What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2026-02-03 · 151 added, 49 removed, 152 unchanged (57% of the section changed)

13 unchanged sentences

RESULTS OF OPERATIONS

The consolidated results of operations for the three months ended December 26, 2025 and December 27, 2024 were as follows:

The consolidated results of operations for the three months ended March 27, 2026 and March 28, 2025 were as follows:

Three months ended

(in thousands) December 26, 2025 December 27, 2024 Change % Change

(in thousands) March 27, 2026 March 28, 2025 Change % Change

Net sales $ 731,377 $ 701,725 $ 29,652 4.2 %

3 unchanged sentences

Intangible asset amortization 6,282 10,166 (3,884) (38.2) %

Operating income 20,071 67,938 (47,867) (70.5) %

Asset impairment charges 11,553 127,733 (116,180) (91.0) %

Operating income (loss) 10,367 (51,822) 62,189 (120.0) %

Interest expense, net 6,985 8,261 (1,276) (15.4) %

Other (income) expense, net (2,327) 1,133 (3,460) (305.4) %

Income before income taxes 15,499 58,596 (43,097) (73.5) %

Income tax expense 465 12,260 (11,795) (96.2) %

Net income $ 15,034 $ 46,336 $ (31,302) (67.6) %

Litigation settlement expense

136,500 — 136,500 100.0 %

Other expense, net 25,612 6,426 19,186 298.6 %

Income (loss) before income taxes (158,730) (66,509) (92,221) 138.7 %

Income tax expense (benefit) (34,657) (16,452) (18,205) 110.7 %

Net income (loss) $ (124,073) $ (50,057) $ (74,016) 147.9 %

Average selling prices 1.5 %

Foreign exchange 1.2 %

Divestitures (1.8) %

Other (1.3) %

Net sales 4.2 %

Net sales decreased by $6.0 million, or 0.9%, to $655.5 million for the three months ended December 26, 2025, compared to $661.6 million for the three months ended December 27, 2024.

The decrease in net sales is primarily attributed to decreased average selling prices across the Company’s products of $18.1 million and the impact of divestitures in fiscal 2025 of $5.2 million, partially offset by increased sales volume of $15.3 million.

Net sales increased by $29.7 million, or 4.2%, to $731.4 million for the three months ended March 27, 2026, compared to $701.7 million for the three months ended March 28, 2025.

The increase in net sales is primarily attributed to increased sales volume of $32.3 million, increased average selling prices of $10.2 million and foreign exchange benefits of $8.2 million partially offset by the impact of divestitures of $12.6 million.

Cost of sales

Average input costs 15.9 %

Solar energy tax credits (1.9) %

Divestitures (2.0) %

Other (0.6) %

Cost of sales 15.2 %

Cost of sales increased by $39.1 million, or 8.0%, to $529.6 million for the three months ended December 26, 2025 compared to $490.5 million for the three months ended December 27, 2024.

The increase was primarily due to increased sales volume of $15.2 million, increased inputs costs of $25.3 million, and increased depreciation of $11.8 million partially offset by lower freight and warehousing costs of $15.1 million and the impact of divestitures in fiscal 2025 of $5.7 million.

The increase in depreciation primarily relates to additional depreciation of $8.2 million related to site closures as described in Note 5, “Restructuring Charges.”

Cost of sales increased by $78.7 million, or 15.2%, to $595.3 million for the three months ended March 27, 2026 compared to $516.6 million for the three months ended March 28, 2025.

The increase was primarily due to increased inputs costs of $82.1 million and increased sales volume of $19.4 million and partially offset by higher solar energy tax credits of $9.9 million the impact of recent divestitures $10.4 million.

Selling, general and administrative

Selling, general and administrative expenses increased by $8.1 million, or 8.9%, to $99.6 million for the three months ended December 26, 2025 compared to $91.5 million for the three months ended December 27, 2024.

The increase was primarily due to increased transaction costs of $6.3 million and restructuring costs of $1.2 million.

Selling, general and administrative expenses increased by $8.9 million, or 9.0%, to $107.9 million for the three months ended March 27, 2026 compared to $99.0 million for the three months ended March 28, 2025.

The increase was primarily due to increased compensation costs, net of productivity initiatives, of $5.1 million, increased restructuring costs of $3.5 million, and increased transaction costs of $3.8 million, partially offset by lower costs of $3.5 million across various other spend categories.

Intangible asset amortization

Intangible asset amortization expense decreased to $6.3 million for the three months ended December 26, 2025 compared to $11.7 million for the three months ended December 27, 2024.

Intangible asset amortization expense decreased to $6.3 million for the three months ended March 27, 2026 compared to $10.2 million for the three months ended March 28, 2025.

The decrease in amortization expense resulted from certain intangibles becoming fully amortized or the amortizable base decreasing as a result of impairment charges recorded in fiscal 2025.

Asset impairment charges

Asset impairment charges decreased to $11.6 million for the three months ended March 27, 2026 compared to $127.7 million for the three months ended March 28, 2025.

The decrease in asset impairment charges resulted primarily from the impairment charges recorded against the HDPE business in fiscal 2025 of $127.7 million compared to the fiscal 2026 impairments of goodwill related to the HDPE business of $6.5 million, as described in Note 4, “Assets Held for Sale”, and impairment charges of $3,774 pertaining to operating lease right-of-use assets, as well as $1,279 associated with

construction-in-progress assets, in connection with the closure of plants, as described in Note 6, “Restructuring Charges”.

Interest expense, net

Interest expense, net decreased by $1.3 million, or 16.0% to $6.9 million for the three months ended December 26, 2025 compared to $8.2 million for the three months ended December 27, 2024.

Interest expense, net decreased by $1.3 million, or 15.4% to $7.0 million for the three months ended March 27, 2026 compared to $8.3 million for the three months ended March 28, 2025.

The decrease is primarily due to decreased interest rates on the Company’s Senior Secured Term Loan Facility.

Other (income) expense, net

The Company recognized $2.3 million of other income for the three months ended December 26, 2025 compared to $1.1 million other expense for the three months ended December 27, 2024.

This change is primarily due to a gain on the sale of Tectron Tube of $2.3 million in the first quarter of fiscal 2026.

Income tax expense

The Company ’ s income tax rate decreased to 3.0% for the three months ended December 26, 2025 compared to 20.9% for the three months ended December 27, 2024.

The decrease in the current period effective tax rate was driven by a one-time discrete tax benefit related to tax planning strategies which resulted in deductible tax attributes.

Litigation settlement expense

Litigation settlement expense increased to $136.5 million for the three months ended March 27, 2026 compared to no related expense for the three months ended March 28, 2025.

The increase in expense is related to the settlement of two classes in the ongoing PVC antitrust litigation described in Note 16, “Commitments and Contingencies”.

Other expense, net

The Company recognized $25.6 million of other expense for the three months ended March 27, 2026 compared to $6.4 million of other expense for the three months ended March 28, 2025.

This change is primarily due to a loss of $25.7 million on HDPE assets and liabilities designated as held for sale in the second quarter of fiscal 2026 compared the loss on sale of business of $6.1 million related to the sale of Northwest Polymers in fiscal 2025.

Income tax expense (benefit)

The Company ’ s income tax rate decreased to 21.8% for the three months ended March 27, 2026 compared to 24.7% for the three months ended March 28, 2025.

The decrease in the current period effective tax rate was driven by the impact of the impairment of the HDPE long-lived assets recorded in Q2 FY25.

SEGMENT RESULTS

7 unchanged sentences

Three months ended

(in thousands) December 26, 2025 December 27, 2024 Change % Change

(in thousands) March 27, 2026 March 28, 2025 Change % Change

Net sales $ 532,457 $ 492,677 $ 39,780 8.1 %

2 unchanged sentences

Average selling prices 1.3 %

Foreign exchange 1.6 %

Other (0.6) %

Net sales 8.1 %

Net sales increased by $4.2 million, or 0.9%, to $469.6 million for the three months ended December 26, 2025 compared to $465.4 million for the three months ended December 27, 2024.

The increase in net sales is primarily attributed to increased sales volume of $23.4 million partially offset by decreased average selling prices of $18.1 million.

Adjusted EBITDA

Adjusted EBITDA for the three months ended December 26, 2025 decreased by $37.3 million, or 40.4%, to $55.1 million from $92.4 million for the three months ended December 27, 2024.

Net sales increased by $39.8 million, or 8.1%, to $532.5 million for the three months ended March 27, 2026 compared to $492.7 million for the three months ended March 28, 2025.

The increase in net sales is primarily attributed to increased sales volume of $28.4 million, foreign exchange benefits of $8.0 million and increased average selling prices of $6.5 million.

Adjusted EBITDA

margin decreased to 11.7% for the three months ended December 26, 2025 compared to 19.9% for the three months ended December 27, 2024 .

The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to lower average selling prices and higher input costs.

Adjusted EBITDA for the three months ended March 27, 2026 decreased by $16.6 million, or 18.2%, to $74.4 million from $90.9 million for the three months ended March 28, 2025.

Adjusted EBITDA margin decreased to 14.0% for the three months ended March 27, 2026 compared to 18.5% for the three months ended March 28, 2025 .

The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to increases in input costs outpacing increases in average selling prices.

Safety & Infrastructure

Three months ended

(in thousands) December 26, 2025 December 27, 2024 Change % Change

(in thousands) March 27, 2026 March 28, 2025 Change % Change

Net sales $ 199,100 $ 209,272 $ (10,172) (4.9) %

1 unchanged sentence

Adjusted EBITDA margin 8.7 % 17.2 %

Volume (4.1) %

Average selling prices 1.8 %

Solar energy tax credits (4.1) %

Acquisitions (1.0) %

Divestitures (4.5) %

Net sales (4.9) %

Net sales decreased by $10.2 million, or 4.9%, for the three months ended March 27, 2026 to $199.1 million compared to $209.3 million for the three months ended March 28, 2025.

The decrease is primarily attributed to the impact of recent divestitures of $9.5 million and higher solar credit rebates of

$8.5 million, partially offset by increased sales volume of $3.9 million and an increase in average selling price of $3.7 million.

Adjusted EBITDA

Adjusted EBITDA decreased by $18.8 million, or 52.0%, to $17.3 million for the three months ended March 27, 2026 compared to $36.1 million for the three months ended March 28, 2025.

Adjusted EBITDA margin decreased to 8.7% for the three months ended March 27, 2026 compared to 17.2% for the three months ended March 28, 2025.

The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to higher input costs.

The consolidated results of operations for the six months ended March 27, 2026 and March 28, 2025 were as follows:

Six months ended

(in thousands) March 27, 2026 March 28, 2025 Change % Change

Net sales $ 1,386,925 $ 1,363,322 $ 23,603 1.7 %

Cost of sales 1,124,876 1,007,117 117,759 11.7 %

Gross profit 262,049 356,205 (94,156) (26.4) %

Selling, general and administrative 207,465 190,492 16,973 8.9 %

Intangible asset amortization 12,593 21,864 (9,271) (42.4) %

Asset impairment charges 11,553 127,733 (116,180) (91.0) %

Operating income (loss) 30,438 16,116 14,322 88.9 %

Interest expense, net 13,884 16,470 (2,586) (15.7) %

Litigation settlement expense 136,500 — 136,500 100.0 %

Other expense, net 23,285 7,559 15,726 208.0 %

Income (loss) before income taxes (143,231) (7,913) (135,318) 1,710.1 %

Income tax expense (benefit) (34,192) (4,193) (29,999) 715.5 %

Net income $ (109,039) $ (3,720) $ (105,319) 2,831.2 %

Average selling prices (0.6) %

Solar energy tax credits (0.6) %

Divestitures (1.3) %

Net sales 1.7 %

Net sales increased by $23.6 million, or 1.7%, to $1,386.9 million for the six months ended March 27, 2026, compared to $1,363.3 million for the six months ended March 28, 2025.

The increase in net sales is primarily attributed to increased sales volume of $47.6 million, partially offset by the impact of divestitures of $17.7 million, the impact of solar credits rebates of $8.7 million and lower average selling prices of $7.9 million.

Cost of sales

Average input costs 10.7 %

Solar energy tax credits generated (0.9) %

Divestitures (1.6) %

Cost of sales 11.7 %

Cost of sale s increased by $117.8 million, or 11.7%, to $1,124.9 million for the six months ended March 27, 2026 compared to $1,007.1 million for the six months ended March 28, 2025.

The increase in cost of sales was primarily due to higher input costs of $107.9 million and higher sales volume of $35.2 million, partially offset by higher solar energy tax credits of $9.3 million and the impact of recent divestitures of $16.1 million.

Selling, general and administrative

Selling, general and administrative expenses increased by $17.0 million, or 8.9%, to $207.5 million for the six months ended March 27, 2026, compared to $190.5 million for the six months ended March 28, 2025.

The increase was primarily due to increased transaction costs of $10.0 million, increased restructuring costs of $4.7 million, increased spending on IT initiatives of $3.0 million, increased commissions of $1.4 million, increased costs of $0.6 million spread across a variety of other spend categories, partially offset by lower compensation expenses, net of productivity initiatives, of $2.7 million.

Intangible asset amortization

Intangible asset amortization expense decreased to $12.6 million for the six months ended March 27, 2026, compared to $21.9 million for the six months ended March 28, 2025.

The decrease in amortization expense resulted from certain intangibles becoming fully amortized or the amortizable base decreasing as a result of impairment charges recorded in fiscal 2025.

Asset impairment charges

Asset impairment charges decreased to $11.6 million for the six months ended March 27, 2026 compared to $127.7 million for the six months ended March 28, 2025.

Interest expense, net

Interest expense, net, decreased by $2.6 million, or 15.7%, to $13.9 million for the six months ended March 27, 2026, compared to $16.5 million for the six months ended March 28, 2025.

The decrease is primarily due to decreased interest rates on the Company’s Senior Secured Term Loan Facility.

Litigation settlement expense

Litigation settlement expense increased to $136.5 million for the six months ended March 27, 2026 compared to no related expense for the six months ended March 28, 2025.

The increase in expense is related to the settlement of two classes in the ongoing PVC antitrust litigation described in Note 16, “Commitments and Contingencies”.

Other expense, net

Other expense, net, increased to $23.3 million of expense for the six months ended March 27, 2026, compared to $7.6 million of expense for the six months ended March 28, 2025.

This is primarily due to a loss on assets held for sale of $25.7 million related to the HDPE business and a gain on the sale of Tectron Tube of $2.3 million in fiscal 2026 compared to a loss on the sale of Northwest Polymers of $6.1 million in fiscal 2025.

Income tax expense (benefit)

The Company ’ s income tax rate decreased to 23.9% for the six months ended March 27, 2026, compared to 53.0% for the six months ended March 28, 2025.

The decrease in the current period effective tax rate was driven by the impact of the impairment of the HDPE long-lived assets and divestiture of Northwest Polymers LLC in the second quarter of fiscal 2025.

SEGMENT RESULTS

Six months ended

(in thousands) March 27, 2026 March 28, 2025 Change % Change

Net sales $ 1,002,011 $ 958,032 $ 43,979 4.6 %

Adjusted EBITDA $ 129,453 $ 183,330 $ (53,877) (29.4) %

Adjusted EBITDA margin 12.9 % 19.1 %

Average selling prices (1.2) %

Foreign exchange 1.1 %

Divestitures (0.7) %

Net sales 4.6 %

Net sales increased by $44.0 million, or 4.6%, to $1,002.0 million for the six months ended March 27, 2026, compared to $958.0 million for the six months ended March 28, 2025.

The increase in net sales is primarily attributed to increased sales volume of $51.8 million and the impact of foreign exchange of $10.1 million, partially offset by decreased average selling prices of $11.6 million and the impact of divestitures of $6.3 million .

Adjusted EBITDA

Adjusted EBITDA for the six months ended March 27, 2026 decreased by $53.9 million, or 29.4%, to $129.5 million from $183.3 million for the six months ended March 28, 2025.

Adjusted EBITDA margin decreased to 12.9% for the six months ended March 27, 2026, compared to 19.1% for the six months ended March 28, 2025 .

The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to the increase in input costs as well as the decrease in average selling prices.

Safety & Infrastructure

Six months ended

(in thousands) March 27, 2026 March 28, 2025 Change % Change

Net sales $ 385,352 $ 405,997 $ (20,645) (5.1) %

Adjusted EBITDA $ 47,490 $ 51,643 $ (4,153) (8.0) %

Adjusted EBITDA margin 12.3 % 12.7 %

Volume (1.0) %

Average selling prices 0.9 %

Solar energy tax credits to be transferred (2.1) %

Divestitures (2.8) %

Other (0.1) %

Net sales (5.1) %

Net sales decreased by $10.5 million, or 5.3%, for the three months ended December 26, 2025 to $186.3 million compared to $196.7 million for the three months ended December 27, 2024.

The decrease is primarily attributed to lower sales volume of $8.1 million.

Net sales decreased by $20.6 million, or 5.1%, to $385.4 million for the six months ended March 27, 2026, compared to $406.0 million for the six months ended March 28, 2025.

The decrease is primarily due to the impact of divestitures of $11.4 million, the higher economic value of solar energy tax credits to be transferred to certain customers of $8.7 million and the decrease in volume of $4.2 million, partially offset by increased average selling prices of $3.7 million.

Adjusted EBITDA

Adjusted EBITDA increased by $14.6 million, or 93.8%, to $30.2 million for the three months ended December 26, 2025 compared to $15.6 million for the three months ended December 27, 2024.

Adjusted EBITDA margin increased to 16.2% for the three months ended December 26, 2025 compared to 7.9% for the three months ended December 27, 2024.

The increase in Adjusted EBITDA and Adjusted EBITDA margin was largely due to increases associated with improved operational performance and cost control in our mechanical and construction business.

Adjusted EBITDA decreased $4.2 million, or 8.0%, to $47.5 million for the six months ended March 27, 2026, compared to $51.6 million for the six months ended March 28, 2025.

Adjusted EBITDA margin decreased to 12.3% for the six months ended March 27, 2026, compared to 12.7% for the six months ended March 28, 2025.

The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to increases in input costs outpacing increases in average selling prices.

LIQUIDITY AND CAPITAL RESOURCES

We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders.

Our cash and cash equivalents were $443.8 million as of December 26, 2025, of which $98.2 million was held at non-U.S.

Our cash and cash equivalents were $442.3 million as of March 27, 2026, of which $117.3 million was held at non-U.S.

subsidiaries.

2 unchanged sentences

We have access to the ABL Credit Facility to fund operational needs.

As of December 26, 2025, there were no outstanding borrowings under the ABL Credit Facility and no letters of credit issued under the ABL Credit Facility.

The borrowing base was estimated to be $325.0 million and approximately $325.0 million was available under the ABL Credit Facility as of December 26, 2025.

As of March 27, 2026, there were no outstanding borrowings under the ABL Credit Facility and no letters of credit issued under the ABL Credit Facility.

The borrowing base was estimated to be $325.0 million and approximately $325.0 million was available under the ABL Credit Facility as of March 27, 2026.

Outstanding letters of credit count as utilization of the commitments under the ABL Credit Facility and reduce the amount available for borrowings.

19 unchanged sentences

The table below summarizes cash flow information derived from our statements of cash flows for the periods indicated:

Three months ended

(in thousands) December 26, 2025 December 27, 2024

Six months ended

(in thousands) March 27, 2026 March 28, 2025

Cash flows provided by (used in):

3 unchanged sentences

Operating activities

During the three months ended December 26, 2025, the Company used $55.5 million cash flow in operating activities compared to $74.4 million provided during the three months ended December 27, 2024 .

The $129.9 million decrease in cash provided was primarily due to decreased operating income of $47.9 million, partially offset by less working capital used of $100.3 million and the impact of taxes of $1.9 million.

During the six months ended March 27, 2026, the Company used $27.2 million cash flow in operating activities compared to generating $160.9 million during the six months ended March 28, 2025 .

The $188.1 million decrease in cash provided was primarily due to changes in working capital and taxes payable.

Net loss increased $105.3 million but was offset by an increase in transaction and impairment related non-cash charges of $37.3 million and an increase in other noncash adjustments, such as depreciation and deferred taxes, of $66.7 million.

Changes in working capital represented $115.9 million

of cash outflows primarily from the change in accounts receivable due to the timing of when our fiscal second quarter ended.

The remaining cash outflows were related to changes in income taxes payable $70.9 million.

Investing activities

During the three months ended December 26, 2025, the Company used $6.6 million in investing activities compared to $41.1 million during the three months ended December 27, 2024.

The $47.8 million decrease in cash used in investing activities was primarily due to a decrease of $29.5 million in capital expenditures and proceeds from the sale of Tectron Tube of $18.4 million.

During the six months ended March 27, 2026, the Company used $8.1 million in investing activities compared to $48.0 million during the six months ended March 28, 2025.

The $39.9 million decrease in cash used in investing activities was primarily due to a decrease of $37.4 million in capital expenditures and an increase in proceeds from the sale of a business of $11.7 million, partially offset by less proceeds from the sale of equipment of $7.4 million.

Financing Activities

During the three months ended December 26, 2025, the Company was provided $15.3 million in financing activities compared to $67.7 million used during the three months ended December 27, 2024.

The decrease in cash used in financing activities is primarily due to $50.0 million less cash used to repurchase common stock during the three months ended December 26, 2025.

During the six months ended March 27, 2026, the Company used $28.5 million in financing activities compared to $129.2 million used during the six months ended March 28, 2025.

The decrease in cash used in financing activities is primarily due to $100.0 million less cash used to repurchase common stock during the six months ended March 27, 2026.

CHANGES IN CRITICAL ACCOUNTING POLICIES AND ESTIMATES

15 unchanged sentences

In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.

A number of important factors, including, without limitation, the risks and uncertainties disclosed in the Company’s filings with the SEC, including but not limited to the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements.

A number of important factors, including, without limitation, the risks and uncertainties disclosed in the Company’s

filings with the SEC, including but not limited to the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements.

Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:

42 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis