Standard Motor Products, Inc. Releases Fourth Quarter and 2023 Year-End Results

Rhea-AI Summary

Standard Motor Products, Inc. (SMP) reported its financial results for Q4 2023 and the full year, showing a decrease in net sales compared to the previous year. Earnings from continuing operations also declined. The company's Chairman expressed disappointment in the results, highlighting challenges in the aftermarket business and weather-related issues affecting sales in certain segments. Despite these challenges, the Engineered Solutions segment showed growth. Operating profit and adjusted EBITDA decreased, partly due to lower sales volumes and higher expenses. The company aims for flat to low single-digit sales growth and an Adjusted EBITDA range of 9.0% to 9.5% in 2024.

Positive

• Net sales for Q4 2023 were $290.8 million, down from $308.2 million in Q4 2022.
• Earnings from continuing operations for Q4 2023 were $7.2 million or $0.32 per diluted share, compared to $8.5 million or $0.39 per diluted share in Q4 2022.
• Consolidated net sales for the full year 2023 were $1.36 billion, slightly lower than $1.37 billion in 2022.
• Vehicle Control sales declined by 5.9% in Q4 2023, impacting full-year performance.
• Temperature Control segment faced challenges with a 3.8% sales decline for the full year.
• Engineered Solutions segment showed growth with a 6.7% increase in Q4 2023 and 4.7% for the year.
• Operating profit finished at 7.0% for the full year, down from 8.2% in 2022.
• Adjusted EBITDA was 9.3% for the year, slightly below the guidance of 9.5%.
• Inventory decreased to $507.1 million at year-end 2023 from $528.7 million in 2022.
• Total debt reduced to $156.2 million at year-end 2023, with a net leverage ratio of 1.0X.
• Sales growth outlook for 2024 is flat to low single digits, with Adjusted EBITDA expected to be in the range of 9.0% to 9.5%.
• Distribution center expansion will incur additional costs in 2024, including increased rent and capital expenditures for automation capabilities.
• Mr. Eric Sills expressed confidence in the company's resilience despite economic and geopolitical uncertainties in 2024.

Negative

• Net sales decreased in Q4 2023 compared to the same quarter in 2022.
• Earnings from continuing operations declined in Q4 2023 compared to Q4 2022.
• Full-year consolidated net sales were slightly lower in 2023 compared to 2022.
• Operating profit and adjusted EBITDA decreased for the full year 2023.
• Lower sales volumes and higher expenses impacted financial performance.
• Distribution center expansion costs and capital expenditures will affect 2024 expenses.

Insights

Financial Analyst

The reported decline in net sales and earnings for Standard Motor Products in the fourth quarter and full year of 2023 indicates a contraction in revenue and profitability, which is noteworthy for investors. The decrease in net sales by 1% annually and 5.7% for the fourth quarter year over year, coupled with a reduction in earnings from continuing operations, reflects challenges in the automotive parts industry. The dip in earnings, from $0.39 to $0.32 per diluted share in Q4 and from $3.30 to $2.85 per diluted share annually, suggests margin compression and potential operational inefficiencies.

It is crucial to analyze the segment performance, as the Engineered Solutions business showed growth, indicating a strategic pivot towards higher growth areas could be underway. However, the decline in the Vehicle Control and Temperature Control segments may raise concerns about the company's exposure to cyclical and seasonal demand fluctuations. The increase in customer factoring program expense by $14 million, reflecting a higher cost of capital, also impacts net income and could be a red flag for cash flow pressures. The reduction in inventory and total debt, along with a net leverage ratio of 1.0X, does present a silver lining, as it suggests effective capital management and a stronger balance sheet.

Looking forward, the flat to low single-digit sales growth projection for 2024, with adjusted EBITDA margins expected between 9.0% to 9.5%, will be key metrics for investors to monitor. The anticipated costs associated with the distribution center expansion and capital expenditures on automation capabilities highlight the company's investment in future efficiency gains but also entail significant upfront costs that could affect short-term financial performance.

Market Research Analyst

The reported financial results of Standard Motor Products reflect broader market trends within the automotive parts sector. The decline in sales within the aftermarket business, which faced a challenging quarter, may be indicative of broader economic conditions affecting consumer spending on vehicle maintenance and repair. This is compounded by the fact that 2022 was a record year, making year-over-year comparisons more difficult.

The highly seasonal nature of the Temperature Control segment and its susceptibility to weather patterns is a concern for the stability of future revenues. The Engineered Solutions segment's growth is promising and suggests a potential shift in the company's strategy to focus on areas with more consistent demand and higher growth potential. The mention of new product introductions and customer opportunities in this segment could represent a diversification strategy aimed at reducing reliance on traditional, more volatile segments.

Investors should consider the impact of external factors such as weather patterns, economic cycles and consumer behavior on Standard Motor Products' segments. The company's ability to navigate these challenges and capitalize on new opportunities in the Engineered Solutions segment will be critical to its performance in the coming years.

Economist

The financial results of Standard Motor Products can be viewed within the context of the broader economic environment. The decline in sales and profitability may be partially attributed to macroeconomic factors, such as inflationary pressures and interest rate hikes, which have led to increased costs for businesses and consumers alike. The company's mention of high interest rates, with a general consensus on a potential decline later in 2024, provides a glimpse into the economic outlook and its implications for corporate finance and consumer spending.

The strategic reduction in inventory and debt levels, resulting in a net leverage ratio of 1.0X, suggests a proactive approach to managing financial risks in an uncertain economic climate. The planned capital expenditures and expansion costs, while necessary for long-term growth, must be balanced against the potential for continued economic volatility and geopolitical risks that could impact the automotive parts industry.

The company's cautious sales growth outlook for 2024, amid these economic uncertainties, reflects a realistic approach to forecasting in the current economic climate. Stakeholders should consider the potential for economic recovery or further downturns and how these scenarios could influence Standard Motor Products' performance.

NEW YORK, Feb. 22, 2024 /PRNewswire/ -- Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three and twelve months ended December 31, 2023.

Net sales for the fourth quarter of 2023 were $290.8 million, compared to consolidated net sales of $308.2 million during the same quarter in 2022. Earnings from continuing operations for the fourth quarter of 2023 were $7.2 million or $0.32 per diluted share, compared to $8.5 million or $0.39 per diluted share in the fourth 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 fourth quarter of 2023 were $8.2 million or $0.37 per diluted share, compared to $15.1 million or $0.69 per diluted share in the fourth quarter of 2022. 

Consolidated net sales for the twelve months ended December 31, 2023, were $1.36 billion, compared to consolidated net sales of $1.37 billion during the comparable period in 2022. Earnings from continuing operations for the twelve months ended December 31, 2023, were $63.1 million or $2.85 per diluted share, compared to $73.0 million or $3.30 per diluted share in the comparable period 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 twelve months ended December 31, 2023 and 2022 were $64.8 million or $2.92 per diluted share and $79.4 million or $3.59 per diluted share, respectively.

Mr. Eric Sills, Standard Motor Products' Chairman and Chief Executive Officer stated, "Overall we were disappointed in our results. Sales were down 1% in 2023, with the fourth quarter finishing softer than expected, down 5.7% from last year. As we look at our two end markets, we were very pleased with the continued solid performance in our Engineered Solutions business as we experienced strong growth with both new and existing customers. Meanwhile our aftermarket business experienced a challenging quarter, impacting our full-year performance especially when compared to records we set in 2022."

By segment, Vehicle Control sales declined 5.9% in the fourth quarter, bringing full-year performance down 1.7% compared to 2022. The sales results in the quarter were due to a combination of modest changes to customer order patterns as well as general softness in the marketplace. While large customer POS trends were slightly positive early in the quarter, they weakened in December finishing roughly flat overall.

Turning to Temperature Control, weather patterns throughout the year created challenges for this highly seasonal category, with full-year sales down 3.8%. 2022 was the longest and hottest season on record, with full-year sales up 8.4% over the previous year, making for a difficult comparison. The first half of 2023 was unseasonably cool, and while it got quite hot across much of the country in the third quarter, it tends to be difficult to recover from a late start to the selling season. The fourth quarter itself was light, down 19.0%, though it is important to note with the seasonal demand over, it is always far and away our lowest sales quarter and can therefore be quite volatile. 

Our Engineered Solutions segment continues to post strong numbers as sales increased 6.7% in the fourth quarter and 4.7% for the year. After several years of building out this new business, we officially launched it as its own operating segment at the start of 2023, and we are delighted to see the ongoing momentum. We are pleased with the overall traction to date in this segment and continue to believe we will be able to capitalize on new awards as well as introduce new products over time to broaden both new and existing customer opportunities.   

Consolidated operating profit for the full year, excluding non-operational gains and losses, finished at 7.0%, vs. 8.2% in 2022, and adjusted EBITDA was 9.3% for the year compared to our guidance of approximately 9.5%. Lower sales volumes resulted in lower leverage of fixed costs, even though our pricing actions along with cost reduction initiatives have started to offset lingering inflationary pressures. Customer factoring program expense at $46.0 million was $14.0 million (110 basis points) higher in 2023. And while interest rates remain high, the general consensus is that they will begin to decline later in 2024.

From a cash flow perspective, we were pleased with the impact of our initiatives on reducing both our inventory and borrowing levels. At year-end, our inventory was $507.1 million, down from $528.7 million at year-end 2022. Additionally, our total debt at year-end stood at $156.2 million as we paid down $83.6 million in the full year of 2023, ending with a net leverage ratio of 1.0X.   

As we head into 2024, our outlook for the full year includes an expectation that sales growth will be flat to low single digits and Adjusted EBITDA will be in a range of 9.0% to 9.5%. We remind investors that as part of our distribution center expansion into Shawnee, KS, we will incur roughly $7-8 million of added costs in 2024 related to increased rent as well as redundancy expenses as we transition away from our Edwardsville, KS distribution center. Additionally, we anticipate approximately $25 million in capital expenditures related to the implementation of upgraded automation capabilities, as well as other equipment and racking, as we outfit the new DC. 

In closing, Mr. Sills commented, "Although the economic backdrop and various geopolitical risks may continue to create volatility in 2024, we are confident in the resiliency of our end markets. We are excited about the partial opening of our new distribution center in just a few months and full opening in 2025 that will expand our capacity and provide additional risk avoidance to our overall distribution footprint. We look to continue to find ways to even better service our customers as well as explore opportunities to partner together for growth in 2024 and well into the future. We thank our employees that make all of this possible."  

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, February 22, 2024. This call will be webcast and can be accessed on our website at www.smpcorp.com and clicking on the SMP Q4'23 Earnings Call Earnings Webcast link. Investors may also listen to the call by dialing 800-245-3047 (domestic) or 203-518-9765 (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 888-566-0878 (domestic) or 402-220-6925 (international).

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						TWELVE MONTHS ENDED
		DECEMBER 31,						DECEMBER 31,
		2023			2022			2023			2022
		(Unaudited)						(Unaudited)
NET SALES		$       290,756			$       308,199			$   1,358,272			$   1,371,815
COST OF SALES		209,226			218,635			969,446			989,276
GROSS PROFIT		81,530			89,564			388,826			382,539
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		70,326			72,075			293,583			276,626
RESTRUCTURING AND INTEGRATION EXPENSES		1,259			1,847			2,642			1,891
OTHER INCOME, NET		2			70			76			113
OPERATING INCOME		9,947			15,712			92,677			104,135
OTHER NON-OPERATING INCOME (EXPENSE), NET		(433)			(75)			2,326			4,814
INTEREST EXPENSE		2,521			4,335			13,287			10,617
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		6,993			11,302			81,716			98,332
PROVISION FOR (BENEFIT FROM) INCOME TAXES		(288)			2,799			18,368			25,206
EARNINGS FROM CONTINUING OPERATIONS		7,281			8,503			63,348			73,126
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(795)			(615)			(28,996)			(17,691)
NET EARNINGS		6,486			7,888			34,352			55,435
NET EARNINGS (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST		52			(45)			204			84
NET EARNINGS ATTRIBUTABLE TO SMP (a)		$           6,434			$           7,933			$         34,148			$         55,351
NET EARNINGS ATTRIBUTABLE TO SMP
EARNINGS FROM CONTINUING OPERATIONS		$           7,229			$           8,548			$         63,144			$         73,042
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(795)			(615)			(28,996)			(17,691)
TOTAL		$           6,434			$           7,933			$         34,148			$         55,351
NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP
BASIC EARNINGS FROM CONTINUING OPERATIONS		$             0.33			$             0.40			$             2.91			$             3.37
DISCONTINUED OPERATION		(0.04)			(0.03)			(1.34)			(0.82)
NET EARNINGS PER COMMON SHARE - BASIC		$             0.29			$             0.37			$             1.57			$             2.55
DILUTED EARNINGS  FROM CONTINUING OPERATIONS		$             0.32			$             0.39			$             2.85			$             3.30
DISCONTINUED OPERATION		(0.03)			(0.03)			(1.31)			(0.80)
NET EARNINGS  PER COMMON SHARE - DILUTED		$             0.29			$             0.36			$             1.54			$             2.50
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		21,836,293			21,578,194			21,716,177			21,683,719
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		22,310,085			22,030,263			22,161,341			22,139,981

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

 

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(In thousands)
		THREE MONTHS ENDED						TWELVE MONTHS ENDED
		DECEMBER 31,						DECEMBER 31,
		2023			2022			2023			2022
		(Unaudited)						(Unaudited)
Revenues
Engine Management (Ignition, Emissions and
Fuel Delivery)		$       107,320			$       116,091			$       450,180			$       454,571
Electrical and Safety		55,062			57,309			221,782			230,487
Wire sets and other		16,247			16,437			65,970			65,513
Vehicle Control		178,629			189,837			737,932			750,571
					-
AC System Components		19,843			26,161			237,756			245,484
Other Thermal Components		24,788			28,960			99,998			105,753
Temperature Control		44,631			55,121			337,754			351,237
Commercial Vehicle		20,218			20,022			83,025			80,275
Construction / Agriculture		8,861			9,208			43,402			42,385
Light Vehicle		21,578			21,010			92,759			91,533
All Other		16,839			13,001			63,400			55,814
Engineered Solutions		67,496			63,241			282,586			270,007
Revenues		$       290,756			$       308,199			$   1,358,272			$   1,371,815
Gross Margin
Vehicle Control		$         58,769	32.9 %		$         62,765	33.1 %		$       238,215	32.3 %		$       232,267	30.9 %
Temperature Control		12,375	27.7 %		15,005	27.2 %		95,827	28.4 %		98,913	28.2 %
Engineered Solutions		10,386	15.4 %		11,794	18.6 %		54,784	19.4 %		51,359	19.0 %
All Other		-			-			-			-
Gross Margin		$         81,530	28.0 %		$         89,564	29.1 %		$       388,826	28.6 %		$       382,539	27.9 %
Selling, General & Administrative
Vehicle Control		$         41,397	23.2 %		$         39,649	20.9 %		$       165,705	22.5 %		$       151,596	20.2 %
Temperature Control		15,640	35.0 %		14,358	26.0 %		77,376	22.9 %		70,192	20.0 %
Engineered Solutions		9,343	13.8 %		7,780	12.3 %		34,565	12.2 %		32,646	12.1 %
All Other		3,946			3,286			15,937			15,190
Subtotal		70,326	24.2 %		65,073	21.1 %		293,583	21.6 %		269,624	19.7 %
Customer Bankruptcy Charge		-	0.0 %		7,002	2.3 %		-	0.0 %		7,002	0.5 %
Selling, General & Administrative		$         70,326	24.2 %		$         72,075	23.4 %		$       293,583	21.6 %		$       276,626	20.2 %
Operating Income
Vehicle Control		$         17,372	9.7 %		$         23,116	12.2 %		$         72,510	9.8 %		$         80,671	10.7 %
Temperature Control		(3,265)	-7.3 %		647	1.2 %		18,451	5.5 %		28,721	8.2 %
Engineered Solutions		1,043	1.5 %		4,014	6.3 %		20,219	7.2 %		18,713	6.9 %
All Other		(3,946)			(3,286)			(15,937)			(15,190)
Subtotal		$         11,204	3.9 %		$         24,491	7.9 %		$         95,243	7.0 %		$       112,915	8.2 %
Restructuring & Integration		(1,259)	-0.4 %		(1,847)	-0.6 %		(2,642)	-0.2 %		(1,891)	-0.1 %
Customer Bankruptcy Charge		-	0.0 %		(7,002)	-2.3 %		-	0.0 %		(7,002)	-0.5 %
Other Income, Net		2	0.0 %		70	0.0 %		76	0.0 %		113	0.0 %
Operating Income		$           9,947	3.4 %		$         15,712	5.1 %		$         92,677	6.8 %		$       104,135	7.6 %

 

STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
		THREE MONTHS ENDED				TWELVE MONTHS ENDED
		DECEMBER 31,				DECEMBER 31,
		2023		2022		2023		2022
		(Unaudited)				(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
GAAP EARNINGS FROM CONTINUING OPERATIONS		$           7,229		$            8,548		$          63,144		$          73,042
RESTRUCTURING AND INTEGRATION EXPENSES		1,259		1,847		2,642		1,891
CUSTOMER BANKRUPTCY CHARGE		-		7,002		-		7,002
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD		-		-		(312)		(249)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		(327)		(2,301)		(687)		(2,312)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS		$           8,161		$          15,096		$          64,787		$          79,374
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS		$             0.32		$             0.39		$             2.85		$             3.30
RESTRUCTURING AND INTEGRATION EXPENSES		0.06		0.08		0.12		0.08
CUSTOMER BANKRUPTCY CHARGE		-		0.32		-		0.32
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD		-		-		(0.01)		(0.01)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS		(0.01)		(0.10)		(0.04)		(0.10)
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS		$             0.37		$             0.69		$             2.92		$             3.59
OPERATING INCOME
GAAP OPERATING INCOME		$           9,947		$          15,712		$          92,677		$        104,135
RESTRUCTURING AND INTEGRATION EXPENSES		1,259		1,847		2,642		1,891
CUSTOMER BANKRUPTCY CHARGE		-		7,002		-		7,002
OTHER INCOME, NET		(2)		(70)		(76)		(113)
NON-GAAP OPERATING INCOME		$          11,204		$          24,491		$          95,243		$        112,915
EBITDA WITHOUT SPECIAL ITEMS
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		$           6,993		$          11,302		$          81,716		$          98,332
DEPRECIATION AND AMORTIZATION		7,561		7,403		29,022		28,298
INTEREST EXPENSE		2,521		4,335		13,287		10,617
EBITDA		17,075		23,040		124,025		137,247
RESTRUCTURING AND INTEGRATION EXPENSES		1,259		1,847		2,642		1,891
CUSTOMER BANKRUPTCY CHARGE		-		7,002		-		7,002
SPECIAL ITEMS		1,259		8,849		2,642		8,893
EBITDA WITHOUT SPECIAL ITEMS		$          18,334		$          31,889		$        126,667		$        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 DECEMBER 31, 2023
		Vehicle Control		Temperature Control		Engineered Solutions		All Other		Consolidated
		(Unaudited)
OPERATING INCOME
GAAP OPERATING INCOME		$          16,608		$           (3,595)		$              880		$           (3,946)		$            9,947
RESTRUCTURING AND INTEGRATION EXPENSES		792		330		137		-		1,259
CUSTOMER BANKRUPTCY CHARGE		-		-		-		-		-
OTHER (INCOME) EXPENSE, NET		(28)		-		26		-		(2)
NON-GAAP OPERATING INCOME		$          17,372		$           (3,265)		$           1,043		$           (3,946)		$          11,204
EBITDA WITHOUT SPECIAL ITEMS
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		$          14,862		$           (4,466)		$              395		$           (3,798)		$            6,993
DEPRECIATION AND AMORTIZATION		3,610		985		2,549		417		7,561
INTEREST EXPENSE		1,737		602		690		(508)		2,521
EBITDA		20,209		(2,879)		3,634		(3,889)		17,075
RESTRUCTURING AND INTEGRATION EXPENSES		792		330		137		-		1,259
SPECIAL ITEMS		792		330		137		-		1,259
EBITDA WITHOUT SPECIAL ITEMS		$          21,001		$           (2,549)		$           3,771		$           (3,889)		$          18,334
% of Net Sales		11.8 %		-5.7 %		5.6 %				6.3 %
(In thousands)		THREE MONTHS ENDED DECEMBER 31, 2022
		Vehicle Control		Temperature Control		Engineered Solutions		All Other		Consolidated
		(Unaudited)
OPERATING INCOME
GAAP OPERATING INCOME		$          16,599		$           (1,615)		$           4,014		$           (3,286)		$          15,712
RESTRUCTURING AND INTEGRATION EXPENSES		1,452		395		-		-		1,847
CUSTOMER BANKRUPTCY CHARGE		5,135		1,867		-		-		7,002
OTHER INCOME, NET		(70)		-		-		-		(70)
NON-GAAP OPERATING INCOME		$          23,116		$              647		$           4,014		$           (3,286)		$          24,491
EBITDA WITHOUT SPECIAL ITEMS
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		$          13,400		$           (2,848)		$           3,925		$           (3,175)		$          11,302
DEPRECIATION AND AMORTIZATION		3,656		890		2,380		477		7,403
INTEREST EXPENSE		3,140		958		317		(80)		4,335
EBITDA		20,196		(1,000)		6,622		(2,778)		23,040
RESTRUCTURING AND INTEGRATION EXPENSES		1,452		395		-		-		1,847
CUSTOMER BANKRUPTCY CHARGE		5,135		1,867		-		-		7,002
SPECIAL ITEMS		6,587		2,262		-		-		8,849
EBITDA WITHOUT SPECIAL ITEMS		$          26,783		$            1,262		$           6,622		$           (2,778)		$          31,889
% of Net Sales		14.1 %		2.3 %		10.5 %				10.3 %

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.
Reconciliation of GAAP and Non-GAAP Measures by Segments
(In thousands)		TWELVE MONTHS ENDED DECEMBER 31, 2023
		Vehicle Control		Temperature Control		Engineered Solutions		All Other		Consolidated
		(Unaudited)
OPERATING INCOME
GAAP OPERATING INCOME		$          71,327		$          17,343		$          19,944		$         (15,937)		$          92,677
RESTRUCTURING AND INTEGRATION EXPENSES		1,276		1,108		258		-		2,642
CUSTOMER BANKRUPTCY CHARGE		-		-		-		-		-
OTHER (INCOME) EXPENSE, NET		(93)		-		17		-		(76)
NON-GAAP OPERATING INCOME		$          72,510		$          18,451		$          20,219		$         (15,937)		$          95,243
EBITDA WITHOUT SPECIAL ITEMS
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		$          62,856		$          14,678		$          20,006		$         (15,824)		$          81,716
DEPRECIATION AND AMORTIZATION		13,877		3,424		9,966		1,755		29,022
INTEREST EXPENSE		9,345		3,279		2,306		(1,643)		13,287
EBITDA		86,078		21,381		32,278		(15,712)		124,025
RESTRUCTURING AND INTEGRATION EXPENSES		1,276		1,108		258		-		2,642
SPECIAL ITEMS		1,276		1,108		258		-		2,642
EBITDA WITHOUT SPECIAL ITEMS		$          87,354		$          22,489		$          32,536		$         (15,712)		$        126,667
% of Net Sales		11.8 %		6.7 %		11.5 %				9.3 %
(In thousands)		TWELVE MONTHS ENDED DECEMBER 31, 2022
		Vehicle Control		Temperature Control		Engineered Solutions		All Other		Consolidated
		(Unaudited)
OPERATING INCOME
GAAP OPERATING INCOME		$          74,153		$          26,459		$          18,713		$         (15,190)		$        104,135
RESTRUCTURING AND INTEGRATION EXPENSES		1,496		395		-		-		1,891
CUSTOMER BANKRUPTCY CHARGE		5,135		1,867		-		-		7,002
OTHER INCOME, NET		(113)		-		-		-		(113)
NON-GAAP OPERATING INCOME		$          80,671		$          28,721		$          18,713		$         (15,190)		$        112,915
EBITDA WITHOUT SPECIAL ITEMS
GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		$          67,439		$          26,047		$          20,103		$         (15,257)		$          98,332
DEPRECIATION AND AMORTIZATION		14,075		2,973		9,557		1,693		28,298
INTEREST EXPENSE		7,816		2,312		804		(315)		10,617
EBITDA		89,330		31,332		30,464		(13,879)		137,247
RESTRUCTURING AND INTEGRATION EXPENSES		1,496		395		-		-		1,891
CUSTOMER BANKRUPTCY CHARGE		5,135		1,867		-		-		7,002
SPECIAL ITEMS		6,631		2,262		-		-		8,893
EBITDA WITHOUT SPECIAL ITEMS		$          95,961		$          33,594		$          30,464		$         (13,879)		$        146,140
% of Net Sales		12.8 %		9.6 %		11.3 %				10.7 %

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)
		DECEMBER				DECEMBER
		2023				2022
		(Unaudited)
ASSETS
CASH AND CASH EQUIVALENTS		$         32,526				$         21,150
ACCOUNTS RECEIVABLE, GROSS		168,327				173,013
ALLOWANCE FOR EXPECTED CREDIT LOSSES		8,045				5,375
ACCOUNTS RECEIVABLE, NET		160,282				167,638
INVENTORIES		507,075				528,715
UNRETURNED CUSTOMER INVENTORY		18,240				19,695
OTHER CURRENT ASSETS		26,100				25,241
TOTAL CURRENT ASSETS		744,223				762,439
PROPERTY, PLANT AND EQUIPMENT, NET		121,872				107,148
OPERATING LEASE RIGHT-OF-USE ASSETS		100,065				49,838
GOODWILL		134,729				132,087
OTHER INTANGIBLES, NET		92,308				100,504
DEFERRED INCOME TAXES		40,533				33,658
INVESTMENT IN UNCONSOLIDATED AFFILIATES		24,050				41,745
OTHER ASSETS		35,267				27,510
TOTAL ASSETS		$    1,293,047				$    1,254,929
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT PORTION OF REVOLVING CREDIT FACILITY		$                    -				$         50,000
CURRENT PORTION OF TERM LOAN AND OTHER DEBT		5,029				5,031
ACCOUNTS PAYABLE		107,455				89,247
ACCRUED CUSTOMER RETURNS		38,238				37,169
ACCRUED CORE LIABILITY		18,399				22,952
ACCRUED REBATES		42,278				37,381
PAYROLL AND COMMISSIONS		29,561				31,361
SUNDRY PAYABLES AND ACCRUED EXPENSES		63,303				49,990
TOTAL CURRENT LIABILITIES		304,263				323,131
LONG-TERM DEBT		151,182				184,589
NONCURRENT OPERATING LEASE LIABILITY		88,974				40,709
ACCRUED ASBESTOS LIABILITIES		72,013				63,305
OTHER LIABILITIES		25,742				22,157
TOTAL LIABILITIES		642,174				633,891
TOTAL SMP STOCKHOLDERS' EQUITY		635,064				610,020
NONCONTROLLING INTEREST		15,809				11,018
TOTAL STOCKHOLDERS' EQUITY		650,873				621,038
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$    1,293,047				$    1,254,929

 

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
	(In thousands)
		TWELVE MONTHS ENDED
		DECEMBER 31,
		2023			2022
		(Unaudited)
	CASH FLOWS FROM OPERATING ACTIVITIES
	NET EARNINGS	$       34,352			$       55,435
	ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
	PROVIDED BY (USED IN) OPERATING ACTIVITIES:
	DEPRECIATION AND AMORTIZATION	29,022			28,298
	LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES	28,996			17,691
	CUSTOMER BANKRUPTCY CHARGE	-			7,002
	OTHER	7,718			13,064
	CHANGE IN ASSETS AND LIABILITIES:
	ACCOUNTS RECEIVABLE	7,965			6,916
	INVENTORY	29,494			(67,495)
	ACCOUNTS PAYABLE	19,645			(48,604)
	PREPAID EXPENSES AND OTHER CURRENT ASSETS	(70)			(5,509)
	SUNDRY PAYABLES AND ACCRUED EXPENSES	(4,284)			(29,089)
	OTHER	(8,578)			(5,242)
	NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	144,260			(27,533)
	CASH FLOWS FROM INVESTING ACTIVITIES
	ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES	(3,954)			(1,934)
	CASH ACQUIRED IN STEP ACQUISITION	6,779			-
	CAPITAL EXPENDITURES	(28,633)			(25,956)
	OTHER INVESTING ACTIVITIES	108			73
	NET CASH USED IN INVESTING ACTIVITIES	(25,700)			(27,817)
	CASH FLOWS FROM FINANCING ACTIVITIES
	NET CHANGE IN DEBT	(83,558)			111,307
	PURCHASE OF TREASURY STOCK	-			(29,656)
	DIVIDENDS PAID	(25,164)			(23,428)
	DIVIDENDS PAID TO NONCONTROLLING INTEREST	(700)			-
	PAYMENTS OF DEBT ISSUANCE COSTS	-			(2,128)
	OTHER FINANCING ACTIVITIES	(189)			(595)
	NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(109,611)			55,500
	EFFECT OF EXCHANGE RATE CHANGES ON CASH	2,427			(755)
	NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	11,376			(605)
	CASH AND CASH EQUIVALENTS at beginning of period	21,150			21,755
	CASH AND CASH EQUIVALENTS at end of period	$       32,526			$       21,150

 

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SOURCE Standard Motor Products, Inc.

FAQ

What were the net sales for Standard Motor Products (SMP) in Q4 2023?

Standard Motor Products (SMP) reported net sales of $290.8 million in Q4 2023.

How did earnings from continuing operations compare in Q4 2023 and Q4 2022 for SMP?

Earnings from continuing operations for SMP were $7.2 million in Q4 2023, down from $8.5 million in Q4 2022.

What was the sales performance of the Vehicle Control segment in Q4 2023 for SMP?

Vehicle Control sales declined by 5.9% in Q4 2023 for SMP.

What is the sales growth outlook for SMP in 2024?

SMP expects flat to low single-digit sales growth in 2024.

Who is the Chairman and CEO of Standard Motor Products (SMP)?

Mr. Eric Sills is the Chairman and Chief Executive Officer of Standard Motor Products (SMP).