What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-04 · 205 added, 85 removed, 425 unchanged (41% of the section changed)

33 unchanged sentences

Common stock, par value $ 0.01 , authorized 20,000,000 shares;

shares issued at March 31, 2026 and December 31, 2025, 11,115,779 ;

shares outstanding at March 31, 2026 and December 31, 2025, 10,326,247 and 10,135,410 , respectively

shares issued at June 30, 2026 and December 31, 2025, 11,115,779 ;

shares outstanding at June 30, 2026 and December 31, 2025, 10,376,305 and 10,135,410 , respectively

Paid-in capital 39,222 44,782

Retained earnings 179,736 175,124

Treasury stock - at cost, 789,532 and 980,369 common stock shares at March 31, 2026 and December 31, 2025, respectively

Treasury stock - at cost, 739,474 and 980,369 common stock shares at June 30, 2026 and December 31, 2025, respectively

( 19,292 ) ( 23,852 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Sales of goods $ 117,139 $ 129,071 $ 222,327 $ 215,619

7 unchanged sentences

Amortization expense 618 840 1,236 1,962

Operating income (loss) 2,045 ( 1,923 )

Operating income 6,151 7,678 8,196 5,755

Interest expense - net 891 1,490 1,742 2,633

Other income - net ( 191 ) ( 95 ) ( 408 ) ( 413 )

Income (loss) before income taxes 1,411 ( 2,748 )

Income tax benefit ( 81 ) ( 631 )

Net income (loss) 1,492 ( 2,117 )

Net loss attributable to noncontrolling interest ( 8 ) ( 7 )

Net income (loss) attributable to L.B.

Income before income taxes 5,451 6,283 6,862 3,535

Income tax expense 2,336 3,444 2,255 2,813

Net income 3,115 2,839 4,607 722

Net income (loss) attributable to noncontrolling interest 3 ( 46 ) ( 5 ) ( 53 )

Net income attributable to L.B.

Foster Company $ 3,112 $ 2,885 $ 4,612 $ 775

1 unchanged sentence

Foster shareholders:

Basic earnings (loss) per common share $ 0.15 $ ( 0.20 )

Diluted earnings (loss) per common share $ 0.14 $ ( 0.20 )

Basic earnings per common share $ 0.30 $ 0.28 $ 0.45 $ 0.07

Diluted earnings per common share $ 0.29 $ 0.27 $ 0.44 $ 0.07

Basic weighted average shares outstanding 10,343 10,439 10,271 10,489

5 unchanged sentences

Three Months Ended

Net income (loss) $ 1,492 $ ( 2,117 )

June 30, Six Months Ended

2026 2025 2026 2025

Net income $ 3,115 $ 2,839 $ 4,607 $ 722

Other comprehensive income, net of tax:

Foreign currency translation adjustment 359 1,823 ( 677 ) 2,042

Unrealized gain (loss) on cash flow hedges, net of tax expense of $ 0

Total comprehensive income (loss) 460 ( 2,280 )

Unrealized loss on cash flow hedges, net of tax expense of $ 0

( 22 ) ( 41 ) ( 18 ) ( 307 )

Total comprehensive income 3,452 4,621 3,912 2,457

Less comprehensive income attributable to noncontrolling interest:

Net loss attributable to noncontrolling interest ( 8 ) ( 7 )

Net gain (loss) attributable to noncontrolling interest 3 ( 46 ) ( 5 ) ( 53 )

Foreign currency translation adjustment 9 38 169 154

Amounts attributable to noncontrolling interest 12 ( 8 ) 164 101

Comprehensive income (loss) attributable to L.B.

Comprehensive income attributable to L.B.

Foster Company $ 3,440 $ 4,629 $ 3,748 $ 2,356

4 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 1,492 $ ( 2,117 )

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

Net income $ 4,607 $ 722

Adjustments to reconcile net income to cash used in operating activities:

Deferred income taxes 1,553 2,585

1 unchanged sentence

Amortization 1,236 1,962

Inventory and fixed asset exit costs (Note 2) 1,059 655

Equity in income of nonconsolidated investments — ( 54 )

11 unchanged sentences

Other long-term liabilities ( 1,990 ) 4,679

Net cash used in operating activities ( 10,438 ) ( 26,136 )

Net cash provided by (used in) operating activities 7,422 ( 15,734 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from the sale of property, plant, and equipment — 49

Capital expenditures on property, plant, and equipment ( 6,521 ) ( 5,248 )

3 unchanged sentences

Proceeds from debt 178,398 161,612

Debt issuance costs — ( 706 )

Treasury stock acquisitions ( 4,263 ) ( 8,384 )

Deferred payment for Skratch acquisition ( 403 ) ( 782 )

Net cash provided by financing activities 605 22,468

Effect of exchange rate changes on cash and cash equivalents ( 71 ) 197

Net (decrease) increase in cash and cash equivalents ( 357 ) 158

Net increase in cash and cash equivalents 1,435 1,732

Cash and cash equivalents at beginning of period 4,348 2,454

7 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Stock Paid-in

4 unchanged sentences

Interest Total Stockholders’

Balance, December 31, 2025 $ 111 $ 44,782 $ 175,124 $ ( 23,852 ) $ ( 20,889 ) $ 722 $ 175,998

Balance, March 31, 2026 $ 111 $ 39,507 $ 176,624 $ ( 20,541 ) $ ( 22,081 ) $ 874 $ 174,494

Net income — — 3,112 — — 3 3,115

Other comprehensive income, net of tax:

Foreign currency translation adjustment — — — — 350 9 359

Unrealized derivative loss on cash flow hedges — — — — ( 22 ) — ( 22 )

Issuance of 50,058 common shares, net of shares withheld for taxes

— ( 1,666 ) — 1,249 — — ( 417 )

Stock-based compensation — 1,381 — — — — 1,381

Balance, June 30, 2026 $ 111 $ 39,222 $ 179,736 $ ( 19,292 ) $ ( 21,753 ) $ 886 $ 178,910

Three Months Ended June 30, 2025

Stock Paid-in

Capital Retained

Earnings Treasury

Stock Accumulated Other

Comprehensive Loss Noncontrolling

Interest Total Stockholders’

Balance, March 31, 2025 $ 111 $ 41,823 $ 165,469 $ ( 14,736 ) $ ( 21,879 ) $ 807 $ 171,595

Net income (loss) — — 2,885 — — ( 46 ) 2,839

Other comprehensive income, net of tax:

Foreign currency translation adjustment — — — — 1,785 38 1,823

Unrealized derivative loss on cash flow hedges — — — — ( 41 ) — ( 41 )

Purchase of 108,020 common shares for treasury

— — — ( 2,162 ) — — ( 2,162 )

Other comprehensive loss, net of tax:

Issuance of 32,931 common shares, net of shares withheld for taxes

— ( 775 ) — 685 — — ( 90 )

Stock-based compensation — 1,277 — — — — 1,277

Balance, June 30, 2025 $ 111 $ 42,325 $ 168,354 $ ( 16,213 ) $ ( 20,135 ) $ 799 $ 175,241

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in thousands)

Six Months Ended June 30, 2026

Stock Paid-in

Capital Retained

Earnings Treasury

Stock Accumulated Other

Comprehensive Loss Noncontrolling

Interest Total Stockholders’

Balance, December 31, 2025 $ 111 $ 44,782 $ 175,124 $ ( 23,852 ) $ ( 20,889 ) $ 722 $ 175,998

Net income (loss) — — 4,612 — — ( 5 ) 4,607

Other comprehensive income, net of tax:

Foreign currency translation adjustment — — — — ( 846 ) 169 ( 677 )

Unrealized derivative gain on cash flow hedges — — — — 5 — 5

Unrealized derivative loss on cash flow hedges

— — — — ( 18 ) — ( 18 )

Issuance of 240,895 common shares, net of shares withheld for taxes

1 unchanged sentence

Stock-based compensation — 3,263 — — — — 3,263

Balance, March 31, 2026 $ 111 $ 39,507 $ 176,624 $ ( 20,541 ) $ ( 22,081 ) $ 874 $ 174,494

Three Months Ended March 31, 2025

Balance, June 30, 2026 $ 111 $ 39,222 $ 179,736 $ ( 19,292 ) $ ( 21,753 ) $ 886 $ 178,910

Six Months Ended June 30, 2025

Stock Paid-in

5 unchanged sentences

Balance, December 31, 2024 $ 111 $ 43,550 $ 167,579 $ ( 11,208 ) $ ( 21,716 ) $ 698 $ 179,014

Net loss — — ( 2,110 ) — — ( 7 ) ( 2,117 )

Net income (loss) — — 775 — — ( 53 ) 722

Other comprehensive income, net of tax:

1 unchanged sentence

Unrealized derivative loss on cash flow hedges

— — — — ( 307 ) — ( 307 )

Purchase of 276,931 common shares for treasury

3 unchanged sentences

Stock-based compensation — 2,111 — — — — 2,111

Balance, March 31, 2025 $ 111 $ 41,823 $ 165,469 $ ( 14,736 ) $ ( 21,879 ) $ 807 $ 171,595

Balance, June 30, 2025 $ 111 $ 42,325 $ 168,354 $ ( 16,213 ) $ ( 20,135 ) $ 799 $ 175,241

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

7 unchanged sentences

In the opinion of management, all estimates and adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

This Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes thereto included in L.B.

50 unchanged sentences

Amortization expense ( 335 ) ( 283 ) ( 618 ) ( 539 ) ( 301 ) ( 840 )

Segment operating income (loss) $ 4,820 $ 529 $ 5,349 $ 144 $ ( 444 ) $ ( 300 )

Segment operating income $ 2,989 $ 6,571 $ 9,560 $ 3,747 $ 6,766 $ 10,513

Reconciliation of segment operating income

Total segment operating income (loss) $ 5,349 $ ( 300 )

Total segment operating income $ 9,560 $ 10,513

Interest expense - net ( 891 ) ( 1,490 )

3 unchanged sentences

Corporate management stock-based compensation ( 906 ) ( 761 )

Income (loss) before income taxes $ 1,411 $ ( 2,748 )

Strategic initiatives costs ( 292 ) —

Income before income taxes $ 5,451 $ 6,283

(1) Purchased services costs generally include contractor services, insurance expenditures, rental expense, and legal services.

(2) General administrative costs generally include office supplies, utilities, advertising, bad debt expense, and any restructuring expenditures.

Six Months Ended

Rail, Technologies, and Services Infrastructure Solutions Total Rail, Technologies, and Services Infrastructure Solutions Total

Net sales $ 146,788 $ 112,906 $ 259,694 $ 129,988 $ 111,362 $ 241,350

Cost of sales ( 115,835 ) ( 87,289 ) ( 203,124 ) ( 102,827 ) ( 87,472 ) ( 190,299 )

Selling and administrative employment costs ( 15,530 ) ( 12,339 ) ( 27,869 ) ( 14,636 ) ( 11,466 ) ( 26,102 )

Purchased services (1)

( 3,502 ) ( 3,168 ) ( 6,670 ) ( 3,333 ) ( 2,631 ) ( 5,964 )

General administrative costs (2)

( 3,440 ) ( 2,446 ) ( 5,886 ) ( 3,942 ) ( 2,868 ) ( 6,810 )

Amortization expense ( 672 ) ( 564 ) ( 1,236 ) ( 1,359 ) ( 603 ) ( 1,962 )

Segment operating income $ 7,809 $ 7,100 $ 14,909 $ 3,891 $ 6,322 $ 10,213

Reconciliation of segment operating income

Total segment operating income $ 14,909 $ 10,213

Interest expense - net ( 1,742 ) ( 2,633 )

Other income - net 408 413

Public company costs ( 1,879 ) ( 2,471 )

Corporate executive management costs ( 2,227 ) ( 948 )

Corporate management stock-based compensation ( 2,315 ) ( 1,039 )

Strategic initiatives costs ( 292 ) —

Income before income taxes $ 6,862 $ 3,535

(1) Purchased services costs generally include contractor services, insurance expenditures, rental expense, and legal services.

(2) General administrative costs generally include office supplies, utilities, advertising, bad debt expense, and any restructuring expenditures.

On June 21, 2022, the Company acquired the stock of Skratch Enterprises Ltd.

for $ 7,402 , which was inclusive of deferred payments withheld by the Company of $ 1,228 , to be paid over five years or utilized to satisfy post-closing working capital adjustments or indemnity claims under the purchase agreement.

During the second quarters of 2026 and 2025, the Company made deferred acquisition payments of $ 403 and $ 782 , respectively.

Restructuring charges included in segment results are discussed further in Note 13 to the Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

Reconciliations of reportable depreciation and amortization and expenditures for long-lived assets to the Company’s consolidated totals are as follows for the periods presented:

7 unchanged sentences

$ 2,752 $ 3,561 $ 3,107 $ 2,673

Six Months Ended

Depreciation/Amortization Expenditures for Long-Lived Assets Depreciation/Amortization Expenditures for Long-Lived Assets

Rail, Technologies, and Services $ 1,370 $ 686 $ 2,081 $ 1,055

Infrastructure Solutions 3,397 4,536 3,443 3,495

Reportable segments total $ 4,767 $ 5,222 $ 5,524 $ 4,550

Corporate 880 1,299 1,010 698

Total $ 5,647 $ 6,521 $ 6,534 $ 5,248

The following table summarizes the Company's total assets by reportable segment for the following periods:

5 unchanged sentences

Total $ 334,155 $ 330,372

During the second quarter of 2025, the Company announced the discontinuation of its Automation and Materials Handling (“AMH”) product line which was reported in the Technology Services and Solutions business unit within the Rail segment.

AMH had net sales of $ 407 for the three months ended March 31, 2025.

The Company completed the remaining customer obligations in 2025, and all exit costs were incurred in the second quarter of 2025.

During the fourth quarter of 2025, the Company announced a restructuring program aligned with its strategy to reduce costs within the UK-based Technology Services and Solutions businesses within the Rail segment.

The restructuring action has been completed as of December 31, 2025.

The Company does not expect to incur additional material expenses associated with this program.

The following table sets forth a reconciliation of the beginning and ending restructuring liability balance for all programs through March 31, 2026:

Restructuring Liability

Balance as of December 31, 2025 $ 846

Cash paid ( 270 )

Balance as of March 31, 2026 $ 576

The following table summarizes the Company’s sales by major product and service line for the periods presented:

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Rail Products $ 34,569 $ 47,570 $ 75,848 $ 76,889

10 unchanged sentences

Net sales by the timing of the transfer of goods and services were as follows for the periods presented:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Rail, Technologies, and Services Infrastructure Solutions Total

2 unchanged sentences

Total net sales $ 72,012 $ 66,538 $ 138,550

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Rail, Technologies, and Services Infrastructure Solutions Total

2 unchanged sentences

Total net sales $ 75,973 $ 67,585 $ 143,558

Six Months Ended June 30, 2026

Rail, Technologies, and Services Infrastructure Solutions Total

Point in time $ 121,259 $ 72,055 $ 193,314

Over time 25,529 40,851 66,380

Total net sales $ 146,788 $ 112,906 $ 259,694

Six Months Ended June 30, 2025

Rail, Technologies, and Services Infrastructure Solutions Total

Point in time $ 111,098 $ 69,812 $ 180,910

Over time 18,890 41,550 60,440

Total net sales $ 129,988 $ 111,362 $ 241,350

The Company’s performance obligations under long-term agreements with its customers are generally satisfied over time.

Over time revenue is primarily comprised of transit infrastructure and technology services and solutions projects within the Rail segment, precast concrete buildings within the Precast Concrete Products division in the Infrastructure segment, and long-term bridge projects within the Steel Products division in the Infrastructure segment.

Revenue under these long-term agreements is generally recognized over time using an input measure based upon the proportion of actual costs incurred to estimated total project costs or an output method, specifically units delivered, based upon certain customer acceptance and delivery requirements.

Revenue under these long-term agreements is generally recognized over time

using an input measure based upon the proportion of actual costs incurred to estimated total project costs or an output method, specifically units delivered, based upon certain customer acceptance and delivery requirements.

The use of an input or output measure to recognize revenue is determined based on what is most appropriate given the nature of the work performed and terms of the associated agreement.

Accounting for these long-term agreements involves the use of various techniques to estimate total revenues and costs.

8 unchanged sentences

Changes in estimates are primarily attributed to updated considerations, including economic conditions and historic contract patterns, resulting in changes to anticipated revenue from existing contracts.

There were no such changes in actual or expected values during the three and six months ended June 30, 2026 .

During the three and six months ended June 30, 2025, reductions to net sales stemming from changes in actual and expected values of certain commercial contracts and settlements of such contracts were $ 1,647 .

The Company’s estimates related to these long-term agreements are further described in “Note 3.

2 unchanged sentences

Three Months Ended

March 31, Percentage of Total Net Sales

Three Months Ended March 31,

June 30, Percentage of Total Net Sales

Three Months Ended June 30,

2026 2025 2026 2025

2 unchanged sentences

Total over time sales $ 39,713 $ 36,200 28.7 % 25.2 %

Six Months Ended

June 30, Percentage of Total Net Sales

Six Months Ended June 30,

2026 2025 2026 2025

Over time input method $ 21,173 $ 14,627 8.2 % 6.1 %

Over time output method 45,207 45,813 17.4 19.0

Total over time sales $ 66,380 $ 60,440 25.6 % 25.1 %

The timing of revenue recognition, billings, and cash collections results in billed receivables, costs in excess of billings (included in “Contract assets - net”), and billings in excess of costs (contract liabilities), included in “Deferred revenue” within the Condensed Consolidated Balance Sheets.

4 unchanged sentences

Transfers from contract asset balance to accounts receivable ( 4,373 )

Balance as of March 31, 2026 $ 3,640

Balance as of June 30, 2026 $ 3,776

The following table sets forth the Company’s contract liabilities:

3 unchanged sentences

Increase in billings in excess of cost, excluding revenue recognized 1,443

Balance as of March 31, 2026

Balance as of June 30, 2026

The Company has established policies regarding allowance for credit losses associated with contract assets, which includes standalone reserve assessments for its long term, complex contracts as needed as well as detailed regular review and updates to contract margins, progress, and value.

1 unchanged sentence

Management also regularly reviews collection patterns and future expected collections and makes necessary revisions to allowance for credit losses related to contract assets.

As of March 31, 2026, the Company had approximately $ 209,573 of remaining performance obligations, which is also referred to as backlog.

Approximately 9.8 % of the March 31, 2026 backlog was related to projects that are anticipated to extend beyond March 31, 2027.

As of June 30, 2026, the Company had approximately $ 246,113 of remaining performance obligations, which is also referred to as backlog.

Approximately 5.8 % of the June 30, 2026 backlog was related to projects that are anticipated to extend beyond June 30, 2027.

Goodwill and Other Intangible Assets

3 unchanged sentences

Foreign currency translation impact ( 324 ) — ( 324 )

Balance as of March 31, 2026 $ 21,057 $ 11,676 $ 32,733

Balance as of June 30, 2026 $ 21,062 $ 11,676 $ 32,738

The Company performs goodwill impairment tests annually during the fourth quarter, and also performs interim goodwill impairment tests if it is determined that it is more likely than not that the fair value of a reporting unit is less than the carrying amount.

Qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying

amount, which includes the impacts of current economic conditions, including but not limited to concerns related to inflation, tariffs, labor markets, supply chains, and changes in trade policy.

Qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount, which includes the impacts of current economic conditions, including but not limited to concerns related to inflation, tariffs, labor markets, supply chains, and changes in trade policy.

However, these factors can be unpredictable and are subject to change.

No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of March 31, 2026.

No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of June 30, 2026.

However, future impairment charges could result if future projections diverge unfavorably from current expectations.

The following table sets forth the components of the Company’s intangible assets for the periods presented:

March 31, 2026

June 30, 2026

Weighted Average

21 unchanged sentences

Changes in reserves for uncollectible accounts are recorded as part of “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations and are recorded net of recoveries of previous write-offs.

During the three months ended March 31, 2026 and 2025, the Company recorded a net expense of $ 300 and $ 191 , respectively.

The changes in reserves for uncollectible accounts are net of recoveries of previous write-offs of $ 522 and $ 203 for the three months ended March 31, 2026 and 2025, respectively.

During the three months ended June 30, 2026 and 2025, the Company recorded a net expense of $ 168 and $ 327 , respectively, and a net expense of $ 468 and $ 518 for the six months ended June 30, 2026 and 2025, respectively.

The Company established the allowance for credit losses by calculating the amount to reserve based on the age of a given trade receivable and considering historical collection patterns, bad debt expense experience, expected future trends of collections, current and expected market conditions, and any other relevant subjective adjustments as needed.

7 unchanged sentences

Recoveries of previous write-offs ( 549 )

Balance as of March 31, 2026 $ 1,917

Balance as of June 30, 2026 $ 2,085

Inventory is valued at average cost or net realizable value, whichever is lower.

25 unchanged sentences

(a) Maximum Gross Leverage Ratio, defined as the Company’s Consolidated Indebtedness divided by the Company’s Consolidated EBITDA, which must not exceed (i) 3.50 to 1.00 for all testing periods other than during an Acquisition Period, and (ii) 4.00 to 1.00 for all testing periods occurring during an Acquisition Period, and (b) Minimum Consolidated Fixed Charge Coverage Ratio, defined as the Company’s Consolidated EBITDA divided by the Company’s Fixed Charges, which must be more than 1.10 to 1.00.

As of March 31, 2026, the Company was in compliance with the covenants in the Credit Agreement, as amended, and had outstanding letters of credit of approximately $ 832 .

As of June 30, 2026, the Company was in compliance with the covenants in the Credit Agreement, as amended, and had outstanding letters of credit of approximately $ 827 .

Earnings Per Common Share

(Share amounts in thousands)

The following table sets forth the computation of basic and diluted earnings (loss) per common share for the periods indicated:

The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated:

Three Months Ended

Numerator for basic and diluted earnings (loss) per common share:

Net income (loss) attributable to L.B.

June 30, Six Months Ended

2026 2025 2026 2025

Numerator for basic and diluted earnings per common share:

Net income attributable to L.B.

Foster Company $ 3,112 $ 2,885 $ 4,612 $ 775

Weighted average shares outstanding 10,343 10,439 10,271 10,489

Denominator for basic earnings (loss) per common share 10,197 10,540

Denominator for basic earnings per common share 10,343 10,439 10,271 10,489

Effect of dilutive securities:

1 unchanged sentence

Dilutive potential common shares 265 414 326 456

Denominator for diluted earnings (loss) per common share - adjusted weighted average shares outstanding 10,584 10,540

Basic earnings (loss) per common share $ 0.15 $ ( 0.20 )

Diluted earnings (loss) per common share $ 0.14 $ ( 0.20 )

Diluted earnings per share for the three months ended March 31, 2026 excluded 53 antidilutive shares.

For the three months ended March 31, 2026 and 2025, the Company recorded an income tax benefit of $ 81 and $ 631 , respectively, on pre-tax income (loss) of $ 1,411 and ($ 2,748 ), respectively, for an effective income tax rate of ( 5.7 %) and 23.0 %, respectively.

The Company's effective income tax rate for the three months ended March 31, 2026 differed from the federal statutory rate of 21% primarily due to the discrete impact of excess tax benefits related to share-based compensation, offset by the impact of pre-tax losses in the United Kingdom, for which no income tax benefit was recognized due to a valuation allowance.

Denominator for diluted earnings per common share - adjusted weighted average shares outstanding 10,608 10,853 10,597 10,945

Basic earnings per common share $ 0.30 $ 0.28 $ 0.45 $ 0.07

Diluted earnings per common share $ 0.29 $ 0.27 $ 0.44 $ 0.07

Diluted earnings per share for the three and six months ended June 30, 2026 excluded 3 and 28 antidilutive shares, respectively.

For the three months ended June 30, 2026 and 2025, the Company recorded an income tax expense of $ 2,336 and $ 3,444 , respectively, on pre-tax income of $ 5,451 and $ 6,283 , respectively, for an effective income tax rate of 42.9 % and 54.8 %, respectively.

For the six months ended June 30, 2026 and 2025, the Company recorded an income tax expense of $ 2,255 and $ 2,813 , respectively, on pre-tax income of $ 6,862 and $ 3,535 , respectively, for an effective income tax rate of 32.9 % and 79.6 %, respectively.

The Company's effective income tax rate for the three and six months ended June 30, 2026 differed from the federal statutory rate of 21% primarily due to the discrete impact of excess tax benefits related to share-based compensation, offset by the impact of pre-tax losses in the United Kingdom, for which no income tax benefit was recognized due to a valuation allowance.

Changes in pre-tax income projections, combined with the seasonal nature of our businesses, also impact the effective income tax rate each quarter.

Stock-Based Compensation

The Company recorded stock-based compensation expense of $ 1,882 and $ 834 for the three months ended March 31, 2026 and 2025, respectively, related to restricted stock awards, restricted stock units, and performance-based stock and stock unit awards.

As of March 31, 2026, unrecognized compensation expense for awards that the Company expects to vest approximated $ 7,140 .

The Company recorded stock-based compensation expense of $ 1,381 and $ 1,277 for the three months ended June 30, 2026 and 2025, respectively, and $ 3,263 and $ 2,111 for the six months ended June 30, 2026 and 2025, respectively, related to restricted stock awards, restricted stock units, and performance-based stock and stock unit awards.

As of June 30, 2026, unrecognized compensation expense for awards that the Company expects to vest approximated $ 6,847 .

The Company will recognize this unrecognized compensation expense over a weighted average 1.9 years through May 22, 2028.

On May 22, 2025, the shareholders approved the new 2025 Equity and Incentive Compensation Plan (the “Equity and Incentive Compensation Plan”).

As of March 31, 2026, the Company had stock awards issued pursuant to the Equity and Incentive Compensation Plan and its predecessor, the 2006 Omnibus Incentive Compensation Plan (the “Omnibus Plan”).

No stock options are outstanding under the Omnibus Plan or the Equity and Incentive Compensation Plan and, as such, there was no stock-based compensation expense related to stock options recorded for the three months ended March 31, 2026 and 2025.

As of June 30, 2026, the Company had stock awards issued pursuant to the Equity and Incentive Compensation Plan and its predecessor, the 2006 Omnibus Incentive Compensation Plan (the “Omnibus Plan”).

Non-Employee Director Restricted Stock Awards and Fully-Vested Stock

5 unchanged sentences

Under the Equity and Incentive Compensation Plan and Omnibus Plan, the Company grants certain employees restricted stock, restricted stock units, and performance-based stock and stock units.

The forfeitable restricted stock awards granted generally time-vest ratably over a three-year period, unless indicated otherwise by the underlying restricted stock award agreement.

The forfeitable restricted stock awards and restricted stock units granted generally time-vest ratably over a three-year period, unless indicated otherwise by the underlying restricted stock award and restricted stock unit agreement.

Performance stock unit awards are offered annually under separate three-year long-term incentive programs, unless indicated otherwise by the underlying performance unit award agreement.

Performance stock units are subject to forfeiture and will be converted into common stock based upon the Company’s performance relative to performance measures and conversion multiples as defined in the underlying program.

For restricted stock units granted in 2026, participants who meet the definition of normal retirement, as defined in the 2026 Restricted Stock Unit Agreement filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q, the awards continue to vest without the requirement of future service;

For restricted stock units granted in 2026, participants who meet the definition of normal retirement, as defined in the 2026 Restricted Stock Unit Agreement filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, the awards continue to vest without the requirement of future service;

for these awards, the Company recognizes compensation expense over the period from grant date through the date the employee becomes retirement eligible.

During the three months ended March 31, 2026, the Company recognized $ 675 of stock-based compensation expense associated with the accelerated expense recognition for retirement-eligible employees.

During the six months ended June 30, 2026, the Company recognized $ 497 of stock-based compensation expense associated with the accelerated expense recognition for retirement-eligible employees.

The following table summarizes the restricted stock, restricted stock units, and performance-based stock and stock unit activity for the periods presented:

6 unchanged sentences

Cancelled and forfeited — — ( 86,833 ) 10.06

Outstanding as of March 31, 2026 131,921 56,127 275,560 $ 24.63

*Includes stock units for which the performance obligation has been met and are only subject to time vesting requirements prior to distribution.

Outstanding as of June 30, 2026 82,855 59,920 281,248 $ 26.26

*Includes stock units for which the performance obligation has been met and are subject only to time vesting requirements prior to distribution.

Retirement Plans

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

United States $ 916 $ 745 $ 1,662 $ 1,458

Canada 33 33 90 103

United Kingdom 275 333 549 604

8 unchanged sentences

Legal actions are subject to inherent uncertainties, and future events could change management’s assessment of the probability or estimated amount of potential losses from pending or threatened legal actions.

Based on available information, it is the opinion of management that the ultimate resolution of pending or threatened legal actions, both individually and in the aggregate, will not result in losses having a material adverse effect on the Company’s financial position or liquidity as of March 31, 2026.

If management believes that, based on available information, it is at least reasonably possible that a material loss (or additional material loss in excess of any accrual) will be incurred in connection with any legal actions, the Company discloses an estimate of the possible loss or range of loss, either individually or in the aggregate, as appropriate, if such an estimate can be made, or discloses that an estimate cannot be made.

Based on the Company’s assessment as of March 31, 2026, no such disclosures were considered necessary.

Based on the Company’s assessment as of June 30, 2026, no such disclosures were considered necessary.

Environmental and Legal Proceedings

15 unchanged sentences

Based upon information currently available, management does not believe that the Company’s alleged PRP status regarding the Portland Harbor Superfund Site or other compliance with the present environmental protection laws will have a material adverse effect on the financial condition, results of operations, cash flows, competitive position, or capital expenditures of the Company.

As more information develops and the allocation process is completed, and given the resolution of factors like those described above, an unfavorable resolution could have a material adverse effect.

As of March 31, 2026 and December 31, 2025, the Company maintained environmental reserves approximating $ 1,495 for all of its environmental liabilities.

As more information develops and the allocation process is completed, and given the resolution of factors such as those described above, an unfavorable resolution could have a material adverse effect.

As of June 30, 2026 and December 31, 2025, the Company maintained environmental reserves approximating $ 1,495 for all of its environmental liabilities.

Restructuring Costs

For the three and six months ended June 30, 2025, AMH had net sales of $ 813 and $ 1,220 , respectively.

The Company incurred a total of $ 1,351 in exit costs associated with the AMH Exit, which included $ 655 in inventory and fixed asset write-downs, $ 507 in personnel expenses, and $ 189 in other exit costs.

Exit costs of $ 1,085 were recorded in “Cost of goods sold” and $ 266 were recorded in “Selling and administrative expenses” within our Rail segment.

The Company completed the remaining customer obligations in 2025 and all exit costs were incurred in the second quarter of 2025.

During the fourth quarter of 2025, the Company announced a restructuring program aligned with its strategy to reduce costs in the UK-based Technology Services and Solutions business unit within the Rail segment.

The restructuring action has been completed as of December 31, 2025.

The Company does not expect to incur additional material expenses associated with this program.

During the second quarter of 2026, the Company announced the discontinuation of certain product lines within our Tew Engineering business (the “Tew Exit”) which was reported in the Technology Services and Solutions business unit within the Rail segment.

The decision to exit was due to the Company's initiatives to scale back unprofitable product lines in the United Kingdom.

The Company expects to complete any remaining customer obligations by the end of 2027.

The product lines had net sales of $ 292 and $ 1,189 for the three months ended June 30, 2026 and 2025, respectively, and $ 1,252 and $ 1,834 for the six months ended June 30, 2026 and 2025, respectively.

The Company recognized a total of $ 2,270 in exit costs associated with the Tew Exit, which included $ 1,059 in inventory write-downs, $ 1,159 in personnel expenses, $ 52 in other exit costs during the quarter.

Exit costs of $ 2,084 were recorded in “Cost of goods sold” and $ 186 were recorded in “Selling and administrative expenses.” The Company does not expect to incur additional material expenses associated with this program.

In addition to the Tew Exit costs, the Company incurred corporate costs recorded in “Selling and administrative expenses”of $ 292 related to the execution of strategic initiatives.

The following table sets forth a reconciliation of the beginning and ending restructuring liability balance for all programs through June 30, 2026:

Restructuring Liability

Balance as of December 31, 2025 $ 846

Personnel and other exit costs 1,211

Cash paid ( 407 )

Balance as of June 30, 2026 $ 1,650

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