STANDARD MOTOR PRODUCTS, INC. ANNOUNCES
THIRD QUARTER 2003 EARNINGS AND A QUARTERLY DIVIDEND
New York, NY, October 30, 2003......Standard Motor Products, Inc. (NYSE:SMP), an automotive replacement parts manufacturer and distributor, reported consolidated net sales for the third quarter of 2003, the three months ended September 30, 2003, of $214.5 million, compared to consolidated net sales of $183.6 million during the comparable quarter in 2002. Earnings from continuing operations for the third quarter of 2003 were $2.0 million or 11 cents per diluted share, compared to $9.8 million or 72 cents per diluted share, in the third quarter of 2002.
Consolidated net sales for the nine month period ended September 30, 2003 were $516.3 million, compared to consolidated net sales of $490.6 million during the comparable period in 2002. Earnings from continuing operations for the nine month period ended September 30, 2003 were $5.7 million, or 39 cents per diluted share, compared to $14.2 million, or $1.14 per diluted share, for the comparable period in 2002.
Commenting on the results, Mr. Lawrence Sills, Standard Motor Products’ Chief Executive Officer, said, “Net sales in the third quarter, excluding the addition of DEM volume, were down $7.9 million in our Engine Management division and down $20.8 million in Temperature Control.
“For the year, Temperature Control net sales are down $34.3 million or 15.2%, the result of the loss of AutoZone’s business and one of the coolest summers on record. In Engine Management, net sales excluding DEM are down 1.6% for the year. Due to the DEM acquisition, we did not implement our usual 2-3% annual price increase, and this slight decline in Engine Management’s units is in line with all our forecasts.”
Mr. Sills added, “We continue to make good improvements in gross margin despite the reduction in net sales and the lack of an Engine Management price increase. The third quarter gross margin, excluding DEM, improved 0.5 points and the year-to-date increased 0.4 points versus the comparable periods in the prior year.”
Regarding the integration of DEM, Mr. Sills stated, “We are extremely pleased with how the integration is progressing. We are proceeding on schedule with plans to close 7 of the 9 DEM facilities in the near future. We are comfortable with our original estimates to complete the integration before the end of 2004; $30-35 million for restructuring and integration costs over this period; and $55 million in annual savings by 2005.”
Finally, we have recently re-examined the provisions of our revolving credit facility. Based on a possible interpretation of the applicable accounting rules, we may be required to reclassify our credit facility from long-term to short-term debt, from 2001 forward, though the existing credit facility does not mature until 2008. The issue is not yet fully resolved and at present, we are continuing to classify those borrowings as long-term debt. In any event, we remain in compliance with all of our debt covenants, and we believe that any reclassification of our revolving credit facility to short-term debt will have no effect on our liquidity, cash flows, debt amortization, profits or other terms within any of our debt facilities.
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, 2003 to stockholders of record on November 14, 2003.
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Friday, October 31, 2003. The dial in number is 800-362-0574 and the ID number is J451. The playback number is 888-567-0675 (toll free) and the international number is 402-530-0417.
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, and 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.