Standard Motor Products, Inc. Announces First Quarter 1999 Earnings
22 April 1999
Standard Motor Products, Inc. Announces First Quarter 1999 Earnings, A Quarterly Dividend, and the Acquisition of Lemark Auto Accessories
NEW YORK, April 21 -- Standard Motor Products, Inc.
automotive replacement parts manufacturer and distributor,
reported that sales for the first quarter of 1999, the three months ended
March 31, 1999, were $176.8 million, 40.3% higher than sales of $126.0 million
during the comparable quarter a year ago. Excluding the revenues from
acquisitions not present in last year's first quarter, sales increased
11.8% in the quarter. Net earnings for the first quarter of 1999 were
$3.6 million or 28 cents per share, 37.5% higher than the $2.7 million or
20 cents per share earned a year ago.
Mr. Lawrence Sills said, "We are pleased with the performance in the
quarter as we had strong sales and earnings in an industry which is just now
showing signs of recovery. The sales increase, which was attributable to our
temperature control business, reflected the addition of Cooper temperature
control products, which we acquired on March 30, 1998, and strong sales
related to a pre-season program in air conditioning. Some of the first
quarter strength may be a pull ahead from future sales, but we will not know
the magnitude of the pull ahead until we are well into the second quarter. We
carried forward a strong order bank for temperature control products into the
second quarter of 1999. Engine Management sales were down slightly, but have
strengthened as we moved through the first quarter."
Mr. Sills added, "The reduction in gross margin percentage from a year ago
was primarily the result of the pre-season program for temperature control,
which included pricing incentives not present in 1998 and a higher mix of
lower margin products. The benefit of the pre-season program is that our
distributors will enter the air conditioning season with well stocked shelves,
which was not the case a year ago, and lost sales should be substantially
reduced." Mr. Sills stated, "We believe margins will improve in the second
quarter and beyond as new pricing takes hold, the pre-season discounts cease,
and inventory cost reductions flow through. We were quite pleased to see the
leverage gained in selling general and administrative expenses, as we achieved
a 4.7 percentage point reduction in these expenses, as a percent of sales."
On the balance sheet, Mr. Sills commented, "Inventories and receivables
are higher than our plan, primarily due to the acquisitions and pre-season
program. However, both of these key elements should be back on plan in the
second quarter, as we remain committed to our goal of reducing inventories and
debt still further in 1999."
In April 1999, Standard Motor Products completed the acquisition of the
assets of Lemark Auto Accessories Limited a UK supplier of wire sets. Lemark,
with annual sales of approximately $4.5 million, strengthens Standard's engine
management business in Europe, which is a continuing focus for future growth.
The Board of Directors has approved payment of a quarterly dividend of
eight cents per share on the common stock outstanding. The dividend will be
paid on June 1, 1999 to stockholders of record on May 14, 1999.
This news release contains certain forward-looking statements that involve
risks and uncertainties. Actual results, events and performance could differ
materially from those contemplated by these forward-looking statements. Among
the factors that could cause actual results, events and performance to differ
materially are risks and uncertainties discussed in this release and those
detailed from time-to-time in prior public statements and the Company's
filings with the Securities and Exchange Commission, including the Company's
annual report on Form 10-K and the Company's quarterly reports on Form 10-Q.
STANDARD MOTOR PRODUCTS, INC.
FINANCIAL SUMMARY
(Dollars in thousands) THREE MONTHS
ENDED MARCH 31,
1999 1998
NET SALES $176,789 $126,045
COST OF SALES 123,569 82,255
GROSS PROFIT 53,220 43,790
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 44,432 37,505
OPERATING INCOME 8,788 6,285
OTHER INCOME
(EXPENSE) - NET (313) 232
INTEREST EXPENSE 3,441 3,375
NET EARNINGS BEFORE
TAXES AND MINORITY INTEREST 5,034 3,142
TAXES BASED ON EARNINGS 1,248 371
MINORITY INTEREST (138) (118)
NET EARNINGS $3,648 $2,653
NET EARNINGS PER COMMON SHARE:
BASIC $0.28 $0.20
DILUTED $0.28 $0.20