Standard Motor Products, Inc. Announces Second Quarter 2002 Earnings and a Quarterly Dividend
NEW YORK--July 18, 2002--Standard Motor Products, Inc. automotive replacement parts manufacturer and distributor, reported net sales for the second quarter of 2002, the three months ended June 30, 2002, of $179.3 million, as compared to net sales of $181.9 million during the comparable quarter of a year ago.Net earnings for the second quarter of 2002 were $5.5 million or 43 cents per diluted share, as compared to a net loss of $522,000 or 5 cents per diluted share, in the second quarter of 2001. Excluding one-time costs of $2.8 million, relating to the Company's debt restructuring during the second quarter of 2001, 2001 comparable net earnings would have been $2.3 million or 19 cents per diluted share.
Net sales for the six months in 2002 were $305.4 million, as compared to net sales of $335.9 million in the comparable period in 2001. Net losses for the six months in 2002 were $12.8 million or $1.07 per diluted share, as compared to net earnings of $97,000 or 1 cent per diluted share of a year ago. Excluding $16 million for the cumulative effect of an accounting change related to goodwill in 2002, and $2.8 million for the extraordinary loss on early retirement of debt in 2001, net earnings for the six months would have been $3.2 million or 27 cents and $2.9 million or 25 cents per diluted share in 2002 and 2001, respectively.
Mr. Lawrence Sills, Chief Executive Officer, said, "Net sales in the second quarter reflected an $8.7 million or 11.6% increase in Engine Management sales, primarily from new business launched in the second quarter, offset by a $12.5 million or 12.8% decrease in Temperature Control net sales. The decrease in Temperature Control results from the previously announced loss of a few locations of a major retailer and the continued reduction of distributor inventories as they work off stock left over from previous mild summers. However, hot weather in June led to a strong sales month, and these sales are continuing through the early weeks of July."
"Gross margins for the second quarter continued the first quarter favorable trend, increasing 3.1 percentage points over the second quarter of last year to 25.4%. Year-to-date gross margins were favorable by 1.9 percentage points at 25.0%, as compared to 23.1% in the prior year. These improvements reflect the return to more normal production levels, as the aggressive and successful inventory reduction campaign we began in 2001 is now mostly complete. We reduced inventories by more than $60 million in the last eighteen months which drove lower borrowing costs that are down roughly $2 million in the first half of 2002 versus 2001."
Mr. Sills concluded, "With hot weather continuing in most of the country, which should help Temperature Control, the new business in Engine Management, and the increased production levels, we look forward to the balance of 2002."
The Board of Directors has approved payment of a quarterly dividend of nine cents per share on the common stock outstanding. The dividend will be paid on September 3, 2002 to stockholders of record on August 15, 2002.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Standard Time, on Friday, July 19, 2002. The dial in number is 800-245-3043. The playback number is 888-566-0177 and the ID # is J405.
This news release contains certain forward-looking statements that involve risks and uncertainties. Actual results, events and performance could differ materially from those contemplated by these forward looking statements. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in this release and those detailed from time-to-time in prior public statements and the Company's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K and the Company's quarterly reports on Form 10-Q.
STANDARD MOTOR PRODUCTS, INC.
Consolidated Statements of Operations
(Dollars in thousands,
except per share amounts)
THREE-MONTHS ENDED SIX-MONTHS ENDED
JUNE 30, JUNE 30,
2002 2001 2002 2001
--------- --------- --------- ---------
NET SALES $ 179,329 $ 181,914 $ 305,409 $ 335,874
COST OF SALES 133,796 141,336 229,141 258,368
--------- --------- --------- ---------
GROSS PROFIT 45,533 40,578 76,268 77,506
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 34,227 32,070 65,280 64,562
--------- --------- --------- ---------
OPERATING INCOME (LOSS) 11,306 8,508 10,988 12,944
OTHER INCOME (EXPENSE), NET 88 (138) 756 459
INTEREST EXPENSE 3,809 5,040 7,271 9,167
--------- --------- --------- ---------
EARNINGS BEFORE TAXES AND
CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 7,585 3,330 4,473 4,236
INCOME TAXES 2,124 1,055 1,252 1,342
--------- --------- --------- ---------
EARNINGS BEFORE
EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 5,461 2,275 3,221 2,894
EXTRAORDINARY ITEM - (2,797) - (2,797)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE - - (15,985) -
--------- --------- --------- ---------
NET EARNINGS (LOSS) $ 5,461 $ (522) $ (12,764) $ 97
========= ========= ========= =========
NET EARNINGS (LOSS)
PER COMMON SHARE:
BASIC EARNINGS PER SHARE
BEFORE EXTRAORDINARY ITEM
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ 0.46 $ 0.19 $ 0.27 $ 0.25
EXTRAORDINARY ITEM - (0.24) - (0.24)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE - - (1.35) -
--------- --------- --------- ---------
NET EARNINGS (LOSS)
PER COMMON SHARE
- BASIC $ 0.46 $ (0.05) $ (1.08) $ 0.01
========= ========= ========= =========
DILUTED EARNINGS (LOSS)
PER SHARE BEFORE
EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ 0.43 $ 0.19 $ 0.27 $ 0.25
EXTRAORDINARY ITEM - (0.24) - (0.24)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE - - (1.34) -
--------- --------- --------- ---------
NET EARNINGS (LOSS)
PER COMMON SHARE -
DILUTED $ 0.43 $ (0.05) $ (1.07) $ 0.01
========= ========= ========= =========
Weighted Average Number
of Common Shares 11,918,439 11,781,383 11,873,288 11,748,050
Weighted Average Number
of Common and Dilutive
Shares 14,840,360 11,850,421 11,984,935 11,782,444
STANDARD MOTOR PRODUCTS
CONDENSED CONSOLIDATING BALANCE SHEETS
(Dollars in thousands)
ASSETS
June, 30 December, 31
2002 2001
--------- ---------
Cash and investments $ 3,586 $ 7,496
Accounts receivable, gross 213,719 122,327
Allowance for doubtful accounts 6,245 4,362
--------- ---------
Accounts receivable, net 207,474 117,965
Inventories 172,491 177,291
Other current assets 28,351 26,197
--------- ---------
Total current assets 411,902 328,949
--------- ---------
Property, plant and equipment, net 109,242 101,646
Goodwill 20,017 38,040
Other assets 37,516 40,794
--------- ---------
Total assets $ 578,677 $ 509,429
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 3,421 $ 4,075
Current portion of long term debt 4,387 1,784
Accounts payable trade 46,547 26,110
Accrued customer returns 21,584 18,167
Other current liabilities 60,985 50,457
--------- ---------
Total current liabilities 136,924 100,593
--------- ---------
Long-term debt 242,953 200,066
Postretirement & other liabilities 24,104 23,083
--------- ---------
Total liabilities 403,981 323,742
--------- ---------
Total stockholders' equity 174,696 185,687
--------- ---------
Total liabilities and stockholders' equity $ 578,677 $ 509,429
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