ALH 10-K & 10-Q changes, risk factors and insider trading

Three Months Ended MarchJune 31,30, 2026 as Compared to the Three Months Ended MarchJune 31,30, 2025

The following table sets forth our consolidated results of operations for the quarter ended MarchJune 31,30, 2026 (in thousands):

Net revenues for the three months ended MarchJune 31,30, 2026 increased $37.3$29.6 million, or 9.6%,6.6%, to $426.9$476.8 million from $389.6$447.2 million for the three months ended MarchJune 31,30, 2025. The increase in net revenues reflects a combination of price increases and volume growth, whichwith contributedprice contributing approximately one-thirdhalf of the increase, price increases, and an approximately 1% favorable impact from foreign exchange.increase. Equipment revenue increased $35.6$28.8 million, or 11.0%,7.6%, year over year, primarily driven by volume growth and price increases. Service parts revenue increased $1.9$0.3 million, or 4.5%,0.7%, year over year primarily driven by price increases. Equipment financing revenue increased $0.3$0.1 million, or 2.7%1.0% year over year driven by an increase in interest income due to growth in the loan base, partially offset by a decrease in variable loan rates tied to the prime rate.

Gross profit for the three months ended MarchJune 31,30, 2026 increased $12.2$15.7 million, or 8.4%,9.0%, to $157.2$189.9 million from $145.0$174.2 million for the three months ended MarchJune 31,30, 2025. Gross profit,profit as a percentage of net revenues,revenues remainedwas relatively flat at 36.8%39.8% for the three months ended MarchJune 31,30, 20262026, as compared to 37.2%39.0% for the three months ended MarchJune 31,30, 2025. A year over yearThe increase in tariffsgross profit as a percentage of approximatelyrevenue $3.4was primarily driven by favorable production volume cost absorption, cost reduction initiatives and $3.8 million negativelyof insurance proceeds and tariff refunds, which favorably impacted gross margin forin threethe monthscurrent ended March 31, 2026. Tariffs were partially offset by price increases and cost reduction initiatives.period.

Selling, general, and administrative expenses for the three months ended MarchJune 31,30, 2026 increased $2.8$3.9 million to $73.4$84.2 million from $70.5$80.3 million for the three months ended MarchJune 31,30, 2025. Selling, general, and administrative expenses as a percentage of net revenues was 17.2%17.7% for the three months ended MarchJune 31,30, 2026 as compared to 18.1%18.0% for the three months ended MarchJune 31,30, 2025. Included within Selling, general, and administrative expenses is $9.7$9.8 million and $11.1$11.2 million of non-cash depreciation and amortization related to the fair value step-up of assets recorded under purchase accounting from a prior business combination for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase in Selling, general and administrative expenses is primarily due to higher selling and promotional expenses driven by higher sales volume and increased administrative costs related to public company support costs, partially offset by a favorable impact from foreign exchange movements.

Interest expense, net for the three months ended MarchJune 31,30, 2026 decreased $27.0$21.6 million to $17.9$17.8 million from $44.9$39.4 million for the three months ended MarchJune 31,30, 2025. The decrease in interest expense was primarily attributable to a lower debt balance resulting from Term Loan voluntary prepayments, as discussed in Note 11 - Debt, and a lower interest rate on the Term Loan following refinancing activities in February 2025 and August 2025. Additionally, the decrease reflects a favorable change in the fair value of our interest rate swaps.

Other (income)/expenses, net

Other (income)/expenses, net for the three months ended MarchJune 31,30, 2026 was $6.5less millionthan of$0.1 incomemillion, compared to $7.1$13.8 million of expenses for the three months ended MarchJune 31,30, 2025. OtherThe incomeexpense forin the threeprior monthsyear endedperiod Marchwas 31,driven 2026by included $6.5$13.8 million of foreign exchange gainslosses on intercompany loans where the lender or borrower’s functional currency differs from the loan denomination currency. OtherIn expenses forcontrast, the threecurrent months ended March 31, 2025period included $1.1a millionde of debt issuance costs and $6.1 millionminimis foreign exchange lossesloss on intercompany loans, net.loans.

The effective income tax rate was a 21.4%21.8% provision for the three months ended MarchJune 31,30, 2026 as compared to a 23.3%23.7% provision for the three months ended MarchJune 31,30, 2025. The decrease is primarily due to the benefit of deductibility for exercises of stock options, partially offset by limitations of deductibility of officer compensation subsequent to the IPO.IPO in the prior year period.

The following table presents the Company’s segment results for the three months ended MarchJune 31,30, 2026:

Revenue in North America increased $27.5$30.2 million or 9.4%9.2% to $319.8$359.3 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Equipment revenue increased $27.2$28.0 million, or 11.3%,10.2%, mainly driven by strong demand across all end markets, with particularly strong performance in the Commercial In-Home end market (an increase of 23%19%). Service parts revenue increased $0.2$1.2 million, or 0.5%,3.7%, primarily driven by price increases offsetting inflationary increases. Other revenues and Equipment financing revenue remained relatively flat year over year.

Adjusted EBITDA increased $3.8$16.8 million or 13.0%17.4% to $32.6$113.6 million for the three months ended MarchJune 31,30, 2026,2026 compared to the three months ended MarchJune 31,30, 2025 and Adjusted EBITDA Margin increased to 30.4%31.6% for the three months ended MarchJune 31,30, 2026 fromcompared 29.6%to 29.4% for the three months ended MarchJune 31,30, 2025. ThisThe increase wasin primarilyadjusted EBITDA margin is driven by customerbroad-based growth across all end markets, supported by demand mix shift toward larger-capacity machines in the Vended market. Additionally, the adjusted EBITDA margin was impacted by $3.8 million of insurance proceeds and producttariff mixrefunds, andwhich favorablefavorably foreignimpacted exchange.EBITDA margin in the current period.

Our principal sources of liquidity are cash on hand, cash flows generated from operations, and potential borrowings under our revolving credit facilities. We believe that our sources of liquidity will be adequate to meet our anticipated requirements for ongoing operations, capital expenditures, working capital, interest payments, scheduled principal payments, and other debt repayments over the next twelve months while remaining in compliance with the covenants of our debt agreements. We expect that capital expenditures in 2026 will be approximately $60.0 million. We have invested $5.2$13.9 million of cash into capital expenditures during the threesix months ended MarchJune 31,30, 2026.

Cash provided by operating activities for the threesix months ended MarchJune 31,30, 20252026 of $45.4$146.1 million was primarily derived from net income adjusted for non-cash provisions, partially offset by a $5.1$19.8 million increase in working capital. The primary contributors to the change in working capital were a $26.9$57.6 million increase in accounts and equipment financing receivables held for securitization investors and a $12.3 millionan increase inof inventories, partially offset by a $21.3$9.9 million increase in accounts payable, a $6.8 million increase in other liabilities and a $5.3 million decrease in accounts and equipment financing receivables.receivables, partially offset by a $40.8 million increase in accounts payable and a decrease of $7.7 million in other assets.

Cash used in investing activities of $6.4$13.6 million for the threesix months ended MarchJune 31,30, 2026 was primarily the result of $5.2$13.9 million of capital expenditures, $3.2 million related to the acquisitions of distributors in the United States, partially offset by a $1.9$3.2 million net inflow related to collections of new equipment financing receivables exceeding originations.

Cash used in investing activities of $11.3$24.1 million for the threesix months ended MarchJune 31,30, 2025 was primarily the result of $8.5$16.6 million related to capital expenditures, $2.0$3.1 million related to acquisitions of distributors in the United States and a $1.0$4.6 million net outflow related to originations of new equipment financing receivables exceeding collections.

Cash used in financing activities of $70.8$98.2 million for the threesix months ended MarchJune 31,30, 2026 was primarily comprised of $65.0$115.0 million in voluntary prepayments on the Term Loan, $7.6$8.7 million for taxes paid related to net share settlement of stock options, partially offset by a $1.7$22.5 million net increase in asset backed borrowings owed to securitization investors.

Cash provided by financing activities of $8.1$25.2 million for the threesix months ended MarchJune 31,30, 2025, was primarily comprised of $10.0$29.5 million net increase in asset backed borrowings owed to securitization investors, partially offset by $1.9$2.3 million for taxes paid related to netthe share settlementrepurchase of stockcommon options.stock.

As of MarchJune 31,30, 2026, there was $1,300.0$1,250.0 million outstanding under the Term Loan and $250.0$245.1 million of unused capacity on the revolving facility. The Term Loan bears interest of SOFR plus a margin of 2.25%.2.00%. As of MarchJune 31,30, 2026, the interest rate for the Term Loan is 5.92%.5.66%.

During the threesix months ended MarchJune 31,30, 2026, the Company made $65.0$115.0 million of voluntary prepayments on the Term Loan. Previously, during 2025, the Company made total voluntary prepayments on the Term Loan of $710.0 million, consisting of a $525.0 million prepayment on October 17, 2025, funded with net proceeds from the Company's initial public offering and cash on hand, and $185.0 million of other voluntary prepayments made during the year. The repayments were first applied to and eliminated the future required quarterly installment principal repayments. As such, the remaining balance of the Term Loan is due at maturity on August 19, 2031, with the exception forof any Excess Cash Flow payment required under the Credit Agreement.

As of MarchJune 31,30, 2026, we did not have any off-balance sheet arrangements, as defined in Regulation S-K promulgated by the SEC.