Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q3 2022 Earnings Presentation
29 slides from Standard Motor Products's earnings presentation, 2022
Slide 1: Standard Motor Products, Inc. Q3 2022 Investor Presentation
Standard Motor Products, Inc. Q3 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 103 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 Worldwide Chairman of the Board Director, CEO and President Chief Operating Officer EVP and Chief Commercial Officer Chief Financial Off
Slide 6: SMP Snapshot
SMP Snapshot Professionally Recognized Brands Significant Supplier to All Major Aftermarket Distributors 6
Slide 7: SMP Facilities
SMP SMP Facilities Standard Motor Products, Inc. US.A 12 Locations 6 Locations Canada 2 Locations Europe 5 Locations Asia 7 Locations Offices Design & Development Training 13 Facilities 13 Facilities 1 Facility We Global Headquarters 3.3 million square feet providing service, quality, innovation & i
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
QO: NE TH Auk Set if 2 Strategy Overview
Slide 10: Strategic Objectives
Strategic Objectives • Continued Leadership in the North American Aftermarket Aftermarket • Best-in-class full-line, full-service supplier of premium aftermarket Leadership engine management and temperature control products •Strategic expansion of our business Business •Targeting global commercial,
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: Committed to Growing Technologies
Committed to Growing Technologies ADVANCED ICE BEYOND ICE TEMPERATURE CONTROL CATEGORIES CATEGORIES • 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 13: Growth in Specialized Markets
Growth in Specialized Markets Increased Push into Specialized Markets • Product life cycles tend to be longer • Technology more stable • Less competition and more stable pricing • Highly fragmented end markets • Expansive customer lists with blue-chip accounts 13
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 through Strategic Acquisitions
Growth through Strategic Acquisitions 2011 • 16 Acquisitions in Recent Years 2012 • Primary Focus 2013 – Bolt-on and Vertical integration – New but related business 2014 – Specialized Markets 2016 • Rationale 2017 – Helps address part complexity / SKU proliferation 2019 – Rapid entry into new techno
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 $200M Total Utilization ($M) $200 27 $175 $150 Buybacks CapEx $162.0 $199.9 19% 23% $125 $104M $ millions $91M 125 $100 1 Dividends M&A $74M $73M 11 $67M $342.0 $167.1 $75 $64M $64M 39% 19% 10 $51M 67 5 24 15 44 $43M $50 $41M 30 38 20 7
Slide 21: September 2022 YTD Results
September 2022 YTD Results 21
Slide 22: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures $1,500 Consolidated Net Sales ($M) 35% Gross Margin 28.5% 28.9% 28.7% 29.1% 27.5% $1,250 30% $1,298.8 UP 7.6% $1,000 $1,092.1 $1,137.9 $1,128.6 25% 20% $750 $1,063.6 $988.9 15% 28.6% 29.2% 29.8% 29.0% $500 $896.7 $845.1 $845.9 10% $250 5% $- 0% 2018 2019 2020 2021
Slide 23: Income Statement Non-GAAP
Income Statement Non-GAAP ($ in millions) September 2022 YTD September 2021 YTD Amount % of Sales Amount % of Sales Net Sales $ 1,063.6 100.0% $ 988.9 100.0% Gross Profit 293.0 27.5% 288.5 29.2% SG&A Expenses 204.6 19.2% 181.9 18.4% Operating Profit 88.4 8.3% 106.6 10.8% Other Income/(Loss) 4.9 2.2
Slide 24: Condensed Balance Sheet
Condensed Balance Sheet Actual Q3 2022, Q3 2021 ($ in millions) Dollars Ratios 2022 2021 2022 2021 Cash and Equivalents $ 17.5 $ 33.1 Accounts Receivable/DSO 230.4 224.4 55 55 Inventory/Turns 534.3 414.7 1.9 2.4 Unreturned Customer Inventory 21.5 23.4 Other Assets 515.0 500.1 Total Assets $ 1,318.7
Slide 25: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (IN MILLIONS) SEPTEMBER YTD Full Year 2022 2021 2021 NET INCOME $47.5 $72.2 $91.0 DEPRECIATION & AMORTIZATION 20.9 20.2 27.2 ACCOUNTS RECEIVABLE (51.9) (15.3) 28.5 INVENTORY (75.3) (52.7) (107.6) ACCOUNTS PAYABLE (31.8) 24.2 33.0 OTHER OPERATING ACTIVITIES 15.1 30.5
Slide 26: Appendix
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Slide 27: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) NINE MONTHS SEPTEMBER 30, 2022 2021 2020 2019 2018 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS GAAP EARNINGS FROM CONTINUING OPERATIONS $ 64,494 $ 79,331 $ 57,675 $ 56,313 $ 44,697 RESTRUCTURING AND INTEGRATI
Slide 28: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) NINE MONTHS SEPTEMBER 30, 2022 2021 2020 2019 2018 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 87,030 $ 105,678 $ 76,793 $ 74,952 $ 60,498 DEPRECIATION & AM
Slide 29: Thank You
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