Standard Motor Products, Inc. Q1 FY2026 earnings call

• Vehicle control had sales up over 11%, with a large portion from customers expanding assortments; wire set subcategory returned to normal single-digit secular decline. • Temperature control had solid quarter, preseason orders spread out, POS up substantially. • Nissans Automotive sales up over 12% (partly currency), local currency up 2.7%, launched new categories in Europe. • Engineered solutions had strong first quarter sales up over 12% over last year. • Both North American aftermarket segments had nominal lift from tariff pass-through pricing. • Nissin's has been part of S&P over a year, focus on savings rolling in, cross-selling, and portfolio expansion.

Vehicle control: Net sales of 213.8 million in Q1, up 11.2%. Adjusted EBITDA of 11.4% in the quarter, slightly lower than last year. Temperature control: Net sales of $89.5 million, up 0.7%. Adjusted EBITDA increased to 13.4% in Q1. Nissans Automotive: Sales up more than 12%, mostly due to currency translation; in local currency, up 2.7%. Adjusted EBITDA margin of 12.5% in Q1, lower than last year due to currency transaction losses. Engineered solutions: Sales up 12.6%. Adjusted EBITDA of 6.9% in the quarter, down from last year due to lower gross margin. Consolidated sales increased 9.1%, adjusted EBITDA 9.9% of net sales, non-GAAP diluted earnings per share 82 cents.

• Expect sales growth in low-to-mid single-digit percentage range for 2026 full year, driven by momentum in North America and Europe and stable market conditions in engineered solutions. • Adjusted EBITDA margin expected to be 11% to 12% of net sales, reflecting margin benefits of sales growth and margin compression from tariff pass-through. • Interest expense on outstanding debt expected to be about $30 million for full year. • Income tax rate expected to be 27.5% to 28%. • Depreciation amortization expense expected to increase to $45 to $50 million as full year of depreciation on distribution center investments and general business investments.

• Unknown impact of conflict in the Middle East on costs or supply chain disruption. • Ever-changing tariff landscape.

Q: Speaking to vehicle control, asked if outsized selling was due to innovation or industry-wide.

A: This was just a typical process with customers to review inventory position, collaborative event, not necessarily related to new products or innovation.

Q: Asked about POS in Nissin's.

A: Less visibility in European market, but general ongoing trends match sell-in, low to mid single digits.

Q: Asked about synergies, growth side.

A: Launching new products doesn't expect substantial near-term gains, more for future years.

Q: Asked about temperature control, POS stronger than expected, combination of weather or share gains.

A: Combination of good market demand and market share gain, success with brands and customers gaining share.