EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1
 
 
For Immediate Release
For more information, contact:
James J. Burke
Standard Motor Products, Inc.
(718) 392-0200

Standard Motor Products, Inc. Announces
Fourth Quarter and Year End 2014 Results and a
New Stock Repurchase Program

New York, NY, February 25, 2015......Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and for the year ended December 31, 2014.

Consolidated net sales for the fourth quarter of 2014 were $218.1 million, compared to consolidated net sales of $218.7 million during the comparable quarter in 2013. Earnings from continuing operations for the fourth quarter of 2014 were $11.5 million or 50 cents per diluted share, compared to $9.4 million or 40 cents per diluted share in the fourth quarter of 2013. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the fourth quarter of 2014 were $11.4 million or 49 cents, compared to $9.7 million or 42 cents per diluted share in the fourth quarter of 2013.

37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
 
Consolidated net sales for 2014 were $980.4 million, compared to consolidated net sales of $983.7 million in 2013. Earnings from continuing operations for 2014 were $52.9 million or $2.28 per diluted share, compared to $53 million or $2.28 per diluted share in 2013. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for 2014 and 2013 were $58.7 million or $2.52 per diluted share and $54.1 million or $2.32 per diluted share, respectively.

Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “We are pleased with our fourth quarter results. To begin with, our sales equaled a very strong quarter from a year ago. Engine Management, for example, had a 14% increase in the fourth quarter of 2013, above our normal growth pattern, and we matched the same sales figure this year. At the same time, we had improvements in gross margin and operating profit, leading to a 16.7% increase in diluted earnings per share, excluding special items, for the quarter, from 42 cents to 49 cents.

“For the full year, despite disappointing sales, we achieved an 8.6% increase in diluted earnings per share, excluding special items. Sales were slightly below 2013, and below our forecast of low to mid-single digit annual growth. A major contributing factor was the second cool summer in a row, which led to lower Temperature Control volume. However, as a result of continued improvement in manufacturing, purchasing, and expense control, our diluted earnings per share, excluding special items, increased from $2.32 to $2.52, which is an all-time record for our company.

“We made three acquisitions early in 2014—Pensacola Fuel Injectors, a rebuilder of diesel fuel injectors; Annex Manufacturing, an importer and distributor of Temperature Control products; and the creation of a 50/50 joint venture with Gwo Yng, a leading Chinese manufacturer of Temperature Control products. All three are now fully integrated into our company, and we look forward to achieving additional benefits in 2015.
 
“Several weeks ago, we announced the appointment of Eric Sills as President of the Company. His previous position was Vice President Global Operations, where he was responsible for all manufacturing, distribution, engineering, and supply chain management, both in the U.S. and worldwide. We are confident that Eric’s skill, experience, and knowledge of the industry makes him an ideal candidate to help lead the company into the future.

“Finally, on February 2, we announced an increase in our quarterly dividend from 13 cents to 15 cents, reflecting our confidence in the Company’s future. We are pleased that we can continue to return value to our shareholders.”

The Board of Directors has authorized the purchase of up to an additional $10 million of its common stock under a stock repurchase program. This increase is in addition to the completed $10 million repurchase program authorized by the Board in February 2014. Stock will be purchased from time to time, in the open market or through private transactions, as market conditions warrant. The Company intends to fund the stock repurchase program through its revolving credit facility. The stock repurchase program may be suspended or discontinued at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes, including funding existing equity compensation plans.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, February 25, 2015. The dial-in number is 877-876-9176 (domestic) or 785-424-1667 (international). The playback number is 800-839-3735 (domestic) or 402-220-2977 (international). The conference ID # is STANDARD.
 
Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Standard Motor Products cautions investors that any forward-looking statements made by the company, including those that may be made in this press release, are based on management’s expectations at the time they are made, but they are subject to risks and uncertainties that may cause actual results, events or performance to differ materially from those contemplated by such forward looking statements. Among the factors that could cause actual results, events or performance to differ materially from those risks and uncertainties discussed in this press release are those detailed from time-to-time in prior press releases and in the company’s filings with the Securities and Exchange Commission, including the company’s annual report on Form 10-K and quarterly reports on Form 10-Q. By making these forward-looking statements, Standard Motor Products undertakes no obligation or intention to update these statements after the date of this release.

###
 
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Operations

(In thousands, except per share amounts)

   
THREE MONTHS ENDED
    
TWELVE MONTHS ENDED
  
   
DECEMBER 31,
    
DECEMBER 31,
  
   
2014
    
2013
    
2014
    
2013
  
   
(Unaudited)
    
(Unaudited)
  
NET SALES
  
$
218,054
    
$
218,708
    
$
980,392
    
$
983,704
  
                                 
COST OF SALES
    
150,960
      
151,959
      
690,762
      
693,250
  
                                 
GROSS PROFIT
    
67,094
      
66,749
      
289,630
      
290,454
  
                                 
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
48,273
      
50,443
      
193,525
      
201,256
  
LITIGATION CHARGE
    
-
      
-
      
10,650
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
128
      
826
      
1,197
      
3,357
  
OTHER INCOME , NET
    
279
      
256
      
1,080
      
1,022
  
                                 
OPERATING INCOME
    
18,972
      
15,736
      
85,338
      
86,863
  
                                 
OTHER NON-OPERATING INCOME (EXPENSE), NET
    
(908
)
    
28
      
(1,969
)
    
1
  
                                 
INTEREST EXPENSE
    
411
      
281
      
1,616
      
1,902
  
                                 
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
17,653
      
15,483
      
81,753
      
84,962
  
                                 
PROVISION FOR INCOME TAXES
    
6,136
      
6,092
      
28,854
      
31,919
  
                                 
EARNINGS FROM CONTINUING OPERATIONS
    
11,517
      
9,391
      
52,899
      
53,043
  
                                 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(419
)
    
(455
)
    
(9,870
)
    
(1,593
)
                                 
NET EARNINGS
  
$
11,098
    
$
8,936
    
$
43,029
    
$
51,450
  
                                 
NET EARNINGS PER COMMON SHARE:
                                
                                 
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.50
    
$
0.41
    
$
2.31
    
$
2.31
  
DISCONTINUED OPERATION
    
(0.02
)
    
(0.02
)
    
(0.43
)
    
(0.07
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.48
    
$
0.39
    
$
1.88
    
$
2.24
  
                                 
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.50
    
$
0.40
    
$
2.28
    
$
2.28
  
DISCONTINUED OPERATION
    
(0.02
)
    
(0.02
)
    
(0.43
)
    
(0.07
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.48
    
$
0.38
    
$
1.85
    
$
2.21
  
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,892,645
      
23,061,533
      
22,899,516
      
22,974,690
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
23,256,486
      
23,366,587
      
23,239,925
      
23,270,067
  
 
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income

(In thousands)
 
   
THREE MONTHS ENDED
        
TWELVE MONTHS ENDED
      
   
DECEMBER 31,
        
DECEMBER 31,
      
   
2014
        
2013
        
2014
        
2013
      
   
(unaudited)
        
(unaudited)
      
Revenues
                                
Engine Management
  
$
175,875
        
$
175,747
        
$
709,263
        
$
711,245
      
Temperature Control
    
39,742
          
38,309
          
259,065
          
262,537
      
All Other
    
2,437
          
4,652
          
12,064
          
9,922
      
   
$
218,054
        
$
218,708
        
$
980,392
        
$
983,704
      
                                                 
Gross Margin
                                                
Engine Management
  
$
56,001
      
31.8
%
  
$
55,546
      
31.6
%
  
$
220,145
      
31.0
%
  
$
218,294
      
30.7
%
Temperature Control
    
7,403
      
18.6
%
    
6,326
      
16.5
%
    
55,838
      
21.6
%
    
58,150
      
22.1
%
All Other
    
3,690
              
4,877
              
13,647
              
14,010
          
   
$
67,094
      
30.8
%
  
$
66,749
      
30.5
%
  
$
289,630
      
29.5
%
  
$
290,454
      
29.5
%
                                                                 
Selling, General & Administrative
                                                                
Engine Management
  
$
29,474
      
16.8
%
  
$
31,273
      
17.8
%
  
$
115,330
      
16.3
%
  
$
121,578
      
17.1
%
Temperature Control
    
10,817
      
27.2
%
    
10,078
      
26.3
%
    
49,174
      
19.0
%
    
47,845
      
18.2
%
All Other
    
7,982
              
9,092
              
29,021
              
31,833
          
   
$
48,273
      
22.1
%
  
$
50,443
      
23.1
%
  
$
193,525
      
19.7
%
  
$
201,256
      
20.5
%
                                                                 
Operating Income
                                                                
Engine Management
  
$
26,527
      
15.1
%
  
$
24,273
      
13.8
%
  
$
104,815
      
14.8
%
  
$
96,716
      
13.6
%
Temperature Control
    
(3,414
)
    
-8.6
%
    
(3,752
)
    
-9.8
%
    
6,664
      
2.6
%
    
10,305
      
3.9
%
All Other
    
(4,292
)
            
(4,215
)
            
(15,374
)
            
(17,823
)
        
     
18,821
      
8.6
%
    
16,306
      
7.5
%
    
96,105
      
9.8
%
    
89,198
      
9.1
%
Litigation Charge
    
-
              
-
              
(10,650
)
    
-1.1
%
    
-
          
Restructuring & Integration
    
(128
)
    
-0.1
%
    
(826
)
    
-0.4
%
    
(1,197
)
    
-0.1
%
    
(3,357
)
    
-0.3
%
Other Income, Net
    
279
      
0.1
%
    
256
      
0.1
%
    
1,080
      
0.1
%
    
1,022
      
0.1
%
   
$
18,972
      
8.7
%
  
$
15,736
      
7.2
%
  
$
85,338
      
8.7
%
  
$
86,863
      
8.8
%
 
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

   
THREE MONTHS ENDED
    
TWELVE MONTHS ENDED
  
   
DECEMBER 31,
    
DECEMBER 31,
  
   
2014
    
2013
    
2014
    
2013
  
   
(Unaudited)
    
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
                
                 
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
11,517
    
$
9,391
    
$
52,899
    
$
53,043
  
                                 
LITIGATION CHARGE (NET OF TAX)
    
-
      
-
      
6,390
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
    
76
      
495
      
718
      
2,014
  
REVERSAL OF LT TAX LIABILITY
    
-
      
-
      
(350
)
    
-
  
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    
-
      
-
      
(361
)
    
(374
)
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
    
(157
)
    
(157
)
    
(629
)
    
(629
)
                                 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
11,436
    
$
9,729
    
$
58,667
    
$
54,054
  
                                 
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                                
                                 
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.50
    
$
0.40
    
$
2.28
    
$
2.28
  
                                 
LITIGATION CHARGE (NET OF TAX)
    
-
      
-
      
0.28
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
    
-
      
0.02
      
0.03
      
0.09
  
REVERSAL OF LT TAX LIABILITY
    
-
      
-
      
(0.02
)
    
-
  
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    
-
      
-
      
(0.02
)
    
(0.02
)
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
    
(0.01
)
    
-
      
(0.03
)
    
(0.03
)
                                 
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.49
    
$
0.42
    
$
2.52
    
$
2.32
  
                                 
OPERATING INCOME
                                
                                 
GAAP OPERATING INCOME
  
$
18,972
    
$
15,736
    
$
85,338
    
$
86,863
  
                                 
LITIGATION CHARGE
    
-
      
-
      
10,650
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
128
      
826
      
1,197
      
3,357
  
OTHER INCOME, NET
    
(279
)
    
(256
)
    
(1,080
)
    
(1,022
)
                                 
NON-GAAP OPERATING INCOME
  
$
18,821
    
$
16,306
    
$
96,105
    
$
89,198
  

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS AND OPERATING INCOME BEFORE SPECIAL ITEMS, WHICH ARE NON-GAAP MEASUREMENTS, ARE MEANINGFUL TO INVESTORS BECAUSE THEY PROVIDE A VIEW OF THE COMPANY WITH RESPECT TO ONGOING OPERATING RESULTS. SPECIAL ITEMS REPRESENT SIGNIFICANT CHARGES OR CREDITS THAT ARE IMPORTANT TO AN UNDERSTANDING OF THE COMPANY'S OVERALL OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE NOT RECOGNIZED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHOULD NOT BE VIEWED AS AN ALTERNATIVE TO GAAP MEASURES OF PERFORMANCE.
 
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Balance Sheets

(In thousands)

   
December 31,
    
December 31,
  
   
2014
    
2013
  
   
(Unaudited)
      
         
ASSETS
        
         
CASH
  
$
13,728
    
$
5,559
  
                 
ACCOUNTS RECEIVABLE, GROSS
    
132,893
      
132,170
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
6,369
      
6,969
  
ACCOUNTS RECEIVABLE, NET
    
126,524
      
125,201
  
                 
INVENTORIES
    
278,051
      
269,447
  
OTHER CURRENT ASSETS
    
47,730
      
45,870
  
                 
TOTAL CURRENT ASSETS
    
466,033
      
446,077
  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    
64,611
      
63,646
  
GOODWILL AND OTHER INTANGIBLES, NET
    
89,377
      
72,866
  
OTHER ASSETS
    
53,530
      
32,934
  
                 
TOTAL ASSETS
  
$
673,551
    
$
615,523
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
NOTES PAYABLE
  
$
56,558
    
$
21,406
  
CURRENT PORTION OF LONG TERM DEBT
    
175
      
59
  
ACCOUNTS PAYABLE
    
70,674
      
71,469
  
ACCRUED CUSTOMER RETURNS
    
30,621
      
31,464
  
OTHER CURRENT LIABILITIES
    
92,801
      
95,918
  
                 
TOTAL CURRENT LIABILITIES
    
250,829
      
220,316
  
                 
LONG-TERM DEBT
    
83
      
16
  
ACCRUED ASBESTOS LIABILITIES
    
33,462
      
23,919
  
OTHER LIABILITIES
    
15,024
      
21,840
  
                 
TOTAL LIABILITIES
    
299,398
      
266,091
  
                 
TOTAL STOCKHOLDERS' EQUITY
    
374,153
      
349,432
  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
673,551
    
$
615,523
  
 
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows

(In thousands)

   
TWELVE MONTHS ENDED
  
   
DECEMBER 31,
  
   
2014
    
2013
  
   
(Unaudited)
  
         
CASH FLOWS FROM OPERATING ACTIVITIES
        
         
NET EARNINGS
  
$
43,029
    
$
51,450
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
17,295
      
17,595
  
OTHER
    
13,148
      
12,773
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
1,755
      
(27,278
)
INVENTORY
    
(6,712
)
    
(6,094
)
ACCOUNTS PAYABLE
    
(4,329
)
    
12,497
  
OTHER
    
(17,199
)
    
(3,327
)
NET CASH PROVIDED BY OPERATING ACTIVTIES
    
46,987
      
57,616
  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
                 
CAPITAL EXPENDITURES
    
(13,904
)
    
(11,410
)
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(37,726
)
    
(12,760
)
OTHER INVESTING ACTIVITIES
    
430
      
(592
)
NET CASH USED IN INVESTING ACTIVITIES
    
(51,200
)
    
(24,762
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
                 
NET CHANGE IN DEBT
    
35,334
      
(19,166
)
PURCHASE OF TREASURY STOCK
    
(10,000
)
    
(6,864
)
DIVIDENDS PAID
    
(11,905
)
    
(10,107
)
OTHER FINANCING ACTIVITIES
    
1,887
      
(3,158
)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
15,316
      
(39,295
)
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
(2,934
)
    
(1,074
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
8,169
      
(7,515
)
CASH AND CASH EQUIVALENTS at beginning of year
    
5,559
      
13,074
  
CASH AND CASH EQUIVALENTS at end of year
  
$
13,728
    
$
5,559