What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-20 compared with 2026-01-13 · 78 added, 86 removed, 63 unchanged (72% of the section changed)

9 unchanged sentences

Financial Overview

The Company's net sales in the 13 weeks and 39 weeks ended November 30, 2025 were $17.3 million and $49.1 million, respectively, compared to $14.4 million and $45.1 million, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

Net sales for the 13 weeks and 39 weeks ended November 30, 2025 were higher than in the comparable periods of the prior fiscal year.

The increase for the 13 weeks and 39 week periods ended November 30, 2025 was primarily due to the robustness of the commercial and military equipment programs that the Company supplies.

The Company’s gross profits in the 13 weeks and 39 weeks ended November 30, 2025 were higher than the gross profits in the prior year’s comparable periods.

The Company’s higher gross profits during the current 13 week and 39 week periods were primarily due to higher sales volumes, increased selling prices and a more favorable product mix.

The Company’s gross profit margins, measured as percentages of sales, were 34.1% and 32.0%, respectively, in the 13 weeks and 39 weeks ended November 30, 2025, compared to 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

The Company’s higher gross profit margins for the 13 weeks and 39 weeks ended November 30, 2025 compared to the prior year’s comparable periods were primarily due to higher sales volume, increased selling prices and more favorable sales mixes in the current periods.

The Company’s earnings before income taxes and net earnings increased 86.7% and 87.1%, respectively, in the 13 weeks ended November 30, 2025, compared to the 13 weeks ended December 1, 2024, primarily as a result of higher gross profit margins mentioned above and higher interest income in the current periods.

The Company’s earnings before income taxes and net earnings increased 58.1% and 60.4%, respectively, in the 39 weeks ended November 30, 2025, compared to the 39 weeks ended December 1, 2024, primarily due to the higher gross profit margins mentioned above, the previously reported charges incurred in the prior year related to the storm damage and higher interest income.

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transited the area.

None of the Company’s manufacturing lines or equipment were damaged by the storm.

The roofs on all three buildings in the Company’s Newton, Kansas campus required repairs or replacement.

Also, multiple specialty HVAC units were damaged or destroyed.

The Company recorded a charge of $1.1 million in the 39 weeks ended December 1, 2024 related to the damage and repair and downtime costs.

There were no corresponding charges in the 39 weeks ended November 30, 2025.

The Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses.

The impact of inflation on the Company’s profits has been largely mitigated by the Company’s ability to adjust pricing for a large portion of its sales to pass the impact of inflation through to its customers.

The Company's total net sales in the 13 weeks ended May 31, 2026 were $18.3 million compared to $15.4 million in the 13 weeks ended June 1, 2025.

The increase in sales was due to higher sales in the commercial market driven by higher sales under the GE Aerospace jet engine programs and higher sales in the military market.

The Company’s gross profit margins, measured as percentages of sales, were 34.8% in the 13 weeks ended May 31, 2026 compared to 30.6% in the 13 weeks ended June 1, 2025.

The higher gross profit margin for the 13 weeks ended May 31, 2026 was primarily due to the higher sales volume in the quarter which allowed for improved leverage of fixed overhead costs and a more favorable product mix.

The Company’s earnings from operations before income taxes and net earnings increased 73.1% and 69.9%, respectively, in the 13 weeks ended May 31, 2026 compared to the 13 weeks ended June 1, 2025, primarily as a result of the higher gross margins in the 13 weeks ended May 31, 2026 and higher interest income in the 13 weeks ended May 31, 2026 partially offset by higher selling, general and administrative expenses.

While the Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses, the impact of this has been largely mitigated by the Company’s ability to adjust pricing for a large portion of its sales.

The impact of global tariffs has been minimal and been largely mitigated by the Company’s ability to adjust pricing of its products.

Programs in which the Company participates as a supplier are, in some cases, experiencing supply chain issues from other suppliers to the programs that could result in delays in production for certain customers of the Company.

The Company’s sales may be impacted by these supply chain challenges that its customers are experiencing from other suppliers.

The Company’s sales may be affected by supply chain challenges experienced by its customers as a result of delays involving other suppliers.

The Company has a number of long-term contracts pursuant to which certain of its customers, some of which represent a substantial portion of the Company’s revenue, place orders.

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Purchase orders are generally received by the Company more than three months in advance of delivery.

Under a Business Partner Agreement with ArianeGroup SAS of Les Mureaux, France, Park is the exclusive North American distributor of ArianeGroup’s RAYCARB C2®B NG proprietary product.

RAYCARB C2®B NG is used to produce ablative composite materials for critical rocket and missile systems.

Under a Business Partner Agreement with ArianeGroup SAS of Les Mureaux, France (“ArianeGroup”), ArianeGroup SAS appointed Park as its exclusive North American distributor of ArianeGroup’s RAYCARB C2®B NG proprietary product.

RAYCARB C2®B NG is used to produce ablative composite materials for critical rocketry and missile systems.

Park is a long-term customer of ArianeGroup and uses ArianeGroup’s RAYCARB C2®B NG product in the production of many of Park’s key ablative materials, which Park supplies into critical rocket and missile programs.

On March 27, 2025, Park and ArianeGroup entered into an agreement under which Park would advance funds to ArianeGroup against future purchases of C2®B product in the total amount in Euros of €4,587,000 payable in three installments in 2025, 2026, and 2027.

These advanced funds are to be used to help fund the purchase and installation, by ArianeGroup, of additional manufacturing equipment for ArianeGroup’s production of C2®B product.

On March 27, 2025, Park and ArianeGroup entered into an agreement under which Park would advance funds to ArianeGroup against future purchases of C2®B product in the aggregate amount in Euros of €4,587,000 payable in three installments in 2025, 2026, and 2027.

The Company has made the 2025 and 2026 advances while the 2027 advance will be made in the first quarter of fiscal year 2028.

These advanced funds are being used to help fund the purchase and installation, by ArianeGroup, of additional manufacturing equipment for ArianeGroup’s production of C2®B product.

In July 2026, the Company entered into a sublease agreement covering approximately 18 acres of total land in Tulsa, Oklahoma.

The Company plans to build a new composites material manufacturing and development facility on the site.

The facility will include full production lab facilities, office space, storage and freezer space and ancillary equipment necessary to support all planned manufacturing operations.

The sublease commences on September 1, 2026, and has an initial term of 25 years with a renewal option for an additional 25 years.

Annual rent under the sublease agreement for the initial five years of the sublease would be $269,469 with increases for each subsequent five-year period based upon the Consumer Price Index for All Urban Consumers, U.S., City Average All Items as published by the United States Department of Commerce.

The Company expects economic development incentives to offset a significant portion of the rent expense.

Results of Operations:

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13 Weeks Ended

39 Weeks Ended

(Amounts in thousands, except per share

(Amounts in thousands, except per share amounts)

Cost of sales

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Earnings from operations

Storm damage charge

Interest and other income

Earnings from operations before income taxes

Income tax provision (Note 9)

Income tax provision

Earnings per share:

1 unchanged sentence

Diluted earnings per share

The Company's net sales in the 13 weeks and 39 weeks ended November 30, 2025, were $17.3 million and $49.1 million, respectively, compared to $14.4 million and $45.1 million, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

Sales for the 13-week and 39-week periods ended November 30, 2025 were higher than the comparable period of the prior year, primarily due to higher sales to the space, commercial and military markets partially offset by lower sales in the business aircraft market.

The Company’s gross profit in the 13 weeks and 39 weeks ended November 30, 2025 was higher than the gross profit in the prior year’s comparable periods due to higher sales, sales price increases, a more favorable product mix and lower labor costs which were partially offset by higher overhead costs, including higher insurance costs, utilities, repairs and maintenance costs and salaries and fringe benefits as well as higher direct material costs.

The Company’s gross profit margins, measured as a percentage of sales, were 34.1% and 32.0%, respectively, in the 13 weeks and 39 weeks ended November 30, 2025, compared to 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

The higher gross profit margin for the 13 weeks ended November 30, 2025 compared to the prior year’s comparable period, was primarily due to a more favorable sales mix as well as sales price increases, lower labor costs and lower overhead costs as a percentage of sales partially offset by higher waste costs.

The higher gross profit margin for the 39 weeks ended November 30, 2025 compared to the prior year’s comparable period, was primarily due to a more favorable sales mix, sales price increases and lower labor costs partially offset by higher freight costs.

The Company's total net sales in the 13 weeks ended May 31, 2026 were $18.3 million compared to $15.4 million in the 13 weeks ended June 1, 2025.

The increase in sales was primarily due to higher sales in the commercial and military markets reflecting increased demand in both markets.

The Company’s gross profit margins, measured as percentages of sales, were 34.8% in the 13 weeks ended May 31, 2026 compared to 30.6% in the 13 weeks ended June 1, 2025.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $277,000, or 14.0%, during the 13 weeks ended November 30, 2025 compared to the 13 weeks ended December 1, 2024, and these expenses, measured as percentages of sales, were 13.0% in the 13 weeks ended November 30, 2025 compared to 13.8% in the 13 weeks ended December 1, 2024.

The increase in selling, general and administrative expenses, in dollars, during the 13 weeks ended November 30, 2025 was primarily due to higher salaries, fringe benefits, incentive compensation, profit sharing expenses, travel expenses and professional fees partially offset by lower freight out expense.

Selling, general and administrative expenses increased by $690,000, or 11.2%, during the 39 weeks ended November 30, 2025 compared to the 39 weeks ended December 1, 2024, and these expenses, measured as a percentage of sales, were 13.9% in the 39 weeks ended November 30, 2025 compared to 13.6% in the 39 weeks ended December 1, 2024.

The increase in selling, general and administrative expenses during the 39 weeks ended November 30, 2025 was primarily due to the higher salaries, fringe benefits, incentive compensation, profit sharing expenses, travel expenses, research and development expenses and professional fees partially offset by lower freight out, advertising and trade show expenses.

Selling, general and administrative expenses included stock option expenses of $105,000 and $294,000, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to stock option expenses of $105,000 and $295,000 for the 13 weeks and 39 weeks ended December 1, 2024.

Selling, general and administrative expenses increased compared to the prior year’s comparable period in dollars but decreased as a percentage of sales.

These expenses, measured as percentages of sales, were 12.9% in the 13 weeks ended May 31, 2026 compared to 14.9% in the 13 weeks ended June 1, 2025.

The increase in selling, general and administrative expenses in dollars was primarily due to higher research and development costs, higher freight costs and higher shareholder expenses partially offset by lower professional and legal fees.

As a percentage of sales, the decrease in selling, general and administrative expenses is due to the increase in sales in the 13 weeks ended May 31, 2026.

Selling, general and administrative expenses included stock option expenses of $92,000 for the 13 weeks ended May 31, 2026, compared to stock option expenses of $88,000 in the 13 weeks ended June 1, 2025.

Earnings from Operations

For the reasons set forth above, the Company’s earnings from operations were $3.6 million and $8.9 million, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to $1.8 million and $6.5 million, respectively, for the 13 weeks and 39 weeks ended December 1, 2024.

For the reasons set forth above, the Company’s earnings from operations were $4.0 million for the 13 weeks ended May 31, 2026 compared to $2.4 million for the 13 weeks ended June 1, 2025.

Interest and Other Income

Interest and other income were $343,000 and $1,088,000, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to $290,000 and $874,000, respectively, for the prior year's comparable periods.

Interest income increased 18.3% and 24.5%, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, primarily due to interest received on tax refunds in the 39 weeks ended November 30, 2025 and a foreign exchange gain recorded related to a long-term supplier advance.

During the 13 weeks and 39 weeks ended November 30, 2025, the Company earned interest income principally from its investments, which consisted primarily of short-term instruments and money market funds as well the tax refund noted above.

Interest and other income was $786,000 for the 13 weeks ended May 31, 2026, compared to $355,000 for the prior year’s comparable period.

Interest income increased 121% for the 13 weeks ended May 31, 2026 primarily due to higher investment balances.

Cash balances were higher in the 13 weeks ended May 31, 2026 as a result of stock sales in the prior quarter that resulted in net proceeds of $21.7 million under the Company’s at the market offering.

During the 13 weeks ended May 31, 2026, the Company earned interest income principally from its cash and investments, which consisted primarily of short-term instruments and money market funds.

Income Tax Provision

For the 13 weeks and 39 weeks ended November 30, 2025, the Company recorded income tax provisions of $1.0 million and $2.6 million, respectively, which included net discrete income tax benefits of $(21,000) and $(59,000), respectively, for excess tax benefits from stock option exercises offset by the accrual of interest related to unrecognized tax benefits.

For the 13 weeks and 39 weeks ended December 1, 2024, the Company recorded income tax provisions of $559,000 and $1.7 million, respectively, which included discrete income tax provisions of $19,000 and $60,000, respectively, for the accrual of interest related to unrecognized tax benefits.

The Company’s effective tax rates for the 13 weeks and 39 weeks ended November 30, 2025 were 26.0% and 25.6%, respectively, compared to 26.2% and 26.7%, respectively, in the prior year’s comparable periods.

The effective tax rates for the 13 weeks and 39 weeks ended November 30, 2025 were higher than the U.S.

statutory rate of 21% primarily due to state and local taxes and liabilities, and the accrual of interest related to unrecognized tax benefits offset by excess tax benefits on stock option exercises.

The effective rates for the 13 weeks and 39 weeks ended December 1, 2024 were higher than the U.S.

For the 13 weeks ended May 31, 2026, the Company recorded an income tax provision of $1.3 million, which included a discrete income tax benefit of $0.

For the 13 weeks ended June 1, 2025, the Company recorded an income tax provision of $694,000, which included a discrete income tax benefit of $(28,000) for the excess tax benefits of stock option exercises in the 13 weeks ended June 1, 2025 partially offset by the accrual of interest related to unrecognized tax benefits.

The Company’s effective tax rate for the 13 weeks ended May 31, 2026 was 26.4% compared to 25.0% in the prior year’s comparable period.

The effective tax rate for the 13 weeks ended May 31, 2026 was higher than the U.S.

statutory rate of 21% primarily due to state and local taxes.

The effective rate for the 13 weeks ended June 1, 2025 was higher than the U.S.

statutory rate of 21% primarily due to state and local taxes and the accrual of interest related to unrecognized tax benefits.

For the reasons set forth above, the Company's net earnings for the 13 weeks and 39 weeks ended November 30, 2025 were $3.0 million and $7.4 million, respectively, compared to net earnings of $1.6 million and $4.6 million, respectively, for the 13 weeks and 39 weeks ended December 1, 2024.

For the reasons set forth above, the Company’s net earnings for the 13 weeks ended May 31, 2026 were $3.5 million compared to net earnings of $2.1 million for the 13 weeks ended June 1, 2025.

Basic and Diluted Earnings Per Share

In the 13 weeks and 39 weeks ended November 30, 2025, basic and diluted earnings per share were $0.15 and $0.37, respectively, compared to basic and diluted earnings per share of $0.08 and $0.23, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

Liquidity and Capital Resources - Continuing Operations:

In the 13 weeks ended May 31, 2026, basic and diluted earnings per share were $0.17 compared to basic and diluted earnings per share of $0.10 in the 13 weeks ended June 1, 2025.

Liquidity and Capital Resources:

(Amounts in thousands)

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Cash and Marketable Securities

Of the $63.6 million of cash and cash equivalents and marketable securities at November 30, 2025, $32.0 million was owned by one of the Company’s wholly-owned foreign subsidiaries.

The change in cash and cash equivalents and marketable securities at November 30, 2025 compared to March 2, 2025 was the result of capital expenditures, the purchase of treasury shares, dividends paid to shareholders, the Company’s transition tax installment payment, and a number of additional factors.

The significant changes in cash (used in) provided by operating activities was as follows:

accounts receivable decreased by 6% at November 30, 2025 compared to March 2, 2025 primarily due to improved collections in the 13 weeks ended November 30, 2025 than in the comparable period in the prior year;

inventories increased by 6% at November 30, 2025 compared to March 2, 2025 primarily due to timing of raw materials purchases;

prepaid and other current assets decreased by 4% at November 30, 2025 compared to March 2, 2025 primarily due to lower interest receivable balances;

other assets increased $1.6 million during the 39 weeks ended November 30, 2025 due to a long-term supplier advance paid during the first quarter of fiscal year 2026;

accounts payable increased by 30% at November 30, 2025 compared to March 2, 2025 primarily due to timing of vendor payments;

accrued liabilities increased by 2% at November 30, 2025 compared to March 2, 2025 due to higher accrued incentive compensation;

income taxes payable decreased by 87% at November 30, 2025 compared to March 2, 2025 due to the payment of a $4.9 million transition tax installment payment in June 2025 partially offset by an increase as a result of increased taxable earnings in the 39 weeks ended November 30, 2025.

In addition, the Company paid $7.5 million in cash dividends in the 39-week period ended November 30, 2025 compared to $7.6 million in the 39-week period ended December 1, 2024.

During the 39 weeks ended November 30, 2025, the Company repurchased shares of $2.2 million compared to $4.3 million of repurchases in the 39 weeks ended December 1, 2024.

The Company had proceeds from the exercises of stock options of approximately $780,000 in the 39 weeks ended November 30, 2025 compared to proceeds from the exercises of stock options of $26,000 in the 39 weeks ended December 1, 2024.

Of the $89.4 million of cash and cash equivalents and marketable securities at May 31, 2026, $32.7 million was owned by one of the Company’s wholly-owned foreign subsidiaries.

The change in cash and cash equivalents and marketable securities at May 31, 2026 compared to March 1, 2026 was the result of higher cash collections due to the increased sales mostly offset by a supplier advance of $2.2 million paid in May 2026 and dividends paid to shareholders.

The significant changes in cash provided by operating activities were as follows:

inventories increased by 5% at May 31, 2026 compared to March 1, 2026 primarily due to the timing of raw material purchases and production;

prepaid expenses and other current assets increased by 9% at May 31, 2026 compared to March 1, 2026 primarily due to higher prepaid information technology contracts and insurance partially offset by lower prepaid taxes;

other assets increased $2.1 million during the 13 weeks ended May 31, 2026 due to a long-term supplier advance paid during the quarter;

accounts payable decreased by 5% at May 31, 2026 compared to March 1, 2026 primarily due to the timing of supplier payments in the quarter;

accrued liabilities increased by 12% at May 31, 2026 compared to March 1, 2026 primarily due to higher accrued bonuses and profit sharing;

income taxes payable increased 182% at May 31, 2026 compared to March 1, 2026 primarily due to earnings in the 13 weeks ended May 31, 2026.

In addition, the Company paid $2.6 million and $2.5 million in cash dividends in the 13-week period ended May 31, 2026 and the 13-week period ended June 1, 2025, respectively.

Working Capital

The decrease in working capital at November 30, 2025 compared to March 2, 2025 was primarily due to a decrease in cash as a result of the payment of the long-term supplier advance of $1.6 million, treasury share repurchases of $2.2 million and the payment of $7.5 million of dividends.

The Company's current ratio (the ratio of current assets to current liabilities) was 15.8 to 1.0 at November 30, 2025, compared to 9.7 to 1.0 at March 2, 2025.

During the 39 weeks ended November 30, 2025, the Company's net earnings, adjusted for depreciation and amortization, deferred income taxes, stock-based compensation, amortization of bond premium, provision for credit losses, loss on sale of marketable securities and changes in operating assets and liabilities, resulted in a $4.6 million operating cash inflow compared to a cash inflow of $3.7 million for the 39 weeks ended December 1, 2024.

The increase was driven by the higher earnings and improved collections of accounts receivable partially offset by a payment of a $1.6 million long-term supplier advance during the 39 weeks ended November 30, 2025.

During the same 39-week period, the Company expended $1,502,000 for the purchase of property, plant and equipment compared with $258,000 during the 39 weeks ended December 1, 2024.

The Company paid $7.5 million in cash dividends in the 39-week period ended November 30, 2025 compared to $7.6 million in the 39-week period ended December 1, 2024.

The Company purchased treasury shares of $2.2 million in the 39-week period ended November 30, 2025 compared to $4.3 million in the 39-week period ended December 1, 2024.

The decrease in working capital at May 31, 2026 compared to March 1, 2026 was due principally to the payment of a long-term advance to a supplier of $2.2 million during the period, lower marketable securities and higher current liabilities, partially offset by higher cash, inventories, and prepaid expenses at May 31, 2026.

The Company's current ratio (the ratio of current assets to current liabilities) was 15.3 to 1.0 at May 31, 2026 compared to 18.2 to 1.0 at March 1, 2026.

During the 13 weeks ended May 31, 2026, the Company had operating cash flows of $2.7 million compared to $1.6 million for the 13 weeks ended June 1, 2025.

During the same 13-week period, the Company expended $113,000 for the purchase of property, plant and equipment, compared with $481,000 during the 13 weeks ended June 1, 2025.

The Company paid $2.6 million in cash dividends in the 13-week period ended May 31, 2026 compared to $2.5 million in cash dividends in the 13-week period ended June 1, 2025.

Other Liquidity Factors

The Company believes its financial resources will be sufficient, through the 12 months following the filing of this Form 10-Q Quarterly Report and for the foreseeable future thereafter, to provide for continued investment in working capital and property, plant and equipment and for general corporate purposes.

The Company’s financial resources are also available for purchases of the Company's common stock, cash dividend payments, and appropriate acquisitions and other expansions of the Company's business.

On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (“Needham”) and Citizens JMP Securities, LLC (“Citizens”) (the “Distribution Agreement”) under which the Company may offer and sell, from time to time, at its sole discretion, up to $50.0 million in shares of its common stock.

The issuance and sale, if any, of shares of the Company’s common stock under the Distribution Agreement will be made pursuant to a registration statement on Form S-3 that the Company expects to file with the U.S.

Securities and Exchange Commission (“SEC”) on January 13, 2026.

No sales will be made pursuant to the Distribution Agreement unless and until the registration statement on Form S-3 is declared effective by the SEC.

The Company expects construction on the new facility to begin in fiscal year 2027.

The Company’s financial resources are also available for purchases of the Company's common stock, cash dividend payments, appropriate acquisitions and other expansions of the Company's business.

The Company is not aware of any circumstances or events that are reasonably likely to occur that could materially affect its liquidity.

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Contractual Obligations:

The Company’s contractual obligations and other commercial commitments to make future payments under contracts, such as lease agreements, consist only of (i) operating lease commitments and (ii) commitments to purchase raw materials.

The Company’s contractual obligations and other commercial commitments to make future payments under contracts, such as lease agreements, consist primarily of operating lease commitments, commitments to purchase raw materials and remaining advance payable to ArianeGroup SAS.

In March 2025, the Company entered into an agreement with a supplier, ArianeGroup SAS, under which the Company would advance funds against future purchases.

The agreement requires payments of €4,587 over three years, of which €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 (approximately $2,142 based on January 7, 2026 exchange rates) is due in the first quarter of fiscal 2027 and €1,376 (approximately $1,607 based on January 7, 2026 exchange rates) is due in the first quarter of fiscal 2028.

Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost, in aggregate, of €36,000.

The Company has no other long-term debt, capital lease obligations, unconditional purchase obligations or other long-term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than two standby letters of credit in the total amount of $140,000, that secure the Company’s obligations under its workers’ compensation insurance program.

The agreement requires payments of €4,587 over three years, of which €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 was paid in May 2026 (actual cost of $2,156) and €1,376 (approximately $1,575 based on July 7, 2026 exchange rates) is due in the first quarter of fiscal 2028.

Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost of €36,000.

The Company has no other long-term debt, capital lease obligations, unconditional purchase obligations or other long-term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than two standby letters of credit in the total amount of $140,000, to secure the Company’s obligations under its workers’ compensation insurance program.

In July 2026, the Company entered into a sublease agreement covering approximately 18 acres of total land in Tulsa, Oklahoma.

The Company plans to build a new composites material manufacturing and development facility on the site.

The facility will include full production lab facilities, office space, storage and freezer space and ancillary equipment necessary to support all planned manufacturing operations.

The sublease commences on September 1, 2026, and has an initial term of 25 years with a renewal option for an additional 25 years.

The Company expects economic development incentives to offset a significant portion of the rent expense.

Off-Balance Sheet Arrangements:

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Critical Accounting Policies and Estimates:

The foregoing Discussion and Analysis of Financial Condition and Results of Operations is based upon the Company’s Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP.

The preparation of these Condensed Consolidated Financial Statements requires the Company to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent liabilities.

On an ongoing basis, the Company evaluates its estimates, including those related to sales allowances, allowances for credit losses, inventories, valuation of long-lived assets, income taxes, contingencies and litigation, and employee benefit programs.

On an ongoing basis, the Company evaluates its estimates, including those related to sales allowances, allowances for doubtful accounts, inventories, valuation of long-lived assets, income taxes, contingencies and litigation, and employee benefit programs.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

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The Company’s critical accounting policies that are important to the Condensed Consolidated Financial Statements and that entail, to a significant extent, the use of estimates and assumptions and the application of management’s judgment, are described in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in the Company’s Annual Report on Form 10-K for the fiscal year ended March 1, 2026.

There have been no significant changes to such accounting policies during the 2026 fiscal year third quarter.

There have been no significant changes to such accounting policies during the 2027 fiscal year first quarter.

Contingencies:

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The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses.

A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue.

The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters.

A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each individual issue.

The required accrual may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters.

Factors That May Affect Future Results;

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Quantitative and Qualitative Disclosures About Market Risk .

The Company’s market risk exposure at November 30, 2025 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 2, 2025.

The Company’s market risk exposure at May 31, 2026 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 1, 2026.

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