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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 WASHINGTON, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 or

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ____ to ____

 Commission file number: 001-04743

 Standard Motor Products, Inc.

 (Exact name of registrant as specified in its charter)

 New York

 11-1362020

 (State or other jurisdiction of incorporation or organization)

 (I.R.S. Employer Identification No.)

 37-18 Northern Blvd., Long Island City, New York

 11101

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including area code:

 ( 718) 392-0200

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common Stock, par value $2.00 per share

 SMP

 New York Stock Exchange LLC

 Securities registered pursuant to Section 12(g) of the Act:

 None

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
 growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large Accelerated Filer

 Accelerated Filer

 Non-Accelerated Filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
 financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over
 financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are
 registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate by check mark
 whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of the voting common stock based on the closing price on the New York Stock Exchange on June 30, 2023 (the last business day of registrant's
 most recently completed second fiscal quarter) of $37.52 per share held by non-affiliates of the registrant was $ 737,570,524. For
 purposes of the foregoing calculation only, all directors and officers have been deemed to be affiliates, but the registrant disclaims that any of such are affiliates.

 As of February 20, 2024, there were 21,918,729 outstanding
 shares of the registrant's common stock, par value $2.00 per share.

 DOCUMENTS INCORPORATED BY REFERENCE

 The information required by Part III of this Report is incorporated herein by reference from the registrant's definitive proxy statement relating to its annual meeting of
 stockholders to be held on May 16, 2024.

 STANDARD MOTOR PRODUCTS, INC.

 PART I.

 Page No.

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 PART II.

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 (Reserved)

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART III.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 PART IV.

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Signatures

 In this Annual Report on Form 10-K, "Standard Motor Products," "we," "us," "our," "SMP," and the "Company" refer to Standard Motor Products, Inc. and its subsidiaries, unless the context requires otherwise. This
 Report, including the documents incorporated herein by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
 statements in this Report are indicated by words such as "anticipates," "expects," "believes," "intends," "plans," "estimates," "projects," "strategies" and similar expressions. These statements represent our expectations based on current
 information and assumptions and are inherently subject to risks and uncertainties. Our actual results could differ materially from those which are anticipated or projected as a result of certain risks and uncertainties, including, but not limited
 to, changes or loss in business relationships with our major customers and in the timing, size and continuation of our customers' programs; changes in our supply chain financing arrangements, such as changes in terms, termination of contracts
 and/or the impact of rising interest rates; the ability of our customers to achieve their projected sales; competitive product and pricing pressures; increases in production or material costs, including procurement costs resulting from higher
 tariffs, and inflationary cost increases in raw materials, labor and transportation, that cannot be recouped in product pricing; the performance of the automotive aftermarket and/or other end-markets that we supply; changes in the product mix and
 distribution channel mix; economic and market conditions; successful integration of acquired businesses; our ability to achieve benefits from our cost savings initiatives; product liability matters (including, without limitation, those related to
 asbestos-related contingent liabilities); the effects of disruptions in the supply chain caused by geopolitical risks; as well as other risks and uncertainties, such as those described under Risk Factors, Quantitative and Qualitative Disclosures
 About Market Risk and those detailed herein and from time to time in the filings of the Company with the SEC. Forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the
 forward-looking statements, whether as a result of new information, future events or otherwise. In addition, historical information should not be considered as an indicator of future performance.

 ITEM 1.

 BUSINESS

 Overview

 We are a leading manufacturer and distributor of premium replacement parts in the automotive aftermarket and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets. Our automotive
 aftermarket business is comprised of two segments, Vehicle Control and Temperature Control, while our Engineered Solutions
 Segment offers a broad array of conventional and future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden. We sell our products primarily to
 retailers, warehouse distributors, original equipment manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin America countries.

 Beginning in the first quarter of 2023, we reorganized our business into three operating segments – Vehicle Control, Temperature Control and Engineered Solutions.
 This operating segment structure better aligns our operations with our strategic focus on diversifying our business, provides greater transparency into our positioning to capture opportunities for growth in the future, and provides clarity
 regarding the unique dynamics and margin profiles of the markets served by each segment.

 Our Vehicle Control Segment services our core automotive aftermarket customers through its offering of premium replacement parts within the following major
 product groups:

 (1)

 Engine Management, which includes components for the ignition, emissions and fuel delivery systems of vehicles utilizing an internal combustion engine. Product categories include air injection
 and induction components, air management valves, regulators and solenoids, exhaust gas recirculation (EGR) components, fuel injectors and related components, fuel valves, ignition coils, connectors and sockets, modules, pumps, relays and
 fuses, starting and charging system parts, and vapor and purge components.

 (2)

 Electrical & Safety, which includes components for the electrical and safety systems of vehicles, and are powertrain neutral vehicle technologies. Product categories include electrical
 switches and actuators, chassis and drivetrain sensors such as anti-lock brake and vehicle speed sensors, fluid level sensors, pressure sensors such as tire pressure monitoring, temperature sensors, and sensors for advanced driver
 assistance systems (ADAS), along with battery cables, pigtails, sockets and a wide range of electrical wire, terminals, connectors, and tools for servicing a vehicle's electrical system.

 (3)

 Wire Sets & Other, which includes spark plug wire sets, coil on plug boots and accessories servicing vehicle's ignition system. Certain product categories within this group are in secular
 decline based upon product life cycle.

 Many Vehicle Control systems use on-board computers to monitor inputs from sensing devices located throughout the vehicle. As the complexity of these systems continues to develop and proliferate, we
 expect to benefit from increased demand for our sensors, switches, actuators, valves, solenoids and related parts, which are designed to function with these systems.

 We also expect to benefit from government regulations regarding vehicle safety and emissions. For example, we believe emissions laws and fuel economy regulations have had a positive impact on sales of our ignition, emissions control and fuel
 delivery parts since vehicles not meeting emissions inspection standards may require repairs utilizing parts sold by us. Similarly, as government-mandated safety devices, such as anti-lock braking systems and ADAS, proliferate with new vehicle
 production, we anticipate increased replacement opportunities for many of our products such as ABS sensors, TPMS sensors, traction control products and ADAS replacement parts.

 Our Temperature Control Segment also services our core automotive aftermarket customers through its offering of premium replacement parts within the following
 major product groups:

 (1)

 AC System Components, which includes compressors, air conditioning repair kits, connecting lines, heat exchangers, and expansion devices.

 (2)

 Other Thermal Components, which includes parts that provide engine, transmission, electric drive motor, and battery temperature management.

 We believe our Temperature Control Segment is poised to benefit from the broader adoption of more complex air conditioning systems that will provide passenger comfort regardless of the vehicle's
 powertrain. For example, in addition to cabin comfort, powertrains such as electric vehicles will require cooling systems for the batteries, electronics, motors and other applications.

 The Engineered Solutions Segment services our vehicle and equipment manufacturing customers across diverse global end markets, including on-highway and off-highway applications such as commercial and
 light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden, through an offering of custom-engineered solutions within the following product categories:

 (1)

 Thermal Management Products, which are designed to control the operating temperature of HVAC, battery and heat exchange systems, such as electrical compressors, fans, motors and pumps.

 (2)

 Sensors, covering applications in speed, position, temperature, pressure, level and particulate matter, among others.

 (3)

 Switches, covering applications in electrical performance, position, temperature, pressure, tilt and fluid levels, among others.

 (4)

 Power Distribution, covering applications in power switching, industrial solenoids, and voltage regulators.

 (5)

 Electrification & Electronics, which includes controller area network (CAN) devices, CAN bus wiring and splitting devices, and electronic controls, transmitters and components.

 (6)

 Injection & Fuel Delivery, covering an extensive array of applications in transportation, such as gasoline, diesel and alternative fuels, such as compressed natural gas, liquefied natural gas,
 liquefied petroleum gas, and hydrogen.

 (7)

 Ignition & Emissions, which includes wire, ignition coils and positive crankcase ventilation valves.

 (8)

 Clamping Devices, covering automotive and industrial applications.

 Our Business Strategy

 Our Corporate Mission is to be a leading global supplier of parts and services to diverse end markets for the vehicles of yesterday, today and tomorrow, while leveraging our
 heritage of integrity and respect for all of our stakeholders.

 We sell our products in the automotive aftermarket primarily to retailers and warehouse distributors, who buy directly from us and sell directly to jobber stores, professional technicians and to individual consumers who perform "do-it-yourself"
 repairs on their personal vehicles. We believe that our value proposition is a key competitive advantage in maintaining our position as a strategic partner to our customers and a leader in the automotive aftermarket.

 In the automotive aftermarket, our mission is to be the best full-line, full-service supplier of premium Vehicle Control and Temperature Control products.

 Our Aftermarket Value Proposition

 Premium Quality Products

 Premium Brands

 Full-Line Coverage

 Supply Chain Excellence

 Field Sales Support

 Marketing Support

 World-Class Training

 Basic Manufacturing

 Premium Quality Products.

 We offer professional grade products intended to fit, form and function to standards that meet or exceed the original equipment ("OE") product it replaces. Our products undergo rigorous product qualification, testing our products against
 exacting specifications and performance criteria. In some cases, we have successfully identified and implemented improvements in the durability of our products through the evaluation and analysis of OE product failures in the field.

 Premium Brands.

 We believe that our brands are a key component of our value proposition, and serve to distinguish our premium products from those of our competitors. We market and distribute our products under our own brands, such as:

 We also distribute our products to customers for resale under private labels and the following co-labels:

 In some cases, we have developed our product offering and brand strategies to support our customers' initiatives to market a tiered product assortment designed to satisfy end-user preferences for quality and value. We believe that this
 alignment makes us an invaluable business partner to our customers.

 Full-Line Coverage.

 Our product offering is designed to ensure our automotive aftermarket customers have the parts they need to maintain, service and repair the wide range of vehicles in operation. We offer a full line of critical components for most years, makes,
 models and engine sizes. Our product offering is a reflection of the vehicles in operation, the adoption rates of new vehicle technologies by original equipment manufacturers, the number of miles driven, and the failure rates of parts in service.
 We continuously look to expand our coverage through the addition of late-model applications in existing product categories as well as new product categories in response to evolving vehicle technologies, or that otherwise complement our existing
 offering and have potential for high growth.

 We focus on expanding our product coverage in advanced powertrain technologies, including start and stop technology, cylinder deactivation, variable valve timing, turbochargers, electronic throttle bodies, diesel exhaust emissions control,
 gasoline direct injection, active grill shutters; electrification, such as battery cooling fans, drive battery charging cables and adapters, and electric coolant pumps; and safety related categories, such as anti-lock brake, vehicle speed sensors,
 tire pressure monitoring, park assist sensors and advanced driver assistance components, including blind spot detection sensors, cruise control distance sensors, lane departure sensor cameras and park assist backup cameras.

 In December 2023, we offered over 79,000 total stock keeping units (SKUs) to the automotive aftermarket. Approximately 2,600 of these SKUs were newly introduced in 2023, of which more than half were powertrain neutral vehicle technologies, such
 as cruise control distance sensors, park assist cameras and electronic parking brake actuators.

 Our Vehicle Control offering includes more than seventy product categories for hybrid electric vehicles. We are committed to strategically expanding our product offerings for electric and hybrid vehicles
 to service this important segment.

 Supply Chain Excellence.

 Product availability, including order turn-around time and fill rates, are critical measures of performance in the automotive aftermarket, and we partner with our suppliers and customers, to implement focused initiatives designed to achieve high
 levels of performance against these key metrics. For example, we manage forecasting responsibilities for our major retail customers, and provide twelve month projections to our suppliers to assist in their raw material and capacity planning to
 ensure continuity of supply.

 In 2023, we announced plans to open a new distribution center in Shawnee, Kansas. The new facility, which is expected to have a phased opening beginning in 2024 and be fully operational in early 2025, will expand our total distribution network square footage to meet our growing demands in the automotive
 aftermarket, and integrate state-of-the-art technologies to deliver improved logistics capabilities, operational efficiencies, as well as enhanced employee, customer and supplier experiences. The new Shawnee, Kansas distribution facility will also
 bring our Vehicle Control products geographically closer to our Midwest and West Coast customers, reducing transportation lead-time, and will ultimately provide disaster recovery capabilities for automotive
 aftermarket products across our divisions.

 Field Sales Support.

 We believe our technically-trained salesforce is a key competitive advantage. Our field sales support focuses on educating parts professionals ( e.g., customer team members) and professional technicians
 in highly technical product categories. Our customers depend on our sales personnel as a reliable source for technical information and to assist with sales to their customers ( e.g., jobber stores,
 professional technicians and individual consumers performing "do-it-yourself" repairs). We direct a significant portion of our sales efforts to our customers' customers to generate demand for our products. The structure of our salesforce
 facilitates these efforts, enabling us to implement our sales and marketing programs uniformly throughout the distribution channel.

 Marketing Support.

 We support our customers with superior value-added services such as data-driven category management based on vehicles in operation, sophisticated parts catalogs, available online and through our mobile application, and technical support,
 including selection, assortment and application support for all of our products. We also grant our customers royalty-free licenses to use certain intellectual property rights to advertise, market and sell our products. The licenses primarily
 cover vehicle application data, which is used to identify the parts necessary to service any particular vehicle make, model, year and/or engine size, product information data, including product interchanges, part numbers, attributes, high
 resolution images and videos, dimensions, specifications and other technical descriptions of parts and components.

 World-Class Training.

 We generate demand for our products through our technical training program, which offers training seminars to professional automotive technicians. Our training program is accredited by the National Institute for Automotive Service Excellence
 (ASE) Training Managers Council. Our seminars are taught by ASE certified instructors, and are available in-person and online through webinars and on-demand seminars. Our seminars cover approximately 150 different topics, offered in both English
 and Spanish. Through our training program, we typically teach approximately 60,000 technicians annually how to diagnose and repair vehicles equipped with complex systems related to our products, and we have approximately 16,000 technicians and
 7,000 of our customers' store employees and sales team members who are registered to participate in such sessions through our online platform.

 Basic Manufacturing.

 We are committed to expanding our design, engineering and manufacturing capabilities, and vertically integrating production processes to bring more manufacturing in-house. We engineer, tool and manufacture many of the products we offer for sale
 and the components used in their assembly. We believe this level of vertical integration, in combination with our manufacturing footprint in low cost regions, is a key competitive advantage in terms of the quality, cost and availability of our
 products.

 Examples of vertically integrated processes:

 plastic molding operations

 automated electronics assembly

 stamping and machining operations

 design and fabrication of processing and test equipment

 wire extrusion

 teardown, diagnostics and rebuilding of remanufactured air conditioning compressors, diesel injectors and diesel pumps

 As of December 31, 2023, all of our principal manufacturing facilities maintained quality management systems that were ISO 9001 and/or TS 16949 certified, and ten of our principal manufacturing and distribution facilities maintained
 environmental management systems that were ISO 14001 certified.

 Our manufacturing footprint is geographically diverse with a greater presence in North America and Europe compared to many of our peers. We leverage our footprint to improve our cost position by locating labor-intensive processes within our
 low-cost plants, and by investing in automation and undertaking continuous improvement and expansion initiatives in our domestic facilities.

 Our Engineered Solutions Value Proposition

 We seek to leverage our extensive portfolio of adaptable products and strategically positioned global network of resources to deliver custom-engineered solutions for vehicle
 control and thermal management categories to the diversified end markets we supply.

 Our Engineered Solutions products are sold primarily to original equipment manufacturers and their tier suppliers, system integrators, and original equipment service part operations. Our customers use
 our products in serial production and as service and replacement parts.

 We believe our global network of resources, including our engineering capabilities, advanced quality systems, manufacturing, distribution and technical sales expertise, combined with our customizable solutions for vehicle control and thermal
 management categories, is a key competitive advantage. Our focus on vehicle control and thermal management categories leverages the legacy and leadership position of our automotive aftermarket business to provide a platform for future growth in
 diverse non-aftermarket end markets. We drive growth in this segment by developing new customer relationships, cross-selling to existing customers, introducing new products to new and existing customers, and increasing content per unit. Our
 growth strategy is long-term, and we do not expect growth to be linear given the lengthy nature of design engineering and validation and the period of time between the awarding of new business and the start of production, often which occurs 1-2
 years after business is awarded.

 We believe our automotive aftermarket business benefits from our Engineered Solutions business through accelerated future product development; systems, processes and quality enhancements; the technical
 insights of its original equipment customers; its global footprint; and synergistic mergers and acquisitions.

 We distribute our Engineered Solutions products under the following trade names:

 Strategic Acquisitions

 We selectively pursue strategic acquisitions that strengthen our position in the markets we supply or that diversify our business in target markets or geographies. Among other considerations, we seek acquisitions that align with our core
 competencies; enhance our existing design, engineering and manufacturing capabilities; and vertically integrate key technologies, products and processes.

 For information on recent acquisitions and investments, see Note 2 "Business Acquisitions and Investments" of the Notes to Consolidated Financial Statements in Item 8 of this Report.

 Industry Trends

 The automotive aftermarket is a mature industry that tends to be influenced by trends such as the number of vehicles on the road, the average age of vehicles on the road, and the total number of miles driven per year. Weather extremes like
 unseasonably hot or cool temperatures in the summer can also have an impact on automotive aftermarket product demand.

 In the diverse non-aftermarket end markets we supply, such as commercial and light vehicles, construction, agriculture, power sports and others, other economic factors such as the level of new vehicle sales and production rates, which more
 recently have been impacted by disruptions in the global supply chain and labor, tend to have a more direct impact.

 Our Customers

 In the automotive aftermarket, our customers are many of the largest national and regional retailers and distributors, such as: Advance Auto Parts; Auto Value and Bumper to Bumper (Aftermarket Auto Parts Alliance); Automotive Distribution
 Network; AutoZone; Canadian Tire; Federated Auto Parts; Genuine Parts Company and National Automotive Parts Association; O'Reilly Auto Parts; The Automotive Parts Services Group or The Group; The National Pronto Association; and Uni-Select.

 Engineered Solutions customers are many of the largest original equipment manufacturers and their tier suppliers, system integrators, and original equipment service part operations, such as: Bombardier;
 Carquest: Caterpillar; CNH; Daimler Truck; Eberspacher; Ford; General Motors; Harley-Davidson; IVECO; John Deere; Mobile Climate Control; Polaris; Scania; Volvo/Mack Truck; and Woodward.

 Our three largest individual customers accounted for approximately 59% of our consolidated net sales in 2023. During 2023, O'Reilly Auto Parts, AutoZone and NAPA accounted for 29%, 16%, and 14% of our consolidated net sales, respectively.

 Competition

 Our business operates in highly competitive markets, and we face substantial competition in all of the markets that we supply.

 In the automotive aftermarket, we compete primarily on the basis of product quality, availability (including order turn-around time and fill rate), coverage and price, and value-added services. Our primary competitors are full-line suppliers,
 short- or value-line suppliers, tier suppliers and service part operations of original equipment manufacturers, including car dealerships, and the direct import programs of certain retailers.

 In our Engineered Solutions segment, we compete on the basis of product quality, price and availability (including order turn-around time and fill rate), technical expertise (including product design,
 development and innovation), and lean process improvements. Our primary competitors are global and regional tier suppliers of original equipment manufacturers.

 We believe we differentiate ourselves from our competition through the execution of our value proposition, discussed further above. In addition, in the automotive aftermarket, we offer a variety of strategic customer discounts, allowances and
 incentives to increase the sale of our products. For example, we offer cash discounts for paying invoices in accordance with the specified discounted terms of the invoice. We also offer rebates and discounts to customers as advertising and sales
 force allowances, and allowances for warranty and overstock returns are also provided. These discounts, allowances and incentives are a common practice in the automotive aftermarket, and we intend to continue offering them in response to
 competitive pressures and to strategically support growth in sales of our products.

 Seasonality

 Historically, our operating results have fluctuated by quarter, with the greatest sales occurring in the second and third quarters of the year and revenues generally being recognized at the time of shipment. It is in these quarters that demand
 for our products is typically the highest, specifically in the Temperature Control Segment of our business. The demand for our Temperature Control products during
 the second and third quarters of the year may vary significantly with the summer weather and customer inventories.

 Working Capital and Inventory Management

 We maintain an inventory management system that is designed to reduce inventory requirements, and enhance our ability to compete on the basis of product availability (including order turn-around time and fill rate) and product coverage. We seek
 continuous improvements in this system to improve inventory deployment, enhance collaboration with customers on forecasts and inventory assortments, and further integrate our supply chain with both our customers and suppliers. We also utilize a
 pack to order distribution system, which permits us to retain slow moving items in a bulk storage state until a related order is received. This system reduces the volume of a given part in inventory.

 We face inventory management issues in our automotive A ftermarket business as a result of overstock returns. We permit our automotive A ftermarket
 customers to return new, undamaged products within customer-specific limits (which are generally limited to a specified percentage of their annual purchases from us) in the event that they have overstocked their inventories. We accrue for
 overstock returns as a percentage of sales after giving consideration to recent returns history. In addition, as discussed further above under the heading "Seasonality", the seasonality of our Temperature Control
 Segment requires that we increase our inventory during the winter season in preparation of the summer selling season.

 As such, our profitability and working capital requirements are seasonal due to our sales mix of Temperature Control products. Our working capital requirements typically peak near the end of the second
 quarter, as the inventory build up of air conditioning products is converted to sales, and payments on the receivables associated with such sales have yet to be received. These increased working capital requirements are funded by borrowings from
 our revolving credit facility in our Credit Agreement.

 Suppliers

 We source materials through a global network of suppliers to ensure a consistent, high quality and low cost supply of materials and key components for our product lines. As a result of the breadth of our product offering, we are not dependent
 on any single raw material. Irrespective, disruptions in the global economy have impeded global supply chains, resulting in inflationary cost increases in certain raw materials, labor and transportation, in longer lead times, delays in procuring
 component parts and raw materials, and in prior year inventory increases, which are subsequently being worked down. In response to the global supply chain volatility and inflationary cost increases, we have taken, and continue to take, several
 actions to mitigate the impact by working closely with our suppliers and customers to minimize any potential adverse impacts on our business, including implementing cost savings initiatives and the pass through of higher costs to our customers in
 the form of price increases.

 The principal raw materials purchased by us consist of brass, electronic components, fabricated copper (primarily in the form of magnet and insulated cable), steel magnets, laminations, tubes and shafts, stamped steel parts, stainless steel
 coils and rods, aluminum coils, fittings, rods, cast aluminum parts, lead, steel roller bearings, rubber molding compound, thermo set and thermo plastic molding powders, and chemicals.

 Additionally, we use components and cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps. We obtain cores from exchanges with customers who return cores subsequent to
 purchasing remanufactured products, and from a network of core brokers who sell cores. In addition, we acquire certain materials by purchasing products that are resold into the market, particularly by OEM sources and other domestic and foreign
 suppliers.

 We expect to have an adequate supply of primary raw materials and cores necessary to meet our needs; however, there always are risks and uncertainties with respect to the supply of raw materials and components that could impact their
 availability in sufficient quantities and at cost effective prices to meet our needs.

 Sustainability

 We support and seek continuous improvement in the pursuit of environmental, social and corporate governance practices that embody our culture and what we believe it means to be a good corporate citizen.

 Our Culture

 Our Company was founded in 1919 on the values of integrity, common decency and respect for others. These values are embodied in our Code of Ethics, which has been adopted by the Board of Directors of the Company to serve as a statement of
 principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business. These values also serve as the foundation for our continued focus on many important sustainability issues.

 Environmental Stewardship

 We have made significant strides with respect to our sustainability initiatives, building awareness of the environmental impact of our operations, and challenging ourselves to reduce our impact by reducing our usage of energy and water, reducing
 our generation of waste, increasing our recycling efforts and reducing our Scope 1 and Scope 2 greenhouse gas emissions. Additionally, we believe our product offering contributes to a greener car parc through several key product categories that are
 critical components in automotive systems designed to improve fuel economy and reduce harmful emissions, such as fuel injectors, exhaust gas recirculation valves, sensors and tubes, and evaporative emission control system components. We also bring
 to market alternative energy products, which utilize cleaner burning fuels or are designed for electric or hybrid electric vehicles, and we remanufacture key categories within our product portfolio, such as air conditioning compressors, diesel
 injectors and diesel pumps, through processes that save energy and reduce waste.

 Human Capital

 As of December 31, 2023, we employed approximately 5,200 people, with 2,100 people in the United States and 3,100 people in Mexico, Canada, Poland, the U.K., Germany, Hungary, China and Hong Kong. Of the 5,200 people employed, approximately
 2,600 people are production employees. We operate primarily in non union facilities and have binding labor agreements with employees at other unionized facilities. We have approximately 75 production employees in Edwardsville, Kansas, who will
 eventually migrate to our new Shawnee, KS facility, who are covered by a contract with The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America that expires in August 2026. We also have approximately
 1,200 employees in Mexico who are covered under union agreements negotiated at various intervals. For clarification, the employee numbers described above exclude the employees of our joint venture operations. We believe our facilities are in
 labor markets with ready access to adequate numbers of skilled and unskilled workers, and our relations with our union and non union employees are good.

 Diversity, Equity, Inclusion, and Belonging. We strive to hire, retain and advance a diverse workforce that reflects the communities that we serve. Our recent efforts have been focused in three areas:
 inspiring innovation through an inclusive and diverse culture; expanding our efforts to recruit and hire world-class diverse talent; and identifying strategic partners to accelerate our inclusion and diversity programs.

 Health, Safety and Wellness. We are committed to the health, safety and wellness of our employees. We strive to eliminate workplace incidents, risks and hazards.
 Our health and wellness programs support our employees' physical and mental health by providing tools and resources to encourage healthy behaviors and provide peace of mind in circumstances that may require time away from work.

 Compensation and Benefits. We provide competitive compensation and benefits programs that meet the needs of our employees. In addition to wages and salaries, these programs include annual cash bonuses,
 stock awards, a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, fertility benefits, family care resources, tuition reimbursement, LGBTQ+ inclusive benefits, mental health
 resources and employee assistance programs.

 Talent Development. We invest significant resources to develop the talent of our high potential employees. We deliver employee workshops and mentoring programs, numerous training opportunities, provide
 rotational assignment opportunities, offer continuous learning and development, and implement methodologies to manage performance, provide feedback and develop talent opportunities, all designed to provide employees with the resources they need to
 help achieve their career goals and build management skills. Our annual review process encourages manager and employee conversations throughout the year to enhance growth and development.

 Employee satisfaction and engagement are important elements in our talent retention strategy. From time to time, we conduct employee engagement surveys to identify
 areas where we can enhance our talent retention strategy and employee satisfaction, including fostering a more inclusive and equitable environment. We utilize the results from these engagement surveys to better provide employees with the tools,
 resources and support that they need to succeed and grow in their SMP careers.

 Social Engagement and Community Service

 We believe that building connections between our employees, their families and our communities creates a more meaningful, fulfilling and enjoyable workplace. Through our SMP Cares initiative, we sponsor corporate giving and volunteering
 programs to encourage our employees to connect with our local communities and engage in the local causes that they are passionate about.

 Governance

 Our commitment to sustainability is spearheaded by our Board of Directors. Specifically, our Nominating and Corporate Governance Committee established a sustainability steering committee among our executive officers including our Chief Executive
 Officer & President, Chief Legal Officer & Secretary, Chief Human Resources Officer, and Senior Vice President of North American Operations. This sustainability steering committee is tasked with developing specific strategies to ensure that
 our company-wide operations adhere to our corporate governance values and advance our sustainability objectives globally. The multidisciplinary approach of our steering committee allows it to leverage our expertise in operations, engineering,
 supply chain, human capital management, finance, legal and other fields to push our sustainability initiatives ahead from all angles.

 Continued Commitment

 With each year, we intend to further our commitment to sustainability initiatives, improving our environmental stewardship, finding ways to give back to our communities, and enhancing the diversity and inclusion of our workforce while offering
 opportunities for development. Information on our sustainability initiatives can be found in our most current sustainability report and on our corporate website at ir.smpcorp.com under "Environmental &
 Social Responsibility" and at smpcares.smpcorp.com. Information in our sustainability report and on our corporate websites regarding our sustainability initiatives are referenced for general information
 only and are not incorporated by reference in this Report.

 Available Information

 We are a New York corporation founded in 1919. Our principal executive offices are located at 37 18 Northern Boulevard, Long Island City, New York 11101, and our main telephone number at that location is (718) 392 0200. Our Internet address is
 www.smpcorp.com. We provide a link to reports that we have filed with the SEC. However, for those persons that make a request in writing or by e-mail (financial@smpcorp.com), we will provide free of charge
 our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports and
 other information are also available, free of charge, at www.sec.gov.

 ITEM 1A.

 RISK FACTORS

 You should carefully consider the risks described below. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or other factors not perceived by us
 to present significant risks to our business at this time also may impair our business and results of operations. If any of the stated risks actually occur, they could materially and adversely affect our business, financial condition or operating
 results.

 Risks Related to Our Operations

 We depend on a limited number of key customers, and the loss of any such customer, or a significant reduction in purchases by such customer, could have a material adverse effect on our business, financial
 condition and results of operations.

 Our three largest individual customers accounted for approximately 59% of our consolidated net sales in 2023. During 2023, O'Reilly Auto Parts, AutoZone and NAPA accounted for 29%, 16% and 14% of our consolidated net sales, respectively. The
 loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them could have a materially adverse impact on our business, financial condition and results of operations. In addition, any
 consolidation among our key customers may further increase our customer concentration risk.

 In our automotive aftermarket business, we do not typically enter into long-term agreements with any of our customers. Instead, we enter into a number of purchase order commitments with our aftermarket customers, based on their current or
 projected needs. We have in the past, and may in the future, lose customers or lose a particular product line of a customer due to the highly competitive conditions in the automotive aftermarket industry, including pricing pressures, consolidation
 of customers, customer initiatives to buy direct from foreign suppliers and/or to pursue a private brand strategy, or other business considerations. A decision by any significant customer, whether motivated by competitive conditions, financial
 difficulties or otherwise, to materially decrease the amount of products purchased from us, to change their manner of doing business with us, or to stop doing business with us, including a decision to source products directly from a low cost region
 such as Asia, could have a material adverse effect on our business, financial condition and results of operations. Because our sales are concentrated, and the markets in which we operate are very competitive, we are under ongoing pressure from our
 customers to offer lower prices, extend payment terms, increase marketing allowances and other terms more favorable to these customers. These customer demands have put continued pressure on our operating margins and profitability, resulted in
 periodic contract renegotiation to provide more favorable prices and terms to these customers, and significantly increased our working capital needs.

 Our industry is highly competitive, and our success depends on our ability to compete with suppliers of automotive products, some of which may have substantially greater financial, marketing and other resources
 than we do.

 The automotive industry is highly competitive, and our success depends on our ability to compete with domestic and international suppliers of automotive products. In the automotive aftermarket, we compete primarily with full-line suppliers,
 short- or value-line suppliers, tier suppliers and service part operations of original equipment manufacturers, including car dealerships, and the direct import programs of certain retailers. In the diverse non-aftermarket end markets we supply, we
 compete primarily with global and regional tier suppliers of original equipment manufacturers. Some of our competitors may have larger customer bases and significantly greater financial, technical and marketing resources than we do. These factors
 may allow our competitors to:

 •

 respond more quickly than we can to new or emerging technologies and changes in customer requirements by devoting greater resources than we can to the development, promotion and sale of automotive products and services;

 •

 engage in more extensive research and development;

 •

 sell products at a lower price than we do;

 •

 undertake more extensive marketing campaigns; and

 •

 make more attractive offers to existing and potential customers and strategic partners.

 We cannot assure you that our competitors will not develop products or services that are equal or superior to our products or that achieve greater market acceptance than our products or that in the future other companies involved in the
 automotive industry will not expand their operations into product lines produced and sold by us. We also cannot assure you that additional entrants will not enter the automotive industry or that companies in the industry will not consolidate. Any
 such competitive pressures could cause us to lose market share or could result in significant price decreases and could have a material adverse effect upon our business, financial condition and results of operations.

 There is substantial price competition in our industry, and our success and profitability will depend on our ability to maintain a competitive cost and price structure.

 There is substantial price competition in our industry, and our success and profitability will depend on our ability to maintain a competitive cost and price structure. This is the result of a number of industry trends, including the impact of
 offshore suppliers in the marketplace (particularly in China) which do not have the same infrastructure costs as we do, the consolidated purchasing power of large customers, and actions taken by some of our competitors in an effort to ''win over''
 new business. We have in the past reduced prices to remain competitive and may have to do so again in the future. Price reductions have impacted our sales and profit margins and may do so in the future. Our future profitability will depend in
 part upon our ability to respond to changes in product and distribution channel mix, to continue to improve our manufacturing efficiencies, to generate cost reductions, including reductions in the cost of components purchased from outside
 suppliers, to maintain a cost structure that will enable us to offer competitive prices, and to pass through higher distribution, raw materials and labor costs to our customers. Our inability to maintain a competitive cost structure could have a
 material adverse effect on our business, financial condition and results of operations.

 Our business is seasonal and is subject to substantial quarterly fluctuations, which impact our quarterly performance and working capital requirements.

 Historically, our operating results have fluctuated by quarter, with the greatest sales occurring in the second and third quarters of the year and revenues generally being recognized at the time of shipment. It is in these quarters that demand
 for our temperature control products is typically the highest.

 The demand for our temperature control products during the second and third quarters of the year may vary significantly with the summer weather and customer inventories. As such, our working capital requirements typically peak near the end of
 the second quarter, as the inventory build up of air conditioning products is converted to sales, and payments on the receivables associated with such sales have yet to be received. These increased working capital requirements are funded by
 borrowing from our revolving credit facility in our Credit Agreement.

 Climate-related physical risks, such as changes to weather patterns and conditions may also impact the pattern of seasonality and variability in demand for our Temperature Control products discussed above, which may impact our quarterly
 performance and working capital requirements.

 We may incur material losses and significant costs as a result of warranty-related returns by our customers in excess of anticipated amounts.

 Our products are required to meet rigorous standards imposed by our customers and our industry. Many of our products carry a warranty ranging from a 90-day limited warranty to a lifetime limited warranty, which generally covers defects in
 materials or workmanship, and conformance to agreed upon specifications. In the event that our products fail to conform to these warranties, the affected products may be subject to warranty returns and/or product recalls. Although we maintain a
 comprehensive quality control program, we cannot give any assurance that our products will not suffer from defects or other deficiencies or that we will not experience material warranty returns or product recalls in the future.

 We accrue for warranty returns as a percentage of sales, after giving consideration to recent historical returns. While we believe that we make reasonable estimates for warranty returns in accordance with our revenue recognition policies, actual
 returns may differ from our estimates. We have in the past incurred, and may in the future incur, material losses and significant costs as a result of our customers returning products to us for warranty-related issues in excess of anticipated
 amounts. Deficiencies or defects in our products in the future may result in warranty returns and product recalls in excess of anticipated amounts and may have a material adverse effect on our business, financial condition and results of
 operations.

 Our profitability may be materially adversely affected as a result of overstock inventory related returns by our customers in excess of anticipated amounts.

 In our automotive aftermarket business, we permit overstock returns of inventory that may be either new or non-defective or non-obsolete but that we believe we can re-sell. Customers are generally limited to returning overstocked inventory
 according to a specified percentage of their annual purchases from us. In addition, a customer's annual allowance cannot be carried forward to the upcoming year.

 We accrue for overstock returns as a percentage of sales, after giving consideration to recent historical returns. While we believe that we make reasonable estimates for overstock returns in accordance with our revenue recognition policies,
 actual returns may differ from our estimates. To the extent that overstocked returns are materially in excess of our projections, our business, financial condition and results of operations may be materially adversely affected.

 We may be materially adversely affected by asbestos claims arising from products sold by our former brake business, as well as by other product liability claims.

 In 1986, we acquired a brake business, which we subsequently sold in March 1998. When we originally acquired this brake business, we assumed future liabilities relating to any alleged exposure to asbestos-containing products manufactured by the
 seller of the acquired brake business. In accordance with the related purchase agreement, we agreed to assume the liabilities for all new claims filed after September 2001. Our ultimate exposure will depend upon the number of claims filed against
 us on or after September 2001, and the amounts paid for settlements, awards of asbestos-related damages, and defense of such claims. We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.

 At December 31, 2023, 1,390 cases were outstanding for which we may be responsible for any related liabilities. Since inception in September 2001 through December 31, 2023, the amounts paid for settled claims and awards of asbestos-related
 damages, including interest, were approximately $74.6 million. A substantial increase in the number of new claims, or increased settlement payments, or awards of asbestos-related damages, could have a material adverse effect on our business,
 financial condition and results of operations.

 In accordance with our policy to perform an annual actuarial evaluation in the third quarter of each year, an actuarial study was performed as of August 31, 2023. Based upon the results of the August 31, 2023 actuarial study, and all other
 available information to us, we increased our asbestos liability to the low end of the range, and recorded an incremental pre-tax provision of $23.8 million in earnings (loss) from discontinued operations in the accompanying statement of
 operations. The results of the August 31, 2023 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $84 million to $135.3 million for the
 period through 2065. Future legal costs, which are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations, are estimated, according to the August 31, 2023 study, to range from
 $53.1 million to $105.2 million for the period through 2065.

 Given the uncertainties associated with projecting asbestos-related matters into the future and other factors outside our control, we cannot give any assurance that significant increases in the number of claims filed against us will not occur,
 that awards of asbestos-related damages or settlement awards will not exceed the amount we have in reserve, or that additional provisions will not be required. Management will continue to monitor the circumstances surrounding these potential
 liabilities in determining whether additional reserves and provisions may be necessary. We plan on performing an annual actuarial analysis during the third quarter of each year for the foreseeable future, and whenever events or changes in
 circumstances indicate that additional provisions may be necessary.

 In addition to asbestos-related claims, our product sales entail the risk of involvement in other product liability actions. We maintain product liability insurance coverage, but we cannot give any assurance that current or future policy limits
 will be sufficient to cover all possible liabilities. Further, we can give no assurance that adequate product liability insurance will continue to be available to us in the future or that such insurance may be maintained at a reasonable cost to
 us. In the event of a successful product liability claim against us, a lack or insufficiency of insurance coverage could have a material adverse effect on our business, financial condition and results of operations.

 We may not be able to achieve the benefits that we expect from our cost savings initiatives.

 We expect to realize the continued benefit of discretionary cost reduction measures, along with the continued cost savings anticipated from several ongoing and/or recently completed restructuring and integration initiatives. Due to factors
 outside our control, such as the adoption or modification of domestic and foreign laws, regulations or policies, we may not be able to achieve the level of benefits that we expect to realize in these initiatives, or we may not be able to realize
 these benefits within the time frames we currently expect. Our ability to achieve any anticipated cost savings could be affected by a number of factors such as changes in the amount, timing and character of charges related to such initiatives, or
 a substantial delay in the completion of such initiatives. Failure to achieve the benefits of our cost saving initiatives could have a material adverse effect on us. Our cost savings is also predicated upon maintaining our sales levels.

 Severe weather, natural disasters and other disruptions could adversely impact our operations at our manufacturing and distribution facilities.

 Severe weather conditions and natural disasters, such as hurricanes, tornados, earthquakes and floods, could damage our properties and effect our operations, particularly our major manufacturing and distribution operations at foreign facilities
 in Canada, China, Mexico, Poland, Germany and Hungary and at our domestic facilities in Florida, Indiana, Kansas, South Carolina, Texas, Virginia, and Wisconsin. Moreover, global climate change may cause these natural disasters to occur more
 frequently and/or with more intense effects, which could prevent us from, or cause delays in our ability to, manufacture and deliver products to our customers, and/or cause us to incur additional costs.

 In addition, our business and operations could be materially adversely affected in the event of other serious disruptions at these facilities due to fire, electrical blackouts, power losses, telecommunications failures, wars, terrorist attack or
 similar events. Any of these occurrences could impair our ability to adequately manufacture or supply our customers due to all or a significant portion of our equipment or inventory being damaged. If our existing manufacturing or distribution
 facilities become incapable of producing and supplying products for any reason, we may not be able to satisfy our customers' requirements and we may lose revenue and incur significant costs and expenses that may not be recoverable through our
 business interruption insurance.

 Disruptions in the supply of raw materials, manufactured components, or equipment could materially and adversely affect our operations and cause us to incur significant cost increases.

 We source various types of raw materials, finished goods, equipment, and component parts from suppliers as part of a global supply chain, and we may be materially and adversely affected by the failure of those suppliers to perform as expected.
 Although we have had an adequate supply of purchased supplier raw materials, finished goods, equipment and component parts, disruptions in the global economy have impeded global supply chains, resulting in longer lead times and delays in procuring
 component parts and raw materials, and inflationary cost increases in certain raw materials, labor and transportation. In response to the global supply chain volatility and inflationary cost increases, we have taken, and continue to take, several
 actions to mitigate the impact by working closely with our suppliers and customers to minimize any potential adverse impacts on our business, including initiating cost savings initiatives and the pass through of higher costs to our customers. We
 cannot assure that unforeseen future events in the global supply chain affecting the availability of materials and components, and/or increasing commodity pricing, will not have a material adverse effect on our business, financial condition and
 results of operations.

 Additionally, supplier non-performance may consist of delivery delays or failures caused by production issues or delivery of non-conforming products. Our suppliers' ability to supply products to us is also subject to a number of risks,
 including the availability and cost of raw materials, the destruction of their facilities, work stoppages, cybersecurity incidents affecting their information systems or other limitations on their business operations, which could be caused by any
 number of factors, such as labor disruptions, financial distress, severe weather conditions and natural disasters, social unrest, economic and political instability, and public health crises, including the occurrence of a contagious disease or
 illness, such as the COVID-19 pandemic, war, terrorism or other catastrophic events. In addition, our failure to promptly pay, or order sufficient quantities of inventory from our suppliers may increase the cost of products we purchase or may lead
 to suppliers refusing to sell products to us at all. Our efforts to protect against and to minimize these risks may not always be effective.

 Our Operations could be adversely affected by interruptions or breaches in the security of our computer and information systems.

 We rely on information systems throughout our organization to conduct day-to-day business operations, including the management of our supply chain and our purchasing, receiving and distribution functions. We also routinely use our information
 systems to send, receive, store, access and use sensitive data relating to our Company and its employees, customers, suppliers, and business partners, including intellectual property, proprietary business information, and other sensitive
 materials. Additionally, we rely on our information systems to enable many of our employees to work remotely as a result of more recent policies and practices enacted by us.

 Despite security measures designed to prevent and mitigate the risk of cybersecurity incidents, our information systems, and the systems of our customers, suppliers and business partners, may be vulnerable to such incidents, including
 interruptions, outages, data breaches, phishing attacks, ransomware attacks, unauthorized access, attempts to hack into our network, and computer viruses. Moreover, the technologies and techniques used to carry out cyber-attacks are continuously
 evolving, making it difficult to detect these changes or implement adequate measures in time to prevent or mitigate the impact of an attack. Due to the foregoing, though we have not experienced a material cybersecurity incident in 2023, we cannot
 guarantee that there will be no future cybersecurity incident that causes a material adverse effect on our information systems, or that of our customers, suppliers and other business partners.

 In the event that our information systems, or the systems of our customers, suppliers or business partners, are subject to such incidents, we could experience errors, interruptions, delays, and/or the cessation of services in key portions of our
 information systems. If critical information systems fail or otherwise become unavailable, our ability to process orders, maintain proper inventory levels, collect accounts receivable and disburse funds could be adversely affected. The foregoing
 matters could also cause significant damage to our business reputation, affect our relationships with our business partners, lead to claims against us, and/or subject us to fines or other penalties assessed by governmental authorities.
 Additionally, we may be required to incur substantial costs to remediate the damage caused by these disruptions or protect us against future cybersecurity incidents. Depending on the nature and magnitude of these events, they could have a material
 and adverse effect on our business, financial condition or results of operations.

 The transition risks associated with global climate change may cause us to incur significant costs.

 In addition to the physical risks described above, global climate change has brought about certain risks associated with the anticipated transition to a lower-carbon economy, such as regulatory changes affecting vehicle emissions and fuel
 efficiency requirements, technological changes in vehicle architectures, changes in consumer demand, carbon taxes, greenhouse gas emissions tracking, and regulation of greenhouse gas emissions from certain sources. Any regulatory changes aimed to
 reduce or eliminate greenhouse gas emissions may require us to incur increased operating costs, such as to purchase and operate emissions control systems or other such technologies to comply with applicable regulations or reporting requirements.
 These regulations, as well as shifts in consumer demand due to public awareness and concern of climate change, could affect the timing and scope of their proliferation and may also adversely impact our sales of products designed for the internal
 combustion engines. As we monitor the rapid developments in this area, we may be required to adjust our business strategy to address the various transition risks posed by climate change.

 Failure to maintain the value of our brands could have an adverse effect on our reputation, cause us to incur significant costs and negatively impact our business.

 Our brands are a key component of our value proposition, and serve to distinguish our premium products from those of our competitors. In our automotive aftermarket business, we believe that our success depends, in part, on maintaining and
 enhancing the value of our brands and executing our brand strategies, which are designed to drive end-user demand for our products and make us a valued business partner to our aftermarket customers through the support of their marketing
 initiatives. A decline in the reputation of our brands as a result of events, such as deficiencies or defects in the design or manufacture of our products, or from legal proceedings, product recalls or warranty claims resulting from such
 deficiencies or defects, may harm our reputation as a manufacturer and distributor of premium automotive parts, reduce demand for our products and adversely affect our business.

 Our revenue and results of operations may suffer upon the bankruptcy, insolvency or other credit failure of a significant customer.

 Most of our customers buy products from us on credit. We extend credit to customers and offer extended payment terms based upon competitive conditions in the marketplace and our assessment and analysis of creditworthiness. General economic
 conditions, competition and other factors may adversely affect the solvency or creditworthiness of our customers. Higher interest rates, inflationary cost increases in raw materials, labor and transportation and a general worsening of economic
 conditions have put financial pressure on many of our customers and may threaten certain customers' ability to maintain liquidity sufficient to repay their obligations to us as they become due. The bankruptcy, insolvency or other credit failure of
 any customer that has a substantial amount owed to us could have a material adverse effect on our operating revenue and results of operations. We recorded a $7 million pre-tax charge in 2022 to reduce our outstanding accounts receivable balance
 from a customer that filed for bankruptcy in the first quarter of 2023 to our estimated recovery amount.

 In our Engineered Solutions business, our supply agreements with our customers are generally requirements contracts, and a decline in the production requirements of any of our significant customers
 could adversely impact our revenues and profitability.

 In our Engineered Solutions business, our customers generally agree to purchase their requirements for specific products, and we receive volume forecasts of their requirements, but not long-term firm volume commitments.
 Furthermore, our customers typically reserve the right to change, delay or cancel their orders for products, and we have limited recourse in such events. Changes, delays or cancellations by a significant customer or by a number of customers could
 adversely impact our results of operations by reducing the volumes of products we manufacture and sell, by causing a delay in the recovery of expenditures for raw materials and component parts procured to satisfy such orders, or by reducing our
 asset utilization, resulting in lower profitability.

 We also make key decisions based on our estimates of our customers' requirements, including in planning our production schedules, raw material and component part purchases, personnel needs and other resource requirements.
 Changes in demand for our customers' products would likely reduce our customers' requirements and adversely impact our ability to accurately estimate their requirements in the future. Any significant decrease or delay in customer orders could have
 a material adverse effect on our business, financial condition and results of operations.

 Our inability to attract or retain key employees may have an adverse effect on our business, financial condition and results of operations.

 Our success is dependent upon our ability to attract, retain and motivate certain key employees, including our management and our skilled workforce of engineers, technically-trained salesforce employees and
 other qualified personnel. Many of our key employees have many years of experience with our Company and would be difficult to replace without allotment of a significant amount of time for knowledge transfer.
 Furthermore, although w e believe our facilities are in labor markets with ready access to adequate numbers of skilled and unskilled workers, we compete with other businesses to fill many of our hourly
 positions in our distribution facilities, which historically have had high turnover rates, which can lead to increased training and retention costs, particularly in a competitive and shrinking labor market. We cannot be certain that we will be
 able to continue to attract or retain our key employees, which could cause us to fail to execute our value proposition, fail to achieve operational efficiencies, and incur increased labor costs, which could have an adverse effect our business,
 financial condition and results of operations.

 Risks Related to Liquidity

 We are exposed to risks related to our receivables supply chain financing arrangements.

 We are party to several supply chain financing arrangements, in which we may sell certain of our customers' trade accounts receivable without recourse to such customers' financial institutions. To the extent that these arrangements are
 terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays or failures in collecting trade accounts receivables.

 The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate on the sale of the underlying trade accounts receivable. If the benchmark reference rate
 increases significantly, we may be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.
 Depending upon the level of sales of receivables pursuant these agreements, a hypothetical, instantaneous and unfavorable change of 100 basis points in the reference rate may have an approximate $8.3 million negative impact on our earnings or cash
 flows.

 A significant increase in our indebtedness, or in interest rates, could negatively affect our financial condition, results of operations and cash flows.

 We have a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders. The Credit Agreement provides for a $500 million credit facility comprised of a $100 million term loan facility and a $400 million
 multi-currency revolving credit facility available in U.S. Dollars, Euros, Sterling, Swiss Francs, Canadian Dollars and other currencies as agreed to by the administrative agent and the lenders. As of December 31, 2023, our total outstanding
 indebtedness was $156.2 million, including outstanding borrowings under the Credit Agreement of $156 million, consisting of current borrowings of $5 million and long-term borrowings of $151 million.

 Borrowings under our Credit Agreement bear interest, at the Company's election, at a rate per annum equal to Term SOFR plus 0.10% plus an applicable margin, or an alternate base rate plus an applicable margin, where the alternate base rate is
 the greater of the prime rate, the federal funds effective rate plus 0.50%, and one-month Term SOFR plus 0.10% plus 1.00%. The applicable margin for the term benchmark borrowings ranges from 1.0% to 2.0%, and the applicable margin for alternate
 base rate borrowings ranges from 0% to 1.0%, in each case, based on the total net leverage ratio of the Company and its restricted subsidiaries.

 The significant increase in our indebtedness could:

 •

 increase our borrowing costs;

 •

 limit our ability to obtain additional financing or borrow additional funds;

 •

 require that a substantial portion of our cash flow from operations be used to pay principal and interest in our indebtedness, instead of funding working capital, capital expenditures, acquisitions, dividends, stock repurchases, or other
 general corporate purposes;

 •

 limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

 •

 increase our vulnerability to general adverse economic and industry conditions.

 In addition, the Company's obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries (each, a "Guarantor"), and secured by a first priority perfected security interest in substantially all of the existing and
 future personal property of the Company and each Guarantor, subject to certain exceptions. The collateral security described above also secures certain banking services obligations and interest rate swaps and currency or other hedging obligations
 of the Company owing to any of the then existing lenders or any affiliates thereof. Concurrently with the Company's entry into the Credit Agreement, the Company also entered into a seven year interest rate swap agreement with Wells Fargo Bank,
 N.A., Co-Syndication Agent and lender under the Credit Agreement, on $100 million of borrowings under the Credit Agreement. The interest rate swap agreement matures in May 2029.

 The Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other
 payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets. The Credit Agreement also contains customary events of default. If we were default
 on any of these covenants, or on any of our indebtedness, if interest rates were to significantly increase, or the financial institution that is a party to our interest rate swap agreement were to default, or if we are unable to obtain necessary
 liquidity, our business could be adversely affected.

 We may not be able to generate the significant amount of cash needed to satisfy our obligations or maintain sufficient liquidity through borrowing capacities.

 Our ability either to make payments on or to refinance our indebtedness, or to fund planned capital expenditures and research and development efforts, will depend on our ability to generate cash in the future. Our ability to generate cash is in
 part subject to:

 •

 general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control;

 •

 the ability of our customers to pay timely the amounts we have billed; and

 •

 our ability to sell receivables under supply chain financing arrangements.

 The foregoing factors could result in reduced cash flow, which could have a material adverse effect on us. When cash generated by earnings is not sufficient for the Company's liquidity needs, the Company seeks external financing. Our access to
 funding sources in amounts adequate to finance our activities on terms that are beneficial to us could be impaired by factors that affect us specifically or the economy generally. During periods of disruptions in the credit and capital markets,
 potential sources of external financing could be reduced, and borrowing costs could increase. A significant downgrade in the company's credit ratings could increase its borrowing costs and limit access to capital.

 Based on our current level of operations, we believe our cash flow from operations, available cash and available borrowings under our Credit Agreement will be adequate to meet our future liquidity needs for at least the next twelve months.
 Significant assumptions underlie this belief, including, among other things, that we will be able to mitigate the future impact, if any, of disruptions in global supply chains, which have resulted in longer lead times and delays in procuring
 component parts and raw materials, and significant inflationary cost increases in certain raw materials, labor and transportation, and that there will be no material adverse developments in our business, liquidity or capital requirements. If we
 are unable to fund our operations through earnings or external financing, we will be forced to adopt an alternative strategy that may include actions such as:

 •

 deferring, reducing or eliminating future cash dividends;

 •

 reducing or delaying capital expenditures or restructuring activities;

 •

 reducing or delaying research and development efforts;

 •

 selling assets;

 •

 deferring or refraining from pursuing certain strategic initiatives and acquisitions;

 •

 refinancing our indebtedness; and

 •

 seeking additional funding.

 We cannot assure you that, if material adverse developments in our business, liquidity or capital requirements should occur, our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under
 our Credit Agreement in amounts sufficient to enable us to pay the principal and interest on our indebtedness, or to fund our other liquidity needs. In addition, if we default on any of our indebtedness, or breach any financial covenant in our
 Credit Agreement, our business could be adversely affected.

 We have significant goodwill and other intangible assets, and future impairment of these assets could have a material adverse impact on our financial condition and results of operations.

 A significant portion of our long-term assets consists of goodwill and other intangible assets recorded as a result of past acquisitions. We do not amortize goodwill and certain other intangible assets having indefinite lives, but rather test
 them for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount. The process of evaluating the potential impairment of goodwill and other
 intangible assets requires significant judgement, specifically with respect to applying assumptions and estimates to the analysis of identifiable intangibles and long lived asset impairment including projecting revenues, interest rates, tax rates
 and the cost of capital. Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods. These changes could result in impairment charges against
 our goodwill and other intangible assets. In the event that we determine that our goodwill or other intangible assets are impaired, we may be required to record a significant charge to earnings that could adversely affect our financial condition
 and results of operations.

 Risks Related to External Factors

 We conduct our manufacturing and distribution operations on a worldwide basis and are subject to risks associated with doing business outside the United States.

 We have manufacturing and distribution facilities in many countries, including Canada, Mexico, Poland, Germany and Hungary, as well as joint-ventures in China. There are a number of risks associated with doing business internationally,
 including: (a) exposure to local economic and political conditions; (b) social unrest such as risks of terrorism or other hostilities; (c) currency exchange rate fluctuations and currency controls; (d) the effect of potential changes in U.S. trade
 policy and international trade agreements; and (e) the potential for shortages of trained labor.

 In particular, historically there has been social unrest in Hong Kong and Mexico and any recurrence, or increased violence in or around our facilities in such countries could be disruptive to our business operations at such facilities, or
 present risks to our employees who may be directly affected by the violence and may result in a decision by them to relocate from the area, or make it difficult for us to recruit or retain talented employees at such facilities.

 Furthermore, changes in U.S. trade policy, particularly as it relates to China, have resulted in the assessment of increased tariffs on goods that we import into the United States, and have caused uncertainty about the future of free trade
 generally. We benefit from free trade agreements, such as the U.S.-Mexico-Canada Agreement (USMCA). The repeal or modification of the USMCA or further increases to tariffs on goods imported into the United States could increase our costs to
 source materials, component parts and finished goods from other countries. The likelihood of such occurrences and their potential effect on us is unpredictable and may vary from country to country. Any such occurrences could be harmful to our
 business and our financial results.

 We may incur liabilities under government regulations and environmental laws, which may have a material adverse effect on our business, financial condition and results of operations.

 Domestic and foreign political developments and government laws and regulations directly affect automotive consumer products in the United States and abroad. In the United States, these laws and regulations include standards relating to vehicle
 safety, fuel economy and emissions, among others. Furthermore, increased public awareness and concern regarding climate change may result in new laws and regulations designed to reduce or mitigate the effects of greenhouse gas emissions or
 otherwise effect the transition to a lower-carbon economy. The modification of existing laws, regulations or policies, or the adoption of new laws, regulations or policies could have a material adverse effect on our business, financial condition
 and results of operations.

 Our operations and properties are subject to a wide variety of increasingly complex and stringent federal, state, local and international laws and regulations, including those governing the use, storage, handling, generation, treatment,
 emission, release, discharge and disposal of materials, substances and wastes, the remediation of contaminated soil and groundwater and the health and safety of employees. Such environmental laws, including but not limited to those under the
 Comprehensive Environmental Response Compensation & Liability Act, may impose joint and several liability and may apply to conditions at properties presently or formerly owned or operated by an entity or its predecessors, as well as to
 conditions at properties at which wastes or other contamination attributable to an entity or its predecessors have been sent or otherwise come to be located.

 The nature of our operations exposes us to the risk of claims with respect to such matters, and we can give no assurance that violations of such laws have not occurred or will not occur or that material costs or liabilities will not be incurred
 in connection with such claims. We are currently monitoring our environmental remediation efforts at one of our facilities and our reserve balance related to the environmental clean-up at this facility is $1.4 million at December 31, 2023. The
 environmental testing and any remediation costs at such facility may be covered by several insurance policies, although we can give no assurance that our insurance will cover any environmental remediation claims. We also maintain insurance to
 cover our existing U.S. and Canadian facilities. We can give no assurance that the future cost of compliance with existing environmental laws and the liability for known environmental claims pursuant to such environmental laws will not give rise to
 additional significant expenditures or liabilities that would be material to us. In addition, future events, such as new information, changes in existing environmental laws or their interpretation, and more vigorous enforcement policies of federal,
 state or local regulatory agencies, may have a material adverse effect on our business, financial condition and results of operations.

 Our future performance may be materially adversely affected by changes in technologies and improvements in the quality of new vehicle parts.

 If we do not respond appropriately to changes in automotive technologies, such as the adoption of new technologies and systems to make traditional, internal-combustion-engine vehicles more efficient, or the adoption of electric or hybrid
 electric vehicle architectures, we could experience less demand for our products thereby causing a decline in our results of operations or deterioration in our business and financial condition, and we may have a material adverse effect on our
 long-term performance.

 In addition, the size of the automotive aftermarket depends, in part, upon the growth in number of vehicles on the road, increase in average vehicle age, change in total miles driven per year, new or modified environmental and vehicle safety
 regulations, including fuel economy and emissions reduction standards, increase in pricing of new cars and new car quality and related warranties. The automotive aftermarket has been negatively impacted by the fact that the quality of more recent
 automotive vehicles and their component parts (and related warranties) has improved, thereby lengthening the repair cycle. Generally, if parts last longer, there will be less demand for our aftermarket products and the average useful life of
 automotive parts has been steadily increasing in recent years due to innovations in products and technology. In addition, the introduction by original equipment manufacturers of increased warranty and maintenance initiatives has the potential to
 decrease the demand for our aftermarket products. When proper maintenance and repair procedures are followed, newer air conditioning (A/C) systems in particular are less prone to leak resulting in fewer A/C system repairs. These factors could
 have a material adverse effect on our business, financial condition and results of operations.

 ITEM 1B.

 UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C.

 CYBERSECURITY

 Cybersecurity Risk Management and Strategy

 We maintain an enterprise-wide approach to risk management through which we identify, manage and mitigate significant risks, including those related to our information systems. Our cybersecurity risk management program, which applies to our
 global operations, focuses on our people, processes and technology, and is designed to secure our information systems by preventing, detecting and responding to current and emerging cybersecurity threats.

 Our employees are a key element of our cybersecurity risk management program. All of our employees are required to adhere to our cybersecurity practices, and undertake routine training to raise awareness and reinforce safe practices. Our
 training program includes bi-annual online training courses, group tabletop exercises, phishing and malicious email simulations, and information security bulletins. We also maintain policies that govern, and provide specific guidance to employees
 regarding how they may use our information systems.

 Another key element of our cybersecurity risk management program is our use of processes and technologies to create information security safeguards and controls, and target specific users or business needs. Our processes and technologies
 include firewalls, email security software and encryption, endpoint detection and response, access controls, backup and recovery procedures, system patches and updates, vulnerability scanning, penetration testing by third party vendors, incident
 response procedures, and internal and external audits of our information systems.

 Through these internal and external assessments, we continuously identify areas for remediation and opportunities to improve the security of our information systems, including by evaluating our program against industry standards and best
 practices, such as the Cybersecurity Framework established by the National Institute of Standards and Technology (NIST) and the CIS Critical Security Controls established by the Center for Internet Security. We also track key performance indicators
 that we believe are indicative of the effectiveness of our cybersecurity risk management program.

 For additional information related to cybersecurity risks that could have a material and adverse effect on our business, financial condition or results of operations, see "Our operations could be adversely affected by interruptions or breaches
 in the security of our computer and information systems" in Item 1A of this Report.

 Cybersecurity Governance

 The Audit Committee of our Board of Directors oversees the adequacy and effectiveness of our internal controls, policies and procedures regarding cybersecurity, information security and data protection, and compliance with applicable laws and
 regulations concerning privacy. Our Chief Information Officer ("CIO"), in turn, is responsible for managing the Company's cybersecurity risk management program and incident response procedures. On a quarterly basis, and more frequently as
 circumstances warrant, our CIO briefs the Audit Committee on our cybersecurity risks, our strategies for preventing, detecting, responding to and mitigating such risks, including the effectiveness of our incident response procedures, and our
 information security controls. Our CIO has extensive knowledge and expertise regarding our information systems and security, having served in a variety of senior information technology positions across our organization for more than thirty years,
 and as an executive officer of the Company since 2006.

 Additionally, our CIO leads an incident response team ("IRT"), charged with the on-going management of our cybersecurity program. This team is responsible for the prevention, mitigation, detection and remediation of cybersecurity risks and
 incidents affecting our operations pursuant to our incident response procedures. The IRT is composed of information security professionals, who collectively bring decades of relevant information security and cybersecurity experience to their roles.
 In the event that a cybersecurity incident is detected, the IRT performs a multi-factor, risk-based assessment to determine the appropriate level of response. Depending upon the results of the assessment, including the nature and magnitude of the
 event, our incident response procedures provide for oversight and management of an incident by the IRT, under the direction of the CIO, or, in the event of escalation, under the direction of the executive officers of the Company, with reporting to
 and oversight by the Audit Committee.

 ITEM 2.

 PROPERTIES

 We maintain our executive offices in Long Island City, New York. The table below describes our principal facilities as of December 31, 2023.

 Location

 State or

 Country

 Principal Business Activity

 Approx.

 Square

 Feet

 Owned or

 Expiration

 Date

 of Lease

 Bialystok

 Poland

 154,800

 2027

 Disputanta

 VA

 411,000

 Owned

 Edwardsville

 KS

 363,500

 Owned

 Ft. Lauderdale

 FL

 23,300

 Owned

 Ft. Lauderdale

 FL

 30,000

 Owned

 Greenville 2

 SC

 184,500

 Owned

 Independence 2

 KS

 337,400

 Owned

 Long Island City

 NY

 Administration

 75,800

 2033

 McAllen

 TX

 120,300

 2027

 Mishawaka 2

 IN

 153,100

 Owned

 Reynosa 2

 175,000

 2025

 Reynosa 2

 153,000

 2031

 Shawnee 3

 KS

 574,700

 2033

 Foshan City

 China

 361,500

 2028

 Lewisville

 TX

 Administration and Distribution

 415,000

 2034

 Reynosa 2

 82,000

 2026

 Reynosa 2

 117,500

 2026

 Reynosa

 111,800

 2024

 St. Thomas

 42,500

 Owned

 Kirchheim-Teck

 Germany

 27,500

 2031

 P cel

 Hungary

 59,500

 Owned

 Milwaukee

 WI

 84,000

 2028

 Sheboygan Falls

 WI

 22,500

 2025

 Tijuana

 13,800

 2026

 Tijuana

 30,400

 2026

 Wuxi

 China

 27,600

 2029

 Other

 Mississauga

 Administration and Distribution

 82,400

 2028

 Irving

 TX

 Training Center

 13,400

 2027

 1 It is our intention to extend the leases that are set to expire in 2024.

 2 These facilities are also utilized by the Engineered Solutions operating segment.

 3 This facility is expected to have a phased opening beginning in 2024 and be fully operational in early 2025, and once operational, it will also be utilized by the
 Temperature Control and Engineered Solutions operating segments.

 ITEM 3.

 LEGAL PROCEEDINGS

 The information required by this Item is incorporated herein by reference to the information set forth in Item 8, "Financial Statements and Supplementary Data" of this Report under the caption "Asbestos" appearing in Note 23, "Commitments and
 Contingencies" of the Notes to Consolidated Financial Statements in Item 8 of this Report.

 ITEM 4.

 MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5.

 MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our common stock trades publicly on the New York Stock Exchange ("NYSE") under the trading symbol "SMP." The last reported sale price of our common stock on the NYSE on February 20, 2024 was $40.23 per share. As of February 20, 2024, there
 were 497 holders of record of our common stock.

 Dividends are declared and paid on the common stock at the discretion of our Board of Directors (the "Board") and depend on our profitability, financial condition, capital needs, future prospects, and other factors deemed relevant by our Board.
 Our Credit Agreement permits dividends and distributions by us provided specific conditions are met. For information related to our Credit Agreement, see Note 11, "Credit Facilities and Long-Term Debt," of the Notes to Consolidated Financial
 Statements in Item 8 of this Report.

 There have been no unregistered offerings of our common stock during the fourth quarter of 2023.

 Stock Performance Graph

 The following graph compares the five year cumulative total return on the Company's Common Stock to the total returns on the Standard & Poor's 500 Stock Index and the S&P 1500 Auto Parts & Equipment Index, which is a combination of
 automotive parts and equipment companies within the S&P 400, the S&P 500 and the S&P 600. The graph shows the change in value of a $100 investment in the Company's Common Stock and each of the above indices on December 31, 2018 and the
 reinvestment of all dividends. The comparisons in this table are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of the Company's Common Stock or the referenced
 indices.

 SMP

 S&P 500

 S&P 1500 Auto

 Parts &

 Equipment

 2018

 2019

 2020

 2021

 2022

 2023

 * Source: S&P Capital IQ

 ITEM 6.

 (RESERVED)

 ITEM 7.

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 Overview of Financial Performance

 The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto. This discussion summarizes the significant factors affecting our results of operations and the financial condition of our
 business during each of the fiscal years in the three-year period ended December 31, 2023.

 (In thousands, except per share data)

 2023

 2022

 2021

 $

 $

 $

 Gross profit

 388,826

 382,539

 376,931

 Gross profit %

 28.6

 %

 27.9

 %

 %

 Operating income

 92,677

 104,135

 128,999

 Operating income %

 6.8

 %

 7.6

 %

 9.9

 %

 Earnings from continuing operations before income taxes

 81,716

 98,332

 130,465

 Provision for income taxes

 63,348

 73,126

 99,421

 Loss from discontinued operations, net of income taxes

 (28,996

)

 (17,691

)

 (8,467

)

 Net earnings attributable to noncontrolling interest

 Net earnings attributable to SMP

 Per share data attributable to SMP – Diluted:

 $

 2.85

 $

 3.30

 $

 4.39

 Discontinued operations

 (1.31

)

 (0.80

)

 (0.37

)

 Net earnings per common share

 $

 1.54

 $

 2.50

 $

 4.02

 Consolidated net sales for 2023 were $1,358.3 million, a decrease of $13.5 million, or 1% compared to net sales of $1,371.8 million in 2022; while consolidated net sales for 2022 increased $73 million, or 5.6%, compared to net sales of
 $1,298.8 million in 2021. Consolidated net sales decreased in our Vehicle Control and Temperature Control operating segments, while net sales in our Engineered Solutions operating segment increased when compared to the comparable period in the
 prior year.

 Our net sales performance in 2023 reflects the impact of multiple factors including:

 •

 lower sales in our Vehicle Control operating segment reflecting the impact of lower sales to a customer that filed for bankruptcy in the first quarter, as well as the negative impact of lower customer pipeline orders and softer fourth
 quarter sales,

 •

 lower sales in our Temperature Control operating segment reflecting the impact of a slow start to the season caused by a rainy spring and cool early summer temperatures across key markets. Although customer demand and net sales
 increased significantly in the third quarter of 2023 as summer temperatures increased, the strong third quarter 2023 net sales were not enough to offset the slow start to the season, and

 •

 strong demand and new business wins in our Engineered Solutions operating segment with continued optimism about the long-term growth potential of the complementary markets served in this newly created segment.

 Gross margins as a percentage of net sales in 2023 was 28.6% as compared to 27.9% in 2022. The gross margin percentages in 2023 increased year-over-year in each of our Vehicle Control, Temperature Control and Engineered Solutions operating
 segments. Overall, the gross margin increase as a percentage of sales in 2023 reflects the positive impact of increased pricing, improved operating performance, and the favorable customer sales mix in Engineered Solutions, which more than offset
 ongoing inflationary increases in certain raw materials, labor and transportation costs, as well as the lower fixed cost absorption due to lower production levels than those achieved in 2022 as we worked down inventory levels, and the weakening
 of the U.S. dollar on our international operations. While we anticipate continued margin pressure resulting from inflationary headwinds, we believe that our annual cost savings initiatives coupled with our ability to pass through higher prices
 to our customers should help to offset much of this impact to our gross margins.

 Operating margin as a percentage of net sales in 2023 was 6.8% as compared to 7.6% in 2022. Included in our operating margin were selling, general and administrative expenses ("SG&A") of $293.6 million, or 21.6% of net sales in 2023,
 $276.6 million, or 20.2% of net sales in 2022, and $247.5 million, or 19.1% of net sales in 2021. The higher SG&A expenses in 2023 is principally due to the impact of (1) higher interest rate related costs of $14 million incurred in our
 supply chain financing arrangements and (2) higher distribution costs, all of which more than offset the positive 2023 comparative impact of the $7 million charge recorded in 2022 to reduce our outstanding accounts receivable balance from a
 customer that filed for bankruptcy in the first quarter of 2023 to our estimated recoverable amount. Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in the year
 ended December 31, 2023 were 20.6% of consolidated net sales, just slightly higher than the percentage in the comparable prior year period.

 Overall, our core automotive aftermarket business remains strong, and we continue to be optimistic about the long-term growth potential of the complementary markets served in our Engineered Solutions operating segment.

 New Distribution Facility in Shawnee, Kansas

 In May 2023, we signed a lease for a new distribution facility in Shawnee, Kansas with a lease commencement date of July 1, 2023. The new facility will expand our total distribution network square footage to meet our growing demands in the
 automotive aftermarket industry. The new 575,000 square foot facility will replace our current 363,000 square foot facility in Edwardsville, Kansas, and integrate state-of-the-art technologies to deliver improved logistics capabilities,
 operational efficiencies, as well as enhanced employee, customer and supplier experiences. The new facility is located just five miles away from our Edwardsville facility, enabling us to retain our existing workforce avoiding the additional
 costs of hiring and training. The facility will have a phased opening beginning in 2024 and be fully operational in early 2025. We will incur additional costs in 2023 and 2024 during the phase-in period while we operate the two facilities.

 Impact of Russia's Invasion of the Ukraine

 Russia's invasion of the Ukraine, and the resultant sanctions imposed by the U.S. and other governments, have created risks, uncertainties and disruptions impacting business continuity, liquidity and asset values not only in the Ukraine and
 Russia, but in markets worldwide. Significant price increases have occurred in gas and energy markets, as well as in other commodities. Although we have no facilities or business operations in either the Ukraine or Russia, have historically had
 only minor sales to customers in Russia, which we have subsequently discontinued, and have not experienced additional significant disruptions in the supply chain, the inherent risks and uncertainties surrounding the invasion are being closely
 monitored. We have manufacturing and distribution facilities in Bialystok, Poland and Pecel, Hungary. Our facility in Bialystok, Poland does not use natural gas in its production process, or for heating, and, as such, is not impacted by Russia's
 decision to halt the export of all natural gas to Poland and Bulgaria. While we have not been impacted by the war to date, there can be no assurances that any escalation of the invasion will not have an adverse impact on our business, financial
 condition and results of operations.

 Impact of Global Supply Chain Disruption and Inflation

 Disruptions in the global economy have impeded global supply chains, resulted in longer lead times and delays in procuring component parts and raw materials, and resulted in inflationary cost increases in certain raw materials, labor and
 transportation. In response to the global supply chain volatility and inflationary cost increases, we have taken, and continue to take, several actions to mitigate the impact by working closely with our suppliers and customers to minimize any
 potential adverse impacts on our business, including implementing cost savings initiatives and the pass through of higher costs to our customers in the form of price increases, and maintaining inventory at levels to minimize potential disruptions
 from out-of-stock raw materials and components to ensure higher fill rates with our customers. We believe that we have also benefited from our geographically diversified manufacturing footprint and our strategy to bring more product
 manufacturing in-house, especially with respect to product availability and fill rates. We expect these inflationary trends to continue for some time, and while we believe that we will be able to somewhat offset the impact, there can be no
 assurances that unforeseen future events in the global supply chain affecting the availability of materials and components, and/or increasing commodity pricing, will not have an adverse effect on our business, financial condition and results of
 operations.

 Comparison of Results of Operations For Fiscal Years 2023 and 2022

 Sales. Consolidated net sales for 2023 were $1,358.3 million, a decrease of $13.5 million, or 1%, compared to $1,371.8 million in the same
 period of 2022, with the majority of our net sales to customers located in the United States. Consolidated net sales decreased in our Vehicle Control and Temperature Control operating segments, while net sales in our Engineered Solutions
 operating segment increased when compared to the comparable period in the prior year.

 The following table summarizes consolidated net sales by segment and by major product group within each segment for the years ended December 31, 2023 and 2022 (in thousands):

 2023

 2022

 Engine Management (Ignition, Emissions and Fuel Delivery)

 $

 450,180

 $

 454,571

 Electrical and Safety

 221,782

 230,487

 Wire Sets and Other

 65,970

 65,513

 Total Vehicle Control

 AC System Components

 237,756

 245,484

 Other Thermal Components

 99,998

 105,753

 Total Temperature Control

 Commercial Vehicle

 83,025

 80,275

 Construction/Agriculture

 43,402

 42,385

 Light Vehicle

 92,759

 91,533

 All Other

 63,400

 55,814

 Total Engineered Solutions

 Other

 —

 —

 Total

 $

 $

 Vehicle Control's net sales for the year ended December 31, 2023 decreased $12.7 million, or 1.7%, to $737.9 million compared to $750.6 million in the same period of 2022. The decrease in net sales in our Vehicle Control operating segment
 reflects the impact of lower sales to a customer that filed for bankruptcy in the first quarter of 2023, as well as the negative impact of lower customer pipeline orders in 2023 and softer fourth quarter sales.

 Temperature Control's net sales for the year ended December 31, 2023 decreased $13.4 million, or 3.8%, to $337.8 million compared to $351.2 million in the same period of 2022. The lower year-over-year Temperature Control net sales reflects
 the impact of a slow start to the season caused by a rainy spring and cool early summer temperatures across key markets which negatively impacted first and second quarter 2023 net sales. After the slow start to the season, demand increased
 significantly in the third quarter of 2023 as summer temperatures increased. The result was strong third quarter 2023 net sales, which was not enough to offset the slow start to the season. Demand for our Temperature Control products may vary
 significantly with summer weather conditions and customer inventory levels.

 Engineered Solutions' net sales for the year ended December 31, 2023 increased $12.6 million, or 4.7%, to $282.6 million compared to $270 million in the same period of 2022. Overall, net sales in our Engineered Solutions operating segment
 showed year-over-year improvement driven by strong demand and new business wins, and we continue to be optimistic about the long-term growth potential of the complementary markets served in our newly created Engineered Solutions operating
 segment.

 Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 28.6% for 2023, compared to 27.9% for 2022. The following table summarizes gross margins by
 segment for the years ended December 31, 2023 and 2022, respectively (in thousands):

 Year Ended

 Other

 Total

 2023

 $

 $

 $

 $

 —

 $

 Gross margins

 238,215

 95,827

 54,784

 —

 388,826

 Gross margin percentage

 32.3

 %

 28.4

 %

 19.4

 %

 —

 28.6

 %

 2022

 $

 $

 $

 $

 —

 $

 Gross margins

 232,267

 98,913

 51,359

 —

 382,539

 Gross margin percentage

 30.9

 %

 28.2

 %

 %

 —

 27.9

 %

 Compared to 2022, gross margins at Vehicle Control increased 1.4 percentage points from 30.9% to 32.3%. Gross margins at Temperature Control increased 0.2 percentage points from 28.2% to 28.4%, and gross margins at Engineered Solutions
 increased 0.4 percentage points from 19% to 19.4%.

 The gross margin percentage increase in our Vehicle Control operating segment reflects the positive impact of increased pricing and operating performance, which more than offset increases in material and labor costs, as well as the lower fixed
 cost absorption due to lower production levels than those achieved in the same period in 2022. The gross margin percentage increase in our Temperature Control operating segment reflects the impact increased pricing and operating performance;
 while the gross margin percentage increase at our Engineered Solutions operating segment is driven primarily by favorable customer sales mix and increased pricing. All of our operating segments were negatively impacted by the ongoing
 inflationary cost increases in certain raw materials, labor and transportation expenses. While we anticipate continued margin pressure resulting from inflationary headwinds, we believe that our annual cost savings initiatives coupled with our
 ability to pass through higher prices to our customers should help to offset much of this impact to our gross margins.

 Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") increased to $293.6 million, or 21.6% of consolidated net sales in 2023, as
 compared to $276.6 million, or 20.2% of consolidated net sales in 2022. The $17 million increase in SG&A expenses as compared to 2022 is principally due to the impact of (1) higher interest related costs of $14 million incurred in our supply
 chain financing arrangements and (2) higher distribution cost, all of which more than offset the positive 2023 comparative impact of the $7 million charge recorded in 2022 to reduce our outstanding accounts receivable balance from one of our
 customers that filed a petition for bankruptcy in January 2023 to our estimated recovery amount. Excluding the impact of the incremental interest rate costs incurred in our supply chain financing arrangements, SG&A expenses in 2023 were
 20.6% of consolidated net sales, slightly higher than the percentage in the comparable prior year period.

 Restructuring and Integration Expenses. Restructuring and integration expenses were $2.6 million in 2023 compared to restructuring and integration expenses of $1.9 million in 2022.
 Restructuring and integration expenses in 2023 consists of (1) the $2.5 million of costs incurred in our 2022 cost reduction initiative, and (2) the $0.1 million increase in environmental cleanup costs for ongoing remediation in connection with
 the prior closure of our manufacturing operations at our Long Island City, New York location; while 2022 expenses consists of (1) costs of $1.5 million incurred in our 2022 cost reduction initiative, (2) relocation expenses of $0.2 million of
 certain inventory, machinery, and equipment acquired in our 2021 soot sensor acquisition to our facilities in Independence, Kansas and Bialystok, Poland, and (3) the $0.2 million increase in environmental cleanup costs for ongoing remediation in
 connection with the prior closure of our manufacturing operations at our Long Island City, New York location.

 During the fourth quarter of 2022, to further our ongoing efforts to improve operating efficiencies and reduce costs, we announced plans for a reduction in our sales force, and initiated plans to relocate certain product lines from our
 Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico. Total restructuring and integration expenses related to the initiative were $2.5 million and
 $1.5 million 2023 and 2022, respectively. Expenses related to the initiative for the year ended December 31, 2023 consist of (1) expenses of approximately $0.7 million related to a further sales force reduction, (2) expenses of $1.3 million of
 employee severance and bonuses related to our product line relocations, and (3) expenses of $0.5 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa, Mexico. Expenses related to the initiative
 for the year ended December 31, 2022 consist of (1) expenses of $0.9 million related to our sales force reduction, and (2) expenses of $0.6 million consisting of employee severance related to our product line relocations. Additional
 restructuring costs related to the initiative, and expected to be incurred, are approximately $0.5 million. We anticipate that the Cost Reduction Initiative will be completed by the end of the second quarter of 2024.

 Operating Income. Operating income was $92.7 million, or 6.8%, of consolidated net sales in 2023, compared to $104.1 million, or 7.6%, of consolidated net sales in 2022. The
 year-over-year decrease in operating income of $11.4 million is the result of lower net sales, higher SG&A expenses, consisting primarily of higher interest rate related costs of $14 million incurred in our supply chain financing
 arrangements, and higher restructuring and integration expenses offset, in part, by higher gross margins as a percentage of sales.

 Other Non-Operating Income (Expense), Net. Other non-operating income, net was $2.3 million in 2023, compared to $4.8 million in 2022. The year-over-year decrease in other
 non-operating income, net results from the decrease in year-over-year equity income from our joint ventures, and the unfavorable impact of changes in foreign currency exchange rates. The decline in equity income from our joint ventures is due,
 in part, to lower production levels related to inventory reduction plans, and the impact of our acquisition of an additional 15% equity interest in Gwo Yng. Commencing in July 2023, on the date of our 15% increase in equity interest, the
 financial results of Gwo Yng were no longer accounted for under the equity method of accounting. Instead, Gwo Yng's financial results were reported on a consolidated basis, resulting in lower joint venture equity income.

 Interest Expense. Interest expense increased to $13.3 million in 2023, compared to $10.6 million in 2022. The year-over-year increase in interest expense reflects the impact of
 higher year-over-year average interest rates on our credit facilities when compared to 2022, which more than offset the impact of lower average outstanding balances.

 Income Tax Provision. The income tax provision for 2023 was $18.4 million at an effective tax rate of 22.5%, compared to $25.2 million at an
 effective tax rate of 25.6% in 2022. The lower effective tax rate in 2023 compared to 2022 reflects the impact of lower state and local income taxes due to changes in state laws, rates and filing methodologies, changes in foreign and domestic
 mix, and the effective rate impact of lower year-over-year pre-tax income.

 Loss From Discontinued Operations. Loss from discontinued operations, net of income tax, reflects information contained in the actuarial studies performed as of August 31, 2023 and
 2022, as well as other information available and considered by us, and legal expenses and other costs associated with our asbestos-related liability. During the years ended December 31, 2023 and 2022, we recorded a net loss of $29 million and
 $17.7 million from discontinued operations, respectively. The loss from discontinued operations for the year ended December 31, 2023 and 2022 includes (1) a $23.8 million and $18.5 million pre-tax provision, respectively, to increase our
 indemnity liability in line with the 2023 and 2022 actuarial studies; (2) legal and other miscellaneous expenses, before taxes, of $4.9 million and $5.4 million for 2023 and 2022, respectively, and (3) a $10.5 million pre-tax provision in 2023
 related to a breach of contract legal proceeding. As discussed more fully in Note 23 "Commitments and Contingencies" of the Notes to Consolidated Financial Statements in Item 8 of this Report, we are responsible for certain future liabilities
 relating to alleged exposure to asbestos containing products.

 Net Earnings Attributable to Noncontrolling Interest. Net earnings attributable to noncontrolling interest relates to the minority shareholders' interest in our 70% owned joint
 venture in Hong Kong, with operations in Shanghai and Wuxi, China ("Trombetta Asia, Ltd.") and, in our 80% ownership in Gwo Yng, commencing in July 2023 upon the completion of our step acquisition. Net earnings attributable to the noncontrolling
 interest were $204,000 and $84,000 during the years ended December 31, 2023 and 2022, respectively. For additional information on the Gwo Yng step acquisition, see Note 2, "Business Acquisitions and Investments," in the notes to our consolidated
 financial statements (unaudited).

 Comparison of Results of Operations For Fiscal Years 2022 and 2021

 Sales. Consolidated net sales for 2022 were $1,371.8 million, an increase of $73 million, or 5.6%, compared to $1,298.8 million in the same
 period of 2022, with the majority of our net sales to customers located in the United States. Consolidated net sales increased across all of our operating segments, when compared to the comparable period in the prior year.

 The following table summarizes consolidated net sales by segment and by major product group within each segment for the years ended December 31, 2022 and 2021 (in thousands):

 2022

 2021

 Engine Management (Ignition, Emissions and Fuel Delivery)

 $

 454,571

 $

 444,196

 Electrical and Safety

 230,487

 224,520

 Wire Sets and Other

 65,513

 68,715

 Total Vehicle Control

 AC System Components

 245,484

 231,466

 Other Thermal Components

 105,753

 92,614

 Total Temperature Control

 Commercial Vehicle

 80,275

 76,066

 Construction/Agriculture

 42,385

 33,220

 Light Vehicle

 91,533

 86,440

 All Other

 55,814

 41,579

 Total Engineered Solutions

 Other

 —

 —

 Total

 $

 $

 Vehicle Control's net sales for the year ended December 31, 2022 increased $13.2 million, or 1.8%, to $750.6 million compared to $737.4 million in the same period of 2021. The increase in net sales in our Vehicle Control operating segment
 reflects the impact of strong customer demand and price increases implemented in 2022, which were implemented to pass through inflationary increases in raw materials, distribution and labor costs.

 Temperature Control's net sales for the year ended December 31, 2022 increased $27.1 million, or 8.4%, to $351.2 million compared to $324.1 million in the same period of 2021. The increase in net sales in our Temperature Control segment
 reflects the impact of continued strong customer demand, with the elevated demand we saw in 2021 holding firm, fueled by record heat across the country in 2022 and the replenishment of customer inventory levels after very warm summer conditions
 in 2021, and the impact of price increases, which were implemented to pass through inflationary increases in raw materials, distribution and labor costs. Demand for our Temperature Control products may vary significantly with summer weather
 conditions and customer inventory levels.

 Engineered Solutions' net sales for the year ended December 31, 2022 increased $32.7 million, or 13.8%, to $270 million compared to $237.3 million in the same period of 2021. The increase in net sales in our Engineered Solutions operating
 segment reflects the impact of the positive contribution of incremental sales from our soot sensor, Trombetta and Stabil acquisitions of $44.6 million. Compared to the year ended December 31, 2021, excluding the incremental net sales from the
 acquisitions, Engineered Solutions net sales decreased $11.9 million, or 5%.

 Gross Margins. Gross margins, as a percentage of consolidated net sales, decreased to 27.9% for 2022, compared to 29% for 2021. The following table summarizes gross margins by
 segment for the years ended December 31, 2022 and 2021, respectively (in thousands):

 Year Ended

 Other

 Total

 2022

 $

 $

 $

 $

 —

 $

 Gross margins

 232,267

 98,913

 51,359

 —

 382,539

 Gross margin percentage

 30.9

 %

 28.2

 %

 %

 —

 27.9

 %

 2021

 $

 $

 $

 $

 —

 $

 Gross margins

 238,790

 91,738

 46,403

 —

 376,931

 Gross margin percentage

 32.4

 %

 28.3

 %

 19.6

 %

 —

 %

 Compared to 2021, gross margins at Vehicle Control decreased 1.5 percentage points from 32.4% to 30.9%, gross margins at Temperature Control decreased 0.1 percentage points from 28.3% to 28.2%, and gross margins at Engineered Solutions
 decreased 1.6 percentage points from 19.6% to 19%.

 The gross margin percentage decrease in Vehicle Control compared to the prior year reflects the impact of lower fixed cost absorption due to lower and more normalized production, inflationary cost increases in raw materials, labor and
 transportation, which were somewhat offset by increased pricing, and higher freight and related expenses resulting from higher inventory levels. The slight gross margin percentage decrease in Temperature Control compared to the prior year
 reflects the impact of inflationary cost increases in raw materials, labor and transportation, and higher freight and related expenses resulting from higher inventory levels, which were offset by seasonal volume, customer mix and increased
 pricing. The gross margin percentage decrease in Engineered Solutions compared to the prior year reflects the impact of inflationary cost increases in raw materials, labor and transportation. While we anticipate continued margin pressures
 across all of our segments resulting from inflationary cost increases, we believe that our annual cost initiatives, and our ability to pass through higher prices to our customers, will help to offset the impact of the inflationary increases on
 our margins.

 Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") increased to $276.6 million, or 20.2% of consolidated net sales in 2022, as
 compared to $247.5 million, or 19.1% of consolidated net sales in 2021. The $29.1 million increase in SG&A expenses as compared to 2021 is principally due to the impact of (1) higher interest related costs of $20.6 million incurred in our
 supply chain financing arrangements, (2) the impact of the $7 million charge recorded in 2022 to reduce our outstanding accounts receivable balance from one of our customers that filed a petition for bankruptcy in January 2023 to our estimated
 recovery amount, (3) incremental expenses of $7.2 million from our soot sensor, Trombetta and Stabil acquisitions, including amortization of intangible assets acquired, and (4) inflationary cost increases resulting in higher distribution and
 freight costs. SG&A expenses in 2022 were favorably impacted by the higher mix of non-aftermarket parts sales from recent acquisitions, which have a different profile than our aftermarket business with lower SG&A expenses as a percentage
 of sales.

 Restructuring and Integration Expenses. Restructuring and integration expenses were $1.9 million in 2022 compared to restructuring and integration expenses of $0.4 million in 2021.
 Restructuring and integration expenses incurred in 2022 of $1.9 million related to (1) severance costs of $0.9 million in connection with a reduction in our sales force, (2) expenses of $0.6 million consisting of employee severance costs related
 to our product line relocations from our Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico, (3) relocation expenses of $0.2 million of certain
 inventory, machinery, and equipment acquired in our 2021 soot sensor acquisition to our facilities in Independence, Kansas and Bialystok, Poland, and (4) the $0.2 million increase in environmental cleanup costs for ongoing monitoring and
 remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location.

 Restructuring and integration expenses incurred in 2021 of $0.4 million related to the relocation of certain inventory, machinery, and equipment acquired in our 2021 soot sensor acquisition to our facilities in Independence, Kansas and
 Bialystok, Poland. The soot sensor product line relocation has been completed.

 Operating Income. Operating income was $104.1 million, or 7.6%, of consolidated net sales in 2022, compared to $129 million, or 9.9%, of consolidated net sales in 2021. The
 year-over-year decrease in operating income of $24.9 million is the result of higher SG&A expenses driven primarily by the increased interest rate costs incurred in our supply chain financing arrangements, and to a lesser extent by the impact
 of lower gross margins as a percentage of consolidated net sales and higher restructuring and integration costs offset, in part, by higher consolidated net sales.

 Other Non-Operating Income (Expense), Net. Other non-operating income, net was $4.8 million in 2022, compared to $3.5 million in 2021. The year-over-year increase in other
 non-operating income, net results primarily from the favorable impact of changes in foreign currency exchange rates, and to a lesser extent the increase in year-over-year equity income from our joint ventures.

 Interest Expense. Interest expense increased to $10.6 million in 2022, compared to $2 million in 2021. The year-over-year increase in interest expense reflects the impact of higher
 average outstanding borrowings in 2022 when compared to 2021, and the impact of higher year-over-year average interest rates on our credit facilities.

 Income Tax Provision. The income tax provision for 2022 was $25.2 million at an effective tax rate of 25.6%, compared to $31 million at an
 effective tax rate of 23.8% in 2021. The higher effective tax rate in 2022 compared to 2021 results primarily from the income tax provision impact related to the exercise of restricted stock.

 Loss From Discontinued Operations. Loss from discontinued operations, net of income tax, reflects information contained in the actuarial studies performed as of August 31, 2022 and
 2021, as well as other information available and considered by us, and legal expenses and other costs associated with our asbestos-related liability. During the years ended December 31, 2022 and 2021, we recorded a net loss of $17.7 million and
 $8.5 million from discontinued operations, respectively. The loss from discontinued operations for the year ended December 31, 2022 and 2021 includes an $18.5 million and $5.3 million pre-tax provision, respectively, to increase our indemnity
 liability in line with the 2022 and 2021 actuarial studies; and legal expenses and other miscellaneous expenses, before taxes, of $5.4 million and $6.1 million for 2022 and 2021, respectively. As discussed more fully in Note 23 "Commitments and
 Contingencies" of the Notes to Consolidated Financial Statements in Item 8 of this Report, we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

 Net Earnings Attributable to Noncontrolling Interest. In May 2021, we acquired the Trombetta business for $111.7 million. As part of the acquisition, we acquired a 70% ownership in a
 joint venture in Hong Kong, with operations in Shanghai and Wuxi, China ("Trombetta Asia, Ltd."). Net earnings attributable to the noncontrolling interest of $84,000 and $68,000 during the years ended December 31, 2022 and 2021, respectively,
 represents 30% of the net earnings of Trombetta Asia, Ltd.

 Restructuring and Integration Programs

 For a detailed discussion on the restructuring and integration costs, see Note 3, "Restructuring and Integration Expense," of the Notes Consolidated Financial Statements in Item 8 of this Report.

 Liquidity and Capital Resources

 Our primary cash requirements include working capital, capital expenditures, regular quarterly dividends, stock repurchases, principal and interest payments on indebtedness and acquisitions. The following table summarizes our primary sources
 of funds including ongoing net cash flows from operating activities and availability under our Credit Agreement.

 2023

 2022

 Operating cash flows

 $

 144,260

 $

 (27,533

)

 Total debt

 $

 156,211

 $

 239,620

 Cash and cash equivalents

 Net debt

 $

 123,685

 $

 218,470

 Remaining borrowing capacity

 $

 334,180

 $

 255,631

 Total liquidity

 366,706

 276,781

 Operating Activities. During 2023, cash provided by operating activities was $144.3 million compared to cash used in operating activities of $27.5 million in 2022. The increase in
 cash provided by operating activities resulted primarily from the larger year-over-year decrease in accounts receivable, the decrease in inventories compared to an increase in inventories in the prior year, the increase in accounts payable
 compared to a decrease in accounts payable in the prior year, no change in prepaid expenses and other current assets compared to an increase in prepaid expenses and other current assets in the prior year, and the smaller year-over-year decrease
 in sundry payables and accrued expenses offset, in part, by the decrease in net earnings.

 Net earnings during 2023 were $34.4 million compared to $55.4 million in 2022. During 2023, (1) the decrease in accounts receivable was $8 million compared to the year-over-year decrease in accounts receivable of $6.9 million in 2022; (2) the
 decrease in inventories was $29.5 million compared to the year-over-year increase in inventories of $67.5 million in 2022; (3) the increase in accounts payable was $19.6 million compared to the year-over-year decrease in accounts payable of $48.6
 million in 2022; (4) there was no change in prepaid expenses and other current assets compared to the year-over-year increase in prepaid expenses and other current assets of $5.5 million in 2022; and (5) the decrease in sundry payables and
 accrued expenses was $4.3 million compared to the year-over-year decrease in sundry payables and accrued expenses of $29.1 million in 2022. During 2023, we generated operating cash flow of $144.3 million by reducing our inventory to more
 normalized levels while actively managing our accounts receivable and accounts payable. We will continue to manage our working capital to maximize our operating cash flow. Now that global supply chains have stabilized, allowing us to lower
 working capital in 2023, we expect cash flows from operations will return to historical levels in 2024.

 Investing Activities. Cash used in investing activities was $25.7 million in 2023 compared to $27.8 million in 2022. Investing activities
 during 2023 consisted of (1) the payment of $4 million for our acquisition of an additional 15% equity interest in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co., Ltd. ("Gwo Yng") and (2) capital expenditures of $28.6
 million offset, in part, by cash acquired of $6.8 million in the Gwo Yng step acquisition.

 Investing activities during 2022 consisted of (1) the cash payment of $1.7 million for our acquisition of 100% of the capital stock of Kade Trading GmbH, a German company, ("Kade"), net of $1 million of cash acquired and the $0.5 million
 earn-out; (2) the payment of $0.2 million for our 3.55% increase in equity ownership in Foshan Che Yijia New Energy Technology Co., Ltd., ("CYJ"), a China-based joint venture that manufactures automotive electric air conditioning compressors; and
 (3) capital expenditures of $26 million.

 Financing Activities. Cash used in financing activities was $109.6 million in 2023 compared to cash provided by financing activities of $55.5
 million in 2022. During 2023, we (1) reduced our borrowings under our Credit Agreement by $83.5 million; and (2) paid dividends of $25.2 million and $0.7 million to shareholders of our noncontrolling interests, respectively. Cash provided by
 our operating activities was used to reduce our borrowings under our Credit Agreement, fund our investing activities and pay dividends.

 In June 2022, we entered into a new credit agreement with JPMorgan Chase Bank, N.A., as agent. The new credit agreement provides for a $500 million credit facility comprised of a $100 million term loan facility and a $400 million revolving
 credit facility. Borrowings under the new credit facility were used to repay all outstanding borrowings under the then existing revolving credit facility, and certain fees and expenses incurred in connection with the refinancing.

 Cash provided by financing activities was $55.5 million in 2022. During 2022, we (1) increased our borrowings under our revolving credit facilities by $114.2 million; (2) reduced our borrowings under lease obligations and our Polish overdraft
 facility by $2.9 million; (3) made cash payments of $2.1 million for debt issuance costs in connection with our refinancing; (4) made cash payments for the repurchase of shares of our common stock of $29.7 million; and (5) paid dividends of $23.4
 million. Cash provided by borrowings under our credit facilities were used to fund our operating activities, investing activities, reduce our borrowings under lease obligations and our Polish overdraft facility, pay debt issuance costs in
 connection with the refinancing, purchase shares of our common stock and pay dividends.

 Dividends of $25.2 million and $23.4 million were paid in 2023 and 2022, respectively. Quarterly dividends were paid at a rate of $0.29 in 2023 and $0.27 in 2022.

 Comparison of Liquidity and Capital Resources For Fiscal Years 2022 and 2021

 For a detailed discussion of our Liquidity and Capital Resources comparison of fiscal year 2022 to fiscal year 2021, see Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual
 Report on Form 10-K for the fiscal year ended December 31, 2022.

 Liquidity

 Our primary sources of funds are ongoing net cash flows from operating activities and availability under our Credit Agreement (as detailed below).

 In June 2022, we entered into a new Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders (the "Credit Agreement"). The Credit Agreement provides for a $500 million credit facility comprised of a
 $100 million term loan facility (the "term loan") and a $400 million multi-currency revolving credit facility available in U.S. Dollars, Euros, Sterling, Swiss Francs, Canadian Dollars and other currencies as agreed to by the administrative agent
 and the lenders (the "revolving facility"). The Credit Agreement replaces and refinances the existing Credit Agreement, dated as of October 28, 2015, among the Company, SMP Motor Products Ltd. and Trumpet Holdings, Inc., as borrowers, JPMorgan
 Chase Bank, N.A., as administrative agent and lender, and the other lenders named therein (the "2015 Credit Agreement").

 Borrowings under the Credit Agreement were used to repay all outstanding borrowings under the 2015 Credit Agreement, and pay certain fees and expenses incurred in connection with the Credit Agreement, with future borrowings used for other
 general corporate purposes of the Company and its subsidiaries. The term loan amortizes in quarterly installments of 1.25% in each of the first four years, and quarterly installments of 2.5% in the fifth year of the Credit Agreement. The
 revolving facility has a $25 million sub-limit for the issuance of letters of credit and a $25 million sub-limit for the borrowing of swingline loans. The maturity date is June 1, 2027. The Company may request up to two one-year extensions of
 the maturity date.

 The Company may, upon the agreement of one or more of then existing lenders or of additional financial institutions not currently party to the Credit Agreement, increase the revolving facility commitments or obtain incremental term loans by an
 aggregate amount not to exceed (x) the greater of (i) $168 million or (ii) 100% of consolidated EBITDA (as defined in the Credit Agreement) for the four fiscal quarters ended most recently before such date, plus (y) the amount of any voluntary
 prepayment of term loans, plus (z) an unlimited amount so long as, immediately after giving effect thereto, the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 2.5 to 1.0.

 Term loan and revolver facility borrowings in U.S. Dollars bear interest, at the Company's election, at a rate per annum equal to Term SOFR plus 0.10% plus an applicable margin, or an alternate base rate plus an applicable margin, where the
 alternate base rate is the greater of the prime rate, the federal funds effective rate plus 0.50%, and one-month Term SOFR plus 0.10% plus 1.00%. Term loan borrowings are being made at one-month Term SOFR. The applicable margin for the term
 benchmark borrowings ranges from 1.0% to 2.0%, and the applicable margin for alternate base rate borrowings ranges from 0% to 1.0%, in each case, based on the total net leverage ratio of the Company and its restricted subsidiaries. The Company
 may select interest periods of one, three or six months for Term SOFR borrowings. Interest is payable at the end of the selected interest period, but no less frequently than quarterly.

 The Company's obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries (each, a "Guarantor"), and secured by a first priority perfected security interest in substantially all of the existing and future
 personal property of the Company and each Guarantor, subject to certain exceptions. The collateral security described above also secures certain banking services obligations and interest rate swaps and currency or other hedging obligations of
 the Company owing to any of the then existing lenders or any affiliates thereof. Concurrently with the Company's entry into the Credit Agreement, the Company also entered into a seven year interest rate swap agreement with Wells Fargo Bank,
 N.A., Co-Syndication Agent and lender under the Credit Agreement, on $100 million of borrowings under the Credit Agreement. The interest rate swap agreement matures in May 2029.

 Outstanding borrowings at December 31, 2023 under the Credit Agreement were $156 million, consisting of current borrowings of $5 million and long-term debt of $151 million; while outstanding borrowings at December 31, 2022 were $239.5 million,
 consisting of current borrowings of $55 million and long-term debt of $184.5 million. Letters of credit outstanding under the Credit Agreement were $2.3 million and $2.4 million at December 31, 2023 and 2022, respectively.

 At December 31, 2023, the weighted average interest rate under our Credit Agreement was 5%, which consisted of $156 million in borrowings at 5% under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100 million of
 borrowings. At December 31, 2022, the weighted average interest rate under our Credit Agreement was 5.2%, which consisted of $237 million in borrowings at 5.2% under Term SOFR, adjusted for the impact of the interest rate swap agreement on $100
 million of borrowings, and an alternative base rate borrowing of $2.5 million at 8%. During the year ended December 31, 2023, our average daily alternative base rate loan balance was $0.1 million, compared to a balance of $5.6 million for the
 year ended December 31, 2022.

 The Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other
 payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets. The Credit Agreement also contains customary events of default.

 In November 2023, our Polish subsidiary, SMP Poland sp. z.o.o., further amended its overdraft facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce. The overdraft facility, as amended, provides for borrowings under the
 facility in Euros and U.S. Dollars. Under the amended terms, the overdraft facility provides for borrowings of up to Zloty 30 million (approximately $7.6 million) if borrowings are solely in Zloty, or up to 85% of the Zloty 30 million limit
 (approximately $6.5 million) if borrowings are in Euros and/or U.S. Dollars. The overdraft facility has a maturity date in March 2024, with automatic three-month renewals until June 2027, subject to cancellation by either party, at its sole
 discretion, at least 30 days prior to the commencement of the three-month renewal period. Borrowings under the amended overdraft facility will bear interest at a rate equal to (1) the one month Warsaw Interbank Offered Rate ("WIBOR") + 1.0% for
 borrowings in Polish Zloty, (2) the one month Euro Interbank Offered Rate ("EURIBOR") + 1.0% for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.25% for borrowings in U.S Dollars. Borrowings under the overdraft facility
 are guaranteed by Standard Motor Products, Inc., the ultimate parent company. There were no borrowings outstanding under the overdraft facility at both December 31, 2023 and December 31, 2022.

 In order to reduce our accounts receivable balances and improve our cash flow, we are party to several supply chain financing arrangements, in which we may sell certain of our customers' trade accounts receivable to such customers' financial
 institutions. We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt. Under the terms of the
 agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale. As such, these transactions are being accounted for as a sale.

 Pursuant to these agreements, we sold $830.8 million and $813.7 million of receivables for the years ended December 31, 2023 and 2022, respectively. Receivables presented at financial institutions and not yet collected as of December 31, 2023
 were $4.5 million and remained in our receivable balance as of that date. There were no receivables presented at financial institutions and not yet collected as of December 31, 2022. All receivables sold were reflected as a reduction of accounts
 receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $46 million, $32 million and $11.5 million related to the sale of receivables is included in selling, general and administrative expenses in our
 consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

 To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays or failures in collecting trade accounts receivables.
 The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each arrangement. If the benchmark reference rate increases significantly, we may
 be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.

 In January 2023, one of our customers filed a petition for bankruptcy. In connection with the bankruptcy filing, we evaluated our potential risk and exposure as related to our outstanding accounts receivable balance from the customer as of
 December 31, 2022, and estimated our anticipated recovery. As a result of our evaluation, we recorded a $7 million pre-tax charge during the year ended December 31, 2022 to reduce our accounts receivable balance to our estimated recovery. The
 $7 million pre-tax charge was included in selling, general and administrative expenses in our consolidated statement of operations. The bankruptcy court proceedings have continued into 2023. Although the courts have named us a "critical
 supplier," the funds allocated to us have not yet been determined and, as such, we have not recorded an adjustment to the $7 million pre-tax charge previously recorded.

 In March 2020, our Board of Directors authorized the purchase of up to $20 million of our common stock under a stock repurchase program. Stock repurchases under this program during the year ended December 31, 2021 were 150,273 shares of our
 common stock at a total cost of $6.5 million thereby completing the 2020 Board of Directors authorization.

 In February 2021, our Board of Directors authorized the purchase of up to an additional $20 million of our common stock under a stock repurchase program. Stock repurchases under this program during the year ended December 31, 2021 were
 464,992 shares of our common stock at a total cost of $20 million, thereby completing the February 2021 Board of Directors authorization.

 In October 2021, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 and 2022
 were 7,000 and 692,067 shares of our common stock, respectively, at a total cost of $0.3 million and $29.7 million, respectively, thereby completing the October 2021 Board of Directors authorization.

 In July 2022, our Board of Directors authorized the purchase of up to an additional $30 million of our common stock under a new stock repurchase program. Stock will be purchased under the program from time to time, in the open market or
 through private transactions, as market conditions warrant. To date, there have been no repurchases of our common stock under the program.

 Material Cash Commitments

 Material cash commitments as of December 31, 2023 consist of required cash payments to service our outstanding borrowings of $156 million under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent and the future minimum cash
 requirements of $131.7 million through 2034 under operating leases. All of our other cash commitments as of December 31, 2023 are not material. For additional information related to our material cash commitments, see Note 7, "Leases," and Note
 11, "Credit Facilities and Long-Term Debt," of the Notes to Consolidated Financial Statements in Item 8 of this Report.

 We anticipate that our cash flow from operations, available cash, and available borrowings under our Credit Agreement will be adequate to meet our future liquidity needs for at least the next twelve months. Significant assumptions underlie
 this belief, including, among other things, that we will be able to mitigate the future impact, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, and significant inflationary cost
 increases in raw materials, labor and transportation that we are unable to pass through our customers, macroeconomic uncertainty, and that there will be no material adverse developments in our business, liquidity or capital requirements. If
 material adverse developments were to occur in any of these areas, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our Credit Agreement in
 amounts sufficient to enable us to pay the principal and interest on our indebtedness, or to fund our other liquidity needs. In addition, if we default on any of our indebtedness, or breach any financial covenant in our Credit Agreement, our
 business could be adversely affected.

 For further information regarding the risks in our business, refer to Item 1A, "Risk Factors," of this Report.

 Critical Accounting Policies and Estimates

 We have identified the two accounting policies and estimates below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies and estimates on our
 business operations is discussed throughout "Management's Discussion and Analysis of Financial Condition and Results of Operations," where such policies and estimates affect our reported and expected financial results. For a detailed discussion
 on the application of these and other accounting policies, see Note 1, "Summary of Significant Accounting Policies," of the Notes to Consolidated Financial Statements in Item 8 of this Report.

 You should be aware that preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the
 date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We can give no assurances that actual results will not differ from those estimates. Although we do not believe that
 there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of the disruptions in the supply chain caused by
 geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our
 business, financial condition and results of operations.

 Valuation of Long Lived and Intangible Assets and Goodwill

 At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, patents, developed technology and intellectual property, and non-compete
 agreements. Intangible assets acquired through business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date. Valuing intangible assets requires the use of
 significant estimates and assumptions. As related to valuing customer relationships, significant estimates and assumptions used include but are not limited to: (1) forecasted revenues attributable to existing customers; (2) forecasted earnings
 before interest and taxes ("EBIT") margins; (3) customer attrition rates; and (4) the discount rate. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill and
 certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment. Intangible assets determined to have definite lives are amortized over their remaining useful
 lives. We believe that the fair value of acquired identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

 We assess the impairment of long lived assets, identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill and identifiable
 intangible assets having indefinite lives, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value is below its carrying amount. Factors we consider important,
 which could trigger an impairment review, include the following: (a) significant underperformance relative to expected historical or projected future operating results; (b) significant changes in the manner of our use of the acquired assets or
 the strategy for our overall business; and (c) significant negative industry or economic trends. We review the fair values using the discounted cash flows method and market multiples.

 When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would
 not be required. If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test. In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount. A charge
 for impairment is recognized by the amount by which the reporting unit's carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

 Identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology similar with that used to evaluate goodwill. Intangible assets having definite lives and other long-lived assets are
 reviewed for impairment whenever events such as product discontinuance, plant closures, product dispositions or other changes in circumstances indicate that the carrying amount may not be recoverable. In reviewing for impairment, we compare the
 carrying value of such assets to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. When the estimated undiscounted future cash flows are less than their carrying amount, an
 impairment loss is recognized equal to the difference between the assets fair value and their carrying value.

 There are inherent assumptions and estimates used in developing future cash flows requiring our judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and long lived asset impairment including
 projecting revenues, interest rates, tax rates and the cost of capital. Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods. These
 changes can result in future impairments. In the event our planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our
 business, financial condition and results of operations.

 Asbestos Litigation

 In evaluating our potential asbestos-related liability, we have considered various factors including, among other things, an actuarial study of the asbestos related liabilities performed by an independent actuarial firm, our settlement amounts
 and whether there are any co-defendants, the jurisdiction in which lawsuits are filed, and the status and results of such claims. As is our accounting policy, we consider the advice of actuarial consultants with experience in assessing
 asbestos-related liabilities to estimate our potential claim liability; and perform an actuarial evaluation in the third quarter of each year and whenever events or changes in circumstances indicate that additional provisions may be necessary.
 The methodology used to project asbestos-related liabilities and costs in our actuarial study considered: (1) historical data available from publicly available studies; (2) an analysis of our recent claims history to estimate likely filing rates
 into the future; (3) an analysis of our currently pending claims; (4) an analysis of our settlements and awards of asbestos-related damages to date; and (5) an analysis of closed claims with pay ratios and lag patterns in order to develop average
 future settlement values. Based on the information contained in the actuarial study and all other available information considered by us, we have concluded that no amount within the range of settlement payments and awards of asbestos-related
 damages was more likely than any other and, therefore, in assessing our asbestos liability we compare the low end of the range to our recorded liability to determine if an adjustment is required. Future legal costs are expensed as incurred and
 reported in earnings (loss) from discontinued operations in the accompanying statement of operations.

 We plan to perform an annual actuarial evaluation during the third quarter of each year for the foreseeable future and whenever events or changes in circumstances indicate that additional provisions may be necessary. Given the uncertainties
 associated with projecting such matters into the future and other factors outside our control, we can give no assurance that additional provisions will not be required. We will continue to monitor events and changes in circumstances surrounding
 these potential liabilities in determining whether to perform additional actuarial evaluations and whether additional provisions may be necessary, which will reported in earnings (loss) from discontinued operations in the accompanying statement
 of operations. At the present time, however, we do not believe that any additional provisions would be reasonably likely to have a material adverse effect on our liquidity or consolidated financial position. See Note 23, "Commitments and
 Contingencies," of the Notes to Consolidated Financial Statements in Item 8 of this Report for additional information.

 Recently Issued Accounting Pronouncements

 For a detailed discussion on recently issued accounting pronouncements and their impact on our consolidated financial statements, see Note 1, "Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements in
 Item 8 of this Report.

 ITEM 7A.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Quantitative and Qualitative Disclosures about Market Risk

 We are exposed to market risk, primarily related to foreign currency exchange and interest rates. These exposures are actively monitored by management. Our exposure to foreign exchange rate risk is due to certain costs, revenues and borrowings
 being denominated in currencies other than one of our subsidiary's functional currency. Similarly, we are exposed to market risk as the result of changes in interest rates, which may affect the cost of our financing. It is our policy and
 practice to use derivative financial instruments only to the extent necessary to manage exposures. We do not hold or issue derivative financial instruments for trading or speculative purposes.

 Exchange Rate Risk

 We have exchange rate exposure, primarily, with respect to the Canadian Dollar, the Euro, the British Pound, the Polish Zloty, the Hungarian Forint, the Mexican Peso, the Taiwan Dollar, the Chinese Yuan Renminbi and the Hong Kong Dollar. As
 of December 31, 2023 and December 31, 2022, our monetary assets and liabilities which are subject to this exposure are immaterial, therefore, the potential immediate loss to us that would result from a hypothetical 10% change in foreign currency
 exchange rates would not be expected to have a material impact on our earnings or cash flows. This sensitivity analysis assumes an unfavorable 10% fluctuation in the exchange rates affecting the foreign currencies in which monetary assets and
 liabilities are denominated and does not take into account the incremental effect of such a change on our foreign currency denominated revenues.

 Interest Rate Risk

 We manage our exposure to interest rate risk through the proportion of fixed rate debt and variable rate debt in our debt portfolio. To reduce our market risk for changes in interest rates on our variable rate borrowings, and to manage a
 portion of our exposure to changes in interest rates, we occasionally enter into interest rate swap agreements.

 In June 2022, we entered into a seven year interest rate swap agreement with a notional amount of $100 million that is to mature in May 2029. The interest rate swap agreement has been designated as a cash flow hedge of interest payments on
 $100 million of borrowings under our Credit Agreement. Under the terms of the swap agreement, we will receive monthly variable interest payments based on one month Term SOFR and will pay interest based upon a fixed rate of 2.683% per annum,
 adjusted upward for the credit spread adjustment in the Credit Agreement of 0.10% and the loan margin in the Credit Agreement of 1.25% at December 31, 2023.

 As of December 31, 2023, we had approximately $156 million of outstanding borrowings under our Credit Agreement, of which approximately $56 million bears interest at variable rates of interest and $100 million bears interest at fixed rates,
 after consideration of the interest rate swap agreement entered into in June 2022. Additionally, we invest our excess cash in highly liquid short-term investments. Based upon our current level of borrowings under our Credit Agreement and our
 excess cash, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate may have an approximate $0.2 million annualized negative impact on our earnings or cash flows.

 In addition, we are party to several supply chain financing arrangements, in which we may sell certain of our customers' trade accounts receivable to such customers' financial institutions. We sell our undivided interests in certain of these
 receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt. During the year ended December 31, 2023, we sold $830.8 million of receivables. Depending
 upon the level of sales of receivables pursuant these agreements, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the margin rate may have an approximate $8.3 million negative impact on our earnings or
 cash flows. The charge related to the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations.

 ITEM 8.

 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page No.

 Management's Report on Internal Control over Financial Reporting

 Reports of Independent Registered Public Accounting Firm

 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021

 Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2023, 2022 and 2021

 Notes to Consolidated Financial Statements

 MANAGEMENT'S REPORT ON INTERNAL CONTROL

 OVER FINANCIAL REPORTING

 To the Stockholders of

 Standard Motor Products, Inc. and Subsidiaries:

 Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) of the
 Exchange Act). Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

 All internal control systems, no matter how well designed, have inherent limitations. Because of these inherent limitations, internal control over financial reporting
 can provide only reasonable assurance with respect to financial statement preparation and presentation, and may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that
 controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 We assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2023. In making this assessment, we used the criteria set
 forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control - Integrated Framework. Based on our
 assessment using those criteria, we concluded that, as of December 31, 2023, our internal control over financial reporting is effective.

 Our independent registered public accounting firm, KPMG LLP, has audited our consolidated financial statements as of and for the year ended December 31, 2023 and has
 also audited the effectiveness of our internal control over financial reporting as of December 31, 2023. KPMG's report appears on the following pages of this "Item 8. Financial Statements and Supplementary Data."

 REPORT OF
 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Stockholders and Board of Directors

 Standard Motor Products, Inc. and Subsidiaries:

 Opinion on Internal Control Over Financial Reporting

 We have audited Standard Motor Products, Inc and Subsidiaries' (the "Company") internal control over financial reporting as of December 31, 2023, based on criteria
 established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on
 criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

 We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of
 the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and
 the related notes and financial statement Schedule II, Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 22, 2024 expres sed an unqualified opinion on those consolidated financial statements.

 Basis for Opinion

 The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
 control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on
 our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
 and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
 about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial
 reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
 considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

 Definition and Limitations of Internal Control Over Financial Reporting

 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
 preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the
 maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
 preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
 company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
 effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 /s/ KPMG LLP

 New York, New York

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Stockholders and Board of Directors

 Standard Motor Products, Inc. and Subsidiaries:

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying consolidated balance sheets of Standard Motor Products, Inc. and Subsidiaries' (the "Company") as of December 31, 2023 and 2022,
 the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for each of the years in the three year period ended December 31, 2023, and the related notes and financial statement
 Schedule II Valuation and Qualifying Accounts (collectively, the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
 December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

 We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over
 financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
 Sponsoring Organizations of the Treadway Commission, and our report da ted February 22, 2024 e xpressed an
 unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

 Basis for Opinion

 These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated
 financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
 and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
 about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
 statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
 Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
 reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or
 required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
 communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the
 critical audit matter or on the accounts or disclosures to which it relates.

 Asbestos liability and litigation

 As discussed i n Notes 1 and
 23 to t he consolidated financial statements, the Company is involved in asbestos litigation and has a potential asbestos liability. As of December 31, 2023, the accrued asbestos liability was $82 million. The Company's
 asbestos liability represents the low end of the actuarially determined range of the undiscounted liability for settlement payments and awards of asbestos related damages, excluding legal costs and any potential recovery from insurance
 carriers.

 We identified the assessment of the asbestos liability recorded as a critical audit matter. This required subjective auditor judgment, due to the
 nature of the estimate and assumptions, including the applicability of those assumptions to the current facts and circumstances, as well as judgments about future events and uncertainties. Specialized skills were needed to evaluate the
 Company's key assumptions. The key assumptions included future claim filings, closed with pay ratios, closed with pay lag patterns, settlement values, and large claims. Minor changes to these key assumptions could have had a significant
 effect on the Company's assessment of the accrual for the asbestos liability.

 The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating
 effectiveness of certain internal controls related to the asbestos liability estimation process. This included controls related to the key assumptions and the claims data utilized in the process, and the potential need for an updated
 actuarial valuation. We evaluated the asbestos related legal cases settled during the year and the number of open cases as of year-end by reading letters received directly from the Company's external and internal legal counsel. We tested a
 selection of claims data used in the actuarial model by comparing the selection items to underlying claims documentation. We involved an actuarial professional with specialized skills and knowledge, who assisted in evaluating (1) the future
 claim filings assumption by developing an independent expectation and comparing it against the Company's future claim filing assumption, and (2) the closed with pay ratios, closed with pay lag patterns, settlement values, and large claims by
 comparing them to the Company's historical experience.

 /s/ KPMG LLP

 We have served as the Company's auditor since 2010.

 New York, New York

 CONSOLIDATED
 STATEMENTS OF
 OPERATIONS

 2023

 2022

 2021

 (Dollars in thousands,

 except share and per share data)

 $

 $

 $

 Cost of sales

 969,446

 989,276

 921,885

 Gross profit

 388,826

 382,539

 376,931

 Selling, general and administrative expenses

 293,583

 276,626

 247,547

 Restructuring and integration expenses

 2,642

 1,891

 Other income, net

 Operating income

 92,677

 104,135

 128,999

 Other non-operating income, net

 2,326

 4,814

 3,494

 Interest expense

 13,287

 10,617

 2,028

 Earnings from continuing operations before income taxes

 81,716

 98,332

 130,465

 Provision for income taxes

 63,348

 73,126

 99,421

 Loss from discontinued operations, net of income tax benefit of $ 10,188, $ 6,216 and $ 2,975

 ( 28,996

)

 ( 17,691

)

 ( 8,467

)

 Net earnings attributable to noncontrolling interest

 Net earnings attributable to SMP (a)

 $

 $

 $

 Net earnings attributable to SMP

 $

 63,144

 $

 73,042

 $

 99,353

 Discontinued operations

 ( 28,996

)

 ( 17,691

)

 ( 8,467

)

 Total

 $

 $

 $

 Per share data attributable to SMP

 Net earnings per common share – Basic:

 $

 2.91

 $

 3.37

 $

 4.49

 Discontinued operations

 ( 1.34

)

 ( 0.82

)

 ( 0.39

)

 Net earnings per common share – Basic

 $

 1.57

 $

 2.55

 $

 4.10

 Net earnings per common share – Diluted:

 $

 2.85

 $

 3.30

 $

 4.39

 Discontinued operations

 ( 1.31

)

 ( 0.80

)

 ( 0.37

)

 Net earnings per common share – Diluted

 $

 1.54

 $

 2.50

 $

 4.02

 Dividend declared per share

 $

 1.16

 $

 1.08

 $

 1.00

 Average number of common shares

 21,716,177

 21,683,719

 22,147,479

 Average number of common shares and dilutive common shares

 22,161,341

 22,139,981

 22,616,456

 (a) Throughout this Form 10-K, "SMP" refers to Standard Motor Products, Inc. and subsidiaries.

 CONSOLIDATED STATEMENTS OF
 COMPREHENSIVE INCOME

 2023

 2022

 2021

 $

 $

 $

 Other comprehensive income (loss), net of tax:

 Foreign currency translation adjustments

 7,447

 ( 8,222

)

 ( 2,462

)

 Derivative instruments

 ( 924

)

 3,823

 —

 Pension and postretirement plans

 ( 13

)

 ( 15

)

 ( 16

)

 Total other comprehensive income (loss), net of tax

 6,510

 ( 4,414

)

 ( 2,478

)

 Total comprehensive income

 40,862

 51,021

 88,476

 Comprehensive income (loss) attributable to noncontrolling interest, net of tax:

 Foreign currency translation adjustments

 ( 113

)

 Comprehensive income (loss) attributable to noncontrolling interest, net of tax

 ( 29

)

 Comprehensive income attributable to SMP

 $

 40,644

 $

 51,050

 $

 88,393

 CONSOLIDATED
 BALANCE SHEETS

 2023

 2022

 (Dollars in thousands,

 except share data)

 ASSETS

 CURRENT ASSETS:

 Cash and cash equivalents

 $

 $

 Accounts receivable, less allowances for discounts and expected credit losses of $ 8,045 and $ 5,375 in 2023 and 2022, respectively

 160,282

 167,638

 Inventories

 507,075

 528,715

 Unreturned customer inventories

 18,240

 19,695

 Prepaid expenses and other current assets

 26,100

 25,241

 Total current assets

 744,223

 762,439

 Property, plant and equipment, net

 121,872

 107,148

 Operating lease right-of-use assets

 100,065

 49,838

 134,729

 132,087

 Other intangibles, net

 92,308

 100,504

 Deferred incomes taxes

 40,533

 33,658

 Investments in unconsolidated affiliates

 24,050

 41,745

 Other assets

 35,267

 27,510

 Total assets

 $

 1,293,047

 $

 1,254,929

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:

 Current portion of revolving credit facility

 $

 —

 $

 50,000

 Current portion of term loan and other debt

 5,029

 5,031

 Accounts payable

 107,455

 89,247

 Sundry payables and accrued expenses

 63,303

 49,990

 Accrued customer returns

 38,238

 37,169

 Accrued core liability

 18,399

 22,952

 Accrued rebates

 42,278

 37,381

 Payroll and commissions

 29,561

 31,361

 Total current liabilities

 304,263

 323,131

 Long-term debt

 184,589

 Noncurrent operating lease liabilities

 88,974

 40,709

 Other accrued liabilities

 25,742

 22,157

 Accrued asbestos liabilities

 72,013

 63,305

 Total liabilities

 642,174

 633,891

 Commitments and contingencies

 Stockholders' equity:

 Common Stock - par value $ 2.00 per share:

 Authorized 30,000,000
 shares, issued 23,936,036 shares

 Capital in excess of par value

 101,751

 105,615

 Retained earnings

 573,226

 564,242

 Accumulated other comprehensive income

 ( 5,974

)

 ( 12,470

)

 Treasury stock - at cost ( 2,018,982
 shares and 2,350,377 shares in 2023
 and 2022, respectively)

 ( 81,811

)

 ( 95,239

)

 Total SMP stockholders' equity

 635,064

 610,020

 Noncontrolling interest

 15,809

 11,018

 Total stockholders' equity

 650,873

 621,038

 Total liabilities and stockholders' equity

 $

 1,293,047

 $

 1,254,929

 CONSOLIDATED STATEMENTS OF
 CASH FLOWS

 2023

 2022

 2021

 CASH FLOWS FROM OPERATING ACTIVITIES:

 $

 $

 $

 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

 Depreciation and amortization

 29,022

 28,298

 27,243

 Amortization of deferred financing cost

 Increase (decrease) to allowance for expected credit losses

 2,943

 ( 757

)

 Increase (decrease) to inventory reserves

 3,068

 6,035

 ( 585

)

 Customer bankruptcy charge

 —

 7,002

 —

 Equity income from joint ventures

 ( 2,070

)

 ( 3,464

)

 ( 3,295

)

 Employee Stock Ownership Plan allocation

 2,966

 2,296

 2,513

 Stock-based compensation

 6,598

 8,178

 9,479

 (Increase) in deferred income taxes

 ( 6,952

)

 ( 713

)

 ( 1,801

)

 Increase in tax valuation allowance

 1,068

 Loss on discontinued operations, net of tax

 28,996

 17,691

 8,467

 Change in assets and liabilities:

 Decrease in accounts receivable

 7,965

 6,916

 28,464

 (Increase) decrease in inventories

 29,494

 ( 67,495

)

 ( 107,609

)

 (Increase) in prepaid expenses and other current assets

 ( 70

)

 ( 5,509

)

 ( 843

)

 Increase (decrease) in accounts payable

 19,645

 ( 48,604

)

 33,046

 Increase (decrease) in sundry payables and accrued expenses

 ( 4,284

)

 ( 29,089

)

 13,430

 Net changes in other assets and liabilities

 ( 8,578

)

 ( 5,242

)

 ( 15,044

)

 Net cash provided by (used in) operating activities

 144,260

 ( 27,533

)

 85,564

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Acquisitions of and investments in businesses

 ( 3,954

)

 ( 1,934

)

 ( 125,419

)

 Cash acquired in step acquisition

 6,779

 —

 —

 Capital expenditures

 ( 28,633

)

 ( 25,956

)

 ( 25,875

)

 Other investing activities

 Net cash used in investing activities

 ( 25,700

)

 ( 27,817

)

 ( 151,249

)

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Borrowings under term loan

 —

 100,000

 —

 Repayments of term loan

 ( 5,000

)

 ( 2,500

)

 —

 Net borrowings (repayments) under revolving credit facilities

 ( 78,500

)

 16,702

 115,298

 Net borrowings (repayments) of other debt and lease obligations

 ( 58

)

 ( 2,895

)

 3,048

 Purchase of treasury stock

 —

 ( 29,656

)

 ( 26,862

)

 Payments of debt issuance costs

 —

 ( 2,128

)

 —

 Increase (decrease) in overdraft balances

 ( 189

)

 ( 595

)

 Dividends paid

 ( 25,164

)

 ( 23,428

)

 ( 22,179

)

 Dividends paid to noncontrolling interest

 ( 700

)

 —

 ( 540

)

 Net cash provided by (used in) financing activities

 ( 109,611

)

 55,500

 69,012

 Effect of exchange rate changes on cash

 2,427

 ( 755

)

 ( 1,060

)

 Net increase (decrease) in cash and cash equivalents

 11,376

 ( 605

)

 2,267

 CASH AND CASH EQUIVALENTS at beginning of year

 21,755

 19,488

 CASH AND CASH EQUIVALENTS at end of year

 $

 $

 $

 21,755

 Supplemental disclosure of cash flow information:

 Cash paid during the year for:

 Interest

 $

 14,597

 $

 9,892

 $

 1,721

 Income taxes

 $

 16,019

 $

 25,015

 $

 26,323

 CONSOLIDATED STATEMENTS OF CHANGES IN
 STOCKHOLDERS' EQUITY

 Years Ended December 31, 2023, 2022 and 2021

 Common

 Stock

 Capital in

 Excess of Par

 Value

 Retained

 Earnings

 Accumulated

 Other

 Comprehensive

 Income (Loss)

 Treasury

 Stock

 Total SMP

 Non-

 controlling

 Interest

 Total

 BALANCE AT DECEMBER 31, 2020

 $

 $

 105,084

 $

 463,612

 $

 ( 5,676

)

 $

 ( 60,656

)

 $

 550,236

 $

 —

 $

 550,236

 Noncontrolling interest in business acquired

 —

 —

 —

 —

 —

 —

 11,504

 11,504

 —

 —

 —

 —

 Other comprehensive loss, net of tax

 —

 —

 —

 ( 2,493

)

 —

 ( 2,493

)

 ( 2,478

)

 Cash dividends paid ($ 1.00
 per share)

 —

 —

 ( 22,179

)

 —

 —

 ( 22,179

)

 —

 ( 22,179

)

 Purchase of treasury stock

 —

 —

 —

 —

 ( 26,862

)

 ( 26,862

)

 —

 ( 26,862

)

 Dividends paid to noncontrolling interest

 —

 —

 —

 —

 —

 —

 ( 540

)

 ( 540

)

 Stock-based compensation

 —

 —

 —

 9,320

 9,479

 —

 9,479

 Employee Stock Ownership Plan

 —

 —

 —

 2,379

 2,513

 —

 2,513

 BALANCE AT DECEMBER 31, 2021

 105,377

 532,319

 ( 8,169

)

 ( 75,819

)

 601,580

 11,047

 612,627

 —

 —

 —

 —

 Other comprehensive loss, net of tax

 —

 —

 —

 ( 4,301

)

 —

 ( 4,301

)

 ( 113

)

 ( 4,414

)

 Cash dividends paid ($ 1.08
 per share)

 —

 —

 ( 23,428

)

 —

 —

 ( 23,428

)

 —

 ( 23,428

)

 Purchase of treasury stock

 —

 —

 —

 —

 ( 29,656

)

 ( 29,656

)

 —

 ( 29,656

)

 Stock-based compensation

 —

 ( 131

)

 —

 —

 8,309

 8,178

 —

 8,178

 Employee Stock Ownership Plan

 —

 —

 —

 1,927

 2,296

 —

 2,296

 BALANCE AT DECEMBER 31, 2022

 105,615

 564,242

 ( 12,470

)

 ( 95,239

)

 610,020

 11,018

 621,038

 Noncontrolling interest in step acquisition

 —

 —

 —

 —

 —

 —

 5,273

 5,273

 —

 —

 —

 —

 Other comprehensive loss, net of tax

 —

 —

 —

 6,496

 —

 6,496

 6,510

 Cash dividends paid ($ 1.16
 per share)

 —

 —

 ( 25,164

)

 —

 —

 ( 25,164

)

 —

 ( 25,164

)

 Dividends paid to noncontrolling interest

 —

 —

 —

 —

 —

 —

 ( 700

)

 ( 700

)

 Stock-based compensation

 —

 ( 3,880

)

 —

 —

 10,478

 6,598

 —

 6,598

 Employee Stock Ownership Plan

 —

 —

 —

 2,950

 2,966

 —

 2,966

 BALANCE AT DECEMBER 31, 2023

 $

 $

 101,751

 $

 573,226

 $

 ( 5,974

)

 $

 ( 81,811

)

 $

 635,064

 $

 15,809

 $

 650,873

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1. Summary of Significant Accounting
 Policies

 Principles of Consolidation

 Stan dard Motor Products, Inc. and its subsidiaries (referred to hereinafter in these notes to the consolidated financial statements as "we," "us," "our," "SMP," or the "Company") is a leading manufacturer and distributor of
 premium replacement parts in the automotive aftermarket, and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets. Our automotive aftermarket is comprised of two segments, Vehicle Control and Temperature Control, while our Engineered Solutions segment offers a broad array of conventional and
 future-oriented technologies in markets for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden. We sell our products primarily to retailers, warehouse distributors, original equipment
 manufacturers and original equipment service part operations in the United States, Canada, Europe, Asia, Mexico and other Latin American countries.

 The consolidated financial statements include our accounts and all domestic and international companies in which we have more than a 50 % equity ownership, except in instances where the minority shareholder maintains substantive participating rights, in which case we follow the equity method of accounting. In instances where
 we have more than a 50 % equity ownership and the minority shareholder does not maintain substantive participating rights, our
 consolidated financial statements include the accounts of the company on a consolidated basis with its net income and equity reported at amounts attributable to both our equity position and that of the noncontrolling interest. Investments in
 unconsolidated affiliates are accounted for on the equity method, as we do not have a controlling financial interest but have the ability to exercise significant influence. All significant inter-company items have been eliminated.

 Use of Estimates

 T he preparation of consolidated
 annual and quarterly financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent
 assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We have made a number of estimates and assumptions in the preparation of these
 consolidated financial statements. We can give no assurance that actual results will not differ from those estimates. Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates,
 or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and
 other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations. Some of the more significant estimates include
 allowances for expected credit losses, cash discounts, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, product liability exposures, asbestos,
 environmental and litigation matters, valuation of deferred tax assets, share based compensation and sales returns and other allowances.

 Reclassification

 Certain prior period amounts in the accompanying consolidated financial statements and related notes have been reclassified to conform to the 2023 presentation.

 Reportable Segments

 Beginning on January 1, 2023, we reorganized our business into three operating segments – Vehicle Control, Temperature Control and Engineered Solutions. The new operating segment structure better aligns our operations with our
 strategic focus on diversifying our business, provides greater transparency into our positioning to capture opportunities for growth in the future, and provides clarity regarding the unique dynamics and margin profiles of the markets served
 by each segment. Prior period segment results have been reclassified to conform to our operating segment reorganization. For additional information related to our segment reorganization, see Note 8, "Goodwill and Acquired Intangible
 Assets," Note 21, "Industry Segment and Geographic Data" and Note 22, "Net Sales."

 Cash and Cash Equivalents

 We consider all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

 Allowance for Expected Credit Losses and Cash Discounts

 We do not generally require collateral for our trade accounts
 receivable. Accounts receivable have been reduced by an allowance for amounts that may become uncollectible in the future. These allowances are established based on a combination of write-off history, supportable forecasts, aging analysis, and
 specific account evaluations. When a receivable balance is known to be uncollectible, it is written off against the allowance for expected credit losses. Cash discounts are provided based on an overall average experience rate applied to qualifying
 accounts receivable balances.

 Inventories

 Inventories are valued at the lower of cost and net realizable value. Cost is determined on the first-in first-out basis. Where appropriate, standard cost systems are
 utilized for purposes of determining cost; the standards are adjusted as necessary to ensure they approximate actual costs. Estimates of lower of cost and net realizable value of inventory are determined by comparing the actual cost of the product
 to the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation of the inventory.

 We

 also evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand. For inventory deemed to be obsolete, we provide a reserve on the full value of the
 inventory. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates our estimate of future demand. Future projected demand requires management judgment and is based upon (a) our review of
 historical trends and (b) our estimate of projected customer specific buying patterns and trends in the industry and markets in which we do business. Using rolling twelve month historical information, we estimate future demand on a continuous
 basis. The historical volatility of such estimates has been minimal. We maintain provisions for inventory reserves of $ 42.9 million
 and $ 42.5 million as of December 31, 2023 and 2022, respectively.

 We utilize cores (used parts) in our remanufacturing processes for air conditioning compressors, diesel injectors, and diesel pumps. The production of air conditioning
 compressors, diesel injectors, and diesel pumps involves the rebuilding of used cores, which we acquire either in outright purchases from used parts brokers, or from returns pursuant to an exchange program with customers. Under such exchange
 programs, at the time of sale of air conditioning compressors, diesel injectors, and diesel pumps, we estimate the core expected to be returned from the customer and record the estimated return as unreturned customer inventory.

 In addition, many of our customers can return inventory to us based upon customer warranty and overstock arrangements within customer specific limits. At the time
 products are sold, we accrue a liability for product warranties and overstock returns and record as unreturned customer inventory our estimate of anticipated customer returns. Estimates are based upon historical information on the nature,
 frequency and probability of the customer return. Unreturned core, warranty and overstock customer inventory is recorded at standard cost. Revision to these estimates is made when necessary, based upon changes in these factors. We regularly
 study trends of such claims.

 Property, Plant and Equipment

 Property, plant and equipment are recorded at historical cost and are depreciated using the straight-line method of depreciation over the estimated useful lives as
 follows:

 Estimated Life

 Buildings

 25 to 33-1/2 years

 Building improvements

 10 to 25 years

 Machinery and equipment

 5 to 12 years

 Tools, dies and auxiliary equipment

 3 to 8 years

 Furniture and fixtures

 3 to 12 years

 Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease. Costs related to maintenance and repairs which do not
 prolong the assets useful lives are expensed as incurred. We assess our property, plant and equipment to be held and used for impairment when indicators are present that the carrying value may not be recoverable.

 Leases

 We determine if an arrangement is a lease at inception. For operating leases, we include and report operating lease right-of-use ("ROU") assets, sundry payables and
 accrued expenses, and noncurrent operating lease liabilities on our consolidated balance sheet for leases with a term longer than twelve months. Finance leases are reported on our consolidated balance sheets in property, plant and equipment,
 current portion of other debt, and long-term debt.

 Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments over the
 lease term. Our ROU assets represent the right to use an underlying leased asset over the existing lease term, and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease agreement. As most of
 our leases do not provide for an implicit rate, we use our incremental borrowing rate based on the information available when determining the present value of our lease payments. Our lease terms may include options to terminate, or extend, our
 lease when it is reasonably certain that we will execute the option. Lease agreements may contain lease and non-lease components, which are generally accounted for separately. Operating lease expense is recognized on a straight-line basis over
 the lease term.

 Valuation of Long-Lived and Intangible Assets and Goodwill

 At acquisition, we estimate and record
 the fair value of purchased intangible assets, which primarily consist of customer relationships, trademarks and trade names, patents, developed technology and intellectual property, and non-compete agreements. Intangible assets acquired through
 business combinations are subject to potential adjustments within the measurement period, which is up to one year from the acquisition date. Valuing intangible assets requires the use of significant estimates and assumptions. As related to
 valuing customer relationships, significant estimates and assumptions used include but are not limited to: (1) forecasted revenues attributable to existing customers; (2) forecasted earnings before interest and taxes ("EBIT") margins; (3)
 customer attrition rates; and (4) the discount rate. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill and certain other intangible assets having indefinite
 lives are not amortized to earnings, but instead are subject to periodic testing for impairment. Intangible assets determined to have definite lives are amortized over their remaining useful lives. We believe that the fair value of acquired
 identifiable net assets, including intangible assets, are based upon reasonable estimates and assumptions.

 We assess the impairment of long lived assets, identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value
 may not be recoverable. With respect to goodwill and identifiable intangible assets having indefinite lives, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value
 is below its carrying amount. Factors we consider important, which could trigger an impairment review, include the following: (a) significant underperformance relative to expected historical or projected future operating results; (b) significant
 changes in the manner of our use of the acquired assets or the strategy for our overall business; and (c) significant negative industry or economic trends. We review the fair values using the discounted cash flows method and market multiples.

 When performing our evaluation of goodwill for impairment, if
 we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required. If we are unable to reach this conclusion, then
 we would perform a goodwill quantitative impairment test. In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount. A charge for impairment is recognized by the amount by which the reporting
 unit's carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

 Identifiable intangible assets having indefinite lives are
 reviewed for impairment on an annual basis using a methodology similar with that used to evaluate goodwill. Intangible assets having definite lives and other long-lived assets are reviewed for impairment whenever events such as product
 discontinuance, plant closures, product dispositions or other changes in circumstances indicate that the carrying amount may not be recoverable. In reviewing intangible assets having definite lives and other long-lived assets for impairment, we
 compare the carrying value of such assets to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. When the estimated undiscounted future cash flows are less than their carrying amount,
 an impairment loss is recognized equal to the difference between the assets fair value and their carrying value.

 There are inherent assumptions and estimates used in
 developing future cash flows requiring our judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and long lived asset impairment including projecting revenues, interest rates, tax rates and the cost of
 capital. Many of the factors used in assessing fair value are outside our control and it is reasonably likely that assumptions and estimates will change in future periods. These changes can result in future impairments. In the event our
 planning assumptions were modified resulting in impairment to our assets, we would be required to include an expense in our statement of operations, which could materially impact our business, financial condition and results of operations.

 Foreign Currency Translation

 Assets and liabilities of our foreign operations are translated into U.S. dollars at year-end exchange rates. Income statement accounts are translated using the average
 exchange rates prevailing during the year. The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) and remains there until the underlying foreign operation is liquidated or
 substantially disposed of. Foreign currency transaction gains or losses are recorded in the statement of operations under the caption "other non-operating income (expense), net."

 Revenue Recognition

 We derive our revenue primarily from
 vehicle aftermarket sales in our Vehicle Control and Temperature Control Segments, and non-aftermarket sales in our Engineered Solutions Segment. We recognize revenues when our performance obligation has been satisfied and the control of products
 has been transferred to a customer which typically occurs upon shipment. Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of goods or providing services. The amount of consideration we receive and revenue we recognize depends on the marketing incentives,
 product warranty and overstock returns we offer to our customers. For certain of our sales of remanufactured products, we also charge our customers a deposit for the return of a used core component which we can use in our future remanufacturing
 activities. Such deposit is not recognized as revenue at the time of the sale but rather carried as a core liability. At the same time, we estimate the core expected to be returned from the customer and record the estimated return as unreturned
 customer inventory. The liability is extinguished when a core is actually returned to us, or at period end when we estimate and recognize revenue for the core deposits not expected to be returned. We estimate and record provisions for cash
 discounts, quantity rebates, sales returns and warranties in the period the sale is recorded, based upon our prior experience and current trends. Significant management judgments and estimates must be made and used in estimating sales returns
 and allowances relating to revenue recognized in any accounting period.

 Product Warranty and Overstock Returns

 Many of our products carry a warranty ranging from a 90 -day limited warranty to a lifetime limited warranty, which generally covers defects in materials or
 workmanship and failure to meet industry published specifications and/or the result of installation error. In addition to warranty returns, we also permit our customers to return new, undamaged products to us within customer-specific limits
 (which are generally limited to a specified percentage of their annual purchases from us) in the event that they have overstocked their inventories. At the time products are
 sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature,
 frequency and average cost of the claim and the probability of the customer return. At the same time, we record an estimate of anticipated customer returns as unreturned customer inventory. Significant judgments and estimates must be made and
 used in connection with establishing the sales returns and other allowances in any accounting period. Revision to these estimates is made when necessary, based upon changes in these factors. We regularly study trends of such claims.

 New Customer Acquisition Costs

 New customer acquisition costs refer to arrangements pursuant to which we incur change-over costs to induce a new customer to switch from a competitor's brand. In
 addition, change-over costs include the costs related to removing the new customer's inventory and replacing it with our inventory commonly referred to as a stock lift. New customer acquisition costs are recorded as a reduction to revenue when
 incurred.

 Selling, General and Administration Expenses

 Selling, general and administration expenses include shipping costs and advertising, which are expensed as incurred. Shipping and handling charges, as well as freight to
 customers, are included in distribution expenses as part of selling, general and administration expenses.

 Deferred Financing Costs

 Deferred financing costs represent costs incurred in conjunction with our debt financing activities. Deferred financing costs related to our term loan and revolving
 credit facilities are capitalized and amortized over the life of the related financing arrangement. If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired and are recorded
 in the statement of operations under the caption other non-operating income (expense), net.

 Accounting for Income Taxes

 Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax effects of
 temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as measured by the current enacted tax rates.

 We maintain valuation allowances when it is more likely than not that all or a portion of a deferred asset will not be realized. In determining whether a valuation
 allowance is warranted, we consider all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies to estimate if sufficient
 future taxable income will be generated to realize the deferred tax asset. The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our
 deferred tax assets will be recoverable. In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the
 level of valuation allowance which could materially impact our business, financial condition and results of operations.

 The valuation allowance of $ 3.8 million as of December 31, 2023 is intended to provide for the uncertainty regarding the ultimate realization
 of our U.S. foreign tax credit carryovers. Based on these considerations, we believe it is more likely than not that we will realize the benefit of the net deferred tax asset of $ 40.5 million as of December 31, 2023, which
 is net of the remaining valuation allowance.

 Tax benefits are recognized for an uncertain tax position when, in management's judgment, it is more likely
 than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater
 than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available.
 Such adjustments are recognized entirely in the period in which they are identified. During the years ended December 31, 2023, 2022 and 2021, we did not establish a liability
 for uncertain tax positions.

 Environmental Reserves

 We are subject to various U.S. Federal and state and local environmental laws and regulations and are involved in certain environmental remediation efforts. We estimate
 and accrue our liabilities resulting from such matters based upon a variety of factors including the assessments of environmental engineers and consultants who provide estimates of potential liabilities and remediation costs. Such estimates are
 not discounted to reflect the time value of money due to the uncertainty in estimating the timing of the expenditures, which may extend over several years. Potential recoveries from insurers or other third parties of environmental remediation
 liabilities are recognized independently from the recorded liability, and any asset related to the recovery will be recognized only when the realization of the claim for recovery is deemed probable.

 Asbestos Litigation

 In evaluating our potential asbestos-related liability, we have considered various factors including, among other things, an actuarial study of the asbestos related
 liabilities performed by an independent actuarial firm, our settlement amounts and whether there are any co-defendants, the jurisdiction in which lawsuits are filed, and the status and results of such claims. As is our accounting policy, we
 consider the advice of actuarial consultants with experience in assessing asbestos-related liabilities to estimate our potential claim liability; and perform an actuarial evaluation in the third quarter of each year and whenever events or changes
 in circumstances indicate that additional provisions may be necessary. The methodology used to project asbestos-related liabilities and costs in our actuarial study considered: (1) historical data available from publicly available studies; (2)
 an analysis of our recent claims history to estimate likely filing rates into the future; (3) an analysis of our currently pending claims; (4) an analysis of our settlements and awards of asbestos-related damages to date; and (5) an analysis of
 closed claims with pay ratios and lag patterns in order to develop average future settlement values. Based on the information contained in the actuarial study and all other available information considered by us, we have concluded that no amount
 within the range of settlement payments and awards of asbestos-related damages was more likely than any other and, therefore, in assessing our asbestos liability we compare the low end of the range to our recorded liability to determine if an
 adjustment is required. Future legal costs are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations.

 We plan to perform an annual actuarial evaluation during the third quarter of each year for the foreseeable future and whenever events or changes in circumstances indicate that additional provisions may be necessary. Given the uncertainties associated with projecting such matters into the future and other factors outside our control, we can
 give no assurance that additional provisions will not be required. We will continue to monitor events and changes in circumstances surrounding these potential liabilities in determining whether to perform additional actuarial evaluations and
 whether additional provisions may be necessary, which will reported in earnings (loss) from discontinued operations in the accompanying statement of operations. At the present time, however, we do not believe that any additional provisions would
 be reasonably likely to have a material adverse effect on our liquidity or consolidated financial position.

 Loss Contingencies

 We have loss contingencies, for such matters as legal claims and legal proceedings. Establishing loss reserves for these matters requires estimates, judgment of risk
 exposure and ultimate liability. We record provisions when the liability is considered probable and reasonably estimable. Significant judgment is required for both the determination of probability and the determination as to whether an exposure
 can be reasonably estimated. We maintain an ongoing monitoring and identification process to assess how the activities are progressing against the accrued estimated costs. As additional information becomes available, we reassess our potential
 liability related to these matters. Adjustments to the liabilities are recorded in the statement of operations in the period when additional information becomes available. Such revisions of the potential liabilities could have a material adverse
 effect on our business, financial condition or results of operations.

 Concentrations of Credit Risk

 Financial instruments that potentially subject us to
 significant concentrations of credit risk consist principally of cash investments, accounts receivable and derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate borrowings. We place our
 cash investments with high quality financial institutions and limit the amount of credit exposure to any one institution. Derivative financial instruments used to reduce our market risk for changes in interest rates on our variable rate
 borrowings are entered into with high quality financial institutions, with their credit worthiness reviewed on a quarterly basis. Although we are directly affected by developments in the vehicle parts industry, management does not believe
 significant credit risk exists.

 With respect to accounts receivable, such receivables are primarily from warehouse distributors and major
 retailers in the automotive aftermarket industry located in the U.S. We perform ongoing credit evaluations of our customers' financial conditions. A significant portion of our net sales are concentrated from our three largest individual customers. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of
 them, could have a materially adverse impact on our business, financial condition and results of operations.

 In January 2023, one of our customers filed a petition for bankruptcy. In connection with the bankruptcy filing, we evaluated our potential risk and exposure as related to our outstanding
 accounts receivable balance from the customer as of December 31, 2022, and estimated our anticipated recovery. As a result of our evaluation, we recorded a $ 7 million pre-tax charge during the year ended December 31, 2022 to reduce our accounts receivable balance to our estimated recovery. The $ 7 million pre-tax charge was included in selling, general and administrative expenses in our consolidated statement of operation s. The bankruptcy court proceedings have continued into
 2023. Although the courts have named us a "critical supplier," the funds allocated to us have not yet been determined and, as such, we have not recorded an adjustment to the $ 7 million pre-tax charge previously recorded.

 For further information on net sales to
 our three largest customers and our concentration our customer risk, see Note 21, "Industry Segment and Geographic Data."

 Foreign Cash Balances

 Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2023
 and 2022 were uninsured. Foreign cash balances at December 31, 2023 and 2022 were $ 30.5 million and $ 18.5 million,
 respectively.

 Derivative Instruments and Hedging Activities

 We occasionally use derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate
 borrowings. Derivative financial instruments are recorded at fair value in other current and long-term assets, and other current and long-term liabilities in the consolidated balance sheets. For derivative financial instruments that have been
 formally designated as cash flow interest rate hedges ("interest rate swap agreements"), provided that the hedging instrument is highly effective, the entire change in the fair value of the derivative will be deferred and recorded in
 accumulated other comprehensive income ("AOCI") in the consolidated balance sheets. When the underlying hedged transaction is realized (i.e., when the interest payments on the underlying borrowing are recognized in the consolidated statements
 of operations), the gain/loss included in AOCI is recorded in earnings and reflected on the same line as the gain/loss on the hedged item attributable to the hedged risk (i.e., interest expense). At the inception of each transaction, we
 formally document the hedge relationship, including the identification of the hedge instrument, the related hedged items, the effectiveness of the hedge, as well as its risk management objectives and strategies.

 Recently Issued Accounting Pronouncements

 Standards that are not yet adopted as of December 31, 2023

 Standard

 Description

 Effective date

 Effects on the financial statements or other significant matters

 ASU 2023-07,

 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

 ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an
 interim and annual basis.

 ASU 2023-07 expands segment disclosures by requiring disclosure of (1) significant segment expenses that are regularly provided to the chief operating
 decision maker ("CODM") and included within each reported measure of segment profit or loss; (2) the amount and description of the composition of other segment items to reconcile to segment profit and loss; and (3) the CODM's title and
 position and how the CODM uses the reported segment measures to allocate resources. Additionally, ASU 2023-07 requires interim disclosures of all reportable segment profit or loss and assets previously required annually by Topic 280.

 The ASU is effective
 for the fiscal years beginning after December 15, 2023, which for us is December 31, 2024, and all subsequent interim periods, with full retrospective application required to all prior periods presented. Early adoption is permitted.

 The new standard will
 require expanding our segment disclosure to include additional segment level information. We are currently evaluating the full impact of adopting ASU 2023-07 on our consolidated financial statements, disclosures, processes and
 controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of December 31, 2024.

 ASU 2023-09,

 Income Taxes (Topic 270): Improvements to Income Tax Disclosures

 ASU 2023-09 will improve transparency and decision making usefulness of income tax disclosures.

 ASU 2023-09 will expand the annual required income effective tax rate reconciliation disclosures to include disclosure of (1) eight specific
 categories of rate reconciling items; (2) additional information for reconciling items that meet or exceed a quantitative threshold; and (3) expand the required disclosures to include reconciling percentages as well as reported
 amounts. Additionally, the ASU 2023-09 will expand required interim and annual disclosures of income taxes paid to include the disaggregation by federal, state and foreign jurisdictions, with expanded disclosures required annually.

 The ASU is effective for annual reporting periods beginning after December 15, 2024, which for us is January 1, 2025, with full retrospective
 application required to all prior periods presented. Early adoption is permitted.

 The new standard will require expanding our interim and annual income tax disclosures in our financial statements. We are currently evaluating the full
 impact of adopting ASU 2023-09 on our consolidated financial statements, disclosures, processes and controls. On an ongoing basis, we will continue to assess the impact of the new standard through our planned date of adoption of March 31,
 2025.

 We have reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a
 material impact on the Company's consolidated financial statements.

 2. Business Acquisitions and Investments

 2023 Increase in Equity Investment

 Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

 In April 2014, we
 formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. ("Gwo Yng"), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies
 and switches. We acquired our 50 % interest in the joint venture for approximately $ 14 million. In March 2018, we acquired an additional 15 %
 equity interest in the joint venture for RMB 26,475,583 (approximately $ 4.2 million), thereby increasing our equity interest in the joint venture to 65 %.

 While we increased our equity interest in the joint venture to 65 %, the minority shareholder maintained substantive participating
 rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business. As a result, we continued to account for our investment in the joint venture under the equity method
 of accounting.

 In July 2023, we
 acquired an additional 15 % equity interest in the joint venture for RMB 27,378,290 (approximately $ 4 million), thereby increasing our equity
 interest in Gwo Yng to 80 %. In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove
 all minority shareholder substantive participating rights, giving SMP control of Gwo Yng. As a result, as of the closing date of the transaction, Gwo Yng was accounted for as a business combination achieved in stages ("a step acquisition").
 Accordingly, commencing on the closing of the transaction, we reported the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

 The following table summarizes the allocation of the
 total step acquisition purchase consideration to the identifiable assets acquired and liabilities assumed based on their fair values (in thousands):

 Total purchase consideration (1)

 $

 21,725

 Assets acquired and liabilities assumed:

 Cash and cash equivalents

 $

 6,779

 Receivables

 5,912

 Inventory

 5,945

 Other current assets

 Property, plant and equipment, net

 2,924

 Operating lease right-of-use assets

 4,372

 Intangible assets (2)

 2,208

 Long term investments and other assets

 7,257

 Current liabilities

 ( 6,004

)

 Noncurrent operating lease liabilities

 ( 3,455

)

 Subtotal

 26,998

 Fair value of acquired noncontrolling interest

 ( 5,273

)

 Total purchase consideration allocated to net assets acquired

 $

 21,725

 (1)

 Total purchase
 consideration is the sum of the fair value of the previously held equity investment interest in Gwo Yng of $ 17.7 million
 and the cash paid of $ 4 million for the acquisition of the additional 15 % equity ownership interest.

 (2)

 Intangible assets
 consists of customer relationships of $ 0.4 million and capitalized software of $ 0.1 million.

 Intangible assets of $ 0.4 million consisting of customer relationships will be amortized on a straight-line basis over the estimated useful life of 10 years. Goodwill of $ 2.2 million
 was allocated to the Temperature Control and Engineered Solutions segments in the amounts of $ 1.2 million and $ 1 million, respectively. The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce
 associated with personal reputations.

 Revenues from Gwo Yng
 included in our consolidated statement of operations from the closing date of our 15 % equity increase in July 2023 through December
 31, 2023 were not material.

 2022 Increase in Equity Investment

 Investment in Foshan Che Yijia New Energy Technology Co., Ltd.

 In August 2019, we
 acquired an approximate 29 % minority interest in Foshan Che Yijia New Energy Technology Co., Ltd. ("CYJ") for approximately $ 5.1 million. CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China. We determined, at that time, that
 due to a lack of a voting majority and other qualitative factors, we do not control the operations of CYJ and accordingly, our investment in CYJ would be accounted for under the equity method of accounting.

 In October 2022, we
 acquired an additional 3.55 % equity interest in CYJ for RMB 1.7 million (approximately $ 242,000), increasing our minority
 ownership interest in CYJ from an approximate interest of 29 % to 33 %. The additional acquired ownership interest in CYJ was paid for in cash funded by borrowings under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent. We
 will continue to account for our minority interest in CYJ using the equity method of accounting.

 2022 Business Acquisitions

 Acquisition of Capital Stock of Kade Trading GmbH ("Kade")

 In October 2022, we
 acquired 100 % of the capital stock of Kade Trading GmbH ("Kade") headquartered in Glinde, Germany for Euros 2.7 million (approximately $ 2.7
 million) plus a Euros 0.5 million (approximately $ 0.5 million) earn-out based upon Kade's performance in 2024 and 2025. Kade is a supplier across Europe of mobile temperature control components to commercial vehicle, passenger car and specialty equipment
 markets and has been a distributor of products from our joint ventures including electric compressors, hose assemblies and receiver dryers, with annual sales of approximately $ 6 million. The acquired Kade business, reported as part of our Engineered Solutions segment, was paid for with cash.

 The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):

 Purchase price

 $

 3,176

 Assets acquired and liabilities assumed:

 Receivables

 $

 Inventory

 Other current assets (1)

 1,003

 Property, plant and equipment, net

 Operating lease right-of-use assets

 Intangible assets

 2,395

 Current liabilities

 ( 1,977

)

 Noncurrent operating lease liabilities

 ( 328

)

 Deferred income taxes

 ( 766

)

 Net assets acquired

 $

 3,176

 (1)

 The other current
 assets balance includes $ 1 million of cash acquired.

 Intangible assets
 acquired of $ 2.4 million consist of customer relationships that will be amortized on a straight-line basis over the estimated useful
 life of 15 years.

 Incremental revenues
 from the acquired Kade business included in our consolidated statement of operations for the year ended December 31, 2023 were $ 5
 million.

 3. Restructuring and Integration Expenses

 The aggregated liabilities included in "sundry payables and
 accrued expenses" and "other accrued liabilities" in the consolidated balance sheet relating to the restructuring and integration activities as of and for the years ended December 31, 2023 and 2022, consisted of the following (in thousands):

 Workforce

 Reduction

 Other Exit

 Costs

 Total

 Exit activity
 liability at December 31, 2021

 $

 $

 —

 $

 Restructuring
 and integration costs:

 Amounts
 provided for during 2022 (1)

 1,521

 1,891

 Cash payments

 ( 16

)

 ( 144

)

 ( 160

)

 Reclassification of environmental and other liabilities

 ( 63

)

 ( 226

)

 ( 289

)

 Exit activity
 liability at December 31, 2022

 $

 1,521

 $

 —

 $

 1,521

 Restructuring
 and integration costs:

 Amounts
 provided for during 2023 (1) (2)

 1,973

 2,642

 Cash payments

 ( 1,803

)

 ( 577

)

 ( 2,380

)

 Reclassification of environmental liability

 —

 ( 92

)

 ( 92

)

 Foreign currency exchange rate changes

 —

 Exit activity
 liability at December 31, 2023

 $

 1,729

 $

 —

 $

 1,729

 (1)

 Included in restructuring and integration costs in 2023 and 2022 is a $ 0.1 million and $ 0.2 million increase, respectively, in
 environmental cleanup costs related to ongoing monitoring and remediation in connection with the prior closure of our manufacturing operations at our Long Island City, New York location. The environmental liability has been reclassed to
 accrued liabilities as of December 31, 2023 and 2022, respectively.

 (2)

 Restructuring and integration expenses incurred during the year
 ended December 31, 2023 consist of $ 1.3 million in our Vehicle Control segment, $ 1.1 million in our Temperature Control segment and $ 0.2
 million in our Engineered Solutions segment.

 Restructuring Costs

 Cost Reduction Initiative

 During the fourth
 quarter of 2022, to further our ongoing efforts to improve operating efficiencies and reduce costs, we announced plans for a reduction in our sales force, and initiated plans to relocate
 certain product lines from our Independence, Kansas manufacturing facility and from our St. Thomas, Canada manufacturing facility to our manufacturing facilities in Reynosa, Mexico.

 Total restructuring expenses related to the initiative of approximately $ 2.5 million
 and $ 1.5 million were incurred during the years ended December 31, 2023 and 2022, respectively. Expenses for the year ended
 December 31, 2023 consist of (1) expenses of approximately $ 0.7 million related to a further sales force reduction, (2) expenses of
 approximately $ 1.3 million of employee severance and bonuses related to our product line relocations, and (3) expenses of
 approximately $ 0.5 million related to the relocation of machinery and equipment to our manufacturing facilities in Reynosa,
 Mexico. Expenses for the year ended December 31, 2022 consist of (1) expenses of approximately $ 0.9 million related to our sales
 force reduction, and (2) expenses of approximately $ 0.6 million consisting of employee severance related to our product line
 relocations. Cash payments made under the initiative were $ 2.4 million during the year ended December 31, 2023. Additional
 restructuring costs related to the initiative, and expected to be incurred, are approximately $ 0.5 million. We anticipate that the
 Cost Reduction Initiative will be completed by the end of the second quarter of 2024.

 Plant Rationalization Programs

 The 2016 Plant Rationalization Program, which included the shutdown and sale of our Grapevine, Texas facility, and the 2017 Orlando Rationalization Program, which
 included the shutdown of our Orlando, Florida facility, have been completed. Cash payments made of $ 16,000 during the year ended
 December 31, 2022 consist of severance payments to former employees terminated in connection with these programs. There is no
 remaining aggregate liability related to these programs as of December 31, 2022.

 Integration Costs

 Particulate Matter Senso r ("Soot Sensor") Product Line Relocation

 In connection with our acquisitions in March 2021 and November 2021 of
 certain soot sensor product lines from Stoneridge, Inc., we incurred certain integration expenses in connection with the relocation of certain inventory, machinery, and equip ment from Stoneridge's facilities in
 Lexington, Ohio and Tallinn, Estonia to our existing facilities in Independence, Kansas and Bialystok, Poland, respectively. Integration expenses recognized and cash payments made of $ 144,000 during the year ended December 31, 2022 related to these relocation activities. The soot sensor product line relocation has been completed and there is no remaining aggregate liability related to the soot sensor product line relocation as of December 31, 2022.

 4. Sale of Receivables

 We are party to several supply chain financing arrangements, in which we may sell certain of our customers'
 trade accounts receivable to such customers' financial institutions. We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our
 receivables with existing debt. Under the terms of the agreements, we retain no rights or interest, have no obligations with respect to the sold receivables, and do not service the receivables after the sale. As such, these transactions
 are being accounted for as a sale.

 Pursuant to these agreements, we sold $ 830.8 million and $ 813.7 million of receivables for the years ended December 31, 2023 and 2022, respectively. Receivables presented at financial institutions and not yet
 collected as of December 31, 2023 were $ 4.5 million and remained in our accounts receivable balance as of that date. There were no receivables presented at financial institutions and not yet collected as of December 31, 2022. All receivables sold were reflected as a reduction of
 accounts receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $ 46 million, $ 32 million and $ 11.5 million related to
 the sale of receivables is included in selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

 To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended
 payment terms, delays or failures in collecting trade accounts receivables. The utility of the supply chain financing arrangements also depends upon a benchmark reference rate for the purpose of determining the discount rate applicable to each
 arrangement. If the benchmark reference rate increases significantly, we may be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition,
 results of operations and cash flows.

 5. Inventories

 2023

 2022

 Finished goods

 $

 302,557

 $

 324,362

 Work-in-process

 18,503

 14,099

 Raw materials

 186,015

 190,254

 Subtotal

 507,075

 528,715

 Unreturned customer inventories

 18,240

 19,695

 Total inventories

 $

 525,315

 $

 548,410

 6. Property, Plant and Equipment

 2023

 2022

 Land, buildings and improvements

 $

 45,710

 $

 42,651

 Machinery and equipment

 177,337

 166,149

 Tools, dies and auxiliary equipment

 73,494

 67,017

 Furniture and fixtures

 33,212

 32,084

 Leasehold improvements

 16,418

 15,083

 Construction-in-progress

 35,357

 23,340

 Total property, plant and equipment

 381,528

 346,324

 Less accumulated depreciation

 259,656

 239,176

 Total property, plant and equipment, net

 $

 121,872

 $

 107,148

 Depreciation expense was $ 19.7 million in 2023, $ 19 million in 2022 and $ 18.2 million in
 2021.

 7. Leases

 Quantitative Lease Disclosures

 We have operating and finance leases for our manufacturing facilities, warehouses, office space,
 automobiles, and certain equipment. Our leases have remaining lease terms of up to eleven years, some of which may include one or more five-year renewal options. We have not included any of the renewal options in our operating lease payments, as we concluded that it is not reasonably certain that we will exercise any of these renewal options. Leases with an initial term of
 twelve months or less are not recorded on the balance sheet. Operating lease expense is recognized on a straight-line basis over the lease term. Finance leases are not
 material.

 The following tables provide quantitative disclosures related to our operating leases and includes all
 operating leases acquired from the date of the acquisition (in thousands):

 Balance Sheet Information

 Assets

 2023

 2022

 Operating lease right-of-use assets

 $

 100,065

 $

 49,838

 Liabilities

 Sundry payables and accrued expenses

 $

 17,139

 $

 10,763

 Noncurrent operating lease liabilities

 88,974

 40,709

 Total operating lease liabilities

 $

 106,113

 $

 51,472

 Weighted Average Remaining Lease Term

 Operating leases

 8.3 Years

 7 Years

 Weighted Average Discount Rate

 Operating leases

 4.8

 %

 3.7

 %

 Year Ended, December 31,

 Expense and Cash Flow Information

 2023

 2022

 Lease Expense

 Operating lease expense (a)

 $

 16,434

 $

 11,411

 Supplemental Cash Flow Information

 Cash Paid for the amounts included in the measurement of lease liabilities:

 Operating cash flows from operating leases

 $

 12,099

 $

 11,293

 Right-of-use assets obtained in exchange for new lease obligations:

 Operating leases (b)

 $

 66,014

 $

 31,064

 (a)

 Excludes expenses of approximately $ 3.3
 million, $ 2.7 million and $ 2
 million for the years ended December 31, 2023, 2022, and 2021, respectively, related to non-lease components such as maintenance, property taxes, etc., and operating lease expense for leases with an initial term of 12 months or less,
 which is not material.

 (b)

 During the year ended December 31, 2023 includes $ 27.8 million of right-of-use
 assets related to the lease modification and extension for our distribution center and office in Lewisville, Texas; $ 26.1
 million of right-of-use assets related to the new distribution center in Shawnee, Kansas; $ 4.4 million of right-of-use
 assets obtained in Gwo Yng step-acquisition; and $ 3.7 million of right-of-use assets related to our Reynosa, Mexico lease
 renewal.

 Minimum Lease Payments

 At December 31, 2023, we are obligated to make minimum lease payments through 2034, under operating leases, which are as follows (in thousands):

 2024

 $

 17,607

 2025

 16,145

 2026

 14,814

 2027

 13,671

 2028

 11,415

 Thereafter

 58,059

 Total lease payments

 $

 131,711

 Less: Interest

 ( 25,598

)

 Present value of lease liabilities

 $

 106,113

 8. Goodwill and Other Intangible Assets

 We assess the impairment of long lived and identifiable intangibles assets and goodwill whenever
 events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the
 fair value of a reporting unit is below its carrying amount.

 When performing our evaluation of goodwill
 for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required. If we are unable to reach this
 conclusion, then we would perform a goodwill quantitative impairment test. In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount. A charge for impairment is recognized by the amount by which
 the reporting unit's carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

 In connection with our operating segment
 reorganization, we reassessed our reporting units and reallocated goodwill from the reporting units that existed prior to the change to the new reporting units, using a relative fair value approach similar to that used when a portion of a
 reporting unit is to be disposed of. We performed goodwill impairment tests as of January 1, 2023 on both the reporting units in place prior to the change and the new reporting units, and concluded that the estimated fair values of each of the
 reporting units exceeded their respective carrying amounts and, therefore, no impairment charge was necessary.

 We

 completed our annual impairment test of goodwill as of December 31, 2023. As of December 31, 2023, we performed a qualitative assessment of the likelihood of a goodwill impairment for the Vehicle Control, Temperature Control and Engineered
 Solutions reporting units. Based upon our qualitative assessment, we determined that it was not more likely than not that the fair value of the each of the Vehicle Control, Temperature Control and Engineered Solutions reporting units was less
 than their respective carrying amounts. As such, we concluded that the quantitative impairment test would not be required, and that there would be no required goodwill impairment charge as of December 31, 2023 at each of the reporting units.
 While we concluded that we did no t have a goodwill impairment charge as of December 31, 2023, and we do not believe that future
 impairments are probable, we will need to maintain the current ongoing performance levels at each of the Vehicle Control, Temperature Control and Engineered Solutions reporting units in future periods to sustain their goodwill carrying values.

 Changes in the carrying values of goodwill by operating segment during the years ended December 31, 2023 and 2022 are as follows (in thousands):

 Total

 Balance as of December 31, 2021:

 $

 129,318

 $

 10,839

 $

 29,983

 $

 170,140

 Accumulated impairment losses

)

 —

 —

)

 $

 90,830

 $

 10,839

 $

 29,983

 $

 131,652

 Activity in 2022

 Acquisition of Kade

 —

 Foreign currency exchange rate change

 ( 310

)

 ( 74

)

 ( 331

)

 Balance as of December 31, 2022:

 129,008

 11,474

 30,093

 170,575

 Accumulated impairment losses

)

 —

 —

)

 $

 90,520

 $

 11,474

 $

 30,093

 $

 132,087

 Activity in 2023

 Step acquisition of Gwo Yng

 —

 1,214

 2,208

 Foreign currency exchange rate change

 Balance as of December 31, 2023:

 129,294

 12,730

 31,193

 173,217

 Accumulated impairment losses

)

 —

 —

)

 $

 90,806

 $

 12,730

 $

 31,193

 $

 134,729

 Acquired Intangible Assets

 Acquired identifiable intangible assets as of December 31, 2023 and 2022 consist of:

 2023

 2022

 Customer relationships

 $

 159,641

 $

 158,717

 Patents, developed technology and intellectual property

 14,123

 14,123

 Trademarks and trade names

 8,880

 8,880

 Non-compete agreements

 3,295

 3,282

 Supply agreements

 Leaseholds

 Total acquired intangible assets

 186,899

 185,962

 Less accumulated amortization (1)

 ( 95,681

)

 ( 86,945

)

 Net acquired intangible assets

 $

 91,218

 $

 99,017

 (3)

 Applies to all intangible assets, except for a
 related trademark/trade name totaling $ 2.6 million, which has an indefinite useful life and, as such, is not being amortized.

 Total amortization expense for acquired
 intangible assets was $ 8.5 million for the year ended December 31, 2023, $ 8.6 million for the year ended December 31, 2022, and $ 8.7 million for the year
 ended December 31, 2021. Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $ 8.5
 million for 2024, $ 8.5 million in 2025, $ 8.5
 million in 2026, $ 8.4 million in 2027 and $ 54.7
 million in the aggregate for the years 2028 through 2041.

 For information related to identified
 intangible assets acquired in the Kade acquisition and Gwo Yng step acquisition, see Note 2, "Business Acquisitions and Investments," of the notes to our consolidated financial statements.

 Other Intangible Assets

 Other intangible assets include computer software. Computer software as of December 31, 2023 and 2022 totaled $ 19.1 million and $ 18.7
 million, respectively. Total accumulated computer software amortization as of December 31, 2023 and 2022 was $ 18 million and $ 17.2 million, respectively. Computer software is amortized
 over its estimated useful life of 3 to 10 years. Amortization expense for computer software was $ 0.8 million, $ 0.7 million and $ 0.3 million for the years ended December 31,
 2023, 2022 and 2021, respectively.

 9. Investments in Unconsolidated Affiliates

 2023

 2022

 Foshan FGD SMP Automotive Compressor Co. Ltd

 $

 18,426

 $

 16,747

 Foshan Che Yijia New Energy Technology Co., Ltd.

 3,128

 4,098

 Orange Electronic Co. Ltd

 2,496

 2,490

 Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

 —

 18,410

 Total

 $

 24,050

 $

 41,745

 Investment in Foshan FGD SMP Automotive Compressor Co. Ltd.

 In November 2017, we formed Foshan FGD SMP Automotive Compressor Co., Ltd., a 50/50 joint venture with Foshan Guangdong Automotive Air Conditioning Co., Ltd. ("FGD"), a
 China-based manufacturer of automotive belt driven air conditioning compressors. We acquired our 50 % interest in the joint venture for
 approximately $ 12.5 million. We determined that due to a lack of a voting majority, and other qualitative factors, we do not control
 the operations of the joint venture and accordingly, our investment in the joint venture is accounted for under the equity method of accounting. During the years ended December 31, 2023 and 2022, we made purchases from the joint venture of
 approximately $ 44.1 million and $ 43.5 million, respectively.

 Investment in Foshan Che Yijia New Energy Technology Co., Ltd.

 In August 2019, we acquired an
 approximate 29 % minority interest in Foshan Che Yijia New
 Energy Technology Co., Ltd. ("CYJ") for approximately $ 5.1 million. CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China. Our minority interest in CYJ is accounted for using the equity method of accounting.

 In December 2021,
 Standard Motor Products (Hong Kong), Ltd., ("SMP HK"), a subsidiary of Standard Motor Products, Inc., entered into an unsecured loan agreement with CYJ. Under the terms of the loan agreement, CYJ shall have the right to borrow from SMP HK,
 as lender, up to an aggregate principal amount of $ 4 million, with interest calculated on the basis of simple interest of five
 percent ( 5 %) per annum and a maturity date of November 30, 2023, subject to extension by SMP HK at its sole discretion. In September 2023, the loan agreement was extended through November 30, 2025. Outstanding borrowings under the
 loan agreement at December 31, 2023 were $ 4 million.

 In October 2022, we
 acquired an additional 3.55 % equity interest in CYJ for RMB 1.7 million (approximately $ 242,000), increasing our
 minority ownership interest in CYJ from an approximate interest of 29 % to 33 %. We will continue to account for our minority interest in CYJ using the equity method of accounting. During the years ended December 31, 2023 and 2022, purchases we
 made from CYJ were not material.

 Investment in Orange Electronic Co. Ltd.

 In January 2013, we acquired a minority interest in Orange Electronic Co., Ltd. ("Orange") for $ 6.3 million. Orange is a manufacturer of tire pressure monitoring system sensors and is located in Taiwan. As of December 31, 2022, our minority interest in Orange of 19.4 % is accounted for using the equity method of accounting as we have the ability to exercise significant influence. During the years ended
 December 31, 2023 and 2022, we made purchases from Orange of approximately $ 3.2 million and $ 4.5 million, respectively.

 Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd.

 In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. ("Gwo Yng"), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators,
 filter driers, hose assemblies and switches. We acquired our 50 % interest in the joint venture for approximately $ 14 million. In March 2018, we acquired an additional 15 % equity interest in the joint venture for RMB 26,475,583
 (approximately $ 4.2 million), thereby increasing our equity interest in the joint venture to 65 %. While we increased our equity interest in the joint venture to 65 %, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the
 ordinary course of business. As a result, we continued to account for our investment in the joint venture under the equity method of accounting.

 In
 July 2023, we acquired an additional 15 % equity interest in the joint venture for RMB 27,378,290 (approximately $ 4 million), thereby increasing our
 equity interest in Gwo Yng to 80 %. In connection with the transaction, we amended and restated the charter documents of Gwo Yng to
 remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng. As a result, as of the closing date of the transaction, Gwo Yng will be accounted for as a business combination achieved in stages ("a step
 acquisition"). Accordingly, commencing on the closing of the transaction, we will report the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest.

 During

 the year ended December 31, 2023 and through the date of our step acquisition in July 2023, we made purchases from the joint venture of approximately $ 10.3
 million. Purchases made from the joint venture approximated $ 16.2 million during the year ended December 13, 2022.

 For additional information related to Gwo
 Yng, see Note 2, "Business Acquisitions and Investments," of the notes to our consolidated financial statements.

 10. Other Assets

 2023

 2022

 Deferred compensation

 $

 23,893

 $

 20,190

 Long-term investments

 7,468

 —

 Noncurrent portion of interest rate swap fair value

 1,944

 3,091

 Deferred financing costs, net

 1,125

 1,603

 Other

 2,626

 Total other assets, net

 $

 35,267

 $

 27,510

 Def erred compensation consists of assets held in a nonqualified defined contribution pension plan as of December 31, 2023 and 2022, respectively. Long term investments as of
 December 31, 2023 consist of certificates of deposit with original maturities in excess of twelve months.

 11. Credit Facilities and Long-Term Debt

 Total debt outstanding is summarized as follows:

 2023

 2022

 Credit facility – term loan due 2027

 $

 92,500

 $

 97,500

 Credit facility – revolver due 2027

 63,500

 142,000

 Other

 Total debt

 $

 156,211

 $

 239,620

 Current maturities of debt

 $

 5,029

 $

 55,031

 Long-term debt

 184,589

 Total debt

 $

 156,211

 $

 239,620

 Term Loan and
 Revolving Credit Facilities

 In June 2022, the Company entered into a new Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders (the "Credit
 Agreement"). The Credit Agreement provides for a $ 500 million credit facility comprised of a $ 100 million term loan facility (the "term loan") and a $ 400
 million multi-currency revolving credit facility available in U.S. Dollars, Euros, Sterling, Swiss Francs, Canadian Dollars and other currencies as agreed to by the administrative agent and the lenders (the "revolving facility"). The Credit
 Agreement replaces and refinances the 2015 Credit Agreement.

 Borrowings under the Credit Agreement were used to repay all outstanding borrowings under the 2015 Credit Agreement, and pay certain fees and expenses incurred in connection with the Credit
 Agreement, with future borrowings used for other general corporate purposes of the Company and its subsidiaries. The term loan amortizes in quarterly installments of 1.25 % in each of the first four years, and quarterly
 installments of 2.5 % in the fifth year of the Credit Agreement. The revolving facility has a $ 25 million sub-limit for the issuance of letters of credit and a $ 25 million sub-limit for the borrowing of swingline loans. The maturity date is June 1, 2027. The
 Company may request up to two one-year
 extensions of the maturity date.

 The Company may, upon the agreement of one or more then existing lenders or of additional financial institutions not currently party to the Credit Agreement, increase
 the revolving facility commitments or obtain incremental term loans by an aggregate amount not to exceed (x) the greater of (i) $ 168
 million or (ii) 100 % of consolidated EBITDA (as defined in the Credit Agreement) for the four fiscal quarters ended most recently
 before such date, plus (y) the amount of any voluntary prepayment of term loans, plus (z) an unlimited amount so long as, immediately after giving effect thereto, the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement)
 does not exceed 2.5 to 1.0.

 Term loan and revolver facility borrowings in U.S. Dollars bear interest, at the Company's election, at a rate per annum equal to Term SOFR plus 0.10 % plus an applicable margin, or an alternate base rate plus an applicable margin, where the alternate base rate is the greater of the prime
 rate, the federal funds effective rate plus 0.50 %, and one-month Term SOFR plus 0.10 % plus 1.00 %. Term loan borrowings were made at one-month
 Term SOFR. The applicable margin for the term benchmark borrowings ranges from 1.0 % to 2.0 %, and the applicable margin for alternate base rate borrowings ranges from 0 %
 to 1.0 %, in each case, based on the total net leverage ratio of the Company and its restricted subsidiaries. The Company may select
 interest periods of one, three or nine months for Term SOFR borrowings. Interest is payable at the end of the selected interest
 period, but no less frequently than quarterly.

 The Company's obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries (each, a "Guarantor"), and secured by a first priority
 perfected security interest in substantially all of the existing and future personal property of the Company and each Guarantor, subject to certain exceptions. The collateral security described above also secures certain banking services
 obligations and interest rate swaps and currency or other hedging obligations of the Company owing to any of the then existing lenders or any affiliates thereof. Concurrently with the Company's entry into the Credit Agreement, the Company also
 entered into a seven year interest rate swap agreement with Wells Fargo Bank, N.A., Co-Syndication Agent and lender under the Credit
 Agreement, on $ 100 million of borrowings under the Credit Agreement. The interest rate swap agreement matures in May 2029.

 Outstanding borrowings at December 31, 2023 under the Credit Agreement were $ 156 million,
 consisting of current borrowings of $ 5 million and long-term debt of $ 151 million; while outstanding borrowings at December 31, 2022 were $ 239.5
 million, consisting of current borrowings of $ 55 million and long-term debt of $ 184.5 million. Letters of credit outstanding under the Credit Agreement were $ 2.3
 million and $ 2.4 million at December 31, 2023 and 2022, respectively.

 At December 31, 2023, the weighted average interest rate under our Credit Agreement was 5 %,
 which consisted of $ 156 million in borrowings at 5 % under Term SOFR, adjusted for the impact of the interest rate swap agreement on $ 100 million of
 borrowings. At December 31, 2022, the weighted average interest rate under our Credit Agreement was 5.2 %, which consisted of $ 237 million in borrowings at 5.2 %
 under Term SOFR, adjusted for the impact of the interest rate swap agreement on $ 100 million of borrowings, and an alternative base
 rate borrowing of $ 2.5 million at 8 %.
 During the year ended December 31, 2023, our average daily alternative base rate loan balance was $ 0.1 million, compared to a balance
 of $ 5.6 million for the year ended December 31, 2022.

 The Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers,
 consolidations, liquidations and dissolutions, sales of assets, dividends and other payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets.
 The Credit Agreement also contains customary events of default.

 Polish Overdraft Facility

 In November 2023, our Polish subsidiary, SMP Poland sp.
 z.o.o., further amended its overdraft
 facility with HSBC Continental Europe (Spolka Akcyjna) Oddzial w Polsce. The overdraft facility, as amended, provides for borrowings under the facility in Euros and U.S. Dollars. Under the amended terms, the overdraft facility provides for
 borrowings of up to Zloty 30 million (approximately
 $ 7.6 million) if borrowings are solely in Zloty, or up to 85 % of the Zloty 30 million limit (approximately $ 6.5 million) if borrowings are in Euros and/or U.S. Dollars. The overdraft facility has a maturity date in March 2024, with automatic three-month renewals until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period. Borrowings under the amended overdraft facility will bear interest at a rate
 equal to (1) the one month Warsaw Interbank Offered Rate ("WIBOR") + 1.0 % for borrowings in Polish Zloty, (2) the one month Euro
 Interbank Offered Rate ("EURIBOR") + 1.0 % for borrowings in Euros, and (3) the Mid-Point of the Fed Target Range + 1.25 % for borrowings in U.S Dollars. Borrowings under the overdraft facility are guaranteed by Standard Motor Products, Inc., the ultimate parent
 company. There were no borrowings outstanding under the overdraft facility at both December 31, 2023 and December 31, 2022.

 Maturities of Debt

 As of December 31, 2023, maturities of
 debt through 2027, assuming no prepayments, are as follows (in thousands):

 Revolving Credit Facility

 Term Loan Facility

 Polish Overdraft Facility and Other Debt

 Total

 2024

 $

 —

 $

 5,000

 $

 $

 5,029

 2025

 —

 5,000

 5,031

 2026

 —

 7,500

 7,549

 2027

 63,500

 75,000

 138,602

 Total

 $

 63,500

 $

 92,500

 $

 $

 156,211

 Less: current maturities

 —

 ( 5,000

)

 ( 29

)

 ( 5,029

)

 Long-term debt

 $

 63,500

 $

 87,500

 $

 $

 Deferred Financing Costs

 We have deferred financing costs of approximately $ 1.6 million and $ 2.1 million as of December 31, 2023 and 2022, resp ectively. Deferred financing costs are related to our term loan and revolving credit facilities. Deferred financing costs as of December 31, 2023, assuming no prepayments, are being amortized in the amounts of $ 0.5 million in 2024, $ 0.5 million
 in 2025, $ 0.5 million in 2026 and $ 0.1
 million in 2 027.

 12. Accumulated Other Comprehensive Income

 Changes in Accumulated Other Comprehensive Income by Component (in thousands)

 Foreign

 Currency

 Translation

 Unrecognized

 Postretirement

 Benefit Costs

 (Credit)

 Unrealized

 derivative

 gains

 (losses)

 Total

 Balance at December 31, 2021 attributable to SMP

 $

 ( 8,221

)

 $

 $

 —

 $

 ( 8,169

)

 Other comprehensive income before reclassifications

 ( 8,109

)

 —

 3,797

 (1)

 ( 4,312

)

 Amounts reclassified from accumulated other comprehensive income

 —

 ( 15

)

 Other comprehensive income, net

 ( 8,109

)

 ( 15

)

 3,823

 ( 4,301

)

 Balance at December 31, 2022 attributable to SMP

 $

 ( 16,330

)

 $

 $

 3,823

 $

 ( 12,470

)

 Other comprehensive income before reclassifications

 7,433

 —

 (1)

 8,264

 Amounts reclassified from accumulated other comprehensive income

 —

 ( 13

)

 ( 1,755

)

 ( 1,768

)

 Other comprehensive income, net

 7,433

 ( 13

)

 ( 924

)

 6,496

 Balance at December 31, 2023 attributable to SMP

 $

 ( 8,897

)

 $

 $

 2,899

 $

 ( 5,974

)

 (1)

 Consists of the unrecognized loss relating to the change in fair value of the cash flow
 interest rate hedge of $ 1.2 million ($ 0.9 million, net of tax) plus cash settlement receipts of $ 2.4 million ($ 1.7 million, net of tax) in the year ended December 31, 2023; and the unrecognized gain relating to the change in fair value of the cash
 flow interest rate hedge of $ 5.2 million ($ 3.8 million, net of tax) minus cash settlement payments of $ 42,000 ($ 31,000, net of tax) in the year December 31, 2022.

 Reclassifications Out of Accumulated Other Comprehensive Income (in thousands):

 Details About Accumulated Other Comprehensive Income Components

 2023

 2022

 Derivative cash flow hedge:

 Unrecognized gain (loss) (1)

 $

 ( 2,372

)

 $

 Postretirement Benefit Plans:

 Unrecognized gain (loss) (2)

 ( 22

)

 ( 25

)

 Total before income tax

 ( 2,394

)

 Income tax expense (benefit)

 ( 626

)

 ( 1

)

 Total reclassifications attributable to SMP

 $

 ( 1,768

)

 $

 (1)

 Unrecognized accumulated other comprehensive income (loss) related to the cash flow interest rate hedge
 is reclassified to earnings and reported as part of interest expense in our consolidated statements of operations when the interest payments on the underlying borrowings are recognized.

 (2)

 Unrecognized accumulated other comprehensive income (loss) related to our post retirement plans is
 reclassified to earnings and included in the computation of net periodic postretirement benefit costs, which are included in other non-operating income (expense), net in our consolidated statements of operations (see Note 15,
 "Employee Benefits," for additional information).

 13. Stockholders' Equity

 We have authority to issue 500,000 shares of preferred
 stock, $ 20 par value, and our Board of Directors is vested with the authority to establish and designate any series of preferred, to fix
 the number of shares therein and the variations in relative rights as between each series. In December 1995, our Board of Directors established a new series of preferred shares designated as Series A Participating Preferred Stock. The number of
 shares constituting the Series A Preferred Stock is 30,000. The Series A Preferred Stock is designed to participate in dividends, ranks
 senior to our common stock as to dividends and liquidation rights and has voting rights. Each share of the Series A Preferred Stock shall entitle the holder to one thousand votes on all
 matters submitted to a vote of the stockholders of the Company. No such shares were outstanding at December 31, 2023 and 2022.

 In March 2020, our Board of Directors authorized the purchase of up to $ 20 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 were 150,273 shares of our common stock at a total cost of $ 6.5
 million thereby completing the 2020 Board of Directors authorization.

 In February 2021, our Board of Directors authorized the purchase of up to an additional $ 20 million of our common stock under a stock repurchase program. Stock repurchases under this program during the year ended December 31, 2021 were 464,992 shares of our common stock at a total cost of $ 20
 million, thereby completing the February 2021 Board of Directors authorization.

 In October 2021, our Board of Directors authorized the purchase of up to an additional $ 30 million of our common stock under a stock repurchase program. Stock repurchases under this program, during the year ended December 31, 2021 and
 2022 were 7,000 and 692,067
 shares of our common stock, respectively, at a total cost of $ 0.3 million and $ 29.7 million, respectively, thereby completing the October 2021 Board of Directors authorization.

 In July 2022, our Board of Directors authorized the purchase of up to an additional
 $ 30 million of our common stock under a new stock repurchase program. Stock will be purchased under the program from time to time, in
 the open market or through private transactions, as market conditions warrant. To date, there have been no repurchases of our common
 stock under the program.

 14. Stock-Based Compensation Plans

 Our stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees' interests with the interests of our
 shareholders. In addition, members of our Board of Directors participate in our stock-based compensation program in connection with their service on our board.

 In May 2021, our Board of Directors and Shareholders approved an amendment and restatement to the 2016 Omnibus Incentive Plan (the "Plan"). Under the Plan, which
 terminates in May 2026, we are authorized to issue, among other things, shares of restricted and performance-based stock to eligible employees and restricted stock to directors of up to 2,050,000 shares; and shares of restricted and performance-based stock to nonemployee directors of up to 350,000 shares. Shares issued under the Plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the Plan. The 2016 Omnibus Incentive Plan is the
 only remaining plan available to provide stock-based incentive compensation to our employees, directors and other eligible persons. Awards previously granted under the 2006 Omnibus Incentive Plan remain outstanding, while shares not yet granted
 under the plan are not available for future issuance.

 We account for our stock-based compensation plans in accordance with the provisions of FASB ASC 718, Stock Compensation, which requires that a company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The service period is
 the period of time that the grantee must provide services to us before the stock-based compensation is fully vested. The grant-date fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in
 our consolidated statements of operations. Forfeitures are estimated at the time of grant based on historical trends in order to estimate the amount of share-based awards that will ultimately vest. We monitor actual forfeitures for any subsequent
 adjustment to forfeiture rates.

 Restricted Stock and Performance Share Grants

 We currently grant shares of restricted stock to eligible employees and our independent directors and performance-based stock to eligible employees. We grant eligible
 employees two types of restricted stock (standard restricted shares and long-term retention restricted shares). Standard restricted
 shares granted to employees become fully vested no earlier than three years after the date of grant. Long-term retention restricted
 shares granted to selected executives vest at a 25 % rate on or within approximately two months of an executive reaching the ages of 60 and 63, and become fully vested on or within approximately two months of an executive reaching the age of 65. Restricted shares granted to
 directors become fully vested upon the first anniversary of the date of grant.

 Performance-based shares issued to eligible employees are subject to a three-year
 measuring period and the achievement of performance targets and, depending upon the achievement of such performance targets, they may become vested no earlier than three years after the date of grant. Each period we evaluate the probability of achieving the applicable targets, and we adjust our accrual accordingly. Restricted shares (other than
 long-term retention restricted shares) and performance shares issued to certain key executives and directors are subject to a one or two year holding period upon the lapse of the vesting period. Forfeitures on stock grants are estimated at 5 % for employees and 0 % for executives and directors based
 upon our evaluation of historical and expected future turnover.

 Prior to the time a restricted share becomes fully vested or a performance share is issued, the awardees cannot transfer, pledge, hypothecate or encumber such shares.
 Prior to the time a restricted share is fully vested, the awardees have all other rights of a stockholder, including the right to vote (but do not receive dividends during the vesting period). Prior to the time a performance share is issued, the
 awardees shall have no rights as a stockholder. All shares and rights are subject to forfeiture if certain employment conditions are not met.

 Under the amended and restated 2016 Omnibus Incentive Plan, 2,050,000
 shares are authorized to be issued. At December 31, 2023, under the plan, there were an aggregate of (a) 1,633,549 shares of restricted
 and performance-based stock grants issued, net of forfeitures, and (b) 416,451 shares of common stock available for future grants. For
 the year ended December 31, 2023, 230,875 restricted and performance-based shares were granted ( 165,125 restricted shares and 65,750 performance-based shares).

 In determining the grant date fair value, the stock price on the date of grant, as quoted on the New York Stock Exchange, was reduced by the present value of dividends
 expected to be paid on the shares issued and outstanding during the requisite service period, discounted at a risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates
 approximately equal to the restriction or vesting period at the grant date. In addition, a further discount for the lack of marketability reduced the fair value of grants issued to certain key executives and directors subject to the one or two year post vesting holding
 period. Assumptions used in calculating the discount for the lack of marketability include an estimate of stock volatility, risk-free interest rate, and a dividend yield.

 As related to restricted and performance stock shares, we recorded compensation expense of $ 6.2 million ($ 4.8 million, net of tax), $ 7.6 million ($ 5.7 million, net of tax)
 and $ 9.1 million ($ 6.9
 million, net of tax), for the years ended December 31, 2023, 2022 and 2021, respectively. The unamortized compensation expense related to our restricted and performance-based shares was $ 13.3 million and $ 14.9 million at December 31, 2023 and 2022, respectively and
 is expected to be recognized over a weighted average period of 4.1 years and 0.3 years for employees and directors, respectively, as of December 31, 2023 and over a weighted average period of 4.3 years and 0.3 years for employees and directors, respectively, as of
 December 31, 2022.

 Our restricted and performance-based share activity was as follows for the years ended December 31, 2023 and 2022:

 Shares

 Weighted Average

 Grant Date Fair

 Value per Share

 Balance at December 31, 2021

 807,019

 $

 34.92

 Granted

 246,325

 28.44

 Vested

 ( 190,082

)

 41.71

 Performance Shares Target Adjustment

 25,317

 42.21

 Forfeited

 ( 7,750

)

 40.73

 Balance at December 31, 2022

 880,829

 $

 31.79

 Granted

 230,875

 27.00

 Vested

 ( 248,065

)

 36.30

 Performance Shares Target Adjustment

 29,137

 36.30

 Forfeited

 ( 11,800

)

 35.36

 Balance at December 31, 2023

 880,976

 $

 29.48

 The weighted-average grant date fair value
 of restricted and performance-based shares outstanding as of December 31, 2023, 2022 and 2021 was $ 26 million (or $ 29.48 per share), $ 28 million (or $ 31.79 per share), and $ 28.2 million (or $ 34.92 per share), respectively.

 15. Employee Benefits

 Defined Contribution Plans

 We maintain various defined contribution plans, which include profit sharing, and provide retirement benefits for substantially all of our employees. Matching
 obligations, in connection with the plans which are funded in cash and typically contributed to the plans in March of the following year, are as follows (in thousands):

 U.S. Defined

 Contribution

 Year ended December 31,

 2023

 $

 10,510

 2022

 10,180

 2021

 9,763

 We maintain a defined contribution Supplemental Executive Retirement Plan for key employees. Under the plan, these employees may elect to defer a portion of their
 compensation and, in addition, we may at our discretion make contributions to the plan on behalf of the employees. In March 2023 and 2022, contributions of $ 0.8 million were made related to calendar years 2022 and 2021, respectively. As of December 31, 2023, we have recorded an obligation of $ 0.6 million for 2023.

 We also have an Employee Stock Ownership Plan and Trust ("ESOP") for employees who are not covered by a collective bargaining agreement. In connection therewith, we
 maintain an employee benefits trust to which we contribute shares of treasury stock. We are authorized to instruct the trustees to distribute such shares toward the satisfaction of our future obligations under the plan. The shares held in trust
 are not considered outstanding for purposes of calculating earnings per share until they are committed to be released. The trustees will vote the shares in accordance with its fiduciary duties. During 2023, we contributed to the trust an
 additional 72,800 shares from our treasury and released 72,800 shares from the trust leaving 200 shares remaining in the trust as of
 December 31, 2023. The provision for expense in connection with the ESOP was approximately $ 3 million in 2023, $ 2.3 million in 2022 and $ 2.5 million in
 2021.

 Defined Benefit Pension Plan

 We maintain a defined benefit unfunded Supplemental Executive Retirement Plan ("SERP"). The SERP, as amended, is a defined benefit plan pursuant to which we will pay
 supplemental pension benefits to certain key employees upon the attainment of a contractual participant's payment date based upon the employees' years of service and compensation. As there are no current participants in the SERP, there was no benefit obligation outstanding related to the plan as of December 31, 2023 and 2022 and we recorded no expense related to the plan during the years ended December 31, 2023, 2022 and 2021.

 Postretirement Medical Benefits

 We provide certain medical and dental care benefits to 14
 former U.S. union employees. The postretirement medical and dental benefit obligation for the former union employees as of December 31, 2023, and the net periodic benefit cost for our postretirement benefit plans for the years ended December 31,
 2023, 2022 and 2021 were not material.

 16. Other Non-Operating Income (Expense), Net

 The components of other non-operating income (expense), net are as follows:

 2023

 2022

 2021

 Interest and dividend income

 $

 $

 $

 Equity income from joint ventures

 2,070

 3,464

 3,295

 Gain (loss) on foreign exchange

 ( 776

)

 ( 257

)

 Other non-operating income, net

 Total other non-operating income, net

 $

 2,326

 $

 4,814

 $

 3,494

 17. Derivative Financial
 Instruments

 Interest Rate Swap
 Agreements

 We occasionally use
 derivative financial instruments to reduce our market risk for changes in interest rates on our variable rate borrowings. The principal financial instruments used for cash flow hedging purposes are interest rate swap agreements. The interest rate
 swaps effectively convert a portion of our variable rate borrowings under our existing facilities to a fixed rate based upon determined notional amount. We do not enter into interest rate swap agreements, or other financial instruments, for
 trading or speculative purposes.

 In June
 2022, we entered into a seven year interest rate swap agreement with a notional amount of $ 100 million that is to mature in May 2029. The interest
 rate swap agreement has been designated as a cash flow hedge of interest payments on $ 100 million of borrowings under our Credit
 Agreement. Under the terms of the swap agreement, we will receive monthly variable interest payments based on one month Term SOFR
 and will pay interest based upon a fixed rate of 2.683 % per annum, adjusted upward for the credit spread adjustment in the Credit
 Agreement of 0.10 % and the loan margin in the Credit Agreement of 1.25 % at December 31, 2023.

 The fair value of the
 interest rate swap agreement as of December 31, 2023 and December 31, 2022 was an asset of $ 3.9 million and $ 5.2 million, respectively, which has been deferred and recorded in accumulated other comprehensive income, net of income taxes, in our consolidated
 balance sheet. When the interest expense on the underlying borrowing is recognized, the deferred gain/loss in accumulated other comprehensive income is recorded in earnings as interest expense in the consolidated statements of operations. We
 perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term.

 18. Fair Value Measurements

 We follow a three-level
 fair value hierarchy that prioritizes the inputs to measure fair value. This hierarchy requires entities to maximize the use of "observable inputs" and minimize the use of "unobservable inputs." The three levels of inputs used to measure fair
 value are as follows:

 Level
 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets as of the measurement date.

 Level
 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market
 data.

 Level 3: Significant
 unobservable inputs that reflect assumptions that market participants would use in pricing an asset or liability.

 The following is a summary of the estimated
 fair values, carrying amounts, and classification under the fair value hierarchy of our financial instruments at December 31, 2023 and December 31, 2022 (in thousands):

 December 31, 2023

 December 31, 2022

 Fair Value

 Hierarchy

 Fair Value

 Carrying

 Amount

 Fair Value

 Carrying

 Amount

 Cash and cash equivalents (a)

 LEVEL 1/2

 $

 $

 $

 $

 Deferred compensation

 LEVEL 1

 23,893

 23,893

 20,190

 20,190

 Short term borrowings

 LEVEL 1

 5,029

 5,029

 55,031

 55,031

 Long-term debt

 LEVEL 1

 184,589

 184,589

 Cash flow interest rate swap

 LEVEL 2

 3,939

 3,939

 5,174

 5,174

 Long-term investments

 LEVEL 2

 7,468

 7,468

 —

 —

 (a)

 As of December 31, 2023 cash and cash equivalents consist
 of cash of $ 29.5 million and cash equivalents of $ 3 million, which are classified as Level 1 and Level 2, respectively, under the fair value hierarchy. Cash and cash equivalents at December 31, 2022 consists solely of cash of $ 21.2 million, which is classified as Level 1 under the fair value hierarchy.

 Cash equivalents consist of
 certificates of deposit with original maturities of 3 months, or less. These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2023. The fair value of the
 underlying assets held by the deferred compensation plan are based on the quoted market prices of the underlying funds which are held by registered investment companies. The carrying value of our variable rate short-term borrowings and long-term
 debt under our credit facilities approximates fair value as the variable interest rates in the facilities reflect current market rates. The fair value of our cash flow interest rate swap agreement is obtained from an independent third party, is
 based upon market quotes, and represents the net amount required to terminate the interest rate swap, taking into consideration market rates and counterparty credit risk. Long-term investments consist of certificates of deposit with original
 maturities in excess of twelve months. These securities are accounted for as held-to-maturity and recorded at amortized cost, which approximates their fair values at December 31, 2023.

 19. Income Taxes

 The income tax provision (benefit) consists of the following (in thousands):

 2023

 2022

 2021

 Current:

 Domestic

 $

 15,422

 $

 16,182

 $

 26,528

 Foreign

 9,224

 8,669

 5,851

 Total current

 24,646

 24,851

 32,379

 Deferred:

 Domestic

 ( 5,769

)

 1,102

 ( 1,161

)

 Foreign

 ( 509

)

 ( 747

)

 ( 174

)

 Total deferred

 ( 6,278

)

 ( 1,335

)

 Total income tax provision

 $

 $

 $

 Reconciliations between taxes at the U.S. Federal income tax rate and taxes at our effective income tax rate on earnings from continuing operations before income taxes
 are as follows (in thousands):

 2023

 2022

 2021

 U.S. Federal income tax rate of 21 %

 $

 17,160

 $

 20,650

 $

 27,398

 Increase (decrease) in tax rate resulting from:

 State and local income taxes, net of federal income tax benefit

 2,086

 3,118

 4,579

 Change in valuation allowance

 1,068

 Income tax (benefit) attributable to foreign income

 ( 53

)

 ( 122

)

 Other non-deductible items, net

 ( 1,929

)

 ( 1,277

)

 Provision for income taxes

 $

 $

 $

 The following is a summary of the components of the net deferred tax assets and liabilities recognized in the accompanying consolidated balance sheets (in thousands):

 2023

 2022

 Deferred tax assets:

 Inventories

 $

 10,493

 $

 11,604

 Allowance for customer returns

 13,083

 14,506

 Accrued asbestos liabilities

 20,758

 17,208

 Accrued salaries and benefits

 11,816

 12,048

 Tax credit and NOL carryforwards

 5,968

 5,103

 Allowance for expected credit losses

 3,567

 2,965

 Other

 65,702

 63,649

 Valuation allowance

 ( 3,830

)

 ( 3,155

)

 Total deferred tax assets

 61,872

 60,494

 Deferred tax liabilities:

 Intangible assets acquired, net of amortization

 12,668

 13,292

 Depreciation

 7,597

 8,715

 Interest rate swap agreement

 1,299

 Other

 3,530

 Total deferred tax liabilities

 21,339

 26,836

 Net deferred tax assets

 $

 40,533

 $

 33,658

 In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some portion or the entire deferred tax asset will be
 realized. Ultimately, the realization of the deferred tax asset is dependent upon the generation of sufficient taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be
 utilized. We consider the level of historical taxable income, scheduled reversal of temporary differences, carryback and carryforward periods, tax planning strategies and projected future taxable income in determining whether a valuation allowance
 is warranted. We also consider cumulative losses in recent years as well as the impact of one-time events in assessing our pre-tax earnings. Assumptions regarding future taxable income require significant judgment. Our assumptions are consistent
 with estimates and plans used to manage our business.

 The valuation allowance of $ 3.8 million as of December 31,
 2023 is intended to provide for uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers. Based on these considerations, we believe it is more likely than not that we would realize the benefit of the net deferred tax
 asset of $ 40.5 million as of December 31, 2023, which is net of the remaining valuation allowance. At December 31, 2023, we have foreign
 tax credit carryforwards of approximately $ 3.8 million that will expire in varying amounts by 2032.

 As related to the taxation of our foreign subsidiaries, we aggregate our foreign earnings and profits, and utilize allowable deductions and available foreign tax credits
 in computing our U.S. tax. Notwithstanding the U.S. taxation of these amounts, we intend to continue to invest most, or all, of these earnings indefinitely outside of the U.S., and do not expect to incur any significant additional taxes related to
 such amounts.

 In accordance with generally accepted accounting practices, we recognize in our financial statements only
 those tax positions that meet the more-likely-than-not recognition threshold. We establish tax reserves for uncertain tax positions that do not meet this threshold. During the years ended December 31, 2023, 2022 and 2021, we did no t establish a liability for uncertain tax positions.

 We are subject to taxation in the U.S. and various state, local and foreign jurisdictions. As of December 31, 2023, the Company is no longer subject to U.S. Federal tax examinations
 for years before 2020. We remain subject to examination by state and local tax authorities for tax years 2019 through 2022. Foreign
 jurisdictions have statutes of limitations generally ranging from 2 to 6 years. Years still open to examination by foreign tax authorities in major jurisdictions include Canada ( 2019 onward), Hong Kong ( 2018 onward), China ( 2021 onward), Mexico ( 2019 onward),
 Poland ( 2018 onward), Hungary ( 2018
 onward), U.K. ( 2017 onward) and Germany ( 2019
 onward). We do not presently anticipate that our unrecognized tax benefits will significantly increase or decrease over the next 12 months; however, actual developments in this area could differ from those currently expected.

 20. Earnings Per Share

 We present two calculations of earnings per common share. "Basic" earnings per common share equals net earnings attributable to SMP divided by weighted average
 common shares outstanding during the period. "Diluted" earnings per common share equals net earnings attributable to SMP divided by the sum of weighted average common shares outstanding during the period plus potentially dilutive common
 shares. Potentially dilutive common shares that are anti-dilutive are excluded from net earnings per common share.

 The following are reconciliations of the net earnings attributable to SMP and the shares used in calculating basic and dilutive net earnings per common share
 attributable to SMP (in thousands, except per share data):

 2023

 2022

 2021

 Net Earnings Attributable to SMP -

 $

 63,144

 $

 73,042

 $

 99,353

 Loss from discontinued operations

 ( 28,996

)

 ( 17,691

)

 ( 8,467

)

 Net earnings attributable to SMP

 $

 $

 $

 Basic Net Earnings Per Common Share Attributable to SMP -

 Earnings from continuing operations per common share

 $

 2.91

 $

 3.37

 $

 4.49

 Loss from discontinued operations per common share

 ( 1.34

)

 ( 0.82

)

 ( 0.39

)

 Net earnings per common share attributable to SMP

 $

 1.57

 $

 2.55

 $

 4.10

 Weighted average common shares outstanding

 21,716

 21,684

 22,147

 2023

 2022

 2021

 Diluted Net Earnings Per Common Share Attributable to SMP -

 Earnings from continuing operations per common share

 $

 2.85

 $

 3.30

 $

 4.39

 Loss from discontinued operations per common share

 ( 1.31

)

 ( 0.80

)

 ( 0.37

)

 Net earnings per common share attributable to SMP

 $

 1.54

 $

 2.50

 $

 4.02

 Weighted average common shares outstanding

 21,716

 21,684

 22,147

 Plus incremental shares from assumed conversions:

 Dilutive effect of restricted stock and performance-based stock

 Weighted average common shares outstanding – Diluted

 22,161

 22,140

 22,616

 The shares listed below were not included in the computation of diluted net earnings per common share attributable to SMP because to do so would have been anti-dilutive
 for the periods presented or because they were excluded under the treasury method (in thousands):

 2023

 2022

 2021

 Restricted and performance shares

 21. Industry Segment and Geographic Data

 Beginning on January 1, 2023, we reorganized our business into three operating segments
 – Vehicle Control, Temperature Control and Engineered Solutions. The new operating segment structure better aligns our operations with our strategic focus on diversifying our business, provides greater
 transparency into our positioning to capture opportunities for growth in the future, and provides clarity regarding the unique dynamics and margin profiles of the markets served by each segment.

 Vehicle Control is the new name for our Engine Management operating segment. It includes our core automotive aftermarket business after carving out all
 non-aftermarket business to our Engineered Solutions operating segment. The Vehicle Control operating segment includes sales from ignition, emissions and fuel delivery, electrical and safety, and wire sets and other product categories.

 Temperature Control is our ongoing automotive aftermarket operating segment, after the carve out of all non-aftermarket business to our Engineered Solutions
 operating segment. Temperature Control derives its sales from air conditioning system components and other thermal product categories. Our Temperature Control operating segment is poised to benefit from the broader adoption of more complex air
 conditioning systems that will provide passenger comfort regardless of the vehicle's powertrain.

 Engineered Solutions is a new operating segment created by carving out all non-aftermarket business from our prior Engine Management and Temperature Control
 operating segments. Our Engineered Solutions segment supplies custom-engineered solutions to vehicle and equipment manufacturers in highly diversified global end-markets such as commercial and light vehicles, construction, agriculture, power
 sports and marine.

 The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1).

 The following tables contain financial information for each reportable operating segment (in thousands):

 2023

 2022

 2021

 Net sales (a):

 $

 $

 $

 Other

 —

 —

 —

 Total net sales

 $

 $

 $

 Depreciation and Amortization:

 $

 13,877

 $

 14,075

 $

 14,840

 3,424

 2,973

 3,345

 9,966

 9,557

 7,390

 Other

 1,755

 1,693

 1,668

 Total depreciation and amortization

 $

 29,022

 $

 28,298

 $

 27,243

 Operating income (loss):

 $

 71,327

 $

 74,153

 $

 97,029

 17,343

 26,459

 30,077

 19,944

 18,713

 19,982

 Other

 ( 15,937

)

 ( 15,190

)

 ( 18,089

)

 Total operating income

 $

 92,677

 $

 104,135

 $

 128,999

 Investment in unconsolidated affiliates:

 $

 2,496

 $

 2,490

 $

 2,729

 19,711

 27,557

 28,518

 1,843

 11,698

 12,840

 Other

 —

 —

 —

 Total investment in unconsolidated affiliates

 $

 24,050

 $

 41,745

 $

 44,087

 Capital expenditures:

 $

 13,955

 $

 13,378

 $

 17,048

 1,899

 3,973

 2,130

 12,095

 6,489

 5,354

 Other

 2,116

 1,343

 Total capital expenditures

 $

 28,633

 $

 25,956

 $

 25,875

 Total assets:

 $

 620,569

 $

 618,789

 $

 604,016

 274,657

 254,137

 234,771

 292,080

 289,518

 272,791

 Other

 105,741

 92,485

 86,383

 Total assets

 $

 1,293,047

 $

 1,254,929

 $

 1,197,961

 (a)

 There are no intersegment sales
 among our Vehicle Control, Temperature Control and Engineered Solutions operating segments.

 Other consists of financial information related to the activities of our corporate headquarters function.

 Reconciliation of segment operating income to net earnings:

 2023

 2022

 2021

 Operating income

 $

 92,677

 $

 104,135

 $

 128,999

 Other non-operating income, net

 2,326

 4,814

 3,494

 Interest expense

 13,287

 10,617

 2,028

 Earnings from continuing operations before income taxes

 81,716

 98,332

 130,465

 Provision for income taxes

 63,348

 73,126

 99,421

 Discontinued operations, net of tax

 ( 28,996

)

 ( 17,691

)

 ( 8,467

)

 $

 $

 $

 2023

 2022

 2021

 Long-lived assets (a):

 United States

 $

 368,792

 $

 326,199

 $

 315,983

 Asia

 75,869

 76,766

 80,175

 Europe

 44,517

 38,351

 37,892

 13,262

 10,355

 12,119

 5,851

 7,161

 4,461

 Total long-lived assets

 $

 508,291

 $

 458,832

 $

 450,630

 (a)

 Long-lived assets are attributed to countries based
 upon the location of the assets.

 Our three largest individual customers accounted for
 approximately 59 % of our consolidated net sales in 2023. During
 2023, O'Reilly Auto Parts, AutoZone and NAPA accounted for 29 %, 16 % and 14 % of our consolidated net sales, respectively. Net sales from each
 of the customers were reported in our Vehicle Control and Temperature Control Segments. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them could have a material adverse impact on
 our business, financial condition and results of operations. In addition, any consolidation among our key customers may further increase our customer concentration risk.

 For the disaggregation of our net sales from customers by major product group and geographic area within each of our operating segments, see Note 22, "Net Sales."

 22. Net Sales

 Disaggregation of Net Sales

 We disaggregate our net sales from contracts with customers by major product group and geographic area within each of our segments, as we believe it best depicts how
 the nature, amount, timing and uncertainty of our net sales are affected by economic factors.

 Major Product Group

 The Vehicle Control operating segment generates its revenues from core aftermarket sales of ignition, emissions, and fuel delivery, electrical and safety, and wire sets
 and other product categories. The Temperature Control operating segment generates its revenue from aftermarket sales of air conditioning system components and other thermal products. The
 Engineered Solutions operating segment generates revenues from custom-engineered products to vehicle and equipment manufacturers in highly diversified global end-markets such as commercial and light vehicles, construction, agriculture, power
 sports and marine.

 The following table summarizes consolidated net sales by major product group within each operating segment for the years ended December 31, 2023, 2022 and 2021 (in
 thousands):

 2023

 2022

 2021

 Engine Management (Ignition, Emissions and Fuel Delivery)

 $

 450,180

 $

 454,571

 $

 444,196

 Electrical and Safety

 221,782

 230,487

 224,520

 Wire Sets and Other

 65,970

 65,513

 68,715

 Total Vehicle Control

 AC System Components

 237,756

 245,484

 231,466

 Other Thermal Components

 99,998

 105,753

 92,614

 Total Temperature Control

 Commercial Vehicle

 83,025

 80,275

 76,066

 Construction/Agriculture

 43,402

 42,385

 33,220

 Light Vehicle

 92,759

 91,533

 86,440

 All Other

 63,400

 55,814

 41,579

 Total Engineered Solutions

 Other

 —

 —

 —

 Total

 $

 $

 $

 Geographic Area

 We sell our line of products primarily in the United States, with additional sales in Canada, Mexico, Europe, Asia and Latin America. Sales are attributed to countries
 based upon the location of the customer. Our sales are substantially denominated in U.S. dollars.

 The following tables provide disaggregation of net sales information by geographic area within each operating segment for the years ended December 31, 2023, 2022 and
 2021 (in thousands):

 Year Ended December 31, 2023

 Other

 Total

 Geographic Area:

 United States

 $

 659,570

 $

 319,904

 $

 168,878

 $

 —

 $

 1,148,352

 36,088

 17,081

 25,689

 —

 78,858

 Europe

 59,266

 —

 60,190

 36,350

 6,658

 —

 43,057

 Asia

 19,522

 —

 20,399

 Other foreign

 4,657

 2,573

 —

 7,416

 Total

 $

 $

 $

 $

 —

 $

 Year Ended December 31, 2022

 Other

 Total

 Geographic Area:

 United States

 $

 682,145

 $

 335,281

 $

 191,678

 $

 —

 $

 1,209,104

 35,233

 14,596

 16,762

 —

 66,591

 Europe

 37,784

 —

 38,520

 26,019

 4,897

 —

 31,317

 Asia

 2,408

 16,715

 —

 19,186

 Other foreign

 4,105

 2,171

 —

 7,097

 Total

 $

 $

 $

 $

 —

 $

 Year Ended December 31, 2021

 Other

 Total

 Geographic Area:

 United States

 $

 677,684

 $

 309,247

 $

 147,447

 $

 —

 $

 1,134,378

 35,063

 13,585

 13,912

 —

 62,560

 Europe

 26,759

 —

 27,683

 19,741

 5,547

 —

 25,646

 Asia

 40,771

 —

 41,016

 Other foreign

 4,028

 2,869

 —

 7,533

 Total

 $

 $

 $

 $

 —

 $

 23. Commitments and Contingencies

 Total rent expense for the three years ended December 31, 2023 was as follows (in thousands):

 Total (1)

 Real Estate

 Other

 2023

 $

 19,706

 $

 15,735

 $

 3,971

 2022

 14,135

 11,385

 2,750

 2021

 12,065

 9,500

 2,565

 (1)

 In cludes
 expenses of approximately $ 3.3 million, $2.7 million, and $ 2
 million for the years ended December 31, 2023, 2022 and 2021, respectively, related to non-lease components such as maintenance, property taxes, etc., and operating lease expense for leases with an initial term of 12 months or less,
 which is no t material.

 For our operating lease minimal rental payments that we are obligated to make, see Note 7, "Leases."

 Warranties

 We generally warrant our products against certain manufacturing and other defects. These product warranties are provided for specific periods of time depending on the
 nature of the product. As of December 31, 2023 and 2022, we have accrued $ 21.1 million and $ 19.7 million, respectively, for estimated product warranty claims included in accrued customer returns. The accrued product warranty costs are based primarily on historical
 experience of actual warranty claims. Warranty expense for each of the years 2023, 2022, and 2021 were $ 120 million, $ 112.5 million and $ 91.9 million, respectively.

 The following table provides the changes in our product warranties:

 2023

 2022

 Balance, beginning of period

 $

 19,667

 $

 17,463

 Liabilities accrued for current year sales

 120,027

 112,477

 Settlements of warranty claims

 ( 118,560

)

 ( 110,273

)

 Balance, end of period

 $

 21,134

 $

 19,667

 Letters of Credit

 As of December 31, 2023 and 2022, we had outstanding letters of credit with certain vendors aggregating approximately $ 2.3 million and $ 2.4 million, respectively. These letters of
 credit are being maintained as security for reimbursements to insurance companies and as security to the landlord of our administrative offices in Long Island City, New York. The contract amount of the letters of credit is a reasonable estimate
 of their value as the value for each is fixed over the life of the commitment.

 Change of Control Arrangements

 We have a change in control arrangement with one key
 officer. In the event of a change of control (as defined in the agreement), the executive will receive severance payments and certain other benefits as provided in his agreement.

 Asbestos

 I n 1986, we acquired a brake business, which we subsequently sold in March 1998 and which is accounted
 for as a discontinued operation in the accompanying statement of operations. When we originally acquired this brake business, we assumed future liabilities relating to any alleged exposure to asbestos-containing products manufactured by the
 seller of the acquired brake business. In accordance with the related purchase agreement, we agreed to assume the liabilities for all new claims filed on or after September 2001. Our ultimate exposure will depend upon the number of claims filed
 against us on or after September 2001, and the amounts paid for settlements, awards of asbestos-related damages, and defense of such claims. At December 31, 2023, approximately 1,390 cases were outstanding for which we may be responsible for any related liabilities. Since inception in September 2001
 through December 31, 2023, the amounts paid for settled claims and awards of asbestos-related damages, including interest, were approximately $ 74.6
 million. We do not have insurance coverage for the indemnity and defense costs associated with the claims we face.

 In evaluating our potential asbestos-related liability, we have considered various factors including, among other things, an actuarial study of the asbestos related
 liabilities performed by an independent actuarial firm, our settlement amounts and whether there are any co-defendants, the jurisdiction in which lawsuits are filed, and the status and results of such claims. As is our accounting policy, we
 consider the advice of actuarial consultants with experience in assessing asbestos-related liabilities to estimate our potential claim liability; and perform an actuarial evaluation in the third quarter of each year and whenever events or changes
 in circumstances indicate that additional provisions may be necessary. The methodology used to project asbestos-related liabilities and costs in our actuarial study considered: (1) historical data available from publicly available studies; (2) an
 analysis of our recent claims history to estimate likely filing rates into the future; (3) an analysis of our currently pending claims; (4) an analysis of our settlements and awards of asbestos-related damages to date; and (5) an analysis of
 closed claims with pay ratios and lag patterns in order to develop average future settlement values. Based on the information contained in the actuarial study and all other available information considered by us, we have concluded that no amount
 within the range of settlement payments and awards of asbestos-related damages was more likely than any other and, therefore, in assessing our asbestos liability we compare the low end of the range to our recorded liability to determine if an
 adjustment is required.

 In accordance with our policy to perform an annual actuarial evaluation in the third quarter of each year, an actuarial study was performed as of August 31, 2023. T he results of the August 31,
 2023 study included an estimate of our undiscounted liability for settlement payments and awards of asbestos-related damages, excluding legal costs, ranging from $ 84 million to $135.3 million for the period through 2065. The
 change from the prior year study, which was as of August 31, 2022, was a $ 15.2 million increase for the low end of the range and a $ 23.7 million increase for the high end of the range. The increase in the estimated undiscounted liability from the prior year study at both the low
 end and high end of the range reflects our actual experience, our historical data and certain assumptions with respect to events that may occur in the future.

 Based upon the results of the August 31, 2023 actuarial study, in September 2023 we increased our asbestos liability to $84 million, the low end of the range, and recorded an incremental pre-tax provision of $23.8 million in earnings (loss) from discontinued operations in the accompanying
 statement of operations. Future legal costs, which are expensed as incurred and reported in earnings (loss) from discontinued operations in the accompanying statement of operations, are estimated, according to the August 31, 2023 study, to
 range from $53.1 million to $ 105.2 million for the period through 2065. Total operating cash outflows related to discontinued operations, which include settlements, awards of asbestos-related damages and legal costs, net of taxes, were $ 11 million, $12 million and $8.8
 million for the years ended December 31, 2023, 2022 and 2021, respectively.

 We plan to perform an annual actuarial evaluation during the third quarter of each year for the foreseeable future and whenever events or changes in circumstances
 indicate that additional provisions may be necessary. Given the uncertainties associated with projecting such matters into the future and other factors outside our control, we can give no assurance that additional provisions will not be required.
 We will continue to monitor events and changes in circumstances surrounding these potential liabilities in determining whether to perform additional actuarial evaluations and whether additional provisions may be necessary. At the present time,
 however, we do not believe that any additional provisions would be reasonably likely to have a material adverse effect on our liquidity or consolidated financial position.

 Other Litigation

 In connection with the aforementioned former brake business, we were subject to a legal
 proceeding alleging a breach of contract claim of the related purchase agreement. In May 2023, we were found liable for approximately $ 11
 million and, as such, in the second quarter of 2023 we recorded a pre-tax provision of such amount in earnings (loss) from discontinued operations in the accompanying statement of operations. However, in August 2023, we reached a final
 settlement of the legal proceeding, in which we reduced our liability to $ 10.5 million. In connection therewith, we reduced the
 pre-tax provision to $ 10.5 million and recorded a $ 0.5 million credit in earnings (loss) from discontinued operations in the accompanying statement of operations. Payment of such claim was made in early October 2023.

 We are currently involved in various other legal claims and legal proceedings (some of which may involve substantial amounts), including claims related to commercial
 disputes, product liability, employment, and environmental. Although these legal claims and legal proceedings are subject to inherent uncertainties, based on our understanding and
 evaluation of the relevant facts and circumstances, we believe that the ultimate outcome of these matters will not, either individually or in the aggregate, have a material adverse effect on our business, financial condition or results
 of operations. We may at any time determine that settling any of these matters is in our best interests, which settlement may include substantial payments. Although we cannot
 currently predict the specific amount of any liability that may ultimately arise with respect to any of these matters, we will record provisions when the liability is considered probable and reasonably estimable. Significant judgment is required
 in both the determination of probability and the determination as to whether an exposure can be reasonably estimated. As additional information becomes available, we reassess our potential liability related to these matters. Such revisions of the
 potential liabilities could have a material adverse effect on our business, financial condition or results of operations.

 ITEM 9.

 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A.

 CONTROLS AND PROCEDURES

 (a)

 Evaluation of Disclosure Controls and Procedures.

 We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported
 within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely
 decisions regarding required disclosure.

 Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule
 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Report. This evaluation also included consideration of our internal controls and procedures for the preparation of our financial statements
 as required under Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as
 of the end of the period covered by this Report.

 (b)

 Management's Report on Internal Control Over Financial Reporting.

 Pursuant to Section 404 of the Sarbanes-Oxley Act, as part of this Report we have furnished a report regarding our internal control over financial reporting as of December 31, 2023. The report is under the caption "Management's Report on
 Internal Control Over Financial Reporting" in "Item 8. Financial Statements and Supplementary Data," which report in included herein.

 (c)

 Attestation Report of Independent Registered Public Accounting Firm.

 KPMG LLP, our independent registered public accounting firm, has issued an opinion as to the effectiveness of the Company's internal control over financial reporting as of December 31, 2023. The opinion is under the caption "Report of
 Independent Registered Public Accounting Firm-Internal Control Over Financial Reporting" in "Item 8. Financial Statements and Supplementary Data" for this attestation report, which is included herein.

 (d)

 Changes in Internal Control Over Financial Reporting.

 During the quarter ended December 31, 2023 and subsequent to that date, we have not made changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control
 over financial reporting.

 We review, document and test our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in the 2013 Internal Control–Integrated Framework. We may
 from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. These efforts may lead to various changes in our internal control over financial reporting.

 ITEM 9B.

 OTHER INFORMATION

 None.

 ITEM 9C.

 DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not Applicable.

 ITEM 10.

 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The information required by this Item is incorporated herein by reference to the information in our Definitive Proxy Statement to be filed with the SEC in connection with our 2024 Annual Meeting of Stockholders (the "2024 Proxy Statement") set
 forth under the captions "Proposal No. 1 - Election of Directors," "Management Information," and "Corporate Governance."

 The Board of Directors of the Company has adopted a Code of Ethics that applies to all employees, officers and directors of the Company. The Company's Code of Ethics is available at ir.smpcorp.com under
 "Governance Documents." The Company intends to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Company's Code of Ethics that applies to its principal executive officer,
 principal financial officer, principal accounting officer or controller, or persons performing similar functions, by disclosing such information on the Company's website, at the address specified above.

 ITEM 11.

 EXECUTIVE COMPENSATION

 The information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under captions "Corporate Governance," "Compensation Discussion & Analysis," "Executive Compensation and
 Related Information" and "Report of the Compensation and Management Development Committee."

 ITEM 12.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under the captions "Executive Compensation and Related Information" and "Security Ownership of Certain Beneficial
 Owners and Management."

 ITEM 13.

 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The information required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under the captions "Corporate Governance" and "Executive Compensation and Related Information.

 ITEM 14.

 PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The Company's independent registered public accounting firm is KMPG LLP, New York, New York (PCAOB ID 185). All other information
 required by this Item is incorporated herein by reference to the information in our 2024 Proxy Statement set forth under the captions "Audit and Non-Audit Fees."

 ITEM 15.

 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a)

 (1)

 The Index to Consolidated Financial Statements of the Registrant under Item 8 of this Report is incorporated herein by reference as the list of Financial Statements required as part of this Report.

 (2)

 The following financial schedule and related report for the years 2023, 2022 and 2021 is submitted herewith:

 Schedule II - Valuation and Qualifying Accounts

 All other schedules are omitted because they are not required, not applicable or the information is included in the financial statements or notes thereto.

 (3)

 Exhibits.

 The exhibit list in the Exhibit Index is incorporated by reference as the list of exhibits required as part of this Report.

 ITEM 16.

 FORM 10-K SUMMARY

 None.

 EXHIBIT INDEX

 Exhibit

 Number

 3.1

 Restated By-Laws, dated as of December 15, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed as of December
 21, 2022).

 3.2

 Restated Certificate of Incorporation, filed as of August 1, 1990 (incorporated by reference to the Company's Annual Report on Form 10-K for the year
 ended December 31, 2017).

 3.3

 Certificate of Amendment of the Certificate of Incorporation, filed as of February 27, 1996 (incorporated by reference to the Company's Annual Report on
 Form 10-K for the year ended December 31, 2017).

 10.1

 Amended and Restated Employee Stock Ownership Plan and Trust of Standard Motor Products, Inc., dated as of December 21, 2018 (incorporated
 by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2021).

 10.2

 2006 Omnibus Incentive Plan of Standard Motor Products, Inc., as amended (incorporated by reference to the Company's Registration Statement on Form S-8
 (Registration No. 333-174330), filed as of May 19, 2011).

 10.3

 Supplemental Compensation Plan, effective as of October 1, 2001 (incorporated by reference to the Company's Annual Report on Form 10-K for the year
 ended December 31, 2001).

 10.4

 Severance Compensation Agreement, dated as of December 12, 2001, between Standard Motor Products, Inc. and James Burke (incorporated by reference to
 the Company's Annual Report on Form 10-K for the year ended December 31, 2001).

 10.5

 Amendment to the Standard Motor Products, Inc. Supplemental Compensation Plan, effective as of December 1, 2006 (incorporated by reference to the
 Company's Annual Report on Form 10-K for the year ended December 31, 2006).

 10.6

 Amendment to Severance Compensation Agreement, dated as of December 15, 2008, between Standard Motor Products, Inc. and James Burke (incorporated by
 reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2009).

 10.7

 Amended and Restated Supplemental Executive Retirement Plan, dated as of December 31, 2010 (incorporated by reference to the Company's Annual
 Report on Form 10-K for the year ended December 31, 2010).

 10.8

 Amendment to Severance Compensation Agreement, dated as of March 8, 2011, between Standard Motor Products, Inc. and James Burke (incorporated
 by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2010).

 10.9

 Credit Agreement, dated as of October 28, 2015, among Standard Motor Products, Inc., as borrower and the other loan parties thereto, and JPMorgan
 Chase Bank, N.A., as agent and lender, J.P. Morgan Securities LLC, as sole bookrunner and joint lead arranger, Bank of America, N.A. and Wells Fargo Bank, National Association, as co-syndication agents and joint lead arrangers, and the
 other lenders thereto (incorporated by reference to the Company's Current Report on Form 8-K filed as of October 30, 2015).

 EXHIBIT INDEX

 Exhibit

 Number

 10.10

 Standard Motor Products, Inc. Amended and Restated 2016 Omnibus Incentive Plan and forms of related award agreements (incorporated by
 reference to the Company's Registration Statement on Form S-8 (Registration No. 333-256362) filed as of May 21, 2021).

 10.11

 First Amendment to Credit Agreement, dated as of December 10, 2018, among Standard Motor Products, Inc. and SMP Motor Products Ltd., as borrowers,
 JPMorgan Chase Bank, N.A., as agent and lender, and the other lenders thereto (incorporated by reference to the Company's Current Report on Form 8-K filed as of December 13, 2018).

 10.12

 Second Amendment to Credit Agreement, dated as of March 4, 2022, among Standard Motor Products, Inc., SMP Motor Products Ltd. and Trumpet
 Holdings, Inc., as borrowers, JPMorgan Chase Bank, N.A., as agent and lender, and the other lenders thereto (incorporated by reference to the Company's Current Report on Form 8-K filed as of March 10, 2022).

 10.13

 Credit Agreement, dated as of June 1, 2022, among Standard Motor Products, Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative
 Agent, Bank of America, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents, J.P. Morgan Securities LLC, as Sustainability Structuring Agent, JPMorgan Chase Bank, N.A., as Sole Bookrunner, JPMorgan Chase Bank, N.A.,
 BofA Securities, Inc. and Wells Fargo Securities, LLC, as Joint Lead Arrangers, and the lenders named therein (incorporated by reference to the Company's Current Report on Form 8-K filed as of June 2, 2022).

 List of Subsidiaries of Standard Motor Products, Inc.

 Consent of KPMG LLP, Independent Registered Public Accounting Firm.

 Power of Attorney (see signature page to Annual Report on Form 10-K).

 31.1

 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2

 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1

 Certification of Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2

 Certification of Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 Standard Motor Products, Inc. Clawback Policy, dated as of October 3, 2023.

 EXHIBIT INDEX

 101.INS**

 101.SCH**

 101.CAL**

 101.LAB**

 101.PRE**

 101.DEF**

 **

 SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 STANDARD MOTOR PRODUCTS, INC.

 (Registrant)

 /s/ Eric P. Sills

 Eric P. Sills

 Chief Executive Officer and President

 /s/ Nathan R. Iles

 Nathan R. Iles

 Chief Financial Officer

 New York, New York

 POWER OF ATTORNEY

 KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Eric P. Sills and Nathan R. Iles, jointly and severally, as his attorneys-in-fact, each with the power of substitution, for him in any
 and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming
 all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

 /s/ Eric P. Sills

 Eric P. Sills

 Chief Executive Officer and President

 (Principal Executive Officer)

 /s/ Nathan R. Iles

 Nathan R. Iles

 Chief Financial Officer

 (Principal Financial and Accounting Officer)

 /s/ James J. Burke

 James J. Burke

 Chief Operating Officer and Director

 /s/ Alejandro C. Capparelli

 Alejandro C. Capparelli, Director

 /s/ Pamela Forbes Lieberman

 Pamela Forbes Lieberman, Director

 /s/ Patrick S. McClymont

 Patrick S. McClymont, Director

 /s/ Joseph W. McDonnell

 Joseph W. McDonnell, Director

 /s/ Alisa C. Norris

 Alisa C. Norris, Director

 /s/ Pamela S. Puryear, Ph. D.

 Pamela S. Puryear, Director

 Schedule II Valuation and Qualifying Accounts

 Years ended December 31, 2023, 2022 and 2021

 Additions

 Description

 Balance at

 beginning

 of year

 Charged to

 costs and

 expenses

 Other

 Deductions

 Balance at

 end of year

 Year ended December 31, 2023:

 Allowance for expected credit losses

 $

 4,129,000

 $

 2,940,000

 $

 —

 $

 185,000

 $

 6,884,000

 Allowance for discounts

 1,246,000

 12,449,000

 —

 12,534,000

 1,161,000

 $

 5,375,000

 $

 15,389,000

 $

 —

 $

 12,719,000

 $

 8,045,000

 Allowance for sales returns

 $

 37,169,000

 $

 162,525,000

 $

 —

 $

 161,456,000

 $

 38,238,000

 Year ended December 31, 2022:

 Allowance for expected credit losses

 $

 4,815,000

 $

 6,242,000

 (1)

 $

 —

 $

 6,928,000

 $

 4,129,000

 Allowance for discounts

 1,355,000

 13,456,000

 —

 13,565,000

 1,246,000

 $

 6,170,000

 $

 19,698,000

 $

 —

 $

 20,493,000

 $

 5,375,000

 Allowance for sales returns

 $

 42,412,000

 $

 152,985,000

 $

 —

 $

 158,228,000

 $

 37,169,000

 Year ended December 31, 2021:

 Allowance for expected credit losses

 $

 4,406,000

 $

 450,000

 $

 —

 $

 41,000

 $

 4,815,000

 Allowance for discounts

 1,416,000

 13,827,000

 —

 13,888,000

 1,355,000

 $

 5,822,000

 $

 14,277,000

 $

 —

 $

 13,929,000

 $

 6,170,000

 Allowance for sales returns

 $

 40,982,000

 $

 129,964,000

 $

 —

 $

 128,534,000

 $

 42,412,000

 (1)

 Includes a $ 7
 million charge relating to one of our customers that filed a petition for bankruptcy in January 2023.