STANDARD [LOGO]
Standard Motor Products, Inc
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
THIRD QUARTER 2005 RESULTS AND A QUARTERLY DIVIDEND
New York, NY, November 1, 2005......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, 2005.
Consolidated net sales for the third quarter of 2005 were $224.4 million,
compared to consolidated net sales of $203.5 million during the comparable
quarter in 2004. Earnings from continuing operations for the third quarter of
2005 were $4.2 million or 21 cents per diluted share, compared to earnings of
$1.3 million or 7 cents per diluted share in the third quarter of 2004. The
third quarter improvement in earnings was primarily related to a $4.4 million
reduction in integration expenses and a $4 million reduction in retiree medical
expense (discussed further below).
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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, 2005 were
$658.3 million, compared to consolidated net sales of $643.3 million during the
comparable period in 2004. Earnings from continuing operations for the nine
month period ended September 30, 2005 were $3.9 million or 20 cents per diluted
share, compared to earnings of $8.3 million or 43 cents per diluted share in the
comparable period of 2004.
Commenting on the results, Mr. Lawrence Sills, Standard Motor Products' Chairman
and Chief Executive Officer, said, "On the Engine Management side of the
business, while net sales and SGA expenses were roughly in line with
projections, there was a major shortfall in gross margin. This was primarily
caused by two factors. First, despite the recent round of price increases, which
took effect in the third quarter, our pricing levels are still below 2004 on a
cumulative basis. Second, we are incurring one-time, non-cash write-offs as we
merge the Dana and Standard inventories.
"Looking forward, we have announced another round of price increases, beginning
in mid-December. In addition, we are forecasting an additional $6-8 million in
annualized cost savings, resulting from new manufacturing of previously
purchased product and resourcing of existing purchased items. We anticipate all
these being in place by year-end 2005, with benefits beginning in 2006."
Turning to Temperature Control, Mr. Sills commented, "Four Seasons had an
excellent quarter. Sales were up 36% in the third quarter primarily because of
the hot summer. However, year-to-date increases were only 7.3% because of the
weak pre-season orders. On the cost side, we are continuing with our program of
outsourcing product to the Far East, and beginning the task of establishing a
compressor rebuilding facility in Reynosa, Mexico.
"Europe continues to show slow but steady improvement. By the end of 2005 we
will have outsourced all traditional ignition to the Far East and Eastern
Europe.
"Further, we continue to show gains on several fronts. We reduced inventory by
$21 million in the third quarter, as Temperature Control had the benefit of the
hot summer and we continued to integrate the DEM and Standard Engine Management
inventories. Second, we are in the process of winding down our customer accounts
receivable draft program, which will reduce interest expense and improve cash
flow in 2006. Finally, as discussed above, we made substantial changes to our
retiree medical program, which will result in a reduction of roughly $5 million
to our annual expenses. $4 million of this reduction is included in our third
quarter results, and the balance will be reflected in the fourth quarter."
The Board of Directors has approved payment of a quarterly dividend of nine
cents per share on the common stock outstanding. The dividend will be paid on
December 1, 2005 to stockholders of record on November 15, 2005.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern
Time, on Tuesday, November 1, 2005. The dial in number is 877-707-9628
(domestic) or 785-832-0326 (international). The playback number is 800-839-2435
(domestic) or 402-220-7212 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.
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STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
September 30, December 31,
2005 2004
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Cash $ 13,596 $ 14,934
Accounts receivable, gross 270,855 160,706
Allowance for doubtful accounts 9,978 9,354
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Accounts receivable, net 260,877 151,352
Inventories 240,266 258,641
Other current assets 24,021 22,289
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Total current assets 538,760 447,216
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Property, plant and equipment, net 88,086 97,425
Goodwill and other intangibles 68,662 69,911
Other assets 40,854 42,017
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Total assets $736,362 $656,569
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LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $180,465 $109,416
Current portion of long term debt 534 534
Accounts payable trade 56,381 46,487
Accrued customer returns 31,687 23,127
Restructuring accrual 2,699 6,999
Other current liabilities 62,494 65,893
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Total current liabilities 334,260 252,456
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Long-term debt 113,829 114,236
Accrued asbestos liability 25,565 26,060
Restructuring accrual 11,515 12,394
Postretirement & other liabilities 45,268 44,111
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Total liabilities 530,437 449,257
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Total stockholders' equity 205,925 207,312
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Total liabilities and stockholders' equity $736,362 $656,569
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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,
2005 2004 2005 2004
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NET SALES $ 224,438 $ 203,487 $ 658,276 $ 643,317
COST OF SALES 175,301 150,945 511,794 477,547
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GROSS PROFIT 49,137 52,542 146,482 165,770
SELLING, GENERAL & ADMINISTRATIVE
EXPENSES 39,134 43,436 124,915 137,438
INTEGRATION EXPENSES 218 4,669 4,620 8,592
------------ ------------ ------------ ------------
OPERATING INCOME 9,785 4,437 16,947 19,740
OTHER INCOME (EXPENSE), NET 67 823 1,046 1,766
INTEREST EXPENSE 4,552 3,474 12,617 10,389
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EARNINGS FROM CONTINUING OPERATIONS
BEFORE TAXES 5,300 1,786 5,376 11,117
INCOME TAX EXPENSE 1,137 446 1,441 2,779
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EARNINGS FROM CONTINUING OPERATIONS 4,163 1,340 3,935 8,338
DISCONTINUED OPERATIONS, NET OF TAX (449) (2,016) (1,240) (3,292)
------------ ------------ ------------ ------------
NET EARNINGS $ 3,714 $ (676) $ 2,695 $ 5,046
============ ============ ============ ============
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $ 0.21 $ 0.07 $ 0.20 $ 0.43
DISCONTINUED OPERATION (0.02) (0.10) (0.06) (0.17)
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NET EARNINGS PER COMMON SHARE - BASIC $ 0.19 $ (0.03) $ 0.14 $ 0.26
============ ============ ============ ============
DILUTED EARNINGS FROM CONTINUING OPERATIONS $ 0.21 $ 0.07 $ 0.20 $ 0.43
DISCONTINUED OPERATION (0.02) (0.10) (0.06) (0.17)
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NET EARNINGS PER COMMON SHARE - DILUTED $ 0.19 $ (0.03) $ 0.14 $ 0.26
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES 19,547,319 19,356,423 19,509,040 19,312,334
WEIGHTED AVERAGE NUMBER OF
COMMON AND DILUTIVE SHARES 19,577,972 19,460,252 19,546,261 19,415,562