What changed in this filing

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Item 1. Financial Statements

2026-06-05 compared with 2026-03-06 · 116 added, 53 removed, 437 unchanged (28% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Sales and service fees

5 unchanged sentences

Investment income, net

Other income (expense), net

Other expense, net

(Loss) income before income taxes

8 unchanged sentences

Three Months Ended

Six Months Ended

Net (loss) income

50 unchanged sentences

no par value, $ .10 stated value per share, 12,500,000 shares authorized;

6,637,605 and 6,569,224 shares issued and 6,446,454 and 6,402,396 shares outstanding, as of January 31, 2026 and October 31, 2025, respectively

6,675,629 and 6,569,224 shares issued and 6,484,478 and 6,402,396 shares outstanding, as of April 30, 2026 and October 31, 2025, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Cash flows from operating activities:

18 unchanged sentences

Increase (decrease) in accrued income tax

Increase (decrease) in accrued tax liability

Net change in deferred tax assets and liabilities

21 unchanged sentences

(In thousands, except shares outstanding)

Three Months Ended January 31, 2026 and 2025

Three Months Ended April 30, 2026 and 2025

Comprehensive

Income (Loss)

Balances, October 31, 2024

Balances, January 31, 2025

Net income (loss)

2 unchanged sentences

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, April 30, 2025

Balances, January 31, 2026

Net income (loss)

Other comprehensive income (loss)

Deferred income tax valuation allowances

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, April 30, 2026

Six Months Ended April 30, 2026 and 2025

Comprehensive

Income (Loss)

Balances, October 31, 2024

3 unchanged sentences

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, January 31, 2026

Balances, April 30, 2025

Balances, October 31, 2025

Net income (loss)

Other comprehensive income (loss)

Deferred income tax valuation allowances

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, April 30, 2026

The accompanying notes are an integral part of the condensed consolidated financial statements.

8 unchanged sentences

We also provide machine tool components, automation integration equipment and solutions for job shops, software options, control upgrades, accessories and replacement parts for our products, as well as customer service, training, and applications support.

The condensed consolidated financial information as of January 31, 2026, and for the three months ended January 31, 2026, and January 31, 2025, is unaudited.

The condensed consolidated financial information as of April 30, 2026, and for the three and six months ended April 30, 2026, and April 30, 2025, is unaudited.

However, in our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations, changes in shareholders’ equity and cash flows for and at the end of the interim periods.

41 unchanged sentences

We also assess on a quarterly basis whether there have been adverse developments regarding the risk of a counterparty default.

We had forward contracts outstanding as of January 31, 2026, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from February 2026 through January 2027 .

We had forward contracts outstanding as of April 30, 2026, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from May 2026 through April 2027 .

The contract amounts, expressed at forward rates in U.S.

dollars at January 31, 2026, were $ 7.5 million for Euros, $ 4.0 million for Pounds Sterling, and $ 19.1 million for New Taiwan Dollars.

At January 31, 2026, we had $ 0.7 million of realized loss, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive loss.

dollars at April 30, 2026, were $ 8.5 million for Euros, $ 5.9 million for Pounds Sterling, and $ 21.7 million for New Taiwan Dollars.

At April 30, 2026, we had $ 0.9 million of realized loss, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive loss.

Included in this amount was $ 0.8 million of unrealized loss, net of tax, related to cash flow hedge instruments that remain subject to currency fluctuation risk.

The majority of these deferred gains will be recorded as an adjustment to Cost of sales and service in periods through January 2027, when the corresponding inventory that is the subject of the related hedge contracts is sold, as described above.

The majority of these deferred losses will be recorded as an adjustment to Cost of sales and service in periods through April 2027, when the corresponding inventory that is the subject of the related hedge contracts is sold, as described above.

We are also exposed to foreign currency exchange risk related to our investment in net assets in foreign countries.

4 unchanged sentences

This forward contract matures in November 2026 .

As of January 31, 2026, we had a realized gain of $ 1.0 million and an unrealized loss of $ 0.1 million, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss related to this forward contract.

As of April 30, 2026, we had a realized gain of $ 1.0 million and an unrealized loss of less than $ 0.1 million, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss related to this forward contract.

Derivatives Not Designated as Hedging Instruments

1 unchanged sentence

These derivative instruments are not designated as hedges under FASB guidance and, as a result, changes in their fair value are reported currently in Other income (expense), net in the Condensed Consolidated Statements of Operations consistent with the transaction gain or loss on the related receivables and payables denominated in foreign currencies.

We had forward contracts outstanding as of January 31, 2026, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from February 2026 through September 2026 .

We had forward contracts outstanding as of April 30, 2026, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from May 2026 through February 2027 .

The contract amounts, expressed at forward rates in U.S.

dollars at January 31, 2026, totaled $ 56.3 million.

dollars at April 30, 2026, totaled $ 55.5 million.

Fair Value of Derivative Instruments

We recognize the fair value of derivative instruments as assets and liabilities on a gross basis on our Condensed Consolidated Balance Sheets.

As of January 31, 2026, and October 31, 2025, all derivative instruments were recorded at fair value on our Condensed Consolidated Balance Sheets as follows (in thousands):

January 31, 2026

As of April 30, 2026, and October 31, 2025, all derivative instruments were recorded at fair value on our Condensed Consolidated Balance Sheets as follows (in thousands):

April 30, 2026

October 31, 2025

16 unchanged sentences

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Operations

Derivative instruments had the following effects on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity, and Condensed Consolidated Statements of Operations, net of tax, during the three months ended January 31, 2026 and 2025 (in thousands):

Location of Gain

19 unchanged sentences

– Net investment

We did no t recognize any gains or losses as a result of hedges deemed ineffective for either of the three months ended January 31, 2026 or 2025.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the three months ended January 31, 2026 and 2025, on derivative instruments not designated as hedging instruments (in thousands):

We did no t recognize any gains or losses as a result of hedges deemed ineffective for either of the three months ended April 30, 2026 or 2025.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the three months ended April 30, 2026 and 2025, on derivative instruments not designated as hedging instruments (in thousands):

Location of Gain

6 unchanged sentences

Foreign exchange forward contracts

Other income (expense), net

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the three months ended January 31, 2026 (in thousands):

Other expense, net

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the three months ended April 30, 2026 (in thousands):

Foreign Currency

Balance, January 31, 2026

Other comprehensive income (loss) before reclassifications

Reclassifications

Deferred income tax valuation allowances

Balance, April 30, 2026

Derivative instruments had the following effects on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity, and Condensed Consolidated Statements of Operations, net of tax, during the six months ended April 30, 2026 and 2025 (in thousands):

Location of Gain

Amount of Gain

Amount of Gain (Loss)

(Loss) Reclassified

Recognized in Other

Comprehensive

Income (Loss)

Six Months Ended

Designated as Hedging Instruments:

(Effective Portion)

Foreign exchange forward contracts

– Intercompany sales/purchases

Cost of sales and service

Foreign exchange forward contract

– Net investment

We did not recognize any gains or losses as a result of hedges deemed ineffective for either of the six months ended April 30, 2026 or 2025.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the six months ended April 30, 2026 and 2025, on derivative instruments not designated as hedging instruments (in thousands):

Location of Gain

(Loss) Recognized

Amount of Gain (Loss)

in Operations

Recognized in Operations

Six Months Ended

Not Designated as Hedging Instruments:

Foreign exchange forward contracts

Other expense, net

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the six months ended April 30, 2026 (in thousands):

Foreign Currency

Balance, October 31, 2025

2 unchanged sentences

Deferred income tax valuation allowances

Balance, January 31, 2026

Balance, April 30, 2026

EQUITY INCENTIVE PLAN

14 unchanged sentences

The market value of a share of our common stock, for purposes of the 2016 Equity Plan, is the closing sale price as reported by the Nasdaq Global Select Market on the date in question or, if not a trading day, on the last preceding trading date.

On March 12, 2026, the Compensation Committee granted a total of 38,024 shares of time-based restricted stock to our non-employee directors.

The restricted shares vest in full one year from the date of grant provided the recipient remains on the board of directors through that date.

The grant date fair value of the restricted shares was based on the closing sales price of our common stock on the grant date, which was $ 14.725 per share.

On January 6, 2026, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and performance stock units (“PSUs”), which will be payable in shares of our common stock if earned and vested.

15 unchanged sentences

The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $ 16.65 per share.

A reconciliation of our restricted stock and PSU activity and related information for the three-month period ended January 31, 2026 is as follows:

A reconciliation of our restricted stock and PSU activity and related information for the six-month period ended April 30, 2026 is as follows:

Weighted Average Grant

6 unchanged sentences

Shares withheld

Unvested at January 31, 2026

During the first quarter of each of fiscal years 2026 and 2025, we recorded approximately $ 0.6 million of stock-based compensation expense related to grants under the 2016 Equity Plan.

As of January 31, 2026, there was an estimated $ 4.6 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal year 2029.

Unvested at April 30, 2026

During the first six months of each of fiscal years 2026 and 2025, we recorded approximately $ 1.1 million of stock-based compensation expense related to grants under the 2016 Equity Plan.

As of April 30, 2026, there was an estimated $ 3.6 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal year 2029.

EARNINGS (LOSS) PER SHARE

2 unchanged sentences

Three Months Ended

Six Months Ended

Net (loss) income

4 unchanged sentences

(Loss) income per share

For the three months ended January 31, 2026 and January 31, 2025, there were an immaterial number of stock options and contingently issuable securities that were excluded from the diluted loss per share calculation because they were anti-dilutive due to the net loss in the periods.

For the three and six months ended April 30, 2026 and April 30, 2025, there were an immaterial number of stock options and contingently issuable securities that were excluded from the diluted loss per share calculation because they were anti-dilutive due to the net loss in those periods.

ACCOUNTS RECEIVABLE

Accounts receivable is net of provision for credit losses of $ 1.2 million as of each of January 31, 2026, and October 31, 2025.

Accounts receivable is net of provision for credit losses of $ 1.3 million and $ 1.2 million as of April 30, 2026, and October 31, 2025, respectively.

Inventories, priced at the lower of cost (first-in, first-out method) or net realizable value, are summarized below (in thousands):

9 unchanged sentences

We record a right-of-use asset and lease liability on our Condensed Consolidated Balance Sheets for all leases that, at the commencement date, have a lease term of more than 12 months and are classified as leases under ASC 842.

We recorded total operating lease expense of $ 1.3 million for each of the three months ended January 31, 2026 and 2025, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations.

We recorded total operating lease expense of $ 1.3 million and $ 1.4 million for the three months ended April 30, 2026 and 2025, respectively, and $ 2.6 million and $ 2.7 million for the six months ended April 30, 2026 and 2025, respectively, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations.

Operating lease expense includes short-term leases and variable lease payments, which are immaterial.

There were no lease costs capitalized on the Condensed Consolidated Balance Sheets as of January 31, 2026.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the three months ended January 31, 2026 and 2025 (in thousands):

Three Months Ended January 31,

There were no lease costs capitalized on the Condensed Consolidated Balance Sheets as of April 30, 2026.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the three and six months ended April 30, 2026 and 2025 (in thousands):

Three Months Ended April 30,

Six Months Ended April 30,

Operating cash flow information:

2 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of January 31, 2026 (in thousands):

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of April 30, 2026 (in thousands):

Remainder of 2026

2 unchanged sentences

Present value of operating lease liabilities

As of January 31, 2026, the weighted-average remaining term of our lease portfolio was approximately 3.2 years and the weighted-average discount rate was approximately 3.4 %.

As of April 30, 2026, the weighted-average remaining term of our lease portfolio was approximately 3.0 years and the weighted-average discount rate was approximately 3.4 %.

SEGMENT INFORMATION

9 unchanged sentences

While the CODM receives some additional detailed financial information related to operating expenses, consolidated selling, general and administrative expenses is the significant expense he uses to manage operations.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The following table sets forth sales and service fees by product group and services for the three months ended January 31, 2026 and 2025 (in thousands):

Three Months Ended January 31,

The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets.

The following table sets forth sales and service fees by product group and services for the three and six months ended April 30, 2026 and 2025 (in thousands):

Three Months Ended April 30,

Six Months Ended April 30,

Computerized Machine Tools

5 unchanged sentences

We follow FASB guidance for accounting for guarantees (codified in ASC 460).

As of January 31, 2026, we had four outstanding third party payment guarantees totaling approximately $ 0.4 million.

As of April 30, 2026, we had four outstanding third party payment guarantees totaling approximately $ 0.3 million.

The terms of these guarantees are consistent with the underlying customer financing terms.

8 unchanged sentences

A reconciliation of the changes in our warranty estimated liability is as follows (in thousands):

Three Months Ended

Six Months Ended

Balance, beginning of period

3 unchanged sentences

Balance, end of period

The year-over-year decrease in our warranty estimated liability was primarily due to a lower sales volume of machines.

The year-over-year increase in our warranty estimated liability was primarily due to increased shipments of 5-axis and larger, higher- performance vertical milling machines.

DEBT AGREEMENTS

23 unchanged sentences

The maximum consolidated leverage ratio covenant effectively prohibits us from borrowing any amounts under the 2026 Credit Agreement when our consolidated EBITDA for the most recently completed measurement period is negative.

As of the date of this report, the most recently completed measurement period was our first fiscal quarter ended January 31, 2026, during which our consolidated EBITDA was negative.

As of the date of this report, the most recently completed measurement period was our second fiscal quarter ended April 30, 2026, during which our consolidated EBITDA was negative.

In order to borrow in compliance with the maximum consolidated leverage ratio covenant set forth above, we are effectively prohibited from borrowing under the 2026 Credit Agreement until we have positive consolidated EBITDA for our most recently completed four fiscal quarters.

As of January 31, 2026, our credit facilities consisted of a € 1.5 million revolving credit facility in Germany and the $ 20.0 million secured revolving credit and letter of credit facility.

We had no debt or borrowings outstanding under any of our credit facilities as of January 31, 2026.

As of April 30, 2026, our credit facilities consisted of a € 1.5 million revolving credit facility in Germany and the $ 20.0 million secured revolving credit and letter of credit facility.

We had no debt or borrowings outstanding under any of our credit facilities as of April 30, 2026.

Our provision for income taxes and effective tax rate is affected by the geographic composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates, and other events that are not consistent from period to period, such as changes in income tax laws.

We recorded income tax expense during the first three months of fiscal year 2026 of $ 0.5 million, compared to $ 2.0 million for the corresponding prior year period.

Our effective tax rate for the first three months of fiscal year 2026 was ( 15 %), compared to ( 90 %) in the corresponding prior year period.

We recorded income tax expense during the first six months of fiscal year 2026 of $ 1.2 million, compared to $ 2.6 million for the corresponding prior year period.

Our effective tax rate for the first six months of fiscal year 2026 was ( 27 %), compared to ( 44 %) in the corresponding prior year period.

The year-over-year change was primarily due to a $ 1.2 million valuation allowance recorded during the first quarter of 2025 on our Italian deferred tax assets and changes in geographic mix of income and loss that includes jurisdictions with differing tax rates.

A full valuation allowance has been recorded against our Italian, U.S., and Chinese deferred tax assets as of January 31, 2026, based on our conclusion that the deferred tax assets were not more likely than not to be realized.

A full valuation allowance has been recorded against our Italian, U.S., and Chinese deferred tax assets as of April 30, 2026, based on our conclusion that the deferred tax assets were not more likely than not to be realized.

The Budget Reconciliation Act (H.R.

1) (“OBBB”) was signed into law on July 4, 2025.

The OBBB did not have a material impact on our condensed consolidated financial statements and related disclosures as of and for the three months ended January 31, 2026.

The OBBB did not have a material impact on our condensed consolidated financial statements and related disclosures as of and for the three and six months ended April 30, 2026.

While further evaluation is ongoing, the OBBB is not expected to have a material impact on our consolidated financial statements and related disclosures in future years.

federal and state income tax returns, as well as tax returns in several foreign jurisdictions.

Currently our manufacturing subsidiary in Italy is under tax inspection for fiscal year October 31, 2021.

We are currently under audit by the Internal Revenue Service (IRS) for our federal income tax return for fiscal year 2024 and our manufacturing subsidiary in Italy is under tax inspection for the fiscal year ended October 31, 2021.

FINANCIAL INSTRUMENTS

6 unchanged sentences

The carrying amount of short-term debt approximates fair value due to the variable rate of the interest and the short-term nature of the instrument.

In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of January 31, 2026, and October 31, 2025 (in thousands):

January 31, 2026

In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of April 30, 2026, and October 31, 2025 (in thousands):

April 30, 2026

October 31, 2025

January 31, 2026

April 30, 2026

October 31, 2025

5 unchanged sentences

We have derivative financial instruments in the form of foreign currency forward exchange contracts as described in Note 3 of Notes to Condensed Consolidated Financial Statements.

dollar equivalent notional amounts of these contracts were $ 92.6 million and $ 91.0 million at January 31, 2026, and October 31, 2025, respectively.

dollar equivalent notional amounts of these contracts were $ 97.4 million and $ 91.0 million at April 30, 2026, and October 31, 2025, respectively.

The fair value of our foreign currency forward exchange contracts and the related currency positions are subject to offsetting market risk resulting from foreign currency exchange rate volatility.

22 unchanged sentences

(1) similar risk assessment for cash flow hedges, (2) hedging forecasted interest payments on choose-your-rate debt instruments, (3) cash flow hedges of nonfinancial forecasted transactions, (4) net written options as hedging instruments, and (5) foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge).

This ASU is effective for fiscal year 2028.

This ASU is effective for fiscal year 2028 annual reporting.

Early adoption is permitted.

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