Standard Motor Products, Inc. Announces First Quarter 2015 Results and a Quarterly Dividend
NEW YORK, April 30, 2015 /PRNewswire/ -- 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, 2015.
Consolidated net sales for the first quarter of 2015 were $227.6 million, compared to consolidated net sales of $232.8 million during the comparable quarter in 2014. Earnings from continuing operations for the first quarter of 2015 were $9.3 million or 40 cents per diluted share, compared to $12.4 million or 53 cents per diluted share in the first quarter of 2014. 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 2015 were $9.2 million or 40 cents per diluted share, compared to $12.4 million or 53 cents per diluted share in the first quarter of 2014.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "Our results were negatively impacted by foreign exchange movements, plus several other relatively short term events. While obviously not pleased with the first quarter results, we remain confident for the balance of the year.
"Our net sales were down from the first quarter of 2014 by roughly $5 million, of which $2 million—close to 40%—resulted from foreign exchange fluctuations.
"In Engine Management, January was a soft month, partially caused by lost days due to ice and snow in certain parts of the country. However, February and March sales bounced back to healthy levels and April sales appear solid as well.
"For Temperature Control, the first quarter essentially represents pre-season stocking orders. Coming after two cool summers in a row, it is not surprising that pre-season sales were slightly down. The test will be in the second and third quarters, which constitute the bulk of the selling season.
"Gross profit was also down slightly from the prior year. In Temperature Control, we have previously advised that gross margin would continue to be negatively impacted in the first half of 2015 as a result of the production cutbacks in the second half of 2014.
"In Engine Management, we incurred several million dollars expense in the first quarter related to our new production line for rebuilt diesel fuel injectors as we strive to ensure the highest possible quality. We believe these costs will continue, though at a reduced rate, in the second quarter. The diesel business has significant growth potential and these costs represent an excellent investment for the future.
"General and Administrative expenses, as we previously announced, are higher than a year ago, primarily from the year-over-year reduction in amortization of prior service cost as we wind down our retiree medical program. The program will end December 2016.
"All the above negatively affected our first quarter results. However, as we have said, most of these were either foreign exchange related or relatively short term in nature.
On the positive side, sales since January have been healthy; industry demographics continue to be positive; and we continue to upgrade and improve our recent acquisitions. We are optimistic for the balance of the year.
The Board of Directors has approved payment of a quarterly dividend of fifteen cents per share on the common stock outstanding. The dividend will be paid on June 1, 2015 to stockholders of record on May 15, 2015.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, April 30, 2015. The dial in number is 800-895-1715 (domestic) or 785-424-1059 (international). The playback number is 800-839-5123 (domestic) or 402-220-2689 (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.
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STANDARD MOTOR PRODUCTS, INC. | ||||||
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Consolidated Statements of Operations | ||||||
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(In thousands, except per share amounts) |
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THREE MONTHS ENDED |
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MARCH 31, |
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2015 |
2014 |
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(Unaudited) |
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NET SALES |
$ 227,589 |
$ 232,752 |
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COST OF SALES |
163,700 |
164,842 |
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GROSS PROFIT |
63,889 |
67,910 |
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SELLING, GENERAL & ADMINISTRATIVE EXPENSES |
49,198 |
47,594 |
||||
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RESTRUCTURING AND INTEGRATION EXPENSES |
57 |
171 |
||||
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OTHER INCOME, NET |
281 |
260 |
||||
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OPERATING INCOME |
14,915 |
20,405 |
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OTHER NON-OPERATING INCOME (EXPENSE), NET |
151 |
(413) |
||||
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INTEREST EXPENSE |
426 |
308 |
||||
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EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES |
14,640 |
19,684 |
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PROVISION FOR INCOME TAXES |
5,301 |
7,277 |
||||
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EARNINGS FROM CONTINUING OPERATIONS |
9,339 |
12,407 |
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LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES |
(391) |
(682) |
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NET EARNINGS |
$ 8,948 |
$ 11,725 |
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NET EARNINGS PER COMMON SHARE: |
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BASIC EARNINGS FROM CONTINUING OPERATIONS |
$ 0.41 |
$ 0.54 |
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DISCONTINUED OPERATION |
(0.02) |
(0.03) |
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NET EARNINGS PER COMMON SHARE - BASIC |
$ 0.39 |
$ 0.51 |
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DILUTED EARNINGS FROM CONTINUING OPERATIONS |
$ 0.40 |
$ 0.53 |
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DISCONTINUED OPERATION |
(0.01) |
(0.03) |
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NET EARNINGS PER COMMON SHARE - DILUTED |
$ 0.39 |
$ 0.50 |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
22,910,889 |
22,947,241 |
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WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES |
23,238,050 |
23,224,698 |
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STANDARD MOTOR PRODUCTS, INC. | ||||||
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Segment Revenues and Operating Income | ||||||
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(In thousands) |
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THREE MONTHS ENDED |
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MARCH 31, |
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2015 |
2014 |
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(unaudited) |
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Revenues |
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Engine Management |
$ 177,071 |
$ 179,294 |
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Temperature Control |
48,728 |
51,485 |
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All Other |
1,790 |
1,973 |
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$ 227,589 |
$ 232,752 |
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Gross Margin |
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Engine Management |
$ 51,702 |
29.2% |
$ 53,195 |
29.7% | ||
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Temperature Control |
9,827 |
20.2% |
11,885 |
23.1% | ||
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All Other |
2,360 |
2,830 |
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$ 63,889 |
28.1% |
$ 67,910 |
29.2% | |||
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Selling, General & Administrative |
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Engine Management |
$ 30,004 |
16.9% |
$ 28,651 |
16.0% | ||
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Temperature Control |
11,190 |
23.0% |
11,272 |
21.9% | ||
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All Other |
8,004 |
7,671 |
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$ 49,198 |
21.6% |
$ 47,594 |
20.4% | |||
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Operating Income |
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Engine Management |
$ 21,698 |
12.3% |
$ 24,544 |
13.7% | ||
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Temperature Control |
(1,363) |
-2.8% |
613 |
1.2% | ||
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All Other |
(5,644) |
(4,841) |
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14,691 |
6.5% |
20,316 |
8.7% | |||
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Restructuring & Integration |
(57) |
0.0% |
(171) |
-0.1% | ||
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Other Income, Net |
281 |
0.1% |
260 |
0.1% | ||
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$ 14,915 |
6.6% |
$ 20,405 |
8.8% | |||
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STANDARD MOTOR PRODUCTS, INC. |
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Reconciliation of GAAP and Non-GAAP Measures |
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(In thousands, except per share amounts) |
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THREE MONTHS ENDED |
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MARCH 31, |
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2015 |
2014 |
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(Unaudited) |
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EARNINGS FROM CONTINUING OPERATIONS |
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GAAP EARNINGS FROM CONTINUING OPERATIONS |
$ 9,339 |
$ 12,407 |
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RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX) |
34 |
103 |
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GAIN FROM SALE OF BUILDINGS (NET OF TAX) |
(157) |
(157) |
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NON-GAAP EARNINGS FROM CONTINUING OPERATIONS |
$ 9,216 |
$ 12,353 |
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DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS |
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GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS |
$ 0.40 |
$ 0.53 |
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RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX) |
- |
- |
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GAIN FROM SALE OF BUILDINGS (NET OF TAX) |
- |
- |
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NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS |
$ 0.40 |
$ 0.53 |
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OPERATING INCOME |
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GAAP OPERATING INCOME |
$ 14,915 |
$ 20,405 |
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RESTRUCTURING AND INTEGRATION EXPENSES |
57 |
171 |
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OTHER INCOME, NET |
(281) |
(260) |
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NON-GAAP OPERATING INCOME |
$ 14,691 |
$ 20,316 |
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MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS, AND OPERATING INCOME, | |||||||
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EACH OF WHICH ARE NON-GAAP MEASUREMENTS AND ARE ADJUSTED FOR SPECIAL ITEMS, ARE MEANINGFUL TO INVESTORS BECAUSE THEY PROVIDE A VIEW OF THE | |||||||
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COMPANY WITH RESPECT TO ONGOING OPERATING RESULTS. SPECIAL ITEMS REPRESENT SIGNIFICANT CHARGES OR CREDITS THAT ARE IMPORTANT TO AN | |||||||
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UNDERSTANDING OF THE COMPANY'S OVERALL OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE NOT RECOGNIZED IN | |||||||
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ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHOULD NOT BE VIEWED AS AN ALTERNATIVE TO GAAP MEASURES OF PERFORMANCE. | |||||||
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STANDARD MOTOR PRODUCTS, INC. |
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Condensed Consolidated Balance Sheets |
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(In thousands) |
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March 31, |
December 31, | |||||
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2015 |
2014 | |||||
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(Unaudited) |
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ASSETS |
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CASH |
$ 8,119 |
$ 13,728 | ||||
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ACCOUNTS RECEIVABLE, GROSS |
157,303 |
132,893 | ||||
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ALLOWANCE FOR DOUBTFUL ACCOUNTS |
6,567 |
6,369 | ||||
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ACCOUNTS RECEIVABLE, NET |
150,736 |
126,524 | ||||
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INVENTORIES |
283,701 |
278,051 | ||||
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OTHER CURRENT ASSETS |
45,619 |
47,730 | ||||
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TOTAL CURRENT ASSETS |
488,175 |
466,033 | ||||
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PROPERTY, PLANT AND EQUIPMENT, NET |
65,065 |
64,611 | ||||
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GOODWILL AND OTHER INTANGIBLES, NET |
87,746 |
89,377 | ||||
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OTHER ASSETS |
53,709 |
53,530 | ||||
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TOTAL ASSETS |
$ 694,695 |
$ 673,551 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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NOTES PAYABLE |
$ 71,567 |
$ 56,558 | ||||
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CURRENT PORTION OF LONG TERM DEBT |
122 |
175 | ||||
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ACCOUNTS PAYABLE |
76,889 |
70,674 | ||||
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ACCRUED CUSTOMER RETURNS |
35,814 |
30,621 | ||||
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OTHER CURRENT LIABILITIES |
80,630 |
92,801 | ||||
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TOTAL CURRENT LIABILITIES |
265,022 |
250,829 | ||||
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LONG-TERM DEBT |
72 |
83 | ||||
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ACCRUED ASBESTOS LIABILITIES |
33,399 |
33,462 | ||||
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OTHER LIABILITIES |
15,653 |
15,024 | ||||
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TOTAL LIABILITIES |
314,146 |
299,398 | ||||
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TOTAL STOCKHOLDERS' EQUITY |
380,549 |
374,153 | ||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 694,695 |
$ 673,551 | ||||
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STANDARD MOTOR PRODUCTS, INC. | |||||
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Condensed Consolidated Statements of Cash Flows | |||||
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(In thousands) |
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THREE MONTHS ENDED | |||||
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MARCH 31, | |||||
|
2015 |
2014 | ||||
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(Unaudited) | |||||
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CASH FLOWS FROM OPERATING ACTIVITIES |
|||||
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NET EARNINGS |
$ 8,948 |
$ 11,725 | |||
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ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH |
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PROVIDED BY (USED IN) OPERATING ACTIVITIES: |
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DEPRECIATION AND AMORTIZATION |
4,288 |
4,084 | |||
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OTHER |
2,100 |
2,366 | |||
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CHANGE IN ASSETS AND LIABILITIES: |
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ACCOUNTS RECEIVABLE |
(25,289) |
(852) | |||
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INVENTORY |
(7,473) |
(12,715) | |||
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ACCOUNTS PAYABLE |
5,255 |
9,310 | |||
|
OTHER |
(1,992) |
(4,686) | |||
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
(14,163) |
9,232 | |||
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CASH FLOWS FROM INVESTING ACTIVITIES |
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CAPITAL EXPENDITURES |
(4,009) |
(2,763) | |||
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ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES |
- |
(12,225) | |||
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OTHER INVESTING ACTIVITIES |
26 |
- | |||
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NET CASH USED IN INVESTING ACTIVITIES |
(3,983) |
(14,988) | |||
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CASH FLOWS FROM FINANCING ACTIVITIES |
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NET CHANGE IN DEBT |
14,946 |
11,584 | |||
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PURCHASE OF TREASURY STOCK |
- |
(4,526) | |||
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DIVIDENDS PAID |
(3,434) |
(2,984) | |||
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OTHER FINANCING ACTIVITIES |
1,609 |
1,049 | |||
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NET CASH PROVIDED BY FINANCING ACTIVITIES |
13,121 |
5,123 | |||
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EFFECT OF EXCHANGE RATE CHANGES ON CASH |
(584) |
(503) | |||
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NET DECREASE IN CASH AND CASH EQUIVALENTS |
(5,609) |
(1,136) | |||
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CASH AND CASH EQUIVALENTS at beginning of period |
13,728 |
5,559 | |||
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CASH AND CASH EQUIVALENTS at end of period |
$ 8,119 |
$ 4,423 | |||
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SOURCE Standard Motor Products, Inc.