10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission file number:  001-04743

Standard Motor Products, Inc.

(Exact name of registrant as specified in its charter)

New York	11-1362020
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

37-18 Northern Blvd., Long Island City, New York	11101
(Address of principal executive offices)	(Zip Code)

(718) 392-0200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $2.00 per share	SMP	New York Stock Exchange LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ☑	Accelerated Filer ☐
Non-Accelerated Filer   ☐	Smaller reporting company   ☐
Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐     No ☑

As of the close of business on July 28, 2023, there were 21,725,967 outstanding shares of the registrant’s Common Stock, par value $2.00 per share.

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

INDEX

PART I - FINANCIAL INFORMATION

		Page No.
Item 1.	Consolidated Financial Statements:	3
	Consolidated Statements of Operations (Unaudited) for the Three Months and Six Months Ended June 30, 2023 and 2022	3
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months and Six Months Ended June 30, 2023 and 2022	4
	Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	5
	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2023 and 2022	6
	Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three Months and Six Months Ended June 30, 2023 and 2022	7
	Notes to Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 6.	Exhibits	44
Signatures		45

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except share and per share data)	2023			2022			2023			2022
	(Unaudited)						(Unaudited)
Net sales	$	353,075		$	359,412		$	681,103		$	682,243
Cost of sales		251,806			263,061			488,567			496,052
Gross profit		101,269			96,351			192,536			186,191
Selling, general and administrative expenses		73,843			68,468			143,476			131,352
Restructuring and integration expenses		294			3			1,206			44
Other income, net		46			13			70			13
Operating income		27,178			27,893			47,924			54,808
Other non-operating income, net		802			1,927			1,027			3,376
Interest expense		3,283			1,821			7,145			2,626
Earnings from continuing operations before taxes		24,697			27,999			41,806			55,558
Provision for income taxes		6,289			7,122			10,661			14,127
Earnings from continuing operations		18,408			20,877			31,145			41,431
Loss from discontinued operations, net of income taxes		(9,221	)		(1,666	)		(10,001	)		(2,782	)
Net earnings		9,187			19,211			21,144			38,649
Net earnings attributable to noncontrolling interest		50			85			89			77
Net earnings attributable to SMP (a)	$	9,137		$	19,126		$	21,055		$	38,572
Net earnings attributable to SMP
Earnings from continuing operations	$	18,358		$	20,792		$	31,056		$	41,354
Discontinued operations		(9,221	)		(1,666	)		(10,001	)		(2,782	)
Total	$	9,137		$	19,126		$	21,055		$	38,572
Per share data attributable to SMP
Net earnings per common share – Basic:
Earnings from continuing operations	$	0.85		$	0.96		$	1.43		$	1.89
Discontinued operations		(0.43	)		(0.08	)		(0.46	)		(0.13	)
Net earnings per common share – Basic	$	0.42		$	0.88		$	0.97		$	1.76
Net earnings per common share – Diluted:
Earnings from continuing operations	$	0.83		$	0.93		$	1.40		$	1.85
Discontinued operations		(0.42	)		(0.07	)		(0.45	)		(0.13	)
Net earnings per common share – Diluted	$	0.41		$	0.86		$	0.95		$	1.72
Dividend declared per share	$	0.29		$	0.27		$	0.58		$	0.54
Average number of common shares		21,689,067			21,757,998			21,649,562			21,867,644
Average number of common shares and dilutive common shares		22,183,489			22,255,642			22,139,708			22,372,702

(a) Throughout this Form 10Q, “SMP” refers to Standard Motor Products, Inc. and subsidiaries.

See accompanying notes to consolidated financial statements (unaudited).

3

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2023			2022			2023			2022
	(Unaudited)						(Unaudited)
Net earnings	$	9,187		$	19,211		$	21,144		$	38,649
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		1,166			(6,528	)		3,986			(7,166	)
Derivative instruments		1,831			105			454			105
Pension and postretirement plans		(4	)		(4	)		(7	)		(9	)
Total other comprehensive income, net of tax		2,993			(6,427	)		4,433			(7,070	)
Total Comprehensive income		12,180			12,784			25,577			31,579
Comprehensive income (loss) attributable to noncontrolling interest, net of tax:
Net earnings		50			85			89			77
Foreign currency translation adjustments		(81	)		(64	)		(110	)		(61	)
Comprehensive income (loss) attributable to noncontrolling interest, net of tax		(31	)		21			(21	)		16
Comprehensive income attributable to SMP	$	12,211		$	12,763		$	25,598		$	31,563

See accompanying notes to consolidated financial statements (unaudited).

4

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)	June 30, 2023			December 31, 2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	23,019		$	21,150
Accounts receivable, less allowances for discounts and expected credit losses of $5,757 and $5,375 for 2023 and 2022, respectively		218,105			167,638
Inventories		499,134			528,715
Unreturned customer inventories		19,722			19,695
Prepaid expenses and other current assets		27,903			25,241
Total current assets		787,883			762,439
Property, plant and equipment, net of accumulated depreciation of $250,382 and $239,176 for 2023 and 2022, respectively		107,590			107,148
Operating lease right-of-use assets		73,093			49,838
Goodwill		132,391			132,087
Other intangibles, net		96,291			100,504
Deferred income taxes		33,905			33,658
Investments in unconsolidated affiliates		41,557			41,745
Other assets		29,435			27,510
Total assets	$	1,302,145		$	1,254,929
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of revolving credit facility	$	53,700		$	50,000
Current portion of term loan and other debt		5,028			5,031
Accounts payable		94,657			89,247
Sundry payables and accrued expenses		59,126			49,990
Accrued customer returns		43,664			37,169
Accrued core liability		20,187			22,952
Accrued rebates		43,781			37,381
Payroll and commissions		28,346			31,361
Total current liabilities		348,489			323,131
Long-term debt		164,488			184,589
Noncurrent operating lease liabilities		64,271			40,709
Other accrued liabilities		24,917			22,157
Accrued asbestos liabilities		59,565			63,305
Total liabilities		661,730			633,891
Commitments and contingencies
Stockholders’ equity:
Common stock – par value $2.00 per share:
Authorized – 30,000,000 shares; issued 23,936,036 shares		47,872			47,872
Capital in excess of par value		106,529			105,615
Retained earnings		572,753			564,242
Accumulated other comprehensive income		(7,927	)		(12,470	)
Treasury stock – at cost (2,210,069 shares and 2,350,377 shares in 2023 and 2022, respectively)		(89,554	)		(95,239	)
Total SMP stockholders’ equity		629,673			610,020
Noncontrolling interest		10,742			11,018
Total stockholders’ equity		640,415			621,038
Total liabilities and stockholders’ equity	$	1,302,145		$	1,254,929

See accompanying notes to consolidated financial statements (unaudited).

5

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)	Six Months Ended June 30,
	2023			2022
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	21,144		$	38,649
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		14,129			13,893
Amortization of deferred financing cost		248			164
Increase (decrease) to allowance for expected credit losses		204			(253	)
Increase to inventory reserves		1,600			2,959
Equity income from joint ventures		(943	)		(2,524	)
Employee stock ownership plan allocation		1,483			1,148
Stock-based compensation		3,633			4,465
(Increase) decrease in deferred income taxes		(390	)		2,090
Loss on discontinued operations, net of tax		10,001			2,782
Change in assets and liabilities:
Increase in accounts receivable		(48,271	)		(49,659	)
(Increase) decrease in inventories		30,924			(87,744	)
Increase in prepaid expenses and other current assets		(468	)		(7,102	)
Increase in accounts payable		4,323			1,591
Increase (decrease) in sundry payables and accrued expenses		2,776			(5,020	)
Net change in other assets and liabilities		(1,023	)		(10,772	)
Net cash provided by (used in) operating activities		39,370			(95,333	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(9,507	)		(13,203	)
Other investing activities		66			—
Net cash used in investing activities		(9,441	)		(13,203	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the term loan		—			100,000
Repayments of term loan		(2,500	)		—
Net borrowings (repayments) under revolving credit facilities		(14,000	)		39,202
Net borrowings (repayments) of other debt and lease obligations		(47	)		117
Purchase of treasury stock		—			(25,605	)
Payments of debt issuance costs		—			(2,128	)
Increase in overdraft balances		258			1,903
Dividends paid		(12,544	)		(11,822	)
Dividends paid to noncontrolling interest		(255	)		—
Net cash provided by (used in) financing activities		(29,088	)		101,667
Effect of exchange rate changes on cash		1,028			(700	)
Net increase (decrease) in cash and cash equivalents		1,869			(7,569	)
CASH AND CASH EQUIVALENTS at beginning of period		21,150			21,755
CASH AND CASH EQUIVALENTS at end of period	$	23,019		$	14,186
Supplemental disclosure of cash flow information: Cash paid during the period for:
Interest	$	7,694		$	2,219
Income taxes	$	9,356		$	18,897

See accompanying notes to consolidated financial statements (unaudited).

6

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2023

(Unaudited)

(In thousands)	Common Stock		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total SMP			Non- Controlling Interest			Total
Balance at March 31, 2023	$	47,872	$	106,675		$	569,899		$	(11,001	)	$	(91,801	)	$	621,644		$	11,028		$	632,672
Net earnings		—		—			9,137			—			—			9,137			50			9,187
Other comprehensive income, net of tax		—		—			—			3,074			—			3,074			(81	)		2,993
Cash dividends paid		—		—			(6,283	)		—			—			(6,283	)		—			(6,283	)
Dividends paid to noncontrolling interest		—		—			—			—			—			—			(255	)		(255	)
Stock-based compensation		—		(146	)		—			—			2,247			2,101			—			2,101
Balance at June 30, 2023	$	47,872	$	106,529		$	572,753		$	(7,927	)	$	(89,554	)	$	629,673		$	10,742		$	640,415

Three Months Ended June 30, 2022

(Unaudited)

(In thousands)	Common Stock		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total SMP			Non- Controlling Interest			Total
Balance at March 31, 2022	$	47,872	$	107,606	$	545,830		$	(8,815	)	$	(80,622	)	$	611,871		$	11,042		$	622,913
Net earnings		—		—		19,126			—			—			19,126			85			19,211
Other comprehensive income, net of tax		—		—		—			(6,363	)		—			(6,363	)		(64	)		(6,427	)
Cash dividends paid		—		—		(5,887	)		—			—			(5,887	)		—			(5,887	)
Purchase of treasury stock		—		—		—			—			(19,646	)		(19,646	)		—			(19,646	)
Stock-based compensation		—		1,511		—			—			974			2,485			—			2,485
Balance at June 30, 2022	$	47,872	$	109,117	$	559,069		$	(15,178	)	$	(99,294	)	$	601,586		$	11,063		$	612,649

See accompanying notes to consolidated financial statements (unaudited).

7

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2023

(Unaudited)

(In thousands)	Common Stock		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total SMP			Non- Controlling Interest			Total
Balance at December 31, 2022	$	47,872	$	105,615	$	564,242		$	(12,470	)	$	(95,239	)	$	610,020		$	11,018		$	621,038
Net earnings		—		—		21,055			—			—			21,055			89			21,144
Other comprehensive income, net of tax		—		—		—			4,543			—			4,543			(110	)		4,433
Cash dividends paid		—		—		(12,544	)		—			—			(12,544	)		—			(12,544	)
Dividends paid to   noncontrolling interest		—		—		—			—			—			—			(255	)		(255	)
Stock-based compensation		—		898		—			—			2,735			3,633			—			3,633
Employee Stock Ownership Plan		—		16		—			—			2,950			2,966			—			2,966
Balance at June 30, 2023	$	47,872	$	106,529	$	572,753		$	(7,927	)	$	(89,554	)	$	629,673		$	10,742		$	640,415

Six Months Ended June 30, 2022

(Unaudited)

(In thousands)	Common Stock		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total SMP			Non- Controlling Interest			Total
Balance at December 31, 2021	$	47,872	$	105,377	$	532,319		$	(8,169	)	$	(75,819	)	$	601,580		$	11,047		$	612,627
Net earnings		—		—		38,572			—			—			38,572			77			38,649
Other comprehensive income, net of tax		—		—		—			(7,009	)		—			(7,009	)		(61	)		(7,070	)
Cash dividends paid		—		—		(11,822	)		—			—			(11,822	)		—			(11,822	)
Purchase of treasury stock		—		—		—			—			(26,496	)		(26,496	)		—			(26,496	)
Stock-based compensation		—		3,371		—			—			1,094			4,465			—			4,465
Employee Stock Ownership Plan		—		369		—			—			1,927			2,296			—			2,296
Balance at June 30, 2022	$	47,872	$	109,117	$	559,069		$	(15,178	)	$	(99,294	)	$	601,586		$	11,063		$	612,649

See accompanying notes to consolidated financial statements (unaudited).

8

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1.   Basis of Presentation

Standard Motor Products, Inc. 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 custom-engineered solutions for vehicle control and thermal management categories in diversified end markets.  We sell our products primarily to automotive aftermarket 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.

The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.  The unaudited consolidated financial statements include our accounts and all domestic and international companies in which we have more than a 50% equity ownership, except in instances where the minority shareholder maintains substantive participating rights, in which case we follow the equity method of accounting.  In instances where we have more than a 50% equity ownership and the minority shareholder does not maintain substantive participating rights, our consolidated financial statements include the accounts of the company on a consolidated basis with its net income and equity reported at amounts attributable to both our equity position and that of the noncontrolling interest.  Investments in unconsolidated affiliates are accounted for on the equity method, as we do not have a controlling financial interest but have the ability to exercise significant influence.  All significant inter-company items have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.

Reclassification

Certain prior period amounts in the accompanying consolidated financial statements and related notes have been reclassified to conform to the 2023 presentation.

Reportable Segments

Beginning on January 1, 2023, we reorganized our business into three operating segments – Engineered Solutions, Vehicle Control and Temperature Control. The new operating segment structure provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment, better aligns our operating segments with our strategic focus on diversification, and provides greater transparency into our positioning to capture growth opportunities in the future.  Prior period segment results have been reclassified to conform to our operating segment reorganization. For additional information related to our segment reorganization, see Note 7, “Goodwill and Acquired Intangible Assets,” Note 16, “Industry Segments,” and Note 17, “Net Sales.”

9

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 2.   Summary of Significant Accounting Policies

The preparation of consolidated annual and quarterly financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.  We have made a number of estimates and assumptions in the preparation of these consolidated financial statements.  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, Russia’s invasion of the Ukraine and resultant sanctions imposed by the U.S. and other governments, the geo-political impact of U.S. relations with China, 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.  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.

There have been no material changes to our critical accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Issued Accounting Pronouncements

Standards that are not yet adopted as of June 30, 2023

There are no recently issued accounting pronouncements that have not been adopted as of June 30, 2023 that could have a material impact on our financial statements.

Note 3.   Business Acquisitions and Investments

2022 Increase in Equity Investment

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”) for approximately $5.1 million. CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China. We determined, at that time, that due to a lack of a voting majority and other qualitative factors, we do not control the operations of CYJ and accordingly, our investment in CYJ would be accounted for under the equity method of accounting.

In October 2022, we acquired an additional 3.55% equity interest in CYJ for RMB 1.7 million (approximately $242,000), increasing our minority ownership interest in CYJ from an approximate interest of 29% to 33%. The additional acquired ownership interest in CYJ was paid for in cash funded by borrowings under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent.  We will continue to account for our minority interest in CYJ using the equity method of accounting.

10

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

2022 Business Acquisitions

Acquisition of Capital Stock of Kade Trading GmbH (“Kade”)

In October 2022, we acquired 100% of the capital stock of Kade Trading GmbH (“Kade”) headquartered in Glinde, Germany for Euros 2.7 million (approximately $2.7 million) plus a Euros 0.5 million (approximately $0.5 million) earn-out based upon Kade’s performance in 2024 and 2025.  Kade is a supplier across Europe of mobile temperature control components to commercial vehicle, passenger car and specialty equipment markets and has been a distributor of products from our joint ventures including electric compressors, hose assemblies and receiver dryers, with annual sales of approximately $6 million. The acquired Kade business, reported as part of our Engineered Solutions segment, was paid for with cash.

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):

Purchase price				$	3,176
Assets acquired and liabilities assumed:
Receivables	$	790
Inventory		829
Other current assets (1)		1,003
Property, plant and equipment, net		63
Operating lease right-of-use assets		401
Intangible assets		2,395
Goodwill		766
Current liabilities		(1,977	)
Noncurrent operating lease liabilities		(328	)
Deferred income taxes		(766	)
Net assets acquired				$	3,176

(1) The other current assets balance includes $1 million of cash acquired.

Intangible assets acquired of $2.4 million consist of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 15 years.

Incremental revenues from the acquired Kade business included in our consolidated statement of operations for the three months and six months ended June 30, 2023 were $1.7 million and $3.4 million, respectively.

Note 4.   Restructuring and Integration Expenses

The aggregated liabilities included in “sundry payables and accrued expenses” and “other accrued liabilities” in the consolidated balance sheet relating to the restructuring and integration activities as of June 30, 2023 and December 31, 2022 and for the six months ended June 30, 2023, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2022	$	1,521		$	—		$	1,521
Restructuring and integration costs:
Amounts provided for during 2023 (1)		969			237			1,206
Cash payments		(800	)		(237	)		(1,037	)
Foreign currency exchange rate changes		20			—			20
Exit activity liability at June 30, 2023	$	1,710		$	—		$	1,710

(1) Restructuring and integration expenses incurred during the six months ended June 30, 2023 consist of $0.4 million in our Vehicle Control segment, $0.7 million in our Temperature Control segment and $0.1 million in our Engineered Solutions segment.

11

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Restructuring Costs

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

Restructuring expenses related to the Cost Reduction Initiative of approximately $1.2 million were incurred during the six months ended June 30, 2023 consisting of (1) expenses of approximately $1 million of employee severance and bonuses related to our product line relocations, and (2) expenses of approximately $0.2 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Cash payments made of approximately $1 million during the six months ended June 30, 2023 consisted primarily of severance payments related to the sales force reduction.  Additional restructuring costs related to the initiative, and expected to be incurred, are approximately $1.6 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of 2023.

Note 5.   Sale of Receivables

We are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions.  We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt.  Under the terms of the agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale.  As such, these transactions are being accounted for as a sale.

Pursuant to these agreements, we sold $211.6 million and $382.5 million of receivables during the three months and six months ended June 30, 2023, respectively, and $218.4 million and $374.1 million for the comparable periods in 2022.  Receivables presented at financial institutions and not yet collected as of June 30, 2023 were approximately $10.7 million and remained in our accounts receivable balance as of that date. There were no receivables presented at financial institutions and not yet collected as of December 31, 2022. 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 $12.4 million and $21.5 million related to the sale of receivables was included in selling, general and administrative expense in our consolidated statements of operations for the three months and six months ended June 30, 2023, respectively, and $7.7 million and $11.2 million for the comparable periods in 2022.

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, or delays or failures in collecting trade accounts receivable. The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each arrangement. 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.

12

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 6.   Inventories

Inventories, which are stated at the lower of cost (determined by means of the first-in, first-out method) and net realizable value, consist of the following:

	June 30, 2023		December 31, 2022
	(In thousands)
Finished goods	$	300,430	$	324,362
Work in process		16,126		14,099
Raw materials		182,578		190,254
Subtotal		499,134		528,715
Unreturned customer inventories		19,722		19,695
Total inventories	$	518,856	$	548,410

Note 7.   Goodwill and Acquired Intangible Assets

Goodwill

In connection with our operating segment reorganization, 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 allocation 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.

Acquired Intangible Assets

Acquired identifiable intangible assets consist of the following:

	June 30, 2023			December 31, 2022
	(In thousands)
Customer relationships	$	159,448		$	158,717
Patents, developed technology and intellectual property		14,123			14,123
Trademarks and trade names		8,880			8,880
Non-compete agreements		3,291			3,282
Supply agreements		800			800
Leaseholds		160			160
Total acquired intangible assets		186,702			185,962
Less accumulated amortization (1)		(91,756	)		(86,945	)
Net acquired intangible assets	$	94,946		$	99,017

(1) Applies to all intangible assets, except for trademarks and trade names totaling $2.6 million, which have indefinite useful lives and, as such, are not being amortized.

Total amortization expense for acquired intangible assets was $2.1 million and $4.3 million for the three months and six months ended June 30, 2023, respectively, and $2.2 million and $4.3 million for the comparable periods in 2022.  Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $4.2 million for the remainder of 2023, $8.4 million in 2024, $8.4 million in 2025, $8.4 million in 2026 and $62.9 million in the aggregate for the years 2027 through 2041.

13

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 8.   Leases

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 eleven 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 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.

The following tables provide quantitative disclosures related to our operating leases and include all operating leases acquired from the date of acquisition (in thousands):

Balance Sheet Information	June 30, 2023			December 31, 2022
Assets
Operating lease right-of-use assets	$	73,093		$	49,838
Liabilities
Sundry payables and accrued expenses	$	11,883		$	10,763
Noncurrent operating lease liabilities		64,271			40,709
Total operating lease liabilities	$	76,154		$	51,472
Weighted Average Remaining Lease Term
Operating leases	8.3 Years			7 Years
Weighted Average Discount Rate
Operating leases		4.4	%		3.7	%

Expense and Cash Flow Information	Three Months Ended June 30,
	2023		2022
Lease Expense
Operating lease expense (a)	$	3,776	$	2,711

	Six Months Ended June 30,
	2023		2022
Lease Expense
Operating lease expense (a)	$	6,885	$	5,541
Supplemental Cash Flow Information
Cash paid for the amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,476	$	5,397
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases (b)	$	30,830	$	4,458

(a) Excludes expenses of approximately $0.4 million and $1.1 million for the three and six months ended June 30, 2023, respectively, and approximately $0.7 million and $1.1 million for the comparable periods in 2022, respectively, related 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 is not material.

(b) Includes $27.8 million of right-of-use assets related to the lease modification and extension for our distribution center and office in Lewisville, Texas during the six months ended June 30, 2023.

14

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Minimum Lease Payments

At June 30, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

2023	$	5,861
2024		12,899
2025		11,194
2026		9,892
2027		8,867
Thereafter		44,929
Total lease payments	$	93,642
Less: Interest		(17,488	)
Present value of lease liabilities	$	76,154

In May 2023, we signed a lease for a new distribution facility in Shawnee, Kansas with a commencement date of July 1, 2023, and a lease termination date of November 30, 2033.  The lease covers a building of 574,932 square feet.  Base rent is approximately $3 million per annum beginning on December 1, 2023 increasing 3% per annum each year thereafter, plus approximately $0.5 million for taxes and maintenance commencing on July 1, 2023.  The expected right-of-use asset related to the lease is approximately $26.1 million.  Balance sheet lease accounting and rent expense will be recorded beginning on July 1, 2023, the lease commencement date.

Note 9.   Credit Facilities and Long-Term Debt

Total debt outstanding is summarized as follows:

	June 30, 2023		December 31, 2022
	(In thousands)
Credit facility – term loan due 2027	$	95,000	$	97,500
Credit facility – revolver due 2027		128,000		142,000
Other		216		120
Total debt	$	223,216	$	239,620
Current maturities of debt	$	58,728	$	55,031
Long-term debt		164,488		184,589
Total debt	$	223,216	$	239,620

Term Loan and Revolving Credit Facility

In June 2022, the Company entered into a new Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders (the “Credit Agreement”).  The Credit Agreement provides for a $500 million credit facility comprised of a $100 million term loan facility (the “term loan”) and a $400 million multi-currency revolving credit facility available in U.S. Dollars, Euros, Sterling, Swiss Francs, Canadian Dollars and other currencies as agreed to by the administrative agent and the lenders (the “revolving facility”). The Credit Agreement replaces and refinances the 2015 Credit Agreement.

15

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Borrowings under the Credit Agreement were used to repay all outstanding borrowings under the 2015 Credit Agreement, and pay certain fees and expenses incurred in connection with the Credit Agreement, with future borrowings used for other general corporate purposes of the Company and its subsidiaries.  The term loan amortizes in quarterly installments of 1.25% in each of the first four years, and quarterly installments of 2.5% in the fifth year of the Credit Agreement.  The revolving facility has a $25 million sub-limit for the issuance of letters of credit and a $25 million sub-limit for the borrowing of swingline loans.  The maturity date is June 1, 2027.  The Company may request up to two one-year extensions of the maturity date.

The Company may, upon the agreement of one or more then existing lenders or of additional financial institutions not currently party to the Credit Agreement, increase the revolving facility commitments or obtain incremental term loans by an aggregate amount not to exceed (x) the greater of (i) $168 million or (ii) 100% of consolidated EBITDA (as defined in the Credit Agreement) for the four fiscal quarters ended most recently before such date, plus (y) the amount of any voluntary prepayment of term loans, plus (z) an unlimited amount so long as, immediately after giving effect thereto, the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 2.5 to 1.0.

Term loan and revolver facility borrowings in U.S. Dollars bear interest, at the Company’s election, at a rate per annum equal to Term SOFR plus 0.10% plus an applicable margin, or an alternate base rate plus an applicable margin, where the alternate base rate is the greater of the prime rate, the federal funds effective rate plus 0.50%, and one-month Term SOFR plus 0.10% plus 1.00%. Term loan borrowings were made at one-month Term SOFR. The applicable margin for the term benchmark borrowings ranges from 1.0% to 2.0%, and the applicable margin for alternate base rate borrowings ranges from 0% to 1.0%, in each case, based on the total net leverage ratio of the Company and its restricted subsidiaries.  The Company may select interest periods of one, three or six months for Term SOFR borrowings.  Interest is payable at the end of the selected interest period, but no less frequently than quarterly.

The Company’s obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries (each, a “Guarantor”), and secured by a first priority perfected security interest in substantially all of the existing and future personal property of the Company and each Guarantor, subject to certain exceptions.  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.  Concurrently with the Company’s entry into the Credit Agreement, the Company also entered into a seven year interest rate swap agreement with Wells Fargo Bank, N.A., Co-Syndication Agent and lender under the Credit Agreement, on $100 million of borrowings under the Credit Agreement. The interest rate swap agreement matures in May 2029.

Outstanding borrowings at June 30, 2023 under the Credit Agreement were $223 million, consisting of current borrowings of $58.7 million and long-term debt of $164.3 million; while outstanding borrowings at December 31, 2022 were $239.5 million, consisting of current borrowings of $55 million and long-term debt of $184.5 million.  Letters of credit outstanding under the Credit Agreement were $2.4 million at both June 30, 2023 and December 31, 2022.

At June 30, 2023, the weighted average interest rate under our Credit Agreement was 5.6%, which consisted of $223 million in borrowings under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of borrowings.  At December 31, 2022, the weighted average interest rate under our Credit Agreement was 5.2%, which consisted of $237 million in borrowings at 5.2% under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of borrowings, and an alternative base rate borrowing of $2.5 million at 8%.  During the six months ended June 30, 2023, our average daily alternative base rate loan balance was $0.2 million, compared to a balance of $10.8 million for the six months ended June 30, 2022 and a balance of $5.6 million for the year ended December 31, 2022.

16

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

The 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 Credit Agreement also contains customary events of default.

Polish Overdraft Facility

In October 2022, 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 under the facility in Euros and U.S. Dollars. Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.3 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit (approximately $6.2 million) if borrowings are in Euros and/or U.S. Dollars. The overdraft facility has an initial maturity date in December 2022, 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. Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.5% for borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.5% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.75% 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 June 30, 2023 and December 31, 2022.

Maturities of Debt

As of June 30, 2023, maturities of debt through 2027, assuming no prepayments, are as follows (in thousands):

	Revolving Credit Facility			Term Loan Facility			Polish Overdraft Facility and Other Debt			Total
Remainder of 2023	$	—		$	2,500		$	14		$	2,514
2024		—			5,000			28			5,028
2025		—			5,000			30			5,030
2026		—			7,500			46			7,546
2027		128,000			75,000			98			203,098
Total	$	128,000		$	95,000		$	216		$	223,216
Less: current maturities		(53,700	)		(5,000	)		(28	)		(58,728	)
Long-term debt	$	74,300		$	90,000		$	188		$	164,488

Deferred Financing Costs

We have deferred financing costs of approximately $1.8 million and $2.1 million as of June 30, 2023 and December 31, 2022, respectively.  Deferred financing costs are related to our term loan and revolving credit facilities. Deferred financing costs as of June 30, 2023, assuming no prepayments, are being amortized in the amounts of $0.2 million for the remainder of 2023, $0.5 million in 2024, $0.5 million in 2025, $0.5 million in 2026 and $0.1 million in 2027.

17

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 10.  Accumulated Other Comprehensive Income

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

	Three Months Ended June 30, 2023
	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at March 31, 2023  attributable to SMP	$	(13,481	)	$	34		$	2,446			$	(11,001	)
Other comprehensive income before reclassifications		1,247			—			2,262		(1)		3,509
Amounts reclassified from accumulated other comprehensive income		—			(4	)		(431	)			(435	)
Other comprehensive income, net		1,247			(4	)		1,831				3,074
Balance at June 30, 2023 attributable to SMP	$	(12,234	)	$	30		$	4,277			$	(7,927	)

	Six Months Ended June 30, 2023
	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at December 31, 2022 attributable to SMP	$	(16,330	)	$	37		$	3,823			$	(12,470	)
Other comprehensive income before reclassifications		4,096			—			1,223		(1)		5,319
Amounts reclassified from accumulated other comprehensive income		—			(7	)		(769	)			(776	)
Other comprehensive income, net		4,096			(7	)		454				4,543
Balance at June 30, 2023 attributable to SMP	$	(12,234	)	$	30		$	4,277			$	(7,927	)

(1) Consists of the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $3.1 million ($2.3 million, net of tax) and $1.6 million ($1.2 million, net of tax) in the three months and six months ended June 30, 2023, respectively, net of cash settlements payments of $0.6 million ($0.4 million, net of tax) and $1 million ($0.8 million, net of tax) in the three months and six months ended June 30, 2023, respectively.

Reclassifications Out of Accumulated Other Comprehensive Income (in thousands)

	Three Months Ended			Six Months Ended
Details About Accumulated Other Comprehensive Income Components	June 30, 2023			June 30, 2023
Derivative cash flow hedge:
Unrecognized gain (loss) (1)	$	(583	)	$	(1,039	)
Postretirement Benefit Plans:
Unrecognized gain (loss) (2)		(5	)		(11	)
Total before income tax		(588	)		(1,050	)
Income tax expense		(153	)		(274	)
Total reclassifications attributable to SMP	$	(435	)	$	(776	)

(1) 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.

(2) 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, net in our consolidated statements of operations (see Note 12, “Employee Benefits,” for additional information).

18

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 11.  Stock-Based Compensation Plans

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 cost is recognized in the consolidated statement of operations over the period during which an employee is required to provide service in exchange for the award.

Restricted and Performance Stock Grants

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 under the Amended and Restated 2016 Omnibus Incentive Plan (“Plan”).  Shares issued under the Plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the Plan.

As part of the Plan, we currently grant shares of restricted stock to eligible employees and our independent directors and performance-based shares 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 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 60 and 63, and become fully vested on or within approximately two months of an executive reaching the age 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 no earlier than three years after the date of grant.  Each period we evaluate the probability of achieving the applicable targets, and we 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 on our evaluation of historical and expected future turnover.

Our restricted and performance-based share activity was as follows for the six months ended June 30, 2023:

	Shares			Weighted Average Grant Date Fair Value Per Share
Balance at December 31, 2022		880,829		$	31.79
Granted		6,000			31.63
Vested		(56,978	)		32.37
Forfeited		(3,875	)		40.12
Balance at June 30, 2023		825,976		$	31.76

We recorded compensation expense related to restricted shares and performance-based shares of $3.2 million ($2.4 million, net of tax) and $3.9 million ($2.9 million, net of tax) for the six months ended June 30, 2023 and 2022, respectively. The unamortized compensation expense related to our restricted and performance-based shares was $11.2 million at June 30, 2023, and is expected to be recognized as they vest over a weighted average period of 4 years and 0.83 years for employees and directors, respectively.

19

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 12.  Employee Benefits

We provide certain medical and dental care benefits to 14 former U.S. union employees. The postretirement medical and dental benefit obligation to the former union employees as of June 30, 2023, and the related net periodic benefit cost for the plan for the three and six months ended June 30, 2023 and 2022 were not material.

We maintain a defined contribution Supplemental Executive Retirement Plan for key employees.  Under the plan, these employees may elect to defer a portion of their compensation and, in addition, we may at our discretion make contributions to the plan on behalf of the employees.  In March 2023, we made company contributions to the plan of $0.8 million related to calendar year 2022.

We also have an Employee Stock Ownership Plan 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 share until they are committed to be released.  The trustees will vote the shares in accordance with their fiduciary duties.  During the six months ended June 30, 2023, we contributed to the trust an additional 72,800 shares from our treasury and released 72,800 shares from the trust leaving 200 shares remaining in the trust as of June 30, 2023.

Note 13.  Derivative Financial Instruments

Interest Rate Swap Agreements

We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings. The principal financial instruments used for cash flow hedging purposes are interest rate swap agreements. The interest rate swaps effectively convert a portion of our variable rate borrowings under our existing facilities to a fixed rate based upon determined notional amount. We do not enter into interest rate swap agreements, or other financial instruments, for trading or speculative purposes.

In June 2022, we entered into a seven year interest rate swap agreement with a notional amount of $100 million that is to mature in May 2029.  The interest rate swap agreement has been designated as a cash flow hedge of interest payments on $100 million of borrowings under our 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 upon a fixed rate of 2.683% per annum, adjusted upward for the credit spread adjustment in the Credit Agreement of 0.10% and the loan margin in the Credit Agreement of 1.50% at June 30, 2023.

The fair value of the interest rate swap agreement as of June 30, 2023 and December 31, 2022 was an asset of $5.8 million and $5.2 million, respectively, which has been deferred and recorded in accumulated other comprehensive income, net of income taxes, in our consolidated balance sheet. When the interest expense on the underlying borrowing is recognized, the deferred gain/loss in accumulated other comprehensive income is recorded in earnings as interest expense in the consolidated statements of operations. We plan to perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 14.  Fair Value Measurements

We follow a three-level fair value hierarchy that prioritizes the inputs to measure fair value.  This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.”  The three levels of inputs used to measure fair value are as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect assumptions that market participants would use in pricing an asset or liability.

The following is a summary of the estimated fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments at June 30, 2023 and December 31, 2022 (in thousands):

		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Cash and cash equivalents	LEVEL 1	$	23,019	$	23,019	$	21,150	$	21,150
Deferred compensation	LEVEL 1		23,104		23,104		20,190		20,190
Short term borrowings	LEVEL 1		58,728		58,728		55,031		55,031
Long-term debt	LEVEL 1		164,488		164,488		184,589		184,589
Cash flow interest rate swap	LEVEL 2		5,786		5,786		5,174		5,174

The carrying value of cash and cash equivalents approximates fair value due to the short maturity of those investments.  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.

21

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 15.  Earnings Per Share

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 per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net Earnings Attributable to SMP -
Earnings from continuing operations	$	18,358		$	20,792		$	31,056		$	41,354
Loss from discontinued operations		(9,221	)		(1,666	)		(10,001	)		(2,782	)
Net earnings attributable to SMP	$	9,137		$	19,126		$	21,055		$	38,572
Basic Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	0.85		$	0.96		$	1.43		$	1.89
Loss from discontinued operations per common share		(0.43	)		(0.08	)		(0.46	)		(0.13	)
Net earnings per common share attributable to SMP	$	0.42		$	0.88		$	0.97		$	1.76
Weighted average common shares outstanding		21,689			21,758			21,650			21,868
Diluted Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	0.83		$	0.93		$	1.40		$	1.85
Loss from discontinued operations per common share		(0.42	)		(0.07	)		(0.45	)		(0.13	)
Net earnings per common share attributable to SMP	$	0.41		$	0.86		$	0.95		$	1.72
Weighted average common shares outstanding		21,689			21,758			21,650			21,868
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock and performance-based stock		494			498			490			505
Weighted average common shares outstanding – Diluted		22,183			22,256			22,140			22,373

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):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Restricted and performance-based shares		273		268		286		262

22

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Note 16.  Industry Segments

Beginning on January 1, 2023, we reorganized our business into three operating segments – Engineered Solutions, Vehicle Control and Temperature Control. The new operating segment structure provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment, better aligns our operating segments with our strategic focus on diversification, and provides greater transparency into our positioning to capture growth opportunities in the future.

Engineered Solutions is a new operating segment created by carving out all non-aftermarket business from our prior Engine Management and Temperature Control operating segments.  Our Engineered Solutions segment supplies 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.

Vehicle Control is the new name for our Engine Management operating segment.  It includes our core aftermarket business after carving out all non-aftermarket business to our Engineered Solutions operating segment.  The Vehicle Control operating segment includes sales from ignition, emissions, and fuel delivery, electrical and safety, and wire sets and other product categories.

Temperature Control is our ongoing operating segment, after the carve out of all non-aftermarket business to our Engineered Solutions operating segment, that derives its sales from air conditioning system components and other thermal product categories.  Our Temperature Control operating segment is poised to benefit from the broader adoption of air conditioning and other thermal systems.

The following tables show our net sales and operating income for each reportable operating segment (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Net Sales (a)
Vehicle Control	$	183,789		$	185,771		$	368,366		$	363,035
Temperature Control		97,074			105,637			169,480			178,695
Engineered Solutions		72,212			68,004			143,257			140,513
Other		—			—			—			—
Consolidated	$	353,075		$	359,412		$	681,103		$	682,243
Operating Income
Vehicle Control	$	19,273		$	16,059		$	36,648		$	36,403
Temperature Control		5,800			10,523			7,884			14,685
Engineered Solutions		6,163			5,109			11,810			11,397
Other		(4,058	)		(3,798	)		(8,418	)		(7,677	)
Consolidated	$	27,178		$	27,893		$	47,924		$	54,808

(a) There are no intersegment sales among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

For the disaggregation of our net sales from contracts with customers by major product group and geographic area within each of our operating segments, see Note 17, “Net Sales.”

Note 17.  Net Sales

Disaggregation of Net Sales

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.

Major Product Group

The Vehicle Control operating segment generates its revenues from core aftermarket sales of ignition, emissions, and fuel delivery, electrical and safety, and wire sets and other product categories.  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.

23

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

The following table summarizes consolidated net sales by major product group within each operating segment for the three months and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	113,589	$	111,581	$	229,672	$	220,730
Electrical and Safety		52,867		57,054		104,671		109,311
Wire Sets and Other		17,333		17,136		34,023		32,994
Total Vehicle Control		183,789		185,771		368,366		363,035
Temperature Control
AC System Components		74,449		81,608		120,201		128,982
Other Thermal Components		22,625		24,029		49,279		49,713
Total Temperature Control		97,074		105,637		169,480		178,695
Engineered Solutions
Commercial Vehicle		26,742		19,503		46,599		40,954
Construction/Agriculture		8,103		11,222		20,898		22,206
Light Vehicle		23,548		23,039		46,514		49,114
All Other		13,819		14,240		29,246		28,239
Total Engineered Solutions		72,212		68,004		143,257		140,513
Other		—		—		—		—
Total	$	353,075	$	359,412	$	681,103	$	682,243

Geographic Area

We sell our line of products primarily in the United States, with additional sales in Canada, Mexico, Europe, Asia and Latin America.  Sales are attributed to countries based upon the location of the customer.  Our sales are substantially denominated in U.S. dollars.

The following tables provide disaggregation of net sales information by geographic area within each operating segment for the three months and six months ended June 30, 2023 and 2022 (in thousands):

Three months ended June 30, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	165,198	$	92,099	$	44,565	$	—	$	301,862
Canada		8,834		4,926		6,126		—		19,886
Europe		248		—		14,914		—		15,162
Mexico		8,179		18		2,038		—		10,235
Asia		88		—		4,273		—		4,361
Other foreign		1,242		31		296		—		1,569
Total	$	183,789	$	97,074	$	72,212	$	—	$	353,075

24

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Three months ended June 30, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	171,083	$	101,204	$	50,311	$	—	$	322,598
Canada		7,205		4,089		3,943		—		15,237
Europe		176		20		10,251		—		10,447
Mexico		6,000		105		666		—		6,771
Asia		78		21		2,565		—		2,664
Other foreign		1,229		198		268		—		1,695
Total	$	185,771	$	105,637	$	68,004	$	—	$	359,412

Six months ended June 30, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	331,610	$	161,670	$	88,771	$	—	$	582,051
Canada		17,164		7,681		11,364		—		36,209
Europe		446		—		29,998		—		30,444
Mexico		16,766		18		3,806		—		20,590
Asia		150		20		8,327		—		8,497
Other foreign		2,230		91		991		—		3,312
Total	$	368,366	$	169,480	$	143,257	$	—	$	681,103

Six months ended June 30, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	332,154	$	170,516	$	97,200	$	—	$	599,870
Canada		15,913		7,588		7,445		—		30,946
Europe		368		35		21,581		—		21,984
Mexico		12,083		189		2,290		—		14,562
Asia		158		43		10,966		—		11,167
Other foreign		2,359		324		1,031		—		3,714
Total	$	363,035	$	178,695	$	140,513	$	—	$	682,243

Note 18.  Commitments and Contingencies

Asbestos

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.  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. In accordance with the related purchase agreement, we agreed to assume the liabilities for all new claims filed on or after September 2001. Our ultimate exposure will depend upon the number of claims filed against us on or after September 2001, and the amounts paid for settlements, awards of asbestos-related damages, and defense of such claims. At June 30, 2023, approximately 1,465 cases were outstanding for which we may be responsible for any related liabilities.  Since inception in September 2001 through June 30, 2023, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $68.3 million.  We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.

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.  As is our accounting policy, we consider the advice of actuarial consultants with experience in assessing asbestos-related liabilities to estimate our potential claim liability; and perform an actuarial evaluation in the third quarter of each year and whenever events or changes in circumstances indicate that additional provisions may be necessary.  The methodology used to project asbestos-related liabilities and costs in our actuarial study considered: (1) historical data available from publicly available studies; (2) an analysis of our recent claims history to estimate likely filing rates into the future; (3) an analysis of our currently pending claims; (4) an analysis of our settlements and awards of asbestos-related damages to date; and (5) an analysis of closed claims with pay ratios and lag patterns in order to develop average future settlement values.  Based on the information contained in the actuarial study and all other available information considered by us, we have concluded that no amount within the range of settlement payments and awards of asbestos-related damages was more likely than any other and, therefore, in assessing our asbestos liability we compare the low end of the range to our recorded liability to determine if an adjustment is required.

25

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

In accordance with our policy to perform an annual actuarial evaluation in the third quarter of each year, an actuarial study was performed as of August 31, 2022.  The results of the August 31, 2022 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $68.8 million to $111.6 million for the period through 2065.  The change from the prior year study, which was as of August 31,2021, was a $7.9 million increase for the low end of the range and an $11.4 million increase for the high end of the range.  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, 2022 actuarial study, in September 2022 we increased our asbestos liability to $68.8 million, the low end of the range, and recorded an incremental pre-tax provision of $18.5 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, 2022 study, to range from $53.2 million to $105.7 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 $4.5 million and $9.5 million for the six months ended June 30, 2023 and 2022, 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. Given the uncertainties associated with projecting such matters into the future and other factors outside our control, we can give no assurance that additional provisions will not be required. We will continue to monitor events and changes in circumstances surrounding these potential liabilities in determining whether to perform additional actuarial evaluations and whether additional provisions may be necessary.  At the present time, however, we do not believe that any additional provisions would be reasonably likely to have a material adverse effect on our liquidity or consolidated financial position.

Other Litigation

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.  On May 11, 2023, we were found liable for approximately $11 million.  Although it is expected that the Court will finalize its judgment by the end of the third quarter of 2023, we recorded a pre-tax provision of $11 million in earnings (loss) from discontinued operations in the accompanying statement of operations in the second quarter of 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.  Although these legal claims and legal proceedings are subject to inherent uncertainties, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the ultimate outcome of these matters will not, either individually or in the aggregate, have a material adverse effect on our business, financial condition or results of operations.  We may at any time determine that settling any of these matters is in our best interests, which settlement may include substantial payments.  Although we cannot currently predict the specific amount of any liability that may ultimately arise with respect to any of these matters, we will record provisions when the liability is considered probable and reasonably estimable.  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. Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

26

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Warranties

We generally warrant our products against certain manufacturing and other defects.  These product warranties are provided for specific periods of time of the product depending on the nature of the product.  As of June 30, 2023 and 2022, we have accrued $23.6 million and $23.8 million, respectively, for estimated product warranty claims included in accrued customer returns.  The accrued product warranty costs are based primarily on historical experience of actual warranty claims.

The following table provides the changes in our product warranties (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Balance, beginning of period	$	20,600		$	20,711		$	19,667		$	17,463
Liabilities accrued for current year sales		30,047			30,295			55,840			52,921
Settlements of warranty claims		(27,061	)		(27,240	)		(51,921	)		(46,618	)
Balance, end of period	$	23,586		$	23,766		$	23,586		$	23,766

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements in this Report are indicated by words such as “anticipates,” “expects,” “believes,” “intends,” “plans,” “estimates,” “projects,” “strategies” and similar expressions. These statements represent our expectations based on current information and assumptions and are inherently subject to risks and uncertainties.  Our actual results could differ materially from those which are anticipated or projected as a result of certain risks and uncertainties, including, but not limited to, changes or loss in business relationships with our major customers and in the timing, size and continuation of our customers’ programs; changes in our supply chain financing arrangements, such as changes in terms, termination of contracts and/or the impact of rising interest rates; the ability of our customers to achieve their projected sales; competitive product and pricing pressures; increases in production or material costs, including procurement costs resulting from higher tariffs, and inflationary cost increases in raw materials, labor and transportation, that cannot be recouped in product pricing; the performance of the aftermarket, non-aftermarket, industrial equipment and original equipment markets; changes in the product mix and distribution channel mix; economic and market conditions; successful integration of acquired businesses; our ability to achieve benefits from our cost savings initiatives; product liability and environmental matters (including, without limitation, those related to asbestos-related contingent liabilities and remediation costs at certain properties); the effects of a widespread public health crisis, including the coronavirus (COVID-19) pandemic; the effects of disruptions in the supply chain; Russia’s invasion of the Ukraine and resultant sanctions imposed by the U.S. and other governments; the geo-political impact of U.S. relations with China; climate-related risks, such as physical and transition risks; as well as other risks and uncertainties, such as those described under Risk Factors, Quantitative and Qualitative Disclosures About Market Risk and those detailed herein and from time to time in the filings of the Company with the SEC. Forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. In addition, historical information should not be considered as an indicator of future performance.  The following discussion should be read in conjunction with the unaudited consolidated financial statements, including the notes thereto, included elsewhere in this Report.

Overview

With over 100 years in business, we are a leader in the industries we serve and a trusted partner for all of our stakeholders.  We manufacture and distribute premium replacement parts for our customers in the automotive aftermarket, while providing customized solutions for vehicle control and thermal management products in diversified end markets represented by our Engineered Solutions segment.  We are a global manufacturer with over 6,000 employees (inclusive of temporary and joint venture employees) across nearly 39 manufacturing, distribution and engineering facilities and offices located in North America, Europe and Asia.  We sell our products primarily to automotive aftermarket 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.

Beginning on January 1, 2023, we reorganized our business into three operating segments – Engineered Solutions, Vehicle Control and Temperature Control.

Engineered Solutions is a new operating segment created by carving out all non-aftermarket business from our prior Engine Management and Temperature Control operating segments, which will now solely reflect parts sales to aftermarket channels.  Our Engineered Solutions segment supplies 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, and is expected to provide a platform for growth.  Segment offerings include product categories from both of our legacy operating segments, and offer a broad array of conventional and future-oriented technologies, including those that are specific to vehicle electrification as well as those that are powertrain-neutral.

28

Vehicle Control is the new name for our Engine Management operating segment.  It includes our core aftermarket business after carving out of all non-aftermarket business to our Engineered Solutions operating segment.  The Vehicle Control segment includes sales from three new major product groups – (1) Ignition, Emissions & Fuel Delivery, which includes the traditional internal combustion engine (ICE) dependent categories; (2) Electrical & Safety, which includes powertrain neutral vehicle technologies such as electrical switches/relays, safety related products such as anti-lock brake and vehicle speed sensors, tire pressure monitoring, park assist sensors, and advanced driver assistance components; and (3) Wire Sets & Other, which includes spark plug wire sets and other related products, and are product categories we have noted to be in secular decline based upon product life cycle.

Our Temperature Control operating segment remains substantially unchanged, as only a small portion of its business moved to Engineered Solutions, and this legacy aftermarket business segment is poised to benefit from the broader adoption of air conditioning and other thermal systems.  Those systems will provide passenger comfort regardless of the vehicles’ powertrain, and are being developed to cool batteries and other products used on electric vehicles.  Segment offerings include sales from thermal products in the aftermarket business under two major product groups – (1) AC System Components, which includes compressors, connecting lines, heat exchangers, and expansion devices; and (2) Other Thermal Components, which includes parts that provide engine, transmission, electric drive motor, and battery temperature management.

The reorganization of our operating segments provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment, better aligns with our strategic focus on diversification, and provides greater transparency into how we are positioned to capture growth opportunities of the future.

The following table summarizes the reorganization of our operating segments, and provides a comparison of our operating segments during 2022 and in 2023:

Operating Segments as of 2022	Operating Segments in 2023
Engine Management:	Vehicle Control (Aftermarket):
Ignition, Emissions, Fuel & Safety	Engine Management (Ignition, Emissions & Fuel Delivery)
Wire and Cable	Electrical & Safety
	Wire Sets & Other
Temperature Control:	Temperature Control (Aftermarket):
Compressors	AC System Components
Other Climate Control Parts	Other Thermal Components
	Engineered Solutions (non-Aftermarket):
	Commercial Vehicle
	Light Vehicle
	Construction & Agriculture
	All Other

29

Overview of Financial Performance

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto. This discussion summarizes the significant factors affecting our results of operations and the financial condition of our business during the three months ended June 30, 2023 and 2022.

	Three Months Ended
	June 30,
(In thousands, except per share data)	2023			2022
Net sales	$	353,075		$	359,412
Gross profit		101,269			96,351
Gross profit %		28.7	%		26.8	%
Operating income		27,178			27,893
Operating income %		7.7	%		7.8	%
Earnings from continuing operations before income taxes		24,697			27,999
Provision for income taxes		6,289			7,122
Earnings from continuing operations		18,408			20,877
Loss from discontinued operations, net of income taxes		(9,221	)		(1,666	)
Net earnings		9,187			19,211
Net earnings (loss) attributable to noncontrolling interest		50			85
Net earnings attributable to SMP		9,137			19,126
Per share data attributable to SMP – Diluted:
Earnings from continuing operations	$	0.83		$	0.93
Discontinued operations		(0.42	)		(0.07	)
Net earnings per common share	$	0.41		$	0.86

Consolidated net sales for the three months ended June 30, 2023 were $353.1 million, a decrease of $6.3 million, or 1.8%, compared to net sales of $359.4 million in the same period in 2022.  Net sales decreased in our Vehicle Control and Temperature Control operating segments, while net sales in our Engineered Solutions operating segment increased when compared to the comparable period in the prior year.

The decrease in net sales in our Vehicle Control segment primarily reflects the impact of lower sales to a customer that filed for bankruptcy in the first quarter of the year; while Temperature Control’s net sales for the second quarter of 2023 reflects the impact of a rainy spring and early summer season across key markets, and thus impacted the timing of early season customer orders in 2023, which were lower than the strong customer orders of the second quarter of 2022 when sales were up 6.4% and customers replenished their prior year inventory levels.  Net sales in our Engineered Solutions segment showed year-over-year improvement driven by increased pricing and new business wins, and we continue to be optimistic about the long-term growth potential of the complementary markets served in our newly created Engineered Solutions operating segment.

Gross margins as a percentage of net sales increased to 28.7% in the second quarter of 2023 compared to 26.8% in the second quarter of 2022.  The gross margin percentages in both our Vehicle Control and Engineered Solutions segments increased year-over-year, while the gross margin percentage decreased in our Temperature Control segment.  The overall consolidated gross margin percentage increase reflects the impact of increased pricing and operating performance, which more than offset the lower fixed cost absorption due to lower production levels as we work down our inventory balances, the lower sales volumes in Temperature Control, the weakening of the U.S. dollar on our international operations and the negative impact from the different margin profile in Engineered Solutions.  Although all of our operating segments were negatively impacted by ongoing inflationary cost increases in certain raw materials, labor and transportation expenses, we anticipate that our annual cost savings initiatives and ability to pass through higher prices to our customers should continue offset much of the impact on our gross margins.

30

Operating margin as a percentage of net sales for the three months ended June 30, 2023 was essentially flat at 7.7% as compared to 7.8% for the same period in 2022.  Included in our operating margin were selling, general and administrative expenses (“SG&A”) of $73.8 million, or 20.9% of net sales for the three months ended June 30, 2023 compared to $68.5 million, or 19% of net sales, for the same period in 2022. The $5.3 million increase in SG&A expenses in the second quarter of 2023 as compared to the second quarter of 2022 is principally due to higher interest rate related costs of $4.8 million incurred in our supply chain financing arrangements.  Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in the second quarter of 2023 were 19.6% of consolidated net sales, slightly higher than the percentage in the comparable prior year period.

Overall, we remain optimistic for the balance of the year.  Our sales team continues to explore new sales opportunities, we remain optimistic about the long-term potential growth opportunities in our Engineered Solutions segment, our cost savings programs remain on track and we are confident that our focus on cash flow will result in generating significant operating cash flow for the balance of 2023.

Impact of Russia’s Invasion of the Ukraine

Russia’s invasion of the Ukraine, and the resultant sanctions imposed by the U.S. and other governments, have created risks, uncertainties and disruptions impacting business continuity, liquidity and asset values not only in the Ukraine and Russia, but in markets worldwide. Significant price increases have occurred in gas and energy markets, as well as in other commodities. Although we have no facilities or business operations in either the Ukraine or Russia, have historically had only minor sales to customers in Russia, which we have subsequently discontinued, and have not experienced additional significant disruptions in the supply chain, the inherent risks and uncertainties surrounding the invasion are being closely monitored. We have manufacturing and distribution facilities in Bialystok, Poland and Pecel, Hungary. Our facility in Bialystok, Poland does not use natural gas in its production process, or for heating, and, as such, is not impacted by Russia’s decision to halt the export of all natural gas to Poland and Bulgaria. While we have not been impacted by the war to date, there can be no assurances that any escalation of the invasion will not have an adverse impact on our business, financial condition and results of operations.

Impact of Global Supply Chain Disruption and Inflation

Disruptions in the global economy have impeded global supply chains, resulted in longer lead times and delays in procuring component parts and raw materials, and resulted in inflationary cost increases in certain raw materials, labor and transportation.  In response to the global supply chain volatility and inflationary cost increases, we have taken, and continue to take, several actions to mitigate the impact by working closely with our suppliers and customers to minimize any potential adverse impacts on our business, including implementing cost savings initiatives and the pass through of higher costs to our customers in the form of price increases, and maintaining inventory at levels to minimize potential disruptions from out-of-stock raw materials and components to ensure higher fill rates with our customers.  We believe that we have also benefited from our geographically diversified manufacturing footprint and our strategy to bring more product manufacturing in-house, especially with respect to product availability and fill rates.  We expect these inflationary trends to continue for some time, and while we believe that we will be able to somewhat offset the impact, there can be no assurances that unforeseen future events in the global supply chain affecting the availability of materials and components, and/or increasing commodity pricing, will not have an adverse effect on our business, financial condition and results of operations.

Environmental, Social, & Governance (“ESG”)

Our Company was founded in 1919 on the values of integrity, common decency and respect for others.  These values continue to this day and are embodied in our Code of Ethics, which has been adopted by the Board of Directors of the Company to serve as a statement of principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business.  These values also serve as the foundation for our increased focus on many important environmental, social and governance issues, such as environmental stewardship and our efforts to identify and implement practices that reduce our environmental impact while achieving our business goals; our attention to diversity, equity and inclusion, employee development, retention, and health and safety; and our community engagement initiatives, to name a few.

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We have made significant strides with respect to our ESG initiatives, building awareness of the environmental impact of our operations, and challenging ourselves to reduce our impact by reducing our usage of energy and water, reducing our generation of waste, increasing our recycling efforts and reducing our greenhouse gas emissions (“GHG”), with the ambition of achieving net-zero total Scope 1 and Scope 2 GHG emissions by 2050.  With each year, we intend to further our commitment to improving our environmental stewardship and finding ways to give back to our communities. Additional information on our ESG initiatives can be found on our corporate website at ir.smpcorp.com under “Environmental & Social Responsibility” (including our most recent sustainability report) and at smpcares.smpcorp.com.  Information on our corporate websites regarding our ESG initiatives are referenced for general information only and are not incorporated by reference in this Report.

Interim Results of Operations

Comparison of the Three Months Ended June 30, 2023 to the Three Months Ended June 30, 2022

Sales.  Consolidated net sales for the three months ended June 30, 2023 were $353.1 million, a decrease of $6.3 million, or 1.8%, compared to $359.4 million in the same period of 2022, with the majority of our net sales to customers located in the United States.  Net sales decreased in our Vehicle Control and Temperature Control operating segments, while net sales in our Engineered Solutions operating segment increased when compared to the comparable period in the prior year.

The following table summarizes consolidated net sales by segment and by major product group within each segment for the three months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended
	June 30,
	2023		2022
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	113,589	$	111,581
Electrical and Safety		52,867		57,054
Wire Sets and Other		17,333		17,136
Total Vehicle Control		183,789		185,771
Temperature Control
AC System Components		74,449		81,608
Other Thermal Components		22,625		24,029
Total Temperature Control		97,074		105,637
Engineered Solutions
Commercial Vehicle		26,742		19,503
Construction/Agriculture		8,103		11,222
Light Vehicle		23,548		23,039
All Other		13,819		14,240
Total Engineered Solutions		72,212		68,004
Other		—		—
Total	$	353,075	$	359,412

Vehicle Control’s net sales for the three months ended June 30, 2023 decreased slightly to $183.8 million compared to $185.8 million in the same period of 2022.  Net sales in the electrical and safety product group for the three months ended June 30, 2023 decreased year-over-year; while net sales increased slightly in the engine management (ignition, emissions, and fuel delivery) product group and remained essentially flat in the wire sets and other product group when compared to the three months ended June 30, 2022.  The decrease in net sales in our Vehicle Control operating segment primarily reflects lower sales to a customer that filed for bankruptcy in the first quarter of the year.

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Temperature Control’s net sales for the three months ended June 30, 2023 decreased $8.5 million, or 8.1%, to $97.1 million compared to $105.6 million in the same period of 2022.  Net sales declined in each of the AC systems components and other thermal components product groups for the three months ended June 30, 2023 when compared to the comparable period in the prior year.  Temperature Control’s net sales for the second quarter of 2023 reflects the impact of a rainy spring and early summer season across key markets, and thus impacted the timing of early season customer orders in 2023, which were lower than the strong customer orders of the second quarter of 2022 when sales were up 6.4% and customers replenished their prior year inventory levels.  Overall, full year results at Temperature Control will be dependent upon summer weather conditions and customer inventory levels.

Engineered Solutions’ net sales for the three months ended June 30, 2023 increased $4.2 million, or 6.2%, to $72.2 million compared to $68 million in the same period of 2022.  Net sales increased in the each of the commercial vehicle and light vehicle product groups for the three months ended June 30, 2023 when compared to the three month ended June 30, 2022; while net sales in the construction and agriculture, and all other product groups declined year-over-year.  Overall, net sales in our Engineered Solutions operating segment showed year-over-year improvement driven by increased pricing and new business wins, and we continue to be optimistic about the long-term growth potential of the complementary markets served in our newly created Engineered Solutions operating segment.

Gross Margins.  Gross margins, as a percentage of consolidated net sales, increased to 28.7% in the second quarter of 2023, compared to 26.8% in the second quarter of 2022.  The following table summarizes gross margins by segment for the three months ended June 30, 2023 and 2022, respectively (in thousands):

Three Months Ended June 30,	Vehicle Control			Temperature Control			Engineered Solutions			Other		Total
2023
Net sales	$	183,789		$	97,074		$	72,212		$	—	$	353,075
Gross margins		60,109			26,512			14,648			—		101,269
Gross margin percentage		32.7	%		27.3	%		20.3	%		—		28.7	%
2022
Net sales	$	185,771		$	105,637		$	68,004		$	—	$	359,412
Gross margins		53,728			29,315			13,308			—		96,351
Gross margin percentage		28.9	%		27.8	%		19.6	%		—		26.8	%

Compared to the second quarter of 2022, gross margins at Vehicle Control increased 3.8 percentage points from 28.9% to 32.7%. Gross margins at Temperature Control decreased 0.5 percentage points from 27.8% to 27.3%, and gross margins at Engineered Solutions increased 0.7 percentage points from 19.6% to 20.3%.

The gross margin percentage increase in our Vehicle Control operating segment reflects the positive impact of increased pricing and operating performance, which more than offset higher material and labor costs, as well as the lower fixed cost absorption due to lower production levels than those achieved in the same period in 2022.  The gross margin percentage decrease in our Temperature Control operating segment reflects the impact of lower sales volumes; while the gross margin percentage increase at our Engineered Solutions operating segment is driven primarily by higher sales and increased pricing, which more than offset the negative impact of customer sales mix.  All of our operating segments were negatively impacted by the ongoing inflationary cost increases in certain raw materials, labor and transportation expenses.  While we anticipate continued margin pressure resulting from inflationary headwinds, we believe that our annual cost savings initiatives coupled with our ability to pass through higher prices to our customers should help to offset much of this impact to our gross margins.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses (“SG&A”) were $73.8 million, or 20.9% of consolidated net sales, in the second quarter of 2023, as compared to $68.5 million, or 19% of consolidated net sales, in the second quarter of 2022.  The $5.3 million increase in SG&A expenses as compared to the second quarter of 2022 is principally due to higher interest rate related costs of $4.8 million incurred in our supply chain financing arrangements.  Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in the second quarter of 2023 were 19.6% of consolidated net sales, slightly higher than the percentage in the comparable prior year period, primarily due to lower sales volume.

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Restructuring and Integration Expenses.  Restructuring and integration expenses were $0.3 million for the three months ended June 30, 2023.  Restructuring and integration expenses incurred in the second quarter of 2023 relate to product line relocations from our Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico, as part of our Cost Reduction Initiative announced during the fourth quarter of 2022.  Total restructuring expenses incurred during the three months ended June 30, 2023 related to the initiative of $0.3 million consisted of (1) expenses of approximately $0.1 million consisting of employee severance and bonuses related to our product line relocations, and (2) expenses of approximately $0.2 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Additional restructuring costs related to the initiative, and expected to be incurred, are approximately $1.6 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of 2023.

Operating Income.  Operating income was $27.2 million, or 7.7% of consolidated net sales, in the second quarter of 2023, compared to $27.9 million, or 7.8% of consolidated net sales, in the second quarter of 2022.  The year-over-year decrease in operating income of $0.7 million is primarily the result of the impact of lower operating income in the Temperature Control segment stemming from lower net sales, and higher interest rate related costs of $4.8 million incurred in our supply chain financing arrangements included in SG&A expenses offset, in part, by higher gross margins as a percentage of sales in the Vehicle Control and Engineered Solutions segments.

Other Non-Operating Income (Expense), Net.  Other non-operating income, net was $0.8 million in the second quarter of 2023, compared to $1.9 million in the second quarter of 2022.  The year-over-year decrease in other non-operating income (expense), net results from the decrease in year-over-year equity income from our joint ventures, due in part to lower production related to inventory reduction plans, and the unfavorable impact of changes in foreign currency exchange rates.

Interest Expense.  Interest expense increased to $3.3 million in the second quarter of 2023, compared to $1.8 million in the second quarter of 2022.  The year-over-year increase in interest expense reflects the impact of higher year-over-year average interest rates on our credit facilities offset, in part, by the impact of slightly lower average outstanding borrowings in the second quarter of 2023 when compared to the second quarter of 2022.

Income Tax Provision.  The income tax provision in the second quarter of 2023 was $6.3 million at an effective tax rate of 25.5% compared to $7.1 million at an effective tax rate of 25.4% for the same period in 2022.  The effective tax rate was essentially flat year-over-year.

Loss from Discontinued Operations.  Loss from discontinued operations, net of income tax, reflects legal expenses and other costs associated with our asbestos-related liability.  During the second quarter of 2023 and 2022, the loss from discontinued operations, net of tax was $9.2 million and $1.7 million, respectively. The loss from discontinued operations includes an $11 million pre-tax provision in the second quarter of 2023 which arose from the May 11, 2023 court ruling in a breach of contract claim in connection with a legal proceeding with a third party; and legal and other administrative expenses, before taxes, of $1.5 million and $2.3 million in the second quarter of 2023 and 2022, respectively.  As discussed more fully in Note 18, “Commitments and Contingencies” in the notes to our consolidated financial statements (unaudited), we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

Net Earnings Attributable to Noncontrolling Interest.  Net earnings (loss) attributable to noncontrolling interest relates to our 70% ownership in a joint venture in Hong Kong, with operations in Shanghai and Wuxi, China (“Trombetta Asia, Ltd.”).  Net earnings attributable to the noncontrolling interest of $50,000 and $85,000 during the three months ended June 30, 2023 and 2022, respectively, represents 30% of the net earnings of Trombetta Asia, Ltd.

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Comparison of the Six Months Ended June 30, 2023 to the Six Months Ended June 30, 2022

Sales.  Consolidated net sales for the six months ended June 30, 2023 were $681.1 million, a slight decrease of $1.1 million, compared to $682.2 million in the same period of 2022, with the majority of our net sales to customers in the United States.  Net sales decreased in our Temperature Control operating segment, while net sales in our Vehicle Control and Engineered Solutions operating segments increased when compared to the comparable period in the prior year.

The following table summarizes consolidated net sales by segment and by major product group within each segment for the six months ended June 30, 2023 and 2022 (in thousands):

	Six Months Ended
	June 30,
	2023		2022
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	229,672	$	220,730
Electrical and Safety		104,671		109,311
Wire Sets and Other		34,023		32,994
Total Vehicle Control		368,366		363,035
Temperature Control
AC System Components		120,201		128,982
Other Thermal Components		49,279		49,713
Total Temperature Control		169,480		178,695
Engineered Solutions
Commercial Vehicle		46,599		40,954
Construction/Agriculture		20,898		22,206
Light Vehicle		46,514		49,114
All Other		29,246		28,239
Total Engineered Solutions		143,257		140,513
Other		—		—
Total	$	681,103	$	682,243

Vehicle Control’s net sales for the six months ended June 30, 2023 increased $5.4 million, or 1.5%, to $368.4 million compared to $363 million in the same period of 2022.  Net sales in the electrical and safety, and wire sets and other product groups for the six months ended June 30, 2023 increased year-over-year; while net sales in the electrical and safety product group decreased in the six months ended June 30, 2023 when compared to the comparable period in the prior year.  Overall, the increase in net sales in our Vehicle Control operating segment reflects the positive impact of increased pricing and the $7.3 million increase in net sales in the first quarter of 2023, offset in part, by lower sales to a customer that filed for bankruptcy in the first quarter of the year.

Temperature Control’s net sales for the six months ended June 30, 2023 decreased $9.2 million, or 5.2%, to $169.5 million compared to $178.7 million in the same period of 2022.  Net sales declined in the AC systems components product group for the six months ended June 30, 2023 when compared to the comparable period in the prior year; while net sales in the other thermal components product group was essentially flat year-over-year.  Temperature Control’s net sales for the first six months of 2023 reflect the impact of a rainy spring and early summer season across key markets, and thus impacted the timing of early season customer orders in 2023, which were lower than the strong customer orders of the comparable period of 2022 when sales were up 14.7% and customers replenished their prior year inventory levels.  Overall, full year results at Temperature Control will be dependent upon summer weather conditions and customer inventory levels.

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Engineered Solutions’ net sales for the six months ended June 30, 2023 increased $2.8 million, or 2%, to $143.3 million compared to $140.5 million in the same period of 2022.  Net sales increased in the each of the commercial vehicle and all other product groups for the six months ended June 30, 2023 when compared to the six months ended June 30, 2022; while net sales in the construction and agriculture, and light vehicle product groups declined year-over-year.  Overall, net sales in our Engineered Solutions operating segment showed a year-over-year improvement driven by increased pricing and new business wins, and we continue to be optimistic about the long-term growth potential of the complementary markets served in our newly created Engineered Solutions operating segment.

Gross Margins.  Gross margins, as a percentage of consolidated net sales, increased to 28.3% in the first six months of 2023, compared to 27.3% during the same period in 2022.  The following table summarizes gross margins by segment for the six months ended June 30, 2023 and 2022, respectively (in thousands):

Six Months Ended June 30,	Vehicle Control			Temperature Control			Engineered Solutions			Other		Total
2023
Net sales	$	368,366		$	169,480		$	143,257		$	—	$	681,103
Gross margins		118,581			45,667			28,288			—		192,536
Gross margin percentage		32.2	%		26.9	%		19.7	%		—		28.3	%
2022
Net sales	$	363,035		$	178,695		$	140,513		$	—	$	682,243
Gross margins		109,152			48,803			28,236			—		186,191
Gross margin percentage		30.1	%		27.3	%		20.1	%		—		27.3	%

Compared to the first six months of 2022, gross margins at Vehicle Control increased 2.1 percentage points from 30.1% to 32.2%. Gross margins at Temperature Control decreased 0.4 percentage points from 27.3% to 26.9%, and gross margins at Engineered Solutions decreased 0.4 percentage points from 20.1% to 19.7%.

The gross margin percentage increase in our Vehicle Control operating segment reflects the positive impact of increased pricing and operating performance, which more offset increases in material and labor costs, as well as the lower fixed cost absorption due to lower production levels than those achieved in the same period in 2022.  The gross margin percentage decrease in our Temperature Control operating segment reflects the impact of lower sales volumes; while the gross margin percentage decrease at our Engineered Solutions operating segment is primarily driven by the negative impact of customer sales mix.  All of our operating segments were negatively impacted by the ongoing inflationary cost increases in certain raw materials, labor and transportation expenses.  While we anticipate continued margin pressure resulting from inflationary headwinds, we believe that our annual cost savings initiatives coupled with our ability to pass through higher prices to our customers should help to offset much of this impact to our gross margins.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses (“SG&A”) were $143.5 million, or 21.1% of consolidated net sales, in the first six months of 2023, as compared to $131.4 million, or 19.3% of consolidated net sales in the first six months of 2022.  The $12.1 million increase in SG&A expenses as compared to the first six months of 2022 is principally due to (1) higher interest rate related costs of $10.3 million incurred in our supply chain financing arrangements, and (2) higher distribution costs.  Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in the six months of 2023 were 19.6% of consolidated net sales, slightly higher than the percentage in the comparable prior year period.

Restructuring and Integration Expenses.  Restructuring and integration expenses were $1.2 million in six months ended June 30, 2023 compared to $44,000 in the comparable period of 2022.  Restructuring and integration expenses incurred in the first six months of 2023 relate to product line relocations from our Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico, as part of our Cost Reduction Initiative announced during the fourth quarter of 2022.  Total restructuring expenses incurred during the six months ended June 30, 2023 related to the initiative of $1.2 million consisted of (1) expenses of approximately $1 million consisting of employee severance and bonuses related to our product line relocations, and (2) expenses of approximately $0.2 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Additional restructuring costs related to the initiative and expected to be incurred, are approximately $1.6 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of 2023.

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Operating Income.  Operating income was $47.9 million, or 7% of consolidated net sales, in the six months ended June 30, 2023, compared to $54.8 million, or 8% of consolidated net sales, in the six months ended June 30, 2022.  The year-over-year decrease in operating income of $6.9 million is primarily the result of the impact of lower operating income in the Temperature Control segment stemming from lower net sales, and higher interest rate related costs of $10.3 million incurred in our supply chain financing arrangements included in SG&A expenses offset, in part, by higher gross margins as a percentage of net sales in the Vehicle Control and Engineered Solutions segments.

Other Non-Operating Income (Expense), Net.  Other non-operating income, net was $1 million in the first six months of 2023, compared to $3.4 million in the first six months of 2022.  The year-over-year decrease in other non-operating income (expense), net results from the decrease in year-over-year equity income from our joint ventures, due in part to lower production related to inventory reduction plans, and the unfavorable impact of changes in foreign currency exchange rates.

Interest Expense.  Interest expense increased to $7.1 million in the first six months of 2023, compared to $2.6 million for the same period in 2022.  The year-over-year increase in interest expense reflects the impact of higher year-over-year average interest rates on our credit facilities, and the impact of higher average outstanding borrowings in the first half of 2023 when compared to the first half of 2022.

Income Tax Provision.  The income tax provision for the six months ended June 30, 2023 was $10.7 million at an effective tax rate of 25.5%, compared to $14.1 million at an effective tax rate of 25.4% for the same period in 2022. The effective tax rate was essentially flat year-over-year.

Loss from Discontinued Operations.  Loss from discontinued operations, net of income tax, reflects legal expenses and other costs associated with our asbestos-related liability.  During the first six months of 2023 and 2022, the loss from discontinued operations, net of tax was $10 million and $2.8 million, respectively.  The loss from discontinued operations includes an $11 million pre-tax provision in the second quarter of 2023 which arose from the May 11, 2023 court ruling in a breach of contract claim in connection with a legal proceeding with a third party; and legal and other administrative expenses, before taxes, of $2.5 million and $3.8 million in the first six months of 2023 and 2022, respectively.  As discussed more fully in Note 18, “Commitments and Contingencies” in the notes to our consolidated financial statements (unaudited), we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

Net Earnings Attributable to Noncontrolling Interest.  Net earnings (loss) attributable to noncontrolling interest relates to our 70% ownership in a joint venture in Hong Kong, with operations in Shanghai and Wuxi, China (“Trombetta Asia, Ltd.”).  Net earnings attributable to the noncontrolling interest of $89,000 and $77,000 during the six months ended June 30, 2023 and 2022, respectively, represents 30% of the net earnings of Trombetta Asia, Ltd.

Restructuring and Integration Programs

For a detailed discussion on the restructuring and integration costs, see Note 4, “Restructuring and Integration Expenses,” of the notes to our consolidated financial statements (unaudited).

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Liquidity and Capital Resources

Our primary cash requirements include working capital, capital expenditures, regular quarterly dividends, stock repurchases, principal and interest payments on indebtedness and acquisitions. The following table summarizes our primary sources of funds including ongoing net cash flows from operating activities and availability under our Credit Agreement.

	June 30,					December 31,
(In thousands)	2023		2022			2022
Operating cash flows	$	39,370	$	(95,333	)
Total debt	$	223,216	$	267,454		$	239,620
Cash		23,019		14,186			21,150
Net debt	$	200,197	$	253,268		$	218,470
Remaining borrowing capacity	$	269,631	$	232,933		$	255,631
Total liquidity		292,650		247,119			276,781

Operating Activities. During the first six months of 2023, cash provided by operating activities was $39.4 million compared to cash used in operating activities of $95.3 million in the same period of 2022. The increase in cash provided by operating activities resulted primarily from the smaller year-over-year increase in accounts receivable, the decrease in inventories compared to an increase in inventories in the prior year, the larger year-over-year increase in accounts payable, the smaller year-over-year increase  in prepaid expenses and other current assets, and the increase in sundry payables and accrued expenses compared to a decrease in sundry payables and accrued expenses in the prior year offset, in part, by the decrease in net earnings.

Net earnings during the first six months of 2023 were $21.1 million compared to $38.6 million in the first six months of 2022.  During the first six months of 2023, (1) the increase in accounts receivable was $48.3 million compared to the year-over-year increase in accounts receivable of $49.7 million in 2022; (2) the decrease in inventories was $30.9 million compared to the year-over-year increase in inventories of $87.7 million in 2022; (3) the increase in accounts payable was $4.3 million compared to the year-over-year increase in accounts payable of $1.6 million in 2022; (4) the increase in prepaid expenses and other current assets was $0.5 million compared to the year-over-year increase in prepaid expenses and other current assets of $7.1 million in 2022; and (5) the increase in sundry payables and accrued expenses was $2.8 million compared to the year-over-year decrease in sundry payables and accrued expenses of $5 million in 2022.

During the second quarter and first six months of 2023, we actively managed our working capital generating operating cash flow of $59.8 million and $39.4 million, respectively, reducing our inventory to more normalized levels.  We anticipate further inventory decreases during 2023 as we continue to actively manage our working capital to maximize our operating cash flow.

Investing Activities.  Cash used in investing activities was $9.4 million in the first six months of 2023, compared to $13.2 million in the same period of 2022.  Investing activities during the first six months of 2023 and 2022 consisted of capital expenditures of $9.5 million and $13.2 million, respectively.

Financing Activities.  Cash used in financing activities was $29.1 million in the first six months of 2023 as compared to cash provided by financing activities of $101.7 million in the same period of 2022. During the first six months of 2023, we (1) reduced our borrowings under our Credit Agreement by $16.5 million; and (2) paid dividends of $12.5 million. Cash provided by our operating activities was used to reduce our borrowings under our Credit Agreement, fund our investing activities and pay dividends.

In June 2022, we entered into a new credit agreement with JPMorgan Chase Bank, N.A., as agent. The new credit agreement provides for a $500 million credit facility comprised of a $100 million term loan facility and a $400 million revolving credit facility. During the first six months of 2022, we (1) increased our borrowings under our credit facilities by $139.2 million; (2) made cash payments of $2.1 million for debt issuance costs in connection with our refinancing; (3) made cash payments for the repurchase of shares of our common stock of $25.6 million; and (4) paid dividends of $11.8 million. Cash provided by borrowings under our credit facilities were used to fund our operating activities, investing activities, payment of debt issuance costs, purchase shares of our common stock and pay dividends.

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Dividends of $12.5 million and $11.8 million were paid in 2023 and 2022, respectively.  In February 2023, our Board of Directors voted to increase our quarterly dividend from $0.27 per share in 2022 to $0.29 per share in 2023.

Liquidity.

Our primary sources of funds are ongoing net cash flows from operating activities and availability under our Credit Agreement (as detailed below).

In June 2022, the Company entered into a new Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders (the “Credit Agreement”).  The Credit Agreement provides for a $500 million credit facility comprised of a $100 million term loan facility (the “term loan”) and a $400 million multi-currency revolving credit facility available in U.S. Dollars, Euros, Sterling, Swiss Francs, Canadian Dollars and other currencies as agreed to by the administrative agent and the lenders (the “revolving facility”).  The Credit Agreement replaces and refinances the 2015 Credit Agreement.

Borrowings under the Credit Agreement were used to repay all outstanding borrowings under the 2015 Credit Agreement, and pay certain fees and expenses incurred in connection with the Credit Agreement, with future borrowings used for other general corporate purposes of the Company and its subsidiaries.  The term loan amortizes in quarterly installments of 1.25% in each of the first four years, and quarterly installments of 2.5% in the fifth year of the Credit Agreement.  The revolving facility has a $25 million sub-limit for the issuance of letters of credit and a $25 million sub-limit for the borrowing of swingline loans.  The maturity date is June 1, 2027.  The Company may request up to two one-year extensions of the maturity date.

The Company may, upon the agreement of one or more then existing lenders or of additional financial institutions not currently party to the Credit Agreement, increase the revolving facility commitments or obtain incremental term loans by an aggregate amount not to exceed (x) the greater of (i) $168 million or (ii) 100% of consolidated EBITDA (as defined in the Credit Agreement) for the four fiscal quarters ended most recently before such date, plus (y) the amount of any voluntary prepayment of term loans, plus (z) an unlimited amount so long as, immediately after giving effect thereto, the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 2.5 to 1.0.

Term loan and revolver facility borrowings in U.S. Dollars bear interest, at the Company’s election, at a rate per annum equal to Term SOFR plus 0.10% plus an applicable margin, or an alternate base rate plus an applicable margin, where the alternate base rate is the greater of the prime rate, the federal funds effective rate plus 0.50%, and one-month Term SOFR plus 0.10% plus 1.00%. Term loan borrowings were made at one-month Term SOFR.  The applicable margin for the term benchmark borrowings ranges from 1.0% to 2.0%, and the applicable margin for alternate base rate borrowings ranges from 0% to 1.0%, in each case, based on the total net leverage ratio of the Company and its restricted subsidiaries.  The Company may select interest periods of one, three or six months for Term SOFR borrowings.  Interest is payable at the end of the selected interest period, but no less frequently than quarterly.

The Company’s obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries (each, a “Guarantor”), and secured by a first priority perfected security interest in substantially all of the existing and future personal property of the Company and each Guarantor, subject to certain exceptions.  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.  Concurrently with the Company’s entry into the Credit Agreement, the Company also entered into a seven year interest rate swap agreement with Wells Fargo Bank, N.A., Co-Syndication Agent and lender under the Credit Agreement, on $100 million of borrowings under the Credit Agreement.  The interest rate swap agreement matures in May 2029.

39

Outstanding borrowings at June 30, 2023 under the Credit Agreement were $223 million, consisting of current borrowings of $58.7 million and long-term debt of $164.3 million; while outstanding borrowings at December 31, 2022 were $239.5 million, consisting of current borrowings of $55 million and long-term debt of $184.5 million.  Letters of credit outstanding under the Credit Agreement were $2.4 million at both June 30, 2023 and December 31, 2022.

At June 30, 2023, the weighted average interest rate under our Credit Agreement was 5.6%, which consisted of $223 million in borrowings under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of borrowings.  At December 31, 2022, the weighted average interest rate under our Credit Agreement was 5.2%, which consisted of $237 million in borrowings at 5.2% under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of borrowings, and an alternative base rate borrowing of $2.5 million at 8%.  During the six months ended June 30, 2023, our average daily alternative base rate loan balance was $0.2 million, compared to a balance of $10.8 million for the six months ended June 30, 2022 and a balance of $5.6 million for the year ended December 31, 2022.

The 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 Credit Agreement also contains customary events of default.

In October 2022, 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 under the facility in Euros and U.S. Dollars. Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.3 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit (approximately $6.2 million) if borrowings are in Euros and/or U.S. Dollars. The overdraft facility has an initial maturity date in December 2022, 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. Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.5% for borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.5% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.75% 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 June 30, 2023 and December 31, 2022.

In order to reduce our accounts receivable balances and improve our cash flow, we are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions.  We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt.  Under the terms of the agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale.  As such, these transactions are being accounted for as a sale.

Pursuant to these agreements, we sold $211.6 million and $382.5 million of receivables during the three months and six months ended June 30, 2023, respectively, and $218.4 million and $374.1 million for the comparable periods in 2022.  Receivables presented at financial institutions and not yet collected as of June 30, 2023 were approximately $10.7 million and remained in our accounts receivable balance as of that date.  There were no receivables presented at financial institutions and not yet collected as of December 31, 2022.  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 $12.4 million and $21.5 million related to the sale of receivables was included in selling, general and administrative expense in our consolidated statements of operations for the three months and six months ended June 30, 2023, respectively, and $7.7 million and $11.2 million for the comparable periods in 2022.

40

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, or delays or failures in collecting trade accounts receivables.  The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each arrangement.  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.

In July 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 from time to time in the open market, or through private transactions, as market conditions warrant. To date, there have been no repurchases of our common stock under the program.

Material Cash Commitments

Material cash commitments as of June 30, 2023 consist of required cash payments to service our outstanding borrowings of $223 million under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent, the future minimum cash requirements of $93.6 million through 2034 under operating leases,  and future cash payments relating to our restructuring activities of $1.7 million.  All of our other cash commitments as of June 30, 2023 are not material.  For additional information related to our material cash commitments, see Note 4, “Restructuring and Integration Expenses”, Note 8, “Leases,” and Note 9, “Credit Facilities and Long-Term Debt,” in the notes to our consolidated financial statements (unaudited).

We anticipate that our cash flow from operations, available cash, and available borrowings under our Credit Agreement will be adequate to meet our future liquidity needs for at least the next twelve months.  Significant assumptions underlie this belief, including, among other things, that we will be able to mitigate the future impact, if any, of disruptions in the supply chain caused, Russia’s invasion of the Ukraine and resultant sanctions imposed by the U.S. and other governments, the geo-political impact of U.S. relations with China, future increases in interest rates, and significant inflationary cost increases in raw materials, labor and transportation that we are unable to pass through our customers, macroeconomic uncertainty, and that there will be no material adverse developments in our business, liquidity or capital requirements.  If material adverse developments were to occur in any of these areas, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our Credit Agreement in amounts sufficient to enable us to pay the principal and interest on our indebtedness, or to fund our other liquidity needs.  In addition, if we default on any of our indebtedness, or breach any financial covenant in our Credit Agreement, our business could be adversely affected.

For further information regarding the risks in our business, refer to Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies

We have identified the accounting policies and estimates surrounding the “Valuation of Long-Lived and Intangible Assets and Goodwill,” and “Asbestos Litigation” as critical to our business operations and the understanding of our results of operations.  The impact and any associated risks related to these policies and estimates on our business operations is discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies and estimates affect our reported and expected financial results. There have been no material changes to these and other accounting policies and estimates from the information provided in Note 1 of the Notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

41

You should be aware that preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We can give no assurances 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 the disruptions in the supply chain, Russia’s invasion of the Ukraine and resultant sanctions imposed by the U.S. and other governments, the geo-political impact of U.S. relations with China, 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.

Recently Issued Accounting Pronouncements

For a detailed discussion on recently issued accounting pronouncements and their impact on our consolidated financial statements, see Note 2, “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements (unaudited).

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosure about Market Risk

We are exposed to market risk, primarily related to foreign currency exchange and interest rates. These exposures are actively monitored by management. Our exposure to foreign exchange rate risk is due to certain costs, revenues and borrowings being denominated in currencies other than one of our subsidiary’s functional currency. Similarly, we are exposed to market risk as the result of changes in interest rates, which may affect the cost of our financing. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. We do not hold or issue derivative financial instruments for trading or speculative purposes.

Exchange Rate Risk

We have exchange rate exposure primarily with respect to the Canadian Dollar, the Euro, the British Pound, the Polish Zloty, the Hungarian Forint, the Mexican Peso, the Taiwan Dollar, the Chinese Yuan Renminbi and the Hong Kong Dollar.  As of June 30, 2023 and December 31, 2022, our monetary assets and liabilities which are subject to this exposure are immaterial, therefore, the potential immediate loss to us that would result from a hypothetical 10% change in foreign currency exchange rates would not be expected to have a material impact on our earnings or cash flows. This sensitivity analysis assumes an unfavorable 10% fluctuation in the exchange rates affecting the foreign currencies in which monetary assets and liabilities are denominated and does not take into account the incremental effect of such a change on our foreign currency denominated revenues.

Interest Rate Risk

We manage our exposure to interest rate risk through the proportion of fixed rate debt and variable rate debt in our debt portfolio. To reduce our market risk to changes in interest rates on our variable rate borrowings, and to manage a portion of our exposure to changes in interest rates, we occasionally enter into interest rate swap agreements.

In June 2022, we entered into a seven year interest rate swap agreement with a notional amount of $100 million that is to mature in May 2029.  The interest rate swap agreement has been designated as a cash flow hedge of interest payments on $100 million of borrowings under our 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 upon a fixed rate of 2.683% per annum, adjusted upward for the credit spread adjustment in the Credit Agreement of 0.10% and the loan margin in the Credit Agreement of 1.50% at June 30, 2023.

As of June 30, 2023, we had approximately $223 million of outstanding borrowings under our Credit Agreement, of which approximately $123 million bears interest at variable rates of interest and $100 million bears interest at fixed rates, after consideration of the interest rate swap agreement entered into in June 2022.  Additionally, we invest our excess cash in highly liquid short-term investments. Based upon our current level of borrowings under our facilities and our excess cash, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate may have an approximate $1 million annualized negative impact on our earnings or cash flows.

42

In addition, we are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions.  We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt.  During the three months and six months ended June 30, 2023, we sold $211.6 million and $382.5 million of receivables, respectively.  Depending upon the level of sales of receivables pursuant these agreements, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the margin rate may have an approximate $2.1 million and $3.8 million negative impact on our earnings or cash flows during the three months and six months ended June 30, 2023, respectively.  The charge related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations.

Other than the aforementioned, there have been no significant changes to the information presented in Item 7A (Market Risk) of our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

(a)          Evaluation of Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.

(b)          Changes in Internal Control Over Financial Reporting.

During the quarter ended June 30, 2023, we have not made any changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.  We review, document and test our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control – Integrated Framework.  We may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. These efforts may lead to various changes in our internal control over financial reporting.

43

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information required by this Item is incorporated herein by reference to the information set forth in Item 1, “Consolidated Financial Statements” of this Report under the caption “Asbestos” appearing in Note 18, “Commitments and Contingencies,” of the notes to our consolidated financial statements (unaudited).

ITEM 6. EXHIBITS

Exhibit Number
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH**	Inline XBRL Taxonomy Extension Schema Document.
101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

** In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to the Original Filing shall be deemed to be “furnished” and not “filed.”

44

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	STANDARD MOTOR PRODUCTS, INC.
	(Registrant)
Date: August 2, 2023	/s/ Nathan R. Iles
	Nathan R. Iles
	Chief Financial Officer
	(Principal Financial and
	Accounting Officer)

45

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric P. Sills, certify that:

1. I have reviewed this report on Form 10-Q of Standard Motor Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 2, 2023
	/s/ Eric P. Sills
	Eric P. Sills
	Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nathan R. Iles, certify that:

1. I have reviewed this report on Form 10-Q of Standard Motor Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 2, 2023
	/s/ Nathan R. Iles
	Nathan R. Iles
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Standard Motor Products, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric P. Sills, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Eric P. Sills

Eric P. Sills

Chief Executive Officer and President

August 2, 2023

*          A signed original of this written statement required by Section 906 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Standard Motor Products, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nathan R. Iles, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Nathan R. Iles

Nathan R. Iles

Chief Financial Officer

August 2, 2023

*          A signed original of this written statement required by Section 906 has been provided to Standard Motor Products, Inc. and will be retained by Standard Motor Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 28, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	001-04743
Entity Registrant Name	Standard Motor Products, Inc.
Entity Central Index Key	0000093389
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	11-1362020
Entity Address, Address Line One	37-18 Northern Blvd.
Entity Address, City or Town	Long Island City
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11101
City Area Code	718
Local Phone Number	392-0200
Title of 12(b) Security	Common Stock, par value $2.00 per share
Trading Symbol	SMP
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,725,967

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023		Jun. 30, 2022
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	[1]	$ 353,075	$ 359,412	$ 681,103		$ 682,243
Cost of sales		251,806	263,061	488,567		496,052
Gross profit		101,269	96,351	192,536		186,191
Selling, general and administrative expenses		73,843	68,468	143,476		131,352
Restructuring and integration expenses		294	3	1,206	[2]	44
Other income, net		46	13	70		13
Operating income		27,178	27,893	47,924		54,808
Other non-operating income, net		802	1,927	1,027		3,376
Interest expense		3,283	1,821	7,145		2,626
Earnings from continuing operations before income taxes		24,697	27,999	41,806		55,558
Provision for income taxes		6,289	7,122	10,661		14,127
Earnings from continuing operations		18,408	20,877	31,145		41,431
Loss from discontinued operations, net of income taxes		(9,221)	(1,666)	(10,001)		(2,782)
Net earnings		9,187	19,211	21,144		38,649
Net earnings attributable to noncontrolling interest		50	85	89		77
Net earnings attributable to SMP	[3]	9,137	19,126	21,055		38,572
Net earnings attributable to SMP
Earnings from continuing operations		18,358	20,792	31,056		41,354
Discontinued operations		(9,221)	(1,666)	(10,001)		(2,782)
Net earnings attributable to SMP	[3]	$ 9,137	$ 19,126	$ 21,055		$ 38,572
Net earnings per common share - Basic:
Earnings from continuing operations (in dollars per share)		$ 0.85	$ 0.96	$ 1.43		$ 1.89
Discontinued operations (in dollars per share)		(0.43)	(0.08)	(0.46)		(0.13)
Net earnings per common share - Basic (in dollars per share)		0.42	0.88	0.97		1.76
Net earnings per common share - Diluted:
Earnings from continuing operations (in dollars per share)		0.83	0.93	1.4		1.85
Discontinued operations (in dollars per share)		(0.42)	(0.07)	(0.45)		(0.13)
Net earnings per common share - Diluted (in dollars per share)		0.41	0.86	0.95		1.72
Dividend declared per share (in dollars per share)		$ 0.29	$ 0.27	$ 0.58		$ 0.54
Average number of common shares (in shares)		21,689,067	21,757,998	21,649,562		21,867,644
Average number of common shares and dilutive common shares (in shares)		22,183,489	22,255,642	22,139,708		22,372,702

[1] There are no intersegment sales among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

[2] Restructuring and integration expenses incurred during the six months ended June 30, 2023 consist of $0.4 million in our Vehicle Control segment, $0.7 million in our Temperature Control segment and $0.1 million in our Engineered Solutions segment.

[3] Throughout this Form 10Q, “SMP” refers to Standard Motor Products, Inc. and subsidiaries.

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net earnings	$ 9,187	$ 19,211	$ 21,144	$ 38,649
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	1,166	(6,528)	3,986	(7,166)
Derivative instruments	1,831	105	454	105
Pension and postretirement plans	(4)	(4)	(7)	(9)
Total other comprehensive income, net of tax	2,993	(6,427)	4,433	(7,070)
Total Comprehensive income	12,180	12,784	25,577	31,579
Comprehensive income (loss) attributable to noncontrolling interest, net of tax:
Net earnings	50	85	89	77
Foreign currency translation adjustments	(81)	(64)	(110)	(61)
Comprehensive income (loss) attributable to noncontrolling interest, net of tax	(31)	21	(21)	16
Comprehensive income attributable to SMP	$ 12,211	$ 12,763	$ 25,598	$ 31,563

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 23,019	$ 21,150
Accounts receivable, less allowances for discounts and expected credit losses of $5,757 and $5,375 for 2023 and 2022, respectively	218,105	167,638
Inventories	499,134	528,715
Unreturned customer inventories	19,722	19,695
Prepaid expenses and other current assets	27,903	25,241
Total current assets	787,883	762,439
Property, plant and equipment, net of accumulated depreciation of $250,382 and $239,176 for 2023 and 2022, respectively	107,590	107,148
Operating lease right-of-use assets	73,093	49,838
Goodwill	132,391	132,087
Other intangibles, net	96,291	100,504
Deferred income taxes	33,905	33,658
Investments in unconsolidated affiliates	41,557	41,745
Other assets	29,435	27,510
Total assets	1,302,145	1,254,929
CURRENT LIABILITIES:
Current portion of revolving credit facility	53,700	50,000
Current portion of term loan and other debt	5,028	5,031
Accounts payable	94,657	89,247
Sundry payables and accrued expenses	59,126	49,990
Accrued customer returns	43,664	37,169
Accrued core liability	20,187	22,952
Accrued rebates	43,781	37,381
Payroll and commissions	28,346	31,361
Total current liabilities	348,489	323,131
Long-term debt	164,488	184,589
Noncurrent operating lease liabilities	64,271	40,709
Other accrued liabilities	24,917	22,157
Accrued asbestos liabilities	59,565	63,305
Total liabilities	661,730	633,891
Commitments and contingencies
Stockholders' equity:
Common stock - par value $2.00 per share: Authorized - 30,000,000 shares; issued 23,936,036 shares	47,872	47,872
Capital in excess of par value	106,529	105,615
Retained earnings	572,753	564,242
Accumulated other comprehensive income	(7,927)	(12,470)
Treasury stock - at cost (2,210,069 shares and 2,350,377 shares in 2023 and 2022, respectively)	(89,554)	(95,239)
Total SMP stockholders' equity	629,673	610,020
Noncontrolling interest	10,742	11,018
Total stockholders' equity	640,415	621,038
Total liabilities and stockholders' equity	$ 1,302,145	$ 1,254,929

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Accounts receivable, allowances for discounts and expected credit losses	$ 5,757	$ 5,375
Property, plant and equipment, accumulated depreciation	$ 250,382	$ 239,176
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 2	$ 2
Common stock, shares authorized (in shares)	30,000,000	30,000,000
Common stock, shares issued (in shares)	23,936,036	23,936,036
Treasury stock - at cost (in shares)	2,210,069	2,350,377

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 21,144	$ 38,649
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	14,129	13,893
Amortization of deferred financing cost	248	164
Increase (decrease) to allowance for expected credit losses	204	(253)
Increase to inventory reserves	1,600	2,959
Equity income from joint ventures	(943)	(2,524)
Employee stock ownership plan allocation	1,483	1,148
Stock-based compensation	3,633	4,465
(Increase) decrease in deferred income taxes	(390)	2,090
Loss on discontinued operations, net of tax	10,001	2,782
Change in assets and liabilities:
Increase in accounts receivable	(48,271)	(49,659)
(Increase) decrease in inventories	30,924	(87,744)
Increase in prepaid expenses and other current assets	(468)	(7,102)
Increase in accounts payable	4,323	1,591
Increase (decrease) in sundry payables and accrued expenses	2,776	(5,020)
Net change in other assets and liabilities	(1,023)	(10,772)
Net cash provided by (used in) operating activities	39,370	(95,333)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(9,507)	(13,203)
Other investing activities	66	0
Net cash used in investing activities	(9,441)	(13,203)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the term loan	0	100,000
Repayments of term loan	(2,500)	0
Net borrowings (repayments) under revolving credit facilities	(14,000)	39,202
Net borrowings (repayments) of other debt and lease obligations	(47)	117
Purchase of treasury stock	0	(25,605)
Payments of debt issuance costs	0	(2,128)
Increase in overdraft balances	258	1,903
Dividends paid	(12,544)	(11,822)
Dividends paid to noncontrolling interest	(255)	0
Net cash provided by (used in) financing activities	(29,088)	101,667
Effect of exchange rate changes on cash	1,028	(700)
Net increase (decrease) in cash and cash equivalents	1,869	(7,569)
CASH AND CASH EQUIVALENTS at beginning of period	21,150	21,755
CASH AND CASH EQUIVALENTS at end of period	23,019	14,186
Cash paid during the period for:
Interest	7,694	2,219
Income taxes	$ 9,356	$ 18,897

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total SMP [Member]	Non-Controlling Interest [Member]	Total
Balance at beginning of period at Dec. 31, 2021	$ 47,872	$ 105,377	$ 532,319	$ (8,169)	$ (75,819)	$ 601,580	$ 11,047	$ 612,627
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	38,572	0	0	38,572	77	38,649
Other comprehensive income, net of tax	0	0	0	(7,009)	0	(7,009)	(61)	(7,070)
Cash dividends paid	0	0	(11,822)	0	0	(11,822)	0	(11,822)
Purchase of treasury stock	0	0	0	0	(26,496)	(26,496)	0	(26,496)
Stock-based compensation	0	3,371	0	0	1,094	4,465	0	4,465
Employee Stock Ownership Plan	0	369	0	0	1,927	2,296	0	2,296
Balance at end of period at Jun. 30, 2022	47,872	109,117	559,069	(15,178)	(99,294)	601,586	11,063	612,649
Balance at beginning of period at Mar. 31, 2022	47,872	107,606	545,830	(8,815)	(80,622)	611,871	11,042	622,913
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	19,126	0	0	19,126	85	19,211
Other comprehensive income, net of tax	0	0	0	(6,363)	0	(6,363)	(64)	(6,427)
Cash dividends paid	0	0	(5,887)	0	0	(5,887)	0	(5,887)
Purchase of treasury stock	0	0	0	0	(19,646)	(19,646)	0	(19,646)
Stock-based compensation	0	1,511	0	0	974	2,485	0	2,485
Balance at end of period at Jun. 30, 2022	47,872	109,117	559,069	(15,178)	(99,294)	601,586	11,063	612,649
Balance at beginning of period at Dec. 31, 2022	47,872	105,615	564,242	(12,470)	(95,239)	610,020	11,018	621,038
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	21,055	0	0	21,055	89	21,144
Other comprehensive income, net of tax	0	0	0	4,543	0	4,543	(110)	4,433
Cash dividends paid	0	0	(12,544)	0	0	(12,544)	0	(12,544)
Dividends paid to noncontrolling interest	0	0	0	0	0	0	(255)	(255)
Stock-based compensation	0	898	0	0	2,735	3,633	0	3,633
Employee Stock Ownership Plan	0	16	0	0	2,950	2,966	0	2,966
Balance at end of period at Jun. 30, 2023	47,872	106,529	572,753	(7,927)	(89,554)	629,673	10,742	640,415
Balance at beginning of period at Mar. 31, 2023	47,872	106,675	569,899	(11,001)	(91,801)	621,644	11,028	632,672
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	9,137	0	0	9,137	50	9,187
Other comprehensive income, net of tax	0	0	0	3,074	0	3,074	(81)	2,993
Cash dividends paid	0	0	(6,283)	0	0	(6,283)	0	(6,283)
Dividends paid to noncontrolling interest	0	0	0	0	0	0	(255)	(255)
Stock-based compensation	0	(146)	0	0	2,247	2,101	0	2,101
Balance at end of period at Jun. 30, 2023	$ 47,872	$ 106,529	$ 572,753	$ (7,927)	$ (89,554)	$ 629,673	$ 10,742	$ 640,415

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Basis of Presentation

6 Months Ended

Jun. 30, 2023

Basis of Presentation [Abstract]

Basis of Presentation

Note 1.   Basis of Presentation

Standard Motor Products, Inc. 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 custom-engineered solutions for vehicle control and thermal management categories in diversified end markets.  We sell our products primarily to automotive aftermarket 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.

The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.  The unaudited consolidated financial statements include our accounts and all domestic and international companies in which we have more than a 50% equity ownership, except in instances where the minority shareholder maintains substantive participating rights, in which case we follow the equity method of accounting.  In instances where we have more than a 50% equity ownership and the minority shareholder does not maintain substantive participating rights, our consolidated financial statements include the accounts of the company on a consolidated basis with its net income and equity reported at amounts attributable to both our equity position and that of the noncontrolling interest.  Investments in unconsolidated affiliates are accounted for on the equity method, as we do not have a controlling financial interest but have the ability to exercise significant influence.  All significant inter-company items have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.

Reclassification

Certain prior period amounts in the accompanying consolidated financial statements and related notes have been reclassified to conform to the 2023 presentation.

Reportable Segments

Beginning on January 1, 2023, we reorganized our business into three operating segments – Engineered Solutions, Vehicle Control and Temperature Control. The new operating segment structure provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment, better aligns our operating segments with our strategic focus on diversification, and provides greater transparency into our positioning to capture growth opportunities in the future.  Prior period segment results have been reclassified to conform to our operating segment reorganization. For additional information related to our segment reorganization, see Note 7, “Goodwill and Acquired Intangible Assets,” Note 16, “Industry Segments,” and Note 17, “Net Sales.”

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2.   Summary of Significant Accounting Policies

The preparation of consolidated annual and quarterly financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.  We have made a number of estimates and assumptions in the preparation of these consolidated financial statements.  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, Russia’s invasion of the Ukraine and resultant sanctions imposed by the U.S. and other governments, the geo-political impact of U.S. relations with China, 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.  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.

There have been no material changes to our critical accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Issued Accounting Pronouncements

Standards that are not yet adopted as of June 30, 2023

There are no recently issued accounting pronouncements that have not been adopted as of June 30, 2023 that could have a material impact on our financial statements.

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Business Acquisitions and Investments

6 Months Ended

Jun. 30, 2023

Business Acquisitions and Investments [Abstract]

Business Acquisitions and Investments

Note 3.   Business Acquisitions and Investments

2022 Increase in Equity Investment

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”) for approximately $5.1 million. CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China. We determined, at that time, that due to a lack of a voting majority and other qualitative factors, we do not control the operations of CYJ and accordingly, our investment in CYJ would be accounted for under the equity method of accounting.

In October 2022, we acquired an additional 3.55% equity interest in CYJ for RMB 1.7 million (approximately $242,000), increasing our minority ownership interest in CYJ from an approximate interest of 29% to 33%. The additional acquired ownership interest in CYJ was paid for in cash funded by borrowings under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent.  We will continue to account for our minority interest in CYJ using the equity method of accounting.

2022 Business Acquisitions

Acquisition of Capital Stock of Kade Trading GmbH (“Kade”)

In October 2022, we acquired 100% of the capital stock of Kade Trading GmbH (“Kade”) headquartered in Glinde, Germany for Euros 2.7 million (approximately $2.7 million) plus a Euros 0.5 million (approximately $0.5 million) earn-out based upon Kade’s performance in 2024 and 2025.  Kade is a supplier across Europe of mobile temperature control components to commercial vehicle, passenger car and specialty equipment markets and has been a distributor of products from our joint ventures including electric compressors, hose assemblies and receiver dryers, with annual sales of approximately $6 million. The acquired Kade business, reported as part of our Engineered Solutions segment, was paid for with cash.

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):

Purchase price				$	3,176
Assets acquired and liabilities assumed:
Receivables	$	790
Inventory		829
Other current assets (1)		1,003
Property, plant and equipment, net		63
Operating lease right-of-use assets		401
Intangible assets		2,395
Goodwill		766
Current liabilities		(1,977	)
Noncurrent operating lease liabilities		(328	)
Deferred income taxes		(766	)
Net assets acquired				$	3,176

(1) The other current assets balance includes $1 million of cash acquired.

Intangible assets acquired of $2.4 million consist of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 15 years.

Incremental revenues from the acquired Kade business included in our consolidated statement of operations for the three months and six months ended June 30, 2023 were $1.7 million and $3.4 million, respectively.

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Restructuring and Integration Expenses

6 Months Ended

Jun. 30, 2023

Restructuring and Integration Expenses [Abstract]

Restructuring and Integration Expenses

Note 4.   Restructuring and Integration Expenses

The aggregated liabilities included in “sundry payables and accrued expenses” and “other accrued liabilities” in the consolidated balance sheet relating to the restructuring and integration activities as of June 30, 2023 and December 31, 2022 and for the six months ended June 30, 2023, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2022	$	1,521		$	—		$	1,521
Restructuring and integration costs:
Amounts provided for during 2023 (1)		969			237			1,206
Cash payments		(800	)		(237	)		(1,037	)
Foreign currency exchange rate changes		20			—			20
Exit activity liability at June 30, 2023	$	1,710		$	—		$	1,710

(1) Restructuring and integration expenses incurred during the six months ended June 30, 2023 consist of $0.4 million in our Vehicle Control segment, $0.7 million in our Temperature Control segment and $0.1 million in our Engineered Solutions segment.

Restructuring Costs

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

Restructuring expenses related to the Cost Reduction Initiative of approximately $1.2 million were incurred during the six months ended June 30, 2023 consisting of (1) expenses of approximately $1 million of employee severance and bonuses related to our product line relocations, and (2) expenses of approximately $0.2 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Cash payments made of approximately $1 million during the six months ended June 30, 2023 consisted primarily of severance payments related to the sales force reduction.  Additional restructuring costs related to the initiative, and expected to be incurred, are approximately $1.6 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of 2023.

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Sale of Receivables

6 Months Ended

Jun. 30, 2023

Sale of Receivables [Abstract]

Sale of Receivables

Note 5.   Sale of Receivables

We are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions.  We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt.  Under the terms of the agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale.  As such, these transactions are being accounted for as a sale.

Pursuant to these agreements, we sold $211.6 million and $382.5 million of receivables during the three months and six months ended June 30, 2023, respectively, and $218.4 million and $374.1 million for the comparable periods in 2022.  Receivables presented at financial institutions and not yet collected as of June 30, 2023 were approximately $10.7 million and remained in our accounts receivable balance as of that date. There were no receivables presented at financial institutions and not yet collected as of December 31, 2022. 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 $12.4 million and $21.5 million related to the sale of receivables was included in selling, general and administrative expense in our consolidated statements of operations for the three months and six months ended June 30, 2023, respectively, and $7.7 million and $11.2 million for the comparable periods in 2022.

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, or delays or failures in collecting trade accounts receivable. The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each arrangement. 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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Inventories

6 Months Ended

Jun. 30, 2023

Inventories [Abstract]

Inventories

Note 6.   Inventories

Inventories, which are stated at the lower of cost (determined by means of the first-in, first-out method) and net realizable value, consist of the following:

	June 30, 2023		December 31, 2022
	(In thousands)
Finished goods	$	300,430	$	324,362
Work in process		16,126		14,099
Raw materials		182,578		190,254
Subtotal		499,134		528,715
Unreturned customer inventories		19,722		19,695
Total inventories	$	518,856	$	548,410

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Goodwill and Acquired Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Acquired Intangible Assets [Abstract]

Goodwill and Acquired Intangible Assets

Note 7.   Goodwill and Acquired Intangible Assets

Goodwill

In connection with our operating segment reorganization, 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 allocation 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.

Acquired Intangible Assets

Acquired identifiable intangible assets consist of the following:

	June 30, 2023			December 31, 2022
	(In thousands)
Customer relationships	$	159,448		$	158,717
Patents, developed technology and intellectual property		14,123			14,123
Trademarks and trade names		8,880			8,880
Non-compete agreements		3,291			3,282
Supply agreements		800			800
Leaseholds		160			160
Total acquired intangible assets		186,702			185,962
Less accumulated amortization (1)		(91,756	)		(86,945	)
Net acquired intangible assets	$	94,946		$	99,017

(1) Applies to all intangible assets, except for trademarks and trade names totaling $2.6 million, which have indefinite useful lives and, as such, are not being amortized.

Total amortization expense for acquired intangible assets was $2.1 million and $4.3 million for the three months and six months ended June 30, 2023, respectively, and $2.2 million and $4.3 million for the comparable periods in 2022.  Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $4.2 million for the remainder of 2023, $8.4 million in 2024, $8.4 million in 2025, $8.4 million in 2026 and $62.9 million in the aggregate for the years 2027 through 2041.

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Note 8.   Leases

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 eleven 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 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.

The following tables provide quantitative disclosures related to our operating leases and include all operating leases acquired from the date of acquisition (in thousands):

Balance Sheet Information	June 30, 2023			December 31, 2022
Assets
Operating lease right-of-use assets	$	73,093		$	49,838
Liabilities
Sundry payables and accrued expenses	$	11,883		$	10,763
Noncurrent operating lease liabilities		64,271			40,709
Total operating lease liabilities	$	76,154		$	51,472
Weighted Average Remaining Lease Term
Operating leases	8.3 Years			7 Years
Weighted Average Discount Rate
Operating leases		4.4	%		3.7	%

Expense and Cash Flow Information	Three Months Ended June 30,
	2023		2022
Lease Expense
Operating lease expense (a)	$	3,776	$	2,711

	Six Months Ended June 30,
	2023		2022
Lease Expense
Operating lease expense (a)	$	6,885	$	5,541
Supplemental Cash Flow Information
Cash paid for the amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,476	$	5,397
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases (b)	$	30,830	$	4,458

(a) Excludes expenses of approximately $0.4 million and $1.1 million for the three and six months ended June 30, 2023, respectively, and approximately $0.7 million and $1.1 million for the comparable periods in 2022, respectively, related 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 is not material.

(b) Includes $27.8 million of right-of-use assets related to the lease modification and extension for our distribution center and office in Lewisville, Texas during the six months ended June 30, 2023.

Minimum Lease Payments

At June 30, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

2023	$	5,861
2024		12,899
2025		11,194
2026		9,892
2027		8,867
Thereafter		44,929
Total lease payments	$	93,642
Less: Interest		(17,488	)
Present value of lease liabilities	$	76,154

In May 2023, we signed a lease for a new distribution facility in Shawnee, Kansas with a commencement date of July 1, 2023, and a lease termination date of November 30, 2033.  The lease covers a building of 574,932 square feet.  Base rent is approximately $3 million per annum beginning on December 1, 2023 increasing 3% per annum each year thereafter, plus approximately $0.5 million for taxes and maintenance commencing on July 1, 2023.  The expected right-of-use asset related to the lease is approximately $26.1 million.  Balance sheet lease accounting and rent expense will be recorded beginning on July 1, 2023, the lease commencement date.

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Credit Facilities and Long-Term Debt

6 Months Ended

Jun. 30, 2023

Credit Facilities and Long-Term Debt [Abstract]

Credit Facilities and Long-Term Debt

Note 9.   Credit Facilities and Long-Term Debt

Total debt outstanding is summarized as follows:

	June 30, 2023		December 31, 2022
	(In thousands)
Credit facility – term loan due 2027	$	95,000	$	97,500
Credit facility – revolver due 2027		128,000		142,000
Other		216		120
Total debt	$	223,216	$	239,620
Current maturities of debt	$	58,728	$	55,031
Long-term debt		164,488		184,589
Total debt	$	223,216	$	239,620

Term Loan and Revolving Credit Facility

In June 2022, the Company entered into a new Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders (the “Credit Agreement”).  The Credit Agreement provides for a $500 million credit facility comprised of a $100 million term loan facility (the “term loan”) and a $400 million multi-currency revolving credit facility available in U.S. Dollars, Euros, Sterling, Swiss Francs, Canadian Dollars and other currencies as agreed to by the administrative agent and the lenders (the “revolving facility”). The Credit Agreement replaces and refinances the 2015 Credit Agreement.

Borrowings under the Credit Agreement were used to repay all outstanding borrowings under the 2015 Credit Agreement, and pay certain fees and expenses incurred in connection with the Credit Agreement, with future borrowings used for other general corporate purposes of the Company and its subsidiaries.  The term loan amortizes in quarterly installments of 1.25% in each of the first four years, and quarterly installments of 2.5% in the fifth year of the Credit Agreement.  The revolving facility has a $25 million sub-limit for the issuance of letters of credit and a $25 million sub-limit for the borrowing of swingline loans.  The maturity date is June 1, 2027.  The Company may request up to two one-year extensions of the maturity date.

The Company may, upon the agreement of one or more then existing lenders or of additional financial institutions not currently party to the Credit Agreement, increase the revolving facility commitments or obtain incremental term loans by an aggregate amount not to exceed (x) the greater of (i) $168 million or (ii) 100% of consolidated EBITDA (as defined in the Credit Agreement) for the four fiscal quarters ended most recently before such date, plus (y) the amount of any voluntary prepayment of term loans, plus (z) an unlimited amount so long as, immediately after giving effect thereto, the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 2.5 to 1.0.

Term loan and revolver facility borrowings in U.S. Dollars bear interest, at the Company’s election, at a rate per annum equal to Term SOFR plus 0.10% plus an applicable margin, or an alternate base rate plus an applicable margin, where the alternate base rate is the greater of the prime rate, the federal funds effective rate plus 0.50%, and one-month Term SOFR plus 0.10% plus 1.00%. Term loan borrowings were made at one-month Term SOFR. The applicable margin for the term benchmark borrowings ranges from 1.0% to 2.0%, and the applicable margin for alternate base rate borrowings ranges from 0% to 1.0%, in each case, based on the total net leverage ratio of the Company and its restricted subsidiaries.  The Company may select interest periods of one, three or six months for Term SOFR borrowings.  Interest is payable at the end of the selected interest period, but no less frequently than quarterly.

The Company’s obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries (each, a “Guarantor”), and secured by a first priority perfected security interest in substantially all of the existing and future personal property of the Company and each Guarantor, subject to certain exceptions.  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.  Concurrently with the Company’s entry into the Credit Agreement, the Company also entered into a seven year interest rate swap agreement with Wells Fargo Bank, N.A., Co-Syndication Agent and lender under the Credit Agreement, on $100 million of borrowings under the Credit Agreement. The interest rate swap agreement matures in May 2029.

Outstanding borrowings at June 30, 2023 under the Credit Agreement were $223 million, consisting of current borrowings of $58.7 million and long-term debt of $164.3 million; while outstanding borrowings at December 31, 2022 were $239.5 million, consisting of current borrowings of $55 million and long-term debt of $184.5 million.  Letters of credit outstanding under the Credit Agreement were $2.4 million at both June 30, 2023 and December 31, 2022.

At June 30, 2023, the weighted average interest rate under our Credit Agreement was 5.6%, which consisted of $223 million in borrowings under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of borrowings.  At December 31, 2022, the weighted average interest rate under our Credit Agreement was 5.2%, which consisted of $237 million in borrowings at 5.2% under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of borrowings, and an alternative base rate borrowing of $2.5 million at 8%.  During the six months ended June 30, 2023, our average daily alternative base rate loan balance was $0.2 million, compared to a balance of $10.8 million for the six months ended June 30, 2022 and a balance of $5.6 million for the year ended December 31, 2022.

The 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 Credit Agreement also contains customary events of default.

Polish Overdraft Facility

In October 2022, 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 under the facility in Euros and U.S. Dollars. Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.3 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit (approximately $6.2 million) if borrowings are in Euros and/or U.S. Dollars. The overdraft facility has an initial maturity date in December 2022, 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. Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.5% for borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.5% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.75% 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 June 30, 2023 and December 31, 2022.

Maturities of Debt

As of June 30, 2023, maturities of debt through 2027, assuming no prepayments, are as follows (in thousands):

	Revolving Credit Facility			Term Loan Facility			Polish Overdraft Facility and Other Debt			Total
Remainder of 2023	$	—		$	2,500		$	14		$	2,514
2024		—			5,000			28			5,028
2025		—			5,000			30			5,030
2026		—			7,500			46			7,546
2027		128,000			75,000			98			203,098
Total	$	128,000		$	95,000		$	216		$	223,216
Less: current maturities		(53,700	)		(5,000	)		(28	)		(58,728	)
Long-term debt	$	74,300		$	90,000		$	188		$	164,488

Deferred Financing Costs

We have deferred financing costs of approximately $1.8 million and $2.1 million as of June 30, 2023 and December 31, 2022, respectively.  Deferred financing costs are related to our term loan and revolving credit facilities. Deferred financing costs as of June 30, 2023, assuming no prepayments, are being amortized in the amounts of $0.2 million for the remainder of 2023, $0.5 million in 2024, $0.5 million in 2025, $0.5 million in 2026 and $0.1 million in 2027.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2023

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

Note 10.  Accumulated Other Comprehensive Income

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

	Three Months Ended June 30, 2023
	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at March 31, 2023  attributable to SMP	$	(13,481	)	$	34		$	2,446			$	(11,001	)
Other comprehensive income before reclassifications		1,247			—			2,262		(1)		3,509
Amounts reclassified from accumulated other comprehensive income		—			(4	)		(431	)			(435	)
Other comprehensive income, net		1,247			(4	)		1,831				3,074
Balance at June 30, 2023 attributable to SMP	$	(12,234	)	$	30		$	4,277			$	(7,927	)

	Six Months Ended June 30, 2023
	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at December 31, 2022 attributable to SMP	$	(16,330	)	$	37		$	3,823			$	(12,470	)
Other comprehensive income before reclassifications		4,096			—			1,223		(1)		5,319
Amounts reclassified from accumulated other comprehensive income		—			(7	)		(769	)			(776	)
Other comprehensive income, net		4,096			(7	)		454				4,543
Balance at June 30, 2023 attributable to SMP	$	(12,234	)	$	30		$	4,277			$	(7,927	)

(1) Consists of the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $3.1 million ($2.3 million, net of tax) and $1.6 million ($1.2 million, net of tax) in the three months and six months ended June 30, 2023, respectively, net of cash settlements payments of $0.6 million ($0.4 million, net of tax) and $1 million ($0.8 million, net of tax) in the three months and six months ended June 30, 2023, respectively.

Reclassifications Out of Accumulated Other Comprehensive Income (in thousands)

	Three Months Ended			Six Months Ended
Details About Accumulated Other Comprehensive Income Components	June 30, 2023			June 30, 2023
Derivative cash flow hedge:
Unrecognized gain (loss) (1)	$	(583	)	$	(1,039	)
Postretirement Benefit Plans:
Unrecognized gain (loss) (2)		(5	)		(11	)
Total before income tax		(588	)		(1,050	)
Income tax expense		(153	)		(274	)
Total reclassifications attributable to SMP	$	(435	)	$	(776	)

(1) 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.

(2) 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, net in our consolidated statements of operations (see Note 12, “Employee Benefits,” for additional information).

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Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2023

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

Note 11.  Stock-Based Compensation Plans

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 cost is recognized in the consolidated statement of operations over the period during which an employee is required to provide service in exchange for the award.

Restricted and Performance Stock Grants

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 under the Amended and Restated 2016 Omnibus Incentive Plan (“Plan”).  Shares issued under the Plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the Plan.

As part of the Plan, we currently grant shares of restricted stock to eligible employees and our independent directors and performance-based shares 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 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 60 and 63, and become fully vested on or within approximately two months of an executive reaching the age 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 no earlier than three years after the date of grant.  Each period we evaluate the probability of achieving the applicable targets, and we 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 on our evaluation of historical and expected future turnover.

Our restricted and performance-based share activity was as follows for the six months ended June 30, 2023:

	Shares			Weighted Average Grant Date Fair Value Per Share
Balance at December 31, 2022		880,829		$	31.79
Granted		6,000			31.63
Vested		(56,978	)		32.37
Forfeited		(3,875	)		40.12
Balance at June 30, 2023		825,976		$	31.76

We recorded compensation expense related to restricted shares and performance-based shares of $3.2 million ($2.4 million, net of tax) and $3.9 million ($2.9 million, net of tax) for the six months ended June 30, 2023 and 2022, respectively. The unamortized compensation expense related to our restricted and performance-based shares was $11.2 million at June 30, 2023, and is expected to be recognized as they vest over a weighted average period of 4 years and 0.83 years for employees and directors, respectively.

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Employee Benefits

6 Months Ended

Jun. 30, 2023

Employee Benefits [Abstract]

Employee Benefits

Note 12.  Employee Benefits

We provide certain medical and dental care benefits to 14 former U.S. union employees. The postretirement medical and dental benefit obligation to the former union employees as of June 30, 2023, and the related net periodic benefit cost for the plan for the three and six months ended June 30, 2023 and 2022 were not material.

We maintain a defined contribution Supplemental Executive Retirement Plan for key employees.  Under the plan, these employees may elect to defer a portion of their compensation and, in addition, we may at our discretion make contributions to the plan on behalf of the employees.  In March 2023, we made company contributions to the plan of $0.8 million related to calendar year 2022.

We also have an Employee Stock Ownership Plan 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 share until they are committed to be released.  The trustees will vote the shares in accordance with their fiduciary duties.  During the six months ended June 30, 2023, we contributed to the trust an additional 72,800 shares from our treasury and released 72,800 shares from the trust leaving 200 shares remaining in the trust as of June 30, 2023.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2023

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

Note 13.  Derivative Financial Instruments

Interest Rate Swap Agreements

We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings. The principal financial instruments used for cash flow hedging purposes are interest rate swap agreements. The interest rate swaps effectively convert a portion of our variable rate borrowings under our existing facilities to a fixed rate based upon determined notional amount. We do not enter into interest rate swap agreements, or other financial instruments, for trading or speculative purposes.

In June 2022, we entered into a seven year interest rate swap agreement with a notional amount of $100 million that is to mature in May 2029.  The interest rate swap agreement has been designated as a cash flow hedge of interest payments on $100 million of borrowings under our 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 upon a fixed rate of 2.683% per annum, adjusted upward for the credit spread adjustment in the Credit Agreement of 0.10% and the loan margin in the Credit Agreement of 1.50% at June 30, 2023.

The fair value of the interest rate swap agreement as of June 30, 2023 and December 31, 2022 was an asset of $5.8 million and $5.2 million, respectively, which has been deferred and recorded in accumulated other comprehensive income, net of income taxes, in our consolidated balance sheet. When the interest expense on the underlying borrowing is recognized, the deferred gain/loss in accumulated other comprehensive income is recorded in earnings as interest expense in the consolidated statements of operations. We plan to perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 14.  Fair Value Measurements

We follow a three-level fair value hierarchy that prioritizes the inputs to measure fair value.  This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.”  The three levels of inputs used to measure fair value are as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect assumptions that market participants would use in pricing an asset or liability.

The following is a summary of the estimated fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments at June 30, 2023 and December 31, 2022 (in thousands):

		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Cash and cash equivalents	LEVEL 1	$	23,019	$	23,019	$	21,150	$	21,150
Deferred compensation	LEVEL 1		23,104		23,104		20,190		20,190
Short term borrowings	LEVEL 1		58,728		58,728		55,031		55,031
Long-term debt	LEVEL 1		164,488		164,488		184,589		184,589
Cash flow interest rate swap	LEVEL 2		5,786		5,786		5,174		5,174

The carrying value of cash and cash equivalents approximates fair value due to the short maturity of those investments.  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.

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Earnings Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Note 15.  Earnings Per Share

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 per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net Earnings Attributable to SMP -
Earnings from continuing operations	$	18,358		$	20,792		$	31,056		$	41,354
Loss from discontinued operations		(9,221	)		(1,666	)		(10,001	)		(2,782	)
Net earnings attributable to SMP	$	9,137		$	19,126		$	21,055		$	38,572
Basic Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	0.85		$	0.96		$	1.43		$	1.89
Loss from discontinued operations per common share		(0.43	)		(0.08	)		(0.46	)		(0.13	)
Net earnings per common share attributable to SMP	$	0.42		$	0.88		$	0.97		$	1.76
Weighted average common shares outstanding		21,689			21,758			21,650			21,868
Diluted Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	0.83		$	0.93		$	1.40		$	1.85
Loss from discontinued operations per common share		(0.42	)		(0.07	)		(0.45	)		(0.13	)
Net earnings per common share attributable to SMP	$	0.41		$	0.86		$	0.95		$	1.72
Weighted average common shares outstanding		21,689			21,758			21,650			21,868
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock and performance-based stock		494			498			490			505
Weighted average common shares outstanding – Diluted		22,183			22,256			22,140			22,373

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):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Restricted and performance-based shares		273		268		286		262

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Industry Segments

6 Months Ended

Jun. 30, 2023

Industry Segments [Abstract]

Industry Segments

Note 16.  Industry Segments

Beginning on January 1, 2023, we reorganized our business into three operating segments – Engineered Solutions, Vehicle Control and Temperature Control. The new operating segment structure provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment, better aligns our operating segments with our strategic focus on diversification, and provides greater transparency into our positioning to capture growth opportunities in the future.

Engineered Solutions is a new operating segment created by carving out all non-aftermarket business from our prior Engine Management and Temperature Control operating segments.  Our Engineered Solutions segment supplies 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.

Vehicle Control is the new name for our Engine Management operating segment.  It includes our core aftermarket business after carving out all non-aftermarket business to our Engineered Solutions operating segment.  The Vehicle Control operating segment includes sales from ignition, emissions, and fuel delivery, electrical and safety, and wire sets and other product categories.

Temperature Control is our ongoing operating segment, after the carve out of all non-aftermarket business to our Engineered Solutions operating segment, that derives its sales from air conditioning system components and other thermal product categories.  Our Temperature Control operating segment is poised to benefit from the broader adoption of air conditioning and other thermal systems.

The following tables show our net sales and operating income for each reportable operating segment (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Net Sales (a)
Vehicle Control	$	183,789		$	185,771		$	368,366		$	363,035
Temperature Control		97,074			105,637			169,480			178,695
Engineered Solutions		72,212			68,004			143,257			140,513
Other		—			—			—			—
Consolidated	$	353,075		$	359,412		$	681,103		$	682,243
Operating Income
Vehicle Control	$	19,273		$	16,059		$	36,648		$	36,403
Temperature Control		5,800			10,523			7,884			14,685
Engineered Solutions		6,163			5,109			11,810			11,397
Other		(4,058	)		(3,798	)		(8,418	)		(7,677	)
Consolidated	$	27,178		$	27,893		$	47,924		$	54,808

(a) There are no intersegment sales among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

For the disaggregation of our net sales from contracts with customers by major product group and geographic area within each of our operating segments, see Note 17, “Net Sales.”

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Net Sales

6 Months Ended

Jun. 30, 2023

Net Sales [Abstract]

Net Sales

Note 17.  Net Sales

Disaggregation of Net Sales

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.

Major Product Group

The Vehicle Control operating segment generates its revenues from core aftermarket sales of ignition, emissions, and fuel delivery, electrical and safety, and wire sets and other product categories.  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 following table summarizes consolidated net sales by major product group within each operating segment for the three months and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	113,589	$	111,581	$	229,672	$	220,730
Electrical and Safety		52,867		57,054		104,671		109,311
Wire Sets and Other		17,333		17,136		34,023		32,994
Total Vehicle Control		183,789		185,771		368,366		363,035
Temperature Control
AC System Components		74,449		81,608		120,201		128,982
Other Thermal Components		22,625		24,029		49,279		49,713
Total Temperature Control		97,074		105,637		169,480		178,695
Engineered Solutions
Commercial Vehicle		26,742		19,503		46,599		40,954
Construction/Agriculture		8,103		11,222		20,898		22,206
Light Vehicle		23,548		23,039		46,514		49,114
All Other		13,819		14,240		29,246		28,239
Total Engineered Solutions		72,212		68,004		143,257		140,513
Other		—		—		—		—
Total	$	353,075	$	359,412	$	681,103	$	682,243

Geographic Area

We sell our line of products primarily in the United States, with additional sales in Canada, Mexico, Europe, Asia and Latin America.  Sales are attributed to countries based upon the location of the customer.  Our sales are substantially denominated in U.S. dollars.

The following tables provide disaggregation of net sales information by geographic area within each operating segment for the three months and six months ended June 30, 2023 and 2022 (in thousands):

Three months ended June 30, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	165,198	$	92,099	$	44,565	$	—	$	301,862
Canada		8,834		4,926		6,126		—		19,886
Europe		248		—		14,914		—		15,162
Mexico		8,179		18		2,038		—		10,235
Asia		88		—		4,273		—		4,361
Other foreign		1,242		31		296		—		1,569
Total	$	183,789	$	97,074	$	72,212	$	—	$	353,075

Three months ended June 30, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	171,083	$	101,204	$	50,311	$	—	$	322,598
Canada		7,205		4,089		3,943		—		15,237
Europe		176		20		10,251		—		10,447
Mexico		6,000		105		666		—		6,771
Asia		78		21		2,565		—		2,664
Other foreign		1,229		198		268		—		1,695
Total	$	185,771	$	105,637	$	68,004	$	—	$	359,412

Six months ended June 30, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	331,610	$	161,670	$	88,771	$	—	$	582,051
Canada		17,164		7,681		11,364		—		36,209
Europe		446		—		29,998		—		30,444
Mexico		16,766		18		3,806		—		20,590
Asia		150		20		8,327		—		8,497
Other foreign		2,230		91		991		—		3,312
Total	$	368,366	$	169,480	$	143,257	$	—	$	681,103

Six months ended June 30, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	332,154	$	170,516	$	97,200	$	—	$	599,870
Canada		15,913		7,588		7,445		—		30,946
Europe		368		35		21,581		—		21,984
Mexico		12,083		189		2,290		—		14,562
Asia		158		43		10,966		—		11,167
Other foreign		2,359		324		1,031		—		3,714
Total	$	363,035	$	178,695	$	140,513	$	—	$	682,243

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 18.  Commitments and Contingencies

Asbestos

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.  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. In accordance with the related purchase agreement, we agreed to assume the liabilities for all new claims filed on or after September 2001. Our ultimate exposure will depend upon the number of claims filed against us on or after September 2001, and the amounts paid for settlements, awards of asbestos-related damages, and defense of such claims. At June 30, 2023, approximately 1,465 cases were outstanding for which we may be responsible for any related liabilities.  Since inception in September 2001 through June 30, 2023, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $68.3 million.  We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.

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.  As is our accounting policy, we consider the advice of actuarial consultants with experience in assessing asbestos-related liabilities to estimate our potential claim liability; and perform an actuarial evaluation in the third quarter of each year and whenever events or changes in circumstances indicate that additional provisions may be necessary.  The methodology used to project asbestos-related liabilities and costs in our actuarial study considered: (1) historical data available from publicly available studies; (2) an analysis of our recent claims history to estimate likely filing rates into the future; (3) an analysis of our currently pending claims; (4) an analysis of our settlements and awards of asbestos-related damages to date; and (5) an analysis of closed claims with pay ratios and lag patterns in order to develop average future settlement values.  Based on the information contained in the actuarial study and all other available information considered by us, we have concluded that no amount within the range of settlement payments and awards of asbestos-related damages was more likely than any other and, therefore, in assessing our asbestos liability we compare the low end of the range to our recorded liability to determine if an adjustment is required.

In accordance with our policy to perform an annual actuarial evaluation in the third quarter of each year, an actuarial study was performed as of August 31, 2022.  The results of the August 31, 2022 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $68.8 million to $111.6 million for the period through 2065.  The change from the prior year study, which was as of August 31,2021, was a $7.9 million increase for the low end of the range and an $11.4 million increase for the high end of the range.  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, 2022 actuarial study, in September 2022 we increased our asbestos liability to $68.8 million, the low end of the range, and recorded an incremental pre-tax provision of $18.5 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, 2022 study, to range from $53.2 million to $105.7 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 $4.5 million and $9.5 million for the six months ended June 30, 2023 and 2022, 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. Given the uncertainties associated with projecting such matters into the future and other factors outside our control, we can give no assurance that additional provisions will not be required. We will continue to monitor events and changes in circumstances surrounding these potential liabilities in determining whether to perform additional actuarial evaluations and whether additional provisions may be necessary.  At the present time, however, we do not believe that any additional provisions would be reasonably likely to have a material adverse effect on our liquidity or consolidated financial position.

Other Litigation

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.  On May 11, 2023, we were found liable for approximately $11 million.  Although it is expected that the Court will finalize its judgment by the end of the third quarter of 2023, we recorded a pre-tax provision of $11 million in earnings (loss) from discontinued operations in the accompanying statement of operations in the second quarter of 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.  Although these legal claims and legal proceedings are subject to inherent uncertainties, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the ultimate outcome of these matters will not, either individually or in the aggregate, have a material adverse effect on our business, financial condition or results of operations.  We may at any time determine that settling any of these matters is in our best interests, which settlement may include substantial payments.  Although we cannot currently predict the specific amount of any liability that may ultimately arise with respect to any of these matters, we will record provisions when the liability is considered probable and reasonably estimable.  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. Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

Warranties

We generally warrant our products against certain manufacturing and other defects.  These product warranties are provided for specific periods of time of the product depending on the nature of the product.  As of June 30, 2023 and 2022, we have accrued $23.6 million and $23.8 million, respectively, for estimated product warranty claims included in accrued customer returns.  The accrued product warranty costs are based primarily on historical experience of actual warranty claims.

The following table provides the changes in our product warranties (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Balance, beginning of period	$	20,600		$	20,711		$	19,667		$	17,463
Liabilities accrued for current year sales		30,047			30,295			55,840			52,921
Settlements of warranty claims		(27,061	)		(27,240	)		(51,921	)		(46,618	)
Balance, end of period	$	23,586		$	23,766		$	23,586		$	23,766

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2023

Basis of Presentation [Abstract]

Principles of Consolidation

Standard Motor Products, Inc. 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 custom-engineered solutions for vehicle control and thermal management categories in diversified end markets.  We sell our products primarily to automotive aftermarket 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.

The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.  The unaudited consolidated financial statements include our accounts and all domestic and international companies in which we have more than a 50% equity ownership, except in instances where the minority shareholder maintains substantive participating rights, in which case we follow the equity method of accounting.  In instances where we have more than a 50% equity ownership and the minority shareholder does not maintain substantive participating rights, our consolidated financial statements include the accounts of the company on a consolidated basis with its net income and equity reported at amounts attributable to both our equity position and that of the noncontrolling interest.  Investments in unconsolidated affiliates are accounted for on the equity method, as we do not have a controlling financial interest but have the ability to exercise significant influence.  All significant inter-company items have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.

Reclassification

Reclassification

Certain prior period amounts in the accompanying consolidated financial statements and related notes have been reclassified to conform to the 2023 presentation.

Reportable Segments

Reportable Segments

Beginning on January 1, 2023, we reorganized our business into three operating segments – Engineered Solutions, Vehicle Control and Temperature Control. The new operating segment structure provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment, better aligns our operating segments with our strategic focus on diversification, and provides greater transparency into our positioning to capture growth opportunities in the future.  Prior period segment results have been reclassified to conform to our operating segment reorganization. For additional information related to our segment reorganization, see Note 7, “Goodwill and Acquired Intangible Assets,” Note 16, “Industry Segments,” and Note 17, “Net Sales.”

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Standards that are not yet adopted as of June 30, 2023

There are no recently issued accounting pronouncements that have not been adopted as of June 30, 2023 that could have a material impact on our financial statements.

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Business Acquisitions and Investments (Tables)

6 Months Ended

Jun. 30, 2023

Kade [Member]

Business Acquisition [Line Items]

Allocation of Purchase Price, Assets Acquired And Liabilities Assumed

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):

Purchase price				$	3,176
Assets acquired and liabilities assumed:
Receivables	$	790
Inventory		829
Other current assets (1)		1,003
Property, plant and equipment, net		63
Operating lease right-of-use assets		401
Intangible assets		2,395
Goodwill		766
Current liabilities		(1,977	)
Noncurrent operating lease liabilities		(328	)
Deferred income taxes		(766	)
Net assets acquired				$	3,176

(1) The other current assets balance includes $1 million of cash acquired.

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Restructuring and Integration Expenses (Tables)

6 Months Ended

Jun. 30, 2023

Restructuring and Integration Expenses [Abstract]

Restructuring and Integration Expense

The aggregated liabilities included in “sundry payables and accrued expenses” and “other accrued liabilities” in the consolidated balance sheet relating to the restructuring and integration activities as of June 30, 2023 and December 31, 2022 and for the six months ended June 30, 2023, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2022	$	1,521		$	—		$	1,521
Restructuring and integration costs:
Amounts provided for during 2023 (1)		969			237			1,206
Cash payments		(800	)		(237	)		(1,037	)
Foreign currency exchange rate changes		20			—			20
Exit activity liability at June 30, 2023	$	1,710		$	—		$	1,710

(1) Restructuring and integration expenses incurred during the six months ended June 30, 2023 consist of $0.4 million in our Vehicle Control segment, $0.7 million in our Temperature Control segment and $0.1 million in our Engineered Solutions segment.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Inventories [Abstract]

Inventories

Inventories, which are stated at the lower of cost (determined by means of the first-in, first-out method) and net realizable value, consist of the following:

	June 30, 2023		December 31, 2022
	(In thousands)
Finished goods	$	300,430	$	324,362
Work in process		16,126		14,099
Raw materials		182,578		190,254
Subtotal		499,134		528,715
Unreturned customer inventories		19,722		19,695
Total inventories	$	518,856	$	548,410

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Goodwill and Acquired Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Acquired Intangible Assets [Abstract]

Acquired Identifiable Intangible Assets

Acquired identifiable intangible assets consist of the following:

	June 30, 2023			December 31, 2022
	(In thousands)
Customer relationships	$	159,448		$	158,717
Patents, developed technology and intellectual property		14,123			14,123
Trademarks and trade names		8,880			8,880
Non-compete agreements		3,291			3,282
Supply agreements		800			800
Leaseholds		160			160
Total acquired intangible assets		186,702			185,962
Less accumulated amortization (1)		(91,756	)		(86,945	)
Net acquired intangible assets	$	94,946		$	99,017

(1) Applies to all intangible assets, except for trademarks and trade names totaling $2.6 million, which have indefinite useful lives and, as such, are not being amortized.

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Quantitative Disclosures Related to Operating Leases

The following tables provide quantitative disclosures related to our operating leases and include all operating leases acquired from the date of acquisition (in thousands):

Balance Sheet Information	June 30, 2023			December 31, 2022
Assets
Operating lease right-of-use assets	$	73,093		$	49,838
Liabilities
Sundry payables and accrued expenses	$	11,883		$	10,763
Noncurrent operating lease liabilities		64,271			40,709
Total operating lease liabilities	$	76,154		$	51,472
Weighted Average Remaining Lease Term
Operating leases	8.3 Years			7 Years
Weighted Average Discount Rate
Operating leases		4.4	%		3.7	%

Expense and Cash Flow Information	Three Months Ended June 30,
	2023		2022
Lease Expense
Operating lease expense (a)	$	3,776	$	2,711

	Six Months Ended June 30,
	2023		2022
Lease Expense
Operating lease expense (a)	$	6,885	$	5,541
Supplemental Cash Flow Information
Cash paid for the amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,476	$	5,397
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases (b)	$	30,830	$	4,458

(a) Excludes expenses of approximately $0.4 million and $1.1 million for the three and six months ended June 30, 2023, respectively, and approximately $0.7 million and $1.1 million for the comparable periods in 2022, respectively, related 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 is not material.

(b) Includes $27.8 million of right-of-use assets related to the lease modification and extension for our distribution center and office in Lewisville, Texas during the six months ended June 30, 2023.

Minimum Lease Payments

At June 30, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

2023	$	5,861
2024		12,899
2025		11,194
2026		9,892
2027		8,867
Thereafter		44,929
Total lease payments	$	93,642
Less: Interest		(17,488	)
Present value of lease liabilities	$	76,154

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Credit Facilities and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2023

Credit Facilities and Long-Term Debt [Abstract]

Summary of Total Debt Outstanding

Total debt outstanding is summarized as follows:

	June 30, 2023		December 31, 2022
	(In thousands)
Credit facility – term loan due 2027	$	95,000	$	97,500
Credit facility – revolver due 2027		128,000		142,000
Other		216		120
Total debt	$	223,216	$	239,620
Current maturities of debt	$	58,728	$	55,031
Long-term debt		164,488		184,589
Total debt	$	223,216	$	239,620

Maturities of Debt

As of June 30, 2023, maturities of debt through 2027, assuming no prepayments, are as follows (in thousands):

	Revolving Credit Facility			Term Loan Facility			Polish Overdraft Facility and Other Debt			Total
Remainder of 2023	$	—		$	2,500		$	14		$	2,514
2024		—			5,000			28			5,028
2025		—			5,000			30			5,030
2026		—			7,500			46			7,546
2027		128,000			75,000			98			203,098
Total	$	128,000		$	95,000		$	216		$	223,216
Less: current maturities		(53,700	)		(5,000	)		(28	)		(58,728	)
Long-term debt	$	74,300		$	90,000		$	188		$	164,488

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2023

Accumulated Other Comprehensive Income [Abstract]

Changes in Accumulated Other Comprehensive Income by Component

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

	Three Months Ended June 30, 2023
	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at March 31, 2023  attributable to SMP	$	(13,481	)	$	34		$	2,446			$	(11,001	)
Other comprehensive income before reclassifications		1,247			—			2,262		(1)		3,509
Amounts reclassified from accumulated other comprehensive income		—			(4	)		(431	)			(435	)
Other comprehensive income, net		1,247			(4	)		1,831				3,074
Balance at June 30, 2023 attributable to SMP	$	(12,234	)	$	30		$	4,277			$	(7,927	)

	Six Months Ended June 30, 2023
	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at December 31, 2022 attributable to SMP	$	(16,330	)	$	37		$	3,823			$	(12,470	)
Other comprehensive income before reclassifications		4,096			—			1,223		(1)		5,319
Amounts reclassified from accumulated other comprehensive income		—			(7	)		(769	)			(776	)
Other comprehensive income, net		4,096			(7	)		454				4,543
Balance at June 30, 2023 attributable to SMP	$	(12,234	)	$	30		$	4,277			$	(7,927	)

(1) Consists of the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $3.1 million ($2.3 million, net of tax) and $1.6 million ($1.2 million, net of tax) in the three months and six months ended June 30, 2023, respectively, net of cash settlements payments of $0.6 million ($0.4 million, net of tax) and $1 million ($0.8 million, net of tax) in the three months and six months ended June 30, 2023, respectively.

Reclassifications Out of Accumulated Other Comprehensive Income

Reclassifications Out of Accumulated Other Comprehensive Income (in thousands)

	Three Months Ended			Six Months Ended
Details About Accumulated Other Comprehensive Income Components	June 30, 2023			June 30, 2023
Derivative cash flow hedge:
Unrecognized gain (loss) (1)	$	(583	)	$	(1,039	)
Postretirement Benefit Plans:
Unrecognized gain (loss) (2)		(5	)		(11	)
Total before income tax		(588	)		(1,050	)
Income tax expense		(153	)		(274	)
Total reclassifications attributable to SMP	$	(435	)	$	(776	)

(1) 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.

(2) 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, net in our consolidated statements of operations (see Note 12, “Employee Benefits,” for additional information).

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Stock-Based Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2023

Stock-Based Compensation Plans [Abstract]

Restricted and Performance-based Share Activity

Our restricted and performance-based share activity was as follows for the six months ended June 30, 2023:

	Shares			Weighted Average Grant Date Fair Value Per Share
Balance at December 31, 2022		880,829		$	31.79
Granted		6,000			31.63
Vested		(56,978	)		32.37
Forfeited		(3,875	)		40.12
Balance at June 30, 2023		825,976		$	31.76

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Measurements [Abstract]

Summary of Estimated Fair Values, Carrying Amounts and Classification under Fair Value Hierarchy

The following is a summary of the estimated fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments at June 30, 2023 and December 31, 2022 (in thousands):

		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Cash and cash equivalents	LEVEL 1	$	23,019	$	23,019	$	21,150	$	21,150
Deferred compensation	LEVEL 1		23,104		23,104		20,190		20,190
Short term borrowings	LEVEL 1		58,728		58,728		55,031		55,031
Long-term debt	LEVEL 1		164,488		164,488		184,589		184,589
Cash flow interest rate swap	LEVEL 2		5,786		5,786		5,174		5,174

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Reconciliations of Earnings Available to Common Stockholders and Shares used in Calculating Basic and Dilutive Net Earnings per Common Share

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 per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net Earnings Attributable to SMP -
Earnings from continuing operations	$	18,358		$	20,792		$	31,056		$	41,354
Loss from discontinued operations		(9,221	)		(1,666	)		(10,001	)		(2,782	)
Net earnings attributable to SMP	$	9,137		$	19,126		$	21,055		$	38,572
Basic Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	0.85		$	0.96		$	1.43		$	1.89
Loss from discontinued operations per common share		(0.43	)		(0.08	)		(0.46	)		(0.13	)
Net earnings per common share attributable to SMP	$	0.42		$	0.88		$	0.97		$	1.76
Weighted average common shares outstanding		21,689			21,758			21,650			21,868
Diluted Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	0.83		$	0.93		$	1.40		$	1.85
Loss from discontinued operations per common share		(0.42	)		(0.07	)		(0.45	)		(0.13	)
Net earnings per common share attributable to SMP	$	0.41		$	0.86		$	0.95		$	1.72
Weighted average common shares outstanding		21,689			21,758			21,650			21,868
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock and performance-based stock		494			498			490			505
Weighted average common shares outstanding – Diluted		22,183			22,256			22,140			22,373

Anti-dilutive Securities Excluded from Computation of Earnings per Share

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):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Restricted and performance-based shares		273		268		286		262

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Industry Segments (Tables)

6 Months Ended

Jun. 30, 2023

Industry Segments [Abstract]

Sales and Operating Income by Operating Segments

The following tables show our net sales and operating income for each reportable operating segment (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Net Sales (a)
Vehicle Control	$	183,789		$	185,771		$	368,366		$	363,035
Temperature Control		97,074			105,637			169,480			178,695
Engineered Solutions		72,212			68,004			143,257			140,513
Other		—			—			—			—
Consolidated	$	353,075		$	359,412		$	681,103		$	682,243
Operating Income
Vehicle Control	$	19,273		$	16,059		$	36,648		$	36,403
Temperature Control		5,800			10,523			7,884			14,685
Engineered Solutions		6,163			5,109			11,810			11,397
Other		(4,058	)		(3,798	)		(8,418	)		(7,677	)
Consolidated	$	27,178		$	27,893		$	47,924		$	54,808

(a) There are no intersegment sales among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

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Net Sales (Tables)

6 Months Ended

Jun. 30, 2023

Net Sales [Abstract]

Disaggregation of Net Sales

The following table summarizes consolidated net sales by major product group within each operating segment for the three months and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	113,589	$	111,581	$	229,672	$	220,730
Electrical and Safety		52,867		57,054		104,671		109,311
Wire Sets and Other		17,333		17,136		34,023		32,994
Total Vehicle Control		183,789		185,771		368,366		363,035
Temperature Control
AC System Components		74,449		81,608		120,201		128,982
Other Thermal Components		22,625		24,029		49,279		49,713
Total Temperature Control		97,074		105,637		169,480		178,695
Engineered Solutions
Commercial Vehicle		26,742		19,503		46,599		40,954
Construction/Agriculture		8,103		11,222		20,898		22,206
Light Vehicle		23,548		23,039		46,514		49,114
All Other		13,819		14,240		29,246		28,239
Total Engineered Solutions		72,212		68,004		143,257		140,513
Other		—		—		—		—
Total	$	353,075	$	359,412	$	681,103	$	682,243

Geographic Area

We sell our line of products primarily in the United States, with additional sales in Canada, Mexico, Europe, Asia and Latin America.  Sales are attributed to countries based upon the location of the customer.  Our sales are substantially denominated in U.S. dollars.

The following tables provide disaggregation of net sales information by geographic area within each operating segment for the three months and six months ended June 30, 2023 and 2022 (in thousands):

Three months ended June 30, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	165,198	$	92,099	$	44,565	$	—	$	301,862
Canada		8,834		4,926		6,126		—		19,886
Europe		248		—		14,914		—		15,162
Mexico		8,179		18		2,038		—		10,235
Asia		88		—		4,273		—		4,361
Other foreign		1,242		31		296		—		1,569
Total	$	183,789	$	97,074	$	72,212	$	—	$	353,075

Three months ended June 30, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	171,083	$	101,204	$	50,311	$	—	$	322,598
Canada		7,205		4,089		3,943		—		15,237
Europe		176		20		10,251		—		10,447
Mexico		6,000		105		666		—		6,771
Asia		78		21		2,565		—		2,664
Other foreign		1,229		198		268		—		1,695
Total	$	185,771	$	105,637	$	68,004	$	—	$	359,412

Six months ended June 30, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	331,610	$	161,670	$	88,771	$	—	$	582,051
Canada		17,164		7,681		11,364		—		36,209
Europe		446		—		29,998		—		30,444
Mexico		16,766		18		3,806		—		20,590
Asia		150		20		8,327		—		8,497
Other foreign		2,230		91		991		—		3,312
Total	$	368,366	$	169,480	$	143,257	$	—	$	681,103

Six months ended June 30, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	332,154	$	170,516	$	97,200	$	—	$	599,870
Canada		15,913		7,588		7,445		—		30,946
Europe		368		35		21,581		—		21,984
Mexico		12,083		189		2,290		—		14,562
Asia		158		43		10,966		—		11,167
Other foreign		2,359		324		1,031		—		3,714
Total	$	363,035	$	178,695	$	140,513	$	—	$	682,243

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies [Abstract]

Changes in Product Warranties

The following table provides the changes in our product warranties (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Balance, beginning of period	$	20,600		$	20,711		$	19,667		$	17,463
Liabilities accrued for current year sales		30,047			30,295			55,840			52,921
Settlements of warranty claims		(27,061	)		(27,240	)		(51,921	)		(46,618	)
Balance, end of period	$	23,586		$	23,766		$	23,586		$	23,766

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Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2023 Segment
Basis of Presentation [Abstract]
Equity ownership in entities included in consolidated financial statements, minimum	50.00%
Number of operating segments	3

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Business Acquisitions and Investments, Investment in Foshan Che Yijia New Energy Technology Co., Ltd (Details) ¥ in Millions	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 CNY (¥)	Aug. 31, 2019 USD ($)
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	$ 41,557,000	$ 41,745,000
Foshan Che Yijia New Energy Technology Co., Ltd. [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Percentage of equity interest acquired			3.55%	3.55%	29.00%
Investments in unconsolidated affiliates			$ 242,000	¥ 1.7	$ 5,100,000
Foshan Che Yijia New Energy Technology Co., Ltd. [Member] | Minimum [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Percentage of equity interest acquired			29.00%	29.00%
Foshan Che Yijia New Energy Technology Co., Ltd. [Member] | Maximum [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Percentage of equity interest acquired			33.00%	33.00%

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Business Acquisitions and Investments, Acquisition of Capital Stock of Kade Trading GmbH (Details) $ in Thousands, € in Millions		1 Months Ended			3 Months Ended		6 Months Ended
		Oct. 31, 2022 USD ($)	Oct. 31, 2022 EUR (€)	Sep. 30, 2021 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Oct. 31, 2022 EUR (€)
Allocation of the Purchase Price, Assets Acquired and Liabilities Assumed [Abstract]
Business acquisition annual sales	[1]				$ 353,075	$ 359,412	$ 681,103	$ 682,243
Assets acquired and liabilities assumed [Abstract]
Goodwill					132,391		132,391		$ 132,087
Kade [Member]
Business Combination, Description [Abstract]
Percentage of entity acquired		100.00%								100.00%
Allocation of the Purchase Price, Assets Acquired and Liabilities Assumed [Abstract]
Payment to acquire Business		$ 2,700	€ 2.7
Earn-out based performance obligation in 2024 and 2025		500								€ 0.5
Business acquisition annual sales		6,000
Purchase Price		3,176
Assets acquired and liabilities assumed [Abstract]
Receivables		790
Inventory		829
Other current assets	[2]	1,003
Property, plant, and equipment, net		63
Operating lease right-of-use assets		401
Intangible assets		2,395
Goodwill		766
Current liabilities		(1,977)
Noncurrent operating lease liabilities		(328)
Deferred income taxes		(766)
Net assets acquired		$ 3,176
Cash acquired				$ 1,000
Revenues from acquisition date					$ 1,700		$ 3,400
Kade [Member] | Customer Relationships [Member]
Assets acquired and liabilities assumed [Abstract]
Estimated useful life of intangible assets					15 years		15 years

[1] There are no intersegment sales among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

[2] The other current assets balance includes $1 million of cash acquired.

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Restructuring and Integration Expenses (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023		Jun. 30, 2022
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period				$ 1,521
Restructuring and integration costs provided for during 2023		$ 294	$ 3	1,206	[1]	$ 44
Cash payments				(1,037)
Foreign currency exchange rate changes				20
Exit activity liability, end of period		1,710		1,710
Restructuring Costs [Abstract]
Employee severance costs				1,000
Expenses related to relocation of machinery and equipment				200
Additional restructuring costs				1,600
Vehicle Control Segment [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during 2023				400
Temperature Control Segment [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during 2023				700
Engineered Solutions Segment [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during 2023				100
Workforce Reduction [Member]
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period				1,521
Restructuring and integration costs provided for during 2023	[1]			969
Cash payments				(800)
Foreign currency exchange rate changes				20
Exit activity liability, end of period		1,710		1,710
Other Exit Costs [Member]
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period				0
Restructuring and integration costs provided for during 2023	[1]			237
Cash payments				(237)
Foreign currency exchange rate changes				0
Exit activity liability, end of period		$ 0		$ 0

[1] Restructuring and integration expenses incurred during the six months ended June 30, 2023 consist of $0.4 million in our Vehicle Control segment, $0.7 million in our Temperature Control segment and $0.1 million in our Engineered Solutions segment.

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Sale of Receivables (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Sale of Receivables [Abstract]
Sale of receivables to financial institutions	$ 211.6	$ 218.4	$ 382.5	$ 374.1
Receivables not yet collected	10.7		10.7		$ 0.0
Charge related to sale of receivables	$ 12.4	$ 7.7	$ 21.5	$ 11.2

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventories [Abstract]
Finished goods	$ 300,430	$ 324,362
Work in process	16,126	14,099
Raw materials	182,578	190,254
Subtotal	499,134	528,715
Unreturned customer inventories	19,722	19,695
Total inventories	$ 518,856	$ 548,410

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Goodwill and Acquired Intangible Assets, Identifiable Intangible Assets (Details) - USD ($) $ in Thousands		Jun. 30, 2023	Dec. 31, 2022
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		$ 186,702	$ 185,962
Less accumulated amortization	[1]	(91,756)	(86,945)
Net acquired intangible assets		94,946	99,017
Customer Relationships [Member]
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		159,448	158,717
Patents, Developed Technology and Intellectual Property [Member]
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		14,123	14,123
Trademarks and Trade Names [Member]
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		8,880	8,880
Acquired indefinite-lived intangible assets		2,600
Non-compete Agreements [Member]
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		3,291	3,282
Supply Agreements [Member]
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		800	800
Leaseholds [Member]
Indefinite Lived Intangible Assets [Abstract]
Acquired intangible assets		$ 160	$ 160

[1] Applies to all intangible assets, except for trademarks and trade names totaling $2.6 million, which have indefinite useful lives and, as such, are not being amortized.

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Goodwill and Acquired Intangible Assets, Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Amortization of acquired intangible assets [Abstract]
Amortization expense	$ 2.1	$ 2.2	$ 4.3	$ 4.3
Estimated amortization expense, remainder of 2023	4.2		4.2
Estimated amortization expense in year 2024	8.4		8.4
Estimated amortization expense in year 2025	8.4		8.4
Estimated amortization expense in year 2026	8.4		8.4
Estimated amortization expense in years 2027 through 2041	$ 62.9		$ 62.9

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Leases (Details) $ in Thousands		1 Months Ended	3 Months Ended		6 Months Ended
		May 31, 2023 USD ($) ft²	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Quantitative Lease Disclosures [Abstract]
Renewal option period			5 years		5 years
Assets [Abstract]
Operating lease right-of-use assets		$ 26,100	$ 73,093		$ 73,093		$ 49,838
Liabilities [Abstract]
Sundry payables and accrued expenses			11,883		11,883		10,763
Noncurrent operating lease liabilities			64,271		64,271		40,709
Total operating lease liabilities			$ 76,154		$ 76,154		$ 51,472
Operating Leases [Abstract]
Weighted average remaining lease term			8 years 3 months 18 days		8 years 3 months 18 days		7 years
Weighted average discount rate			4.40%		4.40%		3.70%
Lease Expense [Abstract]
Operating lease expense	[1]		$ 3,776	$ 2,711	$ 6,885	$ 5,541
Excluded expenses of non lease			400	$ 700	1,100	1,100
Cash paid for the amounts included in the measurement of lease liabilities [Abstract]
Operating cash flows from operating leases					5,476	5,397
Right-of-use assets obtained in exchange for new lease obligations [Abstract]
Operating leases	[2]				30,830	$ 4,458
Right-of-use assets related to lease modifications and extension					27,800
Minimum Lease Payments [Abstract]
2023			5,861		5,861
2024			12,899		12,899
2025			11,194		11,194
2026			9,892		9,892
2027			8,867		8,867
Thereafter			44,929		44,929
Total lease payments			93,642		93,642
Less: Interest			(17,488)		(17,488)
Total operating lease liabilities			76,154		76,154		$ 51,472
Area of building leased under operating lease | ft²		574,932
Base rent		$ 3,000
Percentage of annual increase in base rent		3.00%
Operating lease cost taxes and maintenance		$ 500
Operating lease right-of-use assets		$ 26,100	$ 73,093		$ 73,093		$ 49,838
Maximum [Member]
Quantitative Lease Disclosures [Abstract]
Remaining operating lease terms			11 years		11 years

[1] Excludes expenses of approximately $0.4 million and $1.1 million for the three and six months ended June 30, 2023, respectively, and approximately $0.7 million and $1.1 million for the comparable periods in 2022, respectively, related 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 is not material.

[2] Includes $27.8 million of right-of-use assets related to the lease modification and extension for our distribution center and office in Lewisville, Texas during the six months ended June 30, 2023.

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Credit Facilities and Long-Term Debt, Total Debt Outstanding (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Instruments [Abstract]
Total debt	$ 223,216	$ 239,620
Current maturities of debt	58,728	55,031
Long-term debt	164,488	184,589
Credit Facility - Term Loan Due 2027 [Member]
Debt Instruments [Abstract]
Total debt	95,000	97,500
Current maturities of debt	5,000
Long-term debt	90,000
Credit Facility - Revolver Due 2027 [Member]
Debt Instruments [Abstract]
Total debt	128,000	142,000
Current maturities of debt	53,700
Long-term debt	74,300
Other [Member]
Debt Instruments [Abstract]
Total debt	216	$ 120
Current maturities of debt	28
Long-term debt	$ 188

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Credit Facilities and Long-Term Debt, Term Loan and Revolving Credit Facilities (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($) Installment	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Line of Credit Facility [Abstract]
Current portion of debt	$ 53,700		$ 50,000
Senior Secured Revolving Credit Facility [Member]
Line of Credit Facility [Abstract]
Outstanding borrowings under credit facility			239,500
Outstanding letters of credit			$ 2,400
Weighted average interest rate			5.20%
Senior Secured Revolving Credit Facility [Member] | Alternate Base Rate [Member]
Line of Credit Facility [Abstract]
Average daily loan balance outstanding		$ 10,800	$ 5,600
Term Loan and Revolving Credit Facilities [Member]
Line of Credit Facility [Abstract]
Maximum borrowing capacity		500,000
Maturity date	Jun. 01, 2027
Frequency of periodic payment	quarterly
Debt instrument, extension period	1 year
Borrowing base	$ 168,000
Maximum consolidated EBITDA	1
Net Leverage Ratio	250.00%
Outstanding borrowings under credit facility	$ 223,000
Current portion of debt	58,700		55,000
Long-term debt	164,300		184,500
Outstanding letters of credit	$ 2,400
Weighted average interest rate	5.60%
Term Loan and Revolving Credit Facilities [Member] | SOFR [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	0.10%
Term of variable rate	1 month
Interest rate periods	one, three or six months
Outstanding borrowings under credit facility	$ 223,000		$ 237,000
Weighted average interest rate			5.20%
Term Loan and Revolving Credit Facilities [Member] | Federal Funds Rate [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	0.50%
Term Loan and Revolving Credit Facilities [Member] | Term Benchmark Borrowings [Member] | Minimum [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	1.00%
Term Loan and Revolving Credit Facilities [Member] | Term Benchmark Borrowings [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	2.00%
Term Loan and Revolving Credit Facilities [Member] | Alternate Base Rate [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	1.00%
Outstanding borrowings under credit facility			$ 2,500
Weighted average interest rate			8.00%
Average daily loan balance outstanding	$ 200
Term Loan and Revolving Credit Facilities [Member] | Alternate Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	0.00%
Term Loan and Revolving Credit Facilities [Member] | Alternate Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Margin on variable rate	1.00%
Term Loan Facility [Member]
Line of Credit Facility [Abstract]
Maximum borrowing capacity		100,000
Term Loan Facility [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Number of extensions of maturity date | Installment	2
Term Loan Facility [Member] | First Four Years [Member]
Line of Credit Facility [Abstract]
Periodic payment amortization percentage	1.25%
Term Loan Facility [Member] | Fifth Year [Member]
Line of Credit Facility [Abstract]
Periodic payment amortization percentage	2.50%
Revolving Credit Facility [Member]
Line of Credit Facility [Abstract]
Maximum borrowing capacity		400,000
Letter of Credit Sublimit [Member]
Line of Credit Facility [Abstract]
Maximum borrowing capacity	$ 25,000
Swing Line Loans [Member]
Line of Credit Facility [Abstract]
Maximum borrowing capacity	25,000
Interest Rate Swap Agreement [Member]
Line of Credit Facility [Abstract]
Maximum borrowing capacity	$ 100,000
Term of variable rate	1 month
Period of agreement	7 years
Outstanding borrowings under credit facility	$ 100,000	$ 100,000	$ 100,000

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Credit Facilities and Long-Term Debt, Polish Overdraft Facility (Details) - Polish Overdraft Facility [Member] zł in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 PLN (zł)
Line of Credit Facility [Abstract]
Maximum borrowing capacity			$ 7.3	zł 30
Threshold percentage of borrowing capacity	85.00%
Threshold borrowing capacity limit	$ 6.2
Overdraft facility renewal period	3 months
Overdraft facility cancellation period	30 days
Overdraft facility	$ 0.0	$ 0.0
1M WIBOR [Member]
Line of Credit Facility [Abstract]
Basis spread on variable rate	1.50%
1M EURIBOR [Member]
Line of Credit Facility [Abstract]
Basis spread on variable rate	1.50%
Mid-Point of Fed Target Range [Member]
Line of Credit Facility [Abstract]
Basis spread on variable rate	1.75%

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Credit Facilities and Long-Term Debt, Maturities of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Maturities of Debt [Abstract]
Remainder of 2023	$ 2,514
2024	5,028
2025	5,030
2026	7,546
2027	203,098
Total debt	223,216	$ 239,620
Less: current maturities	(58,728)	(55,031)
Long-term debt	164,488	184,589
Revolving Credit Facility [Member]
Maturities of Debt [Abstract]
Remainder of 2023	0
2024	0
2025	0
2026	0
2027	128,000
Total debt	128,000	142,000
Less: current maturities	(53,700)
Long-term debt	74,300
Term Loan Facility [Member]
Maturities of Debt [Abstract]
Remainder of 2023	2,500
2024	5,000
2025	5,000
2026	7,500
2027	75,000
Total debt	95,000	97,500
Less: current maturities	(5,000)
Long-term debt	90,000
Polish Overdraft Facility and Other Debt [Member]
Maturities of Debt [Abstract]
Remainder of 2023	14
2024	28
2025	30
2026	46
2027	98
Total debt	216	$ 120
Less: current maturities	(28)
Long-term debt	$ 188

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Credit Facilities and Long-Term Debt, Deferred Financing Costs (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Deferred Financing Costs [Abstract]
Deferred financing costs	$ 1.8	$ 2.1
Deferred Finance Costs, Amortization [Abstract]
Remainder of 2023	0.2
2024	0.5
2025	0.5
2026	0.5
2027	$ 0.1

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Accumulated Other Comprehensive Income, Changes in Accumulated Other Comprehensive Income by Component (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
		Jun. 30, 2023	Jun. 30, 2023
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP			$ 610,020
Other comprehensive income before reclassifications		$ 3,509	5,319
Amounts reclassified from accumulated other comprehensive income		(435)	(776)
Other comprehensive income, net		3,074	4,543
Balance attributable to SMP		629,673	629,673
Reclassification out of Accumulated Other Comprehensive Income [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Unrecognized gain relating to change in fair value of cash flow interest rate hedge		3,100	1,600
Unrecognized gain relating to change in fair value of cash flow interest rate hedge, net of tax		2,300	1,200
Unrecognized gain, net of cash settlements		600	1,000
Unrecognized gain, net of cash settlements, net of tax		400	800
Accumulated Other Comprehensive Income (Loss) [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		(11,001)	(12,470)
Balance attributable to SMP		(7,927)	(7,927)
Foreign Currency Translation [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		(13,481)	(16,330)
Other comprehensive income before reclassifications		1,247	4,096
Amounts reclassified from accumulated other comprehensive income		0	0
Other comprehensive income, net		1,247	4,096
Balance attributable to SMP		(12,234)	(12,234)
Unrecognized Postretirement Benefit Costs (Credit) [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		34	37
Other comprehensive income before reclassifications		0	0
Amounts reclassified from accumulated other comprehensive income		(4)	(7)
Other comprehensive income, net		(4)	(7)
Balance attributable to SMP		30	30
Unrealized Derivative Gains (Losses) [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		2,446	3,823
Other comprehensive income before reclassifications	[1]	2,262	1,223
Amounts reclassified from accumulated other comprehensive income		(431)	(769)
Other comprehensive income, net		1,831	454
Balance attributable to SMP		$ 4,277	$ 4,277

[1] Consists of the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $3.1 million ($2.3 million, net of tax) and $1.6 million ($1.2 million, net of tax) in the three months and six months ended June 30, 2023, respectively, net of cash settlements payments of $0.6 million ($0.4 million, net of tax) and $1 million ($0.8 million, net of tax) in the three months and six months ended June 30, 2023, respectively.

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Accumulated Other Comprehensive Income, Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Details About Accumulated Other Comprehensive Income Components [Abstract]
Interest expense		$ 3,283	$ 1,821	$ 7,145	$ 2,626
Other non-operating income, net		802	1,927	1,027	3,376
Earnings from continuing operations before income taxes		24,697	27,999	41,806	55,558
Income tax expense		6,289	7,122	10,661	14,127
Net earnings attributable to SMP	[1]	9,137	$ 19,126	21,055	$ 38,572
Reclassification out of Accumulated Other Comprehensive Income [Member]
Details About Accumulated Other Comprehensive Income Components [Abstract]
Earnings from continuing operations before income taxes		(588)		(1,050)
Income tax expense		(153)		(274)
Net earnings attributable to SMP		(435)		(776)
Unrealized Derivative Gains (Losses) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Details About Accumulated Other Comprehensive Income Components [Abstract]
Interest expense	[2]	(583)		(1,039)
Unrecognized Postretirement Benefit Costs (Credit) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Details About Accumulated Other Comprehensive Income Components [Abstract]
Other non-operating income, net	[3]	$ (5)		$ (11)

[1] Throughout this Form 10Q, “SMP” refers to Standard Motor Products, Inc. and subsidiaries.

[2] 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.

[3] 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, net in our consolidated statements of operations (see Note 12, “Employee Benefits,” for additional information).

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Stock-Based Compensation Plans (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) Type $ / shares shares	Jun. 30, 2022 USD ($)
Restricted and Performance Stock Grants [Abstract]
Number of types of restricted stock | Type	2
Additional Disclosures [Abstract]
Compensation expense, gross | $	$ 3,633	$ 4,465
Restricted Shares [Member] | Minimum [Member]
Restricted and Performance Stock Grants [Abstract]
Expiration of vesting period	3 years
Restricted Shares [Member] | Employees [Member]
Restricted and Performance Stock Grants [Abstract]
Estimated forfeitures	5.00%
Restricted Shares [Member] | Executives [Member]
Restricted and Performance Stock Grants [Abstract]
Estimated forfeitures	0.00%
Restricted Shares [Member] | Directors [Member]
Restricted and Performance Stock Grants [Abstract]
Estimated forfeitures	0.00%
Restricted Shares [Member] | Age 60 [Member] | Executives [Member]
Restricted and Performance Stock Grants [Abstract]
Vesting percentage	25.00%
Vesting period before reaching age limit	2 months
Restricted Shares [Member] | Age 63 [Member] | Executives [Member]
Restricted and Performance Stock Grants [Abstract]
Vesting percentage	25.00%
Vesting period before reaching age limit	2 months
Restricted Shares [Member] | Age 65 [Member] | Executives [Member]
Restricted and Performance Stock Grants [Abstract]
Vesting percentage	100.00%
Vesting period before reaching age limit	2 months
Performance-based Shares [Member]
Restricted and Performance Stock Grants [Abstract]
Measuring period for performance-based shares	3 years
Performance-based Shares [Member] | Minimum [Member]
Restricted and Performance Stock Grants [Abstract]
Expiration of vesting period	3 years
Restricted and Performance-Based Shares [Member]
Restricted and performance-based stock, shares [Roll Forward]
Beginning of period (in shares)	880,829
Granted (in shares)	6,000
Vested (in shares)	(56,978)
Forfeited (in shares)	(3,875)
End of period (in shares)	825,976
Restricted and performance-based stock, weighted average grant date fair value per share [Roll Forward]
Beginning of period (in dollars per share) | $ / shares	$ 31.79
Granted (in dollars per share) | $ / shares	31.63
Vested (in dollars per share) | $ / shares	32.37
Forfeited (in dollars per share) | $ / shares	40.12
End of period (in dollars per share) | $ / shares	$ 31.76
Additional Disclosures [Abstract]
Compensation expense, gross | $	$ 3,200	3,900
Compensation expense, net of tax | $	2,400	$ 2,900
Unamortized compensation expense | $	$ 11,200
Restricted and Performance-Based Shares [Member] | Employees [Member]
Additional Disclosures [Abstract]
Weighted average period of recognition for unrecognized compensation expense	4 years
Restricted and Performance-Based Shares [Member] | Directors [Member]
Additional Disclosures [Abstract]
Weighted average period of recognition for unrecognized compensation expense	9 months 29 days
Restricted and Performance-Based Shares [Member] | Executives and Directors [Member] | Minimum [Member]
Restricted and Performance Stock Grants [Abstract]
Holding period for restricted and performance shares issued	1 year
Restricted and Performance-Based Shares [Member] | Executives and Directors [Member] | Maximum [Member]
Restricted and Performance Stock Grants [Abstract]
Holding period for restricted and performance shares issued	2 years
2016 Omnibus Incentive Plan [Member] | Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Abstract]
Shares authorized for issuance (in shares)	2,050,000

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Employee Benefits (Details) $ in Millions	1 Months Ended	6 Months Ended
	Mar. 31, 2023 USD ($)	Jun. 30, 2023 Employee shares
Benefit Plan [Abstract]
Number of former union employees covered by the plan | Employee		14
Supplemental Executive Retirement Plan [Member]
Defined Contribution Pension and Other Postretirement Plans [Abstract]
Employer discretionary contribution amount | $	$ 0.8
Employee Stock Ownership Plan and Trust (ESOP) [Member]
Employee Stock Ownership Plan (ESOP), Debt Structure [Abstract]
Additional shares contributed to ESOP (in shares)		72,800
Shares released from trust (in shares)		72,800
Total remaining balance of shares in the ESOP (in shares)		200

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Derivative Financial Instruments (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Interest Rate Swap Agreement [Member]
Notional Disclosures [Abstract]
Derivative term of contract	7 years
Borrowings under credit agreement	$ 100.0		$ 100.0	$ 100.0
Term of variable rate	1 month
Fixed interest rate	2.683%
Derivative, credit spread adjustment percentage	0.10%
Margin on variable rate	1.50%
Interest Rate Swap [Member]
Notional Disclosures [Abstract]
Derivative term of contract	7 years
Derivative, notional amount				$ 100.0
Derivative contract, maturity date	May 31, 2029
Derivative fair value	$ 5.8	$ 5.2

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Fair Value Measurements (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) Party	Dec. 31, 2022 USD ($)
Fair Value, Net Asset (Liability) [Abstract]
Number of independent third parties | Party	1
Fair Value [Member] | LEVEL 1 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash and cash equivalents	$ 23,019	$ 21,150
Deferred compensation	23,104	20,190
Short term borrowings	58,728	55,031
Long-term debt	164,488	184,589
Fair Value [Member] | LEVEL 2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash flow interest rate swap	5,786	5,174
Carrying Amount [Member] | LEVEL 1 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash and cash equivalents	23,019	21,150
Deferred compensation	23,104	20,190
Short term borrowings	58,728	55,031
Long-term debt	164,488	184,589
Carrying Amount [Member] | LEVEL 2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash flow interest rate swap	$ 5,786	$ 5,174

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net Earnings Attributable to SMP [Abstract]
Earnings from continuing operations		$ 18,358	$ 20,792	$ 31,056	$ 41,354
Loss from discontinued operations		(9,221)	(1,666)	(10,001)	(2,782)
Net earnings attributable to SMP	[1]	$ 9,137	$ 19,126	$ 21,055	$ 38,572
Basic Net Earnings Per Common Share Attributable to SMP [Abstract]
Earnings from continuing operations per common share (in dollars per share)		$ 0.85	$ 0.96	$ 1.43	$ 1.89
Loss from discontinued operations per common share (in dollars per share)		(0.43)	(0.08)	(0.46)	(0.13)
Net earnings per common share - Basic (in dollars per share)		$ 0.42	$ 0.88	$ 0.97	$ 1.76
Weighted average common shares outstanding (in shares)		21,689,067	21,757,998	21,649,562	21,867,644
Diluted Net Earnings Per Common Share Attributable to SMP [Abstract]
Earnings from continuing operations per common share (in dollars per share)		$ 0.83	$ 0.93	$ 1.4	$ 1.85
Loss from discontinued operations per common share (in dollars per share)		(0.42)	(0.07)	(0.45)	(0.13)
Net earnings per common share - Diluted (in dollars per share)		$ 0.41	$ 0.86	$ 0.95	$ 1.72
Weighted average common shares outstanding (in shares)		21,689,067	21,757,998	21,649,562	21,867,644
Plus incremental shares from assumed conversions [Abstract]
Dilutive effect of restricted stock and performance-based stock (in shares)		494,000	498,000	490,000	505,000
Weighted average common shares outstanding - Diluted (in shares)		22,183,489	22,255,642	22,139,708	22,372,702
Restricted and Performance-Based Shares [Member]
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)		273,000	268,000	286,000	262,000

[1] Throughout this Form 10Q, “SMP” refers to Standard Motor Products, Inc. and subsidiaries.

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Industry Segments (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) Segment	Jun. 30, 2022 USD ($)
Segment Reporting Information, Profit (Loss) [Abstract]
Number of reportable operating segments | Segment				3
Net sales	[1]	$ 353,075	$ 359,412	$ 681,103	$ 682,243
Operating Income		27,178	27,893	47,924	54,808
Vehicle Control [Member] | Reportable Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	[1]	183,789	185,771	368,366	363,035
Operating Income		19,273	16,059	36,648	36,403
Temperature Control [Member] | Reportable Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	[1]	97,074	105,637	169,480	178,695
Operating Income		5,800	10,523	7,884	14,685
Engineered Solutions [Member] | Reportable Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	[1]	72,212	68,004	143,257	140,513
Operating Income		6,163	5,109	11,810	11,397
Other [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	[1]	0	0	0	0
Operating Income		$ (4,058)	$ (3,798)	$ (8,418)	$ (7,677)

[1] There are no intersegment sales among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

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Net Sales (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	$ 353,075	$ 359,412	$ 681,103	$ 682,243
United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	301,862	322,598	582,051	599,870
Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	19,886	15,237	36,209	30,946
Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	15,162	10,447	30,444	21,984
Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	10,235	6,771	20,590	14,562
Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	4,361	2,664	8,497	11,167
Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	1,569	1,695	3,312	3,714
Vehicle Control [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	183,789	185,771	368,366	363,035
Vehicle Control [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	165,198	171,083	331,610	332,154
Vehicle Control [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	8,834	7,205	17,164	15,913
Vehicle Control [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	248	176	446	368
Vehicle Control [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	8,179	6,000	16,766	12,083
Vehicle Control [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	88	78	150	158
Vehicle Control [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	1,242	1,229	2,230	2,359
Vehicle Control [Member] | Engine Management (Ignition, Emission Control, Fuel Delivery [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	113,589	111,581	229,672	220,730
Vehicle Control [Member] | Electrical and Safety [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	52,867	57,054	104,671	109,311
Vehicle Control [Member] | Wire Sets and Other [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	17,333	17,136	34,023	32,994
Temperature Control [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	97,074	105,637	169,480	178,695
Temperature Control [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	92,099	101,204	161,670	170,516
Temperature Control [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	4,926	4,089	7,681	7,588
Temperature Control [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	20	0	35
Temperature Control [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	18	105	18	189
Temperature Control [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	21	20	43
Temperature Control [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	31	198	91	324
Temperature Control [Member] | AC System Components [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	74,449	81,608	120,201	128,982
Temperature Control [Member] | Other Thermal Components [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	22,625	24,029	49,279	49,713
Engineered Solutions [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	72,212	68,004	143,257	140,513
Engineered Solutions [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	44,565	50,311	88,771	97,200
Engineered Solutions [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	6,126	3,943	11,364	7,445
Engineered Solutions [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	14,914	10,251	29,998	21,581
Engineered Solutions [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	2,038	666	3,806	2,290
Engineered Solutions [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	4,273	2,565	8,327	10,966
Engineered Solutions [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	296	268	991	1,031
Engineered Solutions [Member] | Commercial Vehicle [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	26,742	19,503	46,599	40,954
Engineered Solutions [Member] | Construction Agriculture [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	8,103	11,222	20,898	22,206
Engineered Solutions [Member] | Light Vehicle [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	23,548	23,039	46,514	49,114
Engineered Solutions [Member] | All Other [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	13,819	14,240	29,246	28,239
Other [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0	0
Other [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0	0
Other [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0	0
Other [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0	0
Other [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0	0
Other [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0	0
Other [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	$ 0	$ 0	$ 0	$ 0

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Commitments and Contingencies, Asbestos and Other Litigation (Details) $ in Thousands		1 Months Ended		3 Months Ended	6 Months Ended		262 Months Ended
	May 11, 2023 USD ($)	Sep. 30, 2022 USD ($)	Aug. 31, 2021 USD ($)	Jun. 30, 2023 USD ($) Claim	Jun. 30, 2023 USD ($) Claim	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) Claim	Dec. 31, 2022 USD ($)	Aug. 31, 2022 USD ($)
Asbestos [Abstract]
Accrued asbestos liabilities				$ 59,565	$ 59,565		$ 59,565	$ 63,305
Litigation settlement, amount awarded to other party	$ 11,000
Pre-tax provision in earnings (loss) From discontinue operations				$ 11,000
Asbestos [Member]
Asbestos [Abstract]
Pending claims, approximate number | Claim				1,465	1,465		1,465
Payment for settled claims and awards related damages, including interest							$ 68,300
Increase in range of possible loss from lower range			$ 7,900
Increase in range of possible loss from upper range			$ 11,400
Accrued asbestos liabilities		$ 68,800
Incremental pre-tax provision		$ 18,500
Asbestos [Member] | Minimum [Member]
Asbestos [Abstract]
Range of possible loss									$ 68,800
Asbestos [Member] | Maximum [Member]
Asbestos [Abstract]
Range of possible loss									111,600
Asbestos [Member] | Discontinued Operations [Member]
Asbestos [Abstract]
Total operating cash outflows related to discontinued operations					$ 4,500	$ 9,500
Asbestos [Member] | Discontinued Operations [Member] | Minimum [Member]
Asbestos [Abstract]
Range of possible loss									53,200
Asbestos [Member] | Discontinued Operations [Member] | Maximum [Member]
Asbestos [Abstract]
Range of possible loss									$ 105,700

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Commitments and Contingencies, Warranties (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Changes in product warranties [Roll forward]
Balance, beginning of period	$ 20,600	$ 20,711	$ 19,667	$ 17,463
Liabilities accrued for current year sales	30,047	30,295	55,840	52,921
Settlements of warranty claims	(27,061)	(27,240)	(51,921)	(46,618)
Balance, end of period	$ 23,586	$ 23,766	$ 23,586	$ 23,766