LINDSAY CORP

Previous wording

This Quarterly Report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical are forward-looking and reflect information concerning possible or assumed future results of operations and planned financing of the Company. In addition, forward-looking statements may be made orally or in press releases, conferences, reports, on the Company's web site, or otherwise, in the future by or on behalf of the Company. When used by or on behalf of the Company, the words “expect,” “anticipate,” “estimate,” “believe,” “intend,” “will,” “plan,” “predict,” “project,” “outlook,” “could,” “may,” “should” or similar expressions generally identify forward-looking statements. The entire section entitled “Executive Overview and Outlook” should be considered forward-looking statements. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Current wording

This Quarterly Report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical are forward-looking and reflect information concerning possible or assumed future results of operations and planned financing of the Company. In addition, forward-looking statements may be made orally or in press releases, conferences, reports, on the Company's web site, or otherwise, in the future by or on behalf of the Company. When used by or on behalf of the Company, the words “expect,” “anticipate,” “estimate,” “believe,” “intend,” “will,” “plan,” “predict,” “project,” “outlook,” “could,” “may,” “should” or similar expressions generally identify forward-looking statements. Statements in the section entitled “Executive Overview and Outlook” that are not historical should be considered forward-looking statements. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Previous wording

The Company’s accounting policies that are most important to the presentation of its results of operations and financial condition, and which require the greatest use of judgments and estimates by management, are designated as its critical accounting policies. See discussion of the Company’s critical accounting policies under Item 7 in the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended August 31, 2025. Management periodically re-evaluates and adjusts its critical accounting policies as circumstances change. There were no significant changes in the Company’s critical accounting policies during the six months ended February 28, 2026.

Current wording

The Company’s accounting policies that are most important to the presentation of its results of operations and financial condition, and which require the greatest use of judgments and estimates by management, are designated as its critical accounting policies. See discussion of the Company’s critical accounting policies under Item 7 in the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended August 31, 2025. Management periodically re-evaluates and adjusts its critical accounting policies as circumstances change. There were no significant changes in the Company’s critical accounting policies during the nine months ended May 31, 2026.

Previous wording

Operating revenues for the three months ended February 28, 2026 were $157.7 million, a decrease of 16 percent compared to $187.1 million for the three months ended February 28, 2025. Irrigation segment revenues for the three months ended February 28, 2026 decreased 5 percent to $141.2 million, while infrastructure segment revenues decreased 58 percent to $16.5 million. Net earnings for the three months ended February 28, 2026 were $12.0 million, or $1.15 per diluted share, compared to net earnings of $26.6 million, or $2.44 per diluted share, for the three months ended February 28, 2025. Operating income was lower than the prior year primarily due to lower revenues in both segments. This decrease in operating income was partially offset by higher other income compared to the prior year, while the effective income tax rate was higher than the prior year.

Current wording

Operating revenues for the three months ended May 31, 2026 were $160.8 million, a decrease of 5 percent compared to $169.5 million for the three months ended May 31, 2025. Irrigation segment revenues for the three months ended May 31, 2026 decreased 7 percent to $133.0 million, while infrastructure segment revenues increased 8 percent to $27.7 million. Net earnings for the three months ended May 31, 2026 were $15.8 million, or $1.53 per diluted share, compared to net earnings of $19.5 million, or $1.78 per diluted share, for the three months ended May 31, 2025. Operating income was lower than the prior year primarily due to lower revenues in the irrigation segment and lower gross margins in both segments. This decrease in operating income was partially offset by slightly higher other income and a lower effective income tax rate compared to the prior year.

Previous wording

Agricultural commodity prices – As of February 2026, U.S. corn prices have decreased approximately 10 percent and U.S. soybean prices have increased approximately 11 percent from price levels prevailing in February 2025. Agriculture commodity prices fluctuate based on supply factors, such as global production and inventory levels of commodities, and demand factors such as food and feed consumption, biofuel production and the level of China's demand for agricultural imports.

Current wording

Agricultural commodity prices – As of May 2026, U.S. corn prices have decreased approximately 2 percent and U.S. soybean prices have increased approximately 11 percent from price levels prevailing in May 2025. Agriculture commodity prices fluctuate based on supply factors, such as global production and inventory levels of commodities, and demand factors such as food and feed consumption, biofuel production and the level of China's demand for agricultural imports.

Previous wording

In 2025, new tariffs were imposed in the U.S. on imports from Canada, Mexico, China and other countries on certain materials involved in the Company's production of goods. In response to these tariffs, the Company implemented a comprehensive action plan that included supplier negotiation, strategic inventory placement, and other supply chain initiatives to manage potential cost impacts. The impact of the tariffs has resulted in a marginal increase to the Company's cost of goods, which has been passed through to the market through an increase in the pricing of products. The potential impact of additional tariffs or retaliatory actions has been considered, and the Company plans to utilize its global footprint and supply chain to try to minimize the potential impact of these actions on its business and customers. On February 20, 2026, the United States Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. The Company is currently evaluating the impact of this decision on its business, as the ultimate timing and amount of any potential refunds is still uncertain and subject to further legal and regulatory developments.

Current wording

In 2025, new tariffs were imposed in the U.S., including under the International Emergency Economic Powers Act (the "IEEPA"), on imports from Canada, Mexico, China and other countries on certain materials involved in the Company's production of goods. In response to these tariffs, the Company implemented a comprehensive action plan that included supplier negotiation, strategic inventory placement, and other supply chain initiatives to manage potential cost impacts. The impact of the tariffs has resulted in a marginal increase to the Company's cost of goods, of which a portion has been passed through to the market through an increase in the pricing of products. The potential impact of additional tariffs or retaliatory actions has been considered, and the Company plans to utilize its global footprint and supply chain to try to minimize the potential impact of these actions on its business and customers. On February 20, 2026, the United States Supreme Court issued a decision invalidating tariffs imposed under the IEEPA. The Company has applied for refunds for IEEPA tariffs where it believes it is entitled to a refund claim. The Company has recorded a recovery of the tariff for claims where any refund is considered probable and reasonably estimable.

Previous wording

On December 8, 2025, the Trump administration announced $12 billion in one-time payments to farmers, primarily those who grow corn and soybeans, in the wake of the recent tariff impact. These payments are expected to be made starting in the first calendar quarter of 2026 and continuing throughout the early part of 2026. While helpful to overall farm income, these payments are not expected to result in a meaningful increase in demand for irrigation equipment.

Current wording

On December 8, 2025, the Trump administration announced $12 billion in one-time payments to farmers, primarily those who grow corn and soybeans, in the wake of the recent tariff impact. These payments were made starting in the first calendar quarter of 2026 and are expected to continue throughout 2026. While helpful to overall farm income, these payments are not expected to result in a meaningful increase in demand for irrigation equipment.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted in the U.S. permanently extending many of the expiring provisions of the Tax Cuts and Jobs Act of 2017. In particular, the OBBBA restores Section 168 bonus depreciation, which is intended to encourage equipment purchases by allowing 100 percent of the cost of the equipment to be treated as an income tax deduction in the year of purchase rather than being amortized over its useful life. This new legislation has multiple effective dates, with certain provisions becoming effective in 2025 and others implemented through 2027. The enactment of the OBBBA did not have a significant impact on the Company's estimated annual effective income tax rate in fiscal 2026.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted in the U.S. permanently extending many of the expiring provisions of the Tax Cuts and Jobs Act of 2017. In particular, the OBBBA restores Section 168 bonus depreciation, which is intended to encourage equipment purchases by allowing 100 percent of the cost of the equipment to be treated as an income tax deduction in the year of purchase rather than being amortized over its useful life. This new legislation has multiple effective dates, with certain provisions having become effective in 2025 and 2026 and others to be implemented through 2027. The enactment of the OBBBA did not have a significant impact on the Company's estimated annual effective income tax rate in fiscal 2026.

Previous wording

Biofuel production continues to be a major demand driver for irrigated corn, sugar cane and soybeans as these crops are used in high volumes to produce ethanol and biodiesel. The U.S. Environmental Protection Agency (“EPA”) establishes biofuel volume requirements for the Renewable Fuels Standard (RFS). In June 2025, the EPA proposed new volume requirements for 2026 and 2027 that represent increases of approximately 8 percent and 10 percent, respectively, over 2025 requirements. The new requirements, along with other proposed regulatory changes, are intended to strengthen the RFS program and support the growth of domestically produced renewable fuels.

Current wording

Biofuel production continues to be a major demand driver for irrigated corn, sugar cane and soybeans as these crops are used in high volumes to produce ethanol and biodiesel. The U.S. Environmental Protection Agency (“EPA”) establishes biofuel volume requirements for the Renewable Fuels Standard (RFS). In March 2026, the EPA finalized new volume requirements for 2026 and 2027 that represent increases of approximately 16 percent over 2025 requirements. The new requirements, along with other proposed regulatory changes, are intended to strengthen the RFS program and support the growth of domestically produced renewable fuels.

Previous wording

While the USDA's forecasted 2026 total net farm income is comparable to the expected 2025 results, forecasted cash receipts in 2026 are expected to be lower than 2025 and only partially offset by government payments. Favorable weather conditions in key U.S. markets during the growing season have resulted in higher crop production and increased inventories of crops in 2025 and have maintained downward pressure on commodity prices in the near term.

Current wording

While the USDA's forecasted 2026 total net farm income is comparable to the expected 2025 results, forecasted cash receipts in 2026 are expected to be lower than 2025 and only partially offset by government payments. Favorable weather conditions in key U.S. markets during the growing season have resulted in higher crop production and increased inventories of crops in 2025 and have maintained overall downward pressure on commodity prices in the near term.

Previous wording

The most significant opportunities for growth in irrigation sales over the next several years continue to be in international markets where irrigation use is less developed and demand is driven not only by commodity prices and net farm income, but also by food security, water scarcity and population growth. While international irrigation markets remain active with opportunities for further development and expansion, regional political and economic factors, including armed conflict, currency conditions and other factors can create a challenging environment. Additionally, international results are influenced by large project sales which tend to fluctuate and can be difficult to forecast accurately. While deliveries in the Middle East and North Africa (MENA) region have not yet been significantly delayed or impacted by the current Iran conflict in the Middle East, the Company continues to monitor the implications on its business and acknowledges that expected project timing in the region could change as the conflict evolves. Additionally, the broader economic impact of the conflict on the Company’s supply chain and customers is uncertain as freight and other input costs have increased in the short-term.

Current wording

The most significant opportunities for growth in irrigation sales over the next several years continue to be in international markets where irrigation use is less developed and demand is driven not only by commodity prices and net farm income, but also by food security, water scarcity and population growth. While international irrigation markets remain active with opportunities for further development and expansion, regional political and economic factors, including armed conflict, currency conditions and other factors can create a challenging environment. Additionally, international results are influenced by large project sales which tend to fluctuate and can be difficult to forecast accurately. While deliveries in the Middle East and North Africa (MENA) region have not yet been significantly delayed or impacted by the current Iran conflict in the Middle East, the Company continues to monitor the implications on its business and acknowledges that expected project timing in the region could change as the conflict evolves. Additionally, the broader economic impact of the conflict on the Company’s supply chain and customers is uncertain as freight and other input costs have increased.

Previous wording

The backlog of unshipped orders at February 28, 2026 was $151.8 million compared with $127.0 million at February 28, 2025. Included in these backlogs are amounts of $19.2 million and $11.9 million, respectively, for orders that are not expected to be fulfilled within the subsequent 12 months. The backlog in irrigation increased as a result of the large irrigation project in the MENA region, while the backlog in infrastructure decreased compared to the prior year. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing and execution of contracts. Backlog typically represents long-term projects as well as short lead-time orders, and therefore is generally not a good indication of the next fiscal quarter’s revenues.

Current wording

The backlog of unshipped orders at May 31, 2026 was $136.1 million compared with $117.1 million at May 31, 2025. Included in these backlogs are amounts of $20.1 million and $12.3 million, respectively, for orders that are not expected to be fulfilled within the subsequent 12 months. The backlog in irrigation increased as a result of the large irrigation project in the MENA region, while the backlog in infrastructure decreased compared to the prior year. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing and execution of contracts. Backlog typically represents long-term projects as well as short lead-time orders, and therefore is generally not a good indication of the next fiscal quarter’s revenues.

Previous wording

Includes $7.6 million and $8.5 million of corporate operating expenses for the three months ended February 28, 2026 and 2025, respectively.

Current wording

Includes $7.2 million and $8.8 million of corporate operating expenses for the three months ended May 31, 2026 and 2025, respectively.

Previous wording

Operating revenues for the three months ended February 28, 2026 decreased 16 percent to $157.7 million from $187.1 million for the three months ended February 28, 2025, as irrigation revenues decreased $6.9 million and infrastructure revenues decreased $22.4 million compared to the prior year period. The irrigation segment provided 90% percent of the Company’s revenue during the three months ended February 28, 2026 as compared to 79% percent for the three months ended February 28, 2025.

Current wording

Operating revenues for the three months ended May 31, 2026 decreased 5 percent to $160.8 million from $169.5 million for the three months ended May 31, 2025, as irrigation revenues decreased $10.7 million and infrastructure revenues increased $2.0 million compared to the prior year period. The irrigation segment provided 83 percent of the Company’s revenue during the three months ended May 31, 2026 as compared to 85 percent for the three months ended May 31, 2025.

Previous wording

North America irrigation revenues for the three months ended February 28, 2026 of $71.0 million decreased $6.1 million, or 8 percent, from $77.1 million for the three months ended February 28, 2025. The decrease resulted primarily from lower unit sales volume and was partially offset by slightly higher average selling prices compared to the prior year. Persistent weakness in commodity markets and tempered farmer sentiment continue to constrain demand for irrigation equipment in North America.

Current wording

North America irrigation revenues for the three months ended May 31, 2026 of $61.3 million decreased $7.7 million, or 11 percent, from $69.1 million for the three months ended May 31, 2025. The decrease resulted primarily from lower unit sales volume and was partially offset by slightly higher average selling prices compared to the prior year. Persistent weakness in commodity markets and tempered farmer sentiment continue to constrain demand for irrigation equipment in North America.

Previous wording

International irrigation revenues for the three months ended February 28, 2026 of $70.2 million decreased $0.8 million, or 1 percent, from $71.0 million for the three months ended February 28, 2025. The decrease resulted primarily from lower sales volumes in Brazil and lower project volumes in the MENA region. In Brazil, available credit and elevated interest rates continue to limit farmers' ability to invest in capital equipment. These decreases were partially offset by the favorable effects of foreign currency translation of approximately $4.0 million compared to the prior year period.

Current wording

International irrigation revenues for the three months ended May 31, 2026 of $71.7 million decreased $3.0 million, or 4 percent, from $74.7 million for the three months ended May 31, 2025. The decrease resulted primarily from lower sales volumes in Brazil, which were partially offset by growth in other regions. In Brazil, limited available credit and elevated interest rates continue to limit farmers' ability to invest in capital equipment. These decreases were partially offset by the favorable effects of foreign currency translation of approximately $3.9 million compared to the prior year.

Previous wording

Infrastructure segment revenues for the three months ended February 28, 2026 of $16.5 million decreased $22.4 million, or 58 percent, from $38.9 million for the three months ended February 28, 2025. The decrease was primarily driven by lower Road Zipper System revenues as the prior year included a $20 million project that did not repeat. This decrease was partially offset by higher sales of road safety products in the current period.

Current wording

Infrastructure segment revenues for the three months ended May 31, 2026 of $27.7 million increased $2.0 million, or 8 percent, from $25.7 million for the three months ended May 31, 2025. The increase was primarily driven by higher road safety product revenues, which were partially offset by lower Road Zipper System revenues as the prior period included a $20 million project that did not repeat in the current period.

Previous wording

Gross profit for the three months ended February 28, 2026 of $42.3 million decreased 32 percent from $62.5 million for the three months ended February 28, 2025. The decrease in gross profit resulted from lower revenues in both irrigation and infrastructure. Gross margin was 26.9 percent of sales for the three months ended February 28, 2026 compared with 33.4 percent of sales for the three months ended February 28, 2025. Lower irrigation gross margin resulted from a higher proportion of international irrigation project revenue in the current period that was dilutive to gross margin, while infrastructure gross margin also decreased due to the $20 million project that did not repeat.

Current wording

Gross profit for the three months ended May 31, 2026 of $47.8 million decreased 11 percent from $53.6 million for the three months ended May 31, 2025. The decrease in gross profit resulted primarily from lower revenues in the irrigation segment. Gross margin was 29.8 percent of sales for the three months ended May 31, 2026 compared with 31.6 percent of sales for the three months ended May 31, 2025. Lower irrigation gross margin resulted primarily from higher input costs and fixed cost deleverage on lower unit sales volumes, while infrastructure gross margin also decreased due to an unfavorable mix of Road Zipper System revenues compared to the prior year.

Previous wording

Operating expenses of $29.3 million for the three months ended February 28, 2026 decreased $1.1 million, or 3 percent, compared with $30.4 million for the three months ended February 28, 2025. The decrease in operating expenses was driven primarily by lower incentive compensation expense in the current period.

Current wording

Operating expenses of $29.3 million for the three months ended May 31, 2026 decreased $0.5 million, or 2 percent, compared with $29.8 million for the three months ended May 31, 2025. The decrease in operating expenses was driven primarily by lower incentive compensation expense in the current period.

Previous wording

The Company recorded other income of $2.6 million and $1.1 million for the three months ended February 28, 2026 and 2025, respectively. The increase was driven by higher net interest income and was partially offset by foreign currency transaction losses, compared to the prior period.

Current wording

The Company recorded other income of $2.1 million and $1.9 million for the three months ended May 31, 2026 and 2025, respectively. The increase was driven by higher net interest income with offsets by foreign currency transaction losses, compared to the prior period.

Previous wording

The Company recorded income tax expense of $3.5 million and $6.6 million for the three months ended February 28, 2026 and 2025, respectively. The effective income tax rate was 22.6 percent and 20.0 percent for the three months ended February 28, 2026 and 2025, respectively. The estimated annual effective tax rate in the current year is higher than the prior year primarily due to withholding taxes associated with cash repatriation. The impact of discrete items in both the current and prior year was not significant.

Current wording

The Company recorded income tax expense of $4.8 million and $6.2 million for the three months ended May 31, 2026 and 2025, respectively. The effective income tax rate was 23.1 percent and 24.2 percent for the three months ended May 31, 2026 and 2025, respectively. The estimated annual effective tax rate in both the current and prior year was 22.3 percent. The current year includes an unfavorable impact of withholding tax associated with cash repatriation but is fully offset by a favorable impact from jurisdictional earnings mix. The impact of discrete items in both the current and prior year quarter was not significant.

Previous wording

The following section presents an analysis of the Company’s operating results displayed in the condensed consolidated statements of earnings for the six months ended February 28, 2026 and 2025. It should be read together with the business segments information in Note 13 to the condensed consolidated financial statements:

Current wording

The following section presents an analysis of the Company’s operating results displayed in the condensed consolidated statements of earnings for the nine months ended May 31, 2026 and 2025. It should be read together with the business segments information in Note 13 to the condensed consolidated financial statements:

Previous wording

Includes $15.5 million and $16.5 million of corporate operating expenses for the six months ended February 28, 2026 and 2025, respectively.

Current wording

Includes $22.7 million and $25.3 million of corporate operating expenses for the nine months ended May 31, 2026 and 2025, respectively.

Previous wording

Operating revenues for the six months ended February 28, 2026 decreased 11 percent to $313.5 million from $353.3 million for the six months ended February 28, 2025, as irrigation revenues decreased $20.6 million and infrastructure revenues decreased $19.3 million. The irrigation segment provided 88% percent of the Company’s revenue during the six months ended February 28, 2026 as compared to 84% percent for the six months ended February 28, 2025.

Current wording

Operating revenues for the nine months ended May 31, 2026 decreased 9 percent to $474.3 million from $522.8 million for the nine months ended May 31, 2025, as irrigation revenues decreased $31.3 million and infrastructure revenues decreased $17.2 million. The irrigation segment provided 86 percent of the Company’s revenue during the nine months ended May 31, 2026 as compared to 84 percent for the nine months ended May 31, 2025.

Previous wording

North America irrigation revenues for the six months ended February 28, 2026 of $145.4 million decreased $9.5 million, or 6 percent, from $154.9 million for the six months ended February 28, 2025. The decrease resulted primarily from lower unit sales volume and was partially offset by slightly higher average selling prices compared to the prior year. Persistent weakness in commodity markets and tempered farmer sentiment continue to constrain demand for irrigation equipment in North America.

Current wording

North America irrigation revenues for the nine months ended May 31, 2026 of $206.7 million decreased $17.1 million, or 8 percent, from $223.8 million for the nine months ended May 31, 2025. The decrease resulted primarily from lower unit sales volume and was partially offset by slightly higher average selling prices compared to the prior year. Persistent weakness in commodity markets and tempered farmer sentiment continue to constrain demand for irrigation equipment in North America.

Previous wording

International irrigation revenues for the six months ended February 28, 2026 of $129.3 million decreased $11.0 million, or 8 percent, from $140.3 million for the six months ended February 28, 2025. The majority of the decrease resulted from revenues related to shipments for a large project in the MENA region, along with lower sales volumes in Brazil in the current year. The current year was also impacted by the favorable effects of foreign currency translation of approximately $5.5 million compared to the prior year.

Current wording

International irrigation revenues for the nine months ended May 31, 2026 of $201.0 million decreased $14.2 million, or 7 percent, from $215.2 million for the nine months ended May 31, 2025. The majority of the decrease resulted from lower revenues related to shipments for a large project in the MENA region, along with lower sales volumes in Brazil in the current year. The current year was also impacted by the favorable effects of foreign currency translation of approximately $9.5 million compared to the prior year.

Previous wording

Infrastructure segment revenues for the six months ended February 28, 2026 of $38.9 million decreased $19.3 million, or 33 percent, from $58.1 million for the six months ended February 28, 2025. The decrease was primarily driven by lower Road Zipper System revenues as the prior year included a $20 million project that did not repeat. This decrease was partially offset by higher sales of road safety products in the current year.

Current wording

Infrastructure segment revenues for the nine months ended May 31, 2026 of $66.6 million decreased $17.2 million, or 21 percent, from $83.8 million for the nine months ended May 31, 2025. The decrease was primarily driven by lower Road Zipper System revenues as the prior year included a $20 million project that did not repeat. This decrease was partially offset by higher sales of road safety products in the current year.

Previous wording

Gross profit for the six months ended February 28, 2026 of $92.5 million decreased 18 percent from $112.5 million for the six months ended February 28, 2025. The decrease in gross profit was driven by lower revenues in both irrigation and infrastructure. Gross margin was 29.5 percent of sales for the six months ended February 28, 2026 compared with 31.8 percent of sales for the six months ended February 28, 2025. Lower irrigation gross margin resulted from a higher proportion of international irrigation project revenue in the current year that was dilutive to gross margin. Infrastructure gross margin also decreased due to the $20 million project that did not repeat, resulting in an unfavorable impact on gross margin.

Current wording

Gross profit for the nine months ended May 31, 2026 of $140.3 million decreased 16 percent from $166.1 million for the nine months ended May 31, 2025. The decrease in gross profit was driven by lower revenues in both irrigation and infrastructure. Gross margin was 29.6 percent of sales for the nine months ended May 31, 2026 compared with 31.8 percent of sales for the nine months ended May 31, 2025. Lower irrigation gross margin resulted mainly from higher input costs and fixed cost deleverage on lower unit sales volumes. Infrastructure gross margin also decreased due to the $20 million project that did not repeat, resulting in an unfavorable impact on gross margin.

Previous wording

Operating expenses of $59.8 million for the six months ended February 28, 2026 increased $0.4 million compared with $59.4 million for the six months ended February 28, 2025. Increases in selling and R&D expenses were partially offset by lower administrative expenses.

Current wording

Operating expenses of $89.2 million for the nine months ended May 31, 2026 decreased slightly compared with $89.3 million for the nine months ended May 31, 2025. Increases in selling and engineering and research expenses were partially offset by lower administrative expenses.

Previous wording

The Company recorded other income of $4.8 million and $2.2 million for the six months ended February 28, 2026 and 2025, respectively. The increase in the current year period was driven by favorable changes related to interest income and interest expense and was partially offset by foreign currency losses of $1.5 million in the current year compared to foreign currency gains of $0.3 million in the prior year.

Current wording

The Company recorded other income of $6.9 million and $4.2 million for the nine months ended May 31, 2026 and 2025, respectively. The increase in the current year period was driven by favorable changes related to interest income and interest expense and was partially offset by foreign currency losses of $1.5 million in the current year compared to foreign currency gains of $0.2 million in the prior year.

Previous wording

The Company recorded income tax expense of $8.9 million and $11.5 million for the six months ended February 28, 2026 and 2025, respectively. The effective income tax rate was 23.7 percent and 20.8 percent for the six months ended February 28, 2026 and 2025, respectively. The estimated annual effective tax rate in the current year is higher than the prior year primarily due to withholding taxes associated with cash repatriation. The current year period effective tax rate includes an unfavorable discrete impact of $0.7 million, primarily related to share-based compensation vesting, while the impact of discrete items in the prior year was not significant.

Current wording

The Company recorded income tax expense of $13.6 million and $17.7 million for the nine months ended May 31, 2026 and 2025, respectively. The effective income tax rate was 23.5 percent and 21.9 percent for the nine months ended May 31, 2026 and 2025, respectively. The estimated annual effective tax rate in both the current and prior year was 22.3 percent. The current year includes an unfavorable impact of withholding tax associated with cash repatriation but is fully offset by a favorable impact from jurisdictional earnings mix. The current year period effective tax rate includes an unfavorable discrete impact of $0.7 million, primarily related to share-based compensation vesting, while the prior year included a favorable discrete impact of $0.3 million.

Previous wording

The Company's cash, cash equivalents, and marketable securities totaled $186.1 million at February 28, 2026 compared with $186.7 million at February 28, 2025 and $250.6 million at August 31, 2025. The Company requires cash for financing its receivables and inventories, paying operating expenses and capital expenditures, and for dividends and share repurchases. The Company meets its liquidity needs and finances its capital expenditures from its available cash and funds provided by operations along with borrowings under its credit arrangements described below. In the normal course of business, the Company enters into contracts and commitments which obligate the Company to make future payments. The Company does not have any additional off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. The Company believes its current cash resources, investments in marketable securities, projected operating cash flow, and remaining capacity under its continuing bank lines of credit are sufficient to cover all its expected working capital needs, planned capital expenditures and dividends. The Company may require additional borrowings to fund potential acquisitions in the future.

Current wording

The Company's cash, cash equivalents, and marketable securities totaled $154.8 million at May 31, 2026 compared with $210.8 million at May 31, 2025 and $250.6 million at August 31, 2025. The Company requires cash for financing its receivables and inventories, paying operating expenses and capital expenditures, and for dividends and share repurchases. The Company meets its liquidity needs and finances its capital expenditures from its available cash and funds provided by operations along with borrowings under its credit arrangements described below. In the normal course of business, the Company enters into contracts and commitments which obligate the Company to make future payments. The Company does not have any additional off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. The Company believes its current cash resources, investments in marketable securities, projected operating cash flow, and remaining capacity under its continuing bank lines of credit are sufficient to cover all its expected working capital needs, planned capital expenditures and dividends. The Company may require additional borrowings to fund potential acquisitions in the future.

Previous wording

The Company’s total cash and cash equivalents held by foreign subsidiaries were approximately $115.4 million, $93.8 million, and $97.4 million as of February 28, 2026, February 28, 2025, and August 31, 2025, respectively. The Company does not consider earnings in foreign subsidiaries to be permanently reinvested and accrues applicable taxes on its foreign subsidiaries' earnings. The Company does not expect the repatriation of these funds, and any applicable taxes, to have a significant impact on the Company’s overall liquidity.

Current wording

The Company’s total cash and cash equivalents held by foreign subsidiaries were approximately $107.4 million, $108.5 million, and $97.4 million as of May 31, 2026, May 31, 2025, and August 31, 2025, respectively. The Company does not consider earnings in foreign subsidiaries to be permanently reinvested and accrues applicable taxes on its foreign subsidiaries' earnings. The Company does not expect the repatriation of these funds, and any applicable taxes, to have a significant impact on the Company’s overall liquidity.

Previous wording

Net working capital was $333.9 million at February 28, 2026, as compared with $381.8 million at February 28, 2025 and $389.2 million at August 31, 2025. Cash provided by operating activities totaled $24.0 million during the six months ended February 28, 2026, compared to cash provided by operating activities of $33.9 million during the six months ended February 28, 2025. The current year period included lower net earnings and a more favorable impact of changes in working capital compared to the prior year period.

Current wording

Net working capital was $316.7 million at May 31, 2026, as compared with $397.0 million at May 31, 2025 and $389.2 million at August 31, 2025. Cash provided by operating activities totaled $30.6 million during the nine months ended May 31, 2026, compared to cash provided by operating activities of $68.9 million during the nine months ended May 31, 2025. The current year period included lower net earnings and a less favorable impact of changes in working capital compared to the prior year period.

Previous wording

Cash flows used in investing activities totaled $28.7 million during the six months ended February 28, 2026 compared to $39.2 million during the six months ended February 28, 2025. Purchases of property, plant, and equipment were $27.5 million, compared to $18.9 million in the prior year. The prior year also includes purchases of marketable securities, the purchase of an equity method investment, and net proceeds related to net investment hedges, each of which did not repeat in the current year.

Current wording

Cash flows used in investing activities totaled $38.4 million during the nine months ended May 31, 2026 compared to $48.4 million during the nine months ended May 31, 2025. Purchases of property, plant, and equipment were $35.5 million, compared to $28.3 million in the prior year. The prior year also includes purchases of marketable securities and the purchase of an equity method investment, both of which did not repeat in the current year.

Previous wording

Cash flows used in financing activities totaled $63.4 million during the six months ended February 28, 2026 compared to cash flows used in financing activities of $9.8 million during the six months ended February 28, 2025. During the current year, the Company repurchased $55.5 million of common shares compared to $1.4 million in the prior year.

Current wording

Cash flows used in financing activities totaled $92.4 million during the nine months ended May 31, 2026 compared to cash flows used in financing activities of $14.4 million during the nine months ended May 31, 2025. During the current year, the Company repurchased $80.7 million of common shares compared to $2.7 million in the prior year.

Previous wording

In the second quarter of fiscal 2026, the Company paid a quarterly cash dividend to stockholders of $0.37 per common share, or $3.8 million, compared to a quarterly cash dividend of $0.36 per common share, or $3.9 million, in the second quarter of fiscal 2025.

Current wording

In the third quarter of fiscal 2026, the Company paid a quarterly cash dividend to stockholders of $0.37 per common share, or $3.8 million, compared to a quarterly cash dividend of $0.36 per common share, or $3.9 million, in the third quarter of fiscal 2025.

Previous wording

The Company’s Board of Directors previously authorized a share repurchase program of up to $250.0 million of common stock with no expiration date. Under the program, shares could be repurchased in privately negotiated and/or open market transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. In November 2025, the Company's Board of Directors authorized a new share repurchase program of up to $150.0 million of the Company's outstanding common stock. During the three and six months ended February 28, 2026, the Company repurchased $25.2 million and $55.5 million of common shares, respectively, compared to $1.4 million for both the three and six months ended February 28, 2025. The share repurchases completed in the first quarter of fiscal 2026 depleted the previous $250.0 million share repurchase authorization. As of February 28, 2026, the amount available for repurchase under the current $150.0 million authorization amounted to $125.0 million.

Current wording

The Company’s Board of Directors previously authorized a share repurchase program of up to $250.0 million of common stock with no expiration date. Under the program, shares could be repurchased in privately negotiated and/or open market transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. In November 2025, the Company's Board of Directors authorized a new share repurchase program of up to $150.0 million of the Company's outstanding common stock. During the three and nine months ended May 31, 2026, the Company repurchased $25.2 million and $80.7 million of common shares, respectively, compared to $1.2 million and $2.7 million for the three and nine months ended May 31, 2025, respectively. The share repurchases completed in the first quarter of fiscal 2026 depleted the previous $250.0 million share repurchase authorization. As of May 31, 2026, the amount available for repurchase under the current $150.0 million authorization amounted to $100.0 million.

Previous wording

Revolving Credit Facility. The Company has outstanding a $50.0 million unsecured Amended and Restated Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association (“Wells Fargo”) expiring August 26, 2030. The Company intends to use borrowings under the Revolving Credit Facility for working capital purposes and to fund acquisitions. At February 28, 2026 and 2025, the Company had no outstanding borrowings under the Revolving Credit Facility. The amount of borrowings available at any time under the Revolving Credit Facility is reduced by the amount of standby letters of credit issued by Wells Fargo then outstanding. At February 28, 2026, the Company had the ability to borrow up to $50.0 million under the Revolving Credit Facility. The Revolving Credit Facility may be increased by up to an additional $50.0 million at any time, subject to additional commitment approval. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to the Secured Overnight Financing Rate ("SOFR") plus a margin of between 100 and 210 basis points depending on the Company’s leverage ratio then in effect (which resulted in a variable rate of 5.03 percent at February 28, 2026), subject to adjustment as set forth in the loan documents for the Revolving Credit Facility. Interest is paid on a monthly to quarterly basis depending on loan type. The Company currently pays an annual commitment fee on the unused portion of the Revolving Credit Facility. The fee is between 0.125 percent and 0.2 percent on the unused balance depending on the Company’s leverage ratio then in effect (which resulted in a fee of 0.125 percent at February 28, 2026).

Current wording

Revolving Credit Facility. The Company has outstanding a $50.0 million unsecured Amended and Restated Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association (“Wells Fargo”) expiring August 26, 2030. The Company intends to use borrowings under the Revolving Credit Facility for working capital purposes and to fund acquisitions. At May 31, 2026 and 2025, the Company had no outstanding borrowings under the Revolving Credit Facility. The amount of borrowings available at any time under the Revolving Credit Facility is reduced by the amount of standby letters of credit issued by Wells Fargo then outstanding. At May 31, 2026, the Company had the ability to borrow up to $50.0 million under the Revolving Credit Facility. The Revolving Credit Facility may be increased by up to an additional $50.0 million at any time, subject to additional commitment approval. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to the Secured Overnight Financing Rate ("SOFR") plus a margin of between 100 and 210 basis points depending on the Company’s leverage ratio then in effect (which resulted in a variable rate of 4.98 percent at May 31, 2026), subject to adjustment as set forth in the loan documents for the Revolving Credit Facility. Interest is paid on a monthly to quarterly basis depending on loan type. The Company currently pays an annual commitment fee on the unused portion of the Revolving Credit Facility. The fee is between 0.125 percent and 0.2 percent on the unused balance depending on the Company’s leverage ratio then in effect (which resulted in a fee of 0.125 percent at May 31, 2026).