Power Solutions International, Inc 10-Q for FY2026 Q1

Power Solutions International, Inc. (PSIX)

10-Q 2026-05-11 For: 2026-03-31

Added on May 11, 2026

About this 10-Q

Power Solutions International, Inc filed this 10-Q on May 11, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $128.59M; down 5.1% from $135.45M a year earlier
Net income: $7.3M; down 61.7% from net income of $19.08M a year earlier
Diluted EPS: $0.32; down 61.4% from $0.83 a year earlier

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Delaware		33-0963637
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
201 Mittel Drive, Wood Dale, IL		60191
(Address of Principal Executive Offices)		(Zip Code)
(630) 350-9400
(Registrant’s Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	PSIX	Nasdaq Stock Market
Securities Registered Pursuant to Section 12(g) of the Act:
__________________


		Page
PART I – FINANCIAL INFORMATION
	Forward-Looking Statements	3
Item 1.	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Income	5
	Consolidated Statements of Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
	Signatures	39


(in thousands, except par values)	As of March 31, 2026 (unaudited)		As of December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	45,089	$	41,250
Restricted cash	4,448		3,698
Accounts receivable, net of allowances of $1,399 and $967 as of March 31, 2026 and December 31, 2025, respectively; (from related parties $200 and $415 as of March 31, 2026 and December 31, 2025, respectively)	73,690		90,446
Income tax receivable	5,348		6,442
Inventories, net	129,243		127,363
Prepaid expenses	4,293		4,500
Contract assets	11,567		15,965
Other current assets	1,152		1,256
Total current assets	274,830		290,920
Property, plant and equipment, net	32,281		23,014
Operating lease right-of-use assets, net	61,164		52,911
Intangible assets, net	1,607		1,236
Goodwill	34,921		29,835
Deferred tax assets	12,188		13,322
Customs-related deposits	13,148		12,893
Other noncurrent assets	543		614
TOTAL ASSETS	$	430,682	$	424,745

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable (to related parties $3,300 and $4,126 as of March 31, 2026 and December 31, 2025, respectively)	$	42,544	$	48,196
Current maturities of long-term debt	1,804		28

Finance lease liability, current	364		355
Operating lease liability, current	7,351		6,346

Other accrued liabilities (to related parties $88 and $60 as of March 31, 2026 and December 31, 2025, respectively)	28,310		37,353
Total current liabilities	80,373		92,278


Long-term debt, net of current maturities	5,050		10
Revolving line of credit, long-term	95,000		95,000
Finance lease liability, long-term	1,223		1,224
Operating lease liability, long-term	55,628		49,397
Noncurrent contract liabilities	1,666		1,699
Other noncurrent liabilities	5,965		6,528
TOTAL LIABILITIES	$	244,905	$	246,136

Commitments and Contingencies (Note 11)





STOCKHOLDERS’ EQUITY

Common stock – $0.001 par value; 50,000 shares authorized; 23,117 shares issued; 23,051 and 23,041 shares outstanding at March 31, 2026 and December 31, 2025, respectively	23		23
Additional paid-in capital	157,878		157,602
Retained earnings	29,776		22,476
Treasury stock, at cost, 66 and 76 shares at March 31, 2026 and December 31, 2025, respectively	(1,900)		(1,492)
TOTAL STOCKHOLDERS’ EQUITY	185,777		178,609
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	430,682	$	424,745


(in thousands, except per share amounts)	For the Three Months Ended March 31,
	2026		2025
Net sales (to related parties $9 and $464 for the three months ended March 31, 2026 and 2025, respectively)	$	128,592	$	135,446
Cost of sales (derived from related party net sales $5 and $316 for the three months ended March 31, 2026 and 2025, respectively)	99,168		95,152
Gross profit	29,424		40,294
Operating expenses:
Research and development expenses	4,805		4,244
Selling, general and administrative expenses	12,977		11,109

Amortization of intangible assets	249		307
Total operating expenses	18,031		15,660
Operating income	11,393		24,634
Other expense (income), net:
Interest expense (from related parties $0 and $415 for the three months ended March 31, 2026 and 2025, respectively)	1,745		1,766



Other expense (income)	(85)		—
Total other expense, net	1,660		1,766
Income before income taxes	9,733		22,868
Income tax expense	2,433		3,786
Net income	$	7,300	$	19,082



Weighted-average common shares outstanding:
Basic	23,046		23,005
Diluted	23,063		23,061
Earnings per common share:
Basic	$	0.32	$	0.83
Diluted	$	0.32	$	0.83


(in thousands)	For the Three Months Ended
	Common Stock		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Total Stockholders’ Equity
Balance at December 31, 2025	$	23	$	157,602	$	22,476	$	(1,492)	$	178,609
Net income	—		—		7,300		—		7,300





Stock Appreciation Rights (“SAR”) issued	—		(148)		—		148		—

Stock-based compensation expense	—		424		—		—		424

Repurchases to settle tax withholding obligations for stock-based compensation awards	—		—		—		(556)		(556)






Balance at March 31, 2026	$	23	$	157,878	$	29,776	$	(1,900)	$	185,777

Balance at December 31, 2024	$	23	$	157,561	$	(91,511)	$	(823)	$	65,250
Net income	—		—		19,082		—		19,082
Stock Appreciation Rights (“SAR”) issued	—		(66)		—		66		—
Stock-based compensation expense			153		—		—		153
Repurchases to settle tax withholding obligations for stock-based compensation awards	—		—		—		(142)		(142)
Balance at March 31, 2025	$	23	$	157,648	$	(72,429)	$	(899)	$	84,343


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(in thousands)	As of March 31,
	2026		2025
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheets
Cash and cash equivalents	$	45,089	$	50,021
Restricted cash	4,448		3,638
Total cash, cash equivalents, and restricted cash	$	49,537	$	53,659


	As of March 31, 2026		As of December 31, 2025

Customer B	10	%	14	%
Customer C	16	%	10	%

Customer E	**		11	%

Customer G	11	%	11	%


(in thousands) Inventories	As of March 31, 2026		As of December 31, 2025
Raw materials	$	108,983	$	105,225
Work in process	3,665		5,103
Finished goods	25,253		25,288
Total inventories	137,901		135,616
Inventory allowance	(8,658)		(8,253)
Inventories, net	$	129,243	$	127,363


(in thousands) Other Accrued Liabilities	As of March 31, 2026		As of December 31, 2025
Accrued product warranty	$	6,319	$	6,634
Accrued litigation 1	1,547		1,400
Contract liabilities	2,597		3,486
Accrued compensation and benefits	9,171		19,565


Accrued interest expense	254		268

Stock appreciation rights liability 2	1,554		1,070
Non-interest bearing note payable	753		740
Customs accrual	1,965		1,248
Taxes payable	730		257
Other	3,420		2,685
Total	$	28,310	$	37,353


(in thousands)	Amount
Cash paid at closing	$	10,000
Promissory note to seller	1,125
Working capital and other adjustments	2,068
Total consideration transferred	$	13,193


(in thousands)	Fair Value
Purchase Price	$	13,193


Accounts receivable	3,095
Inventory	2,500
Other assets	93
Property, plant & equipment	8,786
Operating lease-right-of-use assets	7,507
Intangible - Trade name	620
Accounts payables and other accrued liabilities	(1,066)
Notes payable and long-term debt	(5,921)
Operating lease liabilities	(7,507)
Total identifiable net assets	$	8,107

Goodwill	$	5,086


(in thousands)	For the Three Months Ended March 31,
End Market	2026		2025
Power Systems	$	96,491	$	106,647
Industrial	26,557		23,513
Transportation	5,544		5,286
Total	$	128,592	$	135,446


(in thousands)	For the Three Months Ended March 31,
Geographic Area	2026		2025
United States	$	116,700	$	127,656
North America (outside of United States)	5,541		4,013
Pacific Rim	4,798		2,781
Europe	1,549		971
Other	4		25
Total	$	128,592	$	135,446


(in thousands)	As of March 31, 2026
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(33,988)	$	952
Developed technology	700		(700)		—
Trade names and trademarks	2,320		(1,665)		655
Total	$	37,960	$	(36,353)	$	1,607


(in thousands)	As of December 31, 2025
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(33,751)	$	1,189
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,653)		47
Total	$	37,340	$	(36,104)	$	1,236


(in thousands)	As of March 31, 2026			As of December 31, 2025
	Amount		Rate (2)	Amount		Rate (2)	Maturity Date










Long-term debt:
Revolving Credit Agreement 1	$	95,000	6.28%	$	95,000	6.35%	July 30, 2027
Promissory Note	1,125		8.00%	—		—%	January 9, 2031
First Master Loan Agreement	3,191		6.25%	—		—%	August 14, 2031
Second Master Loan Agreement	1,904		6.20%	—		—%	October 23, 2031
SBA Loan	619		5.03%	—		—%	July 27, 2032
Finance leases and other debt	1,602		**	1,617		**	Various

Total long-term debt and finance leases	103,441			96,617
Less: Current maturities of long-term debt and finance leases	2,168			383
Long-term debt	$	101,273		$	96,234


1			Unamortized financing costs and deferred fees on the amended Revolving Credit Agreement are not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheets. Unamortized debt issuance costs, were $0.8 million and $1.0 million as of March 31, 2026 and December 31, 2025, respectively.

2			Includes the weighted average interest rate.
**			Finance lease obligations are a non-cash financing activity. See Note 9. Leases.


(in thousands)	Maturities		Discount Amortization
Nine months ending December 31, 2026	$	560	$	115
Year ending December 31, 2027	1,328		97
Year ending December 31, 2028	741		9


Total note payable	$	2,629	$	221


(in thousands)	March 31, 2026		December 31, 2025

Operating lease ROU assets, net	$	61,164	$	52,911

Operating lease liabilities, current	7,351		6,346
Operating lease liabilities, non-current	55,628		49,397
Total operating lease liabilities	$	62,979	$	55,743

Finance lease ROU assets, net 1	$	1,534	$	1,533

Finance lease liabilities, current	364		355
Finance lease liabilities, non-current	1,223		1,224
Total finance lease liabilities	$	1,587	$	1,579


(in thousands)	Operating Leases		Finance Leases
Nine months ending December 31, 2026	$	8,651	$	345
Year ending December 31, 2027	11,642		460
Year ending December 31, 2028	10,612		460
Year ending December 31, 2029	9,803		441
Year ending December 31, 2030	8,448		100
Year ending December 31, 2031	6,471		2
Thereafter	27,669		—
Total undiscounted lease payments	83,296		1,808
Less: imputed interest	20,317		221
Total lease liabilities	$	62,979	$	1,587


(in thousands)	As of March 31, 2026
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving Credit Agreement	$	95,000	$	—	$	95,000	$	—
Note payable	2,629		—		2,629		—
Promissory Note	1,125		—		1,125		—
First Master Loan Agreement	3,191		—		3,191		—
Second Master Loan Agreement	1,904		—		1,904		—
SBA Loan	619		—		619		—


(in thousands)	Common Shares Issued	Treasury Stock Shares	Common Shares Outstanding
Balance as of December 31, 2025	23,117	76	23,041
Net shares issued for Stock awards	—	(10)	10



Balance as of March 31, 2026	23,117	66	23,051


(in thousands, except per share basis)	For the Three Months Ended March 31,
	2026		2025
Numerator:
Net income – basic and diluted	$	7,300	$	19,082





Denominator:
Shares used in computing net income per share:
Weighted-average common shares outstanding – basic	23,046		23,005
Effect of dilutive securities	17		56
Weighted-average common shares outstanding – diluted	23,063		23,061

Earnings per common share:
Earnings per share of common stock – basic	$	0.32	$	0.83
Earnings per share of common stock – diluted	$	0.32	$	0.83


(in thousands)	Annual minimum requirements

Nine months ending December 31, 2026	49,937
Year ending December 31, 2027	49,937
Year ending December 31, 2028	95,117
Year ending December 31, 2029	95,117
Total	$	290,108


Non-GAAP Financial Measure			Comparable GAAP Financial Measure
Adjusted net income			Net income
Adjusted net income per share – diluted			Net income per share – diluted
EBITDA			Net income
Adjusted EBITDA			Net income