What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-04 · 111 added, 108 removed, 170 unchanged (56% of the section changed)

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis below described material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024.

This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Form 10-K.

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The Company announced on June 27, 2025, it had closed on $210 million in senior secured credit facilities, consisting of (i) a $95 million senior secured Term Loan with TCW Group, as agent, and (ii) a $115 million senior secured asset-based revolving credit facility with Bank of America, N.A., as agent.

Obligations under the new senior secured credit facilities will mature on June 27, 2030, with the ABL revolving credt facility springing to 91 days prior to the maturity of the Term Loan or third-party subordinated debt.

Obligations under the new senior secured credit facilities will mature on June 27, 2030, with the ABL revolving credit facility springing to 91 days prior to the maturity of the Term Loan or third-party subordinated debt.

In connection with the financing, TCW Group affiliates received five-year warrants for the purchase of up to 3,934,776 shares of the company’s common stock, issued in two equal tranches.

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Until the fourth anniversary after issuance, the Company has the right to repurchase up to 50% of each tranche of warrants at a price equal to $1.40 or $1.00 per share, respectively, above the applicable exercise price.

Upon a refinancing of the new credit agreement, the holders can require the Company to repurchase up to 50% of each tranche at a price equal to the stock price of the common stock at the time of repurchase less the exercise price.

Upon a refinancing of the new credit agreement, the holders can require the Company to repurchase up to 50% of each tranche at a price equal to the price of the common stock at the time of repurchase less the exercise price.

The warrants contain customary anti-dilution adjustments.

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Its wiper systems became part of the newly formed Trim Systems and Components business unit in addition to the trim and components businesses from the prior Vehicle Solutions segment.

We are navigating through several external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new tariff actions, tax regulation and fluctuating foreign exchange rates.

The Company’s cost of goods sold could be increased by tariffs which could subsequently increase the price of goods purchased and sold to customers.

The Company expects to pass on the costs of tariffs, if any, to its customers, although there is significant uncertainty.

We are navigating through several challenging external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new tariff actions and responses, tax regulation and fluctuating foreign exchange rates.

We expect the Company’s cost of goods sold will continue to be impacted by tariffs which increase the price of goods purchased and sold to customers.

The Company expects to continue to pass on the costs of tariffs to its customers, although there is significant uncertainty as to our ability to recover these costs from our customers.

Geopolitical uncertainties will continue to create a challenging operating environment.

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Additionally, the bill extends and modifies certain international tax provisions of the 2017 Tax Cuts and Jobs Act that were set to expire at the end of 2025.

The Company continues to evaluate the impact of the new legislation but does not expect the OBBBA to have a material impact on the Company’s consolidated financial statements.

The Company continues to evaluate the impact of the new legislation but does not expect the OBBBA to have a material impact on the Company’s consolidated financial statements or results of operations.

Consolidated Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The table below sets forth certain consolidated operating data for the three months ended June 30 (dollars are in thousands):

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The table below sets forth certain consolidated operating data for the three months ended September 30 (dollars are in thousands):

2025 2024 $ Change % Change

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Selling, general and administrative expenses 17,104 17,481 (377) (2.2)

Other (income) expense 427 206 221 107.3

Other (income) expense 1,004 (1,033) 2,037 NM 1

Interest expense 4,068 2,371 1,697 71.6

Loss on extinguishment of debt 460 — 460 NM 1

Provision for income taxes 687 (1,515) 2,202 NM 1

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• a $2.6 million, or 8.4%, decrease in aftermarket and OES sales.

The decrease in revenues of 11.2% is due primarily to a softening in customer demand across Global Seating and Trim Systems & Components segments.

The decrease in revenues of 11.2% is due primarily to a softening in customer demand in North America.

Gross Profit .

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Cost of revenues decreased $18.9 million, or 12.2%, as a result of a decrease in raw material and purchased component costs of $13.4 million, or 15.1%, and a decrease in labor and overhead expenses of $5.5 million, or 8.2%.

As a percentage of revenues, gross profit margin was 11.4% for the three months ended June 30, 2025 compared to 10.6% for the three months ended June 30, 2024.

The three months ended June 30, 2025 results include charges of $1.1 million associated with restructuring programs, compared to $5.1 million for the three months ended June 30, 2024.

As a percentage of revenues, gross profit margin was 10.5% for the three months ended September 30, 2025 compared to 9.6% for the three months ended September 30, 2024.

The three months ended September 30, 2025 results include charges of $2.4 million associated with restructuring programs, compared to $3.5 million for the three months ended September 30, 2024.

Selling, General and Administrative Expenses .

Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products.

SG&A expenses decreased $0.7 million compared to the three months ended June 30, 2024, primarily as a result of a decrease in incentive compensation expense.

As a percentage of revenues, SG&A expense was 10.9% and 10.0% for the three months ended June 30, 2025 and 2024, respectively.

SG&A expenses decreased $0.4 million compared to the three months ended September 30, 2024, primarily as a result of a decrease in incentive compensation expense and restructuring charges;

offset by a $3.5 million gain on the sale of a building included in the prior year period.

As a percentage of revenues, SG&A expense was 11.2% and 10.2% for the three months ended September 30, 2025 and 2024, respectively.

Other (Income) Expense .

Other expense increased $0.2 million in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Other expense increased $2.0 million in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily related to fees we received under the transition services agreement of $2.0 million recognized during the three months ended September 30, 2024.

Interest Expense .

Interest associated with our debt was relatively flat on a lower average debt balance, at $2.3 million and $2.4 million for the three months ended June 30, 2025 and 2024, respectively.

Loss on extinguishment of debt.

Loss on extinguishment of debt reflects the write-off of deferred financing fees related to early repayment of the prior revolver $0.5 million.

Interest associated with our debt increased $1.7 million, at $4.1 million and $2.4 million for the three months ended September 30, 2025 and 2024, respectively.

The increase in interest expense was primarily attributed to higher weighted average margins on debt balances.

Provision for Income Taxes.

Income tax expense of $1.7 million and benefit of $0.3 million was recorded for the three months ended June 30, 2025 and 2024, respectively.

Income tax expense of $0.7 million and benefit of $1.5 million was recorded for the three months ended September 30, 2025 and 2024, respectively.

The primary driver in the effective tax rate change is the Company's losses in the U.S.

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Net Income (Loss) from continuing operations.

Net loss from continuing operations was $4.1 million for the three months ended June 30, 2025 compared to net loss of $1.3 million for the three months ended June 30, 2024.

Net loss from continuing operations was $6.8 million for the three months ended September 30, 2025 compared to net loss of $0.9 million for the three months ended September 30, 2024.

The decrease in net income is attributable to the factors noted above.

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Global Seating Segment Results

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The table below sets forth certain Global Seating Segment operating data for the three months ended June 30 (dollars are in thousands):

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The table below sets forth certain Global Seating Segment operating data for the three months ended September 30 (dollars are in thousands):

2025 2024 $ Change % Change

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Selling, general & administrative expenses 7,108 9,259 (2,151) (23.2)

Operating income 2,711 2,100 611 29.1

The decrease in Global Seating Segment revenues of $7.9 million was primarily driven by decreased customer demand.

Operating income 1,408 (1,540) 2,948 NM 1

The decrease in Global Seating Segment revenues of $7.9 million was primarily driven by lower sales volume as a result of softening customer demand in North America.

Gross Profit.

The decrease in 2025 gross profit of $0.7 million was primarily attributable to lower sales volumes.

The increase in 2025 gross profit of $0.8 million was primarily attributable to lower freight costs and improved operational efficiency.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $8.3 million, or 19.9%, and a decrease in labor and overhead expenses of $0.3 million, or 1.2%.

As a percentage of revenues, gross profit margin was 13.3% for the three months ended June 30, 2025 compared to 12.9% for the three months ended June 30, 2024.

As a percentage of revenues, gross profit margin was 12.4% for the three months ended September 30, 2025 compared to 10.1% for the three months ended September 30, 2024.

The three months ended September 30, 2025 results include charges of $1.3 million associated with restructuring programs, compared to $0.8 million for the three months ended September 30, 2024.

Selling, General and Administrative Expenses .

SG&A expenses decreased $1.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily as a result of reduced incentive compensation expense and headcount reduction.

SG&A expenses decreased $2.2 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily as a result of reduced incentive compensation expense and headcount reduction.

Global Electrical Systems Segment Results

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended June 30 (dollars are in thousands):

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended September 30 (dollars are in thousands):

2025 2024 $ Change % Change

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Selling, general & administrative expenses 4,483 4,468 15 0.3

Operating income (loss) 707 (539) 1,246 NM 1

Not meaningful

Revenues in the Global Electrical Systems Segment were essentially flat compared to the three months ended June 30, 2024.

Operating income 838 (1,475) 2,313 NM 1

The increase in Global Electrical Systems Segment revenues of $2.8 million was primarily as a result of new business wins.

Gross Profit.

The increase in gross profit of $1.9 million was primarily attributable to lower start-up and restructuring costs.

The cost of revenues decreased in line with the sales decrease of 0.1%, driven by a decrease in labor and overhead expenses of $2.4 million, or 9.9%;

and an increase in raw material and purchased component costs of $0.5 million, or 1.9%.

As a percentage of revenues, gross profit margin was 11.0% for the three months ended June 30, 2025 compared to 7.4% for the three months ended June 30, 2024.

The increase in gross profit margin was primarily due to lower start-up and restructuring costs in the current year compared to the prior year, offset by lower sales volume.

The three months ended June 30, 2025 results include charges of $0.5 million associated with the restructuring program, compared to $2.5 million for the three months ended June 30, 2024.

The increase in gross profit of $2.3 million was primarily attributable to volume and mix.

The increase in cost of revenues was driven by an increase in raw material and purchased component costs of $1.5 million, or 7.1%, and a decrease in labor and overhead expenses of $1.1 million, or 5.0%.

As a percentage of revenues, gross profit margin was 10.8% for the three months ended September 30, 2025 compared to 6.4% for the three months ended September 30, 2024.

The increase in gross profit margin was primarily due to mix and improved operational efficiency.

The three months ended September 30, 2025 results include charges of $0.4 million associated with restructuring programs, compared to $1.3 million for the three months ended September 30, 2024.

Selling, General and Administrative Expenses .

SG&A expenses increased $0.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

SG&A expenses were relatively flat for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Trim Systems and Components Segment Results

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended June 30 (dollars are in thousands):

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended September 30 (dollars are in thousands):

2025 2024 $ Change % Change

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Selling, general & administrative expenses 3,136 262 2,874 1,096.9

Operating income 105 2,327 (2,222) (95.5)

The decrease in Trim Systems and Components Segment revenues in 2025 of $13.7 million was primarily driven by decreased customer demand.

Operating income (loss) (930) 5,447 (6,377) NM 1

Not meaningful

The decrease in the Trim Systems and Components Segment revenues of $14.1 million was primarily driven by lower sales volume as a result of softening customer demand in North America.

Gross Profit.

The decrease in gross profit of $2.3 million was primarily attributable to lower sales volumes.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $7.7 million, or 23.5%, and a decrease in labor and overhead expenses of $3.8 million, or 19.9%.

As a percentage of revenues, gross profit margin was 8.4% for the three months ended June 30, 2025 compared to 10.3% for the three months ended June 30, 2024.

The decrease in gross profit margin was primarily due to lower sales volumes.

The decrease in gross profit of $3.5 million was primarily attributable to lower sales volume.

The cost of revenues decreased in line with the sales decrease of 29.2%, driven by a decrease in labor and overhead expenses of $4.1 million, or 22.9%;

and a decrease in raw material and purchased component costs of $6.6 million, or 26.4%.

As a percentage of revenues, gross profit margin was 6.4% for the three months ended September 30, 2025 compared to 11.8% for the three months ended September 30, 2024.

The decrease in gross profit margin was primarily due to lower sales volume.

The three months ended September 30, 2025 results include charges of $0.6 million associated with restructuring programs, compared to $1.5 million for the three months ended September 30, 2024.

Selling, General and Administrative Expenses .

SG&A expenses were relatively flat for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

SG&A expenses increased $2.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily as a result of the gain on the sale of a building of $3.5 million in the prior year period.

Consolidated Results of Operations

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The table below sets forth certain consolidated operating data for the six months ended June 30, (dollars are in thousands):

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The table below sets forth certain consolidated operating data for the nine months ended September 30, (dollars are in thousands):

2025 2024 $ Change % Change

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Selling, general and administrative expenses 52,222 55,531 (3,309) (6.0)

Other (income) expense 355 418 (63) (15.1)

Other (income) expense 1,358 (615) 1,973 NM 1

Interest expense 8,862 6,974 1,888 27.1

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Net income (loss) from continuing operations

(7,245) 147 (7,392) NM 1

(14,064) (736) (13,328) 1,810.9

Not meaningful

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• a $4.8 million, or 4.9%, decrease in aftermarket and OES sales.

The decrease in revenues of $46.5 million is primarily driven by a softening in customer demand across all segments.

The decrease in revenues of $65.8 million was primarily driven by a softening in customer demand across all segments.

Gross Profit .

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Cost of revenues decreased $59.1 million, or 11.8%, as a result of a decrease in raw material and purchased component costs of $36.8 million, or 12.6%, and a decrease in labor and overhead expenses of $22.3 million, or 10.7%.

As a percentage of revenues, gross profit margin was 10.9% for the six months ended June 30, 2025 compared to 11.2% for the six months ended June 30, 2024.

The six months ended June 30, 2025 results include charges of $1.6 million associated with the restructuring programs, compared to $5.1 million for the six months ended June 30, 2024 .

As a percentage of revenues, gross profit margin was 10.8% for the nine months ended September 30, 2025 compared to 10.7% for the nine months ended September 30, 2024.

The nine months ended September 30, 2025 results include charges of $4.0 million associated with restructuring programs, compared to $8.6 million for the nine months ended September 30, 2024 .

Selling, General and Administrative Expenses .

SG&A expenses decreased $2.9 million compared to the six months ended June 30, 2024, primarily as a result of a decrease in incentive compensation expense.

As a percentage of revenues, SG&A expense was 10.3% for the six months ended June 30, 2025 compared to 9.8% for the six months ended June 30, 2024.

The six months ended June 30, 2025 results include charges of $0.2 million associated with the restructuring programs, compared to $0.4 million for the six months ended June 30, 2024.

SG&A expenses decreased $3.3 million compared to the nine months ended September 30, 2024, primarily as a result of a decrease in incentive compensation expense.

As a percentage of revenues, SG&A expense was 10.6% for the nine months ended September 30, 2025 compared to 9.9% for the nine months ended September 30, 2024.

The nine months ended September 30, 2025 results include charges of $0.5 million associated with the restructuring programs, compared to $1.1 million for the nine months ended September 30, 2024.

Other (Income) Expense .

Other Expenses decreased $0.1 million in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Other income decreased $2.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily related to fees we received under the transition services agreement of $2.0 million recognized during the three months ended September 30, 2024.

Interest Expense .

Interest associated with our debt was $4.8 million and $4.6 million for the six months ended June 30, 2025 and 2024, respectively.

The increase in interest expense primarily related to less benefit from the interest rate swap due to lower interest rates on variable rate debt during the current period.

Interest associated with our debt was $8.9 million and $7.0 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase in interest expense was primarily attributed to higher weighted average margins on debt balances, partially offset by the impact of lower average debt balances in the nine months ended September 30 2025.

Loss on extinguishment of debt.

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Provision (benefit) for Income Taxes.

Income tax expense of $3.8 million and $0.4 million were recorded for the six months ended June 30, 2025 and 2024, respectively.

Income tax expense of $4.5 million and benefit of $1.1 million were recorded for the nine months ended September 30, 2025 and 2024, respectively.

The primary driver in the effective tax rate change is the Company's losses in the U.S.

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Net Income (loss) from continuing operations.

Net loss from continuing operations was $7.2 million for the six months ended June 30, 2025 compared to net income of $0.1 million for the six months ended June 30, 2024.

The decrease in net income is attributable to the factors noted above.

Net loss from continuing operations was $14.1 million for the nine months ended September 30, 2025 compared to net loss of $0.7 million for the nine months ended September 30, 2024.

The decrease is attributable to the factors noted above.

Segment Results

Global Seating Segment Results

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The table below sets forth certain Global Seating Segment operating data for the six months ended June 30, (dollars are in thousands):

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The table below sets forth certain Global Seating Segment operating data for the nine months ended September 30, (dollars are in thousands):

2025 2024 $ Change % Change

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Operating income 6,445 3,355 3,090 92.1

The decrease in Global Seating Segment revenues of $15.3 million was primarily driven by decreased customer demand.

The decrease in Global Seating Segment revenues of $23.3 million was primarily driven by decreased customer demand in North America.

Gross Profit.

The decrease in gross profit of $2.5 million was primarily attributable to lower sales volume and increased freight costs.

The decrease in gross profit of $1.4 million was primarily attributable to lower freight costs and improved operational efficiency.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $18.3 million, or 14.0%, and a decrease in labor and overhead expenses of $3.2 million, or 4.0%.

As a percentage of revenues, gross profit margin was 12.9% for the six months ended June 30, 2025 compared to 13.2% for the six months ended June 30, 2024, driven by lower sales volume and increased freight costs.

The six months ended June 30, 2025 results include charges of $0.4 million associated with the restructuring program, compared to $0.8 million for the six months ended June 30, 2024.

As a percentage of revenues, gross profit margin was 12.7% for the nine months ended September 30, 2025 compared to 12.1% for the nine months ended September 30, 2024.

The nine months ended September 30, 2025 results include charges of $1.7 million associated with restructuring programs, compared to $1.6 million for the nine months ended September 30, 2024.

Selling, General and Administrative Expenses .

SG&A expenses decreased $3.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily as a result of reduced incentive compensation expense and headcount reduction.

SG&A expenses decreased $4.5 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily as a result of reduced incentive compensation expense and headcount reduction.

Global Electrical Systems Segment Results

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The table below sets forth certain Global Electrical Systems Segment operating data for the six months ended June 30, (dollars are in thousands):

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The table below sets forth certain Global Electrical Systems Segment operating data for the nine months ended September 30, (dollars are in thousands):

2025 2024 $ Change % Change

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Selling, general & administrative expenses 14,260 13,373 887 6.6

Operating income (loss) 389 (96) 485 (505.2)

Operating income (loss) 962 (1,571) 2,533 NM 1

The decrease in Global Electrical Systems Segment revenues of $5.6 million was primarily driven by decreased customer demand.

Gross Profit.

The increase in gross profit of $1.1 million is primarily attributable to lower start-up and restructuring costs.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $1.8 million, or 3.6%, and a decrease in labor and overhead expenses of $7.6 million, or 14.5%.

As a percentage of revenues, gross profit margin was 9.5% for the six months ended June 30, 2025 compared to 7.8% for the six months ended June 30, 2024.

This was primarily due to lower start-up and restructuring costs.

The six months ended June 30, 2025 results include charges of $1.0 million associated with the restructuring program, compared to $2.5 million for the six months ended June 30, 2024.

The increase in gross profit of $3.4 million is primarily attributable to mix and improved operational efficiency.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $0.3 million, or 0.4%;

and a decrease in labor and overhead expenses of $8.7 million, or 11.7%.

As a percentage of revenues, gross profit margin was 9.9% for the nine months ended September 30, 2025 compared to 7.4% for the nine months ended September 30, 2024, driven by mix and improved operational efficiency.

The nine months ended September 30, 2025 results include charges of $1.5 million associated with restructuring programs, compared to $3.7 million for the nine months ended September 30, 2024.

Selling, General and Administrative Expenses .

SG&A expenses increased $0.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

SG&A expenses increased $0.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Trim Systems and Components Segment Results

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The table below sets forth certain Trim Systems and Components Segment operating data for the six months ended June 30, (dollars are in thousands):

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The table below sets forth certain Trim Systems and Components Segment operating data for the nine months ended September 30, (dollars are in thousands):

2025 2024 $ Change % Change

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Operating income (loss) 523 11,974 (11,451) (95.6)

The decrease in Trim Systems and Components Segment revenues of $22.9 million was primarily driven by decreased customer demand.

The decrease in Trim Systems and Components Segment revenues of $37.0 million was primarily driven by decreased customer demand in North America.

Gross Profit.

The decrease in gross profit of $5.2 million is primarily attributable to lower sales volume and increased freight costs.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $11.6 million, or 18.3%;

and a decrease in labor and overhead expenses of $6.2 million, or 17.0%.

As a percentage of revenues, gross profit margin was 9.3% for the six months ended June 30, 2025 compared to 12.0% for the six months ended June 30, 2024, driven by lower sales volume and increased freight costs.

The six months ended June 30, 2025 results include charges of $0.2 million associated with the restructuring program, compared to $1.8 million for the six months ended June 30, 2024.

The decrease in gross profit of $8.7 million is primarily attributable to lower sales volume.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $18.2 million, or 20.6%, and a decrease in labor and overhead expenses of $10.2 million, or 19.0%.

As a percentage of revenues, gross profit margin was 8.5% for the nine months ended September 30, 2025 compared to 12.0% for the nine months ended September 30, 2024.

This was primarily due to lower sales volume.

The nine months ended September 30, 2025 results include charges of $0.9 million associated with restructuring programs, compared to $3.3 million for the nine months ended September 30, 2024.

Selling, General and Administrative Expenses .

SG&A expenses decreased $0.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

SG&A expenses increased $2.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily as a result of the gain on the sale of a building of $3.5 million in the prior year period.

Liquidity and Capital Resources

Our primary sources of liquidity as of June 30, 2025 were operating income, cash and availability under our credit facility.

Our primary sources of liquidity as of September 30, 2025 were operating income, cash and availability under our credit facility.

We believe that these sources of liquidity will provide adequate funds for our working capital needs, capital expenditures and debt service throughout the next twelve months.

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We also rely on the timely collection of receivables as a source of liquidity.

As of June 30, 2025, we had outstanding letters of credit of $1.1 million and borrowing availability of $90.6 million from our U.S.

As of September 30, 2025, we had outstanding letters of credit of $1.1 million and borrowing availability of $96.5 million from our U.S.

and China credit facilities (subject to customary borrowing base and other conditions), in addition to $31.3 million of cash.

As of June 30, 2025, cash of $30.7 million was held by foreign subsidiaries.

The Company had a $0.1 million deferred tax liability as of June 30, 2025 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.

As of September 30, 2025, cash of $31.3 million was held by foreign subsidiaries.

The Company had a $0.2 million deferred tax liability as of September 30, 2025 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.

Covenants and Liquidity

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Sources and Uses of Cash

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

Net cash provided by operating activities

Cash provided by (used in):

Net cash provided by (used in) operating activities

$ 32,355 $ (6,835)

Net cash used in investing activities (5,271) (8,066)

Net cash provided by (used in) financing activities

Effect of currency exchange rate changes on cash

Net cash provided by (used in) investing activities

(7,031) 12,868

Net increase in cash

Net cash used in financing activities

(22,661) (12,927)

Effect of currency exchange rate changes on cash

Net increase (decrease) in cash

$ 4,696 $ (6,963)

Operating activities.

For the six months ended June 30, 2025, net cash provided by operating activities was $34.0 million compared to net cash provided by operating activities of $10.2 million for the six months ended June 30, 2024.

Net cash provided by operating activities is primarily attributable to a decrease in trade working capital and net loss for the six months ended June 30, 2025 as compared to a lesser decrease in trade working capital for the six months ended June 30, 2024.

For the nine months ended September 30, 2025, net cash provided by operating activities was $32.4 million compared to net cash used in operating activities of $6.8 million for the nine months ended September 30, 2024.

Net cash provided by operating activities is primarily attributable to a decrease in trade working capital and net loss for the nine months ended September 30, 2025 as compared to a lesser decrease in trade working capital for the nine months ended September 30, 2024.

Investing activities.

For the six months ended June 30, 2025, net cash used in investing activities was $5.3 million compared to $8.1 million for the six months ended June 30, 2024.

The change was mainly due to less capital spending in the current year, combined with $3.2 million proceeds from the sale of the Company's FinishTEK business received during the first quarter of 2024 offsetting capital expenditures.

For the nine months ended September 30, 2025, net cash used in investing activities was $7.0 million compared to cash provided by investing activities of $12.9 million for the nine months ended September 30, 2024.

The change was mainly due to less capital spending in the current year, combined with $23.0 million proceeds from the sale of the Company's cab structures and FinishTEK businesses during the prior year period and $4.5 million proceeds from the sale of a building during the 2024 offsetting capital expenditures.

In 2025, we expect capital expenditures to be in the range of $9 million to $12 million.

Financing activities.

For the six months ended June 30, 2025, net cash used in financing activities was $12.2 million compared to net cash provided by financing activities of $0.4 million for the six months ended June 30, 2024.

Use of cash in financing activities during the six months ended June 30, 2025 was primarily attributable to the cost of refinancing our debt which totaled $6.1 million and the net reduction of our debt of $6.0 million.

For the nine months ended September 30, 2025, net cash used in financing activities was $22.7 million compared to net cash used in financing activities of $12.9 million for the nine months ended September 30, 2024.

Use of cash in financing activities during the nine months ended September 30, 2025 was primarily attributable to the cost of refinancing our debt which totaled $6.1 million and the net reduction of our debt of $16.3 million.

Debt and Credit Facilities

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Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Form 10-K.

At June 30, 2025, there have been no material changes to our critical accounting estimates from those disclosed in our 2024 Form 10-K.

At September 30, 2025, there have been no material changes to our critical accounting estimates from those disclosed in our 2024 Form 10-K.

Forward-Looking Statements

9 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