Earnings call transcript: Standard Motor Products beats Q2 2025 estimates

Standard Motor Products (SMP) reported a significant earnings beat for Q2 2025, with earnings per share (EPS) of $1.29, surpassing the forecast of $0.95 by 35.85%. Revenue also outperformed expectations, reaching $493.85 million against a forecast of $450.21 million, marking a 9.69% surprise. Following these results, SMP’s stock rose by 7.58% in pre-market trading, reflecting investor confidence in the company’s strong performance and strategic initiatives. According to InvestingPro data, SMP maintains strong fundamentals with a P/E ratio of 12.72 and has demonstrated consistent revenue growth of 13.53% over the last twelve months. InvestingPro analysis suggests the stock is currently fairly valued based on its comprehensive Fair Value model.

Key Takeaways

• SMP’s Q2 2025 EPS of $1.29 exceeded expectations by 35.85%.
• Revenue reached $493.85 million, a 9.69% surprise over forecasts.
• Stock price surged 7.58% in pre-market trading.
• Strategic expansion and product innovation contributed to performance.
• Full-year sales guidance raised to low 20% growth range.

Company Performance

Standard Motor Products demonstrated robust performance in Q2 2025, with total sales increasing by 26.7%. The company’s strategic focus on expanding its product portfolio and integrating the Nissens acquisition has paid off, contributing to a 31.6% rise in non-GAAP diluted EPS. The company continues to benefit from a stable North American aftermarket and a growing, aging car park that expands its addressable market.

Financial Highlights

• Revenue: $493.85 million, up 26.7% year-over-year.
• Earnings per share: $1.29, up 31.6% year-over-year.
• Adjusted EBITDA margin improved by 190 basis points to 12%.
• Net debt stood at $577.8 million with a leverage ratio of 3.2x EBITDA.

Earnings vs. Forecast

SMP’s Q2 2025 earnings per share of $1.29 significantly beat the forecasted $0.95, representing a 35.85% surprise. Revenue also exceeded expectations by 9.69%, reaching $493.85 million compared to the anticipated $450.21 million. This strong performance underscores the effectiveness of SMP’s strategic initiatives and market positioning.

Market Reaction

Following the earnings announcement, SMP’s stock rose by 7.58% in pre-market trading, reaching $34.20. This movement reflects investor optimism driven by the company’s earnings beat and positive outlook. The stock’s performance is noteworthy considering its proximity to the 52-week high of $35.92, signaling strong market confidence. InvestingPro Tips highlight that SMP has maintained dividend payments for 16 consecutive years, with a current dividend yield of 3.93%. The stock’s relatively low beta of 0.62 suggests lower volatility compared to the broader market. Get access to more exclusive insights and detailed analysis with an InvestingPro subscription.

Outlook & Guidance

Standard Motor Products has raised its full-year sales guidance to a low 20% growth range, maintaining an adjusted EBITDA margin of 10-11%. The company expects tariff costs to be largely offset in the second half of 2025, with continued focus on integrating Nissens and exploring synergy opportunities.

Executive Commentary

CEO Eric Sills expressed optimism, stating, "Even in the face of a challenging economic environment, we have enjoyed several consecutive quarters of strengthening performance." He also highlighted the success of the Nissens acquisition, noting, "The Nissens business is exceeding our expectations in just about every regard."

Risks and Challenges

• Tariff impacts: Potential for increased costs if mitigation strategies are less effective.
• Integration risks: Challenges in fully integrating Nissens could impact synergies.
• Economic conditions: Macroeconomic pressures may affect discretionary spending.
• Interest rates: Potential refinancing opportunities could be affected by rate changes.

Q&A

During the earnings call, analysts inquired about the impact of tariffs and pricing strategies, the performance of the Nissens acquisition, and expectations for the new distribution center’s efficiency. Management addressed these concerns, emphasizing their strategic focus and operational improvements.

Standard Motor Products’ Q2 2025 results underscore its strong market position and strategic execution, as reflected in both financial performance and stock market reaction.

Full transcript - Standard Motor Products Inc (SMP) Q2 2025:

Tony, Moderator/Operator, Standard Motor Products: Thank you, and good morning, everyone, and thank you for joining us on Standard Motor Products second quarter twenty twenty five earnings conference call. With me today are Larry Sills, Chairman, Emeritus Eric Sills, Chairman and Chief Executive Officer Jim Burke, Chief Operating Officer and Nathan Iles, Chief Financial Officer. On our call today, Eric will give an overview of our performance in the quarter, and Nathan will then discuss our financial results. Eric will then provide some concluding remarks and open the call up for Q and A. Before we begin this morning, I’d like to remind you that some of the material that we’ll be discussing today may include forward looking statements regarding our business and expected financial results.

When we use words like anticipate, believe, estimate or expect, these are generally forward looking statements. Although we believe that the expectations reflected in these forward looking statements are reasonable, they are based on information currently available to us and certain assumptions made by us, and we cannot assure you they will prove correct. You should also read our filings in the Securities and Exchange Commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward looking statements. I’ll now turn the call over to Eric Sills, our CEO.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Thank you, Tony, and good morning, everyone, and welcome to our second quarter earnings call. So overall, we are quite pleased with our results as the strong momentum from the first quarter has continued. From a top line perspective, we posted growth of nearly 27. Now while the majority of this growth was from the addition of our newly acquired Nissens business, The legacy business was up 3.5%, and that is against very challenging comps as last year’s second quarter was quite strong. Year to date, we are now up about 26% or about 4% excluding Nissens.

We’re also pleased by our profit gains. Adjusted EBITDA increased $20,000,000 up 190 basis points to 12%. Here too, Nissans provided much of the lift, though other segments also contributed to the growth. Due to the strength of our first half, we have decided to increase our top line expectations to the low 20s percent growth range, up from our previous guide of mid teens growth. I’ll now review each business separately, starting with the North American aftermarket.

This is comprised of two operating segments, Vehicle Control and Temperature Control, both of which had very strong quarters. Vehicle Control sales were up nearly 7% in the quarter and are now up 5.3% year to date. Our customers continue to invest in our products as they expand their footprint, recognizing the critical need for in market product availability, and their strong sell through demonstrates the ongoing demand for our largely nondiscretionary offering. Furthermore, we believe that the brand recognition we enjoy with professional technicians leads them to choose our products over others. Turning to our Temperature Control division.

Sales increased 5.5 over last year, which is impressive as last year’s Q2 was up 28% over the prior year. Year to date, the segment is now up 12.3% over last year, and last year had been one of the hottest on record. We believe there are a few things at play here. First is the impact of the timing of preseason orders. This year, they came in early as was reflected in our strong first quarter, and often that just leads to timing differences across quarters, but we believe this year that early in stock better prepared our customers for the start of the season and they never missed a beat.

Here too, we contend that our strong market position has created momentum for our brands and our customer sell through suggests they are doing quite well with our program. Next, I’ll speak about our newest aftermarket segment, Nissens Automotive, which has been part of S and P since last November. Sales remained strong in the quarter, adding $90,000,000 in revenue. They continue to outperform in their markets, enjoying mid- to high single digit growth. There are several contributing factors to this outperformance.

First, as a nondiscretionary and largely weather dependent offering, they are enjoying some of the same market tailwinds as here in The U. S. Additionally, their strong brand profile and well received go to market strategy has allowed them to grow market share in their existing categories and to gain traction in newly launched categories, specifically in what they call engine efficiency and what would fall within vehicle control here. Now while Innosence is a strong company in its own right, we believe that meaningful synergies exist through integration, which is well underway. For savings synergies, we have been heavily focused on product cost.

As we have significant product overlap, we are combining our sourcing efforts to identify best suppliers, leveraging our combined spend and in sourcing as appropriate. We have also now begun taking advantage of our complementary product portfolios to pursue growth opportunities. For example, this quarter, we announced the introduction of over 800 new SKUs to the Nissens North American customer base and are actively building out programs from Europe. We’re really just getting started and see that opportunities abound. Lastly, I’ll address our non aftermarket segment, Engineered Solutions.

Sales declined 8.3% in the quarter, which reflects the ongoing trend of a slowdown in certain end markets. It’s worth noting that this softness began in the second half of last year, so the comps going forward will be easier. We’ve always known and discussed that as opposed to the aftermarket, it is prone to more cyclicality. And while we can expect some volatility period to period, we believe that the longer term trends are favorable, and we believe it provides a nice complement to our aftermarket business with valuable synergies. Turning to our operations.

We are proud to announce in the quarter the official opening of our new 575,000 square foot state of the art distribution center in Shawnee, Kansas. We plan to fully ramp up over the balance of the year by transferring all activities from the nearby Edwardsville facility as well as by shifting portions of our volume from our other major DCs. We will emerge with a much better balance of activities across our network with expanded capacity, redundancy for risk mitigation and the ability to better serve our customers. It’s been a heavy lift, I thank all who are involved in this major undertaking. All right.

Lastly, let me speak to the current tariff landscape. And while it is changing by the minute, we are hopeful that we are nearing a more stabilized environment. While we are still awaiting certain trade agreements to be finalized, we believe that our diverse global footprint will continue to provide us with a competitive advantage. Over half our sales in The U. S.

Are from products produced in North America, which are largely tariff free. For products from other regions, we have been implementing our plans as previously described. It begins with mitigating costs by working with our upstream suppliers on cost sharing and by relocating production from China to lower tariff areas. However, much of our cost recovery comes from passing through the impact through to our customers at our cost. Again, due to our North American footprint, we believe that the amount we need to pass through is likely less than the competition.

It’s important to note that there is a timing delay between when costs are incurred and new pricing takes effect. Due to this, we did incur costs in Q2 associated with previously implemented tariffs with minimal offsetting pricing, but beginning in Q3, these will begin to roughly offset. We recognize that the landscape remains fluid. As it evolves, we will continue to implement our playbook, adjusting prices up or down as needed. It is worth reiterating that as most of our products are nondiscretionary and as product decisions are typically made by professional repair facilities, they are fairly price inelastic at the end consumer.

When you put all these moving pieces together, we are very pleased with the quarter’s financial results and with our ability to execute on our initiatives during complex times. So let me hand this over to Nathan, who will provide the details.

Nathan Iles, Chief Financial Officer, Standard Motor Products: All right. Thank you, Eric, and good morning, everyone. As we go through the numbers, I’ll first give some color on the results for the quarter by segment and then look at the consolidated results for both the quarter and year so far. I’ll then cover some key cash flow metrics and the balance sheet and finish with an update on our financial outlook for the full year of 2025. First, looking at our Vehicle Control segment, you can see on the slide that net sales of $201,700,000 in Q2 were up 6.9% with the increase driven by steady demand for our portfolio of products.

Vehicle Controls adjusted EBITDA in the second quarter increased to 10.7%, up 30 basis points from last year. The increase in adjusted EBITDA was driven by better leverage of operating expenses on higher sales and lower factoring expenses as a result of lower interest rates in the quarter. These items more than offset a lower gross margin rate that was pressured by the increased cost of tariffs in the quarter, the dynamics of which Eric noted earlier. Turning to Temperature Control, net sales in the quarter for that segment of 131,400,000.0 were up 5.5%. The second quarter benefited from a strong start to the season with weather being hot across most of the country and we continue to see strong sell through with customers.

Temperature Controls adjusted EBITDA increased in Q2 to 16.1% due to higher sales volumes that led to a higher gross margin rate, which more than offset pressure from tariff costs, as well as improved operating expenses as a percent of sales for the quarter. Next, I’ll touch on Nissens. In our second full quarter of ownership, Nissens added $90,500,000 of net sales and $16,300,000 of adjusted EBITDA. The business is performing well and again exceeded our estimate of mid teens EBITDA percent coming in at 18% for the quarter. Nissens continues to grow its sales across Europe and has also benefited from some favorable currency translation movements.

Looking now at Engineered Solutions, sales in that segment in the quarter were down 8.3%, but this was expected as we noted last quarter that sales continued to be soft across most end markets. Adjusted EBITDA for Engineered Solutions in the quarter of 10% was down from last year. This was the result of lower sales volume, unfavorable mix and some impact from tariff costs that lowered the gross margin rate, but we continue to point out that EBITDA continues to be healthy at 10% for this quarter despite volume headwinds. To summarize and put it all together across the four segments for the second quarter, consolidated sales increased 26.7% and adjusted EBITDA increased 190 basis points to 12% of net sales and non GAAP diluted earnings per share were up 31.6%. For the first six months, our sales have increased 25.8% now over last year and 4.1% excluding Nissens, helped by strong sales in both our North American aftermarket segments.

Tacking on a strong second quarter to a strong first quarter resulted in a year to date increase in adjusted EBITDA of two fifty basis points and an increase in non GAAP diluted earnings per share of 47.9. Turning now to cash flows. Cash used in operations for the first six months of $5,900,000 was down from cash used of $10,100,000 last year. While we always use cash during the first half of the year due to seasonal working capital needs, the higher earnings allow for slightly lower usage this year, and we were pleased to turn in better performance despite paying higher cash costs for tariffs. Our investing activities show capital expenditures of $19,300,000 which includes $7,000,000 of investment related to our new distribution center.

CapEx is slightly lower than last year as capital spending related to the new DC is nearing completion. Financing activities show payments of $13,600,000 of dividends as well as borrowings for the year so far of $45,900,000 which were used mainly to fund our working capital and CapEx needs. Note we repaid $33,200,000 on our revolver during the second quarter and expect further repayments during the second half of the year. Our net debt of $577,800,000 at the end of the second quarter was higher than last year after we made borrowings for the Nissens acquisition. We finished Q2 with a leverage ratio of 3.2 times EBITDA, but accounting for a full twelve months of EBITDA from Nissens, leverage would have been lower.

Before I finish, I want to give an update on our sales and profit expectations for the full year of 2025, particularly now that we have much better visibility into the impact of tariffs and mitigating actions. As we noted in our release this morning, our updated outlook includes higher tariff costs and offsetting impacts. We are raising our sales guidance for the full year to be an increase over last year in the low 20% range. We’re also pleased to reaffirm our adjusted EBITDA margin will be in a range of 10% to 11% of net sales even after absorbing impact of higher tariff costs and the margin compression which occurs from passing through price at our cost level. Note this updated guidance reflects the robust sales performance we’ve seen so far including a full year of Nissans and pass through of pricing to cover tariffs and will result in higher earnings per share from higher sales.

To wrap up, we are very pleased with our sales and earnings growth for the year so far. With earnings up across most segments and improvements in debt leverage as anticipated, the strong performance helped us overcome the impact of additional tariff costs on the business. While the trade situation around tariffs will undoubtedly continue to evolve, we have again proven our ability to manage through the change and grow our business. Thank you for your time. I’ll now turn the call back to Eric for some final comments.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Thank you, Nathan. In closing, let me just spend a moment discussing how we’re viewing things. Even in the face of a challenging economic environment, we have enjoyed several consecutive quarters of strengthening performance. The largest part of our business, the North American aftermarket, continues to demonstrate its resilience. It’s a highly stable market with solid foundations as the addressable market expands through a growing and aging car park.

Within this attractive space, nondiscretionary products tend to do better as motorists are unable to defer repairs, and our value proposition continues to resonate. Our full line coverage of professional grade products and brands technicians trust and a relationship with our trading partners is strong. We’ve added two new legs to our business, providing a combination of diversification and opportunities for synergies. Our recent geographic expansion with the acquisition of Nissens is exceeding our expectations. They enjoy many of the same benefits I just described for us here, both in terms of market dynamics and their place in it.

And the more we work together, the more I’m impressed with their team, with their capabilities and our ability to identify opportunities. And so we remain very bullish about the future. And so that concludes our prepared remarks. We’ll now turn it over to the moderator and open it up for questions.

Robert Smith, Analyst, Center for Performance Investing: Thank

Speaker 4: Our first question comes from Bret Jordan with Jefferies. Your line is open.

Patrick Buckley, Analyst, Jefferies: Hey, good morning, guys. This is Patrick Buckley on for Bret. Thanks for taking our questions.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Morning, Patrick.

Patrick Buckley, Analyst, Jefferies: Still some moving pieces of tariffs, but could you talk a bit more about pricing trends in the second half and maybe a range of same SKU inflation assumptions within the guide?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: We’re not going to get into the specific numbers, but our pricing plans for the second half, most of which are now in place, are really there to cover the tariff. So it will be as we’ve been talking about, our tariff exposure due to our footprint is only on a portion of our sales, and we’re looking to track with what those tariff numbers are, again, at our cost. So you can expect it to be relatively nominal certainly on as you look at spreading it across the entire offering.

Patrick Buckley, Analyst, Jefferies: Got it. That’s helpful. And then within The U. S. Aftermarket, could you talk a bit more on how POS compared to sell in?

And I guess any signs of inventory builds to get ahead of price increases there?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Sure. So what we’ve seen is I’ll take the two segments separately. Vehicle Control in the quarter was up low to mid single digits, which roughly tracks for where it’s been for the year. And so we’re seeing that positive sell through. It’s slightly less than the sell in.

And what that’s reflective of is something we’ve been talking about the last several quarters is it’s not about trying to buy ahead of price increases or any change in stocking strategy. It’s more as our customers are expanding their footprint, both by adding locations and by deepening their assortment in existing locations. We are seeing that just kind of ongoing evolution of increased inventory. So it’s not a stepwise change. It’s not a reaction to get ahead of things.

It’s just their ongoing evolution to a broader assortment. You’re seeing similar things in Temp Control. Temp Control has a little bit more quarter to quarter volatility, as you well know. So in the second quarter of last year, POS was up mid teens. So it was a tough comp.

Here, we’re slightly up over that in the quarter. But year to date, it’s still kind of tracking similar to what we’re seeing in vehicle, which is low singles and kind of smooth across the periods.

Patrick Buckley, Analyst, Jefferies: Great. Very helpful. That’s all from us. Thanks guys.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Thank you.

Speaker 4: Our next question comes from Scott Stember with ROTH Capital Partners. Your line is open.

Jack, Analyst, ROTH Capital Partners: Hi, guys. Good morning. This is Jack on for Scott. Just regarding tariffs, you talked a little bit about it in your prepared remarks. But can you talk about the timing of the impacts?

And also if you could give any segment breakdown on where you see the price increases so far? Or what is impacting more than others going forward?

Nathan Iles, Chief Financial Officer, Standard Motor Products: Hi, it’s Nathan. I guess with regard to timing, maybe just to piggyback off what Eric mentioned, we did see some costs come through in the second quarter. That’s just basically as we started to see some higher cost inventory turn through that had those higher tariffs on it start to come through the P and L. And we took a little bit of time to work through both mitigating actions on the cost side as well as with our customers to get pricing through. So we did have some higher costs in the second quarter.

But now going forward, think that we should be mostly offset fully offset for the most part in the second half of the year. With regard to segments, we really don’t get into kind of profit expectations by segment or pricing and cost. And so just to note that we continue to manage it. We had good numbers in the second quarter to show that.

Jack, Analyst, ROTH Capital Partners: Okay, great. Thank you. And then just a few on Nissens. How did the Nissens business performed compared to your expectations this quarter? How is the whole European aftermarket holding up?

And what sort of synergies between products have you gone through so far?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: So in terms of how it’s meeting or lining up with our expectations, I would say that it is exceeding our expectations in just about every regard, both in terms of its performance as well as how we see moving forward into the future as a combined entity with what they bring and what we bring. So you’re hearing a certain amount from perhaps some of the publicly traded players about how the European aftermarket is right now. We are outperforming it, and there’s a handful of reasons for that. One is that you have to really look at it product type by product type. And so while the whole market is going have its dynamics within what we do, similar to what we always talk about here in North America, where it’s nondiscretionary, they have a big temperature control element, so it’s weather dependent.

The categories will tend to outperform the overall portfolio of distributors. But beyond that, there’s no doubt about it that Nissens is gaining share. And it’s doing that both by getting better penetration within its existing categories, but they’ve also had an excellent track record over the last several years, starting well before they were part of S and P, of adding new categories, getting into new categories, which frankly is a difficult thing to do to get to leverage your brand into something different. And they’ve been able to do that pushing into what we call vehicle control categories. It’s still a relatively small portion of what they do, but it’s been all upside for them as they have been able to get some good placements.

So that’s what they’ve been able to do thus far. Now as you think through the integration, we see from specific to that, the ability to accelerate that because of all different pieces that we bring that can help fast track their launch of new category product types. And so nothing specific to report. We’re in the 2025 is really more the preparation year. We did want to get that quick win out there with the new SKUs added that I spoke about.

But this is really the year as we position ourselves going forward to how do we expand product portfolios on both sides of the ocean. So long answer, but it was a good question because it’s a really critical part of our future, and and it’s it’s absolutely exceeding expectations.

Jack, Analyst, ROTH Capital Partners: Great. Thank you. That was very helpful.

Speaker 4: Our next question comes from Robert Smith with the Center for Performance Investing. Your line is open.

Robert Smith, Analyst, Center for Performance Investing: Thank you. Thanks. Good morning. Thanks for taking my questions. Just circling back to Nissens for a moment.

Is there any color you can give me on the actual numbers in comparison with the prior year in the various segments, the strengths in any of those three categories more than others?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Yes. What we’re seeing in terms of and we’re just going to give it to you in more general terms, maybe Nathan can give a more flavor. But what we’re seeing is that they are tracking up mid- to high single digits over previous years. And what we are seeing is an evolving shift away or not away from, but in strengthening of their newer categories as a percentage of their business. So you go back five or six years, they had nothing in what they call engine efficiency.

And now it’s, I believe, north of 15%, maybe pushing 20%. So it is all of their three subcategories are growing, but the engine efficiency one is growing faster because it’s adding new product types.

Robert Smith, Analyst, Center for Performance Investing: Okay. In the engineered solutions category, you have a breakout of them, and you have category all other. Is it can you give me some ideas to what what what’s in all other?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Sure. All other is combination of things like lawn and garden, hydraulics, stationary equipment. And but the biggest thing in there, all other, is power sports. So things like snowmobile, side by sides, ATVs, and so on.

Robert Smith, Analyst, Center for Performance Investing: Mhmm. And how much is is that of the seven of the all other?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: We don’t go more we don’t go more granular than that, Robert.

Robert Smith, Analyst, Center for Performance Investing: Okay. That’s been a good growth area, though?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: It has a lot of potential. It’s as you’re seeing with some of the other subcategories, seeing some softness this year, as you would expect in especially in something like powersports, which is a purely discretionary type of purchase and a high value purchase. But the long term trends within the subcategories under all other absolutely has some nice legs.

Robert Smith, Analyst, Center for Performance Investing: Okay. And just finally, with the expectation of lower interest rates, are you going to have an opportunity to refinance debt at some point?

Nathan Iles, Chief Financial Officer, Standard Motor Products: Hi, Robert. It’s Nathan. Yes, we’ll keep abreast of changes in interest rates. I would point out, we did the refinancing last year in connection with the Nissens acquisition. We were able to lock in some attractive rates through interest rate swaps at that point.

So we do have some fixed debt at lower good rates, but we’ll continue to watch it. And if it makes sense, we’ll do something.

Robert Smith, Analyst, Center for Performance Investing: Okay. Thanks very much.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Thank you.

Speaker 4: Our next question comes from Carolina Jolley with Gabelli. Your line is open.

Carolina Jolley, Analyst, Gabelli: Good morning. Thank you for taking my question. Just to start, as we look into 2026 and Shawnee is complete and Edwardsville is kind of finalized, should we expect better margin and more efficiency at the, I guess, at the EBIT level?

Nathan Iles, Chief Financial Officer, Standard Motor Products: Yeah. Hi, Caroline. It’s Nathan. So we do expect to get better efficiencies certainly coming out of the automation as well as some freight savings that we would expect just from being in the middle of the country versus on the East Coast for existing vehicle control distribution. That said, we did going back a couple of years note that we would be sort of net higher in cost just because we’re going to have some extra lease expense where we are now leasing ability leasing a building versus owning one, and then we’ll have higher depreciation on a lot of that automation equipment.

So I think we’re still holding with our outlook that we’ll be 3,000,000 to $4,000,000 sort of net higher in cost off that baseline from 2023, and then there’ll be some savings offsets from that number as we go forward.

Carolina Jolley, Analyst, Gabelli: Great. And then just out of curiosity, if we look at the third quarter tariffs versus what you experienced in the second quarter and what you were looking at in the second quarter, are you seeing given kind of what’s come out at this point, have your will your tariff costs actually come down a little?

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Based on what’s been announced and implemented so far, no. I mean, there was, like, some temporary spikes in announcements, for example, when China, for a couple weeks, went very high and then came back down to the 30% reciprocal that they’re currently at, spike is long since absorbed. So now it’s more about any changes that will occur going forward As you’re seeing and one of the things we’ve been saying, just to reiterate and make sure it’s clear, is what we have passed through to this point are tariffs that have taken effect thus far. So a lot of the announcements from last week that have yet to take effect and some of the things that are still being negotiated. Those are into the future.

We’ll continue to execute that playbook. Most of them show things going up slightly, but we’re just going to we’re going to operate as we’ve been stating and rise and fall with what happens.

Carolina Jolley, Analyst, Gabelli: Great. Thanks so much for your time.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: Thank you, Caroline.

Speaker 4: It appears we have no further questions at this time. I’ll turn the program back to the speakers for any additional or closing remarks.

Tony, Moderator/Operator, Standard Motor Products: We want to thank everyone for participating in our conference call today. We understand there was a lot of information presented, and we will be happy to answer any follow-up questions you may have. Our contact information is available on our press release or Investor Relations website. We hope you have a great day. Thank you.

Eric Sills, Chairman and Chief Executive Officer, Standard Motor Products: This

Speaker 4: concludes today’s program. Thank you for your participation. You may disconnect at any time.

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