What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-07 · 149 added, 89 removed, 175 unchanged (58% of the section changed)

12 unchanged sentences

• changes in economic or industry conditions generally or in the markets served by Manitowoc, including tariffs;

• geopolitical events, including the ongoing conflicts in Ukraine and in the Middle East, tariffs, other political and economic conditions and risks and other geographic factors, has had and may continue to lead to market disruptions, including volatility in commodity prices (including oil and gas), raw material and component costs, energy prices, inflation, consumer behavior, supply chain, and credit and capital markets, and could result in the impairment of assets;

• geopolitical events, including the ongoing conflicts in Ukraine and in the Middle East, tariffs, other political and economic conditions and risks and other geographic factors, have had and may continue to lead to market disruptions, including volatility in commodity prices (including oil and gas), raw material and component costs, energy prices, inflation, consumer behavior, supply chain, and credit and capital markets, and could result in the impairment of assets;

• changes in customer demand, including changes in global demand for high-capacity lifting equipment, changes in demand for lifting equipment in emerging economies and changes in demand for used lifting equipment including changes in government approval and funding of projects;

17 unchanged sentences

• the ability to significantly improve profitability;

• realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those savings, synergies and options;

• realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those enhancements, savings, synergies and options;

• the replacement cycle of technologically obsolete products;

12 unchanged sentences

• acts of terrorism;

• other risk factors detailed in Manitowoc's 2024 Annual Report on Form 10-K, as such may be amended or supplemented in Manitowoc’s subsequently filed Quarterly Reports on 10-Q (including this report), and its other filings with the United States Securities and Exchange Commission.

• other risks and factors detailed in Manitowoc's 2024 Annual Report on Form 10-K, as such may be amended or supplemented in Manitowoc's subsequently filed Quarterly Reports on Form 10-Q (including this report) and its other filings with the United States Securities and Exchange Commission.

These statements reflect the current views and assumptions of management with respect to future events.

9 unchanged sentences

The United States government shortly thereafter declared a 90-day suspension of reciprocal tariffs and implemented a 10% tariff on all imports, except for those from China, which are subject to a higher tariff.

During the 90-day suspension, the United States government announced non-binding trade deals with certain countries including the European Union, Japan, and the United Kingdom, among others.

The trade deals include varying baseline tariffs and specific industry exemptions or incremental tariffs.

Approximately 50% of the Company's total net sales are generated in the United States.

While most products are manufactured domestically, tariffs may affect demand, raise product costs, or disrupt the supply chain.

Considerable uncertainty regarding the final resolution of tariffs remain, however, the Company is assessing the impact and what measures can be taken to mitigate their effects.

While most of the Company's products are manufactured domestically, tariffs may affect demand, raise product costs, or disrupt the Company's supply chain.

Considerable uncertainty regarding industry specific exemptions and the final resolution of tariffs with other countries remain, however, the Company is assessing the impact and what measures can be taken to mitigate the effects.

Orders and Backlog

Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America ("GAAP") and our methodology for determining orders and backlog may vary from the methodology used by other companies.

Orders and backlog are not measures defined by GAAP and our methodology for determining orders and backlog may vary from the methodology used by other companies.

Management uses orders and backlog for capacity and resource planning.

2 unchanged sentences

Orders are included in backlog when an executed binding contract with a price that has a floor has been received but has not been recognized in net sales.

Orders for the three months ended March 31, 2025 increased 10.1% to $610.3 million from $554.1 million for the same period in 2024.

The increase was primarily attributable to higher demand in the Americas segment and tower product offerings in the EURAF segment.

Orders were unfavorably impacted by $5.9 million from changes in foreign currency exchange rates.

As of March 31, 2025, total backlog was $797.8 million, a 22.7% increase from the December 31, 2024 backlog of $650.2 million, and a 17.9% decrease from the March 31, 2024 backlog of $971.3 million.

Backlog was favorably impacted by $9.3 million and $0.4 million from December 31, 2024 and March 31, 2024, respectively, from changes in foreign currency exchange rates.

Results of Operations for the three months ended March 31, 2025 and 2024:

Orders for the three months ended June 30, 2025 increased 6.0% to $453.9 million from $428.4 million for the same period in 2024.

The increase was primarily attributable to higher demand in the Americas segment and for tower product offerings in the EURAF segment.

Orders were favorably impacted by $8.6 million from changes in foreign currency exchange rates.

Orders for the six months ended June 30, 2025 increased 8.3% to $1,064.2 million from $982.5 million for the same period in 2024.

The increase was primarily attributable to higher demand in the Americas segment and for tower product offerings in the EURAF segment.

Orders were favorably impacted by $2.7 million from changes in foreign currency exchange rates.

As of June 30, 2025, total backlog was $729.3 million, a 12.2% increase from the December 31, 2024 backlog of $650.2 million, and a 12.8% decrease from the June 30, 2024 backlog of $836.3 million.

Backlog was favorably impacted from changes in foreign currency exchange rates by $26.6 million and $20.8 million from December 31, 2024 and June 30, 2024, respectively.

Results of Operations For The Three and Six Months Ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

Percentage Change

Gross profit %

Engineering, selling, and administrative

Engineering, selling and

administrative expenses

Interest expense

Other income (expense) - net

Provision (benefit) for income taxes

*Measure not meaningful

Consolidated net sales for the three months ended March 31, 2025 decreased 4.9% to $470.9 million from $495.1 million for the same period in 2024.

This decrease was primarily attributable to $39.6 million of lower new machine sales in all segments as a result of product mix.

This was partially offset by $15.4 million of higher non-new machine sales primarily in the Americas and EURAF segments.

Net sales were unfavorably impacted by $5.7 million from changes in foreign currency exchange rates.

Gross profit for the three months ended March 31, 2025 decreased 2.9% to $89.8 million from $92.5 million for the same period in 2024.

This decrease was primarily due to lower net sales and lower absorbed costs due to lower manufacturing volume in the Americas segment, partially offset by favorable product mix.

Gross profit was unfavorably impacted by $1.1 million from changes in foreign currency exchange rates.

Gross profit percentage increased in the three months ended March 31, 2025 to 19.1% from 18.7% for the same period in 2024.

This increase was primarily due to favorable product mix, partially offset by lower absorbed costs due to lower manufacturing volume in the Americas segment.

Consolidated net sales for the three months ended June 30, 2025 decreased 4.0% to $539.5 million from $562.1 million in the same period in 2024.

This decrease was primarily attributable to $28.7 million of lower new machine sales in the Company's mobile product line in the EURAF segment and $23.6 million of lower new machine sales in the MEAP segment primarily due to lower crane shipments.

This was partially offset by $13.5 million of higher new machine sales in the Americas segment primarily due to favorable product mix and $17.0 million of higher non-new machine sales in the Americas and EURAF segments.

Net sales were favorably impacted by $8.4 million from changes in foreign currency exchange rates.

Consolidated net sales for the six months ended June 30, 2025 decreased 4.4% to $1,010.4 million from $1,057.2 million for the same period in 2024.

This decrease was primarily attributable to $49.0 million of lower new machine sales in the Company's mobile product line in the EURAF segment due to lower crane shipments, $24.2 million of lower new machine sales in the MEAP segment due to unfavorable product mix, and $17.7 million of lower new machine sales in the Americas

segment due to unfavorable product mix.

This was partially offset by $14.5 million of higher new machine sales in the Company's tower crane product line in the EURAF segment and $33.8 million of higher non-new machine sales in the Americas and EURAF segments.

Net sales were favorably impacted by $2.6 million from changes in foreign currency exchange rates.

Gross profit for the three months ended June 30, 2025 remained relatively flat at $99.0 million as compared to $99.7 million for the same period in 2024.

The lower net sales and lower absorbed costs due to lower manufacturing volume in the Americas segment were partially offset by favorable product mix.

Gross profit was favorably impacted by $1.2 million from changes in foreign currency exchange rates.

Gross profit percentage for the three months ended June 30, 2025 remained relatively flat at 18.4% as compared to 17.7% for the same period in 2024.

Favorable product mix was partially offset by lower absorbed costs due to lower manufacturing volume in the Americas segment.

Gross profit for the six months ended June 30, 2025 decreased 1.8% to $188.8 million from $192.2 million for the same period in 2024.

The decrease was primarily attributable to the lower net sales and lower absorbed costs due to lower manufacturing volume in the Americas segment, partially offset by favorable product mix.

Gross profit was favorably impacted by $0.1 million from changes in foreign currency exchange rates.

Gross profit percentage for the six months ended June 30, 2025 remained relatively flat at 18.7% from 18.2% for the same period in 2024.

Favorable product mix was partially offset by lower absorbed costs due to lower manufacturing volume in the Americas segment.

Engineering, Selling, and Administrative Expenses

Engineering, selling, and administrative expenses for the three months ended March 31, 2025 increased 9.1% to $82.9 million from $76.0 million for the same period in 2024.

The increase was primarily due to costs for the triennial bauma trade show, higher professional services fees, and higher new product development costs.

Engineering, selling, and administrative expenses were favorably impacted by $1.4 million from changes in foreign currency exchange rates.

Engineering, selling, and administrative expenses for the three months ended June 30, 2025 increased 4.4% to $87.4 million from $83.7 million for the same period in 2024.

The increase was primarily due to costs for the triennial bauma trade show and higher employee related costs.

This was partially offset by a $5.3 million charge related to a legal matter with the U.S.

Environmental Protection Agency ("EPA") in the prior year.

Engineering, selling, and administrative expenses were unfavorably impacted by $1.8 million from changes in foreign currency exchange rates.

Engineering, selling and administrative expenses for the six months ended June 30, 2025 increased 6.6% to $170.3 million from $159.7 million for the same period in 2024.

The increase was primarily due to costs for the triennial bauma trade show, higher employee related costs, and higher new product development costs This was partially offset by a $5.3 million charge related to a legal matter with the EPA in the prior year.

Engineering, selling, and administrative expenses were unfavorably impacted by $0.4 million from changes in foreign currency exchange rates.

Interest Expense

Interest expense for the three months ended March 31, 2025 decreased 5.4% to $8.7 million from $9.2 million for the same period in 2024.

The decrease was primarily due to lower average debt and lower interest rates on borrowings from the Company’s ABL revolving credit facility.

Interest expense for the three months ended June 30, 2025 was $9.2 million as compared to $9.6 million for the same period in 2024.

Interest expense decreased year-over-year primarily due to lower interest rates on borrowings from the Company's ABL revolving credit facility.

See further detail at Note 11, “Debt” to the Condensed Consolidated Financial Statements.

Interest expense for the six months ended June 30, 2025 was $17.9 million as compared to $18.8 million for the same period in 2024.

Interest expense decreased year-over-year primarily due to lower interest rates on borrowings from the Company's ABL revolving credit facility.

See further detail at Note 11, “Debt” to the Condensed Consolidated Financial Statements.

Other Income (Expense) - Net

Other income was $1.0 million during the three months ended June 30, 2025 and $0.3 million for the same period in 2024.

Other income during the three months ended June 30, 2025 was primarily composed of $2.0 million of currency gain.

This was partially offset by $0.5 million of pension related costs and $0.6 million of interest related to settlement of the matter with the U.S.

Environmental Protection Agency ("EPA").

Other income during the three months ended June 30, 2024 was primarily composed of $0.7 million of currency gain, partially offset by $0.7 million of pension related costs.

Other income (expense) - net was $(4.0) million during the six months ended June 30, 2025 and $1.0 million for the same period in 2024.

Other income (expense) - net during the six months ended June 30, 2025 was primarily composed of $2.9 million of currency loss and $1.0 million of pension related costs and $0.6 million of interest related to settlement of the matter with the EPA.

Other income (expense) – net during the six months ended June 30, 2024 was primarily composed of $1.8 million of currency gain, partially offset by $1.5 million of pension related costs.

Provision (Benefit) for Income Taxes

For the three months ended March 31, 2025 and 2024, the Company recorded a benefit for income taxes of $2.5 million and a provision for income taxes of $1.9 million, respectively.

Changes to jurisdictional mix and a year-to-date loss before income taxes resulted in a benefit for income taxes for the three months ended March 31, 2025 as compared to the prior year’s provision for income taxes.

For the three months ended June 30, 2025, and 2024, the Company recorded a benefit for income taxes of $0.2 million and a provision for income taxes of $1.6 million, respectively.

For the six months ended June 30, 2025 and 2024, the Company recorded a benefit for income taxes of $2.7 million and a provision for income taxes of $3.5 million, respectively.

Changes to jurisdictional mix and a year-to-date loss before income taxes resulted in a benefit for income taxes in the three and six months ended June 30, 2025 as compared to the prior year's provision for income taxes.

In addition, the Company's effective tax rate varies from the U.S.

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Three Months Ended

Six Months Ended

Dollar Change

Percentage Change

Segment Operating

Income (Loss)

Dollar Change

Percentage Change

Segment Operating Income (Loss)

*Measure not meaningful

Americas segment net sales decreased 8.4% for the three months ended March 31, 2025 to $259.3 million from $283.2 million for the same period in 2024.

The decrease was primarily attributable to $31.2 million of lower new machine sales, partially offset by $7.5 million of higher non-new machine sales.

Americas segment operating income decreased 40.0% for the three months ended March 31, 2025 to $17.7 million from $29.5 million for the same period in 2024.

The decrease was primarily due to lower net sales, lower absorbed costs due to lower manufacturing volume, and higher engineering, selling, and administrative expenses.

EURAF segment net sales increased 1.8% for the three months ended March 31, 2025 to $145.6 million from $143.0 million for the same period in 2024.

The increase was primarily due to higher tower crane sales and $10.2 million of higher non-new machine sales mainly from higher used crane sales.

This was partially offset by $7.7 million of lower new machine sales, mainly due to a lower number of mobile crane shipments.

Segment net sales were unfavorably impacted by $3.2 million from changes in foreign currency exchange rates.

EURAF segment operating loss remained relatively flat at $11.3 million for the three months ended March 31, 2025 as compared to $11.8 million for the same period in 2024.

Americas segment net sales increased 8.9% for the three months ended June 30, 2025 to $323.2 million from $296.7 million for the same period in 2024.

The increase was primarily attributable to $13.5 million of higher new machine sales due to favorable product mix, partially offset by lower new crane shipments.

Non-new machine sales for the three months ended June 30, 2025 increased $12.9 million when compared to the same period in 2024, primarily due to higher used crane shipments.

Americas segment operating income increased $2.2 million for the three months ended June 30, 2025 to $26.1 million from $23.9 million for the same period in 2024.

The increase was primarily attributable to higher net sales and favorable product mix.

This was partially offset by lower absorbed costs due to lower manufacturing volume.

Americas segment net sales remained relatively flat for the six months ended June 30, 2025 at $582.5 million as compared to $579.9 million for the same period in 2024.

Non-new machine sales for the six months ended June 30, 2025 increased $20.4 million when compared to the same period in 2024, primarily due to higher used crane shipments.

This was partially offset by $17.7 million in lower new machine sales due to unfavorable product mix.

Americas segment operating income decreased $9.6 million for the six months ended June 30, 2025 to $43.8 million from $53.4 million for the same period in 2024.

The decrease was primarily attributable lower absorbed costs due to lower manufacturing volume, partially offset by favorable product mix.

EURAF segment net sales decreased 13.5% for the three months ended June 30, 2025 to $152.5 million from $176.2 million for the same period in 2024.

The decrease was primarily attributable to $28.7 million of lower mobile crane sales.

This was partially offset by $2.0 million of higher tower cranes shipments and $4.1 million of higher non-new machine sales.

Segment net sales were favorably impacted by $7.9 million from changes in foreign currency exchange rates.

EURAF segment operating loss increased $7.8 million for the three months ended June 30, 2025 to $14.6 million from $6.8 million for the same period in 2024.

The increase in operating loss was primarily attributable to the lower net sales and higher engineering, selling and administrative expenses due to the triennial bauma trade show and higher new product development costs.

Segment operating income was unfavorably impacted by $0.7 million from changes in foreign currency exchange rates.

EURAF segment net sales decreased 6.6% for the six months ended June 30, 2025 to $298.1 million from $319.2 million for the same period in 2024.

The decrease was primarily attributable to $49.0 million of lower mobile cranes shipments.

This was partially offset by $14.5 million of higher tower crane shipments and $13.4 million of higher non-new machine sales.

Segment net sales were favorably impacted by $4.7 million from changes in foreign currency exchange rates.

EURAF segment operating loss increased $7.3 million for the six months ended June 30, 2025 to $25.9 million from $18.6 million for the same period in 2024.

Segment operating income was unfavorably impacted by $0.3 million from changes in foreign currency exchange rates.

MEAP segment net sales decreased 28.5% for the three months ended June 30, 2025 to $63.8 million from $89.2 million for the same period in 2024.

The decrease was primarily attributable to $23.6 million of lower new machine sales due to unfavorable product mix and $2.8 million of lower non-new machine sales.

Segment net sales were favorably impacted by $0.7 million from changes in foreign currency exchange rates.

MEAP segment operating income remained relatively flat for the three months ended June 30, 2025 at $9.8 million compared to $9.3 million for the same period in 2024, due to product mix.

Segment operating income was favorably impacted by $0.1 million from changes in foreign currency exchange rates.

MEAP segment net sales remained relatively flat at $66.0 million for the three months ended March 31, 2025 as compared to $68.9 million for the same period in 2024.

MEAP segment net sales decreased 17.9% for the six months ended June 30, 2025 to $129.8 million from $158.1 million for the same period in 2024.

The decrease was primarily attributable to $24.2 million of lower new machine sales due to unfavorable product mix and $4.1 million of lower non-new machine sales.

Segment net sales were unfavorably impacted by $1.5 million from changes in foreign currency exchange rates.

MEAP segment operating income increased 39.0% for the three months ended March 31, 2025 to $11.4 million from $8.2 million for the same period in 2024.

The increase was primarily due to higher absorbed costs.

MEAP segment operating income increased $3.7 million for the six months ended June 30, 2025 to $21.2 million from $17.5 million for the same period in 2024.

The increase was primarily due to higher absorbed costs due to higher manufacturing volume.

Segment operating income was unfavorably impacted by $0.2 million from changes in foreign currency exchange rates.

Financial Condition

A summary of cash flows for the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended

Net cash provided by (used for) operating activities

A summary of cash flows for the six months ended June 30, 2025 and 2024 are as follows:

Six Months Ended

Dollar Change

Net cash used for operating activities

Net cash used for investing activities

1 unchanged sentence

Cash and cash equivalents

C ash Flows From Operating Activities

Net cash provided by operating activities of $12.9 million for the three months ended March 31, 2025 increased $43.5 million from net cash used for operating activities of $30.6 million for the same period in 2024.

This increase in net cash provided by operating activities was primarily due to $55.2 million of lower cash use from changes in operating assets and liabilities.

The lower cash use was primarily due to $23.1 million of lower cash outflows for inventory, $21.8 million of additional cash provided by accounts payable, accrued expenses, and other liabilities, and $11.7 million of additional cash provided by accounts receivable when compared to the prior year.

This was partially offset by lower net income (loss) adjusted for non-cash items.

Cash Flows From Operating Activities Cash flows used for operating activities of $54.8 million for the six months ended June 30, 2025 increased $35.2 million from $19.6 million for the same period in 2024.

The increase in net cash used for operating activities was primarily due to lower net income adjusted for non-cash items and $24.5 million of higher cash outflows related to net working capital.

The higher cash outflow in net working capital was primarily driven by additional cash outflows of $34.1 million for accounts receivable, $22.4 million for other assets, and $11.3 million for inventory.

This was partially offset by $59.3 million of additional cash inflows for accounts payable.

Cash Flows From Investing Activities

Net cash used for investing activities of $23.6 million for the three months ended March 31, 2025 increased $11.6 million from $12.0 million for the same period in 2024.

The increase in net cash used for investing activities was primarily due to $12.9 million of cash outflows related to the purchase of certain assets and territory from Ring Power Corporation.

Net cash used for investing activities of $29.5 million for the six months ended June 30, 2025 increased $7.9 million from $21.6 million for the same period in 2024.

The increase in net cash used for investing activities was primarily due to $12.9

million of cash outflows related to the purchase of certain assets and territory from Ring Power Corporation and $3.3 million of lower proceeds from the sale of property, plant, and equipment.

This was partially offset by $8.3 million of lower capital expenditures.

Cash Flows From Financing Activities

Net cash provided by financing activities of $3.2 million for the three months ended March 31, 2025 decreased $37.0 million from $40.2 million for the same period in 2024.

The decrease in net cash provided by financing activities was primarily driven by $15.0 million of payments on the revolving credit facility in the current year and $25.8 million of lower proceeds from other debt - net when compared to the prior year.

This is partially offset by $3.9 million of additional proceeds from the revolving credit facility when compared to the prior year.

Net cash provided by financing activities of $67.0 million for the six months ended June 30, 2025 increased $21.3 million from $45.7 million for the same period in 2024.

The increase in net cash provided by financing activities was primarily due to $24.5 million of additional net borrowings under the revolving credit facility.

Liquidity and Capital Resources

The Company’s liquidity position as of March 31, 2025 and December 31, 2024 is summarized as follows:

March 31, 2025

The Company’s liquidity position as of June 30, 2025, December 31, 2024 and June 30, 2024 is summarized as follows:

June 30, 2025

December 31, 2024

June 30, 2024

Cash and cash equivalents

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The Company believes its liquidity and expected cash flows from operations are sufficient to meet expected working capital, capital expenditure, and other general ongoing operational needs in the subsequent twelve months.

The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities, issuances of notes and other forms of debt financing as its sources of cash.

The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities and overdraft facilities, issuances of notes, and other forms of debt financing as its sources of cash.

The maximum availability under the Company’s current ABL Revolving Credit Facility is $325.0 million, of which $100.0 million is available to our German subsidiary.

5 unchanged sentences

There are six facilities, of which five facilities are denominated in Euros totaling €37.0 million and one facility denominated in Chinese Yuan totaling ¥30.0 million.

dollar availability as of March 31, 2025 for the six overdraft facilities is $44.2 million, with $16.8 million outstanding.

Outstanding debt as of March 31, 2025 and December 31, 2024 is summarized as follows:

March 31, 2025

dollar availability as of June 30, 2025 for the six facilities was $47.8 million, with $7.8 million outstanding.

Outstanding debt as of June 30, 2025 and December 31, 2024 is summarized as follows:

June 30, 2025

December 31, 2024

Borrowing under senior secured asset based

revolving credit facility

Borrowings under senior secured asset based revolving credit facility

Senior secured second lien notes due 2031

Deferred financing costs

Short-term borrowings and current portion of long-term

Short-term borrowings and current portion

of long-term debt

Long-term debt

Both the ABL Revolving Credit Facility and 2031 Notes include customary covenants and events of default.

Refer to Note 11, “Debt,” to the Condensed Consolidated Financial Statements for additional discussions of the covenants for the ABL Revolving Credit Facility and the 2031 Notes.

As of March 31, 2025, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and 2031 Notes.

Refer to Note 11, “Debt,” to the Condensed Consolidated Financial Statements for additional discussions of covenants under the ABL Revolving Credit Facility and 2031 Notes.

As of June 30, 2025, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and 2031 Notes.

Based upon management’s current plans and outlook, the Company believes it will be able to comply with these covenants during the subsequent twelve months.

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The Company believes this information is useful to investors as it provides a measure of value creation as a percentage of capital invested.

Adjusted ROIC is determined by dividing adjusted net operating profit after tax (“Adjusted NOPAT”) for the trailing twelve-months ended by the five-quarter average of invested capital.

Adjusted NOPAT is calculated by taking operating income plus the addback of amortization of intangible assets and the addback or subtraction of restructuring expenses, other non-recurring items - net, and provision for income taxes, which is determined using a 15% tax rate.

Adjusted ROIC is determined by dividing adjusted net operating profit after tax (“Adjusted NOPAT”) for the trailing twelve-months by the five-quarter average of invested capital.

Adjusted NOPAT is calculated for each quarter by taking operating income plus the addback of amortization of intangible assets, and the addback or subtraction of restructuring expenses, other non-recurring items – net, and provision for income taxes, which is determined using a 15% tax rate.

Invested capital is defined as net total assets less cash and cash equivalents and income tax assets - net plus short-term and long-term debt.

Income taxes are defined as income tax payables/receivables, net deferred tax assets/liabilities, and uncertain tax positions.

The Company’s Adjusted ROIC as of March 31, 2025 was 5.1%.

Below is the calculation of Adjusted ROIC as of March 31, 2025.

The Company’s Adjusted ROIC as of June 30, 2025 was 4.2%.

Below is the calculation of Adjusted ROIC as of June 30, 2025.

Three Months Ended

June 30, 2025

March 31, 2025

1 unchanged sentence

September 30, 2024

June 30, 2024

Trailing Twelve Months

4 unchanged sentences

Adjusted operating income

Provision for income taxes at 15%

Provision for income taxes

Adjusted NOPAT

June 30, 2025

March 31, 2025

2 unchanged sentences

June 30, 2024

March 31, 2024

5-Quarter Average

2 unchanged sentences

Cash and cash equivalents

Short-term borrowings and current portion

of long-term debt

Short-term borrowings and current portion of long-term debt

Long-term debt

2 unchanged sentences

Adjusted ROIC

(1) Other non-recurring items – net for the trailing twelve months relate to $8.9 million of costs associated with a legal matter with the U.S.

EPA and $0.1 million of one-time costs.

Refer to the Company’s previously filed Form 10-K and Form 10-Qs for a description of other non-recurring items - net for the three months ended December 31, 2024, September 30, 2024, and June 30, 2024.

(1) Other non-recurring items – net for the trailing twelve months relate to $3.6 million of costs associated with a legal matter with the EPA.

Refer to the Company’s previously filed Form 10-K and Form 10-Qs for a description of other non-recurring items - net for the three months ended December 31, 2024 and September 30, 2024.

EBITDA and Adjusted EBITDA

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The Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring expense, other income (expense) - net, and certain other non-recurring items.

The reconciliation of net income (loss) to EBITDA and further to adjusted EBITDA for the three months ended March 31, 2025 and 2024, is summarized as follows:

The reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 and trailing twelve months is summarized as follows.

Three Months Ended

Six Months Ended

Trailing Twelve

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Adjusted EBITDA margin percentage

(1) Other non-recurring items - net for the three months ended March 31, 2024 relate to $0.1 million of one-time costs.

Other non-recurring items - net for the trailing twelve months relate to $8.9 million of costs associated with a legal matter with the U.S.

EPA and $0.1 million of one-time costs.

(2) Other (income) expense - net includes net foreign currency gains (losses), other components of net periodic pension costs, and other items in the three and trailing twelve months ended March 31, 2025 and the three months ended March 31, 2024.

(1) Other non-recurring items - net for the three months ended June 30, 2024 relate to $5.3 million of costs associated with a legal matter with the EPA and $0.1 million of one-time costs.

Other non-recurring items - net for the six months ended June 30, 2024 relate to $5.3 million of costs associated with a legal matter with the EPA and $0.2 million of one-time costs.

(2) Other (income) expense - net includes net foreign currency (gains) losses, other components of net periodic pension costs, and other items in the three, six, and trailing twelve months ended June 30, 2025 and the three and six months ended June 30, 2024.

Free Cash Flows

Free cash flows is defined as net cash provided by (used for) operating activities less cash outflow from investment in capital expenditures.

The reconciliation of net cash provided by (used for) operating activities to free cash flows for the three months ended March 31, 2025 and 2024 are summarized as follows:

Three Months Ended

Net cash provided by (used for) operating activities

Free cash flows is defined as net cash used for operating activities less cash outflow from investment in capital expenditures.

The reconciliation of net cash used for operating activities to f ree cash flows for the six months ended June 30, 2025 and 2024 is summarized as follows.

Six Months Ended

Net cash used for operating activities

Capital expenditures

8 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis