What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-06-09 compared with 2025-12-04 · 85 added, 204 removed, 165 unchanged (64% of the section changed)

8 unchanged sentences

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

Based upon September 2025 publications by U.S.

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

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

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 year 2024.

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

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

In response, some countries have enacted or are expected to enact retaliatory tariffs on U.S.

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.

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.

1 unchanged sentence

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 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.

For the first quarter of fiscal 2027, our net loss was $12.6 million, or a loss of $0.55 per diluted share, compared to a fiscal 2026 first quarter net loss of $13.2 million, or a loss of $0.58 per diluted share.

Significant factors impacting the quarterly comparisons were:

• 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 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.

• Revenue in the first quarter of fiscal 2027 decreased by 12.1% compared to the first quarter of fiscal 2026.

The revenue decrease was led by softening of demand for equipment purchases due to a decline in farmer profitability over the past few years, which is expected to remain challenged in 2026.

• Gross profit margin increased to 17.1% for the first quarter of fiscal 2027, as compared to 15.3% for the first quarter of fiscal 2026.

The increase was primarily related to an equipment gross profit margin increase from 6.8% in the first quarter of fiscal 2026 to 7.8% in the first quarter of fiscal 2027 and a change in sales mix, with a greater proportion of revenue earned from our higher margin parts and service business during the first quarter of fiscal 2027 as compared to same period last year.

• Floorplan interest expense decreased by $3.0 million in the first quarter of fiscal 2027 as compared to the same period in fiscal 2026.

The decrease is primarily due to lower inventory levels subject to interest.

Critical Accounting Policies and Estimates

5 unchanged sentences

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 rental fleet debt.

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 and incentive expense, plus interest expense on rental fleet debt.

This calculation of absorption does not include floorplan interest expense.

19 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 on Form 10-Q.

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

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

2025 2024 2025 2024

(dollars in thousands) (dollars in thousands)

Three Months Ended April 30,

(dollars in thousands)

Revenue $ 364,654 $ 436,840

16 unchanged sentences

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

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

2025 2024 2025 2024

Three Months Ended April 30,

Equipment 69.8 % 73.5 %

7 unchanged sentences

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

Income (Loss) from Operations 1.6 % 1.7 % 0.3 % 2.6 %

Loss from Operations (1.1) % (1.0) %

Other Expense (1.3) % (1.9) %

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

Loss Before Income Taxes (2.4) % (2.9) %

Provision (Benefit) for Income Taxes — % (0.7) %

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

Net Loss (2.4) % (2.2) %

Three Months Ended April 30, 2026 Compared to Three Months Ended April 30, 2025

Consolidated Results

Three Months Ended October 31, Increase/ Percent

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

5 unchanged sentences

Total Revenue $ 522,381 $ 594,336 $ (71,955) (12.1) %

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.

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

Total revenue for the first quarter of fiscal 2027 decreased by 12.1%, or $72.0 million, compared to the same period last year.

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

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

17 unchanged sentences

Total Gross Profit Mix 100.0 % 100.0 %

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 for the first quarter of fiscal 2027 decreased 1.8%, or $1.7 million, compared to the same period last year.

Gross profit margin increased to 17.1% in the current quarter compared to 15.3% 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.

The increase in gross profit margin was primarily related to an equipment gross profit margin increase from 6.8% in the first quarter of fiscal 2026 to 7.8% in the first quarter of fiscal 2027 and a change in sales mix, with a greater proportion of revenue earned from higher margin parts and service business during the first quarter of fiscal 2027 as compared to the same period last year.

Our Company-wide absorption rate was 74.0% for the first quarter of fiscal 2027 compared to 75.5% during the same period last year.

The decrease in our absorption rate was primarily due to lower gross profit in the first quarter of fiscal 2027 compared to the same period last year.

Operating Expenses

Three Months Ended October 31, Increase/ Percent

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

2 unchanged sentences

Operating Expenses as a Percentage of Revenue 18.1 % 16.2 % 1.9 % 11.7 %

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.

Our operating expenses in the first quarter of fiscal 2027 decreased 2.1% as compared to the same period last year.

Operating expenses as a percentage of revenue increased to 18.1% in the first quarter of fiscal 2027 from 16.2% in the first quarter of fiscal 2026.

The increase in operating expenses as a percentage of total revenue was due to lower revenue primarily related to the challenging agricultural industry conditions.

Impairment Charges

Three Months Ended October 31, Increase/ Percent

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

2 unchanged sentences

*n/m - not meaningful

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.

In the first quarter of fiscal 2027, we recognized $0.5 million in impairment expense related to long-lived assets in our Europe segment.

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

Other Income (Expense)

Three Months Ended October 31, Increase/ Percent

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

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

Interest and other income (expense) $ 1,302 $ (488) $ 1,790 n/m

Floorplan interest expense $ (3,553) $ (6,526) $ (2,973) (45.6) %

1 unchanged sentence

*n/m - not meaningful

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.

Interest and other income (expense) for the first quarter of fiscal 2027 increased by approximately $1.8 million as compared to the same period last year, primarily due to foreign currency fluctuations in the quarter.

Floorplan interest expense decreased in the first quarter of fiscal 2027 compared to the same period last year due to lower inventory levels subject to interest.

Provision (Benefit) for Income Taxes

Three Months Ended October 31, Increase/ Percent

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

3 unchanged sentences

*n/m - not meaningful

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.

Our effective tax rate was 1.1 % and 23.6 % for the three months ended April 30, 2026 and 2025, respectively.

The effective tax rate is subject to variation due to the impact of several items, mainly the mix of domestic and foreign income and the impact of the recognition of valuation allowance on our domestic and foreign deferred tax assets.

In the three months ended April 30, 2026, we recorded a valuation allowance of $0.7 million on our Australian subsidiary due to the presence of historical losses and the Company’s expected future sources of taxable income.

Segment Results

2 unchanged sentences

Revenue between segments is immaterial.

Three Months Ended October 31, Increase/ Percent

Three Months Ended April 30, Increase/ Percent

2026 2025 (Decrease) Change

5 unchanged sentences

Total $ 522,381 $ 594,336 $ (71,955) (12.1) %

Income (Loss) Before Income Taxes

(Loss) Income Before Income Taxes

Agriculture $ (6,181) $ (12,777) $ 6,596 51.6 %

2 unchanged sentences

Australia (1,781) (561) (1,220) n/m

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

Segment Loss Before Income Taxes (9,507) (12,808) 3,301 25.8 %

Shared Resources (2,968) (4,474) 1,506 33.7 %

Total $ (12,475) $ (17,282) $ 4,807 27.8 %

*n/m - not meaningful

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.

Agriculture segment revenue for the first quarter of fiscal 2027 decreased 10.4% compared to the same period last year.

This decrease in revenue was primarily due to a decrease in equipment revenue resulting from challenging industry conditions, such as sustained lower agricultural commodity prices and total crop receipts, which continue to negatively impact customer sentiment.

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

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 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 $3.8 million for the third quarter of fiscal 2026 compared to $0.3 million in the third quarter of fiscal 2025.

Agriculture segment loss before income taxes for the first quarter of fiscal 2027 was $6.2 million compared to $12.8 million for the first quarter of fiscal 2026.

The improvement in segment results was driven by an improved inventory position, which helped to generate higher equipment gross profit margins as well as a decrease in floorplan interest expense.

Construction segment revenue for the first quarter of fiscal 2027 decreased 6.5% compared to the same period last year.

The decrease in revenue was primarily driven by the timing of equipment deliveries.

Our Construction segment loss before income taxes was $0.6 million for the first quarter of fiscal 2027 compared to $4.2 million in the first quarter of fiscal 2026.

The improvement in segment results was driven by an improved inventory position, which helped to generate higher equipment gross profit margins as well as a decrease in floorplan interest expense.

The dollar utilization of our rental fleet increased from 20.1% in the first quarter of fiscal 2026 to 23.5% in the first quarter of fiscal 2027.

Europe segment revenue for the first quarter of fiscal 2027 decreased 35.6% compared to the same period last year.

The decrease in revenue was primarily due to lower equipment demand compared to prior year period, which had been driven by a strong response to European Union stimulus programs in Romania.

Our Europe segment loss before income taxes was $0.9 million for the first quarter of fiscal 2027 compared to income before income taxes of $4.7 million in the first quarter of fiscal 2026.

The decrease in segment results was primarily the result of a decrease in equipment sales.

Australia segment revenue for the first quarter of fiscal 2027 increased 14.3% compared to the same period last year.

The current year results include additional revenue related to the acquisition of Bellevue Machinery, completed in October 2025.

Our Australia segment loss before income taxes was $1.8 million for the first quarter of fiscal 2027 compared to $0.6 million in the first quarter of fiscal 2026.

The decrease in segment results was primarily the result of softer equipment margins compared to same period last year.

Shared Resources/Eliminations

1 unchanged sentence

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

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

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Equipment $ 1,273,014 $ 1,428,469 $ (155,455) (10.9) %

Parts 337,193 339,118 (1,925) (0.6) %

Service 141,761 143,468 (1,707) (1.2) %

Rental and other 33,305 31,145 2,160 6.9 %

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

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

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Equipment $ 91,811 $ 135,648 $ (43,837) (32.3) %

Parts 105,976 108,186 (2,210) (2.0) %

Service 89,994 92,715 (2,721) (2.9) %

Rental and other 7,816 8,077 (261) (3.2) %

Total Gross Profit $ 295,597 $ 344,626 $ (49,029) (14.2) %

Gross Profit Margin

Equipment 7.2 % 9.5 % (2.3) % (24.2) %

Parts 31.4 % 31.9 % (0.5) % (1.6) %

Service 63.5 % 64.6 % (1.1) % (1.7) %

Rental and other 23.5 % 25.9 % (2.4) % (9.3) %

Total Gross Profit Margin 16.6 % 17.7 % (1.1) % (6.2) %

Gross Profit Mix

Equipment 31.1 % 39.4 % (8.3) % (21.1) %

Parts 35.9 % 31.4 % 4.5 % 14.3 %

Service 30.4 % 26.9 % 3.5 % 13.0 %

Rental and other 2.6 % 2.3 % 0.3 % 13.0 %

Total Gross Profit Mix 100.0 % 100.0 %

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

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Operating Expenses $ 289,539 $ 293,087 $ (3,548) (1.2) %

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

Our operating expenses for the first nine months of fiscal 2026 decreased $3.5 million 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 16.2% in the first nine months of fiscal 2026 from 15.1% in the first nine months of fiscal 2025.

Impairment Charges

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

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 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)

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

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

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

Other interest expense (14,011) (10,479) 3,532 (33.7) %

*n/m = Not Meaningful

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)

(Benefit) Provision for Income Taxes $ (4,704) $ 1,959 $ (6,663) n/m

*n/m = Not Meaningful

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

Segment Results

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

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

Revenue between segments is immaterial.

Nine Months Ended October 31, Increase/ Percent

2025 2024 (Decrease) Change

(dollars in thousands)

Agriculture $ 1,151,082 $ 1,353,744 $ (202,662) (15.0) %

Construction 220,817 236,971 (16,154) (6.8) %

Europe 308,987 195,633 113,354 57.9 %

Australia 104,387 155,852 (51,465) (33.0) %

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

(Loss) Income Before Income Taxes

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

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

Europe 13,373 (2,115) 15,488 n/m

Australia (6,438) 578 (7,016) 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

Total $ (22,710) $ 8,809 $ (31,519) n/m

*n/m = Not Meaningful

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 $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 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 $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 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 $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

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

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

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.

Shared Resources loss before income taxes was $3.0 million for the first quarter of fiscal 2027 compared to $4.5 million for the same period last year.

Liquidity and Capital Resources

2 unchanged sentences

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

However, our borrowing capacity under our floorplan and other credit facilities is dependent on compliance with various covenants as further described in 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.

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 Consolidated Financial Statements contained in our Annual Report on Form 10-K for fiscal 2026.

Floorplan and Working Capital Payable Credit Facilities and Equipment Inventory

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.

As of April 30, 2026, 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 $67.5 million credit facility with DLL Finance.

Our equipment inventory turnover was 1.9 and 1.7 times for the rolling 12 month period ended April 30, 2026 and April 30, 2025, respectively.

Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, decreased to 24.0% as of April 30, 2026 from 31.9% as of January 31, 2026.

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 October 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 October 31, 2025.

During fiscal year 2027, letters were received from CNH Capital America LLC (“CNH Capital”) and DLL Finance to waive the Consolidated Fixed Charge Coverage Ratio covenants in the separate credit agreements with CNH Capital and DLL Finance in each case for the reporting periods between February 1, 2026 to January 31, 2027.

Notwithstanding these waivers, as of April 30, 2026, we were in compliance with the financial covenants under our CNH Industrial and DLL Finance credit agreements and we were also not subject to the fixed charge coverage ratio covenant under the Bank Syndicate Agreement as our adjusted excess availability plus eligible cash collateral (as defined therein) was not less than 15% of the lesser of (i) aggregate borrowing base and (ii) maximum credit amount as of April 30, 2026.

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 $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 $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 $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.

Net cash used for operating activities was $23.1 million for the first three months of fiscal 2027, compared to net cash provided by operating activities of $6.2 million for the three months ended April 30, 2025.

The change in cash from operating

activities was primarily attributable to timing of inventory receipts and changing mix in floorplan financing, which was partially offset by receivable collections compared to the prior year period.

Cash Flow Provided by (Used for) Investing Activities

Net cash provided by investing activities was $1.1 million for the first three months of fiscal 2027, compared to net cash used for investing activities of $5.2 million for the first three months of fiscal 2026.

The change in net cash used for investing activities was primarily attributable to the reduced purchases of property and equipment and proceeds from business divestiture received during the first quarter of fiscal 2027.

Cash Flow Provided by (Used for) Financing Activities

Net cash provided by financing activities was $23.4 million for the first three months of fiscal 2027 compared to net cash used for financing activities of $15.8 million for the first three months of fiscal 2026.

The change in cash from financing activities was primarily driven by lower non-manufacturer floorplan payables during the first three months of fiscal 2027.

Information Concerning Off-Balance Sheet Arrangements

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.

As of April 30, 2026, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

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

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

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

Forward-looking statements are contained in this Quarterly Report on Form 10-Q, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, and in other materials filed by the Company with the SEC (and included in oral statements or other written statements made by the Company).

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

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

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

These risks and uncertainties include, but are not limited to, our ability to reduce inventory levels and improve profitability, the impact of the Russia-Ukraine conflict on our Ukrainian operations, the impact of those conditions and obligations imposed on us under the CaseIH dealer agreements entered into in connection with our acquisition of the Heartland companies' commercial application equipment business, our substantial dependence on CNH, including CNH's ability to design, manufacture and allocate inventory to our stores in quantities necessary to satisfy our customers' demands, disruptions of supply chains and associated impacts on the Company's supply vendors and their ability to provide the Company with sufficient and timely inventory to meet customer demand, adverse market conditions in the agricultural and construction equipment industries, and those matters identified and discussed under the section titled “Risk Factors” in our Annual Report on Form 10-K for fiscal 2026.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis