METHODE ELECTRONICS INC

Previous wording

This Quarterly Report on Form 10-Q (“Quarterly Report”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, when made, our current views with respect to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to our operations and business environment, which may cause our actual results to be materially different from any future results, express or implied, by such forward-looking statements. All statements that address future operating, financial or business performance or our strategies or expectations are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook,” “upcoming,” or “continue,” and other comparable terminology. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following:

Current wording

This Quarterly Report on Form 10-Q (“Quarterly Report”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, when made, our current views with respect to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to our operations and business environment, which may cause our actual results to be materially different from any future results, express or implied, by such forward-looking statements. All statements that address future operating, financial or business performance or our strategies or expectations are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” and other comparable terminology. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following:

Previous wording

Dependence on a small number of large customers, including one large automotive customer;

Current wording

Dependence on a small number of large customers;

Previous wording

Ability to manage our debt levels and comply with restrictions and covenants under our credit agreement;

Current wording

Ability to comply with restrictions and covenants under our credit agreement;

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Ability to remediate material weaknesses in our internal control over financial reporting;

Current wording

Ability to remediate a material weakness in our internal control over financial reporting;

Previous wording

The current situation is dynamic and we are continuing to assess the full implications of the newly announced tariffs. Given our sizable manufacturing operations in Mexico, China, Europe and Canada, should these enacted tariffs continue, raw materials and finished goods that we import will face higher prices, which could lead to reduced margins or increased prices that could cause decreased customer demand. We continue to monitor similar actions by other countries with which we do business. It is possible other countries may impose retaliatory tariffs on goods imported into their countries from the U.S. We will seek price increases from our customers to offset these incremental costs. If we are unable to obtain price increases, 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 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.

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. There is no guarantee these incentive programs will be available in the future.

Current 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.

Previous wording

The table below compares our results of operations between the three and nine months ended February 1, 2025 and the three and nine months ended January 27, 2024:

Current 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:

Previous wording

Net sales decreased $19.6 million, or 7.6%, to $239.9 million in the three months ended February 1, 2025, compared to $259.5 million in the three months ended January 27, 2024. Foreign currency translation decreased net sales by $3.3 million. Excluding foreign currency translation, net sales decreased $16.3 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 $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.

Previous wording

Cost of products sold decreased $23.9 million, or 10.7%, to $198.6 million (82.8% of net sales) in the three months ended February 1, 2025, compared to $222.5 million (85.7% of net sales) in the three months ended January 27, 2024. Foreign currency translation decreased cost of products sold by $2.3 million. Excluding foreign currency translation, cost of products sold decreased $21.6 million. The decrease was primarily due to lower material and freight costs as a result of lower sales volumes.

Current 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.

Previous wording

The increase in gross profit margin in both periods was primarily a result of product mix from higher sales in the Industrial segment.

Current 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.

Previous wording

Amortization of intangibles was $5.8 million in the three months ended February 1, 2025, compared to $6.1 million in the three months ended January 27, 2024. Amortization of intangibles was $17.6 million in the nine months ended February 1, 2025, compared to $18.0 million in the nine months ended January 27, 2024.

Current 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.

Previous wording

Interest expense, net was $5.5 million in the three months ended February 1, 2025, compared to $5.0 million in the three months ended January 27, 2024. Interest expense, net was $16.5 million in the nine months ended February 1, 2025, compared to $12.2 million in the nine months ended January 27, 2024. The increase in both periods was due to a higher level of borrowings and increased interest rates.

Current 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.

Previous wording

Other expense, net was $0.5 million in the three months ended February 1, 2025, compared to $2.5 million in the three months ended January 27, 2024. Net foreign exchange loss was $1.3 million in the three months ended February 1, 2025, compared to $2.8 million in the three months ended January 27, 2024. In the three months ended February 1, 2025, we received $0.8 million of international government assistance, compared to $0.2 million in the three months ended January 27, 2024.

Current 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.

Previous wording

Income tax expense was $6.2 million (-75.6% effective tax rate) in the three months ended February 1, 2025, compared to $1.1 million (-10.5% effective tax rate) in the three months ended January 27, 2024. Income tax expense was $14.6 million (-74.1% effective tax rate) in the nine months ended February 1, 2025, compared to $1.0 million (-1.5% effective tax rate) in the nine months ended January 27, 2024.

Current 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.

Previous wording

The effective tax rate for the three and nine months ended February 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 and an unfavorable impact from global intangible low-tax income, partially offset by the impact of income derived from foreign operations with lower statutory tax rates. The effective tax rate for the three and nine months ended January 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 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.

Previous wording

Net loss was $14.4 million in the three months ended February 1, 2025, compared to $11.6 million in the three months ended January 27, 2024. Net loss was $34.3 million in the nine months ended February 1, 2025, compared to $66.0 million in the nine months ended January 27, 2024. The net loss was a result of the reasons described above.

Current 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.

Previous wording

Net sales in North America decreased $4.9 million to $51.8 million in the three months ended February 1, 2025, compared to $56.7 million in the three months ended January 27, 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches. Net sales in EMEA increased $3.9 million to $55.9 million in the three months ended February 1, 2025, compared to $52.0 million in the three months ended January 27, 2024. Excluding foreign currency translation, net sales in EMEA increased $5.4 million due to new program launches, partially offset by lower sales volumes of sensor products. Net sales in Asia decreased $23.0 million to $8.0 million in the three months ended February 1, 2025, compared to $31.0 million in the three months ended January 27, 2024. Excluding foreign currency translation, net sales in Asia decreased $22.8 million primarily due to a program roll-off.

Current 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.

Previous wording

Automotive segment gross profit decreased $1.5 million, or 33.3%, to $3.0 million in the three months ended February 1, 2025, compared to $4.5 million in the three months ended January 27, 2024. Excluding foreign currency translation, gross profit decreased $1.1 million. Gross profit margins decreased to 2.6% in the three months ended February 1, 2025, compared to 3.2% in the three months ended January 27, 2024. The decrease in gross profit was primarily due to lower sales volumes in Asia, partially offset by lower freight costs.

Current 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.

Previous wording

Automotive segment loss from operations was $9.0 million in the three months ended February 1, 2025, compared to $11.0 million in the three months ended January 27, 2024. The improvement was due to lower selling and administrative expenses, partially offset by lower gross profit. Selling and administrative expenses decreased due to lower compensation expense.

Current 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.

Previous wording

The increase in both periods was due to higher sales volumes of power distribution products for data centers, partially offset by lower sales volumes for lighting products in the commercial vehicle and off-road equipment markets.

Current 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.

Previous wording

Industrial segment gross profit increased $4.9 million, or 16.2%, to $35.2 million in the three months ended February 1, 2025, compared to $30.3 million in the three months ended January 27, 2024. Excluding foreign currency translation, gross profit increased $5.5 million. Gross profit margins increased to 31.5% in the three months ended February 1, 2025, compared to 28.3% in the three months ended January 27, 2024. Gross profit improved due to higher sales volumes and lower operating expenses.

Current 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.

Previous wording

Industrial segment income from operations increased $3.7 million, or 19.6%, to $22.6 million in the three months ended February 1, 2025, compared to $18.9 million in the three months ended January 27, 2024. Excluding foreign currency translation, income from operations increased $4.1 million. The increase was primarily due to higher gross profit, partially offset by higher selling and administrative expenses. The increase in selling and administrative expenses was primarily due to higher compensation expense, partially offset by lower legal fees.

Current 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.

Previous wording

Interface segment net sales decreased $0.4 million, or 3.1% to $12.3 million in the three months ended February 1, 2025, compared to $12.7 million in the three months ended January 27, 2024. The decrease was primarily due to lower sales volumes of transceivers for servers, partially offset by higher sales volumes for touch panels for appliances.

Current 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.

Previous wording

Interface segment gross profit increased $0.7 million, or 31.8%, to $2.9 million in the three months ended February 1, 2025, compared to $2.2 million in the three months ended January 27, 2024. Gross profit margins increased to 23.6% in the three months ended February 1, 2025, compared to 17.3% in the three months ended January 27, 2024. The improvement was due to product mix.

Current wording

Interface segment gross profit increased $0.8 million, or 30.8%, to $3.4 million in the three months ended August 2, 2025, compared to $2.6 million in the three months ended July 27, 2024. Gross profit margins increased to 31.2% in the three months ended August 2, 2025, compared to 21.3% in the three months ended July 27, 2024. The improvement was due to product mix.

Previous wording

As of February 1, 2025, we had $103.8 million of cash and cash equivalents, of which $71.4 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 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.

Previous wording

On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of our outstanding common stock through June 14, 2024 (the “2021 Buyback Authorization”). 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. Prior to its expiration, a total of 3,553,961 shares were purchased under the 2021 Buyback Authorization at a total cost of $134.6 million. No further shares can be purchased under the 2021 Buyback Authorization. In the three and nine months ended February 1, 2025, zero and 136,000 shares were purchased under the 2021 Buyback Authorization and no shares were purchased under the 2024 Buyback Authorization. As of February 1, 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”). 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.

Previous wording

On October 31, 2022, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the Lenders and other parties named therein. On March 6, 2024, we entered into a First Amendment to Second Amended and Restated Credit Agreement (the “First Amendment”) and on July 9, 2024, we entered into a Second Amendment to Second Amended and Restated Credit Agreement and First Amendment to Second Amended and Restated Guaranty (the “Second Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.

Current wording

On October 31, 2022, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the Lenders and other parties named therein. On March 6, 2024, we entered into a First Amendment to Second Amended and Restated Credit Agreement (the “First Amendment”) and on July 9, 2024, we entered into a Second Amendment to Second Amended and Restated Credit Agreement and First Amendment to Second Amended and Restated Guaranty (the “Second Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto. On July 7, 2025, we entered into a Third Amendment to Second Amended and Restated Credit Agreement (the “Third Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.

Previous wording

Among other things, the Second Amendment (i) reduced the revolving credit commitments under the Credit Agreement from $750 million to $500 million, (ii) granted a security interest in substantially all of the personal property of the Company and our U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences), (iii) amended the consolidated interest coverage ratio covenant for each quarter in fiscal year 2025, (iv) amended the consolidated leverage ratio covenant for the quarter ending July 27, 2024 and each subsequent fiscal quarter, (v) amended certain interest rate provisions, (vi) added a requirement to provide monthly financial statements to the lenders through the period ending July 25, 2025, (vii) decreased the general basket exceptions to certain covenants restricting certain Company investments, liens and indebtedness for specified periods of time, (viii) increased, for fiscal year 2025, the general basket exception to a covenant restricting certain Company dispositions of property, (ix) added an “anti-cash hoarding” requirement, applicable during the period from the effective date of the Second Amendment until the earlier to occur of (a) the delivery of financial statements and a compliance certificate for the fiscal quarter ending July 25, 2025 and (b) the delivery of compliance certificates for two consecutive fiscal quarters demonstrating that our consolidated leverage ratio as of the last day of such fiscal quarters was less than 3.00:1.00, that if we have cash on hand (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 (x) made certain other changes to the investment, restricted payment and indebtedness baskets. The Credit Agreement, as amended by the First Amendment and the Second Amendment, is referred to herein as the “Amended Credit Agreement.”

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 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.

Previous wording

The Amended Credit Agreement provides for a secured multicurrency revolving credit facility of $500 million. In addition, the Amended Credit Agreement permits us to increase the revolving commitments and/or add one or more tranches of term loans under the Amended Credit Agreement from time to time by up to an amount equal to (i) $250 million plus (ii) an additional amount so long as the consolidated leverage ratio would not exceed 3.00:1.00 on a pro forma basis, subject to, among other things, the receipt of additional commitments from existing and/or new lenders. The Amended Credit Agreement matures on October 31, 2027.

Current wording

The Amended Credit Agreement provides for a secured multicurrency revolving credit facility of $400 million. The Amended Credit Agreement matures on October 31, 2027.

Previous wording

As of February 1, 2025, the outstanding balance under the revolving credit facility consisted of $285.0 million (€275.0 million) of euro-denominated borrowings and $45.0 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 February 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.

Current 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

Previous wording

Net cash used in operating activities was $9.0 million in the nine months ended February 1, 2025, compared to net cash provided by operating activities of $22.6 million in the nine months ended January 27, 2024. The decrease was due to lower net loss adjusted for non-cash items and higher cash outflows from operating assets and liabilities. The $25.7 million of cash outflows for operating assets and liabilities in the nine months ended February 1, 2025 was primarily due to higher inventory and lower accounts payable, partially offset by lower accounts receivable.

Current 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.

Previous wording

Net cash used in investing activities was $26.7 million in the nine months ended February 1, 2025, compared to $39.0 million in the nine months ended January 27, 2024. Capital expenditures were $32.5 million in the nine months ended February 1, 2025, compared to $41.1 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we received proceeds of $2.7 million from the sale of assets, compared to $1.5 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we received proceeds of $3.1 million from the settlement of a net investment hedge as compared to $0.6 million in the nine months ended January 27, 2024.

Current 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.

Previous wording

Net cash used in financing activities was $16.6 million in the nine months ended February 1, 2025, compared to $15.0 million in the nine months ended January 27, 2024. We paid cash dividends of $15.3 million in the nine months ended February 1, 2025, compared to $15.0 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we had net proceeds from borrowings of $5.8 million, compared to net proceeds from borrowings of $25.7 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we paid $1.8 million of debt issuance costs associated with the Second Amendment. In the nine months ended February 1, 2025, we used $1.6 million of cash for the purchase of shares under the 2021 Buyback Authorization, compared to $10.8 million in the nine months ended January 27, 2024. In the nine months ended January 27, 2024, we paid $10.9 million for the purchase of redeemable noncontrolling interests related to Nordic Lights.

Current 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.