HAWKINS INC

Previous wording

The following is a discussion and analysis of our financial condition and results of operations for the three and six months ended September 28, 2025 as compared to the similar period ended September 29, 2024. This discussion should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in this quarterly report on Form 10-Q and Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 30, 2025.

Current wording

The following is a discussion and analysis of our financial condition and results of operations for the three and nine months ended December 28, 2025 as compared to the similar period ended December 29, 2024. This discussion should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in this quarterly report on Form 10-Q and Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 30, 2025.

Previous wording

We completed the following acquisitions in fiscal 2025 and the first half of fiscal 2026. The results of operations since the date of each acquisition and the assets, including goodwill associated with these acquisitions, are included in our Water Treatment segment with the exception of the MakWood lactate business which is shown in our Food & Health Sciences segment. Certain acquisitions discussed below are not included in Note 2 to our Condensed Consolidated Financial Statements as they were not deemed to be material enough to warrant disclosure.

Current wording

We completed the following acquisitions in fiscal 2025 and the first nine months of fiscal 2026. The results of operations since the date of each acquisition and the assets, including goodwill associated with these acquisitions, are included in our Water Treatment segment with the exception of the MakWood lactate business which is included in our Food & Health Sciences segment. Certain acquisitions discussed below are not included in Note 2 to our Condensed Consolidated Financial Statements as they were not deemed to be material enough to warrant disclosure.

Previous wording

•On August 29, 2025, we acquired substantially all the assets and assumed certain liabilities of StillWaters Technology, Inc. ("StillWaters") for $4.3 million. StillWaters distributes water treatment chemicals and equipment for its customers in Alabama.

Current wording

•On August 29, 2025, we acquired substantially all the assets and assumed certain liabilities of StillWaters Technology, Inc. ("StillWaters") for $4.3 million. StillWaters distributed water treatment chemicals and equipment for its customers in Alabama.

Previous wording

•On July 1, 2025, we acquired substantially all the assets and assumed certain liabilities of PhillTech, LLC ("PhillTech") for $5.0 million. PhillTech is located in Courtland, AL, and manufactures and distributes coagulants and corrosion control products for its water treatment customers.

Current wording

•On July 1, 2025, we acquired substantially all the assets and assumed certain liabilities of PhillTech, LLC ("PhillTech") for $5.0 million. Located in Courtland, AL, PhillTech manufactured and distributed coagulants and corrosion control products for its water treatment customers.

Previous wording

•On June 13, 2025, we acquired substantially all the assets and assumed certain liabilities of Hendrickson and Polymer Tech (collectively, "Hendrickson") for approximately $1.5 million. Hendrickson distributed water treatment chemicals and equipment to its customers via direct shipments from suppliers.

Current wording

•On June 13, 2025, we acquired substantially all the assets and assumed certain liabilities of Hendrickson Enterprises, LLC and Polymer Technologies, LLC (collectively, "Hendrickson") for approximately $1.5 million. Hendrickson distributed water treatment chemicals and equipment to its customers via direct shipments from suppliers.

Previous wording

•In the first quarter of fiscal 2025, we acquired substantially all the assets and assumed certain liabilities of Wofford for $3.4 million. Wofford distributed water treatment chemicals and equipment to customers mainly in Mississippi.

Current wording

•In the first quarter of fiscal 2025, we acquired substantially all the assets and assumed certain liabilities of Wofford Water Service, Inc. for $3.4 million. Wofford distributed water treatment chemicals and equipment to customers mainly in Mississippi.

Previous wording

The aggregate annual revenue of these nine businesses acquired in fiscal 2025 and fiscal 2026 totaled approximately $106 million, as determined using the applicable twelve-month period preceding each respective acquisition date.

Current wording

The aggregate annual revenue of these ten businesses acquired in fiscal 2025 and fiscal 2026 totaled approximately $116 million, as determined using the applicable twelve-month period preceding each respective acquisition date.

Previous wording

Effective beginning with the first quarter of fiscal 2026, we realigned our reporting segments to reflect organizational changes made and to reflect the way we manage our operations and allocate resources. We believe this realignment better reflects the value our company provides to our customers and our evolution from a bulk commodity distributor into a specialty ingredients company. We now organize and manage our business by the following three segments, each of which meets the definition of reportable segments under ASC 280-10, Segment Reporting: Water Treatment, Food & Health Sciences, and Industrial Solutions. These segments are defined primarily by product and type of customer. Information presented in this quarterly report has been recast to align with the new segments. Additional information regarding these new segments is set forth in Note 13 - Segment Information.

Current wording

Effective beginning with the first quarter of fiscal 2026, we realigned our reporting segments to better reflect how we manage our operations and allocate resources. We believe this realignment better reflects the value our company provides to our customers and our evolution from a bulk commodity distributor into a specialty ingredients company. We now organize and manage our business by the following three segments, each of which meets the definition of reportable segments under ASC 280-10, Segment Reporting: Water Treatment, Food & Health Sciences, and Industrial Solutions. These segments are defined primarily by product and type of customer. Information presented in this quarterly report has been recast to align with the new segments. Additional information regarding these new segments is set forth in Note 13 to our Condensed Consolidated Financial Statements.

Previous wording

Water Treatment Segment. Water Treatment segment sales increased $26.4 million, or 21%, to $150.9 million for the three months ended September 28, 2025, from sales of $124.5 million in the same period a year ago. Sales of bulk commodity products in the Water Treatment segment were approximately 8% of sales dollars in both the current quarter and in the same period a year ago. Sales increased as a result of $23 million of added sales from acquired businesses as well as increased organic sales volumes and improved pricing on certain products.

Current wording

Water Treatment Segment. Water Treatment segment sales increased $20.7 million, or 21%, to $120.5 million for the three months ended December 28, 2025, from sales of $99.8 million in the same period a year ago. Sales of bulk commodity products in the Water Treatment segment were approximately 10% of sales dollars in the current quarter and 9% in the same

Previous wording

Food & Health Sciences Segment. Food & Health Sciences segment sales increased $1.5 million, or 2%, to $72.9 million for the three months ended September 28, 2025, from sales of $71.4 million in the same period a year ago. Sales increased primarily

Current wording

Food & Health Sciences Segment. Food & Health Sciences segment sales decreased $7.7 million, or 10%, to $70.0 million for the three months ended December 28, 2025, from sales of $77.7 million in the same period a year ago. Sales dollars decreased primarily as a result of decreased volumes of our food, health & nutrition, and agricultural products.

Previous wording

Industrial Solutions Segment. Industrial Solutions segment sales increased $5.5 million, or 11%, to $56.6 million for the three months ended September 28, 2025, from sales of $51.1 million in the same period a year ago. Sales of bulk commodity products in the Industrial Solutions segment were approximately 21% of sales dollars in the current quarter and 22% in the same period a year ago. Sales increased primarily as a result of increased sales volumes of certain of our manufactured, blended and repackaged products.

Current wording

Industrial Solutions Segment. Industrial Solutions segment sales increased $4.9 million, or 10%, to $53.6 million for the three months ended December 28, 2025, from sales of $48.7 million in the same period a year ago. Sales of bulk commodity products in the Industrial Solutions segment were approximately 21% of sales dollars in the current quarter and 25% in the same period a year ago. Sales increased primarily as a result of increased sales volumes of certain of our manufactured, blended and repackaged products.

Previous wording

Gross profit increased $7.4 million, or 12%, to $67.6 million, or 24% of sales, for the three months ended September 28, 2025, from $60.2 million, or 24% of sales, in the same period a year ago. During the current quarter, the LIFO reserve increased, and gross profit decreased, by $0.3 million, primarily due to a projected increase in certain commodity volumes and costs at year-end. In the same period a year ago, the LIFO reserve was unchanged and therefore had no impact on gross profit.

Current wording

Gross profit increased $2.4 million, or 5%, to $50.8 million, or 21% of sales, for the three months ended December 28, 2025, from $48.4 million, or 21% of sales, in the same period a year ago. During the current quarter, the LIFO reserve decreased, and gross profit increased, by $0.2 million. In the same period a year ago, the LIFO reserve decreased, and gross profit increased, by $0.8 million.

Previous wording

Water Treatment Segment. Gross profit for the Water Treatment segment increased $7.4 million, or 20%, to $43.3 million, or 29% of sales, for the three months ended September 28, 2025, from $35.9 million, or 29% of sales, in the same period a year ago. Gross profit increased primarily as a result of increased sales from our acquired businesses as well as increased organic sales.

Current wording

Water Treatment Segment. Gross profit for the Water Treatment segment increased $3.7 million, or 14%, to $29.6 million, or 25% of sales, for the three months ended December 28, 2025, from $25.9 million, or 26% of sales, in the same period a year ago. Gross profit increased primarily as a result of increased sales from our acquired businesses as well as increased sales in our legacy business.

Previous wording

Food & Health Sciences Segment. Gross profit for the Food & Health Sciences segment decreased $0.6 million, or 4%, to $15.5 million, or 21% of sales, for the three months ended September 28, 2025, from $16.1 million, or 22% of sales, in the same period a year ago. Gross profit decreased primarily as a result of lower selling prices as a result of competitive pricing pressures.

Current wording

Food & Health Sciences Segment. Gross profit for the Food & Health Sciences segment decreased $2.5 million, or 15%, to $13.8 million, or 20% of sales, for the three months ended December 28, 2025, from $16.3 million, or 21% of sales, in the same period a year ago. Gross profit decreased primarily as a result of the decrease in sales.

Previous wording

Industrial Solutions Segment. Gross profit for the Industrial Solutions segment increased $0.7 million, or 9%, to $8.9 million, or 16% of sales, for the three months ended September 28, 2025, from $8.2 million, or 16% of sales, in the same period a year ago. Gross profit increased as a result of the increase in sales.

Current wording

Industrial Solutions Segment. Gross profit for the Industrial Solutions segment increased $1.1 million, or 18%, to $7.4 million, or 14% of sales, for the three months ended December 28, 2025, from $6.3 million, or 13% of sales, in the same period a year ago. Gross profit increased as a result of the increase in sales.

Previous wording

Selling, general and administrative (“SG&A”) expenses increased $7.2 million, or 27%, to $33.7 million, or 12% of sales, for the three months ended September 28, 2025, from $26.5 million, or 11% of sales, in the same period a year ago. Expenses increased largely due to $5.6 million in added costs from the acquired businesses in our Water Treatment segment, including amortization of intangibles of $2.5 million and $0.5 million of fair value accretion on earnout liabilities. SG&A expenses also increased due to increases in other variable costs, including variable pay and other personnel costs.

Current wording

Selling, general and administrative (“SG&A”) expenses increased $0.9 million, or 3%, to $28.3 million, or 12% of sales, for the three months ended December 28, 2025, from $27.4 million, or 12% of sales, in the same period a year ago. This included $5.4 million due to added costs from the acquired businesses in our Water Treatment segment, largely offset by a year-over-year reduction of $4.6 million due to a fair value adjustment recorded to the Water Solutions earnout liability as a result of a change in projected estimates related to the earnout target. The primary components of the $5.4 million of costs related to the acquired businesses were personnel and operating costs, $2.3 million of intangible amortization and $0.5 million of fair value accretion on the WaterSurplus earnout liability.

Previous wording

Operating income increased $0.2 million, or 1%, to $33.9 million, or 12% of sales, for the three months ended September 28, 2025, from $33.7 million, or 14% of sales, in the same period a year ago due to the combined impact of the factors discussed above.

Current wording

Operating income increased $1.5 million, or 7%, to $22.6 million, or 9% of sales, for the three months ended December 28, 2025, from $21.1 million, or 9% of sales, in the same period a year ago due to the combined impact of the factors discussed above.

Previous wording

Interest expense increased $2.4 million to $3.8 million for the three months ended September 28, 2025 compared to $1.4 million in the same period a year ago. Interest expense increased due to increased borrowings in the current quarter, primarily to fund the acquisition of WaterSurplus.

Current wording

Interest expense increased $2.2 million to $3.4 million for the three months ended December 28, 2025 compared to $1.2 million in the same period a year ago. Interest expense increased due to increased borrowings in the current year, primarily to fund the acquisition of WaterSurplus.

Previous wording

Other income was $0.7 million for the three months ended September 28, 2025 and the same period a year ago. The income represents gains recorded on investments held for our non-qualified deferred compensation plan. The amounts recorded as a gain were offset by similar amounts recorded as an increase to compensation expense within SG&A expenses.

Current wording

Other income was $0.5 million for the three months ended December 28, 2025 and the same period a year ago. The income represents gains recorded on investments held for our non-qualified deferred compensation plan. The amounts recorded as a gain were offset by similar amounts recorded as an increase to compensation expense within SG&A expenses.

Previous wording

Our effective income tax rate was 26% for both the six months ended September 28, 2025 and the same period a year ago. The effective tax rate for both the six months ended September 28, 2025 and the same period a year ago were impacted by favorable tax provision adjustments recorded. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is currently expected to be approximately 26% to 27%.

Current wording

Our effective income tax rate was approximately 27% the three months ended December 28, 2025 and 26% for the same period a year ago. The effective tax rate in the prior year period was impacted by favorable tax provision adjustments recorded. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is expected to be approximately 26% to 27%.

Previous wording

Water Treatment Segment. Water Treatment segment sales increased $58.8 million, or 24%, to $300.5 million for the six months ended September 28, 2025, from sales of $241.7 million in the same period a year ago. Sales of bulk commodity products in the Water Treatment segment were approximately 8% of sales dollars in the current period and 9% in the same period a year ago. Sales increased as a result of $52 million of added sales from acquired businesses as well as increased organic sales volumes and improved pricing on certain of our products.

Current wording

Water Treatment Segment. Water Treatment segment sales increased $79.5 million, or 23%, to $421.0 million for the nine months ended December 28, 2025, from sales of $341.5 million in the same period a year ago. Sales of bulk commodity products in the Water Treatment segment were approximately 9% of sales dollars in both the current period and in the same period a year ago. Sales increased as a result of approximately $70 million of added sales from acquired businesses as well as improved pricing and increased sales volumes on certain of our products in our legacy business.

Previous wording

Food & Health Sciences. Food & Health Sciences sales increased $5.6 million or 4%, to $162.1 million for the six months ended September 28, 2025, from sales of $156.5 million in the same period a year ago. Sales of our agricultural products increased $5.8 million due to increased volumes, partially offset by declines in some of our other product lines as a result of lower selling prices driven by competitive pricing pressures.

Current wording

Food & Health Sciences. Food & Health Sciences sales decreased $2.1 million or 1%, to $232.1 million for the nine months ended December 28, 2025, from sales of $234.2 million in the same period a year ago. Sales of our agricultural products increased $4.4 million due to increased volumes, partially offset by declines in some of our other product lines as a result of lower selling prices driven by competitive pricing pressures.

Previous wording

Industrial Solutions Segment. Industrial Solutions segment sales increased $6.4 million, or 6%, to $111.1 million for the six months ended September 28, 2025, from sales of $104.7 million in the same period a year ago. Sales of bulk commodity products in the Industrial Solutions segment were approximately 21% of sales dollars in the current period and 22% in the same period a year ago. Sales increased primarily as a result of increased sales of certain of our manufactures, blended and repackaged products.

Current wording

Industrial Solutions Segment. Industrial Solutions segment sales increased $11.3 million, or 7%, to $164.7 million for the nine months ended December 28, 2025, from sales of $153.4 million in the same period a year ago. Sales of bulk commodity products in the Industrial Solutions segment were approximately 21% of sales dollars in the current period and 23% in the same period a year ago. Sales increased primarily as a result of increased sales volumes of certain of our manufactured, blended and repackaged products.

Previous wording

Gross profit increased $15.1 million, or 12%, to $140.0 million, or 24% of sales, for the six months ended September 28, 2025, from $124.9 million, or 25% of sales, in the same period a year ago. During the current period, the LIFO reserve increased, and gross profit decreased, by $0.9 million due primarily to a projected increase in certain commodity volumes and costs at year end. In the same period a year ago, the LIFO reserve increased, and gross profit decreased, by $0.4 million.

Current wording

Gross profit increased $17.5 million, or 10%, to $190.8 million, or 23% of sales, for the nine months ended December 28, 2025, from $173.3 million, or 24% of sales, in the same period a year ago. During the current period, the LIFO reserve increased, and gross profit decreased, by $0.8 million due primarily to a projected increase in certain commodity volumes and costs at year end. In the same period a year ago, the LIFO reserve decreased, and gross profit increased, by $0.3 million.

Previous wording

Water Treatment Segment. Gross profit for the Water Treatment segment increased $15.9 million, or 22%, to $87.0 million, or 29% of sales, for the six months ended September 28, 2025, from $71.1 million, or 29% of sales, in the same period a year ago. Gross profit increased primarily as a result of increased sales from our acquired businesses, as well as increased organic sales.

Current wording

Water Treatment Segment. Gross profit for the Water Treatment segment increased $19.6 million, or 20%, to $116.6 million, or 28% of sales, for the nine months ended December 28, 2025, from $97.0 million, or 28% of sales, in the same period a year ago. Gross profit increased primarily as a result of increased sales from our acquired businesses, as well as increased sales in our legacy business.

Previous wording

Food & Health Sciences. Gross profit for the Food & Health Sciences segment decreased $1.1 million, or 3% to $34.8 million, or 21% of sales, for the six months ended September 28, 2025, from $36.0 million, or 23% of sales, in the same period a year ago. Gross profit decreased primarily as a result of lower selling prices resulting from competitive pricing pressures.

Current wording

Food & Health Sciences. Gross profit for the Food & Health Sciences segment decreased $3.6 million, or 7% to $48.7 million, or 21% of sales, for the nine months ended December 28, 2025, from $52.3 million, or 22% of sales, in the same period a year ago. Gross profit decreased primarily as a result of the reduction in sales as well as lower selling prices resulting from competitive pricing pressures.

Previous wording

Industrial Solutions Segment. Gross profit for our Industrial Solutions segment increased $0.4 million, or 2%, to $18.2 million, or 16% of sales, for the six months ended September 28, 2025, from $17.8 million, or 17% of sales, in the same period a year ago. Gross profit increased as a result of the increase in sales.

Current wording

Industrial Solutions Segment. Gross profit for our Industrial Solutions segment increased $1.5 million, or 6%, to $25.6 million, or 16% of sales, for the nine months ended December 28, 2025, from $24.1 million, or 16% of sales, in the same period a year ago. Gross profit increased as a result of the increase in sales.

Previous wording

SG&A expenses increased $13.4 million, or 26%, to $64.7 million, or 11% of sales, for the six months ended September 28, 2025, from $51.3 million, or 10% of sales, in the same period a year ago. Expenses increased largely due to $10.4 million in added costs from the acquired businesses in our Water Treatment segment, including amortization of intangibles of $4.5 million, fair value accretion on earnout liability of $0.9 million, and $0.7 million of acquisition costs. In addition, a year-over-year increase of $0.8 million in compensation expense related to our non-qualified deferred compensation plan increased SG&A expenses, with the offset in Other Income. In the current year, we recorded a reduction to SG&A expense of $1.9 million related to fair value accretion previously recorded on the Water Solutions earnout due to a change in projections. SG&A expenses also increased due to increases in other variable costs, including variable pay and personnel costs

Current wording

SG&A expenses increased $14.3 million, or 18%, to $93.0 million, or 11% of sales, for the nine months ended December 28, 2025, from $78.7 million, or 11% of sales, in the same period a year ago. This included $16.0 million in added costs from the acquired businesses in our Water Treatment segment, partially offset by a year-over-year reduction of $7.2 million due to a fair value adjustment recorded to the Water Solutions earnout liability due to a change in projected estimates related to the earnout target. The primary components of the $16.0 million in costs related to acquired businesses were personnel and operating costs, $6.8 million of amortization of intangibles, $1.4 million of fair value accretion on the WaterSurplus earnout liability and $1.2 million of acquisition costs. In addition, a year-over-year increase of $0.9 million in compensation expense related to our non-qualified deferred compensation plan increased SG&A expenses, with the offset in Other Income. SG&A expenses also increased due to increases in other variable costs, including variable pay and personnel costs.

Previous wording

Operating income increased $1.8 million, or 2%, to $75.3 million, or 13% of sales, for the six months ended September 28, 2025, from $73.5 million, or 15% of sales, in the same period a year ago due to the combined impact of the factors discussed above.

Current wording

Operating income increased $3.2 million, or 3%, to $97.8 million, or 12% of sales, for the nine months ended December 28, 2025, from $94.6 million, or 13% of sales, in the same period a year ago due to the combined impact of the factors discussed above.

Previous wording

Interest expense increased $4.4 million to $7.1 million for the six months ended September 28, 2025, from $2.7 million in the same period a year ago. Interest expense increased due to an increase in outstanding borrowings in the current year, primarily to fund the acquisition of WaterSurplus.

Current wording

Interest expense increased $6.6 million to $10.5 million for the nine months ended December 28, 2025, from $3.9 million in the same period a year ago. Interest expense increased due to increased borrowings in the current year, primarily to fund the acquisition of WaterSurplus.

Previous wording

Other income was $1.7 million for the six months ended September 28, 2025 compared to $0.8 million in the same period a year ago. The income represents gains recorded on investments held for our non-qualified deferred compensation plan. The amounts recorded as a gain were offset by similar amounts recorded as an increase to compensation expense within SG&A expenses.

Current wording

Other income was $2.1 million for the nine months ended December 28, 2025 compared to $1.3 million in the same period a year ago. The income represents gains recorded on investments held for our non-qualified deferred compensation plan. The amounts recorded as a gain were offset by similar amounts recorded as an increase to compensation expense within SG&A expenses.

Previous wording

Our effective income tax rate was approximately 27% the three months ended September 28, 2025 and for the same period a year ago. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is expected to be approximately 26% to 27%.

Current wording

Our effective income tax rate was 26% for both the nine months ended December 28, 2025 and the same period a year ago. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is currently expected to be approximately 26% to 27%.

Previous wording

Cash was $10.4 million at September 28, 2025, an increase of $5.3 million as compared with the $5.1 million available as of March 30, 2025.

Current wording

Cash was $8.2 million at December 28, 2025, an increase of $3.1 million as compared with the $5.1 million available as of March 30, 2025.

Previous wording

Cash provided by operating activities was $71.0 million for the six months ended September 28, 2025, compared to cash provided by operating activities of $59.2 million in the same period a year ago. The year-over-year increase in cash provided by operating activities in the current period was primarily driven by favorable year-over-year changes in trade receivables compared to the same period a year ago. Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, the timing of purchases can result in significant changes in working capital investment and the resulting operating cash flow.

Current wording

Cash provided by operating activities was $106.6 million for the nine months ended December 28, 2025, compared to cash provided by operating activities of $80.3 million in the same period a year ago. The year-over-year increase in cash provided by operating activities in the current period was primarily driven by favorable year-over-year changes in trade receivables and inventories compared to the same period a year ago. Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, the timing of purchases can result in significant changes in working capital investment and the resulting operating cash flow.

Previous wording

Cash used in investing activities was $185.8 million for the six months ended September 28, 2025, compared to $46.3 million in the same period a year ago. In the current period, we incurred acquisition spending of$162.5 million, including the acquisition of WaterSurplus for approximately $149.9 million paid at closing. Capital expenditures were $24.3 million for the current period, compared to $21.3 million in the same period a year ago. In the current period, we had more investments in transportation equipment, resulting in an increase in overall capital expenditures compared to the prior year.

Current wording

Cash used in investing activities was $204.6 million for the nine months ended December 28, 2025, compared to $72.8 million in the same period a year ago. In the current period, we incurred acquisition spending of$167.1 million, including the acquisition of WaterSurplus for approximately $149.9 million paid at closing. Capital expenditures were $38.7 million for the current period, compared to $30.0 million in the same period a year ago. In the current period, we expended $4.2 million more for real estate and building expansions, contributing to the overall increase in capital expenditures compared to the prior year.

Previous wording

Cash provided by financing activities was $120.1 million for the six months ended September 28, 2025, compared to $12.5 million of cash used in financing activities in the same period a year ago. Included in financing activities in the current period were net debt borrowings of $130.0 million, compared to net debt borrowings of $5.0 million in the same period a year ago. We drew approximately $150 million of the proceeds from the Revolving Loan Facility for the acquisition of WaterSurplus. In addition, we repurchased no common stock in the current period, compared to $9.1 million in the same period of the prior year.

Current wording

Cash provided by financing activities was $101.1 million for the nine months ended December 28, 2025, compared to $6.3 million of cash used in financing activities in the same period a year ago. Included in financing activities in the current period were net debt borrowings of $115.0 million, compared to net debt borrowings of $15.0 million in the same period a year ago. We drew approximately $150 million of the proceeds from the Revolving Loan Facility for the acquisition of WaterSurplus. In addition, we repurchased no common stock in the current period, compared to $9.1 million in the same period of the prior year.

Previous wording

Our Board has authorized the repurchase of up to 2.6 million shares of our outstanding common shares. The shares may be purchased on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. The primary objective of the share repurchase program is to offset the impact of dilution from issuances relating to employee and director equity grants and our employee stock purchase program. During the three and six months ended September 28, 2025, we repurchased no shares of common stock. During the three months ended September 29, 2024, we repurchased no shares of common stock and during the six months ended September 29, 2024, we repurchased 105,541 shares of common stock with an aggregate purchase price of $9.1 million. As of September 28, 2025, 731,544 shares remained available to be repurchased under the share repurchase program.

Current wording

Our Board has authorized the repurchase of up to 2.6 million shares of our outstanding common shares. The shares may be purchased on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. The primary objective of the share repurchase program is to offset the impact of dilution from issuances relating to employee and director equity grants and our employee stock purchase program. During the three and nine months ended December 28, 2025, we repurchased no shares of common stock. During the three months ended December 29, 2024, we repurchased no shares of common stock and during the nine months ended December 29, 2024, we repurchased 105,541 shares of common stock with an aggregate purchase price of $9.1 million. As of December 28, 2025, 731,544 shares remained available to be repurchased under the share repurchase program.

Previous wording

We are party to a second amended and restated credit agreement with U.S. Bank National Association (“U.S. Bank”) as Administrative Agent, Sole Lead Arranger and Sole Book Runner, and the other lenders from time to time party thereto (collectively, the “Lenders”), dated as of March 31, 2022 (the “Existing Credit Agreement” and as amended, restated or modified from time to time, and as modified by the Amendment, the “Credit Agreement”). The Joinder, Consent and Second Amendment to Second Amended and Restated Credit Agreement, dated April 25, 2025 increased the revolving commitment under the Existing Credit Agreement to provide us with senior secured revolving credit facilities (the “Revolving Loan Facility”) totaling $400.0 million. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and $25.0 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 25, 2030. The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries. We may use the amount available under the Revolving Loan Facility for working capital, capital expenditures, share repurchases, restricted payments and acquisitions permitted under the Credit Agreement, and other general corporate purposes.

Current wording

We are party to a second amended and restated credit agreement with U.S. Bank National Association (“U.S. Bank”) as administrative agent, sole lead arranger and sole book runner, and the other lenders from time to time party thereto (collectively, the “Lenders”), dated as of March 31, 2022 (as amended, restated or modified from time to time, the “Credit Agreement”). A Joinder, Consent and Second Amendment, dated April 25, 2025 increased the revolving commitment under the Credit Agreement to provide us with senior secured revolving credit facilities (the “Revolving Loan Facility”) totaling $400.0 million. A Third Amendment, dated October 15, 2025, modified terms related to qualified receivables transactions, as defined in the Credit Agreement. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and $25.0 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 25, 2030. The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries. We may

Previous wording

Borrowings under the Revolving Loan Facility bear interest at a rate per annum equal to one of the following, plus, in both cases, an applicable margin based upon our leverage ratio: (a) Term SOFR, for an interest period of one, three or six months as selected by us, reset at the end of the selected interest period, or (b) a base rate determined by reference to the highest of (1) U. S. Bank’s prime rate, (2) the Federal Funds Effective Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 1.0% and 1.85%, depending on our leverage ratio. The base rate margin is between 0.00% and 0.85%, depending on our leverage ratio. At September 28, 2025, the effective interest rate on our borrowings was 5.1%.

Current wording

Borrowings under the Revolving Loan Facility bear interest at a rate per annum equal to one of the following, plus, in both cases, an applicable margin based upon our leverage ratio: (a) Term SOFR, for an interest period of one, three or six months as selected by us, reset at the end of the selected interest period, or (b) a base rate determined by reference to the highest of (1) U. S. Bank’s prime rate, (2) the Federal Funds Effective Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 1.0% and 1.85%, depending on our leverage ratio. The base rate margin is between 0.00% and 0.85%, depending on our leverage ratio. At December 28, 2025, the effective interest rate on our borrowings was 4.8%.

Previous wording

Debt issuance costs paid to the Lenders are being amortized as interest expense over the term of the Credit Agreement. As of September 28, 2025, the unamortized balance of these costs was $0.9 million, and is reflected as a reduction of debt on our balance sheet.

Current wording

Debt issuance costs paid to the Lenders are being amortized as interest expense over the term of the Credit Agreement. As of December 28, 2025, the unamortized balance of these costs was $0.8 million, and is reflected as a reduction of debt on our balance sheet.