Standard Motor Products, Inc. Announces
Third Quarter 2021 Results, New Stock Repurchase Program and a Quarterly Dividend

New York, NY, October 28, 2021......Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months and nine months ended September 30, 2021.

Consolidated net sales for the third quarter of 2021 were $370.3 million, compared to consolidated net sales of $343.6 million during the comparable quarter in 2020. Earnings from continuing operations for the third quarter of 2021 were $29.2 million or $1.29 per diluted share, compared to $36.2 million or $1.59 per diluted share in the third 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 third quarter of 2021 were $29.7 million or $1.32 per diluted share, compared to $36.2 million or $1.59 per diluted share in the third quarter of 2020.

Consolidated net sales for the nine months ended September 30, 2021, were $988.9 million, compared to consolidated net sales of $845.9 million during the comparable period in 2020. Earnings from continuing operations for the nine months ended September 30, 2021, were $79.3 million or $3.50 per diluted share, compared to $57.7 million or $2.53 per diluted share in the comparable period 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 nine months ended September 30, 2021 and 2020 were $80.4 million or $3.54 per diluted share and $57.8 million or $2.53 per diluted share, respectively.

Mr. Eric Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are extremely pleased with our third quarter results. We once again posted record sales, generating an increase of nearly 8% over a very strong third quarter of 2020 when business was surging as we emerged from pandemic-related lockdowns. Impressively, this quarter's sales were up 20% from 2019.

"Year-to-date, our sales are up 17% over 2020, though the first half of last year was adversely impacted by the pandemic. However, the first nine months of 2021 are up 10.3% over 2019.

"By division, Engine Management sales were up 7.7% as compared to 2020, and up nearly 15% vs. 2019, with several contributing factors. We experienced a combination of strong demand, continued success from customer initiatives, new business wins, and the impact of recent acquisitions.

"Our Temperature Control sales were up 7.9% as compared to 2020, and up nearly 35% over 2019. This was one of the longest and hottest summers on record, and our business remained robust throughout the quarter.

"Third quarter earnings are down from the third quarter of 2020, but the 2020 results included many unique non-recurring benefits, related to the Covid-19 pandemic. However, third quarter 2021 earnings did compare favorably on a two-year stack, up almost 30% from a more normalized 2019. Most importantly, year-to-date earnings are at record levels, exceeding both 2020 and 2019 by 40%."

"As anticipated and stated in our second quarter earnings announcement, we experienced some compression in our gross margin percentage in the third quarter, primarily in the Engine Management division. This was the result of two main factors. First, like many companies, we experienced a surge in various costs, including raw materials, labor and transportation. We will begin passing these costs on in the fourth quarter.

"The second component of our reduced gross margin percentage is related to our growth in non-aftermarket, specialized original equipment business, which we will discuss below. This business, which we believe has great potential for us, has a different margin profile than our aftermarket business - it has lower gross margins, but also lower SG&A expense, and thus generates comparable operating margins.

"Turning to acquisitions, on September 1st we announced that we had acquired Stabil Operative Group GmbH ("Stabil"), a European manufacturer of original equipment sensors, electronics, and clamping devices for passenger car and commercial vehicle applications. This marked our third acquisition this year, all geared towards expansion into specialized OE channels, including medium and heavy duty vehicles, construction and agricultural equipment, power sports, and other sub-segments. When combined with our legacy business in this arena, our non-aftermarket sales are approaching a run rate of $300 million annually. In addition to expanding beyond our core aftermarket business, it is also providing geographic expansion as we now have meaningful footprints to grow sales in Europe and Asia.

"We are extremely pleased with our efforts in growing our business in this channel. As we combine these different entities, we are able to take advantage of shared customer lists, product portfolios, manufacturing and engineering capabilities, and geographic reach. It is also important to note that much of this business is not beholden to internal combustion engines. Many of the products are either powertrain-neutral, or are geared toward electric and alternative energy vehicles. While we are still in the early days of integrating these businesses, the potential synergies and sales growth opportunities are very exciting.

"As we have continued to grow our business and post record results, we have also looked to return value to our shareholders. To this end, we repurchased shares of our common stock in the amount of $15.4 million during the quarter, bringing total repurchases to $26.5 million for the year so far. Further, our Board of Directors recently authorized an additional $30 million common stock repurchase plan. Finally, our Board also approved payment of a quarterly dividend of 25 cents per share on the common stock outstanding. The dividend will be paid on December 1, 2021 to stockholders of record on November 15, 2021.

"In closing, we are very pleased with our year thus far. We have posted record sales and earnings, have consummated three complementary acquisitions, and have garnered substantial new business wins with existing accounts. Our core market is doing very well and our relationships with our customers are strong. We have made major strides in expanding into new complementary markets with significant upside potential. As such, we are very excited about the future."

Conference Call

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, October 28, 2021. The dial-in number is 888-632-3389 (domestic) or 785-424-1674 (international). The playback number is 800-934-8524 (domestic) or 402-220-6999 (international). The participant passcode is 30385.

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,
2021
2020
2021
2020
(Unaudited)
(Unaudited)
NET SALES
$
370,310
$
343,609
$
988,939
$
845,850
COST OF SALES
265,105
235,861
700,678
603,349
GROSS PROFIT
105,205
107,748
288,261
242,501
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
66,509
59,497
183,316
163,698
RESTRUCTURING AND INTEGRATION EXPENSES
166
250
166
464
OTHER INCOME (EXPENSE), NET
8
(37
)
8
(31
)
OPERATING INCOME
38,538
47,964
104,787
78,308
OTHER NON-OPERATING INCOME, NET
780
514
2,247
592
INTEREST EXPENSE
652
462
1,356
2,107
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES
38,666
48,016
105,678
76,793
PROVISION FOR INCOME TAXES
9,481
11,804
26,315
19,118
EARNINGS FROM CONTINUING OPERATIONS
29,185
36,212
79,363
57,675
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
(5,122
)
(7,587
)
(7,139
)
(9,456
)
NET EARNINGS
24,063
28,625
72,224
48,219
NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST
13
-
32
-
NET EARNINGS ATTRIBUTABLE TO SMP (a)
$
24,050
$
28,625
$
72,192
$
48,219
NET EARNINGS ATTRIBUTABLE TO SMP
EARNINGS FROM CONTINUING OPERATIONS
$
29,172
$
36,212
$
79,331
$
57,675
LOSS FROM DISCONTINUED OPERATION, NET OF INCOME TAXES
(5,122
)
(7,587
)
(7,139
)
(9,456
)
TOTAL
$
24,050
$
28,625
$
72,192
$
48,219
NET EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SMP
BASIC EARNINGS FROM CONTINUING OPERATIONS
$
1.32
$
1.62
$
3.57
$
2.58
DISCONTINUED OPERATION
(0.23
)
(0.34
)
(0.32
)
(0.42
)
NET EARNINGS PER COMMON SHARE - BASIC
$
1.09
$
1.28
$
3.25
$
2.16
DILUTED EARNINGS FROM CONTINUING OPERATIONS
$
1.29
$
1.59
$
3.50
$
2.53
DISCONTINUED OPERATION
(0.22
)
(0.33
)
(0.32
)
(0.41
)
NET EARNINGS PER COMMON SHARE - DILUTED
$
1.07
$
1.26
$
3.18
$
2.12
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
22,090,195
22,349,093
22,201,398
22,372,466
WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
22,543,781
22,758,458
22,678,114
22,795,426

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

STANDARD MOTOR PRODUCTS, INC.
Segment Revenues and Operating Income

(In thousands)

THREE MONTHS ENDED
NINE MONTHS ENDED
SEPTEMBER 30,
SEPTEMBER 30,
2021
2020
2021
2020
(Unaudited)
(Unaudited)
Revenues
Ignition, Emission Control, Fuel & Safety Related System Products
$
208,443
$
190,891
$
574,595
$
498,204
Wire and Cable
38,708
38,663
117,790
105,621
Engine Management
247,151
229,554
692,385
603,825
Compressors
$
75,080
$
70,785
$
178,031
$
141,011
Other Climate Control Parts
43,995
39,608
109,988
93,216
Temperature Control
119,075
110,393
288,019
234,227
All Other
4,084
3,662
8,535
7,798
Revenues
$
370,310
$
343,609
$
988,939
$
845,850
Gross Margin
Engine Management
$
66,907
27.1
%
$
72,361
31.5
%
$
199,509
28.8
%
$
175,296
29.0
%
Temperature Control
33,815
28.4
%
32,212
29.2
%
78,468
27.2
%
60,828
26.0
%
All Other
4,676

3,175

10,562

6,377

Subtotal
$
105,398
28.5
%
$
107,748
31.4
%
$
288,539
29.2
%
$
242,501
28.7
%
One-Time Acquisition Costs
(193
)
-0.1
%
-
0.0
%
(278
)
0.0
%
-
0.0
%
Gross Margin
$
105,205
28.4
%
$
107,748
31.4
%
$
288,261
29.1
%
$
242,501
28.7
%








Selling, General & Administrative




Engine Management
$
38,702
15.7
%
$
35,665
15.5
%
$
109,721
15.8
%
$
100,237
16.6
%
Temperature Control
17,120
14.4
%
15,571
14.1
%
44,952
15.6
%
40,568
17.3
%
All Other
10,029

8,261

27,315

22,893

Subtotal
$
65,851
17.8
%
$
59,497
17.3
%
$
181,988
18.4
%
$
163,698
19.4
%
One-Time Acquisition Costs
658
0.2
%
-
0.0
%
1,328
0.1
%
-
0.0
%
Selling, General & Administrative
$
66,509
18.0
%
$
59,497
17.3
%
$
183,316
18.5
%
$
163,698
19.4
%








Operating Income




Engine Management
$
28,012
11.3
%
$
36,696
16.0
%
$
89,510
12.9
%
$
75,059
12.4
%
Temperature Control
16,695
14.0
%
16,641
15.1
%
33,516
11.6
%
20,260
8.6
%
All Other
(5,160
)

(5,086
)

(16,475
)

(16,516
)

Subtotal
$
39,547
10.7
% $
48,251
14.0
% $
106,551
10.8
% $
78,803
9.3
%
One-time Acquisition Costs
(851
)
-0.2
%
-
0.0
%
(1,606
)
-0.2
%
-
0.0
%
Restructuring & Integration
(166
)
0.0
%
(250
)
-0.1
%
(166
)
0.0
%
(464
)
-0.1
%
Other Income (Expense), Net
8
0.0
%
(37
)
0.0
%
8
0.0
%
(31
)
0.0
%
Operating Income
$
38,538
10.4
%
$
47,964
14.0
%
$
104,787
10.6
%
$
78,308
9.3
%

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,
2021
2020
2021
2020
(Unaudited)
(Unaudited)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
GAAP EARNINGS FROM CONTINUING OPERATIONS
$
29,172
$
36,212
$
79,331
$
57,675
RESTRUCTURING AND INTEGRATION EXPENSES
166
250
166
464
ONE-TIME ACQUISITION COSTS
851
-
1,606
-
CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS FINALIZED IN PERIOD
(259 )
(235
)
(259
)
(235
)
INCOME TAX EFFECT RELATED TO RECONCILING ITEMS
(265
)
(65
)
(461
)
(121
)
NON-GAAP EARNINGS FROM CONTINUING OPERATIONS
$
29,665
$
36,162
$
80,383
$
57,783
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP
GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
$
 1.29
$
1.59
$
3.50
$
2.53
RESTRUCTURING AND INTEGRATION EXPENSES
0.01
0.01
-
0.02
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
)
(0.01
)
NON-GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
$
 1.32
$
1.59
$
3.54
$
2.53
OPERATING INCOME
GAAP OPERATING INCOME
$
38,538
$
47,964
$
104,787
$
78,308
ONE-TIME ACQUISITION COSTS
851
-
1,606
-
RESTRUCTURING AND INTEGRATION EXPENSES
166
250
166
464
OTHER (INCOME) EXPENSE, NET
(8
)
37
(8
)
31
NON-GAAP OPERATING INCOME
$
39,547
$
48,251
$
106,551
$
78,803

MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS WHICH ARE ATTRIBUTABLE TO SMP, AND OPERATING INCOME, AS ADJUSTED FOR SPECIAL ITEMS, ARE NON-GAAP MEASUREMENTS AND 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,
2021
DECEMBER 31,
2020
(Unaudited)
ASSETS
CASH
$
33,144
$
19,488
ACCOUNTS RECEIVABLE, GROSS
231,066
203,861
ALLOWANCE FOR DOUBTFUL ACCOUNTS
6,645
5,822
ACCOUNTS RECEIVABLE, NET
224,421
198,039
INVENTORIES
414,657
345,502
UNRETURNED CUSTOMER INVENTORY
23,367
19,632
OTHER CURRENT ASSETS
15,268
15,875
TOTAL CURRENT ASSETS
710,857
598,536
PROPERTY, PLANT AND EQUIPMENT, NET
100,787
89,105
OPERATING LEASE RIGHT-OF-USE ASSETS
42,458
29,958
GOODWILL
131,549
77,837
OTHER INTANGIBLES, NET
108,312
54,004
DEFERRED INCOME TAXES
34,790
44,770
INVESTMENT IN UNCONSOLIDATED AFFILIATES
42,123
40,507
OTHER ASSETS
24,857
21,823
TOTAL ASSETS
$
1,195,733
$
956,540
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE
$
128,938
$
10,000
CURRENT PORTION OF OTHER DEBT
2,941
135
ACCOUNTS PAYABLE
128,808
100,018
ACCRUED CUSTOMER RETURNS
59,972
40,982
ACCRUED CORE LIABILITY
23,650
22,014
ACCRUED REBATES
43,110
46,437
PAYROLL AND COMMISSIONS
40,725
35,938
SUNDRY PAYABLES AND ACCRUED EXPENSES
50,227
47,078
TOTAL CURRENT LIABILITIES
478,371
302,602
OTHER LONG-TERM DEBT
68
97
NONCURRENT OPERATING LEASE LIABILITIES
33,246
22,450
ACCRUED ASBESTOS LIABILITIES
57,532
55,226
OTHER LIABILITIES
27,964
25,929
TOTAL LIABILITIES
597,181
406,304
TOTAL SMP STOCKHOLDERS' EQUITY
587,018
550,236
NONCONTROLLING INTEREST
11,534
-
TOTAL STOCKHOLDERS' EQUITY
598,552
550,236
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,195,733
$
956,540

STANDARD MOTOR PRODUCTS, INC.
Condensed Consolidated Statements of Cash Flows

(In thousands)

NINE MONTHS ENDED
SEPTEMBER 30,
2021
2020
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS
$
72,224
$
48,219
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION
20,160
19,313
OTHER
13,904
19,098
CHANGE IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE
(15,343
)
(83,878
)
INVENTORIES
(52,742
)
53,330
ACCOUNTS PAYABLE
24,228
(13,117
)
PREPAID EXPENSES AND OTHER CURRENT ASSETS
2,324
5,634
SUNDRY PAYABLES AND ACCRUED EXPENSES
18,905
31,725
OTHER
(4,522
)
(1,719
)
NET CASH PROVIDED BY OPERATING ACTIVITIES
79,138
78,605
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES
(124,663
)
-
CAPITAL EXPENDITURES
(19,406
)
(13,170
)
OTHER INVESTING ACTIVITIES
29
14
NET CASH USED IN INVESTING ACTIVITIES
(144,040
)
(13,156
)
CASH FLOWS FROM FINANCING ACTIVITIES
NET CHANGE IN DEBT
121,854
(44,852
)
PURCHASE OF TREASURY STOCK
(26,518
)
(8,726
)
DIVIDENDS PAID
(16,678
)
(5,615
)
OTHER FINANCING ACTIVITIES
455
86
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
79,113
(59,107
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(555
)
67
NET INCREASE IN CASH AND CASH EQUIVALENTS
13,656
6,409
CASH AND CASH EQUIVALENTS at beginning of Period
19,488
10,372
CASH AND CASH EQUIVALENTS at end of Period
$
33,144
$
16,781


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Standard Motor Products Inc. published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 13:52:20 UTC.