U.S. markets open in 2 hours 40 minutes
  • S&P Futures

    3,419.75
    -32.00 (-0.93%)
     
  • Dow Futures

    27,924.00
    -265.00 (-0.94%)
     
  • Nasdaq Futures

    11,570.00
    -93.50 (-0.80%)
     
  • Russell 2000 Futures

    1,614.80
    -20.80 (-1.27%)
     
  • Crude Oil

    39.09
    -0.76 (-1.91%)
     
  • Gold

    1,904.70
    -0.50 (-0.03%)
     
  • Silver

    24.35
    -0.32 (-1.32%)
     
  • EUR/USD

    1.1825
    -0.0044 (-0.37%)
     
  • 10-Yr Bond

    0.8410
    0.0000 (0.00%)
     
  • Vix

    29.83
    +1.72 (+6.12%)
     
  • GBP/USD

    1.3074
    +0.0036 (+0.28%)
     
  • USD/JPY

    104.8320
    +0.1420 (+0.14%)
     
  • BTC-USD

    13,102.75
    +25.74 (+0.20%)
     
  • CMC Crypto 200

    262.96
    +1.50 (+0.57%)
     
  • FTSE 100

    5,841.77
    -18.51 (-0.32%)
     
  • Nikkei 225

    23,494.34
    -22.25 (-0.09%)
     

Edited Transcript of SMP earnings conference call or presentation 19-Feb-20 4:00pm GMT

·23 mins read

Q4 2019 Standard Motor Products Inc Earnings Call LONG ISLAND CITY Feb 26, 2020 (Thomson StreetEvents) -- Edited Transcript of Standard Motor Products Inc earnings conference call or presentation Wednesday, February 19, 2020 at 4:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Eric Philip Sills Standard Motor Products, Inc. - CEO, President & Director * James J. Burke Standard Motor Products, Inc. - COO * Lawrence I. Sills Standard Motor Products, Inc. - Executive Chairman * Nathan R. Iles Standard Motor Products, Inc. - CFO ================================================================================ Conference Call Participants ================================================================================ * Ethan David Huntley Jefferies LLC, Research Division - Equity Associate * Robert Smith;Center for Performance Investing;Analyst * Scott Lewis Stember CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day, everyone, and welcome to today's Standard Motor Products Fourth Quarter Earnings Release. (Operator Instructions) Please note this call may be recorded. And it is now my pleasure to turn the call over to Larry Sills. Please go ahead. -------------------------------------------------------------------------------- Lawrence I. Sills, Standard Motor Products, Inc. - Executive Chairman [2] -------------------------------------------------------------------------------- Good morning, everyone, and welcome to Standard Motor Products Fourth Quarter Conference Call, and we thank you for attending. Here for the company, Eric Sills, President and CEO; Jim Burke, Chief Operating Officer; Nathan Iles, Chief Financial Officer; and myself, Larry Sills, Executive Chairman. Agenda for today. Nathan will begin by reviewing our 2019 results, then Jim Burke will emphasize a few of the highlights of 2019 and some early thoughts about 2020. Eric will then go into some of our key operational and strategic issues and then we'll open it for questions. So with that, let's go, Nathan. -------------------------------------------------------------------------------- Nathan R. Iles, Standard Motor Products, Inc. - CFO [3] -------------------------------------------------------------------------------- Thank you, Larry. As a preliminary note, I would like to point out that some of the material we will 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. Now we'll turn to the financial results for the company. Looking at the P&L. Consolidated net sales in Q4 2019 were $241.3 million, down $5.7 million or 2.3% versus Q4 last year. As discussed throughout the year, we acquired the Pollak business from Stoneridge on April 1, 2019. Incremental sales from the Pollak acquisition were $8.1 million in Q4 and $28.2 million for the full year. Our consolidated net sales in Q4, excluding the Pollak acquisition, were $233.2 million, down $13.9 million or 5.6%, but for the full year 2019 finished higher at $1.12 billion, an increase of $17.6 million or 1.6%. By segment, Engine Management net sales in Q4, excluding Pollak and wire and cable sales, were $159.1 million, down $6.5 million or 3.9%, but coming in line with our customers' POS sales, as noted in our last call. However, for the full year 2019, sales were $677.8 million, finishing up $29.6 million or 4.6% over last year. Wire and cable net sales in Q4 were $34.7 million, down $2.7 million or 7.2%, and for the full year were $143.2 million, down $12 million or 7.8%. Temperature Control net sales in Q4 2019 were $36.7 million, down $5.1 million or 12.1%, and for the full year were $278.4 million, which is essentially flat with the prior year. We anticipate the Temperature Control fourth quarter sales to be down following the very strong first half preseason ordering by our customers in 2019. Further, 2018 was one of the hottest summers on record, and we are pleased to have seen our full year volumes stay in line despite some cooler temperatures. Consolidated gross margin in Q4 2019 was 30.2% versus 29% last year, up 1.2 points, and for the full year was 29.2% versus 28.6% last year, up 0.6 points. Looking at the segments, Engine Management gross margin in Q4 2019 was 30.6% versus 28.8% last year, up very nicely at 1.8 points, and for the full year was 29.6% versus 28.6% last year, up 1 full point. The improvement in gross margin for Engine Management was driven by significant improvements from the completion of the General Cable wire business as well as continuous cost reduction efforts from in-house manufacturing and low-cost sourcing. These improvements were partially offset by the pass-through of tariffs at cost, which have a slight dampening impact on our margin percentages. Temperature Control gross margin in Q4 2019 was 22.7% versus 22.9% last year, down 0.2 points, and for the full year 2019 was 25.2% versus 25.3% last year, down 0.1 point. As we noted in the engine segment, tariffs have had a dampening effect on our margin percentages, and the slightly lower Temp Control gross margins in the quarter and full year are primarily the result of this effect. Looking to SG&A. Consolidated SG&A expenses in Q4 2019 were $54.2 million, down $1.5 million at 22.5% of net sales versus 22.6% last year, and for the full year were $234.7 million, up $3.4 million at 20.6% of net sales versus 21.2% last year. For both the quarter and full year, we continue to see savings from the reduction of distribution expenses in our Temp Control business. Partially offsetting these savings were incremental SG&A expenses related to our Pollak acquisition and, for the full year, an increase in other variable expenses on higher overall sales volumes. However, we were very pleased to see 1.6 points of favorable operating expense leverage for the full year. Consolidated operating income before restructuring and integration expenses and other income net in Q4 2019 was $18.6 million or 7.7% of net sales, up 1.3 points over Q4 2018, and for the full year was $97.1 million or 8.5% of net sales, up 1 full point over 2018. As we noted on our GAAP-to-non-GAAP reconciliation of operating income, our performance resulted in Q4 2019 diluted earnings per share of $0.59 versus $0.52 last year, and for the full year, diluted earnings per share of $3.10 versus $2.55 last year. The increase in our full year operating profit was impacted by higher sales in Engine Management partly as a result of the acquisition of the Pollak business as well as improvements in Engine Management gross margin and lower SG&A expenses in Temperature Control. Looking now at the balance sheet. Accounts receivable were $135.5 million, down $22 million since December 2018. Accounts receivable in 2018 included $5 million from the sale of our Grapevine, Texas property. Excluding that item, accounts receivable declined mainly as a result of lower sales during Q4 2019 versus the prior year. Inventory levels finished the year at $368.2 million, up $18.4 million from December 2018, with the increase coming primarily from the acquisition of the Pollak business. Total debt at December 31, 2019, was $57 million, reflecting an increase of $7.8 million from December 2018 levels. The slightly higher level of debt includes the impact of acquisition activities, which totaled $43.5 million in 2019. Our cash flow statement reflects $77 million of cash generated from operations, $5 million of cash received from the sale of our Grapevine, Texas facility and $8 million in incremental borrowings, which all totals to $90 million and was used to fund $16 million of capital expenditures, $44 million for the Pollak acquisition and CYJ investment, $21 million of dividends paid and $11 million of share repurchases. In summary, we are very pleased with our strong 2019 full year results, reflecting higher sales volumes, higher gross and operating margins and significant performance improvements from our wire manufacturing consolidation and our Temp Control automated distribution system. Thank you for your attention, and I will now turn the call over to Jim to provide some additional color on our results. -------------------------------------------------------------------------------- James J. Burke, Standard Motor Products, Inc. - COO [4] -------------------------------------------------------------------------------- Okay. Thank you, Nathan. 2019 now is in the record books, reflecting new highs for sales and earnings. As we look back at 2019, sales volumes were very strong in the first half of the year for both Engine Management and Temperature Control. It is best to analyze each segment separately. Engine Management sales, excluding wire and cable and the Pollak acquisition, over the first 3 quarters of 2019 exceeded our customers' POS sales. During that period, customers were broadening their assortment and deploying inventory closer to demand to better serve the installer base. Many times, this is reflected in large pipeline orders. The sales growth in the first 3 quarters of 2019 were sequentially 9.3%, 5.3% and 7.8%. As we pointed out on our earlier calls, we expected our sales to fall back in line with customer POS trends. In Q4, our sales were down 3.9% with full year growth of 4.6%, which was still above our customer POS for the year. In the first quarter 2020, we expect this downward trend to continue as we are up against large pipeline orders in Q1 '19, a comp of 9.3% in the first quarter last year and public customer disclosures pointing to soft demand due to mild weather conditions. Again, long term, we expect Engine Management, excluding wire and cable and acquisitions, to mirror our customers' POS in the low single digits. Temperature Control sales were very strong in Q1 and Q2 of 2019, reflecting large preseason orders following the very hot 2018 summer season. Temp sales were up better than 14% in Q1 and 5% in Q2. This trend reversed in the second half as we finished 2019 essentially flat to 2018 levels. Going into 2020, our customers' inventories were at more normal levels, and we do not anticipate the same magnitude of early preseason orders. We expect the first quarter '20 sales to be down as we are up against the better-than-14% comp last year. Ultimately, 2020 temp sales will depend how hot a summer we get. And long term, we forecast low single-digit growth with all other variables equal. Lastly on sales, we continue to forecast wire and cable sales that are in secular decline to decrease in the 6% to 8% range on an annual basis. Turning to our 2019 record earnings performance. This reflects improvements in 2 critical areas. First, our General Cable wire integration has been completed, achieving historic efficiencies. One of the key drivers to the improvement was the hiring, training and retaining of a stable workforce. We are very pleased by the wire team's efforts and performance in 2019. The second area driving our earnings improvement was a reduction in our Temperature Control distribution costs following the installation of an automated warehouse system at our Lewisville, Texas facility. During the off season, our distribution and IT teams developed many system enhancements that significantly reduced our cost and improved customer turnaround times. These were 2 major areas that drove our results in 2019, but there were many other contributors, including in-house manufacturing and low-cost sourcing. Our go-forward emphasis is on continuous improvement. Looking to 2020, gross margins tend to drop back in the first quarter each year, reflective of the prior year fourth quarter lower production levels and hence higher costs. Normally, as we progress into the second and third quarters, we tend to see incremental improvements in our gross margins. By segment, Engine Management gross margin target is 30%-plus on an annual basis for 2020. And as I just explained, Q1 margins will start the year below the 30% annual target. For Temperature Control, we are targeting gross margins in the high 25% range for the full year. Again, Q1 levels will start lower. Lastly, our projected SG&A expenses should be in the $59 million to $62 million range per quarter in 2020. In summary, 2019 was an excellent year, and with our dedicated employees, we are optimistic looking into 2020 and beyond. Thank you for your attention, and I will turn the call over to Eric. -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [5] -------------------------------------------------------------------------------- Well, thank you, Jim, and good morning, everybody. I'd like to open by thanking all of the folks here at Standard Motor Products for helping to deliver a record-breaking year, setting new highs for both sales and profits. It's a terrific achievement, and I congratulate you all. Well, Nathan and Jim reviewed the numbers and what's behind them, so I'll just hit on a few topics and then open it up to questions. First, let me address where we stand with the coronavirus situation. Although the majority of our product comes from North America and Poland, we do have a significant manufacturing and supply base in China. And for a difficult situation, the timing was fortunate. As we always do, we build inventory ahead of the Chinese New Year shutdown, and as such, our inventory position is in good shape. Furthermore, winter is our slowest season for our Temp Control division, which has higher exposure to China than Engine Management does. As you're aware, we have 3 joint ventures in China, all in the Temperature Control side. We're pleased to say that all of them are now reopened and are coming back up to full speed, and we don't expect any disruption. Regarding third-party suppliers, we've been in constant communication with them, and they are all coming back online. We, therefore, feel reasonably confident from what we know at this time that we won't have any near-term disruption. But that being said, there remains a great deal of uncertainty as China continues to address the situation, so it's very difficult to [predict] longer-term implications. I'd like in the next slide to give you an update on where we are with our 2 2019 acquisitions starting with Pollak acquired in April. To remind you, Pollak is a $40 million-plus business selling various switches, sensors and connectors largely for commercial vehicle applications. About 75% of it is for original equipment, with the remaining 25% sold into the heavy-duty aftermarket channel. The products were manufactured in 2 Stoneridge plants, the majority in Canton, Massachusetts with the balance in Juárez, Mexico. We have now relocated all of the manufacturing to existing SMP locations, mostly into Reynosa, Mexico. The lines have been recommissioned, and we're visibly -- busily going through the approval process with all of the customers. Now that the production is in our low-cost plants, we expect significant savings, but it will take the next several months to get up to full productivity. But what we are most excited about is the ability to grow the business. We are applying resources to both the OE and aftermarket sides and believe there is a very nice opportunity ahead. Next, I'd like to discuss our investment last August in CYJ, a Chinese manufacturer of compressors for electric vehicles. CYJ is quite young and still small, but we are very excited to have entered into this at the ground level. Their customers are mostly Chinese electric car and bus manufacturers, which is a major growth area and one that's new to us. In addition to penetrating the Chinese OE markets, we will be able to utilize their product capabilities to manufacture compressors for the electric vehicles on U.S. roads, including all of the hybrids. And additionally, it fits very well with our other 2 Temp Control JVs in China with complementary products and many other synergies. So while we are still in the early days, we are delighted that they have joined the SMP family. Lastly, we are happy to have announced an increase in our dividend to $0.25. This marks the 11th consecutive year of increases. And we believe that this shows our commitment to returning value to our shareholders. So in closing, when you add it all together, we are quite pleased with the year overall and where we are positioned for the future. Sales, margins and earnings are up, and while there can always be some lumpiness period to period, the aftermarket fundamentals remain quite strong as does our standing within the industry. We continue to be strategically acquisitive with 2 deals done last year, both of which complement our core business while also providing us nice diversification into new markets, products and geography. And so we feel very good about our future. That concludes our prepared remarks. With that, I will turn it back to the moderator, and we'll open it up for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And our first question comes from Daniel Imbro from Stephens Inc. -------------------------------------------------------------------------------- Unidentified Analyst, [2] -------------------------------------------------------------------------------- This is Andrew on for Daniel. Congrats on the quarter, guys. -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [3] -------------------------------------------------------------------------------- Thank you. -------------------------------------------------------------------------------- Unidentified Analyst, [4] -------------------------------------------------------------------------------- My first question here is -- I'm going to have a follow-up after that is, with Pollak integrated, how are you thinking about going forward in terms of the product line expansion you mentioned in the release? -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [5] -------------------------------------------------------------------------------- I appreciate the question, Andrew. And you need to look at the 2 segments separately. I'll start with the aftermarket, which is the smaller piece of it. As mentioned, it's about 25%. They had a relatively limited product offering going into the aftermarket channel of heavy duty, which is very different, by the way, from what we typically think of as the aftermarket. It's not the O'Reillys and NAPAs of the world, but it's a channel that sits adjacent to it. Those traditional guys also are participating in heavy duty, but this is a market that sits alongside it. And we already have within our legacy portfolio a lot of products that are suitable that we can add to the Pollak brand and go after that market, but we're also going to be applying some additional product management resources to see what it is that, that channel needs and build out our portfolio accordingly. So really (inaudible)... (technical difficulty) and to integrate the business, get all the production moved. We're now pretty close with that, and we'll turn our attention to growing the business. On the OE side of it, several of the customers that came with the acquisition were existing customers for us. Others were new to us. We've already been in discussions with many of them about what's next. To be honest, Stoneridge, by their own admission, had really stopped investing in this business. And so there really have not been very much new product development going on. There are a lot of opportunities, and so we're actively in discussion. So while it's still early days, and again, the first job is to integrate what we've got and make sure that all customers are taken care of, we're pretty much ready to go to that next chapter and start growing the business. So we're excited about the potential. -------------------------------------------------------------------------------- Unidentified Analyst, [6] -------------------------------------------------------------------------------- All right. That's very helpful. And then my follow-up here is, after seeing some success with the warehouse automation, do you see any potential for similar upgrades in some of your Engine Management DCs or elsewhere? -------------------------------------------------------------------------------- James J. Burke, Standard Motor Products, Inc. - COO [7] -------------------------------------------------------------------------------- Yes. It's Jim Burke. The enhancements that we put in for the Lewisville, Texas facility, this is a common system that we have. We're upgrading in Virginia also, but the automation mirrors what we have in Lewisville. This was one of the -- it was more a manual operation in Lewisville, Texas, whereas our other facilities already had enhancements put in. So I would not anticipate a significant change in our other distribution facilities. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- (Operator Instructions) Our next question comes from Scott Stember from CL King. -------------------------------------------------------------------------------- Scott Lewis Stember, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [9] -------------------------------------------------------------------------------- Eric, you talked about -- or was Jim talking about, I guess, how POS, it sounds as if we're still running in the low singles. Can you talk about how it performed in the fourth quarter, I guess, in the context of the comments that your customers are making about softer end demand? Have you seen any actual pullback, particularly on the Engine Management side as of late or even in the fourth quarter? -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [10] -------------------------------------------------------------------------------- Sure. It was a soft quarter, but it was still positive. As we always say, this is representative of the overall market. We don't get POS information from our entire customer base, but it is certainly reflective, we believe. It remained positive, but it was very low single digits coming into 2020, where we're continuing to see that cadence. -------------------------------------------------------------------------------- Scott Lewis Stember, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [11] -------------------------------------------------------------------------------- Okay. Got it. And just one... -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [12] -------------------------------------------------------------------------------- And as you mentioned, wire and cable, Temperature Control are -- wire and cable continues on its minus 7 or so; and Temp Control, really fourth quarter is largely irrelevant. -------------------------------------------------------------------------------- Scott Lewis Stember, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [13] -------------------------------------------------------------------------------- Okay. And moving over to Pollak. I know you're -- obviously, we would expect that probably to mirror what the industry is doing as well. But some of these product extensions and the growth in the aftermarket, what kind of growth rates would you be forecasting for Pollak, I guess, within a year -- a full year one of ownership? -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [14] -------------------------------------------------------------------------------- We're really -- at this point, what we inherited, which -- was largely steady state, no growth. In fact, there were a couple, and I believe and I've stated, a couple of the OE contracts that were coming to a close. So really, at this point, until we start to refresh the offering, we're not projecting any near-term growth. -------------------------------------------------------------------------------- Scott Lewis Stember, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [15] -------------------------------------------------------------------------------- Got it. And on the tariff front, have you seen any changes with your exposure there? Or is it expected to be a steady state going forward at least for 2020? -------------------------------------------------------------------------------- Nathan R. Iles, Standard Motor Products, Inc. - CFO [16] -------------------------------------------------------------------------------- Yes. Scott, this is Nathan. Yes, it's really a steady state at this point. There are some exclusion requests that had been filed, but they're very, very small. And as we've noted before, any refunds would go back to the customer. -------------------------------------------------------------------------------- Operator [17] -------------------------------------------------------------------------------- And our next question comes from Bret Jordan from Jefferies. -------------------------------------------------------------------------------- Ethan David Huntley, Jefferies LLC, Research Division - Equity Associate [18] -------------------------------------------------------------------------------- This is Ethan Huntley on for Bret. First one here just on the Engine Management margins, 29.6% for the year. I know you sort of guided to 30-plus percent. Following 2 consecutive quarters of sort of 30-plus percent Engine Management, I guess, sort of what are the changes we'd see something in the 31% range or maybe even a bit higher moving into '20 and '21 here? -------------------------------------------------------------------------------- James J. Burke, Standard Motor Products, Inc. - COO [19] -------------------------------------------------------------------------------- This is Jim Burke. I'll point out again that we step back in the first quarter always. That's there. And we look to build on the margins going forward. We always look to be, with all the variables, to be moving 0.5 point per year or thereabouts. That's in there. So while I always have high hopes for moving up beyond the 30% to 31% and beyond that, let me get over the 30% hurdle for the first year and then I'll work on the others. -------------------------------------------------------------------------------- Ethan David Huntley, Jefferies LLC, Research Division - Equity Associate [20] -------------------------------------------------------------------------------- Fair. And then just again, sort of the mild winter. I'm just trying to sort of gauge the impact you're seeing in either segment here, either in Temperature Control or Engine Management. -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [21] -------------------------------------------------------------------------------- On Temperature Control, we do have some portion of the line that is heating related. And that has been somewhat soft, but that's a very small portion of our Temperature Control business. It's really more of a summer-related category, and so we're all hopeful that we're going to have a nice, hot summer. As it relates to Engine Management, we're not as temperature impacted as, say, batteries or wiper blades or some of the true winter-type product categories, but it does have an impact, and we have seen that on customer reported POS on our lines and therefore reflected in what they're purchasing from us. So we are seeing some softness. Not dramatic softness, but we are seeing a little bit of softness. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- And our next question comes from Robert Smith from Center for Performance Investing. -------------------------------------------------------------------------------- Robert Smith;Center for Performance Investing;Analyst, [23] -------------------------------------------------------------------------------- Can you give me a feel for what you're thinking is of the joint venture in electric vehicles in China? Do you see this as a jumping off point to broaden that product line through the joint venture? Or are you looking for additional joint ventures to penetrate that market? -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [24] -------------------------------------------------------------------------------- Great question. And the answer really is both. So let's start with what we see for CYJ. As mentioned, it's very small and very new. They have the technology to pursue the electric vehicle market there as well as to have the products suitable for EVs elsewhere in the world. What they really didn't have was the horsepower, and that's where we come in. With our resources and our stability and so on, we think the combination becomes very strong. Then you combine that with our other 2 Temperature Control JVs in the region, we're really starting to build out a portfolio of products to take care of Temperature Control category in China. Beyond that, we continue to look for appropriate strategic investments in the region. As we have demonstrated really forever in terms of our acquisition strategy, we're very careful in what we select. It needs to fit our objectives and our strategy. But what we are seeing is that there are certainly other opportunities there, and we're always investigating. We see the Chinese OE car market, especially in the HVAC area, to be a very nice opportunity for us, and we're continuing to build it out. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- And it does appear that there are no further questions over the phone at this time. -------------------------------------------------------------------------------- Lawrence I. Sills, Standard Motor Products, Inc. - Executive Chairman [26] -------------------------------------------------------------------------------- All right. This concludes our fourth quarter conference call. Thank you very much for attending. -------------------------------------------------------------------------------- Eric Philip Sills, Standard Motor Products, Inc. - CEO, President & Director [27] -------------------------------------------------------------------------------- Thank you. Goodbye. -------------------------------------------------------------------------------- Nathan R. Iles, Standard Motor Products, Inc. - CFO [28] -------------------------------------------------------------------------------- Bye. -------------------------------------------------------------------------------- Operator [29] -------------------------------------------------------------------------------- This does conclude today's program. Thank you for your participation. You may disconnect at any time.