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

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

NEW YORK, Oct. 30, 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 nine months ended September 30, 2012.

Consolidated net sales for the third quarter of 2012 were $276 million, compared to consolidated net sales of $236.2 million during the comparable quarter in 2011. Earnings from continuing operations for the third quarter of 2012 were $17.4 million or 76 cents per diluted share, compared to $14.1 million or 61 cents per diluted share in the third quarter 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 third quarter of 2012 were $16.8 million or 73 cents, compared to $13.7 million or 59 cents per diluted share in the third quarter of 2011.

Consolidated net sales for the nine month period ended September 30, 2012 were $756.6 million, compared to consolidated net sales of $700.5 million during the comparable period in 2011.  Earnings from continuing operations for the nine month period ended September 30, 2012 were $36.7 million or $1.59 per diluted share, compared to $34.8 million or $1.51 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 nine months ended 2012 and 2011 were $35.7 million or $1.55 per diluted share and $32.1 million or $1.39 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 third quarter results. Sales were ahead of 2011 by nearly 17% with the bulk of the increase coming from our recent acquisitions. Excluding the acquisitions, our Temperature Control sales were 3% ahead of the prior year, despite the loss of business from a major account, and Engine Management sales were slightly ahead of 2011.

"We continue to work on margin improvement. Our gross margin is up nearly a full point, both for the quarter and year to date, as we are beginning to achieve product cost savings from our recent acquisitions, as we relocate additional manufacturing hours to low cost areas.

"Our three recent acquisitions—BLD, Forecast Trading, and CompressorWorks—are all doing well. Sales are exceeding expectations; all are profitable; and the integration process is well underway. We look for further savings in 2013.

"The result of our operational improvements and the benefits from our recent acquisitions have driven our operating earnings per share from continuing operations up roughly 24% in the quarter and 12% year-to-date.

"Cash flow also remains strong. During 2012, cash flow from operations permitted us to complete the CompressorWorks acquisition for $38.6 million, repurchase $5 million of our common stock and also pay down $12.8 million in debt. At the end of the third quarter of 2012, total debt was only $60.5 million, after completing the three acquisitions discussed above."

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 December 3, 2012 to stockholders of record on November 15, 2012.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, October 30, 2012.  The dial-in number is 866-952-7523 (domestic) or 785-424-1828 (international). The playback number is 800-753-8546 (domestic) or 402-220-0685 (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

NINE MONTHS ENDED

SEPTEMBER 30,

SEPTEMBER 30,

2012

2011

2012

2011

(Unaudited)

(Unaudited)

NET SALES

$    275,975

$    236,220

$    756,561

$    700,455

COST OF SALES

198,167

171,732

554,859

519,642

GROSS PROFIT

77,808

64,488

201,702

180,813

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

50,937

41,680

142,322

122,336

RESTRUCTURING AND INTEGRATION EXPENSES

642

275

779

743

OTHER INCOME, NET

433

258

454

789

OPERATING INCOME 

26,662

22,791

59,055

58,523

OTHER NON-OPERATING INCOME (EXPENSE), NET

-

230

(66)

673

INTEREST EXPENSE

702

757

2,257

3,159

EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES

25,960

22,264

56,732

56,037

PROVISION FOR INCOME TAXES

8,516

8,164

20,073

21,233

EARNINGS FROM CONTINUING OPERATIONS

17,444

14,100

36,659

34,804

LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES

(604)

(1,055)

(1,221)

(1,714)

NET EARNINGS 

$      16,840

$      13,045

$      35,438

$      33,090

NET EARNINGS PER COMMON SHARE:

   BASIC EARNINGS FROM CONTINUING OPERATIONS

$           0.77

$           0.62

$           1.61

$           1.53

   DISCONTINUED OPERATION

(0.03)

(0.05)

(0.06)

(0.08)

   NET EARNINGS PER COMMON SHARE - BASIC

$           0.74

$           0.57

$           1.55

$           1.45

   DILUTED EARNINGS FROM CONTINUING OPERATIONS

$           0.76

$           0.61

$           1.59

$           1.51

   DISCONTINUED OPERATION

(0.02)

(0.04)

(0.05)

(0.08)

   NET EARNINGS PER COMMON SHARE - DILUTED

$           0.74

$           0.57

$           1.54

$           1.43

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

22,691,878

22,863,048

22,810,238

22,812,851

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES

22,877,635

23,042,981

22,999,244

23,299,363

 

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

THREE MONTHS ENDED

NINE MONTHS ENDED

September 30,

September 30,

2012

2011

2012

2011

(Unaudited)

(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS

GAAP EARNINGS FROM CONTINUING OPERATIONS

$17,444

$14,100

$36,659

$34,804

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

385

165

467

446

POSTRETIREMENT CURTAILMENT GAIN (NET OF TAX)

-

-

-

(2,188)

REVERSAL OF LT TAX LIABILITY

-

(454)

-

(454)

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD

(774)

-

(774)

-

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(301)

(157)

(615)

(472)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS

$16,754

$13,654

$35,737

$32,136

DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$    0.76

$    0.61

$    1.59

$    1.51

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

0.01

-

0.02

0.02

POSTRETIREMENT CURTAILMENT GAIN (NET OF TAX)

-

-

-

(0.10)

REVERSAL OF LT TAX LIABILITY

-

(0.02)

-

(0.02)

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD

(0.03)

-

(0.03)

-

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(0.01)

-

(0.03)

(0.02)

NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

$    0.73

$    0.59

$    1.55

$    1.39

 

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)

September  30,

December 31,

2012

2011

(Unaudited)

ASSETS

CASH

$           10,887

$         10,871

ACCOUNTS RECEIVABLE, GROSS

169,059

110,824

ALLOWANCE FOR DOUBTFUL ACCOUNTS

7,711

6,709

ACCOUNTS RECEIVABLE, NET

161,348

104,115

INVENTORIES

246,291

248,097

OTHER CURRENT ASSETS

38,845

37,904

TOTAL CURRENT ASSETS

457,371

400,987

PROPERTY, PLANT AND EQUIPMENT, NET

64,049

64,039

GOODWILL AND OTHER INTANGIBLES, NET

73,320

57,842

OTHER ASSETS

23,920

27,854

TOTAL ASSETS

$         618,660

$       550,722

LIABILITIES AND STOCKHOLDERS' EQUITY

NOTES PAYABLE

$           60,260

$         73,000

CURRENT PORTION OF LONG TERM DEBT

117

109

ACCOUNTS PAYABLE

67,335

50,880

ACCRUED CUSTOMER RETURNS

44,439

25,074

OTHER CURRENT LIABILITIES

94,925

79,818

TOTAL CURRENT LIABILITIES

267,076

228,881

LONG-TERM DEBT

105

190

ACCRUED ASBESTOS LIABILITIES

25,646

26,141

OTHER LIABILITIES

22,465

23,557

 TOTAL LIABILITIES 

315,292

278,769

 TOTAL STOCKHOLDERS' EQUITY 

303,368

271,953

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$         618,660

$       550,722

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit

(In thousands)

THREE MONTHS ENDED

NINE MONTHS ENDED

September 30,

September 30,

2012

2011

2012

2011

(unaudited)

(unaudited)

Revenues

Engine Management

$ 175,789

$ 165,182

$ 511,448

$ 489,305

Temperature Control

95,229

68,148

233,556

201,942

All Other

4,957

2,890

11,557

9,208

$   275,975

$   236,220

$   756,561

$   700,455

Gross Margin

Engine Management

$   51,285

29.2%

$   43,834

26.5%

$ 140,555

27.5%

$ 123,850

25.3%

Temperature Control

23,156

24.3%

17,343

25.4%

51,604

22.1%

47,269

23.4%

All Other

3,367

3,311

9,543

9,694

$     77,808

28.2%

$     64,488

27.3%

$   201,702

26.7%

$   180,813

25.8%

Selling, General & Administrative

Engine Management

$   29,870

17.0%

$   25,226

15.3%

$     87,201

17.0%

$     76,483

15.6%

Temperature Control

14,099

14.8%

9,557

14.0%

34,705

14.9%

29,322

14.5%

All Other

6,968

6,897

20,416

16,531

$     50,937

18.5%

$     41,680

17.6%

$   142,322

18.8%

$   122,336

17.5%

Operating Profit

Engine Management

$   21,415

12.2%

$   18,608

11.3%

$     53,354

10.4%

$     47,367

9.7%

Temperature Control

9,057

9.5%

7,786

11.4%

16,899

7.2%

17,947

8.9%

All Other

(3,601)

(3,586)

(10,873)

(6,837)

26,871

9.7%

22,808

9.7%

59,380

7.8%

58,477

8.3%

Restructuring & Integration

(642)

-0.2%

(275)

-0.1%

(779)

-0.1%

(743)

-0.1%

Other Income, Net

433

0.2%

258

0.1%

454

0.1%

789

0.1%

$     26,662

9.7%

$     22,791

9.6%

$     59,055

7.8%

$     58,523

8.4%

 

SOURCE Standard Motor Products, Inc.