Standard Motor Products, Inc. Announces Fourth Quarter 2008 Results
NEW YORK, March 6, 2009: Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and for the year ended December 31, 2008.
Consolidated net sales for the fourth quarter of 2008 were $148.9 million, compared to consolidated net sales of $167.3 million during the comparable quarter in 2007. Losses from continuing operations for the fourth quarter of 2008 were $34.1 million or $1.84 per diluted share after taking into account a $39.4 million goodwill and intangibles impairment, compared to a loss of $7.9 million or 43 cents per diluted share in the fourth quarter of 2007. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, losses from continuing operations for the fourth quarter 2008 were $5.5 million or 29 cents per diluted share compared to losses in the fourth quarter 2007 of $3.6 million or 20 cents per diluted share.
Consolidated net sales for 2008 were $775.2 million, compared to consolidated net sales of $790.2 million during the comparable period in 2007. Losses from continuing operations for 2008 were $21.1 million or $1.14 per diluted share, compared to earnings of $5.4 million or 29 cents per diluted share in 2007. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, losses from continuing operations for 2008 were $2 million or 11 cents per diluted share, compared to earnings for 2007 of $11.4 million or 61 cents per diluted share.
The restructuring and integration expenses incurred in 2008 are part of a strategic plan for plant rationalization and streamlining operations while the impairment charge for goodwill and intangible assets is associated with business conditions and the recent market downturn.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "Sales in the fourth quarter were down 11%, consistent across all divisions, continuing a decline that began in September. As a result, though we had been running slightly above 2007 for three quarters, we wound up 2% below 2007 for the full year.
"However, reports from our customers and industry statistics indicate that sales to end users remained healthy throughout the period and have continued solid in early 2009. Accordingly, we have seen our aftermarket sales bounce back in the first two months of the year. Our sales to OE remain depressed as a result of cutbacks in OE production, but this represents a relatively small part of our overall business.
"The fourth quarter sales decline resulted in an operating loss, excluding special items, of 29 cents per diluted share for the quarter and 11 cents for the full year. These results, while disappointing, were impacted by two major events, both of which we believe are now behind us. First was the drop-off in fourth quarter sales. Second was the substantial costs incurred in closing Long Island City and Puerto Rico, two of our largest facilities, and the start-up costs in Reynosa, Mexico. With Long Island City and Puerto Rico now fully closed, and Reynosa increasing production and improving efficiency, we look forward to improved results in 2009.
"Our major focus in 2008 was generating cash and reducing debt, in anticipation of the $90 million in convertible debentures due in July 2009. During 2008, we repurchased roughly half the bonds, leaving a balance of $45 million due in July 2009. Overall, we reduced total debt by $61 million during the year through the sale of our Long Island City facility and reductions in inventory and accounts receivable.
"Cash generation remains our highest priority. Since January 2008, we have reduced our work force by 18%, approximately 700 people. Further, we have temporarily eliminated the quarterly dividend, frozen salaries, closed our Reno distribution center, and continued to reduce capital expenditures, inventory and accounts receivable.
"As a result of these and other steps, while we continue to pursue areas of outside financing, we expect to have sufficient availability within our current bank revolver to redeem the remaining bonds in July."
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, March 6, 2009. The dial in number is 800-895-1085 (domestic) or 785-424-1055 (international). The playback number is 800-695-0671 (domestic) or 402-220-1397 (international). The conference ID # is STANDARD.