FOX FACTORY HOLDING CORP

Previous wording

This Quarterly Report on Form 10-Q includes forward-looking statements, which are subject to the “safe harbor” created by Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may make forward-looking statements in our SEC filings, press releases, news articles, earnings presentations and when we are speaking on behalf of the Company. Forward-looking statements generally relate to future events or our future financial or operating performance that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential”, “remain”, or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to numerous risks and uncertainties, including but not limited to risks related to:

Current wording

This Quarterly Report on Form 10-Q includes forward-looking statements, which are subject to the “safe harbor” created by Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may make forward-looking statements in our SEC filings, press releases, news articles, earnings presentations and when we are speaking on behalf of the Company. Forward-looking statements generally relate to future events or our future financial or operating performance that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “can,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential”, “remain”, or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to numerous risks and uncertainties, including but not limited to risks related to:

Previous wording

•our ability to adapt our business model to mitigate the impact of certain changes in tax laws, tariffs, and international trade policies;

Current wording

•our ability to adapt our business model to mitigate the impact of certain changes in tax laws, tariffs, and international trade policies, including regulations or orders related to the import and export of industry products;

Previous wording

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

Current wording

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make or choose not to make.

Previous wording

Total net sales for the three months ended July 4, 2025 increased $26.4 million, or 7.6%, compared to the three months ended June 28, 2024. The increase in net sales is driven by the stabilization in bike sales, increased demand for aftermarket products, and the expansion of motorcycle business, which offset lower industry demand in the automotive OE product lines. Although, net sales increased, high interest rates impacting industry and consumer demands, high vehicle costs, and macro-economic conditions impacting dealers and consumers remain headwinds.

Current wording

Total net sales for the three months ended October 3, 2025 increased $17.3 million, or 4.8%, compared to the three months ended September 27, 2024. The increase in net sales is driven by increased demand for aftermarket products, strategic customer program launches, and market share gains in motorcycle business, which more than offset lower industry demand in the automotive OE product lines and reduced inventory levels by OEMs, distributors, and dealers in response to market-wide economic conditions. Although net sales increased, high interest rates impacting industry and consumer demand, high vehicle costs, and macro-economic conditions remain headwinds.

Previous wording

Cost of sales for the three months ended July 4, 2025 increased $20.4 million, or 8.6%, compared to the three months ended June 28, 2024. The increase in cost of sales is mainly due to our increased sales. Our gross margin decreased 60 basis points to 31.2% for the three months ended July 4, 2025, as compared to the same prior fiscal year period, primarily due to our product mix and impact of tariffs.

Current wording

Cost of sales for the three months ended October 3, 2025 increased $10.3 million, or 4.1%, compared to the three months ended September 27, 2024. The increase in cost of sales is mainly due to our increased sales and impact of tariffs. Our gross margin increased 50 basis points to 30.4% for the three months ended October 3, 2025, as compared to the same prior fiscal year period, primarily due to our product mix.

Previous wording

Total operating expenses for the three months ended July 4, 2025 were $98.5 million, compared to $92.4 million for the three months ended June 28, 2024. Research and development expenses and sales and marketing expenses increased $3.1 million and $1.7 million, respectively, mainly due to investments to support future growth and product innovation. General and administrative expenses increased $2.0 million driven by our organizational restructuring initiatives.

Current wording

Total operating expenses for the three months ended October 3, 2025 were $99.4 million, compared to $88.7 million for the three months ended September 27, 2024. General and administrative expenses increased $5.2 million driven by our organizational restructuring initiatives. Sales and marketing expenses and research and development expenses increased $3.6 million and $2.5 million, respectively, mainly due to investments to support strategic customer launches and product innovation.

Previous wording

As a result of the factors discussed above, income from operations for the three months ended July 4, 2025 decreased $0.1 million, or 0.5%, compared to income from operations for the three months ended June 28, 2024.

Current wording

As a result of the factors discussed above, income from operations for the three months ended October 3, 2025 decreased $3.7 million, or 19.7%, compared to income from operations for the three months ended September 27, 2024.

Previous wording

Interest and other expense, net for the three months ended July 4, 2025 decreased by $0.6 million to $13.0 million, compared to $13.6 million for the three months ended June 28, 2024.

Current wording

Interest and other expense, net for the three months ended October 3, 2025 decreased by $0.2 million to $13.5 million, compared to $13.7 million for the three months ended September 27, 2024.

Previous wording

The effective tax rates were 50.9% and (7.4)% for the three months ended July 4, 2025 and June 28, 2024, respectively.

Current wording

The effective tax rates were 140.8% and 5.0% for the three months ended October 3, 2025 and September 27, 2024, respectively.

Previous wording

For the three months ended July 4, 2025, the difference between the Company’s effective tax rate of 50.9% and the 21% federal statutory rate was primarily due to the unfavorable impact of discrete items in proportion to lower levels of pre-tax income.

Current wording

For the three months ended October 3, 2025, the difference between the Company’s effective tax rate of 140.8% and the 21% federal statutory rate was primarily due to unfavorable impact of discrete items in proportion to lower levels of pre-tax income.

Previous wording

For the three months ended June 28, 2024, the difference between our effective tax rate of (7.4)% and the 21% federal statutory rate was primarily due to the favorable impact of discrete items in proportion to lower levels of pre-tax income.

Current wording

For the three months ended September 27, 2024, the difference between our effective tax rate of 5.0% and the 21% federal statutory rate was primarily due to the favorable impact of discrete items on lower levels of pre-tax income.

Previous wording

As a result of the factors described above, our net income decreased $2.7 million, or 50.0%, to $2.7 million in the three months ended July 4, 2025 from net income of $5.4 million for the three months ended June 28, 2024.

Current wording

As a result of the factors described above, our net income decreased $5.5 million, or 114.6%, to a net loss of $0.7 million in the three months ended October 3, 2025 from net income of $4.8 million for the three months ended September 27, 2024.

Previous wording

For additional financial information related to our operating segments including the reconciliation of net income attributable to our common stockholders to adjusted EBITDA, see Note 15 – Segment Information.

Current wording

For additional financial information related to our operating segments including the reconciliation of consolidated net (loss) income to adjusted EBITDA, see Note 15 – Segment Information.

Previous wording

Powered Vehicles Group net sales increased by $9.7 million, or 4.1%, due to the inclusion of $23.7 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE and power sports.

Current wording

Powered Vehicles Group net sales increased by $16.5 million, or 15.1%, mainly due to strategic customer program launches and the inclusion of $9.1 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE product lines.

Previous wording

Powered Vehicles Group adjusted EBITDA increased by $0.5 million, or 3.1%, primarily due to higher gross profit, partially offset by an increase in research and development expenses.

Current wording

Powered Vehicles Group adjusted EBITDA increased by $10.0 million, or 112.4%, primarily due to higher gross profit, partially offset by an increase in research and development expenses.

Previous wording

Aftermarket Applications Group net sales increased by $7.1 million, or 6.6%, driven by increased demand for aftermarket products; however, high interest rates, high vehicle costs, and macro-economic conditions impacting dealers and consumers continue to pose challenges.

Current wording

Aftermarket Applications Group net sales increased by $17.5 million, or 17.4%, driven by increased demand for aftermarket products; however, high interest rates, high vehicle costs, and macro-economic conditions impacting dealers and consumers continue to pose challenges.

Previous wording

Six months ended July 4, 2025 compared to six months ended June 28, 2024

Current wording

Nine months ended October 3, 2025 compared to nine months ended September 27, 2024

Previous wording

Total net sales for the six months ended July 4, 2025 increased $47.9 million, or 7.0%, compared to the six months ended June 28, 2024. The increase in net sales is primarily due to the stabilization in bike sales, increased demand for aftermarket products, and the expansion of motorcycle business, which offset lower industry demand in the automotive OE and power sports product lines. Although net sales increased, high interest rates impacting industry and consumer demands, high vehicle costs, and macro-economic conditions impacting dealers and consumers remain headwinds.

Current wording

Total net sales for the nine months ended October 3, 2025 increased $65.1 million, or 6.3%, compared to the nine months ended September 27, 2024. The increase in net sales is primarily due to increased demand for aftermarket products, and the expansion of motorcycle business, which offset lower industry demand in the automotive OE product lines. Although net sales increased, high interest rates impacting industry and consumer demands, high vehicle costs, and macro-economic conditions remain headwinds.

Previous wording

Cost of sales for the six months ended July 4, 2025 increased $35.4 million, or 7.6%, compared to the six months ended June 28, 2024. The increase in cost of sales is primarily due to our increased sales. Our gross margin decreased by 30 basis points to 31.1% for the six months ended July 4, 2025, as compared to the same prior fiscal year period, primarily due to shifts in our product line mix and impact of tariffs.

Current wording

Cost of sales for the nine months ended October 3, 2025 increased $45.6 million, or 6.3%, compared to the nine months ended September 27, 2024. The increase in cost of sales is primarily due to our increased sales. Our gross margin decreased by 10 basis points to 30.8% for the nine months ended October 3, 2025, as compared to the same prior fiscal year period, primarily due to shifts in our product line mix and impact of tariffs.

Previous wording

Total operating expenses for the six months ended July 4, 2025 were $458.7 million, compared to $186.7 million for the six months ended June 28, 2024. During the six months ended July 4, 2025, we recognized an impairment charge of $262.1 million as a result of our quantitative assessment on goodwill triggered by adverse changes in U.S. tariff policies, new and expanded tariffs enacted by the current presidential administration, and resulting sustained decline in our stock price. Research and development and sales and marketing expenses increased $5.6 million and $3.3 million, respectively, due to our investments to support future growth and product innovation. General and administrative expenses increased $2.0 million primarily on organizational restructuring initiatives.

Current wording

Total operating expenses for the nine months ended October 3, 2025 were $558.1 million, compared to $275.3 million for the nine months ended September 27, 2024. During the nine months ended October 3, 2025, we recognized an impairment charge of $262.1 million as a result of our quantitative assessment on goodwill triggered by adverse changes in U.S. tariff policies, new and expanded tariffs enacted by the current presidential administration, and resulting sustained decline in our stock price. Research and development and sales and marketing expenses increased $8.2 million and $6.9 million, respectively, due to our investments to support future growth and product innovation. General and administrative expenses increased $7.2 million primarily on organizational restructuring initiatives.

Previous wording

As a result of the factors discussed above, income from operations for the six months ended July 4, 2025 decreased $259.6 million, or 944.0%, compared to income from operations for the six months ended June 28, 2024.

Current wording

As a result of the factors discussed above, income from operations for the nine months ended October 3, 2025 decreased $263.3 million, or 568.7%, compared to income from operations for the nine months ended September 27, 2024.

Previous wording

Interest and other expense, net for the six months ended July 4, 2025 decreased by $1.4 million to $25.8 million, compared to $27.2 million for the six months ended June 28, 2024 due to the effect of foreign currency exchange rates.

Current wording

Interest and other expense, net for the nine months ended October 3, 2025 decreased by $1.7 million to $39.2 million, compared to $40.9 million for the nine months ended September 27, 2024 due to the effect of foreign currency exchange rates.

Previous wording

The effective tax rates were 0.3% and (600.0)% for the six months ended July 4, 2025 and June 28, 2024, respectively.

Current wording

The effective tax rates were (0.6)% and (26.2)% for the nine months ended October 3, 2025 and September 27, 2024, respectively.

Previous wording

For the six months ended July 4, 2025, the difference between the Company’s effective tax rate of 0.3% and the 21% federal statutory rate was due to the impairment impact of non-deductible goodwill.

Current wording

For the nine months ended October 3, 2025, the difference between the Company’s effective tax rate of (0.6)% and the 21% federal statutory rate was due to the impairment impact of non-deductible goodwill.

Previous wording

For the six months ended June 28, 2024, the difference between our effective tax rate of (600.0)% and the 21% federal statutory rate was due to the favorable impact of discrete items in proportion to lower levels of pre-tax income.

Current wording

For the nine months ended September 27, 2024, the difference between our effective tax rate of (26.2)% and the 21% federal statutory rate was due to the favorable impact of discrete items on lower levels of pre-tax income.

Previous wording

As a result of the factors described above, our net income decreased $258.9 million to a net loss of $257.0 million for the six months ended July 4, 2025 from a net income of $1.9 million for the six months ended June 28, 2024.

Current wording

As a result of the factors described above, our net income decreased $264.4 million to a net loss of $257.7 million for the nine months ended October 3, 2025 from a net income of $6.7 million for the nine months ended September 27, 2024.

Previous wording

For additional financial information related to our operating segments including the reconciliation of net income attributable to our common stockholders to adjusted EBITDA, see Note 15 – Segment Information.

Current wording

For additional financial information related to our operating segments including the reconciliation of consolidated net (loss) income to adjusted EBITDA, see Note 15 – Segment Information.

Previous wording

Powered Vehicles Group net sales increased by $5.7 million, or 4.9%, due to the inclusion of $11.7 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE product lines.

Current wording

Powered Vehicles Group net sales increased by $26.3 million, or 7.6%, due to the inclusion of $32.7 million in net sales from Marzocchi acquired in December 2024, partially offset by lower industry demand in automotive OE.

Previous wording

Powered Vehicles Group adjusted EBITDA decreased by $1.0 million, or 3.1%, mainly due to higher research and development expenses, partially offset by an increase in gross profit.

Current wording

Powered Vehicles Group adjusted EBITDA increased by $9.0 million, or 22.1%, mainly due to an increase in gross profit, partially offset by higher research and development expenses.

Previous wording

Aftermarket Applications Group net sales increased by $17.1 million, or 8.2%, driven by increased demand for aftermarket products; however, high interest rates, high vehicle costs, and macro-economic conditions impacting dealers and consumers continue to pose challenges.

Current wording

Aftermarket Applications Group net sales increased by $34.5 million, or 11.2%, driven by increased demand for aftermarket products; however, high interest rates, high vehicle costs, and macro-economic conditions impacting dealers and consumers continue to pose challenges.

Previous wording

Our primary cash needs are to support working capital, research and development, interest on debt, employee compensation, capital expenditures, acquisitions, debt repayments, and other general corporate purposes. Historically, we generally financed our liquidity needs with operating cash flows, borrowings under our 2022 Credit Facility, and the issuance of common stock. These sources of liquidity may be impacted by events described in Cautionary Note Regarding Forward-Looking Statements and Part II, Item 1A. Risk Factors.

Current wording

Our primary cash needs are to support working capital, research and development, interest on debt, employee compensation, capital expenditures, acquisitions, debt repayments, and other general corporate purposes. Historically, we generally financed our liquidity needs with operating cash flows, borrowings under our Credit Agreement, and the issuance of common stock. These sources of liquidity may be impacted by events described in Cautionary Note Regarding Forward-Looking Statements and Part II, Item 1A. Risk Factors.

Previous wording

As of July 4, 2025, we held $19.5 million of our $81.5 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

Current wording

As of October 3, 2025, we held $12.7 million of our $65.4 million of cash and cash equivalents in accounts of our subsidiaries outside of the U.S., which we may repatriate.

Previous wording

We expect that cash on hand, cash flows from operations and availability under our 2022 Credit Facility will be sufficient to fund our operations during the next 12 months from the date of this Form 10-Q and beyond.

Current wording

We expect that cash on hand, cash flows from operations and availability under our Credit Agreement will be sufficient to fund our operations during the next 12 months from the date of this Form 10-Q and beyond.

Previous wording

In the six months ended July 4, 2025, net cash provided by operating activities was $37.5 million. Our investment in operating assets and liabilities is a result of a decrease in accounts payable of $19.4 million, an increase in accounts receivable of $15.4 million, a decrease in income taxes payable of $4.0 million, and a decrease in accrued expenses and other liabilities of $0.4 million, partially offset by a decrease in prepaids and other assets of $17.6 million and a decrease in inventory of $1.8 million, excluding the impact of foreign currency translation. On a reported currency basis, the change in our accounts payable is driven by timing of inventory purchases and vendor payments and foreign currency translation. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The decrease in income taxes payable is mainly due to our income tax payments. The decrease in prepaids and other assets is primarily due to lower chassis deposits driven by working capital optimization efforts. On a reported currency basis, inventory increased primarily due to foreign currency translation, planned inventory builds to support anticipated demand, and the impact from higher tariffs, partially offset by our efforts to optimize inventory levels.

Current wording

In the nine months ended October 3, 2025, net cash provided by operating activities was $42.8 million. Our investment in operating assets and liabilities is mainly a result of an increase in accounts receivable of $30.7 million, a decrease in accrued expenses and other liabilities of $8.5 million, an increase in inventory of $4.9 million, and a decrease in income taxes payable of $4.8 million, partially offset by a decrease in prepaids and other assets of $0.6 million, excluding the impact of foreign currency translation. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The decrease in income taxes payable is mainly due to our income tax payments. The decrease in accrued expenses and other liabilities is driven by a reduction in warranty reserve. On a reported currency basis, inventory increased primarily due to planned inventory builds to support anticipated demand, the impact from higher tariffs, and foreign currency translation, partially offset by our efforts to optimize inventory levels.

Previous wording

In the six months ended June 28, 2024, net cash provided by operating activities was $36.0 million. Our investment in operating assets and liabilities is a result of an increase in prepaids and other assets of $37.1 million, a decrease in income taxes payable of $23.2 million, and an increase in inventory of $7.8 million, partially offset by an increase in accounts payable of $34.6 million, a decrease in accounts receivable of $12.0 million, and an increase in accrued expenses and other liabilities of $2.9 million. The increase in prepaids and other assets is primarily due to carrying new model year chassis to meet current year production needs for the upfitting product lines and, to a lesser degree, slowing sales of older model years. The decrease in income taxes payable is mainly due to our income tax payments. The change in our accounts payable is driven by timing of inventory purchases and vendor payments. The change in our accounts receivable reflects a decrease in our sales and the timing of customer collections.

Current wording

In the nine months ended September 27, 2024, net cash provided by operating activities was $50.1 million. Our investment in operating assets and liabilities is a result of an increase in inventory of $29.0 million, a decrease in income taxes payable of $25.3 million, and an increase in accounts receivable of $21.8 million, partially offset by an increase in accounts payable of $24.2 million, an increase in accrued expenses and other liabilities of $11.3 million, and a decrease in prepaids and other assets of $7.8 million. The decrease in income taxes payable is mainly due to lower income tax expense and our income tax payments. The increase in inventory is mainly due to timing and some seasonal inventory. The change in our accounts receivable reflects an increase in our sales and the timing of customer collections. The decrease in prepaids and other assets is primarily due to lower chassis deposits as we worked to sell through model year 2024. The increase in accrued expenses and other liabilities is mainly due to additional leases. The change in our accounts payable is driven by timing of inventory purchases and vendor payments.

Previous wording

In the six months ended July 4, 2025 and June 28, 2024, net cash used in investing activities was $19.4 million and $26.6 million, respectively. Investing activities for the six months ended July 4, 2025 consisted of $19.4 million of property and equipment additions. Investing activities for the six months ended June 28, 2024 consisted of $21.2 million of property and equipment additions, $5.0 million of cash consideration for our acquisitions, and $0.4 million of cash consideration for our purchase of other assets.

Current wording

In the nine months ended October 3, 2025 and September 27, 2024, net cash used in investing activities was $27.2 million and $42.5 million, respectively. Investing activities for the nine months ended October 3, 2025 consisted of $27.2 million of property and equipment additions. Investing activities for the nine months ended September 27, 2024 consisted of $32.1 million of property and equipment additions, $5.3 million of cash consideration for our purchase of other assets, and $5.0 million of cash consideration for our acquisitions.

Previous wording

In the six months ended July 4, 2025, net cash used in financing activities was $9.4 million, and consisted of the proceeds from our 2022 Credit Facility revolver of $57.0 million that were used to support our working capital, offset by payments of $53.0 million to reduce the revolver borrowings, $12.1 million repayments on our term loans, and payments of $1.3 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Current wording

In the nine months ended October 3, 2025, net cash used in financing activities was $21.5 million, and consisted of the proceeds from our Credit Agreement revolver of $77.0 million that were used to support our working capital, offset by payments of $79.0 million to reduce the revolver borrowings, $18.2 million repayments on our term loans, and payments of $1.3 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Previous wording

In the six months ended June 28, 2024, net cash used in financing activities was $10.7 million, and consisted of the proceeds from our 2022 Credit Facility revolver of $119.0 million and draw from the Delayed Draw Term Loan of $200.0 million that were used to support our working capital, offset by payments of $295.0 million to reduce the revolver borrowings, $7.1 million quarterly repayment on our Term A Loan, $25.0 million to repurchase shares of our common stock for retirement, and payments of $2.5 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Current wording

In the nine months ended September 27, 2024, net cash used in financing activities was $1.7 million, and consisted of the proceeds from our Credit Agreement revolver of $169.0 million and draw from the Delayed Draw Term Loan of $200.0 million that were used to support our working capital, offset by payments of $329.0 million to reduce the revolver borrowings, $13.2 million quarterly repayment on our Term A Loan, $25.0 million to repurchase shares of our common stock for retirement, and payments of $2.6 million to repurchase shares of our common stock to cover withholding taxes from our stock-based compensation program.

Previous wording

On April 5, 2022, the Company entered into a new credit agreement with Wells Fargo Bank, National Association, and other named lenders (the “2022 Credit Facility”). The 2022 Credit Facility, which matures on April 5, 2027, provides for revolving loans, swingline loans and letters of credit up to an aggregate amount of $650.0 million.

Current wording

On April 5, 2022, the Company entered into a new credit agreement with Wells Fargo Bank, National Association, and other named lenders. The Credit Agreement, which matures on April 5, 2027, provides for revolving loans, swingline loans and letters of credit up to an aggregate amount of $650.0 million.

Previous wording

The Company may borrow, prepay, and re-borrow principal under the 2022 Credit Facility during its term. Advances under the 2022 Credit Facility can be either Adjusted Term SOFR loans or base rate loans. SOFR rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to Term SOFR for such calculation plus 0.10% plus a margin ranging from 1.00% to 2.25%. Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds Rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the lender as its “prime rate”, and (iii) Adjusted Term SOFR rate for a one-month tenor plus 1.00%, subject to the interest rate floors set forth therein, plus a margin ranging from 0.00% to 1.00%. At July 4, 2025, the one-month SOFR and three-month SOFR rates were 4.33% and 4.34%, respectively. At July 4, 2025, our weighted-average interest rate on outstanding borrowing was 6.41%.

Current wording

The Company may borrow, prepay, and re-borrow principal under the Credit Agreement during its term. Advances under the Credit Agreement can be either Adjusted Term SOFR loans or base rate loans. SOFR rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to Term SOFR for such calculation plus 0.10% plus a margin ranging from 1.00% to 2.25%. Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds Rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the lender as its “prime rate”, and (iii) Adjusted Term SOFR rate for a one-month tenor plus 1.00%, subject to the interest rate floors set forth therein, plus a margin ranging from 0.00% to 1.00%. At October 3, 2025, the one-month SOFR and three-month SOFR rates were 4.29% and 4.34%, respectively. At October 3, 2025, our weighted-average interest rate on outstanding borrowing was 6.28%.