,643
    )
    
    $
    
    
    
    $
    (4,643
    )Pension liability adjustments
    
    
    566
    
    
    
    (170
    )
    
    
    396Unrealized loss on marketable securities
    
    
    137
    
    
    
    (48
    )
    
    
    89Other comprehensive loss
    
    $
    (3,940
    )
    
    $
    (218
    )
    
    $
    (4,158
    )2006Foreign currency translation adjustments
    
    $
    6,025
    
    
    $
    
    
    
    $
    6,025Pension liability adjustments
    
    
    1,625
    
    
    
    
    
    
    
    1,625Unrealized gain on marketable securities
    
    
    (129
    )
    
    
    45
    
    
    
    (84
    )Other comprehensive income
    
    $
    7,521
    
    
    $
    45
    
    
    $
    7,566
 Impairment of Assets
  Deferred Finance Costs
  42




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 Recently Issued Accounting Standards
  Accounting for Uncertainty in Income Taxes,
 Fair Value Measurements
 :
 Accounting for Planned Major Maintenance Activities
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statements
 Accounting for
Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87,
88, 106, and 132(R).
 Reclassifications
  43




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 3. Investments
 PST Indústria Eletrônica da Amazônia Ltda.
   December 31,2006
    
    
    2005Cash and cash equivalents
    
    $
    4,785
    
    
    $
    5,314Accounts receivable
    
    
    11,609
    
    
    
    7,157Inventories
    
    
    10,602
    
    
    
    9,037Property, plant and equipment, net
    
    
    9,868
    
    
    
    6,868Other assets
    
    
    3,191
    
    
    
    2,224Total Assets
    
    $
    40,055
    
    
    $
    30,600Current liabilities
    
    $
    15,854
    
    
    $
    11,624Long-term liabilities
    
    
    2,791
    
    
    
    6,055Equity of:Stoneridge
    
    
    10,705
    
    
    
    6,461Others
    
    
    10,705
    
    
    
    6,461Total Liabilities and Equity
    
    $
    40,055
    
    
    $
    30,600
  For the Fiscal Years EndedDecember 31,2006
    
    2005
    
    2004Net sales
    
    $
    94,097
    
    
    $
    70,819
    
    
    $
    47,807Cost of goods sold
    
    $
    47,451
    
    
    $
    38,700
    
    
    $
    27,444Total pretax income
    
    $
    17,939
    
    
    $
    10,956
    
    
    $
    3,906The Companys share of pretax income
    
    $
    8,970
    
    
    $
    5,478
    
    
    $
    1,953
  Minda Instruments Ltd.
  44




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  4. Long-Term Debt
 Senior Notes
  Credit Agreement
   December 31,2006
    
    
    200511 1/2% Senior notes, due 2012
    
    $
    200,000
    
    
    $
    200,000Other
    
    
    
    
    
    
    44Total debt
    
    
    200,000
    
    
    
    200,044Less: Current portion
    
    
    
    
    
    
    (44
    )Total long-term debt less current portion
    
    $
    200,000
    
    
    $
    200,000
  2007
    
    $
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    200,000Total
    
    $
    200,000
 45




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 5. Income Taxes
  For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004Income (loss) before income taxes:Domestic
    
    $
    6,581
    
    
    $
    4,441
    
    
    $
    (161,275
    )Foreign
    
    
    13,058
    
    
    
    (5
    )
    
    
    12,119Total income (loss) before income taxes
    
    $
    19,639
    
    
    $
    4,436
    
    
    $
    (149,156
    )Income tax provision (benefit):Current:Federal
    
    $
    (807
    )
    
    $
    291
    
    
    $
    (3,638
    )State and foreign
    
    
    3,176
    
    
    
    2,397
    
    
    
    4,548Total current provision
    
    
    2,369
    
    
    
    2,688
    
    
    
    910Deferred:Federal
    
    
    2,175
    
    
    
    (1,368
    )
    
    
    (64,981
    )State and foreign
    
    
    582
    
    
    
    2,183
    
    
    
    7,418Total deferred provision (benefit)
    
    
    2,757
    
    
    
    815
    
    
    
    (57,563
    )Total income tax provision (benefit)
    
    $
    5,126
    
    
    $
    3,503
    
    
    $
    (56,653
    )
  For the Fiscal Years EndedDecember 31,2006
    
    2005
    
    2004Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    (35.0
    )%State income taxes, net of federal tax benefit
    
    
    0.8
    
    
    
    (7.0
    )
    
    
    (0.6
    )Tax credits
    
    
    (5.6
    )
    
    
    (24.6
    )
    
    
    (1.2
    )Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    1.1Tax benefit for export sales
    
    
    (1.4
    )
    
    
    (9.5
    )
    
    
    (0.4
    )Foreign rate differential
    
    
    (8.9
    )
    
    
    (23.0
    )
    
    
    (0.7
    )Reduction of income tax accruals
    
    
    (4.5
    )
    
    
    (10.3
    )
    
    
    (1.2
    )Foreign deemed dividends, net of foreign tax credits
    
    
    4.5
    
    
    
    17.9
    
    
    
    0.2Reduction of deferred taxes
    
    
    
    
    
    
    (22.6
    )
    
    
    (0.2
    )Foreign valuation allowances
    
    
    4.1
    
    
    
    120.3
    
    
    
    Other
    
    
    2.1
    
    
    
    2.8
    
    
    
    Effective income tax rate
    
    
    26.1
    %
    
    
    79.0
    %
    
    
    (38.0
    )%
   46




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
   2006
    
    
    2005Deferred tax assets:Inventories
    
    $
    2,002
    
    
    $
    2,018Employee benefits
    
    
    2,353
    
    
    
    1,426Insurance
    
    
    1,314
    
    
    
    1,395Depreciation and amortization
    
    
    36,326
    
    
    
    32,073Net operating loss carryforwards
    
    
    19,025
    
    
    
    15,906General business credit carryforwards
    
    
    8,273
    
    
    
    7,081Reserves not currently deductible
    
    
    6,896
    
    
    
    7,144Gross deferred tax assets
    
    
    76,189
    
    
    
    67,043Less: Valuation allowance
    
    
    (17,380
    )
    
    
    (18,172
    )Deferred tax assets less valuation allowance
    
    
    58,809
    
    
    
    48,871Deferred tax liabilities:Depreciation and amortization
    
    
    (10,454
    )
    
    
    Other
    
    
    (3,944
    )
    
    
    (1,328
    )Gross deferred tax liabilities
    
    
    (14,398
    )
    
    
    (1,328
    )Net deferred tax asset
    
    $
    44,411
    
    
    $
    47,543
   6. Operating Lease Commitments
    47




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  Third
    
    
    RelatedParty
    
    
    Party2007
    
    $
    5,395
    
    
    $
    3422008
    
    
    3,441
    
    
    
    3422009
    
    
    2,374
    
    
    
    3422010
    
    
    967
    
    
    
    2011
    
    
    526
    
    
    
    Thereafter
    
    
    4,110
    
    
    
    Total
    
    $
    16,813
    
    
    $
    1,026
 7. Share-Based Compensation Plans
       48




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 Options
  Weighted-Weighted-
    
    AverageAverage
    
    RemainingShare
    
    Exercise
    
    ContractualOptions
    
    Price
    
    TermOutstanding at December 31, 2005
    
    
    757,850
    
    
    $
    11.30Expired
    
    
    (69,100
    )
    
    
    11.70Exercised
    
    
    (64,000
    )
    
    
    5.21Outstanding and Exercisable at December 31, 2006
    
    
    624,750
    
    
    $
    11.88
    
    
    
    4.33
    Restricted Shares
   49




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  Time-Based Awards
    
    Performance-Based AwardsWeighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageGrant-Date
    
    
    
    
    
    Grant-DateNon-vested Restricted Common Shares
    
    Shares
    
    Fair Value
    
    Shares
    
    Fair ValueNon-vested at December 31, 2005
    
    
    207,251
    
    
    $
    11.47
    
    
    
    237,000
    
    
    $
    8.24Granted
    
    
    431,650
    
    
    
    7.79
    
    
    
    262,725
    
    
    
    8.39Vested
    
    
    (155,883
    )
    
    
    10.37
    
    
    
    
    
    
    
    Forfeited
    
    
    (14,626
    )
    
    
    10.81
    
    
    
    (102,900
    )
    
    
    8.24Non-vested at December 31, 2006
    
    
    468,392
    
    
    $
    8.47
    
    
    
    396,825
    
    
    $
    8.34
    50




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 8. Employee Benefit Plans
    Pension Benefit Plan
    
    
    Postretirement Benefit Plan2006
    
    
    2005
    
    
    2006
    
    
    2005Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    19,988
    
    
    $
    19,985
    
    
    $
    1,702
    
    
    $
    1,814Service cost
    
    
    92
    
    
    
    73
    
    
    
    40
    
    
    
    114Interest cost
    
    
    994
    
    
    
    981
    
    
    
    67
    
    
    
    112Actuarial loss (gain)
    
    
    (515
    )
    
    
    2,035
    
    
    
    (239
    )
    
    
    (253
    )Benefits paid
    
    
    (663
    )
    
    
    (908
    )
    
    
    (80
    )
    
    
    (85
    )Settlement
    
    
    
    
    
    
    
    
    
    
    (982
    )Translation adjustments
    
    
    2,785
    
    
    
    (2,178
    )
    
    
    
    
    
    
    Projected benefit obligation at end of year
    
    $
    22,681
    
    
    $
    19,988
    
    
    $
    508
    
    
    $
    1,702Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    15,898
    
    
    $
    15,559
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    2,209
    
    
    
    2,798
    
    
    
    
    
    
    
    Employer contributions
    
    
    276
    
    
    
    164
    
    
    
    387
    
    
    
    85Benefits paid
    
    
    (663
    )
    
    
    (908
    )
    
    
    (80
    )
    
    
    (85
    )Settlement
    
    
    
    
    
    
    
    
    
    
    (307
    )Translation adjustments
    
    
    2,336
    
    
    
    (1,715
    )
    
    
    
    
    
    
    Fair value of plan assets at end of year
    
    $
    20,056
    
    
    $
    15,898
    
    
    $
    
    
    
    $
    Accumulated benefit obligation at end of year
    
    
    22,681
    
    
    
    19,988
    
    
    
    508
    
    
    
    1,702Funded status at end of year
    
    
    2,625
    
    
    
    4,090
    
    
    
    508
    
    
    
    1,702Amounts recognized in the consolidated balance
sheet consist of:Accrued liabilities
    
    
    (2,625
    )
    
    
    (4,090
    )
    
    
    (508
    )
    
    
    (2,042
    )
  51




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 Pension Benefit Plan
    
    Postretirement Benefit Plan2006
    
    2005
    
    2006
    
    2005Weighted average assumptions used to
determine benefit obligation at December 31:Discount rate
    
    
    5.15
    %
    
    
    4.75
    %
    
    
    5.80
    %
    
    
    5.50
    %Rate of increase to compensation levels
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    2.50
    %Rate of increase to pensions in payment
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    N/A
    
    
    
    N/ARate of future price inflation
    
    
    2.90
    %
    
    
    2.75
    %
    
    
    N/A
    
    
    
    N/AInitial health care cost trend rate
    
    
    N/A
    
    
    
    N/A
    
    
    
    11.00
    %
    
    
    12.00
    %Ultimate health care cost trend rate
    
    
    N/A
    
    
    
    N/A
    
    
    
    6.00
    %
    
    
    6.00
    %Year that the ultimate trend rate is reached
    
    
    N/A
    
    
    
    N/A
    
    
    
    2011
    
    
    
    2011Measurement date
    
    
    12/31/06
    
    
    
    12/31/05
    
    
    
    12/31/06
    
    
    
    12/31/05Weighted average assumptions used to
determine net periodic benefit cost for the
years ended December 31:Discount rate
    
    
    4.75
    %
    
    
    5.30
    %
    
    
    5.50
    %
    
    
    5.75
    %Expected long-term return on plan assets
    
    
    6.40
    %
    
    
    7.00
    %
    
    
    N/A
    
    
    
    N/ARate of increase to compensation levels
    
    
    N/A
    
    
    
    N/A
    
    
    
    2.50
    %
    
    
    2.50
    %Rate of increase to pensions in payment
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    N/A
    
    
    
    N/ARate of future price inflation
    
    
    2.75
    %
    
    
    2.75
    %
    
    
    N/A
    
    
    
    N/AInitial health care cost trend rate
    
    
    N/A
    
    
    
    N/A
    
    
    
    11.00
    %
    
    
    12.00
    %Ultimate health care cost trend rate
    
    
    N/A
    
    
    
    N/A
    
    
    
    6.00
    %
    
    
    6.00
    %Year that the ultimate trend rate is reached
    
    
    N/A
    
    
    
    N/A
    
    
    
    2011
    
    
    
    2011Measurement date
    
    
    12/31/06
    
    
    
    12/31/05
    
    
    
    12/31/05
    
    
    
    12/31/04
  Pension Benefit Plan2006Other changes in plan assets and benefit obligations
recognized in other comprehensive income:Net actuarial gain
    
    $
    (1,367
    )Amortization of actuarial gain
    
    
    (258
    )Total recognized in other comprehensive income
    
    
    (1,625
    )Total recognized in net periodic pension cost and
other comprehensive income
    
    $
    (1,367
    )
  Pension Benefit Plan2007Amortization of net actuarial loss
    
    $
    
    78
  52




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
   Pension Benefit Plan
    
    
    Postretirement Benefit PlanFor the Fiscal Years Ended
    
    
    For the Fiscal Years EndedDecember 31,
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2006
    
    
    2005
    
    
    2004Service cost
    
    $
    92
    
    
    $
    73
    
    
    $
    73
    
    
    $
    40
    
    
    $
    114
    
    
    $
    98Interest cost
    
    
    994
    
    
    
    981
    
    
    
    879
    
    
    
    67
    
    
    
    112
    
    
    
    95Settlement gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,242
    )
    
    
    
    
    
    
    Expected return on plan assets
    
    
    (1,086
    )
    
    
    (999
    )
    
    
    (989
    )
    
    
    
    
    
    
    
    
    
    
    Amortization
of actuarial loss (gain)
    
    
    258
    
    
    
    291
    
    
    
    55
    
    
    
    (17
    )
    
    
    
    
    
    
    Net periodic (benefit) cost
    
    $
    258
    
    
    $
    346
    
    
    $
    18
    
    
    $
    (1,152
    )
    
    $
    226
    
    
    $
    193
  1% Point
    
    1% PointIncrease
    
    DecreaseEffect on total of service and interest components
    
    $
    2
    
    
    $
    (2
    )Effect on postretirement benefits obligation
    
    $
    40
    
    
    $
    (36
    )
 Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug Improvement and Modernization Act of 2003
  2006
    
    2005Asset Category:Equity securities
    
    
    81
    %
    
    
    78
    %Debt securities
    
    
    18
    
    
    
    21Other
    
    
    1
    
    
    
    1Total
    
    
    100
    %
    
    
    100
    %
 53




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  Asset Category:Equity securities
    
    
    75
    %Debt securities
    
    
    25
    %
   Pension Benefit
    
    PostretirementPlan
    
    Benefit Plan2007
    
    $
    705
    
    
    $
    582008
    
    
    705
    
    
    
    592009
    
    
    705
    
    
    
    582010
    
    
    744
    
    
    
    572011
    
    
    979
    
    
    
    552012 to 2016
    
    
    5,640
    
    
    
    223
  9. Fair Value of Financial Instruments
 Financial Instruments
  Derivative Instruments and Hedging Activities
  54




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
    10. Commitments and Contingencies
  Customer Bankruptcies
  11. Related Party Transactions
 Relationship with Counsel
 Industrial Development Associates LP (IDA).
  55




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
   Hunters Square.
 56




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 12. Restructuring
   Asset-Severance
    
    
    RelatedCosts
    
    
    Charges
    
    
    TotalTotal expected restructuring charges
    
    $
    987
    
    
    $
    127
    
    
    $
    1,114Balance at December 31, 2004
    
    $
    
    
    
    $
    
    
    
    $
    First quarter charge to expense
    
    
    88
    
    
    
    127
    
    
    
    215Second quarter charge to expense
    
    
    9
    
    
    
    
    
    
    
    9Third quarter charge to expense
    
    
    356
    
    
    
    
    
    
    
    356Fourth quarter charge to expense
    
    
    70
    
    
    
    
    
    
    
    70Cash payments
    
    
    (111
    )
    
    
    
    
    
    
    (111
    )Non-cash utilization
    
    
    
    
    
    
    (127
    )
    
    
    (127
    )Balance at December 31, 2005
    
    $
    412
    
    
    $
    
    
    
    $
    412First quarter charge to expense
    
    
    176
    
    
    
    
    
    
    
    176Second quarter charge to expense
    
    
    (370
    )
    
    
    
    
    
    
    (370
    )Third quarter charge to expense
    
    
    127
    
    
    
    
    
    
    
    127Fourth quarter charge to expense
    
    
    436
    
    
    
    
    
    
    
    436Cash payments
    
    
    (343
    )
    
    
    
    
    
    
    (343
    )Non-cash utilization
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    $
    438
    
    
    $
    
    
    
    $
    438Remaining expected restructuring charge
    
    $
    95
    
    
    $
    
    
    
    $
    95
 57




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  Asset-
    
    
    Facility
    
    
    OtherSeverance
    
    
    Related
    
    
    Closure
    
    
    ExitCosts
    
    
    Charges
    
    
    Costs
    
    
    Costs
    
    
    TotalTotal expected restructuring charges
    
    $
    3,665
    
    
    $
    983
    
    
    $
    1,137
    
    
    $
    653
    
    
    $
    6,438Balance at March 31, 2004
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Second quarter charge to expense
    
    
    
    
    
    
    205
    
    
    
    
    
    
    
    
    
    
    
    205Third quarter charge to expense
    
    
    
    
    
    
    202
    
    
    
    
    
    
    
    118
    
    
    
    320Fourth quarter charge to expense
    
    
    1,068
    
    
    
    207
    
    
    
    
    
    
    
    287
    
    
    
    1,562Cash payments
    
    
    (590
    )
    
    
    
    
    
    
    
    
    
    
    (405
    )
    
    
    (995
    )Non-cash utilization
    
    
    
    
    
    
    (614
    )
    
    
    
    
    
    
    
    
    
    
    (614
    )Balance at December 31, 2004
    
    $
    478
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    478First quarter charge to expense
    
    
    1,698
    
    
    
    206
    
    
    
    
    
    
    
    7
    
    
    
    1,911Second quarter charge to expense
    
    
    586
    
    
    
    163
    
    
    
    746
    
    
    
    174
    
    
    
    1,669Third quarter charge to expense
    
    
    214
    
    
    
    
    
    
    
    218
    
    
    
    35
    
    
    
    467Fourth quarter charge to expense
    
    
    (57
    )
    
    
    
    
    
    
    140
    
    
    
    (18
    )
    
    
    65Cash payments
    
    
    (2,722
    )
    
    
    
    
    
    
    (140
    )
    
    
    (198
    )
    
    
    (3,060
    )Non-cash utilization
    
    
    
    
    
    
    (369
    )
    
    
    
    
    
    
    
    
    
    
    (369
    )Balance at December 31, 2005
    
    $
    197
    
    
    $
    
    
    
    $
    964
    
    
    $
    
    
    
    $
    1,161First quarter charge to expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    48Second quarter charge to expense
    
    
    204
    
    
    
    
    
    
    
    14
    
    
    
    2
    
    
    
    220Third quarter charge to expense
    
    
    (48
    )
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    (47
    )Fourth quarter charge to expense
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    18Cash payments
    
    
    (353
    )
    
    
    
    
    
    
    (569
    )
    
    
    (50
    )
    
    
    (972
    )Non-cash utilization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    $
    
    
    
    $
    
    
    
    $
    428
    
    
    $
    
    
    
    $
    428Remaining expected restructuring charge
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  58




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 13. Segment Reporting
 Disclosures about Segments of an Enterprise and Related Information,
     For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004Net SalesVehicle Management & Power Distribution
    
    $
    407,706
    
    
    $
    358,683
    
    
    $
    352,706Intersegment sales
    
    
    17,479
    
    
    
    16,543
    
    
    
    15,919Vehicle Management & Power Distribution net sales
    
    
    425,185
    
    
    
    375,226
    
    
    
    368,625Control Devices
    
    
    300,993
    
    
    
    312,901
    
    
    
    329,089Intersegment sales
    
    
    3,811
    
    
    
    3,163
    
    
    
    2,533Control Devices net sales
    
    
    304,804
    
    
    
    316,064
    
    
    
    331,622Eliminations
    
    
    (21,290
    )
    
    
    (19,706
    )
    
    
    (18,452
    )Total consolidated net sales
    
    $
    708,699
    
    
    $
    671,584
    
    
    $
    681,795Income (Loss) Before Income TaxesVehicle Management & Power Distribution
    
    
    24,473
    
    
    
    13,573
    
    
    
    29,623Control Devices (A)
    
    
    10,396
    
    
    
    5,640
    
    
    
    (150,021
    )Other corporate activities
    
    
    6,392
    
    
    
    8,217
    
    
    
    (4,477
    )Corporate interest expense
    
    
    (21,622
    )
    
    
    (22,994
    )
    
    
    (24,281
    )Total consolidated income (loss) before income taxes
    
    $
    19,639
    
    
    $
    4,436
    
    
    $
    (149,156
    )
 59




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004Depreciation and AmortizatonVehicle Management & Power Distribution
    
    $
    7,958
    
    
    $
    8,104
    
    
    $
    8,559Control Devices
    
    
    17,797
    
    
    
    17,668
    
    
    
    15,934Corporate activities
    
    
    425
    
    
    
    385
    
    
    
    309Total consolidated depreciation and amortization (B)
    
    $
    26,180
    
    
    $
    26,157
    
    
    $
    24,802Interest Expense (Income)Vehicle Management & Power Distribution
    
    
    (436
    )
    
    
    120
    
    
    
    237Control Devices
    
    
    558
    
    
    
    758
    
    
    
    (62
    )Corporate activities
    
    
    21,622
    
    
    
    22,994
    
    
    
    24,281Total consolidated interest expense
    
    $
    21,744
    
    
    $
    23,872
    
    
    $
    24,456Capital ExpendituresVehicle Management & Power Distribution
    
    
    11,086
    
    
    
    9,461
    
    
    
    9,239Control Devices
    
    
    14,627
    
    
    
    19,351
    
    
    
    14,517Corporate activities
    
    
    182
    
    
    
    122
    
    
    
    161Total consolidated capital expenditures
    
    $
    25,895
    
    
    $
    28,934
    
    
    $
    23,917
 December 31,2006
    
    
    2005
    
    
    2004Total AssetsVehicle Management & Power Distribution
    
    $
    184,327
    
    
    $
    158,203
    
    
    $
    175,406Control Devices
    
    
    216,523
    
    
    
    223,578
    
    
    
    199,401Corporate (C)
    
    
    265,986
    
    
    
    248,633
    
    
    
    239,205Eliminations
    
    
    (165,029
    )
    
    
    (167,376
    )
    
    
    (141,011
    )Total consolidated assets
    
    $
    501,807
    
    
    $
    463,038
    
    
    $
    473,001
 
 (A)
    
    The Companys 2004 Loss Before Income Taxes for the Control Devices reportable segment
includes a non-cash goodwill impairment charge of $183,450, which was recorded in the fourth
quarter of 2004.(B)
    
    These amounts represent depreciation and amortization on fixed and certain intangible
assets.(C)
    
    Assets located at Corporate consist primarily of cash, fixed assets, deferred taxes and
equity investments.  For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004Vehicle Management & Power Distribution:Vehicle electrical power and distribution systems
    
    
    32
    %
    
    
    29
    %
    
    
    28
    %Electronic instrumentation and information display products
    
    
    25
    
    
    
    24
    
    
    
    2457
    %
    
    
    53
    %
    
    
    52
    %Control Devices:Actuator and sensor products
    
    
    18
    %
    
    
    21
    %
    
    
    20
    %Switch and sensor products
    
    
    25
    
    
    
    26
    
    
    
    2843
    %
    
    
    47
    %
    
    
    48
    %
 60




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  For the Fiscal Years EndedDecember 31,2006
    
    
    2005
    
    
    2004Net SalesNorth America
    
    $
    541,541
    
    
    $
    532,523
    
    
    $
    539,412Europe and other
    
    
    167,158
    
    
    
    139,061
    
    
    
    142,383Total consolidated net sales
    
    $
    708,699
    
    
    $
    671,584
    
    
    $
    681,795
 December 31,2006
    
    
    2005
    
    
    2004Non-Current AssetsNorth America
    
    $
    215,429
    
    
    $
    218,784
    
    
    $
    183,604Europe and other
    
    
    32,346
    
    
    
    25,574
    
    
    
    55,355Total non-current assets
    
    $
    247,775
    
    
    $
    244,358
    
    
    $
    238,959
 61




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 14. Guarantor Financial Information
    December 31, 2006Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    28,937
    
    
    $
    12
    
    
    $
    36,933
    
    
    $
    
    
    
    $
    65,882Accounts receivable, net
    
    
    48,187
    
    
    
    28,376
    
    
    
    30,422
    
    
    
    
    
    
    
    106,985Inventories, net
    
    
    26,173
    
    
    
    12,502
    
    
    
    19,846
    
    
    
    
    
    
    
    58,521Prepaid expenses and other
    
    
    (273,206
    )
    
    
    275,577
    
    
    
    11,077
    
    
    
    
    
    
    
    13,448Deferred income taxes
    
    
    3,724
    
    
    
    4,379
    
    
    
    1,093
    
    
    
    
    
    
    
    9,196Total current assets
    
    
    (166,185
    )
    
    
    320,846
    
    
    
    99,371
    
    
    
    
    
    
    
    254,032Long-Term Assets:Property, plant and equipment, net
    
    
    61,320
    
    
    
    31,643
    
    
    
    21,623
    
    
    
    
    
    
    
    114,586Other Assets:Goodwill
    
    
    44,585
    
    
    
    20,591
    
    
    
    
    
    
    
    
    
    
    
    65,176Investments and other, net
    
    
    30,874
    
    
    
    131
    
    
    
    170
    
    
    
    (300
    )
    
    
    30,875Deferred income taxes
    
    
    40,713
    
    
    
    (3,341
    )
    
    
    (234
    )
    
    
    
    
    
    
    37,138Investment in subsidiaries
    
    
    411,366
    
    
    
    
    
    
    
    
    
    
    
    (411,366
    )
    
    
    Total long-term assets
    
    
    588,858
    
    
    
    49,024
    
    
    
    21,559
    
    
    
    (411,666
    )
    
    
    247,775Total Assets
    
    $
    422,673
    
    
    $
    369,870
    
    
    $
    120,930
    
    
    $
    (411,666
    )
    
    $
    501,807LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    26,690
    
    
    $
    19,044
    
    
    $
    26,759
    
    
    $
    
    
    
    $
    72,493Accrued expenses and other
    
    
    17,291
    
    
    
    7,314
    
    
    
    21,019
    
    
    
    
    
    
    
    45,624Total current liabilities
    
    
    43,981
    
    
    
    26,358
    
    
    
    47,778
    
    
    
    
    
    
    
    118,117Long-Term Liabilities:Long-term debt
    
    
    200,000
    
    
    
    
    
    
    
    300
    
    
    
    (300
    )
    
    
    200,000Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    1,923
    
    
    
    
    
    
    
    1,923Other liabilities
    
    
    70
    
    
    
    450
    
    
    
    2,625
    
    
    
    
    
    
    
    3,145Total long-term liabilities
    
    
    200,070
    
    
    
    450
    
    
    
    4,848
    
    
    
    (300
    )
    
    
    205,068Shareholders Equity
    
    
    178,622
    
    
    
    343,062
    
    
    
    68,304
    
    
    
    (411,366
    )
    
    
    178,622Total Liabilities and Shareholders Equity
    
    $
    422,673
    
    
    $
    369,870
    
    
    $
    120,930
    
    
    $
    (411,666
    )
    
    $
    501,807
 62




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  December 31, 2005Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    7,754
    
    
    $
    47
    
    
    $
    32,983
    
    
    $
    
    
    
    $
    40,784Accounts receivable, net
    
    
    46,505
    
    
    
    30,883
    
    
    
    23,043
    
    
    
    (69
    )
    
    
    100,362Inventories, net
    
    
    25,662
    
    
    
    12,804
    
    
    
    15,325
    
    
    
    
    
    
    
    53,791Prepaid expenses and other
    
    
    (274,706
    )
    
    
    258,203
    
    
    
    30,993
    
    
    
    
    
    
    
    14,490Deferred income taxes
    
    
    4,713
    
    
    
    4,116
    
    
    
    424
    
    
    
    
    
    
    
    9,253Total current assets
    
    
    (190,072
    )
    
    
    306,053
    
    
    
    102,768
    
    
    
    (69
    )
    
    
    218,680Long-Term Assets:Property, plant and equipment, net
    
    
    61,620
    
    
    
    33,683
    
    
    
    18,175
    
    
    
    
    
    
    
    113,478Other Assets:Goodwill
    
    
    44,585
    
    
    
    20,591
    
    
    
    
    
    
    
    
    
    
    
    65,176Investments and other, net
    
    
    38,004
    
    
    
    460
    
    
    
    46
    
    
    
    (12,019
    )
    
    
    26,491Deferred income taxes
    
    
    41,547
    
    
    
    (3,781
    )
    
    
    1,447
    
    
    
    
    
    
    
    39,213Investment in subsidiaries
    
    
    399,536
    
    
    
    
    
    
    
    
    
    
    
    (399,536
    )
    
    
    Total long-term assets
    
    
    585,292
    
    
    
    50,953
    
    
    
    19,668
    
    
    
    (411,555
    )
    
    
    244,358Total Assets
    
    $
    395,220
    
    
    $
    357,006
    
    
    $
    122,436
    
    
    $
    (411,624
    )
    
    $
    463,038LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Current portion of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    44
    
    
    $
    
    
    
    $
    44Accounts payable
    
    
    20,350
    
    
    
    17,358
    
    
    
    17,636
    
    
    
    
    
    
    
    55,344Accrued expenses and other
    
    
    20,879
    
    
    
    10,351
    
    
    
    15,442
    
    
    
    (69
    )
    
    
    46,603Total current liabilities
    
    
    41,229
    
    
    
    27,709
    
    
    
    33,122
    
    
    
    (69
    )
    
    
    101,991Long-Term Liabilities:Long-term debt, net of current portion
    
    
    200,000
    
    
    
    
    
    
    
    12,019
    
    
    
    (12,019
    )
    
    
    200,000Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    923
    
    
    
    
    
    
    
    923Other liabilities
    
    
    
    
    
    
    2,043
    
    
    
    4,090
    
    
    
    
    
    
    
    6,133Total long-term liabilities
    
    
    200,000
    
    
    
    2,043
    
    
    
    17,032
    
    
    
    (12,019
    )
    
    
    207,056Shareholders Equity
    
    
    153,991
    
    
    
    327,254
    
    
    
    72,282
    
    
    
    (399,536
    )
    
    
    153,991Total Liabilities and Shareholders Equity
    
    $
    395,220
    
    
    $
    357,006
    
    
    $
    122,436
    
    
    $
    (411,624
    )
    
    $
    463,038
 63




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  For the Fiscal Year Ended December 31, 2006Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet Sales
    
    $
    352,050
    
    
    $
    223,332
    
    
    $
    219,870
    
    
    $
    (86,553
    )
    
    $
    708,699Costs and Expenses:Cost of goods sold
    
    
    304,042
    
    
    
    167,707
    
    
    
    161,870
    
    
    
    (83,826
    )
    
    
    549,793Selling, general and administrative
    
    
    51,493
    
    
    
    34,877
    
    
    
    40,895
    
    
    
    (2,727
    )
    
    
    124,538(Gain) Loss on sale of property, plant
and equipment, net
    
    
    (1,312
    )
    
    
    4
    
    
    
    5
    
    
    
    
    
    
    
    (1,303
    )Restructuring charges
    
    
    368
    
    
    
    224
    
    
    
    16
    
    
    
    
    
    
    
    608Operating Income (Loss)
    
    
    (2,541
    )
    
    
    20,520
    
    
    
    17,084
    
    
    
    
    
    
    
    35,063Interest expense (income), net
    
    
    22,366
    
    
    
    
    
    
    
    (622
    )
    
    
    
    
    
    
    21,744Other (income) expense, net
    
    
    (7,919
    )
    
    
    (291
    )
    
    
    1,890
    
    
    
    
    
    
    
    (6,320
    )Equity earnings from subsidiaries
    
    
    (32,998
    )
    
    
    
    
    
    
    
    
    
    
    32,998
    
    
    
    Income (Loss) Before Income Taxes
    
    
    16,010
    
    
    
    20,811
    
    
    
    15,816
    
    
    
    (32,998
    )
    
    
    19,639Provision for income taxes
    
    
    1,497
    
    
    
    15
    
    
    
    3,614
    
    
    
    
    
    
    
    5,126Net Income (Loss)
    
    $
    14,513
    
    
    $
    20,796
    
    
    $
    12,202
    
    
    $
    (32,998
    )
    
    $
    14,513
 For the Fiscal Year Ended December 31, 2005Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet Sales
    
    $
    332,173
    
    
    $
    228,975
    
    
    $
    183,596
    
    
    $
    (73,160
    )
    
    $
    671,584Costs and Expenses:Cost of goods sold
    
    
    285,332
    
    
    
    166,796
    
    
    
    141,894
    
    
    
    (71,026
    )
    
    
    522,996Selling, general and administrative
    
    
    52,746
    
    
    
    32,758
    
    
    
    37,177
    
    
    
    (2,134
    )
    
    
    120,547(Gain) Loss on sale of property, plant
and equipment, net
    
    
    63
    
    
    
    
    
    
    
    (423
    )
    
    
    
    
    
    
    (360
    )Restructuring charges
    
    
    247
    
    
    
    833
    
    
    
    4,018
    
    
    
    
    
    
    
    5,098Operating Income (Loss)
    
    
    (6,215
    )
    
    
    28,588
    
    
    
    930
    
    
    
    
    
    
    
    23,303Interest expense (income), net
    
    
    23,751
    
    
    
    (1
    )
    
    
    122
    
    
    
    
    
    
    
    23,872Other (income) expense, net
    
    
    (5,410
    )
    
    
    
    
    
    
    405
    
    
    
    
    
    
    
    (5,005
    )Equity earnings from subsidiaries
    
    
    (24,306
    )
    
    
    
    
    
    
    
    
    
    
    24,306
    
    
    
    Income (Loss) Before Income Taxes
    
    
    (250
    )
    
    
    28,589
    
    
    
    403
    
    
    
    (24,306
    )
    
    
    4,436Provision (benefit) for income taxes
    
    
    (1,183
    )
    
    
    28
    
    
    
    4,658
    
    
    
    
    
    
    
    3,503Net Income (Loss)
    
    $
    933
    
    
    $
    28,561
    
    
    $
    (4,255
    )
    
    $
    (24,306
    )
    
    $
    933
 64




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  For the Fiscal Year Ended December 31, 2004Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet Sales
    
    $
    255,243
    
    
    $
    223,854
    
    
    $
    233,392
    
    
    $
    (30,694
    )
    
    $
    681,795Costs and Expenses:Cost of goods sold
    
    
    204,639
    
    
    
    151,776
    
    
    
    181,087
    
    
    
    (30,694
    )
    
    
    506,808Selling, general and administrative
    
    
    47,491
    
    
    
    36,334
    
    
    
    31,009
    
    
    
    
    
    
    
    114,834Loss on sale of property, plant
and equipment, net
    
    
    80
    
    
    
    36
    
    
    
    70
    
    
    
    
    
    
    
    186Goodwill impairment charge
    
    
    183,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183,450Restructuring charges
    
    
    
    
    
    
    
    
    
    
    2,087
    
    
    
    
    
    
    
    2,087Operating Income (Loss)
    
    
    (180,417
    )
    
    
    35,708
    
    
    
    19,139
    
    
    
    
    
    
    
    (125,570
    )Interest expense (income), net
    
    
    24,692
    
    
    
    
    
    
    
    (236
    )
    
    
    
    
    
    
    24,456Other (income) expense, net
    
    
    (5,138
    )
    
    
    3,571
    
    
    
    697
    
    
    
    
    
    
    
    (870
    )Equity earnings from subsidiaries
    
    
    (45,159
    )
    
    
    
    
    
    
    
    
    
    
    45,159
    
    
    
    Income (Loss) Before Income Taxes
    
    
    (154,812
    )
    
    
    32,137
    
    
    
    18,678
    
    
    
    (45,159
    )
    
    
    (149,156
    )Provision (benefit) for income taxes
    
    
    (62,309
    )
    
    
    609
    
    
    
    5,047
    
    
    
    
    
    
    
    (56,653
    )Net Income (Loss)
    
    $
    (92,503
    )
    
    $
    31,528
    
    
    $
    13,631
    
    
    $
    (45,159
    )
    
    $
    (92,503
    )
 65




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  For the Fiscal Year Ended December 31, 2006Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided (used) by operating activities
    
    $
    10,415
    
    
    $
    5,603
    
    
    $
    42,241
    
    
    $
    (11,719
    )
    
    $
    46,540INVESTING ACTIVITIES:Capital expenditures
    
    
    (12,412
    )
    
    
    (5,619
    )
    
    
    (7,864
    )
    
    
    
    
    
    
    (25,895
    )Proceeds from sale of fixed assets
    
    
    2,266
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,266Proceeds from sale of partnership interest
    
    
    1,153
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,153Business acquisitions and other
    
    
    (1,476
    )
    
    
    245
    
    
    
    (6
    )
    
    
    (896
    )
    
    
    (2,133
    )Net cash used by investing activities
    
    
    (10,469
    )
    
    
    (5,374
    )
    
    
    (7,870
    )
    
    
    (896
    )
    
    
    (24,609
    )FINANCING ACTIVITIES:Borrowings (repayments) of long-term debt
    
    
    2,426
    
    
    
    
    
    
    
    (14,189
    )
    
    
    11,719
    
    
    
    (44
    )Share-based compensation activity, net
    
    
    1,337
    
    
    
    
    
    
    
    (1,036
    )
    
    
    
    
    
    
    301Shareholder distributions
    
    
    10,854
    
    
    
    
    
    
    
    (10,854
    )
    
    
    
    
    
    
    Other financing costs
    
    
    6,620
    
    
    
    (264
    )
    
    
    (7,402
    )
    
    
    896
    
    
    
    (150
    )Net cash provided (used) by financing activities
    
    
    21,237
    
    
    
    (264
    )
    
    
    (33,481
    )
    
    
    12,615
    
    
    
    107Effect of exchange rate changes on cash
and cash equivalents
    
    
    
    
    
    
    
    
    
    
    3,060
    
    
    
    
    
    
    
    3,060Net change in cash and cash equivalents
    
    
    21,183
    
    
    
    (35
    )
    
    
    3,950
    
    
    
    
    
    
    
    25,098Cash and cash equivalents at beginning
of period
    
    
    7,754
    
    
    
    47
    
    
    
    32,983
    
    
    
    
    
    
    
    40,784Cash and cash equivalents at end of period
    
    $
    28,937
    
    
    $
    12
    
    
    $
    36,933
    
    
    $
    
    
    
    $
    65,882
 For the Fiscal Year Ended December 31, 2005Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided (used) by operating activities
    
    $
    3,280
    
    
    $
    9,013
    
    
    $
    (1,816
    )
    
    $
    8,584
    
    
    $
    19,061INVESTING ACTIVITIES:Capital expenditures
    
    
    (14,608
    )
    
    
    (8,992
    )
    
    
    (5,334
    )
    
    
    
    
    
    
    (28,934
    )Proceeds from sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    1,664
    
    
    
    
    
    
    
    1,664Business acquisitions and other
    
    
    (1,041
    )
    
    
    (52
    )
    
    
    
    
    
    
    811
    
    
    
    (282
    )Net cash provided (used) by investing activities
    
    
    (15,649
    )
    
    
    (9,044
    )
    
    
    (3,670
    )
    
    
    811
    
    
    
    (27,552
    )FINANCING ACTIVITIES:Borrowings (repayments) of long-term debt
    
    
    
    
    
    
    
    
    
    
    8,466
    
    
    
    (8,584
    )
    
    
    (118
    )Share-based compensation activity, net
    
    
    1
    
    
    
    61
    
    
    
    
    
    
    
    (61
    )
    
    
    1Other financing costs
    
    
    (241
    )
    
    
    
    
    
    
    750
    
    
    
    (750
    )
    
    
    (241
    )Net cash provided (used) by financing activities
    
    
    (240
    )
    
    
    61
    
    
    
    9,216
    
    
    
    (9,395
    )
    
    
    (358
    )Effect of exchange rate changes on cash
and cash equivalents
    
    
    
    
    
    
    
    
    
    
    (2,699
    )
    
    
    
    
    
    
    (2,699
    )Net change in cash and cash equivalents
    
    
    (12,609
    )
    
    
    30
    
    
    
    1,031
    
    
    
    
    
    
    
    (11,548
    )Cash and cash equivalents at beginning
of period
    
    
    20,363
    
    
    
    17
    
    
    
    31,952
    
    
    
    
    
    
    
    52,332Cash and cash equivalents at end of period
    
    $
    7,754
    
    
    $
    47
    
    
    $
    32,983
    
    
    $
    
    
    
    $
    40,784
 66




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STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
  For the Fiscal Year Ended December 31, 2004Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    18,390
    
    
    $
    9,241
    
    
    $
    5,612
    
    
    $
    15,033
    
    
    $
    48,276INVESTING ACTIVITIES:Capital expenditures
    
    
    (8,647
    )
    
    
    (9,399
    )
    
    
    (5,871
    )
    
    
    
    
    
    
    (23,917
    )Proceeds from sale of fixed assets
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Business acquisitions and other
    
    
    (745
    )
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    (702
    )Collection of note receivable from joint venture
    
    
    4,695
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,695Net cash used by investing activities
    
    
    (4,696
    )
    
    
    (9,399
    )
    
    
    (5,828
    )
    
    
    
    
    
    
    (19,923
    )FINANCING ACTIVITIES:Borrowings (repayments) of long-term debt
    
    
    (7,300
    )
    
    
    
    
    
    
    21,809
    
    
    
    (15,033
    )
    
    
    (524
    )Share-based compensation activity, net
    
    
    (557
    )
    
    
    149
    
    
    
    28
    
    
    
    
    
    
    
    (380
    )Other financing costs
    
    
    (134
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (134
    )Net cash provided (used) by financing activities
    
    
    (7,991
    )
    
    
    149
    
    
    
    21,837
    
    
    
    (15,033
    )
    
    
    (1,038
    )Effect of exchange rate changes on cash
and cash equivalents
    
    
    
    
    
    
    
    
    
    
    875
    
    
    
    
    
    
    
    875Net change in cash and cash equivalents.
    
    
    5,703
    
    
    
    (9
    )
    
    
    22,496
    
    
    
    
    
    
    
    28,190Cash and cash equivalents at beginning
of period
    
    
    14,660
    
    
    
    26
    
    
    
    9,456
    
    
    
    
    
    
    
    24,142Cash and cash equivalents at end of period
    
    $
    20,363
    
    
    $
    17
    
    
    $
    31,952
    
    
    $
    
    
    
    $
    52,332
 67




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##### Table of Contents



STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, unless otherwise indicated)
 15. Unaudited Quarterly Financial Data
  Quarter EndedDec. 31
    
    
    Sept. 30
    
    
    Jul. 1
    
    
    Apr. 1(in millions, except per share data)2006Net sales
    
    $
    171.2
    
    
    $
    172.4
    
    
    $
    185.5
    
    
    $
    179.6Gross profit
    
    
    36.0
    
    
    
    38.2
    
    
    
    44.0
    
    
    
    40.7Operating income
    
    
    2.8
    
    
    
    9.1
    
    
    
    12.8
    
    
    
    10.4Net income
    
    $
    1.5
    
    
    $
    4.4
    
    
    $
    4.9
    
    
    $
    3.8Basic net income per share (A)
    
    $
    0.06
    
    
    $
    0.19
    
    
    $
    0.21
    
    
    $
    0.17Diluted net income per share (A)
    
    $
    0.06
    
    
    $
    0.19
    
    
    $
    0.21
    
    
    $
    0.16
 Quarter EndedDec. 31
    
    
    Oct. 1
    
    
    Jul. 2
    
    
    Apr. 22005Net sales
    
    $
    151.8
    
    
    $
    158.7
    
    
    $
    180.3
    
    
    $
    180.8Gross profit
    
    
    30.0
    
    
    
    31.6
    
    
    
    41.8
    
    
    
    45.2Operating income (loss)
    
    
    1.9
    
    
    
    (0.3
    )
    
    
    9.0
    
    
    
    12.7Net income (loss)
    
    $
    (3.0
    )
    
    $
    (3.3
    )
    
    $
    2.8
    
    
    $
    4.4Basic net income (loss) per share (A)
    
    $
    (0.13
    )
    
    $
    (0.14
    )
    
    $
    0.12
    
    
    $
    0.19Diluted net income (loss) per share (A)
    
    $
    (0.13
    )
    
    $
    (0.14
    )
    
    $
    0.12
    
    
    $
    0.19
 
 (A)
    
    Earnings per share for the year may not equal the sum of the four historical quarters earnings per share due to
changes in basic and diluted shares outstanding. 68




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STONERIDGE, INC. AND SUBSIDIARIES
 
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 (in thousands)
 Balance at
    
    Charged to
    
    
    
    
    
    Balance atBeginning of
    
    Costs and
    
    
    
    
    
    End ofPeriod
    
    Expenses
    
    Write-offs
    
    PeriodAllowance for doubtful accounts:Fiscal year ended December 31, 2004
    
    $
    1,483
    
    
    $
    354
    
    
    $
    40
    
    
    $
    1,797Fiscal year ended December 31, 2005
    
    
    1,797
    
    
    
    3,711
    
    
    
    1,679
    
    
    
    3,829Fiscal year ended December 31, 2006
    
    
    3,829
    
    
    
    236
    
    
    
    234
    
    
    
    3,831
 Exchange rateBalance at
    
    Net additions
    
    fluctuations
    
    Balance atBeginning of
    
    charged to
    
    and other
    
    End ofPeriod
    
    income
    
    items
    
    PeriodValuation allowance for deferred tax assets:Fiscal year ended December 31, 2004
    
    $
    2,557
    
    
    $
    9,343
    
    
    $
    216
    
    
    $
    12,116Fiscal year ended December 31, 2005
    
    
    12,116
    
    
    
    5,676
    
    
    
    380
    
    
    
    18,172Fiscal year ended December 31, 2006
    
    
    18,172
    
    
    
    795
    
    
    
    (1,587
    )
    
    
    17,380
 69




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##### Table of Contents



Item 9. Changes In and Disagreements With Accountants On Accounting and Financial Disclosure.
  
 Item 9A. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  Managements Report on Internal Control Over Financial Reporting
 Internal Control-Integrated Framework Internal Control- Integrated Framework
   70




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Report of Independent Registered Public Accounting Firm
  Internal Control-Integrated Framework
      /s/ Ernst & Young LLP
 
 71




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##### Table of Contents



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
   Number of securitiesNumber of securities to
    
    Weighted-average
    
    remaining availablebe issued upon the
    
    exercise price of
    
    for future issuanceexercise of outstanding
    
    outstanding share
    
    under equityshare options
    
    options
    
    compensation plans (1)Equity compensation plans
approved by shareholders
    
    
    624,750
    
    
    $
    11.88
    
    
    
    1,005,992Equity compensation plans not
approved by shareholders
    
    
    
    
    
    $
    
    
    
    
    
 
  72




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14. Principal Accounting Fees and Services.
  
 PART IV
 
 Item 15. Exhibits, Financial Statement Schedules.
  Page inForm 10-K(1
    )
    
    Consolidated Financial Statements:Report of Independent Registered Public Accounting Firm
    
    
    30Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    31Consolidated Statements of Operations for the Fiscal Years Ended December 31, 2006, 2005 and 2004
    
    
    32Consolidated Statements of Cash Flows for the Fiscal Years Ended December 31, 2006, 2005 and 2004
    
    
    33Consolidated Statements of Shareholders Equity for the Fiscal Years Ended December
31, 2006, 2005 and 2004
    
    
    34Notes to Consolidated Financial Statements.
    
    
    35(2
    )
    
    Financial Statement Schedule:Schedule II  Valuation and Qualifying Accounts
    
    
    69(3
    )
    
    Exhibits:See the List of Exhibits on the Index to Exhibits following the signature page
    73




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##### Table of Contents



SIGNATURES
  STONERIDGE, INC.Date: March 16, 2007
    /s/ GEORGE E. STRICKLERGeorge E. StricklerExecutive Vice President, Chief
Financial Officerand Treasurer

(Principal Financial Officer)  Date: March 16, 2007
    /s/ JOHN C. COREYJohn C. CoreyPresident, Chief Executive Officer, and Director
(Principal Executive Officer) Date: March 16, 2007
    /s/ WILLIAM M. LASKYWilliam M. LaskyChairman of the Board of Directors Date: March 16, 2007
    /s/ RICHARD E. CHENEYRichard E. CheneyDirector Date: March 16, 2007
    /s/ AVERY S. COHENAvery S. CohenSecretary and Director Date: March 16, 2007
    /s/ JEFFREY P. DRAIMEJeffrey P. DraimeDirector Date: March 16, 2007
    /s/ SHELDON J. EPSTEINSheldon J. EpsteinDirector Date: March 16, 2007
    /s/ DOUGLAS C. JACOBSDouglas C. JacobsDirector Date: March 16, 2007
    /s/ KIM KORTHKim KorthDirector Date: March 16, 2007

/s/ EARL L. LINEHANEarl L. LinehanDirector 74




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INDEX TO EXHIBITS
 ExhibitNumber
    
    Exhibit3.1
    
    Second Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on
Form S-1 (No. 333-33285)).3.2
    
    Amended and Restated Code of Regulations of the Company (incorporated by
reference to Exhibit 3.2 to the Companys Registration Statement on Form S-1 (No.
333-33285)).4.1
    
    Common Share Certificate (incorporated by reference to Exhibit 4.1 to the
Companys Annual Report on Form 10-K for the year ended December 31, 1997).4.2
    
    Indenture dated as of May 1, 2002 among Stoneridge, Inc. as Issuer,
Stoneridge Control Devices, Inc. and Stoneridge Electronics, Inc., as Guarantors, and
Fifth Third Bank, as trustee (incorporated by reference to Exhibit 4.1 to the
Companys Current Report on Form 8-K filed on May 7, 2002).10.1
    
    Long-Term Incentive
Plan (incorporated by reference to Exhibit 10.1 to the Companys Registration
Statement on Form S-1 (No. 333-33285)).10.2
    
    Lease Agreement between Stoneridge, Inc. and Hunters Square, Inc., with respect
to the Companys division headquarters for Alphabet (incorporated by reference to
Exhibit 10.4 to the Companys Annual Report on Form 10-K for the year ended December
31, 1999).10.3
    
    Credit Agreement dated as of May 1, 2002 among Stoneridge, Inc., as Borrower, the
Lending Institutions Named Therein, as Lenders, National City Bank, as Administrative
Agent, a Joint Lead Arranger and Collateral Agent, Deutsche Bank Securities Inc., as a
Joint Lead Arranger, Comerica Bank and PNC Bank, National Association, as the
Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed on May 7, 2002).10.4
    
    Purchase Agreement dated as of May 1, 2002 among Stoneridge Inc., Stoneridge
Control Devices Inc., Stoneridge Electronics Inc. and Deutsche Bank Securities Inc.,
J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and NatCity Investments
Inc. (incorporated by reference to Exhibit 10.2 to the Companys Current Report on
Form 8-K filed on May 7, 2002).10.5
    
    Registration Rights Agreement dated as of May 1, 2002 among Stoneridge Inc.,
Stoneridge Control Devices Inc., Stoneridge Electronics Inc. and Deutsche Bank
Securities Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and
NatCity Investments Inc. (incorporated by reference to Exhibit 10.3 to the Companys
Current Report on Form 8-K filed on May 7, 2002).10.6
    
    Amendment No. 1 dated as of January 31, 2003 to Credit Agreement dated as of May
1, 2002 among Stoneridge, Inc. as Borrower, the Lending Institutions Named Therein,
as Lenders, National City Bank, as Administrative Agent, a Joint Lead Arranger and
Collateral Agent, Deutsche Bank Securities Inc., as a Joint Lead Arranger, Comerica
Bank and PNC Bank, National Association, as the Co-Documentation Agents (incorporated
by reference to Exhibit 10.9 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2002).10.7
    
    Form of Tax Indemnification Agreement (incorporated by reference to Exhibit 10.10
to the Companys Registration Statement on Form S-1 (No. 333-33285)).10.8
    
    Form of Change in Control Agreement (incorporated by reference to Exhibit 10.14
to the Companys Annual Report on Form 10-K for the year ended December 31, 1998).
 75




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##### Table of Contents



ExhibitNumber
    
    Exhibit10.9
    
    Amendment to Long-Term Incentive Plan (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).10.10
    
    Amendment No. 2 dated as of August 6, 2004 to Credit Agreement dated as of May 1,
2002 among Stoneridge, Inc. as Borrower, the Lending Institutions Named Therein, as
Lenders, National City Bank, as Administrative Agent, a Joint Lead Arranger and Collateral
Agent, Deutsche Bank Securities Inc., as a Joint Lead Arranger, Comerica Bank and PNC Bank,
National Association, as the Co-Documentation Agents (incorporated by reference to Exhibit
10.1 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30,
2004).10.11
    
    Director Share Option Plan (incorporated by reference to Exhibit 4 of the Companys
Registration Statement on Form S-8 (No. 333-96953)).10.12
    
    Form of Long-Term Incentive Plan Share Option Agreement (incorporated by reference to
Exhibit 10.16 to the Companys Annual Report on Form 10-K for the year ended December 31,
2004).10.13
    
    Form of Directors Share Option Plan Share Option Agreement (incorporated by
reference to Exhibit 10.17 to the Companys Annual Report on Form 10-K for the year ended
December 31, 2004).10.14
    
    Form of Long-Term Incentive Plan Restricted Shares Grant Agreement (incorporated by reference to Exhibit 10.18 to the Companys Annual Report on Form 10-K
for the year ended December 31, 2004).10.15
    
    Amendment No. 3 dated as of July 18, 2005 to
Credit Agreement dated as of May 1, 2002 among Stoneridge, Inc. as Borrower, the Lending
Institutions Named Therein as Lenders, National City Bank, as Administrative Agent, a Joint
Lead Arranger and Collateral Agent, Deutsche Bank Securities Inc., as a Joint Lead
Arranger, Comerica Bank and PNC Bank, National Association, as the Co-Documentation Agents
(incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K
filed on July 18, 2005).10.16
    
    Directors Restricted Shares Plan (incorporated by reference to Exhibit 4.3 of the
Companys Registration Statement on Form S-8 (No. 333-127017)).10.17
    
    Amendment No. 4 dated October 25, 2005 to Credit Agreement dated as of May 1, 2002 by
and among the Company as Borrower, the Lending Institutions Named Therein, as Lenders,
National City Bank, as Administrative Agent, a Joint Lead Arranger and Collateral Agent,
Deutsche Bank Securities Inc., as a Joint Lead Arranger, Comerica Bank and PNC Bank,
National Association, as the Co-Documentation Agents (incorporated by reference to Exhibit
99.1 to the Companys Current Report on Form 8-K filed on October 25, 2005).10.18
    
    Form of Directors Restricted Shares Plan Agreement, (incorporated by reference to
Exhibit 10.22 to the Companys Annual Report on Form 10-K for the year ended December 31,
2005).10.19
    
    Form of Long-Term Incentive Plan Restricted Shares Grant Agreement including
Performance and Time-Based Restricted Shares (incorporated by reference to Exhibit 10.23 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2005).10.20
    
    Amendment to Restricted Shares
Grant Agreement (incorporated by reference to Exhibit 10.24 to the Companys Annual Report on Form 10-K for the year ended December 31, 2005).10.21
    
    Form of Change in Control Agreement (incorporated by reference to Exhibit 10.25 to
the Companys Annual Report on Form 10-K for the year ended December 31, 2005).10.22
    
    Severance and Consulting Agreement for Gerald V. Pisani, dated February 28, 2006
(incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K
filed on March 3, 2006).10.23
    
    Employment Agreement between the Company and John C. Corey (incorporated by reference
to Exhibit 10.3 to the Companys Current Report on Form 10-Q filed on May 8, 2006).
 76




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##### Table of Contents



ExhibitNumber
    
    Exhibit10.24
    
    Amendment No. 5 dated March 7, 2006 to Credit Agreement dated as of May 1, 2002 by
and among the Company as Borrower, the Lending Institutions Named Therein, as Lenders,
National City Bank, as Administrative Agent, a Joint Lead Arranger and Collateral Agent,
Deutsche Bank Securities Inc., as a Joint Lead Arranger, Comerica Bank and PNC Bank,
National Association, as the Co-Documentation Agents (incorporated by
reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed on March 10, 2006).10.25
    
    Amended and Restated Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed on April 28, 2006).10.26
    
    Outside Directors Deferred Compensation Plan (incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed on July 26, 2006).10.27
    
    Employees Deferred Compensation Plan (incorporated by reference to Exhibit 99.2 to
the Companys Current Report on Form 8-K filed on July 26, 2006).10.28
    
    Form of 2006 Restricted Shares Grant Agreement (incorporated by reference to Exhibit 99.3 to the Companys Current Report on Form 8-K filed on July 26, 2006).10.29
    
    Form of 2006 Directors Restricted Shares Grant Agreement (incorporated by reference
to Exhibit 99.4 to the Companys Current Report on Form 8-K filed on July 26, 2006).10.30
    
    Annual Incentive Plan approved by Companys Board of Directors (incorporated by
reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed on November 2,
2006).10.31
    
    Partnership Interest Purchase Agreement for the Sale of Companys partnership
interest in Industrial Development Associates Limited, dated December 29, 2006, filed
herewith.14.1
    
    Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14.1 to the Companys Annual Report on Form 10-K for the year ended December 31, 2003).21.1
    
    Subsidiaries and Affiliates of the Company, filed herewith.23.1
    
    Consent of Independent Registered Public Accounting Firm, 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.
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