Exhibit 99.1
For: Standard Motor Products, Inc.
From: Golin/Harris International
Marlene Wechselblatt
212-373-6000
Standard Motor Products, Inc. Contact:
James J. Burke, Chief Financial Officer
718-392-0200
STANDARD MOTOR PRODUCTS, INC. ANNOUNCES
THIRD QUARTER 2004 RESULTS
New York, NY, November 15, 2004......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, 2004.
Consolidated net sales for the third quarter of 2004 were $203.5 million,
compared to consolidated net sales of $214.5 million during the comparable
quarter in 2003. Earnings from continuing operations for the third quarter of
2004 were $1.3 million or 7 cents per diluted share, compared to $2 million or
11 cents per diluted share in the third quarter of 2003.
Consolidated net sales for the nine month period ended September 30, 2004 were
$643.3 million, compared to consolidated net sales of $516.3 million during the
comparable period in 2003. Earnings from continuing operations for the nine
month period ended September 30, 2004 were $8.3 million or 43 cents per diluted
share, compared to $5.7 million or 39 cents per diluted share for the comparable
period in 2003.
Lower sales in the third quarter occurred primarily in the Temperature Control
segment. Temperature Control net sales were down by $ 14.4 million for the third
quarter and $9 million for the nine months ended September 30, 2004, a result of
one of the coldest summers in history. The segment worked aggressively to reduce
costs in manufacturing and selling, general and administrative expenses to
reflect the reduced sales levels.
As the acquisition of Dana Engine Management (DEM) occurred June 30, 2003, this
was the first quarter where there were comparable numbers versus the prior year.
Engine Management sales were approximately 2% ahead for the quarter, and
operating profit, excluding integration costs, increased by $5.6 million to $13
million.
Mr. Lawrence Sills, Standard Motor Products' Chief Executive Officer, commented,
"We are pleased that the integration has proceeded on schedule. All DEM
operations - Manufacturing, Distribution, MIS, Finance, Sales and Marketing -
have been transferred to SMP locations. As planned, we have exited seven of the
acquired nine facilities, and this has been accomplished within our original
time frame of twelve to eighteen months. The moves have been completed within
budget, and thus far we have maintained all the DEM customers.
We are beginning to see the results of the cost savings within our Engine
Management segment, as reflected in the improved operating profit before
integration costs. However, we still have work to do, especially in the area of
gross margin. We are confident that, as we achieve the planned material product
cost savings, and our new employees achieve normal efficiency, we will
accomplish our target of $55 million annual savings from the DEM acquisition. It
is our goal to begin approaching this number by the second half of 2005."
The Company, in accordance with its accounting policy, recently conducted an
actuarial study of its contingent liabilities associated with asbestos. As
previously disclosed, in 1986 the Company acquired a brake business, which was
subsequently sold in March 1998 and which is accounted for as a loss from
discontinued operation on the consolidated financial statements. The updated
study has estimated an undiscounted liability for settlement payments, excluding
legal costs, ranging from $28.2 to $62.9 million for the period through 2049.
The change from the prior year study was a $1.5 million increase for the low end
of the range and a $7.9 million decrease for the high end of the range. As a
result, in September 2004, an incremental $3 million provision was added to the
asbestos accrual increasing the reserve to approximately $28.2 million. The
Company will perform an actuarial analysis during the third quarter of each
year.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern
Time, on Monday, November 15, 2004. The dial in number is 800-362-0571. The
playback number is 800-388-9064 (domestic) 402-220-1116 (international) and the
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
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
------------ ------------ ------------ ------------
NET SALES $ 203,487 $ 214,479 $ 643,317 $ 516,329
COST OF SALES 150,945 156,191 477,547 379,682
------------ ------------ ------------ ------------
GROSS PROFIT 52,542 58,288 165,770 136,647
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 43,436 48,956 137,438 113,671
INTEGRATION COSTS 4,669 1,926 8,592 2,702
------------ ------------ ------------ ------------
OPERATING INCOME 4,437 7,406 19,740 20,274
OTHER INCOME (EXPENSE), NET 823 125 1,766 (278)
INTEREST EXPENSE 3,474 4,070 10,389 10,276
------------ ------------ ------------ ------------
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 1,786 3,461 11,117 9,720
INCOME TAX EXPENSE 446 1,419 2,779 3,985
------------ ------------ ------------ ------------
EARNINGS FROM CONTINUING OPERATIONS 1,340 2,042 8,338 5,735
LOSS FROM DISCONTINUED OPERATION, NET OF TAX (2,016) (591) (3,292) (1,372)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) $ (676) $ 1,451 $ 5,046 $ 4,363
============ ============ ============ ============
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $ 0.07 $ 0.11 $ 0.43 $ 0.39
DISCONTINUED OPERATION (0.10) (0.03) (0.17) (0.09)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC $ (0.03) $ 0.08 $ 0.26 $ 0.30
============ ============ ============ ============
DILUTED EARNINGS FROM CONTINUING OPERATIONS $ 0.07 $ 0.11 $ 0.43 $ 0.39
DISCONTINUED OPERATION (0.10) (0.03) (0.17) (0.09)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED $ (0.03) $ 0.08 $ 0.26 $ 0.30
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 19,356,423 19,194,121 19,312,334 14,580,042
WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND DILUTIVE SHARES 19,460,252 19,218,855 19,415,562 14,634,466
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
September 30 December 31,
2004 2003
------------ ------------
Cash and cash equivalents $ 16,905 $ 19,647
Accounts receivable, gross 182,958 179,232
Allowance for doubtful accounts 6,168 5,009
------------ ------------
Accounts receivable, net 176,790 174,223
Inventories 270,094 253,754
Other current assets 24,583 20,547
------------ ------------
Total current assets 488,372 468,171
------------ ------------
Property, plant and equipment, net 104,305 112,549
Goodwill and other intangibles 72,578 71,843
Other assets 41,989 41,962
------------ ------------
Total assets $ 707,244 $ 694,525
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 111,214 $ 99,699
Current portion of long term debt 534 3,354
Accounts payable trade 49,567 58,029
Accrued customer returns 29,453 24,115
Restructuring accrual 8,000 16,000
Other current liabilities 86,234 75,641
------------ ------------
Total current liabilities 285,002 276,838
------------ ------------
Long-term debt 114,381 114,757
Accrued asbestos liabilities 26,278 24,426
Postretirement & other liabilities 41,409 36,848
Restructuring accrual 15,028 15,615
------------ ------------
Total liabilities 482,098 468,484
------------ ------------
Total stockholders' equity 225,146 226,041
------------ ------------
Total liabilities and stockholders' equity $ 707,244 $ 694,525
============ ============