Filed pursuant to Rule 424(b)(3)
No. 333-169800

8,846,335 Shares

Stoneridge, Inc.

Common Shares

 

The Common Shares are being sold by the selling shareholders. We will not receive any of the proceeds from the Common Shares sold by the selling shareholders.

The Common Shares are listed on the New York Stock Exchange under the symbol “SRI”. The closing price of the Common Shares on the New York Stock Exchange on November 2, 2010 was $11.33 per share.

The underwriter has an option to purchase from the selling shareholders a maximum of 1,326,950 additional Common Shares to cover over-allotments of Common Shares.

Investing in the Common Shares involves risks. See “Risk Factors” on page 18.

		Price to Public				Underwriting Discounts and Commissions				Proceeds to Selling Shareholders
Per Share			$10.75				$0.5375				$10.2125
Total			$95,098,101.25				$4,754,905.06				$90,343,196.19

Delivery of the Common Shares will be made on or about November 8, 2010.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse

The date of this prospectus is November 2, 2010.

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		Page
Prospectus Summary			1
Risk Factors			18
Information Regarding Forward-Looking Statements			28
Market and Industry Data and Forecasts			29
Use of Proceeds			30
Price Range of Common Shares and Dividend Policy			30
Capitalization			31
Selected Consolidated Financial Data			32
Management’s Discussion and Analysis of Financial Condition and Results of Operations			34

		Page
Business			54
Management and Board of Directors			59
Selling Shareholders			61
Description of Capital Stock			64
Material U.S. Federal Tax Consequences for Non-U.S. Holders of Common Shares			66
Underwriting			68
Notice to Canadian Residents			72
Legal Matters			74
Experts			74
Where You Can Find More Information			74
Incorporation of Certain Documents by Reference			75

 

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

In this prospectus, unless we state otherwise or the context indicates otherwise:

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements including the notes thereto appearing elsewhere or incorporated by reference in this prospectus. Because this is a summary, it may not contain all the information that may be important to you. You should read the entire prospectus, including the information incorporated by reference in this prospectus, before making an investment decision. Some of the statements in this summary are forward-looking statements. Please see “Information Regarding Forward-Looking Statements” and “Market and Industry Data and Forecasts” for more information regarding these statements.

Our Business

Overview

We are a global designer and manufacturer of highly engineered electrical and electronic components, modules and systems for the medium- and heavy-duty truck, automotive, agricultural and off-highway vehicle markets. Our products and systems are critical elements in the management of mechanical and electrical systems to improve overall vehicle performance, convenience and monitoring in areas such as emissions control, fuel efficiency, safety and security. Our extensive footprint, including our joint ventures, encompasses more than 26 locations in 14 countries and enables us to supply global and regional commercial vehicle and automotive manufacturers around the world. For the twelve months ended June 30, 2010, our net sales were $566.1 million, our net income attributable to Stoneridge, Inc. and subsidiaries was $4.6 million and our adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, calculated as shown in footnote 5 under “— Summary Consolidated Financial and Other Data,” was $47.9 million.

Our custom-engineered products and systems are used to activate equipment and accessories, monitor and display vehicle performance and control, and distribute electrical power and signals. Our product offerings consist of (1) vehicle instrumentation systems, (2) vehicle management electronics, (3) application-specific switches and actuators, (4) sensors and (5) power and signal distribution systems. We supply our products, predominantly on a sole-source basis, to many of the world’s leading medium- and heavy-duty truck and automotive original equipment manufacturers, or OEMs, and select non-vehicle OEMs, as well as certain commercial vehicle and automotive tier one suppliers. These OEMs are increasingly utilizing electronic technology to comply with more stringent regulations (particularly emissions and safety) and to meet end-user demand for improved vehicle performance and greater convenience. As a result, per-vehicle electronic content has been increasing. We believe our product offerings provide us with the opportunity to capitalize on this development to grow faster than the underlying vehicle volume growth in markets that we serve.

Our products and systems are sold to numerous OEM and tier one supplier customers, in addition to aftermarket suppliers, for use on many different vehicle platforms. We supply multiple different parts to many of our principal customers under requirements contracts for a particular model. These contracts range in duration from one year to the production life of the model, which commonly extends for three to seven years. In 2009, net sales to medium- and heavy-duty truck, automotive and light truck, and agricultural/other equipment manufacturers accounted for approximately 50%, 33%, and 17% of our net sales, respectively. These net sales percentages include sales to the aftermarket distribution channel, which comprised 5.5% of our 2009 net sales.

Our OEM customer base currently includes:

Navistar International Corp. Ford Motor Company Chrysler LLC Daimler AG Scania AB Nissan Motor Co., Ltd. Mazda Motor Corporation		Deere & Company General Motors Company MAN SE Volvo AB PACCAR Inc. Blue Bird Corporation

In 2009, our top three customers accounted for 48% of our net sales and our top ten customers accounted for 69% of our net sales.

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In addition, we supply products to a wide range of tier one suppliers, including American Axle & Manufacturing Holdings, Inc., Delphi Automotive LLP, Lear Corporation, Cummins Inc., Detroit Diesel Corporation and Visteon Corporation, as well as non-vehicle OEMs such as Carrier Corporation, NACCO Industries, Inc., and Thermo King Corporation.

Our Products

Our products are associated with electronics management and the distribution of power in vehicles in order to improve vehicle performance and reliability. We offer a broad line of products through two reportable segments: Electronics and Control Devices.

Electronics.  Our Electronics segment produces electronic instrument clusters, electronic control units, driver information systems and electrical distribution systems (primarily wiring harnesses and connectors for electrical power and signal distribution). These products collect, store and display vehicle information such as speed, pressure, maintenance data, trip information, operator performance, temperature, distance traveled and driver messages related to vehicle performance. In addition, power distribution systems regulate, coordinate and direct the operation of the electrical system within a vehicle. These products use state-of-the-art hardware, software and multiplexing technology and are sold principally to the medium- and heavy-duty truck, agricultural and off-highway vehicle markets. We also manufacture entire instrument panels for the medium-duty truck market that are configured specifically to the OEM customer’s specifications.

Control Devices.  Our Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle. This segment includes product lines such as sensors, switches, valves, and actuators, as well as other electronic products. Sensor products are employed in major vehicle systems such as the emissions, safety, powertrain, braking, climate control, steering and suspension systems. Switches transmit signals that activate specific functions. Our switch technology is principally used in two capacities, user-activated and hidden. User-activated switches are used by a vehicle’s operator or passengers to manually activate headlights, rear defrosters and other accessories. Hidden switches are not typically visible to vehicle operators or passengers and are engaged to activate or deactivate selected functions as part of normal vehicle operations, such as brake lights. In addition, our Control Devices segment designs and manufactures electromechanical actuator products that enable OEMs to deploy power functions in a vehicle and can be designed to integrate switching and control functions. We sell these products principally to the automotive and light truck market.

The following table sets forth, for the periods indicated, the percentage of net sales attributable to our product categories:

						Percentage of Net Sales for
Product Category		Segment				Year Ended December 31, 2009				Year Ended December 31, 2008				Six Months Ended June 30, 2010
Vehicle electrical power & distribution systems			Electronics				41	%			40	%			41	%
Electronic instrumentation & information display products			Electronics				23	%			29	%			22	%
Actuator & temperature, pressure & speed sensors			Control Devices				19	%			17	%			20	%
Switch & position sensors			Control Devices				17	%			14	%			17	%

Our Joint Ventures

We have significant joint ventures located in the rapidly developing markets of Brazil and India. Our 50%-owned joint venture based in Brazil, PST Eletrônica S.A., or PST, and our 49%-owned joint venture based in India, Minda Stoneridge Instruments Ltd., or Minda, help us achieve several strategic objectives, including (1) diversifying our business by expanding in high-growth regions, (2) employing complementary design processes, growth technologies and intellectual capital and (3) realizing cost savings from combined sourcing. PST and Minda have been significant contributors to our financial results. We account for our

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investments in PST and Minda using the equity method of accounting. Equity in earnings of PST and Minda included in our consolidated statements of operations grew from $4.1 million in 2005 to $13.5 million in 2008, before declining to $7.8 million in 2009. PST has paid us cash dividends of $23.0 million since 2005, consisting of $2.2 million in 2005, $3.7 million in 2006, $5.6 million in 2007, $4.2 million in 2008 and $7.3 million in 2009.

PST specializes in the design, manufacture and sale of electronic vehicle security, vehicle tracking and infotainment devices. PST sells its products through the aftermarket distribution channel, to factory authorized dealer installers, also referred to as original equipment services, or OES, and to OEMs. PST has experienced rapid growth driven by strong demand for vehicle security products in South America. PST’s net sales (which are not included in our consolidated net sales) increased from $70.8 million in 2005 to $174.3 million in 2008, before decreasing to $140.7 million in 2009. PST has achieved its growth primarily by maintaining a leadership position in aftermarket security products, which comprise approximately 57% of PST’s net sales, further developing its OES distribution network, which accounts for approximately 33% of PST’s net sales, increasing sales to OEMs, which account for approximately 10% of PST’s net sales, and introducing new products such as infotainment and new services such as vehicle tracking. PST’s operating income, which is not included in our consolidated operating income, increased from $11.6 million in 2005 to $32.3 million in 2008, before decreasing to $16.9 million in 2009.

Minda manufactures electromechanical/electronic instrumentation equipment primarily for the automotive, motorcycle and commercial vehicle markets. We leverage our investment in Minda by sharing our knowledge and expertise in electrical components and systems and expanding Minda’s product offering through the joint development of Stoneridge products designed for the market in India. We are contemplating the introduction of additional existing Stoneridge product lines to the Minda joint venture. Minda also provides us with a local manufacturing and marketing presence in India and, therefore, a platform to expand further into the local automotive and commercial vehicle markets. Minda increased its revenues, which are not included in our consolidated net sales, from approximately $5.1 million for the year ended December 31, 2005 to approximately $20.4 million for the year ended December 31, 2009. Minda’s operating profit, which is not included in our consolidated operating income, was approximately $1.0 million for the year ended December 31, 2009, compared to approximately $0.2 million for the year ended December 31, 2005.

The following table presents, for the twelve months ended December 31, 2009, 2008, 2007, 2006 and 2005, PST’s net sales and operating income, Minda’s revenues and operating profit, our equity in earnings of PST and Minda and cash dividends received by us from PST:

		Twelve Months Ended December 31,
		2009				2008				2007				2006				2005
		(In millions)
PST:
Net sales		$	140.7			$	174.3			$	133.0			$	94.1			$	70.8
Operating income		$	16.9			$	32.3			$	27.1			$	17.6			$	11.6
Minda:
Revenues		$	20.4			$	22.4			$	20.0			$	12.9			$	5.1
Operating profit		$	1.0			$	1.0			$	1.4			$	1.2			$	0.2
Stoneridge, Inc. and Subsidiaries:
Equity in earnings of PST and Minda		$	7.8			$	13.5			$	10.9			$	7.1			$	4.1
Cash dividends received from PST		$	7.3			$	4.2			$	5.6			$	3.7			$	2.2

Realignment of Our Operations

Beginning in early 2006 with the arrival of a new management team led by John C. Corey, our President and Chief Executive Officer, and George E. Strickler, our Executive Vice President and Chief Financial Officer, we have realigned and refocused our operations. Since 2006, we have reconfigured our organization, consolidated our operations, reduced our manufacturing costs and strengthened our balance sheet in our drive to create long-term shareholder value. Our efforts in this time period have focused on permanently lowering our cost structure, more rigorous management of our return on invested capital and improving our ability to

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capture future sales opportunities. All of these actions have positioned us to benefit from the improving industry conditions we are currently experiencing.

Our initial objective in realigning and refocusing our operations was to improve our underperforming manufacturing operations. As part of those efforts, in 2006, we made the decision to eliminate two manufacturing facilities to reduce factory overhead. In the fourth quarter of 2007, we announced a restructuring plan which included the closure of our facilities in Sarasota, Florida and Mitcheldean, England. We completed the closures of these facilities in 2008 without reducing production capacity, as we transferred production lines and equipment to other lower-cost facilities.

As the global downturn intensified in the second half of 2008, we expanded the scope of our restructuring program to target additional efficiencies. We consolidated our Juarez, Mexico facility from three business management units to one, combined the administrative functions of our instrumentation and wiring units in North America and consolidated our two manufacturing locations in Canton, Massachusetts into one. In addition, we completed the expansion of our Lexington, Ohio facility, adding manufacturing, engineering and lab space to accommodate our growing sensor and emission business.

In 2009, we continued these efforts by (1) consolidating the management of our two business units in Lexington, Ohio and Canton, Massachusetts into a single unit, (2) reducing staff throughout our organization, (3) freezing all merit increases, implementing furloughs without pay, implementing a reduction in wages for our senior leaders and shortening work weeks to reflect the lower production schedules of our customers, (4) outsourcing a non-core stamping operation, (5) reducing our design and development expenditures as our customers reduced their investment in new vehicle programs, (6) improving quality to lower costs, (7) integrating our North American electronics group, resulting in lower manufacturing overhead and selling, general and administrative, or SG&A, costs and (8) continuing to implement lean manufacturing principles.

As a result of our efforts to permanently reduce or eliminate costs, we have realized and expect to continue to realize significant savings in overhead and SG&A costs in comparison to 2008 when industry volumes were higher.

Our second objective in realigning and refocusing our operations was to improve our financial performance through more rigorous management of working capital and capital expenditures in order to improve our return on invested capital, generate positive free cash flow, manage our exposure to customer credit risk and supplier nonperformance and increase profitability. In pursuit of this objective and to drive shareholder value, we established financial targets and metrics, including a long-term target of 12% return on invested capital. We also developed a global tax and cash strategy to facilitate our ability to move our cash with minimal expense to support our global business operations.

In recent years, we have successfully managed our capital expenditures and working capital investments to be consistent with the market and the performance of our customers. Key steps we have taken include (1) managing our cash collection cycle, (2) entering into commodity hedges to reduce raw material cost volatility, (3) implementing measures to improve our inventory management and reduce working capital, (4) selling non-core assets and (5) working with our employees to enhance skill sets in selected functions and align compensation with common goals.

The third objective of our realignment and refocusing was to improve our ability to capture future sales opportunities by focusing on our marketing capabilities to drive top-line growth. We have established an organic growth target of 6% to 8% per year, which we intend to achieve by further penetrating global markets, especially emerging markets; diversifying our customer base; and driving new technologies that can be cross-sold to multiple customers.

We are focused on identifying the most promising market opportunities and investing our resources toward finding the best ways to develop and deliver solutions that meet the needs of customers in the markets in which we choose to participate. We are also focused on expanding our product lines and end markets to higher growth areas. As a part of our expanding military vehicle business, which includes supplying a major customer with product for MRAP (Mine Resistant Ambush Protected) vehicles, we acquired 51% of Bolton Conductive Systems, LLC, or BCS, in October 2009 to increase our presence with the other key customers for

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the military vehicle market. In addition, we have expanded our joint venture opportunities by increasing our ownership position in Minda and broadening the product lines and technologies in PST and Minda.

Key actions we have undertaken to deliver marketing excellence include: (1) repositioning or eliminating underperforming products, (2) diversifying our product and geographic base, (3) targeting growth in emerging markets, (4) promoting cross-selling opportunities and (5) focusing on “cornerstone” customers — namely customers that are market leaders, that operate globally and maintain significant market presence, and that have a commitment to being technology leaders in the marketplace.

We believe enhanced marketing capabilities have contributed to our current level of new business awards. Current new business awards that are included in our five year forecast have an estimated value of $227.0 million. This figure, which represents the highest new business award level that we have achieved in the last five years, includes an estimated $96.0 million of new business awards received during the first three quarters of 2010. We are scheduled to begin production on these new business awards at various times during 2010 through 2014.

Our Business Strategy

Our strategic objective is to focus on markets, products and customers that will generate attractive shareholder returns. We expect the improvements to our operating cost structure described above, together with our technologies and customer base, to contribute to improved returns. We anticipate that our product offerings will enable us to capitalize on what we expect to be growth in demand for electronic content in the medium- and heavy-duty truck, agricultural and other equipment and automotive end-markets.

We are committed to enhancing our financial performance and generating attractive shareholder returns through the following strategies:

Targeting markets and products in which we maintain a competitive advantage

We are focused on products and markets in which our advanced engineering and technologies are differentiated and where we can develop and maintain a competitive advantage. We believe that our rapid design capabilities and collaborative approach to product innovation favorably position us with our customers. We also believe that our engineering processes and technologies and products improve our ability to win new business awards.

Focusing on technological advancement and “smart” products

In order to increase our vehicle platform penetration, we continue to invest in our technological and design capabilities and to actively manage the technology of next-generation products to win new business. These efforts have resulted in the introduction of a number of new products. As the demand for increasingly sophisticated electronic systems and components continues to grow, we intend to continue to work with our customers to develop “smart” products that help our OEM customers meet regulatory requirements for performance, safety and environmental impact, while satisfying end-customer demand for convenience, product differentiation and lower-cost vehicles. Examples of “smart” products we have developed include torque sensors, capacitive sensors and soot sensing components.

Focusing on developing and growing “cornerstone” customers

We focus our new business efforts on partners and potential partners we view as “cornerstone” customers  — manufacturers that, like Stoneridge, have strong global footprints, significant market presence, and a commitment to being technology leaders in the marketplace. We believe these customers see value in our technological expertise, global capabilities and superior customer service and represent outstanding potential for growth. We actively target these customers with new technologies from across our product portfolio and strategically locate our manufacturing, engineering, sales and customer service capabilities to enhance our ability to service them globally.

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Concentrating on application-specific, sole-sourced products

We are concentrating our development efforts on application-specific products. These products are expected to yield higher profit margins than standard components and to allow us to differentiate our product offerings from our competitors. We believe application-specific products are also more likely than “off the shelf” products to be sold on a sole-source basis and are more likely to promote long-term customer relationships.

Continuing to improve operational efficiency and cost position

We believe the implementation of many initiatives of our business realignment has yielded a competitive cost structure. We have reduced our fixed costs and increased our operating efficiency. We believe that our efficiency improvements will enable us to cost-effectively meet the growth in our end markets utilizing our existing manufacturing capacity. Going forward, we will continue to seek ways to lower our overall cost structure by focusing on initiatives that further reduce our fixed cost base as well as material and labor costs.

Further expanding presence in high growth regions and attractive end markets

OEMs are continuing to require suppliers to provide components on a global basis as vehicle platforms are standardized across geographic markets. Today, approximately 61% of our manufacturing capacity, including our joint ventures, is located outside the United States, with over 54% located in developing countries where labor costs are lower. Over the last 15 years, our expansion into new markets, both product and geographic, has been conducted through both direct investment and joint ventures. Our international joint ventures help serve our global customers on a local basis, capture share among local OEMs in emerging markets and produce operational cost synergies. Our current China operation is wholly-owned by us. Our new technology center in Shanghai, China, opened in March 2010, added engineering resources and testing equipment to meet customer demands in China for our instrumentation and wiring businesses.

We expect to continue to increase our net sales to attractive end markets such as the military, agricultural and material handling markets. These non-transportation end markets often offer higher margin potential and better growth opportunities than, and lessen our exposure to, on-highway commercial vehicle markets. We anticipate addressing the military, agricultural and material handling end markets through new products and applications and targeted acquisitions. We have also secured new orders with a large agricultural products OEM and expect to continue to develop our business with them and other agricultural OEMs.

Our Competitive Strengths

By pursuing our strategy of reducing costs, diversifying our customer base, focusing on new technologies and maintaining a strong balance sheet with ample liquidity, we have positioned ourselves to capitalize on the recovery of our markets in North America and Europe, and the continued growth of the markets in Brazil, India and China.

The following competitive strengths support our business strategy:

Well-positioned to capitalize on technological and regulatory trends within our core sectors

In recent years, the commercial vehicle and automotive markets have been subjected to heightened regulations, which impose stricter engine emission standards and higher fuel economy targets. We expect that these regulations, which are being phased in over time, will result in increased demand for our emissions-related sensors, as has been the case, for example, with our Exhaust Gas Temperature (EGT) sensor used in emissions control. We have also benefited from mandated regulatory changes requiring the monitoring of truck operating characteristics with the introduction of our tachograph product. Additionally, electronics are playing an increasingly important role in the management of vehicle systems as older mechanical assemblies are replaced by new electronic systems that are more reliable and intelligent.

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Established global manufacturing footprint and expanding geographic reach with profitable presence in key emerging markets

We have both a competitive cost structure and the capacity for growth in low-cost regions that allow us to better serve our customers in the markets in which they currently operate, as well as in emerging markets targeted for future growth. With approximately 54% of our total manufacturing capacity, including our joint ventures, currently located in developing countries with lower wage structures, we believe that we will be able to earn attractive margins while maintaining competitive pricing. In addition, our joint ventures afford us access to new customers and new technologies in rapidly developing economies, as well as opportunities to cross-sell existing and future products. A recent example of this cross-selling is a telematics product award for GPS tracking that was achieved through the collaboration of our European instrumentation operations and our Brazilian joint venture. We intend to produce and sell this product in both the Brazilian and European end-markets.

Strong, long-standing customer relationships

We have long-standing relationships with leading domestic and international vehicle OEMs, such as Navistar International Corp., Deere & Company, Ford Motor Company, General Motors Company, Chrysler LLC, Scania AB, MAN SE, Daimler AG and Volvo AB, each of which has a significant presence in its respective end-markets. Because of the technical complexity and lengthy product development cycle of products and systems sold into the commercial and light vehicle markets, we believe our long-standing customer relationships are a major competitive advantage. These established relationships also provide stability of existing business and insight into new business development opportunities. We believe that our ability to develop innovative solutions that address our customers’ challenges by utilizing a highly collaborative approach has helped differentiate us from our competitors.

Strong design and development/technology pipeline of new products for long-term opportunities

We have a track record of successful innovation and results-driven product development. Our design capabilities have contributed consistently to new business development. Over the last two years, we have continued to focus on value-added, growth-oriented technologies. For example, we have developed advanced capabilities in magnetic sensing, enabling the development of torque and cylinder positioning sensors which has resulted in increased customer queries. Also, we seek to leverage our technology by cross-selling to multiple customers and across a variety of applications. An example of this is our multi-lever module that incorporates sensors, modules, switches and wiring from various units and both segments of our business.

We have strong capabilities in the integration and assembly of modular systems for the commercial vehicle market in North America and Europe. The integration capabilities and core product offerings of instrumentation, wire harness connectivity and related software position us to offer complex modular systems for the commercial vehicle market in North America. In Europe, commercial vehicle OEMs are demanding systems that integrate the numerous electrical functions and instruments in the vehicle to provide more sophisticated capabilities to their end-customers. Utilizing our existing products and our ongoing product development efforts, we expect to continue to provide unique solutions to our customers. We have also continued to invest in core products and capabilities supporting the commercial and off-highway vehicle market in areas such as instrumentation, wire harness connectivity and related software. These investments and initiatives position us to offer complex modular systems for the commercial vehicle market that can be further leveraged in the military and off-highway vehicle markets.

Improved cost structure resulting from restructuring and other cost control initiatives driving higher profitability

We have significantly lowered our overhead and operating costs through restructuring efforts that we initiated at the end of 2007, prior to the severe market downturn in 2008. We ceased manufacturing operations at our less efficient locations in Sarasota, Florida and Mitcheldean, England and transferred these production lines to facilities in Lexington, Ohio, Juarez, Mexico, Tallinn, Estonia and Suzhou, China. These actions lowered our breakeven level of production by reducing overhead and other fixed costs and increasing variable costs as a percentage of total product costs. We are also implementing lean management initiatives to improve the efficiency of production, reduce manufacturing costs and decrease inventory. We believe that improved

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management capabilities resulting from our lean management initiatives have allowed us, and will continue to allow us, to manage costs aggressively and improve profitability.

Our Business Environment

The discussion of the commercial vehicle and automotive industries that follows includes market data and forecasts that we obtained from industry publications and surveys and internal company sources. Forward-looking information, including any forecast, is inherently unreliable and we make no assurances that the forecasts contained herein are accurate. See “Information Regarding Forward-Looking Statements” and “Market and Industry Data and Forecasts.”

Our products are used principally in the production of vehicles for the medium- and heavy-duty truck, automotive, agricultural and off-highway vehicle markets. Sales, and therefore results of operations, are significantly dependent on the general state of the economy and other factors that affect these markets. Approximately 67%, 70% and 60% of our net sales in 2009, 2008 and 2007, respectively, were derived from the medium- and heavy-duty truck, agricultural and off-highway vehicle markets. The balance of our net sales were made to the automotive market.

We believe that demand for commercial vehicles is primarily dependent upon three key factors: (1) the broader economy, which drives freight transportation levels and fleet utilization, (2) regulatory changes that affect vehicle design (e.g., CO₂ emissions), and (3) the age of the existing truck fleet. Sales in the automotive industry are principally driven by the health of the overall economy.

Our 2009 results were affected negatively by the severe declines in the commercial vehicle markets in North America and Europe, and the automotive market in North America caused by the global recession. Based on data from ACT Research and J.D. Power and Associates, commercial vehicle production volumes in North America and Western Europe declined by 43% and 64%, respectively, in 2009 when compared to 2008. Based on data from CSM Worldwide, automotive production volumes in North America declined by 32% in 2009 compared to the prior year. In 2010, however, production rates for the commercial vehicle and automotive markets, as reported by third parties, have shown significant year-over-year growth.

North American and Western European Truck Market

Our Electronics segment primarily sells to commercial vehicle markets worldwide. Our largest markets are medium- and heavy-duty trucks in North America and Western Europe. According to third-party projections, 2010 and 2011 medium- and heavy-duty truck production in North America and Western Europe is expected to grow 34% and 76%, respectively, from 2009 volumes. We expect the North American truck market to experience significant growth over the next several years, due primarily to a recovery in the broader economy and the release of pent-up demand. According to data from ACT Research, illustrated in the chart below, the current fleet age has never been older since the data began being recorded in 1979.

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We believe that truck production has reached a turning point, as recent data reflects meaningful growth in order volume. According to data from ACT Research, net new orders for medium-duty trucks in North America have experienced strong sequential (month-over-month) increases of 14%, 13%, 5% and 6% in May, June, July and August 2010, respectively. As a result, in the first eight months of 2010, medium-duty production and retail sales were, according to ACT Research data, 16% and 8% higher, respectively, than in the prior-year period. Heavy-duty Class 8 data showed similar signs of strength, with new class 8 orders rising nearly 6% in September 2010 compared to August 2010, according to ACT Research data. August 2010 net orders increased 15% compared to August 2009, according to ACT Research data.

The Western European truck market has reported similar strength. According to the European Automobile Manufacturers’ Association, truck registrations in June 2010 were almost 13% higher than during the immediately-preceding month and nearly 13% higher as compared with June 2009. According to ACT Research data, North American production is expected to improve from a cyclical low of approximately 216,000 units in 2009 to approximately 501,000 units in 2013, resulting in a 23% compound annual growth rate, or CAGR. According to J.D. Power and Associates, Western European annual production is projected to increase by approximately 340,000 units by 2013 from a cyclical low in 2009 of approximately 196,000 units, growing at a CAGR of 29%.

North American Automotive Market

Our Control Devices segment sells primarily to the automotive end market in North America. CSM Worldwide projects that annual auto production in North America will grow at a CAGR of 14% during 2009 – 2013, increasing by approximately 5.8 million total units, with a majority of the production improvement expected to occur in 2010, for which year-over-year growth of approximately 38% is projected.

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Recent Developments

Results for Third Quarter of 2010

On October 22, 2010, we announced our third-quarter 2010 results, including the following:

The following table provides a summary of selected financial metrics for Stoneridge for the three and nine months ended September 30, 2010 and 2009 and for the twelve months ended September 30, 2010:

		Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended September 30, 2010(1)
		2010				2009				2010				2009
		(Unaudited)
		(In thousands, except per share data)
Net sales		$	160,436			$	117,992			$	474,772			$	341,367			$	608,557
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries		$	684			$	(843	)		$	6,383			$	(32,187	)		$	6,165
Basic net income (loss) per share		$	0.03			$	(0.04	)		$	0.27			$	(1.37	)		$	0.26
Diluted net income (loss) per share		$	0.03			$	(0.04	)		$	0.26			$	(1.37	)		$	0.25
Operating income (loss)		$	5,019			$	2,634			$	17,151			$	(20,419	)		$	19,327
Equity in earnings of investees		$	3,884			$	3,386			$	6,186			$	4,864			$	9,097
Adjusted EBITDA(2)		$	13,093			$	12,512			$	39,297			$	3,092			$	48,369
Adjusted net income (loss)(3)		$	684			$	467			$	6,687			$	(28,344	)		$	6,294
Basic weighted average shares outstanding			23,972				23,761				23,939				23,580				23,895
Diluted weighted average shares outstanding			24,357				23,761				24,359				23,580				24,209

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		Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended September 30, 2010(1)
		2010				2009				2010				2009
		(Unaudited)
		(In thousands)
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries		$	684			$	(843	)		$	6,383			$	(32,187	)		$	6,165
Interest expense, net			5,720				5,559				16,956				16,594				22,327
Provision (benefit) for income taxes			1,975				1,502				1,217				(409	)			623
Depreciation and amortization			4,714				4,984				14,437				15,251				19,125
EBITDA			13,093				11,202				38,993				(751	)			48,240
Restructuring charges(4)			—				1,310				304				3,843				129
Adjusted EBITDA		$	13,093			$	12,512			$	39,297			$	3,092			$	48,369

		Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended September 30, 2010(1)
		2010				2009				2010				2009
		(Unaudited)
		(In thousands)
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries		$	684			$	(843	)		$	6,383			$	(32,187	)		$	6,165
Restructuring charges(4)			—				1,310				304				3,843				129
Adjusted net income (loss)		$	684			$	467			$	6,687			$	(28,344	)		$	6,294

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Financing Activity

On October 4, 2010, we issued $175,000,000 principal amount of 9.5% senior secured notes due 2017, or the senior secured notes. The senior secured notes are guaranteed by two of our wholly-owned subsidiaries, Stoneridge Electronics, Inc. and Stoneridge Control Devices, Inc. Proceeds from the issuance of the senior secured notes, together with available cash, will be used to either purchase through a previously announced tender offer and consent solicitation or redeem all of our outstanding 11.5% senior notes due 2012, or the senior notes, and pay expenses in connection with the offering of the senior secured notes and the tender offer for the senior notes. On October 4, 2010 we also announced that we had exercised our early purchase option and accepted for purchase all of the $109.7 million aggregate principal amount of senior notes tendered pursuant to the tender offer and consent solicitation. Payment for the senior notes purchased pursuant to the early purchase option was made on October 4, 2010. We also announced that, based on the amount of senior notes tendered, we had received the requisite consents to adopt the proposed amendments to the indenture governing the senior notes. The amendments to the indenture governing the senior notes eliminated most of the restrictive covenants and certain of the events of default contained in the indenture. On October 19, 2010 we announced that we had completed the tender offer for the senior notes and had accepted for purchase all of the $154,000 aggregate principal amount of the senior notes tendered after the early acceptance date of October 4, 2010. Payment for that $154,000 aggregate principal amount of senior notes purchased was made on October 19, 2010. Including the senior notes purchased pursuant to the early purchase option, we purchased a total of $109.9 million aggregate principal amount of the senior notes pursuant to the tender offer, which expired at 11:59 p.m., New York City time, on October 18, 2010.

In addition, on October 4, 2010, in connection with our issuance of the senior secured notes, we entered into an interest rate swap with a notional amount of $45 million. Under the interest rate swap, which has a term corresponding to the maturity of the senior secured notes (subject to customary early termination provisions relating to redemption dates with respect to the senior secured notes), we will receive fixed-rate interest payments and will make payments based on the six-month U.S. dollar LIBOR plus 719 basis points, where the amount of the payments is determined by reference to the notional amount of the swap. The economic effect of the interest rate swap will be to convert the fixed-rate interest expense on $45 million principal amount of the senior secured notes to a variable LIBOR-based interest rate. We have designated the interest rate swap as a fair value hedge, and as long as the swap continues to be so designated and to qualify as a fair value hedge, the $45 million principal amount of the senior secured notes to which the fair value hedge relates will be reflected on our balance sheet at fair value, the gain or loss on the swap and the offsetting gain or loss the $45 million principal amount of senior secured notes attributable to the hedged risk will be recognized in net income and any interest payments made or received will be recognized as interest expense.

On September 20, 2010, we entered into an Amended and Restated Credit and Security Agreement, or the amended credit agreement, governing the ABL facility, with PNC Bank National Association (as lender and agent) and the other lending institutions named therein, effective October 4, 2010. The amended credit agreement amends the ABL facility to (a) provide certain consents necessary for the issuance of the senior secured notes, (b) extend the expiration date of the ABL facility to November 1, 2012, and (c) grant the facility agent, for the benefit of the lenders, second priority liens and security interests in the collateral subject to first priority liens and security interests in favor of the collateral agent for the holders of the senior secured notes.

On October 13, 2009, our majority owned consolidated subsidiary, Bolton Conductive Systems, LLC, or BCS, entered into a master revolving note, or the Revolver, which permits borrowing up to a maximum level of $3.0 million. On September 29, 2010, BCS amended the Revolver to extend the maturity date to September 29, 2011 and reduced the interest rate margin to 2.0%. At September 30, 2010 BCS had $1.1 million in borrowings outstanding on the Revolver. At September 30, 2010 the interest rate on the Revolver was 5.25%. We are a guarantor of BCS as it relates to the Revolver.

Corporate Information

Our principal executive offices are located at 9400 East Market Street, Warren, Ohio 44484, and the telephone number at that address is (330) 856-2443. Our website is www.stoneridge.com. The information contained in, or that can be accessed through, our website is not part of this prospectus.

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The Offering

The number of Common Shares outstanding before and after this offering is based on the number of Common Shares outstanding at September 30, 2010 and excludes (1) 151,250 Common Shares issuable upon exercise of stock options outstanding as of September 30, 2010 at a weighted-average exercise price of $11.63 per share and (2) 1,780,312 additional Common Shares reserved as of September 30, 2010 for future grants or awards under our equity-based compensation plans.

Unless otherwise expressly stated or the context otherwise requires, the information in this prospectus assumes no exercise of the underwriter’s over-allotment option to purchase up to 1,326,950 additional Common Shares from the selling shareholders.

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Summary Consolidated Financial and Other Data

Our summary historical consolidated statement of operations, cash flows and other financial data for the years ended December 31, 2009, 2008 and 2007, and our summary historical consolidated balance sheet data as of December 31, 2009 and 2008, are derived from our audited consolidated financial statements incorporated by reference in this prospectus. Our summary historical consolidated statement of operations, cash flows and other financial data for the six months ended June 30, 2010 and 2009 and our summary historical consolidated balance sheet data as of June 30, 2010 and 2009 are derived from our interim unaudited consolidated financial statements incorporated by reference in this prospectus. In the opinion of management, our summary unaudited historical consolidated financial data includes all adjustments necessary for a fair presentation of our financial position, results of operations and cash flows on a consolidated basis, and all such adjustments are of a normal recurring nature.

The summary historical consolidated balance sheet data as of December 31, 2007 are derived from our audited consolidated financial statements that are not included or incorporated by reference in this prospectus.

The summary financial data presented below represents portions of our financial statements and are not complete. You should read this information in conjunction with, and it is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained elsewhere in this prospectus, our consolidated financial statements and related notes thereto incorporated by reference in this prospectus and our unaudited condensed consolidated financial statements and related notes thereto incorporated by reference in this prospectus.

Historical results are not necessarily indicative of future performance or results of operations, and results for any interim period are not necessarily indicative of the results that may be expected for a full year.

		Six Months Ended June 30,								Twelve Months Ended June 30, 2010(1)				Year Ended December 31,
		2010				2009								2009				2008				2007
		(Unaudited)								(Unaudited)				(Audited)
		(In millions, except share, per share and employee data)
Statement of operations data:
Net sales		$	314.3			$	223.4			$	566.1			$	475.2			$	752.7			$	727.1
Gross profit		$	73.1			$	32.9			$	128.3			$	88.0			$	166.3			$	167.7
Operating income (loss)(2)		$	12.1			$	(23.1	)		$	16.9			$	(18.2	)		$	(43.3	)		$	34.8
Equity in earnings of investees		$	2.3			$	1.5			$	8.6			$	7.8			$	13.5			$	10.9
Income (loss) before income taxes(2)		$	4.9			$	(33.3	)		$	4.8			$	(33.3	)		$	(50.8	)		$	23.2
Restructuring charges(3)		$	0.3			$	2.5			$	1.5			$	3.7			$	15.4			$	1.1
Goodwill impairment charge		$	—			$	—			$	—			$	—			$	65.2			$	—
Net income attributable to noncontrolling interest		$	—			$	—			$	—			$	0.1			$	—			$	—
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries(2)(4)		$	5.7			$	(31.3	)		$	4.6			$	(32.4	)		$	(97.5	)		$	16.7
Basic net income (loss) per share(2)(4)		$	0.24			$	(1.33	)		$	0.19			$	(1.37	)		$	(4.17	)		$	0.72
Diluted net income (loss) per share(2)(4)		$	0.23			$	(1.33	)		$	0.19			$	(1.37	)		$	(4.17	)		$	0.71
Basic weighted average shares outstanding (in thousands)			23,922				23,490				23,843				23,626				23,367				23,133
Diluted weighted average shares outstanding (in thousands)			24,351				23,490				24,060				23,626				23,367				23,548
Balance sheet data (at period end):
Cash and cash equivalents		$	74.6			$	85.5			$	74.6			$	91.9			$	92.7			$	95.9
Working capital		$	144.5			$	138.2			$	144.5			$	142.9			$	160.4			$	184.8
Property, plant & equipment, net		$	73.4			$	80.3			$	73.4			$	77.0			$	87.7			$	92.8
Total assets		$	377.9			$	341.8			$	377.9			$	362.5			$	382.4			$	527.8
Long-term debt, less current portion		$	183.3			$	183.0			$	183.3			$	183.4			$	183.0			$	200.0
Shareholders' equity		$	79.7			$	66.4			$	79.7			$	74.1			$	91.8			$	206.2
Statement of cash flows data:
Cash (used in) provided by operations		$	(7.4	)		$	(2.6	)		$	9.0			$	13.8			$	42.5			$	33.5
Cash used in investing		$	(7.0	)		$	(6.7	)		$	(18.1	)		$	(17.8	)		$	(23.9	)		$	(5.8	)
Cash provided by (used in) financing		$	0.6			$	—			$	0.9			$	0.3			$	(16.2	)		$	0.9

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		Six Months Ended June 30,								Twelve Months Ended June 30, 2010(1)				Year Ended December 31,
		2010				2009								2009				2008				2007
		(Unaudited)								(Unaudited)				(Audited)
		(In millions, except share, per share and employee data)
Other data:
EBITDA(5)		$	25.8			$	(11.9	)		$	46.4			$	8.5			$	(3.7	)		$	73.6
Adjusted EBITDA(5)		$	26.1			$	(9.4	)		$	47.9			$	12.2			$	76.9			$	74.7
Adjusted net income (loss)(5)		$	6.0			$	(28.8	)		$	6.1			$	(28.7	)		$	26.0			$	17.8
Capital expenditures		$	(7.1	)		$	(6.7	)		$	(12.3	)		$	(12.0	)		$	(24.6	)		$	(18.1	)
Automotive production (North America)(6)			6.0				3.5				11.1				8.6				12.4				15.1
Truck production (North America & Europe)(7)			0.3				0.2				0.5				0.4				1.0				0.9
Approximate number of employees (at period end)			5,794				5,051				5,794				5,211				6,352				5,625

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The following table provides a reconciliation of EBITDA and adjusted EBITDA to net income (loss) attributable to Stoneridge, Inc. and subsidiaries for the six months ended June 30, 2010 and 2009, the twelve months ended June 30, 2010 and the years ended December 31, 2009, 2008, 2007, 2006 and 2005:

		Six Months Ended June 30,								Twelve Months Ended June 30, 2010(1)				Year Ended December 31,
		2010				2009								2009				2008				2007				2006				2005
		(Unaudited)								(Unaudited)				(Audited)
		(In millions)
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries		$	5.7			$	(31.3	)		$	4.6			$	(32.4	)		$	(97.5	)		$	16.7			$	14.5			$	0.9
Interest expense, net			11.2				11.0				22.2				22.0				20.6				21.8				21.7				23.9
Provision (benefit) for income taxes(8)			(0.8	)			(1.9	)			0.2				(1.0	)			46.8				6.6				5.1				3.5
Depreciation and amortization			9.7				10.3				19.4				19.9				26.4				28.5				26.2				26.2
EBITDA			25.8				(11.9	)			46.4				8.5				(3.7	)			73.6				67.5				54.5
Restructuring charges(3)			0.3				2.5				1.5				3.7				15.4				1.1				0.6				5.1
Goodwill impairment charge			—				—				—				—				65.2				—				—				—
Adjusted EBITDA		$	26.1			$	(9.4	)		$	47.9			$	12.2			$	76.9			$	74.7			$	68.1			$	59.6

The following table presents EBITDA and adjusted EBITDA, and provides a reconciliation of EBITDA and adjusted EBITDA to net income (loss) attributable to Stoneridge, Inc. and subsidiaries, for the three months ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009:

		Three Months Ended
		June 30, 2010				March 31, 2010				December 31, 2009				September 30, 2009				June 30, 2009				March 31, 2009
		(Unaudited) (In millions)
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries(2)(4)		$	4.2			$	1.5			$	(0.2	)		$	(0.8	)		$	(19.8	)		$	(11.6	)
Interest expense, net			5.6				5.6				5.4				5.6				5.5				5.5
Provision (benefit) for income taxes			0.7				(1.5	)			(0.6	)			1.5				0.2				(2.1	)
Depreciation and amortization			4.9				4.8				4.7				5.0				5.2				5.1
EBITDA			15.4				10.4				9.3				11.3				(8.9	)			(3.1	)
Restructuring charges(3)			0.2				0.1				(0.2	)			1.3				1.5				1.0
Adjusted EBITDA		$	15.6			$	10.5			$	9.1			$	12.6			$	(7.4	)		$	(2.1	)

The data in the foregoing table for the three months ended June 30, 2010 and March 31, 2010 are derived from our interim unaudited consolidated financial statements incorporated by reference in this prospectus, and the data in the foregoing table for the three months ended December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009 are derived from our interim unaudited consolidated financial statements that are not included or incorporated by reference in this prospectus.

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The following table presents adjusted net income (loss), and provides a reconciliation of adjusted net income (loss) to net income (loss) attributable to Stoneridge, Inc. and subsidiaries, for the six months ended June 30, 2010 and 2009, the twelve months ended June 30, 2010 and the years ended December 31, 2009, 2008, 2007, 2006 and 2005:

		Six Months Ended June 30,								Twelve Months Ended June 30, 2010(1)				Year Ended December 31,
		2010				2009								2009				2008				2007				2006				2005
		(Unaudited)								(Unaudited)				(Audited)
		(In millions)
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries		$	5.7			$	(31.3	)		$	4.6			$	(32.4	)		$	(97.5	)		$	16.7			$	14.5			$	0.9
Restructuring charges(3)			0.3				2.5				1.5				3.7				15.4				1.1				0.6				5.1
Goodwill impairment, net of tax benefits			—				—				—				—				46.1				—				—				—
Deferred tax asset valuation allowance			—				—				—				—				62.0				—				—				—
Adjusted net income (loss)		$	6.0			$	(28.8	)		$	6.1			$	(28.7	)		$	26.0			$	17.8			$	15.1			$	6.0

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RISK FACTORS

An investment in our Common Shares involves a high degree of risk. You should carefully consider the risks described below, together with the other information set forth and incorporated by reference in this prospectus, before making your decision to invest in our Common Shares. Any of the following risks, as well as other risks and uncertainties, could harm our business, financial condition or results of operations and cause the value of our Common Shares to decline. The risks described below are not the only ones that could affect us or the value of our Common Shares. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations. As a result of any of these risks, known or unknown, you may lose all or part of your investment in our Common Shares.

Risk Factors Related to Our Business

Our business is cyclical and seasonal in nature and downturns in the medium- and heavy-duty truck, automotive, agricultural and off-highway vehicle markets could reduce the sales and profitability of our business.

The demand for our products is largely dependent on the domestic and foreign production of medium- and heavy-duty trucks, automotive, agricultural and off-highway vehicles. The markets for our products have historically been cyclical, because new vehicle demand is dependent on, among other things, consumer spending and is tied closely to the overall strength of the economy. Because our products are used principally in the production of vehicles for the medium- and heavy-duty truck, automotive, agricultural and off-highway vehicle markets, our net sales, and therefore our results of operations, are significantly dependent on the general state of the economy and other factors which affect these markets. A decline in medium- and heavy-duty truck, automotive, agricultural and off-highway vehicle production could adversely impact our results of operations and financial condition. In 2009, approximately 67% of our net sales were derived from the medium- and heavy-duty truck, agricultural and off-highway vehicle markets and approximately 33% were derived from the automotive market. Seasonality experienced by the automotive industry also impacts our operations.

We may not realize sales represented by awarded business.

We base our growth projections, in part, on commitments made by our customers. These commitments generally renew annually during a program life cycle. Failure of actual production orders from our customers to approximate these commitments could have a material adverse effect our business, financial condition or results of operations.

The prices that we can charge some of our customers are predetermined and we bear the risk of costs in excess of our estimates, in addition to the risk of adverse effects resulting from general customer demands for cost reductions and quality improvements.

Our supply agreements with some of our customers require us to provide our products at predetermined prices. In some cases, these prices decline over the course of the contract and may require us to meet certain productivity and cost reduction targets. In addition, our customers may require us to share productivity savings in excess of our cost reduction targets. The costs that we incur in fulfilling these contracts may vary substantially from our initial estimates. Unanticipated cost increases or the inability to meet certain cost reduction targets may occur as a result of several factors, including increases in the costs of labor, components or materials. In some cases, we are permitted to pass on to our customers the cost increases associated with specific materials. Cost overruns that we cannot pass on to our customers could adversely affect our business, financial condition or results of operations.

OEMs have exerted considerable pressure on component suppliers to reduce costs, improve quality and provide additional design and engineering capabilities and continue to demand and receive price reductions and measurable increases in quality through their use of competitive selection processes, rating programs, and various other arrangements. We may be unable to generate sufficient production cost savings in the future to offset required price reductions. Additionally, OEMs have generally required component suppliers to provide more design engineering input at earlier stages of the product development process, the costs of which have,

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in some cases, been absorbed by the suppliers. Future price reductions, increased quality standards and additional engineering capabilities required by OEMs may reduce our profitability and have a material adverse effect on our business, financial condition or results of operations.

We are dependent on the availability and price of raw materials and other supplies.

We require substantial amounts of raw materials and other supplies and substantially all such materials we require are purchased from outside sources. The availability and prices of raw materials and other supplies may be subject to curtailment or change due to, among other things, new laws or regulations, suppliers’ allocations to other purchasers, interruptions in production by suppliers, changes in exchange rates and worldwide price levels. As demand for raw materials and other supplies increases as a result of a recovering economy, we may have difficulties obtaining adequate raw materials and other supplies from our suppliers to satisfy our customers. At times, we have experienced difficulty obtaining adequate supplies of semiconductors and memory chips for our Electronics segment and nylon and resins for our Control Devices segment. If we cannot obtain adequate raw materials and other supplies or if we experience an increase in the price of raw materials and other supplies, our business, financial condition or results of operations could be materially adversely affected.

The loss or insolvency of any of our major customers would adversely affect our future results.

We are dependent on several principal customers for a significant percentage of our net sales. In 2009, our top three customers were Navistar International Corp., Deere & Company and Ford Motor Company, which comprised 27%, 12% and 9% of our net sales, respectively. In 2009, our top ten customers accounted for 69% of our net sales. The loss of any significant portion of our sales to these customers or any other customers would have a material adverse impact on our results of operations and financial condition. The contracts we have entered into with many of our customers provide for supplying the customers’ requirements for a particular model, rather than for manufacturing a specific quantity of products. Such contracts range from one year to the life of the model, which is generally three to seven years. These contracts are subject to renegotiation, which may affect product pricing and generally may be terminated by our customers at any time. Therefore, the loss of a contract for a major model or a significant decrease in demand for certain key models or any group of related models sold by any of our major customers could have a material adverse impact on our results of operations and financial condition by reducing cash flows and our ability to spread costs over a larger revenue base. We also compete to supply products for successor models and are subject to the risk that the customer will not select us to produce products on any such model, which could have a material adverse impact on our business, financial condition or results of operations. In addition, we have significant receivable balances related to these customers and other major customers that would be at risk in the event of their bankruptcy.

Consolidation among vehicle parts customers and suppliers could make it more difficult for us to compete successfully.

The vehicle part supply industry has undergone a significant consolidation as OEM customers have sought to lower costs, improve quality and increasingly purchase complete systems and modules rather than separate components. As a result of the cost focus of these major customers, we have been, and expect to continue to be, required to reduce prices. Because of these competitive pressures, we cannot assure you that we will be able to increase or maintain gross margins on product sales to our customers. The trend toward consolidation among vehicle parts suppliers is resulting in fewer, larger suppliers who benefit from purchasing and distribution economies of scale. If we cannot achieve cost savings and operational improvements sufficient to allow us to compete successfully in the future with these larger, consolidated companies, our business, financial condition or results of operations could be adversely affected.

The emergence of significant competitors from bankruptcy may adversely affect us.

Certain of our significant competitors filed for bankruptcy protection and, recently, a few of our significant competitors, including Delphi Automotive LLP, emerged from bankruptcy protection. The bankruptcy protection afforded to these competitors has allowed them to eliminate or substantially reduce contractual obligations, including significant amounts of debt, and avoid liabilities. The elimination or reduction of these obligations has made these competitors stronger financially, which could have an adverse

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effect on our competitive position and results of operations. The emergence of other significant competitors from bankruptcy protection could have further adverse effects on our competitive position and our business, financial condition or results of operations.

Our physical properties and information systems are subject to damage as a result of disasters, outages or similar events.

Our offices and facilities, including those used for design and development, material procurement, manufacturing, logistics and sales are located throughout the world and are subject to possible destruction, temporary stoppage or disruption as a result of any number of unexpected events. If any of these facilities or offices were to experience a significant loss as a result of any of the above events, it could disrupt our operations, delay production, shipments and revenue, and result in large expenses to repair or replace these facilities or offices.

In addition, network and information system shutdowns caused by unforeseen events such as power outages, disasters, hardware or software defects, computer viruses and computer security violations pose increasing risks. Such an event could also result in the disruption of our operations, delay production, shipments and revenue, and result in large expenditures necessary to repair or replace such network and information systems.

We must implement and sustain a competitive technological advantage in producing our products to compete effectively.

Our products are subject to changing technology, which could place us at a competitive disadvantage relative to alternative products introduced by competitors. Our success will depend on our ability to continue to meet customers’ changing specifications with respect to quality, service, price, timely delivery and technological innovation by implementing and sustaining competitive technological advances. Our business may, therefore, require significant ongoing and recurring additional capital expenditures and investment in product development and manufacturing and management information systems. We cannot assure you that we will be able to achieve the technological advances or introduce new products that may be necessary to remain competitive. Our inability to continuously improve existing products, to develop new products and to achieve technological advances could have a material adverse effect on our business, financial condition or results of operations.

We may experience increased costs and other disruptions to our business associated with labor unions.

As of June 30, 2010, we had approximately 5,800 employees, approximately 1,600 of whom were salaried and the balance of whom were paid on an hourly basis. Although we have no collective bargaining agreements covering U.S. employees, certain employees located in Estonia, France, Mexico, Spain, Sweden and the United Kingdom either (1) are represented by a union and are covered by a collective bargaining agreement or (2) are covered by works council or other employment arrangements required by law. We cannot assure you that other of our employees will not be represented by a labor organization in the future or that any of our facilities will not experience a work stoppage or other labor disruption. Any work stoppage or other labor disruption involving our employees, employees of our customers (many of which customers have employees who are represented by unions), or employees of our suppliers could have a material adverse effect on our business, financial condition or results of operations by disrupting our ability to manufacture our products or reducing the demand for our products.

Compliance with environmental and other governmental regulations could be costly and require us to make significant expenditures.

Our operations are subject to various federal, state, local and foreign laws and regulations governing, among other things:

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Our business, operations and facilities are subject to environmental and health and safety laws and regulations, many of which provide for substantial fines for violations. The operation of our manufacturing facilities entails risks and we cannot assure you that we will not incur material costs or liabilities in connection with these operations. In addition, potentially significant expenditures could be required in order to comply with evolving environmental, health and safety laws, regulations or requirements that may be adopted or imposed in the future. Changes in environmental, health and safety laws, regulations and requirements or other governmental regulations could increase our cost of doing business or adversely affect the demand for our products.

We also may be required to investigate or clean up contamination resulting from past or current uses of our properties. At our Sarasota, Florida facility, for example, groundwater contamination caused by previous operations will likely require future investigation and/or cleanup. Based on current information, we do not believe this matter will have a material adverse impact on our business, financial condition or results of operations, but we cannot assure you that this matter or other matters involving environmental contamination will not have such an impact.

We may incur material product liability costs.

We may be subject to product liability claims in the event that the failure of any of our products results in personal injury or death and we cannot assure you that we will not experience material product liability losses in the future. We maintain insurance against such product liability claims, but we cannot assure you that such coverage will be adequate for liabilities ultimately incurred or that it will continue to be available on terms acceptable to us. In addition, if any of our products prove to be defective, we may be required to participate in government-imposed or customer OEM-instituted recalls involving such products. A successful claim brought against us that exceeds available insurance coverage or a requirement to participate in any product recall could have a material adverse effect on our business, financial condition or results of operations.

Increased or unexpected product warranty claims could adversely affect us.

We provide our customers a warranty covering workmanship, and in some cases materials, on products we manufacture. Our warranty generally provides that products will be free from defects and adhere to customer specifications. If a product fails to comply with the warranty, we may be obligated or compelled, at our expense, to correct any defect by repairing or replacing the defective product. We maintain warranty reserves in an amount based historical trends of units sold and payment amounts combined with our current understanding of the status of existing claims. To estimate the warranty reserves, we must forecast the resolution of existing claims, as well as expected future claims on products previously sold. The amounts estimated to be due and payable could differ materially from what we may ultimately be required to pay. An increase in the rate of warranty claims or the occurrence of unexpected warranty claims could have a material adverse effect on our customer relations and our financial condition or results of operations.

Disruptions in the financial markets are adversely impacting the availability and cost of credit which could negatively affect our business.

The ABL facility has a maximum borrowing level of $100.0 million and is scheduled to expire on November 1, 2012. We will need to refinance the ABL facility prior to its expiration. Disruptions in the financial markets, including the bankruptcy, insolvency or restructuring of certain financial institutions, and the general lack of liquidity continue to adversely impact the availability and cost of credit for many companies, including us. We may be required to refinance the ABL facility at terms and rates that are less favorable than our current terms and rates, which could adversely affect our business, financial condition or results of operations.

Our significant debt obligations could limit our flexibility in managing our business and expose us to risks.

We are highly leveraged. As of June 30, 2010, after giving effect to the issuance of the senior secured notes and application of the proceeds therefrom, together with a portion of our cash on hand, to retire the senior notes as described in “Summary — Recent Developments,” we would have had approximately $176.7 million of indebtedness outstanding. In addition, we are permitted under the ABL facility and the indenture

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governing the senior secured notes to incur additional debt, subject to specified limitations. Our high degree of leverage and the terms of our indebtedness may have important consequences to holders of our securities, including the following:

These and other consequences of our substantial leverage and the terms of our indebtedness could have a material adverse effect on our business, financial condition or results of operations.

Restrictive covenants in the ABL facility and the indenture governing the senior secured notes may limit our ability to pursue our business strategies.

The ABL facility and the indenture governing the senior secured notes limit our ability to, among other things:

The agreement governing the ABL facility also requires us to maintain a ratio of (1) consolidated EBITDA, as defined in the ABL facility, less specified items to (2) consolidated fixed charges, as defined in the ABL facility, of at least 1.10 to 1.00 whenever undrawn availability under the ABL facility is less than $20 million. Our ability to comply with this fixed charge coverage ratio requirement, as well as the restrictive covenants under the terms of our indebtedness, may be affected by events beyond our control.

The restrictions contained in the indenture governing the senior secured notes and the agreement governing the ABL facility could:

A breach of any of the restrictive covenants under our indebtedness or our inability to comply with the fixed charge coverage ratio requirement in the ABL facility could result in a default under the agreement

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governing the ABL facility and the indenture governing the senior secured notes. If a default occurs, holders of the senior secured notes could declare all principal and interest to be due and payable, the lenders under the ABL facility could elect to declare all outstanding borrowings, together with accrued interest and other fees, to be immediately due and payable and terminate any commitments they have to provide further borrowings, and holders of the senior secured notes and the ABL facility lenders could pursue foreclosure and other remedies against us and our assets.

We may not be able to generate sufficient cash flows to meet our debt service obligations.

Our ability to make scheduled payments on, or to refinance, our obligations with respect to our indebtedness will depend on our financial and operating performance, which in turn will be affected by general economic conditions and by financial, competitive, regulatory and other factors beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future sources of capital will be available to us in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs. If we are unable to generate sufficient cash flow to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing would be possible, that any assets could be sold or, if sold, of the timing of the sales and the amount of proceeds that may be realized from those sales, or that additional financing could be obtained on acceptable terms, if at all. The ABL facility and the indenture governing the senior secured notes restrict our ability to dispose of assets and use the proceeds from the disposition. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms, would materially and adversely affect our business, financial condition and results of operations.

If we cannot make scheduled payments on our debt, we will be in default and, as a result, holders of the senior secured notes could declare all outstanding principal and interest to be due and payable, the lenders under the ABL facility could terminate their commitments to lend us money, holders of the senior secured notes and the lenders under the ABL facility could foreclose on or exercise other remedies against the assets securing the senior secured notes and borrowings under the ABL facility and we could be forced into bankruptcy, liquidation or other insolvency proceedings, which, in each case, could result in your losing your investment in the Common Shares.

We are subject to risks related to our international operations.

Approximately 19.1% of our net sales in 2009 were derived from sales outside of North America. Non-current assets outside of North America accounted for approximately 8.1% of our non-current assets as of December 31, 2009. International sales and operations are subject to significant risks, including, among others:

Additionally, to the extent any portion of our net sales and expenses are denominated in currencies other than the U.S. dollar, changes in exchange rates could have a material adverse effect on our results of operations or financial condition.

We face risks arising from our equity investments in companies that we do not control.

Our consolidated results of operations include significant equity earnings from unconsolidated subsidiaries. For the year ended December 31, 2009, we recognized $7.8 million of equity earnings and received $7.3 million in cash dividends from our unconsolidated joint ventures, PST and Minda. Our ability to

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direct the operations of these entities is limited because we do not own a majority interest in either of them and we are bound by the terms of shareholder agreements with our joint venture partners. The performance of these joint ventures could also be adversely affected by disagreements between us and our joint venture partners, and sales of our equity interests in these entities are subject to rights of first refusal and other contractual limitations.

Our annual effective tax rate could be volatile and materially change as a result of changes in the mix of earnings and other factors.

Our overall effective tax rate is equal to our total tax expense as a percentage of our total earnings before tax. However, tax expense and benefits are not recognized on a global basis, but rather on a jurisdictional or legal entity basis. Losses in certain jurisdictions may not provide a current financial statement tax benefit. As a result, changes in the mix of earnings between jurisdictions, among other factors, could have a significant impact on our overall effective tax rate.

If we fail to protect our intellectual property rights or maintain our rights to use licensed intellectual property or are found liable for infringing the rights of others, our business could be adversely affected.

Our intellectual property, including our patents, trademarks, copyrights, trade secrets and license agreements, are important in the operation of our businesses, and we rely on the patent, trademark, copyright and trade secret laws of the United States and other countries, as well as nondisclosure agreements, to protect our intellectual property rights. We may not, however, be able to prevent third parties from infringing, misappropriating or otherwise violating our intellectual property, breaching any nondisclosure agreements with us, or independently developing technology that is similar or superior to ours and not covered by our intellectual property. Any of the foregoing could reduce any competitive advantage we have developed, cause us to lose sales or otherwise harm our business. We cannot assure you that any intellectual property will provide us with any competitive advantage or will not be challenged, rejected, cancelled, invalidated or declared unenforceable. In the case of pending patent applications, we may not be successful in securing issued patents, or securing patents that provide us with a competitive advantage for our businesses. In addition, our competitors may design products around our patents that avoid infringement and violation of our intellectual property rights.

We cannot be certain that we have rights to use all intellectual property used in the conduct of our businesses or that we have complied with the terms of agreements by which we acquire such rights, which could expose us to infringement, misappropriation or other claims alleging violations of third party intellectual property rights. Third parties have asserted and may assert or prosecute infringement claims against us in connection with the services and products that we offer, and we may or may not be able to successfully defend these claims. Litigation, either to enforce our intellectual property rights or to defend against claims regarding intellectual property rights of others, could result in substantial costs and in a diversion of our resources. Any such claims and resulting litigation could require us to enter into licensing agreements (if available on acceptable terms or at all), pay damages and cease making or selling certain products and could result in a loss of our intellectual property protection. Moreover, we may need to redesign some of our products to avoid future infringement liability. We also may be required to indemnify customers or other third parties at significant expense in connection with such claims and actions. Any of the foregoing could have a material adverse effect on our business, financial condition or results of operations.

Our inability to recover from natural or man-made disasters or similar events could adversely affect our business.

Our business and financial results may be affected by certain events that we cannot anticipate or that are beyond our control, such as natural or man-made disasters, national emergencies, significant labor strikes, work stoppages, political unrest, war or terrorist activities that could curtail production at our facilities and cause delayed deliveries and canceled orders. In addition, we purchase components, raw materials, information technology and other services from numerous suppliers, and, even if our facilities are not directly affected by such events, we could be affected by interruptions at such suppliers. Such suppliers may not be able to quickly recover from such events and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. We cannot assure you that we will have insurance to adequately compensate us for any of these events.

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Our business is very competitive and increased competition could reduce our sales.

The markets for our products are highly competitive. We compete based on quality, service, price, performance, timely delivery and technological innovation. Many of our competitors are more diversified and have greater financial and other resources than we do. In addition, with respect to certain of our products, some of our competitors are divisions of our OEM customers. We cannot assure you that our business will not be adversely affected by competition or that we will be able to maintain our profitability if the competitive environment changes.

We may not be able to successfully integrate acquisitions into our business or may otherwise be unable to benefit from pursuing acquisitions.

Failure to successfully identify, complete and/or integrate selective acquisitions could have a material adverse effect on us. A portion of our growth in sales and earnings has been generated from acquisitions and subsequent improvements in the performance of the businesses acquired. We expect to continue a strategy of selectively identifying and acquiring businesses with complementary products. We cannot assure you that any business acquired by us will be successfully integrated with our operations or prove to be profitable. We could incur substantial indebtedness in connection with our acquisition strategy, which could significantly increase our interest expense. Covenant restrictions relating to such indebtedness could restrict our ability to pay dividends, fund capital expenditures and consummate additional acquisitions. We anticipate that acquisitions could occur in geographic markets, including foreign markets, in which we do not currently operate. As a result, the process of integrating acquired operations into our existing operations may result in unforeseen operating difficulties and may require significant financial resources that would otherwise be available for the ongoing development or expansion of existing operations. Any failure to successfully integrate such acquisitions could have a material adverse impact on our business, financial condition or results of operations.

Risk Factors Related to this Offering and Ownership of Our Common Shares

We have no current plans to pay dividends on our Common Shares, and our ability to pay dividends on our Common Shares may be limited.

We have no current plans to commence payment of a dividend on our Common Shares. Our payment of dividends, if any, on our Common Shares in the future will be determined by Stoneridge’s board of directors in its discretion and will depend on many factors, including, among other things, business conditions, our financial condition, earnings and liquidity, and contractual and other legal restrictions.

Our credit facility and our indenture for the senior secured notes limit our ability to pay cash dividends on our capital stock, including our Common Shares. In the event that any of our indentures or other financing agreements in the future restrict our ability to pay dividends in cash on our Common Shares, we may be unable to pay dividends in cash on our Common Shares unless we can refinance the amounts outstanding under those agreements.

Fluctuations in the price of our Common Shares may make our Common Shares difficult to resell.

The market price and trading volume of our Common Shares have been and may continue to be subject to significant fluctuations due not only to general stock market conditions but also to, among other things, changes in sentiment in the market regarding the industries in which we operate, our operations, business prospects or liquidity or this offering. During the period from October 23, 2009 to October 22, 2010, the price of our Common Shares has fluctuated from a high of $13.58 per share to a low of $6.00 per share. In addition to the risk factors discussed in our periodic reports and elsewhere in this prospectus, the price and volume volatility of our Common Shares may be affected by, among other things:

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Stock markets in general have experienced extreme volatility recently that has at times been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Common Shares, make it difficult to predict the market price of our Common Shares and cause the value of your investment in our Common Shares to decline.

There may be future sales or other dilution of our equity, which may adversely affect the market price of our Common Shares.

We are not restricted from issuing additional Common Shares, including securities that are convertible into or exchangeable for, or that represent the right to receive, Common Shares. The issuance of additional Common Shares or of convertible or other equity linked securities, including options and warrants, or otherwise, will dilute the ownership interest of holders of our Common Shares. As of September 30, 2010, we had 25,445,655 outstanding Common Shares and (i) 151,250 Common Shares were issuable upon exercise of stock options outstanding at a weighted-average exercise price of $11.63 per share, (ii) 1,780,312 Common Shares were reserved for future grants or awards under our equity-based compensation plans.

Sales of a substantial number of Common Shares or other equity-related securities in the public market could depress the market price of our Common Shares and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our Common Shares or other equity-related securities, or the availability of Common Shares or other authorized capital stock for future sale, will have on the market price of our Common Shares.

We have outstanding debt and may offer debt securities in the future, which would be senior to our Common Shares upon liquidation, and/or preferred equity securities which may be senior to our Common Shares for purposes of dividend distributions or upon liquidation.

In addition to the senior secured notes already outstanding, we may offer debt or preferred equity securities, including senior or subordinated notes and Serial Preferred Shares, in the future. Upon liquidation, holders of our debt securities and shares of Serial Preferred Shares and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our Common Shares. If we issue Serial Preferred Shares in the future that have a preference over our Common Shares with respect to the payment of dividends or upon our liquidation, dissolution, or winding up, or if we issue Serial Preferred Shares with voting rights that dilute the voting power of our Common Shares, the rights of holders of our Common Shares could be adversely affected.

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Anti-takeover provisions could make it more difficult for a third party to acquire us.

Ohio corporate law provides that certain notice and informational filings and special shareholder meeting and voting procedures must be followed prior to consummation of a proposed “control share acquisition” as defined in the Ohio Revised Code. Assuming compliance with the prescribed notice and information filings, a proposed control share acquisition may be made only if, at a special meeting of shareholders, the acquisition is approved by both a majority of our voting power represented at the meeting and a majority of the voting power represented at the meeting remaining after excluding the combined voting of the “interested shares,” as defined in the Ohio Revised Code. The application of these provisions of the Ohio Revised Code could have the effect of delaying or preventing a change of control.

Our ability to use net operating loss and research credit carryforwards to reduce our future income tax liability could be subject to limitations.

As of December 31, 2009, we had U.S. federal income tax net operating loss carryforwards of approximately $53 million and research credit carryforwards of approximately $9 million. Subject to various limitations, carryforwards of that nature may be used to offset future taxable income or income tax liability, and thereby reduce U.S. federal income taxes otherwise payable. Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, impose an annual limitation on the ability of a corporation that undergoes an “ownership change” to use its net operating loss and credit carryforwards to reduce its tax liability. As a result of this offering, we believe that we may experience an ownership change in connection with this offering or as a result of this offering together with subsequent changes in ownership of our Common Shares. Therefore, our use of our net operating loss and credit carryforwards would be limited by the annual limitation imposed by Sections 382 and 383 of the Code. Determining the limitation under Sections 382 and 383 of the Code is technical and highly complex and depends on a number of factors. The imposition of the annual limitation on the use of our net operating loss and credit carryforwards means that we may be subject to U.S. federal income taxes on an accelerated basis and could ultimately be subject to U.S. federal income tax liabilities in amounts greater than those which we would have been subject to had the annual limitation not applied to us.

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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes statements that are, or may be deemed to be, “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this prospectus and include statements regarding the intent, belief or current expectations of us or our directors or officers with respect to, among other things, our (1) future product and facility expansion, (2) acquisition strategy, (3) investments and new product development, (4) growth opportunities related to awarded business and (5) projected commercial vehicle and automotive productions levels and fleet aging information. Forward-looking statements may be identified by the words “will,” “may,” “should,” “continue,” “designed to,” “believes,” “plans,” “expects,” “estimates,” “anticipates,” “projects,” “intends” and similar words and expressions. The forward-looking statements in this prospectus are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include, among other factors:

Important factors that could cause the performance of the commercial vehicle and automotive industry to differ materially from those in the forward-looking statements include macro economic factors such as (1) continued economic instability or poor economic conditions in the United States and global 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 conflicts and (7) the occurrence of force majeure events.

These factors should not be construed as exhaustive and should be read with the other cautionary statements in this prospectus.

We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those described in or suggested by the forward-looking statements contained in this prospectus. In addition, even if our results of operations, financial condition and liquidity,

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and the development of the industry in which we operate are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statements that we make in this prospectus speak only as of the date of such statement, and we undertake no obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

We do not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

MARKET AND INDUSTRY DATA AND FORECASTS

This prospectus includes industry and market data and forecasts that we obtained or developed from industry publications and surveys and internal company sources. The primary sources of third-party industry data and forecasts in this prospectus are America’s Commercial Transportation Research Co., which we refer to as ACT Research, CSM Worldwide, IHS Global Insight and J.D. Power and Associates. The third-party publications and surveys we used generally indicate that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. While we are not aware of any misstatements regarding third-party industry and market data and forecasts presented herein, and we believe all of our sources are reliable, we have neither independently verified any of the data and forecasts from third-party sources nor ascertained the underlying economic assumptions relied upon therein, and we do not guarantee the accuracy or completeness of such information. Forward-looking information such as forecasts involves risks and uncertainties and is subject to change based on various factors, including those discussed in this prospectus under “Information Regarding Forward-Looking Statements” and “Risk Factors.” Forward-looking information is inherently unreliable, and forecasts are particularly likely to be inaccurate, especially over long periods of time.

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USE OF PROCEEDS

We will not receive any proceeds from the sale of Common Shares by the selling shareholders in this offering. See “Selling Shareholders” and “Underwriting.”

PRICE RANGE OF COMMON SHARES AND DIVIDEND POLICY

Our Common Shares are listed on the New York Stock Exchange under the symbol “SRI.” As of September 30, 2010, we had 25,445,655 Common Shares issued and outstanding, which were owned by approximately 285 registered holders, including Common Shares held in the names of brokers and banks (so-called “street name” holdings) who are record holders.

We have not historically paid or declared dividends, which are restricted under both the senior secured notes and the ABL facility, on our Common Shares. We may only pay cash dividends in the future if immediately prior to and immediately after the payment is made, no event of default shall have occurred and outstanding indebtedness under the ABL facility is not greater than or equal to $20.0 million before and after the payment of the dividend. We currently intend to retain earnings for acquisitions, working capital, capital expenditures, general corporate purposes and reduction in outstanding indebtedness. We have no current plans to pay dividends.

High and low sales prices (as reported on the New York Stock Exchange composite tape) for our Common Shares for each quarter during 2010, 2009 and 2008 are as follows:

		High				Low
2010
Fourth Quarter (through November 2, 2010)		$	13.58			$	10.02
Third Quarter			11.53				7.02
Second Quarter			12.30				7.57
First Quarter			10.23				6.00
2009
Fourth Quarter		$	9.60			$	6.14
Third Quarter			7.20				3.70
Second Quarter			4.89				1.97
First Quarter			4.80				1.41
2008
Fourth Quarter		$	11.25			$	2.32
Third Quarter			19.38				10.80
Second Quarter			18.74				12.74
First Quarter			14.23				6.86

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2010:

You should read the information in this table in conjunction with “Use of Proceeds,” “Prospectus Summary — Recent Developments,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and related notes thereto incorporated by reference in this prospectus and our unaudited condensed consolidated financial statements and related notes thereto incorporated by reference in this prospectus.

		As of June 30, 2010
		Actual				As Adjusted
		(in thousands)
Cash and cash equivalents		$	74,608			$	51,688
Debt:
ABL credit facility(1)		$	—			$	—
11½% Senior Notes due 2012			183,000				—
9.5% Senior Secured Notes due 2017(2)			—				175,000
Other debt(3)			1,728				1,728
Total debt			184,728				176,728
Shareholders’ equity:
Preferred Shares, without par value, authorized 5,000 shares, none issued			—				—
Common Shares, without par value, authorized 60,000 shares, issued 25,969 shares and outstanding 25,440 shares, with no stated value			—				—
Additional paid-in capital			160,100				160,100
Common Shares held in treasury, 529, at cost			(411	)			(411	)
Accumulated deficit			(85,861	)			(96,696	)
Accumulated other comprehensive income			1,394				1,394
Total Stoneridge Inc. and Subsidiaries shareholders’ equity			75,222				64,387
Noncontrolling interest			4,448				4,448
Total shareholders’ equity			79,670				68,835
Total capitalization		$	264,398			$	245,563

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SELECTED CONSOLIDATED FINANCIAL DATA

Our selected historical consolidated statement of operations, cash flows and other financial data for the years ended December 31, 2009, 2008 and 2007, and our selected historical consolidated balance sheet data as of December 31, 2009 and 2008, are derived from our audited consolidated financial statements incorporated by reference in this prospectus.

Our selected historical consolidated statement of income, cash flows and other financial data for the six months ended June 30, 2010 and 2009 and our selected historical consolidated balance sheet data as of June 30, 2010 and 2009 are derived from our interim unaudited consolidated financial statements incorporated by reference in this prospectus. In the opinion of management, our selected unaudited historical consolidated financial data includes all adjustments necessary for a fair presentation of our financial position, results of operations and cash flows on a consolidated basis, and all such adjustments are of a normal recurring nature.

Our selected historical consolidated statement of operations, cash flows and other financial data for the years ended December 31, 2006 and 2005, and our selected historical consolidated balance sheet data as of December 31, 2007, 2006 and 2005 are derived from our audited consolidated financial statements that are not included or incorporated by reference in this prospectus. These financial statements were included in Stoneridge’s annual report on Form 10-K filed in respect of such years, which reports can be reviewed on the website of the Securities and Exchange Commission. See “Where You Can Find More Information.”

The selected financial data presented below represents portions of our financial statements and are not complete. You should read this information in conjunction with, and it is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and related notes thereto incorporated by reference in this prospectus and our unaudited condensed consolidated financial statements and related notes thereto incorporated by reference in this prospectus.

Historical results are not necessarily indicative of future performance or results of operations, and results for any interim period are not necessarily indicative of the results that may be expected for a full year.

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		Six Months Ended June 30,								Twelve Months Ended June 30, 2010(1)				Year Ended December 31,
		2010				2009								2009				2008				2007				2006				2005
(In thousands, except per share data)		(Unaudited)								(Unaudited)				(Audited)
Statement of Operations Data:
Net sales		$	314,336			$	223,375			$	566,113			$	475,152			$	752,698			$	727,120			$	708,699			$	671,584
Cost of goods sold			241,189				190,504				437,852				387,167				586,411				559,397				549,793				522,996
Gross profit			73,147				32,871				128,261				87,985				166,287				167,723				158,906				148,588
Selling, general and administrative expenses			61,015				55,924				111,319				106,228				144,383				132,924				123,843				125,285
Goodwill impairment charge			—				—				—				—				65,175				—				—				—
Operating income (loss)(2)			12,132				(23,053	)			16,942				(18,243	)			(43,271	)			34,799				35,063				23,303
Interest expense, net			11,236				11,035				22,166				21,965				20,575				21,759				21,744				23,872
Equity in earnings of investees			(2,302	)			(1,478	)			(8,599	)			(7,775	)			(13,490	)			(10,893	)			(7,125	)			(4,052	)
Other expense (income), net			(1,699	)			645				(1,451	)			893				419				709				805				(953	)
Income (loss) before income taxes(2)			4,897				(33,255	)			4,826				(33,326	)			(50,775	)			23,224				19,639				4,436
Provision (benefit) for income taxes			(758	)			(1,911	)			150				(1,003	)			46,752				6,553				5,126				3,503
Net income (loss)(2)(3)			5,655				(31,344	)			4,676				(32,323	)			(97,527	)			16,671				14,513				933
Net income (loss) attributable to noncontrolling interest			(44	)			—				38				82				—				—				—				—
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries(2)(3)		$	5,699			$	(31,344	)		$	4,638			$	(32,405	)		$	(97,527	)		$	16,671			$	14,513			$	933
Basic net income (loss) per share(2)(3)			$0.24				$(1.33	)			$0.19				$(1.37	)			$(4.17	)			$0.72				$0.63				$0.04
Diluted net income (loss) per share(2)(3)			$0.24				$(1.33	)			$0.19				$(1.37	)			$(4.17	)			$0.71				$0.63				$0.04
Balance Sheet Data (at period end):
Working capital		$	144,468			$	138,203			$	144,468			$	142,896			$	160,387			$	184,788			$	135,915			$	116,689
Total assets		$	377,893			$	341,829			$	377,893			$	362,525			$	382,437			$	527,769			$	501,807			$	463,038
Long-term debt, less current portion		$	183,290			$	183,000			$	183,290			$	183,431			$	183,000			$	200,000			$	200,000			$	200,000
Shareholders' equity		$	79,670			$	66,403			$	79,670			$	74,057			$	91,758			$	206,189			$	178,622			$	153,991
Other Data:
Product development expenses		$	19,092			$	18,026			$	34,059			$	32,993			$	45,509			$	45,223			$	40,840			$	39,193
Capital expenditures		$	7,063			$	6,743			$	12,318			$	11,998			$	24,573			$	18,141			$	25,895			$	28,934
Depreciation and amortization(4)		$	9,723			$	10,267			$	19,395			$	19,939			$	26,399			$	28,503			$	26,180			$	26,157

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Overview

We are a global designer and manufacturer of highly engineered electrical and electronic components, modules and systems for the medium- and heavy-duty truck, automotive, agricultural and off-highway vehicle markets.

We recognized net income for the quarter ended June 30, 2010 of $4.2 million, or $0.17 per diluted share, compared with a net loss of $19.8 million, or $(0.84) per diluted share, for the second quarter of 2009.

Our second quarter 2010 results were positively affected by improvements in the North American automotive and North American and European commercial vehicle markets as well as the economy as a whole. Production volumes in the North American automotive vehicle market increased by 72.7% during the quarter ended June 30, 2010 when compared to the quarter ended June 30, 2009. These automotive vehicle market production volume increases had a positive effect on our North American automotive vehicle market net sales of approximately $19.8 million, primarily within our Control Devices segment. The commercial vehicle market production volumes in North America improved by 28.3% during the quarter ended June 30, 2010 when compared to the prior year second quarter, which resulted in increased net sales of approximately $19.7 million, primarily within our Electronics segment. Our net sales were also favorably affected by increased European commercial vehicle production volumes of 58.1% during the quarter ended June 30, 2010 as compared to the prior year second quarter. This increased production volume had a positive effect on our net sales of approximately $11.9 million, principally within the Electronics segment. These increases in net sales were partially offset by unfavorable foreign currency exchange rates. Our revenues were unfavorably affected by foreign currency translation of approximately $3.0 million during the quarter ended June 30, 2010 when compared to the quarter ended June 30, 2009. Our gross margin percentage increased from 13.3% for the quarter ended June 30, 2009 to 23.8% for the quarter ended June 30, 2010, primarily due to the significant increases in sales and the leveraging of our cost structure resulting from our prior restructuring initiatives.

Our selling, general and administrative expenses (“SG&A”) increased from $27.9 million for the quarter ended June 30, 2009 to $31.4 million for the quarter ended June 30, 2010. This $3.5 million, or 12.5%, increase in SG&A was mainly due to increased compensation and compensation related expenses incurred during the quarter ended June 30, 2010 of approximately $2.0 million primarily as a result of increased incentive compensation expenses. In addition, our design and development costs increased by approximately $0.5 million between periods due to our support of new product launches by our customers.

Our results for the six months ended June 30, 2010 were also favorably affected by the wind-down of our wholly-owned subsidiary, Stoneridge Pollak Limited (“SPL”), located in Mitcheldean, England. On February 23, 2010, we placed SPL into administration (a structured bankruptcy) in the United Kingdom. We had previously ceased SPL’s manufacturing operations in December of 2008, as part of the restructuring initiatives announced in October 2007. All SPL customer contracts were transferred to other subsidiaries subsequent to placing SPL into administration. We recognized a net gain within other expense (income), net of approximately $2.2 million, primarily from the reversal of the cumulative translation adjustment account, which had previously been included as a component of accumulated other comprehensive income within shareholders’ equity. In addition, we recognized a tax benefit of approximately $1.2 million from the reversal of deferred tax liabilities; primarily employee benefit related which were also previously included as a component of accumulated other comprehensive income.

At June 30, 2010 and December 31, 2009, we maintained a cash and equivalents balance of $74.6 million and $91.9 million, respectively. At June 30, 2010 and December 31, 2009, we had borrowing capacity of $71.8 million and $54.1 million, respectively, under the ABL facility, and we had no borrowings under the ABL facility.

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Results of Operations

Six months ended June 30, 2010 compared to six months ended June 30, 2009

Net Sales.  Net sales for our reportable segments, excluding inter-segment sales, for the six months ended June 30, 2010 and 2009 are summarized in the following table (in thousands, except percentages):

		Six Months Ended June 30,																$ Increase				% Increase
		2010								2009
Electronics		$	196,565				62.5	%		$	148,665				66.6	%		$	47,900				32.2	%
Control Devices			117,771				37.5				74,710				33.4				43,061				57.6	%
Total net sales		$	314,336				100.0	%		$	223,375				100.0	%		$	90,961				40.7	%

Our Electronics segment was positively affected by increased volume in our served markets by approximately $47.2 million for the six months ended June 30, 2010 when compared to the first half of the prior year. The increase in net sales for our Electronics segment was primarily due to volume increases in our North American and European commercial vehicle products. Commercial vehicle market production volumes in North America and Europe increased by 21.7%, and 25.5%, respectively, during the six months ended June 30, 2010 when compared to the first half of the prior year. The increase in North American and European commercial vehicle production positively affected net sales in our Electronics segment for the six months ended June 30, 2010 by approximately $23.6 million, or 33.5%, and $13.9 million, or 40.3%, respectively. Our net sales were favorably affected by approximately $4.1 million during the six months ended June 30, 2010 due to the inclusion of BCS, which was acquired in the fourth quarter of 2009. Net sales within our Electronics segment were also favorably affected by approximately $6.2 million as a result of production volume increases in the agricultural vehicle market during the six months ended June 30, 2010 when compared to the first half of 2009.

Our Control Devices segment was positively affected by increased volume in our served markets by approximately $38.5 million for the six months ended June 30, 2010 when compared to the prior year first half. The increase in net sales for our Control Devices segment was primarily attributable to production volume increases at our major customers in the North American automotive vehicle market, which increased by 71.8% during the six months ended June 30, 2010 when compared to the six months ended June 30, 2009. Volume increases within the automotive vehicle market of our Control Devices segment increased net sales for the six months ended June 30, 2010 by approximately $35.2 million, or 59.0%, when compared to the first half of the prior year.

Net sales by geographic location for the six months ended June 30, 2010 and 2009 are summarized in the following table (in thousands, except percentages):

		Six Months Ended June 30,																$ Increase				% Increase
		2010								2009
North America		$	256,492				81.6	%		$	182,305				81.6	%		$	74,187				40.7	%
Europe and other			57,844				18.4				41,070				18.4				16,774				40.8	%
Total net sales		$	314,336				100.0	%		$	223,375				100.0	%		$	90,961				40.7	%

The North American geographic location consists of the results of our operations in the United States and Mexico.

The increase in North American net sales was primarily attributable to increased sales volume in our North American automotive and commercial vehicle markets. These increased volume levels had a positive effect on our net sales for the six months ended June 30, 2010 of $34.9 million and $23.9 million for our North American automotive and commercial vehicle markets, respectively. Production volume increases within the agricultural vehicle market during the six months ended June 30, 2010 favorably affected our North American net sales by approximately $8.3 million. North American net sales for the six months ended June 30, 2010 were also favorably affected by approximately $4.1 million due to the inclusion of BCS. Our increase in net sales outside North America was primarily due to increased sales of European commercial vehicle market products, which had a positive effect on our net sales for the six months ended June 30, 2010 of approximately $14.0 million.

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Condensed consolidated statements of operations as a percentage of net sales for the six months ended June 30, 2010 and 2009 are presented in the following table (in thousands, except percentages):

		June 30,																$ Increase / (Decrease)
		2010								2009
Net sales		$	314,336				100.0	%		$	223,375				100.0	%		$	90,961
Costs and expenses:
Cost of goods sold			241,189				76.7				190,504				85.3				50,685
Selling, general and administrative			61,015				19.4				55,924				25.0				5,091
Operating income (loss)			12,132				3.9				(23,053	)			(10.3	)			35,185
Interest expense, net			11,236				3.6				11,035				4.9				201
Equity in earnings of investees			(2,302	)			(0.7	)			(1,478	)			(0.7	)			(824	)
Other expense (income), net			(1,699	)			(0.5	)			645				0.3				(2,344	)
Income (loss) before income taxes			4,897				1.5				(33,255	)			(14.8	)			38,152
Benefit from income taxes			(758	)			(0.2	)			(1,911	)			(0.9	)			1,153
Net income (loss)			5,655				1.8				(31,344	)			(13.9	)			36,999
Net loss attributable to noncontrolling interest			(44	)			—				—				—				(44	)
Net income (loss) attributable to Stoneridge, Inc. and subsidiaries		$	5,699				1.8	%		$	(31,344	)			(13.9	)%		$	37,043

Cost of Goods Sold.  The decrease in cost of goods sold as a percentage of net sales was primarily due to the significant increase in volume of our European and North American commercial and automotive vehicle markets during the six months ended June 30, 2010 when compared to the prior year comparative period. A portion of our cost structure is fixed in nature, such as overhead and depreciation costs. These fixed costs combined with significantly higher net sales in the first half of 2010, resulted in a lower cost of goods sold as a percentage of net sales for the first half of 2010. Our material cost as a percentage of net sales for our Electronics segment for the first half of 2010 and 2009 was 56.4% and 54.9%, respectively. Our material cost as a percentage of net sales for the Control Devices segment decreased from 55.0% for the six months ended June 30, 2009 to 52.6% for the first half of 2010. This decrease is largely due to inventory related charges taken in 2009 as a result of lower sales volumes in our served markets.

Selling, General and Administrative Expenses.  Design and development expenses included in SG&A were $19.1 million and $18.0 million for the six months ended June 30, 2010 and 2009, respectively. The increase in design and development costs is a result of our customers’ new product launches in the near term. The increase in SG&A costs excluding design and development expenses was mainly due to higher employee related costs of approximately $3.8 million, primarily incentive compensation. Our SG&A costs decreased as a percentage of net sales because of the increase in net sales recognized in the current period when compared to the prior year period.

Costs from our restructuring initiatives for the six months ended June 30, 2010 decreased compared to the first six months of 2009 as a result of our restructuring initiatives nearing completion. Costs incurred during the six months ended June 30, 2010 related to restructuring initiatives amounted to approximately $0.3 million and were comprised of one-time termination benefits and contract termination costs. These restructuring actions were a combination of severance costs as a result of the continuation of restructuring initiatives which began in 2009 in Dundee, Scotland and an adjustment that was made to certain assumptions related to our cancelled lease in Mitcheldean, England. This lease was cancelled in 2008 as part of our restructuring initiative. Restructuring charges for the first six months of 2009 were approximately $2.5 million and were primarily comprised of one-time termination benefits. These restructuring actions were in response to the depressed conditions in the European and North American commercial vehicle markets as well as the North American automotive vehicle market. Restructuring expenses that were general and administrative in nature were included in the Company’s condensed consolidated statements of operations as a component of SG&A, while the remaining restructuring related expenses were included in cost of goods sold.

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Restructuring charges, general and administrative in nature, recorded by reportable segment during the six months ended June 30, 2010 were as follows (in thousands):

		Electronics				Control Devices				Total Consolidated Restructuring Charges
Severance costs		$	183			$	—			$	183
Contract termination costs			121				—				121
Total general and administrative restructuring charges		$	304			$	—			$	304

All restructuring charges result in cash outflows. Severance costs related to a reduction in workforce. Contract termination costs represent expenditures associated with long-term lease obligations that were cancelled as part of the restructuring initiatives.

Restructuring charges, general and administrative in nature, recorded by reportable segment during the six months ended June 30, 2009 were as follows (in thousands):

		Electronics				Control Devices				Total Consolidated Restructuring Charges
Severance costs		$	1,804			$	613			$	2,417
Contract termination costs			92				—				92
Total general and administrative restructuring charges		$	1,896			$	613			$	2,509

Equity in Earnings of Investees.  The increase in equity earnings of investees was attributable to the increase in equity earnings recognized from our PST and Minda joint ventures. Equity earnings for PST increased from $1.4 million for the six months ended June 30, 2009 to $1.8 million for the six months ended June 30, 2010. The increase primarily reflects higher volumes for PST’s product lines during the six months ended June 30, 2010. Equity earnings for Minda increased from $0.1 million for the six months ended June 30, 2009 to $0.5 million for the six months ended June 30, 2010.

Other Expense (Income), net.  As a result of placing SPL into administration, we recognized a gain of approximately $2.2 million during the six months ended June 30, 2010 within other expense (income), net on the condensed consolidated statement of operations. This gain is primarily related to the reversal of the cumulative translation adjustment account, which had previously been included as a component of other comprehensive income within Shareholders’ Equity.

Income (Loss) Before Income Taxes.  Income (loss) before income taxes is summarized in the following table by reportable segment (in thousands, except percentages).

		Six Months Ended June 30,								$ Increase/ (Decrease)				% Increase/ (Decrease)
		2010				2009
Electronics(A)		$	6,241			$	(11,160	)		$	17,401				155.9	%
Control Devices(A)			8,759				(12,428	)			21,187				170.5	%
Other corporate activities(A)			306				1,316				(1,010	)			(76.7	)%
Corporate interest expense			(10,409	)			(10,983	)			574				5.2	%
Income (loss) before income taxes		$	4,897			$	(33,255	)		$	38,152				114.7	%

The increase in profitability in the Electronics segment was principally related to the increased sales volume, primarily to our commercial vehicle, customers for the six months ended June 30, 2010 when compared to the first half of 2009. In addition, restructuring related expenses for the Electronics segment were approximately $2.2 million lower for the six months ended June 30, 2010 when compared to the first half of 2009.

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The increase in profitability in the Control Devices segment was primarily due to increased sales volume for the six months ended June 30, 2010 when compared to the six months ended June 30, 2009. Production volume increases favorably affected our net sales within the Control Devices segment by approximately $38.5 million for the six months ended June 30, 2010 when compared to the first half of the prior year.

The decrease in profitability from other corporate activities was primarily due to higher employee related costs, largely incentive compensation costs, incurred during the six months ended June 30, 2010 when compared to the first six months of 2009.

Income (loss) before income taxes by geographic location for the six months ended June 30, 2010 and 2009 is summarized in the following table (in thousands, except percentages):

		Six Months Ended June 30,																$ Increase				% Increase
		2010								2009
North America(A)		$	4,219				86.2	%		$	(22,129	)			66.5	%		$	26,348				119.1	%
Europe and other(A)			678				13.8				(11,126	)			33.5				11,804				106.1	%
Income (loss) before income taxes		$	4,897				100.0	%		$	(33,255	)			100.0	%		$	38,152				114.7	%

North American loss before income taxes includes interest expense of approximately $11.3 million and $11.1 million for the six months ended June 30, 2010 and 2009, respectively.

Excluding the effect of the SPL administration, our North American results improved, primarily as a result of increased volume in the North American automotive and commercial vehicle markets during the six months ended June 30, 2010 as compared to the first half of 2009. Our results in Europe and other were favorably affected by our increased European commercial vehicle market sales during the current period.

Benefit from Income Taxes.  We recognized a benefit from income taxes of $0.8 million, or (15.5%) of pre-tax income, and $1.9 million, or 5.7% of the pre-tax loss, for federal, state and foreign income taxes for the six months ended June 30, 2010 and 2009, respectively. As reported at December 31, 2009, the Company is in a cumulative loss position and provides a valuation allowance offsetting federal, state and certain foreign deferred tax assets. The decrease in the tax benefit for the six months ended June 30, 2010 compared to the six months ended June 30, 2009, was primarily attributable to lower losses from our foreign operations and the resulting decrease in tax benefits related to losses in those foreign jurisdictions. That reduction in benefit was partially offset with a tax benefit related to our United Kingdom operations. As a result of placing SPL into administration, the Company recognized a tax benefit of approximately $1.2 million during the six months ended June 30, 2010, from the reversal of deferred tax liabilities, primarily employee benefit related, that were previously included as a component of accumulated other comprehensive income within Shareholders’ Equity.

Year ended December 31, 2009 compared to year ended December 31, 2008

Net Sales.  Net sales for our reportable segments, excluding inter-segment sales, for the years ended December 31, 2009 and 2008 are summarized in the following table (in thousands, except percentages):

		For the Years Ended December 31,
		2009								2008								$ Decrease				% Decrease
Electronics		$	301,424				63.4	%		$	520,936				69.2	%		$	(219,512	)			(42.1	)%
Control Devices			173,728				36.6				231,762				30.8				(58,034	)			(25.0	)%
Total net sales		$	475,152				100.0	%		$	752,698				100.0	%		$	(277,546	)			(36.9	)%

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Our Electronics segment was adversely affected by reduced volume in our served markets by approximately $198.1 million for the year ended December 31, 2009 when compared to the prior year. The decrease in net sales for our Electronics segment was primarily due to volume declines in our North American and European commercial vehicle production. Commercial vehicle market production volumes in Europe and North America declined by 64.1% and 39.8%, respectively, during the year ended December 31, 2009 compared to the prior year. The reductions in European and North American commercial vehicle production negatively affected net sales in our Electronics segment for the year ended December 31, 2009 by approximately $65.3 million or 42.3% and $88.7 million or 37.3%, respectively. The balance of the decrease was primarily related to volume declines in the agricultural and automotive vehicle markets of approximately $22.6 million and $21.5 million, respectively. In addition, our Electronics segment net sales were unfavorably affected by foreign currency fluctuations of approximately $15.3 million in 2009 when compared to 2008.

Our Control Devices segment was adversely affected by reduced volume in our served markets by approximately $49.4 million for the year ended December 31, 2009 when compared to the prior year. The decrease in net sales for our Control Devices segment was primarily attributable to production volume reductions at our major customers in the North American automotive vehicle market. Production volumes in the North American automotive vehicle market declined by 32.3% during the year ended December 31, 2009 when compared to the year ended December 31, 2008. Volume reductions within the automotive market of our Control Devices segment reduced net sales for the year ended December 31, 2009 by approximately $39.4 million, or 20.7%, when compared to the prior year. In addition, our current year net sales were adversely affected by sales losses during the year ended December 31, 2009 of approximately $10.0 million. These sales losses were primarily a result of our products being decontented or removed from certain customer products. The balance of the decrease was related to volume declines in the agricultural and commercial vehicle markets of approximately $5.6 million and $4.4 million, respectively during the year ended December 31, 2009 when compared to the prior year.

Net sales by geographic location for the years ended December 31, 2009 and 2008 are summarized in the following table (in thousands, except percentages):

		For the Years Ended December 31,
		2009								2008								$ Decrease				% Decrease
North America		$	384,467				80.9	%		$	557,990				74.1	%		$	(173,523	)			(31.1	)%
Europe and other			90,685				19.1				194,708				25.9				(104,023	)			(53.4	)%
Total net sales		$	475,152				100.0	%		$	752,698				100.0	%		$	(277,546	)			(36.9	)%

The North American geographic location consists of the results of our operations in the United States and Mexico.

The decrease in North American net sales was primarily attributable to lower sales volume in our North American commercial vehicle, automotive and agricultural markets. These lower volume levels had a negative effect on our net sales for the year ended December 31, 2009 of $93.1 million, $41.9 million and $25.8 million for our North American commercial vehicle, automotive vehicle and agricultural markets, respectively. Our decrease in net sales outside North America was primarily due to lower sales volumes in the European commercial and automotive vehicle markets, which had a negative effect on net sales for the year ended December 31, 2009 of approximately $65.4 million and $19.0 million, respectively. In addition, our 2009 net sales outside of North America were negatively affected by foreign currency fluctuations of approximately $15.3 million.

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Consolidated statements of operations as a percentage of net sales for the years ended December 31, 2009 and 2008 are presented in the following table (in thousands, except percentages):

		For the Years Ended December 31,																$ Increase / (Decrease)
		2009								2008
Net sales		$	475,152				100.0	%		$	752,698				100.0	%		$	(277,546	)
Costs and expenses:
Cost of goods sold			387,167				81.5				586,411				77.9				(199,244	)
Selling, general and administrative			102,583				21.6				135,992				18.1				(33,409	)
Goodwill impairment charge			—				—				65,175				8.7				(65,175	)
Restructuring charges			3,645				0.8				8,391				1.1				(4,746	)
Operating loss			(18,243	)			(3.9	)			(43,271	)			(5.8	)			25,028
Interest expense, net			21,965				4.6				20,575				2.7				1,390
Equity in earnings of investees			(7,775	)			(1.6	)			(13,490	)			(1.8	)			5,715
Other expense, net			893				0.2				419				0.1				474
Loss before income taxes			(33,326	)			(7.1	)			(50,775	)			(6.8	)			17,449
Provision (benefit) for income taxes			(1,003	)			(0.2	)			46,752				6.2				(47,755	)
Net loss			(32,323	)			(6.9	)			(97,527	)			(13.0	)			65,204
Net income attributable to noncontrolling interest			82				—				—				—				82
Net loss attributable to Stoneridge, Inc. and subsidiaries		$	(32,405	)			(6.9	)%		$	(97,527	)			(13.0	)%		$	65,122

Cost of Goods Sold.  The increase in cost of goods sold as a percentage of net sales was due to the significant decline in volume of our European and North American commercial and automotive vehicle markets net sales during 2009. A portion of our cost structure is fixed in nature, such as overhead and depreciation costs. These fixed costs combined with significantly lower net sales have increased our cost of goods sold as a percentage of net sales. In addition, our cost of goods sold for 2008 included approximately $7.0 million of restructuring charges. In 2009, there was approximately $0.1 million of restructuring costs included in cost of goods sold. Our material cost as a percentage of net sales for our Electronics segment for 2009 and 2008 was 55.4% and 51.8%, respectively. This increase is primarily due to significantly lower volume from our military related commercial vehicle products in the current year. Our materials cost as a percentage of sales for the Control Devices segment increased from 50.7% for 2008 to 52.9% for 2009. Our material costs as a percent of sales increased during the current period due to the outsourcing of a stamping operation and inventory related charges. As a result of outsourcing the stamping operation, the entire cost of the stamping was included in direct material. Prior to outsourcing the stamping operation, the cost was split between direct labor, direct material and overhead.

Selling, General and Administrative Expenses.  Design and development expenses included in SG&A were $33.0 million and $45.5 million for 2009 and 2008, respectively. Design and development expenses for our Electronics and Control Devices segments decreased from $29.5 million and $16.0 million for 2008 to $19.5 million and $13.5 million for 2009, respectively. The decrease in design and development costs for both segments was a result of our customers delaying new product launches in the near term as well as planned reductions in our design activities. As a result of our product platform launches scheduled for 2010 and in the future, we believe that our design and development costs will increase in 2010 from our 2009 level. The decrease in SG&A costs excluding design and development expenses was due to lower employee related costs of approximately $17.3 million caused by reduced headcount and lower incentive compensation expenses, company-wide. These current year cost reductions are benefits related to a combination of restructuring initiatives incurred in prior periods and temporary cost control measures, such as wage and benefit freezes and unpaid leaves. Our SG&A costs increased as a percentage of net sales because net sales declined faster than we were able to reduce our SG&A costs.

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Goodwill Impairment Charge.  A goodwill impairment charge of $65.2 million was recorded during 2008. During the fourth quarter of 2008, as a result of the deterioration of the global economy and its effects on the automotive and commercial vehicle markets, we recognized the goodwill impairment charge within our Control Devices segment. There were no similar impairment charges taken in 2009.

Restructuring Charges.  Costs from our restructuring initiatives for 2009 decreased compared to 2008. Costs incurred during 2009 related to restructuring initiatives amounted to approximately $3.7 million and were primarily comprised of one-time termination benefits. Restructuring related expenses of $3.6 million that were general and administrative in nature were included in our consolidated statement of operations as restructuring charges, while the remaining $0.1 million of restructuring related expenses was included in cost of goods sold. These restructuring actions were in response to the depressed conditions in the European and North American commercial vehicle markets as well as the North American automotive vehicle market. Restructuring charges for 2008 were approximately $15.4 million and were comprised of one-time termination benefits and line-transfer expenses related to our initiative to improve the Company’s manufacturing efficiency and cost position by ceasing manufacturing operations at our Control Devices segment facility in Sarasota, Florida and our Electronics segment facility in Mitcheldean, England. Restructuring related expenses of $8.4 million that were general and administrative in nature were included in our consolidated statements of operations as restructuring charges, while the remaining $7.0 million of restructuring related expenses were included in cost of goods sold. These initiatives were substantially completed in 2009.

Restructuring charges, general and administrative in nature, recorded by reportable segment during the year ended December 31, 2009 were as follows (in thousands):

		Electronics				Control Devices				Total Consolidated Restructuring Charges
Severance costs		$	2,237			$	1,034			$	3,271
Contract termination costs			374				—				374
Total restructuring charges		$	2,611			$	1,034			$	3,645

Severance costs relate to a reduction in workforce. Contract termination costs represent expenditures associated with long-term lease obligations that were cancelled as part of the restructuring initiatives.

Restructuring charges, general and administrative in nature, recorded by reportable segment during the year ended December 31, 2008 were as follows (in thousands):

		Electronics				Control Devices				Total Consolidated Restructuring Charges
Severance costs		$	2,564			$	2,521			$	5,085
Contract termination costs			1,305				—				1,305
Other exit costs			23				1,978				2,001
Total restructuring charges		$	3,892			$	4,499			$	8,391

Other exit costs include miscellaneous expenditures associated with exiting business activities, such as the transferring of production equipment.

Equity in Earnings of Investees.  The decrease in equity earnings of investees was predominately attributable to the decrease in equity earnings recognized from our PST joint venture. Equity earnings for PST declined from $12.8 million for the year ended December 31, 2008 to $7.4 million for the year ended December 31, 2009. The decrease was primarily caused by a 19.3% decline in PST’s net sales.

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Income (Loss) Before Income Taxes.  Income (loss) before income taxes is summarized in the following table by reportable segment (in thousands, except percentages):

		For the Years Ended December 31,								$ Increase / (Decrease)				% Increase / (Decrease)
		2009				2008
Electronics		$	(13,911	)		$	38,713