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Standard Motor Products, Inc. Announces Fourth Quarter and Year End 2013 Results and a New Stock Repurchase Program

February 24, 2014

NEW YORK, Feb. 24, 2014 /PRNewswire/ — Standard Motor Products, Inc. (NYSE: SMP), an automotive replacement parts manufacturer and distributor, reported today its consolidated financial results for the three months and for the year ended December 31, 2013.

Consolidated net sales for the fourth quarter of 2013 were $218.7 million, compared to consolidated net sales of $192.4 million during the comparable quarter in 2012. Earnings from continuing operations for the fourth quarter of 2013 were $9.4 million or 40 cents per diluted share, compared to $6.3 million or 27 cents per diluted share in the fourth quarter of 2012. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the fourth quarter of 2013 were $9.7 million or 42 cents, compared to $6.5 million or 28 cents per diluted share in the fourth quarter of 2012.

Consolidated net sales for 2013 were $983.7 million, compared to consolidated net sales of $948.9 million in 2012. Earnings from continuing operations for 2013 were $53 million or $2.28 per diluted share, compared to $43 million or $1.86 per diluted share in 2012. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for 2013 and 2012 were $54.1 million or $2.32 per diluted share and $42.3 million or $1.83 per diluted share, respectively.

Mr. Lawrence I. Sills, Standard Motor Products’ Chairman and Chief Executive Officer, stated, “We are very pleased with our results for 2013. We set company records for both sales and profit, despite a disappointing year in Temperature Control, primarily the result of a mild summer season. For the year, sales increased 3.7% and earnings per share, excluding special items, were up 27%, from $1.83 to $2.32.

“For the fourth quarter, sales grew 13.7% over the prior year and earnings per share, excluding special items, were up 50%, from 28 cents to 42 cents. The fourth quarter figures were enhanced by certain Engine Management customers broadening their product lines for their commercial business. We continue to forecast annual growth in the low to mid single digit range.

“Our Engine Management division had an excellent year. Sales were up 6.9%, above industry growth averages, and gross margin improved from 28.2% to 30.7%. Temperature Control sales were down for the year, for reasons stated above, even with the benefit of the CompressorWorks acquisition for the full 12 months in 2013, vs. only eight months in 2012.

“Much of the Company’s profit improvement resulted from an increase in gross margin. As we had said in prior releases, we are seeing the continuing benefits of our efforts over the last several years – manufacturing parts we formerly purchased, integrating recent acquisitions, expanding our production in low cost areas, and improved sourcing.

“Cash flow continued strong. During the year we reduced total debt by $19 million, from $40.6 million to $21.5 million. In addition, during 2013 we invested roughly $20 million in acquisitions and company share repurchases.

“In January we announced the acquisition of the assets of Pensacola Fuel Injection for $12.2 million. The company re-manufactures a wide range of diesel injectors, diesel pumps, and turbo chargers. PFI was our primary supplier for these parts. We plan to relocate the operation to our facility in Grapevine, Texas by the end of the second quarter. This will result in cost savings in the product line, and we will now be a basic manufacturer in this important and growing product area. The current owners of PFI will retain the retail segment of this business.”

The Board of Directors has authorized the purchase of up to an additional $10 million of its common stock under a stock repurchase program. This increase is in addition to the completed $6 million repurchase program authorized by the Board in February 2013. Stock will be purchased from time to time, in the open market or through private transactions, as market conditions warrant. The Company intends to fund the stock repurchase program through its revolving credit facility. The stock repurchase program may be suspended or discontinued at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes, including funding existing equity compensation plans.

Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Monday, February 24, 2014. The dial-in number is 866-952-1907 (domestic) or 785-424-1826 (international). The playback number is 800-757-4761 (domestic) or 402-220-7215 (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                            TWELVE MONTHS ENDED

                                                   DECEMBER 31,                                   DECEMBER 31,

                                                   2013                             2012                     2013        2012
                                                   ----                             ----                     ----        ----

                                                   (Unaudited)                                    (Unaudited)

    NET SALES                                  $218,708                         $192,355                 $983,704    $948,916

    COST OF SALES                               151,959                          134,388                  693,250     689,247
                                                -------                          -------                  -------     -------

    GROSS PROFIT                                 66,749                           57,967                  290,454     259,669

    SELLING, GENERAL &
     ADMINISTRATIVE EXPENSES                     50,443                           45,173                  201,256     187,495

    RESTRUCTURING AND
     INTEGRATION EXPENSES                           826                              658                    3,357       1,437

    OTHER INCOME , NET                              256                              240                    1,022         694
                                                    ---                              ---                    -----         ---

    OPERATING INCOME                             15,736                           12,376                   86,863      71,431

    OTHER NON-OPERATING
     INCOME (EXPENSE), NET                           28                             (630)                       1        (696)

    INTEREST EXPENSE                                281                              531                    1,902       2,788
                                                    ---                              ---                    -----       -----

    EARNINGS FROM CONTINUING
     OPERATIONS BEFORE TAXES                     15,483                           11,215                   84,962      67,947

    PROVISION FOR INCOME TAXES                    6,092                            4,905                   31,919      24,978
                                                  -----                            -----                   ------      ------

    EARNINGS FROM CONTINUING
     OPERATIONS                                   9,391                            6,310                   53,043      42,969

    LOSS FROM DISCONTINUED
     OPERATION, NET OF INCOME
     TAXES                                         (455)                            (395)                  (1,593)     (1,616)
                                                   ----                             ----                   ------      ------

    NET EARNINGS                                 $8,936                           $5,915                  $51,450     $41,353
                                                 ======                           ======                  =======     =======

    NET EARNINGS PER COMMON SHARE:

       BASIC EARNINGS FROM
        CONTINUING OPERATIONS                     $0.41                            $0.28                    $2.31       $1.88

       DISCONTINUED OPERATION                     (0.02)                           (0.02)                   (0.07)      (0.07)

       NET EARNINGS PER COMMON
        SHARE -BASIC                              $0.39                            $0.26                    $2.24       $1.81
                                                  =====                            =====                    =====       =====

       DILUTED EARNINGS FROM
        CONTINUING OPERATIONS                     $0.40                            $0.27                    $2.28       $1.86

       DISCONTINUED OPERATION                     (0.02)                           (0.01)                   (0.07)      (0.07)

       NET EARNINGS PER COMMON
        SHARE -DILUTED                            $0.38                            $0.26                    $2.21       $1.79
                                                  =====                            =====                    =====       =====

    WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES                           23,061,533                       22,817,551               22,974,690  22,812,077

    WEIGHTED AVERAGE NUMBER OF
     COMMON AND DILUTIVE
     SHARES                                  23,366,587                       23,075,586               23,270,067  23,050,340


                                                                           STANDARD MOTOR PRODUCTS, INC.

                                                                       Segment Revenues and Operating Profit

    (In thousands)

                                      THREE MONTHS ENDED                                TWELVE MONTHS ENDED

                                         DECEMBER 31,                                       DECEMBER 31,

                                                           2013              2012                                2013            2012
                                                           ----              ----                                ----            ----

                                          (unaudited)                                       (unaudited)

    Revenues
    --------

    Engine Management                                  $175,747          $153,657                            $711,245        $665,105

    Temperature Control                                  38,309            35,248                             262,537         268,804

    All Other                                             4,652             3,450                               9,922          15,007
                                                                                                                -----          ------

                                                       $218,708          $192,355                            $983,704        $948,916
                                                       ========          ========                            ========        ========

    Gross Margin
    ------------

    Engine Management                                   $55,546  31.6%    $47,221                 30.7%      $218,294  30.7% $187,776  28.2%

    Temperature Control                                   6,326  16.5%      6,979                 19.8%        58,150  22.1%   58,583  21.8%

    All Other                                             4,877             3,767                              14,010          13,310
                                                                                                               ------          ------

                                                        $66,749  30.5%    $57,967                 30.1%      $290,454  29.5% $259,669  27.4%
                                                        =======           =======                            ========        ========

    Selling, General & Administrative
    ---------------------------------

    Engine Management                                   $31,273  17.8%    $28,956                 18.8%      $121,578  17.1% $116,157  17.5%

    Temperature Control                                  10,078  26.3%      8,832                 25.1%        47,845  18.2%   43,537  16.2%

    All Other                                             9,092             7,385                              31,833          27,801
                                                                                                               ------          ------

                                                        $50,443  23.1%    $45,173                 23.5%      $201,256  20.5% $187,495  19.8%
                                                        =======           =======                            ========        ========

    Operating Profit
    ----------------

    Engine Management                                   $24,273  13.8%    $18,265                 11.9%       $96,716  13.6%  $71,619  10.8%

    Temperature Control                                  (3,752) -9.8%     (1,853)                -5.3%        10,305   3.9%   15,046   5.6%

    All Other                                            (4,215)           (3,618)                            (17,823)        (14,491)
                                                         ------            ------                             -------         -------

                                                         16,306   7.5%     12,794                  6.7%        89,198   9.1%   72,174   7.6%

    Restructuring & Integration                            (826) -0.4%       (658)                -0.3%        (3,357) -0.3%   (1,437) -0.2%

    Other Income, Net                                       256   0.1%        240                  0.1%         1,022   0.1%      694   0.1%

                                                        $15,736   7.2%    $12,376                  6.4%       $86,863   8.8%  $71,431   7.5%
                                                        =======           =======                             =======         =======


                                                                                     STANDARD MOTOR PRODUCTS, INC.

                                                                              Reconciliation of GAAP and Non-GAAP Measures

    (In thousands, except per share amounts)

                                                         THREE MONTHS ENDED                                      TWELVE MONTHS ENDED

                                                            DECEMBER 31,                                          DECEMBER 31,

                                                                         2013                              2012                                         2013                                 2012
                                                                         ----                              ----                                         ----                                 ----

                                                             (Unaudited)                       (Unaudited)

    EARNINGS FROM CONTINUING OPERATIONS
    -----------------------------------

    GAAP EARNINGS FROM CONTINUING OPERATIONS                           $9,391                            $6,310                                      $53,043                              $42,969

    RESTRUCTURING AND INTEGRATION EXPENSES (NET OF
     TAX)                                                                 495                               395                                        2,014                                  862

    CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS
     FINALIZED IN PERIOD                                                    -                                 -                                         (374)                                (774)

    GAIN FROM SALE OF BUILDINGS (NET OF TAX)                             (157)                             (157)                                        (629)                                (772)
                                                                         ----                              ----                                         ----                                 ----

    NON-GAAP EARNINGS FROM CONTINUING OPERATIONS                       $9,729                            $6,548                                      $54,054                              $42,285
                                                                       ======                            ======                                      =======                              =======

    DILUTED EARNINGS PER SHARE FROM CONTINUING
     OPERATIONS
    ------------------------------------------

    GAAP DILUTED EARNINGS PER SHARE FROM CONTINUING
     OPERATIONS                                                         $0.40                             $0.27                                        $2.28                                $1.86

    RESTRUCTURING AND INTEGRATION EXPENSES (NET OF
     TAX)                                                                0.02                              0.02                                         0.09                                 0.03

    CERTAIN TAX CREDITS AND PRODUCTION DEDUCTIONS
     FINALIZED IN PERIOD                                                    -                                 -                                        (0.02)                               (0.03)

    GAIN FROM SALE OF BUILDINGS (NET OF TAX)                                -                             (0.01)                                       (0.03)                               (0.03)
                                                                          ---                             -----                                        -----                                -----

    NON-GAAP DILUTED EARNINGS PER SHARE FROM
     CONTINUING OPERATIONS                                              $0.42                             $0.28                                        $2.32                                $1.83
                                                                        =====                             =====                                        =====                                =====

    MANAGEMENT BELIEVES THAT EARNINGS FROM CONTINUING OPERATIONS  AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS BEFORE SPECIAL ITEMS, WHICH ARE NON-GAAP MEASUREMENTS,
     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)

                                                  December 31,                    December 31,

                                                                   2013                          2012
                                                                   ----                          ----

                                                   (Unaudited)

                                                     ASSETS
                                                     ------

    CASH                                                         $5,559                       $13,074

    ACCOUNTS RECEIVABLE, GROSS                                  132,170                       104,689

    ALLOWANCE FOR DOUBTFUL ACCOUNTS                               6,969                         6,124
                                                                  -----                         -----

    ACCOUNTS RECEIVABLE, NET                                    125,201                        98,565

    INVENTORIES                                                 269,447                       267,468

    OTHER CURRENT ASSETS                                         45,870                        39,446

    TOTAL CURRENT ASSETS                                        446,077                       418,553
                                                                -------                       -------

    PROPERTY, PLANT AND EQUIPMENT,
     NET                                                         63,646                        64,422

    GOODWILL AND OTHER INTANGIBLES,
     NET                                                         72,866                        72,373

    OTHER ASSETS                                                 32,934                        21,246

    TOTAL ASSETS                                               $615,523                      $576,594
                                                               ========                      ========

                                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                      ------------------------------------

    NOTES PAYABLE                                               $21,406                       $40,453

    CURRENT PORTION OF LONG TERM DEBT                                59                           120

    ACCOUNTS PAYABLE                                             71,469                        62,283

    ACCRUED CUSTOMER RETURNS                                     31,464                        29,033

    OTHER CURRENT LIABILITIES                                    95,918                        90,283

    TOTAL CURRENT LIABILITIES                                   220,316                       222,172
                                                                -------                       -------

    LONG-TERM DEBT                                                   16                            75

    ACCRUED ASBESTOS LIABILITIES                                 23,919                        25,110

    OTHER LIABILITIES                                            21,840                        21,650

     TOTAL LIABILITIES                                          266,091                       269,007
                                                                -------                       -------

     TOTAL STOCKHOLDERS' EQUITY                                 349,432                       307,587

     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY                                     $615,523                      $576,594
                                                               ========                      ========


                                                    STANDARD MOTOR PRODUCTS, INC.

                                           Condensed Consolidated Statements of Cash Flows

     (In thousands)

                                                                     TWELVE MONTHS ENDED

                                                                         DECEMBER 31,

                                                                                      2013     2012
                                                                                      ----     ----

                                                                         (Unaudited)

     CASH FLOWS FROM OPERATING ACTIVITIES
     ------------------------------------

     NET EARNINGS                                                                  $51,450  $41,353

     ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH

     PROVIDED BY OPERATING ACTIVITIES:

     DEPRECIATION AND AMORTIZATION                                                  17,595   16,466

     OTHER                                                                          12,773   17,231

     CHANGE IN ASSETS AND LIABILITIES:

     ACCOUNTS RECEIVABLE                                                           (27,278)  15,393

     INVENTORY                                                                      (6,094)  (1,556)

     ACCOUNTS PAYABLE                                                               12,497    3,287

     OTHER                                                                          (3,327)   1,386

     NET CASH PROVIDED BY OPERATING ACTIVTIES                                       57,616   93,560
                                                                                    ------

     CASH FLOWS FROM INVESTING ACTIVITIES
     ------------------------------------

     CAPITAL EXPENDITURES                                                          (11,410) (11,811)

     ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES                                 (12,760) (38,594)

     OTHER INVESTING ACTIVITIES                                                       (592)     493

     NET CASH USED IN INVESTING ACTIVITIES                                         (24,762) (49,912)
                                                                                  --------

     CASH FLOWS FROM FINANCING ACTIVITIES
     ------------------------------------

     NET CHANGE IN DEBT                                                            (19,166) (32,652)

     PURCHASE OF TREASURY STOCK                                                     (6,864)  (4,999)

     DIVIDENDS PAID                                                                (10,107)  (8,215)

     OTHER FINANCING ACTIVITIES                                                     (3,158)   3,079

     NET CASH USED IN FINANCING ACTIVITIES                                         (39,295) (42,787)
                                                                                  --------

     EFFECT OF EXCHANGE RATE CHANGES ON CASH                                        (1,074)   1,342
                                                                                   -------

     NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           (7,515)   2,203

     CASH AND CASH EQUIVALENTS at beginning of year                                 13,074   10,871

     CASH AND CASH EQUIVALENTS at end of year                                       $5,559  $13,074
                                                                                    ======

SOURCE Standard Motor Products, Inc.


Source: PR Newswire



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