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

NEW YORK, July 25, 2019 /PRNewswire/ -- Standard Motor Products, Inc. SMP, an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and six months ending June 30, 2019.

Consolidated net sales for the second quarter of 2019 were $305.2 million, compared to consolidated net sales of $286.6 million during the comparable quarter in 2018. Earnings from continuing operations for the second quarter of 2019 were $20.6 million or 90 cents per diluted share, compared to $16.8 million or 73 cents per diluted share in the second 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 second quarter of 2019 were $21 million or 92 cents per diluted share, compared to $17 million or 74 cents per diluted share in the second quarter of 2018.

Consolidated net sales for the six month period ended June 30, 2019, were $588.9 million, compared to consolidated net sales of $548.5 million during the comparable period in 2018.  Earnings from continuing operations for the six month period ended June 30, 2019, were $33.7 million or $1.47 per diluted share, compared to $25.4 million or $1.11 per diluted share in the comparable period 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 six months ended June 30, 2019, and 2018 were $34.1 million or $1.49 per diluted share and $27.5 million or $1.20 per diluted share, respectively. 

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

"Engine Management sales were up approximately 7% for both the quarter and year to date. Excluding the wire and cable segment, Engine Management sales in the quarter increased almost 12%, or almost $20 million. The increase included three months of revenue from the Pollak acquisition, accounting for nearly $11 million. Excluding Pollak, our Engine Management business increased 5.3% for the quarter. The increase was attributable to a combination of strong demand in our OE business, which tends to be somewhat volatile, a benefit from pricing actions and tariffs, and low single digit organic growth.

"Engine Management gross margin was up 0.9 points from last year, and 1.3 points from the first quarter, reflecting our return to historic productivity in our Reynosa wire plant after the lengthy integration of the General Cable wire business.  This margin improvement also includes certain pricing actions offset by the adverse impact of tariffs being passed through to customers at our cost.

"Our Temperature Control sales were up 5% for the quarter and 9% year-to-date. April and May tend to reflect pre-season stocking activities, while June is the start of the summer selling season. Although we are pleased with the quarter's results, it was a slow start to summer heat nationwide. The third quarter will be critical to full-year performance, as 2018 was a very hot summer and a challenging comparison.

"Temperature Control gross margin improved 0.8 points in the quarter and, as with Engine Management, was dampened by tariffs being passed through to customers at our cost. As previously discussed, within SG&A, we experienced improvements in our distribution expense as our new warehouse automation in Lewisville is now fully implemented.

"Finally, on April 1st, we completed the acquisition of the Pollak business of Stoneridge, Inc., and it has contributed quite nicely to our performance. We will be relocating the acquired production lines to existing facilities over the course of the balance of the year, and expect significant savings once fully integrated and performing at full productivity some time in 2020. So far we are pleased with what we have seen, and believe it will be an excellent fit for SMP. We acquired a profitable and stable business with an excellent customer base, and we believe that with our combined skills, we will be able to advance our goal of increasing 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 September 3, 2019 to stockholders of record on August 15, 2019.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, July 25, 2019.  The dial-in number is 866-831-8713 (domestic) or 203-518-9822 (international). The playback number is 800-839-9562 (domestic) or 402-220-6090 (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







SIX MONTHS ENDED









JUNE 30,







JUNE 30,









2019





2018







2019





2018









(Unaudited)







(Unaudited)





NET SALES



$       305,172





$       286,636







$       588,938





$       548,462



































COST OF SALES



216,267





205,347







422,070





394,584



































GROSS PROFIT



88,905





81,289







166,868





153,878



































SELLING, GENERAL & ADMINISTRATIVE EXPENSES



60,536





57,750







120,536





115,467





RESTRUCTURING AND INTEGRATION EXPENSES 



644





231







644





3,067





OTHER INCOME (EXPENSE), NET



3





42







(3)





313



































OPERATING INCOME 



27,728





23,350







45,685





35,657



































OTHER NON-OPERATING INCOME, NET



1,411





480







2,057





449



































INTEREST EXPENSE



1,722





1,251







2,811





1,883



































EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES



27,417





22,579







44,931





34,223



































PROVISION FOR INCOME TAXES



6,862





5,752







11,272





8,799



































EARNINGS FROM CONTINUING OPERATIONS



20,555





16,827







33,659





25,424



































LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES



(1,123)





(882)







(2,011)





(1,490)



































NET EARNINGS 



$         19,432





$         15,945







$         31,648





$         23,934

























































































































































































NET EARNINGS PER COMMON SHARE:



























































   BASIC EARNINGS FROM CONTINUING OPERATIONS



$              0.92





$              0.75







$              1.50





$              1.13





   DISCONTINUED OPERATION



(0.05)





(0.04)







(0.09)





(0.07)





   NET EARNINGS PER COMMON SHARE - BASIC



$              0.87





$              0.71







$              1.41





$              1.06

































































   DILUTED EARNINGS FROM CONTINUING OPERATIONS



$              0.90





$              0.73







$              1.47





$              1.11





   DISCONTINUED OPERATION



(0.05)





(0.04)







(0.09)





(0.07)





   NET EARNINGS PER COMMON SHARE - DILUTED



$              0.85





$              0.69







$              1.38





$              1.04

































































WEIGHTED AVERAGE NUMBER OF COMMON SHARES



22,328,292





22,471,428







22,374,785





22,484,894





WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES



22,795,677





22,958,469







22,857,435





22,962,049





 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income





















































(In thousands)

















































































THREE MONTHS ENDED





SIX MONTHS ENDED







JUNE 30,





JUNE 30,







2019





2018





2019





2018







(Unaudited)





(Unaudited)



Revenues

























Ignition, Emission Control, Fuel & Safety

























   Related System Products



$       181,831





$       162,462





$       357,892





$       323,539



Wire and Cable



36,211





40,967





73,339





79,378



        Engine Management



218,042





203,429





431,231





402,917





























Compressors



52,493





46,940





92,304





76,838



Other Climate Control Parts



31,913





33,430





61,026





63,763



        Temperature Control



84,406





80,370





153,330





140,601





























All Other



2,724





2,837





4,377





4,944



        Revenues



$         305,172





$         286,636





$         588,938





$         548,462





























Gross Margin

























Engine Management



$         63,780

29.3%



$         57,782

28.4%



$       123,473

28.6%



$       114,252

28.4%

Temperature Control



22,551

26.7%



20,800

25.9%



38,742

25.3%



34,467

24.5%

All Other



2,574





2,707





4,653





5,159



        Gross Margin



$           88,905

29.1%



$           81,289

28.4%



$         166,868

28.3%



$         153,878

28.1%



























Selling, General & Administrative

























Engine Management



$         37,430

17.2%



$         34,598

17.0%



$           74,773

17.3%



$           70,862

17.6%

Temperature Control



15,397

18.2%



15,721

19.6%



29,538

19.3%



28,550

20.3%

All Other



7,709





7,431





16,225





16,055



        Selling, General & Administrative



$           60,536

19.8%



$           57,750

20.1%



$         120,536

20.5%



$         115,467

21.1%





















































Operating Income

























Engine Management



$         26,350

12.1%



$         23,184

11.4%



$           48,700

11.3%



$           43,390

10.8%

Temperature Control



7,154

8.5%



5,079

6.3%



9,204

6.0%



5,917

4.2%

All Other



(5,135)





(4,724)





(11,572)





(10,896)



        Subtotal



28,369

9.3%



23,539

8.2%



46,332

7.9%



38,411

7.0%

Restructuring & Integration



(644)

-0.2%



(231)

-0.1%



(644)

-0.1%



(3,067)

-0.6%

Other Income (Expense), Net



3

0.0%



42

0.0%



(3)

0.0%



313

0.1%

        Operating Income



$           27,728

9.1%



$           23,350

8.1%



$           45,685

7.8%



$           35,657

6.5%

 

 

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

















































































(In thousands, except per share amounts)























THREE MONTHS ENDED





SIX MONTHS ENDED





JUNE 30,





JUNE 30,





2019



2018





2019



2018



(Unaudited)



(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS







































GAAP EARNINGS FROM CONTINUING OPERATIONS



$            20,555



$            16,827





$            33,659



$            25,424





















RESTRUCTURING AND INTEGRATION EXPENSES



644



231





644



3,067

GAIN FROM SALE OF BUILDINGS



-



-





-



(218)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS



(168)



(60)





(168)



(741)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS



$            21,031



$            16,998





$            34,135



$            27,532









































DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS







































GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS



$               0.90



$               0.73





$               1.47



$               1.11





















RESTRUCTURING AND INTEGRATION EXPENSES



0.03



0.01





0.03



0.13

GAIN FROM SALE OF BUILDINGS



-



-





-



(0.01)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS



(0.01)



-





(0.01)



(0.03)





















NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS



$               0.92



$               0.74





$               1.49



$               1.20









































OPERATING INCOME







































GAAP OPERATING INCOME



$            27,728



$            23,350





$            45,685



$            35,657





















RESTRUCTURING AND INTEGRATION EXPENSES



644



231





644



3,067

OTHER (INCOME) EXPENSE, NET



(3)



(42)





3



(313)





















NON-GAAP OPERATING INCOME



$            28,369



$            23,539





$            46,332



$            38,411





























































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)













































June 30,







December  31,





2019







2018





(Unaudited)























ASSETS















CASH



$             17,419







$             11,138















ACCOUNTS RECEIVABLE, GROSS



185,476







163,222

ALLOWANCE FOR DOUBTFUL ACCOUNTS



6,090







5,687

ACCOUNTS RECEIVABLE, NET



179,386







157,535















INVENTORIES



375,258







349,811

UNRETURNED CUSTOMER INVENTORY



18,677







20,484

OTHER CURRENT ASSETS



14,972







7,256















TOTAL CURRENT ASSETS



605,712







546,224















PROPERTY, PLANT AND EQUIPMENT, NET



89,197







90,754

OPERATING LEASE RIGHT-OF-USE ASSETS



35,648







-

GOODWILL



77,728







67,321

OTHER INTANGIBLES, NET



69,017







48,411

DEFERRED INCOME TAXES



39,825







42,334

INVESTMENT IN UNCONSOLIDATED AFFILIATES



34,400







32,469

OTHER ASSETS



18,000







15,619















TOTAL ASSETS



$           969,527







$           843,132





























LIABILITIES AND STOCKHOLDERS' EQUITY





























NOTES PAYABLE



$           130,000







$             43,689

CURRENT PORTION OF OTHER DEBT



5,085







5,377

ACCOUNTS PAYABLE



89,149







94,357

ACCRUED CUSTOMER RETURNS



53,420







57,433

ACCRUED CORE LIABILITY



26,671







31,263

OTHER CURRENT LIABILITIES



89,615







80,467















TOTAL CURRENT LIABILITIES



393,940







312,586















OTHER LONG-TERM DEBT



153







153

NONCURRENT OPERATING LEASE LIABILITIES



28,613







-

ACCRUED ASBESTOS LIABILITIES



41,104







45,117

OTHER LIABILITIES



20,452







18,075















 TOTAL LIABILITIES 



484,262







375,931















 TOTAL STOCKHOLDERS' EQUITY 



485,265







467,201















 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 



$           969,527







$           843,132

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows







































(In thousands)





































SIX MONTHS ENDED





JUNE 30,





2019





2018





(Unaudited)















CASH FLOWS FROM OPERATING ACTIVITIES























NET EARNINGS 

$        31,648





$        23,934



ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH











PROVIDED BY (USED IN) OPERATING ACTIVITIES:











DEPRECIATION AND AMORTIZATION

12,744





11,706



OTHER

9,621





8,641



CHANGE IN ASSETS AND LIABILITIES:











ACCOUNTS RECEIVABLE

(26,622)





(34,524)



INVENTORIES

(19,691)





(6,650)



ACCOUNTS PAYABLE

(6,994)





15,684



PREPAID EXPENSES AND OTHER CURRENT ASSETS

(6,406)





(2,988)



SUNDRY PAYABLES AND ACCRUED EXPENSES 

(7,545)





(9,115)



OTHER

(6,261)





(2,502)



NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

(19,506)





4,186



























CASH FLOWS FROM INVESTING ACTIVITIES























ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(38,427)





(8,572)



NET PROCEEDS FROM SALE OF FACILITY

4,801





-



CAPITAL EXPENDITURES

(7,578)





(11,325)



OTHER INVESTING ACTIVITIES

46





16



NET CASH USED IN INVESTING ACTIVITIES 

(41,158)





(19,881)



























CASH FLOWS FROM FINANCING ACTIVITIES























NET CHANGE IN DEBT

85,956





32,287



PURCHASE OF TREASURY STOCK

(10,738)





(7,640)



DIVIDENDS PAID

(10,296)





(9,437)



OTHER FINANCING ACTIVITIES

1,691





1,990



NET CASH PROVIDED BY FINANCING ACTIVITIES

66,613





17,200



























EFFECT OF EXCHANGE RATE CHANGES ON CASH

332





(255)



NET INCREASE IN CASH AND CASH EQUIVALENTS

6,281





1,250



CASH AND CASH EQUIVALENTS at beginning of Period

11,138





17,323



CASH AND CASH EQUIVALENTS at end of Period

$        17,419





$        18,573

 

Cision View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-second-quarter-2019-results-and-a-quarterly-dividend-300890572.html

SOURCE Standard Motor Products, Inc.

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