FRANKLIN ELECTRIC CO INC

Previous wording

Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for management’s discussion and analysis of its financial condition and results of operations. The following is management’s discussion and analysis of the Company's financial condition and results of operations for the second quarter and six months ended June 30, 2026 and 2025.

Current wording

Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for management’s discussion and analysis of its financial condition and results of operations. The following is management’s discussion and analysis of the Company's financial condition and results of operations for the third quarter and nine months ended September 30, 2026 and 2025.

Previous wording

In April of 2026, the Company acquired Benson Pump Corporation (“Benson Pump”). Benson Pump is a professional groundwater distributor in Arkansas and operates within the Distribution segment. In May of 2026, the Company acquired Wood Brothers Industries. Wood Brothers Industries is a water treatment wholesale supplier in Nebraska and operates as a subsidiary of Water Systems. Acquisitions contributed approximately $15.0 million of incremental net sales in the second quarter of 2026. Refer to Note 3 in Item 1 of this Quarterly Report on Form 10-Q for additional information on the Benson Pump and Wood Brothers Industries acquisitions.

Current wording

In April of 2026, the Company acquired Benson Pump Corporation (“Benson Pump”). Benson Pump is a professional groundwater distributor in Arkansas and operates within the Distribution segment. In May of 2026, the Company acquired Wood Brothers Industries. Wood Brothers Industries is a water treatment wholesale supplier in Nebraska and operates as a subsidiary of Water Systems. In July of 2026, the Company acquired Maynard's Water Conditioning (“Maynard's”). Maynard's is a water treatment retail store in Michigan and operates within the Water Systems segment. In September of 2026, the Company acquired Cat Pumps Corporation ("Cat Pumps"). Cat Pumps is a leading provider of high-pressure, positive displacement pumps based in Minnesota and operates within the Energy segment. Acquisitions contributed approximately$24.8 million of incremental net sales in the third quarter of 2026. Refer to Note 3 in Item 1 of this Quarterly Report on Form 10-Q for additional information on the Cat Pumps, Maynard's, Benson Pump, and Wood Brothers Industries acquisitions.

Previous wording

Net sales in the second quarter and first six months of 2026 increased 6 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increases were due to the incremental sales impact from recent acquisitions, volume and price realization, and the favorable impact of foreign currency translation. The Company's consolidated gross profit was $230.6 million and $405.6 million, respectively, for the second quarter and first six months of 2026, increases of 9 percent and 8 percent, respectively, from the prior-year periods. Diluted earnings per share was $1.46 and $2.23, respectively, for the second quarter and first six months of 2026, increases of $0.15 and $0.26, respectively, from the prior-year periods.

Current wording

Net sales in the third quarter and first nine months of 2026 increased 9 percent and 8 percent respectively, as compared to the prior-year periods. The sales increases were due to the incremental sales impact from volume and price realization, recent acquisitions, and the favorable impact of foreign currency translation. The Company's consolidated gross profit was $224.0 million and $629.6 million, respectively, for the third quarter and first nine months of 2026, increases of 7 percent and 8 percent, respectively, from the prior-year periods. Diluted earnings per share was $1.35 and $3.58, respectively, for the third quarter and first nine months of 2026, increases of $0.98 and $1.23, respectively, from the prior-year periods.

Previous wording

Net sales in the second quarter and first six months of 2026 were $622.9 million and $1.1 billion, respectively, and increased 6 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increase for the second quarter three months was primarily due to incremental sales impact from recent acquisitions of 3 percent, price and volume increases of 2 percent, and the positive impact of foreign exchange rates of 1 percent. The sales increase for the first six months was primarily due to higher sales volumes and price realization of 4 percent, positive impact of foreign exchange rates of 2 percent, and incremental sales impact from recent acquisitions of 2 percent.

Current wording

Net sales in the third quarter and first nine months of 2026 were $633.6 million and $1,756.9 million, respectively, and increased 9 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increase for the third quarter was primarily due to incremental sales impact from price and volume increases of 4 percent, recent acquisitions of 4 percent, and the positive impact of foreign exchange rates of 1 percent. The sales increase for the first nine months was primarily due to higher sales volumes and price realization of 4 percent, incremental sales impact from recent acquisitions of 3 percent, and positive impact of foreign exchange rates of 1 percent.

Previous wording

Water Systems net sales were $358.5 million in the second quarter of 2026, an increase of $17.7 million or 5 percent compared to the second quarter of 2025 net sales of $340.8 million. The sales increase for the second quarter was primarily due to price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions. Water Systems net sales were $676.6 million for the first six months of 2026, an increase of $48.5 million or 8 percent compared to the first six months of 2025 net sales of $628.1 million. The sales increase for the first six months was primarily due to volume increases, price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions.

Current wording

Water Systems net sales were $352.5 million in the third quarter of 2026, an increase of $15.9 million or 5 percent compared to the third quarter of 2025 net sales of $336.6 million. The sales increase for the third quarter was due to incremental sales impact from recent acquisitions and the sales impact of price realization and foreign exchange rates. Water Systems net sales were $1,029.1 million for the first nine months of 2026, an increase of $64.4 million or 7 percent compared to the first nine months of 2025 net sales of $964.7 million. The sales increase for the first nine months was primarily due to incremental sales impact from recent acquisitions and the sales impact of price realization and foreign exchange rates.

Previous wording

Water Systems net sales in the U.S. and Canada increased 8 percent in the second quarter and 7 percent in the first six months of 2026, as compared to the prior-year periods. In the second quarter of 2026, sales of groundwater pumping equipment increased 12 percent, sales of water treatment products increased 14 percent and sales of all other surface pumping equipment increased 7 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 10 percent compared to 2025. In the first six months of 2026, sales of groundwater pumping equipment increased 8 percent, sales of water treatment products increased 10 percent and sales of all other surface pumping equipment increased 11 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 10 percent compared to 2025. Water Systems net sales in markets outside the U.S. and Canada increased 1 percent in the second quarter and 8 percent in the first six months of 2026, as compared to the prior-year periods. The sales growth in the second quarter and the first six months of 2026 was due to incremental sales impact from recent acquisitions of 1 percent and 4 percent, respectively. Sales increased 5 percent in the second quarter and 6 percent in the first six months of 2026 due to the favorable impact from foreign exchange rates, as compared to prior-year periods. Excluding the impact of foreign currency translation and acquisitions, in both the second quarter and first six months of 2026, the sales growth in the Asia Pacific regions was more than offset by sales declines in the Latin America and European regions.

Current wording

Water Systems net sales in the U.S. and Canada increased 7 percent in the third quarter and 7 percent in the first nine months of 2026, as compared to the prior-year periods. In the third quarter of 2026, sales of groundwater pumping equipment increased 8 percent, sales of water treatment products increased 21 percent and sales of all other surface pumping equipment increased 9 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 17 percent compared to 2025. In the first nine months of 2026, sales of groundwater pumping equipment increased 8 percent, sales of water treatment products increased 14 percent and sales of all other surface pumping equipment increased 10 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 12 percent compared to 2025. Water Systems net sales in markets outside the U.S. and Canada increased 2 percent in the third quarter and 6 percent in the first nine months of 2026, as compared to the prior-year periods. The sales growth in the third quarter and the first nine months of 2026 was due to incremental sales impact from recent acquisitions of 1 percent and 3 percent, respectively. Sales increased 4 percent in the third quarter and 5 percent in the first nine months of 2026 due to the favorable impact from foreign exchange rates, as compared to prior-year periods. Excluding the impact of foreign currency translation and acquisitions, in both the third quarter and first nine months of 2026, the sales growth in the Asia Pacific regions was more than offset by sales declines in the Latin America and European regions.

Previous wording

Energy Systems net sales were $80.2 million in the second quarter of 2026, an increase of $2.7 million or 3 percent compared to the second quarter of 2025 net sales of $77.5 million. Energy Systems net sales were $151.9 million for the first six months of 2026, an increase of $7.6 million or 5 percent compared to the first six months of 2025 net sales of $144.3 million. The net sales increase was due to higher sales volumes and price realization.

Current wording

Energy Systems net sales were $91.7 million in the third quarter of 2026, an increase of $11.7 million or 15 percent compared to the third quarter of 2025 net sales of $80.0 million. Energy Systems net sales were $243.6 million for the first nine months of 2026, an increase of $19.3 million or 9 percent compared to the first nine months of 2025 net sales of $224.3 million. The net sales increase was due to higher sales volumes and price realization and recent acquisitions.

Previous wording

Energy Systems net sales in the U.S. and Canada increased 1 percent in the second quarter and 2 percent in the first six months of 2026, as compared to the prior-year periods. The increase was primarily in fuel management systems and pumping systems. Outside the U.S. and Canada, Energy Systems sales increased 12 percent in the second quarter and 18 percent in the first six months of 2026, as compared to the prior-year periods, due primarily to sales growth in the European and African regions.

Current wording

Energy Systems net sales in the U.S. and Canada increased 15 percent in the third quarter and 7 percent in the first nine months of 2026, as compared to the prior-year periods. Energy Systems sales increased due to acquisitions and higher sales of fuel management systems and grid solutions. Outside the U.S. and Canada, Energy Systems sales increased 12 percent in the third quarter and 16 percent in the first nine months of 2026, as compared to the prior-year periods, due to acquisitions and sales growth in the European and Asian regions.

Previous wording

Distribution net sales were $221.1 million in the second quarter of 2026, an increase of $21.1 million or 11 percent compared to the second quarter of 2025 net sales of $200.0 million. Distribution net sales were $372.0 million for the first six months of 2026, an increase of $30.1 million or 9 percent compared to the first six months of 2025 net sales of $341.9 million. The net sales increase was due to higher sales volumes and price realization and the incremental sales impact from recent acquisitions.

Current wording

Distribution net sales were $226.1 million in the third quarter of 2026, an increase of $28.8 million or 15 percent compared to the third quarter of 2025 net sales of $197.3 million. Distribution net sales were $598.1 million for the first nine months of 2026, an increase of $59.0 million or 11 percent compared to the first nine months of 2025 net sales of $539.1 million. The net sales increase was due to higher sales volumes and price realization and the incremental sales impact from recent acquisitions.

Previous wording

The gross profit margin ratio was 37.0 percent and 36.1 percent in the second quarter and first six months of 2026, respectively, and 36.1 percent and 36.0 percent in the second quarter and first six months of 2025, respectively. The gross profit margin was favorably impacted in the second quarter by tariff refunds while the first six months of 2026 was impacted by an unfavorable product and geographic sales mix shift.

Current wording

The gross profit margin ratio was 35.4 percent and 35.8 percent in the third quarter and first nine months of 2026, respectively, and 35.9 percent and 36.0 percent in the third quarter and first nine months of 2025, respectively. The gross profit margin was unfavorably impacted in thethird quarter by inflationary costs partially offset bytariff refunds while the first nine months of 2026 was impacted by an unfavorable product and geographic sales mix shift partially offset by tariff refunds.

Previous wording

SG&A expenses were $132.1 million in the second quarter and $255.1 million in the first six months of 2026 compared to $123.5 million in the second quarter and $243.2 million in the first six months of 2025. SG&A expenses increased in the second quarter and first six months of 2026 from the incremental expense impact of recent acquisitions. The SG&A expenses ratio (SG&A as a percentage of net sales) was 21.2 percent and 22.7 percent in the second quarter and first six months of 2026, respectively, and 21.0 percent and 23.3 percent in the second quarter and first six months of 2025, respectively.

Current wording

SG&A expenses were $137.2 million in the third quarter and $392.3 million in the first nine months of 2026 compared to $123.5 million in the third quarter and $366.6 million in the first nine months of 2025. SG&A expenses increased in the third quarter and first nine months of 2026 from the incremental expense impact of recent acquisitions. The SG&A expenses ratio (SG&A as a percentage of net sales) was 21.7 percent and 22.3 percent in the third quarter and first nine months of 2026, respectively, and 21.2 percent and 22.6 percent in the third quarter and first nine months of 2025, respectively.

Previous wording

There were $0.4 million and $4.3 million in restructuring expenses in the second quarter and first six months of 2026, compared to $0.2 million and $0.3 million restructuring expenses in the second quarter and first six months of 2025. Restructuring expenses were primarily from continued manufacturing realignment activities.

Current wording

There were $0.3 million and $4.5 million in restructuring expenses in the third quarter and first nine months of 2026, compared to $0.1 million and $0.4 million restructuring expenses in the third quarter and first nine months of 2025. Restructuring expenses were primarily due to continued manufacturing realignment activities.

Previous wording

Water Systems operating income in the second quarter and first six months of 2026 was $65.2 million and $109.7 million, respectively, increases of $3.4 million and $4.4 million, respectively, as compared to the prior-year periods. The second quarter operating income margin was 18.2 percent, an increase of 10 basis points from 18.1 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 16.2 percent, a decrease of 60 basis points from 16.8 percent in the first six months of 2025. The increase in operating income in the second quarter was primarily due to higher sales and tariff refunds. The decrease in margin for the first six months was primarily due to an unfavorable product and geographic sales mix shift.

Current wording

Water Systems operating income in the third quarter and first nine months of 2026 was $58.9 million and $168.6 million, respectively, a decrease of $1.3 million and an increase $3.1 million, respectively, as compared to the prior-year periods. The third quarter operating income margin was 16.7 percent, a decrease of 120 basis points from 17.9 percent in the third quarter of 2025. The first nine months of 2026 operating income margin was 16.4 percent, a decrease of 80 basis points from 17.2 percent in the first nine months of 2025. The decrease in operating income in the third quarter was primarily due to an unfavorable product and geographic sales mix shift as well asacquisition-related transaction expenses. The increase in operating income for the first nine months was primarily due to higher sales and tariff refunds partially offset by higher material costs.

Previous wording

Energy Systems operating income in the second quarter and first six months of 2026 was $27.9 million and $52.0 million, respectively, a decrease of $1.2 million and an increase of $1.0 million, respectively, as compared to the prior-year periods. The second quarter operating income margin was 34.8 percent, a decrease of 270 basis points from 37.5 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 34.2 percent, a decrease of 110 basis points from 35.3 percent in the first six months of 2025. The decrease in margin was primarily due to $4.5 million legal settlement recorded in the second quarter of 2026.

Current wording

Energy Systems operating income in the third quarter and first nine months of 2026 was $23.7 million and $75.7 million, respectively, a decrease of $1.7 million and $0.7 million, respectively, as compared to the prior-year periods. The third quarter operating income margin was 25.8 percent, a decrease of 600 basis points from 31.8 percent in the third quarter of 2025. The first nine months of 2026 operating income margin was 31.1 percent, a decrease of 300 basis points from 34.1 percent in the first nine months of 2025. The decrease in margin was primarily due to acquisition-related transaction expenses and amortization of purchase accounting adjustments from the fair value of inventory acquired.

Previous wording

Distribution operating income in the second quarter and first six months of 2026 was $19.7 million and $22.7 million, respectively, increases of $3.6 million and $4.5 million, respectively, as compared to the prior-year periods. The second quarter operating income margin was 8.9 percent, an increase of 80 basis points from 8.1 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 6.1 percent, an increase of 80 basis points from 5.3 percent in the first six months of 2025. Operating income and operating income margins increased primarily due to higher sales and cost structure actions implemented in 2025.

Current wording

Distribution operating income in the third quarter and first nine months of 2026 was $20.6 million and $43.2 million, respectively, increases of $4.3 million and $8.6 million, respectively, as compared to the prior-year periods. The third quarter operating income margin was 9.1 percent, an increase of 80 basis points from 8.3 percent in the third quarter of 2025. The first nine months of 2026 operating income margin was 7.2 percent, an increase of 80 basis points from 6.4 percent in the first nine months of 2025. Operating income and operating income margins increased primarily due to higher sales and cost structure actions implemented in 2025.

Previous wording

Operating income-Eliminations/Other in the second quarter and first six months of 2026 was $19.2 million and $42.7 million, respectively, increases of $0.3 million and $0.4 million, respectively, as compared to the prior-year periods. Operating income-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses. The intersegment profit elimination impact in the second quarter and first six months of 2026 compared to the prior-year periods of 2025 was an unfavorable $1.2 million and $1.3 million, respectively. The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer. General and administrative expenses decreased $0.9 million and $0.8 million, respectively, compared to the previous year’s periods.

Current wording

Operating income-Eliminations/Other in the third quarter and first nine months of 2026 was $(16.7) million and $(59.3) million, respectively, an increase of $0.1 million and a decrease of $0.2 million, respectively, as compared to the prior-year periods. Operating income-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses. The intersegment profit elimination in the third quarter of 2026 compared to the prior-year period of 2025 had no impact. For the first nine months of 2026 compared to the prior-year period of 2025 the intersegment profit elimination impact was an unfavorable $1.2 million. The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer. General and administrative expenses decreased by $0.1 million and $1.0 million, respectively, compared to the previous year’s periods.

Previous wording

Interest expense was $3.5 million and $5.8 million in the second quarter and first six months of 2026, respectively, and $2.8 million and $4.6 million in the second quarter and first six months of 2025, respectively. The increases in the second quarter and first six months of 2026 were primarily driven by higher average amount of outstanding debt.

Current wording

Interest expense was $(4.7) million and $(10.5) million in the third quarter and first nine months of 2026, respectively, and $(3.5) million and $(8.1) million in the third quarter and first nine months of 2025, respectively. The increases in the third quarter and first nine months of 2026 were primarily driven by a higher average amount of outstanding debt.

Previous wording

Other income / (expense), net was a net gain of $1.3 million and a net gain of $1.0 million in the second quarter and first six months of 2026, respectively, and a net loss of $(0.2) million and a net gain of $0.7 million in the second quarter and first six months of 2025, respectively.

Current wording

Other income / (expense), net was a net gain of $1.2 million and a net gain of $2.2 million in the third quarter and first nine months of 2026, respectively, and a net loss of $(0.2) million and a net gain of $0.5 million in the third quarter and first nine months of 2025, respectively.

Previous wording

Foreign currency-based transactions produced an expense of $2.5 million and $2.1 million in the second quarter and first six months of 2026, respectively, and an expense of $4.5 million and $5.8 million in the second quarter and first six months of 2025, respectively. The results in the second quarters and first six months of 2026 and 2025 are primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent.

Current wording

Foreign currency-based transactions produced an expense of $(2.3) million and $(4.4) million in the third quarter and first nine months of 2026, respectively, and an expense of $(2.7) million and $(8.5) million in the third quarter and first nine months of 2025, respectively. The results in the third quarters and first nine months of 2026 and 2025 are primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires the functional currency of the entity be changed to the reporting currency of its parent.

Previous wording

The provision for income taxes in the second quarter and first six months of 2026 was $22.8 million and $33.9 million, respectively, and $20.1 million and $30.5 million in the second quarter and first six months of 2025, respectively. The effective tax rate for the second quarter and first six months of 2026 was 25.7 percent and 25.2 percent respectively, and 24.9 percent for both the second quarter and the first six months of 2025. The increase in the effective tax rate was primarily due to increased unfavorable discrete events in 2026.

Current wording

The provision for income taxes in the third quarter and first nine months of 2026 was $19.7 million and $ 53.6 million, respectively, and $6.3 million and $36.9 million in the third quarter and first nine months of 2025, respectively. The effective tax rate for the third quarter and first nine months of 2026 was 24.4 percent and 24.9 percent respectively, and 26.9 percent and 25.3 percent for the third quarter and the first nine months of 2025, respectively. The decrease in the effective tax rate was primarily due to a mix of foreign earnings taxed at rates different than the U.S. statutory rate.

Previous wording

Net income in the second quarter and first six months of 2026 was $66.1 million and $100.8 million, respectively, and $60.6 million and $91.9 million in the second quarter and first six months of 2025, respectively. Net income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of 2026 was $65.7 million and $100.1 million, respectively, or $1.46 and $2.23 per diluted share. Net income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of 2025 was $60.1 million and $91.1 million, respectively, or $1.31 and $1.97 per diluted share.

Current wording

Net income in the third quarter and first nine months of 2026 was $61.0 million and $161.8 million, respectively, and $17.2 million and $109.1 million in the third quarter and first nine months of 2025, respectively. Net income attributable to Franklin Electric Co., Inc. in the third quarter and first nine months of 2026 was $60.6 million and $160.7 million, respectively, or $1.35 and $3.58 per diluted share. Net income attributable to Franklin Electric Co., Inc. in the third quarter and first nine months of 2025 was $16.7 million and $107.8 million, respectively, or $0.37 and $2.35 per diluted share.

Previous wording

As of June 30, 2026, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 14, 2030. As of June 30, 2026, the Company had $236.6 million borrowing capacity under its credit agreement as $6.4 million of commercial and standby letters of credit were outstanding and undrawn and $107.0 million revolver borrowings were drawn or outstanding.

Current wording

As of September 30, 2026, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 14, 2030. As of September 30, 2026, the Company had $217.3 million borrowing capacity under its credit agreement as $7.7 million of commercial and standby letters of credit were outstanding and undrawn and $125.0 million revolver borrowings were drawn or outstanding.

Previous wording

The Company maintains the Fourth Amended and Restated Note Purchase and Private Shelf Agreement (the "Prudential Agreement") with PGIM, Inc. and its affiliates, with a remaining borrowing capacity of $200.0 million as of June 30, 2026. The maturity date of the agreement is May 15, 2027.

Current wording

The Company maintains the Fourth Amended and Restated Note Purchase and Private Shelf Agreement (the "Prudential Agreement") with PGIM, Inc. and its affiliates, with a remaining borrowing capacity of $50.0 million as of September 30, 2026. The maturity date of the agreement is May 15, 2027.

Previous wording

In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement") with a remaining borrowing capacity on the New York Life Agreement of $175.0 million as of June 30, 2026. The maturity date of the agreement is May 15, 2027.

Current wording

In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement") with a remaining borrowing capacity on the New York Life Agreement of $25.0 million as of September 30, 2026. The maturity date of the agreement is May 15, 2027.

Previous wording

The Company has a firm, non‑cancellable purchase commitment with a vendor for copper with an aggregate remaining obligation of approximately $3.4 million, expected to be fulfilled within the next year.

Current wording

The Company has a firm, non‑cancellable purchase commitment with a vendor for copper with an aggregate remaining obligation of approximately $1.9 million, expected to be fulfilled within the next year.

Previous wording

At June 30, 2026, the Company had $76.7 million of cash and cash equivalents held in foreign jurisdictions, which is intended to be used to fund foreign operations. There is currently no need or intent to repatriate the majority of these funds in order to meet domestic funding obligations or scheduled cash distributions.

Current wording

At September 30, 2026, the Company had $102.0 million of cash and cash equivalents held in foreign jurisdictions, which is intended to be used to fund foreign operations. There is currently no need or intent to repatriate the majority of these funds in order to meet domestic funding obligations or scheduled cash distributions.

Previous wording

The following table summarizes significant sources and uses of cash and cash equivalents for the first six months of 2026 and 2025.

Current wording

The following table summarizes significant sources and uses of cash and cash equivalents for the first nine months of 2026 and 2025.

Previous wording

Net cash provided by operating activities was $58.7 million for the six months ended June 30, 2026 compared to $32.0 million provided by operating activities for the six months ended June 30, 2025. The change in operating cash flow was primarily attributable to an increase in net income and changes in working capital.

Current wording

Net cash provided by operating activities was $139.2 million for the nine months ended September 30, 2026 compared to $134.7 million provided by operating activities for the nine months ended September 30, 2025. The change in operating cash flow was primarily attributable to operational results offset by a payment related to a supplier agreement.

Previous wording

Net cash used in investing activities was $90.9 million for the six months ended June 30, 2026 compared to $127.3 million used in investing activities for the six months ended June 30, 2025. The change in investing cash flow was primarily attributable to decreased acquisition activity in the first six months of 2026 compared to the prior year.

Current wording

Net cash used in investing activities was $417.9 million for the nine months ended September 30, 2026 compared to $137.1 million used in investing activities for the nine months ended September 30, 2025. The change in investing cash flow was primarily attributable to increased acquisition activity in the first nine months of 2026 compared to the prior year.

Previous wording

Net cash provided by financing activities was $36.1 million for the six months ended June 30, 2026 compared to $22.1 million used in financing activities for the six months ended June 30, 2025. The change in financing cash flow was primarily due to decreased repurchases of Common Stock in 2026 compared to 2025.

Current wording

Net cash provided by financing activities was $336.2 million for the nine months ended September 30, 2026 compared to $112.2 million used in financing activities for the nine months ended September 30, 2025. The change in financing cash flow was primarily due to higher net borrowings and decreased repurchases of common stock in the first nine months of 2026 compared to the prior year.