Filed 2026-03-13 · Period ending 2025-12-31 · 31,830 words · SEC EDGAR
# NATIONAL PRESTO INDUSTRIES INC (NPK) — 10-K
**Filed:** 2026-03-13
**Period ending:** 2025-12-31
**Accession:** 0001437749-26-008214
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/80172/000143774926008214/)
**Origin leaf:** d08f5a9f5b7b6553e2285b0fa7a184ee6fa68a0db3a890093c3216a046ddc86e
**Words:** 31,830
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION**
**Washington, D. C. 20549******
********
**FORM 10-K**
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year endedDecember 31, 2025
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________________ to __________________________
Commission File Number 1-2451
**NATIONAL PRESTO INDUSTRIES, INC.**
(Exact name of registrant as specified in its charter)
| Wisconsin | 39-0494170 | |
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification Number) | |
| | | |
| 3925 North Hastings Way | | |
| Eau Claire, Wisconsin | 54703-3703 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code:(715) 839-2121
Securities registered pursuant to Section 12(b) of the Act:
| | | Trading | | Name of each exchange | |
| Title of each class | | Symbol(s) | | on which registered | |
| $1.00 par value common stock | | NPK | | New York Stock Exchange | |
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.See definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 USC 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter:$504,328,539.The number of shares outstanding of each of the registrant's classes of common stock, as of March 9,2026was 7,164,352.
The Registrant has incorporated in Part II and Part III of Form 10-K, by reference, portions of its2025Annual Report and portions of its Proxy Statement for its 2026 Annual Meeting of Stockholders.
[Table of Contents](#toc)
**TABLE OF CONTENTS**
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PART I |
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Item 1 Business |
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Item 1A Risk Factors |
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Item 1B Unresolved Staff Comments |
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Item 1CCybersecurity |
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Item 2 Properties |
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Item 3 Legal Proceedings |
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Item 4 Mine Safety Disclosures |
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PART II |
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Item 5 Market for Registrants Common Equity, Related Stockholder Matters and Issuer purchases of Equity Securities |
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Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations |
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Item 7A Quantitative and Qualitative Disclosures About Market Risk |
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Item 8 Financial Statements and Supplementary Data |
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Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 9A Controls and Procedures |
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Item 9B Other Information |
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PART III |
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Item 10 Directors, Executive Officers and Corporate Governance |
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Item 11 Executive Compensation |
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Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Item 13 Certain Relationships and Related Transactions, and Director Independence |
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Item 14 Principal Accountant Fees and Services |
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PART IV |
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Item 15 Exhibits and Financial Statement Schedules |
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Item 16 Form 10-K Summary |
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Signatures |
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**PART I**
**ITEM 1.BUSINESS**
**A. DESCRIPTION OF BUSINESS**
The business of National Presto Industries, Inc. (the Company" or National Presto) consists of three business segments.For a further discussion of the Companys business, the segments in which it operates, and financial information about the segments, please refer to Note L to the Consolidated Financial Statements.The Housewares/Small Appliance segment designs, markets and distributes housewares and small electrical appliances, including pressure cookers and canners, kitchen electrics, and comfort appliances that enrich the lives of consumers by making life easier, more productive and more enjoyable.The Defense segmentprotects the lives of the citizens of our nation, as well as the citizens of our nations allies, by providing our warfighters with reliable products. Itmanufactures 40mm ammunition, precision mechanical and electro-mechanical assemblies, medium caliber cartridge cases and metal parts; performs Load, Assemble and Pack (LAP) operations on ordnance-related products primarily for the United StatesGovernment and prime contractors; and manufactures detonators, booster pellets, release cartridges, lead azide, other military energetic devices and materials,and assemblies.The Safety segmentprovides innovative safety technology empowering organizations and individuals to protect what is mostimportant. The segment's startup company,Rely Innovations, Inc.,offers smoke, carbon monoxide (CO), and combo smoke/COalarmswith an array of voice messages in English and Spanishthat clearly inform of incipient danger. The CO alarms have large digital displays as well. The segment also markets an economy line of carbon monoxide and smoke alarms and a PFAS-Free Foam commercial fire extinguisher.
**1. Housewares/Small Appliance Segment**
Housewares and electrical appliances sold by the segmentinclude pressure cookers and canners; the Presto Control Master heat control line of skillets in several sizes, griddles, woks and multi-purpose cookers; slow cookers; deep fryers of various sizes;waffle makers; pizza ovens; slicer/shredders; electric heaters; corn poppers (hot air, oil, and microwave); dehydrators; vacuum sealers;microwave bacon cookers; coffeemakers and coffeemaker accessories; electric knife sharpeners; and timers. Pressure cookers and canners are available in a range ofsizes, in stovetop and digital forms,and are made from aluminum and/orstainless steel.
For the year ended December 31, 2025, approximately 9% of consolidated net sales were provided by cast products (griddles, waffle makers, die cast deep fryers, skillets and multi-cookers), and approximately 9% by noncast/thermal appliances (stamped cookers and canners, pizza ovens, corn poppers, coffee makers, microwave bacon cookers, dehydrators, slow cookers, electric stainless steel appliances, non-cast fryers, air fryers and heaters).For the year ended December 31, 2024, approximately 10% of consolidated net sales were provided by cast products, and approximately 15% by noncast/thermal appliances. For the year ended December 31, 2023, approximately 9% of consolidated net sales were provided by cast products, and approximately 18% by noncast/thermal appliances. For the yearended December 31, 2025, this segment had nocustomers thataccounted for 10%of the Companys consolidated net sales. For theyears ended December 31, 2024and 2023, Amazon.com, Inc.accounted for 10% and 11%, respectively,of the Companys consolidated net sales. The loss ofAmazon.com, Inc.as a customer would have a material adverse effect on the Company.
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Products are sold primarily in the United States and Canada directly to retailers and also through independent distributors.Although the segmenthas long established relationships with many of its customers, it does not have long-term supply contracts with them.The loss of, or material reduction in, sales to any of the segment's major customers could adversely affect the segment's business.The majorityof thehousewares and electrical appliances are sourced from vendors in the Orient.(See Note J to the Consolidated Financial Statements.)
The segmenthas a sales force of six employees that sell to and service most customers.A few selected accounts are handled by manufacturers' representatives who may also sell other product lines. Sales promotional activities have been conducted primarily through the use ofin store promotionsand digital advertising.The business is seasonal, with the normal peak sales period occurring in the fourth quarter of the year prior to the holiday season.This segment operates in a highly competitive and extremely price sensitive environment.Increased costs that cannot be fully absorbed into the price of products or passed along in the form of price increases to the retail customer can have a significant adverse impact on operating results.Several companies compete for sales of housewares and small electrical appliances, some of which are larger than the Companys segment and others which are smaller.In addition, some customers maintain their own private label, as well as purchase brokered product directly from the Orient.Product competition extends to special product features, product pricing, product quality, marketing programs, warranty provisions, service policies and other factors.New product introductions are an important part of the segment's sales to offset the morbidity rate of other products and/or the effect of lowered acceptance of seasonal products due to weather conditions.New products entail unusual risks.Engineering and tooling costs are increasingly expensive, as are finished goods that may not have a ready market or achieve widespread consumer acceptance.High-cost advertising commitments which may accompany such new products or may be required to maintain sales of existing products may not be fully absorbed by ultimate product sales.Initial production schedules, set in advance of introduction, carry the possibility of excess unsold inventories.New product introductions are further subject to delivery delays from supply sources, which can impact availability duringthe segment's most active selling periods.
Research and development costs related to new product development for the years2025, 2024, and 2023were expensed in operations of these years and were not a material element in the aggregate costs incurred by the Company.
Products are generally warranted to the original owner to be free from defects in material and workmanship for a period of one to twelve years from date of purchase, depending on the product.The segmentallows a sixty-day over-the-counter initial return privilege through cooperating dealers.Products are serviced through a corporate service repair operation.The segment's service and warranty programs are competitive with those offered by other manufacturers in the industry.
The segmentprimarily warehouses and distributes its products from distribution centers located in Cantonand Nettleton, Mississippi. Selective use is made of leased tractors and trailers.
The Company invests funds not currently required for business activities (see Note A(6) to the Consolidated Financial Statements). Income from invested funds is included in Other Income in the accompanying Consolidated Statements of Comprehensive Income.
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Earnings from investments may vary significantly from year to year depending on interest yields on instruments meeting the Company's investment criteria, and the extent to which funds may be needed for internal growth, acquisitions, newly identified business activities, and reacquisition of Company stock.
**2.****Defense Segment**
Each of the segments operating companies are subsidiariesof National Defense Corporation.
AMTEC Corporation ("AMTEC") was acquired on February 24, 2001, and manufactures 40mm ammunition, and precision mechanical and electro-mechanical products for the United StatesDepartment of Defense (DOD) and DOD prime contractors. AMTECs 131,000 square foot manufacturing facility located in Janesville, Wisconsin, is focused on producing niche market ordnance products (such as training ammunition, fuzes, firing devices, and initiators). AMTEC is also the prime contractor for the 40mm ammunition system to the DOD (more fully described below).
Spectra Technologies LLC ("Spectra"), a subsidiary of AMTEC, was acquired on July 31, 2003, and is engaged in the manufacture and delivery of munitions and ordnance-related products for the DOD and DOD prime contractors. Spectra maintains 384,000 square feet of space located in East Camden, Arkansas, dedicated primarily to LAPtype work.
Amron, a division of AMTEC ("Amron"), holds the assets that were purchased from Amron LLC on January 30, 2006. Amron manufactures cartridge cases used in medium caliber ammunition (20mm, 25mm, 30mm,40mm, and 50mm) primarily for the DOD and DOD prime contractors, which includes the 40mm systems program previously mentioned and referenced below. The Amron manufacturing facility is 212,000 square feet and is located in Antigo, Wisconsin.
Tech Ord, a division of AMTEC ("Tech Ord"), holds the assets formerly owned byChemring Energetic Devices, Inc.s business located in Clear Lake, South Dakota and all of the real property previously owned by Technical Ordnance Realty, LLC. These assets wereacquired on January 24, 2014. Tech Ordmanufactures in its 124,000 square foot Clear Lake facility detonators, booster pellets, release cartridges, lead azide, and other military energetic devices and materials. Its major customers include United Statesand foreign government agencies, AMTEC, and other defense contractors.
The equity interests of Woodlawn Manufacturing, Ltd. ("Woodlawn"), a subsidiary of National Defense Corporation and its newly formed subsidiary, Woodlawn Manufacturing LLC, wereacquired on October 26, 2022. Woodlawnis engaged in the manufacture of metal parts and assemblies primarily for the DOD and DOD prime contractors. The Woodlawn manufacturing facility is 77,000 square feet and is located in Marshall, Texas.
The Defense segment competes for its business primarily on the basis of technical competence, product quality, manufacturing experience, and price.This segment operates in a highly competitive environment with many other organizations, some of which are larger and others that are smaller.
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On April 25, 2005, AMTECwas awarded the high volume, five-year prime contract for management and production of the United States Armys (the "Army") 40mm Ammunition System.The Army selected AMTEC as one of two prime contractors responsible for supplying all requirements for 40mm practice and tactical ammunition for a period of five years, with AMTEC receiving the majority share of the business.Deliveries under the contract exceeded $671,000,000, with final deliveries completed in 2013.On February 18, 2010, the Army awarded AMTEC a second five-year contract for the management and production of the 40mm Ammunition System.As in the original five-year contract, AMTEC was awarded the majority share of the 40mm requirement. Deliveries under this contract exceeded $566,000,000, with the final deliveries completed in 2018.In addition, as part of an acquisition of a group of assets from DSE, Inc., a 40mm competitor, which was completed on November 7, 2013, AMTEC acquired through a novation agreement an additional $188,000,000, representing the remaining undelivered portion of the award that had been given to AMTECs competitor under the second five-year contract mentioned above. Total deliveries for the systems program under the novated DSE, Inc.40mm contract were completed in 2018. AMTECsubmitted its bid for a third contract, and although the FY15 (Armys fiscal year beginning October 1, 2014) bid request was subsequently cancelled, the 40mm program requirements remained and were subsequently awarded to AMTEC as the Armys FY16 40mm requirements in a single award valued at $84,750,000. Final deliveries for the FY16 contract were completed in 2019. On August 30, 2017, the Army awarded AMTEC, as the sole prime contractor, a third five-year 40mm system contract covering FY17-21 requirements. The value of awards for the FY17 through FY21 requirements is approximately $539,600,000, with deliveries scheduled to complete in 2026. On September 23, 2022, the Army awarded AMTEC, as the sole prime contractor, a fourth five-year 40mm system contract covering FY22-26 requirements. The value of awards to date is approximately $965,000,000 for FY22 through FY25, with deliveries commencing in 2024 and scheduled to complete in 2030. Oneaward year(FY26) remains, with the maximum ceiling value of the contract at $1,413,000,000. Actual annual and cumulative dollar volume with the Army over the course of the contract will be dependent upon military requirements and funding, as well as government procurement regulations and other factors controlled by the Army and the DOD.
On May 13, 2024, the Army awarded AMTEC a five-year Indefinite Delivery Indefinite Quantity (IDIQ) contract for production of the 40mm M918E2 High Velocity Target Practice - Day/Night/Thermal (TP-DNT) cartridge. The M918E2 TP-DNT Cartridge allows the warfighters to train as they fight by delivering a projectile whose impact signature can be seen day or night, by unaided eye, and through current thermal and night vision sights. The value of awards to date is approximately $256,000,000, with deliveries commencingin 2025 and scheduled to complete in 2027. The maximum ceiling value of the IDIQ contract is $818,900,000. Actual annual and cumulative dollar volume with the Army over the course of the contract will be dependent upon military requirements and funding, as well as government procurement regulations and other factors controlled by the Army and the DOD.
During 2025, almost all of the work performed by this segment directly or indirectly for the DOD was performed on a fixed-price basis.Under fixed-price contracts, the price paid to the contractor is usually awarded based on competition or negotiation at the outset of the contract and therefore is generally not subject to adjustments reflecting the actual costs incurred by the contractor, with the exception of some limited escalation clauses, which on the 2017 and 2022 contracts applyto only three materials steel, aluminum and zinc.The Defense segments contracts and subcontracts contain the customary provision permitting termination at any time for the convenience of the government, with payment for any work completed, associated profit and inventory/work in progress at the time of termination. The segments business does not tend to be seasonal.
**3. Safety Segment**
The Safety segment was formed in the third quarter of 2019 with the purchase of substantially all of the assets of OneEvent Technologies, Inc. ("OneEvent") on July 23, 2019, and was combined with Rusoh, Inc., which had previously been included in the Housewares/Small Appliance segment.The Safety segment is currently comprised of Rely Innovations, Inc. ("Rely"). To focus the direction of the segment's business, the Company divested the stock of Rusoh, Inc. on November 14, 2023 and certain assets of OneEvent related to its refrigeration monitoring business on July 31, 2025. The OneEvent intellectual property, however, has been retained. See Note Lof the Consolidated Financial Statements.
OneEventleases 4,300 square feet in Mount Horeb, Wisconsin. Established in 2014,OneEvents cloud-based learning and analytics engine utilizes a series of sensing devices integrated with a cellular gateway to predict and alert in a timely fashion so that the customer has an opportunity to prevent a loss. As noted above, the certain assets of thebusiness weredivested in 2025.
The Company purchased certain assets and assumed certain liabilities of Knox Safety, Inc. on July 29, 2022, forming Rely. Rely leases 4,300 square feet in Chapel Hill, North Carolina and 5,600 square feet in Lisle, Illinois. Established in 2019, Knox Safetydesignedand soldcarbon monoxide detectors for residential use.
Rusoh, Inc.was formed in 2012, todesignand marketan owner-maintained, multipurpose, reloadable, dry chemical fire extinguisher andwasthe first portable owner-maintainedfire extinguisher. As noted above, the business was divested in 2023.
The operations of the currentbusinessthat comprises the Safety segment are startup in natureand have resulted in limited revenues. The segment has a sales force of two employees that sell to and service most customers. It also utilizes a fewmanufacturers' representatives who may also sell other product lines. Product competition extends to product features, product pricing, product quality, marketing programs, service policies and other factors.New product introductions are an important part of the segment's sales to enhance its product offerings.New products entail unusual risks.Engineering and tooling costs are increasingly expensive, as are finished goods that may not have a ready market or achieve widespread commercialacceptance. Securing Underwriters Laboratories (UL) and ETL certifications is a prerequisite to sales, and the process for securing certificationis both expensive and time consuming.Fully tooled products are required prior to the performance of most tests. High-cost advertising commitments which may accompany suchproducts may not be fully absorbed by ultimate product sales.Initial production schedules, set in advance of introduction, carry the possibility of excess unsold inventories.New product introductions are further subject to delivery delays from supply sources, which can impact availability to meet commitments.
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Research and development costs related to new product development for the years 2025, 2024, and 2023were expensed in operations of these years.
The segmentprimarily warehouses and distributes its products from distribution centers located in Canton and Nettleton, Mississippi, as well asEau Claire, Wisconsin.
**B.OTHER COMMENTS******
**1. Sources and Availability of Materials**
See Note J to the Consolidated Financial Statements.
**2. Patents, Trademarks, and Licenses**
Patents, trademarks and know-how are important to the Companys segments.Although the Companys current and future success does not materially depend upon the judicial protection of its intellectual property rights (patents, trademarks, trade dress copyrights and trade secrets), removal of that protection would expose the Company to competitors who seek to take advantage of the Company's innovations and proprietary rights.The Companys segments hold numerous patents, trademarks, and copyrights registered in the United States and foreign countries related to various products and methods.The Companybelieves its business is not dependent upon any individual patent, copyright or license, but that the Prestotrademark is material to its business.
**3. Effects of Compliance with Environmental andOtherRegulations**
In May 1986, the Company's Eau Claire, Wisconsin site was placed on the United States Environmental Protection Agency's (EPA) National Priorities List (NPL) under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) because of hazardous waste deposited on the property.At year end 1998, all remediation projects at the Eau Claire, Wisconsin site had been installed, were fully operational, and restoration activities had been completed.
Based on factors known as of December 31, 2025, it is believed that the Company's environmental liability reserve will be adequate to satisfy on-going remediation operations and monitoring activities; however, should environmental agencies require additional studies or remediation projects, it is possible the existing accrual could be inadequate.
Management believes that in the absence of any unforeseen future developments, known environmental matters will not have any material effect on the results of operations or financial condition of the Company.
Like other manufacturers, the Company is subject to a broad range of federal, state, local and foreign laws and requirements, including those concerning air emissions, discharges into waterways, and the generation, handling, storage, transportation, treatment and disposal of hazardous substances and waste materials, as well as the remediation of contamination associated with releases of hazardous substances at the Companys facilities and off-site disposal locations, workplace safety and equal employment opportunities.These laws and regulations are constantly changing, and it is impossible to predict with accuracy the effect that changes to such laws and regulations may have on the Company in the future.Like other industrial concerns, the Companys manufacturing operations entail the risk of noncompliance, and there can be no assurance that the Company will not incur material costs or other liabilities as a result thereof.
The Company is also subject to various other federal, state, and local laws affecting its business, as well as a variety of regulations relating to such matters as working conditions, equal employment opportunities, and product safety.These regulations stem from regulatory bodies or laws such as the US Consumer Product Safety Commission, the US Food and Drug Administration, Californias Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65), the US Department of Transportation, and authorities having jurisdiction for fire safety and refrigeration equipment.The Company believes it is currently in material compliance with all such applicable laws and regulations.
In addition, U.S. Government contractors are subject to extensive laws and regulations specific to the defense industry, several of which are delineated in Item 1A Risk Factors under the heading U.S. Government contractors are subject to extensive laws and regulations applicable to the defense industry and the Company could be adversely affected by changes in and compliance with such laws and regulations, or any negative findings by the U.S. government regarding the Companys compliance with them.
**4.Human Capital**
As of December 31, 2025, the Company and its subsidiaries had 1,200employees compared to 1,126employees at the end of December 2024.
Approximately 179employees of Amron are members of the United Steel Workers union.The most recent contract between Amron and the union is effective through February 28, 2030.
The Company provides its employees with competitive salaries and bonuses, opportunities for equity ownership, opportunities for continued learning and growth and a robust employment package that promotes well-being across all aspects of their lives, including health care, retirement planning and paid time off.
**5. Industry Practices Related to Working Capital Requirements**
The major portion of the Company's sales aremade with terms of 60 days or shorter.
For the Housewares/Small Appliance segment, inventory levels increase in advance of the selling period for products that are seasonal, such as pressure canners, heaters, and major new product introductions.Inventory build-up also occurs to create stock levels required to support the higher sales that occur in the latter half of each year.Buying practices of the segment's customers require "just-in-time" delivery, necessitating that the segmentcarry large finished goods inventories.
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The ability to meet United StatesDODdemands also necessitates the carrying of large inventories in the Defense segment.
Inventory build-up also occurs in the Safety segment both for seasonal products like carbon monoxide alarms and smoke alarms,andto meet potential demand of customers that require delivery with shorter lead times.
**6.****Order****Backlog**
Shipment of most products of theHousewares/Small Appliance and Safety segments occurs within a relatively short time after receipt of the order and, therefore, there is usually no substantial order backlog.New product introductions may result in order backlogs that vary from product to product and as to timing of introduction.
The contract backlog of the Defense segment was approximately $1,747,809,000, $1,085,612,000, and $564,005,000 at December 31, 2025, 2024, and 2023, respectively.Backlog is defined as the value of orders from the customer less the amount of sales recognized against the orders.It is anticipated that the backlog will be produced and shipped during an 18- to 42-month period, after December 31, 2025.
**C.AVAILABLE INFORMATION**
The Company has a web site at www.gopresto.com.The contents of the Company's web site are not part of, nor are they incorporated by reference into, this annual report.
ne
The Company makes available on its web site its annual reports on Form 10-K or 10-K/A and, beginning with its second quarter filing in 2011, quarterly reports on Form 10-Q or 10-Q/A.It does not provide its current reports on Form 8-K or amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act on its website.The Company does not do so because these and all other reports it files with the SEC are readily available to the public on the SEC web site at www.sec.gov and can be located with ease using the link provided on the Companys website. Upon request, the Company provides paper copies of its annual report free of charge.
****
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**ITEM 1A. RISK FACTORS**
The Companys three business segments described above are all subject to a number of risk factors, the occurrence of any one or more of which could have a significant adverse impact on the business, financial condition, or results of operations of the Company as a whole.
**Housewares/Small Appliance Segment**:
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*Increases in the costs for raw materials, energy, transportation and other necessary supplies could adversely affect the results of the Companys operations.*
**
The Companys suppliers purchase significant amounts of metals, plastics, and energy to manufacture the Companys products.Also, the cost of fuel has a major impact on transportation costs as do intermodal shipping rates.Any increased costs that cannot be fully absorbed or passed along in the form of price increases to the retail customer can have a material adverse impact on the Companys operating results.
*Reliance on third-party suppliers in Asia makes this segment vulnerable to supply interruptions**and foreign business risks*.
The majority of the housewares/small appliance products are manufactured by a handful of third-party suppliers in Asia, primarily in the Peoples Republic of China.The Companys ability to continue to select and develop relationships with reliable vendors who provide timely deliveries of quality parts and products will impact its success in meeting customer demand.Most products are procured on a purchase order basis.As a result, the Company may be subject to unexpected changes in pricing or supply of products.There is no assurance that it could quickly or effectively replace any of its vendors if the need arose.Any significant failure to obtain products on a timely basis at an affordable cost or any significant delays or interruptions of supply may disrupt customer relationships and have a material adverse effect on the Companys business.
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International manufacturing is subject to significant risks, including, among others, labor unrest, adverse social, political and economic conditions, interruptions in international shipments, tariffs and other trade barriers, legal and regulatory constraints and fluctuations in currency exchange rates. An increase oftariffs on products imported from Chinawould have a material adverse effect on the Companys business.
*The Housewares/Small Appliance segment is dependent on key customers, and any significant decline in business from one or more of its key customers could adversely affect the segments operating results.*
Although the Company has a long-established relationship with its major customers, it does not have any long-term supply agreements or guarantiesof minimum purchases.As a result, the customers may fail to place anticipated orders, change planned quantities, delay purchases, or change product assortments for reasons beyond the Companys control, which could prove detrimental to the segments operating results.
*The sales for this segment are highly seasonal and dependent upon the United States retail markets and consumer spending.*
Traditionally, this segment has recognized a substantial portion of its sales during the holiday selling season.Any downturn in the general economy, shift in consumer spending away from its housewares/small appliances, or further deterioration in the financial health of its customer base could adversely affect sales and operating results.
*The Company may not be successful in developing and introducing new and improved consumer products.*
The development and introduction of new housewares/small appliance products is very important to the Companys long-term success.The ability to develop new products is affected by, among other things, whether the Company can develop and fund technological innovations and successfully anticipate consumer needs and preferences, as well as the intellectual property rights of others.The introduction of new products may require substantial expenditures for advertising and marketing to gain marketplace recognition or to license intellectual property. There is no guarantee that the Company will be aware of all relevant intellectual property in the industry and may be subject to claims of infringement, which could preclude it from producing and selling a product. Likewise, there is no guarantee that the Company will be successful in developing products necessary to compete effectively in the industry or that it will be successful in advertising, marketing and selling any new products.
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*Product recalls or lawsuits relating to defective products could have an adverse effect on the Company, as could the imposition of industry sustainability standards.*
As distributors of consumer products in the United States, the Company is subject to the Consumer Products Safety Act, which empowers the U.S. Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous.Under certain circumstances, the U.S. Consumer Products Safety Commission could require the Company to repair, replace or refund the purchase price of one or more of its products, or the Companymay voluntarily do so. Any repurchase or recall of products could be costly and damage the Companys reputation, as well as subject it to a sizable penalty that the Commission is empowered to impose.If the Company removed products from the market, its reputation or brands could be tarnished and it might have large quantities of finished products that could not be sold.
The Company could also face exposure to product liability claims if one of its products were alleged to have caused property damage, bodily injury or other adverse effects. It is self-insured to specified levels of those claims and maintains product liability insurance for claims above the self-insured levels. The Company may not be able to maintain such insurance on acceptable terms, if at all, in the future.In addition, product liability claims may exceed the amount of insurance coverage.Moreover, many states do not allow insurance companies to provide coverage of punitive damages, in the event such damages were imposed.Additionally, the Company does not maintain product recall insurance.As a result, product recalls or product liability claims could have a material adverse effect on the Companys business, results of operations and financial condition.
The portable appliance and floor care companies industry association has a framework for asustainability standardfor the industry, but has yet todevelopspecific guidelines for implementation. When and if developed, the standards will do nothing for the environment, but will entail the addition of significant bureaucracy and outside certification fees.As such, compliance will be burdensome and expensive.
*The housewares/small appliance industry continues to consolidate, which could ultimately impede the Companys ability to secure product placement at key customers.*
Over the past decade, the housewares/small appliance industry has undergone significant consolidation, and, as a result, the industry primarily consists of a limited number of larger companies.Larger companies do enjoy a competitive advantage in terms of the ability to offer a larger assortment of product to any one customer.As a result, the Company may find it more difficult or lose the ability to place its products with its customers.
**Defense Segment:**
*The Company relies primarily on sales to U.S. Government entities, and the failure to procure or the loss of a significant contract or contracts could have a material adverse effect on its results of operations.*
As the Companys sales in the Defense segment are primarily to the U.S. Government and its prime contractors, it depends heavily on the contracts underlying these programs.The loss or significant reduction of a major program in which the Company participates could have a material adverse effect on the Company's results of operations.
*A decline in or a redirection of the U.S. defense budget could result in a material decrease in the Defense segment sales and earnings.*
Government contracts are primarily dependent upon the U.S. defense budget.During recent years, the Companys sales were augmented by increased defense spending, including supplemental appropriations for operations in Iraq and Afghanistan, areas from which the U.S. has withdrawn. More recently, they have beenaugmented by the Ukraine SecurityAssistance Initiative. Future defense budgets could be negatively affected by several factors, including U.S. Government budget deficits, administration priorities, U.S. national security strategies, a change in spending priorities, andreduction of military operations around the world.Any significant decline or redirection of U.S. military expenditures could result in a material decrease to the Companys sales and earnings.
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U.S. Government contracts are also dependent on the continuing availability of Congressional appropriations. Congress usually appropriates funds for a given program on a fiscal year basis even though contract performance may take more than one year.As a result, at the outset of a major program, the contract is usually incrementally funded, and additional monies are normally committed to the contract by the procuring agency only as Congress makes appropriations for future fiscal years.In addition, most U.S. Government contracts are subject to modification if funding is changed.Any failure by Congress to appropriate additional funds to any program in which the Company participates, or any contract modification as a result of funding changes, could materially delay or terminate the program.This could have a material adverse effect on theCompanys results of operations.
*The Company may not be able to react to increases in its costs due to the nature of its U.S. Government contracts.*
Substantially all of the Companys U.S. Government contracts are fixed-price.Under fixed-price contracts, the Company agrees to perform the work for a fixed price, subject to limited escalation provisions on specified raw materials.Thus it bears the risk that any increases or unexpected costs may reduce profits or potentially cause losses on the contract, which could have a material adverse effect on results of operations and financial condition.That risk is potentially compounded by the political actions under consideration by federal and state governments, including climate change and labor regulations, which could have an impact if enacted or promulgated on the availability of affordable labor, energy and ultimately, materials, as the effects of the legislation/regulation ripple throughout the economy. In addition, products are accepted by test firing samples from a production lot.Lots typically constitute a sizable amount of product.Should a sample not fire as required by the specifications, the cost to rework or scrap the entire lot could be substantial.
*The Companys U.S. Government contracts are subject to termination.*
All of the Companys U.S. Government contracts can be terminated by the U.S. Government either for its convenience or if the Company defaults by failing to perform under the contract.Performance failure can occur from a myriad of factors, which include late shipments due to the inability to secure requisite raw materials or components or strikes or other labor unrest, equipment failures or quality issues, which result in products that do not meet specifications, etc.Termination for convenience provisions provide only for recovery of costs incurred and profit on the work completed prior to termination.Termination for default provisions provide for the contractor to be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source.If a termination provision is exercised, it could have a material adverse effect on the Companys business, results of operations and financial condition.
*Failure of the Companys subcontractors to perform their contractual obligations could materially and adversely impact contract performance.*
Key components and services are provided by third party subcontractors, several of which the segment is required to work with by government edict.Under the contract, the segment is responsible for the performance of those subcontractors, many of which it does not control.There is a risk that the Company may have disputes with its subcontractors, including disputes regarding the quality and timeliness of work performed by subcontractors.A failure by one or more of the Companys subcontractors to satisfactorily provide on a timely basis the agreed-upon supplies or perform the agreed-upon services may materially and adversely impact the Companys ability to perform its obligations as the prime contractor.
*U.S. Government contractors are subject to extensive laws and regulations applicable to the defense industry and the Company could be adversely affected by changes in and compliance with such laws and regulations, or any negative findings by the U.S. government regarding the Company**s compliance with them.*
U.S. government contractors must comply with numerous significant procurement regulations and specific legal requirements, including a vast array of federal, state, and local laws, regulations, contract terms and requirements related to the defense industry and the Companys products and businesses. These laws and regulations include, but are not limited to, the Federal Acquisition Regulation (FAR) and Department of Defense FAR Supplement, Truthful Cost or Pricing Data Act, International Traffic in Arms Regulations/Arms Export Control Act, DOD 4145.26-M, and Bureau of Alcohol, Tobacco, Firearms and Explosives orders, rules and regulations. Although customary in government contracting, these regulations and legal requirements increase the Companys performance and compliance costs and risks. New laws, regulations or procurement requirements or changes to current ones (for example, regulations related to cybersecurity and related certification requirements, specialty metals, and conflict minerals) can significantly increase the Companys costs and risks and reduce profitability. Non-compliance with the laws, regulations, contract terms and processes to which the Company is subject could affect its ability to compete and have a material adverse effect on the Companys financial position, results of operations and/or cash flows.
**Safety Segment:**
*The Safety segment is comprised of businesses that are startup in nature.*
The operations that comprise the Safety segment are startup in nature, and like most startups may not ultimately have the potential to be successful.
**
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*Increases in the costs for raw materials, energy, transportation and other necessary supplies could adversely affect the results of the Companys operations.*
**
The Companys suppliers purchasemetals, plastics, chemicals, and energy to manufacture the Companys products.Also, the cost of fuel has a major impact on transportation costs, as do intermodal shipping rates.Any increased costs that cannot be fully absorbed or passed along in the form of price increases to the customer can have a material adverse impact on the Companys operating results.
*Reliance on third-party suppliers in Asia and Mexicomakes this segment vulnerable to supply interruptions**and foreign business risks*.
A majorportion of the safety products are manufactured by a handful of third-party suppliers, some of which are in Asia, primarily in the Peoples Republic of China, and some in Mexico.The Companys ability to continue to select and develop relationships with reliable vendors who provide timely deliveries of quality parts and products will impact its success in meeting customer demand.Most products are procured on a purchase order basis.As a result, the Company may be subject to unexpected changes in pricing or supply of products.There is no assurance that it could quickly or effectively replace any of its vendors if the need arose.Any significant failure to obtain products on a timely basis at an affordable cost or any significant delays or interruptions of supply may disrupt customer relationships and have a material adverse effect on the Companys business.
In addition, international manufacturing is subject to significant risks, including, among others, labor unrest, adverse social, political and economic conditions, interruptions in international shipments, tariffs and other trade barriers, legal and regulatory constraints and fluctuations in currency exchange rates. An increase of tariffs on products imported from China would have a material adverse effect on the Companys business.
*Regulatory constraints and authorities having jurisdiction has impeded and may continue to impede sales of certain of the segments products.*
**
The commercial sales of certain of the Safety segments products are dependent on the approval of officials that oversee fire safety at state and local levels for use of the products in areas under their jurisdiction.The inability to obtain the approval of these officials has had and may continue to have an adverse impact on the segments operating results.
*Various products in the Safety segment are reliant upon up-to-date software, hardware, and the wireless communications infrastructure.*
**
The effective operation of various products in the Safety segment depend on software that utilizes data obtained wirelessly via telecommunication network infrastructure.The inability of the Company to maintain software and hardware that can connect to the wireless infrastructure, failure of the wireless infrastructure, or the unavailability of cloud based data storage, could have a material adverse effect on the efficacy of the segments products and in turn on its operating results.
**
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*The segment may not be successful in developing and introducing new and improved products.*
The development and introduction of new products is very important to the Companys long-term success.The ability to develop new products is affected by, among other things, whether the Company can develop and fund technological innovations and successfully anticipate customer needs and preferences, meet Underwriters Laboratories or ETL requirements and avoid infringing on the intellectual property rights of others.The introduction of new products may require substantial expenditures for advertising and marketing to gain marketplace recognition or to license intellectual property. There is no guarantee that the Company will be aware of all relevant intellectual property in the industry and may be subject to claims of infringement, which could preclude it from producing and selling a product. Likewise, there is no guarantee that the Company will be successful in developing products necessary to compete effectively in the industry or that it will be successful in advertising, marketing and selling any new products.
**Acquisition Risks:**
****
The Company may pursue acquisitions of new product lines or businesses.It may not be able to identify suitable acquisition candidates or, if suitable candidates are identified, it may not be able to complete the acquisition on commercially acceptable terms. Even if the Company is able to consummate an acquisition, the transaction would present many risks, including, among others: failing to achieve anticipated benefits or cost savings; difficulty incorporating and integrating the acquired technologies, services or products; coordinating, establishing or expanding sales, distribution and marketing functions, as necessary; diversion of managements attention from other business concerns; being exposed to unanticipated or contingent liabilities or incurring the impairment of goodwill; the loss of key employees, customers, or distribution partners; and difficulties implementing and maintaining sufficient controls, policies and procedures over the systems, products and processes of the acquired company. If the Company does not achieve the anticipated benefits of its acquisitions as rapidly or to the extent anticipated by management,there could be a material, adverse effect on the Companys business, financial condition or results of operations.
**Information Technology System Failure or Security Breach Risks:**
The Company relies on its information technology systems to effectively manage its business data, communications, supply chain, logistics, accounting, and other business processes. While the Company endeavors to build and sustain an appropriate technology environment, information technology systems are vulnerable to damage or interruption from circumstances beyond the Companys control, including systems failures, viruses, security breaches or cyber incidents such as intentional cyber-attacks aimed at theft of sensitive data, or inadvertent cyber-security compromises. The Company is also subject to increasing government, customer, and other cyber and security requirements, including disclosure obligations. A security breach of such systems could result in interruptions of the Companys operations, negatively impact relations with customers or employees, and expose the Company to fines and penalties,liability and litigation, any one of which could have a negative impact on the Companys business, results of operations or financial condition.The Companys insurance coverage may not be adequate to cover all the costs related to cyber security attacks or disruptions.
On March 1, 2025, the Company experienced a system outage caused by a cybersecurity incident, which is described in Item 1C CYBERSECURITY.
There can be no assurance the Company will not experience materialeffects from security breaches in the future. As cyber threats develop and grow, the Company may need to make significant further investments to protect data and its infrastructure, including the implementation of new computer systems or upgrades to existing systems, deployment of additional personnel and protection-related technologies, engagement of third-party consultants, and training employees.See Item 1C CYBERSECURITY for a further discussion.
**Health Epidemics, Pandemics, or Similar Public Health Crises Risks:**
The Company faces a wide variety of risks related to health epidemics, pandemics and similar outbreaks, especially of infectious diseases. A global health crisis like the COVID-19 pandemic has contributed to business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements, regulatory challenges, reductions in demand for products and services, inflationary pressures and market volatility. If a health epidemic, pandemic or similar outbreak were to occur or worsen, the Company will likely experience broad and varied impacts, including potentially to its workforce and supply chain, inflationary pressures and increased costs (which may or may not be fully recoverable or insured), contracting, production and/or distribution delays, market volatility and other financial impacts. If any or all of these items were to occur, the Company could experience material adverse impacts on its business, financial condition, results of operations and/or cash flows.
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**ITEM 1B.UNRESOLVED STAFF COMMENTS**
None.
**ITEM 1C. CYBERSECURITY**
The Company faces various cybersecurity threats. The purpose of the Company's cybersecurity program is to assess, identify, manage and mitigate cybersecurity risk while supporting the achievement of the Company's business objectives.
Under the Company's comprehensive risk management program, the board of directors (the "Board") of the Company maintains oversight of the most significant risks facing the Company, including cybersecurity risks, while senior management is responsible for the identification and prioritization of risks that are material to the Company's business, corresponding risk-mitigation efforts and day-to-day management of the Company's risk management program. At least annually, the Board receives cybersecurity briefings from senior executives.
The Company's cybersecurity program sets the framework for the Company's approach to cybersecurity. Each business segment of the Company designates individuals with appropriate qualifications and experience to be responsible for addressing cybersecurity matters, including assessing, identifying and managing risks from cybersecurity threats, with a direct reporting line to senior management. Under the Company's approach to cybersecurity, each business segment designs and operates its own information and cybersecurity program tailored to its market, customer requirements, regulatory requirements and threats. The Company's cybersecurity policy and procedures are designed to ensure senior management receives timely and adequate information regarding cybersecurity matters, including threats and incident response, as appropriate to the matter.
As part of the Company's approach to cyber risk management, the Company performs internal audits of internal processes and controls relating to cybersecurity. Every year, the Company engages third-party experts to conduct cyber penetration testing. Based on their findings and recommendations, the Company makes the appropriate updates to its cybersecurity software.
Although the Company has designed its cybersecurity program and oversight to mitigate cybersecurity risks, the Company faces unknown cybersecurity risks, threats, and attacks. On March 1, 2025, the Company experienced a system outage caused by a cybersecurity incident. Upon discovery, the Company activated its incident response team, comprised of internal personnel and external cybersecurity experts retained to assist in addressing the incident. The incident temporarily impacted the Companys operations, including shipping and receiving, some manufacturing processes, and various other back office functions, during which time the Company implemented temporary measures to maintain critical functions while systems were being restored. The Company conducted a forensic investigation and analysis to assess the potential impact and found that there were no material impacts on the Company's financial condition and results of operations.
There can be no assurance the Company will *not* experience materialeffects from security breaches in the future. As cyber threats develop and grow, the Company *may*need to make significant further investments to protect data and its infrastructure, including the implementation of new computer systems or upgrades to existing systems, deployment of additional personnel and protection-related technologies, engagement of *third*-party consultants, and training employees. See Item *1A* - Risk Factors above for additional discussion of various cybersecurity risks.
**ITEM 2.PROPERTIES (Owned Except Where Indicated)**
The Company's Eau Claire facility is approximately 522,000 square feet, of which approximately 354,000 square feet is leased to Drylock Technologies, Ltd.Rely Innovations, Inc. rentsapproximately 8,000 square feet of the Eau Claire facility.The Company's corporate office occupies the balance of the space in Eau Claire.During 2018, the Company completed construction of a 30,000 square foot office building adjacent to its Eau Claire facility, which it also leases to Drylock Technologies, Ltd.
The Company's Nettleton facility, which was purchased on January 23, 2025,is approximately507,000 square feet and will be used principally in the warehousing,distribution, and product service functions of the Housewares/Small Appliance and Safety segments.The Company plans for this facility to replace its two existingwarehousing facilities located in Canton and Jackson, Mississippi. The Canton facility contains255,000 square feetwhich is used primarily for warehousing and distribution and some activities for product service functions. The facility was sold on February 10, 2026 and subsequently leased back under a short term lease agreement, as the Company transitions all warehousing functions to the Nettleton facility. An additional 72,000 square feet has been leased in adjacent Canton buildings for warehousing. The Jackson facility contains 252,000 square feet, which the Company plans to divest as well.
The Company has Defense segment manufacturing facilities located in Janesville and Antigo, Wisconsin; East Camden, Arkansas; Clear Lake, South Dakota; and Marshall, Texas. The Janesville, Wisconsin facility is comprised of approximately 131,000 square feet. The Antigo, Wisconsin facility is comprised of approximately 212,000 square feet,the East Camden, Arkansas operation leases approximately 384,000 square feet, the Clear Lake, South Dakota facility is comprised of approximately 124,000 square feet which includes the Company's 2021 construction of 10,000 square feet of office space, and the Marshall, Texas facility is comprised of approximately 77,000 square feet.
The Company's Safety segment leases space in Mount Horeb, Wisconsin; Chapel Hill, North Carolina; and Lisle, Illinois. OneEvent Technologies, Inc. leases approximately 4,300 square feet for its operations in Mount Horeb and Rely Innovations, Inc. leases approximately 4,300 and 5,600 square feet for its operations in Chapel Hill, North Carolina and Lisle, Illinois, respectively.
The facilities in use for each of the Companys business segments are believed to be adequate for their ongoing business needs.
**ITEM 3.LEGAL PROCEEDINGS**
See Note I to the Companys Consolidated Financial Statements.
See Item 1-B-3 of this Form 10-K and Note K to the Consolidated Financial Statements for information regarding certain environmental matters.
**ITEM 4.MINE SAFETY DISCLOSURES**
Not applicable.
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**PART II**
**ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**
****
On February 27, 2026, the Companys Board of Directors announced a regular dividend of $1.00 per share. The dividend ispayable on March 20, 2026to the stockholders of record as of March 9, 2026.
The common stock of National Presto Industries, Inc. is traded on the New York Stock Exchange under the symbol NPK. As of March 9, 2026, there were 209holders of record of the Companys common stock. This number does not reflect stockholders who hold their shares in the name of broker dealers or other nominees. During the fourth quarter of 2025, the Company did not purchase any of its equity securities.
The information under the heading Equity Compensation Plan Information, in the Companys Proxy Statement for its 2026Annual Meeting of Stockholders, is incorporated by reference.
The line graph and related information set forth under the heading Performance Graph in the Companys 2025 Annual Report is incorporated by reference.
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**ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
An overview of the Companys business and segments in which the Company operates and risk factors can be found in Items 1 and 1A of this Form 10-K.Forward-looking statements in this Managements Discussion and Analysis of Financial Condition and Results of Operations, elsewhere in this Form 10-K, in the Companys 2025Annual Report to Shareholders, in the Proxy Statement for the annual meeting to be held May 19, 2026, and in the Companys press releases and oral statements made with the approval of an authorized executive officer are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated by some of the statements made herein.Investors are cautioned that all forward-looking statements involve risks and uncertainty. In addition to the factors discussed herein and in the notes to Consolidated Financial Statements, among the other factors that could cause actual results to differ materially are the following: consumer spending and debt levels; interest rates; continuity of relationships with and purchases by major customers; product mix; the benefit and risk of business acquisitions; competitive pressure on sales and pricing; development and market acceptance of new products; increases in material, freight/shipping, tariffs, or production cost which cannot be recouped in product pricing; delays or interruptions in shipping or production; shipment of defective product which could result in product liability claims or recalls; work or labor disruptions stemming from a unionized work force; changes in government requirements, military spending,and funding of government contracts which could result, among other things, in the modification or termination of existing contracts; dependence on subcontractors or vendors to perform as required by contract; the ability of startup businesses to ultimately have the potential to be successful; the efficient start-up and utilization of capitaland equipment investments; political actions of federal and state governments which could have an impact on everything from the value of the U.S. dollar vis--vis other currencies to the availability of affordable labor and energy; and security breaches and disruptions to our information technology system. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings.
**2025COMPARED TO2024**
Readers are directed to Note L, Business Segments, to the Companys Consolidated Financial Statements for data on the financial results of the Companys three business segments for the years ended December 31, 2025 and 2024.
On a consolidated basis, sales increased by $115,296,000 (30%), gross profit increased by $1,759,000 (2%), selling and general expense increased by $4,030,000 (13%),impairment of vendor deposit increased $2,701,000, and amortization was consistent. Other income decreased by $3,579,000 (66%), earnings before provision for income taxes decreased by $8,551,000 (17%), and net earnings decreased by $8,376,000 (20%).Details concerning these changes can be found, by segment, in the comments below.
Net sales of the Housewares/Small Appliance segment decreased by $7,195,000 (7%), from $102,799,000 to $95,604,000,primarily attributable to adecrease in units shipped, approximately 47% was offset by an increase in pricing.Net sales of the Defense segment increased by $121,912,000 (43%), from $284,025,000 to $405,937,000, reflecting an increase in shipments from the segment's backlog. Safety segment sales increased $579,000 to $1,983,000, reflecting an increase in shipments.
Gross profit of the Housewares/Small Appliance segment decreased $17,889,000 from $25,478,000 (25% of sales) in 2024to $7,589,000 (8% of sales) in 2025, primarily reflecting the decrease in sales mentioned above and the Trump administration's tariffs that went into effect on goods deemed to have been shipped from the Orient after January 31, 2025. Those tariffs are generally treated as period costs and expensed as they are incurred, reflecting the segments LIFO inventory cost valuation method.The relocation costs of the segments distribution center from Canton to Nettleton, Mississippi also served to reduce gross profit by approximately $1,261,000.Defense gross profit increased $19,471,000 from $58,173,000 (21% of sales) in 2024to $77,644,000 (19% of sales) in 2025, primarily reflecting the increase in sales mentioned above, as well as differences in mix efficiencies, and material costs.Due to the startup nature of the businesses in the Safety segment and resulting limited revenues, gross margins were negative in both years.
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Selling and general expenses for the Housewares/Small Appliance segment increased $1,304,000, primarily reflecting increased personnel costs of $768,000, computers and technology costs of $266,000, and the favorable adjustment to the reservefor bad debts of $285,000 that occurred in the prior year. Defense segment selling and general expenses increased $3,941,000, primarily due to increased personnelcosts of $3,012,000, legal and professional expenses of $347,000,repairs and maintenance costs of $334,000, and computers and software expenses of $256,000. Safety segment selling and general expenses decreased $1,215,000, primarily reflectingthe sale of OneEvent's refrigeration monitoring business that occurred on July 31, 2025.
During the first quarter of 2025, the Company made deposits totaling $2,701,000 with a vendor in its Housewares/Small Appliances segment. On May 29, 2025, the vendor filedforprotection in the U.S. Bankruptcy Court in the Northern District of Texas. As recovery of the deposit is deemed unlikely, the Company recorded an impairment of the full deposit during the second quarter of 2025.
The above items were responsible for the change in operating profit from continuing operations.
The $3,579,000decrease in other income wasattributable to adecrease of $3,009,000 in interest income on marketable securities and an increase in interest expense of $830,000 related to the outstanding balance of the Company's revolving line of creditduring2025.Both stem from the increased investments in inventory required to support augmented Defense segment awards.
Earningsbefore provision for income taxes decreased $8,551,000 from $50,670,000 to $42,119,000. The provision for income taxes decreased $175,000 from $9,210,000 to $9,035,000, which resulted in an effective income tax rate of 22% and 18% for the years ended December 31, 2025 and 2024, respectively. The increase in the effective income tax rate was primarily attributable to the absence of favorable adjustments recognized in 2024 related to prior year estimates. Net earnings decreased $8,376,000 from $41,460,000 to $33,084,000.
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**2024COMPARED TO 2023**
Readers are directed to Note L, Business Segments, to the Companys Consolidated Financial Statements for data on the financial results of the Companys three business segments for the years ended December 31, 2024 and 2023.
On a consolidated basis, sales increased by $47,316,000 (14%), gross profit increased by $11,114,000 (17%), selling and general expense increased by $1,054,000 (3%), and intangibles amortization decreased by $120,000 (7%). Other income decreased by $1,941,000 (26%), earnings before provision for income taxes increased by $8,239,000 (19%), and net earnings increased by $6,901,000 (20%).Details concerning these changes can be found, by segment, in the comments below.
Net sales of the Housewares/Small Appliance segment increased by $5,180,000, from $97,619,000 to $102,799,000, or 5%,primarily attributable to the increase in units shipped. Net sales of the Defense segment increased by $42,322,000, from $241,703,000 to $284,025,000, or 18%, reflecting an increase in units shipped.
Gross profit of the Housewares/Small Appliance segment increased $5,611,000 from $19,867,000 (20% of sales) in 2023 to $25,478,000 (25% of sales) in 2024, primarily reflecting the increase in sales mentioned above, augmented by an improved product mix and a favorable LIFO inventory adjustment. Defense gross profit increased $6,170,000 from $52,003,000 (22% of sales) in 2023 to $58,173,000 (21% of sales) in 2024, primarily reflecting the increase in sales mentioned above.Due to the startup nature of the businesses in the Safety segment, gross margins were negative in both years. The comparative decrease in gross margins of $667,000 were primarily due to increased product development and testing.
Selling and general expenses for the Housewares/Small Appliance segment increased $361,000, primarily reflecting increased personnel costs of $654,000 and accrual levels for self insurance of $339,000,partially offset by changes to accrual levels forbad debt of $571,000. Defense segment selling and general expenses increased $1,530,000, primarily due to increased personnelcosts of $1,609,000, partially offset by decreased legal and professional expenses of $156,000.Safety segment selling and general expenses decreased $837,000, primarily reflecting decreased personnelcosts of $935,000 and legal and professional expenses of $322,000, partially offset bythe absence of the prior year's gain on the saleof Rusoh, Inc. of $351,000. See Notes L to the Company's Consolidated Financial Statements.
Intangibles amortization decreased as a result of the absence of the prior year's amortization of intellectual property intangibles from the acquisition of Knox Safety, Inc.
The above items were responsible for the change in operating profit from continuing operations.
Other income decreased $1,941,000, which was primarily attributable to a reduced portfolio of marketable securities.
Earningsbefore provision for income taxes increased $8,239,000 from $42,431,000 to $50,670,000. The provision for income taxes increased from $7,872,000 to $9,210,000, which resulted in an effective income tax rate of 18% and 19% for the years ended December 31, 2024 and 2023, respectively. Net earnings increased $6,901,000 from $34,559,000 to $41,460,000.
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**LIQUIDITY AND CAPITAL RESOURCES**
**2025 COMPARED TO 2024**
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Cash used in operating activities was $9,137,000 during 2025 as compared to $53,426,000during 2024. The principal factors behind the decrease in cash used can be found in the changes in the components of working capital within the Consolidated Statements of Cash Flows.Of particular note during 2025 was net earnings of $33,084,000, which included the non-cash impairment of a vendor deposit of $2,701,000,depreciation and amortization expenses of $5,136,000,deferred income taxof $7,741,000 and retirement plan expense of $1,008,000.The combination of these factorswasmore thanoffset by increases in inventory and accounts receivable levels and a net decrease in payables and accrual levels.Of particular note during 2024was net earnings of $41,460,000, which included total non-cash depreciation and amortization of $5,046,000 and deferred income tax benefit of $4,528,000. This was augmented by decreases in deposits made to vendors (included in other assets and current assets) and a net increase in payable and accrual levels. The combination of these factorswasmore thanoffset by increases in inventory and accounts receivable levels.
Net cash used ininvesting activities was $21,876,000 during 2025 as compared to $14,965,000 provided by investing activities during 2024. The change primarily related to netsales and maturities of marketable securities of $4,477,000 in 2025, as opposed to $21,459,000 in 2024, and purchases of property, plant and equipment of $27,034,000 in 2025, as opposed to $7,531,000 in 2024.
Net cash provided byfinancing activities was $16,602,000 during2025as compared to $31,533,000 of net cashused in financing activities during 2024. The change primarily relates to net proceeds from the Company's line of credit in2025 of $23,624,000, as well as the annual dividend payments. During both years, the regular dividend was $1.00 per share. In 2024, the extra dividend was$3.50per share. However, there was no extra dividend payment during2025. Cash flows for both years also reflected the proceeds from the sale of treasury stock to a Company sponsored retirement plan. During2025and 2024, the Company incurredinterest expense of $832,000 and $2,000 related to its line of credit, respectively.
As a result of the foregoing factors, cash and cash equivalents decreased in 2025 by $14,411,000 to $3,252,000.
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Working capital increased by $15,887,000 to $308,112,000 at December 31, 2025 for the reasons stated above. The Companys current ratio was 4.2to 1.0 at December 31, 2025 and 4.9to 1.0 at December 31, 2024.
The Company expects to continue to evaluate acquisition opportunities that align with its business segments and will make further acquisitions, as well as continue to make capital investments in these segments per existing authorized projects and for additional projects if the appropriate return on investment is projected. See Item 1-A-2.
The Company has sufficientliquidity in the form of cash and cash equivalents and marketable securities and credit facilities to meet all of its anticipated capital requirements, to make dividend payments, and to fund future growth through acquisitions and other means.
The Company's principal commitments consist of purchase and lease obligations.Purchase obligations include outstanding purchase ordersissued to material suppliers and contractors in the Company'sDefense segment and those issued to manufacturers located primarily in the Orient for the Housewares/Small Appliance segment and in Mexico for the Safety segment. As of December 31, 2025, the purchase orders amounted to approximately $602,558,000. The Company can cancel or change many of these purchase orders, but may incur costs if its supplier cannot use the material to manufacture the Company's or other customers' products in other applications or return the material to their supplier. As a result, the actual amount the Company is obligated to pay cannot be reasonably estimated. Lease obligations are described in Note M - Leases to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
**2024COMPARED TO 2023**
Cash used in operating activities was $53,426,000 during 2024as compared to $45,389,000 provided by operating activities during 2023. The principal factors behind the increase in cash used can be found in the changes in the components of working capital within the Consolidated Statements of Cash Flows.Of particular note during 2024was net earnings of $41,460,000, which included total non-cash depreciation and amortization of $5,046,000 and deferred income tax benefit of $4,528,000. This was augmented by decreases in deposits made to vendors (included in other assets and current assets) and a net increase in payable and accrual levels. The combination of these factorswasmore thanoffset by increases in inventory and accounts receivable levels.Of particular note during 2023 were net earnings of $34,559,000, which included total non-cash depreciation and amortization of $6,007,000, decreases in accounts receivable levels and deposits made to vendors (included in other assets and current assets), and a net increase in payable and accrual levels. These were partially offset by non-cash deferred income tax benefit of $1,190,000 and an increase in inventory levels.
Net cash provided by investing activities was $14,965,000 during 2024as compared to $447,000 used in investing activities during 2023. Of note during 2024were net sales and maturities of marketable securities of $21,459,000 and proceeds from a note receivable of $1,037,000. These were partially offset by purchases of plant and equipment of $7,531,000. Of note during 2023were proceeds from sale of subsidiary of $2,000,000, net purchases of marketable securities of $1,466,000 and purchases of plant and equipment of $1,840,000.
Based on the accounting professions 2005 interpretation of cash equivalents under Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 230, the Companys variable rate demand notes have been classified as marketable securities. This interpretation, which is contrary to the interpretation that the Companys representative received directly from the FASB (which indicated it would not object to the Companys classification of variable rate demand notes as cash equivalents), has resulted in a presentation of the Companys Consolidated Balance Sheets that the Company believes understates the true liquidity of the Companys income portfolio. As of December 31, 2024 and 2023, $0 and $5,123,000, respectively, of variable rate demand notes wereclassified as marketable securities. These notes hadstructural features that allowed the Company to tender them at par plus interest within any 7-day period for cash to the notes trustees or remarketers and thus provided the liquidity of cash equivalents.
Cash flows from financing activities for 2024and 2023 primarily differed as a result of the $0.50per share increase in the extra dividend paid during these years. Cash flows for both years also reflected the proceeds from the sale of treasury stock to a Company sponsored retirement plan. In addition, the Company drew on and repaid its line of credit during 2024, incurring interest expense of $2,000.
As a result of the foregoing factors, cash and cash equivalents decreased in 2024by $69,994,000 to $17,663,000.
Working capital increased by $4,134,000 to $292,225,000 at December 31, 2024for the reasons stated above. The Companys current ratio was 4.9 to 1.0 at December 31, 2024and 5.0 to 1.0 at December 31, 2023.
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**DEFENSE SEGMENT BACKLOG**
The Companys Defense segment contract backlog was approximately $1,747,809,000 at December 31, 2025, and $1,085,612,000at December 31, 2024.Backlog is defined as the value of orders from the customer less the amount of sales recognized against the orders.It is anticipated that the backlog will be produced and shipped during an 18- to 42-month period.
**Critical accounting ESTIMATES**
The Company's discussion and analysis of financial condition and results of operations are based upon its Consolidated Financial Statements. The preparation of the Companys Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and revenues and expenses during the periods reported. The estimates are based on experience and other assumptions that the Company believes are reasonable under the circumstances, and these estimates are evaluated on an ongoing basis. Actual results may differ from those estimates.
The Company's critical accounting policies are those that materially affect its Consolidated Financial Statements and involve difficult, subjective, or complex judgments by management. The Company reviewed the development and selection of the critical accounting policies and believes the following isthe most critical accounting policythat could have a materialeffect on the Companys reported results as itinvolves the use of significant estimates and assumptions as described above. Thiscritical accounting policyand estimatehavebeen reviewed with the Audit Committee of the Board of Directors. See Note A - Summary of Significant Accounting Policies to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more detailed information regarding the Company'scritical accounting policies.
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**Impairment and Valuation of Long-lived Assets and Goodwill**
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Long-lived assets consist of property, plant and equipment and intangible assets, including the value of contracts/customer relationships, trademarks and safety certifications, trade secrets, and technology software. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, the amounts of the cash flows and the assets residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. The Company uses internal discounted cash flows estimates, quoted market prices when available and independent appraisals, as appropriate, to determine fair value. The Company derives the required cash flow estimates from its historical experience and its internal business plans.
The Company recognizes the excess cost of acquired entities over the net amount assigned to the fair value of assets acquired and liabilities assumed as goodwill. Goodwill, at the reporting unit level,is tested for impairmenton an annual basis at the start of the fourth quarter and between annual tests whenever an impairment is indicated. The impairment test for goodwill requires the determination of fair value of the reporting units. The Company uses multiples of earnings before interest, taxes, depreciation, and amortization ("EBITDA"), sales, and discounted cash flow models, which are described above, to determine the reporting unit's fair value, as appropriate.The Company uses internal discounted cash flows estimates, quoted market prices when available and independent appraisals, as appropriate, to determine fair value. A number of assumptions and estimates are involved in the application of the discounted cash flow model including revenue projections, projected operating cash flow margins, and discount rates. The Company derives the required cash flow estimates from its historical experience and its internal business plans.The Company also utilizes qualitative analyses to assess goodwill impairment.
**NEW ACCOUNTING PRONOUNCEMENTS**
Please refer to Note A(17) to the Companys Consolidated Financial Statements for information related to the effect of adopting new accounting pronouncements on the Companys Consolidated Financial Statements.
**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
The Company's interest income on cash equivalents and marketable securities is affected by changes in interest rates in the United States. Cash equivalents primarily consist of money market funds. The balance of the Companys investments is held primarily in certificates of deposits and other fixed rate securitieswith aweighted average life of 0.9years. Accordingly, changes in interest rates have not had a material effect on the Company, and the Company does not anticipate that future exposure to interest rate market risk will be material. The Company uses sensitivity analysis to determine its exposure to changes in interest rates.
The Company has no history of, and does not anticipate in the future, investing in derivative financial instruments. Most transactions with international customers are entered into in U.S. dollars, precluding the need for foreign currency cash flow hedges. As the majority of the Housewares/Small Appliance segments suppliers are located in China, periodic changes in the U.S. dollar and Chinese Renminbi (RMB) exchange rates do have an impact on that segments product costs. It is anticipated that any potential material impact from fluctuations in the exchange rate will be to the cost of products secured via purchase orders issued subsequent to the revaluation.
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**ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**
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A. |
The Consolidated Financial Statements of National Presto Industries, Inc. and its subsidiaries and the related Report of Independent Registered Public Accounting Firm can be found on pages F-1 through F-22. |
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B. |
Quarterly financial data is contained in Note N to the Consolidated Financial Statements. |
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**ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**
None.
****
**ITEM 9A.** **CONTROLS AND PROCEDURES**
**EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES**
The Company's management, including the Chief Executive Officer and Chief FinancialOfficer, conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the 1934 Act) as of December 31, 2025. Based on that evaluation, the Companys Chief Executive Officer and Chief FinancialOfficerconcluded that the Companys disclosure controls and procedures were effective as of that date.
There were nochanges to internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
**MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**
The management of National Presto Industries, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the 1934 Act. The Companys internal control system was designed to provide reasonable assurance to the Companys management and Board of Directors regarding the preparation and fair presentation of published financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2025. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control Integrated Framework (2013)*. Based on this assessment and thosecriteria,management concluded that as of December 31, 2025, the Company's internalcontrol over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the 1934 Act, was effective.
The Companys independent registered public accounting firm has issued its report on the effectiveness of the Companys internal control over financial reporting. The report appears below.
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**REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To the Shareholders and the Board of Directors of National Presto Industries, Inc.
**Opinion on the Internal Control Over Financial Reporting**
We have audited National Presto Industries, Inc.'s (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control**Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control**Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company and our report dated March 13, 2026, expressed an unqualified opinion.
**Basis for Opinion**
The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
**Definition and Limitations of Internal Control Over Financial Reporting**
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ RSMUSLLP
Milwaukee, Wisconsin
March 13, 2026
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**ITEM 9B.OTHER INFORMATION**
Insider Trading Arrangement
During the year ended *December 31, 2025,*the following director or officer (as defined in Rule *16a*-*1*(f) under the Securities Exchange Act of *1934*) of the Company adopted a non-Rule *10b5*-*1* trading arrangement as defined in Regulation S-K Item *408:*
On *November 10, 2025,*Randy Lieble, a director of the Company, adopted a written trading plan that is intended to satisfy the affirmative defense conditions of Rule *10b5*-*1*(c) under the Exchange Act (Lieble *10b5*-*1* Plan). The Lieble *10b5*-*1* Plan provides for the sale of up to 2,417 shares of National Presto common stock between *February 17, 2026*and *February 17, 2027,*so long as the sale price of the common stock is higher than a minimum threshold price specified in the Lieble Rule *10b5*-*1* Plan.
No other officers or directors, as defined in Rule
*16a*-
*1*(f), adopted or terminated a Rule
*10b5*-
*1* trading arrangement or a non-Rule
*10b5*-
*1* trading arrangement, as defined in Regulation S-K Item
*408,* during the fiscal yearended
*December 31, 2025.*
**ITEM 9C.DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**
None.
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**PART III**
**ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**
The following information is provided with regard to the executive officers of the registrant:
(All terms for elected officers are *one* year or until their respective successors are elected.)
| | NAME | | | | TITLE | | | | AGE | | |
| | | | | | |
| Maryjo Cohen | | Chair of the Board, President, and Chief Executive Officer | | 73 | |
| | | | | | |
| Douglas J. Frederick | | Chief Operating Officer, Vice President, Secretary and General Counsel | | 55 | |
| | | | | | |
| Jeffery A. Morgan | | Vice President, Engineering | | 68 | |
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| David J. Peuse | | Chief Financial Officer and Treasurer | | 56 | |
| | | | | | |
| John R. MacKenzie | | Vice President of Sales | | 55 | |
Ms. Cohen became Chair of the Board on *January 1, 2002.*Prior to that date she had been elected Treasurer in *September 1983,*Vice President in *May 1986,*President in *May 1989*and Chief Executive Officer in *May 1994.*She has been associated with the registrant since *1976.* Prior to becoming an officer, she was Associate Resident Counsel and Assistant to the Treasurer.
Mr. Frederick was appointed a Board Director on *May 16, 2023.*Prior to that date he had been elected Corporate Secretary on *November 17, 2009,*Vice President on *May 15, 2018,*and Chief Operating Officer on *December 11, 2018.*He has been associated with the registrant since *2007* as an in-house attorney with expertise in litigation and intellectual property matters and in the capacity of General Counsel since *January 2009.*Prior to his employment with the registrant, Mr. Frederick was a litigation attorney with the firm Rider Bennett, LLP.
Mr. Morgan was elected Vice President of Engineering in *November 2015.*He has been associated with the registrant since *2010.* Prior to becoming an officer, he was Director of Engineering and Chief Engineer.Prior to his employment with the registrant, Mr. Morgan had worked *21* years at Hoover Company, a division of Maytag, and *three* years at Hoovers successor, Techtronic Industries, in engineering and engineering management capacities. Mr. Morgan will be retiring from the Company on *April 30, 2026.*
Mr. Peuse was elected Chief Financial Officer on*November, 20 2025.*Prior to that date,he served the registrant as Treasurer, Director of Financial Reporting, Controller, and in other capacities as Manager of General Accounting, Costing Manager, Business Systems Analyst, and Internal Auditor. Mr. Peuse has been associated with the registrant since *1996.*
Mr. MacKenzie was elected Vice President of Sales on *February 17, 2023.*He has over *20*-years of experience in thehousewares/small applianceindustry, and has held sales and management positions at Applica (Black & Decker), Focus Products, and Joseph Joseph. Prior to becoming an officer, he had most recently served the Company as its Director of Sales and in other capacities as its National Sales Manager and District Sales Manager. Mr. MacKenzie has been associated with the Company since *2016.*
The information under the headings Delinquent Section *16*(a) Reports, Information Concerning Directors and Nominees and Corporate Governance in the Companys Proxy Statement for its 2026 Annual Meeting of Stockholders is incorporated by reference.
The Company has adopted a code of ethics that applies to all Company employees, entitled the Corporate Code of Conduct, which is set forth in the Corporate Governance section of the Companys website located at www.gopresto.com. The Company intends to make all required disclosures concerning any amendments to, or waivers from, its Corporate Code of Conduct by the posting of such information on that section of its website.
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**ITEM 11.EXECUTIVE COMPENSATION**
The information under the headings Compensation Committee Interlocks and Insider Participation, Director Compensation, Executive Compensation and Other Information and Summary Compensation Table in the Companys Proxy Statement for its 2026 Annual Meeting of Stockholders is incorporated by reference.
**ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
The security ownership and related stockholder matters information set forth under the heading Voting Securities and Principal Holders Thereof in the Companys Proxy Statement for its2026 Annual Meeting of Stockholders is incorporated by reference.
**ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**
The certain relationships and related transactions and director independence information set forth under the heading Corporate Governance in the Companys Proxy Statement for its 2026 Annual Meeting of Stockholders is incorporated by reference.
**ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES**
The principal accountant fees and services information set forth under the heading Independent Registered Public Accountants in the Companys Proxy Statement for its 2026 Annual Meeting of Stockholders is incorporated by reference.
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**PART IV**
**ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**
| | (a) | Documents filed as part of this Form 10-K: | | |
| | | | | | Form 10-K | |
| | | | | | Page Reference | |
| | | 1. | Consolidated Financial Statements: | | |
| | | | | | | |
| | | | a. | Consolidated Balance Sheets - December 31, 2025 and 2024 | F-1 & F-2 | |
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| | | | b. | Consolidated Statements of Comprehensive Income - Years ended December 31, 2025, 2024 and 2023 | F-3 | |
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| | | | c. | Consolidated Statements of Cash Flows - Years ended December 31, 2025, 2024 and 2023 | F-4 | |
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| | | | d. | Consolidated Statements of Stockholders Equity - Years ended December 31, 2025, 2024 and 2023 | F-5 | |
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| | | | e. | Notes to Consolidated Financial Statements | F-6 through F-22 | |
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| | | | f. | Reports of Independent Registered Public Accounting Firm | F-23 | |
| | | | | RSM US LLP, Milwaukee, Wisconsin, PCAOB ID #49 | | |
| | | | | | | |
| | | 2. | Consolidated Financial Statement Schedule: | | |
| | | | | | | |
| | | | Schedule II - Valuation and Qualifying Accounts | F-24 | |
| | (b)Exhibits: | | | |
| | | | | |
| | Exhibit Number | | | Description | | |
| | | | | |
| | Exhibit 3(i) | | Restated Articles of Incorporation incorporated by reference from Exhibit 3(i) of the Companys report on Form 10-K/A for the year ended December 31, 2005 | |
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| | Exhibit 3(ii) | | By-Laws - incorporated by reference from Exhibit 3(ii) of the Companys current report on Form 8-K dated July 6, 2007 | |
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| | Exhibit 4 | | Description of Registrants Securities - Incorporated by reference from Exhibit 4 of the Company's annual report on Form 10-K for the year ended December 31, 2019 | |
| | | | | |
| | Exhibit 9.1 | | Voting Trust Agreement - incorporated by reference from Exhibit 9 of the Companys quarterly report on Form 10-Q for the quarter ended July 6, 1997 | |
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| | Exhibit 9.2 | | Voting Trust Agreement Amendment incorporated by reference from Exhibit 9.2 of the Companys annual report on Form 10-K for the year ended December 31, 2008 | |
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| | Exhibit Number | | | Description | | |
| | | | | |
| | Exhibit 10.1* | | Incentive Compensation Plan incorporated by reference from Exhibit 10.1 of the Companys quarterly report on Form 10-Q for the quarter ended July 4, 2010 | |
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| | Exhibit 10.2* | | Form of Restricted Stock Award Agreement incorporated by reference from Exhibit 10.2 of the Companys quarterly report on Form 10-Q for the quarter ended July 4, 2010 | |
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| | Exhibit 10.3* | | 2017 Incentive Compensation Plan incorporated by reference from Exhibit 10.1 of the Companys quarterly report on Form 10-Q for the quarter ended July 2, 2017 | |
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| | Exhibit 10.4* | | Form of Restricted Stock Award Agreement 2017 Incentive Compensation Plan - incorporated by reference from Exhibit 10.2 of the Companys quarterly report on Form 10-Q for the quarter ended July 2, 2017 | |
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| | Exhibit 21 | | Subsidiaries of the Registrant | |
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| | Exhibit 23.1 | | Consent of Independent Registered Public Accounting Firm - RSM US LLP | |
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| | Exhibit 31.1 | | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
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| | Exhibit 31.2 | | Certification of the Chief Financial Officerpursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
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| | Exhibit 32.1 | | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
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| | Exhibit 32.2 | | Certification of the Chief Financial Officerpursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
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| | Exhibit 97 | | Policy for the Recovery of Erroneously Awarded Compensation - incorporated by reference from Exhibit 97 of the Company's annual report on Form 10-K for the year ended December 31, 2023 | |
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| | Exhibit 101.INS | | Inline XBRL Instance Document. | |
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| | Exhibit 101.SCH | | Inline XBRL Taxonomy Extension Schema Document. | |
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| | Exhibit 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
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| | Exhibit 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| | | | | |
| | Exhibit 101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| | | | | |
| | Exhibit 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| | | | | |
| | Exhibit 104 | | The cover page from this Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL and contained in Exhibit 101.INS | |
| | | | | |
| | | | * Compensatory Plans | |
| | | | | |
| | (c)Schedules: | | | |
Reference is made to Item 15(a)2 of this Form 10-K.
**ITEM 16.FORM 10-K SUMMARY**
None.
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**SIGNATURES**
****
Pursuant to the Requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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NATIONAL PRESTO INDUSTRIES, INC. (registrant) |
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By: |
/S/Maryjo Cohen |
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Maryjo Cohen |
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President and Chief Executive Officer |
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Date: March 13, 2026 |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By: |
/S/ Douglas J. Frederick |
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By: |
/S/Patrick J. Quinn |
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Douglas J. Frederick |
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Patrick J. Quinn |
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Chief Operating Officer, Vice President, |
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Director |
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Secretary, General Counsel, and Director |
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By: |
/S/ Maryjo Cohen |
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By: |
/S/Joseph G. Stienessen |
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Maryjo Cohen |
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Joseph G. Stienessen |
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Chair of the Board, President, |
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Director |
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Chief Executive Officer (Principal |
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Executive Officer), and Director |
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By: |
/S/ Randy F. Lieble |
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By: |
/S/ David J. Peuse |
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Randy F. Lieble |
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David J. Peuse |
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Director |
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Treasurer and Chief Financial Officer (Principal |
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Financial Officer) |
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Date: |
March 13, 2026 |
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**NATIONAL PRESTO INDUSTRIES, INC.**
**CONSOLIDATED BALANCE SHEETS**
(Dollars in thousands except share and per share data)
| December 31 | | 2025 | | | 2024 | | |
| ASSETS | | | | | | | | | | | | | | | | | |
| CURRENT ASSETS: | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | | | | | $ | 3,252 | | | | | | | $ | 17,663 | | |
| Marketable securities | | | | | | | 503 | | | | | | | | 5,010 | | |
| Accounts receivable | | $ | 85,282 | | | | | | | $ | 62,506 | | | | | | |
| Less allowance for doubtful accounts | | | 243 | | | | 85,039 | | | | 217 | | | | 62,289 | | |
| Inventories: | | | | | | | | | | | | | | | | | |
| Finished goods | | | 32,272 | | | | | | | | 38,351 | | | | | | |
| Work in process | | | 249,741 | | | | | | | | 219,154 | | | | | | |
| Raw materials and supplies | | | 24,960 | | | | 306,973 | | | | 20,494 | | | | 277,999 | | |
| Notes receivable, current | | | | | | | 208 | | | | | | | | 600 | | |
| Income tax receivable | | | | | | | 3,959 | | | | | | | | - | | |
| Other current assets | | | | | | | 3,129 | | | | | | | | 3,100 | | |
| Total current assets | | | | | | | 403,063 | | | | | | | | 366,661 | | |
| PROPERTY, PLANT AND EQUIPMENT: | | | | | | | | | | | | | | | | | |
| Land and land improvements | | | 4,382 | | | | | | | | 3,622 | | | | | | |
| Buildings | | | 80,716 | | | | | | | | 57,581 | | | | | | |
| Machinery and equipment | | | 53,400 | | | | | | | | 53,331 | | | | | | |
| | | | 138,498 | | | | | | | | 114,534 | | | | | | |
| Less allowance for depreciation and amortization | | | 74,562 | | | | 63,936 | | | | 71,297 | | | | 43,237 | | |
| GOODWILL | | | | | | | 19,433 | | | | | | | | 19,433 | | |
| INTANGIBLE ASSETS, net | | | | | | | 2,262 | | | | | | | | 3,777 | | |
| RIGHT-OF-USE LEASE ASSETS | | | | | | | 9,441 | | | | | | | | 9,962 | | |
| DEFERRED INCOME TAXES | | | | | | | 2,594 | | | | | | | | 10,327 | | |
| | | | | | | $ | 500,729 | | | | | | | $ | 453,397 | | |
The accompanying notes are an integral part of the Consolidated Financial Statements.
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**NATIONAL PRESTO INDUSTRIES, INC.**
**CONSOLIDATED BALANCE SHEETS**
(Dollars in thousands except share and per share data)
| December 31 | | 2025 | | | 2024 | | |
| LIABILITIES | | | | | | | | | | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | |
| Accounts payable | | | | | | $ | 45,956 | | | | | | | $ | 44,625 | | |
| Line of credit | | | | | | | 23,624 | | | | | | | | - | | |
| Federal and state income taxes | | | | | | | - | | | | | | | | 4,680 | | |
| Lease liabilities | | | | | | | 516 | | | | | | | | 564 | | |
| Accrued liabilities | | | | | | | 24,855 | | | | | | | | 24,567 | | |
| Total current liabilities | | | | | | | 94,951 | | | | | | | | 74,436 | | |
| LEASE LIABILITIES - NON-CURRENT | | | | | | | 8,925 | | | | | | | | 9,397 | | |
| FEDERAL AND STATE INCOME TAXES - NON-CURRENT | | | | | | | 1,718 | | | | | | | | 1,937 | | |
| Total liabilities | | | | | | | 105,594 | | | | | | | | 85,770 | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | |
| Common stock, $1 par value: | | | | | | | | | | | | | | | | | |
| Authorized: 12,000,000 shares at December 31, 2025 and 2024 | | | | | | | | | | | | | | | | | |
| Issued: 7,440,518 shares at December 31, 2025 and 2024 | | | | | | | | | | | | | | | | | |
| Outstanding: 7,123,717 and 7,105,595 shares at December 31, 2025 and 2024, respectively | | $ | 7,441 | | | | | | | $ | 7,441 | | | | | | |
| Paid-in capital | | | 18,426 | | | | | | | | 17,298 | | | | | | |
| Retained earnings | | | 379,599 | | | | | | | | 353,659 | | | | | | |
| Accumulated other comprehensive income | | | 6 | | | | | | | | 35 | | | | | | |
| | | | 405,472 | | | | | | | | 378,433 | | | | | | |
| Less treasury stock, at cost, 316,801and 334,923 shares at December 31, 2025 and 2024, respectively | | | 10,337 | | | | | | | | 10,806 | | | | | | |
| Total stockholders' equity | | | | | | | 395,135 | | | | | | | | 367,627 | | |
| | | | | | | $ | 500,729 | | | | | | | $ | 453,397 | | |
The accompanying notes are an integral part of the Consolidated Financial Statements.
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**NATIONAL PRESTO INDUSTRIES, INC.**
**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**
(In thousands except per share data)
| | | For the years ended December 31, | | |
| | | 2025 | | | 2024 | | | 2023 | | |
| Net sales | | $ | 503,524 | | | $ | 388,228 | | | $ | 340,912 | | |
| Cost of sales | | | 423,199 | | | | 309,662 | | | | 273,460 | | |
| Gross profit | | | 80,325 | | | | 78,566 | | | | 67,452 | | |
| Selling and general expenses | | | 35,868 | | | | 31,838 | | | | 30,784 | | |
| Intangibles amortization | | | 1,515 | | | | 1,515 | | | | 1,635 | | |
| Impairment of vendor deposit | | | 2,701 | | | | - | | | | - | | |
| Operating profit | | | 40,241 | | | | 45,213 | | | | 35,033 | | |
| Other income | | | 1,878 | | | | 5,457 | | | | 7,398 | | |
| Earnings before provision for income taxes | | | 42,119 | | | | 50,670 | | | | 42,431 | | |
| Provision for income taxes | | | 9,035 | | | | 9,210 | | | | 7,872 | | |
| Net earnings | | $ | 33,084 | | | $ | 41,460 | | | $ | 34,559 | | |
| | | | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | |
| Basic and diluted | | | 7,147 | | | | 7,128 | | | | 7,106 | | |
| | | | | | | | | | | | | | |
| Earnings per share, basic and diluted: | | | | | | | | | | | | | |
| Net earnings per share | | $ | 4.63 | | | $ | 5.82 | | | $ | 4.86 | | |
| | | | | | | | | | | | | | |
| Comprehensive income: | | | | | | | | | | | | | |
| Net earnings | | $ | 33,084 | | | $ | 41,460 | | | $ | 34,559 | | |
| Other comprehensive income, net of tax: | | | | | | | | | | | | | |
| Unrealized gain (loss) on available-for-sale securities, net of tax | | | (29 | ) | | | 13 | | | | 125 | | |
| Comprehensive income | | $ | 33,055 | | | $ | 41,473 | | | $ | 34,684 | | |
The accompanying notes are an integral part of the Consolidated Financial Statements.
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**NATIONAL PRESTO INDUSTRIES, INC.**
**CONSOLIDATED STATEMENTS OF CASH FLOWS**
****(In Thousands)
****
| | | For the years ended December 31, | | |
| | | 2025 | | | 2024 | | | 2023 | | |
| Cash flows from operating activities: | | | | | | | | | | | | | |
| Net earnings | | $ | 33,084 | | | $ | 41,460 | | | $ | 34,559 | | |
| Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | | | | | | | | | |
| Provision for depreciation | | | 3,621 | | | | 3,531 | | | | 4,372 | | |
| Intangibles amortization | | | 1,515 | | | | 1,515 | | | | 1,635 | | |
| Deferred income tax (benefit) | | | 7,741 | | | | (4,528 | ) | | | (1,190 | ) | |
| Provision for doubtful notes and accounts receivable | | | 66 | | | | (285 | ) | | | 285 | | |
| (Gain) loss on disposal of property, plant and equipment | | | 13 | | | | - | | | | (7 | ) | |
| Loss on impairment of vendor deposit | | | 2,701 | | | | - | | | | - | | |
| Noncash retirement plan expense | | | 1,008 | | | | 904 | | | | 863 | | |
| Gain on sale of subsidiary | | | (253 | ) | | | - | | | | (351 | ) | |
| Other | | | 230 | | | | 856 | | | | 591 | | |
| Changes in operating accounts: | | | | | | | | | | | | | |
| Accounts receivable, net | | | (22,902 | ) | | | (13,277 | ) | | | 20,337 | | |
| Inventories | | | (29,028 | ) | | | (87,579 | ) | | | (38,627 | ) | |
| Other assets and current assets | | | (28 | ) | | | 2,122 | | | | 2,137 | | |
| Accounts payable and accrued liabilities | | | 1,734 | | | | 390 | | | | 18,288 | | |
| Federal and state income taxes payable | | | (8,639 | ) | | | 1,465 | | | | 2,497 | | |
| Net cash provided by (used in) operating activities | | | (9,137 | ) | | | (53,426 | ) | | | 45,389 | | |
| | | | | | | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | | | | | | |
| Marketable securities purchased | | | - | | | | (5,432 | ) | | | (47,709 | ) | |
| Marketable securities - maturities and sales | | | 4,477 | | | | 26,891 | | | | 46,243 | | |
| Purchase of property, plant and equipment | | | (27,034 | ) | | | (7,531 | ) | | | (1,840 | ) | |
| Proceeds from notes receivable | | | 403 | | | | 1,037 | | | | 627 | | |
| Proceeds from sale of subsidiary | | | 278 | | | | - | | | | 2,000 | | |
| Proceeds from insurance claim | | | - | | | | - | | | | 232 | | |
| Net cash provided by (used in) investing activities | | | (21,876 | ) | | | 14,965 | | | | (447 | ) | |
| | | | | | | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | | | | | | |
| Proceeds from line of credit | | | 192,563 | | | | 8,000 | | | | - | | |
| Payments on line of credit | | | (168,939 | ) | | | (8,000 | ) | | | - | | |
| Dividends paid | | | (7,142 | ) | | | (32,029 | ) | | | (28,385 | ) | |
| Proceeds from sale of treasury stock | | | 120 | | | | 513 | | | | 429 | | |
| Other | | | - | | | | (17 | ) | | | (40 | ) | |
| Net cash provided by (used in) financing activities | | | 16,602 | | | | (31,533 | ) | | | (27,996 | ) | |
| | | | | | | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | (14,411 | ) | | | (69,994 | ) | | | 16,946 | | |
| Cash and cash equivalents at beginning of year | | | 17,663 | | | | 87,657 | | | | 70,711 | | |
| Cash and cash equivalents at end of year | | $ | 3,252 | | | $ | 17,663 | | | $ | 87,657 | | |
| | | | | | | | | | | | | | |
| Supplemental disclosures of cash flow information: | | | | | | | | | | | | | |
| Cash paid during the year for: | | | | | | | | | | | | | |
| Income Taxes | | | 10,184 | | | | 11,971 | | | | 6,837 | | |
| Interest on line of credit | | | 832 | | | | 2 | | | | - | | |
****
The accompanying notes are an integral part of the Consolidated Financial Statements.
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**NATIONAL PRESTO INDUSTRIES, INC.**
**CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY**
(In thousands except per share data)
| | | Shares of Common Stock Outstanding | | | Common Stock | | | Paid-in Capital | | | Retained Earnings | | | Accumulated Comprehensive Income (Loss) | | | Treasury Stock | | | Total | | |
| Balance December 31, 2022 | | | 7,063 | | | $ | 7,441 | | | $ | 14,799 | | | $ | 338,071 | | | $ | (103 | ) | | $ | (12,156 | ) | | $ | 348,052 | | |
| Net earnings | | | | | | | | | | | | | | | 34,559 | | | | | | | | | | | | 34,559 | | |
| Unrealized gain on available-for-sale securities, net of tax | | | | | | | | | | | | | | | | | | | 125 | | | | | | | | 125 | | |
| Dividends paid March 15, $1.00 per share regular, $3.00 per share extra | | | | | | | | | | | | | | | (28,385 | ) | | | | | | | | | | | (28,385 | ) | |
| Other | | | 19 | | | | | | | | 1,232 | | | | - | | | | | | | | 673 | | | | 1,905 | | |
| Balance December 31, 2023 | | | 7,082 | | | | 7,441 | | | | 16,031 | | | | 344,245 | | | | 22 | | | | (11,483 | ) | | | 356,256 | | |
| Net earnings | | | | | | | | | | | | | | | 41,460 | | | | | | | | | | | | 41,460 | | |
| Unrealized gain on available-for-sale securities, net of tax | | | | | | | | | | | | | | | | | | | 13 | | | | | | | | 13 | | |
| Dividends paid March 15, $1.00 per share regular, $3.50 per share extra | | | | | | | | | | | | | | | (32,029 | ) | | | | | | | | | | | (32,029 | ) | |
| Other | | | 23 | | | | | | | | 1,267 | | | | (17 | ) | | | | | | | 677 | | | | 1,927 | | |
| Balance December 31, 2024 | | | 7,105 | | | | 7,441 | | | | 17,298 | | | | 353,659 | | | | 35 | | | | (10,806 | ) | | | 367,627 | | |
| Net earnings | | | | | | | | | | | | | | | 33,084 | | | | | | | | | | | | 33,084 | | |
| Unrealized loss on available-for-sale securities, net of tax | | | | | | | | | | | | | | | | | | | (29 | ) | | | | | | | (29 | ) | |
| Dividends paid March 15, $1.00 per share regular | | | | | | | | | | | | | | | (7,142 | ) | | | | | | | | | | | (7,142 | ) | |
| Other | | | 18 | | | | | | | | 1,128 | | | | (2 | ) | | | | | | | 469 | | | | 1,595 | | |
| Balance December 31, 2025 | | | 7,123 | | | $ | 7,441 | | | $ | 18,426 | | | $ | 379,599 | | | $ | 6 | | | $ | (10,337 | ) | | $ | 395,135 | | |
The accompanying notes are an integral part of the Consolidated Financial Statements.
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**NATIONAL PRESTO INDUSTRIES, INC.**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
****
**A.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:**
****
(*1*)USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:In preparation of the Company's Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and related revenues and expenses.Actual results could differ from the estimates used by management.
(*2*)BASIS OF PRESENTATION:The Consolidated Financial Statements include the accounts of National Presto Industries, Inc. and its subsidiaries, all of which are wholly-owned.All material intercompany accounts and transactions are eliminated.For a further discussion of the Company's business and the segments in which it operates, please refer to Note L.
(*3*)FAIR VALUE OF FINANCIAL INSTRUMENTS:The Company utilizes the methods of determining fair value as described in Financial Accounting Standard Board (FASB) Accounting Standard Codification (ASC) *820,* *Fair Value Measurements and Disclosures* to value its financial assets and liabilities. ASC *820* utilizes a *three*-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers include: Level *1,* defined as observable inputs such as quoted prices in active markets; Level *2,* defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level *3,* defined as unobservable inputs in which little or *no* market data exists, therefore requiring an entity to develop its own assumptions.
The carrying amount for cash and cash equivalents, accounts receivable, notes receivable, accounts payable, line of credit, and certain accrued liabilities approximates fair value due to the immediate or short-term maturity of these financial instruments.The fair value of marketable securities are discussed in Note A(*6*).
(*4*) CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES:
**Cash and Cash Equivalents:**The Company considers all highly liquid marketable securities with an original maturity of *three* months or less to be cash equivalents.Cash equivalents include money market funds.The Company deposits its cash in high quality financial institutions. The balances, at times, *may*exceed federally insured limits.Money market funds are reported at fair value determined using quoted prices in active markets for identical securities (Level *1,* as defined by FASB ASC *820*).
The Company's cash management policy provides for its bank disbursement accounts to be reimbursed on a daily basis.Checks issued but *not* presented to the bank for payment of $6,603,000 and $3,067,000 at *December 31, 2025*and *2024*, respectively, are included as reductions of cash and cash equivalents or book overdrafts in accounts payable, as appropriate.
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**Marketable Securities:**The Company has classified all marketable securities as available-for-sale which requires the securities to be reported at fair value, with unrealized gains and losses, net of tax, reported as a separate component of stockholders' equity.
At *December 31, 2025*and *2024*, cost for marketable securities was determined using the specific identification method.A summary of the amortized costs and fair values of the Company's marketable securities at *December 31*is shown in the following table.All of the Companys marketable securities are classified as Level *2,* as defined by FASB ASC *820,* with fair values determined using significant other observable inputs, which include quoted prices in markets that are *not* active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable.
| | | (In thousands) | | |
| | | MARKETABLE SECURITIES | | |
| | | | | | | | | | | | | | | | | | |
| | | Amortized Cost | | | Fair Value | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | |
| December 31, 2025 | | | | | | | | | | | | | | | | | |
| Certificates of Deposit | | | 496 | | | | 503 | | | | 7 | | | | - | | |
| Total Marketable Securities | | $ | 496 | | | $ | 503 | | | $ | 7 | | | $ | - | | |
| | | | | | | | | | | | | | | | | | |
| December 31, 2024 | | | | | | | | | | | | | | | | | |
| Certificates of Deposit | | | 4,965 | | | | 5,010 | | | | 45 | | | | - | | |
| Total Marketable Securities | | $ | 4,965 | | | $ | 5,010 | | | $ | 45 | | | $ | - | | |
Proceeds from sales and maturities of marketable securities totaled $4,477,000 in *2025*, $26,891,000 in *2024*, and $46,243,000 in *2023*.There were no realized gross gains or losses related to sales of marketable securities during the years ended *December 31, 2025,**2024* and *2023*.Net unrealized gains (losses) included in other comprehensive income were ($37,000), $17,000and$158,000before taxes for the years ended *December 31, 2025*, *2024*, and *2023*, respectively. No unrealized gains or losses were reclassified out of accumulated other comprehensive income during the same periods.
The contractual maturities of the marketable securities held at *December 31, 2025* are as follows: $496,000 within *one* year.
(*5*)ACCOUNTS RECEIVABLE:The Company's accounts receivable is related to sales of products.Credit is extended based on prior experience with the customer and evaluation of customers' financial condition.Accounts receivable are primarily due within 25 to 60 days.The Company does *not* accrue interest on past due accounts receivable.Receivables are written off only after all collection attempts have failed and are based on individual credit evaluation and the specific circumstances of the customer. The Company maintains an allowance for estimated expected credit losses resulting from the inability of customers to meet their financial obligations to the Company. The allowanceis determined based on the Company's historical collection experience, adverse situations that *may*affect the customer's ability to pay, and prevailing economic conditions. The Company also maintains an allowance for customer chargebacks, which is determined based on the Company's historical experience with customers.
(*6*)INVENTORIES:Housewares/Small Appliance and Safety segmentfinished goods inventoriesare stated at the lower of cost or marketwith cost being determined principally on the last-in, *first*-out (LIFO) method.Defense segment inventories are stated at the lower of cost and net realizable value determined principally on the *first*-in, *first*-out (FIFO) method.Inventoried costs relating to contracts in progress are stated at actual production costs, including factory overhead, initial tooling, and other related costs incurred to date, reduced by amounts associated with recognized sales, utilizing a standard costing type method.The Company evaluates inventories to determine if there are any excess or obsolete inventories on hand.
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(*7*)PROPERTY, PLANT AND EQUIPMENT:Property, plant and equipment are stated at cost.Straight-line depreciation is primarily provided in amounts sufficient to charge the costs of depreciable assets to operations over their service lives which are estimated at 15 to 40 years for buildings, 3 to 10 years for machinery and equipment, and 15 to 20 years for land improvements.The Company reviews long-lived assets consisting principally of property, plant, and equipment, for impairment when material events and changes in circumstances indicate the carrying value *may**not* be recoverable. As of *December 31, 2025*, net property, plant and equipment included $5,855,000 related to leased manufacturing and office space. See Note M. Approximately $558,000 and $5,354,000 of construction in progress in the Companys Defense segment is presented on the Consolidated Balance Sheet as Buildings, at *December 31, 2025*and*2024*, respectively.
Depreciationexpense was $3,621,000,$3,531,000, and $4,372,000 during the years ended *December 31, 2025*, *2024*, and *2023*, respectively.
(*8*)GOODWILL:The Company recognizes the excess cost of acquired entities over the net amount assigned to the fair value of assets acquired and liabilities assumed as goodwill. Goodwill is tested for impairment on an annual basis at the start of the *fourth* quarter and between annual tests whenever an impairment is indicated, such as the occurrence of an event that would more likely than *not* reduce the fair value of the reporting unit below its carrying amount.Impairment losses are recognized when the carrying value of the reporting unit is greater than the fair value of the reporting unit.There was no goodwill impairment recognized during *2025*, *2024*, and *2023*. Total accumulated goodwill impairment losses were $3,382,000 as of *December 31, 2025*.
The Company's goodwill was $19,433,000as of *December 31, 2025*and*2024*, all of whichrelatedto the Defensesegment, $7,948,000of which is non-deductible for income tax purposes. There have been no additions orimpairments recognized for goodwill in the Defense segment for the years then ended.
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(*9*) INTANGIBLE ASSETS:Intangible assets are attributable to the Defense and Safety segments,primarily consist of the valueof contracts/customer relationships, trademarks and safety certifications, trade secrets, and technology software,and are amortized on a straight-line basis that approximates economic use, over periods ranging from 2 to 15 years with the exception of trade secrets which have an indefinite life.
Intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets *may**not* be recoverable. The Company utilizesdiscounted cash flow modelsto determine theirfair values. There wasno impairmentof intangible assets recognized during *2025*and*2024*.
The following shows the gross carrying amounts of the intangible assets and accumulated amortizationat*December 31, 2025*and*2024*:
| | | (In thousands) | | |
| | | INTANGIBLE ASSETS | | |
| | | Technology Software and Other | | | Contracts/ Customer Relationships | | | Trade Secrets | | | Total | | |
| December 31, 2025 | | | | | | | | | | | | | | | | | |
| Gross Carrying Amount | | $ | 290 | | | $ | 6,058 | | | $ | 1,000 | | | $ | 7,348 | | |
| Accumulated Amortization | | | (290 | ) | | | (4,796 | ) | | | - | | | | (5,086 | ) | |
| Net intangible assets | | $ | - | | | $ | 1,262 | | | $ | 1,000 | | | $ | 2,262 | | |
| | | | | | | | | | | | | | | | | | |
| December 31, 2024 | | | | | | | | | | | | | | | | | |
| Gross Carrying Amount | | $ | 290 | | | $ | 6,058 | | | $ | 1,000 | | | $ | 7,348 | | |
| Accumulated Amortization | | | (290 | ) | | | (3,281 | ) | | | - | | | | (3,571 | ) | |
| Net intangible assets | | $ | - | | | $ | 2,777 | | | $ | 1,000 | | | $ | 3,777 | | |
The Company estimates it will record amortization expense for the succeeding years as follows:
| Years ending December 31: | | (In thousands) | | |
| 2026 | | $ | 1,262 | | |
| | | $ | 1,262 | | |
Amortization expense was $1,515,000,$1,515,000, and $1,635,000 during the years ended *December 31, 2025*, *2024*, and *2023*, respectively.
(*10*) OTHER ASSETS: Other assets includes prepayments and deposits that are made from time to time by the Company for certain materials used in the manufacturing process in the Housewares/Small Appliance and Safetysegments.As of *December 31, 2025*and *2024*, $2,009,000 and $2,929,000 of such prepayments, respectively, remained unused and outstanding, andare included in Other Current Assets, representing the Companys best estimate of the expected utilization of the prepayments and related materials during the *twelve*-month periods following those dates.
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(*11*) REVENUES: The Companys revenues are derived from short-term contracts and programs that are typically completed within 3 to 42months and are recognized in accordance with ASC Topic *606,* *Revenue from Contracts with Customers*. The Companys contracts generallycontain *one* or more performance obligations: the physical delivery of distinct ordered product or products.The Company provides an assurance type product warranty on its products to the original owner.In addition, for the Housewares/Small Appliances segment, the Company estimates returns of seasonal products and returns of newly introduced products sold with a return privilege.Stand-alone selling prices are set forth in each contract and are used to allocate revenue to the corresponding performance obligations.For the Housewares/Small Appliances segment, contracts include variable consideration, as the prices are subject to customer allowances, which principally consist of allowances for cooperative advertising, defective product, and trade discounts.Customer allowances are generally allocated to the performance obligations based on budgeted rates agreed upon with customers, as well as historical experience, and yield the Companys best estimate of the expected value for the variable consideration.
The Company's contracts in the Defense segment are primarily with the U.S. Department of Defense (DOD) and DOD prime contractors. As a consequence, this segment's business essentially depends on the product needs and governmental funding of the DOD. Substantially all of the work performed by the Defense segment directly or indirectly for the DOD is performed on a fixed-price basis. Under fixed-price contracts, the price paid to the contractor is awarded based on competition or negotiation at the outset of the contract and therefore, with the exception of limited escalation provisions on specific materials, is generally *not* subject to any adjustments reflecting the actual costs incurred by the contractor.
For the Housewares/Small Appliance and Safety segments, revenue is generally recognized as the completed, ordered product is shipped to the customer from the Companys warehouses.For the situations in which revenue should be recognized when product is received by the customer, the Company adjusts revenue accordingly.For the Defense segment, revenue is primarily recognized when the customer has legal title and formally documents that it has accepted the products. There are also certain termination clauses in Defense segment contracts that *may*give rise to an over-time pattern of recognition of revenue in the absence of alternative use of the product.
The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, and customer advances and deposits (contract liabilities) on the CompanysConsolidated Balance Sheets. For the Defense segment, the Company occasionally receives advances or deposits from certain customers before revenue is recognized, resulting in contract liabilities.These advances or deposits do *not* represent a significant financing component.As of *December 31, 2025*and *2024*, $9,230,000 and $7,345,000, respectively, of contract liabilities were included in Accrued Liabilitieson the CompanysConsolidated Balance Sheets. During *2025,* *2024,* and *2023*, the Company recognized revenue of $7,110,000, $9,564,000and $326,000,respectively, that was included in the Defense segment contract liability at the beginning of those respectiveyears. The Company monitors its estimates of variable consideration, which includes customer allowances for cooperative advertising, defective product, and trade discounts, and returns of seasonal and newly introduced product, all of which pertain to the Housewares/Small Appliances segment, and periodically makes cumulative adjustments to the carrying amounts of these contract liabilities as appropriate.During*2025,* *2024,* and *2023*,there were *no* material adjustments to the aforementioned estimates.There were *no* material amounts of revenue recognized during the same periods related to performance obligations satisfied in a previous period.The portion of contract transaction prices allocated to unsatisfied performance obligations, also known as the contract backlog, in the Companys Defense segment were $1,747,809,000 and $1,085,612,000 as of *December 31, 2025*and *2024*, respectively.The Company anticipates that the unsatisfied performance obligations will be fulfilled in an 18- to 42-month period.The performance obligations in the Housewares/Small Appliances and Safety segments have original expected durations of less than *one* year.
The Companys principal sources of revenue are derived from *two* segments: Housewares/Small Appliance and Defense, as shown in Note L. Management utilizes the performance measures by segment to evaluate the financial performance of and make operating decisions for the Company.
(*12*) ADVERTISING:The Company's policy is to expense advertising as incurred and include it in selling and general expenses.Advertising expense was $73,000, $251,000 and$226,000 in *2025,* *2024,* and *2023*, respectively.
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(*13*) PRODUCT WARRANTY:The Companys Housewares/Small Appliance segment'sproducts are generally warranted to the original owner to be free from defects in material and workmanship for a period of 1 to 12 years from date of purchase.The Company allows a 60-day over-the-counter initial return privilege through cooperating dealers.The Company services its products through a corporate service repair operation.The Company estimates its product warranty liability based on historical percentages which have remained relatively consistent over the years.
The product warranty liability is included in accounts payable on the balance sheet.The following table shows the changes in product warranty liability for the period:
| | | (In thousands) | | |
| | | Year Ended December 31 | | |
| | | 2025 | | | 2024 | | |
| Beginning balance January 1 | | $ | 88 | | | $ | 366 | | |
| Accruals during the period | | | 3,670 | | | | 1,021 | | |
| Charges / payments made under the warranties | | | (3,271 | ) | | | (1,299 | ) | |
| Balance December 31 | | $ | 487 | | | $ | 88 | | |
(*14*) STOCK-BASED COMPENSATION:The Company accounts for stock-based compensation in accordance with ASC *718,* *Compensation Stock Compensation*.Under the fair value recognition provisions of ASC *718,* stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, net of estimated forfeitures. As more fully described in Note F, the Company awards non-vested restricted stock to employees and executive officers.
(*15*) INCOME TAXES:Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws.The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year.The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. Valuation allowances are provided for deferred tax assets when it is considered more likely than *not* that the Company will *not* realize the benefit of such assets. Income tax contingencies are accounted for in accordance with FASB ASC *740,* *Income Taxes*.See Note H for summaries of the provision, the effective tax rates, and the tax effects of the cumulative temporary differences resulting in deferred tax assets and liabilities. The Company evaluates its uncertain tax positions as new information becomes available.
(*16*) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS: The Company assesses the impacts of adopting recently issued accounting standards by the Financial Accounting Standards Board on the Company's financial statements, and updates previous assessments, as necessary, from the Company's Yearly Report on Form *10*-Kfor the yearended*December 31, 2025*.
In *December 2023,*the FASB issued ASU *2023*-*09,* Income Taxes (Topic *740*): Improvements to Income Tax Disclosures, which requires disaggregated information about a companys effective tax rate reconciliation and provision for income taxes, as well as information on income taxes paid. ASU *2023*-*09* is effective for public business entities for annual periods beginning after *December 15, 2024.*The Company adopted this ASU during the year ended *December 31, 2025,*resulting in additional income taxdisclosures.
In *November 2024,*the FASB issued ASU *2024*-*03,* Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic *220*-*40*): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. ASU *2024*-*03* does *not* change the expense captions an entity presents on the face of the income statement rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU *No.* *2025*-*01,* Income StatementReporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic *220*-*40*): Clarifying the Effective Date, the provisions of ASU *2024*-*03* are effective for fiscal years beginning after *December 15, 2026,*and interim periods within fiscal years beginning after *December 15, 2027,*with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, the Company does*not* expect the adoption of ASU *2024*-*03* willhave a material effect on itsconsolidated financial statements taken as a whole.
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**B.INVENTORIES:**
The amount of inventories valued on the LIFO basis was $31,493,000 and $35,301,000 as of *December 31, 2025*and *2024*, respectively, and consists of Housewares/Small Appliance finished goods, as well as,certain Safety segment inventories as of*December 31, 2025*.Under LIFO, inventories are valued at approximately $12,827,000 and $6,901,000 below current cost determined on a *first*-in, *first*-out (FIFO) basis at *December 31, 2025*and *2024*, respectively.During the years ended *December 31, 2025*, *2024*, and *2023*, $4,199,000, $703,000and $3,575,000, respectively, ofLIFO layers wereliquidated.The Company uses the LIFO method of inventory accounting to improve the matching of costs and revenues for the Housewares/Small Appliance and Safety segments.
The following table describes that which would have occurred if LIFO inventories had been valued at current cost determined on a FIFO basis:
| Increase (Decrease) (In thousands, except per share data) | | |
| Year | | Cost of Sales | | | Net Earnings | | | Earnings Per Share | | |
| 2025 | | $ | (5,926 | ) | | $ | 4,735 | | | $ | 0.66 | | |
| 2024 | | $ | 2,576 | | | $ | (2,053 | ) | | $ | (0.29 | ) | |
| 2023 | | $ | (228 | ) | | $ | 186 | | | $ | 0.03 | | |
This information is provided for comparison with companies using the FIFO basis.
Inventory for the Defense segment, certain products for the Safety segment,andraw materials and certain prepaid products of the Housewares/Small Appliance segmentare valued under the FIFO method and total $275,480,000 and $242,699,000 at *December 31, 2025*and *2024*, respectively.At *December 31, 2025*, the FIFO total was comprised of $779,000of finished goods, $249,741,000 of work in process, and $24,960,000 of raw material.At *December 31, 2024*, the FIFO total was comprised of $3,051,000 of finished goods, $219,154,000 of work in process, and $20,494,000 of raw material.
********
**C.ACCRUED LIABILITIES:******
At *December 31, 2025*, accrued liabilities consisted of payroll $8,532,000, contract liabilities $9,230,000 (see Note A(*13*)), product liability $5,029,000,payroll taxes $293,000, environmental $925,000, and other $847,000.At *December 31, 2024*, accrued liabilities consisted of payroll $9,761,000, contract liabilities $7,345,000 (see Note A(*13*)), product liability $4,982,000,payroll taxes $361,000, environmental $925,000, and other $1,192,000. ** **
The Company is self-insured for health care costs, although it does carry stop loss and other insurance to cover health care claims once they reach a specified threshold. The Company is also subject to product liability claims in the normal course of business.It is partly self-insured for product liability claims, and therefore records an accrual for known claims and estimated incurred but unreported claims in the Companys Consolidated Financial Statements.The Company utilizes historical trends and other analysis to assist in determining the appropriate accrual.An increase in the number or magnitude of claims could have a material impact on the Companys financial condition and results of operations. The Company's policy is to accrue for legal fees expected to be incurred in connection with loss contingencies. See Note K for a discussion of environmental remediation liabilities.
**D.TREASURY STOCK:**
As of *December 31, 2025*, the Company has authority from the Board of Directors to reacquire an additional 495,030shares.During *2025,* *2024,* and *2023*, 1,567, 415, and 569shares, respectively, were acquired from participants in the Companys Incentive Compensation Plans described in Note F to cover those participants tax withholding obligations related to vested stock grants in accordance with the Plans rules.Treasury shares have been used for stock based compensation and to fund a portion of the Company's *401*(k) contributions.
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**E.NET EARNINGS PER SHARE:**
Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period.Diluted earnings per share also includes the dilutive effect of additional potential common shares issuable.Unvested stock awards, which contain non-forfeitable rights to dividends, whether paid or unpaid (participating securities), are included in the number of shares outstanding for both basic and diluted earnings per share calculations.
**F.STOCK-BASED COMPENSATION:**
The Company, from time to time, enters into separate non-vested share-based payment arrangements with employees and executive officers under the Incentive Compensation Plan approved by stockholders on *May 18, 2010*and the *2017* Incentive Compensation Plan approved by shareholders on *May 16, 2017,*which authorized50,000 and 150,000 shares, respectively, to be available for grants. The *2017* plan replaced the original *2010* plan, and the shares remaining under the *2010* plan are no longer available for grant. The Compensation Committee of the Companys Board of Directors approves all stock-based compensation awards for employees and executive officers of the Company.The Company grants restricted stock that is subject to continued employment and vesting conditions, but has dividend and voting rights, and uses the fair-market value of the Companys common stock on the grant date to measure the fair value of the awards.The fair value of restricted stock is recognized as expense ratably over the requisite serviceperiod, net of estimated forfeitures.
During *2025,* *2024,* and *2023*, the Company granted 7,444shares, 4,228shares, and 1,487shares of restricted stock, respectively, to 30employees and executive officers of the Company.Unless otherwise vested early in accordance with the Incentive Compensation Plans, the restricted stock vests on specified dates in *2026*through *2030,* subject to the recipients continued employment or service through each applicable vesting date.
The Company recognized pre-tax compensation expense in the Consolidated Statements of Comprehensive Income related to stock-based compensation of $575,000, $491,000, and $613,000 in *2025,* *2024,* and *2023*, respectively. As of *December 31, 2025*, there was approximately $1,127,000of unrecognized compensation cost related to the restricted stock awards that is expected to be recognized over a weighted-average period of 3.3years.There were 7,844, 3,234, and 4,109shares of restricted stock that vested during *2025,* *2024,* and *2023*, respectively.
The following table summarizes the activity for non-vested restricted stock:
| | | 2025 | | | 2024 | | | 2023 | | |
| | | Shares | | | Weighted Average Fair Value at Grant Date | | | Shares | | | Weighted Average Fair Value at Grant Date | | | Shares | | | Weighted Average Fair Value at Grant Date | | |
| Non-vested at beginning of period | | | 30,665 | | | $ | 83.60 | | | | 29,671 | | | $ | 88.37 | | | | 32,336 | | | $ | 89.49 | | |
| Granted | | | 7,444 | | | | 99.97 | | | | 4,228 | | | | 78.78 | | | | 1,487 | | | | 77.03 | | |
| Vested | | | (7,844 | ) | | | 89.75 | | | | (3,234 | ) | | | 121.11 | | | | (4,109 | ) | | | 68.46 | | |
| Forfeited | | | - | | | | - | | | | - | | | | - | | | | (43 | ) | | | 93.29 | | |
| Non-vested at end of period | | | 30,265 | | | $ | 86.03 | | | | 30,665 | | | $ | 83.60 | | | | 29,671 | | | $ | 88.37 | | |
**G.401(K) PLAN:******
The Company sponsors a *401*(k) retirement plan that covers substantially all non-union employees. Historically, the Company matched up to 50% of the *first* 4% of salary contributed by employees to the plan. This matching contribution was made with common stock. Starting in *2004,* the Company began to match, in cash, an additional 50% of the *first* 4% of salary contributed by employees plus 3% of total compensation for certain employees. Contributions made from treasury stock, including the Company's related cash dividends, totaled $1,129,000 in *2025*, $1,417,000 in *2024*, and $1,292,000 in *2023*. In addition, the Company made cash contributions of $1,074,000 in *2025*, $978,000 in *2024*, and $936,000 in *2023* to the *401*(k) Plan.The Company also contributed $387,000, $392,000, and $417,000 to the *401*(k) retirement plan covering its union employees at the Amron Division of the AMTEC subsidiary during the years ended *December 31, 2025*, *2024*, and *2023*, respectively.
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**H.INCOME TAXES:**
The following table summarizes the provision for income taxes:
| | | For Years Ended December 31 (in thousands) | | |
| | | 2025 | | | 2024 | | | 2023 | | |
| Current: | | | | | | | | | | | | | |
| Federal | | $ | 592 | | | $ | 12,299 | | | $ | 9,314 | | |
| State | | | 702 | | | | 1,439 | | | | (252 | ) | |
| | | | 1,294 | | | | 13,738 | | | | 9,062 | | |
| Deferred: | | | | | | | | | | | | | |
| Federal | | | 7,350 | | | | (4,486 | ) | | | (1,509 | ) | |
| State | | | 391 | | | | (42 | ) | | | 319 | | |
| | | | 7,741 | | | | (4,528 | ) | | | (1,190 | ) | |
| Total tax provision | | $ | 9,035 | | | $ | 9,210 | | | $ | 7,872 | | |
The income taxes paid (net of refunds received) by the Company are as follows:
| | | For Years Ended December 31 (in thousands) | | |
| | | 2025 | | | 2024 | | | 2023 | | |
| Federal | | $ | 9,080 | | | $ | 11,420 | | | $ | 6,710 | | |
| State | | | 1,083 | | | | 530 | | | | 109 | | |
| Foreign | | | 21 | | | | 21 | | | | 18 | | |
| Total income taxes paid (net of refunds received) | | $ | 10,184 | | | $ | 11,971 | | | $ | 6,837 | | |
The amount of income taxes paid (net of refunds received) did *not* exceed *5* percent of total income taxes paid (net of refunds received) in any state or foreign jurisdiction for the years ended *December 31, 2025,**2024* and *2023*.
The effective rate of the provision for income taxes on earnings before income taxes as shown in the Consolidated Statements of Comprehensive Income differs from the applicable statutory federal income tax rate for the following reasons:
| | | Percent of Pre-tax Income | | |
| | | 2025 | | | 2024 | | | 2023 | | |
| | | Amount (in thousands) | | | Percent | | | Amount (in thousands) | | | Percent | | | Amount (in thousands) | | | Percent | | |
| U.S. federal statutory tax rate | | $ | 8,845 | | | | 21.0 | % | | $ | 10,641 | | | | 21.0 | % | | $ | 8,911 | | | | 21.0 | % | |
| State and local income taxes, net of federal income tax effect (a) | | | 988 | | | | 2.3 | % | | | 1,493 | | | | 2.9 | % | | | 404 | | | | 0.9 | % | |
| Tax credits | | | | | | | | | | | | | | | | | | | | | | | | | |
| Research and development tax credits | | | (449 | ) | | | (1.1 | %) | | | (474 | ) | | | (0.9 | %) | | | (567 | ) | | | (1.3 | %) | |
| Changes in unrecognized tax benefits | | | (494 | ) | | | (1.2 | %) | | | (891 | ) | | | (1.8 | %) | | | (481 | ) | | | (1.1 | %) | |
| Other adjustments | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjustments for prior year estimates | | | 160 | | | | 0.4 | % | | | (1,451 | ) | | | (2.9 | %) | | | (274 | ) | | | (0.6 | %) | |
| Other | | | (15 | ) | | | 0.0 | % | | | (108 | ) | | | (0.2 | %) | | | (121 | ) | | | (0.3 | %) | |
| Effective tax rate | | $ | 9,035 | | | | 21.4 | % | | $ | 9,210 | | | | 18.1 | % | | $ | 7,872 | | | | 18.6 | % | |
(a) State taxes in Mississippi and Arkansas for *2025* and Mississippi and Wisconsin for *2024* and *2023* made up the majority (greater than *50* percent) of the tax effect of this category.
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Deferred tax assets and liabilities are recorded based on the differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes.The tax effects of the cumulative temporary differences resulting in deferred tax assets and liabilities are as follows at *December 31:*
| | | (In thousands) | | |
| | | 2025 | | | 2024 | | |
| Deferred tax assets | | | | | | | | | |
| State NOL and tax credit carryforwards | | $ | 2,370 | | | $ | 2,091 | | |
| Lease liabilities | | | 2,107 | | | | 2,286 | | |
| Vacation | | | 1,004 | | | | 979 | | |
| Inventory | | | 994 | | | | 3,215 | | |
| Insurance (primarily product liability) | | | 968 | | | | 1,089 | | |
| Research and development expenses | | | - | | | | 5,630 | | |
| Other | | | 917 | | | | 981 | | |
| Subtotal | | | 8,360 | | | | 16,271 | | |
| Less: valuation allowance | | | 1,839 | | | | 1,599 | | |
| Total deferred tax assets | | | 6,521 | | | | 14,672 | | |
| | | | | | | | | | |
| Deferred tax liabilities | | | | | | | | | |
| Right-to-use lease asset | | | 2,107 | | | | 2,286 | | |
| Goodwill and other intangibles | | | 1,256 | | | | 1,469 | | |
| Depreciation | | | 562 | | | | 581 | | |
| Deferred revenue | | | 2 | | | | 9 | | |
| Total deferred tax liabilities | | | 3,927 | | | | 4,345 | | |
| | | | | | | | | | |
| Net deferred tax assets | | $ | 2,594 | | | $ | 10,327 | | |
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. The Company believes it is more likely than *not* that the benefit from certain state NOL and tax credit carryforwards will *not* be realized. A significant factorof objective negative evidence evaluated was the cumulative losses incurred in the Safety segment over the *three*-year period ended *December 31, 2025*. Such objective evidence limits the ability to consider subjective evidence, such as projections for future growth.
On the basis of this evaluation, as of *December 31, 2025*and *2024*, valuation allowances of $1,839,000 and $1,599,000, respectively, havebeen provided on the deferred tax assets related to these state NOL and tax credit carryforwards, which will expire between *2034* and *2045.* The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence inthe form of cumulative losses is *no* longer present and additional weight is given to subjective evidence such as projections for growth.
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The Company establishes tax reserves in accordance with FASB ASC *740,* *Income Taxes*. The following is a reconciliation of the Companys unrecognized tax benefits for the years ended *December 31, 2025*and *2024*:
| | | (In thousands) | | |
| | | 2025 | | | 2024 | | |
| Balance at January 1 | | $ | 2,122 | | | $ | 2,481 | | |
| Increases for tax positions taken related to the current year | | | 352 | | | | 694 | | |
| Increases (decrease) for tax positions taken related to prior years | | | (299 | ) | | | (51 | ) | |
| Lapse of statute of limitations | | | (332 | ) | | | (1,002 | ) | |
| Balance at December 31 | | $ | 1,843 | | | $ | 2,122 | | |
The ending net unrecognized tax benefits results from adjusting the gross balance for deferred tax items, interest and penalties, and deductible taxes. The net unrecognized tax benefits are included in Deferred Income Taxes and Federal and State Income Taxes - Non-current within the Consolidated Balance Sheet.
It is the Companys practice to include tax related interest expense, interest income, and penalties in tax expense.During the years ended *December 31, 2025,**2024* and *2023*, the Company accrued approximately $137,000, $129,000 and $166,000 in interest expense, respectively.
The Company is subject to U.S. federal income tax as well as income taxes of multiple states. Tax years 2022through *2024*are currently open for examination. For all states in which it does business, the Company is subject to state audit statutes.
**I.COMMITMENTS AND CONTINGENCIES:**
The Company is involved in largely routine litigation incidental to its business.Management believes the ultimate outcome of this litigation will *not* have a material effect on the Company's consolidated financial position, liquidity, or results of operations.
**J.CONCENTRATIONS:******
In the Housewares/Small Appliance segment, there were no customer concentrations over *10%* for the yearended *December 31, 2025*. There was one customer that accounted for 10% of consolidated net sales for the year ended *December 31, 2024*. The same customer accounted for 11% of consolidated net salesfor the year ended *December 31,**2023*.
The Company sources most of its housewares/small appliances and certain safety products from vendors in the Orientand, as a result, risks deliveries from the Orient being disrupted by labor or supply problems at the vendors, or transportation delays.Should such problems or delays materialize, products might *not* be available in sufficient quantities during prime selling periods.The Company has made and will continue to make every reasonable effort to prevent these problems; however, there is *no* assurance that its efforts will be totally effective.As the majority of the Housewares/Small Appliance segments and certain Safety segments suppliers are located in China, periodic changes in the U.S. dollar and Chinese Renminbi (RMB) exchange rates do have an impact on the segments product costs.To date, any material impact from fluctuations in the exchange rate has been to the cost of products secured via purchase orders issued subsequent to the currency value change.Foreign transaction gains/losses are immaterial to the financial statements for all years presented.
The Company's Defense segment manufactures products primarily for the DODand DOD prime contractors.As a consequence, this segment's future business essentially depends on the product needs and governmental funding of the DOD.During *2025,* *2024,* and *2023*, substantially all of the work performed by this segment directly or indirectly for the DOD was performed on a fixed-price basis.Under fixed-price contracts, the price paid to the contractor is awarded based on competition or negotiation at the outset of the contract and therefore, with the exception of limited escalation provisions on specific materials, is generally *not* subject to any adjustments reflecting the actual costs incurred by the contractor. In addition, in the case of the *40mm* systems contract, key components and services are provided by *third* party subcontractors, several of which the segment is required to work with by government edict.Under the contract, the segment is responsible for the performance of those subcontractors, many of which it does *not* control.The Defense segment's contracts and subcontracts contain the customary provision permitting termination at any time for the convenience of the government, with payment for any work completed, associated profit, and inventory/work in process at the time of termination.Materials used in the Defense segment are available from multiple sources.As of *December 31, 2025*, 180employees of Amron, or 15% of the Companys and its subsidiaries total workforce, are members of the United Steel Workers union.The most recent contract between Amron and the union is effective through *February 28, 2030.*
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**K.ENVIRONMENTAL**
In *May 1986,*the Companys Eau Claire, Wisconsin site was placed on the United States Environmental Protection Agencys National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act of *1980* because of hazardous waste deposited on the property.As of *December 31, 1998,*all remediation projects required at the Company's Eau Claire, Wisconsin site had been installed, were fully operational, and restoration activities had been completed.In addition, the Company is a member of a group of companies that *may*have disposed of waste into an Eau Claire area landfill in the *1960s* and *1970s.*After the landfill was closed, elevated volatile organic compounds were discovered in the groundwater.Remediation plans were established, and the costs associated with remediation and monitoring at the landfill are split evenly between the group and the city of Eau Claire.As of *December 31, 2025*, there does *not* appear to be exposure related to this site that would have a material impact on the operations or financial condition of the Company.
Based on factors known as of *December 31, 2025*, it is believed that the Company's existing environmental accrued liability reserve will be adequate to satisfy on-going remediation operations and monitoring activities both on- and off-site; however, should environmental agencies require additional studies, extended monitoring, or remediation projects, it is possible that the existing accrual could be inadequate.Management believes that in the absence of any unforeseen future developments, known environmental matters will *not* have any material effect on the results of operations or financial condition of the Company.The Companys environmental accrued liability on an undiscounted basis was $925,000as of *December 31, 2025*and *2024*, and is included in accrued liabilities on its balance sheet.
Expected future payments for environmental matters are as follows:
| | | (In thousands) | | |
| Years Ending December 31: | | | | | |
| 2026 | | $ | 195 | | |
| 2027 | | | 133 | | |
| 2028 | | | 121 | | |
| 2029 | | | 108 | | |
| 2030 | | | 96 | | |
| Thereafter | | | 272 | | |
| | | $ | 925 | | |
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**L.BUSINESS SEGMENTS:**
The Company operates in three business segments.The Company identifies its segments based on the Company's organization structure, which is primarily by principal products and is the way in which the Companys Chief Operating Decision Maker (CODM), the Companys CEO, makes operating decisions, assesses financial performance, and allocates resources.The principal product groups are Housewares/Small Appliance, Defense, and Safety.Sales for all segments are primarily to customers in North America.
The Housewares/Small Appliance segment designs, markets, and distributes housewares and small appliances.The housewares/small appliance products are sold primarily in the United States and Canada directly to retail outlets and also through independent distributors.As more fully described in Note J, the Company primarily sources its Housewares/Small Appliance products from non-affiliated suppliers located in the Orient.Sales are seasonal, with the normal peak sales period occurring in the *fourth* quarter of the year prior to the holiday season.
The Defense segment was started in *2001* with the acquisition of AMTEC Corporation, which manufactures precision mechanical and electromechanical assemblies for the U.S. Government and prime contractors.During *2005,* and again during *2010,* AMTEC Corporation was *one* of two prime contractors selected by the Army to supply all requirements for the *40mm* family of practice and tactical ammunition cartridges for a period of five years.In *2016,* AMTEC was awarded a *one*-year contract, and in *2017* and *2022,* it was awarded*third* and *fourth* *five*-year contracts, respectivelyas the sole prime contractor.AMTEC's manufacturing plant is located in Janesville, Wisconsin.Since the inception of the Defense segment in *2001,* the Company has expanded the segment by making several strategic business acquisitions, and has additional facilities located in East Camden, Arkansas; Antigo, Wisconsin;Clear Lake, South Dakota, and Marshall, Texas.During *2003,* the segment was expanded with the acquisition of Spectra Technologies, LLC of East Camden, Arkansas.This facility performs Load, Assemble, and Pack (LAP) operations on ordnance-related products for the U.S. Government and prime contractors.During *2006,* the segment was expanded again with the acquisition of certain assets of Amron, LLC of Antigo, Wisconsin, which primarily manufactures cartridge cases used in medium caliber (*20*-*50mm*) ammunition. During *2014,* the Company continued the expansion of the Defense segment with the purchase of substantially all of the assets of Chemring Energetic Devices, Inc. located in Clear Lake, South Dakota, and all of the real property owned by Technical Ordnance Realty, LLC. The Clear Lake facility manufactures detonators, booster pellets, release cartridges, lead azide, and other military energetic devices and materials. During *2022,* the Company again expanded the Defense segment by acquiringthe equity interests of Woodlawn Manufacturing, Ltd. Woodlawn Manufacturing, Ltd, is a high volume manufacturer of precision metal parts and assemblies primarily for the defense and aerospace industry.See Note P. The Defense segments collection of facilities enables the Company to deliver in virtually all aspects of the manufacture of medium caliber training and tactical rounds.Those aspectsinclude the fuze, the detonator, the metal parts (including the cartridge case), and load, assemble and pack of the final round.
The Safety segment was started in *2019* with the acquisition of the assets of OneEvent Technologies, Inc., a business located in Mount Horeb, Wisconsin which focused on protection for buildings, homes, assets, and occupants using a cloud-based learning and an analytics engine that utilizes data from a series of sensing devices to predict, alert, and prevent. Upon purchase, it was combined with Rusoh, Inc. which designed and marketed fire extinguishers. Prior to *2019,* Rusoh Inc. had been included in the Companys Housewares/Small Appliances segment. On *July 29, 2022,*certain assets were acquired and liabilities were assumed of Knox Safety, Inc., a startup business formed in *2019* with operations in Illinois and North Carolina. Knox Safety designed and sold carbon monoxide detectors for residential use. Subsequent to the acquisition, the acquiring entity legally adopted the corporate name Rely Innovations, Inc. and was added to the segment. Since its acquisition, the Company has introduced smoke detectors and fire extinguishers under the Rely name. To focus the direction of the segments business, the Company divested the stock of Rusoh, Inc. on *November 14, 2023*and certain assets of OneEvent related to its refrigeration monitoring business on *July 31, 2025.*The OneEvent intellectual property, however, has been retained.
The Company manages and assesses the performance of its reportable segments by their gross profit and operating profit. As part of the CODMs review of segment-level performance, the CODM reviews these measures of income of each reportable segment, which drives the evaluation of the performance of the Companys reportable segments and allocation of resources to those segments. The significant segment expense categories included in the table below augment the Companys understanding of operating results.
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In the following summary, operating profit represents earnings before other income and income taxes.The Company's segments operate discretely from each other with *no* shared owned or leasedmanufacturing facilities.Costs associated with corporate activities (such as cash and marketable securities management) and the assets associated with such activities are included within the Housewares/Small Appliance segment for all periods presented.
| | | (in thousands) | | |
| | | Housewares / Small Appliance | | | Defense | | | Safety | | | Total | | |
| Year ended December 31, 2025 | | | | | | | | | | | | | | | | | |
| External net sales | | $ | 95,604 | | | $ | 405,937 | | | | 1,983 | | | $ | 503,524 | | |
| Cost of sales | | | 88,015 | | | | 328,293 | | | | 6,891 | | | | 423,199 | | |
| Gross profit (loss) | | | 7,589 | | | | 77,644 | | | | (4,908 | ) | | | 80,325 | | |
| Selling and general expenses (1) | | | 13,130 | | | | 15,354 | | | | 3,763 | | | | 32,247 | | |
| Depreciation and amortization | | | 1,050 | | | | 3,907 | | | | 179 | | | | 5,136 | | |
| Operating profit (loss) | | | (9,292 | ) | | | 58,383 | | | | (8,850 | ) | | | 40,241 | | |
| Total assets | | | 100,070 | | | | 394,392 | | | | 6,267 | | | | 500,729 | | |
| Capital expenditures | | | 23,231 | | | | 1,066 | | | | 36 | | | | 24,333 | | |
| | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2024 | | | | | | | | | | | | | | | | | |
| External net sales | | $ | 102,799 | | | $ | 284,025 | | | | 1,404 | | | $ | 388,228 | | |
| Cost of sales | | | 77,321 | | | | 225,852 | | | | 6,489 | | | | 309,662 | | |
| Gross profit (loss) | | | 25,478 | | | | 58,173 | | | | (5,085 | ) | | | 78,566 | | |
| Selling and general expenses (1) | | | 11,928 | | | | 11,383 | | | | 4,996 | | | | 28,307 | | |
| Depreciation and amortization | | | 948 | | | | 3,937 | | | | 161 | | | | 5,046 | | |
| Operating profit (loss) | | | 12,602 | | | | 42,853 | | | | (10,242 | ) | | | 45,213 | | |
| Total assets | | | 115,717 | | | | 330,892 | | | | 6,788 | | | | 453,397 | | |
| Capital expenditures | | | 212 | | | | 7,253 | | | | 66 | | | | 7,531 | | |
| | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2023 | | | | | | | | | | | | | | | | | |
| External net sales | | $ | 97,619 | | | $ | 241,703 | | | | 1,590 | | | $ | 340,912 | | |
| Cost of sales | | | 77,752 | | | | 189,700 | | | | 6,008 | | | | 273,460 | | |
| Gross profit (loss) | | | 19,867 | | | | 52,003 | | | | (4,418 | ) | | | 67,452 | | |
| Selling and general expenses (1) | | | 11,485 | | | | 9,082 | | | | 5,845 | | | | 26,412 | | |
| Depreciation and amortization | | | 1,030 | | | | 4,635 | | | | 342 | | | | 6,007 | | |
| Operating profit (loss) | | | 7,352 | | | | 38,286 | | | | (10,605 | ) | | | 35,033 | | |
| Total assets | | | 191,902 | | | | 242,272 | | | | 6,362 | | | | 440,536 | | |
| Capital expenditures | | | 488 | | | | 1,168 | | | | 184 | | | | 1,840 | | |
| | | | | | | | | | | | | | | | | | |
| (1) Excluding depreciation and amortization. | | | | | | | | | | | | | | | | | |
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**M. LEASES**
The Company accounts for leases under ASC *Topic 842, Leases*. The Companys leasing activities include roles as both lessee and lessor.As lessee, the Companys primary leasing activities include buildings and structures to support its manufacturing operations at *one* location in its Defense segment, warehouse space and equipment to support its distribution center operations in its Housewares/Small Appliances segment, and office space to support its Safety segment's operations. As lessor, the Companys primary leasing activity is comprised of manufacturing and office space located adjacent to its corporate offices.All of the Companys leases are classified as operating leases.
The Companys leases as lessee in its Defense segment provide for variable lease payments that are based on changes in the Consumer Price Index.As lessor, the Companys primary lease also provides for variable lease payments that are also based on changes in the Consumer Price Index, as well as on increases in costs of insurance, real estate taxes, and utilities related to the leased space. Generally, all of the Companys lease contracts provide for options to extend and terminate them.The majority of lease terms of the Companys lease contracts recognized on the balance sheetreflect extension options, while *none* reflect earlytermination options.
The Company has determined that the incremental borrowingrates implicit in its leases are *not* readily determinable and estimates those rates utilizing quotes from financial institutions for real estate and equipment, as applicable, over periods of time similar to the terms of its leases. The Company has entered into various short-term leases as lessee and has elected a non-recognition accounting policy, as permitted by ASC *Topic 842*.
| | | Years Ending | | |
| | | (In thousands) | | |
| Summary of Lease Cost | | 2025 | | | 2024 | | | 2023 | | |
| Operating lease cost | | $ | 1,151 | | | $ | 1,212 | | | $ | 1,215 | | |
| Short-term and variable lease cost | | | 379 | | | | 265 | | | | 206 | | |
| Total lease cost | | $ | 1,530 | | | $ | 1,477 | | | $ | 1,421 | | |
Rent expense was approximately $1,530,000,$1,477,000, and $1,421,000 for the years ended *December 31, 2025*, *2024*, and *2023*, respectively. Operating cash used for operating leases was $1,530,000,$1,477,000, and $1,421,000 for the yearsended *December 31, 2025*, *2024*, and *2023*, respectively. The weighted-average remaining lease term was 18.3years, and the weighted-average discount rate was 4.7% as of *December 31, 2025*.
Maturities of operating lease liabilities are as follows:
| Years ending December 31: | | (In thousands) | | |
| 2026 | | $ | 842 | | |
| 2027 | | | 814 | | |
| 2028 | | | 812 | | |
| 2029 | | | 757 | | |
| 2030 | | | 703 | | |
| Thereafter | | | 11,095 | | |
| Total lease payments | | $ | 15,023 | | |
| Less: future interest expense | | | 5,582 | | |
| Lease liabilities | | $ | 9,441 | | |
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Lease income from operating lease payments was $2,351,000,$2,283,000, $2,281,000 for the years ended *December 31, 2025*, *2024*, and *2023*, respectively and is included in Other income on the Consolidated Statements of Comprehensive Income.Undiscounted cash flows provided by lease payments are expected as follows:
| Years ending December 31: | | (In thousands) | | |
| 2026 | | $ | 2,321 | | |
| 2027 | | | 2,314 | | |
| 2028 | | | 2,314 | | |
| 2029 | | | 2,314 | | |
| 2030 | | | 2,314 | | |
| Thereafter | | | 13,884 | | |
| Total lease payments | | $ | 25,461 | | |
The Company considers risk associated with the residual value of its leased real property to be low, given the nature of the long-term lease agreement, the Companys ability to control the maintenance of the property, and the creditworthiness of the lessee.The residual value risk is further mitigated by the long-lived nature of the property, and the propensity of such assets to hold their value or, in some cases, appreciate in value.
**N.INTERIM FINANCIAL INFORMATION (UNAUDITED):**
The following represents quarterly unaudited financial information for*2025* and *2024*:
| | | (In thousands, except per share data) | | |
| | | | | | | | | | | | | | | Per Share (basic and diluted) | | |
| Quarter | | Net Sales | | | Gross Profit | | | Net Earnings | | | Net Earnings | | |
| 2025 | | | | | | | | | | | | | | | | | |
| First | | $ | 103,639 | | | $ | 18,111 | | | $ | 7,610 | | | $ | 1.07 | | |
| Second | | | 120,449 | | | | 18,546 | | | | 5,152 | | | | 0.72 | | |
| Third | | | 115,463 | | | | 16,012 | | | | 5,317 | | | | 0.74 | | |
| Fourth | | | 163,973 | | | | 27,656 | | | | 15,005 | | | | 2.10 | | |
| Total | | $ | 503,524 | | | $ | 80,325 | | | $ | 33,084 | | | $ | 4.63 | | |
| | | | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | | | | |
| First | | $ | 76,653 | | | $ | 13,853 | | | $ | 6,568 | | | $ | 0.92 | | |
| Second | | | 85,060 | | | | 14,699 | | | $ | 6,077 | | | $ | 0.85 | | |
| Third | | | 91,823 | | | | 17,223 | | | $ | 8,083 | | | $ | 1.13 | | |
| Fourth | | | 134,692 | | | | 32,791 | | | | 20,732 | | | | 2.92 | | |
| Total | | $ | 388,228 | | | $ | 78,566 | | | $ | 41,460 | | | $ | 5.82 | | |
Fourth quarter sales areimpacted by the holiday driven seasonality of the Housewares/Small Appliance segment.This segment typically orders/purchases inventory during the *first* *three* quarters to meet the sales demand of the *fourth* quarter.The Defense and Safety segmentsare typically non-seasonal.
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**O.LINE OF CREDIT AND COMMERCIAL LETTERS OF CREDIT**
The Company maintainedan unsecured line of credit for short term operating cash needs of $50,000,000 and $10,000,000 as of *December 31, 2025*and *2024*, respectively. The amount outstandingwas $23,624,000 under this line of creditas of *December 31, 2025*,which expires *September 30, 2026.*There were no amounts outstanding under theline of creditas of *December 31,**2024*. The interest rate on the current line of creditresets monthly to the *30*-day Secured Overnight Financing Rate (SOFR) plus one-and-*one*-quarter percent.The interest rate on the previous line of credit reset monthly to the *30*-day SOFR plus one percent. In addition, the Company had *one*issued commercial letterof credit for $1,500,000 and $1,000,000 as of*December 31, 2025*and *2024*, respectively.As of *December 31, 2025*, the entire balance of the issued letter of credit had *not* been drawn upon.
**P.IMPAIRMENT OF VENDOR DEPOSIT**
During the quarter ended*March 30, 2025,*the Company made deposits totaling $2,701,000 with a vendor in its Housewares/Small Appliances segment. On*May 29, 2025,*the vendor filed forprotection in the U.S. Bankruptcy Court in the Northern District of Texas. As recovery of the deposit is deemed unlikely, the Company recorded an impairment of the full deposit during the quarter ended*June 29, 2025.*The deposit had been carried in Property, Plant and Equipment on the Companys balance sheet.
**Q.SUBSEQUENT EVENTS**
The Company evaluates events that occur through the filing date and discloses any material or significant events or transactions.
On *February 20, 2026,*the United States Supreme Court determined that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were contrary to law. Any potential refunds, including the timing and amount thereof, remain uncertain and are dependent on further legal and administrative actions. In response to the ruling, the administration implemented new tariffs based on alternative statutory authorities, resulting in ongoing uncertainty regarding future tariff actions and their possible impact on the Company. The Company is continuing to monitor these developments and evaluate the potential effects on its business, financial condition, and results of operations.
On*February 27, 2026,*the Companys Board of Directors announced a regular dividend of $1.00per share, payable on*March 20, 2026,*to stockholders of record as of*March 9, 2026.*
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**Reportof Independent Registered Public Accounting Firm**
To the Shareholders and the Board of Directors of National Presto Industries, Inc.
**Opinion on the Financial Statements**
We have audited the accompanying consolidated balance sheets of National Presto Industries, Inc. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes to the consolidated financial statements and Schedule II (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the PublicCompany Accounting Oversight Board (UnitedStates)(PCAOB), the Company's internal control over financial reporting as of December31, 2025, based on criteria established in *Internal Control**Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 13, 2026, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.
**Basis for Opinion**
These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
**Critical Audit****Matter**
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involves our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
**Revenue Recognition****Defense Segment Contracts**
As described in Note A (11) and L to the financial statements, the Companys external net sales recognized for its Defense segment amounted to $406 million for the year ended December 31, 2025. The Companys contracts in the Defense segment are primarily with the U.S. Department of Defense (DOD) and DOD prime contractors. The Company generally recognized revenue on these contracts at a point in time when the customer obtains legal title and formally documents that it has accepted the products. There are certain termination clauses in Defense segment contracts that could give rise to an over-time pattern of recognition of revenue in the absence of alternative use of the product. Significant judgment is required by management to conclude whether or not (i) the Company has an enforceable right to payment for its performance to date under the contract and (ii) the asset created by the Companys performance under the contract has an alternative use to the Company.
We identified the determination of whether control in Defense segment sales contracts transfers to the customer at a point in time or over time as a critical audit matter because of the significant assumptions and judgments made by management. Auditing managements assumptions and judgments regarding when control transfers involved a high degree of auditor judgment and an increased effort.
Our audit procedures related to managements determination of when control transfers to the customer in Defense segment sales contracts included the following, among others:
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We obtained an understanding of the relevant controls related to the timing of revenue recognition on Defense contracts and tested such controls for design and operating effectiveness, including management review controls related to the evaluation of relevant contract terms and conditions impacting whether revenue is recognized over time or at a point in time. |
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We assessed the reasonableness of the timing of revenue recognition for a sample of revenue contracts through: |
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Reviewing contract terms, including evaluating whether the Company has an enforceable right to payment for its performance to date under the contract and whether contractual restrictions prohibit the Company from redirecting a completed asset to another customer. |
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Evaluating evidence that the assets created by the Companys performance under the contract have an alternative use by verifying sales of the same or similar products to other customers. |
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We reviewed government contracts under ASC 606 to assist in the evaluation of managements assessment of positive and negative evidence and their conclusions of the timing of when control has been transferred to its customers under the contract. |
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/s/ RSM USLLP
We have served as the Company's auditor since 2021.
Milwaukee, Wisconsin
March 13, 2026
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[](#)NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended*December 31, 2025,**2024* and *2023*
| (In thousands) | | |
| Column A | | Column B | | | Column C | | | Column D | | | Column E | | |
| Description | | Balance at Beginning of Period | | | Additions - Charged to Costs and Expenses (A) | | | Additions - Charged to Other Accounts (B) | | | Deductions (C) | | | Balance at End of Period | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Deducted from assets: | | | | | | | | | | | | | | | | | | | | | |
| Allowance for doubtful accounts: | | | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2025 | | $ | 217 | | | $ | 66 | | | $ | - | | | $ | 40 | | | $ | 243 | | |
| Year ended December 31, 2024 | | $ | 596 | | | $ | (285 | ) | | $ | - | | | $ | 94 | | | $ | 217 | | |
| Year ended December 31, 2023 | | $ | 338 | | | $ | 285 | | | $ | - | | | $ | 27 | | | $ | 596 | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Allowance for doubtful note receivable: | | | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2025 | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | |
| Year ended December 31, 2024 | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | |
| Year ended December 31, 2023 | | $ | 7,615 | | | $ | - | | | $ | - | | | $ | 7,615 | | | $ | - | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Valuation allowance for deferred tax assets: | | | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2025 | | $ | 1,599 | | | $ | 240 | | | | | | | | | | | $ | 1,839 | | |
| Year ended December 31, 2024 | | $ | 954 | | | $ | 645 | | | $ | - | | | $ | - | | | $ | 1,599 | | |
| Year ended December 31, 2023 | | $ | 1,960 | | | $ | 398 | | | $ | - | | | $ | 1,404 | | | $ | 954 | | |
Notes:
(A) Amounts charged to selling and general expenses or provision for income taxes from continuing operations.
(B) Amounts charged to other accounts.
(C) Principally bad debts written off, net of recoveries.
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