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Standard Motor Products, Inc. 2009 Annual Automotive Aftermarket Symposium November 2 - 4, 2009 Forward Looking Statements

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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.

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Investment RationaleCompany and Industry Fundamentals

  • Standard Motor Products is an aftermarket pure play

    • 93% of sales are aftermarket

  • Attractive automotive aftermarket fundamentals provide stable growth, with potential upside driven by industry trends

    • Declining new car sales

    • Aging vehicle fleet

    • Closing car dealerships

    • Lower fuel prices leads to increased mileage

    • Most repairs are non-discretionary

  • Continued margin improvement driven by recent restructuring actions

    • Low-cost production in Mexico and closure of Puerto Rico and Long Island City facilities

    • Production in low cost facilities expected to reach a goal of 46% in 2009 and 55% in 2010, up from 38% in 2008

    • Purchases from low cost suppliers expected to reach a goal of 50% in 2009 and 52% in 2010, up from 47% in 2008

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Investment RationaleOpportunity for Investor Returns

  • SMP market position yields attractive margins and high quality earnings

    • Leading market positions in Engine Management and Temperature Control

    • Strong customer relationships

  • Transaction gives SMP flexibility to pursue strategic opportunities

    • Financial flexibility will allow SMP to take full advantage of opportunities to acquire products / production lines as other vendors rationalize their businesses

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SMP is an Aftermarket Pure Play

  • Based on 250 million vehicles on the road

  • Highly stable

  • Slow and steady growth

  • Tens of thousands of SKUs

  • Not affected by rise and fall of new car production

  • Higher margins

2008 Sales

Export3%

SpecialMarkets5%

OES5%

Traditional47%

OE7%

Retail33%

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Favorable Macro Trends for Aftermarket

Trend

Impact on Aftermarket

  • Increases average age of vehicles driven

  • Increases demand for replacement parts

  • Independent distributors and repair shops will become only option in many areas

  • Miles driven has begun to increase

  • Increasing miles driven creates demand for replacement parts

  • New Car Sales Down

  • Aging Fleet of Vehicles

  • Car Dealerships Closing

  • Fuel Prices Stabilized

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Focused Business Strategy

  • Focused on Two Major Product Lines

  • #1 in each

Temperature

Control

25%

European

Group

6%

Other

1%

Engine

Management

68%

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Focused Business StrategyEngine Management Division

#1 Position in Engine Management

  • #1 market position

  • High brand loyalty

  • Predictable top-line performance

  • High margin product category

Point Set and Condenser

Distributor Cap & Rotor

Business Strengths

Fuel Injectors

Distributorless Ignition System Module

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Focused Business Strategy Temperature Control Division

#1 Position in Temperature Control

  • #1 market position

  • Top-line growth

    • Recent wins in 2009 (AutoZone, CSK, Pep Boys)

  • Cost reduction as a result of plant relocations to Reynosa, Mexico

  • Significant operating leverage

Temperature Control Products

Business Strengths

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Strategic Initiatives

  • 2003-2005

    • Dana Engine Management Acquisition and Integration

  • 2006-2007

    • Exit UK Manufacturing

    • Establish Low Cost Poland Manufacturing Site

  • 2007 - 2008

    • Exit high-cost manufacturing facilities (Puerto Rico & LIC)

    • Expand low-cost manufacturing in Reynosa, MX

    • Begin remanufacturing compressors in Reynosa, MX

  • 2009

    • Continued shift to three manufacturing facilities in Reynosa, MX

    • Acquired Federal Mogul Wire Product Line

    • Potential sale of European Distribution business

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Move to Low Cost Environment

Purchasing

Manufacturing

% production labor hours in low cost facilities

% purchased from low cost suppliers

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2008 - 2009 Operational Improvements

  • Inventory Reduction

    • Reduced by 17%, or $40mm, over last 12 months

  • Accounts Receivable Reduction

    • Reduced by 28%, or $68mm, over last 12 months

  • SG&A Reduction

    • $18mm in savings achieved YTD

    • Reduced 10% of salaried positions over last 12 months

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September YTD Income Statement Non-GAAP(Excluding Non-Operational Gains and Losses)

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Condensed Balance Sheet

  • Improved free cash flow

    • Inventory management – Reduced by $40mm from Sep ‘08

    • A/R factoring – Reduced by $68mm from Sep ‘08

  • Reduced debt by $119M

    • Retired $32mm balance of convertible bonds

    • Issued $12.3mm in convertible subordinated debentures and $5.4mm in unsecured promissory notes

    • Debt to total capitalization ratio of 39.0% vs. 52.6% in Sep ‘08

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Debt Reduction & Cash Flow

(US$ in millions)

Total Debt

Key Achievements

  • $97mm of operating cash flow in YTD 3Q 2009 driven by:

    • Improved working capital position

    • Factoring program with key accounts

  • $86mm of liquidity as of 3Q 2009

    • $10mm in cash

    • $76mm available in revolver

Cash Flow from Operations

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As of September 30, 2009

Pro Forma

SMP Capitalization

(US$ in millions)

% of Total % of Total

Amount Capitalization Amount Capitalization

GE Revolving Credit Facility $90.0 31.7 % $66.3 23.4 %

15% Convertible Subordinated Debentures 12.3 4.3 12.3 4.3

15% Unsecured Promissory Notes 5.4 1.9 5.4 1.9

Other (Europe 2.5, Other 0.7) 3.2 1.1 3.2 1.1

Total Debt $110.9 39.0 % $87.2 30.7 %

Book Value of Equity 173.1 61.0 % 196.8 69.3 %

Total Capitalization $284.0 100.0 % $284.0 100.0 %

Debt / LTM EBITDA(a) 2.9x 2.2x

LTM Interest Coverage 4.0x 4.4x

  • Note: Assumes equity offering of 3.0mm shares at offering price of $8.50;

  • 5.00% gross spread and $0.5mm of other fees

  • LTM Adjusted EBITDA of $38.8mm as of 30-Sep-2009.

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Reconciliation of EBITDA

2004 2005 2006 2007 2008 LTM 9/09

Earnings from Continuing Operations $(8.9) $(1.8) $9.2 $5.4 $(21.1) $(22.9)

+ Income Taxes (3.6) 1.4 6.5 2.8 (8.1) (13.0)

+ Interest Expense 15.1 18.5 20.9 19.1 13.6 9.8

+ Depreciation & Amortization 19.0 17.4 15.5 15.2 14.7 14.8

= EBITDA $21.6 $35.5 $52.1 $42.5 $(0.9) $(11.3)

+ Loss from Divestiture of Europe TC Business – – 3.2 – – –

- Gain on Sale of Fort Worth Texas Building ––– (0.8) – –

- Gain on Sale of LIC Building –– – – (20.4) (1.0)

- Gain from Repurchase of Bonds –– – – (3.8) (2.3)

- Gain on Sale of GPI Stock – – – – – (2.3)

+ Goodwill and Intangible Impairment Charge 6.4 ––– 39.3 39.3

+ Restructuring & Integration Expenses 11.4 5.3 1.8 10.9 16.9 16.4

= Adjusted EBITDA $39.4 $40.8 $57.1 $52.6 $31.1 $38.8

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