Standard Motor Products, Inc. Announces Fourth Quarter 2001 Earnings
NEW YORK--March 7, 2002--Standard Motor Products, Inc. automotive replacement parts manufacturer and distributor, reported its financial results for the fourth quarter of 2001, the three months ended December 31, 2001, and the full year 2001.Net sales for the fourth quarter of 2001 were $101.9 million, 12.6% lower than net sales of $116.6 million during the comparable quarter of a year ago. Net losses for the fourth quarter of 2001 were $6.3 million or 54 cents per diluted share, compared to net losses of $2 million, or 18 cents per diluted share in the fourth quarter of 2000.
Net sales for the full year 2001 were $608.1 million, slightly higher than net sales of $604 million in 2000. Net losses in 2001 were $2.5 million or 21 cents per diluted share, compared to net earnings of $9.7 million or 81 cents per diluted share in 2000. Excluding extraordinary losses on the early extinguishment of debt in 2001 and 2000, net earnings for the full year 2001 were $312 thousand or 3 cents per diluted share, as compared to net earnings of $10.2 million or 85 cents per diluted share of a year ago.
Mr. Lawrence Sills, Chief Executive Officer, said, "The decrease in net sales in the fourth quarter was caused by a combination of overall market weakness at the manufacturer level plus the fact that the fourth quarter of 2001 contained less shipping days than 2000, and 2000 also included the large opening orders to NAPA for their second ignition line."
"Sales for the full year were slightly ahead of 2000, mostly as a result of new business. We had NAPA for the full 12 months, we regained a major retailer for our Temperature Control division, and we obtained substantial additional wire set business from a major group of warehouse distributors."
"Excluding this new business, sales to existing accounts were slightly down, primarily a result of another cool summer for air conditioning, and the continuing inventory reduction program on the part of many of our customers."
Mr. Sills continued, "The key to the fall-off in profits was our own successful inventory reduction program. We had an initial goal of a $40 million reduction, and we actually achieved $57 million. All the while we maintained high shipping levels to our customers. This was a significant operating achievement, but it had a severe negative effect on our gross margin. We estimate that the resulting unabsorbed overhead caused a drop in gross margin of approximately 1.5 to 2 points."
"On the positive side, we reduced selling general and administrative expenses by more than $3 million compared to 2000, achieved an operating cash flow of approximately $40 million and a year over year debt reduction of approximately $22 million."
Mr. Sills concluded, "Our single highest priority in 2001 was to reduce capital employed in the business and we exceeded our stated goals. The majority of this reduction is behind us and we anticipate gross margins returning to historic levels."
"2002 appears promising. We have been awarded about $25 million in new lines and new locations from two major accounts. We will begin shipping these orders during the second quarter. With the inventory reduction mostly behind us, expenses under control, and the newly awarded business, we look forward to 2002."
Standard Motor Products will hold a conference call at 10:00 AM Eastern Standard Time, on Friday, March 8, 2002. The dial in number is (800)-540-0559. The playback number is (888)-566-0203 and the ID # is J405.
This news release contains certain forward-looking statements that involve risks and uncertainties. Actual results, events and performance could differ materially from those contemplated by these forward looking statements. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in this release and those detailed from time-to-time in prior public statements and the Company's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K and the Company's quarterly reports on Form 10-Q.
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
Dec. 31, Dec. 31,
2001 2000
---------- ----------
Cash and investments $ 7,496 $ 7,699
Accounts receivable, gross 122,327 110,838
Allowance for doubtful accounts 4,362 4,577
---------- ----------
Accounts receivable, net 117,965 106,261
Inventories 177,291 234,257
Other current assets 26,197 24,542
---------- ----------
Total current assets 328,949 372,759
---------- ----------
Property, plant and equipment, net 101,646 104,536
Goodwill 38,040 40,685
Other assets 40,794 31,416
---------- ----------
Total assets $ 509,429 $ 549,396
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 4,075 $ 38,930
Current portion of long term debt 1,784 13,643
Accounts payable trade 26,110 56,612
Accrued customer returns 18,167 17,693
Other current liabilities 50,457 57,790
---------- ----------
Total current liabilities 100,593 184,668
---------- ----------
Long-term debt 200,066 150,018
Postretirement & other liabilities 23,083 20,405
---------- ----------
Total liabilities 323,742 355,091
---------- ----------
Total stockholders' equity 185,687 194,305
---------- ----------
Total liabilities and stockholders' equity $ 509,429 $ 549,396
========== ==========
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
THREE-MONTHS ENDED TWELVE-MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2001 2000 2001 2000
----------- ----------- ----------- -----------
NET SALES $101,947 $116,627 $608,073 $604,009
COST OF SALES 76,159 83,001 438,215 415,965
----------- ----------- ----------- -----------
GROSS PROFIT 25,788 33,626 169,858 188,044
SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 32,812 33,442 154,315 157,380
----------- ----------- ----------- -----------
OPERATING INCOME
(LOSS) (7,024) 184 15,543 30,664
OTHER INCOME (LOSS),
NET 1,224 (166) 2,343 497
INTEREST EXPENSE 3,468 4,432 17,430 18,045
----------- ----------- ----------- -----------
EARNINGS (LOSS)
BEFORE TAXES AND
EXTRAORDINARY ITEM (9,268) (4,414) 456 13,116
INCOME TAXES (2,938) (2,365) 144 2,886
----------- ----------- ----------- -----------
EARNINGS (LOSS)
BEFORE EXTRAORDINARY
ITEM (6,330) (2,049) 312 10,230
EXTRAORDINARY LOSS ON
EARLY EXTINGUISHMENT
OF DEBT - - (2,797) (501)
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) ($6,330) ($2,049) ($2,485) $9,729
=========== =========== =========== ===========
NET EARNINGS (LOSS)
PER COMMON SHARE:
BASIC EARNINGS
(LOSS) PER SHARE
BEFORE
EXTRAORDINARY ITEM ($0.54) ($0.18) $0.03 $0.86
EXTRAORDINARY LOSS
ON EARLY
EXTINGUISHMENT OF
DEBT - - (0.24) (0.04)
----------- ----------- ----------- -----------
NET EARNINGS (LOSS)
PER COMMON
SHARE - BASIC ($0.54) ($0.18) ($0.21) $0.82
=========== =========== =========== ===========
DILUTED EARNINGS
(LOSS) PER SHARE
BEFORE
EXTRAORDINARY ITEM ($0.54) ($0.18) $0.03 $0.85
EXTRAORDINARY LOSS
ON EARLY
EXTINGUISHMENT OF
DEBT - - (0.24) (0.04)
----------- ----------- ----------- -----------
NET EARNINGS (LOSS)
PER COMMON
SHARE - DILUTED ($0.54) ($0.18) ($0.21) $0.81
=========== =========== =========== ===========
Weighted Average
Number of Common
Shares 11,803,437 11,695,179 11,774,591 11,933,774
Weighted Average
Number of Common
and Dilutive Shares 11,803,437 11,695,179 11,830,737 11,974,341