Standard Motor Products, Inc. Announces Q1 2000 Earnings
17 April 2000
Standard Motor Products, Inc. Announces First Quarter 2000 Earnings and a Quarterly Dividend
NEW YORK--April 17, 2000--Standard Motor Products, Inc. (NYSE:SMP) automotive replacement parts manufacturer and distributor, reported net sales for the first quarter of 2000, the three months ended March 31, 2000 were $146.8 million, 17% lower than net sales of $176.8 million during the comparable quarter a year ago. Net losses for the first quarter of 2000 were $116,000 or 1 cent per diluted share, as compared to the net earnings of $3.6 million or 28 cents per diluted share in the first quarter of 1999. Excluding $501,000 in the first quarter of 2000 for a one-time prepayment penalty and write-off of unamortized fees for the retirement of a 10.22% Senior Note, net earnings per diluted share would have been 4 cents higher or 3 cents per diluted share.Mr. Lawrence Sills, President, said, "The $30 million reduction in net sales, primarily of temperature control products, reflects the Company's curtailment of a pre-season dating program that was offered to customers in 1999. The Company was able to reduce the early incentive dating program due to the completion of its new Texas distribution facility in December 1999, increasing daily shipping capacity to match customer demand during the summer season. In 1999, a substantial percentage of the year's sales were pushed forward into the pre-season, and we are anticipating a more normal sales flow this year."
Mr. Sills stated, "Gross margins for the quarter of 32.2% were 2.1 points better than the comparable quarter of the prior year. Gross margin percentages improved in both engine management and temperature control divisions from favorable pricing and cost reduction programs implemented."
Mr. Sills said, "Selling, general and administrative expenses (SG&A) were $43.2 million, $1.2 million lower than the $44.4 million in SG&A expenses a year ago. Due to the reduced net sales volume, SG&A expenses increased as a percentage of net sales from 25.1% to 29.4%."
On the balance sheet, Mr. Sills commented, "Inventories increased approximately $30 million, entirely in temperature control products, in anticipation of the summer air-conditioning season. The Company is committed to improvements in working capital and will be monitoring inventory closely as we enter the summer season."
As previously announced, the Company prepaid, in its entirety, a 10.22% Senior Note of $14 million, with a $572,000 prepayment penalty.
The Board of Directors has approved payment of a quarterly dividend of nine cents per share on the common stock outstanding. The dividend will be paid on June 1, 2000 to stockholders of record on May 15, 2000.
Standard Motor Products will hold a conference call at 11:00 AM, Eastern Standard Time, on Monday, April 17, 2000. The dial in number is 800-795-1259. The playback number is 888-566-0177.
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.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
THREE MONTHS END
MARCH 31,
2000 1999
NET SALES $146,759 $176,789
COST OF SALES 99,440 123,569
GROSS PROFIT 47,319 53,220
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 43,183 44,432
OPERATING INCOME 4,136 8,788
OTHER INCOME (EXPENSE) - NET 424 (313)
INTEREST EXPENSE 3,907 3,441
EARNINGS BEFORE TAXES, MINORITY INTEREST
AND EXTRAORDINARY ITEM 653 5,034
INCOME TAXES 229 1,248
MINORITY INTEREST (39) (138)
INCOME BEFORE EXTRAORDINARY ITEM 385 3,648
EXTRAORDINARY LOSS ON EARLY EXTINQUISHMENT
OF DEBT (501) -
NET (LOSS)INCOME ($116) $3,648
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS PER SHARE BEFORE
EXTRAORDINARY ITEM $0.03 $0.28
EXTRAORDINARY LOSS ON EARLY
RETIREMENT OF DEBT ($0.04) -
NET EARNINGS PER COMMON SHARE - BASIC ($0.01) $0.28
DILUTED EARNINGS PER SHARE
BEFORE EXTRAORDINARY ITEM $0.03 $0.28
EXTRAORDINARY LOSS ON EARLY
RETIREMENT OF DEBT (0.04) -
NET EARNINGS PER COMMON SHARE - DILUTED ($0.01) $0.28
Weighted Average Number of Common Shares 12,409,547 13,087,650
Weighted Average Number of Common
and Dilutive Shares 12,409,547 13,183,235
STANDARD MOTOR PRODUCTS,INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
A S S E T S
March 31, December 31,
2000 1999
Cash and investments $ 3,197 $ 40,380
Accounts receivable, gross 154,206 124,246
Allowance for doubtful accounts 5,735 4,611
Accounts receivable, net 148,471 119,635
Inventories 218,190 188,400
Other current assets 26,645 26,278
Total current assets 396,503 374,693
Property, plant and equipment, net 107,817 106,578
Deferred stocklift 2,315 3,003
Deferred new business 2,525 2,998
Goodwill 41,856 41,619
Other assets 26,030 27,130
Total assets $577,046 $556,021
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable 32,483 2,645
Current portion of long term debt 14,597 28,912
Accounts payable trade 71,400 41,708
Accrued customer returns 19,924 22,698
Other current liabilities 69,778 72,924
Total current liabilities 208,182 168,887
Long-term debt 153,171 163,868
Postretirement & other
L.T. liabilities 20,335 19,748
Total liabilities 381,688 352,503
Total stockholders' equity 195,358 203,518
Total liabilities and
stockholders' equity $577,046 $556,021