Standard Motor Products, Inc. (NYSE: SMP), a leading automotive parts manufacturer and distributor, reported today its consolidated financial results for the three months ended March 31, 2024.
Net sales for the first quarter of 2024 were $331.4 million, compared to consolidated net sales of $328.0 million during the comparable quarter in 2023. Earnings from continuing operations for the first quarter of 2024 were $9.9 million or $0.44 per diluted share, compared to $12.7 million or $0.57 per diluted share in the first quarter of 2023. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the first quarter of 2024 were $10.0 million or $0.45 per diluted share, compared to $13.4 million or $0.61 per diluted share in the first quarter of 2023.
Mr. Eric Sills, Standard Motor Products’ Chief Executive Officer and President stated, “Our first quarter experienced mixed results. We are pleased with our record-setting top line performance as sales increased 1% against last year’s first quarter, rebounding from the sluggish sales we saw
at the end of 2023. However, as expected, we continued to experience headwinds across various cost inputs, causing a drag on our profitability.”
By segment, Vehicle Control sales were up 0.5% against a difficult comparison of over 4% growth last year, as customers returned to more normalized ordering patterns after a slowdown in the fourth quarter of last year.
Turning to Temperature Control, sales declined 1.1% versus the same quarter last year. However, this is mainly due to the timing of pre-season orders which can always shift between periods. Ultimately, as a seasonal business, our annual results will be determined by the degree and duration of hot weather the country experiences, and therefore early results are not indicative of the full year.
Engineered Solutions sales increased 4.5% over last year’s first quarter, setting a single quarter record for this segment, as our traction with new and existing customers continues to build. We remain encouraged with our progress in winning new business and the overall opportunity we see in terms of long-term sales growth.
Looking at profitability, our Adjusted EBITDA margin was 6.9% in the quarter vs. 8.8% last year. Excluding $1.1 million of start-up costs related to our new distribution center in Shawnee, KS, Adjusted EBITDA was 7.2% in the quarter. Within the combined Aftermarket segments, Adjusted EBITDA was helped by a 40 basis point gross margin improvement, but was offset by $1.0 million of higher factoring costs, as well as inflation in other SG&A expenses. Adjusted EBITDA in Engineered Solutions was down primarily due to a lower gross margin in the quarter, which was impacted by inflationary cost increases and some unfavorable changes in mix of sales.
Our sales and profit expectations for the full year of 2024 remain unchanged. We anticipate sales growth will be flat to low single digits, and Adjusted EBITDA will be in a range of 9.0% to 9.5%. As previously discussed, we expect to incur roughly $5 million of added costs in 2024 as compared to 2023 for our new distribution center in Shawnee, KS, related to increased rent as well as redundancy expenses as we transition away from our Edwardsville, KS distribution center. Additionally, we anticipate approximately $25 million in capital expenditures as we outfit the new facility. We are pleased to have successfully begun the first phase of shipping from our new DC, and are optimistic about the benefits it will bring once fully implemented. It will provide SMP with expanded capacity for future growth, mitigate risk through a multi-point distribution strategy, and improve product delivery times in certain geographies.
As part of our commitment to return value to shareholders, the Board of Directors has approved payment of a quarterly dividend of 29 cents per share on the common stock outstanding, which will be paid on June 3, 2024 to stockholders of record on May 15, 2024. Additionally, we purchased $2.6 million of common stock under our existing $30 million share repurchase authorization during the quarter. From the end of the first quarter through April 29, 2024, we purchased an additional $3.5 million of common stock, leaving our remaining authorization under the current program at $23.9 million.
In closing, Mr. Sills commented, “As we look to the long term, we remain optimistic about both of our end markets. The fundamental trends in the aftermarket are favorable – a growing and
aging car parc, a return to historical miles driven, and the high cost of new vehicles should lead to ongoing demand for parts, especially in non-discretionary categories such as ours. Our Engineered Solutions business continues to grow globally as we become known as a capable high-quality supplier, and opportunities continue to present themselves. And while near-term cost pressures persist, we are excited for 2024 and beyond, and we thank our employees that make all of this possible.”
View Consolidated Financial Statements
Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Wednesday, May 1, 2024. 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 Q1 2024 Earnings Webcast link. Investors may also listen to the call by dialing 800-267-6316 (domestic) or 203-518-9783 (international). Our playback will be made available for dial in immediately followingthe 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 888-215-1535 (domestic) or 402-220-4940 (international).
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
(972) 316-8107
tony.cristello@smpcorp.com