2Q 2001 EARNINGS AND QUARTERLY DIVIDEND
New York, NY, July 24, 2001......Standard Motor Products, Inc. (NYSE:SMP), automotive replacement parts manufacturer and distributor, reported net sales for the second quarter of 2001, the three months ended June 30, 2001, of $186.9 million, 6.7% higher than net sales of $175.1 million during the comparable quarter of a year ago. Net losses for the second quarter of 2001 were $522,000 or 5 cents per diluted share, as compared to net earnings of $7.0 million or 54 cents per diluted share, in the second quarter of 2000. This loss included, however, $2.8 million for a one-time prepayment penalty and write-off of unamortized fees on the early extinguishment of debt, costs relating to the Company’s debt restructuring. Excluding these one-time costs, net earnings would have been 19 cents per diluted share.
Sales for the six months in 2001 were $342.5 million, 6.6% higher than net sales of $321.3 million in the comparable period in 2000. Net earnings for the six months in 2001 were $97,000 or 1 cent per diluted share, as compared to $6.9 million or 57 cents per diluted share a year ago. Excluding $2.8 million and $501,000 in 2001 and 2000, respectively, for the extraordinary losses on early retirement of debt, net earnings for the six months would have been 25 cents and 61 cents per diluted share in 2001 and 2000, respectively.
Lawrence Sills, Chief Executive Officer, said, "Sales in the second quarter increased greater than 6%, a trend started in the first quarter 2001. The increase resulted primarily from new accounts, in both Engine Management and Temperature Control."
Mr. Sills stated, "Gross margins for the quarter continued to be negatively impacted as the Company aggressively reduced inventory by cutting production and temporarily closing manufacturing facilities. The resultant underabsorption of overhead caused overall margins to decrease to 26.2% in the second quarter of 2001 and 27.4% year-to-date as compared to approximately 32% in 2000.
"We are very pleased with our success in reducing inventory in the first half of the year. Inventories have come down $47 million since the beginning of the year and are $35 million below inventory levels a year ago. We will continue to work towards further inventory reductions, but at a slower rate. In turn, production levels and gross margins should begin to improve in the quarters ahead."
Mr. Sills said, "Selling, general and administrative (SG&A) expenses in the second quarter 2001 were $40.8 million, $1 million lower than the $41.8 million a year ago." Year-to-date SG&A expenses were reduced $3.7 million to 23.6% percent of net sales as compared to 26.3% in the comparable period a year ago. This reflects the result of our cost cutting efforts."
Mr. Sills concluded, "The Company successfully secured a $225 million revolving credit facility on April 30, 2001 to refinance certain indebtedness, provide working capital financing and capacity to grow our Engine Management and Temperature Control product lines."
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 September 4, 2001 to stockholders of record on August 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.
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