Standard Motor Products, Inc. Announces First Quarter 2019 Results and a Quarterly Dividend

NEW YORK, April 30, 2019 /PRNewswire/ -- Standard Motor Products, Inc. SMP, an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months ending March 31, 2019.

(PRNewsfoto/Standard Motor Products, Inc.)

Consolidated net sales for the first quarter of 2019 were $283.8 million, compared to consolidated net sales of $261.8 million during the comparable quarter in 2018. Earnings from continuing operations for the first quarter of 2019 were $13.1 million or 57 cents per diluted share, compared to $8.6 million or 37 cents per diluted share in the first quarter of 2018. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the first quarter of 2019 were $13.1 million or 57 cents per diluted share, compared to $10.5 million or  46 cents per diluted share in the first quarter of 2018.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are pleased with our first quarter, showing gains in sales and earnings, with strong performance in both of our operating divisions.

"Engine Management sales were up 6.9%. The wire and cable portion was down 3.3%. The non-wire portion of engine management was up 9.3%, benefitting from pipeline orders, the pass-through of tariff costs, an uptick in OE business, and a general improvement in market conditions. Meanwhile, our customer POS remains in the low single digits, which tends to be a better indicator of long term trends.

"Engine Management gross margin was down 30 basis points, attributable to the tariffs being passed through to customers at our cost. We are pleased to announce that the expenses related to the integration of the General Cable wire business are now largely behind us.

"As expected, our Temperature Control sales rebounded nicely, up 14.4%. While a portion of this was attributable to tariff pass-through, the majority was the result of strong pre-season orders as customers rebuilt their shelf inventory after a strong 2018 selling season. That said, while we are obviously pleased with the quarter, the year will still depend on what happens in the summer months.

"Temperature Control gross margin improved 80 basis points, and, as with Engine Management, were dampened due to tariffs being passed through at our cost. As previously discussed, within SG&A, we are anticipating improvements in our distribution expense as we fully implement our new warehouse automation.

"Finally, as previously announced, on April 1st we completed the acquisition of the Pollak business of Stoneridge, Inc.  Although we are still in our first month, we are pleased with what we have seen, and believe it will be an excellent fit for SMP. We will be relocating the acquired production lines to existing facilities over the course of the next year, and expect significant savings once integrated into SMP. In addition, we see future potential as we increase our presence in the heavy duty and commercial vehicle markets."

The Board of Directors has approved payment of a quarterly dividend of 23 cents per share on the common stock outstanding. The dividend will be paid on June 3, 2019 to stockholders of record on May 15, 2019.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, April 30, 2019.  The dial-in number is 877-876-9176 (domestic) or 785-424-1670 (international). The playback number is 800-925-9416 (domestic) or 402-220-5387 (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







MARCH 31,







2019





2018







(Unaudited)



NET SALES



$       283,766





$       261,826

















COST OF SALES



205,803





189,237

















GROSS PROFIT



77,963





72,589

















SELLING, GENERAL & ADMINISTRATIVE EXPENSES



60,000





57,717



RESTRUCTURING AND INTEGRATION EXPENSES



-





2,836



OTHER INCOME (EXPENSE), NET



(6)





271

















OPERATING INCOME 



17,957





12,307

















OTHER NON-OPERATING INCOME (EXPENSE), NET



646





(31)

















INTEREST EXPENSE



1,089





632

















EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES



17,514





11,644

















PROVISION FOR INCOME TAXES



4,410





3,047

















EARNINGS FROM CONTINUING OPERATIONS



13,104





8,597

















LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES



(888)





(608)

















NET EARNINGS 



$         12,216





$           7,989























































































NET EARNINGS PER COMMON SHARE:



























   BASIC EARNINGS FROM CONTINUING OPERATIONS



$             0.58





$             0.38



   DISCONTINUED OPERATION



(0.04)





(0.02)



   NET EARNINGS PER COMMON SHARE - BASIC



$             0.54





$             0.36































   DILUTED EARNINGS FROM CONTINUING OPERATIONS



$             0.57





$             0.37



   DISCONTINUED OPERATION



(0.04)





(0.02)



   NET EARNINGS PER COMMON SHARE - DILUTED



$             0.53





$             0.35































WEIGHTED AVERAGE NUMBER OF COMMON SHARES



22,421,795





22,498,510



WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES



22,905,364





22,967,281



 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income





























(In thousands)













































THREE MONTHS ENDED







MARCH 31,







2019





2018







(Unaudited)



Revenues













Ignition, Emission Control, Fuel & Safety













   Related System Products



$       176,061





$       161,077



Wire and Cable



37,128





38,411



        Engine Management



213,189





199,488

















Compressors



39,811





29,898



Other Climate Control Parts



29,113





30,333



        Temperature Control



68,924





60,231

















All Other



1,653





2,107



        Revenues



$         283,766





$         261,826

















Gross Margin













Engine Management



$         59,693

28.0%



$         56,470

28.3%

Temperature Control



16,191

23.5%



13,667

22.7%

All Other



2,079





2,452



        Gross Margin



$           77,963

27.5%



$           72,589

27.7%















Selling, General & Administrative













Engine Management



$         37,343

17.5%



$           36,264

18.2%

Temperature Control



14,141

20.5%



12,829

21.3%

All Other



8,516





8,624



        Selling, General & Administrative



$           60,000

21.1%



$           57,717

22.0%





























Operating Income













Engine Management



$         22,350

10.5%



$           20,206

10.1%

Temperature Control



2,050

3.0%



838

1.4%

All Other



(6,437)





(6,172)



        Subtotal



17,963

6.3%



14,872

5.7%

Restructuring & Integration



-

0.0%



(2,836)

-1.1%

Other Income (Expense), Net



(6)

0.0%



271

0.1%

        Operating Income



$           17,957

6.3%



$           12,307

4.7%

 

 

STANDARD MOTOR PRODUCTS, INC.



Reconciliation of GAAP and Non-GAAP Measures



























(In thousands, except per share amounts)















THREE MONTHS ENDED







MARCH 31,







2019



2018





(Unaudited)



EARNINGS FROM CONTINUING OPERATIONS























GAAP EARNINGS FROM CONTINUING OPERATIONS



$                  13,104



$                    8,597















RESTRUCTURING AND INTEGRATION EXPENSES



-



2,836



GAIN FROM SALE OF BUILDINGS



-



(218)



INCOME TAX EFFECT RELATED TO RECONCILING ITEMS



-



(681)



NON-GAAP EARNINGS FROM CONTINUING OPERATIONS



$                  13,104



$                  10,534



























DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS























GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS



$                     0.57



$                     0.37















RESTRUCTURING AND INTEGRATION EXPENSES



-



0.12



GAIN FROM SALE OF BUILDINGS



-



(0.01)



INCOME TAX EFFECT RELATED TO RECONCILING ITEMS



-



(0.02)















NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS



$                     0.57



$                     0.46



























OPERATING INCOME























GAAP OPERATING INCOME



$                  17,957



$                  12,307















RESTRUCTURING AND INTEGRATION EXPENSES



-



2,836



OTHER (INCOME) EXPENSE, NET



6



(271)















NON-GAAP OPERATING INCOME



$                  17,963



$                  14,872







































MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS, AND OPERATING INCOME, EACH OF WHICH ARE NON-GAAP MEASUREMENTS AND ARE ADJUSTED FOR SPECIAL ITEMS, 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)













































March 31,







December  31,





2019







2018





(Unaudited)























ASSETS















CASH



$             11,746







$             11,138















ACCOUNTS RECEIVABLE, GROSS



180,807







163,222

ALLOWANCE FOR DOUBTFUL ACCOUNTS



6,643







5,687

ACCOUNTS RECEIVABLE, NET



174,164







157,535















INVENTORIES



365,251







349,811

UNRETURNED CUSTOMER INVENTORY



19,784







20,484

OTHER CURRENT ASSETS



9,412







7,256















TOTAL CURRENT ASSETS



580,357







546,224















PROPERTY, PLANT AND EQUIPMENT, NET



88,850







90,754

OPERATING LEASE RIGHT-OF-USE ASSETS



37,301







-

GOODWILL



67,370







67,321

OTHER INTANGIBLES, NET



46,581







48,411

DEFERRED INCOME TAXES



41,126







42,334

INVESTMENT IN UNCONSOLIDATED AFFILIATES



33,703







32,469

OTHER ASSETS



17,446







15,619















TOTAL ASSETS



$           912,734







$           843,132





























LIABILITIES AND STOCKHOLDERS' EQUITY





























NOTES PAYABLE



$             78,717







$             43,689

CURRENT PORTION OF OTHER DEBT



5,023







5,377

ACCOUNTS PAYABLE



96,878







94,357

ACCRUED CUSTOMER RETURNS



55,318







57,433

ACCRUED CORE LIABILITY



28,260







31,263

OTHER CURRENT LIABILITIES



81,374







80,467















TOTAL CURRENT LIABILITIES



345,570







312,586















OTHER LONG-TERM DEBT



161







153

NONCURRENT OPERATING LEASE LIABILITIES



30,130







-

ACCRUED ASBESTOS LIABILITIES



43,837







45,117

OTHER LIABILITIES



19,996







18,075















 TOTAL LIABILITIES 



439,694







375,931















 TOTAL STOCKHOLDERS' EQUITY 



473,040







467,201















 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 



$           912,734







$           843,132

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows







































(In thousands)





































THREE MONTHS ENDED





MARCH 31,





2019





2018





(Unaudited)















CASH FLOWS FROM OPERATING ACTIVITIES























NET EARNINGS 

$        12,216





$           7,989



ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH











USED IN OPERATING ACTIVITIES:











DEPRECIATION AND AMORTIZATION

6,178





6,016



OTHER

5,303





4,459



CHANGE IN ASSETS AND LIABILITIES:











ACCOUNTS RECEIVABLE

(22,252)





(20,367)



INVENTORY 

(14,656)





(3,390)



ACCOUNTS PAYABLE

1,181





10,674



PREPAID EXPENSES AND OTHER CURRENT ASSETS

(282)





1,559



SUNDRY PAYABLES AND ACCRUED EXPENSES 

(12,911)





(12,997)



OTHER

(1,503)





(95)



NET CASH USED IN OPERATING ACTIVITIES

(26,726)





(6,152)



























CASH FLOWS FROM INVESTING ACTIVITIES























ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

-





(6,472)



NET PROCEEDS FROM SALE OF FACILITY

4,801





-



CAPITAL EXPENDITURES

(3,084)





(6,903)



OTHER INVESTING ACTIVITIES

29





-



NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 

1,746





(13,375)



























CASH FLOWS FROM FINANCING ACTIVITIES























NET CHANGE IN DEBT

34,758





34,054



PURCHASE OF TREASURY STOCK

(5,835)





(3,221)



DIVIDENDS PAID

(5,159)





(4,721)



OTHER FINANCING ACTIVITIES

1,409





1,885



NET CASH PROVIDED BY FINANCING ACTIVITIES

25,173





27,997



























EFFECT OF EXCHANGE RATE CHANGES ON CASH

415





433



NET INCREASE IN CASH AND CASH EQUIVALENTS

608





8,903



CASH AND CASH EQUIVALENTS at beginning of period

11,138





17,323



CASH AND CASH EQUIVALENTS at end of period

$        11,746





$        26,226

 

 

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SOURCE Standard Motor Products, Inc.

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