Standard Motor Products Announces Q3 2000 Earnings
20 October 2000
Standard Motor Products, Inc. Announces Third Quarter 2000 Earnings and a Quarterly Dividend
NEW YORK--Oct. 19, 2000--Standard Motor Products, Inc. automotive replacement parts manufacturer and distributor, reported net sales for the three months ended September 30, 2000 were $166.8 million, 12.1% lower than net sales of $189.8 million during the comparable quarter of a year ago. Net earnings for the third quarter of 2000 were $4.9 million or 40 cents per diluted share, as compared to the net earnings before extraordinary loss of $10.6 million or 74 cents per diluted share earned in the third quarter of 1999.Sales for the nine months ended September 30, 2000 were $489.9 million, 14.4% lower than net sales of $572.3 million in the comparable period in 1999. Net earnings for the nine months in 2000 were $11.8 million or 98 cents per diluted share, as compared to $25.2 million or $1.86 per diluted share a year ago. Excluding extraordinary losses on the early extinquishment of debt in 2000 and 1999, net earnings for the nine months in 2000 were $12.3 million or $1.02 per diluted share, as compared to net earnings of $26.3 million or $1.94 per diluted share a year ago.
Mr. Lawrence Sills, President, said, "The sales shortfall in the quarter was entirely in temperature control products. The combination of customer inventory reduction efforts, and a very cool and wet summer season in the northeast and mid-west, led to the sales shortfall."
Mr. Sills added, "The Company's new customer return policies and procedures have yielded favorable results to date, and we are optimistic for year over year cost reductions. However, the full impact of returns from the distribution channel will not be known until the fourth quarter."
Mr. Sills stated, "Gross margins for the quarter were 31.1%, 1.6 points lower than the comparable quarter of the prior year. The gross margins in the third quarter were severely impacted by underabsorbed overheads in our Temperature Control line due to the net sales shortfall for the year. Gross margins in our Engine Management line improved nicely, as we prepare to begin selling a new customer in October 2000. Year-to-date gross margins were 32% as compared to 31.5% in the prior year."
Mr. Sills said, "Selling, general and administrative expenses (SG&A) in the quarter were approximately $2.7 million lower at $40.2 million as compared to $42.9 million in the prior year. Year-to-date SG&A expenses were $126.4 million in 2000 as compared to $130.3 million in 1999."
Mr. Sills commented, "Our investment in inventory, up $32 million this year, reflects the unsold inventory from a poor temperature control season and the required pipeline build-up for the new customer. Inventories are planned to be dramatically reduced over the next several quarters once the new customer launch is behind us and the 2001 temperature control season rolls out."
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 December 1, 2000 to stockholders of record on November 15, 2000.
Finally, the Board of Directors regretfully announce the passing of its Chairman, Mr. Nathaniel L. Sills. Mr. Sills served the Company, with integrity, skill, and honor, for 57 years.
Standard Motor Products will hold a conference call at 10:00 AM, Eastern Standard Time, on Friday, October 20, 2000. The dial in number is 1-800-237-0767 and the ID No. is D414. The playback number is 1-800-695-2185.
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
September 30, December 31,
2000 1999
Cash and investments $ 5,715 $ 40,380
Accounts receivable, gross 169,027 124,246
Allowance for doubtful accounts 5,831 4,611
Accounts receivable, net 163,196 119,635
Inventories 219,880 188,400
Other current assets 27,538 26,278
Total current assets 416,329 374,693
Property, plant and
equipment, net 104,905 106,578
Other assets 69,905 74,750
Total assets $ 591,139 $ 556,021
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 65,167 $ 2,645
Current portion of long term debt 14,661 28,912
Accounts payable trade 50,347 41,708
Accrued customer returns 27,019 22,698
Other current liabilities 64,563 72,924
Total current liabilities 221,757 168,887
Long-term debt 150,308 163,868
Postretirement & other liabilities 20,623 19,748
Total liabilities 392,688 352,503
Total stockholders' equity 198,451 203,518
Total liabilities and stockholders'
equity $ 591,139 $ 556,021
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Earnings
(Dollars in thousands,
except per share amounts)
THREE-MONTHS ENDED NINE-MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
NET SALES $166,819 $189,759 $489,863 $572,262
COST OF SALES 114,905 127,627 332,964 391,821
GROSS PROFIT 51,914 62,132 156,899 180,441
SELLING, GENERAL
& ADMINISTRATIVE
EXPENSES 40,221 42,892 126,419 130,253
OPERATING INCOME 11,693 19,240 30,480 50,188
OTHER INCOME (EXPENSE)
- NET 151 14 636 (815)
INTEREST EXPENSE 4,959 4,017 13,613 12,260
EARNINGS BEFORE TAXES,
MINORITY INTEREST AND
EXTRAORDINARY ITEM 6,885 15,237 17,503 37,113
INCOME TAXES 2,066 4,588 5,251 10,604
MINORITY INTEREST 39 (76) 27 (255)
INCOME BEFORE
EXTRAORDINARY ITEM 4,858 10,573 12,279 26,254
EXTRAORDINARY LOSS ON
EARLY EXTINQUISHMENT
OF DEBT - 1,060 501 1,060
NET INCOME $4,858 $9,513 $11,778 $25,194
NET EARNINGS PER COMMON
SHARE:
BASIC EARNINGS PER
SHARE BEFORE
EXTRAORDINARY ITEM $ 0.41 $0.80 $ 1.02 $ 2.00
EXTRAORDINARY LOSS ON
EARLY RETIREMENT OF
DEBT - ($0.08) ($0.04) ($0.08)
NET EARNINGS PER
COMMON SHARE - BASIC $ 0.41 $0.72 $0.98 $1.92
DILUTED EARNINGS PER
SHARE BEFORE
EXTRAORDINARY ITEM $ 0.40 $0.74 $1.02 $1.94
EXTRAORDINARY LOSS ON
EARLY RETIREMENT OF
DEBT - ($0.07) (0.04) ($0.08)
NET EARNINGS PER COMMON
SHARE - DILUTED $ 0.40 $0.67 $0.98 $1.86
Weighted Average Number
of Common Shares 11,697,788 13,157,864 12,013,886 13,127,581
Weighted Average
Number of Common and
Dilutive Shares 14,493,788 15,141,598 12,062,000 13,852,370