Key Highlights

  • Adjusted EBITDA hit a record USD 67 million, or 13% of net sales, USD 4.9 million better than last year.
  • Non-GAAP diluted EPS rose 13.2% to USD 1.54, while consolidated net sales increased 2.8% after adjusting for Tariff refund treatment.
  • Net Debt fell to USD 381.9 million, and Leverage of 1.8x beat the 2x year-end target a quarter early.
  • Cash from operations reached USD 207.2 million in nine months, USD 121.5 million better than a year earlier.

Record EBITDA on Modest Sales Growth

Standard Motor Products, Inc. (NYSE:SMP) reported third-quarter 2026 consolidated net sales growth of 2.8% when adjusted for the accounting treatment of tariff refunds, and growth of 6% year to date. All sales commentary on the call adjusted for the tariff refund treatment. Adjusted EBITDA was a record USD 67 million, or 13% of net sales, and non-GAAP diluted EPS rose 13.2% to USD 1.54.

The company said strong Operating Cash Flow let it surpass its year-end leverage target, reaching 1.8x.

Segment Performance

Vehicle Control net sales were USD 209.5 million, up 6%, with adjusted EBITDA of 13.6% of net sales on higher gross Margin and favorable mix. Vehicle Control benefited from an easier comparison and solid Demand across all categories, while Temperature Control faced a record quarter a year ago. Management said customers have been investing in inventory to pursue commercial Market Share and that point-of-sale data has remained positive all year.

Temperature Control net sales were USD 138.7 million, down 4.1% against a record third quarter last year, with adjusted EBITDA of 14.9% of net sales, reflecting lower production volumes as the season wound down and a stronger Mexican peso. The segment is up a bit over 4% year to date after customers placed large preseason orders, having been up 10% at midyear.

Nissens, the European aftermarket business, grew 7.6%, led by air conditioning products after temperature records across much of Europe, with adjusted EBITDA of 18.2% of net sales, and is up nearly 8% year to date. Engineered Solutions grew 4.9%, bringing year-to-date growth to over 11%, though management said comparisons get tougher from here.

Cash Flow and Capital

Nine-month cash from operations was USD 207.2 million, helped by a significant reduction in inventory levels and the timing of tariff refunds. Financing activities included USD 22 million of dividends and USD 125.1 million of Credit agreement repayments. Net debt was USD 381.9 million, down significantly from last year.

Management said its full-year 2026 sales and profit expectations are unchanged from before.

Strategic Moves and Items to Follow

The company acquired 50% of the Thailand sensor Manufacturing operation of its partner Techstrong through a joint venture, to support Vehicle Control, add Supply chain control and reduce reliance on China, launching a low-cost manufacturing operation on which the company plans to move more production. It also announced a full-line premium air conditioning condenser program in North America, leveraging Nissens product knowledge, and launched ignition coils and another category in Europe earlier in the year.

Items to follow include Temperature Control seasonality, the tougher comparisons in Engineered Solutions, currency effects and the further build of low-cost manufacturing.