Hello and welcome to the Standard Motor Products’ third quarter earnings call. At this time all participants are in a listen-only mode. (Operator Instructions) Please note that this call is being recorded. It is now my pleasure to turn the conference over to Mr. Jim Burke. Please go ahead.

Thank you. Good morning and welcome to Standard Motor Products’ third quarter 2010 conference call. In attendance from the company are Larry Sills, Chief Executive Officer, and myself, Jim Burke, Chief Financial Officer. As a preliminary note, I would like to point out that some of the material we will be discussing today may include forward-looking statements regarding our business and expected financial results. When we use words like anticipate, believe, estimate or expect, these are generally forward-looking statements, although we believe that the expectations reflected in these forward-looking statements are reasonable. They are based on information currently available to us, and certain assumptions made by us and we cannot assure you that they will prove correct. You should also read our filings with the Securities and Exchange Commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward-looking statements. I’ll begin with a review of the financial results and then turn it over to Larry followed by Q-&-A. I’m very please to report another strong quarter with top-line revenue gains and continued earnings momentum. With most of our heavy lifting complete from past restructuring efforts, we reached an inflection point in the second quarter of 2009. Since then, we have produced improvements in gross margins, EBITDA and earnings per share quarter-over-quarter against the prior years. I will review the highlights from our most recent third quarter. Our consolidated net sales in the third quarter were $227.5 million, up $22 million or 10.7%. Excluding $7.2 million in sales from the divestiture of our European segment last year, net sales were up $29.2 million or 14.2%. Looking at it by segment Engine Management, net sales were up $16.6 million for the quarter or 12.1% and with the warmer temperatures this summer, our…

Good morning. Jim has covered the numbers and I think for the most part they speak for themselves. I’ll just give a few brief comments and then we’ll open for questions. As I’ve said before, we have spent the last several years working diligently to reduce our cost base. We’ve moved manufacturing and purchasing to low-cost areas. We’ve reduced overheads. We’ve reduced debt. Now, you lay on top of this lower cost base of strong sales year and obviously the results will be quite good. A word on the sales. The aftermarket is doing quite well this year as those of you who followed the industry have seen from all the public companies, both manufacturers and distributors. The reason for the increase have been quite well documented, I’ll review them briefly. The car population continues to age as new car sales are down. The average age of the cars on the road is now greater than 10 years, which I’ve read is the highest it’s been in almost 50 years. Obviously, older cars equal more repairs. The car dealers are closing down, several thousand so far. The car dealers are the industry’s biggest competitor, both with the repair and the sale of parts, so that’s a positive thing for our industry. Number three, we believe there’s been some pent-up demand that is hard to quantify, but believe there’s been some pent-up demand from people who just didn’t spend any money at all in 2009 and that repair work slopped over into 2010. Again this is hard to quantify, but I think the certain amount of that is going on. Number four, this was quite a hot summer in most of the countries, which helped our air conditioning business, but it also helps the general repair business, because heat plays havoc…

(Operator Instructions). And we will take our first question from Robert Smith with the Center For Performance Investing. Please go ahead. Your line is open.

Congratulations on a strong quarter.

Thank you Bob

It’s very pleasant to see those numbers. Considering the improves the financial condition of the company and the announcement of the dividend do you guys have an ideas to payout the ratio what you want sort of doing them.

Okay, as you recall our stated goal for a dividend payout is one third of earnings per share. We’re below that right now with these latest numbers. We’ll be reviewing this with our board over the next few months and as we look at our 2010 numbers and our 2011 forecast and we’ll be making a decision sometime the next few months.

Thanks, good luck.

Thank you.

(Operator instruction) And looks like we have a follow up now with Mr. Robert Smith again. Please go ahead, your like is open.

Where is everyone?

I’ll tell you where they are Bob there is a Mario Gabelli runs and actually about a year we are at Las Vegas now and I’m guessing all the people who normally ask questions are in this meeting right now.

Okay. What am I doing in New York? Yeah, so maybe you could just give me a little more color on the competitive environment. You mentioned certain of the pieces that are making you look better and how about the possibility of the continuation of those trends?

Well the competition remains strong. We’re in a very competitive industry in our Engine Management side, we compete with the OEs vigorously we compete with some other companies that do what we do as full service suppliers. We also compete with people who import products mostly from the Far East I’d say there has not been any major change in that one-way or the other. So the growth in sales that most of us is seeing is not so much taking or loosing market share but the fact that the whole industry level has risen this year.

Well looking out to the next year so to speak, what are the OES promise?

OES is what you’re asking?

Yeah

Well at this point, we have many prospects.

Well what can bring some of those home I mean.

Well it’s really they, what we are learning is that, these companies that we deal with, they are larger, they are very engineering and quality oriented and they don’t move as quickly as some of our aftermarket companies, so they take their time and they study and they analyze and they test, and some times they’ll put things on live test for six months. So it’s a slow process, but it’s a good process, it’s fair and as I say, we’ve got a lot of prospects out there.

And how much of the incremental Temp business is due to the weather factor?

I can’t quantify it precisely, but I would say it plays a very nice role.

Does it we did pick up some new business from our competitor last year.

A year ago.

So a little bit, probably 80% of it is from the temperature, from the seas and the little bits that market share gain we got at the beginning of the year.

And can you tell me something about the commodity cost factors to you I mean with the prices and materials going up?

Yeah. To some degree to say we’re fortunate, we experience the same commodity price changes, up or down as everybody else, but because of the breadth of our 30,000 SKUs, primarily within Engine Management, many of those products we purchased outright we tend to find sources for those, either in the Far East or we bring them in-house for manufacture, so we have the ability to offset a large part of any commodity increases with the resourcing of products to low cost countries.

And how do you find the acceptance of modest or moderate price increases in the channels?

Well we had a pretty decent year for pricing this year. We achieved sort of our historical average, which is roughly inflation, maybe a little more than inflation, so it’s been okay, but you do have the competitive pressures and primarily coming from China. So, you have to watch out for that.

Okay. And is employee count, essentially have you reached the objectives you set out?

You’re talking about the layoffs?

Yes.

Yes, yes we did and we’ve really kept it down, which is very good.

And can you tell me anything about the current quarter as to how things have been going?

Again, for the fourth quarter, sales overall, many of our distributors are optimistic looking forward yet, so we don’t put forecasts out.

But I understand.

I would say that we continue to be optimistic on sales, again the fourth quarter is our lowest quarter for the year and the primary driver is really customer returns and at this point we deem to be adequately accrued for customer returns and we’ll see as we close out the full year.

Okay. Well, once again, congratulations and good.

Alright, thank you.

Best of luck.

Very good. Anybody else?

.:

Hi, sorry to disappoint, but actually my questions were answered by the other gentleman’s questions, so I’m all set, thanks.

Yeah, thank you.

And next we have Sean Nicholson with Kennedy Capital. Please go ahead, your line is open.

Good morning guys.

Good morning.

Third quarter, just one question on inventory at your customers, what are they telling you as far as maybe expectations for early next year or how are they are they managing it, any different than they have been this year going into next year?

I think on the inventory levels, our inventory increased. Again, I think we’ve seen some slight increase at some of our customers. We don’t get obviously all the reporting, but we get the majors that we had a look at their inventory levels. It did increase a little bit, again in response to strong sales and the demand, but also I think some of the major retailers as they continue to expand their inventories as they go after the commercial end of the business. But I think overall in the industry, supply chain improvements, everybody is working to better improve their inventory levels, so I don’t see anything dramatic as you look into next year.

Okay, great. And just on new products, where are we, are you guys doing anything in particular that will be launched in next year that may benefit the sales?

No, I would say that we do have many, many new products but not of a quantitative nature, because each year had many part numbers just to keep up with the latest car models, but there’s nothing dramatic.

Great, thanks.

And our next question comes from Efraim Levy with S&P. Please go ahead, your line is open. Efraim Levy - S&P: Good morning. As far as the long-term debt that’s payable, are you planning to roll that over or you’re going to pay it off?

We have a small piece that’s left there related to the exchange bonds that we offered, which are, I think the number is 12.3 million comes due in April ‘11, it’s at a very high interest rate and that will be a savings, we will cover that under our revolver in April of next year. Efraim Levy - S&P: Okay, and as far as the tax rate that you’re looking for?

.: Efraim Levy - S&P: Alright. Okay, and as far as the tax rate that you’re looking for?

We explained the anomaly in the quarter, again tax rate I would be thinking in the about 41% range. Efraim Levy - S&P: And as far as looking to ‘11 with some of the optimism that you’ve expressed, do you think you’ll get a little bit more of a sales kick than you historically have for the Engine business?

What for this year, going forward? Efraim Levy - S&P: Yeah.

Well, I think this year we were very fortunate, many of it as Larry spoke to pent-up demand and all the other demographic factors that are in there, I think many of our customers, they are optimistic, hopefully it holds. We will ride along with them and continue to introduce new products. But again, this on top of this base would be amazing, so I would be very pleased in the mid single digits. Efraim Levy - S&P: Okay. And finally, as far as restructuring, that should essentially be going away or there’s a little bit of a carryover?

This year was the amount we said one-time cost $4 million, there’s always a little bit with the timing of it that may carryover, but we do not have anything identified specifically for the following year. So again, that number should be coming down significantly. Efraim Levy - S&P: Thank you very much.

Welcome.

And our next question, we have again another follow-up from Robert Smith. Please go ahead, your line is open.

Can you just briefly comment on managing currencies going forward?

Again, our locations that we’re involved in we are in Mexico, we are in Poland, we have an impact with the Euro. Again, the commodities, most of our purchasing are in U.S. dollars for even our overseas sourcing. And we have a natural hedge that’s on the other with Canadian Dollar, we have a little bit in there, but it hasn’t been a significant impact, either from the sales or the cost side of our business.

And you don’t expect it to be?

No.

Alright, thanks.

Okay.

And it appears we have no more questions in queue at this time.

Alright, very good.

Alright, thank you everybody.

Thank you, goodbye.

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