CSW INDUSTRIALS, INC.

Previous wording

The following discussion and analysis of our operations financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Quarterly Report, as well as our consolidated financial statements and related notes for the fiscal year ended March 31, 2025 included in our Annual Report. This discussion and analysis contains forward-looking statements based on current expectations relating to future events and our future performance that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” below. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those risk factors set forth in our Annual Report and in this Quarterly Report.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Quarterly Report, as well as our consolidated financial statements and related notes for the fiscal year ended March 31, 2025 included in our Annual Report. This discussion and analysis contains forward-looking statements based on current expectations relating to future events and our future performance that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” below. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those risk factors set forth in our Annual Report and in this Quarterly Report.

Previous wording

Many of our products are used to protect the capital assets of our customers that are expensive to repair or replace and are critical to their operations. We have a source of recurring revenue from the maintenance, repair and overhaul and consumable nature of many of our products. We also provide some custom engineered products that strengthen and enhance our customer relationships. The reputation of our product portfolio is built on more than 100 well-respected brand names, such as AC Guard®, Air Sentry®, Aspen Manufacturing TM, Balco®, Cover Guard®, Deacon®, Dust Free®, Falcon Stainless®, Greco®, Jet-Lube®, Kopr-Kote®, Leak Freeze®, Metacaulk®, No. 5®, OilSafe®, PF WaterWorks TM, PSP Products TM, RectorSeal®, Safe-T-Switch®, Shoemaker Manufacturing®, Smoke Guard®, TRUaire® and Whitmore®.

Current wording

Many of our products are used to protect the capital assets of our customers that are expensive to repair or replace and are critical to their operations. We have a source of recurring revenue from the maintenance, repair and overhaul and consumable nature of many of our products. We also provide some custom engineered products that strengthen and enhance our customer relationships. The reputation of our product portfolio is built on more than 100 well-respected brand names, such as AC Guard®, Air Sentry®, Aspen Manufacturing TM, Balco®, Cover Guard®, Deacon®, Dust Free®, Falcon Stainless®, Greco®, Hydrotex®, Jet-Lube®, Kopr-Kote®, Leak Freeze®, MARS®, Metacaulk®, No. 5®, OilSafe®, PF WaterWorks TM, ProAction Fluids®, PSP Products TM, RectorSeal®, Safe-T-Switch®, Shoemaker Manufacturing®, Smoke Guard®, TRUaire® and Whitmore®.

Previous wording

We expect to maintain a strong balance sheet in fiscal year 2026, which provides us with access to capital through our cash on hand, internally-generated cash flow, and availability under our Revolving Credit Facility. Our capital allocation strategy continues to guide our investing decisions, with a priority to direct capital to the highest risk adjusted return opportunities, within the categories of organic growth, strategic acquisitions and the return of cash to shareholders through our share repurchase and dividend programs. With the strength of our financial position, we will continue to invest in financially and strategically attractive expanded product offerings, key elements of our long-term strategy of targeting long-term profitable growth. We will continue to invest our capital in maintaining our facilities and in continuous improvement initiatives. We recognize the importance of, and remain committed to, continuing to drive organic growth, as well as investing additional capital in opportunities with attractive risk-adjusted returns, driving increased penetration in the end markets we serve. We remain disciplined in our approach to acquisitions, particularly as it relates to our assessment of valuation, prospective synergies, diligence, cultural fit and ease of integration, especially in light of economic conditions.

Current wording

We expect to maintain a strong balance sheet in fiscal year 2026, which provides us with access to capital through our cash on hand, internally-generated cash flow, and availability under our Revolving Credit Facility and Senior Secured Term Loan A ("TLA"). Our capital allocation strategy continues to guide our investing decisions, with a priority to direct capital to the highest risk adjusted return opportunities, within the categories of organic growth, strategic acquisitions and the return of cash to shareholders through our share repurchase and dividend programs. With the strength of our financial position, we will continue to invest in financially and strategically attractive expanded product offerings, key elements of our long-term strategy of targeting long-term profitable growth. We will continue to invest our capital in maintaining our facilities and in continuous improvement initiatives. We recognize the importance of, and remain committed to, continuing to drive organic growth, as well as investing additional capital in opportunities with attractive risk-adjusted returns, driving increased penetration in the end markets we serve. We remain disciplined in our approach to acquisitions, particularly as it relates to our assessment of valuation, prospective synergies, diligence, cultural fit and ease of integration, especially in light of economic conditions.

Previous wording

All acquisitions are described in Note 2 to our consolidated financial statements included in this Quarterly Report. Aspen Manufacturing, LLC ("Aspen Manufacturing") activity has been included in our results within our Contractor Solutions segment since the May 1, 2025 acquisition date. PF WaterWorks, L.P. ("PF WaterWorks") activity has been included in our results within our Contractor Solutions segment since the November 4, 2024 acquisition date. PSP Products, Inc. (“PSP Products”) activity has been included in our results within our Contractor Solutions segment since the August 1, 2024 acquisition date.

Current wording

All acquisitions are described in Note 2 to our consolidated financial statements included in this Quarterly Report. ProAction Fluids, LLC ("ProAction Fluids") activity has been included in our results within our Specialized Reliability Solutions segment since the November 20, 2025 acquisition date. Hydrotex Holdings Inc. ("Hydrotex") activity has been included in our results within our Specialized Reliability Solutions segment since the November 5, 2025 acquisition date. Dusk Acquisition Corporation and its wholly owned subsidiaries, Motors & Armatures Parts, LLC and HVAC South, LLC (collectively, “MARS Parts”) activity has been included in our results within our Contractor Solutions segment since the November 4, 2025 acquisition date. Aspen Manufacturing, LLC ("Aspen Manufacturing") activity has been included in our results within our Contractor Solutions segment since the May 1, 2025 acquisition date. PF WaterWorks, L.P. ("PF WaterWorks") activity has been included in our results within our Contractor Solutions segment since the November 4, 2024 acquisition date. PSP Products, Inc. (“PSP Products”) activity has been included in our results within our Contractor Solutions segment since the August 1, 2024 acquisition date.

Previous wording

Gross profit for the three months ended September 30, 2025 increased $15.3 million, or 14.7%, as compared with the three months ended September 30, 2024. The increase was primarily a result of increased revenue and favorable ocean freight costs, partially offset by increases in tariffs and material costs directly and indirectly driven by tariffs. Gross profit margin of 43.0% for the three months ended September 30, 2025 decreased as compared to 45.6% for the three months ended September 30, 2024. The decrease was driven by the inclusion of recent acquisitions and increases in tariffs and material costs, partially offset by pricing actions and favorable ocean freight costs.

Current wording

Gross profit for the three months ended December 31, 2025 increased $12.3 million, or 15.4%, as compared with the three months ended December 31, 2024. The increase was primarily a result of increased revenue and favorable freight costs, partially offset by increases in tariffs and material costs directly and indirectly driven by tariffs. Gross profit margin of 39.7% for the three months ended December 31, 2025 decreased as compared to 41.4% for the three months ended December 31, 2024. The decrease was driven by the inclusion of recent acquisitions and increases in tariffs and material costs, partially offset by pricing actions and favorable freight costs.

Previous wording

Gross profit for the six months ended September 30, 2025 increased $23.3 million, or 11.0%, as compared with the six months ended September 30, 2024. The increase was primarily a result of the increase in revenue and favorable ocean freight costs, partially offset by increases in tariffs and material costs directly and indirectly driven by tariffs. Gross profit margin of 43.4% for the six months ended September 30, 2025 decreased as compared to 46.5% for the three months ended September 30, 2024. The decrease was driven by the inclusion of recent acquisitions, increases in aforementioned tariffs and material costs and unfavorable revenue mix, partially offset by pricing actions and favorable ocean freight costs.

Current wording

Gross profit for the nine months ended December 31, 2025 increased $35.6 million, or 12.2%, as compared with the nine months ended December 31, 2024. The increase was primarily a result of the increase in revenue and favorable freight costs, partially offset by increases in tariffs and material costs directly and indirectly driven by tariffs. Gross profit margin of 42.3% for the nine months ended December 31, 2025 decreased as compared to 45.0% for the three months ended December 31, 2024. The decrease was driven by the inclusion of recent acquisitions and increases in aforementioned tariffs and material costs, partially offset by pricing actions and favorable freight costs.

Previous wording

Operating expenses for the six months ended September 30, 2025 increased $18.3 million, or 17.4%, as compared with the six months ended September 30, 2024. The increase was primarily due to added expenses related to the inclusion of Aspen Manufacturing, PSP Products, and PF WaterWorks in the current period, including amortization of intangible assets, as well as the transaction expenses related to completed and contemplated acquisitions. The decrease in operating expenses as a percentage of revenues was attributable to revenue increasing by a greater percentage than the increase in operating expenses.

Current wording

Operating expenses for the three months ended December 31, 2025 increased $24.6 million, or 48.7%, as compared with the three months ended December 31, 2024. The increase was primarily due to added expenses related to the inclusion of MARS Parts, Aspen Manufacturing, Hydrotex and PF WaterWorks in the current period, including amortization of intangible assets and the acquisition-related transaction and integration expenses, as well as a nonrecurring inventory write down. The increase in operating expenses as a percentage of revenues was attributable to the operating expenses increasing by a greater percentage than the revenue increase.

Previous wording

Operating expenses for the three months ended September 30, 2025 increased $10.1 million, or 19.2%, as compared with the three months ended September 30, 2024. The increase was primarily due to added expenses related to the inclusion of Aspen Manufacturing, PSP Products, and PF WaterWorks in the current period, including amortization of intangible assets, as well as the transaction expenses related to completed and contemplated acquisitions. The decrease in operating expenses as a percentage of revenues was attributable to revenue increasing by a greater percentage than the increase in operating expenses.

Current wording

Operating expenses for the nine months ended December 31, 2025 increased $42.9 million, or 27.6%, as compared with the nine months ended December 31, 2024. The increase was primarily due to added expenses related to the inclusion of MARS Parts, Aspen Manufacturing, PSP Products, Hydrotex and PF WaterWorks in the current period, including amortization of intangible assets, as well as the acquisition-related transaction and integration expenses. The increase in operating expenses as a percentage of revenues was attributable to the operating expenses increasing by a greater percentage than the revenue increase.

Previous wording

Operating income for the three months ended September 30, 2025 increased $5.2 million, or 10.1%, as compared with the three months ended September 30, 2024, as a result of the increase in gross profit, partially offset by the increase in operating expenses, as discussed above.

Current wording

Operating income for the three months ended December 31, 2025 decreased $12.3 million, or 41.4%, as compared with the three months ended December 31, 2024, as a result of the increase in operating expenses, as discussed above, partially offset by the increase in gross profit.

Previous wording

Operating income for the six months ended September 30, 2025 increased $5.0 million, or 4.7%, as compared with the six months ended September 30, 2024, as a result of the increase in gross profit, partially offset by the increase in operating expenses, as discussed above.

Current wording

Operating income for the nine months ended December 31, 2025 decreased $7.2 million, or 5.3%, as compared with the nine months ended December 31, 2024, as a result of the increase in operating expenses, as discussed above, partially offset by the increase in gross profit.

Previous wording

Net interest expense of $1.3 million for the three months ended September 30, 2025 was comparable to the three months ended September 30, 2024. Net interest expense of $2.3 million for the six months ended September 30, 2025 decreased $1.5 million as compared to the net interest expense of $3.9 million for the six months ended September 30, 2024. The decrease in the six months ended September 30, 2025 was due to the lower average borrowing under our Revolving Credit Facility.

Current wording

Net interest expense of $8.1 million for the three months ended December 31, 2025 increased $10.1 million as compared to net interest income of $2.0 million for the three months ended December 31, 2024. Net interest expense of $10.5 million for the nine months ended December 31, 2025 increased $8.6 million as compared to the net interest expense of $1.9 million for the nine months ended December 31, 2024. The increase in the three and nine months ended December 31, 2025 was due to the increased average borrowing under our Revolving Credit Facility and TLA to fund the acquisitions (discussed in Note 2) and share repurchasing activities (discussed in Note 11).

Previous wording

Other income, net of $0.0 million for the three months ended September 30, 2025 changed $0.7 million, as compared to the net income of $0.7 million for the three months ended September 30, 2024. Other income, net of $0.5 million for the six months ended September 30, 2025 changed $1.0 million, as compared to the net expense of $0.4 million for the six months ended September 30, 2024. The change in the three and six months ended September 30, 2025 was due to the foreign currency gains/losses related to transactions in currencies other than functional currencies.

Current wording

Other expense, net of $1.3 million for the three months ended December 31, 2025 increased $1.0 million, as compared to the net expense of $0.3 million for the three months ended December 31, 2024. Other expense, net of $0.8 million for the nine months ended December 31, 2025 increased $0.1 million, as compared to the net expense of $0.7 million for the nine months ended December 31, 2024. The change in the three and nine months ended December 31, 2025 was due to the foreign currency gains/losses related to transactions in currencies other than functional currencies.

Previous wording

For the three months ended September 30, 2024, we earned $49.5 million from operations before taxes and provided for income taxes of $12.9 million, resulting in an effective tax rate of 26.1%. For the six months ended September 30, 2024, we earned $102.3 million from operations before taxes and provided for income taxes of $26.9 million, resulting in an effective tax rate of 26.2%. The provision for income taxes differed from the statutory rate for the three and six months ended September 30, 2024 primarily due to state income tax (net of federal benefit), provision for GILTI, executive compensation limitations, and increases to penalties and interest on uncertain tax positions (“UTP”); offset by foreign tax credits and excess tax deductions related to equity compensation and FDII.

Current wording

For the three months ended December 31, 2025, we earned $7.9 million from operations before taxes and recognized net income tax benefits of $2.7 million, resulting in an effective tax rate of (34.2)%. For the nine months ended December 31, 2025, we earned $117.7 million from operations before taxes and provided for income taxes of $25.2 million, resulting in an effective tax rate of 21.4%. The provision for income taxes differed from the statutory rate for the three and nine months ended December 31, 2025 primarily due to state income tax (net of federal benefit), executive compensation limitations, provision for global intangible low-taxed income ("GILTI"), and non-deductible transaction costs; offset by release of uncertain tax position ("UTP") due to lapse of statute, excess tax deductions related to equity compensation, and foreign tax credits.

Previous wording

For the three months ended September 30, 2025, we earned $55.5 million from operations before taxes and provided for income taxes of $14.7 million, resulting in an effective tax rate of 26.4%. For the six months ended September 30, 2025, we earned $109.9 million from operations before taxes and provided for income taxes of $27.9 million, resulting in an effective tax rate of 25.4%. The provision for income taxes differed from the statutory rate for the three and six months ended September 30, 2025 primarily due to state income tax (net of federal benefit), executive compensation limitations, and provision for global intangible low-taxed income (“GILTI”); offset by adjustment to tax payable, foreign tax credits, excess tax deductions related to equity compensation and foreign-derived intangible income (“FDII”).

Current wording

For the three months ended December 31, 2024, we earned $31.3 million from operations before taxes and provided for income taxes of $4.3 million, resulting in an effective tax rate of 13.8%. For the nine months ended December 31, 2024, we earned $133.6 million from operations before taxes and provided for income taxes of $31.2 million, resulting in an effective tax rate of 23.3%. The provision for income taxes differed from the statutory rate for the three and nine months ended December 31, 2024 primarily due to state income tax (net of federal benefit), executive compensation limitations, and provision for GILTI; offset by release of UTPs due to lapse of statute, excess tax deductions related to equity compensation, foreign currency rate impact on the cumulative unrepatriated foreign earnings, foreign tax credits and foreign-derived intangible income (“FDII”).

Previous wording

The Company expects $6.7 million of reserves for UTPs to either be settled or expire within the next 12 months as the statutes of limitations expire.

Current wording

The Company expects $6.4 million of reserves for UTPs to either be settled or expire within the next 12 months as the statutes of limitations expire.

Previous wording

On July 4, 2025, the "One Big Beautiful Bill Act" (the "Act") was enacted into law. The Act includes changes to the U.S. tax law that are applicable to the Company, including the reinstatement of 100% bonus depreciation and 100% expensing of research and development costs, a change in the calculation of deductible interest expense, and changes to the U.S. tax treatment of GILTI and FDII. We evaluated the Act during the three months ended September 30, 2025 and estimated the Act to have an immaterial impact on our income tax expenses. We expect the Act will change the timing of our cash tax payments in the current fiscal year and future periods. We will continue to evaluate the impact of the Act as additional guidance becomes available. We have not recognized any impact of the Act as of September 30, 2025.

Current wording

On July 4, 2025, the "One Big Beautiful Bill Act" (the "Act") was enacted into law. The Act includes changes to the U.S. tax laws that are applicable to the Company, including the reinstatement of 100% bonus depreciation and 100% expensing of research and development costs, a change in the calculation of deductible interest expense, and changes to the U.S. tax treatment of GILTI and FDII. We evaluated the Act, including estimating the impact of certain provisions of the Act that may impact the estimated annual effective tax rate for the current year, and estimated it to have an immaterial impact on our income tax expenses. We expect the Act will change the timing of our cash tax payments in the current fiscal year and future periods. We will continue to evaluate the impact of the Act as additional guidance becomes available.

Previous wording

Operating income for the three months ended September 30, 2025 increased $7.1 million, or 15.4%, as compared with the three months ended September 30, 2024. The increase was primarily due to the increased revenue and favorable ocean freight costs, partially offset by increased tariffs. Operating income margin of 25.6% for the three months ended September 30, 2025 decreased as compared to 29.1% for the three months ended September 30, 2024. This decrease was due to the inclusion of recent acquisitions and the increase in tariffs, partially offset by pricing actions and lower ocean freight costs.

Current wording

Operating income for the three months ended December 31, 2025 decreased $10.0 million, or 37.2%, as compared with the three months ended December 31, 2024. The decrease was primarily due to the increased tariffs, incremental spend related to the completion and integration of acquisitions and a nonrecurring inventory write down, which offset the increased revenue and favorable freight costs. Operating income margin of 10.0% for the three months ended December 31, 2025 decreased as compared to 20.2% for the three months ended December 31, 2024. This decrease was due to the inclusion of recent acquisitions, including the related acquisition completion and integration costs, the increase in tariffs and a nonrecurring inventory write down, partially offset by pricing actions and lower freight costs.

Previous wording

Operating income for the six months ended September 30, 2025 increased $10.0 million, or 10.4%, as compared with the six months ended September 30, 2024. The increase was primarily due to the increased revenue and favorable ocean freight costs, partially offset by increased tariffs. Operating income margin of 26.2% for the six months ended September 30, 2025 decreased as compared to 30.1% for the six months ended September 30, 2024. This decrease was due to the inclusion of recent acquisitions, increased tariffs and unfavorable revenue mix, partially offset by pricing actions and lower ocean freight costs.

Current wording

Operating income for the nine months ended December 31, 2025 was comparable to the nine months ended December 31, 2024. Operating income margin of 21.4% for the nine months ended December 31, 2025 decreased as compared to 27.2% for the nine months ended December 31, 2024. This decrease was due to the inclusion of recent acquisitions, including the related acquisition completion and integration costs and increased tariffs, partially offset by pricing actions and lower freight costs.

Previous wording

Net revenues for the three months ended September 30, 2025 was comparable to the three months ended September 30, 2024, with a slight increase of $0.3 million or 0.7%. Net revenue increased in the general industrial and mining end markets and decreased in the energy and rail transportation end markets.

Current wording

Net revenues for the three months ended December 31, 2025 increased $3.7 million, or 10.8%, as compared to the three months ended December 31, 2024. The increase was primarily due to the acquisitions of Hydrotex and ProAction Fluids ($2.3 million or 6.8%). Organic revenue increased $1.4 million, or 4.0% due to higher unit volume and pricing actions. Net revenue increased in the general industrial and mining end markets and decreased in the energy and rail transportation end markets.

Previous wording

Operating income for the three months ended September 30, 2025 decreased $0.7 million or 12.5% as compared to the three months ended September 30, 2024. The decrease was primarily due to the escalation in material costs, indirectly driven by tariffs, as well as increased freight costs to support incremental growth of international shipments. Operating income margin of 13.1% for the three months ended September 30, 2025 decreased as compared to 15.1% for the three months ended September 30, 2024 due to the aforementioned increase in expenses.

Current wording

Operating income for the three months ended December 31, 2025 decreased $0.7 million or 13.7% as compared to the three months ended December 31, 2024. The decrease was primarily due to the escalation in material costs, indirectly driven by tariffs, as well as higher freight costs. Operating income margin of 11.8% for the three months ended December 31, 2025 decreased as compared to 15.2% for the three months ended December 31, 2024 due to the aforementioned increase in expenses.

Previous wording

Operating income for the six months ended September 30, 2025 decreased $2.6 million or 20.3% as compared to the six months ended September 30, 2024. The decrease was primarily due to the escalation in material costs driven by tariffs and commodity pricing and the one-time expenses associated with consolidating a manufacturing plant. Operating income margin of 13.7% for the six months ended September 30, 2025 decreased as compared to 17.2% for the six months ended September 30, 2024 due to the aforementioned increase in cost of materials and manufacturing plant consolidation expenses.

Current wording

Operating income for the nine months ended December 31, 2025 decreased $3.4 million or 18.4% as compared to the nine months ended December 31, 2024. The decrease was primarily due to the escalation in material costs driven by tariffs and commodity pricing and higher freight costs. Operating income margin of 13.0% for the nine months ended December 31, 2025 decreased as compared to 16.6% for the nine months ended December 31, 2024 due to the aforementioned increase in cost of materials and freight costs.

Previous wording

Net revenues for the three months ended September 30, 2025 decreased $0.8 million or 2.3% as compared to the three months ended September 30, 2024 due to a slight decrease in volume driven by softness in the market and strategic pricing in response to competitive pressures.

Current wording

Net revenues for the three months ended December 31, 2025 decreased $0.4 million or 1.3% as compared to the three months ended December 31, 2024 due to strategic pricing in response to competitive pressures.

Previous wording

Operating income for the three months ended September 30, 2025 decreased $1.3 million, or 20.6%, as compared with the three months ended September 30, 2024. The decrease was driven by lower revenue, increased material costs and the aforementioned pricing strategies. Operating income margin of 15.1% for the three months ended September 30, 2025 decreased as compared to 18.6% for the three months ended September 30, 2024 due to the aforementioned material costs increases and pricing strategies.

Current wording

Operating income for the three months ended December 31, 2025 decreased $0.3 million, or 7.8%, as compared with the three months ended December 31, 2024. The decrease was driven by increased material costs and the aforementioned pricing strategies. Operating income margin of 11.8% for the three months ended December 31, 2025 decreased as compared to 12.6% for the three months ended December 31, 2024 due to the aforementioned material costs increases and pricing strategies.

Previous wording

Operating income for the six months ended September 30, 2025 decreased $3.0 million, or 25.2%, as compared with the six months ended September 30, 2024. The decrease was driven primarily by increased material costs, higher warranty expenses and pricing strategies. Operating income margin of 13.8% for the six months ended September 30, 2025 decreased as compared to 18.6% for the six months ended September 30, 2024 due to the aforementioned lower revenue, material costs and warranty expenses increases, and pricing strategies.

Current wording

Operating income for the nine months ended December 31, 2025 decreased $3.3 million, or 21.1%, as compared with the nine months ended December 31, 2024. The decrease was driven primarily by increased material costs, higher warranty expenses and pricing strategies. Operating income margin of 13.2% for the nine months ended December 31, 2025 decreased as compared to 16.7% for the nine months ended December 31, 2024 due to the aforementioned material costs and warranty expenses increases, and pricing strategies.

Previous wording

Existing cash on hand, cash generated by operations and borrowings available under our Revolving Credit Facility (“Revolver Borrowings”) are our primary sources of short-term liquidity. Our ability to consistently generate strong cash flow from our operations is one of our most significant financial strengths: it enables us to invest in our people and our brands, make capital investments and strategic acquisitions, provide a cash dividend program, and from time-to-time, repurchase shares of our common stock. Additionally, we use our Revolver Borrowings to support our working capital requirements, capital expenditures and strategic acquisitions. We seek to maintain adequate liquidity to meet working capital requirements, fund capital expenditures, make scheduled interest payments on debt and meet our contingent consideration obligations. Absent a material deterioration of market conditions, we believe that cash flows from operating activities and financing activities (which would primarily consist of Revolver Borrowings), will provide adequate resources to satisfy our working capital, scheduled interest payments on debt, anticipated dividend payments, periodic share repurchases, contingent consideration obligations and anticipated capital expenditure requirements for both our short-term and long-term needs.

Current wording

Existing cash on hand, cash generated by operations and borrowings available under our Revolving Credit Facility (“Revolver Borrowings”) and TLA are our primary sources of short-term liquidity. Our ability to consistently generate strong cash flow from our operations is one of our most significant financial strengths: it enables us to invest in our people and our brands, make capital investments and strategic acquisitions, provide a cash dividend program, and from time-to-time, repurchase shares of our common stock. Additionally, we use our Revolver Borrowings to support our working capital requirements, capital expenditures and strategic acquisitions. We seek to maintain adequate liquidity to meet working capital requirements, fund capital expenditures, make scheduled interest payments on debt and meet our contingent consideration obligations. Absent a material deterioration of market conditions, we believe that cash flows from operating activities and financing activities (which would primarily consist of Revolver Borrowings), will provide adequate resources to satisfy our working capital, scheduled interest and principal payments on debt, anticipated dividend payments, periodic share repurchases, contingent consideration obligations and anticipated capital expenditure requirements for both our short-term and long-term needs.

Previous wording

Our cash balance (including cash and cash equivalents) at September 30, 2025 was $31.5 million, as compared with $225.8 million at March 31, 2025.

Current wording

Our cash balance (including cash and cash equivalents) at December 31, 2025 was $40.2 million, as compared with $225.8 million at March 31, 2025.

Previous wording

For the six months ended September 30, 2025, our cash provided by operating activities from operations was $122.5 million, as compared with $130.2 million for six months ended September 30, 2024.

Current wording

For the nine months ended December 31, 2025, our cash provided by operating activities from operations was $151.3 million, as compared with $141.1 million for nine months ended December 31, 2024.

Previous wording

•Working capital provided cash for the six months ended September 30, 2025 due to lower accounts receivable ($11.7 million) and higher accounts payable and other current liabilities ($7.3 million), partially offset by higher inventories ($10.1 million) and higher prepaid expenses and other current assets ($5.7 million).

Current wording

•Working capital provided cash for the nine months ended December 31, 2025 due to lower accounts receivable ($44.5 million) and higher accounts payable and other current liabilities ($8.3 million), partially offset by higher inventories ($37.8 million) and higher prepaid expenses and other current assets ($14.0 million).

Previous wording

•Working capital provided cash for the six months ended September 30, 2024 due to higher accounts payable and other current liabilities ($40.3 million) and lower accounts receivable ($11.3 million), partially offset by higher inventories ($25.3 million) and higher prepaid and other current assets ($2.1 million).

Current wording

•Working capital used cash for the nine months ended December 31, 2024 due to higher inventories ($42.5 million), higher prepaid and other current assets ($17.2 million), partially offset by lower accounts receivable ($32.3 million) and higher accounts payable and other current liabilities ($21.4 million).

Previous wording

Cash flows used in investing activities from operations during the six months ended September 30, 2025 were $331.4 million, as compared with $41.3 million used in investing activities for the six months ended September 30, 2024.

Current wording

Cash flows used in investing activities from operations during the nine months ended December 31, 2025 were $1,012.1 million, as compared with $97.5 million used in investing activities for the nine months ended December 31, 2024.

Previous wording

•Capital expenditures during the six months ended September 30, 2025 and 2024 were $6.0 million and $8.6 million, respectively. Our capital expenditures have been focused on capacity expansion (including $0.6 million and $0.4 million during the current and prior year periods for the Whitmore JV), enterprise resource planning systems, new product introductions, continuous improvement and automation of manufacturing facilities.

Current wording

•Capital expenditures during the nine months ended December 31, 2025 and 2024 were $12.1 million and $11.7 million, respectively. Our capital expenditures have been focused on capacity expansion (including $1.8 million and $0.4 million during the current and prior year periods for the Whitmore JV), new product introductions, continuous improvement and automation of manufacturing facilities and enterprise resource planning systems.

Previous wording

•During the six months ended September 30, 2025, we acquired Aspen Manufacturing for an aggregate purchase price, net of cash received, of $325.3 million, including $313.5 million in cash consideration and working capital adjustment of $11.8 million, as discussed in Note 2 to our consolidated financial statements in this Quarterly Report.

Current wording

•During the nine months ended December 31, 2025, we acquired Aspen Manufacturing for an aggregate purchase price of $327.6 million, including $313.5 million in cash consideration and working capital adjustment of $14.1 million, as discussed in Note 2 to our consolidated financial statements included in this Quarterly Report.

Previous wording

•During the six months ended September 30, 2024, we acquired PSP for an aggregate purchase price of $51.3 million, including $32.5 million in cash consideration at closing, as discussed in Note 2 to our consolidated financial statements in this Quarterly Report.

Current wording

•During the nine months ended December 31, 2024, we acquired certain assets of PSP Products for an aggregated purchase price of $51.3 million, including $32.5 million in cash consideration at closing, subsequent working capital true-up adjustment of $7.0 million and a contingent consideration of $11.8 million.

Previous wording

•During the six months ended September 30, 2024, $0.5 million was paid to acquire a long-term investment.

Current wording

•During the nine months ended December 31, 2024, $2.5 million was paid to acquire a long-term investment.

Previous wording

Cash flows provided by financing activities during the six months ended September 30, 2025 and 2024 were $15.1 million and $161.9 million, respectively.

Current wording

Cash flows provided by financing activities during the nine months ended December 31, 2025 and 2024 were $675.5 million and $148.9 million, respectively.

Previous wording

•Net borrowings (repayments) on our Revolving Credit Facility (as discussed in Note 7 to our consolidated financial statements included in this Quarterly Report) of $60.0 million and $(166.0) million during the six months ended September 30, 2025 and 2024, respectively.

Current wording

•Net borrowings (repayments) on our Revolving Credit Facility and TLA (as discussed in Note 7 to our consolidated financial statements included in this Quarterly Report) of $800.1 million and $(166.0) million during the nine months ended December 31, 2025 and 2024, respectively.

Previous wording

•As discussed in Note 11 to our consolidated financial statements included in this Quarterly Report, repurchases of shares under our share repurchase program of $23.0 million and $8.9 million during the six months ended September 30, 2025 and 2024, respectively.

Current wording

•As discussed in Note 11 to our consolidated financial statements included in this Quarterly Report, repurchases of shares under our share repurchase program of $92.6 million and $13.7 million during the nine months ended December 31, 2025 and 2024, respectively.

Previous wording

•In connection with the vesting of equity awards under our Long Term Incentive Plan, $4.4 million and $3.3 million were tendered by employees to satisfy minimum tax withholding requirements during the six months ended September 30, 2025 and 2024, respectively.

Current wording

•In connection with the vesting of equity awards under our Long Term Incentive Plan, $6.2 million and $7.2 million were tendered by employees to satisfy minimum tax withholding requirements during the nine months ended December 31, 2025 and 2024, respectively.

Previous wording

•Payments of $2.8 million of underwriting discounts and fees in connection with our Third Credit Agreement during the six months ended September 30, 2025, as discussed in Note 7 to our consolidated financial statements included in this Quarterly Report.

Current wording

•Payments of $5.3 million of underwriting discounts and fees in connection with our Third Credit Agreement and Fourth Credit Agreement during the nine months ended December 31, 2025, as discussed in Note 7 to our consolidated financial statements included in this Quarterly Report.

Previous wording

•During the six months ended September 30, 2024, we received proceeds of $347.4 million in connection with our September 2024 follow-on equity offering, net of underwriting fees and discounts and expenses incurred directly related to the offering, as discussed in Note 11 to our consolidated financial statements in this Quarterly Report.

Current wording

•During the nine months ended December 31, 2024, we received proceeds of $347.4 million in connection with our September 2024 follow-on equity offering, net of underwriting fees and discounts and expenses incurred directly related to the offering, as discussed in Note 11 to our consolidated financial statements included in this Quarterly Report.