FOURTH QUARTER & FULL YEAR 2025 EARNINGS PRESENTATION MARCH 3, 2026 SEAN BAGAN: PRESIDENT & CHIEF EXECUTIVE OFFICER JEREMY EVANS: EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER TANIA ALMOND: VP, INVESTOR RELATIONS & CORPORATE COMMUNICATION SAFE HARBOR This presentation and oral statements made by management in connection herewith contains "forward‐looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward‐looking statements involve risks and uncertainties, and a ...

Financial Data and Key Metrics Changes - Sales for the first quarter of 2025 were $195 million, exceeding the top end of guidance by $5 million, but still below prior year levels due to ongoing end market weakness [9][18] - Adjusted EBITDA margin was 17.3%, with cash from operations increasing by 7% year over year to $19 million despite sales contraction [10][24] - Diluted EPS was $0.22, down 21% from the previous year, primarily due to an 8% decline in sales [20] Business Line Data and Key Metrics Changes - Hydraulic sales declined by 11% year over year, reflecting weakness in agriculture, mobile, and industrial end markets [21] - Electronics sales remained relatively unchanged, with growth in health and wellness and recreational markets offsetting declines in industrial and mobile sectors [23] - Gross margin for hydraulics contracted by 170 basis points, while electronics gross margin held steady [19][22] Market Data and Key Metrics Changes - Asia Pacific sales in the electronics segment increased by 24% year over year, driven by growth in the health and wellness end market [18] - Overall, sales declined in all regions compared to the previous year, highlighting persistent weakness in most end markets [18] Company Strategy and Development Direction - The company is refocusing on customer-centric initiatives to drive business success and improve shareholder returns [7][8] - A strategy to mitigate tariff impacts includes localizing production and leveraging existing manufacturing capabilities in China and the APAC region [30][31] - The company aims to capitalize on market share opportunities created by competitors relying on Chinese manufacturing [60][62] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the downstream effects of prolonged tariff escalations, including rising costs and pricing pressures [9] - Despite challenges, there are positive trends in order intake, with a focus on improving customer relationships and product offerings [12][13] - The company expects second quarter sales to range from $198 million to $206 million, indicating a sequential increase from the first quarter [35] Other Important Information - The company has reduced debt by 15% over the last twelve months and has a strong liquidity position with nearly $400 million available [11][27] - Capital expenditures for 2025 will focus on maintenance and productivity enhancements with evident returns on investment [26] Q&A Session Summary Question: Insights from the listening tour and specific actions taken - Management highlighted the importance of customer engagement and accountability, emphasizing a shift from a passive to a more aggressive sales approach [44][45] Question: Impact of tariffs on manufacturing and costs - The company is transferring manufacturing to mitigate tariff impacts, with minimal investment required due to existing operations in the region [49][50] Question: Competitive positioning around tariffs - Management sees market share gain opportunities due to competitors' reliance on Chinese imports, particularly in hydraulics and electronics [59][60] Question: Demand changes and guidance for Q2 - Management noted positive order intake trends and expects to see some revenue from tariff-related opportunities in Q2, but significant impacts are anticipated in the back half of the year [65][66] Question: Portfolio assessment and potential divestitures - The company is open to evaluating its portfolio for strategic fit and financial performance, focusing on debt reduction before considering acquisitions [85]

Financial Data and Key Metrics Changes - Sales for Q1 2025 were $195 million, exceeding the top end of guidance but below prior year levels due to continued end market weakness [10][19] - Adjusted EBITDA margin was 17.3%, with cash from operations increasing by 7% year over year to $19 million despite sales contraction [11][25] - Diluted EPS was $0.22, down 21% from the previous year, primarily due to an 8% decline in sales [21] Business Line Data and Key Metrics Changes - Hydraulic sales declined by 11% year over year, reflecting weakness in agriculture, mobile, and industrial end markets [22] - Electronics sales remained relatively unchanged, with growth in health and wellness and recreational markets offsetting declines in industrial and mobile sectors [24] Market Data and Key Metrics Changes - Asia Pacific sales in the electronics segment increased by 24% year over year, driven by a return to growth in the health and wellness end market [19] - Overall sales declined in all regions compared to the previous year, with foreign exchange negatively impacting sales by $2.3 million [19] Company Strategy and Development Direction - The company is refocusing on customer-centric initiatives to drive business success and improve shareholder returns [7][8] - A strategy to mitigate tariff impacts includes leveraging regional manufacturing capabilities and enhancing local production to reduce costs [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about prolonged tariff escalations affecting costs and end market demand but remains committed to long-term strategic decisions [9][30] - The company anticipates a sequential sales increase in Q2 2025, projecting sales between $198 million and $206 million [36] Other Important Information - The company has reduced debt by 15% over the last year and has maintained a strong liquidity position with nearly $400 million available [12][27] - The company is prioritizing capital expenditures for impactful projects with quick payback periods [12][26] Q&A Session Summary Question: Insights from the listening tour and specific actions taken - Management highlighted the importance of customer engagement and aggressive market strategies, moving from a passive to a more proactive approach [44][46] Question: Impact of tariffs on manufacturing and costs - Management indicated that transferring manufacturing to local regions is already in progress, with minimal investment required due to existing capabilities [49][51] Question: Competitive positioning around tariffs - Management sees significant market share gain opportunities due to competitors relying on Chinese manufacturing, which is now less cost-competitive [60][62] Question: Guidance for Q2 and demand changes - Management noted that order intake has exceeded sales for five consecutive months, indicating positive demand trends despite uncertainties [100][104]