[LETTERHEAD OF 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
FIRST QUARTER 2006 RESULTS AND A QUARTERLY DIVIDEND
New York, NY, May 5, 2006......Standard Motor Products, Inc. (NYSE: SMP), an
automotive replacement parts manufacturer and distributor, reported today its
consolidated financial results for the three months ended March 31, 2006.
Consolidated net sales for the first quarter of 2006 were $210.1 million,
compared to consolidated net sales of $207.3 million during the comparable
quarter in 2005. Earnings from continuing operations for the first quarter of
2006 were $2.6 million or 14 cents per diluted share, compared to $1.1 million
or 5 cents per diluted share in the first quarter of 2005.
First quarter 2006 consolidated net sales increased slightly. Consolidated gross
margins were 25.3% in the first quarter of 2006 compared to 23.4% in the first
quarter of 2005, reflecting a 1.9 percentage point increase. The result was that
operating income increased to $9.4 million from $5.8 million, or approximately
60%, in the first quarter of 2006 as compared to the comparable period in the
prior year.
Commenting on the results, Mr. Lawrence Sills, Standard Motor Products' Chairman
and Chief Executive Officer, said, "We are pleased with the progress we have
achieved during this past quarter. In Engine Management, our sales were ahead by
$8.4 million or 6%, and we are beginning to see improvements in gross margin. In
the first quarter, our Engine Management gross profit of 24.7% was roughly two
points higher than the comparable period in 2005, and 4.6 points higher than the
full year 2005. Margins benefited from price increases in the first quarter and
continuing efforts to reduce cost through manufacturing products that we had
been purchasing and re-sourcing others to low cost alternatives. We are working
diligently on cost reductions and anticipate further improvements ahead.
"In Temperature Control, our sales were below 2005, primarily because we scaled
back our pre-season promotional program. We are now entering the prime summer
months, and the key variable for sales will be the temperature in various parts
of the country. The comparable 2005 sales figures will be challenging, as last
year was one of the hottest years on record.
"Finally, we are pleased to announce that we have entered an agreement to sell
Four Seasons' heater core assets to Proliance International, Inc. The
transaction has an estimated purchase price of $3-4 million, and is expected to
close in two tranches. The first closing relates to the sale of fixed assets and
is expected to close by the third quarter of 2006. The second closing relates to
the sale of inventory and is expected to close in April 2008. The heater core
line had annual sales of approximately $6 million and incurred a small operating
loss in 2005. We will continue to market the line, purchasing the finished
product from Proliance for a period of up to 24 months, to ensure a smooth
transition for our customers.
"This transaction will enable us to exit a product line where we are a
relatively minor player, generate a one-time favorable cash flow benefit, and be
in a position to sell an existing owned facility."
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
June 1, 2006 to stockholders of record on May 15, 2006.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern
Time, on Friday, May 5, 2006. The dial in number is 800-905-0392 (domestic) or
785-832-0326 (international). The playback number is 877-710-5298 (domestic) or
402-220-1603 (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
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31,
2006 2005
------------ ------------
NET SALES $ 210,076 $ 207,326
COST OF SALES 156,845 158,891
------------ ------------
GROSS PROFIT 53,231 48,435
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 43,788 42,076
INTEGRATION EXPENSES 87 524
------------ ------------
OPERATING INCOME 9,356 5,835
OTHER INCOME (EXPENSE), NET 350 (215)
INTEREST EXPENSE 4,453 3,775
------------ ------------
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 5,253 1,845
INCOME TAX EXPENSE 2,655 792
------------ ------------
EARNINGS FROM CONTINUING OPERATIONS 2,598 1,053
DISCONTINUED OPERATION, NET OF TAX (764) (407)
------------ ------------
NET INCOME $ 1,834 $ 646
============ ============
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $ 0.14 $ 0.05
DISCONTINUED OPERATION (0.04) (0.02)
------------ ------------
NET INCOME PER COMMON SHARE - BASIC $ 0.10 $ 0.03
============ ============
DILUTED EARNINGS FROM CONTINUING OPERATIONS $ 0.14 $ 0.05
DISCONTINUED OPERATION (0.04) (0.02)
------------ ------------
NET INCOME PER COMMON SHARE - DILUTED $ 0.10 $ 0.03
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 18,192,774 19,440,356
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 18,195,888 19,478,064
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
Cash $ 8,093 $ 14,046
Accounts receivable, gross 243,040 185,868
Allowance for doubtful accounts 10,609 9,574
------------ ------------
Accounts receivable, net 232,431 176,294
Inventories 249,626 243,297
Other current assets 23,140 22,053
------------ ------------
Total current assets 513,290 455,690
------------ ------------
Property, plant and equipment, net 84,340 85,805
Goodwill and other intangibles 56,729 67,402
Other assets 41,233 44,147
------------ ------------
Total assets $ 695,592 $ 653,044
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 192,556 $ 149,236
Current portion of long term debt 542 542
Accounts payable trade 64,572 52,535
Accrued customer returns 22,443 22,346
Restructuring accrual 1,153 1,286
Other current liabilities 56,716 59,977
------------ ------------
Total current liabilities 337,982 285,922
Long-term debt 98,406 98,549
Postretirement & other liabilities 46,788 45,962
Restructuring accrual 418 11,348
Accrued asbestos liability 24,521 25,556
------------ ------------
Total liabilities 508,115 467,337
------------ ------------
Total stockholders' equity 187,477 185,707
------------ ------------
Total liabilities and stockholders' equity $ 695,592 $ 653,044
============ ============