ALBANY INTERNATIONAL CORP /DE/

This quarterly report and the documents incorporated or deemed to be incorporated by reference in this quarterly report contain statements concerning our future results and performance and other matters that are “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” "forecast," ”look for,” “will,” “should,” “guidance,” “guide” and similar expressions identify forward-looking statements, which generally are not historical in nature. Because forward-looking statements are subject to certain risks and uncertainties, (including, without limitation, those set forth in the Company’s most recent Annual Report on Form 10-K or prior Quarterly Reports on Form 10-Q) actual results may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are qualified in their entirety by the specific cautionary factors identified below and the more detailed risk factor discussions contained in those filings. Investors should not place undue reliance on any forward-looking statement.

There are a number of risks, uncertainties, and other important factors that could cause actual results to differ materially from the forward-looking statements, including, but not limited to:

•Conditions in the industries in which our Machine Clothing and Albany Engineered Composites segments compete, along with the general risks associated with macroeconomic conditions, including higher interest rates, inflationary pressures, or the effects of another pandemic, for an extended period of time;

•Across the entire Company, increasing labor, raw material, energy, or logistics and costs due to supply chain constraints and inflationary pressures. These challenges have only increased as a result of the ongoing Russia-Ukraine war and the conflict in the Middle East;

•Across both segments, potential port strikes could cause additional disruptions to our supply chain;

•Harm caused by changes in our relationships or contracts with suppliers and customers;

•In the Machine Clothing segment, greater than anticipated declines in the demand for publication grades of paper, or lower than anticipated growth in other paper grades;

•In the Albany Engineered Composites segment, longer-than-expected timeframe for the aerospace industry to utilize existing inventories, and unanticipated reductions in demand, delays, technical difficulties or cancellations in aerospace programs that are expected to generate revenue and drive long-term growth;

•Inability of our Machine Clothing or Albany Engineered Composites segments to create additional production capacity in a timely manner or the occurrence of other manufacturing or supply difficulties (including as a result of geopolitical crises, natural disaster, public health crises and epidemics/pandemics, regulatory or otherwise);

•Changes in geopolitical conditions impacting countries where the Company does or intends to do business;

•Failure to achieve or maintain anticipated profitable growth;

•Failure to achieve our strategic initiatives and other goals, including, but not limited to, our sustainability goals;

•In the Albany Engineered Composites segment, the estimates and expectations based on aircraft production rates provided by Airbus, Boeing and others;

•In the Albany Engineered Composites segment, risks and uncertainties associated with the successful implementation and ramp up of significant new programs, including the ability to manufacture the products to the detailed specifications required and recover start-up costs and other investments in the programs;

•In the Albany Engineered Composites segment, risks associated with changes in estimates and assumptions that could result in a decline in program gross margins or turn a profitable program into a loss program;

•Adverse impacts from inflation, an economic slowdown or recession and from disruption in capital and credit markets that might impede our access to credit, increase our borrowing costs and impair the financial soundness of our customers and suppliers;

•Changes in trade policy, tariffs, or import/export restrictions that may significantly and adversely impact our results of operations;

•Expectations regarding our ability to attract, motivate, and retain the workforce necessary to execute our business strategy and other goals;

•Adverse impacts from fluctuations in foreign currency exchange rates;

•Harm caused by customer purchase reductions, payment defaults or contract non-renewal;

•In the Albany Engineered Composites segment, future funding and compliance risks associated with our contracts with government entities, OEM customers or prime contractors on contracts with governmental agencies;

•Costly and disruptive legal disputes and settlements;

•Future levels of indebtedness and capital expenditures;

•Adverse impacts from changes in tax legislation or challenges to our tax positions;

•Cybersecurity incidents or significant computer system compromises or data breaches;

•Significant problems with information systems or networks;

•Failure to successfully integrate the Heimbach Group companies into our business systems and processes within the expected timeframe or, failure to or delayed realization of anticipated benefits of the acquisition could adversely impact the Company’s business, financial condition and results of operations; and

•Other risks and uncertainties detailed in this report and other periodic reports.

Further information concerning important factors that could cause actual events or results to be materially different from the forward-looking statements can be found in the “Business Environment Overview and Trends” sections of this quarterly report, as well as in the Item 1A-“Risk Factors” section of our most recent Annual Report on Form 10-K. The risk factors enumerated above and in those filings are intended to be meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and such factors are specifically incorporated by reference herein. Although we believe the expectations reflected in our other forward-looking statements are based on reasonable assumptions, it is not possible to foresee or identify all factors that could have a material and negative impact on our future performance. The forward-looking statements included or incorporated by reference in this report are made on the basis of our assumptions and analyses, as of the time the statements are made, in light of our experience and perception of historical conditions, expected future developments, and other factors believed to be appropriate under the circumstances.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained or incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Business Environment Overview and Trends

We conduct our business under two reportable segments: Machine Clothing (“MC”) and Albany Engineered Composites (“AEC”) each rooted in similar materials sciences know-how that forms a common approach to customer value proposition in design and manufacturability. MC competes on the basis of its deep industry knowledge, customer reputation and customer service and global advanced textile manufacturing capabilities, which has enabled it to develop a robust and market leading product offering that can be tailored to customer-specific requirements. AEC competes on the basis of its innovative technology solutions, extensive composite manufacturing capabilities and capacity that enable it to offer high quality specific part and assembly solutions that achieve its customers’ application performance requirements.

Also, please refer to the Business Environment Overview and Trends in the Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025. The Annual Report on Form 10-K, along with the Company's other filings, can be found on the Securities and Exchange Commission's website, www.sec.gov, as well as on the Company's website: www.albint.com.

Global, economic, and political conditions, changes in raw material and commodity prices and supply, labor availability and costs, inflation, interest rates, potential changes in U.S. government policy positions, including changes in

Department of Defense policies or priorities, geopolitical conflicts and strained international relations, U.S. and non-U.S. tax law changes, foreign currency exchange rates, sanctions, tariffs, energy costs and supply, and the impact from natural disasters and weather conditions create uncertainties that could impact our businesses.

Machine Clothing Segment

The MC segment continues to deliver resilient performance, with several areas performing well despite uneven market dynamics. In Asia, softer demand—across Paper Machine Clothing & Engineered Fabrics—continues to contribute to regional pressure. Packaging and Tissue continue to perform well, supported by growth across most regions. Looking ahead to the remainder of 2026, we expect Packaging and Tissue to remain positive contributors, with sales in Europe holding broadly stable, while trajectory in the Americas is impacted by cyclical moderation tied to customer consolidations. Publication grades remained under structural pressure, and the MC segment expects publication grade paper demand to continue declining through 2026 and beyond, offset by growing demand for tissue grade products.

We believe the MC segment is well-positioned in key markets, with high-quality, low-cost production, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology. Some of the markets in which MC's products are sold are expected to have volume trends that are in line with global GDP. Despite pricing and demand pressures on revenue growth, the MC segment is expected to improve earnings in the future through technological innovations, manufacturing productivity efficiencies, global footprint optimization, and cost controls.

The MC segment has been a significant generator of operating cash inflows for the Company. The Company seeks to maintain the cash-generating potential of this business by vigorously using our differentiated and technically superior products to reduce our customers’ total cost of operation while improving their paper quality, and by maintaining lower costs through a continued focus on cost-reduction initiatives and strategic investment.

Albany Engineered Composites Segment

The AEC segment's strategy is to continue to build on its global brand by leveraging its industry leading performance to drive future growth through technology differentiation. This includes continued investment in AEC's proprietary 3D-woven technology to accelerate solutions that can be offered across a set of broader applications, and by leveraging AEC's non-3D technology capabilities and capacity, on high-value aerospace (both commercial and defense) applications, and other emerging markets such as space and advanced air mobility ("AAM"). The AEC segment provides longer-term growth potential for the Company as it ramps current production programs and captures new commercial and defense opportunities.

The AEC segment (including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group owns a 10% noncontrolling interest) supplies a number of customers in the aerospace industry. AEC’s largest aerospace customer is the SAFRAN Group ("SAFRAN") and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM International’s LEAP engine) accounted for approximately 15% of the Company’s consolidated Net revenues in 2025. The AEC segment, through ASC, also supplies 3D-woven composite fan cases for the GE9X engine. Outside of ASC, the AEC segment also supplies 3D-woven composite vanes for the F-35 Liftfan.

The AEC segment's current portfolio of non-3D programs includes components for the CH-53K helicopter, components for the F-35, missile bodies for Lockheed Martin’s JASSM air-to-surface missiles, fuselage components for the Boeing 787 aircraft, vacuum waste tanks for Boeing commercial aircraft and components and structures for other commercial, defense, and space and AAM programs. In 2025, approximately 35% of AEC net revenues were related to U.S. government contracts or programs.

The AEC segment is dependent on global supply chains and has experienced disruptions in recent years. In addition, higher inflation levels increased material costs, higher labor rates and other supplier costs that have impacted the AEC segment’s results of operations. The AEC segment attempts to mitigate raw material and supplier costs by entering into long-term supply agreements. However, in some cases, higher raw material and supplier costs adversely impacted certain firm-fixed price programs resulting in lower program gross margins. In addition, as the AEC segment ramps-up larger complex programs, such as those associated with the CH-53 program, it continues to face challenges in staffing and training its workforce to support production rates, which has impacted operational productivity, particularly at its Salt Lake City facility, and contributed to increased labor and scrap costs.

During the fourth quarter of 2025, we announced plans to commence a strategic review of the Amelia Earhart Drive facility in Salt Lake City. In the third quarter of 2026, we determined that we would no longer pursue the previously planned sale of the facility following the conclusion of the strategic review. This decision was made following new business wins, a renegotiated contract for the Boeing 787 program, and amended contract terms with Sikorsky, a Lockheed Martin Company, on the CH-53K program. We continue to engage closely with our customers in connection with the retained operations.

Consolidated Results of Operations

Net Revenues and Gross Profit

The following table summarizes our Consolidated Net revenues and Gross profit:

Three Month Comparison

Net revenues for the three months ended September 30, 2026 increased $88.1 million or 33.7% as compared to the three months ended September 30, 2025, primarily driven by negative CH-53K program adjustments of $46.0 million recorded in the prior year period compared to the reversal of $11.6 million of those adjustments in the current year period due to a contract renegotiation resulting in additional transaction price, as well as higher other program activity levels in the AEC segment. This is partially offset by softness in the MC business as a result of reduced activity levels in the Americas region.

The increase in gross profit of $190.3 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, was primarily driven by negative CH-53K program adjustments of $147.3 million recorded in the prior year period compared to the reversal of $44.4 million of these adjustments in the current year period due to the contract renegotiation. Additionally, higher AEC sales volume contributed to the increase in gross profit. These increases were partially offset by $11.0 million of catch-up depreciation and amortization recorded in the current year period upon reclassification of the Amelia Earhart Drive assets out of held for sale. Gross profit margin increased to 40.2% from (19.1)% for the three months ended September 30, 2026 and September 30, 2025, respectively.

Nine Month Comparison

Net revenues for the nine months ended September 30, 2026 increased $128.7 million or 14.9% as compared to the nine months ended September 30, 2025, primarily driven by negative CH-53K program adjustments of $54.3 million recorded in the prior year period compared to positive adjustments of $11.6 million in the current year period due to a contract renegotiation resulting in additional transaction price, as well as higher other program activity levels in the AEC segment. This is partially offset by softness in the MC business as a result of reduced activity levels in the Americas region. Additionally, changes in currency translation rates increased comparative segment net revenues by $14.0 million as compared to the prior year.

The increase in gross profit of $204.0 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily driven by changes in the estimated profitability of our CH-53K and other long-term contracts recognized in both periods. These adjustments were a negative $157.6 million in the prior year period, primarily related to an estimated loss reserve on CH-53K, compared to a positive $36.3 million in the current year period, primarily related to the CH-53K contract renegotiation. Additionally, higher AEC sales volume contributed to the increase in gross profit. Gross profit margin increased to 35.1% from 16.7% for the nine months ended September 30, 2026 and September 30, 2025, respectively.

Operating Expenses

The following table summarizes Consolidated Operating expenses by classification:

Three Month Comparison

Consolidated Selling, general and administrative ("SG&A") expenses increased $9.6 million or 18.5% as compared to the three months ended September 30, 2025. The overall changes are primarily the result of costs incurred related to the strategic review of the Amelia Earhart Drive facility and an increase in compensation costs.

Consolidated Technical and research expenses increased by $0.7 million as compared to the three months ended September 30, 2025, driven by increased costs to assist with continued innovation primarily within the AEC segment.

Restructuring expenses, net of $7.3 million in the three months ended September 30, 2026, increased by $4.1 million compared to $3.2 million in the three months ended September 30, 2025. The increase in restructuring expenses for the three month period is primarily a result of higher asset transfer costs related to site consolidations and higher consulting costs.

Nine Month Comparison

Consolidated Selling, general and administrative ("SG&A") expenses increased $11.6 million or 7.1% as compared to the nine months ended September 30, 2025. The overall changes are primarily the result of costs incurred related to the strategic review of the Amelia Earhart Drive facility and an increase in compensation costs.

Consolidated Technical and research expenses increased by $1.0 million as compared to the nine months ended September 30, 2025, driven by increased costs to assist with continued innovation primarily within the AEC segment.

Restructuring expenses, net of $18.4 million in the nine months ended September 30, 2026, increased by $8.5 million compared to $9.9 million in the nine months ended September 30, 2025. The increase in restructuring expenses for the nine month period is primarily a result of higher asset transfer costs related to site consolidations and higher consulting costs.

See the Segment Results of Operations section of this Management's Discussion and Analysis of Financial Condition and Results of Operations for significant drivers of Operating income/(loss) for each business segment.

Other Earnings Items

Interest Expense, net

Interest expense, net, increased $2.2 million as compared to the nine months ended September 30, 2025 due to higher average debt balances as well as a lower amount of interest income earned on cash equivalents during the current year.

Other (Income)/Expense, net

Other (income)/expense, net, included foreign currency related activity which resulted in gains of $2.1 million and $4.8 million in the three and nine months ended September 30, 2026, as compared to gains of $1.1 million and losses of $7.8 million in the same periods last year. These changes were primarily the result of unrealized gains and losses on intercompany loans. In addition, changes in the fair value of derivative instruments included gains of $0.1 million and $1.6 million in the three and nine months ended September 30, 2026, as compared to gains of $0.1 million and $3.4 million for the three and nine months ended September 30, 2025. Unrealized gains and losses on both derivative instruments and intercompany loans were driven by currency rate movements, most notably the Brazilian Real and British Pound Sterling. Components of net periodic pension and postretirement costs other than service costs constituted expenses of $1.5 million and $4.4 million in the three and nine months ended September 30, 2026, as compared to expenses of $1.0 million for the three months ended September 30, 2025 and $1.3 million for the nine months ended September 30, 2025. See Note 6, Other (Income)/Expense, net, in the Notes to the Consolidated Financial Statements in Item 1, which is incorporated herein by reference.

Effective Income Tax Rate

The Company has operations that constitute a taxable presence in 22 countries outside of the United States. The majority of these countries had income tax rates that were above the United States federal tax rate of 21 percent during the periods reported. The jurisdictional location of earnings is a significant component of our effective tax rate each year. The rate impact of this component is influenced by the specific location of non-U.S. earnings and the level of our total earnings. From period to period, the jurisdictional mix of earnings can vary as a result of operating fluctuations in the normal course of business, as well as the extent and location of other income and expense items, such as pension settlement and restructuring charges.

The tax rate is affected by recurring items, such as the income tax rate in the U.S. and non-U.S. jurisdictions and the mix of pre-tax income earned in those jurisdictions. The tax rate is also affected by U.S. tax costs on foreign pre-tax earnings, and by discrete items that may occur in any given year but are not consistent from year to year. The Company’s effective tax rate for the nine months ended September 30, 2026 was 28.5%, compared to 16.4% for the same period in 2025, primarily due to the Company being in a loss position in prior year. For more information, see Note 7, Income Taxes, in the Notes to the Consolidated Financial Statements in Item 1, which is incorporated herein by reference.

The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15 percent effective on January 1, 2024. The U.S. has not adopted the Pillar Two rules; however, various other governments around the world are enacting legislation. As currently designed, Pillar Two will ultimately apply to our worldwide operations. Certain foreign subsidiaries subject to the Pillar Two regime file reports to comply with locally enacted guidance. On January 1, 2026, the Pillar Two Side-by-Side (SbS) Safe Harbor agreement became effective, and the US is a Qualified SbS Regime. Therefore, a qualified US-headquartered multinational corporation may elect the SbS Safe Harbor and be exempt from minimum top-up tax. AIC intends to make the election. We do not expect the Pillar Two rules to materially increase our global tax costs in 2026, though uncertainty remains as the rules develop. We will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

Segment Results of Operations

Machine Clothing Segment

A summary of MC's selected financial results is as follows:

Net revenues

Net revenues for the three months ended September 30, 2026 decreased 2.9% as compared to the three months ended September 30, 2025, driven by reduced demand in the Americas region partially offset by strong performance within the European market and stable performance in Asia.

Net revenues for the nine months ended September 30, 2026 decreased 3.0% as compared to the nine months ended September 30, 2025, driven by reduced demand in the Americas region offset by strong performance within the European market and stable performance in Asia. Further, changes in currency translation rates had the effect of increasing Net revenues by $8.4 million for the nine months ended September 30, 2026, as compared to this period in 2025.

Gross Profit

Gross profit for the three months ended September 30, 2026 decreased by $6.7 million as compared to the three months ended September 30, 2025, driven by the volume declines noted above as well as under absorbed costs related to lower production rates, with gross profit margin decreasing from 46.9% to 44.4% in the three months ended September 30, 2025 and 2026, respectively.

Gross profit for the nine months ended September 30, 2026 decreased by $14.4 million as compared to the nine months ended September 30, 2025, primarily driven by the volume declines noted above as well as under absorbed costs related to lower production rates, with gross profit margin decreasing slightly from 46.3% to 45.0% in the nine months ended September 30, 2025 and 2026, respectively.

Operating income for the three months ended September 30, 2026 decreased $11.9 million or 27.7% as compared to the three months ended September 30, 2025, primarily as a result of gross profit declines and higher restructuring costs. Incremental restructuring expenses were primarily a result of higher asset transfer costs related to site consolidations and higher consulting costs.

Operating income for the nine months ended September 30, 2026 decreased $21.4 million or 18.0% as compared to the nine months ended September 30, 2025, primarily as a result of gross profit declines and higher restructuring costs, partially offset by Selling, general, and administrative and Technical and research cost containment. Incremental restructuring expenses were primarily a result of higher asset transfer costs related to site consolidations and higher consulting costs.

Albany Engineered Composites Segment

AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by a cost-plus-fee agreement. Revenue earned under this arrangement accounted for approximately 33% and 37% of segment revenue for the nine months ended September 30, 2026 and 2025, respectively.

In addition, AEC has long-term contracts in which the selling price is fixed. In accounting for those contracts, we estimate the profit margin expected at the completion of the contract and recognize a pro-rata share of that profit during the course of the contract using a cost-to-cost approach. Changes in estimated contract profitability will affect revenue and gross profit when the change occurs, which could have a significant favorable or unfavorable effect on revenue and gross profit in any reporting period. For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses. Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that often follow.

A summary of AEC's selected financial results is as follows:

Net revenues

Net revenues for the three months ended September 30, 2026 increased $93.3 million, or 107.8%, primarily driven by negative CH-53K program adjustments of $46.0 million recorded in the prior year period compared to the reversal of $11.6 million of those adjustments in the current year period due to a contract renegotiation resulting in additional transaction price, as well as higher other program activity levels, primarily LEAP.

Net revenues for the nine months ended September 30, 2026 increased $144.9 million, or 43.8%, primarily driven by negative CH-53K program adjustments of $54.3 million recorded in the prior year period compared to positive adjustments of $11.6 million in the current year period due to a contract renegotiation resulting in additional transaction price. Additionally, other program activities are higher in the current year period including LEAP platforms, B787 Frames, F-35, and BETA Technologies. Further, changes in currency translation rates had the effect of increasing Net revenues by $5.7 million for the nine months ended September 30, 2026, as compared to this period in 2025.

Gross Profit

Gross profit for the three months ended September 30, 2026 increased $197.0 million as compared to the three months ended September 30, 2025, and Gross profit margin increased from (152.6)% to 36.2% in the three months ended September 30, 2025 and 2026, respectively. The change was primarily driven by the absence of negative CH-53K program adjustments of $147.3 million recorded in the prior year period compared to the reversal of $44.4 million of these adjustments in the current year period due to the contract renegotiation. Additionally, higher sales volume contributed to the increase in gross profit. These increases were partially offset by $11.0 million of catch-up depreciation and amortization recorded in the current year period upon reclassification of the Amelia Earhart Drive assets out of held for sale.

Gross profit for the nine months ended September 30, 2026 increased $218.4 million as compared to the nine months ended September 30, 2025, and Gross profit margin increased from (30.7)% to 24.5% in the nine months ended September 30, 2025 and 2026, respectively. The change is primarily driven by changes in the estimated profitability of our CH-53K and other long-term contracts recognized in both periods. These adjustments were a negative $157.6 million in the prior year period, primarily related to an estimated loss reserve on CH-53K, compared to a positive $36.3 million in the current year period, primarily related to the CH-53K contract renegotiation. Additionally, higher sales volume contributed to the increase in gross profit.

Operating income for the three months ended September 30, 2026 increased $191.4 million as compared to the three months ended September 30, 2025, principally due to favorable changes to Gross profit as noted above and the conclusion of restructuring activities from 2025. This is partially offset by an increase in SG&A expenses of $4.9 million from the prior period as a result of increased compensation expenses.

Operating income for the nine months ended September 30, 2026 increased $212.4 million as compared to the nine months ended September 30, 2025, principally due to favorable changes to Gross profit as noted above and the conclusion of restructuring activities from 2025. This was slightly offset by an increase in SG&A expenses of $5.9 million from the prior period as a result of increased compensation expenses. Additionally, Technical and research expenses increased $1.8 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, driven by increased costs to assist with continued innovation within the segment.

Working Capital, Liquidity and Capital Structure

Cash Flow Summary

(a)Includes Accounts receivable, Contract assets, Inventories, Accounts payable, and Accrued liabilities.

Net cash provided by operating activities during the nine months ended September 30, 2026 was $51.6 million, compared to $78.8 million in the nine months ended September 30, 2025. The decrease was driven by lower cash generated by working capital primarily due to timing of customer collections and inventory growth in connection with timing of demand in both MC and AEC.

Net cash used in investing activities included capital expenditures totaling $33.3 million and $48.8 million for the nine months ended September 30, 2026 and September 30, 2025, respectively, with continued growth capital and capital designed to improve operating efficiencies across the Company.

Net cash used in financing activities was $55.5 million for the nine months ended September 30, 2026 as compared to net cash used of $48.3 million for the nine months ended September 30, 2025. During 2026, we had net repayments of debt of $30.0 million as compared to $150.0 million of borrowings in the prior year, which were offset by share repurchases of $171.0 million. Additionally, the Company has returned cash to shareholders through dividends of $23.8 million in the first nine months of 2026, compared to $24.7 million for the nine months ended September 30, 2025.

Liquidity and Capital Structure

We finance our business activities principally with cash generated from operations and borrowings, largely through our revolving credit agreement as discussed below. As of September 30, 2026, $422.1 million of borrowings were outstanding under our $800 million unsecured committed Amended Credit Agreement.

As of September 30, 2026, we had cash and cash equivalents of $79.1 million and borrowing capacity under our Amended Credit Agreement of $377.9 million, for a total liquidity of approximately $457.0 million. We believe cash flows from operations and the availability of funds under our Amended Credit Agreement will be adequate to fund our operations and business needs over the next twelve months.

As of September 30, 2026, $68.4 million of our total cash and cash equivalents were held by non-U.S. subsidiaries. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were in excess of $161.5 million, as of September 30, 2026 and are intended to remain indefinitely invested in foreign operations. Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such endeavor to date, there can be no assurance that we will be able to cost effectively repatriate funds in the future. Repatriating such cash from certain jurisdictions, which is currently considered to be indefinitely reinvested in foreign operations, may also result in additional taxes.

Off-Balance Sheet Arrangements

The Company is party to certain off-balance sheet arrangements, including certain guarantees. The Company provides financial assurance, such as payment guarantees and letters of credit and surety bonds, primarily to support workers’ compensation programs and customs clearance, of less than $10 million. There were no material changes in the Company’s off-balance sheet arrangements during the third quarter of 2026.