STONERIDGE INC

Previous wording

The Company had net loss of $7.2 million, or $(0.26) per diluted share, for the three months ended March 31, 2025.

Current wording

The Company had net loss of $9.4 million, or $(0.34) per diluted share, for the three months ended June 30, 2025.

Previous wording

Net loss for the quarter ended March 31, 2025 increased by $1.1 million, or $(0.04) per diluted share, from net loss of $6.1 million, or $(0.22) per diluted share, for the three months ended March 31, 2024. Net sales decreased by $21.3 million, or 8.9%, compared to the three months ended March 31, 2024, primarily from lower volumes in our North American and European commercial vehicle markets for our Electronics segment and lower volumes in our North American automotive market including the expected end-of-life production for an actuator product for our Control Devices segment offset by higher OEM product sales at Stoneridge Brazil. Gross margin as a percent of sales for the quarter ended March 31, 2025 increased to 21.2% from 20.2% for the three months ended March 31, 2024 driven by lower material costs including favorable foreign exchange related variances offset by lower contribution from lower sales and business realignment costs incurred for operational efficiency initiatives at our Juarez facility. In addition, non-operating foreign currency gains and equity earnings favorably impacted results for the quarter ending March 31, 2025.

Current wording

Net loss for the quarter ended June 30, 2025 increased by $12.1 million, or $(0.44) per diluted share, from net income of $2.8 million, or $0.10 per diluted share, for the three months ended June 30, 2024. Net sales decreased by $9.1 million, or 3.8%, compared to the three months ended June 30, 2024, from lower volumes in our North American automotive market, including the expected end-of-life production for an actuator product for our Control Devices segment, and lower volumes in our North American commercial vehicle and European off-highway markets for our Electronics segment. These decreases were offset by higher OEM product sales at Stoneridge Brazil and favorable foreign exchange translation in our Electronics segment. Gross margin as a percent of sales for the quarter ended June 30, 2025 decreased to 21.5% from 22.7% for the three months ended June 30, 2024 due to the sales mix impact of higher expected Stoneridge Brazil OEM sales and lower contribution from lower sales. In addition, non-operating foreign currency losses unfavorably impacted results for the quarter ending June 30, 2025.

Previous wording

Our Control Devices segment net sales decreased by 10.8% compared to the first quarter of 2024 primarily as a result ofdecreases in our North American automotive market, including the expected end-of-life production for an actuator product, as well as decreases in our off-highway and China commercial vehicle markets. These decreases were offset by sales increases in our China automotive and North American commercial vehicle markets. Segment gross margin as a percentage of sales decreaseddue to lower contribution from lower sales levels offset by lower warranty and premium freight costs. Segment operating income decreased due to lower contribution from lower sales partially offset by lower D&D spending.

Current wording

Our Control Devices segment net sales decreased by 11.9% compared to the second quarter of 2024 as a result ofdecreases in our North American automotive market, including the expected end-of-life production for an actuator product, as well as decreases in our China commercial vehicle market. These decreases were offset by sales increases in our China automotive market. Segment gross margin as a percentage of sales increaseddue to lower overhead costs including warranty and depreciation. Segment operating income decreased due to lower contribution from lower sales and a 2024 non-recurring commercial settlement gain partially offset by lower D&D spending.

Previous wording

Our Electronics segment net sales decreased by 10.0% compared to the first quarter of 2024 primarily due to lower sales volumes in our North American and European commercial vehicle markets, partially mitigated by the on-going ramp-up of a recently launched European MirrorEye OEM program and higher sales of our next generation tachograph. We also experienced lower sales volume in our North American off-highway vehicle market and an unfavorable impact of foreign currency translation which were offset by higher sales in European off-highway market. Segment gross margin as a percent of sales increased compared to the prior year first quarter from lower material costs including favorable foreign exchange related variances, which were partially offset by lower contribution from lower sales and higher business realignment costs incurred for operational efficiency initiatives at our Juarez facility. Operating income for the segment decreased compared to the first quarter of 2024 because of lower gross profit and higher D&D expense as customer reimbursements declined more than spending driven by reduced launch activities.

Current wording

Our Electronics segment net sales decreased by 1.9% compared to the second quarter of 2024 primarily due to lower sales volumes in our North American commercial vehicle market. We also experienced lower sales volumes in our European and North American off-highway vehicle markets. These decreases were offset by higher sales in our European commercial vehicle market, partially due to the on-going ramp-up of a recently launched European MirrorEye® OEM program, and a favorable impact of foreign currency translation. Segment gross margin as a percent of sales decreased compared to the prior year second quarter from lower contribution from lower sales and higher material cost from adverse mix and overhead spending. Operating income for the segment decreased compared to the second quarter of 2024 because of lower gross profit and higher D&D expense from lower customer reimbursements as a result of reduced launch activities.

Previous wording

Our Stoneridge Brazil segment net sales increased by 16.8% compared to the first quarter of 2024 primarily from higher OEM product sales offset by unfavorable foreign currency translation and lower original equipment services ("OES") channel sales. Operating income increased due tohigher contribution from higher sales levels partially offset by the adverse impact of U.S. dollar denominated material purchases.

Current wording

Our Stoneridge Brazil segment net sales increased by 27.6% compared to the second quarter of 2024 primarily from higher OEM product sales offset by unfavorable foreign currency translation. Operating income increased due tohigher contribution from higher sales levels.

Previous wording

In the first quarter of 2025, SG&A expenses increased by $1.3 million compared to the first quarter of 2024 driven primarily by higher business realignment costs and professional services being offset by lower incentive compensation.

Current wording

In the second quarter of 2025, SG&A expenses increased by $1.0 million compared to the second quarter of 2024 driven primarily by higherp rofessional services for review of strategic alternatives and a 2024 non-recurring commercial settlement gain being offset by lower incentive compensation.

Previous wording

In the first quarter of 2025, D&D costs increased by $0.2 million compared to the prior year first quarter from higher expense in our Electronics segment as customer reimbursements declined more than spending driven by reduced launch activities offset by lower D&D spending in our Control Devices segment.

Current wording

In the second quarter of 2025, D&D costs increased by $0.2 million compared to the prior year second quarter from higher expense in our Electronics segment as a result of lower customer reimbursements driven by reduced launch activities offset by lower D&D spending in our Control Devices segment.

Previous wording

At March 31, 2025 and December 31, 2024, we had cash and cash equivalents balances primarily held at our foreign locations of $79.1 million and $71.8 million, respectively, and we had $203.2 million and $201.6 million, respectively, in borrowings outstanding on our Credit Facility. The 2025 increase in cash and cash equivalents was mostly due to cash generated from operating activities including lower working capital levels.

Current wording

At June 30, 2025 and December 31, 2024, we had cash and cash equivalents balances primarily held at our foreign locations of $49.8 million and $71.8 million, respectively, and we had $164.4 million and $201.6 million, respectively, in borrowings outstanding on our Credit Facility. The 2025 decrease in cash and cash equivalents was mostly caused by repayments of Credit Facility borrowings from the repatriation of cash and cash equivalents at foreign locations.

Previous wording

The Company believes that focusing on products that address industry megatrends has had and will continue to have a positive effect on both our top-line growth and financial performance. Expanding on our existing products and technology platforms with advanced capabilities, applications and data services is core to our long-term strategy. For example, we continue to develop safety, vehicle intelligence and connectivity based products, such as our OEM MirrorEye® programs in North America and Europe as well as our next generation tachograph in Europe.

Current wording

The Company believes that focusing on products that address industry megatrends has had and will continue to have a positive effect on both our top-line growth and financial performance. Expanding on our existing product portfolio and technology platforms with advanced capabilities, applications and data services is core to our long-term strategy. We are continuing to develop safety, vehicle intelligence and connectivity based products, such as our OEM MirrorEye® programs in North America and Europe as well as our next generation tachograph in Europe. As a result of executing our long-term strategy, we have received significant new OEM program awards in both our Electronics and Stoneridge Brazil businesses in the second quarter of 2025.

Previous wording

Our business model of manufacturing by regions for the regions limits the global impact of certain trade restrictions and tariffs. Our primary tariff exposure relates to our Mexico operations that sell products into the U.S., most of which are exempt under the provisions of the United States-Mexico-Canada Agreement. Further, the majority of our supply components are not subject to the additional tariffs or are compliant with exceptions. We are taking and will continue to take actions to mitigate any direct and indirect impacts of new or additional tariffs including directly or indirectly passing the additional costs through to our customers. However, these matters are changing rapidly and there is significant uncertainty as to how long and to what degree that Stoneridge and the global transportation industry will be impacted by these new or additional tariffs, the adverse global trade environment and the resulting economic uncertainty.

Current wording

Our business model of manufacturing by regions for the regions limits the global impact of certain trade restrictions and tariffs. Our primary tariff exposure relates to our Mexico operations that sell products into the U.S., most of which are exempt under the provisions of the United States-Mexico-Canada Agreement. Further, the majority of our supply components are not subject to the additional tariffs or are compliant with exceptions. We are taking and will continue to take actions to mitigate any direct and indirect impacts of new or additional tariffs, including directly or indirectly passing the additional costs through to our customers. However, these matters are changing rapidly and there is significant uncertainty as to how long and to what degree that the Company and the global transportation industry will be impacted by these new or additional tariffs, the adverse global trade environment and the resulting economic uncertainty.

Previous wording

Based on IHS Market production forecasts, the North American automotive market is expected to decrease from 15.5 million units in 2024 to 14.0 million units in 2025. In our Control Devices segment, we remain focused on drivetrain agnostic technologies to drive new business awards as the market continues to evolve. However, we expect lower sales in 2025 related to the impact of end-of-life production for an actuator product. We expect continued volatility in our end markets as uncertainty remains related to the market’s response to tariff policies. We continue to focus on operational excellence and enterprise-wide cost reduction, including material cost reduction plans, to continue to drive margin improvement going-forward.

Current wording

Based on IHS Market production forecasts, the North American automotive market is expected to decrease from 15.5 million units in 2024 to 14.9 million units in 2025. In our Control Devices segment, we remain focused on drivetrain agnostic technologies to drive new business awards as the market continues to evolve. However, we expect lower sales in 2025 related to both lower automotive market production levels and the impact of lower end-of-life production for an actuator product. We expect continued volatility in our end markets as uncertainty remains related to the market’s response to tariff policies. We continue to focus on operational excellence and enterprise-wide cost reduction, including material cost reduction plans, to continue to drive margin improvement going-forward.

Previous wording

Based on IHS Market production forecasts published in February 2025, in 2025 the European and North American commercial vehicle end market volumes are forecasted to increase 3.9% and decrease 3.3%, respectively. In 2025 and over the long-term, we expect our Electronics’ segment sales to outperform forecasted changes in production volumes due to strong demand for our existing products and the impact of ongoing launches of our OEM MirrorEye programs in North America and Europe as well as higher sales of our next generation tachograph in Europe. We expect continued growth in MirrorEye as we launch and ramp up new and existing OEM programs in both North America and Europe, and MirrorEye systems becomes standard on key truck platforms for existing OEM programs.

Current wording

Based on the IHS Market 2025 production forecasts published in August 2025, the European and North American commercial vehicle end market volumes are forecasted to increase 2.9% and decrease 17.6%, respectively. In 2025 and over the long-term, we expect our Electronics’ segment sales to outperform forecasted changes in production volumes due to strong demand for our next generation tachograph in Europe and the impact of ongoing launches of our OEM MirrorEye programs in North America and Europe. We expect continued growth in MirrorEye as we launch and ramp up new and existing OEM programs in both North America and Europe, and MirrorEye systems becomes standard on key truck platforms for existing OEM programs.

Previous wording

In 2025, we expect net D&D spend to slightly decrease driven by a shift to spending for the development of next generation products, opposed to new product launch related spend. As a result of reduced launch activities, we expect lower customer reimbursements and capitalization of software development costs. We continue to evaluate and optimize our engineering footprint to enhance capabilities and capacity for the most efficient return on our engineering spend, including utilizing our Stoneridge Brazil engineering resources to support Electronics segment projects.

Current wording

In 2025, we expect net D&D spend to slightly decrease driven by a shift to spending for the development of next generation products, opposed to product launch related spend. As a result of reduced launch activities, we expect lower customer reimbursements and capitalization of software development costs. We continue to evaluate and optimize our engineering footprint to enhance capabilities and capacity for the most efficient return on our engineering spend, including increasing the utilization of our Stoneridge Brazil engineering resources to support Electronics segment projects.

Previous wording

In January 2025, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.2% in 2025, a decline from forecasted growth of 3.0% in 2024. We expect our served market channels to remain relatively stable in 2025 based on current market and economic conditions. Stoneridge Brazil continues to focus on growing our OEM capabilities in-region to better support our global customers. We expect this strategy will provide opportunities for future growth and a platform to continue to rotate our local portfolio to more closely align with our global products. In addition, we continue to align our global engineering capabilities and footprint by expanding our Brazilian engineering center.

Current wording

In April 2025, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.0% in 2025, a decline from forecasted growth of 3.0% in 2024. We expect our served market channels to remain relatively stable in 2025 based on current market and economic conditions. In addition, we expect Stoneridge Brazil's OEM channel sales to continue to grow significantly based on the ramp-up of existing programs and new awards. As we continue to align our global engineering capabilities and footprint, we expect to further expand our Brazilian engineering center.

Previous wording

A significant portion of our sales are outside of the United States. These sales are generated by our non-U.S. based operations, and therefore, movements in foreign currency exchange rates can have a significant effect on our results of operations, which are presented in U.S. dollars. A significant portion of our raw materials purchased by our Electronics and Stoneridge Brazil segments are denominated in U.S. dollars, and therefore movements in foreign currency exchange rates can also have a significant effect on our results of operations. In the first quarter of 2025, the U.S. Dollar strengthened against the Brazilian real, unfavorably impacting our reported results, while it weakened against the Swedish krona, favorably impacting our reported results.

Current wording

A significant portion of our sales are outside of the United States. These sales are generated by our non-U.S. based operations, and therefore, movements in foreign currency exchange rates can have a significant effect on our results of operations, which are presented in U.S. dollars. A significant portion of our raw materials purchased by our Electronics and Stoneridge Brazil segments are denominated in U.S. dollars, and therefore movements in foreign currency exchange rates can also have a significant effect on our results of operations. In the second quarter of 2025, the U.S. Dollar weakened against the Swedish krona unfavorably impacting our reported results.

Previous wording

We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto in order to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. As a consequence of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $2.8 million and$0.0 million were incurred in the three months ended March 31, 2025 and 2024, respectively. We incurred $1.4 million in business realignment costs in the three months ended March 31, 2025 related to operational efficiency initiatives at our Juarez facility, which we expect will result in cost savings for direct and indirect labor and a more efficient overall operating structure. We expect to incur additional realignment costs related to this initiative and others in the remainder of 2025.

Current wording

We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto in order to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. As a consequence of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $1.7 million and$1.9 million were incurred in the three months ended June 30, 2025 and 2024, respectively. We incurred $1.4 million and $3.0 million in business realignment costs in the three and six months ended June 30, 2025, respectively, related to operational efficiency initiatives at our Juarez facility, which we expect will result in cost savings for direct and indirect labor and a more efficient overall operating structure. We expect to incur additional realignment costs related to this initiative and others in the remainder of 2025.

Previous wording

Our Stoneridge Brazil segment net sales increased $2.1 million from higher OEM product sales partially offset by unfavorable foreign currency translation of $1.8 million and lower OES channel sales of $0.3 million.

Current wording

Our Stoneridge Brazil segment net sales increased $3.2 million from higher OEM product sales partially offset by unfavorable foreign currency translation of $0.9 million.

Previous wording

The decrease in North American net sales was mostly attributable to a decrease in sales volume in our commercial vehicle, automotive and off-highway markets of $7.5 million, $5.0 million and $4.0 million, respectively. The decrease in our North American automotive market was primarily caused by lower customer volumes and the expected end-of-life production of an actuator product.

Current wording

The decrease in North American net sales was mostly attributable to a decrease in sales volume in our automotive, commercial vehicle and off-highway markets of $8.9 million, $7.2 million and $0.3 million, respectively. The decrease in our North American automotive market was primarily caused by lower customer volumes and the expected end-of-life production of an actuator product.

Previous wording

The increase in net sales in South America was from higher OEM product sales of $4.2 million partially offset by unfavorable foreign currency translation of $1.8 million and lower OES channel sales of $0.3 million.

Current wording

The increase in net sales in South America was from higher OEM product sales of $4.1 million partially offset by unfavorable foreign currency translation of $0.9 million.

Previous wording

The decrease in net sales in Europe and Other was due to decreases in customer production volumes in our European and China commercial vehicle markets of $5.5 million and $1.7 million, respectively, offset by an increase in our European off-highway and China automotive markets of $2.5 million and $1.0 million, respectively. Net sales were also impacted by an unfavorable foreign currency translation of $2.8 million.

Current wording

The increase in net sales in Europe and Other was due to increases in volumes in our European commercial vehicle and China automotive markets of $1.9 million and $1.6 million, respectively, offset by decreases in our European off-highway and China commercial vehicle markets of $2.2 million and $2.1 million, respectively. Net sales were also impacted by a favorable foreign currency translation of $7.0 million.

Previous wording

Our Control Devices segment gross margin decreased primarily because of lower contribution from lower sales.

Current wording

Our Control Devices segment gross margin increased despite lower sales levels because of lower overhead costs including warranty and depreciation.

Previous wording

Design and Development. D&D costs decreased by $0.2 million compared to the first quarter of 2024 from higher expense in our Electronics segment as customer reimbursements declined more than spending driven by reduced launch activities offset by lower D&D spending in our Control Devices segment.

Current wording

Design and Development. D&D costs increased by $0.2 million compared to the second quarter of 2024 from higher expense in our Electronics segment as a result of lower customer reimbursements driven by reduced launch activities offset by lower D&D spending in our Control Devices segment.

Previous wording

Our Control Devices segment operating income decreased because of lower contribution from lower sales levels offset by lower D&D spending.

Current wording

Our Control Devices segment operating income decreased because of lower contribution from lower sales levels and a 2024 non-recurring commercial settlement gain offset by lower D&D spending.

Previous wording

Interest Expense, net. Interest expense, net was $3.2 million and $3.6 million for the three months ended March 31, 2025 and 2024, respectively. The decrease for the quarter ended March 31, 2025, was the result of lower interest rates on our Credit Facility outstanding balances.

Current wording

Interest Expense, net. Interest expense, net was $3.1 million and $3.8 million for the three months ended June 30, 2025 and 2024, respectively. The decrease for the quarter ended June 30, 2025, was the result of lower Credit Facility interest rates.

Previous wording

Other (Income) Expense, net. We record certain foreign currency transaction (gains) losses as a component of other income, net on the condensed consolidated statement of operations. Other income, net of $0.5 million increased by $2.5 million compared to the first quarter of 2024 due to foreign currency transaction gains in our Electronics segment.

Current wording

Other Expense (Income), net. We record certain foreign currency transaction (gains) losses as a component of other expense (income), net on the condensed consolidated statement of operations. Other expense (income), net of $3.4 million increased by $5.7 million compared to the second quarter of 2024 due to foreign currency transaction losses in our Electronics and Control Devices segments from the weakening of the U.S. dollar.

Previous wording

Provision for Income Taxes. For the three months ended March 31, 2025, income tax expense of $1.6 million was attributable to the mix of earnings among tax jurisdictions, the impact of valuation allowances in certain jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (27.8)% varies from the statutory tax rate primarily due to the impact of valuation allowances in certain jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings.

Current wording

Provision (Benefit) for Income Taxes. For the three months ended June 30, 2025, income tax expense of $0.2 million was attributable to the mix of earnings among tax jurisdictions, foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (2.7)% varies from the statutory tax rate primarily due to foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings.

Previous wording

Our Control Devices segment net sales decreased $8.3 million because of decreases in our North American automotive market of $5.0 million including the impact of expected end-of-life production for an actuator product as well as decreases in our off-highway and China commercial vehicle markets of $2.2 million and $1.5 million, respectively. These decreases were partially offset by volume increases in our China automotive and North American commercial vehicle markets of $1.0 million $0.4 million, respectively.

Current wording

Our Control Devices segment net sales decreased $17.8 million because of decreases in our North American automotive market of $13.9 million including the impact of expected end-of-life production for an actuator product as well as decreases in our China commercial vehicle and off-highway markets of $4.0 million and $1.8 million, respectively. These decreases were partially offset by volume increases in our China automotive market of $2.8 million.

Previous wording

Our Electronics segment net sales decreased $15.0 million because of lower customer production volumes in our North American and European commercial vehicle markets of $7.9 million and $5.5 million, respectively, partially mitigated by higher MirrorEye sales, including the ramp-up of a recently launched European OEM program and higher aftermarket sales forour next generation tachograph. We also experienced lower sales volumes in our North American off-highway vehicle market of $1.7 million. These decreases were offset by an increase in our European off-highway market of $2.5 million. Net sales in the first quarter of 2025 were unfavorably impacted by euro and Swedish krona foreign currency translation of $2.7 million compared to the prior year quarter.

Current wording

Our Electronics segment net sales decreased $17.8 million because of lower customer production volumes in our North American and European commercial vehicle markets of $15.9 million and $3.6 million, respectively, partially mitigated by higher MirrorEye sales, including the ramp-up of a recently launched European OEM program and higher aftermarket sales forour next generation tachograph. We also experienced lower sales volumes in our North American off-highway vehicle market of $2.4 million. Net sales in 2025 were favorably impacted by euro and Swedish krona foreign currency translation of $4.3 million compared to the prior year.

Previous wording

Cost of Goods Sold and Gross Margin. Cost of goods sold decreased compared to the first quarter of 2024 and our gross margin increased to 21.2% in the first quarter of 2025 from 20.2% in the first quarter of 2024. Our material cost as a percentage of net sales decreased to 56.3% in the first quarter of 2025 from 58.9% in the first quarter of 2024. The decrease in material cost percentage was due to lower material costs including favorable foreign exchange related variances. Overhead as a percentage of net sales was 17.8% and 16.2% for the first quarter of 2025 and 2024, respectively. The increase in overhead as a percentage of sales was attributable to lower sales as overhead spending was consistent with the prior year quarter.

Current wording

Cost of Goods Sold and Gross Margin. Cost of goods sold decreased compared to the six months ended June 30, 2024 and our gross margin remained consistent at 21.4% in the first six months of 2025 and 2024. Our material cost as a percentage of net sales decreased from 57.4% in the first six months of 2024 to 56.7% in the first six months of 2025. The decrease in material cost percentage was due tolower material costs from favorable foreign exchange related variances. Overhead as a percentage of net sales was 17.3% and 16.5% for the first six months of 2025 and 2024, respectively. The increase in overhead as a percentage of sales was attributable to lower sales as overhead spending slightly declined from lower warranty and depreciation compared with the prior year.

Previous wording

Our Stoneridge Brazil segment gross margin decreased primarily because of the unfavorable sales mix and the adverse impact of U.S. dollar denominated material purchases offset by higher contribution from higher sales levels.

Current wording

Our Stoneridge Brazil segment gross margin as a percent of sales decreased due to the sales mix impact of higher expected OEM sales offset by higher contribution from higher sales levels.

Previous wording

Selling, General and Administrative. SG&A expenses increased by $1.3 million primarily because of higher business realignment costs and professional services being offset by lower incentive compensation.

Current wording

Selling, General and Administrative. SG&A expenses increased by $2.2 million because of higher business realignment costs, professional services for review of strategic alternatives and a 2024 non-recurring commercial settlement gain being offset by lower incentive compensation.

Previous wording

Our unallocated corporate operating loss increased from higher SG&A related to business realignment costs.

Current wording

Our unallocated corporate operating loss increased slightly due to higher SG&A related to higher professional services and business realignment costs offset by lower incentive compensation as well as lower D&D spending.

Previous wording

Our North American operating loss increased due to lower contribution from lower sales levels and higher business realignment costs. Operating income in South America increased due to higher contribution from higher sales levels offset by unfavorable sales mix and the adverse impact of U.S. dollar denominated material purchases. Our operating results in Europe and Other increased because of lower material costs including favorable foreign exchange related variances which were partially offset by lower contribution from lower sales levels and higher D&D spending resulting from lower customer reimbursements.

Current wording

Our North American operating loss increased due to lower contribution from lower sales levels and higher business realignment costs offsetting lower D&D spending. Operating income in South America increased due to higher Stoneridge Brazil OEM sales levels. Our operating results in Europe and Other decreased because of lower contribution from lower sales levels and higher D&D spending as a result of lower customer reimbursements offset by lower material costs including favorable foreign exchange related variances.

Previous wording

Equity in (Earnings) Loss of Investee. Equity (earnings) loss for Autotech Fund II was $(0.3) million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Equity in (Earnings) Loss of Investee. Equity (earnings) loss for Autotech Fund II was $(0.3) million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

For the three months ended March 31, 2024, income tax expense of $0.5 million was attributable to the mix of earnings among tax jurisdictions and U.S. taxes on foreign earnings offset by the impact of valuation allowances in certain jurisdictions and tax credits and incentives. The effective tax rate of (9.1)% varies from the statutory tax rate primarily due to U.S. taxes on foreign earnings offset by the impact of valuation allowances in certain jurisdictions and tax credits and incentives.

Current wording

For the six months ended June 30, 2024, income tax benefit of $0.4 million was attributable to the mix of earnings among tax jurisdictions and U.S. taxes on foreign earnings offset by tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions and tax credits and incentives. The effective tax rate of 11.3% varies from the statutory tax rate primarily due to U.S. taxes on foreign earnings offset by the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions and tax credits and incentives.

Previous wording

Cash provided by operating activities slightly increased compared to 2024 primarily due to cash provided from working capital levels. Cash used by receivables was unfavorable compared to 2024, however collection terms have remained consistent.

Current wording

Cash provided by operating activities increased compared to 2024 primarily due to cash provided from working capital levels primarily inventory and accounts payable offset by higher net loss. Cash used by receivables was unfavorable compared to 2024, however collection terms have remained consistent.

Previous wording

Net cash used for investing activities increased compared to 2024 due to higher capital expenditures including costs to modernize our Juarez facility offset by lower capitalized software development costs.

Current wording

Net cash used for investing activities decreased compared to 2024 due to lower capital expenditures and capitalized software development costs.

Previous wording

As outlined in Note 7 to our condensed consolidated financial statements, the Credit Facility permits borrowing up to a maximum level of $275.0 million. This variable rate facility has an accordion feature which allows the Company to increase its availability by up to $150.0 million upon the satisfaction of certain conditions and lender consent through its expiration in November 2026. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio. The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends. The Credit Facility had an outstanding balance of $203.2 million at March 31, 2025.

Current wording

As outlined in Note 7 to our condensed consolidated financial statements, the Credit Facility permits borrowing up to a maximum level of $275.0 million. This variable rate facility has an accordion feature which allows the Company to increase its availability by up to $150.0 million upon the satisfaction of certain conditions and lender consent through its expiration in November 2026. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio. The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends. The Credit Facility had an outstanding balance of $164.4 million at June 30, 2025.

Previous wording

On February 26, 2025, the Company entered into Amendment No. 1 to the Fifth Amended and Restated Credit Agreement

Current wording

On February 26, 2025, the Company entered into Amendment No. 1 to the Fifth Amended and Restated Credit Agreement and Waiver (“Amendment No. 1”). Amendment No. 1 provides for certain covenant relief and restrictions during the “Covenant Relief Period” (the period ending on the date that the Company delivers a compliance certificate for the quarter ending December 31, 2025). During the Covenant Relief Period:

Previous wording

•the maximum leverage ratio of 3.50 was increased to 6.00 for the quarter ended March 31, 2025, 5.50 for the

Current wording

•the maximum leverage ratio of 3.50 was increased to 6.00 for the quarter ended March 31, 2025, 5.50 for the quarter ended June 30, 2025, 4.50 for the quarter ended September 30, 2025 and 3.50 for the quarter ended December 31, 2025;