STONERIDGE INC
For the period ended Mar 31, 2026. Filed May 15, 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.
Mar 31, 2026 · Filed May 15, 2026
SRI$4.99+4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001043337-25-000125
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001043337-26-000052
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 126 previous paragraphs and 98 current paragraphs.
37 unchanged; 35 reworded; 25 added; 48 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 6 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 (25)
Current report
On December 31, 2025, we conducted our business in three reportable business segments, which were the same as our three operating segments: Control Devices, Electronics and Stoneridge Brazil. In January 2026, we completed the sale of the Control Devices segment, which is reflected as discontinued operations in all periods presented. As a result, we now operate our business in two reportable business segments, which are the same as our two operating segments.
Current report
First Quarter Overview
Current report
Our Electronics segment net sales increased by 7.5% compared to the first quarter of 2025 primarily due to favorable euro and Swedish krona foreign currency translation, higher MirrorEye system sales and higher sales of $3.8 million resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices. These increases were offset by a decrease in product sales to the European and North American commercial vehicle markets including lower sales for the Smart 2 tachograph product. Segment gross margin decreased compared to the first quarterof 2025 from higher direct material costs as a percentage of sales from unfavorable sales mix and higher direct labor costs slightly offset by lower overhead spending including tariff recoveries and lower business realignment costs. Operating income for the segment decreased compared to the first quarter of 2025 because of lower gross profit and higher SG&A expense from higher wages and business realignment costs offset by lower D&D from higher customer reimbursements.
Current report
In the first quarter of 2026, SG&A expenses increased by $6.7 million compared to the first quarter of 2025 driven primarily because of higher share-based compensation from retirement related accelerated vesting, Brazilian indirect taxes and higher legal expenses.
Current report
Stoneridge's remaining portfolio, after the sale of the Control Devices business, will be focused on technology solutions primarily for the global commercial vehicle and off-highway end markets. More specifically, Stoneridge will serve three primary product categories: vision and safety, connectivity, and vehicle intelligence and electronic controls, each with their own significant growth opportunities. We expect continued expansion of our vision and safety systems, including MirrorEye® and adjacent products and advanced technologies, through maturity of our existing products and the introduction of new products to the market, including our connected trailer and surround-view capabilities. As we continue to invest in these capabilities, we have generated a comprehensive technology roadmap that we expect will both enhance and expand on our existing products and bring new products and technologies to the market. We expect this will drive growth that significantly outpaces our weighted-average end markets resulting in shareholder value creation.
Current report
Our financial performance has been affected by increasing costs of materials, labor, and other inputs used to manufacture and sell our products, including higher costs for memory and other semiconductor components. To minimize the impact of these incremental costs, we continue to take mitigation actions, including negotiating price increases and cost recoveries with our customers, improving manufacturing performance and optimizing our global cost structure to both reduce costs and improve operational efficiency. While we expect these actions will contribute to improved financial performance by offsetting cost pressures, there can be no assurance that our mitigation efforts will fully offset the impact of these cost increases.
Current report
In February 2026, the U.S. government imposed new tariffs on imported products from China and Mexico, in addition to tariffs imposed during 2025, and in April 2026 announced additional broad-based tariffs on imports from most U.S. trading partners. The Company has manufacturing and supply chain exposure from materials sourced from other countries and products produced in Mexico. If existing or proposed tariffs are sustained or expanded, they could materially increase our cost of goods sold and adversely affect our results of operations and cash flows. We continue to implement mitigation actions to reduce the impact of tariffs, including negotiating cost recoveries and price adjustments with our customers, evaluating alternative sourcing arrangements and assessing opportunities to adjust our manufacturing footprint. However, there can be no assurance that these actions will fully offset the incremental costs, and the ultimate impact will depend on the scope and duration of the tariffs and our ability to pass costs through to customers.
Current report
Based on IHS Markit production forecasts, in 2026 the European and North American commercial vehicle end market volumes are forecasted to increase 1.2% and 3.4%, respectively. Over the long-term, we expect our Electronics’ segment sales to continue to outperform forecasted changes in production volumes due to strong demand for our existing products including our OEM MirrorEye programs in North America and Europe as well as from launches of awarded business. In addition, over the long-term we expect revenue growth and margin contribution from our off-highway products. We continue to focus on margin improvement through material cost reduction and product quality initiatives. We continue to invest in the development of advanced system capabilities that are complementary to our driver information solutions and vision systems such as integrated driver assistance technologies and an intelligent connected trailer system.
Current report
In April 2026, the International Monetary Fund forecasted the Brazil gross domestic product to grow 1.9% in 2026. We expect our served market channels to remain relatively stable in 2026 based on current market and economic conditions; however our sales of in-region OEM products are expected to increase in the second half of 2026 due to the launch of an awarded infotainment product. Stoneridge Brazil will focus on continuing to grow our OEM capabilities in-region to better support our global customers. This focus will provide opportunities for future growth and provide a platform to continue to rotate our local portfolio to more closely align with our global business.
Current report
While we expect continued supply chain challenges across our end markets in 2026, we continue to focus on operating performance and enterprise-wide cost reduction. We remain focused on improving cash generation and the reduction of debt through efficient operating performance, structural cost savings and targeted actions to reduce our inventory levels.
Current report
Our Electronics segment net sales increased $10.1 million because of favorable euro and Swedish krona foreign currency translation of $12.3 million and higher sales of $3.8 million resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices. Additionally, sales increased in our North American commercial vehicle market by $0.9 million driven by higher MirrorEye system sales partially offset by lower customer production volumes. These increases were offset by lower sales volumes in our European commercial vehicle market of$7.4 million, primarily due to lower sales for the Smart 2 tachograph product resulting from the end of a retrofit campaign in 2025, and lower customer production volumes partially offset by higher MirrorEye system sales.
Current report
Our Stoneridge Brazil segment net sales increased $1.7 million from favorable foreign currency translation and higher OEM product sales.
Current report
The increase in North American net sales was due to an increase in sales resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices and higher MirrorEye system sales.
Current report
The increase in net sales in Europe and Other was due to favorable foreign currency translation of $12.3 million, higher MirrorEye system sales and an increase in volume in our European off-highway market sales of $1.9 million. These increases were offset by lower sales volumes in our European commercial vehicle market of $7.4 million, including lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025.
Current report
Selling, General and Administrative. SG&A expenses increased by $6.7 million primarily because of higher share-based compensation from retirement related accelerated vesting, Brazilian indirect taxes and legal expenses.
Current report
Our Stoneridge Brazil segment operating income increased due to favorable variances from U.S. dollar denominated purchases andhigher contribution from higher sales levels offset by higher SG&A from higher incentive compensation and Brazilian indirect taxes.
Current report
Net cash provided by investing activities increased compared to 2025 due to the proceeds from the sale of Control Devices offset by lower capital expenditures.
Current report
On January 30, 2026, as a result of the sale of the Control Devices business, the Credit Facility borrowing capacity was reduced from $225.0 million to $175.0 million.
Current report
On March 6, 2026, the Company entered into Amendment No. 3 to the Fifth Amended and Restated Credit Agreement (“Amendment No. 3”). Amendment No. 3 amends and restates the Credit Facility in its entirety beginning December 31, 2025 and ending at the Credit Facility's amended termination date of July 1, 2027. Amendment No. 3 also provides for certain covenant relief and adjustments to terms and conditions as follows:
Current report
•expiration date of the Credit Facility is extended from November 2, 2026 to July 1, 2027;
Current report
•the current minimum interest coverage ratio of 2.50 was reduced to 1.60 for the quarter ended March 31, 2026, 1.70 for the quarter ended June 30, 2026, 1.75 for the quarter ended September 30, 2026 and 2.50 for the quarter ended December 31, 2026 and thereafter;
Current report
•the maximum leverage ratio was increased to 3.75 for the quarter ended December 31, 2025, increases to 6.25 for the quarter ended March 31, 2026, 6.75 for the quarter ended June 30, 2026, 6.00 for the quarter ended September 30, 2026 and 4.00 for the quarter ended December 31, 2026 and thereafter;
Current report
•on December 31, 2026, the current borrowing capacity of $175.0 million will be reduced to the lesser of $157.5 million or the then current Credit Facility commitment;
Current report
•modifications to Consolidated EBITDA (as defined); and
Current report
•modifications and additions to affirmative covenants.
Removed paragraphs (48)
Previous report
Control Devices. This segment includes results of operations that manufacture actuators, sensors, switches and connectors.
Previous report
Third Quarter Overview
Previous report
Our Control Devices segment net sales decreased by 2.1% compared to the third quarter of 2024 as a result ofdecreases in our China and North American automotive markets, including the impact of end-of-life production for an actuator product in North America. These decreases were offset by sales increases in our North American and China commercial vehicle markets. Segment gross margin as a percentage of sales decreaseddue to unfavorable leverage of fixed costs from lower sales levels and higher overhead spending for tariffs. Segment operating income decreased due to lower gross margin partially offset by lower D&D spending.
Previous report
Our Electronics segment net sales decreased by 4.7% compared to the third quarter of 2024 primarily due to lower production volumes in our North American and European commercial vehicle markets. These decreases were offset by higher sales in our European off-highway vehicle market and a favorable impact of foreign currency translation. Segment gross margin as a percent of sales decreased compared to the prior year third quarter from lower contribution from lower sales levels, higher business realignment costs and higher overhead spending, including tariff costs and depreciation, offset by lower direct material costs as a percentage of sales due to favorable sales mix. Operating income for the segment increased compared to the third quarter of 2024 because of lower SG&A expense resulting from a royalty liability adjustment and lower D&D expense from higher customer reimbursements partially offset by lower contribution from lower sales levels.
Previous report
In the third quarter of 2025, SG&A expenses increased by $5.1 million compared to the third quarter of 2024 driven primarily by higherp rofessional services for the previously announced review of strategic alternatives related to the Control Devices segment, higher incentive compensation and higher wages offset by a royalty liability adjustment and a 2024 non-recurring commercial settlement gain.
Previous report
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 a result of executing our long-term strategy, we have received significant new OEM program awards in all of our segments in 2025.
Previous report
In April 2025, the U.S. government announced additional tariffs on various goods imported to the U.S. and other countries announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by the Company. Some of these additional tariffs have been implemented and others have been conditionally paused, and it is reasonably possible that new or additional tariffs will be periodically announced given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs as well as heightened global trade disputes.
Previous report
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 and Brazilian 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 report
In addition to tariffs, the U.S. and foreign governments have implemented sanctions, export controls and other restrictions on trade that impact industries around the world, including the automotive industry. For example, China recently implemented restrictions on the export of rare earth materials originating in China (some of which have since been paused for one year), as well as restrictions on the export of certain semiconductors and other electronic components that are used by us and throughout the automotive industry. We are monitoring the potential disruption to automotive industry supply chains as a result of these actions.
Previous report
Based on IHS Market production forecasts, the North American automotive market is expected to decrease from 15.4 million units in 2024 to 15.1 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 report
Based on the IHS Market 2025 production forecasts published in November 2025, the European and North American commercial vehicle end market volumes are forecasted to decrease 6.4% and 27.7%, respectively. In 2025 and over the long-term, we expect our Electronics’ segment sales to outperform forecasted changes in production volumes due to 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 report
In October 2025, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.4% 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. However, 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 report
While we expect continued challenges across our end markets in 2025, we will continue to focus on overall operating cost improvement and operational execution to drive contribution margin and focus on inventory reduction to improve our cash position and reduce our leverage profile.
Previous report
In the second quarter of 2025, we announced a strategic review of the Control Devices segment with the intent to sell the segment. We have incurred incremental costs with third-party advisors of $3.7 million and $4.7 million in the three and nine months ended September 30, 2025. We expect to incur additional costs as we continue to evaluate strategic alternatives.
Previous report
Our Control Devices segment net sales decreased $1.5 million because of decreases in our China and North American automotive markets of $2.1 million and $0.8 million, respectively, including the impact of end-of-life production for an actuator product in North America. These decreases were offset by increases in our North American and China commercial vehicle markets of $0.7 million and $0.3 million, respectively.
Previous report
Our Electronics segment net sales decreased $6.0 million because of lower customer production volumes in our North American and European commercial vehicle markets of $14.5 million and $2.6 million respectively. These decreases were offset by an increase in our European off-highway vehicle market of $5.3 million. Net sales in the third quarter of 2025 were favorably impacted by euro and Swedish krona foreign currency translation of $5.7 million compared to the prior year quarter.
Previous report
Our Stoneridge Brazil segment net sales increased $3.9 million from higher OEM product sales.
Previous report
The decrease in North American net sales was mostly attributable to a decrease in sales volume in our commercial vehicle market of $13.8 million.
Previous report
The increase in net sales in Europe and Other was due to increases in volumes in our European off-highway and China commercial vehicle markets of $5.3 million and $0.5 million, respectively, offset by decreases in our European commercial vehicle and China automotive markets of $2.6 million and $2.1 million, respectively. Net sales were also impacted by a favorable foreign currency translation of $5.7 million.
Previous report
Our Control Devices segment gross margin decreased because of lower contribution from lower sales levels and higher overhead costs for tariffs.
Previous report
Selling, General and Administrative. SG&A expenses increased by $5.1 million primarily because of higherp rofessional services for review of strategic alternatives, higher incentive compensation and higher wages which were partially offset by a non-recurring royalty liability adjustment and a 2024 non-recurring commercial settlement gain.
Previous report
Our Control Devices segment operating income decreased because of lower contribution from lower sales levels and higher overhead costs for tariffs offset by lower D&D spending.
Previous report
Our Stoneridge Brazil segment operating income increased due to higher contribution from higher OEM sales levels.
Previous report
For the three months ended September 30, 2024, income tax expense of $3.4 million was attributable to the mix of earnings among tax jurisdictions and tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions, offset by U.S. taxes on foreign earnings. The effective tax rate of (93.3)% varies from the statutory tax rate primarily due to the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions, offset by U.S. taxes on foreign earnings.
Previous report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Previous report
Our Control Devices segment net sales decreased $19.3 million because of decreases in our North American automotive market of $15.3 million including the impact of end-of-life production for an actuator product as well as a decrease in our China automotive market of $3.8 million.
Previous report
Our Electronics segment net sales decreased $23.8 million because of lower customer production volumes in our North American and European commercial vehicle markets of $30.4 million and $6.2 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. These decreases were partially offset by an increase in our European off-highway market of $5.6 million. Net sales in 2025 were favorably impacted by euro and Swedish krona foreign currency translation of $9.9 million compared to the prior year.
Previous report
Our Stoneridge Brazil segment net sales increased from higher OEM product sales of $12.6 million partially offset by lower original equipment services sales of $0.8 million and unfavorable foreign currency translation of $2.5 million.
Previous report
The decrease in North American net sales was mostly attributable to a decrease in customer production volumes in our commercial vehicle, automotive and off-highway markets of $28.5 million, $15.3 million and $4.1 million, respectively. The decrease in our North American automotive market was primarily caused by lower customer volumes and the impact of end-of-life production of an actuator product.
Previous report
The increase in net sales in South America was from higher OEM product sales of $12.6 million partially offset by lower OE services sales of $0.8 million and unfavorable foreign currency translation of $2.5 million.
Previous report
The increase in net sales in Europe and Otherwas due to increases in customer production volumes in our European off-highway and China commercial vehicle markets of $5.6 million and $0.5 million, respectively, offset by decreases in our European commercial vehicle and China automotive markets of $6.2 million and $3.8 million, respectively. Net sales were also impacted by a favorable foreign currency translation of $9.8 million.
Previous report
Cost of Goods Sold and Gross Margin. Cost of goods sold decreased compared to the nine months ended September 30, 2024 and our gross margin decreased to 21.0% in 2025 from 21.2% in the first nine months 2024. Our material cost as a percentage of net sales decreased from 57.3% in the first nine months of 2024 to 56.2% in the first nine 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 18.0% and 16.7% for the first nine months of 2025 and 2024, respectively. The increase in overhead as a percentage of sales was attributable to unfavorable fixed cost leverage from lower sales levels, higher tariffs and higher business realignment costs of $2.2 million.
Previous report
Our Control Devices segment gross margin decreased primarily because of lower contribution from lower sales and higher business realignment costs of $0.5 million.
Previous report
Our Electronics segment gross margin decreased because of lower contribution from lower sales and higher overhead spending, including higher tariffs and higher business realignment costs of $1.7 million.
Previous report
Our Stoneridge Brazil segment gross margin as a percent of sales decreased due to the unfavorable sales mix impact of higher OEM product sales offset by higher contribution from higher sales levels.
Previous report
Selling, General and Administrative. SG&A expenses increased by $7.3 million because of higher professional services for review of strategic alternatives, business realignment costs of $1.4 million, incentive compensation and wages which partially offset by a non-recurring royalty liability adjustment.
Previous report
Design and Development. D&D costs decreased by $2.7 million from lower spending in our Control Devices segment for wage and fringe costs. D&D spending in our Electronics segment was consistent with the prior year as lower spending on wages and fringe was offset by lower capitalized software development costs and customer reimbursements.
Previous report
Our Control Devices segment operating income decreased because of lower contribution from lower sales levels, higher business realignment costs of $0.9 million and a non-recurring commercial settlement gain recognized in 2024 offset by lower D&D spending.
Previous report
Our Electronics segment operating income decreased primarily because of lower contribution from lower sales levels and higher tariffs and higher business realignment costs of $1.7 million.
Previous report
Our Stoneridge Brazil segment operating income increased due to higher Stoneridge Brazil OEM product sales levels.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Reworded paragraphs (35)
Previous wording
We are a global supplier of safe and efficient electronics systems and technologies. Our systems and products power vehicle intelligence, while enabling safety and security for global commercial, automotive, off-highway and agricultural vehicle markets.
Current wording
We are a global supplier of safe and efficient electronics systems and technologies. Our systems and products power vehicle intelligence, while enabling safety and security for global commercial, off-highway, automotive and agricultural vehicle markets.
Previous wording
The Company had net loss of $9.4 million, or $(0.34) per diluted share, for the three months ended September 30, 2025.
Current wording
The Company had net loss from continuing operations of $14.8 million, or $(0.53) per diluted share, for the three months ended March 31, 2026.
Previous wording
Net loss for the quarter ended September 30, 2025 increased by $2.3 million, or $(0.08) per diluted share, from net loss of $7.1 million, or $(0.26) per diluted share, for the three months ended September 30, 2024. Net sales decreased by $3.6 million, or 1.7%, compared to the three months ended September 30, 2024, from lower production volumes in our North American and European commercial vehicle markets in our Electronics segment and lower production volumes in our China automotive market in our Control Devices segment. These decreases were offset by higher European off-highway sales in our Electronics segment, OEM product sales at Stoneridge Brazil and North American and China commercial vehicle sales in our Control Devices segment. Net sales were also favorably impacted by foreign exchange translation in our Electronics segment. Gross margin as a percent of sales for the quarter ended September 30, 2025 decreased to 20.3% from 20.8% for the three months ended September 30, 2024 due to generally lower contribution from lower sales mostly in our Electronics segment. SG&A expense increased because of higher professional services related to our ongoing review of strategic alternatives for Control Devices, as announced in the second quarter of 2025, which were mostly offset by lower D&D expense from higher customer reimbursements in our Electronics segment. In addition, non-operating foreign currency losses unfavorably impacted results for the quarter ending September 30, 2025.
Current wording
Net loss from continuing operations for the quarter ended March 31, 2026 increased by $6.8 million, or $(0.24) per diluted share, from net loss from continuing operations of $8.0 million, or $(0.29) per diluted share, for the three months ended March 31, 2025. Net sales increased by $11.8 million, or 7.9%, compared to the three months ended March 31, 2025, from the favorable impact of foreign currency translation, higher sales resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices, and higher MirrorEye system sales. These increases were offset by a decrease in product sales to the European and North American commercial vehicle markets including lower sales for the Smart 2 tachograph due to the end of a regulatory retrofit campaign in 2025. Gross margin for the quarter ended March 31, 2026 decreased to 21.7% from 23.6% for the three months ended March 31, 2025 due tohigher direct material costs in our Electronics segment from adverse sales mix and higher direct material labor costs. SG&A expense increased primarily due to higher share-based compensation expense from the retirement related accelerated vesting, Brazilian indirect taxes and higher legal expenses, which were offset by lower D&D expense from higher customer reimbursements in our Electronics segment. In addition, non-operating foreign currency losses unfavorably impacted results for the quarter ending March 31, 2026.
Previous wording
Our Stoneridge Brazil segment net sales increased by 29.7% compared to the third quarter of 2024 primarily from higher OEM product sales. Operating income increased due tohigher contribution from higher sales levels.
Current wording
Our Stoneridge Brazil segment net sales increased by 12.1% compared to the first quarter of 2025 primarily from favorable foreign currency translation and higher OEM product sales. Operating income increased due tofavorable variances from U.S. dollar denominated purchases and higher contribution from higher sales levels offset by higher SG&A from higher incentive compensation and Brazilian indirect taxes.
Previous wording
In the third quarter of 2025, D&D costs decreased by $3.2 million compared to the prior year third quarter from lower expense in our Electronics segment as a result of higher customer reimbursements offset by higher business realignment costs mostly in unallocated corporate.
Current wording
In the first quarter of 2026, D&D costs decreased by $2.3 million compared to the prior year first quarter in our Electronics segment as a result of higher customer reimbursements.
Previous wording
At September 30, 2025 and December 31, 2024, we had cash and cash equivalents balances primarily held at our foreign locations of $54.0 million and $71.8 million, respectively, and we had $170.2 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.
Current wording
At March 31, 2026 and December 31, 2025, we had cash and cash equivalents balances primarily held at our foreign locations of $70.5 million and $53.1 million, respectively, and we had $156.5 million and $180.9 million, respectively, in borrowings outstanding on our Credit Facility. The 2026 decrease in Credit Facility borrowings and the increase in cash and cash equivalents was mostly due to proceeds received from the sale of Control Devices.
Previous wording
In 2025, we expect net D&D spend to 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.
Current wording
In 2026, we expect net D&D spend to increase driven by spend for quality improvement and the development of next generation products. 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 and dedicated engineering partners in India to support Electronics segment projects.
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 third quarter of 2025, the U.S. Dollar weakened against the euro, Mexican peso and Swedish krona unfavorably 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 first quarter of 2026, the U.S. Dollar weakened against the Brazilian real favorably impacting our financial results while it strengthened against the Swedish krona and weakened against the Mexican peso which had an unfavorable impact to our reported results. In the first quarter of 2025, the U.S dollar strengthened against the Brazilian real unfavorably impacting our financial results while it weakened against the Swedish krona which had a favorable impact to our reported results.
Previous wording
We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. Because of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $2.1 million and$0.3 million were incurred in the three months ended September 30, 2025 and 2024, respectively. We incurred $1.0 million and $4.0 million in business realignment costs in the three andnine months ended September 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 may incur additional realignment costs in the future.
Current wording
We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. Because of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $0.4 million and$2.5 million were incurred in the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2025, we incurred $1.4 million in business realignment costs related to operational efficiency initiatives at our Juarez facility. We may incur additional realignment costs in the future.
Previous wording
Because of the competitive nature of the markets we serve, we face pricing pressures from our customers in the ordinary course of business. In response to these pricing pressures we have been able to effectively manage our production costs by the combination of lowering certain costs and limiting the increase of others, the net impact of which to date has not been material. However, if we are unable to effectively manage production costs in the future to mitigate future pricing pressures, our results of operations would be adversely affected.
Current wording
Because of the competitive nature of the markets we serve, we face pricing pressures from our customers in the ordinary course of business. In response to these pricing pressures, we have been able to manage our production costs through a combination of negotiated cost recoveries with customers, material cost reduction initiatives and optimization of our global manufacturing footprint, the net impact of which to date has not been material to our results of operations. However, these efforts may not be sufficient to fully offset future pricing pressures, particularly in light of current macroeconomic conditions, including tariffs and supply chain disruptions, and if we are unable to effectively manage production costs, our results of operations could be adversely affected.
Previous wording
The increase in net sales in South America was from higher OEM product sales of $4.4 million.
Current wording
The increase in net sales in South America was from favorable foreign currency translation and higher OEM product sales.
Previous wording
Cost of Goods Sold and Gross Margin. Cost of goods sold decreased compared to the third quarter of 2024 and our gross margin decreased to 20.3% in the third quarter of 2025 from 20.8% in the third quarter of 2024. Our material cost as a percentage of net sales decreased to 55.1% in the third quarter of 2025 from 57.2% in the third quarter of 2024. The decrease in material cost percentage was due to favorable sales mix mostly in our Electronics segment. Overhead as a percentage of net sales increased from 17.3% in the third quarter of 2024 to 19.7% in the third quarter of 2025 due to unfavorable leverage of fixed costs, higher tariffs, depreciation and business realignment costs in our Electronics and Control Devices segments.
Current wording
Cost of Goods Sold and Gross Margin. Cost of goods sold increased compared to the first quarter of 2025 and our gross margin decreased to 21.7% in the first quarter of 2026 from 23.6% in the first quarter of 2025. Our material cost as a percentage of net sales increased to 58.3% in the first quarter of 2026 from 56.2% in the first quarter of 2025. The increase in material cost percentage was due to unfavorable sales mix in our Electronics segment from lower Smart 2 tachograph sales. Overhead as a percentage of net sales decreased from 16.6% in the first quarter of 2025 to 15.2% in the first quarter of 2026 due to tariff recoveries and lower business realignment costs in our Electronics segment.
Previous wording
Our Electronics segment gross margin as a percent of sales decreased compared to the prior year third quarter from lower contribution from lower sales levels and higher overhead spending including tariff costs, depreciation and business realignment offset by lower direct material costs as a percentage of sales from favorable sales mix.
Current wording
Our Electronics segment gross margin decreased compared to the prior year first quarter from higher direct material costs as a percentage of sales from unfavorable sales mix offset by lower overhead spending including tariff recoveries and lower business realignment costs.
Previous wording
Our Stoneridge Brazil segment gross margin as a percent of sales increased from the favorable leverage of fixed costs due to higher OEM product sales levels.
Current wording
Our Stoneridge Brazil segment gross margin increased from the favorable material variances from U.S. dollar denominated purchases and favorable leverage of fixed costs from higher sales levels.
Previous wording
Design and Development. D&D costs decreased by $3.2 million compared to the third quarter of 2024 from lower expense in our Electronics segment as a result of higher customer reimbursements offset by higher business realignment costs mostly in unallocated corporate of $0.6 million.
Current wording
Design and Development. D&D costs decreased by $2.3 million compared to the first quarter of 2025 in our Electronics segment as a result of higher customer reimbursements.
Previous wording
Operating (Loss) Income. Operating (loss) income by segment is summarized in the following table (in thousands):
Current wording
Operating Loss. Operating (loss) income by segment is summarized in the following table (in thousands):
Previous wording
Our Electronics segment operating income increased because of lower D&D expense from higher customer reimbursements and lower SG&A expense from a royalty liability adjustment partially offset by lower contribution from lower sales levels.
Current wording
Our Electronics segment operating income decreased because of lower gross margin and higher SG&A expense from higher wages and business realignment costs offset by lower D&D from higher customer reimbursements.
Previous wording
Our unallocated corporate operating loss increased from higher SG&A related to higher professional services for review of strategic alternatives and higher incentive compensation as well as higher D&D related to higher business realignment costs and professional services.
Current wording
Our unallocated corporate operating loss increased from higher SG&A related to higher share-based compensation from retirement related accelerated vesting and legal fees offset by lower business realignment costs as well as D&D spending.
Previous wording
Our North American operating loss increased due to lower contribution from lower sales levels, higher SG&A for professional services and incentive compensation and D&D spending. Operating income in South America increased due to higher contribution from higher OEM sales levels. Our operating results in Europe and Other increased because of lower D&D expense from higher customer reimbursements, lower SG&A expense from a royalty liability adjustment partially offset by lower gross margin.
Current wording
Our North American operating loss increased due to higher SG&A from higher share-based compensation from retirement-related accelerated vesting and higher D&D expense offset by higher gross margin from higher sales levels and tariff recoveries. Operating income in South America increased from higher gross margin from higher sales levels offset by higher SG&A from higher incentive compensation and Brazilian indirect taxes. Our operating results in Europe and Other decreased because of lower margin from adverse sales mix and higher SG&A spending from higher business realignment costs offset by lower D&D expense from higher customer reimbursements.
Previous wording
Interest Expense, net. Interest expense, net was $3.8 million and $3.6 million for the three months ended September 30, 2025 and 2024, respectively. The increase for the quarter ended September 30, 2025, was the result of higher Credit Facility interest rates being offset by lower outstanding Credit Facility borrowings.
Current wording
Interest Expense, net. Interest expense, net was $3.7 million and $3.2 million for the three months ended March 31, 2026 and 2025, respectively. The increase for the quarter ended March 31, 2026, was the result of higher Credit Facility interest rates partially offset by lower outstanding Credit Facility borrowings.
Previous wording
Equity in Loss of Investee. Equity loss for Autotech Fund II was $0.2 million and $0.8 million for the three months ended September 30, 2025 and 2024, respectively.
Current wording
Equity in Loss (Earnings) of Investee. Equity loss (earnings) for Autotech Fund II was $0.2 million and $(0.3) million for the three months ended March 31, 2026 and 2025, respectively.
Previous 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, net of $2.4 million increased by $2.8 million compared to the third quarter of 2024 due to foreign currency transaction losses in our Electronics and Control Devices segments from the weakening of the U.S. dollar.
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, net of $0.5 million increased by $1.3 million compared to the first quarter of 2025 due to foreign currency transaction losses in our Electronics segment from the weakening of the U.S. dollar.
Previous wording
(Benefit) Provision for Income Taxes. For the three months ended September 30, 2025, income tax benefit of $0.3 million was attributable to the mix of earnings among tax jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of 3.5% varies from the statutory tax rate primarily due to tax credits and incentives offset by U.S. taxes on foreign earnings.
Current wording
Provision for Income Taxes. For the three months ended March 31, 2026, income tax expense from continuing operations of $1.4 million was attributable to the mix of earnings among tax jurisdictions, tax credits and incentives and valuation allowances in certain jurisdictions. The effective tax rate of (10.6)% varies from the statutory tax rate primarily due to tax credits and incentives and valuation allowances in certain jurisdictions.
Previous wording
Provision for Income Taxes. For the nine months ended September 30, 2025, income tax expense of $1.5 million was attributable to the mix of earnings among tax jurisdictions and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (6.0%) varies from the statutory tax rate primarily due to tax credits and incentives offset by U.S. taxes on foreign earnings.
Current wording
For the three months ended March 31, 2025, income tax expense from continuing operations 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 (24.5)% 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.
Previous wording
Cash provided by operating activities decreased compared to 2024 because of a higher net loss which was partially offset by cash provided from lower working capital levels primarily inventory and accounts payable. Cash used by receivables was unfavorable compared to 2024, however collection terms have remained consistent.
Current wording
Cash used for operating activities increased compared to 2025 because of a higher net loss and higher working capital levels primarily accounts receivable slightly offset by accounts payable. Cash used by receivables increased due to receivables resulting from manufacturing and transition service agreements related to the sale of Control Devices in the first quarter of 2026, however overall collection terms have remained consistent.
Previous wording
Net cash used for financing activities increased compared to 2024 due to an increase in Credit Facility repayments from the repatriation of $43.8 million in cash held at foreign locations, net of borrowings.
Current wording
Net cash used for financing activities increased compared to 2025 due to an increase in Credit Facility repayments from proceeds from the sale of Control Devices.
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 $170.2 million at September 30, 2025.
Current wording
As outlined in Note 7 to our condensed consolidated financial statements, the Credit Facility permitted borrowing up to a maximum level of $275.0 million. This variable rate facility had an accordion feature which allowed 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 $156.5 million at March 31, 2026.
Previous 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:
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 provided 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
On November 5, 2025, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Credit Agreement and Consent Agreement (“Amendment No. 2”). Amendment No. 2 amends the Credit Facility and provides for certain covenant relief and restrictions through the Credit Facility's termination date of November 2, 2026. Amendment No. 2 supersedes certain terms of the Credit Facility and Amendment No. 1 beginning November 5, 2025 and ending at the Credit Facility's termination date of November 2, 2026. Amendment No. 2 amends certain Credit Facility terms and provides covenant relief as follows:
Current wording
On November 5, 2025, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Credit Agreement and Consent Agreement (“Amendment No. 2”). Amendment No. 2 amended the Credit Facility and provided for certain covenant relief and restrictions through the Credit Facility's termination date of November 2, 2026. Amendment No. 2 superseded certain terms of the Credit Facility and Amendment No. 1 beginning November 5, 2025 and ending at the Credit Facility's termination date of November 2, 2026. Amendment No. 2 amended certain Credit Facility terms and provides covenant relief as follows:
Previous wording
The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20.0 million Swedish krona, or $2.1 million and $1.8 million at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025 there was 8.9 million Swedish krona, or $0.9 million outstanding on this overdraft credit line. At December 31, 2024 there were no borrowings outstanding on this overdraft credit line. During the nine months ended September 30, 2025, the subsidiary borrowed 153.8 million Swedish krona, or $16.4 million and repaid 144.9 million Swedish krona, or $15.4 million. The Stockholm subsidiary has pledged certain of its assets as collateral in order to obtain a guarantee of certain of the Stockholm subsidiary’s obligations to third parties.
Current wording
The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20.0 million Swedish krona, or $2.1 million and $2.2 million at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026 and December 31, 2025, there were no borrowings outstanding on this overdraft credit line. During the three months ended March 31, 2026, the subsidiary borrowed and repaid 21.8 million Swedish krona, or $2.6 million. The Stockholm subsidiary has pledged certain of its assets as collateral in order to obtain a guarantee of certain of the Stockholm subsidiary’s obligations to third parties.
Previous wording
In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech, a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. As of September 30, 2025, the Company’s cumulative investment in the Autotech Fund II was $9.2 million. The Company contributed $0.3 million and $0.3 million to Autotech Fund II during the nine months ended September 30, 2025 and September 30, 2024, respectively.
Current wording
In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech, a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. As of March 31, 2026, the Company’s cumulative investment in the Autotech Fund II was $9.3 million. The Company did not contribute to Autotech Fund II during the three months ended March 31, 2026 or March 31, 2025, respectively.
Previous wording
Our future results could also be adversely affected by unfavorable changes in foreign currency exchange rates. We have significant foreign denominated transaction exposure in certain locations, especially in Brazil, Argentina, Mexico, Sweden, Estonia, the Netherlands, United Kingdom and China. Currently, we have foreign currency forward contracts in place for Mexican pesos. See Note 5 to the condensed consolidated financial statements for additional details. Our future results could also be unfavorably affected by increased commodity prices and material cost inflation as these fluctuations impact the cost of our raw material purchases.
Current wording
Our future results could also be adversely affected by unfavorable changes in foreign currency exchange rates. We have significant foreign denominated transaction exposure in certain locations, especially in Brazil, Argentina, Mexico, Sweden, Estonia, the Netherlands, United Kingdom and China. Our future results could also be unfavorably affected by increased commodity prices and material cost inflation as these fluctuations impact the cost of our raw material purchases.
Previous wording
At September 30, 2025, we had a cash and cash equivalents balance of approximately $54.0 million, of which 86.7% was held in foreign locations. The Company has approximately $104.8 million of undrawn commitments under the Credit Facility as of September 30, 2025, which results in total undrawn commitments and cash balances of more than $158.8 million. However, it is possible that future borrowing flexibility under our Credit Facility may be limited as a result of our financial performance.
Current wording
At March 31, 2026, we had a cash and cash equivalents balance of approximately $70.5 million, of which 79.1% was held in foreign locations. The Company has approximately$18.5 million of undrawn commitments under the Credit Facility as of March 31, 2026, which results in total undrawn commitments and cash balances of approximately$89.1 million. However, it is possible that future borrowing flexibility under our Credit Facility may be limited as a result of our financial performance.
Previous wording
Our Control Devices and Electronics segments are moderately seasonal, impacted by mid-year and year-end shutdowns and the ramp-up of new model production at key customers. In addition, the demand for our Stoneridge Brazil segment consumer products is generally higher in the second half of the year.
Current wording
Our Electronics segment is moderately seasonal, impacted by mid-year and year-end shutdowns and the ramp-up of new model production at key customers. In addition, the demand for our Stoneridge Brazil segment consumer products is generally higher in the second half of the year.
Previous wording
The Company’s critical accounting policies, which include management’s best estimates and judgments, are included in Part II, Item 7, to the consolidated financial statements of the Company’s 2024 Form 10-K. These accounting policies are considered critical as disclosed in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis of the Company’s 2024 Form 10-K because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates. There have been no material changes in our significant accounting policies or critical accounting estimates during the third quarter of 2025.
Current wording
The Company’s critical accounting policies, which include management’s best estimates and judgments, are included in Part II, Item 7, to the consolidated financial statements of the Company’s 2025 Form 10-K. These accounting policies are considered critical as disclosed in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis of the Company’s 2025 Form 10-K because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates. There have been no material changes in our significant accounting policies or critical accounting estimates during the first quarter of 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In December 2018, the Company entered into an agreement to make a $10.0 million investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. The Company has contributed $9.3 million to the Autotech Fund II since December 2018.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Condensed consolidated statements of operations as a percentage of net sales are presented in the following table (in thousands):
Previous report — wording carried elsewhere
Net Sales. Net sales for our reportable segments, excluding inter-segment sales, are summarized in the following table (in thousands):
Previous report — wording carried elsewhere
Net sales by geographic location are summarized in the following table (in thousands):
Previous report — wording carried elsewhere
Operating (Loss) Income. Operating (loss) income by segment is summarized in the following table (in thousands):
Previous report — wording carried elsewhere
Operating (loss) income by geographic location is summarized in the following table (in thousands):
Previous report — wording carried elsewhere
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, net of $5.4 million increased by $6.0 million compared to the first nine months of 2024 due to the impact of unfavorable foreign currency movements in our Electronics and Control Devices segments from the weakening of the U.S. dollar.