Power Solutions International Inc. (NASDAQ: PSIX) reported first quarter 2026 net sales of $128.6 million, down 5% from $135.4 million in the prior year period, according to company financial results released May 11.

Net income fell to $7.3 million, or $0.32 per diluted share, compared to $19.1 million, or $0.83 per diluted share, in the first quarter of 2025. The 62% decline in net income reflected lower sales and reduced profitability.

Gross profit decreased 27% to $29.4 million from $40.3 million in the prior year quarter. Gross margin compressed to 22.9% from 29.7% a year earlier, impacted by an unfavorable product mix and elevated production costs from capacity expansion activities at the company's Wisconsin operations.

The sales decline was primarily driven by a $10.2 million decrease in power systems revenue, partially offset by increases of $3.0 million and $0.3 million in industrial and transportation markets, respectively. Chief Executive Officer Dino Xykis cited softer oil and gas demand, timing of power systems shipments, and elevated production costs as factors affecting performance.

Operating expenses increased 15% to $18.0 million from $15.7 million in the prior year period. Research and development expenses rose to $4.8 million from $4.2 million, while selling, general and administrative expenses increased to $13.0 million from $11.1 million.

The company held $45.1 million in cash and cash equivalents and $103.4 million in total debt as of March 31, 2026, compared to $41.3 million in cash and $96.8 million in debt at December 31, 2025.

Power Solutions International designs, engineers and manufactures emission-certified engines and power systems for power generation, industrial and transportation applications.