SMP
$46.47
Standard Motor Products
($.47)
(1.00%)
Earnings Details
2nd Quarter June 2016
Wednesday, August 03, 2016 8:30:00 AM
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Summary

Standard Motor Products (SMP) Recent Earnings

Standard Motor Products (SMP) reported 2nd Quarter June 2016 earnings of $0.88 per share on revenue of $289.0 million. The consensus earnings estimate was $0.74 per share on revenue of $279.6 million. Revenue grew 7.3% 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
$0.88
Earnings Whisper
-
Consensus Estimate
$0.74
Reported Revenue
$289.0 Mil
Revenue Estimate
$279.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Standard Motor Products, Inc. Announces Second Quarter 2016 Results and a Quarterly Dividend

Standard Motor Products, Inc. (SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and six months ending June 30, 2016.

Consolidated net sales for the second quarter of 2016 were $289 million, compared to consolidated net sales of $269.4 million during the comparable quarter in 2015. Earnings from continuing operations for the second quarter of 2016 were $19.9 million or 86 cents per diluted share, compared to $13.8 million or 59 cents per diluted share in the second quarter of 2015. 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 2016 were $20.2 million or 88 cents per diluted share, compared to $13.6 million or 59 cents per diluted share in the second quarter of 2015.

Consolidated net sales for the six month period ended June 30, 2016, were $527.9 million, compared to consolidated net sales of $497 million during the comparable period in 2015. Earnings from continuing operations for the six month period ended June 30, 2016, were $32.5 million or $1.41 per diluted share, compared to $23.1 million or $1.00 per diluted share in the comparable period of 2015. 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, 2016, and 2015 were $32.8 million or $1.43 per diluted share and $22.9 million or 98 cents per diluted share, respectively.

Operating income, before restructuring and integration expenses and other income, net, increased approximately 54% in the second quarter of 2016 and 46% in the six month period ended June 30, 2016. However, excluding one-time costs of approximately $3.8 million and $8.5 million in the second quarter of 2015 and the six month period ended June 30, 2015, respectively, these increases would have been 30% and 18% in the second quarter of 2016 and the first six month period of 2016, respectively.

Mr. Eric P. Sills, Standard Motor Products’ Chief Executive Officer and President stated, "We are pleased with our results for the second quarter and first half of 2016. Net sales were up 7.3% for the quarter and 6.2% for the half; 2016 sales included $8.5 million from our recent acquisition of the General Cable Corporation’s North American automotive ignition wire business.

"We are also quite pleased with our strong performance in profitability, although as mentioned above, some of it was due to favorable comparisons to 2015 when we incurred some fairly substantial one-time costs that were not repeated in 2016. We therefore expect earnings in the second half of 2016 to continue to show improvement over 2015, but to a lesser extent, as the bulk of the roughly $10 million one-time costs from 2015 were incurred in the first half of the year.

"Within our operating divisions, Engine Management net sales were up 12.3% for the quarter and 7.2% for the half. Excluding the $8.5 million from the recent wire acquisition, comparable net sales increased 7.6% for the quarter and 4.8% for the half. As we’ve said in the past, there are typically timing differences between when our customers purchase products from us and their point-of-sale (POS) sales. We believe their purchases in the second quarter somewhat outpaced their sales out, and as these tend to balance out over time, we continue to forecast sales increases in this division in the low- to mid-single digit range.

"The profit improvement in Engine Management came mostly from an increase in gross margin, from 29.4% to 31.9% for the six months. Much of this is attributable to the absence of many of the 2015 one-time costs, mentioned above, but more significantly for the long run, continuous improvement in all our locations.

"Turning to Temperature Control, net sales were slightly down for the quarter but 4.7% ahead for the first half of the year. This is the result of the timing of pre-season stocking orders, which came in earlier this year than in 2015.

"More important are our customers’ POS sales, which are heavily dependent on the weather. Throughout the early spring, the weather was cool and damp, which depressed sales. Since June, however, the temperature has turned warm, and POS sales have picked up. July and August will be critical for the year.

"The profit improvement in Temperature Control, as in Engine Management, is attributable to a significant increase in gross margin, which has gone from 19.7% to 24% for the first six months of 2016. Here too, this is due to the absence of 2015 one-time costs, as well as internal operational improvements. We continue to forecast an ongoing annual gross margin for Temperature Control in the 23% to 24% range.

"We have begun work on integrating our recent wire acquisition. While we are still early in the process, we are pleased with our results, and look forward to a successful integration of the two operations.

"Looking at the balance sheet, our total debt increased roughly $53 million from year-end to approximately $100 million. The increase was primarily related to our recent wire acquisition for $67 million slightly offset by positive cash flow from operations and a reduction in cash. We remain very comfortable with our current debt leverage."

The Board of Directors has approved payment of a quarterly dividend of seventeen cents per share on the common stock outstanding. The dividend will be paid on September 1, 2016, to stockholders of record on August 15, 2016.

Standard Motor Products, Inc. will hold a conference call at 10:30 AM, Eastern Time, on Wednesday, August 3, 2016. The dial-in number is 800-894-5910 (domestic) or 785-424-1052 (international). The playback number is 800-839-4198 (domestic) or 402-220-2988 (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,
2016
2015
2016
2015
(Unaudited)
(Unaudited)
NET SALES
$
288,977
$
269,382
$
527,888
$
496,971
COST OF SALES
201,901
196,622
367,816
360,322
GROSS PROFIT
87,076
72,760
160,072
136,649
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
54,758
51,736
107,756
100,934
RESTRUCTURING AND INTEGRATION EXPENSES (INCOME)
771
(26)
1,012
31
OTHER INCOME , NET
297
262
559
543
OPERATING INCOME
31,844
21,312
51,863
36,227
OTHER NON-OPERATING INCOME, NET
265
548
598
699
INTEREST EXPENSE
394
480
705
906
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
31,715
21,380
51,756
36,020
PROVISION FOR INCOME TAXES
11,853
7,572
19,238
12,873
EARNINGS FROM CONTINUING OPERATIONS
19,862
13,808
32,518
23,147
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
(618)
(430)
(1,070)
(821)
NET EARNINGS
$
19,244
$
13,378
$
31,448
$
22,326
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS
$
0.87
$
0.60
$
1.43
$
1.01
DISCONTINUED OPERATION
(0.02)
(0.02)
(0.04)
(0.04)
NET EARNINGS PER COMMON SHARE - BASIC
$
0.85
$
0.58
$
1.39
$
0.97
DILUTED EARNINGS FROM CONTINUING OPERATIONS
$
0.86
$
0.59
$
1.41
$
1.00
DISCONTINUED OPERATION
(0.02)
(0.01)
(0.04)
(0.04)
NET EARNINGS PER COMMON SHARE - DILUTED
$
0.84
$
0.58
$
1.37
$
0.96
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
22,705,310
22,917,718
22,673,811
22,914,322
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
23,018,730
23,261,094
22,988,502
23,256,255
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
(In thousands)
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2016
2015
2016
2015
(unaudited)
(unaudited)
Revenues
Engine Management
$
198,848
$
176,992
$
379,529
$
354,063
Temperature Control
87,503
89,079
144,269
137,807
All Other
2,626
3,311
4,090
5,101
$
288,977
$
269,382
$
527,888
$
496,971
Gross Margin
Engine Management
$
63,831
32.1%
$
52,267
29.5%
$
121,107
31.9%
$
103,969
29.4%
Temperature Control
20,584
23.5%
17,303
19.4%
34,674
24.0%
27,130
19.7%
All Other
2,661
3,190
4,291
5,550
$
87,076 30.1%
$
72,760 27.0%
$
160,072
30.3%
$
136,649
27.5%
Selling, General & Administrative
Engine Management
$
33,192
16.7%
$
30,442
17.2%
$
66,249 17.5%
$
60,446 17.1%
Temperature Control
14,257
16.3%
14,138
15.9%
25,951
18.0%
25,328
18.4%
All Other
7,309
7,156
15,556
15,160
$
54,758 18.9%
$
51,736 19.2%
$
107,756
20.4%
$
100,934
20.3%
Operating Income
Engine Management
$
30,639
15.4%
$
21,825
12.3%
$
54,858 14.5%
$
43,523 12.3%
Temperature Control
6,327
7.2%
3,165
3.6%
8,723
6.0%
1,802
1.3%
All Other
(4,648)
(3,966)
(11,265)
(9,610)
32,318
11.2%
21,024
7.8%
52,316
9.9%
35,715
7.2%
Restructuring & Integration
(771)
-0.3%
26
0.0%
(1,012)
-0.2%
(31)
0.0%
Other Income, Net
297
0.1%
262
0.1%
559
0.1%
543
0.1%
$
31,844 11.0%
$
21,312 7.9%
$
51,863 9.8%
$
36,227 7.3%
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,
2016
2015
2016
2015
(Unaudited)
(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS
GAAP EARNINGS FROM CONTINUING OPERATIONS
$
19,862
$
13,808
$
32,518
$
23,147
RESTRUCTURING AND INTEGRATION EXPENSES
771
(26)
1,012
31
GAIN FROM SALE OF BUILDINGS
(262)
(262)
(524)
(524)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
(205)
114
(196)
196
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
$
20,166
$
13,634
$
32,810
$
22,850
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
$
0.86
$
0.59
$
1.41
$
1.00
RESTRUCTURING AND INTEGRATION EXPENSES
0.03
-
0.04
-
GAIN FROM SALE OF BUILDINGS
(0.01)
-
(0.02)
(0.02)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
-
-
-
-
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
$
0.88
$
0.59
$
1.43
$
0.98
OPERATING INCOME
GAAP OPERATING INCOME
$
31,844
$
21,312
$
51,863
$
36,227
RESTRUCTURING AND INTEGRATION EXPENSES
771
(26)
1,012
31
OTHER INCOME, NET
(297)
(262)
(559)
(543)
NON-GAAP OPERATING INCOME
$
32,318
$
21,024
$
52,316
$
35,715
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,
2016
2015
(Unaudited)
ASSETS
CASH
$
12,395
$
18,800
ACCOUNTS RECEIVABLE, GROSS
173,285
128,099
ALLOWANCE FOR DOUBTFUL ACCOUNTS
4,850
4,246
ACCOUNTS RECEIVABLE, NET
168,435
123,853
INVENTORIES
317,429
285,793
OTHER CURRENT ASSETS
49,606
51,294
TOTAL CURRENT ASSETS
547,865
479,740
PROPERTY, PLANT AND EQUIPMENT, NET
75,224
68,882
GOODWILL AND OTHER INTANGIBLES, NET
135,832
84,267
OTHER ASSETS
44,489
48,175
TOTAL ASSETS
$
803,410
$
681,064
LIABILITIES AND STOCKHOLDERS’ EQUITY
NOTES PAYABLE
$
99,994
$
47,427
CURRENT PORTION OF LONG TERM DEBT
42
16
ACCOUNTS PAYABLE
99,158
72,711
ACCRUED CUSTOMER RETURNS
44,363
38,812
OTHER CURRENT LIABILITIES
94,239
84,950
TOTAL CURRENT LIABILITIES
337,796
243,916
LONG-TERM DEBT
144
62
ACCRUED ASBESTOS LIABILITIES
31,717
32,185
OTHER LIABILITIES
13,271
12,922
TOTAL LIABILITIES
382,928
289,085
TOTAL STOCKHOLDERS’ EQUITY
420,482
391,979
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
803,410
$
681,064
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
SIX MONTHS ENDED
JUNE 30,
2016
2015
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS
$
31,448
$
22,326
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION
9,269
8,552
OTHER
8,085
3,962
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE
(41,726)
(34,563)
INVENTORY
(20,819)
(820)
ACCOUNTS PAYABLE
18,989
18,327
OTHER
18,482
8,388
NET CASH PROVIDED BY OPERATING ACTIVTIES
23,728
26,172
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
(67,289)
-
CAPITAL EXPENDITURES
(10,134)
(10,184)
OTHER INVESTING ACTIVITIES
5
26
NET CASH USED IN INVESTING ACTIVITIES
(77,418)
(10,158)
CASH FLOWS FROM FINANCING ACTIVITIES
NET CHANGE IN DEBT
52,676
(3,761)
PURCHASE OF TREASURY STOCK
(377)
(7,046)
DIVIDENDS PAID
(7,705)
(6,876)
OTHER FINANCING ACTIVITIES
2,609
518
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 47,203
(17,165)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
82
127
NET DECREASE IN CASH AND CASH EQUIVALENTS
(6,405)
(1,024)
CASH AND CASH EQUIVALENTS at beginning of Period
18,800
13,728
CASH AND CASH EQUIVALENTS at end of Period
$
12,395
$
12,704

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-second-quarter-2016-results-and-a-quarterly-dividend-300308116.html

SOURCE Standard Motor Products, Inc.

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