What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-01 · 110 added, 82 removed, 203 unchanged (49% of the section changed)

45 unchanged sentences

On February 20, 2026, the United States Supreme Court issued a ruling invalidating tariffs previously imposed under IEEPA.

The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and could be subject to further legal, regulatory, and administrative developments.

The ultimate availability, timing, and amount of any potential refunds of such tariffs could be subject to further legal, regulatory, and administrative developments.

Following the Supreme Court’s decision, the U.S.

government announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from many countries, in addition to any existing non-IEEPA tariffs.

government announced its intention to invoke other laws to collect tariffs and announced new tariffs on

imports from many countries, in addition to any existing non-IEEPA tariffs.

There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business.

As of March 28, 2026, we have not recognized an asset related to any potential tariff refund.

The Company will continue to evaluate new information and will recognize a refund when, and if, the amount can be reasonably estimated and the right to receive the amount becomes realized or realizable in accordance with Accounting Standard Codification (“ASC 450”), Contingencies.

As of June 27, 2026, the amount of recognized assets related to tariff refunds was not significant to our condensed consolidated balance sheet.

While the Company continues to review and compile refund requests and may record additional refund amounts in the future, the amount is not anticipated to have a material impact to our financial position and results of operations.

While we are unable to determine the full extent or duration of the tariff impact on our business and broader end-markets at this time, the future impact could be material.

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POTENTIAL IMPACTS OF GEOPOLITICAL CONFLICTS

Ongoing geopolitical conflicts, including the armed conflicts in the Middle East, and governmental actions implemented in response to these conflicts, did not have a significant adverse impact on our operating results during the three months ended March 28, 2026 and March 29, 2025.

We are monitoring the availability of certain raw materials that are (i) supplied by businesses in the countries impacted by these conflicts and (ii) impacted by closures or disturbances to critical shipping routes.

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(“Thermolec”)

▪ Acquired on January 20, 2026 for cash consideration of $140.2, net of cash acquired of $1.3, and was funded through cash on hand.

▪ Acquired on January 20, 2026 for cash consideration of $140.2, net of cash acquired of $1.3, which was funded through cash on hand.

▪ The purchase price is subject to adjustment based upon the final settlement of working capital and cash as of the date of acquisition.

▪ Post-acquisition operating results of Thermolec are included within our HVAC reportable segment.

▪ See Note 3 to our condensed consolidated financial statements for additional details.

◦ Crawford United Corporation (“Crawford United”)

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▪ Post-acquisition operating results of Crawford United's commercial air handling equipment businesses (“Crawford”) are included within our HVAC reportable segment.

▪ Crawford United's industrial and transportation products businesses (“Non-core businesses”), which includes businesses serving aerospace, defense, transportation, and marine markets, are non-core to our long-term strategy.

our long-term strategy.

These Non-core businesses were recorded as assets held for sale upon acquisition, with their results reported as discontinued operations while we identified a suitable buyer and executed our plan to sell these businesses within twelve months.

On March 27, 2026, we completed the sale of the Non-core businesses for an aggregate cash sale price of $60.0.

In connection with the sale, we received net cash of $59.2, net of cash and debt contributed of $1.4 and $2.2, respectively, resulting in a loss of $5.7 recorded to “Loss on disposition of discontinued operation, net of tax” within the condensed consolidated statement of operations for the three months ended March 28, 2026.

The sale price is subject to adjustment based on the final working capital and cash as of the date of sale.

In connection with the sale, we received net cash of $59.2, net of cash and debt contributed of $1.4 and $2.2, respectively, resulting in a loss of $5.7 recorded to “Loss on disposition of discontinued operations, net of tax” within the condensed consolidated statement of operations for the six months ended June 27, 2026.

▪ See Note 3 to our condensed consolidated financial statements for additional details.

• Changes in Estimated Value of an Equity Security - Filtran Group Equity, LLC (“Filtran”)

◦ During the three months ended March 29, 2025 , we recorded a ga in of $4.5 within “Other income (expense), net” related to increases in the estimated value of an equity security in Filtran that we hold, with no change in the estimated value of the equity security recorded during the three months ended March 28, 2026.

◦ During the six months ended June 28, 2025 , we recorded a ga in of $4.5 within “Other income (expense), net” related to increases in the estimated value of an equity security in Filtran that we hold, with no change in the estimated value of the equity security recorded during the three and six months ended June 27, 2026.

◦ See Note 17 to our condensed consolidated financial statements for additional details.

OVERVIEW OF OPERATING RESULTS

Revenues for the three months ended March 28, 2026 totaled $566.8, compared to $482.6 during the respective period in 2025.

The increase in revenues during the three months ended March 28, 2026, compared to the respective prior-year period, was due primarily to (i) inorganic revenue growth resulting from the Sigma & Omega, Thermolec, and Crawford acquisitions within the HVAC reportable segment and the KTS acquisition within the Detection and Measurement reportable segment, and (ii) organic revenue growth within the HVAC and Detection and Measurement reportable segments.

During the three months ended March 28, 2026, we generated operating income of $ 87.7 , compared to $66.6 for the r espective period in 2025.

Revenues for the three months ended June 27, 2026 totaled $679.0, compared to $552.4 during the respective period in 2025.

The increase in revenues, compared to the respective period in 2025, was due primarily to (i) organic revenue growth within the HVAC and Detection and Measurement reportable segments, and (ii) inorganic revenue growth resulting from the Sigma & Omega, Crawford and Thermolec acquisitions within the HVAC reportable segment.

Revenues for the six months ended June 27, 2026 totaled $1,245.8, compared to $1,035.0 during the respective period in 2025.

During the three and six months ended June 27, 2026, we generated operating income of $115.0 and $202.7, respectively, compared to $86.6 and $153.2 for the respective periods in 2025.

RESULTS OF CONTINUING OPERATIONS

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We had one less day in the first quarter of 2026 and will have one more day in the fourth quarter of 2026 than in the respective 2025 periods.

It is not practicable to estimate the impact of the one less day on our consolidated operating results for the three months ended March 28, 2026, when compared to the consolidated operating results for the 2025 respective period.

Cyclicality of End Markets, Seasonality and Competition — The financial results of our businesses closely follow changes in the industries in which they operate and end markets in which they serve.

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We believe we compete effectively on the basis of each of these factors.

The following table provides selected financial information for the three months ended March 28, 2026 and March 29, 2025:

Three months ended

2026 March 29,

The following table provides selected financial information for the three and six months ended June 27, 2026 and June 28, 2025:

Three months ended Six months ended

2026 June 28,

2025 % Change June 27,

2026 June 28,

2025 % Change

6 unchanged sentences

Special charges, net 1.6 — * 1.8 0.1 *

Other operating expense, net — 0.5 * — 0.5 *

Other income (expense), net (5.1) (2.1) * (8.1) 0.6 *

4 unchanged sentences

Components of revenue increase:

Organic 16.9 12.6

Foreign currency 0.2 0.5

3 unchanged sentences

* Not meaningful for comparison purposes.

Revenues — The increase in revenues f or the three months ended March 28, 2026 , compared to the respective period in 2025, was due primarily to (i) inorganic revenue growth resulting from the Sigma & Omega, Thermolec, and Crawford acquisitions within the HVAC reportable segment and the KTS acquisition within the Detection and Measurement reportable segment, and (ii) organic revenue growth within the HVAC and Detection and Measurement reportable segments.

Revenues — The increase in revenues for the three months ended June 27, 2026, compared to the respective period in 2025, was due primarily to (i) organic revenue growth within the HVAC and Detection and Measurement reportable segments, and (ii) inorganic revenue growth resulting from the Sigma & Omega, Crawford and Thermolec acquisitions within the HVAC reportable segment.

The increase in revenues for the six months ended June 27, 2026, compared to the respective period in 2025, was due primarily to (i) organic revenue growth within the HVAC and Detection and Measurement reportable segments, and (ii) inorganic revenue growth resulting from the Sigma & Omega, Crawford and Thermolec acquisitions within the HVAC reportable segment and the KTS acquisition within the Detection and Measurement reportable segment.

See “Results of Reportable Segments” for additional details.

Gross Profit — For the three months ended March 28, 2026, the increase in gross profit and gross profit as a percentage of revenues, compared to the respective period in 2025, was due primarily to (i) favorable product mix within the Detection and Measurement reportable segment, inclusive of higher software-as-a-service revenue within our transportation systems business which has higher than typical margins, and (ii) the impact of the organic and inorganic revenue growth mentioned above, partially offset by lower margins within our HVAC reportable segment driven by start-up costs and related inefficiencies associated with our capacity expansion initiatives.

Selling, General and Administrative (“SG&A”) Expense — For the three mont hs ended March 28, 2026, the increase in SG&A expense, compared to the respective period in 2025, was due primarily to (i) increases in personnel costs due to annual merit increases and growth-related headcount additions, (ii) incremental SG&A resulting from the acquisitions of Sigma & Omega, Thermolec, Crawford and KTS of $1.9, and (iii) higher travel and advertising costs supporting our growth of $1.2, partially offset by lower acquisition and integration-related costs of $1.1.

Selling, General and Administrative — Intangible Amortiz ation — For the three months ended March 28, 2026, the increase in intangible asset amortization expense, compared to the respective period in 2025, was primarily related to incremental amortization associated with (i) customer backlog from the Crawford acquisition and (ii) other intangible assets associated with the acquisitions of Sigma & Omega, Thermolec, Crawford and a full quarter's amortization related to the KTS acquisition.

Special Charges, net — Special charges, net for the three months ended March 28, 2026 and March 29, 2025 related primarily t o severance costs associated with restructuring actions.

Gross Profit — For the three and six months ended June 27, 2026, the increase in gross profit, compared to the respective periods in 2025, was due primarily to the impact of the organic and inorganic revenue growth mentioned above.

The decrease in gross profit as a percentage of revenues was primarily driven by lower margins within our HVAC reportable segment driven by (i) start-up costs and related inefficiencies associated with our capacity expansion initiatives, (ii) net tariff headwinds and inflationary cost increases, and (iii) the respective 2025 periods benefiting from a more accretive mix and favorable project execution, primarily within our cooling equipment business, partially offset by favorable product related mix within our Detection and Measurement reportable segment.

Selling, General and Administrative (“SG&A”) Expense — For the three months ended June 27, 2026, the increase in SG&A expense, compared to the respective period in 2025, was due primarily to (i) incremental SG&A resulting from the acquisitions of Thermolec and Crawford of $6.9, (ii) higher personnel-related costs, including the results of annual merit increases and growth related headcount additions, commissions, and higher short-term incentive compensation of $5.3, and (iii) higher professional fees of $3.6 associated with strategic initiatives , partially offset by lower acquisition and integration-related costs of $ 3.2.

For the six months ended June 27, 2026, the increase in SG&A expense, compared to the respective period in 2025, was due primarily to (i) incremental SG&A resulting from the acquisitions of Sigma & Omega, Thermolec, Crawford, and KTS

of $ 8.8, (ii) higher personnel-related costs, including the results of annual merit increases and growth related headcount additions, commissions, and higher short-term incentive compensation of $8.4, (iii) higher professional fees of $3.3 associated with strategic initiatives, and (iv) higher travel and advertising costs supporting our growth of $2.1, partially offset by lower acquisition and integration-related costs of $ 4.3 .

Selling, General and Administrative — Intangible Amortiz ation — For the three an d six months ended June 27, 2026, the increase in intangible asset amortization, compared to the respective periods in 2025, was p rimarily related to incremental amortization associated with (i) backlog from the Crawford acquisition and (ii) other intangible assets associated with the acquisitions of Thermolec and Crawford.

The increase for the six months ended June 27, 2026 was also impacted by a full six months of amortization related to the KTS acquisition.

Special Charges, net — Special charges, net, for the three and six months ended June 27, 2026 and June 28, 2025 related primarily to recording, and subsequent adjustments of, severance and asset impairment costs associated with restructuring actions at businesses within our HVAC and Detection and Measurement reportable segments.

See Note 7 to our condensed consolidated financial statements for additional details.

Other Income (Expense), net — Other expense, net, for the three months ended March 28, 2026 was composed primarily of pension and postretirement expense of $1.3, environmental remediation charges of $1.2, expense derived from company-owned life insurance (“COLI”) policies of $0.4, and foreign currency transaction losses of $0.1.

Other income, net, for the three months ended March 29, 2025 was composed primarily of a gain of $4.5 related to a change in the net asset value of our equity security in Filtran and $1.7 o f income derived from COLI policies, partially offset by environmental remediation charges of $1.2, pension and postretirement expense of $1.4 (including net settlement and actuarial losses of $0.8), foreign currency transaction losses of $0.5, and losses on disposal of property, plant and equipment of $0.4.

Interest Expense, net — Interest expense, net, includes both interest expense and interest incom e.

T he decrease in interest expense, net, during the three months ended March 28, 2026, compared to the respective period in 2025, was the result of lower average debt balances resulting from the repayment in the third quarter of 2025 of borrowings then-outstanding under our revolving credit facility from a portion of the net proceeds of the underwritten public offering of our common stock completed in that quarter.

This was partially offset by borrowings associated with the Crawford United acquisition.

Other Operating Expense, net — Other operating expense, net for the three and six months ended June 28, 2025, related to a charge of $0.5 regarding the resolution of a dispute.

Other Income (Expense), net — Other expense, net, for the three months ended June 27, 2026 was composed primarily of expense derived from company-owned life insurance (“COLI”) policies of $2.3, environmental remediation charges of $1.8, and pension and postretirement expense of $1.2, partially offset by foreign currency transaction gains of $0.3.

Other expense, net, for the three months ended June 28, 2025 was composed primarily of foreign currency transaction losses of $0.9, pension and postretirement expense of $0.6, and environmental remediation charges of $0.6.

Other expense, net, for the six months ended June 27, 2026 was composed primarily of expense from environmental remediation charges of $3.0, $2.7 of expense derived from COLI policies, and pension and postretirement expense of $2.5, partially offset by foreign currency transaction gains of $0.2.

Other income, net, for the six months ended June 28, 2025 was composed primarily of a gain of $4.5 related to a change in the net asset value of our equity security in Filtran and income of $1.7 derived from COLI policies, partially offset by pension and postretirement expense of $2.0 (including net settlement and actuarial losses of $0.8), environmental remediation charges of $1.8, and foreign currency transaction losses of $1.4.

Interest Expense, net — Interest expense, net, includes both interest e xpense and interest income.

The decrease in interest expense, net, during the three and six months ended June 27, 2026, compared to the respective periods in 2025, was the result of lower average debt balances resulting from the repayment in the third quarter of 2025 of borrowings then-outstanding under our revolving credit facility from a portion of the net proceeds of the underwritten public offering of our common stock completed in that quarter.

This was partially offset by the borrowings associated with the Crawford United acquisition.

Refer to Note 12 to the condensed consolidated financial statements for additional details.

Income Tax Provision — For the three months ended March 28, 2026, we recorded an income tax provision of $13.0 on $77.4 of pre-tax income from continuing operations, resulting in an effective rate of 16.8%.

This compares to an income tax provision for the three months ended March 29, 2025 of $6.2 on $57.9 of pre-tax income from continuing operations, resulting in an effective rate of 10.7%.

The most significant item impacting the income tax provision for the first quarters of 2026 and 2025 was $7.0 and $8.5, respectively, of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the periods.

Income Tax Provision — For the three months ended June 27, 2026, we recorded an income tax provision of $22.9 on $102.2 of pre-tax income from continuing operations, resulting in an effective rate of 22.4%.

This compares to an income tax provision for the three months ended June 28, 2025 of $17.4 on $69.9 of pre-tax income from continuing operations, resulting in an effective rate of 24.9%.

The most significant item impacting the income tax provision for the second quarters of 2026 and 2025 was $2.8 of tax benefit and $0.8 of tax provision, respectively, related to revisions to liabilities for uncertain tax positions.

For the six months ended June 27, 2026, we recorded an income tax provision of $35.9 on $179.6 of pre-tax income from continuing operations, resulting in an effective rate of 20.0%.

This compares to an income tax provision for the six months ended June 28, 2025 of $23.6 on $127.8 of pre-tax income from continuing operations, resulting in an effective rate of 18.5%.

The most significant items impacting the income tax provision during the first half of 2026 and 2025 were (i) $7.2 and $8.8, respectively, of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the periods and (ii) $2.8 of tax benefit and $0.8 of tax provision, respectively, related to revisions to liabilities for uncertain tax positions.

RESULTS OF REPORTABLE SEGMENTS

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HVAC Reportable Segment

Three months ended

March 28, 2026 March 29, 2025 % Change

Three months ended Six months ended

June 27, 2026 June 28, 2025 % Change June 27, 2026 June 28, 2025 % Change

Revenues $ 480.6 $ 376.7 27.6 $ 874.6 $ 699.7 25.0

Income 88.6 73.9 19.9

Segment Income 109.8 95.8 14.6 198.4 169.7 16.9

% of revenues 22.8 % 25.4 % 22.7 % 24.3 %

Components of revenue increase:

Organic 18.9 14.6

Foreign currency 0.2 0.5

1 unchanged sentence

Net revenue increase 27.6 25.0

Revenues — For the three months ended March 28, 2026, the increase in r evenues, compared to the respective period in 2025, was due primarily t o inorganic revenue growth resulting from the Sigma & Omega, Thermolec, and Crawford acquisitions and organic revenue growth.

The organic revenue growth was due primarily to (i) higher volumes of cooling products primarily associated with increased data center demand and higher throughput resulting from increased capacity and (ii) higher volumes of heating products.

Income — For the three months ended March 28, 2026, the increase in income, compared to the respective period in 2025, was primarily attributable to the revenue growth mentioned above.

The decline in margin, compared to the respective period in 2025, was due primarily to incremental start-up costs and related inefficiencies associated with our capacity expansion initiatives, partially offset by leverage on fixed costs, particularly within SG&A expenses, driven by the higher volumes mentioned above.

Backlog — The segment had backlog of $755.3 and $451.3 as of March 28, 2026 and March 29, 2025, respectively.

Backlog associated with the Crawford, Thermolec, and Sigma & Omega acquisitions totaled $73.1, $2.2, and $55.0, respectively, as of March 28, 2026.

Revenues — For the three and six months ended June 27, 2026, the increase in revenues, compared to the respective periods in 2025, was due primarily to organic revenue growth and inorganic revenue growth from the Sigma & Omega, Thermolec and Crawford acquisitions.

The organic revenue growth was due primarily to (i) higher volumes of cooling equipment primarily associated with increased data center demand and higher throughput resulting from increased capacity, and (ii) higher volumes of our heating products.

Income — For the three and six months ended June 27, 2026, the increase in income, compared to the respective periods in 2025, was due primarily to the revenue growth mentioned above.

The decrease in margin for the three and six months ended June 27, 2026, compared to the respective periods in 2025, was primarily due to (i) start-up costs and related inefficiencies associated with our capacity expansion initiatives, (ii) net tariff headwinds and inflationary cost increases, and (iii) the respective 2025 periods benefiting from a more accretive mix and favorable project execution primarily within our cooling equipment business.

Backlog — The segment had backlog of $918.8 and $539.5 as of June 27, 2026 and June 28, 2025, respectively.

Backlog associated with the Crawford and Thermolec acquisitions totaled $61.4 and $0.8, respectively, as of June 27, 2026.

Detection and Measurement Reportable Segment

Three months ended

March 28, 2026 March 29, 2025 % Change

Three months ended Six months ended

June 27, 2026 June 28, 2025 % Change June 27, 2026 June 28, 2025 % Change

Revenues $ 198.4 $ 175.7 12.9 $ 371.2 $ 335.3 10.7

Income 46.7 36.6 27.6

Segment Income 57.3 40.0 43.3 104.0 76.6 35.8

% of revenues 28.9 % 22.8 % 28.0 % 22.8 %

Components of revenue increase:

Organic 12.8 8.4

Foreign currency 0.1 0.5

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Net revenue increase 12.9 10.7

Revenues — For the three months ended March 28, 2026, the in crease in revenues, compared to the respective period in 2025, was due primarily to inorganic revenue growth resulting from the KTS acquisition and organic revenue growth.

The organic revenue growth was due primarily to higher volumes within our transportation systems business.

Revenues — For the three and six months ended June 27, 2026, the increase in revenues, compared to the respective periods in 2025, was due primarily to organic revenue growth.

The organic revenue growth was primarily driven by higher project volumes within our aids to navigation and communication technologies businesses.

Project volumes, primarily within our communication technologies, aids to navigation, and transportation systems businesses, can vary from period to period based on the timing of project execution.

Income — For the three months ended March 28, 2026, the increases in income and margin, compared to the respective period in 2025, were primarily due to the revenue growth mentioned above and a more favorable product mix, inclusive of higher software-as-a-service revenue within our transportation systems business which has higher-than-typical margins.

Backlog — The segment had bac klog of $333.0 and $345.5 as of March 28, 2026 and March 29, 2025, respectively.

In addition, the increase in revenues for the six months ended June 27, 2026, compared to the respective period in 2025, included the inorganic revenue growth resulting from a full year of revenue related to the KTS acquisition and higher volumes within our transportation business.

Income — For the three and six months ended June 27, 2026, the increase in income, compared to the respective periods in 2025, was due primarily to the revenue growth mentioned above.

The increase in margin for the three and six months ended June 27, 2026, compared to the respective periods in 2025, was primarily due to (i) a more favorable product mix within our communication technologies and aids to navigation businesses, (ii) operating leverage, including on SG&A costs, of the higher revenue mentioned above, and (iii) benefits related to our cost optimization initiatives.

In addition, the six month period ended June 27, 2026, included increased high margin software-as-a-service revenue within our transportation systems business.

Backlog — The segment had bac klog of $312.4 and $365.4 as of June 27, 2026 and June 28, 2025, respectively.

CORPORATE AND OTHER EXPENSES

Three months ended

March 28, 2026 March 29, 2025 % Change

Three months ended Six months ended

June 27, 2026 June 28, 2025 % Change June 27, 2026 June 28, 2025 % Change

Total consolidated revenues $ 679.0 $ 552.4 22.9 $ 1,245.8 $ 1,035.0 20.4

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Long-term incentive compensation expense 4.3 3.9 10.3 8.0 7.6 5.3

Corporate Expense — Corporate expense generally relates to the personnel and general operating costs of our corporate headquarters in Charlotte, North Carolina.

The increase in corporate expense during the three months ended March 28, 2026, compared to the respective period in 2025, was primarily due to higher expense related to acquisition and integration-related costs of $0.5, predominantly driven by the Crawford and Thermolec acquisitions.

Corporate Expense — Corporate expense primarily relates to the personnel and general operating costs of our corporate headquarters in Charlotte, North Carolina.

The increase in corporate expense during the three months ended June 27, 2026, compared to the respective period in 2025, was primarily due to (i) higher personnel-related costs, including annual merit increases and higher short-term incentive compensation expense, and (ii) an increase in professional fees associated with strategic initiatives.

The increase in corporate expense during the six months ended June 27, 2026, compared to the respective period in 2025, was due primarily to higher expense related to (i) increased personnel-related costs, including annual merit increases and higher short-term incentive compensation expense, (ii) an increase in professional fees associated with strategic initiatives, and (iii) increased expense related to acquisition and integration-related costs of $0.5, including those related to the Neptronic Inc.

(“Neptronic”), Thermolec and Crawford acquisitions in 2026, partially offset by expense incurred for the KTS and Sigma & Omega acquisitions in 2025.

Long-Term Incentive Compensation Expense — Long-term incentive compensation expense represents our consolidated expense, which we do not allocate for segment reporting purposes.

See Note 14 to our condensed consolidated financial statements for further details on our long-term incentive compensation plans.

Long-term incentive compensation expense in 2026 included awards granted to key employees of recently acquired businesses.

LIQUIDITY AND FINANCIAL CONDITION

Listed below are the cash flows from (used in) operating, investing, and financing activities and discontinued operations, as well as the net change in cash and equivalents for the three months ended March 28, 2026 and March 29, 2025.

Three months ended

March 28, 2026 March 29, 2025

Six months ended

June 27, 2026 June 28, 2025

Continuing operations:

Cash flows from (used in) operating activities $ 29.8 $ (10.4)

Cash flows from operating activities $ 120.2 $ 33.0

Cash flows used in investing activities (475.9) (457.8)

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Net change in cash and equivalents $ (197.8) $ (24.5)

Operating Activities — The increase in cash flows from operating activities during the three months ended March 28, 2026, compared to the respective period in 2025, was due primarily to amounts paid into an escrow account during the first quarter of 2025 in connection with the KTS acquisition related to future service obligations of certain employees of $ 46.5, as well as the increase in income, exclusive of non-cash items, generated from continuing operations during the three months ended March 28, 2026.

This increase was partially offset by growth-related increases to working capital, inclusive of growth in inventory to support our higher backlog.

Investing Activities — Cash flows used in investing activities for the three months ended March 28, 2026 were comprised primarily of net cash utilized in the acquisitions of Thermolec and Crawford of $439.6 and capital expenditures of $18.5 (inclusive of $10.8 related to capacity expansions for our engineered air movement and handling and cooling products businesses within the HVAC reportable segment), partially offset by net proceeds from COLI policies of $3.1.

Cash flows used in investing activities for the three months ended March 29, 2025 were comprised primarily of net cash utilized in acquisitions, including KTS, of $304.1 and capital expenditures of $5.5, partially offset by net proceeds from COLI policies of $3.0.

Financing Activities — Cash flows from financing activities for the three months ended March 28, 2026 were comprised o f net borrowings under our credit facilities and trade receivables financing arrangement of $150.0 and $22.0, respectively, primarily in connection with the Crawford acquisition and net borrowings under our other various debt instruments of $0.2.

Operating Activities — Th e increase in cash flows from operating activities for the six months ended June 27, 2026, compared to the six months ended June 28, 2025, was due primarily to (i) amounts paid into an escrow account during the first quarter of 2025 in connection with the KTS acquisition related to future service obligations of certain employees of $46.5 and (ii) the increase in income, exclusive of the non-cash items, generated from continuing operations during the six months ended June 27, 2026.

Cash outflows in the first six months of 2026 to build inventory levels in support of our growth in revenue and backlog were partially offset by increases in accounts payable based on the timing of vendor invoicing and payments made.

Investing Activities — Cash fl ows used in investing activities of continuing operations for the six months ended June 27, 2026 were comprised primarily of net cash utilized in the Crawford and Thermolec acquisitions of $439.6 and capital expenditures of $39.6 (inclusive of $27.4 related to capacity expansions for our engineered air movement and handling and cooling equipment businesses within the HVAC reportable segment), partially offset by net proceeds from COLI policies of $3.3.

Cash flows used in investing activities of continuing operations for the six months ended June 28, 2025 were comprised primarily of net cash utilized in acquisitions, including KTS and Sigma & Omega, of $447.7 and capital expenditures of $13.2, partially offset by net proceeds from COLI policies of $3.1.

Financing Activities — Cash flows from financing activities of continuing operations for the six months ended June 27, 2026 were comprised primarily of net borrowings under our credit facilities and trade receivables financing arrangemen t of $40.0 and $73.0, respectively, primarily in connection with the Crawford acquisition.

These net borrowings were partially offset by minimum tax withholdings paid on behalf of employees related to long-term incentive awards, net of proceeds from options exercised, of $14.6.

Cash flows from financing activities for the three months ended March 29, 2025 were comprised of net borrowings under our credit facilities and trade receivables financing arrangement of $295.0 and $50.0, respectively, primarily in connection with the KTS acquisition and net borrowings under our other various debt instruments of $0.5.

T hese net borrowings were partially offset by minimum tax withholdings paid on behalf of employees related to long-term incentive awards, net of proceeds from options exercised, of $9.8.

Discontinued Operations — Cash flows from discontinued operations for the three months ended March 28, 2026 relate primarily to proceeds from the sale of the Non-core businesses of $59.2, net of cash and debt contributed of $1.4 and $2.2, respectively, and cash generated from the Non-core businesses during the period of ownership.

Cash flows used in discontinued operations for the three months ended March 29, 2025 related primarily to disbursements for costs incurred to support our wound-down DBT Technologies (PTY) LTD (“DBT”) subsidiary through actions associated with the liquidation of a subcontractor.

Change in Cash and Equivalents due to Changes in Foreign Currency Exchange Rate s — Changes in foreign currency exchange rates did not have a significant impact on our cash and equivalents during the first quarters of 2026 and 2025.

Cash flows from financing activities of continuing operations for the six months ended June 28, 2025 were comprised primarily of net borrowings under our senior credit facilities and trade receivables financing arrangement of $373.2 and $31.0, respectively, primarily in connection with the KTS and Sigma & Omega acquisitions.

These net borrowings were partially offset by minimum tax withholdings paid on behalf of employees related to long-term incentive awards, net of proceeds from options exercised, of $9.1.

Discontinued Operations — Cash flows from discontinued operations for the six months ended June 27, 2026 relate primarily to proceeds from the sale of the Non-core businesses of $59.2 , net of cash and debt contributed of $1.4 and $2.2 , respectively, and cash generated from the Non-core businesses during the period of ownership .

Cash flows used in discontinued operations for the six months ended June 28, 2025 relate primarily to disbursements for costs incurred to support our wound-down DBT Technologies (PTY) LTD (“DBT”) subsidiary through processes associated with the liquidation of a subcontractor.

Borrowings and Availability

Borrowings — The following summarizes our debt activity (both current and non-current) for the three months ended March 28, 2026.

Borrowings — The following summarizes our debt activity (both current and non-current) for the six months ended June 27, 2026:

2025 Borrowings Repayments Other (5)

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(1) The revolving credit facility extends through September 9, 2030 under the terms of the agreement governing our senior credit facilities and is primarily used to provide liquidity for funding acquisitions, including related fees and expenses, and was utilized as a partial funding mechanism for the Crawford acquisition.

(1) The revolving credit facility extends to September 2030 under the terms of the agreement governing our senior credit facilities and is primarily used to provide liquidity for funding acquisitions, including related fees and expenses, and was utilized as a partial funding mechanism for the Crawford acquisition.

(2) The term loan is repayable in quarterly installments equal to 0.625% of the initial term loan balance of $500.0, beginning in December 2026 and in the first three quarters of 2027, and 1.25% during the fourth quarter of 2027, and all quarters of 2028 and 2029, and the first two quarters of 2030.

The remaining balances are payable in full on September 9, 2030.

Balances are net of unamortized debt issuance costs of $0.8 and $0.9 at March 28, 2026 and December 31, 2025, respectively.

The remaining balance is payable in full on September 9, 2030.

The balance is net of unamortized debt issuance costs of $0.8 and $0.9 at June 27, 2026 and December 31, 2025, respectively.

(3) Under this arrangement, we can borrow, on a continuous basis, up to $100.0, as available.

Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses.

At March 28, 2026, we had $72.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $22.0.

(4) Primarily includes balances under a purchase card program of $1.6 and $1.4 and finance lease obligations of $1.2 and $1.1 at March 28, 2026 and December 31, 2025, respectively.

At June 27, 2026, we had $8.0 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $73.0.

(4) Primarily includes balances under a purchase card program of $1.3 and $1.4 and finance lease obligations of $1.2 and $1.1 at June 27, 2026 and December 31, 2025, respectively.

The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program.

As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.

(5) “Other” includes the amortization of debt issuance costs associated with the term loan.

At March 28, 2026, we were in compliance with all covenants of the agreement governing our senior credit facilities.

Availability — At March 28, 2026, we had $1,347.3 of available borrowing capacity under our revolving credit facility, after giving effect to borrowings under the domestic revolving loan facility of $150.0 and $2.7 reserved for outstanding letters of credit.

In addition, at March 28, 2026, we had $17.1 of available issuance capacity under our foreign credit instrument facilities after giving effect to $7.9 reserved for outstanding letters of credit.

(5) “Other” includes the impact of amortization of debt issuance costs associated with the term loan.

At June 27, 2026, we were in compliance with all covenants of the senior credit agreement.

During the second quarter of 2026, we renewed our trade receivables financing agreement for the next 12 months, whereby we can borrow, on a continuous basis, up to $100.0, as available.

Availability — At June 27, 2026, we h ad $1,457.3 of available borrowing capacity under our revolving credit facility, after giving effect to borrowings under the domestic revolving loan facility of $40.0 and $2.7 reserved for outstanding letters of credit.

In addition, at June 27, 2026, we had $17.6 of available issuance capacity under our foreign credit instrument facilities after giving effect to $7.4 reserved for outstanding letters of credit.

On July 22, 2026, we completed the acquisition of Neptronic for net cash consideration of approximately $430.0 .

The acquisition was funded through available borrowings of approximately $340.0 on our revolving credit facility under our senior credit facilities, and cash on hand.

Financing instruments may be used from time to time including, but not limited to, public and private debt and equity offerings, operating leases, finance leases and securitizations.

We expect that we will continue to access these markets as appropriate to maintain liquidity and to provide sources of funds for general corporate purposes, acquisitions or to refinance existing debt.

We have investments in COLI policies, which are recorded at their cash surrender value of $59.9 and $60.3 at March 28, 2026 and December 31, 2025, respectively.

We have investments in COLI policies, which are recorded at their net cash surrender value of $59.4 and $60.3 at June 27, 2026 and December 31, 2025, respectively.

We have the ability to borrow against a portion of our investment in the COLI policies as an additional source of liquidity.

There were no amounts borrowed a t March 29, 2025 and December 31, 2025.

There were no amounts borrowed at June 27, 2026 and December 31, 2025.

Any amounts borrowed would incur interest at a rate of 5.3%.

At March 28, 2026, we had capacity to borrow approximately $34.0 against these policies.

At June 27, 2026, we had capacity to borrow approximately $34.0 against these policies.

See Note 12 to the condensed consolidated financial statements for additional information.

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Other Matters

Contractual Obligations — Other than the borrowings under our revolving loan facility in connection with the Crawford United acquisition discussed above, there have been no material changes in the amounts of our contractual obligations from those disclosed in our 2025 Annual Report on Form 10-K.

Our total net liabilities for unrecognized tax benefits including interest were $6.9 as of March 28, 2026.

Contractual Obligations — Other than the borrowings under our revolving loan facility in connection with the Crawford United acquisition discussed above, as well as subsequent borrowings of $340.0 related to the Neptronic acquisition, there have been no material changes in the amounts of our contractual obligations from those disclosed in our 2025 Annual Report on Form 10-K.

Our total net liabilities for unrecognized tax benefits including interest were $4.1 as of June 27, 2026.

Contingencies and Other Matters — Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”).

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We accrue for these contingencies when we believe a liability is probable and can be reasonably estimated.

As events change and resolutions occur,

these accruals may be adjusted and could differ materially from amounts originally estimated.

As events change and resolutions occur, these accruals may be adjusted and could differ materially from amounts originally estimated.

See Note 15 to the condensed consolidated financial statements for a further discussion of contingencies and other matters.

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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