On this page of StockholderLetter.com we present the 4/18/2023 shareholder letter from STANDARD MOTOR PRODUCTS, INC. — ticker symbol SMP. Reading current and past SMP letters to shareholders can bring important insights into the investment thesis.

 •  4/18/2023 Letter Continued (Full PDF)
 •  4/16/2024 SMP Stockholder Letter
 •  4/15/2025 SMP Stockholder Letter
 •  More "Auto Parts" Category Stockholder Letters
 •  SMP Benford's Law Stock Score = 96

SMP 4/18/2023 Shareholder/Stockholder Letter Transcript:

ANNUAL REPORT
2022

REGISTRAR AND TRANSFER AGENT
Computershare Trust Company, N.A.
PO Box 43006
Providence, RI 02940-3006
www.computershare.com/investor


INDEPENDENT AUDITORS
KPMG LLP
345 Park Avenue
New York, NY 10154
COMMON STOCK
Standard Motor Products, Inc.   s Common
Stock is listed on the New York Stock
Exchange under the symbol    SMP   
A S U B S I D I A R Y O F S TA N D A R D M O T O R P R O D U C T S , I N C .
A S U B S I D I A R Y O F S TA N D A R D M O T O R P R O D U C T S , I N C .
CORPORATE HEADQUARTERS
U.S. SUBSIDIARY
HUNGARY SUBSIDIARY
Standard Motor Products, Inc.
37-18 Northern Boulevard
Long Island City, NY 11101
Trumpet Holdings, Inc.
Milwaukee, WI
STABIL PRODUKT Elektrotechnikai Kft.
P  cel, Hungary
CANADA SUBSIDIARY
MEXICO SUBSIDIARIES
SMP Motor Products Ltd.
Mississauga, Canada
Standard Motor Products de Mexico,
S. de R.L. de C.V.
Reynosa, Mexico
LOCATIONS
USA
Disputanta, VA
Edwardsville, KS
Ft. Lauderdale, FL
Greenville, SC
Independence, KS
Irving, TX
Lewisville, TX
Long Island City, NY
McAllen, TX
Mishawaka, IN
Milwaukee, WI
Sheboygan Falls, WI
CANADA
Mississauga, ONT
CHINA SUBSIDIARIES
Trombetta Electric (Shanghai) Co., Ltd.
Shanghai, China
SMP Automotive de Mexico,
S.A. de C.V.
Cuernavaca, Mexico
Trombetta Electric (Wuxi) Co., Ltd.
Wuxi, China
SMP Engine Management de Mexico,
S. de R.L. de C.V.
Reynosa, Mexico
GERMANY SUBSIDIARIES
St. Thomas, ONT
KADE Trading GmbH
Glinde, Germany
T  uana
STABIL ELEKTROTECHNIK GmbH
Kirchheim-Teck, Germany
MEXICO
Cuernavaca
Reynosa (4 Mfg. locations)
EUROPE
Glinde, Germany
Kirchhiem, Germany
P  cel, Hungary
Bialystok, Poland
ASIA
Foshan, China (3 locations)
Hong Kong
Shanghai, China
Wuxi, China
Taichung, Taiwan
STABIL VERBINDUNGSTECHNIK GmbH
Kirchheim-Teck, Germany
POLAND SUBSIDIARY
SMP Poland sp. z o.o.
Bialystok, Poland
HONG KONG SUBSIDIARIES
Standard Motor Products (Hong Kong) Limited
Hong Kong
Trombetta Asia, Ltd.
Hong Kong
SMP Four Seasons de Mexico,
S. de R.L. de C.V.
Reynosa, Mexico
Trombetta S. de R.L. de C.V.
T  uana, Mexico
CHINA JOINT VENTURES
Foshan GWOYNG SMP Vehicle Climate
Control & Cooling Products Co. Ltd.
Foshan, China
Foshan FGD SMP Automotive
Compressor Co., Ltd.
Foshan, China
Foshan Che Y  ia
New Energy Technology Co., Ltd.
Foshan, China

YEAR ENDED DECEMBER 31,
2022
Net Sales

1,371,815
2021

1,298,816
2020

1,128,588
Operating Income
104,135
128,999
108,895
Earnings From Continuing Operations*
73,042
99,353
80,417
Net Earnings*

55,351

90,886

57,393
PER SHARE:
Earnings From Continuing Operations* - Diluted

3.30

4.39

3.52
Net Earnings* - Diluted
2.50
4.02
2.51
Dividends
1.08
1.00
0.50
Stock Price at Year End

Average Number of Common and Dilutive Shares
34.80

22,139,981
52.39

22,616,456
40.46
22,825,885
Assets

1,254,929

1,197,961

956,540
Stockholders    Equity

621,038

612,627

550,236
Total Debt to Capitalization
*Attributable to SMP
27.8%
17.3%
1.8%
(Dollars in thousands, except per share amounts)
ABOUT THE COMPANY
With over 100 years in business, Standard Motor Products, Inc. (SMP) is a leader in the industries it serves and a trusted
partner for all its stakeholders. We manufacture and distribute premium replacement parts for our customers in the
Automotive Aftermarket while we provide customizable solutions for vehicle control and thermal management categories in
diversi  ed end markets represented by our 'ngineered Solutions segment. We are a global manufacturer with over   ,100
employees (inclusive of temporary and joint venture employees) across 39 manufacturing, distribution and engineering
facilities and o  ces located in Uorth America, 'urope and Asia. SMP  s strategy combines growth, stability and diversi  cation
to balance today  s corporate needs with future opportunities, along with a goal to provide steady, long  term shareholder
returns through consistent dividends, reinvestment back into our company and selective acquisitions that serve to make our
core businesses stronger.

CONSOLIDATED NET SALES
$1,500
$1,250
$1,092.1 $1,137.9 $1,128.6
2022 was a year of both successes and challenges. We saw
record revenues, growth in new markets, a small but strategic
acquisition furthering our growth potential globally, and
ongoing progress in our sustainability efforts.
$1,000
$750
$500
$250
$0
2018
2019
2020
2021
2022
Full Year (Millions)
EBITDA (W/O SPECIAL ITEMS)*
$180.0
$161.8
$125.5
$120.0
TO OUR SHAREHOLDERS
$1,298.8 $1,371.8
$139.1
$146.1
$107.0
ERIC P. SILLS
Director, Chief Executive
O  cer    President
However it was also a year that witnessed ongoing supply chain
disruption, rampant in  ation across numerous cost inputs, and ever  increasing interest
rates, all of which adversely impacted our bottom line. Yet we feel that none of these
headwinds are insurmountable, and that we are successfully navigating all of them.
It was also a year in which we chose to realign our operating segments as we look to the
future, allowing us to come out of the gates in 2023 with a refreshed approach to the
markets we serve.
$60.0
BUSINESS PERFORMANCE
$0.0
2018
2019
2020
2021
2022
Full Year (Millions)
DILUTED EPS (W/O SPECIAL ITEMS)*
$5.00
$4.45
$3.61
$4.00
$3.59
$3.10
$3.00
$2.55
$2.00
$1.00
}he Uorth American Aftermarket
continues to be a healthy and vibrant
industry. The majority of the key trends
remain favorable     the car parc is
increasing in both size and average age,
gas prices stabilized and miles driven
have rebounded, and while we are
potentially heading towards challenging
economic times, the aftermarket tends to
outperform in that environment.
$0.00
2018
2019
2020
2021
2022
Full Year
*See the Reconciliation of GAAP and Non-GAAP Measures on
the page facing the inside back cover of this Annual Report
QUARTERLY DIVIDENDS
$0.30
$0.23
$0.21
$0.25
$0.25
2020**
2021
$0.27
$0.20
$0.10
$0
2018
2019
Dividend paid in two quarters

2022
We were able to achieve record sales in
both divisions, and garnered new business
with numerous accounts. But what we are
perhaps most proud of are the multitude
of recognition awards, including multiple
   vendor of the year    awards, which we
believe re  ect the ongoing strength in the
relationships that we have with our
customers, and the value they see in the
partnership.
It was also an exciting year for our
non  Aftermarket business, now named
   'ngineered Solutions,    which serves
various on  highway and off  highway
end  markets with custom  engineered
products across a wide variety of
technologies.
Here, too, we posted record sales and
consummated a small but strategic
acquisition in 'urope. But more
importantly, it was a transformational
year for us. After several years of
expanding this business, both organically
and through strategic acquisitions, we
now believe we have critical mass to be a
meaningful supplier to the global blue chip
customers we serve. We are able to
harness the various elements that we
have amassed     product portfolios,
customer lists and geographies     and
really take advantage of synergies and
cross  selling opportunities.
RESEGMENTATION
We recently introduced changes in our
segment reporting that will take effect in
2023. We announced the creation of a new
operating segment,    'ngineered
Solutions,    which has grown in size and
scope to merit being separated from our
Aftermarket reporting.
Furthermore, within the Aftermarket, we
recognized that the name    'ngine
Management    no longer re  ects the
breadth of the product offering, especially
as it relates to the expansive portfolio of
powertrain  neutral products servicing
other vehicle systems. As such, going
forward this segment will now be called
   Vehicle Control.   

We believe these changes will provide better clarity to all
stakeholders into the different markets served, along with their
unique dynamics, and better communicate our long  term growth
strategy.
CORPORATE SUSTAINABILITY
There is nothing new about our focus on being a good corporate
citizen     taking care of our planet, our people, and the
communities in which we operate. We believe that for our 103
year history, it is baked into our #UA.
However, over the last few years, we have recognized the need to
be more deliberate in our actions and more transparent in our
disclosures, and as such we are proud of the ongoing
enhancements to our sustainability reporting.
We take seriously our responsibility to be good stewards of the
environment. We have announced our ambition to be net  zero by
2050, have set and published targets for Scope 1 and 2 emissions
reductions, and are on  pace to achieve our targeted milestones.
Throughout our history, inclusiveness and giving back have
always been engrained in our culture. We have numerous social
and diversity initiatives underway, and are pleased with our
progress.
CHANGES TO OUR BOARD OF DIRECTORS
It has been a period of change within our Board of Directors, as
we seek to refresh with new skills and perspectives. We recently
announced that Larry Sills, our Chairman of the Board, and Bill
Turner, our Presiding Independent Director, will both be assuming
the role of Director 'meritus at the end of their current term.
Larry is the grandson of our founder, was an active employee of
our company for over 50 years, served as our C'Z and Chairman
for decades, and was arguably the most in  uential leader in our
company  s long history. Bill Turner has been a director for over 30
years, including 20 years as our Audit Chair, and currently is our
Presiding Independent Director. He helped guide our company
U.S. TOTAL LIGHT VEHICLES
(MILLIONS)
290
272
278
281
279
283
through numerous challenges, and always provided strong
leadership. We look forward to Larry and Bill continuing to be
available to offer advice and insights as emeritus directors.
Lastly, sadly we announced the passing of John Gethin, a director
since 201  . John served in many leadership positions over his
nearly 30 year tenure at SMP, including as our Chief Zperating
Z  cer, and will be sorely missed.
Meanwhile, we added three new directors, all of whom have
become excellent contributors. Dr. Pamela Puryear, most
recently Chief Human tesources Z  cer at Walgreen Boots
Alliance, brings deep experience in human capital management.
Alejandro Caparelli, Vice President, Global Commercial Lifecycle
Services at Rockwell Automation, brings invaluable skills in
global business management and operations. And most recently,
James Burke, our Chief Zperating Z  cer and previously our
Chief Financial Z  cer, has joined our board as well, bringing
decades of experience in our company and the industry.
IN CLOSING
To conclude, we are very proud of what we were able to
accomplish in 2022. In the face of ongoing challenges, we set
record sales, expanded our business both domestically and
globally, furthered our sustainability initiatives, and introduced a
new operating segment.
As we look to the future, we feel well  equipped to navigate the
evolving landscape, and continue to demonstrate leadership in
the markets we serve. We recognize that while the Aftermarket
shifts very slowly, we need to prepare for the eventual shift to
vehicle electri  cation, and continue to evolve our product
portfolio accordingly. Already about half of our sales are in
product categories that are either powertrain  neutral or
electri  cation  speci  c, and while we fully expect many more
years of sales in IC'  related categories, we are well  positioned
for the future.
Lastly, we would not have reached these accomplishments in
2022 without our employees and know they will be an integral
part of our future success. We thank every one of them.
AVERAGE AGE OF CARS
AND LIGHT TRUCKS
(YEARS)
14
ANNUAL MILES DRIVEN
(TRILLIONS)
3.5
3.225
12
11.7
11.8
11.9
12.1
12.2
3.266
3.0
3.229
3.250
2021
2022
2.830
245
2.5
10
200
2.0
8
2018
2019
2020
2021
2022
Source: Auto Care Association / IHS Markit
2018
2019
2020
2021
2022
Source: Auto Care Association / IHS Markit
2018
2019
2020
Source: USDOT



 4/18/2023 Letter Continued (Full PDF)