Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis contains forward-looking statements based on our current assumptions, expectations, estimates and projections about our business and the homebuilding industry, and therefore, it should be read in conjunction with our accompanying unaudited condensed consolidated financial statements and related notes as of July 31, 2026, and for the three and nine months ended July 31, 2026 and 2025, included elsewhere herein. Actual results could differ from our expectations due to several factors which include, but are not limited to: the impact of market price and demand for our products, economic and competitive conditions, capital expenditures, new technology, regulatory changes and other uncertainties. For additional information pertaining to our business, including risk factors which should be considered before investing in our common stock, refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.
Our Business
We are a leading manufacturer and component supplier to original equipment manufacturers (OEMs) in the building products industry, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets. The majority of these components can be categorized as window and door components and kitchen and bath cabinet components. Examples of window and door components include energy-efficient flexible insulating glass spacers, extruded vinyl profiles, window and door screens, precision-formed metal and wood products, window and door seals, and window and door hardware. In addition, we provide certain other components and products, which include solar panel sealants, trim moldings, vinyl decking, water retention barriers, conservatory roof components, and commercial access solutions. We use cost-effective production processes and engineering expertise to provide our customers with specialized products for their specific applications. We believe these capabilities provide us with unique competitive advantages. We serve a primary customer base in North America and the U.K., and also serve customers in international markets through our operating locations in the U.K., Germany, Mexico, Canada, and Italy, as well as through sales and marketing efforts in other countries.
We continue to invest in organic growth initiatives and we intend to continue evaluating business acquisitions that allow us to expand our existing fenestration and cabinet component footprint, enhance our product offerings, provide new complementary technology, enhance our leadership position within the markets we serve, and expand into new markets or service lines. We have disposed of non-core businesses in the past, and continue to evaluate our business portfolio to ensure that we are investing in markets where we believe there is potential future growth.
In connection with the Tyman acquisition, we re-evaluated our reportable segment presentation during the third quarter of 2025 and adjusted our segment structure to better align our business operations. As a result, we now report three reportable segments: Hardware Solutions, Extruded Solutions, and Custom Solutions.
Our Hardware Solutions segment manufactures engineered window and door hardware, screens, and other fenestration components primarily serving the residential and light-commercial building markets. The majority of segment revenue is generated in North America, and as such, domestic housing starts and R&R activity remain the primary demand drivers. Long-term secular trends, including a structural undersupply of U.S. housing, an aging housing stock, and increasing home equity, are expected to support sustained demand for window and door replacement. Internationally, the segment serves a broad customer base of OEMs and distributors across Europe and Asia, where government incentives for energy efficiency and renovation activity are expected to support steady replacement demand over the medium term.
Our Extruded Solutions segment manufactures insulating glass spacers, vinyl and composite profiles, and sealing solutions used in the fabrication of windows, doors, conservatories, roofs, and related building applications. This segment operates across North America and Europe, and its results are influenced by housing starts, energy-efficiency standards, and renovation activity in those regions. In the U.S., demand for insulating-glass spacers and vinyl profiles is supported by increasing adoption of high-performance window systems that improve thermal performance. In the U.K. our vinyl business serves window fabricators and distributors with a broad offering of vinyl extrusions, decking, and roofing systems. The European market continues to benefit from government-sponsored retrofit programs and EU directives targeting energy efficiency and sustainability in existing building stock.
Our Custom Solutions segment delivers a diverse range of engineered product solutions across wood, metal, and elastomeric materials that serve residential, commercial, and industrial end markets. The segment’s portfolio includes interior building components, specialty access systems, and custom-formulated compounds designed for highly technical applications. Demand for these products is driven by overall levels of construction and remodeling activity, as well as broader trends in manufacturing, infrastructure investment, and industrial production. The segment’s ability to offer customized, high-performance solutions tailored to specific customer requirements positions it to participate in both residential and commercial growth cycles, while providing diversification beyond traditional fenestration markets.
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We continue to maintain a grouping called Unallocated Corporate & Other, which includes transaction expenses, stock-based compensation, long-term incentive awards based on the performance of our common stock and other factors, certain severance and legal costs not deemed to be allocable to all segments, depreciation of corporate assets, interest expense, other, net, income taxes and inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during the annual planning process. Other corporate general and administrative costs have been allocated to the reportable business segments, based upon each segment’s relative operating activity.
Recent Transactions and Events
We are monitoring evolving U.S. and global tariff and trade policies, including court decisions invalidating certain tariffs. We are assessing the potential impact of these decisions and other trade policy developments on our operations, supply chain and cost structure and continue to work with our suppliers and customers to mitigate potential impacts on our business. We are also monitoring ongoing geopolitical tensions and conflicts in various regions of the world, including the situations in Ukraine and the Middle East. These developments have contributed to volatility in crude oil prices, ocean and domestic freight costs and certain commodity costs and have extended shipping lead times on certain routes to and from the Middle East and Asia. They may also contribute to broader volatility in global markets, supply chains and foreign currency exchange rates. The extent and duration of current and potential tariff measures and geopolitical developments, and the resulting impact on general economic conditions and our operations, remain uncertain and depend on various factors, including negotiations between the U.S. and affected countries, responses by other governments, potential exemptions, and the availability and cost of alternative sources of supply.
Market Overview and Outlook
We believe the primary drivers of our operating results continue to be North American R&R and new home construction activity. In the U.K. and Continental Europe, our operating results are primarily influenced by repair, maintenance and improvement (RMI) and residential renovation activity, as well as new construction activity. We believe that housing starts and window shipments are indicators of activity levels in the homebuilding and window industries, and we use this data, as published by or derived from third-party sources, to evaluate the market. We have historically evaluated the market using data from the National Association of Homebuilders (NAHB) with regard to housing starts and R&R activity, and published reports by Ducker Worldwide, LLC (Ducker), a consulting and research firm, with regard to window shipments in the U.S.
In August 2026 , the NAHB forecasted calendar-year housing starts to be approximately 1.3 million in calendar-years 2026, 2027 and 2028. In August 2026 , the Ducker forecast indicated that total window shipments are expected to decrease 4.2% in calendar-year 2026 and 1.6% in calendar-year 2027.
Our business is seasonal, as inclement weather during the winter months tends to slow construction and installation activity for exterior building products.
We are impacted by regulation of energy standards. Although the U.S. government has been less aggressively pursuing higher energy efficiency standards in recent years, other countries have implemented higher energy efficiency standards which should bode well for our fenestration-related businesses in these markets, particularly our warm-edge spacer products, window and door seals and tilt ‘n’ turn micro-ventilation products.
Several commodities in our business are subject to pricing fluctuations, including polyvinyl resin (PVC), titanium dioxide (TiO2), petroleum products, stainless steel, zinc, aluminum and wood. For the majority of our customers and critical suppliers, we have price adjusters in place which effectively share the base pass-through price changes for our primary commodities with our customers commensurate with the market at large. Our long-term exposure to these price fluctuations is somewhat mitigated due to the contractual component of the adjuster program. However, these adjusters are not in place with all customers and for all commodities, and there is a level of exposure to such volatility due to the lag associated with the timing of price updates in accordance with our customer agreements, particularly with regard to hardwoods. In addition, some of these commodities are in high demand, particularly in Europe, which can affect the cost of the raw materials, a portion of which we may not be able to fully recover.
The global economy remains uncertain due to currency devaluations, political unrest, geopolitical tensions and conflicts, terror threats, and the political landscape in the U.S. These and other macro-economic factors have impacted the global financial markets, which may have contributed to significant changes in foreign currencies. We continue to monitor our exposure to changes in exchange rates.
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Results of Operations
Three Months Ended July 31, 2026 Compared to Three Months Ended July 31, 2025
This table sets forth our condensed consolidated results of operations for the three-month periods ended July 31, 2026 and 2025.
Three Months Ended July 31,
2026 2025 Change $ % Variance
(Dollars in thousands)
Net sales $ 501,845 $ 495,273 $ 6,572 1%
Cost of sales (excluding depreciation and amortization) 360,380 357,305 3,075 1%
Selling, general and administrative 70,837 71,270 (433) (1)%
Restructuring charges — 1,367 (1,367) (100)%
Depreciation and amortization 24,138 33,882 (9,744) (29)%
Asset impairment charges — 302,284 (302,284) (100)%
Operating income (loss) 46,490 (270,835) 317,325 (117)%
Interest expense (11,978) (14,218) 2,240 (16)%
Other, net (93) 855 (948) (111)%
Income tax (expense) benefit (7,915) 8,191 (16,106) (197)%
Net income (loss) $ 26,504 $ (276,007) $ 302,511 (110)%
Our period-over-period results by reportable segment follow.
Changes Related to Operating Income by Reportable Segment:
Hardware Solutions
Three Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ 220,923 $ 227,116 $ (6,193) (3)%
Cost of sales (excluding depreciation and amortization) 162,056 170,282 (8,226) (5)%
Selling, general and administrative 33,162 32,954 208 1%
Restructuring charges — 1,140 (1,140) (100)%
Depreciation and amortization 11,386 16,987 (5,601) (33)%
Asset impairment charges — 163,198 (163,198) (100)%
Operating income (loss) $ 14,319 $ (157,445) $ 171,764 (109)%
Operating income (loss) margin 6 % (69) %
Net Sales. N et sales decreased $6.2 million for the three months ended July 31, 2026 compared to the same period in 2025. The decrease was primarily due to a net unfavorable impact from tariff-related activity, consisting of approximately $9.1 million of tariff-related refunds, partially offset by $0.2 million of tariff-related amounts charged. These impacts were partially offset by $3.1 million of favorable price, surcharge and raw material index adjustments.
Cost of Sales. Cost of sales decreased $8.2 million, for the three months ended July 31, 2026 compared to the same period in 2025. The decrease was primarily due to lower sales volume and favorable tariff-related activity, including tariff-related refunds, partially offset by higher raw material and transportation cost and increased warranty expenses.
Selling, General and Administrative. S elling, general and administrative expenses increased $0.2 million, or 1%, for the three months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Restructuring Charges . Restructuring charges decreased $1.1 million , or 100% , for the three months ended July 31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in
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fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Extruded Solutions
Three Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ 179,291 $ 174,427 $ 4,864 3%
Cost of sales (excluding depreciation and amortization) 121,389 116,597 4,792 4%
Selling, general and administrative 22,279 20,740 1,539 7%
Restructuring charges — 34 (34) (100)%
Depreciation and amortization 7,213 6,989 224 3.2%
Asset impairment charges — 54,934 (54,934) (100)%
Operating income (loss) $ 28,410 $ (24,867) $ 53,277 (214)%
Operating income (loss) margin 16 % (14) %
Net Sales . Net sales increased $4.9 million for the three months ended July 31, 2026 compared to the same period in 2025, primarily due to $6.0 million of favorable price, surcharge and raw material index adjustments, partially offset by $1.0 million from lower volume and $0.1 million of unfavorable foreign currency movements.
Cost of Sales . Cost of sales increased $4.8 million for the three months ended July 31, 2026 compared to the same period in 2025. The increase was primarily due to higher raw material costs, partially offset by lower sales volumes.
Selling, General and Administrative . Selling, general and administrative expense increased $1.5 million, or 7%, for the three months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Custom Solutions
Three Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ 111,007 $ 102,264 $ 8,743 9%
Cost of sales (excluding depreciation and amortization) 85,861 77,755 8,106 10%
Selling, general and administrative 13,143 11,708 1,435 12%
Restructuring charges — 26 (26) (100)%
Depreciation and amortization 5,330 4,716 614 13%
Asset impairment charges — 84,152 (84,152) (100)%
Operating income (loss) $ 6,673 $ (76,093) $ 82,766 (109)%
Operating income (loss) margin 6 % (74) %
Net Sales . Net sales increased $8.7 million, or 9%, for the three months ended July 31, 2026 compared to the same period in 2025. The increase was primarily driven by $5.7 million of favorable price, surcharge and raw material index adjustments and $3.0 million from higher volume.
Cost of Sales . Cost of s ales increased $8.1 million, or 10%, for the three months ended July 31, 2026 compared to the same period in 2025. Cost of sales increased primarily due to higher sales volumes and higher costs associated with the increased level of sales.
Selling, General and Administrative . S elling, general and administrative expenses increased $1.4 million, or 12%, for the three months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
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Unallocated Corporate & Other
Three Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ (9,376) $ (8,534) $ (842) 10%
Cost of sales (excluding depreciation and amortization) (8,926) (7,329) (1,597) 22%
Selling, general and administrative 2,253 5,868 (3,615) (62)%
Restructuring charges — 167 (167) (100)%
Depreciation and amortization 209 5,190 (4,981) (96)%
Operating loss $ (2,912) $ (12,430) $ 9,518 (77)%
Net Sales . Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the three months ended July 31, 2026 and 2025.
Cost of Sales . Cost of sales for Corporate & Other consists of the elimination of inter-segment sales, profit in inventory, and other costs.
Selling, General and Administrative . Sellin g, general and administrative expenses decreased $3.6 million, or 62%, for the three months ended July 31, 2026 compared to the same peri od in 2025. The decrease was primarily attributable to reorganization costs incurred in the prior-year period.
Restructuring Charges. Restructuring charges decreased 100% for the three months ended July 31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Changes Related to Non-Operating Items:
Interest Expense . Inter est expe nse decreased $2.2 million for the three months ended July 31, 2026 compared to the same period in 2025 primarily as a result of a decrease in borrowings outstanding during the three months ended July 31, 2026 as compared to the prior year period.
Income Taxes . We recorded an income tax expense of $7.9 million on pre-tax income of $34.4 million for the three months ended July 31, 2026, an effective rate of 23.0%, and income tax benefit of $8.2 million on pre-tax loss of $284.2 million for the three months ended July 31, 2025, an effective rate of 2.9%. The increase in the effective tax rate compared to the prior year was primarily driven by the absence of the impairment which occurred in the prior year.
Nine Months Ended July 31, 2026 Compared to Nine Months Ended July 31, 2025
Nine Months Ended July 31,
2026 2025 Change $ % Variance
(Dollars in thousands)
Net sales $ 1,373,301 $ 1,347,795 $ 25,506 2%
Cost of sales (excluding depreciation and amortization) 1,015,517 986,129 29,388 3%
Selling, general and administrative 216,695 208,253 8,442 4%
Restructuring charges — 10,207 (10,207) (100)%
Depreciation and amortization 73,037 77,814 (4,777) (6)%
Asset impairment charges — 302,284 (302,284) (100)%
Operating income (loss) 68,052 (236,892) 304,944 (129)%
Interest expense (36,387) (42,344) 5,957 (14)%
Other, net 5,972 1,925 4,047 210%
Income tax (expense) benefit (11,854) 6,934 (18,788) (271)%
Net income (loss) $ 25,783 $ (270,377) $ 296,160 (110)%
Our period-over-period results by reportable segment follow.
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Changes Related to Operating Income by Reportable Segment:
Hardware Solutions
Nine Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ 613,054 $ 614,791 $ (1,737) —%
Cost of sales (excluding depreciation and amortization) 475,172 466,600 8,572 2%
Selling, general and administrative 103,105 98,570 4,535 5%
Restructuring charges — 8,155 (8,155) (100)%
Depreciation and amortization 34,626 38,818 (4,192) (11)%
Asset impairment charges — 163,198 (163,198) (100)%
Operating income (loss) $ 151 $ (160,550) $ 160,701 (100)%
Operating income (loss) margin — % (26) %
Net Sales. Net sales decreased $1.7 million, for the nine months en ded July 31, 2026 compared to the same period in 2025, primarily due to a $10.7 million unfavorable impact from lower volume and a $1.7 million net unfavorable impact from tariff-related activity, consisting of $9.1 million of tariff-related refunds, partially offset by $7.4 million of tariff-related amounts charged. These impacts were partially offset by $6.5 million of favorable foreign currency movements and $4.2 million of favorable price, surcharge and raw material index adjustments.
Cost of Sales. C ost of sales increased $8.6 million, or 2%, for the nine months ended July 31, 2026 as compared to the same period in 2025. The increase was primarily due to tariff-related impacts, foreign currency movements and higher transportation and raw material costs, partially offset by tariff-related refunds and lower costs associated with reduced sales volumes.
Selling, General and Administrative. S elling, general and administrative expenses increased $4.5 million, or 5%, for the nine months ended July 31, 2026 as compared to the same peri od in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Restructuring Charges . Restructuring charges decreased $8.2 million, or 100%, for the nine month s ended July 31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Extruded Solutions
Nine Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ 484,040 $ 478,024 $ 6,016 1%
Cost of sales (excluding depreciation and amortization) 331,979 325,914 6,065 2%
Selling, general and administrative 65,084 60,921 4,163 7%
Restructuring charges — 34 (34) (100)%
Depreciation and amortization 21,893 22,066 (173) (1)%
Asset impairment charges — 54,934 (54,934) (100)%
Operating income $ 65,084 $ 14,155 $ 50,929 360%
Operating income margin 13 % 3 %
Net Sales. Net sales increased $6.0 million, or 1%, for the nine months ended July 31, 2026 compared to the same period in 2025, primarily due to $8.3 million of favorable foreign currency movements and $8.3 million of favorable price, surcharge and raw material index adjustments, partially offset by $10.6 million from lower volume.
Cost of Sales. Cost of sales increased $6.1 million, or 2%, for the nine months ended July 31, 2026 compared to the same period in 2025. The increase was primarily due to foreign currency translation movements and higher raw material costs, partially offset by lower costs associated with reduced sales volumes.
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Selling, General and Administrative. Selling, general and administrative expense increased $4.2 million, or 7%, for the nine months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Custom Solutions
Nine Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ 304,062 $ 284,809 $ 19,253 7%
Cost of sales (excluding depreciation and amortization) 236,302 219,755 16,547 8%
Selling, general and administrative 40,182 34,156 6,026 18%
Restructuring charges — 26 (26) (100)%
Depreciation and amortization 15,956 15,693 263 2%
Asset impairment charges — 84,152 (84,152) (100)%
Operating income (loss) $ 11,622 $ (68,973) $ 80,595 (117)%
Operating income (loss) margin 4 % (24) %
Net Sales . Net sales increased $19.3 million, or 7%, for the nine months ended July 31, 2026 compared to the same period in 2025, primarily due to $12.7 million of favorable price, surcharge and raw material index adjustments, $5.5 million from higher volume, a $0.7 million favorable tariff-related impact and $0.3 million of favorable foreign currency movements.
Cost of Sales . Cost of sales increased $16.5 million, or 8%, for the nine months ended July 31, 2026 compared with the same period in 2025. Cost of sales increased primarily due to higher sales volumes and higher costs associated with the increased level of sales, as well as tariff-related and foreign currency impacts.
Selling, General and Administrative . S elling, general and administrative expense increased $6.0 million, or 18%, for the nine months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Unallocated Corporate & Other
Nine Months Ended July 31,
2026 2025 $ Change % Variance
(Dollars in thousands)
Net sales $ (27,855) $ (29,829) $ 1,974 (7)%
Cost of sales (excluding depreciation and amortization) (27,936) (26,140) (1,796) 7%
Selling, general and administrative 8,324 14,606 (6,282) (43)%
Restructuring charges — 1,992 (1,992) (100)%
Depreciation and amortization 562 1,237 (675) (55)%
Operating loss $ (8,805) $ (21,524) $ 12,719 (59)%
Net Sales . Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the nine months ended July 31, 2026 and 2025.
Cost of Sales . Cost of sales for Unallocated Corporate & Other consists of the elimination of inter-segment sales, profit in inventory, and other costs.
Selling, General and Administrative . Selling, general and administrative expenses decreased $6.3 million, or 43%, for the nine months ended July 31, 2026 compared to the same period in 2025. This decrease is primarily attributable to a decrease in reorganization costs incurred in the prior year period.
Restructuring Charges . Restructuring charges decreased $2.0 million , or 100% , for the nine months ended July 31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
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Changes related to Non-Operating Items:
Interest Expense . Intere st expense decreased $6.0 million for the nine months ended July 31, 2026 compared to the same period in 2025 primarily as a result of lower borrowings outstanding during the nine months ended July 31, 2026 as compared to the prior year period.
Income Taxes . We recorded income tax expense of $11.9 million on pre-tax income of $37.6 million for the nine months ended July 31, 2026, an effective rate of 31.5%, and income tax benefit of $6.9 million on a pre-tax loss of $277.3 million for the nine months ended July 31, 2025, an effective rate of 2.5%. The increase in the effective tax rate year-over-year was primarily driven by $3.2 million of discrete items including equity-based compensation award activity, state deferred tax remeasurement from legal entity reorganization activities, changes in reserves for uncertain tax positions, as well as the absence of the impairment which occurred in the prior year.
Liquidity and Capital Resources
Overview
Historic ally, our principal sources of funds have been cash on hand, cash flow from operations, and borrowings under our credit facilities. As of July 31, 2026, we had $62.1 million of cash and equivalents, $618.5 million outstanding under the Facilities, $5.5 million of outstanding letters of credit, and $53.7 million outstanding under finance leases and other debt. Of the $53.7 million outstanding under finance leases and other debt, $47.9 million relates to real estate leases. We had $301.0 million avail able for use under the revolving credit facility at July 31, 2026.
On August 1, 2024, the Amended Credit Agreement increased our borrowing capacity and established a $475 million revolving credit facility and a $500 million term loan A facility, each maturing on August 1, 2029. As of July 31, 2026, we remained in compliance with all covenants under this agreement. Additional information regarding the Facilities is included in Note 5, “Debt”, to the condensed consolidated financial statements.
The Term A Facility amortizes on a quarterly basis at 5% per annum of the original principal amount of the Term A Facility, with the remainder due at maturity. The Term A Facility must be prepaid with 100% of the net cash proceeds of the issuance or incurrence of debt and 100% of the net cash proceeds of all asset sales, insurance and condemnation recoveries, and other asset dispositions.
Borrowings under the Facilities bear interest, at our option, at (1) the Base Rate plus an applicable margin or (2) Adjusted Term SOFR plus an applicable margin. The applicable margin will range from 1.0% to 1.75% for Base Rate loans and 2.0% to 2.75% for Adjusted Term SOFR loans. In addition, we are subject to commitment fees for the unused portion of the Revolving Credit Facility.
During the third quarter of fiscal 2026, we entered into a pay-fixed, receive-floating interest rate swap agreement to manage the variability in cash flows associated with interest payments on $175.0 million of our outstanding variable-rate borrowings. The interest rate swap became effective on July 1, 2026 and matures on August 1, 2029.
We expect to repatriate excess cash moving forward and use the funds to retire debt or meet current working capital needs. We believe our business model, our current cash reserves and the recent steps we have taken to strengthen our balance sheet leave us well-positioned to manage our business and remain in compliance with our debt covenants.
Analysis of Cash Flow
The following table summarizes our cash flow results for the nine months ended July 31, 2026 and 2025:
Nine Months Ended
July 31,
2026 2025
(Dollars in thousands)
Cash provided by operating activities $ 57,268 $ 76,643
Cash used for investing activities $ (33,004) $ (40,635)
Cash used for financing activities $ (39,393) $ (87,379)
Operating Activities . Cash provided by operating activities decreased $19.4 million for the nine months ended July 31, 2026 compared to the same period in 2025, to $57.3 million in 2026 from $76.6 million. The decrease in operating cash flow was primarily due to higher inventory, accounts receivable and income taxes.
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Investing Activities. Cash used for investing activities decreased $7.6 million for the nine months ended July 31, 2026 compared to the same period in 2025, prim arily due to lower capital expenditures, partially offset by lower proceeds from disposition of assets.
Financing Activities. Cash used for financing activities decreased $48.0 million for the nine months ended July 31, 2026 compared to the same period in 2025 . The decrease was primarily driven by lower treasury stock repurchases and lower net repayments under our credit facilities compared to the prior-year period.
Liquidity Requirem ents
Our strategy for deploying cash is to invest in organic growth opportunities, develop our infrastructure, and explore strategic acquisitions. Other uses of cash include paying cash dividends to our shareholders and repurchasing our own stock. During the nine months ended July 31, 2026 and 2025, we repatriated $40.3 million and $ 42.4 million, respectively, of foreign earnings from our foreign locations. We maintain cash balances in foreign countries which totaled $48.4 million as of July 31, 2026.
Critical Accounting Policies and Estimates
The preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. Estimates and assumptions about future events and their effects cannot be perceived with certainty. Estimates may change as new events occur, as more experience is acquired, as additional information becomes available and as our operating environment changes. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, and that we believe provide a basis for making judgments about the carrying value of assets and liabilities that are not readily available through open market quotes. We must use our judgment with regard to uncertainties in order to make these estimates. Actual results could differ from these estimates.
For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Our critical accounting policies and estimates have not changed materially during the nine months ended July 31, 2026.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.