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

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.



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