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
First Quarter 2017 Results and a Quarterly Dividend
New York, NY, May 3, 2017......Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months ending March 31, 2017.
Consolidated net sales for the first quarter of 2017 were $282.4 million, compared to consolidated net sales of $238.9 million during the comparable quarter in 2016. Earnings from continuing operations for the first quarter of 2017 were $16.4 million or 70 cents per diluted share, compared to $12.7 million or 55 cents per diluted share in the first quarter of 2016. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the first quarter of 2017 were $17.1 million or 74 cents per diluted share, compared to $12.6 million or 55 cents per diluted share in the first quarter of 2016.
37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
Mr. Eric P. Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are very pleased with our first quarter results. Compared to the first quarter of 2016, net sales were up 18.2%, net income was ahead 28.9%, and earnings per share from continuing operations, excluding special items, increased from 55 cents to 74 cents, a gain of almost 35%.
“By segment, Engine Management net sales increased 17% from the first quarter of 2016. Excluding the General Cable North American ignition wire set business, which we did not acquire until May 2016, Engine Management net sales were ahead 4%. Additionally, the quarter included pipeline orders from certain customers, who are in the process of increasing the breadth and depth of their inventories.
“Engine Management gross margin dropped to 30.3% vs. 31.7% in the first quarter 2016. This was primarily caused by the lower gross margin in the business acquired from General Cable. We are in the process of relocating this operation from Nogales, Mexico, into our existing wire assembly facility in Reynosa, Mexico. As previously stated, we plan to complete this move by the end of Q1 2018, and expect substantial synergies when the integration is complete. In the meantime, we are incurring additional costs as a result of the transition.
“Our Temperature Control division also had an excellent first quarter, with a sales increase of 23.8%. However, this mostly represents an increase in pre-season stocking orders, which was anticipated, as 2016 was a strong air conditioning year. The key to the 2017 season will be how hot it gets over the next several months.
“Turning to operations, we are in the process of implementing several major moves. In addition to the General Cable integration, mentioned above, we will be relocating the balance of our Grapevine, Texas, operation to Reynosa, Mexico, to be complete by the end of the year, and our electronics plant in Orlando, Florida, to an existing facility in Independence, Kansas, to be complete by mid-2018. These moves will result in significant additional savings. However, because of the effect on our employees, we do not take these moves lightly. Several of the affected employees have already agreed to transfer to other SMP locations, and we are encouraging others to do so. The balance will be treated fairly and equitably as we have always done.
“Finally, we welcome Patrick McClymont to our Board of Directors. Patrick comes to us with a wealth of experience. He has been a Partner and Managing Director of Goldman Sachs, an Executive Vice President and Chief Financial Officer at Sotheby’s, and is currently an Executive Vice President and Chief Financial Officer at IMAX. We are confident he will be a valuable member of our Board.”
The Board of Directors has approved payment of a quarterly dividend of nineteen cents per share on the common stock outstanding. The dividend will be paid on June 1, 2017 to stockholders of record on May 15, 2017.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 3, 2017. The dial-in number is 800-895-1085 (domestic) or 785-424-1055 (international). The playback number is 800-839-9374 (domestic) or 402-220-6087 (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.
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STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31, | ||||||||
| 2017 | 2016 | |||||||
| (Unaudited) | ||||||||
| NET SALES | $ | 282,378 | $ | 238,911 | ||||
| COST OF SALES | 198,268 | 165,915 | ||||||
| GROSS PROFIT | 84,110 | 72,996 | ||||||
| SELLING, GENERAL & ADMINISTRATIVE EXPENSES | 57,360 | 52,998 | ||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,547 | 241 | ||||||
| OTHER INCOME, NET | 316 | 262 | ||||||
| OPERATING INCOME | 25,519 | 20,019 | ||||||
| OTHER NON-OPERATING INCOME, NET | 823 | 333 | ||||||
| INTEREST EXPENSE | 468 | 311 | ||||||
| EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | 25,874 | 20,041 | ||||||
| PROVISION FOR INCOME TAXES | 9,507 | 7,385 | ||||||
| EARNINGS FROM CONTINUING OPERATIONS | 16,367 | 12,656 | ||||||
| LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES | (633 | ) | (452 | ) | ||||
| NET EARNINGS | $ | 15,734 | $ | 12,204 | ||||
| NET EARNINGS PER COMMON SHARE: | ||||||||
| BASIC EARNINGS FROM CONTINUING OPERATIONS | $ | 0.72 | $ | 0.56 | ||||
| DISCONTINUED OPERATION | (0.03 | ) | (0.02 | ) | ||||
| NET EARNINGS PER COMMON SHARE - BASIC | $ | 0.69 | $ | 0.54 | ||||
| DILUTED EARNINGS FROM CONTINUING OPERATIONS | $ | 0.70 | $ | 0.55 | ||||
| DISCONTINUED OPERATION | (0.03 | ) | (0.02 | ) | ||||
| NET EARNINGS PER COMMON SHARE - DILUTED | $ | 0.67 | $ | 0.53 | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES | 22,846,595 | 22,642,312 | ||||||
| WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES | 23,313,773 | 22,944,947 | ||||||
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
(In thousands)
THREE MONTHS ENDED MARCH 31, | ||||||||||||
| 2017 | 2016 | |||||||||||
| (Unaudited) | ||||||||||||
Revenues | ||||||||||||
| Engine Management | $ | 211,314 | $ | 180,681 | ||||||||
| Temperature Control | 70,290 | 56,766 | ||||||||||
| All Other | 774 | 1,464 | ||||||||||
| $ | 282,378 | $ | 238,911 | |||||||||
Gross Margin | ||||||||||||
| Engine Management | $ | 64,124 | 30.3% | $ | 57,276 | 31.7% | ||||||
| Temperature Control | 17,707 | 25.2% | 14,090 | 24.8% | ||||||||
| All Other | 2,279 | 1,630 | ||||||||||
| $ | 84,110 | 29.8% | $ | 72,996 | 30.6% | |||||||
Selling, General & Administrative | ||||||||||||
| Engine Management | $ | 36,028 | 17.0% | $ | 33,057 | 18.3% | ||||||
| Temperature Control | 13,006 | 18.5% | 11,694 | 20.6% | ||||||||
| All Other | 8,326 | 8,247 | ||||||||||
| $ | 57,360 | 20.3% | $ | 52,998 | 22.2% | |||||||
Operating Income | ||||||||||||
| Engine Management | $ | 28,096 | 13.3% | $ | 24,219 | 13.4% | ||||||
| Temperature Control | 4,701 | 6.7% | 2,396 | 4.2% | ||||||||
| All Other | (6,047 | ) | (6,617 | ) | ||||||||
| 26,750 | 9.5% | 19,998 | 8.4% | |||||||||
| Restructuring & Integration | (1,547 | ) | -0.5% | (241 | ) | -0.1% | ||||||
| Other Income, Net | 316 | 0.1% | 262 | 0.1% | ||||||||
| $ | 25,519 | 9.0% | $ | 20,019 | 8.4% | |||||||
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31, | ||||||||
| 2017 | 2016 | |||||||
| (Unaudited) | ||||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS | $ | 16,367 | $ | 12,656 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,547 | 241 | ||||||
| GAIN FROM SALE OF BUILDINGS | (262 | ) | (262 | ) | ||||
| INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | (514 | ) | 9 | |||||
| NON-GAAP EARNINGS FROM CONTINUING OPERATIONS | $ | 17,138 | $ | 12,644 | ||||
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | ||||||||
| GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ | 0.70 | $ | 0.55 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 0.07 | 0.01 | ||||||
| GAIN FROM SALE OF BUILDINGS | (0.01 | ) | (0.01 | ) | ||||
| INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | (0.02 | ) | - | |||||
| NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ | 0.74 | $ | 0.55 | ||||
OPERATING INCOME | ||||||||
| GAAP OPERATING INCOME | $ | 25,519 | $ | 20,019 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,547 | 241 | ||||||
| OTHER INCOME, NET | (316 | ) | (262 | ) | ||||
| NON-GAAP OPERATING INCOME | $ | 26,750 | $ | 19,998 | ||||
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)
March 31, 2017 | December 31, 2016 | |||||||
| (Unaudited) | ||||||||
ASSETS | ||||||||
| CASH | $ | 15,581 | $ | 19,796 | ||||
| ACCOUNTS RECEIVABLE, GROSS | 185,257 | 139,055 | ||||||
| ALLOWANCE FOR DOUBTFUL ACCOUNTS | 5,101 | 4,425 | ||||||
| ACCOUNTS RECEIVABLE, NET | 180,156 | 134,630 | ||||||
| INVENTORIES | 331,818 | 312,477 | ||||||
| OTHER CURRENT ASSETS | 6,901 | 7,318 | ||||||
| TOTAL CURRENT ASSETS | 534,456 | 474,221 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 79,129 | 78,499 | ||||||
| GOODWILL | 67,310 | 67,231 | ||||||
| OTHER INTANGIBLES, NET | 62,007 | 64,056 | ||||||
| DEFERRED INCOME TAXES | 50,965 | 51,127 | ||||||
| OTHER ASSETS | 35,518 | 33,563 | ||||||
| TOTAL ASSETS | $ | 829,385 | $ | 768,697 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| NOTES PAYABLE | $ | 82,045 | $ | 54,812 | ||||
| CURRENT PORTION OF LONG TERM DEBT | 44 | 43 | ||||||
| ACCOUNTS PAYABLE | 101,989 | 83,878 | ||||||
| ACCRUED CUSTOMER RETURNS | 47,692 | 40,176 | ||||||
| OTHER CURRENT LIABILITIES | 96,114 | 104,932 | ||||||
| TOTAL CURRENT LIABILITIES | 327,884 | 283,841 | ||||||
| LONG-TERM DEBT | 111 | 120 | ||||||
| ACCRUED ASBESTOS LIABILITIES | 30,353 | 31,328 | ||||||
| OTHER LIABILITIES | 13,464 | 12,380 | ||||||
| TOTAL LIABILITIES | 371,812 | 327,669 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 457,573 | 441,028 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 829,385 | $ | 768,697 | ||||
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
THREE MONTHS ENDED MARCH 31, | ||||||||
| 2017 | 2016 | |||||||
| (Unaudited) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| NET EARNINGS | $ | 15,734 | $ | 12,204 | ||||
| ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH | ||||||||
| PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||||||||
| DEPRECIATION AND AMORTIZATION | 5,631 | 4,373 | ||||||
| OTHER | 3,870 | 3,323 | ||||||
| CHANGE IN ASSETS AND LIABILITIES: | ||||||||
| ACCOUNTS RECEIVABLE | (45,325 | ) | (19,281 | ) | ||||
| INVENTORY | (19,344 | ) | (14,621 | ) | ||||
| ACCOUNTS PAYABLE | 13,664 | 11,431 | ||||||
| OTHER | (1,114 | ) | 1,236 | |||||
| NET CASH USED IN OPERATING ACTIVITIES | (26,884 | ) | (1,335 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| CAPITAL EXPENDITURES | (3,234 | ) | (4,099 | ) | ||||
| OTHER INVESTING ACTIVITIES | 2 | 2 | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | (3,232 | ) | (4,097 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| NET CHANGE IN DEBT | 27,224 | 2,148 | ||||||
| PURCHASE OF TREASURY STOCK | (1,267 | ) | (377 | ) | ||||
| DIVIDENDS PAID | (4,338 | ) | (3,849 | ) | ||||
| OTHER FINANCING ACTIVITIES | 3,650 | 1,839 | ||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 25,269 | (239 | ) | |||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | 632 | 231 | ||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (4,215 | ) | (5,440 | ) | ||||
| CASH AND CASH EQUIVALENTS at beginning of period | 19,796 | 18,800 | ||||||
| CASH AND CASH EQUIVALENTS at end of period | $ | 15,581 | $ | 13,360 | ||||