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
SECOND QUARTER 2008 RESULTS AND A QUARTERLY DIVIDEND
New York, NY, August 4, 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 six months ended June
30, 2008.
Consolidated net sales for the second quarter of 2008 were $215.3 million,
compared to consolidated net sales of $217 million during the comparable quarter
in 2007. Losses from continuing operations for the second quarter of 2008 were
$772 thousand or 4 cents per diluted share, compared to $5.7 million or 30 cents
per diluted share in the second quarter of 2007. Excluding restructuring
expenses for previously announced facility moves, a deferred gain from the sale
and leaseback of its corporate facilities in Long Island City, New York, results
from continuing operations for the second quarter 2008 were essentially
breakeven compared to earnings in the second quarter 2007 of $6 million or 32
cents per diluted share.
Consolidated net sales for the six month period ended June 30, 2008 were $423.4
million, compared to consolidated net sales of $416.8 million during the
comparable period in 2007. Earnings from continuing operations for the six month
period ended June 30, 2008 were $12.6 million or 68 cents per diluted share,
compared to $8.6 million or 46 cents per diluted share in the comparable period
of 2007. Excluding restructuring expenses for previously announced facility
moves, a gain from the sale and leaseback of its corporate facilities in Long
Island City, New York, and the associated defeasance costs on the building
mortgage, earnings from continuing operations for the six months ended 2008 and
2007 were $3 million or 16 cents per diluted share and $9.4 million or 50 cents
per diluted share, respectively.
- --------------------------------------------------------------------------------
37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
The second quarter 2008 provision for taxes was negatively impacted with the
increase in the full year effective tax rate to 42.6%. The 2008 tax rate is
higher due to the tax impact from the gain on the sale of the Long Island City,
New York property, the tax impact of the non-deductible portion of a retirement
plan distribution and tollgate taxes on undistributed earnings related to the
closure of our Puerto Rico operations.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products'
Chairman and Chief Executive Officer, stated, "The primary negative factor in
the second quarter was the drop in Engine Management gross margin, which fell
from $37.1 million or 26.9% in 2007 to $30 million or 21.7% in 2008. This was
almost entirely attributable to the closing of Long Island City and Puerto Rico
operations and the move to Reynosa, Mexico. During the quarter we continued to
incur costs in Long Island City and Puerto Rico, with minimal productive hours,
while Reynosa was just beginning to ramp up.
"Long Island City and Puerto Rico are now completely closed, while Reynosa
continues to increase production. As a result, we anticipate a gradual
improvement in gross margin in the third quarter, further improvement in the
fourth quarter, with the full benefits of the moves hitting in 2009. This is in
line with our original forecast.
"As a side benefit we continue to reduce the bridge inventory we built during
2007. Engine Management inventory was down approximately $8 million for the six
months, with an additional $3 million drop in July.
"Sales held up reasonably well in a weak market. Engine Management net sales are
about 2% ahead for the year, with most of the growth coming from new OES
business. Temperature Control sales started slowly, but began to pick up in June
with the hot weather, and July sales are ahead of the prior year.
"We continue to make progress in OES. We previously announced that we had agreed
to acquire various sensor lines from Continental. The first production line from
Continental's plant in upstate New York has now been moved to Independence, KS
facility, and the balance of the lines will be moved by year end. Sales, which
are estimated at $10 - 12 million annually, will begin towards the end of 2008.
"Further, we recently concluded an agreement with Lear to acquire a portion of
their OE/OES business, which we estimate at approximately $3 million annually.
This equipment will also be relocated to Independence. As a result of both of
these transactions we are gaining access to a host of OE and OES accounts, both
domestic and import.
"We have also undertaken significant cost reduction initiatives. In the last
several months we have eliminated approximately 60 salaried positions, or 5% of
our salaried workforce. Further, on May 30 we made a change to our
postretirement medical plan. Our exposure is now capped and this action resulted
in a $24.5 million reduction in our liability to be recognized over 3.8 years
effective June 1, 2008."
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
September 2, 2008 to stockholders of record on August 15, 2008.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern
Time, on Monday, August 4, 2008. The dial in number is 800-862-9098 (domestic)
or 785-424-1051 (international). The playback number is 800-283-8217 (domestic)
or 402-220-0868 (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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
NET SALES $ 215,343 $ 216,950 $ 423,427 $ 416,765
COST OF SALES 166,714 160,261 323,574 308,201
------------ ------------ ------------ ------------
GROSS PROFIT 48,629 56,689 99,853 108,564
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 42,724 43,324 86,786 86,055
RESTRUCTURING EXPENSES 1,376 559 4,212 1,237
------------ ------------ ------------ ------------
OPERATING INCOME 4,529 12,806 8,855 21,272
OTHER INCOME, NET 10 779 20,372 1,046
INTEREST EXPENSE 3,388 4,795 7,319 9,336
------------ ------------ ------------ ------------
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 1,151 8,790 21,908 12,982
INCOME TAX EXPENSE 1,923 3,134 9,333 4,390
------------ ------------ ------------ ------------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS (772) 5,656 12,575 8,592
DISCONTINUED OPERATION, NET OF TAX (323) (279) (649) (628)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) $ (1,095) $ 5,377 $ 11,926 $ 7,964
============ ============ ============ ============
NET EARNINGS (LOSS) PER COMMON SHARE:
BASIC EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (0.04) $ 0.30 $ 0.69 $ 0.46
DISCONTINUED OPERATION (0.02) (0.01) (0.04) (0.03)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC $ (0.06) $ 0.29 $ 0.65 $ 0.43
============ ============ ============ ============
DILUTED EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (0.04) $ 0.30 $ 0.68 $ 0.46
DISCONTINUED OPERATION (0.02) (0.02) (0.03) (0.04)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED $ (0.06) $ 0.28 $ 0.65 $ 0.42
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 18,332,273 18,781,388 18,319,979 18,617,453
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 18,384,840 18,940,962 21,157,672 18,774,430
STANDARD MOTOR PRODUCTS, INC.
RECONCILIATION OF GAAP AND NON-GAAP MEASURES
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
EARNINGS FROM CONTINUING OPERATIONS 2008 2007 2008 2007
-----------------------------------------------
(Unaudited) (Unaudited)
GAAP EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (772) $ 5,656 $ 12,575 $ 8,592
RESTRUCTURING EXPENSES (NET OF TAX) 829 364 2,530 778
LOSS FROM EXTINGUISHMENT OF DEBT (NET OF TAX) -- -- 882 --
GAIN FROM SALE OF BUILDING (NET OF TAX) (145) -- (13,020) --
------- --------- ---------- ---------
NON-GAAP EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (88) $ 6,020 $ 2,967 $ 9,370
======= ========= ========== =========
DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS $ (0.04) $ 0.30 $ 0.68 $ 0.46
RESTRUCTURING EXPENSES (NET OF TAX) 0.05 0.02 0.14 0.04
LOSS FROM EXTINGUISHMENT OF DEBT (NET OF TAX) -- -- 0.05 --
GAIN FROM SALE OF BUILDING (NET OF TAX) (0.01) -- (0.71) --
------- --------- ---------- ---------
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $ 0.00 $ 0.32 $ 0.16 $ 0.50
======= ========= ========== =========
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.
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
June 30, December 31,
2008 2007
---------- ---------
(Unaudited)
Cash $ 12,318 $ 13,261
Accounts receivable, gross 290,424 213,409
Allowance for doubtful accounts 10,555 8,964
-------- --------
Accounts receivable, net 279,869 204,445
Inventories 244,252 252,277
Assets held for sale 1,930 5,373
Other current assets 23,488 27,751
-------- --------
Total current assets 561,857 503,107
-------- --------
Property, plant and equipment, net 68,766 71,775
Goodwill and other intangibles 56,571 57,891
Other assets 30,650 45,319
-------- --------
Total assets $717,844 $678,092
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $183,330 $156,756
Current portion of long term debt 119 8,021
Accounts payable trade 71,604 64,384
Accrued customer returns 27,396 23,149
Other current liabilities 67,897 67,723
-------- --------
Total current liabilities 350,346 320,033
-------- --------
Long-term debt 90,425 90,534
Accrued asbestos liability 22,434 22,651
Other Liabilities 42,346 56,510
-------- --------
Total liabilities 505,551 489,728
-------- --------
Total stockholders' equity 212,293 188,364
-------- --------
Total liabilities and stockholders' equity $717,844 $678,092
======== ========