Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Wall Street Analyst Forum 2011
29 slides from Standard Motor Products's conference presentation, Dec 6, 2011
Slide 1: Standard Motor Products, Inc. Wall Street Analyst Forum
Standard Motor Products, Inc. Wall Street Analyst Forum December 6, 2011 Delivering Global Automotive Solutions 1
Slide 2: Forward Looking Statements
Forward Looking Statements You should be aware that except for historical information, the matters discussed herein 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 f
Slide 3: Standard Motor Products, Inc.
Standard Motor Products, Inc. 90+ Years in Business Leading Automotive Aftermarket Company Net Sales: ► 2010: $811mm/TTM: $873mm Employees: ► 3,200 Globally Locations: ► 19 Facilities Manufacturing, Distribution and Training Centers throughout North America, Europe, and Asia Key Division
Slide 4: Key Points for Review
Key Points for Review SMP is an Aftermarket Pure Play • More than 90% of Sales are Aftermarket • Number One Market Share in Two Product Lines Positive Demographics • Aging Vehicle Fleet • Closing Car Dealerships Strategic Initiatives Debt Reduction Poised for Future Growth 4 Delivering Global Automo
Slide 5: SMP is an Aftermarket Pure Play
SMP is an Aftermarket Pure Play Based on 250 million 2010 Sales vehicles on the road Other OE/OES 8% Highly stable 10% Slow and steady growth Traditional Tens of thousands of 43% SKUs Retail Retail 39% 39% Not affected by rise and fall of new car production Higher margins 5 Delivering Gl
Slide 6: Strong Market Share Focused on Two Major Product Lines
Strong Market Share Focused on Two Major Product Lines #1 in each Other 2% Temperature Temperature Control Control 27% 27% Engine Management 71% 6 Delivering Global Automotive Solutions
Slide 7: Excellent Customer Relationships
Excellent Customer Relationships Traditional Retail Co-Man OE/OES 7 Delivering Global Automotive Solutions
Slide 8: Positive Demographics
Positive Demographics Trend Impact on Aftermarket Aging Fleet of Vehicles Increases demand for replacement parts Car Dealerships Closing Independent distributors and repair shops will become far better option in many areas 8 Delivering Global Automotive Solutions
Slide 9: Positive Demographics: Average Age of U.S. Light Vehicles
Positive Demographics Average Age of U.S. Light Vehicles Aging Vehicle Population 180 160 11.0 10.6 10.3 10.5 10.0 140 10.0 9.7 9.8 9.4 9.5 (years) Millions 9.5 9.1 120 8.8 8.9 8.9 9.0 9.0 7+ years old 8.5 100 <7 years old 8.0 80 7.5 7.0 60 99 00 01 02 03 04 05 06 07 08 09 10 40 '01 '85 '87 '89 '91
Slide 10: Positive Demographics: Dealership Consolidation
Positive Demographics Dealership Consolidation 28,000 26,000 # New Car Dealerships 24,000 22,000 20,000 18,000 16,000 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 Source: NADA Data 10 Delivering Global Automotive Solutions
Slide 11: Strategic Initiatives
Strategic Initiatives Delivering Global Automotive Solutions 11
Slide 12: Strategic Initiatives: Low Cost Manufacturing
Strategic Initiatives Low Cost Manufacturing 56% 56% 49% 38% 27% 28% 21% 2005 2006 2007 2008 2009 2010 2011 YTD % production labor hours in low cost facilities (Mexico and Poland) Note: Prior years restated to exclude Europe 12 Delivering Global Automotive Solutions
Slide 13: Strategic Initiatives: Low Cost Purchasing
Strategic Initiatives Low Cost Purchasing 56% 52% 49% 47% 42% 38% 34% 2005 2006 2007 2008 2009 2010 2011 YTD % purchased from low cost suppliers Hong Kong Purchasing Office Opened October 2010 13 Delivering Global Automotive Solutions
Slide 14: Strategic Initiatives: Increase OE/OES Business
Strategic Initiatives Increase OE/OES Business OE/OES Sales History $100 $90 $84.2 $78.5 $80 $73.6 $6.5 $6.4 $70 $3.6 $21.5 Millions $60 $23.9 $29.4 Total Poland $50 $40 $30 $56.2 $48.2 $20 $40.6 $10 $0 2009 Actual 2010 Actual 2011 Fcst Note: 2009 Restated to Exclude Europe * Goal: 20% of Sales * 14
Slide 15: Selective Acquisitions: BLD Engine Control Business
Strategic Initiatives Selective Acquisitions BLD Engine Control Business ► $27mm Acquisition, Closing Date 4/25/11 ► BLD/Novo - $18mm Revenue: Fuel Pressure Regulators, Air By-Pass Valves, Idle Air Controls, OE and Aftermarket PCV Valves, etc. ► Locations: Holland, Michigan and Ocala, Florida ► Cust
Slide 16: Selective Acquisitions: Forecast Trading Corporation
Strategic Initiatives Selective Acquisitions Forecast Trading Corporation ► $44mm Acquisition, Closing Date 10/25/11 ► Business - $31mm Revenue: Engine Management Products Including Ignition Coils, Ignition Modules, Switches and Sensors and Filters ► Location: Ft. Lauderdale, Florida ► Customers - O
Slide 17: Debt Reduction
Debt Reduction Sold LIC Building in 2008 Reduced Accounts Receivable by $69mm since 2008 Reduced Salaried Headcount 10% Suspended Dividend • Reinstated in 2010 Redeemed $90mm Bonds • 3,450,000 Shares Raised Additional Equity • $27.5mm (Net of Expenses) • 2008 = 6.2 (x) Debt:EBITDA Ratio Reduced • 20
Slide 18: Debt Reduction
Debt Reduction Debt Reduction $255 $194 $76 $66 $42 * Dec. 2007 Dec. 2008 Dec. 2009 Dec. 2010 Sept. 2011 (Total Debt – US$ in millions) * Inclusive of $27mm BLD Acquisition in April 2011 Q4 2011 Will Increase $44mm for Forecast Trading Corp. Acquisition 18 Delivering Global Automotive Solutions
Slide 19: Poised for Future Growth
Poised for Future Growth Excellent 2011 Future Plans Results Industry Increase Growth OE/OES Substantial Selective Market Acquisitions Share Reduced Costs Reduced Debt 19 Delivering Global Automotive Solutions
Slide 20: Financial Overview
Financial Overview Delivering Global Automotive Solutions 20
Slide 21: Sept YTD Quarterly Performance Measures
Sept YTD Quarterly Performance Measures Consolidated Net Sales (Millions) Gross Margin $244.0 27.3% $236.2 $220.2 $250.0 $231.0 28.0% 25.9% $227.5 26.4% 24.1% 25.3% 24.4% $179.4 26.0% $197.5 $205.6 $200.0 $172.2 23.7% 24.0% 24.2% 23.5% $150.0 2011 22.0% 2011 2010 2010 $100.0 20.0% 2009 2009 Q1 Q1 Q2
Slide 22: September YTD Performance Measures
September YTD Performance Measures Consolidated Net Sales Gross Margin 25.8% $700.5 25.4% $637.9 26.0% $725.0 25.0% $650.0 23.8% $575.3 24.0% $575.0 2011 23.0% 2011 $500.0 2010 22.0% 2010 $425.0 21.0% $350.0 2009 2009 20.0% SEPT YTD (Millions) SEPT YTD EBITDA (w/o Special Items) Diluted EPS (w/o Spe
Slide 23: Substantial Margin Improvement
Substantial Margin Improvement 2010 Sept 2011 Target 2008 2009 2010 YTD Target Engine Management 23.3% 24.7% 25.0% 25.3% 27-28% Gross Margin % Temperature Control 19.3% 19.3% 23.1% 23.4% 23-24% Gross Margin % 23 Delivering Global Automotive Solutions
Slide 24: September 2011 YTD Income Statement Non-GAAP
September 2011 YTD Income Statement Non - GAAP ($ in millions) Sept 2011 YTD Sept 2010 YTD Amount % of Sales Amount % of Sales Net Sales $ 700.5 100.0% $ 637.9 100.0% Gross Profit 180.8 25.8% 162.2 25.4% SG&A Expenses 126.0 18.0% 120.5 18.9% Operating Profit 54.8 7.8% 41.7 6.5% Other Income/(Loss) 0
Slide 25: Condensed Balance Sheet
Condensed Balance Sheet ($ in Millions) Condensed Balance Sheet Sep '11 Sep '10 Current Assets $ 408.9 $ 442.4 PP&E 60.1 62.1 Other Assets 54.7 51.8 Total Assets $ 523.7 $ 556.3 Current Liabilities $ 189.7 $ 204.2 Debt 42.1 74.3 Other Liabilities 48.9 68.5 Shareholders Equity 243.0 209.3 Total Liabi
Slide 26: Condensed Statement of Cash Flows September YTD
Condensed Statement of Cash Flows September YTD (IN MILLIONS) YTD SEPT YTD SEPT 2011 2010 NET INCOME $33.1 $19.7 DEPRECIATION & AMORTIZATION 10.4 10.0 ACCOUNTS RECEIVABLE (30.6) (46.4) INVENTORY 11.0 (31.0) ACCOUNTS PAYABLE 8.5 20.7 OTHER OPERATING ACTIVITIES 24.9 31.8 NET CASH PROVIDED BY (USED IN)
Slide 27: SMP Capitalization
SMP Capitalization (US$ in millions) As of September 30, 2011 % of Total Amount Capitalization Revolving Credit Facility $41.8 14.7% March 2015 Maturity Other 0.3 0.1 Total Debt $42.1 14.8% Book Value of Equity $243.0 85.2% Total Capitalization $285.1 100.0% Debt / EBITDA 0.6x Interest Coverage 20.9
Slide 28: Appendix
Appendix Delivering Global Automotive Solutions 28
Slide 29: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) NINE MONTHS ENDED SEPTEMBER 30, EARNINGS (LOSS) FROM CONTINUING OPERATIONS 2011 2010 (Unaudited) GAAP EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ 34,804 $ 22,025 RESTRUCTURING AND INTEGRATION EXPENSES (NET OF TA
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