Standard Motor Products, Inc. SMP

NYS: SMP | ISIN: US8536661056   27/03/2024
33,80 USD (+3,33%)
(+3,33%)   27/03/2024

Standard Motor Products, Inc. Announces First Quarter 2023 Results

NEW YORK, May 3, 2023 /PRNewswire/ -- Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months ended March 31, 2023.

Net sales for the first quarter of 2023 were $328.0 million, compared to consolidated net sales of $322.8 million during the comparable quarter in 2022. Earnings from continuing operations for the first quarter of 2023 were $12.7 million or $0.57 per diluted share, compared to $20.6 million or $0.91 per diluted share in the first quarter of 2022. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the first quarter of 2023 were $13.4 million or $0.61 per diluted share, compared to $20.6 million or $0.92 per diluted share in the first quarter of 2022.

Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are pleased with our first quarter results, as sales increased 1.6% against a difficult comparison, as last year's first quarter was up 17% from the previous year."

By segment, Vehicle Control sales were up 4.1% in the quarter, reflecting continued strength in demand within the aftermarket. Our customers' POS throughout the quarter also remained favorable, which bodes well for future demand.

Turning to Temperature Control, sales declined a modest 0.9% versus the almost 30% growth experienced during the same quarter last year.  As a seasonal business, first quarter sales are heavily dependent on customer preseason ordering patterns, and therefore not indicative of the full year.

Engineered Solutions sales were 2% lower than last year's first quarter, but 5% higher than the quarterly average sales level achieved in 2022. We expect this segment to be slightly lumpy quarter to quarter as a result of changes in customer order patterns.  Based upon customer interest, we continue to believe long-term sales growth will be strong, though revenue growth from business wins is not linear. 

Looking at profitability, consolidated non-GAAP operating profit margin was 6.6% in the quarter versus 8.3% in the first quarter last year. The decline in profit of $5.3 million was mainly the result of a $5.5 million increase in customer factoring program expense over last year, due to rising interest rates.  Excluding these incremental factoring costs, our operating expenses would have been flat year over year at 19.5% of net sales.  Adjusted EBITDA margin was 8.8% in the quarter versus 11.0% last year and was impacted by the above-mentioned factoring expense.  We continue to implement both pricing and cost savings initiatives to help offset rising interest cost increases and lingering inflationary pressures on certain commodities and labor expense.

Our sales and profit expectations for the full year of 2023 remain unchanged with top line sales growth expected to be in the low single digits with an Adjusted EBITDA margin of approximately 10% of revenue, assuming current interest rates. 

As part of our commitment to return value to shareholders, the Board of Directors has approved payment of a quarterly dividend of 29 cents per share on the common stock outstanding, which will be paid on June 1, 2023 to stockholders of record on May 15, 2023.

As we recently announced, we are pleased to have published our 2022 Corporate Sustainability report.  This report outlines our commitment to being environmentally and socially responsible, and highlights the noticeable progress we have made to date. We remain committed to leveraging sustainability as a catalyst for positive change both within our organization and in the communities within which we operate.

In closing, Mr. Sills commented, "While uncertainty remains, we continue to be bullish on all of our markets. The aftermarket has a long history of stability in challenging economic times, and while still relatively new to us, we are excited about where we are heading with our Engineered Solutions business and the attention it has been getting from its customer base.  We will continue to look for ways to drive growth, offset rising costs and deliver increasing value to all our customers and stakeholders alike."

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 3, 2023.  This call will be web cast and can be accessed on the Investor Relations page of our website at www.smpcorp.com and clicking on the SMP Q1 2023 Earnings Webcast link.  Investors may also listen to the call by dialing 800-225-9448 (domestic) or 203-518-9708 (international).  Our playback will be made available for dial in immediately following the call.  For those choosing to listen to the replay by webcast, the link should be active on our website within 24 hours after the call.  The playback number is 800-934-4245 (domestic) or 402-220-1173 (international). The participant passcode is 94640.

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





MARCH 31,





2023



2022





(Unaudited)



NET SALES


$       328,028

100.0 %


$       322,831

100.0 %










COST OF SALES


236,761

72.2 %


232,991

72.2 %










GROSS PROFIT


91,267

27.8 %


89,840

27.8 %










SELLING, GENERAL & ADMINISTRATIVE EXPENSES


69,633

21.2 %


62,884

19.5 %


RESTRUCTURING AND INTEGRATION EXPENSES


912

0.3 %


41

0.0 %


OTHER INCOME, NET


24

0.0 %


-

0.0 %










OPERATING INCOME 


20,746

6.3 %


26,915

8.3 %










OTHER NON-OPERATING INCOME, NET


225

0.1 %


1,449

0.4 %










INTEREST EXPENSE


3,862

1.2 %


805

0.2 %










EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


17,109

5.2 %


27,559

8.5 %










PROVISION FOR INCOME TAXES


4,372

1.3 %


7,005

2.2 %










EARNINGS FROM CONTINUING OPERATIONS


12,737

3.9 %


20,554

6.4 %










LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(780)

-0.2 %


(1,116)

-0.3 %










NET EARNINGS


11,957

3.6 %


19,438

6.0 %










NET EARNINGS (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST

39

0.0 %


(8)

0.0 %










NET EARNINGS ATTRIBUTABLE TO SMP (a)


$         11,918

3.6 %


$         19,446

6.0 %


















NET EARNINGS ATTRIBUTABLE TO SMP 








EARNINGS FROM CONTINUING OPERATIONS


$         12,698

3.9 %


$         20,562

6.4 %


LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(780)

-0.2 %


(1,116)

-0.3 %


TOTAL


$         11,918

3.6 %


$         19,446

6.0 %


















NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP








   BASIC EARNINGS FROM CONTINUING OPERATIONS


$             0.59



$             0.94



   DISCONTINUED OPERATION


(0.04)



(0.06)



   NET EARNINGS PER COMMON SHARE - BASIC


$             0.55



$             0.88



















   DILUTED EARNINGS  FROM CONTINUING OPERATIONS


$             0.57



$             0.91



   DISCONTINUED OPERATION


(0.03)



(0.04)



   NET EARNINGS  PER COMMON SHARE - DILUTED


$             0.54



$             0.87



















WEIGHTED AVERAGE NUMBER OF COMMON SHARES


21,609,618



21,978,507



WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


22,097,750



22,477,819











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








 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit















(In thousands)









THREE MONTHS ENDED




March 31, 




2023



2022




(Unaudited)


Revenues







Engine Management (Ignition, Emissions and







Fuel Delivery)


$       116,083



$       109,149


Electrical and Safety


51,804



52,257


Wire sets and other


16,690



15,858


        Vehicle Control


184,577



177,264









AC System Components


45,752



47,374


Other Thermal Components


26,654



25,684


        Temperature Control


72,406



73,058









Commercial Vehicle


19,857



21,451


Construction / Agriculture


12,795



10,984


Light Vehicle


22,966



26,075


All Other


15,427



13,999


        Engineered Solutions


71,045



72,509









        Revenues


$       328,028



$       322,831









Gross Margin







Vehicle Control


$         58,472

31.7 %


$         55,424

31.3 %

Temperature Control


19,155

26.5 %


19,488

26.7 %

Engineered Solutions


13,640

19.2 %


14,928

20.6 %

All Other


-



-


        Gross Margin


$         91,267

27.8 %


$         89,840

27.8 %








Selling, General & Administrative







Vehicle Control


$         40,836

22.1 %


$         35,039

19.8 %

Temperature Control


16,528

22.8 %


15,326

21.0 %

Engineered Solutions


7,909

11.1 %


8,640

11.9 %

All Other


4,360



3,879


        Selling, General & Administrative


$         69,633

21.2 %


$         62,884

19.5 %








Operating Income







Vehicle Control


$         17,636

9.6 %


$         20,385

11.5 %

Temperature Control


2,627

3.6 %


4,162

5.7 %

Engineered Solutions


5,731

8.1 %


6,288

8.7 %

All Other


(4,360)



(3,879)


        Subtotal


$         21,634

6.6 %


$         26,956

8.3 %

Restructuring & Integration


(912)

-0.3 %


(41)

0.0 %

Other Income, Net


24

0.0 %


-

0.0 %

        Operating Income


$         20,746

6.3 %


$         26,915

8.3 %

 

STANDARD MOTOR PRODUCTS, INC.






Reconciliation of GAAP and Non-GAAP Measures


















































(In thousands, except per share amounts)













THREE MONTHS ENDED









MARCH 31,









2023


2022









(Unaudited)







EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP






















GAAP EARNINGS FROM CONTINUING OPERATIONS


$          12,698


$          20,562


















RESTRUCTURING AND INTEGRATION EXPENSES


912


41







INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(237)


(11)







NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$          13,373


$          20,592





























DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP





















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$             0.57


$             0.91


















RESTRUCTURING AND INTEGRATION EXPENSES


0.04


0.01







INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


-


-


















NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$             0.61


$             0.92





























OPERATING INCOME






















GAAP OPERATING INCOME


$          20,746


$          26,915


















RESTRUCTURING AND INTEGRATION EXPENSES


912


41







OTHER INCOME, NET


(24)


-


LAST TWELVE MONTHS ENDED


YEAR ENDED







MARCH 31,


DECEMBER 31,

NON-GAAP OPERATING INCOME


$          21,634


$          26,956


2023


2022


2022







(Unaudited)



EBITDA WITHOUT SPECIAL ITEMS






















GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


$          17,109


$          27,559


$          87,882


$        128,274


$           98,332












DEPRECIATION AND AMORTIZATION


7,082


6,952


28,428


27,681


28,298

INTEREST EXPENSE


3,862


805


13,674


2,624


10,617

     EBITDA


28,053


35,316


129,984


158,579


137,247












RESTRUCTURING AND INTEGRATION EXPENSES


912


41


2,762


433


1,891

CUSTOMER BANKRUPTCY CHARGE


-


-


7,002


-


7,002

ONE-TIME ACQUISITION COSTS


-


-


-


1,711


-

    SPECIAL ITEMS


912


41


9,764


2,144


8,893












EBITDA WITHOUT SPECIAL ITEMS


$          28,965


$          35,357


$        139,748


$        160,723


$         146,140
























MANAGEMENT BELIEVES THAT NON-GAAP EARNINGS FROM CONTINUING OPERATIONS AND NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS WHICH ARE ATTRIBUTABLE TO SMP, AND NON-GAAP OPERATING INCOME AND EBITDA WITHOUT SPECIAL ITEMS, 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.

Reconciliation of GAAP and Non-GAAP Measures by Segments 









































































(In thousands)


THREE MONTHS ENDED MARCH 31, 2023




Vehicle Control


Temperature Control


Engineered Solutions


All Other 


Consolidated




(Unaudited)


OPERATING INCOME
























GAAP OPERATING INCOME


$          17,375


$            2,084


$           5,647


$           (4,360)


$          20,746














RESTRUCTURING AND INTEGRATION EXPENSES


285


543


84


-


912


OTHER INCOME, NET


(24)


-


-


-


(24)














NON-GAAP OPERATING INCOME


$          17,636


$            2,627


$           5,731


$           (4,360)


$          21,634














EBITDA WITHOUT SPECIAL ITEMS
























GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


$          15,057


$            1,105


$           5,286


$           (4,339)


$          17,109














DEPRECIATION AND AMORTIZATION


3,412


763


2,481


426


7,082


INTEREST EXPENSE


2,741


893


359


(131)


3,862


     EBITDA


21,210


2,761


8,126


(4,044)


28,053














RESTRUCTURING AND INTEGRATION EXPENSES


285


543


84


-


912


    SPECIAL ITEMS


285


543


84


-


912














EBITDA WITHOUT SPECIAL ITEMS


$          21,495


$            3,304


$           8,210


$           (4,044)


$          28,965


% of Net Sales


11.6 %


4.6 %


11.6 %




8.8 %
















THREE MONTHS ENDED MARCH 31, 2022




Vehicle Control


Temperature Control


Engineered Solutions


All Other 


Consolidated




(Unaudited)


OPERATING INCOME
























GAAP OPERATING INCOME


$          20,344


$            4,162


$           6,288


$           (3,879)


$          26,915














RESTRUCTURING AND INTEGRATION EXPENSES


41


-


-


-


41


OTHER INCOME, NET


-


-


-


-


-














NON-GAAP OPERATING INCOME


$          20,385


$            4,162


$           6,288


$           (3,879)


$          26,956














EBITDA WITHOUT SPECIAL ITEMS
























GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


$          20,366


$            4,480


$           6,578


$           (3,865)


$          27,559














DEPRECIATION AND AMORTIZATION


3,417


680


2,458


397


6,952


INTEREST EXPENSE


575


160


146


(76)


805


     EBITDA


24,358


5,320


9,182


(3,544)


35,316














RESTRUCTURING AND INTEGRATION EXPENSES


41


-


-


-


41


    SPECIAL ITEMS


41


-


-


-


41














EBITDA WITHOUT SPECIAL ITEMS


$          24,399


$            5,320


$           9,182


$           (3,544)


$          35,357


% of Net Sales


13.8 %


7.3 %


12.7 %




11.0 %















MANAGEMENT BELIEVES THAT NON-GAAP OPERATING INCOME AND EBITDA WITHOUT SPECIAL ITEMS, 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)























MARCH


MARCH


DECEMBER



2023


2022


2022



(Unaudited)


(Unaudited)










ASSETS








CASH


$         24,196


$         19,999


$         21,150








ACCOUNTS RECEIVABLE, GROSS


216,617


231,963


173,013

ALLOWANCE FOR EXPECTED CREDIT LOSSES


5,816


6,660


5,375

ACCOUNTS RECEIVABLE, NET


210,801


225,303


167,638








INVENTORIES


522,039


534,421


528,715

UNRETURNED CUSTOMER INVENTORY


20,626


22,221


19,695

OTHER CURRENT ASSETS


26,192


17,471


25,241








TOTAL CURRENT ASSETS


803,854


819,415


762,439








PROPERTY, PLANT AND EQUIPMENT, NET


107,123


102,984


107,148

OPERATING LEASE RIGHT-OF-USE ASSETS


74,291


42,116


49,838

GOODWILL


132,289


131,538


132,087

OTHER INTANGIBLES, NET


98,389


104,344


100,504

DEFERRED INCOME TAXES


33,893


35,964


33,658

INVESTMENT IN UNCONSOLIDATED AFFILIATES


42,719


45,518


41,745

OTHER ASSETS


27,462


28,530


27,510








TOTAL ASSETS


$    1,320,020


$    1,310,409


$    1,254,929















LIABILITIES AND STOCKHOLDERS' EQUITY















CURRENT PORTION OF REVOLVING CREDIT FACILITY


$         52,600


$       245,450


$         50,000

CURRENT PORTION OF TERM LOAN AND OTHER DEBT

5,014


3,235


5,031

ACCOUNTS PAYABLE


94,372


139,392


89,247

ACCRUED CUSTOMER RETURNS


42,153


46,085


37,169

ACCRUED CORE LIABILITY


21,319


23,513


22,952

ACCRUED REBATES


39,657


42,606


37,381

PAYROLL AND COMMISSIONS


24,268


31,972


31,361

SUNDRY PAYABLES AND ACCRUED EXPENSES


42,041


45,875


49,990








TOTAL CURRENT LIABILITIES


321,424


578,128


323,131








LONG-TERM DEBT


215,487


-


184,589

NONCURRENT OPERATING LEASE LIABILITY


65,319


32,281


40,709

ACCRUED ASBESTOS LIABILITIES


60,820


51,909


63,305

OTHER LIABILITIES


24,298


25,178


22,157








 TOTAL LIABILITIES 


687,348


687,496


633,891








TOTAL SMP STOCKHOLDERS' EQUITY


621,644


611,871


610,020

NONCONTROLLING INTEREST


11,028


11,042


11,018

 TOTAL STOCKHOLDERS' EQUITY 


632,672


622,913


621,038








 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 


$    1,320,020


$    1,310,409


$    1,254,929

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows




















(In thousands)



















THREE MONTHS ENDED



MARCH 31,



2023



2022



(Unaudited)








CASH FLOWS FROM OPERATING ACTIVITIES












NET EARNINGS 

$       11,957



$       19,438


ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH






USED IN OPERATING ACTIVITIES:






DEPRECIATION AND AMORTIZATION

7,082



6,952


OTHER

4,587



4,374


CHANGE IN ASSETS AND LIABILITIES:






ACCOUNTS RECEIVABLE

(42,617)



(44,706)


INVENTORY 

6,195



(67,662)


ACCOUNTS PAYABLE

4,809



1,942


PREPAID EXPENSES AND OTHER CURRENT ASSETS

1,165



2,171


SUNDRY PAYABLES AND ACCRUED EXPENSES 

(10,656)



(21,226)


OTHER

(2,964)



(5,245)


NET CASH USED IN OPERATING ACTIVITIES

(20,442)



(103,962)














CASH FLOWS FROM INVESTING ACTIVITIES












CAPITAL EXPENDITURES

(4,363)



(6,449)


OTHER INVESTING ACTIVITIES

13



-


NET CASH USED IN INVESTING ACTIVITIES 

(4,350)



(6,449)














CASH FLOWS FROM FINANCING ACTIVITIES












NET CHANGE IN DEBT

33,478



120,340


PURCHASE OF TREASURY STOCK

-



(6,517)


DIVIDENDS PAID

(6,261)



(5,935)


OTHER FINANCING ACTIVITIES

125



444


NET CASH PROVIDED BY FINANCING ACTIVITIES

27,342



108,332














EFFECT OF EXCHANGE RATE CHANGES ON CASH

496



323


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

3,046



(1,756)


CASH AND CASH EQUIVALENTS at beginning of period

21,150



21,755


CASH AND CASH EQUIVALENTS at end of period

$       24,196



$       19,999

 

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SOURCE Standard Motor Products, Inc.

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