Standard Motor Products, Inc. Announces Third Quarter 2022 Results and Quarterly Dividend

NEW YORK, Oct. 28, 2022 /PRNewswire/ — Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three and nine months ended September 30, 2022.

Net sales for the third quarter of 2022 were $381.4 million, compared to consolidated net sales of $370.3 million during the comparable quarter in 2021. Earnings from continuing operations for the third quarter of 2022 were $23.1 million or $1.06 per diluted share, compared to $29.2 million or $1.29 per diluted share in the third quarter of 2021. 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 2022 were $22.9 million or $1.05 per diluted share, compared to $29.7 million or $1.32 per diluted share in the third quarter of 2021.

Consolidated net sales for the nine months ended September 30, 2022, were $1.06 billion, compared to consolidated net sales of $988.9 million during the comparable period in 2021.  Earnings from continuing operations for the nine months ended September 30, 2022, were $64.5 million or $2.91 per diluted share, compared to $79.3 million or $3.50 per diluted share in the comparable period of 2021.  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, 2022 and 2021 were $64.3 million or $2.90 per diluted share and $80.4 million or $3.54 per diluted share, respectively.

Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “Overall, we are pleased with our sales results which continue to reflect the steady demand for our products as seen in our 3% sales increase over last year, with gains in both segments.” 

Engine Management sales increased approximately 2% in the quarter despite tough comparisons. Excluding the Wire and Cable business, which is in secular ongoing decline, our Engine Management sales were ahead approximately 3%, in line with our long-term projections of low single digit growth. Engine Management experienced consistently higher customer POS levels throughout the quarter against record levels from 2021.   

Temperature Control benefited from a strong summer season with extreme temperatures across many regions even against record heat and the difficult comparison in 2021.  Sales grew 3.3% in the quarter vs. last year, and up nearly 11% year-to-date due to a combination of favorable weather, successful pricing initiatives and overall strength in customer demand. 

We were also pleased with the performance of our specialized non-aftermarket business, which focuses on custom-engineered products for niche end markets such as medium and heavy-duty vehicles, construction and agricultural equipment, power sports, and others. Our business strategy remains on track with a sales run rate of over $300 million.  Cross-selling opportunities continue to surface and customers are beginning to look beyond their current product categories and inquiring as to other potential solutions and capabilities we can provide. 

In October, we acquired Kade Trading GmbH, a supplier of temperature control products across Europe. While small at $6 million in annual sales, it provides synergies to our other recent acquisitions, and provides SMP with an entry point into the European market for our temperature control products with a strong focus on the continuing electrification of thermal systems. 

Consolidated operating profit was 8.8% and was helped by the strength of the Temperature Control segment.  However, operating profit was below last year’s record levels as ongoing inflationary pressures and rising interest rates continue to create a headwind. We will be implementing additional price increases and continue to seek out cost savings opportunities to offset these higher expenses. 

Our outlook for the full year has incorporated inflationary pressures and interest rate increases as noted above, and remains unchanged from our prior quarter.  We expect our full year gross margin to be approximately 27% and expect our operating profit to be in the range of 7-8% of net sales. 

Finally, we are pleased to announce that our Board of Directors has approved payment of a quarterly dividend of 27 cents per share on the common stock outstanding, which will be paid on December 1, 2022 to stockholders of record on November 15, 2022.  

In closing, Mr. Sills commented, “The past three years have presented some unprecedented challenges to our industry and the marketplace in general. While there remain many unknowns related to inflation, interest rates and the increasing risk of potential recession, we are confident in our ability to navigate these challenges. We appreciate and thank all our employees for their hard work and support during this difficult period.”   

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, October 28th, 2022.  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 Q3’22 Earnings Call Earnings Webcast link.  Investors may also listen to the call by dialing 800-791-4813 (domestic) or 785-424-1102 (international).  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 800-839-9562 (domestic) or 402-220-6090 (international). The participant passcode is 34579.

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,





2022



2021




2022



2021





(Unaudited)




(Unaudited)



NET SALES


$       381,373



$       370,310




$    1,063,616



$       988,939


















COST OF SALES


274,589



265,105




770,641



700,678


















GROSS PROFIT


106,784



105,205




292,975



288,261


















SELLING, GENERAL & ADMINISTRATIVE EXPENSES


73,199



66,509




204,551



183,316



RESTRUCTURING AND INTEGRATION EXPENSES




166




44



166



OTHER INCOME, NET


30



8




43



8


















OPERATING INCOME 


33,615



38,538




88,423



104,787


















OTHER NON-OPERATING INCOME, NET


1,513



780




4,889



2,247


















INTEREST EXPENSE


3,656



652




6,282



1,356


















EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


31,472



38,666




87,030



105,678


















PROVISION FOR INCOME TAXES


8,280



9,481




22,407



26,315


















EARNINGS FROM CONTINUING OPERATIONS


23,192



29,185




64,623



79,363


















LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(14,294)



(5,122)




(17,076)



(7,139)


















NET EARNINGS


8,898



24,063




47,547



72,224


















NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST


52



13




129



32


















NET EARNINGS ATTRIBUTABLE TO SMP (a)


$           8,846



$         24,050




$         47,418



$         72,192

































NET EARNINGS ATTRIBUTABLE TO SMP 















EARNINGS FROM CONTINUING OPERATIONS


$         23,140



$         29,172




$         64,494



$         79,331



LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES


(14,294)



(5,122)




(17,076)



(7,139)



TOTAL


$           8,846



$         24,050




$         47,418



$         72,192

































NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP















   BASIC EARNINGS FROM CONTINUING OPERATIONS


$            1.08



$            1.32




$            2.97



$            3.57



   DISCONTINUED OPERATION


(0.67)



(0.23)




(0.79)



(0.32)



   NET EARNINGS PER COMMON SHARE – BASIC


$            0.41



$            1.09




$            2.18



$            3.25

































   DILUTED EARNINGS  FROM CONTINUING OPERATIONS


$            1.06



$            1.29




$            2.91



$            3.50



   DISCONTINUED OPERATION


(0.66)



(0.22)




(0.77)



(0.32)



   NET EARNINGS  PER COMMON SHARE – DILUTED


$            0.40



$            1.07




$            2.14



$            3.18

































WEIGHTED AVERAGE NUMBER OF COMMON SHARES


21,427,393



22,090,195




21,719,281



22,201,398



WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES


21,847,602



22,543,781




22,153,348



22,678,114


















   (a) “SMP” refers to Standard Motor Products, Inc. and subsidiaries.















STANDARD MOTOR PRODUCTS, INC.

Segment Revenues and Operating Profit















(In thousands)






























THREE MONTHS ENDED



NINE MONTHS ENDED





SEPTEMBER 30, 



SEPTEMBER 30, 





2022



2021



2022



2021





(unaudited)



(unaudited)



Revenues














Ignition, Emission Control, Fuel & Safety














   Related System Products


$      215,021



$      208,443



$      618,198



$      574,595



Wire and Cable


36,720



38,708



114,673



117,790



        Engine Management


251,741



247,151



732,871



692,385

















Compressors


78,211



75,080



193,551



178,031



Other Climate Control Parts


44,780



43,995



125,193



109,988



        Temperature Control


122,991



119,075



318,744



288,019

















All Other


6,641



4,084



12,001



8,535



        Revenues


$      381,373



$      370,310



$    1,063,616



$      988,939

















Gross Margin














Engine Management


$        66,026

26.2 %


$        66,907

27.1 %


$      193,855

26.5 %


$      199,509

28.8 %


Temperature Control


35,415

28.8 %


33,815

28.4 %


85,965

27.0 %


78,468

27.2 %


All Other


5,343



4,676



13,155



10,562



        Gross Margin


$      106,784

28.0 %


$      105,398

28.5 %


$      292,975

27.5 %


$      288,539

29.2 %


One-Time Acquisition Costs


0.0 %


(193)

-0.1 %


0.0 %


(278)

0.0 %


        Gross Margin


$      106,784

28.0 %


$      105,205

28.4 %


$      292,975

27.5 %


$      288,261

29.1 %
















Selling, General & Administrative














Engine Management


$        42,763

17.0 %


$        38,702

15.7 %


$      122,745

16.7 %


$      109,721

15.8 %


Temperature Control


21,163

17.2 %


17,120

14.4 %


54,230

17.0 %


44,952

15.6 %


All Other


9,273



10,029



27,576



27,315



        Selling, General & Administrative


$        73,199

19.2 %


$        65,851

17.8 %


$      204,551

19.2 %


$      181,988

18.4 %


One-Time Acquisition Costs


0.0 %


658

0.2 %


0.0 %


1,328

0.1 %


        Selling, General & Administrative


$        73,199

19.2 %


$        66,509

18.0 %


$      204,551

19.2 %


$      183,316

18.5 %






























Operating Income














Engine Management


$        23,263

9.2 %


$        28,205

11.4 %


$        71,110

9.7 %


$        89,788

13.0 %


Temperature Control


14,252

11.6 %


16,695

14.0 %


31,735

10.0 %


33,516

11.6 %


All Other


(3,930)



(5,353)



(14,421)



(16,753)



        Subtotal


$        33,585

8.8 %


$        39,547

10.7 %


$        88,424

8.3 %


$      106,551

10.8 %


One-Time Acquisition Costs


0.0 %


(851)

-0.2 %


0.0 %


(1,606)

-0.2 %


Restructuring & Integration


0.0 %


(166)

0.0 %


(44)

0.0 %


(166)

0.0 %


Other Income, Net


30

0.0 %


8

0.0 %


43

0.0 %


8

0.0 %


        Operating Income


$        33,615

8.8 %


$        38,538

10.4 %


$        88,423

8.3 %


$      104,787

10.6 %


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,









2022


2021


2022


2021









(Unaudited)


(Unaudited)







EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP






























GAAP EARNINGS FROM CONTINUING OPERATIONS


$          23,140


$          29,172


$          64,494


$          79,331






















RESTRUCTURING AND INTEGRATION EXPENSES



166


44


166







ONE-TIME ACQUISITION COSTS



851



1,606







CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD


(249)


(259)


(249)


(259)







INCOME TAX EFFECT RELATED TO RECONCILING ITEMS



(265)


(11)


(461)







NON-GAAP EARNINGS FROM CONTINUING OPERATIONS


$          22,891


$          29,665


$          64,278


$          80,383





































DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP






























GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$              1.06


$              1.29


$              2.91


$              3.50






















RESTRUCTURING AND INTEGRATION EXPENSES



0.01









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)






















NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS


$              1.05


$              1.32


$              2.90


$              3.54





































OPERATING INCOME






























GAAP OPERATING INCOME


$          33,615


$          38,538


$          88,423


$         104,787






















RESTRUCTURING AND INTEGRATION EXPENSES



166


44


166







ONE-TIME ACQUISITION COSTS



851



1,606







OTHER (INCOME) EXPENSE, NET


(30)


(8)


(43)


(8)


LAST TWELVE MONTHS ENDED


YEAR ENDED











SEPTEMBER 30,


DECEMBER 31,

NON-GAAP OPERATING INCOME


$          33,585


$          39,547


$          88,424


$         106,551


2022


2021


2021











(Unaudited)



EBITDA WITHOUT SPECIAL ITEMS






























GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES


$          31,472


$          38,666


$          87,030


$         105,678


$         111,817


$         136,264


$         130,465
















DEPRECIATION AND AMORTIZATION


7,002


7,060


20,895


20,160


27,978


27,170


27,243

INTEREST EXPENSE


3,656


652


6,282


1,356


6,954


1,577


2,028

     EBITDA


42,130


46,378


114,207


127,194


146,749


165,011


159,736
















RESTRUCTURING AND INTEGRATION EXPENSES



166


44


166


270


166


392

ONE-TIME ACQUISITION COSTS



851



1,606


105


1,606


1,711

INTANGIBLE ASSET IMPAIRMENT







2,600


    SPECIAL ITEMS



1,017


44


1,772


375


4,372


2,103
















EBITDA WITHOUT SPECIAL ITEMS


$          42,130


$          47,395


$         114,251


$         128,966


$         147,124


$         169,383


$         161,839































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.

Condensed Consolidated Balance Sheets







(In thousands)














September 30,



December  31,



2022



2021



(Unaudited)










ASSETS







CASH


$         17,525



$         21,755







ACCOUNTS RECEIVABLE, GROSS


236,342



186,774

ALLOWANCE FOR EXPECTED CREDIT LOSSES


5,900



6,170

ACCOUNTS RECEIVABLE, NET


230,442



180,604







INVENTORIES


534,310



468,755

UNRETURNED CUSTOMER INVENTORY


21,485



22,268

OTHER CURRENT ASSETS


25,911



17,823







TOTAL CURRENT ASSETS


829,673



711,205







PROPERTY, PLANT AND EQUIPMENT, NET


104,199



102,786

OPERATING LEASE RIGHT-OF-USE ASSETS


47,168



40,469

GOODWILL


130,727



131,652

OTHER INTANGIBLES, NET


99,756



106,234

DEFERRED INCOME TAXES


34,484



36,126

INVESTMENT IN UNCONSOLIDATED AFFILIATES


42,648



44,087

OTHER ASSETS


30,071



25,402







TOTAL ASSETS


$     1,318,726



$     1,197,961













LIABILITIES AND STOCKHOLDERS’ EQUITY













CURRENT PORTION OF REVOLVING CREDIT FACILITY


$         52,100



$       125,298

CURRENT PORTION OF TERM LOAN AND OTHER DEBT


6,036



3,117

ACCOUNTS PAYABLE


103,894



137,167

ACCRUED CUSTOMER RETURNS


53,857



42,412

ACCRUED CORE LIABILITY


23,845



23,663

ACCRUED REBATES


42,378



42,472

PAYROLL AND COMMISSIONS


37,539



45,058

SUNDRY PAYABLES AND ACCRUED EXPENSES


54,215



57,182







TOTAL CURRENT LIABILITIES


373,864



476,369







OTHER LONG-TERM DEBT


211,400



21

NONCURRENT OPERATING LEASE LIABILITY


38,618



31,206

ACCRUED ASBESTOS LIABILITIES


63,820



52,698

OTHER LIABILITIES


20,637



25,040







 TOTAL LIABILITIES 


708,339



585,334







TOTAL SMP STOCKHOLDERS’ EQUITY


599,387



601,580

NONCONTROLLING INTEREST


11,000



11,047

 TOTAL STOCKHOLDERS’ EQUITY 


610,387



612,627







 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 


$     1,318,726



$     1,197,961

STANDARD MOTOR PRODUCTS, INC.

Condensed Consolidated Statements of Cash Flows






(In thousands)











NINE MONTHS ENDED


SEPTEMBER 30,


2022



2021


(Unaudited)






CASH FLOWS FROM OPERATING ACTIVITIES





NET EARNINGS 

$        47,547



$        72,224

ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH





PROVIDED BY (USED IN) OPERATING ACTIVITIES:





DEPRECIATION AND AMORTIZATION

20,895



20,160

OTHER

25,904



13,904

CHANGE IN ASSETS AND LIABILITIES:





ACCOUNTS RECEIVABLE

(51,887)



(15,343)

INVENTORY 

(75,300)



(52,742)

ACCOUNTS PAYABLE

(31,844)



24,228

PREPAID EXPENSES AND OTHER CURRENT ASSETS

(6,270)



2,324

SUNDRY PAYABLES AND ACCRUED EXPENSES 

3,807



18,905

OTHER

(8,327)



(4,522)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

(75,475)



79,138











CASH FLOWS FROM INVESTING ACTIVITIES










ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES



(124,663)

CAPITAL EXPENDITURES

(19,499)



(19,406)

OTHER INVESTING ACTIVITIES

12



29

NET CASH USED IN INVESTING ACTIVITIES 

(19,487)



(144,040)











CASH FLOWS FROM FINANCING ACTIVITIES










NET CHANGE IN DEBT

141,457



121,854

PURCHASE OF TREASURY STOCK

(29,656)



(26,518)

DIVIDENDS PAID

(17,602)



(16,678)

PAYMENTS OF DEBT ISSUANCE COSTS

(2,128)



OTHER FINANCING ACTIVITIES

(54)



455

NET CASH PROVIDED BY FINANCING ACTIVITIES

92,017



79,113











EFFECT OF EXCHANGE RATE CHANGES ON CASH

(1,285)



(555)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(4,230)



13,656

CASH AND CASH EQUIVALENTS at beginning of period

21,755



19,488

CASH AND CASH EQUIVALENTS at end of period

$        17,525



$        33,144

SOURCE Standard Motor Products, Inc.


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