Standard Motor Products, Inc. Announces Fourth Quarter and Full Year 2002 Results
NEW YORK--March 6, 2003--Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reported today its financial results for the three months ended December 31, 2002, and the full year 2002.Net sales for the fourth quarter of 2002 were $107.9 million, approximately 12% higher than net sales of $96.4 million during the comparable quarter of 2001. Losses from continuing operations for the fourth quarter of 2002 were $8.1 million or 68 cents per diluted share, compared to $6.3 million or 54 cents per diluted share in the fourth quarter of 2001. Excluding an impairment charge of $3.3 million for goodwill relating to European operations during the fourth quarter of 2002, the comparable loss from continuing operations would have been $4.8 million or 40 cents per diluted share in the fourth quarter of 2002.
Net sales for the full year 2002 were $598.4 million, slightly higher than net sales of $591.7 million in 2001. Earnings from continuing operations for 2002 were $6.1 million or 51 cents per diluted share, compared to $0.3 million or 3 cents per diluted share in 2001. Excluding the goodwill impairment charge of $3.3 million recorded in 2002, the comparable earnings from continuing operations would have been $9.4 million or 78 cents per diluted share in 2002.
The 2002 year-end financial statements reflect a change to the cumulative effect of accounting change for goodwill impairment recorded in the first quarter of 2002. After a subsequent review of the tax benefit associated with the impairment loss pertaining to its European operations, it was concluded that a tax benefit will not be realized due to the non-deductible nature of the goodwill. This change resulted in an increase to $18.4 million, in the related cumulative effect, as compared to the $16.0 million previously reported.
Mr. Lawrence Sills, Standard Motor Products Chairman and Chief Executive Officer, said, "Overall, we are pleased with the progress we are making. Two significant areas of improvement are increases in gross margin and reduction of total debt. Consolidated gross margins for the year improved by nearly three points to 26.3% over the prior year."
By segment, gross margins in Engine Management improved by four percentage points to 30.4%, and in Temperature Control, the improvement was nearly four percentage points to 21.7%. The improvements in gross margins reflect the return to more normal production levels and our continuing cost-reduction efforts. We reduced our total debt by $29 million in 2002, following a reduction of $22 million in 2001. As a result of this reduction of total debt, interest expense was $3.2 million lower than in 2001."
"We continue to make progress towards the closing of the announced acquisition of Dana's Engine Management division. We are currently working through the regulatory approval process, and we expect to close the acquisition during the second quarter of 2003."
Standard Motor Products will hold a conference call at 11:00 AM Eastern Standard Time, on Friday, March 7, 2003. The dial in number is (800)-451-7724. The playback number is (888)-566-0195 and the ID # is J405.
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, and 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
(Dollars in thousands, except per share amounts)
THREE-MONTHS ENDED TWELVE-MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2002 2001 2002 2001
----------- ----------- ----------- -----------
NET SALES $107,856 $96,432 $598,437 $591,652
COST OF SALES 79,333 77,790 440,893 452,597
----------- ----------- ----------- -----------
GROSS PROFIT 28,523 18,642 157,544 139,055
SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 29,701 25,665 129,142 123,932
GOODWILL IMPAIRMENT 3,334 - 3,334 -
----------- ----------- ----------- -----------
OPERATING INCOME
(LOSS) (4,512) (7,023) 25,068 15,123
OTHER INCOME
(EXPENSE), NET 1,462 1,223 3,187 2,763
INTEREST EXPENSE 3,367 3,468 14,244 17,430
----------- ----------- ----------- -----------
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS,
BEFORE TAXES (6,417) (9,268) 14,011 456
INCOME TAXES 1,670 (2,938) 7,920 144
----------- ----------- ----------- -----------
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS (8,087) (6,330) 6,091 312
LOSS FROM DISCONTINUED
OPERATION, NET OF TAX (254) - (18,297) -
----------- ----------- ----------- ---------
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE
(8,341) (6,330) (12,206) 312
EXTRAORDINARY ITEM,
NET OF TAX - - - (2,797)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE, NET
OF TAX - - (18,350) -
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) $(8,341) $(6,330) $(30,556) $(2,485)
=========== =========== =========== ===========
NET EARNINGS (LOSS) PER COMMON
SHARE:
BASIC EARNINGS
(LOSS) FROM
CONTINUING
OPERATIONS $(0.68) $(0.54) $0.51 $0.03
DISCONTINUED
OPERATION (0.02) - (1.54) -
EXTRAORDINARY ITEM - - - (0.24)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE - - (1.54) -
----------- ----------- ----------- -----------
NET EARNINGS (LOSS)
PER COMMON SHARE -
BASIC $(0.70) $(0.54) $(2.57) $(0.21)
=========== =========== =========== ===========
DILUTED EARNINGS
(LOSS) FROM
CONTINUING
OPERATIONS $(0.68) $(0.54) $0.51 $0.03
DISCONTINUED
OPERATION (0.02) - (1.52) -
EXTRAORDINARY ITEM - - - (0.24)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE - - (1.53) -
----------- ----------- ----------- -----------
NET EARNINGS (LOSS)
PER COMMON SHARE -
DILUTED $(0.70) $(0.54) $(2.54) $(0.21)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 11,957,009 11,803,437 11,914,968 11,774,591
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES AND
DILUTIVE SHARES 11,957,009 11,803,437 12,008,496 11,830,737
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
December December,
31, 2002 31 2001
-------------------
Cash $9,690 $7,496
Marketable securities 7,200 -
Accounts receivable, gross 122,526 122,327
Allowance for doubtful accounts 4,882 4,362
-------------------
Accounts receivable, net 117,644 117,965
Inventories 174,785 177,291
Other current assets 19,041 26,197
-------------------
Total current assets 328,360 328,949
-------------------
Property, plant and equipment, net 103,822 101,646
Goodwill 16,683 38,040
Other assets 41,893 40,794
-------------------
Total assets $490,758 $509,429
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LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $3,369 $4,075
Current portion of long term debt 4,108 1,784
Accounts payable trade 35,744 26,110
Accrued customer returns 16,341 18,167
Other current liabilities 51,866 50,457
-------------------
Total current liabilities 111,428 100,593
-------------------
Long-term debt 169,440 200,066
Postretirement & other liabilities 56,009 23,083
-------------------
Total liabilities 336,877 323,742
-------------------
Total stockholders' equity 153,881 185,687
-------------------
Total liabilities and stockholders' equity $490,758 $509,429
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