Standard Motor Products, Inc. Announces Fourth Quarter and 2017 Year End Results

NEW YORK, Feb. 20, 2018

Consolidated net sales for the fourth quarter of 2017 were $240 million, compared to consolidated net sales of $229.8 million during the comparable quarter in 2016. Earnings (Loss) from continuing operations for the fourth quarter of 2017 were ($8.1) million or (36) cents per diluted share, compared to $8.8 million or 38 cents per diluted share in the fourth quarter of 2016. Excluding non-operational gains and losses and the impact of the Tax Cuts and Jobs Act identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the fourth quarter of 2017 were $12.4 million or 54 cents per diluted share, compared to $9.8 million or 42 cents per diluted share in the fourth quarter of 2016.

Consolidated net sales for 2017 were $1,116.1 million, compared to consolidated net sales of $1,058.5 million during the comparable period in 2016.  Earnings from continuing operations for 2017 were $43.6 million or $1.88 per diluted share, compared to $62.4 million or $2.70 per diluted share in 2016.  Excluding non-operational gains and losses and the impact of the Tax Cuts and Jobs Act identified on the attached reconciliation of GAAP and non-GAAP measures, earnings from continuing operations for the year ended December 31, 2017, and 2016 were $65.6 million or $2.83 per diluted share and $63.9 million or $2.77 per diluted share, respectively.

Mr. Eric P. Sills, Standard Motor Products' Chief Executive Officer and President stated, "We are pleased with our results in the fourth quarter, as both net sales and non-GAAP diluted earnings per share from continuing operations were ahead of the fourth quarter of 2016. For the year as a whole, comparable net sales and non-GAAP earnings were also ahead of the prior year, though results were negatively impacted by a mild Temperature Control season and the one-time costs of plant moves.

"Engine Management net sales were up 8.3% for the year. However, excluding the effect of the General Cable ignition wire acquisition—we acquired this business in May 2016, and thus we had the benefit of a full year sales in 2017 compared to seven months in 2016—Engine Management sales were up 3.3% in line with our long-term expectations. Temperature Control sales were down 1.6% for the year because of a cool summer. However, our customers experienced sales declines closer to 4%. We anticipate that this will lead to lower pre-season orders this year as they are entering 2018 with heavier than normal inventories.

"For the full year, our Engine Management gross margin fell nearly two points in 2017—from 31.3% in 2016 to 29.4% in 2017, primarily because of the cost of the plant moves, discussed below. Temperature Control gross margin, despite the lower sales, increased from 25.6% to 26.2%, as our operations in Reynosa, Mexico, and Foshan, China, continue to show improvement.

"Looking beyond the numbers, we are pleased that during 2017 we continued to make progress towards achieving our long-term strategic goals. We made strong strides in our ambitious programs of plant consolidations and relocations. We exited our factory in Grapevine, Texas, moving some of the operations to Greenville, South Carolina, and others to Reynosa, Mexico. We are closing our electronics facility in Orlando, Florida, and relocating it to Independence, Kansas. And as a result of the General Cable ignition wire acquisition, we are relocating their assembly operations from Nogales, Mexico, to our facility in Reynosa.