February 22, 2022 | Download PDF
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SMP, a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months and twelve months ended December 31, 2021.
Net sales for the fourth quarter of 2021 were $309.9 million, compared to consolidated net sales of $282.7 million during the comparable quarter in 2020. Earnings from continuing operations for the fourth quarter of 2021 were $20.0 million or 89 cents per diluted share, compared to $22.7 million or $1.00 per diluted share in the fourth 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 fourth quarter of 2021 were $20.3 million or 90 cents per diluted share, compared to $24.7 million or $1.08 per diluted share in the fourth quarter of 2020
Net sales for the twelve months ended December 31, 2021, were $1.30 billion, compared to consolidated net sales of $1.13 billion during the comparable period in 2020. Earnings from continuing operations for the twelve months ended December 31, 2021, were $99.4 million or $4.39 per diluted share, compared to $80.4 million or $3.52 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 twelve months ended December 31, 2021 and 2020 were $100.7 million or $4.45 per diluted share and $82.4 million or $3.61 per diluted share, respectively.
Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “We are extremely pleased with our fourth quarter and full year results. We posted our sixth consecutive quarter of record sales, up nearly 10% over last year’s record-breaking fourth quarter, with full year revenues beating 2020 by 15%.
“Our full-year earnings substantially surpassed 2020, up more than 22%, though our fourth quarter earnings were down slightly from last year as 2020 included many unique, non-recurring benefits related to the Covid-19 pandemic, and thus was an anomaly.
“By division, Engine Management sales were up nearly 6% in the quarter, and up 12% for the full year. Our strong performance was the result of multiple contributing factors, including strong market demand as evidenced by robust customer POS, the phase-in of new business wins, the impact of recent acquisitions, and the partial benefit of price increases implemented in the fourth quarter.
“Turning to Temperature Control, 2021 was one of the longest and hottest summers on record, with demand extending well-beyond historical trends. Our sales remained strong throughout the fourth quarter, and were up nearly 24% for the full year.
“Our gross margin percentage within the Engine Management division was lower than historical levels, with two main drivers. First, we have been experiencing elevated inflation across a host of cost inputs, including raw materials, labor and transportation. We began passing these costs through to our customers during the quarter, and thus saw a rebound in our gross margin percentage from the third quarter, with more pricing actions taking effect in early 2022.
“The second component of our reduced gross margin percentage is related to an ongoing mix shift within the division. We have been aggressively pursuing strategic growth in our specialized original equipment business, which, as previously explained, has a different margin profile from our aftermarket business. It has lower gross margins, but also lower SG&A expense, and thus generates comparable operating profit margins.
“Our specialized OE business represented 24% of our Engine Management revenue in the fourth quarter of 2021, compared to 17% the prior year. Much of this growth was the result of the three acquisitions consummated this past year, which contributed $24 million in revenue in the quarter.
“We believe this specialized OE business, which focuses on niche channels such as medium and heavy-duty vehicles, construction and agricultural equipment, power sports, and others, represents a significant growth opportunity. This business is now at an annual run-rate of nearly $300 million with an established global footprint including North America, Europe and Asia. We are in the early stages of our integration, but we see great potential as we look at the breadth and depth of the various product portfolios, customer lists, manufacturing and engineering capabilities, and expanded international reach.
“We also continued to return value to our shareholders over the course of the year. Our strong operating results allowed us to repurchase shares of our common stock in the amount of $26.9 million for the year. Additionally, on February 1, 2022 our Board approved an increase in our quarterly dividend from 25 cents per share to 27 cents per share on the common stock outstanding. The dividend will be paid on March 1, 2022 to stockholders of record on February 15, 2022.
“In closing, we are very pleased with our 2021 performance, and the momentum with which we enter 2022. Our core market continues to enjoy tailwinds as the fleet ages and miles driven rebound. Relationships with our customers have never been better, and their POS continues to trend favorably. We consummated three complementary acquisitions, providing critical mass to be a meaningful player in these new markets with significant upside potential. And while we recognize that various challenges continue, including rising inflation, supply chain disruption, and ongoing uncertainty from the pandemic, we believe we are facing these challenges with the strongest team SMP has ever had. All of our SMP employees around the world have contributed to our success, and we cannot thank them enough. We are very excited about the future.”
Finally, Mr. Lawrence I. Sills, Chairman of the Board, stated “Mr. Richard (Dick) Ward announced that he will retire from the Board this coming May, at the conclusion of his term. Dick has been a valuable member of our Board, where he has served since 2004, including as Chairman of our Nominating and Corporate Governance Committee for the past 17 years. He has been a major contributor in all areas, and he will be missed. We wish him a well-deserved retirement.”
View Consolidated Financial Statements
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Tuesday, February 22, 2022. This call will be web cast and can be accessed on the Investor Relations page of our website at www.smpcorp.com and clicking on the SMP Q4 2021 Earnings Webcast link. Investors may also listen to the call by dialing (800) 895-3361 (domestic) or 785- 424-1062 (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 800-934-7612 (domestic) or 402- 220-6980 (international). The participant passcode is 94640.
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.
For more information, contact:
Anthony (Tony) Cristello
Standard Motor Products, Inc.