What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-16 compared with 2025-03-03 · 338 added, 235 removed, 1059 unchanged (35% of the section changed)

39 unchanged sentences

The warranty liability requires a forecast of the resolution of existing claims as well as expected future claims on products previously sold.

Auditing the Company’s reserve for product warranty and recall is complex due to the measurement uncertainty associated with the estimate, management’s judgment in determining the cost and volume estimates used in the computation, as well as volume and costing assumptions in determining the expected future claims on products previously sold.

Auditing the Company’s reserve for certain product warranty and recall is complex due to the measurement uncertainty associated with the estimate, management’s judgment in determining the cost and volume estimates used in the computation, as well as volume and costing assumptions in determining the expected future claims on products previously sold.

How We Addressed the Matter in Our Audit We evaluated the design and tested the operating effectiveness of the Company’s controls over the product warranty and recall process.

27 unchanged sentences

Current liabilities:

Current portion of debt $ — $ 2,113

Accounts payable $ 82,235 $ 83,478

26 unchanged sentences

Selling, general and administrative 125,605 117,460 117,395

Impairment of Control Devices assets 21,628 — —

Design and development 62,527 72,174 71,075

1 unchanged sentence

Interest expense, net 13,578 14,447 13,000

Equity in loss of investee 1,292 522 823

Other (income) expense, net ( 2,523 ) 1,236 5,711

Equity in (earnings) loss of investee ( 340 ) 1,292 522

Other expense (income), net 3,608 ( 2,523 ) 1,236

Loss before income taxes ( 55,452 ) ( 13,597 ) ( 1,922 )

13 unchanged sentences

Net loss $ ( 102,835 ) $ ( 16,524 ) $ ( 5,183 )

Other comprehensive (loss) income, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation 30,995 ( 25,839 ) 9,118

Unrealized (loss) gain on derivatives (2) ( 3,386 ) 1,236 53

Other comprehensive (loss) income, net of tax ( 29,225 ) 10,354 ( 6,118 )

Unrealized gain (loss) on derivatives (1) 1,918 ( 3,386 ) 1,236

Other comprehensive income (loss), net of tax 32,913 ( 29,225 ) 10,354

Comprehensive (loss) income $ ( 69,922 ) $ ( 45,749 ) $ 5,171

_____________________________

(1) Net of tax expense of $ 514 for the year ended December 31, 2022.

(2) Net of tax (benefit) expense of $( 901 ), $ 328 and $ 14 for the years ended December 31, 2024, 2023 and 2022, respectively.

(1) Net of tax expense (benefit) of $ 511 , $( 901 ) and $ 328 for the years ended December 31, 2025, 2024 and 2023, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

5 unchanged sentences

Net loss $ ( 102,835 ) $ ( 16,524 ) $ ( 5,183 )

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation 23,731 26,140 26,749

1 unchanged sentence

Deferred income taxes 37,079 ( 5,742 ) ( 4,038 )

Loss of equity method investee 1,292 522 823

Impairment of Control Devices assets 21,628 — —

(Gain) loss of equity method investee ( 340 ) 1,292 522

Loss (gain) on sale of fixed assets 146 257 ( 860 )

11 unchanged sentences

Proceeds from sale of fixed assets 399 385 1,869

Proceeds from settlement of net investment hedges — — 3,820

Investment in venture capital fund ( 550 ) ( 350 ) ( 950 )

Investment in venture capital fund, net ( 372 ) ( 550 ) ( 350 )

Net cash used for investing activities ( 21,823 ) ( 24,468 ) ( 36,979 )

4 unchanged sentences

Repayments of debt ( 19,882 ) ( 33,745 ) ( 35,102 )

Earn-out consideration cash payment — — ( 6,276 )

Other financing costs ( 777 ) — ( 2,251 )

Repurchase of Common Shares to satisfy employee tax withholding ( 340 ) ( 795 ) ( 1,720 )

Net cash provided by (used for) financing activities 11,121 17,485 ( 7,297 )

Net cash (used for) provided by financing activities ( 25,302 ) 11,121 17,485

Effect of exchange rate changes on cash and cash equivalents 7,523 ( 3,410 ) 591

21 unchanged sentences

Currency translation adjustments — — — — — 9,118 9,118

Issuance of Common Shares 193 ( 193 ) — — — — —

Repurchased Common Shares for treasury, net ( 43 ) 43 — 4,898 — — 4,898

Issuance of Common Shares, net of repurchases 208 ( 208 ) — 7,022 — — 7,022

Share-based compensation, net — — ( 5,418 ) — — — ( 5,418 )

1 unchanged sentence

Net loss — — $ — $ — $ ( 16,524 ) $ — $ ( 16,524 )

Unrealized gain on derivatives, net — — — — — 1,236 1,236

Unrealized loss on derivatives, net — — — — — ( 3,386 ) ( 3,386 )

Currency translation adjustments — — — — — ( 25,839 ) ( 25,839 )

Issuance of Common Shares 297 ( 297 ) — — — — —

Repurchased Common Shares for treasury, net ( 89 ) 89 — 7,022 — — 7,022

Issuance of Common Shares, net of repurchases 146 ( 146 ) — 4,920 — — 4,920

Share-based compensation, net — — ( 1,628 ) — — — ( 1,628 )

1 unchanged sentence

Net loss — — $ — $ — $ ( 102,835 ) $ — $ ( 102,835 )

Unrealized loss on derivatives, net — — — — — ( 3,386 ) ( 3,386 )

Unrealized gain on derivatives, net — — — — — 1,918 1,918

Currency translation adjustments — — — — — 30,995 30,995

Issuance of Common Shares 196 ( 196 ) — — — — —

Repurchased Common Shares for treasury, net ( 50 ) 50 — 4,920 — — 4,920

Issuance of Common Shares, net of repurchases 323 ( 323 ) — 10,967 — — 10,967

Share-based compensation, net — — ( 6,526 ) — — — ( 6,526 )

24 unchanged sentences

Revenues are principally generated from the commercial, automotive, off-highway and agricultural vehicle markets.

The Company’s largest customers are PACCAR and Traton, primarily related to the Electronics reportable segment and accounted for the following percentages of consolidated net sales:

The Company’s largest customers are Volvo and PACCAR, primarily related to the Electronics reportable segment and accounted for the following percentages of consolidated net sales:

2025 2024 2023

Volvo 18 % 16 % 16 %

PACCAR 15 % 13 % 10 %

Traton 13 % 15 % 11 %

Accounts receivable are recorded at the invoice price, net of an estimate of allowance for doubtful accounts and other reserves.

24 unchanged sentences

In 2022, the Company entered into a long-term supply agreement, as amended, with a supplier for the purchase of certain electronic semiconductor components through December 31, 2030.

Pursuant to the agreement, the Company paid capacity deposits of $ 1,000 in 2022 and 2023, respectively.

The capacity deposits are recognized in prepaid and other current assets on our consolidated balance sheet.

Pursuant to the agreement, the Company paid capacity deposits of $ 1,000 each in December 2022 and June 2023.

The capacity deposits are recognized in prepaid and other current assets on our consolidated balance sheet and amortized ratably based on purchases over the life of the purchase commitment.

This long-term supply agreement requires the Company to purchase minimum annual volumes while requiring the supplier to sell these components at a fixed price.

1 unchanged sentence

The Company is required to purchase $ 3,876 , $ 7,489 , $ 8,861 , $ 5,975 and $ 2,170 of components in each of the years 2026 through 2030, respectively.

We evaluate our long-term supply agreement on a continuous basis in the context of customer demand and overall market dynamics.

Part of that evaluation process has resulted in re-negotiating of minimum annual volumes in the past.

Should customer demand and market dynamics require us to re-evaluate our long-term supply commitments, we intend to engage with the supplier to negotiate an amendment to the long-term supply agreement and amend the supply commitments to align with current market conditions.

Pre-production Costs Related to Long-term Supply Arrangements

49 unchanged sentences

(in thousands, except share and per share data, unless otherwise indicated)

During 2025, the Company began evaluating strategic alternatives for the Control Devices segment, including a potential sale of the business.

While the segment did not meet the "held for sale" criteria as of December 31, 2025, the Company determined that the shortened estimated holding period constituted a triggering event under ASC 360.

As a result, the Company determined an impairment indicator existed and performed a recoverability test of the related long-lived assets.

The Company identified the Control Devices segment as one asset group.

As a result of the recoverability test performed, the Company determined that the undiscounted future cash flows expected to be generated by the segment over its revised remaining useful life were less than its carrying value.

As such, an impairment loss of $ 21,628 was recorded based on the difference between the fair value and the carrying value of the assets.

The Company weighted the income approach (discounted cash flow method) and the market approach (guideline public company method) to determine the fair value of the Control Devices segment.

The fair value determined approximated the price paid to the Company of $ 59,000 on January 30, 2026.

Refer to Note 14 of the consolidated financial statements for discussion of the Control Devices sale.

During the year ended December 31, 2025, the impairment loss of $ 21,628 was recorded as a separate financial statement line item on the Company’s consolidated statement of operations as impairment of control devices assets.

The inputs utilized in the analysis are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement."

Goodwill and Other Intangible Assets

20 unchanged sentences

There was no impairment of goodwill for the years ended December 31, 2025, 2024 or 2023.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Goodwill and changes in the carrying amount of goodwill for the Electronics segment for the years ended December 31, 2025 and 2024 were as follows:

3 unchanged sentences

The Company’s cumulative goodwill impairment loss since inception was $ 300,083 at December 31, 2025 and 2024, which includes Stoneridge Brazil’s goodwill impairment in 2014 and goodwill impairment recorded by the Company’s Control Devices segment in 2008 and 2004.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Other Intangible Assets

18 unchanged sentences

Customer lists, tradenames and technology of $ 1,071 , $ 3,212 and $ 1,374 , respectively, related to the Stoneridge Brazil segment at December 31, 2025.

Patents and capitalized software development of $ 48 and $ 1,463 , respectively, related to the Control Devices segment at December 31, 2024.

Patents and capitalized software develop ment of $ 14 and $ 327 , respectively, related to the Control Devices segment at December 31, 2025.

The Company designs and develops software that will be embedded into certain products and sold to customers.

6 unchanged sentences

There were no intangible impairment charges for the years ended December 31, 2025, 2024 or 2023.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Accrued Expenses and Other Current Liabilities

11 unchanged sentences

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Deferred tax assets are recognized to the extent that these assets are more likely than not to be realized (See Note 6).

11 unchanged sentences

Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction with the resulting adjustments included on the consolidated statements of operations within other (income) expense, net.

These foreign currency transaction (gains) losses, including the impact of hedging activities, were $( 2,414 ) , $ 1,226 and $ 5,534 for the years ended December 31, 2024, 2023 and 2022, respectively.

These foreign currency transaction losses (gains), including the impact of hedging activities, were $ 3,500 , $( 2,414 ) and $ 1,226 for the years ended December 31, 2025, 2024 and 2023, respectively.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Revenue Recognition and Sales Commitments

22 unchanged sentences

Product warranty and recall includes $ 11,697 and $ 10,675 of a long-term liability at December 31, 2025 and 2024, respectively, which is included as a component of other long-term liabilities on the consolidated balance sheets.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

In 2023, the Company received a demand for arbitration from one of our customers seeking recovery of warranty claims in the amount of 29,340 euro ($ 32,669 ), related to past sales of PM sensor products, a product line we exited in 2019.

In 2023, the Company received a demand for arbitration from one of our customers seeking recovery of warranty claims related to alleged defects in PM sensor products sold prior to the Company's exit from that product line in 2019.

The Company denies responsibility for these claims.

Based on our review of the technical and legal merits, we believe these warranty claims lack substantive merit and are significantly overstated.

The Company continues to vigorously defend this matter in private arbitration.

While no assurances can be made as to the ultimate outcome of this matter, or any other future claims, we do not currently believe a material loss is probable.

An arbitration hearing was held in the first quarter of 2026 in which the claimant sought approximately $ 41,000 in direct warranty damages plus additional reputational damage;

a resolution is expected by the end of the year.

While the Company believes a material loss is not probable, given the inherent uncertainty of arbitration proceedings, it is reasonably possible that the outcome could result in a loss in an amount that the Company is currently unable to estimate.

The following provides a reconciliation of changes in the product warranty and recall reserve:

9 unchanged sentences

These product development costs amounted to $ 62,527 , $ 72,174 and $ 71,075 for the years ended December 31, 2025, 2024 and 2023, respectively, or 7.3 %, 7.9 % and 7.3 % of net sales for these respective periods.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Research and Development Activities

3 unchanged sentences

At December 31, 2025, the Company had two share-based compensation plans:

(1) 2016 Long-Term Incentive Plan for employees and (2) the 2018 Amended and Restated Directors’ Restricted Shares Plan, for non-employee directors.

(1) 2016 Long-Term Incentive Plan for employees and (2) the 2025 Long-Term Incentive Plan for employees and non-employee directors.

See Note 8 for additional details on share-based compensation plans.

8 unchanged sentences

The Company accounts for Common Shares held in treasury under the cost method (applied on a FIFO basis) and includes such shares as a reduction of total shareholders’ equity.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Loss Per Share

10 unchanged sentences

These performance-based restricted and right to receive Common Shares are included in the computation of diluted earnings per share based on the number of Common Shares that would be issuable if the end of the year were the end of the contingency period.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Deferred Financing Costs, net

1 unchanged sentence

Deferred financing cost amortization and debt discount accretion, for the years ended December 31, 2025, 2024 and 2023 was $ 1,197 , $ 725 and $ 1,190 , respectively, and is included as a component of interest expense, net in the consolidated statements of operations.

In 2022, the Company capitalized $ 484 of deferred financing costs as a result of entering into Amendment No.

3 to the Fourth Amended and Restated Credit Facility.

In connection with Amendment No.

3, the Company wrote off a portion of the previously recorded deferred financing costs of $ 365 in interest expense, net during the year ended December 31, 2022.

In 2023, the Company capitalized $ 332 of deferred financing costs as a resulting of entering into Amendment No.

1 unchanged sentence

Additionally in 2023, the Company capitalized $ 1,915 of deferred financing costs and wrote off $ 309 of previously recorded deferred financing costs as a result of entering into the Fifth Amended and Restated Credit Agreement.

In 2025, the Company capitalized $ 561 of deferred financing costs as a result of entering into Amendment No.

1 to the Fifth Amended and Restated Credit Agreement and Waiver.

Additionally in 2025, as a result of entering into Amendment No.2 to the Fifth Amended and Restated Credit Agreement and Consent Agreement, the Company capitalized $ 216 of deferred financing costs and wrote off $ 192 of previously recorded deferred financing costs.

See Note 5 to the consolidated financial statements for additional details regarding the Credit Facility and related deferred financing costs.

1 unchanged sentence

Deferred financing costs, net, were $ 912 and $ 1,332 , as of December 31, 2025 and 2024, respectively.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Changes in Accumulated Other Comprehensive Loss by Component

Changes in accumulated other comprehensive loss for the years ended December 31, 2024 and 2023 were as follows:

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Changes in accumulated other comprehensive (loss) income for the years ended December 31, 2025 and 2024 were as follows:

translation Unrealized

1 unchanged sentence

Balance at January 1, 2025 $ ( 120,095 ) $ ( 1,918 ) $ ( 122,013 )

Other comprehensive loss before reclassifications ( 25,839 ) ( 3,700 ) ( 29,539 )

Other comprehensive income before reclassifications 30,995 2,929 33,924

Amounts reclassified from accumulated other comprehensive loss — ( 1,011 ) ( 1,011 )

Net other comprehensive loss, net of tax ( 25,839 ) ( 3,386 ) ( 29,225 )

Net other comprehensive income, net of tax 30,995 1,918 32,913

Balance at December 31, 2025 $ ( 89,100 ) $ — $ ( 89,100 )

Balance at January 1, 2024 $ ( 94,256 ) $ 1,468 $ ( 92,788 )

Other comprehensive income before reclassifications 9,118 1,817 10,935

Other comprehensive loss before reclassifications ( 25,839 ) ( 3,700 ) ( 29,539 )

Amounts reclassified from accumulated other comprehensive loss — 314 314

Net other comprehensive income, net of tax 9,118 1,236 10,354

Net other comprehensive loss, net of tax ( 25,839 ) ( 3,386 ) ( 29,225 )

Balance at December 31, 2024 $ ( 120,095 ) $ ( 1,918 ) $ ( 122,013 )

2 unchanged sentences

Recently Adopted Accounting Standards

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance in ASU 2020-04 provides temporary optional expedient and exceptions to the guidance in U.S.

GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”) (also known as the “reference rate reform”).

The guidance allows companies to elect not to apply certain modification accounting requirements to contracts affected by the reference rate reform, if certain criteria are met.

The guidance also allows companies to elect various optional expedients which would allow them to continue to apply hedge accounting for hedging relationships affected by the reference rate reform, if certain criteria are met.

The new standard was effective upon issuance and generally could have been applied to applicable contract modifications through December 31, 2023.

In February 2022, the Company amended its credit facility to incorporate hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.

The Company has applied the guidance to impacted transactions during the transition period.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, "Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures", which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The updated standard is effective for annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026.

Early adoption is permitted.

We adopted this ASU retrospectively on December 31, 2024.

Refer to Note 13, Segment Reporting for the inclusion of the new required disclosures.

Recently Issued Accounting Standards Not Yet Adopted as of December 31, 2024

In December 2023, the FASB issued ASU No.

4 unchanged sentences

however, retrospective application is permitted.

This ASU will modify the Company's financial statement disclosures, but will not have a significant impact on its consolidated financial statements.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The adoption of this ASU resulted in incremental disclosures in the Company's financial statements.

Recently Issued Accounting Standards Not Yet Adopted as of December 31, 2025

In November 2024, the FASB issued ASU No.

2 unchanged sentences

We are currently evaluating the impact on our annual consolidated financial statement disclosures.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets," which allows entities to use a simplified approach when estimating credit losses for current accounts receivable and contract assets arising from revenue transactions.

The standard update permits consideration of collections after the balance sheet date when estimating expected credit losses, and allows consideration of subsequent collections when estimating credit losses, reducing documentation burden.

The standard is effective for annual and interim periods within annual reporting periods beginning after December 15, 2025.

We are currently evaluating the impact on our annual consolidated financial statements and disclosures.

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," which modernizes guidance on internal-use software costs to reflect current development practices and improve operability.

The standard eliminates the project stages model and replaces with a principles based recognition threshold.

The standard also creates a new capitalization criteria that clarifies capitalization when funding is authorized by management and is probable to be completed and used.

The standard is effective for annual and interim periods within annual reporting periods beginning after December 15, 2027.

We are currently evaluating the impact on our annual consolidated financial statements and disclosures.

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

Hedge Accounting Improvements," to better align hedge accounting with an entity's risk management activities and to address issues arising from reference rate reform.

The update provides greater flexibility in designating hedging relationships and reduces the risk of hedge dedesignation due to minor changes in hedged items.

The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods, with the option to apply retrospectively.

Early adoption is permitted.

We are currently evaluating the impact on our annual consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-10, "Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities," which provides explicit guidance on the accounting for government grants received by business entities.

The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2028, and interim periods within those annual reporting periods, with the option to apply retrospectively.

Early adoption is permitted.

We are currently evaluating the impact on our annual consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270):

Narrow-Scope Improvements," which provides clarifications intended to improve the consistency and usability of interim disclosure requirements and the applicability to Topic 270.

The amendments also provide additional guidance for reporting material events occurring after the most recent annual period.

The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with the option to apply retrospectively.

Early adoption is permitted.

We are currently evaluating the impact on our annual consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-12, "Codification Improvements," which addresses changes to the Codification that clarify, correct and improve the Codification making it easier to understand and apply.

Early adoption is permitted.

We are currently evaluating the impact on our annual consolidated financial statements and disclosures.

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied;

9 unchanged sentences

Shipping and handling costs associated with outbound freight after control over a product is transferred to the customer are accounted for as a fulfillment cost and are included in cost of sales.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Revenue by Reportable Segment

9 unchanged sentences

Our Stoneridge Brazil segment primarily serves the South American region and specializes in the design, manufacture and sale of vehicle tracking devices and monitoring services, driver information systems, vehicle security alarms and convenience accessories, telematics solutions and multimedia devices.

Stoneridge Brazil sells its products through the aftermarket distribution channel, to factory authorized dealer installers, also referred to as original equipment services and directly to OEMs.

Stoneridge Brazil sells its products directly to OEMs, through the aftermarket distribution channel, and to factory authorized dealer installers, also referred to as original equipment services.

In addition, monitoring services and tracking devices are sold directly to corporate customers and individual consumers.

8 unchanged sentences

(1) Company sales based on geographic location are where the sale originates not where the customer is located.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Performance Obligations

13 unchanged sentences

Aftermarket contracts may include variable consideration related to discounts, rebates and extended warranties which are included in the transaction price upon recognizing the product revenue.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

A small portion of the Company’s sales are comprised of monitoring services that include both monitoring devices and fees to individual, corporate, fleet and cargo customers in our Stoneridge Brazil segment.

6 unchanged sentences

The Company had no material contract assets, contract liabilities or capitalized contract acquisition costs as of December 31, 2025 or 2024.

PST Eletrônica Ltda.

The Company had a 74 % controlling interest in Stoneridge Brazil from December 31, 2011 through May 15, 2017.

On May 16, 2017, the Company acquired the remaining 26 % noncontrolling interest in Stoneridge Brazil.

As part of the acquisition agreement, the Company was required to pay additional earn-out consideration based on Stoneridge Brazil’s financial performance in 2021.

The final earn-out consideration of $ 8,272 was paid in the second quarter of 2022.

See Note 10 for the fair value and foreign currency adjustments of the earn-out consideration for the current and prior periods.

Other Investments

3 unchanged sentences

The Company contributed $ 380 , $ 550 and $ 350 to the Autotech Fund II during the years ended December 31, 2025, 2024 and 2023, respectively.

The Company received distributions of $ 8 , $ 0 and $ 0 during the years ended December 31, 2025, 2024 and 2023, respectively.

The Company has a 6.7 % interest in Autotech Fund II.

The Company recognized losses of $ 1,292 , $ 522 and $ 823 during the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recognized (gains) losses of $( 340 ) , $ 1,292 and $ 522 during the years ended December 31, 2025, 2024 and 2023, respectively.

The Autotech Fund II investment recorded in investments and other long-term assets, net in the consolidated balance sheets was $ 8,442 and $ 7,730 as of December 31, 2025 and 2024, respectively.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

2025 December 31,

2 unchanged sentences

Revolving Credit Facility

Credit Facility $ 201,577 $ 189,346 6.56 % November 2026

Suzhou short-term credit line — 2,113

Total debt — 2,113

current portion — ( 2,113 )

Total long-term debt, net $ — $ —

Credit Facility $ 180,942 $ 201,577 7.10 % July 2027

Revolving Credit Facility

1 unchanged sentence

The Fourth Amended and Restated Credit Agreement provided for a $ 300,000 senior secured revolving credit facility.

As a result of entering into the Fourth Amended and Restated Credit Agreement and related amendments, the Company capitalized $ 332 and $ 484 of deferred financing costs during the years ended December 31, 2023 and 2022, respectively.

The Company wrote off a portion of the previously recorded deferred financing costs of $ 365 in interest expense, net during the year ended December 31, 2022.

As a result of entering into the Fourth Amended and Restated Credit Agreement and related amendments, the Company capitalized $ 332 of deferred financing costs during the years ended December 31, 2023.

On November 2, 2023, the Company entered into the Fifth Amended and Restated Credit Agreement (the “Credit Facility”).

The Credit Facility provides for a $ 275,000 senior secured revolving credit facility and it replaced and superseded the Fourth Amended and Restated Credit Agreement.

The Credit Facility provided for a $ 275,000 senior secured revolving credit facility and replaced and superseded the Fourth Amended and Restated Credit Agreement.

The Credit Facility has an accordion feature which allows the Company to increase the availability by up to $ 150,000 upon the satisfaction of certain conditions, including the consent of lenders providing the increase in commitments and also includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility.

The Credit Facility has a termination date of November 2, 2026.

The Credit Facility had a termination date of November 2, 2026.

Borrowings under the Credit Facility bear interest at either the Base Rate or the SOFR rate, at the Company’s option, plus the applicable margin as set forth in the Credit Facility.

1 unchanged sentence

As a result of entering into the Fifth Amended and Restated Credit Agreement, the Company capitalized $ 1,915 of deferred financing costs and wrote off $ 309 of previously recorded deferred financing costs during the year ended December 31, 2023.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The Credit Facility contains customary affirmative covenants and representations.

9 unchanged sentences

• the Company’s aggregate amount of cash and cash equivalents (as defined) cannot exceed $ 70,000 ;

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

• the sale of significant assets (as defined) will require repayment in the amount of any net cash proceeds received and result in the reduction of the Credit Facility commitment, at the lesser of $ 100,000 or the net cash proceeds;

3 unchanged sentences

1 added an additional level to the leverage ratio based pricing grid, through maturity, when the leverage ratio is greater than 3.50 .

Borrowings outstanding on credit facilities were $ 201,577 and $ 189,346 at December 31, 2024 and 2023, respectively.

As a result of Amendment No.

As a result of entering into Amendment No.

1, the Company capitalized $ 561 of deferred financing costs during the year ended December 31, 2025.

On November 5, 2025, the Company entered into Amendment No.

2 to the Fifth Amended and Restated Credit Agreement and Consent Agreement (“Amendment No.

Amendment No.

2 amends the Credit Facility and provides for certain covenant relief and restrictions through the Credit Facility's termination date of November 2, 2026.

Amendment No.

2 supersedes certain terms of the Credit Facility and Amendment No.

1 beginning November 5, 2025 and ending at the Credit Facility's termination date of November 2, 2026.

Amendment No.

2 amends certain Credit Facility terms and provides covenant relief as follows:

• borrowing capacity is reduced from $ 275,000 to $ 225,000 ;

• the sale of the Control Devices business (as defined) is a permitted transaction and upon notice will result in the reduction of the Credit Facility commitment, at the lesser of $ 50,000 or the net cash proceeds of this transaction;

• the current minimum interest coverage ratio of 2.5 was extended through the quarter ending March 31, 2026 and increased to 3.5 for the quarter ended June 30, 2026 and thereafter;

▪ if the Control Devices business sale is consummated, the minimum interest coverage ratio will increase to 3.5 as of the last day of the first full quarter ending after the sale and thereafter;

• the maximum leverage ratio of 4.5 for the quarter ended September 30, 2025 and 3.5 for the quarter ended December 31, 2025 and thereafter remains unchanged.

As a result of entering into Amendment No.2, the Company capitalized $ 216 of deferred financing costs and wrote off $ 192 of previously recorded deferred financing costs during the year ended December 31, 2025.

On January 30, 2026, as a result of the sale of the Control Devices business, the Credit Facility borrowing capacity was reduced from $ 225,000 to $ 175,000 .

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

On March 6, 2026, the Company entered into Amendment No.

3 to the Fifth Amended and Restated Credit Agreement (“Amendment No.

Amendment No.

3 amends and restates the Credit Facility in its entirety beginning December 31, 2025 and ending at the Credit Facility's amended termination date of July 1, 2027.

Amendment No.

3 also provides for certain covenant relief and adjustments to terms and conditions as follows:

• expiration date of the Credit Facility is extended from November 2, 2026 to July 1, 2027;

• the current minimum interest coverage ratio of 2.50 will be reduced to 1.60 for the quarter ended March 31, 2026, 1.70 for the quarter ended June 30, 2026, 1.75 for the quarter ended September 30, 2026 and 2.50 for the quarter ended December 31, 2026 and thereafter;

• the maximum leverage ratio was increased to 3.75 for the quarter ended December 31, 2025, increases to 6.25 for the quarter ended March 31, 2026, 6.75 for the quarter ended June 30, 2026, 6.00 for the quarter ended September 30, 2026 and 4.00 for the quarter ended December 31, 2026 and thereafter;

• on December 31, 2026, the current borrowing capacity of $ 175,000 will be reduced to the lesser of $ 157,500 or the then current Credit Facility commitment;

• modifications to Consolidated EBITDA (as defined);

• modifications and additions to affirmative covenants.

Outstanding Credit Facility borrowings were $ 180,942 and $ 201,577 at December 31, 2025 and 2024, respectively.

As of December 31, 2025, the outstanding Credit Facility borrowings were originally scheduled to mature on November 2, 2026.

Because the contractual maturity was within twelve months of the balance sheet date, the obligation would typically be classified as a current liability.

However, on March 6, 2026, prior to the issuance of these financial statements, the Company entered into Amendment No.

3 which extended the maturity date of the facility to July 1, 2027.

In accordance with the guidance for the classification of short-term obligations expected to be refinanced, the Company has classified the $ 180,942 as long-term debt on the consolidated balance sheets as of December 31, 2025, as the Company demonstrated the intent and ability to refinance the obligation on a long-term basis.

The Company was in compliance with all Credit Facility covenants at December 31, 2025 and 2024.

1 unchanged sentence

The Company’s wholly-owned subsidiary located in Stockholm, Sweden (the "Stockholm subsidiary"), has an overdraft credit line which allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $ 2,174 and $ 1,809 at December 31, 2025 and 2024, respectively.

At December 31, 2024 and December 31, 2023 there were no borrowings outstanding on this overdraft credit line.

At December 31, 2025 and 2024, there were no borrowings outstanding on this overdraft credit line.

During the year ended December 31, 2025, the subsidiary borrowed and repaid 196,154 Swedish krona, or $ 21,323 .

The Stockholm subsidiary has pledged certain of its assets as collateral in order to obtain a guarantee of certain of the Stockholm subsidiary’s obligations to third parties.

The Company’s wholly-owned subsidiary located in Suzhou, China (the "Suzhou subsidiary"), had lines of credit (the “Suzhou credit line”) that allowed up to a maximum borrowing level of 20,000 Chinese yuan, or $ 2,740 and $ 2,818 at December 31, 2024 and 2023, respectively.

At December 31, 2024 and 2023 there was $ 0 and $ 2,113 , respectively, in borrowings outstanding on the Suzhou credit line.

The Suzhou credit line was included on the consolidated balance sheet within current portion of debt.

In addition, the Suzhou subsidiary had a bank acceptance draft line of credit that expired in October 2024 which facilitated the extension of trade payable payment terms by 180 days.

The bank acceptance draft line of credit allowed up to a maximum borrowing level of 60,000 Chinese yuan, or $ 8,453 at December 31, 2023.

The Company’s wholly-owned subsidiary located in Suzhou, China (the "Suzhou subsidiary"), has lines of credit (the “Suzhou credit line”) that allow up to a maximum borrowing level of 50,000 Chinese yuan, or $ 7,150 at December 31, 2025 and 20,000 Chinese yuan, or $ 2,740 at December 31, 2024.

At December 31, 2025 and 2024 there were no borrowings outstanding on the Suzhou credit line.

In addition, the Suzhou subsidiary had a bank acceptance draft line of credit which facilitates the extension of trade payable payment terms by 180 days.

The bank acceptance draft line of credit allows up to a maximum borrowing level of 30,000 Chinese yuan, or $ 4,290 at December 31, 2025.

There was $ 0 utilized on the Suzhou bank acceptance draft line of credit at December 31, 2025.

The Suzhou bank acceptance draft line of credit was included on the consolidated balance sheet within accounts payable.

At December 31, 2024, the future maturities of the Credit Facility were as follows:

At December 31, 2025, as amended, the future maturities of the Credit Facility were as follows:

Year ended December 31,

19 unchanged sentences

Foreign 1,753 ( 1,761 ) ( 1,775 )

Total deferred benefit ( 5,742 ) ( 4,038 ) ( 5,110 )

Total deferred provision (benefit) 37,079 ( 5,742 ) ( 4,038 )

Total income tax provision $ 47,383 $ 2,927 $ 3,261

A summary of the differences between the statutory federal income tax rate of 21.0% and the consolidated provision for income taxes is shown below.

Effective January 1, 2025, the Company adopted ASU 2023 ‑ 09, Improvements to Income Tax Disclosures, on a prospective basis.

In accordance with the categories required under the new standard, the following table presents the reconciliation of the provision for income taxes computed at the U.S.

federal statutory income tax rate of 21% to the Company’s consolidated provision for income taxes:

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Year ended December 31, 2025

Benefit for income taxes at U.S.

federal statutory income tax rate $ ( 11,645 ) 21.0 %

Domestic federal tax effects

Effect of cross-border tax laws

Global intangible low-taxed income, net of foreign tax credit 7,202 ( 13.0 )

Foreign deemed income inclusions (Subpart F) 999 ( 1.8 )

Other ( 439 ) 0.8

Other ( 343 ) 0.6

Nontaxable and nondeductible items

Compensation and benefits 750 ( 1.4 )

Other 276 ( 0.4 )

Changes in valuation allowance 44,091 ( 79.5 )

Domestic state and local income taxes, net of federal effect (1)

1,754 ( 3.2 )

Other reconciling items ( 3 ) —

Foreign tax effects

Foreign tax rate differential 853 ( 1.5 )

Research credits ( 1,244 ) 2.3

Valuation allowance ( 2,439 ) 4.4

Other ( 410 ) 0.7

Withholding taxes 2,305 ( 4.2 )

Other ( 147 ) 0.3

Foreign tax rate differential ( 1,326 ) 2.4

Unremitted earnings of foreign subsidiaries 4,956 ( 9.0 )

Unremitted earnings of foreign subsidiaries 900 ( 1.6 )

Other jurisdictions 1,432 ( 2.6 )

Global changes in unrecognized tax benefits ( 146 ) 0.3

Consolidated provision for income taxes $ 47,383 ( 85.4 ) %

(1) Michigan contributes to the majority of this tax effect.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

A summary of the differences between the statutory federal income tax rate of 21.0% and the consolidated provision for income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 is shown below.

Year ended December 31, 2024 2023

Statutory U.S.

7 unchanged sentences

Tax reserves and audit adjustments 4,054 —

Tax impact of unconsolidated subsidiaries — — 395

Unremitted earnings on foreign subsidiaries ( 22 ) —

3 unchanged sentences

Provision for income taxes $ 2,927 $ 3,261

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Significant components of the Company’s deferred tax assets and liabilities were as follows:

18 unchanged sentences

Right-of-use-assets ( 1,985 ) ( 2,148 )

Unremitted earnings on foreign subsidiaries ( 5,869 ) —

Other ( 7,477 ) ( 3,943 )

Gross deferred tax liabilities ( 22,346 ) ( 13,435 )

Net deferred tax assets $ 32,149 $ 23,168

Net deferred tax (liabilities) assets $ ( 5,504 ) $ 32,149

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The balance sheet classification of our net deferred tax asset is shown below:

2 unchanged sentences

Long-term deferred tax liabilities ( 9,972 ) ( 5,321 )

Net deferred tax assets $ 32,149 $ 23,168

Net deferred tax (liabilities) assets $ ( 5,504 ) $ 32,149

The Company has recognized deferred taxes related to the expected foreign currency impact upon repatriation from foreign subsidiaries not considered indefinitely reinvested.

At December 31, 2024, the aggregate undistributed earnings of our foreign subsidiaries amounted to $ 35,670 .

Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at December 31, 2024, a valuation allowance is recorded against certain deferred tax assets based upon the conclusion that it was more likely than not they would not be realized.

Certain deferred tax assets are dependent on future taxable income to be realized.

Taxes of $ 5,869 related to China and Estonia have been accrued on undistributed earnings that are not indefinitely reinvested.

The Company has net operating loss carry forwards of $ 73,874 and $ 73,584 for state and foreign tax jurisdictions, respectively.

3 unchanged sentences

federal general business credits, if unused, begin to expire in 2026, and the state and foreign tax credits expire at various times.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

As of December 31, 2024, the Company has consolidated deferred tax assets of $ 63,216 with a valuation allowance of $ 17,632 principally related to tax credit carryforwards, tax loss carryforwards and other deferred tax assets in Sweden, Brazil, and the US.

The Company has considered historical pre-tax income or loss and the four sources of income in determining the need for a valuation allowance when the realization of its deferred tax assets are not more likely than not.

The four sources of income considered are 1.) taxable income in prior carryback years where carryback is allowable, 2.) future reversals of existing temporary differences, 3.) consideration of reasonable and prudent tax planning strategies, and 4.) forecasts of future taxable income, exclusive of reversing temporary differences and carryforwards.

In the cases where a valuation allowance has been recorded, the evidence described above did not result in a conclusion that the deferred tax assets are more likely than not to be realizable.

As of December 31, 2025, the Company has consolidated deferred tax assets of $ 76,796 offset by a valuation allowance of $ 59,954 .

The deferred tax assets principally related to tax credit carryforwards, tax loss carryforwards and other deferred tax assets in Sweden, Brazil, and the US.

In evaluating the realizability of its deferred tax assets, the Company considered historical pre ‑ tax income or loss along with the four sources of taxable income outlined in ASC 740.

These include taxable income available in carryback periods where permitted, the anticipated future reversal of existing temporary differences, reasonable and prudent tax ‑ planning strategies available to generate taxable income, and forecasts of future taxable income exclusive of the effects of reversing temporary differences and carryforwards.

Based on this analysis, the Company concluded that, in instances where a valuation allowance has been recorded, the weight of the available evidence does not support a determination that the deferred tax assets are more likely than not to be realizable.

Current and future provision for income taxes is significantly impacted by the initial recognition of and changes in valuation allowances.

The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized.

The Company is significantly impacted by the GILTI tax provisions of the US tax code, and should those provisions change, it could have a material impact on our assessment of the realizability of general business credits in the US for which we currently believe are more likely than not to be realized based on the considerations noted above.

As a result, both the current and future income tax provisions are significantly affected by the initial recognition of valuation allowances and any subsequent changes to them.

During the year ended December 31, 2025, the Company reassessed the realizability of its U.S.

federal and state deferred tax assets, including tax credit carryforwards, and deductible temporary differences.

After evaluating both positive and negative evidence under ASC 740, including cumulative U.S.

pretax losses in recent years, limited objectively verifiable sources of future taxable income, and projected near ‑ term operating losses, management concluded that U.S.

deferred tax assets are not more likely than not to be realized.

Accordingly, the Company recorded a valuation allowance of $ 46,976 against its U.S.

federal and state deferred tax assets as of December 31, 2025.

The allowance primarily relates to tax credit carryforwards and other deferred tax assets.

The following is a reconciliation of the Company’s total gross unrecognized tax benefits:

12 unchanged sentences

The Company recognized interest and penalties of $( 34 ), $ 34 and $ 0 for the years ended December 31, 2025, 2024 and 2023, respectively.

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022 ("IRA"), which, among other things, implemented a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy.

For the years ended December 31, 2024 and 2023, the IRA did not have a material impact on the Company's consolidated financial statements.

STONERIDGE, INC.

19 unchanged sentences

United Kingdom 2024-2025

A summary of income taxes paid, net of refunds, is shown below:

Year ended December 31, 2025

Federal $ ( 346 )

State and local ( 41 )

Netherlands 2,137

All other foreign ( 100 )

Income taxes paid, net of refunds $ 10,337

In July 2025, the 2025 Budget Reconciliation Act, or H.R.

1 (the “Act”), was enacted.

The Act contains a wide range of tax reform measures, including extensions and modifications to several provisions of the Tax Cuts and Jobs Act, as well as expansions of certain incentives under the Inflation Reduction Act while accelerating the phase ‑ out of others.

The legislation includes multiple effective dates, with certain provisions taking effect in 2025 and others beginning in 2026 and beyond.

The Act did not have a material impact on the Company’s 2025 consolidated financial statements and, based on guidance issued to date, is also not expected to have a significant impact on the Company’s 2026 consolidated financial statements.

The Company has various cancelable and noncancelable leased assets within all of our segments, which include certain properties, vehicles and equipment of which are all classified as operating leases.

2 unchanged sentences

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Under Leases (Topic 842), the Company determines an arrangement is a lease when we have the right to control the use of identified property, vehicle or equipment for a period of time in exchange for consideration.

10 unchanged sentences

The Company has made the policy election to account for lease and non-lease components as a single lease component for all of its leases.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The components of lease expense are as follows:

T he components of lease expense are as follows:

Year ended December 31, 2025 2024

9 unchanged sentences

Total leased liabilities $ 13,112 $ 10,476

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Maturities of operating lease liabilities are as follows:

As of December 31, 2025

Thereafter 349

Total future minimum lease payments $ 15,088

12 unchanged sentences

operating lease obligations $ 5,479 $ 3,302

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Share-Based Compensation Plans

In May 2025, the Company’s shareholders approved the 2025 Long-Term Incentive Plan (the “2025 Plan”) and reserved 726,000 Common Shares (of which the maximum number of Common Shares which may be issued).

Under the 2025 Plan, as of December 31, 2025, the Company has issued 129,552 restricted Common Shares.

As of December 31, 2025, none of the shares granted have been forfeited.

There are 596,448 shares available to be granted under the 2025 Plan at December 31, 2025.

In May 2016, the Company’s shareholders approved the 2016 Long-Term Incentive Plan (the “2016 Plan”) and reserved 1,800,000 Common Shares (of which the maximum number of Common Shares which may be issued).

In May 2020, the Company’s shareholders approved an amendment to the 2016 Plan to increase by 1,100,000 the number of Common Shares authorized for issuance.

6 unchanged sentences

The performance-based performance share units vest and are no longer subject to forfeiture upon the recipient remaining an employee of the Company for three years from the date of grant and, for a portion of the annual awards, upon the Company attaining certain targets of performance measured against a peer group’s three year performance in terms of total shareholder return and, for the remaining portion of the annual awards, upon achieving certain earnings per share targets and return on invested capital targets established by the Company during the performance period of the award.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The allocation of performance shares granted between total shareholder return, earnings per share and return on invested capital were as follows for the years ended December 31:

3 unchanged sentences

Return on invested capital — % 18 % 18 %

In 2023, the Company granted retention-based phantom shares to certain employees that vest in June 2025 provided the employee remains employed with the Company.

The phantom shares will settle in cash based on the volume-weighted average closing price of the Company's stock for a 30 day period prior to the vesting date.

As of December 31, 2024, the Company has recorded a liability of $ 897 for the phantom shares which was included on the consolidated balance sheet as a component of accrued expenses and other current liabilities.

In 2023, the Company granted retention-based phantom shares to certain employees that vested in June 2025 for $ 986 .

The phantom shares were settled in cash based on the volume-weighted average closing price of the Company's Common Shares for a 30 day period prior to the vesting date of $ 5.61 .

In 2025, the Company granted time-based and performance-based phantom shares to certain employees that vest in March 2028, provided the employee remains employed with the Company.

The time-based phantom shares will settle in cash based on the Common Share price as of the vesting date and the performance-based phantom shares will be measured upon the Company attaining certain targets of performance measured against a peer group’s three year performance in terms of total shareholder return.

As of December 31, 2025, the Company has recorded a liability of $ 47 for the phantom shares which was included on the consolidated balance sheet as a component of accrued expenses and other long-term liabilities.

In April 2005, the Company adopted the Directors’ Restricted Shares Plan (the “Director Share Plan”) and reserved 500,000 Common Shares for issuance under the Director Share Plan.

5 unchanged sentences

2 to the 2018 Director Share Plan to increase the number of shares for issuance by 200,000 to 1,150,000 .

Under the 2018 Director Share Plan, the Company has cumulatively issued 931,692 restricted Common Shares.

As such, there are 218,308 restricted Common Shares available to be issued on December 31, 2024.

Shares issued annually under the 2018 Director Share Plan are no longer subject to forfeiture one year after the date of grant.

In December 2025, the Company terminated the 2018 Director Share Plan, and no further grants may be made pursuant to that plan.

Under the 2018 Director Share Plan, the Company cumulatively issued 1,011,692 restricted Common Shares.

Shares issued annually under the 2018 Director Share Plan were no longer subject to forfeiture one year after the date of grant.

Share Units and Performance Shares

39 unchanged sentences

As noted above, the Company has issued and outstanding performance-based share units that use different performance targets (total shareholder return, earnings per share and return on invested capital).

The excess tax deficiency (benefit) realized from the vesting of share units and performance shares of the share-based payment arrangements was $ 248 , $ 230 and $ 543 for the years ended December 31, 2024, 2023 and 2022, respectively.

The excess tax deficiency realized from the vesting of share units and performance shares of the share-based payment arrangements was $ 475 , $ 248 and $ 230 for the years ended December 31, 2025, 2024 and 2023, respectively.

Employee Benefit Plans

13 unchanged sentences

Derivative Instruments and Hedging Activities

On December 31, 2024, the Company had open Mexican peso-denominated foreign currency forward contracts.

During 2025, the Company had Mexican peso-denominated foreign currency forward contracts.

The Company used foreign currency forward contracts solely for hedging and not for speculative purposes during 2025 and 2024.

Management believes that its use of these instruments to reduce risk is in the Company’s best interest.

The counterparties to these financial instruments are financial institutions with investment grade credit ratings.

Management believes that its use of these instruments to reduce risk was in the Company’s best interest.

The counterparties to these financial instruments were financial institutions with investment grade credit ratings.

Foreign Currency Exchange Rate Risk

The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk.

The Company uses derivative financial instruments as cash flow hedges and used net investment hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.

Net Investment Hedges

During 2021, the Company entered into two cross-currency swaps, designated as net investment hedges, with notional values of $ 25,000 each that were scheduled to mature in August 2026 and August 2028.

These swaps hedged a portion of the net investment in a certain euro-denominated subsidiary.

As a result of favorable market conditions during 2022 the Company unwound the two net investment hedges and recognized a net gain of $ 3,716 , which was recorded on the Company’s consolidated balance sheet in accumulated other comprehensive loss.

The cash received from the settlement of these swaps of $ 3,820 was classified in investing activities in the consolidated statement of cash flows.

The Company elected to assess hedge effectiveness of the net investment hedges under the spot method.

Accordingly, periodic changes in the fair value of the derivative instruments attributable to factors other than spot exchange rate variability were excluded from the measurement of hedge ineffectiveness and reported directly in earnings each reporting period.

The change in fair value of these derivative instruments was recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the consolidated balance sheets.

The Company had no outstanding net investment hedges as of December 31, 2024 or 2023.

The Company uses derivative financial instruments as cash flow hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, labor costs and other foreign currency exposures.

Cash Flow Hedges

The Company entered into foreign currency forward contracts to hedge the Mexican peso currency in 2025 and 2024.

These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges.

These forward contracts were executed to hedge forecasted transactions and have been designated and accounted for as cash flow hedges.

As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive loss, to the extent that hedges are effective, until the underlying transactions are recognized in earnings.

2 unchanged sentences

The effectiveness of the transactions has been and will be measured on an ongoing basis using regression analysis and forecasted future purchases of the currency.

In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges and, therefore, are marked-to-market with gains and losses recognized in the Company’s consolidated statements of operations as a component of other (income) expense, net.

During 2024 and 2023, all of the Company’s foreign currency forward contracts were designated as cash flow hedges.

The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows:

Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges

The Company holds Mexican peso-denominated foreign currency forward contracts which expire ratably on a monthly basis from January 2025 to December 2025.

The notional amounts at December 31, 2024 and 2023 related to Mexican peso-denominated foreign currency forward contracts were $ 32,339 and $ 26,613 , respectively.

The Company evaluated the effectiveness of the Mexican peso-denominated foreign currency forward contracts held as of December 31, 2024 and the year then ended, and concluded that the hedges were highly effective.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The Company held Mexican peso-denominated foreign currency forward contracts which expired ratably on a monthly basis from January 2025 to December 2025 .

The notional amounts at December 31, 2025 and 2024 related to Mexican peso-denominated foreign currency forward contracts were $ 0 and $ 32,339 .

The Company evaluated the effectiveness of the Mexican peso-denominated foreign currency forward contracts held during the year ended December 31, 2025 and concluded that the hedges were highly effective.

Interest Rate Risk

5 unchanged sentences

The Swap agreement required monthly settlements on the same days that the Fourth Amended and Restated Credit Agreement interest payments were due and had a maturity date of March 10, 2023, which was prior to the Fourth Amended and Restated Credit Agreement maturity date of June 4, 2024.

Under the Swap terms, the Company paid a fixed interest rate and received a floating interest rate based on the one-month LIBOR, with a floor.

Under the Swap terms, the Company paid a fixed interest rate and received a floating interest rate based on the one-month London Inter-Bank Offered Rate ("LIBOR") with a floor.

The critical terms of the Swap were aligned with the terms of the Fourth Amended and Restated Credit Agreement , resulting in no hedge ineffectiveness.

The difference between amounts to be received and paid under the Swap were recognized as a component of interest expense, net on the consolidated statements of operations.

The swap settlements reduced interest expense, net by $ 290 and $ 156 for the years ended December 31, 2023 and 2022, respectively.

The swap settlements reduced interest expense, net by $ 290 for the year ended December 31, 2023.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

The notional amounts and fair values of derivative instruments in the consolidated balance sheets were as follows:

9 unchanged sentences

Gross amounts recorded for the cash flow hedges in other comprehensive (loss) income and in net loss for the years ended December 31 were as follows:

(Loss) gain recorded in other

comprehensive (loss) income (Loss) gain reclassified from other

Gain (loss) recorded in other

comprehensive (loss) income Gain (loss) reclassified from other

comprehensive (loss) income into net loss (A)

3 unchanged sentences

Interest rate swap $ — $ — $ ( 4 ) $ — $ — $ 290

Derivatives designated as net investment hedges:

Cross-currency swaps $ — $ — $ 2,446 $ — $ — $ —

_____________________________

(A) (Losses) gains reclassified from comprehensive (loss) income into net loss recognized in COGS in the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 were $( 350 ), $ 337 and $ 1,572 , respectively.

(Losses) gains reclassified from other comprehensive (loss) income into net loss recognized in SG&A in the consolidated statements of operations were $( 47 ), $ 109 and $ 504 for the years ended December 31, 2024, 2023 and 2022, respectively.

Gains reclassified from other comprehensive (loss) income into net loss recognized in interest expense, net in the consolidated statements of operations were $ 0 , $ 290 and $ 156 for the years ended December 31, 2024, 2023 and 2022, respectively.

(A) Gain (losses) reclassified from other comprehensive (loss) income into net loss recognized in COGS in the consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023 were $ 765 , $( 350 ) and $ 337 , respectively.

Gains (losses) reclassified from other comprehensive income (loss) into net loss recognized in SG&A in the consolidated statements of operations were $ 515 , $( 47 ) and $ 109 for the years ended December 31, 2025, 2024 and 2023, respectively.

Gains reclassified from other comprehensive income (loss) into net loss recognized in interest expense, net in the consolidated statements of operations were $ 0 , $ 0 and $ 290 for the years ended December 31, 2025, 2024 and 2023, respectively.

Cash flows from derivatives used to manage foreign exchange and interest rate risks are classified as operating activities within the consolidated statements of cash flows.

The Company has measured the ineffectiveness of the forward currency contracts and any amounts recognized in the consolidated financial statements were immaterial for the years ended December 31, 2025, 2024 and 2023.

STONERIDGE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data, unless otherwise indicated)

Fair Value Measurements

11 unchanged sentences

inputs Level 3

Financial assets carried at fair value:

Forward currency contracts $ — $ — $ — $ — $ 1,858

Total financial assets carried at fair value $ — $ — $ — $ — $ 1,858

Financial liabilities carried at fair value:

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Total financial liabilities carried at fair value $ — $ — $ — $ — $ 2,429

The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis.

Balance at January 1 $ 7,351

Change in fair value —

Foreign currency adjustments 921

Earn-out consideration cash payment $ ( 8,272 )

Balance at December 31 $ —

The Company was required to pay the Stoneridge Brazil earn-out consideration based on Stoneridge Brazil’s financial performance in 2021.

The earn-out consideration obligation of $ 8,272 was paid in April 2022 and recorded in the consolidated statement of cash flows within operating and financing activities in the amounts of $ 1,996 and $ 6,276 , respectively, for the year ended December 31, 2022.

There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the year ended December 31, 2025.

No non-recurring fair value adjustments were required for nonfinancial assets for the years ended December 31, 2024 and 2023.

Impairment of Long-Lived Assets or Finite-Lived Assets

The Company reviews the carrying value of its long-lived assets and finite-lived intangible assets for impairment when events or circumstances indicate that their carrying value may not be recoverable.

Factors the Company considers important that could trigger testing of the related asset groups for an impairment include current period operating or cash flow losses combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing losses, significant adverse changes in the business climate within a particular business or current expectations that a long-lived asset will be sold or otherwise disposed of significantly before the end of its estimated useful life.

To test for impairment, the estimated undiscounted cash flows expected to be generated from the use and disposal of the asset or asset group is compared to its carrying value.

An asset group is established by identifying the lowest level of cash flows generated by the group of assets that are largely independent of cash flows of other assets.

If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment has occurred for the group of assets for which we can identify projected cash flows.

If these undiscounted cash flows are less than their respective carrying values,

STONERIDGE, INC.

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(in thousands, except share and per share data, unless otherwise indicated)

an impairment charge would be recognized to the extent that the carrying values exceed estimated fair values.

The estimation of undiscounted cash flows and fair value requires us to make assumptions regarding future operating results over the life of the asset or the life of the primary asset in the asset group.

The results of the impairment testing are dependent on these estimates which require judgment.

The occurrence of certain events, including changes in economic and competitive conditions, could impact cash flows eventually realized and management’s ability to accurately assess whether an asset is impaired.

No non-recurring fair value adjustments, other than the Control Devices impairment which is disclosed in Note 2, were required for nonfinancial assets for the years ended December 31, 2025 and 2024.

Refer to Note 2 of the consolidated financial statements for details regarding our review of long-lived or finite-lived assets for impairment, including the Control Devices impairment.

Commitments and Contingencies

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Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on its consolidated results of operations or financial position.

The Company denies responsibility for these claims.

Based on our review of the technical and legal merits, we believe these warranty claims lack substantive merit and are significantly overstated.

The Company continues to vigorously defend this matter in private arbitration.

While no assurances can be made as to the ultimate outcome of this matter, or any other future claims, we do not currently believe a material loss is probable.

An arbitration hearing was held in the first quarter of 2026 in which the claimant sought approximately $ 41,000 in direct warranty damages plus additional reputational damage;

a resolution is expected by the end of the year.

As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at the site.

The Company engaged an environmental engineering consultant to assess the level of contamination and to develop a remediation and monitoring plan for the site.

Soil remediation at the site was completed during the year ended December 31, 2010.

A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in the fourth quarter of 2015.

Soil remediation at the site was completed during 2010.

A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in 2015.

During the years ended December 31, 2025, 2024 and 2023, the Company recognized expense of $ 0 , $ 157 and $ 125 , respectively, related to ground water remediation.

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Although the Company sold the Sarasota facility and related property in December 2011, the liability to remediate the site contamination remains the responsibility of the Company.

Due to the ongoing site remediation, the Company is currently required to maintain a $ 1,489 letter of credit for the benefit of the buyer.

Due to the ongoing site remediation, the Company is currently required to maintain a $ 1,489 letter of credit for the benefit of the Sarasota facility buyer.

The Company’s Stoneridge Brazil subsidiary has civil, labor, environmental and other tax contingencies (excluding income tax) for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company which is supported by legal advisors in Brazil.

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3,751 2,333 2,862

Stoneridge Brazil (C)

Unallocated Corporate (D)

Unallocated Corporate (C)

1,960 59 1,137

Total business realignment charges $ 6,419 $ 2,642 $ 4,510

_____________________________

(A) Severance costs for the year ended December 31, 2024 related to COGS were $ 250 .

(A) Severance costs for the year ended December 31, 2025 related to COGS, SG&A and D&D were $ 507 , $ 26 and $ 175 , respectively.

Severance costs for the year ended December 31, 2024 related to COGS were $ 250 .

Severance costs for the year ended December 31, 2023 related to COGS and SG&A were $ 369 and $ 142 , respectively.

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Severance costs for the year ended December 31, 2024 related to COGS, SG&A and D&D were $ 327 , $ 458 and $ 1,548 , respectively.

(D) Severance related costs for the year ended December 31, 2024 related to SG&A were $ 59 .

Severance related costs for the year ended December 31, 2023 related to SG&A and D&D were $ 1,122 and 15 , respectively.

Severance costs for the year ended December 31, 2023 related to COGS, SG&A and D&D were $ 423 , $ 2,057 and $ 382 respectively.

(C) Severance related costs for the year ended December 31, 2025 related to SG&A and D&D were $ 1,519 and $ 441 , respectively.

Severance related costs for the year ended December 31, 2024 related to SG&A were $ 59 .

Severance related costs for the year ended December 31, 2023 related to SG&A and D&D were $ 1,122 and $ 15 , respectively.

Business realignment charges classified by statement of operations line item were as follows:

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Subsequent Events

Sale of Control Devices

On January 30, 2026 (the “Closing Date”, “Closing”), the Company and certain of its subsidiaries entered into a Stock Purchase Agreement (“Purchase Agreement”) with Control Devices Acquisition, LLC, a Delaware limited liability company, an affiliate of Center Rock Capital Partners, L.P.

(“Buyer”), pursuant to which the Company sold, on the Closing Date, its Control Devices business segment (the “Business”) via the sale of the Company’s interests in its former wholly-owned subsidiaries, Stoneridge Control Devices, Inc.

(“Control Devices”), Stoneridge Asia Holdings Ltd., Stoneridge Asia Pacific Electronics (Suzhou) Co.

(“Stoneridge Suzhou” and such sale, the “Sale”).

The purchase price paid to the Company was $ 59,000 and was subject to customary post-closing adjustments.

The Company expects to incur a loss on disposal of $ 15,000 to $ 20,000 in January 2026.

The loss on disposal excludes the impact of the $ 21,628 impairment of fixed assets charge recognized in the fourth quarter of 2025.

Refer to Note 2 of the consolidated financial statements for details regarding our review of the Control Devices assets for impairment.

The strategic review of the Control Devices business did not meet the criteria for classifying the Control Devices segment as held for sale as of December 31, 2025.

As such, the consolidated financial statements include the Control Devices segment in continuing operations for all periods presented.

Mexico Manufacturing Agreement:

Simultaneously with the Closing, Stoneridge Electronics and Control Devices entered into a Mexico Manufacturing Agreement pursuant to which Stoneridge Electronics will continue manufacturing certain products for Control Devices through its Mexico-based maquiladora using machinery and tools transferred to Control Devices under the Purchase Agreement.

The Mexico Manufacturing Agreement has an initial three-year term and automatically renews for successive one-year periods unless either Stoneridge Electronics or Control Devices provides written notice of non-renewal at least twelve months prior to the expiration of the then-current term.

Product pricing under the Mexico Manufacturing Agreement is fixed for the initial three-year term.

Following the initial three-year term, product pricing will be adjusted annually based on the Mexico Consumer Price Index, with any such adjustment shared equally between Stoneridge Electronics and Control Devices.

Under the Mexico Manufacturing Agreement, Control Devices is responsible for payment of materials costs, the product price and certain other costs incurred outside the ordinary course of manufacturing and fulfillment.

China Manufacturing Agreement:

Simultaneously with the Closing, Stoneridge Suzhou and Stoneridge Electronics AS entered into a China Manufacturing Agreement pursuant to which Stoneridge Suzhou will continue manufacturing certain products for the Company’s Electronics business segment at the facility in Suzhou, China transferred to Control Devices under the Purchase Agreement.

The China Manufacturing Agreement has an initial twelve ( 12 ) month term and will automatically extend for an additional six months unless Stoneridge Electronics AS provides written notice of termination at least thirty ( 30 ) days prior to the end of the initial term.

Manufacturing costs under the China Manufacturing Agreement are expected to be based on Stoneridge Suzhou’s actual costs, consistent with the historical cost structure used at the facility in Suzhou, China.

Under the China Manufacturing Agreement Stoneridge Electronics AS is responsible for payment of materials costs, shipping costs, manufacturing costs and any excluded costs approved by Stoneridge Electronics AS in writing.

A fixed USD/RMB exchange rate applies for the first six ( 6 ) months following the Closing, with adjustments every three ( 3 ) months thereafter.

Credit Facility Amendment

On February 26, 2025, the Company entered into Amendment No.

On March 6, 2026, the Company entered into Amendment No.

3 to the Credit Facility.

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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