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

First Quarter 2018 Results and a Quarterly Dividend

New York, NY, May 3, 2018......Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months ending March 31, 2018.

Consolidated net sales for the first quarter of 2018 were $261.8 million, compared to consolidated net sales of $282.4 million during the comparable quarter in 2017. Earnings from continuing operations for the first quarter of 2018 were $8.6 million or 37 cents per diluted share, compared to $16.4 million or 70 cents per diluted share in the first quarter of 2017. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the first quarter of 2018 were $10.5 million or 46 cents per diluted share, compared to $17.1 million or 74 cents per diluted share in the first quarter of 2017.
 
37-18 Northern Blvd., Long Island City, NY  11101
(718) 392-0200
www.smpcorp.com
 
Mr. Eric P. Sills, Standard Motor Products’ Chief Executive Officer and President stated, “Our overall business experienced declines in sales and margins in the first quarter, compared to the first quarter of 2017, with different dynamics affecting each division. The shortfall is largely due to events that are either timing-related or temporary, as described below.

“Engine Management sales decreased by 5.6% in the first quarter, compared to the first quarter of 2017. Excluding our wire and cable business, which is in general decline due to the product life cycle, the Engine Management business was down 2.7%. As previously reported, a few of our large customers placed heavy pipeline orders during the early months of 2017, as they looked to expand their offering in both depth and breadth. This was not repeated in 2018 and that accounts for the entire shortfall.

“Overall, our major customers reported a sales increase in Engine Management in the low single digits during the first quarter, in line with our long-term forecasts. As we have said, our customers’ sales are a better indicator of our results than their purchases, which can vary significantly quarter to quarter based on ordering patterns.

“Our Engine Management gross margins continue to be impacted by temporary costs associated with the multiple plant moves. On a positive note, in March of this year we were able to fully exit both the Orlando and Nogales facilities, and going forward we will have eliminated these duplicate plant expenses.  The receiving locations are doing well and showing continuous improvement, but are still working towards returning to historic run-rate efficiencies, which we expect to achieve by year-end.
 
“Our Temperature Control sales were down 14% compared with the first quarter of 2017.  The Temperature Control business in the first quarter is comprised almost entirely of pre-season build orders, which reflect the previous year’s selling season and resulting customer inventory levels. 2016 was a very warm summer, and our customers ended that year with below average inventories. Their first quarter 2017 orders were therefore very strong – up 24% from the first quarter of 2016, which makes the comparisons this year quite difficult.  Again, these sales are merely positioning our customers for the summer – ultimately, our year is determined by how hot it gets in-season, and time will tell for 2018.

“Temperature Control gross margin reductions were entirely due to our decreasing of production in response to the cooler 2017 season and the resulting under-absorption of overhead in our factories. Now that the closure of Grapevine is complete and our two Chinese joint ventures are performing well, we expect a return to our more recent healthy margin performance.

“In conclusion, while we are not satisfied with our first quarter results, we believe that the causes are relatively short-term in nature, and that as we continue to implement the initiatives we have begun, we anticipate gradual improvement throughout the balance of the year.”

The Board of Directors has approved payment of a quarterly dividend of 21 cents per share on the common stock outstanding. The dividend will be paid on June 1, 2018 to stockholders of record on May 15, 2018.
 
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, May 3, 2018.  The dial-in number is 877-876-9173 (domestic) or 785-424-1670 (international). The playback number is 800-839-8798 (domestic) or 402-220-6078 (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
  
   
MARCH 31,
  
   
2018
    
2017
  
   
(Unaudited)
  
NET SALES
  
$
261,826
    
$
282,378
  
                 
COST OF SALES
    
189,237
      
198,268
  
                 
GROSS PROFIT
    
72,589
      
84,110
  
                 
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
57,717
      
57,417
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
2,836
      
1,547
  
OTHER INCOME, NET
    
271
      
316
  
                 
OPERATING INCOME
    
12,307
      
25,462
  
                 
OTHER NON-OPERATING INCOME (EXPENSE), NET
    
(31
)
    
880
  
                 
INTEREST EXPENSE
    
632
      
468
  
                 
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
11,644
      
25,874
  
                 
PROVISION FOR INCOME TAXES
    
3,047
      
9,507
  
                 
EARNINGS FROM CONTINUING OPERATIONS
    
8,597
      
16,367
  
                 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(608
)
    
(633
)
                 
NET EARNINGS
  
$
7,989
    
$
15,734
  
                 
NET EARNINGS PER COMMON SHARE:
                
                 
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.38
    
$
0.72
  
DISCONTINUED OPERATION
    
(0.02
)
    
(0.03
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.36
    
$
0.69
  
                 
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.37
    
$
0.70
  
DISCONTINUED OPERATION
    
(0.02
)
    
(0.03
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.35
    
$
0.67
  
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,498,510
      
22,846,595
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
22,967,281
      
23,313,773
  
 
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
(In thousands)

   
THREE MONTHS ENDED
        
   
MARCH 31,
        
   
2018
          
2017
        
   
(Unaudited)
        
Revenues
                        
Engine Management
  
$
199,488
          
$
211,314
        
Temperature Control
    
60,231
            
70,290
        
All Other
    
2,107
            
774
        
   
$
261,826
          
$
282,378
        
                             
Gross Margin
                            
Engine Management
  
$
56,470
    
28.3
%
  
$
64,124
    
30.3
%
Temperature Control
    
13,667
    
22.7
%
    
17,707
    
25.2
%
All Other
    
2,452
            
2,279
        
   
$
72,589
    
27.7
%
  
$
84,110
    
29.8
%
                             
Selling, General & Administrative
                            
Engine Management
  
$
36,264
    
18.2
%
  
$
36,028
    
17.0
%
Temperature Control
    
12,829
    
21.3
%
    
13,006
    
18.5
%
All Other
    
8,624
            
8,383
        
   
$
57,717
    
22.0
%
  
$
57,417
    
20.3
%
                             
Operating Income
                            
Engine Management
  
$
20,206
    
10.1
%
  
$
28,096
    
13.3
%
Temperature Control
    
838
    
1.4
%
    
4,701
    
6.7
%
All Other
    
(6,172
)
          
(6,104
)
      
     
14,872
    
5.7
%
    
26,693
    
9.5
%
Restructuring & Integration
    
(2,836
)
  
-1.1
%
    
(1,547
)
  
-0.5
%
Other Income, Net
    
271
    
0.1
%
    
316
    
0.1
%
   
$
12,307
    
4.7
%
  
$
25,462
    
9.0
%
 
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
 
(In thousands, except per share amounts)

   
THREE MONTHS ENDED
MARCH 31,
  
   
2018
    
2017
  
   
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
            
             
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
8,597
    
$
16,367
  
                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
2,836
      
1,547
  
GAIN FROM SALE OF BUILDINGS
    
(218
)
    
(262
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
(681
)
    
(514
)
                 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
10,534
    
$
17,138
  
                 
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                
                 
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.37
    
$
0.70
  
                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
0.12
      
0.07
  
GAIN FROM SALE OF BUILDINGS
    
(0.01
)
    
(0.01
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
(0.02
)
    
(0.02
)
                 
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.46
    
$
0.74
  
                 
OPERATING INCOME
                
                 
GAAP OPERATING INCOME
  
$
12,307
    
$
25,462
  
                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
2,836
      
1,547
  
OTHER INCOME, NET
    
(271
)
    
(316
)
                 
NON-GAAP OPERATING INCOME
  
$
14,872
    
$
26,693
  
 
MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS, AND OPERATING INCOME, EACH OF WHICH ARE NON-GAAP MEASUREMENTS AND ARE ADJUSTED FOR SPECIAL ITEMS, 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)

   
March 31,
2018
    
December 31,
2017
  
   
(Unaudited)
        
             
ASSETS
            
             
CASH
  
$
26,226
    
$
17,323
  
                 
ACCOUNTS RECEIVABLE, GROSS
    
165,816
      
145,024
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
5,243
      
4,967
  
ACCOUNTS RECEIVABLE, NET
    
160,573
      
140,057
  
                 
INVENTORIES
    
329,784
      
326,411
  
UNRETURNED CUSTOMER INVENTORY
    
18,674
      
-
  
OTHER CURRENT ASSETS
    
12,672
      
12,300
  
                 
TOTAL CURRENT ASSETS
    
547,929
      
496,091
  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    
92,237
      
89,103
  
GOODWILL
    
67,534
      
67,413
  
OTHER INTANGIBLES, NET
    
54,411
      
56,261
  
DEFERRED INCOME TAXES
    
32,469
      
32,420
  
INVESTMENT IN UNCONSOLIDATED AFFILIATES
    
35,703
      
31,184
  
OTHER ASSETS
    
15,917
      
15,095
  
                 
TOTAL ASSETS
  
$
846,200
    
$
787,567
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
               
NOTES PAYABLE
  
$
90,000
    
$
57,000
  
CURRENT PORTION OF OTHER DEBT
    
5,880
      
4,699
  
ACCOUNTS PAYABLE
    
90,718
      
77,990
  
ACCRUED CUSTOMER RETURNS
    
43,031
      
35,916
  
ACCRUED CORE LIABILITY
    
23,751
      
11,899
  
OTHER CURRENT LIABILITIES
    
85,148
      
98,393
  
                 
TOTAL CURRENT LIABILITIES
    
338,528
      
285,897
  
                 
OTHER LONG-TERM DEBT
    
42
      
79
  
ACCRUED ASBESTOS LIABILITIES
    
32,769
      
33,376
  
OTHER LIABILITIES
    
15,352
      
14,561
  
                 
 TOTAL LIABILITIES
    
386,691
      
333,913
  
                 
 TOTAL STOCKHOLDERS' EQUITY
    
459,509
      
453,654
  
                 
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
846,200
    
$
787,567
  
 
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
 
(In thousands)
 
   
THREE MONTHS ENDED
MARCH 31,
  
   
2018
    
2017
  
   
(Unaudited)
  
             
CASH FLOWS FROM OPERATING ACTIVITIES
            
NET EARNINGS
  
$
7,989
    
$
15,734
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH USED IN OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
6,016
      
5,631
  
OTHER
    
4,459
      
3,870
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
(20,367
)
    
(45,325
)
INVENTORY
    
(3,390
)
    
(19,344
)
ACCOUNTS PAYABLE
    
10,674
      
13,664
  
PREPAID EXPENSES AND OTHER CURRENT ASSETS
    
1,559
      
2,065
  
SUNDRY PAYABLES AND ACCRUED EXPENSES
    
(12,997
)
    
(2,269
)
OTHER
    
(95
)
    
(910
)
NET CASH USED IN OPERATING ACTIVITIES
    
(6,152
)
    
(26,884
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(6,472
)
    
-
  
CAPITAL EXPENDITURES
    
(6,903
)
    
(3,234
)
OTHER INVESTING ACTIVITIES
    
-
      
2
  
NET CASH USED IN INVESTING ACTIVITIES
    
(13,375
)
    
(3,232
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
NET CHANGE IN DEBT
    
34,054
      
27,224
  
PURCHASE OF TREASURY STOCK
    
(3,221
)
    
(1,267
)
DIVIDENDS PAID
    
(4,721
)
    
(4,338
)
OTHER FINANCING ACTIVITIES
    
1,885
      
3,650
  
NET CASH PROVIDED BY FINANCING ACTIVITIES
    
27,997
      
25,269
  
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
433
      
632
  
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
8,903
      
(4,215
)
CASH AND CASH EQUIVALENTS at beginning of period
    
17,323
      
19,796
  
CASH AND CASH EQUIVALENTS at end of period
  
$
26,226
    
$
15,581