The information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s condensed consolidated financial statements and the related notes set forth in Item 1 of Part I of this Quarterly Report on Form 10-Q, our MD&A set forth in Item 7 of Part II of our 2025 Annual Report on Form 10-K and our consolidated financial statements and related notes set forth in Item 8 of Part II of our 2025 Annual Report on Form 10-K. See Part II, Item 1A, “Risk Factors,” below and “Cautionary Notice Regarding Forward-Looking Information,” above, and the information referenced therein, for a description of risks that we face and important factors that we believe could cause actual results to differ materially from those in our Forward-Looking Statements. All amounts and percentages are approximate due to rounding and all dollars in the text are in millions, except per share amounts or where otherwise noted. When we cross-reference to a “Note,” we are referring to our “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1, of this Quarterly Report on Form 10-Q, unless the context indicates otherwise. All amounts noted within the tables are in thousands and amounts and percentages are approximate due to rounding. Overview Our Company We design, manufacture, and market critical electronic components, systems and solutions for customers in aerospace, defense, industrial, and data-driven markets. Understanding that our customers face increasingly complex technical challenges, Bel delivers a comprehensive portfolio of solutions including power systems, high-reliability connectors and cable assemblies, circuit protection, and networking products that enable Original Equipment Manufacturers (OEMs) to bring their innovations to market. Bel partners closely with customers to deliver both customized and standard solutions tailored to their specific applications and performance requirements. With manufacturing facilities and technical support teams worldwide, Bel serves as a strategic partner to customers who require proven reliability in demanding end markets. Effective March 31, 2026, we realigned our organizational and reporting structure and changed the reportable segment views used by the Chief Operating Decision Maker to evaluate operating performance and allocate resources. As a result, we now operate and report results through the following two reportable segments: ● Aerospace, Defense & Rugged Solutions, which serves customers in aerospace, defense, space, and other ruggedized applications; and ● Industrial Technology & Data Solutions, which serves customers in industrial, networking, and data infrastructure markets. Our product portfolio includes power solutions, connectors and cable assemblies, circuit protection devices, and networking products. We sell standard products and provide customized solutions to meet customer specifications. We maintain manufacturing operations and engineering support capabilities in multiple geographic regions and sell our products globally. We did not incur material restructuring charges as a result of this realignment. For comparability, prior‑period segment information has been recast to conform to the current period presentation. In the six months ended June 30, 2026, 54% of our revenues were derived from Aerospace, Defense & Rugged Solutions and 46% from Industrial Technology & Data Solutions. Our operating expenses are driven principally by the cost of labor where the factories that we use are located, the cost of the materials that we use and our ability to effectively and efficiently manage overhead costs. As labor and material costs vary by product line and region, any significant shift in product mix can have an associated impact on our costs of sales. Costs are recorded as incurred for all products manufactured. Such amounts are determined based upon the estimated stage of production and include materials, labor cost and fringes and related allocations of factory overhead. Our products are manufactured at various facilities in the United States, Mexico, Dominican Republic, United Kingdom, Slovakia, Israel, India and the People’s Republic of China. We have little visibility into the ordering habits of our customers and we can be subjected to large and unpredictable variations in demand for our products. Accordingly, we must continually recruit and train new workers to replace those lost to attrition and be able to address peaks in demand that may occur from time to time. These recruiting and training efforts and related inefficiencies, and overtime required in order to meet any increase in demand, can add volatility to the labor costs incurred by us. 25 Table of Contents Key Factors Affecting our Business We believe that in addition to recent global tariffs and inflationary pressures on the costs of goods and services in general, as well as ongoing conflicts/political unrest including in or near the countries in which Bel operates, the key factors affecting and/or potentially affecting our results for the six months ended June 30, 2026 and/or future results include the following: • Acquisition of dataMate – In March 2026, we acquired dataMate, as further disclosed in Note 2, "Acquisitions." As a result, our Industrial Technology & Data Solutions segment will include dataMate’s net sales and results of operations from the date of acquisition. dataMate provides Ethernet and broadband connectivity solutions, and its results of operations may vary based on factors such as demand in industrial networking and data infrastructure markets, customer purchasing patterns, and general market conditions. • Backlog – Our backlog of orders amounted to $594.7 million at June 30, 2026, an increase of $155.6 million, or 35.4%, from December 31, 2025. From December 31, 2025 to June 30, 2026, we experienced a 22.2% increase in backlog within our Aerospace, Defense & Rugged Solutions segment and a 56.0% increase within our Industrial Technology & Data Solutions segment. Factors that could cause us to fail to ship all such orders include unanticipated supply difficulties, changes in customer demand, and new customer designs. Due to these factors, backlog may not be a reliable indicator of the timing or amount of future sales. • Product Mix – Material and labor costs vary by product line, and any significant shift in product mix between higher- and lower-margin products will have a corresponding impact on our gross margin. In general, products within our Aerospace, Defense & Rugged Solutions segment have historically generated higher contribution margins due to a product mix that serves harsh-environment and high-reliability applications and end markets, which may be partially offset by higher-cost bills of materials. Our Industrial Technology & Data Solutions segment includes products that have historically generated strong contribution margins, as well as products that are more labor-intensive and therefore may be more sensitive to wage rate changes and foreign currency fluctuations, including movements between the U.S. dollar and the Chinese renminbi. Fluctuations in revenue volume and product mix between our reportable segments and product lines will have a corresponding impact on our profit margins. See "Results of Operations - Summary by Operating Segment - Revenue and Gross Margin." • Pricing and Availability of Materials – Prices for commodities that are key inputs to our products, including gold (Au), silver (Ag) and copper (Cu), have increased as market prices for these metals have risen. In addition, lead times for certain integrated circuits (“ICs”) have increased, which we believe is driven in part by demand related to AI-enabled applications and the supporting infrastructure. Regulatory developments, including trade restrictions and other measures affecting suppliers in the PRC, have previously disrupted, and could in the future disrupt, our supply chain. These disruptions could result in limited access to certain components or suppliers, increased costs, extended lead times, shortages, or other adverse impacts on our business and results of operations. Additionally, tariffs or other duties imposed by the U.S. or foreign governments on imports or exports could increase our costs, reduce margins, or require price increases, which could in turn reduce customer demand. See "Global Tariffs" below. 26 Table of Contents • Global Tariffs – On April 5, 2025, the U.S. government announced the implementation of reciprocal tariffs on imports into the United States from certain countries in which our manufacturing facilities and/or suppliers are located. On February 20, 2026, the Supreme Court of the United States issued its decision in Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the imposition of tariffs. While this decision invalidated certain tariffs previously imposed under IEEPA, the broader implications of the ruling remain uncertain. We continue to monitor developments in U.S. trade policy, including potential legislative or executive actions that could result in the imposition of tariffs under alternative statutory authorities. Imports into the United States from Mexico are currently exempt from tariffs under the United States–Mexico–Canada Agreement (“USMCA”), as currently in force. During the six months ended June 30, 2026, tariffs did not have a material impact on our results of operations. We continue to monitor potential impacts from changes in trade policy and may implement mitigation actions, including supply chain adjustments and pricing actions, as appropriate. We will also monitor, and may in the future consider to the extent appropriate, possible tariff refund claims, whether via the process administered by U.S. Customs and Border Protection (“CBP”) or in other fora. The imposition or reinstatement of tariffs on imports into the United States could increase costs, disrupt supply chains, and/or reduce demand for our products, all or any of which could adversely affect future results of operations, including net sales and gross margins. • Labor Costs – Labor costs represented 7.4% of revenue during the first six months of 2026, as compared to 8.1% for the same period of 2025. The decrease primarily reflects operating leverage on higher sales volumes (net sales increased 21.4%), automation-driven productivity improvements, and the late-2025 transition of certain manufacturing activities from the Company’s Pingguo, PRC facility to an outside subcontractor, which shifted a portion of costs from direct labor to materials. • Inflationary Pressures - Inflationary pressures could continue to result in higher input costs, including those related to our raw materials, labor, freight, utilities, healthcare and other expenses. Our future operating results will depend, in part, on our continued ability to manage these fluctuations through pricing actions, cost savings initiatives and sourcing decisions. A surge in demand driven by AI data center buildouts has contributed to higher prices and extended lead times for certain components, including printed circuit boards (PCBs), semiconductors, and capacitors. Additionally, the armed conflict involving Iran and the Gulf states was the primary driver of the increased energy prices and resulting inflation in our various regions of operations in the first quarter of 2026. The conflict led, and to the extent it continues materially, may continue to lead, to, among other things, increased volatility and higher prices for commodities, such as energy products and freight on input material costs, increased inflation in various countries where we and/or our suppliers or customers operate, and disruptions to global trade and supply chains, including key energy transit routes. Actual or threatened disruptions to maritime shipping lanes and other escalating security tensions also increased insurance, financing and transportation costs. While the impact on us has not been material, continued hostilities could have a material adverse effect in future periods. • Impact of Foreign Currency – During the six months ended June 30, 2026, labor and overhead costs increased by approximately $5.3 million compared to the same period in 2025, primarily due to unfavorable foreign exchange rates involving the Israeli shekel, the Chinese renminbi, the euro, and the Mexican peso. Specifically, the appreciation of the Israeli shekel, Chinese renminbi and euro against the U.S. dollar resulted in higher labor and overhead costs of $2.5 million, $2.3 million and $0.4 million, respectively. We recognized a foreign exchange transactional loss of $1.4 million during this period, mainly due to currency spot rate fluctuations when translating balance sheet accounts as of June 30, 2026, versus December 31, 2025. As a U.S.-domiciled company, our foreign currency-denominated financial results are translated into U.S. dollars, and exchange rate fluctuations can impact our consolidated statements of operations and cash flows. We continuously monitor foreign currency movements and may utilize forward contracts or implement pricing actions to mitigate the impact of currency fluctuations on our operating results. • Effective Tax Rate – Our effective tax rate will fluctuate based on the geographic regions in which our pretax profits are earned. Of the geographic regions in which we operate, the U.S. and Europe’s tax rates are generally comparable while Asia has the lowest tax rates of our three geographical regions. See Note 11, “Income Taxes.” 27 Table of Contents Results of Operations - Summary by Operating Segment Revenue and Gross Margin Our revenue and gross margin by operating segment for the three and six months ended June 30, 2026 and 2025 were as follows: Three Months Ended Six Months Ended June 30, June 30, Revenue Gross Margin Revenue Gross Margin 2026 2025 2026 2025 2026 2025 2026 2025 Aerospace, Defense & Rugged Solutions $ 110,457 $ 91,832 41.1 % 41.4 % $ 210,278 $ 174,954 41.3 % 40.8 % Industrial Technology & Data Solutions 100,228 76,467 38.8 % 36.6 % 178,898 145,583 37.8 % 36.9 % $ 210,685 $ 168,299 39.9 % 38.7 % $ 389,176 $ 320,537 39.5 % 38.7 % Aerospace, Defense & Rugged Solutions: Net sales increased by $18.6 million, or 20.3%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by higher sales volumes, led by defense and rugged industrial applications. Defense sales increased by $14.7 million, or 28.4%, industrial sales increased by $7.5 million, or 51.4%, offset by decrease in commercial air sales by $3.6 million, or 14.1%, each compared to the prior-year period. Net sales increased by $35.3 million, or 20.2%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to higher sales in defense applications, which increased by $24.1 million, or 23.7%, and higher sales in industrial applications, which increased by $10.6 million, or 37.9%. Commercial air sales increased by $0.6 million, or 1.4%, compared to the prior-year period. Gross margin for the 2026 periods was favorably impacted primarily by a more favorable product mix and improved operational efficiencies. These favorable impacts were partially offset by unfavorable foreign currency fluctuations, primarily due to the weakening of the U.S. dollar against the Israeli shekel and the Mexican peso, which adversely affected costs in certain manufacturing locations. The year-over-year change in gross margin differed between the quarterly and year-to-date periods as the favorable impacts noted above were more evident on a year-to-date basis, while unfavorable foreign currency impacts and period-to-period mix variability were more pronounced in the current quarter. Industrial Technology & Data Solutions Net sales increased by $23.8 million, or 31.1%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by higher sales volumes in Data Solutions, partially offset by lower sales in Transportation. Data Solutions sales increased by $20.7 million, or 54.4%, and Industrial sales increased by $3.5 million, or 12.1%, each compared to the prior-year period. Transportation sales decreased by $0.4 million, or 4.3%, compared to the prior-year period. Net sales increased by $33.3 million, or 22.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to higher sales in Data Solutions and Industrial, partially offset by lower sales in Transportation. Data Solutions sales increased by $30.3 million, or 43.4%, and Industrial sales increased by $7.6 million, or 14.2%, each compared to the prior-year period. Transportation sales decreased by $4.6 million, or 20.6%, compared to the prior-year period. Gross margin for the 2026 periods was favorably impacted primarily by a more favorable product mix and improved operational efficiencies, including benefits from higher volumes and improved factory utilization. These favorable impacts were partially offset by unfavorable foreign currency fluctuations, primarily due to the weakening of the U.S. dollar against the Chinese renminbi, and euro, which increased costs in certain manufacturing locations. The increase in gross margin was more pronounced in the current quarter than on a year-to-date basis, as the benefits from mix and operational efficiencies were stronger in the quarter, while the year-to-date period includes earlier period results with comparatively lower margins. 28 Table of Contents Cost of Sales Cost of sales as a percentage of revenue for the three and six months ended June 30, 2026 and 2025 consisted of the following: Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Material costs 33.1 % 31.8 % 31.8 % 30.7 % Labor costs 7.0 % 7.8 % 7.4 % 8.1 % Other expenses 20.0 % 21.7 % 21.3 % 22.6 % Total cost of sales 60.1 % 61.3 % 60.5 % 61.3 % The increase in material costs as a percentage of net sales in the 2026 periods was primarily due to an unfavorable product and production mix, driven by higher sales volumes in offerings with higher bill-of-material (“BOM”) content, including power products, within the Aerospace, Defense & Rugged Solutions and Industrial Technology & Data Solutions segments. These products generally have a greater proportion of purchased components and raw materials relative to labor and overhead, which increased material costs as a percentage of net sales. Material costs were also impacted by higher purchasing levels associated with increased volumes and higher unit input costs in certain commodities and electronic components, including select supplier price increases. In addition, the Company’s evolving manufacturing footprint, including the increased use of third-party manufacturing for certain products previously produced in-house at the Pingguo facility, shifted certain costs from labor and overhead to purchased materials, contributing to higher material costs as a percentage of net sales. While the Company took pricing actions and continued sourcing and cost-reduction initiatives, these measures partially offset, but did not fully mitigate, the effects of mix and higher input costs in the periods presented. The decrease in labor costs as a percentage of net sales in the 2026 periods was driven by a shift in the Company’s production and sourcing mix, including an increased use of third-party manufacturing for certain products previously produced in-house (including at the Pingguo facility). As a result, certain costs that had historically been reflected in internal direct labor are now reflected in material content, reducing labor costs as a percentage of net sales. In addition, higher sales volumes supported improved operating efficiency and labor utilization across the manufacturing footprint, which further contributed to the decrease in labor costs as a percentage of net sales. These favorable impacts were partially offset by unfavorable foreign currency movements, including the Israeli shekel and the Chinese renminbi, which increased labor-related costs in certain manufacturing locations when translated into U.S. dollars. Other expenses (overhead and other manufacturing costs) were $42.1 million for the three months ended June 30, 2026, compared to $36.5 million for the three months ended June 30, 2025, an increase of $5.6 million. For the six months ended June 30, 2026, other expenses were $82.9 million, compared to $72.3 million in the prior-year period, an increase of $10.6 million. Other expenses as a percentage of net sales decreased year over year, reflecting higher net sales and increased absorption of fixed and semi-fixed manufacturing overhead. The year-over-year increase in other expenses reflects higher indirect/support labor and related benefits, other overhead, and repairs and maintenance, consistent with increased manufacturing activity and support requirements. These increases were partially offset by lower insurance and rental costs. Depreciation and amortization were generally consistent period over period, and utilities were relatively stable. Research and Development Expense Research and development (R&D) expenses totaled $9.0 million for the three months ended June 30, 2026, an increase of $0.9 million from $8.1 million for the three months ended June 30, 2025. The increase was primarily attributable to higher R&D personnel costs. The increase in R&D expense was broad-based across both Aerospace, Defense & Rugged Solutions and Industrial Technology & Data Solutions. For the six months ended June 30, 2026, R&D expenses totaled $17.5 million, an increase of $2.2 million from $15.3 million for the six months ended June 30, 2025. The increase was primarily attributable to higher R&D personnel costs, including labor and fringe benefits and bonus expense under the Company’s company-wide incentive program, and was broad-based across both Aerospace, Defense & Rugged Solutions and Industrial Technology & Data Solutions. Selling, General and Administrative Expense For the three months ended June 30, 2026, sales, general and administrative ("SG&A") expenses were $36.3 million, an increase of $5.4 million from $30.9 million for the three months ended June 30, 2025. The increase was primarily driven by $3.0 million of higher salaries and benefits (including $1.5 million higher salaries, $1.0 million higher benefits/medical, and $0.5 million higher recruiting and relocation), $1.6 million of higher professional, audit and legal fees, and $0.5 million higher travel and entertainment. For the six months ended June 30, 2026, SG&A expenses were $73.0 million, an increase of $12.6 million from $60.4 million for the six months ended June 30, 2025. The increase was primarily driven by higher salaries and benefits and higher professional, audit and legal fees. Salaries and benefits increased by $6.9 million, reflecting higher compensation and benefit costs, including annual salary increases effective March 1, 2026, as well as onboarding and overlapping salary and benefit costs related to the CEO and segment president positions. Professional, audit and legal fees increased by $3.6 million, primarily reflecting costs associated with the acquisition of dataMate and higher external professional spend, including overlapping audit fees. The increase also reflected higher travel and entertainment, and commissions. Bonus expense was also higher in 2026, including $1.3 million in the first half of 2026 due to a bonus reversal recorded in the first quarter of 2025 that did not recur. 29 Table of Contents Interest Expense Interest expense was $1.8 million for the three months ended June 30, 2026, compared to $4.0 million for the three months ended June 30, 2025, representing a decrease of $2.2 million. The decrease was primarily due to lower average outstanding borrowings under the Company’s Revolver during the 2026 period compared to the prior-year period. In particular, the Company had no outstanding borrowings under the Revolver at June 30, 2026, compared to interest incurred in the prior-year quarter on higher Revolver borrowings. Interest expense for the period also includes the effects of the Company’s 2021 interest rate swaps and amortization of deferred financing costs. For the six months ended June 30, 2026, interest expense was $4.3 million, compared to $8.1 million for the six months ended June 30, 2025, representing a decrease of $3.8 million. The decrease was primarily driven by lower average borrowings under the Credit and Security Agreement during the first half of 2026 as the Company reduced and ultimately repaid amounts outstanding under the Revolver, which had $197.5 million outstanding at December 31, 2025. Interest expense for both periods includes the impact of the 2021 swaps and amortization of deferred financing costs. For further information on the Company's outstanding debt, see "Liquidity and Capital Resources" below and Note 10, "Debt." Interest Income Interest income was $1.3 million for the three months ended June 30, 2026, compared to $0.3 million for the same period in 2025, an increase of $1.0 million, primarily due to higher average cash balances. For the six months ended June 30, 2026, interest income was $1.4 million versus $0.5 million in 2025, an increase of $0.9 million, also primarily due to higher average cash balances. Other (Expense) Income, Net Other (expense) income, net was other expense, net of $0.1 million for the three months ended June 30, 2026, compared to other income, net of $7.6 million for the three months ended June 30, 2025, an unfavorable change of $7.7 million, primarily due to foreign exchange, which shifted to a $1.4 million loss in 2026 from a $7.6 million gain in 2025 driven by exchange-rate movements on foreign currency-denominated balances. SERP investments resulted in a gain of $1.6 million in the second quarter of 2026 versus a gain of $0.7 million in the second quarter of 2025, primarily due to market fluctuations. For the six months ended June 30, 2026, other expense, net was $3.6 million versus other income, net of $10.2 million in the prior-year period, an unfavorable change of $13.8 million, primarily reflecting foreign exchange, which shifted to a $4.5 million loss from an $11.8 million gain. SERP investments resulted in a gain of $1.3 million for the six months ended June 30, 2026 versus a gain of $0.4 million for the six months ended June 30, 2025. Provision for Income Taxes The Company’s effective tax rate will fluctuate based on the geographic regions in which the pretax profits are earned. Tax rates in the U.S. and Europe are generally comparable, while Asia generally has lower statutory tax rates. See Note 11, “Income Taxes”. For the three months ended June 30, 2026, the provision for income taxes was $3.8 million, compared to $6.9 million for the same period in 2025. Earnings before income taxes for the three months ended June 30, 2026, increased by $4.1 million compared to the same period in 2025, primarily due to higher income from the North America and Asia regions, partially offset by a decrease in income from the Europe region. The Company’s effective tax rate for the three months ended June 30, 2026, was 10.0%, compared to 20.5% for the same period in 2025. The decrease in the effective tax rate was primarily driven by a benefit from restricted stock vesting and the reversal of uncertain tax positions due to statute expirations, as well as deferred tax benefit arising from a rate increase in a foreign deferred tax asset. See Note 11, “Income Taxes.” For the six months ended June 30, 2026, the provision for income taxes was $6.6 million, compared to $12.4 million for the same period in 2025. Earnings before income taxes for the six months ended June 30, 2026, decreased by $1.9 million compared to the same period in 2025, primarily due to lower income from the Europe region, partially offset by an increase in income from the North America region. The Company’s effective tax rate for the six months ended June 30, 2026, was 11.9% compared to 21.5% for the same period in 2025. The decrease in the effective tax rate was attributable to the same factors noted above. See Note 11, “Income Taxes”. Liquidity and Capital Resources Our principal sources of liquidity include $306.1 million of cash and cash equivalents at June 30, 2026, cash provided by operating activities, proceeds from securities offerings and borrowings available under our credit facility. We expect to use this liquidity for operating expenses, investments in working capital, capital expenditures, interest, taxes, lease and purchase obligations, pension benefit obligations, dividends, and debt obligations and other long-term liabilities. Our liquidity may also be utilized for purchases of common stock under our Repurchase Program, fund potential acquisitions in future periods, as well as potential future cash requirements related to the Enercon acquisition, including the potential 2026 Earnout Payment that may become due and the put-call options under the Enercon shareholders’ agreement, pursuant to which Bel has the current intention to purchase the remaining 20% interest by early 2027. See the discussion “Liquidity and Capital Resources” appearing in Item 7, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We believe that our current liquidity position and future cash flows from operations will enable us to fund our operations, both in the next twelve months and in the longer term. 30 Table of Contents Cash Flow Summary During the six months ended June 30, 2026, our cash and cash equivalents increased by $248.3 million. This increase was primarily due to the following: • net cash provided by operating activities of $31.8 million; • proceeds from our underwritten offering of common stock of $441.6 million, $197.5 million of which was used to repay long-term debt; • a payment for the acquisition of dataMate of $15.2 million; • purchases of property, plant and equipment of $4.9 million; • dividend payment to noncontrolling interest of $2.7 million; and • dividend payments to Bel shareholders of $1.7 million Operating cash flow benefited from higher net earnings and higher non-cash adjustments, including stock-based compensation, depreciation and amortization, and foreign currency revaluation losses, partially offset by a higher deferred tax benefit. Working capital was a net use of cash, primarily driven by increases in accounts receivable of $32.1 million and inventories of $32.2 million, reflecting higher sales levels and purchasing activity. These uses of cash were partially offset by an increase in accounts payable of $33.1 million, primarily due to higher purchasing activity and the timing of vendor payments. DSO was 67 days at June 30, 2026 compared to 64 days at December 31, 2025, primarily due to the timing of billings and customer collections. The Company continues to focus on disciplined receivables management and cash conversion. The increase in inventories was primarily driven by higher levels of raw materials, work in process, and finished goods to support customer demand and manage lead times. In addition, higher material costs increased the dollar value of on-hand inventory. Consistent with these higher inventory levels, inventory turns were 2.2 at June 30, 2026 compared to 2.5 at December 31, 2025. Other working capital changes included decreases in accrued expenses of $4.3 million and accrued restructuring costs of $0.5 million, primarily reflecting cash payments and the timing of settlement of previously accrued obligations. Income taxes payable increased by $1.7 million, primarily due to the timing of tax payments. Changes in other operating assets also impacted operating cash flows, including an increase in other current assets of $0.6 million and an increase in other assets of $2.0 million during the six months ended June 30, 2026. Net cash provided by financing activities was $236.3 million for the six months ended June 30, 2026. Financing cash flows were primarily driven by $441.6 million of net proceeds from the Company’s May 2026 underwritten public offering of 1,725,000 shares of Class B common stock (including shares issued pursuant to the underwriters’ option). The Company utilized the net proceeds from the offering to pay down $197.5 million of the long-term debt under its Credit and Security Agreement, and intends to use the remaining net proceeds to fund the remaining 20% acquisition of Enercon or pursue other acquisitions or partnership opportunities that may arise, and the remainder, if any, for general corporate purposes. Cash and cash equivalents and accounts receivable, in the aggregate, comprised approximately 36.5% of total assets as of June 30, 2026, compared to 19.2% as of December 31, 2025. The Company’s current ratio was 4.5 to 1 as of June 30, 2026 compared to 3.0 to 1 as of December 31, 2025. At June 30, 2026 and December 31, 2025, $36.3 million and $43.4 million, respectively (representing 12% and 75%, respectively), of cash and cash equivalents was held by foreign subsidiaries. The Company repatriated $11.8 million of funds from outside of the U.S. during the six months ended June 30, 2026. The Company continues to evaluate its global working capital and cash requirements and the potential tax costs associated with additional repatriations. The Company has not made a determination regarding additional repatriations to fund U.S. operations. If these funds were needed in the U.S., the Company could be required to incur U.S. state taxes and any applicable foreign withholding taxes in connection with repatriation. Future Cash Requirements We expect foreseeable liquidity and capital resource requirements in the ordinary course to be met through existing cash and cash equivalents and anticipated cash flows from operations, as well as borrowings available under our revolving credit facility, if needed. Our material cash requirements arising in the normal course of business are outlined in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There were no material changes to our future cash requirements during the six months ended June 30, 2026. Credit Facility As of June 30, 2026, the Company had no outstanding borrowings under its Revolver and had $400 million of unused borrowing capacity. See Note 10, "Debt." The Revolver matures on September 1, 2028. As of June 30, 2026, the Company was in compliance with all financial covenants, including the most restrictive covenant, the Fixed Charge Coverage Ratio. Interest expense and related cash payments under the Revolver will vary based on amounts borrowed and applicable interest rates. Because there were no outstanding borrowings as of June 30, 2026, the Company does not currently expect material interest payments related to revolving borrowings for the remainder of 2026. Critical Accounting Policies and Estimates Our condensed consolidated financial statements include certain amounts that are based on management's best estimates and judgments. We base our estimates on historical experience and on various other assumptions, including in some cases future projections, that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Different assumptions and judgments could change the estimates used in the preparation of the condensed consolidated financial statements, which, in turn, could change the results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis. Based on the above, we have determined that our most critical accounting estimates are those related to business combinations, inventory valuation, goodwill and other indefinite-lived intangible assets, and those related to our pension benefit obligations. For a detailed discussion of our critical accounting estimates, refer to “Critical Accounting Estimates” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes in our critical accounting policies, judgments and estimates, including assumptions or estimation techniques utilized, as compared to those disclosed in our 2025 Annual Report on Form 10-K. 31 Table of Contents Recent Accounting Pronouncements The discussion of new financial accounting standards applicable to our Company is incorporated herein by reference to Note 1, “Basis of Presentation and Accounting Policies”.