FOSTER L B CO

Previous wording

This Quarterly Report on Form 10-Q contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Many of the forward-looking statements provide management's current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Sentences containing words such as “believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,” “anticipate,” “estimate,” “predict,” “project,” or their negatives, or other similar expressions of a future or forward-looking nature generally should be considered forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q are based on management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company’s expectations relating to our strategy, goals, projections, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. The Company cautions readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: a continuation or worsening of the adverse economic conditions in the markets we serve, including recession, the continued volatility in the prices for oil and gas, tariffs or trade wars, inflation, project delays, and budget shortfalls, or otherwise; volatility in the global capital markets, including interest rate fluctuations, which could adversely affect our ability to access the capital markets on terms that are favorable to us; restrictions on our ability to draw on our credit agreement, including as a result of any future inability to comply with restrictive covenants contained therein; a decrease in freight or transit rail traffic; environmental matters and the impact of environmental regulations, including any costs associated with any remediation and monitoring of such matters; the risk of doing business in international markets, including compliance with anti-corruption and bribery laws, foreign currency fluctuations and inflation, global shipping disruptions, the imposition of increase…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Many of the forward-looking statements provide management's current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Sentences containing words such as “believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,” “anticipate,” “estimate,” “predict,” “project,” or their negatives, or other similar expressions of a future or forward-looking nature generally should be considered forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q are based on management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company’s expectations relating to our strategy, goals, projections, valuations and impairments, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. The Company cautions readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: a continuation or worsening of the adverse economic conditions in the markets we serve, including recession, the continued volatility in the prices for oil and gas, tariffs or trade wars, inflation, project delays, and budget shortfalls, or otherwise; the impact of the continued U.S. government shutdown; volatility in the global capital markets, including interest rate fluctuations, which could adversely affect our ability to access the capital markets on terms that are favorable to us; restrictions on our ability to draw on our credit agreement, including as a result of any future inability to comply with restrictive covenants contained therein; a decrease in freight or transit rail traffic; environmental matters and the impact of environmental regulations, including any costs associated with any remediation and monitoring of such matters; the risk of doing business in international markets, including compliance with anti-corruption and bribery laws, foreign currency f…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

During the second quarter of 2025, the Company announced the discontinuation of its Automation and Materials Handling product line (“AMH Exit”) which was reported in the Technology Services and Solutions business unit within the Rail segment. AMH had net sales of $813 and $1,100 for the three months ended June 30, 2025 and 2024, respectively, and $1,220 and $3,324 for the six months ended June 30, 2025 and 2024, respectively. The Company expects to complete any remaining customer obligations by the end of 2025. The Company has incurred a total of $1,351 in exit costs associated with the AMH Exit, which included $655 in inventory and fixed asset write-downs, $507 in personnel expenses, and $189 in other exit costs. Exit costs of $1,085 were recorded in “Cost of goods sold” and $266 were recorded in “Selling and administrative expenses” within our Rail segment.

Current wording

During the nine months ended September 30, 2025, the Company announced the discontinuation of its Automation and Materials Handling product line (“AMH Exit”) which was reported in the Technology Services and Solutions business unit within the Rail segment. AMH had net sales of $530 and $907 for the three months ended September 30, 2025 and 2024, respectively, and $1,750 and $4,230 for the nine months ended September 30, 2025 and 2024, respectively. The Company expects to complete any remaining customer obligations by the end of 2025. During the nine months ended September 30, 2025, the Company incurred a total of $1,351 in exit costs associated with the AMH Exit, which included $655 in inventory and fixed asset write-downs, $507 in personnel expenses, and $189 in other exit costs. Exit costs of $1,085 were recorded in “Cost of goods sold” and $266 were recorded in “Selling and administrative expenses” within our Rail segment.

Previous wording

On August 30, 2023, the Company announced the discontinuation of its Bridge Products grid deck product line (“Bridge Exit”) which was reported in the Steel Products business unit within Infrastructure. The Bedford, PA based operations supporting the product line expects to complete any remaining customer obligations in 2025. The product line had net sales of $498 and $1,157 for the three months ended June 30, 2025 and 2024, respectively, and $999 and $1,967 for the six months ended June 30, 2025 and 2024, respectively.

Current wording

On August 30, 2023, the Company announced the discontinuation of its Bridge Products grid deck product line (“Bridge Exit”) which was reported in the Steel Products business unit within Infrastructure. The Bedford, PA based operations supporting the product line expects to complete any remaining customer obligations in 2025. The product line had net sales of $94 and $921 for the three months ended September 30, 2025 and 2024, respectively, and $1,093 and $2,888 for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net sales for the three months ended June 30, 2025 increased $2,762, or 2.0%, over the prior year quarter. The increase was driven by strong sales growth in the Infrastructure segment, which improved $12,383, or 22.4%, over the prior year quarter. Partially offsetting these improvements were sales volumes declines in the Rail segment which declined $9,621, or 11.2%, from the prior year quarter.

Current wording

Net sales for the three months ended September 30, 2025 increased $820, or 0.6%, over the prior year quarter. The increase was driven by sales growth in the Infrastructure segment, which improved $2,530, or 4.4%, over the prior year quarter. Partially offsetting these improvements were sales volume declines in the Rail segment which declined $1,710, or 2.2%, from the prior year quarter.

Previous wording

Rail segment gross profit for the three months ended June 30, 2025 decreased $2,743, or 15.3%, from the prior year quarter, and gross profit margins declined by 100 basis points to 19.9%. The decline in gross profit was due to lower sales volumes and $1,085 of costs associated with the AMH Exit.

Current wording

Gross profit for the three months ended September 30, 2025 decreased $1,692, or 5.2%, from the prior year quarter. The decline in gross profit was due to the Rail segment which declined $725, or 3.9%, due to lower sales volumes and a decline in gross profit of

Previous wording

Selling and administrative expenses for the three months ended June 30, 2025 decreased $2,436, or 9.8%, from the prior year quarter, due primarily to lower personnel costs and professional services expenditures which decreased $941 and $473, respectively. Selling and administrative expenses for the 2025 second quarter includes $266 in AMH Exit costs and the prior year quarter includes $751 in legal costs associated with a resolved legal matter. Selling and administrative expenses as a percentage of net sales decreased to 15.6% in the current quarter compared to the prior year quarter.

Current wording

Selling and administrative expenses for the three months ended September 30, 2025 decreased $2,212, or 9.1%, from the prior year quarter, due primarily to lower personnel costs as a result of the restructuring programs and general administrative spending which decreased $424 and $526, respectively. Selling and administrative expenses for the prior year quarter includes $422 in legal costs associated with a resolved legal matter and $840 in employee-related restructuring costs. Selling and administrative expenses as a percentage of net sales decreased to 16.0% in the current quarter.

Previous wording

Net interest expense was flat to the prior year quarter. The Company's outstanding debt balance was $81,628 as of June 30, 2025, compared to $87,173 as of June 30, 2024.

Current wording

Net interest expense for the three months ended September 30, 2025 decreased $104 from the prior year quarter. The Company's outstanding debt balance was $58,722 as of September 30, 2025, compared to $68,544 as of September 30, 2024.

Previous wording

The Company’s effective income tax rate for the three months ended June 30, 2025 was 54.8%, compared to 10.9% in the prior year quarter. The Company's effective income tax rate for the three months ended June 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom, for which no income tax benefit was recognized due to a valuation allowance.

Current wording

The Company’s effective income tax rate for the three months ended September 30, 2025 was 39.4%, compared to (483.4)% in the prior year quarter. The Company's effective income tax rate for the three months ended September 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom, for which no income tax benefit was recognized due to a valuation allowance.

Previous wording

Rail segment operating income for the three months ended June 30, 2025 decreased $1,754 from the prior year quarter due primarily to lower gross profit partially offset by a decline in selling and administrative expenses. During the three months ended June 30, 2025, AMH Exit costs reduced operating income by $1,351.

Current wording

Rail segment operating income for the three months ended September 30, 2025 increased $962, or 19.5%, from the prior year quarter due primarily to declines in selling and administrative expenses and lower amortization expense.

Previous wording

Infrastructure segment net sales for the three months ended June 30, 2025, increased $12,383 or 22.4%, over the prior year quarter. Sales increased due to strong growth in Precast Concrete Products, which increased $12,224, or 36.0%, over the prior year quarter. The Steel Products business unit net sales increased $159, or 0.7%, due to sales volume growth in the Protective Coatings business which was partially offset by declines in the bridge forms product line and the exit of the bridge grid deck product line.

Current wording

Infrastructure segment net sales for the three months ended September 30, 2025, increased $2,530 or 4.4%, over the prior year quarter. The increase was primarily due to the Steel Products business unit which increased $1,946, or 12.7%, due to sales volume growth in the Protective Coatings business. Additionally, Precast Concrete Products net sales increased $584, or 1.4%, over the prior year quarter.

Previous wording

Unallocated corporate expense - net for the three months ended June 30, 2025 was $2,835 compared to $4,552 for the three months ended June 30, 2024. Corporate executive management costs decreased from the prior year quarter primarily due to a decrease of $751 in corporate legal costs associated with a resolved legal matter and a decrease in professional service expenditures of $473.

Current wording

Unallocated corporate expense - net for the three months ended September 30, 2025 was $1,747 compared to $2,720 for the three months ended September 30, 2024. Corporate executive management costs decreased from the prior year quarter primarily due to a decrease of $422 in corporate legal costs associated with a resolved legal matter and lower professional service expenditures.

Previous wording

First Six Months 2025 Compared to First Six Months 2024

Current wording

First Nine Months 2025 Compared to First Nine Months 2024

Previous wording

Selling and administrative expenses for the six months ended June 30, 2025 decreased $4,354, or 9.1%, from the prior year period, due primarily to a decrease of $1,777 in personnel costs, $751 in legal fees, $783 in professional services expenditures, and reduced travel and insurance costs. Partially offsetting this decline were $266 of costs associated with the AMH Exit. Selling and administrative expenses as a percentage of net sales was unchanged compared to the prior year period at 18.0%.

Current wording

Selling and administrative expenses for the nine months ended September 30, 2025 decreased $6,566, or 9.1%, from the prior year period. The decline was primarily attributed to decreases of $2,202 in personnel costs as a result of our restructuring programs, $1,173 in legal costs, $783 in professional services expenditures, $574 in lower restructuring costs, and reduced travel and insurance costs. Selling and administrative expenses as a percentage of net sales decreased from the prior year period to 17.2%.

Previous wording

Net interest expense increased $15 for the six months ended June 30, 2025 compared to the prior year period. The Company's outstanding debt balance was $81,628 as of June 30, 2025, compared to $87,173 as of June 30, 2024.

Current wording

Net interest expense decreased $89 for the nine months ended September 30, 2025 compared to the prior year period. The Company's outstanding debt balance was $58,722 as of September 30, 2025, compared to $68,544 as of September 30, 2024.

Previous wording

The Company’s effective income tax rate for the six months ended June 30, 2025 was 79.6%, compared to 8.1% in the prior year period. The Company's effective income tax rate for the six months ended June 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom for which no income tax benefit was recognized due to a valuation allowance.

Current wording

The Company’s effective income tax rate for the nine months ended September 30, 2025 was 52.7%, compared to (207.8)% in the prior year period. The Company's effective income tax rate for the nine months ended September 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom for which no income tax benefit was recognized due to a valuation allowance.

Previous wording

Net income attributable to the Company for the six months ended June 30, 2025 was $775, or $0.07 per diluted share, compared to net income in the prior year period of $7,283, or $0.66 per diluted share. The lower net income for the six months ended June 30, 2025 was primarily driven by a decrease in gross profit and an increase in income tax expense offset in part by a decrease in selling and administrative expenses. Also, net income for the six months ended June 30, 2024 included the $3,477 gain on the sale of the former joint venture facility in Magnolia, Texas.

Current wording

Net income attributable to the Company for the nine months ended September 30, 2025 was $5,129, or $0.47 per diluted share, compared to net income in the prior year period of $43,188, or $3.91 per diluted share. Net income for the nine months ended September 30, 2024 included an income tax benefit of $29,110 associated with a favorable tax valuation adjustment and a $3,477 gain on the sale of a former joint venture facility in Magnolia, Texas. The decrease in net income was also impacted by lower gross profit for the nine months ended September 30, 2025 partially offset by reductions in selling and administrative expenses and amortization expense.

Previous wording

Rail segment net sales for the six months ended June 30, 2025 decreased $38,229, or 22.7 %, from the prior year period. The decrease was primarily due to the decline in the Rail Products business unit which declined $32,472, or 29.7%, due to the timing of large orders in the Rail Distribution product line and an exceptionally strong prior year period. Technology Services and Solutions' net sales decreased $10,292, or 37.6%, due to the Company scaling back initiatives in the United Kingdom and softness in the domestic markets served. The Global Friction Management business unit's net sales improved $4,535, or 14.4%, due to improved demand in domestic markets served.

Current wording

Rail segment net sales for the nine months ended September 30, 2025 decreased $39,939, or 16.1 %, from the prior year period. The decrease was primarily due to the decline in the Rail Products business unit which declined $35,286, or 22.5%, due to the timing of large orders in the Rail Distribution product line. Technology Services and Solutions net sales decreased $10,952, or 27.4%, due to the Company scaling back initiatives in the United Kingdom. Global Friction Management net sales improved $6,299, or 12.3%, due to improved demand in domestic markets served.

Previous wording

Rail segment gross profit for the six months ended June 30, 2025 decreased $9,285, or 25.5%, from the prior year period, and gross profit margins declined 80 basis points to 20.9%. The Rail Products and Technology Services and Solutions business units' gross profit declined $6,029 and $6,041, respectively, due to lower volumes. The Technology Services and Solutions business unit gross profit decline was due in part to $1,085 of restructuring costs associated with the AMH Exit. Partially offsetting these declines was an improvement in the Global Friction Management gross profit of $2,785, due to higher volumes.

Current wording

Rail segment gross profit for the nine months ended September 30, 2025 decreased $10,010, or 18.2%, from the prior year period, and gross profit margins declined 60 basis points to 21.6%. The Rail Products and Technology Services and Solutions business units gross profit declined $5,862 and $6,901, respectively, due to lower volumes and unfavorable business mix. The Technology Services and Solutions business unit gross profit decline was due in part to $1,085 of restructuring costs associated with the AMH Exit. Partially offsetting these declines was an improvement in the Global Friction Management gross profit of $2,753 due to higher volumes.

Previous wording

Rail segment operating income for the six months ended June 30, 2025 decreased $8,388 from the prior year period. The decrease was driven by a decline in gross profit associated with lower sales volumes and $266 of costs associated with AMH Exit, partially offset by lower selling and administrative expenses.

Current wording

Rail segment operating income for the nine months ended September 30, 2025 decreased $7,426, or 43.1%, from the prior year period. The decrease was driven by a decline in gross profit associated with lower sales volumes partially offset by decreases in selling and administrative expenses and amortization expense of $1,834 and $750, respectively.

Previous wording

Infrastructure segment net sales for the six months ended June 30, 2025 increased $14,463, or 14.9%, over the prior year period. The increase in net sales was attributable to the Precast Concrete Products business unit which increased $19,337, or 35.1%, over the prior year period which was partially offset by the Steel Products business unit which decrease $4,874, or 11.6%, from the prior year period due to declines in the bridge forms product line and the exit of the bridge grid deck product line.

Current wording

Infrastructure segment net sales for the nine months ended September 30, 2025 increased $16,993, or 11.0%, over the prior year period. The increase in net sales was attributable to the Precast Concrete Products business unit which increased $19,920, or 20.4%, over the prior year period which was partially offset by the Steel Products business unit which decreased $2,927, or 5.1%, from the prior year period due to declines in the bridge forms product line and the Bridge Exit.

Previous wording

Infrastructure segment operating income for the six months ended June 30, 2025 was favorable $4,087 compared to the prior year period due to improvements in gross profit and a decrease in selling and administrative expenses.

Current wording

Infrastructure segment operating income for the nine months ended September 30, 2025 was favorable $3,124, or 42.5%, compared to the prior year period due to improvements in gross profit and a decrease in selling and administrative expenses.

Previous wording

For the six months ended June 30, 2025, the Infrastructure segment had new orders of $127,223, an increase of $24,582, over the prior year period. The increase is due to our Precast Concrete Products business unit which increased by 23.5% over the prior year period, and our Steel Products business unit which increased 25.0% over the prior year period due to new order strength in our Protective Coatings business.

Current wording

For the nine months ended September 30, 2025, the Infrastructure segment had new orders, net of $155,639, an increase of $9,700, over the prior year period. The increase is due to the Precast Concrete Products business unit which increased 19.7% over the prior year period. Partially offsetting this increase was a decrease in the Steel Products business unit of 24.8% from the prior year period due to order cancellations.

Previous wording

Unallocated corporate expense - net for the six months ended June 30, 2025 was $4,458 compared to the six months ended June 30, 2024 which was $4,376. The increase was due to the $3,477 gain on the sale of the former joint venture facility in Magnolia, Texas recorded in the six months ended June 30, 2024. This was partially offset by a decrease in corporate executive management costs of $2,344 due to a decrease in professional service expenditures and lower travel and insurance costs.

Current wording

Unallocated corporate expense - net for the nine months ended September 30, 2025 was $6,205 compared to the nine months ended September 30, 2024 which was $7,096. The decrease was primarily due to a decline in corporate executive management costs of $3,008 due to a decrease in legal fees, professional service expenditures, and travel and insurance costs. This decline was offset in part by the $3,477 gain on the sale of the former joint venture facility in Magnolia, Texas in the nine months ended September 30, 2024.

Previous wording

The Company’s principal sources of liquidity are its existing cash and cash equivalents, cash generated by operations, and the available capacity under the revolving credit facility. The revolving credit facility provides for a total commitment of up to $150,000, of which $68,138 was available for borrowing as of June 30, 2025, subject to covenant restrictions. The Company’s primary needs for liquidity relate to working capital requirements for operations, capital expenditures, debt service obligations, tax obligations, outstanding purchase obligations, acquisitions, restructuring payments, and to support the share repurchase program. The Company’s total debt, including finance leases, was $81,628 and $46,940 as of June 30, 2025 and December 31, 2024, respectively, and was primarily comprised of borrowings under its revolving credit facility.

Current wording

The Company’s principal sources of liquidity are its existing cash and cash equivalents, cash generated by operations, and the available capacity under the revolving credit facility. The revolving credit facility provides for a total commitment of up to $150,000, of which $91,108 was available for borrowing as of September 30, 2025, subject to covenant restrictions. The Company’s primary needs for liquidity relate to working capital requirements for operations, capital expenditures, debt service obligations, tax obligations, outstanding purchase obligations, acquisitions, restructuring payments, and to support the share repurchase program. The Company’s total debt, including finance leases, was $58,722 and $46,940 as of September 30, 2025 and December 31, 2024, respectively, and was primarily comprised of borrowings under its revolving credit facility.

Previous wording

As of June 30, 2025, we were in compliance with all covenants of the Credit Agreement and have $72,324 available funding capacity, subject to covenant restrictions.

Current wording

As of September 30, 2025, we were in compliance with all covenants of the Credit Agreement and have $94,536 available funding capacity, subject to covenant restrictions.

Previous wording

The changes in cash and cash equivalents for the six months ended June 30, 2025 and 2024 were as follows:

Current wording

The changes in cash and cash equivalents for the nine months ended September 30, 2025 and 2024 were as follows:

Previous wording

During the six months ended June 30, 2025, net cash used in operating activities was $15,734, compared to cash used in operating activities of $26,398 during the prior year period. For the six months ended June 30, 2025, net income and adjustments to reconcile net income from operating activities provided $12,553, compared to $12,178 in the prior year period. Working capital and other assets and liabilities were a use of $28,287 in the current period, compared to a use of $38,576 in the prior year quarter. The increase in operating cash flow for the six months ended June 30, 2025 versus the six months ended June 30, 2024 was largely driven by lower working capital needs this year related to lower Rail volumes. Changes in payment timing can impact accounts receivable in any given quarter due to the seasonality of our businesses.

Current wording

During the nine months ended September 30, 2025, net cash provided by operating activities was $13,447, compared to cash used in operating activities of $1,653 during the prior year period. For the nine months ended September 30, 2025, net income and adjustments to reconcile net income from operating activities provided $23,380, compared to $22,264 in the prior year period. Working capital and other assets and liabilities were a use of $9,933 in the current period, compared to a use of $23,917 in the prior year period. The increase in operating cash flow for the nine months ended September 30, 2025 compared to the prior year period was largely driven by lower working capital needs associated with the lower Rail volumes. Changes in payment timing can impact accounts receivable in any given quarter due to the seasonality of our businesses.

Previous wording

Capital expenditures for the six months ended June 30, 2025 and 2024 were $5,248 and $4,766, respectively. Capital expenditures in both periods primarily relate to general plant and operational improvements throughout the Company, as well as organic growth initiatives including investments in our new Precast Concrete facility in Lake County, Florida. During the six months ended June 30, 2024, the Company divested the facility and land of its former joint venture in Magnolia, Texas and the fixed assets associated with the Bridge Exit generating a cash inflow of $3,881.

Current wording

Capital expenditures for the nine months ended September 30, 2025 and 2024 were $8,057 and $7,834, respectively. Capital expenditures in both periods primarily relate to general plant and operational improvements throughout the Company, as well as organic growth initiatives including investments in our new Precast Concrete facility in Lake County, Florida. During the nine months ended September 30, 2024, the Company divested the facility and land of its former joint venture in Magnolia, Texas and the fixed assets associated with the Bridge Exit generating a cash inflow of $3,881.

Previous wording

During the six months ended June 30, 2025 the Company had an increase in outstanding debt of $32,340 compared to a $31,955 increase during the six months ended June 30, 2024. Additionally, debt issuance costs of $706 were incurred during the six months ended June 30, 2025 related to the June 27, 2025 Fifth Amended and Restated Credit Agreement. During the six months ended June 30, 2025, the Company also made a $782 deferred payment related to the June 2022 acquisition of Skratch Enterprises Ltd. This payment was deferred at the date of the acquisition in accordance with the purchase agreement and was made during the second quarter of 2025. The increase in debt for the six months ended June 30, 2025 was driven by an increase in cash needed for treasury stock acquisitions, debt issuance costs, and the Skratch deferred acquisition payment and the absence of the cash inflow from the sale of the former joint venture in Magnolia, Texas from the prior year period.

Current wording

During the nine months ended September 30, 2025 the Company had an increase in outstanding debt of $9,963 compared to a $12,162 increase during the nine months ended September 30, 2024. Additionally, debt issuance costs of $706 were incurred during the nine months ended September 30, 2025 related to the June 27, 2025 Fifth Amended and Restated Credit Agreement. During the nine months ended September 30, 2025, the Company also made a $782 deferred payment related to the June 2022 acquisition of Skratch Enterprises Ltd. This payment was deferred at the date of the acquisition in accordance with the purchase agreement and was made during the second quarter of 2025.

Previous wording

The Board of Directors previously authorized the repurchase of up to $15,000 of the Company’s common shares until February 2025, pursuant to the terms of the previously disclosed stock repurchase program adopted March 3, 2023, as amended August 5, 2024. The Company repurchased 113,169 shares for $3,123 under this program through February 2025. Since the program's inception and continuing through February 2025, the Company repurchased a total of 547,679 shares of its stock for $12,241 under the program.

Current wording

The Board of Directors previously authorized the repurchase of up to $15,000 of the Company’s common shares until February 2025, pursuant to the terms of the previously disclosed stock repurchase program adopted March 3, 2023, as amended August 5, 2024. During the first quarter of 2025, the Company repurchased 113,169 shares for $3,123 under this program through February 2025. Since the program's inception and continuing through February 2025, the Company repurchased a total of 547,679 shares of its stock for $12,241 under the program.

Previous wording

On March 3, 2025, the Company's Board of Directors approved a new authorization to repurchase up to $40,000 of the Company's common stock in open market transactions and/or 10b5-1 trading plans through February 29, 2028. As of June 30, 2025, the Company repurchased 163,762 shares of its stock for $3,316 under this program.

Current wording

On March 3, 2025, the Company's Board of Directors approved a new authorization to repurchase up to $40,000 of the Company's common stock in open market transactions and/or 10b5-1 trading plans through February 29, 2028. As of September 30, 2025, the Company repurchased 347,905 shares of its stock for $8,035 under this program.

Previous wording

Under both programs, the Company repurchased a total of 276,931 shares for $6,439 during the six months ended June 30, 2025. From February 2023 through June 30, 2025, the Company repurchased a total of 711,441 shares of its stock for $15,557 under both programs.

Current wording

Under both programs, the Company repurchased a total of 461,074 shares for $11,158 during the nine months ended September 30, 2025. From February 2023 through September 30, 2025, the Company repurchased a total of 895,584 shares of its stock for $20,276 under both programs.

Previous wording

As of June 30, 2025, the Company had $4,186 in cash and cash equivalents and $68,138 of availability under its revolving credit facility, subject to covenant restrictions. As of June 30, 2025, approximately $2,890 of the Company’s cash and cash equivalents were held in non-domestic bank accounts.

Current wording

As of September 30, 2025, the Company had $3,428 in cash and cash equivalents and $91,108 of availability under its revolving credit facility, subject to covenant restrictions. As of September 30, 2025, approximately $3,018 of the Company’s cash and cash equivalents were held in non-domestic bank accounts.

Previous wording

While a considerable portion of the Company’s business is backlog driven, certain businesses, including the Global Friction Management business unit, are not driven by backlog and therefore have lower levels of backlog throughout the year. Backlog increased by $20,124 over the prior year quarter due to increases throughout our portfolio.

Current wording

While a considerable portion of the Company’s business is backlog driven, certain businesses, including the Global Friction Management business unit, are not driven by backlog and therefore have lower levels of backlog throughout the year. Backlog increased by $38,411 over the prior year period due primarily to increases throughout the Rail segment.

Previous wording

The Company defines new orders as a contractual agreement between the Company and a third-party in which the Company will, or has the ability to, satisfy the performance obligations of the promised products or services under the terms of the agreement. The Company defines backlog as contractual commitments to customers for which the Company’s performance obligations have not been met, including with respect to new orders and contracts for which the Company has not begun any performance. Management utilizes new orders and backlog to evaluate the health of the industries in which the Company operates, the Company’s current and future results of operations and financial prospects, and strategies for business development. The Company believes that new orders and backlog are useful to investors as supplemental metrics by which to measure the Company’s current performance and prospective results of operations and financial performance.

Current wording

Company’s performance obligations have not been met, including with respect to new orders and contracts for which the Company has not begun any performance. Management utilizes new orders, net and backlog to evaluate the health of the industries in which the Company operates, the Company’s current and future results of operations and financial prospects, and strategies for business development. The Company believes that new orders, net and backlog are useful to investors as supplemental metrics by which to measure the Company’s current performance and prospective results of operations and financial performance.