What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-26 · 90 added, 94 removed, 137 unchanged (57% of the section changed)

1 unchanged sentence

The following discussion and analysis of our results of operations and financial position should be read together with our consolidated financial statements and accompanying notes, which are contained in “Item 8.

Financial Statements and Supplementary Data.”

The discussion of the comparison of our 2023 and 2022 results was previously disclosed within the Management’s Discussion & Analysis in Part II, Item 7 of the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2024 and has been omitted from this section pursuant to Instruction 1 to Item 303(b) of Regulation S-K, except the Operating Segment Net Sales and Gross Margin section, which has been recast due to changes resulting from the adoption of ASU 2023-07:

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

Financial Statements and Supplementary Data.” The discussion of the comparison of our 2024 and 2023 results was previously disclosed within the Management’s Discussion & Analysis in Part II, Item 7 of the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2025 and has been omitted from this section pursuant to Instruction 1 to Item 303(b) of Regulation S-K.

Company Overview and Strategy

4 unchanged sentences

Our growth and profitability strategy is based upon the following principles:

(1) market-driven organization, (2) innovation leadership, (3) synergistic mergers and acquisitions, and (4) operational excellence.

Our priorities in executing this strategy are focused on driving near-term improvements to profitability and improving the growth outlook for the Company over the next several years by further strengthening our focus on our portfolio and commercial activities, optimizing our global capacity to meet customer demand and driving innovation.

As a market-driven organization, we are focused on capitalizing on growth opportunities in several different end markets.

This includes the automotive industry, where there are market opportunities resulting from the increasing electrification of vehicles, and in the expanding use of ADAS.

(1) market-driven organization, (2) innovation leadership, (3) operational excellence, and (4) synergistic mergers and acquisitions.

Our priorities in executing this strategy are focused on driving near-term improvements to profitability and improving the growth outlook for the Company over the next several years by further strengthening our focus on commercial activities, optimizing our global capacity to meet customer demand and driving innovation.

As a market-driven organization, we are focused on capitalizing on growth opportunities in multiple end markets.

This includes the automotive industry, where there are market opportunities resulting from the continuing trends in vehicle electrification, and ADAS adoption.

Other opportunities are driven by the advancement of communication systems in aerospace and defense, the growth of next-generation smartphones in the portable electronics industry, and the continued expansion of renewable energy.

In addition to our focus on these markets, we sell into a variety of other markets, including general industrial, wireless infrastructure and mass transit.

Our growth strategy is based on addressing trends in these markets and applying our repeatable customer engagement process.

Our sales engineers and technical service employees work closely with our customers to understand their complex challenges.

They then leverage our innovation and technology capabilities and deep applications expertise to provide unique solutions to customers’ challenges.

In addition to these capabilities, our strategy for success is also built on our reputation for high performance and reliability, trusted customer relationships and an expansive product portfolio.

Through this strategy we expect to be able to drive further commercial wins, which provide the potential for higher growth in the future.

This growth strategy is enabled by both organic and inorganic investments from which we strive to ensure high-quality solutions for our customers.

Our operational excellence efforts are focused on driving ongoing cost structure improvements to further enhance our profitability.

In addition to our focus on these markets, we sell into a variety of other markets, including industrial, wireless infrastructure and mass transit.

Our growth strategy is based on addressing trends in these markets and maintaining a strong customer-centric focus.

Our sales engineers and technical service employees work closely with our customers to understand their needs and then leverage our development capabilities and applications expertise to provide customized solutions.

Our strategy is supported by an expansive product portfolio and a reputation for producing high performance and reliable products.

We expect to secure further commercial wins and improve sales as we execute on this strategy.

Our operational excellence efforts are focused on driving ongoing cost improvements and efficiencies to further enhance our profitability while enhancing the agility and customer focus of the organization.

These efforts include focusing on improving yields, throughput, procurement capabilities, and manufacturing processes.

We have also taken specific cost improvement actions in recent quarters that have and will benefit our performance.

These actions include optimizing our manufacturing footprint, divesting non-core product lines and reducing manufacturing and corporate employees.

These actions include optimizing our manufacturing footprint, and reducing manufacturing and corporate employees.

We continue to review and re-align our manufacturing and engineering footprint in an effort to maintain a leading competitive position globally and to support our customers’ growth initiatives.

We seek to enhance our operational and financial performance by investing in research and development, manufacturing and materials efficiencies, and new product initiatives that respond to the needs of our customers.

We strive to evaluate operational and strategic alternatives to improve our business structure and align our business with the changing needs of our customers and major industry trends affecting our business.

If we are able to successfully execute on our strategy, we see an opportunity, over the next several years, to meaningfully increase revenues from current levels and further improve profitability.

The increase in revenues is expected to come from a combination of organic growth and targeted acquisitions.

This outlook is supported by our participation in a number of growth markets and by our competitive positions in these markets.

The fastest growing market opportunity is expected to be EV/HEV where third-party analysis projects that the market will increase at a compound annual growth rate of between 10% and 15% over the next several years.

Within the EV/HEV market, we believe our advanced battery cell pads and ceramic substrates provide multiple content opportunities to capitalize on this growth.

Other markets with good growth trajectories include ADAS, aerospace and defense, portable electronics and renewable energy.

We strive to evaluate operational and strategic alternatives to improve our business structure and align our business with the changing needs of our customers and evolving industry trends.

If we successfully execute this growth and operational improvement strategy, we see an opportunity, over the next several years, to increase revenues from current levels and further improve profitability.

The increase in revenues is largely expected to come from our organic business, with the potential to augment this growth through targeted acquisitions.

Executive Summary

1 unchanged sentence

• In 2025, as compared to 2024, our net sales decreased by 2.3% to $810.8 million, our gross margin decreased 170 basis points to 31.7% from 33.4%, and operating income as a percentage of net sales decreased 860 basis points to (5.6%) from 3.0%.

• We entered into and executed the JV Separation Agreement with INOAC, which resulted in gains of $7.7 million recorded in Other income (expense), net.

• We recognized restructuring charges of $16.2 million in 2024 primarily related to our manufacturing footprint consolidation plan and our reduction in global workforce plan.

• We recognized impairment charges of $7.9 million in 2024, primarily related to our new ERP system still in development.

• We made $30.0 million of discretionary principal payments on our revolving credit facility in 2024.

• We repurchased 0.2 million shares of our capital stock for $19.8 million in 2024.

• We recognized impairment charges of $71.8 million in 2025 related to our curamik ® reporting unit within our AES operating segment, and $1.9 million related to the impairment of our facility lease in Mexico.

• We recognized restructuring charges of $23.4 million in 2025 due to our wind down of manufacturing operations for our AES operating segment in our Evergem, Belgium facility, phase one of curamik ® manufacturing footprint consolidation, our executive leadership transition, and the reduction of our global workforce.

• We repurchased 738,145 shares of our capital stock for $52.4 million in 2025.

Results of Operations

6 unchanged sentences

Other operating (income) expense, net — % — %

Operating income 3.0 % 9.4 %

Operating income (loss) (5.6) % 3.0 %

Equity income in unconsolidated joint ventures — % 0.2 %

Other income (expense), net (0.1) % 1.0 %

Interest expense, net (0.1) % (1.1) %

Income before income tax expense 4.1 % 8.4 %

Interest income (expense), net 0.1 % (0.1) %

Income (loss) before income taxes (5.6) % 4.1 %

Income tax expense 2.0 % 1.0 %

Net income 3.1 % 6.2 %

Net income (loss) (7.6) % 3.1 %

Net Sales and Gross Margin

5 unchanged sentences

Our AES and EMS operating segments had net sales decreases of 1.5% and 3.1%, respectively.

The decrease in net sales was primarily due to lower net sales in the EV/HEV, industrial, ADAS and renewable energy markets, partially offset by higher net sales in the wireless infrastructure and aerospace and defense markets.

We experienced lower EV/HEV net sales in our AES operating segment as customers continued to manage inventory levels and adjusted to softer end market demand and we experienced lower industrial net sales in our EMS operating segment primarily due to the non-recurrence of a one-time bulk purchase by a customer in 2023.

Gross margin in 2024 declined due to lower volume and unfavorable mix, partially offset by reduction in manufacturing spend, scrap and yield improvements and lower inventory reserves provisions.

The decrease in net sales was primarily due to lower net sales in the wireless infrastructure and EV/HEV markets, partially offset by higher net sales in the aerospace and defense and ADAS markets.

We experienced lower EV/HEV net sales as customers continued to manage inventory levels and adjust to changing regional demands.

We experienced lower wireless infrastructure net sales as a program for a key customer was launched and completed in 2024.

Net sales were favorably impacted by foreign currency impacts of $6.0 million, or 0.7%, due to the appreciation in value of the euro relative to the U.S.

dollar, partially offset by depreciation in value of the Korean won and Chinese renminbi, relative to the U.S.

Gross margin as a percentage of net sales decreased 170 basis points to 31.7% in 2025 compared to 33.4% in 2024.

Gross margin in 2025 declined due to lower volumes and related utilization headwinds and unfavorable yield performance, partially offset by favorable mix and cost savings from our manufacturing footprint consolidation in Belgium.

Selling, General and Administrative Expenses

2 unchanged sentences

Percentage of net sales 21.8 % 23.3 %

SG&A expenses decreased 4.4% in 2024 from 2023, primarily due to a $9.5 million decrease in professional services expense, partially offset by the non-recurrence of the $0.7 million gain on the sale of our high-performance engineered cellular elastomer business in 2023.

The decrease in professional services expense was primarily attributable to the non-recurrence of the $7.6 million of non-routine shareholder advisory costs and the $1.1 million of expenses in connection with the sale of our high-performance engineered cellular elastomer business, both of which were incurred in 2023.

SG&A expenses decreased 8.7% in 2025 from 2024, primarily due to an $10.6 million decrease in compensation and benefits expense due to our overall reduction in employee count, a $7.2 million decrease in professional services expenses, and a $1.4 million decrease in intangible asset amortization, partially offset by a $3.3 million increase in fixed asset depreciation.

Research and Development Expenses

2 unchanged sentences

Percentage of net sales 3.5 % 4.2 %

R&D expenses decreased 3.1% in 2024 from 2023, primarily due to a $1.0 million decrease in compensation and benefits and a $0.8 million decrease in professional services expense, partially offset by a $0.7 million increase in trial costs for alternative raw materials.

R&D expenses decreased 18.8% in 2025 from 2024, primarily due to a $3.4 million decrease in compensation and benefits expense and a $1.8 million decrease in R&D trials.

The decrease in compensation and benefits expense was largely driven by overall reduction in employee count and cost savings related to our exit from our Burlington, Massachusetts Innovation Center facility.

Restructuring and Impairment Charges and Other Operating (Income) Expense, Net

3 unchanged sentences

We recognized $23.4 million and $16.2 million of restructuring charges in 2025 and 2024, respectively.

The restructuring charges in 2024 were related to manufacturing footprint consolidation efforts, which impacted our Evergem, Belgium facility, along with the reduction in global workforce plan announced in November 2024 and the R&D facility exit plan announced in June 2024.

The restructuring charges in 2023 were related to the reduction in global workforce and facility consolidation plans announced in February 2023.

We recognized $7.9 million of impairment charges in 2024, which were primarily related to our new ERP system still in development.

With respect to other operating (income) expense, net, we recognized expense of $0.1 million and income of $33.1 million in 2024 and 2023, respectively.

The income recognized in 2023 was primarily related to insurance recoveries from the fire at our UTIS manufacturing facility in Ansan, South Korea.

The restructuring charges in 2025 were related to manufacturing footprint consolidation efforts, which impacted our facilities in Evergem, Belgium and Eschenbach, Germany, our global reduction in workforce, and our executive leadership transition.

The restructuring charges in 2024 were related to manufacturing footprint consolidation efforts, the R&D facility exit plan, and the reduction in global workforce.

We recognized $71.8 million of impairment charges in 2025 related to our curamik ® reporting unit within our AES operating segment as well as $1.9 million of impairment charges related to our facility lease in Mexico.

For additional information, refer to “Note 7 – Goodwill and Intangible Assets” and "Note 6 – Leases ” to “Item 8.

Financial Statements and Supplementary Data.” We recognized $7.9 million of impairment charges in 2024 related to our new ERP system still in development.

For additional information, refer to “ Note 14 – Supplemental Financial Information ” to “Item 8.

3 unchanged sentences

Equity income in unconsolidated joint ventures $ — $ 1.4

Up until November 5, 2024, we had two unconsolidated JVs, each 50% owned:

Equity income in those unconsolidated JVs decreased 22.2% in 2024 from 2023 due to lower net sales for RIC and RIS, which was primarily driven by the portable electronics market in Asia, a change in the business model for RIS to subcontracting manufacturing in the second half of 2023, as well as the discontinuation of the JV relationships in November 2024.

Up until early November, 2024, we had two unconsolidated, 50% owned, JVs:

In early November, 2024, our JV relationships were discontinued resulting in the year-over-year decrease in equity income in those unconsolidated JVs.

For additional information, refer to “Note 16 – Mergers and Acquisitions” to “Item 8.

3 unchanged sentences

Other income (expense), net $ (0.9) $ 8.8

Other income (expense), net increased to $8.8 million of income in 2024 compared to $0.7 million of expense in 2023.

The increase was due to the recognition of $7.7 million of gains in connection to the execution of the JV Separation Agreement with INOAC, as well as a favorable year-over-year change in impacts from our foreign currency transactions, partially offset by an unfavorable year-over-year change in impacts from our foreign currency derivatives.

Interest Expense, Net

Other income (expense), net decreased to $0.9 million of expense in 2025 compared to $8.8 million of income in 2024.

The decrease was due to the recognition of a $7.7 million gain in 2024 in connection with the execution of the JV Separation Agreement with INOAC, $2.3 million of unfavorable year-over-year changes in impacts from our foreign currency transactions, $1.4 million of unfavorable year-over-year changes in impacts from our foreign currency derivatives, partially offset by $1.9 million in favorable year-over-year changes from our copper derivatives.

Interest Income (Expense), Net

(Dollars in millions) 2025 2024

Interest expense, net $ (0.8) $ (10.1)

Interest expense, net, decreased by $9.3 million in 2024 from 2023, due to a lower weighted-average outstanding balance for our borrowings under our revolving credit facility.

Interest income (expense), net $ 0.8 $ (0.8)

Interest income (expense), net, increased by $1.6 million in 2025 from 2024, due to higher income on interest-bearing cash accounts and a lower average outstanding balance on our revolving credit facility.

Income Tax Expense

2 unchanged sentences

Effective tax rate (37.0) % 23.9 %

Our effective income tax rate for 2024 was 23.9% compared to 25.8% for 2023.

The decrease from 2023 was primarily due to the (i) release of valuation allowance against certain NOLs, (ii) JV Separation which did not have a corresponding tax gain and (iii) favorable releases of uncertain tax positions, offset by (iv) increased non-deductible equity compensation.

Our effective income tax rate for 2025 was negative 37.0%, representing tax expense with a pre-tax book loss, compared to income tax expense of 23.9% for 2024.

The 2025 rate change was primarily due to (i) the change in valuation allowance against deferred tax assets, and (ii) the curamik ® goodwill impairment with no related tax benefit.

Operating Segment Net Sales and Gross Margin

5 unchanged sentences

Our AES operating segment net sales decreased by 1.5% in 2025 compared to 2024.

The decrease in net sales was primarily driven by lower net sales in the EV/HEV, industrial power systems, ADAS and renewable energy markets, partially offset by higher net sales in the wireless infrastructure and aerospace and defense markets.

We experienced lower EV/HEV net sales as customers continued to manage inventory levels and adjusted to softer end market demand.

Our AES operating segment net sales decreased by 3.9% in 2023 compared to 2022.

The decrease in net sales was primarily driven by lower net sales in the power interconnects EV/HEV, aerospace and defense, wireless infrastructure and portable electronics markets, partially offset by higher net sales in the power substrates EV/HEV, renewable energy and ADAS markets.

The decrease in net sales was primarily driven by lower net sales in the wireless infrastructure and EV/HEV markets, partially offset by higher net sales in the ADAS and aerospace and defense markets.

EV/HEV net sales were lower as customers continued to manage inventory levels and adjusted to changing regional demands.

Wireless infrastructure net sales decreased as a program for a key customer was launched and completed in 2024.

Net sales were favorably impacted by foreign currency fluctuations of $4.8 million, or 1.1%, due to the appreciation in value of the euro relative to the U.S.

dollar, partially offset by the depreciation in value of Chinese renminbi relative to the U.S.

Our AES operating segment gross margin in 2024 declined due to lower volume and unfavorable mix, which was partially offset by lower manufacturing spend.

As a percentage of net sales, gross margin in 2024 was 29.3% as compared to 30.9% in 2023.

Our AES operating segment gross margin in 2023 declined due to lower volumes and unfavorable mix, unfavorable yield performance and higher inventory reserves provisions, which was partially offset by lower freight, duties and tariffs costs, lower raw material costs and favorable factory optimization efforts.

As a percentage of net sales, gross margin in 2023 was 30.9% as compared to 32.3% in 2022.

dollar, partially offset by the depreciation in value of Chinese renminbi and Korean won relative to the U.S.

Our AES operating segment gross margin as a percentage of net sales increased 30 basis points to 29.6% in 2025 compared to 29.3% in 2024.

Gross margin in 2025 increased due to favorable mix and cost savings from our manufacturing footprint consolidation in Belgium, partially offset by lower volume and related utilization headwinds and unfavorable yield performance.

Elastomeric Material Solutions

4 unchanged sentences

Our EMS operating segment net sales decreased by 3.1% in 2025 compared to 2024.

The decrease in net sales was primarily driven by lower net sales in the industrial market, partially offset by higher net sales in the EV/HEV market.

We experienced lower industrial net sales primarily due to the non-recurrence of a one-time bulk purchase by a customer in 2023.

Our EMS operating segment net sales decreased by 9.8% in 2023 compared to 2022.

The decrease in net sales was primarily driven by lower net sales in the general industrial, consumer, portable electronics and EV/HEV markets, partially offset by higher net sales in the aerospace and defense market.

Net sales were unfavorably impacted by foreign currency fluctuations of $3.6 million, or 0.9%, due to the depreciation in value of Chinese renminbi relative to the U.S.

dollar, partially offset by the appreciation in value of the euro relative to the U.S.

Our EMS operating segment gross margin in 2024 improved due to scrap and yield improvements and lower inventory reserves provisions, which was partially offset by lower volume and unfavorable mix.

As a percentage of net sales, gross margin in 2024 was 38.4% as compared to 37.5% in 2023.

Our EMS operating segment gross margin in 2023 improved due to lower freight, duties and tariffs costs, lower raw material costs and favorable factory optimization efforts, which was partially offset by lower volumes, unfavorable yield performance and higher inventory reserves provisions.

As a percentage of net sales, gross margin in 2023 was 37.5% as compared to 33.7% in 2022.

The decrease in net sales was primarily driven by lower net sales in the EV/HEV market, partially offset by higher net sales in the industrial market.

We experienced lower EV/HEV net sales due to customer inventory management in response to end market demands.

Net sales were favorably impacted by foreign currency fluctuations of $1.2 million, or 0.3%, due to the appreciation in value of the euro and British pound relative to the U.S.

dollar, partially offset by the depreciation in value of Chinese renminbi and Korean won relative to the U.S.

Our EMS operating segment gross margin as a percentage of net sales decreased 420 basis points to 34.2% in 2025 compared to 38.4% in 2024.

Gross margin in 2025 declined due to lower volumes and related utilization headwinds, unfavorable mix and unfavorable yield performance.

(Dollars in millions) 2025 2024

3 unchanged sentences

Net sales in our Other operating segment decreased by 6.5% in 2025 from 2024.

Our Other operating segment gross margin in 2024 declined due to unfavorable impacts from lower volume and unfavorable factory utilization.

As a percentage of net sales, gross margin in 2024 was 35.3%, an approximately 280 basis point decrease as compared to 38.1% in 2023.

Net sales in our Other operating segment decreased by 6.2% in 2023 from 2022.

Net sales were unfavorably impacted by foreign currency fluctuations of $0.4 million, or 2.0%, due to the depreciation in value of Chinese renminbi relative to the U.S.

Our Other operating segment gross margin improved in 2023 due to lower freight, duties and tariffs costs, partially offset by lower volume and unfavorable factory utilization.

As a percentage of net sales, gross margin in 2023 was 38.1%, an approximately 50 basis point increase as compared to 37.6% in 2022.

Our Other operating segment gross margin as a percentage of net sales decreased 320 basis points to 32.1% in 2025 compared to 35.3% in 2024.

Gross margin in 2025 declined due to lower volumes and unfavorable mix.

Liquidity, Capital Resources and Financial Position

We believe that our existing sources of liquidity and cash flows that are expected to be generated from our operations, together with our available credit facilities, will be sufficient to fund our operations, currently planned capital expenditures, R&D efforts and our debt service commitments, for at least the next 12 months.

We regularly review and evaluate the adequacy of our cash flows, borrowing facilities and banking relationships, seeking to ensure that we have the appropriate access to cash to fund both our near-term operating needs and our long-term strategic initiatives.

8 unchanged sentences

subsidiaries as of December 31, 2025.

We did not make any changes in 2024 to our position on the permanent reinvestment of our historical earnings from foreign operations.

With the exception of certain of our Chinese subsidiaries, where a substantial portion of our Asia cash and cash equivalents is held, we continue to assert that historical foreign earnings are indefinitely reinvested.

We did not make any changes in 2025 to our position on the permanent reinvestment of our earnings from foreign operations.

With the exception of certain Asian entities, we continue to assert that foreign earnings are indefinitely reinvested.

Net working capital was $373.9 million and $370.4 million as of December 31, 2025 and 2024, respectively.

5 unchanged sentences

Inventories, net 125.0 142.3

Borrowings under revolving credit facility — 30.0

Significant changes in our statement of financial position accounts from December 31, 2024 to December 31, 2025 were as follows:

• Cash and cash equivalents were $197.0 million as compared to $159.8 million as of December 31, 2024, an increase of $37.2 million, or 23.3%.

This increase was primarily due to $127.1 million of net cash flow provided by operations, partially offset by $56.1 million in capital expenditures, $30.0 million in discretionary principal payments on our revolving credit facility, $19.8 million in share repurchases and $1.4 million in tax payments related to net share settlement of equity awards.

This increase was primarily due to our cash flows provided by operations and $14.2 million in proceeds from the sale fixed assets primarily related to the sale of our Price Road facility, partially offset by $52.4 million in share repurchases and $30.1 million in capital expenditures, as well as the effect of net financing and investing activity outflows during the year.

• Accounts receivable, net decreased 3.5% to $130.6 million as of December 31, 2025, from $135.3 million as of December 31, 2024.

The decrease from year-end was primarily due to lower net sales at the end of 2024 compared to at the end of 2023 and lower days sales outstanding, as well as a $4.1 million receipt of previously recognized UTIS fire insurance receivables for our business interruption claims.

• Inventories, net decreased 7.3% to $142.3 million as of December 31, 2024, from $153.5 million as of December 31, 2023, primarily driven by lower raw materials and work-in-process levels, combined with higher inventory reserves provisions, partially offset by higher finished goods levels.

• Borrowings under revolving credit facility were nil as of December 31, 2024, compared to $30.0 million as of December 31, 2023.

The decrease was due to $30.0 million in discretionary principal payments on our revolving credit facility made in early 2024.

For additional information regarding this facility, as well as the Fifth Amended Credit Agreement, refer to “Note 9 – Debt” to “Item 8.

Financial Statements and Supplementary Data.”

The decrease from year-end was primarily due to a decrease in sales across our segments and a $1.0 million decrease in VAT receivable, partially offset by a $0.5 million increase in current taxes receivable.

• Inventories, net decreased 12.2% to $125.0 million as of December 31, 2025, from $142.3 million as of December 31, 2024.

primarily driven by reductions in raw materials and finished goods inventories, partially offset by higher levels of work-in-process inventory.

(Dollars in millions) Year Ended December 31,

4 unchanged sentences

In 2026, we expect capital spending to be in the range of approximately $30.0 million to $40.0 million, of which we are contractually committed to $4.7 million as of December 31, 2025.

We plan to fund our capital spending in 2025 with cash from operations and cash on-hand, as well as our existing revolving credit facility, if necessary.

Excluding $3.0 million of inventory purchase commitments, there are no contractual obligations requiring material cash requirements in 2025 and beyond, excluding those already noted, including those related to our outstanding borrowings under our revolving credit facility, our operating and finance lease obligations and our pension benefit and other postretirement benefit obligations, which are discussed in “Note 9 – Debt,” “Note 6 – Leases” and “Note 8 – Postretirement Benefits,” to “Item 8.

We plan to fund our capital spending in 2026 with cash from operations and cash on-hand.

Excluding $2.9 million of inventory purchase commitments, there are no contractual obligations requiring material cash requirements in 2026 and beyond, excluding those already noted, including those related to our outstanding borrowings under our revolving credit facility, our operating and finance lease obligations and our pension benefit and other postretirement

benefit obligations, which are discussed in “Note 9 – Revolving Credit Facility ,” “Note 6 – Leases” and “Note 8 – Postretirement Benefits,” to “Item 8.

Financial Statements and Supplementary Data,” respectively.

4 unchanged sentences

Our total net leverage ratio did not exceed 2.75 to 1.00 as of December 31, 2025.

For additional information regarding the Fifth Amended Credit Agreement, refer to “Note 9 – Debt” to “Item 8.

For additional information regarding the Fifth Amended Credit Agreement, refer to “Note 9 – Revolving Credit Facility ” to “Item 8.

Financial Statements and Supplementary Data.”

Critical Accounting Estimates

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S.

3 unchanged sentences

Certain accounting policies may require a choice between acceptable accounting methods or may require substantial judgment or estimation in their application.

A summary of our critical accounting estimates is presented below:

A summary of our critical accounting policies and estimates is presented below:

Product Liabilities

14 unchanged sentences

As of December 31, 2025, the estimated liabilities and estimated insurance recoveries for all current and future indemnity and defense costs projected through 2064 were $57.4 million and $52.8 million, respectively.

Goodwill is evaluated for impairment annually, and between annual impairment assessments if events or changes in circumstances indicate the carrying value may be impaired.

We have the option to first perform a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If the qualitative analysis indicates that an impairment is more likely than not for any reporting unit, or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, we perform a quantitative impairment test for that reporting unit.

We also have the option to bypass the qualitative analysis for any reporting unit and proceed directly to performing a quantitative impairment test.

The application of the quantitative assessment requires significant judgment, including the assignment of assets and liabilities to reporting units and determination of the fair value of each reporting unit.

In recent years, management's annual goodwill impairment assessments had been qualitative assessments for all reporting units.

During the second quarter of 2025, changing market competition and supply dynamics impacted our curamik ® reporting unit, which resulted in reduced demand forecasts for short and mid-term net sales and gross margin for the reporting unit, creating a triggering event that required an interim quantitative impairment assessment.

The interim quantitative assessment resulted in the recognition of a non-cash impairment charge to our curamik ® reporting unit’s goodwill of $67.3 million, which represents a full impairment.

In connection with management’s annual assessment in 2025, management elected to bypass a qualitative assessment and perform a quantitative assessment for all reporting units with a remaining goodwill balance.

No additional impairments were recorded as a result of such assessments.

For additional information, refer to “Note 7 – Goodwill and Intangible Assets”.

We estimate the fair value of each of our reporting units using either an income approach based on the present value of future cash flows through a multi-year discounted cash flow analysis or using an estimated weighting between both an income approach and market approach.

Determination of fair value is subjective and requires the use of significant estimates and assumptions, including financial projections for net sales, cost of sales, gross margin and operating margin, discount rates, terminal growth rates, future market conditions, and market multiples, among others.

Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized.

We assessed the assumptions used in the quantitative impairment assessment to be reasonable and consistent with assumptions that would have been used by other market participants.

For additional information, refer to “Note 7 – Goodwill and Intangible Assets” to “ Item 8.

Financial Statements and Supplementary Data.”

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-K

Item 7. Management’s Discussion and Analysis