CECO ENVIRONMENTAL CORP

Previous wording

The Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 reflect the consolidated operations of the Company and its subsidiaries.

Current wording

The Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 reflect the consolidated operations of the Company and its subsidiaries.

Previous wording

On February 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Longhorn Merger Sub, Inc. and Longhorn Merger Sub LLC, each a direct wholly owned subsidiary of the Company (together, the “Merger Subs”), and Thermon Group Holdings, Inc. (“Thermon”), pursuant to which the parties agreed to effect the merger transactions contemplated thereby. On June 1, 2026, the Company consummated the previously announced merger with Thermon in accordance with the terms of the Merger Agreement. The cash portion of the merger consideration and related transaction costs were funded with available cash and borrowings under our existing credit facilities. For additional details, see Note 14 to the unaudited condensed consolidated financial statements within Item 1 of this Quarterly Report on Form 10-Q. The acquisition of Thermon significantly impacts the comparability of the Company’s results of operations, financial condition, and cash flows for the three and six months ended June 30, 2026 compared to the corresponding prior-year periods.

Current wording

On February 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Longhorn Merger Sub, Inc. and Longhorn Merger Sub LLC, each a direct wholly owned subsidiary of the Company (together, the “Merger Subs”), and Thermon Group Holdings, Inc. (“Thermon”), pursuant to which the parties agreed to effect the merger transactions contemplated thereby. On June 1, 2026, the Company consummated the previously announced merger with Thermon in accordance with the terms of the Merger Agreement. The cash portion of the merger consideration and related transaction costs were funded with available cash and borrowings under the Company's existing credit facilities. For additional details, see Note 14 to the unaudited condensed consolidated financial statements within Item 1 of this Quarterly Report on Form 10-Q. The acquisition of Thermon significantly impacts the comparability of the Company’s results of operations, financial condition, and cash flows for the three and nine months ended September 30, 2026 compared to the corresponding prior-year periods.

Previous wording

Our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 are as follows:

Current wording

Our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 are as follows:

Previous wording

To compare operating performance between the three and six months ended June 30, 2026 and 2025, the Company has adjusted GAAP operating (loss) income to exclude (1) amortization of intangible assets, (2) acquisition and integration expenses, which include legal, accounting, and other expenses, (3) gain on the sale of the Global Pump Solutions business as discussed in Note 15, and (4) other expenses, including restructuring expenses primarily relating to severance, facility exits, and associated legal expenses, asbestos litigation expenses relating to future settlement payments, executive transition expenses, purchase accounting inventory adjustments, and third party professional consulting fees associated with Enterprise Resource Planning system implementations.

Current wording

To compare operating performance between the three and nine months ended September 30, 2026 and 2025, the Company has adjusted GAAP operating (loss) income to exclude (1) amortization of intangible assets, (2) acquisition and integration expenses, which include legal, accounting, and other expenses, (3) gain on the sale of the Global Pump Solutions business as discussed in Note 15, and (4) other expenses, including restructuring expenses primarily relating to severance, facility exits, and associated legal expenses, asbestos litigation expenses relating to future settlement payments, executive transition expenses, purchase accounting inventory adjustments, and third party professional consulting fees associated with Enterprise Resource Planning system implementations.

Previous wording

(1) includes $9.5 million related to the inventory fair value adjustment for the three and six months ended June 30, 2026.

Current wording

(1) includes $16.7 million and $26.2 million related to the inventory fair value adjustment for the three and nine months ended September 30, 2026.

Previous wording

Net sales for the three months ended June 30, 2026 increased $99.6 million, or 53.7%, to $285.0 million compared with $185.4 million for the three months ended June 30, 2025, inclusive of organic growth of 44%. Approximately 82.1% of net sales for the three months ended June 30, 2026 is attributable to organic revenue, which the Company defines as revenue from businesses owned for more than twelve months. The increase in organic revenue is driven by strong order intake in preceding quarters, which contributes to the backlog position. During the quarter, the Company continues to execute customer projects and satisfy contractual commitments without experiencing material delays. The largest contributor to organic revenue growth is demand for products and solutions serving power generation end markets. The remainder of the increase in net sales is attributable to the recent acquisition and integration of Thermon.

Current wording

Net sales for the three months ended September 30, 2026 increased $206.8 million, or 104.7%, to $404.4 million compared with $197.6 million for the three months ended September 30, 2025, inclusive of organic growth of 41%. Approximately 63% of net sales for the three months ended September 30, 2026 is attributable to organic revenue, which the Company defines as revenue from businesses owned for more than twelve months. The increase in organic revenue is driven by strong order intake in preceding quarters, which contributes to the backlog position. During the quarter, the Company continued to execute customer projects and satisfy contractual commitments without experiencing material delays. The largest contributor to organic revenue growth is demand for products and solutions serving power generation end markets. The remainder of the increase in net sales is attributable to the recent acquisition and integration of Thermon.

Previous wording

Net sales for the six months ended June 30, 2026 increased $128.8 million, or 35.6%, to $490.9 million compared with $362.1 million for the six months ended June 30, 2025, inclusive of organic growth of 42%. The increase in organic revenue is driven by significant order intake in the preceding quarters which led to a record backlog position. The Company executed customer projects in accordance with contractual commitments without experiencing material delays. The largest driver of organic revenue is demand for products and solutions supporting power generation end markets. The remainder of the increase in net sales is attributable to the Company’s recent integration of Thermon.

Current wording

Net sales for the nine months ended September 30, 2026 increased $335.6 million, or 60.0%, to $895.3 million compared with $559.7 million for the nine months ended September 30, 2025, inclusive of organic growth of 42%. The increase in organic revenue is driven by significant order intake in the preceding quarters which led to a record backlog position. The Company executed customer projects in accordance with contractual commitments without experiencing material delays. The largest driver of organic revenue is demand for products and solutions supporting power generation end markets. The remainder of the increase in net sales is attributable to the Company’s recent integration of Thermon.

Previous wording

Gross profit increased $21.1 million, or 16.3%, to $150.4 million in the six months ended June 30, 2026 compared with $129.3 million in the six months ended June 30, 2025. The increase in gross profit is primarily attributable to the increase in sales volume as described above. Gross profit as a percentage of sales decreased to 30.6% in the six months ended June 30, 2026 and 35.7% in the six months ended June 30, 2025. The decrease is attributable to project mix and the timing of project completions within the power generation and industrial solutions end markets. Adjusted gross profit margin was 32.6% for the six months ended June 30, 2026 and excludes acquisition-related costs associated with the Thermon acquisition.

Current wording

Gross profit increased $65.5 million, or 101.4%, to $130.1 million in the three months ended September 30, 2026 compared with $64.6 million in the three months ended September 30, 2025. The increase in gross profit is primarily attributable to the increase in sales volume as described above. Gross profit as a percentage of sales decreased to 32.2% in the three months ended September 30, 2026 compared with 32.7% in the three months ended September 30, 2025. Gross profit for the three months ended September 30, 2026 was reduced by $16.7 million of additional cost of sales related to the fair value adjustment to inventory acquired in the Thermon acquisition. Adjusted gross profit margin was 36.3% for the three months ended September 30, 2026. Gross profit margins excluding Thermon increased to 34.5% driven by margin expansion for products in power generation.

Previous wording

Gross profit increased $19.4 million, or 28.9%, to $86.5 million in the three months ended June 30, 2026 compared with $67.1 million in the three months ended June 30, 2025. The increase in gross profit is primarily attributable to the increase in sales volume as described above. Gross profit as a percentage of sales decreased to 30.3% in the three months ended June 30, 2026 compared with 36.2% in the three months ended June 30, 2025. The decrease is primarily attributable to project mix and the timing of project completions within the power generation and industrial solutions end markets. Adjusted gross profit margin was 33.7% for the three months ended June 30, 2026 and excludes acquisition-related costs associated with the Thermon acquisition.

Current wording

Gross profit increased $86.6 million, or 44.7%, to $280.5 million in the nine months ended September 30, 2026 compared with $193.9 million in the nine months ended September 30, 2025. The increase in gross profit is primarily attributable to the increase in sales volume as described above. Gross profit as a percentage of sales decreased to 31.3% in the nine months ended September 30, 2026 compared with 34.6% in the nine months ended September 30, 2025. The decrease is primarily attributable to $26.2 million of additional cost of sales related to the fair value adjustment to inventory acquired in the Thermon acquisition. Project mix and the timing of project completions within the power generation and industrial solutions end markets also contributed to the decrease. Adjusted gross profit margin was 34.3% for the nine months ended September 30, 2026 and excludes acquisition-related costs associated with the Thermon acquisition.

Previous wording

Selling and administrative expenses were $63.9 million for the three months ended June 30, 2026 compared with $48.8 million for the three months ended June 30, 2025. The increase is primarily attributable to selling and administrative expenses associated with the Thermon acquisition.

Current wording

Selling and administrative expenses were $91.2 million for the three months ended September 30, 2026 compared with $47.0 million for the three months ended September 30, 2025. The increase is primarily attributable to selling and administrative expenses associated with the Thermon acquisition.

Previous wording

Selling and administrative expenses were $110.0 million for the six months ended June 30, 2026 compared with $102.4 million for the six months ended June 30, 2025. The increase is primarily attributable to selling and administrative expenses associated with the Thermon acquisition, partially offset by lower selling and administrative expenses within the Industrial Process Solutions segment, primarily reflecting the absence of the Global Pump Solutions business following its divestiture on March 31, 2025.

Current wording

Selling and administrative expenses were $201.2 million for the nine months ended September 30, 2026 compared with $149.4 million for the nine months ended September 30, 2025. The increase is primarily attributable to selling and administrative expenses associated with the Thermon acquisition, partially offset by lower selling and administrative expenses within the Industrial Process Solutions segment, primarily reflecting the absence of the Global Pump Solutions business following its divestiture on March 31, 2025.

Previous wording

Amortization expense was $7.8 million for the three months ended June 30, 2026 compared with $2.9 million for the three months ended June 30, 2025. The increase in expense is attributable to increased intangible assets from current and prior year acquisitions.

Current wording

Amortization expense was $15.3 million for the three months ended September 30, 2026 compared with $6.1 million for the three months ended September 30, 2025. The increase in expense is predominantly related to amortization of intangible assets related to the Thermon acquisition.

Previous wording

Amortization expense was $11.8 million for the six months ended June 30, 2026 compared with $6.0 million for the six months ended June 30, 2025. The increase in expense is attributable to increased intangible assets from current and prior year acquisitions.

Current wording

Amortization expense was $27.1 million for the nine months ended September 30, 2026 compared with $12.2 million for the nine months ended September 30, 2025. The increase in expense is predominantly related to amortization of intangible assets related to the Thermon acquisition.

Previous wording

Operating income decreased $51.3 million to $(33.2) million for the three months ended June 30, 2026 compared with operating income of $18.1 million for the three months ended June 30, 2025. The decrease in operating income is primarily attributable to acquisition and integration expenses associated with Thermon.

Current wording

Operating income increased $1.1 million to $10.5 million for the three months ended September 30, 2026 compared with operating income of $9.4 million for the three months ended September 30, 2025. The increase in operating income is primarily attributable to the increased volume described above partially offset by higher amortization expense and acquisition and integration expenses associated with Thermon.

Previous wording

Operating income decreased $111.2 million to $(31.3) million for the six months ended June 30, 2026 compared with operating income of $79.9 million for the six months ended June 30, 2025. The decrease in operating income is primarily attributable to the gain on the sale of the Global Pump Solutions business recognized in the first quarter of 2025 and acquisition and integration expenses associated with Thermon.

Current wording

Operating income decreased $110.1 million to $(20.8) million for the nine months ended September 30, 2026 compared with operating income of $89.3 million for the nine months ended September 30, 2025. The decrease in operating income is primarily attributable to the gain on the sale of the Global Pump Solutions business recognized in the first quarter of 2025 and acquisition and integration expenses associated with Thermon partially offset by increased volume.

Previous wording

Non-GAAP operating income was $32.1 million for the three months ended June 30, 2026 compared with $18.3 million for the three months ended June 30, 2025. Non-GAAP operating income as a percentage of sales increased to 11.3% for the three months ended June 30, 2026 from 9.9% for the three months ended June 30, 2025. The increase in non-GAAP operating income is driven by the increase in gross profit, partially offset by the increase in selling and administrative expenses as described above

Current wording

Non-GAAP operating income was $55.7 million for the three months ended September 30, 2026 compared with $17.5 million for the three months ended September 30, 2025. Non-GAAP operating income as a percentage of sales increased to 13.8% for the three months ended September 30, 2026 from 8.9% for the three months ended September 30, 2025. The increase in non-GAAP operating income is driven by the increase in gross profit, partially offset by the increase in selling and administrative expenses as described above

Previous wording

Non-GAAP operating income was $49.9 million for the six months ended June 30, 2026 compared with $26.9 million for the six months ended June 30, 2025. Non-GAAP operating income as a percentage of sales was flat at 10.2% for the both the six months ended June 30, 2026 and 2025. The increase in non-GAAP operating income is driven by the increase in gross profit, partially offset by the increase in selling and administrative expenses as described above.

Current wording

Non-GAAP operating income was $105.6 million for the nine months ended September 30, 2026 compared with $44.5 million for the nine months ended September 30, 2025. Non-GAAP operating income as a percentage of sales was increased to 11.8% for the nine months ended September 30, 2026 from 8.0% for the nine months ended September 30, 2025. The increase in non-GAAP operating income is driven by the increase in gross profit, partially offset by the increase in selling and administrative expenses as described above.

Previous wording

Interest expense increased to $9.1 million in the three months ended June 30, 2026 compared with interest expense of $4.9 million for the three months ended June 30, 2025. The increase in interest expense is primarily due to increased debt balances.

Current wording

Interest expense increased to $11.1 million in the three months ended September 30, 2026 compared with interest expense of $5.1 million for the three months ended September 30, 2025. The increase in interest expense is primarily due to increased debt balances.

Previous wording

Interest expense increased to $13.3 million in the six months ended June 30, 2026 compared with interest expense of $11.1 million for the six months ended June 30, 2025. The increase in interest expense is primarily due to increased debt balances.

Current wording

Interest expense increased to $24.4 million in the nine months ended September 30, 2026 compared with interest expense of $16.2 million for the nine months ended September 30, 2025. The increase in interest expense is primarily due to increased debt balances.

Previous wording

Income tax benefit was $10.1 million for the three months ended June 30, 2026 compared with income tax expense of $4.5 million for the three months ended June 30, 2025. Income tax expense was $13.6 million for the six months ended June 30, 2026 compared with income tax expense of $23.1 million for the six months ended June 30, 2025. The effective income tax rate for the three months ended June 30, 2026 was 22.6% compared with 30.9% for the three months ended June 30, 2025. The effective income tax rate for the six months ended June 30, 2026 was 28.1% compared with 33.2% for the six months ended June 30, 2025. The effective income tax rates for the three and six months ended June 30, 2026 and June 30, 2025 differ from the United States federal statutory rate. Our effective tax rate is affected by other permanent differences, including the gain on the sale of the Global Pump Solutions business, state income taxes, non-deductible incentive stock-based compensation, and differences in tax rates among the jurisdictions in which we operate.

Current wording

Income tax benefit was $1.0 million for the three months ended September 30, 2026 compared with income tax expense of $0.5 million for the three months ended September 30, 2025. Income tax benefit was $14.6 million for the nine months ended September 30, 2026 compared with income tax expense of $23.6 million for the nine months ended September 30, 2025. The effective income tax rate for the three months ended September 30, 2026 was 34.9% compared with 21.1% for the three months ended September 30, 2025. The effective income tax rate for the nine months ended September 30, 2026 was 28.5% compared with 32.8% for the nine months ended September 30, 2025. The effective income tax rates for the three and nine months ended September 30, 2026 and September 30, 2025 differ from the United States federal statutory rate. The Company's effective tax rate is affected by other permanent differences, including the gain on the sale of the Global Pump Solutions business, state income taxes, non-deductible transaction expenses, non-deductible incentive stock-based compensation, and differences in tax rates among the foreign jurisdictions in which it operates.

Previous wording

Orders booked increased $524.4 million, or 192%, to $798.5 million during the three months ended June 30, 2026 compared with $274.1 million in the three months ended June 30, 2025, inclusive of organic growth of 185%, as defined as the change in orders excluding the impact of orders recorded in the twelve month period subsequent to acquisition dates. The increase is primarily driven by demand for the Company’s emissions and exhaust systems applications supporting large-scale natural gas power generation projects.

Current wording

Orders booked increased $544.7 million, or 234%, to $777.6 million during the three months ended September 30, 2026 compared with $232.9 million in the three months ended September 30, 2025, inclusive of organic growth of 174%, as defined as the change in orders excluding the impact of orders recorded in the twelve month period subsequent to acquisition dates. The increase is primarily driven by demand for the Company’s emissions and exhaust systems applications supporting large-scale natural gas power generation projects.

Previous wording

Orders booked increased $745.9 million, or 149%, to $1,248.0 million during the six months ended June 30, 2026 compared with $502.1 million in the six months ended June 30, 2025, inclusive of organic growth of 155%. The increase is primarily driven by demand for the Company’s emissions and exhaust system applications supporting large-scale natural gas power generation projects.

Current wording

Orders booked increased $1,290.6 million, or 176%, to $2,025.6 million during the nine months ended September 30, 2026 compared with $735.0 million in the nine months ended September 30, 2025, inclusive of organic growth of 161%. The increase is primarily driven by demand for the Company’s emissions and exhaust system applications supporting large-scale natural gas power generation projects.

Previous wording

Our Engineered Systems segment net sales increased $45.2 million to $173.7 million for the three months ended June 30, 2026 compared with $128.5 million for the three months ended June 30, 2025, inclusive of organic growth of 54.3%. The increase is led by backlog execution on large scale natural gas power generation projects.

Current wording

Our Engineered Systems segment net sales increased $50.6 million to $194.3 million for the three months ended September 30, 2026 compared with $143.7 million for the three months ended September 30, 2025, inclusive of organic growth of 34%. The increase is led by backlog execution on large scale natural gas power generation projects.

Previous wording

Our Engineered Systems segment net sales increased $75.3 million to $324.2 million for the six months ended June 30, 2026 compared with $248.9 million for the six months ended June 30, 2025, inclusive of organic growth of 48%. The increase is led by backlog execution on large scale natural gas power generation projects.

Current wording

Our Engineered Systems segment net sales increased $125.9 million to $518.5 million for the nine months ended September 30, 2026 compared with $392.6 million for the nine months ended September 30, 2025, inclusive of organic growth of 31%. The increase is led by backlog execution on large scale natural gas power generation projects.

Previous wording

Segment profit for the Engineered Systems segment increased $9.4 million to $36.0 million for the three months ended June 30, 2026 compared with $26.6 million for the three months ended June 30, 2025. The increase is attributable to higher gross profit related to increased net sales.

Current wording

Segment profit for the Engineered Systems segment increased $20.2 million to $50.0 million for the three months ended September 30, 2026 compared with $29.8 million for the three months ended September 30, 2025. The increase is attributable to higher gross profit related to increased net sales. Segment profit as a percentage of sales increased to 25.8% in the three months ended September 30, 2026 compared with 20.8% in the three months ended September 30, 2025. The increase is primarily attributed to market demand for natural gas generation infrastructure products.

Previous wording

Our Engineered Systems segment orders booked increased $447.9 million, or 200%, to $672.1 million during the three months ended June 30, 2026 compared with $224.2 million in the three months ended June 30, 2025, inclusive of organic growth of 173.8%. The increase is primarily attributable to the Company's energy and power technologies. Investments in energy infrastructure and growth in midstream and downstream markets have resulted in increased demand for emissions, and acoustics products.

Current wording

Our Engineered Systems segment orders booked increased $358.7 million, or 204%, to $534.2 million during the three months ended September 30, 2026 compared with $175.5 million in the three months ended September 30, 2025, inclusive of organic growth of 159%. The increase is primarily attributable to the Company's energy and power technologies. Investments in energy infrastructure and growth in midstream and downstream markets have resulted in increased demand for emissions, acoustics. and separation/filtration products.

Previous wording

Our Engineered Systems segment orders booked increased $668.1 million, or 173%, to $1,055.1 million during the six months ended June 30, 2026 compared with $387.0 million in the six months ended June 30, 2025, inclusive of organic growth of 198.1%. The increase is primarily attributable to the Company's energy and power technologies. Investments in energy infrastructure and growth in midstream and downstream markets have resulted in increased demand for emissions and acoustics products.

Current wording

Our Engineered Systems segment orders booked increased $1,026.8 million, or 183%, to $1,589.3 million during the nine months ended September 30, 2026 compared with $562.5 million in the nine months ended September 30, 2025, inclusive of organic growth of 146%. The increase is primarily attributable to the Company's energy and power technologies. Investments in energy infrastructure and growth in midstream and downstream markets have resulted in increased demand for emissions, acoustics, and separation/filtration products.

Previous wording

Our Industrial Process Solutions segment net sales increased $4.8 million to $61.7 million for the three months ended June 30, 2026 compared with $56.9 million for the three months ended June 30, 2025, inclusive of organic growth of 84%. The increase is primarily attributable to project execution on semiconductor and industrial ducting backlog.

Current wording

Our Industrial Process Solutions segment net sales increased $7.8 million to $61.7 million for the three months ended September 30, 2026 compared with $53.9 million for the three months ended September 30, 2025, inclusive of organic growth of 8%. The increase is primarily attributable to project execution on semiconductor backlog.

Previous wording

Our Industrial Process Solutions segment net sales increased $3.9 million to $117.1 million for the six months ended June 30, 2026 compared with $113.2 million for the six months ended June 30, 2025, inclusive of organic growth of 67%. The increase is primarily attributable to project execution on semiconductor and industrial ducting backlog.

Current wording

Our Industrial Process Solutions segment net sales increased $11.7 million to $178.8 million for the nine months ended September 30, 2026 compared with $167.1 million for the nine months ended September 30, 2025, inclusive of organic growth of 11%. The increase is primarily attributable to project execution on semiconductor backlog partially offset by the divestiture of the Global Pumps Solutions business.

Previous wording

Our Industrial Process Solutions segment orders booked increased $40.4 million, or 81%, to $90.3 million during the three months ended June 30, 2026 compared with $49.9 million in the three months ended June 30, 2025, inclusive of organic growth of 157%. The increase is primarily attributable to higher demand for the Company's scrubber technologies in semiconductor and international markets.

Current wording

Our Industrial Process Solutions segment orders booked increased $26.0 million, or 45%, to $83.4 million during the three months ended September 30, 2026 compared with $57.4 million in the three months ended September 30, 2025, inclusive of organic growth of 72%. The increase is primarily attributable to higher demand for the Company's scrubber technologies in semiconductor and international markets.

Previous wording

Our Industrial Process Solutions segment orders booked increased $41.9 million, or 36%, to $156.8 million during the six months ended June 30, 2026 compared with $114.9 million in the six months ended June 30, 2025, inclusive of organic growth of 103.6%. The increase is primarily attributable to the higher demand for the Company's scrubber technologies in semiconductor and international markets.

Current wording

Our Industrial Process Solutions segment orders booked increased $67.9 million, or 39%, to $240.2 million during the nine months ended September 30, 2026 compared with $172.3 million in the nine months ended September 30, 2025, inclusive of organic growth of 86%. The increase is primarily attributable to the higher demand for the Company's scrubber technologies in semiconductor and international markets.

Previous wording

$793.1 million as of December 31, 2025. Thermon contributed $262.0 million to our backlog figure as of June 30, 2026, with the remaining increase primarily attributable to our growing orders. Our customers may have the right to cancel a given order. Historically, cancellations have not been significant. Backlog is adjusted on a quarterly basis for adjustments in foreign currency exchange rates. Substantially all backlog is expected to be delivered within 12 to 24 months, with a majority within 12 months. Backlog is not defined by GAAP and our methodology for calculating backlog may not be consistent with methodologies used by other companies.

Current wording

Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. Backlog increased to $2,193.5 million as of September 30, 2026, from $793.1 million as of December 31, 2025. Thermon contributed $273.3 million to our backlog figure as of September 30, 2026, with the remaining increase primarily attributable to our growing orders. Our customers may have the right to cancel a given order. Historically, cancellations have not been significant. Backlog is adjusted on a quarterly basis for adjustments in foreign currency exchange rates. Substantially all backlog is expected to be delivered within 12 to 24 months. Backlog is not defined by GAAP and our methodology for calculating backlog may not be consistent with methodologies used by other companies.

Previous wording

At June 30, 2026, the Company had working capital of $327.3 million, compared with $104.4 million at December 31, 2025. The ratio of current assets to current liabilities was 1.50 to 1.00 on June 30, 2026, as compared with a ratio of 1.34 to 1.00 on December 31, 2025.

Current wording

At September 30, 2026, the Company had working capital of $217.7 million, compared with $104.4 million at December 31, 2025. The ratio of current assets to current liabilities was 1.29 to 1.00 on September 30, 2026, as compared with a ratio of 1.34 to 1.00 on December 31, 2025.

Previous wording

At June 30, 2026 and December 31, 2025, cash and cash equivalents totaled $61.1 million and $33.1 million, respectively. As of June 30, 2026 and December 31, 2025, $49.1 million and $26.4 million, respectively, of our cash and cash equivalents were held by certain foreign subsidiaries, as well as being denominated in foreign currencies.

Current wording

At September 30, 2026 and December 31, 2025, cash and cash equivalents totaled $72.1 million and $33.1 million, respectively. As of September 30, 2026 and December 31, 2025, $55.4 million and $26.4 million, respectively, of our cash and cash equivalents were held by certain foreign subsidiaries, as well as being denominated in foreign currencies.

Previous wording

For the six months ended June 30, 2026, $32.4 million of cash was used in operating activities compared with $19.4 million used in operations in the prior year period, representing an decrease of $13.1 million. Cash flows from operating activities in the first six months of 2026 was lower in 2026 primarily due to larger investments in operating assets and liabilities commensurate with growth in the business.

Current wording

For the nine months ended September 30, 2026, $121.4 million of cash was provided by operating activities compared with $4.1 million used in operations in the prior year period, representing an increase of $125.5 million. Cash flows from operating activities in the first nine months of 2026 was higher than 2025 primarily due to an increase in billings in excess of costs and estimated earnings on uncompleted contracts, partially offset by an increase in accounts receivable.

Previous wording

For the six months ended June 30, 2026, net cash used in investing activities was $444.4 million compared with $3.8 million provided by investing activities in the prior year period. For the six months ended June 30, 2026, the Company used $329.6 million in the acquisition of Thermon, as well as $6.6 million in the acquisition of Flexible Specialty Products. As part of the Thermon acquisition, the Company repaid approximately $141.7 million of the acquiree's outstanding indebtedness at closing. This cash outlay was partially offset by cash and cash equivalents received from Thermon of $41.5 million. The repayment of debt was treated as a component of the consideration transferred. In the prior year period, the Company received $105.9 million related to the sale of the Global Pump Solutions business as discussed in Note 15, offset by $97.6 million used in the acquisition of Profire as discussed in Note 14.

Current wording

For the nine months ended September 30, 2026, net cash used in investing activities was $450.8 million compared with $1.5 million provided by investing activities in the prior year period. For the nine months ended September 30, 2026, the Company used $329.6 million in the acquisition of Thermon, as well as $6.6 million in the acquisition of Flexible Specialty Products. As part of the Thermon acquisition, the Company repaid approximately $141.7 million of the acquiree's outstanding indebtedness at closing. This cash outlay was partially offset by cash and cash equivalents received from Thermon of $41.5 million. The repayment of debt was treated as a component of the consideration transferred. In the prior year period, the Company received $107.8 million related to the sale of the Global Pump Solutions business as discussed in Note 15, offset by $97.6 million used in the acquisition of Profire as discussed in Note 14.

Previous wording

For the six months ended June 30, 2026, $509.0 million was provided by financing activities compared with $14.2 million provided by financing activities in the prior year period, for an increase of $494.9 million. The increase was driven by increased borrowings on the Company's Credit Facility, inclusive of the Incremental Term A-1 Loan Facility, to fund the cash consideration and other closing costs paid in connection with the acquisition of Thermon.

Current wording

For the nine months ended September 30, 2026, $372.6 million was provided by financing activities compared with $2.8 million used in financing activities in the prior year period, for an increase of $375.5 million. The increase was driven by increased borrowings on the Company's Credit Facility, inclusive of the Incremental Term A-1 Loan Facility, to fund the cash consideration and other closing costs paid in connection with the acquisition of Thermon.

Previous wording

Management believes there have been no changes during the six months ended June 30, 2026 to the items that the Company disclosed as its critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Management believes there have been no changes during the nine months ended September 30, 2026 to the items that the Company disclosed as its critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.