PARK OHIO HOLDINGS CORP

(Dollars in millions, except per share data.)

NOTE 1 —Summary of Significant Accounting Policies

Consolidation and Basis of Presentation: Park-Ohio Holdings Corp. (“ParkOhio,” “we” or the “Company”) is a diversified international company providing world-class customers with a supply chain management outsourcing service, capital equipment used on their production lines, and manufactured components used to assemble their products. The Company operates three reportable segments: Supply Technologies, Assembly Components and Engineered Products. The consolidated financial statements include the accounts of the Company and all of its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company does not have off-balance sheet arrangements or financing with unconsolidated entities or other persons, other than the letters of credit disclosed in Note 10. The Company leases certain real properties owned by related parties as described in Note 14. Transactions with related parties are not material to the Company’s financial position, results of operations or cash flows.

Accounting Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates.

Cash Equivalents: The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are recorded at net realizable value and reduced by an allowance for amounts that may become uncollectible in the future. The allowance for doubtful accounts was $4.2 million and $3.9 million at December 31, 2025 and 2024, respectively. The Company’s policy is to measure expected credit losses on accounts receivable based on historical experience, current conditions and reasonable forecasts. During 2025 and 2024, we sold, without recourse, $147.5 million and $129.3 million, respectively, of accounts receivable to mitigate accounts receivable concentration risk and to increase working capital efficiency. Sales of accounts receivable are reflected as a reduction of accounts receivable in the Consolidated Balance Sheets, and the proceeds are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. Expense in the amount of $2.0 million and $2.4 million in 2025 and 2024, respectively, related to the discount on sale of accounts receivable is recorded in the Consolidated Statements of Income.

Inventories: Inventories are valued using first-in, first-out or the weighted-average inventory method and stated at the lower of cost or net realizable value.

Property, Plant and Equipment: Property, plant and equipment is carried at cost. Additions and improvements that extend the lives of assets are capitalized, and expenditures for repairs and maintenance are charged to operations as incurred. Depreciation of fixed assets, including amounts capitalized under finance leases, is computed by the straight-line method based on the estimated useful lives of the assets ranging from five to 40 years for buildings, andthree to 20 years for machinery and equipment.

The following table summarizes property, plant and equipment:

Goodwill and Indefinite-Lived Assets: In accordance with Accounting Standards Codification (“ASC”) 350, “Intangibles — Goodwill and Other” (“ASC 350”), goodwill and indefinite life intangible assets are not amortized but rather are tested annually for impairment as of October 1, or whenever events or changes in circumstances indicate there may be an indicator of impairment in accordance with ASC 350. Goodwill is tested for impairment at the reporting unit level and is based on the net assets of each reporting unit, including goodwill and intangible assets, compared to its fair value. Our reporting units have been identified one level below the operating segment level. The Company completed its annual goodwill and indefinite-lived intangibles impairment testing as of October 1 of each year, notingno impairment. To determine fair value for goodwill testing purposes, the Company uses an income approach, utilizing a discounted cash flow model based on forecasted cash flows and weighted average cost of capital, and a market multiple approach. To determine fair value for indefinite-lived intangibles testing, the Company uses a relief-of-royalty method.

See Notes 8 and 9 for additional disclosures about goodwill and indefinite-lived intangibles.

Impairment of Other Long-Lived Assets: Other long-lived assets, including operating lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired if the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Impairment losses are measured by comparing the estimated fair value of the asset group to its carrying value.

Fair Values of Financial Instruments: Certain financial instruments are required to be recorded at fair value. The Company measures financial assets and liabilities at fair value in three levels of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Changes in assumptions or estimation methods could affect the fair value estimates; however, we do not believe any such changes would have a material impact on our financial condition, results of operations or cash flows. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value at December 31, 2025 and 2024 because of the short-term nature of these instruments. The fair values of long-term debt and pension plan assets are disclosed in Note 10 and Note 15, respectively.

The Company has not changed its valuation techniques for measuring fair value during 2025, and there were no transfers between levels during the periods presented.

Pensions: We account for our pensions in accordance with ASC Topic 715, "Compensation — Retirement Benefits." Net actuarial gains and losses are amortized to expense when they exceed the 10% accounting corridor, based on the greater of the plan assets or benefit obligations, over an average employee's future service period. Refer to Note 15 for more information.

Income Taxes: The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and the tax bases of assets and liabilities and are measured using the current enacted tax rates. In determining these amounts, management determined the probability of realizing deferred tax assets, taking into consideration factors including historical operating results, cumulative earnings and losses, expectations of future earnings, taxable income and the extended period of time over which the postretirement benefits will be paid. As required by ASC 740, “Income Taxes” (“ASC 740”), the Company records valuation allowances if, based on the weight of available evidence, it is more likely than not that all or some portion of our deferred tax assets will not be realized.

We have elected to account for global intangible low-taxed income (“GILTI”) as a current period expense. The impact of GILTI for the years ended December 31, 2025, 2024 and 2023 was tax expense of $0.6 million, $1.5 million and $2.4 million, respectively.

Revenue Recognition: The Company recognizes revenue, other than from long-term contracts within the Engineered Products segment, when its obligations under the contract terms are satisfied and control transfers to the customer, typically upon shipment. Revenue from certain long-term contracts is accounted for over time, as products are manufactured or services are performed, as control transfers over time under these arrangements. We follow this method since reasonably reliable estimates of revenue and costs of a contract can be made. See Note 2 for additional disclosures regarding revenue.

Cost of Sales: Cost of sales is primarily comprised of direct materials and supplies consumed in the manufacture of product, manufacturing labor, depreciation expense, direct overhead expense, and shipping and handling costs.

Concentration of Credit Risk: The Company sells its products to customers in diversified industries. The Company performs ongoing credit evaluations of its customers’ financial condition but does not require collateral to support customer receivables. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, current conditions and reasonable forecasts. As of December 31, 2025 and 2024, the Company had uncollateralized receivables with five customers in the automotive industry, each with several locations, aggregating $30.4 million and $22.1 million, respectively, which represented approximately 11% and 9%, respectively, of the Company’s trade accounts receivable. During 2025 and 2024, sales to these customers amounted to approximately $200.4 million and $235.9 million, respectively, which represented approximately 13% and 14%, respectively, of the Company’s net sales.

Environmental: The Company expenses environmental costs related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Costs that extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. The Company records a liability when environmental assessments and/or remedial efforts are probable and can be reasonably estimated. The estimated liability of the Company is not reduced for possible recoveries from insurance carriers and is undiscounted.

Foreign Currency Translation: The functional currency of the Company's subsidiaries outside the United States is the local currency. Financial statements are translated into U.S. dollars at year-end exchange rates for assets and liabilities and weighted-average exchange rates during the period for revenues and expenses. The resulting translation adjustments are recorded in Accumulated other comprehensive loss in the Consolidated Balance Sheets. Gains and losses resulting from foreign currency transactions, including intercompany transactions that are not considered long-term investments, are included in the Consolidated Statements of Income.

Discontinued Operations: During the fourth quarter of 2022, we determined that our Aluminum Products business met the held-for-sale and discontinued operations accounting criteria. Accordingly, the Company has reported the held-for-sale assets and liabilities, the operating results and the cash flows of Aluminum Products in discontinued operations for all periods presented throughout this Annual Report on Form 10-K. On December 29, 2023, the Company sold this business to Angstrom Automotive Group (“Angstrom”). Unless otherwise indicated, amounts and activity in this Annual Report on Form 10-K are presented on a continuing operations basis. See Note 7, “Discontinued Operations,” for further information.

Warranties: The Company estimates the amount of warranty claims on sold products that may be incurred based on current and historical data. The actual warranty expense could differ from the estimates made by the Company based on product performance. The following table presents the changes in the Company’s product warranty liability:

Weighted-Average Number of Shares Used in Computing Earnings (Loss) Per Share: The following table sets forth the weighted-average number of shares used in the computation of earnings (loss) per share:

Outstanding stock awards with exercise prices greater than the average price of the common shares are anti-dilutive and are not included in the computation of diluted earnings per share. For the years ended December 31, 2025, 2024 and 2023, the anti-dilutive shares were 0.0 million,0.0 million and 0.1 million, respectively.

Accounting Standards Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance requires additional annual disclosures for income taxes. This guidance will not affect the recognition, measurement or financial statement presentation. The amendments are effective for fiscal years beginning after December 15, 2024. Refer to Note 11 for the additional disclosures.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance requires tabular footnote disclosure of certain operating expenses disaggregated into categories, such as employee compensation, depreciation, and intangible asset amortization, included within each interim and annual income statement’s expense caption, as applicable. The effective date of this guidance is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are in the process of evaluating the impact of adopting this guidance on our consolidated financial statement disclosures.

No other recently issued ASUs are expected to have a material impact on our results of operations, financial condition or liquidity.

NOTE 2 —Revenue

Substantially all of the Company’s contracts have a single performance obligation to transfer products to or, in limited cases, perform services for the customer. Accordingly, the Company recognizes revenue when its obligations under the contract terms are satisfied and control transfers to the customer. Revenue is recognized at an amount that reflects the consideration the Company expects to receive in exchange for the good or service, including estimated provisions for rebates, discounts, returns and allowances. The Company sells its products both directly to customers, and in limited cases, through distributors, generally under agreements with payment terms between 30-90 days. The Company has no financing components.

The majority of the Company’s revenue is derived from contracts (i) with an original contract length of one year or less, or (ii) for which it recognizes revenue at the amount at which it has the right to invoice as products or services are delivered. The Company has elected the practical expedient not to disclose the value of remaining performance obligations associated with these types of contracts.

The Company also has certain contracts which contain performance obligations that are immaterial in the context of the contract with the customer. The Company has elected the practical expedient not to assess whether these promised goods or services are performance obligations.

Supply Technologies provides our customers with Total Supply Management™, a proactive solutions approach that manages the efficiencies of every aspect of supplying production parts and materials to our customers’ manufacturing floor, from strategic planning to program implementation. Within this segment, contracts routinely consist of a long-term agreement or master service agreement with quantity and pricing specified through individual purchase orders. Revenue is recognized at a point in time, which is the shipping point, as that is when control transfers to the customer.

Assembly Components designs, develops and manufactures highly efficient, high pressure direct fuel injection fuel rails and pipes; fuel filler pipes that route fuel from the gas cap to the gas tank; and flexible multi-layer plastic and rubber assemblies used to transport fuel from the vehicle's gas tank and then, at extreme high pressure, to the engine's fuel injector nozzles. Within this segment, contracts routinely consist of a long-term agreement or master service agreement with quantity and pricing specified through individual purchase orders. Revenue is recognized at a point in time, which is at the shipping point, as that is when control transfers to the customer.

Engineered Products operates a diverse group of niche manufacturing businesses that design and manufacture a broad range of highly-engineered products, including induction heating and melting systems, pipe threading systems and forged and machined products. Engineered Products also produces and provides services and spare parts for the equipment it manufactures. In this segment, revenue is recognized for certain revenue streams at a point in time, and over time for other revenue streams. For point in time arrangements, revenue is recognized at the shipping point, as that is when control transfers to the customer. For over time arrangements, revenue is recognized over the time during which products are manufactured or services are performed, as control transfers under these arrangements over a period of time. Over time arrangements represented approximately 19% of the Company's total consolidated sales for the year ended December 31, 2025. The Company uses the input method to calculate the contract revenues to be recognized, which utilizes costs incurred to date in relation to total expected costs to satisfy the Company’s performance obligation under the contract. Incurred costs represent work performed and therefore best depict the transfer of control to the customer.

For over time arrangements, contract assets relate to revenue recognized in advance of billings to customers under long-term contracts accounted for under percentage of completion. These amounts, which totaled $49.4 million and $45.3 million at December 31, 2025 and December 31, 2024, respectively, are recorded as Other current assets in the Consolidated Balance Sheets.

For over time arrangements, contract liabilities relate to advances or deposits received from the Company’s customers before revenue is recognized. These amounts, which totaled $56.9 million and $53.1 million at December 31, 2025 and December 31, 2024, respectively, are recorded as Other accrued expenses in the Consolidated Balance Sheets.

The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer its products. As such, shipping and handling fees billed to customers in a sales transaction are recorded in Net sales, and shipping and handling costs incurred are recorded in Cost of sales. The Company has elected to exclude from Net sales any value-added, sales or other taxes which it collects concurrent with revenue-producing activities.

We disaggregate our revenue by product line and geographic region of our customer, as we believe these criteria best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. See details in the tables below.

NOTE 3 —Segments

The Company operates three reportable segments: Supply Technologies, Assembly Components and Engineered Products. The chief operating decision maker is the Company's Chief Executive Officer. For purposes of measuring business segment performance, the chief operating decision maker utilizes segment operating income, which is defined as revenues less expenses identifiable to the product lines within each segment. The Company does not allocate items that are non-operating; unusual in nature; or corporate expenses. Segment operating income reconciles to consolidated income before income taxes by adjusting for corporate expenses; loss on extinguishment of debt; gains on sales of assets; other unallocated expenses; other components of pension and other postretirement benefits income, net; and interest expense, net.

Results by business segment were as follows:

At December 31, 2025, 2024 and 2023, approximately 66%,66% and 67%, respectively, of the Company’s assets were located in the United States.

NOTE 4 —Asset Impairment Charges

During 2025, the Company recorded non-cash asset impairment charges in its Engineered Products segment totaling $8.9 million to write-down the carrying value of certain assets, primarily at its forging operations in Arkansas. The impairment charges, which included obsolete tooling and inventory as well as charges related to property, plant and equipment, are recorded on a separate line in the Consolidated Statements of Income.

NOTE 5 —Plant Closure and Consolidation

During 2025, in connection with its ongoing profit-improvement actions, the Company recorded plant closure and consolidation costs totaling $2.6 million across allthree of its segments.

During 2024, the Company consolidated an Assembly Components facility and closed an Engineered Products operation in Ohio. In connection with these actions, the Company received cash proceeds of $11.5 million and recorded a gain on sale of assets of $2.5 million, which is included on a separate line in the Consolidated Statements of Income.

During 2023, the Company incurred the following expenses related to plant closure and consolidation in connection with its profit-improvement actions across its businesses. The actions in the Assembly Components segment were primarily in connection with actions taken to close and consolidate its extrusion operations in Ohio, to relocate certain production to lower-cost facilities with open capacity, and to complete other cost-reduction actions.

The actions in the Engineered Product segment were primarily in connection with plant closure and consolidation of a facility in Ohio, and to complete other cost-reduction actions in this segment.

The Company sold certain real estate for cash proceeds and gains on sales as follows. Gains are recorded on a separate line in the Consolidated Statements of Income and are excluded from segment operating income.

NOTE 6 —Acquisitions

In February 2024, the Company acquired all of the outstanding shares of EMA Indutec GmbH (“EMA”), headquartered in Meckesheim, Germany, from the Aichelin Group, headquartered in Modling, Austria. EMA, which is included in our Engineered Products segment, is a leading manufacturer of induction heating equipment and converters and operates through itstwo locations in Meckesheim, Germany and Beijing, China. The purchase price, net of cash acquired, was $11.0 million.

The allocation of the purchase price of EMA is summarized as follows:

During 2024 and 2023, the Company paid $3.0 million and $2.9 million, respectively, as scheduled, related to deferred purchase price for the 2022 acquisitions of Charter Automotive (Changzhou) Co. Ltd. and Southern Fasteners & Supply, Inc.

NOTE 7 —Discontinued Operations

On December 29, 2023, the Company completed the sale of its Aluminum Products business to Angstrom for approximately $50 million in cash and promissory notes, plus the assumption of approximately $3 million of finance lease obligations. The total purchase price consisted of a cash down payment of $20.0 million paid to the Company in December 2022; cash of $15.5 million paid to the Company at closing; and promissory notes totaling $15.0 million payable to the Company on December 31, 2024, of which $10.0 million were contingent on the Aluminum Products business attaining certain purchase commitments during 2024. The Company determined that the purchase commitments were not attained during 2024 and subsequently wrote-off the $10.0 million contingent notes during 2024.

NOTE 8 —Goodwill

The changes in the carrying amount of goodwill by reportable segment are as follows:

NOTE 9 —Other Intangible Assets

Amortization expense of other intangible assets was as follows:

We estimate amortization expense for the five years subsequent to 2025 as follows:

NOTE 10 —Financing Arrangements

Debt consists of the following:

On July 31, 2025, Park-Ohio Industries, Inc. (“Park-Ohio”) completed the issuance of $350 million aggregate principal amount of 8.500% Senior Secured Notes due 2030 (the “2030 Notes”), in a private offering. The 2030 Notes were priced at 99.50% of par. The 2030 Notes are senior secured obligations of Park-Ohio and are guaranteed (with certain exceptions) by Park-Ohio's domestic subsidiaries that guarantee the debt under the Credit Agreement on a senior secured basis. Park-Ohio used the net proceeds from the offering of the 2030 Notes, along with cash on hand, to redeem all $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “2027 Notes”) and pay related fees and expenses.

On July 17, 2025, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”), in order to, among other things, (a) extend the maturity date to the fifth anniversary from the closing of the amendment, (b) permit the issuance of the 2030 Notes and (c) permit the 2030 Notes to be secured by (i) a first-priority lien on the substantially all of the U.S. equipment (including machinery) of the Park-Ohio and the Park-Ohio’s existing and future domestic subsidiaries (the “Guarantors”) that guarantee debt under the Credit Agreement (the “Notes Priority Collateral”) and (ii) a second-priority lien (junior to the Credit Agreement) on substantially all of the U.S. assets of Park-Ohio and the Guarantors (including the 65% pledge of the foreign equity owned by the Guarantors), other than assets constituting Notes Priority Collateral, securing the revolving credit facility (the “ABL Priority Collateral”). The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility. As of December 31, 2025, we had borrowing availability of $126.1 million under the Credit Agreement.

The following table represents fair value information of the Notes, classified as Level 1, at December 31, 2025 and 2024. The fair value was estimated using quoted market prices.

Maturities of short-term and long-term debt, excluding finance leases, during each of the five years subsequent to December 31, 2025 are as follows:

Foreign subsidiaries of the Company had $52.1 million of borrowings at December 31, 2025, which included $40.5 million under our Credit Agreement, and $10.3 million at December 31, 2024.

We had outstanding bank guarantees and letters of credit under our credit arrangements of approximately $32.7 million at December 31, 2025 and $38.5 million at December 31, 2024.

The weighted average interest rate on all debt was approximately 7.1% in 2025,7.0% in 2024 and 6.6% in 2023.

NOTE 11 —Income Taxes

(Loss) income from continuing operations before income taxes consists of the following:

Income tax expense consists of the following:

In 2025, the effective income tax rate of 11.8% was less than the U.S. statutory rate of 21%, primarily as a result of the tax benefit of the research and development tax credit partially offset by the impact of non-deductible expenses

Several countries in which Park-Ohio Holdings does business have proposed or enacted new tax laws or are actively considering changes to their tax laws to align with the Organization for Economic Co-operation and Development (“OECD”) proposals. For tax year 2025, the impact for those countries in which Park-Ohio Holdings operates who have enacted Pillar Two laws was not material to income tax expense. We will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.

In 2024, the effective tax rate of 11.0% was less than the U.S. statutory rate of 21%, primarily as a result of the tax benefit of the research and development tax credit and the release of certain valuation allowances.

In 2023, the effective tax rate of 20.5% approximated the U.S. statutory rate of 21%, as the tax benefits of the foreign tax credit and research and development tax credit were offset by the tax expense of foreign earnings, GILTI and non-deductible expenses.

The provision (benefit) for income taxes differs from the amount that would result by applying the applicable federal income tax rate to income before incomes taxes, as follows:

As previously disclosed for the years ending December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differed from the statutory federal income tax rate as follows:

Significant components of the Company’s net deferred income tax assets and liabilities are as follows:

At December 31, 2025, the Company has U.S., state and foreign net operating loss carryforwards as well as U.S. foreign tax credit carryforwards and research and development tax credit carryforwards for income tax purposes. The foreign net operating loss carryforward is $16.7 million, of which $9.5 million expires between 2026 and 2043 and the remainder has no expiration date. The Company has a tax benefit from a state net operating loss carryforward of $4.9 million, of which $4.1 million expires between 2026 and 2045 and the remainder has no expiration date. The Company also has a non-consolidated U.S. net operating loss carryforward of $1.1 million that expires between 2035 and 2036. The Company has recorded a valuation allowance of $5.5 million against these net operating loss carryforwards in jurisdictions where those losses are not expected to be realized. The foreign tax credit carryforward is $4.0 million and expires between 2032 and 2035. The U.S. research and development tax credit carryforward is $10.6 million and expires between 2031 and 2045.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $0.8 million at both December 31, 2025 and December 31, 2024, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. During 2025 and 2024, the Company recognized a tax benefit of approximately $0.1 million in net interest and penalties due to the expiration of various uncertain tax positions. The Company had approximately $0.1 million for the payment of interest and penalties accrued at December 31, 2025.

The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company’s tax years for 2015 through 2025 remain open for examination by the Internal Revenue Service and 2019 through 2025 remain open for examination by various state and foreign taxing authorities.

As of December 31, 2025, the Company has accumulated undistributed earnings generated by our foreign subsidiaries of approximately $272.8 million. We intend to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs.

Income taxes paid, net of refunds, were as follows:

NOTE 12 —Stock-Based Compensation

The Company follows the provisions of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires all share-based payments to employees to be recognized in the income statement based on their grant date fair values. Compensation expense for awards with service conditions only that are subject to graded vesting is recognized on a straight-line basis over the term of the vesting period.

A summary of activity for the year ended December 31, 2025 is as follows:

(a) Included in the granted amount are 2,422 restricted share units.

The Company recognized compensation expense of $5.5 million, $5.6 million and $6.5 million for the years ended December 31, 2025, 2024 and 2023, respectively, related to stock-based awards.

The total fair value of restricted shares and share units that vested during the years ended December 31, 2025, 2024 and 2023 was $5.7 million, $5.9 million and $6.9 million, respectively.

As of December 31, 2025, the Company had unrecognized compensation expense of $7.3 million related to restricted shares. The unrecognized compensation expense is expected to be recognized over a total weighted average period of 1.9 years.

NOTE 13 —Commitments and Contingencies

The Company is subject to a variety of claims, suits, investigations and administrative proceedings with respect to commercial, premises liability, product liability, employment, personal injury and environmental matters arising from the ordinary course of business. The Company records a liability for loss contingencies in the consolidated financial statements when a loss is known or considered probable and the amount can be reasonably estimated. Our provisions are based on historical experience, current information and legal advice, and they may be adjusted in the future based on new developments. Estimating probable losses requires the analysis of multiple forecasted factors that often depend on judgments and potential actions by third parties. Although it is not possible to predict with certainty the ultimate outcome or cost of these matters, the Company believes they will not have a material adverse effect on our consolidated financial statements.

Our subsidiaries are involved in a number of contractual and warranty-related disputes. We believe that appropriate liabilities for these contingencies have been recorded; however, actual results may differ materially from our estimates.

In addition to the routine claims, suits, investigations and proceedings and asserted claims noted above, we are also a co-defendant in approximately 116 cases asserting claims on behalf of approximately 160 plaintiffs alleging personal injury as a result of exposure to asbestos. These asbestos cases generally relate to production and sale of asbestos-containing products and allege various theories of liability, including negligence, gross negligence and strict liability, and seek compensatory and, in some cases, punitive damages. In every asbestos case in which we are named as a party, the complaints are filed against multiple named defendants. To the extent that any specific amount of damages is sought, the amount applies to claims against all named defendants.

Historically, we have been dismissed from asbestos cases on the basis that the plaintiff incorrectly sued one of our subsidiaries or because the plaintiff failed to identify any asbestos-containing product manufactured or sold by us or our subsidiaries. We intend to vigorously defend these asbestos cases and believe we will continue to be successful in being dismissed from such cases. However, it is not possible to predict the ultimate outcome of asbestos-related lawsuits, claims and proceedings due to the unpredictable nature of personal injury litigation.

Despite this uncertainty, and although our results of operations and cash flows for a particular period could be adversely affected by asbestos-related lawsuits, claims and proceedings, management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial condition, liquidity or results of operations. Among the factors management considered in reaching this conclusion were: (a) our historical success in being dismissed from these types of lawsuits on the bases mentioned above; (b) many cases have been improperly filed against one of our subsidiaries; (c) in many cases the plaintiffs have been unable to establish any causal relationship to us or our products or premises; (d) in many cases, the plaintiffs have been unable to demonstrate that they have suffered any identifiable injury or compensable loss at all or that any injuries that they have incurred did in fact result from alleged exposure to asbestos; and (e) the complaints assert claims against multiple defendants and, in most cases, the damages alleged are not attributed to individual defendants. Additionally, we do not believe that the amounts claimed in any of the asbestos cases are meaningful indicators of our potential exposure because the amounts claimed typically bear no relation to the extent of the plaintiff's injury, if any.

NOTE 14 -Lease Arrangements

We lease manufacturing facilities, warehouse space, office space, machinery and equipment, information technology equipment and vehicles under operating leases. We also leaseone building and numerous machinery and equipment under finance leases. For operating leases with terms greater than 12 months, we record the operating right-of-use asset and related lease liability at the present value of lease payments over the lease term. In certain real estate leases, we have options to renew lease terms, generally at our sole discretion. We evaluate renewal options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors.

The discount rate implicit in our operating leases is generally not determinable, and therefore the Company determines the discount rate for each lease based on its incremental borrowing rate. The incremental borrowing rate is calculated based on lease term, currency and collateral adjustments.

During 2025, the Company obtained right-of-use assets in exchange for new operating lease liabilities of $12.2 million.

Balance Sheet as of December 31, 2025 and 2024

Lease Expense for 2025, 2024 and 2023

Operating lease expense is recognized on a straight-line basis over the lease term, with variable payments recognized in the period those payments are incurred.

Cash Flow Information for 2025, 2024 and 2023

Maturities of Lease Liabilities as of December 31, 2025, were as follows:

Certain of the Company’s leases are with related parties at an annual rental expense of approximately $5.1 million. Transactions with related parties are not material to the Company’s financial position, results of operations or cash flows.

NOTE 15 —Pensions and Postretirement Benefits

The Company and its subsidiaries have pension plans, principally noncontributory defined benefit or noncontributory defined contribution plans, covering substantially all employees. In addition, the Company has an unfunded postretirement benefit plan. One of its defined benefit plans, covering most U.S. employees not covered by collective bargaining agreements, utilizes a cash balance formula. Under a cash balance formula, a plan participant accumulates a retirement benefit consisting of pay credits that are based upon a percentage of current eligible earnings and current interest credits. For the remaining defined benefit plans, benefits are based on the employee’s years of service. For the defined contribution plans, the costs charged to operations and the amount funded are based upon a percentage of the covered employees’ compensation.

The Company's objectives for the pension plan are to monitor the funded ratio; create general investment goals with regard to acceptable risk and liquidity needs ensuring the long-term interests of participants and beneficiaries are considered; and manage risk by minimizing the short-term and long-term risk of actual expenses and contribution requirements.

The following tables set forth the changes in benefit obligation, plan assets, funded status and amounts recognized in the consolidated balance sheet for the defined benefit pension and postretirement benefit plans as of December 31, 2025 and 2024:

Amounts recognized in the consolidated balance sheets consist of:

The pension plan weighted-average asset allocation at December 31, 2025 and 2024 and target allocation for 2026 are as follows:

The following table sets forth, by level within the fair value hierarchy, the pension plans assets:

Valuation Methodologies: Following is a description of the valuation methodologies used for pension plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2025 and 2024.

Common stock, equity securities and foreign stock - These securities consist of direct investments in the stock of publicly-traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1.

U.S. Government obligations, fixed income securities and corporate bonds - Valued at the closing price of each security.

Cash equivalents - Consists of primarily money market funds and certificates of deposit, for which book value equals fair value.

Common collective trusts - Valued at the net unit value of units held by the trust at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. Common collective trusts are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets.

Hedge funds - Consists of direct investments in hedge funds through limited partnership interests. Net asset values are based on the estimated fair value of the ownership interest in the investment as determined by the general partner. The majority of the holdings of the hedge funds are in equity securities traded on public exchanges. The investment terms of the hedge funds allow capital to be redeemed quarterly given prior notice with certain limitations. Hedge funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets.

For additional information regarding fair value measurements, see Note 1.

The following tables summarize the assumptions used in the valuation of pension and postretirement benefit obligations at December 31 and the measurement of the net periodic benefit cost in the following year. The Company used a spot rate approach by applying the specific spot rates along the yield curve to the relevant projected cash flows in the estimation of the service and interest components of benefit cost.

In determining its expected return on plan assets assumption for the year ended December 31, 2025, the Company considered historical experience, its asset allocation, expected future long-term rates of return for each major asset class, and an assumed long-term inflation rate. This assumption was supported by the asset return generation model, which projected future asset returns using simulation and asset class correlation.

Below is a table summarizing the Company’s expected future benefit payments and the expected payments due to Medicare subsidy over the next ten years:

The Company expects to make no contributions to its defined benefit plans in 2026 and beyond, as pension and postretirement benefits are expected to be paid out of plan assets.

In January 2008, a Supplemental Executive Retirement Plan (“SERP”) for the Company's former CEO was approved by the Compensation Committee of the Board of Directors. The SERP provides an annual supplemental retirement benefit of up to $0.4 million upon the former CEO’s termination of employment with the Company. The former CEO is fully vested in the SERP, which has a balance of $1.4 million as of December 31, 2025.

NOTE 16 —Accumulated Other Comprehensive Income (Loss)

The components of and changes in accumulated other comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023 were as follows:

No income taxes are provided on currency translation as foreign earnings are considered permanently re-invested.

NOTE 17 —Subsequent Events

On January 26, 2026, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend was paid on February 20, 2026, to shareholders of record as of the close of business on February 6, 2026 and resulted in cash payments of $1.8 million.