Standard Motor Products, Inc. Announces Fourth Quarter and 2020 Year-End Results

NEW YORK, Feb. 23, 2021 /PRNewswire/ -- Standard Motor Products, Inc. (NYSE: SMP), a leading automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and twelve months ended December 31, 2020.

Consolidated net sales for the fourth quarter of 2020 were $282.7 million, compared to consolidated net sales of $241.3 million during the comparable quarter in 2019. Earnings from continuing operations for the fourth quarter of 2020 were $22.7 million or $1.00 per diluted share, compared to $12.7 million or 56 cents per diluted share in the fourth quarter of 2019. 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 2020 were $24.7 million or $1.08 per diluted share, compared to $13.6 million or 59 cents per diluted share in the fourth quarter of 2019.

Consolidated net sales for the twelve months ended December 31, 2020, were $1,128.6 million, compared to consolidated net sales of $1,137.9 million during the comparable period in 2019.  Earnings from continuing operations for the twelve months ended December 31, 2020, were $80.4 million or $3.52 per diluted share, compared to $69.1 million or $3.03 per diluted share in the comparable period of 2019.  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, 2020 and 2019 were $82.4 million or $3.61 per diluted share and $70.8 million or $3.10 per diluted share, respectively.

Loss from discontinued operations, net of income taxes, in the fourth quarter of 2020 was $13.6 million compared to $1.2 million in the comparable period last year. The loss pertains to asbestos-related liabilities from a brake business, originally acquired in 1986 and subsequently divested in 1998, and are adjusted at least annually, when the Company engages an independent actuary to assess the Company's exposure. 

Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are very pleased with our fourth quarter results, as we achieved records in both sales and earnings from continuing operations. After a very difficult second quarter when we experienced a slowdown caused by the pandemic, business rebounded in the second half, and we ended within one percent of our 2019 full-year revenue, setting a new high for full-year earnings from continuing operations.

"By segment, Engine Management sales were up 14.8% in the quarter, due to a combination of carry-over of an order backlog coming out of the third quarter, and generally strong demand across our entire customer base. Customer POS was consistently up in the mid-single digits, reflecting ongoing positive sell-through.  Temperature Control sales were up 30% in the quarter, as the warm weather continued into the period.

"Our strong profits for the quarter were mainly the result of increased absorption in our plants from elevated sales and production levels. For the full year, our record profits were primarily due to higher production levels in certain periods and annual savings initiatives, and to a lesser extent by certain non-recurring benefits from cost reduction initiatives and COVID-related government incentives, partially offset by COVID-related costs.

"Looking forward, we enter 2021 with many positives – our industry remains healthy and our customers' POS has remained strong. However, as previously announced in December, we were informed of the loss of a major account in our Engine Management segment. When we initially reported the loss, the timing was still uncertain. We now know that the business will be phased out over the course of the first quarter of 2021. As we said before, the loss was due to a shift in business strategy by the customer, and we are aggressively working to reduce costs accordingly while we seek to replace the business. We remain very confident in our go-to-market strategy, which continues to be very well received by the balance of our customers. In fact, we are delighted to announce that we just received the 2020 Supplier of the Year award from O'Reilly Auto Parts, in which they recognized the strength of our partnership.

"We are very excited to announce the publication of our inaugural Sustainability Report, now available on our website. We believe we have a long heritage of investing in our people, our communities, and our planet, and we are pleased to share the details publicly.

"As we continue to return value to our shareholders, our Board of Directors recently approved the payment of a quarterly dividend of 25 cents per share, payable on March 1, 2021. Our Board has also authorized an additional $20 million common stock repurchase plan, which when added to the amount remaining under the prior plan will allow us to repurchase up to $26.5 million of our outstanding shares. We repurchased shares of our common stock in the amount of $4.8 million during the fourth quarter of 2020."

Mr. Lawrence I. Sills, Chairman of the Board, then stated "Mr. Roger M. Widmann announced that he will retire from the Board this coming May, at the conclusion of his term. Roger has been a valuable member of our Board, where he has served since 2005, including as Chairman of our Compensation and Management Development Committee for the past nine years. He has been a major contributor in all areas, and he will be missed. We wish him a well-deserved retirement."  

Mr. Eric Sills continued, "In conclusion, as we reflect back on a year unlike any in history, certain positives come to mind. First, we cannot be more proud of our employees, who helped us navigate uncharted waters with tremendous dedication and skill. We owe them a debt of gratitude. Second, it demonstrated once again the resiliency of the automotive aftermarket, proving how essential it is to the basic functioning of our country and its infrastructure. We remain very confident about our future."

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, February 23, 2021.  The dial-in number is 888-632-3389 (domestic) or 785-424-1674 (international). The playback number is 800-839-9725 (domestic) or 402-220-6093 (international). The participant passcode is 62175.

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,


2020


2019


2020


2019


(Unaudited)


(Unaudited)

NET SALES

$    282,738


$    241,252


$ 1,128,588


$ 1,137,913









COST OF SALES

188,584


168,408


791,933


806,113









GROSS PROFIT

94,154


72,844


336,655


331,800









SELLING, GENERAL & ADMINISTRATIVE EXPENSES

60,972


54,232


224,670


234,715

INTANGIBLE ASSET IMPAIRMENT

2,600


-


2,600


-

RESTRUCTURING AND INTEGRATION EXPENSES

-


1,116


464


2,585

OTHER INCOME (EXPENSE), NET

5


10


(26)


(5)









OPERATING INCOME 

30,587


17,506


108,895


94,495









OTHER NON-OPERATING INCOME, NET

220


305


812


2,587









INTEREST EXPENSE

221


967


2,328


5,286









EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES

30,586


16,844


107,379


91,796









PROVISION FOR INCOME TAXES

7,844


4,106


26,962


22,745









EARNINGS FROM CONTINUING OPERATIONS

22,742


12,738


80,417


69,051









LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES

(13,568)


(1,220)


(23,024)


(11,134)









NET EARNINGS

$         9,174


$      11,518


$      57,393


$      57,917





NET EARNINGS PER COMMON SHARE:
















   BASIC EARNINGS FROM CONTINUING OPERATIONS

$             1.02


$             0.57


$             3.59


$             3.09

   DISCONTINUED OPERATION

(0.61)


(0.06)


(1.02)


(0.50)

   NET EARNINGS PER COMMON SHARE - BASIC

$             0.41


$             0.51


$             2.57


$             2.59

















   DILUTED EARNINGS FROM CONTINUING OPERATIONS

$             1.00


$             0.56


$             3.52


$             3.03

   DISCONTINUED OPERATION

(0.60)


(0.06)


(1.01)


(0.49)

   NET EARNINGS PER COMMON SHARE - DILUTED

$             0.40


$             0.50


$             2.51


$             2.54

















WEIGHTED AVERAGE NUMBER OF COMMON SHARES

22,379,056


22,434,134


22,374,123


22,378,414

WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES

22,855,523


22,882,235


22,825,885


22,818,451

 

 

 

STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Income

























(In thousands)





































THREE MONTHS ENDED



TWELVE MONTHS ENDED



DECEMBER 31,



DECEMBER 31,



2020



2019



2020



2019



(Unaudited)



(Unaudited)


Revenues












Ignition, Emission Control, Fuel & Safety












   Related System Products

$ 193,518



$ 167,276



$ 691,722



$ 705,994


Wire and Cable

38,342



34,681



143,963



143,167


        Engine Management

231,860



201,957



835,685



849,161














Compressors

22,060



15,405



163,071



160,485


Other Climate Control Parts

25,667



21,319



118,883



117,870


        Temperature Control

47,727



36,724



281,954



278,355














All Other

3,151



2,571



10,949



10,397


        Revenues

$   282,738



$   241,252



$ 1,128,588



$ 1,137,913














Gross Margin












Engine Management

$   76,451

33.0%


$   61,823

30.6%


$ 251,747

30.1%


$ 251,560

29.6%

Temperature Control

14,333

30.0%


8,349

22.7%


75,161

26.7%


70,064

25.2%

All Other

3,370



2,672



9,747



10,176


        Gross Margin

$     94,154

33.3%


$     72,844

30.2%


$    336,655

29.8%


$    331,800

29.2%













Selling, General & Administrative












Engine Management

$   37,203

16.0%


$   34,439

17.1%


$    137,440

16.4%


$    145,162

17.1%

Temperature Control

13,297

27.9%


11,364

30.9%


53,865

19.1%


56,397

20.3%

All Other

10,472



8,429



33,365



33,156


        Selling, General & Administrative

$     60,972

21.6%


$     54,232

22.5%


$    224,670

19.9%


$    234,715

20.6%

























Operating Income












Engine Management

$   39,248

16.9%


$   27,384

13.6%


$    114,307

13.7%


$    106,398

12.5%

Temperature Control

1,036

2.2%


(3,015)

-8.2%


21,296

7.6%


13,667

4.9%

All Other

(7,102)



(5,757)



(23,618)



(22,980)


        Subtotal

33,182

11.7%


18,612

7.7%


111,985

9.9%


97,085

8.5%

Intangible Asset Impairment

(2,600)

-0.9%


-

0.0%


(2,600)

-0.2%


-

0.0%

Restructuring & Integration

-

0.0%


(1,116)

-0.5%


(464)

0.0%


(2,585)

-0.2%

Other Income (Expense), Net

5

0.0%


10

0.0%


(26)

0.0%


(5)

0.0%

        Operating Income

$     30,587

10.8%


$     17,506

7.3%


$    108,895

9.6%


$      94,495

8.3%

 

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,



2020


2019



2020


2019


(Unaudited)


(Unaudited)

EARNINGS FROM CONTINUING OPERATIONS




















GAAP EARNINGS FROM CONTINUING OPERATIONS


$22,742


$12,738



$  80,417


$69,051











RESTRUCTURING AND INTEGRATION EXPENSES


-


1,116



464


2,585

INTANGIBLE ASSET IMPAIRMENT


2,600


-



2,600


-

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


-


-



(235)


(144)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(676)


(291)



(797)


(673)

NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$24,666


$13,563



$  82,449


$70,819





















DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS




















GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$    1.00


$    0.56



$     3.52


$    3.03











RESTRUCTURING AND INTEGRATION EXPENSES


-


0.05



0.02


0.11

INTANGIBLE ASSET IMPAIRMENT


0.11


-



0.11


-

CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


-


-



(0.01)


(0.01)

INCOME TAX EFFECT RELATED TO RECONCILING ITEMS


(0.03)


(0.02)



(0.03)


(0.03)











NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$    1.08


$    0.59



$     3.61


$    3.10





















OPERATING INCOME




















GAAP OPERATING INCOME


$30,587


$17,506



$108,895


$94,495











INTANGIBLE ASSET IMPAIRMENT


2,600


-



2,600


-

RESTRUCTURING AND INTEGRATION EXPENSES


-


1,116



464


2,585

OTHER (INCOME) EXPENSE, NET


(5)


(10)



26


5











NON-GAAP OPERATING INCOME


$33,182


$18,612



$111,985


$97,085


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)













DECEMBER 31,


DECEMBER 31,


2020


2019


(Unaudited)







ASSETS





CASH

$              19,488


$              10,372





ACCOUNTS RECEIVABLE, GROSS

203,861


131,852

ALLOWANCE FOR DOUBTFUL ACCOUNTS

5,822


5,212

ACCOUNTS RECEIVABLE, NET

198,039


126,640





INVENTORIES

345,502


368,221

UNRETURNED CUSTOMER INVENTORY

19,632


19,722

PREPAID EXPENSES AND OTHER CURRENT ASSETS

15,875


15,602





TOTAL CURRENT ASSETS

598,536


540,557





PROPERTY, PLANT AND EQUIPMENT, NET

89,105


89,649

OPERATING LEASE RIGHT-OF-USE ASSETS

29,958


36,020

GOODWILL

77,837


77,802

OTHER INTANGIBLES, NET

54,004


64,861

DEFERRED INCOME TAXES

44,770


37,272

INVESTMENT IN UNCONSOLIDATED AFFILIATES

40,507


38,858

OTHER ASSETS

21,823


18,835





TOTAL ASSETS

$           956,540


$           903,854









LIABILITIES AND STOCKHOLDERS' EQUITY









NOTES PAYABLE

$              10,000


$              52,460

CURRENT PORTION OF OTHER DEBT

135


4,456

ACCOUNTS PAYABLE

100,018


92,535

ACCRUED CUSTOMER RETURNS

40,982


35,240

ACCRUED CORE LIABILITY

22,014


24,357

ACCRUED REBATES

46,437


26,072

PAYROLL AND COMMISSIONS

35,938


26,649

SUNDRY PAYABLES AND ACCRUED EXPENSES

47,078


38,819





TOTAL CURRENT LIABILITIES

302,602


300,588





OTHER LONG-TERM DEBT

97


129

NONCURRENT OPERATING LEASE LIABILITIES

22,450


28,376

ACCRUED ASBESTOS LIABILITIES

55,226


49,696

OTHER LIABILITIES

25,929


20,837





 TOTAL LIABILITIES 

406,304


399,626





 TOTAL STOCKHOLDERS' EQUITY 

550,236


504,228





 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$           956,540


$           903,854

 

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows













(In thousands)













TWELVE MONTHS ENDED


DECEMBER 31,


2020


2019


(Unaudited)





CASH FLOWS FROM OPERATING ACTIVITIES








NET EARNINGS 

$ 57,393


$ 57,917

ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH




PROVIDED BY OPERATING ACTIVITIES:




DEPRECIATION AND AMORTIZATION

26,323


25,809

DEFERRED INCOME TAXES

(7,470)


5,094

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES

23,024


11,134

OTHER

18,768


11,359

CHANGE IN ASSETS AND LIABILITIES:




ACCOUNTS RECEIVABLE

(71,933)


2,789

INVENTORIES

17,984


(17,901)

ACCOUNTS PAYABLE

7,428


(1,950)

PREPAID EXPENSES AND OTHER CURRENT ASSETS

(370)


(8,296)

SUNDRY PAYABLES AND ACCRUED EXPENSES 

40,651


(2,957)

OTHER

(13,902)


(6,070)

NET CASH PROVIDED BY OPERATING ACTIVITIES

97,896


76,928









CASH FLOWS FROM INVESTING ACTIVITIES








ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES

-


(43,490)

NET PROCEEDS FROM SALE OF FACILITY

-


4,801

CAPITAL EXPENDITURES

(17,820)


(16,185)

OTHER INVESTING ACTIVITIES

21


62

NET CASH USED IN INVESTING ACTIVITIES 

(17,799)


(54,812)









CASH FLOWS FROM FINANCING ACTIVITIES








NET CHANGE IN DEBT

(46,708)


7,860

PURCHASE OF TREASURY STOCK

(13,482)


(10,738)

DIVIDENDS PAID

(11,218)


(20,593)

OTHER FINANCING ACTIVITIES

(108)


93

NET CASH USED IN FINANCING ACTIVITIES

(71,516)


(23,378)









EFFECT OF EXCHANGE RATE CHANGES ON CASH

535


496

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

9,116


(766)

CASH AND CASH EQUIVALENTS at beginning of year

10,372


11,138

CASH AND CASH EQUIVALENTS at end of year

$ 19,488


$ 10,372

 

Cision View original content:http://www.prnewswire.com/news-releases/standard-motor-products-inc-announces-fourth-quarter-and-2020-year-end-results-301232953.html

SOURCE Standard Motor Products, Inc.

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