Standard Motor Products, Inc. (NYSE:SMP) Q4 2022 Earnings Call Transcript

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Eric Sills: Hey, Scott.

Operator: Our next question comes from Bret Jordan. Your line is open.

Unidentified Analyst: Hey. Good morning, guys.

Eric Sills: Morning, Bret.

Unidentified Analyst: Ask again on the growth outlook. Could you tell us how you see the same SKU price inflation contributing to that growth guide for ’23?

Eric Sills: There’s a lot of moving pieces in there, pricing unit volume, some flexing of customer order patterns, a lot of different pieces. But as you can imagine, pricing has had probably more of an outsized influence in the past year than in previous years. But you have a lot of pieces in that number.

Unidentified Analyst: Okay. But I guess since we are comparing against the high pricing environment in the last year or two, do you see price being positive in ’23? Or are we more on units now rather than ticket?

Eric Sills: It’s a blend of the two, but pricing will continue to be an input.

Unidentified Analyst: Okay. And then on Temperature Control, I guess, could you give us some color as how retail inventories look at this point of the year going into spring?

Eric Sills: Sure. So as we look at the inventories of our major customers where we have that visibility, year-end 2022, they were a bit higher than the previous year. 2021, they really ended pretty low. So they’re a bit healthier coming into this year. That said, as we look at the pre-season orders that we have in-house and are continuing to discuss with our accounts, the pre-season orders remain healthy – comparable to the previous few years. But as you know, very well, Bret, you’ve been following us for a long time. All this is just in preparation for what really happens, which is in the summer. And so we’ll see how the summer turns out. We’re going up against two very hot years in a row. But that’s really where we’re going to see how the year pans out.

Unidentified Analyst: Okay. And then one last question. On the Auto Plus bankruptcy, and the charge, could you remind us sort of how that shakes out. I mean, years ago when Metro went bankrupt, did you wind up recovering a portion of that write-off? And sort of what’s the sort of timing and expectation there?

Larry Sills: Yes, Bret. So I guess with regard to the charge that we took and noted this morning in the release, that was our best estimate of what may be recoverable. As you know, bankruptcy is still very early days credit committee just formed last week, and so we’re still watching closely, but I don’t have any real updates from where we are now.

Unidentified Analyst: Okay, great. Thank you.

Eric Sills: Thank you.

Operator: And it appears we have no further questions at this time.

Eric Sills: Okay. Thank you. We want to thank everyone for participating in our call today. We understand there was a lot of information presented, and we’ll be happy to answer any follow-up questions you may have. Our contact information is available on our press release or our Investor Relations website. And we hope you have a great day. Thank you.

Operator: Thank you, ladies and gentlemen. This concludes today’s program. You may now disconnect.

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