SMP LOGO OMITTED
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 2007 Results
New York, NY, March 11, 2008......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, 2007.
Consolidated net sales for the fourth quarter of 2007 were $167.3 million,
compared to consolidated net sales of $169 million during the comparable quarter
in 2006. Losses from continuing operations for the fourth quarter of 2007 were
$7.9 million or 43 cents per diluted share, compared to a loss of $1.5 million
or 8 cents per diluted share in the fourth quarter of 2006. Excluding
restructuring expenses for previously announced facility moves and the loss from
our divestiture of our European Temperature Control business in 2006, losses
from continuing operations for the fourth quarter 2007 were $3.6 million or 19
cents per diluted share compared to earnings in the fourth quarter 2006 of $2.6
million or 14 cents per diluted share.
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37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
Consolidated net sales for 2007 were $790.2 million, compared to consolidated
net sales of $812 million during the comparable period in 2006. Earnings from
continuing operations for 2007 were $5.4 million or 29 cents per diluted share,
compared to $9.2 million or 50 cents per diluted share in 2006. Excluding
restructuring expenses for previously announced facility moves, a gain from the
sale of our Ft. Worth, Texas building in 2007 and the loss from our divestiture
of our European Temperature Control business in 2006, earnings from continuing
operations for 2007 and 2006 were $11.4 million or 61 cents per diluted share
and $13.9 million or 76 cents per diluted share, respectively.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products'
Chairman and Chief Executive Officer, stated, "We are obviously disappointed in
our fourth quarter results. The primary culprit was heavy stock returns in
Engine Management, which came in at the very end of the year. These returns
lowered our Engine Management net sales for the quarter (Engine Management gross
sales before deductions for the quarter were approximately $5 million ahead of
the comparable quarter in 2006). More important, they reduced our Engine
Management gross margin for the quarter to 21.7% and to 25.6% for the full year.
"There were two main components of these returns. First were heavy returns from
key accounts, as many in the distribution channel looked to reduce their stock
levels going into 2008. Second, were returns generated as we implemented a brand
change for two major customers.
"Despite the poor fourth quarter, the annual figure of 25.6% gross margin for
Engine Management represents a one point improvement over 2006, primarily the
result of aggressive cost reductions and additional manufacturing savings. We
are confident of achieving our stated target of 27-28% gross margin for Engine
Management once the previously announced plant moves to Mexico are complete.
"In Temperature Control, earlier in the year we reduced prices in response to
low price imports from China. We have instituted further price reductions in
2008, but we anticipate these will be offset as we continue to shift compressor
production to Mexico.
"Looking to 2008, sales for the first two months are holding up satisfactorily.
Further we will have a full year's benefit of new OES volume gained during 2007.
We will also see cost reductions from the plant moves to Mexico, though the full
benefit will not be felt until 2009. All moves are on or ahead of schedule.
"We recently concluded an agreement with Continental to acquire a portion of
their OE/OES business. We will be purchasing equipment and inventory for various
sensor lines from their factory in upstate New York and relocating it to our
Independence, KS facility. Annual volumes are approximately $10-15 million, and
we plan to begin shipments in the latter part of 2008. Customers include a wide
range of car manufacturers, both domestic and import, for use in their service
operations. We believe that OES is a major opportunity for us, and this is a
good step in that direction.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern
Time, on Tuesday, March 11, 2008. The dial in number is 800-895-1085 (domestic)
or 785-424-1055 (international). The playback number is 800-723-0488 (domestic)
or 402-220-2651 (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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
NET SALES $ 167,251 $ 169,019 $ 790,185 $ 812,024
COST OF SALES 128,182 123,067 587,910 606,803
------------ ------------ ------------ ------------
GROSS PROFIT 39,069 45,952 202,275 205,221
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 40,034 41,228 168,950 168,050
RESTRUCTURING EXPENSES 7,066 1,028 10,933 1,856
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (8,031) 3,696 22,392 35,315
OTHER INCOME (EXPENSE), NET 971 (2,363) 3,881 (383)
INTEREST EXPENSE 4,103 4,449 18,044 19,275
------------ ------------ ------------ ------------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES (11,163) (3,116) 8,229 15,657
INCOME TAX EXPENSE (BENEFIT) (3,220) (1,643) 2,798 6,494
------------ ------------ ------------ ------------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS (7,943) (1,473) 5,431 9,163
DISCONTINUED OPERATION, NET OF TAX (380) (355) (3,156) 248
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) $ (8,323) $ (1,828) $ 2,275 $ 9,411
============ ============ ============ ============
NET EARNINGS (LOSS) PER COMMON SHARE:
BASIC EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (0.43) $ (0.08) $ 0.29 $ 0.50
DISCONTINUED OPERATION (0.02) (0.02) $ (0.17) 0.01
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC $ (0.45) $ (0.10) $ 0.12 $ 0.51
============ ============ ============ ============
DILUTED EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (0.43) $ (0.08) $ 0.29 $ 0.50
DISCONTINUED OPERATION (0.02) (0.02) (0.17) 0.01
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED $ (0.45) $ (0.10) $ 0.12 $ 0.51
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 18,296,957 18,336,891 18,530,548 18,283,707
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 18,344,564 18,459,914 18,586,532 18,325,175
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
December 31, December 31,
2007 2006
-------- --------
Cash $ 13,261 $ 22,348
Accounts receivable, gross 213,409 193,129
Allowance for doubtful accounts 8,964 9,465
-------- --------
Accounts receivable, net 204,445 183,664
Inventories 252,277 233,970
Assets held for sale 5,373 --
Other current assets 27,381 21,856
-------- --------
Total current assets 502,737 461,838
-------- --------
Property, plant and equipment, net 71,775 80,091
Goodwill and other intangibles 57,891 56,289
Other assets 45,689 41,874
-------- --------
Total assets $678,092 $640,092
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $156,756 $139,799
Current portion of long term debt 583 542
Accounts payable trade 64,384 53,783
Accrued customer returns 23,149 21,705
Other current liabilities 67,723 62,696
-------- --------
Total current liabilities 312,595 278,525
-------- --------
Long-term debt 97,972 97,979
Accrued asbestos liability 22,651 20,828
Postretirement & other liabilities 56,510 52,061
-------- --------
Total liabilities 489,728 449,393
-------- --------
Total stockholders' equity 188,364 190,699
-------- --------
Total liabilities and stockholders' equity $678,092 $640,092
======== ========
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 2007 2006 2007 2006
--------- --------- ---------- ----------
(Unaudited) (Unaudited)
GAAP EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (7,943) $ (1,473) $ 5,431 $ 9,163
RESTRUCTURING EXPENSES (NET OF TAX) 4,328 827 6,734 1,523
LOSS FROM DIVESTITURE OF EUROPEAN TC BUSINESS -- 3,209 -- 3,209
GAIN FROM SALE OF FT. WORTH, TEXAS BUILDING
(NET OF TAX) -- -- (740) --
--------- --------- ---------- ----------
NON-GAAP EARNINGS (LOSS) FROM CONTINUING
OPERATIONS $ (3,615) $ 2,563 $ 11,425 $ 13,895
========= ========= ========== ==========
DILUTED EARNINGS (LOSS) PER SHARE FROM
CONTINUING OPERATIONS
GAAP DILUTED EARNINGS (LOSS) PER SHARE
FROM CONTINUING OPERATIONS $ (0.43) $ (0.08) $ 0.29 $ 0.50
RESTRUCTURING EXPENSES 0.24 0.05 0.36 0.08
LOSS FROM DIVESTITURE OF EUROPEAN TC BUSINESS -- 0.17 -- 0.18
GAIN FROM SALE OF FT. WORTH, TEXAS BUILDING -- -- (0.04) --
--------- --------- ---------- ----------
NON-GAAP DILUTED EARNINGS (LOSS)
PER SHARE FROM CONTINUING OPERATIONS $ (0.19) $ 0.14 $ 0.61 $ 0.76
========= ========= ========== ==========
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 OVERALL OPERATING RESULTS IN THE PERIODS PRESENTED. SUCH
NON-GAAP MEASUREMENTS ARE NOT RECOGNIZED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AND SHOULD NOT BE VIEWED AS AN ALTERNATIVE TO GAAP
MEASURES OF PERFORMANCE.