STANDARD MOTOR PRODUCTS, INC.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
SMP$44.46-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0000093389-26-000050
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0000093389-26-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 98 current paragraphs.
41 unchanged; 32 reworded; 21 added; 5 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 5 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
•higher net sales in our Temperature Control operating segment as certain customers expanded their range of products and the benefits of strong growth in 2025 continuing into 2026, partly offset by the recognition of an obligation for our estimate of IEEPA tariff refunds received from the United States Treasury in 2026 that may be passed back to customers in future periods,
Current report
•lower net sales in our Vehicle Control operating segment as relatively flat net sales performance was negatively impacted by the continued decline in sales of the wire sets products category and by the recording of an obligation for our estimate of IEEPA tariff refunds received from the United States Treasury in 2026 that may be passed back to customers in future periods.
Current report
Vehicle Control’s net sales for the three months ended June 30, 2026 decreased $18.8 million, or 9.3%, to $182.9 million compared to $201.7 million in the same period of 2025. The decrease in Vehicle Control’s net sales was primarily driven by the continued decline in sales of the wire sets products category and by the recording of an obligation for our estimate of IEEPA tariff refunds received from the United States Treasury in 2026 that may be passed back to customers in future periods.
Current report
Compared to the second quarter of 2025, gross margin percentage increased across our aftermarket operating segments by 3.6 percentage points from 38.9% to 42.5% at our Nissens Automotive operating segment, 2.9 percentage points from 30.1% to 33.0% at our Vehicle Control operating segment and 2.4 percentage points from 32.2% to 34.6% at our Temperature Control operating segment. Gross margin percentage decreased at our Engineered Solutions operating segment by 0.7 percentage points from 18.1% to 17.4% compared to the second quarter of 2025.
Current report
The gross margin percentage at our operating segments that primarily sell to customers based in the United States received the benefit of a temporary margin improvement due to the offsetting reduction in net sales and cost of sales for IEEPA tariff refunds received from the United States Treasury and the recording of an obligation for our estimate of tariff refunds that may be passed back to customers, respectively.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses were$113.5 million, or 22.6%of consolidated net sales, in thesecond quarter of 2026, as compared to$107.5 million, or 21.8% of consolidated net sales, in thesecond quarter of 2025. The$6.0 million increase inselling, general and administrative expenses in thesecond quarter of 2026 as compared to thesecond quarter of 2025 is principally due to higher employee-related costs, including the impact of the change in timing of our annual stock-based compensation grants and higher distribution costs due to higher sales, in addition to higher depreciation expense primarily due to our recent investment in the Shawnee, Kansas distribution facility.
Current report
Operating Income. Operating income was$50.8 million, or 10.1% of consolidated net sales, in thesecond quarter of 2026, compared to$42.8 million, or 8.7% of consolidated net sales, in thesecond quarter of 2025. The year-over-year increase in operating income of$8.0 million was primarily driven byincreases in operating income at our Temperature Control and
Current report
Nissens Automotive operating segments driven by higher gross margins, offset partly by higher selling, general and administrative expenses.
Current report
Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Current report
Sales. Consolidated net sales for thesix months ended June 30, 2026 were$952.8 million, an increase of $45.5 million, or 5.0%, compared to$907.2 million in the same period of 2025, with themajority of our net sales to customers located in the United States. Net sales increased in all operating segments when compared to the same period in 2025.
Current report
Temperature Control’s net sales for the six months ended June 30, 2026 increased $14.0 million, or 6.4%, to $234.3 million compared to $220.2 million in the same period of 2025. Temperature Control’s net sales reflect strong customer demand compared to the same period in 2025 as well as higher demand from certain customers expanding their range of our products, partly offset by the recording of an obligation for our estimate of IEEPA tariff refunds received from the United States Treasury in 2026 that may be passed back to customers in future periods. Overall, full year results at Temperature Control will be dependent upon summer weather conditions and customer inventory levels.
Current report
Nissens Automotive's net sales for the six months ended June 30, 2026 increased $12.3 million, or 7.9%, to $169.0 million compared to $156.7 million in the same period of 2025. Nissens Automotive's net sales include the benefit from favorable foreign exchange translation and sales growth primarily in the engine efficiency group of products. We also expect to benefit from revenue synergies resulting from the acquisition starting in 2026 and beyond. Overall, full year results at Nissens Automotive will be dependent upon summer weather conditions and customer inventory levels.
Current report
Engineered Solutions’ net sales for the six months ended June 30, 2026 increased $18.1 million, or 13.3%, to $154.4 million compared to $136.2 million in the same period of 2025. The increase in Engineered Solutions operating segment net sales reflects the continuing recovery from the general softness in end markets experienced in 2025.
Current report
Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 31.9% in the first six months of 2026, compared to 30.4% in the six months ended June 30, 2025. The following table summarizes gross margins by segment for the six months ended June 30, 2026 and 2025, respectively (in thousands):
Current report
Compared to the first six months of 2025, gross margin percentage increased at all our aftermarket operating segments. The gross margin percentage at our Nissens Automotive, Temperature Control and Vehicle Control operating segments increased by 5.5% percentage points from 37.3% to 42.8%, by 1.8 percentage points from 31.8% to 33.6%, and by 1.2 percentage points from 31.2% to 32.4%, respectively. Engineered Solutions gross margin percentage decreased 2.2 percentage points from 17.9% to 15.7%.
Current report
The gross margin percentage at our Nissens Automotive operating segment benefited from lower freight costs and product cost savings, as well as $4.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the second quarter of 2025 that did not recur. The inventory fair value adjustments are fully amortized as of June 30, 2025.
Current report
Our Temperature Control and Vehicle Control operating segments primarily benefited from a temporary margin improvement due to the offsetting reduction in net sales and cost of sales for IEEPA tariff refunds received from the United States Treasury and the recording of an obligation for our estimate of tariff refunds that may be passed back to customers, respectively, as well as favorable manufacturing cost absorption due to higher production levels, partly offset by the impact of higher tariffs on imports into the United States when compared to comparable period in 2025.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses were$218.4 million, or 22.9%of consolidated net sales, in the firstsix months of 2026, as compared to$207.4 million, or 22.9% of consolidated net sales, in the firstsix months of 2025. The$11.0 million increase inselling, general and administrative expenses in the firstsix months of 2026 as compared to the firstsix months of 2025 is principally due to higher distribution costs due to higher sales in addition to higher depreciation expense primarily due to our recent investment in the Shawnee, Kansas distribution facility, and overall higher employee-related costs, including the impact of the change in timing of our annual stock-based compensation grants.
Current report
Operating Income. Operating income was$84.9 million, or 8.9% of consolidated net sales, in thesix months ended June 30, 2026, compared to$67.3 million, or 7.4% of consolidated net sales, in thesix months ended June 30, 2025. The year-over-year increase in operating income of$17.6 million is primarily driven by higher gross margin percentages at our Nissens Automotive and Temperature Control operating segments.
Current report
Other Non-Operating Income (Expense), Net. Other non-operating income (expense), net was a loss of$0.5 million in thesix months ended June 30, 2026, compared to income of$4.1 million in thesix months ended June 30, 2025. The year-over-year decrease in other non-operating income (expense), net primarily results from the unfavorable impact of changes in foreign currency exchange rates.
Current report
Income Tax Provision. The income tax provision for the six months ended June 30, 2026 was $18.9 million at an effective tax rate of 27.2% compared to $14.9 million at an effective tax rate of 26.9% for the same period in 2025 primarily reflecting changes in the mix of earnings in different tax jurisdictions.
Removed paragraphs (5)
Previous report
•slight increase in net sales in our Temperature Control operating segment as the benefits of the strong growth in 2025 continue into early 2026.
Previous report
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.
Previous report
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.
Previous report
Selling, General and Administrative Expenses. Selling, general and administrative expenses were$104.8 million, or 23.2%of consolidated net sales, in thefirst quarter of 2026, as compared to$99.8 million, or 24.2% of consolidated net sales, in thefirst quarter of 2025. The$5.0 million increase inselling, general and administrative expenses in thefirst quarter of 2026 as compared to thefirst quarter of 2025 is principally due to higher distribution expenses driven by higher sales.
Previous report
Operating Income. Operating income was$34.1 million, or 7.6% of consolidated net sales, in thefirst quarter of 2026, compared to$24.5 million, or 5.9% of consolidated net sales, in thefirst quarter of 2025. The year-over-year increase in operating income of$9.6 million is primarily driven byan 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.
Reworded paragraphs (32)
Previous wording
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.
Current wording
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 decline based upon product life cycle.
Previous wording
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.
Current wording
Consolidated net sales for the three months ended June 30, 2026 were $501.6 million, an increase of $7.7 million, or 1.6%, compared to net sales of $493.9 million in the same period in 2025.
Previous wording
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:
Current wording
The increase in net sales in the three months ended June 30, 2026 when compared to the same period in 2025 reflects the impact of multiple factors including:
Previous wording
•improved net sales in our Engineered Solutions operating segment as growth begins to recover from the general softness in end markets experienced in 2025,
Current wording
•improved net sales in our Engineered Solutions operating segment as demand from existing customers recovers from the general softness in end markets experienced in 2025,
Previous wording
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 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.
Current wording
Gross margins, as a percentage of net sales, increased to 32.8% in the second quarter of 2026 compared to 30.6% in the second quarter of 2025. Overall, the gross margin increase as a percentage of sales in the second quarter of 2026 primarily reflects the positive impact of higher sales volumes, and a temporary margin improvement due to the offsetting reduction in net sales and cost of sales for IEEPA tariff refunds received from the United States Treasury and the recording of an obligation for our estimate of tariff refunds that may be passed back to customers, respectively.
Previous wording
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 inselling, general and administrative expenses in thefirst quarter of 2026 as compared to thefirst 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.
Current wording
Operating margin as a percentage of net sales for the three months ended June 30, 2026 increased to 10.1% as compared to 8.7% for the same period in 2025. Included in our operating margin were selling, general and administrative expenses of $113.5 million, or 22.6% of net sales for the three months ended June 30, 2026 compared to $107.5 million, or 21.8% of net sales, for the same period in 2025. The$6.0 million increase inselling, general and administrative expenses in thesecond quarter of 2026 as compared to thesecond quarter of 2025 is principally due to higher employee-related costs, including the impact of the change in timing of our annual stock-based compensation grants and higher distribution costs due to higher sales, in addition to higher depreciation expense primarily due to our recent investment in the Shawnee, Kansas distribution facility.
Previous wording
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.
Current wording
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 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.
Previous wording
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 atsmpcorp.com under “Our Company” and “Sustainability” and atsmpcares.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.
Current wording
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 atsmpcorp.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.
Previous wording
Sales. Consolidated net sales for thethree 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 themajority of our net sales to customers located in the United States.
Current wording
Sales. Consolidated net sales for thethree months ended June 30, 2026 were$501.6 million, an increase of $7.7 million, or 1.6%, compared to$493.9 million in the same period of 2025, with themajority of our net sales to customers located in the United States.
Previous wording
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.
Current wording
Temperature Control’s net sales for the three months ended June 30, 2026 increased $13.4 million, or 10.2%, to $144.7 million compared to $131.4 million in the same period of 2025. Temperature Control’s net sales for the second quarter of 2026 reflect certain customers expanding their range of products and the benefits of strong growth in 2025 continuing into 2026, partly offset by the recognition of an obligation for our estimate of IEEPA tariff refunds received from the United States Treasury in 2026 that may be passed back to customers in future periods. Overall full year results will be dependent upon summer weather conditions and customer inventory levels.
Previous wording
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.
Current wording
Nissens Automotive's net sales for the three months ended June 30, 2026 increased $4.1 million, or 4.6%, to $94.7 million compared to $90.5 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.
Previous wording
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.
Current wording
Engineered Solutions’ net sales for the three months ended June 30, 2026 increased $9.8 million, or 13.9%, to $80.0 million compared to $70.3 million in the same period of 2025. The increase in Engineered Solutions’ net sales reflects the continuing recovery from the general softness in end markets experienced in 2025.
Previous wording
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):
Current wording
Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 32.8% in the second quarter of 2026, compared to 30.6% in the second quarter of 2025. The following table summarizes gross margins by segment (in thousands):
Previous wording
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.
Current wording
In addition to the benefit from IEEPA tariff refunds, the gross margin percentage at our Temperature Control operating segment continued to benefit from higher sales volume as customers prepare for the warmer weather season leading to favorable manufacturing cost absorption due to higher production levels, as well as the impact of cost saving measures.
Previous wording
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.
Current wording
The gross margin percentage improvement at our Nissens Automotive operating segment was not impacted by the IEEPA tariff refunds and was primarily driven by a favorable mix of products sold and $1.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the second quarter of 2025 that did not recur.
Previous wording
Other Non-Operating Income, Net. Other non-operating income, net was a loss of$1.3 million in thefirst quarter of 2026, compared to a gain of$2.2 million in thefirst quarter of 2025 primarily due to the impact of unfavorable foreign currency exchange rates on transactions.
Current wording
Other Non-Operating Income, Net. Other non-operating income, net of$0.8 million in thesecond quarter of 2026, decreased incomparison to$1.9 million in thesecond quarter of 2025 primarily due to the impact of unfavorable foreign currency exchange rates on transactions.
Previous wording
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 rates, partly offset by higher average outstanding borrowings in the first quarter of 2026 when compared to the first quarter of 2025 .
Current wording
Interest Expense. Interest expense was $7.6 million in the second quarter of 2026, compared to $8.3 million in the second quarter of 2025. The year-over-year decrease in interest expense primarily reflects the impact of lower average interest rates, as well as lower average outstanding borrowings in the second quarter of 2026 when compared to the second quarter of 2025.
Previous wording
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.
Current wording
Income Tax Provision. The income tax provision in the second quarter of 2026 was $12.0 million at an effective tax rate of 27.3% compared to $9.8 million at an effective tax rate of 27.0% for the same period in 2025 primarily reflecting changes in the mix of earnings in different tax jurisdictions.
Previous wording
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.
Current wording
Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the second quarter of 2026 and 2025 of $1.4 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.
Previous wording
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.
Current wording
Vehicle Control’s net sales for the six months ended June 30, 2026 increased $2.7 million, or 0.7%, to $396.8 million compared to $394.0 million in the same period of 2025. The Vehicle Control operating segment benefited from 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, partly offset by the recording of an obligation for our estimate of IEEPA tariff refunds received from the United States Treasury in 2026 that may be passed back to customers in future periods and the continued decline in sales of the wire sets products category.
Previous wording
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.
Current wording
Despite higher net sales, the gross margin percentage in our Engineered Solutions operating segment decreased in the first six months of 2026 when compared to the comparable period in 2025 primarily due to unfavorable capitalization of costs in prior periods that carried over into 2026, as well as inflationary pressures.
Previous wording
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.
Current wording
Operating Activities. During the first six months of 2026, cash provided by operating activities was $58.3 million compared to $5.9 million used in operating activities in the same period of 2025.
Previous wording
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.
Current wording
Net earnings during the first six months of 2026 were $47.9 million compared to $38.3 million in the same period of 2025. The $64.2 million increase in cash provided by 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 higher increase in sundry payables and accrued expenses due to the receipt of IEEPA tariff refunds from the United States Treasury at the end of the second quarter of 2026 and a decrease in the inventory balance due to improvements in inventory management, partly offset by a growing accounts receivable balance due to higher net sales in the first six months of 2026, as compared to the same period of 2025.
Previous wording
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.
Current wording
Investing Activities. Cash used in investing activities was $14.5 million during the first six months of 2026, as compared to $16.3 million in the same period of 2025. Investing activities during the six months ended June 30, 2026 and 2025 primarily consisted of capital expenditures of $14.9 million and $19.3 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.
Previous wording
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.
Current wording
Financing Activities. Cash used in financing activities was $39.5 million during the first six months of 2026, as compared to $32.6 million provided by financing activities in the same period of 2025. During the first six months of 2026, we used cash generated from our operating activities to decrease our borrowings under our 2024 Credit Agreement by $19.4 million, and paid dividends to SMP shareholders of $14.7 million. Cash provided by borrowings under our 2024 Credit Agreement in the six months ended June 30, 2026 was primarily used to fund our operating activities, including tariff costs, capital expenditures, and pay dividends.
Previous wording
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.
Current wording
During the first six months of 2025, we increased our borrowings by $45.9 million and paid dividends to SMP shareholders of $13.6 million. Cash provided by borrowings in the six months ended June 30, 2025 was primarily used to fund our operating activities, capital expenditures and pay dividends.
Previous wording
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.
Current wording
The weighted average interest rate under the 2024 Credit Agreement, adjusted for the impact of interest rate swap agreements, is 4.8% at both June 30, 2026 and December 31, 2025. Interest rates primarily consist of Term SOFR for borrowings in U.S. dollars and EURIBOR for borrowings in euros.
Previous wording
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.
Current wording
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 $0.9 million of borrowings outstanding under the overdraft facility at June 30, 2026.
Previous wording
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.
Current wording
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 $299.9 million and $514.8 million of receivables during the three and six months ended 2026, respectively and $257.6 million and $442.1 million for the comparable periods in 2025. Receivables presented at financial institutions and not yet collected as of June 30, 2026 were approximately $14.7 million and remained in our accounts receivable balance as of that date. All receivables sold were reflected as a reduction of accounts receivable on the consolidated balance sheet at the time of sale. We recorded expense of $13.7 million and $23.0 million related to the sale of receivables which was included in selling, general and administrative expenses in our consolidated statements of operations for the three and six months ended June 30, 2026, respectively, and $12.3 million and $21.6 million for the comparable periods in 2025.
Previous wording
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.
Current wording
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 six months ended June 30, 2026 and 2025. As of June 30, 2026, there was approximately $19.6 million available for future stock purchases under the program.
Previous wording
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).
Current wording
Material cash commitments as of June 30, 2026 consist of required cash payments to service our outstanding borrowings of $573.5 million under our 2024 Credit Agreement, the future minimum cash requirements of $129.3 million through 2034 under operating leases, and expected future cash payments relating to our restructuring activities of $0.9 million with approximately $0.6 million to be paid in the remainder of 2026. All of our other known cash commitments as of June 30, 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).
Previous wording
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.
Current wording
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. 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.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The gross margin percentage benefit from IEEPA tariff refunds at our Engineered Solutions operating segment was more than offset by unfavorable capitalization of costs in prior periods that carried over into 2026, as well as inflationary pressures in the second quarter of 2026 when compared to the same period in 2025 despite higher sales.
Current report — wording carried from elsewhere
The following table summarizes consolidated net sales by segment and by major product group within each segment for the six months ended June 30, 2026 and 2025 (in thousands):
Current report — wording carried from elsewhere
Interest Expense. Interest expense was $15.1 million in the six months ended June 30, 2026, compared to $16.1 million in the six months ended June 30, 2025. The year-over-year decrease in interest expense primarily reflects the the impact of lower average interest rates, partly offset by slightly higher average outstanding borrowings in the first six months of 2026 when compared to the same period in 2025.
Current report — wording carried from elsewhere
Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the six months ended June 30, 2026 and 2025 were $2.6 million and $2.2 million, respectively, reflecting 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.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•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,
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.