10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2023

or

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

For the transition period from ____ to ____

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)
Registrant’s telephone number, including area code:	(718) 392-0200

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☑  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  No  ☑

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 definition 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.      ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐   No  ☑

The aggregate market value of the voting common stock based on the closing price on the New York Stock Exchange on June 30, 2023 (the last business day of registrant’s most recently completed second fiscal quarter) of $37.52 per share held by non-affiliates of the registrant was $737,570,524.  For purposes of the foregoing calculation only, all directors and officers have been deemed to be affiliates, but the registrant disclaims that any of such are affiliates.

As of February 20, 2024, there were 21,918,729 outstanding shares of the registrant’s common stock, par value $2.00 per share.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this Report is incorporated herein by reference from the registrant’s definitive proxy statement relating to its annual meeting of stockholders to be held on May 16, 2024.

STANDARD MOTOR PRODUCTS, INC.

INDEX

PART I.		Page No.
Item 1.	Business	3
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	23
Item 1C.	Cybersecurity	24
Item 2.	Properties	25
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	(Reserved)	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	90
Item 9A.	Controls and Procedures	90
Item 9B.	Other Information	91
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	91
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	91
Item 11.	Executive Compensation	91
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	91
Item 13.	Certain Relationships and Related Transactions, and Director Independence	91
Item 14.	Principal Accountant Fees and Services	91
PART IV.
Item 15.	Exhibits and Financial Statement Schedules	92
Item 16.	Form 10-K Summary	92
	Signatures	96

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PART I

In this Annual Report on Form 10-K, “Standard Motor Products,” “we,” “us,” “our,” “SMP,” and the “Company” refer to Standard Motor Products, Inc. and its subsidiaries, unless the context requires otherwise.  This Report, including the documents incorporated herein by reference, 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 automotive aftermarket and/or other end-markets that we supply; 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 matters (including, without limitation, those related to asbestos-related contingent liabilities); the effects of disruptions in the supply chain caused by geopolitical 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.

ITEM 1. BUSINESS

Overview

We are a leading manufacturer and distributor of premium replacement parts in the automotive aftermarket and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets.  Our automotive aftermarket business is comprised of two segments, Vehicle Control and Temperature Control, while our Engineered Solutions Segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.  We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin America countries.

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

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Our Vehicle Control Segment services our core automotive aftermarket customers through its offering of premium replacement parts within the following major product groups:

(1) Engine Management, which includes components for the ignition, emissions and fuel delivery systems of vehicles utilizing an internal combustion engine. Product categories include air injection and induction components, air management valves, regulators and solenoids, exhaust gas recirculation (EGR) components, fuel injectors and related components, fuel valves, ignition coils, connectors and sockets, modules, pumps, relays and fuses, starting and charging system parts, and vapor and purge components.

(2) Electrical & Safety, which includes components for the electrical and safety systems of vehicles, and are powertrain neutral vehicle technologies.  Product categories include electrical switches and actuators, chassis and drivetrain sensors such as anti-lock brake and vehicle speed sensors, fluid level sensors, pressure sensors such as tire pressure monitoring, temperature sensors, and sensors for advanced driver assistance systems (ADAS), along with battery cables, pigtails, sockets and a wide range of electrical wire, terminals, connectors, and tools for servicing a vehicle’s electrical system.

(3) Wire Sets & Other, which includes spark plug wire sets, coil on plug boots and accessories servicing vehicle’s ignition system.  Certain product categories within this group are in secular decline based upon product life cycle.

Many Vehicle Control systems use on-board computers to monitor inputs from sensing devices located throughout the vehicle.  As the complexity of these systems continues to develop and proliferate, we expect to benefit from increased demand for our sensors, switches, actuators, valves, solenoids and related parts, which are designed to function with these systems.

We also expect to benefit from government regulations regarding vehicle safety and emissions. For example, we believe emissions laws and fuel economy regulations have had a positive impact on sales of our ignition, emissions control and fuel delivery parts since vehicles not meeting emissions inspection standards may require repairs utilizing parts sold by us. Similarly, as government-mandated safety devices, such as anti-lock braking systems and ADAS, proliferate with new vehicle production, we anticipate increased replacement opportunities for many of our products such as ABS sensors, TPMS sensors, traction control products and ADAS replacement parts.

Our Temperature Control Segment also services our core automotive aftermarket customers through its offering of premium replacement parts within the following major product groups:

(1) AC System Components, which includes compressors, air conditioning repair kits, connecting lines, heat exchangers, and expansion devices.

(2) Other Thermal Components, which includes parts that provide engine, transmission, electric drive motor, and battery temperature management.

We believe our Temperature Control Segment is poised to benefit from the broader adoption of more complex air conditioning systems that will provide passenger comfort regardless of the vehicle’s powertrain.  For example, in addition to cabin comfort, powertrains such as electric vehicles will require cooling systems for the batteries, electronics, motors and other applications.

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The Engineered Solutions Segment services our vehicle and equipment manufacturing customers across diverse global end markets, including on-highway and off-highway applications such as commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden, through an offering of custom-engineered solutions within the following product categories:

(1) Thermal Management Products, which are designed to control the operating temperature of HVAC, battery and heat exchange systems, such as electrical compressors, fans, motors and pumps.

(2) Sensors, covering applications in speed, position, temperature, pressure, level and particulate matter, among others.

(3) Switches, covering applications in electrical performance, position, temperature, pressure, tilt and fluid levels, among others.

(4) Power Distribution, covering applications in power switching, industrial solenoids, and voltage regulators.

(5) Electrification & Electronics, which includes controller area network (CAN) devices, CAN bus wiring and splitting devices, and electronic controls, transmitters and components.

(6) Injection & Fuel Delivery, covering an extensive array of applications in transportation, such as gasoline, diesel and alternative fuels, such as compressed natural gas, liquefied natural gas, liquefied petroleum gas, and hydrogen.

(7) Ignition & Emissions, which includes wire, ignition coils and positive crankcase ventilation valves.

(8) Clamping Devices, covering automotive and industrial applications.

Our Business Strategy

Our Corporate Mission is to be a leading global supplier of parts and services to diverse end markets for the vehicles of yesterday, today and tomorrow, while leveraging our heritage of integrity and respect for all of our stakeholders.

We sell our products in the automotive aftermarket primarily to retailers and warehouse distributors, who buy directly from us and sell directly to jobber stores, professional technicians and to individual consumers who perform “do-it-yourself” repairs on their personal vehicles.  We believe that our value proposition is a key competitive advantage in maintaining our position as a strategic partner to our customers and a leader in the automotive aftermarket.

In the automotive aftermarket, our mission is to be the best full-line, full-service supplier of premium Vehicle Control and Temperature Control products.

Our Aftermarket Value Proposition

■     Premium Quality Products	■     Premium Brands	■     Full-Line Coverage	■    Supply Chain Excellence
■    Field Sales Support	■    Marketing Support	■    World-Class Training	■    Basic Manufacturing

Premium Quality Products.

We offer professional grade products intended to fit, form and function to standards that meet or exceed the original equipment (“OE”) product it replaces.  Our products undergo rigorous product qualification, testing our products against exacting specifications and performance criteria.  In some cases, we have successfully identified and implemented improvements in the durability of our products through the evaluation and analysis of OE product failures in the field.

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Premium Brands.

We believe that our brands are a key component of our value proposition, and serve to distinguish our premium products from those of our competitors.  We market and distribute our products under our own brands, such as:

Vehicle Control
Temperature Control

We also distribute our products to customers for resale under private labels and the following co-labels:

Vehicle Control

In some cases, we have developed our product offering and brand strategies to support our customers’ initiatives to market a tiered product assortment designed to satisfy end-user preferences for quality and value.  We believe that this alignment makes us an invaluable business partner to our customers.

Full-Line Coverage.

Our product offering is designed to ensure our automotive aftermarket customers have the parts they need to maintain, service and repair the wide range of vehicles in operation. We offer a full line of critical components for most years, makes, models and engine sizes.  Our product offering is a reflection of the vehicles in operation, the adoption rates of new vehicle technologies by original equipment manufacturers, the number of miles driven, and the failure rates of parts in service.  We continuously look to expand our coverage through the addition of late-model applications in existing product categories as well as new product categories in response to evolving vehicle technologies, or that otherwise complement our existing offering and have potential for high growth.

We focus on expanding our product coverage in advanced powertrain technologies, including start and stop technology, cylinder deactivation, variable valve timing, turbochargers, electronic throttle bodies, diesel exhaust emissions control, gasoline direct injection, active grill shutters; electrification, such as battery cooling fans, drive battery charging cables and adapters, and electric coolant pumps; and safety related categories, such as anti-lock brake, vehicle speed sensors, tire pressure monitoring, park assist sensors and advanced driver assistance components, including blind spot detection sensors, cruise control distance sensors, lane departure sensor cameras and park assist backup cameras.

In December 2023, we offered over 79,000 total stock keeping units (SKUs) to the automotive aftermarket. Approximately 2,600 of these SKUs were newly introduced in 2023, of which more than half were powertrain neutral vehicle technologies, such as cruise control distance sensors, park assist cameras and electronic parking brake actuators.

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Our Vehicle Control offering includes more than seventy product categories for hybrid electric vehicles. We are committed to strategically expanding our product offerings for electric and hybrid vehicles to service this important segment.

Supply Chain Excellence.

Product availability, including order turn-around time and fill rates, are critical measures of performance in the automotive aftermarket, and we partner with our suppliers and customers, to implement focused initiatives designed to achieve high levels of performance against these key metrics. For example, we manage forecasting responsibilities for our major retail customers, and provide twelve month projections to our suppliers to assist in their raw material and capacity planning to ensure continuity of supply.

In 2023, we announced plans to open a new distribution center in Shawnee, Kansas.  The new facility, which is expected to have a phased opening beginning in 2024 and be fully operational in early 2025, will expand our total distribution network square footage to meet our growing demands in the automotive aftermarket, and integrate state-of-the-art technologies to deliver improved logistics capabilities, operational efficiencies, as well as enhanced employee, customer and supplier experiences. The new Shawnee, Kansas distribution facility will also bring our Vehicle Control products geographically closer to our Midwest and West Coast customers, reducing transportation lead-time, and will ultimately provide disaster recovery capabilities for automotive aftermarket products across our divisions.

Field Sales Support.

We believe our technically-trained salesforce is a key competitive advantage.  Our field sales support focuses on educating parts professionals (e.g., customer team members) and professional technicians in highly technical product categories. Our customers depend on our sales personnel as a reliable source for technical information and to assist with sales to their customers (e.g., jobber stores, professional technicians and individual consumers performing “do-it-yourself” repairs).  We direct a significant portion of our sales efforts to our customers’ customers to generate demand for our products.  The structure of our salesforce facilitates these efforts, enabling us to implement our sales and marketing programs uniformly throughout the distribution channel.

Marketing Support.

We support our customers with superior value-added services such as data-driven category management based on vehicles in operation, sophisticated parts catalogs, available online and through our mobile application, and technical support, including selection, assortment and application support for all of our products.  We also grant our customers royalty-free licenses to use certain intellectual property rights to advertise, market and sell our products.  The licenses primarily cover vehicle application data, which is used to identify the parts necessary to service any particular vehicle make, model, year and/or engine size, product information data, including product interchanges, part numbers, attributes, high resolution images and videos, dimensions, specifications and other technical descriptions of parts and components.

World-Class Training.

We generate demand for our products through our technical training program, which offers training seminars to professional automotive technicians.  Our training program is accredited by the National Institute for Automotive Service Excellence (ASE) Training Managers Council.  Our seminars are taught by ASE certified instructors, and are available in-person and online through webinars and on-demand seminars.  Our seminars cover approximately 150 different topics, offered in both English and Spanish.  Through our training program, we typically teach approximately 60,000 technicians annually how to diagnose and repair vehicles equipped with complex systems related to our products, and we have approximately 16,000 technicians and 7,000 of our customers’ store employees and sales team members who are registered to participate in such sessions through our online platform.

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Basic Manufacturing.

We are committed to expanding our design, engineering and manufacturing capabilities, and vertically integrating production processes to bring more manufacturing in-house.  We engineer, tool and manufacture many of the products we offer for sale and the components used in their assembly.  We believe this level of vertical integration, in combination with our manufacturing footprint in low cost regions, is a key competitive advantage in terms of the quality, cost and availability of our products.

Examples of vertically integrated processes:
➢   plastic molding operations	➢   automated electronics assembly
➢   stamping and machining operations	➢   design and fabrication of processing and test equipment
➢   wire extrusion	➢   teardown, diagnostics and rebuilding of remanufactured air conditioning compressors, diesel injectors and diesel pumps

As of December 31, 2023, all of our principal manufacturing facilities maintained quality management systems that were ISO 9001 and/or TS 16949 certified, and ten of our principal manufacturing and distribution facilities maintained environmental management systems that were ISO 14001 certified.

Our manufacturing footprint is geographically diverse with a greater presence in North America and Europe compared to many of our peers.  We leverage our footprint to improve our cost position by locating labor-intensive processes within our low-cost plants, and by investing in automation and undertaking continuous improvement and expansion initiatives in our domestic facilities.

Our Engineered Solutions Value Proposition

We seek to leverage our extensive portfolio of adaptable products and strategically positioned global network of resources to deliver custom-engineered solutions for vehicle control and thermal management categories to the diversified end markets we supply.

Our Engineered Solutions products are sold primarily to original equipment manufacturers and their tier suppliers, system integrators, and original equipment service part operations.  Our customers use our products in serial production and as service and replacement parts.

We believe our global network of resources, including our engineering capabilities, advanced quality systems, manufacturing, distribution and technical sales expertise, combined with our customizable solutions for vehicle control and thermal management categories, is a key competitive advantage.  Our focus on vehicle control and thermal management categories leverages the legacy and leadership position of our automotive aftermarket business to provide a platform for future growth in diverse non-aftermarket end markets.  We drive growth in this segment by developing new customer relationships, cross-selling to existing customers, introducing new products to new and existing customers, and increasing content per unit.  Our growth strategy is long-term, and we do not expect growth to be linear given the lengthy nature of design engineering and validation and the period of time between the awarding of new business and the start of production, often which occurs 1-2 years after business is awarded.

We believe our automotive aftermarket business benefits from our Engineered Solutions business through accelerated future product development; systems, processes and quality enhancements; the technical insights of its original equipment customers; its global footprint; and synergistic mergers and acquisitions.

8

We distribute our Engineered Solutions products under the following trade names:

Engineered Solutions  

Strategic Acquisitions

We selectively pursue strategic acquisitions that strengthen our position in the markets we supply or that diversify our business in target markets or geographies.  Among other considerations, we seek acquisitions that align with our core competencies; enhance our existing design, engineering and manufacturing capabilities; and vertically integrate key technologies, products and processes.

For information on recent acquisitions and investments, see Note 2 “Business Acquisitions and Investments” of the Notes to Consolidated Financial Statements in Item 8 of this Report.

Industry Trends

The automotive aftermarket is a mature industry that tends to be influenced by trends such as the number of vehicles on the road, the average age of vehicles on the road, and the total number of miles driven per year.  Weather extremes like unseasonably hot or cool temperatures in the summer can also have an impact on automotive aftermarket product demand.

In the diverse non-aftermarket end markets we supply, such as commercial and light vehicles, construction, agriculture, power sports and others, other economic factors such as the level of new vehicle sales and production rates, which more recently have been impacted by disruptions in the global supply chain and labor, tend to have a more direct impact.

Our Customers

In the automotive aftermarket, our customers are many of the largest national and regional retailers and distributors, such as: Advance Auto Parts; Auto Value and Bumper to Bumper (Aftermarket Auto Parts Alliance); Automotive Distribution Network; AutoZone; Canadian Tire; Federated Auto Parts; Genuine Parts Company and National Automotive Parts Association; O’Reilly Auto Parts; The Automotive Parts Services Group or The Group; The National Pronto Association; and Uni-Select.

Engineered Solutions customers are many of the largest original equipment manufacturers and their tier suppliers, system integrators, and original equipment service part operations, such as:  Bombardier; Carquest: Caterpillar; CNH; Daimler Truck; Eberspacher; Ford; General Motors; Harley-Davidson; IVECO; John Deere; Mobile Climate Control; Polaris; Scania; Volvo/Mack Truck; and Woodward.

Our three largest individual customers accounted for approximately 59% of our consolidated net sales in 2023.  During 2023, O’Reilly Auto Parts, AutoZone and NAPA accounted for 29%, 16%, and 14% of our consolidated net sales, respectively.

Competition

Our business operates in highly competitive markets, and we face substantial competition in all of the markets that we supply.

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In the automotive aftermarket, we compete primarily on the basis of product quality, availability (including order turn-around time and fill rate), coverage and price, and value-added services.  Our primary competitors are full-line suppliers, short- or value-line suppliers, tier suppliers and service part operations of original equipment manufacturers, including car dealerships, and the direct import programs of certain retailers.

In our Engineered Solutions segment, we compete on the basis of product quality, price and availability (including order turn-around time and fill rate), technical expertise (including product design, development and innovation), and lean process improvements.  Our primary competitors are global and regional tier suppliers of original equipment manufacturers.

We believe we differentiate ourselves from our competition through the execution of our value proposition, discussed further above.  In addition, in the automotive aftermarket, we offer a variety of strategic customer discounts, allowances and incentives to increase the sale of our products.  For example, we offer cash discounts for paying invoices in accordance with the specified discounted terms of the invoice.  We also offer rebates and discounts to customers as advertising and sales force allowances, and allowances for warranty and overstock returns are also provided.  These discounts, allowances and incentives are a common practice in the automotive aftermarket, and we intend to continue offering them in response to competitive pressures and to strategically support growth in sales of our products.

Seasonality

Historically, our operating results have fluctuated by quarter, with the greatest sales occurring in the second and third quarters of the year and revenues generally being recognized at the time of shipment.  It is in these quarters that demand for our products is typically the highest, specifically in the Temperature Control Segment of our business.  The demand for our Temperature Control products during the second and third quarters of the year may vary significantly with the summer weather and customer inventories.

Working Capital and Inventory Management

We maintain an inventory management system that is designed to reduce inventory requirements, and enhance our ability to compete on the basis of product availability (including order turn-around time and fill rate) and product coverage.  We seek continuous improvements in this system to improve inventory deployment, enhance collaboration with customers on forecasts and inventory assortments, and further integrate our supply chain with both our customers and suppliers.  We also utilize a pack‑to‑order distribution system, which permits us to retain slow moving items in a bulk storage state until a related order is received.  This system reduces the volume of a given part in inventory.

We face inventory management issues in our automotive Aftermarket business as a result of overstock returns.  We permit our automotive Aftermarket customers to return new, undamaged products within customer-specific limits (which are generally limited to a specified percentage of their annual purchases from us) in the event that they have overstocked their inventories.  We accrue for overstock returns as a percentage of sales after giving consideration to recent returns history.  In addition, as discussed further above under the heading “Seasonality”, the seasonality of our Temperature Control Segment requires that we increase our inventory during the winter season in preparation of the summer selling season.

As such, our profitability and working capital requirements are seasonal due to our sales mix of Temperature Control products.  Our working capital requirements typically peak near the end of the second quarter, as the inventory build‑up of air conditioning products is converted to sales, and payments on the receivables associated with such sales have yet to be received.  These increased working capital requirements are funded by borrowings from our revolving credit facility in our Credit Agreement.

10

Suppliers

We source materials through a global network of suppliers to ensure a consistent, high quality and low cost supply of materials and key components for our product lines.  As a result of the breadth of our product offering, we are not dependent on any single raw material. Irrespective, disruptions in the global economy have impeded global supply chains, resulting in inflationary cost increases in certain raw materials, labor and transportation, in longer lead times, delays in procuring component parts and raw materials, and in prior year inventory increases, which are subsequently being worked down.  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.

The principal raw materials purchased by us consist of brass, electronic components, fabricated copper (primarily in the form of magnet and insulated cable), steel magnets, laminations, tubes and shafts, stamped steel parts, stainless steel coils and rods, aluminum coils, fittings, rods, cast aluminum parts, lead, steel roller bearings, rubber molding compound, thermo‑set and thermo plastic molding powders, and chemicals.

Additionally, we use components and cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps.  We obtain cores from exchanges with customers who return cores subsequent to purchasing remanufactured products, and from a network of core brokers who sell cores.  In addition, we acquire certain materials by purchasing products that are resold into the market, particularly by OEM sources and other domestic and foreign suppliers.

We expect to have an adequate supply of primary raw materials and cores necessary to meet our needs; however, there always are risks and uncertainties with respect to the supply of raw materials and components that could impact their availability in sufficient quantities and at cost effective prices to meet our needs.

Sustainability

We support and seek continuous improvement in the pursuit of environmental, social and corporate governance practices that embody our culture and what we believe it means to be a good corporate citizen.

Our Culture

Our Company was founded in 1919 on the values of integrity, common decency and respect for others.  These values 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 continued focus on many important sustainability issues.

Environmental Stewardship

We have made significant strides with respect to our sustainability 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 Scope 1 and Scope 2 greenhouse gas emissions. Additionally, we believe our product offering contributes to a greener car parc through several key product categories that are critical components in automotive systems designed to improve fuel economy and reduce harmful emissions, such as fuel injectors, exhaust gas recirculation valves, sensors and tubes, and evaporative emission control system components. We also bring to market alternative energy products, which utilize cleaner burning fuels or are designed for electric or hybrid electric vehicles, and we remanufacture key categories within our product portfolio, such as air conditioning compressors, diesel injectors and diesel pumps, through processes that save energy and reduce waste.

Human Capital

As of December 31, 2023, we employed approximately 5,200 people, with 2,100 people in the United States and 3,100 people in Mexico, Canada, Poland, the U.K., Germany, Hungary, China and Hong Kong. Of the 5,200 people employed, approximately 2,600 people are production employees.  We operate primarily in non‑union facilities and have binding labor agreements with employees at other unionized facilities.  We have approximately 75 production employees in Edwardsville, Kansas, who will eventually migrate to our new Shawnee, KS facility, who are covered by a contract with The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America that expires in August 2026.  We also have approximately 1,200 employees in Mexico who are covered under union agreements negotiated at various intervals.  For clarification, the employee numbers described above exclude the employees of our joint venture operations.  We believe our facilities are in labor markets with ready access to adequate numbers of skilled and unskilled workers, and our relations with our union and non‑union employees are good.

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Diversity, Equity, Inclusion, and Belonging.  We strive to hire, retain and advance a diverse workforce that reflects the communities that we serve. Our recent efforts have been focused in three areas: inspiring innovation through an inclusive and diverse culture; expanding our efforts to recruit and hire world-class diverse talent; and identifying strategic partners to accelerate our inclusion and diversity programs.

Health, Safety and Wellness.  We are committed to the health, safety and wellness of our employees.  We strive to eliminate workplace incidents, risks and hazards. Our health and wellness programs support our employees’ physical and mental health by providing tools and resources to encourage healthy behaviors and provide peace of mind in circumstances that may require time away from work.

Compensation and Benefits.  We provide competitive compensation and benefits programs that meet the needs of our employees.  In addition to wages and salaries, these programs include annual cash bonuses, stock awards, a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, fertility benefits, family care resources, tuition reimbursement, LGBTQ+ inclusive benefits, mental health resources and employee assistance programs.

Talent Development.  We invest significant resources to develop the talent of our high potential employees.  We deliver employee workshops and mentoring programs, numerous training opportunities, provide rotational assignment opportunities, offer continuous learning and development, and implement methodologies to manage performance, provide feedback and develop talent opportunities, all designed to provide employees with the resources they need to help achieve their career goals and build management skills.  Our annual review process encourages manager and employee conversations throughout the year to enhance growth and development.

Employee satisfaction and engagement are important elements in our talent retention strategy. From time to time, we conduct employee engagement surveys to identify areas where we can enhance our talent retention strategy and employee satisfaction, including fostering a more inclusive and equitable environment. We utilize the results from these engagement surveys to better provide employees with the tools, resources and support that they need to succeed and grow in their SMP careers.

Social Engagement and Community Service

We believe that building connections between our employees, their families and our communities creates a more meaningful, fulfilling and enjoyable workplace.  Through our SMP Cares® initiative, we sponsor corporate giving and volunteering programs to encourage our employees to connect with our local communities and engage in the local causes that they are passionate about.

Governance

Our commitment to sustainability is spearheaded by our Board of Directors. Specifically, our Nominating and Corporate Governance Committee established a sustainability steering committee among our executive officers including our Chief Executive Officer & President, Chief Legal Officer & Secretary, Chief Human Resources Officer, and Senior Vice President of North American Operations. This sustainability steering committee is tasked with developing specific strategies to ensure that our company-wide operations adhere to our corporate governance values and advance our sustainability objectives globally.  The multidisciplinary approach of our steering committee allows it to leverage our expertise in operations, engineering, supply chain, human capital management, finance, legal and other fields to push our sustainability initiatives ahead from all angles.

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Continued Commitment

With each year, we intend to further our commitment to sustainability initiatives, improving our environmental stewardship, finding ways to give back to our communities, and enhancing the diversity and inclusion of our workforce while offering opportunities for development.  Information on our sustainability initiatives can be found in our most current sustainability report and on our corporate website at ir.smpcorp.com under “Environmental & Social Responsibility” and at smpcares.smpcorp.com.  Information in our sustainability report and on our corporate websites regarding our sustainability initiatives are referenced for general information only and are not incorporated by reference in this Report.

Available Information

We are a New York corporation founded in 1919.  Our principal executive offices are located at 37‑18 Northern Boulevard, Long Island City, New York 11101, and our main telephone number at that location is (718) 392‑0200.  Our Internet address is www.smpcorp.com.  We provide a link to reports that we have filed with the SEC.  However, for those persons that make a request in writing or by e-mail (financial@smpcorp.com), we will provide free of charge our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.  These reports and other information are also available, free of charge, at www.sec.gov.

ITEM 1A. RISK FACTORS

You should carefully consider the risks described below.  These risks and uncertainties are not the only ones we face.  Additional risks and uncertainties not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business and results of operations.  If any of the stated risks actually occur, they could materially and adversely affect our business, financial condition or operating results.

 Risks Related to Our Operations

We depend on a limited number of key customers, and the loss of any such customer, or a significant reduction in purchases by such customer, could have a material adverse effect on our business, financial condition and results of operations.

Our three largest individual customers accounted for approximately 59% of our consolidated net sales in 2023.  During 2023, O’Reilly Auto Parts, AutoZone and NAPA accounted for 29%, 16% and 14% of our consolidated net sales, respectively. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them could have a materially adverse impact on our business, financial condition and results of operations.  In addition, any consolidation among our key customers may further increase our customer concentration risk.

In our automotive aftermarket business, we do not typically enter into long-term agreements with any of our customers.  Instead, we enter into a number of purchase order commitments with our aftermarket customers, based on their current or projected needs.  We have in the past, and may in the future, lose customers or lose a particular product line of a customer due to the highly competitive conditions in the automotive aftermarket industry, including pricing pressures, consolidation of customers, customer initiatives to buy direct from foreign suppliers and/or to pursue a private brand strategy, or other business considerations.  A decision by any significant customer, whether motivated by competitive conditions, financial difficulties or otherwise, to materially decrease the amount of products purchased from us, to change their manner of doing business with us, or to stop doing business with us, including a decision to source products directly from a low cost region such as Asia, could have a material adverse effect on our business, financial condition and results of operations.  Because our sales are concentrated, and the markets in which we operate are very competitive, we are under ongoing pressure from our customers to offer lower prices, extend payment terms, increase marketing allowances and other terms more favorable to these customers.  These customer demands have put continued pressure on our operating margins and profitability, resulted in periodic contract renegotiation to provide more favorable prices and terms to these customers, and significantly increased our working capital needs.

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Our industry is highly competitive, and our success depends on our ability to compete with suppliers of automotive products, some of which may have substantially greater financial, marketing and other resources than we do.

The automotive industry is highly competitive, and our success depends on our ability to compete with domestic and international suppliers of automotive products. In the automotive aftermarket, we compete primarily with full-line suppliers, short- or value-line suppliers, tier suppliers and service part operations of original equipment manufacturers, including car dealerships, and the direct import programs of certain retailers. In the diverse non-aftermarket end markets we supply, we compete primarily with global and regional tier suppliers of original equipment manufacturers. Some of our competitors may have larger customer bases and significantly greater financial, technical and marketing resources than we do.  These factors may allow our competitors to:

• respond more quickly than we can to new or emerging technologies and changes in customer requirements by devoting greater resources than we can to the development, promotion and sale of automotive products and services;

• engage in more extensive research and development;

• sell products at a lower price than we do;

• undertake more extensive marketing campaigns; and

• make more attractive offers to existing and potential customers and strategic partners.

We cannot assure you that our competitors will not develop products or services that are equal or superior to our products or that achieve greater market acceptance than our products or that in the future other companies involved in the automotive industry will not expand their operations into product lines produced and sold by us.  We also cannot assure you that additional entrants will not enter the automotive industry or that companies in the industry will not consolidate.  Any such competitive pressures could cause us to lose market share or could result in significant price decreases and could have a material adverse effect upon our business, financial condition and results of operations.

There is substantial price competition in our industry, and our success and profitability will depend on our ability to maintain a competitive cost and price structure.

There is substantial price competition in our industry, and our success and profitability will depend on our ability to maintain a competitive cost and price structure.  This is the result of a number of industry trends, including the impact of offshore suppliers in the marketplace (particularly in China) which do not have the same infrastructure costs as we do, the consolidated purchasing power of large customers, and actions taken by some of our competitors in an effort to ‘‘win over’’ new business.  We have in the past reduced prices to remain competitive and may have to do so again in the future.  Price reductions have impacted our sales and profit margins and may do so in the future.  Our future profitability will depend in part upon our ability to respond to changes in product and distribution channel mix, to continue to improve our manufacturing efficiencies, to generate cost reductions, including reductions in the cost of components purchased from outside suppliers, to maintain a cost structure that will enable us to offer competitive prices, and to pass through higher distribution, raw materials and labor costs to our customers.  Our inability to maintain a competitive cost structure could have a material adverse effect on our business, financial condition and results of operations.

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Our business is seasonal and is subject to substantial quarterly fluctuations, which impact our quarterly performance and working capital requirements.

Historically, our operating results have fluctuated by quarter, with the greatest sales occurring in the second and third quarters of the year and revenues generally being recognized at the time of shipment. It is in these quarters that demand for our temperature control products is typically the highest.

The demand for our temperature control products during the second and third quarters of the year may vary significantly with the summer weather and customer inventories.  As such, our working capital requirements typically peak near the end of the second quarter, as the inventory build‑up of air conditioning products is converted to sales, and payments on the receivables associated with such sales have yet to be received.  These increased working capital requirements are funded by borrowing from our revolving credit facility in our Credit Agreement.

Climate-related physical risks, such as changes to weather patterns and conditions may also impact the pattern of seasonality and variability in demand for our Temperature Control products discussed above, which may impact our quarterly performance and working capital requirements.

We may incur material losses and significant costs as a result of warranty-related returns by our customers in excess of anticipated amounts.

Our products are required to meet rigorous standards imposed by our customers and our industry. Many of our products carry a warranty ranging from a 90-day limited warranty to a lifetime limited warranty, which generally covers defects in materials or workmanship, and conformance to agreed upon specifications. In the event that our products fail to conform to these warranties, the affected products may be subject to warranty returns and/or product recalls. Although we maintain a comprehensive quality control program, we cannot give any assurance that our products will not suffer from defects or other deficiencies or that we will not experience material warranty returns or product recalls in the future.

We accrue for warranty returns as a percentage of sales, after giving consideration to recent historical returns. While we believe that we make reasonable estimates for warranty returns in accordance with our revenue recognition policies, actual returns may differ from our estimates. We have in the past incurred, and may in the future incur, material losses and significant costs as a result of our customers returning products to us for warranty-related issues in excess of anticipated amounts. Deficiencies or defects in our products in the future may result in warranty returns and product recalls in excess of anticipated amounts and may have a material adverse effect on our business, financial condition and results of operations.

Our profitability may be materially adversely affected as a result of overstock inventory related returns by our customers in excess of anticipated amounts.

In our automotive aftermarket business, we permit overstock returns of inventory that may be either new or non-defective or non-obsolete but that we believe we can re-sell. Customers are generally limited to returning overstocked inventory according to a specified percentage of their annual purchases from us. In addition, a customer’s annual allowance cannot be carried forward to the upcoming year.

We accrue for overstock returns as a percentage of sales, after giving consideration to recent historical returns. While we believe that we make reasonable estimates for overstock returns in accordance with our revenue recognition policies, actual returns may differ from our estimates. To the extent that overstocked returns are materially in excess of our projections, our business, financial condition and results of operations may be materially adversely affected.

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We may be materially adversely affected by asbestos claims arising from products sold by our former brake business, as well as by other product liability claims.

In 1986, we acquired a brake business, which we subsequently sold in March 1998.  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 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.  We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.

At December 31, 2023, 1,390 cases were outstanding for which we may be responsible for any related liabilities.  Since inception in September 2001 through December 31, 2023, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $74.6 million.  A substantial increase in the number of new claims, or increased settlement payments, or awards of asbestos-related damages, could have a material adverse effect on our business, financial condition and results of operations.

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, 2023.  Based upon the results of the August 31, 2023 actuarial study, and all other available information to us, we increased our asbestos liability to the low end of the range, and recorded an incremental pre-tax provision of $23.8 million in earnings (loss) from discontinued operations in the accompanying statement of operations.  The results of the August 31, 2023 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $84 million to $135.3 million for the period through 2065.  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, 2023 study, to range from $53.1 million to $105.2 million for the period through 2065.

Given the uncertainties associated with projecting asbestos-related matters into the future and other factors outside our control, we cannot give any assurance that significant increases in the number of claims filed against us will not occur, that awards of asbestos-related damages or settlement awards will not exceed the amount we have in reserve, or that additional provisions will not be required. Management will continue to monitor the circumstances surrounding these potential liabilities in determining whether additional reserves and provisions may be necessary. We plan on performing an annual actuarial analysis 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.

In addition to asbestos-related claims, our product sales entail the risk of involvement in other product liability actions.  We maintain product liability insurance coverage, but we cannot give any assurance that current or future policy limits will be sufficient to cover all possible liabilities.  Further, we can give no assurance that adequate product liability insurance will continue to be available to us in the future or that such insurance may be maintained at a reasonable cost to us. In the event of a successful product liability claim against us, a lack or insufficiency of insurance coverage could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to achieve the benefits that we expect from our cost savings initiatives.

We expect to realize the continued benefit of discretionary cost reduction measures, along with the continued cost savings anticipated from several ongoing and/or recently completed restructuring and integration initiatives.  Due to factors outside our control, such as the adoption or modification of domestic and foreign laws, regulations or policies, we may not be able to achieve the level of benefits that we expect to realize in these initiatives, or we may not be able to realize these benefits within the time frames we currently expect.  Our ability to achieve any anticipated cost savings could be affected by a number of factors such as changes in the amount, timing and character of charges related to such initiatives, or a substantial delay in the completion of such initiatives.  Failure to achieve the benefits of our cost saving initiatives could have a material adverse effect on us.  Our cost savings is also predicated upon maintaining our sales levels.

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Severe weather, natural disasters and other disruptions could adversely impact our operations at our manufacturing and distribution facilities.

Severe weather conditions and natural disasters, such as hurricanes, tornados, earthquakes and floods, could damage our properties and effect our operations, particularly our major manufacturing and distribution operations at foreign facilities in Canada, China, Mexico, Poland, Germany and Hungary and at our domestic facilities in Florida, Indiana, Kansas, South Carolina, Texas, Virginia, and Wisconsin.  Moreover, global climate change may cause these natural disasters to occur more frequently and/or with more intense effects, which could prevent us from, or cause delays in our ability to, manufacture and deliver products to our customers, and/or cause us to incur additional costs.

In addition, our business and operations could be materially adversely affected in the event of other serious disruptions at these facilities due to fire, electrical blackouts, power losses, telecommunications failures, wars, terrorist attack or similar events.  Any of these occurrences could impair our ability to adequately manufacture or supply our customers due to all or a significant portion of our equipment or inventory being damaged.  If our existing manufacturing or distribution facilities become incapable of producing and supplying products for any reason, we may not be able to satisfy our customers’ requirements and we may lose revenue and incur significant costs and expenses that may not be recoverable through our business interruption insurance.

Disruptions in the supply of raw materials, manufactured components, or equipment could materially and adversely affect our operations and cause us to incur significant cost increases.

We source various types of raw materials, finished goods, equipment, and component parts from suppliers as part of a global supply chain, and we may be materially and adversely affected by the failure of those suppliers to perform as expected.  Although we have had an adequate supply of purchased supplier raw materials, finished goods, equipment and component parts, disruptions in the global economy have impeded global supply chains, resulting in longer lead times and delays in procuring component parts and raw materials, and 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 initiating cost savings initiatives and the pass through of higher costs to our customers.  We cannot assure that unforeseen future events in the global supply chain affecting the availability of materials and components, and/or increasing commodity pricing, will not have a material adverse effect on our business, financial condition and results of operations.

Additionally, supplier non-performance may consist of delivery delays or failures caused by production issues or delivery of non-conforming products.  Our suppliers’ ability to supply products to us is also subject to a number of risks, including the availability and cost of raw materials, the destruction of their facilities, work stoppages, cybersecurity incidents affecting their information systems or other limitations on their business operations, which could be caused by any number of factors, such as labor disruptions, financial distress, severe weather conditions and natural disasters, social unrest, economic and political instability, and public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic, war, terrorism or other catastrophic events.  In addition, our failure to promptly pay, or order sufficient quantities of inventory from our suppliers may increase the cost of products we purchase or may lead to suppliers refusing to sell products to us at all.  Our efforts to protect against and to minimize these risks may not always be effective.

Our Operations could be adversely affected by interruptions or breaches in the security of our computer and information systems.

We rely on information systems throughout our organization to conduct day-to-day business operations, including the management of our supply chain and our purchasing, receiving and distribution functions.  We also routinely use our information systems to send, receive, store, access and use sensitive data relating to our Company and its employees, customers, suppliers, and business partners, including intellectual property, proprietary business information, and other sensitive materials.  Additionally, we rely on our information systems to enable many of our employees to work remotely as a result of more recent policies and practices enacted by us.

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Despite security measures designed to prevent and mitigate the risk of cybersecurity incidents, our information systems, and the systems of our customers, suppliers and business partners, may be vulnerable to such incidents, including interruptions, outages, data breaches, phishing attacks, ransomware attacks, unauthorized access, attempts to hack into our network, and computer viruses.  Moreover, the technologies and techniques used to carry out cyber-attacks are continuously evolving, making it difficult to detect these changes or implement adequate measures in time to prevent or mitigate the impact of an attack. Due to the foregoing, though we have not experienced a material cybersecurity incident in 2023, we cannot guarantee that there will be no future cybersecurity incident that causes a material adverse effect on our information systems, or that of our customers, suppliers and other business partners.

In the event that our information systems, or the systems of our customers, suppliers or business partners, are subject to such incidents, we could experience errors, interruptions, delays, and/or the cessation of services in key portions of our information systems. If critical information systems fail or otherwise become unavailable, our ability to process orders, maintain proper inventory levels, collect accounts receivable and disburse funds could be adversely affected. The foregoing matters could also cause significant damage to our business reputation, affect our relationships with our business partners, lead to claims against us, and/or subject us to fines or other penalties assessed by governmental authorities. Additionally, we may be required to incur substantial costs to remediate the damage caused by these disruptions or protect us against future cybersecurity incidents. Depending on the nature and magnitude of these events, they could have a material and adverse effect on our business, financial condition or results of operations.

The transition risks associated with global climate change may cause us to incur significant costs.

In addition to the physical risks described above, global climate change has brought about certain risks associated with the anticipated transition to a lower-carbon economy, such as regulatory changes affecting vehicle emissions and fuel efficiency requirements, technological changes in vehicle architectures, changes in consumer demand, carbon taxes, greenhouse gas emissions tracking, and regulation of greenhouse gas emissions from certain sources. Any regulatory changes aimed to reduce or eliminate greenhouse gas emissions may require us to incur increased operating costs, such as to purchase and operate emissions control systems or other such technologies to comply with applicable regulations or reporting requirements. These regulations, as well as shifts in consumer demand due to public awareness and concern of climate change, could affect the timing and scope of their proliferation and may also adversely impact our sales of products designed for the internal combustion engines. As we monitor the rapid developments in this area, we may be required to adjust our business strategy to address the various transition risks posed by climate change.

Failure to maintain the value of our brands could have an adverse effect on our reputation, cause us to incur significant costs and negatively impact our business.

Our brands are a key component of our value proposition, and serve to distinguish our premium products from those of our competitors.  In our automotive aftermarket business, we believe that our success depends, in part, on maintaining and enhancing the value of our brands and executing our brand strategies, which are designed to drive end-user demand for our products and make us a valued business partner to our aftermarket customers through the support of their marketing initiatives.  A decline in the reputation of our brands as a result of events, such as deficiencies or defects in the design or manufacture of our products, or from legal proceedings, product recalls or warranty claims resulting from such deficiencies or defects, may harm our reputation as a manufacturer and distributor of premium automotive parts, reduce demand for our products and adversely affect our business.

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Our revenue and results of operations may suffer upon the bankruptcy, insolvency or other credit failure of a significant customer.

Most of our customers buy products from us on credit. We extend credit to customers and offer extended payment terms based upon competitive conditions in the marketplace and our assessment and analysis of creditworthiness. General economic conditions, competition and other factors may adversely affect the solvency or creditworthiness of our customers. Higher interest rates, inflationary cost increases in raw materials, labor and transportation and a general worsening of economic conditions have put financial pressure on many of our customers and may threaten certain customers’ ability to maintain liquidity sufficient to repay their obligations to us as they become due. The bankruptcy, insolvency or other credit failure of any customer that has a substantial amount owed to us could have a material adverse effect on our operating revenue and results of operations. We recorded a $7 million pre-tax charge in 2022 to reduce our outstanding accounts receivable balance from a customer that filed for bankruptcy in the first quarter of 2023 to our estimated recovery amount.

In our Engineered Solutions business, our supply agreements with our customers are generally requirements contracts, and a decline in the production requirements of any of our significant customers could adversely impact our revenues and profitability.

In our Engineered Solutions business, our customers generally agree to purchase their requirements for specific products, and we receive volume forecasts of their requirements, but not long-term firm volume commitments. Furthermore, our customers typically reserve the right to change, delay or cancel their orders for products, and we have limited recourse in such events.  Changes, delays or cancellations by a significant customer or by a number of customers could adversely impact our results of operations by reducing the volumes of products we manufacture and sell, by causing a delay in the recovery of expenditures for raw materials and component parts procured to satisfy such orders, or by reducing our asset utilization, resulting in lower profitability.

We also make key decisions based on our estimates of our customers’ requirements, including in planning our production schedules, raw material and component part purchases, personnel needs and other resource requirements. Changes in demand for our customers’ products would likely reduce our customers’ requirements and adversely impact our ability to accurately estimate their requirements in the future. Any significant decrease or delay in customer orders could have a material adverse effect on our business, financial condition and results of operations.

Our inability to attract or retain key employees may have an adverse effect on our business, financial condition and results of operations.

Our success is dependent upon our ability to attract, retain and motivate certain key employees, including our management and our skilled workforce of engineers, technically-trained salesforce employees and other qualified personnel.  Many of our key employees have many years of experience with our Company and would be difficult to replace without allotment of a significant amount of time for knowledge transfer.  Furthermore, although we believe our facilities are in labor markets with ready access to adequate numbers of skilled and unskilled workers, we compete with other businesses to fill many of our hourly positions in our distribution facilities, which historically have had high turnover rates, which can lead to increased training and retention costs, particularly in a competitive and shrinking labor market.  We cannot be certain that we will be able to continue to attract or retain our key employees, which could cause us to fail to execute our value proposition, fail to achieve operational efficiencies, and incur increased labor costs, which could have an adverse effect our business, financial condition and results of operations.

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Risks Related to Liquidity

We are exposed to risks related to our receivables supply chain financing arrangements.

We are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable without recourse to such customers’ financial institutions.  To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays or failures in collecting trade accounts receivables.

The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate on the sale of the underlying trade accounts receivable.  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.  Depending upon the level of sales of receivables pursuant these agreements, a hypothetical, instantaneous and unfavorable change of 100 basis points in the reference rate may have an approximate $8.3 million negative impact on our earnings or cash flows.

A significant increase in our indebtedness, or in interest rates, could negatively affect our financial condition, results of operations and cash flows.

We have a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders. The Credit Agreement provides for a $500 million credit facility comprised of a $100 million term loan facility 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. As of December 31, 2023, our total outstanding indebtedness was $156.2 million, including outstanding borrowings under the Credit Agreement of $156 million, consisting of current borrowings of $5 million and long-term borrowings of $151 million.

Borrowings under our Credit Agreement 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%. 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 significant increase in our indebtedness could:

• increase our borrowing costs;

• limit our ability to obtain additional financing or borrow additional funds;

• require that a substantial portion of our cash flow from operations be used to pay principal and interest in our indebtedness, instead of funding working capital, capital expenditures, acquisitions, dividends, stock repurchases, or other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

• increase our vulnerability to general adverse economic and industry conditions.

In addition, 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.

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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.  If we were default on any of these covenants, or on any of our indebtedness, if interest rates were to significantly increase, or the financial institution that is a party to our interest rate swap agreement were to default, or if we are unable to obtain necessary liquidity, our business could be adversely affected.

We may not be able to generate the significant amount of cash needed to satisfy our obligations or maintain sufficient liquidity through borrowing capacities.

Our ability either to make payments on or to refinance our indebtedness, or to fund planned capital expenditures and research and development efforts, will depend on our ability to generate cash in the future. Our ability to generate cash is in part subject to:

• general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control;

• the ability of our customers to pay timely the amounts we have billed; and

• our ability to sell receivables under supply chain financing arrangements.

The foregoing factors could result in reduced cash flow, which could have a material adverse effect on us. When cash generated by earnings is not sufficient for the Company’s liquidity needs, the Company seeks external financing. Our access to funding sources in amounts adequate to finance our activities on terms that are beneficial to us could be impaired by factors that affect us specifically or the economy generally. During periods of disruptions in the credit and capital markets, potential sources of external financing could be reduced, and borrowing costs could increase. A significant downgrade in the company’s credit ratings could increase its borrowing costs and limit access to capital.

Based on our current level of operations, we believe 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 global supply chains, which have resulted in longer lead times and delays in procuring component parts and raw materials, and significant inflationary cost increases in certain raw materials, labor and transportation, and that there will be no material adverse developments in our business, liquidity or capital requirements.  If we are unable to fund our operations through earnings or external financing, we will be forced to adopt an alternative strategy that may include actions such as:

• deferring, reducing or eliminating future cash dividends;

• reducing or delaying capital expenditures or restructuring activities;

• reducing or delaying research and development efforts;

• selling assets;

• deferring or refraining from pursuing certain strategic initiatives and acquisitions;

• refinancing our indebtedness; and

• seeking additional funding.

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We cannot assure you that, if material adverse developments in our business, liquidity or capital requirements should occur, 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.

We have significant goodwill and other intangible assets, and future impairment of these assets could have a material adverse impact on our financial condition and results of operations.

A significant portion of our long-term assets consists of goodwill and other intangible assets recorded as a result of past acquisitions. We do not amortize goodwill and certain other intangible assets having indefinite lives, but rather test them for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount. The process of evaluating the potential impairment of goodwill and other intangible assets requires significant judgement, specifically with respect to applying assumptions and estimates to the analysis of identifiable intangibles and long‑lived asset impairment including projecting revenues, interest rates, tax rates and the cost of capital.  Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods.  These changes could result in impairment charges against our goodwill and other intangible assets. In the event that we determine that our goodwill or other intangible assets are impaired, we may be required to record a significant charge to earnings that could adversely affect our financial condition and results of operations.

Risks Related to External Factors

We conduct our manufacturing and distribution operations on a worldwide basis and are subject to risks associated with doing business outside the United States.

We have manufacturing and distribution facilities in many countries, including Canada, Mexico, Poland, Germany and Hungary, as well as joint-ventures in China.  There are a number of risks associated with doing business internationally, including: (a) exposure to local economic and political conditions; (b) social unrest such as risks of terrorism or other hostilities; (c) currency exchange rate fluctuations and currency controls; (d) the effect of potential changes in U.S. trade policy and international trade agreements; and (e) the potential for shortages of trained labor.

In particular, historically there has been social unrest in Hong Kong and Mexico and any recurrence, or increased violence in or around our facilities in such countries could be disruptive to our business operations at such facilities, or present risks to our employees who may be directly affected by the violence and may result in a decision by them to relocate from the area, or make it difficult for us to recruit or retain talented employees at such facilities.

Furthermore, changes in U.S. trade policy, particularly as it relates to China, have resulted in the assessment of increased tariffs on goods that we import into the United States, and have caused uncertainty about the future of free trade generally.  We benefit from free trade agreements, such as the U.S.-Mexico-Canada Agreement (USMCA).  The repeal or modification of the USMCA or further increases to tariffs on goods imported into the United States could increase our costs to source materials, component parts and finished goods from other countries.  The likelihood of such occurrences and their potential effect on us is unpredictable and may vary from country to country. Any such occurrences could be harmful to our business and our financial results.

We may incur liabilities under government regulations and environmental laws, which may have a material adverse effect on our business, financial condition and results of operations.

Domestic and foreign political developments and government laws and regulations directly affect automotive consumer products in the United States and abroad.  In the United States, these laws and regulations include standards relating to vehicle safety, fuel economy and emissions, among others.  Furthermore, increased public awareness and concern regarding climate change may result in new laws and regulations designed to reduce or mitigate the effects of greenhouse gas emissions or otherwise effect the transition to a lower-carbon economy.  The modification of existing laws, regulations or policies, or the adoption of new laws, regulations or policies could have a material adverse effect on our business, financial condition and results of operations.

22

Our operations and properties are subject to a wide variety of increasingly complex and stringent federal, state, local and international laws and regulations, including those governing the use, storage, handling, generation, treatment, emission, release, discharge and disposal of materials, substances and wastes, the remediation of contaminated soil and groundwater and the health and safety of employees. Such environmental laws, including but not limited to those under the Comprehensive Environmental Response Compensation & Liability Act, may impose joint and several liability and may apply to conditions at properties presently or formerly owned or operated by an entity or its predecessors, as well as to conditions at properties at which wastes or other contamination attributable to an entity or its predecessors have been sent or otherwise come to be located.

The nature of our operations exposes us to the risk of claims with respect to such matters, and we can give no assurance that violations of such laws have not occurred or will not occur or that material costs or liabilities will not be incurred in connection with such claims.  We are currently monitoring our environmental remediation efforts at one of our facilities and our reserve balance related to the environmental clean-up at this facility is $1.4 million at December 31, 2023.  The environmental testing and any remediation costs at such facility may be covered by several insurance policies, although we can give no assurance that our insurance will cover any environmental remediation claims.  We also maintain insurance to cover our existing U.S. and Canadian facilities. We can give no assurance that the future cost of compliance with existing environmental laws and the liability for known environmental claims pursuant to such environmental laws will not give rise to additional significant expenditures or liabilities that would be material to us. In addition, future events, such as new information, changes in existing environmental laws or their interpretation, and more vigorous enforcement policies of federal, state or local regulatory agencies, may have a material adverse effect on our business, financial condition and results of operations.

Our future performance may be materially adversely affected by changes in technologies and improvements in the quality of new vehicle parts.

If we do not respond appropriately to changes in automotive technologies, such as the adoption of new technologies and systems to make traditional, internal-combustion-engine vehicles more efficient, or the adoption of electric or hybrid electric vehicle architectures, we could experience less demand for our products thereby causing a decline in our results of operations or deterioration in our business and financial condition, and we may have a material adverse effect on our long-term performance.

In addition, the size of the automotive aftermarket depends, in part, upon the growth in number of vehicles on the road, increase in average vehicle age, change in total miles driven per year, new or modified environmental and vehicle safety regulations, including fuel economy and emissions reduction standards, increase in pricing of new cars and new car quality and related warranties.  The automotive aftermarket has been negatively impacted by the fact that the quality of more recent automotive vehicles and their component parts (and related warranties) has improved, thereby lengthening the repair cycle.  Generally, if parts last longer, there will be less demand for our aftermarket products and the average useful life of automotive parts has been steadily increasing in recent years due to innovations in products and technology.  In addition, the introduction by original equipment manufacturers of increased warranty and maintenance initiatives has the potential to decrease the demand for our aftermarket products.  When proper maintenance and repair procedures are followed, newer air conditioning (A/C) systems in particular are less prone to leak resulting in fewer A/C system repairs.  These factors could have a material adverse effect on our business, financial condition and results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 1C. CYBERSECURITY

Cybersecurity Risk Management and Strategy

We maintain an enterprise-wide approach to risk management through which we identify, manage and mitigate significant risks, including those related to our information systems.  Our cybersecurity risk management program, which applies to our global operations, focuses on our people, processes and technology, and is designed to secure our information systems by preventing, detecting and responding to current and emerging cybersecurity threats.

Our employees are a key element of our cybersecurity risk management program.  All of our employees are required to adhere to our cybersecurity practices, and undertake routine training to raise awareness and reinforce safe practices.  Our training program includes bi-annual online training courses, group tabletop exercises, phishing and malicious email simulations, and information security bulletins.  We also maintain policies that govern, and provide specific guidance to employees regarding how they may use our information systems.

Another key element of our cybersecurity risk management program is our use of processes and technologies to create information security safeguards and controls, and target specific users or business needs.  Our processes and technologies include firewalls, email security software and encryption, endpoint detection and response, access controls, backup and recovery procedures, system patches and updates, vulnerability scanning, penetration testing by third party vendors, incident response procedures, and internal and external audits of our information systems.

Through these internal and external assessments, we continuously identify areas for remediation and opportunities to improve the security of our information systems, including by evaluating our program against industry standards and best practices, such as the Cybersecurity Framework established by the National Institute of Standards and Technology (NIST) and the CIS Critical Security Controls established by the Center for Internet Security. We also track key performance indicators that we believe are indicative of the effectiveness of our cybersecurity risk management program.

For additional information related to cybersecurity risks that could have a material and adverse effect on our business, financial condition or results of operations, see “Our operations could be adversely affected by interruptions or breaches in the security of our computer and information systems” in Item 1A of this Report.

Cybersecurity Governance

The Audit Committee of our Board of Directors oversees the adequacy and effectiveness of our internal controls, policies and procedures regarding cybersecurity, information security and data protection, and compliance with applicable laws and regulations concerning privacy. Our Chief Information Officer (“CIO”), in turn, is responsible for managing the Company’s cybersecurity risk management program and incident response procedures. On a quarterly basis, and more frequently as circumstances warrant, our CIO briefs the Audit Committee on our cybersecurity risks, our strategies for preventing, detecting, responding to and mitigating such risks, including the effectiveness of our incident response procedures, and our information security controls. Our CIO has extensive knowledge and expertise regarding our information systems and security, having served in a variety of senior information technology positions across our organization for more than thirty years, and as an executive officer of the Company since 2006.

Additionally, our CIO leads an incident response team (“IRT”), charged with the on-going management of our cybersecurity program. This team is responsible for the prevention, mitigation, detection and remediation of cybersecurity risks and incidents affecting our operations pursuant to our incident response procedures. The IRT is composed of information security professionals, who collectively bring decades of relevant information security and cybersecurity experience to their roles. In the event that a cybersecurity incident is detected, the IRT performs a multi-factor, risk-based assessment to determine the appropriate level of response. Depending upon the results of the assessment, including the nature and magnitude of the event, our incident response procedures provide for oversight and management of an incident by the IRT, under the direction of the CIO, or, in the event of escalation, under the direction of the executive officers of the Company, with reporting to and oversight by the Audit Committee.

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ITEM 2. PROPERTIES

We maintain our executive offices in Long Island City, New York. The table below describes our principal facilities as of December 31, 2023.

Location	State or Country	Principal Business Activity	Approx. Square Feet	Owned or Expiration Date of Lease¹
		Vehicle Control
Bialystok	Poland	Manufacturing	154,800	2027
Disputanta	VA	Distribution	411,000	Owned
Edwardsville	KS	Distribution	363,500	Owned
Ft. Lauderdale	FL	Distribution	23,300	Owned
Ft. Lauderdale	FL	Distribution	30,000	Owned
Greenville2	SC	Manufacturing	184,500	Owned
Independence2	KS	Manufacturing	337,400	Owned
Long Island City	NY	Administration	75,800	2033
McAllen	TX	Distribution	120,300	2027
Mishawaka2	IN	Manufacturing	153,100	Owned
Reynosa2	Mexico	Manufacturing	175,000	2025
Reynosa2	Mexico	Manufacturing	153,000	2031
Shawnee3	KS	Distribution	574,700	2033
		Temperature Control
Foshan City	China	Manufacturing	361,500	2028
Lewisville	TX	Administration and Distribution	415,000	2034
Reynosa2	Mexico	Manufacturing	82,000	2026
Reynosa2	Mexico	Manufacturing	117,500	2026
Reynosa	Mexico	Manufacturing	111,800	2024
St. Thomas	Canada	Manufacturing	42,500	Owned
		Engineered Solutions
Kirchheim-Teck	Germany	Distribution	27,500	2031
Pécel	Hungary	Manufacturing	59,500	Owned
Milwaukee	WI	Manufacturing	84,000	2028
Sheboygan Falls	WI	Manufacturing	22,500	2025
Tijuana	Mexico	Distribution	13,800	2026
Tijuana	Mexico	Manufacturing	30,400	2026
Wuxi	China	Manufacturing	27,600	2029
		Other
Mississauga	Canada	Administration and Distribution	82,400	2028
Irving	TX	Training Center	13,400	2027

¹ It is our intention to extend the leases that are set to expire in 2024.

² These facilities are also utilized by the Engineered Solutions operating segment.

³ This facility is expected to have a phased opening beginning in 2024 and be fully operational in early 2025, and once operational, it will also be utilized by the Temperature Control and Engineered Solutions operating segments.

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ITEM 3. LEGAL PROCEEDINGS

The information required by this Item is incorporated herein by reference to the information set forth in Item 8, “Financial Statements and Supplementary Data” of this Report under the caption “Asbestos” appearing in Note 23, “Commitments and Contingencies” of the Notes to Consolidated Financial Statements in Item 8 of this Report.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock trades publicly on the New York Stock Exchange (“NYSE”) under the trading symbol “SMP.”  The last reported sale price of our common stock on the NYSE on February 20, 2024 was $40.23 per share.  As of February 20, 2024, there were 497 holders of record of our common stock.

Dividends are declared and paid on the common stock at the discretion of our Board of Directors (the “Board”) and depend on our profitability, financial condition, capital needs, future prospects, and other factors deemed relevant by our Board.  Our Credit Agreement permits dividends and distributions by us provided specific conditions are met.  For information related to our Credit Agreement, see Note 11, “Credit Facilities and Long-Term Debt,” of the Notes to Consolidated Financial Statements in Item 8 of this Report.

There have been no unregistered offerings of our common stock during the fourth quarter of 2023.

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Stock Performance Graph

The following graph compares the five year cumulative total return on the Company’s Common Stock to the total returns on the Standard & Poor’s 500 Stock Index and the S&P 1500 Auto Parts & Equipment Index, which is a combination of automotive parts and equipment companies within the S&P 400, the S&P 500 and the S&P 600.  The graph shows the change in value of a $100 investment in the Company’s Common Stock and each of the above indices on December 31, 2018 and the reinvestment of all dividends. The comparisons in this table are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of the Company’s Common Stock or the referenced indices.

    

	SMP	S&P 500	S&P 1500 Auto Parts & Equipment Index
2018	100	100	100
2019	112	131	133
2020	86	156	164
2021	114	200	201
2022	78	164	136
2023	92	207	145

* Source: S&P Capital IQ

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ITEM 6. (RESERVED)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 each of the fiscal years in the three-year period ended December 31, 2023.

	December 31,
(In thousands, except per share data)	2023			2022			2021
Net sales	$	1,358,272		$	1,371,815		$	1,298,816
Gross profit		388,826			382,539			376,931
Gross profit %		28.6	%		27.9	%		29	%
Operating income		92,677			104,135			128,999
Operating income %		6.8	%		7.6	%		9.9	%
Earnings from continuing operations before income taxes		81,716			98,332			130,465
Provision for income taxes		18,368			25,206			31,044
Earnings from continuing operations		63,348			73,126			99,421
Loss from discontinued operations, net of income taxes		(28,996	)		(17,691	)		(8,467	)
Net earnings		34,352			55,435			90,954
Net earnings attributable to noncontrolling interest		204			84			68
Net earnings attributable to SMP		34,148			55,351			90,886
Per share data attributable to SMP – Diluted:
Earnings from continuing operations	$	2.85		$	3.30		$	4.39
Discontinued operations		(1.31	)		(0.80	)		(0.37	)
Net earnings per common share	$	1.54		$	2.50		$	4.02

Consolidated net sales for 2023 were $1,358.3 million, a decrease of $13.5 million, or 1% compared to net sales of $1,371.8 million in 2022; while consolidated net sales for 2022 increased $73 million, or 5.6%, compared to net sales of $1,298.8 million in 2021.  Consolidated 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.

Our net sales performance in 2023 reflects the impact of multiple factors including:

• lower sales in our Vehicle Control operating segment reflecting the impact of lower sales to a customer that filed for bankruptcy in the first quarter, as well as the negative impact of lower customer pipeline orders and softer fourth quarter sales,

• lower sales in our Temperature Control operating segment reflecting the impact of a slow start to the season caused by a rainy spring and cool early summer temperatures across key markets. Although customer demand and net sales increased significantly in the third quarter of 2023 as summer temperatures increased, the strong third quarter 2023 net sales were not enough to offset the slow start to the season, and

• strong demand and new business wins in our Engineered Solutions operating segment with continued optimism about the long-term growth potential of the complementary markets served in this newly created segment.

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Gross margins as a percentage of net sales in 2023 was 28.6% as compared to 27.9% in 2022.  The gross margin percentages in 2023 increased year-over-year in each of our Vehicle Control, Temperature Control and Engineered Solutions operating segments.  Overall, the gross margin increase as a percentage of sales in 2023 reflects the positive impact of increased pricing, improved operating performance, and the favorable customer sales mix in Engineered Solutions, which more than offset ongoing inflationary increases in certain raw materials, labor and transportation costs, as well as the lower fixed cost absorption due to lower production levels than those achieved in 2022 as we worked down inventory levels, and the weakening of the U.S. dollar on our international operations.  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.

Operating margin as a percentage of net sales in 2023 was 6.8% as compared to 7.6% in 2022.  Included in our operating margin were selling, general and administrative expenses (“SG&A”) of $293.6 million, or 21.6% of net sales in 2023, $276.6 million, or 20.2% of net sales in 2022, and $247.5 million, or 19.1% of net sales in 2021.  The higher SG&A expenses in 2023 is principally due to the impact of (1) higher interest rate related costs of $14 million incurred in our supply chain financing arrangements and (2) higher distribution costs, all of which more than offset the positive 2023 comparative impact of the $7 million charge recorded in 2022 to reduce our outstanding accounts receivable balance from a customer that filed for bankruptcy in the first quarter of 2023 to our estimated recoverable amount.  Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in the year ended December 31, 2023 were 20.6% of consolidated net sales, just slightly higher than the percentage in the comparable prior year period.

Overall, our core automotive aftermarket business remains strong, and we continue to be optimistic about the long-term growth potential of the complementary markets served in our Engineered Solutions operating segment.

New Distribution Facility in Shawnee, Kansas

In May 2023, we signed a lease for a new distribution facility in Shawnee, Kansas with a lease commencement date of July 1, 2023.  The new facility will expand our total distribution network square footage to meet our growing demands in the automotive aftermarket industry.  The new 575,000 square foot facility will replace our current 363,000 square foot facility in Edwardsville, Kansas, and integrate state-of-the-art technologies to deliver improved logistics capabilities, operational efficiencies, as well as enhanced employee, customer and supplier experiences.  The new facility is located just five miles away from our Edwardsville facility, enabling us to retain our existing workforce avoiding the additional costs of hiring and training. The facility will have a phased opening beginning in 2024 and be fully operational in early 2025.  We will incur additional costs in 2023 and 2024 during the phase-in period while we operate the two facilities.

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.

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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.

Comparison of Results of Operations For Fiscal Years 2023 and 2022

Sales.  Consolidated net sales for 2023 were $1,358.3 million, a decrease of $13.5 million, or 1%, compared to $1,371.8 million in the same period of 2022, with the majority of our net sales to customers located in the United States.  Consolidated 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 years ended December 31, 2023 and 2022 (in thousands):

	Year Ended December 31,
	2023		2022
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	450,180	$	454,571
Electrical and Safety		221,782		230,487
Wire Sets and Other		65,970		65,513
Total Vehicle Control		737,932		750,571
Temperature Control
AC System Components		237,756		245,484
Other Thermal Components		99,998		105,753
Total Temperature Control		337,754		351,237
Engineered Solutions
Commercial Vehicle		83,025		80,275
Construction/Agriculture		43,402		42,385
Light Vehicle		92,759		91,533
All Other		63,400		55,814
Total Engineered Solutions		282,586		270,007
Other		—		—
Total	$	1,358,272	$	1,371,815

Vehicle Control’s net sales for the year ended December 31, 2023 decreased $12.7 million, or 1.7%, to $737.9 million compared to $750.6 million in the same period of 2022.  The decrease in net sales in our Vehicle Control operating segment reflects the impact of lower sales to a customer that filed for bankruptcy in the first quarter of 2023, as well as the negative impact of lower customer pipeline orders in 2023 and softer fourth quarter sales.

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Temperature Control’s net sales for the year ended December 31, 2023 decreased $13.4 million, or 3.8%, to $337.8 million compared to $351.2 million in the same period of 2022.  The lower year-over-year Temperature Control net sales reflects the impact of a slow start to the season caused by a rainy spring and cool early summer temperatures across key markets which negatively impacted first and second quarter 2023 net sales.  After the slow start to the season, demand increased significantly in the third quarter of 2023 as summer temperatures increased.  The result was strong third quarter 2023 net sales, which was not enough to offset the slow start to the season. Demand for our Temperature Control products may vary significantly with summer weather conditions and customer inventory levels.

Engineered Solutions’ net sales for the year ended December 31, 2023 increased $12.6 million, or 4.7%, to $282.6 million compared to $270 million in the same period of 2022.  Overall, net sales in our Engineered Solutions operating segment showed year-over-year improvement driven by strong demand 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 28.6% for 2023, compared to 27.9% for 2022.  The following table summarizes gross margins by segment for the years ended December 31, 2023 and 2022, respectively (in thousands):

Year Ended December 31,	Vehicle Control			Temperature Control			Engineered Solutions			Other		Total
2023
Net sales	$	737,932		$	337,754		$	282,586		$	—	$	1,358,272
Gross margins		238,215			95,827			54,784			—		388,826
Gross margin percentage		32.3	%		28.4	%		19.4	%		—		28.6	%
2022
Net sales	$	750,571		$	351,237		$	270,007		$	—	$	1,371,815
Gross margins		232,267			98,913			51,359			—		382,539
Gross margin percentage		30.9	%		28.2	%		19	%		—		27.9	%

Compared to 2022, gross margins at Vehicle Control increased 1.4 percentage points from 30.9% to 32.3%. Gross margins at Temperature Control increased 0.2 percentage points from 28.2% to 28.4%, and gross margins at Engineered Solutions increased 0.4 percentage points from 19% to 19.4%.

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 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 increase in our Temperature Control operating segment reflects the impact increased pricing and operating performance; while the gross margin percentage increase at our Engineered Solutions operating segment is driven primarily by favorable customer sales mix and increased pricing.  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”) increased to $293.6 million, or 21.6% of consolidated net sales in 2023, as compared to $276.6 million, or 20.2% of consolidated net sales in 2022.  The $17 million increase in SG&A expenses as compared to 2022 is principally due to the impact of (1) higher interest related costs of $14 million incurred in our supply chain financing arrangements and (2) higher distribution cost, all of which more than offset the positive 2023 comparative impact of the $7 million charge recorded in 2022 to reduce our outstanding accounts receivable balance from one of our customers that filed a petition for bankruptcy in January 2023 to our estimated recovery amount.  Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in 2023 were 20.6% of consolidated net sales, slightly higher than the percentage in the comparable prior year period.

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Restructuring and Integration Expenses.  Restructuring and integration expenses were $2.6 million in 2023 compared to restructuring and integration expenses of $1.9 million in 2022.  Restructuring and integration expenses in 2023 consists of (1) the $2.5 million of costs incurred in our 2022 cost reduction initiative, and (2) the $0.1 million increase in environmental cleanup costs for ongoing remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location; while 2022 expenses consists of (1) costs of $1.5 million incurred in our 2022 cost reduction initiative, (2) relocation expenses of $0.2 million of certain inventory, machinery, and equipment acquired in our 2021 soot sensor acquisition to our facilities in Independence, Kansas and Bialystok, Poland, and (3) the $0.2 million increase in environmental cleanup costs for ongoing remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.

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.  Total restructuring and integration expenses related to the initiative were $2.5 million and $1.5 million 2023 and 2022, respectively.  Expenses related to the initiative for the year ended December 31, 2023 consist of (1) expenses of approximately $0.7 million related to a further sales force reduction, (2) expenses of $1.3 million of employee severance and bonuses related to our product line relocations, and (3) expenses of $0.5 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Expenses related to the initiative for the year ended December 31, 2022 consist of (1) expenses of $0.9 million related to our sales force reduction, and (2) expenses of $0.6 million consisting of employee severance related to our product line relocations.  Additional restructuring costs related to the initiative, and expected to be incurred, are approximately $0.5 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of the second quarter of 2024.

Operating Income.  Operating income was $92.7 million, or 6.8%, of consolidated net sales in 2023, compared to $104.1 million, or 7.6%, of consolidated net sales in 2022.  The year-over-year decrease in operating income of $11.4 million is the result of lower net sales, higher SG&A expenses, consisting primarily of higher interest rate related costs of $14 million incurred in our supply chain financing arrangements, and higher restructuring and integration expenses offset, in part, by higher gross margins as a percentage of sales.

Other Non-Operating Income (Expense), Net.  Other non-operating income, net was $2.3 million in 2023, compared to $4.8 million in 2022.  The year-over-year decrease in other non-operating income, net results from the decrease in year-over-year equity income from our joint ventures, and the unfavorable impact of changes in foreign currency exchange rates.  The decline in equity income from our joint ventures is due, in part, to lower production levels related to inventory reduction plans, and the impact of our acquisition of an additional 15% equity interest in Gwo Yng.  Commencing in July 2023, on the date of our 15% increase in equity interest, the financial results of Gwo Yng were no longer accounted for under the equity method of accounting.  Instead, Gwo Yng’s financial results were reported on a consolidated basis, resulting in lower joint venture equity income.

Interest Expense.  Interest expense increased to $13.3 million in 2023, compared to $10.6 million 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 when compared to 2022, which more than offset the impact of lower average outstanding balances.

Income Tax Provision.  The income tax provision for 2023 was $18.4 million at an effective tax rate of 22.5%, compared to $25.2 million at an effective tax rate of 25.6% in 2022.  The lower effective tax rate in 2023 compared to 2022 reflects the impact of lower state and local income taxes due to changes in state laws, rates and filing methodologies, changes in foreign and domestic mix, and the effective rate impact of lower year-over-year pre-tax income.

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Loss From Discontinued Operations.  Loss from discontinued operations, net of income tax, reflects information contained in the actuarial studies performed as of August 31, 2023 and 2022, as well as other information available and considered by us, and legal expenses and other costs associated with our asbestos-related liability.  During the years ended December 31, 2023 and 2022, we recorded a net loss of $29 million and $17.7 million from discontinued operations, respectively.  The loss from discontinued operations for the year ended December 31, 2023 and 2022 includes (1) a $23.8 million and $18.5 million pre-tax provision, respectively, to increase our indemnity liability in line with the 2023 and 2022 actuarial studies; (2) legal and other miscellaneous expenses, before taxes, of $4.9 million and $5.4 million for 2023 and 2022, respectively, and (3) a $10.5 million pre-tax provision in 2023 related to a breach of contract legal proceeding.  As discussed more fully in Note 23 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements in Item 8 of this Report, we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

Net Earnings Attributable to Noncontrolling Interest.  Net earnings attributable to noncontrolling interest relates to the minority shareholders’ interest in our 70% owned joint venture in Hong Kong, with operations in Shanghai and Wuxi, China (“Trombetta Asia, Ltd.”) and, in our 80% ownership in Gwo Yng, commencing in July 2023 upon the completion of our step acquisition. Net earnings attributable to the noncontrolling interest were $204,000 and $84,000 during the years ended December 31, 2023 and 2022, respectively. For additional information on the Gwo Yng step acquisition, see Note 2, “Business Acquisitions and Investments,” in the notes to our consolidated financial statements (unaudited).

Comparison of Results of Operations For Fiscal Years 2022 and 2021

Sales.  Consolidated net sales for 2022 were $1,371.8 million, an increase of $73 million, or 5.6%, compared to $1,298.8 million in the same period of 2022, with the majority of our net sales to customers located in the United States.  Consolidated net sales increased across all of our operating segments, 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 years ended December 31, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2022		2021
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	454,571	$	444,196
Electrical and Safety		230,487		224,520
Wire Sets and Other		65,513		68,715
Total Vehicle Control		750,571		737,431
Temperature Control
AC System Components		245,484		231,466
Other Thermal Components		105,753		92,614
Total Temperature Control		351,237		324,080
Engineered Solutions
Commercial Vehicle		80,275		76,066
Construction/Agriculture		42,385		33,220
Light Vehicle		91,533		86,440
All Other		55,814		41,579
Total Engineered Solutions		270,007		237,305
Other		—		—
Total	$	1,371,815	$	1,298,816

Vehicle Control’s net sales for the year ended December 31, 2022 increased $13.2 million, or 1.8%, to $750.6 million compared to $737.4 million in the same period of 2021.  The increase in net sales in our Vehicle Control operating segment reflects the impact of strong customer demand and price increases implemented in 2022, which were implemented to pass through inflationary increases in raw materials, distribution and labor costs.

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Temperature Control’s net sales for the year ended December 31, 2022 increased $27.1 million, or 8.4%, to $351.2 million compared to $324.1 million in the same period of 2021.  The increase in net sales in our Temperature Control segment reflects the impact of continued strong customer demand, with the elevated demand we saw in 2021 holding firm, fueled by record heat across the country in 2022 and the replenishment of customer inventory levels after very warm summer conditions in 2021, and the impact of price increases, which were implemented to pass through inflationary increases in raw materials, distribution and labor costs.  Demand for our Temperature Control products may vary significantly with summer weather conditions and customer inventory levels.

Engineered Solutions’ net sales for the year ended December 31, 2022 increased $32.7 million, or 13.8%, to $270 million compared to $237.3 million in the same period of 2021.  The increase in net sales in our Engineered Solutions operating segment reflects the impact of the positive contribution of incremental sales from our soot sensor, Trombetta and Stabil acquisitions of $44.6 million.  Compared to the year ended December 31, 2021, excluding the incremental net sales from the acquisitions, Engineered Solutions net sales decreased $11.9 million, or 5%.

Gross Margins.  Gross margins, as a percentage of consolidated net sales, decreased to 27.9% for 2022, compared to 29% for 2021.  The following table summarizes gross margins by segment for the years ended December 31, 2022 and 2021, respectively (in thousands):

Year Ended December 31,	Vehicle Control			Temperature Control			Engineered Solutions			Other		Total
2022
Net sales	$	750,571		$	351,237		$	270,007		$	—	$	1,371,815
Gross margins		232,267			98,913			51,359			—		382,539
Gross margin percentage		30.9	%		28.2	%		19	%		—		27.9	%
2021
Net sales	$	737,431		$	324,080		$	237,305		$	—	$	1,298,816
Gross margins		238,790			91,738			46,403			—		376,931
Gross margin percentage		32.4	%		28.3	%		19.6	%		—		29	%

Compared to 2021, gross margins at Vehicle Control decreased 1.5 percentage points from 32.4% to 30.9%, gross margins at Temperature Control decreased 0.1 percentage points from 28.3% to 28.2%, and gross margins at Engineered Solutions decreased 1.6 percentage points from 19.6% to 19%.

The gross margin percentage decrease in Vehicle Control compared to the prior year reflects the impact of lower fixed cost absorption due to lower and more normalized production, inflationary cost increases in raw materials, labor and transportation, which were somewhat offset by increased pricing, and higher freight and related expenses resulting from higher inventory levels. The slight gross margin percentage decrease in Temperature Control compared to the prior year reflects the impact of inflationary cost increases in raw materials, labor and transportation, and higher freight and related expenses resulting from higher inventory levels, which were offset by seasonal volume, customer mix and increased pricing.  The gross margin percentage decrease in Engineered Solutions compared to the prior year reflects the impact of inflationary cost increases in raw materials, labor and transportation.  While we anticipate continued margin pressures across all of our segments resulting from inflationary cost increases, we believe that our annual cost initiatives, and our ability to pass through higher prices to our customers, will help to offset the impact of the inflationary increases on our margins.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses (“SG&A”) increased to $276.6 million, or 20.2% of consolidated net sales in 2022, as compared to $247.5 million, or 19.1% of consolidated net sales in 2021.  The $29.1 million increase in SG&A expenses as compared to 2021 is principally due to the impact of (1) higher interest related costs of $20.6 million incurred in our supply chain financing arrangements, (2) the impact of the $7 million charge recorded in 2022 to reduce our outstanding accounts receivable balance from one of our customers that filed a petition for bankruptcy in January 2023 to our estimated recovery amount, (3) incremental expenses of $7.2 million from our soot sensor, Trombetta and Stabil acquisitions, including amortization of intangible assets acquired, and (4) inflationary cost increases resulting in higher distribution and freight costs.  SG&A expenses in 2022 were favorably impacted by the higher mix of non-aftermarket parts sales from recent acquisitions, which have a different profile than our aftermarket business with lower SG&A expenses as a percentage of sales.

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Restructuring and Integration Expenses.  Restructuring and integration expenses were $1.9 million in 2022 compared to restructuring and integration expenses of $0.4 million in 2021.  Restructuring and integration expenses incurred in 2022 of $1.9 million related to (1) severance costs of $0.9 million in connection with a reduction in our sales force, (2) expenses of $0.6 million consisting of employee severance costs related to our product line relocations from our Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico, (3) relocation expenses of $0.2 million of certain inventory, machinery, and equipment acquired in our 2021 soot sensor acquisition to our facilities in Independence, Kansas and Bialystok, Poland, and (4) the $0.2 million increase in environmental cleanup costs for ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.

Restructuring and integration expenses incurred in 2021 of $0.4 million related to the relocation of certain inventory, machinery, and equipment acquired in our 2021 soot sensor acquisition to our facilities in Independence, Kansas and Bialystok, Poland.  The soot sensor product line relocation has been completed.

Operating Income.  Operating income was $104.1 million, or 7.6%, of consolidated net sales in 2022, compared to $129 million, or 9.9%, of consolidated net sales in 2021.  The year-over-year decrease in operating income of $24.9 million is the result of higher SG&A expenses driven primarily by the increased interest rate costs incurred in our supply chain financing arrangements, and to a lesser extent by the impact of lower gross margins as a percentage of consolidated net sales and higher restructuring and integration costs offset, in part, by higher consolidated net sales.

Other Non-Operating Income (Expense), Net.  Other non-operating income, net was $4.8 million in 2022, compared to $3.5 million in 2021.  The year-over-year increase in other non-operating income, net results primarily from the favorable impact of changes in foreign currency exchange rates, and to a lesser extent the increase in year-over-year equity income from our joint ventures.

Interest Expense.  Interest expense increased to $10.6 million in 2022, compared to $2 million in 2021.  The year-over-year increase in interest expense reflects the impact of higher average outstanding borrowings in 2022 when compared to 2021, and the impact of higher year-over-year average interest rates on our credit facilities.

Income Tax Provision.  The income tax provision for 2022 was $25.2 million at an effective tax rate of 25.6%, compared to $31 million at an effective tax rate of 23.8% in 2021.  The higher effective tax rate in 2022 compared to 2021 results primarily from the income tax provision impact related to the exercise of restricted stock.

Loss From Discontinued Operations.  Loss from discontinued operations, net of income tax, reflects information contained in the actuarial studies performed as of August 31, 2022 and 2021, as well as other information available and considered by us, and legal expenses and other costs associated with our asbestos-related liability.  During the years ended December 31, 2022 and 2021, we recorded a net loss of $17.7 million and $8.5 million from discontinued operations, respectively.  The loss from discontinued operations for the year ended December 31, 2022 and 2021 includes an $18.5 million and $5.3 million pre-tax provision, respectively, to increase our indemnity liability in line with the 2022 and 2021 actuarial studies; and legal expenses and other miscellaneous expenses, before taxes, of $5.4 million and $6.1 million for 2022 and 2021, respectively.  As discussed more fully in Note 23 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements in Item 8 of this Report, we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

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Net Earnings Attributable to Noncontrolling Interest.  In May 2021, we acquired the Trombetta business for $111.7 million. As part of the acquisition, we acquired a 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 $84,000 and $68,000 during the years ended December 31, 2022 and 2021, 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 3, “Restructuring and Integration Expense,” of the Notes Consolidated Financial Statements in Item 8 of this Report.

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.

	December 31,
(In thousands)	2023		2022
Operating cash flows	$	144,260	$	(27,533	)
Total debt	$	156,211	$	239,620
Cash and cash equivalents		32,526		21,150
Net debt	$	123,685	$	218,470
Remaining borrowing capacity	$	334,180	$	255,631
Total liquidity		366,706		276,781

Operating Activities.  During 2023, cash provided by operating activities was $144.3 million compared to cash used in operating activities of $27.5 million in 2022.  The increase in cash provided by operating activities resulted primarily from the larger year-over-year decrease in accounts receivable, the decrease in inventories compared to an increase in inventories in the prior year, the increase in accounts payable compared to a decrease in accounts payable in the prior year, no change in prepaid expenses and other current assets compared to an increase in prepaid expenses and other current assets in the prior year, and the smaller year-over-year decrease in sundry payables and accrued expenses offset, in part, by the decrease in net earnings.

Net earnings during 2023 were $34.4 million compared to $55.4 million in 2022.  During 2023, (1) the decrease in accounts receivable was $8 million compared to the year-over-year decrease in accounts receivable of $6.9 million in 2022; (2) the decrease in inventories was $29.5 million compared to the year-over-year increase in inventories of $67.5 million in 2022; (3) the increase in accounts payable was $19.6 million compared to the year-over-year decrease in accounts payable of $48.6 million in 2022; (4) there was no change in prepaid expenses and other current assets compared to the year-over-year increase in prepaid expenses and other current assets of $5.5 million in 2022; and (5) the decrease in sundry payables and accrued expenses was $4.3 million compared to the year-over-year decrease in sundry payables and accrued expenses of $29.1 million in 2022.  During 2023, we generated operating cash flow of $144.3 million by reducing our inventory to more normalized levels while actively managing our accounts receivable and accounts payable.  We will continue to manage our working capital to maximize our operating cash flow.  Now that global supply chains have stabilized, allowing us to lower working capital in 2023, we expect cash flows from operations will return to historical levels in 2024.

Investing Activities.  Cash used in investing activities was $25.7 million in 2023 compared to $27.8 million in 2022.  Investing activities during 2023 consisted of (1) the payment of $4 million for our acquisition of an additional 15% equity interest in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co., Ltd. (“Gwo Yng”) and (2) capital expenditures of $28.6 million offset, in part, by cash acquired of $6.8 million in the Gwo Yng step acquisition.

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Investing activities during 2022 consisted of (1) the cash payment of $1.7 million for our acquisition of 100% of the capital stock of Kade Trading GmbH, a German company, (“Kade”) , net of $1 million of cash acquired and the $0.5 million earn-out; (2) the payment of $0.2 million for our 3.55% increase in equity ownership in Foshan Che Yijia New Energy Technology Co., Ltd., (“CYJ”), a China-based joint venture that manufactures automotive electric air conditioning compressors; and (3) capital expenditures of $26 million.

Financing Activities.  Cash used in financing activities was $109.6 million in 2023 compared to cash provided by financing activities of $55.5 million in 2022.  During 2023, we (1) reduced our borrowings under our Credit Agreement by $83.5 million; and (2) paid dividends of $25.2 million and $0.7 million to shareholders of our noncontrolling interests, respectively.  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. Borrowings under the new credit facility were used to repay all outstanding borrowings under the then existing revolving credit facility, and certain fees and expenses incurred in connection with the refinancing.

Cash provided by financing activities was $55.5 million in 2022.  During 2022, we (1) increased our borrowings under our revolving credit facilities by $114.2 million; (2) reduced our borrowings under lease obligations and our Polish overdraft facility by $2.9 million; (3) made cash payments of $2.1 million for debt issuance costs in connection with our refinancing; (4) made cash payments for the repurchase of shares of our common stock of $29.7 million; and (5) paid dividends of $23.4 million.  Cash provided by borrowings under our credit facilities were used to fund our operating activities, investing activities, reduce our borrowings under lease obligations and our Polish overdraft facility, pay debt issuance costs in connection with the refinancing, purchase shares of our common stock and pay dividends.

Dividends of $25.2 million and $23.4 million were paid in 2023 and 2022, respectively.  Quarterly dividends were paid at a rate of $0.29 in 2023 and $0.27 in 2022.

Comparison of Liquidity and Capital Resources For Fiscal Years 2022 and 2021

For a detailed discussion of our Liquidity and Capital Resources comparison of fiscal year 2022 to fiscal year 2021, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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, we 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 existing Credit Agreement, dated as of October 28, 2015, among the Company, SMP Motor Products Ltd. and Trumpet Holdings, Inc., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lenders named therein (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.

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The Company may, upon the agreement of one or more of 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 are being 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 December 31, 2023 under the Credit Agreement were $156 million, consisting of current borrowings of $5 million and long-term debt of $151 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 $2.3 million and $2.4 million at December 31, 2023 and 2022, respectively.

At December 31, 2023, the weighted average interest rate under our Credit Agreement was 5%, which consisted of $156 million in borrowings at 5% 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 year ended December 31, 2023, our average daily alternative base rate loan balance was $0.1 million, compared to 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.

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In November 2023, our Polish subsidiary, SMP Poland sp. z.o.o., further amended its overdraft facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce.  The overdraft facility, as amended, provides for borrowings under the facility in Euros and U.S. Dollars.  Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.6 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit (approximately $6.5 million) if borrowings are in Euros and/or U.S. Dollars.  The overdraft facility has a maturity date in March 2024, with automatic three-month renewals until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period.  Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.0% for borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.0% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.25% for borrowings in U.S Dollars.  Borrowings under the overdraft facility are guaranteed by Standard Motor Products, Inc., the ultimate parent company.  There were no borrowings outstanding under the overdraft facility at both December 31, 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 $830.8 million and $813.7 million of receivables for the years ended December 31, 2023 and 2022, respectively. Receivables presented at financial institutions and not yet collected as of December 31, 2023 were $4.5 million and remained in our 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 $46 million, $32 million and $11.5 million related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays or failures in collecting trade accounts receivables.  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 January 2023, one of our customers filed a petition for bankruptcy.  In connection with the bankruptcy filing, we evaluated our potential risk and exposure as related to our outstanding accounts receivable balance from the customer as of December 31, 2022, and estimated our anticipated recovery.  As a result of our evaluation, we recorded a $7 million pre-tax charge during the year ended December 31, 2022 to reduce our accounts receivable balance to our estimated recovery.  The $7 million pre-tax charge was included in selling, general and administrative expenses in our consolidated statement of operations.  The bankruptcy court proceedings have continued into 2023.  Although the courts have named us a “critical supplier,” the funds allocated to us have not yet been determined and, as such, we have not recorded an adjustment to the $7 million pre-tax charge previously recorded.

In March 2020, our Board of Directors authorized the purchase of up to $20 million of our common stock under a stock repurchase program.  Stock repurchases under this program during the year ended December 31, 2021 were 150,273 shares of our common stock at a total cost of $6.5 million thereby completing the 2020 Board of Directors authorization.

In February 2021, our Board of Directors authorized the purchase of up to an additional $20 million of our common stock under a stock repurchase program.  Stock repurchases under this program during the year ended December 31, 2021 were 464,992 shares of our common stock at a total cost of $20 million, thereby completing the February 2021 Board of Directors authorization.

In October 2021, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a stock repurchase program.  Stock repurchases under this program, during the year ended December 31, 2021 and 2022 were 7,000 and 692,067 shares of our common stock, respectively, at a total cost of $0.3 million and $29.7 million, respectively, thereby completing the October 2021 Board of Directors authorization.

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In July 2022, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a new stock repurchase program. Stock will be purchased under the program from time to time, in the open market or through private transactions, as market conditions warrant.  To date, there have been no repurchases of our common stock under the program.

Material Cash Commitments

Material cash commitments as of December 31, 2023 consist of required cash payments to service our outstanding borrowings of $156 million under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent and the future minimum cash requirements of $131.7 million through 2034 under operating leases.  All of our other cash commitments as of December 31, 2023 are not material.  For additional information related to our material cash commitments, see Note 7, “Leases,” and Note 11, “Credit Facilities and Long-Term Debt,” of the Notes to Consolidated Financial Statements in Item 8 of this Report.

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 by geo-political risks, 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 this Report.

Critical Accounting Policies and Estimates

We have identified the two accounting policies and estimates below 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.  For a detailed discussion on the application of these and other accounting policies, see Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in Item 8 of this Report.

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 caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.

Valuation of Long‑Lived and Intangible Assets and Goodwill

At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, patents, developed technology and intellectual property, and non-compete agreements.  Intangible assets acquired through business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date.  Valuing intangible assets requires the use of significant estimates and assumptions.  As related to valuing customer relationships, significant estimates and assumptions used include but are not limited to: (1) forecasted revenues attributable to existing customers; (2) forecasted earnings before interest and taxes (“EBIT”) margins; (3) customer attrition rates; and (4) the discount rate.  Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.  Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment.  Intangible assets determined to have definite lives are amortized over their remaining useful lives.  We believe that the fair value of acquired identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

40

We assess the impairment of long‑lived assets, identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable.  With respect to goodwill and identifiable intangible assets having indefinite lives, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount.  Factors we consider important, which could trigger an impairment review, include the following: (a) significant underperformance relative to expected historical or projected future operating results; (b) significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and (c) significant negative industry or economic trends.  We review the fair values using the discounted cash flows method and market multiples.

When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required.  If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test.  In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount.  A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology similar with that used to evaluate goodwill.  Intangible assets having definite lives and other long-lived assets are reviewed for impairment whenever events such as product discontinuance, plant closures, product dispositions or other changes in circumstances indicate that the carrying amount may not be recoverable.  In reviewing for impairment, we compare the carrying value of such assets to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition.  When the estimated undiscounted future cash flows are less than their carrying amount, an impairment loss is recognized equal to the difference between the assets fair value and their carrying value.

There are inherent assumptions and estimates used in developing future cash flows requiring our judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and long‑lived asset impairment including projecting revenues, interest rates, tax rates and the cost of capital.  Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods.  These changes can result in future impairments.  In the event our planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our business, financial condition and results of operations.

Asbestos Litigation

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.  Future legal costs are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations.

41

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, which will reported in earnings (loss) from discontinued operations in the accompanying statement of operations.  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.  See Note 23, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements in Item 8 of this Report for additional information.

Recently Issued Accounting Pronouncements

For a detailed discussion on recently issued accounting pronouncements and their impact on our consolidated financial statements, see Note 1, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Item 8 of this Report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures 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 December 31, 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 for 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.

42

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 1.25% at December 31, 2023.

As of December 31, 2023, we had approximately $156 million of outstanding borrowings under our Credit Agreement, of which approximately $56 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 Credit Agreement 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 $0.2 million annualized negative impact on our earnings or cash flows.

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 year ended December 31, 2023, we sold $830.8 million of receivables.  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 $8.3 million negative impact on our earnings or cash flows.  The charge related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations.

43

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page No.
Management’s Report on Internal Control over Financial Reporting	45
Reports of Independent Registered Public Accounting Firm	46
Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021	48
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021	49
Consolidated Balance Sheets as of December 31, 2023 and 2022	50
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021	51
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021	52
Notes to Consolidated Financial Statements	53

44

MANAGEMENT’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

To the Stockholders of

Standard Motor Products, Inc. and Subsidiaries:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act). Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Because of these inherent limitations, internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and presentation, and may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control - Integrated Framework.  Based on our assessment using those criteria, we concluded that, as of December 31, 2023, our internal control over financial reporting is effective.

Our independent registered public accounting firm, KPMG LLP, has audited our consolidated financial statements as of and for the year ended December 31, 2023 and has also audited the effectiveness of our internal control over financial reporting as of December 31, 2023.  KPMG’s report appears on the following pages of this “Item 8. Financial Statements and Supplementary Data.”

45

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
Standard Motor Products, Inc. and Subsidiaries:

Opinion on Internal Control Over Financial Reporting

We have audited Standard Motor Products, Inc and Subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 22, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

New York, New York
February 22, 2024

46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
Standard Motor Products, Inc. and Subsidiaries:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Standard Motor Products, Inc. and Subsidiaries’ (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2023, and the related notes and financial statement Schedule II Valuation and Qualifying Accounts (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Asbestos liability and litigation

As discussed in Notes 1 and 23 to the consolidated financial statements, the Company is involved in asbestos litigation and has a potential asbestos liability. As of December 31, 2023, the accrued asbestos liability was $82 million.  The Company’s asbestos liability represents the low end of the actuarially determined range of the undiscounted liability for settlement payments and awards of asbestos related damages, excluding legal costs and any potential recovery from insurance carriers.

We identified the assessment of the asbestos liability recorded as a critical audit matter. This required subjective auditor judgment, due to the nature of the estimate and assumptions, including the applicability of those assumptions to the current facts and circumstances, as well as judgments about future events and uncertainties. Specialized skills were needed to evaluate the Company’s key assumptions. The key assumptions included future claim filings, closed with pay ratios, closed with pay lag patterns, settlement values, and large claims. Minor changes to these key assumptions could have had a significant effect on the Company’s assessment of the accrual for the asbestos liability.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the asbestos liability estimation process. This included controls related to the key assumptions and the claims data utilized in the process, and the potential need for an updated actuarial valuation. We evaluated the asbestos related legal cases settled during the year and the number of open cases as of year-end by reading letters received directly from the Company’s external and internal legal counsel. We tested a selection of claims data used in the actuarial model by comparing the selection items to underlying claims documentation. We involved an actuarial professional with specialized skills and knowledge, who assisted in evaluating (1) the future claim filings assumption by developing an independent expectation and comparing it against the Company’s future claim filing assumption, and (2) the closed with pay ratios, closed with pay lag patterns, settlement values, and large claims by comparing them to the Company’s historical experience.

/s/ KPMG LLP

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

New York, New York

February 22, 2024

47

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2023			2022			2021
	(Dollars in thousands, except share and per share data)
Net sales	$	1,358,272		$	1,371,815		$	1,298,816
Cost of sales		969,446			989,276			921,885
Gross profit		388,826			382,539			376,931
Selling, general and administrative expenses		293,583			276,626			247,547
Restructuring and integration expenses		2,642			1,891			392
Other income, net		76			113			7
Operating income		92,677			104,135			128,999
Other non-operating income, net		2,326			4,814			3,494
Interest expense		13,287			10,617			2,028
Earnings from continuing operations before income taxes		81,716			98,332			130,465
Provision for income taxes		18,368			25,206			31,044
Earnings from continuing operations		63,348			73,126			99,421
Loss from discontinued operations, net of income tax benefit of $10,188, $6,216 and $2,975		(28,996	)		(17,691	)		(8,467	)
Net earnings		34,352			55,435			90,954
Net earnings attributable to noncontrolling interest		204			84			68
Net earnings attributable to SMP (a)	$	34,148		$	55,351		$	90,886
Net earnings attributable to SMP
Earnings from continuing operations	$	63,144		$	73,042		$	99,353
Discontinued operations		(28,996	)		(17,691	)		(8,467	)
Total	$	34,148		$	55,351		$	90,886
Per share data attributable to SMP
Net earnings per common share – Basic:
Earnings from continuing operations	$	2.91		$	3.37		$	4.49
Discontinued operations		(1.34	)		(0.82	)		(0.39	)
Net earnings per common share – Basic	$	1.57		$	2.55		$	4.10
Net earnings per common share – Diluted:
Earnings from continuing operations	$	2.85		$	3.30		$	4.39
Discontinued operations		(1.31	)		(0.80	)		(0.37	)
Net earnings per common share – Diluted	$	1.54		$	2.50		$	4.02
Dividend declared per share	$	1.16		$	1.08		$	1.00
Average number of common shares		21,716,177			21,683,719			22,147,479
Average number of common shares and dilutive common shares		22,161,341			22,139,981			22,616,456

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

See accompanying notes to consolidated financial statements.

48

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended December 31,
	2023			2022			2021
	(In thousands)
Net earnings	$	34,352		$	55,435		$	90,954
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		7,447			(8,222	)		(2,462	)
Derivative instruments		(924	)		3,823			—
Pension and postretirement plans		(13	)		(15	)		(16	)
Total other comprehensive income (loss), net of tax		6,510			(4,414	)		(2,478	)
Total comprehensive income		40,862			51,021			88,476
Comprehensive income (loss) attributable to noncontrolling interest, net of tax:
Net earnings		204			84			68
Foreign currency translation adjustments		14			(113	)		15
Comprehensive income (loss) attributable to noncontrolling interest, net of tax		218			(29	)		83
Comprehensive income attributable to SMP	$	40,644		$	51,050		$	88,393

See accompanying notes to consolidated financial statements.

49

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2023			2022
	(Dollars in thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	32,526		$	21,150
Accounts receivable, less allowances for discounts and expected credit losses of $8,045 and $5,375 in 2023 and 2022, respectively		160,282			167,638
Inventories		507,075			528,715
Unreturned customer inventories		18,240			19,695
Prepaid expenses and other current assets		26,100			25,241
Total current assets		744,223			762,439
Property, plant and equipment, net		121,872			107,148
Operating lease right-of-use assets		100,065			49,838
Goodwill		134,729			132,087
Other intangibles, net		92,308			100,504
Deferred incomes taxes		40,533			33,658
Investments in unconsolidated affiliates		24,050			41,745
Other assets		35,267			27,510
Total assets	$	1,293,047		$	1,254,929
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of revolving credit facility	$	—		$	50,000
Current portion of term loan and other debt		5,029			5,031
Accounts payable		107,455			89,247
Sundry payables and accrued expenses		63,303			49,990
Accrued customer returns		38,238			37,169
Accrued core liability		18,399			22,952
Accrued rebates		42,278			37,381
Payroll and commissions		29,561			31,361
Total current liabilities		304,263			323,131
Long-term debt		151,182			184,589
Noncurrent operating lease liabilities		88,974			40,709
Other accrued liabilities		25,742			22,157
Accrued asbestos liabilities		72,013			63,305
Total liabilities		642,174			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		101,751			105,615
Retained earnings		573,226			564,242
Accumulated other comprehensive income		(5,974	)		(12,470	)
Treasury stock - at cost (2,018,982 shares and 2,350,377 shares in 2023 and 2022, respectively)		(81,811	)		(95,239	)
Total SMP stockholders’ equity		635,064			610,020
Noncontrolling interest		15,809			11,018
Total stockholders’ equity		650,873			621,038
Total liabilities and stockholders’ equity	$	1,293,047		$	1,254,929

See accompanying notes to consolidated financial statements.

50

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2023			2022			2021
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	34,352		$	55,435		$	90,954
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		29,022			28,298			27,243
Amortization of deferred financing cost		491			421			228
Increase (decrease) to allowance for expected credit losses		2,943			(757	)		451
Increase (decrease) to inventory reserves		3,068			6,035			(585	)
Customer bankruptcy charge		—			7,002			—
Equity income from joint ventures		(2,070	)		(3,464	)		(3,295	)
Employee Stock Ownership Plan allocation		2,966			2,296			2,513
Stock-based compensation		6,598			8,178			9,479
(Increase) in deferred income taxes		(6,952	)		(713	)		(1,801	)
Increase in tax valuation allowance		674			1,068			466
Loss on discontinued operations, net of tax		28,996			17,691			8,467
Change in assets and liabilities:
Decrease in accounts receivable		7,965			6,916			28,464
(Increase) decrease in inventories		29,494			(67,495	)		(107,609	)
(Increase) in prepaid expenses and other current assets		(70	)		(5,509	)		(843	)
Increase (decrease) in accounts payable		19,645			(48,604	)		33,046
Increase (decrease) in sundry payables and accrued expenses		(4,284	)		(29,089	)		13,430
Net changes in other assets and liabilities		(8,578	)		(5,242	)		(15,044	)
Net cash provided by (used in) operating activities		144,260			(27,533	)		85,564
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of and investments in businesses		(3,954	)		(1,934	)		(125,419	)
Cash acquired in step acquisition		6,779			—			—
Capital expenditures		(28,633	)		(25,956	)		(25,875	)
Other investing activities		108			73			45
Net cash used in investing activities		(25,700	)		(27,817	)		(151,249	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan		—			100,000			—
Repayments of term loan		(5,000	)		(2,500	)		—
Net borrowings (repayments) under revolving credit facilities		(78,500	)		16,702			115,298
Net borrowings (repayments) of other debt and lease obligations		(58	)		(2,895	)		3,048
Purchase of treasury stock		—			(29,656	)		(26,862	)
Payments of debt issuance costs		—			(2,128	)		—
Increase (decrease) in overdraft balances		(189	)		(595	)		247
Dividends paid		(25,164	)		(23,428	)		(22,179	)
Dividends paid to noncontrolling interest		(700	)		—			(540	)
Net cash provided by (used in) financing activities		(109,611	)		55,500			69,012
Effect of exchange rate changes on cash		2,427			(755	)		(1,060	)
Net increase (decrease) in cash and cash equivalents		11,376			(605	)		2,267
CASH AND CASH EQUIVALENTS at beginning of year		21,150			21,755			19,488
CASH AND CASH EQUIVALENTS at end of year	$	32,526		$	21,150		$	21,755
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	14,597		$	9,892		$	1,721
Income taxes	$	16,019		$	25,015		$	26,323

See accompanying notes to consolidated financial statements.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Years Ended December 31, 2023, 2022 and 2021

	Common Stock		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total SMP			Non- controlling Interest			Total
(In thousands)
BALANCE AT DECEMBER 31, 2020	$	47,872	$	105,084		$	463,612		$	(5,676	)	$	(60,656	)	$	550,236		$	—		$	550,236
Noncontrolling interest in business acquired		—		—			—			—			—			—			11,504			11,504
Net earnings		—		—			90,886			—			—			90,886			68			90,954
Other comprehensive loss, net of tax		—		—			—			(2,493	)		—			(2,493	)		15			(2,478	)
Cash dividends paid ($1.00 per share)		—		—			(22,179	)		—			—			(22,179	)		—			(22,179	)
Purchase of treasury stock		—		—			—			—			(26,862	)		(26,862	)		—			(26,862	)
Dividends paid to noncontrolling interest		—		—			—			—			—			—			(540	)		(540	)
Stock-based compensation		—		159			—			—			9,320			9,479			—			9,479
Employee Stock Ownership Plan		—		134			—			—			2,379			2,513			—			2,513
BALANCE AT DECEMBER 31, 2021		47,872		105,377			532,319			(8,169	)		(75,819	)		601,580			11,047			612,627
Net earnings		—		—			55,351			—			—			55,351			84			55,435
Other comprehensive loss, net of tax		—		—			—			(4,301	)		—			(4,301	)		(113	)		(4,414	)
Cash dividends paid ($1.08 per share)		—		—			(23,428	)		—			—			(23,428	)		—			(23,428	)
Purchase of treasury stock		—		—			—			—			(29,656	)		(29,656	)		—			(29,656	)
Stock-based compensation		—		(131	)		—			—			8,309			8,178			—			8,178
Employee Stock Ownership Plan		—		369			—			—			1,927			2,296			—			2,296
BALANCE AT DECEMBER 31, 2022		47,872		105,615			564,242			(12,470	)		(95,239	)		610,020			11,018			621,038
Noncontrolling interest in step acquisition		—		—			—			—			—			—			5,273			5,273
Net earnings		—		—			34,148			—			—			34,148			204			34,352
Other comprehensive loss, net of tax		—		—			—			6,496			—			6,496			14			6,510
Cash dividends paid ($1.16 per share)		—		—			(25,164	)		—			—			(25,164	)		—			(25,164	)
Dividends paid to noncontrolling interest		—		—			—			—			—			—			(700	)		(700	)
Stock-based compensation		—		(3,880	)		—			—			10,478			6,598			—			6,598
Employee Stock Ownership Plan		—		16			—			—			2,950			2,966			—			2,966
BALANCE AT DECEMBER 31, 2023	$	47,872	$	101,751		$	573,226		$	(5,974	)	$	(81,811	)	$	635,064		$	15,809		$	650,873

See accompanying notes to consolidated financial statements.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

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 a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets.  Our automotive aftermarket is comprised of two segments, Vehicle Control and Temperature Control, while our Engineered Solutions segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.  We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin American countries.

The 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.

Use of Estimates

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 caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.  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.

Reclassification

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

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reportable Segments

Beginning on January 1, 2023, we reorganized our business into three operating segments – Vehicle Control, Temperature Control and Engineered Solutions. The new operating segment structure better aligns our operations with our strategic focus on diversifying our business, provides greater transparency into our positioning to capture opportunities for growth in the future, and provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment.  Prior period segment results have been reclassified to conform to our operating segment reorganization.  For additional information related to our segment reorganization, see Note 8, “Goodwill and Acquired Intangible Assets,” Note 21, “Industry Segment and Geographic Data” and Note 22, “Net Sales.”

Cash and Cash Equivalents

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

Allowance for Expected Credit Losses and Cash Discounts

We do not generally require collateral for our trade accounts receivable. Accounts receivable have been reduced by an allowance for amounts that may become uncollectible in the future. These allowances are established based on a combination of write-off history, supportable forecasts, aging analysis, and specific account evaluations. When a receivable balance is known to be uncollectible, it is written off against the allowance for expected credit losses. Cash discounts are provided based on an overall average experience rate applied to qualifying accounts receivable balances.

Inventories

Inventories are valued at the lower of cost and net realizable value.  Cost is determined on the first-in first-out basis.  Where appropriate, standard cost systems are utilized for purposes of determining cost; the standards are adjusted as necessary to ensure they approximate actual costs.  Estimates of lower of cost and net realizable value of inventory are determined by comparing the actual cost of the product to the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation of the inventory.

We also evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand.  For inventory deemed to be obsolete, we provide a reserve on the full value of the inventory.  Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates our estimate of future demand.  Future projected demand requires management judgment and is based upon (a) our review of historical trends and (b) our estimate of projected customer specific buying patterns and trends in the industry and markets in which we do business.  Using rolling twelve month historical information, we estimate future demand on a continuous basis.  The historical volatility of such estimates has been minimal.  We maintain provisions for inventory reserves of $42.9 million and $42.5 million as of December 31, 2023 and 2022, respectively.

We utilize cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps.  The production of air conditioning compressors, diesel injectors, and diesel pumps involves the rebuilding of used cores, which we acquire either in outright purchases from used parts brokers, or from returns pursuant to an exchange program with customers. Under such exchange programs, at the time of sale of air conditioning compressors, diesel injectors, and diesel pumps, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In addition, many of our customers can return inventory to us based upon customer warranty and overstock arrangements within customer specific limits.  At the time products are sold, we accrue a liability for product warranties and overstock returns and record as unreturned customer inventory our estimate of anticipated customer returns.  Estimates are based upon historical information on the nature, frequency and probability of the customer return.  Unreturned core, warranty and overstock customer inventory is recorded at standard cost.  Revision to these estimates is made when necessary, based upon changes in these factors.  We regularly study trends of such claims.

Property, Plant and Equipment

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

	Estimated Life
Buildings	25 to 33-1/2 years
Building improvements	10 to 25 years
Machinery and equipment	5 to 12 years
Tools, dies and auxiliary equipment	3 to 8 years
Furniture and fixtures	3 to 12 years

Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease.  Costs related to maintenance and repairs which do not prolong the assets useful lives are expensed as incurred.  We assess our property, plant and equipment to be held and used for impairment when indicators are present that the carrying value may not be recoverable.

Leases

We determine if an arrangement is a lease at inception.  For operating leases, we include and report operating lease right-of-use (“ROU”) assets, sundry payables and accrued expenses, and noncurrent operating lease liabilities on our consolidated balance sheet for leases with a term longer than twelve months.  Finance leases are reported on our consolidated balance sheets in property, plant and equipment, current portion of other debt, and long-term debt.

Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments over the lease term.  Our ROU assets represent the right to use an underlying leased asset over the existing lease term, and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease agreement.  As most of our leases do not provide for an implicit rate, we use our incremental borrowing rate based on the information available when determining the present value of our lease payments.  Our lease terms may include options to terminate, or extend, our lease when it is reasonably certain that we will execute the option.  Lease agreements may contain lease and non-lease components, which are generally accounted for separately.  Operating lease expense is recognized on a straight-line basis over the lease term.

Valuation of Long-Lived and Intangible Assets and Goodwill

At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, patents, developed technology and intellectual property, and non-compete agreements.  Intangible assets acquired through business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date.  Valuing intangible assets requires the use of significant estimates and assumptions.  As related to valuing customer relationships, significant estimates and assumptions used include but are not limited to: (1) forecasted revenues attributable to existing customers; (2) forecasted earnings before interest and taxes (“EBIT”) margins; (3) customer attrition rates; and (4) the discount rate.  Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.  Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment.  Intangible assets determined to have definite lives are amortized over their remaining useful lives.  We believe that the fair value of acquired identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We assess the impairment of long‑lived assets, identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill and identifiable intangible assets having indefinite lives, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount.  Factors we consider important, which could trigger an impairment review, include the following: (a) significant underperformance relative to expected historical or projected future operating results; (b) significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and (c) significant negative industry or economic trends. We review the fair values using the discounted cash flows method and market multiples.

When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required.  If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test.  In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount.  A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology similar with that used to evaluate goodwill.  Intangible assets having definite lives and other long-lived assets are reviewed for impairment whenever events such as product discontinuance, plant closures, product dispositions or other changes in circumstances indicate that the carrying amount may not be recoverable.  In reviewing intangible assets having definite lives and other long-lived assets for impairment, we compare the carrying value of such assets to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. When the estimated undiscounted future cash flows are less than their carrying amount, an impairment loss is recognized equal to the difference between the assets fair value and their carrying value.

There are inherent assumptions and estimates used in developing future cash flows requiring our judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and long‑lived asset impairment including projecting revenues, interest rates, tax rates and the cost of capital.  Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods.  These changes can result in future impairments.  In the event our planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our business, financial condition and results of operations.

Foreign Currency Translation

Assets and liabilities of our foreign operations are translated into U.S. dollars at year-end exchange rates.  Income statement accounts are translated using the average exchange rates prevailing during the year.  The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) and remains there until the underlying foreign operation is liquidated or substantially disposed of.  Foreign currency transaction gains or losses are recorded in the statement of operations under the caption “other non-operating income (expense), net.”

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue Recognition

We derive our revenue primarily from vehicle aftermarket sales in our Vehicle Control and Temperature Control Segments, and non-aftermarket sales in our Engineered Solutions Segment. We recognize revenues when our performance obligation has been satisfied and the control of products has been transferred to a customer which typically occurs upon shipment.  Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of goods or providing services. The amount of consideration we receive and revenue we recognize depends on the marketing incentives, product warranty and overstock returns we offer to our customers.  For certain of our sales of remanufactured products, we also charge our customers a deposit for the return of a used core component which we can use in our future remanufacturing activities.  Such deposit is not recognized as revenue at the time of the sale but rather carried as a core liability.  At the same time, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.  The liability is extinguished when a core is actually returned to us, or at period end when we estimate and recognize revenue for the core deposits not expected to be returned.  We estimate and record provisions for cash discounts, quantity rebates, sales returns and warranties in the period the sale is recorded, based upon our prior experience and current trends.  Significant management judgments and estimates must be made and used in estimating sales returns and allowances relating to revenue recognized in any accounting period.

Product Warranty and Overstock Returns

Many of our products carry a warranty ranging from a 90-day limited warranty to a lifetime limited warranty, which generally covers defects in materials or workmanship and failure to meet industry published specifications and/or the result of installation error.  In addition to warranty returns, we also permit our customers to return new, undamaged products to us within customer-specific limits (which are generally limited to a specified percentage of their annual purchases from us) in the event that they have overstocked their inventories. At the time products are sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature, frequency and average cost of the claim and the probability of the customer return.  At the same time, we record an estimate of anticipated customer returns as unreturned customer inventory.  Significant judgments and estimates must be made and used in connection with establishing the sales returns and other allowances in any accounting period.  Revision to these estimates is made when necessary, based upon changes in these factors.  We regularly study trends of such claims.

New Customer Acquisition Costs

New customer acquisition costs refer to arrangements pursuant to which we incur change-over costs to induce a new customer to switch from a competitor’s brand.  In addition, change-over costs include the costs related to removing the new customer’s inventory and replacing it with our inventory commonly referred to as a stock lift. New customer acquisition costs are recorded as a reduction to revenue when incurred.

Selling, General and Administration Expenses

Selling, general and administration expenses include shipping costs and advertising, which are expensed as incurred.  Shipping and handling charges, as well as freight to customers, are included in distribution expenses as part of selling, general and administration expenses.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Deferred Financing Costs

Deferred financing costs represent costs incurred in conjunction with our debt financing activities.  Deferred financing costs related to our term loan and revolving credit facilities are capitalized and amortized over the life of the related financing arrangement.  If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired and are recorded in the statement of operations under the caption other non-operating income (expense), net.

Accounting for Income Taxes

Income taxes are calculated using the asset and liability method.  Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as measured by the current enacted tax rates.

We maintain valuation allowances when it is more likely than not that all or a portion of a deferred asset will not be realized.  In determining whether a valuation allowance is warranted, we consider all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies to estimate if sufficient future taxable income will be generated to realize the deferred tax asset.  The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable.  In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the level of valuation allowance which could materially impact our business, financial condition and results of operations.

The valuation allowance of $3.8 million as of December 31, 2023 is intended to provide for the uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers.  Based on these considerations, we believe it is more likely than not that we will realize the benefit of the net deferred tax asset of $40.5 million as of December 31, 2023, which is net of the remaining valuation allowance.

Tax benefits are recognized for an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority.  For a tax position that meets the more-likely-than-not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority.  The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available.  Such adjustments are recognized entirely in the period in which they are identified.  During the years ended December 31, 2023, 2022 and 2021, we did not establish a liability for uncertain tax positions.

Environmental Reserves

We are subject to various U.S. Federal and state and local environmental laws and regulations and are involved in certain environmental remediation efforts.  We estimate and accrue our liabilities resulting from such matters based upon a variety of factors including the assessments of environmental engineers and consultants who provide estimates of potential liabilities and remediation costs.  Such estimates are not discounted to reflect the time value of money due to the uncertainty in estimating the timing of the expenditures, which may extend over several years.  Potential recoveries from insurers or other third parties of environmental remediation liabilities are recognized independently from the recorded liability, and any asset related to the recovery will be recognized only when the realization of the claim for recovery is deemed probable.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Asbestos Litigation

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.  Future legal costs are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations.

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, which will reported in earnings (loss) from discontinued operations in the accompanying statement of operations.  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.

Loss Contingencies

We have loss contingencies, for such matters as legal claims and legal proceedings.  Establishing loss reserves for these matters requires estimates, judgment of risk exposure and ultimate liability.  We record provisions when the liability is considered probable and reasonably estimable.  Significant judgment is required for both the determination of probability and the determination as to whether an exposure can be reasonably estimated.  We maintain an ongoing monitoring and identification process to assess how the activities are progressing against the accrued estimated costs.  As additional information becomes available, we reassess our potential liability related to these matters.  Adjustments to the liabilities are recorded in the statement of operations in the period when additional information becomes available.  Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments, accounts receivable and derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings. We place our cash investments with high quality financial institutions and limit the amount of credit exposure to any one institution. Derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings are entered into with high quality financial institutions, with their credit worthiness reviewed on a quarterly basis. Although we are directly affected by developments in the vehicle parts industry, management does not believe significant credit risk exists.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

With respect to accounts receivable, such receivables are primarily from warehouse distributors and major retailers in the automotive aftermarket industry located in the U.S. We perform ongoing credit evaluations of our customers’ financial conditions. A significant portion of our net sales are concentrated from our three largest individual customers. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them, could have a materially adverse impact on our business, financial condition and results of operations.

In January 2023, one of our customers filed a petition for bankruptcy. In connection with the bankruptcy filing, we evaluated our potential risk and exposure as related to our outstanding accounts receivable balance from the customer as of December 31, 2022, and estimated our anticipated recovery. As a result of our evaluation, we recorded a $7 million pre-tax charge during the year ended December 31, 2022 to reduce our accounts receivable balance to our estimated recovery. The $7 million pre-tax charge was included in selling, general and administrative expenses in our consolidated statement of operations. The bankruptcy court proceedings have continued into 2023. Although the courts have named us a “critical supplier,” the funds allocated to us have not yet been determined and, as such, we have not recorded an adjustment to the $7 million pre-tax charge previously recorded.

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

Foreign Cash Balances

Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2023 and 2022 were uninsured. Foreign cash balances at December 31, 2023 and 2022 were $30.5 million and $18.5 million, respectively.

Derivative Instruments and Hedging Activities

We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings.  Derivative financial instruments are recorded at fair value in other current and long-term assets, and other current and long-term liabilities in the consolidated balance sheets.  For derivative financial instruments that have been formally designated as cash flow interest rate hedges (“interest rate swap agreements”), provided that the hedging instrument is highly effective, the entire change in the fair value of the derivative will be deferred and recorded in accumulated other comprehensive income (“AOCI”) in the consolidated balance sheets. When the underlying hedged transaction is realized (i.e., when the interest payments on the underlying borrowing are recognized in the consolidated statements of operations), the gain/loss included in AOCI is recorded in earnings and reflected on the same line as the gain/loss on the hedged item attributable to the hedged risk (i.e., interest expense). At the inception of each transaction, we formally document the hedge relationship, including the identification of the hedge instrument, the related hedged items, the effectiveness of the hedge, as well as its risk management objectives and strategies.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recently Issued Accounting Pronouncements

Standards that are not yet adopted as of December 31, 2023

Standard	Description	Effective date	Effects on the financial statements or other significant matters
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. ASU 2023-07 expands segment disclosures by requiring disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss; (2) the amount and description of the composition of other segment items to reconcile to segment profit and loss; and (3) the CODM’s title and position and how the CODM uses the reported segment measures to allocate resources.  Additionally, ASU 2023-07 requires interim disclosures of all reportable segment profit or loss and assets previously required annually by Topic 280.	The ASU is effective for the fiscal years beginning after December 15, 2023, which for us is December 31, 2024, and all subsequent interim periods, with full retrospective application required to all prior periods presented. Early adoption is permitted.	The new standard will require expanding our segment disclosure to include additional segment level information. We are currently evaluating the full impact of adopting ASU 2023-07 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of December 31, 2024.
ASU 2023-09, Income Taxes (Topic 270): Improvements to Income Tax Disclosures	ASU 2023-09 will improve transparency and decision making usefulness of income tax disclosures. ASU 2023-09 will expand the annual required income effective tax rate reconciliation disclosures to include disclosure of (1) eight specific categories of rate reconciling items; (2) additional information for reconciling items that meet or exceed a quantitative threshold; and (3) expand the required disclosures to include reconciling percentages as well as reported amounts.  Additionally, the ASU 2023-09 will expand required interim and annual disclosures of income taxes paid to include the disaggregation by federal, state and foreign jurisdictions, with expanded disclosures required annually.	The ASU is effective for annual reporting periods beginning after December 15, 2024, which for us is January 1, 2025, with full retrospective application required to all prior periods presented. Early adoption is permitted.	The new standard will require expanding our interim and annual income tax disclosures in our financial statements. We are currently evaluating the full impact of adopting ASU 2023-09 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of March 31, 2025.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.  Business Acquisitions and Investments

2023 Increase in Equity Investment

Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (“Gwo Yng”), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies and switches.  We acquired our 50% interest in the joint venture for approximately $14 million.  In March 2018, we acquired an additional 15% equity interest in the joint venture for RMB 26,475,583 (approximately $4.2 million), thereby increasing our equity interest in the joint venture to 65%.  While we increased our equity interest in the joint venture to 65%, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business.  As a result, we continued to account for our investment in the joint venture under the equity method of accounting.

In July 2023, we acquired an additional 15% equity interest in the joint venture for RMB 27,378,290 (approximately $4 million), thereby increasing our equity interest in Gwo Yng to 80%.  In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng.  As a result, as of the closing date of the transaction, Gwo Yng was accounted for as a business combination achieved in stages (“a step acquisition”).  Accordingly, commencing on the closing of the transaction, we reported the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

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

Total purchase consideration (1)				$	21,725
Assets acquired and liabilities assumed:
Cash and cash equivalents	$	6,779
Receivables		5,912
Inventory		5,945
Other current assets		528
Property, plant and equipment, net		2,924
Operating lease right-of-use assets		4,372
Intangible assets (2)		532
Goodwill		2,208
Long term investments and other assets		7,257
Current liabilities		(6,004	)
Noncurrent operating lease liabilities		(3,455	)
Subtotal					26,998
Fair value of acquired noncontrolling interest					(5,273	)
Total purchase consideration allocated to net assets acquired				$	21,725

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

(2) Intangible assets consists of customer relationships of $0.4 million and capitalized software of $0.1 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible assets of $0.4 million consisting of customer relationships will be amortized on a straight-line basis over the estimated useful life of 10 years.  Goodwill of $2.2 million was allocated to the Temperature Control and Engineered Solutions segments in the amounts of $1.2 million and $1 million, respectively.  The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations.

Revenues from Gwo Yng included in our consolidated statement of operations from the closing date of our 15% equity increase in July 2023 through December 31, 2023 were not material.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 year ended December 31, 2023 were $5 million.

3. 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 and for the years ended December 31, 2023 and 2022, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2021	$	79		$	—		$	79
Restructuring and integration costs:
Amounts provided for during 2022 (1)		1,521			370			1,891
Cash payments		(16	)		(144	)		(160	)
Reclassification of environmental and other liabilities		(63	)		(226	)		(289	)
Exit activity liability at December 31, 2022	$	1,521		$	—		$	1,521
Restructuring and integration costs:
Amounts provided for during 2023 (1) (2)		1,973			669			2,642
Cash payments		(1,803	)		(577	)		(2,380	)
Reclassification of environmental liability		—			(92	)		(92	)
Foreign currency exchange rate changes		38			—			38
Exit activity liability at December 31, 2023	$	1,729		$	—		$	1,729

(1) Included in restructuring and integration costs in 2023 and 2022 is a $0.1 million and $0.2 million increase, respectively, in environmental cleanup costs related to ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.  The environmental liability has been reclassed to accrued liabilities as of December 31, 2023 and 2022, respectively.

(2) Restructuring and integration expenses incurred during the year ended December 31, 2023 consist of $1.3 million in our Vehicle Control segment, $1.1 million in our Temperature Control segment and $0.2 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.

Total restructuring expenses related to the initiative of approximately $2.5 million and $1.5 million were incurred during the years ended December 31, 2023 and 2022, respectively. Expenses for the year ended December 31, 2023 consist of (1) expenses of approximately $0.7 million related to a further sales force reduction, (2) expenses of approximately $1.3 million of employee severance and bonuses related to our product line relocations, and (3) expenses of approximately $0.5 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Expenses for the year ended December 31, 2022 consist of (1) expenses of approximately $0.9 million related to our sales force reduction, and (2) expenses of approximately $0.6 million consisting of employee severance related to our product line relocations.  Cash payments made under the initiative were $2.4 million during the year ended December 31, 2023. Additional restructuring costs related to the initiative, and expected to be incurred, are approximately $0.5 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of the second quarter of 2024.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Plant Rationalization Programs

The 2016 Plant Rationalization Program, which included the shutdown and sale of our Grapevine, Texas facility, and the 2017 Orlando Rationalization Program, which included the shutdown of our Orlando, Florida facility, have been completed.  Cash payments made of $16,000 during the year ended December 31, 2022 consist of severance payments to former employees terminated in connection with these programs. There is no remaining aggregate liability related to these programs as of December 31, 2022.

Integration Costs

Particulate Matter Sensor (“Soot Sensor”) Product Line Relocation

In connection with our acquisitions in March 2021 and November 2021 of certain soot sensor product lines from Stoneridge, Inc., we incurred certain integration expenses in connection with the relocation of certain inventory, machinery, and equipment from Stoneridge’s facilities in Lexington, Ohio and Tallinn, Estonia to our existing facilities in Independence, Kansas and Bialystok, Poland, respectively.  Integration expenses recognized and cash payments made of $144,000 during the year ended December 31, 2022 related to these relocation activities.The soot sensor product line relocation has been completed and there is no remaining aggregate liability related to the soot sensor product line relocation as of December 31, 2022.

4. 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 $830.8 million and $813.7 million of receivables for the years ended December 31, 2023 and 2022, respectively. Receivables presented at financial institutions and not yet collected as of December 31, 2023 were $4.5 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 $46 million, $32 million and $11.5 million related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

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

5. Inventories

	December 31,
	2023		2022
	(In thousands)
Finished goods	$	302,557	$	324,362
Work-in-process		18,503		14,099
Raw materials		186,015		190,254
Subtotal		507,075		528,715
Unreturned customer inventories		18,240		19,695
Total inventories	$	525,315	$	548,410

6. Property, Plant and Equipment

	December 31,
	2023		2022
	(In thousands)
Land, buildings and improvements	$	45,710	$	42,651
Machinery and equipment		177,337		166,149
Tools, dies and auxiliary equipment		73,494		67,017
Furniture and fixtures		33,212		32,084
Leasehold improvements		16,418		15,083
Construction-in-progress		35,357		23,340
Total property, plant and equipment		381,528		346,324
Less accumulated depreciation		259,656		239,176
Total property, plant and equipment, net	$	121,872	$	107,148

Depreciation expense was $19.7 million in 2023, $19 million in 2022 and $18.2 million in 2021.

7. Leases

Quantitative Lease Disclosures

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Balance Sheet Information	December 31,
Assets	2023			2022
Operating lease right-of-use assets	$	100,065		$	49,838
Liabilities
Sundry payables and accrued expenses	$	17,139		$	10,763
Noncurrent operating lease liabilities		88,974			40,709
Total operating lease liabilities	$	106,113		$	51,472
Weighted Average Remaining Lease Term
Operating leases	8.3 Years			7 Years
Weighted Average Discount Rate
Operating leases		4.8	%		3.7	%

	Year Ended, December 31,
Expense and Cash Flow Information	2023		2022
Lease Expense
Operating lease expense (a)	$	16,434	$	11,411
Supplemental Cash Flow Information
Cash Paid for the amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,099	$	11,293
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases (b)	$	66,014	$	31,064

(a) Excludes expenses of approximately $3.3 million, $2.7 million and $2 million for the years ended December 31, 2023, 2022, and 2021, 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) During the year ended December 31, 2023 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; $26.1 million of right-of-use assets related to the new distribution center in Shawnee, Kansas; $4.4 million of right-of-use assets obtained in Gwo Yng step-acquisition; and $3.7 million of right-of-use assets related to our Reynosa, Mexico lease renewal.

Minimum Lease Payments

At December 31, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

2024	$	17,607
2025		16,145
2026		14,814
2027		13,671
2028		11,415
Thereafter		58,059
Total lease payments	$	131,711
Less: Interest		(25,598	)
Present value of lease liabilities	$	106,113

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Goodwill and Other Intangible Assets

Goodwill

We assess the impairment of long‑lived and identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value of a reporting unit is below its carrying amount.

When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required. If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test. In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount. A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

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 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.

We completed our annual impairment test of goodwill as of December 31, 2023. As of December 31, 2023, we performed a qualitative assessment of the likelihood of a goodwill impairment for the Vehicle Control, Temperature Control and Engineered Solutions reporting units. Based upon our qualitative assessment, we determined that it was not more likely than not that the fair value of the each of the Vehicle Control, Temperature Control and Engineered Solutions reporting units was less than their respective carrying amounts. As such, we concluded that the quantitative impairment test would not be required, and that there would be no required goodwill impairment charge as of December 31, 2023 at each of the reporting units. While we concluded that we did not have a goodwill impairment charge as of December 31, 2023, and we do not believe that future impairments are probable, we will need to maintain the current ongoing performance levels at each of the Vehicle Control, Temperature Control and Engineered Solutions reporting units in future periods to sustain their goodwill carrying values.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changes in the carrying values of goodwill by operating segment during the years ended December 31, 2023 and 2022 are as follows (in thousands):

	Vehicle Control			Temperature Control		Engineered Solutions			Total
Balance as of December 31, 2021:
Goodwill	$	129,318		$	10,839	$	29,983		$	170,140
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,830		$	10,839	$	29,983		$	131,652
Activity in 2022
Acquisition of Kade		—			582		184			766
Foreign currency exchange rate change		(310	)		53		(74	)		(331	)
Balance as of December 31, 2022:
Goodwill		129,008			11,474		30,093			170,575
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,520		$	11,474	$	30,093		$	132,087
Activity in 2023
Step acquisition of Gwo Yng		—			1,214		994			2,208
Foreign currency exchange rate change		286			42		106			434
Balance as of December 31, 2023:
Goodwill		129,294			12,730		31,193			173,217
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,806		$	12,730	$	31,193		$	134,729

Acquired Intangible Assets

Acquired identifiable intangible assets as of December 31, 2023 and 2022 consist of:

	December 31,
	2023			2022
	(In thousands)
Customer relationships	$	159,641		$	158,717
Patents, developed technology and intellectual property		14,123			14,123
Trademarks and trade names		8,880			8,880
Non-compete agreements		3,295			3,282
Supply agreements		800			800
Leaseholds		160			160
Total acquired intangible assets		186,899			185,962
Less accumulated amortization (1)		(95,681	)		(86,945	)
Net acquired intangible assets	$	91,218		$	99,017

(3) Applies to all intangible assets, except for a related trademark/trade name totaling $2.6 million, which has an indefinite useful life and, as such, is not being amortized.

Total amortization expense for acquired intangible assets was $8.5 million for the year ended December 31, 2023, $8.6 million for the year ended December 31, 2022, and $8.7 million for the year ended December 31, 2021. Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $8.5 million for 2024, $8.5 million in 2025, $8.5 million in 2026, $8.4 million in 2027 and $54.7 million in the aggregate for the years 2028 through 2041.

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

Other Intangible Assets

Other intangible assets include computer software.  Computer software as of December 31, 2023 and 2022 totaled $19.1 million and $18.7 million, respectively.  Total accumulated computer software amortization as of December 31, 2023 and 2022 was $18 million and $17.2 million, respectively.  Computer software is amortized over its estimated useful life of 3 to 10 years. Amortization expense for computer software was $0.8 million, $0.7 million and $0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Investments in Unconsolidated Affiliates

	December 31,
	2023		2022
	(In thousands)
Foshan FGD SMP Automotive Compressor Co. Ltd	$	18,426	$	16,747
Foshan Che Yijia New Energy Technology Co., Ltd.		3,128		4,098
Orange Electronic Co. Ltd		2,496		2,490
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.		—		18,410
Total	$	24,050	$	41,745

Investment in Foshan FGD SMP Automotive Compressor Co. Ltd.

In November 2017, we formed Foshan FGD SMP Automotive Compressor Co., Ltd., a 50/50 joint venture with Foshan Guangdong Automotive Air Conditioning Co., Ltd. (“FGD”), a China-based manufacturer of automotive belt driven air conditioning compressors. We acquired our 50% interest in the joint venture for approximately $12.5 million.  We determined that due to a lack of a voting majority, and other qualitative factors, we do not control the operations of the joint venture and accordingly, our investment in the joint venture is accounted for under the equity method of accounting.  During the years ended December 31, 2023 and 2022, we made purchases from the joint venture of approximately $44.1 million and $43.5 million, respectively.

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

In August 2019, we acquired an approximate 29% minority interest in Foshan Che Yijia New Energy Technology Co., Ltd. (“CYJ”) for approximately $5.1 million.  CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China.  Our minority interest in CYJ is accounted for using the equity method of accounting.

In December 2021, Standard Motor Products (Hong Kong), Ltd., (“SMP HK”), a subsidiary of Standard Motor Products, Inc., entered into an unsecured loan agreement with CYJ.  Under the terms of the loan agreement, CYJ shall have the right to borrow from SMP HK, as lender, up to an aggregate principal amount of $4 million, with interest calculated on the basis of simple interest of five percent (5%) per annum and a maturity date of November 30, 2023, subject to extension by SMP HK at its sole discretion. In September 2023, the loan agreement was extended through November 30, 2025. Outstanding borrowings under the loan agreement at December 31, 2023 were $4 million.

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%. We will continue to account for our minority interest in CYJ using the equity method of accounting. During the years ended December 31, 2023 and 2022, purchases we made from CYJ were not material.

Investment in Orange Electronic Co. Ltd.

In January 2013, we acquired a minority interest in Orange Electronic Co., Ltd. (“Orange”) for $6.3 million.  Orange is a manufacturer of tire pressure monitoring system sensors and is located in Taiwan.  As of December 31, 2022, our minority interest in Orange of 19.4% is accounted for using the equity method of accounting as we have the ability to exercise significant influence. During the years ended December 31, 2023 and 2022, we made purchases from Orange of approximately $3.2 million and $4.5 million, respectively.

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Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (“Gwo Yng”), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies and switches.  We acquired our 50% interest in the joint venture for approximately $14 million.  In March 2018, we acquired an additional 15% equity interest in the joint venture for RMB 26,475,583 (approximately $4.2 million), thereby increasing our equity interest in the joint venture to 65%.  While we increased our equity interest in the joint venture to 65%, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business.  As a result, we continued to account for our investment in the joint venture under the equity method of accounting.

In July 2023, we acquired an additional 15% equity interest in the joint venture for RMB 27,378,290 (approximately $4 million), thereby increasing our equity interest in Gwo Yng to 80%.  In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng.  As a result, as of the closing date of the transaction, Gwo Yng will be accounted for as a business combination achieved in stages (“a step acquisition”).  Accordingly, commencing on the closing of the transaction, we will report the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

During the year ended December 31, 2023 and through the date of our step acquisition in July 2023, we made purchases from the joint venture of approximately $10.3 million.  Purchases made from the joint  venture approximated $16.2 million during the year ended December 13, 2022.

For additional information related to Gwo Yng, see Note 2, “Business Acquisitions and Investments,” of the notes to our consolidated financial statements.

10. Other Assets

	December 31,
	2023		2022
	(In thousands)
Deferred compensation	$	23,893	$	20,190
Long-term investments		7,468		—
Noncurrent portion of interest rate swap fair value		1,944		3,091
Deferred financing costs, net		1,125		1,603
Other		837		2,626
Total other assets, net	$	35,267	$	27,510

Deferred compensation consists of assets held in a nonqualified defined contribution pension plan as of December 31, 2023 and 2022, respectively.  Long term investments as of December 31, 2023 consist of certificates of deposit with original maturities in excess of twelve months.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Credit Facilities and Long-Term Debt

Total debt outstanding is summarized as follows:

	December 31,
	2023		2022
	(In thousands)
Credit facility – term loan due 2027	$	92,500	$	97,500
Credit facility – revolver due 2027		63,500		142,000
Other		211		120
Total debt	$	156,211	$	239,620
Current maturities of debt	$	5,029	$	55,031
Long-term debt		151,182		184,589
Total debt	$	156,211	$	239,620

Term Loan and Revolving Credit Facilities

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 nine 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Outstanding borrowings at December 31, 2023 under the Credit Agreement were $156 million, consisting of current borrowings of $5 million and long-term debt of $151 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 $2.3 million and $2.4 million at December 31, 2023 and 2022, respectively.

At December 31, 2023, the weighted average interest rate under our Credit Agreement was 5%, which consisted of $156 million in borrowings at 5% 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 year ended December 31, 2023, our average daily alternative base rate loan balance was $0.1 million, compared to 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 November 2023, our Polish subsidiary, SMP Poland sp. z.o.o., further amended its overdraft facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce. The overdraft facility, as amended, provides for borrowings under the facility in Euros and U.S. Dollars.  Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.6 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit (approximately $6.5 million) if borrowings are in Euros and/or U.S. Dollars.  The overdraft facility has a maturity date in March 2024, with automatic three-month renewals until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period.  Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.0% for borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.0% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.25% for borrowings in U.S Dollars.  Borrowings under the overdraft facility are guaranteed by Standard Motor Products, Inc., the ultimate parent company.  There were no borrowings outstanding under the overdraft facility at both December 31, 2023 and December 31, 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Maturities of Debt

As of December 31, 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
2024	$	—	$	5,000		$	29		$	5,029
2025		—		5,000			31			5,031
2026		—		7,500			49			7,549
2027		63,500		75,000			102			138,602
Total	$	63,500	$	92,500		$	211		$	156,211
Less: current maturities		—		(5,000	)		(29	)		(5,029	)
Long-term debt	$	63,500	$	87,500		$	182		$	151,182

Deferred Financing Costs

We have deferred financing costs of approximately $1.6 million and $2.1 million as of December 31, 2023 and 2022, respectively.  Deferred financing costs are related to our term loan and revolving credit facilities.  Deferred financing costs as of December 31, 2023, assuming no prepayments, are being amortized in the amounts of $0.5 million in 2024, $0.5 million in 2025, $0.5 million in 2026 and $0.1 million in 2027.

12.  Accumulated Other Comprehensive Income

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

	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at December 31, 2021 attributable to SMP	$	(8,221	)	$	52		$	—			$	(8,169	)
Other comprehensive income before reclassifications		(8,109	)		—			3,797		(1)		(4,312	)
Amounts reclassified from accumulated other comprehensive income		—			(15	)		26				11
Other comprehensive income, net		(8,109	)		(15	)		3,823				(4,301	)
Balance at December 31, 2022 attributable to SMP	$	(16,330	)	$	37		$	3,823			$	(12,470	)
Other comprehensive income before reclassifications		7,433			—			831		(1)		8,264
Amounts reclassified from accumulated other comprehensive income		—			(13	)		(1,755	)			(1,768	)
Other comprehensive income, net		7,433			(13	)		(924	)			6,496
Balance at December 31, 2023 attributable to SMP	$	(8,897	)	$	24		$	2,899			$	(5,974	)

(1) Consists of the unrecognized loss relating to the change in fair value of the cash flow interest rate hedge of $1.2 million ($0.9 million, net of tax) plus cash settlement receipts of $2.4 million ($1.7 million, net of tax) in the year ended December 31, 2023; and the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $5.2 million ($3.8 million, net of tax) minus cash settlement payments of $42,000 ($31,000, net of tax) in the year December 31, 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reclassifications Out of Accumulated Other Comprehensive Income (in thousands):

	Year Ended December 31,
Details About Accumulated Other Comprehensive Income Components	2023			2022
Derivative cash flow hedge:
Unrecognized gain (loss) (1)	$	(2,372	)	$	35
Postretirement Benefit Plans:
Unrecognized gain (loss) (2)		(22	)		(25	)
Total before income tax		(2,394	)		10
Income tax expense (benefit)		(626	)		(1	)
Total reclassifications attributable to SMP	$	(1,768	)	$	11

(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 (expense), net in our consolidated statements of operations (see Note 15, “Employee Benefits,” for additional information).

13. Stockholders’ Equity

We have authority to issue 500,000 shares of preferred stock, $20 par value, and our Board of Directors is vested with the authority to establish and designate any series of preferred, to fix the number of shares therein and the variations in relative rights as between each series. In December 1995, our Board of Directors established a new series of preferred shares designated as Series A Participating Preferred Stock. The number of shares constituting the Series A Preferred Stock is 30,000. The Series A Preferred Stock is designed to participate in dividends, ranks senior to our common stock as to dividends and liquidation rights and has voting rights. Each share of the Series A Preferred Stock shall entitle the holder to one thousand votes on all matters submitted to a vote of the stockholders of the Company. No such shares were outstanding at December 31, 2023 and 2022.

In March 2020, our Board of Directors authorized the purchase of up to $20 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 were  150,273 shares of our common stock at a total cost of $6.5 million thereby completing the 2020 Board of Directors authorization.

In February 2021, our Board of Directors authorized the purchase of up to an additional $20 million of our common stock under a stock repurchase program. Stock repurchases under this program during the year ended December 31, 2021 were 464,992 shares of our common stock at a total cost of $20 million, thereby completing the February 2021 Board of Directors authorization.

In October 2021, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 and 2022 were 7,000 and 692,067 shares of our common stock, respectively, at a total cost of $0.3 million and $29.7 million, respectively, thereby completing the October 2021 Board of Directors authorization.

In July 2022, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a new stock repurchase program. Stock will be purchased under the program from time to time, in the open market or through private transactions, as market conditions warrant. To date, there have been no repurchases of our common stock under the program.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Stock-Based Compensation Plans

Our stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders.  In addition, members of our Board of Directors participate in our stock-based compensation program in connection with their service on our board.

In May 2021, our Board of Directors and Shareholders approved an amendment and restatement to the 2016 Omnibus Incentive Plan (the “Plan”).  Under the Plan, which terminates in May 2026, we are authorized to issue, among other things, shares of restricted and performance-based stock to eligible employees and restricted stock to directors of up to 2,050,000 shares; and shares of restricted and performance-based stock to nonemployee directors of up to 350,000 shares.  Shares issued under the Plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the Plan.  The 2016 Omnibus Incentive Plan is the only remaining plan available to provide stock-based incentive compensation to our employees, directors and other eligible persons.  Awards previously granted under the 2006 Omnibus Incentive Plan remain outstanding, while shares not yet granted under the plan are not available for future issuance.

We account for our stock-based compensation plans in accordance with the provisions of FASB ASC 718, Stock Compensation, which requires that a company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.  The service period is the period of time that the grantee must provide services to us before the stock-based compensation is fully vested.  The grant-date fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in our consolidated statements of operations.  Forfeitures are estimated at the time of grant based on historical trends in order to estimate the amount of share-based awards that will ultimately vest.  We monitor actual forfeitures for any subsequent adjustment to forfeiture rates.

Restricted Stock and Performance Share Grants

We currently grant shares of restricted stock to eligible employees and our independent directors and performance-based stock to eligible employees.  We grant eligible employees two types of restricted stock (standard restricted shares and long-term retention restricted shares).  Standard restricted shares granted to employees become fully vested no earlier than three years after the date of grant.  Long-term retention restricted shares granted to selected executives vest at a 25% rate on or within approximately two months of an executive reaching the ages of 60 and 63, and become fully vested on or within approximately two months of an executive reaching the age of 65.  Restricted shares granted to directors become fully vested upon the first anniversary of the date of grant.

Performance-based shares issued to eligible employees are subject to a three-year measuring period and the achievement of performance targets and, depending upon the achievement of such performance targets, they may become vested 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 upon our evaluation of historical and expected future turnover.

Prior to the time a restricted share becomes fully vested or a performance share is issued, the awardees cannot transfer, pledge, hypothecate or encumber such shares.  Prior to the time a restricted share is fully vested, the awardees have all other rights of a stockholder, including the right to vote (but do not receive dividends during the vesting period).  Prior to the time a performance share is issued, the awardees shall have no rights as a stockholder.  All shares and rights are subject to forfeiture if certain employment conditions are not met.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Under the amended and restated 2016 Omnibus Incentive Plan, 2,050,000 shares are authorized to be issued.  At December 31, 2023, under the plan, there were an aggregate of (a) 1,633,549 shares of restricted and performance-based stock grants issued, net of forfeitures, and (b) 416,451 shares of common stock available for future grants.  For the year ended December 31, 2023, 230,875 restricted and performance-based shares were granted (165,125 restricted shares and 65,750 performance-based shares).

In determining the grant date fair value, the stock price on the date of grant, as quoted on the New York Stock Exchange, was reduced by the present value of dividends expected to be paid on the shares issued and outstanding during the requisite service period, discounted at a risk-free interest rate.  The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the restriction or vesting period at the grant date. In addition, a further discount for the lack of marketability reduced the fair value of grants issued to certain key executives and directors subject to the one or two year post vesting holding period.  Assumptions used in calculating the discount for the lack of marketability include an estimate of stock volatility, risk-free interest rate, and a dividend yield.

As related to restricted and performance stock shares, we recorded compensation expense of $6.2 million ($4.8 million, net of tax), $7.6 million ($5.7 million, net of tax) and $9.1 million ($6.9 million, net of tax), for the years ended December 31, 2023, 2022 and 2021, respectively.  The unamortized compensation expense related to our restricted and performance-based shares was $13.3 million and $14.9 million at December 31, 2023 and 2022, respectively and is expected to be recognized over a weighted average period of 4.1 years and 0.3 years for employees and directors, respectively, as of December 31, 2023 and  over a weighted average period of 4.3 years and 0.3 years for employees and directors, respectively, as of December 31, 2022.

Our restricted and performance-based share activity was as follows for the years ended December 31, 2023 and 2022:

	Shares			Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2021		807,019		$	34.92
Granted		246,325			28.44
Vested		(190,082	)		41.71
Performance Shares Target Adjustment		25,317			42.21
Forfeited		(7,750	)		40.73
Balance at December 31, 2022		880,829		$	31.79
Granted		230,875			27.00
Vested		(248,065	)		36.30
Performance Shares Target Adjustment		29,137			36.30
Forfeited		(11,800	)		35.36
Balance at December 31, 2023		880,976		$	29.48

The weighted-average grant date fair value of restricted and performance-based shares outstanding as of December 31, 2023, 2022 and 2021 was $26 million (or $29.48 per share), $28 million (or $31.79 per share), and $28.2 million (or $34.92 per share), respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Employee Benefits

Defined Contribution Plans

We maintain various defined contribution plans, which include profit sharing, and provide retirement benefits for substantially all of our employees. Matching obligations, in connection with the plans which are funded in cash and typically contributed to the plans in March of the following year, are as follows (in thousands):

	U.S. Defined Contribution
Year ended December 31,
2023	$	10,510
2022		10,180
2021		9,763

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 and 2022, contributions of $0.8 million were made related to calendar years 2022 and 2021, respectively. As of December 31, 2023, we have recorded an obligation of $0.6 million for 2023.

We also have an Employee Stock Ownership Plan and Trust (“ESOP”) for employees who are not covered by a collective bargaining agreement.  In connection therewith, we maintain an employee benefits trust to which we contribute shares of treasury stock.  We are authorized to instruct the trustees to distribute such shares toward the satisfaction of our future obligations under the plan. The shares held in trust are not considered outstanding for purposes of calculating earnings per share until they are committed to be released. The trustees will vote the shares in accordance with its fiduciary duties.  During 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 December 31, 2023.  The provision for expense in connection with the ESOP was approximately $3 million in 2023, $2.3 million in 2022 and $2.5 million in 2021.

Defined Benefit Pension Plan

We maintain a defined benefit unfunded Supplemental Executive Retirement Plan (“SERP”).  The SERP, as amended, is a defined benefit plan pursuant to which we will pay supplemental pension benefits to certain key employees upon the attainment of a contractual participant’s payment date based upon the employees’ years of service and compensation.  As there are no current participants in the SERP, there was no benefit obligation outstanding related to the plan as of December 31, 2023 and 2022 and we recorded no expense related to the plan during the years ended December 31, 2023, 2022 and 2021.

Postretirement Medical Benefits

We provide certain medical and dental care benefits to 14 former U.S. union employees. The postretirement medical and dental benefit obligation for the former union employees as of December 31, 2023, and the net periodic benefit cost for our postretirement benefit plans for the years ended December 31, 2023, 2022 and 2021 were not material.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Other Non-Operating Income (Expense), Net

The components of other non-operating income (expense), net are as follows:

	Year Ended December 31,
	2023			2022		2021
	(In thousands)
Interest and dividend income	$	517		$	209	$	49
Equity income from joint ventures		2,070			3,464		3,295
Gain (loss) on foreign exchange		(776	)		334		(257	)
Other non-operating income, net		515			807		407
Total other non-operating income, net	$	2,326		$	4,814	$	3,494

17. 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 1.25% at December 31, 2023.

The fair value of the interest rate swap agreement as of December 31, 2023 and December 31, 2022 was an asset of $3.9 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 perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term.

18. 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

		December 31, 2023				December 31, 2022
	Fair Value Hierarchy	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Cash and cash equivalents (a)	LEVEL 1/2	$	32,526	$	32,526	$	21,150	$	21,150
Deferred compensation	LEVEL 1		23,893		23,893		20,190		20,190
Short term borrowings	LEVEL 1		5,029		5,029		55,031		55,031
Long-term debt	LEVEL 1		151,182		151,182		184,589		184,589
Cash flow interest rate swap	LEVEL 2		3,939		3,939		5,174		5,174
Long-term investments	LEVEL 2		7,468		7,468		—		—

(a) As of December 31, 2023 cash and cash equivalents consist of cash of $29.5 million and cash equivalents of $3 million, which are classified as Level 1 and Level 2, respectively, under the fair value hierarchy.  Cash and cash equivalents at December 31, 2022 consists solely of cash of $21.2 million, which is classified as Level 1 under the fair value hierarchy.

Cash equivalents consist of certificates of deposit with original maturities of 3 months, or less. These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2023.  The fair value of the underlying assets held by the deferred compensation plan are based on the quoted market prices of the underlying funds which are held by registered investment companies. The carrying value of our variable rate short-term borrowings and long-term debt under our credit facilities approximates fair value as the variable interest rates in the facilities reflect current market rates. The fair value of our cash flow interest rate swap agreement is obtained from an independent third party, is based upon market quotes, and represents the net amount required to terminate the interest rate swap, taking into consideration market rates and counterparty credit risk.  Long-term investments consist of certificates of deposit with original maturities in excess of twelve months. These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2023.

19. Income Taxes

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

	Year Ended December 31,
	2023			2022			2021
Current:
Domestic	$	15,422		$	16,182		$	26,528
Foreign		9,224			8,669			5,851
Total current		24,646			24,851			32,379
Deferred:
Domestic		(5,769	)		1,102			(1,161	)
Foreign		(509	)		(747	)		(174	)
Total deferred		(6,278	)		355			(1,335	)
Total income tax provision	$	18,368		$	25,206		$	31,044

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reconciliations between taxes at the U.S. Federal income tax rate and taxes at our effective income tax rate on earnings from continuing operations before income taxes are as follows (in thousands):

	Year Ended December 31,
	2023			2022			2021
U.S. Federal income tax rate of 21%	$	17,160		$	20,650		$	27,398
Increase (decrease) in tax rate resulting from:
State and local income taxes, net of federal income tax benefit		2,086			3,118			4,579
Change in valuation allowance		674			1,068			466
Income tax (benefit) attributable to foreign income		377			(53	)		(122	)
Other non-deductible items, net		(1,929	)		423			(1,277	)
Provision for income taxes	$	18,368		$	25,206		$	31,044

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

	December 31,
	2023			2022
Deferred tax assets:
Inventories	$	10,493		$	11,604
Allowance for customer returns		13,083			14,506
Accrued asbestos liabilities		20,758			17,208
Accrued salaries and benefits		11,816			12,048
Tax credit and NOL carryforwards		5,968			5,103
Allowance for expected credit losses		3,567			2,965
Other		17			215
		65,702			63,649
Valuation allowance		(3,830	)		(3,155	)
Total deferred tax assets		61,872			60,494
Deferred tax liabilities:
Intangible assets acquired, net of amortization		12,668			13,292
Depreciation		7,597			8,715
Interest rate swap agreement		990			1,299
Other		84			3,530
Total deferred tax liabilities		21,339			26,836
Net deferred tax assets	$	40,533		$	33,658

In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some portion or the entire deferred tax asset will be realized.  Ultimately, the realization of the deferred tax asset is dependent upon the generation of sufficient taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized.  We consider the level of historical taxable income, scheduled reversal of temporary differences, carryback and carryforward periods, tax planning strategies and projected future taxable income in determining whether a valuation allowance is warranted.  We also consider cumulative losses in recent years as well as the impact of one-time events in assessing our pre-tax earnings. Assumptions regarding future taxable income require significant judgment. Our assumptions are consistent with estimates and plans used to manage our business.

The valuation allowance of $3.8 million as of December 31, 2023 is intended to provide for uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers. Based on these considerations, we believe it is more likely than not that we would realize the benefit of the net deferred tax asset of $40.5 million as of December 31, 2023, which is net of the remaining valuation allowance. At December 31, 2023, we have foreign tax credit carryforwards of approximately $3.8 million that will expire in varying amounts by 2032.

As related to the taxation of our foreign subsidiaries, we aggregate our foreign earnings and profits, and utilize allowable deductions and available foreign tax credits in computing our U.S. tax. Notwithstanding the U.S. taxation of these amounts, we intend to continue to invest most, or all, of these earnings indefinitely outside of the U.S., and do not expect to incur any significant additional taxes related to such amounts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In accordance with generally accepted accounting practices, we recognize in our financial statements only those tax positions that meet the more-likely-than-not recognition threshold.  We establish tax reserves for uncertain tax positions that do not meet this threshold.  During the years ended December 31, 2023, 2022 and 2021, we did not establish a liability for uncertain tax positions.

We are subject to taxation in the U.S. and various state, local and foreign jurisdictions.  As of December 31, 2023, the Company is no longer subject to U.S. Federal tax examinations for years before 2020.  We remain subject to examination by state and local tax authorities for tax years 2019 through 2022.  Foreign jurisdictions have statutes of limitations generally ranging from 2 to 6 years.  Years still open to examination by foreign tax authorities in major jurisdictions include Canada (2019 onward), Hong Kong (2018 onward), China (2021 onward), Mexico (2019 onward), Poland (2018 onward), Hungary (2018 onward), U.K. (2017 onward) and Germany (2019 onward).  We do not presently anticipate that our unrecognized tax benefits will significantly increase or decrease over the next 12 months; however, actual developments in this area could differ from those currently expected.

20. Earnings Per Share

We present two calculations of earnings per common share.  “Basic” earnings per common share equals net earnings attributable to SMP divided by weighted average common shares outstanding during the period. “Diluted” earnings per common share equals net earnings attributable to SMP divided by the sum of weighted average common shares outstanding during the period plus potentially dilutive common shares.  Potentially dilutive common shares that are anti-dilutive are excluded from 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):

	Year Ended December 31,
	2023			2022			2021
Net Earnings Attributable to SMP -
Earnings from continuing operations	$	63,144		$	73,042		$	99,353
Loss from discontinued operations		(28,996	)		(17,691	)		(8,467	)
Net earnings attributable to SMP	$	34,148		$	55,351		$	90,886
Basic Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	2.91		$	3.37		$	4.49
Loss from discontinued operations per common share		(1.34	)		(0.82	)		(0.39	)
Net earnings per common share attributable to SMP	$	1.57		$	2.55		$	4.10
Weighted average common shares outstanding		21,716			21,684			22,147
	2023			2022			2021
Diluted Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	2.85		$	3.30		$	4.39
Loss from discontinued operations per common share		(1.31	)		(0.80	)		(0.37	)
Net earnings per common share attributable to SMP	$	1.54		$	2.50		$	4.02
Weighted average common shares outstanding		21,716			21,684			22,147
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock and performance-based stock		445			456			469
Weighted average common shares outstanding – Diluted		22,161			22,140			22,616

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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):

	2023		2022		2021
Restricted and performance shares		280		292		269

21. Industry Segment and Geographic Data

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

Vehicle Control is the new name for our Engine Management operating segment.  It includes our core automotive 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 automotive aftermarket operating segment, after the carve out of all non-aftermarket business to our Engineered Solutions operating segment. Temperature Control 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 more complex air conditioning systems that will provide passenger comfort regardless of the vehicle’s powertrain.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1). 

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

	Year Ended December 31,
	2023			2022			2021
Net sales (a):
Vehicle Control	$	737,932		$	750,571		$	737,431
Temperature Control		337,754			351,237			324,080
Engineered Solutions		282,586			270,007			237,305
Other		—			—			—
Total net sales	$	1,358,272		$	1,371,815		$	1,298,816
Depreciation and Amortization:
Vehicle Control	$	13,877		$	14,075		$	14,840
Temperature Control		3,424			2,973			3,345
Engineered Solutions		9,966			9,557			7,390
Other		1,755			1,693			1,668
Total depreciation and amortization	$	29,022		$	28,298		$	27,243
Operating income (loss):
Vehicle Control	$	71,327		$	74,153		$	97,029
Temperature Control		17,343			26,459			30,077
Engineered Solutions		19,944			18,713			19,982
Other		(15,937	)		(15,190	)		(18,089	)
Total operating income	$	92,677		$	104,135		$	128,999
Investment in unconsolidated affiliates:
Vehicle Control	$	2,496		$	2,490		$	2,729
Temperature Control		19,711			27,557			28,518
Engineered Solutions		1,843			11,698			12,840
Other		—			—			—
Total investment in unconsolidated affiliates	$	24,050		$	41,745		$	44,087
Capital expenditures:
Vehicle Control	$	13,955		$	13,378		$	17,048
Temperature Control		1,899			3,973			2,130
Engineered Solutions		12,095			6,489			5,354
Other		684			2,116			1,343
Total capital expenditures	$	28,633		$	25,956		$	25,875
Total assets:
Vehicle Control	$	620,569		$	618,789		$	604,016
Temperature Control		274,657			254,137			234,771
Engineered Solutions		292,080			289,518			272,791
Other		105,741			92,485			86,383
Total assets	$	1,293,047		$	1,254,929		$	1,197,961

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reconciliation of segment operating income to net earnings:

	Year Ended December 31,
	2023			2022			2021
	(In thousands)
Operating income	$	92,677		$	104,135		$	128,999
Other non-operating income, net		2,326			4,814			3,494
Interest expense		13,287			10,617			2,028
Earnings from continuing operations before income taxes		81,716			98,332			130,465
Provision for income taxes		18,368			25,206			31,044
Earnings from continuing operations		63,348			73,126			99,421
Discontinued operations, net of tax		(28,996	)		(17,691	)		(8,467	)
Net earnings	$	34,352		$	55,435		$	90,954

	December 31,
	2023		2022		2021
Long-lived assets (a):	(In thousands)
United States	$	368,792	$	326,199	$	315,983
Asia		75,869		76,766		80,175
Europe		44,517		38,351		37,892
Mexico		13,262		10,355		12,119
Canada		5,851		7,161		4,461
Total long-lived assets	$	508,291	$	458,832	$	450,630

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

Our three largest individual customers accounted for approximately 59% of our consolidated net sales in 2023. During 2023, O’Reilly Auto Parts, AutoZone and NAPA accounted for 29%, 16% and 14% of our consolidated net sales, respectively. Net sales from each of the customers were reported in our Vehicle Control and Temperature Control Segments. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them could have a material adverse impact on our business, financial condition and results of operations. In addition, any consolidation among our key customers may further increase our customer concentration risk.

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

22. 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.

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STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes consolidated net sales by major product group within each operating segment for the years ended December 31, 2023, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2023		2022		2021
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	450,180	$	454,571	$	444,196
Electrical and Safety		221,782		230,487		224,520
Wire Sets and Other		65,970		65,513		68,715
Total Vehicle Control		737,932		750,571		737,431
Temperature Control
AC System Components		237,756		245,484		231,466
Other Thermal Components		99,998		105,753		92,614
Total Temperature Control		337,754		351,237		324,080
Engineered Solutions
Commercial Vehicle		83,025		80,275		76,066
Construction/Agriculture		43,402		42,385		33,220
Light Vehicle		92,759		91,533		86,440
All Other		63,400		55,814		41,579
Total Engineered Solutions		282,586		270,007		237,305
Other		—		—		—
Total	$	1,358,272	$	1,371,815	$	1,298,816

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 years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	659,570	$	319,904	$	168,878	$	—	$	1,148,352
Canada		36,088		17,081		25,689		—		78,858
Europe		916		8		59,266		—		60,190
Mexico		36,350		49		6,658		—		43,057
Asia		351		526		19,522		—		20,399
Other foreign		4,657		186		2,573		—		7,416
Total	$	737,932	$	337,754	$	282,586	$	—	$	1,358,272

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	682,145	$	335,281	$	191,678	$	—	$	1,209,104
Canada		35,233		14,596		16,762		—		66,591
Europe		661		75		37,784		—		38,520
Mexico		26,019		401		4,897		—		31,317
Asia		2,408		63		16,715		—		19,186
Other foreign		4,105		821		2,171		—		7,097
Total	$	750,571	$	351,237	$	270,007	$	—	$	1,371,815

Year Ended December 31, 2021	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	677,684	$	309,247	$	147,447	$	—	$	1,134,378
Canada		35,063		13,585		13,912		—		62,560
Europe		771		153		26,759		—		27,683
Mexico		19,741		358		5,547		—		25,646
Asia		144		101		40,771		—		41,016
Other foreign		4,028		636		2,869		—		7,533
Total	$	737,431	$	324,080	$	237,305	$	—	$	1,298,816

23. Commitments and Contingencies

Total rent expense for the three years ended December 31, 2023 was as follows (in thousands):

	Total (1)		Real Estate		Other
2023	$	19,706	$	15,735	$	3,971
2022		14,135		11,385		2,750
2021		12,065		9,500		2,565

(1) Includes expenses of approximately $3.3 million, $2.7 million, and $2 million for the years ended December 31, 2023, 2022 and 2021, 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.

For our operating lease minimal rental payments that we are obligated to make, see Note 7, “Leases.”

Warranties

We generally warrant our products against certain manufacturing and other defects. These product warranties are provided for specific periods of time depending on the nature of the product. As of December 31, 2023 and 2022, we have accrued $21.1 million and $19.7 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. Warranty expense for each of the years 2023, 2022, and 2021 were $120 million, $112.5 million and $91.9 million, respectively.

The following table provides the changes in our product warranties:

	December 31,
	2023			2022
	(In thousands)
Balance, beginning of period	$	19,667		$	17,463
Liabilities accrued for current year sales		120,027			112,477
Settlements of warranty claims		(118,560	)		(110,273	)
Balance, end of period	$	21,134		$	19,667

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Letters of Credit

As of December 31, 2023 and 2022, we had outstanding letters of credit with certain vendors aggregating approximately $2.3 million and $2.4 million, respectively. These letters of credit are being maintained as security for reimbursements to insurance companies and as security to the landlord of our administrative offices in Long Island City, New York. The contract amount of the letters of credit is a reasonable estimate of their value as the value for each is fixed over the life of the commitment.

Change of Control Arrangements

We have a change in control arrangement with one key officer. In the event of a change of control (as defined in the agreement), the executive will receive severance payments and certain other benefits as provided in his agreement.

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 December 31, 2023, approximately 1,390 cases were outstanding for which we may be responsible for any related liabilities. Since inception in September 2001 through December 31, 2023, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $74.6 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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, 2023. The results of the August 31, 2023 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $84 million to $135.3 million for the period through 2065. The change from the prior year study, which was as of August 31, 2022, was a $15.2 million increase for the low end of the range and a $23.7 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, 2023 actuarial study, in September 2023 we increased our asbestos liability to $84 million, the low end of the range, and recorded an incremental pre-tax provision of $23.8 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, 2023 study, to range from $53.1 million to $105.2 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 $11 million, $12 million and $8.8 million for the years ended December 31, 2023, 2022 and 2021, 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. In May 2023, we were found liable for approximately $11 million and, as such, in the second quarter of 2023 we recorded a pre-tax provision of such amount in earnings (loss) from discontinued operations in the accompanying statement of operations. However, in August 2023, we reached a final settlement of the legal proceeding, in which we reduced our liability to $10.5 million. In connection therewith, we reduced the pre-tax provision to $10.5 million and recorded a $0.5 million credit in earnings (loss) from discontinued operations in the accompanying statement of operations. Payment of such claim was made in early October 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.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. 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. This evaluation also included consideration of our internal controls and procedures for the preparation of our financial statements as required under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).  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) Management’s Report on Internal Control Over Financial Reporting.

Pursuant to Section 404 of the Sarbanes-Oxley Act, as part of this Report we have furnished a report regarding our internal control over financial reporting as of December 31, 2023. The report is under the caption “Management’s Report on Internal Control Over Financial Reporting” in “Item 8. Financial Statements and Supplementary Data,” which report in included herein.

(c) Attestation Report of Independent Registered Public Accounting Firm.

KPMG LLP, our independent registered public accounting firm, has issued an opinion as to the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. The opinion is under the caption “Report of Independent Registered Public Accounting Firm−Internal Control Over Financial Reporting” in “Item 8. Financial Statements and Supplementary Data” for this attestation report, which is included herein.

(d) Changes in Internal Control Over Financial Reporting.

During the quarter ended December 31, 2023 and subsequent to that date, we have not made changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our 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.

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ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated herein by reference to the information in our Definitive Proxy Statement to be filed with the SEC in connection with our 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”) set forth under the captions “Proposal No. 1 - Election of Directors,”  “Management Information,” and “Corporate Governance.”

The Board of Directors of the Company has adopted a Code of Ethics that applies to all employees, officers and directors of the Company.  The Company’s Code of Ethics is available at ir.smpcorp.com under “Governance Documents.”  The Company intends to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Company’s Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by disclosing such information on the Company’s website, at the address specified above.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under captions “Corporate Governance,” “Compensation Discussion & Analysis,” “Executive Compensation and Related Information” and “Report of the Compensation and Management Development Committee.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under the captions “Executive Compensation and Related Information” and “Security Ownership of Certain Beneficial Owners and Management.”

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under the captions “Corporate Governance” and “Executive Compensation and Related Information.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company’s independent registered public accounting firm is KMPG LLP, New York, New York (PCAOB ID 185).  All other information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under the captions “Audit and Non-Audit Fees.”

91

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	(1)	The Index to Consolidated Financial Statements of the Registrant under Item 8 of this Report is incorporated herein by reference as the list of Financial Statements required as part of this Report.
	(2)	The following financial schedule and related report for the years 2023, 2022 and 2021 is submitted herewith:
		Schedule II - Valuation and Qualifying Accounts
		All other schedules are omitted because they are not required, not applicable or the information is included in the financial statements or notes thereto.
	(3)	Exhibits.
		The exhibit list in the Exhibit Index is incorporated by reference as the list of exhibits required as part of this Report.

ITEM 16. FORM 10-K SUMMARY

None.

92

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

EXHIBIT INDEX

Exhibit Number
3.1	Restated By-Laws, dated as of December 15, 2022 (incorporated by reference to the Company’s Current Report on Form 8-K filed as of December 21, 2022).
3.2	Restated Certificate of Incorporation, filed as of August 1, 1990 (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017).
3.3	Certificate of Amendment of the Certificate of Incorporation, filed as of February 27, 1996 (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017).
10.1	Amended and Restated Employee Stock Ownership Plan and Trust of Standard Motor Products, Inc., dated as of December 21, 2018 (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021).
10.2	2006 Omnibus Incentive Plan of Standard Motor Products, Inc., as amended (incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-174330), filed as of May 19, 2011).
10.3	Supplemental Compensation Plan, effective as of October 1, 2001 (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001).
10.4	Severance Compensation Agreement, dated as of December 12, 2001, between Standard Motor Products, Inc. and James Burke (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001).
10.5	Amendment to the Standard Motor Products, Inc. Supplemental Compensation Plan, effective as of December 1, 2006 (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006).
10.6	Amendment to Severance Compensation Agreement, dated as of December 15, 2008, between Standard Motor Products, Inc. and James Burke (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009).
10.7	Amended and Restated Supplemental Executive Retirement Plan, dated as of December 31, 2010 (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010).
10.8	Amendment to Severance Compensation Agreement, dated as of March 8, 2011, between Standard Motor Products, Inc. and James Burke (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010).
10.9	Credit Agreement, dated as of October 28, 2015, among Standard Motor Products, Inc., as borrower and the other loan parties thereto, and JPMorgan Chase Bank, N.A., as agent and lender, J.P. Morgan Securities LLC, as sole bookrunner and joint lead arranger, Bank of America, N.A. and Wells Fargo Bank, National Association, as co-syndication agents and joint lead arrangers, and the other lenders thereto (incorporated by reference to the Company’s Current Report on Form 8-K filed as of October 30, 2015).

93

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

EXHIBIT INDEX

Exhibit Number
10.10	Standard Motor Products, Inc. Amended and Restated 2016 Omnibus Incentive Plan and forms of related award agreements (incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-256362) filed as of May 21, 2021).
10.11	First Amendment to Credit Agreement, dated as of December 10, 2018, among Standard Motor Products, Inc. and SMP Motor Products Ltd., as borrowers, JPMorgan Chase Bank, N.A., as agent and lender, and the other lenders thereto (incorporated by reference to the Company’s Current Report on Form 8-K filed as of December 13, 2018).
10.12	Second Amendment to Credit Agreement, dated as of March 4, 2022, among Standard Motor Products, Inc., SMP Motor Products Ltd. and Trumpet Holdings, Inc., as borrowers, JPMorgan Chase Bank, N.A., as agent and lender, and the other lenders thereto (incorporated by reference to the Company’s Current Report on Form 8-K filed as of March 10, 2022).
10.13	Credit Agreement, dated as of June 1, 2022, among Standard Motor Products, Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents, J.P. Morgan Securities LLC, as Sustainability Structuring Agent, JPMorgan Chase Bank, N.A., as Sole Bookrunner, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and Wells Fargo Securities, LLC, as Joint Lead Arrangers, and the lenders named therein (incorporated by reference to the Company’s Current Report on Form 8-K filed as of June 2, 2022).
21	List of Subsidiaries of Standard Motor Products, Inc.
23	Consent of KPMG LLP, Independent Registered Public Accounting Firm.
24	Power of Attorney (see signature page to Annual Report on Form 10-K).
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.
97	Standard Motor Products, Inc. Clawback Policy, dated as of October 3, 2023.

94

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

EXHIBIT INDEX

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.”

95

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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)
	/s/ Eric P. Sills
	Eric P. Sills
	Chief Executive Officer and President
	/s/ Nathan R. Iles
	Nathan R. Iles
	Chief Financial Officer
New York, New York
February 22, 2024

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Eric P. Sills and Nathan R. Iles, jointly and severally, as his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

February 22, 2024	/s/  Eric P. Sills
		Eric P. Sills
		Chief Executive Officer and President
		(Principal Executive Officer)
February 22, 2024	/s/  Nathan R. Iles
		Nathan R. Iles
		Chief Financial Officer
		(Principal Financial and Accounting Officer)
February 22, 2024	/s/  James J. Burke
		James J. Burke
		Chief Operating Officer and Director
February 22, 2024	/s/  Alejandro C. Capparelli
		Alejandro C. Capparelli, Director
February 22, 2024	/s/  Pamela Forbes Lieberman
		Pamela Forbes Lieberman, Director

96

February 22, 2024	/s/  Patrick S. McClymont
		Patrick S. McClymont, Director
February 22, 2024	/s/  Joseph W. McDonnell
		Joseph W. McDonnell, Director
February 22, 2024	/s/  Alisa C. Norris
		Alisa C. Norris, Director
February 22, 2024	/s/  Pamela S. Puryear, Ph.D.
		Pamela S. Puryear, Director

97

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

Schedule II ‑ Valuation and Qualifying Accounts

Years ended December 31, 2023, 2022 and 2021

			Additions
Description	Balance at beginning of year		Charged to costs and expenses			Other		Deductions		Balance at end of year
Year ended December 31, 2023:
Allowance for expected credit losses	$	4,129,000	$	2,940,000		$	—	$	185,000	$	6,884,000
Allowance for discounts		1,246,000		12,449,000			—		12,534,000		1,161,000
	$	5,375,000	$	15,389,000		$	—	$	12,719,000	$	8,045,000
Allowance for sales returns	$	37,169,000	$	162,525,000		$	—	$	161,456,000	$	38,238,000
Year ended December 31, 2022:
Allowance for expected credit losses	$	4,815,000	$	6,242,000	(1)	$	—	$	6,928,000	$	4,129,000
Allowance for discounts		1,355,000		13,456,000			—		13,565,000		1,246,000
	$	6,170,000	$	19,698,000		$	—	$	20,493,000	$	5,375,000
Allowance for sales returns	$	42,412,000	$	152,985,000		$	—	$	158,228,000	$	37,169,000
Year ended December 31, 2021:
Allowance for expected credit losses	$	4,406,000	$	450,000		$	—	$	41,000	$	4,815,000
Allowance for discounts		1,416,000		13,827,000			—		13,888,000		1,355,000
	$	5,822,000	$	14,277,000		$	—	$	13,929,000	$	6,170,000
Allowance for sales returns	$	40,982,000	$	129,964,000		$	—	$	128,534,000	$	42,412,000

(1) Includes a $7 million charge relating to one of our customers that filed a petition for bankruptcy in January 2023.

98

EX-21

EXHIBIT 21

SUBSIDIARIES OF STANDARD MOTOR PRODUCTS, INC.

Name	State or Country of Incorporation
Foshan GWOYNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.	China
KADE Trading GmbH	Germany
SMP Automotive de Mexico, S.A. de C.V.	Mexico
SMP Engine Management de Mexico, S. de R.L. de C.V.	Mexico
SMP Four Seasons de Mexico, S. de R.L. de C.V.	Mexico
SMP Motor Products Limited	Canada
SMP Poland sp. z o.o.	Poland
STABIL ELEKTROTECHNIK GmbH	Germany
STABIL PRODUKT Elektrotechnikai Kft.	Hungary
STABIL VERBINDUNGSTECHNIK GmbH	Germany
Standard Motor Products de Mexico, S. de R.L. de C.V.	Mexico
Standard Motor Products (Hong Kong) Limited	Hong Kong
Trumpet Holdings, Inc.	Delaware
Trombetta Asia, Ltd.	Hong Kong
Trombetta Electric (Shanghai) Co., Ltd.	China
Trombetta Electric (Wuxi) Co., Ltd.	China
Trombetta S. de R.L. de C.V.	Mexico

The names of particular subsidiaries have been omitted where, considered in the aggregate as a single subsidiary, they would not constitute, as of the end of the year covered by this report, a “significant subsidiary” as that term is defined in Regulation S-X under the Securities Exchange Act of 1934.

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (No. 333-256362, No. 333-211461, No. 333-174330, and No. 333-134239) on Form S-8 of our reports dated February 22, 2024, with respect to the consolidated financial statements and financial statement Schedule II, Valuation and Qualifying Accounts of Standard Motor Products, Inc. and Subsidiaries and the effectiveness of internal control over financial reporting.

/s/ KPMG LLP

New York, New York

February 22, 2024

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 annual report on Form 10-K 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: February 22, 2024
	/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 annual report on Form 10-K 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: February 22, 2024
	/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 Annual Report of Standard Motor Products, Inc. (the “Company”) on Form 10-K for the period ended December 31, 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

February 22, 2024

*          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 Annual Report of Standard Motor Products, Inc. (the “Company”) on Form 10-K for the period ended December 31, 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

February 22, 2024

*          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-97

Exhibit 97

STANDARD MOTOR PRODUCTS, INC.

CLAWBACK POLICY

(Amended as of October 3, 2023)

The Board of Directors (the “Board”) of Standard Motor Products, Inc. (the “Company”) has adopted this policy, which provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”).

Policy

In the event the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirements under the securities laws, the Compensation and Management Development Committee (“Committee”) of the Board, on behalf of the Company, shall recover from all current and former executive officers, any incentive-based compensation that would not otherwise have been received by such persons based on the restated results during the three (3) fiscal years preceding the date the Company is required to prepare the restatement. The Committee shall also be entitled to recover any compensation (which has not already been recovered under this Policy) received by the Chief Executive Officer and Chief Financial Officer that is required to be recovered by Section 304 of the Sarbanes-Oxley Act of 2002.

The Committee will determine, in its sole discretion, the manner in which it seeks to recover any incentive-based compensation under this Policy.

Scope

For purposes of this Policy, (a) executive officers shall be deemed to be those officers who are subject to Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”), and (b) incentive-based compensation shall be any compensation that is granted, earned or vested based wholly or in part on the attainment of a financial reporting measure. Financial reporting measures include the stock price and total shareholder return of the Company, and any measure determined and presented in accordance with the accounting principles used in preparing the financial statements of the Company, and any measures derived wholly or in part from such measures.

Administration

The Committee is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the New York Stock Exchange.

In addition, the Committee shall require each executive officer of the Company to comply with, and agree to the terms and conditions of this Policy as a condition to appointment and continuation in service as an executive officer of the Company.

Indemnification

The Company shall not indemnify any executive officers against the loss of any incentive-based compensation recovered hereunder.

Impracticability

The Committee shall recover any incentive-based compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Committee in accordance with Rule 10D-1 of the Exchange Act and the listing standards of the New York Stock Exchange.

Amendment

The Committee may amend this Policy from time to time in its discretion.

 

2

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2023	Feb. 20, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
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 Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 737,570,524
Entity Common Stock, Shares Outstanding		21,918,729
Auditor Name	KPMG LLP
Auditor Location	New York, New York
Auditor Firm ID	185

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2023		Dec. 31, 2022		Dec. 31, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	[1]	$ 1,358,272		$ 1,371,815		$ 1,298,816
Cost of sales		969,446		989,276		921,885
Gross profit		388,826		382,539		376,931
Selling, general and administrative expenses		293,583		276,626		247,547
Restructuring and integration expenses		2,642	[2],[3]	1,891	[2]	392
Other income, net		76		113		7
Operating income		92,677		104,135		128,999
Other non-operating income, net		2,326		4,814		3,494
Interest expense		13,287		10,617		2,028
Earnings from continuing operations before taxes		81,716		98,332		130,465
Provision for income taxes		18,368		25,206		31,044
Earnings from continuing operations		63,348		73,126		99,421
Loss from discontinued operations, net of income tax benefit of $10,188, $6,216 and $2,975		(28,996)		(17,691)		(8,467)
Net earnings		34,352		55,435		90,954
Net earnings attributable to noncontrolling interest		204		84		68
Net earnings attributable to SMP	[4]	34,148		55,351		90,886
Net earnings attributable to SMP
Earnings from continuing operations		63,144		73,042		99,353
Discontinued operations		(28,996)		(17,691)		(8,467)
Net earnings attributable to SMP	[4]	$ 34,148		$ 55,351		$ 90,886
Net earnings per common share - Basic:
Earnings from continuing operations (in dollars per share)		$ 2.91		$ 3.37		$ 4.49
Discontinued operations (in dollars per share)		(1.34)		(0.82)		(0.39)
Net earnings per common share - Basic (in dollars per share)		1.57		2.55		4.1
Net earnings per common share - Diluted:
Earnings from continuing operations (in dollars per share)		2.85		3.3		4.39
Discontinued operations (in dollars per share)		(1.31)		(0.8)		(0.37)
Net earnings per common share - Diluted (in dollars per share)		1.54		2.5		4.02
Dividend declared per share (in dollars per share)		$ 1.16		$ 1.08		$ 1
Average number of common shares (in shares)		21,716,177		21,683,719		22,147,479
Average number of common shares and dilutive common shares (in shares)		22,161,341		22,139,981		22,616,456

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

[2] Included in restructuring and integration costs in 2023 and 2022 is a $0.1 million and $0.2 million increase, respectively, in environmental cleanup costs related to ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.  The environmental liability has been reclassed to accrued liabilities as of December 31, 2023 and 2022, respectively.

[3] Restructuring and integration expenses incurred during the year ended December 31, 2023 consist of $1.3 million in our Vehicle Control segment, $1.1 million in our Temperature Control segment and $0.2 million in our Engineered Solutions segment.

[4] Throughout this Form 10-K, “SMP” refers to Standard Motor Products, Inc. and subsidiaries.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Income tax benefit	$ 10,188	$ 6,216	$ 2,975

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net earnings	$ 34,352	$ 55,435	$ 90,954
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	7,447	(8,222)	(2,462)
Derivative instruments	(924)	3,823	0
Pension and postretirement plans	(13)	(15)	(16)
Total other comprehensive income (loss), net of tax	6,510	(4,414)	(2,478)
Total comprehensive income	40,862	51,021	88,476
Comprehensive income (loss) attributable to noncontrolling interest, net of tax:
Net earnings	204	84	68
Foreign currency translation adjustments	14	(113)	15
Comprehensive income (loss) attributable to noncontrolling interest, net of tax	218	(29)	83
Comprehensive income attributable to SMP	$ 40,644	$ 51,050	$ 88,393

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 32,526	$ 21,150
Accounts receivable, less allowances for discounts and expected credit losses of $8,045 and $5,375 in 2023 and 2022, respectively	160,282	167,638
Inventories	507,075	528,715
Unreturned customer inventories	18,240	19,695
Prepaid expenses and other current assets	26,100	25,241
Total current assets	744,223	762,439
Property, plant and equipment, net	121,872	107,148
Operating lease right-of-use assets	100,065	49,838
Goodwill	134,729	132,087
Other intangibles, net	92,308	100,504
Deferred incomes taxes	40,533	33,658
Investments in unconsolidated affiliates	24,050	41,745
Other assets	35,267	27,510
Total assets	1,293,047	1,254,929
CURRENT LIABILITIES:
Current portion of revolving credit facility	0	50,000
Current portion of term loan and other debt	5,029	5,031
Accounts payable	107,455	89,247
Sundry payables and accrued expenses	63,303	49,990
Accrued customer returns	38,238	37,169
Accrued core liability	18,399	22,952
Accrued rebates	42,278	37,381
Payroll and commissions	29,561	31,361
Total current liabilities	304,263	323,131
Long-term debt	151,182	184,589
Noncurrent operating lease liabilities	88,974	40,709
Other accrued liabilities	25,742	22,157
Accrued asbestos liabilities	72,013	63,305
Total liabilities	642,174	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	101,751	105,615
Retained earnings	573,226	564,242
Accumulated other comprehensive income	(5,974)	(12,470)
Treasury stock - at cost (2,018,982 shares and 2,350,377 shares in 2023 and 2022, respectively)	(81,811)	(95,239)
Total SMP stockholders' equity	635,064	610,020
Noncontrolling Interest	15,809	11,018
Total Stockholders' Equity	650,873	621,038
Total liabilities and stockholders' equity	$ 1,293,047	$ 1,254,929

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
CURRENT ASSETS:
Accounts receivable, allowances for discounts and expected credit losses	$ 8,045	$ 5,375
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)	2,018,982	2,350,377

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 34,352	$ 55,435	$ 90,954
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	29,022	28,298	27,243
Amortization of deferred financing cost	491	421	228
Increase (decrease) to allowance for expected credit losses	2,943	(757)	451
Increase (decrease) to inventory reserves	3,068	6,035	(585)
Customer bankruptcy charge	0	7,002	0
Equity income from joint ventures	(2,070)	(3,464)	(3,295)
Employee Stock Ownership Plan allocation	2,966	2,296	2,513
Stock-based compensation	6,598	8,178	9,479
(Increase) in deferred income taxes	(6,952)	(713)	(1,801)
Increase in tax valuation allowance	674	1,068	466
Loss on discontinued operations, net of tax	28,996	17,691	8,467
Change in assets and liabilities:
Decrease in accounts receivable	7,965	6,916	28,464
(Increase) decrease in inventories	29,494	(67,495)	(107,609)
(Increase) in prepaid expenses and other current assets	(70)	(5,509)	(843)
Increase (decrease) in accounts payable	19,645	(48,604)	33,046
Increase (decrease) in sundry payables and accrued expenses	(4,284)	(29,089)	13,430
Net changes in other assets and liabilities	(8,578)	(5,242)	(15,044)
Net cash provided by (used in) operating activities	144,260	(27,533)	85,564
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of and investment in businesses	(3,954)	(1,934)	(125,419)
Cash acquired in step acquisition	6,779	0	0
Capital expenditures	(28,633)	(25,956)	(25,875)
Other investing activities	108	73	45
Net cash used in investing activities	(25,700)	(27,817)	(151,249)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the term loan	0	100,000	0
Repayments of term loan	(5,000)	(2,500)	0
Net borrowings (repayments) under revolving credit facilities	(78,500)	16,702	115,298
Net borrowings (repayments) of other debt and lease obligations	(58)	(2,895)	3,048
Purchase of treasury stock	0	(29,656)	(26,862)
Payments of debt issuance costs	0	(2,128)	0
Increase (decrease) in overdraft balances	(189)	(595)	247
Dividends paid	(25,164)	(23,428)	(22,179)
Dividends paid to noncontrolling interest	(700)	0	(540)
Net cash provided by (used in) financing activities	(109,611)	55,500	69,012
Effect of exchange rate changes on cash	2,427	(755)	(1,060)
Net increase (decrease) in cash and cash equivalents	11,376	(605)	2,267
CASH AND CASH EQUIVALENTS at beginning of year	21,150	21,755	19,488
CASH AND CASH EQUIVALENTS at end of year	32,526	21,150	21,755
Cash paid during the year for:
Interest	14,597	9,892	1,721
Income taxes	$ 16,019	$ 25,015	$ 26,323

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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, 2020	$ 47,872	$ 105,084	$ 463,612	$ (5,676)	$ (60,656)	$ 550,236	$ 0	$ 550,236
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Noncontrolling interest in business step acquisition	0	0	0	0	0	0	11,504	11,504
Net earnings	0	0	90,886	0	0	90,886	68	90,954
Other comprehensive loss, net of tax	0	0	0	(2,493)	0	(2,493)	15	(2,478)
Cash dividends paid	0	0	(22,179)	0	0	(22,179)	0	(22,179)
Purchase of treasury stock	0	0	0	0	(26,862)	(26,862)	0	(26,862)
Dividends paid to noncontrolling interest	0	0	0	0	0	0	(540)	(540)
Stock-based compensation	0	159	0	0	9,320	9,479	0	9,479
Employee Stock Ownership Plan	0	134	0	0	2,379	2,513	0	2,513
Balance at end 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	55,351	0	0	55,351	84	55,435
Other comprehensive loss, net of tax	0	0	0	(4,301)	0	(4,301)	(113)	(4,414)
Cash dividends paid	0	0	(23,428)	0	0	(23,428)	0	(23,428)
Purchase of treasury stock	0	0	0	0	(29,656)	(29,656)	0	(29,656)
Stock-based compensation	0	(131)	0	0	8,309	8,178	0	8,178
Employee Stock Ownership Plan	0	369	0	0	1,927	2,296	0	2,296
Balance at end 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]
Noncontrolling interest in business step acquisition	0	0	0	0	0	0	5,273	5,273
Net earnings	0	0	34,148	0	0	34,148	204	34,352
Other comprehensive loss, net of tax	0	0	0	6,496	0	6,496	14	6,510
Cash dividends paid	0	0	(25,164)	0	0	(25,164)	0	(25,164)
Dividends paid to noncontrolling interest	0	0	0	0	0	0	(700)	(700)
Stock-based compensation	0	(3,880)	0	0	10,478	6,598	0	6,598
Employee Stock Ownership Plan	0	16	0	0	2,950	2,966	0	2,966
Balance at end of period at Dec. 31, 2023	$ 47,872	$ 101,751	$ 573,226	$ (5,974)	$ (81,811)	$ 635,064	$ 15,809	$ 650,873

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY [Abstract]
Cash dividends paid (in dollars per share)	$ 1.16	$ 1.08	$ 1

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

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 a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets.  Our automotive aftermarket is comprised of two segments, Vehicle Control and Temperature Control, while our Engineered Solutions segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.  We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin American countries.

The 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.

Use of Estimates

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 caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.  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.

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 – Vehicle Control, Temperature Control and Engineered Solutions. The new operating segment structure better aligns our operations with our strategic focus on diversifying our business, provides greater transparency into our positioning to capture opportunities for growth in the future, and provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment.  Prior period segment results have been reclassified to conform to our operating segment reorganization.  For additional information related to our segment reorganization, see Note 8, “Goodwill and Acquired Intangible Assets,” Note 21, “Industry Segment and Geographic Data” and Note 22, “Net Sales.”

Cash and Cash Equivalents

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

Allowance for Expected Credit Losses and Cash Discounts

We do not generally require collateral for our trade accounts receivable. Accounts receivable have been reduced by an allowance for amounts that may become uncollectible in the future. These allowances are established based on a combination of write-off history, supportable forecasts, aging analysis, and specific account evaluations. When a receivable balance is known to be uncollectible, it is written off against the allowance for expected credit losses. Cash discounts are provided based on an overall average experience rate applied to qualifying accounts receivable balances.

Inventories

Inventories are valued at the lower of cost and net realizable value.  Cost is determined on the first-in first-out basis.  Where appropriate, standard cost systems are utilized for purposes of determining cost; the standards are adjusted as necessary to ensure they approximate actual costs.  Estimates of lower of cost and net realizable value of inventory are determined by comparing the actual cost of the product to the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation of the inventory.

We also evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand.  For inventory deemed to be obsolete, we provide a reserve on the full value of the inventory.  Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates our estimate of future demand.  Future projected demand requires management judgment and is based upon (a) our review of historical trends and (b) our estimate of projected customer specific buying patterns and trends in the industry and markets in which we do business.  Using rolling twelve month historical information, we estimate future demand on a continuous basis.  The historical volatility of such estimates has been minimal.  We maintain provisions for inventory reserves of $42.9 million and $42.5 million as of December 31, 2023 and 2022, respectively.

We utilize cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps.  The production of air conditioning compressors, diesel injectors, and diesel pumps involves the rebuilding of used cores, which we acquire either in outright purchases from used parts brokers, or from returns pursuant to an exchange program with customers. Under such exchange programs, at the time of sale of air conditioning compressors, diesel injectors, and diesel pumps, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.

In addition, many of our customers can return inventory to us based upon customer warranty and overstock arrangements within customer specific limits.  At the time products are sold, we accrue a liability for product warranties and overstock returns and record as unreturned customer inventory our estimate of anticipated customer returns.  Estimates are based upon historical information on the nature, frequency and probability of the customer return.  Unreturned core, warranty and overstock customer inventory is recorded at standard cost.  Revision to these estimates is made when necessary, based upon changes in these factors.  We regularly study trends of such claims.

Property, Plant and Equipment

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

	Estimated Life
Buildings	25 to 33-1/2 years
Building improvements	10 to 25 years
Machinery and equipment	5 to 12 years
Tools, dies and auxiliary equipment	3 to 8 years
Furniture and fixtures	3 to 12 years

Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease.  Costs related to maintenance and repairs which do not prolong the assets useful lives are expensed as incurred.  We assess our property, plant and equipment to be held and used for impairment when indicators are present that the carrying value may not be recoverable.

Leases

We determine if an arrangement is a lease at inception.  For operating leases, we include and report operating lease right-of-use (“ROU”) assets, sundry payables and accrued expenses, and noncurrent operating lease liabilities on our consolidated balance sheet for leases with a term longer than twelve months.  Finance leases are reported on our consolidated balance sheets in property, plant and equipment, current portion of other debt, and long-term debt.

Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments over the lease term.  Our ROU assets represent the right to use an underlying leased asset over the existing lease term, and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease agreement.  As most of our leases do not provide for an implicit rate, we use our incremental borrowing rate based on the information available when determining the present value of our lease payments.  Our lease terms may include options to terminate, or extend, our lease when it is reasonably certain that we will execute the option.  Lease agreements may contain lease and non-lease components, which are generally accounted for separately.  Operating lease expense is recognized on a straight-line basis over the lease term.

Valuation of Long-Lived and Intangible Assets and Goodwill

At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, patents, developed technology and intellectual property, and non-compete agreements.  Intangible assets acquired through business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date.  Valuing intangible assets requires the use of significant estimates and assumptions.  As related to valuing customer relationships, significant estimates and assumptions used include but are not limited to: (1) forecasted revenues attributable to existing customers; (2) forecasted earnings before interest and taxes (“EBIT”) margins; (3) customer attrition rates; and (4) the discount rate.  Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.  Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment.  Intangible assets determined to have definite lives are amortized over their remaining useful lives.  We believe that the fair value of acquired identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

We assess the impairment of long‑lived assets, identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill and identifiable intangible assets having indefinite lives, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount.  Factors we consider important, which could trigger an impairment review, include the following: (a) significant underperformance relative to expected historical or projected future operating results; (b) significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and (c) significant negative industry or economic trends. We review the fair values using the discounted cash flows method and market multiples.

When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required.  If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test.  In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount.  A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology similar with that used to evaluate goodwill.  Intangible assets having definite lives and other long-lived assets are reviewed for impairment whenever events such as product discontinuance, plant closures, product dispositions or other changes in circumstances indicate that the carrying amount may not be recoverable.  In reviewing intangible assets having definite lives and other long-lived assets for impairment, we compare the carrying value of such assets to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. When the estimated undiscounted future cash flows are less than their carrying amount, an impairment loss is recognized equal to the difference between the assets fair value and their carrying value.

There are inherent assumptions and estimates used in developing future cash flows requiring our judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and long‑lived asset impairment including projecting revenues, interest rates, tax rates and the cost of capital.  Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods.  These changes can result in future impairments.  In the event our planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our business, financial condition and results of operations.

Foreign Currency Translation

Assets and liabilities of our foreign operations are translated into U.S. dollars at year-end exchange rates.  Income statement accounts are translated using the average exchange rates prevailing during the year.  The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) and remains there until the underlying foreign operation is liquidated or substantially disposed of.  Foreign currency transaction gains or losses are recorded in the statement of operations under the caption “other non-operating income (expense), net.”

Revenue Recognition

We derive our revenue primarily from vehicle aftermarket sales in our Vehicle Control and Temperature Control Segments, and non-aftermarket sales in our Engineered Solutions Segment. We recognize revenues when our performance obligation has been satisfied and the control of products has been transferred to a customer which typically occurs upon shipment.  Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of goods or providing services. The amount of consideration we receive and revenue we recognize depends on the marketing incentives, product warranty and overstock returns we offer to our customers.  For certain of our sales of remanufactured products, we also charge our customers a deposit for the return of a used core component which we can use in our future remanufacturing activities.  Such deposit is not recognized as revenue at the time of the sale but rather carried as a core liability.  At the same time, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.  The liability is extinguished when a core is actually returned to us, or at period end when we estimate and recognize revenue for the core deposits not expected to be returned.  We estimate and record provisions for cash discounts, quantity rebates, sales returns and warranties in the period the sale is recorded, based upon our prior experience and current trends.  Significant management judgments and estimates must be made and used in estimating sales returns and allowances relating to revenue recognized in any accounting period.

Product Warranty and Overstock Returns

Many of our products carry a warranty ranging from a 90-day limited warranty to a lifetime limited warranty, which generally covers defects in materials or workmanship and failure to meet industry published specifications and/or the result of installation error.  In addition to warranty returns, we also permit our customers to return new, undamaged products to us within customer-specific limits (which are generally limited to a specified percentage of their annual purchases from us) in the event that they have overstocked their inventories. At the time products are sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature, frequency and average cost of the claim and the probability of the customer return.  At the same time, we record an estimate of anticipated customer returns as unreturned customer inventory.  Significant judgments and estimates must be made and used in connection with establishing the sales returns and other allowances in any accounting period.  Revision to these estimates is made when necessary, based upon changes in these factors.  We regularly study trends of such claims.

New Customer Acquisition Costs

New customer acquisition costs refer to arrangements pursuant to which we incur change-over costs to induce a new customer to switch from a competitor’s brand.  In addition, change-over costs include the costs related to removing the new customer’s inventory and replacing it with our inventory commonly referred to as a stock lift. New customer acquisition costs are recorded as a reduction to revenue when incurred.

Selling, General and Administration Expenses

Selling, general and administration expenses include shipping costs and advertising, which are expensed as incurred.  Shipping and handling charges, as well as freight to customers, are included in distribution expenses as part of selling, general and administration expenses.

Deferred Financing Costs

Deferred financing costs represent costs incurred in conjunction with our debt financing activities.  Deferred financing costs related to our term loan and revolving credit facilities are capitalized and amortized over the life of the related financing arrangement.  If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired and are recorded in the statement of operations under the caption other non-operating income (expense), net.

Accounting for Income Taxes

Income taxes are calculated using the asset and liability method.  Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as measured by the current enacted tax rates.

We maintain valuation allowances when it is more likely than not that all or a portion of a deferred asset will not be realized.  In determining whether a valuation allowance is warranted, we consider all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies to estimate if sufficient future taxable income will be generated to realize the deferred tax asset.  The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable.  In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the level of valuation allowance which could materially impact our business, financial condition and results of operations.

The valuation allowance of $3.8 million as of December 31, 2023 is intended to provide for the uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers.  Based on these considerations, we believe it is more likely than not that we will realize the benefit of the net deferred tax asset of $40.5 million as of December 31, 2023, which is net of the remaining valuation allowance.

Tax benefits are recognized for an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority.  For a tax position that meets the more-likely-than-not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority.  The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available.  Such adjustments are recognized entirely in the period in which they are identified.  During the years ended December 31, 2023, 2022 and 2021, we did not establish a liability for uncertain tax positions.

Environmental Reserves

We are subject to various U.S. Federal and state and local environmental laws and regulations and are involved in certain environmental remediation efforts.  We estimate and accrue our liabilities resulting from such matters based upon a variety of factors including the assessments of environmental engineers and consultants who provide estimates of potential liabilities and remediation costs.  Such estimates are not discounted to reflect the time value of money due to the uncertainty in estimating the timing of the expenditures, which may extend over several years.  Potential recoveries from insurers or other third parties of environmental remediation liabilities are recognized independently from the recorded liability, and any asset related to the recovery will be recognized only when the realization of the claim for recovery is deemed probable.

Asbestos Litigation

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.  Future legal costs are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations.

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, which will reported in earnings (loss) from discontinued operations in the accompanying statement of operations.  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.

Loss Contingencies

We have loss contingencies, for such matters as legal claims and legal proceedings.  Establishing loss reserves for these matters requires estimates, judgment of risk exposure and ultimate liability.  We record provisions when the liability is considered probable and reasonably estimable.  Significant judgment is required for both the determination of probability and the determination as to whether an exposure can be reasonably estimated.  We maintain an ongoing monitoring and identification process to assess how the activities are progressing against the accrued estimated costs.  As additional information becomes available, we reassess our potential liability related to these matters.  Adjustments to the liabilities are recorded in the statement of operations in the period when additional information becomes available.  Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments, accounts receivable and derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings. We place our cash investments with high quality financial institutions and limit the amount of credit exposure to any one institution. Derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings are entered into with high quality financial institutions, with their credit worthiness reviewed on a quarterly basis. Although we are directly affected by developments in the vehicle parts industry, management does not believe significant credit risk exists.

With respect to accounts receivable, such receivables are primarily from warehouse distributors and major retailers in the automotive aftermarket industry located in the U.S. We perform ongoing credit evaluations of our customers’ financial conditions. A significant portion of our net sales are concentrated from our three largest individual customers. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them, could have a materially adverse impact on our business, financial condition and results of operations.

In January 2023, one of our customers filed a petition for bankruptcy. In connection with the bankruptcy filing, we evaluated our potential risk and exposure as related to our outstanding accounts receivable balance from the customer as of December 31, 2022, and estimated our anticipated recovery. As a result of our evaluation, we recorded a $7 million pre-tax charge during the year ended December 31, 2022 to reduce our accounts receivable balance to our estimated recovery. The $7 million pre-tax charge was included in selling, general and administrative expenses in our consolidated statement of operations. The bankruptcy court proceedings have continued into 2023. Although the courts have named us a “critical supplier,” the funds allocated to us have not yet been determined and, as such, we have not recorded an adjustment to the $7 million pre-tax charge previously recorded.

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

Foreign Cash Balances

Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2023 and 2022 were uninsured. Foreign cash balances at December 31, 2023 and 2022 were $30.5 million and $18.5 million, respectively.

Derivative Instruments and Hedging Activities

We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings.  Derivative financial instruments are recorded at fair value in other current and long-term assets, and other current and long-term liabilities in the consolidated balance sheets.  For derivative financial instruments that have been formally designated as cash flow interest rate hedges (“interest rate swap agreements”), provided that the hedging instrument is highly effective, the entire change in the fair value of the derivative will be deferred and recorded in accumulated other comprehensive income (“AOCI”) in the consolidated balance sheets. When the underlying hedged transaction is realized (i.e., when the interest payments on the underlying borrowing are recognized in the consolidated statements of operations), the gain/loss included in AOCI is recorded in earnings and reflected on the same line as the gain/loss on the hedged item attributable to the hedged risk (i.e., interest expense). At the inception of each transaction, we formally document the hedge relationship, including the identification of the hedge instrument, the related hedged items, the effectiveness of the hedge, as well as its risk management objectives and strategies.

Recently Issued Accounting Pronouncements

Standards that are not yet adopted as of December 31, 2023

Standard	Description	Effective date	Effects on the financial statements or other significant matters
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. ASU 2023-07 expands segment disclosures by requiring disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss; (2) the amount and description of the composition of other segment items to reconcile to segment profit and loss; and (3) the CODM’s title and position and how the CODM uses the reported segment measures to allocate resources.  Additionally, ASU 2023-07 requires interim disclosures of all reportable segment profit or loss and assets previously required annually by Topic 280.	The ASU is effective for the fiscal years beginning after December 15, 2023, which for us is December 31, 2024, and all subsequent interim periods, with full retrospective application required to all prior periods presented. Early adoption is permitted.	The new standard will require expanding our segment disclosure to include additional segment level information. We are currently evaluating the full impact of adopting ASU 2023-07 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of December 31, 2024.
ASU 2023-09, Income Taxes (Topic 270): Improvements to Income Tax Disclosures	ASU 2023-09 will improve transparency and decision making usefulness of income tax disclosures. ASU 2023-09 will expand the annual required income effective tax rate reconciliation disclosures to include disclosure of (1) eight specific categories of rate reconciling items; (2) additional information for reconciling items that meet or exceed a quantitative threshold; and (3) expand the required disclosures to include reconciling percentages as well as reported amounts.  Additionally, the ASU 2023-09 will expand required interim and annual disclosures of income taxes paid to include the disaggregation by federal, state and foreign jurisdictions, with expanded disclosures required annually.	The ASU is effective for annual reporting periods beginning after December 15, 2024, which for us is January 1, 2025, with full retrospective application required to all prior periods presented. Early adoption is permitted.	The new standard will require expanding our interim and annual income tax disclosures in our financial statements. We are currently evaluating the full impact of adopting ASU 2023-09 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of March 31, 2025.

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

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Business Acquisitions and Investments

12 Months Ended

Dec. 31, 2023

Business Acquisitions and Investments [Abstract]

Business Acquisitions and Investments

2.  Business Acquisitions and Investments

2023 Increase in Equity Investment

Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (“Gwo Yng”), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies and switches.  We acquired our 50% interest in the joint venture for approximately $14 million.  In March 2018, we acquired an additional 15% equity interest in the joint venture for RMB 26,475,583 (approximately $4.2 million), thereby increasing our equity interest in the joint venture to 65%.  While we increased our equity interest in the joint venture to 65%, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business.  As a result, we continued to account for our investment in the joint venture under the equity method of accounting.

In July 2023, we acquired an additional 15% equity interest in the joint venture for RMB 27,378,290 (approximately $4 million), thereby increasing our equity interest in Gwo Yng to 80%.  In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng.  As a result, as of the closing date of the transaction, Gwo Yng was accounted for as a business combination achieved in stages (“a step acquisition”).  Accordingly, commencing on the closing of the transaction, we reported the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

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

Total purchase consideration (1)				$	21,725
Assets acquired and liabilities assumed:
Cash and cash equivalents	$	6,779
Receivables		5,912
Inventory		5,945
Other current assets		528
Property, plant and equipment, net		2,924
Operating lease right-of-use assets		4,372
Intangible assets (2)		532
Goodwill		2,208
Long term investments and other assets		7,257
Current liabilities		(6,004	)
Noncurrent operating lease liabilities		(3,455	)
Subtotal					26,998
Fair value of acquired noncontrolling interest					(5,273	)
Total purchase consideration allocated to net assets acquired				$	21,725

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

(2) Intangible assets consists of customer relationships of $0.4 million and capitalized software of $0.1 million.

Intangible assets of $0.4 million consisting of customer relationships will be amortized on a straight-line basis over the estimated useful life of 10 years.  Goodwill of $2.2 million was allocated to the Temperature Control and Engineered Solutions segments in the amounts of $1.2 million and $1 million, respectively.  The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations.

Revenues from Gwo Yng included in our consolidated statement of operations from the closing date of our 15% equity increase in July 2023 through December 31, 2023 were not material.

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 year ended December 31, 2023 were $5 million.

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Restructuring and Integration Expenses

12 Months Ended

Dec. 31, 2023

Restructuring and Integration Expenses [Abstract]

Restructuring and Integration Expenses

3. 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 and for the years ended December 31, 2023 and 2022, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2021	$	79		$	—		$	79
Restructuring and integration costs:
Amounts provided for during 2022 (1)		1,521			370			1,891
Cash payments		(16	)		(144	)		(160	)
Reclassification of environmental and other liabilities		(63	)		(226	)		(289	)
Exit activity liability at December 31, 2022	$	1,521		$	—		$	1,521
Restructuring and integration costs:
Amounts provided for during 2023 (1) (2)		1,973			669			2,642
Cash payments		(1,803	)		(577	)		(2,380	)
Reclassification of environmental liability		—			(92	)		(92	)
Foreign currency exchange rate changes		38			—			38
Exit activity liability at December 31, 2023	$	1,729		$	—		$	1,729

(1) Included in restructuring and integration costs in 2023 and 2022 is a $0.1 million and $0.2 million increase, respectively, in environmental cleanup costs related to ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.  The environmental liability has been reclassed to accrued liabilities as of December 31, 2023 and 2022, respectively.

(2) Restructuring and integration expenses incurred during the year ended December 31, 2023 consist of $1.3 million in our Vehicle Control segment, $1.1 million in our Temperature Control segment and $0.2 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.

Total restructuring expenses related to the initiative of approximately $2.5 million and $1.5 million were incurred during the years ended December 31, 2023 and 2022, respectively. Expenses for the year ended December 31, 2023 consist of (1) expenses of approximately $0.7 million related to a further sales force reduction, (2) expenses of approximately $1.3 million of employee severance and bonuses related to our product line relocations, and (3) expenses of approximately $0.5 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico.  Expenses for the year ended December 31, 2022 consist of (1) expenses of approximately $0.9 million related to our sales force reduction, and (2) expenses of approximately $0.6 million consisting of employee severance related to our product line relocations.  Cash payments made under the initiative were $2.4 million during the year ended December 31, 2023. Additional restructuring costs related to the initiative, and expected to be incurred, are approximately $0.5 million.  We anticipate that the Cost Reduction Initiative will be completed by the end of the second quarter of 2024.

Plant Rationalization Programs

The 2016 Plant Rationalization Program, which included the shutdown and sale of our Grapevine, Texas facility, and the 2017 Orlando Rationalization Program, which included the shutdown of our Orlando, Florida facility, have been completed.  Cash payments made of $16,000 during the year ended December 31, 2022 consist of severance payments to former employees terminated in connection with these programs. There is no remaining aggregate liability related to these programs as of December 31, 2022.

Integration Costs

Particulate Matter Sensor (“Soot Sensor”) Product Line Relocation

In connection with our acquisitions in March 2021 and November 2021 of certain soot sensor product lines from Stoneridge, Inc., we incurred certain integration expenses in connection with the relocation of certain inventory, machinery, and equipment from Stoneridge’s facilities in Lexington, Ohio and Tallinn, Estonia to our existing facilities in Independence, Kansas and Bialystok, Poland, respectively.  Integration expenses recognized and cash payments made of $144,000 during the year ended December 31, 2022 related to these relocation activities.The soot sensor product line relocation has been completed and there is no remaining aggregate liability related to the soot sensor product line relocation as of December 31, 2022.

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Sale of Receivables

12 Months Ended

Dec. 31, 2023

Sale of Receivables [Abstract]

Sale of Receivables

4. 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 $830.8 million and $813.7 million of receivables for the years ended December 31, 2023 and 2022, respectively. Receivables presented at financial institutions and not yet collected as of December 31, 2023 were $4.5 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 $46 million, $32 million and $11.5 million related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

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

12 Months Ended

Dec. 31, 2023

Inventories [Abstract]

Inventories

5. Inventories

	December 31,
	2023		2022
	(In thousands)
Finished goods	$	302,557	$	324,362
Work-in-process		18,503		14,099
Raw materials		186,015		190,254
Subtotal		507,075		528,715
Unreturned customer inventories		18,240		19,695
Total inventories	$	525,315	$	548,410

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

6. Property, Plant and Equipment

	December 31,
	2023		2022
	(In thousands)
Land, buildings and improvements	$	45,710	$	42,651
Machinery and equipment		177,337		166,149
Tools, dies and auxiliary equipment		73,494		67,017
Furniture and fixtures		33,212		32,084
Leasehold improvements		16,418		15,083
Construction-in-progress		35,357		23,340
Total property, plant and equipment		381,528		346,324
Less accumulated depreciation		259,656		239,176
Total property, plant and equipment, net	$	121,872	$	107,148

Depreciation expense was $19.7 million in 2023, $19 million in 2022 and $18.2 million in 2021.

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Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

7. Leases

Quantitative Lease Disclosures

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 includes all operating leases acquired from the date of the acquisition (in thousands):

Balance Sheet Information	December 31,
Assets	2023			2022
Operating lease right-of-use assets	$	100,065		$	49,838
Liabilities
Sundry payables and accrued expenses	$	17,139		$	10,763
Noncurrent operating lease liabilities		88,974			40,709
Total operating lease liabilities	$	106,113		$	51,472
Weighted Average Remaining Lease Term
Operating leases	8.3 Years			7 Years
Weighted Average Discount Rate
Operating leases		4.8	%		3.7	%

	Year Ended, December 31,
Expense and Cash Flow Information	2023		2022
Lease Expense
Operating lease expense (a)	$	16,434	$	11,411
Supplemental Cash Flow Information
Cash Paid for the amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,099	$	11,293
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases (b)	$	66,014	$	31,064

(a) Excludes expenses of approximately $3.3 million, $2.7 million and $2 million for the years ended December 31, 2023, 2022, and 2021, 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) During the year ended December 31, 2023 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; $26.1 million of right-of-use assets related to the new distribution center in Shawnee, Kansas; $4.4 million of right-of-use assets obtained in Gwo Yng step-acquisition; and $3.7 million of right-of-use assets related to our Reynosa, Mexico lease renewal.

Minimum Lease Payments

At December 31, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

2024	$	17,607
2025		16,145
2026		14,814
2027		13,671
2028		11,415
Thereafter		58,059
Total lease payments	$	131,711
Less: Interest		(25,598	)
Present value of lease liabilities	$	106,113

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

8. Goodwill and Other Intangible Assets

Goodwill

We assess the impairment of long‑lived and identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value of a reporting unit is below its carrying amount.

When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required. If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test. In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount. A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

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 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.

We completed our annual impairment test of goodwill as of December 31, 2023. As of December 31, 2023, we performed a qualitative assessment of the likelihood of a goodwill impairment for the Vehicle Control, Temperature Control and Engineered Solutions reporting units. Based upon our qualitative assessment, we determined that it was not more likely than not that the fair value of the each of the Vehicle Control, Temperature Control and Engineered Solutions reporting units was less than their respective carrying amounts. As such, we concluded that the quantitative impairment test would not be required, and that there would be no required goodwill impairment charge as of December 31, 2023 at each of the reporting units. While we concluded that we did not have a goodwill impairment charge as of December 31, 2023, and we do not believe that future impairments are probable, we will need to maintain the current ongoing performance levels at each of the Vehicle Control, Temperature Control and Engineered Solutions reporting units in future periods to sustain their goodwill carrying values.

Changes in the carrying values of goodwill by operating segment during the years ended December 31, 2023 and 2022 are as follows (in thousands):

	Vehicle Control			Temperature Control		Engineered Solutions			Total
Balance as of December 31, 2021:
Goodwill	$	129,318		$	10,839	$	29,983		$	170,140
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,830		$	10,839	$	29,983		$	131,652
Activity in 2022
Acquisition of Kade		—			582		184			766
Foreign currency exchange rate change		(310	)		53		(74	)		(331	)
Balance as of December 31, 2022:
Goodwill		129,008			11,474		30,093			170,575
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,520		$	11,474	$	30,093		$	132,087
Activity in 2023
Step acquisition of Gwo Yng		—			1,214		994			2,208
Foreign currency exchange rate change		286			42		106			434
Balance as of December 31, 2023:
Goodwill		129,294			12,730		31,193			173,217
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,806		$	12,730	$	31,193		$	134,729

Acquired Intangible Assets

Acquired identifiable intangible assets as of December 31, 2023 and 2022 consist of:

	December 31,
	2023			2022
	(In thousands)
Customer relationships	$	159,641		$	158,717
Patents, developed technology and intellectual property		14,123			14,123
Trademarks and trade names		8,880			8,880
Non-compete agreements		3,295			3,282
Supply agreements		800			800
Leaseholds		160			160
Total acquired intangible assets		186,899			185,962
Less accumulated amortization (1)		(95,681	)		(86,945	)
Net acquired intangible assets	$	91,218		$	99,017

(3) Applies to all intangible assets, except for a related trademark/trade name totaling $2.6 million, which has an indefinite useful life and, as such, is not being amortized.

Total amortization expense for acquired intangible assets was $8.5 million for the year ended December 31, 2023, $8.6 million for the year ended December 31, 2022, and $8.7 million for the year ended December 31, 2021. Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $8.5 million for 2024, $8.5 million in 2025, $8.5 million in 2026, $8.4 million in 2027 and $54.7 million in the aggregate for the years 2028 through 2041.

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

Other Intangible Assets

Other intangible assets include computer software.  Computer software as of December 31, 2023 and 2022 totaled $19.1 million and $18.7 million, respectively.  Total accumulated computer software amortization as of December 31, 2023 and 2022 was $18 million and $17.2 million, respectively.  Computer software is amortized over its estimated useful life of 3 to 10 years. Amortization expense for computer software was $0.8 million, $0.7 million and $0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. 

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Investments in Unconsolidated Affiliates

12 Months Ended

Dec. 31, 2023

Investments in Unconsolidated Affiliates [Abstract]

Investments in Unconsolidated Affiliates

9. Investments in Unconsolidated Affiliates

	December 31,
	2023		2022
	(In thousands)
Foshan FGD SMP Automotive Compressor Co. Ltd	$	18,426	$	16,747
Foshan Che Yijia New Energy Technology Co., Ltd.		3,128		4,098
Orange Electronic Co. Ltd		2,496		2,490
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.		—		18,410
Total	$	24,050	$	41,745

Investment in Foshan FGD SMP Automotive Compressor Co. Ltd.

In November 2017, we formed Foshan FGD SMP Automotive Compressor Co., Ltd., a 50/50 joint venture with Foshan Guangdong Automotive Air Conditioning Co., Ltd. (“FGD”), a China-based manufacturer of automotive belt driven air conditioning compressors. We acquired our 50% interest in the joint venture for approximately $12.5 million.  We determined that due to a lack of a voting majority, and other qualitative factors, we do not control the operations of the joint venture and accordingly, our investment in the joint venture is accounted for under the equity method of accounting.  During the years ended December 31, 2023 and 2022, we made purchases from the joint venture of approximately $44.1 million and $43.5 million, respectively.

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

In August 2019, we acquired an approximate 29% minority interest in Foshan Che Yijia New Energy Technology Co., Ltd. (“CYJ”) for approximately $5.1 million.  CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China.  Our minority interest in CYJ is accounted for using the equity method of accounting.

In December 2021, Standard Motor Products (Hong Kong), Ltd., (“SMP HK”), a subsidiary of Standard Motor Products, Inc., entered into an unsecured loan agreement with CYJ.  Under the terms of the loan agreement, CYJ shall have the right to borrow from SMP HK, as lender, up to an aggregate principal amount of $4 million, with interest calculated on the basis of simple interest of five percent (5%) per annum and a maturity date of November 30, 2023, subject to extension by SMP HK at its sole discretion. In September 2023, the loan agreement was extended through November 30, 2025. Outstanding borrowings under the loan agreement at December 31, 2023 were $4 million.

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%. We will continue to account for our minority interest in CYJ using the equity method of accounting. During the years ended December 31, 2023 and 2022, purchases we made from CYJ were not material.

Investment in Orange Electronic Co. Ltd.

In January 2013, we acquired a minority interest in Orange Electronic Co., Ltd. (“Orange”) for $6.3 million.  Orange is a manufacturer of tire pressure monitoring system sensors and is located in Taiwan.  As of December 31, 2022, our minority interest in Orange of 19.4% is accounted for using the equity method of accounting as we have the ability to exercise significant influence. During the years ended December 31, 2023 and 2022, we made purchases from Orange of approximately $3.2 million and $4.5 million, respectively.

Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (“Gwo Yng”), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies and switches.  We acquired our 50% interest in the joint venture for approximately $14 million.  In March 2018, we acquired an additional 15% equity interest in the joint venture for RMB 26,475,583 (approximately $4.2 million), thereby increasing our equity interest in the joint venture to 65%.  While we increased our equity interest in the joint venture to 65%, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business.  As a result, we continued to account for our investment in the joint venture under the equity method of accounting.

In July 2023, we acquired an additional 15% equity interest in the joint venture for RMB 27,378,290 (approximately $4 million), thereby increasing our equity interest in Gwo Yng to 80%.  In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng.  As a result, as of the closing date of the transaction, Gwo Yng will be accounted for as a business combination achieved in stages (“a step acquisition”).  Accordingly, commencing on the closing of the transaction, we will report the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

During the year ended December 31, 2023 and through the date of our step acquisition in July 2023, we made purchases from the joint venture of approximately $10.3 million.  Purchases made from the joint  venture approximated $16.2 million during the year ended December 13, 2022.

For additional information related to Gwo Yng, see Note 2, “Business Acquisitions and Investments,” of the notes to our consolidated financial statements.

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Other Assets

12 Months Ended

Dec. 31, 2023

Other Assets [Abstract]

Other Assets

10. Other Assets

	December 31,
	2023		2022
	(In thousands)
Deferred compensation	$	23,893	$	20,190
Long-term investments		7,468		—
Noncurrent portion of interest rate swap fair value		1,944		3,091
Deferred financing costs, net		1,125		1,603
Other		837		2,626
Total other assets, net	$	35,267	$	27,510

Deferred compensation consists of assets held in a nonqualified defined contribution pension plan as of December 31, 2023 and 2022, respectively.  Long term investments as of December 31, 2023 consist of certificates of deposit with original maturities in excess of twelve months.

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Credit Facilities and Long-Term Debt

12 Months Ended

Dec. 31, 2023

Credit Facilities and Long-Term Debt [Abstract]

Credit Facilities and Long-Term Debt

11. Credit Facilities and Long-Term Debt

Total debt outstanding is summarized as follows:

	December 31,
	2023		2022
	(In thousands)
Credit facility – term loan due 2027	$	92,500	$	97,500
Credit facility – revolver due 2027		63,500		142,000
Other		211		120
Total debt	$	156,211	$	239,620
Current maturities of debt	$	5,029	$	55,031
Long-term debt		151,182		184,589
Total debt	$	156,211	$	239,620

Term Loan and Revolving Credit Facilities

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 nine 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 December 31, 2023 under the Credit Agreement were $156 million, consisting of current borrowings of $5 million and long-term debt of $151 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 $2.3 million and $2.4 million at December 31, 2023 and 2022, respectively.

At December 31, 2023, the weighted average interest rate under our Credit Agreement was 5%, which consisted of $156 million in borrowings at 5% 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 year ended December 31, 2023, our average daily alternative base rate loan balance was $0.1 million, compared to 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 November 2023, our Polish subsidiary, SMP Poland sp. z.o.o., further amended its overdraft facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce. The overdraft facility, as amended, provides for borrowings under the facility in Euros and U.S. Dollars.  Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.6 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit (approximately $6.5 million) if borrowings are in Euros and/or U.S. Dollars.  The overdraft facility has a maturity date in March 2024, with automatic three-month renewals until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period.  Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate (“WIBOR”) + 1.0% for borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate (“EURIBOR”) + 1.0% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.25% for borrowings in U.S Dollars.  Borrowings under the overdraft facility are guaranteed by Standard Motor Products, Inc., the ultimate parent company.  There were no borrowings outstanding under the overdraft facility at both December 31, 2023 and December 31, 2022.

Maturities of Debt

As of December 31, 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
2024	$	—	$	5,000		$	29		$	5,029
2025		—		5,000			31			5,031
2026		—		7,500			49			7,549
2027		63,500		75,000			102			138,602
Total	$	63,500	$	92,500		$	211		$	156,211
Less: current maturities		—		(5,000	)		(29	)		(5,029	)
Long-term debt	$	63,500	$	87,500		$	182		$	151,182

Deferred Financing Costs

We have deferred financing costs of approximately $1.6 million and $2.1 million as of December 31, 2023 and 2022, respectively.  Deferred financing costs are related to our term loan and revolving credit facilities.  Deferred financing costs as of December 31, 2023, assuming no prepayments, are being amortized in the amounts of $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

12 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

12.  Accumulated Other Comprehensive Income

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

	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at December 31, 2021 attributable to SMP	$	(8,221	)	$	52		$	—			$	(8,169	)
Other comprehensive income before reclassifications		(8,109	)		—			3,797		(1)		(4,312	)
Amounts reclassified from accumulated other comprehensive income		—			(15	)		26				11
Other comprehensive income, net		(8,109	)		(15	)		3,823				(4,301	)
Balance at December 31, 2022 attributable to SMP	$	(16,330	)	$	37		$	3,823			$	(12,470	)
Other comprehensive income before reclassifications		7,433			—			831		(1)		8,264
Amounts reclassified from accumulated other comprehensive income		—			(13	)		(1,755	)			(1,768	)
Other comprehensive income, net		7,433			(13	)		(924	)			6,496
Balance at December 31, 2023 attributable to SMP	$	(8,897	)	$	24		$	2,899			$	(5,974	)

(1) Consists of the unrecognized loss relating to the change in fair value of the cash flow interest rate hedge of $1.2 million ($0.9 million, net of tax) plus cash settlement receipts of $2.4 million ($1.7 million, net of tax) in the year ended December 31, 2023; and the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $5.2 million ($3.8 million, net of tax) minus cash settlement payments of $42,000 ($31,000, net of tax) in the year December 31, 2022.

Reclassifications Out of Accumulated Other Comprehensive Income (in thousands):

	Year Ended December 31,
Details About Accumulated Other Comprehensive Income Components	2023			2022
Derivative cash flow hedge:
Unrecognized gain (loss) (1)	$	(2,372	)	$	35
Postretirement Benefit Plans:
Unrecognized gain (loss) (2)		(22	)		(25	)
Total before income tax		(2,394	)		10
Income tax expense (benefit)		(626	)		(1	)
Total reclassifications attributable to SMP	$	(1,768	)	$	11

(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 (expense), net in our consolidated statements of operations (see Note 15, “Employee Benefits,” for additional information).

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Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Stockholders' Equity [Abstract]

Stockholders' Equity

13. Stockholders’ Equity

We have authority to issue 500,000 shares of preferred stock, $20 par value, and our Board of Directors is vested with the authority to establish and designate any series of preferred, to fix the number of shares therein and the variations in relative rights as between each series. In December 1995, our Board of Directors established a new series of preferred shares designated as Series A Participating Preferred Stock. The number of shares constituting the Series A Preferred Stock is 30,000. The Series A Preferred Stock is designed to participate in dividends, ranks senior to our common stock as to dividends and liquidation rights and has voting rights. Each share of the Series A Preferred Stock shall entitle the holder to one thousand votes on all matters submitted to a vote of the stockholders of the Company. No such shares were outstanding at December 31, 2023 and 2022.

In March 2020, our Board of Directors authorized the purchase of up to $20 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 were  150,273 shares of our common stock at a total cost of $6.5 million thereby completing the 2020 Board of Directors authorization.

In February 2021, our Board of Directors authorized the purchase of up to an additional $20 million of our common stock under a stock repurchase program. Stock repurchases under this program during the year ended December 31, 2021 were 464,992 shares of our common stock at a total cost of $20 million, thereby completing the February 2021 Board of Directors authorization.

In October 2021, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 and 2022 were 7,000 and 692,067 shares of our common stock, respectively, at a total cost of $0.3 million and $29.7 million, respectively, thereby completing the October 2021 Board of Directors authorization.

In July 2022, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a new stock repurchase program. Stock will be purchased under the program from time to time, in the open market or through private transactions, as market conditions warrant. To date, there have been no repurchases of our common stock under the program.

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Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2023

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

14. Stock-Based Compensation Plans

Our stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders.  In addition, members of our Board of Directors participate in our stock-based compensation program in connection with their service on our board.

In May 2021, our Board of Directors and Shareholders approved an amendment and restatement to the 2016 Omnibus Incentive Plan (the “Plan”).  Under the Plan, which terminates in May 2026, we are authorized to issue, among other things, shares of restricted and performance-based stock to eligible employees and restricted stock to directors of up to 2,050,000 shares; and shares of restricted and performance-based stock to nonemployee directors of up to 350,000 shares.  Shares issued under the Plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the Plan.  The 2016 Omnibus Incentive Plan is the only remaining plan available to provide stock-based incentive compensation to our employees, directors and other eligible persons.  Awards previously granted under the 2006 Omnibus Incentive Plan remain outstanding, while shares not yet granted under the plan are not available for future issuance.

We account for our stock-based compensation plans in accordance with the provisions of FASB ASC 718, Stock Compensation, which requires that a company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.  The service period is the period of time that the grantee must provide services to us before the stock-based compensation is fully vested.  The grant-date fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in our consolidated statements of operations.  Forfeitures are estimated at the time of grant based on historical trends in order to estimate the amount of share-based awards that will ultimately vest.  We monitor actual forfeitures for any subsequent adjustment to forfeiture rates.

Restricted Stock and Performance Share Grants

We currently grant shares of restricted stock to eligible employees and our independent directors and performance-based stock to eligible employees.  We grant eligible employees two types of restricted stock (standard restricted shares and long-term retention restricted shares).  Standard restricted shares granted to employees become fully vested no earlier than three years after the date of grant.  Long-term retention restricted shares granted to selected executives vest at a 25% rate on or within approximately two months of an executive reaching the ages of 60 and 63, and become fully vested on or within approximately two months of an executive reaching the age of 65.  Restricted shares granted to directors become fully vested upon the first anniversary of the date of grant.

Performance-based shares issued to eligible employees are subject to a three-year measuring period and the achievement of performance targets and, depending upon the achievement of such performance targets, they may become vested 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 upon our evaluation of historical and expected future turnover.

Prior to the time a restricted share becomes fully vested or a performance share is issued, the awardees cannot transfer, pledge, hypothecate or encumber such shares.  Prior to the time a restricted share is fully vested, the awardees have all other rights of a stockholder, including the right to vote (but do not receive dividends during the vesting period).  Prior to the time a performance share is issued, the awardees shall have no rights as a stockholder.  All shares and rights are subject to forfeiture if certain employment conditions are not met.

Under the amended and restated 2016 Omnibus Incentive Plan, 2,050,000 shares are authorized to be issued.  At December 31, 2023, under the plan, there were an aggregate of (a) 1,633,549 shares of restricted and performance-based stock grants issued, net of forfeitures, and (b) 416,451 shares of common stock available for future grants.  For the year ended December 31, 2023, 230,875 restricted and performance-based shares were granted (165,125 restricted shares and 65,750 performance-based shares).

In determining the grant date fair value, the stock price on the date of grant, as quoted on the New York Stock Exchange, was reduced by the present value of dividends expected to be paid on the shares issued and outstanding during the requisite service period, discounted at a risk-free interest rate.  The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the restriction or vesting period at the grant date. In addition, a further discount for the lack of marketability reduced the fair value of grants issued to certain key executives and directors subject to the one or two year post vesting holding period.  Assumptions used in calculating the discount for the lack of marketability include an estimate of stock volatility, risk-free interest rate, and a dividend yield.

As related to restricted and performance stock shares, we recorded compensation expense of $6.2 million ($4.8 million, net of tax), $7.6 million ($5.7 million, net of tax) and $9.1 million ($6.9 million, net of tax), for the years ended December 31, 2023, 2022 and 2021, respectively.  The unamortized compensation expense related to our restricted and performance-based shares was $13.3 million and $14.9 million at December 31, 2023 and 2022, respectively and is expected to be recognized over a weighted average period of 4.1 years and 0.3 years for employees and directors, respectively, as of December 31, 2023 and  over a weighted average period of 4.3 years and 0.3 years for employees and directors, respectively, as of December 31, 2022.

Our restricted and performance-based share activity was as follows for the years ended December 31, 2023 and 2022:

	Shares			Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2021		807,019		$	34.92
Granted		246,325			28.44
Vested		(190,082	)		41.71
Performance Shares Target Adjustment		25,317			42.21
Forfeited		(7,750	)		40.73
Balance at December 31, 2022		880,829		$	31.79
Granted		230,875			27.00
Vested		(248,065	)		36.30
Performance Shares Target Adjustment		29,137			36.30
Forfeited		(11,800	)		35.36
Balance at December 31, 2023		880,976		$	29.48

The weighted-average grant date fair value of restricted and performance-based shares outstanding as of December 31, 2023, 2022 and 2021 was $26 million (or $29.48 per share), $28 million (or $31.79 per share), and $28.2 million (or $34.92 per share), respectively.

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Employee Benefits

12 Months Ended

Dec. 31, 2023

Employee Benefits [Abstract]

Employee Benefits

15. Employee Benefits

Defined Contribution Plans

We maintain various defined contribution plans, which include profit sharing, and provide retirement benefits for substantially all of our employees. Matching obligations, in connection with the plans which are funded in cash and typically contributed to the plans in March of the following year, are as follows (in thousands):

	U.S. Defined Contribution
Year ended December 31,
2023	$	10,510
2022		10,180
2021		9,763

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 and 2022, contributions of $0.8 million were made related to calendar years 2022 and 2021, respectively. As of December 31, 2023, we have recorded an obligation of $0.6 million for 2023.

We also have an Employee Stock Ownership Plan and Trust (“ESOP”) for employees who are not covered by a collective bargaining agreement.  In connection therewith, we maintain an employee benefits trust to which we contribute shares of treasury stock.  We are authorized to instruct the trustees to distribute such shares toward the satisfaction of our future obligations under the plan. The shares held in trust are not considered outstanding for purposes of calculating earnings per share until they are committed to be released. The trustees will vote the shares in accordance with its fiduciary duties.  During 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 December 31, 2023.  The provision for expense in connection with the ESOP was approximately $3 million in 2023, $2.3 million in 2022 and $2.5 million in 2021.

Defined Benefit Pension Plan

We maintain a defined benefit unfunded Supplemental Executive Retirement Plan (“SERP”).  The SERP, as amended, is a defined benefit plan pursuant to which we will pay supplemental pension benefits to certain key employees upon the attainment of a contractual participant’s payment date based upon the employees’ years of service and compensation.  As there are no current participants in the SERP, there was no benefit obligation outstanding related to the plan as of December 31, 2023 and 2022 and we recorded no expense related to the plan during the years ended December 31, 2023, 2022 and 2021.

Postretirement Medical Benefits

We provide certain medical and dental care benefits to 14 former U.S. union employees. The postretirement medical and dental benefit obligation for the former union employees as of December 31, 2023, and the net periodic benefit cost for our postretirement benefit plans for the years ended December 31, 2023, 2022 and 2021 were not material.

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Other Non-Operating Income (Expense), Net

12 Months Ended

Dec. 31, 2023

Other Non-Operating Income (Expense), Net [Abstract]

Other Non-Operating Income (Expense), Net

16. Other Non-Operating Income (Expense), Net

The components of other non-operating income (expense), net are as follows:

	Year Ended December 31,
	2023			2022		2021
	(In thousands)
Interest and dividend income	$	517		$	209	$	49
Equity income from joint ventures		2,070			3,464		3,295
Gain (loss) on foreign exchange		(776	)		334		(257	)
Other non-operating income, net		515			807		407
Total other non-operating income, net	$	2,326		$	4,814	$	3,494

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Derivative Financial Instruments

12 Months Ended

Dec. 31, 2023

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

17. 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 1.25% at December 31, 2023.

The fair value of the interest rate swap agreement as of December 31, 2023 and December 31, 2022 was an asset of $3.9 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 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

12 Months Ended

Dec. 31, 2023

Fair Value Measurements [Abstract]

Fair Value Measurements

18. 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 December 31, 2023 and December 31, 2022 (in thousands):

		December 31, 2023				December 31, 2022
	Fair Value Hierarchy	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Cash and cash equivalents (a)	LEVEL 1/2	$	32,526	$	32,526	$	21,150	$	21,150
Deferred compensation	LEVEL 1		23,893		23,893		20,190		20,190
Short term borrowings	LEVEL 1		5,029		5,029		55,031		55,031
Long-term debt	LEVEL 1		151,182		151,182		184,589		184,589
Cash flow interest rate swap	LEVEL 2		3,939		3,939		5,174		5,174
Long-term investments	LEVEL 2		7,468		7,468		—		—

(a) As of December 31, 2023 cash and cash equivalents consist of cash of $29.5 million and cash equivalents of $3 million, which are classified as Level 1 and Level 2, respectively, under the fair value hierarchy.  Cash and cash equivalents at December 31, 2022 consists solely of cash of $21.2 million, which is classified as Level 1 under the fair value hierarchy.

Cash equivalents consist of certificates of deposit with original maturities of 3 months, or less. These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2023.  The fair value of the underlying assets held by the deferred compensation plan are based on the quoted market prices of the underlying funds which are held by registered investment companies. The carrying value of our variable rate short-term borrowings and long-term debt under our credit facilities approximates fair value as the variable interest rates in the facilities reflect current market rates. The fair value of our cash flow interest rate swap agreement is obtained from an independent third party, is based upon market quotes, and represents the net amount required to terminate the interest rate swap, taking into consideration market rates and counterparty credit risk.  Long-term investments consist of certificates of deposit with original maturities in excess of twelve months. These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2023.

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Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Taxes

19. Income Taxes

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

	Year Ended December 31,
	2023			2022			2021
Current:
Domestic	$	15,422		$	16,182		$	26,528
Foreign		9,224			8,669			5,851
Total current		24,646			24,851			32,379
Deferred:
Domestic		(5,769	)		1,102			(1,161	)
Foreign		(509	)		(747	)		(174	)
Total deferred		(6,278	)		355			(1,335	)
Total income tax provision	$	18,368		$	25,206		$	31,044

Reconciliations between taxes at the U.S. Federal income tax rate and taxes at our effective income tax rate on earnings from continuing operations before income taxes are as follows (in thousands):

	Year Ended December 31,
	2023			2022			2021
U.S. Federal income tax rate of 21%	$	17,160		$	20,650		$	27,398
Increase (decrease) in tax rate resulting from:
State and local income taxes, net of federal income tax benefit		2,086			3,118			4,579
Change in valuation allowance		674			1,068			466
Income tax (benefit) attributable to foreign income		377			(53	)		(122	)
Other non-deductible items, net		(1,929	)		423			(1,277	)
Provision for income taxes	$	18,368		$	25,206		$	31,044

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

	December 31,
	2023			2022
Deferred tax assets:
Inventories	$	10,493		$	11,604
Allowance for customer returns		13,083			14,506
Accrued asbestos liabilities		20,758			17,208
Accrued salaries and benefits		11,816			12,048
Tax credit and NOL carryforwards		5,968			5,103
Allowance for expected credit losses		3,567			2,965
Other		17			215
		65,702			63,649
Valuation allowance		(3,830	)		(3,155	)
Total deferred tax assets		61,872			60,494
Deferred tax liabilities:
Intangible assets acquired, net of amortization		12,668			13,292
Depreciation		7,597			8,715
Interest rate swap agreement		990			1,299
Other		84			3,530
Total deferred tax liabilities		21,339			26,836
Net deferred tax assets	$	40,533		$	33,658

In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some portion or the entire deferred tax asset will be realized.  Ultimately, the realization of the deferred tax asset is dependent upon the generation of sufficient taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized.  We consider the level of historical taxable income, scheduled reversal of temporary differences, carryback and carryforward periods, tax planning strategies and projected future taxable income in determining whether a valuation allowance is warranted.  We also consider cumulative losses in recent years as well as the impact of one-time events in assessing our pre-tax earnings. Assumptions regarding future taxable income require significant judgment. Our assumptions are consistent with estimates and plans used to manage our business.

The valuation allowance of $3.8 million as of December 31, 2023 is intended to provide for uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers. Based on these considerations, we believe it is more likely than not that we would realize the benefit of the net deferred tax asset of $40.5 million as of December 31, 2023, which is net of the remaining valuation allowance. At December 31, 2023, we have foreign tax credit carryforwards of approximately $3.8 million that will expire in varying amounts by 2032.

As related to the taxation of our foreign subsidiaries, we aggregate our foreign earnings and profits, and utilize allowable deductions and available foreign tax credits in computing our U.S. tax. Notwithstanding the U.S. taxation of these amounts, we intend to continue to invest most, or all, of these earnings indefinitely outside of the U.S., and do not expect to incur any significant additional taxes related to such amounts.

In accordance with generally accepted accounting practices, we recognize in our financial statements only those tax positions that meet the more-likely-than-not recognition threshold.  We establish tax reserves for uncertain tax positions that do not meet this threshold.  During the years ended December 31, 2023, 2022 and 2021, we did not establish a liability for uncertain tax positions.

We are subject to taxation in the U.S. and various state, local and foreign jurisdictions.  As of December 31, 2023, the Company is no longer subject to U.S. Federal tax examinations for years before 2020.  We remain subject to examination by state and local tax authorities for tax years 2019 through 2022.  Foreign jurisdictions have statutes of limitations generally ranging from 2 to 6 years.  Years still open to examination by foreign tax authorities in major jurisdictions include Canada (2019 onward), Hong Kong (2018 onward), China (2021 onward), Mexico (2019 onward), Poland (2018 onward), Hungary (2018 onward), U.K. (2017 onward) and Germany (2019 onward).  We do not presently anticipate that our unrecognized tax benefits will significantly increase or decrease over the next 12 months; however, actual developments in this area could differ from those currently expected.

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Earnings Per Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

20. Earnings Per Share

We present two calculations of earnings per common share.  “Basic” earnings per common share equals net earnings attributable to SMP divided by weighted average common shares outstanding during the period. “Diluted” earnings per common share equals net earnings attributable to SMP divided by the sum of weighted average common shares outstanding during the period plus potentially dilutive common shares.  Potentially dilutive common shares that are anti-dilutive are excluded from 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):

	Year Ended December 31,
	2023			2022			2021
Net Earnings Attributable to SMP -
Earnings from continuing operations	$	63,144		$	73,042		$	99,353
Loss from discontinued operations		(28,996	)		(17,691	)		(8,467	)
Net earnings attributable to SMP	$	34,148		$	55,351		$	90,886
Basic Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	2.91		$	3.37		$	4.49
Loss from discontinued operations per common share		(1.34	)		(0.82	)		(0.39	)
Net earnings per common share attributable to SMP	$	1.57		$	2.55		$	4.10
Weighted average common shares outstanding		21,716			21,684			22,147
	2023			2022			2021
Diluted Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	2.85		$	3.30		$	4.39
Loss from discontinued operations per common share		(1.31	)		(0.80	)		(0.37	)
Net earnings per common share attributable to SMP	$	1.54		$	2.50		$	4.02
Weighted average common shares outstanding		21,716			21,684			22,147
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock and performance-based stock		445			456			469
Weighted average common shares outstanding – Diluted		22,161			22,140			22,616

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):

	2023		2022		2021
Restricted and performance shares		280		292		269

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Industry Segment and Geographic Data

12 Months Ended

Dec. 31, 2023

Industry Segment and Geographic Data [Abstract]

Industry Segment and Geographic Data

21. Industry Segment and Geographic Data

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

Vehicle Control is the new name for our Engine Management operating segment.  It includes our core automotive 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 automotive aftermarket operating segment, after the carve out of all non-aftermarket business to our Engineered Solutions operating segment. Temperature Control 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 more complex air conditioning systems that will provide passenger comfort regardless of the vehicle’s powertrain.

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.

The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1). 

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

	Year Ended December 31,
	2023			2022			2021
Net sales (a):
Vehicle Control	$	737,932		$	750,571		$	737,431
Temperature Control		337,754			351,237			324,080
Engineered Solutions		282,586			270,007			237,305
Other		—			—			—
Total net sales	$	1,358,272		$	1,371,815		$	1,298,816
Depreciation and Amortization:
Vehicle Control	$	13,877		$	14,075		$	14,840
Temperature Control		3,424			2,973			3,345
Engineered Solutions		9,966			9,557			7,390
Other		1,755			1,693			1,668
Total depreciation and amortization	$	29,022		$	28,298		$	27,243
Operating income (loss):
Vehicle Control	$	71,327		$	74,153		$	97,029
Temperature Control		17,343			26,459			30,077
Engineered Solutions		19,944			18,713			19,982
Other		(15,937	)		(15,190	)		(18,089	)
Total operating income	$	92,677		$	104,135		$	128,999
Investment in unconsolidated affiliates:
Vehicle Control	$	2,496		$	2,490		$	2,729
Temperature Control		19,711			27,557			28,518
Engineered Solutions		1,843			11,698			12,840
Other		—			—			—
Total investment in unconsolidated affiliates	$	24,050		$	41,745		$	44,087
Capital expenditures:
Vehicle Control	$	13,955		$	13,378		$	17,048
Temperature Control		1,899			3,973			2,130
Engineered Solutions		12,095			6,489			5,354
Other		684			2,116			1,343
Total capital expenditures	$	28,633		$	25,956		$	25,875
Total assets:
Vehicle Control	$	620,569		$	618,789		$	604,016
Temperature Control		274,657			254,137			234,771
Engineered Solutions		292,080			289,518			272,791
Other		105,741			92,485			86,383
Total assets	$	1,293,047		$	1,254,929		$	1,197,961

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

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

Reconciliation of segment operating income to net earnings:

	Year Ended December 31,
	2023			2022			2021
	(In thousands)
Operating income	$	92,677		$	104,135		$	128,999
Other non-operating income, net		2,326			4,814			3,494
Interest expense		13,287			10,617			2,028
Earnings from continuing operations before income taxes		81,716			98,332			130,465
Provision for income taxes		18,368			25,206			31,044
Earnings from continuing operations		63,348			73,126			99,421
Discontinued operations, net of tax		(28,996	)		(17,691	)		(8,467	)
Net earnings	$	34,352		$	55,435		$	90,954

	December 31,
	2023		2022		2021
Long-lived assets (a):	(In thousands)
United States	$	368,792	$	326,199	$	315,983
Asia		75,869		76,766		80,175
Europe		44,517		38,351		37,892
Mexico		13,262		10,355		12,119
Canada		5,851		7,161		4,461
Total long-lived assets	$	508,291	$	458,832	$	450,630

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

Our three largest individual customers accounted for approximately 59% of our consolidated net sales in 2023. During 2023, O’Reilly Auto Parts, AutoZone and NAPA accounted for 29%, 16% and 14% of our consolidated net sales, respectively. Net sales from each of the customers were reported in our Vehicle Control and Temperature Control Segments. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them could have a material adverse impact on our business, financial condition and results of operations. In addition, any consolidation among our key customers may further increase our customer concentration risk.

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

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Net Sales

12 Months Ended

Dec. 31, 2023

Net Sales [Abstract]

Net Sales

22. 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 years ended December 31, 2023, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2023		2022		2021
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	450,180	$	454,571	$	444,196
Electrical and Safety		221,782		230,487		224,520
Wire Sets and Other		65,970		65,513		68,715
Total Vehicle Control		737,932		750,571		737,431
Temperature Control
AC System Components		237,756		245,484		231,466
Other Thermal Components		99,998		105,753		92,614
Total Temperature Control		337,754		351,237		324,080
Engineered Solutions
Commercial Vehicle		83,025		80,275		76,066
Construction/Agriculture		43,402		42,385		33,220
Light Vehicle		92,759		91,533		86,440
All Other		63,400		55,814		41,579
Total Engineered Solutions		282,586		270,007		237,305
Other		—		—		—
Total	$	1,358,272	$	1,371,815	$	1,298,816

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 years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	659,570	$	319,904	$	168,878	$	—	$	1,148,352
Canada		36,088		17,081		25,689		—		78,858
Europe		916		8		59,266		—		60,190
Mexico		36,350		49		6,658		—		43,057
Asia		351		526		19,522		—		20,399
Other foreign		4,657		186		2,573		—		7,416
Total	$	737,932	$	337,754	$	282,586	$	—	$	1,358,272

Year Ended December 31, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	682,145	$	335,281	$	191,678	$	—	$	1,209,104
Canada		35,233		14,596		16,762		—		66,591
Europe		661		75		37,784		—		38,520
Mexico		26,019		401		4,897		—		31,317
Asia		2,408		63		16,715		—		19,186
Other foreign		4,105		821		2,171		—		7,097
Total	$	750,571	$	351,237	$	270,007	$	—	$	1,371,815

Year Ended December 31, 2021	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	677,684	$	309,247	$	147,447	$	—	$	1,134,378
Canada		35,063		13,585		13,912		—		62,560
Europe		771		153		26,759		—		27,683
Mexico		19,741		358		5,547		—		25,646
Asia		144		101		40,771		—		41,016
Other foreign		4,028		636		2,869		—		7,533
Total	$	737,431	$	324,080	$	237,305	$	—	$	1,298,816

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies [Abstract]

Commitments and Contingencies

23. Commitments and Contingencies

Total rent expense for the three years ended December 31, 2023 was as follows (in thousands):

	Total (1)		Real Estate		Other
2023	$	19,706	$	15,735	$	3,971
2022		14,135		11,385		2,750
2021		12,065		9,500		2,565

(1) Includes expenses of approximately $3.3 million, $2.7 million, and $2 million for the years ended December 31, 2023, 2022 and 2021, 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.

For our operating lease minimal rental payments that we are obligated to make, see Note 7, “Leases.”

Warranties

We generally warrant our products against certain manufacturing and other defects. These product warranties are provided for specific periods of time depending on the nature of the product. As of December 31, 2023 and 2022, we have accrued $21.1 million and $19.7 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. Warranty expense for each of the years 2023, 2022, and 2021 were $120 million, $112.5 million and $91.9 million, respectively.

The following table provides the changes in our product warranties:

	December 31,
	2023			2022
	(In thousands)
Balance, beginning of period	$	19,667		$	17,463
Liabilities accrued for current year sales		120,027			112,477
Settlements of warranty claims		(118,560	)		(110,273	)
Balance, end of period	$	21,134		$	19,667

Letters of Credit

As of December 31, 2023 and 2022, we had outstanding letters of credit with certain vendors aggregating approximately $2.3 million and $2.4 million, respectively. These letters of credit are being maintained as security for reimbursements to insurance companies and as security to the landlord of our administrative offices in Long Island City, New York. The contract amount of the letters of credit is a reasonable estimate of their value as the value for each is fixed over the life of the commitment.

Change of Control Arrangements

We have a change in control arrangement with one key officer. In the event of a change of control (as defined in the agreement), the executive will receive severance payments and certain other benefits as provided in his agreement.

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 December 31, 2023, approximately 1,390 cases were outstanding for which we may be responsible for any related liabilities. Since inception in September 2001 through December 31, 2023, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $74.6 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, 2023. The results of the August 31, 2023 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $84 million to $135.3 million for the period through 2065. The change from the prior year study, which was as of August 31, 2022, was a $15.2 million increase for the low end of the range and a $23.7 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, 2023 actuarial study, in September 2023 we increased our asbestos liability to $84 million, the low end of the range, and recorded an incremental pre-tax provision of $23.8 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, 2023 study, to range from $53.1 million to $105.2 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 $11 million, $12 million and $8.8 million for the years ended December 31, 2023, 2022 and 2021, 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. In May 2023, we were found liable for approximately $11 million and, as such, in the second quarter of 2023 we recorded a pre-tax provision of such amount in earnings (loss) from discontinued operations in the accompanying statement of operations. However, in August 2023, we reached a final settlement of the legal proceeding, in which we reduced our liability to $10.5 million. In connection therewith, we reduced the pre-tax provision to $10.5 million and recorded a $0.5 million credit in earnings (loss) from discontinued operations in the accompanying statement of operations. Payment of such claim was made in early October 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.

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Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2023

Schedule II - Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

STANDARD MOTOR PRODUCTS, INC. AND SUBSIDIARIES

Schedule II ‑ Valuation and Qualifying Accounts

Years ended December 31, 2023, 2022 and 2021

			Additions
Description	Balance at beginning of year		Charged to costs and expenses			Other		Deductions		Balance at end of year
Year ended December 31, 2023:
Allowance for expected credit losses	$	4,129,000	$	2,940,000		$	—	$	185,000	$	6,884,000
Allowance for discounts		1,246,000		12,449,000			—		12,534,000		1,161,000
	$	5,375,000	$	15,389,000		$	—	$	12,719,000	$	8,045,000
Allowance for sales returns	$	37,169,000	$	162,525,000		$	—	$	161,456,000	$	38,238,000
Year ended December 31, 2022:
Allowance for expected credit losses	$	4,815,000	$	6,242,000	(1)	$	—	$	6,928,000	$	4,129,000
Allowance for discounts		1,355,000		13,456,000			—		13,565,000		1,246,000
	$	6,170,000	$	19,698,000		$	—	$	20,493,000	$	5,375,000
Allowance for sales returns	$	42,412,000	$	152,985,000		$	—	$	158,228,000	$	37,169,000
Year ended December 31, 2021:
Allowance for expected credit losses	$	4,406,000	$	450,000		$	—	$	41,000	$	4,815,000
Allowance for discounts		1,416,000		13,827,000			—		13,888,000		1,355,000
	$	5,822,000	$	14,277,000		$	—	$	13,929,000	$	6,170,000
Allowance for sales returns	$	40,982,000	$	129,964,000		$	—	$	128,534,000	$	42,412,000

(1) Includes a $7 million charge relating to one of our customers that filed a petition for bankruptcy in January 2023.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

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 a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets.  Our automotive aftermarket is comprised of two segments, Vehicle Control and Temperature Control, while our Engineered Solutions segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.  We sell our products primarily to retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin American countries.

The 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.

Use of Estimates

Use of Estimates

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 caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.  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.

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 – Vehicle Control, Temperature Control and Engineered Solutions. The new operating segment structure better aligns our operations with our strategic focus on diversifying our business, provides greater transparency into our positioning to capture opportunities for growth in the future, and provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment.  Prior period segment results have been reclassified to conform to our operating segment reorganization.  For additional information related to our segment reorganization, see Note 8, “Goodwill and Acquired Intangible Assets,” Note 21, “Industry Segment and Geographic Data” and Note 22, “Net Sales.”

Cash and Cash Equivalents

Cash and Cash Equivalents

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

Allowance for Expected Credit Losses and Cash Discounts

Allowance for Expected Credit Losses and Cash Discounts

We do not generally require collateral for our trade accounts receivable. Accounts receivable have been reduced by an allowance for amounts that may become uncollectible in the future. These allowances are established based on a combination of write-off history, supportable forecasts, aging analysis, and specific account evaluations. When a receivable balance is known to be uncollectible, it is written off against the allowance for expected credit losses. Cash discounts are provided based on an overall average experience rate applied to qualifying accounts receivable balances.

Inventories

Inventories

Inventories are valued at the lower of cost and net realizable value.  Cost is determined on the first-in first-out basis.  Where appropriate, standard cost systems are utilized for purposes of determining cost; the standards are adjusted as necessary to ensure they approximate actual costs.  Estimates of lower of cost and net realizable value of inventory are determined by comparing the actual cost of the product to the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation of the inventory.

We also evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand.  For inventory deemed to be obsolete, we provide a reserve on the full value of the inventory.  Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates our estimate of future demand.  Future projected demand requires management judgment and is based upon (a) our review of historical trends and (b) our estimate of projected customer specific buying patterns and trends in the industry and markets in which we do business.  Using rolling twelve month historical information, we estimate future demand on a continuous basis.  The historical volatility of such estimates has been minimal.  We maintain provisions for inventory reserves of $42.9 million and $42.5 million as of December 31, 2023 and 2022, respectively.

We utilize cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps.  The production of air conditioning compressors, diesel injectors, and diesel pumps involves the rebuilding of used cores, which we acquire either in outright purchases from used parts brokers, or from returns pursuant to an exchange program with customers. Under such exchange programs, at the time of sale of air conditioning compressors, diesel injectors, and diesel pumps, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.

In addition, many of our customers can return inventory to us based upon customer warranty and overstock arrangements within customer specific limits.  At the time products are sold, we accrue a liability for product warranties and overstock returns and record as unreturned customer inventory our estimate of anticipated customer returns.  Estimates are based upon historical information on the nature, frequency and probability of the customer return.  Unreturned core, warranty and overstock customer inventory is recorded at standard cost.  Revision to these estimates is made when necessary, based upon changes in these factors.  We regularly study trends of such claims.

Property, Plant and Equipment

Property, Plant and Equipment

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

	Estimated Life
Buildings	25 to 33-1/2 years
Building improvements	10 to 25 years
Machinery and equipment	5 to 12 years
Tools, dies and auxiliary equipment	3 to 8 years
Furniture and fixtures	3 to 12 years

Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease.  Costs related to maintenance and repairs which do not prolong the assets useful lives are expensed as incurred.  We assess our property, plant and equipment to be held and used for impairment when indicators are present that the carrying value may not be recoverable.

Leases

Leases

We determine if an arrangement is a lease at inception.  For operating leases, we include and report operating lease right-of-use (“ROU”) assets, sundry payables and accrued expenses, and noncurrent operating lease liabilities on our consolidated balance sheet for leases with a term longer than twelve months.  Finance leases are reported on our consolidated balance sheets in property, plant and equipment, current portion of other debt, and long-term debt.

Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments over the lease term.  Our ROU assets represent the right to use an underlying leased asset over the existing lease term, and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease agreement.  As most of our leases do not provide for an implicit rate, we use our incremental borrowing rate based on the information available when determining the present value of our lease payments.  Our lease terms may include options to terminate, or extend, our lease when it is reasonably certain that we will execute the option.  Lease agreements may contain lease and non-lease components, which are generally accounted for separately.  Operating lease expense is recognized on a straight-line basis over the lease term.

Valuation of Long-Lived and Intangible Assets and Goodwill

Valuation of Long-Lived and Intangible Assets and Goodwill

At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, patents, developed technology and intellectual property, and non-compete agreements.  Intangible assets acquired through business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date.  Valuing intangible assets requires the use of significant estimates and assumptions.  As related to valuing customer relationships, significant estimates and assumptions used include but are not limited to: (1) forecasted revenues attributable to existing customers; (2) forecasted earnings before interest and taxes (“EBIT”) margins; (3) customer attrition rates; and (4) the discount rate.  Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.  Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment.  Intangible assets determined to have definite lives are amortized over their remaining useful lives.  We believe that the fair value of acquired identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

We assess the impairment of long‑lived assets, identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill and identifiable intangible assets having indefinite lives, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount.  Factors we consider important, which could trigger an impairment review, include the following: (a) significant underperformance relative to expected historical or projected future operating results; (b) significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and (c) significant negative industry or economic trends. We review the fair values using the discounted cash flows method and market multiples.

When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required.  If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test.  In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount.  A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology similar with that used to evaluate goodwill.  Intangible assets having definite lives and other long-lived assets are reviewed for impairment whenever events such as product discontinuance, plant closures, product dispositions or other changes in circumstances indicate that the carrying amount may not be recoverable.  In reviewing intangible assets having definite lives and other long-lived assets for impairment, we compare the carrying value of such assets to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. When the estimated undiscounted future cash flows are less than their carrying amount, an impairment loss is recognized equal to the difference between the assets fair value and their carrying value.

There are inherent assumptions and estimates used in developing future cash flows requiring our judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and long‑lived asset impairment including projecting revenues, interest rates, tax rates and the cost of capital.  Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods.  These changes can result in future impairments.  In the event our planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our business, financial condition and results of operations.

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities of our foreign operations are translated into U.S. dollars at year-end exchange rates.  Income statement accounts are translated using the average exchange rates prevailing during the year.  The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) and remains there until the underlying foreign operation is liquidated or substantially disposed of.  Foreign currency transaction gains or losses are recorded in the statement of operations under the caption “other non-operating income (expense), net.”

Revenue Recognition

Revenue Recognition

We derive our revenue primarily from vehicle aftermarket sales in our Vehicle Control and Temperature Control Segments, and non-aftermarket sales in our Engineered Solutions Segment. We recognize revenues when our performance obligation has been satisfied and the control of products has been transferred to a customer which typically occurs upon shipment.  Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of goods or providing services. The amount of consideration we receive and revenue we recognize depends on the marketing incentives, product warranty and overstock returns we offer to our customers.  For certain of our sales of remanufactured products, we also charge our customers a deposit for the return of a used core component which we can use in our future remanufacturing activities.  Such deposit is not recognized as revenue at the time of the sale but rather carried as a core liability.  At the same time, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.  The liability is extinguished when a core is actually returned to us, or at period end when we estimate and recognize revenue for the core deposits not expected to be returned.  We estimate and record provisions for cash discounts, quantity rebates, sales returns and warranties in the period the sale is recorded, based upon our prior experience and current trends.  Significant management judgments and estimates must be made and used in estimating sales returns and allowances relating to revenue recognized in any accounting period.

Product Warranty and Overstock Returns

Product Warranty and Overstock Returns

Many of our products carry a warranty ranging from a 90-day limited warranty to a lifetime limited warranty, which generally covers defects in materials or workmanship and failure to meet industry published specifications and/or the result of installation error.  In addition to warranty returns, we also permit our customers to return new, undamaged products to us within customer-specific limits (which are generally limited to a specified percentage of their annual purchases from us) in the event that they have overstocked their inventories. At the time products are sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature, frequency and average cost of the claim and the probability of the customer return.  At the same time, we record an estimate of anticipated customer returns as unreturned customer inventory.  Significant judgments and estimates must be made and used in connection with establishing the sales returns and other allowances in any accounting period.  Revision to these estimates is made when necessary, based upon changes in these factors.  We regularly study trends of such claims.

New Customer Acquisition Costs

New Customer Acquisition Costs

New customer acquisition costs refer to arrangements pursuant to which we incur change-over costs to induce a new customer to switch from a competitor’s brand.  In addition, change-over costs include the costs related to removing the new customer’s inventory and replacing it with our inventory commonly referred to as a stock lift. New customer acquisition costs are recorded as a reduction to revenue when incurred.

Selling, General and Administration Expenses

Selling, General and Administration Expenses

Selling, general and administration expenses include shipping costs and advertising, which are expensed as incurred.  Shipping and handling charges, as well as freight to customers, are included in distribution expenses as part of selling, general and administration expenses.

Deferred Financing Costs

Deferred Financing Costs

Deferred financing costs represent costs incurred in conjunction with our debt financing activities.  Deferred financing costs related to our term loan and revolving credit facilities are capitalized and amortized over the life of the related financing arrangement.  If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired and are recorded in the statement of operations under the caption other non-operating income (expense), net.

Accounting for Income Taxes

Accounting for Income Taxes

Income taxes are calculated using the asset and liability method.  Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as measured by the current enacted tax rates.

We maintain valuation allowances when it is more likely than not that all or a portion of a deferred asset will not be realized.  In determining whether a valuation allowance is warranted, we consider all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies to estimate if sufficient future taxable income will be generated to realize the deferred tax asset.  The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable.  In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the level of valuation allowance which could materially impact our business, financial condition and results of operations.

The valuation allowance of $3.8 million as of December 31, 2023 is intended to provide for the uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers.  Based on these considerations, we believe it is more likely than not that we will realize the benefit of the net deferred tax asset of $40.5 million as of December 31, 2023, which is net of the remaining valuation allowance.

Tax benefits are recognized for an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority.  For a tax position that meets the more-likely-than-not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority.  The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available.  Such adjustments are recognized entirely in the period in which they are identified.  During the years ended December 31, 2023, 2022 and 2021, we did not establish a liability for uncertain tax positions.

Environmental Reserves

Environmental Reserves

We are subject to various U.S. Federal and state and local environmental laws and regulations and are involved in certain environmental remediation efforts.  We estimate and accrue our liabilities resulting from such matters based upon a variety of factors including the assessments of environmental engineers and consultants who provide estimates of potential liabilities and remediation costs.  Such estimates are not discounted to reflect the time value of money due to the uncertainty in estimating the timing of the expenditures, which may extend over several years.  Potential recoveries from insurers or other third parties of environmental remediation liabilities are recognized independently from the recorded liability, and any asset related to the recovery will be recognized only when the realization of the claim for recovery is deemed probable.

Asbestos Litigation

Asbestos Litigation

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.  Future legal costs are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations.

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, which will reported in earnings (loss) from discontinued operations in the accompanying statement of operations.  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.

Loss Contingencies

Loss Contingencies

We have loss contingencies, for such matters as legal claims and legal proceedings.  Establishing loss reserves for these matters requires estimates, judgment of risk exposure and ultimate liability.  We record provisions when the liability is considered probable and reasonably estimable.  Significant judgment is required for both the determination of probability and the determination as to whether an exposure can be reasonably estimated.  We maintain an ongoing monitoring and identification process to assess how the activities are progressing against the accrued estimated costs.  As additional information becomes available, we reassess our potential liability related to these matters.  Adjustments to the liabilities are recorded in the statement of operations in the period when additional information becomes available.  Such revisions of the potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments, accounts receivable and derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings. We place our cash investments with high quality financial institutions and limit the amount of credit exposure to any one institution. Derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings are entered into with high quality financial institutions, with their credit worthiness reviewed on a quarterly basis. Although we are directly affected by developments in the vehicle parts industry, management does not believe significant credit risk exists.

With respect to accounts receivable, such receivables are primarily from warehouse distributors and major retailers in the automotive aftermarket industry located in the U.S. We perform ongoing credit evaluations of our customers’ financial conditions. A significant portion of our net sales are concentrated from our three largest individual customers. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them, could have a materially adverse impact on our business, financial condition and results of operations.

In January 2023, one of our customers filed a petition for bankruptcy. In connection with the bankruptcy filing, we evaluated our potential risk and exposure as related to our outstanding accounts receivable balance from the customer as of December 31, 2022, and estimated our anticipated recovery. As a result of our evaluation, we recorded a $7 million pre-tax charge during the year ended December 31, 2022 to reduce our accounts receivable balance to our estimated recovery. The $7 million pre-tax charge was included in selling, general and administrative expenses in our consolidated statement of operations. The bankruptcy court proceedings have continued into 2023. Although the courts have named us a “critical supplier,” the funds allocated to us have not yet been determined and, as such, we have not recorded an adjustment to the $7 million pre-tax charge previously recorded.

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

Foreign Cash Balances

Foreign Cash Balances

Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2023 and 2022 were uninsured. Foreign cash balances at December 31, 2023 and 2022 were $30.5 million and $18.5 million, respectively.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings.  Derivative financial instruments are recorded at fair value in other current and long-term assets, and other current and long-term liabilities in the consolidated balance sheets.  For derivative financial instruments that have been formally designated as cash flow interest rate hedges (“interest rate swap agreements”), provided that the hedging instrument is highly effective, the entire change in the fair value of the derivative will be deferred and recorded in accumulated other comprehensive income (“AOCI”) in the consolidated balance sheets. When the underlying hedged transaction is realized (i.e., when the interest payments on the underlying borrowing are recognized in the consolidated statements of operations), the gain/loss included in AOCI is recorded in earnings and reflected on the same line as the gain/loss on the hedged item attributable to the hedged risk (i.e., interest expense). At the inception of each transaction, we formally document the hedge relationship, including the identification of the hedge instrument, the related hedged items, the effectiveness of the hedge, as well as its risk management objectives and strategies.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Standards that are not yet adopted as of December 31, 2023

Standard	Description	Effective date	Effects on the financial statements or other significant matters
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. ASU 2023-07 expands segment disclosures by requiring disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss; (2) the amount and description of the composition of other segment items to reconcile to segment profit and loss; and (3) the CODM’s title and position and how the CODM uses the reported segment measures to allocate resources.  Additionally, ASU 2023-07 requires interim disclosures of all reportable segment profit or loss and assets previously required annually by Topic 280.	The ASU is effective for the fiscal years beginning after December 15, 2023, which for us is December 31, 2024, and all subsequent interim periods, with full retrospective application required to all prior periods presented. Early adoption is permitted.	The new standard will require expanding our segment disclosure to include additional segment level information. We are currently evaluating the full impact of adopting ASU 2023-07 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of December 31, 2024.
ASU 2023-09, Income Taxes (Topic 270): Improvements to Income Tax Disclosures	ASU 2023-09 will improve transparency and decision making usefulness of income tax disclosures. ASU 2023-09 will expand the annual required income effective tax rate reconciliation disclosures to include disclosure of (1) eight specific categories of rate reconciling items; (2) additional information for reconciling items that meet or exceed a quantitative threshold; and (3) expand the required disclosures to include reconciling percentages as well as reported amounts.  Additionally, the ASU 2023-09 will expand required interim and annual disclosures of income taxes paid to include the disaggregation by federal, state and foreign jurisdictions, with expanded disclosures required annually.	The ASU is effective for annual reporting periods beginning after December 15, 2024, which for us is January 1, 2025, with full retrospective application required to all prior periods presented. Early adoption is permitted.	The new standard will require expanding our interim and annual income tax disclosures in our financial statements. We are currently evaluating the full impact of adopting ASU 2023-09 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of March 31, 2025.

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

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Estimated Useful Lives of Property, Plant and Equipment

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

	Estimated Life
Buildings	25 to 33-1/2 years
Building improvements	10 to 25 years
Machinery and equipment	5 to 12 years
Tools, dies and auxiliary equipment	3 to 8 years
Furniture and fixtures	3 to 12 years

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Business Acquisitions and Investments (Tables)

12 Months Ended

Dec. 31, 2023

Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member]

Business Acquisition [Line Items]

Allocation of Purchase Price, Assets Acquired And Liabilities Assumed

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

Total purchase consideration (1)				$	21,725
Assets acquired and liabilities assumed:
Cash and cash equivalents	$	6,779
Receivables		5,912
Inventory		5,945
Other current assets		528
Property, plant and equipment, net		2,924
Operating lease right-of-use assets		4,372
Intangible assets (2)		532
Goodwill		2,208
Long term investments and other assets		7,257
Current liabilities		(6,004	)
Noncurrent operating lease liabilities		(3,455	)
Subtotal					26,998
Fair value of acquired noncontrolling interest					(5,273	)
Total purchase consideration allocated to net assets acquired				$	21,725

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

(2) Intangible assets consists of customer relationships of $0.4 million and capitalized software of $0.1 million.

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)

12 Months Ended

Dec. 31, 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 and for the years ended December 31, 2023 and 2022, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2021	$	79		$	—		$	79
Restructuring and integration costs:
Amounts provided for during 2022 (1)		1,521			370			1,891
Cash payments		(16	)		(144	)		(160	)
Reclassification of environmental and other liabilities		(63	)		(226	)		(289	)
Exit activity liability at December 31, 2022	$	1,521		$	—		$	1,521
Restructuring and integration costs:
Amounts provided for during 2023 (1) (2)		1,973			669			2,642
Cash payments		(1,803	)		(577	)		(2,380	)
Reclassification of environmental liability		—			(92	)		(92	)
Foreign currency exchange rate changes		38			—			38
Exit activity liability at December 31, 2023	$	1,729		$	—		$	1,729

(1) Included in restructuring and integration costs in 2023 and 2022 is a $0.1 million and $0.2 million increase, respectively, in environmental cleanup costs related to ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.  The environmental liability has been reclassed to accrued liabilities as of December 31, 2023 and 2022, respectively.

(2) Restructuring and integration expenses incurred during the year ended December 31, 2023 consist of $1.3 million in our Vehicle Control segment, $1.1 million in our Temperature Control segment and $0.2 million in our Engineered Solutions segment.

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Inventories (Tables)

12 Months Ended

Dec. 31, 2023

Inventories [Abstract]

Inventories

	December 31,
	2023		2022
	(In thousands)
Finished goods	$	302,557	$	324,362
Work-in-process		18,503		14,099
Raw materials		186,015		190,254
Subtotal		507,075		528,715
Unreturned customer inventories		18,240		19,695
Total inventories	$	525,315	$	548,410

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

	December 31,
	2023		2022
	(In thousands)
Land, buildings and improvements	$	45,710	$	42,651
Machinery and equipment		177,337		166,149
Tools, dies and auxiliary equipment		73,494		67,017
Furniture and fixtures		33,212		32,084
Leasehold improvements		16,418		15,083
Construction-in-progress		35,357		23,340
Total property, plant and equipment		381,528		346,324
Less accumulated depreciation		259,656		239,176
Total property, plant and equipment, net	$	121,872	$	107,148

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Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Quantitative Disclosures Related to Operating Leases

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

Balance Sheet Information	December 31,
Assets	2023			2022
Operating lease right-of-use assets	$	100,065		$	49,838
Liabilities
Sundry payables and accrued expenses	$	17,139		$	10,763
Noncurrent operating lease liabilities		88,974			40,709
Total operating lease liabilities	$	106,113		$	51,472
Weighted Average Remaining Lease Term
Operating leases	8.3 Years			7 Years
Weighted Average Discount Rate
Operating leases		4.8	%		3.7	%

	Year Ended, December 31,
Expense and Cash Flow Information	2023		2022
Lease Expense
Operating lease expense (a)	$	16,434	$	11,411
Supplemental Cash Flow Information
Cash Paid for the amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,099	$	11,293
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases (b)	$	66,014	$	31,064

(a) Excludes expenses of approximately $3.3 million, $2.7 million and $2 million for the years ended December 31, 2023, 2022, and 2021, 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) During the year ended December 31, 2023 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; $26.1 million of right-of-use assets related to the new distribution center in Shawnee, Kansas; $4.4 million of right-of-use assets obtained in Gwo Yng step-acquisition; and $3.7 million of right-of-use assets related to our Reynosa, Mexico lease renewal.

Minimum Lease Payments

At December 31, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

2024	$	17,607
2025		16,145
2026		14,814
2027		13,671
2028		11,415
Thereafter		58,059
Total lease payments	$	131,711
Less: Interest		(25,598	)
Present value of lease liabilities	$	106,113

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Other Intangible Assets [Abstract]

Carrying Value of Goodwill by Operating Segment

Changes in the carrying values of goodwill by operating segment during the years ended December 31, 2023 and 2022 are as follows (in thousands):

	Vehicle Control			Temperature Control		Engineered Solutions			Total
Balance as of December 31, 2021:
Goodwill	$	129,318		$	10,839	$	29,983		$	170,140
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,830		$	10,839	$	29,983		$	131,652
Activity in 2022
Acquisition of Kade		—			582		184			766
Foreign currency exchange rate change		(310	)		53		(74	)		(331	)
Balance as of December 31, 2022:
Goodwill		129,008			11,474		30,093			170,575
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,520		$	11,474	$	30,093		$	132,087
Activity in 2023
Step acquisition of Gwo Yng		—			1,214		994			2,208
Foreign currency exchange rate change		286			42		106			434
Balance as of December 31, 2023:
Goodwill		129,294			12,730		31,193			173,217
Accumulated impairment losses		(38,488	)		—		—			(38,488	)
	$	90,806		$	12,730	$	31,193		$	134,729

Acquired Identifiable Intangible Assets

Acquired identifiable intangible assets as of December 31, 2023 and 2022 consist of:

	December 31,
	2023			2022
	(In thousands)
Customer relationships	$	159,641		$	158,717
Patents, developed technology and intellectual property		14,123			14,123
Trademarks and trade names		8,880			8,880
Non-compete agreements		3,295			3,282
Supply agreements		800			800
Leaseholds		160			160
Total acquired intangible assets		186,899			185,962
Less accumulated amortization (1)		(95,681	)		(86,945	)
Net acquired intangible assets	$	91,218		$	99,017

(3) Applies to all intangible assets, except for a related trademark/trade name totaling $2.6 million, which has an indefinite useful life and, as such, is not being amortized.

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Investments in Unconsolidated Affiliates (Tables)

12 Months Ended

Dec. 31, 2023

Investments in Unconsolidated Affiliates [Abstract]

Investments in Unconsolidated Affiliates

	December 31,
	2023		2022
	(In thousands)
Foshan FGD SMP Automotive Compressor Co. Ltd	$	18,426	$	16,747
Foshan Che Yijia New Energy Technology Co., Ltd.		3,128		4,098
Orange Electronic Co. Ltd		2,496		2,490
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.		—		18,410
Total	$	24,050	$	41,745

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Other Assets (Tables)

12 Months Ended

Dec. 31, 2023

Other Assets [Abstract]

Other Assets

	December 31,
	2023		2022
	(In thousands)
Deferred compensation	$	23,893	$	20,190
Long-term investments		7,468		—
Noncurrent portion of interest rate swap fair value		1,944		3,091
Deferred financing costs, net		1,125		1,603
Other		837		2,626
Total other assets, net	$	35,267	$	27,510

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Credit Facilities and Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2023

Credit Facilities and Long-Term Debt [Abstract]

Summary of Total Debt Outstanding

Total debt outstanding is summarized as follows:

	December 31,
	2023		2022
	(In thousands)
Credit facility – term loan due 2027	$	92,500	$	97,500
Credit facility – revolver due 2027		63,500		142,000
Other		211		120
Total debt	$	156,211	$	239,620
Current maturities of debt	$	5,029	$	55,031
Long-term debt		151,182		184,589
Total debt	$	156,211	$	239,620

Maturities of Debt

As of December 31, 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
2024	$	—	$	5,000		$	29		$	5,029
2025		—		5,000			31			5,031
2026		—		7,500			49			7,549
2027		63,500		75,000			102			138,602
Total	$	63,500	$	92,500		$	211		$	156,211
Less: current maturities		—		(5,000	)		(29	)		(5,029	)
Long-term debt	$	63,500	$	87,500		$	182		$	151,182

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Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income [Abstract]

Changes in Accumulated Other Comprehensive Income by Component

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

	Foreign Currency Translation			Unrecognized Postretirement Benefit Costs (Credit)			Unrealized derivative gains (losses)				Total
Balance at December 31, 2021 attributable to SMP	$	(8,221	)	$	52		$	—			$	(8,169	)
Other comprehensive income before reclassifications		(8,109	)		—			3,797		(1)		(4,312	)
Amounts reclassified from accumulated other comprehensive income		—			(15	)		26				11
Other comprehensive income, net		(8,109	)		(15	)		3,823				(4,301	)
Balance at December 31, 2022 attributable to SMP	$	(16,330	)	$	37		$	3,823			$	(12,470	)
Other comprehensive income before reclassifications		7,433			—			831		(1)		8,264
Amounts reclassified from accumulated other comprehensive income		—			(13	)		(1,755	)			(1,768	)
Other comprehensive income, net		7,433			(13	)		(924	)			6,496
Balance at December 31, 2023 attributable to SMP	$	(8,897	)	$	24		$	2,899			$	(5,974	)

(1) Consists of the unrecognized loss relating to the change in fair value of the cash flow interest rate hedge of $1.2 million ($0.9 million, net of tax) plus cash settlement receipts of $2.4 million ($1.7 million, net of tax) in the year ended December 31, 2023; and the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $5.2 million ($3.8 million, net of tax) minus cash settlement payments of $42,000 ($31,000, net of tax) in the year December 31, 2022.

Reclassifications Out of Accumulated Other Comprehensive Income

Reclassifications Out of Accumulated Other Comprehensive Income (in thousands):

	Year Ended December 31,
Details About Accumulated Other Comprehensive Income Components	2023			2022
Derivative cash flow hedge:
Unrecognized gain (loss) (1)	$	(2,372	)	$	35
Postretirement Benefit Plans:
Unrecognized gain (loss) (2)		(22	)		(25	)
Total before income tax		(2,394	)		10
Income tax expense (benefit)		(626	)		(1	)
Total reclassifications attributable to SMP	$	(1,768	)	$	11

(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 (expense), net in our consolidated statements of operations (see Note 15, “Employee Benefits,” for additional information).

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Stock-Based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2023

Stock-Based Compensation Plans [Abstract]

Restricted and Performance-Based Share Activity

Our restricted and performance-based share activity was as follows for the years ended December 31, 2023 and 2022:

	Shares			Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2021		807,019		$	34.92
Granted		246,325			28.44
Vested		(190,082	)		41.71
Performance Shares Target Adjustment		25,317			42.21
Forfeited		(7,750	)		40.73
Balance at December 31, 2022		880,829		$	31.79
Granted		230,875			27.00
Vested		(248,065	)		36.30
Performance Shares Target Adjustment		29,137			36.30
Forfeited		(11,800	)		35.36
Balance at December 31, 2023		880,976		$	29.48

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2023

Employee Benefits [Abstract]

Defined Contribution Plan Matching Obligations

We maintain various defined contribution plans, which include profit sharing, and provide retirement benefits for substantially all of our employees. Matching obligations, in connection with the plans which are funded in cash and typically contributed to the plans in March of the following year, are as follows (in thousands):

	U.S. Defined Contribution
Year ended December 31,
2023	$	10,510
2022		10,180
2021		9,763

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Other Non-Operating Income (Expense), Net (Tables)

12 Months Ended

Dec. 31, 2023

Other Non-Operating Income (Expense), Net [Abstract]

Components of Other Non-Operating Income (Expense)

The components of other non-operating income (expense), net are as follows:

	Year Ended December 31,
	2023			2022		2021
	(In thousands)
Interest and dividend income	$	517		$	209	$	49
Equity income from joint ventures		2,070			3,464		3,295
Gain (loss) on foreign exchange		(776	)		334		(257	)
Other non-operating income, net		515			807		407
Total other non-operating income, net	$	2,326		$	4,814	$	3,494

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2023 and December 31, 2022 (in thousands):

		December 31, 2023				December 31, 2022
	Fair Value Hierarchy	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Cash and cash equivalents (a)	LEVEL 1/2	$	32,526	$	32,526	$	21,150	$	21,150
Deferred compensation	LEVEL 1		23,893		23,893		20,190		20,190
Short term borrowings	LEVEL 1		5,029		5,029		55,031		55,031
Long-term debt	LEVEL 1		151,182		151,182		184,589		184,589
Cash flow interest rate swap	LEVEL 2		3,939		3,939		5,174		5,174
Long-term investments	LEVEL 2		7,468		7,468		—		—

(a) As of December 31, 2023 cash and cash equivalents consist of cash of $29.5 million and cash equivalents of $3 million, which are classified as Level 1 and Level 2, respectively, under the fair value hierarchy.  Cash and cash equivalents at December 31, 2022 consists solely of cash of $21.2 million, which is classified as Level 1 under the fair value hierarchy.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Tax Provision (Benefit)

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

	Year Ended December 31,
	2023			2022			2021
Current:
Domestic	$	15,422		$	16,182		$	26,528
Foreign		9,224			8,669			5,851
Total current		24,646			24,851			32,379
Deferred:
Domestic		(5,769	)		1,102			(1,161	)
Foreign		(509	)		(747	)		(174	)
Total deferred		(6,278	)		355			(1,335	)
Total income tax provision	$	18,368		$	25,206		$	31,044

Effective Income Tax Rate Reconciliation

Reconciliations between taxes at the U.S. Federal income tax rate and taxes at our effective income tax rate on earnings from continuing operations before income taxes are as follows (in thousands):

	Year Ended December 31,
	2023			2022			2021
U.S. Federal income tax rate of 21%	$	17,160		$	20,650		$	27,398
Increase (decrease) in tax rate resulting from:
State and local income taxes, net of federal income tax benefit		2,086			3,118			4,579
Change in valuation allowance		674			1,068			466
Income tax (benefit) attributable to foreign income		377			(53	)		(122	)
Other non-deductible items, net		(1,929	)		423			(1,277	)
Provision for income taxes	$	18,368		$	25,206		$	31,044

Components of Net Deferred Tax Assets and Liabilities

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

	December 31,
	2023			2022
Deferred tax assets:
Inventories	$	10,493		$	11,604
Allowance for customer returns		13,083			14,506
Accrued asbestos liabilities		20,758			17,208
Accrued salaries and benefits		11,816			12,048
Tax credit and NOL carryforwards		5,968			5,103
Allowance for expected credit losses		3,567			2,965
Other		17			215
		65,702			63,649
Valuation allowance		(3,830	)		(3,155	)
Total deferred tax assets		61,872			60,494
Deferred tax liabilities:
Intangible assets acquired, net of amortization		12,668			13,292
Depreciation		7,597			8,715
Interest rate swap agreement		990			1,299
Other		84			3,530
Total deferred tax liabilities		21,339			26,836
Net deferred tax assets	$	40,533		$	33,658

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 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):

	Year Ended December 31,
	2023			2022			2021
Net Earnings Attributable to SMP -
Earnings from continuing operations	$	63,144		$	73,042		$	99,353
Loss from discontinued operations		(28,996	)		(17,691	)		(8,467	)
Net earnings attributable to SMP	$	34,148		$	55,351		$	90,886
Basic Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	2.91		$	3.37		$	4.49
Loss from discontinued operations per common share		(1.34	)		(0.82	)		(0.39	)
Net earnings per common share attributable to SMP	$	1.57		$	2.55		$	4.10
Weighted average common shares outstanding		21,716			21,684			22,147
	2023			2022			2021
Diluted Net Earnings Per Common Share Attributable to SMP -
Earnings from continuing operations per common share	$	2.85		$	3.30		$	4.39
Loss from discontinued operations per common share		(1.31	)		(0.80	)		(0.37	)
Net earnings per common share attributable to SMP	$	1.54		$	2.50		$	4.02
Weighted average common shares outstanding		21,716			21,684			22,147
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock and performance-based stock		445			456			469
Weighted average common shares outstanding – Diluted		22,161			22,140			22,616

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):

	2023		2022		2021
Restricted and performance shares		280		292		269

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Industry Segment and Geographic Data (Tables)

12 Months Ended

Dec. 31, 2023

Industry Segment and Geographic Data [Abstract]

Sales and Operating Income by Operating Segments

The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1). 

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

	Year Ended December 31,
	2023			2022			2021
Net sales (a):
Vehicle Control	$	737,932		$	750,571		$	737,431
Temperature Control		337,754			351,237			324,080
Engineered Solutions		282,586			270,007			237,305
Other		—			—			—
Total net sales	$	1,358,272		$	1,371,815		$	1,298,816
Depreciation and Amortization:
Vehicle Control	$	13,877		$	14,075		$	14,840
Temperature Control		3,424			2,973			3,345
Engineered Solutions		9,966			9,557			7,390
Other		1,755			1,693			1,668
Total depreciation and amortization	$	29,022		$	28,298		$	27,243
Operating income (loss):
Vehicle Control	$	71,327		$	74,153		$	97,029
Temperature Control		17,343			26,459			30,077
Engineered Solutions		19,944			18,713			19,982
Other		(15,937	)		(15,190	)		(18,089	)
Total operating income	$	92,677		$	104,135		$	128,999
Investment in unconsolidated affiliates:
Vehicle Control	$	2,496		$	2,490		$	2,729
Temperature Control		19,711			27,557			28,518
Engineered Solutions		1,843			11,698			12,840
Other		—			—			—
Total investment in unconsolidated affiliates	$	24,050		$	41,745		$	44,087
Capital expenditures:
Vehicle Control	$	13,955		$	13,378		$	17,048
Temperature Control		1,899			3,973			2,130
Engineered Solutions		12,095			6,489			5,354
Other		684			2,116			1,343
Total capital expenditures	$	28,633		$	25,956		$	25,875
Total assets:
Vehicle Control	$	620,569		$	618,789		$	604,016
Temperature Control		274,657			254,137			234,771
Engineered Solutions		292,080			289,518			272,791
Other		105,741			92,485			86,383
Total assets	$	1,293,047		$	1,254,929		$	1,197,961

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

Reconciliation of Segment Operating Income to Net Earnings

Reconciliation of segment operating income to net earnings:

	Year Ended December 31,
	2023			2022			2021
	(In thousands)
Operating income	$	92,677		$	104,135		$	128,999
Other non-operating income, net		2,326			4,814			3,494
Interest expense		13,287			10,617			2,028
Earnings from continuing operations before income taxes		81,716			98,332			130,465
Provision for income taxes		18,368			25,206			31,044
Earnings from continuing operations		63,348			73,126			99,421
Discontinued operations, net of tax		(28,996	)		(17,691	)		(8,467	)
Net earnings	$	34,352		$	55,435		$	90,954

Long-lived Assets by Geographical Areas

	December 31,
	2023		2022		2021
Long-lived assets (a):	(In thousands)
United States	$	368,792	$	326,199	$	315,983
Asia		75,869		76,766		80,175
Europe		44,517		38,351		37,892
Mexico		13,262		10,355		12,119
Canada		5,851		7,161		4,461
Total long-lived assets	$	508,291	$	458,832	$	450,630

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

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Net Sales (Tables)

12 Months Ended

Dec. 31, 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 years ended December 31, 2023, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2023		2022		2021
Vehicle Control
Engine Management (Ignition, Emissions and Fuel Delivery)	$	450,180	$	454,571	$	444,196
Electrical and Safety		221,782		230,487		224,520
Wire Sets and Other		65,970		65,513		68,715
Total Vehicle Control		737,932		750,571		737,431
Temperature Control
AC System Components		237,756		245,484		231,466
Other Thermal Components		99,998		105,753		92,614
Total Temperature Control		337,754		351,237		324,080
Engineered Solutions
Commercial Vehicle		83,025		80,275		76,066
Construction/Agriculture		43,402		42,385		33,220
Light Vehicle		92,759		91,533		86,440
All Other		63,400		55,814		41,579
Total Engineered Solutions		282,586		270,007		237,305
Other		—		—		—
Total	$	1,358,272	$	1,371,815	$	1,298,816

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 years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31, 2023	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	659,570	$	319,904	$	168,878	$	—	$	1,148,352
Canada		36,088		17,081		25,689		—		78,858
Europe		916		8		59,266		—		60,190
Mexico		36,350		49		6,658		—		43,057
Asia		351		526		19,522		—		20,399
Other foreign		4,657		186		2,573		—		7,416
Total	$	737,932	$	337,754	$	282,586	$	—	$	1,358,272

Year Ended December 31, 2022	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	682,145	$	335,281	$	191,678	$	—	$	1,209,104
Canada		35,233		14,596		16,762		—		66,591
Europe		661		75		37,784		—		38,520
Mexico		26,019		401		4,897		—		31,317
Asia		2,408		63		16,715		—		19,186
Other foreign		4,105		821		2,171		—		7,097
Total	$	750,571	$	351,237	$	270,007	$	—	$	1,371,815

Year Ended December 31, 2021	Vehicle Control		Temperature Control		Engineered Solutions		Other		Total
Geographic Area:
United States	$	677,684	$	309,247	$	147,447	$	—	$	1,134,378
Canada		35,063		13,585		13,912		—		62,560
Europe		771		153		26,759		—		27,683
Mexico		19,741		358		5,547		—		25,646
Asia		144		101		40,771		—		41,016
Other foreign		4,028		636		2,869		—		7,533
Total	$	737,431	$	324,080	$	237,305	$	—	$	1,298,816

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies [Abstract]

Rent Expense

Total rent expense for the three years ended December 31, 2023 was as follows (in thousands):

	Total (1)		Real Estate		Other
2023	$	19,706	$	15,735	$	3,971
2022		14,135		11,385		2,750
2021		12,065		9,500		2,565

(1) Includes expenses of approximately $3.3 million, $2.7 million, and $2 million for the years ended December 31, 2023, 2022 and 2021, 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.

Changes in Product Warranties

The following table provides the changes in our product warranties:

	December 31,
	2023			2022
	(In thousands)
Balance, beginning of period	$	19,667		$	17,463
Liabilities accrued for current year sales		120,027			112,477
Settlements of warranty claims		(118,560	)		(110,273	)
Balance, end of period	$	21,134		$	19,667

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Summary of Significant Accounting Policies, Principles of Consolidation (Details)	12 Months Ended
	Dec. 31, 2023 Segment
Principles of Consolidation [Abstract]
Number of reportable segments	2
Equity ownership in entities included in consolidated financial statements, minimum	50.00%

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Summary of Significant Accounting Policies, Reportable Segments (Details)	12 Months Ended
	Dec. 31, 2023 Segment
Reportable Segments [Abstract]
Number of operating segments	3

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Summary of Significant Accounting Policies, Inventories (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Inventory [Abstract]
Inventory reserve	$ 42.9	$ 42.5

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Summary of Significant Accounting Policies, Property, Plant and Equipment (Details)	Dec. 31, 2023
Buildings [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	25 years
Buildings [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	33 years 6 months
Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	10 years
Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	25 years
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	12 years
Tools, Dies and Auxiliary Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	3 years
Tools, Dies and Auxiliary Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	8 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life	12 years

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Summary of Significant Accounting Policies, Product Warranty and Overstock Returns and Accounting for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Product Warranty and Overstock Returns [Abstract]
Product warranty period	90 days
Accounting for Income Taxes [Abstract]
Valuation allowance	$ 3,830	$ 3,155
Net deferred tax asset	$ 40,533	$ 33,658

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Summary of Significant Accounting Policies, Concentrations of Credit Risk and Foreign Cash Balances (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) Customer	Dec. 31, 2022 USD ($) Customer	Dec. 31, 2021 USD ($)
Concentration Risk [Abstract]
Number of customers who filed a petition | Customer	1	1
Customer bankruptcy charge	$ 0	$ 7,002	$ 0
Foreign Cash Balances [Abstract]
Foreign cash balance	$ 30,500	18,500
Customer Concentration Risk [Member]
Concentration Risk [Abstract]
Number of largest individual customers | Customer	3
Selling, General and Administrative Expenses [Member]
Concentration Risk [Abstract]
Customer bankruptcy charge		$ 7,000

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Business Acquisitions and Investments, Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (Details) $ in Thousands			6 Months Ended	12 Months Ended
		Jul. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jul. 31, 2023 CNY (¥)	Mar. 31, 2018 USD ($)	Mar. 31, 2018 CNY (¥)	Apr. 30, 2014 USD ($)
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates				$ 24,050	$ 41,745	$ 44,087
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill				134,729	132,087	131,652
Cash paid for the acquisition of equity interest				$ 3,954	$ 1,934	$ 125,419
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Percentage of equity interest acquired		15.00%		80.00%	65.00%		15.00%	15.00%	15.00%	50.00%
Investments in unconsolidated affiliates		$ 4,000		$ 0	$ 18,410		¥ 27,378,290	$ 4,200	¥ 26,475,583	$ 14,000
Total purchase consideration	[1]	21,725
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Cash and cash equivalents		6,779
Receivables		5,912
Inventory		5,945
Other current assets		528
Property, plant, and equipment, net		2,924
Operating lease right-of-use assets		4,372		$ 4,400
Intangible assets	[2]	532
Goodwill		2,208
Long term investments and other assets		7,257
Current liabilities		(6,004)
Noncurrent operating lease liabilities		(3,455)
Subtotal		26,998
Fair value of acquired noncontrolling interest		(5,273)
Net assets acquired		21,725
Equity investment interest held			$ 17,700
Cash paid for the acquisition of equity interest		4,000
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member] | Temperature Control Segment [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill		1,200
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member] | Engineered Solutions Segment [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill		$ 1,000
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member] | Customer Relationships [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Estimated useful life of intangible assets		10 days					10 days
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Intangible assets		$ 400
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member] | Capitalized Software [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Intangible assets		$ 100

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

[2] Intangible assets consists of customer relationships of $0.4 million and capitalized software of $0.1 million.

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Business Acquisitions and Investments, Investment in Foshan Che Yijia New Energy Technology Co., Ltd (Details) ¥ in Millions	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 CNY (¥)	Sep. 30, 2022	Dec. 31, 2021 USD ($)	Aug. 31, 2019 USD ($)
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	$ 24,050,000	$ 41,745,000				$ 44,087,000
Foshan Che Yijia New Energy Technology Co., Ltd. [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Percentage of equity interest acquired	33.00%		3.55%	3.55%	29.00%		29.00%
Investments in unconsolidated affiliates	$ 3,128,000	$ 4,098,000	$ 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		12 Months Ended
		Oct. 31, 2022 USD ($)	Oct. 31, 2022 EUR (€)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Oct. 31, 2022 EUR (€)
Allocation of the Purchase Price, Assets Acquired and Liabilities Assumed [Abstract]
Business acquisition annual sales	[1]			$ 1,358,272	$ 1,371,815	$ 1,298,816
Assets acquired and liabilities assumed [Abstract]
Goodwill				134,729	132,087	131,652
Cash acquired				6,779	$ 0	$ 0
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
Assets acquired and liabilities assumed [Abstract]
Purchase Price		3,176
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				$ 5,000
Kade [Member] | Customer Relationships [Member]
Assets acquired and liabilities assumed [Abstract]
Estimated useful life of intangible assets				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		12 Months Ended
		Dec. 31, 2023		Dec. 31, 2022		Dec. 31, 2021
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period		$ 1,521		$ 79
Restructuring and integration costs provided for during period		2,642	[1],[2]	1,891	[1]	$ 392
Cash payments		(2,380)		(160)
Reclassification of environmental and other liabilities		(92)		(289)
Foreign currency exchange rate changes		38
Exit activity liability, end of period		1,729		1,521		79
Reclassification of environment liability		100		200
Vehicle Control Segment [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during period		1,300
Temperature Control Segment [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during period		1,100
Engineered Solutions Segment [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during period		200
Soot Sensor Product Line Relocation [Member]
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period		0
Cash payments				(144)
Exit activity liability, end of period				0
Plant Rationalization Programs [Member]
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period		0
Cash payments		(16)
Exit activity liability, end of period				0
Cost Reduction Initiative [Member]
Restructuring and integration activities [Roll Forward]
Restructuring and integration costs provided for during period		2,500		1,500
Cash payments		(2,400)
Restructuring Costs [Abstract]
Sales force reduction costs		700		900
Employee severance costs		1,300		600
Expenses related to relocation of machinery and equipment		500
Additional restructuring costs		500
Workforce Reduction [Member]
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period		1,521		79
Restructuring and integration costs provided for during period	[1]	1,973	[2]	1,521
Cash payments		(1,803)		(16)
Reclassification of environmental and other liabilities		0		(63)
Foreign currency exchange rate changes		38
Exit activity liability, end of period		1,729		1,521		79
Other Exit Costs [Member]
Restructuring and integration activities [Roll Forward]
Exit activity liability, beginning of period		0		0
Restructuring and integration costs provided for during period	[1]	669	[2]	370
Cash payments		(577)		(144)
Reclassification of environmental and other liabilities		(92)		(226)
Foreign currency exchange rate changes		0
Exit activity liability, end of period		$ 0		$ 0		$ 0

[1] Included in restructuring and integration costs in 2023 and 2022 is a $0.1 million and $0.2 million increase, respectively, in environmental cleanup costs related to ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.  The environmental liability has been reclassed to accrued liabilities as of December 31, 2023 and 2022, respectively.

[2] Restructuring and integration expenses incurred during the year ended December 31, 2023 consist of $1.3 million in our Vehicle Control segment, $1.1 million in our Temperature Control segment and $0.2 million in our Engineered Solutions segment.

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Sale of Receivables (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Sale of Receivables [Abstract]
Sale of receivables to financial institutions	$ 830.8	$ 813.7
Receivables not yet collected	4.5	0.0
Charge related to sale of receivables	$ 46.0	$ 32.0	$ 11.5

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Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Inventories [Abstract]
Finished goods	$ 302,557	$ 324,362
Work-in-process	18,503	14,099
Raw materials	186,015	190,254
Subtotal	507,075	528,715
Unreturned customer inventories	18,240	19,695
Total inventories	$ 525,315	$ 548,410

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, plant and equipment [Abstract]
Total property, plant and equipment	$ 381,528	$ 346,324
Less accumulated depreciation	259,656	239,176
Total property, plant and equipment, net	121,872	107,148
Depreciation expense	19,700	19,000	$ 18,200
Land, Buildings and Improvements [Member]
Property, plant and equipment [Abstract]
Total property, plant and equipment	45,710	42,651
Machinery and Equipment [Member]
Property, plant and equipment [Abstract]
Total property, plant and equipment	177,337	166,149
Tools, Dies and Auxiliary Equipment [Member]
Property, plant and equipment [Abstract]
Total property, plant and equipment	73,494	67,017
Furniture and Fixtures [Member]
Property, plant and equipment [Abstract]
Total property, plant and equipment	33,212	32,084
Leasehold Improvements [Member]
Property, plant and equipment [Abstract]
Total property, plant and equipment	16,418	15,083
Construction-in-Progress [Member]
Property, plant and equipment [Abstract]
Total property, plant and equipment	$ 35,357	$ 23,340

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Leases (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jul. 31, 2023
Quantitative Lease Disclosures [Abstract]
Renewal option period		5 years
Assets [Abstract]
Operating lease right-of-use assets		$ 100,065	$ 49,838
Liabilities [Abstract]
Sundry payables and accrued expenses		17,139	10,763
Noncurrent operating lease liabilities		88,974	40,709
Total operating lease liabilities		$ 106,113	$ 51,472
Operating Leases [Abstract]
Weighted average remaining lease term		8 years 3 months 18 days	7 years
Weighted average discount rate		4.80%	3.70%
Lease Expense [Abstract]
Operating lease expense	[1]	$ 16,434	$ 11,411
Excluded non-lease expenses		3,300	2,700	$ 2,000
Cash paid for the amounts included in the measurement of lease liabilities [Abstract]
Operating cash flows from operating leases		12,099	11,293
Right-of-use assets obtained in exchange for new lease obligations [Abstract]
Operating leases	[2]	66,014	31,064
Minimum Lease Payments [Abstract]
2024		17,607
2025		16,145
2026		14,814
2027		13,671
2028		11,415
Thereafter		58,059
Total lease payments		131,711
Less: Interest		(25,598)
Total operating lease liabilities		$ 106,113	$ 51,472
Maximum [Member]
Quantitative Lease Disclosures [Abstract]
Remaining operating lease terms		11 years
Texas [Member]
Right-of-use assets obtained in exchange for new lease obligations [Abstract]
Right-of-use assets related to lease modifications and extension		$ 27,800
Kansas [Member]
Right-of-use assets obtained in exchange for new lease obligations [Abstract]
Right-of-use assets related to lease modifications and extension		26,100
Mexico [Member]
Right-of-use assets obtained in exchange for new lease obligations [Abstract]
Right-of-use assets related to lease modifications and extension		3,700
Gwo Yng [Member]
Right-of-use assets obtained in exchange for new lease obligations [Abstract]
Right-of use assets obtained in business acquisitions		$ 4,400			$ 4,372

[1] Excludes expenses of approximately $3.3 million, $2.7 million and $2 million for the years ended December 31, 2023, 2022, and 2021, 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] During the year ended December 31, 2023 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; $26.1 million of right-of-use assets related to the new distribution center in Shawnee, Kansas; $4.4 million of right-of-use assets obtained in Gwo Yng step-acquisition; and $3.7 million of right-of-use assets related to our Reynosa, Mexico lease renewal.

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Goodwill and Other Intangible Assets, Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Goodwill by operating segment [Abstract]
Goodwill impairment charge	$ 0
Goodwill gross, beginning balance	170,575	$ 170,140
Goodwill accumulated impairment losses, Beginning balance	(38,488)	(38,488)
Goodwill net, beginning balance	132,087	131,652
Goodwill foreign currency exchange rate change	434	(331)
Goodwill gross, ending balance	173,217	170,575
Goodwill accumulated impairment losses, Ending balance	(38,488)	(38,488)
Goodwill net, ending balance	134,729	132,087
Kade Trading GmbH [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition		766
Gwo Yng [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition	2,208
Vehicle Control [Member]
Goodwill by operating segment [Abstract]
Goodwill gross, beginning balance	129,008	129,318
Goodwill accumulated impairment losses, Beginning balance	(38,488)	(38,488)
Goodwill net, beginning balance	90,520	90,830
Goodwill foreign currency exchange rate change	286	(310)
Goodwill gross, ending balance	129,294	129,008
Goodwill accumulated impairment losses, Ending balance	(38,488)	(38,488)
Goodwill net, ending balance	90,806	90,520
Vehicle Control [Member] | Kade Trading GmbH [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition		0
Vehicle Control [Member] | Gwo Yng [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition	0
Temperature Control [Member]
Goodwill by operating segment [Abstract]
Goodwill gross, beginning balance	11,474	10,839
Goodwill accumulated impairment losses, Beginning balance	0	0
Goodwill net, beginning balance	11,474	10,839
Goodwill foreign currency exchange rate change	42	53
Goodwill gross, ending balance	12,730	11,474
Goodwill accumulated impairment losses, Ending balance	0	0
Goodwill net, ending balance	12,730	11,474
Temperature Control [Member] | Kade Trading GmbH [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition		582
Temperature Control [Member] | Gwo Yng [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition	1,214
Engineered Solutions [Member]
Goodwill by operating segment [Abstract]
Goodwill gross, beginning balance	30,093	29,983
Goodwill accumulated impairment losses, Beginning balance	0	0
Goodwill net, beginning balance	30,093	29,983
Goodwill foreign currency exchange rate change	106	(74)
Goodwill gross, ending balance	31,193	30,093
Goodwill accumulated impairment losses, Ending balance	0	0
Goodwill net, ending balance	31,193	30,093
Engineered Solutions [Member] | Kade Trading GmbH [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition		$ 184
Engineered Solutions [Member] | Gwo Yng [Member]
Goodwill by operating segment [Abstract]
Goodwill acquisition	$ 994

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Goodwill and Other Intangible Assets, Intangible Assets (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		$ 186,899	$ 185,962
Less accumulated amortization	[1]	(95,681)	(86,945)
Net acquired intangible assets		91,218	99,017
Amortization of acquired intangible assets [Abstract]
Amortization expense		8,500	8,600	$ 8,700
Estimated amortization expense in year 2024		8,500
Estimated amortization expense in year 2025		8,500
Estimated amortization expense in years 2026 through 2041		8,500
Estimated amortization expense in years 2027 through 2041		8,400
Estimated amortization expense in years 2028 through 2041		54,700
Customer Relationships [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		159,641	158,717
Patents, Developed Technology and Intellectual Property [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		14,123	14,123
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		8,880	8,880
Intangible assets acquired [Abstract]
Amount of acquired indefinite-lived intangible assets		2,600
Non-Compete Agreements [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		3,295	3,282
Supply Agreements [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		800	800
Leaseholds [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Total acquired intangible assets		160	160
Computer Software [Member]
Other Intangible Assets [Abstract]
Other intangible assets		19,100	18,700
Accumulated computer software amortization		(18,000)	(17,200)
Amortization of computer software		$ 800	$ 700	$ 300
Computer Software [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life of intangible assets		3 years
Computer Software [Member] | Maximum [Member]
Other Intangible Assets [Abstract]
Estimated useful life of intangible assets		10 years

[1] Applies to all intangible assets, except for a related trademark/trade name totaling $2.6 million, which has an indefinite useful life and, as such, is not being amortized.

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Investments in Unconsolidated Affiliates (Details)	12 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jul. 31, 2023 USD ($)	Jul. 31, 2023 CNY (¥)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 CNY (¥)	Sep. 30, 2022	Dec. 31, 2021 USD ($)	Aug. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2018 CNY (¥)	Nov. 30, 2017 USD ($)	Apr. 30, 2014 USD ($)	Jan. 31, 2013 USD ($)
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	$ 24,050,000	$ 41,745,000						$ 44,087,000
Outstanding borrowings	156,211,000	239,620,000
Foshan FGD SMP Automotive Compressor Co. Ltd [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	18,426,000	16,747,000										$ 12,500,000
Percentage of equity interest acquired												50.00%
Purchases from equity method investment	44,100,000	43,500,000
Foshan Che Yijia New Energy Technology Co., Ltd. [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	$ 3,128,000	4,098,000			$ 242,000	¥ 1,700,000			$ 5,100,000
Percentage of equity interest acquired	33.00%				3.55%	3.55%	29.00%		29.00%
Maximum borrowing capacity								$ 4,000,000
Interest rate								5.00%
Maturity date	Nov. 30, 2023
Outstanding borrowings	$ 4,000,000
Orange Electronic Co., Ltd [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	2,496,000	$ 2,490,000												$ 6,300,000
Percentage of equity interest acquired		19.40%
Purchases from equity method investment	3,200,000	$ 4,500,000
Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. [Member]
Investments in and Advances to Affiliates, Balance [Abstract]
Investments in unconsolidated affiliates	$ 0	$ 18,410,000	$ 4,000,000	¥ 27,378,290						$ 4,200,000	¥ 26,475,583		$ 14,000,000
Percentage of equity interest acquired	80.00%	65.00%	15.00%	15.00%						15.00%	15.00%		50.00%
Purchases from equity method investment	$ 10,300,000	$ 16,200,000

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Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Other Assets [Abstract]
Deferred compensation	$ 23,893	$ 20,190
Long-term investments	7,468	0
Noncurrent portion of interest rate swap fair value	1,944	3,091
Deferred financing costs, net	1,125	1,603
Other	837	2,626
Total other assets, net	$ 35,267	$ 27,510

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Credit Facilities and Long-Term Debt, Total Debt Outstanding (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt Instruments [Abstract]
Total debt	$ 156,211	$ 239,620
Current maturities of debt	5,029	55,031
Long-term debt	151,182	184,589
Credit Facility - Term Loan Due 2027 [Member]
Debt Instruments [Abstract]
Total debt	92,500	97,500
Current maturities of debt	5,000
Long-term debt	87,500
Credit Facility - Revolver Due 2027 [Member]
Debt Instruments [Abstract]
Total debt	63,500	142,000
Current maturities of debt	0
Long-term debt	63,500
Other [Member]
Debt Instruments [Abstract]
Total debt	211	$ 120
Current maturities of debt	29
Long-term debt	$ 182

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Credit Facilities and Long-Term Debt, Term Loan and Revolving Credit Facilities (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) Installment	Dec. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)
Line of Credit Facility [Abstract]
Current portion of debt	$ 0	$ 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] | SOFR [Member]
Line of Credit Facility [Abstract]
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		$ 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	$ 156,000
Current portion of debt	5,000	55,000
Long-term debt	151,000	184,500
Outstanding letters of credit	$ 2,300
Weighted average interest rate	5.00%
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 nine months
Outstanding borrowings under credit facility	$ 156,000	237,000
Weighted average interest rate	5.00%
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	$ 100
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	12 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 PLN (zł)
Line of Credit Facility [Abstract]
Maximum borrowing capacity			$ 7.6	zł 30
Threshold percentage of borrowing capacity	85.00%
Threshold borrowing capacity limit	$ 6.5
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	1.00%
1M EURIBOR [Member]
Line of Credit Facility [Abstract]
Basis spread on variable rate	1.00%
Mid-Point of Fed Target Range [Member]
Line of Credit Facility [Abstract]
Basis spread on variable rate	1.25%

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Credit Facilities and Long-Term Debt, Maturities of Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Maturities of Debt [Abstract]
2024	$ 5,029
2025	5,031
2026	7,549
2027	138,602
Total debt	156,211	$ 239,620
Less: current maturities	(5,029)	(55,031)
Long-term debt	151,182	184,589
Revolving Credit Facility [Member]
Maturities of Debt [Abstract]
2024	0
2025	0
2026	0
2027	63,500
Total debt	63,500	142,000
Less: current maturities	0
Long-term debt	63,500
Term Loan Facility [Member]
Maturities of Debt [Abstract]
2024	5,000
2025	5,000
2026	7,500
2027	75,000
Total debt	92,500	97,500
Less: current maturities	(5,000)
Long-term debt	87,500
Polish Overdraft Facility and Other Debt [Member]
Maturities of Debt [Abstract]
2024	29
2025	31
2026	49
2027	102
Total debt	211	$ 120
Less: current maturities	(29)
Long-term debt	$ 182

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Credit Facilities and Long-Term Debt, Deferred Financing Costs (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Deferred Financing Costs [Abstract]
Deferred financing costs	$ 1.6	$ 2.1
Deferred Finance Costs, Amortization [Abstract]
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		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		$ 610,020
Other comprehensive income before reclassifications		8,264	$ (4,312)
Amounts reclassified from accumulated other comprehensive income		(1,768)	11
Other comprehensive income, net		6,496	(4,301)
Balance attributable to SMP		635,064	610,020
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		1,200	5,200
Unrecognized gain relating to change in fair value of cash flow interest rate hedge, net of tax		900	3,800
Unrecognized gain, net of cash settlements		2,400	42
Unrecognized gain, net of cash settlements, net of tax		1,700	31
Accumulated Other Comprehensive Income (Loss) [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		(12,470)	(8,169)
Balance attributable to SMP		(5,974)	(12,470)
Foreign Currency Translation [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		(16,330)	(8,221)
Other comprehensive income before reclassifications		7,433	(8,109)
Amounts reclassified from accumulated other comprehensive income		0	0
Other comprehensive income, net		7,433	(8,109)
Balance attributable to SMP		(8,897)	(16,330)
Unrecognized Postretirement Benefit Costs (Credit) [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		37	52
Other comprehensive income before reclassifications		0	0
Amounts reclassified from accumulated other comprehensive income		(13)	(15)
Other comprehensive income, net		(13)	(15)
Balance attributable to SMP		24	37
Unrealized Derivative Gains (Losses) [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Balance attributable to SMP		3,823	0
Other comprehensive income before reclassifications	[1]	831	3,797
Amounts reclassified from accumulated other comprehensive income		(1,755)	26
Other comprehensive income, net		(924)	3,823
Balance attributable to SMP		$ 2,899	$ 3,823

[1] Consists of the unrecognized loss relating to the change in fair value of the cash flow interest rate hedge of $1.2 million ($0.9 million, net of tax) plus cash settlement receipts of $2.4 million ($1.7 million, net of tax) in the year ended December 31, 2023; and the unrecognized gain relating to the change in fair value of the cash flow interest rate hedge of $5.2 million ($3.8 million, net of tax) minus cash settlement payments of $42,000 ($31,000, net of tax) in the year December 31, 2022.

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Accumulated Other Comprehensive Income, Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Details About Accumulated Other Comprehensive Income Components [Abstract]
Interest expense		$ 13,287	$ 10,617	$ 2,028
Other non-operating income, net		2,326	4,814	3,494
Earnings from continuing operations before taxes		81,716	98,332	130,465
Income tax expense (benefit)		18,368	25,206	31,044
Net earnings attributable to SMP	[1]	34,148	55,351	$ 90,886
Reclassification out of Accumulated Other Comprehensive Income [Member]
Details About Accumulated Other Comprehensive Income Components [Abstract]
Earnings from continuing operations before taxes		(2,394)	10
Income tax expense (benefit)		(626)	(1)
Net earnings attributable to SMP		(1,768)	11
Unrealized Derivative Gains (Losses) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Details About Accumulated Other Comprehensive Income Components [Abstract]
Interest expense	[2]	(2,372)	35
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]	$ (22)	$ (25)

[1] Throughout this Form 10-K, “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 (expense), net in our consolidated statements of operations (see Note 15, “Employee Benefits,” for additional information).

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Stockholders' Equity (Details) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2022 shares	Dec. 31, 2023 USD ($) Vote $ / shares shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($) shares	Jul. 31, 2022 USD ($)	Oct. 31, 2021 USD ($)	Feb. 28, 2021 USD ($)	Mar. 31, 2020 USD ($)
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Stock repurchased during period			$ 29,656	$ 26,862
Preferred Stock [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, shares authorized (in shares) | shares		500,000
Preferred stock, par value (in dollars per share) | $ / shares		$ 20
Preferred stock, shares outstanding (in shares) | shares	0	0	0
Series A Preferred Stock [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, shares authorized (in shares) | shares		30,000
Number of votes per share | Vote		1,000
Stock Repurchase Program 2020 [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Stock repurchase program, authorized amount								$ 20,000
Stock repurchased during period (in shares) | shares				150,273
Stock repurchased during period				$ 6,500
Stock Repurchase Program 2021, February [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Stock repurchase program, authorized amount							$ 20,000
Stock repurchased during period (in shares) | shares			464,992
Stock repurchased during period			$ 20,000
Stock Repurchase Program 2021, October [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Stock repurchase program, authorized amount						$ 30,000
Stock repurchased during period (in shares) | shares		692,067	7,000
Stock repurchased during period		$ 29,700	$ 300
Stock Repurchase Program 2022, July [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Stock repurchase program, authorized amount					$ 30,000
Stock repurchased during period (in shares) | shares	0

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Stock-Based Compensation Plans (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) Type $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares
Restricted Stock and Performance Share Grants [Abstract]
Number of types of restricted stock | Type	2
Compensation expense, gross | $	$ 6,598	$ 8,178	$ 9,479
Restricted Shares [Member] | Minimum [Member]
Restricted Stock and Performance Share Grants [Abstract]
Expiration of vesting period	3 years
Restricted Shares [Member] | Employees [Member]
Restricted Stock and Performance Share Grants [Abstract]
Estimated forfeitures	5.00%
Restricted Shares [Member] | Executives [Member]
Restricted Stock and Performance Share Grants [Abstract]
Estimated forfeitures	0.00%
Restricted Shares [Member] | Directors [Member]
Restricted Stock and Performance Share Grants [Abstract]
Estimated forfeitures	0.00%
Restricted Shares [Member] | Age 60 [Member] | Executives [Member]
Restricted Stock and Performance Share Grants [Abstract]
Vesting percentage	25.00%
Vesting period before reaching age limit	2 months
Restricted Shares [Member] | Age 63 [Member] | Executives [Member]
Restricted Stock and Performance Share Grants [Abstract]
Vesting percentage	25.00%
Vesting period before reaching age limit	2 months
Restricted Shares [Member] | Age 65 [Member] | Executives [Member]
Restricted Stock and Performance Share Grants [Abstract]
Vesting percentage	100.00%
Vesting period before reaching age limit	2 months
Performance-Based Shares [Member]
Restricted Stock and Performance Share Grants [Abstract]
Measuring period for performance-based shares	3 years
Performance-Based Shares [Member] | Minimum [Member]
Restricted Stock and Performance Share Grants [Abstract]
Expiration of vesting period	3 years
Restricted and Performance-Based Shares [Member]
Restricted Stock and Performance Share Grants [Abstract]
Compensation expense, gross | $	$ 6,200	7,600	9,100
Compensation expense, net of tax | $	4,800	5,700	$ 6,900
Unamortized compensation expense | $	$ 13,300	$ 14,900
Restricted and performance-based stock, shares [Roll Forward]
Beginning of period (in shares)	880,829	807,019
Granted (in shares)	230,875	246,325
Vested (in shares)	(248,065)	(190,082)
Performance Shares Target Adjustment (in shares)	29,137	25,317
Forfeited (in shares)	(11,800)	(7,750)
End of period (in shares)	880,976	880,829	807,019
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	$ 34.92
Granted (in dollars per share) | $ / shares	27	28.44
Vested (in dollars per share) | $ / shares	36.3	41.71
Performance Shares Target Adjustment (in dollars per share) | $ / shares	36.3	42.21
Forfeited (in dollars per share) | $ / shares	35.36	40.73
End of period (in dollars per share) | $ / shares	$ 29.48	$ 31.79	$ 34.92
Weighted-average grant date fair value | $	$ 26,000	$ 28,000	$ 28,200
Restricted and Performance-Based Shares [Member] | Employees [Member]
Restricted Stock and Performance Share Grants [Abstract]
Weighted average period of recognition for unrecognized compensation expense	4 years 1 month 6 days	4 years 3 months 18 days
Restricted and Performance-Based Shares [Member] | Directors [Member]
Restricted Stock and Performance Share Grants [Abstract]
Weighted average period of recognition for unrecognized compensation expense	3 months 18 days	3 months 18 days
Restricted and Performance-Based Shares [Member] | Executives and Directors [Member] | Minimum [Member]
Restricted Stock and Performance Share Grants [Abstract]
Holding period for restricted and performance shares issued	1 year
Post vesting holding period for restricted and performance shares issued	1 year
Restricted and Performance-Based Shares [Member] | Executives and Directors [Member] | Maximum [Member]
Restricted Stock and Performance Share Grants [Abstract]
Holding period for restricted and performance shares issued	2 years
Post vesting holding period for restricted and performance shares issued	2 years
2016 Omnibus Incentive Plan [Member] | Restricted Shares [Member]
Restricted and performance-based stock, shares [Roll Forward]
Granted (in shares)	165,125
2016 Omnibus Incentive Plan [Member] | Performance-Based Shares [Member]
Restricted and performance-based stock, shares [Roll Forward]
Granted (in shares)	65,750
2016 Omnibus Incentive Plan [Member] | Restricted and Performance-Based Shares [Member]
Restricted Stock and Performance Share Grants [Abstract]
Restricted and performance-based stock grants issued, net of forfeitures (in shares)	1,633,549
Common stock available for future grants (in shares)	416,451
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
2016 Omnibus Incentive Plan [Member] | Nonemployee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Abstract]
Shares authorized for issuance (in shares)	350,000

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Employee Benefits (Details) $ in Thousands	1 Months Ended		12 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) Employee shares	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Defined Contribution Plans [Abstract]
U.S defined contribution			$ 10,510	$ 10,180	$ 9,763
Employee Stock Ownership Plan (ESOP), Debt Structure [Abstract]
Provision for expense in connection with ESOP			$ 3,000	2,300	2,500
Postretirement Medical Benefits [Abstract]
Number of former union employees covered by the plan | Employee			14
Supplemental Executive Retirement Plan [Member]
Employee Stock Ownership Plan (ESOP), Debt Structure [Abstract]
Employer discretionary contribution amount	$ 800	$ 800	$ 600
Benefit obligation outstanding			0	0
Net periodic benefit cost			$ 0	$ 0	$ 0
Employee Stock Ownership Plan and Trust (ESOP) [Member]
Employee Stock Ownership Plan (ESOP), Debt Structure [Abstract]
Additional shares contributed to ESOP (in shares) | shares			72,800
Shares released from trust (in shares) | shares			72,800
Total remaining balance of shares in the ESOP (in shares) | shares			200

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Other Non-Operating Income (Expense), Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Other Non-Operating Income (Expense), Net [Abstract]
Interest and dividend income	$ 517	$ 209	$ 49
Equity income from joint ventures	2,070	3,464	3,295
Gain (loss) on foreign exchange	(776)	334	(257)
Other non-operating income, net	515	807	407
Total other non-operating income, net	$ 2,326	$ 4,814	$ 3,494

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Derivative Financial Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Notional Disclosures [Abstract]
Derivative fair value	$ 1,944	$ 3,091
Interest Rate Swap Agreement [Member]
Notional Disclosures [Abstract]
Derivative term of contract	7 years
Borrowings under credit agreement	$ 100,000	100,000	$ 100,000
Term of variable rate	1 month
Fixed interest rate	2.683%
Derivative, credit spread adjustment percentage	0.10%
Margin on variable rate	1.25%
Interest Rate Swap [Member]
Notional Disclosures [Abstract]
Derivative term of contract	7 years
Derivative, notional amount			$ 100,000
Derivative contract, maturity date	May 31, 2029
Derivative fair value	$ 3,900	$ 5,200

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Fair Value Measurements (Details) - USD ($) $ in Thousands		Dec. 31, 2023	Dec. 31, 2022
LEVEL 1 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash		$ 29,500	$ 21,200
LEVEL 2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash equivalents		3,000
Fair Value [Member] | LEVEL1/2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash and cash equivalents	[1]	32,526	21,150
Fair Value [Member] | LEVEL 1 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Deferred compensation		23,893	20,190
Short term borrowings		5,029	55,031
Long-term debt		151,182	184,589
Fair Value [Member] | LEVEL 2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash flow interest rate swap		3,939	5,174
Long-term investments		7,468	0
Carrying Amount [Member] | LEVEL1/2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash and cash equivalents	[1]	32,526	21,150
Carrying Amount [Member] | LEVEL 1 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Deferred compensation		23,893	20,190
Short term borrowings		5,029	55,031
Long-term debt		151,182	184,589
Carrying Amount [Member] | LEVEL 2 [Member]
Fair Value, Net Asset (Liability) [Abstract]
Cash flow interest rate swap		3,939	5,174
Long-term investments		$ 7,468	$ 0

[1] As of December 31, 2023 cash and cash equivalents consist of cash of $29.5 million and cash equivalents of $3 million, which are classified as Level 1 and Level 2, respectively, under the fair value hierarchy.  Cash and cash equivalents at December 31, 2022 consists solely of cash of $21.2 million, which is classified as Level 1 under the fair value hierarchy.

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Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current [Abstract]
Domestic	$ 15,422	$ 16,182	$ 26,528
Foreign	9,224	8,669	5,851
Total current	24,646	24,851	32,379
Deferred [Abstract]
Domestic	(5,769)	1,102	(1,161)
Foreign	(509)	(747)	(174)
Total deferred	(6,278)	355	(1,335)
Provision for income taxes	18,368	25,206	31,044
Reconciliations Between Taxes at the U.S. Federal Income Tax Rate and Taxes at our Effective Income Tax Rate on Earnings [Abstract]
U.S. Federal income tax rate of 21%	17,160	20,650	27,398
Increase (decrease) in tax rate resulting from [Abstract]
State and local income taxes, net of federal income tax benefit	2,086	3,118	4,579
Change in valuation allowance	674	1,068	466
Income tax (benefit) attributable to foreign income	377	(53)	(122)
Other non-deductible items, net	(1,929)	423	(1,277)
Provision for income taxes	$ 18,368	$ 25,206	$ 31,044
U.S. Federal income tax rate	21.00%	21.00%	21.00%
Deferred tax assets [Abstract]
Inventories	$ 10,493	$ 11,604
Allowance for customer returns	13,083	14,506
Accrued asbestos liabilities	20,758	17,208
Accrued salaries and benefits	11,816	12,048
Tax credit and NOL carryforwards	5,968	5,103
Allowance for expected credit losses	3,567	2,965
Other	17	215
Deferred tax assets, gross	65,702	63,649
Valuation allowance	(3,830)	(3,155)
Total deferred tax assets	61,872	60,494
Deferred tax liabilities [Abstract]
Intangible assets acquired, net of amortization	12,668	13,292
Depreciation	7,597	8,715
Interest rate swap agreement	990	1,299
Other	84	3,530
Total deferred tax liabilities	21,339	26,836
Net deferred tax assets	40,533	33,658
Valuation allowance, remaining amount	3,800
Income Tax Contingency [Abstract]
Recognized uncertain tax positions	$ 0	$ 0	$ 0
Foreign Tax Authority [Member]
Operating Loss Carryforwards [Abstract]
Operating loss carryforwards, expiration date	Dec. 31, 2032
Tax credit carryforward	$ 3,800
Foreign Tax Authority [Member] | Minimum [Member]
Income Tax Contingency [Abstract]
Period for statutes of limitations	2 years
Foreign Tax Authority [Member] | Maximum [Member]
Income Tax Contingency [Abstract]
Period for statutes of limitations	6 years
State and Local [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2019 2020 2021 2022
Canada Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2019 2020 2021 2022
Hong Kong Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2018 2019 2020 2021 2022
State Administration of Taxation, China [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2021 2022
Mexican Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2019 2020 2021 2022
Poland Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2018 2019 2020 2021 2022
Hungary Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2018 2019 2020 2021 2022
U.K. Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2017 2018 2019 2020 2021 2022
Germany Tax Authority [Member]
Income Tax Contingency [Abstract]
Open Tax Years	2019 2020 2021 2022

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Net Earnings Attributable to SMP [Abstract]
Earnings from continuing operations		$ 63,144	$ 73,042	$ 99,353
Loss from discontinued operations		(28,996)	(17,691)	(8,467)
Net earnings attributable to SMP	[1]	$ 34,148	$ 55,351	$ 90,886
Basic Net Earnings Per Common Share Attributable to SMP [Abstract]
Earnings from continuing operations per common share (in dollars per share)		$ 2.91	$ 3.37	$ 4.49
Loss from discontinued operations per common share (in dollars per share)		(1.34)	(0.82)	(0.39)
Net earnings per common share - Basic (in dollars per share)		$ 1.57	$ 2.55	$ 4.1
Weighted average common shares outstanding (in shares)		21,716,177	21,683,719	22,147,479
Diluted Net Earnings Per Common Share Attributable to SMP [Abstract]
Earnings from continuing operations per common share (in dollars per share)		$ 2.85	$ 3.3	$ 4.39
Loss from discontinued operations per common share (in dollars per share)		(1.31)	(0.8)	(0.37)
Net earnings per common share - Diluted (in dollars per share)		$ 1.54	$ 2.5	$ 4.02
Weighted average common shares outstanding (in shares)		21,716,177	21,683,719	22,147,479
Plus incremental shares from assumed conversions [Abstract]
Dilutive effect of restricted stock and performance-based stock (in shares)		445,000	456,000	469,000
Weighted average common shares outstanding - Diluted (in shares)		22,161,341	22,139,981	22,616,456
Restricted and Performance-Based Shares [Member]
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)		280,000	292,000	269,000

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

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Industry Segment and Geographic Data, Reportable Segments (Details) $ in Thousands		12 Months Ended
		Dec. 31, 2023 USD ($) Segment	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Financial information for reportable segment [Abstract]
Number of operating segments | Segment		3
Net sales	[1]	$ 1,358,272	$ 1,371,815	$ 1,298,816
Depreciation and amortization		29,022	28,298	27,243
Operating income (loss)		92,677	104,135	128,999
Investment in unconsolidated affiliates		24,050	41,745	44,087
Capital expenditures		28,633	25,956	25,875
Total assets		1,293,047	1,254,929	1,197,961
Vehicle Control [Member] | Reportable Segments [Member]
Financial information for reportable segment [Abstract]
Net sales	[1]	737,932	750,571	737,431
Depreciation and amortization		13,877	14,075	14,840
Operating income (loss)		71,327	74,153	97,029
Investment in unconsolidated affiliates		2,496	2,490	2,729
Capital expenditures		13,955	13,378	17,048
Total assets		620,569	618,789	604,016
Temperature Control [Member] | Reportable Segments [Member]
Financial information for reportable segment [Abstract]
Net sales	[1]	337,754	351,237	324,080
Depreciation and amortization		3,424	2,973	3,345
Operating income (loss)		17,343	26,459	30,077
Investment in unconsolidated affiliates		19,711	27,557	28,518
Capital expenditures		1,899	3,973	2,130
Total assets		274,657	254,137	234,771
Engineered Solutions [Member] | Reportable Segments [Member]
Financial information for reportable segment [Abstract]
Net sales	[1]	282,586	270,007	237,305
Depreciation and amortization		9,966	9,557	7,390
Operating income (loss)		19,944	18,713	19,982
Investment in unconsolidated affiliates		1,843	11,698	12,840
Capital expenditures		12,095	6,489	5,354
Total assets		292,080	289,518	272,791
Other [Member]
Financial information for reportable segment [Abstract]
Net sales	[1]	0	0	0
Depreciation and amortization		1,755	1,693	1,668
Operating income (loss)		(15,937)	(15,190)	(18,089)
Investment in unconsolidated affiliates		0	0	0
Capital expenditures		684	2,116	1,343
Total assets		$ 105,741	$ 92,485	$ 86,383

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

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Industry Segment and Geographic Data, Operating Income to Earnings (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of segment operating income to net earnings [Abstract]
Operating Income		$ 92,677	$ 104,135	$ 128,999
Other non-operating income, net		2,326	4,814	3,494
Interest expense		13,287	10,617	2,028
Earnings from continuing operations before income taxes		81,716	98,332	130,465
Provision for income taxes		18,368	25,206	31,044
Earnings from continuing operations		63,348	73,126	99,421
Discontinued operations, net of tax		(28,996)	(17,691)	(8,467)
Net earnings		34,352	55,435	90,954
Long-lived assets [Abstract]
Long-lived assets	[1]	508,291	458,832	450,630
United States [Member]
Long-lived assets [Abstract]
Long-lived assets	[1]	368,792	326,199	315,983
Asia [Member]
Long-lived assets [Abstract]
Long-lived assets	[1]	75,869	76,766	80,175
Europe [Member]
Long-lived assets [Abstract]
Long-lived assets	[1]	44,517	38,351	37,892
Mexico [Member]
Long-lived assets [Abstract]
Long-lived assets	[1]	13,262	10,355	12,119
Canada [Member]
Long-lived assets [Abstract]
Long-lived assets	[1]	$ 5,851	$ 7,161	$ 4,461

[1] Long-lived assets are attributed to countries based upon the location of the assets.

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Industry Segment and Geographic Data, Customer Concentration (Details) - Customer Concentration Risk [Member]	12 Months Ended
	Dec. 31, 2023 Customer
Customer Concentration [Abstract]
Number of largest individual customers	3
Net Sales [Member] | Three Largest Individual Customers [Member]
Customer Concentration [Abstract]
Concentration risk, percentage	59.00%
Net Sales [Member] | O' Reilly Auto Parts [Member]
Customer Concentration [Abstract]
Concentration risk, percentage	29.00%
Net Sales [Member] | AutoZone [Member]
Customer Concentration [Abstract]
Concentration risk, percentage	16.00%
Net Sales [Member] | NAPA [Member]
Customer Concentration [Abstract]
Concentration risk, percentage	14.00%

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Net Sales (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	$ 1,358,272	$ 1,371,815	$ 1,298,816
United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	1,148,352	1,209,104	1,134,378
Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	78,858	66,591	62,560
Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	60,190	38,520	27,683
Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	43,057	31,317	25,646
Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	20,399	19,186	41,016
Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	7,416	7,097	7,533
Vehicle Control [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	737,932	750,571	737,431
Vehicle Control [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	659,570	682,145	677,684
Vehicle Control [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	36,088	35,233	35,063
Vehicle Control [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	916	661	771
Vehicle Control [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	36,350	26,019	19,741
Vehicle Control [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	351	2,408	144
Vehicle Control [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	4,657	4,105	4,028
Vehicle Control [Member] | Engine Management (Ignition, Emissions and Fuel Delivery [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	450,180	454,571	444,196
Vehicle Control [Member] | Electrical and Safety [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	221,782	230,487	224,520
Vehicle Control [Member] | Wire Sets and Other [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	65,970	65,513	68,715
Temperature Control [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	337,754	351,237	324,080
Temperature Control [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	319,904	335,281	309,247
Temperature Control [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	17,081	14,596	13,585
Temperature Control [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	8	75	153
Temperature Control [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	49	401	358
Temperature Control [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	526	63	101
Temperature Control [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	186	821	636
Temperature Control [Member] | AC System Components [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	237,756	245,484	231,466
Temperature Control [Member] | Other Thermal Components [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	99,998	105,753	92,614
Engineered Solutions [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	282,586	270,007	237,305
Engineered Solutions [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	168,878	191,678	147,447
Engineered Solutions [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	25,689	16,762	13,912
Engineered Solutions [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	59,266	37,784	26,759
Engineered Solutions [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	6,658	4,897	5,547
Engineered Solutions [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	19,522	16,715	40,771
Engineered Solutions [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	2,573	2,171	2,869
Engineered Solutions [Member] | Commercial Vehicle [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	83,025	80,275	76,066
Engineered Solutions [Member] | Construction/Agriculture [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	43,402	42,385	33,220
Engineered Solutions [Member] | Light Vehicle [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	92,759	91,533	86,440
Engineered Solutions [Member] | All Other [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	63,400	55,814	41,579
Other [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0
Other [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0
Other [Member] | Canada [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0
Other [Member] | Europe [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0
Other [Member] | Mexico [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0
Other [Member] | Asia [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	0	0	0
Other [Member] | Other Foreign [Member]
Disaggregation of Revenue [Abstract]
Disaggregation of net sales	$ 0	$ 0	$ 0

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Commitments and Contingencies, Rent (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Rent [Abstract]
Total rent expense	$ 19,706	$ 14,135	$ 12,065
Expenses related to non lease components	3,300	2,700	2,000
Real Estate [Member]
Rent [Abstract]
Total rent expense	15,735	11,385	9,500
Other [Member]
Rent [Abstract]
Total rent expense	$ 3,971	$ 2,750	$ 2,565

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Commitments and Contingencies, Warranties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Warranties [Abstract]
Warranty expense	$ 120,000	$ 112,500	$ 91,900
Changes in product warranties [Roll forward]
Balance, beginning of period	19,667	17,463
Liabilities accrued for current year sales	120,027	112,477
Settlements of warranty claims	(118,560)	(110,273)
Balance, end of period	$ 21,134	$ 19,667	$ 17,463

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Commitments and Contingencies, Letters of Credit and Asbestos (Details) $ in Thousands	1 Months Ended				12 Months Ended			268 Months Ended
	Sep. 30, 2023 USD ($)	Aug. 31, 2023 USD ($)	May 31, 2023 USD ($)	Aug. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) Officer Claim	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2023 USD ($) Claim
Letters of Credit and Asbestos [Abstract]
Number of key officers | Officer					1
Accrued asbestos liabilities					$ 72,013	$ 63,305		$ 72,013
Litigation settlement, amount awarded to other party		$ 10,500	$ 11,000
Pre-tax provision in earnings (loss) From discontinue operations					10,500
Credit in earnings (loss) From discontinue operations					500
Financial Standby Letter of Credit [Member]
Letters of Credit and Asbestos [Abstract]
Outstanding letters of credit with certain vendors					$ 2,300	2,400		$ 2,300
Asbestos [Member]
Letters of Credit and Asbestos [Abstract]
Pending claims, approximate number | Claim					1,390			1,390
Payment for settled claims and awards related damages, including interest								$ 74,600
Increase in range of possible loss from lower range				$ 15,200
Increase in range of possible loss from upper range				$ 23,700
Accrued asbestos liabilities	$ 84,000
Incremental pre-tax provision	$ 23,800
Asbestos [Member] | Minimum [Member]
Letters of Credit and Asbestos [Abstract]
Range of possible loss		84,000
Asbestos [Member] | Maximum [Member]
Letters of Credit and Asbestos [Abstract]
Range of possible loss		135,300
Asbestos [Member] | Discontinued Operations [Member]
Letters of Credit and Asbestos [Abstract]
Total operating cash outflows related to discontinued operations					$ 11,000	$ 12,000	$ 8,800
Asbestos [Member] | Discontinued Operations [Member] | Minimum [Member]
Letters of Credit and Asbestos [Abstract]
Range of possible loss		53,100
Asbestos [Member] | Discontinued Operations [Member] | Maximum [Member]
Letters of Credit and Asbestos [Abstract]
Range of possible loss		$ 105,200

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Schedule II - Valuation and Qualifying Accounts (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) Customer	Dec. 31, 2022 USD ($) Customer		Dec. 31, 2021 USD ($)
Valuation and Qualifying Accounts [Roll Forward]
Balance at beginning of year	$ 5,375,000	$ 6,170,000		$ 5,822,000
Charged to costs and expenses	15,389,000	19,698,000		14,277,000
Other	0	0		0
Deductions	12,719,000	20,493,000		13,929,000
Balance at end of year	$ 8,045,000	$ 5,375,000		6,170,000
Bankruptcy [Abstract]
Number of customers who filed a petition | Customer	1	1
Customer bankruptcy charge	$ 0	$ 7,002,000		0
Allowance for Expected Credit Losses [Member]
Valuation and Qualifying Accounts [Roll Forward]
Balance at beginning of year	4,129,000	4,815,000		4,406,000
Charged to costs and expenses	2,940,000	6,242,000	[1]	450,000
Other	0	0		0
Deductions	185,000	6,928,000		41,000
Balance at end of year	6,884,000	4,129,000		4,815,000
Allowance for Discounts [Member]
Valuation and Qualifying Accounts [Roll Forward]
Balance at beginning of year	1,246,000	1,355,000		1,416,000
Charged to costs and expenses	12,449,000	13,456,000		13,827,000
Other	0	0		0
Deductions	12,534,000	13,565,000		13,888,000
Balance at end of year	1,161,000	1,246,000		1,355,000
Allowance for Sales Returns [Member]
Valuation and Qualifying Accounts [Roll Forward]
Balance at beginning of year	37,169,000	42,412,000		40,982,000
Charged to costs and expenses	162,525,000	152,985,000		129,964,000
Other	0	0		0
Deductions	161,456,000	158,228,000		128,534,000
Balance at end of year	$ 38,238,000	$ 37,169,000		$ 42,412,000

[1] Includes a $7 million charge relating to one of our customers that filed a petition for bankruptcy in January 2023.