What changed in this filing

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Item 1. Financial Statements

2026-02-05 compared with 2025-11-06 · 164 added, 101 removed, 571 unchanged (32% of the section changed)

3 unchanged sentences

(Amounts in Thousands, Except for Share Data)

September 30,

2025 June 30,

47 unchanged sentences

(Amounts in Thousands, Except for Per Share Data)

Three Months Ended

Three Months Ended Six Months Ended

December 31 December 31

(Unaudited) 2025 2024 2025 2024

4 unchanged sentences

Restructuring Expense 1,817 4,671 3,233 6,993

Gain on Disposal

( 124 ) ( 1,264 )

Asset Impairment (Gain on Disposal) 422 — 298 ( 1,264 )

Operating Income 10,767 8,230 25,221 17,345

6 unchanged sentences

Provision (Benefit) for Income Taxes

3,347 42 4,260 ( 228 )

Net Income $ 3,637 $ 3,432 $ 13,723 $ 6,586

10 unchanged sentences

Three Months Ended Three Months Ended

September 30, 2025 September 30, 2024

December 31, 2025 December 31, 2024

(Unaudited) Pre-tax Tax Net of Tax Pre-tax Tax Net of Tax

9 unchanged sentences

Total comprehensive income $ 3,656 $ ( 8,182 )

Six Months Ended Six Months Ended

December 31, 2025 December 31, 2024

(Unaudited) Pre-tax Tax Net of Tax Pre-tax Tax Net of Tax

Net income $ 13,723 $ 6,586

Other comprehensive income (loss):

Foreign currency translation adjustments $ 50 $ 1 $ 51 $ ( 5,139 ) $ — $ ( 5,139 )

Postemployment actuarial change ( 163 ) 42 ( 121 ) 443 ( 138 ) 305

Derivative gain (loss) 2,307 ( 567 ) 1,740 ( 2,569 ) 686 ( 1,883 )

Reclassification to (earnings) loss:

Derivatives ( 1,873 ) 523 ( 1,350 ) 1,418 ( 374 ) 1,044

Amortization of actuarial change 120 ( 29 ) 91 127 ( 30 ) 97

Other comprehensive income (loss) $ 441 $ ( 30 ) $ 411 $ ( 5,720 ) $ 144 $ ( 5,576 )

Total comprehensive income $ 14,134 $ 1,010

See Notes to Condensed Consolidated Financial Statements .

2 unchanged sentences

(Amounts in Thousands)

Three Months Ended

Six Months Ended

(Unaudited) 2025 2024

3 unchanged sentences

Depreciation and amortization 18,369 18,261

(Gain) loss on sales of assets 273 ( 126 )

Loss on sales of assets 370 8

Deferred income taxes ( 1,972 ) ( 100 )

Gain on Disposal ( 124 ) ( 1,264 )

Asset impairment (gain on disposal) 298 ( 1,264 )

Stock-based compensation 3,780 2,573

15 unchanged sentences

Other, net 26 37

Net cash (used for) provided by investing activities ( 6,202 ) 5,226

Net cash used for investing activities ( 24,368 ) ( 1,214 )

Cash Flows From Financing Activities:

Proceeds from credit facilities 15,000 100,000

Payments on credit facilities ( 12,500 ) ( 180,000 )

2 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 3,221 ) ( 937 )

Debt issuance costs — ( 454 )

Net cash used for financing activities ( 2,142 ) ( 97,255 )

13 unchanged sentences

The restricted cash included in Prepaid expenses and other current assets on the balance sheet represents funds held by the Company for a foreign subsidiary’s employee savings plan.

(Unaudited) September 30,

(Unaudited) December 31,

2025 June 30,

9 unchanged sentences

(Unaudited) Additional Paid-In Capital

Amounts at June 30, 2025 $ 323,309 $ 333,548 $ 1,063 $ ( 88,036 ) $ 569,884

Amounts at September 30, 2025 $ 319,437 $ 343,634 $ 1,455 $ ( 87,387 ) $ 577,139

Other comprehensive income (loss) 19 19

Issuance of non-restricted stock ( 21,000 shares)

Compensation expense related to stock compensation plans 2,078 2,078

Repurchase of common stock ( 149,000 shares) (including excise tax)

( 4,293 ) ( 4,293 )

Amounts at December 31, 2025 $ 321,823 $ 347,271 $ 1,474 $ ( 91,406 ) $ 579,162

Amounts at September 30, 2024 $ 319,175 $ 319,718 $ ( 11,769 ) $ ( 79,366 ) $ 547,758

Net income 3,432 3,432

Other comprehensive income (loss) ( 11,614 ) ( 11,614 )

Issuance of non-restricted stock ( 26,000 shares)

Compensation expense related to stock compensation plans 379 379

Charitable donation of common stock ( 2,000 shares)

Repurchase of Common Stock ( 156,000 shares)

( 3,009 ) ( 3,009 )

Amounts at December 31, 2024 $ 319,744 $ 323,150 $ ( 23,383 ) $ ( 82,035 ) $ 537,476

Six Months Ended

Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Share Owners’ Equity

(Unaudited) Additional Paid-In Capital

Amounts at June 30, 2025 $ 323,309 $ 333,548 $ 1,063 $ ( 88,036 ) $ 569,884

Net income 13,723 13,723

Other comprehensive income (loss) 411 411

Issuance of non-restricted stock ( 21,000 shares)

Compensation expense related to stock compensation plans 3,516 3,516

Performance and restricted share issuance ( 122,000 and 46,000 shares, respectively)

1 unchanged sentence

Charitable donation of common stock ( 1,000 shares)

Repurchase of common stock ( 49,000 shares) (including excise tax)

Repurchase of common stock ( 198,000 shares)

( 5,764 ) ( 5,764 )

Amounts at September 30, 2025 $ 319,437 $ 343,634 $ 1,455 $ ( 87,387 ) $ 577,139

Amounts at December 31, 2025 $ 321,823 $ 347,271 $ 1,474 $ ( 91,406 ) $ 579,162

Amounts at June 30, 2024 $ 319,463 $ 316,564 $ ( 17,807 ) $ ( 77,759 ) $ 540,461

1 unchanged sentence

Other comprehensive income (loss) ( 5,576 ) ( 5,576 )

Issuance of non-restricted stock ( 26,000 shares)

Compensation expense related to stock compensation plans 2,337 2,337

Performance and restricted share issuance ( 83,000 shares and 22,000 shares, respectively)

Performance and restricted share issuance ( 83,000 and 22,000 shares, respectively)

( 2,246 ) 1,285 ( 961 )

Charitable donation of common stock ( 2,000 shares)

Repurchase of Common Stock ( 315,000 shares)

( 5,901 ) ( 5,901 )

Amounts at September 30, 2024 $ 319,175 $ 319,718 $ ( 11,769 ) $ ( 79,366 ) $ 547,758

Amounts at December 31, 2024 $ 319,744 $ 323,150 $ ( 23,383 ) $ ( 82,035 ) $ 537,476

See Notes to Condensed Consolidated Financial Statements .

11 unchanged sentences

Basis of Presentation:

The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of September 30, 2025 and June 30, 2025, results of operations for the three months ended September 30, 2025 and 2024, cash flows for the three months ended September 30, 2025 and 2024, and share owners’ equity for the three months ended September 30, 2025 and 2024.

The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of December 31, 2025 and June 30, 2025, results of operations for the three and six months ended December 31, 2025 and 2024, cash flows for the six months ended December 31, 2025 and 2024, and share owners’ equity for the three and six months ended December 31, 2025 and 2024.

The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2025 and related notes thereto included in our Annual Report on Form 10-K.

6 unchanged sentences

We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments.

Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, precision molded plastics built to customers’ specifications.

Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, and precision molded plastics built to customers’ specifications.

Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle.

29 unchanged sentences

Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables.

In the three months ended September 30, 2025 and 2024, we sold, without recourse, $ 71.2 million and $ 87.3 million of accounts receivable, respectively.

For the three months ended September 30, 2025 and 2024, factoring fees were $ 0.7 million and $ 0.5 million.

In the six months ended December 31, 2025 and 2024, we sold, without recourse, $ 144.1 million and $ 169.0 million of accounts receivable, respectively.

For the three months ended December 31, 2025 and 2024, factoring fees were $ 0.6 million and $ 0.5 million, and $ 1.3 million and $ 1.1 million during the six months ended December 31, 2025 and 2024, respectively.

Factoring fees are recorded in Non-operating income (expense), net on our Condensed Consolidated Statements of Income.

5 unchanged sentences

Our risks with respect to receivables we service include commercial disputes regarding such receivables and no greater than 5 % of sold and outstanding receivables in the event of customer insolvency.

In the three months ended September 30, 2025, under this program, we sold $ 28.6 million of receivables and incurred discount fees of $ 0.2 million, recorded in Non-operating income (expense), net on our Condensed Consolidated Statements of Income.

Receivables sold under the RPA and subject to our servicing that remained outstanding and uncollected as of September 30, 2025 and June 30, 2025 were $ 22.1 million and $ 19.4 million, respectively.

In fiscal year 2024, we recorded an allowance for credit losses of $ 2.0 million related to a customer, not in bankruptcy, but was deemed necessary in consideration of the expected timing of payments and risk of default.

In the six months ended December 31, 2025, under this program, we sold $ 57.4 million of receivables and incurred discount fees of $ 0.4 million, recorded in Non-operating income (expense), net on our Condensed Consolidated Statements of Income.

Receivables sold under the RPA and subject to our servicing that remained outstanding and uncollected as of December 31, 2025 and June 30, 2025 were $ 19.6 million and $ 19.4 million, respectively.

In fiscal year 2024, we recorded an allowance for credit losses of $ 2.0 million related to a customer, not in bankruptcy, but the allowance was deemed necessary in consideration of the expected timing of payments and risk of default.

We continue to pursue full recovery.

The amount expected to be collected after twelve months is included in Other Assets, net on the Condensed Consolidated Balance Sheet.

At September 30, 2025, the noncurrent receivable associated with this customer in Other Assets, net of allowance for expected credit losses, totaled $ 2.4 million.

The current portion of receivables from this customer is $ 1.5 million at September 30, 2025.

At December 31, 2025, the noncurrent receivable associated with this customer in Other Assets, net of allowance for expected credit losses, totaled $ 2.4 million.

The current portion of receivables from this customer is $ 1.8 million at December 31, 2025.

In limited circumstances, our China operation may receive banker’s acceptance drafts from customers as payment on account.

The banker’s acceptance drafts are non-interest bearing and primarily mature within six months from the origination date.

The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to the scheduled maturity date.

There are no drafts outstanding at both September 30, 2025 and June 30, 2025.

Drafts received and

outstanding would be reflected in Receivables on the Condensed Consolidated Balance Sheets until the banker’s drafts are sold at a discount, transferred in settlement of current accounts payable, or cash is received at maturity.

Banker’s acceptance drafts sold at a discount or transferred in settlement of current accounts payable during the three months ended September 30, 2025 were $ 11.1 million.

No banker’s acceptance drafts were sold at a discount or transferred in settlement of current accounts payable during the three months ended September 30, 2024.

The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to

the scheduled maturity date.

There are no drafts outstanding at December 31, 2025 and June 30, 2025.

Drafts received and outstanding would be reflected in Receivables on the Condensed Consolidated Balance Sheets until the banker’s drafts are sold at a discount, transferred in settlement of current accounts payable, or cash is received at maturity.

Banker’s acceptance drafts sold at a discount or transferred in settlement of current accounts payable during the six months ended December 31, 2025 were $ 24.6 million.

No banker’s acceptance drafts were sold at a discount or transferred in settlement of current accounts payable during the six months ended December 31, 2024.

Property, Equipment, and Depreciation

6 unchanged sentences

Components of Non-operating income (expense), net:

Three Months Ended

Three Months Ended Six Months Ended

December 31 December 31

(Amounts in Thousands) 2025 2024 2025 2024

15 unchanged sentences

The legislation has multiple effective dates, with certain provisions effective in fiscal year 2026 and others implemented through fiscal year 2028.

The impact from this legislation has resulted in a partial release of the valuation allowance against the business interest limitation deferred tax asset in the three months ended September 30, 2025.

The impact from this legislation has resulted in a partial release of the valuation allowance against the business interest limitation deferred tax asset in the six months ended December 31, 2025.

The Company will continue to monitor and assess future impacts from the 2025 U.S.

12 unchanged sentences

Not Yet Adopted:

In September 2025, the Financial Accounting Standards Board (FASB) issued guidance on Accounting for Internal-Use Software, intended to modernize the accounting for software costs and changing the requirements for capitalization of software costs.

In December 2025, Financial Accounting Standards Board (FASB) issued guidance on Interim Reporting, intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted, and the guidance can be applied prospectively or retrospectively.

We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In September 2025, the FASB issued guidance on Accounting for Internal-Use Software, intended to modernize the accounting for software costs and changing the requirements for capitalization of software costs.

The guidance is effective for fiscal years beginning after December 15, 2027 and for interim reporting periods within those annual reporting periods.

13 unchanged sentences

Prior periods have been recast to conform to current period presentation.

The following table disaggregates our revenue by end market vertical for the three months ended September 30, 2025 and 2024.

Three Months Ended

The following table disaggregates our revenue by end market vertical for the three and six months ended December 31, 2025 and 2024.

Three Months Ended Six Months Ended

December 31 December 31

(Amounts in Millions) 2025 2024 2025 2024

2 unchanged sentences

$ 162.3 $ 186.3 $ 326.7 $ 368.0

96.3 84.0 197.9 173.8

Industrial (1)

82.7 87.1 182.3 189.8

Total net sales $ 341.3 $ 357.4 $ 706.9 $ 731.6

(1) For the three months ended September 30, 2024, $ 6.6 million of the industrial net sales were previously categorized as automotive.

For the three months ended September 30, 2025 and 2024, approximately 99 % and 97 %, respectively, of our net sales were recognized over time as manufacturing services were performed under a customer contract on a product with no alternative use and we have an enforceable right to payment for performance completed to date.

(1) For the three and six months ended December 31, 2024, $ 6.5 million and $ 13.1 million of the industrial net sales were previously categorized as automotive.

For both the three months ended December 31, 2025 and 2024, approximately 99 % of our net sales were recognized over time as manufacturing services were performed under a customer contract on a product with no alternative use and we have an enforceable right to payment for performance completed to date.

For the six months ended December 31, 2025 and 2024, approximately 99 % and 98 % of our net sales were recognized over time.

The remaining sales revenues were recognized at a point in time when the customer obtained control of the products.

1 unchanged sentence

Contract assets on the Condensed Consolidated Balance Sheets relate to unbilled accounts receivable and occur when revenue is recognized over time as manufacturing services are provided and the billing to the customer has not yet occurred as of the balance sheet date, which are generally transferred to receivables in the next fiscal quarter due to the short-term nature of the manufacturing cycle.

Contract assets were $ 75.2 million and $ 71.8 million as of September 30, 2025 and June 30, 2025, respectively.

Contract assets were $ 79.5 million and $ 71.8 million as of December 31, 2025 and June 30, 2025, respectively.

The Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for material price variances, inventory purchases, tooling, or other miscellaneous services or costs.

These payments are recognized as contract liabilities until the performance obligations are completed and are included in Advances from customers, if inventory related, and Accrued expenses, if not inventory related, on the Condensed Consolidated Balance Sheets , which amounted to $ 32.1 million and $ 41.5 million as of September 30, 2025 and June 30, 2025, respectively.

These payments are recognized as contract liabilities until the performance obligations are completed and are included in Advances from customers, if inventory related, and Accrued expenses, if not inventory related, on the Condensed Consolidated Balance Sheets , which amounted to $ 34.1 million and $ 41.5 million as of December 31, 2025 and June 30, 2025, respectively.

Other than deposits associated with inventory purchases classified as long term, our performance obligations are short term in nature and therefore our contract liabilities are all expected to be settled within twelve months.

See Note 5 - Inventories of Notes to Condensed Consolidated Financial Statements for further discussion.

See Note 5 - Inventories for further discussion.

Following approval by our Board of Directors, on July 31, 2024, we entered into a definitive agreement and closed on the sale of 100% of the equity interests in GES to Averna Test Systems, Inc., resulting in cash proceeds after costs to sell of $ 18.5 million.

The following table summarizes net sales and income (loss) before taxes on income for the disposal group:

Three Months Ended

Three Months Ended Six Months Ended

December 31 December 31

(Amounts in Thousands) 2025 2024 2025 2024

1 unchanged sentence

Income (Loss) Before Taxes on Income (1)

(1) Includes gain on sale of $ 1.3 million for the three months ended September 30, 2024 and also includes allocated corporate overhead expenses.

$ ( 387 ) $ — $ ( 387 ) $ 985

(1) Amounts Include gain (loss) on sale adjustments following the close of the sale on July 31, 2024:

$( 0.4 ) million in the three and six months periods ended December 31, 2025 and $ 1.3 million for the six months ended December 31, 2024.

The six months ended December 31, 2024 also includes allocated corporate overhead expenses.

Restructuring Activities

During fiscal year 2025, we continued our restructuring efforts to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions, and recorded restructuring expense of $ 5.7 million, which were primarily employee-related costs.

During fiscal year 2026, we recorded additional restructuring expense of $ 0.3 million.

The cumulative amount incurred since inception of these efforts beginning in fiscal year 2024 through September 30, 2025 was $ 8.5 million.

As we are seeing additional end market demand pressures, and as we monitor the progression of tariffs, reciprocal tariffs, and the geopolitical economic environment broadly, we expect to incur additional restructuring costs over the course of the fiscal year as necessary.

In the three and six months ended December 31, 2025, we continued our restructuring efforts to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions, and recorded restructuring expense of $ 1.6 million and $ 1.9 million, respectively, which were primarily employee-related costs.

The cumulative amount incurred since inception of these efforts beginning in fiscal year 2024 through December 31, 2025 was $ 10.0 million.

Additionally, on November 4, 2024, the Company announced that its Board of Directors has approved a plan to cease operations at our Tampa facility (“Tampa Closure Plan”).

The decision was made to leverage capacity within our global footprint and streamlining the operating structure.

At June 30, 2025, we revised our estimated restructuring charges that we expect to incur to approximately $ 5.5 million to $ 6.5 million in total exit costs, including most significantly $ 4.5 million in employee termination benefits and $ 1.0 million to $ 2.0 million in logistical costs to transfer and validate programs at our other facilities.

The decision was made to leverage capacity within our global footprint and streamline the operating structure.

These costs are predominantly cash expenditures.

We recorded restructuring expense of $ 1.1 million in the three months ended September 30, 2025 for the Tampa Closure Plan.

The cumulative amount incurred since inception of the Tampa Closure Plan during fiscal year 2025 through September 30, 2025 was $ 6.3 million.

The restructuring charges are considered substantially complete at September 30, 2025.

We recorded restructuring expense of $ 0.3 million and $ 1.3 million, respectively, in the three and six months ended December 31, 2025 for the Tampa Closure Plan.

The cumulative amount incurred since inception of the Tampa Closure Plan during fiscal year 2025 through December 31, 2025 was $ 6.6 million.

The restructuring charges are considered substantially complete at December 31, 2025.

We do not expect significant additional restructuring charges relating to these previously announced restructuring efforts.

7 unchanged sentences

Non-cash activity — — —

Balance at September 30, 2025

$ 407 $ — $ 407

As Tampa’s operations ceased in the fourth quarter of fiscal year 2025, their land, building, and certain equipment met the criteria to be classified as Assets Held for Sale at June 30, 2025.

The total carrying value of $ 6.9 million at June 30, 2025 included land of $ 5.1 million, buildings of $ 1.5 million, and machinery and equipment of $ 0.3 million.

These assets are reflected as Assets held for sale in our Condensed Consolidated Balance Sheets, and we ceased recording depreciation and amortization on the applicable assets.

During the three months ended September 30, 2025, we sold the machinery and equipment, and the total carrying value of Assets Held for Sale at September 30, 2025 of $ 6.6 million includes land of $ 5.1 million and buildings of $ 1.5 million.

Balance at December 31, 2025

As Tampa’s operations ceased in the fourth quarter of fiscal year 2025, their land, building, and certain equipment meet the criteria to be classified as Assets Held for Sale.

The total carrying value of Assets Held for Sale at December 31, 2025 of $ 6.6 million includes land of $ 5.1 million and buildings of $ 1.5 million.

We expect the Assets Held for Sale to be disposed of in fiscal year 2026.

2 unchanged sentences

Inventory components were as follows:

(Amounts in Thousands) September 30, 2025 June 30, 2025

(Amounts in Thousands) December 31, 2025 June 30, 2025

Finished products $ 399 $ 111

2 unchanged sentences

Total inventory $ 281,699 $ 273,500

Additionally, as of September 30 and June 30, 2025, we have raw materials inventory totaling $ 38.5 million and $ 39.4 million, respectively, classified as long-term included in Other Assets, net in our Condensed Consolidated Balance Sheets.

Additionally, as of December 31 and June 30, 2025, we have raw materials inventory totaling $ 38.0 million and $ 39.4 million, respectively, classified as long-term included in Other Assets, net in our Condensed Consolidated Balance Sheets.

A majority of this inventory is associated with a customer who is remediating a recall and we do not expect the inventory to be consumed within the next twelve months.

1 unchanged sentence

For a majority of these, we have arrangements with our customers to pay us carrying costs.

As of September 30, 2025 and June 30, 2025, we have received deposits for long-term inventory totaling $ 25.2 million and $ 27.0 million, respectively, which is included in Other long-term liabilities in our Condensed Consolidated Balance Sheets.

As of December 31, 2025 and June 30, 2025, we have received deposits for long-term inventory totaling $ 23.6 million and $ 27.0 million, respectively, which is included in Other long-term liabilities in our Condensed Consolidated Balance Sheets.

Accumulated Other Comprehensive Income (Loss)

During the three months ended September 30, 2025 and 2024, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

During the six months ended December 31, 2025 and 2024, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)

6 unchanged sentences

Net current-period other comprehensive income (loss) 51 390 ( 30 ) 411

Balance at September 30, 2025

Balance at December 31, 2025

$ 2,314 $ 129 $ ( 969 ) $ 1,474

4 unchanged sentences

Net current-period other comprehensive income (loss) ( 5,139 ) ( 839 ) 402 ( 5,576 )

Balance at September 30, 2024

Balance at December 31, 2024

$ ( 19,399 ) $ ( 3,234 ) $ ( 750 ) $ ( 23,383 )

The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income:

Reclassifications from Accumulated Other Comprehensive Income (Loss) Three Months Ended Affected Line Item in the Condensed Consolidated Statements of Income

Reclassifications from Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statements of Income

December 31 December 31

(Amounts in Thousands) 2025 2024 2025 2024

4 unchanged sentences

Postemployment Benefits:

Amortization of actuarial gain (2)

Amortization of actuarial gain (loss) (2)

( 60 ) ( 74 ) ( 120 ) ( 127 ) Non-operating income (expense), net

3 unchanged sentences

Amounts in parentheses indicate reductions to income.

(1) See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 11 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

(1) See Note 10 - Derivative Instruments for further information on derivative instruments.

(2) See Note 11 - Employee Benefit Plans for further information on postemployment benefit plans.

Commitments and Contingent Liabilities

3 unchanged sentences

Management refines the warranty liability regularly based on changes in historical cost trends and in certain cases where specific warranty issues become known.

This product warranty liability and expense were immaterial as of and during the three months ended September 30, 2025 and 2024, respectively.

This product warranty liability and expense were immaterial as of and during the six months ended December 31, 2025 and 2024, respectively.

Credit Facilities

2 unchanged sentences

(Amounts in Millions, in U.S.

Dollar Equivalents) September 30, 2025 September 30, 2025 June 30, 2025

Dollar Equivalents) December 31, 2025 December 31, 2025 June 30, 2025

Primary credit facility, revolving (1)

3 unchanged sentences

Thailand overdraft credit facility (2)

China revolving credit facility (2)

Netherlands revolving credit facility (2)

15 unchanged sentences

Types of borrowings available on the restated primary credit facility include term loans, revolving loans, multi-currency term loans, and swingline loans.

At September 30, 2025, the Company had $ 40 million Term Benchmark and $ 1.7 million ABR, both denominated in U.S.

At December 31, 2025, the Company had $ 55.0 million Term Benchmark and $ 3.5 million ABR, both denominated in U.S.

dollars, outstanding borrowings under the primary credit facility.

15 unchanged sentences

• an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.

The Company had $ 0.4 million in letters of credit contingently committed against the primary credit facility at both September 30, 2025 and June 30, 2025.

We were in compliance with the financial covenants of the primary credit facility as of December 31, 2025.

The Company had $ 0.4 million in letters of credit contingently committed against the primary credit facility at both December 31, 2025 and June 30, 2025.

(2) The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources.

1 unchanged sentence

Interest on borrowing under these facilities is charged at a rate as defined under the respective foreign credit facility.

During the current fiscal year, the Company entered into a foreign credit facility for its operation in China, which allows for borrowings up to 50 million RMB (approximately $ 7.1 million at December 31, 2025 exchange rates).

(3) The amount of long-term debt under credit facilities, less current maturities, reflects the revolving borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months in addition to the long-term portion of the term borrowings.

The revolving borrowings on the primary credit facility matures on May 4, 2027.

As of September 30, 2025, the contractual maturities of the term borrowings on the primary credit facility were as follows:

The revolving borrowings on the primary credit facility mature on May 4, 2027.

As of December 31, 2025, the contractual maturities of the term borrowings on the primary credit facility were as follows:

(Amounts in Millions) Contractual Maturities

2 unchanged sentences

Total $ 95.00

The weighted-average interest rate on borrowings outstanding under the credit facilities at September 30, 2025 and June 30, 2025 were 5.7 % and 5.9 %, respectively.

The weighted-average interest rate on borrowings outstanding under the credit facilities at December 31, 2025 and June 30, 2025 were 5.2 % and 5.9 %, respectively.

The Company categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities.

5 unchanged sentences

Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

There were no changes in the inputs or valuation techniques used to measure fair values during the three months ended September 30, 2025.

There were no changes in the inputs or valuation techniques used to measure fair values during the six months ended December 31, 2025.

For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2025.

Recurring Fair Value Measurements:

As of September 30, 2025 and June 30, 2025, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:

September 30, 2025

As of December 31, 2025 and June 30, 2025, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:

December 31, 2025

(Amounts in Thousands) Level 1 Level 2 Total

13 unchanged sentences

Total liabilities at fair value $ — $ 1,910 $ 1,910

We had no level 3 assets or liabilities at September 30, 2025 and June 30, 2025, or any activity in Level 3 assets or liabilities during the three months ended September 30, 2025.

We had no level 3 assets or liabilities at December 31, 2025 and June 30, 2025, or any activity in Level 3 assets or liabilities during the six months ended December 31, 2025.

The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, bond funds, and a money market fund.

The SERP investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants.

See Note 11 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.

See Note 11 - Employee Benefit Plans for further information regarding the SERP.

Financial Instruments Not Carried At Fair Value:

Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include notes receivable and borrowings under credit facilities.

There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the three months ended September 30, 2025.

There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the six months ended December 31, 2025.

For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2025.

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Non-designated foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances and other balance sheet positions denominated in currencies other than the functional currencies.

As of September 30, 2025, we had outstanding foreign exchange contracts to hedge currencies against the U.S.

As of December 31, 2025, we had outstanding foreign exchange contracts to hedge currencies against the U.S.

dollar in the aggregate notional amount of $ 9.6 million and to hedge currencies against the Euro in the aggregate notional amount of 40.8 million Euro.

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The gain or loss associated with derivative instruments that are not designated as hedging instruments or that cease to meet the criteria for hedging under FASB guidance is reported immediately in Non-operating income (expense), net on the Condensed Consolidated Statements of Income.

Based on fair values as of September 30, 2025, we estimate that approximately $ 2.0 million of pre-tax derivative gain deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next 12 months.

Based on fair values as of December 31, 2025, we estimate that approximately $ 1.8 million of pre-tax derivative gain deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next 12 months.

Gains on foreign exchange contracts are generally offset by losses in operating income in the income statement when the underlying hedged transaction is recognized in earnings.

Because gains or losses on foreign exchange contracts fluctuate partially based on currency spot rates, the future effect on earnings of the cash flow hedges alone is not determinable, but in conjunction with the underlying hedged transactions, the result is expected to be a decline in currency risk.

The maximum length of time we had hedged our exposure to the variability in future cash flows was 12 months as of both September 30, 2025 and June 30, 2025.

See Note 9 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 6 - Accumulated Other Comprehensive Income (Loss) of Notes to Condensed Consolidated Financial Statements for the changes in deferred derivative gains and losses.

The maximum length of time we had hedged our exposure to the variability in future cash flows was 12 months as of both December 31, 2025 and June 30, 2025.

See Note 9 - Fair Value for further information regarding the fair value of derivative assets and liabilities and Note 6 - Accumulated Other Comprehensive Income (Loss) for the changes in deferred derivative gains and losses.

Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.

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Fair Value As of Fair Value As of

(Amounts in Thousands) Balance Sheet Location September 30,

(Amounts in Thousands) Balance Sheet Location December 31,

2025 June 30,

2025 Balance Sheet Location September 30,

2025 Balance Sheet Location December 31,

2025 June 30,

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The Effect of Derivative Instruments on Other Comprehensive Income (Loss)

Three Months Ended

Three Months Ended Six Months Ended

December 31 December 31

(Amounts in Thousands) 2025 2024 2025 2024

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The Effect of Derivative Instruments on Condensed Consolidated Statements of Income

Three Months Ended

(Amounts in Thousands) September 30

Three Months Ended Six Months Ended

(Amounts in Thousands) December 31 December 31

Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2025 2024 2025 2024

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The Company may also provide a discretionary contribution, to be authorized and determined annually by the Talent, Culture, and Compensation Committee of the Company’s Board of Directors.

Total expense related to employer contributions to the domestic retirement plans was $ 0.5 million and $ 0.4 million for the three months ended September 30, 2025 and September 30, 2024, respectively.

Total expense related to employer contributions to the domestic retirement plans was $ 1.0 million for both the six months ended December 31, 2025 and December 31, 2024, respectively.

The Company also maintains a supplemental employee retirement plan (“SERP”) for executives and other key employees which enables them to defer cash compensation on a pre-tax basis and restore amounts that would otherwise be payable under our tax-qualified retirement plans if the IRS did not have limits on includable compensation and maximum benefits.

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A SERP liability of the same amount is recorded on the balance sheet representing an obligation to distribute SERP funds to participants.

As of September 30, 2025, both total investments and obligations under SERP were $ 4.3 million, of which $ 0.6 million were short term and $ 3.7 million were long term.

As of December 31, 2025, both total investments and obligations under SERP were $ 4.4 million, of which $ 0.6 million were short term and $ 3.8 million were long term.

As of June 30, 2025, both total investments and obligations under SERP were $ 4.1 million, of which $ 0.5 million were short term and $ 3.6 million were long term.

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income as selling and administrative expenses and offset valuation adjustments on SERP investment assets.

The change in net unrealized holding (losses) gains for the three months ended September 30, 2025 and 2024 was approximately $ 0.2 million and $ 0.3 million, respectively.

The change in net unrealized holding (losses) gains for the six months ended December 31, 2025 and 2024 was approximately $ 0.3 million and $ 0.1 million, respectively.

Defined Benefit Postemployment Plan:

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Benefits are paid using available cash on hand when eligible employees meet plan qualifications for payment.

As of September 30, 2025, total obligations under these plans were $ 8.4 million of which $ 7.5 million were long term and $ 0.9 million were short term.

As of December 31, 2025, total obligations under these plans were $ 9.0 million of which $ 8.0 million were long term and $ 1.0 million were short term.

As of June 30, 2025, total obligations under these plans were $ 8.2 million of which $ 7.3 million were long term and $ 0.9 million were short term.

Net periodic benefit costs were not material for the three months ended September 30, 2025 and 2024.

Net periodic benefit costs were not material for the six months ended December 31, 2025 and 2024.

Stock Compensation Plans

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For more information on the 2023 Plan and the Deferral Plan, refer to our Annual Report on Form 10-K for the year ended June 30, 2025.

During the first three months of fiscal year 2026, the following stock compensation was granted under the 2023 Plan and the Deferral Plan.

During the first six months of fiscal year 2026, the following stock compensation was granted under the 2023 Plan and the Deferral Plan.

Stock Compensation Granted Quarter Granted Shares/Units Grant Date Fair Value (6)

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1st Quarter 169,851 $ 28.35

Unrestricted Shares (4)

2nd Quarter 20,555 $ 28.34

Deferred Share Units (5)

2nd Quarter 16,232 $ 28.34

(1) Long-term performance share awards were granted to key employees.

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If the employment of a holder of restricted shares terminates before the RSU has vested for any reason other than death, retirement, or disability, the restricted shares not yet vested will be forfeited.

(4) Unrestricted shares were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to be paid in unrestricted shares in lieu of cash payment or deferred share units.

Director’s fees are expensed over the period that directors earn the compensation.

Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions.

(5) Deferred share units were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to receive deferred share units in lieu of cash payment or unrestricted shares.

Director’s fees are expensed over the period that directors earn the compensation.

Deferred share units are participating securities and are payable in common stock in a lump sum or installments in accordance with deferral elections upon a Director’s retirement or termination from the Board or death.

(6) The grant date fair value is the weighted average stock price based on the dates of the grants for all grants, with the exception of the portion of the long-term performance shares based on rTSR, the fair value of which is determined by a Monte Carlo simulation completed by a third party.

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The Company determines if a contract is or contains a lease at inception.

The lease assets and liabilities, which exclude leases with terms of 12 months or less, as of September 30, 2025 and June 30, 2025, were as follows:

(Amounts in Thousands) September 30,

The lease assets and liabilities, which exclude leases with terms of 12 months or less, as of December 31, 2025 and June 30, 2025, were as follows:

(Amounts in Thousands) December 31,

2025 June 30,

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Operating lease liability, noncurrent (included in Other long-term liabilities) $ 15,227 $ 11,386

During the three months ended December 31, 2025, the Company received the $ 4.6 million tenant allowance associated with the Indiana manufacturing facility lease, which increased the operating lease liability as of December 31, 2025.

Share Owners’ Equity

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The Plan has no expiration date but may be suspended or discontinued at any time.

During the three months ended September 30, 2025 and 2024, the Company repurchased $ 1.5 million and $ 2.9 million, respectively, of common stock under the Plan at an average price of $ 30.01 per share and $ 18.01 per share, respectively, which was recorded in Treasury stock, at cost in the Consolidated Balance Sheets.

During the six months ended December 31, 2025 and 2024, the Company repurchased $ 5.8 million and $ 5.9 million, respectively, of common stock under the Plan at an average price of $ 29.08 per share and $ 18.60 per share, respectively, which was recorded in Treasury stock, at cost in the Consolidated Balance Sheets.

Since the inception of the Plan, the Company has repurchased $ 109.5 million of common stock at an average cost of $ 16.09 per share.

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Basic and diluted earnings per share were calculated as follows under the two-class method:

Three Months Ended

Three Months Ended Six Months Ended

December 31 December 31

(Amounts in thousands, except per share data) 2025 2024 2025 2024

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These decisions may include capital expenditures and/or acquisitions.

Expenditures for long-lived assets for the three months ended September 30, 2025 and 2024 $ 10.6 million and $ 13.5 million, respectively.

Expenditures for long-lived assets for the six months ended December 31, 2025 and 2024 $ 28.7 million and $ 20.0 million, respectively.

The measure of segment assets is reported on the Consolidated Balance Sheet as Total Assets;

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The following table presents significant operations segment net sales and expenses:

Three Months Ended

Three Months Ended Six Months Ended

December 31 December 31

(Amounts in Thousands) 2025 2024 2025 2024

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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