Standard Motor Products, Inc. Announces First Quarter 2024 Results and Quarterly Dividend
NEW YORK, May 1, 2024 /PRNewswire/ -- Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months ended March 31, 2024.
Net sales for the first quarter of 2024 were $331.4 million, compared to consolidated net sales of $328.0 million during the comparable quarter in 2023. Earnings from continuing operations for the first quarter of 2024 were $9.9 million or $0.44 per diluted share, compared to $12.7 million or $0.57 per diluted share in the first quarter of 2023. 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 2024 were $10.0 million or $0.45 per diluted share, compared to $13.4 million or $0.61 per diluted share in the first quarter of 2023.
Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "Our first quarter experienced mixed results. We are pleased with our record-setting top line performance as sales increased 1% against last year's first quarter, rebounding from the sluggish sales we saw at the end of 2023. However, as expected, we continued to experience headwinds across various cost inputs, causing a drag on our profitability."
By segment, Vehicle Control sales were up 0.5% against a difficult comparison of over 4% growth last year, as customers returned to more normalized ordering patterns after a slowdown in the fourth quarter of last year.
Turning to Temperature Control, sales declined 1.1% versus the same quarter last year. However, this is mainly due to the timing of pre-season orders which can always shift between periods. Ultimately, as a seasonal business, our annual results will be determined by the degree and duration of hot weather the country experiences, and therefore early results are not indicative of the full year.
Engineered Solutions sales increased 4.5% over last year's first quarter, setting a single quarter record for this segment, as our traction with new and existing customers continues to build. We remain encouraged with our progress in winning new business and the overall opportunity we see in terms of long-term sales growth.
Looking at profitability, our Adjusted EBITDA margin was 6.9% in the quarter vs. 8.8% last year. Excluding $1.1 million of start-up costs related to our new distribution center in Shawnee, KS, Adjusted EBITDA was 7.2% in the quarter. Within the combined Aftermarket segments, Adjusted EBITDA was helped by a 40 basis point gross margin improvement, but was offset by $1.0 million of higher factoring costs, as well as inflation in other SG&A expenses. Adjusted EBITDA in Engineered Solutions was down primarily due to a lower gross margin in the quarter, which was impacted by inflationary cost increases and some unfavorable changes in mix of sales.
Our sales and profit expectations for the full year of 2024 remain unchanged. We anticipate sales growth will be flat to low single digits, and Adjusted EBITDA will be in a range of 9.0% to 9.5%. As previously discussed, we expect to incur roughly $5 million of added costs in 2024 as compared to 2023 for our new distribution center in Shawnee, KS, related to increased rent as well as redundancy expenses as we transition away from our Edwardsville, KS distribution center. Additionally, we anticipate approximately $25 million in capital expenditures as we outfit the new facility. We are pleased to have successfully begun the first phase of shipping from our new DC, and are optimistic about the benefits it will bring once fully implemented. It will provide SMP with expanded capacity for future growth, mitigate risk through a multi-point distribution strategy, and improve product delivery times in certain geographies.
As part of our commitment to return value to shareholders, the Board of Directors has approved payment of a quarterly dividend of 29 cents per share on the common stock outstanding, which will be paid on June 3, 2024 to stockholders of record on May 15, 2024. Additionally, we purchased $2.6 million of common stock under our existing $30 million share repurchase authorization during the quarter. From the end of the first quarter through April 29, 2024, we purchased an additional $3.5 million of common stock, leaving our remaining authorization under the current program at $23.9 million.
In closing, Mr. Sills commented, "As we look to the long term, we remain optimistic about both of our end markets. The fundamental trends in the aftermarket are favorable - a growing and aging car parc, a return to historical miles driven, and the high cost of new vehicles should lead to ongoing demand for parts, especially in non-discretionary categories such as ours. Our Engineered Solutions business continues to grow globally as we become known as a capable high-quality supplier, and opportunities continue to present themselves. And while near-term cost pressures persist, we are excited for 2024 and beyond, and we thank our employees that make all of this possible."
Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 1, 2024. This call will be web cast and can be accessed on the Investor Relations page of our website at www.smpcorp.com and clicking on the SMP Q1 2024 Earnings Webcast link. Investors may also listen to the call by dialing 800-267-6316 (domestic) or 203-518-9783 (international). Our playback will be made available for dial in immediately following the call. For those choosing to listen to the replay by webcast, the link should be active on our website within 24 hours after the call. The playback number is 888-215-1535 (domestic) or 402-220-4940 (international).
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,
2024 2023
(Unaudited)
NET SALES $331,403 $328,028
COST OF SALES 241,881 236,761
GROSS PROFIT 89,522 91,267
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 74,733 69,633
RESTRUCTURING AND INTEGRATION EXPENSES 192 912
OTHER INCOME, NET 22 24
OPERATING INCOME 14,619 20,746
OTHER NON-OPERATING INCOME, NET 819 225
INTEREST EXPENSE 2,067 3,862
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 13,371 17,109
PROVISION FOR INCOME TAXES 3,342 4,372
EARNINGS FROM CONTINUING OPERATIONS 10,029 12,737
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES (1,039) (780)
NET EARNINGS 8,990 11,957
NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST 166 39
NET EARNINGS ATTRIBUTABLE TO SMP (a) $8,824 $11,918
NET EARNINGS ATTRIBUTABLE TO SMP
---
EARNINGS FROM CONTINUING OPERATIONS $9,863 $12,698
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES (1,039) (780)
TOTAL $8,824 $11,918
NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP
---
BASIC EARNINGS FROM CONTINUING OPERATIONS $0.45 $0.59
DISCONTINUED OPERATION (0.05) (0.04)
NET EARNINGS PER COMMON SHARE - BASIC $0.40 $0.55
DILUTED EARNINGS FROM CONTINUING OPERATIONS $0.44 $0.57
DISCONTINUED OPERATION (0.05) (0.03)
NET EARNINGS PER COMMON SHARE - DILUTED $0.39 $0.54
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 21,923,830 21,609,618
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 22,372,543 22,097,750
(a) "SMP" refers to Standard Motor Products, Inc. and subsidiaries
STANDARD MOTOR PRODUCTS, INC
Segment Revenues and Operating Profit
(In thousands)
THREE MONTHS ENDED
MARCH 31,
2024 2023
(Unaudited)
Revenues
---
Engine Management (Ignition, Emissions and
Fuel Delivery) $116,085 $116,083
Electrical and Safety 52,407 51,804
Wire sets and other 17,032 16,690
Vehicle Control 185,524 184,577
AC System Components 49,960 50,798
Other Thermal Components 21,648 21,608
Temperature Control 71,608 72,406
Commercial Vehicle 22,908 20,232
Construction / Agriculture 10,076 11,692
Light Vehicle 21,803 23,019
All Other 19,484 16,102
Engineered Solutions 74,271 71,045
Revenues $331,403 $328,028
Gross Margin
---
Vehicle Control $58,899 31.7 % $58,472 31.7 %
Temperature Control 19,689 27.5 % 19,155 26.5 %
Engineered Solutions 10,934 14.7 % 13,640 19.2 %
All Other
Gross Margin $89,522 27.0 % $91,267 27.8 %
Selling, General & Administrative
---
Vehicle Control $43,258 23.3 % $40,836 22.1 %
Temperature Control 17,600 24.6 % 16,528 22.8 %
Engineered Solutions 8,691 11.7 % 7,909 11.1 %
All Other 5,184 4,360
Selling, General & Administrative $74,733 22.6 % $69,633 21.2 %
Operating Income
---
Vehicle Control $15,641 8.4 % $17,636 9.6 %
Temperature Control 2,089 2.9 % 2,627 3.6 %
Engineered Solutions 2,243 3.0 % 5,731 8.1 %
All Other (5,184) (4,360)
Subtotal $14,789 4.5 % $21,634 6.6 %
Restructuring & Integration (192) -0.1 % (912) -0.3 %
Other Income, Net 22 0.0 % 24 0.0 %
Operating Income $14,619 4.4 % $20,746 6.3 %
STANDARD MOTOR PRODUCTS, INC
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED
MARCH 31,
2024 2023
(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
---
GAAP EARNINGS FROM CONTINUING OPERATIONS $9,863 $12,698
RESTRUCTURING AND INTEGRATION EXPENSES 192 912
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS (50) (237)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS $10,005 $13,373
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
---
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $0.44 $0.57
RESTRUCTURING AND INTEGRATION EXPENSES 0.01 0.04
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $0.45 $0.61
OPERATING INCOME
---
GAAP OPERATING INCOME $14,619 $20,746
RESTRUCTURING AND INTEGRATION EXPENSES 192 912
OTHER INCOME, NET (22) (24) LAST TWELVE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
NON-GAAP OPERATING INCOME $14,789 $21,634 2024 2023 2023
(Unaudited)
EBITDA WITHOUT SPECIAL ITEMS
---
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $13,371 $17,109 $77,978 $87,882 $81,716
DEPRECIATION AND AMORTIZATION 7,301 7,082 29,241 28,428 29,022
INTEREST EXPENSE 2,067 3,862 11,492 13,674 13,287
EBITDA 22,739 28,053 118,711 129,984 124,025
RESTRUCTURING AND INTEGRATION EXPENSES 192 912 1,922 2,762 2,642
CUSTOMER BANKRUPTCY CHARGE 7,002
SPECIAL ITEMS 192 912 1,922 9,764 2,642
EBITDA WITHOUT SPECIAL ITEMS $22,931 $28,965 $120,633 $139,748 $126,667
MANAGEMENT BELIEVES THAT NON-GAAP EARNINGS FROM CONTINUING OPERATIONS AND NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS WHICH ARE ATTRIBUTABLE TO SMP,
AND NON-GAAP OPERATING INCOME AND EBITDA WITHOUT SPECIAL ITEMS, 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
Reconciliation of GAAP and Non-GAAP Measures by Segments
(In thousands)
THREE MONTHS ENDED MARCH 31, 2024
Vehicle Control Temperature Engineered All Other Consolidated
Control Solutions
(Unaudited)
OPERATING INCOME
---
GAAP OPERATING INCOME $15,540 $2,031 0 $2,232 0 $(5,184) $14,619
RESTRUCTURING AND INTEGRATION EXPENSES 101 58 33 192
OTHER INCOME, NET (22) (22)
NON-GAAP OPERATING INCOME $15,641 $2,089 $2,243 $(5,184) $14,789
EBITDA WITHOUT SPECIAL ITEMS
---
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $14,315 $1,888 $2,346 $(5,178) $13,371
DEPRECIATION AND AMORTIZATION 3,525 898 2,469 409 7,301
INTEREST EXPENSE 1,427 531 664 (555) 2,067
EBITDA 19,267 3,317 5,479 (5,324) 22,739
RESTRUCTURING AND INTEGRATION EXPENSES 101 58 0 33 0 192
SPECIAL ITEMS 101 58 33 192
EBITDA WITHOUT SPECIAL ITEMS $19,368 $3,375 $5,512 $(5,324) $22,931
% of Net Sales 10.4 % 4.7 % 7.4 % 6.9 %
(In thousands)
THREE MONTHS ENDED MARCH 31, 2023
Vehicle Control Temperature Engineered All Other Consolidated
Control Solutions
(Unaudited)
OPERATING INCOME
---
GAAP OPERATING INCOME $17,375 $2,084 $5,647 $(4,360) $20,746
RESTRUCTURING AND INTEGRATION EXPENSES 285 543 84 912
OTHER INCOME, NET (24) (24)
NON-GAAP OPERATING INCOME $17,636 $2,627 $5,731 $(4,360) $21,634
EBITDA WITHOUT SPECIAL ITEMS
---
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $15,057 $1,105 $5,286 $(4,339) $17,109
DEPRECIATION AND AMORTIZATION 3,412 763 2,481 426 7,082
INTEREST EXPENSE 2,741 893 359 (131) 3,862
EBITDA 21,210 2,761 8,126 (4,044) 28,053
RESTRUCTURING AND INTEGRATION EXPENSES 285 543 84 912
SPECIAL ITEMS 285 543 84 912
EBITDA WITHOUT SPECIAL ITEMS $21,495 $3,304 $8,210 $(4,044) $28,965
% of Net Sales 11.6 % 4.6 % 11.6 % 8.8 %
MANAGEMENT BELIEVES THAT NON-GAAP OPERATING INCOME AND EBITDA WITHOUT SPECIAL ITEMS, 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 MARCH DECEMBER
2024 2023 2023
(Unaudited) (Unaudited)
ASSETS
---
CASH AND CASH EQUIVALENTS $27,113 $24,196 $32,526
ACCOUNTS RECEIVABLE, GROSS 212,224 216,617 168,327
ALLOWANCE FOR EXPECTED CREDIT LOSSES 8,284 5,816 8,045
ACCOUNTS RECEIVABLE, NET 203,940 210,801 160,282
INVENTORIES 520,702 522,039 507,075
UNRETURNED CUSTOMER INVENTORY 18,007 20,626 18,240
OTHER CURRENT ASSETS 26,674 26,192 26,100
TOTAL CURRENT ASSETS 796,436 803,854 744,223
PROPERTY, PLANT AND EQUIPMENT, NET 124,822 107,123 121,872
OPERATING LEASE RIGHT-OF-USE ASSETS 102,060 74,291 100,065
GOODWILL 134,624 132,289 134,729
OTHER INTANGIBLES, NET 90,000 98,389 92,308
DEFERRED INCOME TAXES 40,241 33,893 40,533
INVESTMENT IN UNCONSOLIDATED AFFILIATES 24,751 42,719 24,050
OTHER ASSETS 38,627 27,462 35,267
TOTAL ASSETS $1,351,561 $1,320,020 $1,293,047
LIABILITIES AND STOCKHOLDERS' EQUITY
---
CURRENT PORTION OF REVOLVING CREDIT FACILITY
$ - $52,600
$ -
CURRENT PORTION OF TERM LOAN AND OTHER DEBT 5,030 5,014 5,029
ACCOUNTS PAYABLE 98,293 94,372 107,455
ACCRUED CUSTOMER RETURNS 47,220 42,153 38,238
ACCRUED CORE LIABILITY 17,438 21,319 18,399
ACCRUED REBATES 45,191 39,657 42,278
PAYROLL AND COMMISSIONS 27,326 24,268 29,561
SUNDRY PAYABLES AND ACCRUED EXPENSES 58,714 42,041 63,303
TOTAL CURRENT LIABILITIES 299,212 321,424 304,263
LONG-TERM DEBT 209,872 215,487 151,182
NONCURRENT OPERATING LEASE LIABILITY 90,667 65,319 88,974
ACCRUED ASBESTOS LIABILITIES 68,985 60,820 72,013
OTHER LIABILITIES 27,704 24,298 25,742
TOTAL LIABILITIES 696,440 687,348 642,174
TOTAL SMP STOCKHOLDERS' EQUITY 639,150 621,644 635,064
NONCONTROLLING INTEREST 15,971 11,028 15,809
TOTAL STOCKHOLDERS' EQUITY 655,121 632,672 650,873
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,351,561 $1,320,020 $1,293,047
STANDARD MOTOR PRODUCTS, INC
Condensed Consolidated Statements of Cash Flows
(In thousands)
THREE MONTHS ENDED
MARCH 31,
2024 2023
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
-
NET EARNINGS $8,990 $11,957
ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH
USED IN OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 7,301 7,082
OTHER 3,511 4,587
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE (43,978) (42,617)
INVENTORY (14,670) 6,195
ACCOUNTS PAYABLE (9,274) 4,809
PREPAID EXPENSES AND OTHER
CURRENT ASSETS 1,649 1,165
SUNDRY PAYABLES AND ACCRUED
EXPENSES 3,988 (10,656)
OTHER (3,233) (2,964)
NET CASH USED IN OPERATING
ACTIVITIES (45,716) (20,442)
CASH FLOWS FROM INVESTING ACTIVITIES
-
CAPITAL EXPENDITURES (10,086) (4,363)
OTHER INVESTING ACTIVITIES 15 13
NET CASH USED IN INVESTING
ACTIVITIES (10,071) (4,350)
CASH FLOWS FROM FINANCING ACTIVITIES
-
NET CHANGE IN DEBT 58,692 33,478
PURCHASE OF TREASURY STOCK (2,235)
DIVIDENDS PAID (6,392) (6,261)
OTHER FINANCING ACTIVITIES 315 125
NET CASH PROVIDED BY FINANCING
ACTIVITIES 50,380 27,342
EFFECT OF EXCHANGE RATE CHANGES
ON CASH (6) 496
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (5,413) 3,046
CASH AND CASH EQUIVALENTS at
beginning of period 32,526 21,150
CASH AND CASH EQUIVALENTS at
end of period $27,113 $24,196
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SOURCE Standard Motor Products, Inc.
