Standard Motor Products, Inc. Announces First Quarter 2022 Results and a Quarterly Dividend

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Standard Motor Products reported net sales of $322.8 million for Q1 2022, up 17% from Q1 2021. Earnings from continuing operations were $20.6 million or 91 cents per diluted share, down from $22.2 million or 97 cents in the previous year. The company declared a quarterly dividend of 27 cents per share, payable on June 1, 2022. Operating margins declined to 8.3% due to inflation and supply chain costs, with expectations of gross margins between 28-29% for the full year. The company remains optimistic despite challenges including inflation and supply chain issues.

Positive

• Net sales increased 17% year-over-year to $322.8 million.
• Quarterly dividend of 27 cents per share approved, enhancing shareholder value.
• Growth in specialized business channels represented 23% of revenue, up from 17%.

Negative

• Earnings per diluted share decreased from 97 cents to 91 cents year-over-year.
• Operating margins fell to 8.3% from 10.6% due to inflation and supply chain costs.

NEW YORK, May 3, 2022 /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, 2022.

"Our sales increased nearly 17% over last year's strong first quarter, posting our seventh consecutive record quarter."

Net sales for the first quarter of 2022 were $322.8 million, compared to consolidated net sales of $276.6 million during the comparable quarter in 2021. Earnings from continuing operations for the first quarter of 2022 were $20.6 million or 91 cents per diluted share, compared to $22.2 million or 97 cents per diluted share in the first quarter of 2021. 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 2022 were $20.6 million or 92 cents per diluted share, compared to $22.2 million or 97 cents per diluted share in the first quarter of 2021.

Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are quite pleased with our first quarter results. Our sales increased nearly 17% over last year's strong first quarter, posting our seventh consecutive record quarter, with solid performance in both divisions.   

"By division, Engine Management sales were up nearly 13% in the quarter, driven by sales from acquisitions made during 2021, along with solid customer demand, price increase benefits, and phase-in of business wins.

"Turning to Temperature Control, the robust year-end demand from 2021 has continued as sales in the quarter grew 30% year over year.  This strong performance was due to a combination of strong pre-season orders, ongoing customer replenishment, and new business wins in winter-related categories.

"Looking at profitability, consolidated operating margins were in line with expectations, finishing at 8.3% in the first quarter, down from 10.6% in the first quarter of 2021. Our lower operating income was mainly the result of lower gross margins in both divisions, partly offset by continued improvement in operating costs, which were down to 19.5% of net sales in the quarter.

"As we've noted before, last year's gross margin enjoyed many non-recurring benefits from reopening after COVID, while this year was impacted by inflationary headwinds and elevated supply chain costs. While we were successful in passing through some of these higher costs, we anticipate more pricing actions to be taken in 2022 to match our elevated expenses during this volatile inflationary environment. We expect our consolidated gross margin will be in the range of 28-29% for the full year after taking into account more normalized production levels, pricing to offset inflation, as well as a mix shift to higher sales in our specialized non-aftermarket channels.

"These specialized business channels, which focus on custom-engineered products for niche end markets such as medium and heavy-duty vehicles, construction and agricultural equipment, power sports, and others, represented 23% of our revenue in the first quarter of 2022, compared to 17% the prior year, with most of the growth related to our recent acquisitions. As we have stated in the past, we are quite excited about this business as it brings new customers, products and geographies and is highly complementary to our core aftermarket business.   

"As we seek to improve our transparency related to sustainability, we are pleased to have recently published our 2021 Corporate Social Responsibility and Sustainability report. In it, we announced our ambition to achieve net-zero greenhouse gas emissions by 2050, and introduced specific reduction targets related to our scope 1 and scope 2 emissions, along with many other first-time environmental and diversity disclosures.

"Our strong operating results have allowed us to continue to return value to our shareholders. The Board of Directors has approved payment of a quarterly dividend of 27 cents per share on the common stock outstanding, which will be paid on June 1, 2022 to stockholders of record on May 16, 2022. Furthermore, we repurchased shares of our common stock in the amount of $6.9 million in the quarter, with $22.8 million remaining under our current share repurchase authorization.

"In closing, we are pleased with our momentum as we exit the first quarter, and remain cautiously optimistic for the balance of the year. We understand that there are various headwinds including ongoing inflation, increased borrowing costs, supply chain disruption, and an eventual normalization of demand. Still, the industry is one of resiliency, with many favorable trends such as an aging fleet, constrained new car availability, and rebounding miles driven.  Finally, thanks to our people, our position in the industry has never been stronger."

Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, May 3, 2022.  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 2022 Earnings Webcast link.  Investors may also listen to the call by dialing 866-518-6930 (domestic) or 203-518-9822 (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 800-839-4568 (domestic) or 402-220-2681 (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,
		2022			2021
		(Unaudited)
NET SALES		$       322,831			$       276,553
COST OF SALES		232,991			192,769
GROSS PROFIT		89,840			83,784
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		62,884			54,460
RESTRUCTURING AND INTEGRATION EXPENSES		41			-
OPERATING INCOME		26,915			29,324
OTHER NON-OPERATING INCOME, NET		1,449			635
INTEREST EXPENSE		805			209
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		27,559			29,750
PROVISION FOR INCOME TAXES		7,005			7,586
EARNINGS FROM CONTINUING OPERATIONS		20,554			22,164
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(1,116)			(1,164)
NET EARNINGS		19,438			21,000
NET EARNINGS (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST		(8)			-
NET EARNINGS ATTRIBUTABLE TO SMP (a)		$         19,446			$         21,000
NET EARNINGS ATTRIBUTABLE TO SMP
EARNINGS FROM CONTINUING OPERATIONS		$         20,562			$         22,164
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(1,116)			(1,164)
TOTAL		$         19,446			$         21,000
NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP
BASIC EARNINGS FROM CONTINUING OPERATIONS		$            0.94			$            0.99
DISCONTINUED OPERATION		(0.06)			(0.05)
NET EARNINGS  PER COMMON SHARE - BASIC		$            0.88			$            0.94
DILUTED EARNINGS  FROM CONTINUING OPERATIONS		$            0.91			$            0.97
DISCONTINUED OPERATION		(0.04)			(0.05)
NET EARNINGS  PER COMMON SHARE - DILUTED		$            0.87			$            0.92
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		21,978,507			22,317,959
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		22,477,819			22,765,508
(a) "SMP" refers to Standard Motor Products, Inc. and subsidiaries.

 

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
(In thousands)
		THREE MONTHS ENDED
		MARCH 31,
		2022			2021
		(Unaudited)
Revenues
Ignition, Emission Control, Fuel & Safety
Related System Products		$       200,354			$       173,666
Wire and Cable		38,903			38,352
Engine Management		239,257			212,018
Compressors		43,277			33,374
Other Climate Control Parts		38,044			29,099
Temperature Control		81,321			62,473
All Other		2,253			2,062
Revenues		$       322,831			$       276,553
Gross Margin
Engine Management		$         65,535	27.4%		$         65,070	30.7%
Temperature Control		19,986	24.6%		15,995	25.6%
All Other		4,319			2,719
Gross Margin		$         89,840	27.8%		$         83,784	30.3%
Selling, General & Administrative
Engine Management		$         38,778	16.2%		$         33,956	16.0%
Temperature Control		14,768	18.2%		12,403	19.9%
All Other		9,338			8,101
Selling, General & Administrative		$         62,884	19.5%		$         54,460	19.7%
Operating Income
Engine Management		$         26,757	11.2%		$         31,114	14.7%
Temperature Control		5,218	6.4%		3,592	5.7%
All Other		(5,019)			(5,382)
Subtotal		26,956	8.3%		29,324	10.6%
Restructuring & Integration		(41)	0.0%		-	0.0%
Operating Income		$         26,915	8.3%		$         29,324	10.6%

 

STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
		THREE MONTHS ENDED
		MARCH 31,
		2022		2021
		(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
GAAP EARNINGS FROM CONTINUING OPERATIONS		$          20,562		$          22,164
RESTRUCTURING AND INTEGRATION EXPENSES		41		-
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		(11)		-
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS		$          20,592		$          22,164
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS		$              0.91		$              0.97
RESTRUCTURING AND INTEGRATION EXPENSES		0.01		-
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		-		-
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS		$              0.92		$              0.97
OPERATING INCOME
GAAP OPERATING INCOME		$          26,915		$          29,324
RESTRUCTURING AND INTEGRATION EXPENSES		41		-		LAST TWELVE MONTHS ENDED
						MARCH 31,
NON-GAAP OPERATING INCOME		$          26,956		$          29,324		2022		2021
						(Unaudited)
EBITDA WITHOUT SPECIAL ITEMS
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		$          27,559		$          29,750		$         128,274		$         124,203
DEPRECIATION AND AMORTIZATION		6,952		6,514		27,681		26,298
INTEREST EXPENSE		805		209		2,624		1,664
EBITDA		35,316		36,473		158,579		152,165
RESTRUCTURING AND INTEGRATION EXPENSES		41		-		433		259
ONE-TIME ACQUISITION COSTS		-		-		1,711		-
INTANGIBLE ASSET IMPAIRMENT		-		-		-		2,600
SPECIAL ITEMS		41		-		2,144		2,859
EBITDA WITHOUT SPECIAL ITEMS		$          35,357		$          36,473		$         160,723		$         155,024

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.
Condensed Consolidated Balance Sheets
(In thousands)
		March 31,		December 31,
		2022		2021
		(Unaudited)
ASSETS
CASH		$            19,999		$            21,755
ACCOUNTS RECEIVABLE, GROSS		231,963		186,774
ALLOWANCE FOR EXPECTED CREDIT LOSSES		6,660		6,170
ACCOUNTS RECEIVABLE, NET		225,303		180,604
INVENTORIES		534,421		468,755
UNRETURNED CUSTOMER INVENTORY		22,221		22,268
OTHER CURRENT ASSETS		17,471		17,823
TOTAL CURRENT ASSETS		819,415		711,205
PROPERTY, PLANT AND EQUIPMENT, NET		102,984		102,786
OPERATING LEASE RIGHT-OF-USE ASSETS		42,116		40,469
GOODWILL		131,538		131,652
OTHER INTANGIBLES, NET		104,344		106,234
DEFERRED INCOME TAXES		35,964		36,126
INVESTMENT IN UNCONSOLIDATED AFFILIATES		45,518		44,087
OTHER ASSETS		28,530		25,402
TOTAL ASSETS		$       1,310,409		$       1,197,961
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE		$          245,450		$          125,298
CURRENT PORTION OF OTHER DEBT		3,235		3,117
ACCOUNTS PAYABLE		139,392		137,167
ACCRUED CUSTOMER RETURNS		46,085		42,412
ACCRUED CORE LIABILITY		23,513		23,663
ACCRUED REBATES		42,606		42,472
PAYROLL AND COMMISSIONS		31,972		45,058
SUNDRY PAYABLES AND ACCRUED EXPENSES		45,875		57,182
TOTAL CURRENT LIABILITIES		578,128		476,369
OTHER LONG-TERM DEBT		-		21
NONCURRENT OPERATING LEASE LIABILITY		32,281		31,206
ACCRUED ASBESTOS LIABILITIES		51,909		52,698
OTHER LIABILITIES		25,178		25,040
TOTAL LIABILITIES		687,496		585,334
TOTAL SMP STOCKHOLDERS' EQUITY		611,871		601,580
NONCONTROLLING INTEREST		11,042		11,047
TOTAL STOCKHOLDERS' EQUITY		622,913		612,627
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$       1,310,409		$       1,197,961

 

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
	(In thousands)
		THREE MONTHS ENDED
		MARCH 31,
		2022			2021
		(Unaudited)
	CASH FLOWS FROM OPERATING ACTIVITIES
	NET EARNINGS	$        19,438			$        21,000
	ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
	USED IN OPERATING ACTIVITIES:
	DEPRECIATION AND AMORTIZATION	6,952			6,514
	OTHER	4,374			4,475
	CHANGE IN ASSETS AND LIABILITIES:
	ACCOUNTS RECEIVABLE	(44,706)			23,533
	INVENTORY	(67,662)			(46,255)
	ACCOUNTS PAYABLE	1,942			8,419
	PREPAID EXPENSES AND OTHER CURRENT ASSETS	2,171			3,753
	SUNDRY PAYABLES AND ACCRUED EXPENSES	(21,226)			(29,549)
	OTHER	(5,245)			(3,288)
	NET CASH USED IN OPERATING ACTIVITIES	(103,962)			(11,398)
	CASH FLOWS FROM INVESTING ACTIVITIES
	ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES	-			(2,081)
	CAPITAL EXPENDITURES	(6,449)			(4,966)
	OTHER INVESTING ACTIVITIES	-			2
	NET CASH USED IN INVESTING ACTIVITIES	(6,449)			(7,045)
	CASH FLOWS FROM FINANCING ACTIVITIES
	NET CHANGE IN DEBT	120,340			32,408
	PURCHASE OF TREASURY STOCK	(6,517)			(11,096)
	DIVIDENDS PAID	(5,935)			(5,588)
	OTHER FINANCING ACTIVITIES	444			373
	NET CASH PROVIDED BY FINANCING ACTIVITIES	108,332			16,097
	EFFECT OF EXCHANGE RATE CHANGES ON CASH	323			(42)
	NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,756)			(2,388)
	CASH AND CASH EQUIVALENTS at beginning of period	21,755			19,488
	CASH AND CASH EQUIVALENTS at end of period	$        19,999			$        17,100

 

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SOURCE Standard Motor Products, Inc.

FAQ

What are the net sales for Standard Motor Products in Q1 2022?

Net sales for Q1 2022 were $322.8 million.

What was the earnings per share for SMP in Q1 2022?

Earnings from continuing operations were 91 cents per diluted share.

When is the dividend payment date for Standard Motor Products?

The dividend payment date is June 1, 2022.

What percentage increase in sales did SMP experience in Q1 2022?

SMP experienced a 17% increase in sales year-over-year.

What challenges does Standard Motor Products anticipate for the rest of 2022?

SMP anticipates challenges including ongoing inflation, increased borrowing costs, and supply chain disruption.