NEW YORK, May 7 /PRNewswire-FirstCall/ -- Standard Motor Products, Inc.(NYSE: SMP), an automotive replacement parts manufacturer and distributor,reported today its consolidated financial results for the three months endingMarch 31, 2008.
Consolidated net sales for the first quarter of 2008 were $208.1 million,compared to consolidated net sales of $199.8 million during the comparablequarter in 2007. Earnings from continuing operations for the first quarter of2008 were $13.3 million or 68 cents per diluted share, compared to $2.9million or 16 cents per diluted share in the first quarter of 2007. Excludingrestructuring expenses for previously announced facility moves, a gain fromthe sale and leaseback of its corporate facilities in Long Island City, NewYork and the associated defeasance costs on the building mortgage, earningsfrom continuing operations for the first quarter 2008 were $3.1 million or17 cents per diluted share compared to earnings in the first quarter 2007 of$3.4 million or 18 cents per diluted share.
Commenting on the results, Mr. Lawrence I. Sills, Standard Motor Products'Chairman and Chief Executive Officer, stated, 'In addition to the financialresults, during the first quarter we made progress towards achieving ourstrategic plan. The four percent increase in net sales results primarily fromadditional original equipment service (OES) business, and this is one of ourkey strategic goals. We anticipate shipping to additional customers during thelatter part of the year. We are pleased with our progress in this area.
'A second strategic initiative is the relocation of our factories fromhigh cost to low cost areas. This is also progressing well. Puerto Rico andLong Island City have ceased manufacturing and we have begun to ramp upproduction in Reynosa, Mexico. As we have previously disclosed, we anticipatepartial savings in the second half 2008, though we will incur the balance ofthe move costs this year. We still forecast $9 million annual savings fromthese two plant closings in 2009.
'The one area that is not performing as well as we would like isTemperature Control. First, pre-season orders were lighter than usual,reflecting, we believe, substantial field inventories as well as generalconcern for the economy. Further, to compete with imports from China, weimplemented our second major price reduction in two years, this one totalingapproximately $6 million annually.
'As a result of these reductions, we feel we are now competitive with theChinese imports, but our margins are far from satisfactory. We are workingaggressively to reduce cost. We continue to shift compressor remanufacturingto Mexico, and in 2008 we will produce 120,000 more units in Mexico than in2007.
Our target is to produce 80%-90% of our rebuilt compressors in Mexico by2009. These moves, together with an internal cost reduction program, will helpoffset the lost margin due to price reductions.'
The Board of Directors has approved payment of a quarterly dividend ofnine cents per share on the common stock outstanding. The dividend will bepaid on June 2, 2008 to stockholders of record on May 15, 2008.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM,Eastern Time, on Wednesday, May 7, 2008. The dial in number is 800-862-9098(domestic) or 785-424-1051 (international). The playback number is800-753-6121 (domestic) or 402-220-2676 (international). The conference ID #is STANDARD.
Under the safe harbor provisions of the Private Securities LitigationReform Act of 1995, Standard Motor Products cautions investors that anyforward-looking statements made by the company, including those that may bemade in this press release, are based on management's expectations at the timethey are made, but they are subject to risks and uncertainties that may causeactual results, events or performance to differ materially from thosecontemplated by such forward looking statements. Among the factors that couldcause actual results, events or performance to differ materially from thoserisks and uncertainties discussed in this press release are those detailedfrom time-to-time in prior press releases and in the company's filings withthe Securities and Exchange Commission, including the company's annual reporton Form 10-K and quarterly reports on Form 10-Q. By making theseforward-looking statements, Standard Motor Products undertakes no obligationor intention to update these statements after the date of this release.
STANDARD MOTOR PRODUCTS, INC. Consolidated Statements of Operations
(In thousands, except share and per share amounts)
THREE MONTHS ENDED MARCH 31, 2008 2007 (Unaudited)
NET SALES $208,084 $199,815
COST OF SALES 156,860 147,940
GROSS PROFIT 51,224 51,875
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 44,062 42,731 RESTRUCTURING AND INTEGRATION EXPENSES 2,836 678
OPERATING INCOME 4,326 8,466
OTHER INCOME, NET 20,362 267
INTEREST EXPENSE 3,931 4,541
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 20,757 4,192
INCOME TAX EXPENSE 7,410 1,256
EARNINGS FROM CONTINUING OPERATIONS 13,347 2,936
DISCONTINUED OPERATION, NET OF TAX (326) (349)
NET EARNINGS $13,021 $2,587
NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS $0.73 $0.16 DISCONTINUED OPERATION (0.02) (0.02) NET EARNINGS PER COMMON SHARE - BASIC $0.71 $0.14
DILUTED EARNINGS FROM CONTINUING OPERATIONS $0.68 $0.16 DISCONTINUED OPERATION (0.02) (0.02) NET EARNINGS PER COMMON SHARE - DILUTED $0.66 $0.14
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 18,307,686 18,451,695 WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES 21,141,964 18,600,884
STANDARD MOTOR PRODUCTS CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
ASSETS
March 31, December 31, 2008 2007 (Unaudited)
Cash $14,593 $13,261
Accounts receivable, gross 267,006 213,409 Allowance for doubtful accounts 10,055 8,964 Accounts receivable, net 256,951 204,445
Inventories 250,469 252,277 Assets held for sale 1,959 5,373 Other current assets 29,578 27,751
Total current assets 553,550 503,107
Property, plant and equipment, net 69,590 71,775 Goodwill and other intangibles 57,178 57,891 Other assets 41,927 45,319
Total assets $722,245 $678,092
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $180,248 $156,756 Current portion of long term debt 162 8,021 Accounts payable trade 73,509 64,384 Accrued customer returns 23,375 23,149 Other current liabilities 64,728 67,723
Total current liabilities 342,022 320,033
Long-term debt 90,522 90,534 Accrued asbestos liability 22,463 22,651 Other Liabilities 66,273 56,510
Total liabilities 521,280 489,728
Total stockholders' equity 200,965 188,364
Total liabilities and stockholders' equity $722,245 $678,092
STANDARD MOTOR PRODUCTS, INC. Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31, EARNINGS FROM CONTINUING OPERATIONS 2008 2007 (Unaudited)
GAAP EARNINGS FROM CONTINUING OPERATIONS $13,347 $2,936
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX) 1,702 415
LOSS FROM EXTINGUISHMENT OF DEBT (NET OF TAX) 882 -
GAIN FROM SALE OF BUILDING (NET OF TAX) (12,875) -
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS $3,056 $3,351
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $0.68 $0.16
RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TAX) 0.09 0.02
LOSS FROM EXTINGUISHMENT OF DEBT (NET OF TAX) 0.05 -
GAIN FROM SALE OF BUILDING (NET OF TAX) (0.65) -
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS $0.17 $0.18
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.
SOURCE Standard Motor Products, Inc.
