[LOGO, STANDARD MOTOR PRODUCTS]
37-18 Northern Blvd., Long Island, NY 11101
(718) 392-0200
www.smpcorp.com
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
FOURTH QUARTER AND FULL YEAR 2005 RESULTS
New York, NY, March 15, 2006......Standard Motor Products, Inc. (NYSE: SMP), an
automotive replacement parts manufacturer and distributor, reported today its
consolidated financial results for the three months and for the year ended
December 31, 2005.
Consolidated net sales for the fourth quarter of 2005 were $172.1 million,
compared to consolidated net sales of $181 million during the comparable quarter
in 2004. Losses from continuing operations for the fourth quarter of 2005 were
$5.7 million or 29 cents per diluted share, compared to $17.2 million or 89
cents per diluted share in the fourth quarter of 2004.
Consolidated net sales for 2005 were $830.4 million, compared to consolidated
net sales of $824.3 million in 2004. Losses from continued operations for 2005
were $1.8 million or 9 cents per diluted share, compared to $8.9 million or 46
cents per diluted share in 2004.
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37-18 Northern Blvd., Long Island, NY 11101
(718) 392-0200
www.smpcorp.com
Commenting on the results, Mr. Lawrence Sills, Standard Motor Products' Chairman
and Chief Executive Officer, said, "While we are obviously not satisfied with
the 2005 financial results, we are pleased to report that the integration of our
Engine Management business is now essentially complete. During these past 2 1/2
years we have relocated seven of nine Dana facilities, merged all support
functions, and combined and re-valued millions of dollars of inventory. This has
been a long, arduous, and costly task - we publicly commend all our people for
their efforts - but this task is now behind us. Importantly, we have maintained
the entire customer base.
"We have achieved much of the savings we set out to accomplish. This is
most apparent in SG&A, where we have reduced the figure from 22.6% in 2003 to
19.6% in 2005 (exclusive of integration expenses and the A/R draft program), a
savings of approximately $23 million. The gross margin, however, was negatively
impacted in 2005 by the following: price reductions early in the year to match
OE; inventory writedowns as we merged the acquired inventories; and ongoing
negative trends in product mix and channel mix.
"Now, with the integration process complete, and the one-time costs behind
us, we will refocus our attention to gross margin improvement. We have plans in
place to manufacture products we have been purchasing at premium prices, and to
re-source others to low cost areas. We have also implemented price increases
over the past 90 days. We are counting on these steps to lead to improved Engine
Management gross margins in 2006."
Turning to 2005 results, Mr. Sills commented, "Engine Management net sales
were down 2.8% for the year, with most of the reduction coming in the fourth
quarter. On a positive note, Engine Management sales for the first two months of
2006 have been running ahead of 2005.
"Temperature Control, as expected, had a good year. We finally experienced
a warm summer, after a series of cool ones, and the results showed in both
improved sales and profits. Our goal in this division is to continue to work on
cost reduction, so that we can achieve healthy profits in cool summers as well.
"There were other positive steps taken in 2005, which were previously announced.
First, we amended our retiree medical program, with an estimated savings of $5
million per year. Second, at year-end, we finalized an agreement with Dana to
pre-pay a $15 million note, and to buy back approximately 1.4 million shares of
SMP stock."
Mr. Sills concluded, "While, again, we are disappointed in our 2005
financial results, now that the Engine Management integration is behind us, we
feel we are well positioned for the future. It is now up to us to implement our
plans for cost and profit improvement."
Standard Motor Products, Inc. will hold a conference call at 1:00 PM, Eastern
Time, on Wednesday, March 15, 2006. The dial in number is 877-707-9628
(domestic) or 785-832-0301 (international). The playback number is 800-374-1375
(domestic) or 402-220-0682 (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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2005 2004 2005 2004
------------ ------------ ------------ ------------
NET SALES $ 172,137 $ 180,966 $ 830,413 $ 824,283
COST OF SALES 132,639 151,743 644,433 629,290
------------ ------------ ------------ ------------
GROSS PROFIT 39,498 29,223 185,980 194,993
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 41,641 41,414 166,556 178,852
GOODWILL IMPAIRMENT -- 6,429 -- 6,429
INTEGRATION EXPENSES 722 2,857 5,342 11,449
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (2,865) (21,477) 14,082 (1,737)
OTHER INCOME (EXPENSE), NET 1,602 1,095 2,648 2,861
INTEREST EXPENSE 4,460 3,321 17,077 13,710
------------ ------------ ------------ ------------
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES (5,723) (23,703) (347) (12,586)
PROVISION (BENEFIT) FOR INCOME TAXES (18) (6,458) 1,423 (3,679)
------------ ------------ ------------ ------------
LOSS FROM CONTINUING OPERATIONS (5,705) (17,245) (1,770) (8,907)
DISCONTINUED OPERATION, NET OF TAX (535) (617) (1,775) (3,909)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (1,564) -- (1,564)
------------ ------------ ------------ ------------
NET LOSS $ (6,240) $ (19,426) $ (3,545) $ (14,380)
============ ============ ============ ============
NET LOSS PER COMMON SHARE:
BASIC LOSS FROM CONTINUING OPERATIONS $ (0.29) $ (0.89) $ (0.09) $ (0.46)
DISCONTINUED OPERATION (0.03) (0.03) (0.09) (0.20)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (0.08) -- (0.08)
------------ ------------ ------------ ------------
NET LOSS PER COMMON SHARE - BASIC $ (0.32) $ (1.00) $ (0.18) $ (0.74)
============ ============ ============ ============
DILUTED LOSS FROM CONTINUING OPERATIONS $ (0.29) $ (0.89) $ (0.09) $ (0.46)
DISCONTINUED OPERATION (0.03) (0.03) (0.09) (0.20)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (0.08) -- (0.08)
------------ ------------ ------------ ------------
NET LOSS PER COMMON SHARE - DILUTED $ (0.32) $ (1.00) $ (0.18) $ (0.74)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 19,504,191 19,388,015 19,507,818 19,331,358
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 19,504,191 19,388,015 19,507,818 19,331,358
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
December 31, December 31,
2005 2004
------------ ------------
Cash $ 14,046 $ 14,934
Accounts receivable, gross 185,868 160,706
Allowance for doubtful accounts 9,574 9,354
------------ ------------
Accounts receivable, net 176,294 151,352
Inventories 243,297 258,641
Other current assets 22,053 22,289
------------ ------------
Total current assets 455,690 447,216
------------ ------------
Property, plant and equipment, net 85,805 97,425
Goodwill and other intangibles 67,402 69,911
Other assets 44,147 42,017
------------ ------------
Total assets $ 653,044 $ 656,569
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 149,236 $ 109,416
Current portion of long term debt 542 534
Accounts payable trade 52,535 46,487
Accrued customer returns 22,346 23,127
Restructuring accrual 1,286 6,999
Other current liabilities 59,977 65,893
------------ ------------
Total current liabilities 285,922 252,456
------------ ------------
Long-term debt 98,549 114,236
Postretirement & other liabilities 45,962 44,111
Restructuring accrual 11,348 12,394
Accrued asbestos liability 25,556 26,060
------------ ------------
Total liabilities 467,337 449,257
------------ ------------
Total stockholders' equity 185,707 207,312
------------ ------------
Total liabilities and stockholders' equity $ 653,044 $ 656,569
============ ============