NEW YORK, Aug. 4 NY-Standard-Motor-er
NEW YORK, Aug. 4 /PRNewswire-FirstCall/ -- 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 ended June 30, 2008.
Consolidated net sales for the second quarter of 2008 were $215.3 million,
compared to consolidated net sales of $217 million during the comparable
quarter in 2007. Losses from continuing operations for the second quarter of
2008 were $772 thousand or 4 cents per diluted share, compared to $5.7 million
or 30 cents per diluted share in the second quarter of 2007. Excluding
restructuring expenses for previously announced facility moves, a deferred
gain from the sale and leaseback of its corporate facilities in Long Island
City, New York, results from continuing operations for the second quarter 2008
were essentially breakeven compared to earnings in the second quarter 2007 of
$6 million or 32 cents per diluted share.
Consolidated net sales for the six month period ended June 30, 2008 were
$423.4 million, compared to consolidated net sales of $416.8 million during
the comparable period in 2007. Earnings from continuing operations for the
six month period ended June 30, 2008 were $12.6 million or 68 cents per
diluted share, compared to $8.6 million or 46 cents per diluted share in the
comparable period of 2007. Excluding restructuring expenses for previously
announced facility moves, a gain from the sale and leaseback of its corporate
facilities in Long Island City, New York, and the associated defeasance costs
on the building mortgage, earnings from continuing operations for the six
months ended 2008 and 2007 were $3 million or 16 cents per diluted share and
$9.4 million or 50 cents per diluted share, respectively.
The second quarter 2008 provision for taxes was negatively impacted with
the increase in the full year effective tax rate to 42.6%. The 2008 tax rate
is higher due to the tax impact from the gain on the sale of the Long Island
City, New York property, the tax impact of the non-deductible portion of a
retirement plan distribution and tollgate taxes on undistributed earnings
related to the closure of our Puerto Rico operations.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products'
Chairman and Chief Executive Officer, stated, "The primary negative factor in
the second quarter was the drop in Engine Management gross margin, which fell
from $37.1 million or 26.9% in 2007 to $30 million or 21.7% in 2008. This was
almost entirely attributable to the closing of Long Island City and Puerto
Rico operations and the move to Reynosa, Mexico. During the quarter we
continued to incur costs in Long Island City and Puerto Rico, with minimal
productive hours, while Reynosa was just beginning to ramp up.
"Long Island City and Puerto Rico are now completely closed, while Reynosa
continues to increase production. As a result, we anticipate a gradual
improvement in gross margin in the third quarter, further improvement in the
fourth quarter, with the full benefits of the moves hitting in 2009. This is
in line with our original forecast.
"As a side benefit we continue to reduce the bridge inventory we built
during 2007. Engine Management inventory was down approximately $8 million for
the six months, with an additional $3 million drop in July.
"Sales held up reasonably well in a weak market. Engine Management net
sales are about 2% ahead for the year, with most of the growth coming from new
OES business. Temperature Control sales started slowly, but began to pick up
in June with the hot weather, and July sales are ahead of the prior year.
"We continue to make progress in OES. We previously announced that we had
agreed to acquire various sensor lines from Continental. The first production
line from Continental's plant in upstate New York has now been moved to
Independence, KS facility, and the balance of the lines will be moved by year
end. Sales, which are estimated at $10 - 12 million annually, will begin
towards the end of 2008.
"Further, we recently concluded an agreement with Lear to acquire a
portion of their OE/OES business, which we estimate at approximately $3
million annually. This equipment will also be relocated to Independence. As a
result of both of these transactions we are gaining access to a host of OE and
OES accounts, both domestic and import.
"We have also undertaken significant cost reduction initiatives. In the
last several months we have eliminated approximately 60 salaried positions, or
5% of our salaried workforce. Further, on May 30 we made a change to our
postretirement medical plan. Our exposure is now capped and this action
resulted in a $24.5 million reduction in our liability to be recognized over
3.8 years effective June 1, 2008."
The Board of Directors has approved payment of a quarterly dividend of
nine cents per share on the common stock outstanding. The dividend will be
paid on September 2, 2008 to stockholders of record on August 15, 2008.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM,
Eastern Time, on Monday, August 4, 2008. The dial in number is 800-862-9098
(domestic) or 785-424-1051 (international). The playback number is
800-283-8217 (domestic) or 402-220-0868 (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
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30,JUNE 30,
2008200720082007
NET SALES$215,343$216,950$423,427$416,765
COST OF SALES 166,714 160,261 323,574 308,201
GROSS PROFIT 48,629 56,689 99,853 108,564
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 42,724 43,324 86,786 86,055
RESTRUCTURING EXPENSES 1,376 559 4,212 1,237
OPERATING INCOME4,529 12,806 8,855 21,272
OTHER INCOME, NET 10 779 20,372 1,046
INTEREST EXPENSE3,388 4,795 7,319 9,336
EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES1,151 8,790 21,908 12,982
INCOME TAX EXPENSE 1,923 3,134 9,333 4,390
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS (772) 5,656 12,575 8,592
DISCONTINUED OPERATION,
NET OF TAX (323) (279) (649) (628)
NET EARNINGS (LOSS) $(1,095) $5,377 $11,926 $7,964
NET EARNINGS (LOSS) PER
COMMON SHARE:
BASIC EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS $(0.04) $0.30 $0.69 $0.46
DISCONTINUED OPERATION (0.02) (0.01) (0.04) (0.03)
NET EARNINGS (LOSS) PER
COMMON SHARE - BASIC $(0.06) $0.29 $0.65 $0.43
DILUTED EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS $(0.04) $0.30 $0.68 $0.46
DISCONTINUED OPERATION (0.02) (0.02) (0.03) (0.04)
NET EARNINGS (LOSS) PER
COMMON SHARE - DILUTED $(0.06) $0.28 $0.65 $0.42
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES 18,332,273 18,781,388 18,319,979 18,617,453
WEIGHTED AVERAGE NUMBER OF
COMMON AND DILUTIVE
SHARES18,384,840 18,940,962 21,157,672 18,774,430
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
EARNINGS FROM CONTINUING OPERATIONS 2008 20072008 2007
(Unaudited) (Unaudited)
GAAP EARNINGS (LOSS) FROM CONTINUING
OPERATIONS $(772) $5,656 $12,575 $8,592
RESTRUCTURING EXPENSES (NET OF TAX) 829 364 2,530 778
LOSS FROM EXTINGUISHMENT OF DEBT (NET
OF TAX) -- 882 -
GAIN FROM SALE OF BUILDING (NET OF
TAX)(145) - (13,020) -
NON-GAAP EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $(88) $6,020$2,967 $9,370
DILUTED EARNINGS (LOSS) PER SHARE
FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS (LOSS) PER
SHARE FROM CONTINUING OPERATIONS $(0.04) $0.30 $0.68$0.46
RESTRUCTURING EXPENSES (NET OF TAX) 0.05 0.02 0.14 0.04
LOSS FROM EXTINGUISHMENT OF DEBT (NET
OF TAX) --0.05 -
GAIN FROM SALE OF BUILDING (NET OF
TAX) (0.01) - (0.71) -
NON-GAAP DILUTED EARNINGS PER SHARE
FROM CONTINUING OPERATIONS $0.00$0.32 $0.16$0.50
MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
June 30, December 31,
2008 2007
(Unaudited)
Cash $12,318$13,261
Accounts receivable, gross290,424213,409
Allowance for doubtful accounts10,555 8,964
Accounts receivable, net 279,869204,445
Inventories 244,252252,277
Assets held for sale1,930 5,373
Other current assets 23,488 27,751
Total current assets 561,857503,107
Property, plant and equipment, net 68,766 71,775
Goodwill and other intangibles 56,571 57,891
Other assets 30,650 45,319
Total assets $717,844 $678,092
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable$183,330 $156,756
Current portion of long term debt 119 8,021
Accounts payable trade 71,604 64,384
Accrued customer returns 27,396 23,149
Other current liabilities 67,897 67,723
Total current liabilities 350,346320,033
Long-term debt 90,425 90,534
Accrued asbestos liability 22,434 22,651
Other Liabilities 42,346 56,510
Total liabilities 505,551489,728
Total stockholders' equity212,293188,364
Total liabilities and stockholders'
equity $717,844 $678,092
SOURCE Standard Motor Products, Inc.
