Latham Group, Inc.

Previous wording

Our operations consist of approximately 1,800 employees across about 30 locations. The broad geographic reach of our national manufacturing and distribution network allows us to service our customers on short lead times and to deliver our products in a cost-effective manner. Our mission is to design and manufacture high-quality pool products, with the homeowner in mind, and to be a value-added partner to our dealers.

Current wording

Our operations consist of approximately 1,850 employees across about 30 locations. The broad geographic reach of our national manufacturing and distribution network allows us to service our customers on short lead times and to deliver our products in a cost-effective manner. Our mission is to design and manufacture high-quality pool products, with the homeowner in mind, and to be a value-added partner to our dealers.

Previous wording

Our current business results reflect a strong second quarter sales growth despite challenging market conditions and our results of operations for the two fiscal quarters ended June 28, 2025 were aligned with our expectations. These results were primarily driven by category share gains in autocovers, along with contributions from the Coverstar Central, LLC (“Coverstar Central”) acquisition in August 2024 and the early 2025 acquisitions of two of our smaller autocover dealers. Based on current business trends and market conditions, we remain cautious on 2025 new pool starts, which we currently project to be roughly in line with 2024 levels. We are closely monitoring the potential impact of current macroeconomic and geopolitical conditions, as well as general reduced consumer confidence and increased economic uncertainty. Additionally, we recently implemented targeted price increases on certain products to help further mitigate the potential impact of tariffs.

Current wording

Our current business results reflect a strong third quarter sales growth despite challenging market conditions and our results of operations for the three fiscal quarters ended September 27, 2025 were aligned with our expectations. These results were primarily driven by category share gains in autocovers, along with contributions from the Coverstar Central, LLC (“Coverstar Central”) acquisition in August 2024 and the early 2025 acquisitions of two of our smaller autocover dealers. Liners also saw growth, reflecting success in our Measure by Latham tool. Based on sales for three fiscal quarters and current business trends and market conditions, we currently project 2025 new pool starts to be flat to slightly down from 2024 levels. We are closely monitoring the potential impact of current macroeconomic and geopolitical conditions, as well as general reduced consumer confidence and increased economic uncertainty. Additionally, we recently implemented targeted price increases on certain products to help further mitigate the potential impact of tariffs.

Previous wording

We continue to make progress executing our strategy to drive adoption and awareness of fiberglass pools and automatic safety covers and gain additional operating efficiencies through value engineering and lean manufacturing initiatives. We continue to take a disciplined approach to capital investments, with the focus on product innovation, facility upgrades and technology and systems. These initiatives complement continued investment in our sales, marketing, engineering and research and development efforts that are designed to accelerate conversion to fiberglass pool products and ongoing digital transformation programs.

Current wording

We continue to make progress executing our strategy to drive adoption and awareness of fiberglass pools and automatic safety covers and gain additional operating efficiencies through value engineering and lean manufacturing initiatives. We continue to take a disciplined approach to capital investments, with the focus on product innovation, facility upgrades and technology and systems. Due to greater-than-expected efficiency of certain projects, we have reduced our capital expenditure estimate for 2025. These initiatives complement continued investment in our sales, marketing, engineering and research and development efforts that are designed to accelerate conversion to fiberglass pool products and ongoing digital transformation programs.

Previous wording

Strategic transactions continue to be part of our growth strategy. On August 2, 2024, we completed a stock acquisition of Coverstar Central, our exclusive dealer of automatic safety covers in 29 states – mainly in the center of the U.S. Coverstar Central has been our trusted partner since 2006, and this acquisition represents a valuable strategic opportunity that we expect to benefit from in multiple ways. First, the vertical integration of our automatic safety cover product line in the acquired geographies is expected to increase margins. Second, as one company with a fully integrated sales and marketing strategy, we expect to accelerate the sales growth of this product line. Finally, we see opportunities to leverage Coverstar Central’s long-standing relationships with pool builders in its markets to increase the awareness of, and conversion to, fiberglass pools. During the two fiscal quarters ended June 28, 2025, we further strengthened our position in this growing category by acquiring two of our smaller autocover dealers located in Tennessee and New York.

Current wording

Strategic transactions continue to be part of our growth strategy. On August 2, 2024, we completed a stock acquisition of Coverstar Central, our exclusive dealer of automatic safety covers in 29 states – mainly in the center of the U.S. Coverstar Central has been our trusted partner since 2006, and this acquisition represented a valuable strategic opportunity that we benefited from in multiple ways. First, the vertical integration of our automatic safety cover product line in the acquired geographies increased margins. Second, as one company with a fully integrated sales and marketing strategy, we were able to accelerate the sales growth of this product line. Finally, we leveraged Coverstar Central’s long-standing relationships with pool builders in its markets to increase the awareness of, and conversion to, fiberglass pools. During the three fiscal quarters ended September 27, 2025, we further strengthened our position in this growing category by acquiring two of our smaller autocover dealers located in Tennessee and New York.

Previous wording

Each product shipped is considered to be one performance obligation. With the exception of our extended service warranties and our custom product contracts, we recognize our revenue when control of our promised goods is transferred to our customers (dealer in one-step distribution channel or distributor in two-step distribution channel), either upon shipment or arrival at our customer’s destination depending upon the terms of the purchase order. Sales are recognized net of any estimated rebates, returns, allowances, cash discounts, or other sales incentives. Revenue that is derived from our extended service warranties, which are separately priced and sold, is recognized over the term of the contracts. Revenue from custom products is recognized over time utilizing an input method that compares the cost of cumulative work-in-process to date to the most current estimates for the entire cost of the performance obligation.

Current wording

Each product shipped is considered to be one performance obligation. With the exception of our extended service warranties and our custom product contracts, we recognize our revenue when control of our promised goods is transferred to our customers (dealer in one-step distribution channel or distributor in two-step distribution channel), either upon shipment or arrival at our customer’s destination depending upon the terms of the purchase order. Sales are recognized net of any estimated rebates, returns, allowances, cash discounts, or other sales incentives. Revenue that is derived from our extended service warranties, which are separately priced and sold, is recognized over the term of the contracts. Revenue from custom products is recognized over time utilizing an input

Previous wording

Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board of Directors of the Company (the “Board”) to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax (benefit) expense, (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.

Current wording

Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board of Directors of the Company (the “Board”) to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized losses (gains) on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.

Previous wording

Net sales were $284.1 million for the two fiscal quarters ended June 28, 2025, compared to $270.8 million for the two fiscal quarters ended June 29, 2024. The $13.3 million, or 4.9%, increase in net sales was due to a $14.4 million increase in sales volume, partially offset by a $1.1 million decrease from lower pricing. The sales volume increase was primarily driven by both organic- and acquisition-related growth. The increase in net sales across our product lines consisted of an increase of $16.5 million for covers and $1.3 million for liners, partially offset by a decrease of $4.5 million for in-ground swimming pools.

Current wording

Net sales were $161.9 million for the fiscal quarter ended September 27, 2025, compared to $150.5 million for the fiscal quarter ended September 28, 2024. The $11.4 million, or 7.6%, increase in net sales was due to a $8.4 million increase in sales volume and a $3.0 million increase from higher pricing. The sales volume increase was primarily driven by organic- and acquisition-related growth. The increase in net sales of $11.4 million across our product lines consisted of an increase of $7.1 million for covers, $3.7 million for liners and a $0.6 million increase for in-ground swimming pools.

Previous wording

Cost of sales was $108.7 million for the fiscal quarter ended June 28, 2025, compared to $107.1 million for the fiscal quarter ended June 29, 2024. Gross margin increased by 4.0%, to 37.1% of net sales for the fiscal quarter ended June 28, 2025, compared to 33.1% of net sales for the fiscal quarter ended June 29, 2024. The $1.6 million, or 1.5%, increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. The 4.0% increase in gross margin was primarily driven by higher volumes, lean manufacturing and value engineering initiatives, and a margin benefit from the three Coverstar acquisitions.

Current wording

Cost of sales was $104.6 million for the fiscal quarter ended September 27, 2025, compared to $101.8 million for the fiscal quarter ended September 28, 2024. Gross margin increased by 3.0%, to 35.4% of net sales for the fiscal quarter ended September 27, 2025, compared to 32.4% of net sales for the fiscal quarter ended September 28, 2024. The $2.8 million, or 2.7%, increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. The 3.0% increase in gross margin was primarily driven by the accretive benefit of the three Coverstar acquisitions, lean manufacturing and value engineering initiatives and production efficiencies.

Previous wording

Selling, general, and administrative expense was $31.9 million for the fiscal quarter ended June 28, 2025, compared to $26.6 million for the fiscal quarter ended June 29, 2024. The $5.3 million, or 20.1%, increase in selling, general, and administrative expense

Current wording

Selling, general, and administrative expense was $28.6 million for the fiscal quarter ended September 27, 2025, compared to $28.3 million for the fiscal quarter ended September 28, 2024. The $0.3 million, or 0.9%, increase in selling, general, and administrative expense was primarily driven by increased marketing and personnel investment tied to our Sand States strategy and

Previous wording

was primarily driven by increased marketing and personnel investment tied to our Sand States strategy, investments in new enterprise resource planning (“ERP”) infrastructure and inclusion of Coverstar Central.

Current wording

investments in new enterprise resource planning (“ERP”) infrastructure, partially offset by the timing of performance based compensation.

Previous wording

Amortization was $7.3 million for the fiscal quarter ended June 28, 2025, compared to $6.4 million for the fiscal quarter ended June 29, 2024. The $0.9 million, or 13.6%, increase in amortization was driven by the three Coverstar acquisitions.

Current wording

Amortization was $7.2 million for the fiscal quarter ended September 27, 2025, compared to $7.0 million for the fiscal quarter ended September 28, 2024. The $0.2 million, or 3.3%, increase in amortization was driven by the three Coverstar acquisitions.

Previous wording

Interest expense, net was $7.1 million for the fiscal quarter ended June 28, 2025, compared to $6.0 million for the fiscal quarter ended June 29, 2024. The $1.1 million, or 18.9%, increase in interest expense, net was primarily the result of the change in the fair value of our interest rate swap, compared to the fiscal quarter ended June 29, 2024.

Current wording

Interest expense, net was $6.1 million for the fiscal quarter ended September 27, 2025, compared to $9.2 million for the fiscal quarter ended September 28, 2024. The $3.1 million, or 33.7%, decrease in interest expense, net was primarily the result of the change in the fair value of our interest rate swap, compared to the fiscal quarter ended September 28, 2024.

Previous wording

Other income, net was $3.0 million for the fiscal quarter ended June 28, 2025, compared to other expense, net of $0.8 million for fiscal quarter ended June 29, 2024. The $3.8 million increase in other income, net was primarily driven by a favorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.

Current wording

Other expense, net was $1.2 million for the fiscal quarter ended September 27, 2025, compared to other income, net of $ (0.7) million for fiscal quarter ended September 28, 2024. The $1.9 million increase in other expense, net was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.

Previous wording

Earnings from our equity method investment in Premier Pools & Spa were $1.4 million for the two fiscal quarters ended June 28, 2025, compared to $1.8 million for the two fiscal quarters ended June 29, 2024, due to the financial performance of Premier Pools & Spa.

Current wording

Earnings from our equity method investment in Premier Pools & Spa were $1.3 million for the fiscal quarter ended September 27, 2025, compared to $0.9 million for the fiscal quarter ended September 28, 2024, due to the financial performance of Premier Pools & Spa.

Previous wording

Income tax expense was $5.1 million for the fiscal quarter ended June 28, 2025, compared to income tax expense of $0.4 million for the fiscal quarter ended June 29, 2024. Our effective tax rate was 24.3% for the fiscal quarter ended June 28, 2025, compared to 3.2% for the fiscal quarter ended June 29, 2024. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for both the fiscal quarters ended June 28, 2025 and June 29, 2024 was primarily attributable to the impacts of stock-based compensation expense and foreign income.

Current wording

Income tax expense was $7.5 million for the fiscal quarter ended September 27, 2025, compared to income tax benefit of less than $0.1 million for the fiscal quarter ended September 28, 2024. Our effective tax rate was 47.9% for the fiscal quarter ended September 27, 2025, compared to (0.7)% for the fiscal quarter ended September 28, 2024. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for both the fiscal quarters ended September 27, 2025 and September 28, 2024 was primarily attributable to the discrete impact of stock-based compensation expense for which there is no associated tax benefit and the effects of branch accounting for Latham Canada.

Previous wording

Net income was $16.0 million for the fiscal quarter ended June 28, 2025, compared to $13.3 million for the fiscal quarter ended June 29, 2024. The $2.7 million, or 20.3%, increase in net income was primarily because of the factors described above.

Current wording

Net income was $8.1 million for the fiscal quarter ended September 27, 2025, compared to $5.9 million for the fiscal quarter ended September 28, 2024. The $2.2 million, or 37.7%, increase in net income was primarily because of the factors described above.

Previous wording

Net income margin was 9.3% for the fiscal quarter ended June 28, 2025, compared to 8.3% for the fiscal quarter ended June 29, 2024. The 1.0% increase in net income margin was driven by the factors described above.

Current wording

Net income margin was 5.0% for the fiscal quarter ended September 27, 2025, compared to 3.9% for the fiscal quarter ended September 28, 2024. The 1.1% increase in net income margin was driven by the factors described above.

Previous wording

Adjusted EBITDA was $51.0 million for the two fiscal quarters ended June 28, 2025, compared to $46.8 million for the two fiscal quarters ended June 29, 2024. The $4.2 million, or 9.1%, increase in Adjusted EBITDA was primarily because of the increase in net sales, as well as the other factors described above.

Current wording

Adjusted EBITDA was $38.3 million for the fiscal quarter ended September 27, 2025, compared to $29.8 million for the fiscal quarter ended September 28, 2024. The $8.5 million, or 28.5%, increase in Adjusted EBITDA was primarily because of the gross profit growth from increase in net sales, as well as the other factors described above.

Previous wording

Adjusted EBITDA margin was 23.1% for the fiscal quarter ended June 28, 2025, compared to 21.5% for the fiscal quarter ended June 29, 2024. The 1.6% increase in Adjusted EBITDA margin was primarily because of a $5.4 million increase in Adjusted EBITDA, compared to the fiscal quarter ended June 29, 2024, which was impacted by the factors described above.

Current wording

Adjusted EBITDA margin was 23.7% for the fiscal quarter ended September 27, 2025, compared to 19.8% for the fiscal quarter ended September 28, 2024. The 3.9% increase in Adjusted EBITDA margin was primarily because of a $8.5 million increase in Adjusted EBITDA, compared to the fiscal quarter ended September 28, 2024, which was impacted by the factors described above.

Previous wording

Net sales were $172.6 million for the fiscal quarter ended June 28, 2025, compared to $160.1 million for the fiscal quarter ended June 29, 2024. The $12.5 million, or 7.8%, increase in net sales was due to a $12.0 million increase in sales volume and a $0.5 million increase from pricing. The sales volume increase was primarily driven by both organic- and acquisition-related growth. The increase in net sales of $12.5 million across our product lines consisted of an increase of $11.7 million for covers and $3.1 million for liners, partially offset by a $2.4 million decrease for in-ground swimming pools.

Current wording

Net sales were $446.0 million for the three fiscal quarters ended September 27, 2025, compared to $421.2 million for the three fiscal quarters ended September 28, 2024. The $24.8 million, or 5.9%, increase in net sales was due to a $22.8 million increase in sales volume and a $2.0 million increase from higher pricing. The sales volume increase was primarily driven by both organic- and acquisition-related growth. The increase in net sales across our product lines consisted of an increase of $23.6 million for covers and $5.0 million for liners, partially offset by a decrease of $3.9 million for in-ground swimming pools.

Previous wording

Cost of sales was $187.2 million for the two fiscal quarters ended June 28, 2025, compared to $187.1 million for the two fiscal quarters ended June 29, 2024. Gross margin increased by 3.2%, to 34.1% of net sales for the two fiscal quarters ended June 28, 2025, compared to 30.9% of net sales for the two fiscal quarters ended June 29, 2024. The $0.1 million increase in cost of sales was primarily the result of the increase in sales volume, offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. The 3.2% increase in gross margin was primarily driven by higher volumes, lean manufacturing and value engineering initiatives, and a margin benefit from the three Coverstar acquisitions.

Current wording

Cost of sales was $291.8 million for the three fiscal quarters ended September 27, 2025, compared to $288.9 million for the three fiscal quarters ended September 28, 2024. Gross margin increased by 3.2%, to 34.6% of net sales for the three fiscal quarters ended September 27, 2025, compared to 31.4% of net sales for the three fiscal quarters ended September 28, 2024. The $2.9 million increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. The 3.2% increase in gross margin was primarily driven by higher volumes, lean manufacturing and value engineering initiatives, and a margin benefit from the three Coverstar acquisitions.

Previous wording

Selling, general, and administrative expense was $62.6 million for the two fiscal quarters ended June 28, 2025, compared to $52.8 million for the two fiscal quarters ended June 29, 2024. The $9.8 million, or 18.4%, increase in selling, general, and administrative expense was primarily driven by increased marketing and personnel investment tied to our Sand State strategy, investments in new ERP infrastructure and the inclusion of Coverstar Central.

Current wording

Selling, general, and administrative expense was $91.1 million for the three fiscal quarters ended September 27, 2025, compared to $81.2 million for the three fiscal quarters ended September 28, 2024. The $9.9 million, or 12.3%, increase in selling, general, and administrative expense was primarily driven by increased marketing and personnel investment tied to our Sand State strategy, investments in new ERP infrastructure and the inclusion of Coverstar Central.

Previous wording

Amortization was $14.5 million for the two fiscal quarters ended June 28, 2025, compared to $12.8 million for the two fiscal quarters ended June 29, 2024. The $1.7 million, or 12.9%, increase in amortization was driven by the three Coverstar acquisitions.

Current wording

Amortization was $21.7 million for the three fiscal quarters ended September 27, 2025, compared to $19.8 million for the three fiscal quarters ended September 28, 2024. The $1.9 million, or 9.5%, increase in amortization was driven by the three Coverstar acquisitions.

Previous wording

Interest expense, net was $13.5 million for the two fiscal quarters ended June 28, 2025, compared to $11.0 million for the two fiscal quarters ended June 29, 2024. The $2.5 million, or 23.0%, increase in interest expense, net was primarily the result of the change in the fair value of our interest rate swap, compared to the two fiscal quarters ended June 29, 2024.

Current wording

Interest expense, net was $19.6 million for the three fiscal quarters ended September 27, 2025, compared to $20.2 million for the three fiscal quarters ended September 28, 2024. The $0.6 million, or 2.8%, decrease in interest expense, net was the result of the change in the fair value of our interest rate swap and a decrease in the outstanding balance of long-term debt, compared to the three fiscal quarters ended September 28, 2024.

Previous wording

Other income, net was $3.4 million for the two fiscal quarters ended June 28, 2025, compared to other expense, net of $2.4 million for the two fiscal quarters ended June 29, 2024. The $5.8 million increase in other income, net was primarily driven by a favorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.

Current wording

Other income, net was $2.2 million for the three fiscal quarters ended September 27, 2025, compared to other expense, net of $1.7 million for the three fiscal quarters ended September 28, 2024. The $3.9 million increase in other income, net was primarily driven by a favorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.

Previous wording

Earnings from our equity method investment in Premier Pools & Spa were $0.5 million for the fiscal quarter ended June 28, 2025, largely unchanged from the fiscal quarter ended June 29, 2024, due to the financial performance of Premier Pools & Spa.

Current wording

Earnings from our equity method investment in Premier Pools & Spa were $2.8 million for the three fiscal quarters ended September 27, 2025, largely unchanged from the three fiscal quarters ended September 28, 2024, due to the financial performance of Premier Pools & Spa.

Previous wording

Income tax expense was $1.1 million for the two fiscal quarters ended June 28, 2025, compared to income tax expense of $1.0 million for the two fiscal quarters ended June 29, 2024. Our effective tax rate was 9.5% for the two fiscal quarters ended June 28, 2025, compared to 15.2% for the two fiscal quarters ended June 29, 2024. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for both the two fiscal quarters ended June 28, 2025 and June 29, 2024 was primarily attributable to the impacts of stock-based compensation expense and foreign income.

Current wording

Income tax expense was $8.5 million for the three fiscal quarters ended September 27, 2025, compared to income tax expense of $0.9 million for the three fiscal quarters ended September 28, 2024. Our effective tax rate was 32.0% for the three fiscal quarters ended September 27, 2025, compared to 7.6% for the three fiscal quarters ended September 28, 2024. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for both the three fiscal quarters ended September 27, 2025 and September 28, 2024 was primarily attributable to the discrete impact of stock-based compensation expense for which there is no associated tax benefit and the effects of branch accounting for Latham Canada.

Previous wording

Net income was $10.0 million for the two fiscal quarters ended June 28, 2025, compared to $5.4 million for the two fiscal quarters ended June 29, 2024. The $4.6 million, or 85.0%, increase in net income was primarily because of the factors described above.

Current wording

Net income was $18.1 million for the three fiscal quarters ended September 27, 2025, compared to $11.3 million for the three fiscal quarters ended September 28, 2024. The $6.8 million, or 60.3%, increase in net income was primarily because of the factors described above.

Previous wording

Net income margin was 3.5% for the two fiscal quarters ended June 28, 2025, compared to 2.0% for the two fiscal quarters ended June 29, 2024. The 1.5% increase in net income margin was driven by a $4.6 million increase in net income, compared to the two fiscal quarters ended June 29, 2024 because of the factors described above.

Current wording

Net income margin was 4.1% for the three fiscal quarters ended September 27, 2025, compared to 2.7% for the three fiscal quarters ended September 28, 2024. The 1.4% increase in net income margin was driven by a $6.8 million increase in net income, compared to the three fiscal quarters ended September 28, 2024 because of the factors described above.

Previous wording

Adjusted EBITDA was $39.9 million for the fiscal quarter ended June 28, 2025, compared to $34.5 million for the fiscal quarter ended June 29, 2024. The $5.4 million, or 15.7%, increase in Adjusted EBITDA was primarily because of the gross profit growth from increase in net sales that more than offset higher selling, general and administrative expense, as well as the other factors described above.

Current wording

Adjusted EBITDA was $89.4 million for the three fiscal quarters ended September 27, 2025, compared to $76.6 million for the three fiscal quarters ended September 28, 2024. The $12.8 million, or 16.7%, increase in Adjusted EBITDA was primarily because of the increase in net sales that more than offset higher selling, general and administrative expense, as well as the other factors described above.

Previous wording

Adjusted EBITDA margin was 18.0% for the two fiscal quarters ended June 28, 2025, compared to 17.3% for the two fiscal quarters ended June 29, 2024. The 0.7% increase in Adjusted EBITDA margin was primarily because of the $4.2 million increase in Adjusted EBITDA, compared to the two fiscal quarters ended June 29, 2024, which was impacted by the other factors described above.

Current wording

Adjusted EBITDA margin was 20.0% for the three fiscal quarters ended September 27, 2025, compared to 18.2% for the three fiscal quarters ended September 28, 2024. The 1.8% increase in Adjusted EBITDA margin was primarily because of the $12.8 million increase in Adjusted EBITDA, compared to the three fiscal quarters ended September 28, 2024, which was impacted by the other factors described above.

Previous wording

Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax (benefit) expense, (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.

Current wording

Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized losses (gains) on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.

Previous wording

(c) Represents unrealized foreign currency transaction (gains) losses associated with our international subsidiaries.

Current wording

(c) Represents unrealized foreign currency transaction losses (gains) associated with our international subsidiaries.

Previous wording

Our primary sources of liquidity are existing cash on hand, net cash provided by operating activities and availability under our Revolving Credit Facility (as defined below). Historically, we have funded working capital requirements, capital expenditures, payments related to acquisitions, and debt service requirements with internally generated cash on hand, borrowings under our credit facilities, and the issuance of shares of our common stock. Our primary cash needs are to fund working capital, capital expenditures, debt service requirements, any acquisitions, or investments we may undertake, and any share repurchases we may make. As of June 28, 2025, we had $26.9 million of cash, $281.5 million of outstanding indebtedness and an additional $75.0 million of borrowing availability under our Revolving Credit Facility.

Current wording

Our primary sources of liquidity are existing cash on hand, net cash provided by operating activities and availability under our Revolving Credit Facility (as defined below). Historically, we have funded working capital requirements, capital expenditures, payments related to acquisitions, and debt service requirements with internally generated cash on hand, borrowings under our credit facilities, and the issuance of shares of our common stock. Our primary cash needs are to fund working capital, capital expenditures, debt service requirements, any acquisitions, or investments we may undertake, and any share repurchases we may make. As of September 27, 2025, we had $70.5 million of cash, $281.1 million of outstanding indebtedness and an additional $75.0 million of borrowing availability under our Revolving Credit Facility.

Previous wording

On June 12, 2025, we repaid the $25.0 million of outstanding borrowings on the Revolving Credit Facility. As of June 28, 2025, we had no outstanding borrowings under the Revolving Credit Facility and $75.0 million was available for future borrowing.

Current wording

During the three fiscal quarters ended September 27, 2025, we repaid the $25.0 million of outstanding borrowings on the Revolving Credit Facility. As of September 27, 2025, we had no outstanding borrowings under the Revolving Credit Facility and $75.0 million was available for future borrowing.

Previous wording

As of June 28, 2025, we had $281.5 million of outstanding borrowings under the Term Loan.

Current wording

As of September 27, 2025, we had $281.1 million of outstanding borrowings under the Term Loan.

Previous wording

On May 10, 2022, our Board approved a stock repurchase program (the “Repurchase Program”), which authorized us to repurchase up to $100 million of our shares of common stock by May 2025. We did not repurchase any shares of our common stock during the two fiscal quarters ended June 28, 2025, and our Repurchase Program expired on May 10, 2025. We do not have an effective stock repurchase program.

Current wording

On May 10, 2022, our Board approved a stock repurchase program (the “Repurchase Program”), which authorized us to repurchase up to $100 million of our shares of common stock by May 2025. We did not repurchase any shares of our common stock during the three fiscal quarters ended September 27, 2025, and our Repurchase Program expired on May 10, 2025. We do not have an effective stock repurchase program.

Previous wording

During the two fiscal quarters ended June 28, 2025, operating activities used $10.9 million of cash. Net income, after adjustments for non-cash items, provided cash of $40.0 million. Cash used in operating activities was driven by changes in our operating assets and liabilities, which used $50.9 million. Net cash used by changes in our operating assets and liabilities for the two fiscal quarters ended June 28, 2025 consisted primarily of a $57.4 million increase in trade receivables, a $4.9 million increase in income tax receivable, a $2.7 million increase in prepaid expenses and other current assets, a $0.9 million increase in inventories, a $0.2 million decrease in other long-term liabilities and a $0.2 million increase in other assets, partially offset by a $13.1 million increase in accounts payable and a $2.4 million increase in accrued expenses and other current liabilities. The change in trade receivables was primarily driven by the increase and timing of net sales and the change in accounts payable were primarily driven by volume of purchases and timing of payments.

Current wording

During the three fiscal quarters ended September 27, 2025, operating activities provided $40.1 million of cash. Net income, after adjustments for non-cash items, provided cash of $67.3 million. Cash provided by operating activities was partially reduced by changes in our operating assets and liabilities, which used $27.1 million. Net cash used by changes in our operating assets and liabilities for the three fiscal quarters ended September 27, 2025 consisted primarily of a $50.4 million increase in trade receivables, a $5.6 million increase in income tax receivable, a $0.8 million increase in prepaid expenses and other current assets, a $0.5 million decrease in other long-term liabilities and a $0.2 million increase in other assets, partially offset by a $16.3 million increase in accounts payable, a $7.3 million decrease in inventories and a $6.7 million increase in accrued expenses and other current liabilities. The change in trade receivables was primarily driven by the increase and timing of net sales and the change in accounts payable were primarily driven by volume of purchases and timing of payments.

Previous wording

During the two fiscal quarters ended June 29, 2024, operating activities provided $17.9 million of cash. Net income, after adjustments for non-cash items, provided cash of $36.1 million. Cash provided by operating activities was further impacted by changes in our operating assets and liabilities, which used $18.2 million. Net cash used by changes in our operating assets and liabilities for the two fiscal quarters ended June 29, 2024 consisted primarily of a $36.8 million increase in trade receivables, a $2.3 million increase in prepaid expenses and other current assets, a $1.2 million decrease in accrued expenses and other current liabilities,

Current wording

During the three fiscal quarters ended September 28, 2024, operating activities provided $55.2 million of cash. Net income, after adjustments for non-cash items, provided cash of $60.3 million. Cash provided by operating activities was further impacted by changes in our operating assets and liabilities, which used $5.2 million. Net cash used by changes in our operating assets and liabilities for the three fiscal quarters ended September 28, 2024 consisted primarily of a $35.6 million increase in trade receivables, a $6.6

Previous wording

a $0.7 million increase in income tax receivable and a $0.4 million decrease in other long-term liabilities, partially offset by a $13.1 million decrease in inventories, a $9.8 million increase in accounts payable and a $0.3 million decrease in other assets. The change in trade receivables was primarily driven by the timing of net sales, the change in inventories was driven by efforts to meet a reduced demand outlook while maintaining lead times and service levels and the changes in accounts payable were primarily driven by volume of purchases and timing of payments.

Current wording

million increase in income tax receivable, a $2.3 million increase in prepaid expenses and other current assets and a $0.6 million increase in other long-term liabilities, partially offset by a $25.5 million decrease in inventories, a $10.4 million increase in accounts payable, a $3.4 million increase in accrued expenses and other current liabilities, and a $0.6 million decrease in other assets. The change in trade receivables was primarily driven by the timing of net sales, the change in inventories was driven by efforts to meet a reduced demand outlook while maintaining lead times and service levels and the changes in accounts payable were primarily driven by volume of purchases and timing of payments.