Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q2 2022 Earnings Presentation
29 slides from Standard Motor Products's earnings presentation, 2022
Slide 1: Standard Motor Products, Inc. Q2 2022 Investor Presentation
Standard Motor Products, Inc. Q2 2022 Investor Presentation 1
Slide 2: Forward Looking Statements
Forward Looking Statements You should be aware that except for historical information, the matters discussed here in are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements, including projections and anticipated levels of
Slide 3: Industry and Business Overview
Industry and Business Overview 3
Slide 4: Why Invest in SMP?
Why Invest in SMP? Longstanding business led by experienced management team Leader in engine management and temp control aftermarket Significant share of stable industry with positive outlook Successful growth programs Commitment to Corporate Social Responsibility Superior shareholder returns Financ
Slide 5: SMP Snapshot
SMP Snapshot 102 Years in Business • Founded 1919 • $1.3 Billion 2021 Sales • 5,000 Employees LAWRENCE I. SILLS ERIC P. SILLS JAMES J. BURKE DALE BURKS NATHAN ILES Chief Financial Worldwide Chairman of the Board Director, CEO and President Chief Operating Officer EVP and Chief Commercial Officer Off
Slide 6: SMP Snapshot: Brands and Distributors
SMP Snapshot Professionally Recognized Brands Significant Supplier to All Major Aftermarket Distributors 6
Slide 7: SMP Facilities
SMP SMP Facilities Standard Motor Products, Inc. USA Disputanta, VA @RO- Edwardsville, KS Canada Europe FL. Lauderdale, FL 2 Locations 4 Locations BB ° Greenville, SC @W* Independence, KS be Lewisville, TX Long Island City, NY MeAllen, TX Mishawaka, IN BOS - Milwaukee, WI @@- Shoboygan Falls, WI Can
Slide 8: Favorable Aftermarket Industry Trends
Favorable Aftermarket Industry Trends Vehicle Population shows positive trend Car Parc continues to get older U.S. Light Vehicle Parc Average Age of Cars and Light Trucks 290 Millions 12.0 278 281 279 283 11.4 11.5 11.6 11.6 11.7 11.8 11.9 12.1 12.2 260 270 272 264 8.0 258 253 230 4.0 200 0.0 2014 2
Slide 9: Strategy Overview
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Slide 10: Strategic Objectives
Strategic Objectives • External programs that provide real value to our customers Core Value • Best-in-class full-line, full-service supplier of premium aftermarket Proposition engine management and temperature control products • Strategic expansion of our business Successful • Growth in complementa
Slide 11: SMP Core Strategy
SMP CORE STRATEGY To be the best full-line, full-service supplier of premium engine management and temperature control products The SMP Value Proposition Our suite of products and services is designed to provide all the needed support for our customers and the technicians who install our parts Premi
Slide 12: Growth Objectives and Focus
Growth Objectives and Focus Aftermarket Specialized Product JVs and M&A Markets Development Continuous Favorable Industry Growth into Sizable Improvement for Favorable Industry Fundamentals End Markets Future Opportunities Fundamentals • Low-mid single • Parallel growth to • Capture projects • Paral
Slide 13: Growth in Specialized Markets
Growth in Specialized Markets 2021 Increased Push into Specialized Markets Focus on On-Highway and Off-Highway • Product life cycles tend to be longer • Commercial vehicle our largest category • Technology more stable • Highly fragmented end markets • Less competition and more stable pricing • Expan
Slide 14: Growth in Specialized Markets
Growth in Specialized Markets Selling Custom Engineered Products and Solutions into Niche End Markets Complementary Strategic Product Portfolio Major Categories Growth Diversification Enhancement • Products and • Channel will be >20% of • Non-powertrain related • Sensing & Switching technologies wil
Slide 15: Committed to Growing Technologies
Committed to Growing Technologies ADVANCED ICE BEYOND ICE TEMPERATURE CATEGORIES CATEGORIES CONTROL • VVT Components • Power Management • ECV Compressors • 500+ SKUs, Manuf. Bialystok • Battery Current Sensors • 250+ SKUs; 10M+ VIO • Power Distribution • EVAP Components • Brushless Motors (BLDC) • C
Slide 16: Growth – Strategic Acquisitions
Growth – Strategic Acquisitions 2011 2012 2013 2014 2016 2017 2019 2021 • 15 Acquisitions in Recent Years • Primary Focus – Bolt-on: acquire competitors – Vertical integration: acquire suppliers – New but related business • Rationale – Helps with Full-Line, Full-Service model – Helps address part co
Slide 17: Drive for Continuous Improvement
Drive for Continuous Improvement • Increased Manufacturing – Engineering resources up >30% from 2013 – 80% of capital budget for tooling projects – Acquisitions: a great “shortcut” • Optimized Supply Chain Footprint % of Hrs in Low Cost Plants 83% 60% 64% – Operations in Mexico & Poland 28% – China
Slide 18: Corporate Social Responsibility
Corporate Social Responsibility • SMP is committed to ongoing ESG and DE&I initiatives • We believe in being a good corporate citizen • We are committed to our company, our employees, our shareholders, our business partners, and communities • Some highlights from our recent Sustainability Report rel
Slide 19: Return to Shareholders
Return to Shareholders Dividend Increase Quarterly Dividend $0.27 $0.25 $0.25 $0.19 $0.21 $0.23 $0.17 $0.11 $0.13 $0.15 $0.07 $0.09 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 * Dividend paid out for two quarters only due to COVID-19 pandemic Treasury Stock Buyback Program 2011 - Co
Slide 20: SMP Cash Utilization
SMP Cash Utilization $225 CapEx Dividends Acquisitions Buybacks $200M $200 27 $175 Total Utilization ($M) $150 Buybacks $125 $104M $158.0 CapEx $ millions 125 15% $193.6 21% $100 $91M 1 $64M $74M $73M 11 $51M $75 $64M M&A Dividends 10 $51M 67 $342.0 $161.3 5 24 15 44 $43M 17% $50 $41M 47% 38 20 7 10
Slide 21: June 2022 YTD Results
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Slide 22: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures $1,500 Consolidated Net Sales ($M) 35% Gross Margin 28.3% 29.6% 28.1% 26.8% 27.3% $1,250 30% $1,298.8 $1,000 $1,092.1 $1,137.9 $1,128.6 25% 20% $750 15% 28.6% 29.2% 29.8% 29.0% $500 $682.2 $588.9 $618.6 10% $548.5 UP 10.3% $250 $502.2 5% $- 0% 2018 2019 2020 2021
Slide 23: Income Statement Non-GAAP
Income Statement Non-GAAP ($ in millions) June 2022 YTD June 2021 YTD Amount % of Sales Amount % of Sales Net Sales $ 682.2 100.0% $ 618.6 100.0% Gross Profit 186.2 27.3% 183.1 29.6% SG&A Expenses 131.4 19.3% 116.1 18.8% Operating Profit 54.8 8.0% 67.0 10.8% Other Income/(Loss) 3.4 1.5 Interest Expe
Slide 24: Condensed Balance Sheet
Condensed Balance Sheet Actual Q2 2022, Q2 2021 ($ in millions) Dollars Ratios 2022 2021 2022 2021 Cash and Equivalents $ 14.2 $ 27.5 Accounts Receivable/DSO 229.7 211.8 55 55 Inventory/Turns 551.4 404.9 2.0 2.4 Unreturned Customer Inventory 21.4 22.1 Other Assets 509.9 489.0 Total Assets $ 1,326.6
Slide 25: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (IN MILLIONS) JUNE YTD Full Year 2022 2021 2021 NET INCOME $38.6 $48.2 $91.0 DEPRECIATION & AMORTIZATION 13.9 13.1 27.2 ACCOUNTS RECEIVABLE (49.7) (4.7) 28.5 INVENTORY (87.7) (46.7) (107.6) ACCOUNTS PAYABLE 1.6 16.1 33.0 OTHER OPERATING ACTIVITIES (12.0) (2.8) 13.5
Slide 26: Appendix
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Slide 27: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) SIX MONTHS JUNE 30, 2022 2021 2020 2019 2018 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS GAAP EARNINGS FROM CONTINUING OPERATIONS $ 41,354 $ 50,159 $ 21,463 $ 33,659 $ 25,424 RESTRUCTURING AND INTEGRATION EXP
Slide 28: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) SIX MONTHS JUNE 30, 2022 2021 2020 2019 2018 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 55,558 $ 67,012 $ 28,777 $ 44,931 $ 34,223 DEPRECIATION & AMORTIZAT
Slide 29: Thank You
Thank You —- | Ni Ni Aly \ te ai 3 Q Pa Oo ~ T. 74 e QS Va
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