Standard Motor Products, Inc.

In Q2 2026, consolidated net sales increased 6.7% and non-GAAP diluted EPS rose 8.6% to $1.40. Adjusted EBITDA was $63.5 million, with a consolidated adjusted EBITDA margin of 12.1% and $4.4 million better than last year. By segment, Vehicle Control sales were $198.6 million, down 1.6%, with adjusted EBITDA margin of 8.6%; Temperature Control sales were $152 million, up 15.7%, with adjusted EBITDA margin of 18.2%; Nissens sales increased $4.4 million, or 4.8%, with adjusted EBITDA margin of 19%; and Engineered Solutions sales rose 16.8%, with adjusted EBITDA margin of 9.7%. For the first half, cash from operations was $58.3 million, up $64.2 million year over year; capex was $14.9 million; dividends totaled $14.7 million; and $24 million was repaid on the credit agreement. Net debt was $510.2 million and leverage was 2.5x EBITDA. Full-year 2026 guidance was unchanged: sales growth in the low-to-mid single-digit range, adjusted EBITDA margin of 11% to 12%, interest expense of about $30 million, tax rate of 27.5% to 28%, and depreciation/amortization of $45 million to $50 million.

Eric Sills struck an upbeat tone, saying the company was “quite pleased” with the quarter and noting continued outperformance from structural advantages, customer relationships, and execution. He highlighted strength in North American aftermarket, a growing European platform in Nissens, and improving diversification across categories, geographies, and end markets. He also emphasized the new Thailand sensor joint venture as a strategic move that improves supply-chain control and helps reduce China exposure.

Nathan Iles focused on the numbers and the drivers behind them, including the impact of tariff refunds and the company’s normal pass-through treatment of tariffs. He said Vehicle Control margin was pressured by elevated distribution costs from the Shawnee, Kansas warehouse ramp, freight, and SG&A inflation, while Temperature Control and Nissens both benefited from stronger gross margin and operating leverage. He also pointed to improved first-half cash generation, lower capex as the new DC is complete, and a lower net debt balance of $510.2 million, with leverage at 2.5x and a path toward the 2x target by end-2026.

Analysts pressed management on tariffs, including the net effect of IEEPA refunds being replaced by Section 122 and then Section 301 tariffs, and whether customers would receive givebacks. Eric Sills said the changes net to only a small reduction in overall tariff exposure and reiterated the company’s long-standing dollar-for-dollar pass-through approach, with timing offsets of about 90 to 120 days; he declined to discuss customer-specific mechanics but said refunds would be shared fairly. Questions on Temperature Control focused on POS trends, and management said POS was soft in May and early June but has since rebounded as the summer heat picked up. On Nissens, management said performance remains ahead of the market, with softness tied more to discretionary categories and a late-starting European summer, while new category launches in Europe are still early but starting to gain traction.