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Published: 2021-05-05 00:00:00 ET
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EX-99.1 2 brhc10024019_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1

 
 


For Immediate Release
  
 
For more information, contact:
 
Nathan R. Iles
 
Standard Motor Products, Inc.
 
(718) 392-0200

Standard Motor Products, Inc. Announces

First Quarter 2021 Results and a Quarterly Dividend

New York, NY, May 5, 2021......Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months ended March 31, 2021.

Consolidated net sales for the first quarter of 2021 were $276.6 million, compared to consolidated net sales of $254.3 million during the comparable quarter in 2020. Earnings from continuing operations for the first quarter of 2021 were $22.2 million or 97 cents per diluted share, compared to $9.6 million or 42 cents per diluted share in the first quarter of 2020. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the first quarter of 2021 were $22.2 million or 97 cents per diluted share, compared to $9.8 million or 43 cents per diluted share in the first quarter of 2020.

Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are very pleased with our first quarter results, as the momentum from the second half of 2020 carried over into 2021. Net sales were 8.7% above the first quarter of 2020, with both divisions showing gains. It is important to note that comparisons to last year will become less relevant due to COVID-19 impacts last year, though the first quarter of 2020 was only modestly affected.

“Engine Management net sales were up 5.4% as compared to 2020. Although we had a substantial reduction in sales in the quarter from the loss of a major account (previously announced), we were very pleased to see strong demand from our other customers offsetting the loss. Looking at our customer POS, their sell-through was even more encouraging, where many accounts enjoyed gains well into the double digit range. We believe that the actions we have taken to support our customers in the field are having success. Furthermore, we have secured new business wins, which will phase in over the course of the next several months.

“Temperature Control sales were ahead 21.4%. However, the first quarter essentially reflects pre-season orders, which, as previously discussed, were very light last year. Our pre-season orders continue to be strong in the second quarter as our customers replenish their shelves from a hot 2020 summer, though the full year results will be heavily dependent on how hot this summer will be.

“Gross margin was substantially above the first quarter of 2020, as factory production has remained at high levels throughout the company in our effort to rebuild our inventory. While we expect the ongoing benefit of robust production levels, we do see some offsetting headwinds as we face various inflationary costs in labor, certain raw materials, and transportation.

“Operating expenses were reduced slightly in the quarter. We continue to benefit from discretionary cost reductions instituted during the pandemic, though these were partially offset by increased distribution expense due to higher sales and elevated freight costs.

“The result was an all-time record in first quarter earnings, with non-GAAP diluted EPS from continuing operations more than doubling, from 43 cents in 2020 to 97 cents in 2021.

“We are also very pleased with our progress towards expanding our business in OE commercial vehicle / off-road markets.  We have been developing this business for several years, and have recently fortified it with two excellent acquisitions, both from Stoneridge, Inc. In 2019 we acquired their Pollak business, and in March of this year we acquired their particulate matter sensor business (more commonly known as soot sensors). We believe that this OE commercial vehicle focus will provide an excellent growth path for us, and the products we are developing for this segment will strengthen our offering in our core aftermarket business.

“Overall, we are pleased with our momentum as we exit the first quarter. We continue to see strong incoming orders from our customers, which reflect the healthy POS increases they are experiencing. The economy continues to improve, and more people are returning to work. This leads to more cars on the road and increased miles driven, one of the key determinants for our industry. We look forward to the balance of the year.

“Lastly, the Board of Directors has approved payment of a quarterly dividend of 25 cents per share on the common stock outstanding. The dividend will be paid on June 1, 2021 to stockholders of record on May 17, 2021.”

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 5, 2021.  The dial-in number is 800-896-8445 (domestic) or 785-830-1916 (international). The playback number is 800-839-5630 (domestic) or 402-220-2557 (international). The participant passcode is 62175.

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
MARCH 31,
  
   
2021
    
2020
  
   
(Unaudited)
  
NET SALES
  
$
276,553
    
$
254,302
  
                 
COST OF SALES
    
192,769
      
183,907
  
                 
GROSS PROFIT
    
83,784
      
70,395
  
                 
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
54,460
      
55,873
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
-
      
205
  
OTHER INCOME, NET
    
-
      
6
  
                 
OPERATING INCOME
    
29,324
      
14,323
  
                 
OTHER NON-OPERATING INCOME (EXPENSE), NET
    
635
      
(524
)
                 
INTEREST EXPENSE
    
209
      
873
  
                 
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
29,750
      
12,926
  
                 
PROVISION FOR INCOME TAXES
    
7,586
      
3,305
  
                 
EARNINGS FROM CONTINUING OPERATIONS
    
22,164
      
9,621
  
                 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(1,164
)
    
(994
)
                 
NET EARNINGS
  
$
21,000
    
$
8,627
  
                 
NET EARNINGS PER COMMON SHARE:
                
                 
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.99
    
$
0.43
  
DISCONTINUED OPERATION
    
(0.05
)
    
(0.05
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.94
    
$
0.38
  
 
                
 
                
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.97
    
$
0.42
  
DISCONTINUED OPERATION
    
(0.05
)
    
(0.04
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.92
    
$
0.38
  
                 
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,317,959
      
22,438,087
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
22,765,508
      
22,868,975
  

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income

(In thousands)
      
       
       
   
THREE MONTHS ENDED
MARCH 31,
      
   
2021
      
2020
      
   
(Unaudited)
      
Revenues
                  
Ignition, Emission Control, Fuel & Safety
                  
Related System Products
  
$
173,666
      
$
164,526
      
Wire and Cable
    
38,352
        
36,592
      
Engine Management
    
212,018
        
201,118
      
                       
Compressors
    
33,374
        
25,348
      
Other Climate Control Parts
    
29,099
        
26,094
      
Temperature Control
    
62,473
        
51,442
      
                       
All Other
    
2,062
        
1,742
      
Revenues
  
$
276,553
      
$
254,302
      
                       
Gross Margin
                      
Engine Management
  
$
65,070
  
30.7%
  
$
56,705
  
28.2%

Temperature Control
    
15,995
  
25.6%
    
12,096
  
23.5%

All Other
    
2,719
        
1,594
      
Gross Margin
  
$
83,784
  
30.3%
  
$
70,395
  
27.7%

                       
Selling, General & Administrative
                      
Engine Management
  
$
33,956
  
16.0%
  
$
35,073
  
17.4%

Temperature Control
    
12,403
  
19.9%
    
12,444
  
24.2%

All Other
    
8,101
        
8,356
      
Selling, General & Administrative
  
$
54,460
  
19.7%
  
$
55,873
  
22.0%

                       
Operating Income
                      
Engine Management
  
$
31,114
  
14.7%
  
$
21,632
  
10.8%

Temperature Control
    
3,592
  
5.7%
    
(348
)
-0.7%

All Other
    
(5,382
)
      
(6,762
)
    
Subtotal
    
29,324
  
10.6%
    
14,522
  
5.7%

Restructuring & Integration
    
-
  
0.0%
    
(205
)
-0.1%

Other Income, Net
    
-
  
0.0%
    
6
  
0.0%

Operating Income
  
$
29,324
  
10.6%
  
$
14,323
  
5.6%


STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)
      
   
THREE MONTHS ENDED
MARCH 31,
  
   
2021
    
2020
  
   
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
            
             
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
22,164
    
$
9,621
  
                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
-
      
205
  
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
-
      
(53
)
                 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
22,164
    
$
9,773
  
                 
                 
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                
                 
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.97
    
$
0.42
  
                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
-
      
0.01
  
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
-
      
-
  
                 
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.97
    
$
0.43
  
                 
                 
OPERATING INCOME
                
                 
GAAP OPERATING INCOME
  
$
29,324
    
$
14,323
  
                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
-
      
205
  
OTHER INCOME, NET
    
-
      
(6
)
                 
NON-GAAP OPERATING INCOME
  
$
29,324
    
$
14,522
  

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)
      
       
   
March 31,
2021
    
December 31,
2020
  
   
(Unaudited)
        
             
ASSETS
                
             
CASH
  
$
17,100
    
$
19,488
  
                 
ACCOUNTS RECEIVABLE, GROSS
    
179,848
      
203,861
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
5,744
      
5,822
  
ACCOUNTS RECEIVABLE, NET
    
174,104
      
198,039
  
                 
INVENTORIES
    
390,896
      
345,502
  
UNRETURNED CUSTOMER INVENTORY
    
21,088
      
19,632
  
OTHER CURRENT ASSETS
    
13,848
      
15,875
  
                 
TOTAL CURRENT ASSETS
    
617,036
      
598,536
  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    
88,563
      
89,105
  
OPERATING LEASE RIGHT-OF-USE ASSETS
    
31,453
      
29,958
  
GOODWILL
    
77,838
      
77,837
  
OTHER INTANGIBLES, NET
    
52,803
      
54,004
  
DEFERRED INCOME TAXES
    
43,692
      
44,770
  
INVESTMENT IN UNCONSOLIDATED AFFILIATES
    
40,684
      
40,507
  
OTHER ASSETS
    
24,413
      
21,823
  
                 
TOTAL ASSETS
  
$
976,482
    
$
956,540
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
NOTES PAYABLE
  
$
40,967
    
$
10,000
  
CURRENT PORTION OF OTHER DEBT
    
1,523
      
135
  
ACCOUNTS PAYABLE
    
108,536
      
100,018
  
ACCRUED CUSTOMER RETURNS
    
44,729
      
40,982
  
ACCRUED CORE LIABILITY
    
22,569
      
22,014
  
ACCRUED REBATES
    
39,294
      
46,437
  
PAYROLL AND COMMISSIONS
    
19,094
      
35,938
  
SUNDRY PAYABLES AND ACCRUED EXPENSES
    
36,712
      
47,078
  
                 
TOTAL CURRENT LIABILITIES
    
313,424
      
302,602
  
                 
OTHER LONG-TERM DEBT
    
84
      
97
  
NONCURRENT OPERATING LEASE LIABILITY
    
23,890
      
22,450
  
ACCRUED ASBESTOS LIABILITIES
    
54,630
      
55,226
  
OTHER LIABILITIES
    
27,514
      
25,929
  
                 
TOTAL LIABILITIES
    
419,542
      
406,304
  
                 
TOTAL STOCKHOLDERS' EQUITY
    
556,940
      
550,236
  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
976,482
    
$
956,540
  

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows

(In thousands)
      
       
   
THREE MONTHS ENDED
MARCH 31,
  
   
2021
    
2020
  
   
(Unaudited)
  
             
CASH FLOWS FROM OPERATING ACTIVITIES
            
             
NET EARNINGS
  
$
21,000
    
$
8,627
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
                
USED IN OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
6,514
      
6,539
  
OTHER
    
4,475
      
6,034
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
23,533
      
(28,114
)
INVENTORY
    
(46,255
)
    
(5,339
)
ACCOUNTS PAYABLE
    
8,419
      
(11,883
)
PREPAID EXPENSES AND OTHER CURRENT ASSETS
    
3,753
      
1,303
  
SUNDRY PAYABLES AND ACCRUED EXPENSES
    
(29,549
)
    
(7,251
)
OTHER
    
(3,288
)
    
(2,705
)
NET CASH USED IN OPERATING ACTIVITIES
    
(11,398
)
    
(32,789
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
                 
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(2,081
)
    
-
  
CAPITAL EXPENDITURES
    
(4,966
)
    
(4,422
)
OTHER INVESTING ACTIVITIES
    
2
      
6
  
NET CASH USED IN INVESTING ACTIVITIES
    
(7,045
)
    
(4,416
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
                 
NET CHANGE IN DEBT
    
32,408
      
53,068
  
PURCHASE OF TREASURY STOCK
    
(11,096
)
    
(8,726
)
DIVIDENDS PAID
    
(5,588
)
    
(5,615
)
OTHER FINANCING ACTIVITIES
    
373
      
1,248
  
NET CASH PROVIDED BY FINANCING ACTIVITIES
    
16,097
      
39,975
  
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
(42
)
    
126
  
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
(2,388
)
    
2,896
  
CASH AND CASH EQUIVALENTS at beginning of period
    
19,488
      
10,372
  
CASH AND CASH EQUIVALENTS at end of period
  
$
17,100
    
$
13,268