STANDARD MOTOR PRODUCTS INC.
STANDARD MOTOR PRODUCTS INC.
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Standard Motor Products, Inc. Announces Third Quarter 2016 Results and a Quarterly Dividend

  • 52
Standard Motor Products, Inc. Announces Third Quarter 2016 Results and a Quarterly Dividend

PR Newswire

NEW YORK, Oct. 27, 2016 /PRNewswire/ -- 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 ended September 30, 2016.

Consolidated net sales for the third quarter of 2016 were $300.8 million, compared to consolidated net sales of $270 million during the comparable quarter in 2015. Earnings from continuing operations for the third quarter of 2016 were $21.1 million or 91 cents per diluted share, compared to $19.2 million or 83 cents per diluted share in the third quarter of 2015. 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 2016 were $21.3 million or 92 cents per diluted share, compared to $18.4 million or 80 cents per diluted share in the third quarter of 2015.

Consolidated net sales for the nine month period ended September 30, 2016, were $828.7 million, compared to consolidated net sales of $767 million during the comparable period in 2015.  Earnings from continuing operations for the nine month period ended September 30, 2016, were $53.6 million or $2.32 per diluted share, compared to $42.3 million or $1.82 per diluted share in the comparable period of 2015.  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, 2016, and 2015 were $54.1 million or $2.35 per diluted share and $41.3 million or $1.78 cents per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President, stated, "We are pleased with the results for the third quarter and year-to-date. For the quarter, consolidated net sales increased 11.4%, inclusive of $22.8 million from the acquisition of the General Cable North American ignition wire business. Excluding this, net sales were ahead 2.9% for the quarter.

"Our margins were higher as well. Gross margin increased from 30.2% to 31.8% for the quarter, while non-GAAP operating income before restructuring expenses grew roughly 16%. Some of the improvement is a function of increased sales, but much is the result of continuous operating improvement in all our locations. We compliment all our people for their efforts and achievements in this area.

"Turning to the operating divisions, Engine Management net sales increased 13.8% for the quarter. Excluding the wire acquisition, Engine Management sales were ahead approximately 1%. However, year-to-date, excluding the wire acquisition, net sales are up 3.5%, in line with our low to mid-single digit forecasts. As we have previously noted, sales can vary in any particular quarter, based on special one-time events, but over time they balance out.

"Temperature Control sales increased 6.8% for the quarter and 5.5% year-to-date. By contrast, our key customers reported POS sales increases through September of about 9% aided by the first warm summer in three years. This would indicate that our customers were able to reduce inventory during this time, much of which was carried over from the two prior cool summers. This should be a positive factor heading into 2017.

"Year-to-date results were positive for the company as a whole. Total consolidated net sales were up 8% (4% excluding the wire acquisition). Gross margin increased from 28.4% to 30.9% and non-GAAP operating income before restructuring expenses increased by approximately 33%. As you recall, we incurred approximately $10 million of one-time costs during the full year 2015 for our diesel enhancement program, unfavorable Temperature Control variances and postretirement medical expenses. Adjusting for the $9.5 million of these expenses incurred in the first nine months of 2015, our non-GAAP operating income improved roughly 16%.

"We have two major operating initiatives in progress and both are proceeding on schedule and on budget. The first is the integration of the wire acquisition. In October, we completed the consolidation of the General Cable Altoona, PA, distribution center into our existing wire distribution center in Edwardsville, KS. We are now announcing our plan to relocate all production from the acquired Nogales, Mexico, wire set assembly operation to our existing wire assembly business in Reynosa, Mexico. We anticipate completion by the end of 2017, at which point we will close the Nogales plant.

"The second initiative includes the closing of our Grapevine, TX, facility and the relocation of the production lines to Greenville, SC, and Reynosa, Mexico. We are also relocating certain production lines from Greenville, SC, to Bialystok, Poland. We anticipate that all will be complete by the end of 2017 and will result in significant synergies and cost savings."

The Board of Directors has approved payment of a quarterly dividend of seventeen cents per share on the common stock outstanding. The dividend will be paid on December 1, 2016, to stockholders of record on November 15, 2016.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, October 27, 2016.  The dial-in number is 800-895-1241 (domestic) or 785-424-1056 (international). The playback number is 800-727-1367 (domestic) or 402-220-2669 (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



NINE MONTHS ENDED



SEPTEMBER 30,



SEPTEMBER 30,



2016



2015



2016



2015



(Unaudited)



(Unaudited)

NET SALES


$       300,795



$       270,037



$       828,683



$       767,008













COST OF SALES


205,151



188,484



572,967



548,806













GROSS PROFIT


95,644



81,553



255,716



218,202













SELLING, GENERAL & ADMINISTRATIVE EXPENSES


61,277



51,907



169,033



152,841

RESTRUCTURING AND INTEGRATION EXPENSES (INCOME)


1,115



(80)



2,127



(49)

OTHER INCOME , NET


322



231



881



774













OPERATING INCOME 


33,574



29,957



85,437



66,184













OTHER NON-OPERATING INCOME (EXPENSE), NET


208



(535)



806



164













INTEREST EXPENSE


501



332



1,206



1,238













EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


33,281



29,090



85,037



65,110













PROVISION FOR INCOME TAXES


12,226



9,896



31,464



22,769













EARNINGS FROM CONTINUING OPERATIONS


21,055



19,194



53,573



42,341













LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(425)



(728)



(1,495)



(1,549)













NET EARNINGS 


$         20,630



$         18,466



$         52,078



$         40,792









































































NET EARNINGS PER COMMON SHARE:
























   BASIC EARNINGS FROM CONTINUING OPERATIONS


$             0.93



$             0.84



$             2.36



$             1.85

   DISCONTINUED OPERATION


(0.02)



(0.03)



(0.06)



(0.07)

   NET EARNINGS PER COMMON SHARE - BASIC


$             0.91



$             0.81



$             2.30



$             1.78

























   DILUTED EARNINGS FROM CONTINUING OPERATIONS


$             0.91



$             0.83



$             2.32



$             1.82

   DISCONTINUED OPERATION


(0.02)



(0.03)



(0.06)



(0.06)

   NET EARNINGS PER COMMON SHARE - DILUTED


$             0.89



$             0.80



$             2.26



$             1.76

























WEIGHTED AVERAGE NUMBER OF COMMON SHARES


22,716,279



22,770,865



22,688,071



22,865,978

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


23,097,699



23,133,869



23,044,604



23,220,381

 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income



























(In thousands)









































THREE MONTHS ENDED



NINE MONTHS ENDED




SEPTEMBER 30,



SEPTEMBER 30,




2016



2015



2016



2015




(unaudited)



(unaudited)


Revenues













Engine Management


$       200,782



$       176,379



$       580,311



$       530,442


Temperature Control


96,819



90,625



241,088



228,432


All Other


3,194



3,033



7,284



8,134




$         300,795



$         270,037



$         828,683



$         767,008















Gross Margin













Engine Management


$         66,849

33.3%


$         55,258

31.3%


$       187,956

32.4%


$       159,227

30.0%

Temperature Control


25,773

26.6%


23,308

25.7%


60,447

25.1%


50,438

22.1%

All Other


3,022



2,987



7,313



8,537




$           95,644

31.8%


$           81,553

30.2%


$         255,716

30.9%


$         218,202

28.4%














Selling, General & Administrative













Engine Management


$         36,659

18.3%


$         30,609

17.4%


$         102,908

17.7%


$           91,055

17.2%

Temperature Control


15,827

16.3%


14,293

15.8%


41,778

17.3%


39,621

17.3%

All Other


8,791



7,005



24,347



22,165




$           61,277

20.4%


$           51,907

19.2%


$         169,033

20.4%


$         152,841

19.9%



























Operating Income













Engine Management


$         30,190

15.0%


$         24,649

14.0%


$           85,048

14.7%


$           68,172

12.9%

Temperature Control


9,946

10.3%


9,015

9.9%


18,669

7.7%


10,817

4.7%

All Other


(5,769)



(4,018)



(17,034)



(13,628)




34,367

11.4%


29,646

11.0%


86,683

10.5%


65,361

8.5%

Restructuring & Integration


(1,115)

-0.4%


80

0.0%


(2,127)

-0.3%


49

0.0%

Other Income, Net


322

0.1%


231

0.1%


881

0.1%


774

0.1%



$           33,574

11.2%


$           29,957

11.1%


$           85,437

10.3%


$           66,184

8.6%

 

 

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures









































(In thousands, except per share amounts)












THREE MONTHS ENDED



NINE MONTHS ENDED



SEPTEMBER 30,



SEPTEMBER 30,



2016


2015



2016


2015


(Unaudited)


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS




















GAAP EARNINGS FROM CONTINUING OPERATIONS


$            21,055


$            19,194



$            53,573


$            42,341











RESTRUCTURING AND INTEGRATION EXPENSES


1,115


(80)



2,127


(49)

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(235)


(571)



(235)


(571)

GAIN FROM SALE OF BUILDINGS


(262)


(262)



(786)


(786)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(340)


137



(536)


333

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$            21,333


$            18,418



$            54,143


$            41,268





















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS




















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.91


$               0.83



$               2.32


$               1.82











RESTRUCTURING AND INTEGRATION EXPENSES


0.05


-



0.09


-

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(0.01)


(0.03)



(0.01)


(0.03)

GAIN FROM SALE OF BUILDINGS


(0.01)


(0.01)



(0.03)


(0.03)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(0.02)


0.01



(0.02)


0.02











NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$               0.92


$               0.80



$               2.35


$               1.78





















OPERATING INCOME




















GAAP OPERATING INCOME


$            33,574


$            29,957



$            85,437


$            66,184











RESTRUCTURING AND INTEGRATION EXPENSES


1,115


(80)



2,127


(49)

OTHER INCOME, NET


(322)


(231)



(881)


(774)











NON-GAAP OPERATING INCOME


$            34,367


$            29,646



$            86,683


$            65,361































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,




December  31,



2016




2015



(Unaudited)












ASSETS









CASH


$            30,537




$            18,800








ACCOUNTS RECEIVABLE, GROSS


166,349




128,099

ALLOWANCE FOR DOUBTFUL ACCOUNTS


4,623




4,246

ACCOUNTS RECEIVABLE, NET


161,726




123,853








INVENTORIES


302,598




285,793

OTHER CURRENT ASSETS


47,896




51,294








TOTAL CURRENT ASSETS


542,757




479,740








PROPERTY, PLANT AND EQUIPMENT, NET


77,081




68,882

GOODWILL AND OTHER INTANGIBLES, NET


133,469




84,267

OTHER ASSETS


44,869




48,175








TOTAL ASSETS


$          798,176




$          681,064















LIABILITIES AND STOCKHOLDERS' EQUITY
















NOTES PAYABLE


$            70,000




$            47,427

CURRENT PORTION OF LONG TERM DEBT


44




16

ACCOUNTS PAYABLE


88,168




72,711

ACCRUED CUSTOMER RETURNS


46,424




38,812

OTHER CURRENT LIABILITIES


109,645




84,950








TOTAL CURRENT LIABILITIES


314,281




243,916








LONG-TERM DEBT


134




62

ACCRUED ASBESTOS LIABILITIES


31,884




32,185

OTHER LIABILITIES


13,338




12,922








 TOTAL LIABILITIES 


359,637




289,085








 TOTAL STOCKHOLDERS' EQUITY 


438,539




391,979








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$          798,176




$          681,064










-




-

 

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















NINE MONTHS ENDED



SEPTEMBER 30,



2016



2015



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS 

$        52,078



$        40,792


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






PROVIDED BY OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

14,829



13,042


OTHER

10,581



7,945


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(35,192)



(25,094)


INVENTORY 

(7,422)



4,761


ACCOUNTS PAYABLE

9,900



8,383


OTHER

38,194



23,003


NET CASH PROVIDED BY OPERATING ACTIVTIES

82,968



72,832














CASH FLOWS FROM INVESTING ACTIVITIES












ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

(67,289)



-


CAPITAL EXPENDITURES

(15,194)



(14,612)


OTHER INVESTING ACTIVITIES

191



32


NET CASH USED IN INVESTING ACTIVITIES 

(82,292)



(14,580)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

22,672



(32,227)


PURCHASE OF TREASURY STOCK

(377)



(15,519)


DIVIDENDS PAID

(11,566)



(10,299)


OTHER FINANCING ACTIVITIES

736



131


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

11,465



(57,914)














EFFECT OF EXCHANGE RATE CHANGES ON CASH

(404)



(707)


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

11,737



(369)


CASH AND CASH EQUIVALENTS at beginning of Period

18,800



13,728


CASH AND CASH EQUIVALENTS at end of Period

$        30,537



$        13,359

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-third-quarter-2016-results-and-a-quarterly-dividend-300352108.html

SOURCE Standard Motor Products, Inc.

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