Standard Motor Products, Inc. Announces Fourth Quarter 2009 Results
NEW YORK, March 5 -- Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reports today its consolidated financial results for the three months and for the year ended December 31, 2009.
Consolidated net sales for the fourth quarter of 2009 were $160.1 million, compared to consolidated net sales of $148.9 million during the comparable quarter in 2008. Losses from continuing operations for the fourth quarter of 2009 were $5.2 million or 25 cents per diluted share, compared to losses of $34.1 million or $1.84 per diluted share in the fourth 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 fourth quarter of 2009 were $398 thousand or 2 cents per diluted share, compared to losses in the comparable quarter in 2008 of $5.5 million or 29 cents per diluted share.
Consolidated net sales for 2009 were $735.4 million, compared to consolidated net sales of $775.2 million during the comparable period in 2008. Earnings from continuing operations for 2009 were $5.9 million or 31 cents per diluted share, compared to losses of $21.1 million or $1.14 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 2009 were $13.5 million or 70 cents per diluted share compared to losses for 2008 of $2 million or 11 cents per diluted share.
Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, commented, "We are pleased with our results, both for the fourth quarter and the full year 2009. For the second quarter in a row, sales were ahead of the comparable quarter in 2008.
"Fourth quarter 2009 sales were aided by new wire business to NAPA and new customers in Temperature Control. In addition, the aftermarket, which accounts for roughly 90% of our total sales, remains quite healthy. And while it is still early in the year, these trends appear to be continuing into 2010, as our volume through February is running ahead of 2009.
"Gross margins continue to improve, as a result of increased volume and savings from our low cost Mexican operations. SG&A expenses remain under control, as a result of substantial cost cutting and the reduction of nearly 10% of our salaried work force.
"Perhaps our biggest achievement in 2009 was in the area of cash flow. Over the 12 month period, we reduced our total debt by $117.8 million from $194.2 million to $76.4 million. This included the retirement of our July 2009 convertible debt obligations. Our debt to adjusted EBITDA ratio, excluding special items, went from 6.2 times to a very healthy 1.7 times. This improvement was aided by a successful equity offering in October, in which we received net proceeds of $27.5 million. All this took a tremendous effort throughout the company, and we are extremely proud of our people for what they have been able to accomplish.
"In addition, based on our 2009 performance and our outlook for 2010, we reinstated our quarterly dividend that was suspended at the end of 2008. On March 1st we paid a dividend of 5 cents per share to stockholders of record on February 15th."
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, March 5, 2010. The dial in number is 800-895-1085 (domestic) or 785-424-1055 (international). The playback number is 800-839-5131 (domestic) or 402-220-1506 (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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
NET SALES $160,127 $148,876 $735,424 $775,241
COST OF SALES 120,005 113,345 558,200 591,085
------- ------- ------- -------
GROSS PROFIT 40,122 35,531 177,224 184,156
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 37,035 38,696 146,642 166,199
GOODWILL AND INTANGIBLE
ASSET IMPAIRMENT - 39,387 - 39,387
RESTRUCTURING AND
INTEGRATION EXPENSES 1,709 10,741 7,386 16,858
----- ------ ----- ------
OPERATING INCOME (LOSS) 1,378 (53,293) 23,196 (38,288)
OTHER INCOME (EXPENSE), NET (6,291) 1,005 (1,981) 22,670
INTEREST EXPENSE 1,990 2,580 9,215 13,585
----- ----- ----- ------
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS
BEFORE TAXES (6,903) (54,868) 12,000 (29,203)
INCOME TAX EXPENSE
(BENEFIT) (1,660) (20,798) 6,094 (8,105)
------ ------- ----- ------
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS (5,243) (34,070) 5,906 (21,098)
EARNINGS (LOSS) FROM
DISCONTINUED OPERATION,
NET OF TAX (202) 432 (2,423) (1,796)
---- --- ------ ------
NET EARNINGS (LOSS) $(5,445) $(33,638) $3,483 $(22,894)
======= ======== ====== ========
NET EARNINGS (LOSS) PER COMMON SHARE:
BASIC EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS $(0.25) $(1.84) $0.31 $(1.14)
DISCONTINUED OPERATION (0.01) 0.03 (0.13) (0.10)
NET EARNINGS (LOSS) PER
COMMON SHARE - BASIC $(0.26) $(1.81) $0.18 $(1.24)
====== ====== ===== ======
DILUTED EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS $(0.25) $(1.84) $0.31 $(1.14)
DISCONTINUED OPERATION (0.01) 0.03 (0.13) (0.10)
NET EARNINGS (LOSS) PER
COMMON SHARE - DILUTED $(0.26) $(1.81) $0.18 $(1.24)
====== ====== ===== ======
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 21,034,701 18,560,068 19,340,672 18,500,229
WEIGHTED AVERAGE NUMBER
OF COMMON AND DILUTIVE
SHARES 21,109,573 18,560,068 19,388,771 18,531,148
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
EARNINGS (LOSS) FROM CONTINUING DECEMBER 31, DECEMBER 31,
OPERATIONS 2009 2008 2009 2008
------------------------------- ---- ---- ---- ----
(Unaudited) (Unaudited)
GAAP EARNINGS (LOSS) FROM
CONTINUING OPERATIONS BEFORE
TAXES $(6,903) $(54,868) $12,000 $(29,203)
INCOME TAX EXPENSE (BENEFIT) (1,660) (20,798) 6,094 (8,105)
------ ------- ----- ------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS (5,243) (34,070) 5,906 (21,098)
RESTRUCTURING AND INTEGRATION
EXPENSES (NET OF TAX) 1,026 6,503 4,897 10,237
LOSS FROM EUROPE DIVESTITURE (NET
OF TAX) 4,772 - 4,772 -
GAIN FROM SALE OF PREFERRED STOCK
INVESTMENT (NET OF TAX) - - (1,402) -
GOODWILL AND INTANGIBLE ASSET
IMPAIRMENT (NET OF TAX) - 23,632 - 23,632
LOSS FROM EXTINGUISHMENT OF DEBT
(NET OF TAX) - - - 882
GAIN FROM SALE OF BUILDING (NET
OF TAX) (157) (160) (629) (13,340)
GAIN FROM DEBENTURE REPURCHASE
(NET OF TAX) - (1,366) (24) (2,308)
--- ------ --- ------
NON-GAAP EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $398 $(5,461) $13,520 $(1,995)
==== ======= ======= =======
DILUTED EARNINGS (LOSS) PER SHARE
FROM CONTINUING OPERATIONS
---------------------------------
GAAP DILUTED EARNINGS (LOSS) PER
SHARE FROM CONTINUING OPERATIONS $(0.25) $(1.84) $0.31 $(1.14)
RESTRUCTURING AND INTEGRATION
EXPENSES (NET OF TAX) 0.05 0.35 0.25 0.55
LOSS FROM EUROPE DIVESTITURE (NET
OF TAX) 0.23 - 0.24 -
GAIN FROM SALE OF PREFERRED STOCK
INVESTMENT (NET OF TAX) - - (0.07) -
GOODWILL AND INTANGIBLE ASSET
IMPAIRMENT (NET OF TAX) - 1.28 - 1.28
LOSS FROM EXTINGUISHMENT OF DEBT
(NET OF TAX) - - - 0.05
GAIN FROM SALE OF BUILDING (NET
OF TAX) (0.01) (0.01) (0.03) (0.73)
GAIN FROM DEBENTURE REPURCHASE
(NET OF TAX) - (0.07) - (0.12)
--- ----- --- -----
NON-GAAP DILUTED EARNINGS (LOSS)
PER SHARE FROM CONTINUING
OPERATIONS $0.02 $(0.29) $0.70 $(0.11)
===== ====== ===== ======
MANAGEMENT BELIEVES THAT EARNINGS (LOSS) FROM CONTINUING OPERATIONS AND
DILUTED EARNINGS (LOSS) 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 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.
Reconciliation of GAAP and Non-GAAP Measures (continued)
TWELVE MONTHS ENDED
(In thousands) DECEMBER 31,
2009 2008
---- ----
(Unaudited)
DEBT TO EARNINGS (LOSS) BEFORE
INTEREST, TAXES, DEPRECIATION &
AMORTIZATION (EBITDA)
--------------------------------
GAAP OPERATING PROFIT (LOSS) $23,196 $(38,288)
OTHER INCOME (EXPENSE) (1,981) 22,670
DEPRECIATION AND AMORTIZATION 14,354 14,700
------ ------
EBITDA BEFORE SPECIAL ITEMS 35,569 (918)
RESTRUCTURING AND INTEGRATION EXPENSES 7,386 16,858
LOSS FROM EUROPE DIVESTITURE 6,608 -
GAIN FROM SALE OF PREFERRED STOCK INVESTMENT (2,336) -
GOODWILL AND INTANGIBLE ASSET IMPAIRMENT - 39,387
LOSS FROM EXTINGUISHMENT OF DEBT - 1,444
GAIN FROM SALE OF BUILDING (1,048) (21,845)
GAIN FROM DEBENTURE REPURCHASE (40) (3,847)
--- ------
NON-GAAP EBITDA $46,139 $31,079
======= =======
TOTAL DEBT $76,405 $194,157
======= ========
DEBT TO EBITDA RATIO 1.7 6.2
=== ===
MANAGEMENT BELIEVES THAT THE DEBT TO EBITDA RATIO, WHICH IS A NON-GAAP
MEASURE, IS MEANINGFUL TO INVESTORS BECAUSE IT PROVIDES A VIEW OF THE
COMPANY WITH RESPECT TO ONGOING OPERATING RESULTS AND LIQUIDITY. THE DEBT
TO EBITDA RATIO IS CALCULATED BEFORE SPECIAL ITEMS. 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)
December 31, December 31,
2009 2008
---- ----
(Unaudited)
ASSETS
------
CASH $10,618 $6,608
ACCOUNTS RECEIVABLE, GROSS 131,785 184,422
ALLOWANCE FOR DOUBTFUL ACCOUNTS 6,962 10,021
----- ------
ACCOUNTS RECEIVABLE, NET 124,823 174,401
INVENTORIES 199,752 232,435
ASSETS HELD FOR SALE 1,405 1,654
OTHER CURRENT ASSETS 27,616 32,497
------- -------
TOTAL CURRENT ASSETS 364,214 447,595
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 61,478 66,901
GOODWILL AND OTHER INTANGIBLES 13,805 16,285
OTHER ASSETS 44,962 44,246
-------- --------
TOTAL ASSETS $484,459 $575,027
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
NOTES PAYABLE $58,430 $148,931
CURRENT PORTION OF LONG TERM DEBT 67 44,953
ACCOUNTS PAYABLE TRADE 54,381 68,312
ACCRUED CUSTOMER RETURNS 20,442 19,664
OTHER CURRENT LIABILITIES 71,303 61,136
------- -------
TOTAL CURRENT LIABILITIES 204,623 342,996
------- -------
LONG-TERM DEBT 17,908 273
ACCRUED ASBESTOS LIABILITY 24,874 23,758
OTHER LIABILITIES 43,176 44,455
------- -------
TOTAL LIABILITIES 290,581 411,482
------- -------
TOTAL STOCKHOLDERS' EQUITY 193,878 163,545
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $484,459 $575,027
======== ========
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(In thousands)
THREE MONTHS ENDED
DECEMBER 31,
2009 2008
---- ----
(Unaudited) (Unaudited)
Revenues
--------
Engine Management $121,039 $110,811
Temperature Control 31,303 29,412
Europe 6,629 8,862
All Other 1,156 (209)
----- ----
$160,127 $148,876
======== ========
Gross Margin
------------
Engine Management $29,226 24.1% $24,106 21.8%
Temperature Control 7,912 25.3% 6,908 23.5%
Europe 736 11.1% 1,853 20.9%
All Other 2,248 2,664
----- -----
$40,122 25.1% $35,531 23.9%
======= =======
Selling, General & Administrative
---------------------------------
Engine Management $23,597 19.5% $23,776 21.5%
Temperature Control 6,977 22.3% 7,227 24.6%
Europe 1,340 20.2% 1,955 22.1%
All Other 5,121 5,738
----- -----
37,035 23.1% 38,696 26.0%
Asset Impairments - 39,387
Restructuring & Integration 1,709 1.1% 10,741 7.1%
----- ------
$38,744 24.2% $88,824 59.6%
======= =======
Operating Profit (Loss)
-----------------------
Engine Management $5,629 4.7% $329 0.3%
Temperature Control 935 3.0% (319) -1.1%
Europe (605) -9.1% (102) -1.2%
All Other (2,872) (3,073)
------ ------
3,087 1.9% (3,165) -2.1%
Asset Impairments - 39,387
Restructuring & Integration 1,709 1.0% 10,741 7.3%
----- ------
$1,378 0.9% $(53,293) -35.8%
====== ========
YEAR ENDED
DECEMBER 31,
2009 2008
---- ----
(Unaudited) (Unaudited)
Revenues
--------
Engine Management $501,589 $528,157
Temperature Control 196,729 194,171
Europe 29,984 44,205
All Other 7,122 8,708
----- -----
$735,424 $775,241
======== ========
Gross Margin
------------
Engine Management $123,737 24.7% $122,876 23.3%
Temperature Control 38,677 19.7% 37,406 19.3%
Europe 6,097 20.3% 10,796 24.4%
All Other 8,713 13,078
----- ------
$177,224 24.1% $184,156 23.8%
======== ========
Selling, General & Administrative
---------------------------------
Engine Management $89,914 17.9% $97,056 18.4%
Temperature Control 31,014 15.8% 33,693 17.4%
Europe 6,816 22.7% 9,980 22.6%
All Other 18,898 25,470
------ ------
146,642 19.9% 166,199 21.4%
Asset Impairments - 39,387
Restructuring & Integration 7,386 1.0% 16,858 2.2%
----- ------
$154,028 20.9% $222,444 28.7%
======== ========
Operating Profit (Loss)
-----------------------
Engine Management $33,823 6.7% $25,820 4.9%
Temperature Control 7,662 3.9% 3,713 1.9%
Europe (719) -2.4% 816 1.8%
All Other (10,184) (12,392)
------- -------
30,582 4.2% 17,957 2.3%
Asset Impairments - 39,387
Restructuring & Integration 7,386 1.0% 16,858 2.2%
----- ------
$23,196 3.2% $(38,288) -4.9%
======= ========