NEW YORK, May 7 /PRNewswire-FirstCall/ -- Standard Motor Products, Inc. , an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months ending March 31, 2008. Consolidated net sales for the first quarter of 2008 were $208.1 million, compared to consolidated net sales of $199.8 million during the comparable quarter in 2007. Earnings from continuing operations for the first quarter of 2008 were $13.3 million or 68 cents per diluted share, compared to $2.9 million or 16 cents per diluted share in the first quarter of 2007. Excluding restructuring expenses for previously announced facility moves, a gain from the sale and leaseback of its corporate facilities in Long Island City, New York and the associated defeasance costs on the building mortgage, earnings from continuing operations for the first quarter 2008 were $3.1 million or 17 cents per diluted share compared to earnings in the first quarter 2007 of $3.4 million or 18 cents per diluted share. Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "In addition to the financial results, during the first quarter we made progress towards achieving our strategic plan. The four percent increase in net sales results primarily from additional original equipment service (OES) business, and this is one of our key strategic goals. We anticipate shipping to additional customers during the latter part of the year. We are pleased with our progress in this area. "A second strategic initiative is the relocation of our factories from high cost to low cost areas. This is also progressing well. Puerto Rico and Long Island City have ceased manufacturing and we have begun to ramp up production in Reynosa, Mexico. As we have previously disclosed, we anticipate partial savings in the second half 2008, though we will incur the balance of the move costs this year. We still forecast $9 million annual savings from these two plant closings in 2009. "The one area that is not performing as well as we would like is Temperature Control. First, pre-season orders were lighter than usual, reflecting, we believe, substantial field inventories as well as general concern for the economy. Further, to compete with imports from China, we implemented our second major price reduction in two years, this one totaling approximately $6 million annually. "As a result of these reductions, we feel we are now competitive with the Chinese imports, but our margins are far from satisfactory. We are working aggressively to reduce cost. We continue to shift compressor remanufacturing to Mexico, and in 2008 we will produce 120,000 more units in Mexico than in 2007. Our target is to produce 80%-90% of our rebuilt compressors in Mexico by 2009. These moves, together with an internal cost reduction program, will help offset the lost margin due to price reductions." 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 June 2, 2008 to stockholders of record on May 15, 2008. Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 7, 2008. The dial in number is 800-862-9098 (domestic) or 785-424-1051 (international). The playback number is 800-753-6121 (domestic) or 402-220-2676 (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 share and per share amounts)
THREE MONTHS ENDED
MARCH 31,
2008 2007
(Unaudited)
NET SALES $208,084 $199,815
COST OF SALES 156,860 147,940
GROSS PROFIT 51,224 51,875
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 44,062 42,731
RESTRUCTURING AND INTEGRATION EXPENSES 2,836 678
OPERATING INCOME 4,326 8,466
OTHER INCOME, NET 20,362 267
INTEREST EXPENSE 3,931 4,541
EARNINGS FROM CONTINUING OPERATIONS
BEFORE TAXES 20,757 4,192
INCOME TAX EXPENSE 7,410 1,256
EARNINGS FROM CONTINUING OPERATIONS 13,347 2,936
DISCONTINUED OPERATION, NET OF TAX (326) (349)
NET EARNINGS $13,021 $2,587
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $0.73 $0.16
DISCONTINUED OPERATION (0.02) (0.02)
NET EARNINGS PER COMMON SHARE - BASIC $0.71 $0.14
DILUTED EARNINGS FROM CONTINUING OPERATIONS $0.68 $0.16
DISCONTINUED OPERATION (0.02) (0.02)
NET EARNINGS PER COMMON SHARE - DILUTED $0.66 $0.14
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 18,307,686 18,451,695
WEIGHTED AVERAGE NUMBER OF COMMON AND
DILUTIVE SHARES 21,141,964 18,600,884
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
March 31, December 31,
2008 2007
(Unaudited)
Cash $14,593 $13,261
Accounts receivable, gross 267,006 213,409
Allowance for doubtful accounts 10,055 8,964
Accounts receivable, net 256,951 204,445
Inventories 250,469 252,277
Assets held for sale 1,959 5,373
Other current assets 29,578 27,751
Total current assets 553,550 503,107
Property, plant and equipment, net 69,590 71,775
Goodwill and other intangibles 57,178 57,891
Other assets 41,927 45,319
Total assets $722,245 $678,092
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $180,248 $156,756
Current portion of long term debt 162 8,021
Accounts payable trade 73,509 64,384
Accrued customer returns 23,375 23,149
Other current liabilities 64,728 67,723
Total current liabilities 342,022 320,033
Long-term debt 90,522 90,534
Accrued asbestos liability 22,463 22,651
Other Liabilities 66,273 56,510
Total liabilities 521,280 489,728
Total stockholders' equity 200,965 188,364
Total liabilities and stockholders' equity $722,245 $678,092
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED
MARCH 31,
EARNINGS FROM CONTINUING OPERATIONS 2008 2007
(Unaudited)
GAAP EARNINGS FROM CONTINUING OPERATIONS $13,347 $2,936
RESTRUCTURING AND INTEGRATION EXPENSES
(NET OF TAX) 1,702 415
LOSS FROM EXTINGUISHMENT OF DEBT
(NET OF TAX) 882 -
GAIN FROM SALE OF BUILDING
(NET OF TAX) (12,875) -
NON-GAAP EARNINGS FROM CONTINUING
OPERATIONS $3,056 $3,351
DILUTED EARNINGS PER SHARE FROM
CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $0.68 $0.16
RESTRUCTURING AND INTEGRATION EXPENSES
(NET OF TAX) 0.09 0.02
LOSS FROM EXTINGUISHMENT OF DEBT
(NET OF TAX) 0.05 -
GAIN FROM SALE OF BUILDING
(NET OF TAX) (0.65) -
NON-GAAP DILUTED EARNINGS PER SHARE
FROM CONTINUING OPERATIONS $0.17 $0.18
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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