#USA #New York #Q4 2024 #Standard Motor Products #Nissens Automotive

Standard Motor Products, Inc. Shows Impressive Q4 and Year-End Results

Standard Motor Products, Inc. (NYSE: SMP) has released its financial results for the fourth quarter of 2024 and the entire year, showcasing substantial growth and positive developments across various segments. In a challenging economic landscape, the company's strong performance highlights its resilience and strategic planning, particularly following its acquisition of Nissens Automotive.

Financial Highlights

In the fourth quarter, SMP reported net sales of $343.4 million, marking an 18.1% increase from $290.8 million in the same quarter of the previous year. This growth is particularly noteworthy given the ongoing economic uncertainties. Excluding the contributions from Nissens, the sales increase was 5.8%, reflecting the company's ability to grow organically in a competitive marketplace.

For the full year, total net sales reached $1.46 billion, an increase of 7.8% compared to last year's $1.36 billion. Adjusted EBITDA for the year stood at 9.6%, with adjusted diluted earnings per share rising to $3.17, up 8.6% from the previous year.

The report noted that while the company faced a loss of $0.8 million in the fourth quarter due to certain operational losses, earnings from continuing operations improved to $10.5 million or $0.47 per diluted share, reflecting a significant increase from $8.2 million or $0.37 per diluted share reported in Q4 of 2023.

Acquisition of Nissens Automotive

A significant driver of SMP's growth has been its acquisition of Nissens Automotive, finalized in November 2024. The acquisition contributed $35.7 million to sales during the fourth quarter. CEO Eric Sills expressed optimism about the integration of Nissens, emphasizing a strong business alignment and future growth potential. The two companies are currently collaborating on various initiatives to reap cost savings and enhance operational efficiencies.

Segment Performance

Vehicle Control

In the Vehicle Control segment, sales increased by 4.9% in the fourth quarter, contributing to a 3.3% growth for the entire year. The results benefited from favorable order patterns and a strong demand environment.

Temperature Control

Temperature Control was a standout performer, with sales soaring 30% in the last quarter and an overall annual growth of 12.5%. The segment’s robust performance was largely driven by consistent demand and early season strength in the market.

Engineered Solutions

Conversely, the Engineered Solutions segment faced a challenging fourth quarter, experiencing a 7.9% decline due to unfavorable comparisons. Despite this, the full-year sales still registered a 1% increase. The segment is focusing on bolstering its market position through new business awards, which are critical for future growth.

Future Outlook

Looking ahead, SMP aims for continued growth in 2025, projecting sales to expand in the mid-teens range, primarily due to the integration of Nissens. The company expects adjusted EBITDA to reach between 10.0% and 11.0%. Plans are underway for a significant distribution center expansion in Shawnee, KS, with operational adjustments to follow. However, uncertainties regarding tariffs could impact this forecast, as the company has not accounted for potential tariff changes in its guidance.

Mr. Sills reaffirmed the strength of SMP's aftermarket business, advising that its products, typically categorized as non-discretionary, tend to fare well in adverse economic conditions. Overall, both the Nissens integration and the solid performance in varying market conditions provide a positive outlook for the company. As part of its financial strategy, SMP also announced a quarterly dividend payment of 31 cents per share, scheduled for distribution on March 3, 2025.

Conclusion

As Standard Motor Products continues its trajectory upwards, stakeholders remain optimistic about the future, particularly as the company positions itself strategically in the market. The combination of innovative approaches, careful acquisitions like Nissens, and a strong focus on operational efficiency could lead to a prosperous 2025 and beyond. The upcoming conference call on February 27 will likely provide additional insights into SMP's strategic plans and operational priorities moving forward.