METHODE ELECTRONICS INC

Previous wording

Impact from production delays or cancelled orders;

Current wording

• Production delays or cancelled orders;

Previous wording

There is continued uncertainty about the future relationship between the U.S. and various other countries with respect to tariffs, trade policies, government regulations, treaties and trade agreements. We are exposed to market risk with respect to increased and volatile duties assessed on raw materials (including copper, steel and aluminum), component parts (including semiconductors) and finished goods we import into the U.S. from our various manufacturing sites, including those in Mexico, China, Egypt, Europe and Canada. Should any of these tariffs expand, raw materials and finished goods that we import will face higher prices, which could lead to reduced margins or increased prices that could, in turn, cause decreased customer demand. To the extent that we are unable to obtain price increases or there is a significant decrease in customer demand, the impact of new or higher tariffs could have a material impact on our results of operations.

Current wording

There is continued uncertainty about the future relationship between the U.S. and various other countries with respect to tariffs, trade policies, government regulations, treaties and trade agreements. We are exposed to market risk with respect to increased and volatile duties assessed on raw materials (including copper, steel and aluminum), component parts (including semiconductors), and finished goods we import into the U.S. from our various manufacturing sites, including those in Mexico, China, Egypt, Europe and Canada. Should any of these tariffs or other trade barriers expand, raw materials and finished goods that we import will face higher prices, which could lead to reduced margins or increased prices that could, in turn, cause decreased customer demand. To the extent that we are unable to obtain price increases or there is a significant decrease in customer demand, new or higher tariffs could have a material effect on our results of operations.

Previous wording

Our business in the future will be impacted by the broad trend of electrification. The adoption of EVs has been slower than anticipated, which may impact our financial condition and results of operations. In addition, there are various government policies, subsidies, and economic incentives designed to increase EV adoption in many jurisdictions. There is no guarantee these incentive programs will be available in the future.

Current wording

Our business in the future will be affected by the broad trend of electrification. The adoption of EVs has been slower than anticipated, which may affect our financial condition and results of operations. In addition, there are various government policies, subsidies, and economic incentives designed to increase EV adoption. There is no guarantee these incentive programs will be available in the future.

Previous wording

Although we saw improvements in our supply chain in fiscal 2025, including easing of the worldwide semiconductor supply shortage, new supply chain disruptions may occur in the future. In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. Changes in government regulations in areas including, but not limited to, trade and tariff regulations as noted above, could also increase our costs. We continue to work closely with suppliers and customers to minimize the potential adverse impact from global supply chain disruptions. However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse impact on our financial condition, results of operations and cash flows.

Current wording

We continue to face a variety of supply chain challenges in fiscal 2026, including the procurement of automotive-grade semiconductors. In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. Changes in government regulations in areas including, but not limited to, trade and tariff regulations as noted above, could also increase our costs. We continue to work closely with suppliers and customers to mitigate and minimize the potential adverse effect from global supply chain disruptions. However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse effect on our financial condition, results of operations, and cash flows.

Previous wording

The table below compares our results of operations between the three months ended August 2, 2025 and the three months ended July 27, 2024:

Current wording

The table below compares our results of operations between the three and six months ended November 1, 2025 and the three and six months ended November 2, 2024:

Previous wording

Net sales decreased $18.0 million, or 7.0%, to $240.5 million in the three months ended August 2, 2025, compared to $258.5 million in the three months ended July 27, 2024. Foreign currency translation increased net sales by $7.4 million. Excluding foreign currency translation, net sales decreased $25.4 million. The decrease was primarily due to lower sales volumes in the Automotive segment, partially offset by higher sales volumes in the Industrial segment.

Current wording

Net sales decreased $63.7 million, or 11.6%, to $487.4 million in the six months ended November 1, 2025, compared to $551.1 million in the six months ended November 2, 2024. Foreign currency translation increased net sales by $13.3 million. Excluding foreign currency translation, net sales decreased $77.0 million. The decrease was primarily due to lower sales volumes in the Automotive segment.

Previous wording

Cost of products sold decreased $16.9 million, or 7.9%, to $197.0 million (81.9% of net sales) in the three months ended August 2, 2025, compared to $213.9 million (82.7% of net sales) in the three months ended July 27, 2024. Foreign currency translation increased cost of products sold by $5.7 million. Excluding foreign currency translation, cost of products sold decreased $22.6 million. The decrease was primarily due to lower material, freight and operating costs as a result of lower sales volumes.

Current wording

Cost of products sold decreased $35.5 million, or 15.1%, to $199.2 million (80.7% of net sales) in the three months ended November 1, 2025, compared to $234.7 million (80.2% of net sales) in the three months ended November 2, 2024. Foreign currency translation increased cost of products sold by $4.7 million. Excluding foreign currency translation, cost of products sold decreased $40.2 million. The decrease was primarily due to lower material and freight costs as a result of lower sales volumes, lower compensation expense, and a decrease in non-cash inventory reserve adjustments.

Previous wording

Gross profit margin was 18.1% of net sales in the three months ended August 2, 2025, compared to 17.3% of net sales in the three months ended July 27, 2024. The increase in gross profit margin was primarily a result of product mix from higher sales in the Industrial segment.

Current wording

Gross profit margin was 19.3% of net sales in the three months ended November 1, 2025, compared to 19.8% of net sales in the three months ended November 2, 2024. The decrease in gross profit margin was primarily a result of lower sales volume and product mix in the Automotive segment.

Previous wording

Selling and administrative expenses decreased $9.6 million, or 20.8%, to $36.6 million (15.2% of net sales) in the three months ended August 2, 2025, compared to $46.2 million (17.9% of net sales) in the three months ended July 27, 2024. Foreign currency translation increased selling and administrative expenses by $0.6 million. Excluding foreign currency translation, selling and administrative expenses decreased $10.2 million. The decrease was primarily due to lower professional fees and compensation expense.

Current wording

Selling and administrative expenses decreased $3.6 million, or 8.5%, to $39.0 million (15.8% of net sales) in the three months ended November 1, 2025, compared to $42.6 million (14.6% of net sales) in the three months ended November 2, 2024. Excluding foreign currency translation, selling and administrative expenses decreased $4.1 million. The decrease was due to lower professional fees and bad debt expense, partially offset by higher compensation expense. Restructuring and asset impairment charges included within selling and administrative expenses were $1.0 million in the three months ended November 1, 2025.

Previous wording

Amortization of intangibles was $5.8 million in the three months ended August 2, 2025, compared to $5.9 million in the three months ended July 27, 2024.

Current wording

Amortization of intangibles was $5.8 million in the three months ended November 1, 2025, compared to $5.9 million in the three months ended November 2, 2024. Amortization of intangibles was $11.6 million in the six months ended November 1, 2025, compared to $11.8 million in the six months ended November 2, 2024.

Previous wording

Interest expense, net was $5.9 million in the three months ended August 2, 2025, compared to $4.8 million in the three months ended July 27, 2024. The increase was due to a higher level of borrowings and increased interest rates under our credit facility.

Current wording

Interest expense, net was $11.6 million in the six months ended November 1, 2025, compared to $11.0 million in the six months ended November 2, 2024. The increase was due to a higher level of borrowings, partially offset by lower interest rates.

Previous wording

Other expense, net was $1.3 million in the three months ended August 2, 2025, compared to $0.8 million in the three months ended July 27, 2024. Net foreign exchange loss was $1.5 million in the three months ended August 2, 2025, compared to $0.6 million in the three months ended July 27, 2024.

Current wording

Other expense, net was $1.4 million in the three months ended November 1, 2025, compared to $1.6 million in the three months ended November 2, 2024. Net foreign exchange loss was $1.5 million in the three months ended November 1, 2025, compared to $1.7 million in the three months ended November 2, 2024.

Previous wording

In the three months ended August 2, 2025, other expense, net included a non-cash write-off of $0.6 million of unamortized debt issuance costs compared to $1.2 million in the three months ended July 27, 2024. Other expense, net also includes $0.5 million of a net gain on sale of assets in the three months ended August 2, 2025.

Current wording

Other expense, net was $2.7 million in the six months ended November 1, 2025, compared to $2.4 million in the six months ended November 2, 2024. Net foreign exchange loss was $3.0 million in the six months ended November 1, 2025, compared to $2.3 million in the six months ended November 2, 2024. Other expense, net in the six months ended November 1, 2025 includes a non-cash write-off of $0.6 million of unamortized debt issuance costs, compared to $1.2 million in the six months ended November 2, 2024. Other expense, net also includes $0.5 million of a net gain on sale of assets in the six months ended November 1, 2025, compared to $0.3 million in the six months ended November 2, 2024. In addition, we received $0.1 million of international government assistance in the six months ended November 1, 2025, compared to $1.0 million in the six months ended November 2, 2024.

Previous wording

Income tax expense was $4.2 million (-68.9% effective tax rate) in the three months ended August 2, 2025, compared to $5.2 million (-39.7% effective tax rate) in the three months ended July 27, 2024.

Current wording

Income tax expense was $5.7 million (-135.7% effective tax rate) in the three months ended November 1, 2025, compared to $3.2 million (200.0% effective tax rate) in the three months ended November 2, 2024. Income tax expense was $9.9 million (-96.1% effective tax rate) in the six months ended November 1, 2025, compared to $8.4 million (-73.0% effective tax rate) in the six months ended November 2, 2024.

Previous wording

The effective tax rate for the three months ended August 2, 2025 differs from the U.S. federal statutory tax rate of 21% primarily due to an increase in a valuation allowance for U.S. deferred tax assets, an unfavorable impact from global intangible low-tax income and non-deductible interest, partially offset by the impact of income derived from foreign operations with lower statutory tax rates. The effective tax rate for the three months ended July 27, 2024 differs from the U.S. federal statutory tax rate of 21% primarily due to income derived from foreign operations with lower statutory tax rates and research deductions claimed in foreign jurisdictions, partially offset by global intangible low-tax income and non-deductible expenses.

Current wording

The effective tax rate for the three and six months ended November 1, 2025 differs from the U.S. federal statutory tax rate of 21% primarily due to an increase in a valuation allowance for U.S. deferred tax assets, an unfavorable effect from global intangible low-tax income, and non-deductible interest, partially offset by the effect of income derived from foreign operations with lower statutory tax rates. The effective tax rate for the three and six months ended November 2, 2024 differs from the U.S. federal statutory tax rate of 21% primarily due to an increase in a valuation allowance for U.S. deferred tax assets and global intangible low-tax income, partially offset by income derived from foreign operations with lower statutory tax rates and research deductions claimed in foreign jurisdictions and foreign exchange loss.

Previous wording

Net loss was $10.3 million in the three months ended August 2, 2025, compared to $18.3 million in the three months ended July 27, 2024. The net loss was a result of the reasons described above.

Current wording

Net loss was $9.9 million in the three months ended November 1, 2025, compared to $1.6 million in the three months ended November 2, 2024. Net loss was $20.2 million in the six months ended November 1, 2025, compared to $19.9 million in the six months ended November 2, 2024. The net loss was a result of the reasons described above.

Previous wording

Net sales in North America decreased $29.7 million to $36.6 million in the three months ended August 2, 2025, compared to $66.3 million in the three months ended July 27, 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches. Net sales in EMEA increased $2.3 million to $61.6 million in the three months ended August 2, 2025, compared to $59.3 million in the three months ended July 27, 2024. Excluding foreign currency translation, net sales in EMEA decreased $1.4 million due to lower sales volumes of sensor products. Net sales in Asia decreased $1.3 million to $7.9 million in the three months ended August 2, 2025, compared to $9.2 million in the three months ended July 27, 2024. Excluding foreign currency translation, net sales in Asia decreased $1.4 million primarily due to lower sales of products for EVs.

Current wording

Net sales in North America decreased $29.5 million to $40.2 million in the three months ended November 1, 2025, compared to $69.7 million in the three months ended November 2, 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches. Net sales in EMEA decreased $5.9 million to $60.6 million in the three months ended November 1, 2025, compared to $66.5 million in the three months ended November 2, 2024. Excluding foreign currency translation, net sales in EMEA decreased $9.3 million due primarily to lower sales volumes of sensor and user interface products. Net sales in Asia increased $0.4 million to $9.7 million in the three months ended November 1, 2025, compared to $9.3 million in the three months ended November 2, 2024. Excluding foreign currency translation, net sales in Asia increased $0.5 million primarily due to higher sales volumes.

Previous wording

Automotive segment gross profit decreased $8.5 million, or 98.8%, to $0.1 million in the three months ended August 2, 2025, compared to $8.6 million in the three months ended July 27, 2024. Excluding foreign currency translation, gross profit decreased $8.9 million. Gross profit margins decreased to 0.1% in the three months ended August 2, 2025, compared to 6.4% in the three months ended July 27, 2024. The decrease in gross profit was primarily due to lower sales volumes in North America, partially offset by lower freight and warranty costs.

Current wording

Automotive segment gross profit decreased $12.0 million, or 84.5%, to $2.2 million in the three months ended November 1, 2025, compared to $14.2 million in the three months ended November 2, 2024. Excluding foreign currency translation, gross profit decreased $12.5 million. Gross profit margins decreased to 2.0% in the three months ended November 1, 2025, compared to 9.8% in the three months ended November 2, 2024. The decrease in gross profit was primarily due to lower sales volumes in North America.

Previous wording

Automotive segment loss from operations was $12.5 million in the three months ended August 2, 2025, compared to $5.7 million in the three months ended July 27, 2024. The higher loss from operations was due to lower gross profit, partially offset by lower selling and administrative expenses. Selling and administrative expenses decreased primarily due to lower compensation expense.

Current wording

Automotive segment loss from operations was $23.4 million in the six months ended November 1, 2025, compared to $5.0 million in the six months ended November 2, 2024. The decrease was primarily due to lower gross profit, partially offset by lower selling and administrative expenses and amortization expense.

Previous wording

The increase was due to higher sales volumes of power products, including for data centers, and lighting products for off-road equipment markets, partially offset by lower sales volumes for radio remote control devices and lighting products for commercial vehicles.

Current wording

Industrial segment net sales increased $7.5 million, or 3.1%, to $250.4 million in the six months ended November 1, 2025, compared to $242.9 million in the six months ended November 2, 2024. Excluding foreign currency translation, net sales increased $1.3 million. The increase was due to higher sales volumes of power products and lighting products for off-road equipment markets, partially offset by lower sales volumes for lighting products for commercial vehicles and radio remote control devices.

Previous wording

Industrial segment gross profit increased $6.9 million, or 21.0%, to $39.7 million in the three months ended August 2, 2025, compared to $32.8 million in the three months ended July 27, 2024. Excluding foreign currency translation, gross profit increased $5.6 million. Gross profit margins increased to 32.1% in the three months ended August 2, 2025, compared to 29.4% in the three months ended July 27, 2024. Gross profit improved due to higher sales volumes and lower freight costs.

Current wording

Industrial segment gross profit increased $4.4 million, or 11.6%, to $42.4 million in the three months ended November 1, 2025, compared to $38.0 million in the three months ended November 2, 2024. Excluding foreign currency translation, gross profit increased $3.6 million. Gross profit margins increased to 33.4% in the three months ended November 1, 2025, compared to 28.9% in the three months ended November 2, 2024. Gross profit improved due to lower material and freight costs.

Previous wording

Interface segment income from operations increased $1.1 million, or 57.9%, to $3.0 million in the three months ended August 2, 2025, compared to $1.9 million in the three months ended July 27, 2024. The increase was primarily due to higher gross profit and lower selling and administrative expenses.

Current wording

Industrial segment income from operations increased $5.0 million, or 20.6%, to $29.3 million in the three months ended November 1, 2025, compared to $24.3 million in the three months ended November 2, 2024. Excluding foreign currency translation, income from operations increased $4.5 million. The increase was primarily due to higher gross profit and lower selling and administrative expenses.

Previous wording

Industrial segment income from operations increased $9.6 million, or 56.8%, to $26.5 million in the three months ended August 2, 2025, compared to $16.9 million in the three months ended July 27, 2024. Excluding foreign currency translation, income from operations increased $8.6 million. The increase was primarily due to higher gross profit and lower selling and administrative expenses. The decrease in selling and administrative expenses was primarily due to lower legal fees.

Current wording

Industrial segment income from operations increased $14.6 million, or 35.4%, to $55.8 million in the six months ended November 1, 2025, compared to $41.2 million in the six months ended November 2, 2024. Excluding foreign currency translation, income from operations increased $13.2 million. The increase was primarily due to higher gross profit and lower selling and administrative expenses. The decrease in selling and administrative expenses was primarily due to lower legal fees.

Previous wording

Interface segment net sales decreased $1.3 million, or 10.7% to $10.9 million in the three months ended August 2, 2025, compared to $12.2 million in the three months ended July 27, 2024. The decrease was primarily due to lower sales volumes of touch panels for appliances, partially offset by higher sales volumes for transceivers for servers.

Current wording

The decrease in both periods was primarily due to lower sales volumes of touch panels for appliances.

Previous wording

Our liquidity requirements are primarily to fund our business operations, including capital expenditures and working capital requirements, as well as to fund debt service requirements, dividends and stock repurchases. Our primary sources of liquidity are cash flows from operations, existing cash balances and borrowings under our senior secured credit agreement. We believe our liquidity position will be sufficient to fund our existing operations and current commitments for at least the next twelve months. However, if economic conditions remain impacted for longer than we expect due to supply chain disruptions, inflationary pressure or other geopolitical risks, or if we are unable to maintain compliance with our debt covenants, our liquidity position could be severely impacted.

Current wording

Our liquidity requirements are primarily to fund our business operations, including capital expenditures and working capital requirements, as well as to fund debt service requirements, dividends and stock repurchases. Our primary sources of liquidity are cash flows from operations, existing cash balances and borrowings under our senior secured credit agreement. We believe our liquidity position will be sufficient to fund our existing operations and current commitments for at least the next twelve months. However, if economic conditions remain for longer than we expect due to supply chain disruptions, inflationary pressure or other geopolitical risks, or if we are unable to maintain compliance with our debt covenants, our liquidity position could be severely affected. Additionally, we may consider other options to enhance our financial and operating position. Such options may include refinancing or restructuring initiatives, sales of assets, and reductions or delays to capital spending.

Previous wording

As of August 2, 2025, we had $121.1 million of cash and cash equivalents, of which $76.1 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.

Current wording

As of November 1, 2025, we had $118.5 million of cash and cash equivalents, of which $61.5 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.

Previous wording

On June 13, 2024, the Board of Directors approved a new share buyback authorization, commencing on June 17, 2024, for the purchase of up to $200.0 million of our outstanding common stock through June 17, 2026 (the “2024 Buyback Authorization”). Purchases may be made on the open market, including pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, or in private transactions. No shares have been purchased under the 2024 Buyback Authorization. As of August 2, 2025, the dollar value of shares that remained available to be purchased under 2024 Buyback Authorization was $200.0 million.

Current wording

On June 13, 2024, the Board of Directors approved a new share buyback authorization, commencing on June 17, 2024, for the purchase of up to $200.0 million of our outstanding common stock through June 17, 2026 (the “2024 Buyback Authorization”). No shares have been purchased under the 2024 Buyback Authorization. As of November 1, 2025, the dollar value of shares that remained available to be purchased under 2024 Buyback Authorization was $200.0 million.

Previous wording

Among other things, the Third Amendment (i) reduced the revolving credit commitments from $500 million to $400 million, (ii) eliminated our option to increase the revolving credit commitments and/or add one or more tranches of term loans under the credit facility from time to time subject to certain limitations and conditions including approval of certain lenders, (iii) amended the consolidated interest coverage ratio covenant for the quarters ending August 2, 2025, November 1, 2025, January 31, 2026 and May 2, 2026 to relax that covenant to some extent for each of those quarters, (iv) amended the consolidated leverage ratio covenant for the quarters ending August 2, 2025, November 1, 2025, January 31, 2026, May 2, 2026 and August 1, 2026 to relax that covenant to some extent for each of those quarters, (v) amended the definition of “Consolidated EBITDA,” to include an add back for a portion of the inventory write-down taken in the fourth quarter of fiscal 2025, (vi) increased the interest rate during the period from July 7, 2025 to the date that financial statements and a compliance certificate are delivered for the fiscal quarter ending October 31, 2026 (such period, the “Third Amendment Period”), (vii) changed the commitment fee payment during the Third Amendment Period, (viii) extended, through the maturity date, the requirement to provide monthly financial statements to the lenders, (ix) restricted or decreased, during the Third Amendment Period, the amount of certain exceptions to covenants restricting liens on, investments by and indebtedness of the Company and its subsidiaries, (x) limited to $2.5 million, in any fiscal quarter during the Third Amendment Period, the general basket exception to a covenant restricting certain restricted payments (including dividends) by the Company and its subsidiaries, while allowing under that general basket exceptions up to an aggregate of $25 million of restricted payments during any other period, (xi) extended, through the maturity date, an “anti-cash hoarding” requirement contained in the Second Amendment such that that if we have cash on hand in the U.S. (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under the credit facility by the amount of such excess, and (xii) eliminated, during the Third Amendment Period, the investment, restricted payment and indebtedness baskets that had allowed for unlimited investments, restricted payments and indebtedness, as applicable, so long as (among other requirements) we met certain pro forma consolidated leverage ratio tests.

Current wording

Among other things, the Third Amendment (i) reduced the revolving credit commitments from $500 million to $400 million, (ii) eliminated our option to increase the revolving credit commitments and/or add one or more tranches of term loans under the credit facility from time to time subject to certain limitations and conditions including approval of certain lenders, (iii) amended the consolidated interest coverage ratio covenant for the quarters ending August 2, 2025, November 1, 2025, January 31, 2026 and May 2, 2026 to relax that covenant to some extent for each of those quarters, (iv) amended the consolidated leverage ratio covenant for the quarters ending August 2, 2025, November 1, 2025, January 31, 2026, May 2, 2026 and August 1, 2026 to relax that covenant to some extent for each of those quarters, (v) amended the definition of “Consolidated EBITDA,” to include an add back for a portion of the inventory write-down taken in the fourth quarter of fiscal 2025, (vi) increased the interest rate during the period from July 7, 2025 to the date that financial statements and a compliance certificate are delivered for the fiscal quarter ending October 31, 2026 (such period, the “Third Amendment Period”), (vii) changed the commitment fee payment during the Third Amendment Period, (viii) extended, through the maturity date, the requirement to provide monthly financial statements to the lenders, (ix) restricted or decreased, during the Third Amendment Period, the amount of certain exceptions to covenants restricting liens on, investments by and indebtedness of the Company and its subsidiaries, (x) limited to $2.5 million, in any fiscal quarter during the Third Amendment Period, the general basket exception to a covenant restricting certain restricted payments (including dividends) by the Company and its subsidiaries, while allowing under that general basket exceptions up to an aggregate of $25 million of restricted payments during any other period, (xi) extended, through the maturity date, an “anti-cash hoarding” requirement contained in the Second Amendment such that if we have cash on hand in the U.S. (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we will be required to prepay the indebtedness under the credit facility by the amount of such excess, and (xii) eliminated, during the Third Amendment Period, the investment, restricted payment and indebtedness baskets that had allowed for unlimited investments, restricted payments and indebtedness, as applicable, so long as (among other requirements) we met certain pro forma consolidated leverage ratio tests.

Previous wording

As of August 2, 2025, the outstanding balance under the revolving credit facility consisted of $295.8 million (€255.3 million) of euro-denominated borrowings and $30.0 million of U.S. denominated borrowings. The Amended Credit Agreement contains various representations and warranties, financial covenants (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter), restrictive and other covenants, and events of default. The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. As of August 2, 2025, we were in compliance with all the covenants in the Amended Credit Agreement (other than a covenant restricting certain restricted payments (including dividends) by the Company and its

Current wording

As of November 1, 2025, the outstanding balance under the revolving credit facility consisted of $294.5 million (€255.3 million) of euro-denominated borrowings and $40.0 million of US denominated borrowings. The Amended Credit Agreement contains various representations and warranties, financial covenants (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter), restrictive and other covenants, and events of default. The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. As of November 1, 2025, we were in compliance with all the covenants in the Amended Credit Agreement. For further information, see Note 8, “Debt” to the condensed consolidated financial statements included in this Quarterly Report.

Previous wording

Although we currently anticipate, based on our current projections and analyses, that we will be in compliance with the financial covenants contained in the Amended Credit Agreement, no assurance can be given that we will be and remain in compliance with such covenants in the future. Factors that could increase our risk of future non-compliance include those identified in Part I – Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended May 3, 2025, as supplemented by subsequent filings with the Securities and Exchange Commission, including under Part II – Item 1A, “Risk Factors” of this Quarterly Report.

Current wording

Although we currently anticipate, based on our current projections and analyses, that we will be in compliance with the financial covenants contained in the Amended Credit Agreement, no assurance can be given that we will be or will remain in compliance with such covenants in the future. Factors that could increase our risk of future non-compliance include those identified in Part I – Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended May 3, 2025, as supplemented by subsequent filings with the Securities and Exchange Commission, including under Part II – Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended August 2, 2025.

Previous wording

Net cash provided by operating activities was $25.1 million in the three months ended August 2, 2025, compared to $10.9 million in the three months ended July 27, 2024. The increase was due to a lower net loss adjusted for non-cash items and higher cash inflows from operating assets and liabilities. The $17.7 million of cash inflows for operating assets and liabilities in the three months ended August 2, 2025 was primarily due to lower accounts receivable, prepaid expenses and other assets, partially offset by lower accounts payable and other liabilities.

Current wording

Net cash provided by operating activities was $17.7 million in the six months ended November 1, 2025, compared to net cash used by operating activities of $37.1 million in the six months ended November 2, 2024. The increase was due to higher cash inflows from operating assets and liabilities. The $2.9 million of cash inflows for operating assets and liabilities in the six months ended November 1, 2025 was primarily due to a lower investment in working capital items.

Previous wording

Net cash used in investing activities was $5.8 million in the three months ended August 2, 2025, compared to $13.6 million in the three months ended July 27, 2024. Capital expenditures were $7.1 million in the three months ended August 2, 2025, compared to $13.6 million in the three months ended July 27, 2024. In the three months ended August 2, 2025, we received proceeds of $1.3 million from the sale of property, plant and equipment.

Current wording

Net cash used by investing activities was $9.5 million in the six months ended November 1, 2025, compared to $21.0 million in the six months ended November 2, 2024. Capital expenditures were $11.3 million in the six months ended November 1, 2025, compared to $24.0 million in the six months ended November 2, 2024. In the six months ended November 1, 2025, we received proceeds of $1.8 million from the sale of assets, compared to $3.0 million in the six months ended November 2, 2024. In the six months ended November 1, 2025, we received proceeds of $0.5 million from the redemption of certain life insurance policies.

Previous wording

Net cash used in financing activities was $4.5 million in the three months ended August 2, 2025, compared to $48.2 million in the three months ended July 27, 2024. We paid cash dividends of $2.8 million in the three months ended August 2, 2025, compared to $5.1 million in the three months ended July 27, 2024. Dividends paid in the three months ended August 2, 2025 and July 27, 2024, include $0.3 million and $0.2 million, respectively, of dividend equivalent payments for restricted stock units that vested. In the three months ended August 2, 2025, we had net proceeds from borrowings of $0.4 million, compared to net repayments of borrowings of $39.1 million in the three months ended July 27, 2024. In the three months ended August 2, 2025, we paid $1.6 million of debt issuance costs associated with the Third Amendment, compared to $1.8 million of debt issuance costs associated with the Second Amendment in the three months ended July 27, 2024. In the three months ended July 27, 2024, we used $1.6 million of cash for the purchase of shares under the 2021 Buyback Authorization.

Current wording

Net cash provided by financing activities was $3.1 million in the six months ended November 1, 2025, compared to net cash used by financing activities of $8.1 million in the six months ended November 2, 2024. In the six months ended November 1, 2025, we had net proceeds from borrowings of $10.4 million, compared to net proceeds from borrowings of $5.9 million in the six months ended November 2, 2024. In the six months ended November 1, 2025, we paid $1.6 million of debt issuance costs associated with the Third Amendment, compared to $1.3 million of debt issuance costs associated with the Second Amendment. In the six months ended November 2, 2024, we used $1.6 million of cash for the purchase of shares under the board-authorized share repurchase program in place at the time.