Standard Motor Products (SMP) has reported its consolidated financial results for the three months and six months ending June 30, 2019.
Consolidated net sales for the second quarter of 2019 were $305.2 million, compared to consolidated net sales of $286.6 million during the comparable quarter in 2018. Earnings from continuing operations for the second quarter of 2019 were $20.6 million or 90 cents per diluted share, compared to $16.8 million or 73 cents per diluted share in the second quarter of 2018.
Excluding non-operational gains and losses, earnings from continuing operations for the second quarter of 2019 were $21 million or 92 cents per diluted share, compared to $17 million or 74 cents per diluted share in the second quarter of 2018.
Consolidated net sales for the six-month period ended June 30, 2019, were $588.9 million, compared to consolidated net sales of $548.5 million during the comparable period in 2018. Earnings from continuing operations for the six-month period were $33.7 million or $1.47 per diluted share, compared to $25.4 million or $1.11 per diluted share in the comparable period of 2018. Excluding non-operational gains and losses, earnings from continuing operations for the six months ended June 30, 2019, and 2018 were $34.1 million or $1.49 per diluted share and $27.5 million or $1.20 per diluted share, respectively.
Eric Sills, Standard Motor Products’ CEO and president, stated, “We are quite pleased with our second quarter, posting solid gains in sales, margins and earnings, with strong performance in both of our operating divisions. Engine Management sales were up approximately 7% for both the quarter and year-to-date. Excluding the wire and cable segment, Engine Management sales in the quarter increased almost 12%, or almost $20 million. The increase included three months of revenue from the Pollak acquisition, accounting for nearly $11 million.
“Excluding Pollak, our Engine Management business increased 5.3% for the quarter,” Sills noted. “The increase was attributable to a combination of strong demand in our OE business, which tends to be somewhat volatile, a benefit from pricing actions and tariffs, and low single digit organic growth.
Engine Management gross margin was up 0.9 points from last year, and 1.3 points from the first quarter, reflecting the company’s return to historic productivity in its Reynosa wire plant after the lengthy integration of the General Cable wire business. “This margin improvement also includes certain pricing actions offset by the adverse impact of tariffs being passed through to customers at our cost,” said SMP.
SMP’s Temperature Control sales were up 5% for the quarter and 9% year-to-date. According to Sills, April and May tend to reflect pre-season stocking activities, while June is the start of the summer selling season. “Although we are pleased with the quarter’s results, it was a slow start to summer heat nationwide,” Sills noted. “The third quarter will be critical to full-year performance, as 2018 was a very hot summer and a challenging comparison.”
Sills said Temperature Control gross margin improved 0.8 points in the quarter and, as with Engine Management, was dampened by tariffs being passed through to customers at the company’s cost. SMP also experienced improvements in its distribution expense as the company’s new warehouse automation in Lewisville is now fully implemented.
On April 1, SMP completed the acquisition of the Pollak business of Stoneridge Inc. Sills said the acquired business has “contributed quite nicely to our performance.”
“We will be relocating the acquired production lines to existing facilities over the course of the balance of the year, and expect significant savings once fully integrated and performing at full productivity some time in 2020. So far, we are pleased with what we have seen, and believe it will be an excellent fit for SMP. We acquired a profitable and stable business with an excellent customer base, and we believe that with our combined skills, we will be able to advance our goal of increasing our presence in the heavy-duty and commercial vehicle markets,” Sills added.
