C LOYD J. A BRUZZO President and Chief Executive Officer L OOKING F URTHER A HEAD M ANAGING T HROUGH THE C YCLE C LOYD J. A BRUZZO President and Chief Executive Officer March 8, 2002 Since 1999,  we have won more than $365 million in new business awards, much of which will take effect in 2003 and beyond. In the midst of a major economic downturn, it can be somewhat difficult to focus on opportunities. It  is tempting to make wholesale cuts to the entire business and manage solely to maximize short- term earnings. It is far more difficult to maintain a  committed, disciplined and focused strategy. Weak economic times create opportunities for future competitive advantage for companies that recog- nize them.  We recognize the opportunities and plan to take advantage of them! During 2001, we made highly selective cuts designed to realign our  capacities and cost structures to reflect the cyclical changes occurring in  the industry. We eliminated excess capacity in our power distribution  division. Our European electronics business was restructured to improve its competitive position in certain products. Employment levels were reduced across all divisions, proportionate to the corresponding reduction in  revenue. Senior executive incentive compensation was eliminated. All other  discretionary operating expenses were minimized.  The industry ended 2001 with a high degree of uncertainty. The outlook for 2002 is for a sharp, year-over-year decline in industry production volumes. As a result, we have found it absolutely necessary to expand our cost contain- ment efforts in 2002. Our Company and its management team are committed to year-over-year improvement in operating profits and cash flow. Starting in late 2000, Stoneridge began a major cultural change. After many years of consistent and profitable growth, we faced a major cyclical downturn in our served markets. We were required to shift from a growth-oriented culture to one of cyclical contraction. The industry- wide economic downturn brought with it severe financial pressure. Stoneridge management responded swiftly but rationally to not unwittingly erode the Company’s competitive position in the process of addressing the down- turn. We did not overreact to the economic  conditions; instead, we seized the opportunity to refocus our strategy and selectively alter our cost structure.  This was the time to position the Company operationally and financially to prosper in the next industry upturn. We have the confidence to look beyond the current economic  environment  to the inevitable upturn and position Stoneridge accordingly. We have begun 2002 with an expansion of the cuts initiated in 2001. We believe these austerity measures, including suspending wage and salary increases as well as all corporate 401(k) and profit-sharing contributions  in 2002, while unprecedented in our Company’s history, are necessary to maneuver Stoneridge through the cyclical downturn and preserve our long-term competitive position. We acknowledge the sacrifices being made by our employees and value their cooperation during this period. We fully intend, as economic conditions improve, to return to more normalized business practices.  The cuts we have made are necessary and painful, but they do not damage the “heart” of our business. We remain committed to growth and continue to invest our resources in future product development for awarded new business. We have the confidence to look beyond the current economic environment to the inevitable upturn and position Stoneridge accordingly. We clearly view the current industry- wide downturn as the result of cyclicality rather than long-term structural weakness.  2 The true measure of the character of a company and its people is how they perform under adverse economic times. We are strong only with the dedication of our employees. We appreciate the sacrifices each individual is making during the downturn. Our entire organization is focused on continuous improvement. We are confident Stoneridge will emerge from this cycle a stronger and more viable Company, with greater opportu- nities for all of our employees. We are anxiously anticipating our return to a growth-oriented environment.  We acknowledge the extensive cuts we have made to our business, and, more importantly, we see the opportunities of the upturn. We believe we will be in position to prosper from that upturn, with operating returns on sales and investment more in line with our historical trends. We believe strongly in our strategy, that it is very commercially viable. Stoneridge has the global resources and capabilities, through its products and services, to deliver the value customers expect. We continue to be  a technology-driven company with leadership positions in key product  areas – as reflected by the fact that, since 1999, we have won more than $365 million in new business awards, much of which will take effect in 2003 and beyond. We also have an increasing and distinct capability to combine our technologies and products to bring integrated systems and modules  to the market. These factors will help us persevere through the downturn and emerge from it stronger than ever. Given current economic conditions, offset by the impact of new product launches, we enter 2002 expecting our sales volume to be similar to what we experienced in 2001. Despite the flat revenue, we anticipate significant improvement in operating profit and cash flow as a result of the actions  discussed above. Also, we will continue our focus on strengthening and improving our  balance sheet. We recognize the need to adjust our capital structure to  provide the Company with adequate resources for future growth. We are prepared to respond quickly to capital market opportunities to accomplish such adjustment.  We know 2002 will be another challenging year and we are ready for the task ahead. Looking beyond the year, we remain optimistic and enthusiastic about our Company’s future. The entire Stoneridge organization is unconditionally committed to our overriding goal of creating sustainable, long-term shareholder value.  We thank our customers for their confidence and their business, our employees for making Stoneridge a world-class organization, and our shareholders for their continued support. I am confident that together we will prosper in the years to come. 3