EnerSys

Previous wording

The Company's four operating segments, based on lines of business, are as follows:

Current wording

The Company's three operating segments, based on lines of business, are as follows:

Previous wording

Inflation in North America, China and EMEA, while more controlled compared to the sharp increases in 2023, remains a challenge despite some cooling in the U.S. and Europe through 2024 and 2025. After reducing rates three consecutive times in 2025, the Fed held the policy rate steady at 3.50%–3.75% on January 2026, citing improving economic activity and stabilizing unemployment. After several rate cuts the European Central Bank (ECB) has held their main interest rates stable since June 2025. While these are incrementally positive actions toward deflation, both economies continue to face uncertainties such as potential tariffs and policy changes from a new presidential administration in the U.S. and potential global trade frictions, macroeconomic fragmentation and geopolitical tensions the euro area. Policy actions in China signal a shift towards more proactive fiscal measures to stabilize consumption and support economic growth. While increasing travel and consumer spending due to relaxed COVID policies have provided some bright spots in 2024 and 2025, China's economy continues to face challenges from a weakened real estate market and declining exports.

Current wording

Inflation in North America, China and EMEA, while more controlled compared to the sharp increases in 2023, remains a challenge despite some cooling in the U.S. and Europe through 2024 and 2025. After reducing rates three consecutive times in 2025, the Fed has held the policy rate steady at 3.50%–3.75% since January 2026, citing improving economic activity and stabilizing unemployment. After several rate cuts the European Central Bank (ECB) held its main interest rates stable from June 2025 through June 2026 when it increased rates due to concerns that the war in the Middle East is generating inflation pressure. Both economies continue to face uncertainties such as potential tariffs and policy changes from a new presidential administration in the U.S. and potential global trade frictions, macroeconomic fragmentation and geopolitical tensions in the euro area. Policy actions in China signal a shift towards more proactive fiscal measures to stabilize consumption and support economic growth. While increasing travel and consumer spending due to relaxed COVID policies have provided some bright spots in 2024 and 2025, China's economy continues to face challenges from a prolonged weak real estate market and declining exports.

Previous wording

The market demand in the forklift truck and Class 8 truck markets have been impacted by tariff policy uncertainty, causing some customers to pause larger projects and general spending activity until there is more clarity on global tariff impacts to their supply chains. The data center and communications markets tend to be less sensitive to tariff policy, with budget and spending plans based on their unique capital spending needs. The data center market is in the midst of a growth cycle driven by AI and increasing digitization. The communications market is currently in a modest, but slow spending recovery as investments in maintenance and network build outs are necessary to support the increased data required to be moved through their infrastructure. Global defense budgets are increasing in response to rising geopolitical tensions. Spending in EMEA has increased at a higher rate than in the US, as large program spending has outpaced sustainment spending with the U.S. Department of War.

Current wording

The market demand in the forklift truck and Class 8 truck markets has been impacted by tariff policy uncertainty, causing some customers to pause larger projects and general spending activity until there is more clarity on global tariff impacts to their supply chains. The data center and communications markets tend to be less sensitive to tariff policy, with budget and spending plans based on their unique capital spending needs. The data center market is in the midst of a growth cycle driven by AI and increasing digitization. The communications market is currently in a modest, but slow spending recovery as investments in maintenance and network build outs are necessary to support the increased data required to be moved through their infrastructure. Global defense budgets are increasing in response to rising geopolitical tensions. Spending in EMEA has increased at a higher rate than in the US, as large program spending has outpaced sustainment spending with the U.S. Department of War.

Previous wording

As part of managing the performance of our business, we monitor the level of primary operating capital, and its ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts payable. The resulting net amount is divided by the trailing three-month net sales (annualized) to derive a primary operating capital percentage. We believe these three elements included in primary operating capital are most operationally driven, and this performance measure provides us with information about the asset intensity and operating efficiency of the business on a company-wide basis that management can monitor and analyze trends over time. Primary operating capital was $933.6 million (yielding a primary operating capital percentage of 25.4%) at December 28, 2025, $932.2 million (yielding a primary operating capital percentage of 23.9%) at March 31, 2025 and $947.4 million at December 29, 2024 (yielding a primary operating capital percentage of 26.1%). The primary operating capital percentage of 25.4% at December 28, 2025 increased by 150 basis points compared to

Current wording

As part of managing the performance of our business, we monitor the level of primary operating capital, and its ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts payable. The resulting net amount is divided by the trailing three-month net sales (annualized) to derive a primary operating capital percentage. We believe these three elements included in primary operating capital are mostly operationally driven, and this performance measure provides us with information about the asset intensity and operating efficiency of the business on a company-wide basis that management can monitor and analyze trends over time. Primary operating capital was $858.3 million (yielding a primary operating capital percentage of 22.9%) at July 5, 2026, $876.6 million (yielding a primary operating capital percentage of 22.2%) at March 31, 2026 and $993.0 million at June 29, 2025 (yielding a primary operating capital percentage of 27.8%). The primary operating capital percentage of 22.9% at July 5, 2026 increased by 70 basis points compared to March 31, 2026 and decreased 490 basis points compared to June 29, 2025. The increase in primary operating capital percentage at July 5, 2026 compared to March 31, 2026 was primarily due to strategic inventory building and timing of accounts payable payments. The decrease in primary operating capital percentage at July 5, 2026 compared to June 29, 2025 was primarily due to higher amounts of receivables securitized from the Amended Receivables Purchase Agreement (Amended RPA).

Previous wording

We believe that our financial position is strong, and we have substantial liquidity to cover short-term liquidity requirements and anticipated growth in the foreseeable future, with $450.1 million of available cash and cash equivalents and available and undrawn committed credit lines of approximately $436.7 million at December 28, 2025, availability subject to credit agreement financial covenants.

Current wording

We believe that our financial position is strong, and we have substantial liquidity to cover short-term liquidity requirements and anticipated growth in the foreseeable future, with $530.7 million of available cash and cash equivalents and available and undrawn committed credit lines of approximately $576.7 million at July 5, 2026, availability subject to credit agreement financial covenants.

Previous wording

On January 11, 2024, we issued $300 million in aggregate principal amount of our 6.625% Senior Notes due 2032 (the “2032 Notes”). Proceeds from this offering, net of debt issuance costs, were $297.0 million and were utilized to pay down the Fourth Amended Credit Facility.

Current wording

We issued $300 million in aggregate principal amount of our 4.375% Senior Notes due December 15, 2027 (the “2027 Notes”) and $300 million in aggregate principal amount of our 6.625% Senior Notes due 2032 (the “2032 Notes”).

Previous wording

During the second quarter of fiscal 2026, the Company entered into the sixth amendment to the 2017 Credit Facility (as amended, the “Sixth Amended Credit Facility”). The Sixth Amended Credit Facility provides (i) an upsized revolving credit facility in an aggregate committed amount of $1.0 billion (the “ Third Amended Revolver”), which represents an increase of $150 million from the existing revolving credit facility and which matures on September 30, 2030 and (ii) certain other modifications to the existing credit agreement as further set forth in the Sixth Amended Credit Facility. In connection with the Sixth Amended Credit Facility, (i) all of the outstanding term loans (including accrued and unpaid interest thereon) and (ii) all accrued and unpaid interest and fees on the outstanding revolving loans, in each case, under the existing credit agreement were repaid in full.

Current wording

The Company maintains the sixth amendment to the 2017 Credit Facility (as amended, the “Sixth Amended Credit Facility”). The Sixth Amended Credit Facility provides (i) an upsized revolving credit facility in an aggregate committed amount of $1.0 billion (the “ Third Amended Revolver”), which represents an increase of $150 million from the existing revolving credit facility and which matures on September 30, 2030 and (ii) certain other modifications to the existing credit agreement as further set forth in the Sixth Amended Credit Facility. In connection with the Sixth Amended Credit Facility, (i) all of the outstanding term loans (including accrued and unpaid interest thereon) and (ii) all accrued and unpaid interest and fees on the outstanding revolving loans, in each case, under the existing credit agreement were repaid in full.

Previous wording

Net sales increased $12.9 million or 1.4% in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025. This increase was the result of a 3% increase in pricing and a 2% increase from foreign currency translation, partially offset by a 4% decrease in organic volume.

Current wording

Net sales increased $42.6 million or 4.8% in the first quarter of fiscal 2027 as compared to the first quarter of fiscal 2026. This increase was the result of a 3% increase in price/mix, a 1% increase in organic volume and 1% increase in foreign currency translation.

Previous wording

Operating expenses, as a percentage of sales, decreased 90 basis points in the third quarter and increased 20 basis points in nine months of fiscal 2026, compared to the comparable periods of fiscal 2025. Our operating expenses for the third quarter decreased as a percentage of sales due to our cost saving and restructuring initiates. Year to date, we experienced higher operating expenses as a percentage of sales primarily due to additional accelerated stock compensation expense of $10.2 million in the nine months of fiscal 2026.

Current wording

Operating expenses, as a percentage of sales, decreased 180 basis points in the first quarter of fiscal 2027, compared to the first quarter of fiscal 2026.

Previous wording

Selling expenses, a main component of operating expenses, decreased $0.6 million or 1.1% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, and decreased 10 basis points as a percentage of sales. In the nine months of fiscal 2026, selling expenses increased by $5.5 million or 3.4% compared to the nine months of fiscal 2025 and decreased 10 basis points as a percentage of net sales related to inflation.

Current wording

Selling expenses, our main component of operating expenses, decreased $2.0 million or 3.5% in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026, and decreased 50 basis points as a percentage of net sales. Also, we experienced higher operating expenses due to additional accelerated stock compensation expense of $10.2 million in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2027.

Previous wording

On July 22, 2025, the Company announced a reduction in force plan (the "Plan") as part of the Company's strategic restructuring plan under its new leadership to better align resources with current business priorities and long-term objectives. The Plan is expected to reduce non-production global workforce by approximately 11%, or approximately 575 employees, and is focused primarily on corporate and management positions. The Company estimates one-time cash charges related to the Plan to be $21.2 million consisting of severance payments, notice period payments in applicable jurisdictions, employee benefits and related costs. The Company expects to incur these expenses primarily in the second and third quarter of fiscal 2026. During the nine months of fiscal 2026, the Company recorded a $21.2 million in severance costs relating to the plan.

Current wording

On July 22, 2025, the Company announced a reduction in force plan (the "Plan") as part of the Company's strategic restructuring plan under its new leadership to better align resources with current business priorities and long-term objectives. The Plan is expected to reduce non-production global workforce by approximately 11%, or approximately 575 employees, and is focused primarily on corporate and management positions. During the current quarter of fiscal 2027, the Company recorded

Previous wording

On April 1, 2025, the Company's Board of Directors approved a plan to close its facility in Monterrey, Mexico, which focused on manufacturing flooded motive power batteries. Management determined that future demand for traditional motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium and Thin Plate Pure Lead (TPPL). Production of products being manufactured in Monterrey, Mexico will be moved to EnerSys’ existing facility in Richmond, Kentucky. The Company expects to incur a pre-tax charge of approximately $13.7 million under this restructuring plan when completed, the majority of which is expected to be recorded by the end of the 2025 calendar year, of which $1.5 million is expected to be a non-cash charge from fixed asset and inventory charges. Cash charges of approximately $12.2 million, include severance and employee retention costs, environmental related expenses and equipment decommissioning, along with contractual releases and legal expenses.

Current wording

On April 1, 2025, the Company's Board of Directors approved a plan to close its facility in Monterrey, Mexico, which focused on manufacturing flooded batteries. Management determined that future demand for traditional material handling flooded cells will decrease as customers transition to maintenance free product solutions in lithium and Thin Plate Pure Lead (TPPL). Production of products being manufactured in Monterrey, Mexico will be moved to EnerSys’ existing facility in Richmond, Kentucky. The Company expects to incur a pre-tax charge of approximately $13.7 million under this restructuring plan when completed, the majority of which is expected to be recorded by the end of the 2025 calendar year, of which $1.5 million is expected to be a non-cash charge from fixed asset and inventory related charges. Cash charges of approximately $12.2 million, include severance and employee retention costs, environmental related expenses and equipment decommissioning, along with contractual releases and legal expenses.

Previous wording

During the nine months of fiscal 2026, the Company recorded a $3.9 million in severance costs and unusual manufacturing variances of $1.2 million.

Current wording

During fiscal 2026, the Company recorded cash charges totaling $5.2 million primarily relating to severance costs and unusual manufacturing variances of $2.3 million.

Previous wording

On June 29, 2022, the Company committed to a plan to close its facility in Ooltewah, Tennessee, which produced flooded motive power batteries for electric forklifts. Management determined that future demand for traditional motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium and TPPL. The Company currently estimates that the total charges for these actions will amount to approximately $18.5 million. Cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses are estimated to be $9.2 million and non-cash charges from inventory and fixed asset write-offs are estimated to be $9.3 million. These actions will result in the reduction of approximately 165 employees. The plan was completed as of the first quarter of fiscal 2026.

Current wording

On June 29, 2022, the Company committed to a plan to close its facility in Ooltewah, Tennessee, which produced flooded batteries for electric forklifts. Management determined that future demand for traditional flooded cells will decrease as customers transition to maintenance free product solutions in lithium and TPPL. The Company currently estimates that the total charges for these actions will amount to approximately $18.5 million. Cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses are estimated to be $9.2 million and non-cash charges from inventory and fixed asset write-offs are estimated to be $9.3 million. These actions will result in the reduction of approximately 165 employees. The plan was completed as of the first quarter of fiscal 2026.

Previous wording

During fiscal 2023, the Company recorded cash charges relating primarily to severance and manufacturing variances of $2.8 million and non-cash charges of $7.3 million relating to fixed asset write-offs. The Company also recorded a non-cash write-off relating to inventories of $1.6 million, which was reported in cost of goods sold.

Current wording

During fiscal 2023, the Company recorded cash charges relating to severance and manufacturing variances of $2.8 million and non-cash charges of $7.3 million relating to fixed asset write-offs. The Company also recorded a non-cash write-off relating to inventories of $1.6 million, which was reported in cost of goods sold.

Previous wording

During fiscal 2025, the Company recorded $0.5 million cash charges relating to site cleanup.

Current wording

During fiscal 2025, the Company recorded $0.5 million in cash charges relating to site cleanup.

Previous wording

During the nine months of fiscal 2026, the Company recorded a $1.1 million gain of the sale of the building.

Current wording

During fiscal 2026, the Company recorded a $1.1 million gain of the sale of the building.

Previous wording

In fiscal 2021, we committed to a plan to close substantially all of our facility in Hagen, Germany, which produced flooded motive power batteries for electric forklifts. Management determined that future demand for the motive power batteries produced at this facility was not sufficient, given the conversion from flooded to maintenance free batteries by customers, the existing number of competitors in the market, as well as the near term decline in demand and increased uncertainty from the pandemic. The Company plans to retain the facility with limited sales, service and administrative functions along with related personnel for the foreseeable future.

Current wording

In fiscal 2021, we committed to a plan to close substantially all of our facility in Hagen, Germany, which produced flooded batteries for electric forklifts. Management determined that future demand for the batteries produced at this facility was not sufficient, given the conversion from flooded to maintenance free batteries by customers, the existing number of competitors in the market, as well as the near-term decline in demand and increased uncertainty from the pandemic. We plan to retain the facility with limited sales, service and administrative functions along with related personnel for the foreseeable future.

Previous wording

The Company currently estimates that the total charges for these actions will amount to approximately $60.0 million of which cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses were estimated to be $40.0 million and non-cash charges from inventory and equipment write-offs were estimated to be $20.0 million. The majority of these charges have been recorded as of January 1, 2023. These actions resulted in the reduction of approximately 200 employees.

Current wording

We currently estimate that the total charges for these actions will amount to approximately $60.0 million of which cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses were estimated to be $40.0 million and non-cash charges from inventory and equipment write-offs were estimated to be $20.0 million. The majority of these charges have been recorded as of March 31, 2022. These actions resulted in the reduction of approximately 200 employees.

Previous wording

(1) The percentages shown for the segments are computed as a percentage of the applicable segment’s net sales; Corporate and other is computed based on total consolidated net sales

Current wording

(1) The percentages shown for the segments are computed as a percentage of the applicable segment’s net sales; Corporate and other unallocated is computed based on total consolidated net sales

Previous wording

(2) Corporate and other includes amounts managed on a company-wide basis and not directly allocated to any reportable segments, primarily relating to IRC 45X production tax credits. Also, included are start-up costs for exploration of a new lithium plant as well as start-up operating expenses from the New Ventures operating segment.

Current wording

(2)Corporate and other unallocated includes amounts managed on a company-wide basis and not directly allocated to any reportable segments, primarily relating to IRC 45X production tax credits and refunds of IEEPA tariffs recognized relating to amounts paid in prior periods. Also, included are start-up costs for exploration of a new lithium plant.

Previous wording

The Energy Systems operating earnings, as a percentage of sales, increased 400 basis points and 230 basis points in the third quarter and nine months of fiscal 2026, respectfully, compared to the third quarter and nine months of fiscal 2025. These increases were driven by improved price/mix combined with higher volumes of data center and industrial customers. We also continue to benefit from lower operating costs from tight cost controls and restructuring initiatives.

Current wording

The Network & Infrastructure Solutions operating earnings, as a percentage of sales, increased 280 basis points in the first quarter of fiscal 2027 compared to the first quarter fiscal 2026. This increase was driven by improved price/mix combined with higher volumes of data center and industrial customers. We also continue to benefit from lower operating costs from tight cost controls and restructuring initiatives.

Previous wording

Interest expense of $14.1 million in the third quarter of fiscal 2026 (net of interest income of 1.2 million) was $0.8 million lower than the interest expense of $14.9 million in the third quarter of fiscal 2025 (net of interest income of $1.4 million).

Current wording

Interest expense of $10.6 million in the first quarter of fiscal 2027 (net of interest income of $4.2 million) was $0.7 million lower than the interest expense of $11.3 million in the first quarter of fiscal 2026 (net of interest income of $3.2 million).

Previous wording

Included in interest expense are non-cash charges for deferred financing fees of $0.6 million and $1.6 million for the third quarter and nine months of fiscal 2026 and $0.5 million and $1.5 million in the third quarter and nine months of fiscal 2025.

Current wording

Included in interest expense are non-cash charges for deferred financing fees of $0.5 million for the first quarter of fiscal 2027 and $0.5 million in the first quarter of fiscal 2026.

Previous wording

Other (income) expense, net in the third quarter of fiscal 2026 was expense of $3.9 million compared to expense of $1.1 million in the third quarter of fiscal 2025. Other (income) expense, net in the nine months of fiscal 2026 was expense of $16.8 million compared to expense of $4.8 million in the nine months of fiscal 2025. Foreign currency impact resulted in a loss of $0.5 million and a loss of $7.8 million in the third quarter and nine months of fiscal 2026, respectively, compared to a foreign currency gain of $2.2 million and a gain of $4.2 million in the third quarter and nine months of fiscal 2025, respectively.

Current wording

Other (income) expense, net in the first quarter of fiscal 2027 was expense of $5.8 million compared to expense of $9.5 million in the first quarter of fiscal 2026. Foreign currency impact resulted in a loss of $0.2 million in the first quarter of fiscal 2027 compared to a foreign currency loss of $6.2 million in the first quarter of fiscal 2026.

Previous wording

As a result of the above, earnings before income taxes in the third quarter of fiscal 2026 decreased $20.5 million, or 16.2%, compared to the third quarter of fiscal 2025 and decreased $41.9 million, or 14.4% in the nine months of fiscal 2026 compared to the nine months of fiscal 2025.

Current wording

As a result of the above, earnings before income taxes in the first quarter of fiscal 2027 increased $69.3 million, or over 100%, compared to the first quarter of fiscal 2026.

Previous wording

The Company’s income tax provision consists of federal, state and foreign income taxes. The tax provision for the second quarter of fiscal 2026 and 2025 was based on the estimated effective tax rates applicable for the full years ending March 31, 2026 and March 31, 2025, respectively, after giving effect to items specifically related to the interim periods. The Company’s effective income tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions, in which the Company operates, changes in tax laws and the amount of the Company's consolidated earnings before taxes.

Current wording

The Company’s income tax provision consists of federal, state and foreign income taxes. The tax provision for the first quarter of fiscal 2027 and 2026 was based on the estimated effective tax rates applicable for the full years ending March 31, 2027 and March 31, 2026, respectively, after giving effect to items specifically related to the interim periods. The Company’s effective income tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions, in which the Company operates, changes in tax laws and the amount of the Company's consolidated earnings before taxes.

Previous wording

The Organization for Economic Co-operation and Development (OECD) has a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective for taxable years beginning after December 31, 2023. While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2.

Current wording

The Organization for Economic Co-operation and Development (OECD) has adopted model rules to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective for taxable years beginning after December 31, 2023.

Previous wording

The impact of the enacted legislation is included in our estimated effective tax rate. The Company will continue to monitor and evaluate as new legislation and guidance is issued.

Current wording

The impact of the enacted legislation is included in our effective tax rate. The Company will continue to monitor and evaluate as new legislation and guidance is issued.

Previous wording

The consolidated effective income tax rates for the third quarter of fiscal 2026 and 2025 were 14.9% and 9.4% and for the nine months of fiscal 2026 and 2025 were 12.9% and 7.9%. The rate increase in the third quarter compared to the prior period are primarily due to the impact of Pillar 2 and mix of earnings among tax jurisdictions. The rate increase in the nine months of fiscal 2026 compared to the prior year periods are primarily due to a discrete tax benefit for Varian in fiscal 2025, impact of Pillar 2 and mix of earnings among tax jurisdictions.

Current wording

The consolidated effective income tax rates for the first quarter of fiscal 2027 and 2026 were 13.7% and 12.5%. The rate increase in the first quarter compared to the prior year period is primarily due to changes in the mix of earnings among tax jurisdictions.

Previous wording

Foreign income as a percentage of worldwide income is estimated to be 53% for fiscal 2026 compared to 48% for fiscal 2025. The foreign effective tax rates for the nine months of fiscal 2026 and 2025 were 17% and 15%, respectively. The foreign effective tax rate increase is primarily due to the impact of Pillar 2. Income from the Company's Swiss subsidiary comprised a substantial portion of the Company's overall foreign mix of income for both fiscal 2026 and fiscal 2025 and were taxed at an effective income tax rate of approximately 14% and 11%, respectively.

Current wording

Foreign income as a percentage of worldwide income is estimated to be 51% for fiscal 2027 compared to 52% for fiscal 2026. The foreign effective tax rates for the first quarter of fiscal 2027 and 2026 were 17% and 16%, respectively. The foreign effective tax rate increase in the first quarter compared to the first quarter of the prior year is primarily due to changes in the mix of earnings among tax jurisdictions. Income from the Company's Swiss subsidiary comprised a substantial portion of the Company's overall foreign mix of income for both fiscal 2027 and fiscal 2026 and were taxed at an effective income tax rate of approximately 13% and 14%, respectively.

Previous wording

Operating activities provided cash of $403.6 million in the nine months of fiscal 2026 compared to $125.1 million of cash provided in the nine months of fiscal 2025, Inventory increased or used cash of $38.1 million, and accounts receivable decreased or provided cash of $140.7 million. Additionally, accounts payable decreased or used cash of $71.7 million. In the nine months of fiscal 2026, net earnings were $216.3 million, depreciation and amortization $84.6 million, stock-based compensation $29.5 million, and $1.7 million in cash disbursements from derivatives not designated in hedging relationships. Prepaid and other current assets provided funds of $29.5 million, primarily from a decrease of $33.0 million in prepaid taxes included $137.0 million payment from the IRS relating to prior year tax return refund and $3.5 million in non trade receivables, partially offset by increases of $9.0 million in contract assets. Accrued expenses were a use of funds of $9.2 million primarily from an decrease in tax accruals of $14.7 million, deferred revenue of $4.2 million and sales related accruals of $3.6 million, partially offset by increases of $9.6 million to restructuring accruals, $6.4 million to warranty, and $9.8 million in miscellaneous other accruals, including freight and professional accruals.

Current wording

Operating activities provided cash of $230.2 million in the three months of fiscal 2027 compared to $1.0 million of cash provided in the three months of fiscal 2026. Inventory increased or used cash of $14.5 million, and accounts receivable decreased or provided cash of $48.2 million. Additionally, accounts payable decreased or used cash of $22.5 million. In the three months of fiscal 2027, net earnings were $116.5 million, depreciation and amortization $30.5 million, stock-based compensation $7.8 million, and $0.4 million in cash disbursements from derivatives not designated in hedging relationships. Prepaid and other current assets provided funds of $88.9 million, primarily from a decrease of $81.0 million in prepaid taxes that included $115.5 million payment from the IRS relating to prior year tax return refund, $11.3 million in miscellaneous other accruals, $4.9 million in contract assets, and partially offset by increases of $8.3 million in non trade receivables. Accrued expenses were a use of funds of $38.0 million primarily from a decrease in payroll accruals of $27.9 million, sales related accruals of $10.5 million, freight accruals of $7.6 million, contract liabilities of $6.9 million, restructuring accruals of $2.6 million, and warranty accruals of $1.9 million, partially offset by increases of $13.6 million in miscellaneous and other accruals, including professional and tax accruals, and $5.9 million to deferred income.

Previous wording

In the nine months of fiscal 2025, operating activities provided cash of $125.1 million. Inventory increased or used cash of $19.6 million, and accounts receivable increased or used cash of $24.2 million. Additionally, accounts payable decreased or used cash of $17.7 million. In the nine months of fiscal 2025, net earnings were $267.2 million, depreciation and amortization $74.4 million, stock-based compensation $20.3 million, allowance for doubtful debts of $1.9 million, non-cash interest of $1.4 million and, non-cash charges relating to exit charges $0.3 million. Prepaid and other current assets were a use of funds of $145.5 million, primarily from an increase of $119.7 million in income tax receivable, $15.5 million in contract assets, and $11.7 million in other prepaid expenses, partially offset by a decrease of $0.9 million in prepaid insurance . Accrued expenses were a use of funds of $34.8 million primarily from decrease in tax accruals of $32.5 million, payroll related payments of $13.6 million net of accruals, other miscellaneous accruals of $3.0 million, and sales related accruals of $1.0 million, partially offset by $8.1 million in accrued interest net of interest payments, $5.2 million in contract liabilities and deferred income, and warranty accruals of $1.9 million.

Current wording

In the first three months of fiscal 2026, operating activities provided cash of $1.0 million with the decrease in operating cash resulting mainly due to activity in accounts receivable, inventory, prepaid and other current assets, accrued expenses and accounts payable. Inventory increased or used cash of $33.5 million, and accounts receivable decreased or provided cash of $50.2 million. Additionally, accounts payable decreased or used cash of $43.0 million. In the three months of fiscal 2026, net earnings were $57.5 million, depreciation and amortization $26.9 million, stock-based compensation $17.6 million, and $2.5 million in cash proceeds from derivatives not designated in hedging relationships. Prepaid and other current assets were a use of funds of $38.9 million, primarily from an increase of $30.3 million in prepaid taxes, $12.1 million in contract assets, partially offset by a decrease of $3.5 million in other prepaid expenses. Accrued expenses were a use of funds of $38.4 million primarily from decrease in tax accruals of $3.4 million, payroll related payments of $22.8 million net of accruals, and sales related accruals of $14.3 million, partially offset by $0.5 million in accrued interest net of interest payments.

Previous wording

Investing activities used cash of $307.5 million in the nine months of fiscal 2025, which primarily consisted of the Bren-Tronics acquisition of $206 million, capital expenditures of $90.8 million relating to plant improvements and $10.9 million relating to investment in equity securities.

Current wording

Investing activities used cash of $12.3 million in the three months of fiscal 2027, which primarily consisted of capital expenditures of $12.4 million relating to plant improvements, partially offset by $0.1 million in proceeds from disposal of property, plants, and equipment.

Previous wording

Investing activities used cash of $75.7 million in the nine months of fiscal 2026, which primarily consisted of acquisitions of $12.7 million and capital expenditures of $67.2 million relating to plant improvements, partially offset by $4.2 million in proceeds from disposal of property, plants, and equipment.

Current wording

Investing activities used cash of $41.4 million in the first three months of fiscal 2026, which primarily consisted of acquisitions of $12.6 million and capital expenditures of $33.0 million relating to plant improvements, partially offset by $4.2 million in proceeds from disposal of property, plants, and equipment.

Previous wording

Financing activities used cash of $241.4 million in the nine months of fiscal 2026. During the nine months of fiscal 2026, we borrowed $542.6 million under the Second and Third Amended Revolver and repaid $265.0 million of the Second Amended Revolver and $210.0 million of Term Loans. We purchased treasury stock totaling $301.4 million and paid cash dividends to our stockholders totaling $28.6 million. Additionally in the nine months, we received options proceeds of $32.0 million and paid $8.3 million relating to taxes for net share settlement of equity awards. We paid $3.4 million in debt issuance costs as well relating to our sixth amendment to the Credit Facility.

Current wording

Financing activities used cash of $123.8 million in the three months of fiscal 2027. During the three months of fiscal 2027, we borrowed $120.0 million under the Second Amended Revolver and repaid $190.0 million of the Second Amended Revolver. We purchased treasury stock totaling $50.0 million and paid cash dividends to our stockholders totaling $9.6 million. Additionally in the three months, we received option proceeds of $5.9 million

Previous wording

Financing activities provided cash of $328.9 million in the nine months of fiscal 2025. During the nine months of fiscal 2025, we borrowed $650.0 million under the Second Amended Revolver and repaid $180.0 million of the Second Amended Revolver. Net repayments on short-term debt were $1.0 million. We purchased treasury stock totaling $113.9 million, paid cash dividends to our stockholders totaling $28.0 million, and received proceeds from stock options of $7.6 million. Payments for financing costs for debt modification were $0.4 million. We paid $8.0 million for taxes related to net share settlement of equity awards.

Current wording

Financing activities provided cash of $26.0 million in the three months of fiscal 2026. During the three months of fiscal 2026, we borrowed $231.7 million under the Second Amended Revolver and repaid $46.7 million of the Second Amended Revolver. Net repayments on short-term debt were $0.2 million. We purchased treasury stock totaling $150.0 million and paid cash dividends to our stockholders totaling $9.1 million.

Previous wording

Currency translation had a positive impact of $20.5 million on our cash balance in the nine months of fiscal 2026 compared to the negative impact of $16.6 million on our cash balance in the nine months of fiscal 2025. In the nine months of fiscal 2026, principal currencies in which we do business such as the Euro, Polish zloty, Swiss Franc and British pound strengthened versus the U.S. dollar.

Current wording

Currency translation had a negative impact of $2.0 million on our cash balance in the three months of fiscal 2027 compared to the positive impact of $18.0 million on our cash balance in the three months of fiscal 2026. In the three months of fiscal 2027, principal currencies in which we do business such as the Euro, Polish zloty, Swiss Franc and British pound weakened versus the U.S. dollar.

Previous wording

As a result of the above, total cash and cash equivalents increased by $107.0 million to $450.1 million, in the nine months of fiscal 2026 compared to an increase of $129.8 million to $463.2 million, in the nine months of fiscal 2025.

Current wording

As a result of the above, total cash and cash equivalents increased by $92.0 million to $530.7 million, in the three months of fiscal 2027 compared to an increase of $3.5 million to $346.7 million, in the three months of fiscal 2026.

Previous wording

During the second quarter of fiscal 2026, the Company entered into the sixth amendment to the 2017 Credit Facility (as amended, the “Sixth Amended Credit Facility”). The Sixth Amended Credit Facility provides (i) an upsized revolving credit facility in an aggregate committed amount of $1.0 billion (the “ Third Amended Revolver”), which represents an increase of $150 million from the existing revolving credit facility and which matures on September 30, 2030 and (ii) certain other modifications to the existing credit agreement as further set forth in the Sixth Amended Credit Facility. In connection with the Sixth Amended Credit Facility, (i) all of the outstanding term loans (including accrued and unpaid interest thereon) and (ii) all accrued and unpaid interest and fees on the outstanding revolving loans, in each case, under the existing credit agreement were repaid in full.

Current wording

The Company maintains the sixth amendment to the 2017 Credit Facility (as amended, the “Sixth Amended Credit Facility”). The Sixth Amended Credit Facility provides (i) an upsized revolving credit facility in an aggregate committed amount of $1.0 billion (the “ Third Amended Revolver”), which represents an increase of $150 million from the existing revolving credit facility and which matures on September 30, 2030 and (ii) certain other modifications to the existing credit agreement as further set forth in the Sixth Amended Credit Facility. In connection with the Sixth Amended Credit Facility, (i) all of the outstanding term loans (including accrued and unpaid interest thereon) and (ii) all accrued and unpaid interest and fees on the outstanding revolving loans, in each case, under the existing credit agreement were repaid in full.