STANDARD MOTOR PRODUCTS, INC. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 1, 2014

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8-K - STANDARD MOTOR PRODUCTS, INC 8-K 5-1-2014 - STANDARD MOTOR PRODUCTS, INC.form8k.htm
EXHIBIT 99.1
 
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
First Quarter 2014 Results and a Quarterly Dividend
 
New York, NY, May 1, 2014......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, 2014.
 
Consolidated net sales for the first quarter of 2014 were $232.8 million, compared to consolidated net sales of $230.7 million during the comparable quarter in 2013.  Earnings from continuing operations for the first quarter of 2014 were $12.4 million or 53 cents per diluted share, compared to $9.6 million or 41 cents per diluted share in the first quarter of 2013. 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 2014 were $12.4 million or 53 cents per diluted share, compared to $9.7 million or 42 cents per diluted share in the first quarter of 2013.
37-18 Northern Blvd., Long Island City, NY  11101
(718) 392-0200
www.smpcorp.com
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “We are pleased to report continued operational improvements which resulted in an increase in operating profit of 27% from $16 million to $20.4 million and in operational diluted earnings per share from continuing operations from 42 cents to 53 cents.
“The earnings growth resulted primarily from an increase in gross margin from 28.5% to 29.2% combined with a reduction in SG&A expense. In gross margin, we continue to reap the benefits of our initiatives of recent years – moving production to low cost areas, increased manufacturing, savings in purchasing, and successfully integrating our prior acquisitions. The savings in SG&A resulted from continued streamlining and cost reductions in our distribution centers, as well as cost control in other areas.

“Engine Management sales were up 2.2% from the prior year. This is on the low end of our publicly stated forecast for industry growth. However, it comes on the heels of a 14% increase in the fourth quarter of 2013, when certain customers moved pipeline orders forward into the fourth quarter. We believe industry demographics remain healthy, and we continue to forecast organic growth in the low to mid-single digit range.

“Temperature Control sales were down approximately 2% from the prior year. However, the first quarter for Temperature Control essentially represents pre-season stocking orders. 2013, you may recall, was a cool summer and a poor air conditioning season, and this, we believe, was reflected in slightly reduced pre-season orders.
“On April 21st we announced two transactions. First, a $14 million investment to create a 50/50 joint venture with Gwo Yng Enterprises, a China-based manufacturer of air conditioning accumulators, filter driers, hose assemblies, and switches. This investment will provide us with a low cost source of high quality temperature control products. It will also provide an entrée into the rapidly growing China market.

“At the same time we acquired certain assets and liabilities of Annex Manufacturing, a distributor of a wide range of temperature control products, for $11.5 million. Annex’s 2013 sales were roughly $22 million, and our Temperature Control division accounted for roughly 40% of the volume. After a transition period, the Annex operations will be transferred to our facility in Lewisville, Texas.

“As we said in the prior press release, we anticipate that, exclusive of one time transition costs, both of these transactions will be accretive to earnings in 2014.

“Earlier in the year we announced the acquisition of certain assets and liabilities of Pensacola Fuel Injection, a remanufacturer of diesel fuel injectors and other related products – a rapidly growing product line. We are in the process of relocating this operation to our facility in Grapevine, Texas.
“We are confident that all three of these transactions will make us a stronger company in 2014 and the years ahead.”

The Board of Directors has approved payment of a quarterly dividend of thirteen cents per share on the common stock outstanding. The dividend will be paid on June 2, 2014 to stockholders of record on May 15, 2014.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, May 1, 2014.  The dial in number is 866-952-7524 (domestic) or
785-424-1829 (international). The playback number is 800-757-4768 (domestic) or 402-220-7227 (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,
  
 
  
2014
    
2013
  
 
  
(Unaudited)
  
NET SALES
  
$
232,752
    
$
230,708
  
 
                
COST OF SALES
    
164,842
      
164,880
  
 
                
GROSS PROFIT
    
67,910
      
65,828
  
 
                
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
47,594
      
49,610
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
171
      
418
  
OTHER INCOME, NET
    
260
      
230
  
 
                
OPERATING INCOME
    
20,405
      
16,030
  
 
                
OTHER NON-OPERATING EXPENSE, NET
    
(413
)
    
(196
)
 
                
INTEREST EXPENSE
    
308
      
572
  
 
                
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
19,684
      
15,262
  
 
                
PROVISION FOR INCOME TAXES
    
7,277
      
5,696
  
 
                
EARNINGS FROM CONTINUING OPERATIONS
    
12,407
      
9,566
  
 
                
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(682
)
    
(392
)
 
                
NET EARNINGS
  
$
11,725
    
$
9,174
  
 
                
NET EARNINGS PER COMMON SHARE:
                
 
                
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.54
    
$
0.42
  
DISCONTINUED OPERATION
    
(0.03
)
    
(0.02
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.51
    
$
0.40
  
 
                
 
                
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.53
    
$
0.41
  
DISCONTINUED OPERATION
    
(0.03
)
    
(0.01
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.50
    
$
0.40
  
 
                
 
                
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,947,241
      
22,853,494
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
23,224,698
      
23,095,490
  

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit

(In thousands)
  
   
   
   
 
 
  
   
   
   
 
 
  
   
   
   
 
 
  
THREE MONTHS ENDED
    
 
 
  
March 31,
    
 
 
  
2014
    
   
2013
    
 
 
  
(Unaudited)
    
 
Revenues
  
   
   
   
 
Engine Management
  
$
179,294
    
   
$
175,509
    
 
Temperature Control
    
51,485
    
     
52,728
    
 
All Other
    
1,973
    
     
2,471
    
 
 
  
$
232,752
    
   
$
230,708
    
 
 
          
           
 
Gross Margin
          
           
 
Engine Management
  
$
53,195
      
29.7
%
  
$
51,714
      
29.5
%
Temperature Control
    
11,885
      
23.1
%
    
10,986
      
20.8
%
All Other
    
2,830
              
3,128
          
 
  
$
67,910
      
29.2
%
  
$
65,828
      
28.5
%
 
                                
Selling, General & Administrative
                                
Engine Management
  
$
28,651
      
16.0
%
  
$
30,561
      
17.4
%
Temperature Control
    
11,272
      
21.9
%
    
11,359
      
21.5
%
All Other
    
7,671
              
7,690
          
 
  
$
47,594
      
20.4
%
  
$
49,610
      
21.5
%
 
                                
 
                                
Operating Profit
                                
Engine Management
  
$
24,544
      
13.7
%
  
$
21,153
      
12.1
%
Temperature Control
    
613
      
1.2
%
    
(373
)
    
-0.7
%
All Other
    
(4,841
)
            
(4,562
)
        
 
    
20,316
      
8.7
%
    
16,218
      
7.0
%
Restructuring & Integration
    
(171
)
    
-0.1
%
    
(418
)
    
-0.2
%
Other Income, Net
    
260
      
0.1
%
    
230
      
0.1
%
 
  
$
20,405
      
8.8
%
  
$
16,030
      
6.9
%

STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)
  
   
 
 
  
THREE MONTHS ENDED
  
 
  
March 31,
  
 
  
2014
    
2013
  
 
  
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
  
   
 
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
12,407
    
$
9,566
  
 
                
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
    
103
      
251
  
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
    
(157
)
    
(157
)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
12,353
    
$
9,660
  
 
                
 
                
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.53
    
$
0.41
  
 
                
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
    
-
      
0.01
  
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
    
-
      
-
  
 
                
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.53
    
$
0.42
  


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 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,
  
 
  
2014
    
2013
  
 
  
(Unaudited)
    
 
 
  
   
 
ASSETS
  
 
  
   
 
CASH
  
$
4,423
    
$
5,559
  
 
                
ACCOUNTS RECEIVABLE, GROSS
    
132,990
      
132,170
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
7,089
      
6,969
  
ACCOUNTS RECEIVABLE, NET
    
125,901
      
125,201
  
 
                
INVENTORIES
    
284,468
      
269,447
  
OTHER CURRENT ASSETS
    
45,269
      
45,870
  
 
                
TOTAL CURRENT ASSETS
    
460,061
      
446,077
  
 
                
PROPERTY, PLANT AND EQUIPMENT, NET
    
63,955
      
63,646
  
GOODWILL AND OTHER INTANGIBLES, NET
    
84,183
      
72,866
  
OTHER ASSETS
    
32,722
      
32,934
  
 
                
TOTAL ASSETS
  
$
640,921
    
$
615,523
  
 
                
 
                
LIABILITIES AND STOCKHOLDERS' EQUITY
  
 
                
 
                
NOTES PAYABLE
  
$
33,023
    
$
21,406
  
CURRENT PORTION OF LONG TERM DEBT
    
27
      
59
  
ACCOUNTS PAYABLE
    
81,725
      
71,469
  
ACCRUED CUSTOMER RETURNS
    
37,803
      
31,464
  
OTHER CURRENT LIABILITIES
    
87,191
      
95,918
  
 
                
TOTAL CURRENT LIABILITIES
    
239,769
      
220,316
  
 
                
LONG-TERM DEBT
    
16
      
16
  
ACCRUED ASBESTOS LIABILITIES
    
23,643
      
23,919
  
OTHER LIABILITIES
    
21,662
      
21,840
  
 
                
 TOTAL LIABILITIES
    
285,090
      
266,091
  
 
                
 TOTAL STOCKHOLDERS' EQUITY
    
355,831
      
349,432
  
 
                
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
640,921
    
$
615,523
  

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows

(In thousands)
  
   
 
 
  
   
 
 
  
   
 
 
  
THREE MONTHS ENDED
  
 
  
MARCH 31,
  
 
  
2014
    
2013
  
 
  
(Unaudited)
  
 
  
   
 
CASH FLOWS FROM OPERATING ACTIVITIES
  
   
 
 
  
   
 
NET EARNINGS
  
$
11,725
    
$
9,174
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
                
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
4,084
      
4,273
  
OTHER
    
2,366
      
3,970
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
(852
)
    
(29,051
)
INVENTORY
    
(12,715
)
    
(26,726
)
ACCOUNTS PAYABLE
    
9,310
      
14,270
  
OTHER
    
(4,686
)
    
(2,739
)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVTIES
    
9,232
      
(26,829
)
 
                
 
                
CASH FLOWS FROM INVESTING ACTIVITIES
                
 
                
CAPITAL EXPENDITURES
    
(2,763
)
    
(2,581
)
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(12,225
)
    
(12,760
)
OTHER INVESTING ACTIVITIES
    
-
      
(596
)
NET CASH USED IN INVESTING ACTIVITIES
    
(14,988
)
    
(15,937
)
 
                
 
                
CASH FLOWS FROM FINANCING ACTIVITIES
                
 
                
NET CHANGE IN DEBT
    
11,584
      
35,069
  
PURCHASE OF TREASURY STOCK
    
(4,526
)
    
(602
)
DIVIDENDS PAID
    
(2,984
)
    
(2,510
)
OTHER FINANCING ACTIVITIES
    
1,049
      
8,093
  
NET CASH PROVIDED BY FINANCING ACTIVITIES
    
5,123
      
40,050
  
 
                
 
                
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
(503
)
    
(636
)
NET DECREASE IN CASH AND CASH EQUIVALENTS
    
(1,136
)
    
(3,352
)
CASH AND CASH EQUIVALENTS at beginning of period
    
5,559
      
13,074
  
CASH AND CASH EQUIVALENTS at end of period
  
$
4,423
    
$
9,722
  
 

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