STANDARD MOTOR PRODUCTS, INC.
For the period ended Sep 30, 2026. Filed Oct 30, 2026.
View on SEC.govAbout this filing
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.
Sep 30, 2026 · Filed Oct 30, 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 2026-06-30; filed 2026-08-04.
0000093389-26-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-30.
0000093389-26-000100
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 98 previous paragraphs and 96 current paragraphs.
44 unchanged; 43 reworded; 9 added; 10 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 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 (9)
Current report
•higher net sales in our Vehicle Control operating segment as sales volume increased with existing customers,
Current report
•partly offset by lower net sales in our Temperature Control operating segment.
Current report
Vehicle Control’s net sales for the three months ended September 30, 2026 increased $8.3 million, or 4.2%, to $206.0 million compared to $197.7 million in the same period of 2025. The increase in Vehicle Control’s net sales was primarily driven by higher sales volume from existing customers.
Current report
Temperature Control’s net sales for the three months ended September 30, 2026 decreased $7.2 million, or 5.0%, to $137.5 million compared to $144.7 million in the same period of 2025. Temperature Control’s net sales for the third quarter of 2026 reflect the timing of seasonal sales as compared to the third quarter of 2025. Overall full year results will partly depend on customer inventory levels and ordering patterns as the summer peak season ends.
Current report
Compared to the third quarter of 2025, gross margin percentage increased at our Vehicle Control and Nissens Automotive operating segments by 3.0 percentage points from 31.4% to 34.4%, and by 0.9 percentage points from 41.2% to 42.1%, respectively. Gross margin percentage decreased at our Temperature Control and Engineered Solutions operating segments by 3.8 percentage points from 35.9% to 32.1%, and 1.3 percentage points from 17.8% to 16.5%, respectively, compared to the third quarter of 2025.
Current report
The gross margin percentage improvement at our Vehicle Control operating segment primarily benefited from higher sales, and ongoing cost saving measures, which more than offset inflationary pressures from higher commodity prices. The gross margin percentage improvement at our Nissens Automotive operating segment was primarily driven by a favorable mix of products sold, enhanced by the expansion of product lines and customer selling synergies.
Current report
The gross margin percentage at our Temperature Control operating segment declined primarily due to the impact of unfavorable foreign exchange on costs and the timing of production volume. The decrease in the gross margin percentage at our Engineered Solutions operating segment was primarily due to inflationary pressures from rising commodity prices in the third quarter of 2026 when compared to the same period in 2025 despite higher sales.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses were$115.4 million, or 22.7%of consolidated net sales, in thethird quarter of 2026, as compared to$113.4 million, or 22.7% of consolidated net sales, in thethird quarter of 2025. The$2.0 million increase inselling, general and administrative expenses in thethird quarter of 2026 as compared to thethird quarter of 2025 is principally due to higher employee-related costs, partly offset by lower other general and administrative expenses.
Current report
Operating Income. Operating income was$135.1 million, or 9.2% of consolidated net sales, in thenine months ended September 30, 2026, compared to$114.9 million, or 8.2% of consolidated net sales, in thenine months ended September 30,
Removed paragraphs (10)
Previous 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,
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous report
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 report
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.
Previous 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.
Previous report
Nissens Automotive operating segments driven by higher gross margins, offset partly by higher selling, general and administrative expenses.
Reworded paragraphs (43)
Previous 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.
Current wording
Consolidated net sales for the three months ended September 30, 2026 were $507.8 million, an increase of $9.0 million, or 1.8%, compared to net sales of $498.8 million in the same period in 2025.
Previous wording
•increased net sales in our Nissens Automotive operating segment with the benefit of foreign exchange conversion and higher demand from existing customers, and
Current wording
•increased net sales in our Nissens Automotive operating segment with higher demand from existing customers benefiting from high summer temperatures in Europe, as well as favorable foreign exchange conversion and the expansion of product offerings,
Previous wording
Overall, full year results at our Temperature Control and Nissens Automotive operating segments will be dependent upon summer weather conditions and customer inventory levels.
Current wording
Overall, full year results at our Temperature Control and Nissens Automotive operating segments will partly depend on customer inventory levels.
Previous 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.
Current wording
Gross margins, as a percentage of net sales, increased to 32.6% in the third quarter of 2026 compared to 32.4% in the third quarter of 2025. Overall, the gross margin increase as a percentage of sales in the third quarter of 2026 primarily reflects the positive impact of higher sales volumes and cost savings initiatives, partly offset by inflationary pressures.
Previous 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.
Current wording
Operating margin as a percentage of net sales for the three months ended September 30, 2026 increased to 9.9% as compared to 9.5% for the same period in 2025. Included in our operating margin were selling, general and administrative expenses of $115.4 million, or 22.7% of net sales for the three months ended September 30, 2026 compared to $113.4 million, or 22.7% of net sales, for the same period in 2025. The$2.0 million increase inselling, general and administrative expenses in thethird quarter of 2026 as compared to thethird quarter of 2025 is principally due to higher employee-related costs, partly offset by lower other general and administrative expenses.
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 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.
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 Overview”. 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 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.
Current wording
Sales. Consolidated net sales for thethree months ended September 30, 2026 were$507.8 million, an increase of $9.0 million, or 1.8%, compared to$498.8 million in the same period of 2025, with themajority of our net sales to customers located in the United States.
Previous 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.
Current wording
Nissens Automotive's net sales for the three months ended September 30, 2026 increased $6.0 million, or 7.2%, to $90.6 million compared to $84.5 million in the same period of 2025. The increase in Nissens Automotive’s net sales primarily resulted from higher demand from existing customers benefiting from high summer temperatures in Europe, as well as favorable foreign exchange conversion and the expansion of product offerings. Overall full year results will partly depend on customer inventory levels and ordering patterns as the summer peak season ends.
Previous 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.
Current wording
Engineered Solutions’ net sales for the three months ended September 30, 2026 increased $3.5 million, or 4.9%, to $75.7 million compared to $72.2 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 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):
Current wording
Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 32.6% in the third quarter of 2026, compared to 32.4% in the third quarter of 2025. The following table summarizes gross margins by segment (in thousands):
Previous wording
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 wording
Operating Income. Operating income was$50.1 million, or 9.9% of consolidated net sales, in thethird quarter of 2026, compared to$47.6 million, or 9.5% of consolidated net sales, in thethird quarter of 2025. The year-over-year increase in operating income of$2.5 million was primarily driven byincreases in operating income at our Vehicle Control and Nissens Automotive operating segments primarily due to higher gross margins, as well as lower unallocated corporate selling, general and administrative expenses.
Previous 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.
Current wording
Other Non-Operating Income, Net. Other non-operating income, net of$1.0 million in thethird quarter of 2026, decreased incomparison to$1.7 million in thethird quarter of 2025 primarily due to the impact of lower year-over-year equity income from our unconsolidated affiliates.
Previous 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.
Current wording
Interest Expense. Interest expense was $6.3 million in the third quarter of 2026, compared to $7.4 million in the third quarter of 2025. The year-over-year decrease in interest expense primarily reflects the impact of lower average outstanding borrowings, as well as lower average interest rates in the third quarter of 2026 when compared to the third quarter of 2025.
Previous 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.
Current wording
Income Tax Provision. The income tax provision in the third quarter of 2026 was $12.0 million at an effective tax rate of 26.8% compared to $12.0 million at an effective tax rate of 28.5% 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 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.
Current wording
Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the third quarter of 2026 and 2025 of $18.5 million and $34.2 million, respectively, reflects legal and other administrative expenses associated with our asbestos-related liability. The loss from discontinued operations for the third quarter of 2026 and 2025 primarily consists of a $23.3 million and $44.4 million pre-tax provision, respectively, to increase our indemnity liability in line with the August 31, 2026 and 2025 actuarial studies. 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
Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Current wording
Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025
Previous wording
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 wording
Sales. Consolidated net sales for thenine months ended September 30, 2026 were$1,460.6 million, an increase of $54.5 million, or 3.9%, compared to$1,406.1 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.
Previous wording
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 wording
The following table summarizes consolidated net sales by segment and by major product group within each segment for the nine months ended September 30, 2026 and 2025 (in thousands):
Previous 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.
Current wording
Vehicle Control’s net sales for the nine months ended September 30, 2026 increased $11.0 million, or 1.9%, to $602.7 million compared to $591.7 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.
Previous wording
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 wording
Temperature Control’s net sales for the nine months ended September 30, 2026 increased $6.8 million, or 1.9%, to $371.7 million compared to $364.9 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 will partly depend on customer inventory levels and ordering patterns as the summer peak season ends.
Previous wording
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 wording
Nissens Automotive's net sales for the nine months ended September 30, 2026 increased $18.4 million, or 7.6%, to $259.6 million compared to $241.3 million in the same period of 2025. Nissens Automotive's net sales include the benefit from favorable foreign exchange translation and sales growth from existing and new products. We also expect to continue to benefit from revenue synergies resulting from the acquisition. Overall full year results will partly depend on customer inventory levels and ordering patterns as the summer peak season ends.
Previous wording
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 wording
Engineered Solutions’ net sales for the nine months ended September 30, 2026 increased $21.7 million, or 10.4%, to $230.1 million compared to $208.4 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.
Previous wording
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 wording
Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 32.1% in the first nine months of 2026, compared to 31.1% in the nine months ended September 30, 2025. The following table summarizes gross margins by segment for the nine months ended September 30, 2026 and 2025, respectively (in thousands):
Previous wording
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 wording
Compared to the first nine months of 2025, gross margin percentage increased at our Vehicle Control and Nissens Automotive operating segments by 1.8 percentage points from 31.3% to 33.1%, and 3.8 percentage points from 38.7% to 42.5%, respectively. The gross margin percentage at our Temperature Control and Engineered Solutions operating segments decreased by 0.3 percentage points from 33.4% to 33.1%, and by 1.9 percentage points from 17.9% to 16.0%, respectively.
Previous wording
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 wording
The gross margin percentage at our Nissens Automotive operating segment benefited from higher sales to existing customers, 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 2025 that did not recur. The inventory fair value adjustments are fully amortized.
Previous wording
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 wording
The gross margin percentage at our Vehicle Control operating segment 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 and other cost savings, partly offset by the impact of higher tariffs on imports into the United States when compared to comparable period in 2025.
Previous 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.
Current wording
Despite higher net sales, the gross margin percentage in our Engineered Solutions operating segment decreased in the first nine 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
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 wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses were$333.7 million, or 22.8%of consolidated net sales, in the first nine months of 2026, as compared to$320.8 million, or 22.8% of consolidated net sales, in the first nine months of 2025. The$13.0 million increase inselling, general and administrative expenses in the first nine months of 2026 as compared to the first nine 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.
Previous wording
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 wording
The year-over-year increase in operating income of$20.2 million is primarily driven by higher gross margin percentages at our Nissens Automotive and Vehicle Control operating segments.
Previous wording
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 wording
Other Non-Operating Income, Net. Other non-operating income (expense), net of$0.5 million in thenine months ended September 30, 2026, compared to income of$5.9 million in thenine months ended September 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.
Previous wording
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 wording
Interest Expense. Interest expense was $21.3 million in the nine months ended September 30, 2026, compared to $23.5 million in the nine months ended September 30, 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 first nine months of 2026 when compared to the same period in 2025.
Previous wording
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.
Current wording
Income Tax Provision. The income tax provision for the nine months ended September 30, 2026 was $30.9 million at an effective tax rate of 27.0% compared to $26.9 million at an effective tax rate of 27.6% 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 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.
Current wording
Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the nine months ended September 30, 2026 and 2025 was $21.1 million and $36.4 million, respectively, reflecting legal and other administrative expenses associated with our asbestos-related liability. The loss from discontinued operations during the nine months ended September 30, 2026 and 2025 primarily consists of a $23.3 million and $44.4 million pre-tax provision, respectively, to increase our indemnity liability in line with the August 31, 2026 and 2025 actuarial studies. 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
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.
Current wording
Operating Activities. During the first nine months of 2026, cash provided by operating activities was $207.2 million compared to $85.7 million in the same period of 2025.
Previous 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.
Current wording
Net earnings during the first nine months of 2026 were $62.3 million compared to $34.1 million in the same period of 2025. The $121.5 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 decrease in the inventory balance due to improvements in inventory management and 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, as compared to the same period of 2025.
Previous 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.
Current wording
Investing Activities. Cash used in investing activities was $27.0 million during the first nine months of 2026, as compared to $26.3 million in the same period of 2025. Investing activities during the nine months ended September 30, 2026 and 2025 primarily consisted of capital expenditures of $23.5 million and $29.3 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 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.
Current wording
Financing Activities. Cash used in financing activities was $148.2 million during the first nine months of 2026, as compared to $20.4 million in the same period of 2025. During the first nine months of 2026, we used cash generated from our operating activities to decrease our borrowings under our 2024 Credit Agreement by $119.5 million, and paid dividends to SMP shareholders of $22.0 million.
Previous 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.
Current wording
During the first nine months of 2025, we used cash generated from our operating activities to decrease our borrowings by $1.2 million, and paid dividends to SMP shareholders of $20.4 million.
Previous 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.
Current wording
The weighted average interest rate under the 2024 Credit Agreement, adjusted for the impact of interest rate swap agreements, is 4.5% and 4.8% at September 30, 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.
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 $0.9 million of borrowings outstanding under the overdraft facility at June 30, 2026.
Current wording
The Company has an overdraft facility that provides for borrowings of up to Polish zloty 30 million (approximately $7.8 million) if borrowings are solely in Polish zloty, or up to 85% of the Polish zloty 30 million limit (approximately $6.6 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 no borrowings outstanding under the overdraft facility at September 30, 2026.
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Previous report — wording carried elsewhere
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.