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Standard Motor Products, Inc. Announces Second Quarter 2015 Results and a Quarterly Dividend

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NEW YORK, July 30, 2015 /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 six months ending June 30, 2015.

Consolidated net sales for the second quarter of 2015 were $269.4 million, compared to consolidated net sales of $272.5 million during the comparable quarter in 2014.  Earnings from continuing operations for the second quarter of 2015 were $13.8 million or 59 cents per diluted share, compared to $11.2 million or 48 cents per diluted share in the second quarter of 2014. The second quarter of 2014 included a one-time, non-recurring litigation charge. Excluding the litigation charge and other 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 2015 were $13.6 million or 59 cents per diluted share, compared to $17.7 million or 76 cents per diluted share in the second quarter of 2014.

Consolidated net sales for the six month period ended June 30, 2015 were $497 million, compared to consolidated net sales of $505.3 million during the comparable period in 2014.  Earnings from continuing operations for the six month period ended June 30, 2015 were $23.1 million or $1.00 per diluted share, compared to $23.6 million or $1.02 per diluted share in the comparable period of 2014.  The six month period ended June 30, 2014 included a one-time, non-recurring litigation charge. Excluding the litigation charge and other 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, 2015 and 2014 were $22.9 million or 98 cents per diluted share and $30.1 million or $1.30 per diluted share, respectively.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We are obviously disappointed in our results for the first six months of the year, as we are behind 2014 in both sales and profit. However, we believe that the worst is behind us and we anticipate a stronger final six months.

"Turning first to sales, net sales in Engine Management were $9.4 million below 2014 through June. During this same period, our customers were reporting, on average, a slight increase in their sales of Engine Management. The difference is typically caused by a variety of factors—inventory consolidation as a result of acquisitions, different timing of pipeline orders, and other short term events. In time these have balanced out, and we anticipate a return to low single digit increases in Engine Management.

"In Temperature Control, we are finally having a warm summer after two cool summers in a row. Sales began to pick up in the latter part of June, and sales in July have been strong. We anticipate a sales increase in Temperature Control sales for the year.

"Three events had a significant impact on our profit shortfall for the first six months. All are short term in nature. Two are essentially behind us, and the third, a non-cash charge, will be over by the end of the year.

"The three are as follows: First is the incremental unfavorable manufacturing variances in our Temperature Control group related to reduced production in 2014 to bring inventory down after two cool seasons in a row. These carry forward variances have been fully recognized in our first half results. We are now achieving favorable variances, as we ramp up production to keep up with the increase in sales.

"Second are the one-time costs incurred as we revamped our rebuilt diesel fuel injection line, acquired from Pensacola Fuel Injection last year. This exercise is now mostly complete, and we are very optimistic about the future of this business.

"Third is the unfavorable non-cash change in prior service costs resulting from winding down of our retiree medical program. The program will end in December 2016.

"The total of all three in the first six months of the year was roughly $8.5 million which accounted for the bulk of the shortfall in profit.

"Our cash flow generated from operations was roughly $40 million in the second quarter and $26 million year to date. Cash generated in the quarter was used to reduce debt roughly $19 million and initiate $7 million in share repurchases.  In a separate release today we announced that our Board of Directors approved an additional $10 million increase in our share repurchase program from $10 million to $20 million.

"In summary, we are optimistic about the second half of 2015. Our market position remains strong; our recent acquisitions continue to show improvement; industry demographics are positive; some major one-time costs are behind us; and sales are improving. We look forward to the balance of the year."

The Board of Directors has approved payment of a quarterly dividend of fifteen cents per share on the common stock outstanding. The dividend will be paid on September 1, 2015 to stockholders of record on August 14, 2015.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, July 30, 2015.  The dial in number is 888-632-3384 (domestic) or 785-424-1675 (international). The playback number is 800-839-3612 (domestic) or 402-220-2972 (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,





2015



2014




2015



2014





(Unaudited)




(Unaudited)



NET SALES


$       269,382



$       272,540




$       496,971



$       505,292


















COST OF SALES


196,622



195,141




360,322



359,983


















GROSS PROFIT


72,760



77,399




136,649



145,309


















SELLING, GENERAL & ADMINISTRATIVE EXPENSES


51,736



48,847




100,934



96,441



LITIGATION CHARGE


-



10,650




-



10,650



RESTRUCTURING AND INTEGRATION EXPENSES


(26)



555




31



726



OTHER INCOME , NET


262



273




543



533


















OPERATING INCOME 


21,312



17,620




36,227



38,025


















OTHER NON-OPERATING INCOME (EXPENSE), NET


548



307




699



(106)


















INTEREST EXPENSE


480



457




906



765


















EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


21,380



17,470




36,020



37,154


















PROVISION FOR INCOME TAXES


7,572



6,301




12,873



13,578


















EARNINGS FROM CONTINUING OPERATIONS


13,808



11,169




23,147



23,576


















LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(430)



(529)




(821)



(1,211)


















NET EARNINGS 


$         13,378



$         10,640




$         22,326



$         22,365





























































































NET EARNINGS PER COMMON SHARE:






























   BASIC EARNINGS FROM CONTINUING OPERATIONS


$             0.60



$             0.49




$             1.01



$             1.03



   DISCONTINUED OPERATION


(0.02)



(0.02)




(0.04)



(0.05)



   NET EARNINGS PER COMMON SHARE - BASIC


$             0.58



$             0.47




$             0.97



$             0.98

































   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$             0.59



$             0.48




$             1.00



$             1.02



   DISCONTINUED OPERATION


(0.01)



(0.02)




(0.04)



(0.06)



   NET EARNINGS PER COMMON SHARE - DILUTED


$             0.58



$             0.46




$             0.96



$             0.96

































WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,917,718



22,874,002




22,914,322



22,910,419



WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


23,261,094



23,196,713




23,256,255



23,219,055


















 

 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income



























(In thousands)









































THREE MONTHS ENDED



SIX MONTHS ENDED




JUNE 30,



JUNE 30,




2015



2014



2015



2014




(unaudited)



(unaudited)


Revenues













Engine Management


$       176,992



$       184,181



$       354,063



$       363,475


Temperature Control


89,079



85,660



137,807



137,145


All Other


3,311



2,699



5,101



4,672




$         269,382



$         272,540



$         496,971



$         505,292















Gross Margin













Engine Management


$         52,267

29.5%


$         56,059

30.4%


$       103,969

29.4%


$       109,254

30.1%

Temperature Control


17,303

19.4%


18,299

21.4%


27,130

19.7%


30,184

22.0%

All Other


3,190



3,041



5,550



5,871




$           72,760

27.0%


$           77,399

28.4%


$         136,649

27.5%


$         145,309

28.8%














Selling, General & Administrative













Engine Management


$         30,442

17.2%


$         28,447

15.4%


$           60,446

17.1%


$           57,098

15.7%

Temperature Control


14,138

15.9%


13,260

15.5%


25,328

18.4%


24,532

17.9%

All Other


7,156



7,140



15,160



14,811




$           51,736

19.2%


$           48,847

17.9%


$         100,934

20.3%


$           96,441

19.1%



























Operating Income













Engine Management


$         21,825

12.3%


$         27,612

15.0%


$           43,523

12.3%


$           52,156

14.3%

Temperature Control


3,165

3.6%


5,039

5.9%


1,802

1.3%


5,652

4.1%

All Other


(3,966)



(4,099)



(9,610)



(8,940)




21,024

7.8%


28,552

10.5%


35,715

7.2%


48,868

9.7%

Litigation Charge


-

0.0%


(10,650)

-3.9%


-

0.0%


(10,650)

-2.1%

Restructuring & Integration


26

0.0%


(555)

-0.2%


(31)

0.0%


(726)

-0.1%

Other Income, Net


262

0.1%


273

0.1%


543

0.1%


533

0.1%



$           21,312

7.9%


$           17,620

6.5%


$           36,227

7.3%


$           38,025

7.5%














 

 

 

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,



2015


2014



2015


2014


(Unaudited)


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS




















GAAP EARNINGS FROM CONTINUING OPERATIONS


$            13,808


$            11,169



$            23,147


$            23,576











LITIGATION CHARGE (NET OF TAX)


-


6,390



-


6,390

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)


(16)


333



18


436

GAIN FROM SALE OF BUILDINGS (NET OF TAX)


(158)


(157)



(315)


(315)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$            13,634


$            17,735



$            22,850


$            30,087





















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS




















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.59


$               0.48



$               1.00


$               1.02











LITIGATION CHARGE (NET OF TAX)


-


0.28



-


0.27

RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)


-


0.01



-


0.02

GAIN FROM SALE OF BUILDINGS (NET OF TAX)


-


(0.01)



(0.02)


(0.01)











NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.59


$               0.76



$               0.98


$               1.30



















































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)























June  30,




December 31,



2015




2014



(Unaudited)












ASSETS









CASH


$            12,704




$            13,728








ACCOUNTS RECEIVABLE, GROSS


166,753




132,893

ALLOWANCE FOR DOUBTFUL ACCOUNTS


6,135




6,369

ACCOUNTS RECEIVABLE, NET


160,618




126,524








INVENTORIES


277,261




278,051

OTHER CURRENT ASSETS


49,353




47,730








TOTAL CURRENT ASSETS


499,936




466,033








PROPERTY, PLANT AND EQUIPMENT, NET


68,263




64,611

GOODWILL AND OTHER INTANGIBLES, NET


86,835




89,377

OTHER ASSETS


54,225




53,530








TOTAL ASSETS


$          709,259




$          673,551















LIABILITIES AND STOCKHOLDERS' EQUITY
















NOTES PAYABLE


$            52,916




$            56,558

CURRENT PORTION OF LONG TERM DEBT


69




175

ACCOUNTS PAYABLE


88,939




70,674

ACCRUED CUSTOMER RETURNS


39,285




30,621

OTHER CURRENT LIABILITIES


93,481




92,801








TOTAL CURRENT LIABILITIES


274,690




250,829








LONG-TERM DEBT


69




83

ACCRUED ASBESTOS LIABILITIES


33,294




33,462

OTHER LIABILITIES


14,609




15,024








 TOTAL LIABILITIES 


322,662




299,398








 TOTAL STOCKHOLDERS' EQUITY 


386,597




374,153








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$          709,259




$          673,551








 

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















SIX MONTHS ENDED



JUNE 30,



2015



2014



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS 

$        22,326



$        22,365


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






PROVIDED BY OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

8,552



8,440


OTHER

3,962



5,376


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(34,563)



(16,149)


INVENTORY 

(820)



(19,527)


ACCOUNTS PAYABLE

18,327



13,847


OTHER

8,388



3,266


NET CASH PROVIDED BY OPERATING ACTIVTIES

26,172



17,618














CASH FLOWS FROM INVESTING ACTIVITIES












ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

-



(37,726)


CAPITAL EXPENDITURES

(10,184)



(6,379)


OTHER INVESTING ACTIVITIES

26



11


NET CASH USED IN INVESTING ACTIVITIES 

(10,158)



(44,094)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

(3,761)



37,620


PURCHASE OF TREASURY STOCK

(7,046)



(5,860)


DIVIDENDS PAID

(6,876)



(5,955)


OTHER FINANCING ACTIVITIES

518



2,033


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(17,165)



27,838














EFFECT OF EXCHANGE RATE CHANGES ON CASH

127



(704)


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(1,024)



658


CASH AND CASH EQUIVALENTS at beginning of Period

13,728



5,559


CASH AND CASH EQUIVALENTS at end of Period

$        12,704



$           6,217







 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-second-quarter-2015-results-and-a-quarterly-dividend-300120900.html

SOURCE Standard Motor Products, Inc.

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