VALMONT INDUSTRIES INC

(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of Valmont Industries, Inc. and its controlled subsidiaries (collectively, “Valmont” or the “Company”). Investments in affiliates and joint ventures, where the Company exercises significant influence but lacks control or is not the primary beneficiary, are accounted for using the equity method. All intercompany transactions and balances have been eliminated in consolidation.

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and have not been audited. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the results for all periods presented.

These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024. The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year.

Inventories

Inventory is valued at the lower of cost (determined using the first-in, first-out method) or net realizable value. Finished and manufactured goods inventories include the costs of acquired raw materials and the related factory labor and overhead charges required to convert raw materials into finished and manufactured goods.

As of June 28, 2025 and December 28, 2024, inventories consisted of the following:

Geographical Markets

Earnings (loss) before income taxes and equity in loss of nonconsolidated subsidiaries for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 were as follows:

Pension Cost

The Company incurs expenses related to the Delta Pension Plan (“DPP”). The DPP was acquired as part of the Delta PLC acquisition in fiscal 2010 and has no members who are active employees. Key assumptions used to measure the pension expenses and benefit obligations include the discount rate, expected return on plan assets, and estimated future inflation rates.

These assumptions are based on historical experience and current conditions. An actuarial analysis is performed to measure the expense and liability associated with the pension cost.

The components of the net periodic pension cost for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 were as follows:

Stock Plans

The Company administers stock-based compensation plans that have been approved by its shareholders. Under these plans, the Human Resources Committee of the Board of Directors is authorized to grant various types of awards, including incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units, and common stock bonuses. As of June 28, 2025,1,446,696 shares of common stock remained available for issuance under the plans.

Stock options granted under the plans have an exercise price equal to the closing market price on the date of the grant. Options vest beginning on the first anniversary of the grant date, either in equal amounts over three years or fully on the grant’s fifth anniversary. The expiration of grants ranges from seven toten years from the date of the award. Restricted stock units and awards typically vest in equal installments over three orfour years, beginning on the first anniversary of the grant.

For the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024, the Company recorded stock-based compensation expenses (included in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Operations) and associated tax benefits as follows:

Fair Value Measurements

The Company adheres to the guidelines outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820,Fair Value Measurement (“ASC 820”). ASC 820 defines fair value and establishes a framework for its measurement. Its provisions also apply to other accounting guidelines that require or allow fair value measurements. According to ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a three-level hierarchy for fair value measurements, which is based on the transparency of inputs used to value an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following are the valuation methodologies used for assets and liabilities measured at fair value:

Deferred Compensation Investments: The Company’s deferred compensation investments include mutual funds invested in debt and equity securities in the Valmont Deferred Compensation Plan. Quoted market prices are available for these securities in an active market. The investments are included in “Other non-current assets” in the Condensed Consolidated Balance Sheets.

Derivative Financial Instruments: The fair values of foreign currency, commodity, and cross-currency swap derivative contracts are based on valuation models that use market-observable inputs, including forward and spot prices for commodities and currencies.

Mutual Funds: The Company has short-term investments in various mutual funds.

The fair value redemption amounts of certain redeemable noncontrolling interests are measured on a recurring basis utilizing Level 3 inputs, including estimates of future revenue, operating margins, growth rates, and discount rates.

In the second quarter of fiscal 2025, the carrying values of certain long-lived assets that will no longer be utilized were reduced to their respective fair values, based on Level 3 inputs, resulting in impairment charges totaling $19,657 in the Infrastructure segment and $586 in the Agriculture segment.

Goodwill and other intangible assets are measured at fair value on a non-recurring basis using Level 3 inputs. See Note 5 for further information.

Unless otherwise specified, the Company believes the carrying values of financial instruments approximate their fair values.

Leases

The Company’s operating lease right-of-use assets are included in “Other non-current assets” and the corresponding lease obligations are included in “Other accrued expenses” and “Operating lease liabilities” in the Condensed Consolidated Balance Sheets.

Comprehensive Income

Comprehensive income consists of net earnings (loss), foreign currency translation adjustments, certain derivative-related activities, and changes in prior service costs and net actuarial losses related to the pension plan. The results of operations for foreign subsidiaries are translated using average exchange rates for the reporting period, while assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. As of June 28, 2025 and December 28, 2024, the accumulated other comprehensive income (loss) (“AOCI”) consisted of the following:

Revenue Recognition

The Company evaluates each customer contract to determine the appropriate revenue recognition model based on its type, terms, and conditions. All contracts are fixed price, excluding sales tax from revenue, and do not include variable consideration. Discounts, primarily for early payments, reduce net sales in the period the sale is recognized. Contract revenues are classified as “Product sales” when the performance obligation involves manufacturing and selling goods, and as “Service sales” when the performance obligation involves providing a service. Service revenue is primarily associated with the Coatings product line and the Technology Products and Services product line.

Customer acceptance provisions generally apply only during the design stage, although the Company may agree to other acceptance terms on a limited basis. Customers must approve the design before manufacturing begins and products are delivered. The Company does not earn compensation solely for product design and does not consider design services a separate performance obligation; as such, no revenue is recognized for design services. Customers do not have general rights of return after delivery, and the Company establishes provisions for estimated warranties.

Shipping and handling costs are included in cost of sales, with freight considered a fulfillment obligation rather than a separate performance obligation. Freight expenses are recognized proportionally as the structure is manufactured, in line with revenue recognized from the associated customer contract over time. Except for the Utility, Solar, and Telecommunications product lines, inventory is interchangeable among the various customers within each segment. The Company has elected not to disclose partially satisfied performance obligations at the end of the reporting period for contracts with an original expected duration of one year or less. If payment is expected within one year of transferring control of goods or services, the Company does not adjust contract consideration for any significant financing component.

Most customers are invoiced upon shipment or delivery of goods to their specified locations. Contract assets are recognized as revenue is earned over time and are reduced when the customer is invoiced. As of June 28, 2025 and December 28, 2024, the Company’s contract assets totaled $194,559 and $187,257, respectively, and were recorded as “Contract assets” in the Condensed Consolidated Balance Sheets.

Certain customers are invoiced through advance or progress billings. When the progress toward performance obligations is less than the amount billed to the customer, the excess is recorded as a contract liability. As of June 28, 2025, total contract liabilities were $132,741, with $132,412 recorded as “Contract liabilities” and $329 as “Other non-current liabilities” in the Condensed Consolidated Balance Sheets. As of December 28, 2024, total contract liabilities were $130,696, with $126,932 recorded as “Contract liabilities” and $3,764 as “Other non-current liabilities” in the Condensed Consolidated Balance Sheets. Additional details are as follows:

Segment and Product Line Revenue Recognition

Infrastructure Segment

Steel and concrete structures within the Utility and Telecommunications product lines are custom engineered to customer specifications. This customization limits the ability to resell the structures if an order is canceled after production begins. The continuous transfer of control to the customer is supported by contractual termination clauses or rights to payment for work performed to date, including a reasonable profit, as these products do not have alternative uses for the Company. As control is transferred over time, revenue is recognized based on progress toward completion of the performance obligation.

The method used to measure progress requires judgment. Revenue for structures in the Utility and Telecommunications product lines is typically recognized using an input-based method, measuring progress by the ratio of production hours incurred to total estimated hours required. The resulting completion percentage is applied to the total revenue and estimated costs of the order to determine reported revenue, cost of sales, and gross profit. Once production of an order begins, orders are generally completed within three months.

Revenue for the Solar product line is recognized upon shipment or delivery, based on contract terms. In certain Utility product line sales, the Company engages external sales agents and recognizes estimated commissions owed to these agents proportionately as the goods are manufactured.

Revenue from structures sold in the Lighting and Transportation product line, as well as most Telecommunications products, is recognized upon shipment or delivery of goods to the customer, aligning with the billing date. Some large regional customers may have unique specifications for telecommunication structures. When a customer contract includes a cancellation clause that requires payment for completed work plus a reasonable margin, revenue is recognized over time based on hours worked as a percentage of the total estimated hours to complete production.

Revenue from Coatings services, including galvanizing and powder coating, is recognized upon service completion and when the goods are ready for pickup or delivery.

Agriculture Segment

Revenue from irrigation equipment, related parts, services, and tubular products for industrial customers is typically recognized upon shipment, aligning with the billing date. Remote monitoring subscription services within the Technology Products and Services product line are primarily billed annually, with revenue recognized on a straight-line basis over the contract period.

The disaggregation of revenue by product line is provided in Note 8.

Supplier Finance Program

In fiscal 2019, the Company entered into an agreement with a third-party financial institution to facilitate a supplier finance program. This program allows qualifying suppliers to sell their receivables from the Company to the financial institution. These suppliers negotiate directly with the financial institution regarding their outstanding receivables, while the Company’s rights and obligations to suppliers remain unaffected. The Company has no economic interest in a supplier’s

decision to participate in the program. Once a supplier opts into the program, they select which individual invoices from the Company to sell to the financial institution. The Company is obligated to pay the negotiated invoice amount to the financial institution on the due date, regardless of whether the supplier has sold the individual invoice.

For any invoices not sold under the supplier finance program, the financial institution pays the supplier on the invoice’s due date. The invoice amounts and scheduled payment terms remain unchanged, regardless of whether the supplier decides to sell under these arrangements. Payments related to these obligations are included in “Cash flows from operating activities” in the Condensed Consolidated Statements of Cash Flows. As of June 28, 2025 and December 28, 2024, outstanding payment obligations under the Company’s supplier finance program (included in “Accounts payable” in the Condensed Consolidated Balance Sheets) were as follows:

Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features that are not solely within the Company’s control are classified as redeemable noncontrolling interests. The Company has redeemable noncontrolling interests in certain entities. A noncontrolling interest holder can require the Company to purchase their remaining ownership, referred to as a put right. Likewise, the Company can require a noncontrolling interest holder to sell the Company their remaining ownership, known as a call option. The redemption amount and effective date of these rights vary according to the applicable operating agreements, with some redeemable at fair value and some redeemable at amounts other than fair value.

As a result of these redemption features, the Company records the noncontrolling interests as redeemable and classifies the balances in temporary equity in the Condensed Consolidated Balance Sheets, initially at their acquisition-date fair values. The Company adjusts the redeemable noncontrolling interests each reporting period for the net earnings (loss) attributable to the noncontrolling interests and any applicable redemption value adjustments. Redemption value adjustments are offset against retained earnings. Earnings (loss) used in the computation of earnings (loss) per share for the reported period are impacted by redemption value adjustments for noncontrolling interests redeemable at amounts other than fair value.

During the thirteen weeks ended June 28, 2025, the Company recorded a $26,243 change in the redemption value of redeemable noncontrolling interest related to the Company’s joint venture agriculture solar business, which was reflected in “Shareholders’ equity” and “Redeemable noncontrolling interests.” This represents a change in redemption value that is treated as an adjustment to net earnings (loss) for purposes of calculating earnings (loss) per share. The Company determined that the current-period change in redemption value included the correction of a prior-year error in the determination of the redemption value of redeemable noncontrolling interest totaling $21,792. This correction increased diluted loss per share by $1.10 for the thirteen weeks ended June 28, 2025 and decreased diluted earnings per share by $1.09 for the twenty-six weeks ended June 28, 2025. The Company concluded that the correction was not material to the current period or to any previously issued financial statements.

As of June 28, 2025 and December 28, 2024, the redeemable noncontrolling interests were $84,062 and $51,519, respectively. The final amounts paid for these interests may vary significantly, as the redemption amounts are contingent on the future operational results of the respective businesses.

Treasury Stock

Repurchased shares are recorded as “Treasury stock” and result in a reduction of “Shareholders’ equity” in the Condensed Consolidated Balance Sheets. When treasury shares are reissued, the Company applies the last-in, first-out

method. Any difference between the repurchase cost and the reissuance price is charged or credited to “Additional paid-in capital” (or “Retained earnings” in the absence of “Additional paid-in capital”).

The Company’s capital allocation philosophy includes a share repurchase program. In May 2014, the Company authorized the repurchase of up to $500,000 of the Company’s outstanding common stock over atwelve-month period, at prevailing market prices, either through open market or privately negotiated transactions. The Board subsequently expanded this authorization in February 2015 and October 2018, each time adding $250,000 with no expiration date. In February 2023, the Board increased the program by an additional $400,000. In February 2025, the Board increased the amount authorized under the program by an additional $700,000, with no stated expiration date, bringing the total authorization to $2,100,000. As of June 28, 2025, the Company had repurchased 8,593,676 shares for approximately $1,433,968 under this program.

Income Taxes

Subsequent to the second quarter of fiscal 2025, on July 4, 2025, federal tax legislation, commonly referred to as the One Big Beautiful Bill Act, which includes a broad range of tax reform provisions, was signed into law in the United States. The Company is continuing to assess its impact. While the legislation is not expected to have a material impact on the Company’s income statement, the timing of deductions related to depreciation and research and experimentation, among other changes included in the legislation, is currently under evaluation.

Long-Term Debt

Subsequent to the second quarter of fiscal 2025, the Company renewed the revolving credit facility, extending the maturity date to July 2030. As a part of the renewal, the facility maintained $800,000 of committed capacity and the same pricing, but the uncommitted accordion feature available under the facility increased from $300,000 to $400,000; the 10-basis-point SOFR adjustment was eliminated from the interest rate calculation; and the commitment fee on the average daily unused portion was reduced and now ranges from 9 to 20 basis points, based on the Company’s credit rating.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update is intended to improve transparency and usefulness in income tax disclosures, particularly in areas such as rate reconciliation and reporting of income taxes paid. The guidance will be adopted prospectively for the Form 10-K for the fiscal year ending December 27, 2025. The Company does not expect any impact on its results of operations, as the changes primarily relate to enhanced disclosures.

In November 2024, the FASB issued ASU No. 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update aims to enhance expense disclosures by providing more detailed information on the types of expenses within commonly presented categories. The guidance is effective on both a prospective and retrospective basis for the fiscal year ending December 25, 2027, with early adoption permitted. The Company does not expect any impact on its results of operations, as the changes primarily relate to enhanced disclosures.

(2) ACQUISITIONS

Acquisitions of Redeemable Noncontrolling Interests

In the first quarter of fiscal 2024, the Company acquired an additional approximately 9% ownership interest of ConcealFab, Inc. for $7,227 and the remaining ownership interest of Valmont Substations, LLC for $10,518. Subsequent to the second quarter of fiscal 2025, the Company acquired an additional approximately 30% ownership interest of Valmont Irrigation Argentina B.V. for $14,624. These transactions involved acquiring additional shares of consolidated subsidiaries without resulting in changes in control.

(3) DIVESTITURES

On November 25, 2024, the Company completed the sale of George Industries, a coatings and anodizing company in California, which was reported in the Infrastructure segment. The Company received net proceeds of $500 from this sale. In the fourth quarter of fiscal 2024, a pre-tax loss of $2,779 was recognized in “Other income (expenses)” in the Consolidated Statements of Earnings.

On October 31, 2024, the Company completed the sale of its extractive business, which included the manufacturing and distribution of screening products to the mining and quarrying sectors in Australia and New Zealand, which was reported in the Infrastructure segment. The Company received net proceeds of $5,042 Australian dollars ($3,330 U.S. dollars) at closing, with an additional $1,800 Australian dollars ($1,172 U.S. dollars) to be received throughtwo payments. The first payment was received in the first quarter of fiscal 2025, and the second payment is expected to be received in the second quarter of fiscal 2026. In the fourth quarter of fiscal 2024, a pre-tax loss of $2,567 Australian dollars ($1,695 U.S. dollars) was recognized in “Other income (expenses)” in the Consolidated Statements of Earnings.

(4) REALIGNMENT ACTIVITIES

During the second quarter of fiscal 2025, the Company completed a targeted organizational realignment to better align operations and commercial teams, reduce layers of management, and enhance the speed and agility of decision-making across the business. These actions resulted in pre-tax cash charges of $9,794, of which $910 was included in “Product cost of sales” in the Condensed Consolidated Statements of Operations.

During the second quarter of fiscal 2025, the Company recorded the following pre-tax expenses related to realignment activities:

Changes in liabilities recorded related to realignment activities were as follows:

(5) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

As of June 28, 2025 and December 28, 2024, the carrying amounts of goodwill by segment were as follows:

In the second quarter of fiscal 2025, the Company identified triggering events that required interim goodwill impairment testing for certain reporting units within the Infrastructure segment. Due to the Company’s strategic exit from the North American solar tracker market, increased competitive pressures in Brazil, and uncertainty surrounding European policies, an interim goodwill impairment test was conducted for the Solar reporting unit. The carrying amount of this reporting unit exceeded its estimated fair value, resulting in a goodwill impairment charge of $41,869 within the Infrastructure segment.

Additionally, due to a reduction in forecasted sales primarily resulting from general market weakness in Australia, an interim goodwill impairment test was also performed for the Access Systems reporting unit. The carrying amount exceeded its estimated fair value, resulting in a goodwill impairment charge of $23,000 within the Infrastructure segment.

The fair values of both reporting units were estimated using a discounted cash flow analysis, which required the Company to estimate the future cash flows as well as select a risk-adjusted discount rate to measure the present value of the anticipated cash flows.

Other Intangible Assets

As of June 28, 2025 and December 28, 2024, the components of other intangible assets were as follows:

The weighted-average life of amortizing intangible assets is approximately four years. Amortization expenses were $2,982 and $5,840 for the thirteen and twenty-six weeks ended June 28, 2025, respectively, and $3,356 and $7,071 for the

thirteen and twenty-six weeks ended June 29, 2024, respectively. Amortization expense is expected to average $9,144 annually over thenext five fiscal years, based on amortizing intangible assets reported as of June 28, 2025.

In the second quarter of fiscal 2025, the Company performed an impairment test on indefinite-lived trade names associated with the Solar and Access Systems reporting units. Using the relief-from-royalty method, the Company determined that the carrying amounts of the trade names exceeded their estimated fair values. As a result, impairment charges of $4,830 were recognized within the Infrastructure segment.

Additionally, in the second quarter of fiscal 2025, an impairment charge of $1,395 was recognized within the Agriculture segment for a customer relationship intangible asset that was determined not to be recoverable.

(6) EARNINGS (LOSS) PER SHARE

The table below provides a reconciliation between the net earnings (loss) attributable to Valmont Industries, Inc. and the weighted average share amounts used to compute both basic and diluted earnings (loss) per share:

In the second quarter of fiscal 2025, the Company reported a net loss. In periods in which the Company recognizes a net loss, the Company excludes the impact of outstanding stock awards from the diluted loss per share calculation, as its inclusion would have an anti-dilutive effect.

As of June 28, 2025 and June 29, 2024, there were 39,543 and 56,261 outstanding stock options, respectively, with exercise prices that exceeded the average market price of common stock during the respective periods. As such, these options were anti-dilutive and were excluded from the computation of diluted earnings (loss) per share.

(7) DERIVATIVE FINANCIAL INSTRUMENTS

The Company manages risks related to interest rates, commodity prices, and foreign currency, particularly those arising from foreign currency denominated transactions and investments in foreign subsidiaries. To address these risks, the Company may use derivative financial instruments. Depending on their classification, some derivatives are marked to market and recorded in the Company’s Condensed Consolidated Statements of Operations, while others are accounted for as fair value, cash flow, or net investment hedges.

Derivative financial instruments inherently carry credit and market risks, which the Company mitigates by monitoring exposure limits and transacting with recognized, stable multinational banks as counterparties. Gains or losses from net investment hedge activities remain in AOCI until the related subsidiaries are sold or substantially liquidated.

The fair value of derivative instruments as of June 28, 2025 and December 28, 2024 was as follows:

Gains (losses) on derivatives recognized in the Condensed Consolidated Statements of Operations for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 were as follows:

Cash Flow Hedges

The Company enters into commodity forward, swap, and option contracts to hedge variability in cash flows related to future purchases. Gains (losses) realized upon settlement are recorded in “Product cost of sales” in the Condensed Consolidated Statements of Operations in the period in which the hedged items are consumed. As of June 28, 2025, the details of these contracts were as follows:

Net Investment Hedges

To manage foreign currency risk associated with its euro investments and reduce interest expenses, the Company uses fixed-for-fixed cross-currency swaps (“CCS”). These swaps convert U.S. dollar-denominated principal and interest payments on a portion of its 5.00% senior unsecured notes due in 2044 into euro‑denominated payments. Interest payments are exchanged biannually on April 1 and October 1.

The Company designated the full notional amounts of its CCS as net investment hedges for certain European subsidiaries under the spot method. Changes in fair value of the CCS attributable to spot exchange rates are recorded as cumulative foreign currency translation within AOCI, while net interest receipts reduce interest expense over the life of the CCS. Key terms as of June 28, 2025 were as follows:

In the first quarter of fiscal 2024, the Company early settled a euro net investment hedge entered in fiscal 2019, receiving proceeds of $2,711. These proceeds will remain in AOCI until the related subsidiaries are sold or substantially liquidated.

(8) BUSINESS SEGMENTS AND RELATED REVENUE INFORMATION

The Company’s chief operating decision maker (“CODM”) is the President and Chief Executive Officer. The CODM uses operating income as the profit measure to evaluate segment performance and allocate resources across segments. Segment selling, general, and administrative expenses include certain corporate expense allocations, typically based on employee headcounts and sales volumes. For segment reporting purposes, the Company excludes unallocated corporate general and administrative expenses, interest expenses, non-operating income and deductions, and income taxes from operating income.

The reportable segments are as follows:

Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, lighting, transportation, telecommunications, and solar, along with coatings services to protect metal products.

Agriculture:* *This segment consists of the manufacture of center pivot and linear irrigation equipment components for agricultural markets, including aftermarket parts and tubular products, and advanced technology solutions for precision agriculture.

In the fourth quarter of fiscal 2024, the Company realigned management’s reporting structure for certain composite structure sales and, accordingly, revised its presentation of sales across product lines to reflect how the product is currently managed. The reporting for the thirteen and twenty-six weeks ended June 29, 2024 was adjusted to conform to the realigned presentation. As a result, Utility product line sales increased and Lighting and Transportation product line sales decreased by $9,308 and $20,195 for the thirteen and twenty-six weeks ended June 29, 2024, respectively.

Summary by Business Segment

A breakdown of revenue recognized over time and at a point in time by segment for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 is as follows:

(9) CONTINGENCIES

The Company is party to certain legal proceedings and claims arising in the normal course of business. This includes a litigation matter currently on appeal in Brazil related to its operations in the Agriculture market. As of June 28, 2025, the Company has accrued $3,796 related to this matter, which is included in “Other accrued expenses” in the Condensed Consolidated Balance Sheets. The accrual reflects management’s estimate of losses based on currently available information. The outcome of this matter cannot be predicted with certainty and the Company’s accrual may not be adequate to cover the final judgment. At this time, the ultimate resolution of this matter may adversely affect selling, general, and administrative expenses by up to an additional $20,000 in a future fiscal period.

The Company continuously monitors developments in legal proceedings and will adjust its accruals if and when additional information becomes available or circumstances change. No further losses beyond the amounts accrued are deemed probable at this time.