What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-07 · 130 added, 213 removed, 160 unchanged (68% of the section changed)

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“Strong-Tie” and our other trademarks appearing in this report are our property.

This report contains additional trade names and trademarks of other companies.

We do not intend our use or display of other companies' trade names or trademarks to imply endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements concerning our expectations, beliefs, plans, objectives, goals, strategies, and future events or performance.

Such statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Such statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements generally can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “target,” “continue,” “predict,” “project,” “change,” “result,” “future,” “will,” “could,” “can,” “may,” “likely,” “potentially,” or similar expressions.

Forward-looking statements are all statements other than those of historical fact and include, but are not limited to, statements about future financial and operating results, our plans, objectives, business outlook, priorities, expectations and intentions, expectations for sales and market growth, comparable sales, earnings and performance, stockholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, our strategic initiatives, including the impact of these initiatives on our strategic and operational plans and financial results, and any statement of an assumption underlying any of the foregoing.

Forward-looking statements are all statements other than those of historical fact and include, but are not limited to, statements about future financial and operating results, our plans, objectives, business outlook, priorities, expectations and intentions, expectations for sales and market growth, comparable sales, earnings and performance, stockholder value, effective tax rates, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, our strategic initiatives, including the impact of these initiatives on our strategic and operational plans and financial results, and any statement of an assumption underlying any of the foregoing.

Forward-looking statements are subject to inherent uncertainties, risks and other factors that are difficult to predict and could cause our actual results to vary in material respects from what we have expressed or implied by these forward-looking statements.

Important factors that could cause our actual results and financial condition to differ materially from those expressed in or implied by our forward-looking statements include, the effect of tariffs and international trade policies on our business operations, the effects of inflation and labor and supply shortages on our operations, and the operations of our customers, suppliers and business partners, and those factors discussed under Item 1A.

Important factors that could cause our actual results and financial condition to differ materially from those expressed in or implied by our forward-looking statements include, the effect of military conflicts, tariffs and international trade policies on our business operations, the effects of inflation and labor and supply shortages on our operations, and the operations of our customers, suppliers and business partners, volatile supply and demand conditions affecting prices and volumes in the markets for both our products and raw materials we purchase;

and those factors discussed under Item 1A.

Risk Factors and Item 7.

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Additional risks include:

the cyclicality and impact of general economic conditions; changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions;

the impact of sales price increases of our products, the impact of pandemics, epidemics or other public health emergencies; volatile supply and demand conditions affecting prices and volumes in the markets for both our products and raw materials we purchase; the impact of foreign currency fluctuations; potential limitations on our ability to access capital resources and borrowings under our existing credit agreement;

restrictions on our business and financial covenants under our credit agreement; reliance on employees subject to collective bargaining agreements;

the cyclicality and impact of general economic conditions; changing conditions in global markets including the impact of military conflicts, sanctions and tariffs, quotas and other trade actions and import restrictions;

the impact of pandemics, epidemics or other public health emergencies; the impact of foreign currency fluctuations;

potential limitations on our ability to access capital resources and borrowings under our existing credit agreement;

restrictions on our business and financial covenants under our credit agreement;

reliance on employees subject to collective bargaining agreements;

and our ability to repurchase shares of our common stock and the amounts and timing of repurchases, if any.

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We operate in three business segments determined by geographic region:

North America, Europe, and Asia/Pacific.

Within the North America segment, our sales efforts are aligned to customer market teams dedicated to serving the following markets:

North America, Europe, and

Asia/Pacific.

Within the North America segment, our sales efforts are dedicated to serving customers across the following end-use markets:

• Residential;

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• Component Manufacturers

Our organic growth opportunities are focused on expanding our product lines with our current customers while also identifying new market share gain opportunities within our core product and market competencies.

Our organic growth opportunities are focused on expanding product lines with our current customers while also identifying new market share gain opportunities within our core product and market competencies.

To grow in these markets, we aspire to be among the leaders in engineered load-rated construction building products and systems as well as digital product offerings.

We also aspire to leverage our engineering expertise, deep-rooted relationships with top builders, engineers, contractors, code officials and distributors, along with our ongoing commitment to testing, research and innovation.

Importantly, we currently have existing products, testing results, distribution and manufacturing capabilities to support our ambitions.

This will ultimately be a function of expanding our sales and/or marketing functions to promote our products to different end users and distribution channels, expanding our customer base, and introducing new products in the future.

We intend to leverage our engineering expertise, deep-rooted relationships with top builders, engineers, contractors, code officials and distributors, along with our ongoing commitment to testing, research and innovation.

Importantly, we have existing products, testing results, distribution and manufacturing capabilities to support our ambitions.

Achieving this growth will depend on expanding our sales and marketing efforts to promote our products across end users and distribution channels, broadening our customer base, and introducing new products over time.

Our commitment to continuous improvement has fostered our core Company ambitions, which we will pursue including:

• Strengthen our values-based culture;

• Be the partner of choice;

• Be an innovative leader in the markets we operate;

• Above market growth relative to the U.S.

housing starts (exceeding our historical average volume performance in North America);

• An operating income margin at or above 20%;

• Earnings per share growth exceeding net revenue growth.

Since announced in 2021, we continue to make progress on our key growth initiatives.

• Be the business partner of choice;

• Strive to be an innovative leader in the markets we operate;

• Drive above market volume growth relative to U.S.

housing starts;

• Maintain an operating income margin at or above 20%;

• Deliver earnings per share growth ahead of net revenue growth.

Since announced in 2021, we have made great progress on our key growth initiatives.

Examples include:

• Added approximately $1.0 billion in revenue and $200.0 million in operating profit.

• Realigned our sales team by end market, making our distribution process more efficient, and made significant investments in our field sales and engineering teams.

• Added approximately $1.0 billion in revenue, with sales growing $100.7 million or 4.5% from fiscal year 2024 compared to fiscal year 2025, and $200.0 million in operating profit.

• Earnings per share grew $0.64 per share to $8.24 per share of 8.4% from fiscal 2024 compared to fiscal year 2025 exceeding sales growth over the sale fiscal periods.

• Realigned our sales team by end market, significantly reduced two-step distribution, and made significant investments in our field sales and engineering teams.

• Made significant footprint investments in both production and warehouses.

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• Invested significantly in digital solutions, combined with the other initiatives strengthened our business model, which drove hardware sales, created value for our customers and made us a partner of choice.

• Strengthened our senior leadership team through a combination of internal development and external experts.

As a result, we believe we are now in an even stronger market position in connectors with significant gains in both fasteners and anchors.

In addition, due to our high service levels, increasingly diverse portfolio of products and software as well as our commitment to innovation and developing complete solutions for the markets we serve, we believe we can continue to achieve above market growth in the North America relative to U.S.

housing starts for fiscal 2025 and beyond.

These examples further emulate our Founder, Barclay Simpson’s, nine principles of doing business, and more specifically the focus and obsession on customers and users.

During the nine months ended September 30, 2025 , the recent tariff and trade policy actions have had some impact and will continue to impact our results of operations.

• Expanded our equipment product line which helped drive increase sales in the component manufacturing market space.

• Streamlined internal processes and focused development efforts on high-impact new products.

• Promoted high-potential talent and external experts to senior leadership.

As a result, we have further strengthened our market position in connectors with significant gains in both fasteners and anchors.

In addition, driven by our high service levels, increasingly diverse portfolio of products and software and commitment to innovation and delivering complete solutions to the markets we serve, we believe we can continue to achieve above market growth in the North America relative to U.S.

housing starts in fiscal 2026 and beyond.

These actions reflect our Founder, Barclay Simpson’s, nine principles of doing business, particularly our relentless focus and commitment to customers and users.

Tariff and trade policy actions have impacted our results of operations and are expected to continue to do so.

We also experienced increased foreign currency exchange rate volatility, which we attribute, in part, to the rapidly changing global trade environment.

As previously announced, we increased prices as of June 2, 2025 on certain wood connectors, fasteners and mechanical anchors in the U.S., and increased prices as of October 15, 2025 on certain fasteners and mechanical anchors in the U.S.

North America net sales could increase in future periods even if demand does not increase.

However, increased selling prices are expected to be offset by increased non-material costs including labor, energy, transportation, and equipment incurred over the prior three years.

In addition, the announced price increases will partly offset the increased costs related to the tariffs that effected a portion of our fastener and anchors sales, while it does not offset tariffs announced after October 15, 2025.

Due to a declining housing starts market, we are undertaking proactive strategic cost savings initiatives to align our operations with evolving market demand to position the Company for long-term success.

These actions include workforce reduction and portfolio management.

As a result, we incurred approximately $3.0 million, net, in one-time charges during the third quarter of 2025, and estimate total one-time charges of approximately $9.0 million to $12.0 million, net, in fiscal year 2025.

We expect these initiatives will generate at least $30.0 million in annualized cost savings .

We increased prices in the U.S.

effective June 2, 2025 on certain wood connectors, fasteners and mechanical anchors, and again effective October 15, 2025 on certain fasteners and mechanical anchors, in response to tariffs.

We believe North America net sales could increase in future periods even if demand does not increase.

However, increased selling prices are expected to be offset by higher non-material costs including labor, energy, transportation, and building and equipment depreciation (from recent footprint investments, as noted above) incurred over the three years and potentially by future costs increases.

In addition, the price increases are expected to partially offset increased costs related to the tariffs affecting a portion of our fastener and anchors sales, but do not offset tariffs announced after December 31, 2025.

Due to a declining housing starts market, we undertook proactive strategic cost savings initiatives during fiscal year 2025 to align our operations with evolving market demand to position the Company for long-term success.

These actions included workforce reduction and portfolio management.

As a result, we expect these initiatives will generate at least $30.0 million in annualized cost savings with approximately $20.0 million in reduced operating expense.

Non-GAAP Financial Measures

In addition to financial information prepared in accordance with GAAP, we use adjusted EBITDA as a non-GAAP financial measure in evaluating the ongoing operating performance of our business.

We define adjusted EBITDA as net income (loss) before income taxes, adjusted to exclude depreciation and amortization, integration, acquisition and restructuring costs, non-qualified deferred compensation adjustments, goodwill impairment, gain on bargain purchase, net loss or gain on disposal of assets, interest income or expense, and foreign exchange and other expense (income).

In addition to financial information prepared in accordance with GAAP, we use Adjusted EBITDA, a non-GAAP financial measure in evaluating our ongoing operating performance.

We define Adjusted EBITDA as net income (loss) before income taxes, adjusted to exclude depreciation and amortization, integration, acquisition and restructuring costs, non-qualified deferred compensation adjustments, goodwill impairment, gain on bargain purchase, lease termination costs, severance costs related to cost saving initiatives, net loss or gain on disposal of assets, interest income or expense, and foreign exchange and other expense (income).

This provides additional insight into the Company’s operating performance in light of the significant levels of growth investment we have made in our operations, the effect depreciation and acquisition as well as integration costs will have on our operating results.

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We are closely monitoring the recent tariff and trade policy actions taken by the U.S.

and foreign governments.

As the situation continues to remain fluid due to the rapidly changing global trade environment, we are still evaluating the potential implications of these actions on our business.

While we are largely domestically sourced, we continue to monitor macroeconomic trends such as the impact of inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs in markets where we and our supplier operate.

As a result of the tariff’s announced by the U.S.

presidential administration on April 2, 2025 and June 15, 2025, and potential tariff modifications or the imposition of tariffs or export controls by other countries there is significant economic uncertainty.

and foreign governments as well as the recent Middle East conflict.

As the situation continues to remain fluid due to the rapidly changing global trade environment, we are still evaluating the potential implications of these events on our business.

While we are largely domestically sourced, we continue to monitor macroeconomic trends from these events such as the impact of interest rates, disruptions to trade or transportation routes, cyberattack, changing foreign exchange rates, inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs in markets where we and our supplier operate.

Additionally, economic pressures on our customers, including the potential of higher inflation, fluctuations in foreign currencies and consumer confidence, driven by economic concerns or price increases as a result of these events, such as those we previously announced, could reduce demand for our products and services negatively affecting our net sales and profitability in the future.

As a result of the tariffs announced by the U.S.

presidential administration during 2025 and potential tariff modifications or the imposition of tariffs or export controls by other countries there is significant economic uncertainty.

The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors beyond our control.

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imports, that may adversely affect the global economy.

We are currently uncertain as to the ultimate impact these measure may have given the rapidly changing environment surrounding tariffs and other related political topics;

We are currently uncertain as to the ultimate impact these measures may have given the rapidly changing environment surrounding tariffs and other related political topics;

however, if enacted as currently proposed, we expect that the proposed tariffs would primarily impact our North America segment as we procure fasteners and a small number of other products from countries that will be subjected to the these tariffs.

Additionally, economic pressures on our customers, including the potential of higher inflation, fluctuations in consumer confidence, driven by economic concerns or price increases, such as those we recently announced, could reduce demand for our products and services negatively affecting our net sales and profitability in the future.

In prior years, our sales were heavily seasonal with operating results varying from quarter to quarter depending on weather conditions that could delay construction starts.

Our sales and income have historically been lower in the first and fourth quarters than in the second and third quarters of a fiscal year.

Increased tariffs (as noted above), political uncertainty, mortgage interest rates, and rising costs can also have an effect on our gross and operating profits as well.

Increased tariffs (as noted above), Middle East conflicts, political uncertainty, fluctuating foreign currency rates, mortgage interest rates, and rising costs can also have an effect on our gross and operating profits as well.

Due to efforts in diversifying our geographic footprint, product offerings, and changing our path to market in the U.S., sales from our product lines, customer base, and customer purchases are becoming less seasonal.

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Changes in labor, freight and warehousing costs, could also negatively impact gross profit depending on timing and amount of sales price can be increased to offset the higher costs.

Our operations also expose us to risks associated with pandemics, epidemics or other public health crises.

Business Segment Information

Historically, our North America segment has generated more revenues from wood construction products compared to concrete construction products.

North America net sales increased for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to price increase that took effect in June 2025 and incremental sales from the Company's 2024 acquisitions.

The increases were partly offset by decreased sales volumes of 1.3% and the negative effect of approximately $2.2 million in foreign currency translation.

Our wood construction product net sales increased 4.6% for the nine months ended September 30, 2025 compared to September 30, 2024.

North America net sales increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to price increases that took effect in June 2025 and October 2025, a slight increase in sales volumes and the positive effect of approximately $1.2 million in foreign currency translation.

Our wood construction product net sales increased 8.6% for the three months ended March 31, 2026 compared to March 31, 2025.

Our concrete construction product net sales increased 18.6% over the same periods.

For 2025, U.S.

housing starts could decline in the mid-single digit range from 2024 levels.

We believe we will be able to continue to grow volumes above the U.S.

housing starts market, one of our ambitions.

Operating income increased 12.8% to $118.3 million.

The increase was primarily due to higher net sales, partially offset by higher operating expenses.

The operating expense increases were driven primarily by higher personnel costs, variable compensation, subscription licensing costs, partially offset by decreases in professional fees, travel related costs, and advertising and tradeshow costs .

The increase was primarily due to higher net sales and lower operating expenses, partially offset by increased cost of goods sold reflecting primarily the impact from tariffs and higher material costs, labor and factory and overhead costs, as a percentage of nets sales.

The operating expenses decrease was primarily driven by lower personnel costs, professional fees and variable incentive compensation .

Additional incremental investments in the business will be limited until the U.S.

housing market shows long-term improvement.

We completed construction of our Columbus, Ohio facility in the second quarter and the construction of our new Gallatin, Tennessee facility was mostly completed in the third quarter with operations to commence in the fourth quarter of 2025.

We completed the expansion of our Columbus, Ohio facility in the second quarter of 2025 and the construction of our new Gallatin, Tennessee facility in the fourth quarter of 2025.

The cost of both projects was at or below budget.

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These investments reinforce our core business model differentiators to remain the partner of choice as we continue to produce products locally and ensure superior levels of customer service.

Europe net sales increase d 2.9% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, mostly due to favorable foreign currency translations, and increased 10.9% or $13.3 million for the three months ended September 30, 2025 compared to the same period in 2024, with approximately $8.1 million of the increase due to favorable foreign currency translation and remaining increase mostly due to increased sales volumes.

Wood construction product net sales increase d 1.6% f or the nine months ended September 30, 2025 compared to September 30, 2024 and concrete construction product net sales, which are mostly project based, increased 8.2% over the same periods.

Gross profit increa sed $5.2 million primarily due to higher net sales as well as gross margins increasing to 36.5% from 36.1% due to a decrease in material costs, as a percentage of net sales .

Operating income increased $8.1 million and operating margin increased to 10.8% from 8.9% due to lower integration expenses and slightly lower operating expenses, negatively affected by foreign currency transactions.

In local currency, operating expenses decreased by 3%.

We currently anticipate Europe results for 2025 to be impacted by economic headwinds but also believe in the long term potential given Europe's on-going housing shortage (with an increasing use of wood construction) and new environmental regulations for which we have products and solutions.

Administrative and All Other loss from operations decreased to $1.1 million from $11.3 million due to a $12.9 million gain on disposal of assets from the sale of the existing Gallatin, Tennessee facility.

Europe net sales increase d 6.3% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, due to the positive effect of approximately $13.2 million in foreign currency translations as well as price increases .

partly offset by lower sales volumes as a result of unfavorable weather conditions.

Wood construction product net sales increase d 6.7% f or the three months ended March 31, 2026 compared to March 31, 2025 and concrete construction product net sales, which are mostly project based, increased 4.7% over the same periods.

Gross profit increa sed $3.9 million primarily due to higher net sales as well as gross margins increasing to 36.3% from 35.2% due to a decrease in material costs, partly offset by higher factory and overhead costs, as a percentage of net sales .

Operating income decreased $2.2 million while operating margin decreased to 5.9% from 8.2%, partly due to increased operating expenses.

Operating expenses were negatively affected by approximately $3.8 million in foreign currency transactions as well as $1.5 million in one-time cost savings initiative costs.

In local currency, operating expenses increased by 5% due to one-time cost savings initiative costs.

We currently anticipate Europe results for 2026 to benefit from recent price increases and recent cost savings initiatives, including the closing of the fastener manufacturing business in Sweden.

We believe in Europe's long term potential given on-going housing shortage (with an increasing use of wood construction) and new environmental regulations for which we have products and solutions.

Our Asia/Pacific segment has generated revenues from both wood and concrete construction products.

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Based on business trends and conditions, the Company's outlook for the full fiscal year ending December 31, 2026 is as follows:

• Consolidated operating margin is estimated to be in the range of 19.0% to 20.0%, reflecting current market conditions and recent strategic initiatives.

The outlook reflects the previously announced price increases that went into effect on June 2, 2025 and October 15, 2025 and includes a benefit of $12.9 million from the sale of the existing Gallatin, Tennessee facility as well as non-recurring severance costs related to the strategic cost savings initiatives of approximately $9.0 to $12.0 million .

• The effective tax rate is estimated to be in the range of 25.5% to 26.5%, incl uding both federal and state income tax rates as well as international income tax rates, and assumes minimal impact from recently passed tax legislation.

• Capital expenditures are now estimated to be in the range of $150.0 million to $160.0 million, which includes approximately $75.0 million to $80.0 million remaining for both the Columbus, Ohio facility expansion and the new Gallatin, Tennessee facility construction.

Results of Operations for the Three Months Ended September 30, 2025, Compared with the Three Months Ended September 30, 2024

Unless otherwise stated, the below results, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the three months ended September 30, 2025, against the results of operations for the three months ended September 30, 2024.

Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended September 30, 2024 and the three months ended September 30, 2025.

In the first quarter of 2025, the Company reclassified certain engineering costs related to the Company's digital efforts from research and development and engineering expense as well as selling expense to general and administrative expense.

The financial results of prior three months ended September 30, 2024 were revised to reflect these changes with $3.1 million of costs being reclassified from research and development expenses and $1.6 million from selling expense to general and administrative expense.

The reclassification did not have any impact on the total operating expenses.

Third Quarter 2025 Consolidated Financial Highlights

The following table shows the change in the Company's results of operations from the three months ended September 30, 2024 to the three months ended September 30, 2025, and the increases or decreases for each category by segment:

• Consolidated operating margin is estimated to be in the range of 19.5% to 20.5%.

The operating margin range includes a projected gain of $10.0 million to $12.0 million on the sale of vacant land .

• The effective tax rate is estimated to be in the range of 25.0% to 26.0%, incl uding both federal and state income tax rates as well as international income tax rates, and assuming no tax law changes are enacted.

• Capital expenditures are estimated to be in the range of $75.0 million to $85.0 million .

Results of Operations for the Three Months Ended March 31, 2026, Compared with the Three Months Ended March 31, 2025

Unless otherwise stated, the below results, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the three months ended March 31, 2026, against the results of operations for the three months ended March 31, 2025.

Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended March 31, 2025 and the three months ended March 31, 2026.

In the first quarter of 2026, the Company reclassified certain software amortization costs related to the Company's component manufacturing efforts from general and administrative expense to cost of sales.

Additionally, for the year ended December 31, 2025, the Company reclassified certain quality assurance costs from general and administrative expense to cost of sales.

The financial results for the three months ended March 31, 2025 have been recast for comparison purposes and to conform to the current period classification, with $1.5 million of costs being reclassified from general and administrative expense to cost of sales.

The reclassification did not have any impact on the total income from operations.

First Quarter 2026 Consolidated Financial Highlights

The following table shows the change in the Company's results of operations from the three months ended March 31, 2025 to the three months ended March 31, 2026, and the increases or decreases for each category by segment:

Three Months Ended Three Months Ended

Increase (Decrease) in Operating Segment

(in thousands) September 30, 2024 North

(in thousands) March 31, 2025 North

America Europe Asia/

Pacific Admin &

All Other September 30, 2025

All Other March 31, 2026

Net sales $ 538,895 $ 41,226 $ 7,187 $ 656 $ — $ 587,964

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Interest income, net and other 1,103 (197) (112) 1 3,638 4,433

1,668 (404) (47) (7) 1,107 2,317

Other & foreign exchange gain (loss), net 1,058 (609) (1,212) (436) (1,553) (2,752)

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Net sales increased 9.1% to $588.0 million from $538.9 million.

Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 84.1% and 85.1% of the Company's total sales in the third quarters of 2025 and 2024, respectively.

Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 15.7% and 14.8% of the Company's total sales in the third quarters of 2025 and 2024, respectively.

Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 84.6% and 85.3% of the Company's total sales in the first quarters of 2026 and 2025, respectively.

Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 15.2% and 14.4% of the Company's total sales in the first quarters of 2026 and 2025, respectively.

Gross profit increased 6.1% to $265.9 million from $250.6 million primarily due to higher net sales while gross margins decreased to 45.2% from 46.5%.

From a product perspective, gross margin slightly decreased to 46.1% from 46.2% for wood construction products and decreased to 40.2% from 49.5% for concrete construction products, respectively.

Selling expense increased 5.9% to $56.1 million from $53.0 million, primarily due to increases of $1.9 million in personnel costs, $1.9 million in variable compensation, and $1.1 million in severance costs related to strategic cost savings initiatives .

General and administrative expense increased 13.3% to $85.4 million from $75.3 million, primarily due to increases of $3.0 million in variable compensation, $1.2 million in software related costs, net of amount capitalized, and $1.1 million in personnel costs.

Income from operations increased 12.7% to $140.7 million from $124.9 million mostly due to a $12.9 million gain on disposal of assets from the sale of the existing Gallatin, Tennessee facility.

Selling expense increased 0.6% to $54.5 million from $54.2 million, primarily due to increases of $0.5 million in variable compensation, and $0.5 million in advertising and trade shows costs , which is offset by decreases of $0.5 million in personnel costs and $0.2 million in software related costs, net of amount capitalized.

General and administrative expense increased 4.5% to $77.6 million from $74.2 million, primarily due to increases of $0.4 million in variable compensation, $0.1 million in severance costs, $2.9 million in software related costs, net of amount

capitalized, and $1.5 million in depreciation and amortization costs, which is offset by decrease of $1.2 million in personnel costs, and $1.0 million in professional service costs.

Income from operations increased 12.0% to $114.6 million from $102.3 million mostly due to higher gross profits.

Our effective income tax rat e decreased to 24.1% from 25.5%.

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Adjusted EBITDA 1 of $139.4 million increased 14.1% compared to $122.2 million, primarily due to higher gross profits.

The following table shows net sales by segment for the three months ended September 30, 2025 and 2024, respectively:

The following table shows net sales by segment for the three months ended March 31, 2026 and 2025, respectively:

(in thousands) North

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Three months ended

September 30, 2024 $ 461,356 $ 121,170 $ 4,627 $ 587,153

September 30, 2025 483,606 134,431 5,476 623,513

March 31, 2025 $ 420,699 $ 113,860 $ 4,336 $ 538,895

March 31, 2026 461,925 121,047 4,992 587,964

Increase $ 41,226 $ 7,187 $ 656 $ 49,069

Percentage increase 9.8 % 6.3 % 15.1 % 9.1 %

The following table shows segment net sales as percentages of total net sales for the three months ended September 30, 2025 and 2024, respectively:

The following table shows segment net sales as percentages of total net sales for the three months ended March 31, 2026 and 2025, respectively:

America Europe Asia/

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Percentage of total 2026 net sales 78.6 % 20.6 % 0.8 % 100.0 %

The following table shows gross profit (loss) by segment for the three months ended September 30, 2025 and 2024, respectively:

The following table shows gross profit (loss) by segment for the three months ended March 31, 2026 and 2025, respectively:

(in thousands) North

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Three months ended

September 30, 2024 $228,169 $44,327 $1,619 $942 $275,057

September 30, 2025 237,181 51,014 2,077 (1,010) 289,262

March 31, 2025 $209,428 $40,022 $1,725 $(609) $250,566

March 31, 2026 220,733 43,946 1,796 (584) 265,891

Increase (decrease) $11,305 $3,924 $71 $25 $15,325

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* The statistic is not meaningful or material.

The following table shows gross margin by segment for the three months ended September 30, 2025 and 2024, respectively:

The following table shows gross margin by segment for the three months ended March 31, 2026 and 2025, respectively:

America Europe Asia/

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* The statistic is not meaningful or material.

North America

• Net sales increased 4.8%, primarily due to price increases that took effect in June 2025 and incremental sales from the Company's 2024 acquisitions, partially offset by a decrease in sales volume of 2.5% (volume is based on pounds shipped and excludes software, service and equipment sales).

• Gross margin decreased to 49.0% from 49.5%, primarily due to higher factory and overhead as well as warehouse costs, as a percentage of net sales.

• Selling expense increased 6.8% , primarily due to increases of $2.0 million in personnel costs, $1.3 million in variable compensation, and $0.9 million in severance costs related to strategic cost savings initiatives, partially offset by a decrease of $1.2 million in advertising and trade show costs .

• General and administrative expense increased 14.8%, primarily due to increases of $1.8 million in variable compensation and $1.1 in depreciation and amortization expenses.

• Income from operations increased by $1.9 million due to the factors discussed above.

• Net sales increased 10.9% due to higher sales volumes as well as the positive effect of approximately $8.1 million in foreign currency translation.

In local currency, net sales increased 4.3%.

• Gross margin increased to 37.9% from 36.6% , primarily due to lower material costs, as a percentage of net sales.

• Income from operations increased by $3.5 million to $16.1 million from $12.6 million primarily due to an increase in gross profit, partially offset by increases in operating expenses mostly due to the negative effect of approximately $2.1 million in foreign currency translation.

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months ended September 30, 2025 and 2024.

Administrative and All Other

• Loss from operations decreased to $1.1 million from $11.3 million due to a $12.9 million gain on disposal of assets from the sale of the existing Gallatin, Tennessee facility.

Results of Operations for the Nine Months Ended September 30, 2025, Compared with the Nine Months Ended September 30, 2024

Unless otherwise stated, the results announced below, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the nine months ended September 30, 2025, against the results of operations for the nine months ended September 30, 2024.

Unless otherwise stated, the results announced below, when referencing “both periods,” refer to the nine months ended September 30, 2024 and the nine months ended September 30, 2025.

The financial results of prior nine months ended September 30, 2024, were revised to reflect these changes with $8.5 million of costs being reclassified from research and development expenses and $4.3 million from selling expense to general and administrative expense.

The reclassification did not have any impact on the total operating expenses.

Year-to-Date (9-months) 2025 Consolidated Financial Highlights

The following table illustrates the differences in our operating results for the nine months ended September 30, 2025, from the nine months ended September 30, 2024, and the increases or decreases for each category by segment:

Nine Months Ended Increase (Decrease) in Operating Segment Nine Months Ended

(in thousands) September 30, 2024 North

America Europe Asia/

Pacific Admin &

All Other September 30, 2025

Net sales $ 1,714,710 $ 65,867 $ 10,703 $ 2,183 $ — $ 1,793,463

Cost of sales 916,551 32,627 5,480 627 2,426 957,711

Gross profit 798,159 33,240 5,223 1,556 (2,426) 835,752

Research and development and other engineering expense 59,759 947 469 224 — 61,399

Selling expense 160,755 6,864 (1,093) 204 — 166,730

General and administrative expense 219,977 15,593 (1) (135) 2,795 238,229

Total operating expenses 440,491 23,404 (625) 293 2,795 466,358

Acquisition and integration related costs 4,992 58 (2,844) — (1,757) 449

Net gain on disposal of assets (460) (2,526) 632 (182) (11,825) (14,361)

Income from operations 353,136 12,304 8,060 1,445 8,361 383,306

Interest income, net and other 4,111 (861) 249 308 508 4,315

Other & foreign exchange gain, net 352 (739) 1,088 29 (579) 151

Income before income taxes 357,599 10,704 9,397 1,782 8,290 387,772

Provision for income taxes 90,821 5,801 (272) 302 2,251 98,903

Net income $ 266,778 $ 4,903 $ 9,669 $ 1,480 $ 6,039 $ 288,869

Net sales increased 4.6% to $1,793.5 million from $1,714.7 million driven by price increases that took effect in June 2025, positive effect of approximately $8.4 million in foreign currency translation, and incremental sales from the Company's 2024 acquisitions, partly offset by an overall decrease in sales volumes.

Wood construction product sales represented 84.8% and 85.2% of the Company's total sales in the first nine months of 2025 and 2024.

Concrete construction product sales represented 15.0% and 14.7% of the Company's total sales in the first nine months of 2025 and 2024.

Gross profit increased 4.7% to $835.8 million from $798.2 million.

Gross margins remained relatively flat.

Gross margins increased to 46.5% from 46.2% for wood construction products and decreased to 47.3% from 48.0% for concrete construction products.

Research and development and engineering expense increased 2.7% to $61.4 million from $59.8 million.

Selling expense increased to $166.7 million from $160.8 million, primarily due to increases of $6.7 million in personnel costs, $2.9 million in variable compensation and $1.4 million in severance costs partly related to strategic cost savings initiatives, partially offset by decreases of $2.5 million in advertising and trade shows costs and $1.1 million in travel related costs.

General and administrative expense increased to $238.2 million from $220.0 million, primarily due to increases of $7.6 million in variable compensation, $7.6 million in personnel costs, and $2.8 million in depreciation and amortization expenses, partially offset by a decrease of $1.4 million in travel related costs.

Income from operations increased 8.5% to $383.3 million from $353.1 million primarily due to increase in net sales as noted above, a $12.9 million gain on disposal of assets from the sale of the existing Gallatin, Tennessee facility, and a decrease of $4.5 million in integration expenses.

Our effective income tax rate increased to 25.5% from 25.4%.

Consolidated net income was $288.9 million compared to $266.8 million.

Diluted earnings per share was $6.89 compared to $6.28.

Adjusted EBITDA 1 of $437.2 million increased 4.3% compared to $419.3 million primarily due to higher gross profits.

The following table represents net sales by segment for the nine-month periods ended September 30, 2024 and 2025:

(in thousands) North

America Europe Asia/

Pacific Total

Nine Months Ended

September 30, 2024 $ 1,331,126 $ 370,985 $ 12,599 $ 1,714,710

September 30, 2025 1,396,993 381,688 14,782 1,793,463

Increase $ 65,867 $ 10,703 $ 2,183 $ 78,753

Percentage increase 4.9 % 2.9 % 17.3 % 4.6 %

The following table represents segment sales as percentages of total net sales for the nine-month periods ended September 30, 2024 and 2025, respectively:

America Europe Asia/

Pacific Total

Percentage of total 2024 net sales 78 % 22 % — % 100 %

Percentage of total 2025 net sales 78 % 21 % 1 % 100 %

The following table represents gross profit (loss) by segment for the nine-month periods ended September 30, 2024 and 2025:

(in thousands) North America Europe Asia/

Pacific Admin & All Other Total

Nine Months Ended

September 30, 2024 $ 660,287 $ 134,088 $ 3,781 $ 3 $ 798,159

September 30, 2025 693,527 139,311 5,337 (2,423) 835,752

Increase (decrease) $ 33,240 $ 5,223 $ 1,556 $ (2,426) $ 37,593

Percentage increase

5.0 % 3.9 % * * 4.7 %

* The statistic is not meaningful or material

1 Adjusted EBITDA is a non-GAAP financial measure.

For a reconciliation of Adjusted EBITDA to U.S.

generally accepted accounting principles (“GAAP”) net income see the schedule titled “Reconciliation of Net Income to Adjusted EBITDA.”

The following table represents gross margins by segment for the nine-month periods ended September 30, 2024 and 2025:

America Europe Asia/

Pacific Admin &

All Other Total

2024 gross margin percentage 49.6 % 36.1 % 30.0 % * 46.5 %

2025 gross margin percentage 49.6 % 36.5 % 36.1 % * 46.6 %

* The statistic is not meaningful or material.

generally accepted accounting principles (“GAAP”) net income see the schedule titled “Reconciliation of Non-GAAP Financial Measures.”

North America

• Net sales increased 4.9%, primarily due to price increases that took effect in June 2025 and incremental sales from the Company's 2024 acquisitions, partially offset by a decrease in sales volume of 1.3% (volume is based on pounds shipped and excludes software, service and equipment sales).

• Gross margin remained flat at 49.6%.

• Selling expense increased 5.7%, primarily due to increases of $7.1 million in personnel costs, $2.5 million in variable compensation, and $1.1 million in professional fees, partially offset by decreases of $2.1 million in advertising and trade shows expenses and $1.0 million in depreciation and amortization expenses.

• General and administrative expense increased 11.7%, primarily due to increases of $5.0 million in variable compensation, $4.2 million in depreciation and amortization expenses, $3.8 million in personnel costs, and $1.6 million in professional fees.

• Income from operations increas ed $12.3 million , du e to higher net sales, partially offset by increases in operating expenses.

• Net sales increased 2.9%, primarily due to the positive effect of $11.2 million in foreign currency translation.

It remained relatively flat in local currency.

• Gross margin increased to 36.5% from 36.1%, primarily due to lower material costs, partly offset by higher labor, factory and overhead as well as warehouse costs, as percentages of net sales.

• Income from operations increased $8.1 million, primarily due to higher gross margins on increased net sales.

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the nine months ended September 30, 2025 and 2024.

• Net sales increased 9.8%, primarily due to price increases that took effect in June 2025 and October 2025 and an increase in sales volumes, as well as the positive effect of approximately $1.2 million in foreign currency translation.

• Gross margin decreased to 47.8% from 49.8%, reflecting primarily the impact from tariffs and higher material, labor and factory and overhead costs, as a percentage of net sales.

• Selling expense decreased 3.3%, primarily due to decreases of $0.8 million in personnel costs, $0.4 million in variable compensation, $0.2 million in software related costs, net of amount capitalized, and $0.2 million in severance costs , partially offset by increases of $0.4 million in advertising and trade show costs .

• General and administrative expense increased 1.7% , primarily due to increases of $2.0 million in software related costs, net of amount capitalized, $0.6 million in patents costs, $0.5 million in depreciation and amortization costs, $0.5 million in leasing costs, and $0.2 million in severance costs, which is offset by decreases of $1.8 in personnel costs, $1.2 million in professional service costs, and $0.3 million in variable compensation.

• Income from operations increased by $13.5 million, primarily due to the increases in net sales as well as lower operating expense including lower personnel costs, professional fees and variable incentive compensation.

• Net sales increased 6.3% due to the positive effect of approximately $13.2 million in foreign currency translation as well as price increases, partly offset by decreased sales volumes.

• Gross margin increased to 36.3% from 35.2% , primarily driven by higher pricing and lower material costs, partly offset by higher factory and tooling costs, as a percentage of net sales.

• Income from operations decreased by $2.2 million to $7.1 million from $9.3 million primarily due to lower sales volumes.

Operating expenses were negatively affected by approximately $3.8 million in foreign currency translation .

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months ended March 31, 2026 and 2025.

Administrative and All Other

• Loss from operations decreased to $25.1 million from $33.5 million primarily due to a $12.9 million gain on disposal of assets from the sale of the existing Gallatin, Tennessee facility.

• Loss from operations decreased to $11.0 million from $12.2 million due to higher gross profits.

Effect of New Accounting Standards

3 unchanged sentences

Our principal uses of capital include the costs and expenses associated with our operations, including financing working capital requirements and continuing our capital allocation strategy, which includes supporting capital expenditures, paying cash dividends, repurchasing the Company's common stock, and financing other investment opportunities from time to time.

On March 30, 2022, the Company entered into a Credit Agreement.

The Credit Agreement provides for a 5-year revolving credit facility of $450.0 million, which includes a letter of credit sub-facility up to $50.0 million and for a 5-year term loan facility of $450.0 million.

As of September 30, 2025, the Company had no borrowings under the revolving credit facility and $371.3 million under the term loan facility, and has $450.0 million available to borrow under the revolving credit facility.

As of September 30, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions, including $133.7 million that is held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the U.S.

On December 16, 2025, the Company entered into the Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”), which amended and restated in its entirety the Amended and Restated Credit Agreement, dated as of March 30, 2022.

The Second Amended and Restated Credit Agreement provides for a 5-year revolving credit facility of $600 million (the “revolving credit facility”), which includes a letter of credit sub-facility of up to $50 million, and for a 5-year term loan facility of $300 million (the “term loan facility”).

The Company has the ability to increase the

principal amount of the Credit Facilities by an additional amount equal to the greater of $525 million and 100% of consolidated EBITDA for the most recently ended fiscal quarter, by obtaining additional commitments from existing lenders or new lenders and satisfying certain other customary conditions.

As of March 31, 2026, the Company had borrowings of $74.2 million under the revolving credit facility and $296.3 million under the term loan facility, and has $525.8 million available to borrow under the revolving credit facility.

As of March 31, 2026, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions, including $130.2 million that is held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the U.S.

The Company is maintaining a permanent reinvestment assertion on its foreign earnings relative to remaining cash held outside the United States.

We believe the Company's balances of cash and cash equivalents, cash flows from operating activities, and access to borrowings under our credit facilities are sufficient to satisfy its liquidity requirements and capital needs over the next 12 months and beyond.

The following table shows selected financial information as of September 30, 2025, December 31, 2024 and September 30, 2024, respectively:

As of September 30, As of December 31, As of September 30,

The following table shows selected financial information as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively:

As of March 31, As of December 31, As of March 31,

(in thousands) 2026 2025 2025

3 unchanged sentences

Non-cash net working capital 615,954 586,570 673,925

The following table presents the significant categories of cash flows used or provided during the nine-month periods ended September 30, 2025 and 2024, respectively:

Nine Months Ended

September 30,

The following table presents the significant categories of cash flows used or provided during the three-month periods ended March 31, 2026 and 2025, respectively:

Three Months Ended

(in thousands) 2026 2025

7 unchanged sentences

For example, as a result of seasonality our trade accounts receivable are generally lowest at the end of the fourth quarter and increases during the first, second, and third quarters as construction activity ramps in markets we serve.

During the nine months ended September 30, 2025, operating activities provided $303.0 million in cash, as a result of $288.9 million from net income plus $85.2 million non-cash expenses such as depreciation and amortization, deferred compensation, stock-based compensation, and leases.

During the three months ended March 31, 2026, operating activities provided $35.5 million in cash, as a result of $88.2 million from net income plus $35.5 million of non-cash expenses such as depreciation and amortization, deferred compensation, stock-based compensation, and leases.

This amount was partly offset by $88.2 million used for the net change in operating assets and liabilities.

The net change in operating assets and liabilities included increases of $101.8 million in trade accounts

receivable, which was partly offset by an increase of $21.7 million in a ccrued liabilities and other current liabilities and a decrease of $20.8 million in inventory.

Cash flow used in investing activities of $106.5 million during the nine months ended September 30, 2025 consisted primarily of $124.3 million used for facility expansion projects as well as machinery and equipment purchases , partly offset by $21.1 million in proceeds from the sale of property and equipment, mostly from $18.2 million in net proceeds on the sale of the Gallatin facility .

Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to be in the range of $150.0 million and $160.0, which includes approximately $75.0 million to $80.0 million remaining for both the Columbus, Ohio facility expansion and the new Gallatin, Tennessee facility.

The remaining capital expenditures will be primarily focused on purchases of new equipment to support increased productivity and efficiencies, enhancements to our existing facilities to expand our manufacturing footprint in-line with increasing customer needs, as well as investments for adjacencies and key growth initiatives .

Cash flow used in financing activities of $143.1 million during the nine months ended September 30, 2025 consisted primarily of $90.0 million in stock repurchases and $35.6 million used to pay dividends to our stockholders.

On October 23, 2025, the Company's Board of Directors (the “ Board ” ) increased the 2025 share repurchase authorization by an additional $20.0 million resulting in a $30.0 million available for repurchases of the Company's common stock through December 31, 2025.

The Board also authorized the Company to repurchase up to $150.0 million of the Company's common stock, effective January 1, 2026 through December 31, 2026.

On October 23, 2025, the Board declared a quarterly cash dividend of $0.29 per share payable on January 22, 2026, to the Company's stockholders of record on January 2, 2026.

Since the beginning of 2022 through the period ended September 30, 2025 , we have returned $489.8 million to stockholders, which represents 48.4% of our free cash flow from operations during the same period, and over the same period the Company has repurchased over two million shares of the Company's common stock, which represents approximately 5.2% of the outstanding shares of the Company's common stock at the start of 2022.

The net change in operating assets and liabilities included an increase of $98.8 million in trade accounts receivable and a decrease of $37.5 million in accrued liabilities and other current liabilities, which was partly offset by a decrease of $40.0 million in inventory.

Cash flow used in investing activities of $19.0 million during the three months ended March 31, 2026 consisted primarily of $17.6 million used for machinery and equipment purchases.

Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to be in the range of $75.0 million and $85.0 million.

Capital expenditures will be primarily focused on purchases of new equipment to support increased productivity and

efficiencies, enhancements to our existing facilities to expand our manufacturing footprint in-line with increasing customer needs.

Cash flow used in financing activities of $69.0 million during the three months ended March 31, 2026 consisted primarily of $50.0 million in stock repurchases and $12.0 million used to pay dividends to our stockholders.

On May 6, 2026, the Board declared a quarterly cash dividend of $0.30 per share of the Company's common stock, payable on July 23, 2026 to stockholders of record on July 2, 2026, and estimated to be $12.3 million in total.

Since the beginning of 2023 through the period ended March 31, 2026, we have returned $471.3 million to stockholders, which represents 58.1% of our free cash flow from operations during the same period, and over the same period the Company has repurchased $1.9 million shares of the Company's common stock, which represents approximately 4.4% of the outstanding shares of the Company's common stock at the start of 2022.

Reconciliation of Non-GAAP Financial Measures

1 unchanged sentence

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below.

Three Months Ended September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net Income $ 88,216 $ 77,884

6 unchanged sentences

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2025.

We did not have any off-balance sheet arrangements as of March 31, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis