Standard Motor Products, Inc. Releases 2025 Fourth Quarter and Year-End Results

• Vehicle Control sales increased 3.3% in the fourth quarter, with full-year performance of 3.0% growth. The solid results in the quarter were due to a combination of factors including favorable customer order patterns, general strength across our non-discretionary categories, and the on-going benefit from our customers' footprint expansion activities. Customer POS remained healthy in the quarter, continuing a trend we have seen throughout the year.
  
  
• Temperature Control sales increased an impressive 5.9% in the quarter versus a challenging compare of 30% in last year's fourth quarter and finished the year up 12.2%. This has been another very strong year for the segment, as the season for this business appears to be starting earlier and lasting longer. In addition to weather patterns that drive demand, we believe our strong brand recognition among professional installers has helped increase our customers' share of the market.
  
  
• Both North American aftermarket segments experienced a modest sales lift from tariff passthroughs implemented in the second half of the year, tempered by some compression of gross margins from passing through tariffs at cost.

Nissens
Nissens delivered another solid quarterly performance with sales of $64.1 million. For 2025, Nissens contributed $305.4 million in sales with an adjusted EBITDA margin of 15.9%.  Nissens continues to gain share in its markets driven by strong brand awareness and operational excellence, and we expect this outperformance to continue.  In November, we completed our first full year of ownership, and heading into 2026 we expect to begin to realize some of the benefits from synergy and integration efforts, including a modest uplift from recently launched new product categories and expanding growth synergies through cross-selling opportunities.      

Engineered Solutions
Engineered Solutions sales saw some rebound in the quarter with 6.3% growth over last year's quarter, primarily driven by timing of orders in our powersports-related categories. For the full year, the segment posted a 3.8% decline in sales as it was impacted by cyclical softness across global end markets, but we were pleased to see sequential recovery in the second half of the year. We also made the decision to wind down certain customer programs in the quarter, for which we incurred some one-time costs. We believe the segment has seen demand stabilize and should experience more stable quarterly performance moving into 2026.

Profitability & Balance Sheet
Adjusted EBITDA for the quarter increased to $37.4 million, an improvement of 130 bps to 9.7% of net sales.  On a year-to-date basis, adjusted EBITDA increased to $200.9 million, showing an improvement of 160 bps to 11.2% of net sales, exceeding our guidance of 10.5% - 11%.  The increases were driven by strong performance in our North American and Nissens aftermarket businesses. Nissens contributed $6.5 million and $48.5 million of adjusted EBITDA in the fourth quarter and full year, respectively.        

From a balance sheet perspective, our cash flows and borrowings were in line with expectations. Total net debt at quarter-end stood at $546.7 million, primarily reflecting additional borrowings related to our Nissens acquisition and seasonal working capital build. Our debt leverage stood at 2.7x at the end of the quarter and we continue to target reducing debt levels to 2.0x adjusted EBITDA by the end of 2026.              

2026 Guidance
Our outlook for the full year of 2026 includes an expectation that sales growth will be in the low to mid-single digit range driven by ongoing tailwinds for professional grade non-discretionary products in the North American aftermarket, continuing momentum in our European business, and while always the most volatile, a more stable performance in Engineered Solutions. Further, we expect Adjusted EBITDA will be in a range of 11.0%-12.0% that should be aided by initiatives we have underway to drive ongoing profitability gains.  As we lap the implementation of tariff-related pricing, we expect a slight increase in sales from higher pricing, but some continued margin compression from pass-through at our cost.  

This guidance is based on tariffs in place before the recent Supreme Court ruling on IEEPA tariffs and the announcement of new Section 122 tariffs, and any impact thereof.  We will continue to monitor the shifting tariff landscape, and plan to implement changes as necessary.

Dividends
The Board of Directors has approved an increase in its quarterly common stock dividend from thirty-one cents per share to thirty-three cents per share, payable on March 2, 2026, to shareholders of record on February 16, 2026. 

Closing Remarks
In closing, Mr. Sills commented, "Our North American and Nissens aftermarket businesses led the way in this year's strong performance. The global aftermarket continues to be resilient and demand for our products remains strong, driven by the quality, brand recognition and high levels of customer service we provide. We are optimistic heading into 2026 and think we are well positioned to capitalize on favorable trends to drive growth and increased shareholder value. I would like to thank our employees for their hard work and commitment to our continued success."        

Conference Call
Standard Motor Products, Inc. will hold a conference call at 11:00 AM, Eastern Time, on Thursday, February 26, 2026.  This call will be webcast and can be accessed on our website at www.smpcorp.com and clicking on the SMP Q4'25 Earnings Call Webcast link. Investors may also listen to the call by dialing 800-343-4849 (domestic) or 203-518-9848 (international). The conference call ID code is SMP4Q2025. Our playback will be made available for dial in immediately following the call. For those choosing to listen to the replay by webcast, the link should be active on our website within 24 hours after the call. The playback number is 800-934-2123 (domestic) or 402-220-1137 (international).

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Standard Motor Products cautions investors that any forward-looking statements made by the company, including those that may be made in this press release, are based on management's expectations at the time they are made, but they are subject to risks and uncertainties that may cause actual results, events or performance to differ materially from those contemplated by such forward looking statements. Among the factors that could cause actual results, events or performance to differ materially from those risks and uncertainties discussed in this press release are those detailed from time-to-time in prior press releases and in the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q.  By making these forward-looking statements, Standard Motor Products undertakes no obligation or intention to update these statements after the date of this release.