Attached files
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| 8-K - STANDARD MOTOR PRODUCTS, INC. | v229805_8k.htm |
For Immediate Release
For more information, contact:
James J. Burke
Standard Motor Products, Inc.
(718) 392-0200
Jennifer Tio
Maximum Marketing Services, Inc.
(312) 226-4111 x2449
Jennifer.tio@maxmarketing.com
Standard Motor Products, Inc. Announces
Second Quarter 2011 Results and a Quarterly Dividend
New York, NY, July 27, 2011......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 ended June 30, 2011.
Consolidated net sales for the second quarter of 2011 were $244 million, compared to consolidated net sales of $231 million during the comparable quarter in 2010. Earnings from continuing operations for the second quarter of 2011 were $13.7 million or 59 cents per diluted share, compared to $8.1 million or 35 cents per diluted share in the second quarter of 2010. 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 2011 were $11.4 million or 49 cents per diluted share, compared to $8.7 million or 38 cents per diluted share in the second quarter of 2010.
37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
Consolidated net sales for the six month period ended June 30, 2011 were $464.2 million, compared to consolidated net sales of $410.4 million during the comparable period in 2010. Earnings from continuing operations for the six month period ended June 30, 2011 were $20.7 million or 90 cents per diluted share, compared to $10.9 million or 48 cents per diluted share in the comparable period of 2010. 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 2011 and 2010 were $18.5 million or 80 cents per diluted share and $11.8 million or 52 cents per diluted share, respectively.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “As we forecasted during our first quarter earnings call, our rate of sales increase moderated during the second quarter. Our first quarter increase of 23% benefited from a pre-season ordering program in Temperature Control, plus some buildup in customer inventories in other areas. As these inventories were absorbed, our sales increase in the second quarter moderated to 5.6%, leaving us with a still healthy 13% sales increase for the six month period.
“We continue to reap the benefit of our cost reduction efforts of recent years—moving to low cost manufacturing sites, purchasing product from low cost areas, reducing overhead, and manufacturing products we formerly purchased. As a result, our earnings per share, excluding one time gains, increased to 49 cents for the quarter and 80 cents for the six month period, substantially ahead of the comparable periods last year.
“Cash flow remains strong. Despite the acquisition of the BLD Engine Control business ($27 million), and the redemption of the remaining convertible debentures ($12.3 million), both of which occurred in the second quarter, our bank borrowings were $2 million below the comparable period of 2010.
“Finally, during the second quarter, we announced that we will be terminating our retiree medical benefits program at the end of 2016. This was a difficult and painful decision, but we felt we had no choice as these costs continue to grow.
“The approximately $23 million postretirement liability at December 2010 has been reduced to approximately $7 million at June 2011 and by 2016 will be reduced below $1 million. Our 2011 second quarter and year-to-date results reflect a one-time curtailment gain of $3.6 million. Excluding the curtailment gain, our postretirement expense is forecasted to be a benefit of $3.7 million in 2011, decreasing to approximately a $1-2 million benefit per year through 2014. In 2015 and 2016 the amortized postretirement expense is forecast to be unfavorable $1-2 million and then be virtually eliminated.”
The Board of Directors has approved payment of a quarterly dividend of seven cents per share on the common stock outstanding. The dividend will be paid on September 1, 2011 to stockholders of record on August 15, 2011.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, July 27, 2011. The dial in number is 800-895-1085 (domestic) or 785-424-1055 (international). The playback number is 800-283-8217 (domestic) or 402-220-0868 (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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SIX MONTHS ENDED
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JUNE 30,
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JUNE 30,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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NET SALES
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$ | 244,005 | $ | 231,048 | $ | 464,235 | $ | 410,399 | ||||||||
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COST OF SALES
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180,832 | 172,659 | 347,910 | 308,192 | ||||||||||||
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GROSS PROFIT
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63,173 | 58,389 | 116,325 | 102,207 | ||||||||||||
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SELLING, GENERAL & ADMINISTRATIVE EXPENSES
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40,016 | 41,803 | 80,656 | 78,468 | ||||||||||||
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RESTRUCTURING AND INTEGRATION EXPENSES
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125 | 1,289 | 468 | 2,042 | ||||||||||||
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OTHER INCOME, NET
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262 | 136 | 531 | 516 | ||||||||||||
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OPERATING INCOME
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23,294 | 15,433 | 35,732 | 22,213 | ||||||||||||
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OTHER NON-OPERATING INCOME, NET
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176 | 162 | 443 | 180 | ||||||||||||
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INTEREST EXPENSE
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1,045 | 2,002 | 2,402 | 3,866 | ||||||||||||
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EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
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22,425 | 13,593 | 33,773 | 18,527 | ||||||||||||
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PROVISION FOR INCOME TAXES
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8,732 | 5,532 | 13,069 | 7,599 | ||||||||||||
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EARNINGS FROM CONTINUING OPERATIONS
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13,693 | 8,061 | 20,704 | 10,928 | ||||||||||||
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LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
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(355 | ) | (372 | ) | (659 | ) | (868 | ) | ||||||||
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NET EARNINGS
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$ | 13,338 | $ | 7,689 | $ | 20,045 | $ | 10,060 | ||||||||
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NET EARNINGS PER COMMON SHARE:
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BASIC EARNINGS FROM CONTINUING OPERATIONS
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$ | 0.60 | $ | 0.36 | $ | 0.91 | $ | 0.49 | ||||||||
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DISCONTINUED OPERATION
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(0.02 | ) | (0.02 | ) | (0.03 | ) | (0.04 | ) | ||||||||
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NET EARNINGS PER COMMON SHARE - BASIC
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$ | 0.58 | $ | 0.34 | $ | 0.88 | $ | 0.45 | ||||||||
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DILUTED EARNINGS FROM CONTINUING OPERATIONS
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$ | 0.59 | $ | 0.35 | $ | 0.90 | $ | 0.48 | ||||||||
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DISCONTINUED OPERATION
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(0.01 | ) | (0.01 | ) | (0.03 | ) | (0.03 | ) | ||||||||
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NET EARNINGS PER COMMON SHARE - DILUTED
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$ | 0.58 | $ | 0.34 | $ | 0.87 | $ | 0.45 | ||||||||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES
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22,867,323 | 22,570,886 | 22,787,337 | 22,493,031 | ||||||||||||
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WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
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23,196,125 | 23,529,898 | 23,438,247 | 22,584,666 | ||||||||||||
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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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SIX MONTHS ENDED
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June 30,
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June 30,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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EARNINGS FROM CONTINUING OPERATIONS
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GAAP EARNINGS FROM CONTINUING OPERATIONS
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$ | 13,693 | $ | 8,061 | $ | 20,704 | $ | 10,928 | ||||||||
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RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
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75 | 774 | 281 | 1,226 | ||||||||||||
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LOSS FROM EUROPE DIVESTITURE (NET OF TAX)
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- | - | - | 47 | ||||||||||||
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POSTRETIRMENT CURTAILMENT GAIN (NET OF TAX)
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(2,188 | ) | - | (2,188 | ) | - | ||||||||||
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GAIN FROM SALE OF BUILDINGS (NET OF TAX)
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(157 | ) | (125 | ) | (315 | ) | (398 | ) | ||||||||
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NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
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$ | 11,423 | $ | 8,710 | $ | 18,482 | $ | 11,803 | ||||||||
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DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
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GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
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$ | 0.35 | $ | 0.90 | $ | 0.48 | ||||||||||
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RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
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- | 0.04 | 0.01 | 0.06 | ||||||||||||
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LOSS FROM EUROPE DIVESTITURE (NET OF TAX)
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- | - | - | - | ||||||||||||
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POSTRETIRMENT CURTAILMENT GAIN (NET OF TAX)
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(0.09 | ) | - | (0.09 | ) | - | ||||||||||
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GAIN FROM SALE OF BUILDINGS (NET OF TAX)
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(0.01 | ) | (0.01 | ) | (0.02 | ) | (0.02 | ) | ||||||||
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NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
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$ | 0.49 | $ | 0.38 | $ | 0.80 | $ | 0.52 | ||||||||
MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS BEFORE SPECIAL ITEMS, WHICH ARE NON-GAAP MEASUREMENTS, 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 OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE NOT RECOGNIZED IN ACCORDANCE WITH GENERALLY ACCEPTED OVERALL 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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June 30,
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December 31,
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2011
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2010
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(Unaudited)
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ASSETS
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CASH
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$ | 13,094 | $ | 12,135 | ||||
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ACCOUNTS RECEIVABLE, GROSS
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159,938 | 111,765 | ||||||
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ALLOWANCE FOR DOUBTFUL ACCOUNTS
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7,319 | 6,779 | ||||||
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ACCOUNTS RECEIVABLE, NET
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152,619 | 104,986 | ||||||
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INVENTORIES
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236,451 | 241,158 | ||||||
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ASSETS HELD FOR SALE
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216 | 216 | ||||||
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OTHER CURRENT ASSETS
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24,079 | 26,211 | ||||||
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TOTAL CURRENT ASSETS
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426,459 | 384,706 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, NET
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61,240 | 60,666 | ||||||
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GOODWILL AND OTHER INTANGIBLES, NET
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31,379 | 12,487 | ||||||
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OTHER ASSETS
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25,929 | 34,942 | ||||||
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TOTAL ASSETS
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$ | 545,007 | $ | 492,801 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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NOTES PAYABLE
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$ | 67,805 | $ | 52,887 | ||||
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CURRENT PORTION OF LONG TERM DEBT
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108 | 12,402 | ||||||
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ACCOUNTS PAYABLE
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74,421 | 49,919 | ||||||
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ACCRUED CUSTOMER RETURNS
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37,306 | 23,207 | ||||||
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OTHER CURRENT LIABILITIES
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78,203 | 76,416 | ||||||
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TOTAL CURRENT LIABILITIES
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257,843 | 214,831 | ||||||
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LONG-TERM DEBT
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258 | 307 | ||||||
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ACCRUED ASBESTOS LIABILITIES
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25,533 | 24,792 | ||||||
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OTHER LIABILITIES
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24,247 | 42,988 | ||||||
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TOTAL LIABILITIES
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307,881 | 282,918 | ||||||
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TOTAL STOCKHOLDERS' EQUITY
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237,126 | 209,883 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 545,007 | $ | 492,801 | ||||
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STANDARD MOTOR PRODUCTS, INC.
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Segment Revenues and Operating Profit
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(In thousands)
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THREE MONTHS ENDED
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SIX MONTHS ENDED
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June 30,
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June 30,
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2011
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2010
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2011
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2010
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(unaudited)
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(unaudited)
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Revenues
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Engine Management
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$ | 159,919 | $ | 152,815 | $ | 324,123 | $ | 289,912 | ||||||||||||||||||||||||
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Temperature Control
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79,715 | 73,926 | 133,794 | 113,941 | ||||||||||||||||||||||||||||
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All Other
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4,371 | 4,307 | 6,318 | 6,546 | ||||||||||||||||||||||||||||
| $ | 244,005 | $ | 231,048 | $ | 464,235 | $ | 410,399 | |||||||||||||||||||||||||
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Gross Margin
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Engine Management
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$ | 40,012 | 25.0 | % | $ | 37,488 | 24.5 | % | $ | 80,016 | 24.7 | % | $ | 70,622 | 24.4 | % | ||||||||||||||||
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Temperature Control
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19,646 | 24.6 | % | 17,707 | 24.0 | % | 29,926 | 22.4 | % | 25,960 | 22.8 | % | ||||||||||||||||||||
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All Other
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3,515 | 3,194 | 6,383 | 5,625 | ||||||||||||||||||||||||||||
| $ | 63,173 | 25.9 | % | $ | 58,389 | 25.3 | % | $ | 116,325 | 25.1 | % | $ | 102,207 | 24.9 | % | |||||||||||||||||
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Selling, General & Administrative
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Engine Management
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$ | 26,435 | 16.5 | % | $ | 26,284 | 17.2 | % | $ | 51,257 | 15.8 | % | $ | 49,437 | 17.1 | % | ||||||||||||||||
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Temperature Control
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10,710 | 13.4 | % | 10,002 | 13.5 | % | 19,765 | 14.8 | % | 17,910 | 15.7 | % | ||||||||||||||||||||
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All Other
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2,871 | 5,517 | 9,634 | 11,121 | ||||||||||||||||||||||||||||
| $ | 40,016 | 16.4 | % | $ | 41,803 | 18.1 | % | $ | 80,656 | 17.4 | % | $ | 78,468 | 19.1 | % | |||||||||||||||||
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Operating Profit
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Engine Management
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$ | 13,577 | 8.5 | % | $ | 11,205 | 7.3 | % | $ | 28,759 | 8.9 | % | $ | 21,185 | 7.3 | % | ||||||||||||||||
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Temperature Control
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8,935 | 11.2 | % | 7,705 | 10.4 | % | 10,161 | 7.6 | % | 8,050 | 7.1 | % | ||||||||||||||||||||
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All Other
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645 | (2,324 | ) | (3,251 | ) | (5,496 | ) | |||||||||||||||||||||||||
| 23,157 | 9.5 | % | 16,586 | 7.2 | % | 35,669 | 7.7 | % | 23,739 | 5.8 | % | |||||||||||||||||||||
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Restructuring & Integration
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(125 | ) | -0.1 | % | (1,289 | ) | -0.6 | % | (468 | ) | -0.1 | % | (2,042 | ) | -0.5 | % | ||||||||||||||||
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Other Income, Net
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262 | 0.1 | % | 136 | 0.1 | % | 531 | 0.1 | % | 516 | 0.1 | % | ||||||||||||||||||||
| $ | 23,294 | 9.5 | % | $ | 15,433 | 6.7 | % | $ | 35,732 | 7.7 | % | $ | 22,213 | 5.4 | % | |||||||||||||||||