Earnings Labs

Standard Motor Products, Inc. (SMP)

Q1 2015 Earnings Call· Sun, May 3, 2015

$37.78

-0.26%

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Transcript

Operator

Operator

Good day everyone and welcome to today's program. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call will be recorded. I will be standing by if you should need assistance. It is now my pleasure to turn the conference over to Mr. Jim Burke with Standard Motor Products. You may begin.

Jim Burke

Analyst

Okay, thank you, Kevin. Good morning and welcome to Standard Motor Products First Quarter 2015 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 with our financial highlights, and then turn it over to Larry, followed by Q&A. Looking at the P&L, consolidated net sales was soft down $5.2 million or 2.2%. The impact of foreign exchange movements negatively impacted our Q1 results by $2.1 million or roughly 40% of our sales shortfall. The fall in the Canadian dollar was the primary contributor to this shortfall. In Q2, we implemented price changes that combat this erosion in Canada. Engine Management net sales were down $2.2 million or 1.2%. Approximately $800,000 of the currency impacts was in Engine Management from the fall in the Polish Zloty. The month of January was soft to some degree impacted by the harsh winter and also following good sales in our Q4 last year. We were pleased to see a rebound in Engine Management sales in February and March and also carrying into…

Larry Sills

Analyst

Good morning everybody. Jim has reviewed the numbers and I’ll just focus on a couple of key issues and then we’ll open it up for your questions. Sales, first Engine Management, just leaving aside the currency movements for a second, as Jim said and as we said in the release, January was a soft month and this was somewhat caused by all the ice and snow in January where many of our customers actually lost days for shipping. But since then, sales have been holding up nicely, February and March were good, April looks pretty good at this point and we maintain our forecast which is that Engine Management will grow along with the industry rate of roughly below to mid-single digits, primarily as a result of continuing aging of vehicles population. Okay. Temperature Control, again as Jim said the first quarter doesn't tell you much it’s primarily pre-seasoned stocking orders slightly down from last year and not surprising after two cool summers in a row. We don’t have to see how this summer works out, unfortunately April has been fairly cool so far but it’s still early. But it is what we tell our people, we cannot control the weather, some years will be hot, some years will be cold, in the long run, it will balance out and our task is to make the Temp Control business a better and better company so that we do well even in a cold summer. And the 50/50 venture with Gwo Yng is certainly a step in that direction and so that brings us two acquisitions, I’ll talk about them for a second. We have made three since last January. All three are up and running, all three fit into our strategic plan where we focus on two types of acquisitions,…

Operator

Operator

[Operator Instructions] And it appears that we have no questions at this time. : :

Jim Burke

Analyst

Okay. With that, I’d like to thank everyone for joining our conference call today. Thank you.