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Management Discussion

• Consolidated net sales for the third quarter of fiscal 2021 were $143 million, an increase of $41 million (41%) from the prior-year comparable period. Core sales increased $38 million (36%) and divested product lines and the strategic exits of certain service offerings net of sales from acquisitions decreased net sales $1 million (1%), while the impact from foreign currency rates benefited net sales by 6%. The increase in core sales was due to the substantial increase in sales volume as we saw economies recover and business activities normalize from the COVID-19 pandemic across many parts of the world, but there are still some regions that remain challenged by pandemic related lockdowns and economic impacts. Core products sales were up 40% and core service sales were up 23% as compared to the same period in the prior year. Gross profit margins increased 6% as a result of the higher absorption of fixed costs from higher sales volumes. Operating profit was $25 million higher in the third quarter of fiscal 2021 as compared to the third quarter of fiscal 2020 as a result of the increase in gross profit. Although Selling, general, and administrative (SG&A) expenses were relatively consistent period to period, the savings from short-term COVID-19 actions generated in the third quarter of fiscal 2020 were approximately equal to the gain on the sale of our manufacturing facility in China, net of transaction costs and value-added taxes associated with the transaction in the third quarter of fiscal 2021.