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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-05-06 · 145 added, 96 removed, 197 unchanged (55% of the section changed)

41 unchanged sentences

Executive Summary

For the first quarter of 2026, the Company recognized net sales of $657.0 million, an increase of $102.7 million, or 18.5% as compared to $554.3 million in the first quarter of 2025 including $33.2 million, or 6.0% of incremental net sales, from the Basler acquisition within the Industrial segment and $17.5 million, or 3.2% of favorable changes in foreign exchange rates.

For the second quarter of 2026, the Company recognized net sales of $738.8 million, an increase of $125.4 million, or 20.4% as compared to $613.4 million in the second quarter of 2025 including $35.8 million, or 5.8% of incremental net sales, from the Basler acquisition within the Industrial segment and $4.1 million, or 0.7% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume in the Electronics segment.

The Company recognized net income of $75.1 million, or $2.96 per diluted share, in the first quarter of 2026 compared to $43.6 million, or $1.75 per diluted share, in the first quarter of 2025.

The increase in net income was primarily due to higher operating income of $23.5 million from the Electronics segment driven by increases in net sales and volume leverage.

Net cash provided by operating activities was $80.3 million for the three months ended March 28, 2026 compared to $65.8 million for the three months ended March 29, 2025.

The increase in net cash provided by operating activities of $14.5 million was primarily due to higher cash earnings, partially offset by increases in working capital primarily resulting from higher annual incentive bonus payments made in 2026 as compared to 2025.

The Company recognized net income of $89.4 million, or $3.49 per diluted share, in the second quarter of 2026 compared to $57.3 million, or $2.30 per diluted share, in the second quarter of 2025.

The increase in net income was primarily due to higher operating income of $37.1 million from the Electronics segment driven by higher net sales and volume leverage.

Net cash provided by operating activities was $226.5 million for the six months ended June 27, 2026 compared to $148.2 million for the six months ended June 28, 2025.

The increase in net cash provided by operating activities of $78.2 million was primarily due to higher cash earnings.

On March 12, 2026, the Company entered into an Amended and Restated Credit Agreement (the "Credit Agreement") to amend and restate and effect certain changes to its existing Credit Agreement, dated as of June 30, 2022 (the “Existing Credit Agreement”), including, among other changes:

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The following table summarizes the Company’s unaudited condensed consolidated results of operations for the periods presented.

The first quarter of 2026 included $7.4 million of restructuring charges primarily related to employee termination costs.

The second quarter of 2026 included $6.9 million ($14.3 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the second quarter of 2026, the Company recognized fixed asset impairment charges of $13.1 million, primarily related to the announced closure and/or disposition of two manufacturing sites for the semiconductor business within the Electronics segment.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

In addition, during the first quarter of 2026, the Company recognized $1.2 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2026, the Company recognized $5.4 million of purchase accounting inventory step-up adjustment related to the Basler acquisition.

The first quarter of 2025 included $8.9 million of restructuring charges primarily related to employee termination costs, and $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

In addition, during the second quarter of 2026, the Company recognized $0.4 million ($1.5 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2026, the Company recognized a $5.4 million of purchase accounting inventory step-up adjustment related to the Basler acquisition.

The second quarter of 2025 included $2.5 million ($11.4 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

During the first quarter of 2025, the Company recognized $0.5 million of purchase accounting inventory step-down adjustment related to the Dortmund acquisition, and $0.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

First Quarter

In addition, during the second quarter of 2025, the Company recognized $1.5 million ($1.6 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2025, the Company recognized a $0.5 million of purchase accounting inventory step-down adjustment related to the Dortmund Fab acquisition.

Second Quarter First Six Months

(in thousands) 2026 2025 Change %

Change 2026 2025 Change %

Net sales $ 738,781 $ 613,413 $ 125,368 20.4 % $ 1,395,750 $ 1,167,720 $ 228,030 19.5 %

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Net income 89,405 57,342 32,063 55.9 % 164,552 100,913 63,639 63.1 %

Net sales increased $102.7 million, or 18.5%, for the first quarter of 2026 compared to the first quarter of 2025 including $33.2 million or 6.0% of incremental net sales from the Basler acquisition within the Industrial segment and $17.5 million or 3.2% of favorable changes in foreign exchange rates.

The increase in net sales was primarily due to higher volume of $38.2 million and $17.4 million in the electronics products and semiconductor businesses within the Electronics segment, respectively, driven by higher end market demand and favorable price.

Net sales increased $125.4 million, or 20.4%, for the second quarter of 2026 compared to the second quarter of 2025 including $35.8 million, or 5.8% of incremental net sales from the Basler acquisition within the Industrial segment and $4.1 million, or 0.7% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $44.7 million and $26.1 million in the electronics products and semiconductor businesses within the Electronics segment, respectively, driven by higher end market demand and favorable price, and higher volume from the industrial circuit protection products within the Industrial segment.

Net sales increased $228.0 million, or 19.5%, for the first six months of 2026 compared to the first six months of 2025 including $69.0 million, or 5.9% of incremental net sales from the Basler acquisition within the Industrial segment and $21.5 million, or 1.8% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $82.8 million and $43.4 million in the electronics products and semiconductor businesses within the Electronics segment, respectively, driven by higher end market demand and favorable price, and higher volume from the industrial circuit protection products within the Industrial segment.

Cost of Sales

Cost of sales was $402.8 million, or 61.3% of net sales, in the first quarter of 2026 compared to $347.1 million, or 62.6% of net sales, in the first quarter of 2025.

Cost of sales was $432.7 million, or 58.6% of net sales, in the second quarter of 2026 compared to $381.4 million, or 62.2% of net sales, in the second quarter of 2025.

The increase of $51.4 million included $20.8 million of incremental cost of sales from the Basler acquisition within the Industrial segment.

The remaining increase was due to higher volume across all segments.

As a percent of net sales, cost of sales decreased 1.3% primarily due to improved margin from the electronics products business within the Electronics segment, the industrial circuit protection products business within the Industrial segment, and the passenger car products business within the Transportation segment driven by volume leverage and favorable product mix.

The remaining increase was due to higher volume in the Electronics segment.

As a percent of net sales, cost of sales decreased 3.6% primarily due to improved margin from the Electronics segment and the industrial circuit protection products business within the Industrial segment driven by volume leverage, operational execution, and favorable product mix.

The improved margin was also favorably impacted by higher gross margin from the Basler acquisition.

Cost of sales was $835.5 million, or 59.9% of net sales, in the first six months of 2026 compared to $728.4 million, or 62.4% of net sales, in the first six months of 2025.

The increase of $107.1 million included $45.9 million of incremental cost of sales from the Basler acquisition within the Industrial segment.

The remaining increase was due to higher volume in the Electronics segment.

As a percent of net sales, cost of sales decreased 2.5% primarily due to improved margin in the Electronics segment and the industrial circuit protection products business within the Industrial segment driven by volume leverage and operational execution.

The improved margin was also favorably impacted by higher gross margin from the Basler acquisition, partially offset by purchase accounting inventory charges of $5.4 million, or 0.4%.

Gross profit was $254.1 million, or 38.7% of net sales, in the first quarter of 2026 compared to $207.3 million, or 37.4% of net sales, in the first quarter of 2025.

The increase of $46.9 million in gross profit and the improved gross margin were primarily due to higher volume and favorable price and product mix from the electronics products business within the Electronics segment and the industrial circuit protection business within the Industrial segment.

Additionally, gross margin was higher due to the passenger car products business within the Transportation segment and higher gross margin from the Basler acquisition, partially offset by the purchase accounting inventory charges of $5.4 million or 0.8%.

Gross profit was $306.1 million, or 41.4% of net sales, in the second quarter of 2026 compared to $232.1 million, or 37.8% of net sales, in the second quarter of 2025.

The increase of $74.0 million in gross profit and the improved gross margin of 3.6% were primarily due to higher volume and favorable price, operational execution, and favorable product mix from the Electronics segment and the industrial circuit protection business within the Industrial segment.

Additionally, gross margin was higher due to higher gross margin from the Basler acquisition.

Gross profit was $560.2 million, or 40.1% of net sales, in the first six months of 2026 compared to $439.3 million, or 37.6% of net sales, in the first six months of 2025.

The increase of $120.9 million in gross profit and the improved gross margin of 2.5% were primarily due to higher volume, operational execution, and favorable product mix from the Electronics segment and the industrial circuit protection business within the Industrial segment.

Additionally, gross margin was higher due to higher gross margin from the Basler acquisition, partially offset by the purchase accounting inventory charges of $5.4 million, or 0.4%.

Operating Expenses

Operating expenses were $153.0 million, or 23.3% of net sales, for the first quarter of 2026 compared to $137.1 million, or 24.7% of net sales, for the first quarter of 2025.

The increase in operating expenses of $15.9 million was primarily driven by incremental operating expenses of $11.8 million from the Basler acquisition.

Operating expenses were $186.3 million, or 25.2% of net sales, for the second quarter of 2026 compared to $139.3 million, or 22.7% of net sales, for the second quarter of 2025.

The increase in operating expenses of $47.1 million was primarily due to higher selling, general, and administrative expenses of $25.1 million due to higher annual incentive expenses and incremental operating expenses of $11.7 million from the Basler acquisition, and higher restructuring, impairment, and other charges of $17.5 million, which included $13.1 million of fixed asset impairment charges primarily related to the announced closure and/or disposition of two manufacturing sites for the semiconductor business within the Electronics segment.

Operating expenses were $339.3 million, or 24.3% of net sales, for the first six months of 2026 compared to $276.4 million, or 23.7% of net sales, for the first six months of 2025.

The increase in operating expenses of $62.9 million was primarily driven by higher annual incentive expenses and incremental operating expenses of $23.5 million from the Basler acquisition, higher restructuring, impairment, and other charges of $15.9 million, which included $13.1 million of fixed asset impairment charges primarily related to the announced closure and/or disposition of two manufacturing sites for the semiconductor business within the Electronics segment., and higher research and development expenses of $8.3 million.

Operating Income

Operating income was $101.2 million, representing an increase of $31.0 million, or 44.2%, for the first quarter of 2026 compared to $70.2 million for the first quarter of 2025.

The increase in operating income was due to higher gross profit from

the electronics products business within the Electronics segment, the industrial circuit protection products business within the Industrial segment, and the passenger car products business within the Transportation segment, partially offset by higher operating expenses mainly driven by the Basler acquisition noted above.

Operating margins increased from 12.7% in the first quarter of 2025 to 15.4% in the first quarter of 2026 driven by improved gross margin from the electronics products business within the Electronics segment, the industrial circuit protection products business within the Industrial segment, and the passenger car products business within the Transportation segment driven by volume leverage and favorable price and product mix.

Operating income was $119.7 million, representing an increase of $26.9 million, or 29.0%, for the second quarter of 2026 compared to $92.8 million for the second quarter of 2025.

The increase in operating income was due to higher gross profit from the Electronics segment and the industrial circuit protection products business within the Industrial segment, partially offset by higher operating expenses noted above.

Operating margins increased from 15.1% in the second quarter of 2025 to 16.2% in the second quarter of 2026 due to improved gross margin from the Electronics segment and the industrial circuit protection products business within the Industrial segment driven by volume leverage, operational execution, and favorable price and product mix and incremental operating income from the Basler acquisition, partially offset by higher selling, general, and administrative expenses and restructuring, impairment, and other charges noted above.

Operating income was $220.9 million, representing an increase of $58.0 million, or 35.6%, for the first six months of 2026 compared to $162.9 million for the first six months of 2025.

The increase in operating income was due to higher gross profit from the Electronics segment, the industrial circuit protection products business within the Industrial segment, and the passenger car products business within the Transportation segment, partially offset by higher operating expenses mainly driven by the Basler acquisition noted above.

Operating margins increased from 14.0% in the first six months of 2025 to 15.8% in the first six months of 2026 due to improved gross margin from the electronics products business within the Electronics segment and the industrial circuit protection products business within the Industrial segment driven by volume leverage, operational execution and favorable price and product mix, partially offset by higher selling, general, and administrative expenses, and restructuring, impairment, and other charges noted above.

Income Before Income Taxes

Income before income taxes was $96.7 million, or 14.7% of net sales, for the first quarter of 2026 compared to $59.9 million, or 10.8% of net sales, for the first quarter of 2025.

In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily benefited by foreign exchange gains of $2.4 million in the first quarter of 2026 compared to foreign exchange losses of $4.8 million in the first quarter of 2025, and lower unrealized losses of $1.5 million in the first quarter of 2026 compared to the first quarter of 2025 related to the Company's equity investment.

The effective tax rate for the three months ended March 28, 2026 was 22.3% compared to the effective tax rate for the three months ended March 29, 2025 of 27.3%.

The effective tax rate for 2026 was lower than the effective tax rate for the comparable 2025 period primarily due to lapses in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter of 2026.

The effective tax rate for three months ended March 28, 2026 was higher than the statutory tax rate primarily due to losses in non-U.S.

jurisdictions with no related tax benefit, partially offset by lapses in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

The effective tax rate for the three months ended March 29, 2025 was higher than the statutory tax rate primarily due to losses in non-US jurisdictions with no related tax benefit.

Income before income taxes was $117.1 million, or 15.8% of net sales, for the second quarter of 2026 compared to $78.2 million, or 12.8% of net sales, for the second quarter of 2025.

Income before income taxes was $213.8 million, or 15.3% of net sales, for the first six months of 2026 compared to $138.2 million, or 11.8% of net sales, for the first six months of 2025.

The effective tax rate for the three and six months ended June 27, 2026 was 23.6% and 23.0%, respectively, compared to the effective tax rate for the three and six months ended June 28, 2025 of 26.7% and 27.0%, respectively.

The effective tax rate for 2026 was lower than the effective tax rate for the comparable 2025 periods primarily due to lapses in the statute of limitations for previously unrecognized tax benefits and excess tax benefits for share based compensation recognized in 2026, as well as foreign exchange losses in non-U.S.

jurisdictions with no related tax benefit recognized in 2025.

The effective tax rate for the three and six months ended June 27, 2026 was higher than the statutory tax rate primarily due to losses in non-U.S.

jurisdictions with no related tax benefit, partially offset by lapses in the statute of limitations for previously unrecognized tax benefits as well as excess tax benefits for share based compensation.

The effective tax rate for the three and six months ended June 28, 2025 was higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit.

Segment Results of Operations

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The following table is a summary of the Company’s net sales and operating income by segment:

Net Sales First Quarter

Net Sales Second Quarter First Six Months

(in thousands) 2026 2025 Change %

Change 2026 2025 Change %

Electronics $ 406,420 $ 335,666 $ 70,754 21.1 % $ 769,195 $ 642,915 $ 126,280 19.6 %

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Total $ 738,781 $ 613,413 $ 125,368 20.4 % $ 1,395,750 $ 1,167,720 $ 228,030 19.5 %

Segment Operating Income First Quarter

Segment Operating Income Second Quarter First Six Months

(in thousands) 2026 2025 Change %

Change 2026 2025 Change %

Electronics $ 86,916 $ 49,861 $ 37,055 74.3 % $ 157,195 $ 96,627 $ 60,568 62.7 %

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Total operating income $ 119,724 $ 92,778 $ 26,946 29.0 % $ 220,889 $ 162,928 $ 57,961 35.6 %

(a) Included in “Other” Operating income for the first quarter of 2026 was $7.4 million of restructuring charges primarily related to employee termination costs.

(a) Included in "Other" Operating income for the second quarter of 2026 was $6.9 million ($14.3 million year-to-date) of restructuring charges primarily related to employee termination costs.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

addition, during the first quarter of 2026, the Company recognized $1.2 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2026, the Company recognized $5.4 million of purchase accounting inventory step-up adjustment related to the Basler acquisition.

Included in “Other” Operating income for the first quarter of 2025 was $8.9 million of restructuring charges primarily related to employee termination costs, and $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

During the first quarter of 2026, the Company recognized a $5.4 million of purchase accounting inventory step-up adjustment related to the Basler acquisition.

Included in "Other" Operating income for the second quarter of 2025 was $2.5 million ($11.4 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

During the first quarter of 2025, the Company recognized a $0.5 million of purchase accounting inventory step-down adjustment related to the Dortmund Fab acquisition.

Electronics Segment

Net sales increased $55.5 million, or 18.1%, in the first quarter of 2026 compared to the first quarter of 2025 and included favorable changes in foreign exchange rates of $10.5 million or 3.4%.

Net sales increased $70.8 million, or 21.1%, in the second quarter of 2026 compared to the second quarter of 2025 and included favorable changes in foreign exchange rates of $2.6 million, or 0.8%.

The net sales increase was primarily due to higher volume of $44.7 million and $26.1 million in the electronics products and semiconductor businesses, respectively, driven by higher end market demand and favorable price.

Net sales increased $126.3 million, or 19.6%, in the first six months of 2026 compared to the first six months of 2025 and included favorable changes in foreign exchange rates of $13.0 million, or 2.0%.

The net sales increase was primarily due to higher volume of $82.8 million and $43.4 million in the electronics products and semiconductor businesses, respectively, driven by higher end market demand and favorable price.

Operating Income

Operating income was $70.3 million, representing an increase of $23.5 million, or 50.3%, for the first quarter of 2026 compared to $46.8 million for the first quarter of 2025.

Operating income was $86.9 million, representing an increase of $37.1 million, or 74.3%, for the second quarter of 2026 compared to $49.9 million for the second quarter of 2025.

The increase in operating income was primarily due to volume leverage, favorable product mix, and operational execution.

Operating margins increased from 14.9% in the second quarter of 2025 to 21.4% in the second quarter of 2026 primarily due to volume leverage, operational execution and favorable price and product mix from the electronics products and the semiconductor businesses.

Operating income was $157.2 million, representing an increase of $60.6 million, or 62.7%, for the first six months of 2026 compared to $96.6 million for the first six months of 2025.

The increase in operating income was primarily from the electronics products business due to volume leverage and favorable product mix.

Operating margins increased from 15.2% in the first quarter of 2025 to 19.4% in the first quarter of 2026 primarily due to volume leverage and favorable price and product mix from the electronics products business.

Operating margins increased from 15.0% in the first six months of 2025 to 20.4% in the first six months of 2026 primarily due to volume leverage, operational execution, and favorable price and product mix from the electronics products and the semiconductor businesses.

Transportation Segment

Net sales increased $8.5 million, or 5.3%, in the first quarter of 2026 compared to the first quarter of 2025 and included favorable changes in foreign exchange rates of $6.2 million or 3.8%.

The remaining net sales increase was due to higher volume in the passenger car products business driven by higher market demand with vehicle content growth.

Net sales increased $3.0 million, or 1.7%, in the second quarter of 2026 compared to the second quarter of 2025 and included favorable changes in foreign exchange rates of $1.7 million, or 1.0%.

The remaining net sales increase was due to higher volume in the commercial vehicle business within the Asia region, partially offset by lower volume from the automotive sensors business driven by the strategic exit of certain lower margin products.

Net sales increased $11.5 million, or 3.4%, in the first six months of 2026 compared to the first six months of 2025 and included favorable changes in foreign exchange rates of $7.9 million, or 2.3%.

The remaining net sales increase was due to higher volume in the passenger car products and the commercial vehicle businesses, partially offset by lower volume from the automotive sensors business driven by the strategic exit of certain lower margin products.

Operating Income

Operating income was $24.1 million, representing an increase of $5.2 million, or 27.4%, for the first quarter of 2026 compared to $18.9 million for the first quarter of 2025.

The increase in operating income was primarily due to higher gross margin from the passenger car products business driven by volume leverage and operational execution.

Operating margins increased from 11.7% in the first quarter of 2025 to 14.1% in the first quarter of 2026.

Operating income was $25.7 million, representing a decrease of $2.4 million, or 8.5%, for the second quarter of 2026 compared to $28.1 million for the second quarter of 2025.

The decrease in operating income was primarily due to lower gross margin from the commercial vehicles business impacted by cost inflation and unfavorable product mix.

Operating margins decreased from 15.6% in the second quarter of 2025 to 14.1% in the second quarter of 2026 due to lower gross margin from the commercial vehicle business.

Operating income was $49.8 million, representing an increase of $2.8 million, or 6.0%, for the first six months of 2026 compared to $47.0 million for the first six months of 2025.

The increase in operating income was primarily due to higher volume from the passenger car products business driven by vehicle content growth.

Operating margins increased from 13.8% in the first six months of 2025 to 14.1% in the first six months of 2026.

The increase in operating margin is due to improved gross margin in the passenger car products business and operational execution.

Industrial Segment

Net sales increased $38.6 million, or 45.3%, in the first quarter of 2026 compared to the first quarter of 2025 including $33.2 million of incremental net sales from the Basler acquisition and favorable changes in foreign exchange rates of $0.8 million or 1.0%.

The remaining net sales increase was due to higher net sales from the industrial circuit protection products driven by higher volume, partially offset by lower volume from industrial control and sensor products.

Net sales increased $51.6 million, or 52.5%, in the second quarter of 2026 compared to the second quarter of 2025 including $35.8 million, or 36.4% of incremental net sales from the Basler acquisition and unfavorable changes in foreign exchange rates of $0.2 million, or 0.2%.

The remaining net sales increase was from the industrial circuit protection products driven by higher volume.

Net sales increased $90.2 million, or 49.2%, in the first six months of 2026 compared to the first six months of 2025 including $69.0 million, or 37.6% of incremental net sales from the Basler acquisition and favorable changes in foreign exchange rates of $0.6 million or 0.4%.

The remaining net sales increase was from the industrial circuit protection products driven by higher volume, partially offset by lower volume from industrial control and sensor products.

Operating Income

Operating income was $20.8 million, representing an increase of $7.7 million, or 58.8%, for the first quarter of 2026 compared to $13.1 million for the first quarter of 2025.

The increase in operating income was due to higher gross margin from the industrial circuit protection products driven by volume leverage, operational efficiencies, favorable product mix and the incremental increase from the Basler acquisition.

Operating margins increased from 15.3% in the first quarter of 2025 to 16.8% in the first quarter of 2026 due to improved gross margin in the industrial circuit protection products and the Basler acquisition

noted previously, partially offset by lower margin from industrial control and sensor products and higher amortization expenses of $2.9 million related to the Basler acquisition.

Operating income was $27.5 million, representing an increase of $8.6 million, or 45.7%, for the second quarter of 2026 compared to $18.9 million for the second quarter of 2025.

Operating margins decreased from 19.2% in the second quarter of 2025 to 18.3% in the second quarter of 2026 due to higher amortization expenses of $2.9 million, or 2.0% related to the Basler acquisition noted previously, partially offset by improved gross margin in the industrial circuit protection products.

Operating income was $48.2 million, representing an increase of $16.3 million, or 51.0%, for the first six months of 2026 compared to $31.9 million for the first six months of 2025.

Operating margins increased from 17.4% in the first six months of 2025 to 17.6% in the first six months of 2026 due to improved gross margin in the industrial circuit protection products and the Basler acquisition noted previously, partially offset by higher amortization expenses of $5.9 million, or 2.2% related to the Basler acquisition.

Geographic Net Sales Information

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The following table is a summary of the Company’s net sales by geography:

First Quarter

Second Quarter First Six Months

(in thousands) 2026 2025 Change %

Change 2026 2025 Change %

Americas $ 306,987 $ 249,440 $ 57,547 23.1 % $ 568,833 $ 474,130 $ 94,703 20.0 %

2 unchanged sentences

Total $ 738,781 $ 613,413 $ 125,368 20.4 % $ 1,395,750 $ 1,167,720 $ 228,030 19.5 %

Net sales increased $37.2 million, or 16.5%, in the first quarter of 2026 compared to the first quarter of 2025 and included favorable changes in foreign exchange rates of $0.8 million.

The increase in net sales was primarily due to incremental net sales of $29.9 million from the Basler acquisition within the Industrial segment, and higher volume from the electronics products business within the Electronics segment, partially offset by lower volume from the commercial vehicle business within the Transportation segment and industrial control and sensor products within the Industrial segment.

Net sales increased $43.0 million, or 20.9%, in the first quarter of 2026 compared to the first quarter of 2025 and included favorable changes in foreign exchange rates of $2.3 million.

The remaining increase in net sales was primarily due to higher volume from the Electronics segment and the industrial circuit protection products within the Industrial segment, and incremental net sales of $1.8 million from the Basler acquisition within the Industrial segment.

Net sales increased $22.5 million, or 18.1%, in the first quarter of 2026 compared to the first quarter of 2025 and included favorable changes in foreign exchange rates of $14.4 million.

The remaining increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment and across all businesses within the Transportation segment and incremental net sales of $1.5 million from the Basler acquisition within the Industrial segment.

Net sales increased $57.5 million, or 23.1%, in the second quarter of 2026 compared to the second quarter of 2025.

The increase in net sales was primarily due to incremental net sales of $31.6 million, or 12.7% from the Basler acquisition within the Industrial segment, and higher volume from all businesses within the Electronics segment and the industrial circuit protection products within the Industrial segment.

Net sales increased $94.7 million, or 20.0%, in the first six months of 2026 compared to the first six months of 2025 and included favorable changes in foreign exchange rates of $0.8 million.

The increase in net sales was primarily due to incremental net sales of $61.5 million, or 13.0% from the Basler acquisition within the Industrial segment, and higher volume from all businesses within the Electronics segment and the industrial circuit protection products within the Industrial segment, partially offset by lower volume from the industrial control and sensor products within the Industrial segment and the commercial vehicle business within the Transportation segment.

Net sales increased $61.7 million, or 27.6%, in the second quarter of 2026 compared to the second quarter of 2025 and included favorable changes in foreign exchange rates of $0.6 million and incremental net sales of $2.2 million from the Basler acquisition within the Industrial segment.

The remaining increase in net sales was primarily due to higher volume from all businesses within the Electronics segment, the industrial circuit protection products within the Industrial segment, and the commercial vehicles business within the Transportation segment.

Net sales increased $104.7 million, or 24.4%, in the first six months of 2026 compared to the first six months of 2025 and included favorable changes in foreign exchange rates of $2.9 million.

The remaining increase in net sales was primarily due to higher volume from all businesses within the Electronics segment and the industrial circuit protection products within the Industrial segment, and incremental net sales of $4.0 million from the Basler acquisition within the Industrial segment.

Net sales increased $6.1 million, or 4.4%, in the second quarter of 2026 compared to the second quarter of 2025 and included favorable changes in foreign exchange rates of $3.5 million, or 2.5%.

The remaining increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment and incremental net sales of $2.0 million from the Basler acquisition within the Industrial segment, partially offset by lower volume from the passenger car products business within the Transportation segment and the semiconductor business within the Electronics segment.

Net sales increased $28.7 million, or 10.8%, in the first six months of 2026 compared to the first six months of 2025 and included favorable changes in foreign exchange rates of $17.8 million, or 6.7%.

The remaining increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment and incremental net sales of $3.5 million from the Basler acquisition within the Industrial segment.

Liquidity and Capital Resources

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Management expects that the Company’s (i) current level of cash, cash equivalents, and marketable securities, (ii) current and forecasted cash flows from operations, (iii) availability under existing funding arrangements, and (iv) access to capital in the capital markets will provide sufficient funds to support the Company’s operations, capital expenditures, investments, and debt obligations on both a short-term and long-term basis.

Cash and cash equivalents were $481.7 million as of March 28, 2026, a decrease of $81.7 million, as compared to December 27, 2025.

As of March 28, 2026, $67.6 million of the Company's $481.7 million cash and cash equivalents was held by U.S.

Cash and cash equivalents were $628.2 million as of June 27, 2026, an increase of $64.8 million, as compared to December 27, 2025.

As of June 27, 2026, $139.3 million of the Company's $628.2 million cash and cash equivalents was held by U.S.

subsidiaries.

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and (iii) extending the maturity date to March 12, 2031 (the “Maturity Date”).

As a result of entering into the Credit Agreement, the Company paid off

$62.5 million of the term loan and replaced $200 million of the term loan under the Existing Credit Agreement with $200 million borrowing under the revolving credit facility under the Credit Agreement.

As a result of entering into the Credit Agreement, the Company paid off $62.5 million of the term loan and replaced $200 million of the term loan under the Existing Credit Agreement with $200 million borrowing under the revolving credit facility under the Credit Agreement.

Pursuant to the Credit Agreement, the Company may, from time to time, increase the size of the revolving credit facility or enter into one or more tranches of term loans in minimum increments of $25 million if there is no event of default and the Company is in compliance with certain financial covenants.

The principal balance of the revolving credit facility is due on the Maturity Date.

The revolving loan balances under the Credit Facility were $200.0 million as of March 28, 2026.

The revolving loan balances under the Credit Facility were $200.0 million as of June 27, 2026.

Prior to entering into the Credit Agreement, the Company paid off $100.0 million of the revolving loan and $3.8 million of the term loan under the Existing Credit Agreement during the first quarter of 2026.

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The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027.

As of March 28, 2026, the effective interest rate on the outstanding borrowings under the Credit Facility was 3.88% on the hedged portion.

As of March 28, 2026, the Company had $1.2 million outstanding letters of credit and had $598.8 million of borrowing capacity available under the revolving credit facility.

As of March 28, 2026, the Company was in compliance with all covenants under the Credit Agreement.

As of June 27, 2026, the effective interest rate on the outstanding borrowings under the Credit Facility was 3.88% with the hedge.

As of June 27, 2026, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility.

As of June 27, 2026, the Company was in compliance with all covenants under the Credit Agreement.

On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold €212 million aggregate principal amount of senior notes in two series.

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Senior Notes, Series A due 2025”) and $125 million in aggregate principal amount of 3.78% Senior Notes, Series B, due February 15, 2030 (“U.S.

Senior Notes, Series B due 2030”)

(together, the “U.S.

Senior Notes, Series B due 2030”) (together, the “U.S.

Senior Notes due 2025 and 2030”) were funded.

During the first fiscal quarter of 2025, the Company paid off $50 million of U.S.

During the first quarter of 2025, the Company paid off $50 million of U.S.

Senior Notes, Series A, due 2025.

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Debt Covenants

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of March 28, 2026 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2025.

As of March 28, 2026, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

On December 11, 2025, the Company completed the acquisition of Basler.

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of June 27, 2026 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2026.

As of June 27, 2026, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

On December 11, 2025, the Company completed the acquisition of Basler Electric Company ("Basler").

Basler is a leading designer and manufacturer of innovative electrical control and protection solutions for high-growth industrial markets including grid and utility infrastructure, power generation and data center.

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The acquisition was funded with the Company's cash on hand.

During the first quarter of 2026, the Company paid quarterly dividends of $18.8 million to its shareholders.

On May 6, 2026, the Company announced the declaration of a quarterly cash dividend of $0.75 per share payable on June 4, 2026 to stockholders of record as of May 21, 2026.

During the second quarter of 2026, the Company paid quarterly dividends of $19.0 million to its shareholders.

On July 29, 2026, the Company announced the declaration of a quarterly cash dividend of $0.80 per share, a 7% increase from the first quarter, payable on September 3, 2026 to stockholders of record as of August 20, 2026.

Cash Flow Overview

First Three Months

First Six Months

(in thousands) 2026 2025

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Effect of exchange rate changes on cash, cash equivalents, and restricted cash (3,035) 22,468

Decrease in cash, cash equivalents, and restricted cash (81,731) (106,181)

Increase (decrease) in cash, cash equivalents, and restricted cash 64,772 (39,554)

Cash, cash equivalents, and restricted cash at beginning of period 565,104 726,437

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Operating cash outflows are largely attributable to recurring expenditures for raw materials, labor, rent, interest, taxes, and other operating activities.

Net cash provided by operating activities was $80.3 million for the three months ended March 28, 2026 compared to $65.8 million for the three months ended March 29, 2025.

Net cash provided by operating activities was $226.5 million for the six months ended June 27, 2026 compared to $148.2 million for the six months ended June 28, 2025.

The increase in net cash provided by operating activities of $78.2 million was primarily due to higher cash earnings.

Cash Flow from Investing Activities

Net cash used in investing activities was $16.6 million for the three months ended March 28, 2026 compared to $80.5 million during the three months ended March 29, 2025.

The Company made a payment of $2.5 million for the Basler acquisition during the three months ended March 28, 2026.

Net cash paid for the Dortmund Fab acquisition was $57.4 million during the three months ended March 29, 2025.

Capital expenditures for the three months ended March 28, 2026 were $14.1 million, representing a decrease of $9.0 million, compared to the three months ended March 29, 2025.

Net cash used in investing activities was $26.7 million for the six months ended June 27, 2026 compared to $89.7 million during the six months ended June 28, 2025.

Capital expenditures for the six months ended June 27, 2026 were $33.0 million compared to $33.0 million for the six months ended June 28, 2025.

The Company made a payment of $2.8 million for the Basler acquisition during the six months ended June 27, 2026.

Net cash paid for the Dortmund Fab acquisition was $57.4 million during the six months ended June 28, 2025.

In addition, the Company received proceeds of $7.4 million from the sale of the investment in Polytronics Technology Corporation Ltd.

(“Polytronics”) and $1.7 million from an asset held for sale from the Basler acquisition during the six months ended June 27, 2026.

Cash Flow from Financing Activities

Net cash used in financing activities was $142.7 million for the three months ended March 28, 2026 compared to $97.0 million for the three months ended March 29, 2025.

Net cash used in financing activities was $131.9 million for the six months ended June 27, 2026 compared to $120.5 million for the six months ended June 28, 2025.

On March 12, 2026, the Company entered into the Credit Agreement to amend and restate and effect certain changes to its existing credit agreement, dated as of June 30, 2022.

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Prior to the amendment on March 12, 2026, the Company paid off $100.0 million of the revolving credit facility and $3.8 million of the term loan under the prior Credit Agreement during the first quarter of 2026.

During the three months ended March 29, 2025, the Company paid off $50.0 million of U.S.

During the six months ended June 28, 2025, the Company paid off $50.0 million of U.S.

Senior Notes, Series A, due February 15, 2025 and made payments of $7.5 million on the term loan.

The Company received $45.2 million net proceeds related to stock-based award activities during the three months ended March 28, 2026 compared to $2.1 million for the three months ended March 29, 2025.

In addition, the Company paid dividends of $18.8 million and $17.3 million in the three months ended March 28, 2026 and March 29, 2025, respectively.

During the three months ended March 29, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million.

The Company received $75.6 million of net proceeds related to stock-based award activities during the six months ended June 27, 2026 compared to $0.6 million for the six months ended June 28, 2025.

In addition, the Company paid dividends of $37.9 million and $34.7 million in the six months ended June 27, 2026 and June 28, 2025, respectively.

During the six months ended June 28, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million.

Share Repurchase Program

On April 25, 2024, the Company's Board of Directors authorized a three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period from May 1, 2024 to April 30, 2027 ("2024 program").

The Company did not repurchase any shares of its common stock for the three months ended March 28, 2026.

During the three months ended March 29, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program.

The Company did not repurchase any shares of its common stock for the three and six months ended June 27, 2026.

The Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program during the first quarter of 2025.

The Company did not repurchase any shares of its common stock for the three months ended June 28, 2025.

Off-Balance Sheet Arrangements

As of March 28, 2026, the Company did not have any off-balance sheet arrangements, as defined under SEC rules.

Specifically, the Company was not liable for guarantees of indebtedness owed by third parties, the Company was not directly liable for the

debt of any unconsolidated entity and the Company did not have any retained or contingent interest in assets.

As of June 27, 2026, the Company did not have any off-balance sheet arrangements, as defined under SEC rules.

Specifically, the Company was not liable for guarantees of indebtedness owed by third parties, the Company was not directly liable for the debt of any unconsolidated entity and the Company did not have any retained or contingent interest in assets.

The Company does not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

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The significant accounting policies and critical accounting estimates are consistent with those discussed in Note 1, Summary of Significant Accounting Policies and Other Information , to the consolidated financial statements and the MD&A section of the Company’s Annual Report on Form 10-K for the year ended December 27, 2025.

During the three months ended March 28, 2026, there were no significant changes in the application of critical accounting policies and estimates.

During the six months ended June 27, 2026, there were no significant changes in the application of critical accounting policies and estimates.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Item 7A, " Quantitative and Qualitative Disclosures about Market Risk" , of the Company's Annual Report on Form 10-K for the year ended December 27, 2025.

During the three months ended March 28, 2026, there were no material changes in the Company's exposure to market risk.

During the six months ended June 27, 2026, there were no material changes in the Company's exposure to market risk.

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 2. Management’s Discussion and Analysis