Standard Motor Products Inc (SMP) has reported a 28.92 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $15.73 million, or $0.67 a share in the quarter, compared with $12.20 million, or $0.53 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $17.14 million, or $0.74 a share compared with $12.64 million or $0.55 a share, a year ago. Revenue during the quarter grew 18.19 percent to $282.38 million from $238.91 million in the previous year period. Gross margin for the quarter contracted 77 basis points over the previous year period to 29.79 percent. Total expenses were 90.96 percent of quarterly revenues, down from 91.62 percent for the same period last year. This has led to an improvement of 66 basis points in operating margin to 9.04 percent.
Operating income for the quarter was $25.52 million, compared with $20.02 million in the previous year period.
However, the adjusted operating income for the quarter stood at $26.75 million compared to $20 million in the prior year period. At the same time, adjusted operating margin improved 110 basis points in the quarter to 9.47 percent from 8.37 percent in the last year period.
Mr. Eric P. Sills, Standard Motor Products’ chief executive officer and president stated, “We are very pleased with our first quarter results. Compared to the first quarter of 2016, net sales were up 18.2%, net income was ahead 28.9%, and earnings per share from continuing operations, excluding special items, increased from 55 cents to 74 cents, a gain of almost 35%.
Operating cash flow remains negative
Standard Motor Products Inc has spent $26.88 million cash to meet operating activities during the quarter as against cash outgo of $1.34 million in the last year period. The company has spent $3.23 million cash to meet investing activities during the quarter as against cash outgo of $4.10 million in the last year period.
Cash flow from financing activities was $25.27 million for the quarter as against cash outgo of $0.24 million in the last year period.
Cash and cash equivalents stood at $15.58 million as on Mar. 31, 2017, up 16.62 percent or $2.22 million from $13.36 million on Mar. 31, 2016.
Working capital declines
Standard Motor Products Inc has witnessed a decline in the working capital over the last year. It stood at $206.57 million as at Mar. 31, 2017, down 17.86 percent or $44.93 million from $251.50 million on Mar. 31, 2016. Current ratio was at 1.63 as on Mar. 31, 2017, down from 1.99 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 84 days for the quarter from 168 days for the last year period. Days sales outstanding went down to 48 days for the quarter compared with 51 days for the same period last year.
Days inventory outstanding has decreased to 75 days for the quarter compared with 161 days for the previous year period. At the same time, days payable outstanding went down to 40 days for the quarter from 44 for the same period last year.
Debt increases substantially
Standard Motor Products Inc has witnessed an increase in total debt over the last one year. It stood at $82.20 million as on Mar. 31, 2017, up 65.54 percent or $32.54 million from $49.66 million on Mar. 31, 2016. Total debt was 9.91 percent of total assets as on Mar. 31, 2017, compared with 7.04 percent on Mar. 31, 2016. Debt to equity ratio was at 0.18 as on Mar. 31, 2017, up from 0.12 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 54.53 for the quarter from 64.37 for the same period last year.
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