☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
New York
|
|
11-1362020
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
37-18 Northern Blvd., Long Island City, New York
|
|
11101
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $2.00 per share
|
SMP
|
New York Stock Exchange LLC
|
|
Large Accelerated Filer ☑
|
Accelerated Filer ☐
|
|
Non-Accelerated Filer ☐
|
Smaller reporting company ☐
|
|
Emerging growth company ☐
|
|
|
Page No.
|
|
Item 1.
|
Consolidated Financial Statements:
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
Item 2.
|
23
|
|
Item 3.
|
32
|
|
Item 4.
|
33
|
PART II – OTHER INFORMATION
|
||
|
|
|
Item 1.
|
34
|
|
|
|
|
Item 2.
|
34
|
|
Item 6.
|
35
|
|
|
|
|
36
|
ITEM 1. |
CONSOLIDATED FINANCIAL STATEMENTS
|
(In thousands, except share and per share data)
|
Three Months Ended
March 31,
|
|||||||
|
2021
|
2020
|
||||||
|
(Unaudited)
|
|||||||
|
||||||||
Net sales
|
$
|
276,553
|
$
|
254,302
|
||||
Cost of sales
|
192,769
|
183,907
|
||||||
Gross profit
|
83,784
|
70,395
|
||||||
Selling, general and administrative expenses
|
54,460
|
55,873
|
||||||
Restructuring and integration expenses
|
—
|
205
|
||||||
Other income, net
|
—
|
6
|
||||||
Operating income
|
29,324
|
14,323
|
||||||
Other non-operating income (expense), net
|
635
|
(524
|
)
|
|||||
Interest expense
|
209
|
873
|
||||||
Earnings from continuing operations before taxes
|
29,750
|
12,926
|
||||||
Provision for income taxes
|
7,586
|
3,305
|
||||||
Earnings from continuing operations
|
22,164
|
9,621
|
||||||
Loss from discontinued operations, net of income taxes
|
(1,164
|
)
|
(994
|
)
|
||||
Net earnings
|
$
|
21,000
|
$
|
8,627
|
||||
Per Share Data:
|
||||||||
Net earnings per common share – Basic:
|
||||||||
Earnings from continuing operations
|
$
|
0.99
|
$
|
0.43
|
||||
Discontinued operations
|
(0.05
|
)
|
(0.05
|
)
|
||||
Net earnings per common share – Basic
|
$
|
0.94
|
$
|
0.38
|
||||
Net earnings per common share – Diluted:
|
||||||||
Earnings from continuing operations
|
$
|
0.97
|
$
|
0.42
|
||||
Discontinued operations
|
(0.05
|
)
|
(0.04
|
)
|
||||
Net earnings per common share – Diluted
|
$
|
0.92
|
$
|
0.38
|
||||
Dividend declared per share
|
$
|
0.25
|
$
|
0.25
|
||||
Average number of common shares
|
22,317,959
|
22,438,087
|
||||||
Average number of common shares and dilutive common shares
|
22,765,508
|
22,868,975
|
|
Three Months Ended,
March 31,
|
|||||||
(In thousands)
|
2021
|
2020
|
||||||
|
(Unaudited)
|
|||||||
|
||||||||
Net earnings
|
$
|
21,000
|
$
|
8,627
|
||||
Other comprehensive income (loss), net of tax:
|
||||||||
Foreign currency translation adjustments
|
(1,916
|
)
|
(6,301
|
)
|
||||
Pension and postretirement plans
|
(5
|
)
|
(4
|
)
|
||||
Total other comprehensive income, net of tax
|
(1,921
|
)
|
(6,305
|
)
|
||||
Comprehensive income
|
$
|
19,079
|
$
|
2,322
|
(In thousands, except share and per share data)
|
March 31,
2021
|
December 31,
2020
|
||||||
|
(Unaudited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
17,100
|
$
|
19,488
|
||||
Accounts receivable, less allowances for discounts and doubtful accounts of $5,744 and $5,822 for 2021 and 2020, respectively
|
174,104
|
198,039
|
||||||
Inventories
|
390,896
|
345,502
|
||||||
Unreturned customer inventories
|
21,088
|
19,632
|
||||||
Prepaid expenses and other current assets
|
13,848
|
15,875
|
||||||
Total current assets
|
617,036
|
598,536
|
||||||
|
||||||||
Property, plant and equipment, net of accumulated depreciation of $217,278 and $214,394 for 2021 and 2020, respectively
|
88,563
|
89,105
|
||||||
Operating lease right-of-use assets
|
31,453
|
29,958
|
||||||
Goodwill
|
77,838
|
77,837
|
||||||
Other intangibles, net
|
52,803
|
54,004
|
||||||
Deferred income taxes
|
43,692
|
44,770
|
||||||
Investments in unconsolidated affiliates
|
40,684
|
40,507
|
||||||
Other assets
|
24,413
|
21,823
|
||||||
Total assets
|
$
|
976,482
|
$
|
956,540
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Notes payable
|
$
|
40,967
|
$
|
10,000
|
||||
Current portion of other debt
|
1,523
|
135
|
||||||
Accounts payable
|
108,536
|
100,018
|
||||||
Sundry payables and accrued expenses
|
36,712
|
47,078
|
||||||
Accrued customer returns
|
44,729
|
40,982
|
||||||
Accrued core liability
|
22,569
|
22,014
|
||||||
Accrued rebates
|
39,294
|
46,437
|
||||||
Payroll and commissions
|
19,094
|
35,938
|
||||||
Total current liabilities
|
313,424
|
302,602
|
||||||
Long-term debt
|
84
|
97
|
||||||
Noncurrent operating lease liabilities
|
23,890
|
22,450
|
||||||
Other accrued liabilities
|
27,514
|
25,929
|
||||||
Accrued asbestos liabilities
|
54,630
|
55,226
|
||||||
Total liabilities
|
419,542
|
406,304
|
||||||
Commitments and contingencies
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Common stock – par value $2.00 per share:
|
||||||||
Authorized – 30,000,000 shares; issued 23,936,036 shares
|
47,872
|
47,872
|
||||||
Capital in excess of par value
|
106,366
|
105,084
|
||||||
Retained earnings
|
479,024
|
463,612
|
||||||
Accumulated other comprehensive income
|
(7,597
|
)
|
(5,676
|
)
|
||||
Treasury stock – at cost (1,763,886 shares and 1,586,923 shares in 2021 and 2020, respectively)
|
(68,725
|
)
|
(60,656
|
)
|
||||
Total stockholders’ equity
|
556,940
|
550,236
|
||||||
Total liabilities and stockholders’ equity
|
$
|
976,482
|
$
|
956,540
|
(In thousands)
|
Three Months Ended
March 31,
|
|||||||
|
2021
|
2020
|
||||||
|
(Unaudited)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net earnings
|
$
|
21,000
|
$
|
8,627
|
||||
Adjustments to reconcile net earnings to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
6,514
|
6,539
|
||||||
Amortization of deferred financing cost
|
57
|
57
|
||||||
Increase to allowance for doubtful accounts
|
81
|
299
|
||||||
Increase to inventory reserves
|
47
|
1,403
|
||||||
Equity income from joint ventures
|
(363
|
)
|
(6
|
)
|
||||
Employee stock ownership plan allocation
|
628
|
575
|
||||||
Stock-based compensation
|
1,796
|
2,103
|
||||||
Decrease in deferred income taxes
|
1,065
|
609
|
||||||
Loss on discontinued operations, net of tax
|
1,164
|
994
|
||||||
Change in assets and liabilities:
|
||||||||
(Increase) decrease in accounts receivable
|
23,533
|
(28,114
|
)
|
|||||
Increase in inventories
|
(46,255
|
)
|
(5,339
|
)
|
||||
Decrease in prepaid expenses and other current assets
|
3,753
|
1,303
|
||||||
Increase (decrease) in accounts payable
|
8,419
|
(11,883
|
)
|
|||||
Decrease in sundry payables and accrued expenses
|
(29,549
|
)
|
(7,251
|
)
|
||||
Net changes in other assets and liabilities
|
(3,288
|
)
|
(2,705
|
)
|
||||
Net cash used in operating activities
|
(11,398
|
)
|
(32,789
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Acquisitions of and investments in businesses
|
(2,081
|
)
|
—
|
|||||
Capital expenditures
|
(4,966
|
)
|
(4,422
|
)
|
||||
Other investing activities
|
2
|
6
|
||||||
Net cash used in investing activities
|
(7,045
|
)
|
(4,416
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net borrowings under line-of-credit agreements
|
30,968
|
52,540
|
||||||
Net borrowings of other debt and capital lease obligations
|
1,440
|
528
|
||||||
Purchase of treasury stock
|
(11,096
|
)
|
(8,726
|
)
|
||||
Increase in overdraft balances
|
373
|
1,248
|
||||||
Dividends paid
|
(5,588
|
)
|
(5,615
|
)
|
||||
Net cash provided by financing activities
|
16,097
|
39,975
|
||||||
Effect of exchange rate changes on cash
|
(42
|
)
|
126
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(2,388
|
)
|
2,896
|
|||||
CASH AND CASH EQUIVALENTS at beginning of period
|
19,488
|
10,372
|
||||||
CASH AND CASH EQUIVALENTS at end of period
|
$
|
17,100
|
$
|
13,268
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
147
|
$
|
811
|
||||
Income taxes
|
$
|
1,666
|
$
|
937
|
|
Common
Stock
|
Capital in
Excess of
Par Value
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury
Stock
|
Total
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Balance at December 31, 2020
|
$
|
47,872
|
$
|
105,084
|
$
|
463,612
|
$
|
(5,676
|
)
|
$
|
(60,656
|
)
|
$
|
550,236
|
||||||||||
Net earnings
|
—
|
—
|
21,000
|
—
|
—
|
21,000
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(1,921
|
)
|
—
|
(1,921
|
)
|
||||||||||||||||
Cash dividends paid
|
—
|
—
|
(5,588
|
)
|
—
|
—
|
(5,588
|
)
|
||||||||||||||||
Purchase of treasury stock
|
—
|
—
|
—
|
—
|
(11,096
|
)
|
(11,096
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
1,148
|
—
|
—
|
648
|
1,796
|
||||||||||||||||||
Employee Stock Ownership Plan
|
—
|
134
|
—
|
—
|
2,379
|
2,513
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balance at March 31, 2021
|
$
|
47,872
|
$
|
106,366
|
$
|
479,024
|
$
|
(7,597
|
)
|
$
|
(68,725
|
)
|
$
|
556,940
|
|
Common
Stock
|
Capital in
Excess of
Par Value
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury
Stock
|
Total
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Balance at December 31, 2019
|
$
|
47,872
|
$
|
102,742
|
$
|
417,437
|
$
|
(8,589
|
)
|
$
|
(55,234
|
)
|
$
|
504,228
|
||||||||||
Net earnings
|
—
|
—
|
8,627
|
—
|
—
|
8,627
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(6,305
|
)
|
—
|
(6,305
|
)
|
||||||||||||||||
Cash dividends paid
|
—
|
—
|
(5,615
|
)
|
—
|
—
|
(5,615
|
)
|
||||||||||||||||
Purchase of treasury stock
|
—
|
—
|
—
|
—
|
(8,726
|
)
|
(8,726
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
873
|
—
|
—
|
1,230
|
2,103
|
||||||||||||||||||
Employee Stock Ownership Plan
|
—
|
630
|
—
|
—
|
1,671
|
2,301
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balance at March 31, 2020
|
$
|
47,872
|
$
|
104,245
|
$
|
420,449
|
$
|
(14,894
|
)
|
$
|
(61,059
|
)
|
$
|
496,613
|
Standard
|
|
Description
|
|
Date of
adoption
|
|
Effects on the financial
statements or other significant
matters
|
|
||||||
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
|
|
This standard is intended to simplify the accounting for income taxes by removing certain ASC Topic 740 exceptions in performing intra-period tax allocations among income statement components, in calculating certain deferred tax liabilities related to outside basis differences, and in calculating income taxes in interim periods with year-to-date losses. In addition, this standard is also intended to improve consistency and add simplification by clarifying and amending the reporting of franchise taxes and other taxes partially based on income, the recognition of deferred income taxes related to the step-up in tax basis goodwill, and the reporting in interim periods of the recognition of the enactment of tax laws or rate changes.
|
|
January 1, 2021
|
|
The adoption of the technical clarifications in the standard did not materially impact our accounting for income taxes, our consolidated financial statements and related disclosures.
|
Standard
|
|
Description
|
|
Date of
adoption /
Effective
Date
|
|
Effects on the financial
statements or other
significant matters
|
|
||||||
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
|
|
This standard is intended to provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The new standard is applicable to contracts that reference LIBOR, or another reference rate, expected to be discontinued due to reference rate reform.
|
|
Effective March 12, 2020 through December 31, 2022
|
|
The new standard may be applied as of the beginning of an interim period that includes March 12, 2020 through December 31, 2022. As certain of our contracts reference LIBOR, including our revolving credit facility and supply chain financing arrangements, we are currently reviewing the optional guidance in the standard to determine its impact upon the discontinuance of LIBOR. At this time, we do not believe that the new guidance, nor the discontinuance of LIBOR, will have a material impact on our consolidated financial statements and related disclosures.
|
Purchase Price
|
$
|
2,138
|
||||||
Assets acquired and liabilities assumed:
|
||||||||
Inventory
|
$
|
1,032
|
||||||
Machinery and equipment, net
|
351
|
|||||||
Intangible assets
|
755
|
|||||||
Net assets acquired
|
$
|
2,138
|
|
Workforce
Reduction
|
Other Exit
Costs
|
Total
|
|||||||||
Exit activity liability at December 31, 2020
|
$
|
179
|
$
|
—
|
$
|
179
|
||||||
Restructuring and integration costs:
|
||||||||||||
Amounts provided for during 2021
|
—
|
—
|
—
|
|||||||||
Cash payments
|
(49
|
)
|
—
|
(49
|
)
|
|||||||
Exit activity liability at March 31, 2021
|
$
|
130
|
$
|
—
|
$
|
130
|
|
March 31,
2021
|
December 31,
2020
|
||||||
|
(In thousands)
|
|||||||
Finished goods
|
$
|
259,847
|
$
|
225,523
|
||||
Work in process
|
11,639
|
10,711
|
||||||
Raw materials
|
119,410
|
109,268
|
||||||
Subtotal
|
390,896
|
345,502
|
||||||
Unreturned customer inventories
|
21,088
|
19,632
|
||||||
Total inventories
|
$
|
411,984
|
$
|
365,134
|
|
March 31,
2021
|
December 31,
2020
|
||||||
|
(In thousands)
|
|||||||
Customer relationships
|
$
|
112,440
|
$
|
111,701
|
||||
Trademarks and trade names
|
6,980
|
6,980
|
||||||
Non-compete agreements
|
3,270
|
3,272
|
||||||
Patents
|
723
|
723
|
||||||
Supply agreements
|
800
|
800
|
||||||
Leaseholds
|
160
|
160
|
||||||
Total acquired intangible assets
|
124,373
|
123,636
|
||||||
Less accumulated amortization (1)
|
(72,272
|
)
|
(70,221
|
)
|
||||
Net acquired intangible assets
|
$
|
52,101
|
$
|
53,415
|
(1) |
Applies to all intangible assets, except for trademarks and trade names totaling $2.6 million, which have indefinite useful lives and, as such, are not being amortized.
|
Balance Sheet Information
|
March 31,
2021
|
December 31,
2020
|
||||||
Assets
|
||||||||
Operating lease right-of-use assets
|
$
|
31,453
|
$
|
29,958
|
||||
|
||||||||
Liabilities
|
||||||||
Sundry payables and accrued expenses
|
$
|
8,822
|
$
|
8,719
|
||||
Noncurrent operating lease liabilities
|
23,890
|
22,450
|
||||||
Total operating lease liabilities
|
$
|
32,712
|
$
|
31,169
|
||||
|
||||||||
Weighted Average Remaining Lease Term
|
||||||||
Operating leases
|
5 Years
|
5 Years
|
||||||
|
||||||||
Weighted Average Discount Rate
|
||||||||
Operating leases
|
3.4
|
%
|
3.6
|
%
|
Expense and Cash Flow Information
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Lease Expense
|
||||||||
Operating lease expense (a)
|
$
|
2,336
|
$
|
2,313
|
||||
Supplemental Cash Flow Information
|
||||||||
Cash paid for the amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$
|
2,302
|
$
|
2,476
|
||||
Right-of-use assets obtained in exchange for new lease obligations:
|
||||||||
Operating leases
|
$
|
3,603
|
$
|
251
|
(a) |
Excludes expenses of approximately $0.7 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively, related to non-lease components such as maintenance, property taxes, etc., and operating lease expense for leases with an initial term of 12 months or less, which is not material.
|
2021
|
$
|
6,853
|
||
2022
|
7,940
|
|||
2023
|
6,468
|
|||
2024
|
4,416
|
|||
2025
|
3,364
|
|||
Thereafter
|
6,084
|
|||
Total lease payments
|
$
|
35,125
|
||
Less: Interest
|
(2,413
|
)
|
||
Present value of lease liabilities
|
$
|
32,712
|
|
March 31,
2021
|
December 31,
2020
|
||||||
|
(In thousands)
|
|||||||
Revolving credit facilities
|
$
|
40,967
|
$
|
10,000
|
||||
Other (1)
|
1,607
|
232
|
||||||
Total debt
|
$
|
42,574
|
$
|
10,232
|
||||
|
||||||||
Current maturities of debt
|
$
|
42,490
|
$
|
10,135
|
||||
Long-term debt
|
84
|
97
|
||||||
Total debt
|
$
|
42,574
|
$
|
10,232
|
(1) |
Other includes borrowings under our Polish overdraft facility of Zloty 5.9 million (approximately $1.5 million) and Zloty 0.4 million (approximately $0.1 million) as of March 31, 2021 and December 31, 2020, respectively.
|
|
Shares
|
Weighted Average
Grant Date Fair
Value Per Share
|
||||||
Balance at December 31, 2020
|
839,686
|
$
|
34.77
|
|||||
Granted
|
—
|
—
|
||||||
Vested
|
(16,863
|
)
|
33.47
|
|||||
Forfeited
|
(3,825
|
)
|
40.27
|
|||||
Balance at March 31, 2021
|
818,998
|
$
|
34.77
|
|
Three Months Ended
March 31,
|
|||||||
Basic Net Earnings Per Common Share:
|
2021
|
2020
|
||||||
Earnings from continuing operations
|
$
|
22,164
|
$
|
9,621
|
||||
Loss from discontinued operations
|
(1,164
|
)
|
(994
|
)
|
||||
Net earnings available to common stockholders
|
$
|
21,000
|
$
|
8,627
|
||||
|
||||||||
Weighted average common shares outstanding
|
22,318
|
22,438
|
||||||
|
||||||||
Earnings from continuing operations per common share
|
$
|
0.99
|
$
|
0.43
|
||||
Loss from discontinued operations per common share
|
(0.05
|
)
|
(0.05
|
)
|
||||
Basic net earnings per common share
|
$
|
0.94
|
$
|
0.38
|
||||
|
||||||||
Diluted Net Earnings Per Common Share:
|
||||||||
Earnings from continuing operations
|
$
|
22,164
|
$
|
9,621
|
||||
Loss from discontinued operations
|
(1,164
|
)
|
(994
|
)
|
||||
Net earnings available to common stockholders
|
$
|
21,000
|
$
|
8,627
|
||||
|
||||||||
Weighted average common shares outstanding
|
22,318
|
22,438
|
||||||
Plus incremental shares from assumed conversions:
|
||||||||
Dilutive effect of restricted stock and performance stock
|
448
|
431
|
||||||
Weighted average common shares outstanding – Diluted
|
22,766
|
22,869
|
||||||
|
||||||||
Earnings from continuing operations per common share
|
$
|
0.97
|
$
|
0.42
|
||||
Loss from discontinued operations per common share
|
(0.05
|
)
|
(0.04
|
)
|
||||
Diluted net earnings per common share
|
$
|
0.92
|
$
|
0.38
|
|
Three Months Ended
March 31,
|
|||||||
|
2021
|
2020
|
||||||
Restricted and performance shares
|
272
|
253
|
|
Three Months Ended
March 31,
|
|||||||
|
2021
|
2020
|
||||||
Net Sales (a)
|
||||||||
Engine Management
|
$
|
212,018
|
$
|
201,118
|
||||
Temperature Control
|
62,473
|
51,442
|
||||||
All Other
|
2,062
|
1,742
|
||||||
Consolidated
|
$
|
276,553
|
$
|
254,302
|
||||
|
||||||||
Intersegment Revenue (a)
|
||||||||
Engine Management
|
$
|
5,359
|
$
|
4,014
|
||||
Temperature Control
|
1,847
|
1,391
|
||||||
All Other
|
(7,206
|
)
|
(5,405
|
)
|
||||
Consolidated
|
$
|
—
|
$
|
—
|
||||
|
||||||||
Operating Income (Loss)
|
||||||||
Engine Management
|
$
|
31,114
|
$
|
21,433
|
||||
Temperature Control
|
3,592
|
(348
|
)
|
|||||
All Other
|
(5,382
|
)
|
(6,762
|
)
|
||||
Consolidated
|
$
|
29,324
|
$
|
14,323
|
(a) |
Segment net sales include intersegment sales in our Engine Management and Temperature Control segments.
|
Three months ended March 31, 2021 (a)
|
Engine
Management
|
Temperature
Control
|
Other (b)
|
Total
|
||||||||||||
Geographic Area:
|
||||||||||||||||
United States
|
$
|
181,101
|
$
|
58,736
|
$
|
—
|
$
|
239,837
|
||||||||
Canada
|
8,574
|
3,326
|
2,062
|
13,962
|
||||||||||||
Asia
|
9,635
|
76
|
—
|
9,711
|
||||||||||||
Mexico
|
6,147
|
65
|
—
|
6,212
|
||||||||||||
Europe
|
5,149
|
56
|
—
|
5,205
|
||||||||||||
Other foreign
|
1,412
|
214
|
—
|
1,626
|
||||||||||||
Total
|
$
|
212,018
|
$
|
62,473
|
$
|
2,062
|
$
|
276,553
|
||||||||
Major Product Group:
|
||||||||||||||||
Ignition, emission control, fuel and safety related system products
|
$
|
173,666
|
$
|
—
|
$
|
1,669
|
$
|
175,335
|
||||||||
Wire and cable
|
38,352
|
—
|
7
|
38,359
|
||||||||||||
Compressors
|
—
|
33,374
|
18
|
33,392
|
||||||||||||
Other climate control parts
|
—
|
29,099
|
368
|
29,467
|
||||||||||||
Total
|
$
|
212,018
|
$
|
62,473
|
$
|
2,062
|
$
|
276,553
|
||||||||
Major Sales Channel:
|
||||||||||||||||
Aftermarket
|
$
|
166,843
|
$
|
55,685
|
$
|
2,062
|
$
|
224,590
|
||||||||
OE/OES
|
38,835
|
6,380
|
—
|
45,215
|
||||||||||||
Export
|
6,340
|
408
|
—
|
6,748
|
||||||||||||
Total
|
$
|
212,018
|
$
|
62,473
|
$
|
2,062
|
$
|
276,553
|
Three months ended March 31, 2020 (a)
|
Engine
Management
|
Temperature
Control
|
Other (b)
|
Total
|
||||||||||||
Geographic Area:
|
||||||||||||||||
United States
|
$
|
174,379
|
$
|
47,876
|
$
|
—
|
$
|
222,255
|
||||||||
Canada
|
6,589
|
3,141
|
1,742
|
11,472
|
||||||||||||
Asia
|
9,459
|
95
|
—
|
9,554
|
||||||||||||
Mexico
|
6,114
|
59
|
—
|
6,173
|
||||||||||||
Europe
|
3,348
|
123
|
—
|
3,471
|
||||||||||||
Other foreign
|
1,229
|
148
|
—
|
1,377
|
||||||||||||
Total
|
$
|
201,118
|
$
|
51,442
|
$
|
1,742
|
$
|
254,302
|
||||||||
Major Product Group:
|
||||||||||||||||
Ignition, emission control, fuel and safety related system products
|
$
|
164,526
|
$
|
—
|
$
|
1,484
|
$
|
166,010
|
||||||||
Wire and cable
|
36,592
|
—
|
(22
|
)
|
36,570
|
|||||||||||
Compressors
|
—
|
25,348
|
(142
|
)
|
25,206
|
|||||||||||
Other climate control parts
|
—
|
26,094
|
422
|
26,516
|
||||||||||||
Total
|
$
|
201,118
|
$
|
51,442
|
$
|
1,742
|
$
|
254,302
|
||||||||
Major Sales Channel:
|
||||||||||||||||
Aftermarket
|
$
|
160,583
|
$
|
44,394
|
$
|
1,742
|
$
|
206,719
|
||||||||
OE/OES
|
35,120
|
6,779
|
—
|
41,899
|
||||||||||||
Export
|
5,415
|
269
|
—
|
5,684
|
||||||||||||
Total
|
$
|
201,118
|
$
|
51,442
|
$
|
1,742
|
$
|
254,302
|
(a) |
Segment net sales include intersegment sales in our Engine Management and Temperature Control segments.
|
(b) |
Other consists of the elimination of intersegment sales from our Engine Management and Temperature Control segments as well as sales from our Canadian business unit that does not meet the criteria of a reportable operating segment. Intersegment wire and cable and compressor sales for the three months ended March 31, 2020 exceeded third party sales from our Canadian business unit.
|
|
Three Months Ended
March 31,
|
|||||||
|
2021
|
2020
|
||||||
|
||||||||
Balance, beginning of period
|
$
|
17,663
|
$
|
17,175
|
||||
Liabilities accrued for current year sales
|
20,177
|
22,067
|
||||||
Settlements of warranty claims
|
(20,892
|
)
|
(22,010
|
)
|
||||
Balance, end of period
|
$
|
16,948
|
$
|
17,232
|
ITEM 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended March 31,
|
|||||||
2021
|
2020
|
|||||||
Engine Management:
|
||||||||
Ignition, Emission Control, Fuel and Safety Related System Products
|
$
|
173,666
|
$
|
164,526
|
||||
Wire and Cable
|
38,352
|
36,592
|
||||||
Total Engine Management
|
212,018
|
201,118
|
||||||
Temperature Control:
|
||||||||
Compressors
|
33,374
|
25,348
|
||||||
Other Climate Control Parts
|
29,099
|
26,094
|
||||||
Total Temperature Control
|
62,473
|
51,442
|
||||||
All Other
|
2,062
|
1,742
|
||||||
Total
|
$
|
276,553
|
$
|
254,302
|
Three Months Ended
March 31,
|
Engine
Management
|
Temperature
Control
|
Other
|
Total
|
||||||||||||
2021
|
||||||||||||||||
Net sales
|
$
|
212,018
|
$
|
62,473
|
$
|
2,062
|
$
|
276,553
|
||||||||
Gross margins
|
65,070
|
15,995
|
2,719
|
83,784
|
||||||||||||
Gross margin percentage
|
30.7
|
%
|
25.6
|
%
|
—
|
30.3
|
%
|
|||||||||
2020
|
||||||||||||||||
Net sales
|
$
|
201,118
|
$
|
51,442
|
$
|
1,742
|
$
|
254,302
|
||||||||
Gross margins
|
56,705
|
12,096
|
1,594
|
70,395
|
||||||||||||
Gross margin percentage
|
28.2
|
%
|
23.5
|
%
|
—
|
27.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
(In thousands)
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
2025
|
|
|
|
2026-
2028
|
|
|
Total
|
|
||||||
Operating lease obligations
|
|
$
|
6,853
|
|
|
$
|
7,940
|
|
|
$
|
6,468
|
|
|
$
|
4,416
|
|
|
$
|
3,364
|
|
|
$
|
6,084
|
|
|
$
|
35,125
|
|
Postretirement benefits
|
|
|
24
|
|
|
|
29
|
|
|
|
25
|
|
|
|
25
|
|
|
|
25
|
|
|
|
25
|
|
|
|
153
|
|
Severance payments related to restructuring and integration
|
|
|
89
|
|
|
|
40
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
130
|
|
Total commitments
|
|
$
|
6,966
|
|
|
$
|
8,009
|
|
|
$
|
6,494
|
|
|
$
|
4,441
|
|
|
$
|
3,389
|
|
|
$
|
6,109
|
|
|
$
|
35,408
|
|
(a) |
Indebtedness under our revolving credit facility is not included in the table above as it is reported as a current liability in our consolidated balance sheets. As of March 31, 2021, amounts outstanding under our revolving credit facilities were $41 million.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
(a) |
Evaluation of Disclosure Controls and Procedures.
|
(b) |
Changes in Internal Control Over Financial Reporting.
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of
Shares Purchased
(1)
|
Average
Price Paid
Per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (2) (3)
|
Maximum Number (or
Approximate Dollar
Value) of Shares that
may yet be Purchased
Under the Plans or
Programs (2) (3)
|
||||||||||||
January 1 – 31, 2021
|
—
|
$
|
—
|
—
|
$
|
—
|
||||||||||
February 1 – 28, 2021
|
30,000
|
41.67
|
30,000
|
25,268,015
|
||||||||||||
March 1 – 31, 2021
|
225,626
|
43.64
|
255,626
|
15,421,824
|
||||||||||||
Total
|
255,626
|
$
|
43.41
|
255,626
|
$
|
15,421,824
|
(1) |
All shares were purchased through the publicly announced stock repurchase programs in open-market transactions.
|
(2) |
In March 2020, our Board of Directors authorized the purchase of up to $20 million of our common stock under a stock repurchase program. As of December 31, 2020, there was approximately $6.5 million available for future stock purchases under the program. During the three months ended March 31, 2021, we repurchased 150,273 shares of our common stock at a total cost of $6.5 million, thereby completing the 2020 Board of Directors authorization.
|
(3) |
In February 2021, our Board of Directors authorized the purchase of up to an additional $20 million of our common stock under a new stock repurchase program. Stock will be purchased from time to time, in the open market or through private transactions, as market conditions warrant. Under this program, during the three months ended March 31, 2021, we repurchased 105,353 shares of our common stock at a total cost of $4.6 million. As of March 31, 2021, there was approximately $15.4 million available for future stock purchases under the program. There have been no additional common stock repurchases under the program.
|
ITEM 6. |
EXHIBITS
|
Exhibit
Number
|
|
|
|
|
|
31.1
|
||
31.2
|
||
32.1
|
||
32.2
|
||
101.INS**
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
|
101.SCH**
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
101.CAL**
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.LAB**
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE**
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
101.DEF**
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
STANDARD MOTOR PRODUCTS, INC.
|
|
(Registrant)
|
|
|
Date: May 6, 2021
|
/s/ Nathan R. Iles
|
|
Nathan R. Iles
|
|
Chief Financial Officer
|
|
(Principal Financial and
|
|
Accounting Officer)
|
1.
|
I have reviewed this report on Form 10-Q of Standard Motor Products, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
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b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 6, 2021
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/s/ Eric P. Sills
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Eric P. Sills
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Chief Executive Officer and President
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1. |
I have reviewed this report on Form 10-Q of Standard Motor Products, Inc.;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
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d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
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b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 6, 2021
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||
/s/ Nathan R. Iles
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Nathan R. Iles
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||
Chief Financial Officer
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(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Eric P. Sills
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Eric P. Sills
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Chief Executive Officer and President
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May 6, 2021
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*
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A signed original of this written statement required by Section 906 has been provided to Standard Motor Products, Inc. and will be retained by Standard
Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Nathan R. Iles
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Nathan R. Iles
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|
Chief Financial Officer
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May 6, 2021
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*
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A signed original of this written statement required by Section 906 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.
|