Moog Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 24 April 2026: press release. Guidance figures: 1 raised, 3 kept. The quarter’s numbers.

Key takeaways

Net sales up 13% across segments: Net sales rose 13% to $1,052 million from $934 million. Six-month net sales were $2,152 million, against $1,842 million. Source
Diluted and adjusted EPS at records: Diluted EPS was $2.55 against $1.71, and adjusted diluted EPS was $2.64 against $1.88, up 40%. Both were described as at record levels. Source
Space and Defense margin up 170 basis points: Space and Defense operating margin rose to 13.8% from 12.1%, on profitable sales growth, partly offset by investment in product development, business capture and operational readiness. Source
Operating margin up 140 basis points: Operating margin was 13.1% against 11.7%, and adjusted operating margin 13.4% against 12.5%. Management attributed the increase to profitable sales growth, pricing and operational performance. Source
Tariffs offset Industrial simplification gains: Industrial adjusted operating margin fell 20 basis points to 13.2%, as tariff pressure offset simplification benefits. Source
Free cash flow $98 million: Free cash flow was $98 million, against $2 million a year earlier. Operating cash flow was $130 million, against $40 million, and capital expenditures were $32 million. Source
Twelve-month backlog up 33%: Twelve-month backlog rose 33% to a record $3.3 billion, which the company linked to continued demand across its markets. Source

“Our teams delivered another outstanding quarter. Demand is strong, business is executing well and we are delivering results ahead of guidance,”
Pat Roche, CEO

Guidance

Area	Period	Figure	Against last quarter
Net sales Source	Fiscal 2026	$ 4.3 (in billions)	Kept
Adjusted operating margin Source	Fiscal 2026	13.4 %	Kept
Adjusted diluted net earnings per share Source	Fiscal 2026	$ 10.60	Raised from $ 10.20
Free cash flow conversion Source	Fiscal 2026	60 %	Kept

What changed from last quarter

Guidance raised: Adjusted diluted EPS guidance raised from $10.20 to $10.60. Source

Results and growth drivers

Net sales up 13% across segments: Net sales rose 13% to $1,052 million from $934 million. Six-month net sales were $2,152 million, against $1,842 million. Source
Diluted and adjusted EPS at records: Diluted EPS was $2.55 against $1.71, and adjusted diluted EPS was $2.64 against $1.88, up 40%. Both were described as at record levels. Source
Net earnings rose on higher pretax income: Net earnings were $81.8 million against $54.6 million. Earnings before income taxes were $108.8 million, and the reported effective tax rate was 24.8% against 24.2%. Source
Six-month diluted EPS above prior year: Six-month diluted EPS was $5.01 against $3.49, and six-month adjusted diluted EPS was $5.26 against $3.80. Source

Segment results

Space and Defense margin up 170 basis points: Space and Defense operating margin rose to 13.8% from 12.1%, on profitable sales growth, partly offset by investment in product development, business capture and operational readiness. Source
Military Aircraft margin up 260 basis points: Military Aircraft sales rose 10% to $235 million on MV-75 activity. Operating margin rose to 13.7% from 11.1%. Source
Commercial Aircraft sales up 15%: Commercial Aircraft sales rose 15% to $247 million. Operating margin was 11.9%, up 10 basis points, with pricing benefits partly offset by tariff pressure. Source
Industrial sales up 9% on pumps: Industrial sales rose 9% to $256 million on strong data center cooling pump demand and favorable currency translation. Source

“We had an outstanding second quarter and expect an even stronger business performance in the second half of 2026,”
Jennifer Walter, CFO

Margins, pricing and costs

Operating margin up 140 basis points: Operating margin was 13.1% against 11.7%, and adjusted operating margin 13.4% against 12.5%. Management attributed the increase to profitable sales growth, pricing and operational performance. Source
Tariffs offset Industrial simplification gains: Industrial adjusted operating margin fell 20 basis points to 13.2%, as tariff pressure offset simplification benefits. Source
Simplification charges down to $3 million: Charges of $3 million, mainly for simplification initiatives, were excluded from adjusted operating margin, against $7 million a year earlier. Source
Industrial reported margin up on lower charges: Industrial reported operating margin rose 130 basis points to 12.9%, on lower simplification charges and business optimization, partly offset by tariffs. Source
Interest expense fell; SG&A rose: Interest expense was $15.5 million against $19.5 million. Selling, general and administrative expense was $136.3 million against $133.9 million. Source

Cash flow and working capital

Free cash flow $98 million: Free cash flow was $98 million, against $2 million a year earlier. Operating cash flow was $130 million, against $40 million, and capital expenditures were $32 million. Source
Customer advances offset inventory build: Working capital stayed about constant despite sales growth. Inventory growth to support higher sales was largely offset by customer advances. Source
Six-month free cash flow $18.6 million: Six-month free cash flow was $18.6 million, against a use of $163.3 million a year earlier, per the reconciliation table. Source

“We are confident in our ability to deliver for the rest of the year.”
Pat Roche, CEO

Balance sheet and capital returns

Cash balance rose to $308 million: Cash and cash equivalents were $307.6 million at March 28, 2026, against $62.0 million at September 27, 2025. Source
Senior notes issued in six months: Proceeds from senior notes, net of issuance costs, were $492.2 million in the six months. Source
Buybacks lower than prior-year six months: Purchases of outstanding shares for treasury were $50.4 million in the six months, against $126.4 million a year earlier. Dividends paid were $18.7 million. Source

Demand, strategy and leadership

Twelve-month backlog up 33%: Twelve-month backlog rose 33% to a record $3.3 billion, which the company linked to continued demand across its markets. Source
Space vehicles and missile controls led: Management reported particular demand for space vehicles and missile controls within Space and Defense. Source
Progress toward long-term objectives: Management tied the quarter to demand, operations and progress toward long-term financial objectives. Source

Figures management reported

Figure	Reported
Twelve-month backlog Source	$3.3 billion, up 33%

Risks management discussed

External: Tariff pressure partly offset margin gains. Source

Earlier plans management reported on

Ahead: Management said results were being delivered ahead of guidance. Source
Not stated: Management reaffirmed adjusted operating margin and free cash flow conversion guidance. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Release Date:	April 24, 2026
	IMMEDIATE

Moog Inc. Reports Outstanding Second Quarter 2026 Results

and Raises Full-Year Guidance

East Aurora, NY -- Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and control systems, today reported fiscal second quarter 2026 results, reflecting robust demand, strengthening operations and continued progress toward the company’s long-term financial objectives.

“Our teams delivered another outstanding quarter. Demand is strong, business is executing well and we are delivering results ahead of guidance,” said Pat Roche, CEO. “We are confident in our ability to deliver for the rest of the year."

	Q2 2026	Q2 2025	Deltas
(in millions, except per share results)	Three Months Ended
Net sales	$1,052	$934	13%
Operating margin	13.1%	11.7%	140 bps
Adjusted operating margin	13.4%	12.5%	90 bps
Diluted net earnings per share	$2.55	$1.71	49%
Adjusted diluted net earnings per share	$2.64	$1.88	40%
Net cash provided (used) by operating activities	$130	$40	$90
Free cash flow	$98	$2	$95
See the reconciliations of adjusted financial measures to the most directly comparable U.S. GAAP measures included in the financial statements herein for the periods ended March 28, 2026, and March 29, 2025.

Quarter Highlights

Net sales increased, reflecting robust growth across all four segments.
Operating margin and adjusted operating margin increased, reflecting profitable sales growth, pricing and operational performance, partially offset by tariff pressure.
Diluted net earnings per share and adjusted diluted net earnings per share, both at record levels, were driven by higher operating margin and higher sales, offset partially by tariff pressure.
Free cash flow improved significantly, driven by strong earnings and working capital management.
Twelve-month backlog increased 33% to a record $3.3 billion, reflecting continued demand across our markets.

Segment Results

Sales in the second quarter of 2026 increased 13% to $1.1 billion. Space and Defense sales increased 16% to $314 million, reflecting broad-based defense demand. Demand was particularly strong for space vehicles and missile controls. Commercial Aircraft sales increased 15% to $247 million, driven by increased volume and pricing on certain major production programs. Military Aircraft sales increased 10% to $235 million, driven by higher activity on the MV-75 program. Industrial sales increased 9% to $256 million, driven by strong demand for data center cooling pumps, as well as favorable foreign currency translation.

Operating margin in the second quarter of 2026 increased 140 basis points to 13.1%, compared to the second quarter of 2025. Military Aircraft operating margin increased 260 basis points to 13.7%, driven by profitable sales growth. Space and Defense operating margin increased 170 basis points to 13.8%, driven by profitable sales growth, partially offset by increased investments for product development, business capture and operational readiness. Industrial operating margin increased 130 basis points to 12.9%, driven by lower charges associated with simplification initiatives and the benefits from business optimization, partially offset by tariff pressure. Commercial Aircraft operating margin increased 10 basis points to 11.9%, driven by pricing benefits, partially offset by tariff pressure.

Adjusted operating margin excludes $3 million and $7 million of charges primarily associated with simplification initiatives in the second quarter of 2026 and 2025, respectively. Industrial adjusted operating margin decreased 20 basis points to 13.2% in the second quarter of 2026 compared with the second quarter of 2025, as tariff pressure offset simplification benefits.

Free Cash Flow Results

Free cash flow for the quarter was $98 million. Strong earnings contributed to cash generation, while working capital remained relatively constant despite strong sales growth. Inventory growth to support higher sales was largely offset by customer advances. Capital expenditures were $32 million, reflecting continued investment to support future growth.

Fiscal 2026 Financial Guidance

“We had an outstanding second quarter and expect an even stronger business performance in the second half of 2026," said Jennifer Walter, CFO. “We're increasing our 2026 guidance for sales and adjusted earnings per share, and reaffirming our guidance for adjusted operating margin and free cash flow conversion.”

	FY 2026 Guidance
	Current	Previous
Net sales (in billions)	$4.3	$4.3
Adjusted operating margin	13.4%	13.4%
Adjusted diluted net earnings per share	$10.60	$10.20
Free cash flow conversion	60%	60%
Adjusted diluted net earnings per share is forecasted to be within range of +/- $0.20.

Conference call information

In conjunction with today’s release, Pat Roche, CEO, and Jennifer Walter, CFO, will host a conference call today beginning at 10:00 a.m. ET, which will be simultaneously broadcast live online. Listeners can access the call and supplemental financial materials at www.moog.com/investors/communications.

Cautionary Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by words such as: “may,” “will,” “should,” “believes,” “expects,” “expected,” “intends,” “plans,” “projects,” “approximate,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume,” “assume” and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology). These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, are neither historical facts nor guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements.

Forward-looking statements notice

Although it is not possible to create a comprehensive list of all factors that may cause our actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the Securities and Exchange Commission (“SEC”) and include, but are not limited to, risks relating to: (i) our operation in highly competitive markets with competitors who may have greater resources than we possess; (ii) our operation in cyclical markets that are sensitive to domestic and foreign economic conditions and events; (iii) current and future geopolitical conditions and events, including wars, armed conflicts, sanctions, trade restrictions and related disruptions to global markets and supply chains; (iv) our heavy dependence on government contracts that may not be fully funded, delayed or terminated; (v) our ability to remediate the material weakness in internal control over financial reporting and maintain effective disclosure controls and procedures; (vi) supply chain constraints and inflationary impacts on prices for raw materials and components used in our products; (vii) failure of our subcontractors or suppliers to perform their contractual obligations; (viii) risks related to information systems interruptions, intrusions, cybersecurity threats or new software implementations; and (ix) our accounting estimates for over-time contracts and any changes we may need to make thereto. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties.

While we believe we have identified and discussed in our SEC filings the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial that may affect the forward-looking statements we make herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this press release, except as required by applicable law.

Non-GAAP Financial Measures

The press release also includes certain financial information that is not presented in accordance with Generally Accepted Accounting Principles (“GAAP”), including, but not limited to, “Adjusted Operating Margin,” “Adjusted Diluted Net Earnings Per Share,” “Adjusted Net Earnings,” “Adjusted Effective Tax Rate,” “Free Cash Flow” and “Free Cash Flow Conversion.” While we believe that these non-GAAP financial measures may be useful in evaluating our financial condition and results of operations, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP. Adjustments to operating profit and margin and net earnings per share have included restructuring charges; acquisition- and integration-related costs; gains or losses on investments; asset impairments; litigation and regulatory matters; discrete tax items; changes in the fair value of contingent consideration; foreign exchange gains or losses; and other non-recurring or non-cash items. Reconciliations of the non-GAAP measures to the most directly comparable GAAP measures can be found in the accompanying materials.

The press release also includes certain forward-looking non-GAAP financial guidance, including, but not limited to, “Adjusted Diluted Net Earnings per Share,” “Adjusted Operating Margin” and “Free Cash Flow Conversion". The Company is unable to provide a reconciliation of such forward-looking non-GAAP guidance to the most directly comparable GAAP measures without unreasonable effort because certain items that are material to the comparable GAAP measures are not available and cannot be estimated with reasonable certainty. These items are dependent on future events that are difficult to predict and outside the Company’s control. These items may include, but are not limited to, restructuring charges; acquisition- and integration-related costs; gains or losses on investments; asset impairments; litigation and regulatory matters; discrete tax items; changes in the fair value of contingent consideration; foreign exchange gains or losses; and other non-recurring or non-cash items. The timing and amount of these items may vary significantly from period to period and could have a material impact on the Company’s GAAP results, including, but not limited to, “Diluted Net Earnings per Share” and “Operating Margin”.

Contact: Aaron Astrachan

716.687.4225

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

(dollars in thousands, except per share data)

	Three Months Ended		Six Months Ended
	March 28, 2026	March 29, 2025	March 28, 2026	March 29, 2025
Net sales	$1,051,947	$934,022	$2,152,293	$1,841,904
Cost of sales	764,392	675,255	1,570,498	1,338,059
Inventory write-down	-	2,149	-	2,149
Gross profit	287,555	256,618	581,795	501,696
Research and development	26,662	24,481	51,296	48,086
Selling, general and administrative	136,324	133,932	285,283	262,069
Interest	15,540	19,548	32,735	35,796
Restructuring	1,505	2,425	2,956	6,209
Other	(1,295)	4,174	(508)	3,043
Earnings before income taxes	108,819	72,058	210,033	146,493
Income taxes	26,980	17,448	49,343	34,357
Net earnings	$81,839	$54,610	$160,690	$112,136
Net earnings per share
Basic	$2.58	$1.73	$5.07	$3.53
Diluted	$2.55	$1.71	$5.01	$3.49
Weighted average common shares outstanding
Basic	31,715,560	31,558,372	31,696,403	31,764,917
Diluted	32,102,535	31,942,315	32,072,594	32,174,804

RECONCILIATION TO ADJUSTED NET EARNINGS, ADJUSTED DILUTED NET EARNINGS PER SHARE AND ADJUSTED EFFECTIVE TAX RATE (UNAUDITED)

(dollars in thousands)

	Three Months Ended		Six Months Ended
	March 28, 2026	March 29, 2025	March 28, 2026	March 29, 2025
Net Earnings as Reported	$81,839	$54,610	$160,690	$112,136
Adjustments to Net Earnings:
Program terminations	-	-	1,324	-
Simplification initiatives	3,303	5,343	5,292	11,399
Acquisition and integration	-	-	3,606	-
Other charges	400	2,000	533	2,000
Tax effect of adjustments	(932)	(1,801)	(2,642)	(3,313)
Net Earnings as Adjusted	$84,610	$60,152	$168,803	$122,222
Diluted Net Earnings Per Share
As Reported	$2.55	$1.71	$5.01	$3.49
As Adjusted	$2.64	$1.88	$5.26	$3.80
Effective Income Tax Rate
As Reported	24.8%	24.2%	23.5%	23.5%
As Adjusted	24.8%	24.2%	23.5%	23.6%
The diluted net earnings per share associated with the adjustments in the table above may not reconcile when totaled due to rounding. (1) Adjustments include costs related to the termination of significant development, production, or support programs, such as write-off and impairments of inventory and long-lived assets, contract termination costs and other related charges or credits. (2) Adjustments include costs related to footprint rationalization, portfolio shaping and legal entity re-organization activities, such as facility closure costs, employee severance and retention costs, write-off and impairments of inventory and long-lived assets and other related charges or credits. (3) Adjustments include acquisition related activity, such as amortization of inventory fair value step-up and professional services fees. Charges also include costs related to integrating the businesses, such as employee severance and retention costs, professional services fees, legal entity and facility rationalization costs and other related charges or credits. (4) Adjustments include costs associated with business interruptions from natural causes, litigation matters and other charges or credits that are not part of normal operations.

CONSOLIDATED SALES AND OPERATING PROFIT (UNAUDITED)

(dollars in thousands)

	Three Months Ended		Six Months Ended
	March 28, 2026	March 29, 2025	March 28, 2026	March 29, 2025
Net sales:
Space and Defense	$313,593	$270,184	$637,871	$517,968
Military Aircraft	235,489	213,849	482,900	427,269
Commercial Aircraft	247,007	215,563	514,850	434,053
Industrial	255,858	234,426	516,672	462,614
Net sales	$1,051,947	$934,022	$2,152,293	$1,841,904
Operating profit:
Space and Defense	$43,265	$32,778	$86,035	$61,558
	13.8%	12.1%	13.5%	11.9%
Military Aircraft	32,310	23,716	60,438	47,325
	13.7%	11.1%	12.5%	11.1%
Commercial Aircraft	29,316	25,347	57,730	51,114
	11.9%	11.8%	11.2%	11.8%
Industrial	33,046	27,210	69,180	52,658
	12.9%	11.6%	13.4%	11.4%
Total operating profit	137,937	109,051	273,383	212,655
	13.1%	11.7%	12.7%	11.5%
Deductions from operating profit:
Interest expense	15,540	19,548	32,735	35,796
Equity-based compensation expense	4,770	3,695	9,725	8,020
Non-service pension expense	1,147	1,939	2,277	3,885
Corporate and other expenses, net	7,661	11,811	18,613	18,461
Earnings before income taxes	$108,819	$72,058	$210,033	$146,493

RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED)

(dollars in thousands)

	Three Months Ended		Six Months Ended
	March 28, 2026	March 29, 2025	March 28, 2026	March 29, 2025
Space and Defense operating profit - as reported	$43,265	$32,778	$86,035	$61,558
Simplification initiatives	2,636	1,138	3,959	2,068
Acquisition and integration	-	-	3,606	-
Other charges	-	-	133	-
Space and Defense operating profit - as adjusted	$45,901	$33,916	$93,733	$63,626
	14.6%	12.6%	14.7%	12.3%
Military Aircraft operating profit - as reported	$32,310	$23,716	$60,438	$47,325
Program terminations	-	-	1,324	-
Simplification initiatives	-	-	-	591
Other charges	-	2,000	-	2,000
Military Aircraft operating profit - as adjusted	$32,310	$25,716	$61,762	$49,916
	13.7%	12.0%	12.8%	11.7%
Commercial Aircraft operating profit - as reported and adjusted	$29,316	$25,347	$57,730	$51,114
	11.9%	11.8%	11.2%	11.8%
Industrial operating profit - as reported	$33,046	$27,210	$69,180	$52,658
Simplification initiatives	667	4,205	1,333	8,740
Industrial operating profit - as adjusted	$33,713	$31,415	$70,513	$61,398
	13.2%	13.4%	13.6%	13.3%
Total operating profit - as adjusted	$141,240	$116,394	$283,738	$226,054
	13.4%	12.5%	13.2%	12.3%

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

	March 28, 2026	September 27, 2025
ASSETS
Current assets
Cash and cash equivalents	$307,553	$62,013
Restricted cash	679	200
Receivables, net	605,518	506,768
Unbilled receivables	842,157	744,352
Inventories, net	931,804	914,302
Prepaid expenses and other current assets	105,830	142,345
Total current assets	2,793,541	2,369,980
Property, plant and equipment, net	1,060,100	1,019,906
Operating lease right-of-use assets	54,149	52,799
Goodwill	873,510	842,313
Intangible assets, net	60,544	66,101
Deferred income taxes	6,903	22,459
Other assets	53,851	52,497
Total assets	$4,902,598	$4,426,055
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current installments of long-term debt	$500,000	$1,563
Accounts payable	328,084	318,402
Accrued compensation	81,968	106,040
Contract advances and progress billings	469,206	372,988
Accrued liabilities and other	286,743	320,075
Total current liabilities	1,666,001	1,119,068
Long-term debt, excluding current installments	739,825	944,123
Long-term pension and retirement obligations	152,791	157,218
Deferred income taxes	45,489	32,600
Other long-term liabilities	196,012	180,491
Total liabilities	2,800,118	2,433,500
Shareholders’ equity
Common stock - Class A	43,874	43,864
Common stock - Class B	7,406	7,416
Additional paid-in capital	1,021,544	839,328
Retained earnings	2,976,532	2,834,548
Treasury shares	(1,252,323)	(1,209,200)
Stock Employee Compensation Trust	(279,828)	(195,491)
Supplemental Retirement Plan Trust	(253,378)	(170,191)
Accumulated other comprehensive loss	(161,347)	(157,719)
Total shareholders’ equity	2,102,480	1,992,555
Total liabilities and shareholders’ equity	$4,902,598	$4,426,055

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

	Six Months Ended
	March 28, 2026	March 29, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$160,690	$112,136
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation	50,184	44,779
Amortization	5,449	4,629
Deferred income taxes	27,607	(12,824)
Equity-based compensation expense	9,725	8,020
Other	(217)	2,291
Changes in assets and liabilities providing (using) cash:
Receivables	(101,159)	(123,555)
Unbilled receivables	(85,779)	(31,216)
Inventories	(14,511)	(54,040)
Accounts payable	7,481	1,975
Contract advances and progress billings	88,508	8,501
Accrued expenses	(26,813)	(29,523)
Accrued income taxes	(23,972)	(22,429)
Net pension and post retirement liabilities	2,005	12,067
Other assets and liabilities	(14,372)	(13,705)
Net cash provided (used) by operating activities	84,826	(92,894)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(66,178)	(70,382)
Net proceeds from businesses sold	-	13,487
Net proceeds from buildings sold	3,065	-
Other investing transactions	(458)	(2,062)
Net cash provided (used) by investing activities	(63,571)	(58,957)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving lines of credit	869,400	752,500
Payments on revolving lines of credit	(1,064,400)	(462,000)
Proceeds from senior notes, net of issuance costs	492,221	-
Payments on finance lease obligations	(8,013)	(4,469)
Payment of dividends	(18,706)	(18,106)
Proceeds from sale of treasury stock	8,476	7,825
Purchase of outstanding shares for treasury	(50,431)	(126,425)
Proceeds from sale of stock held by SECT	33,782	19,289
Purchase of stock held by SECT	(34,470)	(14,808)
Other financing transactions	(3,116)	(1,457)
Net cash provided (used) by financing activities	224,743	152,349
Effect of exchange rate changes on cash	21	(2,309)
Increase (decrease) in cash, cash equivalents and restricted cash	246,019	(1,811)
Cash, cash equivalents and restricted cash at beginning of year	62,213	64,537
Cash, cash equivalents and restricted cash at end of period	$308,232	$62,726

RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED)

(dollars in thousands)

	Three Months Ended		Six Months Ended
	March 28, 2026	March 29, 2025	March 28, 2026	March 29, 2025
Net cash provided (used) by operating activities	$129,594	$40,016	$84,826	$(92,894)
Purchase of property, plant and equipment	(31,798)	(37,604)	(66,178)	(70,382)
Free cash flow	$97,796	$2,412	$18,648	$(163,276)
Adjusted net earnings	$84,610	$60,152	$168,803	$122,222
Free cash flow conversion	116%	4%	11%	(134)%

Free cash flow is defined as net cash provided (used) by operating activities, less purchase of property, plant and equipment, less the benefit from the Receivables Purchase Agreement. Free cash flow conversion is defined as free cash flow divided by adjusted net earnings. Free cash flow and free cash flow conversion are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies. However, management believes these adjusted financial measures may be useful in evaluating the liquidity, financial condition and results of operations of the Company. This information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.