Standard Motor Products, Inc. Announces Fourth Quarter 2010 Results

Mar 03, 2011, 08:30 ET from Standard Motor Products, Inc.

NEW YORK, March 3, 2011 /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 for the year ended December 31, 2010.

Consolidated net sales for the fourth quarter of 2010 were $173 million, compared to consolidated net sales of $160.1 million during the comparable quarter in 2009.  Earnings from continuing operations for the fourth quarter of 2010 were $2.7 million or 12 cents per diluted share, compared to a loss of $5.2 million or 25 cents per diluted share in the fourth quarter of 2009. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and Non-GAAP measures, earnings from continuing operations for the fourth quarter of 2010 were $2.6 million or 11 cents, compared to $398 thousand or 2 cents per diluted share in the fourth quarter of 2009.

Consolidated net sales for 2010 were $810.9 million, compared to consolidated net sales of $735.4 million in 2009.  Earnings from continuing operations for 2010 were $24.7 million or $1.09 per diluted share, compared to $5.9 million or 31 cents per diluted share in 2009.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and Non-GAAP measures, earnings from continuing operations for 2010 and 2009 were $24.2 million or $1.07 per diluted share and $13.5 million or 70 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 to see that our strong results continued through the fourth quarter. We achieved a sales increase of roughly 8% for the quarter and 10% for the year. Adjusting for the sale of our European distribution business, in November 2009, the sales increases were 11.9% for the quarter and 14.4% for the year.

"As has been well documented, the entire aftermarket has experienced solid growth, aided by an ageing car population and the closing of car dealerships. We also benefited from a hot summer for our Temperature Control business, and growth in the wire business acquired from Federal Mogul.

"Our earnings grew at an even faster rate, with Non-GAAP earnings per share from continuing operations going from 70 cents to $1.07, as a result of the sales increase, plus the benefits of a multi-year effort in cost reduction. A major component of the improvement was a year over year increase in gross margin from 24.1% to 25.6%.

"From a cash flow perspective, we reduced debt by $10 million, from $76 million to $66 million, despite a rise in inventories to support the sales growth. In January we announced an increase in our quarterly dividend, from 5 cents to 7 cents per share.

"In all, we are pleased with 2010 and look forward to 2011."

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, March 3, 2011.  The dial in number is 800-895-0231 (domestic) or 785-424-1054 (international). The playback number is 800-283-8520 (domestic) or 402-220-0870 (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

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

2010

2009

2010

2009

(Unaudited)

(Unaudited)

NET SALES

$    172,971

$    160,127

$    810,910

$    735,424

COST OF SALES

127,586

120,005

603,304

558,200

GROSS PROFIT

45,385

40,122

207,606

177,224

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

38,974

37,035

159,433

146,642

RESTRUCTURING AND INTEGRATION EXPENSES

72

1,709

3,502

7,386

OTHER INCOME (EXPENSE), NET

170

(6,413)

2,122

(5,565)

OPERATING INCOME (LOSS)

6,509

(5,035)

46,793

17,631

OTHER NON-OPERATING INCOME (EXPENSE), NET

(55)

122

425

3,584

INTEREST EXPENSE

1,417

1,990

7,127

9,215

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES

5,037

(6,903)

40,091

12,000

PROVISION FOR (BENEFIT FROM) INCOME TAXES

2,362

(1,660)

15,391

6,094

EARNINGS (LOSS) FROM CONTINUING OPERATIONS

2,675

(5,243)

24,700

5,906

DISCONTINUED OPERATION, NET OF INCOME TAXES

(431)

(202)

(2,740)

(2,423)

NET EARNINGS (LOSS)

$        2,244

$      (5,445)

$      21,960

$        3,483

NET EARNINGS (LOSS) PER COMMON SHARE:

  BASIC EARNINGS (LOSS) FROM CONTINUING OPERATIONS

$          0.12

$        (0.25)

$          1.10

$          0.31

  DISCONTINUED OPERATION

(0.02)

(0.01)

(0.13)

(0.13)

  NET EARNINGS (LOSS) PER COMMON SHARE - BASIC

$          0.10

$        (0.26)

$          0.97

$          0.18

  DILUTED EARNINGS (LOSS) FROM CONTINUING OPERATIONS

$          0.12

$        (0.25)

$          1.09

$          0.31

  DISCONTINUED OPERATION

(0.02)

(0.01)

(0.12)

(0.13)

  NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED

$          0.10

$        (0.26)

$          0.97

$          0.18

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

22,642,171

21,034,701

22,556,858

19,340,672

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES

22,741,686

21,109,573

22,634,062

19,388,771

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

December 31,

December 31,

2010

2009

2010

2009

(Unaudited)

(Unaudited)

EARNINGS (LOSS) FROM CONTINUING OPERATIONS

GAAP EARNINGS (LOSS) FROM CONTINUING OPERATIONS

$ 2,675

$ (5,243)

24,700

5,906

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

43

1,026

2,101

4,897

LOSS FROM EUROPE DIVESTITURE (NET OF TAX)

-

4,772

47

4,772

GAIN FROM SALE OF PREFERRED STOCK INVESTMENT (NET OF TAX)

-

-

-

(1,402)

REVERSAL OF LT TAX LIABILITY

-

-

(1,084)

-

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(157)

(157)

(1,588)

(629)

GAIN FROM DEBENTURE REPURCHASE (NET OF TAX)

-

-

-

(24)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS

$ 2,561

$     398

$ 24,176

$ 13,520

DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS

GAAP DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS

0.12

$   (0.25)

1.09

$     0.31

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)

-

0.05

0.09

0.25

LOSS FROM EUROPE DIVESTITURE (NET OF TAX)

-

0.23

-

0.24

GAIN FROM SALE OF PREFERRED STOCK INVESTMENT (NET OF TAX)

-

-

-

(0.07)

REVERSAL OF LT TAX LIABILITY

-

-

(0.04)

-

GAIN FROM SALE OF BUILDINGS (NET OF TAX)

(0.01)

(0.01)

(0.07)

(0.03)

GAIN FROM DEBENTURE REPURCHASE (NET OF TAX)

-

-

-

-

NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

0.11

$    0.02

1.07

$     0.70

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)

December 31,

December 31,

2010

2009

(Unaudited)

ASSETS

CASH

$        12,135

$        10,618

ACCOUNTS RECEIVABLE, GROSS

111,765

131,785

ALLOWANCES FOR DISCOUNTS AND DOUBTFUL ACCOUNTS

6,779

6,962

ACCOUNTS RECEIVABLE, NET

104,986

124,823

INVENTORIES

241,158

199,752

ASSETS HELD FOR SALE

216

1,405

OTHER CURRENT ASSETS

26,211

27,616

TOTAL CURRENT ASSETS

384,706

364,214

PROPERTY, PLANT AND EQUIPMENT, NET

60,666

61,478

GOODWILL AND OTHER INTANGIBLES, NET

12,487

13,805

OTHER ASSETS

34,942

44,962

TOTAL ASSETS

$      492,801

$      484,459

LIABILITIES AND STOCKHOLDERS' EQUITY

NOTES PAYABLE

$        52,887

$        58,430

CURRENT PORTION OF LONG TERM DEBT

12,402

67

ACCOUNTS PAYABLE

49,919

54,381

ACCRUED CUSTOMER RETURNS

23,207

20,442

OTHER CURRENT LIABILITIES

76,416

71,303

TOTAL CURRENT LIABILITIES

214,831

204,623

LONG-TERM DEBT

307

12,569

DEBT TO RELATED PARTIES

-

5,339

ACCRUED ASBESTOS LIABILITIES

24,792

24,874

OTHER LIABILITIES

42,988

43,176

TOTAL LIABILITIES

282,918

290,581

TOTAL STOCKHOLDERS' EQUITY

209,883

193,878

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$      492,801

$      484,459

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit

(In thousands)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

2010

2009

2010

2009

(unaudited)

(unaudited)

Revenues

Engine Management

$ 133,844

$ 122,165

$ 577,333

$ 506,435

Temperature Control

36,372

31,303

222,086

196,729

Europe

-

5,487

-

26,746

All Other

2,755

1,172

11,491

5,514

$ 172,971

$ 160,127

$ 810,910

$ 735,424

Gross Margin

Engine Management

$   33,683

25.2%

$   28,466

23.3%

$ 144,090

25.0%

$ 122,838

24.3%

Temperature Control

8,176

22.5%

7,912

25.3%

51,293

23.1%

38,677

19.7%

Europe

-

1,496

27.3%

-

6,997

26.2%

All Other

3,526

2,248

12,223

8,712

$   45,385

26.2%

$   40,122

25.1%

$ 207,606

25.6%

$ 177,224

24.1%

Selling, General & Administrative

Engine Management

$   24,808

18.5%

$   23,817

19.3%

$   99,713

17.3%

$   90,543

17.8%

Temperature Control

7,916

21.8%

6,976

22.3%

36,625

16.5%

31,014

15.8%

Europe

-

1,121

20.4%

-

6,187

23.1%

All Other

6,250

5,121

23,095

18,898

$   38,974

22.5%

$   37,035

23.1%

$ 159,433

19.7%

$ 146,642

19.9%

Operating Profit

Engine Management

$     8,875

24.4%

$     4,649

3.8%

$   44,377

7.7%

$   32,295

6.4%

Temperature Control

260

0.7%

936

3.0%

14,668

6.6%

7,663

3.9%

Europe

-

375

6.8%

-

810

3.0%

All Other

(2,724)

(2,873)

(10,872)

(10,186)

6,411

3.7%

3,087

1.9%

48,173

5.9%

30,582

4.2%

Restructuring & Integration

(72)

0.0%

(1,709)

-1.1%

(3,502)

-0.4%

(7,386)

-1.0%

Other Income (Expense), Net

170

0.1%

(6,413)

-4.0%

2,122

0.3%

(5,565)

-0.8%

$     6,509

3.8%

$   (5,035)

-3.1%

$   46,793

5.8%

$   17,631

2.4%

SOURCE Standard Motor Products, Inc.