NEW YORK – Standard Motor Products (SMP) has reported its consolidated financial results for the three months ended March 31, 2015.
Consolidated net sales for the first quarter of 2015 were $227.6 million, compared to consolidated net sales of $232.8 million during the comparable quarter in 2014. Earnings from continuing operations for the first quarter of 2015 were $9.3 million or 40 cents per diluted share, compared to $12.4 million or 53 cents per diluted share in the first quarter of 2014. 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 2015 were $9.2 million or 40 cents per diluted share, compared to $12.4 million or 53 cents per diluted share in the first quarter of 2014.
Commenting on the results, Lawrence Sills, SMP’s chairman and CEO, stated, “Our results were negatively impacted by foreign exchange movements, plus several other relatively short-term events. While obviously not pleased with the first quarter results, we remain confident for the balance of the year.
“Our net sales were down from the first quarter of 2014 by roughly $5 million, of which $2 million — close to 40 percent — resulted from foreign exchange fluctuations. In Engine Management, January was a soft month, partially caused by lost days due to ice and snow in certain parts of the country. However, February and March sales bounced back to healthy levels and April sales appear solid as well. For Temperature Control, the first quarter essentially represents pre-season stocking orders. Coming after two cool summers in a row, it is not surprising that pre-season sales were slightly down. The test will be in the second and third quarters, which constitute the bulk of the selling season.
“Gross profit was also down slightly from the prior year. In Temperature Control, we have previously advised that gross margin would continue to be negatively impacted in the first half of 2015 as a result of the production cutbacks in the second half of 2014.
“In Engine Management, we incurred several million dollars [in] expense in the first quarter related to our new production line for rebuilt diesel fuel injectors as we strive to ensure the highest possible quality. We believe these costs will continue, though at a reduced rate, in the second quarter. The diesel business has significant growth potential and these costs represent an excellent investment for the future.
“General and Administrative expenses, as we previously announced, are higher than a year ago, primarily from the year-over-year reduction in amortization of prior service cost as we wind down our retiree medical program. The program will end December 2016.
“All the above negatively affected our first quarter results. However, as we have said, most of these were either foreign exchange related or relatively short-term in nature. On the positive side, sales since January have been healthy; industry demographics continue to be positive; and we continue to upgrade and improve our recent acquisitions. We are optimistic for the balance of the year.”
