Standard Motor Products, Inc 10-Q for FY2026 Q1
Standard Motor Products, Inc. (SMP)
10-Q
2026-04-30
For: 2026-03-31
View Original
Added on
April 30, 2026
About this 10-Q
Standard Motor Products, Inc filed this 10-Q on April 30, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $451.17M
- up 9.1% from $413.38M a year earlier
- Net income
- $17.14M
- up 36.4% from net income of $12.57M a year earlier
- Diluted EPS
- $0.75
- up 33.9% from $0.56 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |||||
For the quarterly period ended | |||||
or | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |||||
Commission file number: 001-04743
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(718 ) 392-0200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | o | þ | ||||||||||||
| Non-Accelerated Filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
As of the close of business on April 28, 2026, there were 22,263,279 outstanding shares of the registrant’s Common Stock, par value $2.00 per share.
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
INDEX
| Page No. | ||||||||
Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2026 and 2025 | ||||||||
Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2026 and 2025 | ||||||||
Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | ||||||||
Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2026 and 2025 | ||||||||
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2026 and 2025 | 7 | |||||||
2
PART I – FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended March 31, | |||||||||||
| (In thousands, except share and per share data, unaudited) | 2026 | 2025 | |||||||||
Net sales | $ | $ | |||||||||
Cost of sales | |||||||||||
| Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Restructuring expenses | |||||||||||
| Other income, net | |||||||||||
| Operating income | |||||||||||
| Other non-operating income (loss), net | ( | ||||||||||
Interest expense | |||||||||||
Earnings from continuing operations before income taxes | |||||||||||
Provision for income taxes | |||||||||||
| Earnings from continuing operations | |||||||||||
| Loss from discontinued operations, net of income taxes | ( | ( | |||||||||
| Net earnings | |||||||||||
| Net earnings attributable to noncontrolling interest | |||||||||||
| Net earnings attributable to SMP (a) | $ | $ | |||||||||
Net earnings (loss) attributable to SMP | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | ( | ( | |||||||||
| Net earnings attributable to SMP per common share | $ | $ | |||||||||
Per common share data | |||||||||||
Basic: | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | ( | ( | |||||||||
| Net earnings attributable to SMP per common share | $ | $ | |||||||||
Diluted: | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | ( | ( | |||||||||
| Net earnings attributable to SMP per common share | $ | $ | |||||||||
Dividend declared per common share | $ | $ | |||||||||
Weighted average number of common shares, basic | |||||||||||
Weighted average number of common shares, diluted | |||||||||||
(a)Throughout this Form 10-Q, “SMP” refers to Standard Motor Products, Inc. and subsidiaries.
See accompanying notes to consolidated financial statements (unaudited).
3
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Three Months Ended March 31, | |||||||||||
(In thousands, unaudited) | 2026 | 2025 | |||||||||
| Net earnings | $ | $ | |||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation | ( | ||||||||||
Cash flow hedges | ( | ||||||||||
Postretirement benefit plans | ( | ||||||||||
| Total other comprehensive income (loss), net of tax | ( | ||||||||||
| Total other comprehensive income | |||||||||||
Comprehensive income attributable to noncontrolling interest, net of tax: | |||||||||||
| Net earnings | |||||||||||
Foreign currency translation | ( | ||||||||||
| Comprehensive income attributable to noncontrolling interest, net of tax | |||||||||||
| Comprehensive income attributable to SMP, net of tax | $ | $ | |||||||||
See accompanying notes to consolidated financial statements (unaudited).
4
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data) | March 31, 2026 | December 31, 2025 | |||||||||
| ASSETS | (Unaudited) | ||||||||||
| CURRENT ASSETS: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable, less allowances for discounts and expected credit losses of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
| Customer relationships intangibles, net | |||||||||||
Other intangibles, net | |||||||||||
Deferred income taxes | |||||||||||
Investments in unconsolidated affiliates | |||||||||||
| Other assets | |||||||||||
Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Current portion of revolving credit facility | $ | $ | |||||||||
Current portion of term loan and other debt | |||||||||||
Accounts payable | |||||||||||
Sundry payables and accrued expenses | |||||||||||
Accrued customer returns | |||||||||||
Accrued rebates | |||||||||||
Payroll and commissions | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Noncurrent operating lease liabilities | |||||||||||
Accrued asbestos liabilities | |||||||||||
Other accrued liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock – par value $ | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income | |||||||||||
Treasury stock – at cost ( | ( | ( | |||||||||
Total SMP stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to consolidated financial statements (unaudited).
5
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited) | Three Months Ended March 31, | ||||||||||
| 2026 | 2025 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net earnings | $ | $ | |||||||||
| Adjustments to reconcile net earnings to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of deferred financing cost | |||||||||||
| (Decrease) increase to allowance for expected credit losses | ( | ||||||||||
| Increase to inventory reserves | |||||||||||
Equity income from joint ventures | ( | ( | |||||||||
Employee stock ownership plan allocation | |||||||||||
Stock-based compensation | |||||||||||
| Increase in deferred income taxes | ( | ( | |||||||||
Loss on discontinued operations, net of tax | |||||||||||
| Change in assets and liabilities: | |||||||||||
| Increase in accounts receivable | ( | ( | |||||||||
| Increase in inventories | ( | ( | |||||||||
| (Increase) decrease in prepaid expenses and other current assets | ( | ||||||||||
| Increase in accounts payable | |||||||||||
| Increase (decrease) in sundry payables and accrued expenses | ( | ||||||||||
Net change in other assets and liabilities | ( | ( | |||||||||
| Net cash used in operating activities | ( | ( | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Other investing activities | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Repayments of term loans | ( | ( | |||||||||
| Net borrowings under revolving credit facilities | |||||||||||
| Net (repayments) borrowings of other debt and lease obligations | ( | ||||||||||
| Purchase of treasury stock | ( | ||||||||||
| Increase in overdraft balances | |||||||||||
| Dividends paid | ( | ( | |||||||||
| Dividends paid to noncontrolling interest | ( | ||||||||||
| Net cash provided by financing activities | |||||||||||
| Effect of exchange rate changes on cash | ( | ( | |||||||||
| Net (decrease) increase in cash | ( | ||||||||||
| CASH at beginning of period | |||||||||||
| CASH at end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
| Interest | $ | $ | |||||||||
| Income taxes | $ | $ | |||||||||
See accompanying notes to consolidated financial statements (unaudited).
6
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
Three Months Ended March 31, 2026
(In thousands, unaudited) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total SMP | Non- Controlling Interest | Total | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Cash dividends paid | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interest | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Employee Stock Ownership Plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2025
(In thousands, unaudited) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total SMP | Non- Controlling Interest | Total | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Cash dividends paid | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Employee Stock Ownership Plan | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
7
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Basis of Presentation
Standard Motor Products, Inc. and its subsidiaries (referred to hereinafter in these notes to the consolidated financial statements as “we,” “us,” “our,” “SMP,” or the “Company”) is a leading manufacturer and distributor of premium replacement parts in the automotive aftermarket, and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets. Our automotive aftermarket is comprised of three segments, Vehicle Control, Temperature Control and Nissens Automotive, while our Engineered Solutions segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden. We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Europe, Canada, Mexico, and other foreign countries.
These unaudited consolidated financial statements include our accounts and all entities that we control. In addition, we use the equity method to include our share of the results of investments in unconsolidated affiliates in which we do not have a controlling financial interest but have the ability to exercise significant influence. Generally our ownership in these unconsolidated affiliates is 50 % or less. All significant inter-company items have been eliminated.
These unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.
Note 2. Summary of Significant Accounting Policies
The preparation of consolidated annual and quarterly financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We have made a number of estimates and assumptions in the preparation of these consolidated financial statements. We can give no assurance that actual results will not differ from those estimates. Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations. Some of the more significant estimates include allowances for expected credit losses, cash discounts, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, product liability exposures, asbestos, environmental and litigation matters, valuation of deferred tax assets, share based compensation and sales returns and other allowances.
There have been no material changes to our critical accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
Reclassification
Certain prior period amounts in the accompanying consolidated financial statements and related notes have been reclassified to conform to the 2026 presentation.
8
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Recently Issued Accounting Pronouncements
Standards not yet adopted as of March 31, 2026
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This accounting standards update seeks to provide investors and users of the financial statements with clearer information regarding companies' cost structures by disaggregating expense line items in the income statement. ASU 2024-03 requires tabular disclosure in the notes to the financial statements, at each interim and annual reporting period, of certain types of expenses (including purchases of inventory, employee compensation, depreciation and intangible asset amortization) that are already included in commonly presented expense captions on the income statement within continuing operations, and qualitative description of remaining amounts not separately disaggregated quantitatively. Furthermore, the guidance requires disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.
The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, which for us is January 1, 2027 and January 1, 2028, respectively. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted.
This new standard, once adopted, will require us to disclose expenses in a more detailed and granular way than we do in these consolidated financial statements. We are currently evaluating the full impact of adopting ASU 2024-03 on our consolidated financial statements, disclosures, processes and controls. We will adopt the guidance when it becomes effective.
Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity
In May 2025, the FASB issued ASU 2025-03, Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (subtopic 805-10-55). This accounting standards update seeks to improve the requirements for identifying the accounting acquirer in transactions effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity (“VIE”), enhance the comparability of financial statements and result in more closely aligned accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity. Under the current guidance, if the legal acquiree is a VIE, the primary beneficiary of the VIE is always the accounting acquirer. The revised guidance requires an entity to assess the factors in Topic 805, Business Combinations, to determine the accounting acquirer in an acquisition transaction primarily effected by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business.
The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods and applies prospectively to any acquisition transaction that occurs after the initial application date. The ASU is not expected to have a material impact on the Company’s consolidated financial statements.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This accounting standards update removes references to software development project stages and clarifies that an entity is required to start capitalizing software costs when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The update provides the following two factors to consider in determining if the second criterion has been met:
•The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, has not been resolved through coding and testing.
•The significant performance requirements (for example, functions or features) have not been identified or continue to be substantially revised.
The update specifies that the disclosures in Subtopic 360-10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Additionally,
9
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
the amendments clarify that the intangible asset disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs.
The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods and can be applied prospectively, retrospectively or using a modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. We will adopt the guidance when it becomes effective. We are currently evaluating the effects of adopting this standard and do not anticipate the impact to be material.
Hedge Accounting Improvements
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which introduces five targeted improvements to better align hedge accounting with the economics of entities’ risk management activities. The update will be effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. We do not expect this update to have a material effect on our consolidated financial statements and related disclosures.
We have reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.
United States Law
In July 2025, the President signed into law budget reconciliation bill H.R.1, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) introducing tax reform measures that included changes to tax deductions for businesses, international tax rules, and foreign tax credit limitations that become effective in 2025 and 2026. As of enactment, these changes did not materially affect our deferred tax assets and liabilities or related valuation allowances. The impact on our income tax expense for the quarter ended March 31, 2026 was not material, and the changes are not expected to materially impact our effective tax rate and cash tax payments for 2026. We will continue to evaluate the full impact of the legislation as additional guidance becomes available.
In 2025 and 2026 we were subject to tariffs on certain imports into the United States under the International Emergency Economic Powers Act (“IEEPA”). On February 20, 2026, the United States Supreme Court rendered a decision invalidating tariffs imposed under IEEPA. In response to the Supreme Court’s decision, the current Administration imposed temporary tariffs under the Trade Act of 1974. Subsequently, the United States Customs and Border Protection announced a new automated system will begin processing refunds of IEEPA tariffs from April 2026. There remains significant uncertainty regarding potential legal action and administrative delays and therefore, we will continue to evaluate the likelihood of receiving refunds of IEEPA tariffs until such time as the criteria for recording an asset are met. We have not recorded any receivables for potential refunds as of March 31, 2026.
Note 3. Business Combinations
On November 1, 2024, we acquired all the issued and outstanding shares of European automotive aftermarket parts supplier, Nissens Automotive for €366.8 million (approximately $397.1 million). The purchase price allocation was finalized during the quarter ended March 31, 2025, and there were no adjustments to amounts previously disclosed in Note 2 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Note 4. Restructuring Expenses
Cost Reduction Initiative
During the fourth quarter of 2022, to further our ongoing efforts to improve operating efficiencies and reduce costs, we announced plans for a reduction in our sales force, and initiated plans to relocate certain product lines from our Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico. In 2025, we extended the program for plans to relocate additional product lines from certain plants in the United States and Canada to our existing manufacturing facilities in Mexico. We anticipate that the Cost Reduction Initiative will be substantially complete by the end of 2026. Additional restructuring costs related to the initiative are expected to be immaterial. The total restructuring expenses recorded to date are $6.9 million.
10
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Activity for the three months ended March 31, 2026 related to the Cost Reduction Initiative consisted of the following (in thousands):
| Workforce Reduction | Other Exit Costs | Total | ||||||||||||||||||
| Exit activity liability at December 31, 2025 | $ | $ | ||||||||||||||||||
| Restructuring costs provided for during 2026 | (a) | |||||||||||||||||||
| Cash payments | ( | ( | ( | |||||||||||||||||
| Exit activity liability at March 31, 2026 | $ | $ | ||||||||||||||||||
(a)Consists of $0.2 million and $0.1 million in our Vehicle Control operating segment and Temperature Control operating segment, respectively.
Restructuring activities are included within “sundry payables and accrued expenses” and “other accrued liabilities” in the consolidated balance sheet. We regularly evaluate productivity initiatives and may either extend existing restructuring programs or initiate new restructuring programs in the future.
Separation Program
In 2024, we offered a voluntary retirement incentive package of severance and other benefit enhancements to eligible employees in the United States and Canada, and later expanded the program to include involuntary separations. This program is substantially complete with total restructuring expenses recorded to date of $7.7 million and additional restructuring costs are expected to be immaterial. During the three months ended March 31, 2026 cash payments were $0.2 million and the exit activity liability at March 31, 2026 is $0.4 million.
Note 5. Sale of Receivables
We are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions. We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt. Under the terms of the agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale. As such, these transactions are accounted for as a sale.
Pursuant to these agreements, we sold $214.9 million and $184.6 million of receivables during the three months ended March 31, 2026 and 2025, respectively. Receivables presented at financial institutions and not yet collected as of March 31, 2026 were approximately $0.9 million and remained in our accounts receivable balance as of that date. All receivables sold were reflected as a reduction of accounts receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $9.2 million and $9.3 million related to the sale of receivables was included in selling, general and administrative expenses in our consolidated statements of operations for the three months ended March 31, 2026 and 2025, respectively.
To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, or delays or failures in collecting trade accounts receivable. The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each arrangement. If the benchmark reference rate increases significantly, we may be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.
11
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 6. Inventories
Inventories, which are stated at the lower of cost (determined by means of the first-in, first-out method) and net realizable value, consist of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Work in process | |||||||||||
| Raw materials | |||||||||||
| Unreturned customer inventories | |||||||||||
Total inventories | $ | $ | |||||||||
Note 7. Acquired Intangible Assets
Acquired identifiable intangible assets consist of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Trademarks and trade names⁽ᵃ⁾ | ( | ( | |||||||||||||||||||||||||||||||||
| Patents and developed technology | ( | ( | |||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
(a) Trademarks and trade names include $82.5 million of indefinite lived intangible assets which are not amortized.
Total amortization expense for acquired intangible assets was $4.7 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively. Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $13.9 million for the remainder of 2026, $18.6 million in 2027, $18.6 million in 2028, $17.3 million in 2029 and $147.3 million in the aggregate for the years 2030 through 2041.
Note 8. Leases
We have operating and finance leases for our manufacturing facilities, warehouses, office space, automobiles, and certain equipment. Our leases have remaining lease terms of up to eight years , some of which may include one or more five-year renewal options. We have not included any of the renewal options in our operating lease payments as we concluded that it is not reasonably certain that we will exercise any of these renewal options. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease expense is recognized on a straight-line basis over the lease term. Finance leases are not material.
The following tables provide quantitative disclosures related to our operating leases and include all operating leases acquired from the date of acquisition (in thousands, except where otherwise indicated):
| Balance Sheet Information | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Liabilities | |||||||||||
| Sundry payables and accrued expenses | $ | $ | |||||||||
| Noncurrent operating lease liabilities | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
12
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| Weighted Average Remaining Lease Term | |||||||||||
| Weighted Average Discount Rate | % | % | |||||||||
| Three Months Ended March 31, | |||||||||||
| Lease Expense | 2026 | 2025 | |||||||||
| Lease expense | $ | $ | |||||||||
Variable and other lease expense (a) | |||||||||||
| Total lease expenses | $ | $ | |||||||||
(a)Relates to non-lease components such as maintenance, property taxes, etc., and operating lease expense for leases with an initial term of 12 months or less which are not material.
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Supplemental Cash Flow Information | |||||||||||
| Cash paid for the amounts included in the measurement of lease liabilities | $ | $ | |||||||||
Right-of-use assets obtained in exchange for new lease obligations (a) | $ | $ | |||||||||
Minimum Lease Payments
At March 31, 2026, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows:
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
| Less: Interest | ( | ||||
| Present value of lease liabilities | $ | ||||
13
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Credit Facilities and Long-Term Debt
Total debt outstanding is summarized as follows (in thousands):
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
2024 Credit Agreement (a) | |||||||||||
| Multi-currency revolver | $ | $ | |||||||||
U.S. dollar term loan (b) | |||||||||||
Euro term loan (b) | |||||||||||
Other | |||||||||||
| Total debt | $ | $ | |||||||||
| Current maturities of debt | $ | $ | |||||||||
| Long-term debt | |||||||||||
| Total debt | $ | $ | |||||||||
(a) Weighted average interest rate, adjusted for the impact of interest rate swap agreements, is 4.9 % and 4.8 % at March 31, 2026 and December 31, 2025, respectively. Interest rates primarily consist of Term SOFR for borrowings in U.S. dollars and EURIBOR for borrowings in euros.
(b) Amounts are shown net of unamortized deferred financing costs of $1.8 million at March 31, 2026 and $1.9 million at December 31, 2025, respectively.
2024 Credit Agreement
Outstanding borrowings, net of unamortized deferred financing costs, and letters of credit under the 2024 credit agreement consist of the following (in millions):
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Current maturities of debt | $ | $ | ||||||||||||
| Long-term debt | ||||||||||||||
| Total outstanding borrowings | $ | $ | ||||||||||||
| Letters of credit | $ | $ | ||||||||||||
The 2024 Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets. The Company is in compliance with its debt covenants. The 2024 Credit Agreement also contains customary events of default.
Polish Overdraft Facility
The Company has an overdraft facility that provides for borrowings of up to Polish zloty 30 million (approximately $8.0 million) if borrowings are solely in Polish zloty, or up to 85 % of the Polish zloty 30 million limit (approximately $6.8 million) if borrowings are in euros and/or U.S. dollars. The overdraft facility automatically renews every three months until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period. There were $2.2 million of borrowings outstanding under the overdraft facility at March 31, 2026 and $3.6 million borrowings outstanding at December 31, 2025.
14
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Maturities of Debt
As of March 31, 2026, maturities of debt, net of unamortized deferred financing costs, through 2046, assuming no prepayments, are as follows (in thousands):
| Multi-Currency Revolver | U.S. Dollar Term Loan | Euro Term Loan | Other Debt | Total | |||||||||||||||||||||||||
| Remainder of 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| 2027 | |||||||||||||||||||||||||||||
| 2028 | |||||||||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||||||||
| 2030 | |||||||||||||||||||||||||||||
| Thereafter | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Less: current maturities | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Long-term debt | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Deferred Financing Costs
15
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Accumulated Other Comprehensive Income Attributable to SMP
Accumulated other comprehensive income attributable to SMP consists of the following (in thousands):
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Foreign Currency Translation | Cash Flow Hedges (a) | Postretirement Benefit Plans | Total | ||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | (b) | $ | ( | |||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Net other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Tax amounts | ( | ( | ( | ||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | |||||||||||||||||||
(a)Other comprehensive income (loss) before reclassifications consists of $1.8 million ($1.3 million, net of tax) unrecognized gain relating to the change in fair value of cash flow interest rate hedges and cash settlement receipts of $0.2 million ($0.1 million, net of tax).
(b)Foreign currency translation primarily reflects the depreciation of the Danish kroner.
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| Foreign Currency Translation | Cash Flow Hedges (a) | Postretirement Benefit Plans | Total | ||||||||||||||||||||
| Balance at December 31, 2024 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (b) | ( | |||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Net other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Tax amounts | |||||||||||||||||||||||
| Balance at March 31, 2025 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
(a)Other comprehensive income (loss) before reclassifications consists of $1.1 million ($0.8 million, net of tax) unrecognized loss relating to the change in fair value of cash flow interest rate hedges and cash settlement receipts of $0.4 million ($0.3 million, net of tax).
16
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11. Stock-Based Compensation Plans
Our restricted and performance-based share activity was as follows for the three months ended March 31, 2026:
Shares | Weighted Average Grant Date Fair Value Per Share | ||||||||||
Balance at December 31, 2025 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Performance Shares Adjustment | $ | ||||||||||
Balance at March 31, 2026 | $ | ||||||||||
The following table shows stock-based compensation expense, which is primarily recorded in selling, general and administrative expenses in the consolidated statements of operations (in millions):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Stock-based compensation expense | $ | $ | |||||||||
| Income tax benefits related to stock-based compensation | |||||||||||
| Stock-based compensation expense, net of tax | $ | $ | |||||||||
Note 12. Employee Benefits
We maintain a defined contribution Supplemental Executive Retirement (“SERP”) Plan that allows key employees to elect to defer a portion of their compensation. In addition, we may at our discretion make contributions to the SERP plan on behalf of the employees. In the three months ended March 31, 2026, we made company contributions to the SERP plan of $0.5 million related to calendar year 2025.
We also have an Employee Stock Ownership Plan and Trust for employees who are not covered by a collective bargaining agreement. In connection therewith, we maintain an employee benefits trust to which we contribute shares of treasury stock. We are authorized to instruct the trustees to distribute such shares toward the satisfaction of our future obligations under the plan. The shares held in trust are not considered outstanding for purposes of calculating earnings per share until they are committed to be released. The trustees will vote the shares in accordance with their fiduciary duties. During the three months ended March 31, 2026, we contributed 74,400 shares to the trust from our treasury and released 74,400 shares from the trust leaving 200 shares remaining in the trust as of March 31, 2026.
17
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 13. Derivative Instruments
As part of our risk management strategy, we occasionally use derivative instruments, including interest rate swaps, forward foreign exchange contracts and non-derivative instruments such as foreign currency denominated debt, to reduce our market risk for changes in interest rates and to manage foreign exchange rate risk. There have been no material changes during the three months ended March 31, 2026 to our risk management policies, strategies, types of instruments and valuation techniques used in measuring fair value from the information provided in Note 17 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
The notional amounts of financial instruments used to hedge the above risks are as follows (in millions):
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Interest rate swaps | $ | $ | ||||||||||||
| Non-derivative debt instruments | $ | $ | ||||||||||||
We do not offset derivative assets against liabilities in master netting agreements and there were no receivables or payables recognized on receipt or payment of cash collateral at March 31, 2026 and December 31, 2024.
Cash Flow Hedges
The fair value of interest rate swap agreements designated as cash flow hedges of interest rate risk are as follows (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Derivative assets | $ | $ | ||||||||||||
| Derivative liabilities | $ | $ | ||||||||||||
Gains/losses are deferred and recorded in accumulated other comprehensive income, net of income taxes, in our consolidated balance sheet and reclassified to interest expense in the consolidated statements of operations when the hedged interest payments on the underlying borrowings are recognized in interest expense. We expect to reclassify a net gain of $1.2 million from accumulated other comprehensive income in the next twelve months. We perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term. If it becomes probable that the hedged interest payment(s) will not occur, we immediately recognize the related deferred hedging gains/losses in earnings. There were no such reclassifications during the three months ended March 31, 2026.
Net Investment Hedge
Note 14. Fair Value Measurements
We follow a three-level fair value hierarchy that prioritizes the inputs to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The three levels of inputs used to measure fair value are as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
18
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Level 3: Significant unobservable inputs that reflect assumptions that market participants would use in pricing an asset or liability.
The following is a summary of the estimated fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments recorded at fair value (in thousands):
| Fair Value | March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||
| Hierarchy Level | Fair Value | Carrying Amount | Fair Value | Carrying Amount | |||||||||||||||||||||||||
| Deferred compensation | 1 | ||||||||||||||||||||||||||||
| Cash flow hedge interest rate swaps | 2 | ||||||||||||||||||||||||||||
The fair value of the underlying assets held by the deferred compensation plan are based on the quoted market prices of the underlying funds which are held by registered investment companies. The fair value of our cash flow interest rate swap agreements are obtained from independent third parties, are based upon market quotes, and represent the net amount required to terminate the interest rate swap, taking into consideration market rates and counterparty credit risk.
Note 15. Earnings Per Share
The following are reconciliations of the net earnings attributable to SMP and the shares used in calculating basic and diluted net earnings per common share attributable to SMP (in thousands, except shares and per share data):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net earnings (loss) attributable to SMP | ||||||||||||||
| Continuing operations | $ | $ | ||||||||||||
| Discontinued operations | ( | ( | ||||||||||||
| Net earnings attributable to SMP per common share | $ | $ | ||||||||||||
| Basic net earnings (loss) per common share attributable to SMP | ||||||||||||||
| Continuing operations | $ | $ | ||||||||||||
| Discontinued operations | $ | ( | $ | ( | ||||||||||
| Diluted net earnings (loss) per common share attributable to SMP | ||||||||||||||
| Continuing operations | $ | $ | ||||||||||||
| Discontinued operations | $ | ( | $ | ( | ||||||||||
| Weighted average common shares outstanding, basic | ||||||||||||||
| Dilutive effect of restricted stock and performance-based stock | ||||||||||||||
| Weighted average common shares outstanding, diluted | ||||||||||||||
19
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The shares listed below were not included in the computation of diluted net earnings per common share attributable to SMP because to do so would have been anti-dilutive for the periods presented or because they were excluded under the treasury method (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Restricted and performance-based shares | ||||||||||||||
Note 16. Industry Segments
Our business is organized into four operating segments, Vehicle Control, Temperature Control, Nissens Automotive and Engineered Solutions, each of which focuses on a specific line of business. Our automotive aftermarket business is comprised of three operating segments, Vehicle Control, Temperature Control and Nissens Automotive, while our Engineered Solutions operating segment offers a broad array of conventional and future-oriented technologies.
The accounting policies of each segment are the same as those described in Note 1, "Summary of Significant Accounting Policies" in our Form 10-K for the year-ended December 31, 2025.
The following tables contain financial information for each reportable operating segment (in thousands):
| Three Months Ended March 31, 2026 | Vehicle Control | Temperature Control | Nissens Automotive | Engineered Solutions | Intersegment sales | Total | ||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Cost of sales | ( | |||||||||||||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||||||||||||||
| Selling and marketing expenses | ||||||||||||||||||||||||||||||||||||||
| Distribution expenses | ||||||||||||||||||||||||||||||||||||||
| General and administration expenses | ||||||||||||||||||||||||||||||||||||||
| Supply chain financing expenses | ||||||||||||||||||||||||||||||||||||||
| Restructuring expenses | ||||||||||||||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||||||||
| Segment operating income | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Unallocated corporate expenses and other | ||||||||||||||||||||||||||||||||||||||
| Other non-operating income, net | ( | |||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||
| Earnings from continuing operations before income taxes | $ | |||||||||||||||||||||||||||||||||||||
20
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| Three Months Ended March 31, 2025 | Vehicle Control | Temperature Control | Nissens Automotive | Engineered Solutions | Intersegment sales | Total | ||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||||||||||||||
| Selling and marketing expenses | ||||||||||||||||||||||||||||||||||||||
| Distribution expenses | ||||||||||||||||||||||||||||||||||||||
| General and administration expenses | ||||||||||||||||||||||||||||||||||||||
| Supply chain financing expenses | ||||||||||||||||||||||||||||||||||||||
| Restructuring expenses | ||||||||||||||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||||||||
| Segment operating income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Unallocated corporate expenses and other | ||||||||||||||||||||||||||||||||||||||
| Other non-operating income, net | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||
| Earnings from continuing operations before income taxes | $ | |||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Depreciation and amortization | |||||||||||
| Vehicle Control | $ | $ | |||||||||
| Temperature Control | |||||||||||
| Nissens Automotive | |||||||||||
| Engineered Solutions | |||||||||||
| Total operating segment depreciation and amortization | |||||||||||
| Corporate | |||||||||||
| Total depreciation and amortization | $ | $ | |||||||||
| Capital expenditures | |||||||||||
| Vehicle Control | $ | $ | |||||||||
| Temperature Control | |||||||||||
| Nissens Automotive | |||||||||||
| Engineered Solutions | |||||||||||
| Total operating segment capital expenditures | |||||||||||
| Corporate | |||||||||||
| Total capital expenditures | $ | $ | |||||||||
| (in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Investment in unconsolidated affiliates | |||||||||||
| Vehicle Control | $ | $ | |||||||||
| Temperature Control | |||||||||||
| Nissens Automotive | |||||||||||
| Engineered Solutions | |||||||||||
| Total operating segment investment in unconsolidated affiliates | |||||||||||
| Corporate | |||||||||||
| Total investment in unconsolidated affiliates | $ | $ | |||||||||
21
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| (in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Total assets | |||||||||||
| Vehicle Control | $ | $ | |||||||||
| Temperature Control | |||||||||||
| Nissens Automotive | |||||||||||
| Engineered Solutions | |||||||||||
| Total operating segment assets | |||||||||||
| Corporate | |||||||||||
| Total assets | $ | $ | |||||||||
Note 17. Net Sales
We disaggregate our net sales from contracts with customers by major product group and geographic area within each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our net sales are affected by economic factors.
Major Product Group
The Vehicle Control operating segment generates its revenues from core aftermarket sales of ignition, emissions, and fuel delivery, electrical and safety, and wire sets and other product categories primarily in the United States. The Temperature Control operating segment generates its revenue from aftermarket sales of air conditioning (“AC”) system components and other thermal products. The Nissens Automotive operating segment generates its revenues from aftermarket sales of air conditioning system components, engine cooling and engine efficiency products primarily in Europe. The Engineered Solutions operating segment generates revenues from custom-engineered products to vehicle and equipment manufacturers in highly diversified global end-markets such as commercial and light vehicles, construction, agriculture, power sports and marine.
22
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table summarizes consolidated net sales by major product group within each operating segment (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Vehicle Control | |||||||||||
| Engine Management (Ignition, Emissions and Fuel Delivery) | $ | $ | |||||||||
| Electrical and Safety | |||||||||||
| Wire Sets and Other | |||||||||||
| Total Vehicle Control | |||||||||||
| Temperature Control | |||||||||||
| AC System Components | |||||||||||
| Other Thermal Components | |||||||||||
| Total Temperature Control | |||||||||||
| Nissens Automotive | |||||||||||
| Air Conditioning | |||||||||||
| Engine Cooling | |||||||||||
| Engine Efficiency | |||||||||||
| Total Nissens Automotive | |||||||||||
| Engineered Solutions | |||||||||||
| Light Vehicle | |||||||||||
| Commercial Vehicle | |||||||||||
| Construction/Agriculture | |||||||||||
| All Other | |||||||||||
| Total Engineered Solutions | |||||||||||
| Intersegment sales | ( | ||||||||||
| Total | $ | $ | |||||||||
Geographic Area
We sell our line of products primarily in the United States, with additional sales in Europe, Canada, Mexico, and other foreign countries. Sales are attributed to countries based upon the location of the customer. Our sales are substantially denominated in U.S. dollars.
The following tables provide disaggregation of net sales information by geographic area within each operating segment (in thousands):
| Three Months Ended March 31, 2026 | Vehicle Control | Temperature Control | Nissens Automotive | Engineered Solutions | Intersegment sales | Total | ||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||
| Europe, excluding Poland | ( | |||||||||||||||||||||||||||||||
| Canada | ( | |||||||||||||||||||||||||||||||
| Poland | ( | |||||||||||||||||||||||||||||||
| Mexico | ||||||||||||||||||||||||||||||||
| Other foreign | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||
23
STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| Three Months Ended March 31, 2025 | Vehicle Control | Temperature Control | Nissens Automotive | Engineered Solutions | Intersegment sales | Total | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Europe, excluding Poland | |||||||||||||||||||||||||||||||||||
| Canada | |||||||||||||||||||||||||||||||||||
| Poland | |||||||||||||||||||||||||||||||||||
| Mexico | |||||||||||||||||||||||||||||||||||
| Other foreign | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Note 18. Commitments and Contingencies
Asbestos
In 1986, we acquired a brake business, which we subsequently sold in March 1998 and which is accounted for as a discontinued operation in the accompanying consolidated statements of operations. When we originally acquired this brake business, we assumed future liabilities relating to any alleged exposure to asbestos-containing products manufactured by the seller of the acquired brake business. In accordance with the related purchase agreement, we agreed to assume the liabilities for all new claims filed on or after September 2001. Our ultimate exposure will depend upon the number of claims filed against us on or after September 2001, and the amounts paid for settlements, awards of asbestos-related damages, and defense of such claims. At March 31, 2026, approximately 1,032 cases were outstanding for which we may be responsible for any related liabilities. Since inception in September 2001 through March 31, 2026, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $108.1 million. We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.
In evaluating our potential asbestos-related liability, we have considered various factors including, among other things, an actuarial study of the asbestos related liabilities performed by an independent actuarial firm, our settlement amounts and whether there are any co-defendants, the jurisdiction in which lawsuits are filed, and the status and results of such claims. As is our accounting policy, we consider the advice of actuarial consultants with experience in assessing asbestos-related liabilities to estimate our potential claim liability; and perform an actuarial evaluation in the third quarter of each year and whenever events or changes in circumstances indicate that additional provisions may be necessary. The methodology used to project asbestos-related liabilities and costs in our actuarial study considered: (i) historical data available from publicly available studies; (ii) an analysis of our recent claims history to estimate likely filing rates into the future; (iii) an analysis of our pending claims; (iv) an analysis of our settlements and awards of asbestos-related damages to date; and (v) an analysis of closed claims with pay ratios and lag patterns in order to develop average future settlement values. Based on the information contained in the actuarial study and all other available information considered by us, we have concluded that no amount within the range of settlement payments and awards of asbestos-related damages was more likely than any other and, therefore, in assessing our asbestos liability we compare the low end of the range to our recorded liability to determine if an adjustment is required.
In accordance with our policy to perform an annual actuarial evaluation in the third quarter of each year, an actuarial study was performed as of August 31, 2025. The results of the August 31, 2025 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $127.5 million to $275.9 million for the period through 2065. The change from the prior year study, which was as of August 31, 2024, was a $27.9 million increase for the low end of the range and a $65.1 million increase for the high end of the range. The increase in the estimated undiscounted liability from the prior year study at both the low end and high end of the range reflects our actual experience, our historical data and certain assumptions with respect to events that may occur in the future.
Based upon the results of the August 31, 2025 actuarial study, in September 2025 we increased our asbestos liability to $127.5 million, the low end of the range, and recorded an incremental pre-tax provision of $44.4 million in loss from discontinued operations in the consolidated statement of operations. Future legal costs, which are expensed as incurred and reported in loss from discontinued operations in the accompanying consolidated statements of operations, are estimated, according to the August 31, 2025 study, to range from $48.5 million to $115.3 million for the period through 2065. Total operating cash outflows related to discontinued operations, which include settlements, awards of asbestos-related damages and legal costs, net of taxes, were $2.9 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively.
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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We plan to perform an annual actuarial evaluation during the third quarter of each year for the foreseeable future and whenever events or changes in circumstances indicate that additional provisions may be necessary. Given the uncertainties associated with projecting such matters into the future and other factors outside our control, we can give no assurance that additional provisions will not be required. We will continue to monitor events and changes in circumstances surrounding these potential liabilities in determining whether to perform additional actuarial evaluations and whether additional provisions may be necessary. At the present time, however, we do not believe that any additional provisions would be reasonably likely to have a material adverse effect on our liquidity or consolidated financial position.
Other Litigation
We are currently involved in various other legal claims and legal proceedings (some of which may involve substantial amounts), including claims related to commercial disputes, product liability, employment, and environmental. Although these legal claims and legal proceedings are subject to inherent uncertainties, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the ultimate outcome of these matters will not, either individually or in the aggregate, have a material adverse effect on our business, financial condition or results of operations. We may at any time determine that settling any of these matters is in our best interests, which settlement may include substantial payments. Although we cannot currently predict the specific amount of any liability that may ultimately arise with respect to any of these matters, we will record provisions when the liability is considered probable and reasonably estimable. Significant judgment is required in both the determination of probability and the determination as to whether an exposure can be reasonably estimated. As additional information becomes available, we reassess our potential liability related to these matters. Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.
Warranties
We generally warrant our products against certain manufacturing and other defects. These product warranties are provided for specific periods of time of the product depending on the nature of the product. The accrued product warranty costs are based primarily on historical experience of actual warranty claims and included in accrued customer returns on the consolidated balance sheet.
The following table provides the changes in our product warranties (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Balance, beginning of period | $ | $ | |||||||||
| Liabilities accrued for current year sales | |||||||||||
Settlements of warranty claims | ( | ( | |||||||||
| Balance, end of period | $ | $ | |||||||||
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this Report are indicated by words such as “anticipates,” “expects,” “believes,” “intends,” “plans,” “estimates,” “projects,” “strategies” and similar expressions. These statements represent our expectations based on current information and assumptions and are inherently subject to risks and uncertainties. Our actual results could differ materially from those which are anticipated or projected as a result of certain risks and uncertainties, including, but not limited to, changes or loss in business relationships with our major customers and in the timing, size and continuation of our customers’ programs; changes in our supply chain financing arrangements, such as changes in terms, termination of contracts and/or the impact of rising interest rates; increases in production or material costs, including procurement costs resulting from higher customs duties and tariffs; the ability of our customers to achieve their projected sales; competitive product and pricing pressures, and inflationary cost increases in raw materials, labor and transportation, that cannot be recouped in product pricing; the performance of the automotive aftermarket and/or other end-markets that we supply; changes in the product mix and distribution channel mix; economic and market conditions; successful integration of acquired businesses; our ability to achieve benefits from our cost savings initiatives; product liability matters (including, without limitation, those related to asbestos-related contingent liabilities); the effects of disruptions in the supply chain caused by geopolitical risks; uncertainties in U.S. trade policy, particularly as it relates to Mexico, Canada, China, and the European Union; as well as other risks and uncertainties, such as those described under Risk Factors, Quantitative and Qualitative Disclosures About Market Risk and those detailed herein and from time to time in the filings of the Company with the SEC. Forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. In addition, historical information should not be considered as an indicator of future performance. The following discussion should be read in conjunction with the unaudited consolidated financial statements, including the notes thereto, included elsewhere in this Report.
Overview
We are a leading manufacturer and distributor of premium replacement parts in the automotive aftermarket and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets. Our business is organized into four operating segments. Our automotive aftermarket business is comprised of three segments, Vehicle Control, Temperature Control and Nissens Automotive while our Engineered Solutions segment offers a broad array of conventional and future-oriented technologies. We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Europe, Canada, Mexico, and other foreign countries.
Our Vehicle Control operating segment services our core automotive aftermarket customers, deriving its sales from three major product groups: (1) Ignition, Emissions & Fuel Delivery, which includes the traditional internal combustion engine (ICE) dependent categories; (2) Electrical & Safety, which includes powertrain neutral vehicle technologies such as electrical switches/relays, safety related products such as anti-lock brake and vehicle speed sensors, tire pressure monitoring, park assist sensors, and advanced driver assistance components; and (3) Wire Sets & Other, which includes spark plug wire sets and other related products, and are product categories we have noted to be in secular decline based upon product life cycle.
Our Temperature Control operating segment services our core automotive aftermarket customers with thermal products, and is poised to benefit from the broader adoption of more complex air conditioning and other thermal systems. These systems will provide passenger comfort regardless of the vehicles’ powertrain, and are being developed to cool batteries and other products used on electric vehicles. Segment offerings include sales from thermal products in the aftermarket business under two major product groups: (1) AC System Components, which includes compressors, connecting lines, heat exchangers, and expansion devices; and (2) Other Thermal Components, which includes parts that provide engine, transmission, electric drive motor, and battery temperature management.
Our Nissens Automotive operating segment services our core automotive aftermarket customers primarily in Europe with thermal management and engine efficiency products. Segment offerings include premium replacement parts within the following major product groups: (1) Air Conditioning, which includes compressors and condensers, electronics, such as blowers, fans and pressure sensors, and related components, such as evaporators, expansion valves and heaters; (2) Engine Cooling, which includes radiators and oil coolers, electronics, such as electric water pumps and temperature sensors, and related components, such as expansion tanks and fan clutches; and (3) Engine Efficiency, which includes turbochargers and
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intercoolers, electronics, such as exhaust gas recirculation (EGR) valves and modules, and related components, such as EGR coolers and oil feed pipes.
Our Engineered Solutions operating segment supplies custom-engineered solutions to vehicle and equipment manufacturers in highly diversified global end-markets such as commercial and light vehicles, construction, agriculture, power sports and marine. Segment offerings include product categories that offer a broad array of conventional and future-oriented technologies, including those that are specific to vehicle electrification as well as those that are powertrain-neutral.
Overview of Financial Performance
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto. This discussion summarizes the significant factors affecting our results of operations and the financial condition of our business during the three months ended March 31, 2026 and 2025.
| Three Months Ended March 31, | ||||||||
| (In thousands, except per share data) | 2026 | 2025 | ||||||
| Net sales | $ | 451,166 | $ | 413,379 | ||||
| Gross profit | 139,173 | 124,722 | ||||||
| Gross profit % | 30.8 | % | 30.2 | % | ||||
| Operating income | 34,093 | 24,462 | ||||||
| Operating income % | 7.6 | % | 5.9 | % | ||||
| Earnings from continuing operations before income taxes | 25,296 | 18,949 | ||||||
| Provision for income taxes | 6,826 | 5,069 | ||||||
| Earnings from continuing operations | 18,470 | 13,880 | ||||||
| Loss from discontinued operations, net of income taxes | (1,185) | (1,139) | ||||||
| Net earnings | 17,285 | 12,741 | ||||||
| Net earnings attributable to noncontrolling interest | 149 | 175 | ||||||
| Net earnings attributable to SMP | 17,136 | 12,566 | ||||||
| Net earnings per share data attributable to SMP – Diluted: | ||||||||
| Continuing operations | $ | 0.81 | $ | 0.61 | ||||
| Discontinued operations | (0.06) | (0.05) | ||||||
| Net earnings per common share | $ | 0.75 | $ | 0.56 | ||||
Consolidated net sales for the three months ended March 31, 2026 were $451.2 million, an increase of $37.8 million, or 9.1%, compared to net sales of $413.4 million in the same period in 2025.
The increase in net sales in the three months ended March 31, 2026 when compared to the same period in the prior year reflects the impact of multiple factors including:
•higher net sales in our Vehicle Control operating segment as certain customers expanded their range of our products, as well as some benefit from higher prices following the pass through to customers of tariffs implemented later in 2025,
•improved net sales in our Engineered Solutions operating segment as growth begins to recover from the general softness in end markets experienced in 2025,
•increased net sales in our Nissens Automotive operating segment with the benefit of foreign exchange conversion and higher demand from existing customers, and
•slight increase in net sales in our Temperature Control operating segment as the benefits of the strong growth in 2025 continue into early 2026.
•Overall, full year results at our Temperature Control and Nissens Automotive operating segments will be dependent upon summer weather conditions and customer inventory levels.
Gross margins, as a percentage of net sales, increased to 30.8% in the first quarter of 2026 compared to 30.2% in the first quarter of 2025. Overall, the gross margin increase as a percentage of sales in the first quarter of 2026 primarily reflects
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the positive impact of higher sales volumes including the impact of cost control measures and $4.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the first quarter of 2025 that did not recur, which more than offset the impact of higher tariffs on imports into the United States.
Operating margin as a percentage of net sales for the three months ended March 31, 2026 increased to 7.6% as compared to 5.9% for the same period in 2025. Included in our operating margin were selling, general and administrative expenses of $104.8 million, or 23.2% of net sales for the three months ended March 31, 2026 compared to $99.8 million, or 24.2% of net sales, for the same period in 2025. The $5.0 million increase in selling, general and administrative expenses in the first quarter of 2026 as compared to the first quarter of 2025 is principally due to higher distribution expenses driven by higher sales. However, selling, general and administrative expenses as a percentage of net sales improved due to higher sales volume relative to fixed cost components.
United States Trade Policy
Since February 2025, the United States government imposed new tariffs on imports to the United States from certain countries and regions, including Canada, Mexico, China, the European Union and many other countries. Certain foreign governments have implemented retaliatory actions in response to the change in United States trade policy. We operate manufacturing plants in, and rely on imports primarily from Canada, Mexico, China and the European Union to serve our customers in the United States, and therefore, we are exposed to the adverse impacts of higher tariffs on imported raw materials, components and finished goods. In response, we have taken, and will continue to take actions to optimize our operations to minimize the impact of such tariffs and maintain our profitability through cost and pricing measures. We believe our diverse global footprint provides a competitive advantage and resiliency within our supply chain. More than one-half of our sales in the United States are from products manufactured in North America, which are currently mostly exempt from tariffs under the United States-Mexico-Canada Agreement. Products sourced from China represent approximately one-quarter of our sales in the United States, with the remainder of our sales in the United States from products sourced from other regions of the world which are currently subject to lower tariffs. Furthermore, our recent acquisition of Nissens Automotive provides sales diversification outside of the United States. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors, including negotiations between the United States and affected countries, retaliation imposed by other countries, tariff exemptions, and decisions to pause, reimpose or increase tariffs. We will continue to actively monitor international trade developments and evaluate the potential impact on our results of operations and financial condition, including the potential refund of tariffs that had been imposed under the International Emergency Economic Powers Act following the United States Supreme Court decision to invalidate such tariffs.
Sustainability
Our Company was founded in 1919 on the values of integrity, common decency and respect for others. These values are embodied in our Code of Ethics, which has been adopted by the Board of Directors of the Company to serve as a statement of principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business. These values also serve as the foundation for our continued focus on many important sustainability issues.
We have made significant strides with respect to our sustainability initiatives, building awareness of the environmental impact of our operations, and challenging ourselves to reduce our impact by reducing our usage of energy and water, reducing our generation of waste, increasing our recycling efforts and reducing our Scope 1 and Scope 2 greenhouse gas emissions. Additionally, we believe our product offering contributes to a greener car parc through several key product categories that are critical components in automotive systems designed to improve fuel economy and reduce harmful emissions, such as fuel injectors, exhaust gas recirculation valves, sensors and tubes, and evaporative emission control system components. We also bring to market alternative energy products, which utilize cleaner burning fuels or are designed for electric or hybrid electric vehicles, and we remanufacture key categories within our product portfolio, such as air conditioning compressors, diesel injectors and diesel pumps, through processes that save energy and reduce waste.
With each year, we seek to enhance our commitment to sustainability initiatives, improve our employee engagement, and find ways to give back to our communities. Information on our sustainability initiatives can be found in our most current sustainability report and on our corporate website at smpcorp.com under “Our Company” and “Sustainability” and at smpcares.smpcorp.com. Information in our sustainability report and on our corporate websites regarding our sustainability initiatives are referenced for general information only and are not incorporated by reference in this Report.
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Interim Results of Operations
Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
Sales. Consolidated net sales for the three months ended March 31, 2026 were $451.2 million, an increase of $37.8 million, or 9.1%, compared to $413.4 million in the same period of 2025, with the majority of our net sales to customers located in the United States.
The following table summarizes consolidated net sales by segment and by major product group within each segment (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Vehicle Control | |||||||||||
| Engine Management (Ignition, Emissions and Fuel Delivery) | $ | 141,087 | $ | 118,366 | |||||||
| Electrical and Safety | 57,866 | 58,319 | |||||||||
| Wire Sets and Other | 14,886 | 15,657 | |||||||||
| Total Vehicle Control | 213,839 | 192,342 | |||||||||
| Temperature Control | |||||||||||
| AC System Components | 65,198 | 67,191 | |||||||||
| Other Thermal Components | 24,306 | 21,692 | |||||||||
| Total Temperature Control | 89,504 | 88,883 | |||||||||
| Nissens Automotive | |||||||||||
| Air Conditioning | 26,273 | 27,166 | |||||||||
| Engine Cooling | 31,451 | 27,773 | |||||||||
| Engine Efficiency | 16,643 | 11,243 | |||||||||
| Total Nissens Automotive | 74,367 | 66,182 | |||||||||
| Engineered Solutions | |||||||||||
| Light Vehicle | 22,920 | 21,404 | |||||||||
| Commercial Vehicle | 22,908 | 18,605 | |||||||||
| Construction/Agriculture | 9,504 | 9,408 | |||||||||
| All Other | 18,980 | 16,555 | |||||||||
| Total Engineered Solutions | 74,312 | 65,972 | |||||||||
| Intersegment sales | (856) | — | |||||||||
| Total | $ | 451,166 | $ | 413,379 | |||||||
Vehicle Control’s net sales for the three months ended March 31, 2026 increased $21.5 million, or 11.2%, to $213.8 million compared to $192.3 million in the same period of 2025. The increase in Vehicle Control’s net sales was primarily driven by higher demand from certain customers expanding their range of our products, as well as some benefit from higher prices following the pass through to customers of tariffs implemented later in 2025.
Temperature Control’s net sales for the three months ended March 31, 2026 increased $0.6 million, or 0.7%, to $89.5 million compared to $88.9 million in the same period of 2025. Temperature Control’s net sales for the first quarter of 2026 reflect continued strong customer demand experienced in the same period in 2025. Overall full year results will be dependent upon summer weather conditions and customer inventory levels.
Nissens Automotive's net sales for the three months ended March 31, 2026 increased $8.2 million, or 12.4%, to $74.4 million compared to $66.2 million in the same period of 2025. The increase in Nissens Automotive’s net sales primarily resulted from the benefit of foreign exchange conversion and higher demand from existing customers. Overall full year results will be dependent upon summer weather conditions and customer inventory levels.
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Engineered Solutions’ net sales for the three months ended March 31, 2026 increased $8.3 million, or 12.6%, to $74.3 million compared to $66.0 million in the same period of 2025. The increase in Engineered Solutions’ net sales reflects the recovery from the general softness in end markets experienced in 2025.
Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 30.8% in the first quarter of 2026, compared to 30.2% in the first quarter of 2025. The following table summarizes gross margins by segment (in thousands):
| Three Months Ended March 31, | Vehicle Control | Temperature Control | Nissens Automotive | Engineered Solutions | Intersegment sales | Total | |||||||||||||||||||||||||||||
| 2026 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 213,839 | $ | 89,504 | $ | 74,367 | $ | 74,312 | $ | (856) | $ | 451,166 | |||||||||||||||||||||||
| Gross margins | 68,165 | 28,652 | 32,071 | 10,285 | — | 139,173 | |||||||||||||||||||||||||||||
| Gross margin percentage | 31.9 | % | 32.0 | % | 43.1 | % | 13.8 | % | — | 30.8 | % | ||||||||||||||||||||||||
| 2025 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 192,342 | $ | 88,883 | $ | 66,182 | $ | 65,972 | $ | — | $ | 413,379 | |||||||||||||||||||||||
| Gross margins | 62,161 | 27,598 | 23,254 | 11,709 | — | 124,722 | |||||||||||||||||||||||||||||
| Gross margin percentage | 32.3 | % | 31.1 | % | 35.1 | % | 17.7 | % | — | 30.2 | % | ||||||||||||||||||||||||
Compared to the first quarter of 2025, gross margin percentage at our Temperature Control and Nissens Automotive operating segments increased by 0.9 percentage points from 31.1% to 32.0% and 8.0 percentage points from 35.1% to 43.1%, respectively, and decreased at our Vehicle Control and Engineered Solutions operating segments by 0.4 percentage points from 32.3% to 31.9% and 3.9 percentage points from 17.7% to 13.8%, respectively.
The gross margin percentage at our Temperature Control operating segment continued to benefit from higher sales volume leading to favorable manufacturing cost absorption due to higher production levels, as well as the impact of cost saving measures.
The gross margin percentage improvement at our Nissens Automotive operating segment is primarily driven by $4.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the first quarter of 2025 that did not recur.
The gross margin percentage at our Vehicle Control operating segment decreased in the first quarter of 2026 when compared to the same period in 2025 primarily due to the continued impact of higher tariffs on imports into the United States which were passed through to customers at cost.
The gross margin percentage at our Engineered Solutions operating segment decreased in the first quarter of 2026 when compared to the same period in 2025 despite higher sales due to unfavorable capitalization of costs in prior periods that carried over into 2026, as well as inflationary pressures.
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $104.8 million, or 23.2% of consolidated net sales, in the first quarter of 2026, as compared to $99.8 million, or 24.2% of consolidated net sales, in the first quarter of 2025. The $5.0 million increase in selling, general and administrative expenses in the first quarter of 2026 as compared to the first quarter of 2025 is principally due to higher distribution expenses driven by higher sales.
Operating Income. Operating income was $34.1 million, or 7.6% of consolidated net sales, in the first quarter of 2026, compared to $24.5 million, or 5.9% of consolidated net sales, in the first quarter of 2025. The year-over-year increase in operating income of $9.6 million is primarily driven by an increase of $5.3 million at our Nissens Automotive segment principally due to $4.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the first quarter of 2025 that did not recur, and a $2.9 million increase at our Temperature Control operating segment driven by higher gross margins and cost saving measures, as well as controlled selling, general and administrative expenses.
Other Non-Operating Income, Net. Other non-operating income, net was a loss of $1.3 million in the first quarter of 2026, compared to a gain of $2.2 million in the first quarter of 2025 primarily due to the impact of unfavorable foreign currency exchange rates on transactions.
Interest Expense. Interest expense was $7.5 million in the first quarter of 2026, compared to $7.8 million in the first quarter of 2025. The year-over-year decrease in interest expense primarily reflects the impact of lower average interest
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rates, partly offset by higher average outstanding borrowings in the first quarter of 2026 when compared to the first quarter of 2025 .
Income Tax Provision. The income tax provision in the first quarter of 2026 was $6.8 million at an effective tax rate of 27.0% compared to $5.1 million at an effective tax rate of 26.8% for the same period in 2025 primarily reflecting higher earnings.
Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the first quarter of 2026 and 2025 of $1.2 million and $1.1 million, respectively, reflects legal and other administrative expenses associated with our asbestos-related liability. As discussed more fully in Note 18, “Commitments and Contingencies” in the notes to our consolidated financial statements (unaudited), we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.
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Restructuring Programs
For a detailed discussion on the restructuring costs, see Note 4, “Restructuring Expenses,” of the notes to our consolidated financial statements (unaudited).
Liquidity and Capital Resources
Our primary cash requirements include working capital, capital expenditures, quarterly dividend payments, stock repurchases, principal and interest payments on indebtedness and acquisitions. The following table summarizes our primary sources of funds including ongoing net cash flows from operating activities and borrowing availability under our credit agreement (in thousands):
| March 31, | December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | ||||||||||||||||||
| Operating cash flows | $ | (41,929) | $ | (60,220) | $ | 57,440 | ||||||||||||||
| Total debt | $ | 658,620 | $ | 650,555 | $ | 618,715 | ||||||||||||||
| Cash | 59,207 | 50,276 | 72,031 | |||||||||||||||||
| Net debt | $ | 599,413 | $ | 600,279 | $ | 546,684 | ||||||||||||||
| Remaining borrowing capacity | $ | 87,217 | $ | 108,463 | $ | 137,004 | ||||||||||||||
| Total liquidity | 146,424 | 158,739 | 209,035 | |||||||||||||||||
Operating Activities. During the first three months of 2026, cash used in operating activities was $41.9 million compared to $60.2 million in the same period of 2025.
Net earnings during the first three months of 2026 were $17.3 million compared to $12.7 million in the same period of 2025. The $18.3 million decrease in cash used in operating activities resulted primarily from higher net earnings, and lower net cash outflows from changes in working capital. Lower net cash outflows from changes in working capital are primarily due to a lower increase in the inventory balance due to the timing of shipments in early 2026 and improved accounts payable terms, partly offset by a growing accounts receivable balance due to higher net sales in the first three months of 2026, as compared to the same period of 2025.
During the year ended December 31, 2025, we generated operating cash flow from net earnings and by actively managing our payables and accounts receivable despite increased inventories due to higher sales and capitalized tariff costs. We continue to actively manage our working capital to maximize our operating cash flow.
Investing Activities. Cash used in investing activities was $6.7 million during the first three months of 2026, as compared to $6.2 million in the same period of 2025. Investing activities during the three months ended March 31, 2026 and 2025 primarily consisted of capital expenditures of $6.7 million and $9.1 million, respectively. Capital expenditures have returned to normal levels following a period of elevated spending due to the investment in our new distribution facility in Shawnee, Kansas.
Financing Activities. Cash provided by financing activities was $35.8 million and $72.5 million during the first three months of 2026 and 2025, respectively. During the first three months of 2026, we increased our borrowings under our 2024 Credit Agreement by $47.5 million, and paid dividends to SMP shareholders of $7.3 million. Cash provided by borrowings under our 2024 Credit Agreement in the three months ended March 31, 2026 was primarily used to fund our operating activities, including tariff costs, capital expenditures, and pay dividends.
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During the first three months of 2025, we increased our borrowings by $79.1 million and paid dividends to SMP shareholders of $6.8 million. Cash provided by borrowings in the three months ended March 31, 2025 was primarily used to fund our operating activities, capital expenditures and pay dividends.
In February 2026, we raised our quarterly dividend to SMP shareholders from $0.31 to $0.33 per share of common stock. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital requirements, legal requirements, and other factors.
Liquidity
Our primary sources of funds are ongoing net cash flows from operating activities and availability under our financing arrangements, primarily our 2024 Credit Agreement, as described below and further in Note 9, “Credit Facilities and Long-Term Debt,” of the notes to our consolidated financial statements (unaudited) and Note 11 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
Our 2024 Credit Agreement matures in September 2029 and provides for an approximately $750 million credit facility, comprised of (i) a $430 million multi-currency revolving credit facility ("global tranche"); (ii) a $10 million multi-currency revolving credit facility, available to one or more wholly-owned Danish subsidiaries of the Company ("Danish tranche"); (iii) a $200 million term loan facility in U.S. dollars; and (iv) a 100 million euros term loan facility. The revolving credit facility has a $25 million sublimit for the issuance of letters of credit, and a $30 million sublimit for the borrowing of swingline loans.
The term loans amortize in quarterly installments of 1.25% in each of the first two years following the funding in 2024, 1.875% for the next year, and 2.50% in each quarter thereafter. The Company may request up to two one-year extensions of the maturity date.
The Company may, subject to customary conditions, increase the global tranche or obtain incremental term loans in an aggregate amount not to exceed (x) the greater of (i) $168 million and (ii) 100% of consolidated EBITDA for the four fiscal quarters ended most recently before such date, plus (y) any voluntary prepayment of term loans, plus (z) any amount that, after giving effect to the increase, the pro forma First Lien Net Leverage Ratio (as defined in the 2024 Credit Agreement) does not exceed 2.75 to 1.00. The Company may also, subject to customary conditions, request to increase the Danish tranche by up to $5 million.
Borrowings bear interest at the applicable interest rate index selected by the Company based on the particular currency borrowed plus a credit spread adjustment depending on the index, and a margin ranging from 1.25% to 2.25% per annum based on the total net leverage ratio of the Company and its restricted subsidiaries. The Company may select interest periods of one, three or six months depending on the index. Interest is payable at the end of the selected interest period, but no less frequently than quarterly.
The Company may prepay the borrowings, in whole or in part, at any time without premium or penalty, subject to certain conditions.
Outstanding borrowings, net of unamortized deferred financing costs, and letters of credit under the 2024 credit agreement consist of the following (in millions):
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Current maturities of debt | $ | 47.1 | $ | 45.3 | ||||||||||
| Long-term debt | 594.7 | 552.8 | ||||||||||||
| Total outstanding borrowings | $ | 641.8 | $ | 598.1 | ||||||||||
| Letters of credit | $ | 4.5 | $ | 4.6 | ||||||||||
The weighted average interest rate under the 2024 Credit Agreement, adjusted for the impact of interest rate swap agreements, is 4.9% and 4.8% at March 31, 2026 and December 31, 2025, respectively. Interest rates primarily consist of Term SOFR for borrowings in U.S. dollars and EURIBOR for borrowings in euros.
The 2024 Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and
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other payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets. The Company is in compliance with its debt covenants. The 2024 Credit Agreement also contains customary events of default.
The Company has an overdraft facility that provides for borrowings of up to Polish zloty 30 million (approximately $8.0 million) if borrowings are solely in Polish zloty, or up to 85% of the Polish zloty 30 million limit (approximately $6.8 million) if borrowings are in euros and/or U.S. dollars. The overdraft facility automatically renews every three months until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period. There were $2.2 million of borrowings outstanding under the overdraft facility at March 31, 2026.
In order to reduce our accounts receivable balances and improve our cash flow, we are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions. We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt. Under the terms of the agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale. As such, these transactions are accounted for as a sale.
Pursuant to these agreements, we sold $214.9 million and $184.6 million of receivables during the three months ended March 31, 2026 and 2025, respectively. Receivables presented at financial institutions and not yet collected as of March 31, 2026 were approximately $0.9 million and remained in our accounts receivable balance as of that date. All receivables sold were reflected as a reduction of accounts receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $9.2 million and $9.3 million related to the sale of receivables was included in selling, general and administrative expenses in our consolidated statements of operations for the three months ended March 31, 2026 and 2025, respectively.
To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, or delays or failures in collecting trade accounts receivable. The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each arrangement. If the benchmark reference rate increases significantly, we may be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.
In 2022, our Board of Directors authorized the purchase of up to $30 million of our common stock under a stock repurchase program. Stock will be purchased from time to time in the open market, or through private transactions, as market conditions warrant. Under this program, there were no repurchases of common stock during the three months ended March 31, 2026 and 2025. As of March 31, 2026, there was approximately $19.6 million available for future stock purchases under the program.
Material Cash Commitments
Material cash commitments as of March 31, 2026 consist of required cash payments to service our outstanding borrowings of $641.8 million under our 2024 Credit Agreement, the future minimum cash requirements of $134.1 million through 2034 under operating leases, and expected future cash payments relating to our restructuring activities of $0.9 million with approximately $0.8 million to be paid in the remainder of 2026. All of our other known cash commitments as of March 31, 2026 are not material. For additional information related to our material cash commitments, see Note 4, “Restructuring Expenses”, Note 8, “Leases,” and Note 9, “Credit Facilities and Long-Term Debt,” in the notes to our consolidated financial statements (unaudited).
We anticipate that our cash flow from operations, available cash, and available borrowings under our 2024 Credit Agreement will be adequate to meet our future liquidity needs for at least the next twelve months. Significant assumptions underlie this belief, including, among other things, that we will be able to mitigate the future impact, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, and significant inflationary cost increases in raw materials, labor and transportation that we are unable to pass through our customers, macroeconomic uncertainty, and that there will be no material adverse developments in our business, liquidity or capital requirements. If material adverse developments were to occur in any of these areas, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our 2024 Credit Agreement in amounts sufficient to enable us to pay the principal and interest on our indebtedness, or to fund our other liquidity needs.
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In addition, if we default on any of our indebtedness, or breach any financial covenant in our 2024 Credit Agreement, our business could be adversely affected.
For further information regarding the risks in our business, refer to Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical Accounting Policies and Estimates
We have identified the accounting policies and estimates surrounding the “Valuation of Long-Lived and Intangible Assets and Goodwill,” and “Asbestos Litigation” as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies and estimates on our business operations is discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies and estimates affect our reported and expected financial results. There have been no material changes to these and other accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We can give no assurances that actual results will not differ from those estimates. Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of the disruptions in the supply chain caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.
Recently Issued Accounting Pronouncements
For a detailed discussion on recently issued accounting pronouncements and their impact on our consolidated financial statements, see Note 2, “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements (unaudited).
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, primarily related to foreign currency exchange and interest rates. These exposures are actively monitored by management. Our exposure to foreign exchange rate risk is due to certain costs, revenues and borrowings being denominated in currencies other than one of our subsidiary’s functional currency, and net investments in our foreign subsidiaries. Similarly, we are exposed to market risk as the result of changes in interest rates, which may affect the cost of our financing. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. We do not hold or issue derivative financial instruments for trading or speculative purposes.
Foreign Exchange Rate Risk
We have foreign exchange rate exposure primarily with respect to the Canadian dollar, the euro, the British pound, the Polish zloty, the Hungarian forint, the Mexican peso, the Danish kroner, the Taiwan dollar, the Chinese yuan renminbi and the Hong Kong dollar.
For most of our international operations, local currencies have been determined to be functional currencies. Assets and liabilities of these operations are translated to the U.S. dollar at period-end foreign exchange rates, and net sales and expenses at average foreign exchange rates for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income within equity. We have designated our euro-denominated debt as a non-derivative hedge of our net investment in Nissens Automotive's foreign operations whose functional currency is Danish kroner.
As of March 31, 2026 and December 31, 2025, the remeasurement impact of non-functional currency denominated monetary assets and liabilities, excluding monetary liabilities designated in a net investment hedge, are immaterial, therefore, the potential immediate loss to us that would result from a hypothetical 10% change in foreign currency exchange rates would not be expected to have a material impact on our earnings or cash flows. This sensitivity analysis assumes an unfavorable 10% fluctuation in the exchange rates affecting the foreign currencies in which monetary assets
and liabilities are denominated and does not take into account the incremental effect of such a change on our foreign currency denominated revenues.
Interest Rate Risk
We manage our exposure to interest rate risk through the proportion of fixed rate debt and variable rate debt in our debt portfolio. To reduce our market risk to changes in interest rates on our variable rate borrowings, and to manage a portion of our exposure to changes in interest rates, we occasionally enter into interest rate swap agreements to synthetically convert all or a portion of our variable rate debt to a fixed rate. As of March 31, 2026, we had interest rate swap agreements with a total notional amount of $209 million.
As of March 31, 2026, we had $641.8 million of outstanding borrowings under our 2024 Credit Agreement, net of deferred financing costs, of which $434.6 million bears interest at variable rates of interest and $209 million bears interest at fixed rates, after consideration of the interest rate swap agreements, less unamortized deferred financing costs of $1.8 million. Additionally, we invest our excess cash in highly liquid short-term investments. Based upon our current level of borrowings under our 2024 Credit Agreement and our excess cash, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate may have an approximate $3.8 million annualized negative impact on our earnings before income taxes or cash flows.
In addition, we are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions. We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt. During the three months ended March 31, 2026 we sold $214.9 million. Depending upon the level of sales of receivables, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate may have an approximate $2.1 million negative impact on our earnings before income taxes or cash flows for the three months ended March 31, 2026. The charge related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations.
Other than the aforementioned, there have been no significant changes to the information presented in Item 7A (Market Risk) of our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report due to the un-remediated material weakness in internal control over financial reporting related to ineffective general information technology controls over certain IT systems that support financial transactions and reporting at our Nissens Automotive operating segment, which was previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. For additional information, please refer to Part II - Item 9A. of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Our management is committed to maintaining a strong internal control environment. In response to the material weakness, management, with oversight of the Audit Committee of the Board of Directors, has been engaged in developing and implementing a remediation plan to address the material weakness related to ineffective general information technology controls over certain IT systems that support financial transactions and reporting at our Nissens Automotive operating segment. These remediation efforts are ongoing and we have made the following progress in 2026:
•Engaged external resources on a temporary basis while actively recruiting for additional experienced IT personnel
•Rationalized the number of users with privileged access to affected IT systems
•Deployed tools to log the activities of privileged users within affected IT systems
•Actively working on enhancing the design of controls over the monitoring of privileged users activities within affected IT systems
•Continuing to assess, where necessary, implementing additional controls and substantive procedures to obtain comfort over the completeness and accuracy of data from the affected IT systems
(b)Changes in Internal Control Over Financial Reporting.
During the quarter ended March 31, 2026, other than the ongoing remediation described above, we have not made any changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. We review, document and test our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control – Integrated Framework. We may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. These efforts may lead to various changes in our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information required by this Item is incorporated herein by reference to the information set forth in Item 1, “Consolidated Financial Statements” of this Report under the caption “Asbestos” appearing in Note 18, “Commitments and Contingencies,” of the notes to our consolidated financial statements (unaudited).
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information relating to the Company’s purchases of its common stock for each of the three months in the quarter ended March 31, 2026:
| Period | Total Number of Shares Purchased⁽ᵃ⁾ | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
| January 1 to January 31 | — | $ | — | — | $ | — | ||||||||
| February 1 to February 28 | — | — | — | — | ||||||||||
| March 1 to March 31 | 6,591 | 43.13 | — | — | ||||||||||
| Total | 6,591 | $ | 43.13 | — | $ | — | ||||||||
(a) All of the shares purchased were withheld to satisfy employee statutory income tax withholding obligations upon the vesting of restricted stock awards. The value of shares repurchased is based on the market price on the vesting date.
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ITEM 6. EXHIBITS
Exhibit Number | |||||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||
| Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||
| Certification of Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
| Certification of Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
| * | Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the Securities and Exchange Commission. | ||||
| 101.INS** | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). | ||||
| 101.SCH** | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL** | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.LAB** | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE** | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 101.DEF** | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
**In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to the Original Filing shall be deemed to be “furnished” and not “filed.”
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STANDARD MOTOR PRODUCTS, INC. | ||||||||
| (Registrant) | ||||||||
Date: April 30, 2026 | /s/ Nathan R. Iles | |||||||
| Nathan R. Iles | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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EXHIBIT 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Eric P. Sills, certify that:
1.I have reviewed this report on Form 10-Q of Standard Motor Products, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 30, 2026
______________________________
Eric P. Sills
Chief Executive Officer and President
* A signed original of this written statement required by Section 302 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Nathan R. Iles, certify that:
1. I have reviewed this report on Form 10-Q of Standard Motor Products, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 30, 2026
__________________________________
Nathan R. Iles
Chief Financial Officer
* A signed original of this written statement required by Section 302 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Standard Motor Products, Inc. (the “Company”) on Form
10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric P. Sills, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
_____________________________________
Eric P. Sills
Chief Executive Officer and President
April 30, 2026
* A signed original of this written statement required by Section 906 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Standard Motor Products, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nathan R. Iles, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
__________________________________________
Nathan R. Iles
Chief Financial Officer
April 30, 2026
* A signed original of this written statement required by Section 906 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.