Standard Motor Products (SMP) 8-K Second Quarter 2018 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

Second Quarter 2018 Results and a Quarterly Dividend

New York, NY, July 26, 2018......Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and six months ending June 30, 2018.

Consolidated net sales for the second quarter of 2018 were $286.6 million, compared to consolidated net sales of $312.7 million during the comparable quarter in 2017. Earnings from continuing operations for the second quarter of 2018 were $16.8 million or 73 cents per diluted share, compared to $18.3 million or 78 cents per diluted share in the second quarter of 2017. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the second quarter of 2018 were $17 million or 74 cents per diluted share, compared to $18.8 million or 81 cents per diluted share in the second quarter of 2017.

37-18 Northern Blvd., Long Island City, NY  11101

(718) 392-0200

www.smpcorp.com

Consolidated net sales for the six month period ended June 30, 2018, were $548.5 million, compared to consolidated net sales of $595.1 million during the comparable period in 2017.  Earnings from continuing operations for the six month period ended June 30, 2018, were $25.4 million or $1.11 per diluted share, compared to $34.6 million or $1.48 per diluted share in the comparable period of 2017.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the six months ended June 30, 2018, and 2017 were $27.5 million or $1.20 per diluted share and $36 million or $1.54 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are obviously not pleased with our financial results so far this year. However, as we said in our last conference call, the shortfall was the result of temporary or timing-related issues, which were expected to continue into the second quarter.  We anticipate improvement over the balance of the year as these issues move behind us.

“Engine Management sales were down for both the quarter and the half. A portion of the decrease stems from our Wire and Cable business, which is an older technology used on fewer cars, and is experiencing, as anticipated, a gradual decline.

“The balance of the shortfall is related to large pipeline orders placed in the first half of 2017 by certain accounts, which were not repeated this year. Excluding these pipelines, our Engine Management business experienced increases in the low single digits, in line with our long term forecast for the division.  Meanwhile, our customers are reporting increases in Engine Management sell-through, showing sequential improvement over the last few quarters, which bodes well for the future.

“As stated in our first quarter commentary, Engine Management gross margin continues to be impacted by temporary costs associated with plant moves. The largest of these is the transfer of General Cable’s ignition wire assembly operation from Nogales, Mexico to Reynosa, Mexico, which has required the hiring and training of hundreds new employees. We are almost fully staffed, and have begun to see improvement in efficiencies as these new employees gain experience.

“Turning to Temperature Control, sales remained depressed through April and May, the result of a poor selling season in 2017 followed by a cool early spring. However, in mid-May, the weather finally turned warm, and we began to see a large influx of orders in June. A portion of these were shipped in June, with the balance carrying over into July.

“Due to the continuing warm weather, our customers are experiencing substantial POS increases over 2017. Incoming business remains robust, and we anticipate healthy Temperature Control sales in the third quarter.

“As expected, our Temperature Control gross margins bounced back in the second quarter, and with sales remaining strong, we anticipate this to continue for the balance of the year.

“Finally, a point about tariffs. As with much of our industry, certain of our products are included in the tariffs recently applied to imports from China. We are confident that we will be able to pass the increases on to our customers.

“To summarize, while we are not satisfied with our results for the first six months, with the steps we have taken, and with most of the one-time events behind us, we are optimistic for the balance of the year.”

The Board of Directors has approved payment of a quarterly dividend of 21 cents per share on the common stock outstanding. The dividend will be paid on September 4, 2018 to stockholders of record on August 15, 2018.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, July 26, 2018.  The dial-in number is 866-342-8591 (domestic) or 203-518-9822 (international). The playback number is 800-839-2434 (domestic) or 402-220-7211 (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 JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
NET SALES	$	286,636		$	312,729		$	548,462		$	595,107
COST OF SALES		205,347			222,063			394,584			420,331
GROSS PROFIT		81,289			90,666			153,878			174,776
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		57,750			60,346			115,467			117,763
RESTRUCTURING AND INTEGRATION EXPENSES		231			1,235			3,067			2,782
OTHER INCOME, NET		42			314			313			630
OPERATING INCOME		23,350			29,399			35,657			54,861
OTHER NON-OPERATING INCOME, NET		480			1,010			449			1,890
INTEREST EXPENSE		1,251			722			1,883			1,190
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		22,579			29,687			34,223			55,561
PROVISION FOR INCOME TAXES		5,752			11,426			8,799			20,933
EARNINGS FROM CONTINUING OPERATIONS		16,827			18,261			25,424			34,628
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(882	)		(497	)		(1,490	)		(1,130	)
NET EARNINGS	$	15,945		$	17,764		$	23,934		$	33,498
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS	$	0.75		$	0.80		$	1.13		$	1.52
DISCONTINUED OPERATION		(0.04	)		(0.02	)		(0.07	)		(0.05	)
NET EARNINGS PER COMMON SHARE - BASIC	$	0.71		$	0.78		$	1.06		$	1.47
DILUTED EARNINGS FROM CONTINUING OPERATIONS	$	0.73		$	0.78		$	1.11		$	1.48
DISCONTINUED OPERATION		(0.04	)		(0.02	)		(0.07	)		(0.04	)
NET EARNINGS PER COMMON SHARE - DILUTED	$	0.69		$	0.76		$	1.04		$	1.44
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		22,471,428			22,820,079			22,484,894			22,833,263
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		22,958,469			23,329,082			22,962,049			23,332,480

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income

(In thousands)

	THREE MONTHS ENDED										SIX MONTHS ENDED
	JUNE 30,										JUNE 30,
	2018					2017					2018					2017
	(Unaudited)										(Unaudited)
Revenues
Ignition, Emission and Fuel System Parts	$	162,462				$	178,105				$	323,539				$	343,258
Wire and Cable		40,967					45,244					79,378					91,405
Engine Management		203,429					223,349					402,917					434,663
Compressors		46,940					49,644					76,838					87,545
Other Climate Control Parts		33,430					37,747					63,763					70,136
Temperature Control		80,370					87,391					140,601					157,681
All Other		2,837					1,989					4,944					2,763
Revenues	$	286,636				$	312,729				$	548,462				$	595,107
Gross Margin
Engine Management	$	57,782		28.4	%	$	65,599		29.4	%	$	114,252		28.4	%	$	129,723		29.8	%
Temperature Control		20,800		25.9	%		23,111		26.4	%		34,467		24.5	%		40,818		25.9	%
All Other		2,707					1,956					5,159					4,235
Gross Margin	$	81,289		28.4	%	$	90,666		29.0	%	$	153,878		28.1	%	$	174,776		29.4	%
Selling, General & Administrative
Engine Management	$	34,598		17.0	%	$	38,180		17.1	%	$	70,862		17.6	%	$	74,208		17.1	%
Temperature Control		15,721		19.6	%		14,544		16.6	%		28,550		20.3	%		27,550		17.5	%
All Other		7,431					7,622					16,055					16,005
Selling, General & Administrative	$	57,750		20.1	%	$	60,346		19.3	%	$	115,467		21.1	%	$	117,763		19.8	%
Operating Income
Engine Management	$	23,184		11.4	%	$	27,419		12.3	%	$	43,390		10.8	%	$	55,515		12.8	%
Temperature Control		5,079		6.3	%		8,567		9.8	%		5,917		4.2	%		13,268		8.4	%
All Other		(4,724	)				(5,666	)				(10,896	)				(11,770	)
Subtotal		23,539		8.2	%		30,320		9.7	%		38,411		7.0	%		57,013		9.6	%
Restructuring & Integration		(231	)	-0.1	%		(1,235	)	-0.4	%		(3,067	)	-0.6	%		(2,782	)	-0.5	%
Other Income, Net		42		0.0	%		314		0.1	%		313		0.1	%		630		0.1	%
Operating Income	$	23,350		8.1	%	$	29,399		9.4	%	$	35,657		6.5	%	$	54,861		9.2	%

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

	THREE MONTHS ENDED						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS
GAAP EARNINGS FROM CONTINUING OPERATIONS	$	16,827		$	18,261		$	25,424		$	34,628
RESTRUCTURING AND INTEGRATION EXPENSES		231			1,235			3,067			2,782
GAIN FROM SALE OF BUILDINGS		-			(262	)		(218	)		(524	)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		(60	)		(389	)		(741	)		(903	)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS	$	16,998		$	18,845		$	27,532		$	35,983
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	0.73		$	0.78		$	1.11		$	1.48
RESTRUCTURING AND INTEGRATION EXPENSES		0.01			0.05			0.13			0.12
GAIN FROM SALE OF BUILDINGS		-			(0.01	)		(0.01	)		(0.02	)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		-			(0.01	)		(0.03	)		(0.04	)
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	0.74		$	0.81		$	1.20		$	1.54
OPERATING INCOME
GAAP OPERATING INCOME	$	23,350		$	29,399		$	35,657		$	54,861
RESTRUCTURING AND INTEGRATION EXPENSES		231			1,235			3,067			2,782
OTHER INCOME, NET		(42	)		(314	)		(313	)		(630	)
NON-GAAP OPERATING INCOME	$	23,539		$	30,320		$	38,411		$	57,013

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)

	June 30, 2018		December 31, 2017
	(Unaudited)
ASSETS
CASH	$	18,573	$	17,323
ACCOUNTS RECEIVABLE, GROSS		179,394		145,024
ALLOWANCE FOR DOUBTFUL ACCOUNTS		5,533		4,967
ACCOUNTS RECEIVABLE, NET		173,861		140,057
INVENTORIES		331,453		326,411
UNRETURNED CUSTOMER INVENTORIES		18,246		-
OTHER CURRENT ASSETS		16,458		12,300
TOTAL CURRENT ASSETS		558,591		496,091
PROPERTY, PLANT AND EQUIPMENT, NET		91,277		89,103
GOODWILL		67,360		67,413
OTHER INTANGIBLES, NET		52,216		56,261
DEFERRED INCOME TAXES		31,842		32,420
INVESTMENT IN UNCONSOLIDATED AFFILIATES		34,725		31,184
OTHER ASSETS		15,934		15,095
TOTAL ASSETS	$	851,945	$	787,567
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE	$	88,528	$	57,000
CURRENT PORTION OF OTHER DEBT		5,169		4,699
ACCOUNTS PAYABLE		94,988		77,990
ACCRUED CUSTOMER RETURNS		42,536		35,916
ACCRUED CORE LIABILITY		26,138		11,899
OTHER CURRENT LIABILITIES		84,394		98,393
TOTAL CURRENT LIABILITIES		341,753		285,897
OTHER LONG-TERM DEBT		34		79
ACCRUED ASBESTOS LIABILITIES		32,339		33,376
OTHER LIABILITIES		15,449		14,561
TOTAL LIABILITIES		389,575		333,913
TOTAL STOCKHOLDERS' EQUITY		462,370		453,654
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	851,945	$	787,567

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

	SIX MONTHS ENDED
	JUNE 30,
	2018			2017
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS	$	23,934		$	33,498
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION		11,706			11,316
OTHER		8,641			7,498
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE		(34,524	)		(53,069	)
INVENTORIES		(6,650	)		(27,048	)
ACCOUNTS PAYABLE		15,684			17,475
PREPAID EXPENSES AND OTHER CURRENT ASSETS		(2,988	)		(943	)
SUNDRY PAYABLES AND ACCRUED EXPENSES		(9,115	)		5,663
OTHER		(2,502	)		(1,225	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		4,186			(6,835	)
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES		(8,572	)		-
CAPITAL EXPENDITURES		(11,325	)		(8,843	)
OTHER INVESTING ACTIVITIES		16			2
NET CASH USED IN INVESTING ACTIVITIES		(19,881	)		(8,841	)
CASH FLOWS FROM FINANCING ACTIVITIES
NET CHANGE IN DEBT		32,287			24,113
PURCHASE OF TREASURY STOCK		(7,640	)		(5,176	)
DIVIDENDS PAID		(9,437	)		(8,674	)
OTHER FINANCING ACTIVITIES		1,990			1,488
NET CASH PROVIDED BY FINANCING ACTIVITIES		17,200			11,751
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(255	)		518
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,250			(3,407	)
CASH AND CASH EQUIVALENTS at beginning of Period		17,323			19,796
CASH AND CASH EQUIVALENTS at end of Period	$	18,573		$	16,389