STANDARD MOTOR PRODUCTS, INC.

Previous wording

Our Nissens Automotive Segment was created in the fourth quarter of 2024 following the completion of our acquisition of Nissens Automotive, a leading European supplier of thermal management and engine efficiency products for the automotive aftermarket. Segment offerings include premium replacement parts within the following major product groups: (1)Air Conditioning, which includes compressors and condensers, electronics, such as blowers, fans and pressure sensors, and related components, such as evaporators, expansion valves and heaters; (2) Engine Cooling, which includes radiators and oil coolers, electronics, such as electric water pumps and temperature sensors, and related components, such as expansion tanks and fan clutches; and (3)Engine Efficiency, which includes turbochargers and intercoolers, electronics, such as exhaust gas recirculation (EGR) valves and modules, and related components, such as EGR coolers and oil feed pipes.

Current wording

Our Nissens Automotive operating segment services our core automotive aftermarket customers primarily in Europe with thermal management and engine efficiency products. Segment offerings include premium replacement parts within the following major product groups: (1)Air Conditioning, which includes compressors and condensers, electronics, such as blowers, fans and pressure sensors, and related components, such as evaporators, expansion valves and heaters; (2) Engine Cooling, which includes radiators and oil coolers, electronics, such as electric water pumps and temperature sensors, and related components, such as expansion tanks and fan clutches; and (3)Engine Efficiency, which includes turbochargers and intercoolers, electronics, such as exhaust gas recirculation (EGR) valves and modules, and related components, such as EGR coolers and oil feed pipes.

Previous wording

Consolidated net sales for the three months ended September 30, 2025 were $498.8 million, an increase of $99.6 million, or 24.9%, compared to net sales of $399.3 million in the same period in 2024.

Current wording

Consolidated net sales for the three months ended March 31, 2026 were $451.2 million, an increase of $37.8 million, or 9.1%, compared to net sales of $413.4 million in the same period in 2025.

Previous wording

•flat net sales in our Engineered Solutions operating segment as growth from business wins and successful cross-selling efforts was more than offset by general softness in end markets.

Current wording

•improved net sales in our Engineered Solutions operating segment as growth begins to recover from the general softness in end markets experienced in 2025,

Previous wording

Gross margins, as a percentage of net sales, increased to 32.4% in the third quarter of 2025 compared to 30.4% in the third quarter of 2024. Overall, the gross margin increase as a percentage of sales in the third quarter of 2025 primarily reflects the positive impact of higher sales volumes leading to higher fixed manufacturing cost absorption and improved operating performance including the impact of cost control measures, which more than offset slower market demand in our Vehicle Control and Engineered Solutions operating segments and the impact of higher tariffs on imports into the United States in our Vehicle Control operating segment. Gross margin percentage in our newly acquired operating segment, Nissens Automotive, was consistent with our expectations and contributed to the higher overall consolidated gross margin percentage.

Current wording

Gross margins, as a percentage of net sales, increased to 30.8% in the first quarter of 2026 compared to 30.2% in the first quarter of 2025. Overall, the gross margin increase as a percentage of sales in the first quarter of 2026 primarily reflects the positive impact of higher sales volumes including the impact of cost control measures and $4.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the first quarter of 2025 that did not recur, which more than offset the impact of higher tariffs on imports into the United States.

Previous wording

Operating margin as a percentage of net sales for the three months ended September 30, 2025 increased to 9.5% as compared to 9.3% for the same period in 2024. Included in our operating margin were selling, general and administrative expenses of $113.4 million, or 22.7% of net sales for the three months ended September 30, 2025 compared to $81.2 million, or 20.3% of net sales, for the same period in 2024. The$32.2 million increase inselling, general and administrative expenses in thethird quarter of 2025 as compared to thethird quarter of 2024 is principally due to$24.0 million of selling, general and administrative expenses in our newly acquired operating segment, Nissens Automotive, higher distribution expenses in our Vehicle Control operating segment and higher Corporate general and administrative expenses; partly offset by lower acquisition-related expenses.

Current wording

Operating margin as a percentage of net sales for the three months ended March 31, 2026 increased to 7.6% as compared to 5.9% for the same period in 2025. Included in our operating margin were selling, general and administrative expenses of $104.8 million, or 23.2% of net sales for the three months ended March 31, 2026 compared to $99.8 million, or 24.2% of net sales, for the same period in 2025. The$5.0 million increase inselling, general and administrative expenses in thefirst quarter of 2026 as compared to thefirst quarter of 2025 is principally due to higher distribution expenses driven by higher sales. However, selling, general and administrative expenses as a percentage of net sales improved due to higher sales volume relative to fixed cost components.

Previous wording

Since February 2025, the United States government imposed new tariffs on imports to the United States from certain countries and regions, including Canada, Mexico, China, the European Union and many other countries. Certain foreign governments have implemented retaliatory actions in response to the change in United States trade policy. We operate manufacturing plants in, and rely on imports primarily from Canada, Mexico, China and the European Union to serve our customers in the United States, and therefore, we are exposed to the adverse impacts of higher tariffs on imported raw materials, components and finished goods. In response, we have taken, and will continue to take actions to optimize our operations to minimize the impact of such tariffs and maintain our profitability through cost and pricing measures. We believe our diverse global footprint provides a competitive advantage and resiliency within our supply chain. More than one-half of our sales in the United States are from products manufactured in North America, which are currently mostly exempt from tariffs under the United States-Mexico-Canada Agreement. Products sourced from China represent approximately one-quarter of our sales in the United States, with the remainder of our sales in the United States from products sourced from other regions of the world which are currently subject to lower tariffs. Furthermore, our recent acquisition of Nissens Automotive provides sales diversification outside of the United States. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors, including negotiations between the United States and affected countries, retaliation imposed by other countries, tariff exemptions, and decisions to pause, reimpose or increase tariffs. We will continue to actively monitor international trade developments and evaluate the potential impact on our results of operations and financial condition.

Current wording

Since February 2025, the United States government imposed new tariffs on imports to the United States from certain countries and regions, including Canada, Mexico, China, the European Union and many other countries. Certain foreign governments have implemented retaliatory actions in response to the change in United States trade policy. We operate manufacturing plants in, and rely on imports primarily from Canada, Mexico, China and the European Union to serve our customers in the United States, and therefore, we are exposed to the adverse impacts of higher tariffs on imported raw materials, components and finished goods. In response, we have taken, and will continue to take actions to optimize our operations to minimize the impact of such tariffs and maintain our profitability through cost and pricing measures. We believe our diverse global footprint provides a competitive advantage and resiliency within our supply chain. More than one-half of our sales in the United States are from products manufactured in North America, which are currently mostly exempt from tariffs under the United States-Mexico-Canada Agreement. Products sourced from China represent approximately one-quarter of our sales in the United States, with the remainder of our sales in the United States from products sourced from other regions of the world which are currently subject to lower tariffs. Furthermore, our recent acquisition of Nissens Automotive provides sales diversification outside of the United States. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors, including negotiations between the United States and affected countries, retaliation imposed by other countries, tariff exemptions, and decisions to pause, reimpose or increase tariffs. We will continue to actively monitor international trade developments and evaluate the potential impact on our results of operations and financial condition, including the potential refund of tariffs that had been imposed under the International Emergency Economic Powers Act following the United States Supreme Court decision to invalidate such tariffs.

Previous wording

Sales. Consolidated net sales for thethree months ended September 30, 2025 were$498.8 million, an increase of $99.6 million, or 24.9%, compared to$399.3 million in the same period of 2024, with themajority of our net sales to customers located in the United States.

Current wording

Sales. Consolidated net sales for thethree months ended March 31, 2026 were$451.2 million, an increase of $37.8 million, or 9.1%, compared to$413.4 million in the same period of 2025, with themajority of our net sales to customers located in the United States.

Previous wording

Temperature Control’s net sales for the three months ended September 30, 2025 increased $18.7 million, or 14.8%, to $144.7 million compared to $126.0 million in the same period of 2024. Temperature Control’s net sales for the third quarter of 2025 reflect continued strong customer demand compared to the same period in 2024 benefiting from growth in certain product categories and gains in market share.

Current wording

Temperature Control’s net sales for the three months ended March 31, 2026 increased $0.6 million, or 0.7%, to $89.5 million compared to $88.9 million in the same period of 2025. Temperature Control’s net sales for the first quarter of 2026 reflect continued strong customer demand experienced in the same period in 2025. Overall full year results will be dependent upon summer weather conditions and customer inventory levels.

Previous wording

Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 32.4% in the third quarter of 2025, compared to 30.4% in the third quarter of 2024. The following table summarizes gross margins by segment (in thousands):

Current wording

Gross Margins. Gross margins, as a percentage of consolidated net sales, increased to 30.8% in the first quarter of 2026, compared to 30.2% in the first quarter of 2025. The following table summarizes gross margins by segment (in thousands):

Previous wording

Compared to the third quarter of 2024, gross margin percentage at our Temperature Control operating segment increased by 2.3 percentage points from 33.6% to 35.9% and decreased at our Vehicle Control and Engineered Solutions operating segments by 1.2 percentage points from 32.7% to 31.4% and 0.7 percentage points from 18.5% to 17.8%, respectively. Gross margin percentage at our Nissens Automotive operating segment was 41.2%.

Current wording

Compared to the first quarter of 2025, gross margin percentage at our Temperature Control and Nissens Automotive operating segments increased by 0.9 percentage points from 31.1% to 32.0% and 8.0 percentage points from 35.1% to 43.1%, respectively, and decreased at our Vehicle Control and Engineered Solutions operating segments by 0.4 percentage points from 32.3% to 31.9% and 3.9 percentage points from 17.7% to 13.8%, respectively.

Previous wording

The gross margin percentage at our Temperature Control operating segment primarily benefited from higher sales volume leading to favorable manufacturing cost absorption due to higher production levels, as well as the impact of cost saving measures.

Current wording

The gross margin percentage at our Temperature Control operating segment continued to benefit from higher sales volume leading to favorable manufacturing cost absorption due to higher production levels, as well as the impact of cost saving measures.

Previous wording

The gross margin percentage at our Vehicle Control operating segment decreased in the third quarter of 2025 when compared to the same period in 2024 primarily due to the impact of passing higher tariffs on imports into the United States through to customers at cost. We expect the impact of higher tariffs at our Vehicle Control operating segment to continue during the fourth quarter of 2025 as cost saving measures and price increases with customers take effect in 2026.

Current wording

The gross margin percentage at our Vehicle Control operating segment decreased in the first quarter of 2026 when compared to the same period in 2025 primarily due to the continued impact of higher tariffs on imports into the United States which were passed through to customers at cost.

Previous wording

Operating Income. Operating income was$47.6 million, or 9.5% of consolidated net sales, in thethird quarter of 2025, compared to$37.1 million, or 9.3% of consolidated net sales, in thethird quarter of 2024. The year-over-year increase in operating income of$10.5 million is primarily driven by the inclusion of$10.8 million of operating income from our new operating segment, Nissens Automotive and an increase of $10.7 million in our Temperature Control operating segment driven by higher gross margins and cost saving measures, partly offset by higher selling, general and administrative expenses in ourlegacy operating segment.

Current wording

Operating Income. Operating income was$34.1 million, or 7.6% of consolidated net sales, in thefirst quarter of 2026, compared to$24.5 million, or 5.9% of consolidated net sales, in thefirst quarter of 2025. The year-over-year increase in operating income of$9.6 million is primarily driven byan increase of $5.3 million at our Nissens Automotive segment principally due to $4.6 million of amortization for inventory fair value adjustments related to the application of accounting for business combinations in the first quarter of 2025 that did not recur, and a $2.9 million increase at our Temperature Control operating segment driven by higher gross margins and cost saving measures, as well as controlled selling, general and administrative expenses.

Previous wording

Other Non-Operating Income, Net. Other non-operating income, net was$1.7 million in thethird quarter of 2025, compared to$2.1 million in thethird quarter of 2024. The year-over-year decrease in other non-operating income, net primarily results from unfavorable foreign exchange rates.

Current wording

Other Non-Operating Income, Net. Other non-operating income, net was a loss of$1.3 million in thefirst quarter of 2026, compared to a gain of$2.2 million in thefirst quarter of 2025 primarily due to the impact of unfavorable foreign currency exchange rates on transactions.

Previous wording

Interest Expense. Interest expense was $7.4 million in the third quarter of 2025, compared to $3.1 million in the third quarter of 2024. The year-over-year increase in interest expense primarily reflects the impact of higher average outstanding borrowings in the third quarter of 2025 when compared to the third quarter of 2024 primarily due to borrowings to fund our acquisition of Nissens Automotive in the fourth quarter of 2024.

Current wording

Interest Expense. Interest expense was $7.5 million in the first quarter of 2026, compared to $7.8 million in the first quarter of 2025. The year-over-year decrease in interest expense primarily reflects the impact of lower average interest rates, partly offset by higher average outstanding borrowings in the first quarter of 2026 when compared to the first quarter of 2025 .

Previous wording

Income Tax Provision. The income tax provision in the third quarter of 2025 was $12.0 million at an effective tax rate of 28.5% compared to $9.3 million at an effective tax rate of 25.7% for the same period in 2024. The increase in the effective tax rate is due to higher earnings and taxes in foreign jurisdictions, primarily related to the inclusion of our new operating segment, Nissens Automotive.

Current wording

Income Tax Provision. The income tax provision in the first quarter of 2026 was $6.8 million at an effective tax rate of 27.0% compared to $5.1 million at an effective tax rate of 26.8% for the same period in 2025 primarily reflecting higher earnings.

Previous wording

Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the third quarter of 2025 and 2024 of $34.2 million and $22.8 million, respectively, reflects information contained in the actuarial studies performed as of August 31, 2025 and 2024, other information available and considered by us, and legal expenses associated with our asbestos related liability. The loss from discontinued operations for the third quarter of 2025 and 2024 primarily consists of a $44.4 million and $29.3 million pre-tax provision, respectively, to increase our indemnity liability in line with the August 31, 2025 and 2024 actuarial studies. As discussed more fully in Note 18, “Commitments and Contingencies” in the notes to our consolidated financial statements (unaudited), we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

Current wording

Loss from Discontinued Operations. Loss from discontinued operations, net of income taxes, during the first quarter of 2026 and 2025 of $1.2 million and $1.1 million, respectively, reflects legal and other administrative expenses associated with our asbestos-related liability. As discussed more fully in Note 18, “Commitments and Contingencies” in the notes to our consolidated financial statements (unaudited), we are responsible for certain future liabilities relating to alleged exposure to asbestos containing products.

Previous wording

Our primary cash requirements include working capital, capital expenditures, quarterly dividend payments, stock repurchases, principal and interest payments on indebtedness and acquisitions. The following table summarizes our primary sources of funds including ongoing net cash flows from operating activities and borrowing availability under our credit agreement ("2024 Credit Agreement") (in thousands):

Current wording

Our primary cash requirements include working capital, capital expenditures, quarterly dividend payments, stock repurchases, principal and interest payments on indebtedness and acquisitions. The following table summarizes our primary sources of funds including ongoing net cash flows from operating activities and borrowing availability under our credit agreement (in thousands):

Previous wording

Operating Activities. During the first nine months of 2025, cash provided by operating activities was $85.7 million compared to $78.2 million in the same period of 2024.

Current wording

Operating Activities. During the first three months of 2026, cash used in operating activities was $41.9 million compared to $60.2 million in the same period of 2025.

Previous wording

Net earnings during the first nine months of 2025 were $34.1 million compared to $30.5 million in the same period of 2024. The $7.5 million increase in cash provided by operating activities resulted primarily from higher net earnings, after adjustment for non-cash items, partly offset by net cash outflows from changes in working capital. Cash outflows from the year-over-year increase in accounts receivable of $78.7 million as compared to an increase of $59.0 million in the same period of 2024 and an increase in inventory levels of $22.8 million compared to a decrease of $2.9 million in the same period of 2024 due to higher net sales, was only partly offset by cash inflows from a higher year-over-year increase in accounts payable of $22.4 million as compared to $4.5 million in the same period of 2024, also due to higher net sales and inventory levels, as well as improved payment terms.

Current wording

Net earnings during the first three months of 2026 were $17.3 million compared to $12.7 million in the same period of 2025. The $18.3 million decrease in cash used in operating activities resulted primarily from higher net earnings, and lower net cash outflows from changes in working capital. Lower net cash outflows from changes in working capital are primarily due to a lower increase in the inventory balance due to the timing of shipments in early 2026 and improved accounts payable terms, partly offset by a growing accounts receivable balance due to higher net sales in the first three months of 2026, as compared to the same period of 2025.

Previous wording

During the year ended December 31, 2024, we generated operating cash flow by actively managing our payables and accounts receivable despite increased inventories due to higher sales. We continue to actively manage our working capital to maximize our operating cash flow.

Current wording

During the year ended December 31, 2025, we generated operating cash flow from net earnings and by actively managing our payables and accounts receivable despite increased inventories due to higher sales and capitalized tariff costs. We continue to actively manage our working capital to maximize our operating cash flow.

Previous wording

Investing Activities. Cash used in investing activities was $26.3 million during the first nine months of 2025, as compared to $34.1 million in the same period of 2024. Investing activities during the nine months ended September 30, 2025 and 2024 primarily consisted of capital expenditures of $29.3 million and $34.1 million, respectively. Capital expenditures are beginning to return to normal levels following a period of elevated spending due to continued investment in the start-up of our new distribution facility in Shawnee, Kansas.

Current wording

Investing Activities. Cash used in investing activities was $6.7 million during the first three months of 2026, as compared to $6.2 million in the same period of 2025. Investing activities during the three months ended March 31, 2026 and 2025 primarily consisted of capital expenditures of $6.7 million and $9.1 million, respectively. Capital expenditures have returned to normal levels following a period of elevated spending due to the investment in our new distribution facility in Shawnee, Kansas.

Previous wording

Financing Activities. Cash used in financing activities was $20.4 million during the first nine months of 2025, as compared to cash used in financing activities of $47.7 million in the same period of 2024. During the first nine months of 2025, we increased our borrowings under our 2024 Credit Agreement by $2.1 million, and paid dividends to SMP shareholders of $20.4 million. Cash provided by borrowings under our 2024 Credit Agreement in the nine months ended September 30, 2025 was primarily used to fund our operating activities, including tariff costs and capital expenditures, and pay dividends.

Current wording

Financing Activities. Cash provided by financing activities was $35.8 million and $72.5 million during the first three months of 2026 and 2025, respectively. During the first three months of 2026, we increased our borrowings under our 2024 Credit Agreement by $47.5 million, and paid dividends to SMP shareholders of $7.3 million. Cash provided by borrowings under our 2024 Credit Agreement in the three months ended March 31, 2026 was primarily used to fund our operating activities, including tariff costs, capital expenditures, and pay dividends.

Previous wording

During the first nine months of 2024, we (i) decreased our borrowings by $13.4 million, (ii) paid dividends to SMP shareholders of $19.0 million, (iii) made cash payments for the repurchase of shares of our common stock of $10.4 million, and (iv) paid expenses related to the refinancing of our credit agreement of $4.2 million. Cash provided by borrowings under our 2022 Credit Agreement in the nine months ended September 30, 2024 was primarily used to fund our operating activities and capital expenditures, pay dividends and repurchase shares of our common stock.

Current wording

During the first three months of 2025, we increased our borrowings by $79.1 million and paid dividends to SMP shareholders of $6.8 million. Cash provided by borrowings in the three months ended March 31, 2025 was primarily used to fund our operating activities, capital expenditures and pay dividends.

Previous wording

In February 2025, we raised our quarterly dividend to SMP shareholders from $0.29 to $0.31 per share of common stock. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital requirements, legal requirements, and other factors.

Current wording

In February 2026, we raised our quarterly dividend to SMP shareholders from $0.31 to $0.33 per share of common stock. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital requirements, legal requirements, and other factors.

Previous wording

The weighted average interest rate under the 2024 Credit Agreement, adjusted for the impact of interest rate swap agreements, is 4.9% and 5.6% at September 30, 2025 and December 31, 2024, respectively. Interest rates primarily consist of Term SOFR for borrowings in U.S. dollars and EURIBOR for borrowings in euros.

Current wording

The weighted average interest rate under the 2024 Credit Agreement, adjusted for the impact of interest rate swap agreements, is 4.9% and 4.8% at March 31, 2026 and December 31, 2025, respectively. Interest rates primarily consist of Term SOFR for borrowings in U.S. dollars and EURIBOR for borrowings in euros.

Previous wording

The Company has an overdraft facility that provides for borrowings of up to Polish zloty 30 million (approximately $8.3 million) if borrowings are solely in Polish zloty, or up to 85% of the Polish zloty 30 million limit (approximately $7.0 million) if borrowings are in euros and/or U.S. dollars. The overdraft facility automatically renews every three months until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period. There were $2.6 million of borrowings outstanding under the overdraft facility at September 30, 2025.

Current wording

The Company has an overdraft facility that provides for borrowings of up to Polish zloty 30 million (approximately $8.0 million) if borrowings are solely in Polish zloty, or up to 85% of the Polish zloty 30 million limit (approximately $6.8 million) if borrowings are in euros and/or U.S. dollars. The overdraft facility automatically renews every three months until June 2027, subject to cancellation by either party, at its sole discretion, at least 30 days prior to the commencement of the three-month renewal period. There were $2.2 million of borrowings outstanding under the overdraft facility at March 31, 2026.

Previous wording

Pursuant to these agreements, we sold $334.8 million and $776.9 million of receivables during the three and nine months ended September 30, 2025, respectively $285.4 million and $686.3 million for the comparable periods in 2024. Receivables presented at financial institutions and not yet collected as of September 30, 2025 were approximately $5.8 million and remained in our accounts receivable balance as of that date. All receivables sold were reflected as a reduction of accounts receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $14.9 million and $36.6 million related to the sale of receivables was included in selling, general and administrative expenses in our consolidated statements of operations for the three and nine months ended September 30, 2025, respectively, and $14.9 million and $38.3 million for the comparable periods in 2024.

Current wording

Pursuant to these agreements, we sold $214.9 million and $184.6 million of receivables during the three months ended March 31, 2026 and 2025, respectively. Receivables presented at financial institutions and not yet collected as of March 31, 2026 were approximately $0.9 million and remained in our accounts receivable balance as of that date. All receivables sold were reflected as a reduction of accounts receivable in the consolidated balance sheet at the time of sale. A charge in the amount of $9.2 million and $9.3 million related to the sale of receivables was included in selling, general and administrative expenses in our consolidated statements of operations for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

In 2022, our Board of Directors authorized the purchase of up to $30 million of our common stock under a stock repurchase program. Stock will be purchased from time to time in the open market, or through private transactions, as market conditions warrant. Under this program, there were no repurchases of common stock during the three and nine months ended September 30, 2025. In the three months ended September 30, 2024, there were no repurchases of common stock. In the nine months ended September 30, 2024, we repurchased 321,229 shares of our common stock at a total cost of $10.4 million. As of September 30, 2025, there was approximately $19.6 million available for future stock purchases under the program.

Current wording

In 2022, our Board of Directors authorized the purchase of up to $30 million of our common stock under a stock repurchase program. Stock will be purchased from time to time in the open market, or through private transactions, as market conditions warrant. Under this program, there were no repurchases of common stock during the three months ended March 31, 2026 and 2025. As of March 31, 2026, there was approximately $19.6 million available for future stock purchases under the program.

Previous wording

Material cash commitments as of September 30, 2025 consist of required cash payments to service our outstanding borrowings of $569.5 million under our 2024 Credit Agreement, the future minimum cash requirements of $142.1 million through 2034 under operating leases, and expected future cash payments relating to our restructuring activities of $1.6 million with approximately $1.2 million to be paid in the remainder of 2025, approximately $0.4 million in 2026 and approximately $0.1 million thereafter. All of our other known cash commitments as of September 30, 2025 are not material. For additional information related to our material cash commitments, see Note 4, “Restructuring Expenses”, Note 8, “Leases,” and Note 9, “Credit Facilities and Long-Term Debt,” in the notes to our consolidated financial statements (unaudited).

Current wording

Material cash commitments as of March 31, 2026 consist of required cash payments to service our outstanding borrowings of $641.8 million under our 2024 Credit Agreement, the future minimum cash requirements of $134.1 million through 2034 under operating leases, and expected future cash payments relating to our restructuring activities of $0.9 million with approximately $0.8 million to be paid in the remainder of 2026. All of our other known cash commitments as of March 31, 2026 are not material. For additional information related to our material cash commitments, see Note 4, “Restructuring Expenses”, Note 8, “Leases,” and Note 9, “Credit Facilities and Long-Term Debt,” in the notes to our consolidated financial statements (unaudited).

Previous wording

We anticipate that our cash flow from operations, available cash, and available borrowings under our 2024 Credit Agreement will be adequate to meet our future liquidity needs for at least the next twelve months. Significant assumptions underlie this belief, including, among other things, that we will be able to mitigate the future impact, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, and significant inflationary cost increases in raw materials, labor and transportation that we are unable to pass through our customers, macroeconomic uncertainty, and that there will be no material adverse developments in our business, liquidity or capital requirements. If material adverse developments were to occur in any of these areas, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our 2024 Credit Agreement in amounts sufficient to enable us to pay the principal and interest on our indebtedness, or to fund our other liquidity needs. In addition, if we default on any of our indebtedness, or breach any financial covenant in our 2024 Credit Agreement, our business could be adversely affected.

Current wording

We anticipate that our cash flow from operations, available cash, and available borrowings under our 2024 Credit Agreement will be adequate to meet our future liquidity needs for at least the next twelve months. Significant assumptions underlie this belief, including, among other things, that we will be able to mitigate the future impact, if any, of disruptions in the supply chain caused by geo-political risks, future increases in interest rates, and significant inflationary cost increases in raw materials, labor and transportation that we are unable to pass through our customers, macroeconomic uncertainty, and that there will be no material adverse developments in our business, liquidity or capital requirements. If material adverse developments were to occur in any of these areas, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our 2024 Credit Agreement in amounts sufficient to enable us to pay the principal and interest on our indebtedness, or to fund our other liquidity needs.

Previous wording

You should be aware that preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We can give no assurances that actual results will not differ from those estimates. Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of the disruptions in the supply chain caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.

Current wording

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. We can give no assurances that actual results will not differ from those estimates. Although we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates, or in the assumptions that we use in calculating the estimates, the uncertain future effects, if any, of the disruptions in the supply chain caused by geo-political risks, future increases in interest rates, inflation, macroeconomic uncertainty, and other unforeseen changes in the industry, or business, could materially impact the estimates, and may have a material adverse effect on our business, financial condition and results of operations.