PREFORMED LINE PRODUCTS CO

Previous wording

The following discussion describes our results of operations for the three and six months ended June 30, 2025 and 2024. Our consolidated financial statements are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP"). Our discussions of the financial results include non-GAAP measures (e.g., foreign currency impact) to provide additional information concerning our financial results and provide information that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.

Current wording

The following discussion describes our results of operations for the three and nine months ended September 30, 2025 and 2024. Our consolidated financial statements are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP"). Our discussions of the financial results include non-GAAP measures (e.g., foreign currency impact) to provide additional information concerning our financial results and provide information that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.

Previous wording

Net sales of $169.6 million increased $30.9 million for the three months ended June 30, 2025 year-over-year and net sales of $318.1 million increased $38.5 million for the six months ended June 30, 2025 year-over-year, mainly due to an increase in energy and communication sales for the quarter. While our significant domestic manufacturing footprint provides a competitive advantage in the current high tariff environment, raw materials imports, particularly steel and aluminum, continue to be most impacted. While we continue to manage trade matters proactively, further tariff increases may give rise to inflationary pressures, which may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

Current wording

Net sales of $178.1 million increased $31.1 million for the three months ended September 30, 2025 year-over-year and net sales of $496.2 million increased $69.6 million for the nine months ended September 30, 2025 year-over-year, mainly due to an increase in energy and communication sales for the quarter. While our significant domestic manufacturing footprint provides a competitive advantage in the current high tariff environment, raw materials imports, particularly steel and aluminum, continue to be most impacted. Additionally, PLP-USA LIFO inventory valuation costs have accelerated due to tariffs, resulting in charges of $3.8 million and $6.2 million for the three-month and nine-month periods ending September 30, 2025. These amounts exclude cash-tax savings generated from lower pre-tax book income. While we continue to manage trade matters proactively, further tariff increases may give rise to inflationary pressures, which may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

Previous wording

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. The fluctuations of foreign currencies during the three and six months ended June 30, 2025 had an unfavorable impact on net sales of $0.5 million and $4.9 million, respectively. The fluctuations on foreign currencies had a de minimis impact on net income for the three-month period ended June 30, 2025 and an unfavorable impact on net income of $0.3 million, for the six-month period ended June 30, 2025. The fluctuations of foreign currencies during the three and six months ended June 30, 2024 had an unfavorable impact on net sales of $1.1 million and $0.3 million, respectively. The fluctuations on foreign currencies during the three and six months ended June 30, 2024 had a de minimis impact on net income. On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the three and six months ended June 30, 2025, was as follows:

Current wording

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. The fluctuations of foreign currencies during the three and nine months ended September 30, 2025 had a favorable impact on net sales of $1.9 million and an unfavorable impact of $3.0 million, respectively. The fluctuations on foreign currencies had a favorable impact of $0.3 million on net income for the three months ended September 30, 2025 and a de minimis impact on net income for the nine months ended September 30, 2025. The fluctuations of foreign currencies during the three and nine months ended September 30, 2024 had an unfavorable impact on net sales of $0.8 million and $1.1 million, respectively. The fluctuations on foreign currencies during the three and nine months ended September 30, 2024 had an unfavorable impact on net income of $0.1 million and $0.2 million, respectively. On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the three and nine months ended September 30, 2025, was as follows:

Previous wording

While uncertainty remains in the global economy due to tariffs and trade matters, we believe our business portfolio, including our significant U.S. manufacturing footprint, as well as our financial position, are sound and strategically well-positioned. We remain focused on assessing our global market opportunities and overall manufacturing capacity in conjunction with the requirements of local manufacturing in the markets that we serve. As necessary, we will modify redundant processes and further utilize our global manufacturing network to manage costs, including tariff-related impacts, increase sales volume and deliver value to our customers. Period cost containment continues to be a priority for the Company in 2025, and we continue to monitor and control discretionary spending where necessary. We have continued to invest in the business to expand into new markets for the Company, evaluate strategic mergers and acquisitions, improve efficiency, develop new products and increase our capacity. As of June 30, 2025, our liquidity remains strong with our bank debt to equity percentage at 7.9%. We can borrow needed funds at a competitive interest rate under the Facility.

Current wording

While uncertainty remains in the global economy due to tariffs and trade matters, we believe our business portfolio, including our significant U.S. manufacturing footprint, as well as our financial position, are sound and strategically well-positioned. We remain focused on assessing our global market opportunities and overall manufacturing capacity in conjunction with the requirements of local manufacturing in the markets that we serve. As necessary, we will modify redundant processes and further utilize our global manufacturing network to manage costs, including tariff-related impacts, increase sales volume and deliver value to our customers. Period cost containment continues to be a priority for the Company in 2025, and we continue to monitor and control discretionary spending where necessary. We have continued to invest in the business to expand into new markets for the Company, evaluate strategic mergers and acquisitions, improve efficiency, develop new products and increase our capacity. As of September 30, 2025, our liquidity remains strong with our bank debt to equity percentage at 8.3%. We can borrow needed funds at a competitive interest rate under the Facility.

Previous wording

Net sales. In 2025, net sales were $169.6 million, an increase of $30.9 million, or 22%, compared to 2024. Excluding the effect of currency translation, net sales increased 23% as summarized in the following table:

Current wording

Net sales. In 2025, net sales were $178.1 million, an increase of $31.1 million, or 21%, compared to 2024. Excluding the effect of currency translation, net sales increased 20% as summarized in the following table:

Previous wording

The increase in PLP-USA net sales of $19.4 million, or 32%, was primarily due to higher volumes in energy and communications sales. International net sales for the three months ended June 30, 2025 were unfavorably affected by $0.5 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $28.5 million increased $8.8 million, or 40%, primarily due to higher volumes in energy product sales and an increase in communications sales due to the acquisition of JAP Telecom in May 2025. EMEA net sales of $31.9 million decreased $1.7 million, or 5%, primarily due to lower volume in communications product sales, partially offset by an increase in special industry sales. Asia-Pacific net sales of $29.9 million increased $4.9 million, or 20%, primarily due to higher volumes in energy product sales.

Current wording

The increase in PLP-USA net sales of $15.3 million, or 23%, was primarily due to higher volumes in energy and communications sales. International net sales for the three months ended September 30, 2025 were favorably affected by $1.9 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $29.3 million increased $9.3 million, or 47%, primarily due to higher volumes in energy product sales and an increase in communications sales due to the acquisition of JAP Telecom in May 2025. EMEA net sales of $38.1 million increased $3.1 million, or 9%, primarily due to higher volumes in energy product sales and special industry sales. Asia-Pacific net sales of $29.9 million increased $1.5 million, or 5%, primarily due to higher volumes in special industry sales.

Previous wording

Gross profit. Gross profit of $55.4 million for 2025 increased $11.1 million, or 25%, compared to 2024. Excluding the effect of currency translation, gross profit increased $11.3 million, or 26%, as summarized in the following table:

Current wording

Gross profit. Gross profit of $52.8 million for 2025 increased $7.1 million, or 15%, compared to 2024. Excluding the effect of currency translation, gross profit increased $6.5 million, or 14%, as summarized in the following table:

Previous wording

PLP-USA gross profit of $28.1 million increased by $7.3 million, or 35%, compared to the same period in 2024, primarily due to higher sales volumes and favorable product mix, partially offset by higher tariff and manufacturing costs. International gross profit for the period ended June 30, 2025 was unfavorably impacted by $0.2 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $2.3 million, or 35%, which was primarily the result of higher sales volumes. EMEA gross profit decreased $0.3 million, or 3%, primarily due to lower sales volumes. Asia-Pacific gross profit increased $2.0 million, or 26%, which was primarily driven by higher sales volumes.

Current wording

PLP-USA gross profit of $23.7 million increased by $2.3 million, or 11%, compared to the same period in 2024, primarily due to higher sales volumes, partially offset by higher tariff and manufacturing costs, including LIFO valuation costs. International gross profit for the period ended September 30, 2025 was favorably impacted by $0.6 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $2.2 million, or 33%, which was primarily the result of higher sales volumes. EMEA gross profit increased $2.5 million, or 26%, primarily due to higher sales volumes and favorable product mix. Asia-Pacific gross profit decreased $0.5 million, or 6%, which was primarily driven by higher inventory adjustments.

Previous wording

Costs and expenses. Costs and expenses of $38.3 million for the three months ended June 30, 2025 increased $5.3 million, or 16%, when compared to 2024, which are similar results when the effect of currency translation and intercompany transactions is excluded, as summarized in the following table:

Current wording

Costs and expenses. Costs and expenses of $39.7 million for the three months ended September 30, 2025 increased $4.3 million, or 12%, when compared to 2024. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $3.9 million, or 11%, as summarized in the following table:

Previous wording

Excluding intercompany transactions, PLP-USA costs and expenses increased $2.2 million, or 13% year-over-year, primarily due to higher selling costs and personnel costs. International costs and expenses for the three months ended June 30, 2025 were nominally impacted when local currencies were translated to U.S. dollars and unfavorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $6.7 million increased $1.5 million primarily due to an increase in selling, general, and administrative and the impact of foreign currency remeasurement. EMEA costs and expenses of $8.0 million increased by $1.8 million primarily due to a recovery of bad debt in the second quarter of 2024 that did not recur. Asia-Pacific costs and expenses of $6.2 million decreased $0.2 million primarily due to a reduction in selling costs.

Current wording

Excluding intercompany transactions, PLP-USA costs and expenses increased $2.5 million, or 15% year-over-year, primarily due to higher selling costs and personnel costs. International costs and expenses for the three months ended September 30, 2025 were unfavorably impacted when local currencies were translated to U.S. dollars and unfavorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $7.5 million increased $1.1 million primarily due to an increase in selling, general, and administrative costs. EMEA costs and expenses of $8.3 million increased by $0.1 million primarily due to an increase in personnel costs. Asia-Pacific costs and expenses of $7.7 million increased $0.1 million primarily due to an increase in personnel costs and engineering costs.

Previous wording

Other Income (Expense), net. Other income, net of $0.2 million for the three months ended June 30, 2025 was favorable by $0.3 million when compared to Other expense, net for the three months ended June 30, 2024 of $0.1 million. The favorable movement was mainly due to lower interest expense from reduced debt balances.

Current wording

Other Expense, net. Other expense, net of $10.8 million for the three months ended September 30, 2025 was unfavorable by $10.8 million when compared to the nominal Other income, net for the three months ended September 30, 2024. The unfavorable movement was mainly due to an $11.7 million pension termination charge recorded, partially offset by government incentives received in 2025 related to our facility in China.

Previous wording

Net income. As a result of the preceding items, net income for the three months ended June 30, 2025 was $12.7 million, compared to $9.4 million for 2024. Excluding the effect of currency translation, net income increased $3.4 million as summarized in the following table. The increase in net income was due to increases in operating income described above as well as lower interest expense, partially offset by higher tax expense:

Current wording

Net income. As a result of the preceding items, net income for the three months ended September 30, 2025 was $2.6 million, compared to $7.7 million for 2024. Excluding the effect of currency translation, net income decreased $5.3 million as summarized in the following table. The decrease in net income was due to the pension termination charge recorded in the third quarter of 2025, offset by increases in operating income described above:

Previous wording

SIX MONTHS ENDED JUNE 30, 2025 COMPARED TO SIX MONTHS ENDED JUNE 30, 2024

Current wording

NINE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2024

Previous wording

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the six months ended June 30, 2025 and 2024. The Company’s past operating results are not necessarily indicative of future operating results.

Current wording

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the nine months ended September 30, 2025 and 2024. The Company’s past operating results are not necessarily indicative of future operating results.

Previous wording

Net sales. In 2025, net sales were $318.1 million, an increase of $38.5 million, or 14%, compared to 2024. Excluding the effect of currency translation, net sales increased 16% as summarized in the following table:

Current wording

Net sales. In 2025, net sales were $496.2 million, an increase of $69.6 million, or 16%, compared to 2024. Excluding the effect of currency translation, net sales increased 17% as summarized in the following table:

Previous wording

The increase in PLP-USA net sales of $22.7 million, or 17%, was primarily due to higher volumes in energy and communications product sales. International net sales for the six months ended June 30, 2025 were unfavorably affected by $4.9 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $50.8 million increased $15.9 million, or 40%, primarily due to an increase in energy product sales. EMEA net sales of $61.9 million increased $0.1 million, primarily due to higher volume in energy product sales. Asia-Pacific net sales of $52.2 million increased $4.8 million, or 10%, primarily due to volume increases in energy product and special industries sales.

Current wording

The increase in PLP-USA net sales of $37.9 million, or 19%, was primarily due to higher volumes in energy and communications product sales. International net sales for the nine months ended September 30, 2025 were unfavorably affected by $3.0 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $80.1 million increased $25.2 million, or 42%, primarily due to an increase in energy product sales and an increase in communications sales due to the acquisition of JAP Telecom in May 2025. EMEA net sales of $100.0 million increased $3.2 million, or 3% primarily due to higher volume in energy product and special industry sales. Asia-Pacific net sales of $82.0 million increased $6.3 million, or 8%, primarily due to volume increases in energy product and special industries sales.

Previous wording

Gross profit. Gross profit of $104.1 million for 2025 increased $15.7 million, or 18%, compared to 2024. Excluding the effect of currency translation, gross profit increased $17.2 million, or 19%, as summarized in the following table:

Current wording

Gross profit. Gross profit of $156.9 million for 2025 increased $22.7 million, or 17%, compared to 2024. Excluding the effect of currency translation, gross profit increased $23.6 million, or 18%, as summarized in the following table:

Previous wording

PLP-USA gross profit of $54.9 million increased by $9.5 million, or 21%, compared to the same period in 2024, primarily due to higher sales volumes and favorable product mix, partially offset by higher tariff and manufacturing costs. International gross profit for the period ended June 30, 2025 was unfavorably impacted by $1.5 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $5.5 million, or 47%, which was primarily the result of higher sales volumes and favorable product mix. EMEA gross profit increased $0.3 million, or 2%, primarily due to favorable product mix. Asia-Pacific gross profit increased $1.9 million, or 14%, which was primarily driven by higher sales volume and favorable product mix.

Current wording

PLP-USA gross profit of $78.6 million increased by $11.8 million, or 18%, compared to the same period in 2024, primarily due to higher sales volumes and favorable product mix, partially offset by higher tariff and manufacturing costs, including LIFO valuation costs. International gross profit for the period ended September 30, 2025 was unfavorably impacted by $0.9 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $7.7 million, or 42%, which was primarily the result of higher sales volumes. EMEA gross profit increased $2.8 million, or 10%, primarily due to higher sales volume and favorable product mix. Asia-Pacific gross profit increased $1.4 million, or 6%, which was primarily driven by higher sales volume.

Previous wording

Costs and expenses. Costs and expenses of $73.8 million for the six months ended June 30, 2025 increased $8.3 million, or 13%, when compared to 2024. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $9.2 million, or 14%, as summarized in the following table:

Current wording

Costs and expenses. Costs and expenses of $113.5 million for the nine months ended September 30, 2025 increased $12.6 million, or 12%, when compared to 2024. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $13.0 million, or 13%, as summarized in the following table:

Previous wording

PLP-USA costs and expenses of $34.6 million increased $3.0 million, or 9% year-over-year. PLP-USA’s increase was primarily attributable to higher selling costs and personnel costs. International costs and expenses for the six months ended June 30, 2025 were favorably impacted by $0.9 million when local currencies were translated to U.S. dollars and unfavorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $12.2 million increased $2.0 million primarily due to an increase in personnel costs and the impact of foreign currency remeasurement. EMEA costs and expenses of $15.3 million increased by $2.6 million primarily due to higher personnel cost and a recovery of bad debt in the second quarter of 2024 that did not recur. Asia-Pacific costs and expenses of $11.7 million increased $1.5 million primarily due to a gain on the sale of capital assets in the first quarter of 2024 that did not recur.

Current wording

PLP-USA costs and expenses of $50.8 million increased $5.5 million, or 11% year-over-year. PLP-USA’s increase was primarily attributable to higher selling costs and personnel costs. International costs and expenses for the nine months ended September 30, 2025 were favorably impacted by $0.4 million when local currencies were translated to U.S. dollars and unfavorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $19.7 million increased $3.1 million primarily due to an increase in personnel costs and the impact of foreign currency remeasurement. EMEA costs and expenses of $23.6 million increased by $2.8 million primarily due to higher personnel cost and a recovery of bad debt in the second quarter of 2024 that did not recur. Asia-Pacific costs and expenses of $19.4 million increased $1.6 million primarily due to a gain on the sale of capital assets in the first quarter of 2024 that did not recur.

Previous wording

Other income, net. Other income, net of $0.7 million for the six months ended June 30, 2025 was favorable by $0.5 million when compared to Other income, net for the six months ended June 30, 2024 of $0.2 million. The favorable movement was due to lower interest expense from reduced debt balances and a government incentive received in the first quarter of 2025 related to our facility in China, partially offset by lower interest income for the six months ended June 30, 2025.

Current wording

Other Expense, net. Other expense, net of $10.1 million for the nine months ended September 30, 2025 was unfavorable by $10.3 million when compared to Other income, net for the nine months ended September 30, 2024 of $0.2 million. The unfavorable movement was mainly due to an $11.7 million pension termination charge recorded in the third quarter of 2025, offset by government incentives received in 2025 related to our facility in China.

Previous wording

Income taxes. Income taxes for the three months ended June 30, 2025 and 2024 were $4.6 million and $1.8 million based on pre-tax income of $17.3 million and $11.2 million, respectively. The tax rate for the three months ended June 30, 2025 and 2024 was 27% and 16%, respectively. The effective tax rate for the three months ended June 30, 2025 was higher than the effective tax rate for the same period in 2024 mainly due to the unfavorable impact from certain adjustments including nondeductible compensation and non-recurring rate benefits received in 2024 from amending prior year returns, partially offset by a favorable impact from the mix of earned income in certain foreign jurisdictions.

Current wording

Income taxes. Income taxes for the nine months ended September 30, 2025 and 2024 were $6.5 million and $6.8 million based on pre-tax income of $33.3 million and $33.4 million, respectively. The tax rate for the nine months ended September 30, 2025 and 2024 was 19% and 20%, respectively. The effective tax rate for the nine months ended September 30, 2025 was lower than the effective tax rate for the same period in 2024 mainly due to a discrete tax benefit recorded in the third quarter related to the release of amounts in OCI attributed to the pension termination, partially offset by increased foreign withholding taxes in the same period in 2024.

Previous wording

Net income. As a result of the preceding items, net income for the six months ended June 30, 2025 was $24.2 million, compared to $19.0 million for 2024. Excluding the effect of currency translation, net income increased $5.5 million as summarized in the following table. The increase in net income was due to increases in operating income described above, partially offset by lower interest income and higher tax expense:

Current wording

Net income. As a result of the preceding items, net income for the nine months ended September 30, 2025 was $26.8 million, compared to $26.6 million for 2024. Excluding the effect of currency translation, net income increased $0.2 million as summarized in the following table. The increase in net income was due to increases in operating income described above, offset by the pension termination charge recorded in the third quarter of 2025.

Previous wording

Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives. During the first six months of 2025, we used cash of $19.4 million for capital expenditures. We ended the first six months of 2025 with $66.9 million of cash, cash equivalents and restricted cash (collectively, “Cash”). Our Cash is held in various locations throughout the world. At June 30, 2025, the majority of our Cash was held outside the U.S. We expect most accumulated non-U.S. Cash balances will remain outside of the U.S. and that we will meet U.S. liquidity needs through future operating cash flows, use of U.S. Cash balances, external borrowings, or some combination of these sources. We complete comprehensive reviews of our significant customers and their creditworthiness by analyzing financial statements for customers where we have identified a measure of increased risk. We closely monitor payments and developments which may signal possible customer credit issues. We currently have not identified any potential material impact on our liquidity from customer credit issues.

Current wording

Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives. During the first nine months of 2025, we used cash of $30.0 million for capital expenditures, mainly related to new facilities in the EMEA region. We ended the first nine months of 2025 with $72.9 million of cash, cash equivalents and restricted cash (collectively, “Cash”). Our Cash is held in various locations throughout the world. At September 30, 2025, the majority of our Cash was held outside the U.S. We expect most accumulated non-U.S. Cash balances will remain outside of the U.S. and that we will meet U.S. liquidity needs through future operating cash flows, use of U.S. Cash balances, external borrowings, or some combination of these sources. We complete comprehensive reviews of our significant customers and their creditworthiness by analyzing financial statements for customers where we have identified a measure of increased risk. We closely monitor payments and developments which may signal possible customer credit issues. We currently have not identified any potential material impact on our liquidity from customer credit issues.

Previous wording

Total debt, including notes payable, at June 30, 2025 was $36.2 million. The Company maintained a credit facility (the "Facility") with a capacity of $90.0 million. On March 14, 2025, the Company amended the Facility to extend the maturity date from March 2, 2026 to June 30, 2028. In addition, the amendment increased the amount of unsecured borrowings that the Company is permitted to incur outside of the Facility from $40.0 million to $60.0 million and included PLP Spain as an additional borrower.

Current wording

Total debt, including notes payable, at September 30, 2025 was $38.9 million. The Company maintained a credit facility (the "Facility") with a capacity of $60.0 million. On March 14, 2025, the Company amended the Facility to extend the maturity date from March 2, 2026 to June 30, 2028. In addition, the amendment increased the amount of unsecured borrowings that the Company is permitted to incur outside of the Facility from $40.0 million to $60.0 million and included PLP Spain as an additional borrower. On July 30, 2025, the Company amended the Facility again to reduce the borrowing capacity from $90.0 million to $60.0 million as well as increase the permitted indebtedness limit secured by mortgages, security interests or other liens from $35.0 million to $55.0 million. There were no other material changes to the Facility.

Previous wording

At June 30, 2025, our unused availability under the Facility was $79.6 million and our bank debt to equity percentage was 7.9%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At June 30, 2025, the Company was in compliance with these covenants.

Current wording

At September 30, 2025, our unused availability under the Facility was $52.1 million and our bank debt to equity percentage was 8.3%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At September 30, 2025, the Company was in compliance with these covenants.

Previous wording

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. As of June 30, 2025, $11.6 million was outstanding on this debt facility, of which $2.1 million was classified as current. The aircraft has been pledged as collateral against the loan.

Current wording

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. As of September 30, 2025, $11.1 million was outstanding on this debt facility, of which $2.1 million was classified as current. The aircraft has been pledged as collateral against the loan.

Previous wording

Subsequently, on July 16, 2025, PLP Poland (Belos) S.A. ("PLP Poland"), a subsidiary of the Company, entered into a non-revolving investment loan with Bank Polska Kasa Opieki Spolka Akcynja ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN100.3 million ($27.4 million). The maturity date of the loan is January 31, 2035 and is payable in annual installments in the amounts of PLN5.3 million ($1.5 million) in 2026, PLN9.0 million ($2.5 million) in 2027, PLN9.6 million ($2.6 million) in 2028 through 2034, and PLN18.8 million ($5.2 million) in 2035.

Current wording

On July 16, 2025, PLP Poland (Belos) S.A. ("PLP Poland"), a subsidiary of the Company, entered into a non-revolving investment loan with Bank Polska Kasa Opieki Spolka Akcynja ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN100.3 million ($27.6 million). The maturity date of the loan is January 31, 2035 and is payable in annual installments in the amounts of PLN5.3 million ($1.5 million) in 2026, PLN9.0 million ($2.6 million) in 2027, PLN9.6 million ($2.6 million) in 2028 through 2034, and PLN18.8 million ($5.3 million) in 2035.

Previous wording

The loan will bear interest at the one month Warsaw Interbank Offered Rate ("WIBOR") plus 1.0% unless the Company does not meet the covenants as set forth in the Facility with PNC, at which point the WIBOR spread becomes 1.5%. The current manufacturing plant owned by PLP Poland, the plant under construction and all fixed assets within the plants are pledged as collateral against the loan. The loan also is guaranteed by the Company

Current wording

The loan bears interest at the one month Warsaw Interbank Offered Rate ("WIBOR") plus 1.0% unless the Company does not meet the covenants as set forth in the Facility with PNC, at which point the WIBOR spread becomes 1.5%. The current manufacturing plant owned by PLP Poland, the plant under construction and all fixed assets within the plants are pledged as collateral against the loan. The loan also is guaranteed by the Company.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $32.6 million compared to $34.0 million in the comparable prior year six-month period. The $1.4 million decrease was primarily a result of changes in operating assets and liabilities offset by an increase in net income.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025 was $51.5 million compared to $43.4 million in the comparable prior year nine-month period. The $8.1 million increase was primarily a result of the net favorable movement in non-cash items of $22.9 million, including the pension termination, offset by changes in operating assets and liabilities.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2025 was $22.2 million compared to $4.3 million in the comparable prior year six-month period. The $17.9 million change was primarily a result of the acquisition of JAP Telecom in May 2025 and an increase in capital expenditures, primarily related to the acquisition of new land and a building in Spain and the construction of a new manufacturing plant in Poland.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2025 was $33.2 million compared to $7.7 million in the comparable prior year nine-month period. The $25.5 million change was primarily a result of the acquisition of JAP Telecom in May 2025 and an increase in capital expenditures, primarily related to the acquisition of new land and a building in Spain and the construction of a new manufacturing plant in Poland.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2025 was $4.8 million compared to $33.5 million in the comparable prior year six-month period. The $28.7 million change was primarily the result of a reduction in net payments of long-term debt.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2025 was $7.3 million compared to $40.8 million in the comparable prior year nine-month period. The $33.5 million change was primarily the result of a reduction in net payments of long-term debt.

Previous wording

We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and finance leases primarily for equipment. At June 30, 2025, we had $1.8 million of current operating lease liabilities and $6.7 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were less than $0.7 million at June 30, 2025.

Current wording

We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and finance leases primarily for equipment. At September 30, 2025, we had $1.8 million of current operating lease liabilities and $6.2 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were approximately $0.7 million at September 30, 2025.

Previous wording

As of June 30, 2025, the Company had total outstanding guarantees of $14.6 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of June 30, 2025, the Company had total outstanding letters of credit of $2.9 million.

Current wording

As of September 30, 2025, the Company had total outstanding guarantees of $14.7 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of September 30, 2025, the Company had total outstanding letters of credit of $3.5 million.

Previous wording

The Company has borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At June 30, 2025, and December 31, 2024, $14.2 million and $8.8 million was outstanding, of which $6.3 million and $8.2 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

Current wording

The Company has borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At September 30, 2025, and December 31, 2024, $19.9 million and $8.8 million was outstanding, of which $5.5 million and $8.2 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

Previous wording

•The potential impact of global economic conditions, including the impact of inflation, recently enacted tariffs and related economic uncertainty, and rising interest rates, on the Company’s ongoing profitability and future growth opportunities in the Company’s core markets in the U.S. and other foreign countries, which may experience continued or further instability due to political and economic conditions, social unrest, acts of war, military conflict (including the ongoing Russian-Ukrainian, Israeli-Palestinian and Iranian conflicts), international hostilities or the perception that hostilities may be imminent, terrorism, changes in diplomatic and trade relationships and public health concerns (including viral outbreaks such as COVID-19);

Current wording

•The potential impact of global economic conditions, including the impact of inflation, recently enacted or future tariffs and related economic uncertainty, and rising interest rates, on the Company’s ongoing profitability and future growth opportunities in the Company’s core markets in the U.S. and other foreign countries, which may experience continued or further instability due to political and economic conditions, social unrest, acts of war, military conflict (such as the Russian-Ukrainian, Israeli-Palestinian and Iranian conflicts), international hostilities or the perception that hostilities may be imminent, terrorism, changes in diplomatic and trade relationships and public health concerns (including viral outbreaks such as COVID-19);