Stoneridge SRI Form 10-Q filing Q2 FY2026

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

(1) Net of tax expense of $0 and $469 for the three months ended June 30, 2026 and 2025, respectively. Net of tax expense of $0 and $827 for the six months ended June 30, 2026 and 2025, respectively.

The Company has combined comprehensive (loss) income from continuing operations and comprehensive (loss) income from discontinued operations herein.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s 2025 Form 10-K.

On January 30, 2026, the Company completed the sale of its Control Devices business segment. The Company determined that the disposal of the Control Devices segment represented a strategic shift that has a major effect on the Company's operations and financial results. Accordingly, the Company has applied the provisions of ASC Topic 205-20, Presentation of Financial Statements — Discontinued Operations, and has retrospectively presented the financial results of the Control Devices segment as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. The assets and liabilities, results of operations, and cash flows of the Control Devices segment have been segregated from those of continuing operations in the condensed consolidated balance sheets, condensed consolidated statements of operations, and condensed consolidated statements of cash flows, respectively, for all periods presented. Unless otherwise noted, the disclosures in these notes to the unaudited condensed consolidated financial statements relate solely to the Company's continuing operations. See Note 3 — Discontinued Operations for further information.

Prior to the sale of the Control Devices segment, the Company reported three reportable segments: Electronics, Control Devices, and Stoneridge Brazil. Following the completion of the sale on January 30, 2026, the Control Devices segment is no longer a reportable segment of the Company. The Company now operates in two reportable segments: Electronics and Stoneridge Brazil. In connection with the retrospective presentation of Control Devices as discontinued operations, prior-period segment information has been recast to conform to the current period presentation in accordance with ASC Topic 280, Segment Reporting. See Note 14 — Segment Reporting for further information.

Reclassifications

Certain prior period amounts have been reclassified to conform to their 2026 presentation in the condensed consolidated financial statements.

(2) Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets," which allows entities to use a simplified approach when estimating credit losses for current accounts receivable and contract assets arising from revenue transactions. The standard update permits consideration of collections after the balance sheet date when estimating expected credit losses, and allows consideration of subsequent collections when estimating credit losses, reducing documentation burden. This standard is effective for annual and interim periods within annual reporting periods beginning after December 15, 2025. The Company adopted ASU 2025-05 in the first quarter of 2026. The adoption of this guidance did not have a significant impact on the Company’s financial statements.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures,” which requires companies to disclose certain costs and expenses within the notes to the financial statements. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact on our consolidated financial statement disclosures.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software," which modernizes guidance on internal-use software costs to reflect current development practices and improve operability. This standard eliminates the project stages model and replaces it with a principles based recognition threshold. This standard also creates new capitalization criteria that clarifies capitalization when funding is authorized by management and is probable to be completed and used. This standard is effective for annual and interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact on our consolidated financial statements and disclosures.

In November 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements," to better align hedge accounting with an entity's risk management activities and to address issues arising from reference rate reform. The update provides greater flexibility in designating hedging relationships and reduces the risk of hedge dedesignation due to minor changes in hedged items. The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods, with the option to apply retrospectively. Early adoption is permitted. We are currently evaluating the impact on our consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-10, "Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities," which provides explicit guidance on the accounting for government grants received by business entities. The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2028, and interim periods within those annual reporting periods, with the option to apply retrospectively. Early adoption is permitted. We are currently evaluating the impact on our consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements," which provides clarifications intended to improve the consistency and usability of interim disclosure requirements and the applicability to Topic 270. The amendments also provide additional guidance for reporting material events occurring after the most recent annual period. The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with the option to apply retrospectively. Early adoption is permitted. We are currently evaluating the impact on our consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-12, "Codification Improvements," which addresses changes to the Codification that clarify, correct and improve the Codification making it easier to understand and apply. The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods, with the option to apply retrospectively. Early adoption is permitted. We are currently evaluating the impact on our consolidated financial statements and disclosures.

(3) Discontinued Operations

Sale of Control Devices

On January 30, 2026 (the “Closing Date”, “Closing”), the Company and certain of its subsidiaries entered into a Stock Purchase Agreement (“Purchase Agreement”) with Control Devices Acquisition, LLC, a Delaware limited liability company, an affiliate of Center Rock Capital Partners, L.P. (“Buyer”), pursuant to which the Company sold, on the Closing Date, its Control Devices business segment (the “Business”) via the sale of the Company’s interests in its former wholly-owned subsidiaries, Stoneridge Control Devices, Inc. (“Control Devices”), Stoneridge Asia Holdings Ltd., Stoneridge Asia Pacific Electronics (Suzhou) Co. Ltd. (“Stoneridge Suzhou” and such sale, the “Sale”).

The purchase price paid to the Company was $59,000 and was subject to customary post-closing adjustments. The Company incurred a loss on disposal, net of tax, of $9,817. The loss on disposal excludes the impact of the $21,628 impairment of fixed assets charge for Control Devices recognized in the fourth quarter of 2025.

The strategic review of the Control Devices business did not meet the criteria for classifying the Control Devices segment as held for sale as of December 31, 2025.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Mexico Manufacturing Agreement

Simultaneously with the Closing, Stoneridge Electronics and Buyer entered into a Mexico Manufacturing Agreement pursuant to which Stoneridge Electronics will continue manufacturing certain products for Buyer through its Mexico-based maquiladora using machinery and tools transferred to Buyer under the Purchase Agreement. The Mexico Manufacturing Agreement has an initial three-year term and automatically renews for successive one-year periods unless either Stoneridge Electronics or Buyer provides written notice of non-renewal at least twelve months prior to the expiration of the then-current term. Under the Mexico Manufacturing Agreement, Buyer is responsible for payment of materials costs, the product price and certain other costs incurred outside the ordinary course of manufacturing and fulfillment. Product pricing under this agreement was intended to, and is expected to result in, returns that are materially consistent with historical actuals.

During the three months ended June 30, 2026, the Company received payments from Buyer of $8,102 related to manufacturing activities and $18,196 related to materials cost reimbursements. During the six months ended June 30, 2026, the Company received payments from Buyer of $11,988 related to manufacturing activities and $27,156 related to materials cost reimbursements, and $6,375 related to the settlement of outstanding accounts payable as of the closing date of the sale.

As of June 30, 2026, amounts receivable from Buyer under the Agreement were $9,271 and no amounts were payable to Buyer. Amounts receivable were presented on a gross basis within accounts receivable on the Company's condensed consolidated balance sheet.

China Manufacturing Agreement

Simultaneously with the Closing, Stoneridge Electronics AS (the Company's Estonian legal entity) and Buyer entered into a China Manufacturing Agreement pursuant to which Buyer will continue manufacturing certain products for the Company’s Electronics business segment at the facility in Suzhou, China transferred to Control Devices under the Purchase Agreement. The China Manufacturing Agreement has an initial twelve month term and will automatically extend for an additional six months unless Stoneridge Electronics AS provides written notice of termination at least thirty days prior to the end of the initial term. Manufacturing costs under the China Manufacturing Agreement are expected to be based on Buyer’s actual costs, consistent with the historical cost structure used at the facility in Suzhou, China. Under the China Manufacturing Agreement Stoneridge Electronics AS is responsible for payment of materials costs, shipping costs, manufacturing costs and any excluded costs approved by Stoneridge Electronics AS in writing. A fixed USD/RMB exchange rate applies for the first six months following the Closing, with adjustments every three months thereafter.

During the three months ended June 30, 2026, the Company incurred costs related to the China Manufacturing Agreement of $919 related to manufacturing service fees and $4,193 related to materials cost reimbursement. During the six months ended June 30, 2026, the Company incurred costs related to the China Manufacturing Agreement of $1,468 related to manufacturing service fees and $6,251 related to materials cost reimbursement.

As of June 30, 2026, amounts receivable from Buyer under the Agreement were $8,320 and amounts payable to Buyer were $9,098, each presented on a gross basis within accounts receivable, accounts payable and accrued liabilities, respectively, on the Company's condensed consolidated balance sheet.

After of the sale of the Business and entering into the Mexico and China Manufacturing agreements, the Company does not have any revenues or expenses presented in continuing operations that before the sale of the Business were eliminated in consolidated financial statements as intra-entity transactions.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The following tables display summarized activity in our condensed consolidated statements of operations for discontinued operations during the three months ended June 30, 2026 and 2025, related to the Control Devices business.

(A) The operations of the Control Devices business were included only for the period January 1, 2026 to January 30, 2026 as the sale of this business was completed on January 30, 2026. Also includes expenses incurred in February and March 2026, after the sale, but related to discontinued operations.

(B) Transaction costs included in SG&A for the three months ended June 30, 2026 and 2025 were $0 and $1,044, respectively, and for the six months ended June 30, 2026 and 2025 were $3,700 and $1,345, respectively.

The following table presents depreciation and amortization and capital expenditures attributable to the Control Devices business for the three months ended March 31, 2026 and 2025:

Intercompany sales to Control Devices were $0 and $6,867 for the three months ended June 30, 2026 and 2025, respectively. Intercompany sales to Control Devices were $418 and $12,561 for the six months ended June 30, 2026 and 2025, respectively.

Intercompany purchases from Control Devices were $0 and $745 for the three months ended June 30, 2026 and 2025, respectively. Intercompany purchases from Control Devices were $378 and $1,767 for the six months ended June 30, 2026 and 2025, respectively.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The following table summarizes the major classes of assets and liabilities of the Control Devices business presented as discontinued operations as of December 31, 2025:

(4) Revenue

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Incidental items that are not significant in the context of the contract are recognized as expense. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold. Customer returns only occur if products do not meet the specifications of the contract and are not connected to any repurchase obligations of the Company.

The Company does not have any financing components or significant payment terms as payment occurs shortly after the point of sale. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of operations. Shipping and handling costs associated with outbound freight after control over a product is transferred to the customer are accounted for as a fulfillment cost and are included in cost of sales.

Revenue by Reportable Segment

Electronics. Our Electronics segment designs and manufactures advanced driver information solutions, vision systems, connectivity and compliance solutions and control modules. These products are sold principally to the commercial and off-highway vehicle markets through our original equipment manufacturer ("OEM") and aftermarket channels in the European, North American and Asia Pacific regions. Our vision and safety systems are sold principally to the commercial vehicle and off-highway vehicle markets in the European and North American regions.

Stoneridge Brazil. Our Stoneridge Brazil segment primarily serves the South American region and specializes in the design, manufacture and sale of vehicle tracking devices and monitoring services, driver information systems, vehicle security alarms and convenience accessories, telematics solutions and multimedia devices. Stoneridge Brazil sells its products directly to OEMs and Tier 1 supplier customers, the aftermarket distribution channel and to factory authorized dealer installers, also referred to as original equipment services. In addition, monitoring services and tracking devices are sold directly to corporate customers and individual consumers.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The following tables disaggregate our revenue by reportable segment and geographical location(1) for the three months ended June 30, 2026 and 2025:

The following tables disaggregate our revenue by reportable segment and geographical location(1) for the six months ended June 30, 2026 and 2025:

(1) Company sales based on geographic location are where the sale originates not where the customer is located.

Performance Obligations

For OEM and Tier 1 supplier customers, the Company typically enters into contracts to provide serial production parts that consist of a set of documents including, but not limited to, an award letter, master purchase agreement and master terms and conditions. For each production product, the Company enters into separate purchase orders that contain the product specifications and an agreed-upon price. The performance obligation does not exist until a customer release is received for a specific number of parts. The majority of the parts sold to OEM and Tier 1 supplier customers are customized to the specific customer, with the exception of camera monitoring systems (“CMS”) sold through our aftermarket channel that are mostly common across all customers. The transaction price is equal to the contracted price per part and there is no expectation of material variable consideration in the transaction price. For most customer contracts, the Company does not have an enforceable right to payment at any time prior to when the parts are shipped or delivered to the customer; therefore, the Company recognizes revenue at the point in time it satisfies a performance obligation by transferring control of a part to the customer. Certain customer contracts contain an enforceable right to payment if the customer terminates the contract for convenience and therefore are recognized over time using the cost to complete input method.

Our aftermarket products, including accessories and replacement parts, are focused on meeting the demand for safety, compliance and entertainment applications and are sold primarily to aftermarket distributors in our South American and European markets, as well as direct to customers in North America. Aftermarket products have one type of performance obligation, which is the delivery of aftermarket parts and spare parts. For aftermarket customers, the Company typically has standard terms and conditions for all customers. In addition, aftermarket products have alternative use as they can be sold to multiple customers. Revenue for aftermarket part production contracts is recognized at a point in time when the control of the parts transfers to the customer, which is based on the shipping terms. Aftermarket contracts may include variable consideration related to discounts and rebates, which is included in the transaction price upon recognizing the product revenue.

A small portion of the Company’s sales are comprised of contracts for vehicle tracking devices and monitoring services to individual, corporate, fleet and cargo customers in our Stoneridge Brazil segment. These service contracts are generally not

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

capable of being distinct and are accounted for as a single performance obligation. We recognize revenue for our monitoring products and services contracts over the life of the contract. There is no variable consideration associated with these contracts. The Company has the right to consideration from a customer in the amount that corresponds directly with the value to the customer of the Company’s performance to date. Therefore, the Company recognizes revenue over time using the practical expedient ASC 606-10-55-18 in the amount the Company has a “right to invoice” rather than selecting an output or input method.

Contract Balances

The Company had no material contract assets, contract liabilities or capitalized contract acquisition costs as of June 30, 2026 and December 31, 2025.

(5) Inventories

Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consist of the following:

Inventory valued using the FIFO method was $93,478 and $91,848 at June 30, 2026 and December 31, 2025, respectively. Inventory valued using the average cost method was $19,521 and $14,574 at June 30, 2026 and December 31, 2025, respectively.

(6) Financial Instruments and Fair Value Measurements

Financial Instruments

A financial instrument is cash or a contract that imposes an obligation to deliver or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The fair value of debt approximates the carrying value of debt, due to the variable interest rate on our Credit Facility and the maturity of outstanding debt.

Derivative Instruments and Hedging Activities

During 2025, the Company had open Mexican peso-denominated foreign currency forward contracts. The Company used foreign currency forward contracts solely for hedging and not for speculative purposes. Management believes that its use of these instruments to reduce risk was in the Company’s best interest. The counterparties to these financial instruments were financial institutions with investment grade credit ratings.

Foreign Currency Exchange Rate Risk

Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction with the resulting adjustments included on the condensed consolidated statements of operations within other (income) expense, net. These foreign currency transaction (gains) losses, including the impact of hedging activities, were $(328) and $2,733 for the three months ended June 30, 2026 and 2025, and $(54) and $2,475 for the six months ended June 30, 2026 and 2025, respectively.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk. The Company has historically used derivative financial instruments as cash flow hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.

Cash Flow Hedges

The Company entered into foreign currency forward contracts to hedge the Mexican peso currency in 2025. These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges. As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive loss, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated other comprehensive loss fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. The cash flow hedges were highly effective. The effectiveness of the transactions were measured using regression analysis and forecasted future purchases of the currency.

In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges and, therefore, are marked-to-market with gains and losses recognized in the Company’s condensed consolidated statements of operations as a component of other expense (income), net.

The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows:

Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges

The Company held Mexican peso-denominated foreign currency forward contracts which expired ratably on a monthly basis from January 2025 to December 2025.

The Company evaluated the effectiveness of the Mexican peso denominated forward contracts held during 2025 and concluded that the hedges were highly effective.

Gross amounts recorded for the cash flow hedges in other comprehensive (loss) income and in net loss for the three months ended June 30 were as follows:

(A) Losses reclassified from other comprehensive (loss) income recognized in selling, general and administrative expenses ("SG&A") in the Company's condensed consolidated statements of operations were $(126) for the three months ended June 30, 2025. Gains reclassified from other comprehensive income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $155 for the three months ended June 30, 2025.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Gross amounts recorded for the cash flow hedges in other comprehensive (loss) income and in net loss for the six months ended June 30 were as follows:

(A) Losses reclassified from other comprehensive (loss) income recognized in selling, general and administrative expenses ("SG&A") in the Company's condensed consolidated statements of operations were $(127) for the six months ended June 30, 2025. Losses reclassified from other comprehensive (loss) income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $(442) for the six months ended June 30, 2025.

Cash flows from derivatives used to manage foreign currency exchange risks are classified as operating activities within the condensed consolidated statements of cash flows.

Fair Value Measurements

Historically, certain assets and liabilities held by the Company were measured at fair value on a recurring basis and were categorized using the three levels of the fair value hierarchy based on the reliability of the inputs used. Fair values estimated using Level 1 inputs consisted of quoted prices in active markets for identical assets or liabilities that the Company had the ability to access at the measurement date. Fair values estimated using Level 2 inputs, other than quoted prices, were observable for the asset or liability, either directly or indirectly and included among other things, quoted prices for similar assets or liabilities in markets that were active or inactive as well as inputs other than quoted prices that were observable. For forward currency contracts, inputs included forward foreign currency exchange rates. Fair values estimated using Level 3 inputs consisted of significant unobservable inputs. There were no assets or liabilities measured at fair value at June 30, 2026 or December 31, 2025.

(7) Share-Based Compensation

Compensation expense for share-based compensation arrangements, which is recognized in the condensed consolidated statements of operations as a component of SG&A expense, was $1,148 and $1,424 for the three months ended June 30, 2026 and 2025, respectively. Compensation expense for share-based compensation arrangements was $4,718 and $2,560 for the six months ended June 30, 2026 and 2025, respectively. The six months ended June 30, 2026 includes accelerated expense for employee retirements.

(8) Debt

Debt consisted of the following at June 30, 2026 and December 31, 2025:

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Revolving Credit Facility

On November 2, 2023, the Company entered into the Fifth Amended and Restated Credit Agreement (the “Credit Facility”). The Credit Facility provided for a $275,000 senior secured revolving credit facility and it replaced and superseded the Fourth Amended and Restated Credit Agreement. The Credit Facility had an accordion feature, which allows the Company to increase the availability by up to $150,000 upon the satisfaction of certain conditions, including the consent of lenders providing the increase in commitments, and also included a letter of credit subfacility, swing line subfacility and multicurrency subfacility. The Credit Facility had a termination date of November 2, 2026. Borrowings under the Credit Facility bear interest at either the Base Rate or the SOFR rate, at the Company’s option, plus the applicable margin as set forth in the Credit Facility. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio.

The Credit Facility contains customary affirmative covenants and representations. The Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) continuation of or change in business, (vii) restricted payments, (viii) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (ix) loans and investments and (x) changes in organizational documents and fiscal year. The Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $30,000, (v) any loan document shall cease to be a legal, valid and binding agreement, (vi) certain uninsured losses or proceedings against assets with a value in excess of $30,000, (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings.

On February 26, 2025, the Company entered into Amendment No. 1 to the Fifth Amended and Restated Credit Agreement and Waiver (“Amendment No. 1”). Amendment No. 1 provided for certain covenant relief and restrictions during the “Covenant Relief Period” (the period ending on the date that the Company was required to deliver a compliance certificate for the quarter ending December 31, 2025). During the Covenant Relief Period:

• the maximum leverage ratio of 3.50 was increased to 6.00 for the quarter ended March 31, 2025, 5.50 for the quarter ended June 30, 2025, 4.50 for the quarter ended September 30, 2025 and 3.50 for the quarter ended December 31, 2025;
• the minimum interest coverage ratio of 3.50 was waived for the quarter ended December 31, 2024 and was reduced to 2.00 for the quarters ended March 31 and June 30, 2025, and 2.50 and 3.50 for the quarters ended September 30, 2025 and December 31, 2025, respectively;
• the Company’s aggregate amount of cash and cash equivalents, defined as 100% of North American and 65% of foreign cash balances, could not exceed $70,000;
• the sale of significant assets (as defined) required repayment in the amount of any net cash proceeds received resulting in the reduction of the Credit Facility commitment, at the lesser of $100,000 or the net cash proceeds;
• there were certain restrictions on Restricted Payments (as defined); and
• a Permitted Acquisition (as defined) could not be consummated unless otherwise approved in writing by the required lenders.

Amendment No. 1 added an additional level to the leverage ratio based pricing grid, through maturity, when the leverage ratio is greater than 3.50.

As a result of entering into Amendment No. 1, the Company capitalized $561 of deferred financing costs during the six months ended June 30, 2025.

On November 5, 2025, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Credit Agreement and Consent Agreement (“Amendment No. 2”). Amendment No. 2 amended the Credit Facility and provided for certain covenant relief and restrictions through the Credit Facility's termination date of November 2, 2026. Amendment No. 2 superseded certain terms of the Credit Facility and Amendment No. 1 beginning November 5, 2025 and ending at the Credit Facility's termination date of November 2, 2026. Amendment No. 2 amended certain Credit Facility terms and provided covenant relief as follows:

• borrowing capacity was reduced from $275,000 to $225,000;

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

• the sale of the Control Devices business (as defined) was a permitted transaction and upon notice would result in the reduction of the Credit Facility commitment, at the lesser of $50,000 or the net cash proceeds of this transaction;
• the current minimum interest coverage ratio of 2.5 was extended through the quarter ending March 31, 2026 and increased to 3.5 for the quarter ended June 30, 2026 and thereafter;
  • if the Control Devices business sale is consummated, the minimum interest coverage ratio will increase to 3.5 as of the last day of the first full quarter ending after the sale and thereafter; and
• the maximum leverage ratio of 4.5 for the quarter ended September 30, 2025 and 3.5 for the quarter ended December 31, 2025 and thereafter remained unchanged.

As a result of entering into Amendment No. 2, the Company capitalized $216 of deferred financing costs and wrote off $192 of previously recorded deferred financing costs during the year ended December 31, 2025.

On January 30, 2026, as a result of the sale of the Control Devices business, the Credit Facility borrowing capacity was reduced from $225,000 to $175,000.

On March 6, 2026, the Company entered into Amendment No. 3 to the Fifth Amended and Restated Credit Agreement (“Amendment No. 3”). Amendment No. 3 amends and restates the Credit Facility in its entirety beginning December 31, 2025 and ending at the Credit Facility's amended termination date of July 1, 2027. Amendment No. 3 also provided for certain covenant relief and adjustments to terms and conditions as follows:

• expiration date of the Credit Facility is extended from November 2, 2026 to July 1, 2027;
• the current minimum interest coverage ratio of 2.50 was reduced to 1.60 for the quarter ended March 31, 2026, 1.70 for the quarter ended June 30, 2026, 1.75 for the quarter ended September 30, 2026 and 2.50 for the quarter ended December 31, 2026 and thereafter;
• the maximum leverage ratio was increased to 3.75 for the quarter ended December 31, 2025, increases to 6.25 for the quarter ended March 31, 2026, 6.75 for the quarter ended June 30, 2026, 6.00 for the quarter ended September 30, 2026 and 4.00 for the quarter ended December 31, 2026 and thereafter;
• on December 31, 2026, the current borrowing capacity of $175,000 will be reduced to the lesser of $157,500 or the then current Credit Facility commitment;
• modifications to Consolidated EBITDA (as defined); and
• modifications and additions to affirmative covenants.

As a result of entering into Amendment No. 3, the Company capitalized $1,590 of deferred financing costs and wrote off $182 of previously recorded deferred financing costs during the six months ended June 30, 2026.

Our Credit Facility matures on July 1, 2027, which is within twelve months of the issuance of the accompanying unaudited condensed consolidated financial statements, and will become current in the third quarter of 2026. The Company expects to refinance its Credit Facility. While there can be no assurance that the Company will refinance the current Credit Facility, the Company anticipates that the refinancing will occur prior to the issuance of the financial statements for the year ending December 31, 2026. The Company’s ability to continue as a going concern is contingent upon its ability to refinance its Credit Facility.

Borrowings outstanding on the Credit Facility were $151,089 and $180,942 at June 30, 2026 and December 31, 2025, respectively.

The Company was in compliance with all Credit Facility covenants at June 30, 2026 and December 31, 2025.

The Company also has outstanding letters of credit of $3,106 at June 30, 2026 and $2,106 at December 31, 2025.

Debt

The Company’s wholly owned subsidiary located in Stockholm, Sweden (the “Stockholm subsidiary”), has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $2,062 and $2,174, at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, there were no borrowings outstanding on this overdraft credit line. During the six months ended June 30, 2026, the subsidiary borrowed and repaid 40,373 Swedish krona, or $4,163. The Stockholm subsidiary has pledged certain of its assets as collateral in order to obtain a guarantee of certain of the Stockholm subsidiary’s obligations to third parties.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(9) Loss Per Share

Basic loss per share was computed by dividing net loss by the weighted-average number of Common Shares outstanding for each respective period. Diluted loss per share was calculated by dividing net loss by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. However, for all periods in which the Company recognized a net loss, the Company did not recognize the effect of the potential dilutive securities as their inclusion would be anti-dilutive. Potential dilutive shares of 414,075 and 187,351 for the three months ended June 30, 2026 and 2025, respectively, were excluded from diluted loss per share because the effect would be anti-dilutive. Potential dilutive shares of 454,123 and 149,292 for the six months ended June 30, 2026 and 2025, respectively, were excluded from diluted loss per share because the effect would be anti-dilutive.

Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows:

There were 535,556 and 972,099 performance-based right to receive Common Shares outstanding at June 30, 2026 and 2025, respectively. The right to receive Common Shares are included in the computation of diluted earnings per share, to the extent they are not anti-dilutive, based on the number of Common Shares that would be issuable if the end of the quarter were the end of the performance period.

(10) Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss for the three months ended June 30, 2026 and 2025 were as follows:

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Changes in accumulated other comprehensive loss for the six months ended June 30, 2026 and 2025 were as follows:

(11) Commitments and Contingencies

From time to time, we are subject to various legal actions and claims incidental to our business, including those arising out of breach of contracts, product warranties, product liability, patent infringement, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on its consolidated results of operations or financial position.

As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at the site. The Company engaged an environmental engineering consultant to assess the level of contamination and to develop a remediation and monitoring plan for the site. Soil remediation at the site was completed during the year ended December 31, 2010. A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in the fourth quarter of 2015. During the three and six months ended June 30, 2026 and 2025, the Company did not recognize any expense related to groundwater remediation. At June 30, 2026 and December 31, 2025, the Company had accrued liabilities of $138 and $142, respectively, related to expected future remediation costs. At June 30, 2026 and December 31, 2025, $38 and $42, respectively, were recorded as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets while the remaining amounts as of June 30, 2026 and December 31, 2025 were recorded as a component of other long-term liabilities. Costs associated with the recorded liability will be incurred to complete the groundwater remediation and monitoring. The recorded liability is based on assumptions in the remedial action plan as well as estimates for future remediation activities. Although the Company sold the Sarasota facility and related property in December 2011, the liability to remediate the site contamination remains the responsibility of the Company. Due to the ongoing site remediation, the Company is currently required to maintain a $1,489 letter of credit for the benefit of the buyer.

The Company’s Stoneridge Brazil subsidiary has civil, labor, environmental and other tax contingencies (excluding income tax) for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company’s legal advisors in Brazil. As a result, no provision has been recorded with respect to these contingencies, which amounted to R$38,797 ($7,496) and R$43,818 ($7,964) at June 30, 2026 and December 31, 2025, respectively. An unfavorable outcome on these contingencies could result in significant cost to the Company and adversely affect its results of operations and cash flows.

On August 12, 2020, the Brazilian Administrative Counsel for Economic Defense (“CADE”) issued a ruling against Stoneridge Brazil for abuse of dominance and market foreclosure through its prior use of exclusivity provisions in agreements with its distributors. The CADE tribunal imposed a R$7,995 ($1,545) fine which is included in the reasonably possible contingencies noted above. The Company continues to challenge this ruling in Brazilian federal court to reverse this decision by the CADE tribunal.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Long-Term Supply Commitment

In 2022, the Company entered into a long-term supply agreement, as amended, with a supplier for the purchase of certain electronic semiconductor components through December 31, 2030. Pursuant to the agreement, the Company paid capacity deposits of $1,000 each in December 2022 and June 2023. The capacity deposits are recognized in prepaid and other current assets on our condensed consolidated balance sheets and amortized ratably based on purchases over the life of the purchase commitment. This long-term supply agreement requires the Company to purchase minimum annual volumes while requiring the supplier to sell these components at a fixed price. The Company purchased $660 and $0 during the three months ended June 30, 2026 and 2025, respectively, and $857 and $0 during the six months ended June 30, 2026 and 2025, respectively, related to the annual required purchases. The Company is required to purchase $3,876, $7,489, $8,861, $5,975 and $2,170 of these components in each of the years 2026 through 2030, respectively. We evaluate our long-term supply agreement on a continuous basis in the context of customer demand and overall market dynamics. Part of that evaluation process has resulted in re-negotiating minimum annual volumes in the past. Should customer demand and market dynamics require us to re-evaluate our long-term supply commitments, we intend to engage with the supplier to negotiate an amendment to the long term supply agreement and amend the supply commitments to align with current market conditions.

Product Warranty and Recall

Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle existing and future claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. Our estimate is based on historical trends of units sold and claim payment amounts, combined with our current understanding of the status of existing claims, forecasts of the resolution of existing claims, expected future claims on products sold and commercial discussions with our customers. The key factors in our estimate are the warranty period and the customer source. The Company can provide no assurances that it will not experience material claims or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued. The current portion of the product warranty and recall reserve is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets. Product warranty and recall reserve included $6,975 and $9,378 of a long-term liability at June 30, 2026 and December 31, 2025, respectively, which is included as a component of other long-term liabilities on the condensed consolidated balance sheets.

In 2023, the Company received a demand for arbitration from one of our Control Devices' customers seeking recovery of warranty claims related to alleged defects in PM sensor products sold prior to the Company's exit from that product line in 2019. The Company denies responsibility for these claims. Based on our review of the technical and legal merits, we believe these warranty claims lack substantive merit and are significantly overstated. An arbitration hearing was held in the first quarter of 2026 in which the claimant sought approximately $41,000 in direct warranty damages plus additional reputational damage; a resolution is expected by the end of the year. While the Company believes a material loss is not probable, given the inherent uncertainty of arbitration proceedings, it is reasonably possible that the outcome could result in a loss in an amount that the Company is currently unable to estimate.

The following provides a reconciliation of changes in product warranty and recall reserve liability:

(12) Business Realignment

The Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs that are referred to as business realignment charges.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Business realignment charges incurred by reportable segment were as follows:

(A) Severance costs for the three and six months ended June 30, 2026 related to SG&A were $16 and $400, and related to severance costs in Europe. Severance costs for the three months ended June 30, 2025 related to SG&A and D&D were $34 and $1,382, respectively. Severance costs for the six months ended June 30, 2025 related to COGS, SG&A and D&D were $1,073, $140 and $1,576, respectively. The majority of the 2025 business realignment costs related to operational efficiency initiatives at our Juarez facility.

(B) Severance related costs for the six months ended June 30, 2025 related to SG&A were $1,077 for executive separation costs.

Business realignment charges incurred, classified by statement of operations line item were as follows:

Reconciliations of the beginning and ending liability balances related to business realignment were as follows:

(13) Income Taxes

For interim tax reporting, we estimate our annual effective tax rate and apply it to our year to date ordinary income. Tax jurisdictions with a projected or year to date loss for which a benefit cannot be realized are excluded.

For the three months ended June 30, 2026, income tax expense from continuing operations of $2,555 was attributable to the mix of earnings among tax jurisdictions, tax credits and incentives and the impact of valuation allowances in certain jurisdictions. The effective tax rate of (93.9)% varies from the statutory rate primarily due to tax credits and incentives and the impact of valuation allowances in certain jurisdictions.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

For the three months ended June 30, 2025, income tax expense from continuing operations of $1,542 was attributable to the mix of earnings among tax jurisdictions, foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (16.1)% varies from the statutory rate primarily due to foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings.

For the six months ended June 30, 2026, income tax expense of $3,969 was attributable to the mix of earnings among tax jurisdictions, tax credits and incentives and the impact of valuation allowances in certain jurisdictions. The effective tax rate of (24.7)% varies from the statutory rate primarily due to tax credits and incentives and the impact of valuation allowances in certain jurisdictions.

For the six months ended June 30, 2025, income tax expense of $3,118 was attributable to the mix of earnings among tax jurisdictions, foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (19.5)% varies from the statutory rate primarily due to foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings.

(14) Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer.

The Company has two reportable segments, Electronics and Stoneridge Brazil, which also represent its operating segments. The Electronics reportable segment produces advanced driver information solutions, vision systems, connectivity and compliance solutions and control modules. The Stoneridge Brazil reportable segment designs and manufactures vehicle tracking devices and monitoring services, driver information systems, vehicle security alarms and convenience accessories telematics solutions and multimedia devices.

In January 2026, the Company completed the sale of its Control Devices segment. Control Devices was previously a separate reportable segment of the Company; however, it is not reflected in the segment information presented below for any period shown.

The accounting policies of the Company’s reportable segments are the same as those described in Note 2, “Summary of Significant Accounting Policies” of the Company’s 2025 Form 10-K. The Company’s management evaluates the performance of its reportable segments based primarily on revenues from external customers, operating income and capital expenditures. Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.

The Company's management, including the CODM, utilizes operating income as the key performance measure of segment profitability to evaluate segment performance, and for planning and forecasting purposes to allocate resources to the segments, as management believes this measure is most reflective of the financial performance of the Company's operating segments. The CODM regularly evaluates budget-to-actual and period-over-period variances for this metric when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses operating income in evaluating the operating performance of each segment and as part of determining the compensation of the segment managers and certain other employees. COGS and D&D are the significant expenses regularly reviewed by the CODM. Other segment costs primarily include SG&A items.

The financial information presented below is for our two reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable. Such costs and eliminations do not meet the requirements for being classified as an operating segment. Unallocated Corporate costs include various support functions, such as accounting/finance, executive administration, human resources, information technology and legal as well as share-based compensation.

A summary of financial information by reportable segment is as follows:

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates:

(A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation.

(B)These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.

(C)Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries.

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(15) Investments

In December 2018, the Company entered into an agreement to make a $10,000 investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology which is accounted for under the equity method of accounting. The Company’s $10,000 investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. The Company has contributed $9,370 to the Autotech Fund II as of June 30, 2026. The Company contributed $40 and $100 to Autotech Fund II during the six months ended June 30, 2026 and 2025, respectively. The Company received distributions of $0 and $8 from Autotech Fund II during the six months ended June 30, 2026 and 2025, respectively. The Company has a 6.7% interest in Autotech Fund II. The Company recognized (gains) of $(222) and $(50) during the three months ended June 30, 2026 and 2025, respectively. The Company recognized losses (gains) of $9 and $(344) during the six months ended June 30, 2026 and 2025, respectively. The Autotech Fund II investment recorded in investments and other long-term assets in the condensed consolidated balance sheets was $8,473 and $8,442 as of June 30, 2026 and December 31, 2025, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a global supplier of safe and efficient electronics systems and technologies. Our systems and products power vehicle intelligence, while enabling safety and security for global commercial, off-highway and agricultural vehicle markets.

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes related thereto and other financial information included elsewhere herein.

Segments

In January 2026, we completed the sale of the Control Devices segment, which is reflected as discontinued operations in all periods presented. As a result, we now operate our business in two reportable business segments, which are the same as our two operating segments.

We are organized by products produced and markets served. Under this structure, our operations have been reported using the following segments:

Electronics. This segment includes results of operations from the production of advanced driver information solutions, vision systems, connectivity and compliance solutions and control modules.

Stoneridge Brazil. This segment includes results of operations that design and manufacture vehicle tracking devices and monitoring services, driver information systems, vehicle security alarms and convenience accessories, telematics solutions and multimedia devices.

Second Quarter Overview

The Company had net loss from continuing operations of $5.3 million, or $(0.19) per diluted share, for the three months ended June 30, 2026.

Net loss from continuing operations for the quarter ended June 30, 2026 decreased by $5.9 million, or $0.21 per diluted share, from net loss from continuing operations of $11.1 million, or $(0.40) per diluted share, for the three months ended June 30, 2025. Net sales increased by $23.8 million, or 15.1%, compared to the three months ended June 30, 2025, due to increased sales volumes in our North American vehicle market and higher sales resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices and higher Brazilian OEM sales from the launch of an infotainment product. Gross margin for the quarter ended June 30, 2026 decreased to 20.3% from 23.1% for the three months ended June 30, 2025 from higher direct material costs as a percentage of sales due to adverse foreign currency losses and excess inventory charges as well as adverse sales mix from lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025 in our Electronics segment. SG&A expense increased primarily due to higher incentive compensation and legal expenses, which were offset by lower D&D expense from 2025 business realignment costs and higher customer reimbursements in our Electronics segment. In addition, non-operating foreign currency gains favorably impacted results for the quarter ended June 30, 2026.

Our Electronics segment net sales increased by 12.8% compared to the second quarter of 2025 primarily due to an increase in our North American commercial vehicle market and higher sales of $7.1 million resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices. Additionally, sales were impacted by favorable euro and Swedish krona foreign currency translation. Segment gross margin decreased compared to the second quarter of 2025 from higher direct material costs due to adverse foreign currency losses and excess inventory charges as well as adverse sales mix from lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025. Operating income for the segment increased compared to the second quarter of 2025 because of lower SG&A expense from lower royalties and professional services and lower D&D from lower business realignment costs and higher customer reimbursements.

Our Stoneridge Brazil segment net sales increased by 37.6% compared to the second quarter of 2025 primarily from higher OEM product sales including the sales from the launch of an infotainment product and favorable foreign currency translation. Segment gross margin increased due to favorable variances from U.S. denominated material purchases and higher contribution from higher sales levels. Operating income increased due to favorable variances from U.S. dollar denominated material purchases and higher contribution from higher sales levels. Offsetting these favorable variances was an increase in SG&A expense from higher incentive compensation and selling costs reduced by a favorable Brazilian indirect tax claim settlement.

In the second quarter of 2026, SG&A expenses increased by $0.4 million compared to the second quarter of 2025 primarily because of higher incentive compensation and legal costs offset by a favorable Brazilian indirect tax claim settlement.

In the second quarter of 2026, D&D costs decreased by $2.9 million compared to the prior year second quarter primarily in our Electronics segment because of lower business realignment costs and higher customer reimbursements.

At June 30, 2026 and December 31, 2025, we had cash and cash equivalents balances primarily held at our foreign locations of $71.5 million and $53.1 million, respectively, and we had $151.1 million and $180.9 million, respectively, in borrowings outstanding on our Credit Facility. The 2026 decrease in Credit Facility borrowings and the increase in cash and cash equivalents was mostly due to proceeds received from the sale of Control Devices.

Outlook

Stoneridge's portfolio, after the sale of the Control Devices business, is focused on technology solutions primarily for the global commercial vehicle and off-highway end markets. More specifically, Stoneridge serves three primary product categories: vision and safety, connectivity, and vehicle intelligence and electronic controls, each with their own significant growth opportunities. We expect continued expansion of our vision and safety systems, including MirrorEye® and adjacent products and advanced technologies, through maturity of our existing products and the introduction of new products to the market, including our connected trailer and surround-view capabilities. As we continue to invest in these capabilities, we have generated a comprehensive technology roadmap that we expect will both enhance and expand on our existing products and bring new products and technologies to the market. We expect this will drive growth that significantly outpaces our weighted-average end markets resulting in shareholder value creation.

Our financial performance has been affected by increasing costs of materials, labor, and other inputs used to manufacture and sell our products, including higher costs for memory and other semiconductor components. To minimize the impact of these incremental costs, we continue to take mitigation actions, including negotiating price increases and cost recoveries with our customers, improving manufacturing performance and optimizing our global cost structure to both reduce costs and improve operational efficiency. While we expect these actions will benefit financial performance by offsetting cost pressures, there can be no assurance that our mitigation efforts will fully offset the impact of these cost increases.

In February 2026, the U.S. government imposed new tariffs on imported products from China and Mexico, in addition to tariffs imposed during 2025, and in April 2026 announced additional broad-based tariffs on imports from most U.S. trading partners. The Company has manufacturing and supply chain exposure from materials sourced from other countries and products produced in Mexico. If existing or proposed tariffs are sustained or expanded, they could materially increase our cost of goods sold and adversely affect our results of operations and cash flows. We continue to implement mitigation actions to reduce the impact of tariffs, including negotiating cost recoveries and price adjustments with our customers, evaluating alternative sourcing arrangements and assessing opportunities to adjust our manufacturing footprint. However, there can be no assurance that these actions will fully offset the incremental costs, and the ultimate impact will depend on the scope and duration of the tariffs and our ability to pass costs through to customers.

Based on IHS Markit production forecasts, in 2026 the European and North American commercial vehicle end market volumes are forecasted to increase 1.8% and 12.8%, respectively. Over the long-term, we expect our Electronics’ segment sales to continue to outperform forecasted changes in production volumes due to strong demand for our existing products including our OEM MirrorEye programs in North America and Europe as well as from launches of awarded business. In addition, over the long-term we expect revenue growth and margin contribution from our off-highway products. We continue to focus on margin improvement through material cost reduction and product quality initiatives. We continue to invest in the development of advanced system capabilities that are complementary to our driver information solutions and vision systems such as integrated driver assistance technologies and an intelligent connected trailer system.

In July 2026, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.4% in 2026. We expect our served market channels to moderately improve in 2026 based on current market and economic conditions; however our sales of in-region OEM products are expected to increase in the second half of 2026 due to the launch of an infotainment product in the second quarter of 2026. Stoneridge Brazil will focus on continuing to grow our OEM capabilities in-region to better support our global customers. This focus will provide opportunities for future growth and provide a platform to continue to rotate our local portfolio to align with our global business more closely.

In 2026, we expect net D&D spend to increase driven by spend for quality improvement, product cost optimization, and the development of next generation products. We continue to evaluate and optimize our engineering footprint to enhance capabilities and capacity for the most efficient return on our engineering spend including increasing the utilization of our Stoneridge Brazil engineering function and dedicated engineering partners in India to support Electronics segment projects.

While we expect continued supply chain challenges associated with memory and other electronic component pricing and availability in 2026, we continue to focus on operating performance and enterprise-wide cost reduction. We remain focused on improving cash generation and the reduction of debt through efficient operating performance, structural cost savings and targeted actions to reduce our inventory levels. However, we anticipate working capital investment in the second half of 2026 related to the mid-2027 launch of a new off-highway vision product.

Our future effective tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles and our jurisdictional mix of earnings. We monitor these factors and the impact on our effective tax rate.

Other Matters

A significant portion of our sales are outside of the United States. These sales are generated by our non-U.S. based operations, and therefore, movements in foreign currency exchange rates can have a significant effect on our results of operations, which are presented in U.S. dollars. A significant portion of our raw material purchases are denominated in U.S. dollars and, therefore, movements in foreign currency exchange rates can also have a significant effect on our results of operations. In the second quarter of 2026, the U.S. Dollar weakened against the Brazilian real favorably impacting our financial results while it strengthened against the Swedish krona and weakened against the Mexican peso which had an unfavorable impact to our reported results. In the second quarter of 2025, the U.S. dollar weakened against the Swedish krona unfavorably impacting our reported results.

In December 2018, the Company entered into an agreement to make a $10.0 million investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. The Company has contributed $9.3 million to the Autotech Fund II since December 2018.

We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. Because of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $0.0 million and $1.4 million were incurred in the three months ended June 30, 2026 and 2025, respectively. Business realignment costs of $0.4 million and $3.9 million were incurred during the six months ended June 30, 2026 and 2025, respectively. For the three and six months ended June 30, 2025, we incurred $1.4 million and $3.0 million, respectively, in business realignment costs related to operational efficiency initiatives at our Juarez facility. We may incur additional realignment costs in the future.

Because of the competitive nature of the markets we serve, we face pricing pressures from our customers in the ordinary course of business. In response to these pricing pressures, we have been able to manage our production costs through a combination of negotiated cost recoveries with customers, material cost reduction initiatives and optimization of our global manufacturing footprint, the net impact of which to date has not been material to our results of operations. However, these efforts may not be sufficient to fully offset future pricing pressures, particularly in light of current macroeconomic conditions, including tariffs and supply chain disruptions, and if we are unable to effectively manage production costs, our results of operations could be adversely affected.

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Net Sales. Net sales for our reportable segments, excluding inter-segment sales, are summarized in the following table (in thousands):

Our Electronics segment net sales increased $18.2 million because of an increase in our North American commercial vehicle market of $10.0 million including higher MirrorEye system sales and $7.1 million resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices as well as favorable euro and Swedish krona foreign currency translation of $2.6 million. These increases were partially offset by decreases in our China commercial vehicle and North American off-highway markets of $1.0 million and $0.7 million, respectively.

Our Stoneridge Brazil segment net sales increased $5.6 million from higher OEM product sales of $4.4 million including sales from the launch of an infotainment product and favorable foreign currency translation of $1.8 million.

Net sales by geographic location are summarized in the following table (in thousands):

The increase in North American net sales was due to an increase in production volumes in our commercial vehicle market of $10.0 million including higher MirrorEye system sales and an increase in sales of $7.1 million resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices.

The increase in net sales in South America was from higher OEM product sales including sales from the launch of an infotainment product of $4.4 million and favorable foreign currency translation of $1.8 million.

The increase in net sales in Europe and Other was due to higher European off-highway sales of $0.7 million and favorable foreign currency translation of $2.6 million offset by lower commercial vehicle sales of $1.4 million including lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025.

Cost of Goods Sold and Gross Margin. Cost of goods sold increased compared to the second quarter of 2025 and our gross margin decreased to 20.3% in the second quarter of 2026 from 23.1% in the second quarter of 2025. Our material cost as a percentage of net sales increased to 57.7% in the second quarter of 2026 from 56.8% in the second quarter of 2025. The increase in material cost percentage was due to the unfavorable foreign exchange material variances and excess inventory charges as well as adverse sales mix from lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025 in our Electronics segment offset by a benefit from the Mexico Manufacturing Agreement because under this contract manufacturing agreement only direct labor and overhead expenses are recognized. Overhead as a percentage of net sales increased from 16.2% in the second quarter of 2025 to 17.2% in the second quarter of 2026 due to the impact of the Mexico Manufacturing Agreement spend offsetting favorable leverage of fixed costs from higher sales levels.

Our Electronics segment gross margin decreased compared to the prior year second quarter from higher material costs due to unfavorable foreign exchange material variances and excess inventory charges as well as adverse sales mix from lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025 partially offset by favorable leverage of fixed costs from higher sales levels.

Our Stoneridge Brazil segment gross margin increased from the favorable material variances from U.S. dollar denominated material purchases and higher contribution from higher sales levels.

Selling, General and Administrative. SG&A expenses increased by $0.4 million primarily because of higher incentive compensation and legal expenses offset by a favorable Brazilian indirect tax claim settlement.

Design and Development. D&D costs decreased by $2.9 million compared to the second quarter of 2025 because of lower business realignment costs and higher customer reimbursements in our Electronics segment.

Operating Loss. Operating (loss) income by segment is summarized in the following table (in thousands):

Our Electronics segment operating income increased because of reductions in D&D from lower business realignment costs and higher customer reimbursements and in SG&A from lower royalties and professional services. These increases were offset by lower gross margin from higher material costs due to unfavorable foreign exchange material variances and excess inventory charges as well as adverse sales mix from lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025.

Our Stoneridge Brazil segment operating income increased due to favorable variances from U.S. dollar denominated material purchases and higher contribution from higher sales levels. Offsetting these favorable variances was an increase in SG&A expense from higher incentive compensation and selling costs offset by a favorable Brazilian indirect tax claim settlement.

Our unallocated corporate operating loss increased from higher SG&A related to higher incentive compensation and legal fees offset by lower D&D spending.

Operating (loss) income by geographic location is summarized in the following table (in thousands):

Our North American operating loss improved due to higher gross margin from higher sales levels and lower D&D from lower business realignment expense offset by higher SG&A from higher incentive compensation and legal expense. Operating income in South America increased from higher gross margin from favorable variances from U.S. dollar denominated material purchases and favorable leverage of fixed costs from higher sales levels offset by higher SG&A from higher incentive compensation and selling expenses. Our operating results in Europe and Other decreased because of lower margin from higher material costs due to unfavorable foreign exchange material variances offset by lower D&D expense from higher customer reimbursements.

Interest Expense, net. Interest expense, net was $2.4 million and $3.2 million for the three months ended June 30, 2026 and 2025, respectively. The decrease for the quarter ended June 30, 2026, was the result of lower outstanding Credit Facility borrowings offset by higher Credit Facility interest rates.

Equity in Earnings of Investee. Equity earnings for Autotech Fund II was $(0.2) million and $(0.1) million for the three months ended June 30, 2026 and 2025, respectively.

Other (Income) Expense, net. We record certain foreign currency transaction (gains) losses as a component of other (income) expense, net on the condensed consolidated statement of operations. Other income, net of $0.6 million increased by $2.9 million compared to the second quarter of 2025 due to foreign currency transaction gains in our SRB segment from the strengthening of the U.S. dollar and lower foreign currency transactions losses in our Electronics segment.

Provision for Income Taxes. For the three months ended June 30, 2026, income tax expense from continuing operations of $2.6 million was attributable to the mix of earnings among tax jurisdictions, tax credits and incentives, and valuation allowances in certain jurisdictions. The effective tax rate of (93.9)% varies from the statutory tax rate primarily due to tax credits and incentives and valuation allowances in certain jurisdictions.

For the three months ended June 30, 2025, income tax expense from continuing operations of $1.5 million was attributable to the mix of earnings among tax jurisdictions, foreign withholding taxes, and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (16.1%) varies from the statutory tax rate primarily due to foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

Net Sales. Net sales for our reportable segments, excluding inter-segment sales, are summarized in the following table (in thousands):

Our Electronics segment net sales increased $28.3 million because of favorable euro and Swedish krona foreign currency translation of $15.0 million and higher sales of $10.9 million resulting from the Mexico Manufacturing Agreement related to the sale of Control Devices. Additionally, sales increased in our North American commercial vehicle market by $11.1 million from higher production volumes including higher MirrorEye system sales. These increases were offset by lower sales in our European commercial vehicle market of $8.2 million, including lower sales for the Smart 2 tachograph product resulting from the end of a retrofit campaign in 2025 offset by higher MirrorEye system sales, and lower China commercial vehicle sales of $1.6 million

Our Stoneridge Brazil segment net sales increased $7.3 million from higher OEM product sales of $4.8 million including sales from the second quarter launch of an infotainment product and favorable foreign currency translation of $3.4 million.

Net sales by geographic location are summarized in the following table (in thousands):

The increase in North American net sales was due to higher production volumes in our commercial vehicle market of $11.1 million including higher MirrorEye system sales and sales of $10.9 million from the Mexico Manufacturing Agreement related to the sale of Control Devices.

The increase in net sales in South America was from higher OEM product sales of $4.7 million including sales from the second quarter launch of an infotainment product and favorable foreign currency translation of $3.4 million.

The increase in net sales in Europe and Other was due to favorable foreign currency translation of $15.0 million and an increase in off-highway sales of $2.6 million. This increase was offset by lower sales in our European commercial vehicle market of $8.2 million, including lower Smart 2 tachograph product sales from the end of a regulatory retrofit campaign in 2025 offset by higher MirrorEye system sales, and lower sales in our China commercial vehicle market of $1.6 million.

Cost of Goods Sold and Gross Margin. Cost of goods sold increased compared to the six months ended June 30, 2025 and our gross margin decreased to 21.0% in 2026 from 23.4% in the first six months 2025. Our material cost as a percentage of net sales increased from 56.5% in the first six months of 2025 to 58.0% in the first six months of 2026. The increase in material cost percentage was due to unfavorable sales mix in our Electronics segment from unfavorable foreign exchange variances and excess inventory charges as well as adverse sales mix from lower Smart 2 tachograph sales from the end of a regulatory retrofit campaign in 2025 offset by a benefit from the Mexico Manufacturing Agreement because under this contract manufacturing agreement only direct labor and overhead expenses are recognized. Overhead as a percentage of net sales was 16.2% and 16.4% for the first six months of 2026 and 2025, respectively. The decrease in overhead as a percentage of sales was attributable to favorable leverage of fixed costs from higher sales levels and lower business realignment costs in our Electronics segment mostly offset by the impact of the Mexico Manufacturing Agreement spend.

Our Electronics segment gross margin decreased compared to the prior year from higher direct material costs as a percentage of sales from unfavorable sales mix, unfavorable foreign exchange variances and excess inventory charges offset by lower business realignment costs.

Our Stoneridge Brazil segment gross margin increased from the favorable variances from U.S. dollar denominated material purchases and higher contribution from higher sales levels.

Selling, General and Administrative. SG&A expenses increased by $7.0 million primarily because of higher share-based compensation from retirement-related accelerated vesting, incentive compensation and legal expenses offset by lower business realignment costs and royalties.

Design and Development. D&D costs decreased by $5.2 million primarily related to our Electronics segment as a result of higher customer reimbursements, lower business realignment costs and non-capital tooling expenses.

Operating (Loss) Income. Operating (loss) income by segment is summarized in the following table (in thousands):

Our Electronics segment operating income increased because of lower D&D from higher customer reimbursements and lower business realignment costs and lower SG&A from lower royalties offset by lower gross margin.

Our Stoneridge Brazil segment operating income increased due to higher gross margin from favorable variances from U.S. dollar denominated material purchases and higher contribution from higher sales levels offset by higher SG&A from higher incentive compensation and selling expenses.

Our unallocated corporate operating loss increased from higher SG&A related to higher share-based compensation from retirement-related accelerated vesting, incentive compensation and legal fees offset by lower business realignment expenses as well as lower D&D spending.

Operating (loss) income by geographic location is summarized in the following table (in thousands):

Our North American operating loss increased due to higher SG&A from higher share-based compensation from retirement-related accelerated vesting, incentive compensation and legal expenses offset by higher gross margin from higher sales levels including tariff recoveries and lower D&D from lower business realignment costs. Operating income in South America increased from higher gross margin from favorable variances from U.S. dollar denominated material purchases and higher contribution from higher sales levels offset by higher SG&A from higher incentive compensation and selling expenses. Our operating results in Europe and Other decreased because of lower margin from adverse sales mix and unfavorable foreign exchange variances offset by lower D&D expense from higher customer reimbursements and lower SG&A from lower royalties.

Interest Expense, net. Interest expense, net was $6.1 million and $6.5 million for the six months ended June 30, 2026 and 2025, respectively. The decrease was the result of lower outstanding Credit Facility borrowings offset by higher Credit Facility interest rates.

Equity in Loss (Earnings) of Investee. Equity loss (earnings) for Autotech Fund II was $0.0 million and $(0.3) million for the six months ended June 30, 2026 and 2025, respectively.

Other (Income) Expense, net. We record certain foreign currency transaction (gains) losses as a component of other expense (income), net on the condensed consolidated statement of operations. Other income, net of $(0.2) million increased by $1.6 million compared to the first six months of 2025 due to foreign currency transaction gains in our SRB segment from the strengthening of the U.S. dollar and lower foreign currency transactions losses in our Electronics segment.

Provision for Income Taxes. For the six months ended June 30, 2026, income tax expense from continuing operations of $4.0 million was attributable to the mix of earnings among tax jurisdictions, tax credits and incentives, and valuation allowances in certain jurisdictions. The effective tax rate of (24.7%) varies from the statutory tax rate primarily due to tax credits and incentives and valuation allowances in certain jurisdictions.

For the six months ended June 30, 2025, income tax expense of $3.1 million was attributable to the mix of earnings among tax jurisdictions, foreign withholding taxes, and tax credits and incentives offset by U.S. taxes on foreign earnings. The effective tax rate of (19.5)% varies from the statutory tax rate primarily due to foreign withholding taxes and tax credits and incentives offset by U.S. taxes on foreign earnings.

Liquidity and Capital Resources

Summary of Cash Flows:

Cash provided by operating activities decreased compared to 2025 because of a higher net loss and higher working capital levels primarily accounts receivable and to a lesser extent inventory, partially offset by higher accounts payable. Cash used by receivables increased due to the recognition of receivables resulting from manufacturing and transition service agreement transactions related to the sale of Control Devices in the first quarter of 2026, however overall collection terms have remained consistent.

Net cash provided by investing activities increased compared to 2025 due to the proceeds from the sale of Control Devices offset by lower capital expenditures.

Net cash used for financing activities decreased compared to 2025 due to a decrease in Credit Facility repayments.

As outlined in Note 7 to our condensed consolidated financial statements, the Credit Facility permitted borrowing up to a maximum level of $275.0 million. This variable rate facility had an accordion feature which allowed the Company to increase its availability by up to $150.0 million upon the satisfaction of certain conditions and lender consent through its expiration in November 2026. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio. The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends. The Credit Facility had an outstanding balance of $151.1 million at June 30, 2026.

On February 26, 2025, the Company entered into Amendment No. 1 to the Fifth Amended and Restated Credit Agreement and Waiver (“Amendment No. 1”). Amendment No. 1 provided for certain covenant relief and restrictions during the “Covenant Relief Period” (the period ending on the date that the Company delivers a compliance certificate for the quarter ending December 31, 2025). During the Covenant Relief Period:

• the maximum leverage ratio of 3.50 was increased to 6.00 for the quarter ended March 31, 2025, 5.50 for the quarter ended June 30, 2025, 4.50 for the quarter ended September 30, 2025 and 3.50 for the quarter ended December 31, 2025;
• the minimum interest coverage ratio of 3.50 was waived for the quarter ended December 31, 2024 and was reduced to 2.00 for the quarters ended March 31 and June 30, 2025, and 2.50 and 3.50 for the quarter ended September 30, 2025 and December 31, 2025, respectively;
• the Company’s aggregate amount of cash and cash equivalents, defined as 100% of North American and 65% of foreign cash balances, cannot exceed $70.0 million;
• the sale of significant assets (as defined) will require repayment in the amount of any net cash proceeds received and result in the reduction of the Credit Facility commitment, at the lesser of $100.0 million or the net cash proceeds;
• there were certain restrictions on Restricted Payments (as defined); and
• a Permitted Acquisition (as defined) could not be consummated unless otherwise approved in writing by the required lenders.

Amendment No. 1 added an additional level to the leverage ratio based pricing grid, through maturity, when the leverage ratio is greater than 3.50.

On November 5, 2025, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Credit Agreement and Consent Agreement (“Amendment No. 2”). Amendment No. 2 amended the Credit Facility and provided for certain covenant relief and restrictions through the Credit Facility's termination date of November 2, 2026. Amendment No. 2 superseded certain terms of the Credit Facility and Amendment No. 1 beginning November 5, 2025 and ending at the Credit Facility's termination date of November 2, 2026. Amendment No. 2 amended certain Credit Facility terms and provided covenant relief as follows:

• borrowing capacity was reduced from $275.0 million to $225.0 million;
• the sale of the Control Devices business (as defined) is a permitted transaction and upon notice will result in the reduction of the Credit Facility commitment, at the lesser of $50.0 million or the net cash proceeds of this transaction;
• the current minimum interest coverage ratio of 2.5 was extended through the quarter ending March 31, 2026 and increased to 3.5 for the quarter ended June 30, 2026 and thereafter;
  • if the Control Devices business sale is consummated, the minimum interest coverage ratio will increase to 3.5 as of the last day of the first full quarter ending after the sale and thereafter; and
• the maximum leverage ratio of 4.5 for the quarter ended September 30, 2025 and 3.5 for the quarter ended December 31, 2025 and thereafter remained unchanged.

On January 30, 2026, as a result of the sale of the Control Devices business, the Credit Facility borrowing capacity was reduced from $225.0 million to $175.0 million.

On March 6, 2026, the Company entered into Amendment No. 3 to the Fifth Amended and Restated Credit Agreement (“Amendment No. 3”). Amendment No. 3 amends and restates the Credit Facility in its entirety beginning December 31, 2025 and ending at the Credit Facility's amended termination date of July 1, 2027. Amendment No. 3 also provides for certain covenant relief and adjustments to terms and conditions as follows:

• expiration date of the Credit Facility is extended from November 2, 2026 to July 1, 2027;
• the current minimum interest coverage ratio of 2.50 was reduced to 1.60 for the quarter ended March 31, 2026, 1.70 for the quarter ended June 30, 2026, 1.75 for the quarter ended September 30, 2026 and 2.50 for the quarter ended December 31, 2026 and thereafter;
• the maximum leverage ratio was increased to 3.75 for the quarter ended December 31, 2025, increases to 6.25 for the quarter ended March 31, 2026, 6.75 for the quarter ended June 30, 2026, 6.00 for the quarter ended September 30, 2026 and 4.00 for the quarter ended December 31, 2026 and thereafter;
• on December 31, 2026, the current borrowing capacity of $175.0 million will be reduced to the lesser of $157.5 million or the then current Credit Facility commitment;
• modifications to Consolidated EBITDA (as defined); and
• modifications and additions to affirmative covenants.

Our Credit Facility matures on July 1, 2027, which is within twelve months of the issuance of the accompanying unaudited condensed consolidated financial statements, and will become current in the third quarter of 2026. The Company expects to refinance its Credit Facility. While there can be no assurance that the Company will refinance the current Credit Facility, the Company anticipates that the refinancing will occur prior to the issuance of the financial statements for the year ending December 31, 2026. The Company’s ability to continue as a going concern is contingent upon its ability to refinance its Credit Facility.

The Company was in compliance with all covenants at June 30, 2026 and December 31, 2025. The Company has not experienced a violation that would limit the Company’s ability to borrow under the Credit Facility, as amended, and does not expect that the covenants under it will restrict the Company’s financing flexibility. However, it is possible that future borrowing flexibility under the Credit Facility may be limited as a result of lower than expected financial performance due to the adverse impact of significantly lower global demand in our markets and challenging macroeconomic conditions. The Company expects to make additional repayments on the Credit Facility when cash exceeds the amount needed for operations and to remain in compliance with all covenants.

The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20.0 million Swedish krona, or $2.1 million and $2.2 million at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, there were no borrowings outstanding on this overdraft credit line. During the six months ended June 30, 2026, the subsidiary borrowed and repaid 40.4 million Swedish krona, or $4.2 million. The Stockholm subsidiary has pledged certain of its assets as collateral in order to obtain a guarantee of certain of the Stockholm subsidiary’s obligations to third parties.

In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech, a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. As of June 30, 2026, the Company’s cumulative investment in the Autotech Fund II was $9.4 million. The Company contributed less than $0.1 million to Autotech Fund II during each of the six months ended June 30, 2026 and June 30, 2025.

Our future results could also be adversely affected by unfavorable changes in foreign currency exchange rates. We have significant foreign denominated transaction exposure in certain locations, especially in Brazil, Argentina, Mexico, Sweden, Estonia and the Netherlands. Our future results could also be unfavorably affected by increased commodity prices and material cost inflation as these fluctuations impact the cost of our raw material purchases.

At June 30, 2026, we had a cash and cash equivalents balance of approximately $71.5 million, of which 79.1% was held in foreign locations. The Company has approximately $23.9 million of undrawn commitments under the Credit Facility as of June 30, 2026, which results in total undrawn commitments and cash balances of approximately $95.4 million. However, it is possible that future borrowing flexibility under our Credit Facility may be limited as a result of our financial performance.

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on-hand and (iii) borrowings from our Credit Facility. We expect to refinance our Credit Facility prior to it becoming due, and, assuming such refinancing is completed on satisfactory terms, we believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital and other commitments during the next twelve months. While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity, assuming the successful completion of the anticipated refinancing.

Commitments and Contingencies

See Note 11 to the condensed consolidated financial statements for disclosures of the Company’s commitments and contingencies.

Seasonality

Our Electronics segment is moderately seasonal, impacted by mid-year and year-end shutdowns and the ramp-up of new model production at key customers. In addition, the demand for our Stoneridge Brazil segment consumer products is generally higher in the second half of the year.

Critical Accounting Policies and Estimates

The Company’s critical accounting policies, which include management’s best estimates and judgments, are included in Part II, Item 7, to the consolidated financial statements of the Company’s 2025 Form 10-K. These accounting policies are considered critical as disclosed in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis of the Company’s 2025 Form 10-K because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates. There have been no material changes in our significant accounting policies or critical accounting estimates during the second quarter of 2026.

Information regarding other significant accounting policies is included in Note 2 to our consolidated financial statements in Item 8 of Part II of the Company’s 2025 Form 10-K.

International Presence

By operating internationally, we are affected by foreign currency exchange rates and the economic conditions of certain countries. Furthermore, given the current economic climate and fluctuations in certain commodity prices, we believe that an increase in such items could significantly affect our profitability. See Note 6 to the condensed consolidated financial statements for additional details on the Company’s foreign currency exchange rate risks.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously presented within Part II, Item 7A of the Company’s 2025 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2026, an evaluation was performed under the supervision and with the participation of the Company’s management, including the principal executive officer (“PEO”) and principal financial officer (“PFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the PEO and PFO, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the six months ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II–OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in certain legal actions and claims primarily arising in the ordinary course of business. We establish accruals for matters that we believe that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, we do not believe that any of the litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations. We are subject to litigation regarding civil, labor, regulatory and other tax contingencies in our Stoneridge Brazil segment that we believe the likelihood of loss is reasonably possible, but not probable, although these claims might take years to resolve. We are also subject to product liability and product warranty claims. In addition, if any of our products prove to be defective, we may be required to participate in a government-imposed or customer OEM-instituted recall involving such products. There can be no assurance that we will not experience any material losses related to product liability, warranty or recall claims. See additional details of these matters in Note 11 to the condensed consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes with respect to risk factors previously disclosed in the Company’s 2025 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not sell any unregistered equity securities during the quarter ended June 30, 2026.

The following table presents information with respect to repurchases of Common Shares made by us during the three months ended June 30, 2026. There were 180,734 Common Shares delivered to us by employees as payment for withholding taxes due upon vesting of performance share awards and share unit awards. These shares were acquired from employees solely to satisfy tax withholding obligations in connection with the vesting of equity awards. These acquisitions were not made pursuant to any publicly announced repurchase plan or program, and the Company did not have any such repurchase plans or programs in effect during the quarter.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

During the quarter ended June 30, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

In addition, during the quarter ended June 30, 2026, the Company did not adopt or terminate any Rule 10b5-1 trading arrangement, as described in Item 408(b) of Regulation S-K.

Item 6. Exhibits

• Reflects management contract or compensatory plan or arrangement.