STANDARD MOTOR PRODUCTS, INC. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>STANDARD MOTOR PRODUCTS, INC. filed its Q1 2024 10-Q report on May 1, 2024.</b>

AI Summary

STANDARD MOTOR PRODUCTS, INC. (SMP) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. STANDARD MOTOR PRODUCTS, INC. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's fiscal year ends on December 31st. Standard Motor Products, Inc. is incorporated in New York. The company's SIC code is 3714 for Motor Vehicle Parts & Accessories.

Why It Matters

For investors and stakeholders tracking STANDARD MOTOR PRODUCTS, INC., this filing contains several important signals. This 10-Q filing provides the latest financial and operational details for STANDARD MOTOR PRODUCTS, INC. for the first quarter of 2024, crucial for investors to assess performance and outlook. Understanding the company's financial health and strategic positioning through this report is vital for making informed investment decisions regarding SMP.

Risk Assessment

Risk Level: low — STANDARD MOTOR PRODUCTS, INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not indicate any immediate or significant financial distress or unusual events.

Analyst Insight

Monitor future 10-Q filings for trends in revenue, net income, and debt levels to assess the company's ongoing financial performance.

Key Numbers

• 2024-03-31 — Period End Date (Conformed Period of Report)
• 2024-05-01 — Filing Date (Filed as of Date)
• 1231 — Fiscal Year End (Fiscal Year End)
• 3714 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• STANDARD MOTOR PRODUCTS, INC. (company) — Filer name
• SMP (company) — Ticker symbol
• 2024-05-01 (date) — Filing date
• 2024-03-31 (date) — Period of report
• 3714 (industry_code) — Standard Industrial Classification
• NY (location) — State of incorporation
• 111362020 (tax_id) — IRS Number
• 37-18 NORTHERN BLVD. (address) — Business address

FAQ

Industry Context

Standard Motor Products, Inc. operates within the automotive aftermarket industry, supplying replacement parts for vehicles.

Regulatory Implications

The company is subject to standard SEC reporting requirements for publicly traded companies, including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

1. Review the full 10-Q filing for detailed financial statements and management discussion.
2. Analyze segment performance if detailed revenue breakdowns are provided in the full report.
3. Compare key financial metrics against previous quarters and the same quarter in the prior year.

Key Dates

• 2024-03-31: Quarterly Report End Date — Marks the end of the reporting period for the 10-Q filing.
• 2024-05-01: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the standard quarterly update for the period ending March 31, 2024, following previous filings for fiscal year 2023.

Key Financial Figures

• $2.00 — ich registered Common Stock, par value $2.00 per share SMP New York Stock Exchan

Filing Documents

• ef20026309_10q.htm (10-Q) — 1533KB
• ef20026309_ex31-1.htm (EX-31.1) — 11KB
• ef20026309_ex31-2.htm (EX-31.2) — 11KB
• ef20026309_ex32-1.htm (EX-32.1) — 5KB
• ef20026309_ex32-2.htm (EX-32.2) — 5KB
• 0001140361-24-023649.txt (&nbsp;) — 8420KB
• smp-20240331.xsd (EX-101.SCH) — 59KB
• smp-20240331_cal.xml (EX-101.CAL) — 97KB
• smp-20240331_def.xml (EX-101.DEF) — 299KB
• smp-20240331_lab.xml (EX-101.LAB) — 833KB
• smp-20240331_pre.xml (EX-101.PRE) — 483KB
• ef20026309_10q_htm.xml (XML) — 1340KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page No. Item 1. Consolidated Financial Statements: 3 Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2024 and 2023 3 Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2024 and 2023 4 Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 5 Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2024 and 2023 6 Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three Months Ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 38 Item 4.

Controls and Procedures

Controls and Procedures 39

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 6. Exhibits 41

Signatures

Signatures 42 2 Index

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, (In thousands, except share and per share data) 2024 2023 (Unaudited) Net sales $ 331,403 $ 328,028 Cost of sales 241,881 236,761 Gross profit 89,522 91,267 Selling, general and administrative expenses 74,733 69,633 Restructuring and integration expenses 192 912 Other income, net 22 24 Operating income 14,619 20,746 Other non-operating income, net 819 225 Interest expense 2,067 3,862 Earnings from continuing operations before income taxes 13,371 17,109 Provision for income taxes 3,342 4,372 Earnings from continuing operations 10,029 12,737 Loss from discontinued operations, net of income taxes ( 1,039 ) ( 780 ) Net earnings 8,990 11,957 Net earnings attributable to noncontrolling interest 166 39 Net earnings attributable to SMP (a) $ 8,824 $ 11,918 Net earnings attributable to SMP Earnings from continuing operations $ 9,863 $ 12,698 Discontinued operations ( 1,039 ) ( 780 ) Total $ 8,824 $ 11,918 Per share data attributable to SMP Net earnings per common share – Basic: Earnings from continuing operations $ 0.45 $ 0.59 Discontinued operations ( 0.05 ) ( 0.04 ) Net earnings per common share – Basic $ 0.40 $ 0.55 Net earnings per common share – Diluted: Earnings from continuing operations $ 0.44 $ 0.57 Discontinued operations ( 0.05 ) ( 0.03 ) Net earnings per common share – Diluted $ 0.39 $ 0.54 Dividend declared per share $ 0.29 $ 0.29 Average number of common shares 21,923,830 21,609,618 Average number of common shares and dilutive common shares 22,372,543 22,097,750 (a) Throughout this Form 10-Q, "SMP" refers to Standard Motor Products, Inc. and subsidiaries. See accompanying notes to cons

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) –

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued) There have been no material changes to our critical accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Recently Issued Accounting Pronouncements Standards not yet adopted as of March 31, 2024 Standard Description Effective date Effects on the financial statements or other significant matters ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. ASU 2023-07 expands segment disclosures by requiring disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; (2) the amount and description of the composition of other segment items to reconcile to segment profit and loss; and (3) the CODM's title and position and how the CODM uses the reported segment measures to allocate resources. Additionally, ASU 2023-07 requires interim disclosures of all reportable segment profit or loss and assets previously required annually by Topic 280. The ASU is effective for the fiscal years beginning after December 15, 2023, which for us is December 31, 2024, and all subsequent interim periods, with full retrospective application required to all prior periods presented. Early adoption is permitted. The new standard will require expanding our segment disclosure to include additional segment level information. We are currently evaluating the full impact of adopting ASU 2023-07 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new stand

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) –

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued) We have reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company's consolidated financial statements. Note 3. Business Acquisitions and Investments 2023 Increase in Equity Investment Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. ("Gwo Yng"), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies and switches. We acquired our 50 % interest in the joint venture for approximately $ 14 million. In March 2018, we acquired an additional 15 % equity interest in the joint venture for Chinese yuan renminbi 26,475,583 (approximately $ 4.2 million), thereby increasing our equity interest in the joint venture to 65 %. While we increased our equity interest in the joint venture to 65 %, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business. As a result, we continued to account for our investment in the joint venture under the equity method of accounting. In July 2023, we acquired an additional 15 % equity interest in the joint venture for Chinese yuan renminbi 27,378,290 (approximately $ 4 million), thereby increasing our equity interest in Gwo Yng to 80 %. In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng. As a result, as of the closing date of the transaction, Gwo Yng was accounted for as a business combination achieved in stages ("a step acquisition"). Accordingly, commencing on the cl

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) –

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued) Intangible assets of $ 0.4 million consisting of customer relationships is amortized on a straight-line basis over the estimated useful life of 10 years. Goodwill of $ 2.2 million was allocated to the Temperature Control and Engineered Solutions segments in the amounts of $ 1.2 million and $ 1 million, respectively. The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations. Incremental revenues from Gwo Yng included in our consolidated statement of operations for the three months ended March 31, 2024 were not material. Note 4. Restructuring and Integration Expenses The aggregated liabilities included in "sundry payables and accrued expenses" and "other accrued liabilities" in the consolidated balance sheet relating to the restructuring and integration activities as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024, consisted of the following (in thousands): Workforce Reduction Other Exit Costs Total Exit activity liability at December 31, 2023 $ 1,729 $ — $ 1,729 Restructuring and integration costs: Amounts provided for during 2024 (a) 17 175 192 Cash payments ( 415 ) ( 175 ) ( 590 ) Foreign currency exchange rate changes ( 18 ) — ( 18 ) Exit activity liability at March 31, 2024 $ 1,313 $ — $ 1,313 (a) Restructuring and integration expenses incurred during the three months ended March 31, 2024 consist of $ 101 ,000 in our Vehicle Control segment, $ 58 ,000 in our Temperature Control segment and $ 33 ,000 in our Engineered Solutions segment. Restructuring Costs Cost Reduction Initiative During the fourth quarter of 2022, to further our ongoing efforts to improve operating efficiencies and reduce costs, we announced plans for a reduction in our sales force, and initiated plans to relocate certain product

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) –

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued) Pursuant to these agreements, we sold $ 170.8 million and $ 170.9 million of receivables during the three months ended March 31, 2024 and 2023, respectively. Receivables presented at financial institutions and not yet collected as of March 31, 2024 and December 31, 2023 were approximately $ 10.9 million and $ 4.5 million, respectively, and remained in our accounts receivable balance as of that date. All receivables sold were reflected as a reduction of accounts receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $ 10 million and $ 9 million related to the sale of receivables is included in selling, general and administrative expense in our consolidated statements of operations for the three months ende

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