EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1
 
For Immediate Release
For more information, contact:
James J. Burke
Standard Motor Products, Inc.
(718) 392-0200
 
Jennifer Tio
Maximum Marketing Services, Inc.
(312) 226-4111 x2449
Jennifer.tio@maxmarketing.com

Standard Motor Products, Inc. Announces
Second Quarter 2014 Results and a Quarterly Dividend

New York, NY, July 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 six months ended June 30, 2014.

Consolidated net sales for the second quarter of 2014 were $272.5 million, compared to consolidated net sales of $270.1 million during the comparable quarter in 2013.  Earnings from continuing operations for the second quarter of 2014 were $11.2 million or 48 cents per diluted share, compared to $16.4 million or 71 cents per diluted share in the second quarter of 2013. The current quarter includes a one-time, non-recurring litigation charge discussed below. Excluding the litigation charge and other 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 2014 were $17.7 million or 76 cents per diluted share, compared to $16.4 million or 70 cents per diluted share in the second quarter of 2013.
 
37-18 Northern Blvd., Long Island City, NY  11101
(718) 392-0200
www.smpcorp.com
Consolidated net sales for the six month period ended June 30, 2014 were $505.3 million, compared to consolidated net sales of $500.8 million during the comparable period in 2013.  Earnings from continuing operations for the six month period ended June 30, 2014 were $23.6 million or $1.02 per diluted share, compared to $26 million or $1.12 per diluted share in the comparable period of 2013.  Excluding the litigation charge and other 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, 2014 and 2013 were $30.1 million or $1.30 per diluted share and $26 million or $1.12 per diluted share, respectively.

The results for the second quarter of 2014 include a one-time, non-recurring litigation charge of $10.6 million, $6.4 million net of taxes, relating to a tentative settlement of a legal proceeding with a third party. The legal proceeding arose from a former supplier’s default of their commercial loan and Standard Motor Products’ subsequent purchases of products from a third party that was alleged to be a controlled company of the original supplier. The $10.6 million settlement is expected to be paid in the third quarter 2014.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “We are pleased that, as a result of ongoing improvements, we are able to achieve continued increases for the three month and six month periods in  2014—exclusive of the one-time litigation expense—in operating income and earnings per share.
“In the second quarter, non-GAAP operating income increased 4.9%, and similarly earnings per diluted share increased 8.6% to 76 cents per diluted share.  Year-to-date non-GAAP operating income grew 12.5% while earnings per diluted share rose from $1.12 to $1.30, an increase of 16%.

“Engine Management gross margin continues to improve—a result of increased manufacturing, savings in purchasing, and the benefits of recent acquisitions. This increase has been offset by a decline in Temperature Control gross margin, as we have scaled back production to bring inventories into line. We look for Temperature Control gross margins to improve in the second half of the year.

“We have also achieved reductions in SG&A, as we strive for improved efficiency and cost control in all areas.

“Sales, however, have been somewhat disappointing. Overall, we are up marginally for the year, slightly less than one percent, including a slight decline in Temperature Control. On a positive note, we see that our customers are achieving increases in the low to mid-single digits in both Engine Management and Temperature Control. Typically, this leads to increased purchases from us in the future.
“In our previous press release, we announced three acquisitions finalized earlier in the year. The three were: Pensacola Fuel Injection, Inc., a remanufacturer of diesel fuel injectors; Annex Manufacturing, an importer and distributor of Temperature Control products; and the establishment of a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of Temperature Control products.

“The integration of all three is proceeding on schedule, and, as previously announced, all three are expected to be accretive to earnings in 2014, exclusive of one-time transition costs.

Further, as a result of our positive cash flow, we have absorbed the combined investment of $37.7 million for all three acquisitions, and our total debt at the end of the second quarter is lower than the comparable figure from the prior year.”

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 September 2, 2014 to stockholders of record on August 15, 2014.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, July 30, 2014.  The dial in number is 866-952-7523 (domestic) or 785-424-1828 (international). The playback number is 800-723-2156 (domestic) or 402-220-2660 (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
    
SIX MONTHS ENDED
  
 
  
JUNE 30,
    
JUNE 30,
  
 
  
2014
    
2013
    
2014
    
2013
  
 
  
(Unaudited)
    
(Unaudited)
  
NET SALES
  
$
272,540
    
$
270,126
    
$
505,292
    
$
500,834
  
 
                                
COST OF SALES
    
195,141
      
192,330
      
359,983
      
357,210
  
 
                                
GROSS PROFIT
    
77,399
      
77,796
      
145,309
      
143,624
  
 
                                
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
48,847
      
50,588
      
96,441
      
100,198
  
LITIGATION CHARGE
    
10,650
      
-
      
10,650
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
555
      
200
      
726
      
618
  
OTHER INCOME , NET
    
273
      
212
      
533
      
442
  
 
                                
OPERATING INCOME
    
17,620
      
27,220
      
38,025
      
43,250
  
 
                                
OTHER NON-OPERATING INCOME (EXPENSE), NET
    
307
      
(64
)
    
(106
)
    
(260
)
 
                                
INTEREST EXPENSE
    
457
      
646
      
765
      
1,218
  
 
                                
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
17,470
      
26,510
      
37,154
      
41,772
  
 
                                
PROVISION FOR INCOME TAXES
    
6,301
      
10,110
      
13,578
      
15,806
  
 
                                
EARNINGS FROM CONTINUING OPERATIONS
    
11,169
      
16,400
      
23,576
      
25,966
  
 
                                
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(529
)
    
(357
)
    
(1,211
)
    
(749
)
 
                                
NET EARNINGS
  
$
10,640
    
$
16,043
    
$
22,365
    
$
25,217
  
 
                                
NET EARNINGS PER COMMON SHARE:
                                
 
                                
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.49
    
$
0.71
    
$
1.03
    
$
1.13
  
DISCONTINUED OPERATION
    
(0.02
)
    
(0.01
)
    
(0.05
)
    
(0.03
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.47
    
$
0.70
    
$
0.98
    
$
1.10
  
 
                                
 
                                
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.48
    
$
0.71
    
$
1.02
    
$
1.12
  
DISCONTINUED OPERATION
    
(0.02
)
    
(0.02
)
    
(0.06
)
    
(0.03
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.46
    
$
0.69
    
$
0.96
    
$
1.09
  
 
                                
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,874,002
      
22,981,337
      
22,910,419
      
22,917,769
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
23,196,713
      
23,261,118
      
23,219,055
      
23,190,091
  

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
 
(In thousands)
 
 
  
THREE MONTHS ENDED
    
   
SIX MONTHS ENDED
    
 
 
  
JUNE 30,
    
   
JUNE 30,
    
 
 
  
2014
    
   
2013
    
   
2014
    
   
2013
    
 
 
  
(unaudited)
    
   
(unaudited)
    
 
Revenues
  
   
   
   
   
   
   
   
 
Engine Management
  
$
184,181
    
   
$
182,050
    
   
$
363,475
    
   
$
357,559
    
 
Temperature Control
    
85,660
    
     
86,660
    
     
137,145
    
     
139,388
    
 
All Other
    
2,699
    
     
1,416
    
     
4,672
    
     
3,887
    
 
 
  
$
272,540
    
   
$
270,126
    
   
$
505,292
    
   
$
500,834
    
 
 
          
           
           
           
 
Gross Margin
          
           
           
           
 
Engine Management
  
$
56,059
  
30.4
%
 
 
  
$
54,380
  
29.9
%
 
 
  
$
109,254
  
30.1
%
 
 
  
$
106,094
  
29.7
%
 
 
Temperature Control
    
18,299
  
21.4
%
 
 
    
20,342
  
23.5
%
 
 
    
30,184
  
22.0
%
 
 
    
31,328
  
22.5
%
 
 
All Other
    
3,041
              
3,074
              
5,871
              
6,202
          
 
  
$
77,399
  
28.4
%
 
 
  
$
77,796
  
28.8
%
 
 
  
$
145,309
  
28.8
%
 
 
  
$
143,624
  
28.7
%
 
 
 
                                                                
Selling, General & Administrative
                                                                
Engine Management
  
$
28,447
  
15.4
%
 
 
  
$
29,614
  
16.3
%
 
 
  
$
57,098
  
15.7
%
 
 
  
$
60,175
  
16.8
%
 
 
Temperature Control
    
13,260
  
15.5
%
 
 
    
13,414
  
15.5
%
 
 
    
24,532
  
17.9
%
 
 
    
24,773
  
17.8
%
 
 
All Other
    
7,140
              
7,560
              
14,811
              
15,250
          
 
  
$
48,847
  
17.9
%
 
 
  
$
50,588
  
18.7
%
 
 
  
$
96,441
  
19.1
%
 
 
  
$
100,198
  
20.0
%
 
 
 
                                                                
Operating Income
                                                                
Engine Management
  
$
27,612
  
15.0
%
 
 
  
$
24,766
  
13.6
%
 
 
  
$
52,156
  
14.3
%
 
 
  
$
45,919
  
12.8
%
 
 
Temperature Control
    
5,039
  
5.9
%
 
 
    
6,928
  
8.0
 %
 
 
    
5,652
  
4.1
 %
 
 
    
6,555
  
4.7
%
 
 
All Other
    
(4,099
)
            
(4,486
)
            
(8,940
)
            
(9,048
)
        
 
    
28,552
  
10.5
%
 
 
    
27,208
  
10.1
%
 
 
    
48,868
  
9.7
%
 
 
    
43,426
  
8.7
%
 
 
Litigation Charge
    
(10,650
)
-3.9
%
 
 
    
-
  
0.0
%
 
 
    
(10,650
)
-2.1
%
 
 
    
-
  
0.0
%
 
 
Restructuring & Integration
    
(555
)
-0.2
%
 
 
    
(200
)
-0.1
%
 
 
    
(726
)
-0.1
%
 
 
    
(618
)
-0.1
%
 
 
Other Income, Net
    
273
  
0.1
%
 
 
    
212
  
0.1
%
 
 
    
533
  
0.1
%
 
 
    
442
  
0.1
%
 
 
 
  
$
17,620
  
6.5
%
 
 
  
$
27,220
  
10.1
%
 
 
  
$
38,025
  
7.5
%
 
 
  
$
43,250
  
8.6
%
 
 
 
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

 
  
THREE MONTHS ENDED
    
SIX MONTHS ENDED
  
 
  
June 30,
    
June 30,
  
 
  
2014
    
2013
    
2014
    
2013
  
 
  
(Unaudited)
    
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
  
   
   
   
 
 
  
   
   
   
 
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
11,169
    
$
16,400
    
$
23,576
    
$
25,966
  
 
                                
LITIGATION CHARGE (NET OF TAX)
    
6,390
      
-
      
6,390
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
    
333
      
120
      
436
      
371
  
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
    
(157
)
    
(157
)
    
(315
)
    
(315
)
 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
17,735
    
$
16,363
    
$
30,087
    
$
26,022
  
 
                                
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                                
 
                                
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.48
    
$
0.71
    
$
1.02
    
$
1.12
  
 
                                
LITIGATION CHARGE (NET OF TAX)
    
0.28
      
-
      
0.27
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)
    
0.01
      
-
      
0.02
      
0.01
  
GAIN FROM SALE OF BUILDINGS (NET OF TAX)
    
(0.01
)
    
(0.01
)
    
(0.01
)
    
(0.01
)
 
                                
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.76
    
$
0.70
    
$
1.30
    
$
1.12
  
 
                                
OPERATING INCOME
                                
 
                                
GAAP OPERATING INCOME
  
$
17,620
    
$
27,220
    
$
38,025
    
$
43,250
  
 
                                
LITIGATION CHARGE
    
10,650
      
-
      
10,650
      
-
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
555
      
200
      
726
      
618
  
OTHER INCOME, NET
    
(273
)
    
(212
)
    
(533
)
    
(442
)
 
                                
NON-GAAP OPERATING INCOME
  
$
28,552
    
$
27,208
    
$
48,868
    
$
43,426
  
 
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)
 
 
  
June 30,
    
December 31,
  
 
  
2014
    
2013
  
 
  
(Unaudited)
    
 
 
  
   
 
ASSETS
    
 
 
  
   
 
CASH
  
$
6,217
    
$
5,559
  
 
                
ACCOUNTS RECEIVABLE, GROSS
    
151,040
      
132,170
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
6,749
      
6,969
  
ACCOUNTS RECEIVABLE, NET
    
144,291
      
125,201
  
 
                
INVENTORIES
    
292,459
      
269,447
  
OTHER CURRENT ASSETS
    
53,376
      
45,870
  
 
                  
TOTAL CURRENT ASSETS
    
496,343
      
446,077
  
 
                
PROPERTY, PLANT AND EQUIPMENT, NET
    
64,724
      
63,646
  
GOODWILL AND OTHER INTANGIBLES, NET
    
92,320
      
72,866
  
OTHER ASSETS
    
48,934
      
32,934
  
 
                  
TOTAL ASSETS
  
$
702,321
    
$
615,523
  
 
                
LIABILITIES AND STOCKHOLDERS' EQUITY
          
 
                
NOTES PAYABLE
  
$
59,070
    
$
21,406
  
CURRENT PORTION OF LONG TERM DEBT
    
24
      
59
  
ACCOUNTS PAYABLE
    
90,112
      
71,469
  
ACCRUED CUSTOMER RETURNS
    
40,669
      
31,464
  
OTHER CURRENT LIABILITIES
    
103,976
      
95,918
  
 
                  
TOTAL CURRENT LIABILITIES
    
293,851
      
220,316
  
 
                
LONG-TERM DEBT
    
8
      
16
  
ACCRUED ASBESTOS LIABILITIES
    
22,607
      
23,919
  
OTHER LIABILITIES
    
22,301
      
21,840
  
 
                  
TOTAL LIABILITIES
    
338,767
      
266,091
  
 
                
TOTAL STOCKHOLDERS' EQUITY
    
363,554
      
349,432
  
 
                  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
702,321
    
$
615,523
  

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
 
(In thousands)
 
 
  
SIX MONTHS ENDED
  
 
  
JUNE 30,
  
 
  
2014
    
2013
  
 
  
(Unaudited)
  
 
  
   
 
CASH FLOWS FROM OPERATING ACTIVITIES
  
   
 
 
  
   
 
NET EARNINGS
  
$
22,365
    
$
25,217
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
                
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
8,440
      
8,545
  
OTHER
    
5,376
      
8,108
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
(16,149
)
    
(53,723
)
INVENTORY
    
(19,527
)
    
(31,885
)
ACCOUNTS PAYABLE
    
13,847
      
16,550
  
OTHER
    
3,266
      
14,789
  
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVTIES
    
17,618
      
(12,399
)
 
                
 
                
CASH FLOWS FROM INVESTING ACTIVITIES
                
 
                
CAPITAL EXPENDITURES
    
(6,379
)
    
(5,551
)
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(37,726
)
    
(12,760
)
OTHER INVESTING ACTIVITIES
    
11
      
(596
)
NET CASH USED IN INVESTING ACTIVITIES
    
(44,094
)
    
(18,907
)
 
                
 
                
CASH FLOWS FROM FINANCING ACTIVITIES
                
 
                
NET CHANGE IN DEBT
    
37,620
      
27,819
  
PURCHASE OF TREASURY STOCK
    
(5,860
)
    
(1,151
)
DIVIDENDS PAID
    
(5,955
)
    
(5,037
)
OTHER FINANCING ACTIVITIES
    
2,033
      
10,271
  
NET CASH PROVIDED BY FINANCING ACTIVITIES
    
27,838
      
31,902
  
 
                
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
(704
)
    
(1,395
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
658
      
(799
)
CASH AND CASH EQUIVALENTS at beginning of Period
    
5,559
      
13,074
  
CASH AND CASH EQUIVALENTS at end of Period
  
$
6,217
    
$
12,275