SMP
$44.36
Standard Motor Products
($.18)
(.40%)
Earnings Details
1st Quarter March 2018
Thursday, May 3, 2018 8:30:00 AM
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Summary

Standard Motor Products (SMP) Recent Earnings

Standard Motor Products (SMP) reported 1st Quarter March 2018 earnings of $0.46 per share on revenue of $261.8 million. The consensus earnings estimate was $0.66 per share on revenue of $280.4 million. Revenue fell 7.3% 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
$0.46
Earnings Whisper
-
Consensus Estimate
$0.66
Reported Revenue
$261.8 Mil
Revenue Estimate
$280.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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

NEW YORK, May 3, 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 ending March 31, 2018.

Consolidated net sales for the first quarter of 2018 were $261.8 million, compared to consolidated net sales of $282.4 million during the comparable quarter in 2017. Earnings from continuing operations for the first quarter of 2018 were $8.6 million or 37 cents per diluted share, compared to $16.4 million or 70 cents per diluted share in the first 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 first quarter of 2018 were $10.5 million or 46 cents per diluted share, compared to $17.1 million or 74 cents per diluted share in the first quarter of 2017.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "Our overall business experienced declines in sales and margins in the first quarter, compared to the first quarter of 2017, with different dynamics affecting each division. The shortfall is largely due to events that are either timing-related or temporary, as described below.

"Engine Management sales decreased by 5.6% in the first quarter, compared to the first quarter of 2017. Excluding our wire and cable business, which is in general decline due to the product life cycle, the Engine Management business was down 2.7%. As previously reported, a few of our large customers placed heavy pipeline orders during the early months of 2017, as they looked to expand their offering in both depth and breadth. This was not repeated in 2018 and that accounts for the entire shortfall.

"Overall, our major customers reported a sales increase in Engine Management in the low single digits during the first quarter, in line with our long-term forecasts. As we have said, our customers' sales are a better indicator of our results than their purchases, which can vary significantly quarter to quarter based on ordering patterns.

"Our Engine Management gross margins continue to be impacted by temporary costs associated with the multiple plant moves. On a positive note, in March of this year we were able to fully exit both the Orlando and Nogales facilities, and going forward we will have eliminated these duplicate plant expenses.  The receiving locations are doing well and showing continuous improvement, but are still working towards returning to historic run-rate efficiencies, which we expect to achieve by year-end.

"Our Temperature Control sales were down 14% compared with the first quarter of 2017.  The Temperature Control business in the first quarter is comprised almost entirely of pre-season build orders, which reflect the previous year's selling season and resulting customer inventory levels. 2016 was a very warm summer, and our customers ended that year with below average inventories. Their first quarter 2017 orders were therefore very strong – up 24% from the first quarter of 2016, which makes the comparisons this year quite difficult.  Again, these sales are merely positioning our customers for the summer – ultimately, our year is determined by how hot it gets in-season, and time will tell for 2018.

"Temperature Control gross margin reductions were entirely due to our decreasing of production in response to the cooler 2017 season and the resulting under-absorption of overhead in our factories. Now that the closure of Grapevine is complete and our two Chinese joint ventures are performing well, we expect a return to our more recent healthy margin performance.

"In conclusion, while we are not satisfied with our first quarter results, we believe that the causes are relatively short-term in nature, and that as we continue to implement the initiatives we have begun, we anticipate gradual improvement throughout 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 June 1, 2018 to stockholders of record on May 15, 2018.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, May 3, 2018.  The dial-in number is 877-876-9173 (domestic) or 785-424-1670 (international). The playback number is 800-839-8798 (domestic) or 402-220-6078 (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,




2018



2017




(Unaudited)


NET SALES


$       261,826



$       282,378









COST OF SALES


189,237



198,268









GROSS PROFIT


72,589



84,110









SELLING, GENERAL & ADMINISTRATIVE EXPENSES


57,717



57,417


RESTRUCTURING AND INTEGRATION EXPENSES


2,836



1,547


OTHER INCOME, NET


271



316









OPERATING INCOME


12,307



25,462









OTHER NON-OPERATING INCOME (EXPENSE), NET


(31)



880









INTEREST EXPENSE


632



468









EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


11,644



25,874









PROVISION FOR INCOME TAXES


3,047



9,507









EARNINGS FROM CONTINUING OPERATIONS


8,597



16,367









LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(608)



(633)









NET EARNINGS


$           7,989



$         15,734












































NET EARNINGS PER COMMON SHARE:














   BASIC EARNINGS FROM CONTINUING OPERATIONS


$             0.38



$             0.72


   DISCONTINUED OPERATION


(0.02)



(0.03)


   NET EARNINGS PER COMMON SHARE - BASIC


$             0.36



$             0.69
















   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$             0.37



$             0.70


   DISCONTINUED OPERATION


(0.02)



(0.03)


   NET EARNINGS PER COMMON SHARE - DILUTED


$             0.35



$             0.67
















WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,498,510



22,846,595


WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


22,967,281



23,313,773









 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income















(In thousands)























THREE MONTHS ENDED




MARCH 31,




2018



2017




(Unaudited)


Revenues







Engine Management


$       199,488



$       211,314


Temperature Control


60,231



70,290


All Other


2,107



774




$         261,826



$         282,378









Gross Margin







Engine Management


$         56,470

28.3%


$         64,124

30.3%

Temperature Control


13,667

22.7%


17,707

25.2%

All Other


2,452



2,279




$           72,589

27.7%


$           84,110

29.8%








Selling, General & Administrative







Engine Management


$           36,264

18.2%


$           36,028

17.0%

Temperature Control


12,829

21.3%


13,006

18.5%

All Other


8,624



8,383




$           57,717

22.0%


$           57,417

20.3%















Operating Income







Engine Management


$           20,206

10.1%


$           28,096

13.3%

Temperature Control


838

1.4%


4,701

6.7%

All Other


(6,172)



(6,104)




14,872

5.7%


26,693

9.5%

Restructuring & Integration


(2,836)

-1.1%


(1,547)

-0.5%

Other Income, Net


271

0.1%


316

0.1%



$           12,307

4.7%


$           25,462

9.0%















 

 

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures





















(In thousands, except per share amounts)







THREE MONTHS ENDED



MARCH 31,



2018


2017


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS










GAAP EARNINGS FROM CONTINUING OPERATIONS


$              8,597


$            16,367






RESTRUCTURING AND INTEGRATION EXPENSES


2,836


1,547

GAIN FROM SALE OF BUILDINGS


(218)


(262)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(681)


(514)






NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$            10,534


$            17,138











DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS










GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.37


$               0.70






RESTRUCTURING AND INTEGRATION EXPENSES


0.12


0.07

GAIN FROM SALE OF BUILDINGS


(0.01)


(0.01)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(0.02)


(0.02)






NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.46


$               0.74











OPERATING INCOME










GAAP OPERATING INCOME


$            12,307


$            25,462






RESTRUCTURING AND INTEGRATION EXPENSES


2,836


1,547

OTHER INCOME, NET


(271)


(316)






NON-GAAP OPERATING INCOME


$            14,872


$            26,693











 

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)























March 31,




December  31,



2018




2017



(Unaudited)












ASSETS









CASH


$       26,226




$       17,323








ACCOUNTS RECEIVABLE, GROSS


165,816




145,024

ALLOWANCE FOR DOUBTFUL ACCOUNTS


5,243




4,967

ACCOUNTS RECEIVABLE, NET


160,573




140,057








INVENTORIES


329,784




326,411

UNRETURNED CUSTOMER INVENTORY


18,674




-

OTHER CURRENT ASSETS


12,672




12,300








TOTAL CURRENT ASSETS


547,929




496,091








PROPERTY, PLANT AND EQUIPMENT, NET


92,237




89,103

GOODWILL


67,534




67,413

OTHER INTANGIBLES, NET


54,411




56,261

DEFERRED INCOME TAXES


32,469




32,420

INVESTMENT IN UNCONSOLIDATED AFFILIATES


35,703




31,184

OTHER ASSETS


15,917




15,095








TOTAL ASSETS


$     846,200




$     787,567















LIABILITIES AND STOCKHOLDERS' EQUITY
















NOTES PAYABLE


$       90,000




$       57,000

CURRENT PORTION OF OTHER DEBT


5,880




4,699

ACCOUNTS PAYABLE


90,718




77,990

ACCRUED CUSTOMER RETURNS


43,031




35,916

ACCRUED CORE LIABILITY


23,751




11,899

OTHER CURRENT LIABILITIES


85,148




98,393








TOTAL CURRENT LIABILITIES


338,528




285,897








OTHER LONG-TERM DEBT


42




79

ACCRUED ASBESTOS LIABILITIES


32,769




33,376

OTHER LIABILITIES


15,352




14,561








 TOTAL LIABILITIES


386,691




333,913








 TOTAL STOCKHOLDERS' EQUITY


459,509




453,654








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$     846,200




$     787,567








 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















THREE MONTHS ENDED



MARCH 31,



2018



2017



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS

$           7,989



$        15,734


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






USED IN OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

6,016



5,631


OTHER

4,459



3,870


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(20,367)



(45,325)


INVENTORY

(3,390)



(19,344)


ACCOUNTS PAYABLE

10,674



13,664


PREPAID EXPENSES AND OTHER CURRENT ASSETS

1,559



2,065


SUNDRY PAYABLES AND ACCRUED EXPENSES

(12,997)



(2,269)


OTHER

(95)



(910)


NET CASH USED IN OPERATING ACTIVITIES

(6,152)



(26,884)














CASH FLOWS FROM INVESTING ACTIVITIES












ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(6,472)



-


CAPITAL EXPENDITURES

(6,903)



(3,234)


OTHER INVESTING ACTIVITIES

-



2


NET CASH USED IN INVESTING ACTIVITIES

(13,375)



(3,232)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

34,054



27,224


PURCHASE OF TREASURY STOCK

(3,221)



(1,267)


DIVIDENDS PAID

(4,721)



(4,338)


OTHER FINANCING ACTIVITIES

1,885



3,650


NET CASH PROVIDED BY FINANCING ACTIVITIES

27,997



25,269














EFFECT OF EXCHANGE RATE CHANGES ON CASH

433



632


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

8,903



(4,215)


CASH AND CASH EQUIVALENTS at beginning of period

17,323



19,796


CASH AND CASH EQUIVALENTS at end of period

$        26,226



$        15,581







Cision View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-first-quarter-2018-results-and-a-quarterly-dividend-300641465.html

SOURCE Standard Motor Products, Inc.