NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and nine months ended September 30, 2007. Consolidated net sales for the third quarter of 2007 were $206.2 million, compared to consolidated net sales of $203.8 million during the comparable quarter in 2006. Earnings from continuing operations for the third quarter of 2007 were $4.8 million or 26 cents per diluted share, compared to $2.6 million or 14 cents per diluted share in the third quarter of 2006. Excluding restructuring expenses for previously announced facility moves and a gain from the sale of our Ft. Worth, TX building, earnings from continuing operations for the third quarters 2007 and 2006, were $5.6 million or 30 cents per diluted share and $2.9 million or 16 cents per diluted share, respectively. Consolidated net sales for the nine month period ended September 30, 2007 were $622.9 million, compared to consolidated net sales of $643 million during the comparable period in 2006. The nine month period in 2006 included $11.4 million net sales from the European Temperature Control business that was divested in December 2006. Earnings from continuing operations for the nine month period ended September 30, 2007 were $13.4 million or 72 cents per diluted share, compared to $10.6 million or 58 cents per diluted share in the comparable period of 2006. Excluding restructuring expenses for previously announced facility moves and a gain from the sale of our Ft. Worth, TX building, earnings from continuing operations for the nine months ended 2007 and 2006, were $15 million or 80 cents per diluted share and $11.1 million or 61 cents per diluted share, respectively. Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "We are pleased with our results for the third quarter. Sales, gross margin, and earnings per share were all ahead of the comparable quarter in 2006, as the actions we have taken over the past months have begun to bear fruit. "Engine Management sales were ahead 2.2% for the quarter, and Temperature Control reflected slightly improved sales, aided by a warmer than usual end of summer. Excluding the European divested Temperature Control sales of $3.3 million in 2006, Europe's sales increased $1.7 million. "Engine Management gross margin had a substantial increase, a full four points ahead of the third quarter of 2006, and stands at 26.7% year to date. We are approaching our previously stated target of 28-29%. "Plant relocations are proceeding on schedule. As previously announced, we have begun transferring operations from Long Island City and Puerto Rico (Engine Management) and Grapevine, Texas (Temperature Control) primarily to Reynosa, Mexico. This will lead to further cost improvements, partially in 2008 and fully in 2009. "Annually we have an actuarial valuation performed on our asbestos liability. The September 2007 adjustment reflects an unfavorable pre-tax increase to the reserve of $2.8 million bringing the total reserve to $23.8 million. This essentially reversed a favorable reduction to the reserve from the comparable period a year ago." The Board of Directors has approved payment of a quarterly dividend of nine cents per share on the common stock outstanding. The dividend will be paid on December 3, 2007 to stockholders of record November 15, 2007. Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, October 30, 2007. The dial in number is 800-894-5910 (domestic) or 785-424-1052 (international). The playback number is 800-753-9146 (domestic) or 402-220-2705 (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
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2007 2006 2007 2006
(Unaudited) (Unaudited)
NET SALES $206,169 $203,755 $622,934 $643,005
COST OF SALES 151,527 154,423 459,728 483,736
GROSS PROFIT 54,642 49,332 163,206 159,269
SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 42,861 40,039 128,916 126,822
RESTRUCTURING EXPENSES 2,630 598 3,867 828
OPERATING INCOME 9,151 8,695 30,423 31,619
OTHER INCOME, NET 1,864 820 2,910 1,980
INTEREST EXPENSE 4,605 5,118 13,941 14,826
EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES 6,410 4,397 19,392 18,773
INCOME TAX EXPENSE 1,628 1,814 6,018 8,137
EARNINGS FROM CONTINUING
OPERATIONS 4,782 2,583 13,374 10,636
DISCONTINUED OPERATION,
NET OF TAX (2,148) 1,656 (2,776) 603
NET EARNINGS $2,634 $4,239 $10,598 $11,239
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM
CONTINUING OPERATIONS $0.26 $0.14 $0.72 $0.58
DISCONTINUED OPERATION (0.12) 0.09 $(0.15) 0.03
NET EARNINGS PER
COMMON SHARE - BASIC $0.14 $0.23 $0.57 $0.61
DILUTED EARNINGS FROM
CONTINUING OPERATIONS $0.26 $0.14 $0.72 $0.58
DISCONTINUED OPERATION (0.12) 0.09 (0.15) 0.03
NET EARNINGS PER COMMON
SHARE - DILUTED $0.14 $0.23 $0.57 $0.61
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES 18,593,165 18,306,178 18,609,268 18,265,784
WEIGHTED AVERAGE
NUMBER OF COMMON
AND DILUTIVE
SHARES 18,623,138 18,371,435 18,692,217 18,297,979
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
September 30, December 31,
2007 2006
(Unaudited)
Cash $19,449 $22,348
Accounts receivable, gross 244,803 193,129
Allowance for doubtful accounts 10,017 9,465
Accounts receivable, net 234,786 183,664
Inventories 239,063 233,970
Other current assets 24,719 21,856
Total current assets 518,017 461,838
Property, plant and equipment, net 76,526 80,091
Goodwill and other intangibles 54,953 56,289
Other assets 38,848 41,874
Total assets $688,344 $640,092
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $156,550 $139,799
Current portion of long-term debt 454 542
Accounts payable trade 60,997 53,783
Accrued customer returns 29,904 21,705
Restructuring accrual 673 703
Other current liabilities 66,279 61,993
Total current liabilities 314,857 278,525
Long-term debt 97,572 97,979
Accrued asbestos liability 22,682 20,828
Restructuring accrual 200 383
Post-retirement & other liabilities 53,929 51,678
Total liabilities 489,240 449,393
Total stockholders' equity 199,104 190,699
Total liabilities and stockholders' equity $688,344 $640,092
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
EARNINGS FROM CONTINUING SEPTEMBER 30, SEPTEMBER 30,
OPERATIONS 2007 2006 2007 2006
(Unaudited) (Unaudited)
GAAP EARNINGS FROM
CONTINUING OPERATIONS $4,782 $2,583 $13,374 $10,636
RESTRUCTURING EXPENSES
(NET OF TAX) 1,578 359 2,320 497
GAIN FROM SALE OF
FT. WORTH, TEXAS
BUILDING (NET OF TAX) (740) - (740) -
NON-GAAP EARNINGS FROM
CONTINUING OPERATIONS $5,620 $2,942 $14,954 $11,133
DILUTED EARNINGS PER
SHARE FROM CONTINUING
OPERATIONS
GAAP DILUTED EARNINGS
PER SHARE FROM
CONTINUING OPERATIONS $0.26 $0.14 $0.72 $0.58
RESTRUCTURING EXPENSES 0.08 0.02 0.12 0.03
GAIN FROM SALE OF
FT. WORTH, TEXAS
BUILDING (0.04) - (0.04) -
NON-GAAP DILUTED EARNINGS
PER SHARE FROM
CONTINUING OPERATIONS $0.30 $0.16 $0.80 $0.61
MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS 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.
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