Standard Motor Products, Inc. Announces Third Quarter 2020 Results and Reinstates Quarterly Dividend
Standard Motor Products reported consolidated net sales of $343.6 million for Q3 2020, up from $307.7 million in Q3 2019. Earnings from continuing operations were $36.2 million or $1.59 per diluted share, compared to $22.7 million or $1.00 per diluted share last year. For the first nine months, net sales were $845.9 million versus $896.7 million in 2019. The company reinstated a quarterly dividend of $0.25 per share, payable on December 1, 2020. CEO Eric Sills expressed optimism for future sales growth despite ongoing pandemic challenges.
- Q3 2020 consolidated net sales increased by 11.4% year-over-year.
- Earnings per diluted share in Q3 2020 reached $1.59, a significant increase from $1.00 in Q3 2019.
- The reinstatement of a quarterly dividend of $0.25 per share reflects confidence in financial stability.
- Temperature Control sales surged by 25% in Q3 2020 compared to Q3 2019.
- Year-to-date consolidated net sales decreased by 5.7% compared to 2019.
- Loss from discontinued operations related to asbestos liabilities was $7.6 million in Q3 2020.
NEW YORK, Oct. 28, 2020 /PRNewswire/ -- Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and nine months ended September 30, 2020.
Consolidated net sales for the third quarter of 2020 were
Consolidated net sales for the nine months ended September 30, 2020, were
Loss from discontinued operations, net of income taxes, in the third quarter of 2020 was
Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are very pleased with our third quarter results as we set all-time records for both sales and profits in a single quarter. While sales have not fully caught up year-to-date, our profits are now roughly even with the first nine months of 2019, in this year of dramatic ups and downs. Perhaps more important in the long run is that sales—both for us and for the industry as a whole—rebounded so quickly from the April trough, confirming the resilience of our industry and how essential it is to the economy as a whole.
"These last few months also reconfirmed the strength and loyalty of our work force. With minimal precedent to guide us, our people were able to reconfigure our facilities, and establish safety protocols often more stringent than CDC requirements. In the midst of the crisis our frontline employees came to work every day, often six or seven days a week. As a result, we were able to keep our factories and distribution centers running, while protecting the health of our employees. We wish to publicly thank all of our people for their heroic efforts during the crisis.
"Our sales in the quarter were strong in both segments. Engine Management sales were up
"On the expense side, as previously announced, we instituted many temporary cost reductions, including limits on travel and other discretionary expenses, as well as a reduction in Executive and Board of Directors compensation, always making sure that none of these actions would affect the long-term health of our company. We anticipate that we will maintain some, but not all, of these reductions in the future.
"Though our crystal ball is somewhat cloudy, with coronavirus infection rates rising again and unemployment still at high levels, we are optimistic looking forward. Accordingly, the Board of Directors has approved a reinstatement of a quarterly dividend of 25 cents per share on common stock outstanding. The dividend will be paid on December 1, 2020, to stockholders of record on November 16, 2020. We have also reinstated our share purchase program, which has remaining authorization from our Board of Directors in the amount of
Finally, the company announced that Lawrence Sills, Executive Chairman, is stepping down as an officer of the company and will continue in his role as Chairman of the Board, effective January 1, 2021. Mr. Sills stated, "This change in status reflects the fact that I will be stepping back from day-to-day duties, though I will remain closely involved with the Company as Board Chairman. I am very optimistic about the future. We have assembled an experienced and talented management team, which performed so well during the Covid-19 crisis, and am very confident that the team will continue its outstanding performance for many years ahead."
Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, October 28, 2020. The dial-in number is 800-791-4813 (domestic) or 785-424-1102 (international). The playback number is 800-934-4851 (domestic) or 402-220-1181 (international). The participant passcode is 76717.
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, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||||
NET SALES | $ 343,609 | $ 307,723 | $ 845,850 | $ 896,661 | |||||||||
COST OF SALES | 235,861 | 215,635 | 603,349 | 637,705 | |||||||||
GROSS PROFIT | 107,748 | 92,088 | 242,501 | 258,956 | |||||||||
SELLING, GENERAL & ADMINISTRATIVE EXPENSES | 59,497 | 59,947 | 163,698 | 180,483 | |||||||||
RESTRUCTURING AND INTEGRATION EXPENSES | 250 | 825 | 464 | 1,469 | |||||||||
OTHER EXPENSE, NET | 37 | 12 | 31 | 15 | |||||||||
OPERATING INCOME | 47,964 | 31,304 | 78,308 | 76,989 | |||||||||
OTHER NON-OPERATING INCOME, NET | 514 | 225 | 592 | 2,282 | |||||||||
INTEREST EXPENSE | 462 | 1,508 | 2,107 | 4,319 | |||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | 48,016 | 30,021 | 76,793 | 74,952 | |||||||||
PROVISION FOR INCOME TAXES | 11,804 | 7,367 | 19,118 | 18,639 | |||||||||
EARNINGS FROM CONTINUING OPERATIONS | 36,212 | 22,654 | 57,675 | 56,313 | |||||||||
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES | (7,587) | (7,903) | (9,456) | (9,914) | |||||||||
NET EARNINGS | $ 28,625 | $ 14,751 | $ 48,219 | $ 46,399 | |||||||||
NET EARNINGS PER COMMON SHARE: | |||||||||||||
BASIC EARNINGS FROM CONTINUING OPERATIONS | $ 1.62 | $ 1.01 | $ 2.58 | $ 2.52 | |||||||||
DISCONTINUED OPERATION | (0.34) | (0.35) | (0.42) | (0.44) | |||||||||
NET EARNINGS PER COMMON SHARE - BASIC | $ 1.28 | $ 0.66 | $ 2.16 | $ 2.08 | |||||||||
DILUTED EARNINGS FROM CONTINUING OPERATIONS | $ 1.59 | $ 1.00 | $ 2.53 | $ 2.47 | |||||||||
DISCONTINUED OPERATION | (0.33) | (0.35) | (0.41) | (0.44) | |||||||||
NET EARNINGS PER COMMON SHARE - DILUTED | $ 1.26 | $ 0.65 | $ 2.12 | $ 2.03 | |||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | 22,349,093 | 22,329,835 | 22,372,466 | 22,359,637 | |||||||||
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES | 22,758,458 | 22,754,440 | 22,795,426 | 22,814,228 | |||||||||
STANDARD MOTOR PRODUCTS, INC. | ||||||||||||
Segment Revenues and Operating Income | ||||||||||||
(In thousands) | ||||||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||||||
SEPTEMBER 30, | SEPTEMBER 30, | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
(Unaudited) | (Unaudited) | |||||||||||
Revenues | ||||||||||||
Ignition, Emission Control, Fuel & Safety | ||||||||||||
Related System Products | $ 538,718 | |||||||||||
Wire and Cable | 38,663 | 35,147 | 105,621 | 108,486 | ||||||||
Engine Management | 229,554 | 215,973 | 603,825 | 647,204 | ||||||||
Compressors | 70,785 | 52,776 | 141,011 | 145,080 | ||||||||
Other Climate Control Parts | 39,608 | 35,525 | 93,216 | 96,551 | ||||||||
Temperature Control | 110,393 | 88,301 | 234,227 | 241,631 | ||||||||
All Other | 3,662 | 3,449 | 7,798 | 7,826 | ||||||||
Revenues | $ 343,609 | $ 307,723 | $ 845,850 | $ 896,661 | ||||||||
Gross Margin | ||||||||||||
Engine Management | $ 72,361 | $ 66,264 | $ 189,737 | |||||||||
Temperature Control | 32,212 | 22,973 | 60,828 | 61,715 | ||||||||
All Other | 3,175 | 2,851 | 6,377 | 7,504 | ||||||||
Gross Margin | $ 107,748 | $ 92,088 | $ 242,501 | $ 258,956 | ||||||||
Selling, General & Administrative | ||||||||||||
Engine Management | $ 35,665 | $ 35,950 | $ 100,237 | $ 110,723 | ||||||||
Temperature Control | 15,571 | 15,495 | 40,568 | 45,033 | ||||||||
All Other | 8,261 | 8,502 | 22,893 | 24,727 | ||||||||
Selling, General & Administrative | $ 59,497 | $ 59,947 | $ 163,698 | $ 180,483 | ||||||||
Operating Income | ||||||||||||
Engine Management | $ 36,696 | $ 30,314 | $ 75,059 | $ 79,014 | ||||||||
Temperature Control | 16,641 | 7,478 | 20,260 | 16,682 | ||||||||
All Other | (5,086) | (5,651) | (16,516) | (17,223) | ||||||||
Subtotal | 48,251 | 32,141 | 78,803 | 78,473 | ||||||||
Restructuring & Integration | (250) | - | (825) | - | (464) | - | (1,469) | - | ||||
Other Expense, Net | (37) | (12) | (31) | (15) | ||||||||
Operating Income | $ 47,964 | $ 31,304 | $ 78,308 | $ 76,989 | ||||||||
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, | |||||||||
2020 | 2019 | 2020 | 2019 | |||||||
(Unaudited) | (Unaudited) | |||||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||||||
GAAP EARNINGS FROM CONTINUING OPERATIONS | ||||||||||
RESTRUCTURING AND INTEGRATION EXPENSES | 250 | 825 | 464 | 1,469 | ||||||
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD | (235) | (144) | (235) | (144) | ||||||
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | (65) | (214) | (121) | (382) | ||||||
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS | ||||||||||
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | ||||||||||
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ 1.59 | $ 1.00 | $ 2.53 | $ 2.47 | ||||||
RESTRUCTURING AND INTEGRATION EXPENSES | 0.01 | 0.04 | 0.02 | 0.06 | ||||||
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) | (0.01) | (0.01) | ||||||
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ 1.59 | $ 1.02 | $ 2.53 | $ 2.51 | ||||||
OPERATING INCOME | ||||||||||
GAAP OPERATING INCOME | ||||||||||
RESTRUCTURING AND INTEGRATION EXPENSES | 250 | 825 | 464 | 1,469 | ||||||
OTHER EXPENSE, NET | 37 | 12 | 31 | 15 | ||||||
NON-GAAP OPERATING INCOME | ||||||||||
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) | ||||||
SEPTEMBER 30, | DECEMBER 31, | |||||
2020 | 2019 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
CASH | $ 16,781 | $ 10,372 | ||||
ACCOUNTS RECEIVABLE, GROSS | 244,106 | 140,728 | ||||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6,061 | 5,212 | ||||
ACCOUNTS RECEIVABLE, NET | 238,045 | 135,516 | ||||
INVENTORIES | 311,390 | 368,221 | ||||
UNRETURNED CUSTOMER INVENTORY | 19,964 | 19,722 | ||||
OTHER CURRENT ASSETS | 10,094 | 15,602 | ||||
TOTAL CURRENT ASSETS | 596,274 | 549,433 | ||||
PROPERTY, PLANT AND EQUIPMENT, NET | 88,288 | 89,649 | ||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 30,910 | 36,020 | ||||
GOODWILL | 77,681 | 77,802 | ||||
OTHER INTANGIBLES, NET | 58,543 | 64,861 | ||||
DEFERRED INCOME TAXES | 39,807 | 37,272 | ||||
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 38,945 | 38,858 | ||||
OTHER ASSETS | 20,549 | 18,835 | ||||
TOTAL ASSETS | $ 950,997 | $ 912,730 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
NOTES PAYABLE | $ 8,416 | $ 52,460 | ||||
CURRENT PORTION OF OTHER DEBT | 3,580 | 4,456 | ||||
ACCOUNTS PAYABLE | 79,260 | 92,535 | ||||
ACCRUED CUSTOMER RETURNS | 75,279 | 44,116 | ||||
ACCRUED CORE LIABILITY | 19,981 | 24,357 | ||||
OTHER CURRENT LIABILITIES | 117,298 | 91,540 | ||||
TOTAL CURRENT LIABILITIES | 303,814 | 309,464 | ||||
OTHER LONG-TERM DEBT | 103 | 129 | ||||
NONCURRENT OPERATING LEASE LIABILITIES | 23,452 | 28,376 | ||||
ACCRUED ASBESTOS LIABILITIES | 53,164 | 49,696 | ||||
OTHER LIABILITIES | 25,560 | 20,837 | ||||
TOTAL LIABILITIES | 406,093 | 408,502 | ||||
TOTAL STOCKHOLDERS' EQUITY | 544,904 | 504,228 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 950,997 | $ 912,730 | ||||
STANDARD MOTOR PRODUCTS, INC. | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(In thousands) | ||||
NINE MONTHS ENDED | ||||
SEPTEMBER 30, | ||||
2020 | 2019 | |||
(Unaudited) | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
NET EARNINGS | $ 48,219 | |||
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH | ||||
PROVIDED BY OPERATING ACTIVITIES: | ||||
DEPRECIATION AND AMORTIZATION | 19,313 | 19,261 | ||
OTHER | 19,098 | 21,623 | ||
CHANGE IN ASSETS AND LIABILITIES: | ||||
ACCOUNTS RECEIVABLE | (104,020) | (16,583) | ||
INVENTORIES | 53,330 | 11,824 | ||
ACCOUNTS PAYABLE | (13,117) | (24,107) | ||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 5,634 | (6,502) | ||
SUNDRY PAYABLES AND ACCRUED EXPENSES | 51,867 | (2,551) | ||
OTHER | (1,719) | (6,260) | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 78,605 | 43,104 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES | - | (43,490) | ||
NET PROCEEDS FROM SALE OF FACILITY | - | 4,801 | ||
CAPITAL EXPENDITURES | (13,170) | (12,329) | ||
OTHER INVESTING ACTIVITIES | 14 | 47 | ||
NET CASH USED IN INVESTING ACTIVITIES | (13,156) | (50,971) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
NET CHANGE IN DEBT | (44,852) | 34,656 | ||
PURCHASE OF TREASURY STOCK | (8,726) | (10,738) | ||
DIVIDENDS PAID | (5,615) | (15,429) | ||
OTHER FINANCING ACTIVITIES | 86 | 1,109 | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (59,107) | 9,598 | ||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 67 | 390 | ||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 6,409 | 2,121 | ||
CASH AND CASH EQUIVALENTS at beginning of Period | 10,372 | 11,138 | ||
CASH AND CASH EQUIVALENTS at end of Period | $ 16,781 | |||
View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-third-quarter-2020-results-and-reinstates-quarterly-dividend-301161208.html
SOURCE Standard Motor Products, Inc.
FAQ
What were the Q3 2020 sales figures for SMP?
What is the dividend payment date for SMP?
How much did SMP earn per share in Q3 2020?
What was the change in sales for SMP's Temperature Control segment?
What is the financial outlook for SMP amidst the pandemic?
