Attached files
| file | filename |
|---|---|
| 8-K - STANDARD MOTOR PRODUCTS, INC. 8-K 10-30-2014 - STANDARD MOTOR PRODUCTS, INC. | form8k.htm |
Exhibit 99.1
|
For Immediate Release
|
|
|
For more information, contact:
|
|
|
James J. Burke
|
|
|
Standard Motor Products, Inc.
|
|
|
(718) 392-0200
|
Standard Motor Products, Inc. Announces
Third Quarter 2014 Results and a Quarterly Dividend
New York, NY, October 30, 2014......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 ended September 30, 2014.
Consolidated net sales for the third quarter of 2014 were $257 million, compared to consolidated net sales of $264.2 million during the comparable quarter in 2013. Earnings from continuing operations for the third quarter of 2014 were $17.8 million or 77 cents per diluted share, compared to $17.7 million or 76 cents per diluted share in the third quarter of 2013. 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 2014 were $17.1 million or 74 cents per diluted share, compared to $18.3 million or 79 cents per diluted share in the third quarter of 2013.
37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
Consolidated net sales for the nine month period ended September 30, 2014 were $762.3 million, compared to consolidated net sales of $765 million during the comparable period in 2013. Earnings from continuing operations for the nine month period ended September 30, 2014 were $41.4 million or $1.79 per diluted share, compared to $43.7 million or $1.88 per diluted share in the comparable period of 2013. 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, 2014 were $47.2 million or $2.04 per diluted share, compared to $44.3 million or $1.91 per diluted share for the nine months ended September 30, 2013.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “We are disappointed with our third quarter results, which essentially resulted from a decline in sales compared with the third quarter of 2013. However, our profits remain healthy, as our nine months earnings from continuing operations, as stated above, were 6.5% above the comparable period in 2013, and were an all time record for the Company.
“To better understand the sales picture, we need to break it down into our two primary divisions—Engine Management and Temperature Control. For Temperature Control, we experienced the second cool summer in a row, and sales in this division are quite sensitive to hot vs. cool summers.
“In Engine Management, our customers continue to report sales increases in our lines in the low to mid-single digits, as they did in 2013. However, in any given period, their purchases from us can vary due to a variety of one-time events—opening distribution centers, consolidating stores, increasing product coverage, integrating acquisitions, and so on.
“In 2013, our Engine Management division had a record year, with a sales increase of 7%. The fourth quarter alone had a 14% sales increase. This year, with challenging comparisons, we had essentially flat sales for nine months. In the long run, we believe these one-time events balance out, and we anticipate a return to low to mid-single digit increases in the future.
“Operationally, our people continue to perform extremely well—increasing our range of manufactured products, reducing purchase costs, streamlining SG&A—and this has led to improved profits despite flat sales.
“We made three acquisitions early this year—Pensacola Fuel Injectors, a rebuilder of diesel fuel injectors; Annex Manufacturing, an importer of Temperature Control products; and the creation of a joint venture with Gwo Yng, a leading Chinese manufacturer of Temperature Control products. All three are progressing nicely and will be fully integrated by year end. We anticipate additional benefits from these in 2015.
“To sum up, despite the disappointing sales, we believe industry demographics remain favorable and have a positive outlook for our future.”
Loss from discontinued operation, net of income taxes, in the third quarter of 2014 included a charge of $8.2 million compared to $389 thousand in the comparable period last year. The discontinued operation charge relates to asbestos-related indemnity claims and legal expenses from a brake business divested in 1998. Annually, in the third quarter, the Company engages an independent actuary to assess the Company’s asbestos-related liability exposure. The actuary has estimated that the Company’s gross undiscounted potential exposure for indemnity claims from September 2014 through 2058 will range from $36.1 million to $55.4 million and legal expenses will range from $43 million to $76.4 million. In the third quarter of 2014, the Company recorded a $12.8 million provision, $7.7 million net of taxes, to increase the asbestos-related indemnity liability to $36.1 million. Legal expenses are expensed as incurred.
The Board of Directors has approved payment of a quarterly dividend of thirteen cents per share on the common stock outstanding. The dividend will be paid on December 1, 2014 to stockholders of record on November 14, 2014.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, October 30, 2014. The dial in number is 866-952-7530 (domestic) or 785-424-1832 (international). The playback number is 800-839-3735 (domestic) or 402-220-2977 (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,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
NET SALES
|
$
|
257,046
|
$
|
264,162
|
$
|
762,338
|
$
|
764,996
|
||||||||
|
COST OF SALES
|
179,819
|
184,081
|
539,802
|
541,291
|
||||||||||||
|
GROSS PROFIT
|
77,227
|
80,081
|
222,536
|
223,705
|
||||||||||||
|
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
|
48,811
|
50,615
|
145,252
|
150,813
|
||||||||||||
|
LITIGATION CHARGE
|
-
|
-
|
10,650
|
-
|
||||||||||||
|
RESTRUCTURING AND INTEGRATION EXPENSES
|
343
|
1,913
|
1,069
|
2,531
|
||||||||||||
|
OTHER INCOME , NET
|
268
|
324
|
801
|
766
|
||||||||||||
|
OPERATING INCOME
|
28,341
|
27,877
|
66,366
|
71,127
|
||||||||||||
|
OTHER NON-OPERATING INCOME (EXPENSE), NET
|
(955
|
)
|
233
|
(1,061
|
)
|
(27
|
)
|
|||||||||
|
INTEREST EXPENSE
|
440
|
403
|
1,205
|
1,621
|
||||||||||||
|
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
|
26,946
|
27,707
|
64,100
|
69,479
|
||||||||||||
|
PROVISION FOR INCOME TAXES
|
9,140
|
10,021
|
22,718
|
25,827
|
||||||||||||
|
EARNINGS FROM CONTINUING OPERATIONS
|
17,806
|
17,686
|
41,382
|
43,652
|
||||||||||||
|
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
|
(8,240
|
)
|
(389
|
)
|
(9,451
|
)
|
(1,138
|
)
|
||||||||
|
NET EARNINGS
|
$
|
9,566
|
$
|
17,297
|
$
|
31,931
|
$
|
42,514
|
||||||||
|
NET EARNINGS PER COMMON SHARE:
|
||||||||||||||||
|
BASIC EARNINGS FROM CONTINUING OPERATIONS
|
$
|
0.78
|
$
|
0.77
|
$
|
1.81
|
$
|
1.90
|
||||||||
|
DISCONTINUED OPERATION
|
(0.36
|
)
|
(0.02
|
)
|
(0.42
|
)
|
(0.05
|
)
|
||||||||
|
NET EARNINGS PER COMMON SHARE - BASIC
|
$
|
0.42
|
$
|
0.75
|
$
|
1.39
|
$
|
1.85
|
||||||||
|
DILUTED EARNINGS FROM CONTINUING OPERATIONS
|
$
|
0.77
|
$
|
0.76
|
$
|
1.79
|
$
|
1.88
|
||||||||
|
DISCONTINUED OPERATION
|
(0.36
|
)
|
(0.02
|
)
|
(0.41
|
)
|
(0.05
|
)
|
||||||||
|
NET EARNINGS PER COMMON SHARE - DILUTED
|
$
|
0.41
|
$
|
0.74
|
$
|
1.38
|
$
|
1.83
|
||||||||
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
|
22,884,939
|
22,999,832
|
22,901,832
|
22,945,424
|
||||||||||||
|
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
|
23,169,173
|
23,239,009
|
23,180,842
|
23,179,187
|
||||||||||||
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
|
(In thousands)
|
|||||||||||||||||||||
|
THREE MONTHS ENDED
|
NINE MONTHS ENDED
|
||||||||||||||||||||
|
SEPTEMBER 30,
|
SEPTEMBER 30,
|
||||||||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||||
|
Revenues
|
|||||||||||||||||||||
|
Engine Management
|
$
|
169,913
|
$
|
177,939
|
$
|
533,388
|
$
|
535,498
|
|||||||||||||
|
Temperature Control
|
82,178
|
84,840
|
219,323
|
224,228
|
|||||||||||||||||
|
All Other
|
4,955
|
1,383
|
9,627
|
5,270
|
|||||||||||||||||
|
$
|
257,046
|
$
|
264,162
|
$
|
762,338
|
$
|
764,996
|
||||||||||||||
|
Gross Margin
|
|||||||||||||||||||||
|
Engine Management
|
$
|
54,890
|
32.3%
|
$
|
56,654
|
31.8%
|
$
|
164,144
|
30.8%
|
$
|
162,748
|
30.4%
|
|
||||||||
|
Temperature Control
|
18,251
|
22.2%
|
20,496
|
24.2%
|
48,435
|
22.1%
|
51,824
|
23.1%
|
|
||||||||||||
|
All Other
|
4,086
|
2,931
|
9,957
|
9,133
|
|||||||||||||||||
|
$
|
77,227
|
30.0%
|
$
|
80,081
|
30.3%
|
$
|
222,536
|
29.2%
|
$
|
223,705
|
29.2%
|
|
|||||||||
|
Selling, General & Administrative
|
|||||||||||||||||||||
|
Engine Management
|
$
|
28,758
|
16.9%
|
$
|
30,130
|
16.9%
|
$
|
85,856
|
16.1%
|
$
|
90,305
|
16.9%
|
|
||||||||
|
Temperature Control
|
13,825
|
16.8%
|
12,994
|
15.3%
|
38,357
|
17.5%
|
37,767
|
16.8%
|
|
||||||||||||
|
All Other
|
6,228
|
7,491
|
21,039
|
22,741
|
|||||||||||||||||
|
$
|
48,811
|
19.0%
|
$
|
50,615
|
19.2%
|
$
|
145,252
|
19.1%
|
$
|
150,813
|
19.7%
|
|
|||||||||
|
Operating Income
|
|||||||||||||||||||||
|
Engine Management
|
$
|
26,132
|
15.4%
|
$
|
26,524
|
14.9%
|
$
|
78,288
|
14.7%
|
$
|
72,443
|
13.5%
|
|
||||||||
|
Temperature Control
|
4,426
|
5.4%
|
7,502
|
8.8%
|
10,078
|
4.6%
|
14,057
|
6.3%
|
|
||||||||||||
|
All Other
|
(2,142
|
)
|
(4,560
|
)
|
(11,082
|
)
|
(13,608
|
)
|
|||||||||||||
|
28,416
|
11.1%
|
29,466
|
11.2%
|
77,284
|
10.1%
|
72,892
|
9.5%
|
|
|||||||||||||
|
Litigation Charge
|
-
|
0.0%
|
-
|
0.0%
|
(10,650
|
)
|
-1.4%
|
-
|
0.0%
|
|
|||||||||||
|
Restructuring & Integration
|
(343
|
)
|
-0.1%
|
(1,913
|
)
|
-0.7%
|
(1,069
|
)
|
-0.1%
|
(2,531
|
)
|
-0.3%
|
|
||||||||
|
Other Income, Net
|
268
|
0.1%
|
324
|
0.1%
|
801
|
0.1%
|
766
|
0.1%
|
|
||||||||||||
|
$
|
28,341
|
11.0%
|
$
|
27,877
|
10.6%
|
$
|
66,366
|
8.7%
|
$
|
71,127
|
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,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
EARNINGS FROM CONTINUING OPERATIONS
|
||||||||||||||||
|
GAAP EARNINGS FROM CONTINUING OPERATIONS
|
$
|
17,806
|
$
|
17,686
|
$
|
41,382
|
$
|
43,652
|
||||||||
|
LITIGATION CHARGE (NET OF TAX)
|
-
|
-
|
6,390
|
-
|
||||||||||||
|
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
|
206
|
1,148
|
642
|
1,519
|
||||||||||||
|
REVERSAL OF LT TAX LIABILITY
|
(350
|
)
|
-
|
(350
|
)
|
-
|
||||||||||
|
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
|
(361
|
)
|
(374
|
)
|
(361
|
)
|
(374
|
)
|
||||||||
|
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
|
(157
|
)
|
(157
|
)
|
(472
|
)
|
(472
|
)
|
||||||||
|
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
|
$
|
17,144
|
$
|
18,303
|
$
|
47,231
|
$
|
44,325
|
||||||||
|
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
|
||||||||||||||||
|
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
|
$
|
0.77
|
$
|
0.76
|
$
|
1.79
|
$
|
1.88
|
||||||||
|
LITIGATION CHARGE (NET OF TAX)
|
-
|
-
|
0.28
|
-
|
||||||||||||
|
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
|
0.01
|
0.05
|
0.03
|
0.07
|
||||||||||||
|
REVERSAL OF LT TAX LIABILITY
|
(0.01
|
)
|
-
|
(0.02
|
)
|
-
|
||||||||||
|
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
|
(0.02
|
)
|
(0.01
|
)
|
(0.02
|
)
|
(0.02
|
)
|
||||||||
|
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
|
(0.01
|
)
|
(0.01
|
)
|
(0.02
|
)
|
(0.02
|
)
|
||||||||
|
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
|
$
|
0.74
|
$
|
0.79
|
$
|
2.04
|
$
|
1.91
|
||||||||
|
OPERATING INCOME
|
||||||||||||||||
|
GAAP OPERATING INCOME
|
$
|
28,341
|
$
|
27,877
|
$
|
66,366
|
$
|
71,127
|
||||||||
|
LITIGATION CHARGE
|
-
|
-
|
10,650
|
-
|
||||||||||||
|
RESTRUCTURING AND INTEGRATION EXPENSES
|
343
|
1,913
|
1,069
|
2,531
|
||||||||||||
|
OTHER INCOME, NET
|
(268
|
)
|
(324
|
)
|
(801
|
)
|
(766
|
)
|
||||||||
|
NON-GAAP OPERATING INCOME
|
$
|
28,416
|
$
|
29,466
|
$
|
77,284
|
$
|
72,892
|
||||||||
MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS AND OPERATING INCOME BEFORE SPECIAL ITEMS, WHICH ARE NON-GAAP MEASUREMENTS, 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,
|
|||||||
|
2014
|
2013
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
CASH
|
$
|
10,585
|
$
|
5,559
|
||||
|
ACCOUNTS RECEIVABLE, GROSS
|
152,322
|
132,170
|
||||||
|
ALLOWANCE FOR DOUBTFUL ACCOUNTS
|
6,691
|
6,969
|
||||||
|
ACCOUNTS RECEIVABLE, NET
|
145,631
|
125,201
|
||||||
|
INVENTORIES
|
276,331
|
269,447
|
||||||
|
OTHER CURRENT ASSETS
|
50,770
|
45,870
|
||||||
|
TOTAL CURRENT ASSETS
|
483,317
|
446,077
|
||||||
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
64,131
|
63,646
|
||||||
|
GOODWILL AND OTHER INTANGIBLES, NET
|
90,670
|
72,866
|
||||||
|
OTHER ASSETS
|
53,688
|
32,934
|
||||||
|
TOTAL ASSETS
|
$
|
691,806
|
$
|
615,523
|
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
NOTES PAYABLE
|
$
|
59,249
|
$
|
21,406
|
||||
|
CURRENT PORTION OF LONG TERM DEBT
|
19
|
59
|
||||||
|
ACCOUNTS PAYABLE
|
71,648
|
71,469
|
||||||
|
ACCRUED CUSTOMER RETURNS
|
40,062
|
31,464
|
||||||
|
OTHER CURRENT LIABILITIES
|
98,971
|
95,918
|
||||||
|
TOTAL CURRENT LIABILITIES
|
269,949
|
220,316
|
||||||
|
LONG-TERM DEBT
|
3
|
16
|
||||||
|
ACCRUED ASBESTOS LIABILITIES
|
34,225
|
23,919
|
||||||
|
OTHER LIABILITIES
|
21,295
|
21,840
|
||||||
|
TOTAL LIABILITIES
|
325,472
|
266,091
|
||||||
|
TOTAL STOCKHOLDERS' EQUITY
|
366,334
|
349,432
|
||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
691,806
|
$
|
615,523
|
||||
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
|
(In thousands)
|
||||||||
|
NINE MONTHS ENDED
|
||||||||
|
SEPTEMBER 30,
|
||||||||
|
2014
|
2013
|
|||||||
|
(Unaudited)
|
||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
NET EARNINGS
|
$
|
31,931
|
$
|
42,514
|
||||
|
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
|
||||||||
|
PROVIDED BY OPERATING ACTIVITIES:
|
||||||||
|
DEPRECIATION AND AMORTIZATION
|
12,889
|
13,203
|
||||||
|
OTHER
|
9,188
|
9,843
|
||||||
|
CHANGE IN ASSETS AND LIABILITIES:
|
||||||||
|
ACCOUNTS RECEIVABLE
|
(17,467
|
)
|
(43,990
|
)
|
||||
|
INVENTORY
|
(3,511
|
)
|
(5,345
|
)
|
||||
|
ACCOUNTS PAYABLE
|
(3,425
|
)
|
(450
|
)
|
||||
|
OTHER
|
3,078
|
17,876
|
||||||
|
NET CASH PROVIDED BY OPERATING ACTIVTIES
|
32,683
|
33,651
|
||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
CAPITAL EXPENDITURES
|
(9,340
|
)
|
(8,467
|
)
|
||||
|
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
|
(37,726
|
)
|
(12,760
|
)
|
||||
|
OTHER INVESTING ACTIVITIES
|
21
|
(596
|
)
|
|||||
|
NET CASH USED IN INVESTING ACTIVITIES
|
(47,045
|
)
|
(21,823
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
NET CHANGE IN DEBT
|
37,790
|
(8,356
|
)
|
|||||
|
PURCHASE OF TREASURY STOCK
|
(9,487
|
)
|
(1,672
|
)
|
||||
|
DIVIDENDS PAID
|
(8,929
|
)
|
(7,566
|
)
|
||||
|
OTHER FINANCING ACTIVITIES
|
1,947
|
3,350
|
||||||
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
21,321
|
(14,244
|
)
|
|||||
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(1,933
|
)
|
(561
|
)
|
||||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
5,026
|
(2,977
|
)
|
|||||
|
CASH AND CASH EQUIVALENTS at beginning of Period
|
5,559
|
13,074
|
||||||
|
CASH AND CASH EQUIVALENTS at end of Period
|
$
|
10,585
|
$
|
10,097
|
||||