Standard Motor Products, Inc. released its consolidated financial results for the fourth quarter and full year ending December 31, 2023. The company reported fourth-quarter net sales of $290.8 million, compared to $308.2 million in the same period in 2022. Earnings from continuing operations for the quarter were $7.2 million or $0.32 per diluted share, down from $8.5 million or $0.39 per diluted share in Q4 2022. Excluding non-operational gains and losses, earnings were $8.2 million or $0.37 per diluted share, compared to $15.1 million or $0.69 per diluted share in the previous year.
For the full year, consolidated net sales were $1.36 billion, slightly down from $1.37 billion in 2022. Earnings from continuing operations were $63.1 million or $2.85 per diluted share, compared to $73.0 million or $3.30 per diluted share in 2022. Excluding non-operational gains and losses, earnings for both years were $64.8 million or $2.92 per diluted share and $79.4 million or $3.59 per diluted share, respectively.
“Overall we were disappointed in our results. Sales were down 1% in 2023, with the fourth quarter finishing softer than expected, down 5.7% from last year,” said Standard Motor Products’ Chairman and CEO Eric Sills. “As we look at our two end markets, we were very pleased with the continued solid performance in our Engineered Solutions business as we experienced strong growth with both new and existing customers. Meanwhile, our aftermarket business experienced a challenging quarter, impacting our full-year performance especially when compared to records we set in 2022.”
SMP reported vehicle control sales declined by 5.9% in the fourth quarter and 1.7% for the full year compared to 2022. Temperature control sales faced challenges due to weather patterns, with a 3.8% decline for the full year. However, the engineered solutions segment posted strong numbers with a 6.7% increase in the fourth quarter and 4.7% for the year.
Consolidated operating profit for the full year, excluding non-operational gains and losses, finished at 7%, vs. 8.2% in 2022, and adjusted EBITDA was 9.3% for the year. The company reported lower sales volumes resulting in lower leverage of fixed costs, despite pricing actions and cost reduction initiatives to offset inflationary pressures.
SMP also reported initiatives to reduce inventory and borrowing levels, with year-end inventory at $507.1 million, down from $528.7 million in 2022. Total debt at year-end stood at $156.2 million after paying down $83.6 million in 2023.
Looking ahead to 2024, the company expects flat to low single-digit sales growth and an adjusted EBITDA range of 9% to 9.5%. The company anticipates additional costs related to the expansion of its distribution center in Shawnee, Kansas, and capital expenditures for upgraded automation capabilities.
“Although the economic backdrop and various geopolitical risks may continue to create volatility in 2024, we are confident in the resiliency of our end markets,” Sills said. “We are excited about the partial opening of our new distribution center in just a few months and full opening in 2025 that will expand our capacity and provide additional risk avoidance to our overall distribution footprint. We look to continue to find ways to even better service our customers as well as explore opportunities to partner together for growth in 2024 and well into the future. We thank our employees that make all of this possible.”
