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Disposal of Non-Core Products
9 Months Ended
Sep. 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 were 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.

On April 1, 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 within SG&A.

The Company received $675 and $1,350 for services provided pursuant to the transition services agreement which were recognized as a reduction in SG&A for the three and nine months ended September 30, 2019, respectively. Pursuant to the contract manufacturing agreement, the Company recognized sales and operating income for the production of Non-core Products of $10,770 and $1,072 for the three months ended September 30, 2019, respectively, and $19,824 and $1,072 for the nine months ended September 30, 2019, respectively.  The Company also received $170 for reimbursement of retention costs from SMP pursuant to the contract manufacturing agreement which was recognized as a reduction to SG&A for both the three and nine months ended September 30, 2019.

Non-core Product net sales and operating income, including sales to SMP pursuant to the contract manufacturing agreement were $10,770 and $1,072 for the three months ended September 30, 2019, respectively, and $11,071 and $2,334, for the three months ended September 30, 2018, respectively. Non-core Products net sales and operating income, including sales to SMP pursuant to the contract manufacturing agreement were $35,080 and $4,445 for the nine months ended September 30, 2019, respectively, and $34,200 and $7,059 for the nine months ended September 30, 2018, respectively.