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Published: 2021-08-04 10:07:58 ET

EX-99.1 2 brhc10027542_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

Second Quarter 2021 Results and a Quarterly Dividend

New York, NY, August 4, 2021......Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months and six months ended June 30, 2021.

Consolidated net sales for the second quarter of 2021 were $342.1 million, compared to consolidated net sales of $247.9 million during the comparable quarter in 2020. Earnings from continuing operations for the second quarter of 2021 were $28.0 million or $1.23 per diluted share, compared to $11.8 million or 52 cents per diluted share in the second 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 second quarter of 2021 were $28.6 million or $1.26 per diluted share, compared to $11.8 million or 52 cents per diluted share in the second quarter of 2020.

Consolidated net sales for the six months ended June 30, 2021, were $618.6 million, compared to consolidated net sales of $502.2 million during the comparable period in 2020. Earnings from continuing operations for the six months ended June 30, 2021, were $50.2 million or $2.21 per diluted share, compared to $21.5 million or 94 cents per diluted share in the comparable period 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 six months ended June 30, 2021 and 2020 were $50.7 million or $2.23 per diluted share and $21.6 million or 95 cents per diluted share, respectively.

Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are very pleased with our second quarter results as the strong sales trends we have been experiencing for the last three quarters continued unabated. While our sales finished the quarter 38% ahead of 2020, last year’s second quarter was dramatically affected by the pandemic. Yet we were also 12% favorable to the comparable quarter in 2019.

“We set records in earnings, with non-GAAP diluted earnings per share from continuing operations up 142% in the quarter, and up 37% vs. the second quarter of 2019.

“Our overall year-to-date performance was very strong, with sales and earnings up 23% and 135% respectively vs. last year. However, although market conditions remain robust, comparisons to 2020 will become more challenging. 2020 was a year of two halves – the first half was severely impacted by pandemic-related lockdowns, while the second half set records as the market surged. We believe that going forward a comparison to a more normalized 2019 is more appropriate.

“By division, Engine Management sales for the quarter were up 35% vs. last year despite the previously disclosed loss of a large account, and were up 7% vs. 2019. This strong performance reflects a combination of factors – successful customer initiatives, new business wins, contributions from acquisitions (discussed below), and generally robust demand.

“Temperature Control sales for the quarter were extremely strong, up 47% vs. last year and 26% vs. 2019. The first two months of any second quarter tend to be preseason orders, at which point the summer selling season begins. This year, it appears that customer sell-through began early, and replenishment demand remained high. Ongoing favorable weather trends bode well for a strong third quarter.

“Our gross margins held up nicely in the quarter, aided by favorable absorption in our plants from elevated production levels as we rebuilt our inventory. However, offsetting these benefits were rising costs across the board, including certain raw materials, labor, and transportation. Going forward, we anticipate margin pressures from more normalized production levels and inflationary headwinds, though we believe that the current environment permits a pass-through of these costs.

“Additionally, as we expand our sales to original equipment customers, this business tends to have lower gross margins. However, it also has lower SG&A expenses and thus generates comparable operating profit margins.

“We are excited with the progress that we have made expanding our presence in the original equipment market, with a focus on heavy duty and commercial vehicles. We announced two acquisitions in 2021, both geared towards pursuing this complementary channel.

“In March we acquired the soot sensor business from Stoneridge, Inc., a high-tech emissions control program for heavy duty vehicles that will be relocated to existing SMP facilities in the coming months. On May 31^st we consummated the acquisition of Trombetta, a Wisconsin-based company selling various power management devices to a broad array of customers across multiple channels including construction, agricultural, heavy truck, lawn and garden, and power sports segments. Please see our Trombetta press release dated June 1^st for more details.

“Combined, these acquisitions generate approximately $75 million in annualized revenue. But more importantly, when combined with our legacy business, this channel now represents approximately $250 million in sales on an annualized basis, which gives us the critical mass to be a significant supplier in this space. We are also pleased that many of the products we are pursuing in this adjacent channel are not powertrain dependent, and thus are well-positioned for the eventual shift to electric vehicles.

“We also strongly believe that while expansion into this market provides some important diversification from our core aftermarket business, it by no means dilutes our focus on it. We feel that it is highly complementary, as it grants access to product technologies suitable to the aftermarket, and provides more manufacturing and engineering capabilities to support our operating strategy of being a basic manufacturer.

“In closing, we are very pleased with our year thus far, posting record financial results and consummating two strategic acquisitions. The overall industry continues to perform well, our customers are enjoying very strong sell-through of our products, and we are working closely with them to ensure our mutual success. While the substantial volume swings we have been witnessing over the last 18 months make forecasting difficult, compounded by uncertainty from the ongoing pandemic, and though the balance of the year faces challenging 2020 comparisons, we believe we are well positioned for the future.

“Finally, 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 September 1, 2021 to stockholders of record on August 16, 2021.”

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, August 4, 2021. The dial-in number is 866-342-8588 (domestic) or 203-518-9865 (interna tional). The playback number is 800-839-5128 (domestic) or 402-220-1504 (international). The participant passcode is 85201.

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 JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
NET SALES	$	342,076		$	247,939		$	618,629		$	502,241

COST OF SALES		242,804			183,581			435,573			367,488

GROSS PROFIT		99,272			64,358			183,056			134,753

SELLING, GENERAL & ADMINISTRATIVE EXPENSES		62,347			48,328			116,807			104,201
RESTRUCTURING AND INTEGRATION EXPENSES		-			9			-			214
OTHER INCOME, NET		-			-			-			6

OPERATING INCOME		36,925			16,021			66,249			30,344

OTHER NON-OPERATING INCOME, NET		832			602			1,467			78

INTEREST EXPENSE		495			772			704			1,645

EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		37,262			15,851			67,012			28,777

PROVISION FOR INCOME TAXES		9,248			4,009			16,834			7,314

EARNINGS FROM CONTINUING OPERATIONS		28,014			11,842			50,178			21,463

LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(853	)		(875	)		(2,017	)		(1,869	)

NET EARNINGS		27,161			10,967			48,161			19,594

NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		19			-			19			-

NET EARNINGS ATTRIBUTABLE TO SMP (a)	$	27,142		$	10,967		$	48,142		$	19,594


NET EARNINGS ATTRIBUTABLE TO SMP
EARNINGS FROM CONTINUING OPERATIONS	$	27,995		$	11,842		$	50,159		$	21,463
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(853	)		(875	)		(2,017	)		(1,869	)
TOTAL	$	27,142		$	10,967		$	48,142		$	19,594



NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP

BASIC EARNINGS FROM CONTINUING OPERATIONS	$	1.26		$	0.53		$	2.25		$	0.96
DISCONTINUED OPERATION		(0.04	)		(0.04	)		(0.09	)		(0.08	)
NET EARNINGS PER COMMON SHARE - BASIC	$	1.22		$	0.49		$	2.16		$	0.88


DILUTED EARNINGS FROM CONTINUING OPERATIONS	$	1.23		$	0.52		$	2.21		$	0.94
DISCONTINUED OPERATION		(0.03	)		(0.04	)		(0.09	)		(0.08	)
NET EARNINGS PER COMMON SHARE - DILUTED	$	1.20		$	0.48		$	2.12		$	0.86


WEIGHTED AVERAGE NUMBER OF COMMON SHARES		22,198,545			22,330,476			22,257,922			22,384,281
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		22,686,384			22,718,680			22,741,171			22,793,606

(a) "SMP" refers to Standard Motor Products, Inc. and subsidiaries.

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income

(In thousands)

	THREE MONTHS ENDED JUNE 30,										SIX MONTHS ENDED JUNE 30,
	2021					2020					2021					2020
	(Unaudited)										(Unaudited)
Revenues
Ignition, Emission Control, Fuel & Safety
Related System Products	$	192,486				$	142,787				$	366,152				$	307,313
Wire and Cable		40,730					30,366					79,082					66,958
Engine Management		233,216					173,153					445,234					374,271

Compressors		69,577					44,878					102,951					70,226
Other Climate Control Parts		36,894					27,514					65,993					53,608
Temperature Control		106,471					72,392					168,944					123,834

All Other		2,389					2,394					4,451					4,136
Revenues	$	342,076				$	247,939				$	618,629				$	502,241

Gross Margin
Engine Management	$	67,447		28.9	%	$	46,230		26.7	%	$	132,517		29.8	%	$	102,935		27.5	%
Temperature Control		28,658		26.9	%		16,520		22.8	%		44,653		26.4	%		28,616		23.1	%
All Other		3,167					1,608					5,886					3,202
Gross Margin	$	99,272		29.0	%	$	64,358		26.0	%	$	183,056		29.6	%	$	134,753		26.8	%

Selling, General & Administrative
Engine Management	$	37,063		15.9	%	$	29,499		17.0	%	$	71,019		16.0	%	$	64,572		17.3	%
Temperature Control		15,429		14.5	%		12,553		17.3	%		27,832		16.5	%		24,997		20.2	%
All Other		9,100					6,276					17,201					14,632
Subtotal	$	61,592		18.0	%	$	48,328		19.5	%	$	116,052		18.8	%	$	104,201		20.7	%
One-Time Acquisition Costs		755		0.2	%		-		0.0	%		755		0.1	%		-		0.0	%
Selling, General & Administrative	$	62,347		18.2	%	$	48,328		19.5	%	$	116,807		18.9	%	$	104,201		20.7	%


Operating Income
Engine Management	$	30,384		13.0	%	$	16,731		9.7	%	$	61,498		13.8	%	$	38,363		10.3	%
Temperature Control		13,229		12.4	%		3,967		5.5	%		16,821		10.0	%		3,619		2.9	%
All Other		(5,933	)				(4,668	)				(11,315	)				(11,430	)
Subtotal		37,680		11.0	%		16,030		6.5	%		67,004		10.8	%		30,552		6.1	%
One-time Acquisition Costs		(755	)	-0.2	%		-		0.0	%		(755	)	-0.1	%		-		0.0	%
Restructuring & Integration		-		0.0	%		(9	)	0.0	%		-		0.0	%		(214	)	0.0	%
Other Income (Expense), Net		-		0.0	%		-		0.0	%		-		0.0	%		6		0.0	%
Operating Income	$	36,925		10.8	%	$	16,021		6.5	%	$	66,249		10.7	%	$	30,344		6.0	%

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

	THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP

GAAP EARNINGS FROM CONTINUING OPERATIONS	$	27,995		$	11,842		$	50,159		$	21,463

RESTRUCTURING AND INTEGRATION EXPENSES		-			9			-			214
ONE-TIME ACQUISITION COSTS		755			-			755			-
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		(196	)		(2	)		(196	)		(56	)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS	$	28,554		$	11,849		$	50,718		$	21,621


DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP

GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	1.23		$	0.52		$	2.21		$	0.94

RESTRUCTURING AND INTEGRATION EXPENSES		-			-			-			0.01
ONE-TIME ACQUISITION COSTS		0.03			-			0.03			-
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		-			-			(0.01	)		-

NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	1.26		$	0.52		$	2.23		$	0.95


OPERATING INCOME

GAAP OPERATING INCOME	$	36,925		$	16,021		$	66,249		$	30,344

ONE-TIME ACQUISITION COSTS		755			-			755			-
RESTRUCTURING AND INTEGRATION EXPENSES		-			9			-			214
OTHER (INCOME) EXPENSE, NET		-			-			-			(6	)

NON-GAAP OPERATING INCOME	$	37,680		$	16,030		$	67,004		$	30,552

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS WHICH ARE ATTRIBUTABLE TO SMP, AND OPERATING INCOME, AS ADJUSTED FOR SPECIAL ITEMS, ARE NON-GAAP MEASUREMENTS AND 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)

	June 30, 2021		DECEMBER 31, 2020
	(Unaudited)

ASSETS

CASH	$	27,453	$	19,488

ACCOUNTS RECEIVABLE, GROSS		217,996		203,861
ALLOWANCE FOR DOUBTFUL ACCOUNTS		6,218		5,822
ACCOUNTS RECEIVABLE, NET		211,778		198,039

INVENTORIES		404,876		345,502
UNRETURNED CUSTOMER INVENTORY		22,070		19,632
OTHER CURRENT ASSETS		14,492		15,875

TOTAL CURRENT ASSETS		680,669		598,536

PROPERTY, PLANT AND EQUIPMENT, NET		96,762		89,105
OPERATING LEASE RIGHT-OF-USE ASSETS		39,095		29,958
GOODWILL		126,893		77,837
OTHER INTANGIBLES, NET		105,462		54,004
DEFERRED INCOME TAXES		38,915		44,770
INVESTMENT IN UNCONSOLIDATED AFFILIATES		42,070		40,507
OTHER ASSETS		25,409		21,823

TOTAL ASSETS	$	1,155,275	$	956,540

LIABILITIES AND STOCKHOLDERS' EQUITY

NOTES PAYABLE	$	135,000	$	10,000
CURRENT PORTION OF OTHER DEBT		2,397		135
ACCOUNTS PAYABLE		119,632		100,018
ACCRUED CUSTOMER RETURNS		53,062		40,982
ACCRUED CORE LIABILITY		23,318		22,014
ACCRUED REBATES		41,885		46,437
PAYROLL AND COMMISSIONS		29,363		35,938
SUNDRY PAYABLES AND ACCRUED EXPENSES		42,410		47,078

TOTAL CURRENT LIABILITIES		447,067		302,602

OTHER LONG-TERM DEBT		80		97
NONCURRENT OPERATING LEASE LIABILITIES		30,495		22,450
ACCRUED ASBESTOS LIABILITIES		54,035		55,226
OTHER LIABILITIES		28,481		25,929

TOTAL LIABILITIES		560,158		406,304

TOTAL SMP STOCKHOLDERS' EQUITY		583,616		550,236
NONCONTROLLING INTEREST		11,501		-
TOTAL STOCKHOLDERS' EQUITY		595,117		550,236

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,155,275	$	956,540

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

	SIX MONTHS ENDED JUNE 30,
	2021			2020
	(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

NET EARNINGS	$	48,161		$	19,594
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION		13,100			12,877
OTHER		4,127			9,666
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE		(4,715	)		(38,623	)
INVENTORIES		(46,682	)		12,725
ACCOUNTS PAYABLE		16,097			(21,804	)
PREPAID EXPENSES AND OTHER CURRENT ASSETS		3,220			5,664
SUNDRY PAYABLES AND ACCRUED EXPENSES		(6,491	)		2,085
OTHER		(3,664	)		(3,069	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		23,153			(885	)


CASH FLOWS FROM INVESTING ACTIVITIES

ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES		(109,267	)		-
CAPITAL EXPENDITURES		(11,709	)		(9,026	)
OTHER INVESTING ACTIVITIES		2			6
NET CASH USED IN INVESTING ACTIVITIES		(120,974	)		(9,020	)


CASH FLOWS FROM FINANCING ACTIVITIES

NET CHANGE IN DEBT		127,250			34,349
PURCHASE OF TREASURY STOCK		(11,096	)		(8,726	)
DIVIDENDS PAID		(11,134	)		(5,615	)
OTHER FINANCING ACTIVITIES		694			1,818
NET CASH PROVIDED BY FINANCING ACTIVITIES		105,714			21,826


EFFECT OF EXCHANGE RATE CHANGES ON CASH		72			217
NET INCREASE IN CASH AND CASH EQUIVALENTS		7,965			12,138
CASH AND CASH EQUIVALENTS at beginning of Period		19,488			10,372
CASH AND CASH EQUIVALENTS at end of Period	$	27,453		$	22,510

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.