Standard Motor Products : 2019 Q2 Earnings Release

For Immediate Release

For more information, contact: James J. Burke Standard Motor Products, Inc. [phone]

Standard Motor Products, Inc. Announces

Second Quarter 2019 Results and a Quarterly Dividend

New York, NY, July 25, 2019......Standard Motor Products, Inc. (NYSE: SMP), an automotive

replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and six months ending June 30, 2019.

Consolidated net sales for the second quarter of 2019 were $305.2 million, compared to consolidated net sales of $286.6 million during the comparable quarter in 2018. Earnings from continuing operations for the second quarter of 2019 were $20.6 million or 90 cents per diluted share, compared to $16.8 million or 73 cents per diluted share in the second quarter of 2018. 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 2019 were $21 million or 92 cents per diluted share, compared to $17 million or 74 cents per diluted share in the second quarter of 2018.

37-18 Northern Blvd., Long Island City, NY 11101

1. 392-0200
   www.smpcorp.com

Consolidated net sales for the six month period ended June 30, 2019, were $588.9 million, compared to consolidated net sales of $548.5 million during the comparable period in 2018. Earnings from continuing operations for the six month period ended June 30, 2019, were $33.7 million or $1.47 per diluted share, compared to $25.4 million or $1.11 per diluted share in the comparable period of 2018. 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, 2019, and 2018 were $34.1 million or $1.49 per diluted share and $27.5 million or $1.20 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are quite pleased with our second quarter, posting solid gains in sales, margins and earnings, with strong performance in both of our operating divisions.

"Engine Management sales were up approximately 7% for both the quarter and year to date. Excluding the wire and cable segment, Engine Management sales in the quarter increased almost 12%, or almost $20 million. The increase included three months of revenue from the Pollak acquisition, accounting for nearly $11 million. Excluding Pollak, our Engine Management business increased 5.3% for the quarter. The increase was attributable to a combination of strong demand in our OE business, which tends to be somewhat volatile, a benefit from pricing actions and tariffs, and low single digit organic growth.

"Engine Management gross margin was up 0.9 points from last year, and 1.3 points from the first quarter, reflecting our return to historic productivity in our Reynosa wire plant after the lengthy integration of the General Cable wire business. This margin improvement also includes certain

pricing actions offset by the adverse impact of tariffs being passed through to customers at our cost.

"Our Temperature Control sales were up 5% for the quarter and 9% year-to-date. April and May tend to reflect pre-season stocking activities, while June is the start of the summer selling season. Although we are pleased with the quarter's results, it was a slow start to summer heat nationwide. The third quarter will be critical to full-year performance, as 2018 was a very hot summer and a challenging comparison.

"Temperature Control gross margin improved 0.8 points in the quarter and, as with Engine Management, was dampened by tariffs being passed through to customers at our cost. As previously discussed, within SG&A, we experienced improvements in our distribution expense as our new warehouse automation in Lewisville is now fully implemented.

"Finally, on April 1st, we completed the acquisition of the Pollak business of Stoneridge, Inc., and it has contributed quite nicely to our performance. We will be relocating the acquired production lines to existing facilities over the course of the balance of the year, and expect significant savings once fully integrated and performing at full productivity some time in 2020. So far we are pleased with what we have seen, and believe it will be an excellent fit for SMP. We acquired a profitable and stable business with an excellent customer base, and we believe that with our combined skills, we will be able to advance our goal of increasing our presence in the heavy duty and commercial vehicle markets."

The Board of Directors has approved payment of a quarterly dividend of 23 cents per share on the common stock outstanding. The dividend will be paid on September 3, 2019 to stockholders of record on August 15, 2019.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, July 25, 2019. The dial-in number is 866-831-8713 (domestic) or 203-518-9822 (international). The playback number is 800-839-9562 (domestic) or 402-220-6090

(international). The conference ID is STANDARD.

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,
		2019			2018			2019			2018
		(Unaudited)				(Unaudited)
NET SALES	$	305,172	$	286,636	$	588,938	$	548,462
COST OF SALES		216,267			205,347			422,070			394,584
GROSS PROFIT		88,905			81,289			166,868			153,878
SELLING, GENERAL & ADMINISTRATIVE EXPENSES		60,536			57,750			120,536			115,467
RESTRUCTURING AND INTEGRATION EXPENSES		644			231			644			3,067
OTHER INCOME (EXPENSE), NET		3			42			(3)			313
OPERATING INCOME		27,728			23,350			45,685			35,657
OTHER NON-OPERATING INCOME, NET		1,411			480			2,057			449
INTEREST EXPENSE		1,722			1,251			2,811			1,883
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES		27,417			22,579			44,931			34,223
PROVISION FOR INCOME TAXES		6,862			5,752			11,272			8,799
EARNINGS FROM CONTINUING OPERATIONS		20,555			16,827			33,659			25,424
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES		(1,123)			(882)			(2,011)			(1,490)
NET EARNINGS	$	19,432	$	15,945	$	31,648	$	23,934

NET EARNINGS PER COMMON SHARE:
BASIC EARNINGS FROM CONTINUING OPERATIONS	$	0.92	$	0.75	$	1.50	$	1.13
DISCONTINUED OPERATION		(0.05)			(0.04)			(0.09)			(0.07)
NET EARNINGS PER COMMON SHARE - BASIC	$	0.87		$	0.71		$	1.41		$	1.06
DILUTED EARNINGS FROM CONTINUING OPERATIONS	$	0.90	$	0.73	$	1.47	$	1.11
DISCONTINUED OPERATION		(0.05)			(0.04)			(0.09)			(0.07)
NET EARNINGS PER COMMON SHARE - DILUTED	$	0.85		$	0.69		$	1.38		$	1.04
WEIGHTED AVERAGE NUMBER OF COMMON SHARES		22,328,292			22,471,428			22,374,785			22,484,894
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES		22,795,677			22,958,469			22,857,435			22,962,049