ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: The following discussion is intended to highlight significant changes in the financial position and results of operations of The Eastern Company (together with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) for the three months ended April 4, 2026.
+Added: The following discussion is intended to highlight significant changes in the financial position and results of operations of The Eastern Company (together with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) for the three and six months ended July 4, 2026.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended January 3, 2026 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026, as amended on March 19, 2026 (the “2025 Form 10-K”).
The Company’s fiscal year is a 52- or 53-week fiscal year ending on the Saturday nearest to December 31.
−Removed: References in this Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2026 (this “Form 10-Q”) to 2025, 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.
+Added: References in this Quarterly Report on Form 10-Q for the quarterly period ended July 4, 2026 (this “Form 10-Q”) to 2025, 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.
−Removed: References to the first quarter of 2025, the first fiscal quarter of 2025 or the three months ended March 29, 2025 mean the 13-week period from December 29, 2024 to March 29, 2025.
−Removed: References to the first quarter of 2026, the first fiscal quarter of 2026 or the three months ended April 4, 2026, mean the 13-week period from January 4, 2026 to April 4, 2026.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
Safe Harbor for Forward-Looking Statements
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delays in delivery of our products to our customers;
−Removed: the impact of global economic conditions and interest rates, and more specifically conditions in the automotive, construction, aerospace, energy, oil and gas, transportation, electronic, and general industrial markets, including the impact, length and degree of economic downturns on the customers and markets we serve and demand for our products, reductions in production levels, the availability, terms and cost of financing, including borrowings under credit arrangements or agreements, and the impact of market conditions on pension plan funded status;
+Added: the impact of global economic conditions and interest rates, and more specifically conditions in the automotive, construction, aerospace, defense energy, oil and gas, transportation, electronic, and general industrial markets, including the impact, length and degree of economic downturns on the customers and markets we serve and demand for our products, reductions in production levels, the availability, terms and cost of financing, including borrowings under credit arrangements or agreements, and the impact of market conditions on pension plan funded status;
restrictions on operating flexibility imposed by the agreement governing our credit facility;
4 unchanged sentences
the inability to attain expected benefits from acquisitions or dispositions or the inability to effectively integrate acquired businesses and achieve expected synergies;
+Added: The success of the Sinecera and Sungear transaction will depend on a number of uncertain factors, including our decisions regarding the fair value of the assets acquired and the bargain purchase gain recorded on the transaction, which could materially and adversely affect our financial condition, results of operations and future prospects.
costs and liabilities associated with environmental compliance;
12 unchanged sentences
Recent Developments
+Added: 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.
+Added: The transaction establishes a fourth operating platform for Eastern, complementing its existing portfolio of Eberhard Manufacturing, Velvac, and Big 3 Precision.
+Added: These acquisitions align with the Company's strategic priorities to expand its portfolio of operating platforms, add engineered products with attractive end-market exposure, and deploy capital into businesses that benefit from Eastern’s decentralized, holding-company model.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) became law.
2 unchanged sentences
We are currently assessing the potential impact of the OBBBA on our business and financial results.
−Removed: For the three months ended April 4, 2026, we incurred approximately $3.1 million in tariff and tariff-related expenses, $2.9 million of which have been mitigated through price increases.
+Added: For the three months ended July 4, 2026, we incurred approximately $1.9 million in tariff and tariff-related expenses, $1.8 million of which have been mitigated through price increases.
On February 20, 2026, the U.S.
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The Company is in the process of submitting refund claims to the CBP.
−Removed: The amount and timing of any potential refund remain uncertain, and, as of April 4, 2026, we have not recorded a benefit for potential refunds of IEEPA tariffs paid.
+Added: The amount and timing of any potential refund remain uncertain, and, as of July 4, 2026, we have not recorded a material benefit for potential refunds of IEEPA tariffs paid.
In response to the U.S.
−Removed: Supreme Court’s decision, the presidential administration implemented a tariff surcharge pursuant to Section 122 of the Trade Act of 1974, establishing a minimum 10% duty on imports, subject to certain exemptions.
+Added: Supreme Court’s decision, the presidential administration implemented a tariff surcharge pursuant to Section 122 of the Trade Act of 1974, establishing a minimum 10% duty on imports, subject to certain exemptions, for 150 days.
The tariff environment remains dynamic, and it is likely that additional developments will occur over the next several months, particularly as the U.S.
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(“Big 3”) subsidiary.
−Removed: We expect the acquisition will enable the Company to become more competitive with respect to cost and quality of the products sold by Big 3.
−Removed: In the third quarter of 2024, we determined that the Big 3 Mold business met the criteria to be held for sale and that the assets held for sale qualified for discontinued operations.
+Added: We expect the acquisitions will enable the Company to become more competitive with respect to cost and quality of the products sold by Big 3.
+Added: In the third quarter of 2024, we determined that the business of Big 3 Precision Mold Services, Inc.
+Added: (“Big 3 Mold”) met the criteria to be held for sale and that the assets held for sale qualified for discontinued operations.
As such, the financial results of the Big 3 Mold business are reflected in our unaudited condensed consolidated statements of operations as discontinued operations for all periods presented.
1 unchanged sentence
On April 30, 2025, the Company sold the equipment, workforce and customer list of the ISBM division of Big 3 Mold.
+Added: The other divisions of Big 3 Mold have been reclassified to continuing operations.
The following analysis excludes discontinued operations.
−Removed: Net sales for the first quarter of 2026 decreased 6% to $59.7 million from $63.3 million in the corresponding period in 2025.
−Removed: Sales decreased in the first quarter of 2026 primarily due to decreased shipments resulting from lower order volume of returnable transport packaging products of $4.9 million offset by increased sales of truck mirror assemblies of $1.1 million.
−Removed: Our backlog as of April 4, 2026 decreased $3.7 million, or 8%, to $82.2 million from $85.9 million as of March 29, 2025.
−Removed: Net sales of existing products decreased 10.7% for the first quarter of 2026 compared to the corresponding period in 2025.
−Removed: Price increases and new products increased net sales by 5.0% in the first quarter of 2026 compared to the corresponding period in 2025.
−Removed: New products included various truck mirror and latch assemblies.
−Removed: Cost of products sold decreased $1.4 million, or 3%, for the first quarter of 2026 due to lower sales volume.
−Removed: Additionally, the Company paid tariff costs on China-sourced products of approximately $3.1 million in the first quarter of 2026, compared to $0.6 million in the first quarter of 2025.
−Removed: A majority of tariffs on China-sourced products have been recovered through price increases.
−Removed: Gross margin as a percentage of sales was 20.0% for the first quarter of 2026 compared to 22.4% for the first quarter of 2025.
−Removed: This decrease was due to lower sales volume, pricing pressures on that volume and labor inefficiencies.
−Removed: Product development expenses decreased $0.1 million for the first quarter of 2026 compared to the corresponding period in 2025.
−Removed: As a percentage of net sales, product development costs were 1.7% and 1.8% for the first quarter of 2026 and 2025, respectively, as we continue to invest in new products at our businesses.
−Removed: Selling and administrative expenses decreased $0.3 million, or 2.8%, for the first quarter of 2026 compared to the corresponding period in 2025 due to $0.2 million of lower compensation and related charges and $0.3 million of lower commission charges offset by 0.1 million of additional legal and professional expenses.
−Removed: Interest expense decreased less than $0.1 million for the first quarter of 2026 compared to the corresponding period in 2025 due to lower principal balances.
−Removed: Other expenses, net decreased $0.2 million for the first quarter of 2026 compared to the corresponding period in 2025.
−Removed: The decrease in the first quarter of 2026 was the result of lower pension non-service expense.
−Removed: Net income for the first quarter of fiscal 2026 was $0.6 million, or $0.11 per diluted share, compared to net income of $1.9 million, or $0.31 per diluted share, for the comparable period in 2025.
+Added: Net sales for the second quarter of 2026 decreased 12% to $61.8 million from $70.2 million for the corresponding period in 2025.
+Added: The decrease in sales was due to lower shipments of truck mirror assemblies, returnable transport packaging and latch and handle assemblies of $5.7 million, $3.4 million, $0.9 million, respectively, partially offset by $1.7 million in aerospace and defense sales from the acquisition of Sungear and Crown Precision.
+Added: Net sales for the first six months of 2026 decreased 11% to $121.5 million from $136.1 million for the corresponding period in 2025.
+Added: Sales decreased in the first six months of 2026 due to lower shipments of returnable transport packaging, truck mirror assemblies and latch and handle assemblies of $10.9 million, $4.5 million, $0.8 million, respectively, partially offset by $1.7 million in aerospace and defense sales from the acquisition of Sungear and Crown Precision.
+Added: Our backlog as of July 4, 2026 increased $39.0 million, or 45%, to $126.2 million from $87.1 million as of June 28, 2025, driven by acquired aerospace and defense orders of $19.0 million, increased orders for truck mirror assemblies of $11.7 million, returnable transport packaging products of $4.7 million, latch and handle assemblies of $3.6 million.
+Added: Net sales of existing products decreased 16.0% for the second quarter of 2026 and 12.0% for the first six months of 2026 compared to the corresponding periods in 2025.
+Added: New products increased net sales by 1.8% in the second quarter of 2026 and 2.7% in the first six months of 2026 compared to the corresponding periods in 2025.
+Added: New product sales included various latch and handle assemblies.
+Added: Cost of products sold decreased $4.7 million for the second quarter of 2026 and $7.8 million for the first six months of 2026 compared to the corresponding period in 2025.
+Added: These decreases were due to lower shipment volume, partially offset by increased cost of sales on acquired aerospace and defense shipments.
+Added: Additionally, the Company paid tariff costs on China-sourced products of approximately $1.9 million in the second quarter of 2026 and $5.0 million in the first six months of 2026, compared to $2.4 million in the second quarter of 2025 and $3.0 million in the first six months of 2025.
+Added: Most tariffs on China-sourced products have been recovered through price increases.
+Added: Gross margin as a percentage of sales was 20.6% for the second quarter of 2026 and 20.3% for the first six months of 2026 compared to 23.3% and 23.1%, respectively, for the corresponding periods in 2025.
+Added: Product development expenses remained consistent with the second quarter of 2025 and decreased less than $0.1 million for the first six months of 2026 compared to the corresponding periods in 2025.
+Added: As a percentage of net sales, product development costs were 1.7% and 1.6% in the first six months of 2026 and 2025, respectively, as we continue to invest in new products at our businesses.
+Added: Selling and administrative expenses decreased $2.1 million, or 17.5%, for the second quarter of 2026 compared to the corresponding period in 2025 due to $1.9 million of lower restructuring charges, lower personnel costs of $0.1 million, lower amortization of $0.1 million and other expenses of $0.4 million, partially offset by higher computer expenses of $0.4 million.
+Added: Selling, general and administrative expenses decreased $2.9 million, or 12.9% for the first six months of 2026 due to $1.9 million of lower restructuring charges, lower personnel costs of $0.5 million, lower amortization of $0.2 million, lower commission expenses of $0.4 million and other expenses of $0.6 million, partially offset by higher legal expenses of $0.3 million and higher computer expenses of $0.4 million.
+Added: Interest expense decreased $0.1 million for the second quarter of 2026 and $0.2 million for the first six months of 2026 compared to the corresponding periods in 2025 due to lower principal balances, offset by higher interest rates.
+Added: Other income increased $6.4 million for the second quarter of 2026 and $6.6 million for the first six months of 2026 compared to the corresponding periods in 2025.
+Added: The increase for the second quarter and for the first six months of 2026 are the result of $6.5 million of bargain purchase gain recorded on a recent acquisition, offset by $0.2 million of transaction costs incurred to complete that acquisition.
+Added: Net income for the second quarter of fiscal 2026 was $5.6 million, or $0.94 per diluted share, compared to net income of $2.0 million, or $0.33 per diluted share, for the comparable period in 2025.
+Added: For the first six months of 2026, net income was $6.3 million, or $1.04 per diluted share, compared to $4.2 million, or $0.69 per diluted share, for the comparable period in 2025.
A more detailed analysis of the Company’s results of operations and financial condition follows.
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Three Months Ended
−Removed: April 4, 2026
−Removed: March 29, 2025
+Added: Six Months Ended
+Added: June 28, 2025
+Added: June 28, 2025
Cost of products sold
2 unchanged sentences
Operating Profit
−Removed: The following table shows the change in net sales and operating profit for the first quarter of 2026 compared to the first quarter of 2025 (dollars in thousands):
−Removed: April 4, 2026
+Added: The following table shows the change in sales and operating profit for the second quarter and first six months of 2026 compared to the second quarter and first six months of 2025 (dollars in thousands):
Operating Profit
Liquidity and Sources of Capital
−Removed: The Company generated $3.5 million of cash from operations during the first three months of fiscal 2026 compared to using $1.9 million during the first three months of fiscal 2025.
−Removed: Cash flow from operations in the first three months of 2026 increased due to consumption of inventories held at the end of the prior year and lower accounts payable disbursements offset by lower customer receivable collections.
−Removed: Purchases of capital equipment were $0.9 million and $0.8 million for the first three months of 2026 and 2025, respectively.
−Removed: As of April 3, 2026, there were approximately $0.1 million of outstanding commitments for capital expenditures.
+Added: The Company generated $12.0 million of cash from operations during the first six months of fiscal 2026 compared to generating $1.9 million during the first six months of fiscal 2025.
+Added: Cash flow from operations in the first six months of 2026 increased due to timing of vendor payments partially offset by timing of customer receivable collections and the exclusion of the non-cash bargain purchase gain.
+Added: Purchases of capital equipment were $1.5 million and $1.6 million for the first six months of 2026 and 2025, respectively.
+Added: As of July 4, 2026, there were approximately $0.1 million of outstanding commitments for capital expenditures.
The following table shows key financial ratios at the end of each specified period:
−Removed: April 4, 2026
−Removed: March 29, 2025
+Added: June 28, 2025
Fiscal Year 2025
Current Ratio
−Removed: Average days' sales in accounts receivables
+Added: Average days' sales in accounts receivable
Inventory Turnover
1 unchanged sentence
The following table shows important liquidity measures as of the balance sheet date for each specified period or for the period, as applicable (in millions):
−Removed: April 4, 2026
−Removed: March 29, 2025
+Added: June 28, 2025
Fiscal Year 2025
+Added: Cash and cash equivalents
- Held in the United States
1 unchanged sentence
Working capital
−Removed: Net cash provided by (used in) operating activities
+Added: Net cash (used) provided by operating activities
Change in working capital impact on net cash provided by (used in) operating activities
−Removed: Net cash used in investing activities
−Removed: Net cash used in financing activities
−Removed: Inventories of $53.1 million as of April 4, 2026 decreased by $3.2 million, or 5.7%, when compared to $56.3 million at January 3, 2026 and increased $2.3 million, or 4.2%, when compared to $55.4 million at March 29, 2025.
−Removed: Accounts receivable, less allowances, were $32.6 million at April 4, 2026, as compared to $30.1 million at January 3, 2026 and $33.5 million at March 29, 2025.
−Removed: On October 28, 2025, the Company entered into a credit agreement with the lenders from time to time party thereto, Citizens Bank, N.A., as the administrative agent, as an LC issuer, and as the swing line lender (the “Citizens Credit Agreement”).
−Removed: The Citizens Credit Agreement replaces the Company’s prior credit facility with TD Bank, N.A.
−Removed: (“TD Bank”), which was repaid using borrowings under the Citizens Credit Agreement and terminated on October 28, 2025.
−Removed: See Note H, Debt, for additional information regarding the terms of the prior credit facility with TD Bank.
−Removed: The Citizens Credit Agreement establishes a new $100 million five-year senior secured revolving credit facility and provides for the extension of credit to the Company in the form of revolving loans, swing line loans and letters of credit, at any time and from time to time during the term of the Citizens Credit Agreement.
−Removed: See Note H, Debt, for additional information regarding the terms of the Citizens Credit Agreement, including repayment terms, interest rates, and applicable loan covenants.
−Removed: Under the terms of the Citizens Credit Agreement, the Company is subject to restrictive covenants that limit our ability to, among other things, incur additional indebtedness, pay dividends, or make other distributions, and consolidate, merge, sell or otherwise dispose of assets, as well as financial covenants that require us to maintain a maximum senior net leverage ratio and a minimum interest coverage ratio.
+Added: Net cash (used in) provided by investing activities
+Added: Net cash provided by (used in) financing activities
+Added: Inventories of $66.0 million at July 4, 2026 increased by $9.6 million, or 17.1%, when compared to $56.3 million at January 3, 2026 and increased $11.8 million, or 21.9%, when compared to $54.1 million at June 28, 2025.
+Added: Accounts receivable, less allowances, were $36.8 million at July 4, 2026, as compared to $30.1 million at January 3, 2026 and $40.2 million at June 28, 2025.
+Added: On October 28, 2025, the Company entered into a credit agreement with the lenders from time to time party thereto, Citizens Bank, N.A., as the administrative agent, as an LC issuer, and as the swing line lender (the “Credit Agreement”).
+Added: The Credit Agreement replaces the Company’s prior credit facility with TD Bank, N.A., which was repaid using borrowings under the Credit Agreement and terminated on October 28, 2025..
+Added: The Credit Agreement established a $100 million five-year senior secured revolving credit facility and provides for the extension of credit to the Company in the form of revolving loans, swing line loans and letters of credit, at any time and from time to time during the term of the Credit Agreement.
+Added: See Note I, Debt, for additional information regarding the terms of the Credit Agreement, including repayment terms, interest rates, and applicable loan covenants.
+Added: Under the terms of the Credit Agreement, the Company is subject to restrictive covenants that limit our ability to, among other things, incur additional indebtedness, pay dividends, or make other distributions, and consolidate, merge, sell or otherwise dispose of assets, as well as financial covenants that require us to maintain a maximum senior net leverage ratio and a minimum interest coverage ratio.
These covenants may limit how we conduct our business, and in the event of certain defaults, our repayment obligations may be accelerated.
−Removed: The Company was in compliance with all its covenants under the Citizens Credit Agreement at all times from entry into the Citizens Credit Agreement through the date of filing this Form 10-Q.
−Removed: The Company has $67 million available on its line of credit under the Citizens Credit Agreement as of the date of filing this Form 10-Q.
−Removed: Cash, cash flow from operating activities and funds available under the revolving credit portion of the Credit Agreement are expected to be sufficient to cover future foreseeable working capital requirements in the short-term (i.e., the next 12 months from April 4, 2026) and separately in the long-term (i.e., beyond the next 12 months).
+Added: 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.
+Added: 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.
+Added: Cash, cash flow from operating activities and funds available under the revolving credit portion of the Credit Agreement are expected to be sufficient to cover future foreseeable working capital requirements in the short-term (i.e., the next 12 months from July 4, 2026) and separately in the long-term (i.e., beyond the next 12 months).
However, the Company cannot provide any assurances of the availability of future financing or the terms on which it might be available.
−Removed: In addition, the interest rate on borrowings under the Credit Agreement varies based on our senior net leverage ratio, and the Credit Agreement requires us to maintain a senior net leverage ratio not to exceed 3.50 to 1 and a fixed charge coverage ratio to be not less than 1.25 to 1.
−Removed: A decrease in earnings due to the impact of current economic conditions and inflationary pressures or the resulting harm to the financial condition of our customers, or an increase in indebtedness incurred to offset such a decrease in earnings, would have a negative impact on our senior net leverage ratio and our fixed charge coverage ratio, which in turn would increase the cost of borrowing under the Credit Agreement and could cause us to fail to comply with the covenants under our Credit Agreement.
+Added: In addition, the interest rate on borrowings under the Credit Agreement varies based on our senior net leverage ratio, and the Credit Agreement requires us to maintain a senior net leverage ratio not to exceed 3.50 to 1 and an interest coverage ratio to be not less than 3.00 to 1.
+Added: A decrease in earnings due to the impact of economic conditions and inflationary pressures or the resulting harm to the financial condition of our customers, or an increase in indebtedness incurred to offset such a decrease in earnings, would have a negative impact on our senior net leverage ratio and our interest coverage ratio, which in turn would increase the cost of borrowing under the Credit Agreement and could cause us to fail to comply with the covenants under the Credit Agreement.
In addition to funding capital requirements, we may use available cash to pay down our indebtedness, to make investments, which may include investments in publicly traded securities, or to make acquisitions that we believe will complement or expand our existing businesses.
−Removed: As of the end of the first quarter of 2026, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
+Added: As of the end of the second quarter of 2026, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Estimates
−Removed: The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S.
−Removed: GAAP”) requires management to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses.
+Added: The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses.
For a full description of our critical accounting estimates, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of the 2025 Form 10-K.
1 unchanged sentence
Non-GAAP Financial Measures
−Removed: The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S.
−Removed: To supplement the condensed consolidated financial statements prepared in accordance with U.S.
−Removed: GAAP, we have presented Adjusted Net Income from Continuing Operations, Adjusted Earnings Per Share from Continuing Operations, Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA, which are considered non-GAAP financial measures.
+Added: The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with GAAP.
+Added: To supplement the condensed consolidated financial statements prepared in accordance with GAAP, we have presented Adjusted Net Income from Continuing Operations, Adjusted Earnings Per Share from Continuing Operations, and Adjusted EBITDA from Continuing Operations, which are considered non-GAAP financial measures.
The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way.
−Removed: These measures are not substitutes for their comparable U.S.
−Removed: GAAP financial measures, such as net income from continuing operations, diluted earnings per share from continuing operations, net (loss) income from discontinued operations, net income (loss) or other measures prescribed by U.S.
−Removed: GAAP, and there are limitations to using non-GAAP financial measures.
+Added: These measures are not substitutes for their comparable GAAP financial measures, such as net income from continuing operations, diluted earnings per share from continuing operations, net (loss) income from discontinued operations, net income (loss) or other measures prescribed by GAAP, and there are limitations to using non-GAAP financial measures.
Adjusted Net Income from Continuing Operations is defined as net income from continuing operations excluding, when incurred, gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs.
+Added: This measure also excludes credit agreement refinancing expenses, when applicable, because we do not believe these expenses are reflective of our ongoing operations.
Adjusted Net Income from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis across periods by removing the impact of certain items that management believes do not directly reflect our underlying operating performance.
Adjusted Earnings Per Share from Continuing Operations is defined as earnings per share from continuing operations excluding, when incurred, certain per share gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs.
−Removed: We believe that Adjusted Earnings Per Share from Continuing Operations provides important comparability of underlying operational results, allowing investors and management to access operating performance on a consistent basis from period to period.
+Added: This measure also excludes credit agreement refinancing expenses, when applicable, because we do not believe these expenses are reflective of our ongoing operations.
+Added: We believe that Adjusted Earnings Per Share from Continuing Operations provides important comparability of underlying operational results, allowing investors and management to assess operating performance on a consistent basis from period to period.
Adjusted EBITDA from Continuing Operations is defined as net income from continuing operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses.
−Removed: Adjusted EBITDA from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.
−Removed: Adjusted EBITDA from Discontinued Operations is defined as net income from discontinued operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses.
−Removed: Adjusted EBITDA from Discontinued Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.
−Removed: Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses.
−Removed: Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.
+Added: This measure also excludes credit agreement refinancing expenses, when applicable, because we do not believe these expenses are reflective of our ongoing operations.
+Added: Adjusted EBITDA from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believe do not directly reflect our underlying operations.
Management uses such measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources.
−Removed: These financial measures should not be considered in isolation from, or as a replacement for, U.S.
−Removed: GAAP financial measures.
−Removed: We believe that presenting non-GAAP financial measures in addition to U.S.
−Removed: GAAP financial measures provides investors greater transparency to the information used by our management for its financial and operational decision-making.
−Removed: We further believe that providing this information better enables our investors to understand our operating performance and to evaluate the methodology used by management to evaluate and measure such performance.
+Added: These financial measures should not be considered in isolation from, or as a replacement for, GAAP financial measures.
+Added: We believe that presenting non-GAAP financial measures in addition to GAAP financial measures provides investors greater transparency to the information used by our management for its financial and operational decision-making.
+Added: We further believe that providing this information enables our investors to better understand our operating performance and to evaluate the methodology used by management to evaluate and measure such performance.
Reconciliation of Non-GAAP Measures
Adjusted Net Income from Continuing Operations and Adjusted Earnings per Share from Continuing Operations Calculation
−Removed: For the Three Months ended April 4, 2026 and March 29, 2025
+Added: For the Three and Six Months ended July 4, 2026 and June 28, 2025
+Added: ($000's, except for per share data)
Three Months Ended
−Removed: April 4, 2026
−Removed: March 29, 2025
+Added: Six Months Ended
+Added: June 28, 2025
+Added: June 28, 2025
Net income from continuing operations as reported per generally accepted accounting principles (GAAP)
1 unchanged sentence
Restructuring (a)
+Added: Bargain purchase gain
+Added: Acquisition related transaction costs
+Added: Acquired Inventory Step up adjustment
Non-GAAP tax impact of adjustments (1)
6 unchanged sentences
Adjusted EBITDA Calculation
−Removed: For the Three Months ended April 4, 2026 and March 29, 2025
−Removed: ($000's, except for per share data)
+Added: For the Three and Six Months ended July 4, 2026 and June 28, 2025
Three Months Ended
−Removed: April 4, 2026
−Removed: March 29, 2025
+Added: Six Months Ended
+Added: June 28, 2025
+Added: June 28, 2025
Net income from continuing operations as reported per generally accepted accounting principles (GAAP)
3 unchanged sentences
Restructuring (a)
+Added: Bargain purchase gain
+Added: Acquisition related transaction costs
+Added: Acquired Inventory Step up Adjustment
Adjusted EBITDA from continuing operations (non-GAAP)
−Removed: Net income from discontinued operations as reported per generally accepted accounting principles (GAAP)
−Removed: Interest expense
−Removed: Provision for income taxes
−Removed: Depreciation and amortization
−Removed: Adjusted EBITDA from discontinued operations (non-GAAP)
−Removed: Net income as reported per generally accepted accounting principles (GAAP)
−Removed: Interest expense
−Removed: Provision for income taxes
−Removed: Depreciation and amortization
−Removed: Restructuring (a)
−Removed: Total Adjusted EBITDA
(a) consists of personnel related and facility costs
2 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.