Standard Motor Products, Inc. Announces Second Quarter 2010 Results and a Quarterly Dividend
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NEW YORK, Aug. 2, 2010: 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, 2010.
Consolidated net sales for the second quarter of 2010 were $231 million, compared to consolidated net sales of $197.5 million during the comparable quarter in 2009. Earnings from continuing operations for the second quarter of 2010 were $8.1 million or 35 cents per diluted share, compared to $5.6 million or 30 cents per diluted share in the second quarter of 2009. 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 2010 were $8.7 million or 38 cents, compared to $5.2 million or 27 cents per diluted share in the second quarter of 2009.
Consolidated net sales for the six month period ended June 30, 2010 were $410.4 million, compared to consolidated net sales of $369.7 million during the comparable period in 2009. Earnings from continuing operations for the six month period ended June 30, 2010 were $10.9 million or 48 cents per diluted share, compared to $6.4 million or 34 cents per diluted share in the comparable period of 2009. 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 2010 and 2009 were $11.8 million or 52 cents per diluted share and $6.5 million or 35 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 results for the second quarter and for the first six months of the year. Sales were strong for both Engine Management and Temperature Control, and both divisions continued to benefit from cost reduction programs initiated over the past few years.
"Engine Management sales were 24% ahead for the quarter and 17% for the half. We attribute this to a combination of factors - solid growth for the entire aftermarket (which apparently is continuing into the third quarter), new business from the acquisition of Federal Mogul's wire line, inventory increases on the part of several customers as they return to more normalized stocking levels, and an increase in OE/OES volume from last year's depressed levels.
"Temperature Control sales are benefiting from one of the hottest summers in recent years, and full year volume from two large accounts gained in 2009.
"One element we are not yet satisfied with is our Engine Management gross margin, which is running slightly below 2009. However, we anticipate improvement in the second half, as our price increases are now fully implemented, and we continue our cost reduction initiatives.
"We were very successful deleveraging our balance sheet in 2009. While our working capital has increased in 2010 to accommodate the strong sales performance to-date, we anticipate achieving further debt reductions in the second half of this year."
The Board of Directors has approved payment of a quarterly dividend of five cents per share on the common stock outstanding. The dividend will be paid on September 1, 2010 to stockholders of record on August 13, 2010.
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,
2010 2009 2010 2009
---- ---- ---- ----
(Unaudited) (Unaudited)
NET SALES $231,048 $197,498 $410,399 $369,720
COST OF SALES 172,659 151,092 308,192 282,421
------- ------- ------- -------
GROSS PROFIT 58,389 46,406 102,207 87,299
SELLING,
GENERAL &
ADMINISTRATIVE
EXPENSES 41,803 36,813 78,468 72,832
RESTRUCTURING
AND
INTEGRATION
EXPENSES 1,289 1,210 2,042 2,373
----- ----- ----- -----
OPERATING
INCOME 15,297 8,383 21,697 12,094
OTHER INCOME,
NET 298 3,422 696 3,527
INTEREST
EXPENSE 2,002 2,325 3,866 4,802
----- ----- ----- -----
EARNINGS FROM
CONTINUING
OPERATIONS
BEFORE TAXES 13,593 9,480 18,527 10,819
INCOME TAX
EXPENSE 5,532 3,842 7,599 4,394
----- ----- ----- -----
EARNINGS FROM
CONTINUING
OPERATIONS 8,061 5,638 10,928 6,425
DISCONTINUED
OPERATION, NET
OF TAX (372) (322) (868) (582)
---- ---- ---- ----
NET EARNINGS $7,689 $5,316 $10,060 $5,843
====== ====== ======= ======
NET EARNINGS
PER COMMON
SHARE:
BASIC EARNINGS
FROM
CONTINUING
OPERATIONS $0.36 $0.30 $0.49 $0.34
DISCONTINUED
OPERATION (0.02) (0.02) (0.04) (0.03)
NET EARNINGS
PER COMMON
SHARE -BASIC $0.34 $0.28 $0.45 $0.31
===== ===== ===== =====
DILUTED
EARNINGS FROM
CONTINUING
OPERATIONS $0.35 $0.30 $0.48 $0.34
DISCONTINUED
OPERATION (0.01) (0.02) (0.03) (0.03)
NET EARNINGS
PER COMMON
SHARE -
DILUTED $0.34 $0.28 $0.45 $0.31
===== ===== ===== =====
WEIGHTED
AVERAGE NUMBER
OF COMMON
SHARES 22,570,886 18,814,723 22,493,031 18,705,997
WEIGHTED
AVERAGE NUMBER
OF COMMON AND
DILUTIVE
SHARES 23,529,898 20,014,439 22,584,666 18,720,479
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per
share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
2010 2009 2010 2009
---- ---- ---- ----
(Unaudited) (Unaudited)
EARNINGS FROM CONTINUING
OPERATIONS
------------------------
GAAP EARNINGS FROM
CONTINUING OPERATIONS $8,061 $5,638 10,928 6,425
RESTRUCTURING AND
INTEGRATION EXPENSES (NET
OF TAX) 774 1,122 1,226 1,829
LOSS FROM EUROPE
DIVESTITURE (NET OF TAX) - - 47 -
GAIN FROM SALE OF PREFERRED
STOCK INVESTMENT (NET OF
TAX) - (1,402) - (1,402)
GAIN FROM SALE OF BUILDINGS
(NET OF TAX) (125) (157) (398) (315)
GAIN FROM DEBENTURE
REPURCHASE (NET OF TAX) - (24) - (24)
--- --- --- ---
NON-GAAP EARNINGS FROM
CONTINUING OPERATIONS $8,710 $5,177 $11,803 $6,513
====== ====== ======= ======
DILUTED EARNINGS PER SHARE
FROM CONTINUING OPERATIONS
---------------------------
GAAP DILUTED EARNINGS PER
SHARE FROM CONTINUING
OPERATIONS $0.35 $0.30 $0.48 $0.34
RESTRUCTURING AND
INTEGRATION EXPENSES (NET
OF TAX) 0.04 0.05 0.06 0.10
LOSS FROM EUROPE
DIVESTITURE (NET OF TAX) - - - -
GAIN FROM SALE OF PREFERRED
STOCK INVESTMENT (NET OF
TAX) - (0.07) - (0.07)
GAIN FROM SALE OF BUILDINGS
(NET OF TAX) (0.01) (0.01) (0.02) (0.02)
GAIN FROM DEBENTURE
REPURCHASE (NET OF TAX) - - - -
--- --- --- ---
NON-GAAP DILUTED EARNINGS
PER SHARE FROM CONTINUING
OPERATIONS $0.38 $0.27 $0.52 $0.35
===== ===== ===== =====
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,
2010 2009
---- ----
(Unaudited)
ASSETS
------
CASH $14,717 $10,618
ACCOUNTS RECEIVABLE, GROSS 182,056 131,785
ALLOWANCE FOR DOUBTFUL ACCOUNTS 8,518 6,962
----- -----
ACCOUNTS RECEIVABLE, NET 173,538 124,823
INVENTORIES 218,138 199,752
ASSETS HELD FOR SALE 433 1,405
OTHER CURRENT ASSETS 26,828 27,616
TOTAL CURRENT ASSETS 433,654 364,214
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 61,776 61,478
GOODWILL AND OTHER INTANGIBLES 13,541 13,805
OTHER ASSETS 41,195 44,962
TOTAL ASSETS $550,166 $484,459
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
NOTES PAYABLE $69,795 $58,430
CURRENT PORTION OF LONG TERM DEBT 17,450 67
ACCOUNTS PAYABLE TRADE 85,364 54,381
ACCRUED CUSTOMER RETURNS 34,612 20,442
OTHER CURRENT LIABILITIES 74,020 71,303
TOTAL CURRENT LIABILITIES 281,241 204,623
------- -------
LONG-TERM DEBT 284 17,908
ACCRUED ASBESTOS LIABILITY 24,135 24,874
OTHER LIABILITIES 43,234 43,176
TOTAL LIABILITIES 348,894 290,581
------- -------
TOTAL STOCKHOLDERS' EQUITY 201,272 193,878
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $550,166 $484,459
======== ========
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(In thousands)
THREE MONTHS ENDED
June 30,
2010 2009
---- ----
(unaudited)
Revenues
--------
Engine Management $152,815 $122,986
Temperature Control 73,926 65,661
Europe - 7,325
All Other 4,307 1,526
----- -----
$231,048 $197,498
======== ========
Gross Margin
------------
Engine Management $37,488 24.5% $31,077 25.3%
Temperature Control 17,707 24.0% 11,462 17.5%
Europe - 1,871 25.5%
All Other 3,194 1,996
----- -----
$58,389 25.3% $46,406 23.5%
======= =======
Selling, General &
Administrative
------------------
Engine Management $26,284 17.2% $22,106 18.0%
Temperature Control 10,002 13.5% 8,443 12.9%
Europe - 1,749 23.9%
All Other 5,517 4,515
----- -----
41,803 18.1% 36,813 18.6%
Restructuring &
Integration 1,289 0.6% 1,210 0.7%
$43,092 18.7% $38,023 19.3%
======= =======
Operating Profit
----------------
Engine Management $11,205 7.3% $8,972 7.3%
Temperature Control 7,705 10.4% 3,019 4.6%
Europe - 122 1.7%
All Other (2,324) (2,520)
------ ------
16,586 7.2% 9,593 4.9%
Restructuring &
Integration 1,289 0.6% 1,210 0.7%
$15,297 6.6% $8,383 4.2%
======= ======
(In thousands)
SIX MONTHS ENDED
June 30,
2010 2009
---- ----
(unaudited)
Revenues
--------
Engine Management $289,912 $247,299
Temperature Control 113,941 105,921
Europe - 14,046
All Other 6,546 2,454
----- -----
$410,399 $369,720
======== ========
Gross Margin
------------
Engine Management $70,622 24.4% $61,603 24.9%
Temperature Control 25,960 22.8% 17,708 16.7%
Europe - 3,698 26.3%
All Other 5,625 4,290
----- -----
$102,207 24.9% $87,299 23.6%
======== =======
Selling, General &
Administrative
------------------
Engine Management $49,437 17.1% $44,107 17.8%
Temperature Control 17,910 15.7% 15,827 14.9%
Europe - 3,332 23.7%
All Other 11,121 9,566
------ -----
78,468 19.1% 72,832 19.7%
Restructuring &
Integration 2,042 0.5% 2,373 0.6%
$80,510 19.6% $75,205 20.3%
======= =======
Operating Profit
----------------
Engine Management $21,185 7.3% $17,495 7.1%
Temperature Control 8,050 7.1% 1,881 1.8%
Europe - 366 2.6%
All Other (5,496) (5,275)
------ ------
23,739 5.8% 14,467 3.9%
Restructuring &
Integration 2,042 0.5% 2,373 0.6%
$21,697 5.3% $12,094 3.3%
======= =======