SMP
$49.20
Standard Motor Products
($.30)
(.61%)
Earnings Details
2nd Quarter June 2019
Thursday, July 25, 2019 8:30:00 AM
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Summary

Standard Motor Products (SMP) Recent Earnings

Standard Motor Products (SMP) reported 2nd Quarter June 2019 earnings of $0.92 per share on revenue of $305.2 million. The consensus earnings estimate was $0.80 per share on revenue of $303.7 million. Revenue grew 6.5% on a year-over-year basis.

Standard Motor Products Inc is an independent manufacturer and distributor of replacement parts for motor vehicles in the automotive aftermarket industry.

Results
Reported Earnings
$0.92
Earnings Whisper
-
Consensus Estimate
$0.80
Reported Revenue
$305.2 Mil
Revenue Estimate
$303.7 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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 1st, 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

 

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SOURCE Standard Motor Products, Inc.