Standard Motor Products, Inc. Announces Second Quarter 2009 Results
NEW YORK, Aug. 5, 2009 -- Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and six months ended June 30, 2009.
Consolidated net sales for the second quarter of 2009 were $197.5 million, compared to consolidated net sales of $215.3 million during the comparable quarter in 2008. Earnings from continuing operations for the second quarter of 2009 were $5.6 million or 30 cents per diluted share, compared to a loss of $772 thousand or 4 cents per diluted share in the second quarter of 2008. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the second quarter of 2009 were $5.2 million or 27 cents per diluted share, compared to essentially breakeven results in the second quarter of 2008.
Consolidated net sales for the six month period ended June 30, 2009 were $369.7 million, compared to consolidated net sales of $423.4 million during the comparable period in 2008. Earnings from continuing operations for the six month period ended June 30, 2009 were $6.4 million or 34 cents per diluted share, compared to $12.6 million or 68 cents per diluted share in the comparable period of 2008. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the six months ended 2009 and 2008 were $6.5 million or 35 cents per diluted share and $3.0 million or 16 cents per diluted share, respectively.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We are pleased with our second quarter results as our earnings from continuing operations were substantially ahead of 2008, excluding one time items in both periods.
"Engine Management sales remain behind 2008 for reasons already discussed -- divestiture of Blue Streak Electronics, slow sales in the OE/OES sector, and the loss of a major portion of Carquest's business in the latter part of 2008. However, this was more than compensated for by an increase in gross margin, from 21.7% in the second quarter of 2008 to 25.5% in the second quarter of 2009. The overhang of costs from our Long Island City and Puerto Rico facilities in 2008 are behind us, and our low cost Mexican operations continue to improve in efficiency. At the end of the third quarter, we will begin sales of the wire and cable product line acquired from Federal Mogul, with an anticipated volume of $20 - $25 million annually.
"Temperature Control sales benefited from the addition of two major retail accounts and we anticipate gross margin improvement in the future as we continue to shift production of rebuilt compressors to our facility in Reynosa, Mexico.
"Further, we achieved a substantial reduction in SG&A, with close to a $6 million improvement in the second quarter and over $13 million year to date. Salaried headcount reduction has been a major contributor to these savings.
"The most significant event of the period, of course, was redeeming the remaining 6.75% convertible bonds and reaching an agreement with our banks to extend our agreement for an additional year to March, 2013. We were able to accomplish this by reducing our total debt by 50% or $137.8 million, primarily through working capital improvement over the last 12 months - an outstanding achievement in these difficult times. We acknowledge the hard work and sacrifice of so many of our people from all areas of our Company."
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, August 5, 2009. The dial in number is 800-894-5910 (domestic) or 785-424-1052 (international). The playback number is 800-695-0395 (domestic) or 402-220-1388 (international). The conference ID # is STANDARD.
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 are those 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
(In thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
NET SALES $197,498 $215,343 $369,720 $423,427
COST OF SALES 151,092 166,714 282,421 323,574
------- ------- ------- -------
GROSS PROFIT 46,406 48,629 87,299 99,853
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 36,813 42,530 72,832 86,389
RESTRUCTURING AND
INTEGRATION EXPENSES 1,210 1,376 2,373 4,212
----- ----- ----- -----
OPERATING INCOME 8,383 4,723 12,094 9,252
OTHER INCOME, NET 3,422 10 3,527 20,372
INTEREST EXPENSE 2,325 3,582 4,802 7,716
----- ----- ----- -----
EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES 9,480 1,151 10,819 21,908
INCOME TAX EXPENSE 3,842 1,923 4,394 9,333
----- ----- ----- -----
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS 5,638 (772) 6,425 12,575
LOSS FROM DISCONTINUED
OPERATION, NET OF TAX (322) (323) (582) (649)
---- ---- ---- ----
NET EARNINGS (LOSS) $5,316 $(1,095) $5,843 $11,926
====== ======= ====== =======
NET EARNINGS (LOSS) PER COMMON SHARE:
BASIC EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS $0.30 $(0.04) $0.34 $0.69
DISCONTINUED OPERATION (0.02) (0.02) (0.03) (0.04)
NET EARNINGS (LOSS) PER
COMMON SHARE - BASIC $0.28 $(0.06) $0.31 $0.65
===== ====== ===== =====
DILUTED EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS $0.30 $(0.04) $0.34 $0.68
DISCONTINUED OPERATION (0.02) (0.02) (0.03) (0.03)
NET EARNINGS (LOSS) PER
COMMON SHARE -
DILUTED $0.28 $(0.06) $0.31 $0.65
===== ====== ===== =====
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 18,814,723 18,332,273 18,705,997 18,319,979
WEIGHTED AVERAGE NUMBER
OF COMMON AND DILUTIVE
SHARES 20,014,439 18,384,840 18,720,479 21,157,672
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
EARNINGS (LOSS) FROM JUNE 30 JUNE 30,
CONTINUING OPERATIONS 2009 2008 2009 2008
---------------------- ---- ---- ---- ----
(Unaudited) (Unaudited)
GAAP EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $5,638 $(772) 6,425 12,575
RESTRUCTURING AND INTEGRATION
EXPENSES (NET OF TAX) 1,122 829 1,829 2,530
GAIN FROM SALE OF PREFERRED
STOCK INVESTMENT (NET OF TAX) (1,402) - (1,402) -
LOSS FROM EXTINGUISHMENT OF
DEBT (NET OF TAX) - - - 882
GAIN FROM SALE OF BUILDING (NET
OF TAX) (157) (145) (315) (13,020)
GAIN FROM DEBENTURE REPURCHASE
(NET OF TAX) (24) - (24) -
--- --- --- ---
NON-GAAP EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $5,177 $(88) $6,513 $2,967
====== ==== ====== ======
DILUTED EARNINGS (LOSS)
PER SHARE FROM CONTINUING
OPERATIONS
--------------------------
GAAP DILUTED EARNINGS (LOSS)
PER SHARE FROM CONTINUING
OPERATIONS $0.30 $(0.04) $0.34 $0.68
RESTRUCTURING AND INTEGRATION
EXPENSES (NET OF TAX) 0.05 0.05 0.10 0.14
GAIN FROM SALE OF PREFERRED
STOCK INVESTMENT (NET OF TAX) (0.07) - (0.07) -
LOSS FROM EXTINGUISHMENT OF
DEBT (NET OF TAX) - - - 0.05
GAIN FROM SALE OF BUILDING (NET
OF TAX) (0.01) (0.01) (0.02) (0.71)
GAIN FROM DEBENTURE REPURCHASE
(NET OF TAX) - - - -
--- --- --- ---
NON-GAAP DILUTED EARNINGS
(LOSS) PER SHARE FROM
CONTINUING OPERATIONS $0.27 $0.00 $0.35 $0.16
===== ===== ===== =====
MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS BEFORE SPECIAL
ITEMS, WHICH ARE NON-GAAP MEASUREMENTS, ARE MEANINGFUL TO INVESTORS
BECAUSE THEY PROVIDE A VIEW OF THE COMPANY WITH RESPECT TO ONGOING
OPERATING RESULTS. SPECIAL ITEMS REPRESENT SIGNIFICANT CHARGES OR CREDITS
THAT ARE IMPORTANT TO AN UNDERSTANDING OF THE COMPANY'S OVERALL
OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE
NOT RECOGNIZED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
AND SHOULD NOT BE VIEWED AS AN ALTERNATIVE TO GAAP MEASURES OF
PERFORMANCE.
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2009 2008
---- ----
(Unaudited)
ASSETS
------
CASH $14,450 $6,608
ACCOUNTS RECEIVABLE, GROSS 180,903 184,422
ALLOWANCE FOR DOUBTFUL ACCOUNTS 11,099 10,021
------ ------
ACCOUNTS RECEIVABLE, NET 169,804 174,401
INVENTORIES 197,989 232,435
ASSETS HELD FOR SALE 762 1,654
OTHER CURRENT ASSETS 26,557 32,497
------- -------
TOTAL CURRENT ASSETS 409,562 447,595
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 65,581 66,901
GOODWILL AND OTHER INTANGIBLES 15,418 16,285
OTHER ASSETS 47,891 44,246
-------- --------
TOTAL ASSETS $538,452 $575,027
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
NOTES PAYABLE $90,930 $148,931
CURRENT PORTION OF LONG TERM DEBT 32,241 44,953
ACCOUNTS PAYABLE TRADE 63,519 68,312
ACCRUED CUSTOMER RETURNS 26,644 19,664
OTHER CURRENT LIABILITIES 75,172 61,136
------- -------
TOTAL CURRENT LIABILITIES 288,506 342,996
------- -------
LONG-TERM DEBT 12,859 273
ACCRUED ASBESTOS LIABILITY 24,399 23,758
OTHER LIABILITIES 42,892 44,455
------- -------
TOTAL LIABILITIES 368,656 411,482
------- -------
TOTAL STOCKHOLDERS' EQUITY 169,796 163,545
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $538,452 $575,027
======== ========
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(In thousands)
THREE MONTHS ENDED
June 30,
2009 2008
---- ----
(Unaudited)
Revenues
--------
Engine Management $121,870 $138,482
Temperature Control 65,661 61,489
Europe 7,877 12,563
All Other 2,090 2,809
----- -----
$197,498 $215,343
======== ========
Gross Margin
------------
Engine Management $31,105 25.5% $30,005 21.7%
Temperature Control 11,462 17.5% 12,185 19.8%
Europe 1,843 23.4% 3,049 24.3%
All Other 1,996 3,390
----- -----
$46,406 23.5% $48,629 22.6%
======= =======
Selling, General & Administrative
---------------------------------
Engine Management $21,956 18.0% $25,086 18.1%
Temperature Control 8,443 12.9% 8,539 13.9%
Europe 1,899 24.1% 2,669 21.2%
All Other 4,515 6,236
----- -----
36,813 18.6% 42,530 19.7%
Restructuring & Integration 1,210 0.7% 1,376 0.6%
----- -----
$38,023 19.3% $43,906 20.3%
======= =======
Operating Profit
----------------
Engine Management $9,149 7.5% $4,919 3.6%
Temperature Control 3,019 4.6% 3,646 5.9%
Europe (56) -0.7% 380 3.0%
All Other (2,519) (2,846)
------ ------
9,593 4.9% 6,099 2.8%
Restructuring & Integration 1,210 0.7% 1,376 0.6%
----- -----
$8,383 4.2% $4,723 2.2%
====== ======
SIX MONTHS ENDED
June 30,
2009 2008
---- ----
(Unaudited)
Revenues
--------
Engine Management $244,757 $281,844
Temperature Control 105,921 111,062
Europe 15,417 23,807
All Other 3,625 6,714
----- -----
$369,720 $423,427
======== ========
Gross Margin
------------
Engine Management $61,603 25.2% $66,390 23.6%
Temperature Control 17,708 16.7% 19,897 17.9%
Europe 3,698 24.0% 6,243 26.2%
All Other 4,290 7,323
----- -----
$87,299 23.6% $99,853 23.6%
======= =======
Selling, General & Administrative
---------------------------------
Engine Management $43,868 17.9% $49,496 17.6%
Temperature Control 15,827 14.9% 16,994 15.3%
Europe 3,571 23.2% 5,367 22.5%
All Other 9,566 14,532
----- ------
72,832 19.7% 86,389 20.4%
Restructuring & Integration 2,373 0.6% 4,212 1.0%
----- -----
$75,205 20.3% $90,601 21.4%
======= =======
Operating Profit
----------------
Engine Management $17,735 7.2% $16,893 6.0%
Temperature Control 1,881 1.8% 2,902 2.6%
Europe 127 0.8% 876 3.7%
All Other (5,276) (7,207)
------ ------
14,467 3.9% 13,464 3.2%
Restructuring & Integration 2,373 0.6% 4,212 1.0%
----- -----
$12,094 3.3% $9,252 2.2%
======= ======