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

Sales to the U.S. Government and its prime contractors and subcontractors represent a significant portion of our business. In 2024,2025, approximately 27%23% of our revenues havefrom beencontinuing operations were generated from sales to the U.S. Government or its contractors, primarily within our A&D segment. These sales are dependent on government funding of the underlying programs, which is generally subject to annual Congressional appropriations and periodic authorization of increases in the Government debt ceiling, and they may therefore be adversely affected not only by failure to obtain timely and adequate appropriations but also by extended Government shutdowns or by changes in prioritiesGovernment followingspending the 2025 change in the Administration.priorities.

The lack of certainty about long-term Government defense spending priorities and Congressional willingness to continue short-term Governmental funding in a timely manner creates a continuing risk of reductions or terminations of, or delays in, the government funding of programs applicable to us or our customers, which we cannot anticipate. These funding effects could adversely affect our financial condition or results of operations. A significant portion of VACCO’s, Globe’s and Westland’s sales involve major U.S. Government programs such as NASA’s Space Launch System (SLS) and U.S. Navy submarines. A reduction or delay in Government spending on these programs could have a significant adverse impact on our financial results which could extend for more than a single year.

In 2024,2025, approximately 28%34% of our net sales from continuing operations were to customers outside the United States. We expect that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable future. As a result, we are subject to the risks of doing business internationally, including:

A significant part of our manufacturing operations relies on a small number of third-party manufacturers to supply component parts or products. For example, Doble has arrangements with six manufacturers which produce and supply a substantial portion of its end-products, and one of these suppliers produces approximately 23% of Doble’s products from a single location within the United States. As another example, Globe has a single supplier of critical materials for a significant military production program, and if this supplier were to discontinue producing these components in a timely manner the need to secure another source could pose a risk to or at least a significant delay in the production program. A significant disruption in the supply of those products or others provided by a small number of suppliers could negatively affect the timely delivery of products to customers as well as future sales, which could increase costs and reduce margins.

The cost of raw materials and product components is a major element of the total cost of many of our products. For example, our Test segment’s critical components rely on purchases of raw materials from third parties. IncreasesImport tariffs or other increases in the prices of raw materials (such as steel, copper, nickel, zinc, wood and petrochemical products) could have an adverse impact on our business by, among other things, increasing costs and reducing margins. Aerospace-grade titaniumtitanium, and gaseous helium,an important raw materialsmaterial for our A&D segment, may at times be in short supply; in addition, although we try to tie our supplier pricing to long-term contracts this is not always possible, and we are experiencing price inflation on a number of products. Further, some of Doble’s items of equipment which are provided to its customers for their use are in the maturity of their life cycles, which creates the risk that replacement components may be unavailable or available only at increased costs. We have experienced COVID-related short-term disruptions in the supply chain which have periodically resulted in extended lead times and cost increases, and the long term impacts of these disruptions are uncertain.possible. In addition, our reliance on sole or limited sources of supply of raw materials and components in each of our segments could adversely affect our business, as described in the preceding Risk Factor.

Many of our A&D segment products are sold to be components in our customers'customers’ end products. If a customer discontinues a certain end-product line and we are unable to develop and successfully market replacement products there could be a significant decrease in our sales and an adverse effect on our operating results. For example, a substantial portion of PTI'sPTI’s revenue is generated from commercial aviation aftermarket sales. As certain aircraft are retired and replaced by newer aircraft, if we wereare unable to offer suitable products for the newer aircraft there could be a corresponding decrease in sales associated with our products which could adversely affect our operating results.

We have been and are currently involved as a responsible party in several ongoing investigations and remediations of contaminated third-party owned properties. In addition, environmental contamination may be discovered in the future on properties which we formerly owned or operated and for which we could be legally responsible. Future costs associated with these situations, including ones which may be currently unknown to us, are difficult to quantify but could have a significant effect on our financial condition.

In addition, acquisitions of other companies, including but not limited to those encompassed in the SM&PMaritime Acquisition,acquisition, involve numerous risks, including unexpected or unavoidable delays in consummation, possible failure to satisfy preconditions to closing or comply with post-closing terms, difficulties in the integration of the operations, technologies and products of the acquired companies, the potential exposure to unanticipated and undisclosed liabilities, the potential that expected benefits or synergies are not realized and that operating costs increase, the potential loss of key personnel, suppliers or customers of acquired businesses and the diversion of Management’s time and attention from other business concerns. Although we attempt to identify and evaluate the risks inherent in any acquisition, we may not properly ascertain or mitigate all such risks, and our failure to do so could have a material adverse effect on our business.

Provisions in our articles of incorporation, bylaws and Missouri lawcorporate laws could make us less attractive to investors or make it more difficult for a third party to acquire usus, and could discourage acquisition bids or a change of control, and couldthereby adversely affect the market price of our common stock.

Our articles of incorporation and bylaws contain certain provisions which could make us less attractive to prospective investors or discourage potential hostile takeover attempts, including: a limitation on the shareholders’ ability to call special meetings of shareholders; advance notice requirements to nominate candidates for election as directors or to propose matters for action at a meeting of shareholders; a classified board of directors, which means that only approximately one-third of our directors are elected each year; and the authority of our board of directors to issue, without shareholder approval, preferred stock with such terms as the board may determine. In addition, the laws of Missouri, in which we are incorporated, require a two-thirds vote of outstanding shares to approve mergers or certain other major corporate transactions, rather than a simple majority as in some other states such as Delaware. These provisions could reduce major shareholders’ influence over corporate policy or impede a merger or other change of control not approved by our board of directors, which could discourage takeover attemptsinvestors and in some circumstances reduce the market price of our common stock.

A&D. PTI, VACCOPTI and Crissair primarily design and manufacture specialty filtration products, including hydraulic filter elements and fluid control devices used in commercial and defense aerospace applications, uniqueand filterminiature mechanisms used in micro-propulsionelectro-explosive devices for satellitesmilitary aircraft ejection seats and custommissile designedarming filters for manned aircraft and submarines. Globe designs, develops and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels.devices. Mayday manufactures mission-critical bushings, pins, sleeves and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. Globe designs, develops and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels. Maritime is an established, long-standing business providing mission-critical signature and power management solutions for the US and UK naval defense markets.

Test. ETS-Lindgren is an industry leader in providing its customers with the ability to identify, measure and control magnetic,magnetic and electromagnetic and acoustic energy.

Results of Continuing Operations

Net sales increased $70.8$176.3 million, or 7.4%,19.2%, to $1,026.8$1,095.4 million in 20242025 from $956.0$919.1 million in 2023.2024. The increase in net sales in 20242025 as compared to 20232024 was mainly due to a $55.8$137.7 million increase in the A&D segment andsegment, a $26.8$10.9 million increase in the USG segment, partiallyand offseta by an $11.8$27.7 million decreaseincrease in the Test segment.

The $137.7 million, or 40.4%, increase in net sales in 2025 as compared to 2024 was mainly due to a $94.1 million increase in navy revenues and a $39.8 million increase in commercial aerospace revenues, partially offset by a $5.2 million decrease in defense aerospace revenues. By subsidiary, the $55.8$137.7 million increase in net sales in 20242025 as compared to 20232024 was due to an $18.1$8.1 million increase in net sales at PTI, a $12.6$13.3 million increase in net sales at Globe, a $10.1$19.6 million increase in net sales at Crissair, a $7.6$1.5 million increase in net sales at Mayday and a $7.4$95.2 million increase in net sales atcontribution VACCO.from the current year acquisition of Maritime.

The $26.8$10.9 million, or 7.8%,3.0%, increase in net sales in 20242025 as compared to 20232024 was mainly due to ana $18.9$17.8 million increase in net sales at Doble mainly due to higher shipments of conditionoffline monitoringand protection testing products and service revenuerevenue, partially offset by lower shipments of protection testing products, and a $7.9$7.0 million increasedecrease in net sales at NRG driven by higherlower shipments of solar products.and wind products due to renewables market weakness.

The $11.8$27.7 million, or 5.3%,13.2%, decreaseincrease in net sales in 20242025 as compared to 20232024 was due to ana $11.8$15.4 million decreaseincrease in sales from the Company’s U.S. operationsoperations, an $8.8 million increase in sales from the Company’s European operations, and a $2.8$3.5 million decreaseincrease in sales from the Company’s Asian operations due to lower wireless, filters and acoustic volumes and timing ofhigher test and measurementmeasurement, chamberindustrial projectsshielding, medical services and filters volumes partially offset by alower $2.8wireless million increase in sales from the segment’s European operations. MPE contributed $10 million in revenue in 2024 since the date of acquisition.volumes.

New orders received from continuing operations were $1,133.4$1,564.8 million in 20242025 and $1,033.3$999.8 million in 2023.2024. Order backlog was $879.0$1,133.6 million at September 30, 2024,2025, compared to order backlog from continuing operations of $772.4$664.2 million at September 30, 2023.2024. Orders are entered into backlog as firm purchase order commitments are received.

Selling, general and administrative (SG&A) expenses were $224.0$234.6 million, or 21.8%21.4% of net sales, in 2024,2025, and $217.1$208.2 million, or 22.7% of net sales, in 2023.2024. The $6.9$26.4 million increase in SG&A expenses in 20242025 as compared to 20232024 was mainly due to an increase within the A&D segment (due to the Maritime acquisition) and the Test and USG segments due to higher sales;sales, inflationary impacts;impacts, and MPEan increase at Corporate mainly due to acquisition impacts.costs.

Amortization of intangible assets was $53.3 million in 2025 and $32.8 million in 2024 and $29.0 million in 2023,2024, including $20.7$41.4 million and $18.8$20.7 million of amortization of acquired intangible assets in 20242025 and 2023,2024, respectively, related to our acquisitions. The amortization of acquired intangible assets related to acquisitions is included in the Corporate segment’s results. The remaining amortization expenses relate to other identifiable intangible assets (primarily software, patents and licenses), which are included in the respective segment’s operating results. The increase in amortization expense in 20242025 as compared to 20232024 was mainly due to an increase in amortization of capitalized software and amortization of intangible assets related to the MPEMaritime acquisition.

Other expenses, net, waswere $2.1$2.8 million in 2024,2025, compared to $1.4 million in 2024. The principal component of other expenses, net, ofin $1.92025 was approximately $1.0 million inof 2023.restructuring charges within the USG and Test segments (mainly severance charges) and $1.3 million of UK stamp duty charges due to the Maritime acquisition. The principal component of other expenses, net, in 2024 was approximately $1.8$1.0 million of restructuring costs within the A&D, USG and Test segments (mainly severance charges). There were no individually significant items in other expenses, net in 2023.

The information reported herein includes the financial measures Diluted EPS As Adjusted, which we define as Diluted EPS excluding the per-share net impact of discrete acquisition related costs at Corporate, purchase accounting charges related to the Maritime acquisition, restructuring charges within the Test and USG segments, and acquisition related amortization in 2025; and discrete debt financing and acquisition related costs at Corporate primarily related to the pendingMaritime SM&P Acquisition,acquisition, restructuring charges in the A&D, Test and USG segments (primarily severance) and, purchase accounting charges related to the MPE acquisition in 2024; discrete compensation and acquisition related costs at Corporate, purchase accounting charges related to the CMT acquisition, and restructuring charges primarily within the A&D segment (primarily severance)amortization in 2023; and the per-share net impact of discrete compensation and acquisition related costs, severance charges primarily within the A&D segment, and purchase accounting charges related to the Company’s acquisitions (Altanova and NEco) in 20222024; EBIT, which we define as earnings before interest and taxes; and EBIT margin, which we define as EBIT expressed as a percentage of net sales. Diluted EPS –As Adjusted, EBIT on a consolidated basis, and EBIT margin on a consolidated basis are not recognized in accordance with U.S. generally accepted accounting principles (GAAP).GAAP. However, we believe that EBITthese and EBIT marginmeasures provide investors and Management with valuable information for assessing our operating results. Management evaluates the performance of our operating segments based on EBIT and believes that EBIT is useful to investors to demonstrate the operational profitability of our business segments by excluding interest and taxes, which are generally accounted for across the entire company on a consolidated basis. EBIT is also one of the measures Management uses to determine resource allocations and incentive compensation. We believe that the presentation of EBIT, EBIT margin and Diluted EPS –As Adjusted provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

The reconciliation of EBIT from continuing operations to a GAAP financial measure is as follows:

The $13.1$39.3 million, or 18.3%,45.8%, increase in EBIT in 20242025 as compared to 20232024 was primarily due to leverage on higher sales volumes and price increases at Mayday, PTI, Crissair and Globe and the contribution from the current year acquisition of Maritime partially offset by a decrease in EBIT at VACCO due to margin erosion on certain space development contracts, revenue mix and inflationary pressures. EBIT in 20242025 was negatively impacted by $1.2$4.5 million inprimarily restructuringconsisting of inventory step-up charges (mainlyand severance).UK stamp duty charges related to the Maritime acquisition.

The $9.2$8.8 million, or 12.0%,10.2%, increase in EBIT in 20242025 as compared to 20232024 was mainly due to leverage on higher sales volumes at Doble and NRG with a favorable product mix and price increases, partially offset by inflationarylower pressuressales at NRG and higherinflationary commissions related to increased sales.pressures. EBIT in 20242025 was negatively impacted by $0.2$0.4 million of restructuring charges (mainly severance).

The $3.8$5.5 million, or 11.7%,19.2%, decreaseincrease in EBIT in 20242025 as compared to 20232024 was primarily due to aan decreaseincrease in EBIT from the segment’s U.S. and Asian operations and inflationary pressure, partially offset by leverage on higher sales volumes from the segment’s European operations and price increasesincreases, andpartially costoffset reductionby actionsa decrease in EBIT from the segment’sCompany’s U.S.Asian operations.operations, inflationary pressures and unfavorable mix. EBIT in 20242025 was negatively impacted by $0.3 million of inventory step-up charges related to the MPE acquisition and $0.2$0.5 million of restructuring charges (mainly severance).

Corporate operating chargescosts included in 20242025 consolidated EBIT increased to $54.1$83.5 million as compared to $53.0$54.1 million in 20232024. The increase in Corporate costs in 2025 as compared to 2024 was mainly due to a $21.4 million increase in acquisition related amortization expense and $5.5 million of acquisition costs, both primarily due to the Maritime acquisition, as well as an increase in professionalshare-based fees,compensation including acquisition related costs, and amortization expense of acquired intangible assets related to the Company’s recent acquisition of MPE.costs.

Interest expense, net was $15.2$17.5 million and $8.8$15.2 million in 20242025 and 2023,2024, respectively. The increase in interest expense in 20242025 was mainly due to thehigher $3.1average millionoutstanding of debt financing costsborrowings related to the pendingMaritime SM&P Acquisition, higher average interest rates and higher outstanding borrowings. The weighted average interest rates were 6.72%acquisition in 2024April compared to 5.82% in 2023.2025. Average outstanding borrowings were $265 million in 2025 compared to $167 million in 2024 compared to $140 million in 2023.2024.

The effective tax rates from continuing operations for 2025 and 2024 and 2023 were 21.6%23.9% and 22.2%,21.6%, respectively. The decreaseincrease in the 20242025 effective tax rate as compared to 20232024 was primarily due to aan decreaseincrease in non-deductible executive compensationcompensation, partiallyincreased offsetnon-deductible bytransaction ancosts increaseand a reduction in statethe foreign-derived intangible income tax expense.deduction.

Cash repatriated to the U.S. is generally not subject to U.S. federal income taxes. No provision has been made in 20242025 for foreign withholding or any applicable U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries where these earnings are considered indefinitely invested or otherwise retained for continuing international operations. Determination of the amount of taxes that might be paid on these undistributed earnings if eventually remitted is not practicable.

Our overall financial position and liquidity are strong. Working capital from continuing operations (current assets less current liabilities) increaseddecreased to $318.8$180.4 million at September 30, 20242025 from $266.4$283.9 million at September 30, 2023.2024. The main driver of the decrease was an increase in contract liabilities of $135.7 million primarily due to the Maritime acquisition and increases at Globe and Doble. Accounts receivable increased by $42.1$31.5 million during 20242025 mainly due to aan $20.4approximately $30.6 million increase within the A&D segment,segment (primarily due to the Maritime acquisition), a $12.2$5.8 million increase within the Test segment, partially offset by a $4.9 million decrease within the USG segment. Inventories increased by $22.3 million during 2025 mainly due to a $14.7 million increase within the A&D segment (primarily due to the Maritime acquisition), a $5.7 million increase within the Test segment and a $9.5 million increase within the USG segment, driven by timing and higher sales volumes in the current year. Inventories increased by $25.1 million during 2024 mainly due to a $14.1 million increase within the A&D segment and a $10.8$2.0 million increase within the USG segment resulting primarily from the timing of finished goods and receipt of raw materials to meet anticipated demand and an increase in work in process inventories due to timing of manufacturing existing orders. Accounts payable increased by $11.4 million during 2024 mainly due to a $4.5 million increase within the A&D segment, a $3.1 million increase within the Test segment, a $2.3 million increase within the USG segment, and a $1.5 million increase at Corporate due to the timing of payments.

Net cash provided by operating activities from continuing operations was $127.5$200.4 million in 20242025 and $76.9$121.6 million in 2023.2024. The increase in net cash provided by operating activities in 20242025 as compared to 20232024 was mainly driven by higher net earnings and lower working capital requirements.

Net cash used in investing activities from continuing operations was $104.6$524.2 million in 20242025 and $52.5$96.6 million in 2023.2024. The increase in 20242025 as compared to 20232024 was mainly due to the MPEMaritime acquisition incompleted theon currentApril year.25, 2025. Capital expenditures from continuing operations were $36.2$36.3 million in 20242025 and $22.4$28.3 million in 2023.2024. The increase in 20242025 as compared to 20232024 was mainly due to anmodest increaseincreases inacross buildingall improvementsthree andbusiness machinery & equipment within the A&D segment.segments. In addition, the Company incurred expenditures for capitalized software and other of $12.1$15.8 million in 20242025 and $12.4$11.9 million in 2023.2024.

Net cash provided (used) by financing activities from continuing operations was $0.8$49.5 million in 20242025 and $78.3$(0.8) million in 2023,2024, primarily due to the increase in debt borrowings during 2024.2025.

Cash flow from operations and borrowings under the Credit Facility and the Incremental Facility is expected to provide adequate resources to meet our capital requirements and operational needs both for the next 12 months and for the foreseeable future.

The impact of adjustments in contract estimates on our operating earnings can be reflected in either revenue or operating costs and expenses. The aggregate impact of adjustments in contract estimates decreasedincreased our earnings beforeafter income tax from continuing operations and diluted earnings per share by approximately $13$2.6 million and $0.38$0.10 per share, respectively, in 2024.2025.

The following discussion refers to the Company’s results from continuing operations, except where noted. References to the secondthird quarters of 2026 and 2025 represent the three-month periods ended MarchJune 31,30, 2026 and 2025, respectively.

In the secondthird quarter of 2026, sales, net earnings and diluted earnings per share from continuing operations were $309.3$339.0 million, $33.6$32.7 million and $1.29$1.26 per share, respectively, compared to $231.8$296.3 million, $26.4$24.8 million and $1.02$0.96 per share, respectively, in the secondthird quarter of 2025. In the first sixnine months of 2026, sales, net earnings and diluted earnings per share were $599.0$938.0 million, $62.2$95.0 million and $2.40$3.66 per share, respectively, compared to $446.4$742.7 million, $46.7$71.4 million and $1.81$2.76 per share, respectively, in the first sixnine months of 2025.

In the secondthird quarter of 2026, net sales of $309.3$339.0 million were $77.5$42.7 million, or 33.4%,14.4%, higher than the $231.8$296.3 million in the secondthird quarter of 2025. In the first sixnine months of 2026, net sales of $599.0$938.0 million were $152.6$195.3 million, or 34.2%,26.3%, higher than the $446.4$742.7 million in the first sixnine months of 2025. The increase in net sales in the secondthird quarter of 2026 as compared to the secondthird quarter of 2025 was due to a $60.7$31.9 million increase in the A&D segment, a $14.1$7.6 million increase in the USG segment and a $3.2 million increase in the Test segment and a $2.7 million increase in the USG segment. The increase in net sales in the first sixnine months of 2026 as compared to the first sixnine months of 2025 was due to a $122.6$154.5 million increase in the A&D segment, a $26.4$29.6 million increase in the Test segment and a $3.6$11.2 million increase in the USG segment.

In the secondthird quarter of 2026, net sales of $150.3$168.2 million were $60.7$31.9 million, or 67.7%,23.4%, higher than the $89.6$136.3 million in the secondthird quarter of 2025. In the first sixnine months of 2026, net sales of $294.1$462.3 million were $122.6$154.5 million, or 71.5%,50.2%, higher than the $171.5$307.8 million in the first sixnine months of 2025. The sales increase in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 was mainly due to a $44.3$22.3 million increase in navy revenues and a $14.0$7.9 million increase in aerospace revenues (defense and commercial). Maritime contributed $47.8$22.7 million of revenue growth in the secondthird quarter of 2026. The sales increase in the first sixnine months of 2026 compared to the first sixnine months of 2025 was mainly due to a $88.5$110.9 million increase in navy revenues,revenues and a $29.8$37.7 million increase in aerospace revenues (defense and commercial) and a $3.3 million increase in industrial shipments.. Maritime contributed $98.4$121.1 million of revenue growth in the first sixnine months of 2026.

In the secondthird quarter of 2026, net sales of $93.5$100.0 million were $2.7$7.6 million, or 3.0%,8.2%, higher than the $90.8$92.4 million in the secondthird quarter of 2025. In the first sixnine months of 2026, net sales of $181.0$281.0 million were $3.6$11.2 million, or 2.0%,4.2%, higher than the $177.4$269.8 million in the first sixnine months of 2025. The increase in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 was due to an $8.4$12.9 million increase in net sales at Doble driven by higher sales of protection testing, offline productstest equipment and services, partially offset by a $5.7$5.3 million decrease in net sales at NRG driven by lower shipments of solar and wind products due to weakness in the renewables market. The increase in the first sixnine months of 2026 compared to the corresponding period of 2025 was due to a $12.5$25.5 million increase in net sales at Doble driven by higher sales of condition monitoringmonitoring, offline, protection testing products and offline products,services, partially offset by ana $8.9$14.3 million decrease in net sales at NRG for the reasons mentioned above.

In the secondthird quarter of 2026, net sales of $65.5$70.9 million were $14.1$3.2 million, or 27.4%,4.7%, higher than the $51.4$67.7 million in the secondthird quarter of 2025. In the first sixnine months of 2026, net sales of $123.8$194.7 million were $26.4$29.6 million, or 27.1%,17.9%, higher than the $97.4$165.1 million in the first sixnine months of 2025. The increase in the secondthird quarter of 2026 as compared to the secondthird quarter of 2025 was due to a $10.1$7.1 million increase in sales from the segment’s U.S. and European operations due to higher Test and Measurement, medical and industrial shielding, and filters volumes, partially offset by a $3.9 million decrease from the segment’s Asian operations. The increase in the first nine months of 2026 compared to the first nine months of 2025 was due to a $27.2 million increase in sales from the segment’s U.S. operations, a $2.8 million increase in sales from the segment’s Asian operations, and a $1.2 million increase from the segment’s European operations; due to higher Test and Measurement and filters volumes. The increase in the first six months of 2026 compared to the first six months of 2025 was due to a $20.2 million increase in sales from the segment’s U.S. operations, a $4.2$4.3 million increase from the segment’s European operations andfor the reasons mentioned above, partially offset by a $2.0$1.9 million increasedecrease in sales from the segment’s Asian operations for the reasons mentioned above.operations.

Backlog was $1,470.0$1,540.5 million at MarchJune 31,30, 2026 compared with $1,133.6 million at September 30, 2025. The Company received new orders totaling $378.2$409.5 million in the secondthird quarter of 2026 compared to $265.7$749.1 million in the secondthird quarter of 2025. Of the new orders received in the secondthird quarter of 2026, $183.8$195.6 million related to A&D products, $101.3$126.9 million related to USG products, and $93.1$87.0 million related to Test products. Of the new orders received in the secondthird quarter of 2025, $96.5$582.4 million related to A&D products,products $92.2(including $364.2 million of Maritime acquired backlog), $105.5 million related to USG products, and $77.0$61.2 million related to Test products.

The Company received new orders totaling $935.4$1,344.9 million in the first sixnine months of 2026 compared to $494.9$1,243.9 million in the first sixnine months of 2025. Of the new orders received in the first sixnine months of 2026, $566.1$761.8 million related to A&D products, $200.1$326.9 million related to USG products, and $169.2$256.2 million related to Test products. Of the new orders received in the first sixnine months of 2025, $171.3$753.7 million related to A&D products,products $181.8(including $364.2 million of Maritime acquired backlog), $287.3 million related to USG products, and $141.8$202.9 million related to Test products.

Selling, general and administrative (SG&A) expenses for the secondthird quarter of 2026 were $62.8$71.0 million (20.3%20.9% of net sales), compared with $54.3$62.0 million (23.4%20.9% of net sales) for the secondthird quarter of 2025. For the first sixnine months of 2026, SG&A expenses were $124.0$195.0 million (20.7%20.8% of net sales) compared to $109.3$171.3 million (24.5%23.1% of net sales) for the first sixnine months of 2025. The increase in SG&A in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly due to an increase within the A&D segment due to the Maritime acquisition; increased expenses at all three business segments primarily related to higher sales and inflationary impacts and an increase at Corporate mainly due to acquisition costs.costs SG&Arelated as a percentage of net sales decreased into the secondpending quarterMegger and first six months of 2026 within all three business segments.acquisition.

Amortization of intangible assets was $20.4$20.3 million and $40.7$61.1 million for the secondthird quarter and first sixnine months of 2026, respectively, compared to $8.0$16.8 million and $16.0$32.7 million for the corresponding periods of 2025. Amortization expenses consist of amortization of acquired intangible assets from acquisitions and other identifiable intangible assets (primarily software). The increase in amortization expense in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly due to an increase in amortization of intangible assets related to the Maritime acquisition.

Other expenses, net, was $1.8$0.5 million in the secondthird quarter of 2026 compared with $0.4$2.2 million in the secondthird quarter of 2025. Other expenses, net, was $1.8$2.3 million in the first sixnine months of 2026 compared towith other (income) of ($0.3)$1.9 million in the first sixnine months of 2025. The principal components of other expenses, net, in the secondthird quarter and first six months of 2026 included $1.3$0.7 million of restructuring charges within the Test segment due to the exit of the acoustics product line (primarily asset write-offs, contract termination charges and severancewrite-offs), and $0.6$0.3 million of restructuring charges (primarily severance) within the USG segment. ThereThe wereprincipal nocomponents individually significant items inof other expenses (income),expenses, net, in the secondfirst quarternine months of 2025.2026 included $2.0 million of restructuring charges within the Test segment due to the exit of the acoustics product line and $0.9 million of restructuring charges (primarily severance) within the USG segment. The principal component of other expenses, net, in the third quarter and first sixnine months of 2025 was approximately $0.5$1.3 million of restructuringUK chargesstamp (primarilyduties severance) withinon the TestMaritime and USG segments.acquisition.

The Company evaluates the performance of its operating segments based on EBIT, and provides EBIT on a consolidated basis. EBIT is a non-GAAP financial measure. Please refer to the discussion of non-GAAP financial measures in Note 6 to the condensed Consolidated Financial Statements, above. EBIT was $46.3$49.7 million (15.0%14.6% of net sales) for the secondthird quarter of 2026 compared to $36.6$41.0 million (15.8%13.8% of net sales) for the secondthird quarter of 2025. For the first sixnine months of 2026, EBIT was $84.6$134.3 million (14.1%14.3% of net sales) compared to $64.7$105.7 million (14.5%14.2% of net sales) for the first sixnine months of 2025.

The following table presents a reconciliation of EBIT from continuing operations to net earnings.earnings from continuing operations.

EBIT in the secondthird quarter of 2026 was $43.0$50.4 million (28.6%30.0% of net sales) compared to $24.2$36.6 million (27.0%26.8% of net sales) in the secondthird quarter of 2025. EBIT in the first sixnine months of 2026 was $81.0$131.4 million (27.5%28.4% of net sales) compared to $41.7$78.2 million (24.3%25.4% of net sales) in the first sixnine months of 2025. The increase in EBIT in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly driven by leverage on higher sales volumes as mentioned above, and price increases, partially offset by inflationary pressures and unfavorable mix. EBIT in the third quarter and first nine months of 2025 was negatively impacted by $2.7 million of inventory step-up charges and stamp duty charges related to the Maritime acquisition.

EBIT in the secondthird quarter of 2026 was $22.5$22.0 million (24.0%22.0% of net sales) compared to $20.8 million (22.9% of net sales) in the second quarter of 2025. EBIT in the first six months of 2026 was $42.0 million (23.2% of net sales) compared to $41.3$21.5 million (23.3% of net sales) in the third quarter of 2025. EBIT in the first sixnine months of 2026 was $64.0 million (22.8% of net sales) compared to $62.8 million (23.2% of net sales) in the first nine months of 2025. The increase in EBIT in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly driven by leverage on higher sales volumes at Doble and price increases and mix, partially offset by lower sales volumes at NRG, and inflationary pressures. EBIT was negatively impacted by $0.6$0.9 million and $0.3 million in the first nine months of 2026 and 2025, respectively, by restructuring charges (primarily severance) inand theacquisition first six months of 2026.costs.

EBIT in the secondthird quarter of 2026 was $8.8$10.9 million (13.4%15.4% of net sales) compared to $6.4$10.7 million (12.4%15.9% of net sales) in the secondthird quarter of 2025. EBIT in the first sixnine months of 2026 was $16.8$27.7 million (13.6%14.2% of net sales) compared to $10.8$21.5 million (11.1%13.0% of net sales) in the first sixnine months of 2025. The increase in EBIT in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly due to higher sales volumes and price increases partially offset by inflationary pressures. EBIT was negatively impacted by $1.3$2.1 million and $0.4 million in the first sixnine months of 2026 and 2025, respectively, by restructuring charges (primarily asset write-offs, contract termination charges and severance).

Corporate costs included in EBIT were $28.0$33.6 million and $55.2$88.8 million in the secondthird quarter and first sixnine months of 2026, respectively, compared to $14.8$27.9 million and $29.1$56.9 million in the corresponding periods of 2025. The increase in Corporate costs in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly due to an increase in acquisition related amortization due to the Maritime acquisition, and an increase in share-based compensation costs and acquisition related costs.costs related to the pending Megger acquisition.

Interest expense was $2.4$8.7 million and $5.3$14.0 million in the secondthird quarter and first sixnine months of 2026, respectively, and $2.2$7.9 million and $4.5$12.4 million in the corresponding periods of 2025. The increase in interest expense in the secondthird quarter and first sixnine months of 2026 compared to the corresponding periods of 2025 was mainly due to higherapproximately $7 million of debt financing costs incurred in the third quarter of 2026 related to the pending Megger acquisition, partially offset by lower average outstanding borrowings due to the prior year Maritime acquisition inand April 2025. The weightedlower average outstandinginterest borrowings were $168 million and $170 million for the three and six-month periods ending March 31, 2026 and $100 million and $111 million for the three and six-month periods ending March 31, 2025.rates.

The secondthird quarter 2026 effective income tax rate from continuing operations was 23.5%20.1% compared to 23.3%25.1% in the secondthird quarter of 2025. The effective income tax rate from continuing operations in the first sixnine months of 2026 was 21.5%21.0% compared to 22.5%23.4% for the first sixnine months of 2025. Income tax expense in the third quarter and first sixnine months of 2026 was favorably impacted by additionalreturn-to-provision adjustments recognized upon finalization of the 2025 federal income tax benefitsreturn, relatedincluding an increase to the vestingfederal research credit. Income tax expense in the third quarter and first nine months of share-based2025 compensationwas awards.unfavorably impacted by income tax consequences associated with the acquisition of Maritime, including non-deductible transaction costs.

The Company’s overall financial position and liquidity remain strong. Working capital (current assets less current liabilities) increased to $226.4$208.8 million at MarchJune 31,30, 2026 from $180.4 million at September 30, 2025. Inventories increased $19.3$22.7 million during this period due to a $7.7$14.9 million increase within the A&D segment, and a $9.1$9.2 million increase within the USG segment; andboth aincreases $2.5due millionto increase within the Test segment primarily from an increase inhigher work-in-process and raw materials inventories due to timing of manufacturing existing orders.orders, partially offset by a $1.4 million decrease within the Test segment. Contract assets increased $12.8$36.9 million primarily within the A&D segment (Maritime) due to timing. Contract liabilities increased $52.8$71.5 million primarily within the A&D segment (Globe and Maritime) due to timing of payments received from customers.

Net cash provided by operating activities from continuing operations was $134.6$193.4 million and $46.3$88.3 million in the first sixnine months of 2026 and 2025, respectively. The increase in net cash provided by operating activities in the first sixnine months of 2026 as compared to the first sixnine months of 2025 was mainly driven by lower working capital requirements and higher earnings.

Capital expenditures for continuing operations were $13.1$24.6 million and $14.9$24.2 million in the first sixnine months of 2026 and 2025, respectively. In addition, the Company incurred expenditures for capitalized software and other intangible assets from continuing operations of $4.8$7.9 million and $5.5$13.0 million in the first sixnine months of 2026 and 2025, respectively.

At MarchJune 31,30, 2026, the Company had approximately $440$442 million available to borrow under its bank credit facility, a $250 million increase option, and $92.3$73.2 million cash on hand. At MarchJune 31,30, 2026, the Company had $145$85 million of outstanding borrowings under the Credit Facility and Incremental Facility in addition to outstanding letters of credit of $14.5$12.7 million. Cash flow from operations and borrowings under the Company’s credit facility are expected to meet the Company’s capital requirements and operational needs for the foreseeable future. The Company’s ability to access the additional $250 million increase option of the credit facility is subject to acceptance by participating or other outside banks.

AcquisitionAcquisitions

During the first sixnine months of fiscal 2026, the Company paid $10.2 million consisting of a $5.1 million working capital settlement and a $5.1 million group tax relief payment, both related to the Maritime acquisition.

A dividend of $0.08 per share, totaling $2.1 million, was paid on October 16, 2025 to stockholders of record as of October 2, 2025. A dividend of $0.08 per share, totaling $2.1 million, was paid on January 16, 2026 to stockholders of record as of January 2, 2026. Subsequent to March 31, 2026, a quarterlyA dividend of $0.08 per share, totaling $2.1 million, was paid on April 17, 2026 to stockholders of record as of April 2, 2026. Subsequent to June 30, 2026, a quarterly dividend of $0.08 per share, totaling $2.1 million, was paid on July 17, 2026 to stockholders of record as of July 2, 2026.