What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-05-07 · 122 added, 116 removed, 615 unchanged (28% of the section changed)

8 unchanged sentences

Financing receivables, net of allowances of $ 53 and $ 34

Refundable income taxes

Other current assets

34 unchanged sentences

Three months ended

Six Months Ended

Nine Months Ended

Cost of sales:

9 unchanged sentences

Interest income

Other income (expense), net

Other income, net

Total other income, net

(Loss) income before income taxes

Loss before income taxes

Income tax benefit

10 unchanged sentences

Three months ended

Six Months Ended

Nine Months Ended

Net income (loss)

Other comprehensive (loss) income:

Foreign currency translation (loss) gain adjustments, net of tax effect

Other comprehensive (loss) income

Total comprehensive income

Other comprehensive income (loss):

Foreign currency translation gain (loss) adjustments, net of tax effect

Other comprehensive income (loss)

Total comprehensive income (loss)

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the three months ended March 31, 2026 and 2025

For the three months ended June 30, 2026 and 2025

(Amounts in thousands, except per share data)

1 unchanged sentence

Shareholders’

Three months ended March 31, 2026

Balance as of December 31, 2025

Three months ended June 30, 2026:

Balance as of March 31, 2026

Other comprehensive loss

Stock-based compensation

Restricted stock cancellation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Repurchase of common stock

Cash dividends paid on common stock ($ 0.03 per share)

Balance as of March 31, 2026

Balance as of June 30, 2026

comprehensive

Shareholders’

Three months ended March 31, 2025

Balance as of December 31, 2024

Three months ended June 30, 2025:

Balance as of March 31, 2025

Other comprehensive income

Stock-based compensation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

1 unchanged sentence

Cash dividends paid on common stock ($ 0.03 per share)

Balance as of March 31, 2025

Balance as of June 30, 2025

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the six months ended March 31, 2026 and 2025

For the nine months ended June 30, 2026 and 2025

(Amounts in thousands, except per share data)

1 unchanged sentence

Shareholders’

Six months ended March 31, 2026:

Nine months ended June 30, 2026:

Balance as of September 30, 2025

6 unchanged sentences

Cash dividends paid on common stock ($ 0.09 per share)

Balance as of March 31, 2026

Balance as of June 30, 2026

comprehensive

Shareholders’

Six months ended March 31, 2025:

Nine months ended June 30, 2025:

Balance as of September 30, 2024

Other comprehensive loss

Other comprehensive gain

Stock-based compensation

Restricted stock cancellation

Restricted stock issuance

2 unchanged sentences

Cash dividends paid on common stock ($ 0.09 per share)

Balance as of March 31, 2025

Balance as of June 30, 2025

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Six Months Ended

Nine Months Ended

Operating activities

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Amortization of intangibles

Loss on disposal of fixed assets, net

Foreign exchange gain

Foreign exchange gain (loss)

Provision for credit losses - financing receivables

Provision (benefit) for credit losses - accounts receivable

Provision for credit losses - accounts receivable

Provision for obsolete inventory

20 unchanged sentences

Dividends paid

Net repayment under line-of-credit agreement

Net proceeds (repayments) under line-of-credit agreement

Repurchases of common stock

Proceeds from issuance of shares under equity compensation plans

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effects of exchange rate on cash, net

3 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Nine Months Ended

Supplementary cash flow information:

18 unchanged sentences

Accordingly, the Company believes that although the disclosures are adequate to make the information presented not misleading, the unaudited condensed consolidated financial statements should be read in conjunction with the notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

The significant accounting policies and estimates used in preparing these Condensed Consolidated Financial Statements were applied on a basis consistent with those reflected in the September 30, 2025 Consolidated Financial Statements.

Significant Accounting Policies

There have been no significant changes to the Company's significant accounting policies described in PART II, Item 8, Note 1 Basis of Presentation and Summary of Significant Accounting Policies , of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

Accounting Pronouncement Not Yet Adopted as of March 31, 2026

Accounting Pronouncement Not Yet Adopted as of June 30, 2026

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

9 unchanged sentences

This ASU expands existing income tax disclosures primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The ASU is effective for all public entities for annual periods beginning after December 15, 2024, with early adoption permitted.

Entities should apply the amendments on a

prospective basis, but retrospective application is permitted.

The ASU is effective for all public entities for annual

periods beginning after December 15, 2024, with early adoption permitted.

Entities should apply the amendments on a prospective basis, but retrospective application is permitted.

The Company plans to adopt this ASU on a prospective basis in the fourth quarter of fiscal year 2026.

3 unchanged sentences

Technology Solutions Segment

Three months ended March 31,

Three months ended June 30,

(Amounts in thousands)

18 unchanged sentences

Technology Solutions Segment

Six months ended March 31,

Nine months ended June 30,

(Amounts in thousands)

20 unchanged sentences

See Note 5 Financing Receivables, net for more details.

Revenue from these agreements in the three months ended March 31, 2026 was $ 417 thousand in which the Company acted as the agent.

Revenue from these agreements in the three months ended March 31, 2025 was $ 142 thousand in which the Company acted as the agent.

Revenue from these agreements in the six months ended March 31, 2026 was $ 1,072 thousand in which the Company acted as the agent.

Revenue from these agreements in the six months ended March 31, 2025 was $ 165 thousand in which the Company acted as the agent.

Revenue from these agreements in the three months ended June 30, 2026 was $ 165 thousand in which the Company acted as the agent.

Revenue from these agreements in the three months ended June 30, 2025 was $ 336 thousand in which the Company acted as the agent.

Revenue from these agreements in the nine months ended June 30, 2026 was $ 1,237 thousand in which the Company acted as the agent.

Revenue from these agreements in the nine months ended June 30, 2025 was $ 358 thousand in which the Company acted as the agent.

Contract Assets and Liabilities

1 unchanged sentence

When we have the right to bill a customer, accounts receivable is recorded as an unconditional right exists.

Current contract assets were $ 0.7 million and $ 0.8 million as of March 31, 2026 and September 30, 2025, respectively.

Current contract assets were $ 0.7 million and $ 0.8 million as of June 30, 2026 and September 30, 2025, respectively.

Current contract assets were $ 1.7 million as of September 30, 2024.

The current portion is recorded in Other current assets on the condensed consolidated balance sheets.

There were no noncurrent contract assets as of March 31, 2026 and September 30, 2025.

There were no noncurrent contract assets as of June 30, 2026 and September 30, 2025.

There were no noncurrent contract assets as of September 30, 2024.

1 unchanged sentence

Contract liabilities arise when payment is received before we transfer a good or service to the customer.

Current contract liabilities were $ 1.7 million and $ 1.5 million as of March 31, 2026 and September 30, 2025, respectively.

Current contract liabilities were $ 2.5 million and $ 1.5 million as of June 30, 2026 and September 30, 2025, respectively.

Current contract liabilities were $ 2.2 million as of September 30, 2024.

The current portion of contract liabilities is recorded in Deferred revenue and contract liabilities on the condensed consolidated balance sheets.

There were $ 42 thousand and $ 37 thousand of long-term contract liabilities as of March 31, 2026 and September 30, 2025, respectively.

There were $ 36 thousand and $ 37 thousand of long-term contract liabilities as of June 30, 2026 and September 30, 2025, respectively.

There were no long-term contract liabilities as of September 30, 2024.

Long-term contract liabilities are in Other noncurrent liabilities on the condensed consolidated balance sheets.

Revenue recognized for the six months ended March 31, 2026 that was included in contract liabilities as of September 30, 2025 was $ 0.9 million.

Revenue recognized for the nine months ended June 30, 2026 that was included in contract liabilities as of September 30, 2025 was $ 1.2 million.

Contract Costs

5 unchanged sentences

In fiscal year 2026 the TS segment paid commissions on a monthly basis for contracts over one year.

Current capitalized contract costs are within the Other current assets on the condensed consolidated balance sheets as of March 31, 2026 and September 30, 2025.

The portion of current capitalized costs were $ 25 thousand and $ 33 thousand as of March 31, 2026 and September 30, 2025, respectively.

Current capitalized contract costs are within the Other current assets on the condensed consolidated balance sheets as of June 30, 2026 and September 30, 2025.

The portion of current capitalized costs were $ 26 thousand and $ 33 thousand as of June 30, 2026 and September 30, 2025, respectively.

There are no noncurrent capitalized costs on the condensed consolidated balance sheets.

The amount of incremental costs amortized for the three months ended March 31, 2026 and 2025 were $ 14 thousand and $ 50 thousand, respectively.

The amount of incremental costs amortized for the six months ended March 31, 2026 and 2025 were $ 24 thousand and $ 154 thousand, respectively and is recorded in selling, general, and administrative expenses.

There was no impairment related to incremental costs capitalized during the six months ended March 31, 2026 and 2025.

The amount of incremental costs amortized for the three months ended June 30, 2026 and 2025 were $ 12 thousand and $ 22 thousand, respectively.

The amount of incremental costs amortized for the nine months ended June 30, 2026 and 2025 were $ 37 thousand and $ 176 thousand, respectively and is recorded in selling, general, and administrative expenses.

There was no impairment related to incremental costs capitalized during the nine months ended June 30, 2026 and 2025.

Projects are typically billed upon completion or at certain milestones.

10 unchanged sentences

Managed service contracts are generally longer than one year and revenue is recognized ratably over the contract term.

For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2026 is set forth in the table below:

For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2026 is set forth in the table below:

(Amounts in thousands)

9 unchanged sentences

Three months ended

Six Months Ended

Nine months ended

(Amounts in thousands except per share data)

10 unchanged sentences

Anti-dilutive securities include restricted stock awards, which are excluded from the diluted income per share computation.

Non-vested restricted stock awards of 141 thousand shares and 269 thousand shares were excluded from net income (loss) per common share - diluted for the three months ended March 31, 2026 and 2025 because their inclusion would have been anti-dilutive.

Non-vested restricted stock awards of 114 thousand shares were excluded from net income per share - diluted for the six months ended March 31, 2026 because their inclusion would have been anti-dilutive.

Non-vested restricted stock awards of 139 thousand shares and 82 thousand shares were excluded from net income (loss) per common share - diluted for the three months ended June 30, 2026 and 2025 because their inclusion would have been anti-dilutive.

Non-vested restricted stock awards of 122 thousand shares were excluded from net income per share - diluted for the nine months ended June 30, 2026 because their inclusion would have been anti-dilutive.

Accounts receivable, net

7 unchanged sentences

Three months ended

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

(Amounts in thousands)

1 unchanged sentence

Balances at beginning of the period

Provision (benefit) for credit losses

Provision for credit losses

Balances at end of the period

Six months ended

March 31, 2026

March 31, 2025

Nine months ended

June 30, 2026

June 30, 2025

(Amounts in thousands)

1 unchanged sentence

Balances at beginning of the period

Provision (benefit) for credit losses

Provision for credit losses

Balances at end of the period

18 unchanged sentences

Financing receivables, net, carry an average weighted interest rate of 8.6 %, which reflects the approximate interest rate consistent with a separate financing transaction with the customer at the inception of the agreement.

The amount of interest income earned from sales whose payment terms exceed one year for the three months ended March 31, 2026 and 2025 was $ 320 thousand and $ 113 thousand, respectively.

The amount of interest income earned from sales whose payment terms exceed one year for the six months ended March 31, 2026 and 2025 was $ 662 thousand and $ 254 thousand, respectively.

Interest income from these agreements is recorded in Other (expense) income, net on the Condensed Consolidated Statements of Operations.

The amount of interest income earned from sales whose payment terms exceed one year for the three months ended June 30, 2026 and 2025 was $ 340 thousand and $ 152 thousand, respectively.

The amount of interest income earned from sales whose payment terms exceed one year for the nine months ended June 30, 2026 and 2025 was $ 1.0 million and $ 406 thousand, respectively.

Interest income from these agreements is recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.

The following table presents the components of the Company’s Financing receivables, net segregated by portfolio (risk rating) for the periods indicated:

As of March 31, 2026

As of June 30, 2026

As of September 30, 2025

7 unchanged sentences

Three months ended

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

(Amounts in thousands)

4 unchanged sentences

Balances at end of the period

Six months ended

March 31, 2026

March 31, 2025

Nine months ended

June 30, 2026

June 30, 2025

(Amounts in thousands)

12 unchanged sentences

Recording interest income resumes once no reasonable doubt exists regarding collecting all interest and principal.

There were no financing receivables placed on non-accrual status as of March 31, 2026 or September 30, 2025.

The following table presents Financing receivables, gross, including accrued interest and excluding any allowance, by credit quality indicator segregated by risk rating and year of origination as of March 31, 2026:

March 31, 2026

There were no financing receivables placed on non-accrual status as of June 30, 2026 or September 30, 2025.

June 30, 2026

Fiscal year of origination

13 unchanged sentences

Information related to both lessee and lessor

The components of lease costs for the three months ended March 31, 2026 and 2025 are as follows:

The components of lease costs for the three months ended June 30, 2026 and 2025 are as follows:

Three months ended

Consolidated Statements of Operations Location

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

(Amounts in thousands)

7 unchanged sentences

Total lease costs, net of lessor interest income

The components of lease costs for the six months ended March 31, 2026 and 2025 are as follows:

Six months ended

The components of lease costs for the nine months ended June 30, 2026 and 2025 are as follows:

Nine months ended

Consolidated Statements of Operations Location

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

(Amounts in thousands)

7 unchanged sentences

Total lease costs, net of lessor interest income

Supplemental cash flow information related to leases for the six months ended March 31, 2026 and 2025 is below:

Six months ended

March 31, 2026

March 31, 2025

Supplemental cash flow information related to leases for the nine months ended June 30, 2026 and 2025 is below:

Nine months ended

June 30, 2026

June 30, 2025

(Amounts in thousands)

10 unchanged sentences

principal and interest.

The average imputed interest rate for the agreements was determined to be 8.6 % as of March 31, 2026.

The average imputed interest rate for the agreements was determined to be 8.5 % as of June 30, 2026.

The rate was determined primarily based on the rate the Company could obtain by financing from other sources at the date of the transaction.

Interest expense related to these agreements for the three months ended March 31, 2026 and 2025 was $ 164 thousand and $ 75 thousand, respectively.

Interest expense related to these agreements for the six months ended March 31, 2026 and 2025 was $ 289 thousand and $ 150 thousand, respectively.

Interest expense related to these agreements for the three months ended June 30, 2026 and 2025 was $ 178 thousand and $ 101 thousand, respectively.

Interest expense related to these agreements for the nine months ended June 30, 2026 and 2025 was $ 466 thousand and $ 251 thousand, respectively.

These amounts are within “Interest expense” within the Condensed Consolidated Statements of Operations.

2 unchanged sentences

Below are details of the agreements with the vendors that contain imputed interest:

March 31, 2026

June 30, 2026

September 30, 2025

5 unchanged sentences

Line of Credit

As of March 31, 2026 and September 30, 2025, the Company maintained an inventory line of credit with a borrowing capacity of $ 15.0 million.

As of June 30, 2026 and September 30, 2025, the Company maintained an inventory line of credit with a borrowing capacity of $ 15.0 million.

It may be used by the TS and HPP segments in the U.S.

to purchase inventory from approved vendors with payment terms which exceed those offered by the vendors.

No interest accrues under the inventory line of credit when advances are paid within terms, however, late payments are subject to an interest charge of the rate published in the Wall Street Journal as the “ prime rate ” plus 1 %, which was 7.75 % as of March 31, 2026.

The line of credit automatically renews for one year periods unless terminated by the Company with at least 60 days’ notice or immediate termination by the lender.

2 unchanged sentences

(1) a minimum current ratio of 1.2 , (2) tangible net worth of no less than $ 4.0 million, and (3) a maximum ratio of total liabilities to total net worth of less than 5 :1.

As of March 31, 2026 and September 30, 2025, Company borrowings, all from the TS segment, under the inventory line of credit were $ 0.9 million and $ 0.9 million, respectively, and the Company was in compliance with all financial covenants.

As of March 31, 2026 and September 30, 2025, this line of credit also included availability of a limited cash withdrawal of up to $ 1.0 million.

As of March 31, 2026 and September 30, 2025 there were no cash withdrawals outstanding.

As of June 30, 2026 and September 30, 2025, Company borrowings, all from the TS segment, under the inventory line of credit were $ 2.4 million and $ 0.9 million, respectively, and the Company was in compliance with all financial covenants.

As of June 30, 2026 and September 30, 2025, this line of credit also included availability of a limited cash withdrawal of up to $ 1.0 million.

As of June 30, 2026 and September 30, 2025 there were no cash withdrawals outstanding.

Pension and Retirement Plans

17 unchanged sentences

The components of net periodic benefit costs related to the US and UK plans are as follows:

Three Months Ended March 31,

Three Months Ended June 30,

(Amounts in thousands)

8 unchanged sentences

Net periodic benefit

Six Months Ended March 31,

Nine Months Ended June 30,

(Amounts in thousands)

10 unchanged sentences

Fair Values as of

March 31, 2026

June 30, 2026

September 30, 2025

6 unchanged sentences

Total plan assets

*This fair value is based on the latest information available, which is as of September 30, 2025 not March 31, 2026 as the table is labeled.

*This fair value is based on the latest information available, which is as of September 30, 2025 not June 30, 2026 as the table is labeled.

The difference from September 30, 2025 is due to the Great British Pounds being converted into U.S.

dollars at a different exchange rate.

The Company recorded an income tax benefit of $ 568 thousand and $ 683 thousand for the three months ended March 31, 2026 and 2025, respectively.

An income tax benefit of $ 288 thousand and $ 798 thousand was recorded for the six months ended March 31, 2026 and 2025, respectively.

For all of these periods, the difference between our effective income tax rate and the U.S.

federal statutory rate was the impact of tax credits that we expect to be able to utilize against federal and state taxes, the change in valuation allowance maintained against certain state tax credits, and the excess tax benefits on restricted stock awards that vested during the period.

The Company recorded an income tax benefit of $ 366 thousand and $ 751 thousand for the three months ended June 30, 2026 and 2025, respectively, and an income tax benefit of $ 654 thousand and $ 1.5 million for the nine months ended June 30, 2026 and 2025, respectively.

For the three and nine months ended June 30, 2026 and June 30, 2025, the difference between our effective income tax rate and the U.S.

federal statutory rate are the impact of tax credits that we expect to be able to utilize against federal and state taxes, the change in valuation allowance maintained against certain state tax credits, and the excess tax benefits on restricted stock awards that vested during the period.

Accumulated Other Comprehensive Loss

12 unchanged sentences

unobservable inputs (e.g., a reporting entity’s or other entity’s own data)

The Company had no assets or liabilities measured at fair value on a recurring basis (except our pension plan assets and whole life insurance policies, see Note 10 Pension and Retirement Plans for pension plan assets) or non-recurring basis as of March 31, 2026 or September 30, 2025.

To estimate fair value of the financial instruments below, quoted market prices are used when available and classified within Level 1.

1 unchanged sentence

If the preceding information is unavailable, we use internally generated data to estimate fair value which is classified within Level 3.

As of March 31, 2026

As of June 30, 2026

As of September 30, 2025

9 unchanged sentences

Condensed Consolidated Balance Sheets and Note 5

Accounts payable and accrued expenses and other noncurrent liabilities**

Accounts payable and accrued expenses and other long-term liabilities**

Line of Credit

5 unchanged sentences

Accounts receivable and Accounts payable and accrued expenses with original maturity of less than one year

Fair value was not materially different from their carrying values as of March 31, 2026, and September 30, 2025

Fair value was not materially different from their carrying values as of June 30, 2026, and September 30, 2025

Financing receivables, net

33 unchanged sentences

Technology Solutions Segment

Three months ended March 31,

Three months ended June 30,

(Amounts in thousands)

26 unchanged sentences

Technology Solutions Segment

Six months ended March 31,

Nine months ended June 30,

(Amounts in thousands)

33 unchanged sentences

Each customer’s letter (e.g.

“Customer A”) does not change meaning if Customer A is in multiple tables, it is the same customer.

Below are customers with 10% or more of accounts receivable as of March 31, 2026 or September 30, 2025.

As of March 31, 2026

“Customer E”) does not change meaning if Customer E is in multiple tables, it is the same customer.

Below are customers with 10% or more of accounts receivable as of June 30, 2026 or September 30, 2025.

As of June 30, 2026

As of September 30, 2025

4 unchanged sentences

Accounts receivable

Below are customers with 10% or more of financing receivables as of March 31, 2026 or September 30, 2025.

As of March 31, 2026

Below are customers with 10% or more of financing receivables as of June 30, 2026 or September 30, 2025.

As of June 30, 2026

As of September 30, 2025

4 unchanged sentences

Financing Receivables

The following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three and six months ended March 31, 2026 and 2025.

Three months ended March 31,

Six months ended March 31,

The following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three and nine months ended June 30, 2026 and 2025.

Three months ended June 30,

Nine months ended June 30,

(Amounts in millions)

3 unchanged sentences

On February 12, 2026 , the Company’s board of directors declared a dividend of $ 0.03 per share payable March 12, 2026 , to shareholders of record on the close of business on February 26, 2026 .

On May 5, 2026 , the Company’s board of directors declared a dividend of $ 0.03 per share payable June 15, 2026 , to shareholders of record on the close of business on May 21, 2026 .

Subsequent Events

On July 29, 2026, the trustees of the Modcomp Limited Retirement and Death Benefit Plan entered into a buy-out agreement with Just Retirement Limited, terminating the group buy-in insurance policy and replacing it with individual buy-out policies for each plan member.

The trustees assigned these policies directly to the members, thereby discharging the Plan's obligations to those members.

All necessary legal, regulatory, and tax requirements were confirmed as satisfied.

The insurer's liability is now limited to the benefits specified in the individual policies, and the Plan has no further obligation to the affected members.

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 1. Financial Statements