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

Rhea-AI Summary

Standard Motor Products reported consolidated net sales of $370.3 million for Q3 2021, marking an 8% increase from Q3 2020. Earnings from continuing operations were $29.2 million or $1.29 per diluted share, down from $36.2 million in 2020. Year-to-date sales reached $988.9 million, up 17% from the previous year. The company acquired Stabil Operative Group, expanding its original equipment business. Additionally, it repurchased $15.4 million in common stock and announced a new $30 million buyback plan, while maintaining a quarterly dividend of 25 cents per share.

Positive

• Record Q3 2021 sales of $370.3 million, up 8% YoY.
• Year-to-date earnings grew to $79.3 million, up 37% YoY.
• Successful acquisitions including Stabil Operative Group, enhancing market reach.
• Share buybacks totaling $26.5 million to date, with an additional $30 million authorized.
• Quarterly dividend of 25 cents per share approved.

Negative

• Q3 earnings per share decreased to $1.29, down from $1.59 in 2020.
• Compression in gross margins primarily due to rising costs in the Engine Management division.

NEW YORK, Oct. 28, 2021 /PRNewswire/ -- 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 1^st 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,				DECEMBER 31,
		2021				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

 

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SOURCE Standard Motor Products, Inc.

FAQ

What were the Q3 2021 sales figures for SMP?

Standard Motor Products reported Q3 2021 sales of $370.3 million, an 8% increase from Q3 2020.

What is the EPS for SMP in Q3 2021?

Earnings per diluted share for Q3 2021 were $1.29, down from $1.59 in Q3 2020.

How much stock has SMP repurchased in 2021?

SMP repurchased $15.4 million worth of shares in Q3 2021, totaling $26.5 million for the year.

What new acquisitions has SMP made recently?

SMP acquired Stabil Operative Group, a manufacturer of original equipment sensors and electronics.

What is the dividend payout for SMP?

SMP has approved a quarterly dividend of 25 cents per share, payable on December 1, 2021.