================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 20, 2007
STANDARD MOTOR PRODUCTS, INC.
(Exact Name of Registrant as Specified in its Charter)
NEW YORK 1-4743 11-1362020
(State or Other (Commission File Number) (I.R.S. Employee
Jurisdiction of Incorporation) Identification Number)
37-18 NORTHERN BOULEVARD, LONG ISLAND CITY, NEW YORK 11101
(Address of Principal Executive Offices, including Zip Code)
Registrant's Telephone Number, including Area Code: 718-392-0200
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On December 21, 2007, Standard Motor Products, Inc., through its affiliate SMP
Real Estate LLC (the "Company"), entered into a Purchase and Sale Agreement (the
"Purchase Agreement") with EX II Northern Boulevard Acquisition LLC
("Purchaser") to sell the Company's property located at 37-18 Northern Blvd.,
Long Island City, New York (the "Property"). The purchase price for the Property
is Forty Million Six Hundred Thousand Dollars ($40,600,000), which amount the
Company intends to use to reduce its debt. The Purchase Agreement contains
customary representations, warranties, indemnities and closing conditions. The
Company anticipates the closing to occur in the first half of 2008.
In connection with the Purchase Agreement, the Company intends to enter into a
Lease Agreement with the Purchaser, as lessor, and the Company, as lessee, on
the date of closing of the sale of the Property (the "Lease"). The initial term
of the Lease is ten years and contains four 5-year renewal options. During
approximately the first twelve months of the lease term, the Company will make
initial annual rent payments of approximately $2.6 million. Thereafter, the
Company will reduce its leased space and the annual rent payments will decrease
to approximately $1.6 million. The Company's rent payments will increase 3% per
year for the first twenty years of the Lease, other than in years 11 and 16 when
the increase will be 10% and 5%, respectively. The Lease also provides for a
build-out allowance of approximately $2.1 million.
In connection with the entering into the Purchase Agreement, the Company issued
a press release on December 26, 2007, announcing the transaction. A copy of the
press release is attached hereto as Exhibit 99.1.
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
In connection with the Company's previously-announced ongoing cost-reduction
initiatives, on December 20, 2007 the Company entered into an agreement with the
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America and its Local 365 ("UAW") regarding the shut down of the
Company's manufacturing operations at the Property, which operations will be
transferred to other facilities of the Company. The relocation and closure of
such manufacturing operations is currently expected to be completed by the
second quarter of 2008.
In conjunction with the shut down of the manufacturing operations at the
Property, the Company currently expects to incur approximately $6.1 million to
$6.6 million in total cash costs associated with the exit or disposal activity,
consisting of severance, equipment removal, capital expenditures and other cash
costs. In the fourth quarter of 2007, the Company expects to record a charge of
approximately $4 million to $4.5 million for costs associated with the
above-referenced activities, which will be primarily for severance costs, and
also expects to incur approximately $0.6 million in additional capital
expenditures. In 2008, the Company also expects to record a charge of
approximately $1.5 million for severance, equipment removal and other cash costs
related to the above-referenced activity.
In addition, the Company will incur a withdrawal liability from a multi-employer
pension plan. The pension plan withdrawal liability is related to trust asset
under-performance in a multi-employer plan that covers the Company's UAW
employees at the Property and is payable in a lump sum or over a period which is
not to exceed 20 years. Currently, the Company is unable in good faith to make a
determination of an estimate or a range of estimates of the pension plan
withdrawal liability and is therefore unable to make a determination regarding
the total amount of costs expected to be incurred in connection with such
withdrawal liability and the amount of the charge that will result in future
cash expenditures. The Company will file an amendment to this report when the
Company is able to make a good faith determination of such estimate or range of
estimates.
As part of the press release announcing the entering into the Purchase Agreement
referenced above, the Company announced its agreement with the UAW regarding the
closing of the manufacturing operations at the Property. A copy of the press
release is attached hereto as Exhibit 99.1.
ITEM 8.01. OTHER EVENTS
On December 21, 2007, the Company's European affiliate acquired the wire and
cable business of a third party in the United Kingdom. The acquired business
will be included in the Company's existing wire and cable facility in the United
Kingdom.
The Company issued a press release on December 26, 2007 announcing this
transaction. A copy of the press release is attached hereto as Exhibit 99.1.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99.1 Press release dated December 26, 2007, announcing, among other
things, the entering into the Purchase and Sale Agreement
relating to the Company's Long Island City, New York facility.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STANDARD MOTOR PRODUCTS, INC.
By: /S/ JAMES J. BURKE
---------------------
James J. Burke
Vice President Finance,
Chief Financial Officer
Date: December 26, 2007
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Press release dated December 26, 2007, announcing, announcing,
among other things, the entering into the Purchase and Sale
Agreement relating to the Company's Long Island City, New York
facility.