Standard Motor Products (SMP) 8-K Third Quarter 2014 Results and a Quarterly Dividend

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 2014 Results and a Quarterly Dividend

New York, NY, October 30, 2014......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, 2014.

Consolidated net sales for the third quarter of 2014 were $257 million, compared to consolidated net sales of $264.2 million during the comparable quarter in 2013.  Earnings from continuing operations for the third quarter of 2014 were $17.8 million or 77 cents per diluted share, compared to $17.7 million or 76 cents per diluted share in the third quarter of 2013. 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 2014 were $17.1 million or 74 cents per diluted share, compared to $18.3 million or 79 cents per diluted share in the third quarter of 2013.

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, 2014 were $762.3 million, compared to consolidated net sales of $765 million during the comparable period in 2013.  Earnings from continuing operations for the nine month period ended September 30, 2014 were $41.4 million or $1.79 per diluted share, compared to $43.7 million or $1.88 per diluted share in the comparable period of 2013.  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, 2014 were $47.2 million or $2.04 per diluted share, compared to $44.3 million or $1.91 per diluted share for the nine months ended September 30, 2013.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “We are disappointed with our third quarter results, which essentially resulted from a decline in sales compared with the third quarter of 2013. However, our profits remain healthy, as our nine months earnings from continuing operations, as stated above, were 6.5% above the comparable period in 2013, and were an all time record for the Company.

“To better understand the sales picture, we need to break it down into our two primary divisions—Engine Management and Temperature Control. For Temperature Control, we experienced the second cool summer in a row, and sales in this division are quite sensitive to hot vs. cool summers.

“In Engine Management, our customers continue to report sales increases in our lines in the low to mid-single digits, as they did in 2013. However, in any given period, their purchases from us can vary due to a variety of one-time events—opening distribution centers, consolidating stores, increasing product coverage, integrating acquisitions, and so on.

“In 2013, our Engine Management division had a record year, with a sales increase of 7%. The fourth quarter alone had a 14% sales increase. This year, with challenging comparisons, we had essentially flat sales for nine months. In the long run, we believe these one-time events balance out, and we anticipate a return to low to mid-single digit increases in the future.

“Operationally, our people continue to perform extremely well—increasing our range of manufactured products, reducing purchase costs, streamlining SG&A—and this has led to improved profits despite flat sales.

“We made three acquisitions early this year—Pensacola Fuel Injectors, a rebuilder of diesel fuel injectors; Annex Manufacturing, an importer of Temperature Control products; and the creation of a joint venture with Gwo Yng, a leading Chinese manufacturer of Temperature Control products. All three are progressing nicely and will be fully integrated by year end. We anticipate additional benefits from these in 2015.

“To sum up, despite the disappointing sales, we believe industry demographics remain favorable and have a positive outlook for our future.”

Loss from discontinued operation, net of income taxes, in the third quarter of 2014 included a charge of $8.2 million compared to $389 thousand in the comparable period last year. The discontinued operation charge relates to asbestos-related indemnity claims and legal expenses from a brake business divested in 1998. Annually, in the third quarter, the Company engages an independent actuary to assess the Company’s asbestos-related liability exposure. The actuary has estimated that the Company’s gross undiscounted potential exposure for indemnity claims from September 2014 through 2058 will range from $36.1 million to $55.4 million and legal expenses will range from $43 million to $76.4 million. In the third quarter of 2014, the Company recorded a $12.8 million provision, $7.7 million net of taxes, to increase the asbestos-related indemnity liability to $36.1 million. Legal expenses are expensed as incurred.

The Board of Directors has approved payment of a quarterly dividend of thirteen cents per share on the common stock outstanding. The dividend will be paid on December 1, 2014 to stockholders of record on November 14, 2014.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, October 30, 2014.  The dial in number is 866-952-7530 (domestic) or 785-424-1832 (international). The playback number is 800-839-3735 (domestic) or 402-220-2977 (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,
	2014			2013			2014			2013
	(Unaudited)						(Unaudited)
NET SALES	$	257,046		$	264,162		$	762,338		$	764,996
COST OF SALES		179,819			184,081			539,802			541,291
GROSS PROFIT		77,227			80,081			222,536			223,705
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		48,811			50,615			145,252			150,813
LITIGATION CHARGE		-			-			10,650			-
RESTRUCTURING AND INTEGRATION EXPENSES		343			1,913			1,069			2,531
OTHER INCOME , NET		268			324			801			766
OPERATING INCOME		28,341			27,877			66,366			71,127
OTHER NON-OPERATING INCOME (EXPENSE), NET		(955	)		233			(1,061	)		(27	)
INTEREST EXPENSE		440			403			1,205			1,621
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		26,946			27,707			64,100			69,479
PROVISION FOR INCOME TAXES		9,140			10,021			22,718			25,827
EARNINGS FROM CONTINUING OPERATIONS		17,806			17,686			41,382			43,652
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(8,240	)		(389	)		(9,451	)		(1,138	)
NET EARNINGS	$	9,566		$	17,297		$	31,931		$	42,514
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS	$	0.78		$	0.77		$	1.81		$	1.90
DISCONTINUED OPERATION		(0.36	)		(0.02	)		(0.42	)		(0.05	)
NET EARNINGS PER COMMON SHARE - BASIC	$	0.42		$	0.75		$	1.39		$	1.85
DILUTED EARNINGS FROM CONTINUING OPERATIONS	$	0.77		$	0.76		$	1.79		$	1.88
DISCONTINUED OPERATION		(0.36	)		(0.02	)		(0.41	)		(0.05	)
NET EARNINGS PER COMMON SHARE - DILUTED	$	0.41		$	0.74		$	1.38		$	1.83
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		22,884,939			22,999,832			22,901,832			22,945,424
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		23,169,173			23,239,009			23,180,842			23,179,187

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income

(In thousands)
	THREE MONTHS ENDED								NINE MONTHS ENDED
	SEPTEMBER 30,								SEPTEMBER 30,
	2014				2013				2014				2013
	(unaudited)								(unaudited)
Revenues
Engine Management	$	169,913			$	177,939			$	533,388			$	535,498
Temperature Control		82,178				84,840				219,323				224,228
All Other		4,955				1,383				9,627				5,270
	$	257,046			$	264,162			$	762,338			$	764,996
Gross Margin
Engine Management	$	54,890		32.3%	$	56,654		31.8%	$	164,144		30.8%	$	162,748		30.4%
Temperature Control		18,251		22.2%		20,496		24.2%		48,435		22.1%		51,824		23.1%
All Other		4,086				2,931				9,957				9,133
	$	77,227		30.0%	$	80,081		30.3%	$	222,536		29.2%	$	223,705		29.2%
Selling, General & Administrative
Engine Management	$	28,758		16.9%	$	30,130		16.9%	$	85,856		16.1%	$	90,305		16.9%
Temperature Control		13,825		16.8%		12,994		15.3%		38,357		17.5%		37,767		16.8%
All Other		6,228				7,491				21,039				22,741
	$	48,811		19.0%	$	50,615		19.2%	$	145,252		19.1%	$	150,813		19.7%
Operating Income
Engine Management	$	26,132		15.4%	$	26,524		14.9%	$	78,288		14.7%	$	72,443		13.5%
Temperature Control		4,426		5.4%		7,502		8.8%		10,078		4.6%		14,057		6.3%
All Other		(2,142	)			(4,560	)			(11,082	)			(13,608	)
		28,416		11.1%		29,466		11.2%		77,284		10.1%		72,892		9.5%
Litigation Charge		-		0.0%		-		0.0%		(10,650	)	-1.4%		-		0.0%
Restructuring & Integration		(343	)	-0.1%		(1,913	)	-0.7%		(1,069	)	-0.1%		(2,531	)	-0.3%
Other Income, Net		268		0.1%		324		0.1%		801		0.1%		766		0.1%
	$	28,341		11.0%	$	27,877		10.6%	$	66,366		8.7%	$	71,127		9.3%

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,
	2014			2013			2014			2013
	(Unaudited)						(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS
GAAP EARNINGS FROM CONTINUING OPERATIONS	$	17,806		$	17,686		$	41,382		$	43,652
LITIGATION CHARGE (NET OF TAX)		-			-			6,390			-
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)		206			1,148			642			1,519
REVERSAL OF LT TAX LIABILITY		(350	)		-			(350	)		-
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD		(361	)		(374	)		(361	)		(374	)
GAIN FROM SALE OF BUILDINGS (NET OF TAX)		(157	)		(157	)		(472	)		(472	)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS	$	17,144		$	18,303		$	47,231		$	44,325
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	0.77		$	0.76		$	1.79		$	1.88
LITIGATION CHARGE (NET OF TAX)		-			-			0.28			-
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)		0.01			0.05			0.03			0.07
REVERSAL OF LT TAX LIABILITY		(0.01	)		-			(0.02	)		-
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD		(0.02	)		(0.01	)		(0.02	)		(0.02	)
GAIN FROM SALE OF BUILDINGS (NET OF TAX)		(0.01	)		(0.01	)		(0.02	)		(0.02	)
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	0.74		$	0.79		$	2.04		$	1.91
OPERATING INCOME
GAAP OPERATING INCOME	$	28,341		$	27,877		$	66,366		$	71,127
LITIGATION CHARGE		-			-			10,650			-
RESTRUCTURING AND INTEGRATION EXPENSES		343			1,913			1,069			2,531
OTHER INCOME, NET		(268	)		(324	)		(801	)		(766	)
NON-GAAP OPERATING INCOME	$	28,416		$	29,466		$	77,284		$	72,892

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS AND OPERATING INCOME 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.

Condensed Consolidated Balance Sheets

(In thousands)
	September 30,		December 31,
	2014		2013
	(Unaudited)
ASSETS
CASH	$	10,585	$	5,559
ACCOUNTS RECEIVABLE, GROSS		152,322		132,170
ALLOWANCE FOR DOUBTFUL ACCOUNTS		6,691		6,969
ACCOUNTS RECEIVABLE, NET		145,631		125,201
INVENTORIES		276,331		269,447
OTHER CURRENT ASSETS		50,770		45,870
TOTAL CURRENT ASSETS		483,317		446,077
PROPERTY, PLANT AND EQUIPMENT, NET		64,131		63,646
GOODWILL AND OTHER INTANGIBLES, NET		90,670		72,866
OTHER ASSETS		53,688		32,934
TOTAL ASSETS	$	691,806	$	615,523
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE	$	59,249	$	21,406
CURRENT PORTION OF LONG TERM DEBT		19		59
ACCOUNTS PAYABLE		71,648		71,469
ACCRUED CUSTOMER RETURNS		40,062		31,464
OTHER CURRENT LIABILITIES		98,971		95,918
TOTAL CURRENT LIABILITIES		269,949		220,316
LONG-TERM DEBT		3		16
ACCRUED ASBESTOS LIABILITIES		34,225		23,919
OTHER LIABILITIES		21,295		21,840
TOTAL LIABILITIES		325,472		266,091
TOTAL STOCKHOLDERS' EQUITY		366,334		349,432
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	691,806	$	615,523	��

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)
	NINE MONTHS ENDED
	SEPTEMBER 30,
	2014			2013
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS	$	31,931		$	42,514
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION		12,889			13,203
OTHER		9,188			9,843
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE		(17,467	)		(43,990	)
INVENTORY		(3,511	)		(5,345	)
ACCOUNTS PAYABLE		(3,425	)		(450	)
OTHER		3,078			17,876
NET CASH PROVIDED BY OPERATING ACTIVTIES		32,683			33,651
CASH FLOWS FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES		(9,340	)		(8,467	)
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES		(37,726	)		(12,760	)
OTHER INVESTING ACTIVITIES		21			(596	)
NET CASH USED IN INVESTING ACTIVITIES		(47,045	)		(21,823	)
CASH FLOWS FROM FINANCING ACTIVITIES
NET CHANGE IN DEBT		37,790			(8,356	)
PURCHASE OF TREASURY STOCK		(9,487	)		(1,672	)
DIVIDENDS PAID		(8,929	)		(7,566	)
OTHER FINANCING ACTIVITIES		1,947			3,350
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		21,321			(14,244	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(1,933	)		(561	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		5,026			(2,977	)
CASH AND CASH EQUIVALENTS at beginning of Period		5,559			13,074
CASH AND CASH EQUIVALENTS at end of Period	$	10,585		$	10,097