Standard Motor Products Announces 2nd Quarter 1997 Earnings
18 July 1997
Standard Motor Products Announces 2nd Quarter 1997 Earnings
NEW YORK, July 18 -- Standard Motor Products, Inc.
, automotive replacement parts manufacturer, reported that sales
for the second quarter of 1997, the three months ended June 3O,l997, were
$220 million, 7.2 % higher than sales of $205.3 million during the comparable
quarter of a year ago. Excluding the revenues from acquisitions not present
in the quarter's results a year ago, sales actually declined 1.0% in the
quarter. Net earnings for the second quarter of 1997 were $6.5 million or
50 cents per share, 6.9% higher than last year's net earnings of $6.1 million
or 46 cents per share.
Sales for six months in 1997 were $409 million, 7.7% higher than sales of
$379.7 million in 1996 excluding revenues from acquisitions not present in
1996, revenues in the first half of 1997 declined 1.8%, compared with a year
ago. Net earnings for the six months in 1997 were $5.6 million or 43 cents
per share, 46.3% lower than net earnings of $1O.4 million or 79 cents per
share in 1996.
Mr. Lawrence Sills, President, said "although the general market weakness
carried over into the second quarter, there were signs late in the quarter
which lead us to be optimistic for sales growth in the second half of 1997.
In spite of the sales weakness, we are quite pleased that our efforts to
accelerate synergies from our recent acquisitions, to control costs and reduce
inventories, have resulted in nearly a 7% improvement in earnings
compared with a year ago, as well as a dramatic improvement in quarterly
earnings, from the seven cent loss in the first quarter of 1997 to a fifty
cent profit in the second."
He added, "the results for the second quarter were very encouraging. They
reflected improvements versus the first quarter in every element of the income
statement and meaningful improvements were achieved in working capital
management. Gross margins in the second quarter of 32.4% increased by 2/10ths
of a point compared with a year ago. The margin improved by 1.2 points
compared to the first quarter of this year, while at the same time we reduced
inventories by 6% or $15 million.
He further stated, "selling, general and administrative expenses (SG&A),
although $4.1 million higher than a year ago, were well under control. The
increase is fully explained by the customer acquisition costs related to new
business gained in late 1996 and the SG&A expense related to the Filko
acquisition. Excluding these two elements, SG&A was unchanged compared to a
year ago. Both of these elements of cost will be reduced, as strict controls
on new customer acquisition costs impact future quarters and Filko becomes
fully consolidated. Even with this quarter's increase we still gained
leverage, as SG&A as a percent of sales declined slightly. Interest expense
increased by $600,000 primarily reflecting higher interest rates. The Company
had a lower tax rate this quarter, as we are benefiting from the tax loss
carry forward in Canada."
Mr. Sills said, "we are finally seeing the benefits of our asset
management efforts. During the first half of this year we have required
$50 million less cash to operate our business than a year ago, primarily
through lower inventories, reduced receivables, outstanding and better
payables management. We fully expect these efforts to continue."
Mr. Sills added, "we are guardedly optimistic on the sales front for the
near term and we expect our continuing cost and asset reduction efforts to
benefit future quarters."
Standard Motors Products, Inc.
Financial Summary
Three Months Ended June 30,
1997 1996
Net Sales $220,022,000 $205,252,000
Cost of Sales 148,805,000 139,081,000
Gross Profit 71,217,000 66,171,000
Selling, General &
Administrative Expenses 58,177,000 54,028,000
Operating Income 13,040,000 12,143,000
Other Income(Expense-Net) 76,000 686,000
13,116,000 12,829,000
Interest Expense 5,350,000 4,722,000
Earnings Before Taxes And
Minority Interest 7,766,000 8,107,000
Minority Interest (32,000) --
Taxes Based On Earnings 1,214,000 2,005,000
Net Income $6,520,000 $6,102,000
Earnings Per Share* $0.50 $0.46
Six Months Ended June 30,
1997 1996
Net Sales $409,047,000 $379,692,000
Cost Of Sales 278,914,000 257,621,000
Gross Profit 130,133,000 122,071,000
Selling, General &
Administrative Expenses 113,575,000 100,580,000
Operating Income 16,558,000 21,491,000
Other Income (Expense)--Net 599,000 1,316,000
17,157,000 22,807,000
Interest Expense 10,378,000 8,567,000
Earnings Before Taxes and
Minority Interest 6,779,000 14,240,000
Minority Interest (178,000) ---
Taxes Based on Earnings 1,017,000 3,845,000
Net Income $5,584,000 $10,395,000
Earnings Per Share* $0.43 $0.79
*Per share earnings based upon average number of shares outstanding
during the periods
Standard Motor Products, Inc.
Condensed Consolidated Balance Sheets
(Dollars in Millions)
Assets
June 30, December 3l,
1997 1996
Cash and investments $2.1 $4.7
Accounts receivable, net 247.2 156.8
Inventories 216.0 229.2
Other current assets 30.5 27.8
Total current assets 495.8 418.5
Property, plant and equipment, net127.7 126.9
Goodwill, net 33.8 34.4
Other assets 42.7 45.0
Total assets $700.0 $624.8
Liabilities and Stockholders' Equity
Short-term debt
(Banks & current long term debt) $130.1 $92.0
Other current liabilities 146.8 114.7
Total current liabilities 275.9 206.7
Long-term debt 171.6 172.4
Other liabilities 24.2 22.8
Total liabilities 471.7 401.9
Minority Interest (0.3) (0.4)
Total stockholders' equity 228.6 223.3
Total liabilities and
stockholders' equity $700.0 $624.8
SOURCE Standard Motor Products, Inc.