What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-12-04 compared with 2025-09-04 · 120 added, 118 removed, 249 unchanged (49% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

We own and operate a network of full service agricultural and construction equipment stores in the United States, Australia, and Europe.

14 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 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.

For the third quarter of fiscal 2026, our net income was $1.2 million, or $0.05 per diluted share, compared to a fiscal 2025 third quarter net income of $1.7 million, or $0.07 per diluted share.

Significant factors impacting the quarterly comparisons were:

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

• Revenue in the third quarter of fiscal 2026 decreased by 5.2% compared to the third 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.

• Gross profit margin increased to 17.2% for the third quarter of fiscal 2026, as compared to 16.3% for the third quarter of fiscal 2025.

The increase was primarily related to an equipment gross profit margin increase from 7.4% in the third quarter of fiscal 2025 to 8.1% in the third quarter of fiscal 2026, which was impacted by a $3.7 million benefit recognized on the expected achievement of annual manufacturer incentive programs.

No such accrual was recorded in third quarter of fiscal 2025.

• Floorplan interest expense decreased by $3.8 million in the third 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 lower variable interest rates.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are included in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

Our critical accounting policies and estimates are included in Item7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

There have been no changes in our critical accounting policies and estimates since January 31, 2025.

17 unchanged sentences

We believe that inventory turnover is an important management metric in evaluating the efficiency at which we are managing and selling our inventories.

Same-Store Results

Same-Store Sales

Same-store sales for any period represent sales by stores that were part of the Company for the entire comparable period in the current and preceding fiscal years.

5 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, 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 July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2025 2024 2025 2024

18 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 July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2025 2024 2025 2024

7 unchanged sentences

Operating Expenses 15.6 % 14.5 % 16.2 % 15.1 %

Impairment of Goodwill — % 0.1 % — % — %

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

1 unchanged sentence

Other Expense (1.2) % (1.6) % (1.6) % (2.1) %

(Loss) Income Before Income Taxes (1.5) % (0.7) % (2.2) % 0.7 %

(Benefit) Provision for Income Taxes (0.4) % — % (0.6) % 0.3 %

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

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

Income (Loss) Before Income Taxes 0.4 % — % (1.3) % 0.5 %

Provision (Benefit) for Income Taxes 0.2 % (0.2) % (0.3) % 0.1 %

Net Income (Loss) 0.2 % 0.3 % (1.0) % 0.4 %

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

Consolidated Results

Three Months Ended July 31, Increase/ Percent

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

5 unchanged sentences

Total Revenue $ 644,510 $ 679,824 $ (35,314) (5.2) %

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

Total revenue for the third quarter of fiscal 2026 decreased by 5.2%, or $35.3 million, compared to the 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

This was partially offset by Romania increased sales driven by EU subvention funds which stimulated strong demand for certain types of equipment purchases.

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

17 unchanged sentences

Total Gross Profit Mix 100.0 % 100.0 %

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.

Gross profit for the third quarter of fiscal 2026 increased 0.5%, or $0.5 million, compared to the same period last year.

Gross profit margin increased to 17.2% in the current quarter compared to 16.3% in the prior year quarter.

The increase in gross profit margin was primarily driven by a $3.7 million benefit recognized on the expected achievement of annual manufacturer incentive programs.

No such accrual was recorded in the third quarter of fiscal 2025.

Our Company-wide absorption rate was 82.8% for the third quarter of fiscal 2026 compared to 82.5% during the same period last year.

Operating Expenses

Three Months Ended July 31, Increase/ Percent

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

2 unchanged sentences

Operating Expenses as a Percentage of Revenue 15.6 % 14.5 % 1.1 % 7.6 %

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.

Our operating expenses in the third quarter of fiscal 2026 increased 1.7% as compared to the same period last year.

Operating expenses as a percentage of revenue increased to 15.6% in the third quarter of fiscal 2026 from 14.5% in the third quarter of fiscal 2025.

Impairment Charges

Three Months Ended July 31, Increase/ Percent

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

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

Impairment of Intangible and Long-Lived Assets $ 238 $ 264 $ (26) (9.8) %

*n/m - not meaningful

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.

In the third quarter of fiscal 2026, we recognized $0.2 million in impairment expense related to long-lived assets in our Agriculture segment.

In the third quarter of fiscal 2025, we recognized $0.3 million in impairment expense related to other intangible and long-lived assets, of which $0.2 million was within the Agriculture segment and $0.1 million was within the Construction segment.

Other Income (Expense)

Three Months Ended July 31, Increase/ Percent

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

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

Interest and other income (expense) $ 3,442 $ 3,097 $ 345 (11.1) %

Floorplan interest expense $ (6,183) $ (9,993) $ (3,810) (38.1) %

1 unchanged sentence

*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 July 31, Increase/ Percent

Floorplan interest expense decreased in the third 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.

Provision (Benefit) for Income Taxes

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

(Benefit) Provision for Income Taxes

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

Provision (Benefit) for Income Taxes

$ 1,610 $ (1,438) $ 3,048 (212.0) %

*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.

Our effective tax rate was 57.3 % and 522.9 % for the three months ended October 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.

3 unchanged sentences

Revenue between segments is immaterial.

Three Months Ended July 31, Increase/ Percent

Three Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

5 unchanged sentences

Total $ 644,510 $ 679,824 $ (35,314) (5.2) %

(Loss) Income Before Income Taxes

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

Income (Loss) Before Income Taxes

Agriculture $ 6,109 $ 1,876 $ 4,233 225.6 %

Construction (1,715) (941) (774) 82.3 %

1 unchanged sentence

Australia (3,770) (298) (3,472) 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) %

Segment Income (Loss) Before Income Taxes 4,140 (558) 4,698 n/m

Shared Resources (1,332) 833 (2,165) n/m

Total $ 2,808 $ 275 $ 2,533 n/m

*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.

Agriculture segment revenue for the third quarter of fiscal 2026 decreased 12.7% 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 third 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.

Agriculture segment income before income taxes for the third quarter of fiscal 2026 was $6.1 million compared to $1.9 million for the third quarter of fiscal 2025.

The improvement in segment results was led by lower floorplan interest expense and lower operating expenses compared to the prior year.

Construction segment revenue for the third quarter of fiscal 2026 decreased 10.1% compared to the same period last year.

The decrease in revenue was driven by the softening of equipment demand.

Our Construction segment loss before income taxes was $1.7 million for the third quarter of fiscal 2026 compared to $0.9 million in the third quarter of fiscal 2025.

The dollar utilization of our rental fleet decreased from 26.2% in the third quarter of fiscal 2025 to 25.5% in the third quarter of fiscal 2026.

Europe segment revenue for the third quarter of fiscal 2026 increased 87.6% 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 $3.5 million for the third quarter of fiscal 2026 compared to loss before income taxes $1.2 million in the third 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.

Australia segment revenue for the third quarter of fiscal 2026 decreased 40.4% 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.

Our Australia segment loss before income taxes was $3.8 million for the third quarter of fiscal 2026 compared to $0.3 million in the third quarter of fiscal 2025.

Shared Resources/Eliminations

1 unchanged sentence

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

Shared Resources loss before income taxes was $1.3 million for the third quarter of fiscal 2026 compared to income before income taxes $0.8 million for the same period last year.

Nine Months Ended October 31, 2025 Compared to Nine Months Ended October 31, 2024

Consolidated Results

Six Months Ended July 31, Increase/ Percent

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

5 unchanged sentences

Total Revenue $ 1,785,273 $ 1,942,200 $ (156,927) (8.1) %

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

Total revenue for the first nine months of fiscal 2026 decreased by 8.1%, or $156.9 million, compared to same period last year.

Six Months Ended July 31, Increase/ Percent

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

17 unchanged sentences

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.

Gross profit decreased 14.2%, or $49.0 million, for the first nine months of fiscal 2026, as compared to the same period last year.

Gross profit margin also decreased to 16.6% in the first nine months of fiscal 2026 from 17.7% 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 which was partially offset by $3.7 million benefit recognized on the expected achievement of annual manufacturer incentive programs.

For the first nine months of fiscal 2026, the Company-wide absorption rate was 80.5%, consistent with 80.2% for the first nine months of fiscal 2025.

Operating Expenses

Six Months Ended July 31, Increase/ Percent

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

2 unchanged sentences

Operating Expenses as a Percentage of Revenue 16.2 % 15.1 % 1.1 % 7.3 %

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

Our operating expenses for the first nine months of fiscal 2026 decreased $3.5 million as compared to the 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.

Operating expenses as a percentage of revenue increased to 16.2% in the first nine months of fiscal 2026 from 15.1% in the first nine months of fiscal 2025.

Impairment Charges

Six Months Ended July 31, Increase/ Percent

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

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

Impairment of Goodwill $ — $ 531 $ (531) (100.0) %

Impairment of Intangible and Long-Lived Assets $ 827 $ 1,206 $ (379) (31.4) %

*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.

In the first nine months of fiscal 2026, we recognized $0.8 million in impairment expense related to intangibles and long-lived assets, of which $0.7 million was within the Agriculture segment and $0.1 million was within the Construction segment.

In the first nine months of fiscal 2025, we recognized $0.5 million of impairment expense related to goodwill assets in our Europe segment.

In the first nine months of fiscal 2025, we recognized $1.2 million of impairment expense related to other intangible and long-lived assets of which $0.2 million was within the Agriculture segment, $0.1 million was within the Construction segment and $0.9 million was within the Europe segment.

Other Income (Expense)

Six Months Ended July 31, Increase/ Percent

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

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

Interest and other income (expense) $ 5,591 $ (4,239) $ 9,830 (231.9) %

Floorplan interest expense (19,521) (26,275) (6,754) 25.7 %

1 unchanged sentence

*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

Interest and other income (expense) improved in the first nine 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 nine months of fiscal 2026 compared to the same period last year due to lower interest-bearing inventory levels.

Other interest expense increased in the first nine months of fiscal 2026 compared to the same period last year primarily due to the increased in long term debt outstanding from our real estate and vehicle loans.

(Benefit) Provision for Income Taxes

Nine Months Ended October 31, Increase/ Percent

2025 2024 Decrease Change

(dollars in thousands)

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

(Benefit) Provision for Income Taxes $ (4,704) $ 1,959 $ (6,663) 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.

Our effective tax rate was 20.7% and 22.2% for the nine months ended October 31, 2025 and 2024, respectively.

Segment Results

2 unchanged sentences

Revenue between segments is immaterial.

Six Months Ended July 31, Increase/ Percent

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

6 unchanged sentences

(Loss) Income Before Income Taxes

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

Agriculture $ (18,966) $ 15,556 $ (34,522) (221.9) %

Construction (7,110) (5,566) (1,544) 27.7 %

1 unchanged sentence

Australia (6,438) 578 (7,016) n/m

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

Segment (Loss) Income Before Income Taxes (19,141) 8,453 (27,594) n/m

Shared Resources (3,569) 356 (3,925) n/m

1 unchanged sentence

*n/m = Not Meaningful

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.

Agriculture segment revenue for the first nine months of fiscal 2026 decreased 15.0% compared to the same period last year.

The revenue decrease was due to a same-store sales decrease of 15.1% during the first nine 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.

Agriculture segment loss before income taxes was $19.0 million for the first nine months of fiscal 2026 compared to income before income taxes $15.6 million over the first nine 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.

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.

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 fiscal 2025 period was also negatively 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.

This was offset by a $3.7 million benefit recognized on the expected achievement of annual manufacturer incentive programs in the third quarter of fiscal 2026.

The third quarter of the prior year had no such accrual.

Construction segment revenue for the first nine months of fiscal 2026 decreased 6.8% compared to the same period last year.

The decrease in revenue was driven by the softening of equipment demand.

Our Construction segment loss before income taxes was $7.1 million for the first nine months of fiscal 2026 compared to $5.6 million in the first nine months of fiscal 2025.

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

The fiscal 2025 period was also negatively 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 24.2% in the first nine months of fiscal 2025 to 22.6% in the first nine months of fiscal 2026.

Europe segment revenue for the first nine months of fiscal 2026 increased 57.9% 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.

Our Europe segment income before income taxes was $13.4 million for the first nine months of fiscal 2026 compared to loss before income taxes of $2.1 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 for the first six months of fiscal 2026 decreased 29.5% compared to the same period last year.

Australia segment revenue for the first nine months of fiscal 2026 decreased 33.0% 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.

Our Australia segment loss before income taxes was $6.4 million for the third quarter of fiscal 2026 compared to income before income taxes of $0.6 million in the third quarter of fiscal 2025.The decrease in segment pre-tax loss was primarily the result of decrease in revenue as noted above.

Shared Resources/Eliminations

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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.

Shared Resources loss before income taxes was $3.6 million for the first nine months of fiscal 2026 compared to income before income taxes $0.4 million for the same period last year.

Liquidity and Capital Resources

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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, Floorplan Payable/Lines of Credit, to our Condensed Consolidated Financial Statements contained in our Annual Report on Form 10-K for fiscal 2025.

However, our borrowing capacity under our floorplan and other credit facilities is dependent on compliance with various covenants as further described in Item 1A, “Risk Factors,” 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.

As of October 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 1.9 and 1.6 times for the rolling 12 month period ended October 31, 2025 and October 31, 2024, respectively.

Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, decreased to 18.0% as of October 31, 2025 from 25.9% as of January 31, 2025.

Adequacy of Capital Resources

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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 July 31, 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 July 31, 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 October 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 3.5:1.00, 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 $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.

Net cash provided by operating activities was $83.9 million for the first nine months of fiscal 2026, compared to net cash used for operating activities of $56.2 million for the nine months ended October 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 nine months of fiscal 2026 compared to the prior year period.

Cash Flow Used for Investing Activities

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.

Net cash used for investing activities was $17.0 million for the first nine months of fiscal 2026, compared to $29.4 million for the first nine months of fiscal 2025.

The decrease in net cash used for investing activities was primarily due to the decrease of purchases of property and equipment compared to the prior year period and proceeds from business divestitures in the third quarter of fiscal 2026.

This was partially offset by the Farmers Implement and Irrigation acquisition in the second quarter of fiscal 2026.

Cash Flow (Used for) Provided by Financing Activities

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.

Net cash used for financing activities was $55.7 million for the first nine months of fiscal 2026 compared to net cash provided by financing activities of $71.0 million for the first nine months of fiscal 2025.

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

Information Concerning Off-Balance Sheet Arrangements

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.

As of October 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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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