SMP
$49.90
Standard Motor Products
$.15
.30%
Earnings Details
3rd Quarter September 2018
Friday, October 26, 2018 8:30:00 AM
Tweet Share Watch
Summary

Standard Motor Products (SMP) Recent Earnings

Standard Motor Products (SMP) reported 3rd Quarter September 2018 earnings of $0.83 per share on revenue of $296.6 million. The consensus earnings estimate was $0.82 per share on revenue of $290.9 million. Revenue grew 5.5% 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
$0.83
Earnings Whisper
-
Consensus Estimate
$0.82
Reported Revenue
$296.6 Mil
Revenue Estimate
$290.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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

NEW YORK, Oct. 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 nine months ending September 30, 2018.

Consolidated net sales for the third quarter of 2018 were $296.6 million, compared to consolidated net sales of $281.1 million during the comparable quarter in 2017. Earnings from continuing operations for the third quarter of 2018 were $19.3 million or 84 cents per diluted share, compared to $17.1 million or 74 cents per diluted share in the third 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 third quarter of 2018 were $19.1 million or 83 cents per diluted share, compared to $17.2 million or 74 cents per diluted share in the third quarter of 2017.

Consolidated net sales for the nine month period ended September 30, 2018, were $845.1 million, compared to consolidated net sales of $876.2 million during the comparable period in 2017.  Earnings from continuing operations for the nine month period ended September 30, 2018, were $44.7 million or $1.95 per diluted share, compared to $51.7 million or $2.22 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 nine months ended September 30, 2018, and 2017 were $46.7 million or $2.03 per diluted share and $53.2 million or $2.28 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President, stated, "We are pleased with our performance in the quarter. After a challenging first half, which was largely impacted by temporary or timing-related issues, our third quarter showed positive signs of recovery.  We believe this trend will continue for the balance of the year.

"Engine Management sales were essentially flat for the quarter. Our Wire and Cable product line, which is in gradual decline, was down 6.7%, while the balance of our Engine Management business showed an increase of 2.3%. Both of these trends are in line with our stated expectations. Meanwhile, excluding Wire and Cable, our customers have been reporting solid POS gains all year, which in the third quarter were up in the mid-single digits over 2017.

"Our Engine Management gross margin in the third quarter showed a 50 basis point improvement over the second quarter, as we are now beginning to see the gradual improvement in our efficiencies as we fully integrate the General Cable operation into our Reynosa, Mexico facility. While there remains much to be done, we are pleased to see this trending in the right direction.

"Year-to-date our Engine Management net sales were 4.9% below 2017 overall, and 3.2% below 2017 excluding Wire and Cable. As previously reported, the shortfall in the first half of the year was due to a few customers placing large pipeline orders in 2017 that were not repeated this year.

"Turning to Temperature Control, sales rebounded very strongly in the quarter, up 18.4% from last year. This was the result of a warm summer, compared to a mild summer in 2017. Sales year-to-date are essentially flat as compared to 2017. As previously reported, our first half sales lagged 2017 by almost 11%, as our customers entered 2018 with above normal inventory levels, and therefore placed substantially lower pre-season orders this year.

"The warm weather continued into autumn, which bodes well not just for this year's sales, but for next year's pre-season orders as well, as we expect our customers to end the year with lower than typical inventories.

"Temperature Control gross margin increased to 27.6% for the quarter, up from 26.8% from last year. This reflects the fact that we are now essentially fully low cost in our manufacturing, having exited our Texas operations in 2017. However, much of the gross margin improvement was negated by incremental SG&A associated with higher than usual distribution expenses. These increases were due to a combination of significant additional labor costs to keep up with the surge in sales, as well as start-up costs related to the installation of a new automation project in our distribution center.  We believe this project will be complete and fully optimized by year-end, and we will see substantial improvement next year.

"In closing, while we recognize that there is still a great deal of work ahead of us, we are pleased with the quarter, and feel that the temporary issues that have recently had a negative impact on us are either waning or are in the past. Coupled with strong signs of customer sell-through and industry health in general, we are excited about the future."

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 December 3, 2018 to stockholders of record on November 15, 2018.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, October 26, 2018.  The dial-in number is 866-342-8591 (domestic) or 203-518-9713 (international). The playback number is 800-839-5125 (domestic) or 402-220-1502 (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




NINE MONTHS ENDED



SEPTEMBER 30,




SEPTEMBER 30,



2018



2017




2018



2017



(Unaudited)




(Unaudited)

NET SALES


$       296,619



$       281,058




$       845,081



$       876,165














COST OF SALES


209,313



198,523




603,897



618,854














GROSS PROFIT


87,306



82,535




241,184



257,311














SELLING, GENERAL & ADMINISTRATIVE EXPENSES


60,137



54,963




175,604



172,726

RESTRUCTURING AND INTEGRATION EXPENSES


6



1,132




3,073



3,914

OTHER INCOME, NET


15



316




328



946














OPERATING INCOME 


27,178



26,756




62,835



81,617














OTHER NON-OPERATING INCOME, NET


351



482




800



2,372














INTEREST EXPENSE


1,254



595




3,137



1,785














EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


26,275



26,643




60,498



82,204














PROVISION FOR INCOME TAXES


7,002



9,535




15,801



30,468














EARNINGS FROM CONTINUING OPERATIONS


19,273



17,108




44,697



51,736














LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(3,524)



(3,983)




(5,014)



(5,113)














NET EARNINGS


$         15,749



$         13,125




$         39,683



$         46,623















































































NET EARNINGS PER COMMON SHARE:


























   BASIC EARNINGS FROM CONTINUING OPERATIONS


$             0.86



$             0.75




$             1.99



$             2.27

   DISCONTINUED OPERATION


(0.16)



(0.17)




(0.22)



(0.22)

   NET EARNINGS PER COMMON SHARE - BASIC


$            0.70



$             0.58




$             1.77



$             2.05



























   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$             0.84



$             0.74




$             1.95



$             2.22

   DISCONTINUED OPERATION


(0.15)



(0.17)




(0.22)



(0.22)

   NET EARNINGS PER COMMON SHARE - DILUTED


$             0.69



$             0.57




$             1.73



$             2.00



























WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,424,962



22,660,157




22,464,697



22,774,927

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


22,938,925



23,174,700




22,954,649



23,287,052

 

 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income



























(In thousands)









































THREE MONTHS ENDED



NINE MONTHS ENDED




SEPTEMBER 30,



SEPTEMBER 30,




2018



2017



2018



2017




(Unaudited)



(Unaudited)


Revenues













Ignition, Emission and Fuel System Parts


$         159,101



$         155,544



$         482,640



$         498,802


Wire and Cable


38,469



41,232



117,847



132,637


        Engine Management


197,570



196,776



600,487



631,439















Compressors


54,842



44,733



131,680



132,278


Other Climate Control Parts


41,237



36,427



105,000



106,563


        Temperature Control


96,079



81,160



236,680



238,841















All Other


2,970



3,122



7,914



5,885


        Revenues


$         296,619



$         281,058



$         845,081



$         876,165















Gross Margin













Engine Management


$           57,188

28.9%


$           57,808

29.4%


$         171,440

28.6%


$         187,531

29.7%

Temperature Control


26,523

27.6%


21,721

26.8%


60,990

25.8%


62,539

26.2%

All Other


3,595



3,006



8,754



7,241


        Gross Margin


$           87,306

29.4%


$           82,535

29.4%


$         241,184

28.5%


$         257,311

29.4%














Selling, General & Administrative













Engine Management


$           35,553

18.0%


$           34,289

17.4%


$         106,415

17.7%


$         108,497

17.2%

Temperature Control


17,961

18.7%


13,665

16.8%


46,511

19.7%


41,215

17.3%

All Other


6,623



7,009



22,678



23,014


        Selling, General & Administrative


$           60,137

20.3%


$           54,963

19.6%


$         175,604

20.8%


$         172,726

19.7%



























Operating Income













Engine Management


$           21,635

11.0%


$           23,519

12.0%


$           65,025

10.8%


$           79,034

12.5%

Temperature Control


8,562

8.9%


8,056

9.9%


14,479

6.1%


21,324

8.9%

All Other


(3,028)



(4,003)



(13,924)



(15,773)


        Subtotal


27,169

9.2%


27,572

9.8%


65,580

7.8%


84,585

9.7%

Restructuring & Integration


(6)

0.0%


(1,132)

-0.4%


(3,073)

-0.4%


(3,914)

-0.4%

Other Income, Net


15

0.0%


316

0.1%


328

0.0%


946

0.1%

        Operating Income


$           27,178

9.2%


$           26,756

9.5%


$           62,835

7.4%


$           81,617

9.3%

 

 

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures









































(In thousands, except per share amounts)












THREE MONTHS ENDED



NINE MONTHS ENDED



SEPTEMBER 30,



SEPTEMBER 30,



2018


2017



2018


2017


(Unaudited)


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS




















GAAP EARNINGS FROM CONTINUING OPERATIONS


$            19,273


$            17,108



$            44,697


$            51,736











RESTRUCTURING AND INTEGRATION EXPENSES


6


1,132



3,073


3,914

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(144)


(463)



(144)


(463)

GAIN FROM SALE OF BUILDINGS


-


(262)



(218)


(786)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(1)


(348)



(742)


(1,251)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$            19,134


$            17,167



$            46,666


$            53,150





















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS




















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$                0.84


$               0.74



$                1.95


$                2.22











RESTRUCTURING AND INTEGRATION EXPENSES


-


0.05



0.13


0.16

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(0.01)


(0.02)



(0.01)


(0.02)

GAIN FROM SALE OF BUILDINGS


-


(0.01)



(0.01)


(0.03)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


-


(0.02)



(0.03)


(0.05)











NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.83


$               0.74



$                2.03


$                2.28





















OPERATING INCOME




















GAAP OPERATING INCOME


$            27,178


$            26,756



$            62,835


$            81,617











RESTRUCTURING AND INTEGRATION EXPENSES


6


1,132



3,073


3,914

OTHER INCOME, NET


(15)


(316)



(328)


(946)











NON-GAAP OPERATING INCOME


$            27,169


$            27,572



$            65,580


$            84,585































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)























September 30,




December  31,



2018




2017



(Unaudited)












ASSETS










CASH


$            27,321




$             17,323








ACCOUNTS RECEIVABLE, GROSS


168,846




145,024

ALLOWANCE FOR DOUBTFUL ACCOUNTS


5,537




4,967

ACCOUNTS RECEIVABLE, NET


163,309




140,057








INVENTORIES


318,420




326,411

UNRETURNED CUSTOMER INVENTORY


21,295




-

OTHER CURRENT ASSETS


11,681




12,300








TOTAL CURRENT ASSETS


542,026




496,091








PROPERTY, PLANT AND EQUIPMENT, NET


91,735




89,103

GOODWILL


67,387




67,413

OTHER INTANGIBLES, NET


50,263




56,261

DEFERRED INCOME TAXES


34,907




32,420

INVESTMENT IN UNCONSOLIDATED AFFILIATES


33,785




31,184

OTHER ASSETS


16,284




15,095








TOTAL ASSETS


$          836,387




$           787,567















LIABILITIES AND STOCKHOLDERS' EQUITY

















NOTES PAYABLE


$            45,000




$             57,000

CURRENT PORTION OF OTHER DEBT


5,980




4,699

ACCOUNTS PAYABLE


84,031




77,990

ACCRUED CUSTOMER RETURNS


53,717




35,916

ACCRUED CORE LIABILITY


30,002




11,899

OTHER CURRENT LIABILITIES


90,221




98,393








TOTAL CURRENT LIABILITIES


308,951




285,897








OTHER LONG-TERM DEBT


26




79

ACCRUED ASBESTOS LIABILITIES


35,319




33,376

OTHER LIABILITIES


18,039




14,561








 TOTAL LIABILITIES 


362,335




333,913








 TOTAL STOCKHOLDERS' EQUITY 


474,052




453,654








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$          836,387




$          787,567

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















NINE MONTHS ENDED



SEPTEMBER 30,



2018



2017



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS 

$        39,683



$        46,623


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






PROVIDED BY OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

17,745



17,439


OTHER

12,220



14,065


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(23,428)



(27,753)


INVENTORY 

2,761



(18,746)


ACCOUNTS PAYABLE

5,193



90


PREPAID EXPENSES AND OTHER CURRENT ASSETS

1,202



(4,805)


SUNDRY PAYABLES AND ACCRUED EXPENSES 

12,828



8,728


OTHER

(619)



1,120


NET CASH PROVIDED BY OPERATING ACTIVITIES

67,585



36,761














CASH FLOWS FROM INVESTING ACTIVITIES












ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(9,852)



-


CAPITAL EXPENDITURES

(15,633)



(17,710)


OTHER INVESTING ACTIVITIES

37



6


NET CASH USED IN INVESTING ACTIVITIES 

(25,448)



(17,704)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

(10,537)



18,153


PURCHASE OF TREASURY STOCK

(9,271)



(20,000)


DIVIDENDS PAID

(14,144)



(12,990)


OTHER FINANCING ACTIVITIES

1,382



658


NET CASH USED IN FINANCING ACTIVITIES

(32,570)



(14,179)














EFFECT OF EXCHANGE RATE CHANGES ON CASH

431



724


NET INCREASE IN CASH AND CASH EQUIVALENTS

9,998



5,602


CASH AND CASH EQUIVALENTS at beginning of Period

17,323



19,796


CASH AND CASH EQUIVALENTS at end of Period

$        27,321



$        25,398

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-third-quarter-2018-results-and-a-quarterly-dividend-300738396.html

SOURCE Standard Motor Products, Inc.