EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1


For Immediate Release
  
 
For more information, contact:
 
James J. Burke
 
Standard Motor Products, Inc.
 
(718) 392-0200

Standard Motor Products, Inc. Announces

Fourth Quarter and 2019 Year-End Results

New York, NY, February 19, 2020......Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and twelve months ended December 31, 2019.

Consolidated net sales for the fourth quarter of 2019 were $241.3 million, compared to consolidated net sales of $247 million during the comparable quarter in 2018. Earnings from continuing operations for the fourth quarter of 2019 were $12.7 million or 56 cents per diluted share, compared to $12.2 million or 53 cents per diluted share in the fourth quarter of 2018. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the fourth quarter of 2019 were $13.6 million or 59 cents per diluted share, compared to $11.8 million or 52 cents per diluted share in the fourth quarter of 2018.

37-18 Northern Blvd., Long Island City, NY  11101
(718) 392-0200
www.smpcorp.com

Consolidated net sales for 2019 were $1,137.9 million, compared to consolidated net sales of $1,092.1 million during 2018.  Earnings from continuing operations for 2019 were $69.1 million or $3.03 per diluted share, compared to $56.9 million or $2.48 per diluted share in 2018.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the twelve months ended December 31, 2019 and 2018 were $70.8 million or $3.10 per diluted share and $58.5 million or $2.55 per diluted share, respectively.

Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are quite pleased with our 2019 results, as we set records for both sales and earnings. We achieved this despite some softness in sales in the fourth quarter, which was anticipated and previously announced.

“Engine Management sales were up 5.7% for the year. Excluding sales of $28 million from the Pollak acquisition, acquired on April 1, 2019, and wire and cable, a product line in secular decline, Engine Management sales were up 4.6% for the year.

“In the fourth quarter, Engine Management sales, excluding Pollak and wire and cable, were down 3.9%. As we stated in our third quarter release, for much of the year and for a variety of reasons, Engine Management sales ran ahead of the reported customer POS volume. As we know, these balance out over time. The drop in the fourth quarter represented a migration to our customers’ POS results and towards our long-term forecast for Engine Management of low single digit growth.

“Engine Management gross margins improved one percentage point for the year to 29.6% and 1.8 percentage points for the quarter to 30.6%. This reflects the completion of the integration of our wire operations in Mexico and a continued emphasis on cost reduction activities.  We are quite pleased with the progress we have made, returning to our historic margin levels.

“Temperature Control sales were flat for the year, as we were up against a very warm 2018. However, in the fourth quarter sales were down 12%. Temperature Control sales can vary significantly quarter to quarter based on the timing and size of pre-season orders and how hot it gets during the short selling season. For this product line, it is far more meaningful to look at the year as whole.

“The improvement in Temperature Control SG&A expenses in 2019 of $3.2 million primarily reflects savings in distribution costs as we continue to refine and improve our new automated warehouse system in Lewisville, Texas.

“We completed one acquisition and one business investment during 2019. In April, we acquired Pollak, a long time and highly respected manufacturer of sensors, switches and connectors, primarily for the OE, heavy duty and commercial vehicle markets. We have just completed moving the operation from Canton, Massachusetts and Juarez, Mexico to existing facilities in Reynosa, Mexico and Independence, Kansas, which will improve our cost structure. We plan to grow this product line in the years ahead.

“In August, we acquired a minority interest in Cheyijia New Energy Technology Co., Ltd.  (CYJ), a manufacturer of air conditioning compressors for electric vehicles, located in Changzhou, China. While CYJ is less than four years old and is still in its early stages, we are pleased that we are now in a position to provide compressors for the rapidly growing electric vehicle market.

“Our combined investment for these two businesses of less than $44 million was funded by the $77 million cash generated from operations in 2019. At year-end, our debt position was $57 million.”

Finally, on January 31, 2020, the Board of Directors of Standard Motor Products approved an increase in its quarterly dividend from 23 cents per share to 25 cents per share, payable on March 2, 2020.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, February 19, 2020.  The dial-in number is 877-876-9176 (domestic) or 785-424-1670 (international). The playback number is 800-727-6189 (domestic) or 402-220-2671 (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

(In thousands, except per share amounts)

   
THREE MONTHS ENDED
DECEMBER 31,
    
TWELVE MONTHS ENDED
DECEMBER 31,
  
   
2019
    
2018
    
2019
    
2018
  
   
(Unaudited)
    
(Unaudited)
  
NET SALES
  
$
241,252
    
$
246,970
    
$
1,137,913
    
$
1,092,051
  
                                 
COST OF SALES
    
168,408
      
175,367
      
806,113
      
779,264
  
                                 
GROSS PROFIT
    
72,844
      
71,603
      
331,800
      
312,787
  
                                 
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
54,232
      
55,732
      
234,715
      
231,336
  
RESTRUCTURING AND INTEGRATION EXPENSES
    
1,116
      
1,437
      
2,585
      
4,510
  
OTHER INCOME (EXPENSE), NET
    
10
      
3,999
      
(5
)
    
4,327
  
                                 
OPERATING INCOME
    
17,506
      
18,433
      
94,495
      
81,268
  
                                 
OTHER NON-OPERATING INCOME (EXPENSE), NET
    
305
      
(1,211
)
    
2,587
      
(411
)
                                 
INTEREST EXPENSE
    
967
      
889
      
5,286
      
4,026
  
                                 
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
    
16,844
      
16,333
      
91,796
      
76,831
  
                                 
PROVISION FOR INCOME TAXES
    
4,106
      
4,176
      
22,745
      
19,977
  
                                 
EARNINGS FROM CONTINUING OPERATIONS
    
12,738
      
12,157
      
69,051
      
56,854
  
                                 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
    
(1,220
)
    
(8,837
)
    
(11,134
)
    
(13,851
)
                                 
NET EARNINGS
  
$
11,518
    
$
3,320
    
$
57,917
    
$
43,003
  
                                 
NET EARNINGS PER COMMON SHARE:
                                
                                 
BASIC EARNINGS FROM CONTINUING OPERATIONS
  
$
0.57
    
$
0.54
    
$
3.09
    
$
2.53
  
DISCONTINUED OPERATION
    
(0.06
)
    
(0.39
)
    
(0.50
)
    
(0.62
)
NET EARNINGS PER COMMON SHARE - BASIC
  
$
0.51
    
$
0.15
    
$
2.59
    
$
1.91
  
                                 
DILUTED EARNINGS FROM CONTINUING OPERATIONS
  
$
0.56
    
$
0.53
    
$
3.03
    
$
2.48
  
DISCONTINUED OPERATION
    
(0.06
)
    
(0.39
)
    
(0.49
)
    
(0.60
)
NET EARNINGS PER COMMON SHARE - DILUTED
  
$
0.50
    
$
0.14
    
$
2.54
    
$
1.88
  
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    
22,434,134
      
22,432,095
      
22,378,414
      
22,456,480
  
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
    
22,882,235
      
22,941,271
      
22,818,451
      
22,931,723
  

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income

(In thousands)

   
THREE MONTHS ENDED
DECEMBER 31,
          
TWELVE MONTHS ENDED
DECEMBER 31,
        
   
2019
          
2018
          
2019
          
2018
        
   
(Unaudited)
          
(Unaudited)
        
Revenues
                                                
Ignition, Emission Control, Fuel & Safety Related System Products
  
$
167,276
          
$
165,630
          
$
705,994
          
$
648,270
        
Wire and Cable
    
34,681
            
37,370
            
143,167
            
155,217
        
Engine Management
    
201,957
            
203,000
            
849,161
            
803,487
        
                                                         
Compressors
    
15,405
            
16,736
            
160,485
            
148,416
        
Other Climate Control Parts
    
21,319
            
25,040
            
117,870
            
130,040
        
Temperature Control
    
36,724
            
41,776
            
278,355
            
278,456
        
                                                         
All Other
    
2,571
            
2,194
            
10,397
            
10,108
        
Revenues
  
$
241,252
          
$
246,970
          
$
1,137,913
          
$
1,092,051
        
                                                         
Gross Margin
                                                        
Engine Management
  
$
61,823
    
30.6
%
  
$
58,509
    
28.8
%
  
$
251,560
    
29.6
%
  
$
229,949
    
28.6
%
Temperature Control
    
8,349
    
22.7
%
    
9,571
    
22.9
%
    
70,064
    
25.2
%
    
70,561
    
25.3
%
All Other
    
2,672
            
3,523
            
10,176
            
12,277
        
Gross Margin
  
$
72,844
    
30.2
%
  
$
71,603
    
29.0
%
  
$
331,800
    
29.2
%
  
$
312,787
    
28.6
%
                                                         
Selling, General & Administrative
                                                        
Engine Management
  
$
34,439
    
17.1
%
  
$
34,588
    
17.0
%
  
$
145,162
    
17.1
%
  
$
141,003
    
17.5
%
Temperature Control
    
11,364
    
30.9
%
    
13,058
    
31.3
%
    
56,397
    
20.3
%
    
59,569
    
21.4
%
All Other
    
8,429
            
8,086
            
33,156
            
30,764
        
Selling, General & Administrative
  
$
54,232
    
22.5
%
  
$
55,732
    
22.6
%
  
$
234,715
    
20.6
%
  
$
231,336
    
21.2
%
                                                         
                                                         
Operating Income
                                                        
Engine Management
  
$
27,384
    
13.6
%
  
$
23,921
    
11.8
%
  
$
106,398
    
12.5
%
  
$
88,946
    
11.1
%
Temperature Control
    
(3,015
)
  
-8.2
%
    
(3,487
)
  
-8.3
%
    
13,667
    
4.9
%
    
10,992
    
3.9
%
All Other
    
(5,757
)
          
(4,563
)
          
(22,980
)
          
(18,487
)
      
Subtotal
    
18,612
    
7.7
%
    
15,871
    
6.4
%
    
97,085
    
8.5
%
    
81,451
    
7.5
%
Restructuring & Integration
    
(1,116
)
  
-0.5
%
    
(1,437
)
  
-0.6
%
    
(2,585
)
  
-0.2
%
    
(4,510
)
  
-0.4
%
Other Income (Expense), Net
    
10
    
0.0
%
    
3,999
    
1.6
%
    
(5
)
  
0.0
%
    
4,327
    
0.4
%
Operating Income
  
$
17,506
    
7.3
%
  
$
18,433
    
7.5
%
  
$
94,495
    
8.3
%
  
$
81,268
    
7.4
%

STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures

(In thousands, except per share amounts)

   
THREE MONTHS ENDED
DECEMBER 31,
    
TWELVE MONTHS ENDED
DECEMBER 31,
  
   
2019
    
2018
    
2019
    
2018
  
   
(Unaudited)
    
(Unaudited)
  
EARNINGS FROM CONTINUING OPERATIONS
                        
                         
GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
12,738
    
$
12,157
    
$
69,051
    
$
56,854
  
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
1,116
      
1,437
      
2,585
      
4,510
  
IMPAIRMENT OF OUR INVESTMENT IN ORANGE ELECTRONICS CO.,LTD
    
-
      
1,683
      
-
      
1,683
  
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    
-
      
-
      
(144
)
    
(144
)
GAIN FROM SALE OF BUILDINGS
    
-
      
(3,940
)
    
-
      
(4,158
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
(291
)
    
492
      
(673
)
    
(250
)
                                 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
  
$
13,563
    
$
11,829
    
$
70,819
    
$
58,495
  
                                 
                                 
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
                                
                                 
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.56
    
$
0.53
    
$
3.03
    
$
2.48
  
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
0.05
      
0.06
      
0.11
      
0.20
  
IMPAIRMENT OF OUR INVESTMENT IN ORANGE ELECTRONICS CO.,LTD
    
-
      
0.07
      
-
      
0.07
  
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    
-
      
-
      
(0.01
)
    
(0.01
)
GAIN FROM SALE OF BUILDINGS
    
-
      
(0.17
)
    
-
      
(0.18
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
    
(0.02
)
    
0.03
      
(0.03
)
    
(0.01
)
                                 
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  
$
0.59
    
$
0.52
    
$
3.10
    
$
2.55
  
                                 
                                 
OPERATING INCOME
                                
                                 
GAAP OPERATING INCOME
  
$
17,506
    
$
18,433
    
$
94,495
    
$
81,268
  
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
    
1,116
      
1,437
      
2,585
      
4,510
  
OTHER (INCOME) EXPENSE, NET
    
(10
)
    
(3,999
)
    
5
      
(4,327
)
                                 
NON-GAAP OPERATING INCOME
  
$
18,612
    
$
15,871
    
$
97,085
    
$
81,451
  

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS, DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS, AND OPERATING INCOME, EACH OF WHICH ARE NON-GAAP MEASUREMENTS AND ARE ADJUSTED FOR SPECIAL ITEMS, 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, INC.
Condensed Consolidated Balance Sheets

(In thousands)

   
December 31,
2019
    
December 31,
2018
  
   
(Unaudited)
        
             
ASSETS
  
             
CASH
  
$
10,372
    
$
11,138
  
                 
ACCOUNTS RECEIVABLE, GROSS
    
140,728
      
163,222
  
ALLOWANCE FOR DOUBTFUL ACCOUNTS
    
5,212
      
5,687
  
ACCOUNTS RECEIVABLE, NET
    
135,516
      
157,535
  
                 
INVENTORIES
    
368,221
      
349,811
  
UNRETURNED CUSTOMER INVENTORY
    
19,722
      
20,484
  
OTHER CURRENT ASSETS
    
15,602
      
7,256
  
                 
TOTAL CURRENT ASSETS
    
549,433
      
546,224
  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    
89,649
      
90,754
  
OPERATING LEASE RIGHT-OF-USE ASSETS
    
36,020
      
-
  
GOODWILL
    
77,802
      
67,321
  
OTHER INTANGIBLES, NET
    
64,861
      
48,411
  
DEFERRED INCOME TAXES
    
37,272
      
42,334
  
INVESTMENT IN UNCONSOLIDATED AFFILIATES
    
38,858
      
32,469
  
OTHER ASSETS
    
18,835
      
15,619
  
                 
TOTAL ASSETS
  
$
912,730
    
$
843,132
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
  
                 
                 
NOTES PAYABLE
  
$
52,460
    
$
43,689
  
CURRENT PORTION OF OTHER DEBT
    
4,456
      
5,377
  
ACCOUNTS PAYABLE
    
92,535
      
94,357
  
ACCRUED CUSTOMER RETURNS
    
44,116
      
57,433
  
ACCRUED CORE LIABILITY
    
24,357
      
31,263
  
OTHER CURRENT LIABILITIES
    
91,540
      
80,467
  
                 
TOTAL CURRENT LIABILITIES
    
309,464
      
312,586
  
                 
OTHER LONG-TERM DEBT
    
129
      
153
  
NONCURRENT OPERATING LEASE LIABILITIES
    
28,376
      
-
  
ACCRUED ASBESTOS LIABILITIES
    
49,696
      
45,117
  
OTHER LIABILITIES
    
20,837
      
18,075
  
                 
TOTAL LIABILITIES
    
408,502
      
375,931
  
                 
TOTAL STOCKHOLDERS' EQUITY
    
504,228
      
467,201
  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
912,730
    
$
843,132
  

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows

(In thousands)

   
TWELVE MONTHS ENDED
DECEMBER 31,
  
   
2019
    
2018
  
   
(Unaudited)
  
             
CASH FLOWS FROM OPERATING ACTIVITIES
            
             
NET EARNINGS
  
$
57,917
    
$
43,003
  
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
                
PROVIDED BY OPERATING ACTIVITIES:
                
DEPRECIATION AND AMORTIZATION
    
25,809
      
24,104
  
DEFERRED INCOME TAXES
    
5,094
      
(10,024
)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES
    
11,134
      
13,851
  
OTHER
    
11,359
      
11,749
  
CHANGE IN ASSETS AND LIABILITIES:
                
ACCOUNTS RECEIVABLE
    
17,929
      
(13,699
)
INVENTORIES
    
(17,901
)
    
(30,199
)
ACCOUNTS PAYABLE
    
(1,950
)
    
16,894
  
PREPAID EXPENSES AND OTHER CURRENT ASSETS
    
(8,296
)
    
4,926
  
SUNDRY PAYABLES AND ACCRUED EXPENSES
    
(18,097
)
    
8,407
  
OTHER
    
(6,070
)
    
1,246
  
NET CASH PROVIDED BY OPERATING ACTIVITIES
    
76,928
      
70,258
  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
                 
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
    
(43,490
)
    
(9,852
)
NET PROCEEDS FROM SALE OF FACILITY
    
4,801
      
-
  
CAPITAL EXPENDITURES
    
(16,185
)
    
(20,141
)
OTHER INVESTING ACTIVITIES
    
62
      
107
  
NET CASH USED IN INVESTING ACTIVITIES
    
(54,812
)
    
(29,886
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
                 
NET CHANGE IN DEBT
    
7,860
      
(12,196
)
PURCHASE OF TREASURY STOCK
    
(10,738
)
    
(14,886
)
DIVIDENDS PAID
    
(20,593
)
    
(18,854
)
OTHER FINANCING ACTIVITIES
    
93
      
(185
)
NET CASH USED IN FINANCING ACTIVITIES
    
(23,378
)
    
(46,121
)
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
496
      
(436
)
NET DECREASE IN CASH AND CASH EQUIVALENTS
    
(766
)
    
(6,185
)
CASH AND CASH EQUIVALENTS at beginning of year
    
11,138
      
17,323
  
CASH AND CASH EQUIVALENTS at end of year
  
$
10,372
    
$
11,138