PR Newswire | May 5, 2021 08:31AM EDT

Quarterly Dividend

05/05 07:30 CDT

Standard Motor Products, Inc. Announces First Quarter 2021 Results and a Quarterly Dividend NEW YORK, May 5, 2021

NEW YORK, May 5, 2021 /PRNewswire/ -- 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 EARNINGSPER SHARE FROM CONTINUING OPERATIONS, AND OPERATING INCOME, EACH OF WHICH ARENON-GAAP MEASUREMENTS AND ARE ADJUSTED FOR SPECIAL ITEMS, ARE MEANINGFUL TOINVESTORS BECAUSE THEY PROVIDE A VIEW OF THE COMPANY WITH RESPECT TO ONGOINGOPERATING RESULTS. SPECIAL ITEMS REPRESENT SIGNIFICANT CHARGES OR CREDITS THATARE IMPORTANT TO AN UNDERSTANDING OF THE COMPANY'S OVERALL OPERATING RESULTS INTHE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE NOT RECOGNIZEDIN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHOULD NOT BEVIEWED AS AN ALTERNATIVE TO GAAP MEASURES OF PERFORMANCE.

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Balance Sheets

(In thousands)

March 31, December 31,

2021 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

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SOURCE Standard Motor Products, Inc.