Standard Motor Products Q2 2024 10-Q Filed

TL;DR

**SMP files Q2 10-Q. Financials and ops details out.**

AI Summary

Standard Motor Products, Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter of 2024. Key financial data and disclosures relevant to investors are presented in this report.

Why It Matters

This 10-Q filing provides investors with crucial financial and operational details for Standard Motor Products, Inc. during the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures and does not indicate any unusual risks.

Key Players & Entities

• STANDARD MOTOR PRODUCTS, INC. (company) — Filer
• 20240630 (date) — Period of Report
• 20240801 (date) — Filed as of Date

FAQ

Key Financial Figures

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

Filing Documents

• ef20030117_10q.htm (10-Q) — 2172KB
• ef20030117_ex10-1.htm (EX-10.1) — 989KB
• ef20030117_ex31-1.htm (EX-31.1) — 10KB
• ef20030117_ex31-2.htm (EX-31.2) — 10KB
• ef20030117_ex32-1.htm (EX-32.1) — 5KB
• ef20030117_ex32-2.htm (EX-32.2) — 4KB
• image0.jpg (GRAPHIC) — 8KB
• 0001140361-24-035244.txt ( ) — 11596KB
• smp-20240630.xsd (EX-101.SCH) — 60KB
• smp-20240630_cal.xml (EX-101.CAL) — 98KB
• smp-20240630_def.xml (EX-101.DEF) — 307KB
• smp-20240630_lab.xml (EX-101.LAB) — 855KB
• smp-20240630_pre.xml (EX-101.PRE) — 493KB
• ef20030117_10q_htm.xml (XML) — 1993KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page No. Item 1. Consolidated Financial Statements: Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 3 Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 4 Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 5 Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2024 and 2023 6 Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 7

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 9 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 29 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 43 Item 4.

Controls and Procedures

Controls and Procedures 44

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 45 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45 Item 6. Exhibits 46

Signatures

Signatures 47 2 Index

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED OPERATIONS Three Months Ended June 30, Six Months Ended June 30 , (In thousands, except share and per share data, unaudited) 2024 2023 2024 2023 Net sales $ 389,829 $ 353,075 $ 721,232 $ 681,103 Cost of sales 278,382 251,806 520,263 488,567 Gross profit 111,447 101,269 200,969 192,536 Selling, general and administrative expenses 83,885 73,843 158,618 143,476 Restructuring and integration expenses 2,559 294 2,751 1,206 Other income (expense), net ( 17 ) 46 5 70 Operating income 24,986 27,178 39,605 47,924 Other non-operating income, net 2,199 802 3,018 1,027 Interest expense 2,752 3,283 4,819 7,145 Earnings from continuing operations before taxes 24,433 24,697 37,804 41,806 Provision for income taxes 6,109 6,289 9,451 10,661 Earnings from continuing operations 18,324 18,408 28,353 31,145 Loss from discontinued operations, net of income taxes ( 917 ) ( 9,221 ) ( 1,956 ) ( 10,001 ) Net earnings 17,407 9,187 26,397 21,144 Net earnings attributable to noncontrolling interest 344 50 510 89 Net earnings attributable to SMP (a) $ 17,063 $ 9,137 $ 25,887 $ 21,055 Net earnings (loss) attributable to SMP Continuing operations $ 17,980 $ 18,358 $ 27,843 $ 31,056 Discontinued operations ( 917 ) ( 9,221 ) ( 1,956 ) ( 10,001 ) Net earnings attributable to SMP $ 17,063 $ 9,137 $ 25,887 $ 21,055 Per common share data Basic: Continuing operations $ 0.83 $ 0.85 $ 1.27 $ 1.43 Discontinued operations ( 0.05 ) ( 0.43 ) ( 0.09 ) ( 0.46 ) Net earnings attributable to SMP per common share $ 0.78 $ 0.42 $ 1.18 $ 0.97 Diluted: Continuing operations $ 0.81 $ 0.83 $ 1.25 $ 1.40 D

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (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 June 30, 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 standard through o

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (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 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 closing of the transaction, we reported the result

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (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 Note 4. Restructuring and Integration Expenses Voluntary Retirement Incentive Program During the quarter we offered a voluntary retirement incentive package of severance and other benefit enhancements to eligible employees in the United enhanced medical benefits and are charged to restructuring and integration expenses in our statement of operations as a one-time termination b

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