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): May 5, 2021
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 May 5, 2021, Standard Motor Products, Inc. (the “Company”) issued a press release announcing its financial results for the three months
ended March 31, 2021. 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 May 5, 2021 announcing Standard Motor Products, Inc.’s financial results for the three months ended March 31, 2021. |
| --- | --- |
| 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: May 5, 2021 |
2
Exhibit Index
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated May 5, 2021 announcing Standard Motor Products, Inc.’s<br> financial results for the three months ended March 31, 2021. |
| 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: | |
| Nathan R. Iles | |
| Standard Motor Products, Inc. | |
| (718) 392-0200 |
Standard Motor Products, Inc. Announces
First Quarter 2021 Results and a Quarterly Dividend
New York, NY, May 5, 2021......Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months ended March 31, 2021.
Consolidated net sales for the first quarter of 2021 were $276.6 million, compared to consolidated net sales of $254.3 million during the comparable quarter in 2020. Earnings from continuing operations for the first quarter of 2021 were $22.2 million or 97 cents per diluted share, compared to $9.6 million or 42 cents per diluted share in the first 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 first quarter of 2021 were $22.2 million or 97 cents per diluted share, compared to $9.8 million or 43 cents per diluted share in the first quarter of 2020.
Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are very pleased with our first quarter results, as the momentum from the second half of 2020 carried over into 2021. Net sales were 8.7% above the first quarter of 2020, with both divisions showing gains. It is important to note that comparisons to last year will become less relevant due to COVID-19 impacts last year, though the first quarter of 2020 was only modestly affected.
“Engine Management net sales were up 5.4% as compared to 2020. Although we had a substantial reduction in sales in the quarter from the loss of a major account (previously announced), we were very pleased to see strong demand from our other customers offsetting the loss. Looking at our customer POS, their sell-through was even more encouraging, where many accounts enjoyed gains well into the double digit range. We believe that the actions we have taken to support our customers in the field are having success. Furthermore, we have secured new business wins, which will phase in over the course of the next several months.
“Temperature Control sales were ahead 21.4%. However, the first quarter essentially reflects pre-season orders, which, as previously discussed, were very light last year. Our pre-season orders continue to be strong in the second quarter as our customers replenish their shelves from a hot 2020 summer, though the full year results will be heavily dependent on how hot this summer will be.
“Gross margin was substantially above the first quarter of 2020, as factory production has remained at high levels throughout the company in our effort to rebuild our inventory. While we expect the ongoing benefit of robust production levels, we do see some offsetting headwinds as we face various inflationary costs in labor, certain raw materials, and transportation.
“Operating expenses were reduced slightly in the quarter. We continue to benefit from discretionary cost reductions instituted during the pandemic, though these were partially offset by increased distribution expense due to higher sales and elevated freight costs.
“The result was an all-time record in first quarter earnings, with non-GAAP diluted EPS from continuing operations more than doubling, from 43 cents in 2020 to 97 cents in 2021.
“We are also very pleased with our progress towards expanding our business in OE commercial vehicle / off-road markets. We have been developing this business for several years, and have recently fortified it with two excellent acquisitions, both from Stoneridge, Inc. In 2019 we acquired their Pollak business, and in March of this year we acquired their particulate matter sensor business (more commonly known as soot sensors). We believe that this OE commercial vehicle focus will provide an excellent growth path for us, and the products we are developing for this segment will strengthen our offering in our core aftermarket business.
“Overall, we are pleased with our momentum as we exit the first quarter. We continue to see strong incoming orders from our customers, which reflect the healthy POS increases they are experiencing. The economy continues to improve, and more people are returning to work. This leads to more cars on the road and increased miles driven, one of the key determinants for our industry. We look forward to the balance of the year.
“Lastly, the Board of Directors has approved payment of a quarterly dividend of 25 cents per share on the common stock outstanding. The dividend will be paid on June 1, 2021 to stockholders of record on May 17, 2021.”
Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 5, 2021. The dial-in number is 800-896-8445 (domestic) or 785-830-1916 (international). The playback number is 800-839-5630 (domestic) or 402-220-2557 (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<br><br> <br>MARCH 31, | ||||||
| 2021 | 2020 | |||||
| (Unaudited) | ||||||
| NET SALES | $ | 276,553 | $ | 254,302 | ||
| COST OF SALES | 192,769 | 183,907 | ||||
| GROSS PROFIT | 83,784 | 70,395 | ||||
| SELLING, GENERAL & ADMINISTRATIVE EXPENSES | 54,460 | 55,873 | ||||
| RESTRUCTURING AND INTEGRATION EXPENSES | - | 205 | ||||
| OTHER INCOME, NET | - | 6 | ||||
| OPERATING INCOME | 29,324 | 14,323 | ||||
| OTHER NON-OPERATING INCOME (EXPENSE), NET | 635 | (524 | ) | |||
| INTEREST EXPENSE | 209 | 873 | ||||
| EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | 29,750 | 12,926 | ||||
| PROVISION FOR INCOME TAXES | 7,586 | 3,305 | ||||
| EARNINGS FROM CONTINUING OPERATIONS | 22,164 | 9,621 | ||||
| LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES | (1,164 | ) | (994 | ) | ||
| NET EARNINGS | $ | 21,000 | $ | 8,627 | ||
| NET EARNINGS PER COMMON SHARE: | ||||||
| BASIC EARNINGS FROM CONTINUING OPERATIONS | $ | 0.99 | $ | 0.43 | ||
| DISCONTINUED OPERATION | (0.05 | ) | (0.05 | ) | ||
| NET EARNINGS PER COMMON SHARE - BASIC | $ | 0.94 | $ | 0.38 | ||
| DILUTED EARNINGS FROM CONTINUING OPERATIONS | $ | 0.97 | $ | 0.42 | ||
| DISCONTINUED OPERATION | (0.05 | ) | (0.04 | ) | ||
| NET EARNINGS PER COMMON SHARE - DILUTED | $ | 0.92 | $ | 0.38 | ||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES | 22,317,959 | 22,438,087 | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES | 22,765,508 | 22,868,975 |
STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income
| (In thousands) | ||||||||
|---|---|---|---|---|---|---|---|---|
| THREE MONTHS ENDED<br><br> <br>MARCH 31, | ||||||||
| 2021 | 2020 | |||||||
| (Unaudited) | ||||||||
| Revenues | ||||||||
| Ignition, Emission Control, Fuel & Safety | ||||||||
| Related System Products | $ | 173,666 | $ | 164,526 | ||||
| Wire and Cable | 38,352 | 36,592 | ||||||
| Engine Management | 212,018 | 201,118 | ||||||
| Compressors | 33,374 | 25,348 | ||||||
| Other Climate Control Parts | 29,099 | 26,094 | ||||||
| Temperature Control | 62,473 | 51,442 | ||||||
| All Other | 2,062 | 1,742 | ||||||
| Revenues | $ | 276,553 | $ | 254,302 | ||||
| Gross Margin | ||||||||
| Engine Management | $ | 65,070 | 30.7% | $ | 56,705 | 28.2% | ||
| Temperature Control | 15,995 | 25.6% | 12,096 | 23.5% | ||||
| All Other | 2,719 | 1,594 | ||||||
| Gross Margin | $ | 83,784 | 30.3% | $ | 70,395 | 27.7% | ||
| Selling, General & Administrative | ||||||||
| Engine Management | $ | 33,956 | 16.0% | $ | 35,073 | 17.4% | ||
| Temperature Control | 12,403 | 19.9% | 12,444 | 24.2% | ||||
| All Other | 8,101 | 8,356 | ||||||
| Selling, General & Administrative | $ | 54,460 | 19.7% | $ | 55,873 | 22.0% | ||
| Operating Income | ||||||||
| Engine Management | $ | 31,114 | 14.7% | $ | 21,632 | 10.8% | ||
| Temperature Control | 3,592 | 5.7% | (348 | ) | -0.7% | |||
| All Other | (5,382 | ) | (6,762 | ) | ||||
| Subtotal | 29,324 | 10.6% | 14,522 | 5.7% | ||||
| Restructuring & Integration | - | 0.0% | (205 | ) | -0.1% | |||
| Other Income, Net | - | 0.0% | 6 | 0.0% | ||||
| Operating Income | $ | 29,324 | 10.6% | $ | 14,323 | 5.6% |
STANDARD MOTOR PRODUCTS, INC.
Reconciliation of GAAP and Non-GAAP Measures
| (In thousands, except per share amounts) | |||||
|---|---|---|---|---|---|
| THREE MONTHS ENDED<br><br> <br>MARCH 31, | |||||
| 2021 | 2020 | ||||
| (Unaudited) | |||||
| EARNINGS FROM CONTINUING OPERATIONS | |||||
| GAAP EARNINGS FROM CONTINUING OPERATIONS | $ | 22,164 | $ | 9,621 | |
| RESTRUCTURING AND INTEGRATION EXPENSES | - | 205 | |||
| INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | - | (53 | ) | ||
| NON-GAAP EARNINGS FROM CONTINUING OPERATIONS | $ | 22,164 | $ | 9,773 | |
| DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | |||||
| GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ | 0.97 | $ | 0.42 | |
| RESTRUCTURING AND INTEGRATION EXPENSES | - | 0.01 | |||
| INCOME TAX EFFECT RELATED TO RECONCILING ITEMS | - | - | |||
| NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS | $ | 0.97 | $ | 0.43 | |
| OPERATING INCOME | |||||
| GAAP OPERATING INCOME | $ | 29,324 | $ | 14,323 | |
| RESTRUCTURING AND INTEGRATION EXPENSES | - | 205 | |||
| OTHER INCOME, NET | - | (6 | ) | ||
| NON-GAAP OPERATING INCOME | $ | 29,324 | $ | 14,522 |
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) | ||||
|---|---|---|---|---|
| March 31,<br><br> <br>2021 | December 31,<br><br> <br>2020 | |||
| (Unaudited) | ||||
| ASSETS | ||||
| CASH | $ | 17,100 | $ | 19,488 |
| ACCOUNTS RECEIVABLE, GROSS | 179,848 | 203,861 | ||
| ALLOWANCE FOR DOUBTFUL ACCOUNTS | 5,744 | 5,822 | ||
| ACCOUNTS RECEIVABLE, NET | 174,104 | 198,039 | ||
| INVENTORIES | 390,896 | 345,502 | ||
| UNRETURNED CUSTOMER INVENTORY | 21,088 | 19,632 | ||
| OTHER CURRENT ASSETS | 13,848 | 15,875 | ||
| TOTAL CURRENT ASSETS | 617,036 | 598,536 | ||
| PROPERTY, PLANT AND EQUIPMENT, NET | 88,563 | 89,105 | ||
| OPERATING LEASE RIGHT-OF-USE ASSETS | 31,453 | 29,958 | ||
| GOODWILL | 77,838 | 77,837 | ||
| OTHER INTANGIBLES, NET | 52,803 | 54,004 | ||
| DEFERRED INCOME TAXES | 43,692 | 44,770 | ||
| INVESTMENT IN UNCONSOLIDATED AFFILIATES | 40,684 | 40,507 | ||
| OTHER ASSETS | 24,413 | 21,823 | ||
| TOTAL ASSETS | $ | 976,482 | $ | 956,540 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| NOTES PAYABLE | $ | 40,967 | $ | 10,000 |
| CURRENT PORTION OF OTHER DEBT | 1,523 | 135 | ||
| ACCOUNTS PAYABLE | 108,536 | 100,018 | ||
| ACCRUED CUSTOMER RETURNS | 44,729 | 40,982 | ||
| ACCRUED CORE LIABILITY | 22,569 | 22,014 | ||
| ACCRUED REBATES | 39,294 | 46,437 | ||
| PAYROLL AND COMMISSIONS | 19,094 | 35,938 | ||
| SUNDRY PAYABLES AND ACCRUED EXPENSES | 36,712 | 47,078 | ||
| TOTAL CURRENT LIABILITIES | 313,424 | 302,602 | ||
| OTHER LONG-TERM DEBT | 84 | 97 | ||
| NONCURRENT OPERATING LEASE LIABILITY | 23,890 | 22,450 | ||
| ACCRUED ASBESTOS LIABILITIES | 54,630 | 55,226 | ||
| OTHER LIABILITIES | 27,514 | 25,929 | ||
| TOTAL LIABILITIES | 419,542 | 406,304 | ||
| TOTAL STOCKHOLDERS' EQUITY | 556,940 | 550,236 | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 976,482 | $ | 956,540 |
STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows
| (In thousands) | ||||||
|---|---|---|---|---|---|---|
| THREE MONTHS ENDED<br><br> <br>MARCH 31, | ||||||
| 2021 | 2020 | |||||
| (Unaudited) | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| NET EARNINGS | $ | 21,000 | $ | 8,627 | ||
| ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH | ||||||
| USED IN OPERATING ACTIVITIES: | ||||||
| DEPRECIATION AND AMORTIZATION | 6,514 | 6,539 | ||||
| OTHER | 4,475 | 6,034 | ||||
| CHANGE IN ASSETS AND LIABILITIES: | ||||||
| ACCOUNTS RECEIVABLE | 23,533 | (28,114 | ) | |||
| INVENTORY | (46,255 | ) | (5,339 | ) | ||
| ACCOUNTS PAYABLE | 8,419 | (11,883 | ) | |||
| PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3,753 | 1,303 | ||||
| SUNDRY PAYABLES AND ACCRUED EXPENSES | (29,549 | ) | (7,251 | ) | ||
| OTHER | (3,288 | ) | (2,705 | ) | ||
| NET CASH USED IN OPERATING ACTIVITIES | (11,398 | ) | (32,789 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES | (2,081 | ) | - | |||
| CAPITAL EXPENDITURES | (4,966 | ) | (4,422 | ) | ||
| OTHER INVESTING ACTIVITIES | 2 | 6 | ||||
| NET CASH USED IN INVESTING ACTIVITIES | (7,045 | ) | (4,416 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| NET CHANGE IN DEBT | 32,408 | 53,068 | ||||
| PURCHASE OF TREASURY STOCK | (11,096 | ) | (8,726 | ) | ||
| DIVIDENDS PAID | (5,588 | ) | (5,615 | ) | ||
| OTHER FINANCING ACTIVITIES | 373 | 1,248 | ||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 16,097 | 39,975 | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | (42 | ) | 126 | |||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2,388 | ) | 2,896 | |||
| CASH AND CASH EQUIVALENTS at beginning of period | 19,488 | 10,372 | ||||
| CASH AND CASH EQUIVALENTS at end of period | $ | 17,100 | $ | 13,268 |