3Q 2000 EARNINGS AND QUARTERLY DIVIDEND
New York, NY, October 19, 2000......Standard Motor Products, Inc. (NYSE:SMP) automotive replacement parts manufacturer and distributor, reported net sales for the three months ended September 30, 2000 were $166.8 million, 12.1% lower than net sales of $189.8 million during the comparable quarter of a year ago. Net earnings for the third quarter of 2000 were $4.9 million or 40 cents per diluted share, as compared to the net earnings before extraordinary loss of $10.6 million or 74 cents per diluted share earned in the third quarter of 1999.
Sales for the nine months ended September 30, 2000 were $489.9 million, 14.4% lower than net sales of $572.3 million in the comparable period in 1999. Net earnings for the nine months in 2000 were $11.8 million or 98 cents per diluted share, as compared to $25.2 million or $1.86 per diluted share a year ago. Excluding extraordinary losses on the early extinquishment of debt in 2000 and 1999, net earnings for the nine months in 2000 were $12.3 million or $1.02 per diluted share, as compared to net earnings of $26.3 million or $1.94 per diluted share a year ago.
Lawrence Sills, President, said, "The sales shortfall in the quarter was entirely in temperature control products. The combination of customer inventory reduction efforts, and a very cool and wet summer season in the northeast and mid-west, led to the sales shortfall."
Mr. Sills added, "The Company’s new customer return policies and procedures have yielded favorable results to date, and we are optimistic for year over year cost reductions. However, the full impact of returns from the distribution channel will not be known until the fourth quarter."
Mr. Sills stated, "Gross margins for the quarter were 31.1%, 1.6 points lower than the comparable quarter of the prior year. The gross margins in the third quarter were severely impacted by underabsorbed overheads in our Temperature Control line due to the net sales shortfall for the year. Gross margins in our Engine Management line improved nicely, as we prepare to begin selling a new customer in October 2000. Year-to-date gross margins were 32% as compared to 31.5% in the prior year."
Mr. Sills said, "Selling, general and administrative expenses (SG&A) in the quarter were approximately $2.7 million lower at $40.2 million as compared to $42.9 million in the prior year. Year-to-date SG&A expenses were $126.4 million in 2000 as compared to $130.3 million in 1999."
Mr. Sills commented, "Our investment in inventory, up $32 million this year, reflects the unsold inventory from a poor temperature control season and the required pipeline build-up for the new customer. Inventories are planned to be dramatically reduced over the next several quarters once the new customer launch is behind us and the 2001 temperature control season rolls out."
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 December 1, 2000 to stockholders of record on November 15, 2000.
Finally, the Board of Directors regretfully announce the passing of its Chairman, Mr. Nathaniel L. Sills. Mr. Sills served the Company, with integrity, skill, and honor, for 57 years.
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