MSA Safety Inc

Previous wording

MSA Safety Incorporated is the global leader in advanced safety products, technology and solutions. Driven by its singular mission of safety, the Company has been at the forefront of safety innovation since 1914, protecting workers and facility infrastructure around the world across a broad range of diverse end markets while creating sustainable value for shareholders. The Company's comprehensive product line, which is governed by rigorous safety standards across highly regulated industries, is used to protect workers and facility infrastructures around the world in a broad range of markets, including fire service, energy, utility, construction and industrial manufacturing applications as well as heating, ventilation, air conditioning and refrigeration ("HVAC-R"). The Company's principal product categories are fire service, detection and industrial personal protective equipment ("PPE"). Core products for fire service include self-contained breathing apparatus ("SCBA"), protective apparel and helmets; core products for detection include fixed gas and flame detection ("FGFD") systems and portable gas detection instruments; and core products for industrial PPE include industrial head protection and fall protection devices. In addition to its principal product categories, MSA continues to deploy and grow its MSA+™ solution, a business approach that combines MSA hardware, software, and services to simplify safety operations for customers and deliver recurring revenue.

Current wording

MSA Safety Incorporated is the global leader in advanced industrial safety technology products and solutions. Driven by its singular mission of safety, the Company has been at the forefront of safety innovation since 1914, protecting workers and facility infrastructure around the world across a broad range of diverse end markets while creating sustainable value for shareholders. MSA Safety operates through its Accelerate strategy, leveraging the MSA Business System (MBS) to drive continuous improvement, profitable above-market growth, and balanced capital allocation within a high-performance culture.

Previous wording

We tailor our product and solution offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions. To best serve these customer preferences, we have organized our business into four geographical operating segments that are aggregated into three reportable segments: Americas, International and Corporate.

Current wording

We tailor our product and solution offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions. To best serve these customer preferences, we have organized our business into four geographical operating segments that are aggregated into two reportable segments: Americas and International.

Previous wording

International. Our International segment includes companies in Europe, the Middle East and Africa ("EMEA") and the Asia Pacific region. In our largest International subsidiaries (Germany, France, U.K., Ireland and China), we develop, manufacture and sell a wide variety of products. In China, the products manufactured are sold primarily in China as well as in regional markets. Operations in other International segment countries focus primarily on sales and distribution in their respective home country markets. Although some of these companies may perform limited production, most of their sales are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland, Morocco and China or are purchased from third-party vendors.

Current wording

International. Our International segment includes companies in Europe, the Middle East and Africa (“EMEA”) and the Asia Pacific region. In our largest International subsidiaries (in Germany, France, U.K., Ireland and China), we develop, manufacture and sell a wide variety of products. In China, the products manufactured are sold primarily in China as well as in regional markets. Operations in other International segment countries focus primarily on sales and distribution in their respective home country markets. Although some of these companies may perform limited production, most of their sales are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland, Mexico, Morocco and China or are purchased from third-party vendors.

Previous wording

Corporate. The Corporate segment primarily consists of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs. Corporate general and administrative costs comprise the majority of the expense in the Corporate segment.

Current wording

Corporate. Corporate expenses not allocated to the reportable segments consist of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs. General and administrative costs and overhead comprise the majority of the corporate related expenses.

Previous wording

Net Sales. Net sales for the nine months ended September 30, 2025, were $1,363.9 million, an increase of $55.5 million, or 4.2%, compared to $1,308.4 million in the same period of 2024. Please refer to the Net Sales table for a reconciliation of the period over period sales change.

Current wording

Net Sales. Net sales for the three months ended March 31, 2026, were $463.6 million, an increase of $42.3 million, or 10.0%, compared to $421.3 million in the same period of 2025. Please refer to the Net Sales table for a reconciliation of the period over period sales change.

Previous wording

Net sales for the Americas segment were $926.6 million in the nine months ended September 30, 2025, an increase of $16.9 million, or 1.9%, compared to $909.7 million in the same period of 2024. Organic sales in the Americas segment increased 1.7% during the period, driven by growth in detection and industrial PPE partially offset by a decrease in fire service. M&C added $8.9 million of sales to the Americas segment during the period.

Current wording

Net sales for the Americas segment were $325.2 million in the three months ended March 31, 2026, an increase of $32.1 million, or 11.0%, compared to $293.1 million in the same period of 2025. Organic sales in the Americas segment increased 7.2% during the period, driven by growth in all three product groups with high single digit expansion in both detection and fire service. M&C added $5.3 million of sales to the Americas segment during the period.

Previous wording

Net sales for the International segment were $155.1 million in the third quarter of 2025, an increase of $21.9 million, or 16.4%, compared to $133.2 million in the same period of 2024. Organic sales in the International segment increased 4.9% during the period, driven by double-digit growth in industrial PPE and to a lesser extent detection partially offset by a decline in fire service. M&C added $10.0 million of sales to the International segment during the period.

Current wording

Net sales for the International segment were $138.4 million in the three months ended March 31, 2026, an increase of $10.2 million, or 8.0%, compared to $128.2 million in the same period of 2025. Organic sales in the International segment decreased 6.8% during the period, resulting from double-digit decline in fire service and detection largely driven by order timing, economic conditions in Europe, and the conflict in the Middle East partially offset by growth in industrial PPE. M&C added $9.6 million of sales to the International segment during the period.

Previous wording

Gross profit. Gross profit for the nine months ended September 30, 2025, was $631.7 million, an increase of $5.7 million or 0.9%, compared to $626.0 million in the same period of 2024. The ratio of gross profit to net sales was 46.3% during the nine months ended September 30, 2025 compared to 47.8% in the same period of 2024. The decrease in gross profit margin is primarily related to inflation and transactional foreign currency challenges as well as to a lesser extent the impacts of tariffs and additional amortization related to the M&C acquisition partially offset by price realization and improved productivity.

Current wording

Gross profit. Gross profit for the three months ended March 31, 2026, was $219.6 million, an increase of $26.2 million or 13.5%, compared to $193.4 million in the same period of 2025. The ratio of gross profit to net sales was 47.4% during the three months ended March 31, 2026, compared to 45.9% in the same period of 2025. The increase in gross profit margin is primarily related to price realization, productivity, product mix, and favorable transactional foreign currency partially offset by inflation, tariffs and additional amortization related to the M&C acquisition.

Previous wording

Selling, general and administrative expenses. SG&A expenses were $308.9 million during the nine months ended September 30, 2025, an increase of $14.6 million or 4.9%, compared to $294.3 million in the same period of 2024. Overall, SG&A expenses were 22.6% of net sales during the nine months ended September 30, 2025, compared to 22.5% of net sales in the same period of 2024. SG&A includes $9.5 million of expenses associated with M&C operations and $10.0 million of strategic transaction costs. Organic SG&A decreased $5.6 million or 1.9%. driven primarily by the absence of the net cost for product related legal matter from the prior year, lower variable compensation, discretionary expense management and lower professional service costs mostly offset by inflation and higher sales commission expense on double-digit detection growth.

Current wording

Selling, general and administrative expenses. Selling, general and administrative (“SG&A”) expenses were $107.7 million during the three months ended March 31, 2026, an increase of $13.7 million or 14.6%, compared to $94.0 million in the same period of 2025. Overall, SG&A expenses were 23.2% of net sales during the three months ended March 31, 2026, compared to 22.3% of net sales in the same period of 2025. SG&A includes $5.5 million of expenses associated with M&C operations and $2.2 million of strategic transaction costs. Organic SG&A increased $4.3 million or 4.6%, driven primarily by higher variable compensation largely due to the cancellation of unvested equity awards in the prior period in accordance with plan terms, higher professional service costs and inflation.

Previous wording

Research and development expense. Research and development expense was $49.2 million during the nine months ended September 30, 2025, a decrease of $0.5 million, compared to $49.7 million in the same period of 2024. Research and development expense was 3.6% of net sales in the nine months ended September 30, 2025 and 3.8% of net sales in the same period of 2024.

Current wording

Research and development expense. Research and development expense was $16.4 million during the three months ended March 31, 2026, an increase of $0.7 million, compared to $15.7 million in the same period of 2025. Research and development expense was 3.5% of net sales in the three months ended March 31, 2026, and 3.7% of net sales in the same period of 2025.

Previous wording

During the nine months ended September 30, 2025 and 2024, we capitalized $10.4 million and $10.0 million of software development costs, respectively. Depreciation expense for capitalized software development costs of $8.8 million and $8.2 million during the nine months ended September 30, 2025 and 2024, respectively, was recorded in costs of products sold on the unaudited Condensed Consolidated Statements of Income.

Current wording

During the three months ended March 31, 2026, and 2025, we capitalized $4.2 million and $3.3 million of software development costs, respectively. Amortization expense for capitalized software development costs of $3.3 million and $2.9 million during the three months ended March 31, 2026, and 2025, respectively, was recorded in costs of products sold on the unaudited Condensed Consolidated Statements of Income.

Previous wording

MSA remains committed to dedicating significant resources to research and development activities, including the recently introduced ALTAIR io™ 6 portable gas detector and V-Gard H2®full brim safety helmet. As we continue to invest a significant portion of our new product development into technology-based safety solutions, we anticipate that the historical relationship of research and development expense and capitalized software development costs to net sales will continue to evolve; however, we do not anticipate reductions in the relative level of total spend on research and development activities on an annual basis. Total spend on both software development and research and development activities was $59.6 million and $59.7 million during the nine months ended September 30, 2025, and 2024, respectively.

Current wording

The Company's commitment to innovation is supported by a research and development pipeline focused on integrating advanced technology into core safety equipment. Approximately half of MSA’s R&D engineers are now focused on software development to support the expansion of its connected ecosystems and HeSaaS models. As we continue to invest a significant portion of our new product development into technology-based safety solutions, we anticipate that the historical relationship of research and development expense to net sales will continue to evolve; however, we do not anticipate reductions in the relative level of total spend on research and development activities on an annual basis. Total spend on both software development and research and development activities was $20.6 million and $19.0 million during the three months ended March 31, 2026, and 2025, respectively.

Previous wording

Restructuring charges. Restructuring charges of $0.1 million during the third quarter of 2025 were primarily related to initiatives to right-size the organization in response to macroeconomic conditions. Restructuring charges of $1.2 million in the same period of 2024 were primarily related to initiatives to optimize our manufacturing footprint and improve productivity.

Current wording

Restructuring charges. Restructuring charges of $2.3 million during the three months ended March 31, 2026, were primarily related to management restructuring, footprint optimization and other ongoing initiatives to right-size the organization in response to macroeconomic conditions. Restructuring charges of $1.9 million in the same period of 2025 were primarily related to initiatives to right-size the organization in response to macroeconomic conditions, optimize our manufacturing footprint and improve productivity.

Previous wording

Currency exchange. Currency exchange losses were $13.2 million during the nine months ended September 30, 2025, compared to $4.7 million in the same period of 2024. The currency exchange activity for both periods related primarily to foreign currency exposure on unsettled inter-company balances. Refer to Note 17—Derivative Financial Instruments to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding our currency exchange rate risk management strategy.

Current wording

Currency exchange losses, net. Currency exchange losses were $0.2 million during the three months ended March 31, 2026, compared to $4.1 million in the same period of 2025. The currency exchange activity for both periods related primarily to foreign currency exposure on unsettled inter-company balances. Refer to Note 17—Derivative Financial Instruments to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding our currency exchange rate risk management strategy.

Previous wording

GAAP operating income. Consolidated operating income for the nine months ended September 30, 2025, was $257.9 million compared to $271.5 million in the same period of 2024. The decrease in operating results was primarily driven by increased SG&A expenses and currency exchange losses, partially offset by higher sales and lower restructuring charges as discussed further above.

Current wording

GAAP operating income. Consolidated operating income for the three months ended March 31, 2026, was $93.0 million compared to $77.8 million in the same period of 2025. The increase in operating results was primarily driven by higher gross profit and lower currency exchange losses partially offset by higher SG&A and restructuring charges as discussed further above.

Previous wording

Adjusted operating income. Americas adjusted operating income for the nine months ended September 30, 2025 was $260.7 million, a decrease of $15.8 million, or 5.7%, compared to $276.5 million in the same period of 2024. The decrease in adjusted operating income is attributable to lower gross profit and slightly higher SG&A expenses.

Current wording

Adjusted operating income. Americas adjusted operating income for the three months ended March 31, 2026, was $98.1 million, an increase of $19.4 million, or 24.7%, compared to $78.7 million in the same period of 2025. The increase in adjusted operating income is attributable to higher gross profit partially offset by higher SG&A expenses.

Previous wording

The following tables present a summary of adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA % by reportable segment. Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.

Current wording

The following tables present a summary of adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA %. Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.

Previous wording

Total other expense, net. Total other expense, net, for the nine months ended September 30, 2025 was $4.8 million, compared to $13.3 million in the same period of 2024, driven primarily by decreased interest expense related to lower interest rates as well as increased pension income driven by a higher expected rate of return.

Current wording

Total other expense (income), net. Total other expense for the three months ended March 31, 2026, was nominal, compared to other income of $0.2 million in the same period of 2025. Higher interest expense was mostly offset by increased pension income driven by a higher expected rate of return.

Previous wording

Income taxes. The reported effective tax rate for the nine months ended September 30, 2025 was 24.2% compared to 23.7% in the same period of 2024. The increase from the prior year was primarily driven by an increase in state income taxes.

Current wording

Income taxes. The reported effective tax rate for the three months ended March 31, 2026, was 23.4% compared to 23.5% in the same period of 2025. The slight decrease from the prior year was primarily driven by additional benefit related to export sales.

Previous wording

Net income. Net income was $192.0 million for the nine months ended September 30, 2025, or $4.87 per diluted share compared to net income of $197.0 million, or $4.98 per diluted share, in the same period of 2024.

Current wording

Net income. Net income was $71.3 million for the three months ended March 31, 2026, or $1.83 per diluted share compared to net income of $59.6 million, or $1.51 per diluted share, in the same period of 2025.

Previous wording

This report includes certain non-GAAP financial measures and operating ratios derived from non-GAAP financial measures. These financial measures and ratios include organic (referred to in our historical filings as constant currency) sales change, organic SG&A change, adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin %.

Current wording

This report includes certain non-GAAP financial measures and operating ratios derived from non-GAAP financial measures. These financial measures and ratios include organic (referred to in our historical filings as constant currency) sales change, organic SG&A change, adjusted operating income, adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin %.

Previous wording

Adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures. Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, net cost for product related legal matter, transaction costs and acquisition-related amortization. Total reportable segment adjusted EBITDA is reconciled above to the nearest GAAP financial measure, net income and, in addition to the items summarized above that are excluded from adjusted operating income (loss), excludes depreciation and amortization expense; interest expense; other income, net; and provision for income taxes. Adjusted operating margin % is defined as adjusted operating income (loss) divided by net sales to external customers and adjusted EBITDA margin % is defined as adjusted EBITDA divided by net sales to external customers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities as well as to make strategic decisions about the business and allocate resources. Additionally, these non-GAAP financial measures provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers.

Current wording

Adjusted operating income, adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures. Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, transaction costs and acquisition-related amortization. Total reportable segment adjusted EBITDA is reconciled above to the nearest GAAP financial measure, net income and, in addition to the items summarized above that are excluded from adjusted operating income (loss), excludes depreciation and amortization expense; interest expense; other income, net; and provision for income taxes. Adjusted operating margin % is defined as adjusted operating income (loss) divided by net sales to external customers and adjusted EBITDA margin % is defined as adjusted EBITDA divided by net sales to external customers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities as well as to make strategic decisions about the business and allocate resources. Additionally, these non-GAAP financial measures provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers.

Previous wording

Our main source of liquidity is operating cash flows, supplemented by borrowings. At September 30, 2025, approximately 47% of our long-term debt is at fixed interest rates with repayment schedules through 2036. The remainder of our long-term debt is at variable rates on an unsecured revolving credit facility due in 2030. At September 30, 2025, approximately 82% of our borrowings are denominated in U.S. dollars, which limits our exposure to currency exchange rate fluctuations.

Current wording

Our main source of liquidity is operating cash flows, supplemented by borrowings. Our principal liquidity requirements are for working capital, capital expenditures, principal and interest payments on debt, dividend payments and share repurchases. At March 31, 2026, approximately 47% of our long-term debt is at fixed interest rates with repayment schedules through 2036. The remainder of our long-term debt is at variable rates on an unsecured revolving credit facility due in 2030. At March 31, 2026, approximately 71% of our borrowings are denominated in U.S. dollars, which limits our exposure to currency exchange rate fluctuations.

Previous wording

We believe MSA's healthy balance sheet and access to significant capital at September 30, 2025 positions us well to navigate through a dynamic operating environment and other unexpected events. We maintain a balanced capital deployment strategy that focuses on investing for organic growth and pursuing inorganic growth opportunities, as well as returning cash to shareholders in the form of dividends and share buybacks.

Current wording

We believe MSA's healthy balance sheet and access to significant capital at March 31, 2026, positions us well to navigate through a dynamic operating environment and other unexpected events. We maintain a balanced capital deployment strategy that focuses on investing for organic growth and pursuing inorganic growth opportunities, returning cash to shareholders in the form of dividends, and share buybacks.

Previous wording

At September 30, 2025, the Company had cash and cash equivalents totaling $170.0 million. Cash, cash equivalents and restricted cash increased $5.8 million during the nine months ended September 30, 2025, compared to increasing $6.6 million during the same period in 2024. At September 30, 2025, $965.3 million of the existing $1.3 billion revolving credit facility was unused, including letters of credit issued under the facility.

Current wording

At March 31, 2026, the Company had cash and cash equivalents totaling $180.2 million. Cash and cash equivalents increased $15.1 million during the three months ended March 31, 2026, compared to increasing $6.1 million during the same period in 2025. At March 31, 2026, $972.3 million of the existing $1.3 billion revolving credit facility was unused, including letters of credit issued under the facility. The facility also provides an accordion feature that allows the Company to access an additional $500.0 million of capacity pending approval by MSA’s board of directors and from the bank group. The Company also has access under the Prudential Note Agreement and NYL Note Facility, subject to the issuers' acceptance, to $195.0 million and $50.0 million aggregate principal amount, respectively, of senior unsecured notes.

Previous wording

Operating activities. Operating activities provided cash of $241.5 million during the nine months ended September 30, 2025, compared to $188.5 million during the same period in 2024. The increased cash flow from operating activities was primarily related to lower cash used for variable compensation as compared to the prior year and lower cash usage for working capital needs. The working capital cash usage decrease related primarily to inventory, partially offset by higher cash use for accounts payable and accounts receivable.

Current wording

Operating activities. Operating activities provided cash of $75.7 million during the three months ended March 31, 2026, compared to $61.8 million during the same period in 2025. The increased cash flow from operating activities was primarily related to higher operating results and lower cash used for variable compensation and other accruals as compared to the prior year, partially offset by higher cash usage for working capital needs.

Previous wording

Investing activities. Investing activities used cash of $239.9 million during the nine months ended September 30, 2025, compared to using $39.7 million during the same period in 2024. The acquisition of M&C and capital expenditures, including a $19.6 million strategic footprint investment, drove the increase in cash outflows from investing activities during the nine months ended September 30, 2025. We remain committed to evaluating acquisition opportunities that will allow us to continue to grow in key end markets and geographies.

Current wording

Investing activities. Investing activities used cash of $10.6 million during the three months ended March 31, 2026, compared to using $10.8 million during the same period in 2025. Capital expenditures drove the decrease in cash outflows from investing activities during the three months ended March 31, 2026. We remain committed to evaluating acquisition opportunities that will allow us to continue to grow in key end markets and geographies.

Previous wording

Financing activities. Financing activities provided cash of $2.2 million during the nine months ended September 30, 2025, compared to using cash of $136.2 million during the same period in 2024. During the nine months ended September 30, 2025, we had net proceeds on long-term debt of $115.3 million, used primarily to fund the M&C acquisition, as compared to net payments of $51.0 million during the same period in 2024. We paid cash dividends of $61.6 million during the nine months ended September 30, 2025, compared to $58.7 million in the same period in 2024. We used cash of $50.0 million during the nine months ended September 30, 2025, to repurchase shares, including $40.0 million related to our share repurchase program, compared to $27.4 million in the same period in 2024, including $20.0 million related to our share repurchase program. The remainder in both periods related to our employee stock compensation programs.

Current wording

Financing activities. Financing activities used cash of $47.2 million during the three months ended March 31, 2026, compared to using cash of $45.6 million during the same period in 2025. During the three months ended March 31, 2026, we had net proceeds on long-term debt of $33.8 million as compared to net payments of $7.5 million during the same period in 2025. We paid cash dividends of $20.6 million during the three months ended March 31, 2026, compared to $20.0 million in the same period in 2025. We used cash of $60.4 million during the three months ended March 31, 2026, to repurchase shares, including $50.4 million related to our share repurchase program, compared to $18.3 million in the same period in 2025, including $10.0 million related to our share repurchase program. The remainder in both periods related to our employee stock compensation programs.

Previous wording

The position of the U.S. dollar relative to international currencies, primarily the euro and British pound, at September 30, 2025, resulted in a translation gain of $65.0 million being recorded to the cumulative translation adjustments shareholders' equity account during the nine months ended September 30, 2025, compared to a $1.8 million translation gain being recorded to the cumulative translation adjustments shareholders' equity account during the same period in 2024.

Current wording

The position of the U.S. dollar relative to international currencies, primarily the euro and British pound, at March 31, 2026, resulted in a translation loss of $6.1 million being recorded to the cumulative translation adjustments shareholders' equity account during the three months ended March 31, 2026, compared to a $22.5 million translation gain being recorded to the cumulative translation adjustments shareholders' equity account during the same period in 2025.

Previous wording

We made contributions of $5.7 million to our pension plans during the nine months ended September 30, 2025. We expect to make net contributions between $7.0 million and $8.0 million to our pension plans in 2025, which are primarily associated with statutorily required plans in the International reporting segment.

Current wording

We made contributions of $2.2 million to our pension plans during the three months ended March 31, 2026. We expect to make net contributions between $8.0 million and $10.0 million to our pension plans in 2026, which are primarily associated with statutorily required plans in the International reporting segment.

Previous wording

The Company had outstanding bank guarantees and standby letters of credit with banks as of September 30, 2025, totaling $10.4 million, of which $1.5 million relate to the senior revolving credit facility. These letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. At September 30, 2025, the Company has $0.9 million of restricted cash in support of these arrangements.

Current wording

The Company had outstanding bank guarantees and standby letters of credit with banks as of March 31, 2026, totaling $7.7 million, of which $1.5 million relate to the senior revolving credit facility. These letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. At March 31, 2026, the Company has $1.2 million of restricted cash in support of these arrangements.

Previous wording

The more critical judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements are discussed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024. During the nine months ended September 30, 2025, we made an acquisition that raised business combinations to a critical accounting policy and estimate used in the preparation of our consolidated financial statements.

Current wording

The more critical judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements are discussed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025.