1Q 2000 EARNINGS AND QUARTERLY DIVIDEND
New York, NY, April 17, 2000......Standard Motor Products, Inc. (NYSE: SMP) automotive replacement parts manufacturer and distributor, reported net sales for the first quarter of 2000, the three months ended March 31, 2000, were $146.8 million, 17% lower than net sales of $176.8 million during the comparable quarter a year ago. Net losses for the first quarter of 2000 were $116,000 or 1 cent per diluted share, as compared to the net earnings of $3.6 million or 28 cents per diluted share in the first quarter of 1999. Excluding $501,000 in the first quarter of 2000 for a one-time 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 4 cents higher or 3 cents per diluted share.
Lawrence Sills, President, said, "The $30 million reduction in net sales, primarily of temperature control products, reflects the Company’s curtailment of a pre-season dating program that was offered to customers in 1999. The Company was able to reduce the early incentive dating program due to the completion of its new Texas distribution facility in December 1999, increasing daily shipping capacity to match customer demand during the summer season. In 1999, a substantial percentage of the year’s sales were pushed forward into the pre-season, and we are anticipating a more normal sales flow this year."
Mr. Sills stated, "Gross margins for the quarter of 32.2% were 2.1 points better than the comparable quarter of the prior year. Gross margin percentages improved in both engine management and temperature control divisions from favorable pricing and cost reduction programs implemented."
Mr. Sills said, "Selling, general and administrative expenses (SG&A) were $43.2 million, $1.2 million lower than the $44.4 million in SG&A expenses a year ago. Due to the reduced net sales volume, SG&A expenses increased as a percentage of net sales from 25.1% to 29.4%."
On the balance sheet, Mr. Sills commented, "Inventories increased approximately $30 million, entirely in temperature control products, in anticipation of the summer air-conditioning season. The Company is committed to improvements in working capital and will be monitoring inventory closely as we enter the summer season."
As previously announced, the Company prepaid, in its entirety, a 10.22% Senior Note of $14 million, with a $572,000 prepayment penalty.
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, 2000 to stockholders of record on May 15, 2000.