SMP
$50.64
Standard Motor Products
$.55
1.10%
Earnings Details
2nd Quarter June 2018
Thursday, July 26, 2018 8:30:00 AM
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Summary

Standard Motor Products (SMP) Recent Earnings

Standard Motor Products (SMP) reported 2nd Quarter June 2018 earnings of $0.74 per share on revenue of $286.6 million. The consensus earnings estimate was $0.83 per share on revenue of $305.5 million. Revenue fell 8.3% compared to the same quarter a year ago.

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

Results
Reported Earnings
$0.74
Earnings Whisper
-
Consensus Estimate
$0.83
Reported Revenue
$286.6 Mil
Revenue Estimate
$305.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Standard Motor Products, Inc. Announces Second Quarter 2018 Results and a Quarterly Dividend

NEW YORK, July 26, 2018 /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, 2018.

Consolidated net sales for the second quarter of 2018 were $286.6 million, compared to consolidated net sales of $312.7 million during the comparable quarter in 2017. Earnings from continuing operations for the second quarter of 2018 were $16.8 million or 73 cents per diluted share, compared to $18.3 million or 78 cents per diluted share in the second quarter of 2017. 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 2018 were $17 million or 74 cents per diluted share, compared to $18.8 million or 81 cents per diluted share in the second quarter of 2017.

Consolidated net sales for the six month period ended June 30, 2018, were $548.5 million, compared to consolidated net sales of $595.1 million during the comparable period in 2017.  Earnings from continuing operations for the six month period ended June 30, 2018, were $25.4 million or $1.11 per diluted share, compared to $34.6 million or $1.48 per diluted share in the comparable period of 2017.  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, 2018, and 2017 were $27.5 million or $1.20 per diluted share and $36 million or $1.54 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are obviously not pleased with our financial results so far this year. However, as we said in our last conference call, the shortfall was the result of temporary or timing-related issues, which were expected to continue into the second quarter.  We anticipate improvement over the balance of the year as these issues move behind us.

"Engine Management sales were down for both the quarter and the half. A portion of the decrease stems from our Wire and Cable business, which is an older technology used on fewer cars, and is experiencing, as anticipated, a gradual decline. 

"The balance of the shortfall is related to large pipeline orders placed in the first half of 2017 by certain accounts, which were not repeated this year. Excluding these pipelines, our Engine Management business experienced increases in the low single digits, in line with our long term forecast for the division.  Meanwhile, our customers are reporting increases in Engine Management sell-through, showing sequential improvement over the last few quarters, which bodes well for the future.

"As stated in our first quarter commentary, Engine Management gross margin continues to be impacted by temporary costs associated with plant moves. The largest of these is the transfer of General Cable's ignition wire assembly operation from Nogales, Mexico to Reynosa, Mexico, which has required the hiring and training of hundreds new employees. We are almost fully staffed, and have begun to see improvement in efficiencies as these new employees gain experience.

"Turning to Temperature Control, sales remained depressed through April and May, the result of a poor selling season in 2017 followed by a cool early spring. However, in mid-May, the weather finally turned warm, and we began to see a large influx of orders in June. A portion of these were shipped in June, with the balance carrying over into July.

"Due to the continuing warm weather, our customers are experiencing substantial POS increases over 2017. Incoming business remains robust, and we anticipate healthy Temperature Control sales in the third quarter.

"As expected, our Temperature Control gross margins bounced back in the second quarter, and with sales remaining strong, we anticipate this to continue for the balance of the year.

"Finally, a point about tariffs. As with much of our industry, certain of our products are included in the tariffs recently applied to imports from China. We are confident that we will be able to pass the increases on to our customers.

"To summarize, while we are not satisfied with our results for the first six months, with the steps we have taken, and with most of the one-time events behind us, we are optimistic for the balance of the year."

The Board of Directors has approved payment of a quarterly dividend of 21 cents per share on the common stock outstanding. The dividend will be paid on September 4, 2018 to stockholders of record on August 15, 2018.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, July 26, 2018.  The dial-in number is 866-342-8591 (domestic) or 203-518-9822 (international). The playback number is 800-839-2434 (domestic) or 402-220-7211 (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,





2018



2017




2018



2017





(Unaudited)




(Unaudited)



NET SALES


$       286,636



$       312,729




$       548,462



$       595,107


















COST OF SALES


205,347



222,063




394,584



420,331


















GROSS PROFIT


81,289



90,666




153,878



174,776


















SELLING, GENERAL & ADMINISTRATIVE EXPENSES


57,750



60,346




115,467



117,763



RESTRUCTURING AND INTEGRATION EXPENSES 


231



1,235




3,067



2,782



OTHER INCOME, NET


42



314




313



630


















OPERATING INCOME 


23,350



29,399




35,657



54,861


















OTHER NON-OPERATING INCOME, NET


480



1,010




449



1,890


















INTEREST EXPENSE


1,251



722




1,883



1,190


















EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


22,579



29,687




34,223



55,561


















PROVISION FOR INCOME TAXES


5,752



11,426




8,799



20,933


















EARNINGS FROM CONTINUING OPERATIONS


16,827



18,261




25,424



34,628


















LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(882)



(497)




(1,490)



(1,130)


















NET EARNINGS 


$         15,945



$         17,764




$         23,934



$         33,498





























































































NET EARNINGS PER COMMON SHARE:






























   BASIC EARNINGS FROM CONTINUING OPERATIONS


$             0.75



$             0.80




$             1.13



$             1.52



   DISCONTINUED OPERATION


(0.04)



(0.02)




(0.07)



(0.05)



   NET EARNINGS PER COMMON SHARE - BASIC


$             0.71



$             0.78




$             1.06



$             1.47

































   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$             0.73



$             0.78




$             1.11



$             1.48



   DISCONTINUED OPERATION


(0.04)



(0.02)




(0.07)



(0.04)



   NET EARNINGS PER COMMON SHARE - DILUTED


$             0.69



$             0.76




$             1.04



$             1.44

































WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,471,428



22,820,079




22,484,894



22,833,263



WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


22,958,469



23,329,082




22,962,049



23,332,480



 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income



























(In thousands)









































THREE MONTHS ENDED



SIX MONTHS ENDED




JUNE 30,



JUNE 30,




2018



2017



2018



2017




(Unaudited)



(Unaudited)


Revenues













Ignition, Emission and Fuel System Parts


$       162,462



$       178,105



$       323,539



$       343,258


Wire and Cable


40,967



45,244



79,378



91,405


        Engine Management


203,429



223,349



402,917



434,663















Compressors


46,940



49,644



76,838



87,545


Other Climate Control Parts


33,430



37,747



63,763



70,136


        Temperature Control


80,370



87,391



140,601



157,681















All Other


2,837



1,989



4,944



2,763


        Revenues


$         286,636



$         312,729



$         548,462



$         595,107















Gross Margin













Engine Management


$           57,782

28.4%


$           65,599

29.4%


$         114,252

28.4%


$         129,723

29.8%

Temperature Control


20,800

25.9%


23,111

26.4%


34,467

24.5%


40,818

25.9%

All Other


2,707



1,956



5,159



4,235


        Gross Margin


$           81,289

28.4%


$           90,666

29.0%


$         153,878

28.1%


$         174,776

29.4%














Selling, General & Administrative













Engine Management


$           34,598

17.0%


$           38,180

17.1%


$           70,862

17.6%


$           74,208

17.1%

Temperature Control


15,721

19.6%


14,544

16.6%


28,550

20.3%


27,550

17.5%

All Other


7,431



7,622



16,055



16,005


        Selling, General & Administrative


$           57,750

20.1%


$           60,346

19.3%


$         115,467

21.1%


$         117,763

19.8%



























Operating Income













Engine Management


$           23,184

11.4%


$           27,419

12.3%


$           43,390

10.8%


$           55,515

12.8%

Temperature Control


5,079

6.3%


8,567

9.8%


5,917

4.2%


13,268

8.4%

All Other


(4,724)



(5,666)



(10,896)



(11,770)


        Subtotal


23,539

8.2%


30,320

9.7%


38,411

7.0%


57,013

9.6%

Restructuring & Integration


(231)

-0.1%


(1,235)

-0.4%


(3,067)

-0.6%


(2,782)

-0.5%

Other Income, Net


42

0.0%


314

0.1%


313

0.1%


630

0.1%

        Operating Income


$           23,350

8.1%


$           29,399

9.4%


$           35,657

6.5%


$           54,861

9.2%

 

 

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,



2018


2017



2018


2017


(Unaudited)


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS




















GAAP EARNINGS FROM CONTINUING OPERATIONS


$            16,827


$            18,261



$            25,424


$            34,628











RESTRUCTURING AND INTEGRATION EXPENSES


231


1,235



3,067


2,782

GAIN FROM SALE OF BUILDINGS


-


(262)



(218)


(524)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(60)


(389)



(741)


(903)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$            16,998


$            18,845



$            27,532


$            35,983





















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS




















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.73


$               0.78



$               1.11


$               1.48











RESTRUCTURING AND INTEGRATION EXPENSES


0.01


0.05



0.13


0.12

GAIN FROM SALE OF BUILDINGS


-


(0.01)



(0.01)


(0.02)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


-


(0.01)



(0.03)


(0.04)











NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.74


$               0.81



$               1.20


$                1.54





















OPERATING INCOME




















GAAP OPERATING INCOME


$            23,350


$            29,399



$            35,657


$            54,861











RESTRUCTURING AND INTEGRATION EXPENSES


231


1,235



3,067


2,782

OTHER INCOME, NET


(42)


(314)



(313)


(630)











NON-GAAP OPERATING INCOME


$            23,539


$            30,320



$            38,411


$            57,013































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,



2018




2017



(Unaudited)












ASSETS










CASH


$            18,573




$            17,323








ACCOUNTS RECEIVABLE, GROSS


179,394




145,024

ALLOWANCE FOR DOUBTFUL ACCOUNTS


5,533




4,967

ACCOUNTS RECEIVABLE, NET


173,861




140,057








INVENTORIES


331,453




326,411

UNRETURNED CUSTOMER INVENTORIES


18,246




-

OTHER CURRENT ASSETS


16,458




12,300








TOTAL CURRENT ASSETS


558,591




496,091








PROPERTY, PLANT AND EQUIPMENT, NET


91,277




89,103

GOODWILL


67,360




67,413

OTHER INTANGIBLES, NET


52,216




56,261

DEFERRED INCOME TAXES


31,842




32,420

INVESTMENT IN UNCONSOLIDATED AFFILIATES


34,725




31,184

OTHER ASSETS


15,934




15,095








TOTAL ASSETS


$          851,945




$          787,567















LIABILITIES AND STOCKHOLDERS' EQUITY

















NOTES PAYABLE


$            88,528




$            57,000

CURRENT PORTION OF OTHER DEBT


5,169




4,699

ACCOUNTS PAYABLE


94,988




77,990

ACCRUED CUSTOMER RETURNS


42,536




35,916

ACCRUED CORE LIABILITY


26,138




11,899

OTHER CURRENT LIABILITIES


84,394




98,393








TOTAL CURRENT LIABILITIES


341,753




285,897








OTHER LONG-TERM DEBT


34




79

ACCRUED ASBESTOS LIABILITIES


32,339




33,376

OTHER LIABILITIES


15,449




14,561








 TOTAL LIABILITIES 


389,575




333,913








 TOTAL STOCKHOLDERS' EQUITY 


462,370




453,654








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$          851,945




$          787,567

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















SIX MONTHS ENDED



JUNE 30,



2018



2017



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS 

$        23,934



$        33,498


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






PROVIDED BY (USED IN) OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

11,706



11,316


OTHER

8,641



7,498


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(34,524)



(53,069)


INVENTORIES

(6,650)



(27,048)


ACCOUNTS PAYABLE

15,684



17,475


PREPAID EXPENSES AND OTHER CURRENT ASSETS

(2,988)



(943)


SUNDRY PAYABLES AND ACCRUED EXPENSES 

(9,115)



5,663


OTHER

(2,502)



(1,225)


NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

4,186



(6,835)














CASH FLOWS FROM INVESTING ACTIVITIES












ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(8,572)



-


CAPITAL EXPENDITURES

(11,325)



(8,843)


OTHER INVESTING ACTIVITIES

16



2


NET CASH USED IN INVESTING ACTIVITIES 

(19,881)



(8,841)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

32,287



24,113


PURCHASE OF TREASURY STOCK

(7,640)



(5,176)


DIVIDENDS PAID

(9,437)



(8,674)


OTHER FINANCING ACTIVITIES

1,990



1,488


NET CASH PROVIDED BY FINANCING ACTIVITIES

17,200



11,751














EFFECT OF EXCHANGE RATE CHANGES ON CASH

(255)



518


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

1,250



(3,407)


CASH AND CASH EQUIVALENTS at beginning of Period

17,323



19,796


CASH AND CASH EQUIVALENTS at end of Period

$        18,573



$        16,389

 

 

Cision View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-second-quarter-2018-results-and-a-quarterly-dividend-300686812.html

SOURCE Standard Motor Products, Inc.