FreightCar America, Inc.

Previous wording

Our Manufacturing segment revenues are generated primarily from sales of the railcars that we manufacture. Our Manufacturing segment sales depend on industry demand for new railcars, which is driven by overall economic conditions and the demand for railcar transportation of various products such as steel products, minerals, cement, motor vehicles, forest products, agricultural commodities and coal. Our Manufacturing segment sales are also affected by competitive market pressures that impact our market share, the prices for our railcars and by the types of railcars sold. Our Manufacturing segment revenues also include revenues from railcar conversions and rebodies. Our Aftermarket segment revenues are generated primarily from sales of forged, cast and fabricated railcar parts and supplies for all railcar types. Our Aftermarket segment also provides aftermarket services including safety training, railcar inspections, and preventative maintenance.

Current wording

Our Manufacturing segment revenues are generated primarily from sales of the railcars that we manufacture. Our Manufacturing segment sales depend on industry demand for new railcars, which is driven by overall economic conditions and the demand for railcar transportation of various products such as steel products, minerals, cement, motor vehicles, forest products, agricultural commodities and coal. Our Manufacturing segment sales are also affected by competitive market pressures that impact our market share, the prices for our railcars and by the types of railcars sold. Our Manufacturing segment revenues also include revenues from railcar conversions and rebodies. Our Aftermarket segment revenues are generated primarily from sales of railcar replacement parts and other supplies for all railcar types.

Previous wording

The variable purchase patterns of our customers and the timing of completion, delivery and customer acceptance may cause our revenues and income from operations to vary substantially each quarter, which will result in significant fluctuations in our quarterly results. Further, disruptions in the global supply chain may impact demand for, and the costs of, certain of our products and services. Our costs and the demand for our products and services could also be impacted by the imposition of new tariffs and trade policies. We do not know at this time what effect the imposition of new tariffs and trade policies could have on our business, financial condition and results of operations, as the actual impact of new tariffs is subject to a number of factors including the duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take, and any mitigating actions that may become available.

Current wording

The variable purchase patterns of our customers and the timing of completion, delivery and customer acceptance may cause our revenues and income from operations to vary substantially each quarter, which will result in significant fluctuations in our quarterly results. Further, recent changes to United States and foreign trade policies, including the imposition of new tariffs, have created increased geopolitical and macroeconomic uncertainty. Future changes in governmental and economic policies could impact our cost

Previous wording

Railcar deliveries totaled 4,362 railcars, consisting of 4,252 new railcars and 110 converted and rebodied railcars, for the year ended December 31, 2024, compared to 3,022 railcars delivered in the year ended December 31, 2023, consisting of 2,707 new railcars and 315 converted and rebodied railcars. Our total backlog of firm orders for railcars decreased from 2,914 railcars as of December 31, 2023 to 2,797 railcars as of December 31, 2024. The estimated sales value of the backlog was $267 million and $348 million, respectively, as of December 31, 2024 and 2023.

Current wording

Total net railcar orders received for the year ended December 31, 2025 were 3,254 railcars, consisting of 2,454 new railcars and 800 converted and rebodied railcars, compared to orders for 4,245 units in the year ended December 31, 2024, consisting of 2,850 new railcars and 1,395 converted and rebodied railcars. Total backlog of unfilled orders decreased from 2,797 railcars as of December 31, 2024 to 1,926 railcars as of December 31, 2025. The estimated sales value of the backlog was $137 million and $267 million, respectively, as of December 31, 2025 and 2024.

Previous wording

Our consolidated revenues for the year ended December 31, 2024 were $559.4 million compared to $358.1 million for the year ended December 31, 2023. Manufacturing segment revenues for the year ended December 31, 2024 were $541.2 million compared to $345.9 million for the year ended December 31, 2023. The increase in Manufacturing segment revenues for 2024 compared to 2023 reflects an increase in the number of railcars delivered from 3,022 railcars in 2023 to 4,362 railcars in 2024. Aftermarket segment revenues for the year ended December 31, 2024 were $18.2 million compared to $12.2 million for the year ended December 31, 2023, reflecting higher parts sales driven by favorable volume and price mix in 2024. There were no Corporate revenues for the years ended December 31, 2024 and 2023.

Current wording

Our consolidated revenues for the year ended December 31, 2025 were $501.0 million compared to $559.4 million for the year ended December 31, 2024. Manufacturing segment revenues for the year ended December 31, 2025 were $473.9 million compared to $541.2 million for the year ended December 31, 2024. The decrease in Manufacturing segment revenues for 2025 compared to 2024 reflects a decrease in the number of railcars delivered from 4,362 railcars in 2024 to 4,125 railcars in 2025. Aftermarket segment revenues for the year ended December 31, 2025 were $27.1 million compared to $18.2 million for the year ended December 31, 2024, reflecting increased volume of component sales during the year ended December 31, 2025.

Previous wording

Our consolidated gross profit for the year ended December 31, 2024 was $67.0 million compared to $41.8 million for the year ended December 31, 2023. Our consolidated gross margin was 11.98% for the year ended December 31, 2024 compared to 11.66% for the year ended December 31, 2023. Manufacturing segment gross profit for the year ended December 31, 2024 was $58.4 million compared to $37.2 million for the year ended December 31, 2023. The $25.2 million increase in consolidated gross profit and $21.2 million increase in Manufacturing segment gross profit is primarily due to the increase in the number of railcars delivered and favorable product mix. Aftermarket segment gross profit for the year ended December 31, 2024 was $8.6 million compared to $4.6 million for the year ended December 31, 2023. The $4.0 million increase in Aftermarket segment gross profit is primarily due to favorable volume and price mix.

Current wording

Our consolidated gross profit for the year ended December 31, 2025 was $73.2 million compared to $67.0 million for the year ended December 31, 2024. Consolidated gross margin was 14.6% for the year ended December 31, 2025 compared to 12.0% for the year ended December 31, 2024. Manufacturing segment gross profit for the year ended December 31, 2025 was $63.8 million compared to $58.4 million for the year ended December 31, 2024. The $6.2 million increase in consolidated gross profit and $5.4 million increase in Manufacturing segment gross profit is primarily due to favorable product mix in the cars delivered during the period. Aftermarket segment gross profit for the year ended December 31, 2025 was $9.4 million compared to $8.6 million for the year ended December 31, 2024. The $0.8 million increase in Aftermarket segment gross profit is primarily due to favorable volume.

Previous wording

Consolidated selling, general and administrative expenses for the year ended December 31, 2024 were $32.9 million compared to $27.5 million for the year ended December 31, 2023. Consolidated selling, general and administrative expenses for the year ended December 31, 2024 included increases in legal expenses of $2.5 million, stock-based compensation expenses of $1.9 million, insurance expenses of $0.4 million and labor expenses of $0.4 million. Consolidated selling, general and administrative expenses were 5.88% of revenue for each of the years ended December 31, 2024 and December 31, 2023. Manufacturing segment selling, general and administrative expenses for the year ended December 31, 2024 were $2.0 million compared to $2.1 million for the year ended December 31, 2023. Manufacturing segment selling, general and administrative expenses for the year ended December 31, 2024 were 0.37% of revenue compared to 0.61% of revenue for the year ended December 31, 2023. Aftermarket segment selling, general and administrative expenses for the year ended December 31, 2024 were $1.5 million compared to $0.7 million for the year ended December 31, 2023. Aftermarket segment selling, general and administrative expenses included increases in labor expenses of $0.3 million, primarily due to an increase in headcount during the year, and consulting costs of $0.2 million. Corporate selling, general and administrative expenses were $29.4 million for the year ended December 31, 2024 compared to $24.7 million for the year ended December 31, 2023. Corporate selling, general and administrative expenses for the year ended December 31, 2024 included increases in legal expenses of $2.4 million, stock-based compensation expenses of $1.9 million and insurance expenses of $0.4 million.

Current wording

Consolidated selling, general and administrative expenses for the year ended December 31, 2025 were $39.3 million compared to $32.9 million for the year ended December 31, 2024. Consolidated selling, general and administrative expenses for the year ended December 31, 2025 included increases of $5.5 million in professional services expenses and $0.5 million in stock-based compensation expenses. Consolidated selling, general and administrative expenses were 7.8% and 5.9% of revenue for the years ended December 31, 2025 and December 31, 2024, respectively. Manufacturing segment selling, general and administrative expenses for the year ended December 31, 2025 were $1.6 million compared to $2.0 million for the year ended December 31, 2024. Manufacturing segment selling, general and administrative expenses for the year ended December 31, 2025 were 0.3% of revenue compared to 0.4% of revenue for the year ended December 31, 2024. Aftermarket segment selling, general and administrative expenses for the year ended December 31, 2025 were $2.2 million compared to $1.5 million for the year ended December 31, 2024. Corporate selling, general and administrative expenses were $35.5 million for the year ended December 31, 2025 compared to $29.5 million for the year ended December 31, 2024. Corporate selling, general and administrative expenses for the year ended December 31, 2025 were primarily driven by the aforementioned increases in professional services expenses and stock-based compensation.

Previous wording

During the year ended December 31, 2024, we recorded a pre-tax litigation settlement gain of $3.2 million related to a dispute with a former lessee of our railcars. During the year ended December 31, 2023, we did not record any litigation settlements.

Current wording

During the year ended December 31, 2025, we did not record any litigation settlements. During the year ended December 31, 2024, we recorded a pre-tax litigation settlement gain of $3.2 million related to a dispute with a former lessee of our railcars.

Previous wording

Our consolidated operating income for the year ended December 31, 2024 was $37.3 million compared to consolidated operating income of $10.5 million for the year ended December 31, 2023 driven primarily by the previously mentioned favorable volume variance, decrease in impairment on leased railcars, and increase in litigation settlement gain, partially offset by the previously mentioned increase in selling, general and administrative expenses. Operating income for the Manufacturing segment was $59.6 million for the year ended December 31, 2024 compared to operating income of $31.6 million for the year ended December 31, 2023 reflecting the increase in railcars delivered during the year ended December 31, 2024. Operating income for the Aftermarket segment was $7.2 million for the year ended December 31, 2024 compared to operating income of $3.9 million for the year ended December 31, 2023 reflecting the higher parts sales due to favorable volume and price mix in 2024. Corporate operating loss was $29.5 million for the year ended December 31, 2024 compared to $25.0 million for the year ended December 31, 2023 reflecting the increases in legal expenses, stock-based compensation expenses, and insurance expenses during the year ended December 31, 2024.

Current wording

Our consolidated operating income for the year ended December 31, 2025 was $33.9 million compared to consolidated operating income of $37.3 million for the year ended December 31, 2024 driven primarily by the previously mentioned favorable product mix and no litigation settlement gains recognized in 2025, offset by the previously mentioned increase in selling, general and administrative expenses.

Previous wording

Loss on change in fair market value of warrant liability was $99.5 million for the year ended December 31, 2024 compared to $2.2 million for the year ended December 31, 2023. The change in fair market value of warrant liability is driven by the fluctuation of the stock price used to remeasure the liability at the end of each period.

Current wording

Loss on change in fair market value of warrant liability was $32.2 million for the year ended December 31, 2025 compared to $99.5 million for the year ended December 31, 2024. The change in fair market value of warrant liability is driven by the fluctuation of the stock price used to remeasure the liability at the end of each period.

Previous wording

As a result of the changes discussed above, consolidated net loss was $75.8 million for the year ended December 31, 2024 compared to $23.6 million for the year ended December 31, 2023. For the year ended December 31, 2024, basic and diluted net loss per share was $3.12 compared to $1.18 for the year ended December 31, 2023.

Current wording

As a result of the changes discussed above, consolidated net income was $38.1 million for the year ended December 31, 2025 compared to net loss of $75.8 million for the year ended December 31, 2024. For the year ended December 31, 2025, basic and diluted net income per share were $1.16 and $1.09, respectively, compared to basic and diluted net loss per share of $3.12 and $3.12, respectively, for the year ended December 31, 2024.

Previous wording

On December 31, 2024, the Company entered into a term loan agreement by and among the Company, FreightCar North America, LLC and certain subsidiaries of FreightCar North America, LLC, the lenders from time to time party thereto, and Blue Torch Finance LLC, as collateral agent and administrative agent in the principal amount of $115.0 million (the “Term Loan”) with a maturity date of December 31, 2028. The Term Loan contains both affirmative and negative covenants, as well as financial covenants, including covenants related to liquidity levels assessed at any time and quarterly leverage ratios commencing with the first quarter ended March 31, 2025. Proceeds from the Term Loan were used to redeem in full the Preferred Stock (as defined below in Note 13 - Mezzanine Equity). The Company incurred $6.6 million in deferred financing costs that are presented as a reduction of the long-term debt balance and amortized to interest expense over the term of the Term Loan.

Current wording

On December 31, 2024, the Company entered into a term loan agreement by and among the Company, FreightCar North America, LLC and certain subsidiaries of FreightCar North America, LLC, the lenders from time to time party thereto, and Blue Torch Finance LLC, as collateral agent and administrative agent in the principal amount of $115.0 million (the “Term Loan”) with a maturity date of December 31, 2028. The Term Loan contains both affirmative and negative covenants, as well as financial covenants, including covenants related to liquidity levels, assessed at any time, and quarterly leverage ratios commencing with the first quarter ended March 31, 2025. The Company is in compliance with such covenants as of December 31, 2025. Proceeds from the Term Loan were used to redeem in full the Preferred Stock (as defined in Note 13 - Mezzanine Equity). The Company incurred $6.5 million in deferred financing costs that are presented as a reduction of the long-term debt balance and amortized to interest expense over the term of the Term Loan.

Previous wording

The Term Loan bears interest at the Term SOFR rate, with a floor of 3.00% per annum, plus an applicable margin of 6.00% per annum or at a base rate, as selected by the Company as the borrower. Base rate loans bear interest at the highest of (a) 4.00% per annum, (b) the federal funds rate plus 0.50%, (c) the prime rate or (d) the Term SOFR rate plus 1.00% per annum plus an applicable margin of 5.00%. The Term Loan bears interest at 10.40% as of December 31, 2024.

Current wording

The Term Loan bears interest at the Term Secured Overnight Refinancing Rate (“Term SOFR”), with a floor of 3.00% per annum, plus an applicable margin of 6.00% per annum or at a base rate, as selected by the Company as the borrower. Base rate loans, with respect to the Term Loan, bear interest at the highest of (a) 4.00% per annum, (b) the federal funds rate plus 0.50%, (c) the prime rate or (d) the Term SOFR rate plus 1.00% per annum plus an applicable margin of 5.00%. The Term Loan bears interest at 10.30% as of December 31, 2025.

Previous wording

Extensions of credit under the ABL are subject to availability under a borrowing base comprised of various percentages of the value of eligible inventory and accounts receivable, which also serves as collateral for borrowings under the ABL. Borrowing availability was $11.0 million as of the ABL Effective Date. The ABL contains both affirmative and negative covenants, as well as certain financial covenants that are triggered if the availability drops below a certain level. These financial covenants remain in effect as long as the availability stays below that certain level. Revolving loans outstanding bear interest at the Term SOFR rate plus an applicable margin ranging from 1.50% to 2.00% per annum or at a base rate plus an applicable margin ranging from 0.50% to 1.00% per annum, as selected by the Company as the borrower. Base rate loans, with respect to the ABL, bear interest at the highest of (a) the prime rate, (b) the federal funds rate plus 0.50% or (c) Term SOFR rate plus 1.00%, provided that the base rate may not be less than 1.00%.

Current wording

Extensions of credit under the ABL are subject to availability under a borrowing base comprised of various percentages of the value of eligible inventory and accounts receivable, which also serves as collateral for borrowings under the ABL. Borrowing availability was $11.0 million as of the ABL Effective Date. The ABL contains both affirmative and negative covenants, as well as certain financial covenants that are triggered if the availability drops below a certain level. These financial covenants remain in effect as long as the availability stays below that certain level. The Company is in compliance with such covenants as of December 31, 2025. Revolving loans outstanding bear interest at the Term SOFR rate plus an applicable margin ranging from 1.50% to 2.00% per annum or at a base rate plus an applicable margin ranging from 0.50% to 1.00% per annum, as selected by the Company as the borrower. Base rate loans, with respect to the ABL, bear interest at the highest of (a) the prime rate, (b) the federal funds rate plus 0.50% or (c) Term SOFR rate plus 1.00%, provided that the base rate may not be less than 1.00%. As of December 31, 2025, the ABL bears interest at 5.5% and the Company had borrowing availability of $25 million, of which $0.5 million was reserved for the movement in mark to market valuation of our foreign currency derivatives and $0.2 million was reserved to collateralize standby letters of credit for an office lease security deposit. The Company incurred $0.9 million in deferred financing costs that are presented as an asset and amortized to interest expense over the term of the ABL.

Previous wording

Our restricted cash, restricted cash equivalents and restricted certificates of deposit balances were $3.9 million and $0.7 million as of December 31, 2024 and 2023, respectively. Restricted deposits of $0.3 million as of each of December 31, 2024 and 2023, respectively, relate to a customer deposit for purchase of railcars. Restricted deposits of $0.3 million and $0.1 million as of December 31, 2024 and 2023, respectively, are used to collateralize standby letters of credit with respect to certain performance guarantees. The standby letters of credit outstanding as of December 31, 2024 are a requirement as long as the performance guarantees are in place. Restricted deposits of $3.3 million and $0.3 million as of December 31, 2024 and 2023, respectively, are used to collateralize foreign currency derivative contracts.

Current wording

Our restricted cash, restricted cash equivalents and restricted certificates of deposit balances were $0.5 million and $3.9 million as of December 31, 2025 and 2024, respectively. Restricted deposits of $0.3 million as of each of December 31, 2025 and 2024 relate to a customer deposit for purchase of railcars. There were no restricted deposits as of December 31, 2025 and $0.2 million of restricted deposits as of December 31, 2024 that were used to collateralize standby letters of credit with respect to certain performance guarantees. The standby letters of credit outstanding as of December 31, 2025 are a requirement as long as the performance guarantees are in place. Restricted deposits of $0.2 million and $0.1 million as of December 31, 2025 and 2024, respectively, are used to collateralize the corporate card program. There were no restricted deposits as of December 31, 2025 and $3.3 million of restricted deposits as of December 31, 2024 that were used to collateralize foreign currency derivative contracts.

Previous wording

Benefits under our pension plan are frozen and will not be impacted by increases due to future service and compensation increases. The most significant assumptions used in determining our net periodic benefit costs are the discount rate used on our pension obligations and expected return on pension plan assets. As of December 31, 2024, our benefit obligation under our defined benefit pension plan was $10.4 million, which exceeded the fair value of plan assets by $1.1 million. We made no contributions to our defined benefit pension plan during 2024. We may be required to make a contribution to our pension plan in 2025 to meet minimum funding requirements. During 2023, the Company offered a one-time, lump-sum pay-out option to its terminated vested participants. For further information about our defined benefit pension plan, see Note 15 - Employee Benefit Plans. Funding levels will be affected by future contributions, investment returns on plan assets, growth in plan liabilities and interest rates.

Current wording

Benefits under our pension plan are frozen and will not be impacted by increases due to future service and compensation increases. The most significant assumptions used in determining our net periodic benefit costs are the discount rate used on our pension obligations and expected return on pension plan assets. As of December 31, 2025, our benefit obligation under our defined benefit pension plan was $10.3 million, which exceeded the fair value of plan assets by $1.3 million. A contribution of $7 thousand was made to our defined benefit pension plan during 2025. As of December 31, 2025, the Company expects to make contributions of approximately $0.7 million to its pension plan in 2026 to meet its minimum funding requirements. Funding levels will be affected by future contributions, investment returns on plan assets, growth in plan liabilities and interest rates.

Previous wording

Operating Activities. Our net cash provided by operating activities reflects net loss adjusted for non-cash charges and changes in operating assets and liabilities. Cash flows from operating activities are affected by several factors, including fluctuations in business volume, contract terms for billings and collections, the timing of collections on our contract receivables, processing of payroll and associated taxes, payments to our suppliers and other operating activities. As some of our customers accept delivery of new railcars in train-set quantities, variations in our sales lead to significant fluctuations in our operating profits and cash from operating activities.

Current wording

Operating Activities. Our net cash provided by operating activities reflects net income (loss) adjusted for non-cash charges and changes in operating assets and liabilities. Cash flows from operating activities are affected by several factors, including fluctuations in business volume, contract terms for billings and collections, the timing of collections on our contract receivables, processing of payroll and associated taxes, payments to our suppliers and other operating activities. As some of our customers accept delivery of new railcars in train-set quantities, variations in our sales lead to significant fluctuations in our operating profits and cash from operating activities.

Previous wording

Our net cash provided by operating activities for the year ended December 31, 2024 was $44.9 million compared to $4.8 million for the year ended December 31, 2023. Our net cash provided by operating activities for the year ended December 31, 2024 reflects changes in working capital, including a decrease in inventory of $54.7 million, offset by a decrease in accounts payable of $38.3 million and increase in accounts receivable of $6.1 million, all of which correlate directly with the increase in deliveries in 2024. Our net cash provided by operating activities for the year ended December 31, 2023 reflects changes in working capital, including an increase in inventory of $61.0 million to meet production needs for the start-up of several new railcar orders, offset by an increase in accounts payable of $39.9 million related to those purchases of inventory.

Current wording

Our net cash provided by operating activities for the year ended December 31, 2025 was $34.8 million compared to $44.9 million for the year ended December 31, 2024. Our net cash provided by operating activities for the year ended December 31, 2025 reflects changes in working capital, including an increase in accounts and contractual payables of $10.8 million. The increase in accounts payable relates to purchases of raw materials on hand as of December 31, 2025 to be used in the production and delivery of railcars in 2025 and 2026. Our net cash provided by operating activities for the year ended December 31, 2024 reflects changes in working capital, including a decrease in inventory of $54.9 million, offset by a decrease in accounts payable of $38.3 million and increase in accounts receivable of $6.1 million, all of which correlate directly with the increase in deliveries in 2024.

Previous wording

Investing Activities. Net cash used in investing activities for the year ended December 31, 2024 was $5.0 million as a result of capital expenditures related to the enhancement of machinery and equipment on current production lines of the Manufacturing Facility. Net cash used in investing activities for the year ended December 31, 2023 was $4.4 million primarily as a result of $12.7 million capital expenditures related to the expansion of the Manufacturing Facility, offset by $8.4 million proceeds from the sale of railcars available for lease, net of selling costs.

Current wording

Investing Activities. Net cash used in investing activities for the year ended December 31, 2025 was $9.1 million and included cash paid in connection with our acquisition of CRC, a leading distributor of railcar components, net of cash received of $6.3 million and capital expenditures of $3.4 million related to the enhancement of machinery and equipment on current production lines of the Manufacturing Facility. Net cash used in investing activities for the year ended December 31, 2024 was $5.0 million primarily as a result of capital expenditures related to the enhancement of machinery and equipment on the current production lines.

Previous wording

Financing Activities. Net cash used in financing activities for the year ended December 31, 2024 was $36.0 million and included proceeds from issuance of the Term Loan of $115.0 million, offset by deferred financing costs of $6.1 million, redemption of preferred shares of $85.4 million, dividends paid of $27.9 million, net repayments on revolving line of credit of $29.4 million, and principal payments on the finance lease of $2.1 million. Net cash provided by financing activities for the year ended December 31, 2023 was $2.2 million and included net repayments on revolving line of credit of $9.5 million, proceeds from issuance of preferred shares of $13.3 million and principal payments on the finance lease of $1.0 million.

Current wording

Financing Activities. Net cash used in financing activities for the year ended December 31, 2025 was $5.8 million, which included repayments on term loan of $2.9 million, deferred financing costs of $1.3 million, principal payments on the finance lease of $1.2 million, and employee stock settlements of $0.5 million. Net cash used in financing activities for the year ended December 31, 2024 was $36.0 million and included proceeds from issuance of the Term Loan of $115.0 million, offset by deferred financing costs of $6.1 million, redemption of preferred shares of $85.4 million, dividends paid of $27.9 million, net repayments on revolving line of credit of $29.4 million, and principal payments on the finance lease of $2.1 million.

Previous wording

Our capital expenditures were $5.0 million for the year ended December 31, 2024 and primarily related to the enhancement of machinery and equipment on current production lines at the Manufacturing Facility. Our capital expenditures were $12.7 million for the year ended December 31, 2023, a decrease year over year primarily due to the completion of the Manufacturing Facility’s expansion in 2023. We anticipate capital expenditures during 2025 to be approximately $5.0 million to $6.0 million.

Current wording

Our capital expenditures were $3.4 million for the year ended December 31, 2025 and primarily related to the enhancement of machinery and equipment on current production lines at the Manufacturing Facility. Our capital expenditures were $5.0 million for the year ended December 31, 2024, a decrease year over year primarily due to the deferral of certain projects to 2026. We anticipate capital expenditures during 2026 to be approximately $7.0 million to $10.0 million.

Previous wording

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Significant estimates include useful lives of long-lived assets, warranty accruals, pension benefit assumptions, evaluation of property, plant and equipment for impairment and the valuation of deferred taxes. Actual results could differ from those estimates.

Current wording

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Significant estimates include useful lives of long-lived assets, warranty accruals, pension benefit assumptions, evaluation of long-lived assets and right-of-use assets and the valuation of deferred taxes. Actual results could differ from those estimates.

Previous wording

We historically provided pension and retiree welfare benefits to certain salaried and hourly employees upon their retirement. Benefits under our pension plan are now frozen and will not be impacted by increases due to future service. The most significant assumptions used in determining our net periodic benefit costs are the discount rate used on our pension and post-retirement welfare obligations and expected return on pension plan assets.

Current wording

We historically provided pension and retiree welfare benefits to certain salaried and hourly employees upon their retirement. Benefits under our pension plan are now frozen and will not be impacted by increases due to future service and compensation expense. The most significant assumptions used in determining our net periodic benefit costs are the discount rate used on our pension and post-retirement welfare obligations and expected return on pension plan assets.

Previous wording

At the end of each year, we determine the discount rate to be used to calculate the present value of our pension plan liability. The discount rate is an estimate of the current interest rate at which our pension liabilities could be effectively settled at the end of the year. In estimating this rate, we look to rates of return on high-quality, fixed-income investments that receive one of the two highest ratings given by a recognized ratings agency. As of December 31, 2024, we determined this rate on our pension plan to be 5.67%, an increase of 0.66% from the 5.01% rate used as of December 31, 2023. A change of one hundred basis points in the discount rates used during the year ended December 31, 2024 would have the following effect:

Current wording

At the end of each year, we determine the discount rate to be used to calculate the present value of our pension plan liability. The discount rate is an estimate of the current interest rate at which our pension liabilities could be effectively settled at the end of the year. In estimating this rate, we look to rates of return on high-quality, fixed-income investments that receive one of the two highest ratings given by a recognized ratings agency. As of December 31, 2025, we determined this rate on our pension plan to be 5.46%, a decrease of 0.21% from the 5.67% rate used as of December 31, 2024. A change of one hundred basis points in the discount rates used during the year ended December 31, 2025 would have the following effect:

Previous wording

As of December 31, 2024 and 2023, we concluded that, based on evaluation of the positive and negative evidence, primarily our history of operating losses, it is not more likely than not that we will realize the benefit of our deferred tax assets. As of December 31, 2024, we had deferred tax assets of $83.7 million for which there was a valuation allowance of $67.1 million and we had total deferred tax liabilities of $15.5 million.

Current wording

During the year ended December 31, 2025, we released the majority of the valuation allowance in the United States on federal and state deferred tax assets. As of December 31, 2025, we had deferred tax assets of $78.2 million for which there was a valuation allowance of $13.7 million and we had total deferred tax liabilities of $11.5 million.