8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 1, 2017

Commission file number: 001-13337

STONERIDGE, INC.

(Exact name of registrant as specified in its charter)

Ohio	34-1598949
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

39675 MacKenzie Drive, Suite 400,
Novi, Michigan	48377
(Address of principal executive offices)	(Zip Code)

(248) 489-9300

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company           ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

ITEM 2.02 Results of Operations and Financial Condition.

On November 1, 2017, Stoneridge, Inc. (the “Company”) issued a press release announcing its results for the third quarter ended September 30, 2017.  A copy of the press release is attached hereto as Exhibit 99.1. On November 2, 2017, members of the Company’s management are holding a third quarter 2017 earnings conference call discussing the Company’s financial results and the presentation furnished herewith as Exhibit 99.2, will accompany management’s comments.

The press release and earnings conference call presentation contain certain non-GAAP financial measures Adjusted Gross Profit (“Adjusted Gross Profit”), Adjusted Operating Income (“Adjusted Operating Income”), Adjusted Net Income Attributable to Stoneridge, Inc. (“Adjusted Net Income”), Adjusted Earnings per Diluted Share Attributable to Stoneridge Inc. (“Adjusted EPS”), Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) and Free Cash Flow. Management believes that the presentation of the non-GAAP financial measures used in the press release and earnings conference call presentation are useful to both management and investors in their analysis of the Company’s financial position, results of operations and expected results of operations because the Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income, Adjusted EPS, Adjusted EBITDA and Free Cash Flow non-GAAP financial measures facilitate a period to period comparison of operating results by excluding significant unusual, non-recurring items in 2017. For 2017, these items relate to the after-tax transaction costs related to the acquisition of Orlaco, the after-tax step-up in acquired Orlaco inventory, after-tax step-up in fair value of the earn-out consideration related to the acquisitions of Orlaco and the remaining 26% minority interested in PST. EBITDA represents the sum of net income, interest, income taxes, depreciation and amortization. Free Cash Flow represents cash flows from operations less capital expenditures. These non-GAAP financial measures, however, should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies. Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income, Adjusted EPS, Adjusted EBITDA and Free Cash Flow should not be considered a substitute for Gross Profit, Operating Income, Net Income or Earnings per Share prepared in accordance with GAAP.

ITEM 7.01 Regulation FD Disclosure.

The information set forth in Item 2.02 above is hereby incorporated herein by reference.

The information in this report, including the press release and earnings conference call presentation furnished as Exhibits 99.1 and 99.2 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. In addition, the exhibits furnished herewith contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibits.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.  Description

99.1	Press release dated November 1, 2017, announcing results for the third quarter ended September 30, 2017
99.2	Third quarter 2017 results conference call presentation dated November 2, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Stoneridge, Inc.
Date: November 1, 2017	/s/ Robert R. Krakowiak
	Robert R. Krakowiak, Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

STONERIDGE REPORTS STRONG THIRD-QUARTER 2017 RESULTS

INCREASES 2017 GUIDANCE FOR SALES AND ADJUSTED EARNINGS PER SHARE

2017 Third Quarter Results

· Earnings per diluted share attributable to Stoneridge, Inc. (“EPS”) of $0.28

· Adjusted EPS of $0.36 (adjustments related to the step-up in the fair value of the earn-outs related to the Orlaco and PST transactions)

· Sales of $203.6 million, an increase of 17% over Q3 2016

· Gross profit of $62.6 million, an increase of 26% over Q3 2016 (30.7% of sales vs. 28.6% in Q3 2016)

· Operating income of $13.3 million

· Adjusted operating income of $15.6 million, an increase of 32% over Q3 2016 (7.7% of sales vs. 6.8% in Q3 2016)

· Adjusted EBITDA of $22.8 million, an increase of 23% over Q3 2016 (11.2% of sales vs. 10.7% in Q3 2016)

2017 Full-Year Guidance Improvement for Sales and Adjusted EPS

· Sales of $810.0 – $825.0 million, an increase in the midpoint of $12.5 million relative to the previous guidance

· Adjusted EPS of $1.48 – $1.54, an increase in the midpoint of $0.07

NOVI, Michigan – November 2, 2017 – Stoneridge, Inc. (NYSE: SRI) today announced financial results for the third quarter ended September 30, 2017, with sales of $203.6 million and earnings per share of $0.28. Adjusted EPS was $0.36 for the third quarter, excluding the adjustments related to the step-up in the fair value of the earn-outs related to the Orlaco and PST transactions that occurred earlier in the year.

For the third quarter of 2017, Stoneridge reported gross profit of $62.6 million (30.7% of sales). Operating income was $13.3 million and adjusted operating income was $15.6 million (7.7% of sales). Adjusted EBITDA was $22.8 million (11.2% of sales).

Jon DeGaynor, President and Chief Executive Officer, commented, “Our segments continue to outperform our expectations resulting in another quarter of strong financial performance. In addition to the financial success during the third quarter, we achieved some important operational milestones, including hosting our inaugural Supplier Summit. Our supplier partners are an integral part of our ability to deliver world-class products to our global customers. Additionally, we announced that Bob Willig will replace Mike Sloan as the president of our Control Devices segment, with Mike announcing his planned retirement in early 2018. I am pleased to welcome Bob to our leadership team and we are excited to continue to build on the strong organization and performance that Control Devices has enjoyed under Mike’s leadership.”

Third Quarter in Review

Net sales in the Control Devices segment increased relative to Q3 2016 primarily as a result of increased sales volume in our North American and Chinese markets. Control Devices gross margin improved slightly due to an increase in sales and a decrease in overhead. The segment’s operating income increased primarily due to an increase in sales, which was partially offset by higher material, warranty, selling, general and administrative and design and development costs.

Net sales in the Electronics segment increased relative to Q3 2016 primarily as a result of the acquired Orlaco business as well as an increase in sales volume for North American commercial vehicle products. Electronics gross margin improved primarily due to lower material and overhead costs resulting from favorable movement in foreign currency exchange rates and a favorable mix related to Orlaco product sales. The segment’s operating income increased slightly, primarily due to the increase in sales resulting from favorable movement in foreign currency exchange rates, which were offset by higher design and development and material and labor costs, excluding the impact of the acquired Orlaco business.

1

PST’s net sales increased relative to Q3 2016 primarily due to an increase in monitoring product and service revenues and higher product sales volume, as well as favorable foreign currency translation. PST segment gross margin and operating performance improved due to lower overhead and direct labor costs associated with 2016 business realignment actions and favorable labor costs, as well as lower direct material costs related to a favorable movement in foreign currency exchange rates and a favorable sales mix related to monitoring service increases.

DeGaynor added, “I am pleased with the progress and growth exhibited by each of our segments. Control Devices drove growth through our advanced emissions products, particularly in Asia, as well as our actuation products across global platforms. Orlaco has contributed strongly to Electronics’ growth since the acquisition early this year and continued to do so in the quarter. Our legacy Electronics segment also contributed to the success of the business through the execution of driver information system launches during the quarter, as well as an increase in sales in North America and Europe. Finally, PST continued its trend of success by delivering another quarter of strong top-line growth and bottom-line performance.”

Cash and Debt Balances

As of September 30, 2017, Stoneridge had cash and cash equivalent balances totaling $50.8 million. Total debt as of September 30, 2017, was $135.5 million. Total debt less cash and cash equivalents yields a current net debt to trailing-twelve-month (“TTM”) adjusted EBITDA ratio of approximately 1.0x.

For the year to date, Stoneridge generated $51.1 million of cash from operations, compared with $37.0 million for the same period in the previous year. Capital expenditures for the first three quarters of the year were $24.9 million compared with $18.5 million in the first three quarters of 2016. As a result of cash from operations less capital expenditures, free cash flow in the first three quarters of 2017 was $26.2 million compared with $18.5 million in the same period in 2016.

2017 Outlook

The Company revised its 2017 sales guidance to $810.0 – $825.0 million from $795.0 – $815.0 million, an increase to the midpoint of the previous guidance of $12.5 million to $817.5 million.

Further, the Company revised its 2017 adjusted EPS guidance and narrowed the guided range to $1.48 – $1.54 from adjusted EPS of $1.38 – $1.50, excluding (i) transaction costs associated with the acquisition of Orlaco, (ii) the expense associated with the step-up in the fair value of the acquired Orlaco inventory, (iii) the expense resulting from the step-up in the fair value of the earn-out due to Orlaco outperformance and (iv) the expense related to the step-up in the fair value of the earn-out related to the acquisition of the remaining 26% minority interest in PST. The raised guidance represents an increase to the midpoint of the previous guidance of $0.07 to $1.51.

2

Conference Call on the Web

A live Internet broadcast of Stoneridge’s conference call regarding 2017 third-quarter results can be accessed at 9:00 a.m. Eastern time on Thursday, November 2, 2017, at www.stoneridge.com, which will also offer a webcast replay.

About Stoneridge, Inc.

Stoneridge, Inc., headquartered in Novi, Michigan, is an independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the automotive, commercial, motorcycle, agricultural and off-highway vehicle markets. Additional information about Stoneridge can be found at www.stoneridge.com.

Forward-Looking Statements

Statements in this release that are not historical fact are forward-looking statements which involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied in this release. Things that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of a major customer; a significant volume change in automotive, commercial, motorcycle, off-highway and agricultural vehicle production; disruption in the OEM supply chain due to bankruptcies; a significant change in general economic conditions in any of the various countries in which the Company operates; labor disruptions at the Company’s facilities or at any of the Company’s significant customers or suppliers; the ability of the Company’s suppliers to supply the Company with parts and components at competitive prices on a timely basis; customer acceptance of new products; and the failure to achieve successful integration of any acquired company or business, including Orlaco. In addition, this release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Further information concerning issues that could materially affect financial performance related to forward-looking statements contained in this release can be found in the Company’s periodic filings with the Securities and Exchange Commission.

Use of Non-GAAP Financial Information
This press release contains information about Stoneridge's financial results which is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. The provision of these non-GAAP financial measures for 2017 is not intended to indicate that Stoneridge is explicitly or implicitly providing projections on those non-GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict.

Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that adjusted gross profit, adjusted operating income, adjusted net income, adjusted earnings per share, adjusted EBITDA and free cash flow are useful measures in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company’s core operating performance or that may obscure trends useful in evaluating the Company’s continuing operating activities. Management also believes that these measures are useful to both management and investors in their analysis of the Company’s results of operations and provide improved comparability between fiscal periods. Management believes that free cash flow is useful to both management and investors in their analysis of the Company’s ability to service and repay its debt.

Adjusted gross profit, adjusted operating income, adjusted net income, adjusted earnings per share, and adjusted EBITDA should not be considered in isolation or as a substitute for gross profit, operating income, net income, earnings per share, cash provided by operating activities or other income statement or cash flow statement data prepared in accordance with GAAP.

For more information, contact Matthew R. Horvath, Director Investor Relations and M&A (Matthew.Horvath@Stoneridge.com)

3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
(in thousands, except per share data)	2017			2016			2017			2016
Net sales	$	203,582		$	173,846		$	617,004		$	523,365
Costs and expenses:
Cost of goods sold		141,033			124,098			429,890			375,705
Selling, general and administrative		37,277			27,817			107,247			82,836
Design and development		11,976			10,151			35,731			30,912
Operating income		13,296			11,780			44,136			33,912
Interest expense, net		1,508			1,684			4,436			5,038
Equity in earnings of investee		(465	)		(307	)		(1,200	)		(603	)
Other expense (income), net		395			(497	)		1,190			(722	)
Income before income taxes		11,858			10,900			39,710			30,199
Provision for income taxes		3,809			919			13,569			3,114
Net income		8,049			9,981			26,141			27,085
Net loss attributable to noncontrolling interest		-			(303	)		(130	)		(2,009	)
Net income attributable to Stoneridge, Inc.	$	8,049		$	10,284		$	26,271		$	29,094
Earnings per share attributable to Stoneridge, Inc.:
Basic	$	0.29		$	0.37		$	0.94		$	1.05
Diluted	$	0.28		$	0.36		$	0.92		$	1.03
Weighted-average shares outstanding:
Basic		28,136			27,792			28,062			27,753
Diluted		28,652			28,359			28,613			28,266

4

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
(in thousands)	2017			2016
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	50,791		$	50,389
Accounts receivable, less reserves of $1,173 and $1,630, respectively		144,475			113,225
Inventories, net		78,643			60,117
Prepaid expenses and other current assets		23,264			17,162
Total current assets		297,173			240,893
Long-term assets:
Property, plant and equipment, net		108,919			91,500
Intangible assets, net		78,011			39,260
Goodwill		38,224			931
Investments and other long-term assets, net		17,942			21,945
Total long-term assets		243,096			153,636
Total assets	$	540,269		$	394,529
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of debt	$	4,421		$	8,626
Accounts payable		80,069			62,594
Accrued expenses and other current liabilities		48,258			41,489
Total current liabilities		132,748			112,709
Long-term liabilities:
Revolving credit facility		126,000			67,000
Long-term debt, net		5,102			8,060
Deferred income taxes		20,337			9,760
Other long-term liabilities		31,553			4,923
Total long-term liabilities		182,992			89,743
Shareholders' equity:
Preferred Shares, without par value, 5,000 shares authorized, none issued		-			-
Common Shares, without par value, 60,000 shares authorized,
28,966 and 28,966 shares issued and 28,171 and 27,850 shares outstanding at
September 30, 2017 and December 31, 2016, respectively, with no stated value		-			-
Additional paid-in capital		227,143			206,504
Common Shares held in treasury, 795 and 1,116 shares at September 30, 2017
and December 31, 2016, respectively, at cost		(7,056	)		(5,632	)
Retained earnings		73,356			45,356
Accumulated other comprehensive loss		(68,914	)		(67,913	)
Total Stoneridge, Inc. shareholders' equity		224,529			178,315
Noncontrolling interest		-			13,762
Total shareholders' equity		224,529			192,077
Total liabilities and shareholders' equity	$	540,269		$	394,529

5

Nine months ended September 30, (in thousands)	2017			2016
OPERATING ACTIVITIES:
Net income	$	26,141		$	27,085
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation		15,922			14,717
Amortization, including accretion of deferred financing costs		4,993			2,677
Deferred income taxes		6,233			714
Earnings of equity method investee		(1,200	)		(603	)
Loss (gain) on sale of fixed assets		6			(409	)
Share-based compensation expense		5,713			4,587
Tax benefit related to share-based compensation expense		(759	)		-
Change in fair value of earn-out contingent consideration		4,645			-
Changes in operating assets and liabilities, net of effect of business combination:
Accounts receivable, net		(18,232	)		(25,486	)
Inventories, net		(6,564	)		281
Prepaid expenses and other assets		1,530			(5,879	)
Accounts payable		11,611			13,991
Accrued expenses and other liabilities		1,079			5,342
Net cash provided by operating activities		51,118			37,017
INVESTING ACTIVITIES:
Capital expenditures		(24,892	)		(18,484	)
Proceeds from sale of fixed assets		66			652
Business acquisition, net of cash acquired		(77,258	)		-
Net cash used for investing activities		(102,084	)		(17,832	)
FINANCING ACTIVITIES:
Acquisition of noncontrolling interest, including transaction costs		(1,848	)		-
Revolving credit facility borrowings		91,000			-
Revolving credit facility payments		(32,000	)		(13,000	)
Proceeds from issuance of debt		2,557			13,317
Repayments of debt		(10,307	)		(21,312	)
Other financing costs		(61	)		(339	)
Repurchase of Common Shares to satisfy employee tax withholding		(2,222	)		(1,384	)
Net cash provided by (used for) financing activities		47,119			(22,718	)
Effect of exchange rate changes on cash and cash equivalents		4,249			(268	)
Net change in cash and cash equivalents		402			(3,801	)
Cash and cash equivalents at beginning of period		50,389			54,361
Cash and cash equivalents at end of period	$	50,791		$	50,560
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,286		$	4,573
Cash paid for income taxes, net	$	5,745		$	2,019
Supplemental disclosure of non-cash operating and financing activities:
Bank payment of vendor payables under short-term debt obligations	$	-		$	3,764

6

Regulation G Non-GAAP Financial Measure Reconciliations

Reconciliation to US GAAP

Exhibit 1 - Adjusted EPS

Reconciliation of Q3 2017 Adjusted EPS
(USD in millions)	Q3 2017		Q3 2017 EPS
Net Income Attributable to Stoneridge	$	8.0	$	0.28
Add: After-Tax Step-Up in Fair Value of Acquired Inventory from Orlaco		-		-
Add: After-Tax Step-Up in Fair Value of Earn-Out (Orlaco)		1.8		0.06
Add: After-Tax Step-Up in Fair Value of Earn-Out (PST)		0.5		0.02
Adjusted Net Income	$	10.3	$	0.36

Exhibit 2 - Adjusted Gross Profit

(USD in millions)	Q3 2017		YTD 2017
Gross Profit	$	62.6	$	187.1
Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco		-		1.6
Adjusted Gross Profit	$	62.6	$	188.8

Exhibit 3 – Adjusted Operating Income

(USD in millions)	Q3 2017		YTD 2017
Operating Income	$	13.3	$	44.1
Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco		-		1.6
Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco)		1.8		3.9
Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST)		0.5		0.7
Add: Pre-Tax Transaction Costs Adjustment (Orlaco)		-		1.2
Adjusted Operating Income	$	15.6	$	51.6

Exhibit 4 – Adjusted EBITDA

(USD in millions)	Q4 2016		Q1 2017		Q2 2017		Q3 2017		TTM		Q3 2016
Income before tax	$	9.0	$	13.7	$	14.1	$	11.9	$	48.7	$	10.9
Interest expense, net		1.2		1.4		1.5		1.5		5.7		1.7
Depreciation and amortization		6.1		6.5		7.1		7.1		26.8		6.0
EBITDA	$	16.4	$	21.6	$	22.7	$	20.5	$	81.2	$	18.6
Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco		-		1.0		0.7		-		1.6		-
Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco)		-		-		2.1		1.8		3.9		-
Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST)		-		-		0.2		0.5		0.7		-
Add: Pre-Tax Transaction Costs Adjustment (Orlaco)		-		1.2		-		-		1.2		-
Adjusted EBITDA	$	16.4	$	23.8	$	25.7	$	22.8	$	88.7	$	18.6

Exhibit 5 – Free Cash Flow

(USD in millions)	YTD 2017			YTD 2016
Net Cash Provided by Operating Activities	$	51.1		$	37.0
Less: Capital Expenditures		(24.9	)		(18.5	)
Free Cash Flow	$	26.2		$	18.5

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EX-99.2

Third - Quarter 2017 Results November 2, 2017 Exhibit 99.2

2 Forward - Looking Statements Statements in this presentation that are not historical facts are forward - looking statements, which involve risks and uncertaint ies that could cause actual events or results to differ materially from those expressed or implied by the statements. Important factors that may cause ac tua l results to differ materially from those in the forward - looking statements include, among other factors, the loss or bankruptcy of a major customer; the costs and timing of facility closures, business realignment or similar actions; a significant change in medium - and heavy - duty truck, automotive or agricultu ral and off - highway vehicle production; our ability to achieve cost reductions that offset or exceed customer - mandated selling price reductions; a significa nt change in general economic conditions in any of the various countries in which Stoneridge operates; labor disruptions at Stoneridge’s facilities or at a ny of Stoneridge’s significant customers or suppliers; the ability of suppliers to supply Stoneridge with parts and components at competitive prices on a ti mel y basis; the amount of Stoneridge’s indebtedness and the restrictive covenants contained in the agreements governing its indebtedness, including its as set - based credit facility and senior secured notes; customer acceptance of new products; capital availability or costs, including changes in interest r ate s or market perceptions; the failure to achieve successful integration of any acquired company or business; the occurrence or non - occurrence of circumstances beyond Stoneridge’s control; and the items described in “Risk Factors” and other uncertainties or risks discussed in Stoneridge’s periodic and cu rre nt reports filed with the Securities and Exchange Commission. Important factors that could cause the performance of the commercial vehicle and automotive industry to differ materially fro m t hose in the forward - looking statements include factors such as (1) continued economic instability or poor economic conditions in the United States and gl oba l markets, (2) changes in economic conditions, housing prices, foreign currency exchange rates, commodity prices, including shortages of and increases or volatility in the price of oil, (3) changes in laws and regulations, (4) the state of the credit markets, (5) political stability, (6) international conflict s a nd (7) the occurrence of force majeure events. These factors should not be construed as exhaustive and should be considered with the other cautionary statements in Stonerid ge’ s filings with the Securities and Exchange Commission. Forward - looking statements are not guarantees of future performance; Stoneridge’s actual results of operations, financial condit ion and liquidity, and the development of the industry in which Stoneridge operates may differ materially from those described in or suggested by the fo rwa rd - looking statements contained in this presentation. In addition, even if Stoneridge’s results of operations, financial condition and liquidity, a nd the development of the industry in which Stoneridge operates are consistent with the forward - looking statements contained in this presentation, those results or de velopments may not be indicative of results or developments in subsequent periods. This presentation contains time - sensitive information that reflects management’s best analysis only as of the date of this prese ntation. Any forward - looking statements in this presentation speak only as of the date of this presentation, and Stoneridge undertakes no obligation to up dat e such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of futu re performance, unless expressed as such, and should only be viewed as historical data. Stoneridge does not undertake any obligation to publicly update or revise any forward - looking statement as a result of new infor mation, future events or otherwise, except as otherwise required by law. Rounding Disclosure: There may be slight immaterial differences between figures represented in our public filings compared t o w hat is shown in this presentation. The differences are the a result of rounding due to the representation of values in millions rather than thous and s in public filings.

3 Overview of Achievements x Continued strong performance at each segment x Control Devices growth led by emissions products, primarily in China, as well as actuation products globally x Electronics growth driven by outperformance at Orlaco as well as the launch of new driver information system programs x PST strong performance as a result of stabilizing macroeconomic conditions leading to top - line growth and continued margin expansion x Hosted inaugural Supplier Summit recognizing supplier excellence x New President of Control Devices segment, Bob Willig, replaces Mike Sloan, who is planning to retire in 2018 Q 3 2017 Key Accomplishments Q 3 2017 Financial Performance 2017 Updated Guidance 2017 Guidance Previously Provided 2017 Guidance Updated* Midpoint Improvement Sales $795 - $815 Million $810 - $825 Million $12.5 million Adjusted Gross Margin 30.0% - 31.0% 30.0% - 31.0% Adjusted Operating Margin 8.0% - 9.0% 8.0% - 9.0% Adjusted EPS $1.38 - $1.50 $1.48 - $1.54 $0.07 EPS Adjusted EBITDA Margin 11.5% - 12.5% 11.5% - 12.5% Reported Adjusted Sales $203.6 Million $203.6 Million Gross Profit $62.6 Million $62.6 Million Operating Income $13.3 Million $15.6 Million EPS $0.28 $0.36 Adjusted EBITDA -- $22.8 Million *Guidance as of November 2, 2017

4 Q3 Year to Date Sales Adjusted Gross Profit and % Margin Adjusted Operating Income and % Margin Adjusted EBITDA and % Margin $52.4 $72.3 10.0% 11.7% $45.0 $55.0 $65.0 $75.0 YTD 2016 YTD 2017 9.0% 11.0% 13.0% $18.6 $22.8 10.7% 11.2% $15.0 $20.0 $25.0 Q3 2016 Q3 2017 9.0% 11.0% 13.0% 15.0% $33.9 $51.6 6.5% 8.4% $25.0 $35.0 $45.0 $55.0 YTD 2016 YTD 2017 4.5% 9.5% 14.5% $11.8 $15.6 6.8% 7.7% $7.0 $12.0 $17.0 Q3 2016 Q3 2017 5.5% 7.5% 9.5% $147.7 $188.8 28.2% 30.6% $130.0 $150.0 $170.0 $190.0 $210.0 YTD 2016 YTD 2017 25.0% 30.0% 35.0% 40.0% $49.7 $62.6 28.6% 30.7% $40.0 $50.0 $60.0 $70.0 Q3 2016 Q3 2017 25.0% 30.0% 35.0% 40.0% $173.8 $203.6 Q3 2016 Q3 2017 Financial Performance +17% +18% +26% +32% $’s in USD Millions +23% +28% +52% +38% Establishing a track record of continuous improvement $523.4 $617.0 YTD 2016 YTD 2017

5 Stoneridge Leadership Transition Control Devices is well positioned to expand on current success and drive growth through strong leadership and a well - defined strategic plan Mike Sloan, former President of Control Devices, announced he is planning to retire in early 2018 Bob Willig replaced Mike as President of Control Devices effective October 23 rd Mike will remain with Stoneridge until early 2018 to ensure a seamless and orderly transition Bob brings extensive global leadership experience and proven new business development success His prior experiences include serving in executive roles as CEO of Plasan Carbon Composites; president of Driveline Americas, and president of Sinter Americas at GKN; and president of the Power Transmission Division at Tomkins PLC (Gates Corporation ) He has served on various boards, including Plasan’s Board of Directors, GKN’s Chief Executive Council and Gates Corp. Asia Board of Directors

6 Focus on Vehicle Megatrends 2016 2017 2018 2019 2020 2021 Our focus on c ertain v ehicle m egatrends w ill d rive o ur long - term s trategy Source: Dec 2015 IHS; 2015 LMCA, ACT Research, Company Data INTELLIGENCE 8% CAGR SAFETY & SECURITY 7% CAGR EMISSIONS 16% CAGR FUEL EFFICIENCY 5% CAGR Stoneridge’s products c omprise the basic e lements of every v ehicle’s e lectrical s ystem and control architecture U nderlying vehicle markets are expected to grow at a 2 – 3 % 5 - year CAGR Stoneridge expects to grow at 2 – 3x the underlying markets

7 Stoneridge - A Vehicle Technology Company Electrified Drivetrain Front - Axle Disconnect (Current) Decouples the front - axle in a 4x4 vehicle allowing 4x2 operation “on - the - fly” Smart Bar (Current) Axle - mounted smart actuator allowing increased performance in off - road driving situations Image Sources: www.motortrend.com, www.off - road.com Axle and suspension actuation technologies remain a platform for growth as drivetrains continue to evolve Electric Axle (E - Axle) (2020+) Stoneridge has developed actuators that will be included in E - Axle systems that will enable electric drive propulsion in either hybrid or fully electric vehicles Awarded E - Axle development on high - performance platform in North America with a planned start - of - production (SOP) in 2021 Developing solutions for multiple other OEM / Tier 1 applications

8 China – A Platform for Growth Strong financial performance Year to d ate s ales – Approximately $28 million (53% growth over 2016) Backlog suggests CAGR of over 20% from 2016 – 2020* World - class manufacturing facility in Suzhou Products, operations and engineering focused on “Asia - for - Asia” strategy Regulations creating emissions requirements Exhaust gas temperature (EGT) sensors (Control Devices segment) Local customers and content growth Commercial vehicle driver information systems (Electronics segment) Continuing to focus on opportunities to serve the local market and expand manufacturing and development in China as a catalyst for growth *Based on current IHS and LMC data

9 Delivering on our commitments through market leading products, continuous improvement in all aspects of the organization, operating efficiency and strong financial performance Delivering 2 - 3x the growth of our underlying market Continuing to evolve to address market trends Leveraging our product portfolio, manufacturing facility and local engineering capabilities in China to drive growth in the region 3 rd Quarter 2017 Summary Driving shareholder v alue t hrough s trong f inancial performance and a w ell d efined long - term strategy

Financial Update

11 3 rd Quarter 2017 Summary 3 rd Quarter 2017 Financial Results Increased m idpoint sales guidance to $817.5 million Increased midpoint adjusted EPS guidance to $1.51 2017 Updated Guidance 2017 Guidance Previously Provided 2017 Guidance Updated* Midpoint Improvement Sales $795 - $815 Million $810 - $825 Million $12.5 million Adjusted Gross Margin 30.0% - 31.0% 30.0% - 31.0% Adjusted Operating Margin 8.0% - 9.0% 8.0% - 9.0% Adjusted EPS $1.38 - $1.50 $1.48 - $1.54 $0.07 EPS Adjusted EBITDA Margin 11.5% - 12.5% 11.5% - 12.5% Sales of $203.6 million, an increase of 17% over Q3 2016 Control Devices sales of $108.0 million, an increase of 4% over Q3 2016 Electronics sales of $80.3 million, an increase of 40% over Q3 2016 PST sales of $25.5 million, an increase of 14% over Q3 2016 Adjusted operating income of $15.6 million (7.7% operating margin), an increase of 32% over Q3 2016 Control Devices operating income of $16.2 million (15.1% operating margin), an increase of 6% over Q3 2016 Electronics adjusted operating income of $6.7 million (8.4% adjusted operating margin), an increase of 80% over Q3 2016 PST adjusted operating income of $1.5 million (5.8% adjusted operating margin), an increase of $1.5 million over Q3 2016 *Guidance as of November 2, 2017

12 Q3 Year to Date Sales Operating Income and % Margin $47.1 $55.3 15.4% 16.1% $40.0 $45.0 $50.0 $55.0 $60.0 YTD 2016 YTD 2017 10.0% 20.0% 30.0% $15.3 $16.2 14.7% 15.1% $10.0 $12.0 $14.0 $16.0 $18.0 Q3 2016 Q3 2017 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% $306.4 $343.0 $300.0 $320.0 $340.0 $360.0 YTD 2016 YTD 2017 $104.1 $108.0 Q3 2016 Q3 2017 Control Devices Financial Performance +4% +12% +6% $’s in USD Millions +17% Outpacing the underlying market while driving margin expansion Control Devices Overview Revenue grew by 4% compared to Q3 2016 despite US light vehicle production down 13.6% versus Q3 2016 Revenue grew 12% year - to - date compared to US light vehicle production down 7.8% in the same period in 2016 Continued growth in emissions products and demand for actuation products Margin improvement as a result of operating process improvements leading to reduced overhead as a percentage of sales

13 Q3 Year to Date Sales Adjusted Operating Income and % Margin $12.1 $18.8 6.6% 7.9% $0.0 $10.0 $20.0 YTD 2016 YTD 2017 5.0% 7.0% 9.0% $3.7 $6.7 6.5% 8.4% $1.0 $3.0 $5.0 $7.0 Q3 2016 Q3 2017 4.5% 6.5% 8.5% 10.5% $182.9 $237.3 YTD 2016 YTD 2017 $57.3 $80.3 Q3 2016 Q3 2017 Electronics Financial Performance +40% +30% +80% $’s in USD Millions +56% Launch of new programs and Orlaco’s performance is leading the way for top - line growth and margin expansion for Electronics Electronics Overview Launch of new driver information system programs during the quarter Orlaco continues to exceed expectations Adjusted operating margin improvement of 190 basis points in Q3 and 130 basis points year - to - date due to favorable product mix, reduced overhead as a percentage of sales and global procurement activities resulting in reduced direct material costs Continued investment in design and development activities to drive future growth

14 Q3 Year to Date Sales Adjusted Operating Income and % Margin $22.3 $25.5 Q3 2016 Q3 2017 $0.0 $1.5 0.1% 5.8% $0.0 $0.5 $1.0 $1.5 $2.0 Q3 2016 Q3 2017 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% - $4.2 $3.4 - 6.9% 4.8% -$7.0 -$2.0 $3.0 YTD 2016 YTD 2017 -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% $60.2 $70.7 YTD 2016 YTD 2017 PST Financial Performance $’s in USD Millions PST is growing in the local market and improving local cash flow profile through increased financial performance and reduction of external debt PST Overview Revenue growth remains strong with continued margin expansion and stability PST segment is strongly correlated to light vehicle and motorcycle demand – starting to see signs of stability and expansion in these markets Margin expansion driven by reduced material, direct labor and overhead costs, as well as SG&A leverage Continued focus on operating improvement resulting in local cash flow generation has allowed for debt reduction of $7 million since the beginning of 2017 +14% +17% +$1.5m +$7.6m

15 2017 Guidance Previously Provided 2017 Guidance Updated* Midpoint Improvement Sales $795 - $815 Million $810 - $825 Million $12.5 million Adjusted Gross Margin 30.0% - 31.0% 30.0% - 31.0% Adjusted Operating Margin 8.0% - 9.0% 8.0% - 9.0% Adjusted EPS $1.38 - $1.50 $1.48 - $1.54 $0.07 EPS Adjusted EBITDA Margin 11.5% - 12.5% 11.5% - 12.5% FY 2017 Updated Guidance Increasing our full - year outlook for sales and adjusted EPS Guiding to midpoint sales of $817.5 million, midpoint adjusted EPS of $1.51 *Guidance as of November 2, 2017

16 All segments exceeded expectations for financial performance Control Devices – 4 % sales growth, 6% operating income growth vs. Q3 2016 Electronics – 40% sales growth, 80% adjusted operating income growth vs. Q3 2016 PST – 14% sales growth, $ 1.5 million adjusted operating income growth vs. Q3 2016 Increased our full - year guidance for sales and adjusted EPS Sales midpoint increase of $12.5 million to $817.5 million ($810 - $825 million) Adjusted EPS midpoint increase of $0.07 to $1.51 ($1.48 - $1.54) 3 rd Quarter 2017 Financial Summary Driving shareholder v alue t hrough s trong f inancial performance and a w ell d efined long - term strategy

Thank You

18 Appendix

19 2017 Q3 Adjustments The expense resulting from the step - up in the fair value of the earn - out due to Orlaco outperformance was $1.8 million resulting in an EPS adjustment of $ 0.06 The expense related to the step - up in the fair value of the earn - out related to the acquisition of the remaining 26% minority interest in PST was $ 0.5 million resulting in an EPS adjustment of $ 0.02 We adjusted EPS for $0.08 of acquisition related items in the third quarter Adjustment Expected Q3 2017 After - Tax Impact (USD millions) Expected Q3 2017 After - Tax EPS Impact Earn - out (Electronics / Orlaco) ($1.8) ($0.06) Earn - out (PST) ($0.5) ($0.02) Total ($2.3) ($0.08)

20 Income Statement (Unaudited) (in thousands, except per share data) 2017 2016 2017 2016 Net sales $ 203,582 $ 173,846 $ 617,004 $ 523,365 Costs and expenses: Cost of goods sold 141,033 124,098 429,890 375,705 Selling, general and administrative 37,277 27,817 107,247 82,836 Design and development 11,976 10,151 35,731 30,912 Operating income 13,296 11,780 44,136 33,912 Interest expense, net 1,508 1,684 4,436 5,038 Equity in earnings of investee (465) (307) (1,200) (603) Other expense (income), net 395 (497) 1,190 (722) 11,858 10,900 39,710 30,199 3,809 919 13,569 3,114 Net income 8,049 9,981 26,141 27,085 Net loss attributable to noncontrolling interest - (303) (130) (2,009) Net income attributable to Stoneridge, Inc. $ 8,049 $ 10,284 $ 26,271 $ 29,094 Earnings per share attributable to Stoneridge, Inc.: Basic $ 0.29 $ 0.37 $ 0.94 $ 1.05 Diluted $ 0.28 $ 0.36 $ 0.92 $ 1.03 Weighted-average shares outstanding: Basic 28,136 27,792 28,062 27,753 Diluted 28,652 28,359 28,613 28,266 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS September 30, Income before income taxes Provision for income taxes Three months ended Nine months ended September 30,

21 Segment Financial Information 2017 2016 2017 2016 Net Sales: Control Devices $ 106,842 $ 103,700 $ 339,716 $ 304,957 Inter-segment sales 1,118 430 3,269 1,448 Control Devices net sales 107,960 104,130 342,985 306,405 Electronics 71,354 47,804 206,769 158,201 Inter-segment sales 8,959 9,495 30,538 24,706 Electronics net sales 80,313 57,299 237,307 182,907 PST 25,386 22,342 70,519 60,207 Inter-segment sales 145 - 145 - PST net sales 25,531 22,342 70,664 60,207 Eliminations (10,222) (9,925) (33,952) (26,154) Total net sales $ 203,582 $ 173,846 $ 617,004 $ 523,365 Operating Income (Loss): Control Devices $ 16,249 $ 15,319 $ 55,257 $ 47,133 Electronics 4,896 3,735 13,267 12,050 PST 1,018 29 2,720 (4,179) Unallocated Corporate (8,867) (7,303) (27,108) (21,092) Total operating income $ 13,296 $ 11,780 $ 44,136 $ 33,912 Depreciation and Amortization: Control Devices $ 2,664 $ 2,561 $ 8,050 $ 7,345 Electronics 2,136 996 5,947 3,076 PST 2,115 2,307 6,299 6,388 Unallocated Corporate 181 115 376 309 Total depreciation and amortization $ 7,096 $ 5,979 $ 20,672 $ 17,118 Interest Expense, net: Control Devices $ 19 $ 56 $ 84 $ 172 Electronics 24 33 68 196 PST 378 934 1,482 2,686 Unallocated Corporate 1,087 661 2,802 1,984 Total interest expense, net $ 1,508 $ 1,684 $ 4,436 $ 5,038 Capital Expenditures: Control Devices $ 5,523 $ 3,229 $ 13,318 $ 9,260 Electronics 2,417 1,244 6,451 5,229 PST 974 640 2,899 2,516 Unallocated Corporate 811 1,365 2,224 1,479 Total capital expenditures $ 9,725 $ 6,478 $ 24,892 $ 18,484 September 30, Nine months endedThree months ended September 30,

22 Balance Sheet CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, (in thousands) 2017 2016 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 50,791 $ 50,389 144,475 113,225 Inventories, net 78,643 60,117 Prepaid expenses and other current assets 23,264 17,162 Total current assets 297,173 240,893 Long-term assets: Property, plant and equipment, net 108,919 91,500 Intangible assets, net 78,011 39,260 Goodwill 38,224 931 Investments and other long-term assets, net 17,942 21,945 Total long-term assets 243,096 153,636 Total assets $ 540,269 $ 394,529 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of debt $ 4,421 $ 8,626 Accounts payable 80,069 62,594 Accrued expenses and other current liabilities 48,258 41,489 Total current liabilities 132,748 112,709 Long-term liabilities: Revolving credit facility 126,000 67,000 Long-term debt, net 5,102 8,060 Deferred income taxes 20,337 9,760 Other long-term liabilities 31,553 4,923 Total long-term liabilities 182,992 89,743 Shareholders' equity: Preferred Shares, without par value, 5,000 shares authorized, none issued - - Common Shares, without par value, 60,000 shares authorized, - - Additional paid-in capital 227,143 206,504 and December 31, 2016, respectively, at cost (7,056) (5,632) Retained earnings 73,356 45,356 Accumulated other comprehensive loss (68,914) (67,913) Total Stoneridge, Inc. shareholders' equity 224,529 178,315 Noncontrolling interest - 13,762 Total shareholders' equity 224,529 192,077 Total liabilities and shareholders' equity $ 540,269 $ 394,529 September 30, 2017 and December 31, 2016, respectively, with no stated value 28,966 and 28,966 shares issued and 28,171 and 27,850 shares outstanding at Common Shares held in treasury, 795 and 1,116 shares at September 30, 2017 Accounts receivable, less reserves of $1,173 and $1,630, respectively

23 Statement of Cash Flows CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended September 30, (in thousands) 2017 2016 OPERATING ACTIVITIES: Net income $ 26,141 $ 27,085 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 15,922 14,717 Amortization, including accretion of deferred financing costs 4,993 2,677 Deferred income taxes 6,233 714 Earnings of equity method investee (1,200) (603) Loss (gain) on sale of fixed assets 6 (409) Share-based compensation expense 5,713 4,587 Tax benefit related to share-based compensation expense (759) - Change in fair value of earn-out contingent consideration 4,645 - Accounts receivable, net (18,232) (25,486) Inventories, net (6,564) 281 Prepaid expenses and other assets 1,530 (5,879) Accounts payable 11,611 13,991 Accrued expenses and other liabilities 1,079 5,342 Net cash provided by operating activities 51,118 37,017 INVESTING ACTIVITIES: Capital expenditures (24,892) (18,484) Proceeds from sale of fixed assets 66 652 Business acquisition, net of cash acquired (77,258) - Net cash used for investing activities (102,084) (17,832) Changes in operating assets and liabilities, net of effect of business combination:

24 Statement of Cash Flows (Cont.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended September 30, (in thousands) 2017 2016 FINANCING ACTIVITIES: Acquisition of noncontrolling interest, including transaction costs (1,848) - Revolving credit facility borrowings 91,000 - Revolving credit facility payments (32,000) (13,000) Proceeds from issuance of debt 2,557 13,317 Repayments of debt (10,307) (21,312) Other financing costs (61) (339) Repurchase of Common Shares to satisfy employee tax withholding (2,222) (1,384) Net cash provided by (used for) financing activities 47,119 (22,718) Effect of exchange rate changes on cash and cash equivalents 4,249 (268) Net change in cash and cash equivalents 402 (3,801) Cash and cash equivalents at beginning of period 50,389 54,361 Cash and cash equivalents at end of period $ 50,791 $ 50,560 Supplemental disclosure of cash flow information: Cash paid for interest $ 4,286 $ 4,573 Cash paid for income taxes, net $ 5,745 $ 2,019 Supplemental disclosure of non-cash operating and financing activities: Bank payment of vendor payables under short-term debt obligations $ - $ 3,764

25 Reconciliations to US GAAP

26 Reconciliations to US GAAP This document contains information about Stoneridge's financial results which is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non - GAAP financial measures are reconciled to their closest GAAP financial measures in the appendix of this document. The provision of these non - GAAP financial measures for 2017 is not intended to indicate that Stoneridge is explicitly or implicitly providing projections on those non - GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this document and the adjustments that management can reasonably predict.

27 Reconciliations to US GAAP Reconciliation of Stoneridge Adjusted Gross Profit (USD in millions) Q3 2017 YTD 2017 Gross Profit $62.6 $187.1 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco - 1.6 Adjusted Gross Profit $62.6 $188.8 Reconciliation of Stoneridge Adjusted Operating Income (USD in millions) Q3 2017 YTD 2017 Operating Income $13.3 $44.1 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco - 1.6 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) 1.8 3.9 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST) 0.5 0.7 Add: Pre-Tax Transaction Costs Adjustment (Orlaco) - 1.2 Adjusted Operating Income $15.6 $51.6 Reconciliation of Q3 2017 Adjusted EPS Reconciliation of Q2 Adjusted EBITDA (USD in millions) Q3 2017 Q3 2017 EPS Net Income Attributable to Stoneridge $8.0 0.28 Add: After-Tax Step-Up in Fair Value of Acquired Inventory from Orlaco - - Add: After-Tax Step-Up in Fair Value of Earn-Out (Orlaco) 1.8 0.06 Add: After-Tax Step-Up in Fair Value of Earn-Out (PST) 0.5 0.02 Adjusted Net Income $10.3 $0.36

28 Reconciliations to US GAAP Reconciliation of Q3 Adjusted EBITDA (USD in millions) Q3 2017 YTD 2017 Q3 2016 YTD 2016 Income before tax $11.9 $39.7 $10.9 $30.2 Interest expense, net 1.5 4.4 1.7 5.0 Depreciation and amortization 7.1 20.7 6.0 17.1 EBITDA $20.5 $64.8 $18.6 $52.4 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco - 1.6 - - Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) 1.8 3.9 - - Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST) 0.5 0.7 - - Add: Pre-Tax Transaction Costs Adjustment (Orlaco) - 1.2 - - Adjusted EBITDA $22.8 $72.3 $18.6 $52.4 Reconciliation of Electronics Adjusted Operating Income (USD in millions) Q1 2017 Q2 2017 Q3 2017 YTD 2017 Operating Income $5.6 $2.8 $4.9 $13.3 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 1.0 0.7 - 1.6 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) - 2.1 1.8 3.9 Adjusted Operating Income $6.5 $5.6 $6.7 $18.8 Reconciliation of PST Adjusted Operating Income (USD in millions) Q1 2017 Q2 2017 Q3 2017 YTD 2017 Operating Income $0.6 $1.1 $1.0 $2.7 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST) - 0.2 0.5 0.7 Adjusted Operating Income $0.6 $1.3 $1.5 $3.4