2014

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

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.



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