CarParts.com, Inc.

Previous wording

We are a leading online provider of aftermarket auto parts, including replacement parts, hard parts, and performance parts and accessories. We principally sell our products to individual consumers through our flagship website atwww.carparts.com, our app, and online marketplaces. Our proprietary product database maps our SKUs to product applications based on vehicle makes, models and years. Our corporate website is located atwww.carparts.com/investor. The inclusion of our website addresses in this report does not include or incorporate by reference into this report any information on our websites.

Current wording

We are a leading online provider of aftermarket auto parts, including replacement parts, hard parts, and performance parts and accessories. We principally sell our products to individual consumers through our flagship website atwww.carparts.com, our mobile app, and online marketplaces. Our proprietary product database maps our SKUs to product applications based on vehicle makes, models and years. Our corporate website is located atwww.carparts.com/investor. The inclusion of our website addresses in this report does not include or incorporate by reference into this report any information on our websites.

Previous wording

1.*Number of SKUs required to serve the market.*The number of automotive SKUs has grown dramatically over the last several years. In today’s market, unless the consumer is driving a high volume produced vehicle and needs a simple maintenance item, the part they need is not typically on the shelf at a brick-and-mortar store. We believe our user-friendly flagship website provides customers with a favorable alternative to the brick-and-mortar shopping experience by offering a comprehensive selection of approximately 1,690,000 SKUs with detailed product descriptions, attributes and photographs combined with the flexibility of fulfilling orders using both drop-ship and stock-and-ship methods.

Current wording

1.*Number of SKUs required to serve the market.*The number of automotive SKUs has grown dramatically over the last several years. In today’s market, unless the consumer is driving a high volume produced vehicle and needs a simple maintenance item, the part they need is not typically on the shelf at a brick-and-mortar store. We believe our user-friendly flagship website and mobile app provides customers with a favorable alternative to the brick-and-mortar shopping experience by offering a comprehensive selection of approximately 1,869,000 SKUs with detailed product descriptions, attributes and photographs combined with the flexibility of fulfilling orders using both drop-ship and stock-and-ship methods.

Previous wording

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed inPart II, Item IA, of this report, in*Part I, Item IA,in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 and inPart II, Item IA,*of our Quarterly Reports on Form 10-Q for the periods ended March 29, 2025 and June 28, 2025.

Current wording

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed inPart II, Item IA, of this report, and in*Part I, Item IA,*in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026.

Previous wording

For the third quarter of 2025, the Company generated net sales of $127,769, compared with $144,751 for the third quarter of 2024, representing a decrease of 11.7%. The Company incurred a net loss of $10,885 for the third quarter of 2025 compared to a net loss of $10,018 for the third quarter of 2024. The Company’s net loss before interest expense (income), net, income tax provision, depreciation and amortization expense, amortization of intangible assets, plus share-based compensation expense, workforce transition costs, distribution center costs and strategic alternatives exploration costs (“Adjusted EBITDA”) of $(2,168) in the third quarter of 2025 compared to $(1,162) in the third quarter of 2024. Adjusted EBITDA is not a Generally Accepted Accounting Principle (“GAAP”) measure. See the section below titled “Non-GAAP measures” for information regarding our use of Adjusted EBTIDA and a reconciliation from net loss.

Current wording

For the first quarter of 2026, the Company generated net sales of $131,961, compared with $147,378 for the first quarter of 2025, representing a decrease of 10.5%. The Company incurred a net loss of $1,940 for the first quarter of 2026 compared to a net loss of $15,283 for the first quarter of 2025. The Company’s net loss before interest expense (income), net, income tax (benefit) provision, depreciation and amortization expense, amortization of intangible assets, plus share-based compensation expense, gain on sale of subsidiary and strategic alternatives exploration costs (“Adjusted EBITDA”) of $585 in the first quarter of 2026 compared to $(6,229) in the first quarter of 2025. Adjusted EBITDA is not a Generally Accepted Accounting Principle (“GAAP”) measure. See the section below titled “Non-GAAP measures” for information regarding our use of Adjusted EBTIDA and a reconciliation from net loss.

Previous wording

Net sales decreased by 11.7% to $127,769 in the third quarter of 2025 compared to the third quarter of 2024. The decrease in net sales was primarily driven by the Company’s efforts to increase profitability by rationalizing marketing spend. Gross profit decreased by 17.1% to $42,275 and gross margin decreased 210 basis points to 33.1% compared to 35.2% in the third quarter of 2024. The decrease in gross margin was primarily driven by product mix and the impact of tariffs, partially offset by pricing increases.

Current wording

Net sales decreased by 10.5% to $131,961 in the first quarter of 2026 compared to the first quarter of 2025. The decrease in net sales was primarily driven by the Company’s efforts to increase profitability by rationalizing marketing spend. Gross profit decreased by 9.3% to $42,943 and gross margin increased 40 basis points to 32.5% compared to 32.1% in the first quarter of 2025. The increase in gross margin was primarily driven by product mix and favorable freight costs.

Previous wording

Total expenses, which primarily consisted of cost of sales and operating expense, decreased in the third quarter of 2025 compared to the same period in 2024. The changes in both cost of sales and operating expense are described in further detail under — “Results of Operations” below.

Current wording

Total expenses, which primarily consisted of cost of sales and operating expense, decreased in the first quarter of 2026 compared to the same period in 2025. The changes in both cost of sales and operating expense are described in further detail under — “Results of Operations” below.

Previous wording

Regulation G,“Conditions for Use of Non-GAAP Financial Measures,” and other provisions of the Exchange Act, define and prescribe the conditions for use of certain non-GAAP financial information. We provide EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. EBITDA consists of net loss before interest expense (income), net; income tax provision; depreciation and amortization expense; amortization of intangible assets; while Adjusted EBITDA consists of EBITDA before share-based compensation expense, workforce transition costs, distribution center costs and strategic alternatives exploration costs.

Current wording

Regulation G,“Conditions for Use of Non-GAAP Financial Measures,” and other provisions of the Exchange Act, define and prescribe the conditions for use of certain non-GAAP financial information. We provide EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. EBITDA consists of net loss before interest expense (income), net; income tax (benefit) provision; depreciation and amortization expense; amortization of intangible assets; while Adjusted EBITDA consists of EBITDA before share-based compensation expense, gain on sale of subsidiary and strategic alternatives exploration costs.

Previous wording

The Company believes that these non-GAAP financial measures provide important supplemental information to management and investors. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting the Company’s business and results of operations.

Current wording

We believe that these non-GAAP financial measures provide important supplemental information to management and investors. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting the our business and results of operations.

Previous wording

Management uses Adjusted EBITDA as one measure of the Company’s operating performance because it assists in comparing the Company’s operating performance on a consistent basis by removing the impact of share-based compensation expense as well as other items that we do not believe are representative of our ongoing operating performance. Internally, this non-GAAP measure is also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; and for evaluating the effectiveness of operational strategies. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the ongoing operations of companies in our industry.

Current wording

Management uses Adjusted EBITDA as one measure of our operating performance because it assists in comparing our operating performance on a consistent basis by removing the impact of share-based compensation expense as well as other items that we do not believe are representative of our ongoing operating performance. Internally, this non-GAAP measure is also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; and for evaluating the effectiveness of operational strategies. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the ongoing operations of companies in our industry.

Previous wording

This non-GAAP financial measure is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company’s consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from the Company’s non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

Current wording

This non-GAAP financial measure is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review our consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. In addition, we expect to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

Previous wording

Thirteen and Thirty-Nine Weeks Ended September 27, 2025 Compared to the Thirteen and Thirty-Nine Weeks Ended September 28, 2024

Current wording

Thirteen Weeks Ended April 4, 2026 Compared to the Thirteen Weeks Ended March 29, 2025

Previous wording

Net sales decreased $16,982, or 11.7%, for the third quarter of 2025 compared to the third quarter of 2024. Net sales decreased $28,214, or 6.2%, for the thirty-nine weeks ended September 27, 2025 (“YTD Q3 2025”) compared to the same period in 2024. The net sales decrease for the third quarter of 2025 was primarily driven by the Company’s efforts to increase profitability by rationalizing marketing spend. The net sales decrease for YTD Q3 2025 was primarily driven by the Company’s efforts to increase profitability by rationalizing marketing spend and inclement weather in the first quarter of 2025.

Current wording

Net sales decreased $15,417, or 10.5%, for the first quarter of 2026 compared to the same period in 2025. The net sales decrease for the first quarter of 2026 was primarily driven by the Company’s efforts to increase profitability by rationalizing marketing spend.

Previous wording

For the thirteen and thirty-nine weeks ended September 28, 2024, the effective tax rate for the Company was (1.4)% and (1.0)%, respectively. The effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different effective tax rates, share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount, and a change in the valuation allowance that offset the tax of the current period pre-tax loss.

Current wording

For the thirteen weeks ended April 4, 2026, the effective tax rate for the Company was 41.7%. The effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount, the write-off of an accrued withholding tax associated with the disposition of the Philippines entity, and a change in the valuation allowance that offset the tax of the current period pre-tax loss.

Previous wording

For the thirteen and thirty-nine weeks ended September 27, 2025, the effective tax rate for the Company was (0.5)% and (0.7)%, respectively. The effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different effective tax rates, share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount, and a change in the valuation allowance that offset the tax of the current period pre-tax loss.

Current wording

For the thirteen weeks ended March 29, 2025, the effective tax rate for the Company was (0.9)%. The effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different effective tax rates, share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount, and a change in the valuation allowance that offset the tax of the current period pre-tax loss.

Previous wording

The Company accounts for income taxes in accordance with ASC Topic 740 –Income Taxes(“ASC 740”). Under the provisions of ASC 740, management is required to evaluate whether a valuation allowance should be established against its deferred tax assets. We currently have a full valuation allowance against our deferred tax assets. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. For the thirty-nine weeks ended September 27, 2025, there was no material change from fiscal year ended December 28, 2024 in the amount of the Company's deferred tax assets that are not considered to be more likely than not to be realized in future years.

Current wording

The Company accounts for income taxes in accordance with ASC Topic 740 –Income Taxes(“ASC 740”). Under the provisions of ASC 740, management is required to evaluate whether a valuation allowance should be established against its deferred tax assets. We currently have a full valuation allowance against our deferred tax assets. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. For the thirteen weeks ended April 4, 2026, there was no material change from fiscal year ended January 3, 2026 in the amount of the Company's deferred tax assets that are not considered to be more likely than not to be realized in future years.

Previous wording

The impact of foreign currency is related to our offshore operations in the Philippines and sales of our products in Canada and was not material to our operations.

Current wording

The impact of foreign currency is mainly related to sales of our products in Canada and was not material to our operations. On January 27, 2026, we sold 100% of the issued and outstanding shares of our Philippines subsidiary to a third party. As a result, the Philippines subsidiary was deconsolidated from our consolidated financial statements.

Previous wording

During the thirty-nine weeks ended September 27, 2025, we primarily funded our operations with cash and cash equivalents generated from operations, borrowings from our revolving loan, issuance of common stock for $10,733 of gross proceeds (see “Note 3 - Stockholders’ Equity and Share-Based Compensation”), and the issuance of the Convertible Notes with an aggregate principal amount of $25,000 (see “Note 2 - Borrowings”). As of September 27, 2025 and December 28, 2024, our outstanding revolving loan balance under our Amended Credit Facility was $0. During the thirty-nine weeks ended September 27, 2025, we borrowed, and subsequently paid down, $20,565 from the revolving loan under the Amended Credit Facility. We had cash and cash equivalents of $36,011 as of September 27, 2025, representing a $386 decrease from $36,397 of cash as of December 28, 2024. Based on our current operating plan, we believe that our existing cash and cash equivalents, investments, cash flows from operations and available funds under our Amended Credit Facility will be sufficient to finance our operations through at least the next twelve months (see “Debt and Available Borrowing Resources” and “Funding Requirements” below).

Current wording

During the thirteen weeks ended April 4, 2026, we primarily funded our operations with cash and cash equivalents generated from operations, borrowings from our revolving loan, and issuance of common stock for $8,000 of gross proceeds (see “Note 3 - Stockholders’ Equity and Share-Based Compensation”). As of April 4, 2026 and January 3, 2026, our outstanding revolving loan balance under our Amended Credit Facility was $0 and $0, respectively. We had cash and cash equivalents of $37,856 as of April 4, 2026, representing a $12,035 increase from $25,821 of cash as of January 3, 2026. Based on our current operating plan, we believe that our existing cash and cash equivalents,

Previous wording

As of September 27, 2025 and December 28, 2024, our working capital was $59,679 and $48,445, respectively. The historical seasonality in our business during the year can cause cash and cash equivalents, inventory and accounts payable to fluctuate, resulting in changes in our working capital.

Current wording

As of April 4, 2026 and January 3, 2026, our working capital was $58,127 and $53,817, respectively. The historical seasonality in our business during the year can cause cash and cash equivalents, inventory and accounts payable to fluctuate, resulting in changes in our working capital.

Previous wording

The following table summarizes the key cash flow metrics from our consolidated statements of cash flows for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands):

Current wording

The following table summarizes the key cash flow metrics from our consolidated statements of cash flows for the thirteen weeks ended April 4, 2026 and March 29, 2025 (in thousands):

Previous wording

Net cash (used in) provided by operating activities for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 was ($26,477) and $8,542, respectively. The decrease was primarily driven by a higher net loss in YTD Q3 2025, in addition to the higher net cash outflow from the change in working capital, mainly attributable to the second quarter increase of our inventory position due to the uncertainty from tariffs.

Current wording

Net cash provided by operating activities for the thirteen weeks ended April 4, 2026 and March 29, 2025 was $7,261 and $5,505, respectively. The increase was primarily driven by a lower net loss in the thirteen weeks ended April 4, 2026, partially offset by lower net cash inflow from the change in working capital.

Previous wording

For the thirty-nine weeks ended September 27, 2025, net cash used in investing activities was primarily the result of additions to property and equipment of $6,281, which are mainly related to capitalized website and software development costs. For the thirty-nine weeks ended September 28, 2024, net cash used in investing activities was primarily the result of additions to property and equipment of $18,146, which are mainly related to leasehold improvements, capitalized website and software development costs, and machinery and equipment.

Current wording

For the thirteen weeks ended April 4, 2026, net cash used in investing activities was primarily the result of additions to property and equipment of $2,099, which are mainly related to capitalized website and software development costs. For the thirteen weeks ended March 29, 2025, net cash used in investing activities was primarily the result of additions to property and equipment of $2,116, which are mainly related to capitalized website and software development costs.

Previous wording

Net cash provided by financing activities was $32,372 for the thirty-nine weeks ended September 27, 2025, primarily due the issuance of the Convertible Notes with an aggregate principal amount of $25,000 and $10,733 of gross proceeds from the issuance of common stock, partially offset by $2,615 of payments on finance leases. Net cash used in financing activities was $3,345 for the thirty-nine weeks ended September 28, 2024, primarily due to $3,243 of payments on finance leases.

Current wording

Net cash provided by financing activities was $7,167 for the thirteen weeks ended April 4, 2026, primarily due to $8,000 of gross proceeds from the issuance of common stock, partially offset by $720 of payments on finance leases. Net cash used in financing activities was $1,254 for the thirteen weeks ended March 29, 2025, primarily due to $954 of payments on finance leases.

Previous wording

Total debt was $34,706 as of September 27, 2025 compared to $12,313 as of December 28, 2024 and primarily consists of Convertible Notes payable and right-of-use obligations – finance.

Current wording

Total debt was $33,412 as of April 4, 2026 compared to $34,010 as of January 3, 2026 and primarily consists of Convertible Notes payable and right-of-use obligations – finance.

Previous wording

On September 8, 2025, the Company entered into a Purchase Agreement with certain investors, pursuant to which the Company issued Convertible Notes with an aggregate principal amount of $25,000. The Convertible Notes accrue interest quarterly at a rate of two percent (2%) per annum, payable in kind. The maturity date is September 10, 2028. The outstanding Convertible Notes principal balance, plus any unpaid and accrued interest, is convertible at the option of the investors into shares of common stock of the Company at the maturity date, at a Conversion Price of $1.20 per share. As of September 27, 2025, the Convertible Notes payable balance was $25,024.

Current wording

On September 8, 2025, the Company entered into a Purchase Agreement with certain investors, pursuant to which the Company issued Convertible Notes with an aggregate principal amount of $25,000. The Convertible Notes accrue interest quarterly at a rate of two percent (2%) per annum, payable in kind. The maturity date is September 10, 2028. The outstanding Convertible Notes principal balance, plus any unpaid and accrued interest, is convertible at the option of the

Previous wording

As of September 27, 2025 and December 28, 2024, our outstanding revolving loan balance was $0 and $0, respectively. During the thirty-nine weeks ended September 27, 2025, we borrowed and subsequently paid down $20,565 from the revolving loan under the Amended Credit Facility. As of September 27, 2025 and December 28, 2024, the outstanding standby letters of credit balance was $680, respectively, and we had $0 of our trade letters of credit outstanding in accounts payable in our consolidated balance sheets.

Current wording

As of April 4, 2026 and January 3, 2026, our outstanding revolving loan balance was $0 and $0, respectively. As of April 4, 2026 and January 3, 2026, the outstanding standby letters of credit balance was $680 and $680, respectively, and we had $0 of our trade letters of credit outstanding in accounts payable in our consolidated balance sheets.

Previous wording

Loans drawn under the Amended Credit Facility bear interest, at the Company’s option, at a per annum rate equal to either (a) Adjusted Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 3.00% per annum, or (b) an “alternate prime base rate” plus an applicable margin of 1.50% per annum. As of September 27, 2025, the Company’s SOFR based interest rate was 7.26% and the Company’s prime based rate was 8.75%. A commitment fee, based upon unused availability under the Amended Credit Facility bearing interest at a rate of 0.50% per annum, is payable monthly. The Covenant Testing Trigger Period (as defined under the Amended Credit Agreement) means the period commencing on any day that excess availability is less than $5,000 for three consecutive business days and will continue until excess availability has been greater than, or equal to, $5,000 at all times for 45 consecutive days. In addition, upon the occurrence of a Covenant Testing Trigger Period, the Company shall be required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0, continuing until excess availability has been greater than or equal to $5,000 for 45 consecutive days.

Current wording

Loans drawn under the Amended Credit Facility bear interest, at the Company’s option, at a per annum rate equal to either (a) Adjusted Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 3.00% per annum, or (b) an “alternate prime base rate” plus an applicable margin of 1.50% per annum. As of April 4, 2026, the Company’s SOFR based interest rate was 6.76% and the Company’s prime based rate was 8.25%. A commitment fee, based upon unused availability under the Amended Credit Facility bearing interest at a rate of 0.50% per annum, is payable monthly. The Covenant Testing Trigger Period (as defined under the Amended Credit Agreement) means the period commencing on any day that excess availability is less than $5,000 for three consecutive business days and will continue until excess availability has been greater than, or equal to, $5,000 at all times for 45 consecutive days. In addition, upon the occurrence of a Covenant Testing Trigger Period, the Company shall be required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0, continuing until excess availability has been greater than or equal to $5,000 for 45 consecutive days.

Previous wording

Facility, and our liquidity and capital resources and ability to operate our business could be severely impacted, which would have a material adverse effect on our financial condition and results of operations. In those events, we may need to sell assets or seek additional equity or additional debt financing or attempt to modify our existing Amended Credit Agreement. There can be no assurance that we would be able to raise such additional financing or engage in such asset sales on acceptable terms, or at all, or that we would be able to modify our existing Amended Credit Agreement.

Current wording

The Amended Credit Agreement requires us to satisfy certain financial covenants which could limit our ability to react to market conditions or satisfy extraordinary capital needs and could otherwise restrict our financing and operations. If we are unable to satisfy the financial covenants and tests at any time, we may as a result cease being able to borrow under the Amended Credit Facility or be required to immediately repay loans under the Amended Credit Facility, and our liquidity and capital resources and ability to operate our business could be severely impacted, which would have a material adverse effect on our financial condition and results of operations. In those events, we may need to sell assets or seek additional equity or additional debt financing or attempt to modify our existing Amended Credit Agreement. There can be no assurance that we would be able to raise such additional financing or engage in such asset sales on acceptable terms, or at all, or that we would be able to modify our existing Amended Credit Agreement.

Previous wording

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales, costs and expenses, as well as the disclosure of contingent assets and liabilities and other related disclosures. On an ongoing basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition, uncollectible receivables, inventory, valuation of deferred tax assets and liabilities, intangible and other long-lived assets and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and we include any revisions to our estimates in our results for the period in which the actual amounts become known.

Current wording

Our unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales, costs and expenses, as well as the disclosure of contingent assets and liabilities and other related disclosures. On an ongoing basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition, uncollectible receivables, inventory, valuation of deferred tax assets and liabilities, intangible and other long-lived assets and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and we include any revisions to our estimates in our results for the period in which the actual amounts become known.