This Item 2 contains forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q are subject to a number of risks and uncertainties, some of which are beyond our control. Our actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which we are not currently aware or which we currently deem immaterial could also cause our actual results to differ, including those discussed in the section entitled "Forward-Looking Statements" included elsewhere in this Quarterly Report on Form 10-Q as well as those risk factors discussed in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in the section entitled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q. Overview Compass Diversified Holdings ("Holdings", or the "Trust") was formed in Delaware on November 18, 2005. Compass Group Diversified Holdings LLC (the "LLC") was also formed on November 18, 2005. Holdings and the LLC (collectively, the "Company") were formed to acquire and manage a group of small and middle-market businesses headquartered in North America. The LLC is a controlling owner of eight businesses, or operating segments, at June 30, 2026: 5.11 Acquisition Corp. ("5.11"), Boa Holdings Inc. ("BOA"), Relentless Topco, Inc. ("PrimaLoft"), THP Topco, Inc. ("The Honey Pot Co." or "THP"), CBCP Products, LLC ("Velocity Outdoor" or "Velocity"), AMTAC Holdings LLC ("Arnold"), FFI Compass, Inc. ("Altor Solutions" or "Altor"), and Rimports Holdings, Inc. ("Rimports"). On May 1, 2026, the Company completed the sale of Sterno’s food service business. Prior to the sale, Sterno distributed Rimports, its home fragrance business, to its stockholders, and Rimports remained a majority owned subsidiary of the LLC. Accordingly, the Rimports operating segment reflects the home fragrance business retained by the Company following the sale of Sterno’s food service business. Lugano Holding, Inc. ("Lugano") was an operating segment of the Company until November 16, 2025 when Lugano was deconsolidated. The results of operations of Lugano are included in the Company's results of operations through the date of the deconsolidation. We acquired our existing businesses that we own at June 30, 2026 as follows: Ownership Interest - June 30, 2026 Business Acquisition Date Primary Diluted Arnold March 5, 2012 98.0% 82.0% Rimports * October 10, 2014 93.3% 93.3% 5.11 August 31, 2016 97.0% 88.6% Velocity Outdoor June 2, 2017 99.4% 93.2% Altor Solutions February 15, 2018 98.8% 92.5% BOA October 16, 2020 91.4% 83.2% Lugano ** September 3, 2021 —% —% PrimaLoft July 12, 2022 90.7% 84.8% The Honey Pot Co. January 31, 2024 85.0% 76.5% * During the second quarter of 2026, the Company completed the sale of Sterno’s food service business. Prior to the sale, Sterno distributed Rimports, its home fragrance business, to its stockholders, and Rimports remained a majority owned subsidiary of the LLC. ** Lugano was deconsolidated on November 16, 2025. The Company retained its equity interest in Lugano at June 30, 2026. We categorize our subsidiary businesses into two separate groups of businesses: (i) branded consumer businesses, and (ii) industrial businesses. Branded consumer businesses are those businesses that we believe capitalize on a valuable brand name in their respective market sectors. We believe that our branded consumer businesses are leaders in their respective particular product categories. Industrial businesses are those businesses that focus on manufacturing and selling particular products and/ or industrial services within a specific market sector. We believe that our industrial businesses are leaders in their specific market sector. 44 The following is an overview of each of our operating segments: Branded Consumer 5.11 - 5.11 is a global apparel, footwear, and gear company serving consumers who demand performance, durability, and versatility across work, training, and adventure. 5.11 is a brand known for innovation and authenticity and works directly with end users to create purpose-built apparel, footwear and gear designed to enhance the safety, accuracy, speed and performance of tactical professionals and enthusiasts worldwide. 5.11 operates sales offices and distribution centers globally, and 5.11 products are widely distributed in uniform stores, military exchanges, outdoor retail stores, its own retail stores and on 511tactical.com. BOA - BOA, creator of the patented BOA Fit System, partners with market-leading brands to make the best gear even better. Delivering fit solutions purpose-built for performance, the BOA Fit System is featured in footwear across snow sports, cycling, outdoor, athletic, workwear as well as performance headwear and bracing. The system consists of three integral parts: a micro-adjustable dial, high-tensile lightweight laces, and low friction lace guides creating a superior alternative to laces, buckles, Velcro, and other traditional closure mechanisms. Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has operations in Austria, China, South Korea, Japan and Vietnam. PrimaLoft - PrimaLoft is a leading provider of branded, high-performance synthetic insulation and materials used primarily in consumer outerwear and accessories. The portfolio of PrimaLoft synthetic insulations offers products that can both mimic natural down aesthetics and provide the freedom to design garments ranging from stylish puffers to lightweight performance apparel. PrimaLoft insulations also offer superior economics to the brand partner and enable better sustainability characteristics through the use of recycled, low-carbon inputs. PrimaLoft is headquartered in Latham, New York. The Honey Pot Co. - The Honey Pot Co. is a leading “better-for-you” feminine care brand, powered by plant-derived ingredients and clinically tested formulas. Founded in 2012, The Honey Pot Co. is rooted in the belief that all products should be made with healthy and efficacious ingredients that are kind to and safe for skin. The Honey Pot Co. offers an extensive range of holistic wellness products across the feminine hygiene, menstrual, personal care, and sexual wellness categories. The Honey Pot Co.'s mission is to educate, support, and provide consumers around the world with tools and resources that promote menstrual health and vaginal wellness. Its products can be found in more than 33,000 stores across the U.S. through mass merchants, drug and grocery retail chains, and online. The Honey Pot Co. is headquartered in Atlanta, Georgia. Velocity Outdoor - Velocity Outdoor is a leading designer, manufacturer, and marketer of archery products, hunting apparel and related accessories. The archery product category consists of products including Ravin crossbows and CenterPoint archery products, and the apparel category offers high-performance, feature rich hunting and casual apparel under the King's Camo brand, utilizing King’s own proprietary camo patterns. Velocity Outdoor offers its products through national retail chains and dealer and distributor networks. Velocity Outdoor is headquartered in Rochester, New York. Industrial Altor Solutions - Founded in 1957 and headquartered in St. Louis, Missouri, Altor Solutions is a designer and manufacturer of custom molded cold chain and protective foam solutions including OEM components made from EPS and EPP. Altor operates molding and fabricating facilities across North America and provides products to a variety of end-markets, including appliances and electronics, pharmaceuticals, health and wellness, building products and others. Arnold - Arnold serves a variety of markets including aerospace and defense, general industrial, motorsport/ transportation, oil and gas, medical, energy, semiconductor and advertising specialties. Over the course of more than 100 years, Arnold has successfully evolved and adapted its products, technologies, and manufacturing presence to meet the demands of current and emerging markets. Arnold engineers solutions for and produces high performance permanent magnets (PMAG), stators, rotors and full electric motors (Ramco), precision foil products (Precision Thin Metals), and flexible magnets (Flexmag™) that are mission critical in motors, generators, sensors and other systems and components. Based on its long-term relationships, Arnold has built a diverse and blue-chip customer base totaling more than 2,000 customers and leading systems-integrators worldwide with a focus on North America, Europe, and Asia. Arnold has built a preferred rare earth supply chain and has leading rare earth 45 and other permanent magnet production capabilities. Rimports - Rimports manufactures and distributes branded and private label wickless candle products used for home decor and fragrance systems under the ScentSationals, and Fusion brands. Rimports offers unique lines of wickless candle products including ceramic wax warmers, scented wax cubes, fragrance oils, essential oils, and diffusers. Rimports also sells flameless candles, lanterns, and outdoor lighting. Rimports was acquired by Sterno in February 2018 and is headquartered in Provo, Utah. 2026 Outlook and Significant Trends Impacting our Subsidiary Businesses Macroeconomic Trends We expect macroeconomic conditions to remain dynamic for the remainder of 2026, as geopolitical uncertainty, evolving trade dynamics, cost inflation and uneven consumer demand continue to shape the operating environment. We believe our diversified portfolio, leading positions in a number of categories and disciplined focus on operating execution position our subsidiaries to respond effectively to these conditions, although the magnitude and timing of impacts may vary across our branded consumer and industrial businesses. For our branded consumer businesses, future changes in consumer confidence, discretionary spending, promotional intensity and channel inventory levels may affect demand, pricing and gross margin performance; however, certain subsidiaries have demonstrated encouraging momentum through improved distribution, strong bookings, disciplined pricing and tariff-related recoveries. We expect these businesses to continue pursuing initiatives intended to strengthen customer relationships, enhance channel execution, improve product availability and protect margins where market conditions allow. For our industrial businesses, end-market activity and customer capital spending may continue to be influenced by interest rates, customer capital allocation decisions, broader manufacturing and infrastructure conditions, and the availability and cost of raw materials. These businesses are expected to continue focusing on operational efficiency, sourcing flexibility and pricing discipline to help mitigate input-cost volatility, including labor, freight, energy, packaging materials, commodities and raw materials. While a significant portion of our outstanding debt is fixed-rate and, as a result, our consolidated interest expense is generally less sensitive in the near term to changes in market rates and credit spreads than it would be under a predominantly variable-rate capital structure, higher rates and tighter credit conditions may still affect the availability and cost of incremental financing, the timing of refinancings, consumer and business demand, and our customers’ spending decisions. In addition, certain subsidiaries are expected to continue advancing supply chain reconfiguration, sourcing diversification and inventory management initiatives in response to evolving trade and tariff policies, including constraints experienced by Arnold in connection with export licensing requirements in China. We believe these actions, together with our subsidiaries’ ongoing operating initiatives, should enhance flexibility and resiliency over time, although intermittent disruptions, higher working capital requirements or timing differences in revenue and margin realization may occur in future periods. Geopolitics and Trade Policy Geopolitical and trade policy conditions are expected to remain fluid and may continue to affect energy costs, sourcing decisions, tariff exposure, pricing strategies and customer demand patterns. While we do not currently expect the ongoing conflict in the Middle East to have a material direct impact on our businesses, broader geopolitical and trade uncertainty may influence input costs, customer purchasing behavior and the timing of capital allocation decisions across certain end markets. Tariffs and related policy changes can operate economically as an increase in landed product cost, which may compress margins if not offset through pricing, sourcing changes, productivity initiatives or customer negotiations, and may also affect demand where higher costs are passed through to customers. Our subsidiaries are continuing to diversify sourcing, reduce concentrated exposure to China and implement pricing, inventory and customer negotiation strategies intended to mitigate the potential impact of new, expanded or reinterpreted tariffs while balancing working capital efficiency and product availability. The recent U.S. Supreme Court ruling related to certain tariff authorities may continue to create uncertainty regarding the interpretation and administration of certain tariffs, including the timing, amount and accounting for refunds of previously paid tariffs. We continue to monitor geopolitical developments, tariff policies and related government actions and will adjust our strategies to mitigate impacts as conditions evolve. Business Outlook Our near-term focus remains on strengthening the balance sheet, maintaining liquidity, and executing our day-to-day operating plan across our subsidiaries. Reducing leverage is our top financial priority, which we are pursuing through organic free cash flow generation and targeted divestitures, including the sale of Sterno's food service 46 business, which closed in the second quarter of 2026, the net proceeds of which we applied to repayment of senior secured debt. Our operating priorities for 2026 include: (i) generating free cash flow through improved operating performance, disciplined capital spending, and focused working capital management; (ii) driving profitable growth through product innovation, distribution expansion, and customer wins where returns are attractive; (iii) protecting margins through pricing actions, productivity initiatives, and active management of input-cost volatility; and (iv) enhancing resilience and oversight through supply chain diversification, selective technology investments, and continued improvement of governance and financial reporting processes. Lugano Restatement and Deconsolidation As previously disclosed, following concerns reported to the Company’s management, the Company commenced the Lugano Investigation. As a result of the Lugano Investigation, the Company determined that the Company’s previously issued financial statements for fiscal years 2022, 2023 and 2024, including other interim and full-year financial information, should no longer be relied upon. In connection with the restatement process, the Company corrected these errors in its 2024 Form 10‑K/A, which was filed on December 8, 2025. The Company then filed its Quarterly Reports on Form 10‑Q for the first, second and third quarters of 2025, on December 18, 2025, December 29, 2025, and January 14, 2026, respectively. In addition, as a result of the Lugano Bankruptcy, effective November 16, 2025, Lugano and its subsidiaries were deconsolidated from the Company’s consolidated financial statements in accordance with ASC 810 – Consolidation. Accordingly, the results of Lugano are included in the Company’s consolidated results through November 16, 2025, and periods subsequent to that date do not include Lugano’s results of operations, assets or liabilities, except to the extent of any retained interest or other continuing involvement recognized in accordance with applicable accounting guidance. Recent Events Amendment to the 2022 Credit Facility On August 6, 2026, we entered into a Sixth Amendment to the 2022 Credit Facility. The amendment extends the maturity of the revolving commitments and term loans to January 12, 2028 and modifies certain terms of the facility. Among other changes, the amendment reduces the aggregate revolving commitments from $100.0 million to $54.0 million, waives milestone fees that otherwise would have been payable under the Fifth Amendment transaction letter, removes the incremental delayed draw term loan facility, reduces the aggregate amount available under incremental facilities from $250.0 million to $150.0 million, and revises certain covenant and availability provisions, including reducing the concentration limit for Combined Eligible Availability attributable to any one portfolio company from 40% to 25%. The amendment also permits certain supply chain financing arrangements and payments under the Ninth Amended and Restated Management Services Agreement. In addition, if the term loans under the 2022 Credit Facility have not been repaid on or before December 31, 2026, we will be required to pay a $4.0 million milestone fee. We believe the Sixth Amendment provides additional time and flexibility to execute our deleveraging and liquidity plans; however, our ability to maintain adequate liquidity and comply with the amended covenants will depend on our operating performance, cash generation, asset monetization activity and other factors discussed in this Form 10-Q. MSA Amendment On July 12, 2026, the Company and the Manager entered into an amendment to the Management Service Agreement (the "Ninth MSA"). Beginning January 1, 2027, the Ninth MSA reduces the base management fee rates, caps the 2027 base management fee at $30.0 million, establishes the 2027 Aggregate Fee Cap and replaces the existing incentive management fee with the Share Alignment Award and Performance-Based Award described in Note P. The revised fee and award structure is expected to reduce total management fees for 2027 relative to the amounts that otherwise would have been payable under the Eighth MSA, although actual amounts will depend on the Company’s Adjusted Net Assets, the level of payout under the Performance-Based Award and other applicable factors. Chief Executive Officer Succession In June 2026, the Company announced that Elias J. Sabo is expected to retire as Chief Executive Officer at the end of 2026 and that Zachary T. Sawtelle, who was appointed Chief Operating Officer, is expected to succeed him as Chief Executive Officer on January 1, 2027. 47 Lugano Settlement On June 24, 2026, CODI entered into the Settlement Agreement and Plan Support Agreement described in Note B. The Settlement Documents provide for specified percentages of net inventory, tax-refund, insurance and litigation recoveries, subject to creditor approval, bankruptcy court confirmation and effectiveness of the proposed Plan of Liquidation. The settlement terms and related changes in the estimated amount and timing of recoveries resulted in a $58.0 million non-cash decrease in the fair value of the Company’s Lugano receivable during the quarter. The amount and timing of any recoveries remain uncertain and depend on, among other things, confirmation and effectiveness of the proposed Plan of Liquidation and the proceeds ultimately realized from the applicable assets and claims. Sterno Sale On March 28, 2026, we signed an Agreement and Plan of Merger (the “Merger Agreement”) to sell Sterno, which we owned approximately 92% of on a fully diluted basis. Under the Merger Agreement, WCHG Buyer, Inc. (the “Buyer”) acquired Sterno’s food service business through the merger of a Buyer subsidiary with and into Sterno, with Sterno surviving as a wholly owned subsidiary of the Buyer. Immediately before the closing, Sterno distributed all of the equity interests in its indirect wholly owned subsidiary, Rimports, LLC (“Rimports”), to Rimports Holdings, Inc., the equity of which was, in turn, distributed pro rata to Sterno’s stockholders, including the LLC (the “Rimports Distribution”). After the Rimports Distribution, Rimports (which holds Sterno’s home fragrance business) remains a majority-owned subsidiary of CODI. The Sterno sale closed on May 1, 2026. The sale price was based on an enterprise value of $292.5 million. After allocation of the purchase consideration to Sterno’s noncontrolling stockholders and payment of transaction costs, CODI received approximately $282 million of total proceeds at closing, representing amounts received with respect to the Company’s outstanding loans to Sterno, including accrued interest, and its equity interests in Sterno. The Company used the proceeds received from the sale to repay outstanding borrowings under its senior credit facility. The Rimports distribution was accounted for as a transaction between entities under common control at historical carrying amounts because the Company controlled Sterno, inclusive of Rimports, before the distribution and continues to control Rimports after the distribution. No gain or loss was recognized as a result of the distribution. Because the Company retained Rimports following the distribution, the assets and liabilities of Rimports were excluded from the held-for-sale disposal group and continue to be presented in the Company’s condensed consolidated balance sheet. Upon completion of the sale on May 1, 2026, the Company deconsolidated Sterno’s food service business and recognized a gain on the sale of approximately $182 million within income from continuing operations during the three and six months ended June 30, 2026. Altor Sale Leaseback On January 23, 2026, Altor completed a sale leaseback transaction for its manufacturing facilities in Bloomsburg, Pennsylvania; New Albany, Indiana; and El Dorado Springs, Missouri (the “Properties”). Under the purchase and sale agreement, Altor sold the land, buildings and certain integrated fixtures to the buyer/lessor for total consideration of $11.75 million. At the same time, Altor entered into a 20 year triple-net master lease to lease back all three Properties. As required by the Fifth amendment to the 2022 Credit Facility, the Company made a payment of the amount of the net proceeds to reduce the term loan under the 2022 Credit Facility by $11 million. Non-GAAP Financial Measures In addition to the results of operations contained in this report, which have been prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP"), we have also included supplemental information concerning our results of operations on a non-GAAP basis. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flow that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with GAAP in our financial statements, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable measure as calculated and presented. See “Reconciliation of Non-GAAP Financial Measures” for further discussion of our non-GAAP financial measures and related reconciliations. 48 Results of Operations The following discussion reflects a comparison of the historical results of operations of our consolidated business for the three and six months ended June 30, 2026 and June 30, 2025, and components of the results of operations for each of our operating segments on a stand-alone basis. Lugano Bankruptcy - In November 2025, Lugano and certain of its subsidiaries filed the Lugano Bankruptcy. As a result of the bankruptcy filing, the Company no longer maintained a controlling financial interest in Lugano and, accordingly, deconsolidated Lugano and its subsidiaries in accordance with ASC 810 - Consolidation. The results of operations of Lugano are included in the Company’s consolidated results through the date control was lost. From that date forward, Lugano is no longer included as an operating segment of the Company. Following deconsolidation, the Company’s continuing involvement with Lugano is limited to its claims in the bankruptcy proceedings, including any secured positions. Sale of Sterno Food Service Division - On May 1, 2026, the Company completed the sale of Sterno’s food service product division. Immediately prior to the sale, Rimports, which operates the retained home fragrance business, was separated from Sterno and remained a consolidated business of the Company. Because the sale did not qualify for discontinued operations presentation, the results of the food service product division are included in continuing operations through the date of sale. In addition, the historical results presented for Rimports include the amounts attributable to the food service product division for periods prior to the sale, which affects comparability between the current and prior-year periods. In the following results of operations, we provide (i) our actual Consolidated Results of Operations for the three and six months ended June 30, 2026 and 2025, which includes the historical results of operations of each of our businesses (operating segments) from the date of acquisition in accordance with US GAAP, and (ii) comparative historical components of the results of operations for each of our businesses on a stand-alone basis for the three and six months ended June 30, 2026 and 2025. The following results of operations at each of our businesses are not necessarily indicative of the results to be expected for a full year. All dollar amounts in the financial tables are presented in thousands. Certain amounts and percentages may not sum or recalculate due to the presentation of rounded numbers. Amounts discussed within the supporting narrative are calculated based on unrounded numbers and consequently the sum of the components may not agree to totals using the rounded numbers provided. References in the financial tables to percentage changes that are not meaningful are denoted by "NM." 49 Consolidated Results of Operations - Quarter-to-Date Three months ended June 30, 2026 compared to three months ended June 30, 2025 The following table sets forth our unaudited results of operations for the periods indicated, in dollars and as a percentage of net revenues: Three months ended June 30, 2026 June 30, 2025 Net revenues $ 424,042 100.0 % $ 478,690 100.0 % Cost of revenues 224,079 52.8 % 270,149 56.4 % Gross profit 199,963 47.2 % 208,541 43.6 % Selling, general and administrative expense 134,337 31.7 % 162,112 33.9 % Management fees 13,817 3.3 % 19,035 4.0 % Amortization expense 22,686 5.3 % 23,117 4.8 % Impairment expense — — % 31,515 6.6 % Other operating expense 149 — % — — % Operating income (loss) 28,974 6.8 % (27,238) (5.7) % Interest expense (23,895) (5.6) % (34,096) (7.1) % Amortization of debt issuance costs (2,047) (0.5) % (971) (0.2) % Loss on debt modification — — % (2,827) (0.6) % Decrease in fair value of receivable due from unconsolidated affiliate (58,000) (13.7) % — — % Gain on sale of product division 182,342 232.6 % — — % Other income (expense) (121) — % 1,713 0.4 % Income (loss) from continuing operations before income taxes 127,253 30.0 % (63,419) (13.2) % Provision for income taxes 45,379 10.7 % 17,358 3.6 % Net income (loss) from continuing operations $ 81,874 19.3 % $ (80,777) (16.9) % Net revenues Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) 5.11 $ 126,499 $ 131,442 (4,943) (3.8) % BOA 59,068 48,369 10,699 22.1 % Lugano — 26,771 (26,771) (100.0) % PrimaLoft 29,749 24,855 4,894 19.7 % The Honey Pot Co. 38,387 32,798 5,589 17.0 % Velocity 17,109 15,213 1,896 12.5 % Total Branded Consumer $ 270,812 $ 279,448 $ (8,636) (3.1) % Altor 65,662 83,305 (17,643) (21.2) % Arnold 43,222 38,432 4,790 12.5 % Rimports 44,346 77,505 (33,159) (42.8) % Total Industrial $ 153,230 $ 199,242 $ (46,012) (23.1) % Consolidated net revenues $ 424,042 $ 478,690 $ (54,648) (11.4) % Consolidated net revenues for the three months ended June 30, 2026 decreased by approximately $54.6 million, or 11.4%, compared to the corresponding period in 2025. During the three months ended June 30, 2026 compared to 2025, we saw notable increases in net revenues at BOA ($10.7 million increase), PrimaLoft ($4.9 million increase), The Honey Pot Co. ($5.6 million increase), and Arnold ($4.8 million increase). These increases in net revenue were 50 offset by decreases in net revenue at 5.11 ($4.9 million decrease), Altor ($17.6 million decrease), and Rimports ($33.2 million decrease). The decrease in net revenues at Rimports is attributable to the sale of the Sterno food service division on May 1, 2026. The net revenues of the Sterno product division are included in the historical results of operations of Rimports through the date of sale. Lugano recognized $26.8 million in revenue in the quarter ended June 30, 2025 which was nonrecurring due to the Lugano bankruptcy in November 2025. Refer to "Results of Operations - Operating Segments - Quarter-to-Date" for a more detailed analysis of net revenues by operating segment. We do not generate any revenues apart from those generated by our subsidiaries. We may generate interest income on the investment of available funds, but expect such earnings to be minimal. We make loans from the Company to our subsidiary businesses and also hold equity interests in those businesses. Cash flows coming to the Trust and the LLC are the result of interest payments on those loans, amortization of those loans and additional principal payments on those loans. However, on a consolidated basis, these items will be eliminated. Gross Profit Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) 5.11 $ 72,917 $ 70,462 $ 2,455 3.5 % BOA 39,383 31,004 8,379 27.0 % Lugano — 13,446 (13,446) (100.0) % PrimaLoft 19,321 15,898 3,423 21.5 % The Honey Pot Co. 23,748 18,427 5,321 28.9 % Velocity 5,017 4,952 65 1.3 % Total Branded Consumer $ 160,386 $ 154,189 $ 6,197 4.0 % Altor 11,996 22,715 (10,719) (47.2) % Arnold 11,367 9,183 2,184 23.8 % Rimports 16,214 22,454 (6,240) (27.8) % Total Industrial $ 39,577 $ 54,352 $ (14,775) (27.2) % Consolidated gross profit $ 199,963 $ 208,541 $ (8,578) Gross Margin Branded Consumer 59.2 % 55.2 % 4.0% Industrial 25.8 % 27.3 % (1.5)% Consolidated gross margin 47.2 % 43.6 % On a consolidated basis, gross profit decreased approximately $8.6 million during the three months ended June 30, 2026 compared to the corresponding period in 2025. We saw notable increases in gross profit at 5.11 ($2.5 million increase), BOA ($8.4 million increase), PrimaLoft ($3.4 million increase), The Honey Pot Co. ($5.3 million increase), and Arnold ($2.2 million increase). We saw decreases in gross profit at Altor ($10.7 million decrease) and Rimports ($6.2 million decrease) that corresponded to the decrease in net revenue noted above. The decrease in net revenues and gross profit at Rimports is attributable to the sale of the Sterno food service division on May 1, 2026. Lugano recognized $13.4 million in gross profit in the quarter ended June 30, 2025 which was nonrecurring due to the Lugano bankruptcy in November 2025. Gross margin was approximately 47.2% in the three months ended June 30, 2026 compared to 43.6% in the three months ended June 30, 2025. The increase in gross margin in the quarter ended June 30, 2026 as compared to the quarter ended June 30, 2025 is driven by the increase in gross margin at our consumer businesses during the quarter. Our branded consumer businesses had gross margin of 59.2% in the second quarter of 2026 as compared to 55.2% in the second quarter of 2025, while our industrial businesses had gross margin of 25.8% in the second quarter of 2026 as compared to 27.3% in the second quarter of 2025. Gross margin at several of our businesses benefited from refunds of duties previously paid under IEEPA tariffs, which were recognized as a credit to cost of goods sold upon receipt of cash, consistent with the accounting for gain contingencies. The remainder of the increase in gross margin at the branded consumer businesses was primarily attributable to product mix, particularly 51 at BOA and PrimaLoft. The decrease in gross margin at our industrial businesses was attributable to higher fixed overhead costs absorbed on a lower revenue base and higher raw material costs at Altor during the quarter. Selling, general and administrative expense Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Selling, general and administrative expense $ 134,337 $ 162,112 $(27,775) (17.1)% Consolidated selling, general and administrative expense decreased approximately $27.8 million during the three months ended June 30, 2026, compared to the corresponding period in 2025, driven primarily by expense incurred by Lugano ($28.6 million) in the prior year quarter which was nonrecurring due to the Lugano bankruptcy in November 2025, the sale of Sterno on May 1, 2026 and non-recurring exit costs and the impact of a workforce reduction at Altor ($4.5 million decrease in expense quarter over quarter). These decreases were offset by increases in selling, general and administrative expense at the corporate level ($3.1 million increase), and at The Honey Pot Co. ($2.7 million increase) due to increased product innovation and marketing investment. At the corporate level, general and administrative expense was $16.3 million in the second quarter of 2026 and $13.2 million in the second quarter of 2025, an increase of $3.1 million. The increase in general and administrative expense in the second quarter of 2026 relates to costs associated with our Lugano subsidiary and the ongoing lawsuits, as well as corporate governance changes and internal control remediation that we are implementing. Management fees Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Management fees $ 13,817 $ 19,035 $(5,218) (27.4)% Under the Management Services Agreement ("MSA"), we pay CGM (i) a base management fee equal to (a) 2% of the Company’s adjusted net assets when the adjusted net assets are less than or equal to $3.5 billion (the “Initial Threshold Fee”), and (b) an incentive fee if the adjusted net assets are greater than $3.5 billion. Such incentive management fee is subject to approval by the Compensation Committee of the Company’s board of directors. For the three months ended June 30, 2026, we incurred approximately $13.8 million in management fees as compared to $19.0 million in fees in the three months ended June 30, 2025. The decrease in the management fee in 2026 is primarily due to the deconsolidation of Lugano in November 2025 and the sale of Sterno in May 2026, which reduced the net assets used in the calculation of the management fee. The Management fee incurred in the three months ended June 30, 2025 reflects the amount incurred prior to the restatement of the Company's financial statements as the Company is not permitted under the MSA to adjust the amount owed to the Manager until the time when the restated financial information was available, which occurred upon the filing of the Company's 10-K/A on December 8, 2025. Therefore the expense recorded in the quarter ended June 30, 2025 reflects the amount that would have been due to the Manager at the time calculated, prior to the restatement of the Company's financial statements. While the MSA did not contain an express mechanism that permitted the Company to immediately clawback the overpayment of management fees, the MSA provided that future payments under the MSA would be reduced, on a dollar-for-dollar basis, by the aggregate amount of all overpaid management fees. The Company will reduce future management fee payments until the overpayment has been fully recouped. The total cash paid for Management fees in the quarter ended June 30, 2026 was $8.8 million as compared to total cash paid for Management fees for the quarter ended June 30, 2025 of $18.6 million. Refer to "Note N - Related Party Transactions" in the "Notes to the Condensed Consolidated Financial Statements" for a description of the effect of the restatement on the Management Fees. 52 Amortization expense Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Amortization expense $ 22,686 $ 23,117 $ (431) (1.9) % Amortization expense for the three months ended June 30, 2026 decreased $0.4 million as compared to the three months ended June 30, 2025 due to the effect of the sale of Sterno on May 1, 2026. Interest expense, net Three months ended June 30, 2026 June 30, 2025 (Increase) Decrease Interest expense, net (23,895) (34,096) $10,201 (29.9)% We recorded interest expense totaling $23.9 million for the three months ended June 30, 2026 compared to $34.1 million for the comparable period in 2025, a decrease of $10.2 million. During 2026, the Company has paid down approximately $300 million of principal on the 2022 Term Loan, reducing the total interest expense incurred. In the three months ended June 30, 2026, interest expense associated with the 2022 Term Loan was approximately $6.3 million as compared to $9.8 million in the three months ended June 30, 2025. Interest expense in the three months ended June 30, 2025 also included $6.9 million related to financing arrangements at Lugano, which was deconsolidated in November 2025. The decrease in interest expense was partially offset by higher interest expense on the Company’s Senior Notes resulting from the increased principal amount of the Senior Notes following the paid-in-kind payments made in 2025 in connection with the indenture forbearance agreement described in the 2025 Form 10-K. Loss on debt modification During the second quarter of 2025, the Company entered into a forbearance agreement which reduced the aggregate borrowing amount available for revolving commitments to $100 million from $600 million. As a result of the reduction in available revolving commitments, the Company recognized $2.8 million in loss on debt modification in the second quarter of 2025. Decrease in fair value of receivable due from unconsolidated affiliate The receivable due from an unconsolidated affiliate represents the Company’s estimate of the fair value of its secured claim related to intercompany loans to Lugano, which is currently subject to bankruptcy proceedings. On June 24, 2026, the Company entered into a settlement agreement and a plan support agreement relating to the proposed resolution of claims alleged against the Company and its related parties by or on behalf of Lugano or its bankruptcy estate. The terms of those agreements changed the estimated amount and timing of the Company’s expected recoveries on its secured claim, resulting in a $58 million decrease in the fair value of the receivable at June 30, 2026. Gain on sale of product division On May 1, 2026, the Company sold the Sterno food service product division. The Company received approximately $282 million of total proceeds at closing, representing amounts received with respect to the Company’s outstanding loans to Sterno, including accrued interest, and its equity interests in Sterno. The Company recorded a gain on the sale of Sterno in the quarter ending June 30, 2026 of $182.3 million. Other income (expense) Three months ended June 30, 2026 June 30, 2025 (Increase) Decrease Other income (expense), net (121) 1,713 $(1,834) (107.1)% For the quarter ended June 30, 2026, we recorded $0.1 million in other expense as compared to $1.7 million in other income in the quarter ended June 30, 2025, an increase in expense of $1.8 million. Other income (expense) typically reflects the movement in foreign currency at our subsidiary businesses with international operations, gains or (losses) realized on the sale of property, plant and equipment, and expenses incurred or income earned that are 53 not considered a part of our operations. In both the current quarter and prior year comparable quarter, the expense primary relates to foreign currency gains and losses. Provision for income taxes Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Provision for income taxes $ 45,379 $ 17,358 $ 28,021 161.4 % Effective tax rate 35.7 % (27.4) % We had an income tax provision of $45.4 million during the three months ended June 30, 2026 compared to an income tax provision of $17.4 million during the same period in 2025, an increase of $28.0 million. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. In the current year, the effective tax rate was impacted by the sale of Sterno and the tax effect at the Trust, the effect of foreign taxes and changes in valuation allowances, while in the prior year, the primary item affecting the effective tax rate was changes in valuation allowance. In connection with the sale of Sterno, we recorded a liability for unrecognized tax benefits of $21.3 million in the quarter ended June 30, 2026, and approximately $5.5 million in interest associated with certain previously recognized uncertain tax positions that had not been accrued in prior reporting periods, substantially all of which relates to prior years. 54 Results of Operations - Operating Segments - Quarter-to-Date Three months ended June 30, 2026 compared to three months ended June 30, 2025 Branded Consumer Businesses 5.11 Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 126,499 $ 131,442 $ (4,943) (3.8) % Net sales for the three months ended June 30, 2026 were $126.5 million as compared to net sales of $131.4 million for the three months ended June 30, 2025, a decrease of $4.9 million, or 3.8%. The decrease was primarily attributable to a decrease in direct-to-consumer sales of approximately $4.0 million, reflecting an intentional reduction in promotional activity compared to the prior year period, and a decrease in domestic wholesale sales of approximately $3.7 million, due to customer inventory reductions. These decreases were partially offset by an increase in international sales of approximately $2.4 million, driven by growth in EMEA, Australia, and Canada. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 12,249 $ 9,754 $ 2,495 25.6 % Segment operating margin 9.7 % 7.4 % 2.3% Segment operating income for the three months ended June 30, 2026 was $12.2 million, an increase of $2.5 million when compared to segment operating income of $9.8 million for the same period in 2025. The increase was primarily attributable to improved gross margin and disciplined operating expense management, which more than offset the impact of lower net sales. Gross margin benefited from a higher mix of full-price sales and from refunds of duties previously paid under IEEPA tariffs, which were recognized as a credit to cost of goods sold upon receipt of cash, consistent with the accounting for gain contingencies. Selling, general and administrative expenses were essentially flat compared to the prior year period, as lower payroll expense was offset by higher performance-based bonus accruals and increased investment in brand marketing.Segment operating margin was 9.7% in the second quarter of 2026 and 7.4% in the second quarter of 2025. BOA Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 59,068 $ 48,369 $ 10,699 22.1 % Net sales for the three months ended June 30, 2026 were $59.1 million as compared to net sales of $48.4 million for the three months ended June 30, 2025, an increase of $10.7 million, or 22.1%. BOA adult premium performance sales increased across key industries including Athletic, Workwear, Cycling, Snowsports, Outdoor, Helmets, and Performance Bracing, partially offset by reduced kids-based business in China. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 20,051 $ 14,046 $ 6,005 42.8 % Segment operating margin 33.9 % 29.0 % 4.9% Segment operating income for the three months ended June 30, 2026 was $20.1 million, an increase of $6.0 million when compared to segment operating income of $14.0 million for the same period in 2025. The increase in segment 55 operating income was driven by higher net sales, improved product margins, partially offset by an increase in selling, general, and administrative expense related to BOA's bonus plan. Segment operating margin increased to 33.9% in the second quarter of 2026 from 29.0% in the second quarter of 2025, primarily driven by improved gross margins. PrimaLoft Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 29,749 $ 24,855 $ 4,894 19.7 % Net sales for the three months ended June 30, 2026 were $29.7 million, an increase of $4.9 million as compared to net sales of $24.9 million for the three months ended June 30, 2025. The increase in net sales in the current quarter versus the quarter ended June 30, 2025 is primarily attributable to higher sales to Asia-based brand partners, reflecting continued strong demand for outdoor products in the region, as well as the Company's ongoing success in establishing new brand partnerships that have expanded its customer base. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 7,731 $ 4,890 $ 2,841 58.1 % Segment operating margin 26.0 % 19.7 % 6.3% Segment operating income for the three months ended June 30, 2026 was $7.7 million, an increase of $2.8 million when compared to segment operating income of $4.9 million for the same period in 2025, driven by higher net sales and improved gross margins in the current quarter. Segment operating margin was 26.0% in the second quarter of 2026 as compared to 19.7% in the second quarter of 2025. The Honey Pot Co. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 38,387 $ 32,798 $ 5,589 17.0 % Net sales for the three months ended June 30, 2026 were $38.4 million, an increase of $5.6 million or 17.0% from net sales of $32.8 million for the three months ended June 30, 2025. The increase in net sales was primarily due to strong volume growth and market share gains in the Period Care product line, particularly in mass retail, drugstores and online channels, and the net pricing benefit related to Period Care pack price optimization implemented in late 2025. Overall, volume and share growth continued to be supported by compelling innovation, targeted investments in demand generation, and disciplined investments in capabilities to accelerate growth. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 6,356 $ 3,705 $ 2,651 71.6 % Segment operating margin 16.6 % 11.3 % 5.3% Segment operating income for the three months ended June 30, 2026 was $6.4 million, an increase of $2.7 million when compared to segment operating income of $3.7 million for the same period in 2025. The increase was primarily driven by higher net sales and improved operating leverage, partially offset by increased investments in marketing and human capital. Selling, general and administrative expense as a percentage of net sales was 34.2% in the second quarter of 2026 and 31.9% in the second quarter of 2025. Segment operating margin in the second quarter of 2026 was 16.6% as compared to 11.3% in the second quarter of 2025. 56 Velocity Outdoor Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 17,109 $ 15,213 $ 1,896 12.5 % Net sales for the three months ended June 30, 2026 were $17.1 million, an increase of $1.9 million or 12.5%, compared to net sales of $15.2 million in the same period in 2025. The increase in net sales for the three months ended June 30, 2026 was primarily driven by increased archery and apparel sales through national retailer channels. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating loss $ (877) $ (911) $ 34 (3.7) % Segment operating margin (5.1) % (6.0) % 0.9% Segment operating loss for the three months ended June 30, 2026 was flat compared to the same period in 2025, reflecting an improvement of 3.7%. The modest improvement was driven by higher net sales combined with flat operating expenses. Segment operating margin was (5.1)% in the second quarter of 2026 as compared to (6.0)% in the second quarter of 2025. Industrial Businesses Altor Solutions Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 65,662 $ 83,305 $ (17,643) (21.2) % Net sales for the quarter ended June 30, 2026 were $65.7 million, a decrease of $17.6 million, or 21.2%, compared to net sales of $83.3 million in the quarter ended June 30, 2025. The decrease in net sales during the second quarter was primarily attributable to lower sales volumes resulting from reduced demand in the industrial white goods market and shifting market conditions in the perishable and cold chain markets. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 1,028 $ 7,266 $ (6,238) (85.9) % Segment operating margin 1.6 % 8.7 % (7.1)% Segment operating income was $1.0 million in the three months ended June 30, 2026, a decrease of $6.2 million as compared to the three months ended June 30, 2025. Segment operating margin was 1.6% in the second quarter of 2026 as compared to 8.7% in the second quarter of 2025, with the decrease driven by lower sales volumes, the deleveraging effect of fixed costs, as well as a 21% increase in the index driving the main raw materials purchase price and freight inflation driven by rising oil costs. Gross margin was 18.3% in the three months ended June 30, 2026 and 27.3% in the three months ended June 30, 2025. 57 Arnold Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 43,222 $ 38,432 $ 4,790 12.5 % Net sales for the three months ended June 30, 2026 were approximately $43.2 million, an increase of $4.8 million compared to net sales of $38.4 million in the same period in 2025. The increase in net sales was primarily attributable to growing demand for non-China sourced permanent magnets, partially offset by material and production constraints. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 3,582 $ 180 $ 3,402 NM Segment operating margin 8.3 % 0.5 % 7.8% Segment operating income for the three months ended June 30, 2026 was approximately $3.6 million, an increase of $3.4 million when compared to the same period in 2025. The increase in segment operating income was driven by higher revenue and the resulting operating leverage, and non-recurring costs incurred in the first half of 2025. Segment operating margin was 8.3% in the second quarter of 2026 as compared to 0.5% in the second quarter of 2025. Rimports (including Sterno's food service business through May 1, 2026) Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 44,346 $ 77,505 $ (33,159) (42.8) % Net sales for the three months ended June 30, 2026 were approximately $44.3 million, a decrease of $33.2 million, or 42.8%, compared to net sales of $77.5 million in the same period in 2025. The decrease was primarily attributable to the sale of Sterno Products’ food service business in May 2026. Excluding Sterno, Rimports-only net sales for the quarter-to-date period ended June 30, 2026 were $30.9 million, a decrease of $5.4 million, or 14.8%, compared to $36.3 million in the same period in 2025. The Rimports variance was primarily driven by a reduction in key distribution within the private label business. Three months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 7,396 $ 11,111 $ (3,715) (33.4) % Segment operating margin 16.7 % 14.3 % 2.3% Segment operating income for the three months ended June 30, 2026 was approximately $7.4 million, a decrease of $3.7 million compared to the three months ended June 30, 2025, The decrease was primarily attributable to the sale of Sterno Products’ food service business in May 2026. Segment operating margin was 16.7% in the second quarter of 2026 as compared to 14.3% in the second quarter of 2025. Excluding Sterno, Rimports-only operating income for the quarter-to-date period ended June 30, 2026 was $3.7 million, a decrease of $0.2 million, or 6.0%, compared to $3.9 million in the same period in 2025. The Rimports variance was primarily driven by the reduction in revenue partially offset by IEEPA tariff refunds received within the quarter, which were recognized as a credit to cost of goods sold upon receipt of cash. 58 Consolidated Results of Operations - Year-to-Date Six months ended June 30, 2026 compared to six months ended June 30, 2025 The following table sets forth our unaudited results of operations for the periods indicated, in dollars and as a percentage of net revenues: Six months ended June 30, 2026 June 30, 2025 Net revenues $ 850,897 100.0 % $ 932,465 100.0 % Cost of revenues 461,576 54.2 % 527,892 56.6 % Gross profit 389,321 45.8 % 404,573 43.4 % Selling, general and administrative expense 266,347 31.3 % 312,489 33.5 % Management fees 29,751 3.5 % 37,898 4.1 % Amortization expense 45,530 5.4 % 46,468 5.0 % Impairment expense 20,500 2.4 % 31,515 3.4 % Other operating (income) expense (10,234) (1.2) % — — % Operating income (loss) 37,427 4.4 % (23,797) (2.6) % Interest expense (51,390) (6.0) % (69,947) (7.5) % Amortization of debt issuance costs (4,094) (0.5) % (2,096) (0.2) % Loss on debt modification — — % (2,827) (0.3) % Decrease in fair value of receivable due from unconsolidated affiliate (58,000) (6.8) % — — % Gain on sale of Sterno 182,342 21.4 % — — % Other income (expense) (2,799) (0.3) % (11,968) (1.3) % Income (loss) from continuing operations before income taxes 103,486 12.2 % (110,635) (11.9) % Provision for income taxes 52,443 6.2 % 19,896 2.1 % Net income (loss) from continuing operations $ 51,043 6.0 % $ (130,531) (14.0) % Net revenues Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) 5.11 $ 250,470 $ 260,812 $ (10,342) (4.0) % BOA 111,176 97,246 13,930 14.3 % Lugano — 53,616 (53,616) (100.0) % PrimaLoft 51,666 48,500 3,166 6.5 % The Honey Pot Co. 83,546 68,989 14,557 21.1 % Velocity 30,935 28,414 2,521 8.9 % Total Branded Consumer $ 527,793 $ 557,577 $ (29,784) (5.3) % Altor 130,304 159,562 (29,258) (18.3) % Arnold 83,404 72,440 10,964 15.1 % Rimports 109,396 142,886 (33,490) (23.4) % Total Industrial $ 323,104 $ 374,888 $ (51,784) (13.8) % Consolidated net revenues $ 850,897 $ 932,465 $ (81,568) (8.7) % Consolidated net revenues for the six months ended June 30, 2026 decreased by approximately $81.6 million, or 8.7%, compared to the corresponding period in 2025. During the six months ended June 30, 2026 compared to 2025, we saw notable increases in net revenues at BOA ($13.9 million increase), The Honey Pot Co. ($14.6 million increase), and Arnold ($11.0 million increase). These increases in net revenue were offset by decreases in net 59 revenue at 5.11 ($10.3 million decrease) and Altor ($29.3 million decrease). Lugano recognized $53.6 million in revenue in the six months ended June 30, 2025 which was nonrecurring due to the Lugano bankruptcy in November 2025. Rimports revenue decreased $33.5 million due to the sale of the Sterno product division on May 1, 2026. Refer to "Results of Operations - Operating Segments - Year-to-Date" for a more detailed analysis of net revenues by operating segment. We do not generate any revenues apart from those generated by our subsidiaries. We may generate interest income on the investment of available funds, but expect such earnings to be minimal. We make loans from the Company to our subsidiary businesses and also hold equity interests in those businesses. Cash flows coming to the Trust and the LLC are the result of interest payments on those loans, amortization of those loans and additional principal payments on those loans. However, on a consolidated basis, these items will be eliminated. Gross Profit Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) 5.11 $ 140,501 $ 140,210 $ 291 0.2 % BOA 73,512 62,223 11,289 18.1 % Lugano — 26,624 (26,624) (100.0) % PrimaLoft 33,404 31,035 2,369 7.6 % The Honey Pot Co. 50,575 38,458 12,117 31.5 % Velocity 9,593 8,316 1,277 15.4 % Total Branded Consumer $ 307,585 $ 306,866 $ 719 0.2 % Altor 25,138 41,751 (16,613) (39.8) % Arnold 21,939 16,204 5,735 35.4 % Sterno 34,659 39,752 (5,093) (12.8) % Total Industrial $ 81,736 $ 97,707 $ (15,971) (16.3) % Consolidated gross profit $ 389,321 $ 404,573 $ (15,252) (3.8) % Gross Margin Branded Consumer 58.3 % 55.0 % 3.2% Industrial 25.3 % 26.1 % (0.8)% Consolidated gross margin 45.8 % 43.4 % 2.4% On a consolidated basis, gross profit decreased approximately $15.3 million during the six months ended June 30, 2026 compared to the corresponding period in 2025. We saw notable increases in gross profit at BOA ($11.3 million increase), The Honey Pot Co. ($12.1 million increase) and Arnold ($5.7 million increase) during the six month period. We saw decreases in gross profit at Altor ($16.6 million decrease) and Rimports ($5.1 million due to the sale of Sterno in May 2026) which correspond to the decrease in net revenue in the first six months of 2026. Lugano recognized $26.6 million in gross profit during the six months ended June 30, 2025 that was nonrecurring due to the Lugano bankruptcy. Gross margin was 45.8% in the six months ended June 30, 2026 and 43.4% the six months ended June 30, 2025. Our branded consumer businesses had gross margin of 58.3% in the six months ended June 30, 2026 as compared to 55.0% in the six months ended June 30, 2025, with increases at each of our branded consumer business during the six months ended June 30, 2026. Gross margin at several of our businesses benefited from refunds of duties previously paid under IEEPA tariffs, which were recognized as a credit to cost of goods sold upon receipt of cash, consistent with the accounting for gain contingencies. Our industrial businesses had gross margin of 25.3% in the six months ended June 30, 2026 as compared to 26.1% in the six months ended June 30, 2025. The decrease in gross margin at our industrial businesses was attributable to higher fixed overhead costs absorbed on a lower revenue base at Altor, offset by improved gross margins at Arnold and Rimports during the six months ended June 30, 2026. 60 Selling, general and administrative expense Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Selling, general and administrative expense $ 266,347 $ 312,489 $ (46,142) (14.8) % Consolidated selling, general and administrative expense decreased approximately $46.1 million during the six months ended June 30, 2026, compared to the corresponding period in 2025, driven primarily by the impact of Lugano's bankruptcy. Lugano had selling, general and administrative expense of $55.2 million in the six months ended June 30, 2025 that was nonrecurring due to the November 2025 bankruptcy of Lugano. This decrease was offset by an increase in corporate expenses of $11.5 million in 2026 versus the same period in 2025 due to costs associated with the Lugano investigation, litigation, governmental-investigation, governance and internal-control remediation. At the corporate level, general and administrative expense was $29.3 million in the six months ended June 30, 2026 and $17.8 million in the six months ended June 30, 2025. The increase was primarily attributable to costs associated with Lugano and the ongoing lawsuits and corporate governance changes that we are making. Because the Lugano investigation commenced in April 2025, the prior-year expense included lower related costs. We continue to incur significant investigation-related and other associated costs, which may pressure corporate expenses in subsequent periods. Management fees Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Management fees $ 29,751 $ 37,898 $ (8,147) (21.5) % For the six months ended June 30, 2026, we incurred $29.8 million in management fees as compared to $37.9 million in fees in the six months ended June 30, 2025. The decrease in the management fee in 2026 is primarily due to the deconsolidation of Lugano in November 2025 and the sale of Sterno in May 2026, which reduced the net assets used in the calculation of the management fee. The Management fee incurred in the six months ended June 30, 2025 reflects the amount incurred prior to the restatement of the Company's financial statements as the Company is not permitted under the MSA to adjust the amount owed to the Manager until the time when the restated financial information was available, which occurred upon the filing of the Company's 10-K/A on December 8, 2025. Therefore the expense recorded in the six months ended June 30, 2025 reflects the amount that would have been due to the Manager at the time calculated, prior to the restatement of the Company's financial statements. While the MSA did not contain an express mechanism that permitted the Company to immediately clawback the overpayment of management fees, the MSA provided that future payments under the MSA would be reduced, on a dollar-for-dollar basis, by the aggregate amount of all overpaid management fees. The Company will reduce future management fee payments until the overpayment has been fully recouped. The total cash paid for Management fees in the six months ended ended June 30, 2026 was $15.4 million as compared to total cash paid for Management fees for the six months ended June 30, 2025 of $37.7 million. Refer to "Note N - Related Party Transactions" in the "Notes to the Condensed Consolidated Financial Statements" for a description of the effect of the restatement on the Management Fees. Amortization expense Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Amortization expense $ 45,530 $ 46,468 $ (938) (2.0) % Amortization expense for the six months ended June 30, 2026 decreased $0.9 million as compared to the six months ended June 30, 2025 due to the effect of the sale of Sterno on May 1, 2026. 61 Impairment expense Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Impairment expense $ 20,500 $ 31,515 $ (11,015) (35.0) % In connection with the Company's annual goodwill impairment test in 2026, the Company recorded a goodwill impairment charge at the PrimaLoft reporting unit of $20.5 million. Refer to "Note E - Goodwill and Other Intangible Assets" in the "Notes to the Condensed Consolidated Financial Statements" for additional information. In the prior year period, the Company recorded $31.5 million in impairment expense related to long-lived assets at Lugano. Other operating (income) expense Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Other (income) expense (10,234) — $ (10,234) — % Other operating income represents the gain on the sale leaseback completed at Altor in the six months ended June 30, 2026. Interest expense, net Six months ended June 30, 2026 June 30, 2025 (Increase) Decrease Interest expense (51,390) (69,947) $ 18,557 (26.5) % We recorded interest expense totaling $51.4 million for the six months ended June 30, 2026 compared to $69.9 million for the comparable period in 2025, a decrease of $18.6 million. Interest expense in the six months ended June 30, 2025 includes $15.8 million related to financing arrangements at Lugano, which was deconsolidated in November 2025. Excluding the impact of the Lugano financing arrangement in the prior-year period, interest expense decreased $2.8 million, primarily due to pay down of the Company's 2022 Credit Facility during 2026, offset by higher interest expense on the Company’s Senior Notes resulting from the increased principal amount of the Senior Notes following the paid-in-kind payments made in 2025 in connection with the indenture forbearance agreement described in the 2025 Form 10-K. Loss on debt modification During the second quarter of 2025, the Company entered into a forbearance agreement which reduced the aggregate borrowing amount available for revolving commitments to $100 million from $600 million. As a result of the reduction in available revolving commitments, the Company recognized $2.8 million in loss on debt modification in the second quarter of 2025. Decrease in fair value of receivable due from unconsolidated affiliate The receivable due from an unconsolidated affiliate represents the Company’s estimate of the fair value of its secured claim related to intercompany loans to Lugano, which is currently subject to bankruptcy proceedings. On June 24, 2026, the Company entered into a settlement agreement and a plan support agreement relating to the proposed resolution of claims alleged against the Company and its related parties by or on behalf of Lugano or its bankruptcy estate. The terms of those agreements changed the estimated amount and timing of the Company’s expected recoveries on its secured claim, resulting in a $58 million decrease in the fair value of the receivable at June 30, 2026. Gain on sale of product division On May 1, 2026, the Company sold the Sterno food service product division. The Company received approximately $282 million of total proceeds at closing, representing amounts received with respect to the Company’s outstanding 62 loans to Sterno, including accrued interest, and its equity interests in Sterno. The Company recorded a gain on the sale of Sterno in the quarter ending June 30, 2026 of $182.3 million. Other income (expense) Six months ended June 30, 2026 June 30, 2025 (Increase) Decrease Other income (expense) (2,799) (11,968) $ 9,169 (76.6) % For the six months ended June 30, 2026, other expense, net was $2.8 million, compared to $12.0 million in other expense in the six months ended June 30, 2025. Other income (expense) generally reflects foreign currency movements at our subsidiary businesses with international operations, gains or (losses) realized on the sale of property, plant and equipment, and expenses incurred a finance charge at the corporate entity related to Lugano. The other expense in the three months ended June 30, 2025 primarily represents expense recognized at Lugano related to losses resulting from the accounting for the transactions associated with the off-balance sheet arrangements ($11.7 million in expense in the six months ended June 30, 2025). The $10.2 million Altor sale-leaseback gain is presented separately in other operating (income) expense and is not included in this caption. Income taxes Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Provision for income taxes $ 52,443 $ 19,896 $ 32,547 163.6 % Effective tax rate 50.7 % (18.0) % We had an income tax provision of $52.4 million during the six months ended June 30, 2026 compared to an income tax provision of $19.9 million during the same period in 2025, an increase of $32.5 million due to the reduction in the loss from continuing operation before income taxes and driven by the tax effect at the Trust of the sale of the Sterno product division. Our effective tax rate in the six months ended June 30, 2026 was 50.7%, compared to an effective income tax rate of 18.0% during the same period in 2025. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. In the current year, the effective tax rate was impacted by the sale of the Sterno product division, the goodwill impairment at PrimaLoft, the effect of state taxes and changes in valuation allowances. In connection with the sale of Sterno, we recorded a liability for unrecognized tax benefits of $21.3 million in the six months ended June 30, 2026, and approximately $5.5 million in interest associated with certain previously recognized uncertain tax positions that had not been accrued in prior reporting periods, substantially all of which relates to prior years. Results of Operations - Operating Segments - Year-to-Date Six months ended June 30, 2026 compared to six months ended June 30, 2025 Branded Consumer Businesses 5.11 Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 250,470 $ 260,812 $ (10,342) (4.0) % Net sales for the six months ended June 30, 2026 were $250.5 million as compared to net sales of $260.8 million for the six months ended June 30, 2025, a decrease of $10.3 million, or 4.0%. The decline was primarily attributable to a decrease in direct-to-consumer sales of approximately $7.9 million, reflecting an intentional reduction in promotional activity compared to the prior year period, and a decrease in domestic wholesale sales of approximately $3.4 million, due to customer inventory reductions. These decreases were partially offset by increases in international sales of approximately $0.6 million, driven by growth in Australia and Canada. 63 Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 19,960 $ 18,327 $ 1,633 8.9 % Segment operating margin 8.0 % 7.0 % 0.9% Segment operating income for the six months ended June 30, 2026 was $20.0 million, an increase of $1.6 million when compared to segment operating income of $18.3 million for the same period in 2025. The increase was primarily attributable to improved gross margin and disciplined operating expense management, which more than offset the impact of lower net sales. Gross margin performance benefited from a higher mix of full-price sales, and included refunds of duties in the second quarter previously paid under IEEPA tariffs, which were recognized as a credit to cost of goods sold upon receipt of cash, consistent with the accounting for gain contingencies. Selling, general and administrative expenses decreased modestly compared to the prior year period, driven by lower payroll expense, partially offset by higher performance-based bonus accruals and increased investment in brand marketing. Segment operating margin was 8.0% in the six months ended June 30, 2026 and 7.0% in the six months ended June 30, 2025. BOA Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 111,176 $ 97,246 $ 13,930 14.3 % Net sales for the six months ended June 30, 2026 were $111.2 million as compared to net sales of $97.2 million for the six months ended June 30, 2025, an increase of $13.9 million, or 14.3%. BOA adult premium performance sales increased across key industries including Athletic, Workwear, Cycling, Snowsports, Outdoor, Helmets, and Performance Bracing, partially offset by reduced kids-based business in China. This continued momentum was primarily a result of market share gains in many of BOA's key industries. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 36,181 $ 27,701 $ 8,480 30.6 % Segment operating margin 32.5 % 28.5 % 4.1% Segment operating income for the six months ended June 30, 2026 was $36.2 million, as compared to segment operating income of $27.7 million for the same period in 2025, an increase of $8.5 million or 30.6%. The increase in operating income was driven by higher net sales and improved gross profit margins, partially offset by an increase in selling, general, and administrative expense related to BOA’s bonus plan. Segment operating margin was 32.5% in the six months ended June 30, 2026 and 28.5% in the six months ended June 30, 2025. PrimaLoft Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 51,666 $ 48,500 $ 3,166 6.5 % Net sales for the six months ended June 30, 2026 were $51.7 million, an increase of $3.2 million as compared to net sales of $48.5 million for the six months ended June 30, 2025. The increase in net sales in the current period versus the six months ended June 30, 2025 is primarily attributable to higher sales to Asia-based brand partners, reflecting continued strong demand for outdoor products in the region, as well as the Company's ongoing success in establishing new brand partnerships that have expanded its customer base. 64 Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income (loss) $ (9,867) $ 9,048 $ (18,915) (209.1) % Segment operating margin (19.1) % 18.7 % (37.8)% Segment operating loss for the six months ended June 30, 2026 was $9.9 million, a decrease of $18.9 million when compared to segment operating income of $9.0 million for the same period in 2025. PrimaLoft recorded a goodwill impairment charge of $20.5 million in the first quarter of 2026, which was the primary driver of the decrease. The decrease was partially offset by higher sales volume during the period. Segment operating margin was (19.1)% in the six months ended June 30, 2026 as compared to 18.7% in the six months ended June 30, 2025. The Honey Pot Co. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 83,546 $ 68,989 $ 14,557 21.1 % Net sales for the six months ended June 30, 2026 were $83.5 million, an increase of $14.6 million or 21.1% from net sales of $69.0 million for the six months ended June 30, 2025. The increase in net sales is primarily due to strong volume growth across retail channels, the benefits of price pack architecture optimization implemented in late 2025, and modestly lower trade investment versus the prior year. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 15,923 $ 8,541 $ 7,382 86.4 % Segment operating margin 19.1 % 12.4 % 6.7% Segment operating income for the six months ended June 30, 2026 was $15.9 million, an increase of $7.4 million when compared to segment operating income of $8.5 million for the same period in 2025. The increase was primarily driven by higher net sales and improved operating leverage, partially offset by increased investments in marketing and human capital. Selling, general and administrative expense as a percentage of net sales was 31.3% in the first half of 2026 and 31.0% in the first half of 2025.Segment operating margin in the six months ended June 30, 2026 was 19.1% as compared to 12.4% in the six months ended June 30, 2025. Velocity Outdoor Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 30,935 $ 28,414 $ 2,521 8.9 % Net sales for the six months ended June 30, 2026 were $30.9 million, an increase of $2.5 million or 8.9%, compared to net sales of $28.4 million in the same period in 2025. The increase in net sales for the six months ended June 30, 2026 was primarily driven by increased archery and apparel sales through national retail chains and direct to consumer channels. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating loss $ (2,000) $ (3,736) $ 1,736 (46.5) % Segment operating margin (6.5) % (13.1) % 6.7% Segment operating loss for the six months ended June 30, 2026 was $2.0 million compared to segment operating loss of $3.7 million for the same period in 2025. Segment operating margin was (6.5)% in the six months ended 65 June 30, 2026 as compared to (13.1)% in the six months ended June 30, 2025. The improvement was primarily driven by higher net sales and increased gross margins attributable to product mix along with favorable operating expenses, with gross margins of 31.0% in the six months ended June 30, 2026 as compared to 29.3% in the six months ended June 30, 2025. Industrial Businesses Altor Solutions Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 130,304 $ 159,562 $ (29,258) (18.3) % Net sales for the six months ended June 30, 2026 were $130.3 million, a decrease of $29.3 million, or (18.3)%, compared to net sales of $159.6 million in the six months ended June 30, 2025. The decrease in net sales during the period was primarily attributable to reduced consumer demand in the industrial white goods market, the introduction of alternative shipping materials in the GLP-1 market, and a life science customer's transition from a direct supply model to third-party distribution. Net sales in the perishables market increased in the current year, reflecting a recovery from the prior-year decline in the market. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 12,595 $ 12,252 $ 343 2.8 % Segment operating margin 9.7 % 7.7 % 2.0% Segment operating income was $12.6 million in the six months ended June 30, 2026, a decrease of $0.3 million as compared to the six months ended June 30, 2025. Segment operating income in the current year includes income of $10.2 million from a sale leaseback transaction that occurred in the first quarter of 2026. Excluding the income from the sale leaseback transaction, Altor would have had a decrease in segment operating income driven by reduced sales volumes the deleveraging effect of fixed costs and increases in raw material costs as a result of increasing oil prices, which negatively impacted gross margins in the current period. Gross margin was 19.3% in the six months ended June 30, 2026 and 26.2% in the six months ended June 30, 2025. Segment operating margin was 9.7% in the first six months of 2026 as compared to 7.7% in the first six months of 2025. Arnold Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 83,404 $ 72,440 $ 10,964 15.1 % Net sales for the six months ended June 30, 2026 were approximately $83.4 million, an increase of $11.0 million compared to net sales of $72.4 million in the same period in 2025. The increase in net sales was primarily attributable to growing demand for non-China sourced permanent magnets. The uncertain geopolitical climate and heightened licensing requirements to export certain rare earth and strategic minerals out of China are causing significant supply chain disruptions. As a result, Arnold is seeing increased demand from customers seeking more predictable and sustainable, non-China sourced magnet materials. Arnold also benefitted during the six-month period from a softer year-over-year comparison, as the first half of 2025 had lower demand and delays in production startup at new facilities. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 5,913 $ (732) $ 6,645 NM Segment operating margin 7.1 % (1.0) % 8.1% 66 Segment operating income for the six months ended June 30, 2026 was approximately $5.9 million, an increase of $6.6 million when compared to the same period in 2025. The improvement in segment operating results was driven primarily by strong sales growth and resulting operating leverage, combined with non-recurring costs incurred in the first half of 2025. Segment operating margin was 7.1% in the first six months of 2026 as compared to (1.0)% in the first six months of 2025. Rimports (including Sterno's food service business through May 1, 2026) Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Net sales $ 109,396 $ 142,886 $ (33,490) (23.4) % Net sales for the six months ended June 30, 2026 were approximately $109.4 million, a decrease of $(33.5) million, or 23.4%, compared to net sales of $142.9 million in the same period in 2025. The decrease was primarily attributable to the sale of Sterno Products’ food service business in May 2026. Sterno had net sales of $45.1 million for the six months ended June 30, 2026 (through the date of disposition of May 1, 2026) and net sales of $71.5 million for the six months ended June 30, 2025. The Rimports variance was primarily driven by a reduction in key distribution within the private label business. Six months ended June 30, 2026 June 30, 2025 Increase (Decrease) Segment operating income $ 14,618 $ 17,469 $ (2,851) (16.3) % Segment operating margin 13.4 % 12.2 % 1.2 % Segment operating income for the six months ended June 30, 2026 was approximately $14.6 million, a decrease of $2.9 million compared to the six months ended June 30, 2025, The decrease was primarily attributable to the sale of Sterno Products’ food service business in May 2026. Segment operating margin was 13.4% in the first six months of 2026 as compared to 12.2% in the first six months of 2025. Sterno had segment operating income of $8.5 million for the six months ended June 30, 2026 (through the date of disposition of May 1, 2026) and segment operating income of $11.9 million for the six months ended June 30, 2025. The Rimports variance was primarily driven by IEEPA tariff refunds received within the period partially offset by the decline in revenue. Liquidity and Capital Resources We generate cash primarily from the operations of our subsidiaries, and we have the ability to borrow under our 2022 Credit Facility to fund our operating, investing and financing activities. Our principal uses of cash are operating expenses, management fees, capital expenditures, working capital needs, debt service, distributions on the preferred shares of the Trust and strategic growth initiatives, including acquisitions. In connection with the Lugano Investigation and the restatement of our previously issued financial statements, we incurred significant accounting, financing, legal and other professional costs, including costs related to litigation, governmental investigations, financing arrangements and internal control remediation. We also expect to continue to incur costs associated with ongoing securities litigation, derivative litigation, governmental investigations and efforts to remediate and strengthen internal controls. Beginning in 2027, the Ninth MSA will reduce the base management fee rates, cap the 2027 base management fee at $30.0 million, establish the 2027 Aggregate Fee Cap and replace the existing incentive management fee with the Share Alignment Award and Performance-Based Award. The revised fee and award structure is expected to reduce total management fees for 2027 relative to the amounts that otherwise would have been payable under the Eighth MSA, although actual amounts will depend on the Company’s Adjusted Net Assets, the level of payout under the Performance-Based Award and other applicable factors. As of June 30, 2026, we had $1,029.4 million of indebtedness associated with our 5.250% Senior Notes due 2029, $308.8 million of indebtedness associated with our 5.000% Senior Notes due 2032, $252.3 million outstanding under the term loans under our 2022 Credit Facility, and no revolving borrowings outstanding under the 2022 Credit Facility. At June 30, 2026, net availability under the 2022 Credit Facility was $97.2 million after giving effect to approximately $0.8 million of outstanding letters of credit. Long-term debt liquidity requirements consist of payment 67 in full of the Senior Notes upon their respective maturity dates, principal and interest payments under the term loans under the 2022 Credit Facility, and repayment of any revolving borrowings under the 2022 Credit Facility upon maturity. Amounts outstanding under the 2022 Credit Facility mature on July 12, 2027. In addition, on December 19, 2025, the LLC entered into a Fifth Amendment to the 2022 Credit Facility (the “Fifth Amendment”) and a related transaction letter (the “Transaction Letter”) and, pursuant to the Transaction Letter, if (i) the Consolidated Total Leverage Ratio is not less than 4.50:1.00 and (ii) the Consolidated Senior Secured Leverage Ratio is not less than 1:00 to 1:00, as of the last day of the fiscal quarters ending June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027, respectively, the Company is required to pay to the Administrative Agent, for the ratable benefit of the Lenders, the milestone fees in the amount of $5,000,000, $6,500,000, $8,000,000 and $9,500,000, respectively, subject to certain conditions. No amount is due at June 30, 2026 related to the Transaction Letter as the Consolidated Total Leverage Ratio and the Consolidated Senior Secured Leverage Ratio were less than the required ratios. At June 30, 2026, approximately 16% of our outstanding debt was subject to interest rate changes. At June 30, 2026, we had approximately $87.4 million of cash and cash equivalents on hand, an increase of $19.4 million as compared to the year ended December 31, 2025. The majority of our cash is held in non-interest bearing checking accounts or invested in short-term money market accounts in accordance with the Company’s investment policy, which identifies allowable investments and specifies credit quality standards. Below is a summary of the change in cash and cash equivalents for the six months ended June 30, 2026 and 2025 is as follows : Six months ended June 30, 2026 June 30, 2025 (in thousands) Net cash provided by (used in): Operating activities $ 53,617 $ (64,508) Investing activities 289,127 (22,187) Financing activities (322,464) 98,378 Effect of exchange rates on cash and cash equivalents (852) 2,415 Net increase (decrease) in cash and cash equivalents 19,428 14,098 Cash and cash equivalents — beginning of period 68,015 59,659 Cash and cash equivalents — end of period $ 87,443 $ 73,757 Operating Activities: For the six months ended June 30, 2026, net cash provided by operating activities totaled approximately $53.6 million, which represents a $118.1 million decrease in cash use compared to cash used in operating activities of $64.5 million during the six-month period ended June 30, 2025. This change reflects improvements in operating results and other operating cash flow drivers, including working capital activity. Cash provided by working capital for the six months ended June 30, 2026 was $40.9 million, as compared to cash used for working capital of $50.8 million for the six months ended June 30, 2025. We typically use more cash for working capital in the first half of the year as we build inventories following the fourth quarter of the prior year. The prior year period included accelerated certain inventory receipts ahead of anticipated tariff implementations, which increased inventory levels and contributed to higher working capital cash outflows, and Lugano operating activity (cash from operating activities of $13.1 million), while the current-year period was affected by the May 2026 sale of the Sterno food service product division. Investing Activities: Cash flows provided by investing activities for the six months ended June 30, 2026 totaled $289.1 million, compared to cash used in investing activities of $22.2 million in the same period of 2025. In the current year, cash provided by investing activities reflects cash proceeds from a sale leaseback transaction that occurred in the first quarter at our Altor business and the proceeds from the sale of the Sterno product division in the second quarter. The remainder of investing activities in the current year and investing activities in the prior year is primarily capital expenditures. Capital expenditures decreased $12.6 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, with $11.3 million in capital expenditures in 2026 and $24.0 million in capital expenditures in 2025. Capital expenditures in the prior year included expenditures at Lugano, which is no longer an 68 operating segment of the Company after filing for bankruptcy in November 2025, and higher than usual capital expenditures at Arnold as they relocated two of their product divisions to a new facility in the United States. We expect capital expenditures for the full year of 2026 to be approximately $30 million to $40 million. Financing Activities: Cash used by financing activities was $322.5 million during the six months ended June 30, 2026 compared to cash flows provided by financing activities of $98.4 million during the six months ended June 30, 2025. Financing activities in the current year included $300.3 million of term-loan repayments, including the use of proceeds from a sale leaseback transaction in the first quarter of 2026 and the proceeds from the sale of the Sterno product division in the second quarter, payment of the Trust preferred share distribution of $19.4 million and transactions with noncontrolling shareholders at the Company's subsidiaries. Prior year financing activities included $200 million in term-loan borrowings, a portion of which was used to repay amounts outstanding under our revolving credit facility. Financing activities in the first six months of 2025 also reflects $58.9 million in proceeds from the issuance of Trust preferred shares, the payment of the Company's preferred share distribution of $18.1 million and the payment of the Company's common share distribution of $37.6 million. The Company suspended common share distributions in May 2025, therefore no common distribution was made subsequent to May 2025. Our Lugano business entered into various financing arrangements with third parties that were accounted for as debt in the consolidated financial statements. In the six months ended June 30, 2025, the net cash flows provided by these financing arrangements totaled $18.7 million. Intercompany Debt A component of our acquisition financing strategy that we utilize in acquiring the subsidiary businesses we own and manage is to provide both equity capital and debt capital, raised at the parent level through our existing credit facility. Our strategy of providing intercompany debt financing within the capital structure of our subsidiaries allows us the ability to distribute cash to the parent company through monthly interest payments and amortization of the principal on these intercompany loans. Each loan to our subsidiary businesses has a scheduled maturity and each subsidiary business is entitled to repay all or a portion of the principal amount of the outstanding loans, without penalty, prior to maturity. Certain of our subsidiaries have paid down their respective intercompany debt balances through the cash flow generated by these subsidiaries and we have recapitalized, and expect to continue to recapitalize, these subsidiaries in the normal course of our business. The recapitalization process involves funding the intercompany debt using either cash on hand at the parent or our applicable credit facility, and serves the purpose of optimizing the capital structure at our subsidiaries and providing the noncontrolling shareholders with a distribution on their ownership interest in a cash flow positive business. We will from time to time, amend the intercompany credit agreements to reflect changes in the business or funding needs of our businesses. The following amendments have been made in the time period indicated: In the second quarter of 2026, we amended the Altor intercompany credit agreement to amend the applicable fixed charge coverage ratio covenant as Altor was not expected to be in compliance with the ratio through the remainder of 2026 based on their forecast for the remainder of 2026. In the first quarter of 2025, we amended the Velocity intercompany credit agreement to amend the applicable fixed charge coverage ratio covenant and the applicable Total Debt to EBITDA ratio covenant. Velocity was not in compliance with the fixed charge coverage ratio or leverage ratio in their intercompany credit agreement at September 30, 2025, December 31, 2025, March 31, 2026 and June 30, 2026 and was granted a waiver for the covenant violations in each period. At September 30, 2025, Arnold was not in compliance with the fixed charge coverage ratio and leverage ratio covenants contained within its intercompany credit agreement. In the fourth quarter of 2025, we amended the Arnold credit agreement to increase the amount of availability under the revolving credit facility and to waive the covenant violations that existed as of September 30, 2025. Arnold was not in compliance with the fixed charge coverage ratio and leverage ratio covenants contained within its intercompany credit agreement at December 31, 2025, and was not in compliance with the fixed charge coverage ratio at March 31, 2026 and was granted a waiver for the covenant violations in each period. All of our subsidiaries were in compliance with the financial covenants under their intercompany credit arrangements at June 30, 2026 except Velocity and Altor, each of which received waivers for the applicable covenant violations. 69 All intercompany loans eliminate in consolidation and are not reflected in the consolidated balance sheet. As of June 30, 2026, we had the following outstanding loans due from each of our subsidiary businesses (in thousands): Subsidiary Intercompany loan 5.11 $ 93,633 BOA 93,211 PrimaLoft 141,676 The Honey Pot Co. 63,000 Velocity Outdoor 67,100 Altor 155,085 Arnold 90,379 Sterno — Total intercompany debt $ 704,084 Corporate and eliminations (704,084) Total $ — Our primary source of cash is from the receipt of interest and principal on the outstanding loans to our subsidiaries. Accordingly, we are dependent upon the earnings of and cash flow from these businesses, which are available for (i) operating expenses; (ii) payment of principal and interest under our applicable credit facility and interest on our Senior Notes; (iii) payments to CGM due pursuant to the MSA and payments to Sostratus LLC pursuant to the LLC Agreement; (iv) cash distributions to our shareholders; and (v) investments in future acquisitions. Payments made under (iii) above are required to be paid before distributions to shareholders and may be significant and exceed the funds held by us, which may require us to dispose of assets or incur debt to fund such expenditures. Financing Arrangements Debt and Capital Structure Our capital structure includes (i) the 2022 Credit Facility and (ii) the Senior Notes. See “Note G — Debt” included in the "Notes to the Consolidated Financial Statements" in this Form 10-Q for additional detail regarding our debt instruments, including outstanding balances, borrowing terms, covenant requirements, and availability under the 2022 Credit Facility. Net availability under the 2022 Revolving Credit Facility after giving effect to the Fifth Amendment was approximately $97.2 million at June 30, 2026. The outstanding borrowings under the 2022 Revolving Credit Facility include $0.8 million of outstanding letters of credit at June 30, 2026, which are not reflected on our balance sheet. Interest Expense The components of interest expense and periodic interest charges on outstanding debt are as follows (in thousands): Six months ended June 30, 2026 2025 Interest on credit facilities $ 16,665 $ 19,511 Interest on Senior Notes 34,762 33,750 Unused fee on Revolving Credit Facility 246 1,112 Other interest expense (1) 366 16,075 Interest income (649) (501) Interest expense, net $ 51,390 $ 69,947 (1) Other interest expense in the six months ended June 30, 2025 includes interest amounts related to Lugano financing arrangements. 70 The following table provides the effective interest rate of the Company’s outstanding debt at June 30, 2026 and December 31, 2025 (in thousands): June 30, 2026 December 31, 2025 Effective Interest Rate Amount Effective Interest Rate Amount 2029 Senior Notes 5.25% 1,029,371 8.15% 1,029,371 2032 Senior Notes 5.00% 308,811 7.93% 308,811 2022 Credit Facility - Term Loan 7.13% 252,250 10.14% 552,500 2022 Credit Facility - Revolving Loans 8.52% 2,000 —% — Unamortized debt issuance costs (10,502) (13,365) Total debt outstanding $ 1,581,930 $ 1,877,317 Reconciliation of Non-GAAP Financial Measures GAAP or U.S. GAAP refer to generally accepted accounting principles in the United States. From time to time we may publicly disclose certain “non-GAAP” financial measures in the course of our investor presentations, earnings releases, earnings conference calls or other venues. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flow that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with GAAP in our financial statements, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable measure as calculated and presented. We have included information to reconcile non-GAAP financial measures for the periods presented to the most directly comparable GAAP financial measure. We use non-GAAP information for financial and operational decision-making purposes and as a means to evaluate the underlying performance of our business and/or in forecasting our business. We believe that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful information for investors in their assessment of the underlying performance of our business. The presentation of these non-GAAP financial measures supplements other metrics we use to internally evaluate our subsidiary businesses and facilitate the comparison of past and present operations. These measures are not intended to replace the presentation of financial results in accordance with U.S. GAAP, and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies. The tables below reconcile the most directly comparable GAAP financial measures to Adjusted earnings before Interest, Income Taxes, Depreciation and Amortization ("Adjusted EBITDA") and Adjusted Earnings. Adjusted EBITDA – EBITDA is calculated as net income (loss) from continuing operations before interest expense, income tax expense (benefit), depreciation expense and amortization expense. Amortization expenses consist of amortization of intangibles, amortization of inventory step-up associated with purchase price allocations of our acquisitions, and debt charges, including debt issuance costs. Adjusted EBITDA is calculated utilizing the same calculation as described in arriving at EBITDA further adjusted by: (i) non-controlling stockholder compensation, which generally consists of non-cash stock option expense; (ii) successful acquisition costs, which consist of transaction costs (legal, accounting, due diligence, etc.) incurred in connection with the successful acquisition of a business expensed during the period in compliance with ASC 805, Business Combinations; (iii) impairment charges, which reflect write downs to goodwill or other intangible assets; (iv) changes in the fair value of contingent consideration subsequent to initial purchase accounting, (v) integration service fees, which reflect fees paid by newly acquired companies to the Manager for integration services performed during the first year of ownership; and (vi) items of other income or expense that are material to a subsidiary and non-recurring in nature. Adjusted Earnings –– Adjusted Earnings is calculated as net income (loss) adjusted to include the cost of the distributions to preferred shareholders, and adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance. Depending on the period presented, these adjusted measures exclude the impact of certain of the following items: gains (losses) and income (loss) from discontinued operations, income (loss) from noncontrolling interest, amortization expense, subsidiary stock compensation expense, acquisition-related expenses and items of other income or expense that may be material to a subsidiary and non-recurring in nature. 71 Adjusted EBITDA and Adjusted Earnings are non-GAAP measures used by the Company to assess its performance. We believe that Adjusted EBITDA and Adjusted Earnings provide useful information to investors and reflect important financial measures that are used by management in the monthly analysis of our operating results and in preparation of our annual budgets. We believe that investors’ understanding of our performance is enhanced by disclosing these performance measures as this presentation allows investors to view the performance of our businesses in a manner similar to the methods used by us and the management of our subsidiary businesses, provides additional insight into our operating results and provides a measure for evaluating targeted businesses for acquisition. Adjusted EBITDA and Adjusted Earnings exclude the effects of items which reflect the impact of long-term investment decisions, rather than the performance of near-term operations. When compared to net income (loss) and net income (loss) from continuing operations, Adjusted Earnings and Adjusted EBITDA, respectively, are each limited in that they do not reflect the periodic costs of certain capital assets used in generating revenues of our subsidiary businesses or the non-cash charges associated with impairments, as well as certain cash charges. The presentation of Adjusted Earnings provides insight into our operating results. Adjusted EBITDA and Adjusted Earnings are not meant to be a substitute for GAAP, and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies. Reconciliation of Net income (loss) from continuing operations to Adjusted EBITDA The following tables reconcile net income (loss) from continuing operations, which we consider to be the most comparable GAAP financial measure, to Adjusted EBITDA (in thousands): 72 Adjusted EBITDA Six months ended June 30, 2026 Corporate 5.11 BOA PrimaLoft THP Velocity Outdoor Altor Arnold Rimports (1) Consolidated Net income (loss) from continuing operations $ 14,235 $ 12,476 26,472 $ (19,279) $ 9,306 $ (4,952) $ 2,458 $ 553 $ 9,774 $ 51,043 Adjusted for: Provision (benefit) for income taxes 35,910 1,793 3,871 1,980 2,907 125 1,704 708 3,445 52,443 Interest expense, net 51,199 (2) — (16) 11 16 — 288 (106) 51,390 Intercompany interest (38,345) 5,517 5,322 7,285 3,653 3,115 7,767 4,254 1,432 — Depreciation and amortization 2,643 11,444 10,545 10,644 8,307 2,779 13,161 5,448 6,923 71,894 EBITDA 65,642 31,228 46,210 614 24,184 1,083 25,090 11,251 21,468 226,770 Other (income) expense (2) (121,538) 28 124 11 (66) (314) 404 2 (194) (121,543) Noncontrolling shareholder compensation — 1,297 1,952 1,182 683 8 350 52 315 5,839 Impairment expense — — — 20,500 — — — — — 20,500 Other (3) — — — — — — (9,698) — 225 (9,473) Adjusted EBITDA $ (55,896) $ 32,553 $ 48,286 $ 22,307 $ 24,801 $ 777 $ 16,146 $ 11,305 $ 21,814 $ 122,093 (1) Rimports includes the Adjusted EBITDA of the Sterno food service product division from January 1, 2026 through the date of sale, May 1, 2026. (2) The amount of Other (income) expense at corporate includes the change in the fair value of the receivable due from unconsolidated affiliate ($58.0 million) and the gain on the sale of the Sterno food service product division ($182.3 million). (3) Other in the six months ended June 30, 2026 includes the add-back of a gain on sale leaseback at Altor. 73 Adjusted EBITDA Six months ended June 30, 2025 Corporate 5.11 BOA Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno Consolidated Net income (loss) from continuing operations $ (28,023) $ 8,764 $ 17,257 $ (120,442) $ (176) $ 2,589 $ (6,731) $ 1,206 $ (14,941) $ 9,966 $ (130,531) Adjusted for: Provision (benefit) for income taxes — 2,462 2,223 (255) 928 770 113 642 9,815 3,198 19,896 Interest expense, net 53,926 (2) (2) 15,762 (13) (7) (13) — 296 — 69,947 Intercompany interest (80,936) 7,091 7,720 31,805 8,143 5,024 3,096 9,553 4,034 4,470 — Loss on debt modification 2,827 — — — — — — — — — 2,827 Depreciation and amortization (32) 11,303 10,496 3,068 10,654 8,319 2,737 13,115 5,281 6,986 71,927 EBITDA (52,238) 29,618 37,694 (70,062) 19,536 16,695 (798) 24,516 4,485 24,620 34,066 Other (income) expense 12 (137) 105 11,729 12 39 (210) 590 21 (193) 11,968 Noncontrolling shareholder compensation — 1,167 2,714 1,542 1,168 444 122 487 8 549 8,201 Impairment expense — — — 31,515 — — — — — — 31,515 Integration services fee — — — — — 875 — — — — 875 Other (1) — — — — — — — 3,054 2,210 163 5,427 Adjusted EBITDA $ (52,226) $ 30,648 $ 40,513 $ (25,276) $ 20,716 $ 18,053 $ (886) $ 28,647 $ 6,724 $ 25,139 $ 92,052 (1) Other represents specified operating expenses that are included by management in the calculation of Adjusted EBITDA when analyzing monthly operating results of our subsidiaries. In the current year, the calculation of Adjusted EBITDA for Arnold includes the add-back of certain expenses that have been incurred related to the relocation of two of Arnold's facilities in the United States and costs related to the retirement of the chief executive officer at Arnold. For Altor, other includes the add-back of certain expenses incurred related to restructuring of their facilities after the acquisition of Lifoam. 74 Reconciliation of Net income (loss) to both Adjusted Earnings and Adjusted EBITDA The following table reconciles Net income (loss), which we consider the most comparable GAAP financial measure, to both Adjusted Earnings and Adjusted EBITDA (in thousands): Six months ended June 30, 2026 2025 Net income (loss) $ 52,680 $ (127,682) Gain on sale of discontinued operations, net of tax 1,637 2,849 Net income (loss) from continuing operations $ 51,043 $ (130,531) Less: income (loss) from continuing operations attributable to noncontrolling interest 2,350 (46,472) Net income (loss) attributable to Holdings - continuing operations $ 48,693 $ (84,059) Adjustments: Distributions paid - preferred shares (19,429) (18,148) Amortization expense - intangibles and inventory step-up 45,530 46,468 Impairment expense 20,500 31,515 Noncomtrolling shareholder stock compensation 5,839 8,201 Integration Services Fee — 875 Change in fair value of receivable due from unconsolidated affiliate 58,000 — Gain on sale of product division (182,342) — Tax effect of gain on sale of product division 21,348 — Other (9,473) 5,427 Adjusted Earnings $ (11,334) $ (9,721) Plus (less): Depreciation expense 22,270 23,363 Income tax provision 52,443 19,896 Tax effect of gain on sale of product division (21,348) — Interest expense 51,390 69,947 Amortization of debt issuance costs 4,094 2,096 Loss on debt modification — 2,827 Income (loss) from continuing operations attributable to noncontrolling interest 2,350 (46,472) Distributions paid - preferred shares 19,429 18,148 Other (income) expense 2,799 11,968 Adjusted EBITDA $ 122,093 $ 92,052 Seasonality Earnings of certain of our operating segments are seasonal in nature due to various recurring events, holidays and seasonal weather patterns, as well as the timing of our acquisitions during a given year. Historically, the third and fourth quarter have produced the highest net sales in our fiscal year. Related Party Transactions Management Services Agreement The LLC entered into a MSA with CGM effective May 16, 2006, as amended. CGM is managed by Wayfinder Partners LLC, of which Zachary T. Sawtelle, the Company’s Chief Operating Officer, is the managing member. Elias J. Sabo, the Company’s Chief Executive Officer, is also member of CGM. CGM performs services for the LLC in 75 exchange for a management fee. The management fee is required to be paid prior to the payment of any distributions to shareholders. Pursuant to the MSA, CGM is entitled to enter into off-setting management service agreements with each of the operating segments. The amount of the fee is negotiated between CGM and the operating management of each segment and is based upon the value of the services to be provided. The fees paid directly to CGM by the segments offset on a dollar for dollar basis the amount due CGM by the LLC under the MSA. Amendment to Management Services Agreement On February 23, 2026, the LLC and CGM entered into an Eighth Amended and Restated Management Services Agreement (the “Eighth MSA amendment”), which amended and restated the parties’ MSA. The Eighth MSA Amendment, among other things, (i) established a repayment protocol for previously overpaid management fees, including permitting the Company, subject to interest, to fund all or a portion of otherwise payable quarterly fees while an overpayment balance remains outstanding, (ii) provided for a dollar-for-dollar reduction of fees payable under the MSA for certain services outsourced by the Company to third-party service providers and excluded such services from the scope of services to be provided by CGM, (iii) clarified requirements and restrictions applicable to personnel seconded by CGM to the Company, and (iv) updated certain operational, governance, authority and indemnification provisions. On July 12, 2026, the LLC and CGM entered into the Ninth MSA, which became effective upon execution and amends and restates the Eighth MSA. The fee and incentive-award provisions of the Ninth MSA become effective January 1, 2027, and the fee provisions of the Eighth MSA remain applicable through December 31, 2026. Refer to Note P - “Subsequent Events.” For the three and six months ended June 30, 2026 and 2025, the Company incurred the following management fees to CGM, by entity: Three months ended June 30, Six months ended June 30, 2025 (in thousands) 2026 2025 2026 2025 5.11 $ 250 $ 250 $ 500 $ 500 BOA 250 250 500 500 Lugano (1) — 125 — 313 PrimaLoft 250 250 500 500 The Honey Pot Co. 250 250 500 500 Velocity 125 125 250 250 Altor 187 187 375 375 Arnold Magnetics 125 125 250 250 Rimports 125 125 250 250 Corporate 12,255 17,348 26,626 34,460 $ 13,817 $ 19,035 $ 29,751 $ 37,898 (1) Lugano ceased paying a management fee to CGM in June 2025. Effect of Restatement on Management Fees As a result of the restatement of the financial statements as of December 31, 2024, 2023 and 2022 and for the years ended December 31, 2024, 2023 and 2022, as well as for the period ended December 31, 2021 and revisions made in the quarter ended March 31, 2025, the management fees paid to CGM were in excess of the amounts that should have been due under the MSA. While the MSA did not, prior to the Eighth MSA amendment, contain an express mechanism that permitted the Company to immediately clawback the overpayment of management fees during these periods, the MSA provided that future payments would be reduced, on a dollar-for-dollar basis, by the aggregate amount of all overpaid management fees. The Company calculated the total aggregate amount of excess management fees paid as a result of the restatement of the financial statements as $50.4 million. In 2025, restrictions under the Company’s financing arrangements limited the Company’s ability to pay management fees, resulting in management fee expense being incurred but not fully paid. The Company determined that the amount of management fees that had been overpaid at December 31, 2025 was $33.8 million, which was recorded as an asset (“Due from CGM”) and reduced management fee expense for the year ended December 31, 2025. For the six months ended June 30, 2026, the Company recorded management fee expense of $29.8 million. During the six 76 months ended June 30, 2026, the Company reduced the Due from CGM balance by $14.9 million for management fees applied against the prior overpayment by reducing the management fee due to CGM. As of June 30, 2026, the Due from CGM balance of $6.3 million reflects amounts due from CGM of $19.3 million including interest expense in accordance with the Eighth MSA Amendment, net of management fees accrued of $13.0 million. After June 30, 2026, the Company elected to fund $6.365 million of the quarterly management fee that otherwise would have been payable for the second quarter of 2026. The Company expects to continue to reduce future management fee payments until the overpayment has been fully recouped. Integration Services Agreement No integration service fees were incurred during the six months ended June 30, 2026. During the first quarter of 2025, The Honey Pot Co. paid CGM $0.9 million in integration service fees under an integration services agreement that has since been fully paid. An amendment to the Management Services Agreement entered into in January 2025 eliminated integration service fees for future acquisitions. Allocation Interests We have issued Allocation Interests, governed by our LLC agreement, to Sostratus, LLC (the "Holder") to receive distributions pursuant to a profit allocation formula upon the occurrence of certain events. The Holder is entitled to receive, if due pursuant to the profit allocation formula, an allocation payment upon the sale of a business (a "Sale Event") and upon election of the Holder during the 30-day period following the fifth anniversary of the date upon which we acquired a controlling interest in a business (a "Holding Event"). Payments of profit allocation to the Holder are accounted for as dividends declared on Allocation Interests and recorded in stockholders' equity once they are approved by the Company’s board of directors. The Lugano Bankruptcy was a Sale Event and any corresponding loss on such Sale Event will have the effect of reducing future allocation payments. The LLC Agreement also contains a mechanism to adjust future profit allocation payments by over-paid and under-paid profit distributions. The Company intends to cause future allocation payments to be adjusted, as necessary, to reflect the impact of the restatement of the Company’s financial statements. The sale of the Sterno food service product division in the second quarter of 2026 was a Sale Event. Although the sale of Sterno resulted in the calculation of a positive profit allocation distribution, no amount will be paid to the Holder as a result of the sale of Sterno as the amount of profit allocation payment due was not sufficient to exceed the high water mark in the profit allocation formula. 5.11 Related Party Vendor Purchases - 5.11 purchases inventory from a vendor who is a related party to 5.11 through one of the executive officers of 5.11 via the executive's 40% ownership interest in the vendor. 5.11 purchased approximately $0.2 million and $0.3 million during the three and six months ended June 30, 2026, respectively, and $0.2 million and $0.6 million during the three and six months ended June 30, 2025, respectively in inventory from the vendor. BOA Related Party Vendor Purchases - A contract manufacturer used by BOA as the primary supplier of molded injection parts is a noncontrolling shareholder of BOA. BOA purchased approximately $12.9 million and $24.0 million from this supplier during the three and six months ended June 30, 2026, respectively, and $11.1 million and $23.1 million from this supplier during the three and six months ended June 30, 2025, respectively. Off-Balance Sheet Arrangements We have no special purpose entities or off-balance sheet arrangements. 77 Critical Accounting Policies and Estimates The preparation of our financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates under different assumptions and judgments and uncertainties, and potentially could result in materially different results under different conditions. These critical accounting policies and estimates are reviewed periodically by our independent auditors and the audit committee of our board of directors. Except as set forth below, our critical accounting estimates have not changed materially from those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Form 10-K. Goodwill and Indefinite-lived Intangible Asset Impairment Testing Goodwill represents the excess amount of the purchase price over the fair value of the assets acquired. Our goodwill and indefinite lived intangible assets are tested for impairment on an annual basis as of March 31st, and if current events or circumstances require, on an interim basis. Goodwill is allocated to various reporting units, which are generally an operating segment. Each of our subsidiary businesses represents a reporting unit. Goodwill is tested for impairment at least annually and more frequently when events or changes in circumstances indicate that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. The determination of whether goodwill is impaired is a critical accounting estimate because it requires management to make significant judgments and assumptions when estimating the fair value of a reporting unit, and small changes in those judgments and assumptions could result in materially different fair value estimates and impairment conclusions. When qualitative factors are not sufficient to conclude that fair value exceeds carrying amount, we perform a quantitative goodwill impairment test and estimate reporting unit fair value using the income approach (discounted cash flow method), the market approach (guideline company multiples), or a weighting of the two methods. Key assumptions and estimates include projected revenue growth, operating margins, terminal growth rate, discount rate (including the weighted-average cost of capital and company-specific risk adjustments), and market multiples for comparable companies. These assumptions are based on historical performance, current and expected market and economic conditions, and our expectations regarding future operating performance; however, actual results may differ from those assumptions. Changes in the assumptions described above, including as a result of adverse changes in macroeconomic conditions, industry trends, competitive dynamics, customer demand, or our operating performance, could reduce the estimated fair value of a reporting unit and result in additional goodwill impairment charges in future periods. In addition, certain reporting units may have fair values that exceed carrying values by a limited margin and therefore may be more sensitive to changes in key valuation assumptions or adverse business conditions. We continue to monitor these reporting units, including changes in forecasted operating results, customer demand, input costs, interest rates, market multiples and other macroeconomic or industry-specific factors. With respect to the Altor reporting unit, management continues to monitor the impact of adverse macroeconomic conditions, including sustained pressure on material costs, freight and distribution costs, customer demand, and related operating margins. Although these factors have not resulted in the identification of a goodwill impairment triggering event as of June 30, 2026, Altor’s estimated fair value may not continue to exceed its carrying value by a sufficient margin if financial performance declines relative to forecast or if valuation assumptions, including projected revenue growth, margin recovery, discount rates or market multiples, change unfavorably. Accordingly, if current trends persist or worsen, or if Altor does not achieve the operating improvements reflected in management’s forecasts, the reporting unit could become more susceptible to failing a future quantitative impairment assessment, which could result in a goodwill impairment charge in a future period. Annual Impairment Testing 2026 Annual Impairment Testing For the Company’s annual goodwill impairment test as of March 31, 2026, the Company performed a qualitative assessment of its reporting units with goodwill balances to determine whether it was more-likely-than-not that the fair value of each reporting unit was less than its carrying amount. Based on this assessment, the Company concluded that it was more-likely-than-not that the fair value of each reporting unit exceeded its carrying amount, except for the PrimaLoft reporting unit. As a result, the Company performed a quantitative goodwill impairment test for the PrimaLoft reporting unit. 78 The Company estimated the fair value of the PrimaLoft reporting unit using a combination of the income approach (discounted cash flow method) and the market approach (guideline company multiples). Significant assumptions used in the quantitative test included, among others, projected revenue growth, operating margins, the terminal growth rate and the discount rate, each of which reflects management’s best estimates based on historical performance, current market conditions and expectations of future operating performance. The discount rate used in the income approach was 13.4%. The quantitative test indicated that the fair value of the PrimaLoft reporting unit was less than its carrying amount; accordingly, the Company recorded a goodwill impairment charge of $20.5 million during the quarter ended March 31, 2026, which is included in operating income/(loss) in the consolidated statements of operations. 2025 Annual Impairment Testing For our annual impairment testing at March 31, 2025, we performed a qualitative assessment of our reporting units with goodwill balances. The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units except PrimaLoft exceeded their carrying value. Based on our analysis, we determined that the PrimaLoft operating segment required quantitative testing because we could not conclude that the fair value of the reporting unit significantly exceeded the carrying value based on qualitative factors alone. We performed a quantitative test of PrimaLoft using an income approach and a market approach to determine the fair value of the PrimaLoft reporting unit. The discount rate used in the income approach was 11.3%. The results of the testing indicated that the fair value of PrimaLoft exceeded the carrying value by 12.1%. 2025 Interim Impairment Testing Arnold - During 2025, Arnold was negatively impacted by both production delays related to facility transitions, and supply chain constraints caused by export controls and disruption in the market for rare earth minerals, a key component in certain of Arnold's products. As a result, the operating results of Arnold were below our forecast and prior year results for the business. While Arnold's backlog continued to grow, the production delays and supply chain disruption caused by the export controls led us to determine that a triggering event occurred in the fourth quarter of 2025 and we performed an interim impairment test of goodwill as of October 31, 2025. We performed the impairment test using an income approach. The prospective financial information used in the income approach considered macroeconomic and geopolitical factors, industry and reporting unit specific data, and our best estimate of operational results and cash flows for the Arnold reporting unit as of the date of the impairment testing. The discount rate used in the income approach was 14.2%. The results of the testing indicated that the fair value of Arnold exceeded the carrying value by 77%. Indefinite-lived intangible asset The Company's indefinite lived intangible asset consisted of a tradename of approximately $30.8 million related to the Sterno food service business which was held for sale at March 31, 2026, and subsequently sold on May 1, 2026. Accordingly, the Company no longer has an indefinite intangible asset at June 30, 2026. Refer to "Note B - Dispositions" of the condensed consolidated financial statements. Recent Accounting Pronouncements Refer to Note A - "Presentation and Principles of Consolidation" of the condensed consolidated financial statements for a discussion of recent accounting pronouncements.