Standard Motor Products Inc. Reports Operating Results (10-Q)
Standard Motor Products Inc. has a market cap of $221.3 million; its shares were traded at around $9.8 with a P/E ratio of 13.9 and P/S ratio of 0.4. The dividend yield of Standard Motor Products Inc. stocks is 2%.SMP is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:Sales. Consolidated net sales for the three months ended March 31, 2010 were $179.4 million, an increase of $7.2 million, or 4.1%, compared to $172.2 million in the same period of 2009. The increase in net sales is primarily from increases in sales in our Engine Management Segment, offset by a $6.7 million decrease related to the sale of our European distribution business.
Engine Management s net sales increased $12.8 million, or 10.3%, to $137.1 million for the first quarter of 2010. The sales growth was driven by stronger sales across all markets including a rebound in the OE/OES markets, which were down significantly in 2009. In addition, incremental sales from our acquisition of Federal Mogul s wire and cable business, which began shipping in September 2009, contributed to the increase in our traditional sales volumes.
Selling, general and administrative expenses. Selling, general and administrative expenses (SG&A) increased by $0.7 million to $36.7 million or 20.4% of consolidated net sales, in the first quarter of 2010, as compared to $36 million, or 20.9% of consolidated net sales in the first quarter of 2009. The increase in SG&A expenses is due primarily to an incremental increase in distribution expenses as a result of higher sales volumes and an increase in expense related to our customer accounts receivable factoring program.
Operating income. Operating income was $6.4 million in the first quarter of 2010, compared to $3.7 million in the first quarter of 2009. The increase of $2.7 million was primarily due to the higher net sales in our Engine Management Segment and an increase in gross margins in our Temperature Control Segment, partially offset by the impact of the divestiture of our European distribution business.
Other income, net. Other income, net increased to $0.4 million in the first quarter of 2010 compared to $0.1 million in the same period in 2009. Other income, net included a $0.2 million gain on the sale of vacant land at one of our locations in the U.K.
During 2008 as part of an initiative to improve the effectiveness and efficiency of operations, and to reduce costs in light of economic conditions, we implemented certain organizational changes and offered eligible employees a voluntary separation package. The restructuring accrual relates to severance and other retiree benefit enhancements to be paid through 2015. Of the original restructuring charge of $8 million, we have $2.8 million remaining as of March 31, 2010 that is expected to be paid in the amount of $1.2 million in 2010, $0.6 million in 2011, and $1 million for the period 2012-2015.
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