Good morning, and thank you all for joining us for our next Midwest IDEAS Conference presentation. Presenting next is Standard Motor Products, which trades on the New York Stock Exchange under the ticker symbol SMP. Representing the company today is their VP, Investor Relations and Corporate Development, Tony Cristello. Tony? Hi, good morning, everyone. Apologize. Our CFO unfortunately got called into a meeting, so you're stuck with me. Let's see if I can advance these slides here. Is this just supposed to click? T here we go. Okay, perfect. A little bit about us. Standard Motor Products, a 107-year-old company, listed on the stock exchange almost 50 years ago. We operate in three main segments, a North American aftermarket segment, a European segment, which comes as a result of a recent acquisition we made, and then our Engineered Solutions segment. Just under $2 billion in revenue, $200 million or so in adjusted EBITDA, and 6,000 people on a global basis. North American aftermarket's almost 2/3 of our business, and then the aftermarket in Europe is just under 20%, and Engineered Solutions is the balance. When you think about our company, who are we, what do we do? We sell replacement parts to fix cars, for about 75% of our business. Those parts end up at your garage via our customers, which is AutoZone, O'Reilly, NAPA, parts distributors, warehouse distributors. When you think about the aftermarket, age of vehicles are almost 13 years old, miles driven continue to be pretty steady. Complexity of cars continues to go up. We've essentially become a partner, working with our customers to make sure we have these replacement parts on the road for the vehicles when they fail. When you think about what we did with Nissens, and I'll talk about this further in the presentation, that was a $300+ million company that we bought in Europe at the end of 2024. They're also in the aftermarket business, so they're very aligned with the existing categories that we have, and they gave us a really nice footprint for growth and expansion as well. The Engineered Solutions piece, which is 15% or so of our business, is non-aftermarket. Again, that's not light vehicle in the sense, or OE in the sense of we're supplying a million parts to GM or Ford or Chrysler. A third of the business would be considered light vehicle. Two-thirds of that business is more of Cat or Deere or Polaris or companies that are looking for smaller, unique manufacturing that allows us to leverage what we have in some of our existing facilities, but also gives them a much more of a specialized product as well. The last piece is, we pay a dividend. We continue to look at ways from a capital allocation standpoint, whether it's M&A, share repurchase, and those type of things, to continue to find ways to deliver value to shareholders. A little bit about the expansion of our aftermarket business, and you can see here the light blue was Nissens. End of November, we made that acquisition, about a $300 million business. You can see that what it did for us from an accretion standpoint, a growth standpoint. They're in 17 locations across Europe, and they were very good for us from a growth and cross-sell, and we'll talk a little bit about that as well here in a second. When you think about Standard Motor, leading provider to our customers of aftermarket parts, top five in all the categories that we sell to our customers. Nissens is also a leading European supplier. T hey operate in a thermal space, which is also what we have. That's a little bit less of our business on the aftermarket. If you think about our aftermarket I'll talk about in a second, 2/3 of it is what would be called Vehicle Control, and the other third is Temperature Control. For Nissens, they are heavily weighted towards the Temperature Control with a lighter piece of the Vehicle Control. This just gives a natural opportunity for us to help them expand and grow backfill catalogs, and give new product introductions. When we made the acquisition, a couple of things that we talked about were, one, the opportunities for cross-selling. The second piece was our ability to get $8 million-$12 million in cost synergies. We did not quantify what the gross synergies would be, but we think those are going to be pretty significant as we move out and down the road. The third piece is we are a basic manufacturer in about 60%, 65% of what we sell. They manufacture only 20%, 25% of what they sell. They have a lot of good sourcing and distribution experience that we think will help us as well, and help improve performances across both segments. Our manufacturing footprint, and everyone asks about this because tariffs seems to be a topic every day, even if you do not want it to be. Over 50%, somewhere between 55% and 60% of our North American sales are manufactured in Mexico. Why that is important for us is we source components, we bring the components into Mexico, but we do so much of changing of the product that much of what we sell falls under what is called USMCA compliance. There is no tariff necessarily attached on what we are selling back into the U.S. Not to say we do not have tariff exposure, but we think we probably have less given our footprint. The European facilities, we have got a big facility that we manufacture coils in Poland, and then Slovakia came with the acquisition of Nissens. In Asia, is primarily our joint ventures. We have got three joint ventures in China. We have also introduced a new one recently in Thailand, where we think we are going to get some benefits because this is the first Vehicle Control segment. They are going to be making sensors for us in Thailand, and we think that is going to be a really good opportunity for us. The other JVs right now are focused on the Temperature Control side of the business. If you think about it from a revenue standpoint, these are the three segments, just over 2/3 comes from our North American aftermarket. This of 2025 revenue, 17% was Nissens, which is our European aftermarket. Then 15% was the Engineered Solutions piece. Europe grows at a little bit faster pace than what our North American aftermarket grows. That is just them being able to take share in new products and those type of things. When you think about the North American aftermarket, what do we sell? The two segments we have, one is Vehicle Control, and that is selling things like fuel injection, coils, sensors, wires, things that for the most part are non-discretionary. If you get bad sensors, you get bad coils, you get things that break, your check engine light comes on, most of the time this is going to be a non-discretionary or break-fix type of repair. The consumer a lot of times can't do the. It's not wiper blades, it's not an oil change. Even brakes now has become quite a commodity type product. O ne, it's a bit more non-discretionary is how we think about our business. The second piece is almost 300 million cars on the road, average age 13 years, and that continues to grow. It continues to grow because I don't know how many drove a car when they were younger and the floorboards started to rust, and you had to get rid of that car. Cars don't rust anymore. Right? The technology of the engines and the drive trains has gotten a lot better as well. So we still continue to believe that you're going to have a longer life out of these vehicles because they're just built better. Now with that, the complexity of the cars is higher, and so that's going to drive more business to the professional installer in the garage. So who are our customers? O'Reilly, AutoZone, NAPA. These are all big parts distributors across the U.S. Have good relationships with all of them. For the most part, we have a very high share with all of them as well. Good relationships, and continue to be. We do more than just sell them parts, right? So we do training classes for them. They bring a bunch of technicians in and professional installers, and we'll, not touting Standard Motor Products, but what we do is we talk about repairs of coils or compressors or fuel injection, and it really gives them a good connection between O'Reilly's customers, the professional installer, and some of the services we do for O'Reilly. What's different in the European market is there's no big retailers, no big box retail. One, there's very little DIY. Most everything is driven through your garage in Europe. Two, there is a lot more diversification in terms of the customers. There's no big 20% type customer. No single customer there is greater than 15%. The top six are less than 30% of sales, so a lot different, a lot more fragmented. This is a faster-growing business for us than your traditional market. If you think about the traditional aftermarket, that's a low single-digit type grower, and that's coming just simply from tailwinds that you get from the age, the miles, the complexity, those type of things, year in and year out in general for the aftermarket. In Europe, Nissens has done a very good job of positioning themselves right below the OE brand to the Nissens brand, and that has given them ability to continue to capture share and continue to grow. One of the things we talked about was the new product introductions that has allowed them to also grow. So when we acquired Nissens, we were able to probably backfill their catalog with certain parts that we carried that they didn't. Probably 800+ different types of parts that we were able to immediately introduce. The other thing we've done with them recently is we've introduced coils. We've introduced AC hoses, brand new categories. They never had them. One of the benefits is our coil plant is in Poland, so it's very easy for them to be able to take that product and that distribution edge. We think that's the type of thing we'll continue to see. It's not going to be the only two categories or new categories that we're able to bring to them. Europe gives us a benefit as well, because Europe is further along the curve with EVs and some of the newer technologies there with the car park. It's going to enable us to get some quicker, earlier looks at some of the changing technologies. Remember, the aftermarket is very slow moving. 300 million cars on the road, it takes a long time to cycle a drive train out or a long time for that. EVs, what are they, 2% or 2%-3% of what the vehicles on the road today is. We have to be able to, one, sell combustion engines, sell hybrids, and be prepared down the road for when EVs do become a larger percentage. We're not servicing or selling very many parts for them because there's no market demand for them right now. The one area where we think EVs are going to be beneficial to us, outside of the sensors and some of the other things, and the connectivity of the vehicle that we think we'll be able to have some opportunities, is going to be the thermal side. The batteries need cooling, and we have a lot of expertise in the cooling side of the business. We're already seeing it with Nissens in Europe. You cool the passengers, but you also got to cool that battery. The battery is the heart, and if you don't cool the heart in an EV, the thing's going to die. I live in Texas, and there's many a times in the middle of the summer I see an EV driving down the road with the windows down because there's not enough power left in the battery to get the car home with the AC on. Anyway, just an example of some things, but when it's 107 degrees Fahrenheit out, that's probably not something you want to be doing. Our last segment is the Engineered Solutions piece. I talked a little bit about sort of what they are, what they do. It's a smaller piece of the business. If we go back 10+ years, we were in this category doing wires and some other type products for the OEs. But we, through a series of some acquisitions and growth, it became necessary to break this out as its own segment, and that's where we came out with Engineered Solutions. You can see tractors, trucks, yellow equipment, ATVs, SUVs, those type of things. Those are all types of vehicles that we sell parts into. Most of the parts are going to be complementary parts to what we're already manufacturing. It's just a different size compressor, or it's a different type of sensor, or it's a different gauge of connectivity and things that we try to sell to them. This is more volatile. It's sort of at the bottom of its cycle right now, or at least from our business standpoint, and that probably happened over the last 12, call it four, six quarters. Business was here and it's come down here. This year, you're starting to anniversary some of that. W e had really good growth numbers, outsized growth numbers in the first half just because comparisons were so good, and I think now you'll just start to see it leveling out. At some point, you'll get the cycle coming back. It's different because it's out year production runs. Y ou win a piece of business with Deere and they're going to say, "Okay, well, you want it in 2026, we'll bring it on in 2029." It's a different model versus O'Reilly says, "I need to buy 30,000 compressors from you in the next couple quarters." Anyway, we see it, it's a diversified business. There's a lot of white space for us to grow over time, and we'll continue to find ways to do that. Our intent is not to take business on that is going to be heavy demand with light vehicles unless we can make sure that the margins are going to be there for us. When you think about just the sales base and 70% or so of our business is sales to the U.S., and then Europe then is about 20% of our sales mix, and then you can see the balance of where the rest of it's coming from. Additive there, the stack, you can see $1.2 billion was the North American aftermarket. European was about $300 million, and the Engineered Solutions piece was about $275 million. From a growth standpoint, I think you look at it, the North American aftermarket is going to be a low to mid single digit type grower. I would look at the two segments we have. We've got Vehicle Control and we've got Temperature Control. Those are the two North American segments. The Temperature Control segment's probably a mid single digit type grower. 4%-6%, I think over time is how you can look at that. It's just a function of the demand and how it grows. The Vehicle Control is going to naturally be a lower single digit. So I think the combined is low to mid single digits for the North American piece, and that's where our guidance is for this year. When you look at Nissens, it's going to be a bit faster than that, and it's going to be a bit faster than that because they've got a lot more product introductions coming. They're also a share gainer, and I think it's a situation where there's opportunities to also win some new customers that we have relationships with, that are on a global scale, a global player that we think will be able to add over time as well. So we're really excited about Nissens and just the footprint of expansion and growth that gives us. Balance sheet cash flow, just want to point out a few things here, don't need to go into all the details, but if you have questions, we certainly can talk about it. When we acquired Nissens, it was about, just call it $400 million transaction, on a pro forma basis. 7.5x is what we paid. Our leverage was 3.7 x when we closed the deal. We gave guidance that by the end of 2026, our run rate would be 2 x or less on that leverage. Our last quarter, we were 2. 5x, and we feel pretty confident that we're going to hit that 2 x or less, by the time we close out the end of this year. That's where we stand on that. On the CapEx side, we're at $35 million-$40 million. You can see it spike up in 2024. We opened a new distribution center in Shawnee, Kansas, and we've been running higher expenses on the CapEx side. We've also had some duplicate costs, that have been impacting the margins, particularly on the Vehicle Control side, as we've kind of been running dual facilities and are working to get one down and then put that building up for sale, and then just have the second facility. Then the free cash flow, impacted by inventory and inventory demand as we moved into pre-season, as well as some duplicate inventory that we've had to carry as a relationship to the new facility as well. Capital allocation, first and foremost right now is getting our debt paid down. That was the mandate when we came out of the Nissens acquisition. We didn't want to be at 3.7 x. Historically, we are at 1x - 1. 5x. Sometimes we're at sub- 1x. For us to lever up to 3.7x, it had to be a really good transaction for us, and it was transformational for us, and that's one of the reasons we did it. But cash flow has been good, and we continue to feel very comfortable with that. After the CapEx, the dividend, 3.5% yield, continue to pay a very consistent dividend. I don't think that policy changes in the near term. M&A will be opportunistic. I think it's a situation where, I don't know if another Nissens comes by per se, but if there are other opportunities to add something, a new category, a new line, some expansion that would help us strategically, we'll do it. But it's got to be an adjacency. It's got to be the right value for us. Then, the last piece here is share purchases. We were active in buying our shares back prior to Nissens. I think it's a situation where, as we move forward, debt gets paid down. If there's no acquisition out there, this is certainly an area that we'll continue to look for, from a shareholder return standpoint. That's the quick summary of Standard Motor Products. It looks like we have a few minutes left for some Q&A. If you have any, I'm happy to ask about anything that we talked about there. Yes, sir? Any issues with your Canadian facility from the Trump trade war? Yeah, no, nothing at this point. It's pretty small for us. We haven't had any, and a lot of what goes on there ends up going into Canada. It's not as much of an impact there. What has the growth in Engineered Solutions been cycle to cycle? Yeah, I think that's a mid-single digit type growth. I think the first half of this year we were up double digits. That's not normally where you've been. I think Q3 of last year, Q4 of last year, Q1 of this year, Q2 of this year, all been double digits. I think now as we move into the second half of this year, you'll see it sort of should come down more to a flattish type growth until the cycle then ramps back up. One of the things you had happen was, you just had customers delaying or extending out their production runs. Instead of starting it in 2026 or 2027, now they think, "Oh, we're going to start in 2028," whatever it might be. Some of that had the impact as well. Anything else? Y eah, go ahead. Yeah, I was going to say something that I find interesting is that you seem to have positives across this cycle. Right now we're dealing with, at least as per my macro forecast, pretty low consumer free cash flow with higher oil prices, higher gas, relatively high interest rates compared to where we've been, and that reduces the demand for newer vehicles. Y ou guys also make money from those aging vehicles as well with replacement parts. Something that I'm a little bit curious about is do you think that sort of stability factors into, maybe how you might portray yourself to any lenders and how that might reduce your cost of debt potentially? Yeah, so our facility's run by JPMorgan. We've got two more years left on it, I believe. We've got pretty favorable rates, and I think some of that is tied into that. We reset the facility when we acquired Nissens in 2024. T o your point, yeah, I think it gives us a much more stable. We're a very stable business. We're not going to be growing at double digits plus. That's not the type of business we are. New car sales are, call it 15 million instead of 18 million, or replacement cycle is consumers extend or delay. I think a lot of our stuff, and we talked about it being non-discretionary, you can delay it for a little bit, but when it breaks, you don't have a choice, right? AC is a little different. If it's cool, you don't need your AC working, you just roll the window down. If you live someplace hot or it's uncomfortable, you're probably going to get that compressor replaced. Can you explain to me, I think I heard you say, LKQ how they sell the parts, how come they are the [audio distortion] LKQ? Y ou obviously are familiar with LKQ, they've got a lot of different businesses, right? in North America, the U.S., they're heavily a collision-oriented business. They've got, I guess, some distribution up in Canada that is more towards the auto parts side of things. In Europe, LKQ is much like NAPA, right? T hey're a distributor of auto parts. And they're a customer of Nissens. They're a large player over there through a series of multiple combinations of acquisitions over the years. I will say that they've struggled in Europe lately. Part of it is they didn't integrate all the acquisitions that they made. Part of it is they're putting new ERP systems in. Part of it, they've lost some share because they've mismanaged their inventory and how they were going to market in various countries. Y eah, they're a customer over there. Hopefully their business is going to start to stabilize and pick up over time. They could be competitor. What's that? Could be competitor. LKQ is, from our standpoint, is a customer. They're not a competitor to us. Is that what you're asking? Going to be. No. LKQ buys from us. They pick up parts from the U.S. and they make sure [audio distortion] Yeah, but most of the parts they have in the U.S. are collision. The parts we sell are not collision oriented. So they could be a competitor to anyone who is selling the collision piece. But they are not in the traditional hard parts business that we sell to. Okay. Yeah. Given the retailers you sell through, do you have any DIY exposure materials? Our do it yourself business is relatively small. There is some. I would say we are probably 65%, 70%, maybe 75% non-discretionary or do it for me. So it is a very high percentage. If you think about AutoZone, who is a heavy DIY retailer, right? We sell to AutoZone. But I would say their mix of DIY is 75%, their mix of commercial is 25%. Our products to them are probably 50% to 60% of do it for me and the rest. I t is just the complexity of the parts we sell that make it difficult for do it yourself. I do not know if you have ever seen how an AC system gets replaced, but you got to rip the whole dashboard out of your car, and it is not an easy fix. T hanks, everyone. Appreciate the time. If you have any more questions, happy to have some follow-up time, and appreciate the questions today. Thank you so much.