Standard Motor Products has a market cap of $285.6 million; its shares were traded at around $12.61 with a P/E ratio of 11.9 and P/S ratio of 0.3. The dividend yield of Standard Motor Products stocks is 2.2%.
Highlight of Business Operations:In 1986, we acquired a brake business, which we subsequently sold in March 1998 and which is accounted for as a discontinued operation in the accompanying consolidated financial statements. When we originally acquired this brake business, we assumed future liabilities relating to any alleged exposure to asbestos-containing products manufactured by the seller of the acquired brake business. In accordance with the related purchase agreement, we agreed to assume the liabilities for all new claims filed on or after September 1, 2001. Our ultimate exposure will depend upon the number of claims filed against us on or after September 1, 2001 and the amounts paid for indemnity and defense thereof. At December 31, 2010, approximately 1,540 cases were outstanding for which we may be held responsible for any related liabilities. Since inception in September 2001 through December 31, 2010, the amounts paid for settled claims are approximately $11.6 million. In September 2007, we entered into an agreement with an insurance carrier to provide us with limited insurance coverage for the defense and indemnity costs associated with certain asbestos-related claims. We have submitted various asbestos-related claims for coverage under this agreement, and received approximately $2.7 million in reimbursement for settlement claims and defense costs. In addition, in May 2010 we entered into an agreement with an excess insurance carrier to provide us with limited insurance coverage for defense and indemnity costs associated with asbestos-related claims. We have submitted claims to this carrier since we have exhausted our coverage under the agreement with the primary insurance carrier discussed above and have received $0.8 million in reimbursement for settlement claims and defense costs. See Note 19 of the notes to consolidated financial statements for further discussion.
Dividends are declared and paid on the common stock at the discretion of our board of directors and depend on our profitability, financial condition, capital needs, future prospects, and other factors deemed relevant by our board. After suspending our quarterly dividend for 2009, in January 2010 our board voted to reinstate our quarterly dividend, at a rate of $0.05 per share per quarter. In January 2011, our board voted to increase our quarterly dividend to a rate of $0.07 per share per quarter. Our revolving credit facility permits dividends and distributions by us provided specific conditions are met. See “Management s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” for a further discussion of our revolving credit facility.
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