EX-99.1 2 brhc10030116_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1


For Immediate Release
 
 
For more information, contact:
 
Nathan R. Iles
 
Standard Motor Products, Inc.
 
(718) 392-0200

Standard Motor Products, Inc. Announces
Third Quarter 2021 Results, New Stock Repurchase Program and a Quarterly Dividend

New York, NY, October 28, 2021......Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months and nine months ended September 30, 2021.

Consolidated net sales for the third quarter of 2021 were $370.3 million, compared to consolidated net sales of $343.6 million during the comparable quarter in 2020. Earnings from continuing operations for the third quarter of 2021 were $29.2 million or $1.29 per diluted share, compared to $36.2 million or $1.59 per diluted share in the third quarter of 2020. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the third quarter of 2021 were $29.7 million or $1.32 per diluted share, compared to $36.2 million or $1.59 per diluted share in the third quarter of 2020.


Consolidated net sales for the nine months ended September 30, 2021, were $988.9 million, compared to consolidated net sales of $845.9 million during the comparable period in 2020.  Earnings from continuing operations for the nine months ended September 30, 2021, were $79.3 million or $3.50 per diluted share, compared to $57.7 million or $2.53 per diluted share in the comparable period of 2020.  Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the nine months ended September 30, 2021 and 2020 were $80.4 million or $3.54 per diluted share and $57.8 million or $2.53 per diluted share, respectively.

Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are extremely pleased with our third quarter results. We once again posted record sales, generating an increase of nearly 8% over a very strong third quarter of 2020 when business was surging as we emerged from pandemic-related lockdowns. Impressively, this quarter’s sales were up 20% from 2019.

“Year-to-date, our sales are up 17% over 2020, though the first half of last year was adversely impacted by the pandemic. However, the first nine months of 2021 are up 10.3% over 2019.

“By division, Engine Management sales were up 7.7% as compared to 2020, and up nearly 15% vs. 2019, with several contributing factors. We experienced a combination of strong demand, continued success from customer initiatives, new business wins, and the impact of recent acquisitions.

“Our Temperature Control sales were up 7.9% as compared to 2020, and up nearly 35% over 2019. This was one of the longest and hottest summers on record, and our business remained robust throughout the quarter.


“Third quarter earnings are down from the third quarter of 2020, but the 2020 results included many unique non-recurring benefits, related to the Covid-19 pandemic. However, third quarter 2021 earnings did compare favorably on a two-year stack, up almost 30% from a more normalized 2019. Most importantly, year-to-date earnings are at record levels, exceeding both 2020 and 2019 by 40%.”

“As anticipated and stated in our second quarter earnings announcement, we experienced some compression in our gross margin percentage in the third quarter, primarily in the Engine Management division. This was the result of two main factors. First, like many companies, we experienced a surge in various costs, including raw materials, labor and transportation. We will begin passing these costs on in the fourth quarter.

“The second component of our reduced gross margin percentage is related to our growth in non-aftermarket, specialized original equipment business, which we will discuss below. This business, which we believe has great potential for us, has a different margin profile than our aftermarket business – it has lower gross margins, but also lower SG&A expense, and thus generates comparable operating margins.

“Turning to acquisitions, on September 1st we announced that we had acquired Stabil Operative Group GmbH (“Stabil”), a European manufacturer of original equipment sensors, electronics, and clamping devices for passenger car and commercial vehicle applications. This marked our third acquisition this year, all geared towards expansion into specialized OE channels, including medium and heavy duty vehicles, construction and agricultural equipment, power sports, and other sub-segments. When combined with our legacy business in this arena, our non-aftermarket sales are approaching a run rate of $300 million annually. In addition to expanding beyond our core aftermarket business, it is also providing geographic expansion as we now have meaningful footprints to grow sales in Europe and Asia.


“We are extremely pleased with our efforts in growing our business in this channel. As we combine these different entities, we are able to take advantage of shared customer lists, product portfolios, manufacturing and engineering capabilities, and geographic reach. It is also important to note that much of this business is not beholden to internal combustion engines. Many of the products are either powertrain-neutral, or are geared toward electric and alternative energy vehicles. While we are still in the early days of integrating these businesses, the potential synergies and sales growth opportunities are very exciting.

“As we have continued to grow our business and post record results, we have also looked to return value to our shareholders. To this end, we repurchased shares of our common stock in the amount of $15.4 million during the quarter, bringing total repurchases to $26.5 million for the year so far. Further, our Board of Directors recently authorized an additional $30 million common stock repurchase plan.  Finally, our Board also approved payment of a quarterly dividend of 25 cents per share on the common stock outstanding. The dividend will be paid on December 1, 2021 to stockholders of record on November 15, 2021.

“In closing, we are very pleased with our year thus far. We have posted record sales and earnings, have consummated three complementary acquisitions, and have garnered substantial new business wins with existing accounts.  Our core market is doing very well and our relationships with our customers are strong. We have made major strides in expanding into new complementary markets with significant upside potential. As such, we are very excited about the future.”


Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, October 28, 2021.  The dial-in number is 888-632-3389 (domestic) or 785-424-1674 (international). The playback number is 800-934-8524 (domestic) or 402-220-6999 (international). The participant passcode is 30385.

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
   
NINE MONTHS ENDED
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2021
   
2020
   
2021
   
2020
 
   
(Unaudited)
   
(Unaudited)
 
NET SALES
 
$
370,310
   
$
343,609
   
$
988,939
   
$
845,850
 
                                 
COST OF SALES
   
265,105
     
235,861
     
700,678
     
603,349
 
                                 
GROSS PROFIT
   
105,205
     
107,748
     
288,261
     
242,501
 
                                 
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
   
66,509
     
59,497
     
183,316
     
163,698
 
RESTRUCTURING AND INTEGRATION EXPENSES
   
166
     
250
     
166
     
464
 
OTHER INCOME (EXPENSE), NET
   
8
     
(37
)
   
8
     
(31
)
                                 
OPERATING INCOME
   
38,538
     
47,964
     
104,787
     
78,308
 
                                 
OTHER NON-OPERATING INCOME, NET
   
780
     
514
     
2,247
     
592
 
                                 
INTEREST EXPENSE
   
652
     
462
     
1,356
     
2,107
 
                                 
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
   
38,666
     
48,016
     
105,678
     
76,793
 
                                 
PROVISION FOR INCOME TAXES
   
9,481
     
11,804
     
26,315
     
19,118
 
                                 
EARNINGS FROM CONTINUING OPERATIONS
   
29,185
     
36,212
     
79,363
     
57,675
 
                                 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
   
(5,122
)
   
(7,587
)
   
(7,139
)
   
(9,456
)
                                 
NET EARNINGS
   
24,063
     
28,625
     
72,224
     
48,219
 
                                 
NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST
   
13
     
-
     
32
     
-
 
                                 
NET EARNINGS ATTRIBUTABLE TO SMP (a)
 
$
24,050
   
$
28,625
   
$
72,192
   
$
48,219
 
                                 
                                 
NET EARNINGS ATTRIBUTABLE TO SMP
                               
EARNINGS FROM CONTINUING OPERATIONS
 
$
29,172
   
$
36,212
   
$
79,331
   
$
57,675
 
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
   
(5,122
)
   
(7,587
)
   
(7,139
)
   
(9,456
)
TOTAL
 
$
24,050
   
$
28,625
   
$
72,192
   
$
48,219
 
                                 
                                 
                                 
NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP
                 
BASIC EARNINGS FROM CONTINUING OPERATIONS
 
$
1.32
   
$
1.62
   
$
3.57
   
$
2.58
 
DISCONTINUED OPERATION
   
(0.23
)
   
(0.34
)
   
(0.32
)
   
(0.42
)
NET EARNINGS PER COMMON SHARE - BASIC
 
$
1.09
   
$
1.28
   
$
3.25
   
$
2.16
 
 
                               
 
                               
DILUTED EARNINGS FROM CONTINUING OPERATIONS
 
$
1.29
   
$
1.59
   
$
3.50
   
$
2.53
 
DISCONTINUED OPERATION
   
(0.22
)
   
(0.33
)
   
(0.32
)
   
(0.41
)
NET EARNINGS PER COMMON SHARE - DILUTED
 
$
1.07
   
$
1.26
   
$
3.18
   
$
2.12
 
 
                               
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
   
22,090,195
     
22,349,093
     
22,201,398
     
22,372,466
 
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
   
22,543,781
     
22,758,458
     
22,678,114
     
22,795,426
 

(a) “SMP” refers to Standard Motor Products, Inc. and subsidiaries.


STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income

(In thousands)

   
THREE MONTHS ENDED
            NINE MONTHS ENDED        
   
SEPTEMBER 30,
         
SEPTEMBER 30,
       
   
2021
         
2020
           
2021
           
2020
       
   
(Unaudited)
         
(Unaudited)
       
Revenues
                                                   
Ignition, Emission Control, Fuel & Safety Related System Products
 
$
208,443
         
$
190,891
         
$
574,595
         
$
498,204
       
Wire and Cable
   
38,708
           
38,663
           
117,790
           
105,621
       
Engine Management
   
247,151
           
229,554
           
692,385
           
603,825
       
                                                         
Compressors
 
$
75,080
         
$
70,785
         
$
178,031
         
$
141,011
       
Other Climate Control Parts
   
43,995
           
39,608
           
109,988
           
93,216
       
Temperature Control
   
119,075
           
110,393
           
288,019
           
234,227
       
                                                         
All Other
   
4,084
           
3,662
           
8,535
           
7,798
       
Revenues
 
$
370,310
         
$
343,609
         
$
988,939
         
$
845,850
       
                                                         
Gross Margin
                                                       
Engine Management
 
$
66,907
     
27.1
%  
$
72,361
     
31.5
%  
$
199,509
     
28.8
%  
$
175,296
     
29.0
%
Temperature Control
   
33,815
     
28.4
%    
32,212
     
29.2
%    
78,468
     
27.2
%    
60,828
     
26.0
%
All Other
   
4,676
       
   
3,175
       
   
10,562
       
   
6,377
       
Subtotal
 
$
105,398
     
28.5
%  
$
107,748
     
31.4
%  
$
288,539
     
29.2
%  
$
242,501
     
28.7
%
One-Time Acquisition Costs
   
(193
)
   
-0.1
%    
-
     
0.0
%    
(278
)
   
0.0
%    
-
     
0.0
%
Gross Margin
 
$
105,205
     
28.4
%  
$
107,748
     
31.4
%  
$
288,261
     
29.1
%  
$
242,501
     
28.7
%
               
             
             
             
               
             
             
             
Selling, General & Administrative
             
             
             
             
Engine Management
 
$
38,702
     
15.7
%  
$
35,665
     
15.5
%  
$
109,721
     
15.8
%  
$
100,237
     
16.6
%
Temperature Control
   
17,120
     
14.4
%    
15,571
     
14.1
%    
44,952
     
15.6
%    
40,568
     
17.3
%
All Other
   
10,029
       
   
8,261
       
   
27,315
       
   
22,893
       
Subtotal
 
$
65,851
     
17.8
%  
$
59,497
     
17.3
%  
$
181,988
     
18.4
%  
$
163,698
     
19.4
%
One-Time Acquisition Costs
   
658
     
0.2
%    
-
     
0.0
%    
1,328
     
0.1
%    
-
     
0.0
%
Selling, General & Administrative
 
$
66,509
     
18.0
%  
$
59,497
     
17.3
%  
$
183,316
     
18.5
%  
$
163,698
     
19.4
%
               
             
             
             
               
             
             
             
Operating Income
             
             
             
             
Engine Management
 
$
28,012
     
11.3
%  
$
36,696
     
16.0
%  
$
89,510
     
12.9
%  
$
75,059
     
12.4
%
Temperature Control
   
16,695
     
14.0
%    
16,641
     
15.1
%    
33,516
     
11.6
%    
20,260
     
8.6
%
All Other
   
(5,160
)
     
   
(5,086
)
     
   
(16,475
)
     
   
(16,516
)
     
Subtotal
  $
39,547
     
10.7
%   $
48,251
     
14.0
%   $
106,551
     
10.8
%   $
78,803
     
9.3
%
One-time Acquisition Costs
   
(851
)
   
-0.2
%    
-
     
0.0
%    
(1,606
)
   
-0.2
%    
-
     
0.0
%
Restructuring & Integration
   
(166
)
   
0.0
%    
(250
)
   
-0.1
%    
(166
)
   
0.0
%    
(464
)
   
-0.1
%
Other Income (Expense), Net
   
8
     
0.0
%    
(37
)
   
0.0
%    
8
     
0.0
%    
(31
)
   
0.0
%
Operating Income
 
$
38,538
     
10.4
%  
$
47,964
     
14.0
%  
$
104,787
     
10.6
%  
$
78,308
     
9.3
%


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

(In thousands, except per share amounts)

   
THREE MONTHS ENDED
     
NINE MONTHS ENDED
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2021
   
2020
     
2021
     
2020
 
   
(Unaudited)
   
(Unaudited)
 
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
                       
                             
GAAP EARNINGS FROM CONTINUING OPERATIONS
 
$
29,172
   
$
36,212
   
$
79,331
   
$
57,675
 
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
   
166
     
250
     
166
     
464
 
ONE-TIME ACQUISITION COSTS
   
851
     
-
     
1,606
     
-
 
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
     (259 )    
(235
)
   
(259
)
   
(235
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
   
(265
)
   
(65
)
   
(461
)
   
(121
)
                                 
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
 
$
29,665
   
$
36,162
   
$
80,383
   
$
57,783
 
                                 
                                 
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
                 
                                 
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  $
1.29    
$
1.59
   
$
3.50
   
$
2.53
 
                                 
RESTRUCTURING AND INTEGRATION EXPENSES
   
0.01
     
0.01
     
-
     
0.02
 
ONE-TIME ACQUISITION COSTS
   
0.04
     
-
     
0.07
     
-
 
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
    (0.01
)    
(0.01
)
   
(0.01
)
   
(0.01
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
   
(0.01
)
   
-
     
(0.02
)
   
(0.01
)
                                 
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
  $
1.32    
$
1.59
   
$
3.54
   
$
2.53
 
                                 
                                 
OPERATING INCOME
                               
                                 
GAAP OPERATING INCOME
 
$
38,538
   
$
47,964
   
$
104,787
   
$
78,308
 
                                 
ONE-TIME ACQUISITION COSTS
   
851
     
-
     
1,606
     
-
 
RESTRUCTURING AND INTEGRATION EXPENSES
   
166
     
250
     
166
     
464
 
OTHER (INCOME) EXPENSE, NET
   
(8
)
   
37
     
(8
)
   
31
 
                                 
NON-GAAP OPERATING INCOME
 
$
39,547
   
$
48,251
   
$
106,551
   
$
78,803
 

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS WHICH ARE ATTRIBUTABLE TO SMP, AND OPERATING INCOME, AS ADJUSTED FOR SPECIAL ITEMS, ARE NON-GAAP MEASUREMENTS AND 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)

   
SEPTEMBER 30,
2021
   
DECEMBER 31,
2020
 
   
(Unaudited)
       
             
ASSETS
           
             
CASH
 
$
33,144
   
$
19,488
 
                 
ACCOUNTS RECEIVABLE, GROSS
   
231,066
     
203,861
 
ALLOWANCE FOR DOUBTFUL ACCOUNTS
   
6,645
     
5,822
 
ACCOUNTS RECEIVABLE, NET
   
224,421
     
198,039
 
                 
INVENTORIES
   
414,657
     
345,502
 
UNRETURNED CUSTOMER INVENTORY
   
23,367
     
19,632
 
OTHER CURRENT ASSETS
   
15,268
     
15,875
 
                 
TOTAL CURRENT ASSETS
   
710,857
     
598,536
 
                 
PROPERTY, PLANT AND EQUIPMENT, NET
   
100,787
     
89,105
 
OPERATING LEASE RIGHT-OF-USE ASSETS
   
42,458
     
29,958
 
GOODWILL
   
131,549
     
77,837
 
OTHER INTANGIBLES, NET
   
108,312
     
54,004
 
DEFERRED INCOME TAXES
   
34,790
     
44,770
 
INVESTMENT IN UNCONSOLIDATED AFFILIATES
   
42,123
     
40,507
 
OTHER ASSETS
   
24,857
     
21,823
 
                 
TOTAL ASSETS
 
$
1,195,733
   
$
956,540
 
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
                 
NOTES PAYABLE
 
$
128,938
   
$
10,000
 
CURRENT PORTION OF OTHER DEBT
   
2,941
     
135
 
ACCOUNTS PAYABLE
   
128,808
     
100,018
 
ACCRUED CUSTOMER RETURNS
   
59,972
     
40,982
 
ACCRUED CORE LIABILITY
   
23,650
     
22,014
 
ACCRUED REBATES
   
43,110
     
46,437
 
PAYROLL AND COMMISSIONS
   
40,725
     
35,938
 
SUNDRY PAYABLES AND ACCRUED EXPENSES
   
50,227
     
47,078
 
                 
TOTAL CURRENT LIABILITIES
   
478,371
     
302,602
 
                 
OTHER LONG-TERM DEBT
   
68
     
97
 
NONCURRENT OPERATING LEASE LIABILITIES
   
33,246
     
22,450
 
ACCRUED ASBESTOS LIABILITIES
   
57,532
     
55,226
 
OTHER LIABILITIES
   
27,964
     
25,929
 
                 
TOTAL LIABILITIES
   
597,181
     
406,304
 
                 
TOTAL SMP STOCKHOLDERS’ EQUITY
   
587,018
     
550,236
 
NONCONTROLLING INTEREST
   
11,534
     
-
 
TOTAL STOCKHOLDERS’ EQUITY
   
598,552
     
550,236
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
1,195,733
   
$
956,540
 


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

(In thousands)

   
NINE MONTHS ENDED
SEPTEMBER 30,
 
   
2021
   
2020
 
   
(Unaudited)
       
             
CASH FLOWS FROM OPERATING ACTIVITIES
           
             
NET EARNINGS
 
$
72,224
   
$
48,219
 
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
         
PROVIDED BY OPERATING ACTIVITIES:
               
DEPRECIATION AND AMORTIZATION
   
20,160
     
19,313
 
OTHER
   
13,904
     
19,098
 
CHANGE IN ASSETS AND LIABILITIES:
               
ACCOUNTS RECEIVABLE
   
(15,343
)
   
(83,878
)
INVENTORIES
   
(52,742
)
   
53,330
 
ACCOUNTS PAYABLE
   
24,228
     
(13,117
)
PREPAID EXPENSES AND OTHER CURRENT ASSETS
   
2,324
     
5,634
 
SUNDRY PAYABLES AND ACCRUED EXPENSES
   
18,905
     
31,725
 
OTHER
   
(4,522
)
   
(1,719
)
NET CASH PROVIDED BY OPERATING ACTIVITIES
   
79,138
     
78,605
 
                 
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
                 
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
   
(124,663
)
   
-
 
CAPITAL EXPENDITURES
   
(19,406
)
   
(13,170
)
OTHER INVESTING ACTIVITIES
   
29
     
14
 
NET CASH USED IN INVESTING ACTIVITIES
   
(144,040
)
   
(13,156
)
                 
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
                 
NET CHANGE IN DEBT
   
121,854
     
(44,852
)
PURCHASE OF TREASURY STOCK
   
(26,518
)
   
(8,726
)
DIVIDENDS PAID
   
(16,678
)
   
(5,615
)
OTHER FINANCING ACTIVITIES
   
455
     
86
 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
   
79,113
     
(59,107
)
                 
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
   
(555
)
   
67
 
NET INCREASE IN CASH AND CASH EQUIVALENTS
   
13,656
     
6,409
 
CASH AND CASH EQUIVALENTS at beginning of Period
   
19,488
     
10,372
 
CASH AND CASH EQUIVALENTS at end of Period
 
$
33,144
   
$
16,781