The quarter was materially weaker on profitability than the prior expectation. Revenue reached $324.0 million, up only 1.7% year over year, while organic sales declined 0.5%; the key shortfall was execution and margin recovery, not demand alone (Financial Highlights; Net sales discussion). Adjusted EPS fell to $0.83 from $1.49, and adjusted EBITDA dropped to $35.3 million from $51.0 million as gross-margin pressure and operating-cost deleverage overwhelmed modest sales growth (Adjusted net income and EPS reconciliation; EBITDA reconciliation).
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Net sales | $324.0M | $318.6M | +1.7% |
| Organic sales | — | — | -0.5% |
| Adjusted diluted EPS | $0.83 | $1.49 | -44.3% |
| Adjusted EBITDA | $35.3M | $51.0M | -30.8% |
| Adjusted EBITDA margin | 10.9% | 16.0% | -510 bps |
| Operating cash flow, six months | $(26.2)M | $22.1M | $(48.3)M |
| Adjusted net debt | $282.0M | $167.2M at Dec. 31, 2025 | +$114.8M |
The guidance mix is negative despite the sales increase. Management raised full-year net-sales guidance to $1.270–$1.310 billion, but lowered adjusted EBITDA guidance to $155–$170 million and now expects a slower margin recovery (2026 Guidance Ranges). That means the company is effectively trading expected top-line momentum for lower profitability; the raised sales outlook does not offset the deterioration in the earnings engine.
The main problem is operational and appears less temporary than the headline suggests. Residual North American ERP inefficiencies, production and fulfillment constraints, EMEA pricing concessions, weaker volumes, unfavorable mix, and higher freight and tariff-related costs reduced gross margin to 39.5%, down 260 basis points (Gross profit discussion). Even excluding identified special items, adjusted S&A rose to 29.1% of sales from 27.3%, showing that the pressure is not limited to one-off ERP charges (Adjusted S&A and operating margin reconciliation).
Demand indicators provide a genuine offset, but not enough to change the net read. Orders increased 6.6%, backlog reached $127 million, and robotics revenue grew approximately 37%, supporting the higher sales outlook (First-half results discussion). However, the filing says those demand signals are not yet converting into expected earnings because execution, pricing, and cost issues remain unresolved. The result is a significant negative versus the standing expectation of a meaningful margin recovery, with sales strength currently masking weaker cash generation and higher leverage.
Read the original 8-K on SEC EDGAR ↗