Standard Motor Products, Inc., an automotive replacement parts manufacturer and distributor, reported recently its consolidated financial results for the three months and six months ended June 30, 2020.
Consolidated net sales for the second quarter of 2020 were $247.9 million, compared to consolidated net sales of $305.2 million during the comparable quarter in 2019. Earnings from continuing operations for the second quarter of 2020 were $11.8 million or 52 cents per diluted share, compared to $20.6 million or 90 cents per diluted share in the second quarter of 2019. Excluding non-operational gains and losses from the reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the second quarter of 2020 were $11.8 million or 52 cents per diluted share, compared to $21.0 million or 92 cents per diluted share in the second quarter of 2019.
Consolidated net sales for the six months ended June 30, 2020, were $502.2 million, compared to consolidated net sales of $588.9 million during the comparable period in 2019. Earnings from continuing operations for the six months ended June 30, 2020, were $21.5 million or 94 cents per diluted share, compared to $33.7 million or $1.47 per diluted share in the comparable period of 2019. Excluding non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the six months ended June 30, 2020, and 2019 were $21.6 million or 95 cents per diluted share and $34.1 million or $1.49 per diluted share, respectively.
Eric Sills, Standard Motor Products’ CEO and president stated, “The second quarter was a period of dramatic transition, both for our company and our industry. We had a very difficult April, but are pleased with the month over month sales improvement since then.
“Beginning in mid-March, and continuing through April, businesses closed down, people sheltered at home, miles driven were dramatically curtailed, and we, and the aftermarket as a whole, saw a significant reduction in volume. The industry started to recover in May, and in June business rebounded sharply to levels consistent with 2019 volumes. While our second quarter sales were down overall, the monthly cadence reflected positive trends, which bodes well as we enter the third quarter.
“As we stated in our first quarter release, we had two primary goals as we entered this period. Our first was to guarantee the health and safety of our employees. Our second was to take steps to ensure that we emerge from the crisis as strong, or stronger, than we were when we entered it. We are pleased with our accomplishments to date in both areas.
“Regarding health and safety, we have taken steps to minimize risks in all locations. Our measures include temperature checking, continuous deep cleaning, facility modifications, updated policies for high risk employees, work-from-home allowances, and many other changes. Health and safety remains a high priority for us, and our management team focuses on it on a daily basis.
“As for the second goal, from the early days of the crisis, we began to implement programs to conserve cash and reduce costs. As we believed this would be a temporary situation, these measures were always intended to be short term in nature and have no adverse effect on our long term strategy or growth. We drew down $75 million from our bank credit lines. We temporarily suspended our stock repurchase program and our quarterly dividend. We reduced compensation for our board of directors and senior management, and reduced or eliminated a host of discretionary expenses. However, we have not laid off any salaried staff, and we continue to fund capital projects and invest in new product development.
“As we begin our third quarter, we are pleased that our business is improving. Furthermore, our customers’ POS sales are exceeding their comparable figures for 2019. However, the spike in COVID cases and continued high unemployment make the near future difficult to predict. Accordingly, while we have repaid the $75 million draw down of our bank credit line, we have kept most of our other cost saving actions in place, at least for the short term. We believe this is the prudent course of action.
“Looking further ahead, we are optimistic about our future. Industry demographics remain favorable, and we are fortunate that the majority of our products are non-discretionary. Most importantly, thanks to the dedication and efforts of our people, our position in the industry has never been stronger.”