Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q1 2024 Earnings Presentation
33 slides from Standard Motor Products's earnings presentation, May 1, 2024
Slide 1: Standard Motor Products, Inc. Q1 2024 Investor Presentation
Standard Motor Products, Inc. Q1 2024 Investor Presentation 1
Slide 2: Safe Harbor – Forward Looking Statements
Safe Harbor – 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 anticipat
Slide 3: SMP Corporate Snapshot
SMP Corporate Snapshot Founded:1919 2023 Sales Mix by Segment 2023 EBITDA* Mix by Segment HQ: Long Island City, NY Temperature Temperature Control 25% Vehicle Control 16% Locations: 34 Globally Vehicle Control 61% Control 54% Employees: 6,200* Engineered Solutions 23% Engineered Solutions 2023 Finan
Slide 4: Global Footprint with Customer Adjacency
Global Footprint with Customer Adjacency 4
Slide 5: Strategy Overview
Strategy Overview 5
Slide 6: Strategic Objectives
Strategic Objectives Sustainability & Automotive Aftermarket Engineered Solutions Capital Allocation Continuous Improvement • Continued leadership in North • Innovative product solutions for • Commitment to ongoing ESG • Capital investment supports American Aftermarket multiple On-Highway and Off- a
Slide 7: Aftermarket Snapshot
Aftermarket Snapshot Vehicle Control – Category Sales Temperature Control – Category Sales $500 $300 $400 $250 $200 $300 Millions Millions $150 $200 $100 $100 $50 $0 $0 Engine Mgmt. Electrical & Safety Wire Sets + Other AC System Components Other Thermal 2021 2022 2023 2021 2022 2023 2023 Aftermarke
Slide 8: Aftermarket Strategy Value Proposition
Aftermarket Strategy Value Proposition To be the best full-line, full-service supplier of premium vehicle control and temperature control products Our suite of products and services is designed to provide all the needed support for our customer and the technicians who install our parts 8
Slide 9: Favorable Aftermarket Industry Trends
Favorable Aftermarket Industry Trends Number of Repairable Vehicles Continue to Climb Car Parc Continues to Age 290 U.S. Light Vehicle Parc 284 Average Vehicle Age +3% increase 12 12.1 12.2 12.5 258 260 Millions 8 Years 230 4 200 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2015 2016 2017 2018 201
Slide 10: Committed to Growing Technologies
Committed to Growing Technologies ADVANCED INTERNAL COMBUSTION ENGINE COMPONENTS ADVANCED HEV, EV, AND POWERTRAIN-NEUTRAL COMPONENTS ALTERNATIVE ADAS ENERGY SMP evolves to meet the advanced automotive POWER MANAGEMENT technology of today and tomorrow HVAC SENSORS DEGREE OF COMPLEXITY VEHICLE ACTUATO
Slide 11: Vehicle Control Segment
Vehicle Control Segment Ignition, Emission & Fuel Electrical & Safety Wire Sets & Other Powertrain Neutral, ICE-Related1 Hybrid & EV Specific ICE-Related Traditional and Advanced ICE Categories Growing categories used on all vehicles Conventional Wire & Cable categories for • Variable Valve Timing C
Slide 12: Temperature Control Segment
Temperature Control Segment Favorably impacted by electrification • Most product categories are powertrain-neutral or electrification-specific • A/C Compressors transition to year-round operation (battery cooling) A/C System Components Other Thermal Components Most interior heating and cooling compo
Slide 13: Engineered Solutions Snapshot
Engineered Solutions Snapshot Commercial Vehicle - $83M 2023 Sales Mix Construction / Agriculture - $43M 15% 29% 22% Light Vehicle - $93M All Other - $64M 33% Engineered Solutions Products Power Thermal Ignition & Injection & Electronics Sensors Switches Clamping Distribution Management Emission Fue
Slide 14: Engineered Solutions Opportunities
Engineered Solutions Opportunities Market Expansion Diversification Growth Collaboration Broadens the Company’s Diverse end markets, Sales driver as new Supports and expands target opportunities across geographies, and Increasing segment has potential for Demand SMP’s Aftermarket multiple industries
Slide 15: Engineered Solutions Strategy
Engineered Solutions Strategy An extensive portfolio of adaptable products and a global network of resources positioned to serve a diverse customer base Global Reach Focused Customizable World Class with Local Growth Designs Manufacturing Support New Product Sales Support Adaptable Advanced quality
Slide 16: Engineered Solutions Markets
Engineered Solutions Markets Construction & Commercial Vehicle Light Vehicle Agriculture Outdoor Power Hydraulics & Industrial Powersports Equipment 16
Slide 17: Operational Excellence
Operational Excellence Commitment to Manufacturing by Optimized Supply Chain Manufacturing Geography U.S. • Basic manufacturer with 19 • Diverse low-cost footprint 13% Canada manufacturing facilities 3% • Global sourcing and supplier Mexico • 13 design and development development 52% Europe 16% cent
Slide 18: Strategic Acquisitions
Strategic Acquisitions Target technologies, products, and processes: • Align with our core competencies • Consolidating competitors or suppliers • Diversification plays in adjacent markets or technologies • Synergistic product line carve-outs that enhance our capabilities • Servicing common customer
Slide 19: Sustainability
Sustainability We believe in being a good corporate citizen. Stakeholder Commitment: to our company, our employees, our shareholders, our business partners, and our communities Sustainability enhancement a core strategic objective. Environmental Social Governance • Expanded powertrain-neutral safety
Slide 20: Return to Shareholders
Return to Shareholders Quarterly Dividends $0.31 $0.29 $0.27 $0.25 $0.25 $0.23 $0.21 $0.19 $0.17 $0.15 $0.13 $0.11 $0.09 $0.07 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023 2024 * Dividend paid out for two quarters only due to COVID-19 pandemic Share Repurchase Program Period 201
Slide 21: SMP Cash Utilization
SMP Cash Utilization $225 CapEx Dividends Acquisitions (M&A) Repurchases $200M $200 27 $175 Total Utilization $150 Repurchases CapEx $159 $233 $ Millions $125 $104M 18% 26% 125 1 $100 $91M $81M $74M 11 $73M $75 $64M 67 10 30 $58M 24 $51M 15 44 4 $50 $41M $43M 2 38 7 10 20 25 7 14 22 23 M&A 17 Divide
Slide 22: Reasons to Invest in SMP
Reasons to Invest in SMP Disciplined capital allocation Leader in Aftermarket with strategy driving organic and significant share; generating inorganic growth with consistent annual growth improving ROIC Engineered Solutions provides diversified and Longstanding business led fast growth potential ac
Slide 23: March 2024 YTD Results
March 2024 YTD Results 23
Slide 24: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures Consolidated Net Sales ($M) Gross Margin $1,500 35% 30.3% 27.7% 27.8% 27.8% 27.0% $1,250 $1,371.8 $1,358.3 30% $1,298.8 $1,128.6 25% $1,000 20% $750 15% 29.8% 29.0% 27.9% 28.6% $500 UP 1.0% 10% $250 5% $254.3 $276.6 $322.8 $328.0 $331.4 $- 0% 2020 2021 2022 2023 2
Slide 25: Income Statement Non-GAAP
Income Statement Non-GAAP (In millions, except per share amounts) THREE MONTHS ENDED MARCH, 31 2024 2023 Vehicle Control Revenue $ 185.5 $ 184.6 Gross Margin 58.9 31.7% 58.5 31.7% Selling, General & Administrative 35.6 19.2% 34.0 18.4% Factoring Expenses 7.7 4.2% 6.8 3.7% Operating Income $ 15.6 8.4
Slide 26: Income Statement Non-GAAP
Income Statement Non-GAAP STANDARD MOTOR PRODUCTS, INC. Segment Revenues and Operating Income (In millions, except per share amounts) THREE MONTHS ENDED MARCH 31, 2024 2023 Consolidated Results Revenue $ 331.4 $ 328.0 Gross Margin 89.5 27.0% 91.3 27.8% Selling, General & Administrative 64.7 19.5% 60
Slide 27: Condensed Balance Sheet
Condensed Balance Sheet Actual Q1 2024, Q1 2023 ($ in millions) Dollars Ratios 2024 2023 2024 2023 Cash and Equivalents $ 27.1 $ 24.2 Accounts Receivable/DSO 203.9 210.8 52 53 Inventory/Turns 520.7 522.0 1.9 1.9 Unreturned Customer Inventory 18.0 20.6 Other Assets 581.9 542.4 Total Assets $ 1,351.6
Slide 28: Balance Sheet & Cash Flow Metrics
Balance Sheet & Cash Flow Metrics (In millions) MARCH 31, DECEMBER 31, 2024 2023 2023 Working Capital Stats Accounts Receivable, Net $ 203.9 $ 210.8 $ 160.3 Inventories $ 520.7 $ 522.0 $ 507.1 Cash Flow Stats (YTD) Operating cash flows $ (45.7) $ (20.4) Capex $ (10.1) $ (4.4) M&A $ - $ - Dividends $
Slide 29: Appendix
Appendix 29
Slide 30: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) THREE MONTHS MARCH 31, 2024 2023 2022 2021 2020 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS $ 9,863 $
Slide 31: Reconciliation of GAAP and Non-GAAP Measures (cont’d)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) THREE MONTHS MARCH 31, 2024 2023 2022 2021 2020 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 13,371 $ 17,109 $ 27,559 $ 29,751 $ 12,926 DEPRECIATION & AMORTIZATION 7,301 7,082 6
Slide 32: Reconciliation of GAAP and Non-GAAP Measures by Segment
Reconciliation of GAAP and Non-GAAP Measures by Segment (In thousands) THREE MONTHS ENDING MARCH 31, 2024 THREE MONTHS ENDING MARCH 31, 2023 Vehicle Temp. ENG Vehicle Temp. ENG All Other Consol. SMP All Other Consol. SMP Control Control Solutions Control Control Solutions OPERATING INCOME GAAP OPERA
Slide 33: Thank You
Thank You 33
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