What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-29 compared with 2025-10-30 · 89 added, 169 removed, 107 unchanged (71% of the section changed)

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Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:

• failure to capitalize on, volatility within, or other adverse changes with respect to our growth drivers, such as delays in adoption or implementation of new technologies;

• failure to successfully execute on our long-term growth strategy;

• failure to capitalize on, volatility within, or other adverse changes with respect to growth opportunities, such as delays in adoption or implementation of new technologies;

• uncertain business, economic and political conditions in the U.S.

and abroad, particularly in China, South Korea, Belgium, Germany, England, and Hungary where we maintain significant manufacturing, sales or administrative operations;

• the trade policy dynamics between the U.S.

and other countries where the Company does business, in particular China, as reflected in tariff impositions and associated countermeasures, as well as the potential for U.S.-China supply chain decoupling;

and abroad, particularly in China, Germany, England, Belgium, South Korea and Hungary where we maintain significant manufacturing, sales or administrative operations;

• the global trade policy dynamics between nations reflected in trade agreement negotiations, the imposition of tariffs and other trade restrictions, as well as the potential for global supply chain decoupling;

• fluctuations in foreign currency exchange rates;

• our ability to develop innovative products and the extent to which they are incorporated into end-user products and systems;

• the extent to which end-user products and systems incorporating our products achieve commercial success;

• our ability to develop innovative products and the extent to which they are incorporated into end-user products and systems that achieve commercial success;

• the ability and willingness of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner;

• business interruptions due to catastrophes or other similar events, such as natural disasters, war, terrorism or public health crises;

• business interruptions due to catastrophes, geopolitical events, or other similar events, such as natural disasters, war, terrorism or public health crises;

• the impact of sanctions, export controls and other foreign asset or investment restriction;

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We design, develop, manufacture and sell high-performance and high-reliability engineered materials and components to meet our customers’ needs.

We operate two strategic operating segments:

We operate two strategic operating and reportable segments:

Our remaining operations, which represent non-core businesses, are reported in our Other operating segment.

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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.

(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 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 needs.

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 future growth.

This growth strategy includes 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 improvements to further enhance our profitability and developing a more agile and customer focused organization.

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

This includes the aerospace and defense industry, with opportunities driven by the advancement of communication systems and expanding global air travel.

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

In the electronics and communications industries there are compelling opportunities resulting from growth in data centers and next-generation smartphones.

Industrial markets provide growth opportunities in certain sub-markets, including renewable energy which continues to expand globally.

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.

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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 increase revenues from current levels and further improve profitability.

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.

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

The markets where we see growth opportunities include EV/HEV, ADAS, aerospace and defense, portable electronics, renewable energy, and industrial.

Executive Summary

The following synopsis and factors should be considered when reviewing our results of operations, financial position and liquidity:

• In the third quarter of 2025 as compared to the third quarter of 2024, our net sales increased approximately 2.7% to $216.0 million, our gross margin decreased approximately 170 basis points to 33.5% from 35.2%, and we had an operating margin of 7.3% compared to an operating margin of 6.9%.

• We recognized restructuring charges of $7.1 million in the third quarter of 2025 due to our wind down of manufacturing operations for our AES operating segment in our Evergem, Belgium facility, our executive leadership transition and the reduction of our global workforce.

• We repurchased 0.1 million shares of our capital stock for $10.0 million in the third quarter of 2025.

• In the first quarter of 2026 as compared to the first quarter of 2025, our net sales increased approximately 5.2% to $200.5 million, our gross margin increased approximately 230 basis points to 32.2% from 29.9%, and we had an operating margin of 5.3% compared to an operating loss of 0.2%.

• We recognized restructuring charges of $5.7 million in the first quarter of 2026 due to our manufacturing footprint consolidation in our Eschenbach, Germany facility, our executive leadership transition and additional reduction in force actions.

Results of Operations

The following table sets forth, for the periods indicated, selected operations data expressed as a percentage of net sales:

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

March 31, 2026 March 31, 2025

Net sales 100.0 % 100.0 %

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Operating income (loss) 5.3 % (0.2) %

Equity income in unconsolidated joint ventures — % 0.2 % — % 0.2 %

Other income (expense), net 0.1 % (0.8) %

Interest income (expense), net 0.1 % — % 0.1 % (0.2) %

Interest income, net 0.2 % 0.2 %

Income (loss) before income taxes 5.6 % (0.8) %

2 unchanged sentences

Net Sales and Gross Margin

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Net sales $ 200.5 $ 190.5

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Percentage of net sales 32.2 % 29.9 %

Net sales increased by 2.7% in the third quarter of 2025 compared to the third quarter of 2024.

Our AES and EMS operating segments had net sales increases of 2.2% and 3.2%, respectively.

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

We experienced lower EV/HEV net sales as customers continued to manage inventory levels and adjusted 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 decreased by 4.5% in the first nine months of 2025 compared to the first nine months of 2024.

Our AES and EMS operating segments had net sales decreases of 6.3% and 2.0%, respectively.

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 adjusted to changing regional demands.

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

Gross margin as a percentage of net sales decreased approximately 170 basis points to 33.5% in the third quarter of 2025 compared to 35.2% in the third quarter of 2024.

Gross margin in the third quarter of 2025 declined due to unfavorable mix, higher freight, duty and tariff costs and unfavorable yield performance, partially offset by higher volumes and commercial actions taken to mitigate tariff costs.

Gross margin as a percentage of net sales decreased approximately 210 basis points to 31.7% in the first nine months of 2025 compared to 33.8% in the first nine months of 2024.

Gross margin in the first nine months of 2025 declined due to lower volumes and related utilization headwinds, unfavorable mix, higher freight, duty and tariff costs and unfavorable yield performance, partially offset by commercial actions taken to mitigate tariff costs.

Net sales increased by 5.2%, or $10.0 million, inclusive of a $7.9 million benefit from the appreciation of the euro and Chinese yuan relative to the U.S.

By end market, sales increased in the industrial and electronics and communications markets, partially offset by lower net sales in the automotive market, in the first quarter of 2026 compared to the first quarter of 2025.

Gross margin as a percentage of net sales increased approximately 230 basis points to 32.2% in the first quarter of 2026 compared to 29.9% in the first quarter of 2025.

Gross margin in the first quarter of 2026 increased due to higher net sales, favorable mix, and cost savings following our manufacturing footprint consolidation in Belgium.

Selling, General and Administrative Expenses

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Selling, general and administrative expenses $ 41.2 $ 44.5

Percentage of net sales 20.6 % 23.4 %

SG&A expenses decreased 7.8% in the third quarter of 2025 from the third quarter of 2024, primarily due to a $1.8 million decrease in compensation and benefits expense and a $1.8 million decrease in professional services expenses, partially offset by a $0.8 million increase in fixed asset depreciation and software cost amortization expense.

SG&A expenses decreased 6.2% in the first nine months of 2025 compared to the first nine months of 2024, primarily due to a $7.9 million decrease in compensation and benefits expense and a $4.7 million decrease in professional services expenses, partially offset by a $3.6 million increase in fixed asset depreciation and software cost amortization expense.

SG&A expenses decreased 7.4% in the first quarter of 2026 from the first quarter of 2025, primarily due to a $2.3 million reduction in professional services costs, and a $0.9 million reduction in software costs.

Research and Development Expenses

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Research and development expenses $ 6.7 $ 7.1

Percentage of net sales 3.4 % 3.7 %

R&D expenses decreased 8.6% in the third quarter of 2025 from the third quarter of 2024, primarily due to a $0.7 million decrease in compensation and benefits expense.

R&D expenses decreased 18.9% in the first nine months of 2025 compared to the first nine months of 2024, primarily due to a $2.5 million decrease in compensation and benefits expense and a $1.5 million decrease in R&D trials.

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

R&D expenses decreased 5.6% in the first quarter of 2026 from the first quarter of 2025, primarily due to a reduction in employee compensation and benefits.

Restructuring and Impairment Charges

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Restructuring and impairment charges $ 5.9 $ 5.9

Other operating (income) expense, net $ 0.5 $ — $ 0.2 $ —

We incurred impairment charges of $71.8 million in the nine months ended September 30, 2025 related to our curamik ® reporting unit within our AES operating segment.

For additional information, refer to “Note 6 – Goodwill and Other Intangible Assets” to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

We incurred restructuring charges of $7.1 million and $17.3 million in the three and nine months ended September 30, 2025, respectively, due to our wind down of manufacturing operations for our AES operating segment in our Evergem, Belgium facility, the executive leadership transition and our global reduction in workforce.

We incurred restructuring charges of $6.3 million and $7.6 million in the three and nine months ended September 30, 2024, respectively, primarily related to our wind down of manufacturing operations for our AES operating segment in our Evergem, Belgium facility and our exit from our Burlington, Massachusetts Innovation Center facility.

We incurred restructuring and impairment charges of $5.9 million in the three months ended March 31, 2026, due to our footprint consolidation actions in our Eschenbach, Germany facility, the executive leadership transition an additional reduction in force, and the impairment of our Mexico facility lease.

For additional information, refer to “Note 13 – Supplemental Financial Information” to the condensed consolidated financial statements in Part I, Item 1, of this Form 10-Q.

Equity Income in Unconsolidated Joint Ventures

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Equity income in unconsolidated joint ventures $ — $ 0.4 $ — $ 1.2

Prior to November 5, 2024, we had two unconsolidated JVs, each 50% owned:

RIC and RIS, at which point, 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 15 - Mergers and Acquisitions” to the condensed consolidated financial statements in Part I, Item I of this Form 10-Q.

Other Income (Expense), Net

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Other income (expense), net $ 0.3 $ (1.6)

Other income (expense), net was income of $0.4 million in the third quarter of 2025 compared to expense of $1.5 million in the third quarter of 2024.

The increase was due to $0.9 million of favorable year-over-year changes in impacts from our foreign currency transactions.

Other income (expense), net was to expense of $3.4 million in the first nine months of 2025 compared to expense of $0.8 million in the first nine months of 2024.

The decrease was due to $3.1 million of unfavorable year-over-year changes in impacts from our foreign currency transactions.

Interest Income (Expense), Net

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Interest income (expense), net $ 0.2 $ — $ 0.9 $ (1.0)

Interest income (expense), net, was $0.2 million of income in the third quarter of 2025.

The year-over-year change was due to higher income on interest-bearing cash accounts.

Interest income (expense), net, was $0.9 million of income in the first nine months of 2025 compared to $1.0 million of expense in the first nine months of 2024.

The year-over-year change was due to higher income on interest-bearing cash accounts and a lower weighted-average outstanding balance for our borrowings under our revolving credit facility.

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Other income (expense), net was income of $0.3 million in the first quarter of 2026 compared to expense of $1.6 million in the first quarter of 2025.

The increase was primarily due to $2.6 million of favorable year-over-year changes in impacts from foreign currency transactions, partially offset by $1.0 million in unfavorable performance on foreign exchange and copper derivative contracts.

Interest Income, Net

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Interest income, net $ 0.3 $ 0.3

Interest income, net, was flat year-over-year.

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Income tax (benefit) expense $ 6.8 $ (0.2)

Effective tax rate 60.2 % 12.5 %

The below discussion of the effective tax rate for the periods presented in the condensed consolidated statements of operations is in comparison to the 21% U.S.

statutory federal income tax rate.

We had a tax rate of 47.2% in the third quarter of 2025.

During the quarter, our effective tax rate was unfavorably impacted by (i) an increase in the valuation allowance attributable to loss jurisdictions in which no tax benefit is anticipated to be realized and (ii) an increase in reserves for uncertain tax positions.

During the third quarter of 2024, our effective tax rate was 20.7%.

During the third quarter of 2024, our effective tax rate was favorably impacted by a decrease of reserves for uncertain tax positions, partially offset by the mix of income in higher tax rate jurisdictions.

We had a negative tax rate of 21.6% for the nine months ended September 30, 2025 due to tax expense on a pre-tax book loss.

Our income tax expense for the nine months ended September 30, 2025 was unfavorably impacted by the $67.3 million goodwill impairment in curamik ® for which no tax benefit is available, an increase in the valuation allowance attributable to loss jurisdictions in which no tax benefit is anticipated to be realized, and an increase in reserves for uncertain tax positions.

For the first nine months of 2024, the Company’s effective tax rate on its income before income taxes was 28.1%.

The effective rate for the first nine months of 2024 was unfavorably impacted primarily by the write-off of deferred tax assets related to stock compensation and the mix of income in higher tax rate jurisdictions, partially offset by a decrease of reserves for uncertain tax positions.

Compared to the 21% U.S.

statutory federal income tax rate, we had a tax rate of 60.2% in the first quarter of 2026.

During the quarter, our effective tax rate was unfavorably impacted by an increase in the valuation allowance attributable to loss jurisdictions in which no tax benefit is anticipated to be realized.

We had a tax rate of 12.5% in the first quarter of 2025 when we incurred a loss before income taxes of $1.6 million, which, when taxed at the 21% U.S.

statutory federal income tax rate, resulted in an immaterial income tax benefit, partially offset by insignificant tax adjustments that caused the effective tax rate to differ from the statutory rate.

Operating Segment Net Sales and Gross Margin

Advanced Electronics Solutions

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Net sales $ 107.7 $ 104.2

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Percentage of net sales 29.2 % 27.9 %

AES net sales increased by 2.2% in the third quarter of 2025 compared to the third quarter of 2024.

The increase in net sales over the third quarter of 2024 was primarily driven by higher net sales in the ADAS and EV/HEV markets, partially offset by lower net sales in the wireless infrastructure market.

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

AES net sales decreased by 6.3% in the first nine months of 2025 compared to the first nine months of 2024.

The decrease in net sales over the first nine months of 2024 was primarily driven by 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 adjusted to changing regional demands.

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

Our AES operating segment gross margin in the third quarter of 2025 improved primarily due to higher volumes, favorable utilization and favorable yield performance, partially offset by unfavorable mix and higher freight, duty and tariff costs net of commercial mitigation actions.

As a percentage of net sales, gross margin in the third quarter of 2025 was 31.5% as compared to 30.4% in the third quarter of 2024.

Our AES operating segment gross margin in the first nine months of 2025 declined primarily due to lower volumes and unfavorable mix, higher freight, duty and tariff costs and higher scrap costs, partially offset by commercial actions taken to mitigate tariff costs.

As a percentage of net sales, gross margin in the first nine months of 2025 was 29.3% as compared to 30.0% in the first nine months of 2024.

AES net sales increased by 3.4%, or $3.5 million, inclusive of a $5.3 million benefit from the appreciation of the euro and Chinese yuan relative to the U.S.

Inclusive of the foreign currency benefits, net sales by end market increased for electronics and communications, and industrial, while net sales in the aerospace and defense market were lower, in the first quarter of 2026 compared to the first quarter of 2025.

Our AES operating and reportable segment gross margin as a percentage of net sales in the first quarter of 2026 was 29.2% as compared to 27.9% in the first quarter of 2025.

Gross margin improved primarily due to cost savings following our manufacturing footprint consolidation in Belgium, partially offset by lower utilization from a new production line.

Elastomeric Material Solutions

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Net sales $ 88.4 $ 82.6

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Percentage of net sales 35.4 % 32.3 %

EMS net sales increased by 3.2% in the third quarter of 2025 compared to the third quarter of 2024.

The increase in net sales over the third quarter of 2024 was primarily driven by higher net sales in the aerospace and defense and industrial markets, partially offset by lower net sales in the EV/HEV market.

EMS net sales decreased by 2.0% in the first nine months of 2025 compared to the first nine months of 2024.

The decrease in net sales over the first nine months of 2024 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.

Our EMS operating segment gross margin in the third quarter of 2025 declined due to utilization headwinds from the startup of new production lines, unfavorable mix and higher freight, duty and tariff costs, partially offset by higher volumes, favorable mix and commercial actions taken to mitigate tariff costs.

As a percentage of net sales, gross margin in the third quarter of 2025 was 35.7% as compared to 41.2% in the third quarter of 2024.

Our EMS operating segment gross margin in the first nine months of 2025 declined due to lower volumes and related utilization headwinds, unfavorable mix, unfavorable yield performance and tariff costs, partially offset by commercial actions taken to mitigate tariff costs.

As a percentage of net sales, gross margin in the first nine months of 2025 was 34.5% as compared to 38.5% in the first nine months of 2024.

Three Months Ended Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

EMS net sales increased by 7.0%, or $5.8 million, including $2.5 million of favorable impact from the appreciation of the euro and Chinese yuan relative to the U.S.

By end market, sales increased in the industrial, electronics and communications, and aerospace and defense markets, partially offset by lower sales in the automotive market, in the first quarter of 2026 compared to the first quarter of 2025.

Our EMS operating and reportable segment gross margin as a percentage of net sales in the first quarter of 2026 was 35.4% as compared to 32.3% in the first quarter of 2025.

Gross margin improved primarily due to increased sales volume and related utilization benefits and favorable mix.

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Net sales $ 4.4 $ 3.7

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Percentage of net sales 43.2 % 32.4 %

Net sales in this segment increased by 5.1% in the third quarter of 2025 from the third quarter of 2024.

Our Other operating segment gross margin in the third quarter of 2025 increased due to higher volumes and favorable mix.

As a percentage of net sales, gross margin in the third quarter of 2025 was 36.6%, an approximately 580 basis point increase as compared to 30.8% in the third quarter of 2024.

Net sales in this segment decreased by 9.6% in the first nine months of 2025 from the first nine months of 2024.

Our Other operating segment gross margin in the nine months of 2025 declined due to lower volumes and unfavorable mix.

As a percentage of net sales, gross margin in the first nine months of 2025 was 35.2%, an approximately 40 basis point decrease as compared to 35.6% in the third quarter of 2024.

Liquidity, Capital Resources and Financial Position

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The following table illustrates the location of our cash and cash equivalents by our three major geographic areas:

(Dollars in millions) September 30, 2025 December 31, 2024

(Dollars in millions) March 31, 2026 December 31, 2025

$ 109.3 $ 100.1

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Approximately $86.5 million of our cash and cash equivalents were held by non-U.S.

subsidiaries as of September 30, 2025.

We did not make any changes in the nine months ended September 30, 2025 to our position on the permanent reinvestment of our earnings from foreign operations.

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

(Dollars in millions) September 30, 2025 December 31, 2024

subsidiaries as of March 31, 2026.

We did not make any changes in the three months ended March 31, 2026 to our position on the permanent reinvestment of our earnings from foreign operations.

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

(Dollars in millions) March 31, 2026 December 31, 2025

Key Financial Position Accounts:

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Inventories, net $ 127.5 $ 125.0

Changes in key financial position accounts and other significant changes in our statements of financial position from December 31, 2024 to September 30, 2025 were as follows:

• Cash and cash equivalents were $167.8 million as compared to $159.8 million as of December 31, 2024, an increase of $8.0 million, or 5.0%.

This increase was primarily due to our cash flows provided by operations and $13.4 million of proceeds from the sale of our Price Road facility, partially offset by $38.1 million of share repurchases, $25.4 million in capital expenditures, and $1.4 million in tax payments related to net share settlement of equity awards.

• Accounts receivable, net increased 7.5% to $145.5 million as of September 30, 2025 from $135.3 million as of December 31, 2024.

The increase from year-end was primarily due to higher net sales at the end of the third quarter of 2025 compared to at the end of 2024, partially offset by a lower days sales outstanding at the end of September 30, 2025 compared to December 31, 2024.

• Inventories, net were largely flat at $142.9 million as of September 30, 2025, from $142.3 million as of December 31, 2024.

Although inventory was flat, our finished goods inventory decreased which was offset by increases in both raw materials and work in progress inventory.

Nine Months Ended

(Dollars in millions) September 30, 2025 September 30, 2024

Changes in key financial position accounts and other significant changes in our statements of financial position from December 31, 2025 to March 31, 2026 were as follows:

• Cash and cash equivalents were $195.8 million as compared to $197.0 million as of December 31, 2025, a decrease of $1.2 million, or 0.6%.

This decrease was primarily due to cash used in investing and financing activities, partially offset by cash provided by operations and favorable impacts of exchange rates on cash.

• Accounts receivable, net increased 8.8% to $142.1 million as of March 31, 2026 from $130.6 million as of December 31, 2025.

The increase was primarily due to higher net sales in the last month of the first quarter of 2026 compared to the last month of the fourth quarter of 2025.

• Inventories were $127.5 million as of March 31, 2026, compared to $125.0 million as of December 31, 2025.

The change was due to higher levels of raw materials and work-in-process inventory, offset by lower levels of finished goods.

Three Months Ended

(Dollars in millions) March 31, 2026 March 31, 2025

Key Cash Flow Measures:

Net cash provided by operating activities $ 5.8 $ 11.7

Net cash used in investing activities $ (11.2) $ (40.7)

Net cash provided by (used in) investing activities $ (4.5) $ 3.9

Net cash used in financing activities $ (1.6) $ (1.6)

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If our total net leverage ratio exceeds 2.75 to 1.00, we may nonetheless make up to $20.0 million in restricted payments, including cash dividends, during the fiscal year, provided that no default or event of default has occurred and is continuing or would result from the payments.

Our total net leverage ratio did not exceed 2.75 to 1.00 as of September 30, 2025.

Our total net leverage ratio did not exceed 2.75 to 1.00 as of March 31, 2026.

Contingencies

During the third quarter of 2025, we did not become aware of any material developments related to environmental matters disclosed in our Annual Report, our asbestos litigation or other material contingencies previously disclosed or incur any material costs or capital expenditures related to such matters.

During the first quarter of 2026, we did not become aware of any material developments related to environmental matters disclosed in our Annual Report, our asbestos litigation or other material contingencies previously disclosed or incur any material costs or capital expenditures related to such matters.

Refer to “Note 9 – Commitments and Contingencies” to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further discussion of these contingencies.

Critical Accounting Policies

Goodwill and Indefinite-Lived Other Intangible Assets

Goodwill and indefinite-lived other intangible assets are evaluated for impairment annually, and between annual impairment assessments if events or changes in circumstances indicate the carrying value may be impaired, by first performing a qualitative assessment to determine whether a quantitative goodwill impairment assessment is necessary.

If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not less than its carrying value or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment assessment would be required.

We can elect to forgo the qualitative assessment and perform a quantitative assessment.

The quantitative assessment compares the fair value of a reporting unit with its carrying value.

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 have 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 non-cash impairment charges to our curamik ® reporting unit’s goodwill and indefinite-lived other intangible asset of $67.3 million and $4.5 million, respectively, which represent full impairments of each.

The quantitative goodwill and indefinite-lived other intangible asset impairment assessment performed over the curamik ® reporting unit consisted of a fair value calculation which combined an income approach and a market approach, weighted at 50% each, which was then compared with the reporting unit’s carrying value.

The income approach uses the discounted cash flow method, which is based on the present value of future cash flows through a multi-year discounted cash flow analysis.

The market approach uses the guideline public company method, which is based on market data using comparable publicly traded company multiples of EBITDA for a group of benchmark companies.

From a market participant perspective, considerable weight would be placed on the income approach value because it relies directly on our reporting unit’s forecasted operating results and market-derived rates of return.

Similarly, considerable weight would be placed on the market approach because it reflects current market pricing and earnings.

Therefore, equal weight was given to the income approach and market approach, since both methods are reasonable methods to use for valuing our reporting units and neither method is more reliable than the other for these circumstances.

Determination of fair value is subjective and requires the use of significant estimates and assumptions, including financial projections for net 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 6 – Goodwill and Other Intangible Assets.”

Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and estimates from those disclosed in our Annual Report.

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our exposure to market risk during the third quarter of 2025.

There have been no material changes in our exposure to market risk during the first quarter of 2026.

For discussion of our exposure to market risk, refer to “Item 7A.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis