Standard Motor Products, Inc. Announces Second Quarter 2019 Results and a Quarterly Dividend
NEW YORK, July 25, 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 and six months ending June 30, 2019.
Consolidated net sales for the second quarter of 2019 were $305.2 million, compared to consolidated net sales of $286.6 million during the comparable quarter in 2018. Earnings from continuing operations for the second quarter of 2019 were $20.6 million or 90 cents per diluted share, compared to $16.8 million or 73 cents per diluted share in the second 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 second quarter of 2019 were $21 million or 92 cents per diluted share, compared to $17 million or 74 cents per diluted share in the second quarter of 2018.
Consolidated net sales for the six month period ended June 30, 2019, were $588.9 million, compared to consolidated net sales of $548.5 million during the comparable period in 2018. Earnings from continuing operations for the six month period ended June 30, 2019, were $33.7 million or $1.47 per diluted share, compared to $25.4 million or $1.11 per diluted share in the comparable period 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 six months ended June 30, 2019, and 2018 were $34.1 million or $1.49 per diluted share and $27.5 million or $1.20 per diluted share, respectively.
Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are quite pleased with our second quarter, posting solid gains in sales, margins and earnings, with strong performance in both of our operating divisions.
"Engine Management sales were up approximately 7% for both the quarter and year to date. Excluding the wire and cable segment, Engine Management sales in the quarter increased almost 12%, or almost $20 million. The increase included three months of revenue from the Pollak acquisition, accounting for nearly $11 million. Excluding Pollak, our Engine Management business increased 5.3% for the quarter. The increase was attributable to a combination of strong demand in our OE business, which tends to be somewhat volatile, a benefit from pricing actions and tariffs, and low single digit organic growth.
"Engine Management gross margin was up 0.9 points from last year, and 1.3 points from the first quarter, reflecting our return to historic productivity in our Reynosa wire plant after the lengthy integration of the General Cable wire business. This margin improvement also includes certain pricing actions offset by the adverse impact of tariffs being passed through to customers at our cost.
"Our Temperature Control sales were up 5% for the quarter and 9% year-to-date. April and May tend to reflect pre-season stocking activities, while June is the start of the summer selling season. Although we are pleased with the quarter's results, it was a slow start to summer heat nationwide. The third quarter will be critical to full-year performance, as 2018 was a very hot summer and a challenging comparison.
"Temperature Control gross margin improved 0.8 points in the quarter and, as with Engine Management, was dampened by tariffs being passed through to customers at our cost. As previously discussed, within SG&A, we experienced improvements in our distribution expense as our new warehouse automation in Lewisville is now fully implemented.
"Finally, on April 1(st), we completed the acquisition of the Pollak business of Stoneridge, Inc., and it has contributed quite nicely to our performance. We will be relocating the acquired production lines to existing facilities over the course of the balance of the year, and expect significant savings once fully integrated and performing at full productivity some time in 2020. So far we are pleased with what we have seen, and believe it will be an excellent fit for SMP. We acquired a profitable and stable business with an excellent customer base, and we believe that with our combined skills, we will be able to advance our goal of increasing 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 September 3, 2019 to stockholders of record on August 15, 2019.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, July 25, 2019. The dial-in number is 866-831-8713 (domestic) or 203-518-9822 (international). The playback number is 800-839-9562 (domestic) or 402-220-6090 (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
SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2019 2018 2019 2018
(Unaudited)
(Unaudited)
NET SALES $305,172 $286,636 $588,938 $548,462
COST OF SALES 216,267 205,347 422,070 394,584
GROSS PROFIT 88,905 81,289 166,868 153,878
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 60,536 57,750 120,536 115,467
RESTRUCTURING AND INTEGRATION EXPENSES 644 231 644 3,067
OTHER INCOME (EXPENSE), NET 3 42 (3) 313
OPERATING INCOME 27,728 23,350 45,685 35,657
OTHER NON-OPERATING INCOME, NET 1,411 480 2,057 449
INTEREST EXPENSE 1,722 1,251 2,811 1,883
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 27,417 22,579 44,931 34,223
PROVISION FOR INCOME TAXES 6,862 5,752 11,272 8,799
EARNINGS FROM CONTINUING OPERATIONS 20,555 16,827 33,659 25,424
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES (1,123) (882) (2,011) (1,490)
NET EARNINGS $19,432 $15,945 $31,648 $23,934
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $0.92 $0.75 $1.50 $1.13
DISCONTINUED OPERATION (0.05) (0.04) (0.09) (0.07)
NET EARNINGS PER COMMON SHARE - BASIC $0.87 $0.71 $1.41 $1.06
DILUTED EARNINGS FROM CONTINUING OPERATIONS $0.90 $0.73 $1.47 $1.11
DISCONTINUED OPERATION (0.05) (0.04) (0.09) (0.07)
NET EARNINGS PER COMMON SHARE - DILUTED $0.85 $0.69 $1.38 $1.04
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 22,328,292 22,471,428 22,374,785 22,484,894
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 22,795,677 22,958,469 22,857,435 22,962,049
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
(In thousands)
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2019 2018 2019 2018
(Unaudited)
(Unaudited)
Revenues
---
Ignition, Emission Control, Fuel & Safety
Related System Products $181,831 $162,462 $357,892 $323,539
Wire and Cable 36,211 40,967 73,339 79,378
Engine Management 218,042 203,429 431,231 402,917
Compressors 52,493 46,940 92,304 76,838
Other Climate Control Parts 31,913 33,430 61,026 63,763
Temperature Control 84,406 80,370 153,330 140,601
All Other 2,724 2,837 4,377 4,944
Revenues $305,172 $286,636 $588,938 $548,462
Gross Margin
---
Engine Management $63,780 29.3% $57,782 28.4% $123,473 28.6% $114,252 28.4%
Temperature Control 22,551 26.7% 20,800 25.9% 38,742 25.3% 34,467 24.5%
All Other 2,574 2,707 4,653 5,159
Gross Margin $88,905 29.1% $81,289 28.4% $166,868 28.3% $153,878 28.1%
Selling, General & Administrative
---
Engine Management $37,430 17.2% $34,598 17.0% $74,773 17.3% $70,862 17.6%
Temperature Control 15,397 18.2% 15,721 19.6% 29,538 19.3% 28,550 20.3%
All Other 7,709 7,431 16,225 16,055
Selling, General & Administrative $60,536 19.8% $57,750 20.1% $120,536 20.5% $115,467 21.1%
Operating Income
---
Engine Management $26,350 12.1% $23,184 11.4% $48,700 11.3% $43,390 10.8%
Temperature Control 7,154 8.5% 5,079 6.3% 9,204 6.0% 5,917 4.2%
All Other (5,135) (4,724) (11,572) (10,896)
Subtotal 28,369 9.3% 23,539 8.2% 46,332 7.9% 38,411 7.0%
Restructuring & Integration (644) -0.2% (231) -0.1% (644) -0.1% (3,067) -0.6%
Other Income (Expense), Net 3 0.0% 42 0.0% (3) 0.0% 313 0.1%
Operating Income $27,728 9.1% $23,350 8.1% $45,685 7.8% $35,657 6.5%
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2019 2018 2019 2018
(Unaudited)
(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS
---
GAAP EARNINGS FROM CONTINUING OPERATIONS $20,555 $16,827 $33,659 $25,424
RESTRUCTURING AND INTEGRATION EXPENSES 644 231 644 3,067
GAIN FROM SALE OF BUILDINGS (218)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS (168) (60) (168) (741)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS $21,031 $16,998 $34,135 $27,532
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
---
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $0.90 $0.73 $1.47 $1.11
RESTRUCTURING AND INTEGRATION EXPENSES 0.03 0.01 0.03 0.13
GAIN FROM SALE OF BUILDINGS (0.01)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS (0.01) (0.01) (0.03)
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $0.92 $0.74 $1.49 $1.20
OPERATING INCOME
---
GAAP OPERATING INCOME $27,728 $23,350 $45,685 $35,657
RESTRUCTURING AND INTEGRATION EXPENSES 644 231 644 3,067
OTHER (INCOME) EXPENSE, NET (3) (42) 3 (313)
NON-GAAP OPERATING INCOME $28,369 $23,539 $46,332 $38,411
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)
June 30,
December 31,
2019 2018
(Unaudited)
ASSETS
---
CASH $17,419 $11,138
ACCOUNTS RECEIVABLE, GROSS 185,476 163,222
ALLOWANCE FOR DOUBTFUL ACCOUNTS 6,090 5,687
ACCOUNTS RECEIVABLE, NET 179,386 157,535
INVENTORIES 375,258 349,811
UNRETURNED CUSTOMER INVENTORY 18,677 20,484
OTHER CURRENT ASSETS 14,972 7,256
TOTAL CURRENT ASSETS 605,712 546,224
PROPERTY, PLANT AND EQUIPMENT, NET 89,197 90,754
OPERATING LEASE RIGHT-OF-USE ASSETS 35,648
GOODWILL 77,728 67,321
OTHER INTANGIBLES, NET 69,017 48,411
DEFERRED INCOME TAXES 39,825 42,334
INVESTMENT IN UNCONSOLIDATED AFFILIATES 34,400 32,469
OTHER ASSETS 18,000 15,619
TOTAL ASSETS $969,527 $843,132
LIABILITIES AND STOCKHOLDERS' EQUITY
---
NOTES PAYABLE $130,000 $43,689
CURRENT PORTION OF OTHER DEBT 5,085 5,377
ACCOUNTS PAYABLE 89,149 94,357
ACCRUED CUSTOMER RETURNS 53,420 57,433
ACCRUED CORE LIABILITY 26,671 31,263
OTHER CURRENT LIABILITIES 89,615 80,467
TOTAL CURRENT LIABILITIES 393,940 312,586
OTHER LONG-TERM DEBT 153 153
NONCURRENT OPERATING LEASE LIABILITIES 28,613
ACCRUED ASBESTOS LIABILITIES 41,104 45,117
OTHER LIABILITIES 20,452 18,075
TOTAL LIABILITIES 484,262 375,931
TOTAL STOCKHOLDERS' EQUITY 485,265 467,201
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $969,527 $843,132
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
SIX MONTHS ENDED
JUNE 30,
2019 2018
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS $31,648 $23,934
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 12,744 11,706
OTHER 9,621 8,641
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE (26,622) (34,524)
INVENTORIES (19,691) (6,650)
ACCOUNTS PAYABLE (6,994) 15,684
PREPAID EXPENSES AND OTHER CURRENT ASSETS (6,406) (2,988)
SUNDRY PAYABLES AND ACCRUED EXPENSES (7,545) (9,115)
OTHER (6,261) (2,502)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (19,506) 4,186
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES (38,427) (8,572)
NET PROCEEDS FROM SALE OF FACILITY 4,801
CAPITAL EXPENDITURES (7,578) (11,325)
OTHER INVESTING ACTIVITIES 46 16
NET CASH USED IN INVESTING ACTIVITIES (41,158) (19,881)
CASH FLOWS FROM FINANCING ACTIVITIES
NET CHANGE IN DEBT 85,956 32,287
PURCHASE OF TREASURY STOCK (10,738) (7,640)
DIVIDENDS PAID (10,296) (9,437)
OTHER FINANCING ACTIVITIES 1,691 1,990
NET CASH PROVIDED BY FINANCING ACTIVITIES 66,613 17,200
EFFECT OF EXCHANGE RATE CHANGES ON CASH 332 (255)
NET INCREASE IN CASH AND CASH EQUIVALENTS 6,281 1,250
CASH AND CASH EQUIVALENTS at beginning of Period 11,138 17,323
CASH AND CASH EQUIVALENTS at end of Period $17,419 $18,573
View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-second-quarter-2019-results-and-a-quarterly-dividend-300890572.html
SOURCE Standard Motor Products, Inc.
