SMP(US:SMP)2025-02-27 22:41Financial Performance - Consolidated net sales for 2024 were $1,463.8 million, an increase of $105.6 million, or 7.8%, compared to $1,358.3 million in 2023[164]. - Gross profit for 2024 was $423.3 million, with a gross profit margin of 28.9%, up from 28.6% in 2023[164][165]. - Operating income decreased to $80.6 million, or 5.5% of net sales, down from $92.7 million, or 6.8% in 2023[166][185]. - Selling, general and administrative expenses increased by $41.5 million to $335.1 million, representing 22.9% of net sales in 2024[166][182]. - Other non-operating income increased to $6.9 million in 2024 from $2.3 million in 2023, driven by higher equity income from joint ventures and favorable foreign currency exchange impacts[186]. - The income tax provision for 2024 was $19.4 million at an effective tax rate of 26.2%, compared to $18.4 million at 22.5% in 2023, influenced by non-deductible transaction costs from the acquisition of Nissens Automotive[188]. - Loss from discontinued operations was $26.1 million in 2024, down from $29 million in 2023, including pre-tax provisions of $29.3 million and $23.8 million for 2024 and 2023, respectively[189]. - Net earnings attributable to noncontrolling interest increased to $1.0 million in 2024 from $0.2 million in 2023, reflecting the impact of the Gwo Yng acquisition[190]. Segment Performance - The newly acquired Nissens Automotive segment contributed $35.7 million in net sales for the two months post-acquisition[165][175]. - Vehicle Control segment net sales increased by $24.6 million, or 3.3%, to $762.6 million in 2024[171]. - Temperature Control segment net sales rose by $42.3 million, or 12.5%, to $380.1 million, driven by warmer weather conditions[172]. - Engineered Solutions segment net sales increased by $2.9 million, or 1%, to $285.5 million, supported by new business wins[173][174]. - The gross margin percentage for the Nissens Automotive segment was 32.2% for the two months from the acquisition date[176]. Cash Flow and Investments - Operating cash flows decreased to $76.7 million in 2024 from $144.3 million in 2023, primarily due to a $36.9 million increase in inventories[193]. - Cash used in investing activities surged to $418.7 million in 2024 from $25.7 million in 2023, mainly due to the $372.5 million acquisition of Nissens Automotive[196]. - Cash provided by financing activities was $349.5 million in 2024, compared to cash used of $109.6 million in 2023, following the refinancing of the 2022 Credit Agreement[198]. - Outstanding borrowings under the 2024 Credit Agreement were $545.4 million as of December 31, 2024, compared to $156 million in 2023[210]. - The weighted average interest rate on borrowings under the 2024 Credit Agreement was 5.6% at December 31, 2024, up from 5.0% under the 2022 Credit Agreement[212]. - The company sold $884.7 million and $830.8 million of receivables for the years ended December 31, 2024 and 2023, respectively[216]. - Receivables presented at financial institutions and not yet collected as of December 31, 2024 and December 31, 2023 were approximately $5.8 million and $4.5 million, respectively[216]. - A charge related to the sale of receivables included in selling, general and administrative expenses was $48.5 million, $46 million, and $32 million for the years ended December 31, 2024, 2023, and 2022, respectively[216]. - The company anticipates that cash flow from operations, available cash, and borrowings under the 2024 Credit Agreement will be adequate to meet future liquidity needs for at least the next twelve months[222]. - Material cash commitments as of December 31, 2024 include required cash payments of $545.4 million under the 2024 Credit Agreement and future minimum cash requirements of $144.8 million through 2034 under operating leases[221]. Restructuring and Expenses - Restructuring and integration expenses were $7.7 million in 2024, up from $2.6 million in 2023, primarily due to the Separation Program[168][184]. - The company recorded a $7 million pre-tax charge in selling, general and administrative expenses due to a customer's bankruptcy in January 2023[218]. Stock and Shareholder Actions - As of the first half of 2024, the company repurchased 321,229 shares of common stock for a total cost of $10.4 million under a $30 million stock repurchase program authorized in July 2022[220]. Risks and Assessments - The company faces risks related to supply chain financing arrangements, including potential adverse effects from increased benchmark reference rates[217]. - The company assesses long-lived assets and goodwill for impairment whenever events indicate that the carrying value may not be recoverable[230]. - The company plans to perform an annual actuarial evaluation of asbestos-related liabilities and does not currently believe that additional provisions will materially affect liquidity or financial position[236].