28.10.2021 14:30:00

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

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 1st 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.

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