Standard Motor Products, Inc. Announces First Quarter 2019 Results and a Quarterly Dividend
NEW YORK, April 30, 2019 /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, 2019.
Consolidated net sales for the first quarter of 2019 were $283.8 million, compared to consolidated net sales of $261.8 million during the comparable quarter in 2018. Earnings from continuing operations for the first quarter of 2019 were $13.1 million or 57 cents per diluted share, compared to $8.6 million or 37 cents per diluted share in the first quarter of 2018. 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 2019 were $13.1 million or 57 cents per diluted share, compared to $10.5 million or 46 cents per diluted share in the first quarter of 2018.
Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are pleased with our first quarter, showing gains in sales and earnings, with strong performance in both of our operating divisions.
"Engine Management sales were up 6.9%. The wire and cable portion was down 3.3%. The non-wire portion of engine management was up 9.3%, benefitting from pipeline orders, the pass-through of tariff costs, an uptick in OE business, and a general improvement in market conditions. Meanwhile, our customer POS remains in the low single digits, which tends to be a better indicator of long term trends.
"Engine Management gross margin was down 30 basis points, attributable to the tariffs being passed through to customers at our cost. We are pleased to announce that the expenses related to the integration of the General Cable wire business are now largely behind us.
"As expected, our Temperature Control sales rebounded nicely, up 14.4%. While a portion of this was attributable to tariff pass-through, the majority was the result of strong pre-season orders as customers rebuilt their shelf inventory after a strong 2018 selling season. That said, while we are obviously pleased with the quarter, the year will still depend on what happens in the summer months.
"Temperature Control gross margin improved 80 basis points, and, as with Engine Management, were dampened due to tariffs being passed through at our cost. As previously discussed, within SG&A, we are anticipating improvements in our distribution expense as we fully implement our new warehouse automation.
"Finally, as previously announced, on April 1st we completed the acquisition of the Pollak business of Stoneridge, Inc. Although we are still in our first month, we are pleased with what we have seen, and believe it will be an excellent fit for SMP. We will be relocating the acquired production lines to existing facilities over the course of the next year, and expect significant savings once integrated into SMP. In addition, we see future potential as we increase our presence in the heavy duty and commercial vehicle markets."
The Board of Directors has approved payment of a quarterly dividend of 23 cents per share on the common stock outstanding. The dividend will be paid on June 3, 2019 to stockholders of record on May 15, 2019.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, April 30, 2019. The dial-in number is 877-876-9176 (domestic) or 785-424-1670 (international). The playback number is 800-925-9416 (domestic) or 402-220-5387 (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, | ||||||
2019 | 2018 | |||||
(Unaudited) | ||||||
NET SALES | $ 283,766 | $ 261,826 | ||||
COST OF SALES | 205,803 | 189,237 | ||||
GROSS PROFIT | 77,963 | 72,589 | ||||
SELLING, GENERAL & ADMINISTRATIVE EXPENSES | 60,000 | 57,717 | ||||
RESTRUCTURING AND INTEGRATION EXPENSES | - | 2,836 | ||||
OTHER INCOME (EXPENSE), NET | (6) | 271 | ||||
OPERATING INCOME | 17,957 | 12,307 | ||||
OTHER NON-OPERATING INCOME (EXPENSE), NET | 646 | (31) | ||||
INTEREST EXPENSE | 1,089 | 632 | ||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | 17,514 | 11,644 | ||||
PROVISION FOR INCOME TAXES | 4,410 | 3,047 | ||||
EARNINGS FROM CONTINUING OPERATIONS | 13,104 | 8,597 | ||||
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES | (888) | (608) | ||||
NET EARNINGS | $ 12,216 | $ 7,989 | ||||
NET EARNINGS PER COMMON SHARE: | ||||||
BASIC EARNINGS FROM CONTINUING OPERATIONS | $ 0.58 | $ 0.38 | ||||
DISCONTINUED OPERATION | (0.04) | (0.02) | ||||
NET EARNINGS PER COMMON SHARE - BASIC | $ 0.54 | $ 0.36 | ||||
DILUTED EARNINGS FROM CONTINUING OPERATIONS | $ 0.57 | $ 0.37 | ||||
DISCONTINUED OPERATION | (0.04) | (0.02) | ||||
NET EARNINGS PER COMMON SHARE - DILUTED | $ 0.53 | $ 0.35 | ||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | 22,421,795 | 22,498,510 | ||||
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES | 22,905,364 | 22,967,281 | ||||
STANDARD MOTOR PRODUCTS, INC. | ||||||
Segment Revenues and Operating Income | ||||||
(In thousands) | ||||||
THREE MONTHS ENDED | ||||||
MARCH 31, | ||||||
2019 | 2018 | |||||
(Unaudited) | ||||||
Revenues | ||||||
Ignition, Emission Control, Fuel & Safety | ||||||
Related System Products | $ 176,061 | $ 161,077 | ||||
Wire and Cable | 37,128 | 38,411 | ||||
Engine Management | 213,189 | 199,488 | ||||
Compressors | 39,811 | 29,898 | ||||
Other Climate Control Parts | 29,113 | 30,333 | ||||
Temperature Control | 68,924 | 60,231 | ||||
All Other | 1,653 | 2,107 | ||||
Revenues | $ 283,766 | $ 261,826 | ||||
Gross Margin | ||||||
Engine Management | $ 59,693 | 28.0% | $ 56,470 | 28.3% | ||
Temperature Control | 16,191 | 23.5% | 13,667 | 22.7% | ||
All Other | 2,079 | 2,452 | ||||
Gross Margin | $ 77,963 | 27.5% | $ 72,589 | 27.7% | ||
Selling, General & Administrative | ||||||
Engine Management | $ 37,343 | 17.5% | $ 36,264 | 18.2% | ||
Temperature Control | 14,141 | 20.5% | 12,829 | 21.3% | ||
All Other | 8,516 | 8,624 | ||||
Selling, General & Administrative | $ 60,000 | 21.1% | $ 57,717 | 22.0% | ||
Operating Income | ||||||
Engine Management | $ 22,350 | 10.5% | $ 20,206 | 10.1% | ||
Temperature Control | 2,050 | 3.0% | 838 | 1.4% | ||
All Other | (6,437) | (6,172) | ||||
Subtotal | 17,963 | 6.3% | 14,872 | 5.7% | ||
Restructuring & Integration | - | 0.0% | (2,836) | -1.1% | ||
Other Income (Expense), Net | (6) | 0.0% | 271 | 0.1% | ||
Operating Income | $ 17,957 | 6.3% | $ 12,307 | 4.7% | ||
STANDARD MOTOR PRODUCTS, INC. | ||||||
Reconciliation of GAAP and Non-GAAP Measures | ||||||
(In thousands, except per share amounts) | ||||||
THREE MONTHS ENDED | ||||||
MARCH 31, | ||||||
2019 | 2018 | |||||
(Unaudited) | ||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||
GAAP EARNINGS FROM CONTINUING OPERATIONS | $ 13,104 | $ 8,597 | ||||
RESTRUCTURING AND INTEGRATION EXPENSES | - | 2,836 | ||||
GAIN FROM SALE OF BUILDINGS | - | (218) | ||||
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | - | (681) | ||||
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS | $ 13,104 | $ 10,534 | ||||
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | ||||||
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ 0.57 | $ 0.37 | ||||
RESTRUCTURING AND INTEGRATION EXPENSES | - | 0.12 | ||||
GAIN FROM SALE OF BUILDINGS | - | (0.01) | ||||
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | - | (0.02) | ||||
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ 0.57 | $ 0.46 | ||||
OPERATING INCOME | ||||||
GAAP OPERATING INCOME | $ 17,957 | $ 12,307 | ||||
RESTRUCTURING AND INTEGRATION EXPENSES | - | 2,836 | ||||
OTHER (INCOME) EXPENSE, NET | 6 | (271) | ||||
NON-GAAP OPERATING INCOME | $ 17,963 | $ 14,872 | ||||
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, | December 31, | |||||
2019 | 2018 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
CASH | $ 11,746 | $ 11,138 | ||||
ACCOUNTS RECEIVABLE, GROSS | 180,807 | 163,222 | ||||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6,643 | 5,687 | ||||
ACCOUNTS RECEIVABLE, NET | 174,164 | 157,535 | ||||
INVENTORIES | 365,251 | 349,811 | ||||
UNRETURNED CUSTOMER INVENTORY | 19,784 | 20,484 | ||||
OTHER CURRENT ASSETS | 9,412 | 7,256 | ||||
TOTAL CURRENT ASSETS | 580,357 | 546,224 | ||||
PROPERTY, PLANT AND EQUIPMENT, NET | 88,850 | 90,754 | ||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 37,301 | - | ||||
GOODWILL | 67,370 | 67,321 | ||||
OTHER INTANGIBLES, NET | 46,581 | 48,411 | ||||
DEFERRED INCOME TAXES | 41,126 | 42,334 | ||||
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 33,703 | 32,469 | ||||
OTHER ASSETS | 17,446 | 15,619 | ||||
TOTAL ASSETS | $ 912,734 | $ 843,132 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
NOTES PAYABLE | $ 78,717 | $ 43,689 | ||||
CURRENT PORTION OF OTHER DEBT | 5,023 | 5,377 | ||||
ACCOUNTS PAYABLE | 96,878 | 94,357 | ||||
ACCRUED CUSTOMER RETURNS | 55,318 | 57,433 | ||||
ACCRUED CORE LIABILITY | 28,260 | 31,263 | ||||
OTHER CURRENT LIABILITIES | 81,374 | 80,467 | ||||
TOTAL CURRENT LIABILITIES | 345,570 | 312,586 | ||||
OTHER LONG-TERM DEBT | 161 | 153 | ||||
NONCURRENT OPERATING LEASE LIABILITIES | 30,130 | - | ||||
ACCRUED ASBESTOS LIABILITIES | 43,837 | 45,117 | ||||
OTHER LIABILITIES | 19,996 | 18,075 | ||||
TOTAL LIABILITIES | 439,694 | 375,931 | ||||
TOTAL STOCKHOLDERS' EQUITY | 473,040 | 467,201 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 912,734 | $ 843,132 | ||||
STANDARD MOTOR PRODUCTS, INC. | |||||
Condensed Consolidated Statements of Cash Flows | |||||
(In thousands) | |||||
THREE MONTHS ENDED | |||||
MARCH 31, | |||||
2019 | 2018 | ||||
(Unaudited) | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
NET EARNINGS | $ 12,216 | $ 7,989 | |||
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH | |||||
USED IN OPERATING ACTIVITIES: | |||||
DEPRECIATION AND AMORTIZATION | 6,178 | 6,016 | |||
OTHER | 5,303 | 4,459 | |||
CHANGE IN ASSETS AND LIABILITIES: | |||||
ACCOUNTS RECEIVABLE | (22,252) | (20,367) | |||
INVENTORY | (14,656) | (3,390) | |||
ACCOUNTS PAYABLE | 1,181 | 10,674 | |||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | (282) | 1,559 | |||
SUNDRY PAYABLES AND ACCRUED EXPENSES | (12,911) | (12,997) | |||
OTHER | (1,503) | (95) | |||
NET CASH USED IN OPERATING ACTIVITIES | (26,726) | (6,152) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES | - | (6,472) | |||
NET PROCEEDS FROM SALE OF FACILITY | 4,801 | - | |||
CAPITAL EXPENDITURES | (3,084) | (6,903) | |||
OTHER INVESTING ACTIVITIES | 29 | - | |||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 1,746 | (13,375) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
NET CHANGE IN DEBT | 34,758 | 34,054 | |||
PURCHASE OF TREASURY STOCK | (5,835) | (3,221) | |||
DIVIDENDS PAID | (5,159) | (4,721) | |||
OTHER FINANCING ACTIVITIES | 1,409 | 1,885 | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 25,173 | 27,997 | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 415 | 433 | |||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 608 | 8,903 | |||
CASH AND CASH EQUIVALENTS at beginning of period | 11,138 | 17,323 | |||
CASH AND CASH EQUIVALENTS at end of period | $ 11,746 | $ 26,226 | |||
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SOURCE Standard Motor Products, Inc.