Standard Motor Products, Inc. Announces Second Quarter 2013 Results and a Quarterly Dividend

07 Aug, 2013, 08:30 ET from Standard Motor Products, Inc.

NEW YORK, Aug. 7, 2013 /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, 2013.

Consolidated net sales for the second quarter of 2013 were $270.1 million, compared to consolidated net sales of $268.9 million during the comparable quarter in 2012.  Earnings from continuing operations for the second quarter of 2013 were $16.4 million or 71 cents per diluted share, compared to $13.7 million or 59 cents per diluted share in the second 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 second quarter of 2013 were $16.4 million or 70 cents per diluted share, compared to $13.6 million or 59 cents per diluted share in the second quarter of 2012.

Consolidated net sales for the six month period ended June 30, 2013 were $500.8 million, compared to consolidated net sales of $480.6 million during the comparable period in 2012.  Earnings from continuing operations for the six month period ended June 30, 2013 were $26 million or $1.12 per diluted share, compared to $19.2 million or 83 cents per diluted share in the comparable period 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 six months ended June 30, 2013 and 2012 were $26 million or $1.12 per diluted share and $19 million or 82 cents per diluted share, respectively.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We are pleased with our second quarter results. We continued to show significant improvement in net earnings and earnings per share for the quarter and for six months.

"The primary driver was gross margin, which increased roughly three percentage points for the quarter and for the six months. We are seeing the fruits of our efforts over the past several years – with increased basic manufacturing, continued growth in our low cost manufacturing operations, and savings from consolidating and streamlining our recent acquisitions.

"Regarding sales, our Engine Management division had sales increases for the quarter and  for the six months, in line with, or slightly better than, industry averages. Our one weak spot was Temperature Control sales, which were behind 2012 in the second quarter, including the benefit of the CWI acquisition. The fall off in sales led to a slight decline in Temperature Control operating profit.

"The primary cause for the Temperature Control sales decline was the cool and wet spring, as most of our accounts were well behind the prior year in their "out the door" sales for April and May. In June, however, their sales matched or slightly exceeded the prior year.

"We believe we are also seeing some inventory consolidation, as some of our accounts are combining their Four Seasons and CWI inventories. This is essentially a one-time event.

"In July, certain areas of the country experienced a heat wave. Some of this will be reflected in third quarter volume, but with the season rapidly drawing to a close, many of our accounts will not replace the product that was sold, and instead use this as an opportunity to reduce their inventory going into the winter months.

"Despite the decline in sales, our Temperature Control gross margin increased approximately two percentage points for the quarter and for the six months. We are beginning to see the benefits of consolidating the CWI operations into our facilities in Grapevine, Texas and Reynosa, Mexico.

"As we have said many times, our Temperature Control business is weather dependent, and results can fluctuate in the short term. In the long run, however, we are pleased with the continuing improvement of this business.

"Our cash flow needs normally peak at mid-year due to the seasonality of our business. Including our latest acquisitions, our total debt at the end of June 2013 was $68.5 million, a reduction of $28.8 million from June 2012.

"In sum, despite the drop in sales in Temperature Control, we are satisfied with our second quarter results, both financially and operationally, though, as always, we work for continued improvement."

The Board of Directors has approved payment of a quarterly dividend of eleven cents per share on the common stock outstanding. The dividend will be paid on September 3, 2013 to stockholders of record on August 19, 2013.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, August 7, 2013.  The dial in number is 866-952-1907 (domestic) or 785-424-1826 (international). The playback number is 800-677-6124 (domestic) or 402-220-0664 (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,

2013

2012

2013

2012

(Unaudited)

(Unaudited)

NET SALES

$    270,126

$    268,875

$    500,834

$    480,586

COST OF SALES

192,330

199,531

357,210

356,692

GROSS PROFIT

77,796

69,344

143,624

123,894

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

50,588

46,609

100,198

91,385

RESTRUCTURING AND INTEGRATION EXPENSES

200

13

618

137

OTHER INCOME (EXPENSE) , NET

212

(32)

442

21

OPERATING INCOME 

27,220

22,690

43,250

32,393

OTHER NON-OPERATING EXPENSE, NET

(64)

(24)

(260)

(66)

INTEREST EXPENSE

646

842

1,218

1,555

EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES

26,510

21,824

41,772

30,772

PROVISION FOR INCOME TAXES

10,110

8,103

15,806

11,557

EARNINGS FROM CONTINUING OPERATIONS

16,400

13,721

25,966

19,215

LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES

(357)

(317)

(749)

(617)

NET EARNINGS 

$      16,043

$      13,404

$      25,217

$      18,598

NET EARNINGS PER COMMON SHARE:

   BASIC EARNINGS FROM CONTINUING OPERATIONS

$           0.71

$           0.60

$           1.13

$           0.84

   DISCONTINUED OPERATION

(0.01)

(0.01)

(0.03)

(0.03)

   NET EARNINGS PER COMMON SHARE - BASIC

$           0.70

$           0.59

$           1.10

$           0.81

   DILUTED EARNINGS FROM CONTINUING OPERATIONS

$           0.71

$           0.59

$           1.12

$           0.83

   DISCONTINUED OPERATION

(0.02)

(0.01)

(0.03)

(0.03)

   NET EARNINGS PER COMMON SHARE - DILUTED

$           0.69

$           0.58

$           1.09

$           0.80

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

22,981,337

22,872,618

22,917,769

22,870,069

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES

23,261,118

23,104,654

23,190,091

23,111,732

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit

(In thousands)

THREE MONTHS ENDED

SIX MONTHS ENDED

JUNE 30,

JUNE 30,

2013

2012

2013

2012

(unaudited)

(unaudited)

Revenues

Engine Management

$ 182,050

$ 172,644

$ 357,559

$ 335,659

Temperature Control

86,660

93,036

139,388

138,327

All Other

1,416

3,195

3,887

6,600

$   270,126

$   268,875

$   500,834

$   480,586

Gross Margin

Engine Management

$   54,380

29.9%

$   46,277

26.8%

$ 106,094

29.7%

$   89,270

26.6%

Temperature Control

20,342

23.5%

19,871

21.4%

31,328

22.5%

28,448

20.6%

All Other

3,074

3,196

6,202

6,176

$     77,796

28.8%

$     69,344

25.8%

$   143,624

28.7%

$   123,894

25.8%

Selling, General & Administrative

Engine Management

$   29,614

16.3%

$   28,340

16.4%

$     60,175

16.8%

$     57,331

17.1%

Temperature Control

13,414

15.5%

12,096

13.0%

24,773

17.8%

20,606

14.9%

All Other

7,560

6,173

15,250

13,448

$     50,588

18.7%

$     46,609

17.3%

$   100,198

20.0%

$     91,385

19.0%

Operating Profit

Engine Management

$   24,766

13.6%

$   17,937

10.4%

$     45,919

12.8%

$     31,939

9.5%

Temperature Control

6,928

8.0%

7,775

8.4%

6,555

4.7%

7,842

5.7%

All Other

(4,486)

(2,977)

(9,048)

(7,272)

27,208

10.1%

22,735

8.5%

43,426

8.7%

32,509

6.8%

Restructuring & Integration

(200)

-0.1%

(13)

0.0%

(618)

-0.1%

(137)

0.0%

Other Income (Expense), Net

212

0.1%

(32)

0.0%

442

0.1%

21

0.0%

$     27,220

10.1%

$     22,690

8.4%

$     43,250

8.6%

$     32,393

6.7%

 

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,

2013

2012

2013

2012

(Unaudited)

(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS

GAAP EARNINGS FROM CONTINUING OPERATIONS

$16,400

$13,721

$25,966

$19,215

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

120

8

371

82

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(157)

(157)

(315)

(315)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS

$16,363

$13,572

$26,022

$18,982

DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$    0.71

$    0.59

$    1.12

$    0.83

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

-

-

0.01

-

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(0.01)

-

(0.01)

(0.01)

NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$    0.70

$    0.59

$    1.12

$    0.82

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,

2013

2012

(Unaudited)

ASSETS

CASH

$    12,275

$         13,074

ACCOUNTS RECEIVABLE, GROSS

158,796

104,689

ALLOWANCE FOR DOUBTFUL ACCOUNTS

7,007

6,124

ACCOUNTS RECEIVABLE, NET

151,789

98,565

INVENTORIES

296,815

267,468

OTHER CURRENT ASSETS

44,612

39,446

TOTAL CURRENT ASSETS

505,491

418,553

PROPERTY, PLANT AND EQUIPMENT, NET

64,119

64,422

GOODWILL AND OTHER INTANGIBLES, NET

75,127

72,373

OTHER ASSETS

28,556

21,246

TOTAL ASSETS

$  673,293

$       576,594

LIABILITIES AND STOCKHOLDERS' EQUITY

NOTES PAYABLE

$    68,334

$         40,453

CURRENT PORTION OF LONG TERM DEBT

103

120

ACCOUNTS PAYABLE

90,157

62,283

ACCRUED CUSTOMER RETURNS

44,977

29,033

OTHER CURRENT LIABILITIES

93,035

90,283

TOTAL CURRENT LIABILITIES

296,606

222,172

LONG-TERM DEBT

30

75

ACCRUED ASBESTOS LIABILITIES

24,242

25,110

OTHER LIABILITIES

21,786

21,650

 TOTAL LIABILITIES 

342,664

269,007

 TOTAL STOCKHOLDERS' EQUITY 

330,629

307,587

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$  673,293

$       576,594

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

SIX MONTHS ENDED

JUNE 30,

2013

2012

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

NET EARNINGS 

$ 25,217

$ 18,598

ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH

PROVIDED BY (USED IN) OPERATING ACTIVITIES:

        DEPRECIATION AND AMORTIZATION

8,545

7,898

        OTHER

8,173

9,216

CHANGE IN ASSETS AND LIABILITIES:

        ACCOUNTS RECEIVABLE

(53,723)

(44,472)

        INVENTORY 

(31,885)

3,300

        ACCOUNTS PAYABLE

16,550

18,886

        OTHER

14,724

7,757

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVTIES

(12,399)

21,183

CASH FLOWS FROM INVESTING ACTIVITIES

CAPITAL EXPENDITURES

(5,551)

(5,296)

ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(12,760)

(38,594)

OTHER INVESTING ACTIVITIES

(596)

6

NET CASH USED IN INVESTING ACTIVITIES 

(18,907)

(43,884)

CASH FLOWS FROM FINANCING ACTIVITIES

NET CHANGE IN DEBT

27,819

23,947

PURCHASE OF TREASURY STOCK

(1,151)

(4,999)

DIVIDENDS PAID

(5,037)

(4,121)

OTHER FINANCING ACTIVITIES

10,271

6,077

NET CASH PROVIDED BY FINANCING ACTIVITIES

31,902

20,904

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(1,395)

168

NET DECREASE IN CASH AND CASH EQUIVALENTS

(799)

(1,629)

CASH AND CASH EQUIVALENTS at beginning of year

13,074

10,871

CASH AND CASH EQUIVALENTS at end of year

$ 12,275

$   9,242

SOURCE Standard Motor Products, Inc.