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Item 2. Management’s Discussion and Analysis

2026-09-03 compared with 2026-06-09 · 178 added, 71 removed, 179 unchanged (58% of the section changed)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and related notes included in Item 1, “ Financial Statements ” of Part I of this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Item 8 and Item 7, respectively, of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

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

10 unchanged sentences

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.

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

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

2 unchanged sentences

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

For the first quarter of fiscal 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.

For the second quarter of fiscal 2027, our net loss was $9.2 million, or a loss of $0.40 per diluted share, compared to a fiscal 2026 second quarter net loss of $6.0 million, or a loss of $0.26 per diluted share.

Significant factors impacting the quarterly comparisons were:

• 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.

• Revenue in the second quarter of fiscal 2027 decreased by 9.2% compared to the second quarter of fiscal 2026.

The revenue decrease was led by softening demand for equipment purchases due to a decline in farmer profitability over the past few years, which is expected to continue through the remainder of fiscal 2027.

• Gross profit margin increased to 18.6% for the second quarter of fiscal 2027, as compared to 17.1% for the second quarter of fiscal 2026.

The increase was primarily related to an equipment gross profit margin increase from 6.6% in the second quarter of fiscal 2026 to 8.5% in the second 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 second quarter of fiscal 2027 as compared to the same period last year.

• Floorplan interest expense decreased by $3.1 million in the second quarter of fiscal 2027 as compared to the same period in fiscal 2026.

The decrease is primarily due to lower interest-bearing inventory levels.

Critical Accounting Policies and Estimates

27 unchanged sentences

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

Additional information regarding our segments is included in Note 17, Business Segment and Geographic Information, to our Condensed Consolidated Financial Statements in Item 1 of Part I 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 April 30,

(dollars in thousands)

Comparative financial data for each of our four sources of revenue are expressed below for the periods indicated:

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

2026 2025 2026 2025

(dollars in thousands) (dollars in thousands)

Revenue $ 328,499 $ 376,262 $ 693,153 $ 813,102

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

Three Months Ended April 30,

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

2026 2025 2026 2025

Equipment 66.2 % 68.9 % 68.0 % 71.3 %

7 unchanged sentences

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

Loss from Operations (1.1) % (1.0) %

(Loss) Income from Operations (0.5) % 0.1 % (0.8) % (0.4) %

Other Expense (1.4) % (1.6) % (1.4) % (1.8) %

Loss Before Income Taxes (1.8) % (1.5) % (2.1) % (2.2) %

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

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

Net Loss (1.8) % (1.1) % (2.1) % (1.7) %

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

Three Months Ended July 31, 2026 Compared to Three Months Ended July 31, 2025

Consolidated Results

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

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Total Revenue $ 496,384 $ 546,426 $ (50,042) (9.2) %

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

Total revenue for the second quarter of fiscal 2027 decreased by 9.2%, or $50.0 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

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

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Total Gross Profit Mix 100.0 % 100.0 %

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 for the second quarter of fiscal 2027 decreased 1.3%, or $1.2 million, compared to the same period last year.

Gross profit margin increased to 18.6% in the current quarter compared to 17.1% in the prior year quarter.

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.

The increase in gross profit margin was primarily related to an equipment gross profit margin increase from 6.6% in the second quarter of fiscal 2026 to 8.5% in the second 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 second quarter of fiscal 2027 as compared to the same period last year.

Our Company-wide absorption rate was 76.5% for the second quarter of fiscal 2027 compared to 83.1% during the same period last year.

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

Operating Expenses

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

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Operating Expenses as a Percentage of Revenue 19.0 % 17.0 % 2.0 % 11.8 %

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.

Our operating expenses in the second quarter of fiscal 2027 increased 1.5% compared to the same period last year.

Operating expenses as a percentage of revenue increased to 19.0% in the second quarter of fiscal 2027 from 17.0% in the second 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 April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

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Impairment of Intangible and Long-Lived Assets $ 592 $ 323 $ 269 83.3 %

*n/m - not meaningful

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.

In the second quarter of fiscal 2027, we recognized $0.6 million in impairment expense related to long-lived assets, of which $0.4 million was within the Europe segment and $0.2 million was within the Agriculture segment.

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

Other Income (Expense)

Three Months Ended April 30, Increase/ Percent

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

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

Interest and other income (expense) $ 1,171 $ 2,638 $ (1,467) (55.6) %

Floorplan interest expense $ (3,664) $ (6,812) $ (3,148) (46.2) %

Other interest expense $ (4,392) $ (4,724) $ (332) (7.0) %

Interest and other income (expense) for the second quarter of fiscal 2027 decreased by approximately $1.5 million as compared to the same period last year, primarily due to foreign currency fluctuations in the quarter.

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

Benefit for Income Taxes

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Benefit for Income Taxes $ (6) $ (2,236) $ (2,230) (99.7) %

Our effective tax rate was 0.1 % and 27.1 % for the three months ended July 31, 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.

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.

Three Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Agriculture $ 310,234 $ 345,755 $ (35,521) (10.3) %

Construction 78,639 71,987 6,652 9.2 %

Europe 66,088 98,117 (32,029) (32.6) %

Australia 41,423 30,567 10,856 35.5 %

Total $ 496,384 $ 546,426 $ (50,042) (9.2) %

(Loss) Income Before Income Taxes

Agriculture $ (3,294) $ (12,295) $ 9,001 73.2 %

Construction 404 (1,216) 1,620 n/m

Europe (1,325) 5,147 (6,472) n/m

Australia (3,440) (2,107) (1,333) (63.3) %

Segment Loss Before Income Taxes (7,655) (10,471) 2,816 26.9 %

Shared Resources (1,501) 2,235 (3,736) n/m

Total $ (9,156) $ (8,236) $ (920) (11.2) %

*n/m - not meaningful

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 April 30, Increase/ Percent

Agriculture segment revenue for the second quarter of fiscal 2027 decreased 10.3% 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 loss before income taxes for the second quarter of fiscal 2027 was $3.3 million compared to $12.3 million for the second 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 second quarter of fiscal 2027 increased 9.2% compared to the same period last year.

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

Our Construction segment income before income taxes was $0.4 million for the second quarter of fiscal 2027 compared to loss before income taxes $1.2 million in the second 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 22.4% in the second quarter of fiscal 2026 to 25.6% in the second quarter of fiscal 2027.

Europe segment revenue for the second quarter of fiscal 2027 decreased 32.6% compared to the same period last year.

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

The wind-down of our German business, which was primarily completed in the first quarter of fiscal 2027, also contributed to the decrease in segment revenue for the second quarter of fiscal 2027 in comparison to the second quarter of fiscal 2026.

Our Europe segment loss before income taxes was $1.3 million for the second quarter of fiscal 2027 compared to income before income taxes of $5.1 million in the second quarter of fiscal 2026.

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

Australia segment revenue for the second quarter of fiscal 2027 increased 35.5% 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, as well as favorable foreign currency impacts from a strengthening Australian Dollar.

Our Australia segment loss before income taxes was $3.4 million for the second quarter of fiscal 2027 compared to $2.1 million in the second quarter of fiscal 2026.

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

Shared Resources/Eliminations

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

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

Shared Resources loss before income taxes was $1.5 million for the second quarter of fiscal 2027 compared to income before income taxes $2.2 million for the same period last year.

Six Months Ended July 31, 2026 Compared to Six Months Ended July 31, 2025

Consolidated Results

Six Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Equipment $ 693,153 $ 813,102 $ (119,949) (14.8) %

Parts 210,364 214,851 (4,487) (2.1) %

Service 90,210 92,817 (2,607) (2.8) %

Rental and other 25,038 19,993 5,045 25.2 %

Total Revenue $ 1,018,765 $ 1,140,763 $ (121,998) (10.7) %

Total revenue for the first six months of fiscal 2027 decreased by 10.7%, or $122.0 million, compared to the same period last year.

Six Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Equipment $ 56,493 $ 54,347 $ 2,146 3.9 %

Parts 63,686 67,198 (3,512) (5.2) %

Service 54,602 58,728 (4,126) (7.0) %

Rental and other 6,899 4,307 2,592 60.2 %

Total Gross Profit $ 181,680 $ 184,580 $ (2,900) (1.6) %

Gross Profit Margin

Equipment 8.2 % 6.7 % 1.5 % 22.4 %

Parts 30.3 % 31.3 % (1.0) % (3.2) %

Service 60.5 % 63.3 % (2.8) % (4.4) %

Rental and other 27.6 % 21.5 % 6.1 % 28.4 %

Total Gross Profit Margin 17.8 % 16.2 % 1.6 % 9.9 %

Gross Profit Mix

Equipment 31.1 % 29.4 % 1.7 % 5.8 %

Parts 35.1 % 36.4 % (1.3) % (3.6) %

Service 30.1 % 31.8 % (1.7) % (5.3) %

Rental and other 3.7 % 2.4 % 1.3 % 54.2 %

Total Gross Profit Mix 100.0 % 100.0 %

Gross profit decreased 1.6%, or $2.9 million, for the first six months of fiscal 2027, as compared to the same period last year, while gross profit margin increased to 17.8% in the first six months of fiscal 2027 from 16.2% in the same period last year.

The increase in gross profit margin was primarily related to an equipment gross profit margin increase from 6.7% in the first six months of fiscal 2026 to 8.2% in the first six months 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 six months of fiscal 2027 as compared to the same period last year.

For the first six months of fiscal 2027, the Company-wide absorption rate was 75.2%, down from 79.3% for the first six months of fiscal 2026.

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

Operating Expenses

Six Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Operating Expenses $ 188,459 $ 189,065 $ (606) (0.3) %

Operating Expenses as a Percentage of Revenue 18.5 % 16.6 % 1.9 % 11.4 %

Our operating expenses for the first six months of fiscal 2027 decreased $0.6 million compared to the same period last year.

Operating expenses as a percentage of revenue increased to 18.5% in the first six months of fiscal 2027 from 16.6% in the first six months 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

Six Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Impairment of Intangible and Long-Lived Assets $ 1,094 $ 589 $ 505 85.7 %

In the first six months of fiscal 2027, we recognized $1.1 million in impairment expense related to long-lived assets, of which $0.9 million was within the Europe segment and $0.2 million was within the Agriculture segment.

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

Other Income (Expense)

Six Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

(dollars in thousands)

Interest and other income (expense) $ 2,473 $ 2,149 $ 324 15.1 %

Floorplan interest expense (7,216) (13,338) (6,122) (45.9) %

Other interest expense (9,015) (9,256) (241) (2.6) %

Floorplan interest expense decreased in the first six months of fiscal 2027 compared to the same period last year due to lower interest-bearing inventory levels.

Provision (Benefit) for Income Taxes

$ 141 $ (4,078) $ 4,219 (103.5) %

Six Months Ended July 31, Increase/ Percent

2026 2025 Decrease Change

(dollars in thousands)

Provision (Benefit) for Income Taxes $ 135 $ (6,315) $ 6,450 n/m

*n/m = Not Meaningful

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

Our effective tax rate was 0.6% and 24.7% for the six months ended July 31, 2026, and 2025, respectively.

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 April 30, Increase/ Percent

Six Months Ended July 31, Increase/ Percent

2026 2025 (Decrease) Change

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Europe (2,258) 9,857 (12,115) n/m

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

Australia (5,221) (2,669) (2,552) (95.6) %

Segment Loss Before Income Taxes (17,161) (23,280) 6,119 26.3 %

2 unchanged sentences

*n/m = Not Meaningful

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

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

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

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

Agriculture segment loss before income taxes was $9.5 million for the first six months of fiscal 2027 compared to $25.1 million over the first six months 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.

Construction segment revenue for the first six months of fiscal 2027 increased 1.4% compared to the same period last year.

Our Construction segment loss before income taxes was $0.2 million for the first six months of fiscal 2027 compared to $5.4 million in the first six months 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.

Additionally, the dollar utilization of our rental fleet increased from 21.2% in the first six months of fiscal 2026 to 24.6% in the first six months of fiscal 2027.

Europe segment revenue for the first six months of fiscal 2027 decreased 34.1% compared to the same period last year.

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

Our Europe segment loss before income taxes was $2.3 million for the first six months of fiscal 2027 compared to income before income taxes of $9.9 million for the same period last year.

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.

Australia segment revenue for the first six months of fiscal 2027 increased 23.0% compared to the same period last year.

Our Australia segment loss before income taxes was $5.2 million for the second quarter of fiscal 2027 compared to $2.7 million in the second quarter of fiscal 2026.

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

Shared Resources/Eliminations

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

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

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

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

Shared Resources loss before income taxes was $4.5 million for the first six months of fiscal 2027 compared to $2.2 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 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 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.

As of July 31, 2026, the Company had floorplan payable lines of credit for equipment purchases totaling $1.5 billion, which is primarily comprised of an $874.0 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 July 31, 2026, and July 31, 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 20.5% as of July 31, 2026, from 31.9% as of January 31, 2026.

Adequacy of Capital Resources

2 unchanged sentences

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.

Notwithstanding these waivers, as of July 31, 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 July 31, 2026.

The financial covenants also require us to maintain an adjusted debt to tangible net worth ratio of 3.50:1.00, which is measured on a quarterly basis.

1 unchanged sentence

Cash Flow Provided by (Used for) Operating Activities

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.

Net cash used for operating activities was $25.1 million for the first six months of fiscal 2027, compared to net cash provided by operating activities of $49.9 million for the six months ended July 31, 2025.

The change in cash from operating activities was primarily attributable to timing of inventory receipts and changing mix in floorplan financing compared to the prior year period.

Cash Flow Used for Investing Activities

Net cash used for investing activities was $3.7 million for the first six months of fiscal 2027, compared to $24.9 million for the first six months of fiscal 2026.

The change in net cash used for investing activities was primarily attributable to the lower purchases of property and equipment and business acquisitions during the second quarter of fiscal 2027 compared to the prior year period.

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.

Net cash provided by financing activities was $30.4 million for the first six months of fiscal 2027 compared to net cash used for financing activities of $30.0 million for the first six months of fiscal 2026.

The change in cash from financing activities was primarily attributable to borrowing on non-manufacturer floorplan payables during the first six months of fiscal 2027, compared to a paydown in the first six months of fiscal 2026.

Information Concerning Off-Balance Sheet Arrangements

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.

As of July 31, 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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What changed 10-Q

Item 2. Management’s Discussion and Analysis