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

Our financial performance depends, in large part, on conditions in the markets that we serve in both the U.S. and globally. In the past, our operations have been exposed to volatility due to changes in general economic conditions or consumer preferences, recessions or adverse conditions in the markets we serve, including the impact of global pandemics and international conflicts. We are exposed to highly cyclical end markets for industrial goods, and to a lesser extent, aerospace and consumer products. An uncertain macro-economic and political climate could lead to reduced demand from our customers, variations in timing of sales to our customers, increased price competition for our products, increased risk of excess and obsolete inventories, uncollectible receivables, and higher overhead costs as a percentage of revenue, all of which could impact our operating margins. If our customers are adversely affected by these factors, we may experience lower product volume orders, which could have an unfavorable impact on our revenue and operating profit. For example, beginning in the back half of 2022 and continuing through 2023, demand for dispensing and closure products within our Packaging segment fell as a result of some of our larger customers' choices to rebalance on-hand inventory levels and caution in purchasing behaviors given the current inflationary macro-economic environment.environment at the time. As a more recent example, wefollowing experienceda period of strong demand of our cylinder products and inventory builds from customers, whichwe benefitedwitnessed oura steelperiod cylinderof businesscustomer ininventory 2022 and 2023,destocking, which then resulted in customer destocking negatively impactingimpacted demand for steelour cylinderscylinder products in 2024.2024 and 2025. These are a few recent examples indicating that our ability to accurately forecast the level of our customers’ orders is limited and can result in inefficiencies in scheduling our installed manufacturing capacity and result in sub-optimal business and financial results.

We are sensitive to price movements and availability of our raw materials supply. Our largest raw material purchases are for resins (such as polypropylene and polyethylene), steel, aluminum superalloys (such as titanium, A286 stainless steel and Inconel)aluminum, and other oil and metal-based purchased components, each of which have experienced recent cost volatility. Prices for these products, along with costs for transportation and energy, fluctuate with market conditions, and have generally increased over time. For example, during 2022, we experienced increased energy costs and supply chain disruptions as a result of the Russia-Ukraine conflict. In addition, we have experienced, and expect to continue to experience, the impact of cost inflationary pressure on raw materials, wage rates and freight. Pressure on wage rates continued through 2025 across all our businesses. For 2024, while our material and other input costs have generally stabilized compared to 2023 levels, we have experienced increased input costs associated with abrupt increases in customer demand, primarily in our Packaging segment. Pressure on wage rates continued through 2024 across all our businesses. Although we have generally been able to recover certain costs increases, we may be unable to offset the impact of future cost increases with price increases on a timely basis due to outstanding commitments to our customers, competitive considerations or our customers’ resistance to accepting such price increases and our financial performance could be adversely impacted. A failure by our suppliers to continue to supply us with certain raw materials, component parts, or at all, could have a material adverse effect on us. To the extent there are energy supply disruptions or material fluctuations in energy costs, our margins could be materially adversely impacted.

While no individual customer accounted for 10% or more of our consolidated net sales for 2024,2025, 20232024 or 2022,2023, our customer base has become, and may further become, increasingly concentrated as a result of our strategy to focus on growing sales with existing customers in packaging end markets, or due to customer consolidations. In 2024,2025, our AerospacePackaging segment and Specialty Products segmentssegment each had a customer that comprised 10% or more of its segment revenue. As a result of these factors, changes to or reductions in the buying patterns of these larger customers, including our customers diversifying their supply base, may expose our business and results of operations to greater volatility. For example, in a prior period, a large commercial aircraft manufacturer announced significant production delays and/or reductions on certain of its platforms for which we provide products, which significantly impacted our sales, profit and production efficiencies compared to historical levels.

The mix and type of customers, and sales to any single customer, may vary significantly from quarter to quarter and from year to year, and have a significant impact on our financial condition, results of operations and cash flows. If customers do not place orders, or they substantially reduce, delay or cancel orders, we may not be able to replace the business, which may have a significant adverse impact on our results of operations and financial condition. For example, beginning late 2023 and continuing through 2024,early 2025, we experienced a significant demand trough in our cylinder business as our customers rebalanced their inventory and adjusted their buying patterns. Further, a number of our consumer packaged goods customers ordered higher levels of inventory due to concerns over capacity constraints and rising inflation in the first half of 2022, and subsequently reduced their order levels in the back-half of 2022. Salessales of our consumer and industrial packaging products decreased in 2023, which we believe was due to lower customer order activity given high customer stocking levels, as well as continuing uncertainty around consumer sentiment as a result of the inflationary environment. In addition, major customers may require that we localize manufacturing and supply capacity rather than sourcing from lower cost countries, or seek pricing, payment, intellectual property-related or other commercial terms that are less favorable to us, which may have a negative impact on our business. The concentration of our customer base also increases our risks related to the financial condition of our customers, and the deterioration in financial condition of customers or the failure of customers to perform their obligations could have a material adverse effect on our results of operations and cash flows.

If our manufacturing facilities become unavailable either temporarily or permanently due to weather, earthquakes or other natural disasters related to global climate change, or geopolitical developments, including any potential impacts resulting from tensions between the United States and China, or logistical complications or operational disruptions arising from adverse regulatory actions, acts of war, cybersecurity incidents, public health crises or labor disruptions, we may be unable to shift production to other facilities or to make up for lost production. For example, one of our AerospaceSpecialty Products manufacturing facilities are predominatelyis located in southernLongview, California,Texas, an area known for earthquakessignificant precipitation and wildfires,riverine flooding, and areis thus vulnerable to damage. Any new facility would need to comply with the necessary regulatory requirements, satisfy our specialized manufacturing requirements and require specialized equipment. Even though we carry business interruption insurance policies, any business interruption losses could exceed the coverage available or be excluded from our insurance policies. Any disruption of our ability to operate our business could result in a material decrease in our revenues or significant additional costs to replace, repair or insure our assets, which could have a material adverse impact on our financial condition and results of operations.

We depend on integrated information systems to conduct our business. While we maintain some of our critical information systems, we are also dependent on third parties to provide important services relating to, among other things, operational technology at our facilities, human resources, electronic communications and certain finance functions. We may experience operating problems with our information systems as a result of system failures, cybersecurity incidents or other causes. Cybersecurity incidents and similar attacks vary in their form and can include the deployment of harmful malware or ransomware, denial-of-service attacks, and other attacks, which may affect business continuity and threaten the availability, confidentiality and integrity of our systems and information. Cybersecurity incidents can also include employee or personnel failures, fraud, phishing or other social engineering attempts or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended recipient. Cybersecurity threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software. Any significant disruption or slowdown of our systems could cause customers to cancel orders or cause standard business processes to become inefficient or ineffective.

Certain of the agreements related to the acquisition and disposition of businesses require indemnification against certain liabilities related to the operations of the company for the previous owner. We cannot be assured that any of these indemnification provisions will fully protect us,us. In some instances, third parties may have an obligation to indemnify us for liabilities related to a disposed business, and assuch athird resultparties may be unable to, or fail to, fulfill such obligations. If such third parties fail to indemnify us, or if indemnification provisions otherwise fail to fully protect us, we may be financially responsible and may incur unexpected liabilities that adversely affect our profitability and financial position.

Free trade laws and regulations provide certain duties and tariffs on qualifying imports and exports, subject to compliance with the applicable classification and other requirements. The United States government has indicated its intent to alteraltered its approach to international trade policy andand, in some casescases, indicated its intent to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries. RetaliatoryFor example, in early 2025 the U.S. government announced baseline tariffs on products from all countries and additional individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China. Current and future tariffs, including any retaliatory tariffs imposed by other countriescountries, or other potential governmental actions, could result in further adverse impacts on our business and results of operations. These tariffs, and other governmental actions relating to international trade agreements or policies, the adoption and expansion of trade restrictions, or the occurrence of trade wars may adversely impact demand for our products, costs, customers, suppliers and/or the U.S. economy or certain sectors thereof and, as a result, adversely impact our business. These tariffs and actions may, directly or indirectly, lead to higher costs and cause us to increase prices to our customers which may reduce demand, or, if we are unable to increase prices, result in lowering our margin on products sold. The degree to which these changes in U.S. trade policies, or the trade policies of other counties,countries, affect our financial condition and results of operations will be influenced by the specific details of the changes in trade policies, their timing and duration, and our effectiveness in deploying tools and strategies to address these issues. ForDuring example, in the past few years,2025, we have experienced higher input costs as a direct result of tariffs imposed on certain raw materials and components imported from China. In certain cases, we have passed-through these incremental costs to the customer, while in some cases we have not changed pricing to retain or expand volume, and in other cases we continue to work to install capacity in facilities where there currently is no tariff. In addition, certain of our U.S. suppliers raised prices for components in response to an overall increase in demand for domestic sources. ItThere remains unclearuncertainty whatregarding the scope and duration of these actions by the U.S. or foreign governments will or will not do with respect to tariffs, international trade agreements and policies on a short-term or long-term basis. Additional changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture or purchase products could have a material adverse effect on our business, financial condition and results of operations.

We continue to monitor and evaluate legislative developments related to the Global Anti-Base Erosion Proposal ("“GloBE"”) establishedrules byunder the Organization offor Economic CooperationCo-operation and Development'sDevelopment’s ("“OECD"”) Pillar Two framework. The Pillar Two rules establish a global minimum corporate tax rate of 15% for multinational enterprise groups with consolidated revenues of at least €750 million. OECD member countries may implement the Pillar Two model rules as issued, in a modified form, or not at all. OnIn December 12, 2022, the European Union member states agreedadopted a directive to implement Pillar Two, with the OECD'sincome Pillarinclusion Tworule globalgenerally corporateeffective minimumfor taxfiscal rateyears of 15%beginning on companiesor withafter revenuesDecember of31, at2023, leastand $790,000,the whichundertaxed wentprofits intorule effecteffective in Januarysubsequent 2024.periods. A number of other countriesjurisdictions have passedenacted, or are in the process of enacting, legislation enactingimplementing certain partsaspects of the Pillar Two framework in 2024.framework. While the Pillar Two legislation did not have a material impact on our 2024 consolidated financial statements,statements for the year ended December 31, 2025, it could have a material impact on our effective tax rate and result in higherincreased cash tax liabilities in thefuture future,periods, depending on the jurisdictions in which countrieswe enact minimum tax legislationoperate and the manner in whatwhich manner.such rules are implemented. We continue to assess the impact as guidance evolves, especially the newly side-by-side rules which were published by the OECD in January 2026.

Total settlement costs (exclusive of defense costs) for all such cases, some of which were filed more than 30 years ago, have been $13.7$14.4 million. All relief sought in the asbestos cases is monetary in nature. To date, approximately 40% of our costs related to settlement and defense of asbestos litigation have been covered by our primary insurance. Effective February 14, 2006, we entered into a coverage-in-place agreement with our first level excess carriers regarding the coverage to be provided to us for asbestos-related claims when the primary insurance is exhausted. The coverage-in-place agreement makes asbestos defense costs and indemnity insurance coverage available to us that might otherwise be disputed by the carriers and provides a methodology for the administration of such expenses. The Company'sOur primary insurance exhausted in November 2018, and thewe Company iswere solely responsible for defense costs and indemnity payments prior to the commencement of coverage under this agreement,agreement. During second quarter 2025, we reached the durationthreshold of whichqualified wouldfuture besettlements subjectrequired to commence excess carrier insurance coverage under the scopecoverage-in-place of damage awards and settlements paid. During this period, we may incur significant litigation costs in defending these matters.agreement. In the event the asbestos defense costs and indemnity insurance coverage provided by the coverage-in-place agreement are unavailable to us for any reason, we may incur additional costs. We also may be required to incur additional defense costs and pay damage awards or settlements, or become subject to equitable remedies, in the future that could adversely affect our businesses.

As of December 31, 2024,2025, we have $398.1$469.2 million of outstanding long-term debt. We are subject to variable interest rates on our revolving credit facility. Such interest rates are subject to benchmark interest rates based on the currency denomination of borrowings, with British pound sterling borrowings subject to the Sterling Overnight Index Average andAverage, Euro borrowings subject to the Euro InterBank Offered Rate, both plus a spread of 1.750%,Rate and U.S. dollar borrowings subject to the Secured Overnight Financing RateRate, each plus a spread ofthat 1.850%.ranges Thefrom interest1.375% rateto spread is2.00% based upon the leverage ratio, as defined, as of the most recent determination date. We may experience increases in our interest expense as a result of general increases in interest rate levels. In addition, we could be further impacted by changes in variable interest rates. Our reference rates under our revolving credit facility may perform differently from historical rates, which may affect our net interest expense and require changes to our future risk, pricing and hedging strategies. We had $1.5$72.8 million outstanding under our revolving credit facility as of December 31, 2024.2025.

As of December 31, 2024,2025, we have one facility, located in Commerce, California, where our hourly employees operate under a collective bargaining agreement, and which represents 13% of our employees located in the United States. We have six facilities outside of the United States where our employees are affiliated with state-controlled or trade unions, which covers 13% of our non-U.S. employees. Our labor agreement with the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) at our TriMas Aerospace facility in Commerce, California, expired in August 2024, at which time the UAW initiated a strike. We entered into a new three-year collective bargaining agreement in October 2024. We are not aware of any present active union organizing drives at any of our other facilities. We cannot predict the impact of any further unionization of our workplace.

TriMas designs, develops and manufactures a diverse set of products primarily for the consumer products, aerospace & defenseproducts and industrial markets through its TriMas Packaging, TriMas AerospacePackaging and Specialty Products groups. Our wide range of innovative products are designed and engineered to solve application-specific challenges that our customers face. We believe our businesses share important and distinguishing characteristics, including: well-recognized and leading brand names in the markets we serve; innovative product technologies and features; a high-degree of customer approved processes and qualifications; established distribution networks; modest capital investment requirements; strong cash flow conversion and long-term growth opportunities. While the majority of our revenue is in the United States, we manufacture and supply products globally to a wide range of companies. We reportare ourprincipally business activityengaged in threetwo reportable segments: Packaging, AerospacePackaging and Specialty Products.

Overall, 20242025 net sales increased $31.5$14.9 million, or 3.5%,2.4%, compared to 2023.2024. We experienced growth from acquisitions, as well as organic growth of 16.6% and 10.3%4.1% within our Aerospace and Packaging segments, respectively,segment compared to 2023.2024. TheseThe increasesincrease werewas partially offset by lower sales of 37.2%7.0% in our Specialty Products segment as compared to the prior yearyear, as wehigher worksales throughof steel cylinders more than offset the lost sales due to the divestiture of our Arrow Engine business in January 2025. Our overall sales increase included $2.2 million of currency exchange, as our reported results in U.S. dollars were favorably impacted as a cyclicalresult demandof trougha andweakening destocking.U.S. dollar relative to foreign currencies.

InDuring 2024,2025 we recorded a pre-tax charges of $3.6$6.5 million for environmental remediation for waste sites in which we had been named a potential responsible party. In 2024, we recorded pre-tax charges of $3.2 million for similar environmental matters.

Our effective tax rate for 20242025 and 20232024 was 19.3%,(198.1)%, and 20.2%,53.3%, respectively. The decrease in effective tax rate 2024for 2025 as compared to 20232024 is primarily as a result of us recognizing a $53.9 million tax benefit in 2025 related to the tax-basis versus book-basis difference in our Aerospace business. Otherwise, the remaining difference is due to a change in the mix of domestic and foreign pre-tax results.

We have executed meaningful realignment actions over the past few years to address variable and structural costs where demand has fallen. We will continue to assess and take further actions if required. However, as a result of the current period of macroeconomic inflation and uncertainty, including uncertainty regarding the scope and duration of current and future tariffs and trade actions, and the potential impact of such factors to our future results of operations, as well as if there is an impact to TriMas' overall performance and market capitalization, we may record additional cash and non-cash charges related to further realignment actions, asset impairments, including impairments to our goodwill, intangible assets, fixed assets, inventory or customer receivable account balances.

We are sensitive to price movements and availability of our raw materials supply. Our largest raw material purchases are for polypropylene, polyethylene, steel, aluminum, superalloys (such as titanium, A286 stainless steel and Inconel) and other oil and metal-based purchased components, the costs for each of which are subject to volatility. There has also been some volatility overin thecertain pastof twoour yearsinput costs as a direct and indirect result of foreign trade policy, where tariffs on certain of our commodity-based products sourced from Asia have been instituted, the conflict in Eastern Europe, creating certain input material shortages, and labor shortages at certain of our raw material suppliers. We will continue to take actions to mitigate such increases, including implementing commercial pricing adjustments, holding extra inventories, resourcing to alternate suppliers and insourcing of previously sourced products. Although we believe we are generally able to mitigate the impact of higher commodity costs over time, we may experience additional material costs and disruptions in supply in the future and may not be able to pass along higher costs to our customers in the form of price increases or otherwise mitigate the impacts to our operating results.instituted.

Oil-based commodity costs are a significant driver of raw materials and purchased components used within our Packaging segment. As such, an increase in crude oil often is a precursor to rising polymeric raw material costs, for which we may experience a contractual commercial recoverrecovery lag. Separately, our Arrow Engine business in our Specialty Products segment is sensitive to the demand for natural gas and crude oil in North America. For example, demand for engine, pump jack and compressor products are impacted by active oil and gas rig counts and wellhead investment activities.

Each year, as a core tenet of the TriMas Business Model,year our businesses target cost savings from Kaizen (continuous improvement) initiatives in an effort to reduce, or otherwise offset, the impact of increased input and conversion costs through increased throughput and yield rates, with a goal of at least covering inflationary and market cost increases. In addition, we continuously review our operating cost structures to ensure alignment with current market demand.

We continue to evaluate alternatives to redeploy the cash generated by our businesses, one of which includes returning capital to our shareholders. In 2020,November 2025, our Board of Directors increasedauthorized us to increase the authorizationpurchase of shareour repurchasescommon stock up to a$150 cumulativemillion amountin ofthe $250aggregate, million.adding to the $65.4 million remaining under the previous authorization. During 2024,2025, 2024 and 2023, we purchased 3,124,866, 771,067 and 680,594 shares of our outstanding common stock for an$103.3 aggregate purchase price ofmillion, $19.3 million.million and $18.8 million, respectively. As of December 31, 2024,2025, we had $67.6$48.9 million remaining under the repurchase authorization. See Note 24, "Subsequent Events," included in Item 8, "Financial Statements and Supplementary Data," within this Form 10-K for an update on our authorization.

The following table summarizes financial information for our three reportable segments (dollars in thousands):

The following "Results of Operations Year Ended December 31, 20242025 Compared with Year Ended December 31, 20232024" section presents an analysis of our consolidated operating results displayed in the Consolidated Statement of Income. A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on February 29, 2024.

As a result of the decision of the U.S. Supreme Court in February 2026, we may beare entitled to a refund of tariffs previously paid on certain imported product under IEEPA. Although a reimbursement process became available on April 20, 2026, the timing and amount of any potential refunds for previously collected tariffs remain uncertain and may be subject to further legal and regulatory developments. To date, the changes in the tariffs, on an overall basis, have not had a significant impact on our results of operations. We will continue to monitor the situation and evaluate the impact of any replacement tariffs or policy changes on our business, including the potential for cost recovery and future tariff exposure.

Overall, our firstsecond quarter 2026 net sales increased $15.8$2.8 million, or 10.4%,1.6%, compared to first quarter 2025. We experienced organic growth of 4.4% within our Packaging segment, compared to firstsecond quarter 2025. Net sales increased 17.0%10.2% in our Specialty Products segment as compared to the prior year quarter, as higher sales of steel cylinders more than offset the lost salesquarter due to theincreased divestituremarket demand for steel cylinders. Organic sales decreased 2.1% within our Packaging segment, compared to second quarter 2025, due to volatility in certain of our Arrowend Engine business in January 2025.markets. Our overall sales increase included $6.0$2.9 million of currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of a weakening U.S. dollar relative to foreign currencies.

The most significant drivers affecting our financial results in firstsecond quarter 2026 compared with firstsecond quarter 2025, other than as directly impacted by sales changes, were realignment costs related to the comprehensiveclosure reorganizationand consolidation of our PackagingAtkins, segmentArkansas and corporate office,facility, interest income earned on the invested cash proceeds from the sale of our Aerospace business, the impact of the divestiture of our Arrow Engine business in first quarter 2025, and ana increasedecrease in our effective tax rate.

During firstsecond quarter 2026, we recorded $4.1$2.1 million of realignment costs related to the comprehensiveclosure reorganizationand consolidation of our Atkins, Arkansas facility into other locations within our Packaging segmentsegment, including $1.4 million related to facility move and corporateconsolidation office,costs primarily for severance, includingand $0.5 million related to charges to accelerate the depreciation of non-cashcertain compensationfixed expense.assets.

During first quarter 2026, we invested the cash proceeds from the sale of our Aerospace business in highly liquid instruments, including U.S. Treasury‑backed money market funds and cash deposits that earnearned interest at a rate of approximately 3.5%.3.7% during second quarter. During the three months ended MarchJune 31,30, 2026, we earned interest income of $2.0$10.9 million.

Oil-based commodity costs are a significant driver of raw materials and purchased components used within our Packaging segment. As such, an increase in crude oil prices often is a precursor to rising polymeric raw material costs, for which we may experience a contractual commercial recovery lag. During 2026, geopolitical instability in the Middle East has contributed to volatility in global energy and logistics markets. These conditions have led to increased oil-based commodity costs, including resin and other input costs, which began to affect us in second quarter 2026.

We continue to evaluate alternatives to redeploy the cash generated by our businesses, one of which includes returning capital to our shareholders. In February 2026, our Board of Directors authorized us to increase the purchase of our common stock up to $150 million in the aggregate, adding to the $48.9 million remaining under the previous authorization. During firstsecond quarter 2026, 1,487,057509,264 shares were purchased. As of MarchJune 31,30, 2026, we had $95.5$76.5 million remaining under the repurchase authorization.

In addition, in firstsecond quarter 2026, we declared dividends of $0.04 per share of common stock and paid dividends of $1.5$1.4 million. We will continue to evaluate opportunities to return capital to shareholders through the purchase of our common stock, as well as dividends, depending on market conditions and other factors.

The following table summarizes financial information for our reportable segments for the three months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

The following table summarizes detail on the year-over-year sales growth percentages for our reportable segments for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025:

The principal factors impacting us during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025, were:

•IncreasesIncrease in demand for products within our Packaging and Specialty Products segmentssegment;

•Realignment costs related to the comprehensiveclosure reorganizationand consolidation of our Atkins, Arkansas facility into other locations within our Packaging segment and corporate office;

•Interest income earned on the invested cash proceeds from the sale of our Aerospace business; and

•AnA increasedecrease in our effective tax rate in firstsecond quarter 2026 compared with firstsecond quarter 2025.

Three Months Ended MarchJune 31,30, 2026 Compared with Three Months Ended MarchJune 31,30, 2025

Overall, net sales increased $15.8$2.8 million, or 10.4%,1.6%, to $168.3$174.6 million for the three months ended MarchJune 31,30, 2026, as compared with $152.5$171.8 million in the three months ended MarchJune 31,30, 2025. Organic sales, excluding the impact of currency exchangeexchange, andremained divestitures,relatively increased $11.2 million, or 7.3%,flat, as organic sales increased 22.6% and 4.4%10.2% within our Specialty Products and Packaging segments, respectively,segment, due to end markethigher demand improvementslevels andfor growthsteel initiatives.cylinders, Thesewhile increasesorganic weresales partiallydecreased offset2.1% by the impact of the divestiture ofwithin our Arrow Engine business in our Specialty ProductsPackaging segment. In addition, net sales increased by $6.0$2.9 million due to currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of athe weakening of the U.S. dollar relative to foreign currencies.

OperatingGross profit margin (operatinggross profit as a percentage of sales) approximated 4.1%20.2% and 4.7%22.1% for the three months ended MarchJune 31,30, 2026 and March 31, 2025, respectively. OperatingGross profit margin decreased $0.3 million, to $6.9 million, for the three months ended March 31, 2026, compared to $7.2 million for the three months ended March 31, 2025, primarily due to the$1.9 year-over-year impactmillion of ahigher $5.3realignment millioncosts gainrelated onto the saleclosure and consolidation of Arrowour EngineAtkins, inArkansas first quarter 2025 that did not recur, a less favorable product sales mixfacility within our Packaging segment, andas well as due to higher stockproduction compensation expense. These decreases were partially offset by higher sales levelscosts and relatedmanufacturing improved fixed cost absorptioninefficiencies within our Specialty Products segment.

Interest expense increaseddecreased $0.7$0.4 million, to $5.2 million, for the three months ended March 31, 2026, as compared to $4.5$4.1 million for the three months ended MarchJune 31,30, 2026, compared to $4.6 million for the three months ended June 30, 2025, due to ana increasedecrease in our weighted average borrowings and a higher effective interest rate on our revolving credit facility within the firstsecond quarter of 2026.

Other income (expense) increased $0.9$11.1 million to $0.9$11.3 million of income, for the three months ended MarchJune 31,30, 2026, fromas acompared nominalto amount$0.3 of expensemillion for the three months ended MarchJune 31,30, 2025, asprimarily thedue $2.0to $10.9 million of interest income earnedon onthe invested cash proceeds from the sale of our Aerospace business was partially offset by increased losses on foreign currency transactions.Aerospace.

Income (loss) from continuing operations decreasedincreased by $53.7$64.9 million, to a loss of $51.8$67.3 million for the three months ended MarchJune 31,30, 2026, as compared to income of $1.9$2.4 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily the result of a decrease in income tax expense of $49.9 million, an increase of $11.1 million in other income, an increase in operating profit of $0.3$3.5 million, anand increasea decrease in interest expense of $0.7 million, and an increase in income tax expense of $53.7 million, partially offset by an increase in other income by $0.9$0.4 million.

Packaging. Net sales increaseddecreased $11.6$0.1 million, or 9.1%0.1% (of which 4.4%(2.1)% was organic and 4.7%2.0% was foreign currency exchange), to $139.2$142.9 million in the three months ended MarchJune 31,30, 2026, as compared to $127.6$143.0 million in the three months ended MarchJune 31,30, 2025. The increase was driven primarily by higher salesSales of products used in lifefood sciencesand marketsbeverage applications decreased by $2.5 million, sales of $5.0 million and dispensing products used primarily for beauty, personal care and home care applications decreased by $2.2 million, and sales of $2.4other million,consumer goods products decreased by $2.6 million. These decreases were partially offset by lowerhigher sales of products used in life sciences markets of $3.2 million and higher sales of products used for industrial applications of $1.2 million. Net sales increased by $6.0$2.9 million due to currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of the weakening of the U.S. dollar relative to foreign currencies, as compared to second quarter 2025.

Selling,Gross generalprofit anddecreased administrative expenses increased $3.9$2.0 million to $18.1$33.6 million, or 13.0%23.5% of sales, in the three months ended MarchJune 31,30, 2026, as compared to $14.2$35.6 million, or 11.1%24.9% of sales, in the three months ended MarchJune 31,30, 2025, primarily due to $2.7$1.9 million of higher realignment costs related to the comprehensiveclosure reorganizationand consolidation of our PackagingAtkins, segment.Arkansas facility.

Selling, general and administrative expenses decreased $1.2$0.7 million to $1.4$14.9 million, or 4.7%10.4% of sales, in the three months ended MarchJune 31,30, 2026, as compared to $2.5$15.5 million, or 10.1%10.9% of sales, in the three months ended MarchJune 31,30, 2025, primarily due to $1.2lower employee-related costs and lower intangible asset amortization expense due to certain assets becoming fully amortized, partially offset by $0.2 million of incurredhigher expensesrealignment related to our Arrow Engine business, which we divested in January 2025.costs.

Operating profit increaseddecreased $4.0$1.3 million to $2.9$18.7 million, or 9.8%13.1% of sales, in the three months ended MarchJune 31,30, 2026, as compared to a loss of $1.2$20.0 million, or 4.6%14.0% of sales, in the three months ended MarchJune 31,30, 2025, primarily due to $2.1 million of higher steelrealignment cylinder sales, and lower selling, general and administrative expenses,costs, partially offset by thelower year-over-yearemployee-related impactcosts fromand thelower divestitureintangible ofasset ouramortization Arrowexpense Enginedue business.to certain assets becoming fully amortized.