[GRAPHIC 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
THIRD QUARTER 2008 RESULTS AND A QUARTERLY DIVIDEND
New York, NY, October 30, 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 nine months ended
September 30, 2008.
Consolidated net sales for the third quarter of 2008 were $202.9 million,
compared to consolidated net sales of $206.2 million during the comparable
quarter in 2007. Earnings from continuing operations for the third quarter of
2008 were $397 thousand or 2 cents per diluted share, compared to earnings of
$4.8 million or 26 cents per diluted share in the third quarter of 2007.
Excluding restructuring expenses for previously announced facility moves, a
deferred gain from the sale and leaseback of our corporate facilities in Long
Island City, New York and a gain from the repurchase of $20.6 million of
debentures, earnings from continuing operations for the third quarter of 2008
were $499 thousand or 3 cents per diluted share, compared to earnings in the
comparable quarter in 2007 of $5.6 million or 30 cents per diluted share.
The third quarter results were negatively impacted by a tax rate of almost 90%,
for reasons which will be discussed below. However, using the statutory rate of
40%, our third quarter earnings from continuing operations would have been 13
cents per diluted share on the same basis.
Consolidated net sales for the nine month period ended September 30, 2008 were
$626.4 million, compared to consolidated net sales of $622.9 million during the
comparable period in 2007. Earnings from continuing operations for the nine
month period ended September 30, 2008 were $13 million or 70 cents per diluted
share, compared to $13.4 million or 72 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 our corporate facilities
in Long Island City, New York, the associated defeasance costs on the building
mortgage, and a gain from the repurchase of $20.6 million of debentures,
earnings from continuing operations for the nine month period ended September
30, 2008 and 2007 were $3.5 million or 19 cents per diluted share and $15
million or 80 cents per diluted share, respectively.
- --------------------------------------------------------------------------------
37-18 Northern Blvd., Long Island City, NY 11101
(718) 392-0200
www.smpcorp.com
We are projecting a full year effective tax rate of 49.5%. This is higher than
the statutory federal and state rates due to 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, "Sales held up reasonably well,
considering the economic environment. Overall, we were down 1.6% for the quarter
and remain slightly ahead for the year. Engine Management has been running
consistently ahead, primarily because of new OES business, while Temperature
Control, a more discretionary purchase, remains behind 2007.
"Sales began to fall off in September, and this has continued into October. We
believe that the automotive aftermarket may hold up better in a recessionary
environment than many other industries - there are more older cars on the road
as people keep their cars longer. However, we are not immune from the current
economic conditions, and we believe we will see a sales decline, at least in the
short term, as many of our customers are looking to reduce their inventories. We
are working aggressively to reduce costs during this period - looking at all
discretionary spending, further headcount reductions and further cash flow
benefits from reducing our inventories.
"Our gross margin showed an improvement over the second quarter, as our plants
in Reynosa increased production. We anticipate additional improvement in the
months ahead as additional product is transferred to Mexico, though this may be
dampened in the short term if demand is reduced.
"One of our major goals in 2008 was improved cash flow and debt reduction.
Through the end of the third quarter of 2008, we repurchased $20.6 million of
debentures and in October repurchased an additional $8.5 million of debentures.
At the end of September, our total outstanding debt was $24.7 million below
September 2007 and total debt has continued to decline in October. This was
accomplished by the sale of our Long Island City facility, inventory reduction,
and entering into accounts receivable factoring agreements with some of our
major accounts.
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, 2008 to stockholders of record on November 14, 2008.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern
Time, on Thursday, October 30, 2008. The dial in number is 800-891-3173
(domestic) or 785-424-1111 (international). The playback number is 800-753-4652
(domestic) or 402-220-4235 (international). The conference ID # is STANDARD.
SELECTED FINANCIAL TERMS
IN ADDITION TO EVALUATING STANDARD MOTOR PRODUCTS' RESULTS OF OPERATIONS IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"), MANAGEMENT
ROUTINELY SUPPLEMENTS THIS EVALUATION WITH AN ANALYSIS OF CERTAIN NON-GAAP
FINANCIAL MEASURES. MANAGEMENT BELIEVES THAT THE PRESENTATION OF NON-GAAP
FINANCIAL MEASURES, SUCH AS EARNINGS FROM CONTINUING OPERATIONS AND DILUTED
EARNINGS PER SHARE BEFORE SPECIAL ITEMS PROVIDES USEFUL INFORMATION TO INVESTORS
REGARDING THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS BECAUSE
THESE MEASURES, WHEN USED IN CONJUNCTION WITH THE RELATED GAAP FINANCIAL
MEASURES, (I) PROVIDE A MORE COMPREHENSIVE VIEW OF THE COMPANY'S CORE OPERATIONS
AND ABILITY TO GENERATE CASH FLOW, (II) PROVIDE INVESTORS WITH THE FINANCIAL
ANALYTICAL FRAMEWORK UPON WHICH MANAGEMENT BASES FINANCIAL, OPERATIONAL,
COMPENSATION AND PLANNING DECISIONS AND (III) FACILITATES COMPARISONS WITH THE
PERFORMANCE OF COMPETITORS.
SAFE HARBOR PROVISIONS
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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
NET SALES $ 202,938 $ 206,169 $ 626,365 $ 622,934
COST OF SALES 154,166 151,527 477,740 459,728
------------ ------------ ------------ ------------
GROSS PROFIT 48,772 54,642 148,625 163,206
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 41,294 42,861 128,080 128,916
RESTRUCTURING AND INTEGRATION EXPENSES 1,905 2,630 6,117 3,867
------------ ------------ ------------ ------------
OPERATING INCOME 5,573 9,151 14,428 30,423
OTHER INCOME, NET 1,293 1,864 21,665 2,910
INTEREST EXPENSE 3,109 4,605 10,428 13,941
------------ ------------ ------------ ------------
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 3,757 6,410 25,665 19,392
INCOME TAX EXPENSE 3,360 1,628 12,693 6,018
------------ ------------ ------------ ------------
EARNINGS FROM CONTINUING OPERATIONS 397 4,782 12,972 13,374
DISCONTINUED OPERATION, NET OF TAX (1,579) (2,148) (2,228) (2,776)
------------ ------------ ------------ ------------
NET EARNINGS $ (1,182) $ 2,634 $ 10,744 $ 10,598
============ ============ ============ ============
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $ 0.02 $ 0.26 $ 0.70 $ 0.72
DISCONTINUED OPERATION (0.08) (0.12) (0.12) (0.15)
------------ ------------ ------------ ------------
NET EARNINGS PER COMMON SHARE - BASIC $ (0.06) $ 0.14 $ 0.58 $ 0.57
============ ============ ============ ============
DILUTED EARNINGS FROM CONTINUING OPERATIONS $ 0.02 $ 0.26 $ 0.70 $ 0.72
DISCONTINUED OPERATION (0.08) (0.12) (0.12) (0.15)
------------ ------------ ------------ ------------
NET EARNINGS PER COMMON SHARE - DILUTED $ (0.06) $ 0.14 $ 0.58 $ 0.57
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 18,558,330 18,593,165 18,479,817 18,609,268
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 18,617,724 18,623,138 18,512,475 18,692,217
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(Dollars in thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2008 2007 2008 2007
--------- ---------- --------- ----------
REVENUES
Engine Management $ 135,502 $ 130,513 $ 417,346 $ 406,039
Temperature Control 53,697 60,124 164,759 174,262
Europe 11,536 11,161 35,343 32,850
All Other 2,203 4,371 8,917 9,783
--------- ---------- --------- ----------
$ 202,938 $ 206,169 $ 626,365 $ 622,934
========= ========== ========= ==========
GROSS MARGIN
Engine Management $ 32,381 23.9% $ 35,116 26.9% $ 98,771 23.7% $ 108,408 26.7%
Temperature Control 10,602 19.7% 12,779 21.3% 30,498 18.5% 36,781 21.1%
Europe 2,700 23.4% 2,940 26.3% 8,943 25.3% 8,484 25.8%
All Other 3,089 3,807 10,413 9,533
--------- ---------- --------- ----------
$ 48,772 24.0% $ 54,642 26.5% $ 148,625 23.7% $ 163,206 26.2%
========= ========== ========= ==========
SELLING, GENERAL & ADMINISTRATIVE
Engine Management $ 23,784 17.6% $ 24,932 19.1% $ 73,290 17.6% $ 73,056 18.0%
Temperature Control 9,472 17.6% 8,837 14.7% 26,465 16.1% 27,303 15.7%
Europe 2,658 23.0% 2,227 20.0% 8,025 22.7% 6,302 19.2%
All Other 5,380 6,865 20,300 22,255
--------- ---------- --------- ----------
41,294 20.3% 42,861 20.8% 128,080 20.4% 128,916 20.7%
Restructuring & Integration 1,905 0.9% 2,630 1.3% 6,117 1.0% 3,867 0.6%
--------- ---------- --------- ----------
$ 43,199 21.3% $ 45,491 22.1% $ 134,197 21.4% $ 132,783 21.3%
========= ========== ========= ==========
OPERATING PROFIT
Engine Management $ 8,598 6.3% $ 10,185 7.8% $ 25,482 6.1% $ 35,352 8.7%
Temperature Control 1,130 2.1% 3,942 6.6% 4,033 2.4% 9,478 5.4%
Europe 42 0.4% 713 6.4% 918 2.6% 2,182 6.6%
All Other (2,292) (3,059) (9,888) (12,722)
--------- ---------- --------- ----------
7,478 3.7% 11,781 5.7% 20,545 3.3% 34,290 5.5%
Restructuring & Integration 1,905 0.9% 2,630 1.3% 6,117 1.0% 3,867 0.6%
--------- ---------- --------- ----------
$ 5,573 2.7% $ 9,151 4.4% $ 14,428 2.3% $ 30,423 4.9%
========= ========== ========= ==========
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
September 30, September 30, December 31,
2008 2007 2007
-----------------------------------------
(Unaudited) (Unaudited)
ASSETS
CASH $ 11,023 $ 19,449 $ 13,261
ACCOUNTS RECEIVABLE, GROSS 250,084 244,803 213,409
ALLOWANCE FOR DOUBTFUL ACCOUNTS 10,088 10,017 8,964
-------- -------- --------
ACCOUNTS RECEIVABLE, NET 239,996 234,786 204,445
INVENTORIES 239,262 239,063 252,277
ASSETS HELD FOR SALE 1,805 -- 5,373
OTHER CURRENT ASSETS 26,185 24,719 27,751
-------- -------- --------
TOTAL CURRENT ASSETS 518,271 518,017 503,107
-------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, NET 68,602 76,526 71,775
GOODWILL AND OTHER INTANGIBLES 56,299 54,953 57,891
OTHER ASSETS 30,086 38,848 45,319
-------- -------- --------
TOTAL ASSETS $673,258 $688,344 $678,092
-------- -------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE $159,992 $156,550 $156,756
CURRENT PORTION OF LONG TERM DEBT 69,554 454 8,021
ACCOUNTS PAYABLE TRADE 73,889 60,997 64,384
ACCRUED CUSTOMER RETURNS 30,374 29,904 23,149
OTHER CURRENT LIABILITIES 64,907 66,952 67,723
-------- -------- --------
TOTAL CURRENT LIABILITIES 398,716 314,857 320,033
-------- -------- --------
LONG-TERM DEBT 370 97,572 90,534
ACCRUED ASBESTOS LIABILITY 24,293 22,682 22,651
OTHER LIABILITIES 43,002 54,129 56,510
-------- -------- --------
TOTAL LIABILITIES 466,381 489,240 489,728
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY 206,877 199,104 188,364
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $673,258 $688,344 $678,092
======== ======== ========
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, September 30,
EARNINGS FROM CONTINUING OPERATIONS 2008 2008 2007 2008 2007
-------- -------- -------- -------- --------
(Unaudited) (Unaudited)
GAAP EARNINGS FROM CONTINUING OPERATIONS
BEFORE TAXES $ 3,757 $ 3,757 $ 6,410 $ 25,665 $ 19,392
INCOME TAX EXPENSE 1,503* 3,360 1,628 12,693 6,018
-------- -------- -------- -------- --------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 2,254 397 4,782 12,972 13,374
RESTRUCTURING EXPENSES (NET OF TAX) 1,204 1,204 1,578 3,734 2,320
LOSS FROM EXTINGUISHMENT OF MORTGAGE (NET OF TAX) -- -- -- 882 --
GAIN FROM SALE OF BUILDING (NET OF TAX) (160) (160) (740) (13,180) (740)
GAIN FROM DEBENTURE REPURCHASE (NET OF TAX) (942) (942) -- (942) --
-------- -------- -------- -------- --------
NON-GAAP EARNINGS (LOSS)
FROM CONTINUING OPERATIONS $ 2,356 $ 499 $ 5,620 $ 3,466 $ 14,954
======== ======== ======== ======== ========
DILUTED EARNINGS (LOSS) PER SHARE
FROM CONTINUING OPERATIONS
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS $ 0.13 $ 0.02 $ 0.26 $ 0.70 $ 0.72
RESTRUCTURING EXPENSES (NET OF TAX) 0.06 0.06 0.08 0.20 0.12
LOSS FROM EXTINGUISHMENT OF MORTGAGE (NET OF TAX) -- -- -- 0.05 --
GAIN FROM SALE OF BUILDING (NET OF TAX) (0.01) (0.01) (0.04) (0.71) (0.04)
GAIN FROM DEBENTURE REPURCHASE (NET OF TAX) (0.05) (0.05) -- (0.05) --
-------- -------- -------- -------- --------
NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE
FROM CONTINUING OPERATIONS $ 0.13 $ 0.03 $ 0.30 $ 0.19 $ 0.80
======== ======== ======== ======== ========
* - @ 40% Statutory tax rate
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.