What changed in this filing

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Item 1. Financial Statements

2026-08-12 compared with 2026-05-13 · 218 added, 154 removed, 528 unchanged (41% of the section changed)

15 unchanged sentences

Other Assets 64,862 67,592

Intangible Assets, Net (Note 1)

Intangible Assets, Net (Note s 1 and 2 )

353,932 350,376

Goodwill (Note 1)

Goodwill (Note s 1 and 2 )

660,907 555,621

14 unchanged sentences

507,456 371,372

Long-Term Deferred Income Taxes 63,378 62,479

Deferred Income Taxes 64,052 62,479

Other Long-Term Liabilities 59,876 59,089

17 unchanged sentences

Condensed Consolidated Statement of Income

Three Months Ended

2026 March 29,

Three Months Ended Six Months Ended

2026 June 28,

(In thousands, except per share amounts)

12 unchanged sentences

Provision for Income Taxes (Note 4)

13,182 9,822 23,324 17,650

Net Income 32,847 26,639 58,668 51,076

10 unchanged sentences

Condensed Consolidated Statement of Comprehensive Income

Three Months Ended

2026 March 29,

Three Months Ended Six Months Ended

2026 June 28,

(In thousands)

3 unchanged sentences

Pension and other post-retirement liability adjustments, net (net of tax (benefit) provision of $( 2 ), $ 2 , $( 4 ), and $ 3 )

( 3 ) 7 ( 8 ) 11

Other comprehensive items ( 3,765 ) 25,045 ( 7,256 ) 35,058

5 unchanged sentences

Condensed Consolidated Statement of Cash Flows

Three Months Ended

2026 March 29,

Six Months Ended

2026 June 28,

(In thousands)

18 unchanged sentences

Investing Activities

Acquisition holdback payment ( Note 2 )

Acquisitions, net of cash acquired (Note 2)

( 171,768 ) —

Purchases of property, plant, and equipment ( 14,205 ) ( 7,804 )

Proceeds from sale of property, plant, and equipment 439 166

Other investing activities 441 698

Net cash used in investing activities ( 185,093 ) ( 6,940 )

Financing Activities

Proceeds from issuance of long-term obligations

Repayment of short- and long-term obligations ( 19,129 ) ( 22,563 )

Proceeds from issuance of long-term obligations (Note 5)

190,903 8,000

Repayment of long-term obligations ( 49,214 ) ( 56,930 )

Tax withholding payments related to stock-based compensation ( 4,924 ) ( 6,056 )

3 unchanged sentences

( 1,100 ) ( 825 )

Net cash used in financing activities

( 20,050 ) ( 23,085 )

Payment of debt issuance costs ( 27 ) —

Net cash provided by (used in) financing activities 127,379 ( 61,476 )

Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash ( 2,769 ) 6,341

Decrease in Cash, Cash Equivalents, and Restricted Cash

( 2,864 ) ( 2,141 )

Increase in Cash, Cash Equivalents, and Restricted Cash 14,943 1,242

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 122,681 95,946

4 unchanged sentences

Condensed Consolidated Statement of Stockholders' Equity

Three Months Ended April 4, 2026

Three Months Ended July 4, 2026

(In thousands, except share and per share amounts) Common

5 unchanged sentences

Shares Amount Shares Amount

Balance at January 3, 2026 14,624,159 $ 146 $ 138,844 $ 945,641 2,835,165 $ ( 69,473 ) $ ( 35,349 ) $ 11,258 $ 991,067

Balance at April 4, 2026 14,624,159 $ 146 $ 136,360 $ 966,899 2,815,702 $ ( 68,996 ) $ ( 38,805 ) $ 10,545 $ 1,006,149

Net income — — — 32,468 — — — 379 32,847

2 unchanged sentences

Activity under stock plans — — 2,863 — ( 645 ) 16 — — 2,879

Dividends paid to noncontrolling interest

Dividend paid to noncontrolling interest — — — — — — — ( 110 ) ( 110 )

Other comprehensive items — — — — — — ( 3,746 ) ( 19 ) ( 3,765 )

Balance at July 4, 2026 14,624,159 $ 146 $ 139,223 $ 995,116 2,815,057 $ ( 68,980 ) $ ( 42,551 ) $ 10,795 $ 1,033,749

Six Months Ended July 4, 2026

(In thousands, except share and per share amounts) Common

Stock Capital in

Excess of Par Value Retained Earnings Treasury

Stock Accumulated

Comprehensive Items Noncontrolling Interests Total

Stockholders' Equity

Shares Amount Shares Amount

Balance at January 3, 2026 14,624,159 $ 146 $ 138,844 $ 945,641 2,835,165 $ ( 69,473 ) $ ( 35,349 ) $ 11,258 $ 991,067

Net income — — — 57,977 — — — 691 58,668

Dividends declared – Common Stock, $ 0.72 per share

— — — ( 8,502 ) — — — — ( 8,502 )

Activity under stock plans — — 379 — ( 20,108 ) 493 — — 872

Dividends paid to noncontrolling interest — — — — — — — ( 1,100 ) ( 1,100 )

Other comprehensive items — — — — — — ( 7,202 ) ( 54 ) ( 7,256 )

Balance at April 4, 2026 14,624,159 $ 146 $ 136,360 $ 966,899 2,815,702 $ ( 68,996 ) $ ( 38,805 ) $ 10,545 $ 1,006,149

Three Months Ended March 29, 2025

Balance at July 4, 2026 14,624,159 $ 146 $ 139,223 $ 995,116 2,815,057 $ ( 68,980 ) $ ( 42,551 ) $ 10,795 $ 1,033,749

Three Months Ended June 28, 2025

(In thousands, except share and per share amounts) Common

5 unchanged sentences

Shares Amount Shares Amount

Balance at December 28, 2024 14,624,159 $ 146 $ 130,180 $ 859,693 2,878,080 $ ( 70,524 ) $ ( 72,368 ) $ 11,001 $ 858,128

Balance at March 29, 2025 14,624,159 $ 146 $ 128,272 $ 879,752 2,848,300 $ ( 69,795 ) $ ( 62,424 ) $ 10,619 $ 886,570

Net income — — — 26,159 — — — 480 26,639

2 unchanged sentences

Activity under stock plans — — 3,007 — ( 1,454 ) 36 — — 3,043

Other comprehensive items — — — — — — 24,871 174 25,045

Balance at June 28, 2025 14,624,159 $ 146 $ 131,279 $ 901,907 2,846,846 $ ( 69,759 ) $ ( 37,553 ) $ 11,273 $ 937,293

Six Months Ended June 28, 2025

(In thousands, except share and per share amounts) Common

Stock Capital in

Excess of Par Value Retained Earnings Treasury

Stock Accumulated

Comprehensive Items Noncontrolling Interests Total

Stockholders' Equity

Shares Amount Shares Amount

Balance at December 28, 2024 14,624,159 $ 146 $ 130,180 $ 859,693 2,878,080 $ ( 70,524 ) $ ( 72,368 ) $ 11,001 $ 858,128

Net income — — — 50,222 — — — 854 51,076

Dividends declared – Common Stock, $ 0.68 per share

— — — ( 8,008 ) — — — — ( 8,008 )

Activity under stock plans — — 1,099 — ( 31,234 ) 765 — — 1,864

Dividend paid to noncontrolling interest — — — — — — — ( 825 ) ( 825 )

Other comprehensive items — — — — — — 34,815 243 35,058

Balance at March 29, 2025 14,624,159 $ 146 $ 128,272 $ 879,752 2,848,300 $ ( 69,795 ) $ ( 62,424 ) $ 10,619 $ 886,570

Balance at June 28, 2025 14,624,159

$ 146 $ 131,279 $ 901,907 2,846,846 $ ( 69,759 ) $ ( 37,553 ) $ 11,273 $ 937,293

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

7 unchanged sentences

Interim Financial Statements

The interim condensed consolidated financial statements and related notes presented have been prepared by the Company, are unaudited, and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position at April 4, 2026, its results of operations, comprehensive income, cash flows and stockholders' equity for the three-month periods ended April 4, 2026 and March 29, 2025.

The interim condensed consolidated financial statements and related notes presented have been prepared by the Company, are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position at July 4, 2026, its results of operations, comprehensive income, and stockholders' equity for the three- and six-month periods ended July 4, 2026 and June 28, 2025, and its cash flows for the six-month periods ended July 4, 2026 and June 28, 2025.

Interim results are not necessarily indicative of results for a full year or for any other interim period.

7 unchanged sentences

Note 1 to the consolidated financial statements in the Annual Report describes the significant accounting estimates and policies used in preparation of the consolidated financial statements.

There have been no material changes in the Company’s significant accounting policies during the three months ended April 4, 2026.

There have been no material changes in the Company’s significant accounting policies during the six months ended July 4, 2026.

Supplemental Cash Flow Information

Three Months Ended

(In thousands) April 4,

2026 March 29,

Six Months Ended

(In thousands) July 4,

2026 June 28,

Cash Paid for Interest $ 9,459 $ 6,993

1 unchanged sentence

Non-Cash Investing Activities:

Reduction in fair value of assets acquired

Reduction in fair value of liabilities assumed

Deferred purchase consideration $ 719 $ —

Purchases of property, plant, and equipment in accounts payable $ 1,525 $ 1,090

7 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the accompanying condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows:

(In thousands) April 4,

(In thousands) July 4,

2026 January 3,

2026 March 29,

2026 June 28,

2025 December 28,

15 unchanged sentences

Translation Net

April 4, 2026

Definite-Lived

22 unchanged sentences

The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset.

Intangible assets related to the Company's 2026 acquisition totaled $ 22,219,000 .

See Note 2 , Acquisitions, for further details.

The changes in the carrying amount of goodwill by reportable segment are as follows:

5 unchanged sentences

2026 Activity

Measurement period adjustments for 2025 acquisitions

Acquisition (Note 2)

— 111,140 — 111,140

Measurement-period adjustments for 2025 acquisitions — 1,328 — 1,328

Currency translation ( 1,667 ) ( 4,730 ) ( 785 ) ( 7,182 )

Total 2026 activity ( 1,667 ) 107,738 ( 785 ) 105,286

Balance at April 4, 2026

Balance at July 4, 2026

Gross balance 138,092 414,057 194,296 746,445

1 unchanged sentence

Net balance $ 138,092 $ 328,519 $ 194,296 $ 660,907

Warranty Obligations

The Company's contracts covering the sale of its products include warranty provisions that provide assurance to its customers that the products will comply with agreed-upon specifications during a defined period of time.

The Company provides for the estimated cost of product warranties at the time of sale based on historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate projected warranty costs may vary from historical patterns.

The Company negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications.

The changes in the carrying amount of product warranty obligations are as follows:

Three Months Ended

(In thousands) April 4,

2026 March 29,

Balance at Beginning of Year $ 11,848 $ 10,664

Provision charged to expense 522 1,009

Usage ( 1,854 ) ( 1,728 )

Currency translation ( 25 ) 171

Balance at End of Period $ 10,491 $ 10,116

Revenue Recognition

4 unchanged sentences

These projects are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation.

Notes to Condensed Consolidated Financial Statements

The following table presents revenue by revenue recognition method:

Three Months Ended

April 4, March 29,

Three Months Ended Six Months Ended

July 4, June 28, July 4, June 28,

(In thousands) 2026 2025 2026 2025

3 unchanged sentences

The Company disaggregates its revenue from contracts with customers by reportable segment, product type and geography as this best depicts how its revenue is affected by economic factors.

Notes to Condensed Consolidated Financial Statements

The following table presents the disaggregation of revenue by product type and geography:

Three Months Ended

April 4, March 29,

Three Months Ended Six Months Ended

July 4, June 28, July 4, June 28,

(In thousands) 2026 2025 2026 2025

21 unchanged sentences

These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer.

The Company recognized revenue of $ 32,008,000 in the first quarter of 2026 and $ 17,559,000 in the first quarter of 2025 that was included in the contract liabilities balance at the beginning of 2026 and 2025, respectively.

The Company recognized revenue of $ 18,898,000 in the second quarter of 2026 and $ 13,238,000 in the second quarter of 2025, and $ 50,906,000 in the first six months of 2026 and $ 30,797,000 in the first six months of 2025 that was included in the contract liabilities balance at the beginning of 2026 and 2025, respectively.

The majority of the Company's contracts for capital equipment products have an original expected duration of one year or less.

Certain capital equipment product contracts require longer lead times and could take up to 24 months to complete.

For contracts with an original expected duration of over one year, the aggregate amount of the transaction price allocated to the remaining unsatisfied or partially unsatisfied performance obligations was $ 26,575,000 as of April 4, 2026.

The Company will recognize revenue for these performance obligations as they are satisfied, approximately 54 % of which is expected to occur within the next twelve months and the remaining 46 % thereafter.

Notes to Condensed Consolidated Financial Statements

Note Receivable

1 unchanged sentence

The Company received a 31 % down payment, with the remaining balance due on the earlier of the sale of the property by the local government or two years from the effective date of the agreements.

To date, the local government in China has made various interim payments and the outstanding receivable was $ 13,795,000 at April 4, 2026, which is included in other current assets in the accompanying condensed consolidated balance sheet.

To date, the local government in China has made various interim payments and the outstanding receivable was $ 13,553,000 at July 4, 2026, which is included in other current assets in the accompanying condensed consolidated balance sheet.

The Company expects this receivable will be repaid in full, although the timing is uncertain.

Notes to Condensed Consolidated Financial Statements

Banker's Acceptance Drafts Included in Accounts Receivable

2 unchanged sentences

The Company's Chinese subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date.

These drafts, which totaled $ 9,294,000 at April 4, 2026 and $ 9,115,000 at January 3, 2026, are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date.

These drafts, which totaled $ 6,347,000 at July 4, 2026 and $ 9,115,000 at January 3, 2026, are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date.

In accordance with Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740), the Company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which these differences are expected to reverse.

3 unchanged sentences

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes.

At April 4, 2026, the Company believes that it has appropriately accounted for any liability for unrecognized tax benefits.

At July 4, 2026, the Company believes that it has appropriately accounted for any liability for unrecognized tax benefits.

To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established, the statute of limitations expires for a tax jurisdiction year, or the Company is required to pay amounts in excess of the liability, its effective tax rate in a given financial statement period may be affected.

10 unchanged sentences

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

There was no material impact from the OBBBA provisions during the

Notes to Condensed Consolidated Financial Statements

three months ended April 4, 2026.

There was no material impact from the OBBBA provisions during the six months ended July 4, 2026.

The Company will continue to monitor the impact of the OBBBA and any additional clarifications or interpretive guidance related to the OBBBA as it is released.

5 unchanged sentences

The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

Notes to Condensed Consolidated Financial Statements

Financial Instruments - Credit Losses (Topic 326):

5 unchanged sentences

Targeted Improvements to the Accounting for Internal-Use Software.

In September 2025, FASB issued ASU No.

In September 2025, the FASB issued ASU No.

2025-06 which improves the practicality of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods.

9 unchanged sentences

The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

The Company's acquisitions are accounted for using the acquisition method of accounting and the results of the acquired businesses are included in its condensed consolidated financial statements from the date of acquisition.

Historically, acquisitions have been made at prices above the fair value of identifiable net assets, resulting in goodwill.

Acquisition costs were $ 674,000 in the first quarter of 2026 and are included in selling, general and administrative (SG&A) expenses in the accompanying condensed consolidated statement of income.

See Note 11 , Subsequent Events, for information regarding the Company's April 2026 acquisition.

During the three months ended April 4, 2026, the Company recorded measurement period adjustments related to its acquisitions of Babbini S.p.A.

Engineering S.r.l (collectively, Babbini), acquired on July 9, 2025, and Clyde Industries Holdings, Inc.

and its subsidiaries (collectively, Clyde Industries), acquired on October 7, 2025.

These adjustments reflect new information obtained about facts and circumstances that existed as of the respective acquisition dates and resulted in revisions to the preliminary purchase price allocations.

The measurement period adjustments were not material to the Company's financial position or results of operations for the three months ended April 4, 2026.

Environmental Credits and Environmental Credit Obligations (Topic 818).

In May 2026, the FASB issued ASU No.

2026-02, which establishes guidance for the recognition, measurement, presentation, and disclosure of environmental credits and environmental credit obligations.

This ASU is intended to reduce diversity in practice for entities that generate, purchase, sell, or use environmental credits.

This ASU is effective for annual and interim reporting periods beginning in fiscal year 2028, with early adoption permitted.

The Company is currently evaluating the effect that adoption of this ASU will have on its consolidated financial statements.

The Company's acquisitions are accounted for using the acquisition method of accounting.

The results of the acquired businesses are included in its condensed consolidated financial statements from the date of acquisition.

Historically, acquisitions have been made at prices above the fair value of identifiable net assets, resulting in the recognition of goodwill.

Acquisition costs were $ 604,000 in the second quarter of 2026 and $ 1,278,000 in the six months ended July 4, 2026, and are included in selling, general and administrative (SG&A) expenses in the accompanying condensed consolidated statement of income.

On January 29, 2026, the Company entered into a definitive agreement to acquire the shares of voestalpine BÖHLER Profil GmbH & Co KG and voestalpine BÖHLER Profil VerwaltungsGmbH.

The acquisition was completed on April 30, 2026 for $ 170,132,000 , net of cash acquired and the noncash settlement of a pre-existing balance with the acquired entity, and remains subject to a post-closing purchase price adjustment.

The acquisition was funded through borrowings under the Company's revolving credit facility.

Upon closing, the acquired entities were renamed Kadant Profil GmbH & Co KG and Kadant Profil Verwaltungs GmbH (collectively, Kadant Profil).

Kadant Profil is a manufacturer of customized rolled profiles and industrial knife solutions for demanding industrial applications and is part of the Company's Industrial Processing segment.

The Company expects the acquisition to generate synergies by expanding product sales into new markets through its global sales network and relationships, broadening its product portfolio, strengthening its position in the markets it serves, leveraging the acquired workforce, and achieving internal production efficiencies.

Goodwill recognized in the Kadant Profil acquisition was $ 111,140,000 and separately identifiable intangible assets acquired were $ 22,219,000 , both of which are expected to be fully deductible for income tax purposes over 15 years.

Notes to Condensed Consolidated Financial Statements

The following table summarizes the aggregate estimated fair values of assets acquired and liabilities assumed in connection with the acquisitions of Babbini and Clyde Industries.

The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed in connection with the acquisition of Kadant Profil.

(In thousands) Total

1 unchanged sentence

Accounts Receivable

Other Current Assets

Property, Plant and Equipment

4 unchanged sentences

Accounts Payable

Customer Deposits

Other Current Liabilities

Long-Term Obligations

Deferred Income Taxes

Other Long-Term Liabilities

Total liabilities assumed

1 unchanged sentence

Purchase Price:

The Company is continuing to evaluate certain components of the purchase price allocations related to its acquisitions of Babbini and Clyde Industries, and may record additional measurement period adjustments in future periods as new information becomes available.

The Company expects the remaining purchase price adjustments will primarily relate to the valuation of deferred income taxes and inventory.

The measurement period will not exceed one year from the respective acquisition dates.

Cash consideration $ 176,964

Noncash settlement of pre-existing balance with the acquired entity ( 3,915 )

Estimated post-closing adjustment 719

The weighted-average amortization period for the definite-lived intangible assets related to the Kadant Profil acquisition is 17 years, including weighted-average periods of 24 years for customer relationships and 14 years for product technology.

The preliminary purchase price allocation for the Kadant Profil acquisition remains subject to revision as the Company continues to obtain information regarding the valuation of certain acquired assets and assumed liabilities.

The Company expects the remaining purchase price adjustments to primarily relate to the valuation of intangible assets and inventory.

During the six months ended July 4, 2026, the Company recorded measurement-period adjustments related to its acquisitions of Babbini S.p.A.

Engineering S.r.l.

(collectively, Babbini) on July 9, 2025, and Clyde Industries Holdings, Inc.

and its subsidiaries (collectively, Clyde Industries) on October 7, 2025.

The adjustments primarily related to inventory and deferred income taxes and were not material to the Company's condensed consolidated financial statements as of and for the three and six months ended July 4, 2026.

The preliminary purchase price allocation for the Clyde Industries acquisition remains subject to revision as the Company continues to obtain information regarding the valuation of certain acquired assets and assumed liabilities.

The Company expects the remaining purchase price adjustments will primarily relate to the valuation of inventory and deferred income taxes.

On August 21, 2024, the Company acquired a technology company, which is included in its Material Handling segment.

1 unchanged sentence

The contingent consideration is payable upon the achievement of certain revenue performance targets earned between June 30, 2025 and June 30, 2027.

The maximum future value of the contingent consideration subject to payment is approximately $ 12,079,000 , calculated using the foreign currency spot rate at April 4, 2026.

The valuation of the contingent consideration is dependent on the following assumptions:

the probability of successful achievement of certain revenue targets, forecasted revenue, revenue volatility, and discount rate.

See Note 8 , Fair Value Measurements and Fair Value of Financial Instruments, for additional information related to the fair value of the contingent consideration assumed in the acquisition.

The maximum future value of the contingent consideration subject to payment is approximately $ 12,140,000 , calculated using the foreign currency spot rate at July 4, 2026.

The fair value of the contingent consideration is dependent on the following assumptions:

Notes to Condensed Consolidated Financial Statements

probability of successful achievement of certain revenue targets, forecasted revenue, revenue volatility, and discount rate.

See Note 8 , Fair Value Measurements and Fair Value of Financial Instruments, for additional information related to the fair value of the contingent consideration assumed in the acquisition.

Earnings per Share

Basic and diluted earnings per share (EPS) were calculated as follows:

Three Months Ended

(In thousands, except per share amounts) April 4,

2026 March 29,

Three Months Ended Six Months Ended

(In thousands, except per share amounts) July 4,

2026 June 28,

Net Income Attributable to Kadant $ 32,468 $ 26,159 $ 57,977 $ 50,222

4 unchanged sentences

Diluted Earnings per Share $ 2.75 $ 2.22 $ 4.91 $ 4.26

The effect of outstanding and unvested restricted stock units (RSUs) of the Company’s common stock totaling 46,000 shares in the first quarter of 2026 and 26,000 shares in the first quarter of 2025 were not included in the computation of diluted EPS for the respective periods as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the respective reporting periods.

The effect of outstanding and unvested restricted stock units (RSUs) of the Company’s common stock totaling 27,000 shares in the second quarter of 2026, 27,000 shares in the second quarter of 2025, 36,000 shares in the first six months of 2026 and 26,000 shares in the first six months of 2025 were not included in the computation of diluted EPS for the respective periods as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the respective reporting periods.

Provision for Income Taxes

The provision for income taxes was $ 10,142,000 in the first quarter of 2026 and $ 7,828,000 in the first quarter of 2025.

The effective tax rate of 28.2 % in the first quarter of 2026 was higher than the Company’s statutory rate of 21% primarily due to the distribution of the Company’s worldwide earnings, nondeductible expenses, and state taxes.

The effective tax rate of 24.3 % in the first quarter of 2025 was higher than the Company's statutory rate of 21% primarily due to nondeductible expenses, the distribution of the Company's worldwide earnings, and state taxes.

These items were offset in part by net excess income tax benefits from stock-based compensation arrangements, the reversal of tax reserves associated with uncertain tax positions, and foreign tax credits.

The provision for income taxes was $ 23,324,000 in the first six months of 2026 and $ 17,650,000 in the first six months of 2025.

The effective tax rate of 28.4 % in the first six months of 2026 was higher than the Company’s statutory rate of 21% primarily due to the distribution of the Company’s worldwide earnings, state taxes, and nondeductible expenses.

The effective tax rate of 25.7 % in the first six months of 2025 was higher than the Company's statutory rate of 21% primarily due to nondeductible expenses, the distribution of the Company's worldwide earnings, and state taxes.

These items were offset in part by net excess income tax benefits from stock-based compensation arrangements.

Long-Term Obligations

12 unchanged sentences

See Note 8 , Fair Value Measurements and Fair Value of Financial Instruments, for the fair value information related to the Company's long-term obligations.

Notes to Condensed Consolidated Financial Statements

Revolving Credit Facility

The Company's unsecured multi-currency revolving credit facility dated as of March 1, 2017 (as amended and restated to date, the Credit Agreement) matures on September 26, 2030 and has a borrowing capacity of $ 750,000,000 , in addition to an uncommitted, unsecured incremental borrowing facility of $ 200,000,000 .

Interest on borrowings outstanding under the Credit Agreement accrues and is payable in arrears calculated at one of the following rates selected by the Company:

(i) the Base Rate,

Notes to Condensed Consolidated Financial Statements

as defined, plus an applicable margin of 0.25 % to 1.25 %, or (ii) Eurocurrency Rate, Term SOFR, Term CORRA, AUD Rate, and RFR, as applicable and defined, plus an applicable margin of 1.25 % to 2.25 %.

The margin is determined based upon the ratio of the Company's total debt, net of unrestricted cash up to $ 50,000,000 , to earnings before interest, taxes, depreciation, and amortization as defined in the Credit Agreement.

Additionally, the Credit Agreement requires the payment of a commitment fee payable in arrears on the available committed borrowing capacity under the Credit Agreement, which ranges from 0.150 % to 0.350 %.

Obligations under the Credit Agreement, which includes customary events of default under such financing arrangements, may be accelerated upon the occurrence of an event of default.

In addition, the Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to maintain a maximum consolidated leverage ratio of 3.75 to 1, or, if the Company elects, for the quarter during which a material acquisition occurs and for the three fiscal quarters thereafter, 4.25 to 1, and limitations on making certain restricted payments (including dividends and stock repurchases).

Loans under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Company.

As of April 4, 2026, the outstanding balance under the Credit Agreement was $ 355,411,000 , which included $ 78,411,000 of euro-denominated borrowings.

The Company had $ 394,600,000 of committed borrowing capacity available as of April 4, 2026, which was primarily calculated by translating its foreign-denominated borrowings using the administrative agent's borrowing date foreign exchange rates, in addition to the $ 200,000,000 uncommitted, unsecured incremental borrowing facility.

See Note 11 , Subsequent Events, for details on the Company's borrowings to fund its April 2026 acquisition.

The weighted average interest rate for the outstanding balance under the Credit Agreement was 4.52 % as of April 4, 2026 and 4.49 % as of January 3, 2026.

Senior Promissory Notes

In 2018, the Company entered into an uncommitted, unsecured Multi-Currency Note Purchase and Private Shelf Agreement (Note Purchase Agreement).

Simultaneously with the execution of the Note Purchase Agreement, the Company issued senior promissory notes (Initial Notes) in an aggregate principal amount of $ 10,000,000 , with a per annum interest rate of 4.90 % payable semiannually, and a maturity date of December 14, 2028.

The Company is required to prepay a portion of the principal of the Initial Notes beginning on December 14, 2023 and each year thereafter, and may optionally prepay the principal on the Initial Notes, together with any prepayment premium, at any time in accordance with the Note Purchase Agreement.

The obligations of the Initial Notes may be accelerated upon an event of default as defined in the Note Purchase Agreement, which includes customary events of default under such financing arrangements.

The Initial Notes are pari passu with the Company’s indebtedness under the Credit Agreement, and any other senior debt of the Company, subject to certain specified exceptions, and participate in a sharing agreement with respect to the obligations of the Company and its subsidiaries under the Credit Agreement.

The Initial Notes are guaranteed by certain of the Company’s domestic subsidiaries.

During the second quarter of 2026, the Company borrowed approximately $ 181,815,000 of euro-denominated debt under the Credit Agreement to finance the acquisition of Kadant Profil.

As of July 4, 2026, the outstanding balance under the Credit Agreement was $ 502,452,000 , which included $ 245,452,000 of euro-denominated borrowings.

The Company had $ 248,668,000 of committed borrowing capacity available as of July 4, 2026, which was primarily calculated by translating its foreign-denominated borrowings using the administrative agent's borrowing date foreign exchange rates, in addition to the $ 200,000,000 uncommitted, unsecured incremental borrowing facility.

The weighted average interest rate for the outstanding balance under the Credit Agreement was 4.19 % as of July 4, 2026 and 4.49 % as of January 3, 2026.

Debt Compliance

As of April 4, 2026, the Company was in compliance with the covenants related to its debt obligations.

As of July 4, 2026, the Company was in compliance with the covenants related to its debt obligations.

Stock-Based Compensation

The Company recognized stock-based compensation expense of $ 2,916,000 in the first quarter of 2026 and $ 2,757,000 in the first quarter of 2025 within SG&A expenses in the accompanying condensed consolidated statement of income.

The Company recognizes compensation expense for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards.

The fair value of RSUs is based on the grant date price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period.

For time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award based on the grant date fair value, and net of actual forfeitures recorded when they occur.

For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately vesting portion of the award based on the grant date fair value, net of actual forfeitures recorded when they occur, and remeasured each reporting period until the total number of RSUs to be issued is known.

Unrecognized compensation expense related to stock-based compensation totaled $ 17,329,000 at April 4, 2026, which will be recognized over a weighted average period of 2.0 years.

Notes to Condensed Consolidated Financial Statements

The Company recognized stock-based compensation expense of $ 2,879,000 in the second quarter of 2026, $ 3,063,000 in the second quarter of 2025, $ 5,795,000 in the first six months of 2026 and $ 5,820,000 in the first six months of 2025 within SG&A expenses in the accompanying condensed consolidated statement of income.

Unrecognized compensation expense related to stock-based compensation totaled $ 14,556,000 at July 4, 2026, which will be recognized over a weighted average period of 1.8 years.

Non-Employee Director RSUs

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These time-based RSUs vest in three equal annual installments on March 10 of 2027, 2028, and 2029, provided that a recipient is employed by the Company on the applicable vesting dates.

Notes to Condensed Consolidated Financial Statements

Accumulated Other Comprehensive Items

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( 7,194 ) ( 8 ) ( 7,202 )

Balance at April 4, 2026 $ ( 38,820 ) $ 15 $ ( 38,805 )

Balance at July 4, 2026 $ ( 42,563 ) $ 12 $ ( 42,551 )

Fair Value Measurements and Fair Value of Financial Instruments

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• Level 3—Unobservable inputs based on the Company's own assumptions.

Notes to Condensed Consolidated Financial Statements

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:

Fair Value as of April 4, 2026

Fair Value as of July 4, 2026

(In thousands) Level 1 Level 2 Level 3 Total

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The Company uses the market approach technique to value its Level 1 and Level 2 financial assets and liabilities, and there were no changes in valuation techniques during the first quarter of 2026.

The Company uses the market approach technique to value its Level 1 and Level 2 financial assets and liabilities, and there were no changes in valuation techniques during the first six months of 2026.

Banker's acceptance drafts are carried at face value, which approximates their fair value due to the short-term nature of the negotiable instrument.

The Company uses the income approach technique to estimate the fair value of its Level 3 contingent consideration, including valuation models that incorporate probability adjusted assumptions and simulations related to the achievement of milestones and the likelihood of making the related payment.

The unobservable inputs used in the fair value measurements include the probability of successful achievement of certain revenue targets, forecasted revenue, revenue volatility, and discount rates.

The unobservable inputs used in the fair value measurements

Notes to Condensed Consolidated Financial Statements

include the probability of successful achievement of certain revenue targets, forecasted revenue, revenue volatility, and discount rates.

These assumptions were estimated based on a review of historical and projected results.

Projected contingent consideration related to revenue-based payments are discounted back to the current period using a discounted cash flow model.

Projected contingent consideration related to revenue-based payments is discounted back to the current period using a discounted cash flow model.

Changes to the fair value of contingent consideration can result from changes to one or multiple inputs, including the discount rate, projected revenue, revenue volatility, and the assumed probabilities of successful achievement of certain revenue targets.

There were no changes in the valuation techniques or significant unobservable inputs used in measuring the contingent consideration during the first quarter of 2026.

There were no changes in the valuation techniques or significant unobservable inputs used in measuring the contingent consideration during the first six months of 2026.

The following table provides a rollforward of the change in the fair value of the contingent consideration as determined by Level 3 inputs:

Three Months Ended

Six Months Ended

(In thousands)

2026 March 29,

2026 June 28,

Balance at Beginning of Year

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The carrying value and fair value of debt obligations, excluding lease obligations, are as follows:

April 4, 2026 January 3, 2026

July 4, 2026 January 3, 2026

(In thousands) Carrying Value Fair Value Carrying Value Fair Value

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$ 508,246 $ 372,720 $ 372,711

Notes to Condensed Consolidated Financial Statements

The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust frequently, based on prevailing market rates.

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The Company's primary products include rotary sealing devices, steam systems, expansion joints, doctor systems, roll and fabric cleaning devices, and filtration and fiber recovery systems.

Notes to Condensed Consolidated Financial Statements

• Industrial Processing – Equipment, machinery, and technologies used to recycle paper and paperboard, process timber, and optimize industrial steam boiler efficiency in the packaging, paper, tissue, wood products and food processing industries, among others.

The Company's primary products include fiber processing systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, custom-engineered knife systems, industrial boiler cleaning technologies, and continuous dewatering equipment.

The Company's primary products include fiber processing systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, custom-engineered profiles and industrial blades, boiler cleaning technologies, and continuous dewatering equipment.

• Material Handling – Products and engineered systems used to handle bulk and discrete materials for secondary processing or transport in the aggregates, mining, food, and waste management industries, among others.

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In addition, the Company manufactures and sells biodegradable, absorbent granules used as carriers in agricultural, home lawn and garden, professional lawn, turf and ornamental applications, and for oil and grease absorption.

Notes to Condensed Consolidated Financial Statements

The following tables present financial information for the Company's reportable segments:

Three Months Ended April 4, 2026

Three Months Ended July 4, 2026

(In thousands) Flow Control Industrial Processing Material Handling Total

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Depreciation expense (c) $ 1,773 $ 3,899 $ 1,221 $ 25 $ 6,918

Capital expenditures (d) $ 7,027 $ 2,366 $ 1,482 $ 72 $ 10,947

Notes to Condensed Consolidated Financial Statements

Three Months Ended June 28, 2025

(In thousands) Flow Control Industrial Processing Material Handling Total

Revenue $ 95,947 $ 95,937 $ 63,383 $ 255,267

Cost of revenue

44,289 55,066 38,870 138,225

Gross Profit 51,658 40,871 24,513 117,042

Gross Profit Margin 53.8 % 42.6 % 38.7 % 45.9 %

Operating Expenses:

Selling expenses 14,478 10,851 6,825 32,154

General and administrative expenses 10,023 9,172 4,638 23,833

Research and development expenses

1,330 1,824 570 3,724

Intangible asset amortization expense 1,410 2,436 2,689 6,535

Other segment items ( 26 ) 1,102 ( 148 ) 928

Segment Operating Income

$ 24,443 $ 15,486 $ 9,939 $ 49,868

Segment Operating Income Margin

25.5 % 16.1 % 15.7 %

Corporate Expenses (a) ( 10,491 )

Interest Expense, Net (b) ( 2,899 )

Other Expense, Net (b) ( 17 )

Income Before Provision for Income Taxes

(In thousands) Flow Control Industrial Processing Material Handling Corporate Total

Other Segment Disclosures

Depreciation expense (c) $ 1,855 $ 2,468 $ 1,199 $ 12 $ 5,534

Capital expenditures $ 1,380 $ 1,595 $ 993 $ — $ 3,968

Three Months Ended March 29, 2025

Six Months Ended July 4, 2026

(In thousands) Flow Control Industrial Processing Material Handling Total

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Income Before Provision for Income Taxes

(In thousands) Flow Control

Industrial Processing Material Handling Corporate Total

Other Segment Disclosures

Depreciation expense (c) $ 3,700 $ 7,009 $ 2,433 $ 38 $ 13,180

Capital expenditures (d) $ 8,049 $ 3,229 $ 2,718 $ 209 $ 14,205

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 29, 2025 (continued)

Six Months Ended June 28, 2025

(In thousands) Flow Control Industrial Processing Material Handling Total

Revenue $ 188,388 $ 185,461 $ 120,628 $ 494,477

Cost of revenue

87,457 105,142 74,506 267,105

Gross Profit 100,931 80,319 46,122 227,372

Gross Profit Margin 53.6 % 43.3 % 38.2 % 46.0 %

Operating Expenses:

Selling expenses 29,257 21,028 13,293 63,578

General and administrative expenses 18,836 17,559 8,879 45,274

Research and development expenses

2,681 3,430 1,136 7,247

Intangible asset amortization expense 2,903 4,814 5,517 13,234

Other segment items 59 1,170 ( 177 ) 1,052

Segment Operating Income

$ 47,195 $ 32,318 $ 17,474 $ 96,987

Segment Operating Income Margin

25.1 % 17.4 % 14.5 %

Corporate Expenses (a) ( 22,024 )

Interest Expense, Net (b) ( 6,204 )

Other Expense, Net (b) ( 33 )

Income Before Provision for Income Taxes

(In thousands) Flow Control Industrial Processing Material Handling Corporate Total

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(In thousands)

Total Assets (d)

Total Assets (e)

Flow Control $ 455,768 $ 450,911

3 unchanged sentences

406,713 411,813

Corporate (e) 19,466 23,392

Corporate (f) 28,372 23,392

$ 1,889,296 $ 1,712,178

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(c) Depreciation expense by reportable segment is included within cost of revenue and selling, general and administrative, and research and development expenses.

(d) Excludes intercompany receivables or payables and investment in subsidiary balances as the CODM uses total assets excluding these amounts as the measurement for the Company's segment assets.

(e) Corporate assets primarily consist of cash and cash equivalents, tax assets, right-of-use assets, and property, plant, and equipment, net.

(d) Includes $ 5,842,000 for the purchase of a manufacturing facility in the Flow Control segment that was previously leased by the Company.

(e) Excludes intercompany receivables or payables and investment in subsidiary balances as the CODM uses total assets excluding these amounts as the measurement for the Company's segment assets.

(f) Corporate assets primarily consist of cash and cash equivalents, tax assets, right-of-use assets, and property, plant, and equipment, net.

Commitments and Contingencies

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The Company's Chinese subsidiaries may use these banker's acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors.

Banker's acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity dates.

The Company had $ 8,482,000 at April 4, 2026 and $ 9,556,000 at January 3, 2026 of banker's acceptance drafts subject to recourse, which were transferred to vendors and had not reached their scheduled maturity dates.

Banker's acceptance

Notes to Condensed Consolidated Financial Statements

drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity dates.

The Company had $ 11,974,000 at July 4, 2026 and $ 9,556,000 at January 3, 2026 of banker's acceptance drafts subject to recourse, which were transferred to vendors and had not reached their scheduled maturity dates.

Historically, the banker's acceptance drafts have settled upon maturity without any claim of recourse against the Company.

3 unchanged sentences

If the Company were found to be liable for any of the claims or counterclaims against it, the Company would incur a charge against earnings for amounts in excess of legal accruals.

Subsequent Events

On January 29, 2026, the Company entered into a definitive agreement to acquire the shares of voestalpine BÖHLER Profil GmbH & Co KG and voestalpine BÖHLER Profil VerwaltungsGmbH.

The acquisition was completed on April 30, 2026 for 157,000,000 euros in cash, subject to certain customary adjustments.

At closing, the company names were changed to Kadant Profil GmbH & Co KG and Kadant Profil Verwaltungs GmbH (collectively, Kadant Profil).

Kadant Profil is a manufacturer of customized rolled profiles and industrial knife solutions for demanding industrial applications and is part of the

Notes to Condensed Consolidated Financial Statements

Company's Industrial Processing segment.

The Company expects several synergies in connection with this acquisition, including expanding product sales into new markets by leveraging its global sales network and relationships, broadening its product portfolio, strengthening its position in the markets it serves, leveraging the acquired workforce, and achieving internal production efficiencies.

The excess of the purchase price for this acquisition over the fair value of the net assets acquired will be recorded as goodwill.

The Company has not yet completed its preliminary assessment of the fair value of the assets acquired and liabilities assumed in this acquisition, including the valuation of intangible assets and goodwill, due to the proximity of the acquisition to the issuance of these condensed consolidated financial statements.

Borrowings Under the Credit Agreement

In April 2026, the Company borrowed 155,000,000 euros under its revolving credit facility, pursuant to the terms of the Credit Agreement, to fund the Kadant Profil acquisition.

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