SMP
$52.74
Standard Motor Products
$.83
1.60%
Earnings Details
3rd Quarter September 2019
Wednesday, October 30, 2019 8:30:00 AM
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Summary

Standard Motor Products (SMP) Recent Earnings

Standard Motor Products (SMP) reported 3rd Quarter September 2019 earnings of $1.02 per share on revenue of $307.7 million. The consensus earnings estimate was $0.92 per share on revenue of $305.4 million. Revenue grew 3.7% 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
$1.02
Earnings Whisper
-
Consensus Estimate
$0.92
Reported Revenue
$307.7 Mil
Revenue Estimate
$305.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Standard Motor Products, Inc. Announces Third Quarter 2019 Results and a Quarterly Dividend

NEW YORK, Oct. 30, 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 nine months ending September 30, 2019.

Consolidated net sales for the third quarter of 2019 were $307.7 million, compared to consolidated net sales of $296.6 million during the comparable quarter in 2018. Earnings from continuing operations for the third quarter of 2019 were $22.7 million or $1.00 per diluted share, compared to $19.3 million or 84 cents per diluted share in the third 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 third quarter of 2019 were $23.1 million or $1.02 per diluted share, compared to $19.1 million or 83 cents per diluted share in the third quarter of 2018.

Consolidated net sales for the nine month period ended September 30, 2019, were $896.7 million, compared to consolidated net sales of $845.1 million during the comparable period in 2018.  Earnings from continuing operations for the nine month period ended September 30, 2019, were $56.3 million or $2.47 per diluted share, compared to $44.7 million or $1.95 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 nine months ended September 30, 2019 and 2018 were $57.3 million or $2.51 per diluted share and $46.7 million or $2.03 per diluted share, respectively. 

Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are quite pleased with our third quarter and with our year overall. We posted record sales and earnings, with both of our operating divisions continuing to perform well.

"Engine Management sales rose approximately 9.3% for the quarter and 7.8% year-to-date. Excluding Wire and Cable which is in secular decline, Engine Management sales in the quarter were up almost 14%, or roughly $22 million. Revenue from the Pollak acquisition, previously announced, accounted for nearly $10 million of this gain. Our Engine Management segment, excluding Pollak and Wire and Cable, increased 7.8% for the quarter. The growth was primarily attributable to a combination of several customer pipelines, a benefit from pricing actions and pass-through of tariff costs, as well as low single digit organic growth.

"Our sales in Engine Management have exceeded our customers' low single digit POS growth all year, and this tends to even out over time. Excluding Pollak, we anticipate that Engine Management sales will likely be flat or down for the fourth quarter of 2019 as these sales move closer to our customers' POS numbers. However, we remain optimistic for the year as a whole.

"Engine Management gross margins in the quarter improved nearly two points from last year to 30.7%, with sequential quarterly improvements throughout 2019.  This margin improvement was the result of several factors – the completion of the integration of our wire operations in Mexico, a continued emphasis on cost reductions, as well as certain pricing actions, and was partially offset by the adverse impact of tariffs being passed through to customers at our cost.

"Temperature Control sales were 8.1% lower than the third quarter of 2018. However, a portion of the 2018 volume included working down a large order backlog, generated by some of the hottest spring months in history, plus some start-up inefficiencies as we introduced our new automated warehouse system in Lewisville, TX. Year-to-date our Temperature Control sales are 2% above 2018.

"Temperature Control gross margins decreased by 1.6 points in the quarter, reflecting the dampening effect of tariffs being passed through to customers at our cost. The improvement in SG&A expenses reflects savings in distribution costs as we continue to refine and improve our new automated warehouse system.

"On August 1st we acquired a minority position in Jiangsu Che Yijia New Energy Technology Co. (CYJ), a Chinese manufacturer of electric compressors for electric vehicles. Founded in 2016, the company is still in its early stages, but we are pleased to have a strategic partner focused on parts for electric vehicles in the fast-growing Chinese market.

"Finally, as previously announced, we are pleased to welcome Nathan Iles as our new Chief Financial Officer. We believe he is an excellent fit for SMP, and we look forward to his contributions."

Loss from discontinued operations, net of income taxes, in the third quarter of 2019 was $7.9 million compared to $3.5 million in the comparable period last year. The loss pertains to asbestos-related liabilities from a brake business, originally acquired in 1986 and subsequently divested in 1998, which are adjusted in the third quarter each year when the Company engages an independent actuary to assess the Company's exposure. In the third quarter of 2019, the Company increased its asbestos-related indemnity liability to $52 million by recording a non-cash $9.7 million provision, or $7.1 million net of taxes.

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 December 2, 2019, to stockholders of record on November 15, 2019.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, October 30, 2019.  The dial-in number is 877-876-9173 (domestic) or 785-424-1667 (international). The playback number is 800-839-5109 (domestic) or 402-220-2688 (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,





2019



2018




2019



2018





(Unaudited)




(Unaudited)



NET SALES


$       307,723



$       296,619




$       896,661



$       845,081


















COST OF SALES


215,635



209,313




637,705



603,897


















GROSS PROFIT


92,088



87,306




258,956



241,184


















SELLING, GENERAL & ADMINISTRATIVE EXPENSES


59,947



60,137




180,483



175,604



RESTRUCTURING AND INTEGRATION EXPENSES 


825



6




1,469



3,073



OTHER INCOME (EXPENSE), NET


(12)



15




(15)



328


















OPERATING INCOME 


31,304



27,178




76,989



62,835


















OTHER NON-OPERATING INCOME, NET


225



351




2,282



800


















INTEREST EXPENSE


1,508



1,254




4,319



3,137


















EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


30,021



26,275




74,952



60,498


















PROVISION FOR INCOME TAXES


7,367



7,002




18,639



15,801


















EARNINGS FROM CONTINUING OPERATIONS


22,654



19,273




56,313



44,697


















LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(7,903)



(3,524)




(9,914)



(5,014)


















NET EARNINGS 


$         14,751



$         15,749




$         46,399



$         39,683





























































































NET EARNINGS PER COMMON SHARE:






























   BASIC EARNINGS FROM CONTINUING OPERATIONS


$              1.01



$              0.86




$              2.52



$              1.99



   DISCONTINUED OPERATION


(0.35)



(0.16)




(0.44)



(0.22)



   NET EARNINGS PER COMMON SHARE - BASIC


$              0.66



$              0.70




$              2.08



$              1.77

































   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$              1.00



$              0.84




$              2.47



$              1.95



   DISCONTINUED OPERATION


(0.35)



(0.15)




(0.44)



(0.22)



   NET EARNINGS PER COMMON SHARE - DILUTED


$              0.65



$              0.69




$              2.03



$              1.73

































WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,329,835



22,424,962




22,359,637



22,464,697



WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


22,754,440



22,938,925




22,814,228



22,954,649



 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income



























(In thousands)









































THREE MONTHS ENDED



NINE MONTHS ENDED




SEPTEMBER 30,



SEPTEMBER 30,




2019



2018



2019



2018




(Unaudited)



(Unaudited)


Revenues













Ignition, Emission Control, Fuel & Safety













   Related System Products


$       180,826



$       159,101



$       538,718



$       482,640


Wire and Cable


35,147



38,469



108,486



117,847


        Engine Management


215,973



197,570



647,204



600,487















Compressors


52,776



54,842



145,080



131,680


Other Climate Control Parts


35,525



41,237



96,551



105,000


        Temperature Control


88,301



96,079



241,631



236,680















All Other


3,449



2,970



7,826



7,914


        Revenues


$         307,723



$         296,619



$         896,661



$         845,081















Gross Margin













Engine Management


$         66,264

30.7%


$         57,188

28.9%


$       189,737

29.3%


$       171,440

28.6%

Temperature Control


22,973

26.0%


26,523

27.6%


61,715

25.5%


60,990

25.8%

All Other


2,851



3,595



7,504



8,754


        Gross Margin


$           92,088

29.9%


$           87,306

29.4%


$         258,956

28.9%


$         241,184

28.5%














Selling, General & Administrative













Engine Management


$         35,950

16.6%


$         35,553

18.0%


$         110,723

17.1%


$         106,415

17.7%

Temperature Control


15,495

17.5%


17,961

18.7%


45,033

18.6%


46,511

19.7%

All Other


8,502



6,623



24,727



22,678


        Selling, General & Administrative


$           59,947

19.5%


$           60,137

20.3%


$         180,483

20.1%


$         175,604

20.8%



























Operating Income













Engine Management


$         30,314

14.0%


$         21,635

11.0%


$           79,014

12.2%


$           65,025

10.8%

Temperature Control


7,478

8.5%


8,562

8.9%


16,682

6.9%


14,479

6.1%

All Other


(5,651)



(3,028)



(17,223)



(13,924)


        Subtotal


32,141

10.4%


27,169

9.2%


78,473

8.8%


65,580

7.8%

Restructuring & Integration


(825)

-0.3%


(6)

0.0%


(1,469)

-0.2%


(3,073)

-0.4%

Other Income (Expense), Net


(12)

0.0%


15

0.0%


(15)

0.0%


328

0.0%

        Operating Income


$           31,304

10.2%


$           27,178

9.2%


$           76,989

8.6%


$           62,835

7.4%

 

 

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,



2019


2018



2019


2018


(Unaudited)


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS




















GAAP EARNINGS FROM CONTINUING OPERATIONS


$            22,654


$            19,273



$            56,313


$            44,697











RESTRUCTURING AND INTEGRATION EXPENSES


825


6



1,469


3,073

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(144)


(144)



(144)


(144)

GAIN FROM SALE OF BUILDINGS


-


-



-


(218)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(214)


(1)



(382)


(742)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$            23,121


$            19,134



$            57,256


$            46,666





















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS




















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               1.00


$               0.84



$               2.47


$               1.95











RESTRUCTURING AND INTEGRATION EXPENSES


0.04


-



0.06


0.13

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(0.01)


(0.01)



(0.01)


(0.01)

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


$               1.02


$               0.83



$               2.51


$               2.03





















OPERATING INCOME




















GAAP OPERATING INCOME


$            31,304


$            27,178



$            76,989


$            62,835











RESTRUCTURING AND INTEGRATION EXPENSES


825


6



1,469


3,073

OTHER (INCOME) EXPENSE, NET


12


(15)



15


(328)











NON-GAAP OPERATING INCOME


$            32,141


$            27,169



$            78,473


$            65,580































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,



2019




2018



(Unaudited)












ASSETS








CASH


$             13,259




$             11,138








ACCOUNTS RECEIVABLE, GROSS


174,969




163,222

ALLOWANCE FOR DOUBTFUL ACCOUNTS


6,001




5,687

ACCOUNTS RECEIVABLE, NET


168,968




157,535








INVENTORIES


340,231




349,811

UNRETURNED CUSTOMER INVENTORY


20,325




20,484

OTHER CURRENT ASSETS


14,273




7,256








TOTAL CURRENT ASSETS


557,056




546,224








PROPERTY, PLANT AND EQUIPMENT, NET


88,835




90,754

OPERATING LEASE RIGHT-OF-USE ASSETS


34,055




-

GOODWILL


77,664




67,321

OTHER INTANGIBLES, NET


66,857




48,411

DEFERRED INCOME TAXES


39,105




42,334

INVESTMENT IN UNCONSOLIDATED AFFILIATES


39,030




32,469

OTHER ASSETS


18,081




15,619








TOTAL ASSETS


$           920,683




$           843,132















LIABILITIES AND STOCKHOLDERS' EQUITY















NOTES PAYABLE


$             78,211




$             43,689

CURRENT PORTION OF OTHER DEBT


5,225




5,377

ACCOUNTS PAYABLE


71,139




94,357

ACCRUED CUSTOMER RETURNS


53,984




57,433

ACCRUED CORE LIABILITY


26,045




31,263

OTHER CURRENT LIABILITIES


95,056




80,467








TOTAL CURRENT LIABILITIES


329,660




312,586








OTHER LONG-TERM DEBT


132




153

NONCURRENT OPERATING LEASE LIABILITIES


27,214




-

ACCRUED ASBESTOS LIABILITIES


49,894




45,117

OTHER LIABILITIES


19,731




18,075








 TOTAL LIABILITIES 


426,631




375,931








 TOTAL STOCKHOLDERS' EQUITY 


494,052




467,201








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$           920,683




$           843,132

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















NINE MONTHS ENDED



SEPTEMBER 30,



2019



2018



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS 

$        46,399



$        39,683


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






PROVIDED BY OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

19,261



17,745


OTHER

21,623



12,220


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(16,583)



(23,428)


INVENTORIES

11,824



2,761


ACCOUNTS PAYABLE

(24,107)



5,193


PREPAID EXPENSES AND OTHER CURRENT ASSETS

(6,502)



1,202


SUNDRY PAYABLES AND ACCRUED EXPENSES 

(2,551)



12,828


OTHER

(6,260)



(619)


NET CASH PROVIDED BY OPERATING ACTIVITIES

43,104



67,585














CASH FLOWS FROM INVESTING ACTIVITIES












ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(43,490)



(9,852)


NET PROCEEDS FROM SALE OF FACILITY

4,801



-


CAPITAL EXPENDITURES

(12,329)



(15,633)


OTHER INVESTING ACTIVITIES

47



37


NET CASH USED IN INVESTING ACTIVITIES 

(50,971)



(25,448)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

34,656



(10,537)


PURCHASE OF TREASURY STOCK

(10,738)



(9,271)


DIVIDENDS PAID

(15,429)



(14,144)


OTHER FINANCING ACTIVITIES

1,109



1,382


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

9,598



(32,570)














EFFECT OF EXCHANGE RATE CHANGES ON CASH

390



431


NET INCREASE IN CASH AND CASH EQUIVALENTS

2,121



9,998


CASH AND CASH EQUIVALENTS at beginning of Period

11,138



17,323


CASH AND CASH EQUIVALENTS at end of Period

$        13,259



$        27,321

 

 

Cision View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-third-quarter-2019-results-and-a-quarterly-dividend-300947715.html

SOURCE Standard Motor Products, Inc.