Aebi Schmidt Holding AG 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements The following discussion and analysis of the financial condition and results of operations of Aebi Schmidt should be read together with Aebi Schmidt’s unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Unless the context requires otherwise, references to “Aebi Schmidt” in this section of the Quarterly Report refer to Aebi Schmidt and its consolidated subsidiaries. The information presented herein is based on management’s perspective of Aebi Schmidt’s results of operations. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of Aebi Schmidt’s control. Aebi Schmidt’s actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the section following the cover page to this Quarterly Report entitled " Forward-Looking Statements ", and Part II, Item 1A of this Quarterly Report ( Risk Factors ), as well as the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in the Registration Statement. Overview Aebi Schmidt is a global leader in intelligent and innovative solutions for clean and safe infrastructure with a strong presence in over 90 countries in North America, Europe, and the rest of the world. Aebi Schmidt provides a wide range of technical products designed for effective maintenance of public and private infrastructure, including solutions for Snow and Ice Clearing, Airport Runway Clearing, Street Sweeping and Marking, Commercial Trucks and Trailers, and Agriculture. In addition, Aebi Schmidt manufactures and assembles specialty vehicles for commercial and recreational applications, including walk-in vans, truck bodies for last-mile delivery, vocation-specific upfit solutions, and luxury motorhome chassis, as well as offering related services such as repair, maintenance, and refurbishment. Aebi Schmidt remains committed to innovation and technology, integrating advanced features into its products to enhance performance and maintain a competitive market position. Based on its strategy and strong customer orientation, the Company is prepared to continue its growth path in the foreseeable future. Aebi Schmidt operates in two reportable segments, which consist of (i) North America, and (ii) Europe including the rest of the world (collectively referred to as “Europe and the Rest of the World”). Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results we may achieve for the full year ending December 31, 2025. North America Aebi Schmidt’s North America Segment, now including Shyft, offers leading brands in Commercial Trucks and Trailers, Snow and Ice Clearing, and Airport Snow and Ice Clearing, Fleet and Specialty Vehicle markets. Aebi Schmidt operates as a key player in providing innovative solutions for snow removal, street cleaning, and other essential services that enhance infrastructure and public safety. Europe and the Rest of the World Aebi Schmidt maintains a strong presence in Europe and the Rest of the World through its Street Sweeping and Marking and Environmental Maintenance, Airport Snow and Ice Clearing, and Agriculture products. Aebi Schmidt has long-lasting relationships with airports and municipalities across Europe and with international customers. Recent Developments Business Combination with Shyft On July 1, 2025 (“Acquisition Date”), Aebi Schmidt (“Acquirer”) acquired 100% of the outstanding equity interests of Shyft (“Acquiree”), a niche market leader in specialty vehicle manufacturing and assembly for the commercial and recreational vehicle industries, through a merger (the “Merger”). The Merger involved 100% of the voting equity interests of Shyft, with the primary reasons for the combination being to enhance the Company's product offerings in specialty vehicle solutions, develop the Company’s market share in North America, as well as to leverage Shyft's innovative design and manufacturing capabilities. Page 30 of 71 Index The Merger was accounted for as a business combination in accordance with U.S. GAAP, with Aebi Schmidt treated as the legal and accounting acquirer and Shyft as the legal and accounting acquiree for financial reporting purposes. As a result of the Shyft acquisition, Aebi Schmidt expects to benefit from continued operational efficiency and cash flow generation from the Combined Company’s full suite of offerings, scaled platform, and expanded portfolio. The acquisition will facilitate Aebi Schmidt’s growth plans, including strengthening its financial profile and delivering significant value for its shareholders by unlocking synergies between Shyft and Aebi Schmidt. Refer to Note 14 - Business Combination for further information regarding the Merger. Key Performance Indicators Aebi Schmidt reviews the following key performance indicators on a regular basis in order to evaluate the financial and operating performance of its business, identify trends affecting its performance, prepare financial projections, and make strategic decisions. Aebi Schmidt’s key performance indicators are not based on any standardized industry methodology and are not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, Aebi Schmidt’s key metrics may differ from estimates published by third parties or from similarly titled metrics of its competitors due to differences in methodology. The numbers that Aebi Schmidt uses to calculate its key performance indicators are based on internal data. While these numbers are based on what Aebi Schmidt believes to be reasonable judgments and estimates for the applicable period of measurement, there are inherent challenges in measuring usage and engagement. Increases or decreases in Aebi Schmidt’s key performance indicators may not correspond with increases or decreases in its revenue. Aebi Schmidt regularly reviews and may adjust its processes for calculating its internal metrics to improve their accuracy. In addition to the key performance indicators summarized below, Aebi Schmidt also evaluates certain non-GAAP financial measures (i.e. Adjusted EBITDA and Adjusted EBITDA margin), which are further summarized in the Non-GAAP Financial Measures section below. The following table presents a summary of Aebi Schmidt’s key performance indicators for the nine months ended September 30, 2025 , and September 30, 2024 . Nine Months Ended September 30, (in thousands, except percentages) 2025 2024 Sales $ 998,254 $ 787,731 Net income 934 21,256 Net income margin 0.09 % 2.70 % Adjusted EBITDA (1) 84,767 73,606 Adjusted EBITDA margin (1) 8.49 % 9.34 % Net cash used in operating activities (24,552) 14,821 (1) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See the section titled “Non-GAAP Financial Measures” below for the definitions of these measures and the reconciliations to the most directly comparable U.S. GAAP financial measure. Results of Operations Three months ended September 30, 2025 compared with three months ended September 30, 2024 Page 31 of 71 Index Results for Aebi Schmidt for the three months ended September 30, 2025 , compared to results for the three months ended September 30, 2024 . For the Three Months Ended September 30, (in thousands, except percentages) 2025 2024 $ Change % Change Sales $ 471,325 $ 262,451 $ 208,874 80 % Cost of products sold (377,212) (207,574) (169,638) 82 % Gross profit 94,113 54,877 39,236 71 % Operating expenses: Research and development (8,735) (4,647) (4,088) 88 % Selling, general and administrative (59,296) (30,125) (29,171) 97 % Amortization of purchased intangibles (7,975) (3,516) (4,459) 127 % Other operating (income) expense (610) (257) (353) 137 % Total operating expenses (76,616) (38,545) (38,071) 99 % Operating income 17,497 16,332 1,165 7 % Other income (expense): Interest expense (14,227) (8,733) (5,494) 63 % Other income (expense) (2,523) (1,728) (795) n.m. Total other income (expense) (16,750) (10,461) (6,289) 60 % Income from continuing operations before income taxes 747 5,871 (5,124) (87) % Income tax (expense) benefit 447 (1,549) 1,996 (129) % Net income 1,194 4,322 (3,128) (72) % Less: Net income attributable to non-controlling interest (12) 19 (31) n.m. Net income attributable to Aebi Schmidt Holding AG $ 1,206 $ 4,303 $ (3,097) (72) % n.m. – not meaningful Sales Sales increased by $208.9 million, or 80%, to $471.3 million in the three months ended September 30, 2025 , from $262.5 million in the three months ended September 30, 2024 . The increase in sales was primarily driven by sales attributed to Shyft of $186.4 million, an increase in new business sales of $17.7 million, and an increase in after sales of $4.7 million. Cost of products sold Cost of products sold increased by $169.6 million, or 82%, to $377.2 million in the three months ended September 30, 2025 , from $207.6 million in the three months ended September 30, 2024 . The increase in cost of products sold was driven by $152.2 million in costs attributable to Shyft, an increase of $15.9 million in costs related to new business sales, and an increase of $2.0 million in costs related to after sales. This was partially offset by a decrease of $0.3 million due to lower overhead costs incurred compared to the prior period. Research and development expense Research and development expense increased by $4.1 million, or 88%, to $8.7 million in the three months ended September 30, 2025 , from $4.6 million in the three months ended September 30, 2024 driven by an increase of $3.1 million in activity attributable to Shyft and development of new product solutions by Aebi. Selling, general and administrative expense Selling, general and administrative expense increased by $29.2 million, or 97%, to $59.3 million in the three months ended September 30, 2025 , from $30.1 million in the three months ended September 30, 2024 . The increase in selling, general and administrative expense was primarily driven by an increase of $32.8 million in costs attributable to Shyft and an increase in other general administrative costs of $5.2 million due to additional costs incurred as a public company. This Page 32 of 71 Index increase was partially offset by a decrease in finance department costs of $1.0 million, a decrease in management costs of $0.6 million, and a decrease in IT costs of $0.8 million. Amortization of purchased intangibles Amortization of purchased intangibles increased by $4.5 million, or 127%, to $8.0 million in the three months ended September 30, 2025 , from $3.5 million in the three months ended September 30, 2024 . The increase is primarily attributable to amortization of $4.4 million related to the intangible assets acquired as part of the Merger with Shyft. Other operating (income) expense Other operating expense increased by $0.3 million, or 137%, to $0.6 million in the three months ended September 30, 2025 , from other operating expense of $0.3 million in the three months ended September 30, 2024 . The increase in other operating expense was primarily driven by an increase of net foreign exchange losses of $0.1 million and an increase in other income net other expense of $0.2 million. Interest expense Interest expense increased by $5.5 million, or 63%, to $14.2 million in the three months ended September 30, 2025 , from $8.7 million in the three months ended September 30, 2024 . The increase in interest expense was primarily driven by the incurrence of $1.8 million in costs related to the refinancing, an increase in interest of $3.0 million and $0.9 million in interest expense attributable to Shyft. Other income (expense) Other expense increased by $0.8 million to $2.5 million in the three months ended September 30, 2025 , from other expense of $1.7 million in the three months ended September 30, 2024 . The increase in other expense was driven by an increase in transaction related expense of $2.2 million partially offset by decreases in net foreign exchange losses on financial positions of $1.3 million. Income tax (expense) benefit Income tax benefit increased by $1.9 million, or 129%, to $0.4 million in the three months ended September 30, 2025 , from income tax expense of $1.5 million in the three months ended September 30, 2024 . The increase in income tax benefit was primarily driven by a $0.8 million benefit attributable to Shyft and a decrease in current income taxes of $1.2 million due to lower taxable income in the three months ended September 30, 2025. Nine months ended September 30, 2025 compared with nine months ended September 30, 2024 Page 33 of 71 Index Results for Aebi Schmidt for the nine months ended September 30, 2025 , compared to results for the nine months ended September 30, 2024 . For the Nine Months Ended September 30, (in thousands, except percentages) 2025 2024 $ Change % Change Sales $ 998,254 $ 787,731 $ 210,523 27 % Cost of products sold (794,003) (616,948) (177,055) 29 % Gross profit 204,251 170,783 33,468 20 % Operating expenses: Research and development (18,794) (15,000) (3,794) 25 % Selling, general and administrative (123,594) (88,643) (34,951) 39 % Amortization of purchased intangibles (15,123) (10,548) (4,575) 43 % Other operating (income) expense (990) (811) (179) 22 % Total operating expenses (158,501) (115,002) (43,499) 38 % Operating income 45,750 55,781 (10,031) (18) % Other income (expense): Interest expense (30,033) (26,310) (3,723) 14 % Other income (expense) (15,333) 436 (15,769) n.m. Total other income (expense) (45,366) (25,874) (19,492) 75 % Income from continuing operations before income taxes 384 29,907 (29,523) (99) % Income tax (expense) benefit 550 (8,651) 9,201 (106) % Net income 934 21,256 (20,322) (96) % Less: Net income attributable to non-controlling interest (37) 42 (79) n.m. Net income attributable to Aebi Schmidt Holding AG $ 971 $ 21,214 $ (20,243) (95) % n.m. – not meaningful Sales Sales increased by $210.5 million, or 27%, to $998.3 million in the nine months ended September 30, 2025 , from $787.7 million in the nine months ended September 30, 2024 . The increase in sales was primarily driven by $186.4 million in sales attributable to Shyft, an increase in after sales of $9.2 million, and an increase in new business sales of $14.9 million. Cost of products sold Cost of products sold increased by $177.1 million, or 29%, to $794.0 million in the nine months ended September 30, 2025 , from $616.9 million in the six months ended June 30, 2024. The increase in cost of products sold was driven by $152.2 million in costs of products sold attributable to Shyft, an increase of $17.2 million in costs related to new business sales, and an increase of $6.7 million in costs related to after sales. This was partially offset by a decrease of $2.3 million due to lower overhead costs during the nine months ended September 30, 2025 . Research and development expense Research and development expense increased by $3.8 million, or 25%, to $18.8 million in the nine months ended September 30, 2025 , from $15.0 million in the nine months ended September 30, 2024 . The increase in research and development expense was primarily driven by $3.2 million in costs attributable to Shyft. Selling, general and administrative expense Selling, general and administrative expense increased by $35.0 million, or 39%, to $123.6 million in the nine months ended September 30, 2025 , from $88.6 million in the nine months ended September 30, 2024 . The increase in selling, general and administrative expense was driven by $32.8 million in costs attributable to Shyft, along with an increase in finance department expenses of $3.1 million and an increase in management expenses of $1.7 million due to additional Page 34 of 71 Index costs incurred as a public company. This increase was partially offset by a decrease in other general and administrative costs of $3.8 million. Amortization of purchased intangibles Amortization of purchased intangibles increased by $4.6 million, or 43%, to $15.1 million in the nine months ended September 30, 2025 , from $10.5 million in the nine months ended September 30, 2024 . The increase is primarily attributable to amortization of $4.4 million related to intangible assets acquired as part of the Merger with Shyft. Other operating (income) expense Other operating expense increased by $0.2 million, or 22%, to $1.0 million in the nine months ended September 30, 2025 , from other operating expense of $0.8 million in the nine months ended September 30, 2024 . The increase in other operating expense was driven by an increase of $0.4 million of other operating expense and partially offset by an increase of $0.2 million in other operating income. Interest expense Interest expense increased by $3.7 million, or 14%, to $30.0 million in the nine months ended September 30, 2025 , from $26.3 million in the nine months ended September 30, 2024 . The increase in interest expense was primarily driven by costs paid for refinancing of $4.7 million, partially offset by a decrease in interest of $1.8 million. Other income (expense) Other expense increased by $15.8 million to $15.3 million in the nine months ended September 30, 2025 , from other income of $0.4 million in the nine months ended September 30, 2024 . The increase in other expense was driven primarily by an increase in other expense, net of other income, of $12.0 million, which included $10.5 million related to acquisition-related legal and other professional fees incurred as part of our acquisition of Shyft and an increase in net foreign exchange losses on financial positions of $4.4 million. This was partially offset by a decrease in other pension income, net of expense, of $0.5 million. Income tax (expense) benefit Income tax expense decreased by $9.2 million, or 106%, to a benefit of $0.5 million in the nine months ended September 30, 2025 , from an expense of $8.7 million in the nine months ended September 30, 2024 . The decrease in income tax expense was primarily driven by a decrease in current income taxes of $10.0 million due to lower taxable income and a $0.8 million tax benefit attributable to Shyft. The increase was partially offset by a lower deferred tax benefit of $2.2 million. Segment Results of Operations Aebi Schmidt operates its business as two reportable segments: (i) North America and (ii) Europe including the Rest of the World. Both segments operate separately with limited cross-selling activities. The information below includes Sales and Adjusted EBITDA by reportable segment, consistent with information presented for financial reporting purposes in Note 11 to Aebi Schmidt’s unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Three Months Ended September 30, 2025 compared with three months ended September 30, 2024 For the Three Months Ended September 30, 2025 (in thousands) North America Europe and the Rest of the World Total Segment sales $ 335,965 $ 135,360 $ 471,325 Segment Adjusted EBITDA $ 34,319 $ 7,878 $ 42,197 Page 35 of 71 Index For the Three Months Ended September 30, 2024 North America Europe and the Rest of the World Total Segment sales $ 144,370 $ 118,081 $ 262,451 Segment Adjusted EBITDA $ 12,411 $ 9,129 $ 21,540 North America Sales for Aebi Schmidt’s North America segment increased by $191.6 million, or 133%, to $336.0 million in the three months ended September 30, 2025 , from $144.4 million in the three months ended September 30, 2024 . The increase in sales was primarily driven by higher sales of new products of $167.3 million and increase in after sales of $24.3 million, with $186.4 million of the total increase in sales attributable to Shyft. Adjusted EBITDA for Aebi Schmidt’s North America segment increased by $21.9 million, or 177%, to $34.3 million for the three months ended September 30, 2025 , from $12.4 million for the three months ended September 30, 2024 . The increase in Adjusted EBITDA was primarily driven by the addition of $18.8 million in activity attributable to Shyft, along with an increase in segment gross margin of $1.0 million and a decrease in selling, general and administrative expenses, and an increase in income from for other segment items of $1.0 million. Europe and the Rest of the World Sales for Aebi Schmidt’s Europe and the Rest of the World segment increased by $17.3 million, or 15%, to $135.4 million in the three months ended September 30, 2025 , from $118.1 million in the three months ended September 30, 2024 . The increase in sales was driven by an increase in sales of new products of $13.5 million and an increase in after sales of $3.8 million. Adjusted EBITDA for Aebi Schmidt’s Europe and the Rest of the World segment decreased by $1.3 million, or 14%, to $7.9 million in the three months ended September 30, 2025 , from $9.1 million in the three months ended September 30, 2024 . The decrease in Adjusted EBITDA was driven by an increase in expenses related to other segment items of $6.8 million and increase in research and development expense of $0.9 million, partially offset by an increase in segment gross margin of $4.1 million and a decrease in selling, general and administrative expenses of $2.4 million. Nine months ended September 30, 2025 compared with nine months ended September 30, 2024 For the Nine Months Ended September 30, 2025 (in thousands) North America Europe and the Rest of the World Total Segment sales $ 629,500 $ 368,754 $ 998,254 Segment Adjusted EBITDA $ 69,379 $ 15,388 $ 84,767 For the Nine Months Ended September 30, 2024 North America Europe and the Rest of the World Total Segment sales $ 441,888 $ 345,843 $ 787,731 Segment Adjusted EBITDA $ 48,721 $ 24,885 $ 73,606 North America Sales for Aebi Schmidt’s North America segment increased by $187.6 million, or 43%, to $629.5 million in the nine months ended September 30, 2025 , from $441.9 million in the nine months ended September 30, 2024 . The increase in sales was primarily driven by an increase in sales of new products of $162.0 million and an increase in after sales of $25.6 million, with $186.4 million of the total increase in sales attributable to Shyft. Adjusted EBITDA for Aebi Schmidt’s North America segment decreased by $20.6 million, or 42%, to $69.4 million for the nine months ended September 30, 2025 , from $48.7 million for the nine months ended September 30, 2024 . The increase in Adjusted EBITDA was primarily driven by the addition of $18.8 million in activity attributable to Shyft, along Page 36 of 71 Index with an increase of $2.0 million in gross margin and increase in income from other segment items of $2.0 million, partially offset by increases in selling, general and administrative expenses of $2.5 million. Europe and the Rest of the World Sales for Aebi Schmidt’s Europe and the Rest of the World segment increased by $22.9 million, or 7%, to $368.8 million in the nine months ended September 30, 2025 , from $345.8 million in the nine months ended September 30, 2024 . The increase in sales was driven by an increase in sales of new products of $16.0 million and an increase in after sales of $6.9 million. Adjusted EBITDA for Aebi Schmidt’s Europe and the Rest of the World segment decreased by $9.5 million, or 38%, to $15.4 million in the nine months ended September 30, 2025 , from $24.9 million in the nine months ended September 30, 2024 . The decrease in Adjusted EBITDA was driven by a decrease in gross margin of $2.8 million and an increase in expenses related to other segment items of $6.1 million. Non-GAAP Financial Measures Aebi Schmidt utilizes non-GAAP financial measures, Adjusted EBITDA and Adjusted EBITDA margin, to complement its U.S. GAAP reporting and to assist stakeholders in evaluating and comparing its financial and operational performance over multiple periods, identifying trends affecting its business, formulating business plans, and making strategic decisions. There can be no assurance that Aebi Schmidt will not modify the presentation of its non-GAAP financial measures in the future, and any such modification may be material. Aebi Schmidt defines Adjusted EBITDA as net income before interest, taxes, depreciation, and amortization, further adjusted for foreign exchange gains and losses on external debt, restructuring and other related expenses, transaction related expenses, bargain purchase gains on acquisitions, changes in repurchase liabilities for Aebi Schmidt’s employee share plan, non-service cost related pension expenses, legacy legal matters, sales executive transition costs, changes in provisions for contingencies, and other non-recurring items. Aebi Schmidt defines Adjusted EBITDA margin as a ratio of Adjusted EBITDA as a percentage of sales. Management uses Adjusted EBITDA to assess Aebi Schmidt’s financial performance because it allows management and stakeholders to compare its operating performance on a consistent basis across periods by removing the effects of its capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization) and other items (such as non-recurring costs) that impact the comparability of financial results from period to period. In evaluating Adjusted EBITDA, you should be aware that in the future Aebi Schmidt may incur expenses that are the same as or similar to some of the adjustments in such presentation. Aebi Schmidt’s presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA and Adjusted EBITDA margin have important limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of Aebi Schmidt’s operating results as reported under U.S. GAAP. Adjusted EBITDA and Adjusted EBITDA margin may be defined differently by other companies in its industry and may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. Page 37 of 71 Index For the Nine Months Ended September 30, (in thousands, except percentages) 2025 2024 Net income $ 934 $ 21,256 Adjusted for: Income tax (benefit) expense (550) 8,651 Interest expense 30,033 26,310 Foreign exchange (gain) / losses on external debt 3,332 (1,058) Depreciation and amortization 28,041 19,390 Restructuring and other related expenses 15,190 — Transaction related expenses 14,583 — Settlement of acquisition 1,317 — Change in repurchase liability for employee share plan (6,377) — Pension related income, net (2,979) (1,930) Legal matters 586 518 Sales executive transition — 234 Change in provision for contingencies (920) 146 Non-cash stock-based compensation expense 825 — Other non-operating one-off items 752 89 Adjusted EBITDA $ 84,767 $ 73,606 Sales $ 998,254 $ 787,731 Net Income Margin 0.09 % 2.70 % Adjusted EBITDA Margin 8.49 % 9.34 % Liquidity and Capital Resources Aebi Schmidt’s primary liquidity needs are to fund general business requirements, including working capital, capital expenditures, restructuring costs and debt service requirements. Aebi Schmidt’s principal sources of liquidity are cash flows from operating activities, the Revolving Credit Facility and other debt issuances, and existing cash balances of $126.0 million as of September 30, 2025 . Aebi Schmidt actively manages its working capital and associated cash requirements and continually seeks more effective uses of cash. As of September 30, 2025 , Aebi Schmidt had $482.4 million of net working capital (i.e., current assets minus current liabilities) compared to $250.9 million of net working capital as of December 31, 2024 . Aebi Schmidt believes that its available liquidity will be sufficient to meet its current obligations for a period of at least 12 months from the date of the filing of this Quarterly Report, and its liquidity will be sufficient to finance its operating and capital needs, including day to day operations, capital expenditures, research and development, investments in information technology systems, dividends and potential future acquisitions. Page 38 of 71 Index Cash Flows Aebi Schmidt’s cash flows from operating, investing and financing activities, as reflected in the Aebi Schmidt Consolidated Statements of Cash Flows are summarized in the following table: For the Nine Months Ended September 30, (in thousands) 2025 2024 $ Change % Change Net cash provided by (used in) operating activities (24,552) 14,821 $ (39,373) (266 %) Net cash provided by (used in) investing activities 9,938 (9,242) 19,180 -208 % Net cash provided by financing activities 77,722 3,719 74,003 n.m. Effect of exchange rate changes on cash and cash equivalents (2,310) (87) (2,223) n.m. Net increase in cash and cash equivalents 60,798 9,211 51,587 560 % Cash and cash equivalents at beginning of the period 65,173 42,698 22,475 53 % Cash and cash equivalents at end of the period $ 125,971 $ 51,909 $ 74,062 143 % Net cash used in operating activities Net cash used in operating activities increased by $39.4 million, or 266%, to $24.6 million in the nine months ended September 30, 2025 , from cash provided by operating activities of $14.8 million in the nine months ended September 30, 2024 . The increase in net cash used in operating activities was primarily driven by a decrease in net income of $20.3 million, an increase in collection of accounts receivable and contract assets of $43.0 million, an increase of $15.1 million in inventory levels, and an increase of other current liabilities and accrued expenses of $39.6 million. These increases were primarily offset by an increase in accounts payable of $46.7 million due to increased costs of production and purchases of raw materials, an increase in accrued compensation and related taxes of $17.1 million, and an increase in depreciation and amortization expense of $8.7 million. Net cash used in investing activities Net cash provided by investing activities increased by $19.2 million, or 208%, to $9.9 million in the nine months ended September 30, 2025 , from cash used in investing activities of $9.2 million in the nine months ended September 30, 2024 . The increase was primarily driven by net cash of $19.9 million acquired in the acquisition of Shyft, partially offset by an increase in cash spent on purchases of property, plant and equipment of $1.2 million. Net cash provided by financing activities Net cash provided by financing activities increased by $74.0 million to $77.7 million in the nine months ended September 30, 2025 , from $3.7 million in the nine months ended September 30, 2024 . The increase was driven by an increase of proceeds, net of payments, of $82.4 million from long-term debt and a decrease in deferred payments made related to historical transactions of $2.3 million. The increase was partially offset by an increase in dividend payments of $8.4 million and the exercise and vesting of stock incentive awards of $2.0 million. Page 39 of 71 Index Debt In thousands September 30, 2025 December 31, 2024 Revolving credit facility, due 2030 $ 345,495 $ — Term loan, Facility A, due 2030 234,829 — Revolving credit facility, due 2026 — 152,787 Term loan: Facility A, due 2026 — 20,778 Facility B, due 2026 — 40,000 Facility C, due 2026 — 119,715 Shareholder loan 58,897 51,982 Other debt 14,201 14,591 Total debt 653,422 399,853 Less current portion of long-term debt (25,063) (23,259) Total long-term debt $ 628,359 $ 376,594 Refinancing Transaction On March 10, 2025, the Company entered into a syndicated $600.0 million credit facilities agreement (“New Credit Facilities Agreement”) comprising: • Term loan, Facility A, due 2030 • Revolving credit facility, due 2030 (Revolving Facility) which became effective with the closing of the Merger. The New Credit Facilities Agreement became effective with the closing of the Merger. As of July 1, 2025, the proceeds obtained ($572.1 million) were utilized to fully repay the outstanding amounts of: • Term Loan, Facility A, B and C, due 2026 ($187.0 million) • Revolving Credit Facility, due 2026 ($185.6 million) • Bilateral Credit Lines ($21.1 million) • Revolving Credit Facility of Shyft ($120.0 million) Following a creditor-by-creditor assessment, the Company determined that the New Credit Facilities Agreement constitutes a modification for continuing creditors and an extinguishment for leaving creditors, in accordance with ASC 470-50. Term loan, Facility A, due 2030 Facility A is a multicurrency senior secured amortizing term loan facility with a total commitment amount of $350.0 million. The interest rate is variable defined based on the applicable reference rate (SOFR, SARON, EURIBOR), plus a margin determined by the Company’s leverage ratio. The average interest rate for the three months ended September 30, 2025 was 6.719% . The New Credit Facilities Agreement requires the Company to maintain certain financial ratios (covenants); prohibits it from incurring additional indebtedness; limits certain acquisitions, investments, advances or loans; and restricts substantial asset sales, all subject to certain exceptions and baskets. The Company is subject to financial covenants under the credit agreement and was in compliance with all covenants as of September 30, 2025. Revolving Credit Facility, due 2030 The Revolving Facility is a multicurrency senior secured revolving loan facility with a total commitment amount of up to $250.0 million. The interest rate is variable and based on the applicable a reference rate (SOFR, SARON, EURIBOR), plus a margin determined by the Company’s leverage ratio. The average interest rate for the three months ended September 30, 2025 was 6.574%. Page 40 of 71 Index The New Credit Facilities Agreement requires the Company to maintain certain financial ratios (covenants); prohibits it from incurring additional indebtedness; limits certain acquisitions, investments, advances or loans; and restricts substantial asset sales, all subject to certain exceptions and baskets. The Company was in compliance with all covenants as of September 30, 2025. Term Loan In November 2021, the Company entered a syndicated loan agreement with various banks for financing acquisitions. The term loan was split into the following facilities: • Total Facility A Commitments: A senior amortizing term loan facility with a total commitment of $52.8 million. • Total Facility B Commitments: A senior amortizing term loan facility with a total commitment of $60.0 million . • Total Facility C Commitments: A senior non-amortizing term loan facility with a total commitment of $90.0 million and $33.6 million . The interest rate was variable defined based on EURIBOR (EUR) compounded with SOFR (USD) plus a given interest margin. On July 1, 2025, the Company has repaid the outstanding amount of $187.0 million with the proceeds obtained under the Term loan, Facility A, due 2030, and each of Facility A, Facility B and Facility C were terminated. Revolving Credit Facility, due 2026 Commitment The aggregate of the Revolving Credit Facility Commitment of EUR165.0 million ( $193.7 million) was primarily used for refinancing existing debt obligations, excluding those related to Facility A. In addition, the Revolving Credit Facility supported the broader financial needs of Aebi Schmidt, including general corporate purposes and working capital requirements, as well as funding permissible acquisitions aligned with Aebi Schmidt’s strategic objectives. On July 1, 2025, the Company repaid the outstanding amount of $185.6 million with the proceeds obtained under the Revolving Facility, and the Revolving Credit Facility was terminated. Shareholder loans As of September 30, 2025 , and December 31, 2024 , there were subordinated shareholder loans totaling CHF13.6 million ( 2025 : $17.0 million, 2024 : $15.0 million) and EUR15.0 million ( 2025 : $17.6 million , 2024: $15.6 million) from PCS Holding AG, as well as CHF10.0 million ( 2025 : $12.5 million, 2024 : $11.0 million) and EUR10.0 million ( 2025 : $11.7 million, 2024 : $10.4 million) from Gebuka AG. The loans are originally granted for a fixed term, but the term will be extended if the loan agreement is not terminated 90 days prior to the end date or if an extension agreement is signed. The change in the loan balance as of September 30, 2025 and December 31, 2024 , is solely due to foreign exchange rate fluctuations. These shareholder loans were renewed and amended in connection with the New Credit Facilities Agreement and survived the Closing. Page 41 of 71 Index Contingent Liabilities Changes in Aebi Schmidt’s warranty liability during the periods ended September 30, 2025 , and 2024 were as follows: Nine Months Ended September 30, (in thousands) 2025 2024 Balance of warranty liability, beginning of period $ 10,206 $ 8,022 Accruals for current period sales 4,371 3,265 Cash settlements (2,739) (1,466) Changes in liability for pre-existing warranties 38 (37) Acquisition 6,782 — Translation adjustment 980 66 Balance of warranty liability, end of period $ 19,638 $ 9,850 Aebi Schmidt’s long-term warranty provisions amounting to $2.1 million and $0.9 million for the periods ended September 30, 2025 and 2024 , respectively, are included within other non-current liabilities on its Condensed Consolidated Balance Sheet. Contractual and Other Obligations Aebi Schmidt is party to contractual and other material obligations (including any material cash obligations) involving commitments to make payments to third parties, and such commitments require a material amount of cash. As part of its normal course of business, Aebi Schmidt enters into contracts with suppliers for purchases of certain raw materials, components, and services to facilitate adequate supply of these materials and services. These arrangements may contain fixed or minimum quantity purchase requirements. Refer to Note 7 – Commitments and Contingent Liabilities to Aebi Schmidt’s unaudited condensed consolidated financial statements for details on its cash obligations. Off-Balance Sheet Arrangements The contingent liabilities include guarantees (“performance bonds”) amounting to $16.2 million and $13.2 million as of September 30, 2025 and December 31, 2024 , respectively. Through the normal course of bidding for and executing certain projects, Aebi Schmidt has entered into bid/performance bonds and surety bonds (collectively “performance bonds”) with various financial institutions. Customers can draw on such performance bonds if Aebi Schmidt does not fulfil its contractual obligations. If a performance bond is drawn, Aebi Schmidt would have an obligation to reimburse the financial institution for amounts paid. There have been no significant amounts reimbursed to financial institutions under these types of arrangements for the nine months ended September 30, 2025 and 2024 . Critical Accounting Policies and Estimates There have been no changes to our critical accounting policies during the nine months ended September 30, 2025 . Refer to the Registration Statement for a summary of our policies. Quantitative and Qualitative Disclosures About Market Risk Aebi Schmidt is exposed to market risks in the ordinary course of business, which primarily relate to fluctuations in foreign currency exchange and commodity prices. Since December 31, 2024 , there have been no material changes in our foreign currency exposures, commodity prices, or interest rates. For a discussion of our exposure to market risk, refer to “Quantitative and Qualitative Disclosures about Market Risk” in the Registration Statement.