Standard Motor Products Q1 2025 Earnings Call Transcript

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April 30, 2025
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Operator

Good day, everyone, and welcome to the Standard Motor Products First Quarter twenty twenty five Earnings Call. 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. Please note, today's call will be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Tony Cristello, Vice President of Investor Relations.

Operator

Please go ahead.

Anthony Cristello
Anthony Cristello
VP - IR at Standard Motor Products

Thank you, Chloe, and good morning, everyone. Thank you for joining us on Standard Motor Products' first quarter twenty twenty five earnings conference call. With me today are Larry Sills, Chairman, Emeritus Eric Sills, Chairman and Chief Executive Officer Jim Burke, Chief Operating Officer and Nathan Iles, Chief Financial Officer. On our call today, Eric will give an overview of our performance in the quarter, and Nathan will then discuss our financial results. Eric will then provide some concluding remarks and open the call up for Q and A.

Anthony Cristello
Anthony Cristello
VP - IR at Standard Motor Products

Before we begin this morning, I'd like to remind you that some of the material that we'll 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 now turn the call over to Eric Sills, our CEO.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Thank you, Tony, and good morning, and welcome to our first quarter earnings call. It's good to be with you today. I'll start my prepared remarks reflecting on our performance in the quarter and will then turn my attention to the current business climate, how we're viewing it and how we are responding. Overall, we are very pleased with our performance in the quarter as both the top and bottom lines exceeded our expectations. For sales, we were up nearly 25%.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

And while much of the growth was due to the inclusion of our recent Nissens acquisition, excluding Nissens, sales were up nearly 5%, so we feel the year is off to a good start. We also had strong results in terms of profitability. Similar to the sales story, while the Nissans business provided some of the expansion, our other segments also showed strong gains. We generated a $20,000,000 increase in EBITDA and a three fifty basis point lift in EBITDA margin. Let me discuss each business separately in terms of our performance, how we view the basic dynamics in this space and how we differentiate ourselves to capitalize on our strengths.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

I'll start with North American aftermarket, the largest part of our business comprised of two operating segments, Vehicle Control and Temperature Control. Both of these segments set all time records for first quarter sales. For Vehicle Control, sales increased 3.7% in the quarter, continuing the growth trend we've been enjoying for the last several periods. We believe this is due to a combination of market dynamics and our relative strength in the marketplace. All the macro trends continue to be favorable.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

The car park is growing and aging, and as times get economically challenging, consumers tend to delay new car purchases and instead maintain the ones they have. Car owners may forgo discretionary purchases or delay maintenance work, but the majority of what we sell are hard failure products, which are nondiscretionary in nature and typically cannot be deferred. Additionally, most of our products are professionally installed, and technicians stick with the brands they trust. Therefore, not only has demand remained strong from our customers, importantly, they are reporting positive sell through of our products in the quarter as well. Our other aftermarket segment, Temperature Control, is off to a very strong start.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

We exited last year with robust numbers, and that trend has continued with sales in the quarter up 24% over last year. You see a few drivers here. First off, the segment enjoys the same macro tailwinds described in Vehicle Control, stable addressable market, nondiscretionary products and strong brand equity. As such, the quarter was marked by solid customer sell through with customer POS up high single digits over last year. But as a seasonal business, the beginning of the year tends to be driven by preparation for the upcoming season.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

We therefore received preseason orders from the majority of our customer base, and this year, we saw a lot of those ship in the first quarter. But as you know, the segment's success is determined by the selling season, which typically begins towards the end of the second quarter, so we look forward to a long hot summer. Next, let me discuss our Engineered Solutions segment, where we serve various global end markets with products for new vehicle and equipment production. The softness in the last year has continued, and sales were down 11.2%. As opposed to the aftermarket, this segment can be more impacted by cyclical trends.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

And as some of our customers are experiencing downturns in their end markets, they are reducing their production schedules and thus their purchases from us. Importantly, while the top line was down, the customer and product mix has been favorable, and therefore, the segment profits were up from last year. So how do we view this business and our position within it? We believe that while there can be volatility quarter to quarter, the longer term trends are favorable. The markets are global, large and diverse, and we are starting from a small base.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

We are now gaining market exposure as a highly capable producer with a broad portfolio of products, which is leading to new business awards.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Therefore, the future for engineered solutions remains bright both in its own right and as an excellent complement to the aftermarket. Lastly, I'll speak about our newest part of our company, Nissens. This was the first full quarter of ownership,

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

and we are delighted with how it performed. Both sales and profits exceeded our expectations. Has a strong position in the market for many of the same reasons as described here in North America. They have a broad offering of professional grade products with a brand that is well known and well regarded. And as Europe is a highly DIFM market, Nissen does very well.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Importantly, the more we work with the Nissen's team, the more we know that we are a perfect fit together. We see complementary go to market strategies, product portfolios, and cultural alignment. We have global customers that we either share or are introducing to each other. We are finding excellent means of collaboration, leading to significant synergies, all while providing business and geographic diversification. We see a great future together and look forward to keeping you abreast of our integration status.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Okay. Having given a rundown of the quarter, I'd like to now spend a few moments talking about the current business environment, how we are thinking about the potential impacts, and what we believe differentiates us in a way that will provide a competitive advantage. The topic on everyone's mind obviously is tariffs. Needless to say, we are in a fluid situation, so it's impossible to state with certainty how it will play out. But as things currently stand, we believe that our commitment to being a basic manufacturer with a concentration in North America gives us a level of protection and an advantage over other players.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

A few decades ago, when the aftermarket began seeking low cost regions, most companies chose China. We chose Mexico. Fast forward to today, over half of our sales in The United States comes from product manufactured in North America, mostly Mexico but also The U. S. And a bit in Canada.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

As our Mexican and Canadian products are USMCA compliant, they remain tariff free. And while we do incur some tariffs on components used in our U. S. Production, it is nominal in terms of our total cost structure. And while the balance of our products are imported from elsewhere, only about onefour of all U.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

S. Sales are from China, with the rest being from Europe and other lower tariff countries. We are currently heavily engaged in our mitigation efforts. From a cost containment perspective, we are working upstream with our suppliers to reduce prices and to relocate to lower tariff regions, and we are leveraging our footprint to optimize our supply chain, including deferring imports into The U. S.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Until the products are needed. But most of our tariff recovery is through pricing actions. While we do believe that our tariff exposure will be lower than many, it is our full intent to pass them through to our customers at our cost as we have in the past. Lastly, going back to the notion of our products being nondiscretionary, they tend to be price inelastic, meaning we would not anticipate any degradation in demand. It's also worth reminding you that due to our two newer segments, Engineered Solutions and Nissens, we have seen nice geographic diversification.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

The U. S. Now represents about 70% of our sales, down from about 90% a few short years ago. So again, while we are in a complex and challenging business environment, we feel good about our position relative to others and in our ability to navigate it. With that, I will turn it over to Nathan to review the numbers.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

All right. Thank you, Eric. Good morning, everyone. As we go through the numbers, I'll first give some color on the results for the quarter by segment and at the consolidated level. I'll then cover some key cash flow metrics and finish with an update on our financial outlook for the full year of 2025.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

First, looking at our Vehicle Control segment, you can see on the slide that net sales of $192,300,000 in Q1 were up 3.7% with the increase driven by steady demand for our products. Vehicle Control's adjusted EBITDA in the first quarter increased to 11.6%, up 120 basis points from last year. The increase in adjusted EBITDA was driven by a higher gross margin rate, mainly due to higher sales and lower factoring expenses as a percent of sales, which was mainly the result of timing of collections during the quarter. Looking at Temperature Control, net sales in the quarter for that segment of $88,900,000 were up 24.1%. The first quarter benefited from a strong start to preseason ordering, which started earlier this year than last and also good sell through.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

As we always note, the first quarter is not indicative of how the full year will turn out in a weather dependent business like Temp Control, but we were pleased to get off to another good start. Temperature Control's adjusted EBITDA increased in Q1 to 10.6 as higher sales volumes led to a higher gross margin rate and improved operating expenses as a percent of sales in the quarter. Sales for Engineered Solutions segment in the quarter were down 11.2%, but this softness was expected as we continue to see slower production schedules at our customers as they react to softness across their various markets. Customer demand can be lumpy over time, particularly in certain markets, but we expect to continue to win business to offset these market headwinds. Despite lower sales, adjusted EBITDA for Engineered Solutions in the quarter of 9.7% was up from last year, driven by a better mix of products sold as well as the benefit of a stronger U.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

S. Dollar versus Mexican peso, which helped to lower our manufacturing costs in the quarter. To wrap up on operating segments, let me talk a little about Nissens Automotive. This was our first full quarter of ownership and Nissens added $66,200,000 of net sales in the quarter and $11,500,000 of adjusted EBITDA. The business is performing as expected and exceeded our earlier estimate of the mid teens EBITDA percent business coming in at 17.3% for the quarter.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

Nissens continues to grow its sales across Europe and gross margin has been good as well. First quarter also benefited from some favorable currency movements. To summarize and put it all together across our four segments for Q1, consolidated net sales increased 24.7% and adjusted EBITDA increased to 10.4% of net sales, while non GAAP diluted earnings per share were up 80% versus last year. Turning now to cash flows. Cash used in operations for the quarter of $60,200,000 was up from cash used to $45,700,000 last year.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

While we always use cash during Q1 and the first half of the year due to seasonal working capital needs, the higher cash usage this year was primarily a result of increased accounts receivable and inventory balances related to sales growth in the quarter. Our investing activities show capital expenditures of $9,100,000 which includes $3,500,000 of investment related to our new distribution center. Financing activities show payment of $6,800,000 of dividends as well as borrowings for the year of $79,100,000 so far, which were used mainly to fund our working capital needs. Our net debt of $600,300,000 at the end of Q1 was higher than last year after borrowings made for the acquisition. We finished Q1 with a leverage ratio of 3.75 times EBITDA, but accounting for a full twelve months of EBITDA from Nissens, leverage would be less than 3.5 times.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

Before I finish, I want to give an update on our sales and profit expectations for the full year of 2025. As we noted in our release this morning, while tariffs have introduced uncertainty into the macro environment, setting those aside, we're affirming our prior outlook as our business continues to perform well. As a reminder, we expect to see net sales percentage growth in the mid teens percentages for the full year and adjusted EBITDA margin to be in a range of 10% to 11% of net sales with both measures including growth from Nissan's automotive as we'll have twelve months of results versus two months in 2020. As I said, 2025 outlook does not include any impact from the recently announced tariff actions. Whatever the impact is in our business, we plan to address higher costs by passing them through in price dollar for dollar.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

We will update our guidance as necessary in future quarters when there's greater clarity regarding the situation. To wrap up on the financial side, we were very pleased with our sales and earnings growth in the first quarter. While it's still early, we started the year well with earnings up across all segments, which really shows the ongoing strength of our business. Thank you for your time. I'll turn the call back to Eric for some final comments.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Thank you, Nathan. So to close, let me spend a moment reflecting on how we're viewing things. We're coming off not just a strong start to the year but several quarters in a row of strengthening performance, and we feel we have good momentum. The world now finds itself in uncharted territory with an uncertain and fragile economic climate, so the question becomes how well positioned are we to navigate it. We believe that we have many structural underpinnings that will provide us with a relative advantage.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Within North America, the majority of our business is in an industry known for its resilience in turbulent times. Historically, the aftermarket has been able to mute the impact of economic downturns and, in fact, tends to outperform. The car park usually ages during these cycles as new car sales can become depressed and motorists have no choice but to make the necessary repairs to keep their cars operational. While we believe the tariffs will likely lead to some inflation, our nondiscretionary parts by definition will still be in need. Furthermore, S and P has spent the last century investing in operational excellence, and we tend to do better than most during tough times.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Our manufacturing footprint provides structural advantages. Beyond cost implications in a tariff environment, it's also provided supply chain stability. As we look back to the challenges coming out of the pandemic lockdowns, we outperformed. By operating our own factories rather than overly relying on third party sources, we were better able to control output. And by being less reliant on China, we were less impacted by shipping and container disruptions.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

And as a result, we are better able to service our customer. Beyond that, we have now expanded our business outside of The U. S. And believe that geographic diversification will also help us to dampen the impact of the turbulence we are seeing domestically. The integration of Nissans is on track to yield significant synergies with teams working on product line expansion on both sides of the ocean to fuel growth as well as savings programs focused on combined resources and best cost sourcing.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Add to that various other cost reduction programs being pursued throughout the enterprise and tackling it all with the best group of people to make it happen, we feel good about the future. And with that, I'll turn it back to the moderator, and we'll open it up for questions.

Operator

Thank

Operator

you.

Operator

We'll take our first question from Scott Stember with ROTH. Your line is open.

Scott Stember
Executive Director & Senior Research Analyst at Roth Capital Partners, LLC

Good morning, guys, and thanks for taking my questions.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Good morning, Scott.

Scott Stember
Executive Director & Senior Research Analyst at Roth Capital Partners, LLC

Eric, if I heard you correct, 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?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Yes. Correct on both points. Coming out of much of last year was relatively flat. 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 customers all of our major customers.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

But yes, was low single digits in the quarter.

Scott Stember
Executive Director & Senior Research Analyst at Roth Capital Partners, LLC

Okay, got it. And then regarding tariffs, I know there's a lot of moving pieces here, but there's been some talk about some relief for imported foreign auto parts. Not sure if that's just referring to OEM based parts or does that, have you guys been able to clarify whether that means that there will be some relief, notably for Chinese parts, for the aftermarket?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

So I assume you're referring to the announcement that just came out in the last twenty four hours. So we're we're still reading the details of it, but it does appear that it's much more geared towards relief for the automakers. And so at this point, again, we're still reading it, but we're expecting that to have minimal impact on us.

Scott Stember
Executive Director & Senior Research Analyst at Roth Capital Partners, LLC

Okay. And then last question on Nissans. Obviously, a great contribution there in the quarter. Can you just give an idea, I know that you didn't own them last year, but on a pro form a basis, it sounds like they're growing faster than the core business organically and any cross pollination wins or, you know, good stuff that you've seen early on?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Okay. So in terms of of their growth or performance, we didn't own them a year ago, so we're not showing that comps. But what I would say is that they continue to show growth and to perform very well in that market. So the trends that we have been speaking about prior to the acquisition of being in that outperforming the European aftermarket, that trend did continue. In terms of wins since the acquisition, we're still in the earlier stages of that, so nothing that's showing through the P and L.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

We do have, as I said, teams working on building out each other's catalogs. So really, the way we see 2025 as being the preparation year as we add the coverage, put inventory in place and whether that's adding SKUs to existing categories, for example, they have compressors that we don't have or vice versa, or it's entirely new product line expansions, a category that they heretofore did not have or vice versa. That work is happening this year, where we would expect to see any sales lift really in 2026. We are talking to each other's customers, and we do believe that there are opportunities there as well, but nothing to report at this point that you're going to start seeing.

Scott Stember
Executive Director & Senior Research Analyst at Roth Capital Partners, LLC

Got it. That's all I have for now. Thank you.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Thank you, Scott.

Operator

We'll take our next question from Bret Jordan with Jefferies. Your line is open.

Bret Jordan
Managing Director at Jefferies LLC

Hey, good morning guys.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Good morning, Bret.

Bret Jordan
Managing Director at Jefferies LLC

When you look at the tariffs and you look at the competitive product for you out there, whether it's Wells or whether it's OE alternative in temperature control or vehicle control, how does your tariff exposure and production footprint stack up, I guess, of your relative price value versus the competition in this current tariff environment? Have you gained ground in the sense that you're more North American and more of your competition is import? Or have the OEs gained ground because they're getting relief on import and they are North American as well?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

We believe that in general, our footprint is favorable to the competition. Obviously, it'll yet to be seen how the competitors look to address it in the marketplace. But we believe, overall, we have a structural advantage, whether it's against the pure play aftermarket guys that you're referring to or against any of the Tier 1s, we see ourselves being at a structural advantage.

Bret Jordan
Managing Director at Jefferies LLC

Okay. And then on the admissions business, could you talk about just European aftermarket trends, what they're seeing in POS and the general health of the aftermarket on that side of the ocean?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Yeah. So as we look at the overall market in Europe, now you're hearing some of the similar things from the big players over there as the distributors are reporting here, which is, you know, you're seeing some softness in certain categories, but, you know, hard failure items and more DIFM type items tending to outperform. So you see a lot of similar trends there, which Nissens is well positioned to take advantage of. And so we believe that they should stand to continue to outperform over there, the general aftermarket trends.

Bret Jordan
Managing Director at Jefferies LLC

Okay. And then I guess one last question, just sort of on this the cadence of this year's outlook. Did you think you saw a lot of pull forward in Q1 orders that people were trying to bring inventory in ahead of who knew what was going to be on tariffs the next day? And that, that will have drawn from Q2 and we need to sell out before we replenish? Or do you think it's strong sequentially through the year?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

So we don't believe that we've seen any pull forward in trying to beat the tariffs. What we have not seen any evidence of that. We do believe, and I think we basically alluded to this through our comments, that on the temperature controlled preseason, which have nothing to do the timing of that has nothing to do with tariffs, we get those orders in really mostly towards the end of the previous year and start working on them. Those often can ship either towards the end of the first quarter or the beginning of the second quarter in any given year. This year, they were a little bit more front loaded, so we would expect to see kind of an offset on the preseason portion of temperature control.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

But beyond that, we haven't seen any customer behavior that suggests they're trying to get ahead of the tariffs.

Bret Jordan
Managing Director at Jefferies LLC

Okay. And then one final question. As you think about the retailers' treatment of these tariffs, are you hearing from them that they're pretty open to you're passing them through? Or is it a tough negotiation because they're concerned about just sort of the price shock on the consumer?

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Well, certainly, everything is a negotiation, but we're in communications with all of them. And we believe that our approach to it, where there's a sharing of it by us working upstream on mitigation efforts and an expectation that they would take on the balance, We feel good that the process that we developed going back to 2018, '20 '19 tariffs will be sticky and that we'll build with them a program that says, look, I think we're in a very volatile time. I don't think the tariffs as they stand today are going to continue to be what they are. I think we're going to continue to see movements up or down, hopefully down. And we'll develop processes with our customers that allow us to adjust accordingly.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

So as long as we continue to be fair and rational, we believe that we'll our program will be well received.

Bret Jordan
Managing Director at Jefferies LLC

Great. Thank you.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Thank you, sir.

Operator

We'll move next to Carolina Jolley with Gabelli. Your line is open.

A. Carolina Jolly
Senior Research Analyst at Gabelli Funds

Great. Thanks for taking my questions.

Eric Sills
Eric Sills
CEO, President & Chairman at Standard Motor Products

Good morning,

A. Carolina Jolly
Senior Research Analyst at Gabelli Funds

Good morning. Any just a quick clarification question. Any current impact from tariffs in first quarter?

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

Yes. Hi, Caroline, it's Nathan. No, we didn't really see any impact of tariffs from new tariffs that is that came in 2025 in our Q1 numbers. Obviously, a little bit of cash flow impact is that the tariffs are paid upfront. But as you know, the cost has to work its way through the inventory.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

And so any cost impact comes later in the year.

A. Carolina Jolly
Senior Research Analyst at Gabelli Funds

Okay, perfect. Thanks for that. And then second, the quarter came in pretty strong, definitely above our estimates. Can you kind of discuss, given that you maintained guidance, any benefits you saw in the first quarter that you don't necessarily expect to roll through? And I know I know you discussed the pre buy and everything, but anything else?

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

Yeah. I I think as Eric mentioned about preseason ordering and temp control, right, you kinda have to look at that segment certainly as a as a first half year over year. And so there was a little bit of selling ahead of this time last year for that segment. So that plays into keeping the guidance where it was certainly as that was an outsized impact on the quarter. And I think just coming out of first quarter with all the uncertainty around tariffs and how we'll deal with them, how others will deal with them, felt like it was good to keep our guidance where it was and update accordingly as we go through the year.

A. Carolina Jolly
Senior Research Analyst at Gabelli Funds

Great. Thank you.

Operator

And we do have a follow-up from Scott Stember with Roth. Your line is open.

Scott Stember
Executive Director & Senior Research Analyst at Roth Capital Partners, LLC

Yes. Just following up on the facility move that you guys are undergoing in Kansas. Can you maybe talk about the status of that costs related in the quarter, whether the total cost for the year have changed and any synergy updates?

James Burke
James Burke
Director & COO at Standard Motor Products

Okay. Hi, Scott. It's Jim Burke. Yes. We're right in the the midst of updating, Shaunie, with the installation, the automation that we've put in there.

James Burke
James Burke
Director & COO at Standard Motor Products

Currently well, just to refresh everybody's memory, we plan to move into the Shawnee facility to move the top moving numbers from our Virginia Lewisville facility, risk avoidance, top a and b numbers, and also then shed the facility that we have in Edwardsville, Kansas. We've implemented an automation project that's there, and that's in testing at the moment. We'll be moving more product in shortly in mid twenty five, and then it'll be complete, our plan, by the end of twenty twenty five with the temperature control product that's moving in there. Regarding the the costs within the quarter, I'll let Nathan respond.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

Yeah. Hey, Scott. It's Nathan. So going back to when we started the start up for the warehouse coming out of 2023, really, we talked about something like a 6,000,000 to $8,000,000 incremental cost start up range, and then that would come down over time. We're kinda still seeing that in that same range.

Nathan Iles
Nathan Iles
Chief Financial Officer at Standard Motor Products

So, you know, in in the quarter, a couple million dollars related to the warehouse. And then as we get fully operational later this year, we can update more on how that cost is looking.

James Burke
James Burke
Director & COO at Standard Motor Products

Got it. Thanks again.

Operator

And it does appear that there are no further questions at this time. I would now like to turn the call back to management for any additional or closing remarks.

Anthony Cristello
Anthony Cristello
VP - IR at Standard Motor Products

Thank you, and we want to thank everyone for participating in our conference call today. We understand there's a lot of information presented, and we'll be happy to answer any follow-up questions you may have. Our contact information is available on our press release or Investor Relations website. Hope you have a great day. Thank you.

Operator

This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful afternoon.

Executives
    • Anthony Cristello
      Anthony Cristello
      VP - IR
    • Eric Sills
      Eric Sills
      CEO, President & Chairman
    • Nathan Iles
      Nathan Iles
      Chief Financial Officer
    • James Burke
      James Burke
      Director & COO
Analysts
    • Scott Stember
      Executive Director & Senior Research Analyst at Roth Capital Partners, LLC
    • Bret Jordan
      Managing Director at Jefferies LLC
    • A. Carolina Jolly
      Senior Research Analyst at Gabelli Funds
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Key Takeaways

  • Q1 performance: Consolidated net sales rose 24.7% and adjusted EBITDA climbed by $20 million, boosting margins by 350 basis points, while organic sales growth was nearly 5% excluding Nissens.
  • North American aftermarket strength: Vehicle Control delivered record first-quarter sales up 3.7% and Temperature Control rose 24% on stable, nondiscretionary demand and strong preseason orders.
  • Engineered Solutions resilience: Sales fell 11.2% amid global production softness, but EBITDA margin improved to 9.7% thanks to a favorable product mix and currency tailwinds.
  • Nissens integration: In its first full quarter, Nissens contributed $66.2 million in sales and $11.5 million of EBITDA (17.3% margin), with integration synergies and global diversification poised to drive future growth.
  • Tariff mitigation and guidance: With over half of U.S. sales produced in USMCA-compliant facilities, SMP is mitigating tariffs through supplier actions and dollar-for-dollar price pass-through, and it reaffirmed mid-teens sales growth and 10–11% EBITDA margin guidance for 2025.
AI Generated. May Contain Errors.
Earnings Conference Call
Standard Motor Products Q1 2025
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