What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 179 added, 90 removed, 200 unchanged (57% of the section changed)

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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 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;

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;

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;

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

and those factors discussed under Item 1A.

Risk Factors and Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Additional risks include:

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.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, subsequent Quarterly Reports on Form 10-Q and other reports we file with the SEC.

We caution that you should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.

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We operate in three business segments determined by geographic region:

North America, Europe, and

Asia/Pacific.

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:

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• 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.

• Earnings per share grew $0.64 per share to $8.24 per share of 8.4% from fiscal year 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.

Our investment in our new Gallatin, Tennessee facility enables us to onshore additional fastener and anchor production, and the operation will in-source key manufacturing processes such as heat treating and coating of fasteners.

Our new Gallatin, Tennessee facility enables us to onshore additional fastener and anchor production, and the operation will in-source key manufacturing processes such as heat treating and coating of fasteners.

Additional warehouse capabilities will also enhance next day delivery for our North American customers.

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• 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.

As a result, we continue to make significant gains in both fasteners and anchors as well as realizing high single digit growth in the component manufacturing and OEM market.

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.

housing starts in fiscal year 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.

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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.

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

As a result, North America net sales increased in recent quarters even as demand did not increase.

However, increased selling prices were 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.

We also increased prices in Europe effective the second half of 2025 and during the first quarter of 2026, which have increased recent net sales.

We believe Europe net sales could increase in future quarters even if demand does not increase.

Similarly to North America, the price increases are expected to offset high costs incurred over recent years.

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.

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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).

We define Adjusted EBITDA as net income (loss), adjusted to exclude provision for income taxes, depreciation and amortization, acquisition integration and restructuring costs, non-qualified deferred compensation adjustments, lease termination costs, severance costs related to cost saving initiatives, net loss or gain on disposal of assets, interest income or expense and other financing costs, 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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could result in lower demand, which would affect our sales and possibly operating profit.

Changes in raw material cost could impact the amount of inventory on-hand, and negatively affect our gross profit and operating margins depending on the timing of raw material purchases or how much sales prices can be increased to offset any increases in raw material costs.

Unlike lumber or other products that have a more direct correlation to U.S.

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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.

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.

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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 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.

North America net sales increased for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to price increases that took effect in June 2025 and October 2025, and an increase in sales volumes.

Our wood construction product net sales increased 6.9% for the six months ended June 30, 2026 compared to June 30, 2025.

Our concrete construction product net sales increased 13.2% over the same periods.

Operating income increased 14.5% to $276.3 million.

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.

The increase was primarily due to the increases in net sales as well as lower operating expense including lower personnel costs, and travel and fuel costs .

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.

These facilities are expected to improve our overall service, production efficiencies and safety in the workplace, as well as reduce our reliance on certain outsourced finished goods and component products.

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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 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.

We believe sales volumes will likely be impacted by lower housing starts compared to prior year, which will impact net sales and margins.

Rising steel costs in the second half of 2026 will also create margin pressure.

Europe net sales increase d 7.0% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to both increased unit sales volumes and price increases as well as the positive effect of approximately $17.8 million in foreign currency translation.

Wood construction product net sales increase d 7.3% f or the six months ended June 30, 2026 compared to June 30, 2025 and concrete construction product net sales, which are mostly project based, increased 5.7% over the same periods.

Gross profit increa sed $10.4 million and gross margins increased to 37.3% from 35.7% primarily driven by higher pricing and lower material costs, partly offset by higher factory and tooling costs, as a percentage of net sales.

Operating income increased $1.8 million and operating margin remained flat at 10.1%.

Operating expenses were negatively affected by approximately $2.2 million in foreign currency translation.

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

We currently anticipate Europe results for 2026 to benefit from recent price increases and recent cost savings initiatives, including on-going footprint optimization efforts.

We be lieve 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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• Capital expenditures are estimated to be in the range of $80.0 million to $90.0 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.

Results of Operations for the Three Months Ended June 30, 2026, Compared with the Three Months Ended June 30, 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 June 30, 2026, against the results of operations for the three months ended June 30, 2025.

Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended June 30, 2025 and the three months ended June 30, 2026.

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 financial results for the three months ended June 30, 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:

Second Quarter 2026 Consolidated Financial Highlights

The following table shows the change in the Company's results of operations from the three months ended June 30, 2025 to the three months ended June 30, 2026, and the increases or decreases for each category by segment:

Three Months Ended Three Months Ended

Increase (Decrease) in Operating Segment

(in thousands) March 31, 2025 North

(in thousands) June 30, 2025 North

America Europe Asia/

Pacific Admin &

All Other March 31, 2026

All Other June 30, 2026

Net sales $ 631,055 $ 29,603 $ 10,093 $ 325 $ — $ 671,076

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Net sales increased 6.3% to $671.1 million from $631.1 million .

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 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.

Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 84.7% and 84.9% of the Company's total sales in the second 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 15.1% and 15.0% of the Company's total sales in the second quarters of 2026 and 2025, respectively.

Gross profit increased 8.6% to $318.2 million from $292.9 million primarily due to higher net sales while gross margins increased to 47.4% from 46.4%.

From a product perspective, gross margin slightly increased to 47.3% from 47.0% for wood construction products and increased to 48.3% from 45.0% for concrete construction products, respectively.

Selling expense decreased 6.4% to $52.8 million from $56.4 million, primarily due to decreases of $1.2 million in advertising and trade shows costs , $1.9 million in travel and fuel expenses, $0.8 million in payroll expenses, and $0.3 million in professional services and legal costs, which is offset by increases of $0.5 million in variable compensation.

Approximately $0.7 million of patent-filing related costs were reclassified to general and administrative.

General and administrative expense increased 10.5% to $83.6 million from $75.6 million, primarily due to increases of $4.6 million in variable compensation, $2.2 million in professional services and legal costs, $1.0 million in accrued product

repairment expenses, $0.7 million in severance costs, $0.7 million in patent-filing expenses reclassified from selling expense, $0.5 million in depreciation and amortization costs, and $0.4 million in leasing expenses, which is offset by decrease of $0.5 million in software related costs, net of amount capitalized, and $1.7 million in personnel costs.

Income from operations increased 20.6% to $169.1 million from $140.2 million mostly due to higher gross profits.

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Adjusted EBITDA 1 of $196.1 million increased 22.6% compared to $159.9 million, primarily due to higher gross profits.

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

The following table shows net sales by segment for the three months ended June 30, 2026 and 2025, respectively:

(in thousands) North

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Three months ended

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

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

June 30, 2025 $ 492,687 $ 133,398 $ 4,970 $ 631,055

June 30, 2026 522,290 143,491 5,295 671,076

Increase $ 29,603 $ 10,093 $ 325 $ 40,021

Percentage increase 6.0 % 7.6 % 6.5 % 6.3 %

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

The following table shows segment net sales as percentages of total net sales for the three months ended June 30, 2026 and 2025, respectively:

America Europe Asia/

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Percentage of total 2026 net sales 77.8 % 21.4 % 0.8 % 100.0 %

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

The following table shows gross profit (loss) by segment for the three months ended June 30, 2026 and 2025, respectively:

(in thousands) North

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Three months ended

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

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

June 30, 2025 $243,885 $48,275 $1,537 $(806) $292,891

June 30, 2026 262,137 54,777 1,851 (572) 318,193

Increase (decrease) $18,252 $6,502 $314 $234 $25,302

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* The statistic is not meaningful or material.

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

The following table shows gross margin by segment for the three months ended June 30, 2026 and 2025, respectively:

America Europe Asia/

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North America

• 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.

• Net sales increased 6.0%, primarily due to price increases that took effect in June 2025 and October 2025 partly offset by a slight decrease in unit sales volumes .

• Gross margin increased to 50.2% from 49.5%, primarily due to lower material costs as a percentage of net sales and cost savings initiatives.

• Selling expense decreased 10.0%, primarily due to decreases of $2.1 million in travel and fuel expenses, $1.0 million in advertising and trade show costs, and $1.0 million in personnel costs.

• General and administrative expense increased 7.9% , primarily due to increases of $2.3 million in professional services and legal expenses, $1.0 million in accrued product repairment expenses, $0.7 million in variable compensations, $0.5 million in depreciation and amortization costs, $0.5 million in patent expenses, and $0.5 million in leasing expenses, which is offset by decrease of $1.2 in personnel costs, and $0.8 million in software related costs, net of amount capitalized.

• Income from operations increased by $21.5 million, primarily due to the increases in net sales as well as lower operating expense including lower personnel costs, and software licensing fees as well as a reduction in travel and entertainment costs.

• Net sales increased 7.6% due to both increased unit sales volumes and price increases as well as the positive effect of approximately $3.7 million in foreign currency translation.

• Gross margin increased to 38.2% from 36.2% , primarily driven by lower material costs, factory and tooling costs, and labor costs as a percentage of net sales.

• Income from operations increased by $4.0 million to $19.7 million from $15.7 million primarily due to higher gross profits.

Operating expenses were negatively affected by approximately $0.7 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.

• 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 June 30, 2026 and 2025.

Administrative and All Other

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

• Loss from operations decreased to $8.5 million from $11.8 million primarily due to a $5.5 million gain from an eminent domain settlement, which is offset by increases of $2.4 million in general and administrative expenses.

Results of Operations for the Six Months Ended June 30, 2026, Compared with the Six Months Ended June 30, 2025

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 six months ended June 30, 2026, against the results of operations for the six months ended June 30, 2025.

Unless otherwise stated, the results announced below, when referencing “both periods,” refer to the six months ended June 30, 2025 and the six months ended June 30, 2026.

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 six months ended June 30, 2025 have been recast for comparison purposes and to conform to the current period classification, with $3.0 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.

Year-to-Date (6-months) 2026 Consolidated Financial Highlights

The following table illustrates the differences in our operating results for the six months ended June 30, 2026, from the six months ended June 30, 2025, and the increases or decreases for each category by segment:

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

(in thousands) June 30, 2025 North

America Europe Asia/

Pacific Admin &

All Other June 30, 2026

Net sales $ 1,169,950 $ 70,829 $ 17,280 $ 981 $ — $ 1,259,040

Cost of sales 626,493 41,272 6,854 594 (257) 674,956

Gross profit 543,457 29,557 10,426 387 257 584,084

Research and development and other engineering expense 40,606 (4,394) 568 (149) — 36,631

Selling expense 110,607 (5,640) 1,996 348 — 107,311

General and administrative expense 149,821 4,478 5,309 261 1,265 161,134

Total operating expenses 301,034 (5,556) 7,873 460 1,265 305,076

Acquisition and integration related costs 140 2 569 — 40 751

Net gain on disposal of assets (280) 151 176 10 (5,547) (5,490)

Income from operations 242,563 34,960 1,808 (83) 4,499 283,747

Interest income, net and other 1,998 (149) 635 1 6,144 8,629

Other & foreign exchange gain, net (626) (527) (1,379) (605) (2,050) (5,187)

Income before income taxes 243,935 34,284 1,064 (687) 8,593 287,189

Provision for income taxes 62,510 7,865 (23) (157) 1,736 71,931

Net income $ 181,425 $ 26,419 $ 1,087 $ (530) $ 6,857 $ 215,258

Net sales increased 7.6% to $1,259.0 million from $1,170.0 million.

Wood construction product sales represented 84.7% and 85.1% of the Company's total sales in the first six months of 2026 and 2025, respectively.

Concrete construction product sales represented 15.1% and 14.7% of the Company's total sales in the first six months of 2026 and 2025, respectively.

Gross profit increased 7.5% to $584.1 million from $543.5 million.

Gross margins remained relatively flat, supported by pricing, favorable mix and operational efficiencies.

Gross margins for wood construction products was 46.7% for both six months ended 2026 and 2025, and decreased to 44.5% from 47.0% for concrete construction products.

Research and development and engineering expense decreased 9.8% to $36.6 million from $40.6 million, primarily due to decreases of $1.0 million in personnel costs, $1.0 million in patent expenses, $0.6 million in depreciation and amortization costs, $0.5 million in professional services and legal fees, $0.3 million in software related costs, net of amount capitalized, and $0.2 million in travel and fuel expenses.

Selling expense decreased to $107.3 million from $110.6 million, primarily due to decreases of $2.2 million in travel and fuel expenses, $1.3 million in personnel costs, and $0.7 million in advertising and trade shows, which is partially offset by increases

of $0.6 million in variable compensations, and $0.2 million in leasing expenses.

Approximately $0.7 million of patent-filing related costs were reclassified to general and administrative.

General and administrative expense increased to $161.1 million from $149.8 million, primarily due to increases of $5.1 million in variable compensation, $2.1 million in software related costs, net of amount capitalized, $2.0 million in depreciation and amortization expenses, $1.2 million in professional services and legal expenses, $1.2 million in patent expenses, $1.0 million in accrued product repairment expenses, $0.9 million in leasing expenses, $0.8 million in severance costs, and $0.7 million of patent-filing related costs reclassified from selling expense, partially offset by a decrease of $2.9 million in personnel costs.

Income from operations increased 17.0% to $283.7 million from $242.6 million primarily due to higher gross profits.

Our effective income tax rate decreased to 25.0% from 25.6%.

Consolidated net income was $215.3 million compared to $181.4 million.

Diluted earnings per share was $5.22 compared to $4.33.

Adjusted EBITDA 2 of $335.4 million increased 18.9% compared to $282.1 million primarily due to higher gross profits.

The following table represents net sales by segment for the six-month periods ended June 30, 2025 and 2026:

(in thousands) North

America Europe Asia/

Pacific Total

Six Months Ended

June 30, 2025 $ 913,386 $ 247,258 $ 9,306 $ 1,169,950

June 30, 2026 984,215 264,538 10,287 1,259,040

Increase $ 70,829 $ 17,280 $ 981 $ 89,090

Percentage increase 7.8 % 7.0 % 10.5 % 7.6 %

The following table represents segment sales as percentages of total net sales for the six-month periods ended June 30, 2025 and 2026, respectively:

America Europe Asia/

Pacific Total

Percentage of total 2025 net sales 78.1 % 21.1 % 0.8 % 100.0 %

Percentage of total 2026 net sales 78.2 % 21.0 % 0.8 % 100.0 %

The following table represents gross profit (loss) by segment for the six-month periods ended June 30, 2025 and 2026:

(in thousands) North America Europe Asia/

Pacific Admin & All Other Total

Six Months Ended

June 30, 2025 $ 453,313 $ 88,297 $ 3,260 $ (1,413) $ 543,457

June 30, 2026 482,870 98,723 3,647 (1,156) 584,084

Increase (decrease) $ 29,557 $ 10,426 $ 387 $ 257 $ 40,627

Percentage increase 6.5 % 11.8 % * * 7.5 %

* The statistic is not meaningful or material

2 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 six-month periods ended June 30, 2025 and 2026:

America Europe Asia/

Pacific Admin &

All Other Total

2025 gross margin percentage 49.6 % 35.7 % 35.0 % * 46.5 %

2026 gross margin percentage 49.1 % 37.3 % 35.5 % * 46.4 %

* The statistic is not meaningful or material.

North America

• Net sales increased 7.8%, 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 $1.4 million in foreign currency translation.

• Gross margin decreased from 49.6% to 49.1%, reflecting primarily the impact from tariffs and higher labor and factory and overhead costs, as a percentage of net sales, partially offset by cost savings initiatives.

• Selling expense decreased 6.7%, primarily due to decreases of $2.2 million in travel and fuel expenses, $2.0 million in personnel costs, $0.6 million in advertising and trade shows expenses, $0.5 million in professional services and legal expenses, and $0.2 million in software related costs, net of amount capitalized.

• General and administrative expense increased 4.8%, primarily due to increases of $1.1 million in professional services and legal expenses, $1.3 million in depreciation and amortization expenses, $1.2 million in software related costs, net of amount capitalized, $1.0 million in leasing expenses, $1.0 million in accrued product repairment expenses, $1.1 million in patent expenses, and $0.4 million in variable compensation, which is partially offset by decreases of $2.9 million in personnel costs.

• Income from operations increas ed $35.0 million , du e to higher gross profit and decreased operating expenses.

• Net sales increased 7.0%, due to both increased unit sales volumes and price increases as well as the positive effect of approximately $17.8 million in foreign currency translation.

• Gross margin increased to 37.3% from 35.7%, primarily driven by higher pricing and lower material costs, factory and tooling costs, and labor costs as a percentage of net sales.

• Income from operations increased $1.8 million, primarily due to higher gross margins on increased net sales, which is offset by the increase of operating expenses.

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the six months ended June 30, 2026 and 2025.

Administrative and All Other

• Loss from operations decreased to $19.5 million from $24.0 million primarily due to a $5.5 million gain from eminent domain settlement, which is offset by an increase of $1.3 million general and administrative expenses.

Effect of New Accounting Standards

5 unchanged sentences

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 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 June 30, 2026, the Company had borrowings of $44.2 million under the revolving credit facility and $292.5 million under the term loan facility, and has $555.8 million available to borrow under the revolving credit facility.

As of June 30, 2026, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions, including $136.6 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 March 31, 2026, December 31, 2025 and March 31, 2025, respectively:

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

The following table shows selected financial information as of June 30, 2026, December 31, 2025 and June 30, 2025, respectively:

As of June 30, As of December 31, As of June 30,

(in thousands) 2026 2025 2025

3 unchanged sentences

Non-cash net working capital 571,925 586,570 694,858

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

The following table presents the significant categories of cash flows used or provided during the six-month periods ended June 30, 2026 and 2025, respectively:

Six Months Ended

(in thousands) 2026 2025

6 unchanged sentences

Our operating cash flows are impacted by prevailing macro-economic conditions and subject to seasonality, which is cyclically associated with the volume and timing of construction project starts.

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 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.

For example, as a result of seasonality our trade accounts

receivable are generally lowest at the end of the fourth quarter and increase during the first, second, and third quarters as construction activity ramps in markets we serve.

During the six months ended June 30, 2026, operating activities provided $248.5 million in cash, as a result of $215.3 million from net income plus $75.7 million of non-cash expenses such as depreciation and amortization, stock-based compensation, and leases .

This amount was partly offset by $42.5 million used for the net change in operating assets and liabilities.

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.

The net change in operating assets and liabilities included an increase of $138.4 million in trade accounts receivable which was partly offset by a decrease of $74.9 million in inventory and an increase of $42.7 million in trade accounts payable.

Cash flow used in investing activities of $26.3 million during the six months ended June 30, 2026 consisted primarily of $33.0 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 $80.0 million to $90.0 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 $163.0 million during the six months ended June 30, 2026 consisted primarily of $98.7 million in stock repurchases, $37.5 million in loan principal payments, and $23.9 million used to pay dividends to our stockholders.

On July 23, 2026, the Board declared a quarterly cash dividend of $0.30 per share, estimated to be $12.2 million in aggregate.

The dividend will be payable on October 22, 2026, to the Company's stockholders of record on October 1, 2026.

Since the beginning of 2023 through the period ended June 30, 2026, we have returned $531.9 million to stockholders, which represents 52.7% of our free cash flow from operations during the same period, and over the same period the Company has repurchased 2.1 million shares of the Company's common stock, which represents approximately 5.0% 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 March 31,

Three Months Ended June 30, Six Months Ended

2026 2025 2026 2025

Net Income $ 127,042 $ 103,541 $ 215,258 $ 181,425

6 unchanged sentences

Off-Balance Sheet Arrangements

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

We did not have any off-balance sheet arrangements as of June 30, 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