Financial Performance - Net sales for the second quarter of fiscal 2025 were $5.89 billion, with organic net sales up 1% compared to the prior year[5]. - Operating income was reported at $477 million, with an adjusted operating income of $519 million, resulting in an operating margin of 8.1%[5]. - The company narrowed its fiscal 2025 net sales outlook to between $12.0 billion and $12.2 billion, and diluted earnings per share expectations to $1.49 to $1.59[4][6]. - Net sales for the quarter ended April 27, 2025, were $2,898,810, an increase from $2,887,352 in the same quarter last year, representing a growth of 0.4%[24]. - Total net sales increased by 0.4% to $2,898,810 thousand in Q2 2025 from $2,887,352 thousand in Q2 2024[27]. - The company reported a total net sales of $5.888 billion for the six months ended April 27, 2025, a slight increase of 0.1% from $5.884 billion in the same period last year[39]. Earnings and Margins - Gross profit for the quarter was $484,433, down from $503,806 year-over-year, indicating a decrease of 3.0%[24]. - Operating income for the quarter was $248,352, slightly lower than $252,320 in the previous year, reflecting a decline of 1.9%[24]. - Net earnings attributable to Hormel Foods Corporation for the quarter were $180,017, compared to $189,278 in the same quarter last year, a decrease of 4.7%[24]. - Adjusted net earnings attributable to Hormel Foods Corporation decreased to $192,928 thousand in Q2 2025 from $207,562 thousand in Q2 2024[35]. - Adjusted diluted earnings per share for Q2 2025 were $0.35, down from $0.38 in Q2 2024, reflecting a decrease of 7.9%[36]. - The adjusted operating margin for Q2 2025 was 9.1%, compared to 9.6% in Q2 2024[36]. Tax and Expenses - The effective tax rate for the quarter was 21.9%, with expectations for fiscal 2025 to be between 22.0% and 23.0%[17]. - The effective tax rate for the quarter was 22.0%, a slight improvement from 22.5% in the same quarter last year[24]. - Net unallocated expenses rose by 7.8% to $65,411 thousand in Q2 2025 from $60,694 thousand in Q2 2024[27]. - Earnings before income taxes decreased by 5.6% to $230,489 thousand in Q2 2025 compared to $244,139 thousand in Q2 2024[27]. Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of the period were $669,688, down from $741,881 at the beginning of the year, a decrease of 9.7%[25]. - Capital expenditures for the quarter were $75 million, with a target for fiscal 2025 set between $275 million and $300 million[17]. - Net cash provided by operating activities for the six months ended April 27, 2025, was $365,646, down from $640,127 in the same period last year, a decline of 42.9%[26]. Dividends and Shareholder Returns - The company returned approximately $159 million to stockholders through dividends during the quarter[17]. - Dividends declared per share increased to $0.2900 from $0.2825 in the same quarter last year, representing a growth of 6.0%[24]. Segment Performance - The Applegate brand saw consumption growth outpacing the total edible category, while Jennie-O ground turkey experienced notable retail sales growth[10][11]. - The international segment achieved double-digit volume and net sales growth, particularly in the China market, driven by strong shipments of refrigerated products[13]. - The Planters brand showed sequential improvement in distribution and overall retail sales, reflecting its strength in the marketplace[10]. - Segment profit for Retail increased by 3.6% to $137,135 thousand in Q2 2025, while Foodservice segment profit decreased by 5.8% to $140,633 thousand[27]. - International segment volume grew by 8.9% to 79,518 lbs in Q2 2025, with net sales increasing by 7.0% to $178,533 thousand[27]. - Total segment profit decreased by 2.9% to $296,175 thousand in Q2 2025 compared to $304,903 thousand in Q2 2024[27]. Strategic Initiatives - Hormel Foods expects to see T&M initiative benefits in the range of $100 million to $150 million year over year[6]. - The company initiated a multi-year Transform and Modernize (T&M) initiative to optimize supply chain and portfolio, excluding non-recurring costs from financial performance measures[29]. - The Transform and Modernize initiative is expected to incur estimated charges of $46 million to $52 million in fiscal 2025[42]. - The company sold Mountain Prairie, LLC, resulting in a one-time loss not reflective of ongoing operations[30].

Business Operations and Risks - As of March 31, 2025, the company had over 21,600 independent equipment rental dealers, with nearly 50% of U-Move rental revenue generated through this network[78]. - The company faces risks related to the significant increase in costs for acquiring new rental trucks, which could adversely affect its fleet rotation program[77]. - The company relies on a limited number of manufacturers for its rental trucks, primarily Ford and General Motors, exposing it to production risks[76]. - Cybersecurity incidents pose a risk to the company's operations, with past incidents not resulting in material impacts but future risks remaining significant[91]. - The company’s ability to maintain its network of independent dealers is crucial for serving customers and could affect its financial position if disrupted[79]. - The company faces significant competition in the truck rental and self-storage industries, which could adversely impact occupancy levels and rental rates[95][96]. - Economic conditions, including credit market fluctuations and inflation, may negatively affect the company's business and results of operations[98]. - The company is subject to numerous environmental laws and regulations, which could lead to increased compliance costs and potential liabilities[108][109]. - The company is classified as a "controlled company," with approximately 50.1% of Voting Common Stock owned by a small group of stockholders, potentially limiting governance standards[103][104]. - The company may face challenges in maintaining its competitive position due to rapid technological advancements and changing consumer preferences[96][97]. Financial Performance and Position - The company reported $0.4 million of reinsurance recoverables and $32.4 million of reserves and liabilities ceded to reinsurers as of December 31, 2024[93]. - The company's largest exposure to a single reinsurer was $20.3 million as of December 31, 2024[93]. - As of March 31, 2025, the company had total debt outstanding of $7,229.3 million and operating lease liabilities of $47.0 million[101]. - A.M. Best affirmed the financial strength rating for Oxford and Christian Fidelity Life Insurance Company of A, with the outlook revised to negative from stable[100]. - Approximately 5.1% of the company's revenue was generated in Canada for both fiscal 2025 and 2024, with no material impact expected from a 10% change in the U.S. dollar relative to the Canadian dollar[260]. Interest Rate and Market Risks - As of March 31, 2025, the company had $814.4 million in variable rate debt obligations, with $437.5 million not fixed through interest rate swaps[254]. - A 100 basis point increase in the Secured Overnight Funding Rate (SOFR) would decrease future earnings and cash flows by $4.4 million annually[254]. - The company's fixed maturity portfolio market value was $2,479,498 thousand as of March 31, 2025, with a sensitivity analysis showing a decrease to $2,372,291 thousand with a +100 basis point change in interest rates[257]. - The interest rate risk sensitivity of the fixed maturity portfolio indicates a potential decrease in fair value to $2,158,122 thousand with a -300 basis point change in interest rates[257]. - The company utilizes interest rate swap agreements to mitigate exposure to interest rate changes, with fixed rates ranging from 2.72% to 4.71%[254]. - The net market value of derivative hedges related to indexed annuity products was $8.8 million as of March 31, 2025, down from $10.5 million in 2024[258]. - The company does not hedge foreign currency risk as the exposure is not considered material[260]. - The company does not use derivative financial instruments for speculative purposes, focusing instead on risk mitigation strategies[253]. Strategic Initiatives and Challenges - Regulatory pressures favoring electric vehicles may require significant infrastructure improvements, potentially impacting the company's business model[80]. - The company is actively developing new technologies to adapt to changing customer demands, but the success of these initiatives is uncertain[97]. - The trading prices of the company's Voting Common Stock and Non-Voting Common Stock may be volatile, influenced by various market factors[107]. - The company carries excess of loss insurance coverage to mitigate risks associated with potential terrorist attacks, although the sufficiency of this coverage is uncertain[119]. - The Tax Cuts and Jobs Act and the CARES Act have introduced significant changes to U.S. tax laws that may adversely affect the company's financial condition[117].

Business Operations and Risks - As of March 31, 2025, the company had over 21,600 independent equipment rental dealers, with nearly 50% of U-Move rental revenue generated through this network[78]. - The company faces risks related to the significant increase in costs for acquiring new rental trucks, which could adversely affect the fleet rotation program[77]. - The company relies on a limited number of manufacturers for rental trucks, primarily Ford and General Motors, exposing it to production risks[76]. - Cybersecurity incidents pose a risk to the company's operations, with past incidents not resulting in material impacts but future risks remaining significant[91]. - The company has implemented security protocols and employs IT security team members to mitigate cybersecurity risks[87]. - The company’s ability to maintain its network of independent dealers is crucial for serving customers and could impact financial results if disrupted[79]. - The company faces significant competition in the truck rental and self-storage industries, which could adversely impact occupancy levels and rental rates[95][96]. - Economic conditions, including credit markets and inflation, may negatively affect the company's business and results of operations[98]. - The company is subject to numerous environmental laws and regulations, which could lead to increased compliance costs and potential liabilities[108][109]. - The company is actively developing new technologies to adapt to changing customer demands, but the success of these initiatives is uncertain[97]. - The company may face challenges in maintaining its competitive position due to rapid technological changes and the emergence of new competitors[97]. Financial Position and Market Conditions - The company reported $0.4 million of reinsurance recoverables and $32.4 million of reserves and liabilities ceded to reinsurers as of December 31, 2024[93]. - The company's largest exposure to a single reinsurer was $20.3 million as of December 31, 2024[93]. - As of March 31, 2025, the company had total debt outstanding of $7,229.3 million and operating lease liabilities of $47.0 million[101]. - A.M. Best affirmed the financial strength rating for Oxford and Christian Fidelity Life Insurance Company of A, with the outlook revised to negative from stable[100]. - The trading prices of the company's Voting Common Stock and Non-Voting Common Stock may be volatile, influenced by various market factors[107]. - Approximately 5.1% of the company's revenue was generated in Canada for both fiscal 2025 and 2024[260]. Interest Rate and Derivative Exposure - As of March 31, 2025, the company had $814.4 million in variable rate debt obligations, with $437.5 million not fixed through interest rate swaps[254]. - A 100 basis point increase in the Secured Overnight Funding Rate (SOFR) would decrease future earnings and cash flows by $4.4 million annually[254]. - The market value of the fixed maturity portfolio as of March 31, 2025, was $2,479,498 thousand, with a potential decrease to $2,372,291 thousand if interest rates increased by 100 basis points[257]. - The net market value of derivative hedges related to equity market exposure was $8.8 million as of March 31, 2025, with notional amounts of $326.2 million[258]. - The company does not hedge foreign currency risk as the exposure is not considered material[260]. - Interest rate swap agreements are used to mitigate exposure to changes in interest rates, with fixed rates ranging from 2.72% to 4.71%[254]. - The interest rate risk sensitivity of the fixed maturity portfolio indicates a decrease in fair value with rising interest rates, with a drop of $121,207 thousand at +300 basis points[257]. - The company does not use derivative financial instruments for speculative purposes, focusing instead on risk mitigation[253]. Regulatory and Tax Considerations - Regulatory pressures favoring electric vehicles may require significant infrastructure improvements, potentially impacting the company's business model[80]. - The Tax Cuts and Jobs Act and the CARES Act have introduced significant changes to U.S. tax laws that may adversely affect the company's financial condition[117]. - The company is classified as a "controlled company," with approximately 50.1% of Voting Common Stock owned by a small group of stockholders, potentially limiting governance standards[103][104]. - The company carries excess of loss insurance coverage to mitigate risks associated with potential terrorist attacks[119].

Financial Performance - In fiscal 2025, the company's sales were $537,549,000 (56%) from the U.S. and $425,478,000 (44%) from non-U.S. markets[33]. - The company's product sales breakdown for fiscal 2025 included 50% from hoists, 16% from high-precision conveying systems, and 11% from digital power control systems[33]. - The company's backlog of orders as of March 31, 2025, was approximately $322.5 million, an increase from $280.8 million on March 31, 2024, reflecting a growth of about 14.9% year-over-year[49]. - Raw material and component purchases totaled approximately $375 million in fiscal 2025, representing 59% of the cost of products sold[58]. - The overall safety incident rate for fiscal 2025 was 0.54, down from 0.71 in fiscal 2024, indicating improved workplace safety[59]. Market Position and Strategy - The company achieved a market leadership position in hoists, material handling digital power control systems, and precision conveyors in the U.S. and Europe[19]. - The precision conveyance acquisitions of Dorner, Garvey, and montratec expanded the company's product offerings and established a platform for growth in a highly fragmented industry[23][24]. - The Kito Acquisition is expected to close during fiscal 2026 and will enhance the company's geographic reach and expand its lifting securement and consumables portfolio[26]. - The company plans to fund the Kito Acquisition through $3,050,000,000 in committed debt financing and $800,000,000 of preferred equity investment[27]. - The company's Total Addressable Market (TAM) increased by approximately $5 billion with the acquisition of conveyor businesses, with the specialty conveying microsegment growing at an estimated 6% to 8% annually[22]. - The company is focused on expanding its market share through product localization, new product development, and advancements in automation[21]. - The company has a strategic growth framework that includes strengthening, growing, expanding, and reimagining its core business[21]. - The company is committed to maintaining positive perceptions of its brands and successfully integrating acquisitions to enhance its competitive position[13]. Global Operations - The company operates in 25 countries and had 3,478 employees globally as of March 31, 2025[55]. - In fiscal 2025, 44% of net sales were generated from foreign manufacturing plants and sales offices, indicating significant international exposure[207]. Risk Management - The company is exposed to market risks including commodity prices for raw materials and foreign currency exchange rates, which may impact financial performance[205]. - The company has a cross currency swap agreement with a notional amount of $72,040,000, maturing on March 31, 2028, to hedge against foreign exchange rate changes[208]. - The company has foreign currency forward agreements with a notional amount of $36,528,000 to hedge forecasted inventory purchases in foreign currencies[209]. - A 10% change in the value of the U.S. dollar against significant foreign currencies would impact income from operations by approximately $2,407,000[207]. - The company actively monitors trade tariffs and implements pricing strategies, including tariff surcharges, to mitigate their impact[206]. Financial Obligations - As of March 31, 2025, the company had $437.6 million outstanding under Term Loan B and $25.0 million under the AR Securitization Facility, both subject to variable interest rates[210]. - The company expects to reclassify approximately $376,000 from accumulated other comprehensive loss (AOCL) to interest expense over the next 12 months due to interest rate swaps[212]. - A 100 basis point increase in variable rates would increase annual cash interest by approximately $1.1 million[213]. - The company expects to reclassify approximately $36,000 from AOCL to foreign currency exchange loss (gain) in the next 12 months related to an intercompany loan[208]. Employee Engagement and Culture - The company emphasizes a people-first culture, focusing on employee engagement, training, and development opportunities to drive strategic progress[60]. - The principal competitive factors include customer service, product availability, and brand reputation, which are critical for maintaining market position[51]. - The company has established a network of 17 chain repair service stations and over 229 certified hoist service and repair stations globally to enhance service access[47].

Financial Position - As of March 31, 2025, the company had cash of $403 and a working capital deficit of $10,418,040, compared to cash of $101,674 and a working capital deficit of $17,358,530 as of December 31, 2024[151]. - As of March 31, 2025, cash held in the trust account was $3,282,555, including $171,058 of interest[164]. - As of March 31, 2025, the Company had $403 in cash held outside the Trust Account and a working capital deficit of $10,418,040[168]. - As of March 31, 2025, the total amount owed to the Sponsor is $10,041,967, which includes $202,556 for expenses paid by the Sponsor on behalf of the Company[176]. - The Company signed multiple promissory notes with the Sponsor, with the total outstanding amount under these notes as of March 31, 2025, being $7,539,411[171][175]. - The Company has no long-term debt or capital lease obligations, only a monthly fee of $5,000 for office space and administrative services[177]. Business Performance - For the three months ended March 31, 2025, the company reported a net loss of $3,367,514, which included a loss of $3,046,500 in the fair value of warrant liabilities and operating costs of $353,819[153]. - For the three months ended March 31, 2024, the company reported a net loss of $22,015,739, with a loss of $21,132,500 in the fair value of warrant liabilities[154]. - The company generated interest income of $34,560 from its trust account for the three months ended March 31, 2025[153]. Initial Public Offering and Trust Account - The company completed its Initial Public Offering on November 25, 2020, raising gross proceeds of $115,000,000 from the sale of 11,500,000 units[155]. - Following the Initial Public Offering, a total of $116,725,000 was placed in the trust account after incurring transaction costs of $4,099,907[156]. - The company intends to use substantially all funds in the trust account to complete its business combination and for working capital of the target business[167]. Business Combination and Obligations - The company executed multiple extensions for its business combination deadline, with the latest extension allowing until June 26, 2024[161]. - The Company has until June 26, 2025, to consummate a business combination, with substantial doubt raised about its ability to continue as a going concern[172][173]. - The Company is obligated to pay I-Bankers Securities a cash fee of $3,162,500 upon the consummation of a business combination[178]. - The Company has a legal services engagement with Woolery & Co., with a total fee obligation of $2.0 million upon completion of a business combination[179]. - A Transaction Success Fee of $100,000 is due to Gateway Group, Inc. upon successful completion of a business combination[180]. - The Company has signed a Merger Proxy/Business Combination Rate Agreement with Edgar Agents LLC, which includes a Transaction Success Fee of $50,000[182]. Warrant Liabilities - The Company evaluated its warrants as derivative liabilities, with fair value determined based on the trading price of the Public Warrants as of March 31, 2025[186][187]. Reporting Classification - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act and is not required to provide the information typically mandated for this item[190].

Financial Position - As of March 31, 2025, the company had cash of $403 and a working capital deficit of $10,418,040, compared to cash of $101,674 and a working capital deficit of $17,358,530 as of December 31, 2024[151]. - As of March 31, 2025, the cash held in the trust account was $3,282,555, including $171,058 of interest[164]. - As of March 31, 2025, the Company had $403 in cash held outside the Trust Account and a working capital deficit of $10,418,040[168]. - As of March 31, 2025, the total amount owed to the Sponsor was $10,041,967, including $202,556 for expenses paid by the Sponsor on behalf of the Company[176]. - The Company has no long-term debt or capital lease obligations, only a monthly fee of $5,000 for office space and administrative services[177]. Business Performance - For the three months ended March 31, 2025, the company reported a net loss of $3,367,514, which included a loss of $3,046,500 in the fair value of warrant liabilities and operating costs of $353,819[153]. - For the three months ended March 31, 2024, the company reported a net loss of $22,015,739, with a loss of $21,132,500 in the fair value of warrant liabilities[154]. - The company generated interest income of $34,560 from its trust account for the three months ended March 31, 2025[153]. Initial Public Offering - The company completed its Initial Public Offering on November 25, 2020, raising gross proceeds of $115,000,000 from the sale of 11,500,000 units[155]. - Following the Initial Public Offering, a total of $116,725,000 was placed in the trust account after accounting for transaction costs of $4,099,907[156]. - The Company is obligated to pay I-Bankers Securities a cash fee of $3,162,500 upon the consummation of a business combination, which is 2.75% of the gross proceeds of the Initial Public Offering[178]. Business Combination - The company intends to use substantially all funds in the trust account to complete its business combination, with remaining proceeds to be used for working capital and growth strategies[167]. - The company executed multiple extensions for its business combination deadline, with the latest extension allowing until June 26, 2024[161]. - The Company has until June 26, 2025, to consummate a business combination, with substantial doubt raised about its ability to continue as a going concern[172][173]. Shareholder Actions - The company redeemed 621,609 shares of common stock for $7,353,424 during the redemption process following stockholder meetings[163]. Sponsor Obligations - The Company signed multiple promissory notes with the Sponsor, with the total outstanding amount under these notes as of March 31, 2025, being $7,539,411[171][175]. - The Company has a legal services engagement with Woolery & Co., with a total fee obligation of $2.0 million upon completion of a business combination, of which $1.2 million will be assumed by the Sponsor[179]. - The Company has signed a Public Relations Agreement with Gateway Group, which includes a Transaction Success Fee of $100,000 upon successful completion of a business combination[180]. - The Company has entered into a Merger Proxy/Business Combination Rate Agreement with Edgar Agents LLC, which includes a Transaction Success Fee of $50,000 upon successful completion and filing of documents with the SEC[182]. Valuation and Reporting - The Company evaluated its Public and Private Placement Warrants as derivative liabilities, with fair value determined based on the trading price of the Public Warrants as of March 31, 2025[186][187]. - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act and is not required to provide the information typically required under this item[190].

Financial Performance - Net revenues for the first quarter of fiscal 2025 increased by $69.8 million or 4.2%, with comparable brand revenue growth of 3.4%[81] - Diluted earnings per share for the first quarter of fiscal 2025 was $1.85, a decrease from $1.99 in the same quarter of fiscal 2024[85] - Gross profit for the first quarter of fiscal 2025 was $765.8 million, representing 44.3% of net revenues, down from 47.9% in the first quarter of fiscal 2024[96] - Gross profit decreased by $29.4 million, or 3.7%, with gross margin declining to 44.3% from 47.9% year-over-year[97] - Selling, general and administrative expenses (SG&A) decreased by $3.0 million, or 0.6%, with SG&A as a percentage of net revenues decreasing to 27.5% from 28.8%[100] - The effective tax rate increased to 23.0% from 21.8% year-over-year, primarily due to lower excess tax benefits from stock-based compensation[101] - Net cash provided by operating activities was $118.9 million, down from $226.8 million in the first quarter of fiscal 2024[115] Brand Performance - Pottery Barn, the largest brand, achieved comparable brand revenue growth of 2.0%, while Pottery Barn Kids and Teen brands saw growth of 3.8%[82] - The Williams Sonoma brand experienced a significant growth of 7.3% in comparable brand revenue, driven by strong performance in kitchen and home categories[84] - Emerging brands, including Rejuvenation, Mark and Graham, and GreenRow, delivered double-digit brand comp growth on a combined basis[84] Cash and Investments - As of May 4, 2025, the company had $1.0 billion in cash and cash equivalents and generated operating cash flow of $118.9 million[86] - The company invested $58.3 million in capital expenditures and returned $164.6 million to shareholders through stock repurchases and dividends in the first quarter of fiscal 2025[86] - Net cash used in investing activities increased to $58.2 million from $39.5 million, mainly due to technology and supply chain enhancements[116] - Net cash used in financing activities rose to $230.0 million from $193.7 million, driven by increased stock repurchases and dividend payments[117] - As of May 4, 2025, the company held $1.0 billion in cash and cash equivalents, with $96.1 million held by international subsidiaries[110] - The company has a $500 million unsecured revolving credit facility, with the option to increase it by up to $250 million[111] Operational Strategy - The company plans to focus on returning to growth, enhancing customer service, and driving earnings amid a challenging macroeconomic environment[88] - The company plans to use cash resources for inventory purchases, employment-related costs, advertising, and capital expenditures for the remainder of fiscal 2025[108] - The total store count decreased to 508 as of May 4, 2025, with 3 openings and 7 closures during the quarter[93] - The company experienced varying levels of inflation impacting costs, but its operating model helped mitigate these increased costs[125]

Coal Production and Operations - The company has not mined or sold thermal coal since mid-2019, with all mining operations currently idled due to adverse market conditions [196]. - In 2023, the Carnegie 1 Mine produced approximately 67,000 tons of coal, selling at an average price of $180 per ton [200]. - The Carnegie 2 Mine produced approximately 13,000 tons of coal in 2023, with an average selling price of $237 per ton [201]. - The McCoy Elkhorn subsidiary has an estimated capacity to produce up to approximately 40,000 tons of coal per month from Mine 15 when operational [199]. - The company holds 11 additional coal mining permits that are idled or in various stages of reclamation, with no current plans to bring them into production [208]. - Wyoming County Coal holds approximately 5,668,000 tons of coal deposits, with no current production from its mining permits [224]. - The E4-2 mine in Perry County has an estimated production capacity of 80,000 tons per month, but produced only 106,000 tons in 2022 due to adverse market conditions [235]. - The Davidson Branch Preparation Plant has a capacity of 1,300 tons per hour but is currently not operating due to idled mining operations [236]. - The company has approximately 200 mineral and surface leases required for its coal mining operations [245]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $31,927, a decrease of $62,092 compared to $94,019 in 2024, primarily due to a reduction of $64,667 in royalty income [258]. - Total operating expenses decreased by $1,808,844 to $5,015,360 for the three months ended March 31, 2025, driven by lower coal production costs and reduced professional fees [259]. - Net loss attributable to AREC shareholders for the three months ended March 31, 2025, was $6,652,763, a decrease of $288,600 compared to a net loss of $6,941,363 in 2024 [258]. - Cash used in operating activities for the three months ended March 31, 2025, was $1,434,850, a decrease from $4,726,617 in 2024 [264]. - Cash provided by investing activities was $741,401 for the three months ended March 31, 2025, compared to cash used of $432,642 in 2024 [265]. - Cash provided by financing activities was $76,799 for the three months ended March 31, 2025, a significant decrease from $148,262,883 in 2024 due to the absence of bond issuances [266]. - As of March 31, 2025, the company had a cash balance of $24,623 and a working deficit of $75,839,150, indicating liquidity challenges [263]. Capital Expenditures and Investments - The company has expended approximately $32,500,000 of the $36,500,000 initial project fund for Wyoming County Coal as of December 31, 2024 [228]. - The purchase price allocated to the Wyoming County Coal property was approximately $22,300,000, primarily settled with shares of the Company's Class A Common stock [230]. - The company had no material commitments for capital expenditures as of March 31, 2025 [268]. Business Diversification - The company has diversified its revenue streams by establishing subsidiaries focused on metal recovery and rare earth elements, with ReElement Technologies LLC being one of them [194]. - The company anticipates increasing revenues from its new ReElement and Electrified Materials businesses in 2025, but will require cash flows from financing activities to support operations [262]. Operational Capacity - The Supreme Energy Preparation Plant, a 400 ton-per-hour facility, is currently idled and would require significant capital to bring back into operation [215]. - The Bevins 1 Preparation Plant has a raw coal stockpile storage capacity of approximately 25,000 tons and clean coal stockpile storage of 100,000 tons [203]. - The Mill Creek Preparation Plant has an operational capacity of 800 tons per hour, but currently utilizes less than 10% of this capacity [220]. Other Financial Metrics - The increase in net other expense was primarily due to a decrease in interest income of $485,630 and an increase in interest expense of $1,089,817 compared to the same period in 2024 [261]. - The company employs approximately 23 direct employees and is headquartered in Fishers, Indiana [256].

Backlog and Revenue Potential - As of March 31, 2025, the company's backlog was approximately $1.90 billion, with $1.54 billion related to Systems & Support and $0.36 billion to Interiors [23]. - The backlog as of March 31, 2024, was also approximately $1.90 billion, indicating stability in order volume year-over-year [23]. - Approximately $1.19 billion of the existing backlog is estimated to be shipped by March 31, 2026, reflecting future revenue potential [23]. Customer Dependency and Competition - A significant portion of net sales is dependent on Boeing, highlighting the risk of financial impact from reduced sales to this major customer [24]. - The company competes primarily with Tier 1 and Tier 2 systems suppliers and component manufacturers in the aerospace industry [25]. Employee Safety and Labor Relations - The total recordable incident rate (TRIR) improved from 1.17 in 2022 to 0.6 in 2024, indicating enhanced employee safety measures [44]. - Approximately 37% of net sales are derived from facilities where at least some employees are unionized, indicating a significant labor presence [39]. - The company employs approximately 3,696 permanent employees, with 465 represented by labor unions, reflecting a diverse workforce [39]. - The company emphasizes human capital management, focusing on talent acquisition, retention, and employee engagement metrics [37]. Merger and Acquisition Activity - The company entered into a Merger Agreement with Titan BW Acquisition Holdco Inc., with each share of common stock to be converted into $26.00 in cash at the closing of the Merger [54]. - Stockholders approved the Merger on April 16, 2025, and the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on March 10, 2025 [55]. - The Merger is expected to close in the second half of calendar year 2025, pending customary closing conditions and regulatory approvals [55]. Financial Risks and Debt Management - The company is subject to foreign currency exchange rate risk and uses foreign currency forward contracts to hedge against this risk [229]. - A 10% change in the exchange rate of the company's foreign currency contracts would not have a material impact on unrecognized gains or losses within operating income [229]. - The company's long-term debt is carried at amortized cost, and fluctuations in interest rates do not impact consolidated financial statements [230]. - The fair value of outstanding debt, which pays interest at a fixed rate, will fluctuate with movements of interest rates [230]. - The weighted average interest rates for fixed rate cash flows range from 7.33% to 8.96% as of March 31, 2025 [232]. - Total fixed rate cash flows amount to approximately $983,720,000, with significant cash flows expected in the next 12 months and 13-24 months [232]. - There are no other significant market risk exposures identified by the company [232]. Community Engagement - The Triumph Group Charitable Foundation allocated approximately $0.5 million to around 130 recipient organizations in fiscal year 2025, demonstrating commitment to community support [46].

Financial Performance - Revenue for Q2 fiscal 2025 was $1.604 billion, an increase of $149.6 million or 10% compared to Q2 fiscal 2024[157] - Operating income for Q2 fiscal 2025 was $376.4 million, an increase of $44.4 million or 13% year-over-year[163] - Total revenue for the six months ended April 30, 2025, was $3.059 billion, an increase of $93.9 million or 3% compared to the same period in fiscal 2024[163] - Total revenue for the three months ended April 30, 2025, was $1,604.3 million, representing a 10% increase from $1,454.7 million in the same period of 2024[195] - Design Automation segment revenue increased by 6% to $1,122.3 million for the three months ended April 30, 2025, compared to $1,054.9 million in the prior year[195] - Design IP segment revenue grew by 21% to $482.0 million for the three months ended April 30, 2025, up from $399.8 million in the same period of 2024[195] - Upfront products revenue for the three months ended April 30, 2025, was $510.7 million, a 29% increase from $396.4 million in the same period of 2024[201] - Time-based products revenue for the three months ended April 30, 2025, was $828.3 million, a 6% increase from $781.7 million in the same period of 2024[200] - Maintenance revenue for the three months ended April 30, 2025, increased to $117.8 million, up 6% from $110.9 million in 2024, while total maintenance and service revenue decreased by 4% to $265.2 million[203] - Adjusted operating income for the Design Automation Segment rose to $458.8 million for the three months ended April 30, 2025, reflecting a 10% increase from $418.2 million in 2024[223] - Adjusted operating income for the Design IP Segment increased to $150.5 million for the three months ended April 30, 2025, a 21% rise from $124.8 million in 2024[224] Costs and Expenses - Total cost of revenue and operating expenses for Q2 fiscal 2025 was $1.2 billion, an increase of $105.2 million or 9% primarily due to employee-related costs[163] - Total cost of revenue for the three months ended April 30, 2025, was $318.3 million, a 6% increase from $300.4 million in 2024[205] - Research and development expenses for the three months ended April 30, 2025, rose to $554.0 million, a 12% increase from $493.1 million in 2024[210] - Sales and marketing expenses for the three months ended April 30, 2025, were $215.0 million, a 2% increase from $209.8 million in 2024[212] - General and administrative expenses for the three months ended April 30, 2025, increased to $136.5 million, a 19% rise from $114.8 million in 2024[214] - The increase in cost of revenue was primarily due to $23.2 million in employee-related costs and $9.0 million in hardware-related costs[208] Net Income and Other Income - Net income from continuing operations attributed to Synopsys for Q2 fiscal 2025 was $299.1 million, compared to $644.9 million for the same period in fiscal 2024[158] - Total other income for the three months ended April 30, 2025, was $114.1 million, a 592% increase from $16.5 million in the same period of 2024[221] - Interest income increased to $89.9 million for the three months ended April 30, 2025, up 675% from $11.6 million in the same period of 2024[221] Acquisition and Financing - The pending acquisition of Ansys is valued at approximately $35.0 billion, based on Synopsys' stock price as of December 21, 2023[165] - The Ansys Merger is expected to close in the first half of calendar year 2025, pending regulatory approvals[168] - Synopsys plans to issue $10.1 billion in Senior Notes to fund a portion of the cash consideration for the Ansys Merger[171] - The pending Ansys Merger is expected to require a cash consideration payment of $19 billion, funded through a combination of cash on hand and debt financing[230] - The company issued $10 billion aggregate principal amount of Senior Notes in March 2025, with net proceeds of approximately $9.9 billion intended for the Ansys Merger and related expenses[255] Cash Flow and Investments - Cash provided by operating activities decreased to $207.9 million for the six months ended April 30, 2025, down from $388.8 million in 2024[236] - Cash provided by investing activities improved to $54.0 million for the six months ended April 30, 2025, compared to cash used of $166.2 million in the same period of 2024[239] - As of April 30, 2025, the company held $14.3 billion in cash, cash equivalents, and short-term investments[228] Market and Economic Conditions - The company has consistently grown revenue since 2005, despite global economic uncertainties, due to strong customer relationships and execution[161] - The company is actively monitoring geopolitical pressures and changes in U.S. and global trade policy, but these have not materially impacted business results to date[175] - The company anticipates growth across its geographies in fiscal 2025, except for China, which is facing a challenging economic environment[174] - The U.S. Export Regulations have not materially impacted the company's business, although future changes are anticipated[178] - The company’s time-based model provides stability, but the long-term implications of macroeconomic and geopolitical events remain uncertain[177] Debt and Credit Facilities - The company has an unsecured $850.0 million committed multicurrency revolving credit facility and an unsecured uncommitted incremental revolving loan facility of up to $150.0 million, with a maturity date of December 14, 2027[250] - As of April 30, 2025, the company had no outstanding balance under the Revolving Credit Agreement[250] - The applicable margin for Adjusted Term SOFR Rate based loans ranges from 0.785% to 0.975%, based on the company's consolidated leverage ratio[251] - As of April 30, 2025, the company had approximately $9.9 billion of Senior Notes outstanding, which have fixed annual interest rates, thus avoiding economic interest rate exposure[259] - The financial covenant requires the company to maintain a maximum consolidated leverage ratio, and it was in compliance as of April 30, 2025[253] - Interest under the Revolving Credit Agreement will accrue at a floating rate based on the Adjusted Term SOFR Rate or the ABR, with margins based on credit ratings ranging from 0.080% to 0.175%[252] Other Financial Metrics - Contracted but unsatisfied performance obligations (backlog) as of April 30, 2025, were $8.1 billion, with approximately 42% expected to be recognized as revenue over the next 12 months[196] - Interest expense for the three months ended April 30, 2025, was $(94.3) million, a significant increase of 1,228% compared to $(7.1) million in 2024[219] - The effective tax rate decreased due to a capital loss on the sale of ownership in OpenLight in the first quarter of 2025[226] - As of April 30, 2025, $194.3 million remained available for future stock repurchases under the stock repurchase program, which has been suspended in connection with the Ansys Merger[231] - The company had a $14.1 million outstanding balance under a 12-year credit agreement in China as of April 30, 2025[254] - The company has a deferred payment agreement with an outstanding balance of $122.5 million related to the 2025 Rate Lock agreements as of April 30, 2025[256] - The company’s exposure to market risk had not changed materially since November 2, 2024[258]