Summary of Third Quarter FY 2026 Results

• Net Sales: \$1,053 million for Q3 2026, representing a 1% year-over-year growth.
• Income from Operations: \$170.1 million (Adjusted), down 38% from prior year. GAAP income from operations was \$422.3 million, down 12%.
• Net Income: \$54.0 million for the quarter, a decline of 63% over the prior year.
• Adjusted Net Income: \$100.0 million, down \$64.4 million over the prior year.
• Diluted EPS: \$0.39, a drop of \$0.64 compared to prior year.
• Adjusted Diluted EPS: \$0.72, down \$0.43 from prior year.
• Capital Returned to Shareholders: \$51.4 million in Q3 via cash dividends; total of \$204.7 million in first three quarters (including \$154.7 million in dividends and \$50 million in stock repurchases).
• Shares Repurchased: 804,882 shares at an average price of \$62.12/share.

Updated Fiscal 2026 Guidance

• Net Sales: Guidance revised to \$4.2 billion–\$4.3 billion (previously \$4.0 billion–\$4.2 billion).
• Adjusted EBITDA: Guidance lowered to \$1.06–\$1.10 billion (previously \$1.13–\$1.17 billion).
• Adjusted Diluted EPS: Guidance now \$4.30–\$4.60 (previously \$5.00–\$5.40).
• Capital Expenditures: Expected at \$450–\$500 million.

This guidance revision is material and price sensitive as it reflects lowered profit expectations for the full fiscal year despite slightly increased sales projections. Investors should note the company’s cautious outlook on profitability going forward.

Factors Affecting Results

• Gross Profit and SG&A: Adjusted Gross Profit and Adjusted SG&A expenses were lower and higher respectively, impacting net income and EPS.
• Foreign Currency: Foreign currency exchange gains of \$11.5 million (\$8.6 million after-tax) in Q3, but also notable losses in the previous quarters.
• Stock-based Compensation: \$10.5 million expense in Q3 (\$8.7 million after-tax).
• Shareholder Activism Fees: \$4.0 million in advisory fees (\$3.1 million after-tax) related to shareholder activism matters.
• Cost Savings & Restructuring: Ongoing program with related charges and benefits, including product withdrawal impacts and pension settlement charges.
• Product Withdrawal: Prior year quarter included a \$9 million benefit related to voluntary product withdrawal, which was not repeated this quarter.

Capital Structure & Liquidity

• Total Assets: \$7,393.5 million as of quarter-end.
• Cash & Cash Equivalents: \$57.5 million at quarter-end.
• Long-term Debt: \$1,409.5 million (current portion) and \$1,476.0 million (long-term portion).
• Stockholders’ Equity: \$1,827.1 million.
• Total Liabilities and Stockholders’ Equity: \$7,393.5 million.

Cash Flow Highlights

• Net Cash Provided by Operating Activities: \$595.6 million YTD.
• Net Cash Used for Investing Activities: \$(238.0) million YTD.
• Net Cash Used for Financing Activities: \$(374.1) million YTD.

The company returned substantial capital to shareholders via dividends and stock repurchases, but also saw significant cash outflows in both investing and financing activities, highlighting ongoing investments and capital management strategies.

Segment Performance & Non-GAAP Measures

• Segment Adjusted EBITDA: Notable decline (down 47% year-over-year in key segments).
• Non-GAAP Measures: Company provides adjusted results to exclude impacts from foreign currency, mark-to-market derivatives, restructuring, stock-based compensation, and other items. These are meant to give investors a clearer picture of ongoing operational performance but are not substitutes for GAAP measures.

Forward-Looking Statements & Risks

• The company cautions that its outlook is subject to risks including supply chain constraints, commodity availability, integration of acquisitions, debt levels, government actions, and global economic conditions.
• Forward-looking statements are based on management’s current expectations and are not guarantees of future performance.

Price-Sensitive Information & Investor Implications

Key price-sensitive news:

• Adjusted EBITDA and Adjusted EPS guidance lowered for FY2026, which may impact share valuation.
• Net income and EPS declines in Q3, indicating operational challenges and margin pressures.
• Continued capital returns via dividends and buybacks, but at a slower pace than prior periods.
• Ongoing restructuring and shareholder activism expenses, which may affect future profitability.

Investors should closely monitor the company’s ability to execute on cost savings initiatives, manage currency and commodity risks, and sustain profitability amid strategic challenges.