00008863461/32025Q3FALSEP3YP3Yxbrli:sharesiso4217:USDiso4217:USDxbrli:shareskai:segmentxbrli:purekai:companykai:employee00008863462024-12-292025-09-2700008863462025-10-2400008863462025-09-2700008863462024-12-2800008863462025-06-292025-09-2700008863462024-06-302024-09-2800008863462023-12-312024-09-2800008863462023-12-3000008863462024-09-280000886346us-gaap:CommonStockMember2025-06-280000886346us-gaap:AdditionalPaidInCapitalMember2025-06-280000886346us-gaap:RetainedEarningsMember2025-06-280000886346us-gaap:TreasuryStockCommonMember2025-06-280000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-280000886346us-gaap:NoncontrollingInterestMember2025-06-2800008863462025-06-280000886346us-gaap:RetainedEarningsMember2025-06-292025-09-270000886346us-gaap:NoncontrollingInterestMember2025-06-292025-09-270000886346us-gaap:AdditionalPaidInCapitalMember2025-06-292025-09-270000886346us-gaap:TreasuryStockCommonMember2025-06-292025-09-270000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-292025-09-270000886346us-gaap:CommonStockMember2025-09-270000886346us-gaap:AdditionalPaidInCapitalMember2025-09-270000886346us-gaap:RetainedEarningsMember2025-09-270000886346us-gaap:TreasuryStockCommonMember2025-09-270000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-09-270000886346us-gaap:NoncontrollingInterestMember2025-09-270000886346us-gaap:CommonStockMember2024-12-280000886346us-gaap:AdditionalPaidInCapitalMember2024-12-280000886346us-gaap:RetainedEarningsMember2024-12-280000886346us-gaap:TreasuryStockCommonMember2024-12-280000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-280000886346us-gaap:NoncontrollingInterestMember2024-12-280000886346us-gaap:RetainedEarningsMember2024-12-292025-09-270000886346us-gaap:NoncontrollingInterestMember2024-12-292025-09-270000886346us-gaap:AdditionalPaidInCapitalMember2024-12-292025-09-270000886346us-gaap:TreasuryStockCommonMember2024-12-292025-09-270000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-292025-09-270000886346us-gaap:CommonStockMember2024-06-290000886346us-gaap:AdditionalPaidInCapitalMember2024-06-290000886346us-gaap:RetainedEarningsMember2024-06-290000886346us-gaap:TreasuryStockCommonMember2024-06-290000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-290000886346us-gaap:NoncontrollingInterestMember2024-06-2900008863462024-06-290000886346us-gaap:RetainedEarningsMember2024-06-302024-09-280000886346us-gaap:NoncontrollingInterestMember2024-06-302024-09-280000886346us-gaap:AdditionalPaidInCapitalMember2024-06-302024-09-280000886346us-gaap:TreasuryStockCommonMember2024-06-302024-09-280000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-302024-09-280000886346us-gaap:CommonStockMember2024-09-280000886346us-gaap:AdditionalPaidInCapitalMember2024-09-280000886346us-gaap:RetainedEarningsMember2024-09-280000886346us-gaap:TreasuryStockCommonMember2024-09-280000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-280000886346us-gaap:NoncontrollingInterestMember2024-09-280000886346us-gaap:CommonStockMember2023-12-300000886346us-gaap:AdditionalPaidInCapitalMember2023-12-300000886346us-gaap:RetainedEarningsMember2023-12-300000886346us-gaap:TreasuryStockCommonMember2023-12-300000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-300000886346us-gaap:NoncontrollingInterestMember2023-12-300000886346us-gaap:RetainedEarningsMember2023-12-312024-09-280000886346us-gaap:NoncontrollingInterestMember2023-12-312024-09-280000886346us-gaap:AdditionalPaidInCapitalMember2023-12-312024-09-280000886346us-gaap:TreasuryStockCommonMember2023-12-312024-09-280000886346us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-312024-09-280000886346us-gaap:CustomerRelationshipsMember2025-09-270000886346us-gaap:IntellectualPropertyMember2025-09-270000886346us-gaap:TradeNamesMember2025-09-270000886346us-gaap:OtherIntangibleAssetsMember2025-09-270000886346us-gaap:TradeNamesMember2025-09-270000886346us-gaap:CustomerRelationshipsMember2024-12-280000886346us-gaap:IntellectualPropertyMember2024-12-280000886346us-gaap:TradeNamesMember2024-12-280000886346us-gaap:OtherIntangibleAssetsMember2024-12-280000886346us-gaap:TradeNamesMember2024-12-280000886346kai:BabbiniMember2025-07-090000886346us-gaap:OperatingSegmentsMemberkai:FlowControlMember2024-12-280000886346us-gaap:OperatingSegmentsMemberkai:IndustrialProcessingMember2024-12-280000886346us-gaap:OperatingSegmentsMemberkai:MaterialHandlingSystemsMember2024-12-280000886346us-gaap:OperatingSegmentsMemberkai:FlowControlMember2024-12-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:IndustrialProcessingMember2024-12-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:MaterialHandlingSystemsMember2024-12-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:FlowControlMember2025-09-270000886346us-gaap:OperatingSegmentsMemberkai:IndustrialProcessingMember2025-09-270000886346us-gaap:OperatingSegmentsMemberkai:MaterialHandlingSystemsMember2025-09-270000886346us-gaap:TransferredAtPointInTimeMember2025-06-292025-09-270000886346us-gaap:TransferredAtPointInTimeMember2024-06-302024-09-280000886346us-gaap:TransferredAtPointInTimeMember2024-12-292025-09-270000886346us-gaap:TransferredAtPointInTimeMember2023-12-312024-09-280000886346us-gaap:TransferredOverTimeMember2025-06-292025-09-270000886346us-gaap:TransferredOverTimeMember2024-06-302024-09-280000886346us-gaap:TransferredOverTimeMember2024-12-292025-09-270000886346us-gaap:TransferredOverTimeMember2023-12-312024-09-280000886346kai:PartsandConsumablesMember2025-06-292025-09-270000886346kai:PartsandConsumablesMember2024-06-302024-09-280000886346kai:PartsandConsumablesMember2024-12-292025-09-270000886346kai:PartsandConsumablesMember2023-12-312024-09-280000886346kai:CapitalMember2025-06-292025-09-270000886346kai:CapitalMember2024-06-302024-09-280000886346kai:CapitalMember2024-12-292025-09-270000886346kai:CapitalMember2023-12-312024-09-280000886346srt:NorthAmericaMember2025-06-292025-09-270000886346srt:NorthAmericaMember2024-06-302024-09-280000886346srt:NorthAmericaMember2024-12-292025-09-270000886346srt:NorthAmericaMember2023-12-312024-09-280000886346srt:EuropeMember2025-06-292025-09-270000886346srt:EuropeMember2024-06-302024-09-280000886346srt:EuropeMember2024-12-292025-09-270000886346srt:EuropeMember2023-12-312024-09-280000886346srt:AsiaMember2025-06-292025-09-270000886346srt:AsiaMember2024-06-302024-09-280000886346srt:AsiaMember2024-12-292025-09-270000886346srt:AsiaMember2023-12-312024-09-280000886346kai:RestofWorldMember2025-06-292025-09-270000886346kai:RestofWorldMember2024-06-302024-09-280000886346kai:RestofWorldMember2024-12-292025-09-270000886346kai:RestofWorldMember2023-12-312024-09-280000886346kai:CertainCapitalContractsMember2024-12-292025-09-2700008863462025-09-282025-09-2700008863462026-09-282025-09-270000886346country:CNus-gaap:LandAndBuildingMember2021-01-032022-01-010000886346country:CNus-gaap:LandAndBuildingMember2021-01-012022-04-020000886346country:CNus-gaap:LandAndBuildingMember2022-01-022022-04-020000886346country:CNus-gaap:LandAndBuildingMember2024-12-012025-09-270000886346country:CNus-gaap:LandAndBuildingMember2025-09-270000886346kai:BabbiniMember2025-07-092025-07-090000886346us-gaap:RestrictedStockUnitsRSUMember2025-06-292025-09-270000886346us-gaap:RestrictedStockUnitsRSUMember2024-06-302024-09-280000886346us-gaap:RestrictedStockUnitsRSUMember2024-12-292025-09-270000886346us-gaap:RestrictedStockUnitsRSUMember2023-12-312024-09-280000886346us-gaap:LineOfCreditMember2025-09-270000886346us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:LineOfCreditMember2025-09-270000886346us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:LineOfCreditMember2025-09-270000886346us-gaap:LineOfCreditMember2024-12-280000886346us-gaap:SeniorNotesMember2025-09-270000886346us-gaap:SeniorNotesMember2024-12-280000886346us-gaap:EstimateOfFairValueFairValueDisclosureMemberkai:OtherBorrowingsMember2025-09-270000886346us-gaap:CarryingReportedAmountFairValueDisclosureMemberkai:OtherBorrowingsMember2025-09-270000886346kai:OtherBorrowingsMember2025-09-270000886346kai:OtherBorrowingsMember2024-12-280000886346kai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMember2025-09-250000886346kai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMember2025-09-260000886346kai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMemberus-gaap:LineOfCreditMember2025-09-270000886346us-gaap:BaseRateMemberkai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMembersrt:MinimumMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346us-gaap:BaseRateMemberkai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMembersrt:MaximumMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346kai:EurocurrencyRateTermSOFRTermCORRAAndRFRMemberkai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMembersrt:MinimumMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346kai:EurocurrencyRateTermSOFRTermCORRAAndRFRMemberkai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMembersrt:MaximumMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346us-gaap:RevolvingCreditFacilityMemberkai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMembersrt:MinimumMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346us-gaap:RevolvingCreditFacilityMemberkai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMembersrt:MaximumMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346kai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMemberus-gaap:LineOfCreditMember2024-12-292025-09-270000886346kai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityEuroDenominatedBorrowingMemberus-gaap:LineOfCreditMember2025-09-270000886346kai:EighthAmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMemberus-gaap:LineOfCreditMember2025-09-270000886346kai:AmendmentToUnsecuredMultiCurrencyRevolvingCreditFacilityCreditAgreementMemberus-gaap:LineOfCreditMember2024-12-280000886346kai:NotePurchaseAgreementMemberus-gaap:SeniorNotesMember2018-12-290000886346us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2025-05-142025-05-140000886346us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2025-05-140000886346us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2025-05-142025-05-140000886346us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2025-05-142025-05-140000886346us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2025-05-142025-05-140000886346kai:PerformanceBasedRestrictedStockUnitsMember2025-03-042025-03-040000886346kai:ShareBasedCompensationArrangementByShareBasedPaymentAwardComponentOneMemberkai:PerformanceBasedRestrictedStockUnitsMembersrt:MinimumMember2025-03-042025-03-040000886346kai:ShareBasedCompensationArrangementByShareBasedPaymentAwardComponentOneMemberkai:PerformanceBasedRestrictedStockUnitsMembersrt:MaximumMember2025-03-042025-03-040000886346kai:ShareBasedCompensationArrangementByShareBasedPaymentAwardComponentTwoMemberkai:PerformanceBasedRestrictedStockUnitsMembersrt:MinimumMember2025-03-042025-03-040000886346kai:ShareBasedCompensationArrangementByShareBasedPaymentAwardComponentTwoMemberkai:PerformanceBasedRestrictedStockUnitsMembersrt:MaximumMember2025-03-042025-03-040000886346kai:ShareBasedCompensationArrangementByShareBasedPaymentAwardComponentThreeMemberkai:PerformanceBasedRestrictedStockUnitsMembersrt:MaximumMember2025-03-042025-03-040000886346kai:ShareBasedCompensationArrangementByShareBasedPaymentAwardComponentFourMemberkai:PerformanceBasedRestrictedStockUnitsMembersrt:MinimumMember2025-03-042025-03-040000886346kai:TimeBasedRestrictedStockUnitsMember2025-03-042025-03-040000886346us-gaap:AccumulatedTranslationAdjustmentMember2024-12-280000886346us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-12-280000886346us-gaap:AccumulatedTranslationAdjustmentMember2024-12-292025-09-270000886346us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-12-292025-09-270000886346us-gaap:AccumulatedTranslationAdjustmentMember2025-09-270000886346us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-09-270000886346us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2025-09-270000886346us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2025-09-270000886346us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2025-09-270000886346us-gaap:FairValueMeasurementsRecurringMember2025-09-270000886346us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-12-280000886346us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-12-280000886346us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2024-12-280000886346us-gaap:FairValueMeasurementsRecurringMember2024-12-280000886346kai:A2024AcquisitionsMember2024-08-012024-08-310000886346kai:A2024AcquisitionsMember2025-09-270000886346kai:ContingentConsiderationLiabilityMember2024-12-280000886346kai:ContingentConsiderationLiabilityMember2024-12-292025-09-270000886346kai:ContingentConsiderationLiabilityMember2025-09-270000886346us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:LineOfCreditMember2024-12-280000886346us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:LineOfCreditMember2024-12-280000886346us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMember2025-09-270000886346us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMember2025-09-270000886346us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMember2024-12-280000886346us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMember2024-12-280000886346us-gaap:CarryingReportedAmountFairValueDisclosureMemberkai:OtherBorrowingsMember2024-12-280000886346us-gaap:EstimateOfFairValueFairValueDisclosureMemberkai:OtherBorrowingsMember2024-12-280000886346us-gaap:CarryingReportedAmountFairValueDisclosureMember2025-09-270000886346us-gaap:EstimateOfFairValueFairValueDisclosureMember2025-09-270000886346us-gaap:CarryingReportedAmountFairValueDisclosureMember2024-12-280000886346us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-280000886346us-gaap:OperatingSegmentsMemberkai:FlowControlMember2025-06-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:IndustrialProcessingMember2025-06-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:MaterialHandlingSystemsMember2025-06-292025-09-270000886346us-gaap:OperatingSegmentsMember2025-06-292025-09-270000886346us-gaap:CorporateNonSegmentMember2025-06-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:FlowControlMember2024-06-302024-09-280000886346us-gaap:OperatingSegmentsMemberkai:IndustrialProcessingMember2024-06-302024-09-280000886346us-gaap:OperatingSegmentsMemberkai:MaterialHandlingSystemsMember2024-06-302024-09-280000886346us-gaap:OperatingSegmentsMember2024-06-302024-09-280000886346us-gaap:CorporateNonSegmentMember2024-06-302024-09-280000886346us-gaap:OperatingSegmentsMember2024-12-292025-09-270000886346us-gaap:CorporateNonSegmentMember2024-12-292025-09-270000886346us-gaap:OperatingSegmentsMemberkai:FlowControlMember2023-12-312024-09-280000886346us-gaap:OperatingSegmentsMemberkai:IndustrialProcessingMember2023-12-312024-09-280000886346us-gaap:OperatingSegmentsMemberkai:MaterialHandlingSystemsMember2023-12-312024-09-280000886346us-gaap:OperatingSegmentsMember2023-12-312024-09-280000886346us-gaap:CorporateNonSegmentMember2023-12-312024-09-280000886346us-gaap:CorporateNonSegmentMember2025-09-270000886346us-gaap:CorporateNonSegmentMember2024-12-280000886346kai:ClydeIndustriesMemberus-gaap:SubsequentEventMember2025-10-072025-10-070000886346kai:ClydeIndustriesMember2024-03-012025-02-280000886346kai:ClydeIndustriesMemberus-gaap:SubsequentEventMember2025-10-070000886346us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMember2025-10-012025-10-31

(Mark One)

For the quarterly period ended September 27, 2025

For the transition period from ________ to _________

Commission file number 001-11406

(Exact name of registrant as specified in its charter)

(Address of principal executive offices, including zip code)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

KAI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of October 24, 2025, the registrant had 11,778,135 shares of common stock outstanding.

Item 1 – Financial Statements

Condensed Consolidated Balance Sheet

(Unaudited)

Condensed Consolidated Statement of Income

(Unaudited)

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

Condensed Consolidated Statement of Cash Flows

(Unaudited)

See Note 1, Nature of Operations and Summary of Significant Accounting Policies,

under the heading Supplemental Cash Flow Information for further details.

Condensed Consolidated Statement of Stockholders' Equity

(Unaudited)

Kadant Inc. was incorporated in Delaware in November 1991 and trades on the New York Stock Exchange under the ticker symbol "KAI."

Kadant Inc. (together with its subsidiaries, the Company) is a global supplier of technologies and engineered systems that drive Sustainable Industrial Processing®. Its products and services play an integral role in enhancing efficiency, optimizing energy utilization, and maximizing productivity in process industries while helping customers advance their sustainability initiatives with products that reduce waste or generate more yield with fewer inputs, particularly fiber, energy, and water. Producing more while consuming less is a core aspect of Sustainable Industrial Processing and a major element of the strategic focus of the Company's three reportable segments consisting of the Flow Control segment, Industrial Processing segment, and Material Handling segment.

The interim condensed consolidated financial statements and related notes presented have been prepared by the Company, are unaudited, and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position at September 27, 2025, its results of operations, comprehensive income, and stockholders' equity for the three- and nine-month periods ended September 27, 2025 and September 28, 2024, and its cash flows for the nine-month periods ended September 27, 2025 and September 28, 2024. Interim results are not necessarily indicative of results for a full year or for any other interim period.

The condensed consolidated balance sheet presented as of December 28, 2024 has been derived from the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (Annual Report). The condensed consolidated financial statements and related notes are presented as permitted by the rules and regulations of the Securities and Exchange Commission (SEC) for Form 10-Q and do not contain certain information included in the annual consolidated financial statements and related notes of the Company. The condensed consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements.

Note 1 to the consolidated financial statements in the Annual Report describes the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 27, 2025.

The Company's restricted cash generally serves as collateral for bank guarantees associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business and for certain banker's acceptance drafts issued to vendors. The majority of these restrictions will expire over the next twelve months.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the accompanying condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows:

The components of inventories are as follows:

Acquired intangible assets by major asset class are as follows:

Intangible assets are recorded at fair value at the date of acquisition. Subsequent impairment charges are reflected as a reduction in the gross balance, as applicable. Definite-lived intangible assets are stated net of accumulated amortization and currency translation in the accompanying condensed consolidated balance sheet. The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset.

During the nine months ended September 27, 2025, the Company recognized intangible assets of $5,278,000 associated with its July 2025 acquisition (see Note 2, Acquisition) and incremental intangibles of $200,000 related to a measurement period adjustment for a prior period acquisition. The Company also recognized an impairment charge of $287,000 in the third quarter of 2025 associated with previously acquired technology that will no longer be utilized, which is included in other costs in the accompanying condensed consolidated statement of income.

The changes in the carrying amount of goodwill by reportable segment are as follows:

Measurement period adjustments for the Company's acquisitions completed in the second and third quarters of 2024 were not material to its financial position or results of operations in the first nine months of 2025.

The Company's contracts covering the sale of its products include warranty provisions that provide assurance to its customers that the products will comply with agreed-upon specifications during a defined period of time. The Company provides for the estimated cost of product warranties at the time of sale based on historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate projected warranty costs may vary from historical patterns.

The Company negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications.

The changes in the carrying amount of product warranty obligations are as follows:

Most of the Company’s revenue relates to products and services that require minimal customization and is recognized at a point in time for each performance obligation under the contract when the customer obtains control of the goods or service. The remaining portion of the Company’s revenue is recognized over time based on an input method that compares the costs incurred to date to the total expected costs required to satisfy the performance obligation. Contracts are accounted for on an over time basis when they include products which have no alternative use and an enforceable right to payment over time. Most of the contracts recognized on an over time basis are for large capital equipment projects. These projects are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation.

The following table presents revenue by revenue recognition method:

The Company disaggregates its revenue from contracts with customers by reportable segment, product type and geography as this best depicts how its revenue is affected by economic factors.

The following table presents the disaggregation of revenue by product type and geography:

See Note 9, Business Segment Information, for information on the disaggregation of revenue by reportable segment.

The following table presents contract balances from contracts with customers:

Contract assets represent unbilled revenue associated with revenue recognized on contracts accounted for on an over time basis, which will be billed in future periods based on the contract terms. Contract liabilities consist of short- and long-term customer deposits, advanced billings, and deferred revenue. Deferred revenue is included in other current liabilities, and long-term customer deposits are included in other long-term liabilities in the accompanying condensed consolidated balance sheet. Contract liabilities will be recognized as revenue in future periods once the revenue recognition criteria are met. The majority of the contract liabilities relate to advance payments on contracts accounted for at a point in time. These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer.

The Company recognized revenue of $6,064,000 in the third quarter of 2025 and $8,897,000 in the third quarter of 2024, and $36,861,000 in the first nine months of 2025 and $66,036,000 in the first nine months of 2024 that was included in the contract liabilities balance at the beginning of 2025 and 2024, respectively. The majority of the Company's contracts for capital equipment have an original expected duration of one year or less. Certain capital equipment contracts require longer lead times and could take up to 24 months to complete. For contracts with an original expected duration of over one year, the aggregate amount of the transaction price allocated to the remaining unsatisfied or partially unsatisfied performance obligations was $27,990,000 as of September 27, 2025. The Company will recognize revenue for these performance obligations as they are satisfied, approximately 78% of which is expected to occur within the next twelve months and the remaining 22% thereafter.

The Company entered into several agreements with the local government in China, which became effective in the first quarter of 2022, to sell its then existing manufacturing building and land use rights at one of its subsidiaries in China within its Industrial Processing segment for $25,159,000 and relocate to a new facility (China Transaction). The Company received a 31% down payment, with the remaining balance due on the earlier of the sale of the property by the local government or two years from the effective date of the agreements. To date, the government has paid $1,803,000, and the remaining receivable was $13,592,000 as of September 27, 2025, which is included in other current assets in the accompanying condensed consolidated balance sheet. The Company expects this receivable will be repaid in full, although the timing is uncertain.

The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are non-interest bearing obligations of the issuing bank and generally mature within six months of the origination date. The Company's Chinese subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $8,861,000 at September 27, 2025 and $5,299,000 at December 28, 2024, are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date.

In accordance with Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740), the Company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which these differences are expected to reverse. A tax valuation allowance is established, as needed, to reduce deferred tax assets to the amount expected to be realized. In the period in which it becomes more likely than not that some or all of the deferred tax assets will be realized, the valuation allowance will be adjusted.

It is the Company's policy to provide for uncertain tax positions and the related interest and penalties based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. At September 27, 2025, the Company believes that it has appropriately accounted for any liability for unrecognized tax benefits.

To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established, the statute of limitations expires for a tax jurisdiction year, or the Company is required to pay amounts in excess of the liability, its effective tax rate in a given financial statement period may be affected.

In December 2021, the Organisation for Economic Co-operation and Development (OECD) released model rules introducing a new 15% global minimum tax for large multinational enterprises with an annual global revenue exceeding 750,000,000 euros (Pillar Two Rules). Since the release of the Pillar Two Rules, the OECD has issued five tranches of administrative guidance, as well as guidance on transitional safe harbor relief. Various countries, including the member states of the European Union, have adopted the Pillar Two Rules into their domestic laws, with certain rules coming into effect beginning in fiscal 2024. Some countries are in the process of drafting legislation for adoption in future years. While the Pillar Two Rules serve as a framework for implementing the minimum tax, countries may enact domestic laws that vary slightly from the Pillar Two Rules and may also adjust domestic tax incentives to align with the Pillar Two Rules on different timelines. The Company continues to monitor developments of the Pillar Two Rules and evaluate the potential impact they may have on the jurisdictions in which it operates, including eligibility to qualify for transitional safe harbor relief. To date, the Pillar Two Rules have not had a material impact on the Company's effective tax rate or consolidated financial statements, and the Company does not expect the Pillar Two Rules to have a material impact on its effective tax rate or consolidated financial statements for the fiscal year ending January 3, 2026.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions, including 100% bonus depreciation, domestic research cost expensing pursuant to Internal Revenue Code §174, and changes to the calculation of the interest expense limitation. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. There is no material impact of the OBBBA provisions to the Company's effective tax rate or consolidated financial statements for the quarter ended September 27, 2025. The Company is still evaluating any potential impact to cash tax payments related to the provisions of the OBBBA. The Company will continue to monitor the current and future impact of the OBBBA on its effective tax rate and consolidated financial statements as additional clarifications or interpretive guidance related to the OBBBA is released.

Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-06 which improves the practicality of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. Under this ASU, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, it is probable that the project will be completed, and the software will be used to perform the function intended. This ASU is effective for fiscal year 2028, with early adoption permitted and may be applied retrospectively. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. In July 2025, the FASB issued ASU No. 2025-05, to provide for a practical expedient permitting an entity to assume that conditions at the balance sheet date remained unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets accounted for under ASC 606, Revenue from Contracts with Customers. This ASU is effective for fiscal year 2026, with early adoption permitted. The amendments in this ASU should be applied prospectively. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

Income Taxes – Improvements to Income Tax Disclosures (Topic 740). In December 2023, the FASB issued ASU No. 2023-09, to improve income tax disclosure requirements, primarily through enhanced disclosures related to the income tax rate reconciliation and income taxes paid. This ASU is effective for fiscal year-end 2025 and may be applied retrospectively. The Company is in the process of determining the financial disclosures required under this ASU and continues to evaluate the effect that the adoption of this ASU will have on its consolidated financial statements.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosure (Topic 220). In November 2024, the FASB issued ASU No. 2024-03, to disaggregate operating expense into specific categories to provide enhanced transparency into the nature and function of expenses. This ASU is effective for fiscal year-end 2027 and interim periods beginning in fiscal 2028, with early adoption permitted and may be applied retrospectively. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

The Company's acquisitions are accounted for using the acquisition method of accounting and the results of the acquired businesses are included in its condensed consolidated financial statements from the date of acquisition. Historically, acquisitions have been made at prices above the fair value of identifiable net assets, resulting in goodwill. Acquisition costs were $2,253,000 in the third quarter of 2025 and $3,498,000 in the nine months ended September 27, 2025 and are included in selling, general and administrative (SG&A) expenses in the accompanying condensed consolidated statement of income.

On July 9, 2025, the Company acquired all the outstanding equity securities of Babbini S.p.A and G.P.S. Engineering S.r.l (collectively, Babbini), two Italy-based companies specializing in industrial dewatering and engineered power transmission solutions, for $16,483,000, net of cash acquired. The fair value of assets acquired totaled $35,470,000, including cash of $4,863,000, inventory of $13,825,000, property, plant, and equipment of $5,355,000, and intangible assets of $5,278,000. The fair value of liabilities assumed was $14,124,000, including customer deposits of $3,857,000 and accounts payable of $2,954,000. Babbini is part of the Company's Industrial Processing segment. The Company funded the acquisition through borrowings under its revolving credit facility.

See Note 11, Subsequent Events, for details on the Company's acquisition that occurred on October 7, 2025.

Basic and diluted earnings per share (EPS) were calculated as follows:

The effect of outstanding and unvested restricted stock units (RSUs) of the Company’s common stock totaling 5,000 shares in the third quarter of 2025, 5,000 shares in the third quarter of 2024, 19,000 in the first nine months of 2025 and 21,000 in the first nine months of 2024 were not included in the computation of diluted EPS for the respective periods as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the respective reporting periods.

The provision for income taxes was $29,416,000 in the first nine months of 2025 and $31,810,000 in the first nine months of 2024.

The effective tax rate of 27% in the first nine months of 2025 was higher than the Company’s statutory rate of 21% primarily due to nondeductible expenses, the distribution of the Company’s worldwide earnings, state taxes, and the cost of repatriating the earnings of certain foreign subsidiaries. These items were offset in part by a net tax benefit from the re-measurement of certain deferred income tax assets and liabilities due to the decrease to Germany's future statutory tax rate enacted in July 2025 and foreign tax credits.

The effective tax rate of 26% in the first nine months of 2024 was higher than the Company's statutory rate of 21% primarily due to the distribution of the Company's worldwide earnings, nondeductible expenses, state taxes, and the cost of repatriating the earnings of certain foreign subsidiaries. These items were offset in part by foreign tax credits.

Long-term obligations are as follows:

						September 27, 2025						December 28, 2024
(In thousands)
Revolving Credit Facility, due 2030						$	248,075					$	278,384
Senior Promissory Notes, due 2025 to 2028						6,660						6,660
Finance Leases, due 2025 to 2029						1,985						2,023
Other Borrowings, due 2025 to 2028						1,285						1,460
Total						258,005						288,527
Less: Current Maturities of Long-Term Obligations						(3,386)						(3,376)
Long-Term Obligations						$	254,619					$	285,151

See Note 8, Fair Value Measurements and Fair Value of Financial Instruments, for the fair value information related to the Company's long-term obligations.

On September 26, 2025, the Company entered into an eighth amendment and joinder (the Eighth Amendment) to its unsecured multi-currency revolving credit facility, originally dated as of March 1, 2017 (as amended and restated to date, the Credit Agreement). The Eighth Amendment, among other things, increased the Company's aggregate borrowing capacity from $400,000,000 to $750,000,000 and extended the maturity date from November 30, 2027 to September 26, 2030. In addition to the increased committed borrowing capacity, an uncommitted, unsecured incremental borrowing facility of $200,000,000 continues to be available under the Credit Agreement.

Interest on borrowings outstanding under the Credit Agreement accrues and is payable in arrears calculated at one of the following rates selected by the Company: (i) the Base Rate, as defined, plus an applicable margin of 0.25% to 1.25%, or (ii) Eurocurrency Rate, Term SOFR, Term CORRA, AUD Rate, and RFR, as applicable and defined, plus an applicable margin of 1.25% to 2.25%. The margin is determined based upon the ratio of the Company's total debt, net of unrestricted cash up to $50,000,000, to earnings before interest, taxes, depreciation, and amortization as defined in the Credit Agreement. Additionally, the Credit Agreement requires the payment of a commitment fee payable in arrears on the available committed borrowing capacity under the Credit Agreement, which ranges from 0.150% to 0.350%.

Obligations under the Credit Agreement, which includes customary events of default under such financing arrangements, may be accelerated upon the occurrence of an event of default. In addition, the Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to maintain a maximum consolidated leverage ratio of 3.75 to 1.00, or, if the Company elects, for the quarter during which a material acquisition occurs and for the three fiscal quarters thereafter, 4.25 to 1.00, and limitations on making certain restricted payments (including dividends and stock repurchases).

Loans under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Company.

During the third quarter of 2025, the Company borrowed approximately $21,000,000 of euro-denominated debt to finance the acquisition of Babbini. As of September 27, 2025, the outstanding balance under the Credit Agreement was $248,075,000, which included $101,075,000 of euro-denominated borrowings. The Company had $501,968,000 of available committed borrowing capacity as of September 27, 2025, which was calculated by translating its foreign-denominated borrowings using the administrative agent's borrowing date foreign exchange rates, in addition to the $200,000,000 uncommitted, unsecured incremental borrowing facility. See Note 11, Subsequent Events, for the additional borrowings incurred under the Company's Credit Agreement in connection with its acquisition that occurred on October 7, 2025.

The weighted average interest rate for the outstanding balance under the Credit Agreement was 4.48% as of September 27, 2025 and 5.27% as of December 28, 2024.

During the third quarter of 2025, the Company incurred $2,549,000 of debt issuance costs related to the Eighth Amendment. Unamortized debt issuance costs related to the Credit Agreement, included in other assets in the accompanying condensed consolidated balance sheet, were $3,199,000 at September 27, 2025 and $993,000 at December 28, 2024 and are being amortized to interest expense using the straight-line method.

In 2018, the Company entered into an uncommitted, unsecured Multi-Currency Note Purchase and Private Shelf Agreement (Note Purchase Agreement). Simultaneously with the execution of the Note Purchase Agreement, the Company issued senior promissory notes (Initial Notes) in an aggregate principal amount of $10,000,000, with a per annum interest rate of 4.90% payable semiannually, and a maturity date of December 14, 2028. The Company is required to prepay a portion of the principal of the Initial Notes beginning on December 14, 2023 and each year thereafter, and may optionally prepay the principal on the Initial Notes, together with any prepayment premium, at any time in accordance with the Note Purchase Agreement. The obligations of the Initial Notes may be accelerated upon an event of default as defined in the Note Purchase Agreement, which includes customary events of default under such financing arrangements.

The Initial Notes are pari passu with the Company’s indebtedness under the Credit Agreement, and any other senior debt of the Company, subject to certain specified exceptions, and participate in a sharing agreement with respect to the obligations of the Company and its subsidiaries under the Credit Agreement. The Initial Notes are guaranteed by certain of the Company’s domestic subsidiaries.

As of September 27, 2025, the Company was in compliance with the covenants related to its debt obligations.

The Company recognized stock-based compensation expense of $2,696,000 in the third quarter of 2025, $2,627,000 in the third quarter of 2024, $8,516,000 in the first nine months of 2025 and $7,926,000 in the first nine months of 2024 within SG&A expenses in the accompanying condensed consolidated statement of income. The Company recognizes compensation expense for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. For time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award based on the grant date fair value, and net of actual forfeitures recorded when they occur. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately vesting portion of the award based on the grant date fair value, net of actual forfeitures recorded when they occur, and remeasured each reporting period until the total number of RSUs to be issued is known. Unrecognized compensation expense related to stock-based compensation totaled $11,316,000 at September 27, 2025, which will be recognized over a weighted average period of 1.7 years.

On May 14, 2025, the Company granted an aggregate of 2,635 RSUs to its non-employee directors with an aggregate grant date fair value of $850,000, of which 50% vested on June 1, 2025, 25% vested on the last day of the third fiscal quarter of 2025 and the remaining 25% will vest on the last day of the fourth fiscal quarter of 2025, subject to continued service as a director on the applicable vesting dates.

On March 4, 2025, the Company granted performance-based RSUs to certain of its officers, which represented, in aggregate, the right to receive 14,626 shares (target RSU amount), with an aggregate grant date fair value of $5,406,000. The RSUs are subject to adjustment based on the achievement of the performance measure selected for the fiscal year, which is a specified target for adjusted earnings before interest, taxes, depreciation, and amortization (target adjusted EBITDA) generated from operations for the fiscal year. The RSUs are adjusted by comparing the actual adjusted EBITDA for the performance period to the target adjusted EBITDA. Actual adjusted EBITDA between 50% and 100% of the target adjusted EBITDA results in an adjustment of 50% to 100% of the target RSU amount. Actual adjusted EBITDA between 100% and 115% of the target adjusted EBITDA results in an adjustment using a straight-line linear scale between 100% and 150% of the target RSU amount. Actual adjusted EBITDA in excess of 115% results in an adjustment capped at 150% of the target RSU amount. If actual adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2025 fiscal year, these performance-based RSUs will be forfeited. The Company recognizes compensation expense based on the probable number of performance-based RSUs expected to vest. Following the adjustment, the performance-based RSUs will be subject to additional time-based vesting, and will vest in three equal annual installments on March 10 of 2026, 2027, and 2028, provided that the officer is employed by the Company on the applicable vesting dates.

On March 4, 2025, the Company granted time-based RSUs representing 11,199 shares to certain of its officers and employees with an aggregate grant date fair value of $4,139,000. These time-based RSUs vest in three equal annual installments on March 10 of 2026, 2027, and 2028, provided that a recipient is employed by the Company on the applicable vesting dates.

Comprehensive income combines net income and other comprehensive items, which represent certain amounts that are reported as components of stockholders' equity in the accompanying condensed consolidated balance sheet.

Changes in each component of accumulated other comprehensive items (AOCI), net of tax, are as follows:

Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

•Level 3—Unobservable inputs based on the Company's own assumptions.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:

						Fair Value as of September 27, 2025
(In thousands)						Level 1						Level 2						Level 3						Total
Assets:
Money market funds and time deposits (a)						$	31,129					$	—					$	—					$	31,129
Banker's acceptance drafts (b)						$	—					$	8,861					$	—					$	8,861
Liabilities:
Contingent consideration (c)						$	—					$	—					$	1,766					$	1,766

(a)Included in cash and cash equivalents in the accompanying condensed consolidated balance sheet.

(b)Included in accounts receivable in the accompanying condensed consolidated balance sheet.

(c)Included in other long-term liabilities in the accompanying condensed consolidated balance sheet.

(d)Included in other current liabilities at December 28, 2024 in the accompanying condensed consolidated balance sheet.

The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during the first nine months of 2025. Banker's acceptance drafts are carried at face value, which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The forward currency-exchange contracts are hedges of either recorded assets or liabilities or anticipated transactions and represent the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above.

In connection with the acquisition of a technology company in August 2024, the Company assumed contingent consideration with an estimated fair value of $1,785,000, measured at the date of acquisition. The contingent consideration is payable upon the achievement of certain revenue performance targets earned between June 30, 2025 and June 30, 2027. The maximum future value of the contingent consideration subject to payment is approximately $11,445,000, calculated using the foreign currency spot rate at September 27, 2025.

The Company uses the income approach technique to estimate the fair value of its Level 3 contingent consideration, including valuation models that incorporate probability adjusted assumptions and simulations related to the achievement of milestones and the likelihood of making the related payment. The unobservable inputs used in the fair value measurements include the probability of successful achievement of certain revenue targets, forecasted revenue, revenue volatility, and discount rates. These assumptions were estimated based on a review of historical and projected results. Projected contingent consideration related to revenue-based payments are discounted back to the current period using a discounted cash flow model. Changes to the fair value of contingent consideration can result from changes to one or multiple inputs, including the discount rate, projected revenue, revenue volatility, and the assumed probabilities of successful achievement of certain revenue targets.

The following table provides a rollforward of the change in the fair value of the contingent consideration as determined by Level 3 inputs during the first nine months of 2025:

The carrying value and fair value of debt obligations, excluding lease obligations, are as follows:

The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust frequently, based on prevailing market rates. The fair value of the senior promissory notes is primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period end, which represent Level 2 measurements.

The Company is a global supplier of technologies and engineered systems that drive Sustainable Industrial Processing and operates in three reportable segments consisting of its Flow Control segment, Industrial Processing segment, and Material Handling segment. The Company aggregated its operating segments into its reportable segments where they contained similar products and economic characteristics, and shared similar types of customers, and production and distribution methods. The Flow Control segment is comprised of its fluid-handling and its doctoring, cleaning, & filtration operating segments, and the Industrial Processing segment is comprised of its wood processing and its fiber processing operating segments.

Each of the Company's reportable segments is led by a segment vice president, who reports directly to the Chief Executive Officer (CEO). The Company has determined that its CEO is its Chief Operating Decision Maker (CODM) who is responsible for assessing performance and allocating resources. The CODM utilizes segment gross profit margin and segment operating income margin to evaluate the performance of each segment and allocate resources effectively.

The CODM primarily reviews these profit measures in comparison to forecasts, trends, key performance targets, and results of industry peers to assess profitability, identify areas for improvement, and make strategic decisions regarding investments and resource allocation within each segment.

A description of each reportable segment follows:

•Flow Control – Custom-engineered products, systems, and technologies that control the flow of fluids used in industrial and commercial applications to keep critical processes running efficiently in the packaging, tissue, food, metals, energy, and other industrial sectors. The Company's primary products include rotary sealing devices, steam systems, expansion joints, doctor systems, roll and fabric cleaning devices, and filtration and fiber recovery systems.

•Industrial Processing – Equipment, machinery, and technologies used to recycle paper and paperboard and process timber, and optimize industrial steam boiler efficiency for use in the packaging, paper, tissue, wood products and food processing industries, among others. The Company's primary products include fiber processing systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, custom-engineered knife systems, industrial boiler cleaning technologies, and continuous dewatering equipment. In addition, the Company provides industrial automation and digitization solutions to process industries.

•Material Handling – Products and engineered systems used to handle bulk and discrete materials for secondary processing or transport in the aggregates, mining, food, and waste management industries, among others. The Company's primary products include conveying and vibratory equipment and balers. In addition, the Company manufactures and sells biodegradable, absorbent granules used as carriers in agricultural applications and for oil and grease absorption.

The following tables present financial information for the Company's reportable segments: