NEW YORK — Standard Motor Products has reported its consolidated financial results for the three months and six months, which ended on June 30.
Consolidated net sales for the second quarter of 2004 were $235 million, compared to consolidated net sales of $166.1 million during the comparable quarter in 2003. Earnings from continuing operations for the second quarter of 2004 were $7.5 million or 38 cents per diluted share, compared to $4.3 million or 34 cents per diluted share in the second quarter of 2003.
Consolidated net sales for the six month period, which ended on June 30, were $439.8 million, compared to consolidated net sales of $301.9 million during the comparable period in 2003. Earnings from continuing operations for the six month period, which ended on June 30, were $7 million or 36 cents per diluted share, compared to $3.7 million or 30 cents per diluted share for the comparable period in 2003.
“The consolidated net sales increase in the second quarter and the first half of 2004 was primarily related to the previously announced acquisition of Dana’s Engine Management Division (DEM), effective as of June 30, 2003,” said Standard Motor Products’ CEO Lawrence Sills. “Net sales generated in the second quarter from DEM were approximately $62 million. Excluding DEM net sales, our core Engine Management net sales increased $6.6 million or approximately 8 percent in the second quarter of 2004, compared to the comparable period in 2003. In our Temperature Control business, net sales were basically flat in the second quarter, but were approximately 4 percent higher in the first half of 2004, compared to the comparable period in 2003.
“Gross margins were 26.5 percent in the second quarter of 2004, compared to 26.4 percent in the comparable quarter of 2003 and 24.9 percent in the first quarter of 2004. We are beginning to see the benefits of the DEM integration, as well as our normal seasonal improvement in Temperature Control. Similar benefits were achieved in selling, general, and administrative (SG&A) expenses as we eliminated redundant costs from the DEM acquisition. SG&A expenses as a percentage of consolidated net sales were 19.6 percent in the second quarter of 2004, compared to 19.7 percent in the comparable quarter in 2003.”
Sills added: “We remain on target for completing the DEM integration by year end. All manufacturing and customer/shipping moves have now been implemented, though we are still doing some packaging in Nashville. We have previously announced exit plans for seven DEM facilities; all will be completed by the end of the third quarter of 2004. We continue to believe that the DEM integration will enable us to generate incremental profits throughout 2004 and an ongoing $40-45 million operating income from the acquisition beginning in 2005.”
The company also announced changes to the membership of its board of directors. Effective July 20, Arthur Davis and Marilyn Fife Cragin retired and have been replaced by Peter Sills and Richard Ward.
“We sincerely thank Art and Marilyn for their years of service and excellent contributions to the growth of the company,” said Sills. “We now welcome Peter to the board, where his knowledge of the company and his legal background will be an excellent asset. Finally, we are pleased to announce that Richard Ward has joined our board. Dick served as general counsel, executive vice president, and corporate secretary of ITT Corp., and he will bring an added dimension to our board. Six of our nine board members are now independent, with three from the founding family.”
The company’s 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 Sept. 1 to stockholders of record on August 13.
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