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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-04-07 · 146 added, 137 removed, 377 unchanged (43% of the section changed)

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Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business and expected financial results, includes forward-looking statements that involve risks and uncertainties.

You should review the "Information Regarding Forward-Looking Statements" in this Item 7 and the risks and uncertainties described under Item 1A, Risk Factors, of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis in this Form 10-K.

A discussion of changes in our Financial Results and Cash Flow Comparisons from fiscal year 2023 to fiscal year 2024 has been omitted from this Form 10-K, but may be found in Item 7, 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, 2024, filed with the SEC on April 3, 2024.

You should review the "Information Regarding Forward-Looking Statements" in this Item 7 and the risks and uncertainties described under Part I, Item 1A, Risk Factors, of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis in this Form 10-K.

A discussion of changes in our Financial Results and Cash Flow Comparisons from fiscal 2024 to fiscal 2025 has been omitted from this Form 10-K, but may be found in Item 7, 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, filed with the SEC on April 7, 2025.

BUSINESS DESCRIPTION

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

Based upon information provided to us by CNH Industrial N.V., we are the largest retail dealer of Case IH Agriculture equipment in the world, one of the largest retail dealers of Case Construction equipment in North America and one of the largest retail dealers of New Holland Agriculture and New Holland Construction equipment in the U.S.

Based upon information provided to us by CNH, we are the largest retail dealer of Case IH Agriculture equipment in the world, one of the largest retail dealers of Case Construction equipment in North America and one of the largest retail dealers of New Holland Agriculture and New Holland Construction equipment in the U.S.

We operate our business through four reportable segments:

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Within each segment, we have four principal sources of revenue:

new and used equipment sales, parts sales, service, and equipment rental and other activities.

new and used equipment sales, parts sales, equipment repair and maintenance services and equipment rental and other business activities.

The agricultural equipment we sell and service includes machinery and attachments for uses ranging from large-scale farming to home and garden use.

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• equipment repair and maintenance services;

• equipment rental and other activities.

The new equipment and parts we sell are supplied primarily by CNH Industrial.

According to its public reports, CNH Industrial is a leading manufacturer and supplier of agricultural and construction equipment based on the number of units sold, primarily through the Case IH Agriculture, New Holland Agriculture, Case Construction and New Holland Construction brands.

Sales of new CNH Industrial products accounted for approximately 75% of our new equipment revenue in fiscal 2025, with our single largest manufacturer other than CNH Industrial representing approximately 4% of our total new equipment revenue in fiscal 2025.

• equipment rental and other business activities.

The new equipment and parts we sell are supplied primarily by CNH.

According to its public reports, CNH is a leading manufacturer and supplier of agricultural and construction equipment based on the number of units sold, primarily through the Case IH Agriculture, New Holland Agriculture, Case Construction and New Holland Construction brands.

Sales of new CNH products accounted for approximately 69% of our new equipment revenue in fiscal 2026, with our single largest manufacturer other than CNH representing approximately 3% of our total new equipment revenue in fiscal 2026.

We acquire used equipment for resale primarily through trade-ins from our customers and in some cases through selective purchases.

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Throughout our 45-year operating history, we have built an extensive, geographically contiguous network of 90 full service stores located in the United States, 39 in Europe and 15 in Australia.

We have a history of growth through acquisitions, including over 60 acquisitions with locations in 15 U.S.

We have a history of growth through acquisitions, including completing over 60 acquisitions with locations in 15 U.S.

states, four European countries and three Australian states since January 1, 2003.

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Certain External Factors Affecting our Business

We are subject to a number of factors that affect our business including those factors discussed in this Form 10-K under Item 1A, Risk Factors, and under the heading “Information Regarding Forward-Looking Statements” in this Item 7.

We are subject to a number of factors that affect our business including those factors discussed in this Form 10-K under Part I, Item 1A, Risk Factors , and under the heading “Information Regarding Forward-Looking Statements” in this Item 7.

Certain of these external factors include, but are not limited to, the following:

Russia-Ukraine Geopolitical Conflict

Since the onset of the active conflict in February 2022, most of Titan Machinery Ukraine's customers have been able to continue their work, although at a reduced capacity and schedule.

Since the onset of the Russia-Ukraine conflict in February 2022, most of Titan Machinery's Ukrainian customers have been able to continue their work, although at a reduced capacity and schedule.

The Company's business systems in Ukraine have continued to function but have been, and could continue to be, negatively impacted in the future.

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Agriculture industry factors such as changes in agricultural commodity prices and net farm income, have an effect on our customers' sentiment and their ability to secure financing for equipment purchases.

Macroeconomic and industry factors that affect commodity prices and net farm income include changing worldwide demand for agriculture commodities, crop yields and supply disruptions caused by weather patterns and crop diseases, crop stock levels, production costs, and changing U.S.

Macroeconomic and industry factors that affect commodity prices and net farm income include changes to worldwide demand for agriculture commodities, crop yields and supply disruptions caused by weather patterns and crop diseases, crop stock levels, productio n costs, and changes to U.S.

dollar foreign currency exchange rates.

Based on U.S.

Department of Agriculture ("USDA") publications, the most recent estimate of net farm income for calendar year 2024 decreased 5.6% compared with calendar year 2023.

The commodity prices of corn and soybeans, which are the predominant crops in our Agriculture store footprint, were at or near record prices in fiscal 2023 but declined in fiscal 2024 and have remained depressed in fiscal 2025.

Based on its February 2025 report, the USDA projected net farm income for calendar year 2025 to increase 29.5%, as compared to the estimated results of calendar year 2024.

Based on the February 2026 U.S.

Department of Agriculture ("USDA") publications, the most recent estimate of farm cash receipts for calendar year 2025 is estimated to increase 3.0% compared with calendar y ear 2024.

The USDA projected farm cash receipts for calendar year 2026 to decrease 2.7%, as compared to the estimated results of calendar year 2025.

Our Construction business is primarily impacted by the demand for construction equipment for use in private and government commercial, residential, and infrastructure construction;

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Dependence on our Primary Supplier

The majority of our business involves the distribution and servicing of equipment manufactured by CNH Industrial.

In fiscal 2025, CNH Industrial supplied approximately 75% of our new equipment revenue on a consolidated basis and 76%, 79%, 65% and 74% in our Agriculture, Construction, Europe, and Australia segments, respectively.

CNH Industrial also represented a significant portion of our parts revenue.

The majority of our business involves the distribution and servicing of equipment manufactured by CNH.

In fiscal 2026, CNH supplied approximately 69% of our new equipment revenue on a consolidated basis and 74%, 75%, 57% and 60% in our Agriculture, Construction, Europe, and Australia segments, respectively.

CNH also represented a significant portion of our parts revenue.

Thus, we believe the following factors have a significant impact on our operating results:

• CNH Industrial’s product offerings, reputation and market share;

• CNH Industrial’s product prices and incentive and discount programs;

• CNH Industrial's supply of inventory and ability to match demand levels and delivery timelines;

• CNH Industrial's offering of floorplan payable financing for the purchase of a substantial portion of our inventory;

• CNH Industrial's offering of financing and leasing used by our customers to purchase CNH Industrial equipment from us.

• CNH's product offerings, reputation and market share;

• CNH's product prices and incentive and discount programs;

• CNH's supply of inventory and ability to match demand levels and delivery timelines;

• CNH's offering of floorplan payable financing for the purchase of a substantial portion of our inventory;

• CNH's offering of financing and leasing used by our customers to purchase CNH equipment from us.

Credit Market Changes

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Tight credit markets, a low level of liquidity in many financial markets, and extreme volatility in fixed income, credit, currency and equity markets have the potential to adversely affect our business.

Such disruptions in the overall economy and financial markets and the related reduction in consumer confidence in the economy, slow activity in the capital markets, negatively affect access to credit on commercially acceptable terms, and may adversely impact our customers' access to credit and the terms of any such credit.

However, high retail interest rates negatively impact customer demand due to higher borrowing costs, which makes purchasing equipment less attractive.

Such economic instability and reduced consumer confidence can lead to tighter credit markets, potentially limiting access to capital and negatively impacting the financial terms available to our customers.

High retail interest rates negatively impact customer demand due to higher borrowing costs, which makes purchasing equipment less attractive.

Our business is also particularly dependent on our access to credit markets to manage inventory and finance acquisitions.

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To date, in those instances in which we have experienced cost increases, we have been able to increase selling prices to offset much of the increases and expect to continue to do so in the future.

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

Certain of these tariffs have been invalidated following court challenges and then reimposed under a different authority.

In response, some countries have enacted retaliatory tariffs on U.S.

The amounts, applicability and validity of the tariffs are complex and ever-changing, creating an unstable global trade environment.

Although the overall impact of these trade measures remains uncertain, we recognize the possibility of increases in the wholesale prices that we pay for our equipment and parts inventory.

These higher wholesale prices could compress our margins if we are unable to fully pass on these cost increases to our retail customers.

Additionally, retaliatory tariffs may negatively affect U.S.

agricultural exports, which could have downstream effects on our core customer base in the farming sector.

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.

Significant Items Impacting Our Financial Position and Results of Operations

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The 15 O’Connors store locations are included within our Australia segment.

Heartland Acquisition

On August 1, 2022, we acquired all of the outstanding equity interests of three entities, Heartland Agriculture, LLC, Heartland Solutions, LLC, and Heartland Leveraged Lender, LLC, (collectively referred to as "Heartland Companies").

The acquired business consisted of 12 CaseIH commercial application agriculture locations, in the states of Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Washington, and Wisconsin.

Our acquisition of these entities provides the Company with the opportunity for synergies due to overlap of our footprints, which allows us to package deals that include both commercial application equipment as well as other agricultural and construction equipment to commercial customers within our core footprint.

Total cash consideration paid for the Heartland Companies was $94.4 million, which was financed through available cash resources and line of credit availability.

The 12 Heartland Companies store locations are included within our Agriculture segment.

Key Financial Metrics

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Absorption is an industry term that refers to the percentage of an equipment dealer's operating expense covered by the combined gross profit from parts, service and rental fleet activity.

We calculate absorption by dividing our gross profit from sales of parts, service and rental fleet by our operating expenses, less commission expense on equipment sales, plus interest expense on floorplan payables and rental fleet debt.

We believe that absorption is an important management metric because during economic down cycles our customers tend to postpone new and used equipment purchases while continuing to run, maintain and repair their existing equipment.

Thus, operating at a high absorption rate enables us to operate profitably throughout economic down cycles.

We believe that absorption is an important management metric because during economic downcycles our customers tend to postpone new and used equipment purchases while continuing to run, maintain and repair their existing equipment.

Thus, operating at a high absorption rate enables us to operate profitably throughout economic downcycles.

Dollar Utilization

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Key Financial Statement Components

Our revenue consists of the following components:

• Equipment :

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Cost of Revenue

Our cost of revenue consists of the following components:

Cost of equipment revenue is the lower of the acquired cost or the net realizable value of the specific piece of equipment sold.

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The cost of financing inventory is an important factor affecting our results of operations.

Floorplan payable financing from CNH Industrial Capital, the Bank Syndicate Agreement, DLL Finance and various credit facilities related to our foreign subsidiaries represent the primary sources of financing for equipment inventories.

CNH Industrial regularly offers interest-free periods as well as additional incentives and special offers.

Floorplan payable financing from CNH Capital, the Bank Syndicate Agreement, DLL Finance and various credit facilities related to our foreign subsidiaries represent the primary sources of financing for equipment inventories.

CNH regularly offers interest-free periods as well as additional incentives and special offers.

As of January 31, 2026, 54.0% of our floorplan payable financing was non-interest bearing.

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Information regarding segment revenue and income (loss) before income taxes is presented for each fiscal year following our discussion of the consolidated results of operations.

Additional information regarding our segments is included in Note 21, Segment Information and Operating Results, to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.

Additional information regarding our segments is included in Note 21, Business Segment and Geographic Information , to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data , of this Form 10-K.

Year Ended January 31,

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Operating Expenses 15.9 % 14.5 %

Income from Operations 0.1 % 6.2 %

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

Restructuring Costs 0.1 % — %

(Loss) Income from Operations (0.3) % 0.1 %

Other Income (Expense) (1.5) % (1.9) %

(Loss) Income Before Income Taxes (1.8) % 5.5 %

(Benefit from) Provision for Income Taxes (0.4) % 1.4 %

Net (Loss) Income (1.4) % 4.1 %

Loss Before Income Taxes (1.8) % (1.8) %

Provision (Benefit from) for Income Taxes 0.4 % (0.4) %

Net Loss (2.2) % (1.4) %

Fiscal Year Ended January 31, 2026 Compared to Fiscal Year Ended January 31, 2025

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Total Revenue $ 2,427,107 $ 2,702,122 $ (275,015) (10.2) %

Total revenue for fiscal 2025 decreased by 2.0%, or $56.3 million, compared to fiscal 2024, driven primarily by the decrease in Company-wide same-store sales of 9.1%, which largely offsets the revenue accretion from the O'Connors acquisition completed in October 2023.

Same-store sales were negatively impacted by challenging industry conditions, such as, decreases in agricultural commodity prices and projected net farm income, which have a negative effect on retail demand for

Further, in the February 2025 U.S.

Department of Agriculture publications, calendar year 2024 net farm income was estimated to have decreased by 5.6% compared to 2023, which in turn had declined 19.1% from net farm income in 2022.

Total revenue for fiscal 2026 decreased by 10.2%, or $275.0 million, compared to fiscal 2025.

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

Year Ended January 31, Increase/ Percent

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Gross profit for fiscal 2026 decreased 3.3%, or $13.1 million, as compared to fiscal 2025.

Gross profit margin also decreased to 14.6% in fiscal 2025 from 19.3% in fiscal 2024.

The decrease in gross profit margin for fiscal 2025 was primarily due to lower equipment margins, which are being driven by higher levels of inventory and softening demand.

Our Company-wide absorption rate decreased to 68.0% for fiscal 2025 as compared to 79.2% during fiscal 2024.

The decrease in absorption was primarily driven by increased floorplan interest expense in fiscal 2025 compared to fiscal 2024.

Gross profit margin increased to 15.8% in fiscal 2026 from 14.6% in fiscal 2025.

The increase in gross profit margin for fiscal 2026 was primarily due to higher equipment margins and a change in sales mix, with a greater proportion of revenue earned from parts during fiscal 2026 as compared to fiscal 2025.

Our Company-wide absorption rate increased to 75.2% for fiscal 2026 as compared to 75.0% during fiscal 2025.

Operating Expenses

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Operating Expenses as a Percentage of Revenue 15.9 % 14.4 % 1.5 % 10.4 %

Operating expenses for fiscal 2025 increased by 7.5%, or $27.3 million, as compared to fiscal 2024.

The increase in operating expenses was primarily driven by acquisitions that occurred late in fiscal 2024, which includes the O'Connors acquisition.

Operating expenses for fiscal 2026 decreased by 1.2%, or $4.5 million, as compared to fiscal 2025.

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 15.9% in fiscal 2026 from 14.4% in fiscal 2025.

Impairment Charges

The increase in operating expenses as a percentage of total revenue was due to lower revenue sales caused by challenging industry conditions.

Impairment Charges and Restructuring Costs

Year Ended January 31, Increase/ Percent

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(dollars in thousands)

Impairment of Goodwill $ 531 $ — N/M N/M

Impairment of Intangible and Long-Lived Assets $ 1,311 $ — N/M N/M

Impairment of Goodwill $ — $ 531 $ (531) N/M

Impairment of Intangible and Long-Lived Assets 2,291 1,311 980 74.8 %

Restructuring Costs 1,741 — 1,741 N/M

*N/M = Not Meaningful

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

In fiscal 2026, we recognized $2.3 million of impairment expense related to other intangible and long-lived assets, of which $0.9 million was within the Agriculture segment, $0.1 million was within the Construction segment, $0.7 million was within the Europe segment and $0.5 million was within Shared Resources.

We also recognized $1.7 million of restructuring costs within our Europe segment related to employee severance costs for our Germany liquidation.

In fiscal 2025, we recognized $1.3 million of impairment expense related to other intangible and long-lived assets, of which $0.2 million was within the Agriculture segment, $0.2 million was within the Construction segment and $0.9 million was within the Europe segment.

We also recognized $0.5 million of impairment expense related to goodwill assets in our Europe segment, in fiscal 2025.

Other Income (Expense)

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Other interest expense (18,974) (15,105) 3,869 25.6 %

Interest and other income (expense) for fiscal 2025 decreased by approximately $7.5 million as compared to fiscal 2024.

The decrease in interest and other income (expense) compared to fiscal 2024 was primarily due to a $9.7 million non-cash, sale-leaseback financing expense related to the agreement to purchase 13 of our leased facilities at the end of the respective lease terms and offset by a $3.6 million gain on cancellation of debt in relation to the U.S.

Interest and other income (expense) for fiscal 2026 increased by approximately $8.6 million as compared to fiscal 2025.

The increase in interest and other income (expense) compared to fiscal 2025 was primarily due to a $9.7 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 and partially offset by a $3.6 million gain on cancellation of debt in relation to the U.S.

Treasury Department’s New Market Tax Credit Program.

Floorplan interest expense increased $20.9 million for fiscal 2025, as compared to fiscal 2024, primarily due to a higher level of interest-bearing inventory, including the usage of existing floorplan capacity to finance the O'Connors acquisition in October 2023.

The increase in other interest expense in fiscal 2025 is the result of an increased amount of long term debt outstanding resulting from purchases of previously leased facilities during fiscal 2024 and fiscal 2025 as well as increased borrowing on our CNH Industrial Capital revolving line of credit.

(Benefit from) Provision for Income Taxes

Floorplan interest expense decreased $10.6 million for fiscal 2026, as compared to fiscal 2025, primarily due to lower interest-bearing inventory levels.

The increase in other interest expense in fiscal 2026 is the result of an increased amount of interest coming from finance leases, due to the agreement to purchase several of our leased facilities at the end of the lease term.

Provision for (Benefit from) Income Taxes

Year Ended January 31, Increase/ Percent

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(dollars in thousands)

(Benefit from) Provision for Income Taxes $ (13,074) $ 38,599 $ (51,673) (133.9) %

Our effective tax rate increased from 25.6% in fiscal 2024 to 26.2% in fiscal 2025.

The effective tax rate for each of the years ended January 31, 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.

The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million.

Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024.

As of January 31, 2025, we did not recognize any additional income tax expense for Pillar Two GloBE minimum tax.

The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability.

Provision for (Benefit from) Income Taxes $ 8,767 $ (13,074) $ 21,841 167.1 %

Our effective tax rate changed from 26.2% in fiscal 2025 to 19.3% in fiscal 2026.

The effective tax rate change was primarily driven by recognizing valuation allowances on certain U.S.

federal, state and international deferred tax assets, including net operating losses and non-deductible interest expense with an indefinite carryforward period.

Segment Results

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Europe 377,739 261,005 116,734 44.7 %

Australia 221,115 69,809 151,306 N/M

Australia 180,525 221,115 (40,590) (18.4) %

Total $ 2,427,107 $ 2,702,122 $ (275,015) (10.2) %

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Construction (8,145) (6,652) (1,493) (22.4) %

Europe (3,893) 16,487 (20,380) (123.6) %

Australia 2,889 4,115 (1,226) (29.8) %

Europe 15,187 (3,893) 19,080 N/M

Australia (3,920) 2,889 (6,809) N/M

Segment (loss) income before income taxes (25,735) (47,429) 21,694 45.7 %

Shared Resources (2,556) (8,980) 6,424 (71.5) %

Shared Resources (19,672) (2,556) (17,116) N/M

Total $ (45,407) $ (49,985) $ 4,578 9.2 %

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Agriculture segment revenue for fiscal 2026 decreased 17.5%, or $330.6 million, compared to fiscal 2025.

The revenue decrease was due to a same-store sales decrease of 9.2% during the fiscal 2025 as compared to fiscal 2024.

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 net farm income, which negatively affected customer sentiment in fiscal 2025, as compared to the fiscal 2024.

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

Agriculture segment loss before income taxes was $39.8 million for fiscal 2025 compared to income before income taxes of $121.1 million for fiscal 2024.

The decrease in gross profit is primarily due to lower equipment margins, which are driven by higher levels of inventory and softening demand.

In addition, we recorded a net $5.2 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 and had an increase in our operating expenses and floorplan interest expense.

The revenue decrease was due to a same-store sales decrease of 17.4% during fiscal 2026 as compared to fiscal 2025.

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 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 $28.9 million for fiscal 2026 compared to $39.8 million for fiscal 2025.

The increase in segment results is primarily due to material progress in the Company's inventory reduction and optimization initiatives.

The fiscal 2025 period was also negatively impacted by a net $5.2 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.

Construction segment revenue for fiscal 2026 decreased 6.2%, or $20.5 million, compared to fiscal 2025.

Our Construction segment loss before income taxes was $6.7 million for fiscal 2025 compared to $18.3 million of income before income taxes for fiscal 2024.

The decrease in segment results was due to a $4.5 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, lower equipment gross margins as a result of increased supply and moderately softer demand, and increased floorplan interest expense compared to fiscal 2024.

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

Our Construction segment loss before income taxes was $8.1 million for fiscal 2026 compared to $6.7 million for 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 $4.5 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.

In addition, the dollar utilization of our rental fleet decreased from 23.8% for fiscal 2025 to 23.1% for fiscal 2026.

Europe segment revenue for fiscal 2025 decreased 16.3%, or $50.9 million, compared to fiscal 2024.

The decrease in revenue reflects the softening of new equipment demand caused by a decrease in global agricultural commodity prices, sustained higher interest rates and drought conditions in Eastern Europe which negatively impacted crop yields and grower profitability.

Our Europe segment loss before income taxes was $3.9 million for fiscal 2025 compared to $16.5 million of income before income taxes for fiscal 2024.

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

Additionally, we recorded $0.5 million of impairment expense related to certain goodwill assets and $0.9 million in impairment expense related to other intangible assets and long-lived assets.

We entered the Australian market in October 2023 with our acquisition of O'Connors.

Australia segment revenue for fiscal 2025 was $221.1 million.

Our Australia segment income before income taxes was $2.9 million for fiscal 2025.

Europe segment revenue for fiscal 2026 increased 44.7%, or $116.7 million, compared to fiscal 2025.

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 $15.2 million for fiscal 2026 compared to a loss before income taxes of $3.9 million for fiscal 2025.

The increase in segment pre-tax income was primarily the result of increased equipment sales as noted above, which was partially offset by Germany wind down activities in fiscal 2026.

During fiscal 2026, the Europe segment recorded a waiver of $10.3 million related to an intercompany loan.

A corresponding amount was recorded to Shared Resources and the amounts are eliminated in consolidation.

Australia segment revenue for fiscal 2026 decreased 18.4%, or $40.6 million, compared to fiscal 2025.

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 $3.9 million for fiscal 2026 compared to $2.9 million of income before income taxes for 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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Shared Resources loss before income taxes was $19.7 million for fiscal 2026 compared to $2.6 million for fiscal 2025.

Fiscal 2026 results include the corresponding $10.3 million intercompany amount related to the loan waiver recorded in Europe Segment, which is eliminated at consolidation.

Liquidity and Capital Resources

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Our primary sources of liquidity are cash reserves, cash generated from operations, and borrowings under our floorplan payable and other credit facilities.

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, provided, however, that our borrowing capacity under our credit agreements is dependent on compliance with various financial covenants as further described in Note 8, Floorplan Payable/Lines of Credit , to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.

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, subject, however, to the fact that our borrowing capacity under our credit agreements is dependent on compliance with various financial covenants as further described in Note 8, Floorplan Payable/Lines of Credit , to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data , of this Form 10-K.

As of January 31, 2026, we are in compliance with all such covenants.

We have worked in the past, and will continue to work in the future if necessary, with our lenders to implement satisfactory modifications to these financial covenants when appropriate for the business conditions confronted by us.

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Certain manufacturers from which we purchase new equipment inventory offer financing on these purchases, either offered directly from the manufacturers or through the manufacturers’ captive finance affiliate.

CNH Industrial's captive finance subsidiary, CNH Industrial Capital, also provides financing of used equipment inventory.

CNH's captive finance subsidiary, CNH Capital, also provides financing of used equipment inventory.

We also have floorplan payable balances with non-manufacturer lenders for new and used equipment inventory.

Borrowings and repayments on manufacturer floorplan facilities are reported as operating cash flows, while borrowings and repayments on non-manufacturer floorplan facilities are reported as financing cash flows in our consolidated statements of cash flows.

During the year ended January 31, 2025, letters were received from CNH Industrial Capital America LLC (“CNH Industrial Capital”) and DLL Finance to waive the Consolidated Fixed Charge Coverage Ratio covenants for the reporting periods between January 31, 2025 to January 31, 2026.

On December 3, 2024, we entered into Amendment No.

1 to the Bank Syndicate Agreement that lowered the adjusted excess availability metric from 15% to 10% for the period from December 15, 2024 to March 15, 2025, and thereafter reverts to 15%.

As of January 31, 2025, we had floorplan payable lines of credit for equipment purchases totaling $1.5 billion, which includes a $875.0 million credit facility with CNH Industrial Capital, a $390.0 million floorplan payable line under the Bank Syndicate Agreement, a $80.0 million credit facility with DLL Finance, and additional credit facilities related to our foreign subsidiaries.

Available borrowing capacity under these lines of credit are reduced by amounts outstanding under such facilities, borrowing base calculations and amount of standby letters of credit outstanding with respect to the Bank Syndicate Agreement, and certain acquisition-related financing arrangements with respect to the CNH Industrial Capital credit facility.

During the year ended January 31, 2025, letters were received from CNH Capital America LLC (“CNH Capital”) and DLL Finance to waive the Consolidated Fixed Charge Coverage Ratio covenants for the reporting periods between January 31, 2025 to January 31, 2026.

In March 2026, the CNH waiver was further extended to cover reporting periods between February 1, 2026 to January 31, 2027.

As of January 31, 2026, we had floorplan payable lines of credit for equipment purchases totaling $1.5 billion, which includes a $875.0 million credit facility with CNH Capital, a $390.0 million floorplan payable line under the Bank Syndicate Agreement, a $70.0 million credit facility with DLL Finance, and additional credit facilities related to our foreign subsidiaries.

Due to the waivers listed above, as of January 31, 2026, the Company was not subject to the financial covenants under its credit agreements.

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As of January 31, 2026, the Company was not subject to the fixed charge ratio covenant under the Bank Syndicate Agreement as our adjusted excess availability plus eligible cash collateral (as defined in the Bank Syndicate Agreement) was not less than 10% of the total amount of the credit facility.

Please refer to Note 8, Floorplan Payable/Lines of Credit , to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Form 10-K for further information regarding the Company's line of credit.

Please refer to Note 8, Floorplan Payable/Lines of Credit , to the

Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data , of this Form 10-K for further information regarding the Company's line of credit.

Our equipment inventory turnover decreased to 1.8 times for fiscal 2026 compared to 1.6 times for fiscal 2025.

The decrease in equipment turnover was attributable to an increase in average equipment inventory in fiscal 2025 as compared to

The decrease in equipment turnover was attributable to an increase in average equipment inventory in fiscal 2026 as compared to fiscal 2025.

Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, increased to 31.9% as of January 31, 2026 from 25.9% as of January 31, 2025.

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and funding capital expenditures.

The primary factor affecting our ability to generate cash and to meet cash requirements, is our operating performance as impacted by (i) industry factors, (ii) competition, (iii) general economic conditions, (iv) the timing and extent of acquisitions, and (v) business and other factors including those identified in Item 1A, Risk Factors, and discussed in this Form 10-K.

Our ability to service our debt will depend upon our ability to generate necessary cash.

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Based on our current operational performance, we believe our cash flow from operations, available cash, and available borrowings under our existing credit facilities will be adequate to meet our liquidity needs beyond the next 12 months.

In fiscal 2025, we used $51.8 million in cash for property and equipment purchases and financed $36.0 million in property and equipment purchases with long-term debt and finance leases.

In fiscal 2026, we used $22.4 million in cash for property and equipment purchases.

The property and equipment purchases in fiscal 2026 primarily related to improvements to, or purchases of, real estate assets and the purchase of vehicles.

In fiscal 2024 , we used $62.4 million in cash for property and equipment purchases, and financed $17.9 million in property and equipment purchases with long-term debt.

In fiscal 2025 , we used $51.8 million in cash for property and equipment purchases, and financed $36.0 million in property and equipment purchases with long-term debt and finance leases.

The property and equipment purchases in fiscal 2025 primarily related to the purchase of vehicles, trucks and real estate.

We expect our cash expenditures for property and equipment for fiscal 2026 to be approximately $40.0 million.

We expect our cash expenditures for property and equipment, exclusive of fleet, for fiscal 2027 to be approximately $15.0 million.

The actual amount of our fiscal 2027 capital expenditures will depend upon factors such as general economic conditions, growth prospects for our industry and our decisions regarding financing and leasing options.

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We may need to incur additional debt if we pursue any future acquisitions.

There can be no assurances, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available under the credit facilities with the Bank Syndicate, CNH Industrial Capital and DLL Finance in amounts sufficient to allow us to service our indebtedness and to meet our other commitments.

If we are unable to generate sufficient cash flow from operations or to obtain sufficient future borrowings, we may be required to seek one or more alternatives such as refinancing or restructuring our indebtedness, selling material assets or operations or seeking to raise additional debt or equity capital.

There can be no assurances that we will be able to succeed with one of these alternatives on commercially reasonable terms, if at all.

In addition, if we pursue strategic acquisitions, we may require additional equity or debt financing to consummate the transactions, and we cannot give absolute assurance that we will succeed in obtaining this financing on favorable terms or at all.

If we incur additional indebtedness to finance any of these transactions, this may place increased demands on our cash flow from operations to service the resulting increased debt.

Our existing debt agreements contain restrictive covenants that may restrict our ability to adopt any of these alternatives.

Any non-compliance by us under the terms of our debt agreements could result in an event of default which, if not cured, could result in the acceleration of our debt.

We have met all financial covenants under these credit agreements as of January 31, 2025.

If anticipated operating results create the likelihood of a future covenant violation, we would seek to work with our lenders on an appropriate modification or amendment to our financing arrangements.

We enter into contractual obligations in the ordinary course of business that may require future cash payments.

Such obligations include, but are not limited to, debt arrangements, leasing arrangements, and costs related to Information Technology ("IT"), including enterprise resource planning (“ERP”) expenses.

The Notes to the Consolidated Financial Statements in Item 8, Financial Information and Supplementary Data, of this Form 10-K provide additional information in regard to Long Term Debt (Note 10) and Leases (Note 13).

The Notes to the Consolidated Financial Statements in Item 8, Financial Information and Supplementary Data , of this Form 10-K provide additional information in regard to Note 10, Long Term Debt , and Note 13, Leases .

Other purchase obligations consist primarily of IT related expenses with estimated cash payments of $5.0 million for fiscal 2027, as well as a combined $11.6 million through fiscal 2030.

Cash Flow (Used For) Provided By Operating Activities

Net cash provided by operating activities in fiscal 2025 was $70.3 million compared to net cash used for operating activities of $32.3 million in fiscal 2024.

The increase was primarily driven by a decrease in inventory and a favorable collection of outstanding receivables, which was partially offset by a decrease in manufactured floorplan payables and a decrease in net income for fiscal 2025 compared to the prior year period.

Cash Flow Provided By Operating Activities

Net cash provided by operating activities in fiscal 2026 was $137.5 million compared to $70.3 million in fiscal 2025.

The change in cash from operating activities was primarily attributable to inventory reductions, timing of payment in our accounts payable and accrued liabilities, which was partially offset by the changing mix in floorplan financing compared to the prior year period.

Cash Flow Used For Investing Activities

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Net cash used for investing activities was $22.7 million in fiscal 2026, compared to $47.7 million in fiscal 2025.

The primarily driver of the decrease was due to the fiscal 2024 acquisitions of $107.5 million compared to $0.3 million in fiscal 2025.

There was also year over year decrease of $10.5 million in cash used for purchases of property and equipment compared to the prior year.

Cash Flow (Used for) Provided By Financing Activities

Net cash used for financing activities was $23.6 million in fiscal 2025, compared to $188.6 million net cash provided by in fiscal 2024.

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 fiscal 2026.

This was partially offset by the Farmers Implement and Irrigation and Bellevue Machinery acquisitions in fiscal 2026.

Cash Flow Used for Financing Activities

Net cash used for financing activities was $123.7 million in fiscal 2026, compared to $23.6 million in fiscal 2025.

The change was primarily driven by a $89.1 million decrease in non-manufacturer floorplan payables, which represents the Company's other credit lines including its Bank Syndicate Agreement.

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While we believe the estimates and judgments we use in preparing our financial statements are appropriate, they are subject to future events and uncertainties regarding their outcome and therefore actual results may materially differ from these estimates.

We describe in Note 1, Business Activity and Significant Accounting Polices , to the Consolidated Financial Statements in Item 8, Financial Information and Supplementary Data , of this Form 10-K the significant accounting policies used in preparing the consolidated financial statements.

We describe in Note 1, Business Activity and Significant Accounting Policies , to the Consolidated Financial Statements in Item 8, Financial Information and Supplementary Data , of this Form 10-K the significant accounting policies used in preparing the consolidated financial statements.

We consider the following items in our consolidated financial statements to require significant estimation or judgment.

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We estimate net realizable value using internal information, management judgment and third-party data that considers various factors including age and condition of equipment, hours of use and market conditions.

Generally, used equipment prices are more volatile to changes in market conditions than prices for new equipment due to incentive programs that may be offered by manufacturers to assist in the sale

of new equipment.

Generally, used equipment prices are more volatile to changes in market conditions than prices for new equipment due to incentive programs that may be offered by manufacturers to assist in the sale of new equipment.

We review our equipment inventory values and adjust them whenever the carrying amount exceeds the estimated net realizable value.

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However, if the sum of the undiscounted cash flows is less than the carrying value of the asset, the second step of the impairment analysis must be performed to measure the amount of the impairment, if any.

The second step of the impairment analysis compares the estimated fair value of the long-lived asset to its carrying value and any amount by which the carrying value exceeds the fair value is recognized as an impairment charge.

second step of the impairment analysis compares the estimated fair value of the long-lived asset to its carrying value and any amount by which the carrying value exceeds the fair value is recognized as an impairment charge.

When reviewing long-lived assets for impairment, we group long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

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Other long-lived assets shared across stores within a segment or shared across segments are reviewed for impairment on a segment or consolidated level as appropriate.

During our 2025 fiscal year, we determined that events or circumstances were present that may indicate that the carrying amount of certain of our store long-lived assets might not be recoverable.

During our 2026 fiscal year, we determined that events or circumstances were present that may indicate that the carrying amount of certain store long-lived assets might not be recoverable.

The events or circumstances which indicated that certain of our store long-lived assets might not be recoverable included a current period operating loss combined with historical losses and anticipated future operating losses within certain of our stores, or an expectation that a long-lived asset (or asset group) will be disposed of before the end of its previously estimated useful life.

In light of these circumstances, we performed step one of the impairment analysis for these assets, which have a combined carrying value of $141.1 million, to determine if the asset values are recoverable.

In the situations where it was concluded that the carrying value was not recoverable, we preformed step two of the impairment analysis and estimated the fair value of the assets using an income approach.

The Company recognized total impairment charges of $1.3 million, of which $0.2 million was within the Agriculture segment, $0.2 million was within the Construction segment, and $0.9 million was within the Europe segment.

In the situations where it was concluded that the carrying value was not recoverable, we performed step two of the impairment analysis and estimated the fair value of the assets using an income approach.

The Company recognized total impairment charges of $2.3 million, of which $0.9 million was within the Agriculture segment, $0.1 million was within the Construction segment, $0.7 million was within the Europe segment and $0.5 million was within Shared Resources.

Our impairment analyses require significant judgment, including identification of the grouping of long-lived and other assets and liabilities for impairment testing, estimates of future cash flows arising from these groups of assets and liabilities, and estimates of the remaining useful lives of the long-lived assets being evaluated.

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Subsequent reversal of goodwill impairment charges is not permitted.

We perform our annual goodwill impairment analysis as of December 31 and when an event occurs or circumstances change that may reduce the fair value of a reporting unit below its carrying amount.

As of January 31, 2026, Goodwill is allocated to two reporting units Agriculture and Australia.

Our Construction and Europe reporting units do not have any goodwill balances.

When we perform a qualitative goodwill test, we analyze qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test.

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These estimates are developed as part of our planning process based on assumed growth rates, along with historical data and various internal estimates.

We perform our annual goodwill impairment analysis as of December 31 and when an event occurs or circumstances change that may reduce the fair value of a reporting unit below its carrying amount.

In 2025, we elected to perform a quantitative test on all reporting units.

Our test indicated that all of our goodwill in the Europe segment should be impaired for $0.5 million and the test for our Agriculture and Australia segments did not indicate any impairment in these two reporting units as of our annual assessment date.

The key assumptions used in our impairment analyses are developed for each segment and therefore vary by reporting unit.

For the most recent Agriculture and Australia annual impairment test, we estimated five-year average annual revenue growth rates of approximately 8.5% and 13.2% for Agriculture and Australia, respectively, gross margins ranging from approximately 17.2% to 18.1% for Agriculture and 16.5% to 17.8% for Australia, and five-year average annual operating expense growth rates of approximately 4.1% and 3.7% for Agriculture and Australia, respectively.

The discount rate used in our analysis was approximately 11.5% and 14.0% for Agriculture and Australia, respectively, and reflects our estimate of the weighted-average cost of capital of comparable companies, adjusted for risks specific to our company.

Revenue growth

assumptions were based on expected industry volume in the geographic markets in which the stores operate, anticipated changes in market share, historical performance, and management’s expectations for future operating conditions.

We had goodwill of $65.6 million and $61.2 million at January 31, 2026 and 2025, respectively.

As of the date of our most recent annual impairment test, the estimated fair value of the Agriculture and Australia reporting units exceeded their carrying amount by approximately 9.2% and 8.6%, respectively.

Our impairment analyses require significant judgment and involve estimates that are inherently uncertain.

These estimates could be materially affected by changes in general macroeconomic conditions, industry trends, competitive dynamics, store-specific performance, prolonged adverse weather patterns, or other factors affecting our valuation.

Adverse changes in any of these factors in future periods could result in impairment charges in future periods, which could materially impact our results of operations and financial position.

In determining our provision for income taxes, we must make certain judgments and estimates, including an assessment of the realizability of our deferred tax assets.

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• our beliefs with respect to factors that will affect demand and seasonality of purchasing in the agricultural and construction industries;

• our beliefs with respect to our primary supplier (CNH Industrial) of equipment and parts inventory;

• our beliefs with respect to our primary supplier (CNH) of equipment and parts inventory;

• our beliefs with respect to the equipment market, our competitors and our competitive advantages;

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• our beliefs and assumptions regarding valuation reserves, equipment inventory balances, fixed operating expenses, and absorption rate;

• our beliefs and expectations regarding the impact of the Russia-Ukraine military conflict on our Ukrainian operations;

• our beliefs and expectations regarding the impact of the Russia-Ukraine conflict on our Ukrainian operations;

• our beliefs and assumptions with respect to our rental equipment operations;

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• our plans and assumptions for future capital expenditures and rental fleet purchases;

• our cash needs, sources of liquidity, and the adequacy of our working capital.

While we believe that the forward-looking statements in this Form 10-K are reasonable, such statements are only predictions and are not guarantees of performance.

• our cash needs, sources of liquidity, and the adequacy of our capital resources.

While we believe that the forward-looking statements in this Form 10-K are reasonable, such statements are only predictions and do not guarantee performance.

These statements are based on our management's beliefs and assumptions, which in turn are based on currently available information.

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Such factors include, but are not limited to, the following:

• our dependence on CNH Industrial, our primary supplier of equipment and parts inventory, to supply competitive products, provide financial and marketing support and continue committing to its product warranties and reimbursement of dealers for warrant repairs, and our relationships with other equipment suppliers;

• the terms of the CNH Industrial Dealer Agreements that subject us to restrictions that may adversely impact our business and growth;

• our dependence on CNH, our primary supplier of equipment and parts inventory, to supply competitive products, provide financial and marketing support and continue committing to its product warranties and reimbursement of dealers for warrant repairs, and our relationships with other equipment suppliers;

• the terms of the CNH Dealer Agreements that subject us to restrictions that may adversely impact our business and growth;

• the impact of net farm income, which is influenced by factors over which we have no control;

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• the highly competitive nature of our industry;

• the recent agreements of equipment manufacturers, including CNH Industrial, to provide farmers and independent repair shops access to diagnostic tools;

• the recent agreements of equipment manufacturers, including CNH, to provide farmers and independent repair shops access to diagnostic tools;

• supply chain disruptions;

• the impact of the Russian-Ukraine military conflict on our operations in Ukraine;

• the impact of the Russia-Ukraine conflict on our operations in Ukraine;

• assumptions regarding our cash needs and the amount of inventory we need on hand;

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Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material.

In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, if at all.

Other than as required by law, we undertake no obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.

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-K

Item 7. Management’s Discussion and Analysis