What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-11 compared with 2026-05-12 · 199 added, 127 removed, 394 unchanged (45% of the section changed)

3 unchanged sentences

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

$ 121,498,295

$ 136,101,298

Cost of products sold

1 unchanged sentence

( 53,801,184 )

( 96,816,475 )

( 104,642,211 )

Product development expense

1 unchanged sentence

( 1,031,716 )

( 2,078,000 )

( 2,140,902 )

Selling and administrative expenses

1 unchanged sentence

( 12,188,736 )

( 19,621,306 )

( 22,534,931 )

Operating profit

Interest expense

( 1,108,831 )

( 1,330,941 )

Bargain purchase gain

Other income (expense)

1 unchanged sentence

Income tax expense

( 1,855,254 )

( 2,025,518 )

( 1,124,703 )

Net income from continuing operations

Discontinued Operations (see note B)

Income from operations of discontinued unit

Discontinued Operations (see note C)

Loss from operations of discontinued unit

$ ( 234,237 )

$ ( 520,005 )

Income from disposal of discontinued unit

Income tax expense

Income from discontinued operations

Net income from discontinued operations

Earnings per share from continuing operations:

6 unchanged sentences

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Other comprehensive income:

9 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

April 4, 2026

January 3, 2026

1 unchanged sentence

Cash and cash equivalents

Marketable Securities

Accounts receivable, less allowances:

19 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

April 4, 2026

January 3, 2026

23 unchanged sentences

50,000,000 shares

9,189,555 shares as of April 4, 2026 and 9,179,288 shares as of January 3, 2026

6,030,914 shares as of April 4, 2026 and 6,041,767 shares as of January 3, 2026

9,195,728 shares as of July 4, 2026 and 9,179,288 shares as of January 3, 2026

6,017,558 shares as of July 4, 2026 and 6,041,767 shares as of January 3, 2026

Treasury Stock:

3,158,641 shares as of April 4, 2026 and 3,137,521 shares as of January 3, 2026

3,178,170 shares as of July 4, 2026 and 3,137,521 shares as of January 3, 2026

( 30,895,650 )

4 unchanged sentences

( 1,437,363 )

Unrealized gain on foreign currency swap, net of tax

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Operating Activities

2 unchanged sentences

Adjustments to reconcile net income to net cash provided

by (used in) operating activities:

by operating activities:

Depreciation and amortization

Acquisition related expenses

Bargain purchase gain

( 6,529,299 )

Reduction in carrying amount of ROU assets

Unrecognized pension and postretirement benefit

Loss on sale of equipment and other assets

( 1,211,007 )

(Gain) loss on sale of equipment

Provision for doubtful accounts

Stock compensation benefit

Stock compensation expense

Changes in operating assets and liabilities:

1 unchanged sentence

( 4,974,987 )

( 2,271,343 )

Prepaid expenses and other

1 unchanged sentence

Accrued compensation

Operating lease liability

( 1,276,927 )

Change in operating lease liability

Other accrued expenses

( 1,502,376 )

Net cash provided by (used in) operating activities

Other accrued expenses

( 6,908,197 )

Net cash provided by operating activities

Investing Activities

Marketable securities

( 8,041,927 )

Payments received from notes receivable

Proceeds from sale of equipment

Proceeds from sale of discontinued operations

Purchases of property, plant, and equipment

Net cash used in investing activities

( 1,482,339 )

( 1,599,780 )

Net cash (used in) provided by investing activities

( 9,548,591 )

Financing Activities

Payments on short term borrowings (revolver)

Proceeds from long-term debt

Proceeds from promissory note

Principal payments on long-term debt

( 1,000,000 )

( 5,919,065 )

Financing leases, net

2 unchanged sentences

Dividends paid

Net cash used in financing activities

( 1,327,007 )

( 1,347,951 )

Discontinued Operations

Cash provided by operating activities

Cash used in financing activities

Cash provided by discontinued operations

Net cash provided by (used in) financing activities

( 9,784,073 )

Effect of exchange rate changes on cash

8 unchanged sentences

See accompanying notes

1 Includes cash from assets held for sale of $1.2 million as of March 29, 2025

THE EASTERN COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

Comprehensive

Shareholder's

Income (Loss)

Shareholders'

Balances at December 28, 2024

3 unchanged sentences

$ 120,691,399

Cash dividends declared,

$0.22 per share

( 1,347,951 )

Cash dividends declared, $0.44 per share

( 1,347,951 )

Currency translation adjustment

Change in fair value of foreign currency swap

Change in pension and other postretirement benefit costs, net of tax

Change in fair value of foreign

currency swap

Change in pension and other

postretirement benefit costs,

Treasury Stock Purchase

2 unchanged sentences

Issuance of stock awards, net

Issuance of Common Stock for directors' fees

Balances at March 29, 2025

( 3,034,445 )

Issuance of Common Stock

for directors' fees

Balances at June 28, 2025

$ ( 28,462,013

7 unchanged sentences

$ 124,645,329

Cash dividends declared,

$0.22 per share

( 1,327,007 )

Cash dividends declared, $0.44 per share

( 1,327,007 )

Currency translation adjustment

Change in fair value of foreign currency swap

Change in pension and other postretirement benefit costs, net of tax

Change in fair value of foreign

currency swap

Change in pension and other

postretirement benefit costs,

Treasury Stock Purchase

Issuance of stock awards, net

Issuance of Common Stock for directors' fees

Balances at April 4, 2026

( 3,158,641 )

Issuance of Common Stock

for directors' fees

Balances at July 4, 2026

$ ( 30,895,650

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

April 4, 2026

Note A – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements.

Refer to the consolidated financial statements of The Eastern Company (together with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2026, as amended on March 19, 2026 (the “2025 Form 10-K”), for additional information.

You should refer to the consolidated financial statements of The Eastern Company (together with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2026, as amended on March 19, 2026 (the “2025 Form 10-K”), for additional information.

The accompanying condensed consolidated financial statements are unaudited.

4 unchanged sentences

The Company’s fiscal year is a 52- or 53-week fiscal year ending on the Saturday nearest to December 31.

References in this Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2026 (this “Form 10-Q”) to 2025, the fiscal year 2025 or fiscal 2025 mean the 53-week period ended on January 3, 2026, and references to 2026, fiscal year 2026 or fiscal 2026 mean the 52-week period ending on January 2, 2027.

Each fiscal quarter also ends on a Saturday.

References in this Quarterly Report on Form 10-Q for the quarterly period ended July 4, 2026 (this “Form 10-Q”) to 2025, the fiscal year 2025 or fiscal 2025 mean the 53-week period ended on January 3, 2026, and references to 2026, fiscal year 2026 or fiscal 2026 mean the 52-week period ending on January 2, 2027.

In a 53-week fiscal year, the first three quarters each have 13 weeks, and the fourth quarter has 14 weeks.

In a 52-week fiscal year, each quarter has 13 weeks.

References to the first quarter of 2025, the first fiscal quarter of 2025, the first three months of fiscal 2025 or the three months ended March 29, 2025 mean the 13-week period from December 29, 2024 to March 29, 2025.

References to the first quarter of 2026, the first fiscal quarter of 2026, the first three months of fiscal 2026 or the three months ended April 4, 2026, mean the 13-week period from January 4, 2026 to April 4, 2026.

References to the second quarter of 2025, the second fiscal quarter of 2025, the second three months of fiscal 2025 or the three months ended June 28, 2025 mean the 13-week period from March 30, 2025 to June 28, 2025.

References to the second quarter of 2026, the second fiscal quarter of 2026, the second three months of fiscal 2026 or the three months ended July 4, 2026, mean the 13-week period from April 5, 2026 to July 4, 2026.

References to the first six months of 2025 or the six months ended June 28, 2025 mean the period from December 29, 2024 to June 28, 2025.

References to the first six months of 2026 or the six months ended July 4, 2026 mean the period from January 4, 2026 to July 4, 2026.

Certain amounts in the 2025 financial statements have been reclassified to conform with the 2026 presentation with no impact or change to previously reported net income or shareholders’ equity.

Note B – Discontinued Operations

Note B – Acquisition

On June 1, 2026, we completed the acquisition of Sinecera LLC (doing business as Crown Precision) and Sungear LLC , both of which manufacture and supply aerospace and defense components within the United States.

Sinecera LLC and Sungear LLC became wholly-owned consolidated subsidiaries of Eastern Precision Holdings, Inc., a newly-formed wholly owned direct subsidiary of the Company.

The purchase price of the acquired net assets was $ 7,850,000 , of which $ 7,065,000 was paid at closing and $ 785,000 was financed through a note due on September 27, 2027 The aggregate fair value of the identifiable net assets acquired exceeded the fair value of the consideration transferred which resulted in a bargain purchase.

Before recording this gain, we reassessed whether we had correctly identified all of the assets acquired and all of the liabilities assumed and recognized any additional assets or liabilities that were identified in that review.

The resulting gain of $ 6.5 million was recognized as a "bargain purchase gain" in the consolidated statement of operations for the quarter ended July 4, 2026.

This bargain purchase gain arose primarily due to the seller’s need for immediate liquidity which provided the Company with an opportunity to enter the aerospace and defense market for engineered components at a favorable purchase price.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

Acquired Balance Sheet

Accounts Receivable

Property Plant and Equipment

Liabilities assumed

Net Assets Acquired

Purchase Price

Bargain purchase gain

Income Statement

for the period since acquisition (June 1, 2026) to July 4, 2026

Cost of Goods Sold

( 1,718,083 )

Total Selling & Administrative Expense

Operating Loss

Bargain purchase gain

Income before income taxes

Note C – Discontinued Operations

In the third quarter of 2024, we determined that the business of Big 3 Precision Mold Services, Inc.

4 unchanged sentences

ISBM, which is located in Centralia, Illinois, is an injection stretch blow mold toolmaker.

From April 30, 2025, the assets and liabilities and results of operations have been included in continuing operations.

Summarized Financial Information of Discontinued Operations

1 unchanged sentence

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Cost of products sold

1 unchanged sentence

Selling and administrative expenses

Income from disposal of discontinued Unit

Operating Income

3 unchanged sentences

Income from discontinued operations, net of tax

Note C – Earnings Per Share

Note D – Earnings Per Share

The denominators used to calculate earnings per share are as follows:

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Weighted average shares outstanding

2 unchanged sentences

Denominator for diluted earnings per share

Note D – Fair Value of Instruments

Note E– Fair Value of Instruments

The Company incurs certain manufacturing, marketing, and selling costs in international markets in local currency.

7 unchanged sentences

Designated Foreign Currency Hedge Contracts

All of the Company’s designated foreign currency hedge contracts as of April 4, 2026 were cash flow hedges under ASC Topic 815, “Derivatives and Hedging” (“ASC 815”).

All of the Company’s designated foreign currency hedge contracts as of July 4, 2026 were cash flow hedges under Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging” (“ASC 815”).

The Company records the effective portion of any change in the fair value of designated foreign currency hedge contracts in other comprehensive income until the related third-party transaction occurs.

1 unchanged sentence

In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time.

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $12.6 million as of April 4, 2026 and $8.4 million as of January 3, 2026.

As of April 4, 2026 a gain of $0.5 million is expected to be reclassified to earnings within the next nine months.

The following table presents the effect of the Company’s derivative instruments designated as cash flow hedges under Accounting Standards Codification (“ASC”) Topic 815, “Hedge Accounting Improvements,” in its unaudited Condensed Consolidated Statements of Operations for the three months ended April 4, 2026:

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $9.6 million as of July 4, 2026 and $8.4 million as of January 3, 2026.

As of July 4, 2026, $0.5 million is expected to be reclassified to earnings within the next six months.

The following table presents the effect of the Company’s derivative instruments designated as cash flow hedges under ASC 815 in its unaudited Condensed Consolidated Statements of Operations for the six months ended July 4, 2026:

Derivative Instruments

5 unchanged sentences

ASC 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet.

The Company determines the fair value of its derivative instruments using the framework prescribed by ASC 820, “Fair Value Measurements and Disclosures,” by considering the estimated amount it would receive or pay to sell or transfer these instruments at the reporting date.

The Company determines the fair value of its derivative instruments using the framework prescribed by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) by considering the estimated amount it would receive or pay to sell or transfer these instruments at the reporting date.

Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets;

2 unchanged sentences

and inputs derived principally from, or corroborated by, observable market data by correlation or other means.

As of April 4, 2026, the Company classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments.

As of July 4, 2026, the Company classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 820, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments.

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

2 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

The following tables present the fair value of the Company’s derivative instruments as they appear in its Condensed Consolidated Balance Sheets as of April 4, 2026, and January 3, 2026:

The following tables present the fair value of the Company’s derivative instruments as they appear in its Condensed Consolidated Balance Sheets as of July 4, 2026, and January 3, 2026:

Location in Condensed Consolidated Balance Sheets

As of April 4, 2026

As of July 4, 2026

As of January 3, 2026

4 unchanged sentences

Other long-term assets

Note E – Inventories

Note F – Inventories

Inventories consist of the following components:

April 4, 2026

January 3, 2026

3 unchanged sentences

Total inventories

Note F – Goodwill

The aggregate carrying amount of goodwill is approximately $ 58.6 million as of April 4, 2026.

No impairment was recognized in the first quarter of 2026.

Note G - Goodwill

The aggregate carrying amount of goodwill is approximately $ 58.7 million as of July 4, 2026.

No impairment was recognized in the second quarter of 2026.

The Company evaluates its reporting units for impairment annually in December, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

4 unchanged sentences

The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industry and have been based on historical data from both external and internal sources.

Note G – Leases

The Company presents right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months, in accordance with the Financial Accounting Standard (“FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases”.

Note H – Leases

The Company presents right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases”.

The Company accounts for non-lease components as part of the lease component to which they relate.

Lease accounting involves significant judgements, including making estimates related to the lease term, lease payments, and discount rate.

Lease accounting involves significant judgments, including making estimates related to the lease term, lease payments, and discount rate.

The Company has operating leases for buildings, warehouses, and office equipment.

7 unchanged sentences

All options to extend, when it is reasonably certain the option will be exercised, have been included in the calculation of the ROU asset and lease liability.

Currently, the Company has 18 operating leases with lease liabilities of $ 16.7 million and 8 finance leases with lease liabilities of $ 3.8 million as of April 4, 2026.

Currently, the Company has 18 operating leases with lease liabilities of $ 16.2 million and 8 finance leases with lease liabilities of $ 3.7 million as of July 4, 2026.

The terms and conditions of the leases are determined by the individual agreements.

2 unchanged sentences

There are no leases that have not yet commenced that could create significant rights and obligations for the Company.

The future payments (in millions) due under non-cancelable operating and finance leases as of April 4, 2026 are as follows:

The future payments (in millions) due under non-cancelable operating and finance leases as of July 4, 2026 are as follows:

Less effects of discounting

Lease liabilities recognized

As of April 4, 2026, the weighted average lease term for all operating and finance leases is 5.4 and 5.0 years, respectively.

As of July 4, 2026, the weighted average lease term for all operating and finance leases is 5.2 and 4.7 years, respectively.

The weighted average discount rate associated with operating and finance leases was 7.2 % and 7.2 %, respectively.

Note H – Debt

Note I – Debt

On October 28, 2025, the Company entered into a Credit Agreement with Citizens Bank, N.A.

4 unchanged sentences

Revolving loans under the Credit Agreement bear interest at a variable rate based on the term secured overnight financing rate (“SOFR”) plus an applicable margin of 1.37 5% to 2.12 5% depending on the Company’s senior net leverage ratio.

The Company’s obligations under the Credit Agreement are secured by a lien on substantially all of the Company’s assets pursuant to a Pledge and Security Agreement dated as of October 28, 2025.

The Company’s obligations under the Credit Agreement are secured by a lien on substantially all of the Company’s and its subsidiaries’ assets pursuant to a Pledge and Security Agreement dated as of October 28, 2025.

The Company has $ 59 million available on its line of credit under the Credit Agreement as of the date of filing this Form 10-Q.

3 unchanged sentences

In addition, the Company is required to maintain an interest coverage ratio not less than 3.00 to 1.00 .

The Company was in compliance with all its covenants under the Credit Agreement as of April 4, 2026 and through the date of filing this Form 10-Q.

Note I – Stock Options and Awards

The Company was in compliance with all its covenants under the Credit Agreement as of July 4, 2026 and through the date of filing this Form 10-Q.

Note J - Stock Options and Awards

On February 19, 2020, the Board of Directors of the Company (the “Board”) adopted The Eastern Company 2020 Stock Incentive Plan (the “2020 Plan”).

2 unchanged sentences

Restricted stock unit awards may be granted to participants under the 2020 Plan with restrictions determined by the Compensation Committee of the Board.

During the first three months of fiscal 2026 and 2025, the Company granted stock awards with respect to 52,992 and 35,856 shares of Company common stock, respectively, that were subject to the satisfaction of performance measurements or time-based requirements.

For the first three months of fiscal years 2026 and 2025, the Company used fair market value to determine the associated expense with stock awards.

During the first six months of fiscal 2026 and 2025, the Company granted stock awards with respect to 57,456 and 35,856 shares of Company common stock, respectively, that were subject to the satisfaction of performance measurements or time-based requirements.

For the first six months of fiscal years 2026 and 2025, the Company used fair market value to determine the associated expense with stock awards.

Incentive stock options granted under the 2020 Plan must have exercise prices that are not less than 100% of the fair market value of the Company’s common stock on the dates the stock options are granted.

Under the 2020 Plan, non-qualified stock options granted to participants will have exercise prices determined by the Compensation Committee of the Board.

The Company issued 69,264 and 48,240 options during the first three months of fiscal 2026 and 2025, respectively.

For the first three months of fiscal 2026, the Company used several assumptions which included an expected term of three years, volatility deviation of 43.08 %, and a risk-free rate of 3.63 % to determine the expense associated with options.

For the first three months of fiscal 2025, the Company used several assumptions which included an expected term of three years, volatility deviation of 40.34 % and a risk-free rate of 4.34 % to determine the expense associated with options.

Stock-based compensation income, including forfeitures, in connection with stock options and stock awards previously granted to employees was approximately $( 307,000 ) and $( 153,000 ) in the first quarter of 2026 and the first quarter of 2025, respectively.

As of April 4, 2026, there were 691,997 shares of Company common stock reserved and available for future grant under the 2020 Plan.

The following tables set forth the outstanding stock options for the period specified:

Three Months Ended

April 4, 2026

The Company issued 75,168 and 48,240 options during the first six months of fiscal 2026 and 2025, respectively.

For the first six months of fiscal 2026, the Company used several assumptions which included an expected term of three years, volatility deviation of 40.94 % and 43.08 %, and a risk-free rate of 4.14 % and 3.63 % to determine the expense associated with options.

For the first six months of fiscal 2025, the Company used several assumptions which included an expected term of three years, volatility deviation of 40.34 % and a risk-free rate of 4.34 % to determine the expense associated with options.

Stock-based compensation expense (income), including forfeitures, in connection with stock options and stock awards previously granted to employees was approximately $ 198,000 and $ 147,000 in the second quarter of 2026 and the second quarter of 2025, respectively, and was approximately $( 109,000 ) and $( 6,000 ) in the first six months of fiscal years 2026 and 2025, respectively.

As of July 4, 2026, there were 675,456 shares of Company common stock reserved and available for future grant under the 2020 Plan.

The following tables set forth the outstanding stock options for the periods specified:

Six Months Ended

January 3, 2026

Weighted Average Exercise Price

Average Exercise

Outstanding at beginning of period

3 unchanged sentences

Outstanding as of

April 4, 2026

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

April 4, 2026

Weighted Average Remaining Contractual Life

1 unchanged sentence

$ 18.55 - $ 28.69

The following table sets forth the outstanding stock awards for the period specified:

Three Months Ended

April 4, 2026

The following table sets forth the outstanding stock awards for the periods specified:

Six Months Ended

January 3, 2026

1 unchanged sentence

Outstanding at end of period

As of April 4, 2026, outstanding stock options and stock awards had an intrinsic value of $ 1,794,000 .

Note J – Share Repurchase Program

On April 30, 2025, the Board approved a share repurchase program authorizing the Company to repurchase up to 400,000 shares of the Company’s common stock over a five-year term expiring in April 2030.

As of July 4, 2026, outstanding stock options and stock awards had an intrinsic value of $ 3,285,000 .

Note K – Share Repurchase Program

On April 30, 2025, the Board of Directors of the Company approved a share repurchase program authorizing the Company to repurchase up to 400,000 shares of the Company’s common stock over a five-year term expiring in April 2030.

The Company’s share repurchase program does not obligate it to acquire the Company’s common stock at any specific cost per share.

Under this program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

Below is a summary of the Company’s share repurchases during the first quarter of 2026 under the share repurchase program.

Below is a summary of the Company’s share repurchases during the second quarter of 2026 under the share repurchase program.

Total Number of Shares Purchased

2 unchanged sentences

Maximum Number of Shares that may yet be Purchased Under the Plans or Programs

January 4, 2026 - February 1, 2026

February 2, 2026 - February 28, 2026

March 1, 2026 - April 4, 2026

Note K – Revenue Recognition

April 5, 2026 – May 2, 2026

May 3, 2026 – May 30, 2026

May 31, 2026 – July 4, 2026

Note L – Revenue Recognition

The Company’s revenues result from the sale of goods and services and reflect the consideration to which the Company expects to be entitled.

4 unchanged sentences

Revenues are recognized when products are shipped.

Customer volume rebates, product returns, discount and allowance are variable considerations and are recorded as a reduction of revenue in the same period that the related sales are recorded.

Customer volume rebates, product returns, discounts and allowances are variable considerations and are recorded as a reduction of revenue in the same period that the related sales are recorded.

The Company has reviewed the overall sales transactions for variable consideration and has determined that these costs are not material.

The Company has no future performance obligations and does not capitalize costs to obtain or fulfill contracts.

Note L – Income Taxes

Note M - Income Taxes

The Company files income tax returns in the U.S.

3 unchanged sentences

income tax examinations by foreign tax authorities for years prior to 2019.

There have been no significant changes to the value of unrecognized tax benefits during the three months ended April 4, 2026.

There have been no significant changes to the value of unrecognized tax benefits during the six months ended July 4, 2026.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”), which resulted in many tax extensions and other rule changes, including the following which we believe will have an effect on our tax provision in 2026:

4 unchanged sentences

The Company has elected to change its method of accounting for domestic research or experimental expenditures to the deduction method on a cut-off basis under §174A(a) of the Internal Revenue Code (“IRC”), pursuant to Section 7.02(3)(a) of Rev Proc 2025-28 and will continue to amortize research and development costs capitalized between 2022 and 2024 over a 5 or 15 year period for U.S and foreign §174 costs, respectively.

Note M – Retirement Benefit Plans

Note N - Retirement Benefit Plans

The Company has four non-contributory defined benefit pension plans covering most U.S.

3 unchanged sentences

The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements.

Significant disclosures relating to these benefit plans for the first quarter of fiscal years 2026 and 2025 are as follows:

Significant disclosures relating to these benefit plans for the second quarter and first six months of fiscal years 2026 and 2025 are as follows:

Pension Benefits

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Interest cost

2 unchanged sentences

( 1,100,704 )

( 2,214,137 )

( 2,160,640 )

Amortization of prior service cost

Amortization of the net loss

2 unchanged sentences

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Interest cost

5 unchanged sentences

In fiscal year 2026, the Company expects to make cash contributions to its qualified pension plans of approximately $ 2,800,000 and approximately $ 40,000 into its other postretirement plan.

As of April 4, 2026, the Company has contributed $ 578,000 to its pension plans and $ 7,000 to its postretirement plan in fiscal year 2026 and expects to make the remaining contributions as required during the remainder of the fiscal year.

As of July 4, 2026, the Company has contributed $ 1,184,000 to its pension plans and $ 13,000 to its postretirement plan in fiscal year 2026 and expects to make the remaining contributions as required during the remainder of the fiscal year.

The Company has a contributory savings plan under Section 401(k) of the IRC (the “401(k) Plan”) covering substantially all U.S.

non-union employees.

The 401(k) Plan allows participants to make voluntary contributions from their annual compensation on a pre-tax basis, subject to limitations under the Internal Revenue Code.

The 401(k) Plan allows participants to make voluntary contributions from their annual compensation on a pre-tax basis, subject to limitations under the IRC.

The 401(k) Plan provides for contributions by the Company at its discretion.

1 unchanged sentence

Three Months Ended

April 4, 2026

March 29, 2025

Six Months Ended

June 28, 2025

Regular matching contribution

2 unchanged sentences

Total contributions for the period

Note N – Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company.

Note O – Concentration of Risk

Note O - Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company.

Note P - Concentration of Risk

Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Company, as and when they become due.

1 unchanged sentence

The Company has established credit limits for customers and monitors their balances to mitigate the risk of loss.

As of April 4, 2026, there were significant concentrations of credit risk with 2 customers that had receivables representing greater than 10 % of our net accounts receivable.

As of July 4, 2026, there were significant concentrations of credit risk with 2 customers that had receivables representing greater than 10 % of our net accounts receivable.

As of January 3, 2026, there was one customer representing 13 % of the Company’s net accounts receivable.

3 unchanged sentences

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt under the Credit Agreement, which bears interest at variable rates based on term SOFR, plus an adjustment of ten basis points, plus an applicable margin of 1.37 5% to 2.12 5%, depending on the Company’s senior net leverage ratio.

Note P – Segment Information

The Company has one reportable segment, its Engineering Solutions Segment, and the Chief Executive Officer is the Company’s chief operating decision maker (CODM).

Note Q - Segment Information

The Company has one reportable segment, its Engineered Solutions Segment, and the Chief Executive Officer is the Company’s chief operating decision maker (CODM).

The CODM uses the following reported measures to assess performance and make decisions on resource allocation throughout the Company.

Engineered Solutions Segment

April 4, 2026

March 29, 2025

Three Months Ended

Six Months Ended

June 28, 2025

$ 121,498,295

$ 136,101,298

Material cost

3 unchanged sentences

( 71,561,763 )

( 3,645,315 )

( 3,507,414 )

( 6,706,780 )

( 7,522,727 )

Other variable and fixed overhead¹

1 unchanged sentence

( 13,242,419 )

( 30,915,239 )

( 25,557,721 )

Product development expense

1 unchanged sentence

( 1,031,716 )

( 2,078,000 )

( 2,140,902 )

Selling and administrative expenses

1 unchanged sentence

( 12,188,736 )

( 19,621,306 )

( 22,534,931 )

Operating Profit

1 unchanged sentence

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