Standard Motor Products Announces Q2 2001 Earnings and Dividend
NEW YORK--July 24, 2001--Standard Motor Products, Inc. automotive replacement parts manufacturer and distributor, reported net sales for the second quarter of 2001, the three months ended June 30, 2001, of $186.9 million, 6.7% higher than net sales of $175.1 million during the comparable quarter of a year ago.Net losses for the second quarter of 2001 were $522,000 or 5 cents per diluted share, as compared to net earnings of $7.0 million or 54 cents per diluted share, in the second quarter of 2000. This loss included, however, $2.8 million for a one-time prepayment penalty and write-off of unamortized fees on the early extinguishment of debt, costs relating to the Company's debt restructuring. Excluding these one-time costs, net earnings would have been 19 cents per diluted share.
Sales for the six months in 2001 were $342.5 million, 6.6% higher than net sales of $321.3 million in the comparable period in 2000. Net earnings for the six months in 2001 were $97,000 or 1 cent per diluted share, as compared to $6.9 million or 57 cents per diluted share a year ago. Excluding $2.8 million and $501,000 in 2001 and 2000, respectively, for the extraordinary losses on early retirement of debt, net earnings for the six months would have been 25 cents and 61 cents per diluted share in 2001 and 2000, respectively.
Mr. Lawrence Sills, Chief Executive Officer, said, "Sales in the second quarter increased greater than 6%, a trend started in the first quarter 2001. The increase resulted primarily from new accounts, in both Engine Management and Temperature Control."
Mr. Sills stated, "Gross margins for the quarter continued to be negatively impacted as the Company aggressively reduced inventory by cutting production and temporarily closing manufacturing facilities. The resultant underabsorption of overhead caused overall margins to decrease to 26.2% in the second quarter of 2001 and 27.4% year-to-date as compared to approximately 32% in 2000."
"We are very pleased with our success in reducing inventory in the first half of the year. Inventories have come down $47 million since the beginning of the year and are $35 million below inventory levels a year ago. We will continue to work towards further inventory reductions, but at a slower rate. In turn, production levels and gross margins should begin to improve in the quarters ahead."
Mr. Sills said, "Selling, general and administrative (SG&A) expenses in the second quarter 2001 were $40.8 million, $1 million lower than the $41.8 million a year ago." Year-to-date SG&A expenses were reduced $3.7 million to 23.6% percent of net sales as compared to 26.3% in the comparable period a year ago. This reflects the result of our cost cutting efforts."
Mr. Sills concluded, "The Company successfully secured a $225 million revolving credit facility on April 30, 2001 to refinance certain indebtedness, provide working capital financing and capacity to grow our Engine Management and Temperature Control product lines."
The Board of Directors has approved payment of a quarterly dividend of nine cents per share on the common stock outstanding. The dividend will be paid on September 4, 2001 to stockholders of record on August 15, 2001.
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
June 30, December 31,
2001 2000
Cash and investments $ 3,124 $ 7,699
Accounts receivable, gross 245,460 110,838
Allowance for doubtful accounts 6,045 4,577
Accounts receivable, net 239,415 106,261
Inventories 186,887 234,257
Other current assets 25,467 24,542
Total current assets 454,893 372,759
Property, plant and equipment, net 105,232 104,536
Goodwill 39,871 40,685
Other assets 35,784 31,416
Total assets $ 635,780 $ 549,396
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 4,049 $ 38,930
Current portion of long term debt 1,772 13,643
Accounts payable trade 46,670 56,612
Accrued customer returns 23,444 17,693
Other current liabilities 57,887 57,790
Total current liabilities 133,822 184,668
Long-term debt 287,526 150,018
Postretirement & other liabilities 21,358 20,405
Total liabilities 442,706 355,091
Total stockholders' equity 193,074 194,305
Total liabilities and
stockholders' equity $ 635,780 $ 549,396
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000 2001 2000
NET SALES $186,911 $175,112 $342,456 $321,317
COST OF SALES 137,999 118,618 248,579 218,058
GROSS PROFIT 48,912 56,494 93,877 103,259
SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 40,762 41,843 80,774 84,472
OPERATING INCOME 8,150 14,651 13,103 18,787
OTHER INCOME
(EXPENSE) - NET 220 88 300 473
INTEREST EXPENSE 5,040 4,747 9,167 8,654
EARNINGS BEFORE
TAXES AND
EXTRAORDINARY
ITEM 3,330 9,992 4,236 10,606
INCOME TAXES 1,055 2,956 1,342 3,185
INCOME BEFORE
EXTRAORDINARY
ITEM 2,275 7,036 2,894 7,421
EXTRAORDINARY LOSS
ON EARLY
EXTINGUISHMENT
OF DEBT (2,797) - (2,797) (501)
NET INCOME (LOSS) ($522) $7,036 $97 $6,920
NET EARNINGS PER
COMMON SHARE:
BASIC EARNINGS PER
SHARE BEFORE
EXTRAORDINARY
ITEM $0.19 $0.59 $0.25 $0.61
EXTRAORDINARY LOSS
ON REFINANCING
OF DEBT (0.24) - (0.24) (0.04)
NET EARNINGS PER
COMMON SHARE
- BASIC ($0.05) $0.59 $0.01 $0.57
DILUTED EARNINGS
PER SHARE BEFORE
EXTRAORDINARY
ITEM $0.19 $0.54 $0.25 $0.61
EXTRAORDINARY LOSS
ON REFINANCING
OF DEBT (0.24) - (0.24) (0.04)
NET EARNINGS PER
COMMON SHARE
- DILUTED ($0.05) $0.54 $0.01 $0.57
Weighted Average
Number of
Common Shares 11,781,383 11,937,798 11,748,050 12,173,673
Weighted Average
Number of Common
and Dilutive
Shares 11,850,421 14,756,196 11,782,444 12,254,753