PREFORMED LINE PRODUCTS CO

Previous wording

We report our segments in four geographic regions: PLP-USA (including corporate), The Americas (includes operations in North and South America, excluding PLP-USA), EMEA (Europe, Middle East & Africa) and Asia-Pacific, in accordance with accounting standards codified in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 280, “Segment Reporting”. Each segment distributes a full range of our primary products. Our PLP-USA segment is comprised of our U.S. operations manufacturing our traditional products primarily supporting our domestic energy, telecommunications, solar framing products and inspection services. Our other three segments, The Americas, EMEA and Asia-Pacific, support our energy, telecommunications, data communication, solar and other products in each respective geographical region.

Current wording

We report our segments in four geographic regions: PLP-USA (including corporate), The Americas (includes operations in North and South America, excluding PLP-USA), EMEA (Europe, Middle East & Africa) and Asia-Pacific, in accordance with accounting standards codified in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 280, “Segment Reporting”. Each segment distributes a full range of our primary products. Our PLP-USA segment is comprised of our U.S. operations manufacturing our traditional products primarily supporting our domestic energy, telecommunications and inspection services. Our other three segments, The Americas, EMEA and Asia-Pacific, support our energy, telecommunications, data communication, solar and other products in each respective geographical region.

Previous wording

The following discussion describes our results of operations for the three and six months ended June 30, 2026 and 2025. 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, 2026 and 2025. 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 $212.7 million increased $43.1 million for the three months ended June 30, 2026 year-over-year and net sales of $389.0 million increased $70.8 million for the six months ended June 30, 2026 year-over-year, mainly due to an increase in energy and, to a lesser extent, communication sales, led by PLP-USA. While these sales amounts are the highest in the Company's history, tariffs, especially Section 232 tariffs, and geopolitical developments continue to present headwinds related to raw material imports and commodity prices, impacting essential inputs like steel, aluminum and plastic resins. While we continue to manage trade matters and commodity prices proactively, further tariff increases or geopolitical events 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. Please see Note 5 of the Notes to the Consolidated Financial Statements for further considerations on tariffs and refund process as a result of the February 2026 Supreme Court ruling.

Current wording

Net sales of $209.5 million increased $31.4 million for the three months ended September 30, 2026 year-over-year and net sales of $598.5 million increased $102.2 million for the nine months ended September 30, 2026 year-over-year, mainly due to an increase in energy and, to a lesser extent, communications sales, led by PLP-USA. While the nine months ended September 30, 2026 sales amounts are the highest in the Company's history, tariffs, especially Section 232 tariffs, and geopolitical developments continue to present headwinds related to raw material imports, commodity prices and freight costs, impacting essential inputs like steel, aluminum and plastic resins. While we continue to manage trade matters and commodity prices proactively, further tariff increases or geopolitical events 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. Please see Note 5 of the Notes to the Consolidated Financial Statements for further considerations on tariffs and refund process as a result of the February 2026 Supreme Court ruling.

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, 2026 had a favorable impact on net sales of $6.0 million and $13.2 million, respectively. The fluctuations on foreign currencies had a favorable impact of $0.5 million and $0.7 million on net income for the three and six months ended June 30, 2026. 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 during the three and six months ended June 30, 2025 had a de minimis impact and unfavorable impact of $0.3 million on net income, respectively. 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, 2026, 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, 2026 had a favorable impact on net sales of $3.1 million and $16.2 million, respectively. The fluctuations on foreign currencies had a favorable impact of $0.4 million and $1.0 million on net income for the three- and nine-months ended September 30, 2026, respectively. 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 unfavorable impact of $3.0 million, respectively. The fluctuations on foreign currencies had a favorable impact on net income of $0.3 million for the three months ended September 30, 2025 and a de minimis impact on net income for the nine months ended September 30, 2025. 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, 2026, was as follows:

Previous wording

While uncertainty remains in the global economy due to trade matters and geopolitical instability, we believe our business portfolio, which is focused on key megatrends impacting both the power and telecommunications markets, as well as our significant U.S. manufacturing footprint, and 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 impacts, increase sales volume and deliver value to our customers. We closely monitor developments in trade policy and geo-political instability and actively evaluate strategies to mitigate the impact of tariffs or supply chain constraints, including sourcing alternatives, where needed. 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, 2026, our liquidity remains strong with our bank debt to equity percentage at 8.6%. We can borrow needed funds at a competitive interest rate under the Facility.

Current wording

While uncertainty remains in the global economy due to trade matters and geopolitical instability, we believe our business portfolio, which is focused on key megatrends impacting both the power and telecommunications markets, as well as our significant U.S. manufacturing footprint, and 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 impacts, increase sales volume and deliver value to our customers. We closely monitor developments in trade policy and geopolitical instability and actively evaluate strategies to mitigate the impact of tariffs or supply chain constraints, including sourcing alternatives, where needed. 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, 2026, our liquidity remains strong with our bank debt to equity percentage at 10.9%. We can borrow needed funds at a competitive interest rate under the Facility.

Previous wording

Net sales. In 2026, net sales were $389.0 million, an increase of $70.8 million, or 22%, compared to 2025. Excluding the effect of currency translation, net sales increased 18% as summarized in the following table:

Current wording

Net sales. In 2026, net sales were $209.5 million, an increase of $31.4 million, or 18%, compared to 2025. Excluding the effect of currency translation, net sales increased 16% as summarized in the following table:

Previous wording

The increase in PLP-USA net sales of $25.0 million, or 32%, was primarily due to higher volumes in energy sales, and to a lesser extent, communications sales. International net sales for the three months ended June 30, 2026 were favorably affected by $6.0 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 $34.0 million increased $2.8 million, or 10%, primarily due to higher volumes in energy sales mainly due to the acquisition of Delta Star in May 2026. EMEA net sales of $41.7 million increased $8.2 million primarily due to higher volumes in energy sales. Asia-Pacific net sales of $32.7 million increased $1.2 million, or 4%, primarily due to higher volumes in energy sales and special industry sales.

Current wording

The increase in PLP-USA net sales of $21.9 million, or 27%, was primarily due to higher volumes in energy sales and, to a lesser extent, communications sales. International net sales for the three months ended September 30, 2026 were favorably affected by $3.1 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 $33.0 million increased $2.0 million, or 7%, primarily due to higher volumes in energy sales mainly due to the acquisition of Delta Star in May 2026 and higher communications volumes. EMEA net sales of $37.7 million decreased $0.6 million primarily due to lower volumes in communications sales. Asia-Pacific net sales of $36.1 million increased $5.0 million, or 17%, primarily due to higher volumes in energy sales.

Previous wording

Gross profit. Gross profit of $73.0 million for 2026 increased $17.6 million, or 32%, compared to 2025. Excluding the effect of currency translation, gross profit increased $15.7 million, or 28%, as summarized in the following table:

Current wording

Gross profit. Gross profit of $70.0 million for 2026 increased $17.2 million, or 32%, compared to 2025. Excluding the effect of currency translation, gross profit increased $16.2 million, or 31%, as summarized in the following table:

Previous wording

PLP-USA gross profit of $39.2 million increased by $11.2 million, or 40%, compared to the same period in 2025, primarily due to higher sales volumes, favorable product mix and the benefit of price increases enacted in 2025, partially offset by increased material, tariff and manufacturing costs. International gross profit for the period ended June 30, 2026 was favorably impacted by $1.9 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 $1.6 million, or 18%, which was primarily the result of favorable product mix. EMEA gross profit increased $3.4 million, or 36%, primarily due to higher sales volumes and favorable product mix. Asia-Pacific gross profit decreased $0.4 million, or 5%, which was primarily driven by increased material costs.

Current wording

PLP-USA gross profit of $37.3 million increased by $13.6 million, or 57%, compared to the same period in 2025, primarily due to higher sales volumes, favorable product mix and the benefit of price increases enacted in 2025 and 2026, partially offset by increased material and manufacturing costs. International gross profit for the period ended September 30, 2026 was favorably impacted by $1.0 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 $0.8 million, or 8%, which was primarily the result of higher sales volume driven by the acquisition of Delta Star in May 2026. EMEA gross profit had a decrease of $0.1 million due to an increase in material costs. Asia-Pacific gross profit increased $1.9 million, or 24%, which was primarily driven by higher sales volume and favorable product mix.

Previous wording

Costs and expenses. Costs and expenses of $45.1 million for the three months ended June 30, 2026 increased $6.8 million, or 18%, when compared to 2025. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $5.8 million, or 15%, as summarized in the following table:

Current wording

Costs and expenses. Costs and expenses of $45.1 million for the three months ended September 30, 2026 increased $5.4 million, or 14%, when compared to 2025. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $5.0 million, or 13%, as summarized in the following table:

Previous wording

Excluding intercompany transactions, PLP-USA costs and expenses increased $4.5 million, or 26% year-over-year, primarily due to increased selling and personnel costs supporting strategic market growth initiatives in core product offerings in both energy and communications. International costs and expenses for the three months ended June 30, 2026 were unfavorably impacted when local currencies were translated to U.S. dollars and favorably 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 $7.2 million increased $0.5 million primarily due to increases in personnel costs and selling costs. EMEA costs and expenses of $8.6 million increased by $0.8 million primarily due to increases in personnel and selling costs. Asia-Pacific costs and expenses of $6.4 million had a de minimis change.

Current wording

Excluding intercompany transactions, PLP-USA costs and expenses increased $5.2 million, or 32% year-over-year, primarily due to increased selling and personnel costs, supporting strategic market growth initiatives in core product offerings in both energy and communications. International costs and expenses for the three months ended September 30, 2026 were unfavorably impacted when local currencies were translated to U.S. dollars and favorably 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 $7.2 million increased $0.3 million primarily due to increases in personnel costs, offset by the impact of foreign currency remeasurement. EMEA costs and expenses of $7.4 million decreased by $0.3 million primarily due to decreases in personnel and selling costs. Asia-Pacific costs and expenses of $6.5 million decreased $0.1 million primarily due to foreign currency remeasurement, offset by increases in personnel costs.

Previous wording

Other Income, net. Other income, net of $0.5 million for the three months ended June 30, 2026 was favorable by $0.3 million when compared to $0.2 million of Other income, net for the three months ended June 30, 2025. The favorable movement was mainly due to an increase in interest income.

Current wording

Other Income (Expense), net. Other income, net of $0.7 million for the three months ended September 30, 2026 was favorable by $11.5 million when compared to $10.8 million of Other expense, net for the three months ended September 30, 2025. The favorable movement was mainly due to the $11.7 million pension termination charge recorded in Q3 2025.

Previous wording

Income taxes. Income taxes for the three months ended June 30, 2026 and 2025 were $6.9 million and $4.6 million based on pre-tax income of $28.4 million and $17.3 million, respectively. The tax rate for the three months ended June 30, 2026 and 2025 was 24% and 27%, respectively. The lower effective tax rate for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was mainly due to the impact from certain nondeductible compensation adjustments in Q2 2025.

Current wording

Income taxes. Income taxes for the three months ended September 30, 2026 and 2025 were $7.5 million and $(0.3) million based on pre-tax income of $25.6 million and $2.4 million, respectively. The tax rate for the three months ended September 30, 2026 and 2025 was 30% and (11)%, respectively. The higher effective tax rate for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was a result of the tax benefit recorded at Q3 2025 due to the release of amounts in Other Comprehensive Income attributed to the Company’s pension termination as well as an increase in non-deductible officers' compensation and stock option expense recognized in the quarter.

Previous wording

Net income. As a result of the preceding items, net income for the three months ended June 30, 2026 was $21.5 million, compared to $12.7 million for 2025. Excluding the effect of currency translation, net income increased $8.3 million as summarized in the following table. The increase in net income was due to increases in operating income as described above

Current wording

Net income. As a result of the preceding items, net income for the three months ended September 30, 2026 was $18.0 million, compared to $2.6 million for 2025. Excluding the effect of currency translation, net income increased $15.0 million as summarized in the following table. The increase in net income was due to increases in operating income and other income as described above.

Previous wording

SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO SIX MONTHS ENDED JUNE 30, 2025

Current wording

NINE MONTHS ENDED SEPTEMBER 30, 2026 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2025

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, 2026 and 2025. 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, 2026 and 2025. The Company’s past operating results are not necessarily indicative of future operating results.

Previous wording

Net sales. In 2026, net sales were $212.7 million, an increase of $43.1 million, or 25%, compared to 2025. Excluding the effect of currency translation, net sales increased 22% as summarized in the following table:

Current wording

Net sales. In 2026, net sales were $598.5 million, an increase of $102.2 million, or 21%, compared to 2025. 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 $44.3 million, or 29%, was primarily due to higher volumes in energy sales, and to a lesser extent, communications product sales. International net sales for the six months ended June 30, 2026 were favorably affected by $13.2 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 $59.0 million increased $3.3 million, or 6%, primarily due to an increase in communications sales due to the acquisition of JAP Telecom in May 2025 and, to a lesser extent, an increase in energy sales primarily related to the acquisition of Delta Star. EMEA net sales of $75.0 million increased $8.3 million, or 13% primarily due to higher volume in energy product sales. Asia-Pacific net sales of $57.3 million increased $1.8 million, or 3%, primarily due to volume increases in energy product and special industries sales.

Current wording

The increase in PLP-USA net sales of $66.2 million, or 28%, was primarily due to higher volumes in energy sales and, to a lesser extent, communications sales. International net sales for the nine months ended September 30, 2026 were favorably affected by $16.2 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 $92.0 million increased $5.3 million, or 7%, primarily due to an increase in communications sales due to the acquisition of JAP Telecom in May 2025 and, to a lesser extent, an increase in energy sales primarily related to the acquisition of Delta Star in May 2026. EMEA net sales of $112.6 million increased $7.7 million, or 8% primarily due to higher volumes in energy product sales. Asia-Pacific net sales of $93.5 million increased $6.8 million, or 8%, primarily due to volume increases in energy product and special industries sales.

Previous wording

Gross profit. Gross profit of $128.2 million for 2026 increased $24.2 million, or 23%, compared to 2025. Excluding the effect of currency translation, gross profit increased $20.3 million, or 20%, as summarized in the following table:

Current wording

Gross profit. Gross profit of $198.2 million for 2026 increased $41.3 million, or 26%, compared to 2025. Excluding the effect of currency translation, gross profit increased $36.5 million, or 23%, as summarized in the following table:

Previous wording

International gross profit for the period ended June 30, 2026 was favorably impacted by $3.8 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 $0.6 million, or 4%, which was primarily the result of higher sales volumes. EMEA gross profit increased $2.8 million, or 15%, primarily due to higher sales volume and favorable product mix. Asia-Pacific gross profit had a de minimis increase, primarily from higher sales volume, offset by increased material costs.

Current wording

PLP-USA gross profit of $109.0 million increased by $30.5 million, or 39%, compared to the same period in 2025, primarily due to higher sales volumes and fixed cost leverage, in addition to the benefit of price increases enacted in 2025 and 2026, partially offset by material and manufacturing costs. International gross profit for the period ended September 30, 2026 was favorably impacted by $4.8 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 $1.4 million, or 6%, which was primarily the result of higher sales volumes. EMEA gross profit increased $2.7 million, or 9%, primarily due to higher sales volume and favorable product mix. Asia-Pacific gross profit increased $1.9 million, primarily from higher sales volume, offset by unfavorable product mix.

Previous wording

Costs and expenses. Costs and expenses of $86.6 million for the six months ended June 30, 2026 increased $12.8 million, or 17%, when compared to 2025. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $10.1 million, or 14%, as summarized in the following table:

Current wording

Costs and expenses. Costs and expenses of $131.7 million for the nine months ended September 30, 2026 increased $18.2 million, or 16%, when compared to 2025. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $15.1 million, or 13%, as summarized in the following table:

Previous wording

PLP-USA costs and expenses of $44.9 million increased $7.5 million, or 22% year-over-year. PLP-USA’s increase was primarily attributable to higher personnel and selling costs. International costs and expenses for the six months ended June 30, 2026 were unfavorably impacted by $2.7 million when local currencies were translated to U.S. dollars and favorably 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 $13.1 million increased $1.5 million primarily due to an increase in personnel and selling costs. EMEA costs and expenses of $16.4 million increased by $1.1 million primarily due to higher personnel cost and facility costs. Asia-Pacific costs and expenses of $12.2 million increased $0.1 million primarily due to an increase in personnel costs.

Current wording

Excluding intercompany transactions, PLP-USA costs and expenses of $69.0 million increased $12.7 million, or 25% year-over-year. PLP-USA’s increase was primarily attributable to higher personnel and selling costs. International costs and expenses for the nine months ended September 30, 2026 were unfavorably impacted by $3.1 million when local currencies were translated to U.S. dollars and favorably 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 $20.2 million increased $1.7 million primarily due to an increase in personnel and selling costs. EMEA costs and expenses of $23.8 million increased by $0.7 million primarily due to higher personnel and facility costs. Asia-Pacific costs and expenses of $18.7 million had a de minimis change.

Previous wording

Other Income, net. Other income, net of $1.2 million for the six months ended June 30, 2026 was favorable by $0.5 million when compared to Other income, net for the six months ended June 30, 2025 of $0.7 million. The favorable movement was mainly due to an increase in interest income.

Current wording

Other Income (Expense), net. Other income, net of $1.8 million for the nine months ended September 30, 2026 was favorable by $11.9 million when compared to Other expense, net for the nine months ended September 30, 2025 of $10.1 million. The favorable movement was mainly due to the $11.7 million pension termination charge recorded in Q3 2025.

Previous wording

Income taxes. Income taxes for the six months ended June 30, 2026 and 2025 were $10.7 million and $6.7 million based on pre-tax income of $42.8 million and $31.0 million, respectively. The tax rate for the six months ended June 30, 2026 and 2025 was 25% and 22%, respectively. The effective tax rate for the six months ended June 30, 2026 was higher than the effective tax rate for the same period in 2025 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.

Current wording

Income taxes. Income taxes for the nine months ended September 30, 2026 and 2025 were $18.3 million and $6.5 million based on pre-tax income of $68.3 million and $33.3 million, respectively. The tax rate for the nine months ended September 30, 2026 and 2025 was 27% and 19%, respectively. The effective tax rate for the nine months ended September 30, 2026 was higher than the effective tax rate for the same period in 2025 mainly due to the tax benefit recorded at Q3 2025 from the release of amounts in Other Comprehensive Income attributed to the Company’s pension termination and a valuation allowance recorded in Q1 2026 on deferred tax assets related to the Company’s French subsidiary.

Previous wording

Net income. As a result of the preceding items, net income for the six months ended June 30, 2026 was $32.0 million, compared to $24.2 million for 2025. Excluding the effect of currency translation, net income increased $7.2 million as summarized in the following table. The increase in net income was due to increases in operating income as described above:

Current wording

Net income. As a result of the preceding items, net income for the nine months ended September 30, 2026 was $50.1 million, compared to $26.8 million for 2025. Excluding the effect of currency translation, net income increased $22.2 million as summarized in the following table. The increase in net income was due to increases in operating income and other income as described above:

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 2026, we used cash of $17.0 million for capital expenditures, mainly related to new facilities in the EMEA region. We ended the first six months of 2026 with $76.2 million of cash, cash equivalents and restricted cash (collectively, “Cash”). Our Cash is held in various locations throughout the world. At June 30, 2026, 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 2026, we used cash of $43.7 million for capital expenditures, mainly related to new facilities in the EMEA region and Canada. We ended the first nine months of 2026 with $99.3 million of cash, cash equivalents and restricted cash (collectively, “Cash”). Our Cash is held in various locations throughout the world. At September 30, 2026, 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, 2026 was $42.8 million. 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 were no 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.

Current wording

Total debt, including notes payable, at September 30, 2026 was $55.9 million. 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 September 30, 2026, the Company had utilized $6.1 million with $53.9 million available on the Facility. There were no long-term outstanding letters of credit on the Facility as of September 30, 2026. Our bank debt to equity percentage was 10.9%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At September 30, 2026, 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, 2026, $9.6 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, 2026, $9.1 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

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.

Current wording

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 September 30, 2026 and December 31, 2025, $40.8 million and $20.9 million were outstanding, of which $6.5 million and $4.6 million were classified as current, respectively. Of the $40.8 million outstanding at September 30, 2026, $21.8 million is attributable to the Poland subsidiary, $6.6 million is attributable to the Spain subsidiary and $10.6 million is attributable to the Canada subsidiary. These facilities support commitments made in the ordinary course of business.

Previous 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 Spółka Akcyjna ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN100.3 million ($26.7 million) with a maturity date of January 31, 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 Spółka Akcyjna ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN100.3 million ($26.0 million) with a maturity date of January 31, 2035.

Previous wording

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 PLN9.0 million ($2.4 million) in 2027, PLN9.6 million ($2.6 million) in 2028, PLN9.8 million ($2.6 million) annually from 2029 through 2034, and PLN22.9 million ($6.1 million) in 2035.

Current wording

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 PLN9.0 million ($2.4 million) in 2027, PLN9.6 million ($2.5 million) in 2028, PLN9.8 million ($2.5 million) annually from 2029 through 2034, and PLN22.9 million ($6.1 million) in 2035.

Previous wording

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 CAD15.0 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.

Current wording

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 CAD15.0 million ($10.6 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.

Previous wording

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 CAD0.8 million

Current wording

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 CAD0.8 million ($0.5 million) in each of 2027 and 2028, with the remaining principal balance of CAD13.4 million ($9.6 million) due at maturity in 2029.

Previous wording

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.

Current wording

The Company's Asia-Pacific segment had $0.5 million and $0.1 million in restricted cash used to secure bank guarantees at September 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.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2026 was $31.3 million compared to $32.6 million in the comparable prior year six-month period. The $1.3 million decrease was primarily a result of the increase in net income, the net favorable movement in non-cash items, including share based compensation and depreciation and amortization, offset by changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2026 was $68.1 million compared to $51.5 million in the comparable prior year nine-month period. The $16.6 million increase was primarily a result of the increase in net income, partially offset by the net unfavorable movement in non-cash items primarily from the pension termination charge recorded in Q3 2025.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2026 was $25.9 million compared to $22.2 million in the comparable prior year six-month period. The $3.7 million change was primarily a result of the acquisition of Delta Star in May 2026 and lower net proceeds from investments, partially offset by a decrease in capital expenditures.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2026 was $52.5 million compared to $33.2 million in the comparable prior year nine-month period. The $19.3 million change was primarily a result of the acquisition of Delta Star in May 2026, an increase in capital expenditures primarily related to the purchase of a building in Canada, as well as lower net proceeds from investments.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2026 was $13.0 million compared to $4.8 million in the comparable prior year six-month period. The $8.2 million change was primarily the result of share repurchases from related parties and a reduction in proceeds from long term debt.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2026 was $0.4 million compared to $7.3 million in the comparable prior year nine-month period. The $6.9 million change was primarily the result of an increase in proceeds from long term debt and notes payable to banks, offset by an increase in common share repurchases.

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, 2026, we had $1.9 million of current operating lease liabilities and $6.8 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were approximately $0.6 million at June 30, 2026.

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, 2026, we had $1.9 million of current operating lease liabilities and $6.6 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were approximately $0.5 million at September 30, 2026.

Previous wording

As of June 30, 2026, the Company had total outstanding guarantees of $13.8 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, 2026, the Company had total outstanding letters of credit of $3.6 million.

Current wording

As of September 30, 2026, the Company had total outstanding guarantees of $13.6 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 September 30, 2026, the Company had total outstanding letters of credit of $3.0 million.

Previous wording

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.

Current wording

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 September 30, 2026, and December 31, 2025, $40.8 million and $20.9 million were outstanding, of which $6.5 million and $4.6 million were classified as current, respectively. Of the $40.8 million outstanding at September 30, 2026, $21.8 million is attributable to the Poland subsidiary, $6.6 million is attributable to the Spain subsidiary and $10.6 million is attributable to the Canada subsidiary. These facilities support commitments made in the ordinary course of business.