Attached files
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| 8-K - STANDARD MOTOR PRODUCTS 8-K 11-1-2011 - STANDARD MOTOR PRODUCTS, INC. | form8-k.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
Third Quarter 2011 Results and a Quarterly Dividend
New York, NY, November 1, 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 nine months ended September 30, 2011.
Consolidated net sales for the third quarter of 2011 were $236.2 million, compared to consolidated net sales of $227.5 million during the comparable quarter in 2010. Earnings from continuing operations for the third quarter of 2011 were $14.1 million or 61 cents per diluted share, compared to $11.1 million or 48 cents per diluted share in the third 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 third quarter of 2011 were $13.7 million or 59 cents, compared to $9.8 million or 43 cents per diluted share in the third quarter of 2010.
37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
Consolidated net sales for the nine month period ended September 30, 2011 were $700.5 million, compared to consolidated net sales of $637.9 million during the comparable period in 2010. Earnings from continuing operations for the nine month period ended September 30, 2011 were $34.8 million or $1.51 per diluted share, compared to $22 million or 97 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 nine months ended 2011 and 2010 were $32.1 million or $1.39 per diluted share and $21.6 million or 96 cents per diluted share,
respectively.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “Engine Management sales increased 7.6% in the third quarter of 2011 and 10.3% for the full nine months of 2011.
“Temperature Control sales decreased 5.1% during the third quarter of 2011, reflecting a timing difference in customer buying patterns from the prior year. In 2011, we offered a pre-season dating program, and customers placed orders early in the year. In 2010, we did not offer such a program, and with the summer turning out to be one of the hottest on record, customers ordered heavily during the third quarter. Still, for the full nine months of 2011, Temperature Control sales were 8.7% above 2010.
“Total sales were 3.8% ahead for the third quarter and 9.8% ahead of 2010 for the full nine months. These figures are in line with our customers’ sales ‘out the door’ as the industry environment remains healthy.
“We continue to make progress in all areas of cost control. Our gross margin is up almost a full point from the comparable quarter a year ago – 27.3% vs. 26.4% - while operating expenses are nearly a point lower – 17.6% vs. 18.5%. The result is an operating profit improvement of $4.7 million, compared to the third quarter of 2010. Year to date the operating profit improvement is even stronger at $14.6 million, excluding the $3.6 million postretirement curtailment gain recorded in the second quarter 2011.
“These earnings improvements are reflected in cash flow. At the end of September 2011 our total debt was roughly $30 million below September 2010, despite the $27 million acquisition of the BLD Engine Control business earlier this year.
“Finally, as reported recently, we are pleased to announce the acquisition of Forecast Trading Corporation. Forecast is a leading supplier of value-priced Engine Management products, a segment that is growing as the vehicle population continues to age and the economic climate remains difficult.
“This acquisition will enable us to offer our Engine Management customers an excellent combination – the top OE quality line and the best value line. In addition, as we integrate the two companies, we anticipate synergistic improvements in product cost and operating expenses.
“The cost of the acquisition is approximately $44 million. However, with our cash flow continuing strong, we anticipate that we will end the year with a Debt:EBITDA ratio of approximately one to one. We believe the acquisition will be accretive to earnings in year one.”
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 December 1, 2011 to stockholders of record on November 15, 2011.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, November 1, 2011. The dial-in number is 800-895-0231 (domestic) or 785-424-1054 (international). The playback number is 800-695-0395 (domestic) or 402-220-1388 (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
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(In thousands, except share and per share data)
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THREE MONTHS ENDED
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NINE MONTHS ENDED
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SEPTEMBER 30,
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SEPTEMBER 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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$ | 236,220 | $ | 227,540 | $ | 700,455 | $ | 637,939 | ||||||||
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COST OF SALES
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171,732 | 167,526 | 519,642 | 475,718 | ||||||||||||
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GROSS PROFIT
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64,488 | 60,014 | 180,813 | 162,221 | ||||||||||||
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SELLING, GENERAL & ADMINISTRATIVE EXPENSES
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41,680 | 41,991 | 122,336 | 120,459 | ||||||||||||
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RESTRUCTURING AND INTEGRATION EXPENSES
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275 | 1,388 | 743 | 3,430 | ||||||||||||
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OTHER INCOME, NET
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258 | 1,436 | 789 | 1,952 | ||||||||||||
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OPERATING INCOME
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22,791 | 18,071 | 58,523 | 40,284 | ||||||||||||
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OTHER NON-OPERATING INCOME, NET
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230 | 300 | 673 | 480 | ||||||||||||
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INTEREST EXPENSE
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757 | 1,844 | 3,159 | 5,710 | ||||||||||||
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EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
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22,264 | 16,527 | 56,037 | 35,054 | ||||||||||||
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PROVISION FOR INCOME TAXES
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8,164 | 5,430 | 21,233 | 13,029 | ||||||||||||
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EARNINGS FROM CONTINUING OPERATIONS
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14,100 | 11,097 | 34,804 | 22,025 | ||||||||||||
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LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
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(1,055 | ) | (1,441 | ) | (1,714 | ) | (2,309 | ) | ||||||||
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NET EARNINGS
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$ | 13,045 | $ | 9,656 | $ | 33,090 | $ | 19,716 | ||||||||
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NET EARNINGS PER COMMON SHARE:
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BASIC EARNINGS FROM CONTINUING OPERATIONS
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$ | 0.62 | $ | 0.49 | $ | 1.53 | $ | 0.98 | ||||||||
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DISCONTINUED OPERATION
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(0.05 | ) | (0.06 | ) | (0.08 | ) | (0.10 | ) | ||||||||
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NET EARNINGS PER COMMON SHARE - BASIC
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$ | 0.57 | $ | 0.43 | $ | 1.45 | $ | 0.88 | ||||||||
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DILUTED EARNINGS FROM CONTINUING OPERATIONS
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$ | 0.61 | $ | 0.48 | $ | 1.51 | $ | 0.97 | ||||||||
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DISCONTINUED OPERATION
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(0.04 | ) | (0.06 | ) | (0.08 | ) | (0.10 | ) | ||||||||
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NET EARNINGS PER COMMON SHARE - DILUTED
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$ | 0.57 | $ | 0.42 | $ | 1.43 | $ | 0.87 | ||||||||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES
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22,863,048 | 22,597,117 | 22,812,851 | 22,528,108 | ||||||||||||
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WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
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23,042,981 | 23,472,411 | 23,299,363 | 22,604,344 | ||||||||||||
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
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(In thousands, except per share data)
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THREE MONTHS ENDED
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NINE MONTHS ENDED
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SEPTEMBER 30,
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SEPTEMBER 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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$ | 14,100 | $ | 11,097 | $ | 34,804 | $ | 22,025 | ||||||||
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RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
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165 | 832 | 446 | 2,058 | ||||||||||||
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LOSS FROM EUROPE DIVESTITURE (NET OF TAX)
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- | - | - | 47 | ||||||||||||
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POSTRETIREMENT CURTAILMENT GAIN (NET OF TAX)
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- | - | (2,188 | ) | - | |||||||||||
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REVERSAL OF LT TAX LIABILITY
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(454 | ) | (1,084 | ) | (454 | ) | (1,084 | ) | ||||||||
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GAIN FROM SALE OF BUILDINGS (NET OF TAX)
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(157 | ) | (1,033 | ) | (472 | ) | (1,431 | ) | ||||||||
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NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
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$ | 13,654 | $ | 9,812 | $ | 32,136 | $ | 21,615 | ||||||||
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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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$ | 0.61 | $ | 0.48 | $ | 1.51 | $ | 0.97 | ||||||||
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RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
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- | 0.03 | 0.02 | 0.09 | ||||||||||||
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LOSS FROM EUROPE DIVESTITURE (NET OF TAX)
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- | - | - | - | ||||||||||||
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POSTRETIREMENT CURTAILMENT GAIN (NET OF TAX)
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- | - | (0.10 | ) | - | |||||||||||
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REVERSAL OF LT TAX LIABILITY
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(0.02 | ) | (0.04 | ) | (0.02 | ) | (0.04 | ) | ||||||||
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GAIN FROM SALE OF BUILDINGS (NET OF TAX)
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- | (0.04 | ) | (0.02 | ) | (0.06 | ) | |||||||||
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NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
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$ | 0.59 | $ | 0.43 | $ | 1.39 | $ | 0.96 | ||||||||
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 OVERALLOPERATING 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
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(In thousands)
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September 30,
2011 |
December 31,
2010 |
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(Unaudited)
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ASSETS
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CASH
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$ | 14,898 | $ | 12,135 | ||||
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ACCOUNTS RECEIVABLE, GROSS
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144,557 | 111,765 | ||||||
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ALLOWANCE FOR DOUBTFUL ACCOUNTS
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7,036 | 6,779 | ||||||
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ACCOUNTS RECEIVABLE, NET
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137,521 | 104,986 | ||||||
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INVENTORIES
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233,995 | 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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22,269 | 26,211 | ||||||
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TOTAL CURRENT ASSETS
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408,899 | 384,706 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, NET
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60,114 | 60,666 | ||||||
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GOODWILL AND OTHER INTANGIBLES, NET
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30,778 | 12,487 | ||||||
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OTHER ASSETS
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23,952 | 34,942 | ||||||
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TOTAL ASSETS
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$ | 523,743 | $ | 492,801 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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NOTES PAYABLE
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$ | 41,790 | $ | 52,887 | ||||
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CURRENT PORTION OF LONG TERM DEBT
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107 | 12,402 | ||||||
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ACCOUNTS PAYABLE
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68,060 | 49,919 | ||||||
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ACCRUED CUSTOMER RETURNS
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32,626 | 23,207 | ||||||
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OTHER CURRENT LIABILITIES
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89,001 | 76,416 | ||||||
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TOTAL CURRENT LIABILITIES
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231,584 | 214,831 | ||||||
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LONG-TERM DEBT
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221 | 307 | ||||||
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ACCRUED ASBESTOS LIABILITIES
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26,248 | 24,792 | ||||||
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OTHER LIABILITIES
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22,697 | 42,988 | ||||||
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TOTAL LIABILITIES
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280,750 | 282,918 | ||||||
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TOTAL STOCKHOLDERS' EQUITY
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242,993 | 209,883 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 523,743 | $ | 492,801 | ||||
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
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(In thousands)
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THREE MONTHS ENDED
SEPTEMBER 30, |
NINE MONTHS ENDED
SEPTEMBER 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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$ | 165,182 | $ | 153,577 | $ | 489,305 | $ | 443,489 | ||||||||||||||||||||||||
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Temperature Control
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68,148 | 71,774 | 201,942 | 185,714 | ||||||||||||||||||||||||||||
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All Other
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2,890 | 2,189 | 9,208 | 8,736 | ||||||||||||||||||||||||||||
| $ | 236,220 | $ | 227,540 | $ | 700,455 | $ | 637,939 | |||||||||||||||||||||||||
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Gross Margin
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Engine Management
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$ | 43,834 | 26.5 | % | $ | 39,785 | 25.9 | % | $ | 123,850 | 25.3 | % | $ | 110,407 | 24.9 | % | ||||||||||||||||
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Temperature Control
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17,343 | 25.4 | % | 17,157 | 23.9 | % | 47,269 | 23.4 | % | 43,117 | 23.2 | % | ||||||||||||||||||||
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All Other
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3,311 | 3,072 | 9,694 | 8,697 | ||||||||||||||||||||||||||||
| $ | 64,488 | 27.3 | % | $ | 60,014 | 26.4 | % | $ | 180,813 | 25.8 | % | $ | 162,221 | 25.4 | % | |||||||||||||||||
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Selling, General & Administrative
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Engine Management
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$ | 25,226 | 15.3 | % | $ | 25,468 | 16.6 | % | $ | 76,483 | 15.6 | % | $ | 74,905 | 16.9 | % | ||||||||||||||||
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Temperature Control
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9,557 | 14.0 | % | 10,799 | 15.0 | % | 29,322 | 14.5 | % | 28,709 | 15.5 | % | ||||||||||||||||||||
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All Other
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6,897 | 5,724 | 16,531 | 16,845 | ||||||||||||||||||||||||||||
| $ | 41,680 | 17.6 | % | $ | 41,991 | 18.5 | % | $ | 122,336 | 17.5 | % | $ | 120,459 | 18.9 | % | |||||||||||||||||
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Operating Profit
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Engine Management
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$ | 18,608 | 11.3 | % | $ | 14,317 | 9.3 | % | $ | 47,367 | 9.7 | % | $ | 35,502 | 8.0 | % | ||||||||||||||||
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Temperature Control
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7,786 | 11.4 | % | 6,358 | 8.9 | % | 17,947 | 8.9 | % | 14,408 | 7.8 | % | ||||||||||||||||||||
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All Other
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(3,586 | ) | (2,652 | ) | (6,837 | ) | (8,148 | ) | ||||||||||||||||||||||||
| 22,808 | 9.7 | % | 18,023 | 7.9 | % | 58,477 | 8.3 | % | 41,762 | 6.5 | % | |||||||||||||||||||||
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Restructuring & Integration
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(275 | ) | -0.1 | % | (1,388 | ) | -0.6 | % | (743 | ) | -0.1 | % | (3,430 | ) | -0.5 | % | ||||||||||||||||
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Other Income, Net
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258 | 0.1 | % | 1,436 | 0.6 | % | 789 | 0.1 | % | 1,952 | 0.3 | % | ||||||||||||||||||||
| $ | 22,791 | 9.6 | % | $ | 18,071 | 7.9 | % | $ | 58,523 | 8.4 | % | $ | 40,284 | 6.3 | % | |||||||||||||||||