Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q3 2020 Earnings Presentation
27 slides from Standard Motor Products's earnings presentation, 2020
Slide 1: Standard Motor Products, Inc. Q3 2020 Investor Presentation
Standard Motor Products, Inc. Q3 2020 Investor Presentation 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: 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 Proven strategy for long-term outperformance Superior shareholder returns Financial results demonstrate succ
Slide 5: SMP Snapshot
SMP Snapshot 101 Years in Business • Founded 1919 • $1.1 Billion 2019 Sales • 4,200 Employees Worldwide LAWRENCE I. SILLS Executive Chairman ERIC P. SILLS JAMES J. BURKE Chief Operating DALE BURKS EVP and Chief NATHAN ILES Chief Financial Board of Directors Director, CEO Officer Commercial Officer O
Slide 6: SMP Snapshot
SMP Snapshot Professionally Recognized Brands Significant Supplier to All Major Distributors 6
Slide 7: SMP Facilities – Global Footprint
SMP Facilities – Global Footprint 3 Million sq. ft. • 13 Manufacturing Plants • 6 Distribution Centers • 9 Offices 7
Slide 8: Favorable Industry Trends
Favorable Industry Trends Vehicle Population is increasing The car parc continues to get older U.S. Light Vehicle Parc Average Age of Cars and Light Trucks 290 12.0 Millions 11.3 11.4 11.5 11.6 11.6 11.7 11.8 11.9 278 281 260 270 272 8.0 264 258 249 253 230 4.0 200 0.0 2013 2014 2015 2016 2017 2018
Slide 9: Strategy Overview
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Slide 10: Strategic Objectives
Strategic Objectives • External programs that provide real value to our customers Premium Value • Best-in-class full-line, full-service supplier of premium engine Proposition management and temperature control products • Internal programs that make us a stronger company Drive for • Investment in inc
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: 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” % of Hrs in Low Cost Plants • Low Cost Manufacturing 82% 74% – Operations in Mexico & Poland 56% 28% – China expansion
Slide 13: Successful Growth Programs
Successful Growth Programs ADVANCED ICE BEYOND ICE TEMPERATURE CATEGORIES CATEGORIES CONTROL • VVT Components • Battery Management • ECV Compressors • 500+ SKUs, Manuf. Bialystok • Battery Current Sensors • 250+ SKUs • Power Distribution • 10.3M VIO by 2021 • EVAP Components • Manuf. Independence &
Slide 14: Successful Growth Programs
Successful Growth Programs Strategic Acquisitions 2011 2012 2013 2014 2016 2017 2019 • 12 Acquisitions in Recent Years • Primary Focus – Bolt-on: acquire competitors – Vertical integration: acquire suppliers – New but related business • Rationale – Provides enhanced value to our customers • Helps wi
Slide 15: Return to Shareholders
Return to Shareholders Dividend Increase Annual Dividend $0.92 $0.84 $0.76 $0.68 $0.60 $0.52 $0.44 $0.36 $0.28 2011 2012 2013 2014 2015 2016 2017 2018 2019 Treasury Stock Buyback Program Year Spend Shares Avg. Price 2011 $4.1M 322,250 $12.84 2012 $5.0M 380,777 $13.13 2013 $6.9M 209,973 $32.69 2014 $
Slide 16: SMP Cash Utilization
SMP Cash Utilization 120 Capital Expenditures Dividends 100 Cash Acquisitions Buybacks 0.4 4.1 10.7 Cash Uses ($M) 80 96.0 10.0 67.3 (Buybacks) 60 5.0 24.4 43.5 14.9 70.5 289.1 37.7 6.8 9.9 (Acquisitions) 40 38.6 19.6 6.9 17.3 127.0 12.8 15.4 18.9 20.6 13.7 (Dividends) 20 2.0 8.2 10.1 11.9 4.5 6.4 2
Slide 17: September 2020 YTD Results
September 2020 YTD Results 17
Slide 18: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures $1,200 Consolidated Net Sales ($M) 35.0% Gross 30.9% Margin 29.4% 28.5% 28.9% 28.7% $1,000 $1,116.1 $1,092.1 $1,137.9 30.0% $1,058.5 $800 25.0% $876.2 $845.1 $896.7 $845.9 $828.7 20.0% $600 15.0% 30.5% 29.3% 28.6% 29.2% $400 10.0% $200 5.0% $- 0.0% 2016 2017 2018
Slide 19: Substantial Gross Margin Improvement
Substantial Gross Margin Improvement Engine Management 34% Future Target: 30% + 32% 31.0% 31.3% 30.7% 30.4% 29.4%† 29.6% 30% 28.6%† 28.2% 28% 26% 25.0% 25.6% 24.3% 26.2% 24% 25.6% 25.3% 25.2% 22% 23.1% 23.5% 21.8% 22.1% 21.6% 21.9% Temperature Control 20% Future Target: 26% + 18% 19.7% 16% 2009 2010
Slide 20: Income Statement Non-GAAP
Income Statement Non-GAAP ($ in millions) September 2020 YTD September 2019 YTD Amount % of Sales Amount % of Sales Net Sales $ 845.9 100.0% $ 896.7 100.0% Gross Profit 242.5 28.7% 259.0 28.9% SG&A Expenses 163.7 19.3% 180.5 20.1% Operating Profit 78.8 9.3% 78.5 8.8% Other Income/(Loss) 0.6 2.3 Inte
Slide 21: Condensed Balance Sheet
Condensed Balance Sheet Actual Q3 2020, Q3 2019 ($ in millions) Dollars Ratios 2020 2019 2020 2019 Cash and Equivalents $ 16.8 $ 13.3 Accounts Receivable/DSO 238.0 169.0 60 50 Inventory/Turns 311.4 340.2 2.2 2.3 Unreturned Customer Inventory 20.0 20.3 Other Assets 364.8 377.9 Total Assets $ 951.0 $
Slide 22: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (IN MILLIONS) September YTD Full Year 2020 2019 2019 NET INCOME $48.2 $46.4 $57.9 DEPRECIATION & AMORTIZATION 19.3 19.3 25.8 ACCOUNTS RECEIVABLE (104.0) (16.6) 17.9 INVENTORY 53.3 11.8 (17.9) ACCOUNTS PAYABLE (13.1) (24.1) (1.9) OTHER OPERATING ACTIVITIES 74.9 6.3 (
Slide 23: Appendix
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Slide 24: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) NINE MONTHS SEPTEMBER 30, 2020 2019 2018 2017 2016 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS GAAP EARNINGS FROM CONTINUING OPERATIONS $ 57,675 $ 56,313 $ 44,697 $ 51,736 $ 53,573 RESTRUCTURING AND INTEGRATI
Slide 25: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) NINE MONTHS SEPTEMBER 30, 2020 2019 2018 2017 2016 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 76,793 $ 74,952 $ 60,498 $ 82,204 $ 85,037 DEPRECIATION & AMORTIZATION 19,313 19,
Slide 26: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands, except per share amounts) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, EARNINGS FROM CONTINUING OPERATIONS 2020 2019 2020 2019 (Unaudited) (Unaudited) GAAP EARNINGS FROM CONTINUING OPERATIONS $ 36,212 $ 22,654
Slide 27: Thank You
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Standard Motor Products — Q3 2020 Earnings Presentation on 6ix