1Q 2001 EARNINGS AND QUARTERLY DIVIDEND
New York, NY, April 26, 2001......Standard Motor Products, Inc. (NYSE:SMP) automotive replacement parts manufacturer and distributor, reported net sales for the first quarter of 2001, the three months ended March 31, 2001, were $155.5 million, 6% higher than net sales of $146.8 million during the comparable quarter a year ago. Net earnings for the first quarter of 2001 were $619,000 or 5 cents per diluted share, as compared to a net loss of $116,000 or 1 cent per diluted share in the first quarter of 2000. Excluding $501,000 in the first quarter of 2000 for a prepayment penalty and write-off of unamortized fees for the retirement of a 10.22% Senior Note, net earnings per diluted share would have been 3 cents per diluted share.
Lawrence Sills, Chief Executive Officer, said, "We were pleased with the 6% sales increase in light of the relatively soft first quarter experienced by most of the aftermarket. The increase resulted primarily from new accounts, in both Engine Management and Temperature Control."
Mr. Sills stated, "Gross margins for the quarter were negatively impacted by inventory reduction programs. Overall gross margins decreased from 32.2% in 2000 to 28.9% in 2001. The reduction in gross margins was across all product lines as the Company targets a minimum $30 million inventory reduction in 2001. Pressure will continue on gross margins throughout the second quarter and into the third quarter as we continue to bring inventory down.
"We were successful in reducing inventory by $13 million during the first quarter, at a time when inventories have historically increased. This inventory reduction program, while it will hurt margins in the short run, will make us much stronger in the months ahead."
Mr. Sills said, "Selling, general and administrative expenses (SG&A) were $40 million, $3.2 million lower than the $43.2 million in SG&A expenses a year ago. The Company continues to work on cost reduction efforts to offset the erosion in gross margins. As a percent of net sales, SG&A expenses decreased from 29.4% in 2000 to 25.7% in 2001."
The Board of Directors has approved payment of a quarterly dividend of nine cents per share on the common stock outstanding. The dividend will be paid on June 1, 2001 to stockholders of record on May 15, 2001.
This news release contains certain forward-looking statements that involve risks and uncertainties. Actual results, events and performance could differ materially from those contemplated by these forward looking statements. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in this release and those detailed from time-to-time in prior public statements and the Company's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K and the Company’s quarterly reports on Form 10-Q.
# # #