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Disposal of Non-Core Products
6 Months Ended
Jun. 30, 2019
Disposal of Non-Core Products [Abstract]  
Disposal of Non-Core Products

(16) Disposal of Non-Core Products

On April 1, 2019, the Company entered into an Asset Purchase Agreement (the “APA”) by and among the Company, the Company’s wholly owned subsidiary, Stoneridge Control Devices, Inc. (“SCD”), and Standard Motor Products, Inc. (“SMP”). On the same day pursuant to the APA, in exchange for $40,000 (subject to a post-closing inventory adjustment) and the assumption of certain liabilities, the Company and SCD sold to SMP, product lines and assets related to certain non-core switches and connectors (the “Non-core Products”). On April 1, 2019, the Company and SMP also entered into certain ancillary agreements, including a transition services agreement, a contract manufacturing agreement and a supply agreement, pursuant to which the Company will provide and be compensated for certain manufacturing, transitional, and administrative and support services to SMP on a short-term basis. The products related to the Non-core Products are currently manufactured in Juarez, Mexico and Canton, Massachusetts, and include ball switches, ignition switches, rotary switches, courtesy lamps, toggle switches, headlamp switches and other related components.

During the three months ended June 30, 2019 the Company’s Control Devices segment recognized net sales and costs of goods sold of $4,160 and $2,775, respectively, for the one-time sale of Non-core Product finished goods inventory and a gain on disposal of $33,921 for the sale of fixed assets, intellectual property and customer lists associated with the Non-core Products less transaction costs. During the three months ended March 31, 2019, the Company recognized transaction costs associated with the disposal of Control Devices’ Non-core Products of $322.

During the three months ended June 30, 2019, the Company received $675 for services provided pursuant to the transition services agreement which was recognized as a reduction in SG&A. The Company produced and sold Non-core finished goods inventory at cost to SMP of $9,054 pursuant to the contract manufacturing agreement which was recognized as both net sales and cost of goods sold.

Non-core Products net sales, including sales of $9,054 to SMP pursuant to the contract manufacturing agreement, and operating income was $13,214 and $3,373, for the three months ended June 30, 2019, respectively, and $11,249 and $2,317, for the three months ended June 30, 2018, respectively. Non-core Products net sales and operating income was $24,310 and $3,373, for the six months ended June 30, 2019, respectively, and $23,129 and $4,725, for the six months ended June 30, 2018, respectively.