Standard Motor Products, Inc. Annual Meeting of Shareholders May 16, 2013
2013 Annual Meeting of Shareholders Larry Sills – Chairman & CEO Jim Burke – VP Finance & CFO
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 future performance, are based on current information and assumptions and involve risks and uncertainties which may cause actual results to differ materially from those discussed herein. You are urged to review our filings with the SEC and our press releases from time to time for details of these risks and uncertainties. 3
Agenda Larry Sills Jim Burke Q and A Industry and Business Overview Strategic Initiatives Jim Burke 2012 Results 2013 First Quarter Q and A
Industry and Business Overview
Standard Motor Products, Inc. 90+ Years in Business Leading Automotive Aftermarket Company Net Sales: ► 2012: $949mm Employees: ► 3,500 Globally Locations: ► 21 Facilities Manufacturing, Distribution and Training Centers throughout North America, Europe, and Asia Key Divisions: ► Engine Management (70%) ► Temperature Controls (30%) Number One In Each Key Markets: ► Automotive Replacement High quality replacement parts for the traditional automotive marketplace, OE/OES, military, high-performance, agricultural, marine, industrial, heavy-equipment markets Stock Symbol: ► SMP (NYSE)
Industry - Positive Demographics Aging Fleet Average Age > 11 Years Vehicles in Operation 250 Million, Continues to Edge Higher Aftermarket Parts and $230 Billion and Projected Service Spend to Increase Vehicle Complexity Shift from DIY to DIFM 7
Strategic Initiatives
Strategic Initiatives 1) Cost Reduction 2) Strategic Acquisitions 3) Return to Shareholders 4) Number One Supplier in Aftermarket
Cost Reduction Low Cost Manufacturing % production labor hours in low cost facilities (Mexico and Poland) 10 Note: Prior years restated to exclude Europe
Cost Reduction Low Cost Purchasing % purchased from low cost suppliers Hong Kong Purchasing Office Opened October 2010 11
Strategic Acquisitions Criteria Clearly Defined Benefits Demonstrable and Measurable Synergies Minimal Risk
Strategic 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 Customers - SMP $7mm, Third Party $11mm Relocate Product Lines to Reynosa for Additional Savings 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 Key Player in Value Line Engine Management Products CompressorWorks $37mm Acquisition, Closing Date 4/30/12 Business - $60mm Revenue: New Compressors for the Automotive Aftermarket, Brands Include CompressorWorks, Cold Power and Torqflo Location: Dallas, Texas 2014 Integration Savings into Temperature Control Existing Facilities
Strategic Acquisitions - 2013 Orange Electronics $6.3mm Equity Share Investment (25%), Closing Date 1/17/13 Business - Tire Pressure Monitoring System (TPMS), Basic Manufacturer Potential High Growth – Market Demand Expected to Triple Over Next 5 Years Location: Taiwan Customers – Primarily U.S. and Asian Aftermarket Distributors SMP Europe OE $6.4mm Acquisition, Closing Date 2/28/13 Business – Switches, Sensors and Coils for the European Automotive OE/OES Market Location: Primarily Poland Manufacturing Product Customers – Include Caterpillar, Cummins, Deere & Company, AB Volvo and Isuzu Motors
Improved Returns to Shareholders Dividend Increase Long Range Target: 1/3 of EPS Treasury Stock Buyback Program 2011: $4.1mm Actual, 322,250 Shares, $12.84 Avg. Price 2012: $5.0mm Actual, 380,777 Shares, $13.13 Avg. Price 2013: $6.0mm Plan $1.2mm Thru April, 41,301 Shares, $27.87 Avg. Price 15
Goal: Number One Supplier in Aftermarket Recent Awards Vendor of the Year Alliance Group Vendor of the Year Federated Group Top Vendor AutoZone
2012 Results
4 Year Performance Measures Consolidated Net Sales Gross Margin EBITDA (w/o Special Items) Diluted EPS (w/o Special Items)
2012 Income Statement (Non – GAAP) 19 19
Q1 2013 Results
Q1 2013 Income Statement Non - GAAP 21 21
Condensed Balance Sheet 22 22
Appendix
Reconciliation of GAAP and Non-GAAP Measures 24
Reconciliation of GAAP and Non-GAAP Measures (cont’d) 25
Reconciliation of GAAP and Non-GAAP Measures (cont’d) 26