Standard Motor Products, Inc. Announces Second Quarter 2000 Earnings and a Quarterly Dividend
20 July 2000
Standard Motor Products, Inc. Announces Second Quarter 2000 Earnings and a Quarterly Dividend
NEW YORK - Standard Motor Products, Inc. automotive replacement parts
manufacturer and distributor, reported net sales for the second quarter of 2000,
the three months ended June 30, 2000 were $176.3 million, 14.3% lower than
net sales of $205.7 million during the comparable quarter a year ago.
Net earnings for the second quarter of 2000 were $7.0 million or
54 cents per diluted share, as compared to the net earnings of $12.0
million or 91 cents per diluted share earned in the second quarter of
1999.
Sales for the six months in 2000 were $323.0 million, 15.5% lower
than net sales of $382.5 million in the comparable period in 1999. Net
earnings for the six months in 2000 were $6.9 million or 57 cents per
diluted share, as compared to $15.7 million or $1.19 per diluted share
a year ago. Excluding $501,000 for the extraordinary loss on early
extinquishment of debt, net earnings for the six months in 2000 per
diluted share would have been 4 cents higher or 61 cents per diluted
share.
Mr. Lawrence Sills, President, said, "The sales shortfall was
essentially in temperature control products and was primarily the
result of our retail customers achieving substantial inventory
reductions. From all indications, our customers' sales are running
equal to or slightly ahead of 1999, so we view this as a one-time
sales adjustment."
Mr. Sills added, "The Company continues to accrue temperature
control customer returns at the 1999 full year experience level while
enforcing new customer return policies and procedures. To date, early
customer return activity is trending favorably against the prior year
but the full impact will not be known until the fourth quarter."
Mr. Sills stated, "Gross margins for the quarter continued the
first quarter favorable trend at 32.7%, 1.1% better than the
comparable quarter of the prior year. Year-to-date gross margins were
1.6% better at 32.5%, as compared to 30.9% in the prior year. These
improvements reflect the previously announced $12 million cost
reduction program implemented for 2000."
Mr. Sills said, "Selling, general and administrative expenses
(SG&A) were $43.0 million, virtually flat as compared to $42.9 million
in the second quarter 1999. Year-to-date SG&A expenses were $86.2
million in 2000 as compared to $87.4 million in 1999. Due to the
reduced net sales volume, SG&A expenses in the first half of 2000
increased as a percentage of net sales from 22.8% to 26.7%."
Mr. Sills commented, "The Engine Management division achieved its
operating profit and working capital targets in the first half of
2000. In addition, the division has been awarded a segment of the
engine management line for a national warehouse distributor. This
program will be launched in the fourth quarter of this year.
Annualized volume for this new business is estimated at $20 million."
On the balance sheet, Mr. Sills commented, "Inventories increased
approximately $34 million, entirely in temperature control products,
due to the net sales shortfall. Temperature control production levels
have been radically reduced for the balance of the year to improve
working capital requirements."
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 September 1, 2000 to stockholders of record
on August 15, 2000.
Standard Motor Products will hold a conference call at 11:00 AM,
Eastern Standard Time, on Thursday, July 20, 2000.
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
June 30, December 31,
2000 1999
-------- ------------
Cash and investments $ 6,081 $ 40,380
Accounts receivable, gross 201,028 124,246
Allowance for doubtful accounts 7,215 4,611
-------- --------
Accounts receivable, net 193,813 119,635
Inventories 222,082 188,400
Other current assets 27,801 26,278
-------- --------
Total current assets 449,777 374,693
-------- --------
Property, plant and equipment, net 106,056 106,578
Deferred stocklift 2,884 3,003
Deferred new business 1,855 2,998
Goodwill 40,705 41,619
Other assets 25,951 27,130
-------- --------
Total assets $627,228 $556,021
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 87,711 $ 2,645
Current portion of long term debt 14,773 28,912
Accounts payable trade 62,970 41,708
Accrued customer returns 28,369 22,698
Other current liabilities 65,538 72,924
-------- --------
Total current liabilities 259,361 168,887
-------- --------
Long-term debt 152,182 163,868
Postretirement & other L.T. liabilities 20,322 19,748
-------- --------
Total liabilities 431,865 352,503
-------- --------
Total stockholders' equity 195,363 203,518
-------- --------
Total liabilities and stockholders' equity $627,228 $556,021
======== ========
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS END
JUNE 30, JUNE 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
NET SALES $ 176,285 $ 205,714 $ 323,044 $ 382,503
COST OF SALES 118,619 140,625 218,059 264,194
------------ ------------ ------------ ------------
GROSS PROFIT 57,666 65,089 104,985 118,309
SELLING,
GENERAL &
ADMINISTRATIVE
EXPENSES 43,015 42,929 86,198 87,361
------------ ------------ ------------ ------------
OPERATING
INCOME 14,651 22,160 18,787 30,948
OTHER INCOME
(EXPENSE) - NET 61 (516) 485 (829)
INTEREST
EXPENSE 4,747 4,802 8,654 8,243
------------ ------------ ------------ ------------
EARNINGS
BEFORE TAXES,
MINORITY
INTEREST
AND
EXTRAORDINARY
ITEM 9,965 16,842 10,618 21,876
INCOME TAXES 2,956 4,768 3,185 6,016
MINORITY INTEREST 27 (41) (12) (179)
------------ ------------ ------------ ------------
INCOME BEFORE
EXTRAORDINARY
ITEM 7,036 12,033 7,421 15,681
EXTRAORDINARY
LOSS ON EARLY
EXTINQUISHMENT
OF DEBT -- -- (501) --
------------ ------------ ------------ ------------
NET (LOSS)
INCOME $ 7,036 $ 12,033 $ 6,920 $ 15,681
============ ============ ============ ============
NET EARNINGS PER
COMMON SHARE:
BASIC EARNINGS
PER SHARE
BEFORE
EXTRAORDINARY
ITEM $ 0.59 $ 0.92 $ 0.61 $ 1.20
EXTRAORDINARY
LOSS ON EARLY
RETIREMENT OF
DEBT -- -- ($ 0.04) --
------------ ------------ ------------ ------------
NET EARNINGS
PER COMMON
SHARE -
BASIC $ 0.59 $ 0.92 $ 0.57 $ 1.20
============ ============ ============ ============
DILUTED
EARNINGS PER
SHARE BEFORE
EXTRAORDINARY
ITEM $ 0.54 $ 0.91 $ 0.61 $ 1.19
EXTRAORDINARY
LOSS ON EARLY
RETIREMENT OF
DEBT -- -- (0.04) --
------------ ------------ ------------ ------------
NET EARNINGS
PER COMMON
SHARE -
DILUTED $ 0.54 $ 0.91 $ 0.57 $ 1.19
============ ============ ============ ============
Weighted
Average Number
of Common
Shares 11,937,798 13,136,458 12,173,673 13,112,189
Weighted Average
Number of
Common and
Dilutive
Shares 14,756,196 13,238,017 12,254,753 13,210,327