What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-09-04 compared with 2025-06-05 · 200 added, 73 removed, 167 unchanged (62% of the section changed)

8 unchanged sentences

Demand for agricultural equipment and, to a lesser extent, parts and service support, is impacted by agricultural commodity prices and net farm income.

Based upon February 2025 U.S.

Department of Agriculture publications, calendar year 2024 net farm income is estimated to have decreased by 23.6% compared to 2022.

Based upon September 2025 publications by U.S.

Department of Agriculture, the total crop receipts is projected to decline 2.5% year-over-year and a cumulative decline of approximately 16% since the peak levels reached in 2022.

federal government recently imposed significant tariffs on imports from a broad range of countries.

5 unchanged sentences

Some analysts have also cautioned that prolonged disruptions to global trade could increase the risk of broader macroeconomic challenges, including the possibility of a recession.

For the first quarter of fiscal 2026, our net loss was $13.2 million, or $0.58 per diluted share, compared to a fiscal 2025 first quarter net income of $9.4 million, or $0.41 per diluted share.

For the second quarter of fiscal 2026, our net loss was $6.0 million, or $0.26 per diluted share, compared to a fiscal 2025 second quarter net loss of $4.3 million, or $0.19 per diluted share.

Significant factors impacting the quarterly comparisons were:

• Revenue in the first quarter of fiscal 2026 decreased by 5.5% compared to the first quarter of fiscal 2025.

The revenue decrease was led by softening of demand for equipment purchases due to the expected decline of net farm income this growing season.

• Gross profit margin decreased to 15.3% for the first quarter of fiscal 2026, as compared to 19.4% for the first quarter of fiscal 2025.

The decrease in gross profit margin is due to lower equipment margins, driven by softer retail demand and elevated inventory levels across the industry.

• Revenue in the second quarter of fiscal 2026 decreased by 13.8% compared to the second quarter of fiscal 2025.

The revenue decrease was led by softening of demand for equipment purchases due to decline in total crop receipts over the past few years which is expected to continue in 2025.

• Gross profit margin decreased to 17.1% for the second quarter of fiscal 2026, as compared to 17.7% for the second quarter of fiscal 2025.

The decrease was primarily related to an equipment gross profit margin decrease from 9.2% in the second quarter of fiscal 2025 to 6.6% in the second quarter of fiscal 2026, this was partially offset by a shift in gross profit mix to higher margin parts and service sales.

• Floorplan interest expense decreased by $2.4 million in the second quarter of fiscal 2026 as compared to the same period in fiscal 2025.

The decrease is primarily due to lower interest-bearing inventory levels as well as a lower variable interest rates.

• Interest and other income (expense) increased $9.7 million in the second quarter of fiscal 2026 as compared to the same period in fiscal 2025, primarily due to a non-cash sale-leaseback financing expense of $11.2 million related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms which negatively impacted fiscal 2025 expense.

Critical Accounting Policies and Estimates

27 unchanged sentences

Segment information is provided later in the discussion and analysis of our results of operations.

Additional information regarding our segments is included in Note 17, Business Segment and Geographic Information, in Item 1.

Additional information regarding our segments is included in Note 17, Business Segment and Geographic Information, to our Condensed Consolidated Financial Statements in Item 1 of Part 1 of this Quarterly report.

Comparative financial data for each of our four sources of revenue are expressed below.

Three Months Ended April 30,

(dollars in thousands)

Three Months Ended July 31, Six Months Ended July 31,

2025 2024 2025 2024

(dollars in thousands) (dollars in thousands)

Revenue $ 376,262 $ 465,233 $ 813,102 $ 933,322

16 unchanged sentences

The following table sets forth our statements of operations data expressed as a percentage of total revenue for the periods indicated:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2025 2024 2025 2024

Equipment 68.9 % 73.4 % 71.3 % 73.9 %

6 unchanged sentences

Operating Expenses 17.0 % 15.0 % 16.6 % 15.4 %

(Loss) Income from Operations (1.0) % 3.6 %

Impairment of Goodwill — % 0.1 % — % — %

Impairment of Intangible and Long-Lived Assets 0.1 % 0.1 % 0.1 % 0.1 %

Income (Loss) from Operations 0.1 % 2.5 % (0.4) % 3.0 %

Other Expense (1.6) % (3.2) % (1.8) % (2.4) %

2 unchanged sentences

Net (Loss) Income (1.1) % (0.7) % (1.7) % 0.4 %

Three Months Ended April 30, 2025 Compared to Three Months Ended April 30, 2024

Three Months Ended July 31, 2025 Compared to Three Months Ended July 31, 2024

Consolidated Results

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

5 unchanged sentences

Total Revenue $ 546,426 $ 633,674 $ (87,248) (13.8) %

Total revenue for the first quarter of fiscal 2026 declined by 5.5% or $34.4 million compared to the first quarter of fiscal 2025 primarily due to challenging industry conditions such as decreases in agricultural commodity prices and projected net farm income which have a negative effect on customer sentiment.

Further, February 2025 U.S.

Department of Agriculture publications estimated calendar year 2024 net farm income to have decreased by 23.6% compared to 2022.

Three Months Ended April 30, Increase/ Percent

Total revenue for the second quarter of fiscal 2026 decreased by 13.8%, or $87.2 million, compared to same period last year.

The decrease was primarily attributable to challenging industry conditions, including decreases in agricultural commodity prices and projected total crop receipts, which negatively impacted customer sentiment.

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

17 unchanged sentences

Total Gross Profit Mix 100.0 % 100.0 %

Gross profit for the first quarter of fiscal 2026 decreased 25.3% or $30.8 million, as compared to the same period last year.

Gross profit margin declined to 15.3% in the current quarter from 19.4% in the prior year quarter.

The decrease in gross profit margin was primarily due to lower equipment margins, driven by softer retail demand and the Company's initiatives to manage inventory to targeted levels.

Our Company-wide absorption rate decreased to 75.5% for the first quarter of fiscal 2026 compared to 77.1% during the same period last year.

The decrease in our absorption rate was primarily due to lower gross profit in the first quarter of fiscal 2026 compared to the same period last year.

Gross profit for the second quarter of fiscal 2026 decreased 16.7%, or $18.7 million, compared to the same period last year.

Gross profit margin declined to 17.1% in the current quarter compared to 17.7% in the prior year quarter.

The decrease was primarily due to lower equipment margins driven by softer retail demand and the Company’s initiatives to manage inventory to targeted levels.

Our Company-wide absorption rate increased to 83.1% for the second quarter of fiscal 2026 compared to 80.8% during the same period last year.

The increased rate was primarily due to reduced operating expenses and impairment of long lived and intangible assets compared to same period last year.

Operating Expenses

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

2 unchanged sentences

Operating Expenses as a Percentage of Revenue 17.0 % 15.0 % 2.0 % 13.3 %

Our operating expenses in the first quarter of fiscal 2026 decreased 2.8% as compared to the first quarter of fiscal 2025.

The decrease was primarily driven by lower variable expenses associated with the year-over-year decline in revenue and profitability.

Operating expenses as a percentage of revenue increased to 16.2% in the first quarter of fiscal 2026 from 15.8% in the first quarter of fiscal 2025.

Our operating expenses in the second quarter of fiscal 2026 decreased 2.6% as compared to the same period last year.

The decrease was led by lower variable expenses associated with the year-over-year decline in revenue and profitability due to challenging industry fundamentals, as well as management's expense reduction efforts.

Operating expenses as a percentage of revenue increased to 17.0% in the second quarter of fiscal 2026 from 15.0% in the second quarter of fiscal 2025.

Impairment Charges

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Impairment of Intangible and Long-Lived Assets $ 266 $ — n/m n/m

Impairment of Goodwill $ — $ 531 $ (531) n/m

Impairment of Intangible and Long-Lived Assets $ 323 $ 942 $ (619) (65.7) %

*n/m - not meaningful

In the first quarter of fiscal 2026, we recognized $0.3 million in impairment expense related to other intangible and long-lived assets in our Agriculture segment.

In the second quarter of fiscal 2026, we recognized $0.3 million in impairment expense related to long-lived assets in our Agriculture segment.

In the second quarter of fiscal 2025, we recognized $0.5 million in impairment expense related to goodwill assets and $0.9 million in impairment expense related to other intangible and long-lived assets in our German reporting unit which is included in our Europe segment.

Other Income (Expense)

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Interest and other income (expense) $ (488) $ (288) $ 200 69.4 %

Interest and other income (expense) $ 2,638 $ (7,048) $ 9,686 n/m

Floorplan interest expense $ (6,812) $ (9,218) $ (2,406) (26.1) %

Other interest expense $ (4,724) $ (3,734) $ 990 26.5 %

The decrease in floorplan interest expense for the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025 was primarily due to a lower level of interest-bearing inventory.

The increase in other interest expense in the first quarter of fiscal 2026 is the result of an increased amount of long-term debt outstanding resulting from the Company's acquisition of previously leased facilities in fiscal 2025 as well as an increase in facilities being financed with finance leases.

*n/m - not meaningful

Interest and other income (expense) improved in the second quarter of fiscal 2026 compared to the same period last year primarily due to an $11.2 million non-cash, sale-leaseback finance modification expense related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms that negatively impacted fiscal 2025 expense.

Floorplan interest expense decreased in the second quarter of fiscal 2026 compared to the same period last year due to lower interest-bearing inventory levels as well as a lower variable interest rates.

(Benefit) Provision for Income Taxes

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

1 unchanged sentence

(Benefit) Provision for Income Taxes

$ (4,078) $ 3,345 $ (7,423) (221.9) %

Our effective tax rate was 23.6 % and 26.2 % for the three months ended April 30, 2025 and 2024, respectively.

The effective tax rate for the three months ended April 30, 2025 and 2024, is subject to variation of the impact of certain discrete items, mainly the vesting of share-based compensation, the mix of domestic and foreign income and the impact of the recognition of valuation allowance on our foreign deferred tax assets.

$ (2,236) $ 54 $ (2,290) n/m

*n/m - not meaningful

Our effective tax rate was 27.1 % and 1.3 % for the three months ended July 31, 2025 and 2024, respectively.

The effective tax rate in both periods was impacted by several items, including the vesting of share-based compensation, the mix of domestic and foreign income, and the recognition of valuation allowances on foreign deferred tax assets.

Segment Results

2 unchanged sentences

Revenue between segments is immaterial.

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

7 unchanged sentences

Agriculture $ (12,295) $ 635 $ (12,930) n/m

Construction (4,180) 268 (4,448) n/m

Construction (1,216) (4,893) 3,677 75.1 %

Europe 5,147 (2,270) 7,417 n/m

Australia (2,107) 1,362 (3,469) n/m

Segment (Loss) Income Before Income Taxes (10,471) (5,166) (5,305) (102.7) %

Shared Resources 2,235 916 1,319 144.0 %

Total $ (8,236) $ (4,250) $ (3,986) (93.8) %

*n/m - not meaningful

Agriculture segment revenue for the second quarter of fiscal 2026 decreased 18.5% compared to the same period last year, which was primarily driven by a decrease in equipment revenue.

This decrease resulted from challenging industry conditions, such as lower agricultural commodity prices and projected total crop receipts, which negatively affected customer sentiment in the second quarter of fiscal 2026, as compared to the same period in the prior year.

Changes in actual or anticipated crop receipts and farmer profitability generally have a direct correlation with the retail demand for equipment.

Agriculture segment loss before income taxes for the second quarter of fiscal 2026 was $12.3 million compared to income before income taxes of $0.6 million for the second quarter of fiscal 2025.

The decrease in gross profit is primarily due to lower sales, which is being driven by softening demand, and lower equipment margins.

The second quarter of fiscal 2025 was also impacted by a $6.1 million non-cash, sale-leaseback finance modification expense related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms.

Construction segment revenue for the second quarter of fiscal 2026 decreased 10.2% compared to the same period last year.

Our Construction segment loss before income taxes was $1.2 million for the second quarter of fiscal 2026 compared to $4.9 million in the second quarter of fiscal 2025.

The increase in the segment results was primarily due to a $5.1 million non-cash, sale-leaseback finance modification expense that negatively impacted fiscal 2025.

The dollar utilization of our rental fleet decreased from 24.7% in the second quarter of fiscal 2025 to 22.4% in the second quarter of fiscal 2026.

Europe segment revenue for the second quarter of fiscal 2026 increased 44.0% compared to the same period last year.

The increase in revenue resulted from an increase in equipment demand, which was driven by a stronger than expected response to European Union stimulus programs in Romania.

Our Europe segment income before income taxes was $5.1 million for the second quarter of fiscal 2026 compared to loss before income taxes $2.3 million in the second quarter of fiscal 2025.

The increase in segment pre-tax income was primarily the result of increased equipment sales as noted above.

Australia segment revenue for the second quarter of fiscal 2026 decreased 50.1% compared to the same period last year.

The decrease was driven by the normalization of sprayer deliveries in fiscal 2026 after having caught up on a multi-year backlog of deliveries during fiscal 2025.

Our Australia segment loss before income taxes was $2.1 million for the second quarter of fiscal 2026 compared to income before income taxes of $1.4 million in the second quarter of fiscal 2025.

Shared Resources/Eliminations

We incur centralized expenses/income at our general corporate level, which we refer to as “Shared Resources,” and then allocate most of these net expenses to our segments.

Since these allocations are set early in the year, unallocated balances may occur.

Shared Resources income before income taxes was $2.2 million for the second quarter of fiscal 2026 compared to $0.9 million for the same period last year.

Six Months Ended July 31, 2025 Compared to Six Months Ended July 31, 2024

Consolidated Results

Six Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Equipment $ 813,102 $ 933,322 $ (120,220) (12.9) %

Parts 214,851 218,032 (3,181) (1.5) %

Service 92,817 92,346 471 0.5 %

Rental and other 19,993 18,676 1,317 7.1 %

Total Revenue $ 1,140,763 $ 1,262,376 $ (121,613) (9.6) %

Total revenue for the first six months of fiscal 2026 decrease by 9.6%, or $121.6 million, compared to same period last year.

Six Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Equipment $ 54,347 $ 98,846 $ (44,499) (45.0) %

Parts 67,198 70,642 (3,444) (4.9) %

Service 58,728 59,426 (698) (1.2) %

Rental and other 4,307 5,218 (911) (17.5) %

Total Gross Profit $ 184,580 $ 234,132 $ (49,552) (21.2) %

Gross Profit Margin

Equipment 6.7 % 10.6 % (3.9) % (36.8) %

Parts 31.3 % 32.4 % (1.1) % (3.4) %

Service 63.3 % 64.4 % (1.1) % (1.7) %

Rental and other 21.5 % 27.9 % (6.4) % (22.9) %

Total Gross Profit Margin 16.2 % 18.5 % (2.3) % (12.4) %

Gross Profit Mix

Equipment 29.4 % 42.2 % (12.8) % (30.3) %

Parts 36.4 % 30.2 % 6.2 % 20.5 %

Service 31.8 % 25.4 % 6.4 % 25.2 %

Rental and other 2.4 % 2.2 % 0.2 % 9.1 %

Total Gross Profit Mix 100.0 % 100.0 %

Gross profit decreased 21.2%, or $49.6 million, for the first six months of fiscal 2026, as compared to the same period last year.

Gross profit margin also decreased to 16.2% in the first six months of fiscal 2026 from 18.5% in the same period last year.

The decrease was primarily due to lower equipment margins driven by softer retail demand and the Company’s initiatives to manage inventory to targeted levels.

For the first six months of fiscal 2026, the Company-wide absorption rate was 79.3%, consistent with 79.0% for the first six months of fiscal 2025.

Operating Expenses

Six Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Operating Expenses $ 189,065 $ 194,314 $ (5,249) (2.7) %

Operating Expenses as a Percentage of Revenue 16.6 % 15.4 % 1.2 % 7.8 %

Our operating expenses for the first six months of fiscal 2026 decreased $5.2 million as compared to same period last year.

Operating expenses as a percentage of revenue increased to 16.6% in the first six months of fiscal 2026 from 15.4% in the first six months of fiscal 2025.

Impairment Charges

Six Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Impairment of Goodwill $ — $ 531 $ (531) n/m

Impairment of Intangible and Long-Lived Assets $ 589 $ 942 $ (353) (37.5) %

*n/m = Not Meaningful

In the first six months of fiscal 2026, we recognized $0.6 million in impairment expense related to long-lived assets in our Agriculture segment.

In the for the first six months of fiscal 2025, we recognized $0.5 million impairment expense related to goodwill assets and $0.9 million impairment expense related to other intangible and long-lived assets in our German reporting unit which is included in our Europe segment.

Other Income (Expense)

Six Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Interest and other income (expense) $ 2,149 $ (7,335) $ 9,484 n/m

Floorplan interest expense (13,338) (16,282) (2,944) 18.1 %

Other interest expense (9,256) (6,193) 3,063 (49.5) %

*n/m = Not Meaningful

Interest and other income (expense) improved in the first six months of fiscal 2026 compared to the same period last year primarily due to an $11.2 million non-cash, sale-leaseback finance modification expense related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms which negatively impacted fiscal 2025 expense.

Floorplan interest expense decreased in the first six months of fiscal 2026 compared to the same period last year due to lower interest-bearing inventory levels.

Provision (Benefit) for Income Taxes

Six Months Ended July 31, Increase/ Percent

2025 2024 Decrease Change

(dollars in thousands)

Provision for Income Taxes $ (6,315) $ 3,399 $ (9,714) n/m

*n/m = Not Meaningful

Our effective tax rate was 24.7% and 39.8% for the six months ended July 31, 2025 and 2024, respectively.

The effective tax rate in both periods was impacted by discrete items, including the vesting of share-based compensation, the mix of domestic and foreign income, and the recognition of valuation allowances on foreign deferred tax assets.

Segment Results

Certain financial information for our Agriculture, Construction, Europe and Australia business segments is presented below.

“Shared Resources” in the table below refers to the various unallocated income/(expense) items that we have retained at the general corporate level.

Revenue between segments is immaterial.

Six Months Ended July 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Agriculture $ 730,141 $ 871,721 $ (141,580) (16.2) %

Construction 144,117 151,683 (7,566) (5.0) %

Europe 191,975 133,254 58,721 44.1 %

Australia 74,530 105,718 (31,188) (29.5) %

Segment (Loss) Income Before Income Taxes (12,808) 14,177 (26,985) n/m

Shared Resources (4,474) (1,391) (3,083) (221.6) %

Total $ 1,140,763 $ 1,262,376 $ (121,613) (9.6) %

(Loss) Income Before Income Taxes

Agriculture $ (25,075) $ 13,680 $ (38,755) n/m

Construction (5,393) (4,625) (768) (16.6) %

Europe 9,857 (919) 10,776 n/m

Australia (2,669) 876 (3,545) n/m

Segment Income Before Income Taxes (23,280) 9,012 (32,292) n/m

Shared Resources (2,239) (477) (1,762) n/m

Total $ (25,519) $ 8,535 $ (34,054) n/m

*n/m = Not Meaningful

Agriculture segment revenue for the first quarter of fiscal 2026 decreased 14.1% compared to the first quarter of fiscal 2025, primarily driven by a decrease in equipment revenue, which resulted from challenging industry conditions, such as decreases in agricultural commodity prices and projected net farm income, which negatively affected customer sentiment in the first quarter of fiscal 2026, as compared to the same period in the prior year.

Changes in actual or anticipated net farm income generally have a direct correlation with the retail demand for equipment.

Agriculture segment loss before income taxes for the first quarter of fiscal 2026 was $12.8 million compared to income of $13.0 million before income taxes for the first quarter of fiscal 2025.

Agriculture segment revenue for the first six months of fiscal 2026 decreased 16.2% compared to the same period last year.

The revenue decrease was due to a same-store sales decrease of 16.4% during the first six months of fiscal 2026 as compared to the prior year period.

The same-store sales decrease was due to a decrease in equipment revenue resulting from challenging industry conditions, such as decreases in agricultural commodity prices and projected total crop receipts, which negatively affected customer sentiment in fiscal 2026, as compared to the same period in the prior year.

Changes in actual or anticipated crop receipts and farmer profitability generally have a direct correlation with retail demand for equipment.

Agriculture segment loss before income taxes was $25.1 million for the first six months of fiscal 2026 compared to income before income taxes $13.7 million over the first six months of fiscal 2025.

The decrease in gross profit is primarily due to lower sales, which is being driven by softening demand, and lower equipment margins.

Construction segment revenue for the first quarter of fiscal 2026 increased 0.9% compared to the first quarter of fiscal 2025.

Our Construction segment loss before income taxes was $4.2 million for the first quarter of fiscal 2026 compared to $0.3 million income before income taxes in the first quarter of fiscal 2025.

The fiscal 2025 period was also impacted by a $6.1 million non-cash, sale-leaseback finance modification expense related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms.

Construction segment revenue for the first six months of fiscal 2026 decreased 5.0% compared to the same period last year.

Our Construction segment loss before income taxes was $5.4 million for the first six months of fiscal 2026 compared to $4.6 million income before income taxes in the first six months of fiscal 2025.

The decrease in segment results was primarily related to lower equipment margins compared to same period last year.

Additionally, the dollar utilization of our rental fleet decreased from 21.7% in the first quarter of fiscal 2025 to 20.1% in the first quarter of fiscal 2026.

Europe segment revenue was $93.9 million for the first quarter of fiscal 2026 compared to $65.1 million in the first quarter of fiscal 2025.

The increase in revenue resulted from an increase in equipment demand, which was driven by a stronger than expected response to European Union stimulus programs in Romania.

Our Europe segment income before income taxes was $4.7 million for the first quarter of fiscal 2026 compared to $1.4 million in the first quarter of fiscal 2025.

The fiscal 2025 period was also impacted by a $5.1 million non-cash, sale-leaseback finance modification expense related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms.

Additionally, the dollar utilization of our rental fleet decreased from 23.2% in the first six months of fiscal 2025 to 21.2% in the first six months of fiscal 2026.

Europe segment revenue for the first six months of fiscal 2026 increased 44.1% compared to the same period last year.

The increase in revenue resulted from an increase in equipment demand, which was driven by a strong response to European Union stimulus programs in Romania.

Our Europe segment income before income taxes was $9.9 million for the first six months of fiscal 2026 compared to loss before income taxes of $0.9 million for the same period last year.

The increase in segment pre-tax income was primarily the result of increased equipment sales as noted above.

Australia segment revenue was $44.0 million for the first quarter of fiscal 2026 compared to $44.4 million in the first quarter of fiscal 2025.

Our Australia segment loss before income taxes was $0.6 million for the first quarter of fiscal 2026 compared to $0.5 million in the first quarter of fiscal 2025.

Australia segment revenue for the first six months of fiscal 2026 decreased 29.5% compared to the same period last year.

The decrease was driven by the normalization of sprayer deliveries in fiscal 2026 after having caught up on a multi-year backlog of deliveries during fiscal 2025.

Our Australia segment loss before income taxes was $2.7 million for the second quarter of fiscal 2026 compared to income before income taxes of $0.9 million in the second quarter of fiscal 2025.

Shared Resources/Eliminations

We incur centralized expenses/income at our general corporate level, which we refer to as “Shared Resources,” and then allocate most of these net expenses to our segments.

Since these allocations are set early in the year, unallocated balances may occur.

Shared Resources loss before income taxes was $4.5 million for the first quarter of fiscal 2026 compared to $1.4 million for the same period last year.

Since these allocations are set early in the year, and a portion is planned to be unallocated, unallocated balances may occur.

Shared Resources loss before income taxes was $2.2 million for the first six months of fiscal 2026 compared to $0.5 million for the same period last year.

Liquidity and Capital Resources

2 unchanged sentences

We expect these sources of liquidity to be sufficient to fund our working capital requirements, acquisitions, capital expenditures and other investments in our business, service our debt, pay our tax and lease obligations and other commitments and contingencies, and meet any seasonal operating requirements for the foreseeable future.

However, our borrowing capacity under our floorplan and other credit facilities is dependent on compliance with various covenants as further described in the “Risk Factors” section and Note 8 to our Condensed Consolidated Financial Statement contained in our Annual Report on Form 10-K.

Equipment Inventory and Floorplan and Working Capital Payable Credit Facilities

As of April 30, 2025, the Company had floorplan payable lines of credit for equipment purchases totaling $1.5 billion, which is primarily comprised of a $875.0 million credit facility with CNH, a $390.0 million floorplan payable line and a $110.0 million working capital line of credit under the Bank Syndicate Agreement, and a $80.0 million credit facility with DLL Finance.

Our equipment inventory turnover decreased from 2.0 times for the rolling 12 month period ended April 30, 2024 to 1.7 times for the rolling 12 month period ended April 30, 2025.

The decrease in equipment turnover was attributable to an increase in equipment inventory over the rolling 12 month period ended April 30, 2025 and a decline in demand for equipment purchases.

Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, decreased to 21.2% as of April 30, 2025 from 25.9% as of January 31, 2025.

However, our borrowing capacity under our floorplan and other credit facilities is dependent on compliance with various covenants as further described in the “Risk Factors” section and Note 8, Floorplan Payable/Lines of Credit, to our Condensed Consolidated Financial Statements contained in our Annual Report on Form 10-K for fiscal 2025.

Floorplan and Working Capital Payable Credit Facilities and Equipment Inventory

As of July 31, 2025, the Company had floorplan payable lines of credit for equipment purchases totaling $1.5 billion, which is primarily comprised of a $875.0 million credit facility with CNH, a $390.0 million floorplan payable line and a $110.0 million working capital line of credit under the Bank Syndicate Agreement, and a $80.0 million credit facility with DLL Finance.

Our equipment inventory turnover was 1.7 times for the rolling 12 month period ended July 31, 2024 and July 31, 2025.

Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, decreased to 16.9% as of July 31, 2025 from 25.9% as of January 31, 2025.

Adequacy of Capital Resources

1 unchanged sentence

Based on our current operational performance, we believe our cash flow from operations, available cash and available borrowing capacity under our existing credit facilities will adequately provide for our liquidity needs for, at a minimum, the next 12 months.

During fiscal 2025, we received various letters from CNH and DLL Finance that waived the consolidated fixed charge coverage ratio covenant for the periods through January 31, 2026, and therefore as of April 30, 2025, we were not subject to this financial covenant under our CNH and DLL Finance credit agreements.

We were also not subject to the fixed charge coverage ratio covenant under the Bank Syndicate Agreement as our adjusted excess availability plus eligible cash collateral (as defined therein) was not less than 15% of the lesser of (i) aggregate borrowing base and (ii) maximum credit amount as of April 30, 2025.

During fiscal 2025, we received various letters from CNH and DLL Finance that waived the consolidated fixed charge coverage ratio covenant for the periods through January 31, 2026, and therefore as of July 31, 2025, we were not subject to this financial covenant under our CNH and DLL Finance credit agreements.

The financial covenants also require us to maintain an adjusted debt to tangible net worth ratio of 3.5, which is measured on a quarterly basis.

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Cash Flow Provided by (Used for) Operating Activities

Net cash provided by operating activities was $6.2 million for the first three months of fiscal 2026, compared to net cash used for operating activities of $32.4 million for the three months ended April 30, 2024.

The change in cash from operating

activities was primarily attributable to changes in inventory and a changing mix in floorplan financing, which was partially offset by a decrease in net income for the first three months of fiscal 2026 compared to the prior year period.

Net cash provided by operating activities was $49.9 million for the first six months of fiscal 2026, compared to net cash used for operating activities of $47.4 million for the six months ended July 31, 2024.

The change in cash from operating activities was primarily attributable to changes in inventory and a changing mix in floorplan financing, which was partially offset by a decrease in net income for the first six months of fiscal 2026 compared to the prior year period.

Cash Flow Used for Investing Activities

Net cash used for investing activities was $5.2 million for the first three months of fiscal 2026, compared to $12.9 million for the first three months of fiscal 2025.

The decrease in net cash used for investing activities was primarily due to a decrease of purchases of property and equipment compared to the prior year period.

Net cash used for investing activities was $24.9 million for the first six months of fiscal 2026, compared to $21.5 million for the first six months of fiscal 2025.

The increase in net cash used for investing activities was primarily due to the Farmers Implement and Irrigation acquisition in the second quarter of fiscal 2026 and partially offset by the decrease of purchases of property and equipment compared to the prior year period.

Cash Flow (Used for) Provided by Financing Activities

Net cash used for financing activities was $15.8 million for the first three months of fiscal 2026 compared to net cash provided by financing activities $43.1 million for the first three months of fiscal 2025.

The change in cash from financing activities was primarily driven by lower non-manufacturing floorplan payables during the first three months of fiscal 2026.

Net cash used for financing activities was $30.0 million for the first six months of fiscal 2026 compared to net cash provided by financing activities of $62.4 million for the first six months of fiscal 2025.

The change in cash from financing activities was primarily driven by lower non-manufacturing floorplan payables during the first six months of fiscal 2026.

Information Concerning Off-Balance Sheet Arrangements

As of April 30, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As of July 31, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Therefore, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

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The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements.

Forward-looking statements are contained in this Quarterly Report on Form 10-Q, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in our Annual Report on Form 10-K for the year ended January 31, 2025, and in other materials filed by the Company with the Securities and Exchange Commission (and included in oral statements or other written statements made by the Company).

Forward-looking statements are contained in this Quarterly Report on Form 10-Q, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in our Annual Report on Form 10-K for the year ended January 31, 2025, and in other materials filed by the Company with the SEC (and included in oral statements or other written statements made by the Company).

Forward-looking statements are statements based on future expectations and specifically may include, among other things, the impact of farm income levels on customer demand for agricultural equipment and services, the general market conditions of the agricultural and construction industries, equipment inventory levels and our ability to manage inventory down to target levels and the effects of these actions on future results, and our primary liquidity sources being sufficient to meet future business needs for the foreseeable future, and the adequacy of our capital resources to provide for our liquidity needs for the next 12 months.

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These forward-looking statements involve important risks and uncertainties that could significantly affect anticipated results or outcomes in the future and, accordingly, actual results or outcomes may differ from those expressed in any forward-looking statements made by or on behalf of the Company.

These risks and uncertainties include, but are not limited to, the impact of the Russia-Ukraine conflict on our Ukrainian operations, our ability to successfully integrate and realize growth opportunities and synergies in connection with the O'Connors acquisition, the risk that we have assumed unforeseen or other liabilities in connection with the O'Connors acquisition, the impact of those conditions and obligations imposed on us under the CaseIH dealer agreements entered into in connection with our acquisition of the Heartland companies', commercial application equipment business, our substantial dependence on CNH, including CNH's ability to design, manufacture and allocate inventory to our stores in quantities necessary to satisfy our customer's demands, disruptions of supply chains and associated impacts on the Company's supply vendors and their ability to provide the Company with sufficient and timely inventory to meet customer demand, adverse market conditions in the agricultural and construction equipment industries, and those matters identified and discussed under the section titled “Risk Factors” in our Annual Report on Form 10-K.

These risks and uncertainties include, but are not limited to, our ability to reduce inventory levels and improve profitability, the impact of the Russia-Ukraine conflict on our Ukrainian operations, our ability to successfully integrate and realize growth opportunities and synergies in connection with the O'Connors acquisition, the risk that we have assumed unforeseen or other liabilities in connection with the O'Connors acquisition, the impact of those conditions and obligations imposed on us under the CaseIH dealer agreements entered into in connection with our acquisition of the Heartland companies' commercial application equipment business, our substantial dependence on CNH, including CNH's ability to design, manufacture and allocate inventory to our stores in quantities necessary to satisfy our customer's demands, disruptions of supply chains and associated impacts on the Company's supply vendors and their ability to provide the Company with sufficient and timely inventory to meet customer demand, adverse market conditions in the agricultural and construction equipment industries, and those matters identified and discussed under the section titled “Risk Factors” in our Annual Report on Form 10-K for fiscal 2025.

In addition to those matters, there may exist additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that may materially adversely affect our business, financial condition or results of operations and may cause results to differ materially from those contained in any forward-looking statement.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis