Standard Motor Product Inc.
) announced the amendment of its $200 million revolving credit
facility with GE Capital Corporate Finance maturing on Mar 2015.
GE Capital acted as the agent for a syndicate of lenders.
Under the amendment, the credit line has been extended by $50
million to $250 million and interest rates have been reduced by
25 basis points. The maturity date has been extended to Mar 2018.
The credit facility will be secured by the company's accounts
receivable, inventory and fixed assets.
This amendment will improve the pricing terms and provide
Standard Motor with greater flexibility for implementation of its
strategic plans. If the company prospers through this initiative,
the shareholders will stand to benefit in the long run.
Standard Motor, based in Long Island City, NY, is one of the
leading manufacturers, distributors and marketers of automotive
replacement parts in the U.S. Further, it enjoys strong brand
Standard Motor reported a staggering 82.6% rise in adjusted
earnings per share to 42 cents in the first quarter of 2013 from
23 cents in the year-ago quarter. Earnings per share also
surpassed the Zacks Consensus Estimate of 32 cents.
Total revenue increased 9% to $230.7 million but missed the Zacks
Consensus Estimate of $234.0 million. The year-over-year growth
in revenues was attributable to the positive impact from the
company's acquisitions and strong performance of the company's
Temperature Control segment.
We believe that Standard Motor will benefit from its strong brand
recognition, less cyclical end-market and efficient debt
management measures and positive impact from the recent
acquisitions. However, we are concerned about the company's high
dependence on its three major customers, namely,
Advance Auto Parts Inc.
O'Reilly Automotive Inc.
) for its business. Currently, Standard Motor carries a Zacks
Rank #1 (Strong Buy).
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