Standard Motor Products, Inc. Announces Second Quarter 2012 Results and a Quarterly Dividend

06 Aug, 2012, 08:30 ET from Standard Motor Products, Inc.

NEW YORK, Aug. 6, 2012 /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 six months ended June 30, 2012.

Consolidated net sales for the second quarter of 2012 were $268.9 million, compared to consolidated net sales of $244 million during the comparable quarter in 2011.  Earnings from continuing operations for the second quarter of 2012 were $13.7 million or 59 cents per diluted share, which was equal to the comparable quarter in 2011. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the second quarter of 2012 were $13.6 million or 59 cents per diluted share, compared to $11.4 million or 49 cents per diluted share in the second quarter of 2011.

Consolidated net sales for the six month period ended June 30, 2012 were $480.6 million, compared to consolidated net sales of $464.2 million during the comparable period in 2011.  Earnings from continuing operations for the six month period ended June 30, 2012 were $19.2 million or 83 cents per diluted share, compared to $20.7 million or 90 cents per diluted share in the comparable period of 2011.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the six months ended June 30, 2012 and 2011 were $19 million or 82 cents per diluted share and $18.5 million or 80 cents per diluted share, respectively.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We are obviously pleased with our second quarter results. Aided by our two most recent acquisitions—Forecast Trading and CompressorWorks—sales were 10.2% ahead of the second quarter of 2011, and earnings per share, excluding non-operational items, were 20.4% ahead. Excluding the acquisitions, sales were higher by 1.6% in Engine Management and essentially flat in Temperature Control compared to 2011.

"For the six months, sales were up 3.5%, inclusive of acquisitions, but down 4%, excluding acquisitions. As we have previously stated, sales in the first quarter of 2011 benefited from substantial pipeline orders, and in addition we experienced the loss of certain air conditioning product groups from a major account. The majority of these unfavorable events occurred in the first half of the year allowing more comparable comparisons over the second half of the year.

"The integration of Forecast Trading and CompressorWorks is proceeding well. We have maintained all the major accounts from both companies; sales are achieving expectations; and we have begun work to generate savings in product cost and operating expenses as we integrate the operations. We will achieve some of the savings in 2012, but the bulk of the savings will be reflected in 2013.

"As we have been seeing, it has been a warm summer so far, especially in the center of the country. Temperature Control sales were strong in June and have continued strong into July.

"Cash flow from operations continues to be strong. Our total debt at June 30, 2012 was roughly $97 million, inclusive of approximately $110 million spending for three acquisitions over the past 14 months and mid-year working capital needs for our Temperature Control seasonal business. By year-end, we expect debt levels to decrease from current levels and achieve a Debt:EBITDA ratio of better than 1:1.

"Unfortunately, we have one piece of sad news to report. Mr. Robert Gerrity, an esteemed and valued Board member and Chairman of our Compensation and Management Development Committee, passed away on July 3.  He was an excellent contributor to our Company and will be sorely missed. Mr. Roger Widmann, a Board member since May 2005, has been selected to take over the Chairmanship of this important committee. We have also begun the selection process for a new Board member."

The Board of Directors has approved payment of a quarterly dividend of nine cents per share on the common stock outstanding. The dividend will be paid on September 4, 2012 to stockholders of record on August 16, 2012.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Monday, August 6, 2012.  The dial in number is 800-895-0198 (domestic) or 785-424-1053 (international). The playback number is 800-753-9134 (domestic) or 402-220-2678 (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

SIX MONTHS ENDED

JUNE 30,

JUNE 30,

2012

2011

2012

2011

(Unaudited)

(Unaudited)

NET SALES

$      268,875

$      244,005

$      480,586

$      464,235

COST OF SALES

199,531

180,832

356,692

347,910

GROSS PROFIT

69,344

63,173

123,894

116,325

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

46,609

40,016

91,385

80,656

RESTRUCTURING AND INTEGRATION EXPENSES

13

125

137

468

OTHER INCOME (EXPENSE), NET

(32)

262

21

531

OPERATING INCOME 

22,690

23,294

32,393

35,732

OTHER NON-OPERATING INCOME (EXPENSE), NET

(24)

176

(66)

443

INTEREST EXPENSE

842

1,045

1,555

2,402

EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES

21,824

22,425

30,772

33,773

PROVISION FOR INCOME TAXES

8,103

8,732

11,557

13,069

EARNINGS FROM CONTINUING OPERATIONS

13,721

13,693

19,215

20,704

LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES

(317)

(355)

(617)

(659)

NET EARNINGS 

$         13,404

$         13,338

$         18,598

$         20,045

NET EARNINGS PER COMMON SHARE:

   BASIC EARNINGS FROM    CONTINUING OPERATIONS

$             0.60

$             0.60

$             0.84

$             0.91

   DISCONTINUED    OPERATION

(0.01)

(0.02)

(0.03)

(0.03)

   NET EARNINGS PER    COMMON SHARE - BASIC

$             0.59

$             0.58

$             0.81

$             0.88

   DILUTED EARNINGS FROM    CONTINUING OPERATIONS

$             0.59

$             0.59

$             0.83

$             0.90

   DISCONTINUED OPERATION

(0.01)

(0.01)

(0.03)

(0.03)

   NET EARNINGS PER    COMMON SHARE - DILUTED

$             0.58

$             0.58

$             0.80

$             0.87

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

22,872,618

22,867,323

22,870,069

22,787,337

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES

23,104,654

23,196,125

23,111,732

23,438,247

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

THREE MONTHS ENDED

SIX MONTHS ENDED

June 30,

June 30,

2012

2011

2012

2011

(Unaudited)

(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS

GAAP EARNINGS FROM CONTINUING OPERATIONS

$           13,721

$           13,693

$           19,215

$           20,704

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

8

75

82

281

POSTRETIREMENT CURTAILMENT GAIN (NET OF TAX)

-

(2,188)

-

(2,188)

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(157)

(157)

(315)

(315)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS

$            13,572

$            11,423

$            18,982

$            18,482

DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$               0.59

$               0.59

$               0.83

$               0.90

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

-

-

-

0.01

POSTRETIREMENT CURTAILMENT GAIN (NET OF TAX)

-

(0.09)

-

(0.09)

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

-

(0.01)

(0.01)

(0.02)

NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$               0.59

$               0.49

$               0.82

$               0.80

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)

June 30,

December 31,

2012

2011

(Unaudited)

ASSETS

CASH

$               9,242

$            10,871

ACCOUNTS RECEIVABLE, GROSS

165,261

110,824

ALLOWANCE FOR DOUBTFUL ACCOUNTS

7,505

6,709

ACCOUNTS RECEIVABLE, NET

157,756

104,115

INVENTORIES

265,960

248,097

OTHER CURRENT ASSETS

39,071

37,904

TOTAL CURRENT ASSETS

472,029

400,987

PROPERTY, PLANT AND EQUIPMENT, NET

63,994

64,039

GOODWILL AND OTHER INTANGIBLES, NET

74,710

57,842

OTHER ASSETS

25,377

27,854

TOTAL ASSETS

$          636,110

$          550,722

LIABILITIES AND STOCKHOLDERS' EQUITY

NOTES PAYABLE

$            97,000

$            73,000

CURRENT PORTION OF LONG TERM DEBT

114

109

ACCOUNTS PAYABLE

81,262

50,880

ACCRUED CUSTOMER RETURNS

41,461

25,074

OTHER CURRENT LIABILITIES

80,647

79,818

TOTAL CURRENT LIABILITIES

300,484

228,881

LONG-TERM DEBT

132

190

ACCRUED ASBESTOS LIABILITIES

25,990

26,141

OTHER LIABILITIES

22,713

23,557

 TOTAL LIABILITIES 

349,319

278,769

 TOTAL STOCKHOLDERS' EQUITY 

286,791

271,953

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$          636,110

$          550,722

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit

(In thousands)

THREE MONTHS ENDED

SIX MONTHS ENDED

June 30,

June 30,

2012

2011

2012

2011

(unaudited)

(unaudited)

Revenues

Engine Management

$       172,644

$       159,919

$       335,659

$       324,123

Temperature Control

93,036

79,715

138,327

133,794

All Other

3,195

4,371

6,600

6,318

$        268,875

$        244,005

$        480,586

$        464,235

Gross Margin

Engine Management

$         46,277

26.8%

$         40,012

25.0%

$         89,270

26.6%

$         80,016

24.7%

Temperature Control

19,871

21.4%

19,646

24.6%

28,448

20.6%

29,926

22.4%

All Other

3,196

3,515

6,176

6,383

$           69,344

25.8%

$           63,173

25.9%

$         123,894

25.8%

$         116,325

25.1%

Selling, General & Administrative

Engine Management

$         28,340

16.4%

$         26,435

16.5%

$           57,331

17.1%

$           51,257

15.8%

Temperature Control

12,096

13.0%

10,710

13.4%

20,606

14.9%

19,765

14.8%

All Other

6,173

2,871

13,448

9,634

$           46,609

17.3%

$           40,016

16.4%

$           91,385

19.0%

$           80,656

17.4%

Operating Profit

Engine Management

$         17,937

10.4%

$         13,577

8.5%

$           31,939

9.5%

$           28,759

8.9%

Temperature Control

7,775

8.4%

8,935

11.2%

7,842

5.7%

10,161

7.6%

All Other

(2,977)

645

(7,272)

(3,251)

22,735

8.5%

23,157

9.5%

32,509

6.8%

35,669

7.7%

Restructuring & Integration

(13)

0.0%

(125)

-0.1%

(137)

0.0%

(468)

-0.1%

Other Income (Expense), Net

(32)

0.0%

262

0.1%

21

0.0%

531

0.1%

$           22,690

8.4%

$           23,294

9.5%

$           32,393

6.7%

$           35,732

7.7%

SOURCE Standard Motor Products, Inc.



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