Standard Motor Products (SMP) 8-K Third 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

Third Quarter 2018 Results and a Quarterly Dividend

New York, NY, October 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 nine months ending September 30, 2018.

Consolidated net sales for the third quarter of 2018 were $296.6 million, compared to consolidated net sales of $281.1 million during the comparable quarter in 2017. Earnings from continuing operations for the third quarter of 2018 were $19.3 million or 84 cents per diluted share, compared to $17.1 million or 74 cents per diluted share in the third 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 third quarter of 2018 were $19.1 million or 83 cents per diluted share, compared to $17.2 million or 74 cents per diluted share in the third quarter of 2017.

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, 2018, were $845.1 million, compared to consolidated net sales of $876.2 million during the comparable period in 2017.  Earnings from continuing operations for the nine month period ended September 30, 2018, were $44.7 million or $1.95 per diluted share, compared to $51.7 million or $2.22 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 nine months ended September 30, 2018, and 2017 were $46.7 million or $2.03 per diluted share and $53.2 million or $2.28 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products’ Chief Executive Officer and President, stated, “We are pleased with our performance in the quarter. After a challenging first half, which was largely impacted by temporary or timing-related issues, our third quarter showed positive signs of recovery.  We believe this trend will continue for the balance of the year.

“Engine Management sales were essentially flat for the quarter. Our Wire and Cable product line, which is in gradual decline, was down 6.7%, while the balance of our Engine Management business showed an increase of 2.3%. Both of these trends are in line with our stated expectations. Meanwhile, excluding Wire and Cable, our customers have been reporting solid POS gains all year, which in the third quarter were up in the mid-single digits over 2017.

“Our Engine Management gross margin in the third quarter showed a 50 basis point improvement over the second quarter, as we are now beginning to see the gradual improvement in our efficiencies as we fully integrate the General Cable operation into our Reynosa, Mexico facility. While there remains much to be done, we are pleased to see this trending in the right direction.

“Year-to-date our Engine Management net sales were 4.9% below 2017 overall, and 3.2% below 2017 excluding Wire and Cable. As previously reported, the shortfall in the first half of the year was due to a few customers placing large pipeline orders in 2017 that were not repeated this year.

“Turning to Temperature Control, sales rebounded very strongly in the quarter, up 18.4% from last year. This was the result of a warm summer, compared to a mild summer in 2017. Sales year-to-date are essentially flat as compared to 2017. As previously reported, our first half sales lagged 2017 by almost 11%, as our customers entered 2018 with above normal inventory levels, and therefore placed substantially lower pre-season orders this year.

“The warm weather continued into autumn, which bodes well not just for this year’s sales, but for next year’s pre-season orders as well, as we expect our customers to end the year with lower than typical inventories.

“Temperature Control gross margin increased to 27.6% for the quarter, up from 26.8% from last year. This reflects the fact that we are now essentially fully low cost in our manufacturing, having exited our Texas operations in 2017. However, much of the gross margin improvement was negated by incremental SG&A associated with higher than usual distribution expenses. These increases were due to a combination of significant additional labor costs to keep up with the surge in sales, as well as start-up costs related to the installation of a new automation project in our distribution center.  We believe this project will be complete and fully optimized by year-end, and we will see substantial improvement next year.

“In closing, while we recognize that there is still a great deal of work ahead of us, we are pleased with the quarter, and feel that the temporary issues that have recently had a negative impact on us are either waning or are in the past. Coupled with strong signs of customer sell-through and industry health in general, we are excited about the future.”

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 December 3, 2018 to stockholders of record on November 15, 2018.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, October 26, 2018.  The dial-in number is 866-342-8591 (domestic) or 203-518-9713 (international). The playback number is 800-839-5125 (domestic) or 402-220-1502 (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 SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
NET SALES	$	296,619		$	281,058		$	845,081		$	876,165
COST OF SALES		209,313			198,523			603,897			618,854
GROSS PROFIT		87,306			82,535			241,184			257,311
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		60,137			54,963			175,604			172,726
RESTRUCTURING AND INTEGRATION EXPENSES		6			1,132			3,073			3,914
OTHER INCOME, NET		15			316			328			946
OPERATING INCOME		27,178			26,756			62,835			81,617
OTHER NON-OPERATING INCOME, NET		351			482			800			2,372
INTEREST EXPENSE		1,254			595			3,137			1,785
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		26,275			26,643			60,498			82,204
PROVISION FOR INCOME TAXES		7,002			9,535			15,801			30,468
EARNINGS FROM CONTINUING OPERATIONS		19,273			17,108			44,697			51,736
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(3,524	)		(3,983	)		(5,014	)		(5,113	)
NET EARNINGS	$	15,749		$	13,125		$	39,683		$	46,623
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS	$	0.86		$	0.75		$	1.99		$	2.27
DISCONTINUED OPERATION		(0.16	)		(0.17	)		(0.22	)		(0.22	)
NET EARNINGS PER COMMON SHARE - BASIC	$	0.70		$	0.58		$	1.77		$	2.05
DILUTED EARNINGS FROM CONTINUING OPERATIONS	$	0.84		$	0.74		$	1.95		$	2.22
DISCONTINUED OPERATION		(0.15	)		(0.17	)		(0.22	)		(0.22	)
NET EARNINGS PER COMMON SHARE - DILUTED	$	0.69		$	0.57		$	1.73		$	2.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		22,424,962			22,660,157			22,464,697			22,774,927
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		22,938,925			23,174,700			22,954,649			23,287,052

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income

(In thousands)

	THREE MONTHS ENDED SEPTEMBER 30,										NINE MONTHS ENDED SEPTEMBER 30,
	2018					2017					2018					2017
	(Unaudited)										(Unaudited)
Revenues
Ignition, Emission and Fuel System Parts	$	159,101				$	155,544				$	482,640				$	498,802
Wire and Cable		38,469					41,232					117,847					132,637
Engine Management		197,570					196,776					600,487					631,439
Compressors		54,842					44,733					131,680					132,278
Other Climate Control Parts		41,237					36,427					105,000					106,563
Temperature Control		96,079					81,160					236,680					238,841
All Other		2,970					3,122					7,914					5,885
Revenues	$	296,619				$	281,058				$	845,081				$	876,165
Gross Margin
Engine Management	$	57,188		28.9	%	$	57,808		29.4	%	$	171,440		28.6	%	$	187,531		29.7	%
Temperature Control		26,523		27.6	%		21,721		26.8	%		60,990		25.8	%		62,539		26.2	%
All Other		3,595					3,006					8,754					7,241
Gross Margin	$	87,306		29.4	%	$	82,535		29.4	%	$	241,184		28.5	%	$	257,311		29.4	%
Selling, General & Administrative
Engine Management	$	35,553		18.0	%	$	34,289		17.4	%	$	106,415		17.7	%	$	108,497		17.2	%
Temperature Control		17,961		18.7	%		13,665		16.8	%		46,511		19.7	%		41,215		17.3	%
All Other		6,623					7,009					22,678					23,014
Selling, General & Administrative	$	60,137		20.3	%	$	54,963		19.6	%	$	175,604		20.8	%	$	172,726		19.7	%
Operating Income
Engine Management	$	21,635		11.0	%	$	23,519		12.0	%	$	65,025		10.8	%	$	79,034		12.5	%
Temperature Control		8,562		8.9	%		8,056		9.9	%		14,479		6.1	%		21,324		8.9	%
All Other		(3,028	)				(4,003	)				(13,924	)				(15,773	)
Subtotal		27,169		9.2	%		27,572		9.8	%		65,580		7.8	%		84,585		9.7	%
Restructuring & Integration		(6	)	0.0	%		(1,132	)	-0.4	%		(3,073	)	-0.4	%		(3,914	)	-0.4	%
Other Income, Net		15		0.0	%		316		0.1	%		328		0.0	%		946		0.1	%
Operating Income	$	27,178		9.2	%	$	26,756		9.5	%	$	62,835		7.4	%	$	81,617		9.3	%

STANDARD MOTOR PRODUCTS, INC.

Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

	THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS
GAAP EARNINGS FROM CONTINUING OPERATIONS	$	19,273		$	17,108		$	44,697		$	51,736
RESTRUCTURING AND INTEGRATION EXPENSES		6			1,132			3,073			3,914
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD		(144	)		(463	)		(144	)		(463	)
GAIN FROM SALE OF BUILDINGS		-			(262	)		(218	)		(786	)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		(1	)		(348	)		(742	)		(1,251	)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS	$	19,134		$	17,167		$	46,666		$	53,150
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	0.84		$	0.74		$	1.95		$	2.22
RESTRUCTURING AND INTEGRATION EXPENSES		-			0.05			0.13			0.16
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD		(0.01	)		(0.02	)		(0.01	)		(0.02	)
GAIN FROM SALE OF BUILDINGS		-			(0.01	)		(0.01	)		(0.03	)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		-			(0.02	)		(0.03	)		(0.05	)
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS	$	0.83		$	0.74		$	2.03		$	2.28
OPERATING INCOME
GAAP OPERATING INCOME	$	27,178		$	26,756		$	62,835		$	81,617
RESTRUCTURING AND INTEGRATION EXPENSES		6			1,132			3,073			3,914
OTHER INCOME, NET		(15	)		(316	)		(328	)		(946	)
NON-GAAP OPERATING INCOME	$	27,169		$	27,572		$	65,580		$	84,585

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)

	September 30, 2018		December 31, 2017
	(Unaudited)
ASSETS
CASH	$	27,321	$	17,323
ACCOUNTS RECEIVABLE, GROSS		168,846		145,024
ALLOWANCE FOR DOUBTFUL ACCOUNTS		5,537		4,967
ACCOUNTS RECEIVABLE, NET		163,309		140,057
INVENTORIES		318,420		326,411
UNRETURNED CUSTOMER INVENTORY		21,295		-
OTHER CURRENT ASSETS		11,681		12,300
TOTAL CURRENT ASSETS		542,026		496,091
PROPERTY, PLANT AND EQUIPMENT, NET		91,735		89,103
GOODWILL		67,387		67,413
OTHER INTANGIBLES, NET		50,263		56,261
DEFERRED INCOME TAXES		34,907		32,420
INVESTMENT IN UNCONSOLIDATED AFFILIATES		33,785		31,184
OTHER ASSETS		16,284		15,095
TOTAL ASSETS	$	836,387	$	787,567
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE	$	45,000	$	57,000
CURRENT PORTION OF OTHER DEBT		5,980		4,699
ACCOUNTS PAYABLE		84,031		77,990
ACCRUED CUSTOMER RETURNS		53,717		35,916
ACCRUED CORE LIABILITY		30,002		11,899
OTHER CURRENT LIABILITIES		90,221		98,393
TOTAL CURRENT LIABILITIES		308,951		285,897
OTHER LONG-TERM DEBT		26		79
ACCRUED ASBESTOS LIABILITIES		35,319		33,376
OTHER LIABILITIES		18,039		14,561
TOTAL LIABILITIES		362,335		333,913
TOTAL STOCKHOLDERS' EQUITY		474,052		453,654
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	836,387	$	787,567

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

	NINE MONTHS ENDED SEPTEMBER 30,
	2018			2017
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS	$	39,683		$	46,623
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION		17,745			17,439
OTHER		12,220			14,065
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE		(23,428	)		(27,753	)
INVENTORY		2,761			(18,746	)
ACCOUNTS PAYABLE		5,193			90
PREPAID EXPENSES AND OTHER CURRENT ASSETS		1,202			(4,805	)
SUNDRY PAYABLES AND ACCRUED EXPENSES		12,828			8,728
OTHER		(619	)		1,120
NET CASH PROVIDED BY OPERATING ACTIVITIES		67,585			36,761
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES		(9,852	)		-
CAPITAL EXPENDITURES		(15,633	)		(17,710	)
OTHER INVESTING ACTIVITIES		37			6
NET CASH USED IN INVESTING ACTIVITIES		(25,448	)		(17,704	)
CASH FLOWS FROM FINANCING ACTIVITIES
NET CHANGE IN DEBT		(10,537	)		18,153
PURCHASE OF TREASURY STOCK		(9,271	)		(20,000	)
DIVIDENDS PAID		(14,144	)		(12,990	)
OTHER FINANCING ACTIVITIES		1,382			658
NET CASH USED IN FINANCING ACTIVITIES		(32,570	)		(14,179	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		431			724
NET INCREASE IN CASH AND CASH EQUIVALENTS		9,998			5,602
CASH AND CASH EQUIVALENTS at beginning of Period		17,323			19,796
CASH AND CASH EQUIVALENTS at end of Period	$	27,321		$	25,398