Standard Motor Products, Inc. Announces First Quarter 2005 Results and a Quarterly Dividend
NEW YORK, May 10, 2005 -- Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months ended March 31, 2005.
Consolidated net sales for the first quarter of 2005 were $207.3 million, compared to consolidated net sales of $204.8 million during the comparable quarter in 2004. Earnings from continuing operations for the first quarter of 2005 were $1.1 million or 5 cents per diluted share, compared to losses from continuing operations of $545,000 or 3 cents per diluted share in the first quarter of 2004.
First quarter 2005 consolidated net sales increased slightly. Consolidated gross margins were 23.4% in the first quarter of 2005 compared to 24.9% in the first quarter of 2004, reflecting a 1.5 percentage point decrease. Offsetting the gross margin decline was a 2.8 percentage point reduction in selling, general and administrative (SG&A) expenses. The net result was that operating income increased $3.6 million in the first quarter of 2005 as compared to the comparable period in the prior year.
Commenting on the results, Mr. Lawrence Sills, Standard Motor Products' Chairman and Chief Executive Officer, said, "While we are starting to see the benefits of the Dana Engine Management (DEM) integration, we are not yet achieving the targets that we have set for ourselves. Despite only a slight increase in sales, we have made substantial reductions in SG&A. The $5 million quarterly SG&A improvement from the first quarter of 2004 was primarily a result of the synergies from the DEM integration."
Mr. Sills added, "We have not yet achieved similar improvements in gross margin. We are still working off the high cost DEM inventory, and because we have added so many new people, we are running below pre-acquisition efficiency levels. However, our efficiencies are improving continuously; we have announced price increases for the second half of the year, which have been accepted by our customers; and we have begun placing orders for material components which will result in additional cost savings. We remain optimistic about hitting all of our planned goals."
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 June 1, 2005 to stockholders of record on May 16, 2005.
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED
MARCH 31,
2005 2004
NET SALES $207,326 $204,781
COST OF SALES 158,891 153,821
GROSS PROFIT 48,435 50,960
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 42,076 47,328
RESTRUCTURING EXPENSES 524 1,367
OPERATING INCOME 5,835 2,265
OTHER INCOME (EXPENSE), NET (215) 243
INTEREST EXPENSE 3,775 3,234
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 1,845 (726)
INCOME TAX EXPENSE (BENEFIT) 792 (181)
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS 1,053 (545)
LOSS FROM DISCONTINUED OPERATION, NET
OF TAX (407) (425)
NET EARNINGS (LOSS) $646 $(970)
NET EARNINGS (LOSS) PER COMMON SHARE:
BASIC EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $0.05 $(0.03)
DISCONTINUED OPERATION (0.02) (0.02)
NET EARNINGS (LOSS) PER COMMON
SHARE - BASIC $0.03 $(0.05)
DILUTED EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $0.05 $(0.03)
DISCONTINUED OPERATION (0.02) (0.02)
NET EARNINGS (LOSS) PER COMMON
SHARE - DILUTED $0.03 $(0.05)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 19,440,356 19,233,543
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES AND DILUTIVE SHARES 19,478,064 19,233,543
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
March 31, December 31,
2005 2004
Cash $8,795 $14,934
Accounts receivable, gross 208,575 160,706
Allowance for doubtful accounts 9,732 9,354
Accounts receivable, net 198,843 151,352
Inventories 264,571 258,641
Other current assets 24,642 22,289
Total current assets 496,851 447,216
Property, plant and equipment, net 95,256 97,425
Goodwill and other intangibles 69,475 69,911
Other assets 41,743 42,017
Total assets $703,325 $656,569
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $146,439 $109,416
Current portion of long term debt 534 534
Accounts payable trade 69,809 46,487
Accrued customer returns 22,607 23,127
Restructuring accrual 5,767 6,999
Other current liabilities 53,514 65,893
Total current liabilities 298,670 252,456
Long-term debt 114,101 114,236
Accrued asbestos liabilities 25,985 26,060
Postretirement & other liabilities 45,888 44,111
Restructuring accrual 11,301 12,394
Total liabilities 495,945 449,257
Total stockholders' equity 207,380 207,312
Total liabilities and stockholders' equity $703,325 $656,569