8-K
STANDARD MOTOR PRODUCTS, INC. (SMP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 2024
STANDARD MOTOR PRODUCTS, INC.
(Exact Name of Registrant as Specified in its Charter)
| New York | 001-04743 | 11-1362020 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employee Identification Number) |
37-18 Northern Boulevard, Long Island City, New York 11101
(Address of Principal Executive Offices, including Zip Code)
Registrant’s Telephone Number, including Area Code: 718-392-0200
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $2.00 per share | SMP | New York Stock Exchange LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On August 1, 2024, Standard Motor Products, Inc. issued a press release announcing its financial results for the three months and six months ended June 30, 2024. A copy of such press release is furnished as Exhibit 99.1 hereto.
Such press release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| --- | --- |
| 99.1 | Press release dated August 1, 2024 announcing Standard Motor Products, Inc.’s financial results for the three months and six months ended June 30, 2024. |
| --- | --- |
| 104 | Cover Page Interactive Data File--the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STANDARD MOTOR PRODUCTS, INC. | ||
|---|---|---|
| By: | /s/ Nathan R. Iles | |
| Nathan R. Iles | ||
| Chief Financial Officer | ||
| Date: August 1, 2024 |
2
Exhibit Index
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated August 1, 2024 announcing Standard Motor Products, Inc.’s financial results for the three months and six months ended June 30, 2024. |
| 104 | Cover Page Interactive Data File--the cover page XBRL tags are embedded within the Inline XBRL document. |
3
Exhibit 99.1
| For Immediate Release | |
|---|---|
| For more information, contact: | |
| Anthony (Tony) Cristello | |
| Standard Motor Products, Inc. | |
| (972) 316-8107 | |
| tony.cristello@smpcorp.com |
Standard Motor Products, Inc. Announces
Second Quarter 2024 Results and Quarterly Dividend
New York, NY, August 1, 2024......Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three and six months ended June 30, 2024.
Net sales for the second quarter of 2024 were $389.8 million, compared to consolidated net sales of $353.1 million during the comparable quarter in 2023. Earnings from continuing operations for the second quarter of 2024 were $18.0 million or $0.81 per diluted share, compared to $18.4 million or $0.83 per diluted share in the second quarter of 2023. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the second quarter of 2024 were $21.7 million or $0.98 per diluted share, compared to $18.6 million or $0.84 per diluted share in the second quarter of 2023.
Consolidated net sales for the six months ended June 30, 2024, were $721.2 million, compared to consolidated net sales of $681.1 million during the comparable period in 2023. Earnings from continuing operations for the six months ended June 30, 2024, were $27.8 million or $1.25 per diluted share, compared to $31.1 million or $1.40 per diluted share in the comparable period of 2023. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the six months ended June 30, 2024 and 2023 were $31.7 million or $1.42 per diluted share and $31.9 million or $1.44 per diluted share, respectively.
Mr. Eric Sills, Standard Motor Products’ Chairman and Chief Executive Officer stated, “We are pleased with our second quarter results as sales increased 10.4% versus last year’s second quarter, while year-to-date sales are up nearly 6% relative to 2023. We experienced solid top line results in all segments, setting records across the board, most notably within Temperature Control.”
By segment, Vehicle Control sales improved 2.7% in the quarter, accelerating from the more modest growth seen in our first quarter. Year-to-date sales are up 1.6%, and we are pleased with the trajectory.
Temperature Control sales increased 28.2% versus last year’s second quarter, representing an all-time quarterly sales record, as elevated heat persisted across much of the country. Year-to-date we are up nearly 16%, and temperatures remain hot, which should be positive for the third quarter.
Our Engineered Solutions segment sales increased 6.1% in the quarter and 5.3% for the year, attributable to strong demand from our existing customers as well as new business wins. We continue to see positive results from our cross-selling efforts, and the pipeline of opportunities remains healthy.
Looking at profitability, our Adjusted EBITDA margin was 10.1% in the quarter vs. 10.0% last year. Excluding $1.3 million of start-up costs related to our new distribution center in Shawnee, KS, Adjusted EBITDA was 10.4% in the quarter. During the quarter, our operating income was impacted by a roughly $1.0 million increase in customer factoring program expense over last year mainly due to higher sales volumes, although it appears we are finally starting to see a leveling off from the impact of elevated interest rates.
Mr. Sills commented, “While we are pleased with our sales results, we continue to work on our profitability, as cost pressures persist. To address this, we chose to implement an early retirement program launched in the second quarter. Benefits of this program will phase in over the next few quarters, and once fully realized, we anticipate achieving an estimated $10 million of annualized savings. We expect one-time severance costs of approximately $6 million related to this program, of which $2.6 million was incurred in the second quarter, and an additional $3.1 million is expected to be incurred in the second half of 2024 as people retire.”
During the quarter, we announced a definitive agreement to acquire AX V Nissens III APS (“Nissens”), a leading European manufacturer and distributor of aftermarket engine cooling and air conditioning products with a growing array of vehicle control technologies, for approximately $388 million (€360 million) in cash. Nissens has annual revenues of approximately $260 million with a mid-teens EBITDA margin rate. The transaction is expected to be completed before the end of 2024, and is subject to certain closing conditions, including receipt of applicable antitrust and other regulatory approvals. We are extremely excited about this major step forward for our company. For more details, please see our July 10, 2024 press release and investor presentation related to the Nissens acquisition located on our website www.smpcorp.com.
As part of our commitment to return value to shareholders, the Board of Directors has approved payment of a quarterly dividend of 29 cents per share on the common stock outstanding, which will be paid on September 3, 2024 to stockholders of record on August 15, 2024. Additionally, we purchased $7.8 million of common stock under our existing share repurchase authorization during the quarter, leaving our remaining authorization under the current program at $19.6 million.
Regarding our sales and profit expectations for the full year of 2024, and excluding any impact from the Nissens acquisition, we anticipate sales growth will be in the low- to mid-single digits, up from prior projections, and Adjusted EBITDA will be in a range of 9.0-9.5%, consistent with what we noted previously. We expect to incur roughly $3-4 million of additional start-up costs in 2024 as compared to 2023 for our new distribution center in Shawnee, KS, related to increased rent as well as duplicate expenses as we transition away from our Edwardsville, KS distribution center.
In closing, Mr. Sills commented “As we look towards the second half of the year, we are encouraged with the demand seen so far across all our segments. Aftermarket fundamentals remain positive, and our Engineered Solutions business is performing well. Lastly, we are excited about our planned acquisition of Nissens that expands our geographic presence, and provides a meaningful global growth platform for many years to come. We want to thank all our employees for our current success and helping us achieve our goals for the future.”
Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, August 1, 2024. This call will be webcast and can be accessed on the Investor Relations page of our website at www.smpcorp.com and clicking on the SMP 2Q 2024 Earnings Webcast link. Investors may also listen to the call by dialing 800-343-4136 (domestic) or 203-518-9843 (international) and using conference ID SMP2Q2024. 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 800-938-2490 (domestic) or 402-220-9028 (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 | SIX MONTHS ENDED | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| JUNE 30, | JUNE 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| NET SALES | $ | 389,829 | $ | 353,075 | $ | 721,232 | $ | 681,103 | ||||
| COST OF SALES | 278,382 | 251,806 | 520,263 | 488,567 | ||||||||
| GROSS PROFIT | 111,447 | 101,269 | 200,969 | 192,536 | ||||||||
| SELLING, GENERAL & ADMINISTRATIVE EXPENSES | 83,885 | 73,843 | 158,618 | 143,476 | ||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 2,559 | 294 | 2,751 | 1,206 | ||||||||
| OTHER INCOME (EXPENSE), NET | (17 | ) | 46 | 5 | 70 | |||||||
| OPERATING INCOME | 24,986 | 27,178 | 39,605 | 47,924 | ||||||||
| OTHER NON-OPERATING INCOME, NET | 2,199 | 802 | 3,018 | 1,027 | ||||||||
| INTEREST EXPENSE | 2,752 | 3,283 | 4,819 | 7,145 | ||||||||
| EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | 24,433 | 24,697 | 37,804 | 41,806 | ||||||||
| PROVISION FOR INCOME TAXES | 6,109 | 6,289 | 9,451 | 10,661 | ||||||||
| EARNINGS FROM CONTINUING OPERATIONS | 18,324 | 18,408 | 28,353 | 31,145 | ||||||||
| LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES | (917 | ) | (9,221 | ) | (1,956 | ) | (10,001 | ) | ||||
| NET EARNINGS | 17,407 | 9,187 | 26,397 | 21,144 | ||||||||
| NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | 344 | 50 | 510 | 89 | ||||||||
| NET EARNINGS ATTRIBUTABLE TO SMP (a) | $ | 17,063 | $ | 9,137 | $ | 25,887 | $ | 21,055 | ||||
| NET EARNINGS ATTRIBUTABLE TO SMP | ||||||||||||
| EARNINGS FROM CONTINUING OPERATIONS | $ | 17,980 | $ | 18,358 | $ | 27,843 | $ | 31,056 | ||||
| LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES | (917 | ) | (9,221 | ) | (1,956 | ) | (10,001 | ) | ||||
| TOTAL | $ | 17,063 | $ | 9,137 | $ | 25,887 | $ | 21,055 | ||||
| NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP | ||||||||||||
| BASIC EARNINGS FROM CONTINUING OPERATIONS | $ | 0.83 | $ | 0.85 | $ | 1.27 | $ | 1.43 | ||||
| DISCONTINUED OPERATION | (0.05 | ) | (0.43 | ) | (0.09 | ) | (0.46 | ) | ||||
| NET EARNINGS PER COMMON SHARE - BASIC | $ | 0.78 | $ | 0.42 | $ | 1.18 | $ | 0.97 | ||||
| DILUTED EARNINGS FROM CONTINUING OPERATIONS | $ | 0.81 | $ | 0.83 | $ | 1.25 | $ | 1.40 | ||||
| DISCONTINUED OPERATION | (0.04 | ) | (0.42 | ) | (0.09 | ) | (0.45 | ) | ||||
| NET EARNINGS PER COMMON SHARE - DILUTED | $ | 0.77 | $ | 0.41 | $ | 1.16 | $ | 0.95 | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES | 21,767,526 | 21,689,067 | 21,845,678 | 21,649,562 | ||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES | 22,185,536 | 22,183,489 | 22,277,590 | 22,139,708 |
(a) “SMP” refers to Standard Motor Products, Inc. and subsidiaries.
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Profit
(In thousands)
| THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| JUNE 30, | JUNE 30, | |||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||
| Revenues | ||||||||||||||||||||
| Engine Management (Ignition, Emissions and Fuel Delivery) | $ | 115,529 | $ | 113,589 | $ | 231,614 | $ | 229,672 | ||||||||||||
| Electrical and Safety | 57,128 | 52,867 | 109,535 | 104,671 | ||||||||||||||||
| Wire sets and other | 16,084 | 17,333 | 33,116 | 34,023 | ||||||||||||||||
| Vehicle Control | 188,741 | 183,789 | 374,265 | 368,366 | ||||||||||||||||
| AC System Components | 99,970 | 72,730 | 149,930 | 123,528 | ||||||||||||||||
| Other Thermal Components | 24,511 | 24,344 | 46,159 | 45,952 | ||||||||||||||||
| Temperature Control | 124,481 | 97,074 | 196,089 | 169,480 | ||||||||||||||||
| Commercial Vehicle | 23,483 | 20,225 | 46,391 | 40,457 | ||||||||||||||||
| Construction / Agriculture | 9,473 | 11,138 | 19,549 | 22,830 | ||||||||||||||||
| Light Vehicle | 24,686 | 23,981 | 46,489 | 47,000 | ||||||||||||||||
| All Other | 18,965 | 16,868 | 38,449 | 32,970 | ||||||||||||||||
| Engineered Solutions | 76,607 | 72,212 | 150,878 | 143,257 | ||||||||||||||||
| - | ||||||||||||||||||||
| Revenues | $ | 389,829 | $ | 353,075 | $ | 721,232 | $ | 681,103 | ||||||||||||
| Gross Margin | ||||||||||||||||||||
| Vehicle Control | $ | 59,969 | 31.8 | % | $ | 60,109 | 32.7 | % | $ | 118,868 | 31.8 | % | $ | 118,581 | 32.2 | % | ||||
| Temperature Control | 36,609 | 29.4 | % | 26,512 | 27.3 | % | 56,298 | 28.7 | % | 45,667 | 26.9 | % | ||||||||
| Engineered Solutions | 14,869 | 19.4 | % | 14,648 | 20.3 | % | 25,803 | 17.1 | % | 28,288 | 19.7 | % | ||||||||
| All Other | - | - | - | - | ||||||||||||||||
| Gross Margin | $ | 111,447 | 28.6 | % | $ | 101,269 | 28.7 | % | $ | 200,969 | 27.9 | % | $ | 192,536 | 28.3 | % | ||||
| Selling, General & Administrative | ||||||||||||||||||||
| Vehicle Control | $ | 43,844 | 23.2 | % | $ | 40,720 | 22.2 | % | $ | 87,102 | 23.3 | % | $ | 81,556 | 22.1 | % | ||||
| Temperature Control | 23,165 | 18.6 | % | 20,584 | 21.2 | % | 40,765 | 20.8 | % | 37,112 | 21.9 | % | ||||||||
| Engineered Solutions | 8,676 | 11.3 | % | 8,481 | 11.7 | % | 17,367 | 11.5 | % | 16,390 | 11.4 | % | ||||||||
| All Other | 5,789 | 4,058 | 10,973 | 8,418 | ||||||||||||||||
| Subtotal | $ | 81,474 | 20.9 | % | $ | 73,843 | 20.9 | % | $ | 156,207 | 21.7 | % | $ | 143,476 | 21.1 | % | ||||
| Acquisition Expenses | 2,411 | 0.6 | % | - | 0.0 | % | 2,411 | 0.3 | % | - | 0.0 | % | ||||||||
| Selling, General & Administrative | $ | 83,885 | 21.5 | % | $ | 73,843 | 20.9 | % | $ | 158,618 | 22.0 | % | $ | 143,476 | 21.1 | % | ||||
| Operating Income | ||||||||||||||||||||
| Vehicle Control | $ | 16,125 | 8.5 | % | $ | 19,389 | 10.5 | % | $ | 31,766 | 8.5 | % | $ | 37,025 | 10.1 | % | ||||
| Temperature Control | 13,444 | 10.8 | % | 5,928 | 6.1 | % | 15,533 | 7.9 | % | 8,555 | 5.0 | % | ||||||||
| Engineered Solutions | 6,193 | 8.1 | % | 6,167 | 8.5 | % | 8,436 | 5.6 | % | 11,898 | 8.3 | % | ||||||||
| All Other | (5,789 | ) | (4,058 | ) | (10,973 | ) | (8,418 | ) | ||||||||||||
| Subtotal | $ | 29,973 | 7.7 | % | $ | 27,426 | 7.8 | % | $ | 44,762 | 6.2 | % | $ | 49,060 | 7.2 | % | ||||
| Restructuring & Integration | (2,559 | ) | -0.7 | % | (294 | ) | -0.1 | % | (2,751 | ) | -0.4 | % | (1,206 | ) | -0.2 | % | ||||
| Acquisition Expenses | (2,411 | ) | -0.6 | % | - | 0.0 | % | (2,411 | ) | -0.3 | % | - | 0.0 | % | ||||||
| Other Income (Expense), Net | (17 | ) | 0.0 | % | 46 | 0.0 | % | 5 | 0.0 | % | 70 | 0.0 | % | |||||||
| Operating Income | $ | 24,986 | 6.4 | % | $ | 27,178 | 7.7 | % | $ | 39,605 | 5.5 | % | $ | 47,924 | 7.0 | % |
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
(In thousands, except per share amounts)
| THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| JUNE 30, | JUNE 30, | |||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||
| EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP | ||||||||||||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS | $ | 17,980 | $ | 18,358 | $ | 27,843 | $ | 31,056 | ||||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 2,559 | 294 | 2,751 | 1,206 | ||||||||||||||
| ACQUISITION EXPENSES | 2,411 | - | 2,411 | - | ||||||||||||||
| INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | (1,292 | ) | (77 | ) | (1,342 | ) | (314 | ) | ||||||||||
| NON-GAAP EARNINGS FROM CONTINUING OPERATIONS | $ | 21,658 | $ | 18,575 | $ | 31,663 | $ | 31,948 | ||||||||||
| DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP | ||||||||||||||||||
| GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ | 0.81 | $ | 0.83 | $ | 1.25 | $ | 1.40 | ||||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 0.12 | 0.01 | 0.12 | 0.05 | ||||||||||||||
| ACQUISITION EXPENSES | 0.11 | - | 0.11 | - | ||||||||||||||
| INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | (0.06 | ) | - | (0.06 | ) | (0.01 | ) | |||||||||||
| NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ | 0.98 | $ | 0.84 | $ | 1.42 | $ | 1.44 | ||||||||||
| OPERATING INCOME | ||||||||||||||||||
| GAAP OPERATING INCOME | $ | 24,986 | $ | 27,178 | $ | 39,605 | $ | 47,924 | ||||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 2,559 | 294 | 2,751 | 1,206 | ||||||||||||||
| ACQUISITION EXPENSES | 2,411 | - | 2,411 | - | ||||||||||||||
| OTHER (INCOME) EXPENSE, NET | 17 | (46 | ) | (5 | ) | (70 | ) | LAST TWELVE MONTHS ENDED | YEAR ENDED | |||||||||
| JUNE 30, | DECEMBER 31, | |||||||||||||||||
| NON-GAAP OPERATING INCOME | $ | 29,973 | $ | 27,426 | $ | 44,762 | $ | 49,060 | 2024 | 2023 | 2023 | |||||||
| (Unaudited) | ||||||||||||||||||
| EBITDA WITHOUT SPECIAL ITEMS | ||||||||||||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | $ | 24,433 | $ | 24,697 | $ | 37,804 | $ | 41,806 | $ | 77,714 | $ | 84,580 | $ | 81,716 | ||||
| DEPRECIATION AND AMORTIZATION | 7,318 | 7,047 | 14,619 | 14,129 | 29,512 | 28,534 | 29,022 | |||||||||||
| INTEREST EXPENSE | 2,752 | 3,283 | 4,819 | 7,145 | 10,961 | 15,136 | 13,287 | |||||||||||
| EBITDA | 34,503 | 35,027 | 57,242 | 63,080 | 118,187 | 128,250 | 124,025 | |||||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 2,559 | 294 | 2,751 | 1,206 | 4,187 | 3,053 | 2,642 | |||||||||||
| ACQUISITION EXPENSES | 2,411 | - | 2,411 | - | 2,411 | - | - | |||||||||||
| CUSTOMER BANKRUPTCY CHARGE | - | - | - | - | - | 7,002 | - | |||||||||||
| SPECIAL ITEMS | 4,970 | 294 | 5,162 | 1,206 | 6,598 | 10,055 | 2,642 | |||||||||||
| EBITDA WITHOUT SPECIAL ITEMS | $ | 39,473 | $ | 35,321 | $ | 62,404 | $ | 64,286 | $ | 124,785 | $ | 138,305 | $ | 126,667 |
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 JUNE 30, 2024 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Vehicle Control | Temperature<br><br> <br>Control | Engineered<br><br> <br>Solutions | All Other | Consolidated | |||||||||||
| (Unaudited) | |||||||||||||||
| OPERATING INCOME | |||||||||||||||
| GAAP OPERATING INCOME | $ | 15,116 | $ | 13,197 | $ | 5,812 | $ | (9,139 | ) | $ | 24,986 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,009 | 247 | 364 | 939 | 2,559 | ||||||||||
| ACQUISITION EXPENSES | - | - | - | 2,411 | 2,411 | ||||||||||
| OTHER EXPENSE, NET | - | - | 17 | - | 17 | ||||||||||
| NON-GAAP OPERATING INCOME | $ | 16,125 | $ | 13,444 | $ | 6,193 | $ | (5,789 | ) | $ | 29,973 | ||||
| EBITDA WITHOUT SPECIAL ITEMS | |||||||||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | $ | 13,067 | $ | 13,978 | $ | 6,529 | $ | (9,141 | ) | $ | 24,433 | ||||
| DEPRECIATION AND AMORTIZATION | 3,606 | 780 | 2,463 | 469 | 7,318 | ||||||||||
| INTEREST EXPENSE | 1,899 | 726 | 706 | (579 | ) | 2,752 | |||||||||
| EBITDA | 18,572 | 15,484 | 9,698 | (9,251 | ) | 34,503 | |||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,009 | 247 | 364 | 939 | 2,559 | ||||||||||
| ACQUISITION EXPENSES | - | - | - | 2,411 | 2,411 | ||||||||||
| SPECIAL ITEMS | 1,009 | 247 | 364 | 3,350 | 4,970 | ||||||||||
| EBITDA WITHOUT SPECIAL ITEMS | $ | 19,581 | $ | 15,731 | $ | 10,062 | $ | (5,901 | ) | $ | 39,473 | ||||
| % of Net Sales | 10.4 | % | 12.6 | % | 13.1 | % | 10.1 | % | |||||||
| (In thousands) | THREE MONTHS ENDED JUNE 30, 2023 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Vehicle Control | Temperature<br><br> <br>Control | Engineered<br><br> <br>Solutions | All Other | Consolidated | |||||||||||
| (Unaudited) | |||||||||||||||
| OPERATING INCOME | |||||||||||||||
| GAAP OPERATING INCOME | $ | 19,273 | $ | 5,800 | $ | 6,163 | $ | (4,058 | ) | $ | 27,178 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 154 | 128 | 12 | - | 294 | ||||||||||
| OTHER INCOME, NET | (38 | ) | - | (8 | ) | - | (46 | ) | |||||||
| NON-GAAP OPERATING INCOME | $ | 19,389 | $ | 5,928 | $ | 6,167 | $ | (4,058 | ) | $ | 27,426 | ||||
| EBITDA WITHOUT SPECIAL ITEMS | |||||||||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | $ | 17,235 | $ | 5,259 | $ | 6,247 | $ | (4,044 | ) | $ | 24,697 | ||||
| DEPRECIATION AND AMORTIZATION | 3,373 | 768 | 2,486 | 420 | 7,047 | ||||||||||
| INTEREST EXPENSE | 2,304 | 842 | 637 | (500 | ) | 3,283 | |||||||||
| EBITDA | 22,912 | 6,869 | 9,370 | (4,124 | ) | 35,027 | |||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 154 | 128 | 12 | - | 294 | ||||||||||
| SPECIAL ITEMS | 154 | 128 | 12 | - | 294 | ||||||||||
| EBITDA WITHOUT SPECIAL ITEMS | $ | 23,066 | $ | 6,997 | $ | 9,382 | $ | (4,124 | ) | $ | 35,321 | ||||
| % of Net Sales | 12.6 | % | 7.2 | % | 13.0 | % | 10.0 | % |
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) | SIX MONTHS ENDED JUNE 30, 2024 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Vehicle Control | Temperature<br><br> <br>Control | Engineered<br><br> <br>Solutions | All Other | Consolidated | |||||||||||
| (Unaudited) | |||||||||||||||
| OPERATING INCOME | |||||||||||||||
| GAAP OPERATING INCOME | $ | 30,656 | $ | 15,228 | $ | 8,044 | $ | (14,323 | ) | $ | 39,605 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,110 | 305 | 397 | 939 | 2,751 | ||||||||||
| ACQUISITION EXPENSES | - | - | - | 2,411 | 2,411 | ||||||||||
| OTHER INCOME, NET | - | - | (5 | ) | - | (5 | ) | ||||||||
| NON-GAAP OPERATING INCOME | $ | 31,766 | $ | 15,533 | $ | 8,436 | $ | (10,973 | ) | $ | 44,762 | ||||
| EBITDA WITHOUT SPECIAL ITEMS | |||||||||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | $ | 27,382 | $ | 15,866 | $ | 8,875 | $ | (14,319 | ) | $ | 37,804 | ||||
| DEPRECIATION AND AMORTIZATION | 7,131 | 1,678 | 4,932 | 878 | 14,619 | ||||||||||
| INTEREST EXPENSE | 3,326 | 1,257 | 1,370 | (1,134 | ) | 4,819 | |||||||||
| EBITDA | 37,839 | 18,801 | 15,177 | (14,575 | ) | 57,242 | |||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 1,110 | 305 | 397 | 939 | 2,751 | ||||||||||
| ACQUISITION EXPENSES | - | - | - | 2,411 | 2,411 | ||||||||||
| SPECIAL ITEMS | 1,110 | 305 | 397 | 3,350 | 5,162 | ||||||||||
| EBITDA WITHOUT SPECIAL ITEMS | $ | 38,949 | $ | 19,106 | $ | 15,574 | $ | (11,225 | ) | $ | 62,404 | ||||
| % of Net Sales | 10.4 | % | 9.7 | % | 10.3 | % | 8.7 | % | |||||||
| (In thousands) | SIX MONTHS ENDED JUNE 30, 2023 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Vehicle Control | Temperature Control | Engineered Solutions | All Other | Consolidated | |||||||||||
| (Unaudited) | |||||||||||||||
| OPERATING INCOME | |||||||||||||||
| GAAP OPERATING INCOME | $ | 36,648 | $ | 7,884 | $ | 11,810 | $ | (8,418 | ) | $ | 47,924 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 439 | 671 | 96 | - | 1,206 | ||||||||||
| OTHER INCOME, NET | (62 | ) | (8 | ) | - | (70 | ) | ||||||||
| NON-GAAP OPERATING INCOME | $ | 37,025 | $ | 8,555 | $ | 11,898 | $ | (8,418 | ) | $ | 49,060 | ||||
| EBITDA WITHOUT SPECIAL ITEMS | |||||||||||||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | $ | 32,292 | $ | 6,364 | $ | 11,533 | $ | (8,383 | ) | $ | 41,806 | ||||
| DEPRECIATION AND AMORTIZATION | 6,785 | 1,531 | 4,967 | 846 | 14,129 | ||||||||||
| INTEREST EXPENSE | 5,045 | 1,735 | 996 | (631 | ) | 7,145 | |||||||||
| EBITDA | 44,122 | 9,630 | 17,496 | (8,168 | ) | 63,080 | |||||||||
| RESTRUCTURING AND INTEGRATION EXPENSES | 439 | 671 | 96 | - | 1,206 | ||||||||||
| SPECIAL ITEMS | 439 | 671 | 96 | - | 1,206 | ||||||||||
| EBITDA WITHOUT SPECIAL ITEMS | $ | 44,561 | $ | 10,301 | $ | 17,592 | $ | (8,168 | ) | $ | 64,286 | ||||
| % of Net Sales | 12.1 | % | 6.1 | % | 12.3 | % | 9.4 | % |
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)
| JUNE | JUNE | DECEMBER | ||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2023 | ||||
| (Unaudited) | (Unaudited) | |||||
| ASSETS | ||||||
| CASH AND CASH EQUIVALENTS | $ | 26,156 | $ | 23,019 | $ | 32,526 |
| ACCOUNTS RECEIVABLE, GROSS | 247,989 | 223,862 | 168,327 | |||
| ALLOWANCE FOR EXPECTED CREDIT LOSSES | 8,672 | 5,757 | 8,045 | |||
| ACCOUNTS RECEIVABLE, NET | 239,317 | 218,105 | 160,282 | |||
| INVENTORIES | 508,183 | 499,134 | 507,075 | |||
| UNRETURNED CUSTOMER INVENTORY | 18,119 | 19,722 | 18,240 | |||
| OTHER CURRENT ASSETS | 24,880 | 27,903 | 26,100 | |||
| TOTAL CURRENT ASSETS | 816,655 | 787,883 | 744,223 | |||
| PROPERTY, PLANT AND EQUIPMENT, NET | 131,921 | 107,590 | 121,872 | |||
| OPERATING LEASE RIGHT-OF-USE ASSETS | 99,121 | 73,093 | 100,065 | |||
| GOODWILL | 134,476 | 132,391 | 134,729 | |||
| OTHER INTANGIBLES, NET | 87,597 | 96,291 | 92,308 | |||
| DEFERRED INCOME TAXES | 40,287 | 33,905 | 40,533 | |||
| INVESTMENT IN UNCONSOLIDATED AFFILIATES | 25,615 | 41,557 | 24,050 | |||
| OTHER ASSETS | 38,656 | 29,435 | 35,267 | |||
| TOTAL ASSETS | $ | 1,374,328 | $ | 1,302,145 | $ | 1,293,047 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| CURRENT PORTION OF REVOLVING CREDIT FACILITY | $ | - | $ | 53,700 | $ | - |
| CURRENT PORTION OF TERM LOAN AND OTHER DEBT | 5,030 | 5,028 | 5,029 | |||
| ACCOUNTS PAYABLE | 105,094 | 94,657 | 107,455 | |||
| ACCRUED CUSTOMER RETURNS | 53,102 | 43,664 | 38,238 | |||
| ACCRUED CORE LIABILITY | 16,017 | 20,187 | 18,399 | |||
| ACCRUED REBATES | 54,280 | 43,781 | 42,278 | |||
| PAYROLL AND COMMISSIONS | 32,404 | 28,346 | 29,561 | |||
| SUNDRY PAYABLES AND ACCRUED EXPENSES | 66,239 | 59,126 | 63,303 | |||
| TOTAL CURRENT LIABILITIES | 332,166 | 348,489 | 304,263 | |||
| LONG-TERM DEBT | 203,162 | 164,488 | 151,182 | |||
| NONCURRENT OPERATING LEASE LIABILITY | 88,820 | 64,271 | 88,974 | |||
| ACCRUED ASBESTOS LIABILITIES | 66,357 | 59,565 | 72,013 | |||
| OTHER LIABILITIES | 29,501 | 24,917 | 25,742 | |||
| TOTAL LIABILITIES | 720,006 | 661,730 | 642,174 | |||
| TOTAL SMP STOCKHOLDERS’ EQUITY | 640,018 | 629,673 | 635,064 | |||
| NONCONTROLLING INTEREST | 14,304 | 10,742 | 15,809 | |||
| TOTAL STOCKHOLDERS’ EQUITY | 654,322 | 640,415 | 650,873 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,374,328 | $ | 1,302,145 | $ | 1,293,047 |
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
| SIX MONTHS ENDED | ||||||
|---|---|---|---|---|---|---|
| JUNE 30, | ||||||
| 2024 | 2023 | |||||
| (Unaudited) | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| NET EARNINGS | $ | 26,397 | $ | 21,144 | ||
| ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH | ||||||
| PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||||||
| DEPRECIATION AND AMORTIZATION | 14,619 | 14,129 | ||||
| LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES | 1,956 | 10,001 | ||||
| OTHER | 5,560 | 5,835 | ||||
| CHANGE IN ASSETS AND LIABILITIES: | ||||||
| ACCOUNTS RECEIVABLE | (81,060 | ) | (48,271 | ) | ||
| INVENTORY | (3,641 | ) | 30,924 | |||
| ACCOUNTS PAYABLE | (2,168 | ) | 4,323 | |||
| PREPAID EXPENSES AND OTHER CURRENT ASSETS | 2,757 | (468 | ) | |||
| SUNDRY PAYABLES AND ACCRUED EXPENSES | 29,966 | 2,776 | ||||
| OTHER | (4,525 | ) | (1,023 | ) | ||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (10,139 | ) | 39,370 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| CASH ACQUIRED IN STEP ACQUISITION | - | - | ||||
| CAPITAL EXPENDITURES | (22,941 | ) | (9,507 | ) | ||
| OTHER INVESTING ACTIVITIES | 18 | 66 | ||||
| NET CASH USED IN INVESTING ACTIVITIES | (22,923 | ) | (9,441 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| NET CHANGE IN DEBT | 51,986 | (16,547 | ) | |||
| PURCHASE OF TREASURY STOCK | (10,409 | ) | - | |||
| DIVIDENDS PAID | (12,706 | ) | (12,544 | ) | ||
| OTHER FINANCING ACTIVITIES | (400 | ) | 3 | |||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 28,471 | (29,088 | ) | |||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | (1,779 | ) | 1,028 | |||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (6,370 | ) | 1,869 | |||
| CASH AND CASH EQUIVALENTS at beginning of period | 32,526 | 21,150 | ||||
| CASH AND CASH EQUIVALENTS at end of period | $ | 26,156 | $ | 23,019 |