SMP(SMP) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results Overview Key Financial Highlights Standard Motor Products, Inc. reported strong first-quarter 2025 results, with significant increases in net sales, adjusted EBITDA margin, and adjusted diluted earnings per share, driven partly by the Nissens acquisition First Quarter 2025 Key Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change (%) | | :----------------------------------------- | :------ | :------ | :--------- | | Net sales | $413.4 million | $331.4 million | 24.7% | | Earnings from continuing operations (GAAP) | $13.7 million | $9.9 million | 38.4% | | Diluted EPS (GAAP) | $0.61 | $0.44 | 38.6% | | Earnings from continuing operations (Non-GAAP) | $18.0 million | $10.0 million | 80.0% | | Diluted EPS (Non-GAAP) | $0.81 | $0.45 | 80.0% | - First quarter net sales of $413.4 million were up 24.7% year-over-year, and up 4.8% excluding the Nissens acquisition[4] - First quarter adjusted EBITDA margin increased 350 basis points to 10.4%[4] - Adjusted diluted earnings per share of $0.81 in the quarter increased 80% from last year[4] Management Commentary and Segment Performance CEO Eric Sills expressed satisfaction with the quarter's performance, highlighting strong profit across all segments and the positive impact of the Nissens acquisition, while detailing performance for each business segment - CEO Eric Sills stated that first quarter results exceeded expectations, with sales up nearly 25% (nearly 5% excluding Nissens) and adjusted diluted earnings per share up 80%, driven by strong profit performance from all segments[5] Vehicle Control Segment Performance The Vehicle Control segment continued its positive trend with a 3.7% sales increase, supported by solid customer order patterns and steady demand for non-discretionary products Vehicle Control Segment Sales | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | Total Vehicle Control | $192,342 | $185,524 | 3.7% | - Customer order patterns were solid, indicating steady demand for the segment's largely non-discretionary products[5] Temperature Control Segment Performance The Temperature Control segment achieved an excellent start to the year with a 24.1% sales increase, driven by planned pre-season orders and strong ongoing customer sell-through Temperature Control Segment Sales | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | Total Temperature Control | $88,883 | $71,608 | 24.1% | - Sales strength was driven by a combination of planned pre-season orders and strong ongoing customer sell-through[6] Engineered Solutions Segment Performance Despite an 11.2% sales decline due to softness in end markets, the Engineered Solutions segment improved profitability through a better customer and product mix and secured new business awards for future growth Engineered Solutions Segment Sales | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | Total Engineered Solutions | $65,972 | $74,271 | -11.2% | - Improved profitability was generated on lower sales due to an improved customer and product mix[7] - The segment continues to win new business awards, which bodes well for future growth as the cycle recovers[7] Nissens Automotive Segment Performance In its first full quarter of ownership, Nissens Automotive contributed $66.2 million in sales with an adjusted EBITDA margin of 17.3%, exceeding expectations, and integration efforts are on track for significant cost reduction synergies Nissens Automotive Segment Performance | Metric | Q1 2025 (in thousands) | | :--------------------- | :--------------------- | | Sales Contribution | $66,182 | | Adjusted EBITDA Margin | 17.3% | - Integration efforts are well underway, with an initial target of $8-12 million in run-rate cost reduction synergies within 24 months of ownership[8] Profitability, Balance Sheet, and Outlook The company saw a significant increase in adjusted EBITDA and margin improvement, primarily due to the Nissens acquisition and cost containment. Net debt increased reflecting the acquisition and seasonal working capital. Full-year guidance remains consistent, excluding tariff impacts Adjusted EBITDA Performance | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | Adjusted EBITDA | $42,800 | $22,900 | 86.9% | | Adjusted EBITDA Margin | 10.4% | 6.9% | 350 bps | - Adjusted EBITDA gain was just over half from Nissens, with the balance from improved performance of other segments, leverage on North American sales, and cost containment actions[9] - Total net debt at quarter-end stood at $600.3 million, primarily reflecting additional borrowings related to the Nissens acquisition and seasonal working capital build[10] - The company maintains its previous guidance for full-year top-line growth in the mid-teens and adjusted EBITDA margin in a range of 10-11%, excluding the impact of tariffs[12] - The diverse global footprint, with over half of US sales from North American manufactured products, and the Nissens acquisition provide competitive advantages and sales diversification to mitigate tariff impacts, largely through pass-through pricing[11] Quarterly Dividend and Closing Remarks The Board of Directors approved a quarterly dividend of 31 cents per share. The CEO reiterated optimism for 2025, emphasizing the aftermarket's resilience, the company's stable business nature, and the long-term potential from Nissens Quarterly Dividend Declaration | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Dividend declared per common share | $0.31 | $0.29 | - The dividend will be paid on June 2, 2025, to stockholders of record on May 15, 2025[13] - Management is optimistic about 2025, citing the aftermarket's resilience, the non-discretionary nature of the business, and the long-term growth and synergy savings from Nissens[14] Additional Information and Disclosures Conference Call Information Details for the Q1 2025 earnings conference call, including date, time, webcast link, and dial-in numbers for live access and replay - A conference call will be held on Wednesday, April 30, 2025, at 11:00 AM, Eastern Time[15] - The call can be accessed via webcast on www.smpcorp.com or by dialing 800-274-8461 (domestic) or 203-518-9814 (international), using conference call ID SMP1Q2025[15] - A playback will be available immediately after the call by dialing 800-934-7884 (domestic) or 402-220-6987 (international), and the webcast replay will be active within 24 hours[15] Safe Harbor Statement A standard disclosure under the Private Securities Litigation Reform Act of 1995, cautioning investors that forward-looking statements are subject to risks and uncertainties, and the company does not undertake to update them - Forward-looking statements are based on management's expectations but are subject to risks and uncertainties that may cause actual results to differ materially[16][17] - The company undertakes no obligation or intention to update these statements after the date of the release[17] Consolidated Financial Statements Consolidated Statements of Operations The consolidated statements of operations show a significant increase in net sales, gross profit, operating income, and net earnings for the three months ended March 31, 2025, compared to the same period in 2024 Consolidated Statements of Operations Highlights | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :----------------------------------------- | :--------------------- | :--------------------- | :--------- | | Net sales | $413,379 | $331,403 | 24.7% | | Gross profit | $124,722 | $89,522 | 39.3% | | Operating income | $24,462 | $14,619 | 67.3% | | Net earnings attributable to SMP | $12,566 | $8,824 | 42.4% | | Diluted EPS (Continuing operations) | $0.61 | $0.44 | 38.6% | | Diluted EPS (Net earnings attributable to SMP) | $0.56 | $0.39 | 43.6% | Segment Revenues Detailed revenue breakdown by segment shows strong growth in Temperature Control and the significant contribution from the newly acquired Nissens Automotive, while Engineered Solutions experienced a decline Segment Revenues (Three Months Ended March 31) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :--------------------- | :------------------ | :------------------ | :--------- | | Vehicle Control | $192,342 | $185,524 | 3.7% | | Temperature Control | $88,883 | $71,608 | 24.1% | | Engineered Solutions | $65,972 | $74,271 | -11.2% | | Nissens Automotive | $66,182 | — | N/A | | Total | $413,379 | $331,403 | 24.7% | Segment Operating Profit Segment operating profit analysis reveals improved gross margins across all legacy segments and a strong operating income contribution from Nissens Automotive, despite acquisition expenses Segment Operating Income (Three Months Ended March 31) | Segment | Q1 2025 Operating Income (in thousands) | Q1 2025 Operating Margin (%) | Q1 2024 Operating Income (in thousands) | Q1 2024 Operating Margin (%) | | :--------------------- | :------------------------------------ | :--------------------------- | :------------------------------------ | :--------------------------- | | Vehicle Control | $18,326 | 9.5% | $15,641 | 8.4% | | Temperature Control | $7,775 | 8.7% | $2,089 | 2.9% | | Engineered Solutions | $3,195 | 4.8% | $2,243 | 3.0% | | Nissens Automotive | $7,584 | 11.5% | — | — | | Consolidated Operating Income | $24,462 | 5.9% | $14,619 | 4.4% | Reconciliation of GAAP and Non-GAAP Measures This section reconciles GAAP financial measures to non-GAAP measures, adjusting for special items like restructuring, integration, and acquisition expenses, providing a clearer view of ongoing operational performance Company-wide Reconciliation Reconciliation of company-wide GAAP earnings, diluted EPS, operating income, and EBITDA to their non-GAAP equivalents, showing the impact of special items Company-wide GAAP to Non-GAAP Reconciliation (Three Months Ended March 31) | Metric | Q1 2025 GAAP (in thousands) | Q1 2025 Non-GAAP (in thousands) | Q1 2024 GAAP (in thousands) | Q1 2024 Non-GAAP (in thousands) | | :----------------------------------------- | :-------------------------- | :---------------------------- | :-------------------------- | :---------------------------- | | Earnings from Continuing Operations Attributable To SMP | $13,705 | $18,012 | $9,863 | $10,005 | | Diluted EPS from Continuing Operations Attributable to SMP | $0.61 | $0.81 | $0.44 | $0.45 | | Operating Income | $24,462 | $30,024 | $14,619 | $14,789 | | EBITDA without Special Items | $36,977 (EBITDA) | $42,797 | $22,739 (EBITDA) | $22,931 | Segment-specific Reconciliation Provides a segment-level reconciliation of operating income and EBITDA without special items, highlighting the non-GAAP adjustments for each business unit Segment-specific Non-GAAP Operating Income and EBITDA (Q1 2025) | Segment | Non-GAAP Operating Income (in thousands) | Non-GAAP EBITDA without Special Items (in thousands) | % of Net Sales (EBITDA w/o Special Items) | | :--------------------- | :--------------------------------------- | :--------------------------------------------------- | :---------------------------------------- | | Vehicle Control | $18,326 | $22,248 | 11.6% | | Temperature Control | $7,775 | $9,401 | 10.6% | | Engineered Solutions | $3,195 | $6,410 | 9.7% | | Nissens Automotive | $7,584 | $11,467 | 17.3% | | Consolidated | $30,024 | $42,797 | 10.4% | Condensed Consolidated Balance Sheets The balance sheet shows a significant increase in total assets and liabilities as of March 31, 2025, primarily driven by the Nissens acquisition, while total stockholders' equity remained relatively stable Condensed Consolidated Balance Sheets Highlights (in thousands) | Metric | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :------------------------- | :------------- | :------------- | :---------------- | | Total Current Assets | $1,016,081 | $796,436 | $921,924 | | Total Assets | $1,926,091 | $1,351,561 | $1,814,126 | | Total Current Liabilities | $437,377 | $299,212 | $436,472 | | Long-term Debt | $627,329 | $209,872 | $535,197 | | Total Liabilities | $1,273,654 | $696,440 | $1,184,044 | | Total Stockholders' Equity | $652,437 | $655,121 | $630,082 | Condensed Consolidated Statements of Cash Flows Cash flows for Q1 2025 show increased cash used in operating activities and investing activities, offset by a substantial increase in cash provided by financing activities, primarily from debt Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :---------------------------------------- | :------ | :------ | | Net Cash Used In Operating Activities | $(60,220) | $(45,716) | | Net Cash Used In Investing Activities | $(6,209) | $(10,071) | | Net Cash Provided By Financing Activities | $72,508 | $50,380 | | Net Increase (Decrease) In Cash And Cash Equivalents | $5,850 | $(5,413) | | Cash And Cash Equivalents At End Of Period | $50,276 | $27,113 |