Standard Motor Products, Inc. Announces Fourth Quarter and Year End 2013 Results and a New Stock Repurchase Program

Feb 24, 2014, 08:30 ET from Standard Motor Products, Inc.

NEW YORK, Feb. 24, 2014 /PRNewswire/ -- Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and for the year ended December 31, 2013.

Consolidated net sales for the fourth quarter of 2013 were $218.7 million, compared to consolidated net sales of $192.4 million during the comparable quarter in 2012. Earnings from continuing operations for the fourth quarter of 2013 were $9.4 million or 40 cents per diluted share, compared to $6.3 million or 27 cents per diluted share in the fourth quarter of 2012. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the fourth quarter of 2013 were $9.7 million or 42 cents, compared to $6.5 million or 28 cents per diluted share in the fourth quarter of 2012.

Consolidated net sales for 2013 were $983.7 million, compared to consolidated net sales of $948.9 million in 2012.  Earnings from continuing operations for 2013 were $53 million or $2.28 per diluted share, compared to $43 million or $1.86 per diluted share in 2012.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for 2013 and 2012 were $54.1 million or $2.32 per diluted share and $42.3 million or $1.83 per diluted share, respectively.

Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We are very pleased with our results for 2013. We set company records for both sales and profit, despite a disappointing year in Temperature Control, primarily the result of a mild summer season. For the year, sales increased 3.7% and earnings per share, excluding special items, were up 27%, from $1.83 to $2.32.

"For the fourth quarter, sales grew 13.7% over the prior year and earnings per share, excluding special items, were up 50%, from 28 cents to 42 cents. The fourth quarter figures were enhanced by certain Engine Management customers broadening their product lines for their commercial business. We continue to forecast annual growth in the low to mid single digit range.

"Our Engine Management division had an excellent year. Sales were up 6.9%, above industry growth averages, and gross margin improved from 28.2% to 30.7%. Temperature Control sales were down for the year, for reasons stated above, even with the benefit of the CompressorWorks acquisition for the full 12 months in 2013, vs. only eight months in 2012.

"Much of the Company's profit improvement resulted from an increase in gross margin. As we had said in prior releases, we are seeing the continuing benefits of our efforts over the last several years – manufacturing parts we formerly purchased, integrating recent acquisitions, expanding our production in low cost areas, and improved sourcing.

"Cash flow continued strong. During the year we reduced total debt by $19 million, from $40.6 million to $21.5 million. In addition, during 2013 we invested roughly $20 million in acquisitions and company share repurchases.

"In January we announced the acquisition of the assets of Pensacola Fuel Injection for $12.2 million. The company re-manufactures a wide range of diesel injectors, diesel pumps, and turbo chargers. PFI was our primary supplier for these parts. We plan to relocate the operation to our facility in Grapevine, Texas by the end of the second quarter. This will result in cost savings in the product line, and we will now be a basic manufacturer in this important and growing product area. The current owners of PFI will retain the retail segment of this business."

The Board of Directors has authorized the purchase of up to an additional $10 million of its common stock under a stock repurchase program. This increase is in addition to the completed $6 million repurchase program authorized by the Board in February 2013. Stock will be purchased from time to time, in the open market or through private transactions, as market conditions warrant. The Company intends to fund the stock repurchase program through its revolving credit facility. The stock repurchase program may be suspended or discontinued at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes, including funding existing equity compensation plans.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Monday, February 24, 2014.  The dial-in number is 866-952-1907 (domestic) or 785-424-1826 (international). The playback number is 800-757-4761 (domestic) or 402-220-7215 (international). The conference ID # is STANDARD.

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Standard Motor Products cautions investors that any forward-looking statements made by the company, including those that may be made in this press release, are based on management's expectations at the time they are made, but they are subject to risks and uncertainties that may cause actual results, events or performance to differ materially from those contemplated by such forward looking statements. Among the factors that could cause actual results, events or performance to differ materially from those risks and uncertainties discussed in this press release are those detailed from time-to-time in prior press releases and in the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q.  By making these forward-looking statements, Standard Motor Products undertakes no obligation or intention to update these statements after the date of this release.

  

STANDARD MOTOR PRODUCTS, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

2013

2012

2013

2012

(Unaudited)

(Unaudited)

NET SALES

$    218,708

$    192,355

$    983,704

$    948,916

COST OF SALES

151,959

134,388

693,250

689,247

GROSS PROFIT

66,749

57,967

290,454

259,669

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

50,443

45,173

201,256

187,495

RESTRUCTURING AND INTEGRATION EXPENSES

826

658

3,357

1,437

OTHER INCOME , NET

256

240

1,022

694

OPERATING INCOME 

15,736

12,376

86,863

71,431

OTHER NON-OPERATING INCOME (EXPENSE), NET

28

(630)

1

(696)

INTEREST EXPENSE

281

531

1,902

2,788

EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES

15,483

11,215

84,962

67,947

PROVISION FOR INCOME TAXES

6,092

4,905

31,919

24,978

EARNINGS FROM CONTINUING OPERATIONS

9,391

6,310

53,043

42,969

LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES

(455)

(395)

(1,593)

(1,616)

NET EARNINGS 

$         8,936

$         5,915

$      51,450

$      41,353

NET EARNINGS PER COMMON SHARE:

   BASIC EARNINGS FROM CONTINUING OPERATIONS

$           0.41

$           0.28

$           2.31

$           1.88

   DISCONTINUED OPERATION

(0.02)

(0.02)

(0.07)

(0.07)

   NET EARNINGS PER COMMON SHARE - BASIC

$           0.39

$           0.26

$           2.24

$           1.81

   DILUTED EARNINGS FROM CONTINUING OPERATIONS

$           0.40

$           0.27

$           2.28

$           1.86

   DISCONTINUED OPERATION

(0.02)

(0.01)

(0.07)

(0.07)

   NET EARNINGS PER COMMON SHARE - DILUTED

$           0.38

$           0.26

$           2.21

$           1.79

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

23,061,533

22,817,551

22,974,690

22,812,077

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES

23,366,587

23,075,586

23,270,067

23,050,340

  

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit

(In thousands)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

2013

2012

2013

2012

(unaudited)

(unaudited)

Revenues

Engine Management

$ 175,747

$ 153,657

$ 711,245

$ 665,105

Temperature Control

38,309

35,248

262,537

268,804

All Other

4,652

3,450

9,922

15,007

$   218,708

$   192,355

$   983,704

$   948,916

Gross Margin

Engine Management

$   55,546

31.6%

$   47,221

30.7%

$ 218,294

30.7%

$ 187,776

28.2%

Temperature Control

6,326

16.5%

6,979

19.8%

58,150

22.1%

58,583

21.8%

All Other

4,877

3,767

14,010

13,310

$     66,749

30.5%

$     57,967

30.1%

$   290,454

29.5%

$   259,669

27.4%

Selling, General & Administrative

Engine Management

$   31,273

17.8%

$   28,956

18.8%

$   121,578

17.1%

$   116,157

17.5%

Temperature Control

10,078

26.3%

8,832

25.1%

47,845

18.2%

43,537

16.2%

All Other

9,092

7,385

31,833

27,801

$     50,443

23.1%

$     45,173

23.5%

$   201,256

20.5%

$   187,495

19.8%

Operating Profit

Engine Management

$   24,273

13.8%

$   18,265

11.9%

$     96,716

13.6%

$     71,619

10.8%

Temperature Control

(3,752)

-9.8%

(1,853)

-5.3%

10,305

3.9%

15,046

5.6%

All Other

(4,215)

(3,618)

(17,823)

(14,491)

16,306

7.5%

12,794

6.7%

89,198

9.1%

72,174

7.6%

Restructuring & Integration

(826)

-0.4%

(658)

-0.3%

(3,357)

-0.3%

(1,437)

-0.2%

Other Income, Net

256

0.1%

240

0.1%

1,022

0.1%

694

0.1%

$     15,736

7.2%

$     12,376

6.4%

$     86,863

8.8%

$     71,431

7.5%

  

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

2013

2012

2013

2012

(Unaudited)

(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS

GAAP EARNINGS FROM CONTINUING OPERATIONS

$9,391

$6,310

$53,043

$42,969

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

495

395

2,014

862

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD

-

-

(374)

(774)

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(157)

(157)

(629)

(772)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS

$9,729

$6,548

$54,054

$42,285

DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$  0.40

$  0.27

$    2.28

$    1.86

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

0.02

0.02

0.09

0.03

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD

-

-

(0.02)

(0.03)

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

-

(0.01)

(0.03)

(0.03)

NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$  0.42

$  0.28

$    2.32

$    1.83

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS  AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS BEFORE SPECIAL ITEMS, WHICH ARE NON-GAAP MEASUREMENTS, ARE MEANINGFUL TO INVESTORS BECAUSE THEY PROVIDE A VIEW OF THE COMPANY WITH RESPECT TO ONGOING OPERATING RESULTS. SPECIAL ITEMS REPRESENT SIGNIFICANT CHARGES OR CREDITS THAT ARE IMPORTANT TO AN UNDERSTANDING OF THE COMPANY'S OVERALL OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE NOT RECOGNIZED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHOULD NOT BE VIEWED AS AN ALTERNATIVE TO GAAP MEASURES OF PERFORMANCE.       

  

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Balance Sheets

(In thousands)

December 31,

December 31,

2013

2012

(Unaudited)

ASSETS

CASH

$           5,559

$         13,074

ACCOUNTS RECEIVABLE, GROSS

132,170

104,689

ALLOWANCE FOR DOUBTFUL ACCOUNTS

6,969

6,124

ACCOUNTS RECEIVABLE, NET

125,201

98,565

INVENTORIES

269,447

267,468

OTHER CURRENT ASSETS

45,870

39,446

TOTAL CURRENT ASSETS

446,077

418,553

PROPERTY, PLANT AND EQUIPMENT, NET

63,646

64,422

GOODWILL AND OTHER INTANGIBLES, NET

72,866

72,373

OTHER ASSETS

32,934

21,246

TOTAL ASSETS

$       615,523

$       576,594

LIABILITIES AND STOCKHOLDERS' EQUITY

NOTES PAYABLE

$         21,406

$         40,453

CURRENT PORTION OF LONG TERM DEBT

59

120

ACCOUNTS PAYABLE

71,469

62,283

ACCRUED CUSTOMER RETURNS

31,464

29,033

OTHER CURRENT LIABILITIES

95,918

90,283

TOTAL CURRENT LIABILITIES

220,316

222,172

LONG-TERM DEBT

16

75

ACCRUED ASBESTOS LIABILITIES

23,919

25,110

OTHER LIABILITIES

21,840

21,650

 TOTAL LIABILITIES 

266,091

269,007

 TOTAL STOCKHOLDERS' EQUITY 

349,432

307,587

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$       615,523

$       576,594

  

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

TWELVE MONTHS ENDED

DECEMBER 31,

2013

2012

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

NET EARNINGS 

$ 51,450

$ 41,353

ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH

PROVIDED BY OPERATING ACTIVITIES:

DEPRECIATION AND AMORTIZATION

17,595

16,466

OTHER

12,773

17,231

CHANGE IN ASSETS AND LIABILITIES:

ACCOUNTS RECEIVABLE

(27,278)

15,393

INVENTORY 

(6,094)

(1,556)

ACCOUNTS PAYABLE

12,497

3,287

OTHER

(3,327)

1,386

NET CASH PROVIDED BY OPERATING ACTIVTIES

57,616

93,560

CASH FLOWS FROM INVESTING ACTIVITIES

CAPITAL EXPENDITURES

(11,410)

(11,811)

ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(12,760)

(38,594)

OTHER INVESTING ACTIVITIES

(592)

493

NET CASH USED IN INVESTING ACTIVITIES 

(24,762)

(49,912)

CASH FLOWS FROM FINANCING ACTIVITIES

NET CHANGE IN DEBT

(19,166)

(32,652)

PURCHASE OF TREASURY STOCK

(6,864)

(4,999)

DIVIDENDS PAID

(10,107)

(8,215)

OTHER FINANCING ACTIVITIES

(3,158)

3,079

NET CASH USED IN FINANCING ACTIVITIES

(39,295)

(42,787)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(1,074)

1,342

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(7,515)

2,203

CASH AND CASH EQUIVALENTS at beginning of year

13,074

10,871

CASH AND CASH EQUIVALENTS at end of year

$   5,559

$ 13,074

SOURCE Standard Motor Products, Inc.