Boston, MA 05/13/2014 (wallstreetpr) – During first quarter 2014, Standard Motor Products, Inc. (NYSE:SMP)’s net sales were $232.8 million, marginally up compared to the same quarter 2013 due to higher sales achieved by Engine Management (EM) segment, partly offset by lower net sales of Temperature Control (TC) products.
Operating performance
Engine Management represents 77% of total sales in 1Q2014 sales and the segment’s sales were up 2.2% over prior year period, resulted primarily due to the effect of 14% increase in orders in retail and OE markets during 4Q2013.
The cold conditions were expected to impact the Temperature Control segment performance significantly; however, pre-season stock orders compensated the loss and declined the segment sales by ~2% compared to 1Q2013.
Standard Motor Products, Inc. (NYSE:SMP) streamlined the production process while focusing on lost cost locations that helped to improve gross margin from 28.5% to 29.2%. The continued cost reduction measures in distribution centers reduced the SG&A costs during the period.
As a result, adjusted (non-GAAP) earnings from continuing operations were $12.4 million or $0.53 per diluted share, compared to $9.7 million or $0.42 per diluted share in 1Q2013.
Positive cash flow
During 1Q2014, Standard Motor Products, Inc. (NYSE:SMP) generated positive cash flow of $9.2 million from its operation versus $26.8 million cash used in operation during 1Q2013. The improvement was due to the lower change in working capital and increased earnings compared to prior year period. The Company spent $2.8 million of capital and generated free cash flow of $6.4 million. Net cash balance as of March 31, 2014 reduced to $4.4 million versus $9.7 million due to the lower change in debt.
Growth prospects
Standard Motor Products, Inc. (NYSE:SMP) will report higher sales in second and third quarter especially in Temperature Control segment due to the seasonality nature of the business. But, the industry demographics remain healthy for Engine Management segment and continue to deliver single digit organic growth in coming periods.
