What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-28 · 499 added, 593 removed, 925 unchanged (54% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm

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Notes to Consolidated Financial Statements

MANAGEMENT’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

To the Stockholders of

Standard Motor Products, Inc.

and Subsidiaries:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act).

Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations.

Because of these inherent limitations, internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and presentation, and may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 .

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control - Integrated Framework.

Based on our assessment using those criteria, we concluded that, as of December 31, 2024 , our internal control over financial reporting is effective.

As permitted by SEC guidance, the scope of management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 excluded AX V Nissens III ApS (now known as SMP Nissens III ApS) and its direct and indirect subsidiaries (“Nissens Automotive”), which we acquired in November 2024.

Nissens Automotive's total assets and net sales represented approximately 27% and 2%, respectively, of the consolidated total assets and net sales of Standard Motor Products, Inc.

as of and for the year ended December 31, 2024.

We are currently in the process of evaluating and integrating the acquired operations, processes and internal controls.

Our independent registered public accounting firm, KPMG LLP, has audited our consolidated financial statements as of and for the year ended December 31, 2024 and has also audited the effectiveness of our internal control over financial reporting as of December 31, 2024 .

KPMG’s report appears on the following pages of this “Item 8.

Financial Statements and Supplementary Data.”

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on Internal Control Over Financial Reporting

We have audited Standard Motor Products, Inc and Subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission .

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Nissens Automotive during 2024, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, Nissens Automotive’s internal control over financial reporting associated with 27% of total assets and 2% of total revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2024.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Nissens Automotive.

We have audited Standard Motor Products, Inc.

and Subsidiaries (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weakness, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statement of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 26, 2026 expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness related to ineffective IT general controls, arising from the unavailability of information to track and monitor administrative user activity has been identified and included in management’s assessment.

The material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

Basis for Opinion

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2026 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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We identified the assessment of the asbestos liability recorded as a critical audit matter.

This required subjective auditor judgment, due to the nature of the estimate and assumptions, including the applicability of those assumptions to

the current facts and circumstances, as well as judgments about future events and uncertainties.

This required subjective auditor judgment, due to the nature of the estimate and assumptions, including the applicability of those assumptions to the current

facts and circumstances, as well as judgments about future events and uncertainties.

Specialized skills were needed to evaluate the Company’s key assumptions.

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We involved an actuarial professional with specialized skills and knowledge, who assisted in evaluating (1) the future claim filings assumption by developing an independent expectation and comparing it against the Company’s future claim filing assumption, and (2) the closed with pay ratios, closed with pay lag patterns, settlement values, and large claims by comparing them to the Company’s historical experience.

Fair value of a tradename and customer relationships intangible assets acquired in the Nissens Automotive transaction

As discussed in Notes 1 and 2 to the consolidated financial statements, on November 1, 2024, the Company acquired all issued and outstanding shares of European automotive aftermarket parts supplier, AX V Nissens III ApS (now known as SMP Nissens III ApS) and its direct and indirect subsidiaries (Nissens Automotive), which was accounted for as a business combination.

The purchase price was €366.8 million (approximately $397.1 million), of which, a preliminary estimated fair value of $76.7 million and $150.4 million was allocated to tradenames and customer relationships intangible assets, respectively.

The fair value measurements of the tradename and customer relationships intangible assets was determined using the multi-period excess earnings method and the relief-from-royalty method under the income approach for customer relationships and trade names, respectively.

We identified the evaluation of the acquisition-date preliminary fair values of the acquired tradename and the customer relationships intangible assets as a critical audit matter.

A high degree of subjective auditor judgement was required to evaluate the revenue growth rates, expected customer attrition rate, and the discount rate applied.

Changes in these assumptions could have a significant effect on the fair values.

Additionally, the evaluation of the discount rate and the attrition rate required specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process.

This included controls related to the determination of the revenue growth rates, expected customer attrition rate, and discount rate used in the Company’s model.

We evaluated the revenue growth rates by comparing to Nissens Automotive’s historical financial results and forecasted revenue trends of certain peer companies and relevant industry data.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s discount rate by comparing it to an independently developed range of discount rates using publicly available market data for comparable entities

• evaluating the customer attrition rate by comparing it to attrition rates implied from the useful lives sourced from benchmarking similar transactions in the Company’s industry

We have served as the Company’s auditor since 2010.

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Selling, general and administrative expenses 420,659 335,104 293,583

Restructuring and integration expenses 7,668 2,642 1,891

Restructuring expenses 2,580 7,668 2,642

Other income, net 338 75 76

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CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 2024 2023

(In thousands, except share and per share data) 2025 2024

CURRENT ASSETS:

Cash and cash equivalents $ 44,426 $ 32,526

Cash $ 72,031 $ 44,426

Accounts receivable, less allowances for discounts and expected credit losses of $ 10,043 and $ 5,472 in 2025 and 2024, respectively

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Noncurrent operating lease liabilities 93,381 98,214

Other accrued liabilities 29,593 25,742

Accrued asbestos liabilities 112,625 84,568

Other accrued liabilities 30,932 29,593

Total liabilities 1,296,979 1,184,044

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Stockholders’ equity:

Common Stock - par value $ 2.00 per share:

Authorized 30,000,000 shares, issued 23,936,036 shares

Common Stock - par value $ 2.00 per share (Authorized 30,000,000 shares;

issued 23,936,036 shares)

47,872 47,872

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Amortization of deferred financing cost 1,216 1,911 491

Increase (decrease) to allowance for expected credit losses 732 2,943 ( 757 )

Increase to allowance for expected credit losses 4,642 732 2,943

Increase to inventory reserves 9,850 4,155 3,068

Customer bankruptcy charge — — 7,002

Equity income from joint ventures ( 3,556 ) ( 4,274 ) ( 2,070 )

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Increase in tax valuation allowance 2,420 770 674

Other non-cash items 1,987 — —

Loss on discontinued operations, net of tax 37,698 26,128 28,996

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(Increase) decrease in prepaid expenses and other current assets 6,655 856 ( 70 )

Increase (decrease) in accounts payable 8,166 19,645 ( 48,604 )

Increase in accounts payable 14,601 8,166 19,645

Increase (decrease) in sundry payables and accrued expenses ( 6,110 ) 24,170 ( 4,284 )

Net changes in other assets and liabilities 2,018 908 ( 8,578 )

Net cash provided by (used in) operating activities

76,693 144,260 ( 27,533 )

Net cash provided by operating activities 57,440 76,693 144,260

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions of and investments in businesses ( 372,491 ) ( 3,954 ) ( 1,934 )

Cash acquired in acquisitions — 6,779 —

Acquisitions of businesses, net of cash acquired — ( 372,491 ) —

Step acquisition of affiliate — — ( 3,954 )

Cash acquired in step acquisition — — 6,779

Capital expenditures ( 38,724 ) ( 44,018 ) ( 28,633 )

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Net cash provided by (used in) financing activities ( 269 ) 349,547 ( 109,611 )

349,547 ( 109,611 ) 55,500

Effect of exchange rate changes on cash 6,098 4,343 2,427

Net increase (decrease) in cash and cash equivalents 11,900 11,376 ( 605 )

Net increase in cash and cash equivalents 27,605 11,900 11,376

CASH AND CASH EQUIVALENTS at beginning of year 44,426 32,526 21,150

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Supplemental disclosure of cash flow information:

Cash paid during the year for:

Interest $ 14,044 $ 14,597 $ 9,892

Income taxes $ 19,841 $ 16,019 $ 25,015

Cash paid during the year for interest $ 32,728 $ 14,044 $ 14,597

See accompanying notes to consolidated financial statements.

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Balance at December 31, 2022 $ 47,872 $ 105,615 $ 564,242 $ ( 12,470 ) $ ( 95,239 ) $ 610,020 $ 11,018 $ 621,038

Noncontrolling interest in step acquisition — — — — — — 5,273 5,273

Net earnings — — 34,148 — — 34,148 204 34,352

Other comprehensive loss, net of tax — — — ( 4,301 ) — ( 4,301 ) ( 113 ) ( 4,414 )

Other comprehensive income, net of tax — — — 6,496 — 6,496 14 6,510

Cash dividends paid — — ( 25,164 ) — — ( 25,164 ) — ( 25,164 )

Purchase of treasury stock — — — — ( 29,656 ) ( 29,656 ) — ( 29,656 )

Dividends paid to noncontrolling interest — — — — — — ( 700 ) ( 700 )

Stock-based compensation — ( 3,880 ) — — 10,478 6,598 — 6,598

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Balance at December 31, 2023 47,872 101,751 573,226 ( 5,974 ) ( 81,811 ) 635,064 15,809 650,873

Noncontrolling interest in step acquisition — — — — — — 5,273 5,273

Net earnings — — 27,500 — — 27,500 976 28,476

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Cash dividends paid — — ( 25,341 ) — — ( 25,341 ) — ( 25,341 )

Purchase of treasury stock — — — — ( 10,428 ) ( 10,428 ) — ( 10,428 )

Dividends paid to noncontrolling interest — — — — — — ( 2,347 ) ( 2,347 )

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Net earnings — — 41,335 — — 41,335 873 42,208

Other comprehensive loss, net of tax — — — ( 19,858 ) — ( 19,858 ) ( 101 ) ( 19,959 )

Other comprehensive income, net of tax — — — 43,689 — 43,689 138 43,827

Cash dividends paid — — ( 27,272 ) — — ( 27,272 ) — ( 27,272 )

Purchase of treasury stock — — — — ( 10,428 ) ( 10,428 ) — ( 10,428 )

Dividends paid to noncontrolling interest — — — — — — ( 785 ) ( 785 )

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See accompanying notes to consolidated financial statements.

STANDARD MOTOR PRODUCTS, INC.

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

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and its subsidiaries (referred to hereinafter in these notes to the consolidated financial statements as “we,” “us,” “our,” “SMP,” or the “Company”) is a leading manufacturer and distributor of premium replacement parts in the automotive aftermarket, and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets.

Our automotive aftermarket is comprised of three segments, Vehicle Control, Temperature Control and Nissens Automotive, while our Engineered Solutions segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.

Our business is organized in four reportable segments (also referred to as operating segments), comprising of three reportable segments, Vehicle Control, Temperature Control and Nissens Automotive, that sell products in the automotive aftermarket, while our fourth reportable segment, Engineered Solutions offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.

We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin American countries.

In addition to our legacy SMP business, we acquired European automotive aftermarket parts supplier AX V Nissens III ApS (now known as SMP Nissens III ApS) and its direct and indirect subsidiaries (“Nissens Automotive”) in a transaction which closed on November 1, 2024.

Nissens Automotive develops, manufactures and markets products within the areas of engine cooling, air conditioning climate systems, and engine efficiency within the automotive aftermarket industry, primarily in Europe.

Nissens Automotive will serve as our fourth business segment.

For further information and disclosures regarding the Nissens Automotive acquisition, refer to Note 2, "Business Combinations."

These consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S.

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We can give no assurance that actual results will not differ from those estimates.

Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.

Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, tariffs, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.

Some of the more significant estimates include allowances for expected credit losses, cash discounts, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, product liability exposures, asbestos, environmental and litigation matters, valuation of deferred tax assets, share based compensation and sales returns and other allowances.

Reportable Segments

Our business comprises of four operating segments – Vehicle Control, Temperature Control and Engineered Solutions from our legacy SMP business and a fourth operating segment, Nissens Automotive, which was created in the fourth quarter of 2024 as a result of our acquisition of Nissens Automotive.

Our operating segment structure aligns our operations with our strategic focus on diversifying our business, provides greater transparency into our positioning to capture

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

opportunities for growth in the future, and provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2025 and 2024 were uninsured.

Foreign cash balances at December 31, 2025 and 2024 were $ 70.1 million and $ 42.5 million , respectively.

Allowance for Expected Credit Losses and Cash Discounts

We do not generally require collateral for our trade accounts receivable.

Accounts receivable have been reduced by an allowance for amounts that may become uncollectible in the future.

These allowances are established based on a combination of write-off history, supportable forecasts, aging analysis, and specific account evaluations.

When a receivable balance is known to be uncollectible, it is written off against the allowance for expected credit losses.

These allowances are established based on a combination of write-off history, supportable forecasts of future economic conditions, aging analysis, and specific account evaluations.

When a receivable balance is known to be uncollectible, it is

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

written off against the allowance for expected credit losses.

Cash discounts are provided based on an overall average experience rate applied to qualifying accounts receivable balances.

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The historical volatility of such estimates has been minimal.

We maintain provisions for inventory reserves of $ 43.7 million and $ 42.9 million as of December 31, 2024 and 2023, respectively.

We utilize cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps.

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We regularly study trends of such claims.

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost and are depreciated using the straight-line method of depreciation over the estimated useful lives as follows:

Estimated Life

Buildings 25 to 33-1/2 years

Building improvements 10 to 25 years

Machinery and equipment 5 to 12 years

Tools, dies and auxiliary equipment 3 to 8 years

Furniture and fixtures 3 to 12 years

Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease.

Costs related to maintenance and repairs which do not prolong the assets useful lives are expensed as incurred.

We assess our property, plant and equipment to be held and used for impairment when indicators are present that the carrying value may not be recoverable.

We determine if an arrangement is a lease at inception.

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At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, and patents, developed technology and intellectual property.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible assets acquired through business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date.

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and (iv) the discount rate.

Identifiable intangible assets with finite lives are amortized over their useful lives generally on a straight-line basis.

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.

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Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment.

Intangible assets determined to have definite lives are amortized over their remaining useful lives.

Intangible assets determined to have definite lives are amortized over their remaining useful lives generally on a straight-line basis.

We believe that the fair value of acquired identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Acquisition related costs, including advisory, legal, accounting, valuation and pre-close and other costs, are typically expensed in the periods in which the costs are incurred and are recorded in selling, general and administrative expenses within the statement of operations.

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In the event our planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our business, financial condition and results of operations.

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Foreign Currency Translation

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Revenue Recognition

We derive our revenue primarily from vehicle aftermarket sales in our Vehicle Control, Temperature Control and Nissens Automotive segments, and non-aftermarket sales in our Engineered Solutions Segment.

We derive our revenue primarily from automotive aftermarket sales in our Vehicle Control, Temperature Control and Nissens Automotive segments, and non-aftermarket sales in our Engineered Solutions Segment.

We recognize revenues when our performance obligation has been satisfied and the control of products has been transferred to a customer which typically occurs upon shipment.

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The amount of consideration we receive and revenue we recognize depends on the marketing incentives, product warranty and overstock returns we offer to our customers.

For certain of our sales of remanufactured products, we also charge our customers a deposit for the return of a used core component which we can use

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

in our future remanufacturing activities.

For certain of our sales of remanufactured products, we also charge our customers a deposit for the return of a used core component which we can use in our future remanufacturing activities.

Such deposit is not recognized as revenue at the time of the sale but rather carried as a core liability.

At the same time, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.

The liability is extinguished when a core is actually returned to us, or at period end when we estimate and recognize revenue for the core deposits not expected to be returned.

At the same time, we estimate the core components expected to be returned from the customer and record the estimated return as unreturned customer inventory.

The liability is extinguished when a core component is actually returned to us, or at period end when we estimate and recognize revenue for the core deposits not expected to be returned.

We estimate and record provisions for cash discounts, quantity rebates, sales returns and warranties in the period the sale is recorded, based upon our prior experience and current trends.

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We regularly study trends of such claims.

New Customer Acquisition Costs

New customer acquisition costs refer to arrangements pursuant to which we incur change-over costs to induce a new customer to switch from a competitor’s brand.

In addition, change-over costs include the costs related to removing the new customer’s inventory and replacing it with our inventory commonly referred to as a stock lift.

New customer acquisition costs are recorded as a reduction to revenue when incurred.

Selling, General and Administration Expenses

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The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable.

In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the level of valuation allowance which could materially impact our business, financial condition and results of operations.

In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

assumptions, we may need to modify the level of valuation allowance which could materially impact our business, financial condition and results of operations.

Tax benefits are recognized for an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority.

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Such adjustments are recognized entirely in the period in which they are identified.

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Asbestos Litigation

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Although we are directly affected by developments in the vehicle parts industry, management does not believe significant credit risk exists.

With respect to accounts receivable, such receivables are primarily from warehouse distributors and major retailers in the automotive aftermarket industry located in the U.S.

We perform ongoing credit evaluations of our customers’ financial conditions.

A significant portion of our net sales are concentrated from our three largest individual customers.

The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them, could have a materially adverse impact on our business, financial condition and results of operations.

For further information on net sales to our three largest customers and our concentration our customer risk, see Note 21, “Industry Segment and Geographic Data.”

STANDARD MOTOR PRODUCTS, INC.

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Foreign Cash Balances

Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2024 and 2023 were uninsured.

Foreign cash balances at December 31, 2024 and 2023 were $ 42.5 million and $ 30.5 million , respectively.

Derivative Instruments and Hedging Activities

We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings.

Derivative financial instruments are recorded at fair value in other current and long-term assets, and other current and long-term liabilities in the consolidated balance sheets.

For derivative financial instruments that have been formally designated as cash flow hedges, provided that the hedging instrument is highly effective, the entire change in the fair value of the derivative will be deferred and recorded in accumulated other comprehensive income (“AOCI”) in the consolidated balance sheets.

When the underlying hedged transaction is realized (i.e., when the interest payments on the underlying borrowing are recognized in the consolidated statements of operations), the gain/loss included in AOCI is recorded in earnings and reflected on the same line as the gain/loss on the hedged item attributable to the hedged risk (i.e., interest expense for cash flow hedges of interest rate risk).

At the inception of each transaction, we formally document the hedge relationship, including the identification of the hedge instrument, the related hedged items, the effectiveness of the hedge, as well as its risk management objectives and strategies.

With respect to accounts receivable, such receivables are primarily from warehouse distributors and major retailers in the automotive aftermarket industry located in the U.S.

We perform ongoing credit evaluations of our customers’ financial conditions and we obtain credit insurance on accounts receivable from certain customers primarily based in Europe.

In 2025, t hree customers each accounted for more than 10% of our consolidated net sales at 25.2 % , 18.6 % and 10.5 %, respectively.

Net sales from each of the customers were reported in our Vehicle Control and Temperature Control operating segments.

In addition, any consolidation among our key customers may further increase our customer concentration risk.

Recently Adopted Accounting Pronouncements

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 270):

Improvements to Income Tax Disclosures.

This accounting standards update improves transparency and decision making usefulness of income tax disclosures primarily with the expansion of the:

annual income effective tax rate reconciliation to include disclosure of (i) eight specific categories of rate reconciling items;

(ii) additional information for reconciling items that meet or exceed a quantitative threshold;

and (iii) expand the required disclosures to include reconciling percentages as well as reported amounts;

annual disclosures of income taxes paid to include the disaggregation by federal, state and foreign jurisdictions.

The ASU is effective for annual reporting periods beginning after December 15, 2024, and as such we have expanded our disclosures in Note 19, "Income Taxes" of the notes to our consolidated financial statements with full retrospective application to all prior periods presented.

Segment Reporting

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280):

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Standards that are not yet adopted as of December 31, 2025

ASU 2023-09, Income Taxes (Topic 270):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 270):

Improvements to Income Tax Disclosures.

This accounting standards update will improve transparency and decision making usefulness of income tax disclosures.

ASU 2023-09 will expand the annual required income effective tax rate reconciliation disclosures to include disclosure of (i) eight specific categories of rate reconciling items;

(ii) additional information for reconciling items that meet or exceed a quantitative threshold;

and (iii) expand the required disclosures to include reconciling percentages as well as reported

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Additionally, ASU 2023-09 will expand required interim and annual disclosures of income taxes paid to include the disaggregation by federal, state and foreign jurisdictions, with expanded disclosures required annually.

The ASU is effective for annual reporting periods beginning after December 15, 2024, which for us is January 1, 2025, with full retrospective application required to all prior periods presented.

Early adoption is permitted.

We are currently evaluating the full impact of adopting ASU 2023-09 on our consolidated financial statements, disclosures, processes and controls.

We will adopt the guidance when it becomes effective.

ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

This accounting standards update seeks to provide investors and users of the financial statements with clearer information regarding companies' cost structures by disaggregating expense line items in the income statement.

ASU 2024-03 requires the following disclosures, in tabular format in the notes to the financial statements for public business entities, at each interim and annual reporting period:

(a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, (e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities that are already included in each relevant expense caption.

The ASU defines a relevant expense caption as an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e).

Furthermore, the ASU requires the disclosure table to include (i) certain amounts that are already required to be disclosed

GAAP in the same disclosure as the other disaggregation requirements, (ii) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (iii) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, which for us is January 1, 2027 and January 1, 2028, respectively.

ASU 2024-03 requires tabular disclosure in the notes to the financial statements, at each interim and annual reporting period, of certain types of expenses (including purchases of inventory, employee compensation, depreciation and intangible asset amortization) that are already included in commonly presented expense captions on the income statement within continuing operations, and qualitative description of remaining amounts not separately disaggregated quantitatively.

Furthermore, the guidance requires disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, which for us is January 1, 2027 and January 1, 2028, respectively.

The requirements will be applied prospectively with the option for retrospective application.

Early adoption is permitted.

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This new standard, once adopted, will require us to disclose expenses in a more detailed and granular way than we do in these consolidated financial statements.

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We will adopt the guidance when it becomes effective.

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity

In May 2025, the FASB issued ASU 2025-03, Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (subtopic 805-10-55).

This accounting standards update seeks to improve the requirements for identifying the accounting acquirer in transactions effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity (“VIE”), enhance the comparability of financial statements and result in more closely aligned accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity.

Under the current guidance, if the legal acquiree is a VIE, the primary beneficiary of the VIE is always the accounting acquirer.

The revised guidance requires an entity to assess the factors in Topic 805, Business Combinations, to determine the accounting acquirer in an acquisition transaction primarily effected by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business.

The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods and applies prospectively to any acquisition transaction that occurs after the initial application date.

The ASU is not expected to have a material impact on the Company’s consolidated financial statements.

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

This accounting standards update removes references to software development project stages and clarifies that an entity is required to start capitalizing software costs when both of the following occur:

(1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

The update provides the following two factors to consider in determining if the second criterion has been met:

• The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, has not been resolved through coding and testing.

• The significant performance requirements (for example, functions or features) have not been identified or continue to be substantially revised.

The update specifies that the disclosures in Subtopic 360-10, Property, Plant, and Equipment—Overall , are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements.

Additionally, the amendments clarify that the intangible asset disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs.

The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods and can be applied prospectively, retrospectively or using a modified transition approach.

Early adoption is permitted as of the beginning of an annual reporting period.

We will adopt the guidance when it becomes effective.

We are currently evaluating the effects of adopting this standard and do not anticipate the impact to be material.

Hedge Accounting Improvements

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements , which introduces five targeted improvements to better align hedge accounting with the economics of entities’ risk management activities.

The update will be effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods.

Early adoption is permitted.

We do not expect this update to have a material effect on our consolidated financial statements and related disclosures.

We have reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.

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United States Tax Law

In July 2025, the President signed into law budget reconciliation bill H.R.1, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) introducing tax reform measures that included changes to tax deductions for businesses, international tax rules, and foreign tax credit limitations that become effective in 2025 and 2026.

As of enactment, these changes did not materially affect our deferred tax assets and liabilities or related valuation allowances.

The impact on our income tax expense, effective income tax rate and cash tax payments for the year ended December 31, 2025 was not material.

We will continue to evaluate the full impact of the legislation as additional guidance becomes available.

Business Combinations

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The acquisition of Nissens Automotive, a leading European supplier of thermal management and engine efficiency products for the automotive aftermarket, aligns with our strategy to become an aftermarket leader in North America and Europe across our key product categories.

Through this acquisition, we will take advantage of collaboration for growth through cross-selling

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opportunities as well as bi-directional synergies with significant savings potential.

The Nissens Automotive operating segment was created in the fourth quarter as a result of the acquisition.

As of February 27, 2025, the purchase price allocation is considered preliminary and was based upon a preliminary valuation.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of identifiable intangible assets acquired.

Through this acquisition, we will take advantage of collaboration for growth through cross-selling opportunities as well as bi-directional synergies with significant savings potential.

The acquired Nissens Automotive business is a reportable operating segment.

We determined the fair value of acquired intangible assets using the multi-period excess earnings method and the relief-from-royalty method under the income approach for customer relationships and trade names, respectively.

These methods generally forecast expected future net cash flows discretely associated with each of the identified intangible assets and adjust the forecasts to present value by applying a discount rate intended to reflect risk factors associated with the cash flows and the time value of money.

In addition to the consideration transferred to complete the transaction, we incurred closing and other acquisition related costs of $ 8 million recorded as selling, general and administrative costs within the statement of operations during the year ended December 31, 2024.

In addition to the consideration transferred to complete the transaction, we incurred closing and other acquisition related costs of $ 0.5 million and $ 8 million recorded as selling, general and administrative costs within the statement of operations during the years ended December 31, 2025 and 2024, respectively.

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The following table summarizes the allocation of the acquisition purchase consideration to the identifiable assets acquired and liabilities assumed based on their fair values (in thousands):

Total purchase consideration (a)

Total purchase consideration ⁽ᵃ⁾

Cash and cash equivalents 24,620

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Operating lease right-of-use assets 8,625

Customer relationships intangibles (c)

Other intangibles (c)

Customer relationships intangibles ⁽ᶜ⁾

Other intangibles ⁽ᶜ⁾

Other assets 407

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Net assets acquired 284,917

(a) Total purchase consideration is the cash paid of $ 397.1 million for the acquisition.

(a) Total purchase consideration consists of cash only.

(b) Goodwill is deductible for tax purposes

(c) Intangible assets comprise of capitalized computer software of $ 2.2 million and the following preliminary valuation of identifiable intangible assets (in thousands):

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Gross Carrying Amount Weighted-Average Useful Life (in Years)

Customer relationships $ 150,400 16

Trade names - Nissens & AVA 75,600 Indefinite

Trade names - Nissens and AVA 75,600 Indefinite

Trade names - Highway 1,100 15

Other intangibles $ 227,100

Unaudited Supplemental Pro Forma Financial Information

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The pro forma financial information presented below is for illustrative purposes and is not indicative of the operating results that would have been realized if the acquisition had been completed on January 1, 2023, nor is it indicative of future operating results (in thousands):

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Year Ended December 31,

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The pro forma financial information does not reflect any expected revenue or cost synergies.

Increase in Equity Investment - Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co.

In July 2023, we acquired an additional 15 % equity interest in our 65 % owned joint venture, Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co.

(“Gwo Yng”), for Chinese renminbi ("RMB") 27,378,290 (approximately $ 4 million), thereby increasing our equity interest in Gwo Yng to 80 %.

In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng.

As a result, as of the closing date of the transaction, Gwo Yng was accounted for as a business combination achieved in stages (“a step acquisition”).

Accordingly, commencing on the closing of the transaction, we reported the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

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The following table summarizes the allocation of the total step acquisition purchase consideration to the identifiable assets acquired and liabilities assumed based on their fair values (in thousands):

Total purchase consideration(a) $ 21,725

Assets acquired and liabilities assumed:

Cash and cash equivalents $ 6,779

Receivables 5,912

Inventories 5,945

Other current assets 528

Property, plant and equipment 2,924

Operating lease right-of-use assets 4,372

Intangible assets(b) 532

Goodwill 2,208

Long term investments and other assets 7,257

Current liabilities ( 6,004 )

Noncurrent operating lease liabilities ( 3,455 )

Subtotal 26,998

Fair value of acquired noncontrolling interest ( 5,273 )

Total purchase consideration allocated to net assets acquired $ 21,725

(a) Total purchase consideration is the sum of the fair value of the previously held equity investment interest in Gwo Yng of $ 17.7 million and the cash paid of $ 4 million for the acquisition of the additional 15 % equity ownership interest.

(b) Intangible assets consists of customer relationships of $ 0.4 million that will be amortized on a straight-line basis over the estimated useful life of 10 years and capitalized software of $ 0.1 million.

Goodwill of $ 2.2 million was allocated to the Temperature Control and Engineered Solutions segments in the amounts of $ 1.2 million and $ 1 million, respectively.

Restructuring and Integration Expenses

Restructuring Expenses

Separation Program

During the second quarter of 2024 we offered a voluntary retirement incentive package of severance and other benefit enhancements to eligible employees in the United States and Canada as part of our commitment to optimizing our cost structure and providing professional development opportunities to our employees.

The offer period ended on June 14, 2024.

During the third quarter of 2024, we expanded the program to include involuntary separations.

In 2024 we offered a voluntary retirement incentive package of severance and other benefit enhancements to eligible employees in the United States and Canada as part of our commitment to optimizing our cost structure and providing professional development opportunities to our employees.

Later in 2024 we expanded the program to include involuntary separations.

The voluntary offer period ended on June 14, 2024.

Costs primarily comprise of compensation expense and enhanced medical benefits, and are charged to restructuring and integration expenses in our statement of operations as a one-time termination benefit.

Voluntary retirement incentive costs were recognized when the employee accepted the offer or are being recognized over their remaining period of service based on the agreed retirement date.

Involuntary separation costs were recognized when the respective criteria were met and expenses were recorded either during the third quarter of 2024 or over the remaining service period for the affected employees.

We anticipate that the program will be substantially complete by the end of 2027.

Additional pre-tax restructuring costs related to the program are expected to be $ 0.6 million in 2025, $ 0.1 million in 2026 and an immaterial amount in 2027 for an aggregate cost of approximately $ 7.7 million.

Activity for year ended December 31, 2024 related to the separation program workforce reduction consisted of the following (in thousands):

Additional restructuring costs related to the initiative are expected to be immaterial.

The total restructuring expenses recorded to date are $ 7.7 million .

Activity related to the separation program workforce reduction consists of the following (in thousands):

Exit activity liability at December 31, 2023 $ —

Restructuring and integration costs:

Amounts provided for during 2024 (a) 7,116

Restructuring expenses:

Amounts provided for during 2024 ⁽ᵃ⁾ 7,116

Cash payments ( 2,485 )

2 unchanged sentences

Exit activity liability at December 31, 2024 $ 4,776

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Restructuring expenses:

Amounts provided for during 2025 ⁽ᵇ⁾ 586

Cash payments ( 4,796 )

Foreign currency translation 7

Exit activity liability at December 31, 2025 $ 573

(a) Consists of $ 3.8 million in our Vehicle Control segment, $ 0.8 million in our Temperature Control segment, $ 0.8 million in our Engineered Solutions segment, and $ 1.7 million of unallocated corporate expenses.

(b) Consists of $ 0.4 million in our Vehicle Control segment and $ 0.2 million in our Temperature Control segment.

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(a) Restructuring and integration expenses incurred during the year ended December 31, 2024 consist of $ 3.8 million in our Vehicle Control segment, $ 0.8 million in our Temperature Control segment, $ 0.8 million in our Engineered Solutions segment and $ 1.7 million in our Other segment.

Cost Reduction Initiative

During the fourth quarter of 2022, to further our ongoing efforts to improve operating efficiencies and reduce costs, we announced plans for a reduction in our sales force, and initiated plans to relocate certain product lines from our Independence, Kansas manufacturing facility and from our St.

In 2022, to further our ongoing efforts to improve operating efficiencies and reduce costs, we announced plans for a reduction in our sales force, and initiated plans to relocate certain product lines from our Independence, Kansas manufacturing facility and from our St.

Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico.

The cumulative restructuring expenses incurred to date for the program are $ 4.6 million.

We anticipate that the Cost Reduction Initiative will be substantially completed by the end of 2026.

In 2025, we extended the program for plans to relocate additional product lines from certain plants in the United States and Canada to our existing manufacturing facilities in Mexico.

We anticipate that the initiative will be substantially completed by the end of 2026.

Additional restructuring costs related to the initiative are expected to be immaterial.

Activity for the year ended ended December 31, 2024 related to the cost reduction initiative consisted of the following (in thousands):

The total restructuring expenses recorded to date are $ 6.6 million .

Activity related to the cost reduction initiative consists of the following (in thousands):

Exit activity liability at December 31, 2023 $ 1,729 $ — $ 1,729

Restructuring and integration costs:

Restructuring expenses:

Amounts provided for during 2024 (a)

1,973 669 2,642

Cash payments (a)

( 1,803 ) ( 577 ) ( 2,380 )

Reclassification of environmental liability — ( 92 ) ( 92 )

Cash payments ( 1,632 ) ( 389 ) ( 2,021 )

Foreign currency translation ( 28 ) — ( 28 )

Exit activity liability at December 31, 2024 $ 232 $ — $ 232

Restructuring and integration costs:

Restructuring expenses:

Amounts provided for during 2025 (b)

396 1,598 1,994

Cash payments ( 422 ) ( 1,598 ) ( 2,020 )

Foreign currency translation ( 28 ) — ( 28 )

Exit activity liability at December 31, 2025 $ 206 $ — $ 206

(a) Includes $ 0.1 million of integration expenses recognized and cash payments made for the Particulate Matter Sensor Product Line Relocation program related to the relocation of inventory and equipment in connection with the 2021 acquisitions of certain product lines.

The program was completed in 2022.

(b) Restructuring and integration expenses incurred during the year ended December 31, 2024 consist of $ 0.4 million in our Vehicle Control segment, $ 0.1 million in our Temperature Control segment and an immaterial amount in our Engineered Solutions segment.

(a) Consists of $ 0.4 million in our Vehicle Control segment, $ 0.1 million in our Temperature Control segment and an immaterial amount in our Engineered Solutions segment

(b) Consists of $ 1.9 million in our Vehicle Control segment and $ 0.1 million in our Engineered Solutions segment.

Restructuring and integration activities are included within "sundry payables and accrued expenses" and "other current liabilities" in the consolidated balance sheet.

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All receivables sold were reflected as a reduction of accounts receivable in the consolidated balance sheet at the time of sale.

A charge in the amount of $ 48.5 million , $ 46 million and $ 32 million related

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to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, respectively.

A charge in the amount of $ 45.3 million , $ 48.5 million and $ 46 million related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023, respectively.

To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays or failures in collecting trade accounts receivables.

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If the benchmark reference rate increases significantly, we may be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.

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(in thousands)

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Property, Plant and Equipment

(In thousands) 2024 2023

Land, buildings and improvements $ 68,356 $ 45,710

Machinery and equipment 186,902 177,337

Tools, dies and auxiliary equipment 78,934 73,494

Furniture and fixtures 37,400 33,212

Leasehold improvements 18,991 16,418

(In thousands) Estimated Useful Life (in years) 2025 2024

Land $ 8,433 $ 7,724

Buildings and improvements 10 to 33.5

67,702 60,632

Machinery and equipment 5 to 12

216,375 186,902

Tools, dies and auxiliary equipment 3 to 8

88,018 78,934

Furniture and fixtures 3 to 12

39,449 37,400

Leasehold improvements (a)

24,485 18,991

Construction-in-progress 44,383 51,416

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Total property, plant and equipment, net $ 188,562 $ 168,735

(a) Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease.

Costs related to maintenance and repairs which do not prolong the assets useful lives are expensed as incurred.

Property, plant and equipment are recorded at historical cost and are depreciated using the straight-line method of depreciation over the estimated useful lives.

Depreciation expense was $ 24.3 million in 2025 , $ 20.6 million in 2024 and $ 19.7 million in 2023.

We have operating and finance leases for our manufacturing facilities, warehouses, office space, automobiles, and certain equipment.

Our leases have remaining lease terms of up to ten years , some of which may include one or more five-year renewal options.

Our leases have remaining lease terms of up to nine years , some of which may include one or more five-year renewal options.

We have not included any of the renewal options in our operating lease payments, as we concluded that it is not reasonably certain that we will exercise any of these renewal options.

Leases with an initial term of twelve months or

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less are not recorded on the balance sheet.

Leases with an initial term of twelve months or less are not recorded on the balance sheet.

Operating lease expense is recognized on a straight-line basis over the lease term.

Finance leases are not material.

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The following tables provide quantitative disclosures related to our operating leases and includes all operating leases acquired from the date of the acquisition (in thousands, except where otherwise indicated):

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Total lease costs $ 31,941 $ 23,900

(a) Variable and other lease expense relate to non-lease components such as maintenance, property taxes, etc., and operating lease expense for leases with an initial term of 12 months or less which are not material.

(a) Relates to non-lease components such as maintenance, property taxes, etc., and operating lease expense for leases with an initial term of 12 months or less which are not material.

Year Ended December 31,

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$ 11,141 $ 17,873

(a) During the year ended December 31, 2024 includes $ 4.7 million of right-of-use assets related to the lease modification and extension for our manufacturing facility in Bialystok, Poland and $ 10.8 million of right-of-use assets related to the new lease agreement for our manufacturing facility in Reynosa, Mexico.

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(a) The year ended December 31, 2025 primarily includes $ 5.7 million of right-of-use assets related to the lease modification and extension for our manufacturing facility in Reynosa, Mexico and $ 2.8 million of right-of-use assets related to our new warehouse in Niopolomice, Poland.

The year ended December 31, 2024 primarily includes $ 4.7 million of right-of-use assets related to the lease modification and extension for our manufacturing facility in Bialystok, Poland and $ 10.8 million of right-of-use assets related to the new lease agreement for our manufacturing facility in Reynosa, Mexico.

Minimum Lease Payments

At December 31, 2024, we are obligated to make minimum lease payments through 2034 , under operating leases, which are as follows (in thousands):

At December 31, 2025, we are obligated to make the following minimum operating lease payments through 2034 (in thousands):

2026 $ 22,830

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Present value of lease liabilities $ 115,371

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Goodwill and Other Intangible Assets

We completed our annual impairment test of goodwill and indefinite-lived intangible assets as of December 31, 2025.

As of December 31, 2024, we qualitatively assessed whether it was more likely than not that the fair value of any of our reporting units was less than carrying value, and concluded that the quantitative impairment test would not be required, and no goodwill impairment charge was required as of December 31, 2024.

As allowed under the guidance, we elected to perform quantitative impairment tests of goodwill related to our Nissens Automotive and Engineered Solutions operating segments and our Nissens tradename of December 31, 2025.

We performed qualitative impairment assessments for goodwill related to all our other operating segments and other intangible assets and concluded that it was not more likely than not that the fair value of any of our reporting units was less than carrying value, therefore no quantitative impairment tests were required.

Based on the results of the tests, there was no goodwill impairment as of December 31, 2025.

While we concluded that we did not have a goodwill impairment charge as of December 31, 2025, and we do not believe that future impairments are probable, we will need to maintain the current ongoing performance levels at each of our reporting units in future periods to sustain their goodwill and indefinite-lived intangible assets carrying values.

In connection with our operating segment reorganization on January 1, 2023, we reassessed our reporting units and reallocated goodwill from the reporting units that existed prior to the change to the new reporting units, using a relative fair value approach similar to that used when a portion of a reporting unit is to be disposed of.

We performed goodwill impairment tests as of January 1, 2023 on both the reporting units in place prior to the change and the new reporting units, and concluded that the estimated fair values of each of the reporting units exceeded their respective carrying amounts and, therefore, no impairment charge was necessary.

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Changes in the carrying values of goodwill by reporting unit during the years ended December 31, 2025 and 2024 are as follows (in thousands):

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Solutions Nissens Automotive Total

Balance as of December 31, 2022:

Goodwill $ 129,008 $ 11,474 $ 30,093 $ — $ 170,575

Accumulated impairment losses ( 38,488 ) — — — ( 38,488 )

90,520 11,474 30,093 — 132,087

Activity in 2023

Step acquisition of Gwo Yng — 1,214 994 — 2,208

Foreign currency translation 286 42 106 — 434

Balance as of December 31, 2023:

Goodwill 129,294 12,730 31,193 — 173,217

Accumulated impairment losses ( 38,488 ) — — — ( 38,488 )

$ 90,806 $ 12,730 $ 31,193 $ — $ 134,729

Activity in 2024

Goodwill as of December 31, 2023 $ 90,806 $ 12,730 $ 31,193 $ — $ 134,729

Acquisition of Nissens Automotive — — — 112,194 112,194

Foreign currency translation ( 384 ) ( 62 ) ( 144 ) ( 4,915 ) ( 5,505 )

Balance as of December 31, 2024:

Goodwill $ 128,910 $ 12,668 $ 31,049 $ 107,279 $ 279,906

Accumulated impairment losses ( 38,488 ) — — — ( 38,488 )

$ 90,422 $ 12,668 $ 31,049 $ 107,279 $ 241,418

Goodwill as of December 31, 2024 90,422 12,668 31,049 107,279 241,418

Foreign currency translation 630 109 234 13,768 14,741

Goodwill as of December 31, 2025 $ 91,052 $ 12,777 $ 31,283 $ 121,047 $ 256,159

(a) Goodwill balance is net of accumulated impairment losses of $ 38.5 million for December 31, 2025, 2024 and 2023.

Acquired Intangible Assets

Acquired identifiable intangible assets as of December 31, 2024 and 2023 consist of (in thousands):

Acquired identifiable intangible assets consist of (in thousands):

Gross Accumulated Amortization Net Gross Accumulated Amortization Net

Customer relationships $ 323,312 $ ( 111,256 ) $ 212,056 $ 303,547 $ ( 93,117 ) $ 210,430

Patents, developed technology and intellectual property 14,123 14,123

Trademarks and trade names⁽ᵃ⁾ 91,666 ( 5,284 ) 86,382 82,220 ( 4,995 ) 77,225

Non-compete agreements 3,308 3,295

Supply agreements 800 800

Leaseholds 160 160

Total acquired intangible assets $ 404,158 $ 186,899

Less accumulated amortization(a) ( 106,304 ) ( 95,681 )

Net acquired intangible assets $ 297,854 $ 91,218

(a) Applies to all intangible assets, except for trademarks/trade names totaling $ 74.9 million , which have indefinite useful lives and, as such, are not being amortized.

Total amortization expense for acquired intangible assets was $ 10 million for the year ended December 31, 2024, $ 8.5 million for the year ended December 31, 2023, and $ 8.6 million for the year ended December 31, 2022.

The following table summarizes the amortization expense on our intangible assets and the estimated amortization expenses in future periods based on the current estimated useful lives assigned to our intangible assets (in thousands):

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Patents and developed technology 14,123 ( 4,816 ) 9,307 14,123 ( 3,924 ) 10,199

Other 4,280 ( 4,280 ) — 4,268 ( 4,268 ) —

Total $ 433,381 $ ( 125,636 ) $ 307,745 $ 404,158 $ ( 106,304 ) $ 297,854

(a) Trademarks and trade names include $ 84.2 million of indefinite lived intangible assets which are not amortized.

Total amortization expense for acquired intangible assets was $ 18.4 million, $ 10.0 million and $ 8.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $ 18.8 million in 2026, $ 18.8 million in 2027, $ 18.8 million in 2028, $ 17.5 million in 2029 and $ 149.7 million million in the aggregate for the years 2030 through 2041.

For information related to identified intangible assets acquired in the Nissens acquisition, see Note 2, “Business Acquisitions and Investments,” of the notes to our consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amortization Expense (a)

2029-2041 153,000

(a) Estimated amortization expenses based on the current estimated useful lives assigned to our intangible assets

Other Intangible Assets

Other intangible assets include computer software.

Computer software as of December 31, 2024 and 2023 totaled $ 21.4 million and $ 19.1 million , respectively.

Total accumulated computer software amortization as of December 31, 2024 and 2023 was $ 18.3 million and $ 18.0 million , respectively.

Other intangible assets include computer software of $ 23.2 million and $ 21.4 million, at December 31, 2025 and 2024, respectively, less accumulated amortization of $ 19.8 million and $ 18.3 million as of December 31, 2025 and 2024, respectively.

Computer software is amortized over its estimated useful life of 3 to 10 years.

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Investments in Unconsolidated Affiliates

(in thousands) 2024 2023

Foshan FGD SMP Automotive Compressor Co.

$ 19,994 $ 18,426

Foshan Che Yijia New Energy Technology Co., Ltd.

Orange Electronic Co.

Ltd 2,447 2,496

Total $ 24,842 $ 24,050

Investment in Foshan FGD SMP Automotive Compressor Co.

In November 2017, we formed Foshan FGD SMP Automotive Compressor Co., Ltd., a 50 / 50 joint venture with Foshan Guangdong Automotive Air Conditioning Co., Ltd.

(“FGD”), a manufacturer of automotive belt driven air conditioning compressors based in China.

We acquired our 50 % interest in the joint venture for approximately $ 12.5 million.

We determined that due to a lack of a voting majority, and other qualitative factors, we do not control the operations of the joint venture and accordingly, our investment in the joint venture is accounted for under the equity method of accounting.

During the years ended December 31, 2024 and 2023, we made purchases from the joint venture of approximately $ 60 million and $ 44.1 million, respectively.

Investment in Foshan Che Yijia New Energy Technology Co., Ltd.

In August 2019, we acquired an approximate 29 % minority interest in Foshan Che Yijia New Energy Technology Co., Ltd.

(“CYJ”), a manufacturer of automotive electric air conditioning compressors based in China, for approximately $ 5.1 million.

In October 2022, we acquired an additional 3.55 % equity interest in CYJ for RMB 1.7 million (approximately $ 242,000 ), increasing our interest to approximately 33 %.

Our minority interest in CYJ is accounted for using the equity method of accounting.

During the years ended December 31, 2024 and 2023, purchases we made from CYJ were not material.

In December 2021, Standard Motor Products (Hong Kong), Ltd., (“SMP HK”), a subsidiary of Standard Motor Products, Inc., entered into an unsecured loan agreement with CYJ.

Under the terms of the loan agreement, CYJ shall have the right to borrow from SMP HK, as lender, up to an aggregate principal amount of $ 4 million, with interest calculated on the basis of simple interest of five percent ( 5 %) per annum and a maturity date of November 30, 2023, subject to extension by SMP HK at its sole discretion.

In September 2023, the loan agreement was extended through November 30, 2025.

Outstanding borrowings under the loan agreement at December 31, 2024 were $ 4.0 million .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investment in Orange Electronic Co.

In January 2013, we acquired a 19.4 % minority interest in Orange Electronic Co., Ltd.

(“Orange”), a manufacturer of tire pressure monitoring system sensors based in Taiwan, for $ 6.3 million.

Our minority interest in Orange is accounted for using the equity method of accounting as we have the ability to exercise significant influence.

During the years ended December 31, 2024 and 2023, we made purchases from Orange of approximately $ 1.4 million and $ 3.2 million, respectively.

Investments in unconsolidated affiliates accounted for under the equ ity method were $ 26.3 million and $ 24.8 million at December 31, 2025 and 2024, respectively which includes $ 22.3 million and $ 20.0 million at December 31, 2025 and 2024, respectively, related to our 50 % owned joint venture interest in Foshan FGD SMP Automotive Compressor Co.

with our joint venture partner Foshan Guangdong Automotive Air Conditioning Co.

During the years ended December 31, 2025 and 2024, we made purchases from the joint venture of approximately $ 89.2 million a nd $ 60.0 million, respectively.

(in thousands) 2025 2024

Deferred compensation $ 27,511 $ 26,333

Long-term investments 92 7,468

Noncurrent portion of interest rate swap fair value 3,991 1,944

Noncurrent portion of interest rate swap 2,086 3,991

Deferred financing costs, net 1,233 1,702

1 unchanged sentence

Total other assets, net $ 32,040 $ 33,139

Deferred compensation consists of assets held in a nonqualified defined contribution pension plan as of December 31, 2024 and 2023, respectively.

Long term investments as of December 31, 2024 consist of certificates of deposit with original maturities in excess of twelve months.

Deferred compensation consists of assets used to manage market risk arising from our nonqualified defined contribution plan liability.

Credit Facilities and Long-Term Debt

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2024 Credit Agreement⁽ᵃ⁾

Revolver $ — $ 63,500

Term loan — 92,500

2024 Credit Agreement:

Multi-currency revolver $ 298,426 244,171

dollar term loan(a) 198,287 —

Euro term loan(a) 102,908 —

dollar term loan⁽ᵇ⁾ 188,771 198,287

Euro term loan⁽ᵇ⁾ 110,855 102,908

20,663 16,948

Total debt $ 618,715 $ 562,314

2 unchanged sentences

Total debt $ 618,715 $ 562,314

(a) Amounts are shown net of unamortized deferred financing costs of $ 2.7 million at December 31, 2024.

Term Loans and Revolving Credit Facilities

In May 2024 and July 2024, the Company amended it's then-existing Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders ("2022 Credit Agreement"), to transition from the Canadian Dollar Offered Rate (“CDOR”) to the Canadian Overnight Repo Rate Average (“CORRA”) for benchmark borrowings denominated in Canadian dollars and to provide for a new $ 125 million term loan and the use of funds available under the revolving credit facility to finance the acquisition of Nissens Automotive and related transaction costs.

For additional information on our agreement to acquire Nissens Automotive see Note 2, “Business Combinations.”

STANDARD MOTOR PRODUCTS, INC.

(a) Weighted average interest rate, adjusted for the impact of interest rate swap agreements, was 4.8 % and 5.6 % at December 31, 2025 and 2024 , respectively.

Interest rates primarily consist of Term SOFR for borrowings in U.S.

dollars and the Euro Interbank Offered Rate ("EURIBOR") for borrowings in euros.

The average daily alternative base rate swingline loan balance was $ 1.5 million and $ 0.7 million during the years ended December 31, 2025 and 2024 , respectively.

(b) Amounts are shown net of unamortized deferred financing costs of $ 1.9 million and $ 2.7 million at December 31, 2025 and 2024, respectively .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Term Loans and Revolving Credit Facilities

In May 2024 and July 2024, the Company amended it's then-existing Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders ("2022 Credit Agreement"), to transition from the Canadian Dollar Offered Rate to the Canadian Overnight Repo Rate Average for benchmark borrowings denominated in Canadian dollars and to provide for a new $ 125 million term loan and the use of funds available under the revolving credit facility to finance the acquisition of Nissens Automotive and related transaction costs.

For additional information on our agreement to acquire Nissens Automotive see Note 2, “Business Combinations.”

In September 2024, the Company refinanced its existing 2022 Credit Agreement with a new five -year Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders (“2024 Credit Agreement”).

1 unchanged sentence

(ii) a $ 10 million multi-currency revolving credit facility, available to one or more wholly-owned Danish subsidiaries of the Company ("Danish tranche");

(iii) a $ 200 million delayed draw term loan facility in U.S.

and (iv) a 100 million euros delayed draw term loan facility.

(iii) a $ 200 million term loan facility in U.S.

and (iv) a 100 million euros term loan facility.

The revolving credit facility has a $ 25 million sublimit for the issuance of letters of credit, and a $ 30 million sublimit for the borrowing of swingline loans.

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The collateral security described above also secures certain banking services obligations and interest rate swaps and currency or other hedging obligations of the Company owing to any of the then existing lenders or any affiliates thereof.

Outstanding borrowings at December 31, 2024 under the 2024 Credit Agreement were $ 545.4 million , net of deferred financing costs, consisting of current borrowings of $ 25.2 million and long-term debt of $ 520.1 million;

while outstanding borrowings at December 31, 2023, were $ 156 million, consisting of current borrowings of $ 5 million and long-term debt of $ 151 million.

Letters of credit outstanding under the Credit Agreement were $ 2.5 million and $ 2.3 million at December 31, 2024 and 2023, respectively.

At December 31, 2024, the weighted average interest rate on borrowings under the 2024 Credit Agreement was 5.6 % , primarily consisting of Term SOFR for borrowings in U.S.

dollars and EURIBOR for borrowings in euros, adjusted for the impact of the interest rate swap agreement on $ 100 million of the U.S.

dollar borrowings.

At December 31, 2023, the weighted average interest rate under our 2022 Credit Agreement was 5.0 %, under Term SOFR, adjusted for the impact of the interest rate swap agreement on $ 100 million of borrowings.

During the year ended December 31, 2024, our average daily alternative base rate loan balance was $ 0.7 million , compared to a balance of $ 0.1 million for the year ended December 31, 2023.

The 2024 Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets.

The 2024 Credit Agreement also contains customary events of default.

STANDARD MOTOR PRODUCTS, INC.

Outstanding borrowings, net of unamortized deferred financing costs, and letters of credit under the 2024 Credit Agreement consist of the following (in millions):

Current maturities of debt $ 45.3 $ 25.2

Long-term debt 552.8 520.1

Total outstanding borrowings $ 598.1 $ 545.4

Letters of credit $ 4.6 $ 2.5

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The 2024 Credit Agreement also contains customary events of default.

Polish Overdraft Facility

In November 2023, our Polish subsidiary, SMP Poland sp.

z.o.o., further amended its overdraft facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce.

The overdraft facility, as amended, provides for borrowings under the facility in euros and U.S.

Under the amended terms, the overdraft facility provides for borrowings of up to Polish zloty 30 million (approximately $ 7.3 million) if borrowings are solely in Polish zloty, or up to 85 % of the Polish zloty 30 million limit (approximately $ 6.2 million) if borrowings are in euros and/or U.S.

The overdraft facility had an original maturity date in March 2024, with automatic three-month renewals until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period.

The facility automatically renewed in December 2024 to a March 2025 maturity date.

Borrowings under the amended overdraft facility will bear interest at a rate equal to (i) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.0 % for borrowings in Polish zloty, (ii) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.0 % for borrowings in Euros, and (iii) the Mid-Point of the Fed Target Range + 1.25 % for borrowings in U.S dollars.

In 2023, our Polish subsidiary, SMP Poland sp.

z.o.o., amended its overdraft facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce to provide for borrowings of up to Polish zloty 30 million (approximately $ 8.3 million) if borrowings are solely in Polish zloty, or up to 85 % of the Polish zloty 30 million limit (approximately $ 7.1 million) if borrowings are in euros and/or U.S.

The overdraft facility automatically renews every three months until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period.

Borrowings under the amended overdraft facility bear interest at a rate equal to (i) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.0 % for borrowings in Polish zloty, (ii) the one month EURIBOR + 1.0 % for borrowings in Euros, and (iii) the Mid-Point of the Fed Target Range + 1.25 % for borrowings in U.S dollars.

Borrowings under the overdraft facility are guaranteed by Standard Motor Products, Inc., the ultimate parent company.

There were no borrowings outstanding under the overdraft facility at both December 31, 2024 and December 31, 2023.

There were $ 3.6 million borrowings outstanding under the overdraft facility at December 31, 2025 and none at December 31, 2024.

Maturities of Debt

17 unchanged sentences

In connection with the July 2024 amendment to our 2022 Credit Agreement and the 2024 Credit Agreement, we deferred financing costs of $ 5.1 million that will be amortized over the term of the borrowings, and expensed $ 1.4 million of pre-existing unamortized financing costs to interest expense in our consolidated statement of operations.

Deferred financing costs as of December 31, 2024, assuming no prepayments, are being amortized in the amounts of $ 1.2 million in 2025, $ 1.1 million in 2026, $ 1 million in 2027, $ 0.9 million in 2028, and $ 0.6 million in 2029.

STANDARD MOTOR PRODUCTS, INC.

Deferred financing costs as of December 31, 2025, assuming no prepayments, are being amortized in the amo unts of $ 1.1 million in 2026, $ 1.0 million in 2027, $ 0.9 million in 2028, and $ 0.6 million in 2029.

Letters of Credit

As of December 31, 2025 and 2024, we had outstanding letters of credit aggregating approximately $ 4.6 million and $ 2.5 million, respectively.

These letters of credit are primarily provided as security for reimbursements to insurance companies and for import bonds placed with U.S.

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1 unchanged sentence

Accumulated Other Comprehensive Income Attributable to SMP

Changes in Accumulated Other Comprehensive Income by Component (in thousands):

Accumulated other comprehensive income attributable to SMP consists of the following (in thousands):

Cash Flow Hedges ⁽ᵃ⁾ Postretirement Benefit Plans Total

Balance at December 31, 2023 $ ( 8,897 ) $ 2,899 $ 24 $ ( 5,974 )

Other comprehensive income before reclassifications 7,433 831 (a)

Amounts reclassified from accumulated other comprehensive income — ( 2,372 ) (b)

Other comprehensive income before reclassifications ( 23,385 ) ⁽ᵇ⁾ 2,893 — ( 20,492 )

Amounts reclassified from accumulated other comprehensive income — ( 2,524 ) ( 18 ) ( 2,542 )

Net other comprehensive income (loss) ( 23,385 ) 369 ( 18 ) ( 23,034 )

1 unchanged sentence

Balance at December 31, 2024 $ ( 29,769 ) $ 3,924 $ 13 $ ( 25,832 )

Other comprehensive income before reclassifications ( 23,385 ) 2,893 (a)

Amounts reclassified from accumulated other comprehensive income — ( 2,524 ) (b)

Other comprehensive income before reclassifications 38,997 ⁽ᶜ⁾ ( 4,210 ) — 34,787

Amounts reclassified from accumulated other comprehensive income — 1,506 ( 16 ) 1,490

Net other comprehensive income (loss) 38,997 ( 2,704 ) ( 16 ) 36,277

1 unchanged sentence

Balance at December 31, 2025 $ 15,931 $ 1,923 $ 3 $ 17,857

(a) Consists of the unrecognized gain relating to the change in fair value of the cash flow interest rate hedges of $ 1.4 million ($ 1.0 million, net of tax) plus cash settlement receipts of $ 2.5 million ($ 1.9 million, net of tax) in the year ended December 31, 2024;

and the unrecognized loss relating to the change in fair value of the cash flow interest rate hedge of $ 1.2 million ($ 0.9 million, net of tax) plus cash settlement receipts of $ 2.4 million ($ 1.7 million, net of tax) in the year ended December 31, 2023.

(b) Unrecognized accumulated other comprehensive income (loss) related to the cash flow interest rate hedge is reclassified to earnings and reported as part of interest expense in our consolidated statements of operations when the interest payments on the underlying borrowings are recognized.

(c) Unrecognized accumulated other comprehensive income (loss) related to our post retirement plans is reclassified to earnings and included in the computation of net periodic postretirement benefit costs, which are included in other non-operating income (expense), net in our consolidated statements of operations.

(a) Includes u nrecognized losses relating to the change in fair value of cash flow interest rate hedges of $ 2.7 million and $ 1.4 million and cash settlement receipts of $ 1.5 million ($ 1.1 million net of tax) and $ 2.5 million ($ 1.9 million, net of tax) in the years ended December 31, 2025 and 2024, respectively.

(b) Primarily reflects the depreciation of the Danish kroner and Mexican peso.

Stockholders’ Equity

In July 2022 , our Board of Directors authorized the purchase of up to $ 30 million of our common stock under a stock repurchase program.

In 2022 , our Board of Directors authorized the purchase of up to $ 30 million of our common stock under a stock repurchase program.

Stock will be purchased under the program from time to time, in the open market or through private transactions, as market conditions warrant.

To date, there have been 321,229 shares repurchased for a total cost of $ 10.4 million, all of which occurred during the first half of 2024.

As of December 2023 there had been no repurchases of our common stock under the program.

To date, there have been 321,229 shares purchased for a total cost of $ 10.4 million, all of which occurred in 2024.

There were no purchases of our common stock in 2025 .

Stock-Based Compensation Plans

Our stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders.

Our stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders.

In addition, members of our Board of Directors participate in our stock-based compensation program in connection with their service on our board.

In May 2021, our Board of Directors and Shareholders approved an amendment and restatement to the 2016 Omnibus Incentive Plan (the “Plan”).

Under the Plan, which terminates in May 2026, we are authorized to issue, among other things, shares of restricted and performance-based stock to eligible employees and restricted stock to directors of up to 2,050,000 shares;

and shares of restricted and performance-based stock to non-employee directors of up to 350,000 shares.

STANDARD MOTOR PRODUCTS, INC.

In May 2025 our Shareholders approved the Standard Motor Products, Inc.

2025 Omnibus Incentive Plan (the “Plan”) which supersedes the 2016 Omnibus Incentive Plan, as amended (the “2016 Plan”).

The Plan will terminate in May 2035, unless terminated sooner as provided for within the Plan.

The Plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based awards.

The maximum number of shares that may be issued under the Plan is 1,050,000 , subject to adjustment as provided under the Plan.

At December 31, 2025, there were 773,511 shares of common stock available for future grants.

Awards previously granted under the 2006 and 2016 Omnibus Incentive Plans remain outstanding, while shares not yet granted under these plans are not available for future issuance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

awards granted under the Plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the Plan.

The 2016 Omnibus Incentive Plan is the only remaining plan available to provide stock-based incentive compensation to our employees, directors and other eligible persons.

Awards previously granted under the 2006 Omnibus Incentive Plan remain outstanding, while shares not yet granted under the plan are not available for future issuance.

We account for our stock-based compensation plans in accordance with the provisions of FASB ASC 718, Stock Compensation , which requires that a company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

The service period is the period of time that the grantee must provide services to us before the stock-based compensation is fully vested.

We account for our stock-based compensation plans using grant-date fair value, net of estimated forfeitures, to measure the cost of employee services received in exchange for an award of equity instruments.

The grant-date fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in our consolidated statements of operations.

Forfeitures are estimated at the time of grant based on historical trends in order to estimate the amount of share-based awards that will ultimately vest.

We monitor actual forfeitures for any subsequent adjustment to forfeiture rates.

Restricted Stock and Performance Share Grants

We currently grant shares of restricted stock to eligible employees and our independent directors and performance-based stock to eligible employees.

We grant eligible employees two types of restricted stock (standard restricted shares and long-term retention restricted shares).

Standard restricted shares granted to employees become fully vested generally no earlier than three years after the date of grant.

Long-term retention restricted shares granted to selected executives vest at a 25 % rate on or within approximately two months of an executive reaching the ages of 60 and 63, and become fully vested on or within approximately two months of an executive reaching the age of 65.

Restricted shares granted to directors become fully vested upon the first anniversary of the date of grant.

Performance-based shares issued to eligible employees are subject to a three-year measuring period and the achievement of performance targets and, depending upon the achievement of such performance targets, they may become vested generally no earlier than three years after the date of grant.

Each period we evaluate the probability of achieving the applicable targets, and adjust our accrual accordingly.

Restricted shares (other than long-term retention restricted shares) and performance shares issued to certain key executives and directors are subject to a one or two year holding period upon the lapse of the vesting period.

Forfeitures on stock grants are estimated at 5 % for employees and 0 % for executives and directors based upon our evaluation of historical and expected future turnover.

The service period is the period of time that the grantee must provide services before the award vests.

The service period is generally three years for standard restricted shares and performance-based restricted shares.

Standard restricted shares granted in 2025 generally vest in equal amounts annually over three years .

Standard restricted shares granted prior to 2025 and performance-based restricted shares generally cliff vest after three years .

The service period for long-term retention restricted shares varies based on the age of the executive as the awards vest ratably at 25 % when an executive reaches the ages of 60 and 63, with the remainder vesting when an executive reaches the age of 65.

Awards to employees eligible for retirement prior to the award becoming fully vested are amortized to expense over the period up to the date the employee becomes eligible to retire and is no longer required to provide service to earn the award.

Restricted shares granted to directors cliff vest after one year .

The number of performance-based shares issued to eligible employees upon vesting at the end of a three -year measuring period is based upon the achievement of performance targets.

Each period we evaluate the probability of achieving the applicable targets, and adjust our expense accordingly.

Before a restricted share becomes fully vested or a performance share is issued, the awardees cannot transfer, pledge, hypothecate or encumber such shares.

Prior to the time a restricted share is fully vested, the awardees have all other rights of a stockholder, including the right to vote (but do not receive dividends during the vesting period).

Prior to the time a restricted share is fully vested, the awardees have all other rights of a stockholder, including the right to vote, but do not receive dividends.

Prior to the time a performance share is issued, the awardees have no rights as a stockholder.

All shares and rights are subject to forfeiture if certain employment conditions are not met.

At December 31, 2024, under the Plan, there were an aggregate of (a) 1,863,027 shares of restricted and performance-based stock grants issued, net of forfeitures, and (b) 186,973 shares of common stock available for future grants.

For the year ended December 31, 2024, 277,742 restricted and performance-based shares were granted ( 199,510 restricted shares and 78,232 performance-based shares).

In determining the grant date fair value, the stock price on the date of grant, as quoted on the New York Stock Exchange, was reduced by the present value of dividends expected to be paid on the shares issued and outstanding during the requisite service period, discounted at a risk-free interest rate.

The risk-free interest rate is based on the U.S.

Treasury rates at the date of grant with maturity dates approximately equal to the restriction or vesting period at the grant date.

In addition, a further discount for the lack of marketability reduced the fair value of grants issued to certain key executives and directors subject to the one or two year post vesting holding period.

Assumptions used in calculating the discount for the lack of marketability include an estimate of stock volatility, risk-free interest rate, and a dividend yield.

As related to restricted and performance stock shares, we recorded compensation expense of $ 5.8 million ( $ 4.3 million , net of tax), $ 6.2 million ( $ 4.8 million , net of tax) and $ 7.6 million ( $ 5.7 million , net of tax), for the years ended December 31, 2024, 2023 and 2022, respectively.

The following table shows stock-based compensation unamortized compensation expense and the weighted-average periods over which the unamortized compensation expense is expected to be recognized:

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The fair value of awards is measured at the stock market price on the date of grant, reduced by the present value of dividends expected to be paid on the shares during the requisite service period discounted at a risk-free interest rate based on U.S.

Treasury rates.

A further discount for the lack of marketability reduces the fair value of grants issued to certain key executives and directors subject to a one or two year post vesting holding period.

The following table shows stock-based compensation expense, which is primarily recorded in selling, general and administrative expenses in the consolidated statements of operations (in millions) :

Year Ended December 31,

(in millions, except years) 2024 2023 2022

Unamortized compensation expense $ 13.5 $ 13.3 $ 14.9

Expected period to be recognized for employees 3.7 years 4.1 years 4.3 years

Expected period to be recognized for directors 0.3 years 0.3 years 0.3 years

2025 2024 2023

Stock-based compensation expense $ 7.5 $ 5.8 $ 6.2

Income tax benefits related to stock-based compensation 2.1 1.5 1.4

Stock-based compensation expense, net of tax $ 5.4 $ 4.3 $ 4.8

As of December 31, 2025, there was $ 16.1 million of unrecognized stock-based compensation expense, net of estimated forfeitures that is expected to be recognized over a weighted-average period of 3.4 years for employees and 0.3 years for directors.

Our restricted and performance-based share activity was as follows for the years ended December 31, 2025 and 2024:

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Value per Share

Balance at December 31, 2022 880,829 $ 31.79

Granted 230,875 27.00

Vested ( 248,065 ) 36.30

Performance Shares Target Adjustment 29,137 36.30

Forfeited ( 11,800 ) 35.36

Aggregate Intrinsic Value

(in thousands)

Balance at December 31, 2024 929,024 $ 26.82

4 unchanged sentences

Balance at December 31, 2025 965,172 $ 28.28 $ 35,567

The weighted-average grant date fair value of restricted and performance-based shares outstanding as of December 31, 2024, 2023 and 2022 was $ 25.5 million (or $ 26.82 per share), $ 26 million (or $ 29.48 per share), and $ 28 million (or $ 31.79 per share), respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average grant date fair value of restricted shares granted during the years ended December 31, 2025, 2024 and 2023 was $ 9.0 million , $ 6.7 million , and $ 6.2 million , respectively.

The fair value of shares vested during the years ended December 31, 2025, 2024 and 2023 was $ 7.3 million, $ 6.1 million and $ 8.9 million, respectively.

Employee Benefits

Defined Contribution Plans

We maintain various defined contribution plans, which include profit sharing, and provide retirement benefits for substantially all of our employees.

Matching obligations, in connection with the plans which are funded in cash and typically contributed to the plans in March of the following year, are as follows (in thousands):

Year ended December 31,

2024 $ 10,314

Contributions to the plans, which are typically paid in cash to the plans in March of the following year, are as follows (in thousands):

Year ended December 31, U.S.

We maintain a defined contribution Supplemental Executive Retirement Plan for key employees.

2 unchanged sentences

As of December 31, 2025, we have recorded an obligation of $ 0.5 million for 2025.

We also have an Employee Stock Ownership Plan and Trust (“ESOP”) for employees who are not covered by a collective bargaining agreement.

We have an Employee Stock Ownership Plan and Trust (“ESOP”) for employees who are not covered by a collective bargaining agreement.

In connection therewith, we maintain an employee benefits trust to which we contribute shares of treasury stock.

We are authorized to instruct the trustees to distribute such shares toward the satisfaction of our future obligations under the plan.

The shares held in trust are not considered outstanding for purposes of calculating earnings per

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share until they are committed to be released.

The trustees will vote the shares in accordance with its fiduciary duties.

During 2024 , we contributed to the trust an additional 68,700 shares from our treasury and released 68,700 shares from the trust leaving 200 shares remaining in the trust as of December 31, 2024.

The shares held in trust are not considered outstanding for purposes of calculating earnings per share until they are committed to be released.

The trustees will vote the shares in accordance with their fiduciary duties.

During 2025, we contributed 87,300 shares to the trust from our treasury and released 87,300 shares from the trust leaving 200 shares remaining in the trust as of December 31, 2025.

The provision for expense in connection with the ESOP was approximately $ 2.7 million in 2025, $ 2.8 million in 2024 and $ 3.0 million in 2023.

10 unchanged sentences

As part of our risk management strategy, we occasionally use derivative instruments, including interest rate swaps, forward foreign exchange contracts and non-derivative instruments such as foreign currency denominated debt, to reduce our market risk for changes in interest rates and to manage foreign exchange rate risk.

The objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting the fair value of assets and liabilities.

The objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts and non-derivative instruments used to hedge them, thereby reducing volatility of earnings or protecting the fair value of assets and liabilities.

Derivative instruments may be designated as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation (“net investment hedges”) or they may not be designated as hedging instruments.

Derivative instruments are recognized at fair value on a gross basis in the consolidated balance sheets.

The change in fair value of the derivative instruments is recognized in the consolidated statements of operations or consolidated statements of comprehensive income depending upon the type of hedge as further discussed below.

Cash flows from derivative programs are classified with the activities that correspond to the underlying hedged items in the consolidated statements of cash flows.

Derivative instruments are recognized at fair value on a gross basis in other current and long-term assets, and other current and long-term liabilities in the consolidated balance sheets.

The change in fair value of the derivative instruments is recognized in the consolidated statements of operations or consolidated statements of comprehensive income

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depending upon the type of hedge as further discussed below.

Cash flows from derivative instruments are classified with the activities that correspond to the underlying hedged items in the consolidated statements of cash flows.

Due to the use of derivative instruments, we are exposed to the risk that our counterparties will fail to meet their contractual obligations.

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We do not offset d erivative assets against liabilities in master netting agreements and there were no receivables or payables recognized on receipt or payment of cash collateral at December 31, 2025 and 2024 .

The interest rate swa ps effectively convert a portion of our variable rate borrowings under our existing facilities to a fixed rate based upon determined notional amount.

The interest rate swa ps effectively convert a portion of our variable rate borrowings under our existing facilities to a fixed rate based upon a determined notional amount.

The forward foreign exchange contracts fix expected future cash flows in U.S.

dollar terms on certain transactions and foreign currency denominated debt is used to partially offsets the effects of foreign currency on our investments in certain foreign subsidiaries.

dollar terms on certain transactions and foreign currency denominated debt is used to partially offset the effects of changes in foreign currency exchange rates on our investments in certain foreign subsidiaries.

We do not enter into derivative instruments for trading or speculative purposes.

The notional amounts of financial instruments used to hedge the above risks are as follows (in millions):

Interest rate swaps $ 213 $ 204

Non-derivative debt instruments $ 192 $ 203

Cash Flow Hedges

In 2022, we entered into an interest rate swap agreement with a notional amount of $100 million that matures in May 2029.

The interest rate swap agreement is designated as a cash flow hedge of interest payments on $100 million of borrowings under our 2024 Credit Agreement.

Under the terms of the swap agreement, we will receive monthly variable interest payments based on one month Term SOFR and will pay interest based on a fixed rate of 2.683% per annum.

In October 2024, we entered into an interest rate swap agreement with an initial notional amount of €100 million that matures in March 2030.

At December 31, 2024, the notional amount was $ 103.9 million or € 100 million.

The interest rate swap agreement is designated as a cash flow hedge of interest payments on euro denominated borrowings under our 2024

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Credit Agreement equal to the notional amount of the interest rate swap agreement.

The notional amount of the interest rate swap will decrease quarterly starting from June 2025.

Under the terms of the swap agreement, we will receive monthly variable interest payments based on one month EURIBOR and will pay interest based on a fixed rate of 2.11% per annum.

The fair value of the interest rate swap agreements as of December 31, 2024 was an asset of $ 5.4 million and a liability of $ 0.1 million and an asset of $ 3.9 million as of December 31, 2023, which has been deferred and recorded in accumulated other comprehensive income, net of income taxes, in our consolidated balance sheet.

When the hedged interest payment on the underlying borrowing is recognized in interest expense, the respective deferred gain/loss in accumulated other comprehensive income is reclassified to earnings as interest expense in the consolidated statements of operations.

The amount to be reclassified from accumulated other comprehensive income in the next twelve months is expected to be $ 1.3 million.

We perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term.

Interest rate swap agreements designated as cash flow hedges of interest payments mature in May 2029 and March 2030.

Under the terms of the interest rate swap agreements, we will receive monthly variable interest payments based on one month Term SOFR and one month EURIBOR, respectively, and will pay interest based on a fixed rate of 2.683 % per annum and 2.11 % per annum, respectively.

The fair value of interest rate swap agreements designated as cash flow hedges of interest rate risk are as follows (in thousands):

Derivative assets $ 2,587 $ 5,409

Derivative liabilities $ — $ 101

Gains/losses are deferred and recorded in accumulated other comprehensive income, net of income taxes, in the consolidated balance sheets and reclassified to interest expense in the consolidated statements of operations when the hedged interest payments on the underlying borrowing are recognized in interest expense.

We expect to reclassify a net gain of $ 0.5 million from accumulated other comprehensive income in the next twelve months .

We perform quarterly hedge effectiveness assessments and anticipate that the interest rate swaps will be highly effective.

If it becomes probable that the hedged interest payment(s) will not occur, we immediately recognize the related deferred hedging gains/losses in earnings.

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Net Investment Hedge

At December 31, 2024, $ 202.5 million or € 195 million notional amount of euro-denominated debt is designated as a hedge of our net investment in Nissens Automotive's foreign operations whose functional currency is Danish kroner.

Euro-denominated debt is designated as a hedge of our net investment in Nissens Automotive's foreign operations whose functional currency is Danish kroner.

Provided the net investment hedge is highly effective, gains/losses are recorded as a currency translation adjustment in accumulated other comprehensive income in the consolidated balance sheet.

The gains/losses will subsequently be reclassified into earnings when the hedged net investment is either sold or substantially liquidated.

We recognized a gain of $ 9.7 million as a currency translation adjustment in other comprehensive income in 2024.

The gains/losses will s ubsequently be reclassified into earnings when the hedged net investment is either sold or substantially liquidated.

We recognized a loss of $ 25.8 million and a gain of $ 9.7 million as a currency translation adjustment in other comprehensive income in the years ended December 31, 2025 and 2024 respectively .

No gains or losses related to the net investment hedge were recognized in earnings in 2025 .

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Non-Designated Derivatives

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Significant unobservable inputs that reflect assumptions that market participants would use in pricing an asset or liability.

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The following is a summary of the estimated fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments at December 31, 2024 and December 31, 2023 (in thousands):

December 31, 2024 December 31, 2023

The following is a summary of the estimated fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments recorded at fair value (in thousands):

Fair Value December 31, 2025 December 31, 2024

Fair Value Carrying

Cash and cash equivalents (a) Level 1/2 $ 44,426 $ 44,426 $ 32,526 $ 32,526

Deferred compensation Level 1 26,333 26,333 23,893 23,893

Short-term investments Level 2 6,956 6,956 — —

Long-term investments Level 2 93 93 7,468 7,468

Cash flow hedge interest rate swaps Level 2 5,409 5,409 3,939 3,939

Short term borrowings Level 1 27,117 27,117 5,029 5,029

Long-term debt Level 1 535,197 535,197 151,182 151,182

(a) As of December 31, 2024 cash and cash equivalents consist of cash of $ 44.4 million.

Ca sh and cash equivalents at December 31, 2023 consist of cash of $ 29.5 million and cash equivalents of $ 3 million , which are classified as Level 1 and Level 2, respectively, under the fair value hierarchy.

Cash equivalents consist of certificates of deposit with original maturities of 3 months, or less.

These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2024.

Deferred compensation 1 27,511 27,511 26,333 26,333

Short-term investments 2 — — 6,956 6,956

Cash flow hedge interest rate swaps 2 2,587 2,587 5,409 5,409

The fair value of the underlying assets held by the deferred compensation plan are based on the quoted market prices of the underlying funds which are held by registered investment companies.

The carrying value of our variable rate short-term borrowings and long-term debt under our credit facilities approximates fair value as the variable interest rates in the facilities reflect current market rates.

The fair value of our cash flow interest rate swap agreement is obtained from an independent third party, is based upon market quotes, and represents the net amount required to terminate the interest rate swap, taking into consideration market rates and counterparty credit risk.

Long-term investments consist of certificates of deposit with original maturities in excess of twelve months.

These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2024.

The income tax provision (benefit) consists of the following (in thousands):

The fair value of our cash flow interest rate swap agreements are obtained from independent third parties, are based upon market quotes, and represents the net amount required to terminate the interest rate swap, taking into consideration market rates and counterparty credit risk.

The carrying value of our short-term borrowings and long-term debt under our credit facilities of $ 618.7 million and $ 562.3 million at December 31, 2025 and 2024, respectively, approximates fair value as the variable interest rates in the facilities reflect current market rates, which are considered level 2 inputs.

Earnings from continuing operations before income taxes consists of the following (in thousands):

Year Ended December 31,

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Foreign 5,167 2,247 20,936

Total current 31,015 24,646 24,851

Domestic ( 9,536 ) ( 5,769 ) 1,102

Foreign ( 2,094 ) ( 509 ) ( 747 )

Total deferred ( 11,630 ) ( 6,278 ) 355

Total income tax provision $ 19,385 $ 18,368 $ 25,206

STANDARD MOTOR PRODUCTS, INC.

Total $ 110,523 $ 73,989 $ 81,716

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The provision (benefit) for income taxes attributable to continuing operations consists of the following (in thousands):

Year Ended December 31,

2025 2024 2023

Current tax expense (benefit)

Domestic federal $ 15,650 $ 17,426 $ 13,832

Domestic state and local 1,951 2,335 1,590

Foreign 22,439 11,254 9,224

Total current tax expense 40,040 31,015 24,646

Deferred tax expense (benefit)

Domestic federal ( 3,919 ) ( 7,848 ) ( 4,926 )

Domestic state and local ( 1,031 ) ( 1,688 ) ( 843 )

Foreign ( 4,473 ) ( 2,094 ) ( 509 )

Total deferred tax expense ( 9,423 ) ( 11,630 ) ( 6,278 )

Total income tax expense (benefit)

Domestic federal 11,731 9,578 8,906

Domestic state and local 920 647 747

Foreign 17,966 9,160 8,715

Total income tax expense $ 30,617 $ 19,385 $ 18,368

Reconciliations between taxes at the U.S.

2 unchanged sentences

2025 2024 2023

Federal income tax rate of 21 %

$ 15,538 $ 17,160 $ 20,650

Increase (decrease) in tax rate resulting from:

State and local income taxes, net of federal income tax benefit 1,922 2,086 3,118

Change in valuation allowance 770 674 1,068

Income tax (benefit) attributable to foreign income 4,370 377 ( 53 )

Other non-deductible items, net ( 3,215 ) ( 1,929 ) 423

Provision for income taxes $ 19,385 $ 18,368 $ 25,206

Amount Rate Amount Rate Amount Rate

federal statutory tax $ 23,210 21.0 % $ 15,538 21.0 % $ 17,160 21.0 %

Effect of cross-border tax laws

Global intangible low taxed income (GILTI) ⁽ᵃ⁾ — — 2,986 4.0 3,070 3.7

taxation of Mexican disregarded entities 1,972 1.8 1,871 2.5 1,881 2.3

Other ( 50 ) — ( 326 ) ( 0.4 ) ( 743 ) ( 0.9 )

Foreign tax credits ( 3,452 ) ( 3.1 ) ( 5,297 ) ( 7.1 ) ( 5,356 ) ( 6.6 )

Changes in valuation allowances 2,360 2.1 770 1.0 865 1.1

Nontaxable or nondeductible items

Nondeductible acquisition costs — — 795 1.1 — —

Permanent difference true-up ( 256 ) ( 0.2 ) ( 395 ) ( 0.5 ) ( 1,330 ) ( 1.6 )

Other 193 0.2 ( 118 ) ( 0.2 ) 29 —

Other adjustments 14 — ( 122 ) ( 0.2 ) ( 131 ) ( 0.2 )

Domestic state and local income taxes, net of federal income tax effect ⁽ᵇ⁾ 3,057 2.8 1,922 2.6 2,086 2.6

Foreign tax eﬀects

Provincial 1,794 1.6 1,305 1.8 1,028 1.3

Other ( 442 ) ( 0.4 ) ( 710 ) ( 1.0 ) ( 607 ) ( 0.7 )

Mexico 1,173 1.0 1,465 2.0 1,097 1.3

Other foreign jurisdictions 1,045 0.9 ( 299 ) ( 0.4 ) ( 681 ) ( 0.8 )

Effective tax rate $ 30,617 27.7 % $ 19,385 26.2 % $ 18,368 22.5 %

(a) We intend to elect the GILTI high tax exception when we file our income tax return for the year ended December 31, 2025.

This election excludes from GILTI the income of a controlled foreign corporation that incurs a foreign tax at a rate greater than 90% of the U.S.

corporate rate.

Accordingly, the amount of global intangible low taxed income reflected above is zero .

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(b) The states that comprise more than 50% of the tax effect in this category for 2025 include Texas, Tennessee, California, and Illinois.

Texas, Tennessee, Kansas, New York, Illinois, and California for 2024, and Texas, California, Kansas, New York, and Illinois for 2023.

The following is a summary of the components of the net deferred tax assets and liabilities recognized in the accompanying consolidated balance sheets (in thousands):

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Allowance for expected credit losses 4,631 3,586

Other 4,351 10

91,033 73,823

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Depreciation 7,486 6,669

Interest rate swap agreement 1,345 990

Other 6,574 5,351

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Our assumptions are consistent with estimates and plans used to manage our business.

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The valuation allowance of $ 7.3 million as of December 31, 2025 is intended to provide for uncertainty regarding the ultimate realization of our U.S.

foreign tax credit carryovers of $ 4.6 million that will expire in varying amounts by 2032, and foreign net operating losses of $ 0.2 million.

foreign tax credit carryovers of $ 7.0 million that will expire in varying amounts by 2035 , and foreign net operating losses subject to valuation allowance of $ 0.3 million .

Based on these considerations, we believe it is more likely than not that we would realize the benefit of the net deferred tax asset of $ 25.4 million as of December 31, 2025, which is net of the remaining valuation allowance.

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We remain subject to examination by state and local tax authorities for tax years 2021 through 2024.

Foreign jurisdictions have statutes of limitations generally ranging from 2 to 6 years.

Years still open to examination by foreign tax authorities in major jurisdictions include Canada (2020 onward), Hong Kong (2019 onward), China (2022 onward), Mexico (2018 onward), Poland (2019 onward), Hungary (2019 onward), Germany (2020 onward), Denmark (2019 onward) and Slovakia (2019 onward).

Foreign jurisdictions have statutes of limitations g enerally ranging from 2 to 6 years.

Years still open to examination by foreign tax authorities in major jurisdictions include

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Canada (2021 onward), Poland (2020 onward) and Denmark (2020 onward).

We do not presently anticipate that our unrecognized tax benefits will significantly increase or decrease over the next 12 months;

however, actual developments in this area could differ from those currently expected.

The following is a summary of our cash taxes paid (in thousands):

Year Ended December 31,

2025 2024 2023

Domestic federal $ 2,185 $ 2,008 $ 4,978

Domestic state and local 1,834 681 1,068

Canada - federal 2,586 1,918 1,675

Canada - provincial 1,834 1,335 1,135

China 2,126 1,427 862

Denmark 6,665 3,859 —

Mexico 4,761 5,507 4,198

Poland 879 1,559 1,104

Other 1,963 1,547 999

Total $ 24,833 $ 19,841 $ 16,019

Earnings Per Share

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Potentially dilutive common shares that are anti-dilutive are excluded from net earnings per common share.

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The following are reconciliations of the net earnings attributable to SMP and the shares used in calculating basic and dilutive net earnings per common share attributable to SMP (in thousands, except share and per share data):

14 unchanged sentences

Weighted average number of common shares, diluted 22,483,591 22,237,060 22,161,341

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The shares listed below were not included in the computation of diluted net earnings per common share attributable to SMP because to do so would have been anti-dilutive for the periods presented or because they were excluded under the treasury method (in thousands):

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Our automotive aftermarket business is comprised of three operating segments, Vehicle Control, Temperature Control and Nissens Automotive, while our Engineered Solutions operating segment offers a broad array of conventional and future-oriented technologies.

Nissens Automotive is a new operating segment created in the fourth quarter of 2024 comprising of our acquisition in November 2024.

The Vehicle Control operating segment includes sales from ignition emissions and fuel delivery, electrical and safety, and wire sets and other product categories to automotive aftermarket customers.

The Temperature Control operating segment includes sales from air conditioning system components and other thermal product categories to automotive aftermarket customers primarily in the United States, and is poised to benefit from the broader adoption of more complex air conditioning systems that will provide passenger comfort regardless of the vehicle's powertrain.

The Engineered Solutions operating segment includes sales of custom-engineered solutions to vehicle and equipment manufacturers in highly diversified global end-markets such as commercial and light vehicles, construction, agriculture, power sports and marine.

The Nissens Automotive operating segment includes sales of engine cooling, air conditioning system components and engine efficiency products to automotive aftermarket customers primarily in Europe.

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There are no intersegment sales among our operating segments.

Other consists of financial information related to the activities of our corporate headquarters function.

We identify our operating segments based on how our chief operating decision maker ("CODM"), our President and Chief Executive Officer, allocates resources, assesses performance and makes decisions.

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The following tables contain financial information for each reportable operating segment (in thousands):

Year ended December 31, 2024 Vehicle Control Temperature Control Engineered Solutions Nissens Automotive Other Total

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Year Ended December 31, 2025 Vehicle Control Temperature Control Nissens Automotive Engineered Solutions Intersegment sales Total

Net sales $ 785,392 $ 426,367 $ 305,377 $ 274,484 $ ( 462 ) $ 1,791,158

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Supply chain financing expenses 27,934 16,741 577 — — 45,252

Restructuring and integration expenses 4,249 847 843 — 1,729 7,668

Restructuring expenses 2,271 190 — 118 — 2,579

Other expenses — — 1,796 1,987 — 3,783

Total operating expenses 176,779 82,855 35,099 14,293 33,671 342,697

Operating income (loss) $ 67,306 $ 34,937 $ 14,820 $ ( 2,768 ) $ ( 33,671 ) $ 80,624

Total segment operating expenses 181,309 83,336 93,530 36,454 — 394,629

Segment operating income (loss) $ 65,796 $ 61,485 $ 26,900 $ 10,598 $ — $ 164,779

Unallocated corporate expenses and other 28,272

Other non-operating income, net 5,355

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Earnings from continuing operations before income taxes $ 110,523

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Year ended December 31, 2023 Vehicle Control Temperature Control Engineered Solutions Nissens Automotive Other Total

Year Ended December 31, 2024 Vehicle Control Temperature Control Nissens Automotive Engineered Solutions Intersegment sales Total

Net sales $ 762,560 $ 380,088 $ 35,745 $ 285,456 $ — $ 1,463,849

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Supply chain financing expenses 32,090 16,449 — — — 48,539

Restructuring and integration expenses 1,276 1,108 258 — — 2,642

Restructuring expenses 4,249 847 — 843 — 5,939

Other expenses — — 100 — — 100

Total operating expenses 166,888 78,484 34,840 — 15,937 296,149

Operating income (loss) $ 71,327 $ 17,343 $ 19,944 $ — $ ( 15,937 ) $ 92,677

Total segment operating expenses 176,779 82,855 14,293 35,099 — 309,026

Segment operating income (loss) $ 67,306 $ 34,937 $ ( 2,768 ) $ 14,820 $ — $ 114,295

Unallocated corporate expenses and other 33,671

Other non-operating income, net 6,877

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Earnings from continuing operations before income taxes $ 73,989

Year ended December 31, 2022 Vehicle Control Temperature Control Engineered Solutions Nissens Automotive Other Total

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Year Ended December 31, 2023 Vehicle Control Temperature Control Nissens Automotive Engineered Solutions Intersegment sales Total

Net sales $ 737,932 $ 337,754 $ — $ 282,586 $ — $ 1,358,272

5 unchanged sentences

Supply chain financing expenses 30,558 15,473 — — — 46,031

Restructuring and integration expenses 1,496 395 — — — 1,891

Other expenses — — — — — —

Total operating expenses 158,114 72,455 32,645 — 15,190 278,404

Operating income (loss) $ 74,153 $ 26,459 $ 18,713 $ — $ ( 15,190 ) $ 104,135

Restructuring expenses 1,276 1,108 — 258 — 2,642

Total segment operating expenses 166,888 78,484 — 34,840 — 280,212

Segment operating income (loss) $ 71,327 $ 17,343 $ — $ 19,944 $ — $ 108,614

Unallocated corporate expenses and other 15,937

Other non-operating income, net 2,326

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Earnings from continuing operations before income taxes $ 81,716

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Year Ended December 31,

2024 2023 2022

(in thousands) 2025 2024 2023

Depreciation and amortization

1 unchanged sentence

Temperature Control 3,285 3,307 3,424

Engineered Solutions 9,608 9,966 9,557

Nissens Automotive 12,935 1,943 —

Other 1,714 1,755 1,693

Total depreciation and amortization $ 31,413 $ 29,022 $ 28,298

Investment in unconsolidated affiliates

Vehicle Control $ 2,447 $ 2,496 $ 2,490

Temperature Control 20,396 19,711 27,557

Engineered Solutions 10,088 9,608 9,966

Nissens Automotive — —

Total investment in unconsolidated affiliates $ 24,842 $ 24,050 $ 41,745

Total operating segment depreciation and amortization 42,486 29,699 27,267

Corporate 1,362 1,714 1,755

Total depreciation and amortization $ 43,848 $ 31,413 $ 29,022

Capital expenditures

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Temperature Control 4,076 2,621 1,899

Engineered Solutions 9,721 12,095 6,489

Nissens Automotive 946 213 —

Other 1,860 684 2,116

Engineered Solutions 9,553 9,721 12,095

Total operating segment capital expenditures 37,146 42,158 27,949

Corporate 1,578 1,860 684

Total capital expenditures $ 38,724 $ 44,018 $ 28,633

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(in thousands) 2025 2024

Investment in unconsolidated affiliates

Vehicle Control $ 2,883 $ 2,447

Temperature Control 20,402 20,396

Nissens Automotive — —

Engineered Solutions 3,025 1,999

Total operating segment investment in unconsolidated affiliates 26,310 24,842

Corporate — —

Total investment in unconsolidated affiliates $ 26,310 $ 24,842

Vehicle Control $ 741,732 $ 659,607

Temperature Control 312,884 276,216

Nissens Automotive 531,606 482,773

Other 109,664 105,741 92,485

Engineered Solutions 289,776 285,866

Total operating segment assets 1,875,998 1,704,462

Corporate 119,243 109,664

Total assets $ 1,995,241 $ 1,814,126

(in thousands) 2025 2024

Long-lived assets (a)

United States $ 378,557 $ 368,792 $ 326,199

Long-lived assets ⁽ᵃ⁾

Denmark $ 383,393 $ 347,629

United States 372,187 378,557

Asia 67,410 67,406

Europe 59,909 $ 44,517 $ 38,351

Europe, excluding Denmark 65,239 59,909

Mexico 27,098 21,173

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(a) Long-lived assets are attributed to countries based upon the location of the assets.

Our three largest individual customers accounted for approximately 60.7 % of our consolidated net sales in 2024 .

During 2024 , O’Reilly Auto Parts, AutoZone and NAPA accounted for 28.4 % , 18.8 % and 13.5 % of our consolidated net sales, respectively.

Net sales from each of the customers were reported in our Vehicle Control and Temperature Control operating segments.

The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them could have a material adverse impact on our business, financial condition and results of operations.

In addition, any consolidation among our key customers may further increase our customer concentration risk.

For the disaggregation of our net sales from customers by major product group and geographic area within each of our operating segments, see Note 22, “Net Sales.”

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We disaggregate our net sales from contracts with customers by major product group and geographic area within each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our net sales are affected by economic factors.

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The Temperature Control operating segment generates its revenue from aftermarket sales of air conditioning system components and other thermal products.

The Engineered Solutions operating segment generates revenues from custom-engineered products to vehicle and equipment manufacturers in highly diversified global end-markets such as commercial and light vehicles, construction, agriculture, power sports and marine.

The Nissens Automotive operating segment generates its revenues from aftermarket sales of engine cooling, air conditioning system components and engine efficiency products primarily in Europe.

The following table summarizes consolidated net sales by major product group within each operating segment for the years ended December 31, 2024, 2023 and 2022 (in thousands):

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The following table summarizes consolidated net sales by major product group within each operating segment (in thousands):

Year Ended December 31,

9 unchanged sentences

Total Temperature Control 426,367 380,088 337,754

Nissens Automotive

Air Conditioning 126,727 9,214 —

Engine Cooling 126,389 19,287 —

Engine Efficiency 52,261 7,244 —

Total Nissens Automotive 305,377 35,745 —

Engineered Solutions

Light Vehicle 84,887 91,548 92,701

Commercial Vehicle 81,239 89,171 79,376

Construction/Agriculture 35,618 35,832 41,665

Light Vehicle 91,548 92,701 91,533

All Other 72,740 68,905 68,844

Total Engineered Solutions 274,484 285,456 282,586

Nissens Automotive

Engine Cooling 19,287 — —

Air Conditioning 9,214 — —

Engine Efficiency 7,244 — —

Total Nissens Automotive 35,745 — —

Intersegment sales ( 462 ) — —

Total $ 1,791,158 $ 1,463,849 $ 1,358,272

Geographic Area

We sell our line of products primarily in the United States, with additional sales in Europe, Canada, Mexico, Asia and other foreign countries.

We sell our line of products primarily in the United States, with additional sales in Europe, Canada, Mexico, and other foreign countries.

Sales are attributed to countries based upon the location of the customer.

Our sales are substantially denominated in U.S.

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The following tables provide disaggregation of net sales information by geographic area within each operating segment for the years ended December 31, 2024, 2023 and 2022 (in thousands):

The following tables provide disaggregation of net sales information by geographic area within each operating segment (in thousands):

Year Ended December 31, 2025 Vehicle

Engineered Solutions Nissens Automotive Other Total

Nissens Automotive Engineered Solutions Intersegment sales Total

United States $ 700,098 $ 407,745 $ 16,210 $ 149,110 $ ( 462 ) $ 1,272,701

Europe 1,118 176 53,682 31,757 — 86,733

Europe, excluding Poland 877 102 207,030 48,841 — 256,850

Canada 38,113 16,831 364 33,320 — 88,628

Poland 35 — 70,366 6,578 — 76,979

Mexico 41,248 61 77 10,854 — 52,240

Asia 330 1,741 33,508 1,098 — 36,677

Other foreign 5,021 1,628 11,330 25,781 — 43,760

Total $ 785,392 $ 426,367 $ 305,377 $ 274,484 $ ( 462 ) $ 1,791,158

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 2024 Vehicle

Nissens Automotive Other Total

Control Temperature

Control Nissens Automotive Engineered Solutions Intersegment sales Total

United States $ 677,779 $ 360,858 $ 2,213 $ 154,960 $ — $ 1,195,810

Europe, excluding Poland 1,091 176 31,748 49,605 — 82,620

Canada 37,683 16,707 82 31,027 — 85,499

Europe 916 8 59,266 — — 60,190

Poland 27 — 9 4,077 — 4,113

Mexico 40,555 171 14 9,138 — 49,878

Asia 351 526 19,522 — — 20,399

Other foreign 5,425 2,176 1,679 36,649 — 45,929

1 unchanged sentence

Year Ended December 31, 2023 Vehicle

Nissens Automotive Other Total

Control Temperature

Control Nissens Automotive Engineered Solutions Intersegment sales Total

United States $ 659,570 $ 319,904 $ — $ 168,878 $ — $ 1,148,352

Europe, excluding Poland 878 8 — 56,647 — 57,533

Canada 36,088 17,081 — 25,689 — 78,858

Europe 661 75 37,784 — — 38,520

Poland 38 — — 2,619 — 2,657

Mexico 36,350 49 — 6,658 — 43,057

Asia 2,408 63 16,715 — — 19,186

Other foreign 5,008 712 — 22,095 — 27,815

9 unchanged sentences

Balance, end of period $ 27,561 $ 24,715

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Letters of Credit

As of December 31, 2024 and 2023, we had outstanding letters of credit with certain vendors aggregating approximately $ 2.5 million and $ 2.3 million, respectively.

These letters of credit are being maintained as security for reimbursements to insurance companies and as security to the landlord of our administrative offices in Long Island City, New York.

The contract amount of the letters of credit is a reasonable estimate of their value as the value for each is fixed over the life of the commitment.

Change of Control Arrangements

1 unchanged sentence

In the event of a change of control (as defined in the agreement), the executive will receive severance payments and certain other benefits as provided in his agreement.

In 1986, we acquired a brake business, which we subsequently sold in March 1998 and which is accounted for as a discontinued operation in the accompanying statement of operations.

In 1986, we acquired a brake business, which we subsequently sold in March 1998 and which is accounted for as a discontinued operation in the accompanying consolidated statements of operations.

When we originally acquired this brake business, we assumed future liabilities relating to any alleged exposure to asbestos-containing products manufactured by the seller of the acquired brake business.

4 unchanged sentences

We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In evaluating our potential asbestos-related liability, we have considered various factors including, among other things, an actuarial study of the asbestos related liabilities performed by an independent actuarial firm, our settlement amounts and whether there are any co-defendants, the jurisdiction in which lawsuits are filed, and the status and results of such claims.

12 unchanged sentences

The increase in the estimated undiscounted liability from the prior year study at both the low end and high end of the range reflects our actual experience, our historical data and certain assumptions with respect to events that may occur in the future.

Based upon the results of the August 31, 2024 actuarial study, in September 2024 we increased our asbestos liability to $ 99.6 million , the low end of the range, and recorded an incremental pre-tax provision of $ 29.3 million in earnings (loss) from discontinued operations in the accompanying statement of operations.

Future legal costs, which are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations, are estimated, according to the August 31, 2024 study, to range from $ 49.8 million to $ 115.9 million for the period through 2065.

Total operating cash outflows related to discontinued operations, which include settlements, awards of asbestos-

STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

related damages and legal costs, net of taxes, were $ 15.3 million , $ 11 million and $ 12.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Based upon the results of the August 31, 2025 actuarial study, in September 2025 we increased our asbestos liability to $ 127.5 million , the low end of the range, and recorded an incremental pre-tax provision of $ 44.4 million in loss from discontinued operations in the accompanying consolidated statement of operations.

Future legal costs, which are expensed as incurred and reported in loss from discontinued operations in the accompanying consolidated statements of operations, are estimated, according to the August 31, 2025 study, to range from $ 48.5 million to $ 115.3 million for the period through 2065.

Total operating cash outflows related to discontinued operations, which include settlements, awards of asbestos-related damages and legal costs, net of taxes, were $ 14.0 million , $ 15.3 million and $ 11.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

We plan to perform an annual actuarial evaluation during the third quarter of each year for the foreseeable future and whenever events or changes in circumstances indicate that additional provisions may be necessary.

4 unchanged sentences

In connection with the aforementioned former brake business, we were subject to a legal proceeding alleging a breach of contract claim of the related purchase agreement.

In August 2023, we reached a final settlement in the amount of $ 10.5 million and payment was made in October 2023.

The full amount of the settlement was recorded $ 10.5 million in earnings (loss) from discontinued operations in the accompanying statement of operations in 2023.

In August 2023, we reached a final settlement in the amount of $ 10.5 million which was paid in October 2023 and the settlement was fully recorded in loss from discontinued operations in the accompanying consolidated statement of operations in 2023.

We are currently involved in various other legal claims and legal proceedings (some of which may involve substantial amounts), including claims related to commercial disputes, product liability, employment, and environmental.

3 unchanged sentences

Significant judgment is required in both the determination of probability and the determination as to whether an exposure can be reasonably estimated.

As additional information becomes available, we reassess our potential liability related to these matters.

As additional information becomes available, we reassess our potential liability related to these

Index STANDARD MOTOR PRODUCTS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

Subsequent Event

In 2025 we were subject to tariffs on certain imports into the United States under the International Emergency Economic Powers Act (“IEEPA”).

On February 20, 2026, the United States Supreme Court rendered a decision invalidating tariffs imposed under IEEPA.

In response to the Supreme Court’s decision, the current Administration announced its intention to impose new tariffs under different statutory authority.

We are currently evaluating the impact of these actions on our business and will continue to monitor developments as they occur.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data