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Standard Motor Products Inc (SMP) SEC Filing 8-K Material Event for the period ending Friday, October 26, 2018

Standard Motor Products Inc

HISTORY TOOLS
CIK: 1482278 Ticker: SMP
Exhibit 99.1


For Immediate Release
For more information, contact:
James J. Burke
Standard Motor Products, Inc.
(718) 392-0200

Standard Motor Products, Inc. Announces

Third Quarter 2018 Results and a Quarterly Dividend

New York, NY, October 26, 2018......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 ending September 30, 2018.

Consolidated net sales for the third quarter of 2018 were $296.6 million, compared to consolidated net sales of $281.1 million during the comparable quarter in 2017. Earnings from continuing operations for the third quarter of 2018 were $19.3 million or 84 cents per diluted share, compared to $17.1 million or 74 cents per diluted share in the third quarter of 2017. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the third quarter of 2018 were $19.1 million or 83 cents per diluted share, compared to $17.2 million or 74 cents per diluted share in the third quarter of 2017.

37-18 Northern Blvd., Long Island City, NY  11101
(718) 392-0200
www.smpcorp.com

Consolidated net sales for the nine month period ended September 30, 2018, were $845.1 million, compared to consolidated net sales of $876.2 million during the comparable period in 2017.  Earnings from continuing operations for the nine month period ended September 30, 2018, were $44.7 million or $1.95 per diluted share, compared to $51.7 million or $2.22 per diluted share in the comparable period of 2017.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the nine months ended September 30, 2018, and 2017 were $46.7 million or $2.03 per diluted share and $53.2 million or $2.28 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products’ Chief Executive Officer and President, stated, “We are pleased with our performance in the quarter. After a challenging first half, which was largely impacted by temporary or timing-related issues, our third quarter showed positive signs of recovery.  We believe this trend will continue for the balance of the year.

“Engine Management sales were essentially flat for the quarter. Our Wire and Cable product line, which is in gradual decline, was down 6.7%, while the balance of our Engine Management business showed an increase of 2.3%. Both of these trends are in line with our stated expectations. Meanwhile, excluding Wire and Cable, our customers have been reporting solid POS gains all year, which in the third quarter were up in the mid-single digits over 2017.

“Our Engine Management gross margin in the third quarter showed a 50 basis point improvement over the second quarter, as we are now beginning to see the gradual improvement in our efficiencies as we fully integrate the General Cable operation into our Reynosa, Mexico facility. While there remains much to be done, we are pleased to see this trending in the right direction.

“Year-to-date our Engine Management net sales were 4.9% below 2017 overall, and 3.2% below 2017 excluding Wire and Cable. As previously reported, the shortfall in the first half of the year was due to a few customers placing large pipeline orders in 2017 that were not repeated this year.

“Turning to Temperature Control, sales rebounded very strongly in the quarter, up 18.4% from last year. This was the result of a warm summer, compared to a mild summer in 2017. Sales year-to-date are essentially flat as compared to 2017. As previously reported, our first half sales lagged 2017 by almost 11%, as our customers entered 2018 with above normal inventory levels, and therefore placed substantially lower pre-season orders this year.

“The warm weather continued into autumn, which bodes well not just for this year’s sales, but for next year’s pre-season orders as well, as we expect our customers to end the year with lower than typical inventories.

“Temperature Control gross margin increased to 27.6% for the quarter, up from 26.8% from last year. This reflects the fact that we are now essentially fully low cost in our manufacturing, having exited our Texas operations in 2017. However, much of the gross margin improvement was negated by incremental SG&A associated with higher than usual distribution expenses. These increases were due to a combination of significant additional labor costs to keep up with the surge in sales, as well as start-up costs related to the installation of a new automation project in our distribution center.  We believe this project will be complete and fully optimized by year-end, and we will see substantial improvement next year.

“In closing, while we recognize that there is still a great deal of work ahead of us, we are pleased with the quarter, and feel that the temporary issues that have recently had a negative impact on us are either waning or are in the past. Coupled with strong signs of customer sell-through and industry health in general, we are excited about the future.”

The Board of Directors has approved payment of a quarterly dividend of 21 cents per share on the common stock outstanding. The dividend will be paid on December 3, 2018 to stockholders of record on November 15, 2018.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, October 26, 2018.  The dial-in number is 866-342-8591 (domestic) or 203-518-9713 (international). The playback number is 800-839-5125 (domestic) or 402-220-1502 (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
SEPTEMBER 30,
    
NINE MONTHS ENDED
SEPTEMBER 30,
  
   
2018
    
2017
    
2018
    
2017
  
   
(Unaudited)
    
(Unaudited)
  
NET SALES
  
$
296,619
    
$
281,058
    
$
845,081
    
$
876,165
  
                                 
COST OF SALES
    
209,313
      
198,523
      
603,897
      
618,854
  
                                 
GROSS PROFIT
    
87,306
      
82,535
      
241,184
      
257,311
  
                                 
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
60,137
      
54,963
      
175,604
      
172,726
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
6
      
1,132
      
3,073
      
3,914
  
OTHER INCOME, NET
    
15
      
316
      
328
      
946
  
                                 
OPERATING INCOME
    
27,178
      
26,756
      
62,835
      
81,617
  
                                 
OTHER NON-OPERATING INCOME, NET
    
351
      
482
      
800
      
2,372
  
                                 
INTEREST EXPENSE
    
1,254
      
595
      
3,137
      
1,785
  
                                 
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
26,275
      
26,643
      
60,498
      
82,204
  
                                 
PROVISION FOR INCOME TAXES
    
7,002
      
9,535
      
15,801
      
30,468
  
                                 
EARNINGS FROM CONTINUING OPERATIONS
    
19,273
      
17,108
      
44,697
      
51,736
  
                                 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(3,524
)
    
(3,983
)
    
(5,014
)
    
(5,113
)
                                 
NET EARNINGS
  
$
15,749
    
$
13,125
    
$
39,683
    
$
46,623
  
                                 
NET EARNINGS PER COMMON SHARE:
                                
                                 
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.86
    
$
0.75
    
$
1.99
    
$
2.27
  
DISCONTINUED OPERATION
    
(0.16
)
    
(0.17
)
    
(0.22
)
    
(0.22
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.70
    
$
0.58
    
$
1.77
    
$
2.05
  
                                 
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.84
    
$
0.74
    
$
1.95
    
$
2.22
  
DISCONTINUED OPERATION
    
(0.15
)
    
(0.17
)
    
(0.22
)
    
(0.22
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.69
    
$
0.57
    
$
1.73
    
$
2.00
  
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,424,962
      
22,660,157
      
22,464,697
      
22,774,927
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
22,938,925
      
23,174,700
      
22,954,649
      
23,287,052
  

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income

(In thousands)

   
THREE MONTHS ENDED
SEPTEMBER 30,
          
NINE MONTHS ENDED
SEPTEMBER 30,
        
   
2018
          
2017
          
2018
          
2017
        
   
(Unaudited)
          
(Unaudited)
        
Revenues
                                                
Ignition, Emission and Fuel System Parts
  
$
159,101
          
$
155,544
          
$
482,640
          
$
498,802
        
Wire and Cable
    
38,469
            
41,232
            
117,847
            
132,637
        
Engine Management
    
197,570
            
196,776
            
600,487
            
631,439
        
                                                         
Compressors
    
54,842
            
44,733
            
131,680
            
132,278
        
Other Climate Control Parts
    
41,237
            
36,427
            
105,000
            
106,563
        
Temperature Control
    
96,079
            
81,160
            
236,680
            
238,841
        
                                                         
All Other
    
2,970
            
3,122
            
7,914
            
5,885
        
Revenues
  
$
296,619
          
$
281,058
          
$
845,081
          
$
876,165
        
                                                         
Gross Margin
                                                        
Engine Management
  
$
57,188
    
28.9
%
  
$
57,808
    
29.4
%
  
$
171,440
    
28.6
%
  
$
187,531
    
29.7
%
Temperature Control
    
26,523
    
27.6
%
    
21,721
    
26.8
%
    
60,990
    
25.8
%
    
62,539
    
26.2
%
All Other
    
3,595
            
3,006
            
8,754
            
7,241
        
Gross Margin
  
$
87,306
    
29.4
%
  
$
82,535
    
29.4
%
  
$
241,184
    
28.5
%
  
$
257,311
    
29.4
%
                                                         
Selling, General & Administrative
                                                        
Engine Management
  
$
35,553
    
18.0
%
  
$
34,289
    
17.4
%
  
$
106,415
    
17.7
%
  
$
108,497
    
17.2
%
Temperature Control
    
17,961
    
18.7
%
    
13,665
    
16.8
%
    
46,511
    
19.7
%
    
41,215
    
17.3
%
All Other
    
6,623
            
7,009
            
22,678
            
23,014
        
Selling, General & Administrative
  
$
60,137
    
20.3
%
  
$
54,963
    
19.6
%
  
$
175,604
    
20.8
%
  
$
172,726
    
19.7
%
                                                         
                                                         
Operating Income
                                                        
Engine Management
  
$
21,635
    
11.0
%
  
$
23,519
    
12.0
%
  
$
65,025
    
10.8
%
  
$
79,034
    
12.5
%
Temperature Control
    
8,562
    
8.9
%
    
8,056
    
9.9
%
    
14,479
    
6.1
%
    
21,324
    
8.9
%
All Other
    
(3,028
)
          
(4,003
)
          
(13,924
)
          
(15,773
)
      
Subtotal
    
27,169
    
9.2
%
    
27,572
    
9.8
%
    
65,580
    
7.8
%
    
84,585
    
9.7
%
Restructuring & Integration
    
(6
)
  
0.0
%
    
(1,132
)
  
-0.4
%
    
(3,073
)
  
-0.4
%
    
(3,914
)
  
-0.4
%
Other Income, Net
    
15
    
0.0
%
    
316
    
0.1
%
    
328
    
0.0
%
    
946
    
0.1
%
Operating Income
  
$
27,178
    
9.2
%
  
$
26,756
    
9.5
%
  
$
62,835
    
7.4
%
  
$
81,617
    
9.3
%

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

(In thousands, except per share amounts)

   
THREE MONTHS ENDED
SEPTEMBER 30,
    
NINE MONTHS ENDED
SEPTEMBER 30,
  
   
2018
    
2017
    
2018
    
2017
  
   
(Unaudited)
    
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
                        
                         
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
19,273
    
$
17,108
    
$
44,697
    
$
51,736
  
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
6
      
1,132
      
3,073
      
3,914
  
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    
(144
)
    
(463
)
    
(144
)
    
(463
)
GAIN FROM SALE OF BUILDINGS
    
-
      
(262
)
    
(218
)
    
(786
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
(1
)
    
(348
)
    
(742
)
    
(1,251
)
                                 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
19,134
    
$
17,167
    
$
46,666
    
$
53,150
  
                                 
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                                
                                 
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.84
    
$
0.74
    
$
1.95
    
$
2.22
  
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
-
      
0.05
      
0.13
      
0.16
  
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    
(0.01
)
    
(0.02
)
    
(0.01
)
    
(0.02
)
GAIN FROM SALE OF BUILDINGS
    
-
      
(0.01
)
    
(0.01
)
    
(0.03
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
-
      
(0.02
)
    
(0.03
)
    
(0.05
)
                                 
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.83
    
$
0.74
    
$
2.03
    
$
2.28
  
                                 
OPERATING INCOME
                                
                                 
GAAP OPERATING INCOME
  
$
27,178
    
$
26,756
    
$
62,835
    
$
81,617
  
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
6
      
1,132
      
3,073
      
3,914
  
OTHER INCOME, NET
    
(15
)
    
(316
)
    
(328
)
    
(946
)
                                 
NON-GAAP OPERATING INCOME
  
$
27,169
    
$
27,572
    
$
65,580
    
$
84,585
  

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)

   
September 30,
2018
    
December 31,
2017
  
   
(Unaudited)
        
             
ASSETS
            
             
CASH
  
$
27,321
    
$
17,323
  
                 
ACCOUNTS RECEIVABLE, GROSS
    
168,846
      
145,024
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
5,537
      
4,967
  
ACCOUNTS RECEIVABLE, NET
    
163,309
      
140,057
  
                 
INVENTORIES
    
318,420
      
326,411
  
UNRETURNED CUSTOMER INVENTORY
    
21,295
      
-
  
OTHER CURRENT ASSETS
    
11,681
      
12,300
  
                 
TOTAL CURRENT ASSETS
    
542,026
      
496,091
  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    
91,735
      
89,103
  
GOODWILL
    
67,387
      
67,413
  
OTHER INTANGIBLES, NET
    
50,263
      
56,261
  
DEFERRED INCOME TAXES
    
34,907
      
32,420
  
INVESTMENT IN UNCONSOLIDATED AFFILIATES
    
33,785
      
31,184
  
OTHER ASSETS
    
16,284
      
15,095
  
                 
TOTAL ASSETS
  
$
836,387
    
$
787,567
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
NOTES PAYABLE
  
$
45,000
    
$
57,000
  
CURRENT PORTION OF OTHER DEBT
    
5,980
      
4,699
  
ACCOUNTS PAYABLE
    
84,031
      
77,990
  
ACCRUED CUSTOMER RETURNS
    
53,717
      
35,916
  
ACCRUED CORE LIABILITY
    
30,002
      
11,899
  
OTHER CURRENT LIABILITIES
    
90,221
      
98,393
  
                 
TOTAL CURRENT LIABILITIES
    
308,951
      
285,897
  
                 
OTHER LONG-TERM DEBT
    
26
      
79
  
ACCRUED ASBESTOS LIABILITIES
    
35,319
      
33,376
  
OTHER LIABILITIES
    
18,039
      
14,561
  
                 
TOTAL LIABILITIES
    
362,335
      
333,913
  
                 
TOTAL STOCKHOLDERS' EQUITY
    
474,052
      
453,654
  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
836,387
    
$
787,567
  

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

(In thousands)

   
NINE MONTHS ENDED
SEPTEMBER 30,
  
   
2018
    
2017
  
   
(Unaudited)
  
             
CASH FLOWS FROM OPERATING ACTIVITIES
            
NET EARNINGS
  
$
39,683
    
$
46,623
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
17,745
      
17,439
  
OTHER
    
12,220
      
14,065
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
(23,428
)
    
(27,753
)
INVENTORY
    
2,761
      
(18,746
)
ACCOUNTS PAYABLE
    
5,193
      
90
  
PREPAID EXPENSES AND OTHER CURRENT ASSETS
    
1,202
      
(4,805
)
SUNDRY PAYABLES AND ACCRUED EXPENSES
    
12,828
      
8,728
  
OTHER
    
(619
)
    
1,120
  
NET CASH PROVIDED BY OPERATING ACTIVITIES
    
67,585
      
36,761
  
                 
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(9,852
)
    
-
  
CAPITAL EXPENDITURES
    
(15,633
)
    
(17,710
)
OTHER INVESTING ACTIVITIES
    
37
      
6
  
NET CASH USED IN INVESTING ACTIVITIES
    
(25,448
)
    
(17,704
)
                 
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
NET CHANGE IN DEBT
    
(10,537
)
    
18,153
  
PURCHASE OF TREASURY STOCK
    
(9,271
)
    
(20,000
)
DIVIDENDS PAID
    
(14,144
)
    
(12,990
)
OTHER FINANCING ACTIVITIES
    
1,382
      
658
  
NET CASH USED IN FINANCING ACTIVITIES
    
(32,570
)
    
(14,179
)
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
431
      
724
  
NET INCREASE IN CASH AND CASH EQUIVALENTS
    
9,998
      
5,602
  
CASH AND CASH EQUIVALENTS at beginning of Period
    
17,323
      
19,796
  
CASH AND CASH EQUIVALENTS at end of Period
  
$
27,321
    
$
25,398
  


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Standard Motor Products Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2018 10-K Annual Report includes:

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  • Executive Team
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Standard Motor Products Inc provided additional information to their SEC Filing as exhibits

Exhibit 99.1: Additional Exhibits
Ticker: SMP
CIK: 93389
Form Type: 8-K Corporate News
Accession Number: 0001140361-18-041370
Submitted to the SEC: Fri Oct 26 2018 10:23:01 AM EST
Accepted by the SEC: Fri Oct 26 2018
Period: Friday, October 26, 2018
Industry: Motor Vehicle Parts And Accessories
Events:
  1. Earnings Release
  2. Financial Exhibit

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