QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Accelerated Filer ☐
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Non-Accelerated Filer ☐
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Smaller reporting company
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Emerging growth company
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Page No.
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Item 1. |
Consolidated Financial Statements:
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3 | ||
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4 | ||
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5 | ||
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6 |
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7 | ||
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8
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Item 2. |
25
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Item 3. |
35
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Item 4. |
36
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Item 1. |
37
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Item 2. |
37
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Item 6. |
38
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39
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ITEM 1. |
CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended
March 31,
|
|||||||
(In thousands, except share and per share data)
|
2022
|
2021
|
||||||
|
(Unaudited)
|
|||||||
Net sales
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$
|
|
$
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|
||||
Cost of sales
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|
|
||||||
Gross profit
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|
|
||||||
Selling, general and administrative expenses
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|
|
||||||
Restructuring and integration expenses
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|
||||||
Operating income
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|
||||||
Other non-operating income, net
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|
|
||||||
Interest expense
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|
||||||
Earnings from continuing operations before income taxes
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|
|
||||||
Provision for income taxes
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|
||||||
Earnings from continuing operations
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|
||||||
Loss from discontinued operations, net of income taxes
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(
|
)
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(
|
)
|
||||
Net earnings
|
|
|
||||||
Net earnings (loss) attributable to noncontrolling interest
|
( |
) | ||||||
Net earnings attributable to SMP (a)
|
$ | $ | ||||||
Net earnings attributable to SMP
|
||||||||
Earnings from continuing operations
|
$ |
$ | ||||||
Discontinued operations
|
( |
) | ( |
) | ||||
Total
|
$ | $ | ||||||
Per share data attributable to SMP
|
||||||||
Net earnings per common share – Basic:
|
||||||||
Earnings from continuing operations
|
$
|
|
$
|
|
||||
Discontinued operations
|
(
|
)
|
(
|
)
|
||||
Net earnings per common share – Basic
|
$
|
|
$
|
|
||||
Net earnings per common share – Diluted:
|
||||||||
Earnings from continuing operations
|
$
|
|
$
|
|
||||
Discontinued operations
|
(
|
)
|
(
|
)
|
||||
Net earnings per common share – Diluted
|
$
|
|
$
|
|
||||
Dividend declared per share
|
$
|
|
$
|
|
||||
Average number of common shares
|
|
|
||||||
Average number of common shares and dilutive common shares
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|
|
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Three Months Ended
March 31,
|
|||||||
(In thousands)
|
2022
|
2021
|
||||||
|
(Unaudited)
|
|||||||
|
||||||||
Net earnings
|
$
|
|
$
|
|
||||
Other comprehensive income (loss), net of tax:
|
||||||||
Foreign currency translation adjustments
|
(
|
)
|
(
|
)
|
||||
Pension and postretirement plans
|
(
|
)
|
(
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
(
|
)
|
(
|
)
|
||||
Total comprehensive income
|
|
|
||||||
Comprehensive income (loss) attributable to noncontrolling interest, net of tax:
|
||||||||
Net earnings (loss)
|
( |
) | ||||||
Foreign currency translation adjustments
|
||||||||
Comprehensive income (loss) attributable to noncontrolling interest, net of tax
|
( |
) | ||||||
Comprehensive income attributable to SMP
|
$ | $ |
(In thousands, except share and per share data)
|
March 31,
2022
|
December 31,
2021
|
||||||
|
(Unaudited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable, less allowances for discounts and expected credit losses of $
|
|
|
||||||
Inventories
|
|
|
||||||
Unreturned customer inventories
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
|
||||||||
Property, plant and equipment, net of accumulated depreciation of $
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Goodwill
|
|
|
||||||
Other intangibles, net
|
|
|
||||||
Deferred income taxes
|
|
|
||||||
Investments in unconsolidated affiliates
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Notes payable
|
$
|
|
$
|
|
||||
Current portion of other debt
|
|
|
||||||
Accounts payable
|
|
|
||||||
Sundry payables and accrued expenses
|
|
|
||||||
Accrued customer returns
|
|
|
||||||
Accrued core liability
|
|
|
||||||
Accrued rebates
|
|
|
||||||
Payroll and commissions
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term debt
|
|
|
||||||
Noncurrent operating lease liabilities
|
|
|
||||||
Other accrued liabilities
|
|
|
||||||
Accrued asbestos liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock – par value $
|
||||||||
Authorized –
|
|
|
||||||
Capital in excess of par value
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income
|
(
|
)
|
(
|
)
|
||||
Treasury stock – at cost (
|
(
|
)
|
(
|
)
|
||||
Total SMP stockholders’ equity
|
|
|
||||||
Noncontrolling interest
|
|
|
||||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
(In thousands)
|
Three Months
Ended
March 31,
|
|||||||
|
2022
|
2021
|
||||||
|
(Unaudited)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net earnings
|
$
|
|
$
|
|
||||
Adjustments to reconcile net earnings to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Amortization of deferred financing cost
|
|
|
||||||
Increase to allowance for expected credit losses
|
|
|
||||||
Increase to inventory reserves
|
|
|
||||||
Equity income from joint ventures
|
(
|
)
|
(
|
)
|
||||
Employee Stock Ownership Plan allocation
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Decrease in deferred income taxes
|
|
|
||||||
Loss on discontinued operations, net of tax
|
|
|
||||||
Change in assets and liabilities:
|
||||||||
(Increase) decrease in accounts receivable
|
(
|
)
|
|
|||||
Increase in inventories
|
(
|
)
|
(
|
)
|
||||
Decrease in prepaid expenses and other current assets
|
|
|
||||||
Increase in accounts payable
|
|
|
||||||
Decrease in sundry payables and accrued expenses
|
(
|
)
|
(
|
)
|
||||
Net changes in other assets and liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Acquisitions of and investments in businesses, net of cash acquired
|
|
(
|
)
|
|||||
Capital expenditures
|
(
|
)
|
(
|
)
|
||||
Other investing activities
|
|
|
||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net borrowings under line-of-credit agreements
|
|
|
||||||
Net borrowings of other debt and lease obligations
|
|
|
||||||
Purchase of treasury stock
|
(
|
)
|
(
|
)
|
||||
Increase in overdraft balances
|
|
|
||||||
Dividends paid
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Effect of exchange rate changes on cash
|
|
(
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
CASH AND CASH EQUIVALENTS at beginning of period
|
|
|
||||||
CASH AND CASH EQUIVALENTS at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
|
$
|
|
||||
Income taxes
|
$
|
|
$
|
|
(In thousands)
|
Common Stock
|
Capital in Excess of Par Value
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock
|
Total
SMP
|
Non-
Controlling Interest
|
Total
|
||||||||||||||||||||||||
Balance at December 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Net earnings (loss)
|
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Cash dividends paid
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Employee Stock Ownership Plan
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at March 31, 2022
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
(In thousands)
|
Common Stock
|
Capital in Excess of Par Value
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock
|
Total
SMP
|
Non-
Controlling Interest
|
Total
|
||||||||||||||||||||||||
Balance at December 31, 2020
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Net earnings
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Cash dividends paid
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Employee Stock Ownership Plan
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at March 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
Standard
|
|
Description
|
|
Date of
adoption /
Effective Date
|
|
Effects on the financial
statements or other
significant matters
|
|
||||||
ASU 2020-04, Reference Rate Reform (Topic 848):
Facilitation of the Effects of Reference Rate Reform on Financial Reporting
|
|
This standard is intended to provide optional
guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The new standard is applicable to contracts that reference LIBOR, or another reference
rate, expected to be discontinued due to reference rate reform.
|
|
Effective March 12, 2020 through December 31,
2022
|
|
The new standard may be applied as of the beginning of an interim period that includes March 12, 2020 through December 31, 2022. As certain of our
contracts reference LIBOR, including our supply chain financing arrangements, we are currently reviewing the optional guidance in the standard to determine its impact upon the discontinuance of LIBOR. At this time, we do not believe that the
new guidance, nor the discontinuance of LIBOR, will have a material impact on our consolidated financial statements and related disclosures.
|
Purchase price
|
$
|
|
||||||
Assets acquired and liabilities assumed:
|
||||||||
Receivables
|
$
|
|
||||||
Inventory
|
|
|||||||
Other current assets (1)
|
|
|||||||
Property, plant and equipment, net
|
|
|||||||
Operating lease right-of-use assets
|
|
|||||||
Intangible assets
|
|
|||||||
Goodwill
|
|
|||||||
Current liabilities
|
(
|
)
|
||||||
Noncurrent operating lease liabilities
|
(
|
)
|
||||||
Deferred income taxes
|
(
|
)
|
||||||
Net assets acquired
|
$
|
|
(1) |
|
Purchase price
|
$
|
|
||||||
Assets acquired and liabilities assumed:
|
||||||||
Receivables
|
$
|
|
||||||
Inventory
|
|
|||||||
Other current assets (1)
|
|
|||||||
Property, plant and equipment, net
|
|
|||||||
Operating lease right-of-use assets
|
|
|||||||
Intangible assets
|
|
|||||||
Goodwill
|
|
|||||||
Current liabilities
|
(
|
)
|
||||||
Noncurrent operating lease liabilities
|
(
|
)
|
||||||
Deferred income taxes
|
(
|
)
|
||||||
Subtotal
|
|
|||||||
Fair value of acquired noncontrolling interest
|
(
|
)
|
||||||
Net assets acquired
|
$
|
|
(1) |
|
Purchase Price
|
$
|
|
||||||
Assets acquired and liabilities assumed:
|
||||||||
Inventory
|
$
|
|
||||||
Machinery and equipment, net
|
|
|||||||
Intangible assets
|
|
|||||||
Net assets acquired
|
$
|
|
|
Workforce
Reduction
|
Other Exit
Costs
|
Total
|
|||||||||
Exit activity liability at December 31, 2021
|
$
|
|
$
|
|
$
|
|
||||||
Restructuring and integration costs: |
||||||||||||
Amounts provided for during 2022
|
||||||||||||
Cash payments
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Exit activity liability at March 31, 2022
|
$
|
|
$
|
|
$
|
|
|
March 31,
2022
|
December 31,
2021
|
||||||
|
(In thousands)
|
|||||||
Finished goods
|
$
|
|
$
|
|
||||
Work in process
|
|
|
||||||
Raw materials
|
|
|
||||||
Subtotal
|
|
|
||||||
Unreturned customer inventories
|
|
|
||||||
Total inventories
|
$
|
|
$
|
|
|
March 31,
2022
|
December 31,
2021
|
||||||
|
(In thousands)
|
|||||||
Customer relationships
|
$
|
|
$
|
|
||||
Patents, developed technology and intellectual property
|
|
|
||||||
Trademarks and trade names
|
|
|
||||||
Non-compete agreements
|
|
|
||||||
Supply agreements
|
|
|
||||||
Leaseholds
|
|
|
||||||
Total acquired intangible assets
|
|
|
||||||
Less accumulated amortization (1)
|
(
|
)
|
(
|
)
|
||||
Net acquired intangible assets
|
$
|
|
$
|
|
(1) |
|
Balance Sheet Information
|
March 31,
2022
|
December 31,
2021
|
||||||
Assets
|
||||||||
Operating lease right-of-use assets
|
$
|
|
$
|
|
||||
|
||||||||
Liabilities
|
||||||||
Sundry payables and accrued expenses
|
$
|
|
$
|
|
||||
Noncurrent operating lease liabilities
|
|
|
||||||
Total operating lease liabilities
|
$
|
|
$
|
|
||||
Balance Sheet Information
|
March 31,
2022
|
December 31,
2021
|
||||||
Weighted Average Remaining Lease Term
|
||||||||
Operating leases
|
|
|
||||||
|
||||||||
Weighted Average Discount Rate
|
||||||||
Operating leases
|
|
%
|
|
%
|
Expense and Cash Flow Information
|
Three Months Ended
March 31,
|
|||||||
2022
|
2021
|
|||||||
Lease Expense
|
||||||||
Operating lease expense (a)
|
$
|
|
$
|
|
||||
Supplemental Cash Flow Information
|
||||||||
Cash paid for the amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$
|
$
|
||||||
Right-of-use assets obtained in exchange for new lease obligations:
|
||||||||
Operating leases
|
$
|
$
|
(a) |
|
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total lease payments
|
$
|
|
||
Less: Interest
|
(
|
)
|
||
Present value of lease liabilities
|
$
|
|
|
March 31,
2022
|
December 31,
2021
|
||||||
|
(In thousands)
|
|||||||
Revolving credit facilities
|
$
|
|
$
|
|
||||
Other (1)
|
|
|
||||||
Total debt
|
$
|
|
$
|
|
||||
|
||||||||
Current maturities of debt
|
$
|
|
$
|
|
||||
Long-term debt
|
|
|
||||||
Total debt
|
$
|
|
$
|
|
(1) |
|