NEW YORK, Oct. 30 NY-Standard-Motor-Ern
NEW YORK, Oct. 30 /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
nine months ended September 30, 2008.
Consolidated net sales for the third quarter of 2008 were $202.9 million,
compared to consolidated net sales of $206.2 million during the comparable
quarter in 2007. Earnings from continuing operations for the third quarter of
2008 were $397 thousand or 2 cents per diluted share, compared to earnings of
$4.8 million or 26 cents per diluted share in the third quarter of 2007.
Excluding restructuring expenses for previously announced facility moves, a
deferred gain from the sale and leaseback of our corporate facilities in Long
Island City, New York and a gain from the repurchase of $20.6 million of
debentures, earnings from continuing operations for the third quarter of 2008
were $499 thousand or 3 cents per diluted share, compared to earnings in the
comparable quarter in 2007 of $5.6 million or 30 cents per diluted share.
The third quarter results were negatively impacted by a tax rate of almost
90%, for reasons which will be discussed below. However, using the statutory
rate of 40%, our third quarter earnings from continuing operations would have
been 13 cents per diluted share on the same basis.
Consolidated net sales for the nine month period ended September 30, 2008
were $626.4 million, compared to consolidated net sales of $622.9 million
during the comparable period in 2007. Earnings from continuing operations for
the nine month period ended September 30, 2008 were $13 million or 70 cents
per diluted share, compared to $13.4 million or 72 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 our
corporate facilities in Long Island City, New York, the associated defeasance
costs on the building mortgage, and a gain from the repurchase of $20.6
million of debentures, earnings from continuing operations for the nine month
period ended September 30, 2008 and 2007 were $3.5 million or 19 cents per
diluted share and $15 million or 80 cents per diluted share, respectively.
We are projecting a full year effective tax rate of 49.5%. This is higher
than the statutory federal and state rates due to 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, "Sales held up reasonably well,
considering the economic environment. Overall, we were down 1.6% for the
quarter and remain slightly ahead for the year. Engine Management has been
running consistently ahead, primarily because of new OES business, while
Temperature Control, a more discretionary purchase, remains behind 2007.
"Sales began to fall off in September, and this has continued into
October. We believe that the automotive aftermarket may hold up better in a
recessionary environment than many other industries -- there are more older
cars on the road as people keep their cars longer. However, we are not immune
from the current economic conditions, and we believe we will see a sales
decline, at least in the short term, as many of our customers are looking to
reduce their inventories. We are working aggressively to reduce costs during
this period -- looking at all discretionary spending, further headcount
reductions and further cash flow benefits from reducing our inventories.
"Our gross margin showed an improvement over the second quarter, as our
plants in Reynosa increased production. We anticipate additional improvement
in the months ahead as additional product is transferred to Mexico, though
this may be dampened in the short term if demand is reduced.
"One of our major goals in 2008 was improved cash flow and debt reduction.
Through the end of the third quarter of 2008, we repurchased $20.6 million of
debentures and in October repurchased an additional $8.5 million of
debentures. At the end of September, our total outstanding debt was $24.7
million below September 2007 and total debt has continued to decline in
October. This was accomplished by the sale of our Long Island City facility,
inventory reduction, and entering into accounts receivable factoring
agreements with some of our major accounts.
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 December 1, 2008 to stockholders of record on November 14, 2008.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM,
Eastern Time, on Thursday, October 30, 2008. The dial in number is
800-891-3173 (domestic) or 785-424-1111 (international). The playback number
is 800-753-4652 (domestic) or 402-220-4235 (international). The conference ID
# is STANDARD.
Selected Financial Terms
In addition to evaluating Standard Motor Products' results of operations
in accordance with generally accepted accounting principles ("GAAP"),
management routinely supplements this evaluation with an analysis of certain
non-GAAP financial measures. Management believes that the presentation of
non-GAAP financial measures, such as earnings from continuing operations and
diluted earnings per share before special items provides useful information to
investors regarding the Company's financial condition and results of
operations because these measures, when used in conjunction with the related
GAAP financial measures, (i) provide a more comprehensive view of the
Company's core operations and ability to generate cash flow, (ii) provide
investors with the financial analytical framework upon which management bases
financial, operational, compensation and planning decisions and (iii)
facilitates comparisons with the performance of competitors.
Safe Harbor Provisions
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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2008200720082007
NET SALES$202,938$206,169$626,365$622,934
COST OF SALES 154,166 151,527 477,740 459,728
GROSS PROFIT 48,772 54,642 148,625 163,206
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 41,294 42,861 128,080 128,916
RESTRUCTURING AND
INTEGRATION EXPENSES 1,905 2,630 6,117 3,867
OPERATING INCOME5,573 9,151 14,428 30,423
OTHER INCOME, NET 1,293 1,864 21,665 2,910
INTEREST EXPENSE3,109 4,605 10,428 13,941
EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES3,757 6,410 25,665 19,392
INCOME TAX EXPENSE 3,360 1,628 12,693 6,018
EARNINGS FROM CONTINUING
OPERATIONS 397 4,782 12,972 13,374
DISCONTINUED OPERATION,
NET OF TAX(1,579) (2,148) (2,228) (2,776)
NET EARNINGS $(1,182) $2,634 $10,744 $10,598
NET EARNINGS PER COMMON
SHARE:
BASIC EARNINGS FROM
CONTINUING OPERATIONS $0.02 $0.26 $0.70 $0.72
DISCONTINUED OPERATION (0.08) (0.12) (0.12) (0.15)
NET EARNINGS PER COMMON
SHARE - BASIC $(0.06) $0.14 $0.58 $0.57
DILUTED EARNINGS FROM
CONTINUING OPERATIONS $0.02 $0.26 $0.70 $0.72
DISCONTINUED OPERATION (0.08) (0.12) (0.12) (0.15)
NET EARNINGS PER COMMON
SHARE - DILUTED$(0.06) $0.14 $0.58 $0.57
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES 18,558,330 18,593,165 18,479,817 18,609,268
WEIGHTED AVERAGE NUMBER OF
COMMON AND DILUTIVE
SHARES18,617,724 18,623,138 18,512,475 18,692,217
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(Dollars in thousands)
THREE MONTHS ENDED
SEPTEMBER 30,
2008 2007
Revenues
Engine Management $135,502 $130,513
Temperature Control 53,697 60,124
Europe 11,536 11,161
All Other2,2034,371
$202,938 $206,169
Gross Margin
Engine Management $32,381 23.9% $35,116 26.9%
Temperature Control 10,602 19.7%12,779 21.3%
Europe 2,700 23.4% 2,940 26.3%
All Other3,0893,807
$48,772 24.0% $54,642 26.5%
Selling, General & Administrative
Engine Management $23,784 17.6% $24,932 19.1%
Temperature Control 9,472 17.6% 8,837 14.7%
Europe 2,658 23.0% 2,227 20.0%
All Other5,3806,865
41,294 20.3%42,861 20.8%
Restructuring & Integration 1,905 0.9% 2,630 1.3%
$43,199 21.3% $45,491 22.1%
Operating Profit
Engine Management $8,598 6.3% $10,185 7.8%
Temperature Control 1,130 2.1% 3,942 6.6%
Europe 42 0.4% 713 6.4%
All Other (2,292) (3,059)
7,478 3.7%11,781 5.7%
Restructuring & Integration 1,905 0.9% 2,630 1.3%
$5,573 2.7%$9,151 4.4%
NINE MONTHS ENDED
SEPTEMBER 30,
2008 2007
Revenues
Engine Management $417,346 $406,039
Temperature Control164,759 174,262
Europe 35,343 32,850
All Other8,9179,783
$626,365 $622,934
Gross Margin
Engine Management $98,771 23.7% $108,408 26.7%
Temperature Control 30,498 18.5%36,781 21.1%
Europe 8,943 25.3% 8,484 25.8%
All Other 10,4139,533
$148,625 23.7% $163,206 26.2%
Selling, General & Administrative
Engine Management $73,290 17.6% $73,056 18.0%
Temperature Control 26,465 16.1%27,303 15.7%
Europe 8,025 22.7% 6,302 19.2%
All Other 20,300 22,255
128,080 20.4% 128,916 20.7%
Restructuring & Integration 6,117 1.0% 3,867 0.6%
$134,197 21.4% $132,783 21.3%
Operating Profit
Engine Management $25,482 6.1% $35,352 8.7%
Temperature Control 4,033 2.4% 9,478 5.4%
Europe 918 2.6% 2,182 6.6%
All Other (9,888) (12,722)
20,545 3.3%34,290 5.5%
Restructuring & Integration 6,117 1.0% 3,867 0.6%
$14,428 2.3% $30,423 4.9%
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
SeptemberSeptember December
30, 30, 31,
2008 20072007
(Unaudited) (Unaudited)
ASSETS
CASH $11,023 $19,449 $13,261
ACCOUNTS RECEIVABLE, GROSS 250,084 244,803 213,409
ALLOWANCE FOR DOUBTFUL ACCOUNTS 10,088 10,017 8,964
ACCOUNTS RECEIVABLE, NET 239,996 234,786 204,445
INVENTORIES 239,262 239,063 252,277
ASSETS HELD FOR SALE 1,805 -- 5,373
OTHER CURRENT ASSETS 26,185 24,719 27,751
TOTAL CURRENT ASSETS 518,271 518,017 503,107
PROPERTY, PLANT AND EQUIPMENT, NET68,602 76,526 71,775
GOODWILL AND OTHER INTANGIBLES56,299 54,953 57,891
OTHER ASSETS 30,086 38,848 45,319
TOTAL ASSETS$673,258$688,344$678,092
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE $159,992$156,550$156,756
CURRENT PORTION OF LONG TERM DEBT 69,554 454 8,021
ACCOUNTS PAYABLE TRADE73,889 60,997 64,384
ACCRUED CUSTOMER RETURNS 30,374 29,904 23,149
OTHER CURRENT LIABILITIES 64,907 66,952 67,723
TOTAL CURRENT LIABILITIES398,716 314,857 320,033
LONG-TERM DEBT 370 97,572 90,534
ACCRUED ASBESTOS LIABILITY24,293 22,682 22,651
OTHER LIABILITIES 43,002 54,129 56,510
TOTAL LIABILITIES 466,381 489,240 489,728
TOTAL STOCKHOLDERS' EQUITY 206,877 199,104 188,364
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $673,258$688,344$678,092
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
EARNINGS FROM CONTINUING September 30,September 30,
OPERATIONS 2008 200820072008 2007
(Unaudited) (Unaudited)
GAAP EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES $3,757$3,757 $6,410 $25,665 $19,392
INCOME TAX EXPENSE 1,503*3,360 1,628 12,6936,018
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS 2,254 397 4,782 12,972 13,374
RESTRUCTURING EXPENSES (NET OF
TAX) 1,204 1,204 1,5783,7342,320
LOSS FROM EXTINGUISHMENT OF
MORTGAGE (NET OF TAX) ---- -- 882 --
GAIN FROM SALE OF BUILDING
(NET OF TAX)(160) (160) (740) (13,180)(740)
GAIN FROM DEBENTURE REPURCHASE
(NET OF TAX)(942) (942) -- (942) --
NON-GAAP EARNINGS (LOSS) FROM
CONTINUING OPERATIONS $2,356 $499 $5,620 $3,466 $14,954
DILUTED EARNINGS (LOSS) PER
SHARE FROM CONTINUING
OPERATIONS
EARNINGS (LOSS) PER SHARE FROM
CONTINUING OPERATIONS $0.13 $0.02 $0.26$0.70$0.72
RESTRUCTURING EXPENSES (NET OF
TAX)0.06 0.060.08 0.20 0.12
LOSS FROM EXTINGUISHMENT OF
MORTGAGE (NET OF TAX) ---- -- 0.05 --
GAIN FROM SALE OF BUILDING
(NET OF TAX) (0.01)(0.01) (0.04) (0.71) (0.04)
GAIN FROM DEBENTURE REPURCHASE
(NET OF TAX) (0.05)(0.05) --(0.05) --
NON-GAAP DILUTED EARNINGS
(LOSS) PER SHARE FROM
CONTINUING OPERATIONS $0.13 $0.03 $0.30$0.19$0.80
* - @ 40% Statutory tax rate
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.
SOURCE Standard Motor Products, Inc.
