2014

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

NEW YORK, Oct. 31, 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 nine months ended September 30, 2013.

Consolidated net sales for the third quarter of 2013 were $264.2 million, compared to consolidated net sales of $276 million during the comparable quarter in 2012. Earnings from continuing operations for the third quarter of 2013 were $17.7 million or 76 cents per diluted share, compared to $17.4 million or 76 cents per diluted share in the third 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 third quarter of 2013 were $18.3 million or 79 cents per diluted share, compared to $16.8 million or 73 cents per diluted share in the third quarter of 2012.

Consolidated net sales for the nine month period ended September 30, 2013 were $765 million, compared to consolidated net sales of $756.6 million during the comparable period in 2012.  Earnings from continuing operations for the nine month period ended September 30, 2013 were $43.7 million or $1.88 per diluted share, compared to $36.7 million or $1.59 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 nine months ended 2013 and 2012 were $44.3 million or $1.91 per diluted share and $35.7 million or $1.55 per diluted share, respectively.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We achieved an 8% increase in earnings per share for the quarter (excluding non-operational gains and losses), despite the sales decline caused by the weather-related drop in Temperature Control sales. We are now 23% above 2012 in earnings per share for the first nine months.

"The primary reason for the increase is our improvement in gross margin, which is up 2.1 points for the quarter and 2.5 points for the year. We are seeing the benefits of our continuing cost reduction efforts—manufacturing parts we formerly purchased, improved sourcing of finished goods and components, relocating labor intensive operations to low cost areas, and consolidating and integrating our recent acquisitions.

"Engine Management sales were ahead 1.2% for the quarter, and nearly 5% for the year—in line with, or slightly ahead of, industry averages.

"The major shortfall was in Temperature Control sales, which, after adjusting for the CompressorWorks acquisition, are down 10.9% for the quarter and 11.1% year to date. As we have previously discussed, air conditioning sales can vary 20% up or down in a given year, depending on the weather.  2012 was one of the hottest years on record; 2013 one of the coolest.

"We are pleased with the progress we have made in our Temperature Control division. The integration of CompressorWorks was completed on time and within budget. We have combined manufacturing locations, distribution centers, and product lines, and are on track to achieve all planned savings. We believe we are well positioned to take advantage of a more typical summer season.

"In further steps to reduce costs and improve efficiency, we offered a voluntary separation incentive program to certain eligible employees in our sales force. This resulted in an $1.8 million restructuring expense in the quarter with anticipated $1.5 million SG&A savings per year beginning in 2014.

"Cash flow was very strong in the third quarter reflecting a $26 million reduction in inventories that was built up earlier in the year to safeguard our CompressorWorks integration. In the quarter, we were able to reduce debt $36 million to close September 30 with total debt outstanding of $32 million."

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 December 2, 2013 to stockholders of record on November 15, 2013.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, October 31, 2013.  The dial-in number is 866-952-7524 (domestic) or 785-424-1829 (international). The playback number is 800-723-0498 (domestic) or 402-220-2652 (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,



2013


2012


2013


2012



(Unaudited)


(Unaudited)

NET SALES


$    264,162


$    275,975


$    764,996


$    756,561










COST OF SALES


184,081


198,167


541,291


554,859










GROSS PROFIT


80,081


77,808


223,705


201,702










SELLING, GENERAL & ADMINISTRATIVE EXPENSES


50,615


50,937


150,813


142,322

RESTRUCTURING AND INTEGRATION EXPENSES


1,913


642


2,531


779

OTHER INCOME , NET


324


433


766


454










OPERATING INCOME 


27,877


26,662


71,127


59,055










OTHER NON-OPERATING INCOME (EXPENSE), NET


233


-


(27)


(66)










INTEREST EXPENSE


403


702


1,621


2,257










EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


27,707


25,960


69,479


56,732










PROVISION FOR INCOME TAXES


10,021


8,516


25,827


20,073










EARNINGS FROM CONTINUING OPERATIONS


17,686


17,444


43,652


36,659










LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(389)


(604)


(1,138)


(1,221)










NET EARNINGS 


$      17,297


$      16,840


$      42,514


$      35,438























































NET EARNINGS PER COMMON SHARE:


















   BASIC EARNINGS FROM CONTINUING OPERATIONS


$           0.77


$           0.77


$           1.90


$           1.61

   DISCONTINUED OPERATION


(0.02)


(0.03)


(0.05)


(0.06)

   NET EARNINGS PER COMMON SHARE - BASIC


$           0.75


$           0.74


$           1.85


$           1.55



















   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$           0.76


$           0.76


$           1.88


$           1.59

   DISCONTINUED OPERATION


(0.02)


(0.02)


(0.05)


(0.05)

   NET EARNINGS PER COMMON SHARE - DILUTED


$           0.74


$           0.74


$           1.83


$           1.54



















WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,999,832


22,691,878


22,945,424


22,810,238

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


23,239,009


22,877,635


23,179,187


22,999,244

 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit



























(In thousands)








































THREE MONTHS ENDED



NINE MONTHS ENDED




SEPTEMBER 30,



SEPTEMBER 30,




2013



2012



2013



2012




(unaudited)



(unaudited)


Revenues













Engine Management


$ 177,939



$ 175,789



$ 535,498



$ 511,448


Temperature Control


84,840



95,229



224,228



233,556


All Other


1,383



4,957



5,270



11,557




$   264,162



$   275,975



$   764,996



$   756,561















Gross Margin













Engine Management


$   56,654

31.8%


$   51,285

29.2%


$ 162,748

30.4%


$ 140,555

27.5%

Temperature Control


20,496

24.2%


23,156

24.3%


51,824

23.1%


51,604

22.1%

All Other


2,931



3,367



9,133



9,543




$     80,081

30.3%


$     77,808

28.2%


$   223,705

29.2%


$   201,702

26.7%














Selling, General & Administrative













Engine Management


$   30,130

16.9%


$   29,870

17.0%


$     90,305

16.9%


$     87,201

17.0%

Temperature Control


12,994

15.3%


14,099

14.8%


37,767

16.8%


34,705

14.9%

All Other


7,491



6,968



22,741



20,416




$     50,615

19.2%


$     50,937

18.5%


$   150,813

19.7%


$   142,322

18.8%



























Operating Profit













Engine Management


$   26,524

14.9%


$   21,415

12.2%


$     72,443

13.5%


$     53,354

10.4%

Temperature Control


7,502

8.8%


9,057

9.5%


14,057

6.3%


16,899

7.2%

All Other


(4,560)



(3,601)



(13,608)



(10,873)




29,466

11.2%


26,871

9.7%


72,892

9.5%


59,380

7.8%

Restructuring & Integration


(1,913)

-0.7%


(642)

-0.2%


(2,531)

-0.3%


(779)

-0.1%

Other Income, Net


324

0.1%


433

0.2%


766

0.1%


454

0.1%



$     27,877

10.6%


$     26,662

9.7%


$     71,127

9.3%


$     59,055

7.8%

 

 

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,



2013


2012


2013


2012


(Unaudited)

(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS


















GAAP EARNINGS FROM CONTINUING OPERATIONS


$17,686


$17,444


$43,652


$36,659










RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)


1,148


385


1,519


467

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(374)


(774)


(374)


(774)

GAIN FROM SALE OF BUILDINGS (NET OF TAX)


(157)


(301)


(472)


(615)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$18,303


$16,754


$44,325


$35,737



















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$    0.76


$    0.76


$    1.88


$    1.59










RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)


0.05


0.01


0.07


0.02

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(0.01)


(0.03)


(0.02)


(0.03)

GAIN FROM SALE OF BUILDINGS (NET OF TAX)


(0.01)


(0.01)


(0.02)


(0.03)










NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$    0.79


$    0.73


$    1.91


$    1.55

 

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,



2013


2012



(Unaudited)








ASSETS







CASH


$           10,097


$         13,074






ACCOUNTS RECEIVABLE, GROSS


149,000


104,689

ALLOWANCE FOR DOUBTFUL ACCOUNTS


7,021


6,124

ACCOUNTS RECEIVABLE, NET


141,979


98,565






INVENTORIES


269,205


267,468

OTHER CURRENT ASSETS


46,481


39,446






TOTAL CURRENT ASSETS


467,762


418,553






PROPERTY, PLANT AND EQUIPMENT, NET


63,883


64,422

GOODWILL AND OTHER INTANGIBLES, NET


74,221


72,373

OTHER ASSETS


30,025


21,246






TOTAL ASSETS


$         635,891


$       576,594











LIABILITIES AND STOCKHOLDERS' EQUITY












NOTES PAYABLE


$           32,187


$         40,453

CURRENT PORTION OF LONG TERM DEBT


82


120

ACCOUNTS PAYABLE


65,165


62,283

ACCRUED CUSTOMER RETURNS


46,721


29,033

OTHER CURRENT LIABILITIES


98,473


90,283






TOTAL CURRENT LIABILITIES


242,628


222,172






LONG-TERM DEBT


23


75

ACCRUED ASBESTOS LIABILITIES


24,223


25,110

OTHER LIABILITIES


21,728


21,650






 TOTAL LIABILITIES 


288,602


269,007






 TOTAL STOCKHOLDERS' EQUITY 


347,289


307,587






 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$         635,891


$       576,594

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows













(In thousands)













NINE MONTHS ENDED


SEPTEMBER 30,


2013


2012


(Unaudited)





CASH FLOWS FROM OPERATING ACTIVITIES








NET EARNINGS 

$ 42,514


$ 35,438

ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH




PROVIDED BY OPERATING ACTIVITIES:




            DEPRECIATION AND AMORTIZATION

13,203


12,093

            OTHER

9,843


13,519

CHANGE IN ASSETS AND LIABILITIES:




            ACCOUNTS RECEIVABLE

(43,990)


(48,008)

            INVENTORY 

(5,345)


21,082

            ACCOUNTS PAYABLE

(450)


4,957

            OTHER

17,876


23,769

NET CASH PROVIDED BY OPERATING ACTIVTIES

33,651


62,850









CASH FLOWS FROM INVESTING ACTIVITIES








CAPITAL EXPENDITURES

(8,467)


(8,003)

ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(12,760)


(38,594)

OTHER INVESTING ACTIVITIES

(596)


9

NET CASH USED IN INVESTING ACTIVITIES 

(21,823)


(46,588)









CASH FLOWS FROM FINANCING ACTIVITIES








NET CHANGE IN DEBT

(8,356)


(12,817)

PURCHASE OF TREASURY STOCK

(1,672)


(4,999)

DIVIDENDS PAID

(7,566)


(6,162)

OTHER FINANCING ACTIVITIES

3,350


6,339

NET CASH USED IN FINANCING ACTIVITIES

(14,244)


(17,639)









EFFECT OF EXCHANGE RATE CHANGES ON CASH

(561)


1,393

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(2,977)


16

CASH AND CASH EQUIVALENTS at beginning of Period

13,074


10,871

CASH AND CASH EQUIVALENTS at end of Period

$ 10,097


$ 10,887

 

SOURCE Standard Motor Products, Inc.



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