PREFORMED LINE PRODUCTS CO

CONSOLIDATED BALANCE SHEETS

STATEMENTS OF CONSOLIDATED INCOME

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

STATEMENTS OF CONSOLIDATED CASH FLOWS

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tables in thousands of dollars, except share and per share data, unless specifically noted)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements of Preformed Line Products Company and subsidiaries (the “Company” or “PLPC”) have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. This Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Form 10-K for the year ended December 31, 2025 filed on March 5, 2026 with the Securities and Exchange Commission. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from these estimates. In the opinion of management, these consolidated financial statements contain all estimates and adjustments, consisting of normal recurring accruals, required to fairly present the financial position, results of operations, and cash flows for the interim periods. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full-year ending December 31, 2026.

Noncontrolling interests are presented in the Company’s consolidated financial statements as if parent company investors (controlling interests) and other minority investors (noncontrolling interests) in partially-owned subsidiaries have similar economic interests in a single entity. As a result, investments in noncontrolling interests are reported as equity in the Company’s consolidated financial statements. Additionally, the Company’s consolidated financial statements include 100% of a controlled subsidiary’s earnings, rather than only its share. Transactions between the parent company and noncontrolling interests are reported in equity as transactions between stockholders, provided that these transactions do not create a change in control.

Recently Adopted or Issued Accounting Pronouncements and Regulations

Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU improves disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses commonly presented in expense captions. Coupled with recent standards that enhanced the disaggregation of revenue and income tax information, the disaggregated expense information required by the amendments in this ASU will enable investors to better understand the major components of an entity’s income statement. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting this ASU.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, "Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targets Improvements to the Accounting for Internal-Use Software." This ASU removes all references to software development "project stages." Instead, capitalization begins when the following conditions are met: management has authorized funding the software project, it is probable that the project will be completed and the software will be used for its intended function. This ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the impact of adopting this ASU.

New Regulations

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain businesses. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The implementation of OBBBA resulted in an expected cash tax savings of approximately $3.0 million for the Company's 2025 fiscal year end. Management is currently evaluating the potential impact of the provisions for the 2026 fiscal year.

NOTE 2 - REVENUE

Revenue Recognition

Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services and is primarily based on shipping terms. Sales are measured as the amount of consideration the Company expects to receive in exchange for transferring products.

Disaggregated Revenue

The Company’s revenues by segment and product type are as follows:

Credit Losses for Receivables

The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its customers to make required payments. The Company uses a current expected credit loss model in order to immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments, mainly trade receivables. Additionally, the allowance is based upon identified delinquent accounts, customer payment patterns and other analyses of historical data trends. Receivable balances are written off against an allowance for credit losses after a final determination has been made. The change in the allowance for credit losses includes expense and net write-offs, which are identified in the following table:

NOTE 3 - INVENTORIES, NET

Inventories, net

Inventory is carried at lower of cost or net realizable value. The components of inventory are as follows:

Costs for inventories of certain material, mainly in the U.S., are determined using the Last-In First-Out ("LIFO") method and totaled approximately $40.0 million at June 30, 2026 and $45.8 million at December 31, 2025. An actual valuation of inventories under the LIFO method can be made only at the end of the year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Because these estimates are subject to change and may be different than the actual inventory levels and costs at the end of the year, interim results are subject to the final year-end LIFO inventory valuation. During the three-month periods ended June 30, 2026 and 2025, the net change in LIFO inventories resulted in an expense of $0.6 million and $1.9 million, respectively, to Cost of products sold. During the six-month periods ended June 30, 2026 and 2025, the net change in LIFO inventories resulted in expense of $1.2 million and of $2.4 million, respectively, to Cost of products sold. The Company’s reserves for excess and obsolete inventory were $16.3 million at June 30, 2026 and $17.7 million at December 31, 2025.

NOTE 4 - PROPERTY AND EQUIPMENT, NET

Major classes of property, plant and equipment are as follows:

Subsequent Event - Purchase of Property

On July 21, 2026, PLP Canada LTD ("PLP Canada"), a subsidiary of the Company, acquired a facility and the related property for a purchase price of approximately $16.7 million. The newly acquired facility will replace PLP Canada's existing facility and is intended to expand PLP Canada's manufacturing capacity and support future growth initiatives. Because the acquisition occurred subsequent to June 30, 2026, the transaction has not been reflected in the accompanying consolidated financial statements. The purchase was funded with cash on hand. Subsequent to the facility purchase, PLP Canada obtained a term loan to finance a portion of the facility's purchase price. See Note 8. for further detail on the term loan.

NOTE 5 - CONTINGENCIES AND OTHER LIABILITIES

Contingent Liabilities

The Company can be party to a variety of pending legal proceedings and claims arising in the normal course of business, including, but not limited to, litigation relating to employment, workers’ compensation, product liability, environmental and intellectual property. The Company has liability insurance to cover many of these claims. Although the outcomes of these matters are not predictable with certainty, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the event the Company determines that a loss is not probable, but is reasonably possible, and the likelihood to develop what the Company believes to be a reasonable range of potential loss exists, the Company will include disclosure related to such matters. To the extent that there is a reasonable possibility the losses could exceed amounts already accrued, the Company will adjust the accrual in the period in which the determination is made, disclose an estimate of the additional loss or range of loss and if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made.

The Company is not a party to any pending legal proceedings that the Company believes would, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations or cash flow. For the period ending June 30, 2026 and the year ending December 31, 2025, there wereno reserves for known global legal matters.

Advanced Customer Payments

As of June 30, 2026 and December 31, 2025, the Company has included $14.3 million and $4.7 million, respectively of advanced payments by customers for future projects in Accrued expenses and other liabilities on the Consolidated Balance Sheets.

Tariff Considerations

In February 2026, the U.S. Supreme Court ruled that certain tariffs under the International Emergency Economic Powers Act (“IEEPA”) were invalid, and in March 2026, the U.S. Court of International Trade ruled that the U.S. Customs and Border Protection (“CBP”) must refund duties imposed under IEEPA. During the three and six month periods ended June 30, 2026, the Company received certain refunds of duties imposed under IEEPA; however, the amounts received did not have a material impact on the consolidated financial statements. While the Company is actively engaged in the refund process, uncertainty persists with respect to the timing and magnitude of future refunds.

NOTE 6 - PENSION PLANS

The Company completed the termination of the Preformed Line Products Company Employees’ Retirement Plan (the “U.S. Plan”) in the third quarter of 2025 through the purchase of a group annuity contract. Prior to the termination, the U.S. Plan was amended to provide certain participants who are not currently receiving benefits the opportunity during an election period of April 1, 2025 to May 31, 2025 to elect to receive their benefit in the form of a lump sum. Lump-sum payments of approximately $13.1 million were made during July and August of 2025 in connection with such elections. In August 2025, the Company contributed approximately $2.9 million to the U.S. Plan and purchased an annuity contract through a financial institution for approximately $18.0 million to fully liquidate the U.S. Plan. As of the year ended December 31, 2025, the Company recorded a total non-cash pre-tax charge associated with the U.S. Plan termination of $11.7 million, of which $8.8 million represents the acceleration of deferred charges previously accrued in accumulated other comprehensive loss and $2.9 million represents the actuarial loss.

Due to the termination of the U.S. Plan in August 2025, there wasno net periodic pension expense for the three and six months ended June 30, 2026.

Excluding the pension termination charges, net periodic pension expense for the U.S. Plan for the three- and six-month periods ended June 30, 2025, respectively, follows:

Components of the recurring pension expense are included in Other income, net in the Consolidated Statements of Income. There were no contributions to the U.S. Plan during the six months ended June 30, 2025.

NOTE 7 - ACCUMULATED OTHER COMPREHENSIVE INCOME ("AOCI")

The following tables set forth the total changes in AOCI by component, net of tax:

(a)This AOCI component is included in the computation of net periodic pension expense as noted in Note 6 – Pension Plans.

NOTE 8 - DEBT AND CREDIT ARRANGEMENTS

PNC Bank Credit Facility

As of June 30, 2026, the Company maintained a credit facility (the "Facility") with PNC Bank, National Association ("PNC") with a capacity of $60.0 million and a maturity date of June 30, 2028. The interest rate is defined as the Secured Overnight Financing Rate (“SOFR”) plus 1.225% unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 3.00 to 1, at which point the SOFR spread becomes 1.600%. At June 30, 2026, the Company had utilized $6.7 million with $53.3 million available on the Facility. There wereno long-term outstanding letters of credit on the Facility as of June 30, 2026. Our bank debt to equity percentage was 8.6%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At June 30, 2026, the Company was in compliance with these covenants.

Corporate Aircraft Term Loan

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. The term of the loan is 120 months at a fixed interest rate of 2.744%. The loan is payable in 119 equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date. Of the $9.6 million outstanding on this debt facility at June 30, 2026, $2.1 million was classified as current. The aircraft has been pledged as collateral against the loan.

International Borrowing Facilities

The Company has other 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, 2026, and December 31, 2025, $26.5 million and $20.9 million were outstanding, of which $4.8 million and $4.6 million were classified as current, respectively. Of the $26.5 million outstanding at June 30, 2026, $17.7 million is attributable to the Poland subsidiary and $7.1 million is attributable to the Spain subsidiary. These facilities support commitments made in the ordinary course of business.

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 Spółka Akcyjna ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN 100.3 million ($26.7 million) with a maturity date of January 31, 2035.

On June 30, 2026, PLP Poland amended its non-revolving investment loan agreement with Bank Pekao S.A. to defer the start of annual repayments from June 30, 2026 to January 31, 2027. Following the amendment, PLP Poland will make annual installments in the amounts of PLN 9.0 million ($2.4 million) in 2027, PLN 9.6 million ($2.6 million) in 2028, PLN 9.8 million ($2.6 million) annually from 2029 through 2034, and PLN 22.9 million ($6.1 million) in 2035.

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 is guaranteed by the Company.

Subsequent Event - Term Loan

On July 28, 2026, in connection with the acquisition of a facility and related land in Canada (the "Property"), PLP Canada entered into a Term Loan Agreement (the "Term Loan") with Citibank N.A. providing for borrowings of approximately CAD 15.0 million (approximately $10.7 million). The proceeds of the Term Loan were used to refinance a portion of the Company's cash investment in the acquisition of the Property.

The Term Loan bears interest at a variable rate equal to the Canadian Overnight Repo Rate Average ("CORRA") plus 1.25% per annum and matures on July 28, 2029. Principal payments are due in annual installments of approximately CAD 0.8 million (approximately $0.5 million) in each of 2027 and 2028, with the remaining principal balance of approximately CAD 13.4 million (approximately $9.7 million) due at maturity in 2029.

The Term Loan contains a negative covenant that restricts PLP Canada from pledging, mortgaging, or otherwise using the Property as collateral for any other indebtedness without the prior written consent of the lender. The Term Loan also contains, among other provisions, requirements for maintaining levels of net worth and profitability. The loan is guaranteed by the Company.

Restricted Cash

The Company's Asia-Pacific segment had $0.3 million and $0.1 million in restricted cash used to secure bank guarantees at June 30, 2026 and December 31, 2025, respectively. The restricted cash is shown on the Company’s Consolidated Balance Sheets in Cash, cash equivalents and restricted cash.

NOTE 9 - INCOME TAXES

For the three-month period ended June 30, 2026 and 2025, the Company’s effective tax rate was 24% and 27%, respectively. The lower effective tax rate was mainly due to the impact from certain nondeductible compensation adjustments in Q2 2025. For the six-month period ended June 30, 2026 and 2025, the Company's effective tax rate was 25% and 22% respectively. The higher effective tax rate was mainly due to a reduction in the net benefit related to incentive compensation and a valuation allowance recorded on deferred tax assets related to the Company's French subsidiary.

The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of its deferred tax assets will not be realized. During the six-month period ended June 30, 2026, no other valuation allowances were recorded other than the amount recorded related to the Company's French subsidiary in the first quarter of 2026.

For the six-month periods ending June 30, 2026 and 2025, the Company didnot record any new uncertain tax positions.

NOTE 10 - COMPUTATION OF EARNINGS PER SHARE

Basic earnings per share were computed by dividing net income by the weighted-average number of common shares outstanding for each respective period. Diluted earnings per share were calculated by dividing net income by the weighted-average of all potentially dilutive common shares that were outstanding during the periods presented.

The calculation of basic and diluted earnings per share for the three and six months ended June 30, was as follows:

For the three months ended June 30, 2026 and 2025, there were zero and 13,293 share-based awards, respectively, excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive. For the six months ended June 30, 2026 and 2025, there were zero and 7,500 share-based awards, respectively, excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive.

NOTE 11 - GOODWILL AND OTHER INTANGIBLES

The Company’s finite and indefinite-lived intangible assets consist of the following:

The Company’s measurement date for its annual impairment test for goodwill is October 1st of each year. The Company performs additional interim impairment assessments as circumstances warrant. There were no indicators of impairment noted for the period ending June 30, 2026.

The Company may use both quantitative and qualitative approaches when testing goodwill for impairment. For selected reporting units where the qualitative approach is utilized, a qualitative evaluation of events and circumstances impacting the reporting unit is performed to determine if it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. If that determination is made, no further evaluation is necessary. Otherwise, the Company performs a quantitative impairment test on the reporting unit.

For the quantitative approach, the Company uses a combination of the income approach, which uses a discounted cash flow methodology, and the market approach, which uses comparable market multiples in computing fair value by reporting unit. The Company then compares the fair value of the reporting unit with its carrying value to assess if goodwill has been impaired. The fair value estimates are subjective and sensitive to significant assumptions, such as revenue growth rates, operating margins, the weighted average cost of capital, and estimated market multiples, all of which are affected by expectations of future market or economic conditions. The Company believes that the methodologies, significant assumptions, and weightings used are reasonable and result in appropriate fair values of the reporting units.

The Company’s only intangible asset with an indefinite life is goodwill. The Company’s goodwill is not deductible for tax purposes. Changes in the carrying amount of goodwill by reporting unit are shown in the following table:

NOTE 12 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. The Company measures and records certain assets and liabilities at fair value. A fair value hierarchy is used for those assets and liabilities measured at fair value that distinguishes between assumptions based on market data (observable inputs), and the Company’s assumptions (unobservable inputs). The hierarchy consists of the following three levels: (Level 1 Inputs) quoted market prices in active markets for identical assets or liabilities; (Level 2 Inputs) observable market-based inputs or unobservable inputs that are corroborated by market data; and (Level 3 Inputs) unobservable inputs that are not corroborated by market data.

The following table summarizes the Company’s assets and liabilities, recorded and measured at fair value, in the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025:

The Company operates internationally and enters into intercompany transactions denominated in foreign currencies. Consequently, the Company is subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. The Company currently uses foreign currency forward contracts to reduce the risk related to some of these transactions. These contracts usually have maturities of 90 days or less and generally require an exchange of foreign currencies for U.S. dollars at maturity at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other income, net on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three and six months ended June 30, 2026, the Company recognized net gains of $0.1 million and $0.3 million, respectively, on foreign currency forward contracts. For the three and six months ended June 30, 2025, the Company recognized net losses ofzero and net gains of $0.1 million, respectively on foreign currency forward contracts.

The Company has a non-qualified supplemental profit sharing plan for its executives (the "Supplemental Profit Sharing Plan"). The liability for the unfunded Supplemental Profit Sharing Plan was $12.1 million at June 30, 2026 and $10.8 million at December 31, 2025. These amounts are recorded within Other noncurrent liabilities on the Company’s Consolidated Balance Sheets. The Supplemental Profit Sharing Plan allows participants the ability to hypothetically invest their proportionate award into various investment options, which primarily includes mutual funds. The Company credits earnings, gains and losses to the participants’ deferred compensation account balances based on the investments selected by the participants. The Company measures the fair value of the Supplemental Profit Sharing Plan liability using the market values of the participants’ underlying investment accounts.

The carrying value of the Company’s current financial instruments, which include cash, cash equivalents and restricted cash, accounts receivable, accounts payable and short-term debt, approximates fair value because of the short-term maturity of these instruments.

At June 30, 2026 and December 31, 2025, the fair value of the Company’s long-term debt was estimated using discounted cash flows analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements that are considered to be Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:

NOTE 13 - SEGMENT INFORMATION

The Company reports its segments infour geographic regions: PLP-USA, The Americas, EMEA (Europe, Middle East & Africa) and Asia-Pacific in accordance with accounting standards codified in FASB ASC 280, "Segment Reporting". Each segment distributes a full range of the Company’s primary products. The PLP-USA segment is comprised of U.S. operations manufacturing the Company’s traditional products primarily supporting domestic energy, telecommunications and special industries products. The other three segments, The Americas, EMEA and Asia-Pacific, support the Company’s energy, telecommunications, data communication and special industries products in each respective geographical region.

The segment managers responsible for each region report directly to the Company’s Executive Chairman, who is the chief operating decision maker ("CODM"), and are accountable for the financial results and performance of their entire segment for which they are responsible. The business components within each segment are managed to maximize the results of the entire Company rather than the results of any individual business component of the segment.

The amount of each segment’s performance reported to the CODM is for purposes of making decisions about allocating resources to the segment and assessing its performance. The Company evaluates segment performance and allocates resources based on several factors primarily based on gross sales and income before income taxes.

The CODM uses both gross sales and income before income taxes for each segment predominantly in the annual budget and forecasting process as well as monitoring actual results. The CODM considers forecast-to-actual and actual to prior period variances for both measures when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment gross sales and income before income taxes for the performance of each segment by comparing the results of each segment with one another and in determining the incentive compensation of certain employees.

The following tables present a summary of the Company’s reportable segments for the three and six month periods ended June 30, 2026 and 2025. Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profit in inventory.

NOTE 14 - ACQUISITION OF BUSINESSES

Acquisition of JAP Telecom

On May 1, 2025, the Company acquired all issued and outstanding shares of J.A.P. Industria De Materiais Para Telefonia Ltda., (JAP Telecom) an entity headquartered in Pedreira, Brazil. JAP Telecom is a leading Brazilian designer, manufacturer, and supplier of connectivity solutions for the South American telecommunications infrastructure market with a product portfolio including fiber optic splice closures, connectivity devices, and infrastructure accessories tailored to the specific needs of the local market. JAP Telecom's annual sales for the year ending December 31, 2024 were approximately $4.6 million. The acquisition expands the Company's operational capabilities in the region and strengthens the Company's position in the global communications market. The purchase price was approximately $5.8 million, net of cash received.

The acquisition of JAP Telecom is accounted for using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recognized at their respective fair values on the acquisition date. The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. The fair value of the identifiable net assets as acquired was $4.9 million.

Goodwill is calculated as the excess of the consideration transferred over the net identifiable assets recognized and represents the anticipated synergies of acquiring JAP Telecom. The goodwill recognized of $0.8 million is not deductible for tax purposes.

All measurement period adjustments were completed within a year from the acquisition date, and such adjustments did not have a material impact on the Company's results of operations and financial position.

For the period ended June 30, 2026, the Company’s consolidated financial statements included JAP Telecom sales of approximately $3.7 million and is reported in The Americas segment.

Acquisition of Delta Star

On May 5, 2026, the Company acquired all issued and outstanding shares of Delta Star Conetores Electricos Ltda ("Delta Star"), an entity headquartered in Salto, Brazil. Delta Star is a manufacturer of high-quality substation connectors designed to support reliable, long-term grid performance. The acquisition expands the Company's operational capabilities in South America related to substation hardware and components and strengthens the Company's position in the energy market. Delta Star's unaudited annual sales for the year ended December 31, 2025 were approximately $8.0 million. The purchase price was approximately $11.1 million, net of cash received.

The acquisition of Delta Star is accounted for using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recognized at their respective fair values on the acquisition date. The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. The opening balance sheet is preliminary and subject to further measurement period adjustments. Goodwill is calculated as the excess of the consideration transferred over the net identifiable assets recognized and represents the anticipated synergies of acquiring Delta Star. The preliminary goodwill recognized of $6.3 million is not deductible for tax purposes. The preliminary fair value of the identifiable net assets was $4.8 million.

For the period ended June 30, 2026, the Company’s consolidated financial statements included Delta Star sales of approximately $1.2 million and is reported in The Americas segment.