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

On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework. A significant number of countries have enacted portions, or all, of the OECD proposal with effective dates in 2024 and 2025 for different aspects of the directive, with many additional countries expected to implement similar legislation with varying effective dates in the future. In 2024,January 2026, the OECD issued additional guidance, including a safe harbor framework for certain U.S. parented groups that is expected to largely reduce the impact of Pillar Two didfor the Company. Even with this safe harbor, the Company could still be subject to local minimum tax regimes in countries that have adopted these rules. Pillar Two has not havehad a material impact on the Company’s income tax liability, provision for income taxes, or effective tax rate, nor does the Company expect a material impact in the future.

In the second quarter of 2022, the Company concluded that Turkey representsand aArgentina represent highly inflationary economyeconomies as itstheir three-year cumulative inflation rate exceeded 100 percent. As a result, the Company started remeasuringremeasures the financial statements for the Company’sCompany's Turkish and Argentinian operations in accordance with the highly inflationary accounting rules in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 830 "Foreign Currency Matters" as of the beginning of the second quarter of 2022.. As a result, all gains and losses resulting from the remeasurement of the financial results of operations and other transactional foreign exchange gains and losses are reflected in earnings, which have resulted in volatility within the Company’s earnings, rather than as a component of the Company’s comprehensive income within shareholders’ equity. The Company also remeasures its financial statements for its Argentina operations in accordance with the highly inflationary accounting rules. Turkey and Argentina becomingbeing highly inflationary economies has had an adverse effect on the Company’s consolidated results of operations and further inflation may have additional adverse effects on the Company's consolidated financial position, results of operations, or cash flows in future periods.

Certain Company products are subject to regulation and government performance requirements in addition to the warranties provided by the Company. The Company’s product lines have expanded significantly and certain products are subject to government regulations and standards for manufacture, assembly, and performance in addition to the warranties provided by the Company. The Company’s failure to meet all such standards or perform in accordance with warranties could result in significant warranty or repair costs, lost sales and profits, damage to the Company’s reputation, fines or penalties from governmental organizations, and increased litigation exposure. Changes to these regulations or standards may require the Company to modify its business objectives and incur additional costs to comply. Any liabilities or penalties actually incurred could have a material adverse effect on the Company’s earnings and operating results.

Net sales in 20242025 decreasedwere 2$2.1 percentbillion and increased 5 percent, as compared to the prior year. The sales decreaseincreases in 2024 was primarilywere due to lower volumes and the negative impact of foreign currency translation, partially offset by the incremental sales impact from recent acquisitions.acquisitions, price realization and higher volumes. The Company's consolidated gross profit was $717.3$755.9 million and $717.3 million, respectively, for 2025 and 2024, anand increaseincreased of5 $20.3 millionpercent from the prior year. Diluted earnings per share was $3.86$3.22 for 2024,2025, a decrease of $0.25 or 6 percent$0.64 from the prior year. Diluted earnings per share for 2025 was negatively impacted by the pension settlement charge of $41.5 million net of tax benefit ($54.9 million gross of tax benefit) related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge.

Net sales in 20242025 were $2.0$2.1 billion and decreasedincreased 25 percent compared to the prior year. The sales growth in 2025 was due to incremental sales impact from recent acquisitions of approximately 3 percent, price realization, and favorable volumes. Sales were negatively impacted by changes in foreign exchange rates, principally due to the strengthening of the U.S. Dollar relative to the Argentine Peso, Turkish Lira and Brazilian Real. However, the Company increasesincreased prices in the local currency to offset the impact of currency devaluation in the Argentina and Turkey highly inflationary economies. As a result, the net negative impact of foreign currency exchange rates on net sales was less than 1 percent in 2024.2025.

Water Systems net sales inincreased the U.S. and Canada decreased 56 percent in 2024,2025, as compared to the prior year. In 2024,The sales ofgrowth largein dewatering2025 equipmentwas decreaseddue 41to percent,incremental sales ofimpact waterfrom treatmentrecent products increased 11 percent, salesacquisitions of groundwater pumping equipment increasedapproximately 4 percent and salesprice of all other surface pumping equipment increased 5 percent compared to 2023.realization.

Water Systems net sales in markets outside the U.S. and Canada increased 410 percent in 2024,2025, as compared to the prior year. SalesThe decreasedsales 4increase percentcompared into 2024prior year period was primarily due to the negativeincremental sales impact from foreignrecent exchange rates, as compared to prior year. In 2024 excluding the impact of foreign currency translation, sales increased in all three major regions: EMEA, Latin America and Asia Pacific.acquisitions.

Energy Systems net sales decreasedincreased 89 percent in 2024,2025, as compared to the prior year. This sales declineincrease was primarily due to lowerprice realization and favorable volumes.

Energy Systems net sales in the U.S. and Canada decreasedincreased 38 percent in 2024,2025, as compared to the prior year. The increase was broad based across all major product lines, led by fuel pumping systems. Outside the U.S. and Canada, Energy Systems sales decreasedincreased 1813 percent in 2024,2025, as compared to the prior year.year, Thedue decreasesprimarily wereto acrosssales allgrowth productin lines.the Asia Pacific region.

Distribution net sales increased 2 percent in 2024,2025, as compared to the prior year. The Distribution segment sales increase was primarilyincreased due to thehigher incremental sales impact from a recent acquisition, which favorably impacted net sales by 3 percent, partially offset by the negative impact of commodity pricing declinesvolumes and unfavorableprice weather.realization.

The gross profit margin ratio was 35.5 percent and 33.8 percent in 20242025 and 2023,2024, respectively. The grossGross profit marginhas wasremained favorablyconsistent impactedwith inprior 2024year primarily due to pricing and volume increases offset by cost management, including lower freightincreased costs inrelated Waterto Systems and Energy Systems, and a favorable product and geographic sales mix shift.tariffs.

SG&A expenses were $486.2 million in 2025 compared to $470.1 million in 2024 compared to $433.5 million in 2023.2024. SG&A expenses increased in 20242025 primarily due to higher employee compensation costs, including incremental expenses associated with the Company's CEO transition, and the incremental expense impact offrom recent acquisitions.acquisitions and higher employee compensation costs. The SG&A expenses ratio was 23.322.8 percent and 21.023.3 percent in 20242025 and 2023,2024, respectively.

Operating income decreasedin 72025 percentwas $268.9 million and $243.6 million in 2024, an increase of 10 percent, as compared to the prior year.

Water Systems operating income in 20242025 was $197.9$207.2 million, an increase of $1.3$9.3 million as compared to the prior year. The 2024increase in operating income was primarily due to higher sales. The 2025 operating income margin was 16.716.5 percent, ana increasedecrease of 4020 basis points from 16.316.7 percent in 2023.2024. OperatingThe decrease in operating income and operating margin increased in 2024was primarily due to priceincremental realization,expenses costassociated managementwith recent acquisitions and aan favorableunfavorable product and geographic sales mix shift.

Energy Systems operating income in 20242025 was $93.6$99.1 million, an increase of $0.9$5.5 million as compared to the prior year. The 2024increase was primarily due to higher sales. The 2025 operating income margin was 34.233.1 percent, ana increasedecrease of 290110 basis points from 31.334.2 percent in 2023.2024. Operating income and operating margin increaseddecreased primarily due to ahigher favorabletariff cost and an unfavorable geographic sales mix of sales, price realization and cost management.shift.

Distribution operating income in 20242025 was $24.3$39.8 million, aan decreaseincrease of $10.0$15.5 million as compared to the prior-yearprior period.year. The 20242025 operating income margin was 3.55.7 percent, aan decreaseincrease of 160210 basis points from 5.13.5 percent in 2023.2024. Operating income and operating income marginmargins decreased in 2024increased primarily due to the negative impact onhigher sales fromand wetreduced weatherSG&A acrossexpenses muchas a result of cost actions implemented in 2024 to improve the performance of the United States, decreases in pricing of commodity-based products sold through the business and increased SG&A costs.segment.

Operating income-corporate expenses and eliminationsincome-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses. The intersegment profit elimination impact in 20242025 compared to 2023the prior year of 2024 was an unfavorable $2.7$2.0 million. The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer. General and administrative expenses increased $8.3$3.0 million,million compared to the prior year. The increase wasyear, primarily driven bydue to higher employee compensation costs, including incremental expenses associated with the Company’s CEOexecutive transition.leadership transitions.

Interest expense was $10.6 million and $6.3 million in 20242025 and $11.8 million in 2023,2024, respectively. The decreaseincrease in 20242025 was primarily driven by lowerhigher average borrowingsamount inof 2024.outstanding debt.

Other IncomeIncome, or Expensenet

Foreign currency-based transactions produced an expense of $6.8$9.3 million and an expense of $6.8 in 20242025 and $12.1 million in 2023,2024, respectively. The expenseresults in 20242025 and 20232024 wasare primarily due to transaction losses associated with the Argentine Peso and Turkish Lira and Argentine Peso relative to the U.S. dollar. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent.

The provision for income taxes in2025 and 2024 and 2023 were $50.2$46.0 million and $47.5$50.2 million, respectively. The effective tax rate for 2025 was about 24 percent before and after the impact of discrete events. The effective tax rate for 2024 was about 22 percent and included a favorable benefit from discrete events of 1 percent. The effective tax rate for 2023 was about 20 percent and included a favorable benefit from discrete events of 1 percent. The effective tax rate differs from the U.S. statutory rate of 21 percent,percent primarily due to U.S. states taxes, foreign earnings taxed at rates higher than the U.S. statutory rate, U.S. state taxes, Pillar Two Global Minimum Tax, and nondeductible officer’s compensation, which were partially offset by an object exemption of foreign business profits in the Netherlands, the recognition of the U.S. foreign-derived intangible income (FDII) provisions, certain incentives, and discrete events.

In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement"). On May 15, 2024, the Company entered into Amendment No. 1 that increased the total available facility amount from lenders to $250.0 million from $200.0 million. On September 26, 2025, the Company issued and sold $75.0 million of fixed rate senior notes due September 26, 2032. As of December 31, 2024,2025, the remaining borrowing capacity on the New York Life Agreement was $175.0 million. The Company also maintains an uncommitted and unsecured note purchase and private shelf agreement with PGIM, Inc. and its affiliates (the "Prudential Agreement"). On May 15, 2024, the Company entered into Amendment No. 1 that increased the total available facility amount from lenders to $250.0 million from $150.0 million. TheOn maturitySeptember dates26, 2025, the Company issued and sold $50.0 million of bothfixed agreementsrate weresenior extendednotes fromdue JulySeptember 30,26, 2024 to May 15, 2027.2032.

Net cash provided by operating activities was $238.9 million for 2025 compared to $261.4 million for 2024 compared to $315.7 million for 2023.2024. The change in operating cash flow was primarily attributable to changes in working capital andoffset lowerby earnings.an Inincrease 2023, the Company'sin cash flow benefited from actions it took to improve working capital including inventory reductions as its supply chain resiliency and lead times improved significantly compared to 2022.earnings.

Net cash used in investing activities was $157.1 million in 2025 compared to $45.6 million in 2024 compared to $74.3 million in 2023.2024. The change in investing cash flow was primarily attributable to decreasedincreased acquisition activity in 2024.2025.

Net cash used by financing activities was $197.3 million in 2025 compared to $74.1 million in 2024 compared to $192.2 million in 2023.2024. The change in financing cash flow was primarily due to increased repurchases of Company stock, offset by higher net borrowings under the Company's credit facility in 20242025 compared to net repayments in 2023, partially offset by lower proceeds from option exercises, increased share repurchase activity and higher dividends.2024.

For information regarding recent accounting pronouncements, refer to Note 2 - Accounting Pronouncements, in the Notes to Consolidated Financial Statements in the sections entitled ""Adoption of New Accounting Standards" and "Accounting Standards Issued But Not Yet Adopted", included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.

The market value approach compares the reporting units’ current and projected financial results to entities of similar size and industry to determine the market value of the reporting unit. The income approach utilizes assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. These cash flows consider factors regarding expected future operating income and historical trends, as well as the effects of demand and competition. The future cash flows are discounted using an applicable discount rate. The Company is required to record an impairment if these assumptions and estimates change whereby the fair value of the reporting units or indefinite-lived intangible assets are below their associated carrying values.

During the fourth quarter of 2024,2025, the Company completed its annual impairment tests of goodwill and indefinite-lived trade names. The Company determined it was not more likely than not that the fair values of its reporting units were lower than their carrying values. The Company also determined the fair value of goodwill and all other indefinite-lived intangible assetsintangibles were substantially in excess of theirthe respective carrying values. Significant judgment is required to determine if an indication of impairment has taken place. Factors to be considered include the following: adverse changes in operating results, decline in strategic business plans, significantly lower future cash flows, and sustainable declines in market data such as market capitalization. A 10 percent decrease in the estimated fair value of goodwill or any of the indefinite-lived trade names would not have changed this determination. The sensitivity analysis required the use of numerous subjective assumptions, which, if actual experience varies, could result in material differences in the requirements for impairment charges. Further, an extended downturn in the economy may impact certain components of the operating segments more significantly and could result in an impairment determination.

The Company consults with its actuaries to assist with the calculation of discount rates used in its pension and post retirement plans. The discount rates used to determine domestic pension and post-retirement plan liabilities are calculated using a full yield curve approach. Market conditions have caused theThe weighted-average discount rate towas move from 4.905.48 percent last year compared to 5.484.07 percent this year for the domestic pension plans and from 4.885.47 percent last year to 5.475.04 percent this year for the postretirement health and life insurance plan. A change in the discount rate selected by the Company of 25 basis points would result in ano material change of about $0.1 million to employee benefit expense and a change of about $2.4$0.2 million of liability.

Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for management’s discussion and analysis of its financial condition and results of operations. The following is management’s discussion and analysis of the Company's financial condition and results of operations for the threesecond quarter and six months ended MarchJune 31,30, 2026 and 2025.

FirstSecond Quarter 2026 vs. 2025

Net sales in the second quarter and first quartersix months of 2026 increased 106 percent fromand 8 percent, respectively, as compared to the firstprior-year quarter of last year.periods. The sales increaseincreases was primarilywere due to higherthe incremental sales volumesimpact from recent acquisitions, volume and price realizationrealization, inand allthe threefavorable segments.impact of foreign currency translation. The Company's consolidated gross profit was $175.0$230.6 million and $405.6 million, respectively, for the second quarter and first quartersix months of 2026, an increaseincreases of $11.19 millionpercent and 8 percent, respectively, from the priorprior-year year’s first quarter. The gross profit as a percent of net sales was 35.0 percent in the first quarter of 2026 compared to 36.0 percent in the first quarter of 2025.periods. Diluted earnings per share was $1.46 and $2.23, respectively, for the firstsecond quarter ofand 2026first wassix $0.77, an increasemonths of $0.10,2026, orincreases 15of percent,$0.15 and $0.26, respectively, from the firstprior-year quarter of 2025 diluted earnings per share of $0.67.periods.

Net sales in the second quarter and first quartersix months of 2026 were $500.4 million, an increase of $45.2$622.9 million orand 10$1.1 billion, respectively, and increased 6 percent and 8 percent, respectively, as compared to 2025the firstprior-year quarter sales of $455.2 million.periods. The sales increase for the second quarter three months was primarily due to incremental sales impact from recent acquisitions of 3 percent, price and volume increases of 2 percent, and the positive impact of foreign exchange rates of 1 percent. The sales increase for the first six months was primarily due to higher sales volumes and price realization of 64 percent, positive impact of foreign exchange rates of 2 percent, and incremental sales impact from recent acquisitions of 2 percent.

Water Systems net sales were $318.0$358.5 million in the firstsecond quarter of 2026, an increase of $30.7$17.7 million or 115 percent compared to the firstsecond quarter of 2025 net sales of $287.3$340.8 million. The sales increase for the second quarter was primarily due to higher sales volumes and price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions. Water Systems net sales were $676.6 million for the first six months of 2026, an increase of $48.5 million or 8 percent compared to the first six months of 2025 net sales of $628.1 million. The sales increase for the first six months was primarily due to volume increases, price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions.

Energy Systems net sales were $71.8$80.2 million in the firstsecond quarter of 2026, an increase of $5.0$2.7 million or 73 percent compared to the firstsecond quarter of 2025 net sales of $66.8$77.5 million. Energy Systems net sales were $151.9 million for the first six months of 2026, an increase of $7.6 million or 5 percent compared to the first six months of 2025 net sales of $144.3 million. The net sales increase was primarily due to higher sales volumes and price realization.

Energy Systems net sales in the U.S. and Canada increased 31 percent in the second quarter and 2 percent in the first six months of 2026, as compared to the firstprior-year quarterperiods. ofThe 2025increase duewas to increasesprimarily in sales of fuel management systems and pumping systems. Outside the U.S. and Canada, Energy Systems net sales increased 2912 percent,percent in the second quarter and 18 percent in the first six months of 2026, as compared to the prior-year periods, due primarily to highersales salesgrowth in Asiathe Pacific.European and African regions.

Net Sales - DistributionSales-Distribution

Distribution net sales were $150.9$221.1 million in the firstsecond quarter of 2026, an increase of $9.0$21.1 million or 611 percent compared to the firstsecond quarter of 2025 net sales of $141.9$200.0 million. Distribution net sales were $372.0 million for the first six months of 2026, an increase of $30.1 million or 9 percent compared to the first six months of 2025 net sales of $341.9 million. The Distribution segmentnet sales increase was primarily due to higher sales volumes and price realization.realization Sales increased less than 1 percent in the first quarter due toand the incremental sales impact from recent acquisitions.

The gross profit margin ratio was 35.037.0 percent and 36.1 percent in 2026the second quarter and first six months of 2026, respectively, and 36.1 percent and 36.0 percent in firstthe second quarter and first six months of 2025.2025, respectively. The gross profit margin was unfavorablyfavorably impacted in the second quarter by tariff refunds while the first quartersix months of 2026 was impacted by higher material costs, primarily tariff costs, and an unfavorable product and geographic sales mix shift.

SG&A expenses were $123.0$132.1 million in the second quarter and $255.1 million in the first quartersix months of 2026 compared to $119.6$123.5 million in the second quarter and $243.2 million in the first quartersix months of 2025. TheSG&A increaseexpenses wasincreased primarilyin duethe tosecond quarter and first six months of 2026 from the incremental expense impact fromof recent acquisitions. The SG&A expenses ratio (SG&A as a percentpercentage of net sales) was 24.621.2 percent and 22.7 percent in the firstsecond quarter and first six months of 20262026, respectively, and 26.321.0 percent and 23.3 percent in the firstsecond quarter and first six months of 2025.2025, respectively.

Energy Systems operating income was $24.2 million in the firstsecond quarter and first six months of 2026,2026 was $27.9 million and $52.0 million, respectively, a decrease of $1.2 million and an increase of $2.3$1.0 millionmillion, respectively, as compared to the firstprior-year quarter of 2025. Operating income increased in Energy Systems primarily due to higher sales.periods. The firstsecond quarter operating income margin was 33.734.8 percent, ana increasedecrease of 90270 basis points from 32.837.5 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 34.2 percent, a decrease of 110 basis points from 35.3 percent in the first quartersix months of 2025. OperatingThe incomedecrease in margin increasedwas primarily due to leverage$4.5 onmillion SG&Alegal costsettlement fromrecorded higherin sales.the second quarter of 2026.

Operating income-eliminationsincome-Eliminations/otherOther in the second quarter and first six months of 2026 was $19.2 million and $42.7 million, respectively, increases of $0.3 million and $0.4 million, respectively, as compared to the prior-year periods. Operating income-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses. The intersegment profit elimination impact in the second quarter and first quartersix months of 2026 compared to the firstprior-year quarterperiods of 2025 was an unfavorable $0.2$1.2 million.million and $1.3 million, respectively. The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer. General and administrative expenses weredecreased flat$0.9 million and $0.8 million, respectively, compared to the priorprevious year.year’s periods.

Other income or/ (expense), net was a lossnet in the first quartergain of 2026 of $0.4$1.3 million and a net gain of $0.8$1.0 million in the second quarter and first quarterssix months of 2026, respectively, and a net loss of $(0.2) million and a net gain of $0.7 million in the second quarter and first six months of 2025, respectively.

Foreign currency-based transactions produced aan gain in the first quarterexpense of 2026 of $0.4$2.5 million and a loss of $1.3$2.1 million in the firstsecond quarter and first six months of 2025.2026, respectively, and an expense of $4.5 million and $5.8 million in the second quarter and first six months of 2025, respectively. The expenseresults in the second quarters and first six months of 2026 and 2025 wasare primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent.

The provision for income taxes in the second quarter and first quarterssix months of 2026 and 2025 was $11.1$22.8 million and $10.5$33.9 million, respectively, and $20.1 million and $30.5 million in the second quarter and first six months of 2025, respectively. The effective tax rate for the second quarter and first quarterssix months of 2026 and 2025 was 24.225.7 percent and 25.025.2 percent,percent respectively.respectively, and 24.9 percent for both the second quarter and the first six months of 2025. The decreaseincrease in the effective tax rate was primarily due to mixincreased ofunfavorable foreigndiscrete earningsevents taxedin at rates different than the U.S. statutory rate.2026.

Net income forin the second quarter and first quartersix months of 2026 was $34.7$66.1 million comparedand to$100.8 million, respectively, and $60.6 million and $91.9 million in the priorsecond yearquarter and first quartersix net incomemonths of $31.42025, million.respectively. Net income attributable to Franklin Electric Co., Inc. forin the second quarter and first quartersix months of 2026 was $34.3$65.7 million and $100.1 million, respectively, or $0.77$1.46 and $2.23 per diluted share,share. compared to the prior year first quarter netNet income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of $31.02025 was $60.1 million and $91.1 million, respectively, or $0.67$1.31 and $1.97 per diluted share.

The Company's primary sources of liquidity are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds available. The Company believes its capital resources and liquidity position at MarchJune 31,30, 2026 is adequate to meet projected needs for the foreseeable future. The Company expects that ongoing requirements for operations, capital expenditures, pension obligations, dividends, share repurchases, and debt service will be adequately funded from cash on hand, operations, and existing credit agreements.

As of MarchJune 31,30, 2026, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 14, 2030. As of MarchJune 31,30, 2026, the Company had $256.6$236.6 million borrowing capacity under its credit agreement as $6.4 million in letters of commercial and standby letters of credit were outstanding and undrawn and $87.0$107.0 million revolver borrowings were drawn or outstanding.

The Company maintains the Fourth Amended and Restated Note Purchase and Private Shelf Agreement (the "Prudential Agreement") with PGIM, Inc. and its affiliates, with a remaining borrowing capacity of $200.0 million as of MarchJune 31,30, 2026. The maturity date of the agreement is May 15, 2027.

In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement") with a remaining borrowing capacity on the New York Life Agreement of $175.0 million as of MarchJune 31,30, 2026. The maturity date of the agreement is May 15, 2027.

The Company also has other long-term debt borrowings outstanding as of MarchJune 31,30, 2026. See Note 6 - Debt included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, for additional information regarding these obligations and future maturities as well as Note 6 - Debt of this current quarterly report for changes to these agreements since December 31, 2025.

At MarchJune 31,30, 2026, the Company had $72.2$76.7 million of cash and cash equivalents held in foreign jurisdictions, which is intended to be used to fund foreign operations. There is currently no need or intent to repatriate the majority of these funds in order to meet domestic funding obligations or scheduled cash distributions.

The following table summarizes significant sources and uses of cash and cash equivalents for the first threesix months of 2026 and 2025.

Net cash usedprovided by operating activities was $40.9$58.7 million for the threesix months ended MarchJune 31,30, 2026 compared to $19.5$32.0 million usedprovided by operating activities for the threesix months ended MarchJune 31,30, 2025. The change in operating cash flow was primarily attributable to an increase in net income and changes in working capital.

Net cash used in investing activities was $9.5$90.9 million for the threesix months ended MarchJune 31,30, 2026 compared to $116.1$127.3 million used in investing activities for the threesix months ended MarchJune 31,30, 2025. The change in investing cash flow was primarily attributable to decreased acquisition activity in the first threesix months of 2026.2026 compared to the prior year.

Net cash provided by financing activities was $32.6$36.1 million for the threesix months ended MarchJune 31,30, 2026 compared to $2.6$22.1 million used in financing activities for the threesix months ended MarchJune 31,30, 2025. The change in financing cash flow was primarily due to increaseddecreased netrepurchases borrowingsof underCommon the Company's credit facilityStock in 2026 compared to 2025, partially offset by increased repurchases of Company stock.2025.

This quarterly report on Form 10-Q contains certain forward-looking information, such as statements about the Company’s financial goals, acquisition strategies, financial expectations including anticipated revenue or expense levels, business prospects, market positioning, product development, manufacturing re-alignment,realignment, capital expenditures, tax benefits and expenses, and the effect of contingencies or changes in accounting policies. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” While the Company believes that the assumptions underlying such forward-looking statements are reasonable based on present conditions, forward-looking statements made by the Company involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those forward-looking statements as a result of various factors, including regional or general economic and currency conditions, various conditions specific to the Company’s business and industry, new housing starts, weather conditions, epidemics and pandemics, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs and availability, technology factors, integration of acquisitions, litigation, government and regulatory actions, changes in tariffs or the impact of any such changes on the Company's financial results, the Company’s accounting policies, and other risks, all as described in the Company's Securities and Exchange Commission filings, included in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in Exhibit 99.1 thereto. Any forward-looking statements included in this Form 10-Q are based upon information presently available. The Company does not assume any obligation to update any forward-looking information, except as required by law.