What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-21 compared with 2025-10-28 · 68 added, 104 removed, 122 unchanged (59% of the section changed)

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As disclosed in Part I, Item 1A, "Risk Factors", of our Annual Report on Form 10-K for the year ended December 31, 2025, the Company’s business is subject to risks related to, among other factors, tariffs and other trade protection measures put in place by the United States or other countries.

Starting in the first quarter of 2025, the United States government announced additional tariffs on goods imported into the U.S.

from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response.

government continues to negotiate with other countries regarding the tariffs.

Starting in the first quarter of 2025, the United States government announced additional tariffs on goods imported from various countries into the U.S., and in response, certain of those countries countered with reciprocal tariffs and other actions.

While the Company is well positioned to respond to the tariff environment, costs are impacted by trade policies.

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized by the statute.

The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA.

Significant uncertainty remains regarding how and when any amounts may be recovered.

We are evaluating the ruling and potential actions available to us.

Because the process, timing, and amount of any recovery are uncertain, we have not recorded any potential benefit from a refund at this time.

Critical Accounting Estimates

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Refer to Item 7, MD&A, of our Annual Report on Form 10-K for the year ended December 31, 2025 for information with respect to our critical accounting estimates which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management.

Except for the items reported below, management believes that as of September 30, 2025, and during the period from January 1, 2025 through September 30, 2025, there has been no material change to this information.

Except for the items reported below, management believes that as of March 31, 2026, and during the period from January 1, 2026 through March 31, 2026, there has been no material change to this information.

Recent Accounting Pronouncements

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The Pension Plan freeze resulted in a curtailment gain of $0.7 million in the first quarter of 2025.

Pension Plan participants were provided the opportunity to receive their full accrued benefits from the Pension Plan assets by either electing immediate lump sum distributions or annuity contracts with a qualifying third-party annuity provider.

During the nine months ended September 30, 2025, the Company entered into an agreement to purchase annuities from a third-party annuity provider and contributed $4.3 million to fund the liquidation of the Pension Plan.

As a result, Pension Plan liabilities were settled and the Pension Plan was exited during the quarter ended September 30, 2025, resulting in a pre-tax settlement gain of $10.0 million from Accumulated other comprehensive loss to Other income (expense), net in the condensed consolidated statements of operations.

During the year ended December 31, 2025, the Company entered into an agreement to purchase annuities from a third-party annuity provider and contributed $4.3 million to fund the liquidation of the Pension Plan.

As a result, Pension Plan liabilities were settled and the Pension Plan was exited during the third quarter of 2025, resulting in a pre-tax settlement gain of $10.0 million from accumulated other comprehensive loss to other income, net in the condensed consolidated statements of operations.

See Item 1, Note 15, Retirement Benefits for additional information.

Discontinued Operations

On October 4, 2021, the Company completed a Reverse Morris Trust tax-free spin-off transaction (the “Spin-Off Transaction”) in which (i) substantially all the assets and liabilities of the Company's Process & Motion Control ("PMC") business were transferred to a newly created subsidiary, Land Newco, Inc.

(“Land”), (ii) the shares of Land were distributed to the Company's stockholders pro rata, and (iii) Land was merged with a subsidiary of Regal Rexnord Corporation (formerly known as Regal Beloit Corporation), in which the stock of Land was converted into a specified number of shares of Regal Rexnord Corporation in accordance with the exchange ratio.

The operating results of PMC are reported as discontinued operations in our condensed consolidated statements of operations for all periods presented.

The condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and September 30, 2024 have not been adjusted to separately disclose cash flows related to the discontinued operations.

The major components of the Income from discontinued operations, net of tax presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and September 30, 2024, are as follows (in millions):

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Selling, general and administrative expense (1) $ (2.1) $ — $ (4.7) $ (0.7)

During the year ended December 31, 2021, the Company completed the Spin-Off Transaction (the “Spin-Off Transaction”) of the Company's Process & Motion Control ("PMC") business.

The operating results of PMC are reported as discontinued operations in the condensed consolidated statements of operations for all periods presented, as the Spin-Off Transaction of PMC represented a strategic shift that had a major impact on operations and financial results.

The condensed consolidated statements of cash flows for the three months ended March 31, 2026 and March 31, 2025 have not been adjusted to separately disclose cash flows related to the discontinued operations.

The major components of the income from discontinued operations, net of tax presented in the condensed consolidated statements of operations for the three months ended March 31, 2026 and March 31, 2025, are as follows (in millions):

Three Months Ended

March 31, 2026 March 31, 2025

Selling, general and administrative income (1) $ — $ (2.6)

Income from discontinued operations before income tax — 2.6

Income tax benefit 0.1 — 0.5 0.3

Income from discontinued operations, net of tax $ — $ 2.6

(1) Selling, general and administrative expense includes the release of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction.

(1) Selling, general and administrative income includes the release of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction.

See Item 1, Note 3, Discontinued Operations for additional information.

Restructuring and Other Similar Charges

During the three and nine months ended September 30, 2025, the Company continued to execute various restructuring actions.

During the three months ended March 31, 2026, the Company continued to execute various restructuring actions.

These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of mergers and acquisitions on the Company's overall manufacturing capacity and the refinement of its overall product portfolio.

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As such, the Company expects further expenses related to workforce reductions, potential impairment or accelerated depreciation of assets, lease termination costs and other facility rationalization costs.

For the three and nine months ended September 30, 2025, restructuring charges totaled $1.8 million and $5.4 million, respectively.

For the three and nine months ended September 30, 2024, restructuring charges totaled $2.7 million and $9.7 million, respectively.

For the three months ended March 31, 2026 and March 31, 2025, restructuring charges totaled $0.9 million and $1.7 million, respectively.

Refer to Item 1, Note 2, Restructuring and Other Similar Charges for further information.

Results of Operations

Three Months Ended September 30, 2025 compared with the Three Months Ended September 30, 2024:

Three Months Ended March 31, 2026 compared with the Three Months Ended March 31, 2025:

(Dollars in Millions)

Three Months Ended

September 30, 2025 September 30, 2024 Change % Change

March 31, 2026 March 31, 2025 Change % Change

Net sales $ 433.0 $ 388.8 $ 44.2 11.4 %

Net sales were $455.4 million and $410.0 million during the three months ended September 30, 2025 and September 30, 2024, respectively, an increase of 11% year over year.

Core sales improved 11% year over year, including growth in all product categories.

Net sales were $433.0 million and $388.8 million during the three months ended March 31, 2026 and March 31, 2025, respectively, an increase of 11% year over year.

Core sales improved 11% year over year, including growth in nearly all product categories.

Income from operations

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Three Months Ended

September 30, 2025 September 30, 2024 Change % Change

March 31, 2026 March 31, 2025 Change % Change

Income from operations $ 82.1 $ 63.4 $ 18.7 29.5 %

% of net sales 19.0 % 16.3 % 2.7 %

During the three months ended September 30, 2025, income from operations was $77.5 million compared to $70.2 million during the three months ended September 30, 2024.

Income from operations as a percentage of net sales stayed consistent year over year as a result of the favorable impact of year-over-year sales growth (inclusive of price realization) and productivity savings being offset primarily by the adjustment to state inventories at Last-In, First-Out ("LIFO") cost.

During the three months ended March 31, 2026, income from operations was $82.1 million compared to $63.4 million during the three months ended March 31, 2025.

Income from operations as a percentage of net sales increased by 270 basis points year over year as a result of the favorable impact of year-over-year sales growth (inclusive of price realization) and Zurn Elkay Business System led productivity initiatives.

Interest expense, net

Interest expense, net was $7.1 million for the three months ended September 30, 2025, compared to $8.3 million for the three months ended September 30, 2024.

The decrease in interest expense, net as compared to the prior year period is primarily due to lower interest rates.

Other income (expense), net

Other income (expense), net for the three months ended September 30, 2025 and 2024, was $8.7 million and $(1.5) million, respectively.

Other income (expense), net consists primarily of foreign currency transaction gains and losses, the non-service cost components associated with our defined benefit and postretirement plans and other non-operational gains and losses.

The year-over-year change is primarily driven by the settlement and exit of our U.S.

defined benefit pension plan in the current year.

Interest expense, net was $6.2 million for the three months ended March 31, 2026, compared to $7.3 million for the three months ended March 31, 2025.

The decrease in interest expense, net as compared to the prior year period is primarily due to reduced interest expense in the current year as a result of lower interest rates and interest earned on higher cash balances.

Other income, net

Other income, net for the three months ended March 31, 2026 and March 31, 2025, was $1.0 million and $0.0 million, respectively.

Other income, net consists primarily of foreign currency transaction gains and losses, the non-service cost components associated with our defined benefit and postretirement plans and other non-operational gains and losses.

The year-over-year change is primarily driven by lower defined benefit plan costs in the current year as a result of refunds recognized in connection with the U.S.

pension plan termination, partially offset by the write off of $0.4 million of unamortized deferred financing costs .

Provision for income taxes

The income tax provision was $19.5 million for the three months ended September 30, 2025, compared to $16.9 million for the three months ended September 30, 2024.

The effective income tax rate for the three months ended September 30, 2025 was 24.7% versus 28.0% for the three months ended September 30, 2024.

The effective income tax rate for the three months ended September 30, 2025 and the three months ended September 30, 2024 was above the U.S.

The income tax provision was $18.0 million for the three months ended March 31, 2026, compared to $15.1 million for the three months ended March 31, 2025.

The effective income tax rate for the three months ended March 31, 2026 was 23.4% versus 26.9% for the three months ended March 31, 2025.

The effective income tax rate for the three months ended March 31, 2026 and March 31, 2025 was above the U.S.

federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes and the accrual of foreign income taxes, which are generally above the U.S.

federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments.

federal statutory rate, partially offset by the recognition of certain previously unrecognized tax benefits due to the lapse of the applicable statutes of limitations and by the recognition of income tax benefits associated with share-based payments.

On a quarterly basis, we review and analyze our valuation allowances associated with deferred tax assets relating to certain foreign and state net operating loss carryforwards as well as U.S.

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Future changes to the balances of these valuation allowances, as a result of our continued review and analysis, could impact the financial statements for such period of change.

Net income for the three months ended September 30, 2025, was $61.8 million compared to net income of $43.5 million for the three months ended September 30, 2024.

Diluted net income per share for the three months ended September 30, 2025 and September 30, 2024, was $0.36 and $0.25, respectively.

The year-over-year change is the result of the factors described above.

Net income from discontinued operations, net of tax, was $2.2 million for the three months ended September 30, 2025 compared to net income from discontinued operations, net of tax, of $0.0 million for the three months ended September 30, 2024.

Diluted net income per share from discontinued operations for the three months ended September 30, 2025 and September 30, 2024, was $0.01 and $0.00, respectively.

Nine Months Ended September 30, 2025 compared with the Nine Months Ended September 30, 2024:

(Dollars in Millions)

Nine Months Ended

September 30, 2025 September 30, 2024 Change % Change

Net sales $ 1,288.7 $ 1,195.8 $ 92.9 7.8 %

Net sales were $1,288.7 million during the nine months ended September 30, 2025, an increase of 8% year over year.

Core sales improved 8% year over year, including growth in all product categories.

Income from operations

(Dollars in Millions)

Nine Months Ended

September 30, 2025 September 30, 2024 Change % Change

Income from operations $ 218.5 $ 195.3 $ 23.2 11.9 %

% of net sales 17.0 % 16.3 % 0.6 %

Income from operations during the nine months ended September 30, 2025 was $218.5 million compared to $195.3 million during the nine months ended September 30, 2024.

Income from operations as a percentage of net sales increased by 60 basis points year over year as a result of the favorable impact of year-over-year sales growth (inclusive of price realization) and productivity savings being slightly offset primarily by the adjustment to state inventories at LIFO cost.

Interest expense, net

Interest expense, net was $22.1 million during the nine months ended September 30, 2025, compared to $25.6 million during the nine months ended September 30, 2024.

The decrease in interest expense, net as compared to the prior year period is primarily due to lower interest rates.

Other income (expense), net

Other income (expense), net during the nine months ended September 30, 2025 was $6.7 million compared to $(4.5) million during the nine months ended September 30, 2024.

Other income (expense), net consists primarily of foreign currency transaction gains and losses, the non-service cost components associated with our defined benefit plans and other non-operational gains and losses.

The year-over-year change is primarily driven by the settlement and exit of our U.S.

defined benefit pension plan in the current year.

Provision for income taxes

The income tax provision was $52.4 million for the nine months ended September 30, 2025, compared to $42.4 million for the nine months ended September 30, 2024.

The effective income tax rate for the nine months ended September 30, 2025 was 25.8% versus 25.7% for the nine months ended September 30, 2024.

The effective income tax rate for the nine months ended September 30, 2025 was above the U.S.

federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments.

The effective income tax rate for the nine months ended September 30, 2024 was above the U.S.

are generally above the U.S.

federal statutory rate, partially offset by the recognition of certain previously unrecognized tax benefits due to the lapse of the applicable statutes of limitations and income tax benefits associated with share-based payments.

Net income for the nine months ended September 30, 2025, was $155.9 million compared to $123.8 million for the nine months ended September 30, 2024.

Diluted net income per share for the nine months ended September 30, 2025 and September 30, 2024, was $0.91 and $0.71, respectively.

Net income for the three months ended March 31, 2026, was $58.9 million compared to net income of $43.6 million for the three months ended March 31, 2025.

Diluted net income per share for the three months ended March 31, 2026 and March 31, 2025, was $0.35 and $0.26, respectively.

The year-over-year change is the result of the factors described above.

Net income from discontinued operations, net of tax, was $5.2 million for the nine months ended September 30, 2025 compared to $1.0 million for the nine months ended September 30, 2024.

Diluted net income per share from discontinued operations for the nine months ended September 30, 2025 and September 30, 2024, was $0.03 and $0.01, respectively.

Net income from discontinued operations, net of tax, was $0.0 million for the three months ended March 31, 2026 compared to net income from discontinued operations, net of tax, of $2.6 million for the three months ended March 31, 2025.

Diluted net income per share from discontinued operations for the three months ended March 31, 2026 and March 31, 2025, was $0.00 and $0.02, respectively.

Non-GAAP Financial Measures

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Adjusted EBITDA

Adjusted EBITDA is an important measure because, under our credit agreement, our ability to incur certain types of acquisition debt and certain types of subordinated debt, make certain types of acquisitions or asset exchanges, operate our business and make dividends or other distributions, all of which will impact our financial performance, is impacted by our Adjusted EBITDA, as our lenders measure our performance with a Net First Lien Leverage Ratio by comparing our senior secured bank indebtedness to our Adjusted EBITDA (see "Covenant Compliance" for additional discussion of this ratio, including a reconciliation to our net income).

Adjusted EBITDA is an important measure because, under our credit agreement, our ability to incur certain types of acquisition debt and certain types of subordinated debt, make certain types of acquisitions or asset exchanges, operate our business and make dividends or other distributions, all of which will impact our financial performance, is impacted by our Adjusted EBITDA, as our lenders measure our performance with a Total Net Leverage Ratio by comparing our senior secured bank indebtedness to our Adjusted EBITDA (see "Covenant Compliance" for additional discussion of this ratio, including a reconciliation to our net income).

"Adjusted EBITDA" is the term we use to describe EBITDA as defined and adjusted in our credit agreement, which is net income, adjusted for the items summarized in the table in the "Covenant Compliance" section.

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Further, although not included in the calculation of Adjusted EBITDA in the "Covenant Compliance" section below, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from mergers, acquisitions or dispositions to restructuring, and/or exclude one-time transition expenditures that we anticipate incurring to realize cost savings before such savings have occurred.

The calculation of Adjusted EBITDA under our credit agreement as of September 30, 2025, is presented in the table in the "Covenant Compliance" section below.

The calculation of Adjusted EBITDA under our credit agreement as of March 31, 2026, is presented in the table in the "Covenant Compliance" section below.

However, the results of such calculation could differ in the future based on the different types of adjustments that may be included in such respective calculations at the time.

For the nine months ended September 30, 2025, we reported net income of $155.9 million and Adjusted EBITDA for the same period of $338.1 million.

For the three months ended March 31, 2026, we reported net income of $58.9 million and Adjusted EBITDA for the same period of $116.0 million.

See "Covenant Compliance" for a reconciliation of Adjusted EBITDA to GAAP net income.

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Events of default include the failure to pay principal and interest when due, a material breach of a representation or warranty, certain non-payments or defaults under other indebtedness, covenant defaults, events of bankruptcy and a change of control.

Certain covenants contained in the credit agreement restrict our ability to take certain actions, such as incurring additional debt or making acquisitions, if we are unable to meet a maximum total Net First Lien Leverage Ratio (consolidated indebtedness to Adjusted EBITDA) of 5.00 to 1.00 as of the end of each fiscal quarter.

As of September 30, 2025, our Net First Lien Leverage Ratio was 0.63 to 1.00.

Certain covenants contained in the credit agreement restrict our ability to take certain actions, such as incurring additional debt or making acquisitions, if we are unable to meet a maximum Total Net Leverage Ratio (consolidated indebtedness to Adjusted EBITDA) of 4.00 to 1.00 as of the end of each fiscal quarter.

As of March 31, 2026, our Total Net Leverage Ratio was 0.57 to 1.00.

Failure to comply with these covenants could limit our long-term growth prospects by hindering our ability to borrow under the revolver, to obtain future debt and/or to make acquisitions.

Set forth below is a reconciliation of net income to Adjusted EBITDA for the periods indicated below.

(in millions) Nine months ended September 30, 2024 Twelve months ended December 31, 2024 Nine months ended September 30, 2025 Twelve months ended September 30, 2025

(in millions) Three months ended March 31, 2025 Twelve months ended December 31, 2025 Three months ended March 31, 2026 Twelve months ended March 31, 2026

Net income $ 43.6 $ 198.0 $ 58.9 $ 213.3

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Actuarial gain on pension and other postretirement benefit obligations — (0.5) — (0.5)

Other (income) expense, net (2) 4.5 5.9 (6.7) (5.3)

Other income, net (2) — (5.5) (1.0) (6.5)

Interest expense, net 7.3 28.6 6.2 27.5

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Consolidated indebtedness (6) $ 264.6

Net First Lien Leverage Ratio (7) 0.63

Total Net Leverage Ratio (7) 0.57

(1) Income from discontinued operations, net of tax is not included in Adjusted EBITDA in accordance with the terms of our credit agreement.

(2) Other (income) expense, net consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit costs associated with our defined benefit plans and other non-operational gains and losses as defined in our credit agreement.

(2) Other income, net consists primarily of gains and losses from foreign currency transactions, the non-service cost components associated with our defined benefit and postretirement plans and other non-operational gains and losses as defined in our credit agreement.

(3) In accordance with the terms in our credit agreement, restructuring and other similar charges is comprised of costs associated with workforce reductions, asset impairments, lease termination costs, and other facility rationalization costs.

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(5) Other, net consists of gains and losses on the disposition of long-lived assets per the credit agreement.

(6) Our credit agreement defines our consolidated indebtedness as the sum of all indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of indebtedness for borrowed money and capitalized lease obligations, less unrestricted cash, which was $227.8 million (as defined by the credit agreement) at September 30, 2025.

(7) Our credit agreement defines the Net First Lien Leverage Ratio as the ratio of consolidated indebtedness (as described above) to Adjusted EBITDA for the trailing four fiscal quarters.

(6) Our credit agreement defines our consolidated indebtedness as the sum of all indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of indebtedness for borrowed money and capitalized lease obligations, less unrestricted cash, which was $234.4 million (as defined by the credit agreement) at March 31, 2026.

(7) Our credit agreement defines the Total Net Leverage Ratio as the ratio of consolidated indebtedness (as described above) to Adjusted EBITDA for the trailing four fiscal quarters.

Liquidity and Capital Resources

On February 19, 2026, the Company increased our revolving credit facility commitment from $200.0 million to $550.0 million and further extended the maturity date to February 19, 2031.

Refer to Item 1, Note 12, Long-Term Debt for further information.

Our primary sources of liquidity are available cash and cash equivalents, cash flow from operations, and borrowing availability of up to $550.0 million under our revolving credit facility.

As of September 30, 2025, we had $260.1 million of cash and cash equivalents and $189.9 million of additional borrowing capacity under our revolving credit facility.

As of September 30, 2025, the available borrowings under our credit facility were reduced by $10.1 million due to outstanding letters of credit.

As of March 31, 2026, we had $273.5 million of cash and cash equivalents and $540.1 million of additional borrowing capacity under our revolving credit facility.

As of March 31, 2026, the available borrowings under our credit facility were reduced by $9.9 million due to outstanding letters of credit.

As of December 31, 2025, we had $300.5 million of cash and cash equivalents and $189.9 million of additional borrowing capacity under our revolving credit facility.

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We believe this resource is adequate for our expected short-term and long-term needs.

Net cash provided by operating activities was $254.8 million and $229.9 million during the nine months ended September 30, 2025 and 2024, respectively.

The change in year-over-year operating cash flows was primarily the result of an increase in net income partially offset by cash used for trade working capital during the nine months ended September 30, 2025.

Cash used for investing activities was $20.7 million during the nine months ended September 30, 2025 and $11.1 million during the nine months ended September 30, 2024.

Investing activities during the nine months ended September 30, 2025, consisted of $20.7 million of capital expenditures.

Investing activities during the nine months ended September 30, 2024, consisted of $12.7 million of capital expenditures, which were partially offset by $1.6 million from the sale of certain long-lived assets.

Cash used for financing activities was $174.1 million during the nine months ended September 30, 2025, compared to $165.8 million during the nine months ended September 30, 2024.

During the nine months ended September 30, 2025, we utilized $0.6 million of cash for payments on finance leases, $134.9 million to repurchase outstanding shares of our common stock, and $45.4 million for the payment of common stock dividends, which was partially offset by $6.8 million of proceeds from the exercise of stock options and ESPP contributions, net of taxes withheld and paid on employees' share-based awards.

During the nine months ended September 30, 2024, we utilized $0.6 million of cash for payments on finance leases, $129.9 million to repurchase outstanding shares of our common stock, and $41.3 million for the payment of common stock dividends, which was partially offset by $6.0 million of proceeds from the exercise of stock options and ESPP contributions, net of taxes withheld and paid on employees' share-based awards.

As of September 30, 2025, we had $496.4 million of total indebtedness outstanding as follows (in millions):

Net cash provided by operating activities was $46.1 million and $42.9 million during the three months ended March 31, 2026 and March 31, 2025, respectively.

The change in year-over-year operating cash flows was primarily the result of an increase in net income and timing of other assets partially offset by higher use of cash for trade working capital during the three months ended March 31, 2026.

Cash used for investing activities was $3.4 million during the three months ended March 31, 2026 and $4.3 million during the three months ended March 31, 2025.

Investing activities during the three months ended March 31, 2026, consisted of $3.4 million of capital expenditures.

Investing activities during the three months ended March 31, 2025, consisted of $4.3 million of capital expenditures.

Cash used for financing activities was $69.2 million during the three months ended March 31, 2026, compared to $92.1 million during the three months ended March 31, 2025.

During the three months ended March 31, 2026, we utilized $0.3 million of cash for payments on finance leases, $50.0 million to repurchase outstanding shares of our common stock, $18.4 million for the payment of common stock dividends, and $3.0 million for payment of debt issuance costs, which was partially offset by $2.5 million of proceeds from the exercise of stock options and ESPP contributions.

During the three months ended March 31, 2025, we utilized $0.2 million of cash for payments on finance leases, $77.4 million to repurchase outstanding shares of our common stock, and $15.2 million for the payment of common stock dividends, which was partially offset by $0.7 million of proceeds from the exercise of stock options and ESPP contributions, net of taxes withheld and paid on employees' share-based awards.

As of March 31, 2026, we had $499.0 million of total indebtedness outstanding as follows (in millions):

Total Debt at

September 30, 2025

March 31, 2026

Current Maturities of Debt Long-term

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Total $ 499.0 $ 1.4 $ 497.6

(1) Includes unamortized original issue discount and debt issuance costs of $4.3 million at September 30, 2025.

(1) Includes unamortized original issue discount and debt issuance costs of $3.6 million at March 31, 2026.

See Item 1, Note 12, Long-Term Debt for a description of our outstanding indebtedness.

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