What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-06 · 103 added, 172 removed, 168 unchanged (62% of the section changed)

9 unchanged sentences

These risks, uncertainties, and other factors include, but are not limited to:

• macroeconomic conditions, including inflation, elevated interest rates, and tariffs, as well as prior supply chain, labor and logistics constraints, have had, and may continue to have, a negative impact on Manitowoc’s ability to convert backlog into revenue which could impact, and has impacted, its financial condition, cash flows, and results of operations (including future uncertain impacts);

• macroeconomic conditions, including inflation, elevated interest rates, and tariffs, as well as prior supply chain, labor and logistics constraints, have had, and may continue to have, a negative impact on Manitowoc’s ability to convert backlog into revenue (the timing of sales) which could impact, and has impacted, its financial condition, cash flows, and results of operations (including future uncertain impacts);

• uncertainty regarding, and adverse changes to, trade policy, including tariffs, reciprocal tariffs, trade agreements, ongoing negotiations on trade agreements with additional trade partners, legal challenges to certain tariffs authorities, updated guidance from regulators, export duties, import controls and trade barriers (including quotas);

• actions of competitors;

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

• geopolitical events, including the ongoing conflicts in Ukraine and in the Middle East, other political and economic conditions and risks and other geographic factors, have led to 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;

• the ability to convert backlog, orders, and order activity into sales and the timing of those sales;

• adverse changes to trade policy, including export duties, tariffs, import controls and trade barriers (including quotas);

• the ability to focus on customers, new technologies, and innovation;

11 unchanged sentences

• changes in the capital and financial markets;

• the ability to complete and appropriately integrate acquisitions, strategic alliances, joint ventures or other significant transactions;

• the ability to complete and appropriately integrate acquisitions, strategic alliances, joint ventures and other significant transactions;

• issues associated with the availability and viability of suppliers;

• 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 enhancements, savings, synergies and options;

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

• the replacement cycle of technologically obsolete products;

17 unchanged sentences

The inclusion of any statement in this report does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

Current Events

As disclosed in Part I, Item 1A:

Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the Company's business is subject to risks related to, among other factors, tariffs and other trade protection measures put in place by the United States or other countries, as well as U.S.

international trade relations, including those with China and the European Union.

As of September 30, 2025, the U.S.

has implemented country-specific trade agreements with key partners including the European Union, Japan, and the United Kingdom, featuring modified tariff structures and industry-specific exemptions.

continues to negotiate trade agreements with other countries, including China, which currently have varying reciprocal tariffs.

In addition, the U.S.

government imposed 50% tariffs on new steel and aluminum derivative products which include certain of the Company's crane models.

These tariffs apply to imports from nearly all countries, with the UK subject to a reduced 25% rate.

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

While the majority of the Company’s products are manufactured domestically, the evolving tariff landscape has and could continue to:

• Increase input costs for imported components and raw materials, especially those containing steel, aluminum, or copper;

• Disrupt supply chains, particularly for goods newly classified under derivative tariff codes;

• Affect demand due to price sensitivity and competitive shifts in the market.

The Company continues to monitor developments closely, including pending legal challenges to certain tariff authorities and ongoing negotiations with additional trade partners.

Considerable uncertainty remains regarding industry-specific exemptions, retaliatory measures, and the final resolution of trade agreements.

The Company is actively assessing the potential impact of such tariffs, developments, measures and agreements and evaluating potential mitigation strategies, including supply chain adjustments, pricing strategies, and sourcing diversification.

Orders and Backlog

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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 September 30, 2025 increased 15.7% to $491.4 million from $424.7 million for the same period in 2024.

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

Orders were favorably impacted by $10.3 million from changes in foreign currency exchange rates.

Orders for the nine months ended September 30, 2025 increased 10.5% to $1,555.6 million from $1,407.2 million for the same period in 2024.

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

Orders for the three months ended March 31, 2026 increased 5.8% to $645.7 million from $610.3 million for the same period in 2025.

The increase in orders was primarily attributable to higher demand in the Company’s MEAP and EURAF segments.

This was partially offset by lower demand in the Company’s Americas segment due to large stocking orders in the three months ended March 31, 2025 that did not reoccur.

Orders were favorably impacted by $25.7 million from changes in foreign currency exchange rates.

As of September 30, 2025, total backlog was $666.5 million, an increase of 2.5% from the December 31, 2024 backlog of $650.2 million, and a decrease of 10.2% from the September 30, 2024 backlog of $742.1 million.

Backlog was favorably impacted from changes in foreign currency exchange rates by $27.4 million and $11.5 million from December 31, 2024 and September 30, 2024, respectively.

Results of Operations For the Three and Nine Months Ended September 30, 2025 and 2024:

As of March 31, 2026, total backlog was $939.9 million, an increase of 18.4% from the December 31, 2025 backlog of $793.5 million, and an increase of 17.8% from the March 31, 2025 backlog of $797.8 million.

Backlog was unfavorably impacted by $16.0 million from December 31 2025 and was favorably impacted by $20.7 million from March 31, 2025, from changes in foreign currency exchange rates.

Results of Operations For the Three Months Ended March 31, 2026 and 2025:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Percentage Change

Gross profit %

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Other expense - net

Provision (benefit) for income taxes

Consolidated net sales for the three months ended September 30, 2025 increased 5.4% to $553.4 million from $524.8 million in the same period in 2024.

This increase was primarily attributable to $17.5 million of higher new machine sales in the Company's tower product line in the EURAF segment, $7.0 million of higher new machine sales in the Americas segment primarily due to favorable product mix, and $8.3 million of higher non-new machine sales.

This was partially offset by $13.2 million of lower new machine sales in the MEAP segment primarily due to unfavorable product mix.

Net sales were favorably impacted by $11.2 million from changes in foreign currency exchange rates.

Consolidated net sales for the nine months ended September 30, 2025 decreased 1.2% to $1,563.8 million from $1,582.0 million for the same period in 2024.

This decrease was primarily attributable to $40.0 million of lower new machine sales in the Company's mobile product line in the EURAF segment due to lower crane shipments, $37.5 million of lower new machine sales in the MEAP segment due to unfavorable product mix, and $10.7 million of lower new machine sales in the Americas segment due to lower crane shipments and unfavorable product mix.

This was partially offset by $32.0 million of higher new machine sales in the Company's tower crane product line in the EURAF segment and $37.9 million of higher non-new machine sales primarily in the Americas and EURAF segments.

Benefit for income taxes

* Measure not meaningful.

Consolidated net sales for the three months ended March 31, 2026 increased 5.0% to $494.6 million from $470.9 million in the same period in 2025.

This increase was primarily attributable to $14.4 million of higher new machine sales in the Company's tower product line in the EURAF segment and $5.1 million of higher non-new machine sales.

This was partially offset by $7.2 million of lower new machine sales in the MEAP segment.

Net sales were favorably impacted by $18.9 million from changes in foreign currency exchange rates.

Gross profit for the three months ended September 30, 2025 increased 17.1% to $102.6 million as compared to $87.6 million for the same period in 2024.

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

Gross profit was favorably impacted by $2.0 million from changes in foreign currency exchange rates.

Gross profit percentage for the three months ended September 30, 2025 increased 180 basis points to 18.5% as compared to 16.7% for the same period in 2024.

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

Gross profit for the nine months ended September 30, 2025 increased 4.1% to $291.4 million from $279.8 million for the same period in 2024.

The increase was primarily attributable to favorable product mix.

This was partially offset by lower net sales and lower absorbed costs due to lower manufacturing volume in the Americas segment.

Gross profit for the three months ended March 31, 2026 increased 6.1% to $95.3 million as compared to $89.8 million for the same period in 2025.

The increase was primarily due to higher revenue partially offset by unfavorable product mix and incremental tariff costs.

Gross profit was favorably impacted by $3.4 million from changes in foreign currency exchange rates.

Gross profit percentage for the nine months ended September 30, 2025 increased 90 basis points to 18.6% from 17.7% for the same period in 2024.

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

Gross profit percentage for the three months ended March 31, 2026 increased to 19.3% as compared to 19.1% for the same period in 2025.

Engineering, Selling, and Administrative Expenses

Engineering, selling, and administrative expenses for the three months ended September 30, 2025 increased 5.7% to $83.4 million from $78.9 million for the same period in 2024.

The increase was primarily due to higher new product development costs.

This was partially offset by a $2.6 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 $2.0 million from changes in foreign currency exchange rates.

Engineering, selling and administrative expenses for the nine months ended September 30, 2025 increased 6.3% to $253.7 million from $238.6 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 $2.9 million charge related to a legal matter with the EPA in the prior year.

Engineering, selling, and administrative expenses for the three months ended March 31, 2026 increased 9.3% to $90.6 million from $82.9 million for the same period in 2025.

The increase was primarily due to marketing expenses related to the Conexpo triennial trade show and higher employee costs.

Engineering, selling, and administrative expenses were unfavorably impacted by $3.8 million from changes in foreign currency exchange rates.

Interest Expense

Interest expense for the three months ended September 30, 2025 was $9.8 million as compared to $9.6 million for the same period in 2024.

Interest expense increased year-over-year primarily due to higher outstanding balances on the Company's other credit facilities.

This was partially offset by lower interest rates on borrowings under the Company's ABL Revolving Credit Facility.

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

Interest expense for the nine months ended September 30, 2025 was $27.7 million as compared to $28.4 million for the same period in 2024.

Interest expense decreased year-over-year primarily due to lower interest rates on borrowings under the

Company's ABL Revolving Credit Facility.

This was partially offset by higher outstanding balances on the Company's other credit facilities.

Interest expense for the three months ended March 31, 2026 was $8.9 million as compared to $8.7 million for the same period in 2025.

Interest expense increased year-over-year primarily due to higher average outstanding balances on the Company's ABL Revolving Credit Facility.

See further detail at Note 10, “Debt” to the Condensed Consolidated Financial Statements.

Other Expense - Net

Other expense - net was $0.8 million during the three months ended September 30, 2025 and $4.9 million for the same period in 2024.

Other expense - net during the three months ended September 30, 2025 was primarily composed of $0.5 million of pension related costs and $0.2 million of net currency losses.

Other expense - net during the three months ended September 30, 2024 was primarily composed of $3.2 million of net currency losses and $1.1 million of non-cash losses associated with the refinancing of the Company's 2026 Notes.

Other expense - net was $4.8 million during the nine months ended September 30, 2025 and $3.9 million for the same period in 2024.

Other expense- net during the nine months ended September 30, 2025 was primarily composed of $3.1 million of net currency losses, $1.2 million of pension related costs, and $0.6 million of interest related to settlement of the matter with the EPA.

This was partially offset by $1.0 million of interest income.

Other expense – net during the nine months ended September 30, 2024 was primarily composed of $2.2 million of pension related costs, $1.4 million of net currency losses, and $1.1 million of non-cash losses associated with the refinancing of the Company's 2026 Notes, partially offset by $0.7 million of interest income.

Provision (Benefit) for Income Taxes

For the three months ended September 30, 2025, and 2024, the Company recorded a provision for income taxes of $2.5 million and a benefit for income taxes of $0.3 million, respectively.

Changes to jurisdictional mix and year-to-date income before income taxes resulted in a provision for income taxes compared to the prior year’s benefit for income taxes.

For the nine months ended September 30, 2025 and 2024, the Company recorded a benefit for income taxes of $0.2 million and a provision for income taxes of $3.2 million, respectively.

During the nine months ended September 30, 2025 and 2024, the Company recorded a discrete net tax benefit of $0.5 million and a discrete net tax expense of $2.2 million, respectively.

The change in discrete taxes along with lower year-to-date income before taxes resulted in a benefit for income taxes for the nine months ended September 30, 2025, compared to the prior year’s provision for income taxes.

Other expense - net was $3.1 million during the three months ended March 31, 2026 and $5.0 million for the same period in 2025.

Other expense - net during the three months ended March 31, 2026 was primarily composed of $3.3 million of net currency transaction losses and $0.1 million of pension related costs, partially offset by $0.4 million of interest income.

Other expense - net during the three months ended March 31, 2025 was primarily composed of $4.9 million of net currency transaction losses and $0.5 million of pension related costs, partially offset by $0.3 million of interest income.

Benefit for Income Taxes

For the three months ended March 31, 2026 and 2025, the Company recorded a benefit for income taxes of $3.3 million and $2.5 million, respectively.

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

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Dollar Change

Percentage Change

Dollar Change

Percentage Change

Segment Operating Income (Loss)

*Measure not meaningful

Americas segment net sales increased 6.7% for the three months ended September 30, 2025 to $306.4 million from $287.1 million for the same period in 2024.

The increase was primarily attributable to $12.3 million of higher non-new machine sales, partially offset by lower new crane shipments.

Americas segment operating income increased $2.3 million for the three months ended September 30, 2025 to $25.5 million from $23.2 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 increased $21.9 million for the nine months ended September 30, 2025 to $888.9 million as compared to $867.0 million for the same period in 2024.

The increase was primarily attributable to $32.6 million of higher non-new machine sales, partially offset by a $10.7 million decrease of new machine sales due to lower crane shipments.

Americas segment operating income decreased $7.3 million for the nine months ended September 30, 2025 to $69.3 million from $76.6 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 increased 28.7% for the three months ended September 30, 2025 to $163.2 million from $126.8 million for the same period in 2024.

The increase was primarily attributable to $17.5 million of higher tower crane sales and $9.8 million of higher non-new machine sales.

Segment net sales were favorably impacted by $9.3 million from changes in foreign currency exchange rates.

EURAF segment operating loss increased $4.7 million for the three months ended September 30, 2025 to $10.2 million from $14.9 million for the same period in 2024.

The increase in operating loss was primarily attributable to higher engineering, selling, and administrative costs partially offset by higher net sales.

Segment operating income was unfavorably impacted by $0.6 million from changes in foreign currency exchange rates.

EURAF segment net sales increased 3.4% for the nine months ended September 30, 2025 to $461.3 million from $446.0 million for the same period in 2024.

The increase was primarily attributable to $32.0 million of higher new machine sales related to higher tower crane shipments and $23.2 million of higher non-new machine sales.

This was partially offset by $40.0 million of lower new machine sales related to lower mobile crane shipments.

Americas segment net sales increased 3.5% for the three months ended March 31, 2026 to $268.4 million from $259.3 million for the same period in 2025.

The increase was primarily attributable to higher non-new machine sales and price realization, partially offset by lower new crane sales.

Americas segment operating income decreased $5.5 million for the three months ended March 31, 2026 to $12.2 million from $17.7 million for the same period in 2025.

The decrease was primarily attributable to unfavorable product mix and incremental tariff costs.

EURAF segment net sales increased 15.0% for the three months ended March 31, 2026 to $167.4 million from $145.6 million for the same period in 2025.

The increase was primarily attributable to $21.2 million of higher new crane sales, primarily in the Company’s tower crane business.

Segment net sales were favorably impacted by $14.6 million from changes in foreign currency exchange rates.

EURAF segment operating loss increased $2.6 million for the nine months ended September 30, 2025 to $36.1 million from $33.5 million for the same period in 2024.

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

EURAF segment operating loss decreased $6.0 million for the three months ended March 31, 2026 to $5.3 million from $11.3 million for the same period in 2025.

The decrease in operating loss was primarily attributable to the higher net sales and favorable product mix, specifically in the towers product line.

Segment operating loss was unfavorably impacted by $0.9 million from changes in foreign currency exchange rates.

MEAP segment net sales decreased 24.4% for the three months ended September 30, 2025 to $83.8 million from $110.9 million for the same period in 2024.

The decrease was primarily attributable to $13.2 million of lower new machine sales due to unfavorable product mix and $13.8 million of lower non-new machine sales.

Segment net sales were favorably impacted by $1.8 million from changes in foreign currency exchange rates.

MEAP segment operating income increased $3.0 million for the three months ended September 30, 2025 to $13.0 million compared to $10.0 million for the same period in 2024, primarily due to higher absorbed costs due to higher manufacturing volume and favorable product mix.

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

MEAP segment net sales decreased 20.6% for the nine months ended September 30, 2025 to $213.6 million from $269.0 million for the same period in 2024.

The decrease was primarily attributable to $37.5 million of lower new machine sales due to unfavorable product mix and $17.9 million of lower non-new machine sales.

Segment net sales were favorably impacted by $0.3 million from changes in foreign currency exchange rates.

MEAP segment operating income increased $6.7 million for the nine months ended September 30, 2025 to $34.2 million from $27.5 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 favorably impacted by $0.1 million from changes in foreign currency exchange rates.

MEAP segment net sales decreased 10.9% for the three months ended March 31, 2026 to $58.8 million from $66.0 million for the same period in 2025.

The decrease was primarily attributable to $7.2 million of lower new machine sales due to lower shipments into the Middle East as a result of the Iran war.

MEAP segment net sales were favorably impacted by $3.8 million from changes in foreign currency exchange rates.

MEAP segment operating income decreased $3.3 million for the three months ended March 31, 2026 to $8.1 million from $11.4 million for the same period in 2025.

The decrease was primarily due to the lower net sales.

MEAP segment operating income was favorably impacted by $0.7 million from changes in foreign currency exchange rates.

Financial Condition

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

Nine Months Ended

September 30,

A summary of cash flows for the three months ended March 31, 2026 and 2025 are as follows:

Three Months Ended

Dollar Change

Net cash used for operating activities

Net cash provided by operating activities

Net cash used for investing activities

Net cash provided by financing activities

Net cash (used for) provided by financing activities

Cash and cash equivalents

Cash Flows From Operating Activitie s

Cash flows used for operating activities of $68.9 million for the nine months ended September 30, 2025 increased $5.7 million from $63.2 million for the same period in 2024.

The increase in net cash used for operating activities was primarily driven by a $43.2 million payment to settle a legal matter with the EPA.

This was partially offset by $38.4 million of lower cash used for other operating assets and liabilities.

Cash flows provided by operating activities of $27.4 million for the three months ended March 31, 2026 increased $14.5 million from $12.9 million for the same period in 2025.

The increase in net cash provided by operating activities was primarily driven by $15.0 million of higher cash provided by the net change in operating assets and liabilities.

Cash Flows From Investing Activities

Net cash used for investing activities of $37.1 million for the nine months ended September 30, 2025 increased $8.0 million from $29.1 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 $4.8 million of lower proceeds from the sale of property, plant, and equipment.

This was partially offset by $9.7 million of lower capital expenditures.

Net cash used for investing activities of $7.9 million for the three months ended March 31, 2026 decreased $15.7 million from $23.6 million for the same period in 2025.

The decrease in net cash used for investing activities was primarily due to $12.9 million of cash outflows in the prior year related to the purchase of certain assets and territory from Ring Power Corporation and $2.6 million of lower capital expenditures.

Cash Flows From Financing Activities

Net cash provided by financing activities of $95.9 million for the nine months ended September 30, 2025 increased $14.9 million from $81.0 million for the same period in 2024.

The increase in net cash provided by financing activities was primarily due to $24.8 million of additional net borrowings under the ABL Revolving Credit Facility, $6.2 million of cash outflows related to debt issuance costs in 2024, and $5.7 million of cash outflows related to common stock repurchases in 2024.

This was partially offset by $23.9 million of lower proceeds from other debt - net.

Net cash used for financing activities of $17.5 million for the three months ended March 31, 2026 decreased $20.7 million from $3.2 million of cash provided by financing activities for the same period in 2025.

The increase in net cash used for financing activities was primarily due to $17.9 million of borrowings in the prior year as compared to $9.0 million of payments in the current year under the ABL Revolving Credit Facility.

Liquidity and Capital Resources

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

September 30, 2025

The Company’s liquidity position as of March 31, 2026 and December 31, 2025 is summarized as follows:

March 31, 2026

December 31, 2025

September 30, 2024

Cash and cash equivalents

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In addition to the ABL Revolving Credit Facility, the Company has access to committed and non-committed lines of credit to fund working capital in Europe and China.

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 September 30, 2025 for the six facilities was $47.6 million, with $19.0 million outstanding.

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

September 30, 2025

There are seven facilities, of which five facilities are denominated in Euros totaling €37.0 million and two facilities denominated in Chinese Yuan totaling ¥80.0 million.

On April 2, 2026, the Company cancelled its ¥30.0 million Chinese Yuan denominated facility, reducing total liquidity by $4.4 million.

dollar availability as of March 31, 2026 for the seven facilities was $54.4 million, with $4.4 million outstanding.

Outstanding debt as of March 31, 2026 and December 31, 2025 is summarized as follows:

March 31, 2026

December 31, 2025

7 unchanged sentences

Refer to Note 10, “Debt,” to the Condensed Consolidated Financial Statements for additional discussions of covenants under the ABL Revolving Credit Facility and 2031 Notes.

As of September 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.

As of March 31, 2026, 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.

1 unchanged sentence

Non-GAAP Measures

The Company uses EBITDA, adjusted EBITDA, adjusted operating income, Adjusted ROIC and free cash flows, which are financial measures that are not prepared in accordance with GAAP, as additional metrics to evaluate the Company’s performance.

The Company uses EBITDA, adjusted EBITDA, adjusted operating income, adjusted net loss, adjusted diluted net loss per share ("adjusted DEPS"), adjusted return on invested capital ("ROIC") and free cash flows, which are financial measures that are not prepared in accordance with GAAP, as additional metrics to evaluate the Company’s performance.

The Company believes these non-GAAP measures provide important supplemental information to readers regarding business trends that can be used in evaluating its results because these financial measures provide a consistent method of comparing financial performance and are commonly used by investors to assess performance.

3 unchanged sentences

Adjusted ROIC is not a measure defined by GAAP and the Company’s methodology for determining Adjusted ROIC may vary from the methodology used by other companies.

Management and the Board of Directors use Adjusted ROIC as a measure to assess operational performance and capital allocation.

Management and the Board of Directors use Adjusted ROIC as a measure to assess operational performance

and capital allocation.

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

1 unchanged sentence

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 September 30, 2025 was 4.8%.

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

Three Months Ended

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

Trailing Twelve Months

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

The Company’s Adjusted ROIC as of March 31, 2026 was 5.1%.

Below is the calculation of Adjusted ROIC as of March 31, 2026 and 2025.

Trailing Twelve Months Ended March 31, 2026

Trailing Twelve Months Ended March 31, 2025

Operating income

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Adjusted NOPAT

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

September 30, 2024

5-Quarter Average 2026

5-Quarter Average 2025

Total liabilities

6 unchanged sentences

Adjusted ROIC

(1) Other non-recurring items – net for the three months ended December 31, 2024 and the trailing twelve months relate to $1.0 million of costs associated with a legal matter with the EPA.

(1) Other non-recurring items – net for the three months ended March 31, 2026 represents the addback of $0.5 million of costs associated with a legal matter and $0.3 million of other one-time costs.

Other non-recurring items – net for the three months ended March 31, 2025 represents $8.9 million of costs associated with a legal matter with the U.S.

EPA and $0.1 million of one-time costs.

Adjusted Net Loss and Adjusted DEPS

The Company defines adjusted net loss as net loss plus the addback or subtraction of restructuring and other non-recurring items.

Adjusted DEPS is defined as adjusted net loss divided by diluted weighted average shares outstanding.

Diluted weighted average common shares outstanding are adjusted for the effect of dilutive stock awards when there is net income on an adjusted basis, as applicable.

The reconciliation of net loss and diluted net loss per share to adjusted net loss and Adjusted DEPS for the

three months ended March 31, 2026 and 2025 are summarized as follows.

All dollar amounts are in millions, except per share data and share amounts.

Three Months Ended

Engineering, selling and administrative

Amortization of intangible assets

Restructuring expense (2)

Operating income

Interest expense

Amortization of deferred financing fees

Other expense - net

Loss before income taxes

Benefit for income taxes (3)

Diluted weighted average common shares outstanding

Diluted net loss per share

(1) The adjustments in 2026 represent the addback of $0.5 million of costs associated with a legal matter and $0.3 million of other one-time costs.

(2) The adjustments in 2026 and 2025 represent the addback of restructuring expense.

(3) The adjustments in 2026 and 2025 represent the net income tax impact of items (1) and (2).

EBITDA and Adjusted EBITDA

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

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

The reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA for the three months ended March 31, 2026 and 2025 and trailing twelve months is summarized as follows.

Three Months Ended

September 30,

Nine Months Ended

September 30,

Trailing Twelve

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Adjusted EBITDA margin percentage

(1) Other non-recurring items - net for the three months ended September 30, 2024 relate to $2.6 million of costs associated with a legal matter with the EPA.

Other non-recurring items - net for the nine months ended September 30, 2024 relate to $7.9 million of costs associated with a legal matter with the EPA and $0.2 million of one-time costs.

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

(1) Other non-recurring items - net for the three months ended March 31, 2026 relate to $0.5 million of costs associated with a legal matter and $0.3 million of other one-time costs.

(2) Other expense - net includes net foreign currency (gains) losses, other components of net periodic pension costs, and other items in the three months ended March 31, 2026, the three months ended March 31, 2025, and the trailing twelve months ended March 31, 2026.

Free Cash Flows

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 nine months ended September 30, 2025 and 2024 is summarized as follows.

Nine Months Ended

September 30,

Net cash used for operating activities

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

The reconciliation of net cash provided by operating activities to f ree cash flows for the three months ended March 31, 2026 and 2025 is summarized as follows.

Three Months Ended

Net cash provided by operating activities

Capital expenditures

8 unchanged sentences

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