Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q1 2020 Earnings Presentation
26 slides from Standard Motor Products's earnings presentation, May 2020
Slide 1: Standard Motor Products, Inc. Q1 2020 Investor Presentation
Standard Motor Products, Inc. Q1 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 Director, CEO JAMES J. BURKE Chief Operating DALE BURKS EVP and Chief NATHAN ILES Chief Financial Board of Directors and President Officer Commer
Slide 6: SMP Snapshot
SMP Snapshot Professionally Recognized Brands Significant Supplier to All Major Distributors 6
Slide 7: SMP Facilities – Worldwide
SMP Facilities – Worldwide 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 12-Years+ vehicles continues to grow U.S. Light Vehicle Parc Age Mix of Vehicles – Year Range Categories 280 100% Millions 278 270 272 80% 36% 38% 39% 40% 41% 42% 43% 44% 44% 264 258 253 60% 240 249 249 24% 24% 24% 23% 23% 21% 19% 17% 15% 40
Slide 9: Strategy Overview
Strategy Overview SMP Standard Motor Products, Inc.
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 Proposition engine 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” • Low Cost Manufacturing % of Hrs in Low Cost Plants – Operations in Mexico & Poland 74% 82% 56% – China expansion (Gwo
Slide 13: Successful Growth Programs
Successful Growth Programs Committed to Growing Technology Categories – GDI High Pressure Pumps – First to manufacture in aftermarket – ETB / ETB Kits – Gaskets Included, Manufactured in Mexico – EVAP Components – Manufactured in Independence and Greenville – Active Grill Shutters – Initial offering
Slide 14: Successful Growth Programs
Successful Growth Programs 2011 2012 2013 Strategic Acquisitions • 12 Acquisitions in Recent Years • Primary Focus – Bolt-on: acquire competitors – Vertical integration: acquire suppliers 2014 – New but related business • Rationale 2016 2017 – Provides enhanced value to our customers • Helps with Fu
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 Cash Acquisitions Buybacks 0.4 100 4.1 10.7 Cash Uses ($M) 80 10.0 67.3 96.0 60 5.0 24.4 43.5 (Buybacks) 14.9 70.5 37.7 6.8 289.1 19.6 9.9 (Acquisitions) 40 38.6 6.9 17.3 12.8 15.4 18.9 127.0 13.7 20.6 20 (Dividends) 11.9 2.0 6.4 8.2 10.1 4.5 2
Slide 17: March 2020 YTD Results
March 2020 YTD Results oy ~ ° NY SVP iti, EAN 5 Ns A} Standard Motor Products, Inc. fst®_ q GENTURY OF EXCELLENGE* 2710 17
Slide 18: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures Consolidated Net Sales ($M) Gross Margin $1,200 35.0% 30.6% 29.8% $1,092.1 $1,137.9 30.0% 27.7% 27.5% 27.7% $1,000 $1,058.5 $1,116.1 25.0% $800 20.0% $600 15.0% 30.5% 29.3% 28.6% 29.2% $400 10.0% $200 $282.4 $261.8 $283.8 $254.3 $238.9 5.0% $- 0.0% 2016 2017 2018
Slide 19: Substantial Gross Margin Improvement
Substantial Gross Margin Improvement Engine Management 34% 32% 31.0% 31.3% 30.7% 30.4% 29.4%ǂ 29.6% 30% 28.2% 28.6%ǂ 28% 26.2% 25.3% 25.6% 25.6% 25.2% 26% 25.0% 24.3% 24% 23.5% 23.1% 21.8% 22.1% 21.9% 21.6% 22% 19.7% 20% Temperature Control 18% 16% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Slide 20: Income Statement Non-GAAP
Income Statement Non-GAAP ($ in millions) March 2020 YTD March 2019 YTD Amount % of Sales Amount % of Sales Net Sales $ 254.3 100.0% $ 283.8 100.0% Gross Profit 70.4 27.7% 78.0 27.5% SG&A Expenses 55.9 21.9% 60.0 21.1% Operating Profit 14.5 5.7% 18.0 6.3% Other Income/(Loss) (0.5) 0.6 Interest Expen
Slide 21: Condensed Balance Sheet
Condensed Balance Sheet Actual Q1 2020, Q1 2019 ($ in millions) Dollars Ratios 2020 2019 2020 2019 Cash and Equivalents $ 13.3 $ 11.7 Accounts Receivable/DSO 165.7 174.2 54 50 Inventory/Turns 370.9 365.3 2.2 2.4 Unreturned Customer Inventory 19.4 19.8 Other Assets 371.4 341.7 Total Assets $ 940.7 $
Slide 22: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (IN MILLIONS) March YTD Full Year 2020 2019 2019 NET INCOME $8.6 $12.2 $57.9 DEPRECIATION & AMORTIZATION 6.5 6.2 25.8 ACCOUNTS RECEIVABLE (32.7) (22.3) 17.9 INVENTORY (5.3) (14.7) (17.9) ACCOUNTS PAYABLE (11.9) 1.2 (1.9) OTHER OPERATING ACTIVITIES 2.0 (9.3) (4.9) OP
Slide 23: Appendix
Appendix SMP Standard Motor Products, Inc. 23
Slide 24: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) THREE MONTHS MARCH 31, 2020 2019 2018 2017 2016 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS GAAP EARNINGS FROM CONTINUING OPERATIONS $ 9,621 $ 13,104 $ 8,597 $ 16,367 $ 12,656 RESTRUCTURING AND INTEGRATION EX
Slide 25: Reconciliation of GAAP and Non-GAAP Measures (cont’d)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) THREE MONTHS MARCH 31, 2020 2019 2018 2017 2016 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 12,926 $ 17,514 $ 11,644 $ 25,874 $ 20,041 DEPRECIATION & AMORTIZATION 6,539 6,178 6
Slide 26: Thank You
Thank You of Nn NN A Standard Motor Products, Inc. Sq CENTURY OF EXCELLENg- 27 26
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