RPM INTERNATIONAL INC/DE/

Previous wording

Our PCG segment generated organic sales growth during the second quarter of fiscal 2026, driven by broad-based growth in turnkey flooring solutions, fireproofing coatings, protective coatings, food coatings, emerging markets and fiberglass reinforced plastic structures. Acquisitions also contributed to the sales increase.

Current wording

Our PCG segment generated organic sales growth during the third quarter of fiscal 2026, driven by broad-based growth, particularly in protective coatings and fireproofing coatings, in addition to strong demand in emerging markets for infrastructure and high-performance building solutions. Favorable foreign currency translation also contributed to the sales increase.

Previous wording

Our Consumer segment experienced organic sales declines in the second quarter of fiscal 2026 due to softness in DIY markets, product rationalization and delayed sales related to software system implementations and the integration of a shared distribution center. These organic declines were partially offset by acquisitions and improved pricing to recover inflation.

Current wording

Our Consumer segment experienced organic sales declines in the third quarter of fiscal 2026 due to softness in DIY markets and product rationalization, partially offset by improved pricing to recover inflation. These organic sales declines were offset by acquisitions and favorable foreign currency translation.

Previous wording

Gross Profit Margin Our consolidated gross profit margin of 40.8% of net sales for the second quarter of fiscal 2026 compares to a consolidated gross profit margin of 41.4% for the comparable period a year ago. The current quarter gross profit margin decrease of approximately 0.6%, or 60 basis points ("bps"), primarily resulted from reduced fixed-cost absorption at businesses with volume declines and temporary inefficiencies due to MAP 2025 plant consolidations, unfavorable sales mix and cost inflation, inclusive of tariff-related impacts, which was partially offset by improved pricing to recover inflation and our MAP 2025 initiatives, which generated incremental savings in procurement, manufacturing and commercial excellence.

Current wording

Gross Profit Margin Our consolidated gross profit margin of 39.5% of net sales for the third quarter of fiscal 2026 compares to a consolidated gross profit margin of 38.4% for the comparable period a year ago. The current quarter gross profit margin increase of approximately 1.1%, or 110 basis points, was driven by improved fixed-cost leverage from higher volumes, improved pricing to recover inflation and our MAP 2025 initiatives, which generated incremental savings in procurement, manufacturing and commercial excellence, partially offset by cost inflation, inclusive of tariff-related impacts.

Previous wording

We expect that the inflationary headwinds noted above will be reflected in our results throughout fiscal 2026.

Current wording

We expect that the inflationary headwinds noted above, as well as the impact from geopolitical-driven inflation, will be reflected in our results throughout fiscal 2026 and into fiscal 2027.

Previous wording

SG&A Our consolidated SG&A expense during the second quarter was $19.6 million higher versus the same period last year and increased to 28.8% of net sales from 28.7% of net sales for the prior year period. These increases were primarily driven by $18.7 million of additional SG&A from acquisitions, investments in growth initiatives, merit increases, as well as increased healthcare costs, commission expenses, distribution costs, travel expenses and merger and acquisition ("M&A") expenses. This was partially offset by a $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, a $4.4 million net gain on the sale of three Consumer properties that were closed as part of our MAP 2025 program and a $4.4 million bad debt expense in the Consumer segment related to a retail customer bankruptcy in the prior period that did not recur, along with MAP 2025 benefits and decreased professional fees related to our MAP 2025 initiatives.

Current wording

SG&A Our consolidated SG&A expense during the third quarter was $32.2 million higher versus the same period last year but decreased to 33.2% of net sales from 34.0% of net sales for the prior year period. This increase was primarily driven by $17.0 million of additional SG&A from acquisitions, unfavorable foreign currency translation, investments in growth initiatives, merit increases, as well as increased healthcare costs, higher executive departure costs, distribution costs and advertising costs. This was partially offset by MAP 2025 benefits, savings from 2026 restructuring actions, along with reduced professional fees associated with merger and acquisition ("M&A") activities and reduced bad debt expense.

Previous wording

Our CPG segment SG&A increased approximately $18.8 million during the second quarter of fiscal 2026 versus the comparable prior year period and increased as a percentage of net sales. The increase was mainly due to $1.6 million of additional SG&A from acquisitions, merit increases, increased sales compensation, increased commissions, travel expenses and warranty expense, partially offset by decreased bonus expense and MAP 2025 savings.

Current wording

Our CPG segment SG&A increased approximately $10.4 million during the third quarter of fiscal 2026 versus the comparable prior year period but decreased as a percentage of net sales. The increase was mainly due to $1.9 million of additional SG&A from acquisitions, unfavorable foreign currency translation, merit increases and increased bonus expense, partially offset by MAP 2025 savings and savings from 2026 restructuring actions.

Previous wording

Our PCG segment SG&A increased approximately $2.4 million during the second quarter of fiscal 2026 versus the comparable prior year period but decreased as a percentage of net sales. The increase in expense was driven by $2.2 million of additional SG&A from acquisitions, merit increases and increased distribution costs, partially offset by decreased bad debt expense, decreased commission and bonus expense and MAP 2025 savings.

Current wording

Our PCG segment SG&A increased approximately $1.3 million during the third quarter of fiscal 2026 versus the comparable prior year period but decreased as a percentage of net sales. The increase in expense was driven by $1.4 million of additional SG&A from acquisitions, unfavorable foreign currency translation, increased bonus expense and increased distribution costs, partially offset by MAP 2025 savings and savings from 2026 restructuring actions.

Previous wording

SG&A expenses in our corporate/other category during the second quarter of fiscal 2026 increased approximately $2.9 million versus last year’s second quarter. This was mainly due to increased healthcare costs, compensation costs and M&A expenses, partially offset by decreased professional fees related to our MAP 2025 operational improvement initiatives.

Current wording

SG&A expenses in our corporate/other category during the third quarter of fiscal 2026 increased approximately $2.9 million versus last year’s third quarter. This was mainly due to increased healthcare costs, compensation costs and higher executive departure costs, partially offset by decreased professional fees associated with M&A activities, decreased professional fees related to our MAP 2025 operational improvement initiatives and savings from 2026 restructuring actions.

Previous wording

On May 31, 2025, we formally concluded MAP 2025; however, certain projects identified prior to May 31, 2025, are not yet completed. As a result, we plan to continue recognizing restructuring costs throughout fiscal 2026. We currently expect to incur approximately $8.4 million of future additional charges as projects related to MAP 2025 are completed.

Current wording

Our MAP 2025 initiative was a multi-year restructuring plan designed to improve margins by streamlining business processes, reducing working capital, implementing commercial initiatives to drive improved mix, pricing discipline and salesforce effectiveness and improving operating efficiency. On May 31, 2025, we formally concluded MAP 2025; however, certain projects identified prior to May 31, 2025, are not yet completed. As a result, we plan to continue recognizing restructuring costs throughout fiscal 2026. We currently expect to incur approximately $6.0 million of future additional charges as projects related to MAP 2025 are completed.

Previous wording

The following table summarizes restructuring charges recorded during the three months ended November 30, 2025 and 2024, related to our MAP 2025 initiative, which was a multi-year restructuring plan designed to improve margins by streamlining business processes, reducing working capital, implementing commercial initiatives to drive improved mix, pricing discipline and salesforce effectiveness and improving operating efficiency:

Current wording

The following table summarizes restructuring charges recorded during the three months ended February 28, 2026 and 2025:

Previous wording

For further information and details about MAP 2025, see Note 3, “Restructuring,” to the Consolidated Financial Statements.

Current wording

For further information and details about our restructuring initiatives, see Note 3, “Restructuring,” to the Consolidated Financial Statements.

Previous wording

On a consolidated basis, our results reflect reduced fixed-cost absorption at businesses with volume declines and temporary inefficiencies due to MAP 2025 plant consolidations, cost inflation, increased interest expense and increased SG&A as a result of higher healthcare costs, M&A costs, and investments in growth initiatives, partially offset by MAP 2025 operational improvements. Our CPG segment results reflect increased SG&A due to investments in growth initiatives, temporary inefficiencies due to MAP 2025 plant consolidations and lower fixed-cost absorption at businesses with volume declines, partially offset by MAP 2025 benefits. Our PCG segment results reflect earnings contributed by higher sales volumes and MAP 2025 operational improvement initiatives, partially offset by growth investments and unfavorable mix. Our Consumer segment results reflect the $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, the $4.4 million net gain on the sale of three properties that were closed as part of our MAP 2025 program and MAP 2025 benefits, which were partially offset by cost inflation, reduced fixed-cost absorption from lower volumes and temporary inefficiencies from a plant consolidation and ramp up of a shared distribution center. The prior period Consumer results also include $4.4 million of bad debt expense from a retail customer bankruptcy. Our corporate/other category results reflect increased healthcare costs, compensation costs, interest expense and M&A costs, partially offset by decreased professional fees related to our MAP 2025 operational improvement initiatives, improved investment returns and reduced pension non-service costs.

Current wording

On a consolidated basis, our results reflect improved sales and improved fixed-cost leverage from higher volumes, aided by MAP 2025 operational improvement initiatives and savings from 2026 restructuring actions, partially offset by cost inflation and increased restructuring expense. Our CPG segment results reflect improved sales, improved sales mix, improved fixed-cost leverage, MAP 2025 benefits and savings from 2026 restructuring actions, partially offset by temporary inefficiencies due to MAP 2025 plant consolidations and increased restructuring expense. Our PCG segment results reflect earnings contributed by higher sales volumes, improved fixed-cost leverage, MAP 2025 operational improvement initiatives and savings from 2026 restructuring actions, partially offset by unfavorable sales mix and increased restructuring expense. Our Consumer segment results reflect the integration of acquired businesses, product rationalization, and MAP operational improvement initiatives, including savings from 2026 restructuring actions, which more than offset reduced fixed-cost leverage from lower volumes, cost inflation and increased restructuring expense. Our corporate/other category results reflect improved investment returns, savings from 2026 restructuring actions, reduced pension non-service costs and reduced professional fees associated with M&A activities, partially offset by increased compensation costs, healthcare costs, interest expense and increased restructuring expense.

Previous wording

Income Tax Rate The effective income tax rate of 23.5% for the three months ended November 30, 2025, compares to the effective income tax rate of 13.9% for the three months ended November 30, 2024. The effective income tax rates for both periods reflect variances from the 21% statutory rate due to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation and foreign tax credits. Additionally, the effective tax rate for the three-month period ending November 30, 2024, reflects a net $21.8 million favorable adjustment to our deferred income taxes associated with our U.S. foreign tax credit carryforwards.

Current wording

Income Tax Rate The effective income tax rate of 25.5% for the three months ended February 28, 2026, compares to the effective income tax benefit rate of (27.7%) for the three months ended February 28, 2025. The effective income tax rates for both periods reflect variances from the 21% statutory rate due to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation and foreign tax credits. Additionally, the effective tax rate for the three-month period ending February 28, 2025, reflects a $22.1 million net favorable adjustment for the reversal of valuation allowances on U.S. foreign tax credit carryforwards.

Previous wording

Our CPG segment generated organic sales growth during the first half of fiscal 2026. This growth was driven by systems and roofing solutions serving high-performance buildings and infrastructure projects, partially offset by soft market conditions in select emerging markets and in the disaster restoration business due to reduced storm activity compared to the prior period.

Current wording

Our CPG segment generated organic sales growth during the first nine months of fiscal 2026. This growth was driven by systems and roofing solutions serving high-performance buildings and infrastructure projects, partially offset by soft market conditions in select international markets and in the disaster restoration business due to reduced storm activity compared to the prior period. Favorable foreign currency translation also contributed to the sales increase.

Previous wording

Our PCG segment generated strong organic sales growth during the first half of fiscal 2026, driven by broad-based growth in turnkey flooring solutions serving high-performance buildings, protective coatings, food coatings and specialty OEM coatings. Acquisitions also contributed to the sales increase.

Current wording

Our PCG segment generated organic sales growth during the first nine months of fiscal 2026, driven by broad-based growth in turnkey flooring solutions serving high-performance buildings, protective coatings, fireproofing coatings, food coatings and specialty OEM coatings, along with strong demand in India and the Middle East. Acquisitions and favorable foreign currency translation also contributed to the sales increase.

Previous wording

Our Consumer segment experienced organic sales declines in the first half of fiscal 2026 due to softness in DIY markets, product rationalization and delayed sales related to software system implementations and the integration of a shared distribution center. These organic declines were partially offset by acquisitions and improved pricing to recover inflation.

Current wording

Our Consumer segment experienced organic sales declines in the first nine months of fiscal 2026 due to softness in DIY markets and product rationalization, partially offset by improved pricing to recover inflation. These organic sales declines were partially offset by acquisitions.

Previous wording

Gross Profit Margin Our consolidated gross profit margin of 41.6% of net sales for the first half of fiscal 2026 compares to a consolidated gross profit margin of 42.0% for the comparable period a year ago. The current period gross profit margin decrease of approximately 0.4%, or 40 bps, primarily resulted from reduced fixed-cost absorption at businesses with volume declines, unfavorable sales mix, cost inflation, inclusive of tariff-related impacts, and temporary inefficiencies due to MAP 2025 plant consolidations, which was partially offset by improved pricing to recover inflation and our MAP 2025 initiatives, which generated incremental savings in procurement, manufacturing and commercial excellence.

Current wording

Gross Profit Margin Our consolidated gross profit margin of 41.0% of net sales for the first nine months of fiscal 2026 was consistent with the comparable prior year period. The current period gross profit margin remained flat as reduced fixed-cost absorption at businesses with volume declines, unfavorable sales mix, cost inflation, inclusive of tariff-related impacts, and temporary inefficiencies due to MAP 2025 plant consolidations were offset by improved pricing to recover inflation and our MAP 2025 initiatives, which generated incremental savings in procurement, manufacturing and commercial excellence.

Previous wording

We expect that the inflationary headwinds noted above will be reflected in our results throughout fiscal 2026.

Current wording

We expect that the inflationary headwinds noted above, as well as the impact from geopolitical-driven inflation, will be reflected in our results throughout fiscal 2026 and into fiscal 2027.

Previous wording

SG&A Our consolidated SG&A expense during the first half of fiscal 2026 was $67.0 million higher versus the same period last year and increased to 27.9% of net sales from 27.7% of net sales for the prior year period. These increases were primarily driven by $37.3 million of additional SG&A from acquisitions, investments in growth initiatives, merit increases, as well as increased healthcare costs, commission expenses, advertising costs and M&A expenses. This was partially offset by a $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, a $4.4 million net gain on the sale of three Consumer properties that were closed as part of our MAP 2025 program and a $4.4 million bad debt expense in the Consumer segment related to a retail customer bankruptcy in the prior period that did not recur, along with MAP 2025 benefits, decreased bonus expense and decreased professional fees related to our MAP 2025 initiatives.

Current wording

SG&A Our consolidated SG&A expense during the first nine months of fiscal 2026 was $99.2 million higher versus the same period last year and accounted for 29.4% of net sales, which is consistent with the prior year period. These increases were primarily driven by $54.3 million of additional SG&A from acquisitions, unfavorable foreign currency translation, investments in growth initiatives, merit increases, higher executive departure costs, as well as increased healthcare costs, commission expenses, distribution costs, advertising costs and warranty expense. This was partially offset by a $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, a $4.4 million net gain on the sale of three Consumer properties that were closed as part of our MAP 2025 program and a $4.4 million bad debt expense in the Consumer segment related to a retail customer bankruptcy in the prior period that did not recur, along with MAP 2025 benefits, savings from 2026 restructuring actions, decreased bonus expense and decreased professional fees related to our MAP 2025 initiatives.

Previous wording

Our CPG segment SG&A increased approximately $41.0 million during the first half of fiscal 2026 versus the comparable prior year period and increased as a percentage of net sales. The increase was mainly due to $2.9 million of additional SG&A related to acquisitions, merit increases, increased sales compensation, increased commissions, increased travel expense and increased warranty expense, partially offset by MAP 2025 savings.

Current wording

Our CPG segment SG&A increased approximately $51.4 million during the first nine months of fiscal 2026 versus the comparable prior year period and increased as a percentage of net sales. The increase was mainly due to $4.8 million of additional SG&A related to acquisitions, unfavorable foreign currency translation, merit increases, increased sales compensation, increased travel expense and increased warranty expense, partially offset by reduced bad debt expense, MAP 2025 savings and savings from 2026 restructuring actions.

Previous wording

Our PCG segment SG&A increased approximately $10.5 million during the first half of fiscal 2026 versus the comparable prior year period but decreased as a percentage of net sales. The increase in expense was driven by $5.6 million of additional SG&A related to acquisitions and merit increases, partially offset by reduced bad debt expense and MAP 2025 savings.

Current wording

Our PCG segment SG&A increased approximately $11.8 million during the first nine months of fiscal 2026 versus the comparable prior year period but decreased as a percentage of net sales. The increase in expense was driven by $6.9 million of additional SG&A related to acquisitions, unfavorable foreign currency translation and merit increases, partially offset by reduced bad debt expense, MAP 2025 savings and savings from 2026 restructuring actions.

Previous wording

Our Consumer segment SG&A increased by approximately $10.3 million during the first half of fiscal 2026 versus the same period last year but decreased as a percentage of net sales. The period-over-period increase in SG&A was primarily attributable to $28.8 million of additional SG&A related to acquisitions, along with increased distribution and advertising costs. These increases were partially offset by the $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, the $4.4 million net gain on the sale of three properties that were closed as part of our MAP 2025 program and a $4.4 million bad debt expense related to a retail customer bankruptcy in the prior period that did not recur, along with MAP 2025 savings.

Current wording

Our Consumer segment SG&A increased by approximately $27.9 million during the first nine months of fiscal 2026 versus the same period last year and increased slightly as a percentage of net sales. The period-over-period increase in SG&A was primarily attributable to $42.6 million of additional SG&A related to acquisitions, unfavorable foreign currency translation and higher executive departure costs, along with increased distribution costs and advertising costs. These increases were partially offset by the $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, the $4.4 million net gain on the sale of three properties that were closed as part of our MAP 2025 program and a $4.4 million bad debt expense related to a retail customer bankruptcy in the prior period that did not recur, along with MAP 2025 savings and savings from 2026 restructuring actions.

Previous wording

SG&A expenses in our corporate/other category during the first half of fiscal 2026 increased approximately $5.2 million versus the same period last year. This was mainly due to increased healthcare costs, compensation costs and M&A expenses, partially offset by decreased professional fees related to our MAP 2025 operational improvement initiatives.

Current wording

SG&A expenses in our corporate/other category during the first nine months of fiscal 2026 increased approximately $8.1 million versus the same period last year. This was mainly due to increased healthcare costs, compensation costs, higher executive departure costs and professional fees associated with M&A activities, partially offset by decreased professional fees related to our MAP 2025 operational improvement initiatives and savings from 2026 restructuring actions.

Previous wording

The following table summarizes the retirement-related benefit plans’ impact on income before income taxes for the six months ended November 30, 2025 and 2024, as the service cost component has a significant impact on our SG&A expense:

Current wording

The following table summarizes the retirement-related benefit plans’ impact on income before income taxes for the nine months ended February 28, 2026 and 2025, as the service cost component has a significant impact on our SG&A expense:

Previous wording

On May 31, 2025, we formally concluded MAP 2025; however, certain projects identified prior to May 31, 2025, are not yet completed. As a result, we plan to continue recognizing restructuring costs throughout fiscal 2026. We currently expect to incur approximately $8.4 million of future additional charges as projects related to MAP 2025 are completed.

Current wording

Our MAP 2025 initiative was a multi-year restructuring plan designed to improve margins by streamlining business processes, reducing working capital, implementing commercial initiatives to drive improved mix, pricing discipline and salesforce effectiveness and improving operating efficiency. On May 31, 2025, we formally concluded MAP 2025; however, certain projects identified prior to May 31, 2025, are not yet completed. As a result, we plan to continue recognizing restructuring costs throughout fiscal 2026. We currently expect to incur approximately $6.0 million of future additional charges as projects related to MAP 2025 are completed.

Previous wording

For further information and details about MAP 2025, see Note 3, “Restructuring,” to the Consolidated Financial Statements.

Current wording

For further information and details about our restructuring initiatives, see Note 3, “Restructuring,” to the Consolidated Financial Statements.

Previous wording

On a consolidated basis, our results reflect improved sales and MAP 2025 operational improvements, partially offset by unfavorable sales mix, raw material inflation, temporary inefficiencies due to MAP 2025 plant consolidations, increased interest expense and increased SG&A as a result of higher healthcare costs, M&A costs, and investments in growth initiatives. Our CPG segment results reflect increased SG&A due to investments in growth initiatives, temporary inefficiencies due to MAP 2025 plant consolidations and lower fixed-cost absorption at businesses with volume declines, partially offset by MAP 2025 benefits. Our PCG segment results reflect earnings contributed by higher sales volumes and MAP 2025 operational improvement initiatives, partially offset by growth investments and unfavorable mix. Our Consumer segment results reflect the $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, the $4.4 million net gain on the sale of three properties that were closed as part of our MAP 2025 program, reduced restructuring expenses and MAP 2025 benefits, which were partially offset by cost inflation, increased marketing expenses, and reduced fixed-cost absorption from lower volumes and temporary inefficiencies from a plant consolidation and ramp up of a shared distribution center. Our corporate/other category results reflect increased healthcare costs, compensation costs, interest expense and M&A costs, partially offset by decreased professional fees related to our MAP 2025 operational improvement initiatives, improved investment returns and reduced pension non-service costs.

Current wording

On a consolidated basis, our results reflect improved sales, MAP 2025 operational improvements and savings from 2026 restructuring actions, partially offset by unfavorable sales mix, cost inflation, temporary inefficiencies due to MAP 2025 plant consolidations, increased interest expense, increased SG&A as a result of higher healthcare costs, investments in growth initiatives and increased restructuring expense. Our CPG segment results reflect improved sales, MAP 2025 benefits and savings from 2026 restructuring actions, partially offset by temporary inefficiencies due to MAP 2025 plant consolidations, increased SG&A due to investments in growth initiatives, lower fixed-cost absorption at businesses with volume declines and increased restructuring expense. Our PCG segment results reflect earnings contributed by higher sales volumes, MAP 2025 operational improvement initiatives and savings from 2026 restructuring actions, partially offset by growth investments, cost inflation, unfavorable mix and increased restructuring expense. Our Consumer segment results reflect the $12.7 million gain on a fair value adjustment of the earn-out liability associated with the Star Brands Group acquisition, the $4.4 million net gain on the sale of three properties that were closed as part of our MAP 2025 program, the integration of acquired businesses, MAP 2025 benefits and savings from 2026 restructuring actions, which were partially offset by cost inflation, increased marketing expenses, and reduced fixed-cost absorption from lower volumes and temporary inefficiencies from a plant consolidation and ramp up of a shared distribution center. Our corporate/other category results reflect increased healthcare costs, compensation costs, interest expense, professional fees associated with M&A activities and increased restructuring expense, partially offset by decreased professional fees related to our MAP 2025 operational improvement initiatives, improved investment returns, savings from 2026 restructuring actions and reduced pension non-service costs.

Previous wording

Income Tax Rate The effective income tax rate of 23.5% for the six months ended November 30, 2025, compares to the effective income tax rate of 18.2% for the six months ended November 30, 2024. The effective income tax rates for both periods reflect variances from the 21% statutory rate due to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation and foreign tax credits. The effective tax rate for the six-month period ending November 30, 2024, reflects a net $21.8 million favorable adjustment to our deferred income taxes associated with our U.S. foreign tax credit carryforwards and a favorable adjustment for incremental U.S. foreign tax credits associated with a distribution of historic foreign earnings that were previously not considered to be permanently reinvested. The distribution of such earnings was done in conjunction with the execution of global cash redeployment and debt optimization projects.

Current wording

Income Tax Rate The effective income tax rate of 23.8% for the nine months ended February 28, 2026, compares to the effective income tax rate of 14.7% for the nine months ended February 28, 2025. The effective income tax rates for both periods reflect variances from the 21% statutory rate due to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation and foreign tax credits. Additionally, the effective income tax rate for the nine-month period ended February 28, 2025, reflects a net $22.1 million favorable adjustment for the reversal of valuation allowances on U.S. foreign tax credit carryforwards. Further, the effective income tax rate for the nine-month period reflects net favorable income tax adjustments recorded during the first and second quarters of fiscal 2025, including a $21.8 million adjustment for an increase in our deferred income tax assets for U.S. foreign tax credit forwards, and for incremental U.S. foreign tax credits associated with a distribution of historic foreign earnings that were previously not considered to be permanently reinvested, respectively.

Previous wording

Approximately $583.2 million of cash was provided by operating activities during the first six months of fiscal 2026, compared with $527.5 million of cash provided by operating activities during the same period last year. The net change in cash from operations includes the change in net income, which decreased by $22.7 million during the first six months of fiscal 2026 versus the same period during fiscal 2025.

Current wording

Approximately $656.7 million of cash was provided by operating activities during the first nine months of fiscal 2026, compared with $619.0 million of cash provided by operating activities during the same period last year. The net change in cash from operations includes the change in net income, which decreased by $23.4 million during the first nine months of fiscal 2026 versus the same period during fiscal 2025. The prior year net income is elevated because of significant non-cash adjustments related to deferred income taxes.

Previous wording

During the first six months of fiscal 2026, the change in accounts receivable provided approximately $68.1 million more cash than the first six months of fiscal 2025. This was primarily due to stronger sales in our CPG and PCG segments in the fourth quarter of fiscal 2025 and the first quarter of fiscal 2026 compared to the comparable prior year periods, resulting in increased collections in the current period. Average days sales outstanding at November 30, 2025, increased to 61.4 days from 61.2 days at November 30, 2024.

Current wording

During the first nine months of fiscal 2026, the change in accounts receivable provided approximately $4.5 million more cash than the first nine months of fiscal 2025, primarily due to the timing of cash collections. Average days sales outstanding at February 28, 2026, increased to 62.6 days from 61.9 days at February 28, 2025.

Previous wording

During the first six months of fiscal 2026, the change in inventory used approximately $16.6 million less cash compared to spending during the same period a year ago as a result of improved procurement practices enabled by MAP 2025, partially offset by strategic purchases to mitigate the impact of tariffs. Average days of inventory outstanding at November 30, 2025, increased to 79.5 days from 78.4 days at November 30, 2024.

Current wording

During the first nine months of fiscal 2026, the change in inventory used approximately $42.6 million less cash compared to spending during the same period a year ago as a result of improved procurement practices enabled by MAP 2025 and the use of safety stock strategically purchased during the fourth quarter of fiscal 2025 to mitigate the impact of tariffs. Average days of inventory outstanding at February 28, 2026, increased to 87.1 days from 85.2 days at February 28, 2025.

Previous wording

The change in accounts payable during the first six months of fiscal 2026 used approximately $47.9 million more cash than during the first six months of fiscal 2025. This resulted from reduced inventory purchases at our Consumer segment during the second quarter of fiscal 2026. This is in comparison to the prior year period, when more pronounced benefits from working capital efficiencies enabled by MAP 2025 were realized when these initiatives were first implemented. Average days payables outstanding increased to 91.7 days at November 30, 2025, from 87.8 days at November 30, 2024.

Current wording

The change in accounts payable during the first nine months of fiscal 2026 used approximately $90.3 million more cash than during the first nine months of fiscal 2025. This resulted from reduced inventory purchases at our Consumer and CPG segments during the current period compared to the end of fiscal 2025. Average days payables outstanding increased to 93.7 days at February 28, 2026, from 89.9 days at February 28, 2025.

Previous wording

For the first six months of fiscal 2026, cash used for investing activities increased by $78.6 million to $277.1 million as compared to $198.5 million in the prior year period. This year-over-year increase in cash used for investing activities was driven primarily by a $76.0 million increase in cash used for business acquisitions.

Current wording

For the first nine months of fiscal 2026, cash used for investing activities increased by $8.0 million to $313.7 million as compared to $305.7 million in the prior year period. This year-over-year increase in cash used for investing activities was driven primarily by a $34.2 million increase in cash used for business acquisitions, partially offset by an $18.2 million increase in cash proceeds from sales of assets and businesses.

Previous wording

We paid for capital expenditures of $111.8 million and $100.7 million during the first six months of fiscal 2026 and fiscal 2025, respectively. Our capital expenditures facilitate our continued growth, allow us to achieve production and distribution efficiencies, expand capacity, introduce new technology, improve environmental health and safety capabilities, improve information systems, and enhance our administration capabilities. We continue to invest capital spending in growth initiatives and to improve operational efficiencies in fiscal 2026.

Current wording

We paid for capital expenditures of $159.6 million and $158.9 million during the first nine months of fiscal 2026 and fiscal 2025, respectively. Our capital expenditures facilitate our continued growth, allow us to achieve production and distribution efficiencies, expand capacity, introduce new technology, improve environmental health and safety capabilities, improve information systems, and enhance our administration capabilities. We continue to invest capital spending in growth initiatives and to improve operational efficiencies in fiscal 2026.

Previous wording

Our captive insurance companies invest their excess cash in marketable securities in the ordinary course of conducting their operations, and this activity will continue. Differences in the amounts related to these activities on a year-over-year basis are primarily attributable to differences in the timing and performance of their investments balanced against amounts required to satisfy claims. At November 30, 2025 and May 31, 2025, the fair value of our investments in available-for-sale debt securities and marketable equity securities, which includes captive insurance-related assets, totaled $181.9 million and $159.7 million, respectively.

Current wording

Our captive insurance companies invest their excess cash in marketable securities in the ordinary course of conducting their operations, and this activity will continue. Differences in the amounts related to these activities on a year-over-year basis are primarily attributable to differences in the timing and performance of their investments balanced against amounts required to satisfy claims. At February 28, 2026 and May 31, 2025, the fair value of our investments in available-for-sale debt securities and marketable equity securities, which includes captive insurance-related assets, totaled $188.7 million and $159.7 million, respectively.

Previous wording

As of November 30, 2025, approximately $288.4 million of our consolidated cash and cash equivalents were held at various foreign subsidiaries, compared with $274.9 million at May 31, 2025. Undistributed earnings held at our foreign subsidiaries that are considered permanently reinvested will be used, for instance, to expand operations organically or for acquisitions in foreign jurisdictions. Further, our operations in the U.S. generate sufficient cash flow to satisfy U.S. operating requirements. Refer to Note 8, “Income Taxes,” to the Consolidated Financial Statements for additional information regarding unremitted foreign earnings.

Current wording

As of February 28, 2026, approximately $267.7 million of our consolidated cash and cash equivalents were held at various foreign subsidiaries, compared with $274.9 million at May 31, 2025. Undistributed earnings held at our foreign subsidiaries that are considered permanently reinvested will be used, for instance, to expand operations organically or for acquisitions in foreign jurisdictions. Further, our operations in the U.S. generate sufficient cash flow to satisfy U.S. operating requirements. Refer to Note 8, “Income Taxes,” to the Consolidated Financial Statements for additional information regarding unremitted foreign earnings.

Previous wording

For the first six months of fiscal 2026, financing activities used $297.8 million of cash, which compares to cash used for financing activities of $286.4 million during the first six months of fiscal 2025. The overall increase in cash used for financing activities was driven principally by debt-related activities. During the first six months of fiscal 2026, we repaid $231.4 million on our revolving credit facility and borrowed $110.0 million on our accounts receivable securitization program ("AR Program"). In comparison, we borrowed $25.1 million on our revolving credit facility and made payments of $130.0 million on our AR Program during the first six months of fiscal 2025. See below for further details on the significant components of our debt.

Current wording

For the first nine months of fiscal 2026, financing activities used $366.0 million of cash, which compares to cash used for financing activities of $294.2 million during the first nine months of fiscal 2025. The overall increase in cash used for financing activities was driven principally by debt-related activities. During the first nine months of fiscal 2026, we repaid $145.3 million on our revolving credit facility and borrowed $49.0 million on our accounts receivable securitization program ("AR Program"). In comparison, we made payments of $130.0 million on our AR Program and borrowed $104.0 million on our revolving credit facility during the first nine months of fiscal 2025. See below for further details on the significant components of our debt.

Previous wording

Our available liquidity, including our cash and cash equivalents and amounts available under our committed credit facilities, stood at $1.10 billion and $969.1 million as of November 30, 2025 and May 31, 2025, respectively.

Current wording

Our available liquidity, including our cash and cash equivalents and amounts available under our committed credit facilities, stood at $1.02 billion and $969.1 million as of February 28, 2026 and May 31, 2025, respectively.

Previous wording

In August 2022, we amended our $1.3 billion unsecured syndicated revolving credit facility (the "Revolving Credit Facility"), which was set to expire on October 31, 2023. The amendment extended the expiration date to August 1, 2027, and increased the borrowing capacity to $1.35 billion. The Revolving Credit Facility bears interest at either the base rate or the adjusted Secured Overnight Financing Rate (SOFR), as defined, at our option, plus a spread determined by our debt rating. The Revolving Credit Facility includes sublimits for the issuance of swingline loans, which are comparatively short-term loans used for working capital purposes and letters of credit. The Revolving Credit Facility is available to refinance existing indebtedness, to finance working capital and capital expenditures, and for general corporate purposes.

Current wording

Our $1.35 billion unsecured syndicated revolving credit facility (the "Revolving Credit Facility"), was amended during the third quarter of fiscal 2026. The amendment extended the expiration date to February 27, 2031 and streamlined our financial covenants. The Revolving Credit Facility bears interest at either the base rate or the adjusted Secured Overnight Financing Rate (SOFR), as defined, at our option, plus a spread determined by our debt rating. The Revolving Credit Facility includes sublimits for the issuance of swingline loans, which are comparatively short-term loans used for working capital purposes and letters of credit. The Revolving Credit Facility is available to refinance existing indebtedness, to finance working capital and capital expenditures, and for general corporate purposes.

Previous wording

The Revolving Credit Facility requires us to comply with various customary affirmative and negative covenants, including a leverage covenant (i.e. Net Leverage Ratio) and interest coverage ratio, which are calculated in accordance with the terms as defined by the Revolving Credit Facility. Under the terms of the leverage covenant, we may not permit our leverage ratio for total indebtedness to consolidated EBITDA for the four most recent fiscal quarters to exceed 3.75 to 1.00. During certain periods and per the terms of the Revolving Credit Facility, this ratio may be increased to 4.25 to 1.00 upon delivery of a notice to our lender requesting an increase to our maximum leverage or in connection with certain “material acquisitions.” The minimum required consolidated interest coverage ratio for EBITDA to interest expense is 3.50 to 1.00. The interest coverage ratio is calculated at the end of each fiscal quarter for the four fiscal quarters then ended using EBITDA as defined in the Revolving Credit Facility.

Current wording

The Revolving Credit Facility requires us to comply with various customary affirmative and negative covenants, including a leverage covenant (i.e. Net Leverage Ratio), which is calculated in accordance with the terms as defined by the Revolving Credit Facility. Under the terms of the leverage covenant, we may not permit our leverage ratio for total indebtedness to consolidated EBITDA for the four most recent fiscal quarters to exceed 3.75 to 1.00. During certain periods and per the terms of the Revolving Credit Facility, this ratio may be increased to 4.25 to 1.00 upon delivery of a notice to our lender requesting an increase to our maximum leverage or in connection with certain “material acquisitions.”