In This Article:
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Standard Motor Products Inc (NYSE:SMP) reported a nearly 25% increase in sales, with a 5% growth excluding the recent Nissan's acquisition.
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The company achieved a $20 million increase in EBITDA and a 350 basis point lift in EBITDA margin.
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Both the vehicle control and temperature control segments set all-time records for first-quarter sales.
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The acquisition of Nissan's has been successful, with both sales and profits exceeding expectations.
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SMP's manufacturing footprint in North America provides a structural advantage in the current tariff environment.
Negative Points
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The engineered solutions segment experienced an 11.2% decline in sales due to slower production schedules at customer sites.
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There is ongoing uncertainty regarding tariffs, which could impact future financial performance.
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Cash used in operations increased to $60.2 million, up from $45.7 million last year, primarily due to increased accounts receivable and inventory balances.
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The company has a higher net debt of $600.3 million following the Nissan's acquisition.
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The integration of Nissan's is still in early stages, with expected synergies and sales growth not yet realized.
Q & A Highlights
Q: Eric, if I heard you correctly, you said that POS and vehicle control was up in the quarter. Could you maybe size that up a little bit, and I know it had been flattish as of late. Have you guys seen an acceleration or anything to point to? A: Yes, correct on both points. Coming out of much of last year was relatively flat, but in the first quarter of this year, we did see positive gains in the low single digits. Now, of course, that's an aggregate number combining all of our major customers, but it was low single digits in the quarter. - Eric Sills, CEO.
Q: Regarding tariffs, there's been some talk about relief for imported foreign auto parts. Does that include aftermarket parts, notably from China? A: We are still reviewing the details of the recent announcement, but it appears to be more geared towards relief for automakers. At this point, we expect minimal impact on us. - Eric Sills, CEO.
Q: On the Nissan's business, could you talk about European aftermarket trends and the general health of the aftermarket there? A: In Europe, similar trends are observed as in the US, with some softness in certain categories. However, hard failure items and more DIFM type items tend to outperform. Nissan's is well-positioned to take advantage of these trends and should continue to outperform the general aftermarket trends. - Eric Sills, CEO.