Standard Motor Products (SMP) 8-K Second Quarter 2011 Results and a Quarterly Dividend

For Immediate Release

For more information, contact:

James J. Burke

Standard Motor Products, Inc.

(718) 392-0200

Jennifer Tio

Maximum Marketing Services, Inc.

(312) 226-4111 x2449

Jennifer.tio@maxmarketing.com

Standard Motor Products, Inc. Announces

Second Quarter 2011 Results and a Quarterly Dividend

New York, NY, July 27, 2011......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 ended June 30, 2011.

Consolidated net sales for the second quarter of 2011 were $244 million, compared to consolidated net sales of $231 million during the comparable quarter in 2010.  Earnings from continuing operations for the second quarter of 2011 were $13.7 million or 59 cents per diluted share, compared to $8.1 million or 35 cents per diluted share in the second quarter of 2010. 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 2011 were $11.4 million or 49 cents per diluted share, compared to $8.7 million or 38 cents per diluted share in the second quarter of 2010.

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, 2011 were $464.2 million, compared to consolidated net sales of $410.4 million during the comparable period in 2010.  Earnings from continuing operations for the six month period ended June 30, 2011 were $20.7 million or 90 cents per diluted share, compared to $10.9 million or 48 cents per diluted share in the comparable period of 2010.  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 2011 and 2010 were $18.5 million or 80 cents per diluted share and $11.8 million or 52 cents per diluted share, respectively.

Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “As we forecasted during our first quarter earnings call, our rate of sales increase moderated during the second quarter. Our first quarter increase of 23% benefited from a pre-season ordering program in Temperature Control, plus some buildup in customer inventories in other areas. As these inventories were absorbed, our sales increase in the second quarter moderated to 5.6%, leaving us with a still healthy 13% sales increase for the six month period.

“We continue to reap the benefit of our cost reduction efforts of recent years—moving to low cost manufacturing sites, purchasing product from low cost areas, reducing overhead, and manufacturing products we formerly purchased. As a result, our earnings per share, excluding one time gains, increased to 49 cents for the quarter and 80 cents for the six month period, substantially ahead of the comparable periods last year.

“Cash flow remains strong. Despite the acquisition of the BLD Engine Control business ($27 million), and the redemption of the remaining convertible debentures ($12.3 million), both of which occurred in the second quarter, our bank borrowings were $2 million below the comparable period of 2010.

“Finally, during the second quarter, we announced that we will be terminating our retiree medical benefits program at the end of 2016. This was a difficult and painful decision, but we felt we had no choice as these costs continue to grow.

“The approximately $23 million postretirement liability at December 2010 has been reduced to approximately $7 million at June 2011 and by 2016 will be reduced below $1 million. Our 2011 second quarter and year-to-date results reflect a one-time curtailment gain of $3.6 million. Excluding the curtailment gain, our postretirement expense is forecasted to be a benefit of $3.7 million in 2011, decreasing to approximately a $1-2 million benefit per year through 2014. In 2015 and 2016 the amortized postretirement expense is forecast to be unfavorable $1-2 million and then be virtually eliminated.”

The Board of Directors has approved payment of a quarterly dividend of seven cents per share on the common stock outstanding. The dividend will be paid on September 1, 2011 to stockholders of record on August 15, 2011.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, July 27, 2011.  The dial in number is 800-895-1085 (domestic) or 785-424-1055 (international). The playback number is 800-283-8217 (domestic) or 402-220-0868 (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						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
NET SALES	$	244,005		$	231,048		$	464,235		$	410,399
COST OF SALES		180,832			172,659			347,910			308,192
GROSS PROFIT		63,173			58,389			116,325			102,207
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		40,016			41,803			80,656			78,468
RESTRUCTURING AND INTEGRATION EXPENSES		125			1,289			468			2,042
OTHER INCOME, NET		262			136			531			516
OPERATING INCOME		23,294			15,433			35,732			22,213
OTHER NON-OPERATING INCOME, NET		176			162			443			180
INTEREST EXPENSE		1,045			2,002			2,402			3,866
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		22,425			13,593			33,773			18,527
PROVISION FOR INCOME TAXES		8,732			5,532			13,069			7,599
EARNINGS FROM CONTINUING OPERATIONS		13,693			8,061			20,704			10,928
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(355	)		(372	)		(659	)		(868	)
NET EARNINGS	$	13,338		$	7,689		$	20,045		$	10,060

NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS	$	0.60		$	0.36		$	0.91		$	0.49
DISCONTINUED OPERATION		(0.02	)		(0.02	)		(0.03	)		(0.04	)
NET EARNINGS PER COMMON SHARE - BASIC	$	0.58		$	0.34		$	0.88		$	0.45
DILUTED EARNINGS FROM CONTINUING OPERATIONS	$	0.59		$	0.35		$	0.90		$	0.48
DISCONTINUED OPERATION		(0.01	)		(0.01	)		(0.03	)		(0.03	)
NET EARNINGS PER COMMON SHARE - DILUTED	$	0.58		$	0.34		$	0.87		$	0.45
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		22,867,323			22,570,886			22,787,337			22,493,031
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		23,196,125			23,529,898			23,438,247			22,584,666

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,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS
GAAP EARNINGS FROM CONTINUING OPERATIONS	$	13,693		$	8,061		$	20,704		$	10,928
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)		75			774			281			1,226
LOSS FROM EUROPE DIVESTITURE (NET OF TAX)		-			-			-			47
POSTRETIRMENT CURTAILMENT GAIN (NET OF TAX)		(2,188	)		-			(2,188	)		-
GAIN FROM SALE OF BUILDINGS (NET OF TAX)		(157	)		(125	)		(315	)		(398	)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS	$	11,423		$	8,710		$	18,482		$	11,803
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS				$	0.35		$	0.90		$	0.48
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX)		-			0.04			0.01			0.06
LOSS FROM EUROPE DIVESTITURE (NET OF TAX)		-			-			-			-
POSTRETIRMENT CURTAILMENT GAIN (NET OF TAX)		(0.09	)		-			(0.09	)		-
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	$	0.49		$	0.38		$	0.80		$	0.52

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 OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH NON-GAAP MEASUREMENTS ARE NOT RECOGNIZED IN ACCORDANCE WITH GENERALLY ACCEPTED OVERALL 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,		December 31,
	2011		2010
	(Unaudited)
ASSETS
CASH	$	13,094	$	12,135
ACCOUNTS RECEIVABLE, GROSS		159,938		111,765
ALLOWANCE FOR DOUBTFUL ACCOUNTS		7,319		6,779
ACCOUNTS RECEIVABLE, NET		152,619		104,986
INVENTORIES		236,451		241,158
ASSETS HELD FOR SALE		216		216
OTHER CURRENT ASSETS		24,079		26,211
TOTAL CURRENT ASSETS		426,459		384,706
PROPERTY, PLANT AND EQUIPMENT, NET		61,240		60,666
GOODWILL AND OTHER INTANGIBLES, NET		31,379		12,487
OTHER ASSETS		25,929		34,942
TOTAL ASSETS	$	545,007	$	492,801
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE	$	67,805	$	52,887
CURRENT PORTION OF LONG TERM DEBT		108		12,402
ACCOUNTS PAYABLE		74,421		49,919
ACCRUED CUSTOMER RETURNS		37,306		23,207
OTHER CURRENT LIABILITIES		78,203		76,416
TOTAL CURRENT LIABILITIES		257,843		214,831
LONG-TERM DEBT		258		307
ACCRUED ASBESTOS LIABILITIES		25,533		24,792
OTHER LIABILITIES		24,247		42,988
TOTAL LIABILITIES		307,881		282,918
TOTAL STOCKHOLDERS' EQUITY		237,126		209,883
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	545,007	$	492,801

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit

(In thousands)
	THREE MONTHS ENDED										SIX MONTHS ENDED
	June 30,										June 30,
	2011					2010					2011					2010
	(unaudited)										(unaudited)
Revenues
Engine Management	$	159,919				$	152,815				$	324,123				$	289,912
Temperature Control		79,715					73,926					133,794					113,941
All Other		4,371					4,307					6,318					6,546
	$	244,005				$	231,048				$	464,235				$	410,399
Gross Margin
Engine Management	$	40,012		25.0	%	$	37,488		24.5	%	$	80,016		24.7	%	$	70,622		24.4	%
Temperature Control		19,646		24.6	%		17,707		24.0	%		29,926		22.4	%		25,960		22.8	%
All Other		3,515					3,194					6,383					5,625
	$	63,173		25.9	%	$	58,389		25.3	%	$	116,325		25.1	%	$	102,207		24.9	%
Selling, General & Administrative
Engine Management	$	26,435		16.5	%	$	26,284		17.2	%	$	51,257		15.8	%	$	49,437		17.1	%
Temperature Control		10,710		13.4	%		10,002		13.5	%		19,765		14.8	%		17,910		15.7	%
All Other		2,871					5,517					9,634					11,121
	$	40,016		16.4	%	$	41,803		18.1	%	$	80,656		17.4	%	$	78,468		19.1	%
Operating Profit
Engine Management	$	13,577		8.5	%	$	11,205		7.3	%	$	28,759		8.9	%	$	21,185		7.3	%
Temperature Control		8,935		11.2	%		7,705		10.4	%		10,161		7.6	%		8,050		7.1	%
All Other		645					(2,324	)				(3,251	)				(5,496	)
		23,157		9.5	%		16,586		7.2	%		35,669		7.7	%		23,739		5.8	%
Restructuring & Integration		(125	)	-0.1	%		(1,289	)	-0.6	%		(468	)	-0.1	%		(2,042	)	-0.5	%
Other Income, Net		262		0.1	%		136		0.1	%		531		0.1	%		516		0.1	%
	$	23,294		9.5	%	$	15,433		6.7	%	$	35,732		7.7	%	$	22,213		5.4	%