Earnings release
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Exhibit 99.1 Investor Relations Contact: Thomas Baker, 603.683.2505 Senior Vice President, CFO, and Treasurer tom@connection.com CONNECTION (CNXN) REPORTS SECOND QUARTER 2026 RESULTS SECOND QUARTER SUMMARY: FIRST HALF OF 2026 SUMMARY: ● Net sales: $854.0 million, up 12.4% y/y ● Gross billings: $1.2 billion, up 14.0% y/y1 ● Gross profit: $157.5 million, up 14.3% y/y ● Gross margin: 18.4%, up 30 basis points y/y ● Net income: $33.2 million, up 33.8% y/y ● Diluted EPS: $1.31, compared to $0.97 y/y ● Adjusted Diluted EPS: $1.31, compared to $0.972 ● Net sales: $1.6 billion, up 7.9% y/y ● Gross billings: $2.2 billion, up 9.3% y/y1 ● Gross profit: $290.2 million, up 9.5% y/y ● Gross margin: 18.4%, up 30 basis points y/y ● Net income: $50.4 million, up 31.7% y/y ● Diluted EPS: $1.99, compared to $1.48 y/y ● Adjusted Diluted EPS: $2.08, compared to $1.562 Merrimack, NH—July 29, 2026—Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading informationtechnology solutions provider to business, government, healthcare and education markets, today announcedresults for the second quarter ended June 30, 2026. The Company also announced that its Board ofDirectors declared a quarterly dividend of $0.20 per share of the Company’s common stock. Payment will bemade on August 28, 2026, to shareholders of record on August 11, 2026. "Our record financial performance reflects more than strong execution—it reflects the value that ourcustomers are placing on their enterprise technology," said Timothy McGrath, President and Chief ExecutiveOfficer. McGrath continued, "As organizations increasingly operationalize AI, they need trusted partners likeConnection who can modernize infrastructure, strengthen security, integrate cloud and data platforms, anddeliver measurable business outcomes." Second Quarter of 2026 Results: Net sales for the quarter ended June 30, 2026 increased by 12.4%, year over year. Gross billings increasedby 14.0% to $1.2 billion, compared to $1.0 billion in the second quarter of 20251. Gross profit increased by14.3% to $157.5 million, compared to $137.8 million for the second quarter of 2025, and gross marginincreased 30 basis points to 18.4%, compared to the prior year quarter. Net income increased 33.8% to$33.2 million, or $1.31 per diluted share, compared to $24.8 million, or $0.97 per diluted share, for thesecond quarter of 2025. Performance by Segment: ● Net sales for the Business Solutions segment increased by 17.3% to $343.9 million in the secondquarter of 2026, compared to $293.2 million in the prior year quarter. Gross billings increased by16.7% to $496.1 million, compared to $425.1 million in the prior year quarter1. Gross profit increasedby 14.9% 1 Gross billings is the total dollar value of goods and services billed during the period, net of customer returns, credit memos, and any applicable sales or othertaxes and include agency fees, and freight. As certain transactions are recognized on a net basis, gross billings include amounts not recognized in net sales.2 Adjusted Diluted Earnings per Share and Adjusted EBITDA are non-GAAP measures. See page 10 for definitions and reconciliations of these measures.
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to $79.1 million, compared to $68.9 million in the prior year quarter. Gross margin decreased by 50basis points to 23.0% for the second quarter of 2026. ● Net sales for the Public Sector Solutions segment remained consistent at $140.5 million for the second quarter of 2026 and 2025. Gross billings increased by 1.7% to $197.1 million, compared to$193.8 million in the prior year quarter1. Gross profit increased by 9.2% to $23.2 million, compared to$21.3 million in the prior year quarter. Gross margin increased by 130 basis points to 16.5% for thesecond quarter of 2026. ● Net sales for the Enterprise Solutions segment increased by 13.4% to $369.6 million in the secondquarter of 2026, compared to $326.0 million in the prior year quarter. Gross billings increased by17.0% to $477.0 million, compared to $407.5 million in the prior year quarter1. Gross profit increasedby 15.8% to $55.2 million, compared to $47.6 million in the prior year quarter. Gross margin increasedby 30 basis points to 14.9% for the second quarter of 2026. Sales by Product Mix: ● Notebook/mobility and desktop sales increased by 19% year over year and accounted for 51% of netsales in the second quarter of 2026, compared to 48% of net sales in the second quarter of 2025. ● Software sales increased by 15% year over year and accounted for 9% of net sales in the secondquarter of both 2026 and 2025. ● Servers/storage sales decreased by 18% year over year and accounted for 7% of net sales in thesecond quarter of 2026, compared to 9% of net sales in the second quarter of 2025. ● Networking sales increased by 12% year over year and accounted for 7% of net sales in the secondquarter of both 2026 and 2025. ● Accessories sales increased by 10% year over year and accounted for 10% of net sales in thesecond quarter of both 2026 and 2025. Selling, general and administrative (“SG&A”) expenses increased in the second quarter of 2026 by 7.1% to$114.5 million from $106.9 million in the prior year quarter. SG&A as a percentage of net sales decreased to13.4%, compared to 14.1% in the prior year quarter. Interest income in the second quarter of 2026 was $2.5 million, compared to $3.2 million in the secondquarter of 2025. Cash and cash equivalents and short-term investments were $340.7 million as of June 30, 2026, comparedto $406.7 million as of December 31, 2025. Six Months of 2026 Results: Net sales for the six months ended June 30, 2026 increased by 7.9%, compared to the six months endedJune 30, 2025. Gross billings increased by 9.3% to $2.2 billion, compared to $2.0 billion for the six monthsended June 30, 20251. Gross profit increased by 9.5% to $290.2 million, compared to $265.1 million for thesix months ended June 30, 2025, and gross margin increased 30 basis points to 18.4%, compared to the sixmonths ended June 30, 2025. Net income for the six months ended June 30, 2026 increased by 31.7% to$50.4 million, or $1.99 per diluted share, compared to net income of $38.3 million, or $1.48 per diluted share,for the six months ended June 30, 2025. Adjusted Diluted Earnings per Share2 increased to $2.08 per sharefor the six months ended June 30, 2026, compared to $1.56 per share for the six months ended June 30,2025. 1 Gross billings is the total dollar value of goods and services billed during the period, net of customer returns, credit memos, and any applicable sales or othertaxes and include agency fees, and freight. As certain transactions are recognized on a net basis, gross billings include amounts not recognized in net sales. 2 Adjusted Diluted Earnings per Share and Adjusted EBITDA are non-GAAP measures. See page 10 for definitions and reconciliations of these measures.
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Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensationexpense, restructuring and other charges and non-routine legal settlements (“Adjusted EBITDA”)1 increased18% to $144.5 million for the twelve months ended June 30, 2026, compared to $122.5 million for the twelvemonths ended June 30, 2025. Conference Call and Webcast Connection will host a conference call and live web cast today, July 29, 2026 at 4:30 p.m. EDT to discuss itssecond quarter financial results. For participants who would like to participate via telephone, please registerhere to receive the dial-in number along with a unique PIN number that is required to access the call. A web-cast of the conference call, which will be broadcast live via the Internet, and a copy of this press release, canbe accessed on Connection’s website at ir.connection.com. For those unable to participate in the live call, areplay of the webcast will be available at ir.connection.com approximately 90 minutes after the completion ofthe call and will be accessible on the site for approximately one year. Non-GAAP Financial Information EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share are non-GAAP financial measures. These measures are included to provide additional information with respect to the Company’s operating performance and earnings. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Definitions for each Non-GAAP measure and a reconciliation to their most directly comparable GAAP measures are available in the tables at the end of this release. About Connection PC Connection, Inc. and its subsidiaries, dba Connection, (www.connection.com; NASDAQ: CNXN) is aFortune 1000 company headquartered in Merrimack, NH. With offices throughout the United States,Connection delivers custom-configured IT solutions from its ISO 9001:2015 SOC 2 Type 2 certifiedTechnology Integration and Distribution Center in Wilmington, OH. In addition, the Company has more than5,000 professional certifications to ensure that it can solve the most complex issues of its customers.Connection also services international customers through its GlobalServe subsidiary, a global IT procurementand service management company. Investors and media can find more information about Connection athttp://ir.connection.com. Connection Business Solutions (800.800.5555) is a rapid-response provider of IT products and servicesserving primarily the small- and medium-sized business sector. It offers more than 460,000 brand-nameproducts through its staff of technically trained sales account managers, publications, and its website atwww.connection.com. Connection–Enterprise Solutions (561.237.3300), www.connection.com/enterprise, provides corporatetechnology buyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and real-time access to over460,000 products and 1,600 vendors through MarkITplace®, a proprietary next-generation, cloud-based supplychain solution. The team’s engineers, software licensing specialists, and subject matter experts help reduce thecost and complexity of buying hardware, software, and services throughout the entire IT lifecycle. Connection Public Sector Solutions (800.800.0019), is a rapid-response provider of IT products and services tofederal, state, and local government agencies and educational institutions through specialized account managers,publications, and online at www.connection.com/publicsector. 1 Adjusted Diluted Earnings per Share and Adjusted EBITDA are non-GAAP measures. See page 10 for definitions and reconciliations of these measures.
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Cautionary Note Regarding Forward-Looking Statements This earnings release contains forward-looking statements within the meaning of Section 27A of theSecurities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.Forward-looking statements generally relate to future events or our future financial or operating performanceand include statements concerning, among other things, our future financial results, business plans (includingstatements regarding new products and services we may offer and future expenditures, costs andinvestments), liabilities, impairment charges, competition and the expected impact of current macroeconomicconditions on our businesses and results of operations. You can generally identify forward-looking statementsbecause they may contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,”“target,” “projects,” “believes,” “estimates,” “anticipates,” “potential” or “continue” or the negative of thesewords or other similar terms or expressions that concern our expectations, strategy, plans or intentions,although not all forward-looking statements include such terms. These statements reflect our current viewsand are based on assumptions as of the date of this report. Such assumptions are based upon internalestimates and other analysis of current market conditions and trends, management’s expectations, plans andstrategies, economic conditions and other factors. These statements are subject to known and unknownrisks, uncertainties and other factors that may cause our actual results, performance or achievements to bematerially different from expectations or results projected or implied by forward-looking statements.Such differences may result from actions taken by us, including expense reduction or strategic initiatives(including reductions in force, capital investments and new or expanded product offerings or services), theexecution of our business plans (including our inventory management, cost structure and management andother personnel decisions) or other business decisions, as well as from developments beyond our control,including; ● macroeconomic factors facing the global economy, including disruptions in or increased volatility of thecapital markets, changes in trade policy, which may include the imposition of tariffs or other trade barriers,economic sanctions and economic slowdowns or recessions, government shutdowns, the impact ofconflicts in Iran and the Middle East, changes in tax policy, rising inflation and changing interest ratesmodifying our potential for investment income and the timing thereof or reducing the level of investmentour customers are willing to make in IT products; ● supply constraints, such as the global memory (DRAM and NAND) shortage; ● substantial competition reducing our market share; ● significant price competition reducing our profit margins; ● the loss of any of our major vendors adversely affecting the number or type of products we may offer; ● virtualization of information technology resources and applications, including networks, servers,applications, and data storage disrupting or altering our traditional distribution models; ● service interruptions at third party shippers negatively impacting our ability to deliver the products we offerto our customers; ● increases in shipping and postage costs reducing our margins and adversely affecting our results ofoperations; ● loss of key persons or the inability to attract, train and retain qualified personnel adversely affecting ourability to operate our business; and ● cyberattacks or the failure to safeguard personal information and our IT systems resulting in liability andharm to our reputation. Additional factors include those described in our Annual Report on Form 10-K for the year ended December31, 2025, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial
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Condition and Results of Operations,” and “Business,” in our subsequent Quarterly Reports on Form 10-Q,including under the captions “Risk Factors” and “Management’s Discussion and Analysis of FinancialCondition and Results of Operations,” and in the other subsequent filings we make with the Securities andExchange Commission from time to time. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. Youshould not place undue reliance on the forward-looking statements included in this release. We assume noobligation to update any of these forward-looking statements, or to update the reasons actual results coulddiffer materially from those anticipated, to reflect circumstances or events that occur after the statements aremade except as required by law.
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CONSOLIDATED SELECTED FINANCIAL INFORMATION At or for the Three Months Ended June 30, 2026 2025 % Change Operating Data:Net sales (in thousands) $ 853,996 $ 759,693 12%Diluted earnings per share $ 1.31 $ 0.97 35% Gross margin 18.4% 18.1%Operating margin 5.0% 4.1% Inventory turns (1) 15 17Days sales outstanding (2) 71 68 % of % of Product Mix: Net Sales Net Sales Notebooks/Mobility 40% 34%Desktops 11 14Accessories 10 10Software 9 9Displays and Sound 9 9Servers/Storage 7 9Net/Com Products 7 7 Other Hardware/Services 7 8 Total Net Sales 100% 100% Stock Performance Indicators:Actual shares outstanding (in thousands) 25,238 25,396Closing price $ 72.99 $ 65.78Market capitalization (in thousands) $ 1,842,122 $ 1,670,549Trailing price/earnings ratio 19.3 20.1LTM Net Income (in thousands) $ 95,843 $ 86,050LTM Adjusted EBITDA (3) (in thousands) $ 144,480 $ 122,461 (1) Represents the annualized cost of goods sold for the period divided by the average inventory for the prior four-month period. (2) Represents the trade receivable at the end of the period divided by average daily net sales for the same three-month period. (3) LTM Adjusted EBITDA is a non-GAAP measure defined as EBITDA (earnings before interest, taxes, depreciationand amortization) adjusted for stock-based compensation, severance expenses and non-routine legal settlementsfor the last twelve months. See page 9 for a reconciliation. REVENUE AND MARGIN INFORMATION For the Three Months Ended June 30, 2026 2025 Net Gross Net Gross (amounts in thousands) Sales Margin Sales Margin Enterprise Solutions $ 369,620 14.9% $ 326,011 14.6%Business Solutions 343,870 23.0 293,168 23.5Public Sector Solutions 140,506 16.5 140,514 15.2 Total $ 853,996 18.4% $ 759,693 18.1%
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except per share data) 2026 2025 2026 2025 Net sales $ 853,996 $ 759,693 $ 1,575,862 $ 1,460,739Cost of sales 696,523 621,927 1,285,652 1,195,662 Gross profit 157,473 137,766 290,210 265,077Selling, general and administrative expenses 114,461 106,869 223,913 216,728Severance expenses — — 3,060 2,930 Income from operations 43,012 30,897 63,237 45,419Interest income, net 2,525 3,216 5,888 7,116Other income — — — 76Income tax provision (12,369) (9,324) (18,734) (14,341 Net income $ 33,168 $ 24,789 $ 50,391 $ 38,270 Earnings per common share: Basic $ 1.31 $ 0.98 $ 2.00 $ 1.49 Diluted $ 1.31 $ 0.97 $ 1.99 $ 1.48 Shares used in the computation of earnings per common share: Basic 25,226 25,405 25,214 25,739 Diluted 25,339 25,520 25,309 25,860
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CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, (amounts in thousands) 2026 2025 ASSETSCurrent Assets:Cash and cash equivalents $ 123,717 $ 193,221Short-term investments 216,973 213,457Accounts receivable, net 726,823 648,020Inventories, net 205,095 143,567 Prepaid expenses and other current assets 21,533 22,607 Total current assets 1,294,141 1,220,872Property and equipment, net 45,762 46,912Right-of-use assets, net 7,315 1,569Goodwill 73,602 73,602Intangibles, net 473 989 Other assets 6,341 6,981 Total Assets $ 1,427,634 $ 1,350,925 LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent Liabilities:Accounts payable $ 377,556 $ 338,202Accrued payroll 24,978 30,939 Accrued expenses and other liabilities 46,792 51,251 Total current liabilities 449,326 420,392Deferred income taxes 18,981 19,905 Operating lease liability 6,677 498 Total Liabilities 474,984 440,795 Stockholders’ Equity:Common stock 296 295Additional paid-in capital 149,530 144,608Retained earnings 946,196 905,890Accumulated other comprehensive (loss) income (208) 78 Treasury stock at cost (143,164) (140,741) Total Stockholders’ Equity 952,650 910,130 Total Liabilities and Stockholders’ Equity $ 1,427,634 $ 1,350,925
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2026 2025 2026 2025Cash Flows (used in) provided by OperatingActivities:Net income $ 33,168 $ 24,789 $ 50,391 $ 38,270Adjustments to reconcile net income to net cash(used in) provided by operating activities:Depreciation and amortization 2,736 2,866 5,533 5,965Adjustments to credit losses reserve 1,557 663 1,796 1,058Stock-based compensation expense 2,653 2,461 5,292 4,669Deferred income taxes (682) — (848) —Amortization of discount on short-terminvestments, net (555) (1,627) (1,444) (1,672)Gain on sale of short-term investments — — — (76)Loss on disposal of fixed assets 24 4 74 20Changes in assets and liabilities:Accounts receivable (66,899) (33,716) (80,599) (26,662)Inventories (10,801) 18,305 (61,528) (38,433)Prepaid expenses and other current assets 1,849 (1,474) 1,074 (4,142)Other non-current assets 66 (1,713) 640 (1,629)Accounts payable (18,758) 30,326 39,328 3,368 Accrued expenses and other liabilities (8,167) (14,626) (9,251) (6,865) Net cash (used in) provided by operating activities (63,809) 26,258 (49,542) (26,129) Cash Flows (used in) provided by InvestingActivities:Purchases of short-term investments (51,380) — (105,650) (52,358)Proceeds from sale of short-term investments — — — 108,763Maturities of short-term investments 49,999 — 103,216 50,000Purchases of property and equipment (1,931) (1,620) (3,915) (3,331) Net cash (used in) provided by investing activities (3,312) (1,620) (6,349) 103,074 Cash Flows used in Financing Activities:Proceeds from short-term borrowings — — — 732Repayment of short-term borrowings — — — (732)Purchase of common stock for treasury shares — (16,725) (2,481) (60,464)Payments for excise tax on purchase of commonstock for treasury shares (678) (36) (678) (36)Dividend payments (5,045) (3,810) (10,085) (7,720)Issuance of common stock under Employee StockPurchase Plan 602 619 602 619Payment of payroll taxes on stock-basedcompensation through shares withheld (300) (399) (971) (918) Net cash used in financing activities (5,421) (20,351) (13,613) (68,519) (Decrease) increase in cash and cash equivalents (72,542) 4,287 (69,504) 8,426 Cash and cash equivalents, beginning of period 196,259 182,457 193,221 178,318 Cash and cash equivalents, end of period $ 123,717 $ 186,744 $ 123,717 $ 186,744 Non-cash Investing and Financing Activities:Accrued purchases of property and equipment $ 111 $ 346 $ 111 $ 346Accrued purchase of treasury shares $ — $ 66 $ — $ 66Accrued excise tax on treasury purchases $ — $ 572 $ — $ 572
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EBITDA AND ADJUSTED EBITDA A reconciliation of EBITDA and Adjusted EBITDA to Net Income is detailed below. Adjusted EBITDA is defined as EBITDA (defined as earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation, severance expenses and non-routine legal settlements. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either includes or excludes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance including our ability to fund our future capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreement. When analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA in addition to, and not as alternatives for Net income or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Three Months Ended June 30, LTM Ended June 30, (1) (amounts in thousands) 2026 2025 % Change 2026 2025 % Change Net income $ 33,168 $ 24,789 34% $ 95,843 $ 86,050 11%Depreciation and amortization 2,736 2,866 (5) 11,271 12,410 (9)Income tax expense 12,369 9,324 33 34,399 30,449 13Interest income (2,532) (3,219) (21) (13,224) (16,790) (21) Interest expense 7 3 133 82 165 (50) EBITDA 45,748 33,763 35 128,371 112,284 14Severance expenses (2) — — — 6,143 2,930 110Legal settlement (3) — — — — (1,700) (100) Stock-based compensation 2,653 2,461 8 9,966 8,947 11 Adjusted EBITDA $ 48,401 $ 36,224 34% $ 144,480 $ 122,461 18% (1) LTM: Last twelve months (2) Severance expenses and other charges in 2026 consisted of voluntary retirement offering and internal restructuringactivities and in 2025 consisted of internal restructuring activities. (3) The Company recorded $1.7 million of other income as a result of a legal settlement received. ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE A reconciliation of Adjusted Net Income to Net Income is detailed below. Adjusted Net Income is defined as Net Income plus severance expenses, net of tax plus or minus loss or income from non-routine legal settlements. A reconciliation of Adjusted Diluted Earnings per Share to Diluted Earnings per Share is detailed below. Adjusted Diluted Earnings per Share is defined as diluted earnings per share adjusted for severance expenses, net of tax. Adjusted Net Income and Adjusted Diluted Earnings Per Share are considered non-GAAP financial measures (see note above in EBITDA and Adjusted EBITDA for a description of non-GAAP financial measures). The Company believes that Adjusted Net Income and Adjusted Diluted Earnings per Share provide helpful information with respect to the Company's operating performance. When analyzing our operating performance, investors should use Adjusted Net Income and Adjusted Diluted Earnings per Share in addition to, and not as alternatives for Net income and Diluted Earnings per Share or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except per share data)2026 2025 % Change 2026 2025 % Change Net income $ 33,168 $ 24,789 34% $ 50,391 $ 38,270 32%Severance expenses (1) — — — 3,060 2,930 4 Tax benefit — — — (829) (799) 4Adjusted Net Income 33,168 24,789 34 52,622 40,401 30 Diluted shares 25,339 25,520 25,309 25,860 Diluted Earnings per Share $ 1.31 $ 0.97 35% $ 1.99 $ 1.48 34% Adjusted Diluted Earnings per Share $ 1.31 $ 0.97 35% $ 2.08 $ 1.56 33% (1) Severance expenses and other charges in 2026 consisted of voluntary retirement offering and internal restructuringactivities and in 2025 consisted of internal restructuring activities.