Climb Global Solutions, Inc.

Previous wording

Dividend Policy and Share Repurchase Program. Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases. Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $0.5 million, for the three months ended June 30, 2025, respectively, and $0.8 million and $0.3 million, for the three months ended June 30, 2024, respectively. The payment of future dividends and share repurchases is at the discretion of our Board of Directors and dependent on results of operations, projected capital requirements, and other factors the Board of Directors may find relevant.

Current wording

Dividend Policy and Share Repurchase Program. Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases. Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $0.3 million, for the three months ended September 30, 2025 and 2024. The payment of future dividends and share repurchases is at the discretion of our Board of Directors and dependent on results of operations, projected capital requirements, and other factors the Board of Directors may find relevant.

Previous wording

Net sales increased 73%, or $67.2 million, to $159.3 million for the three months ended June 30, 2025 compared to $92.1 million for the same period in the prior year. Gross profit increased 42%, or $7.7 million, to $26.3 million for the three months ended June 30, 2025, compared to $18.6 million for the same period in the prior year. Selling, general and administrative (“SG&A”) expenses increased 26%, or $3.4 million, to $16.4 million for the three months ended June 30, 2025 compared to $13.0 million for the same period in the prior year. Depreciation and amortization expense increased 129%, or $1.1 million, to $2.0 million for the three months ended June 30, 2025 compared to $0.9 million for the same period in the prior year. Net income increased 74%, or $2.5 million, to $5.9 million for the three months ended June 30, 2025 compared to $3.4 million for the same period in the prior year. Diluted income per share increased 73%, or $0.55 to $1.30 for the three months ended June 30, 2025 compared to $0.75 for the same period in the prior year.

Current wording

Net sales increased 35%, or $42.0 million, to $161.3 million for the three months ended September 30, 2025 compared to $119.3 million for the same period in the prior year. Gross profit increased 6%, or $1.4 million, to $25.7 million for the three months ended September 30, 2025, compared to $24.3 million for the same period in the prior year. Selling, general and administrative (“SG&A”) expenses increased 16%, or $2.3 million, to $16.2 million for the three months ended September 30, 2025 compared to $13.9 million for the same period in the prior year. Depreciation and amortization expense increased 65%, or $0.8 million, to $2.0 million for the three months ended September 30, 2025 compared to $1.2 million for the same period in the prior year. Net income decreased 14%, or $0.8 million, to $4.7 million for the three months ended September 30, 2025 compared to $5.5 million for the same period in the prior year. Diluted income per share decreased 14%, or $0.17 to $1.02 for the three months ended September 30, 2025 compared to $1.19 for the same period in the prior year.

Previous wording

The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. In cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates. These contracts generally have terms of no more than two months. The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings. The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions. The Company recognized an unrealized loss of less than $0.1 million on contracts outstanding as of June 30, 2025, which is included in foreign currency transaction loss in the Consolidated Statement of Earnings.

Current wording

The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. In cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates. These contracts generally have terms of no more than three months. The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings. The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions. The Company recognized an unrealized gainof less than $0.1 million on contracts outstanding as of September 30, 2025, which is included in foreign currency transaction loss in the Consolidated Statement of Earnings.

Previous wording

We consider gross profit growth and effective margin to be key metrics in evaluating our business. During the three months ended June 30, 2025, gross profit increased 42%, or $7.7 million, to $26.3 million compared to $18.6 million for the same period in the prior year while effective margin increased to 43.3% compared to 37.3% for the same period in the prior year. During the six months ended June 30, 2025, gross profit increased 40%, or $14.1 million, to $49.7 million compared to $35.6 million for the same period in the prior year while effective margin increased to 38.3% compared to 35.0% for the same period in the prior year.

Current wording

We consider gross profit growth and effective margin to be key metrics in evaluating our business. During the three months ended September 30, 2025, gross profit increased 6%, or $1.4 million, to $25.7 million compared to $24.3 million for the same period in the prior year while effective margin decreased to 42.3% compared to 45.7% for the same period in the prior year. During the nine months ended September 30, 2025, gross profit increased 26%, or $15.6 million, to $75.4 million compared to $59.8 million for the same period in the prior year while effective margin increased to 39.6% compared to 39.3% for the same period in the prior year.

Previous wording

Net sales for the three months ended June 30, 2025 increased 73%, or $67.2 million, to $159.3 million compared to $92.1 million for the same period in the prior year. Gross billings, an operational metric, for the three months ended June 30, 2025 increased 39%, or $140.8 million, to $500.6 million compared to $359.8 million for the same period in the prior year. Net sales and gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS. Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods. During the three months ended June 30, 2025, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the three months ended June 30, 2024, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Current wording

Net sales for the three months ended September 30, 2025 increased 35%, or $42.0 million, to $161.3 million compared to $119.3 million for the same period in the prior year. Gross billings, an operational metric, for the three months ended September 30, 2025 increased 8%, or $39.4 million, to $504.6 million compared to $465.2 million for the same period in the prior year. Net sales and gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS. Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods. During the three months ended September 30, 2025, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the three months ended September 30, 2024, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Previous wording

Distribution segment net sales for the three months ended June 30, 2025 increased 74%, or $65.2 million, to $153.0 million compared to $87.8 million for the same period in the prior year. Gross billings for the Distribution segment for the three months ended June 30, 2025 increased 40%, or $136.9 million, to $477.0 million compared to $340.1 million for the same period in the prior year. Net sales increased at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis.

Current wording

Distribution segment net sales for the three months ended September 30, 2025 increased 38%, or $42.5 million, to $154.4 million compared to $111.9 million for the same period in the prior year. Gross billings for the Distribution segment for the three months ended September 30, 2025 increased 9%, or $40.5 million, to $481.9 million compared to $441.4 million for the same period in the prior year. Net sales increased organically at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis, as well as the impact of the acquisition of DSS.

Previous wording

Solutions segment net sales for the three months ended June 30, 2025, increased 48%, or $2.1 million, to $6.3 million compared to $4.2 million for the same period in the prior year. Gross billings for the Solutions segment for the three months ended June 30, 2025 increased 19%, or $3.7 million, to $23.5 million compared to $19.8 million for the same period in the prior year. Net sales increased organically at a greater rate than gross billings due to differences in the product mix between the two periods.

Current wording

Solutions segment net sales for the three months ended September 30, 2025, decreased 7%, or $0.6 million, to $6.9 million compared to $7.5 million for the same period in the prior year. Gross billings for the Solutions segment for the three months ended September 30, 2025 decreased 5%, or $1.1 million, to $22.7 million compared to $23.8 million for the same period in the prior year. Net sales decreased at a greater rate than the decrease in gross billings due to differences in the product mix between the two periods in our Solution segment.

Previous wording

The Company had three major customers that accounted for 24%, 20% and 13%, respectively, of its total net sales during the three months ended June 30, 2025 and 18%, 1% and 18%, respectively, of its total net sales during the three months ended June 30, 2024. During thethree months ended June 30, 2025 the Company hadno major vendors, compared to one major vendor that accounted for 10% of total purchases during the three months ended June 30, 2024.

Current wording

The Company had two major customers that accounted for 22% and 14%, respectively, of its total net sales during the three months ended September 30, 2025 and 16% and 13%, resp ectively, of its total net sales during the three months ended September 30, 2024. The Company had one major vendor that accounted for 13% of total purchases during thethree months ended September 30, 2025, compared to no major vendors during the three months ended September 30, 2024.

Previous wording

Distribution segment gross profit for the three months ended June 30, 2025 increased 47%, or $7.3 million, to $23.0 million compared to $15.7 million for the same period in the prior year. The increase reflects the previously noted organic growth from existing vendor partnerships and a $2.4 million contribution from the DSS acquisition, partially offset by an increase in early pay discounts and other customer incentives as a percentage of gross billings.

Current wording

Distribution segment gross profit for the three months ended September 30, 2025 increased 4%, or $0.8 million, to $22.4 million compared to $21.6 million for the same period in the prior year. The increase reflects the previously noted organic growth from existing vendor partnerships as well as the contribution from the DSS acquisition, partially offset by an increase in early pay discounts and other customer incentives as a percentage of gross billings.

Previous wording

Customer rebates and discounts for the three months ended June 30, 2025 were $6.3 million compared to $3.2 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Current wording

Customer rebates and discounts for the three months ended September 30, 2025 were $5.6 million compared to $3.9 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Previous wording

Vendor rebates and discounts for the three months ended June 30, 2025 were $5.5 million compared to $1.6 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Current wording

Vendor rebates and discounts for the three months ended September 30, 2025 were $3.9 million compared to $0.8 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Previous wording

SG&A expenses for the three months ended June 30, 2025 increased 26%, or $3.4 million, to $16.4 million compared to $13.0 million for the same period in the prior year. This increase was primarily due to the impact of the acquisition of DSS of $0.9 million as well as an increase in salaries, commissions and other employees related expenses in support of the increased gross profit. SG&A expenses were 3.3% of gross billings for the three months ended June 30, 2025, compared to 3.6% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Current wording

SG&A expenses for the three months ended September 30, 2025 increased 16%, or $2.3 million, to $16.2 million compared to $13.9 million for the same period in the prior year. This increase was primarily due to the impact of the acquisition of DSS as well as an increase in salaries, commissions and other employees related expenses in support of the increased gross profit. SG&A expenses were 3.2% of gross billings for the three months ended September 30, 2025, compared to 3.0% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Previous wording

Depreciation and amortization expense for the three months ended June 30, 2025, increased 129%, or $1.1 million, to $2.0 million compared to $0.9 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition as well asamortization of previously capitalized ERP costs, which amortization commenced in the fourth quarter of 2024 andincreased amortization for a vendor relationship acquired through a prior year acquisition. The Company received notice of termination of its distribution agreement from this vendor and therefore changed the amortization life of the intangible asset to a shorter period to reflect the expected period of benefits.

Current wording

Depreciation and amortization expense for the three months ended September 30, 2025, increased 65%, or $0.8 million, to $2.0 million compared to $1.2 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition as well as amortization of previously capitalized ERP costs, which amortization commenced in the fourth quarter of 2024 and increased amortization for a vendor relationship acquired through a prior year acquisition. The Company received notice of termination of its distribution agreement from this vendor during the first quarter of 2025 and therefore changed the amortization life of the intangible asset to a shorter period to reflect the expected period of benefits.

Previous wording

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items. As a result, our estimated tax rate is adjusted each quarter. For the three months ended June 30, 2025 and 2024, the Company recorded a provision for income taxes of $1.8 million and $1.0 million, respectively. The effective tax rate for the three months ended June 30, 2025 and 2024 was 22.9% and 22.8%, respectively. The effective tax rate for the three months ended June 30, 2025 compared to the same period in the prior year was impacted bychanges in the mix of jurisdictions in which taxable income was earned and limitations on the deductibility of certain executive compensation amounts during both periods, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense during the three months ended June 30, 2025.

Current wording

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items. As a result, our estimated tax rate is adjusted each quarter. For the three months ended September 30, 2025 and 2024, the Company recorded a provision for income taxes of $1.6 million and $1.7 million, respectively. The effective tax rate for the three months ended September 30, 2025 and 2024 was 25.5% and 23.3%, respectively. The effective tax rate for the three months ended September 30, 2025 compared to the same period in the prior year was impacted by changes in the mix of jurisdictions in which taxable income was earned and limitations on the deductibility of certain executive compensation amounts during both periods, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense during the three months ended September 30, 2025. The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.1 million, which reduced our effective tax rate by 1.9% during the three months ended September 30, 2025.

Previous wording

Net sales for the six months ended June 30, 2025 increased 61%, or $112.8 million, to $297.3 million compared to $184.5 million for the same period in the prior year. Gross billings, an operational metric, for the six months ended June 30, 2025 increased 36%, or $260.0 million, to $975.1 million compared to $715.1 million for the same period in the prior year. Net sales and gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS. Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods. During thesix months ended June 30, 2025, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during thesix months ended June 30, 2024, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Current wording

Net sales for the nine months ended September 30, 2025 increased 51%, or $154.8 million, to $458.6 million compared to $303.8 million for the same period in the prior year. Gross billings, an operational metric, for the nine months ended September 30, 2025 increased 25%, or $299.5 million, to $1,479.8 million compared to $1,180.3 million for the same period in the prior year. Net sales and gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS. Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods. During thenine months ended September 30, 2025, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during thenine months ended September 30, 2024, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Previous wording

Distribution segment net sales for the six months ended June 30, 2025 increased 63%, or $110.5 million, to $285.2 million compared to $174.7 million for the same period in the prior year. Gross billings for the Distribution segment for thesix months ended June 30, 2025 increased 38%, or $255.9 million, to $930.6 million compared to $674.7 million for the same period in the prior year. Net sales increased at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis.

Current wording

Distribution segment net sales for the nine months ended September 30, 2025 increased 53%, or $153.1 million, to $439.6 million compared to $286.5 million for the same period in the prior year. Gross billings for the Distribution segment for thenine months ended September 30, 2025 increased 27%, or $298.9 million, to $1,412.5 million compared to $1,113.6 million for the same period in the prior year. Net sales increased organically at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis, as well as the impact of the acquisition of DSS.

Previous wording

Solutions segment net sales for the six months ended June 30, 2025, increased 24% or $2.3 million, to $12.1 million compared to $9.8 million for the same period in the prior year. Gross billings for the Solutions segment for thesix months ended June 30, 2025 increased 10%, or $4.1 million, to $44.5 million compared to $40.4 million for the same period in the prior year. Net sales increased organically at a greater rate than gross billings due to differences in the product mix between the two periods.

Current wording

Solutions segment net sales for the nine months ended September 30, 2025, increased 10% or $1.8 million, to $19.1 million compared to $17.3 million for the same period in the prior year. Gross billings for the Solutions segment for thenine months ended September 30, 2025 increased 1%, or $0.5 million, to $67.2 million compared to $66.7 million for the same period in the prior year. Net sales increased organically at a greater rate than gross billings due to differences in the product mix between the two periods.

Previous wording

The Company had three major customers that accounted for 25%, 13% and 13%, respectively, of its total net sales during the six months ended June 30, 2025 and 19%, 2% and 16%, respectively, of its total net sales during the six months ended June 30, 2024. During the six months ended June 30, 2025 the Company hadno major vendors, compared to one major vendor that accounted for 13% of total purchases during the six months ended June 30, 2024.

Current wording

The Company had two major customers that accounted for 24% and 13%, respectively, of its total net sales during thenine months ended September 30, 2025 and 17% and 15%, respectively, of its total net sales during thenine months ended September 30, 2024. During thenine months ended September 30, 2025 the Company had no major vendors, compared to one major vendor that accounted for 11% of total purchases during thenine months ended September 30, 2024.

Previous wording

Distribution segment gross profit for the six months ended June 30, 2025 increased 45%, or $13.5 million, to $43.4 million compared to $29.9 million for the same period in the prior year. The increase in Distribution segment gross profit was due to the aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisition of DSS of $4.4 million, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of gross billings.

Current wording

Distribution segment gross profit for the nine months ended September 30, 2025 increased 28%, or $14.3 million, to $65.8 million compared to $51.5 million for the same period in the prior year. The increase in Distribution segment gross profit was due to the aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisition of DSS, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of gross billings.

Previous wording

Solutions segment gross profit for the three months ended June 30, 2025 increased 13%, or $0.4 million, to $3.3 million compared to $2.9 million for the same period in the prior year. This increase was organically driven by the aforementioned increase in gross billings compared to the same period in the prior year.

Current wording

Solutions segment gross profit for the nine months ended September 30, 2025 increased 14%, or $1.2 million, to $9.6 million compared to $8.4 million for the same period in the prior year. This increase was organically driven by the aforementioned increase in gross billings compared to the same period in the prior year, as well as higher gross profit margins generated in both North America and Europe.

Previous wording

Customer rebates and discounts for the six months ended June 30, 2025 were $10.9 million compared to $6.6 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Current wording

Customer rebates and discounts for thenine months ended September 30, 2025 were $16.5 million compared to $10.4 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Previous wording

Vendor rebates and discounts for the six months ended June 30, 2025 were $10.3 million compared to $3.6 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Current wording

Vendor rebates and discounts for the nine months ended September 30, 2025 were $14.1 million compared to $4.4 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Previous wording

SG&A expenses for the six months ended June 30, 2025 increased 30%, or $7.6 million, to $33.1 million compared to $25.5 million for the same period in the prior year. This increase was primarily due to the impact of the acquisition of DSS of $2.0 million as well as an increase in salaries, commissions and other employee related expenses in support of the increased gross profit. SG&A expenses were 3.4% of gross billings for thesix months ended June 30, 2025, compared to 3.6% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Current wording

SG&A expenses for the nine months ended September 30, 2025 increased 25%, or $9.9 million, to $49.3 million compared to $39.4 million for the same period in the prior year. This increase was primarily due to the impact of the acquisition of DSS as well as an increase in salaries, commissions and other employee related expenses in support of the increased gross profit. SG&A expenses were 3.3% of gross billings for thenine months ended September 30, 2025 and 2024. The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Previous wording

Depreciation and amortization expense for thesix months ended June 30, 2025, increased 114%, or $2.0 million, to $3.7 million compared to $1.7 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition as well asamortization of previously capitalized ERP costs, which amortization commenced in the fourth quarter of 2024 andincreased amortization for a vendor relationship acquired through a prior year acquisition. The Company received notice of termination of its distribution agreement from this vendor and therefore changed the amortization life of the intangible asset to a shorter period to reflect the expected period of benefits.

Current wording

Depreciation and amortization expense for thenine months ended September 30, 2025, increased 94%, or $2.7 million, to $5.7 million compared to $3.0 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition as well as amortization of previously capitalized ERP costs, which amortization commenced in the fourth quarter of 2024 and increased amortization for a vendor relationship acquired through a prior year acquisition. The Company received notice of termination of its distribution agreement from this vendor during the first quarter of 2025 and therefore changed the amortization life of the intangible asset to a shorter period to reflect the expected period of benefits.

Previous wording

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items. As a result, our estimated tax rate is adjusted each quarter. For the six months ended June 30, 2025 and 2024, the Company recorded a provision for income taxes of $2.3 million and $1.9 million, respectively. The effective tax rate for thesix months ended June 30, 2025 and 2024 was 19.5% and 23.6%, respectively. The change in effective tax rate for thesix months ended June 30, 2025 compared to the same period in the prior year was impacted by a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, changes in the mix of jurisdictions in which taxable income was earned, as well as limitations on the deductibility of certain executive compensation amounts during both periods.

Current wording

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items. As a result, our estimated tax rate is adjusted each quarter. For the nine months ended September 30, 2025 and 2024, the Company recorded a provision for income taxes of $3.9 million and $3.6 million, respectively. The effective tax rate for thenine months ended September 30, 2025 and 2024 was 21.6% and 23.5%, respectively. The change in effective tax rate for thenine months ended September 30, 2025 compared to the same period in the prior year was impacted by a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, changes in the mix of jurisdictions in which taxable income was earned, as well as limitations on the deductibility of certain executive compensation amounts during both periods. The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.8 million, which reduced our effective tax rate by 4.6% during the nine months ended September 30, 2025.

Previous wording

Our cash and cash equivalents as of June 30, 2025 decreased 4%, or $1.2 million, to $28.6 million compared to $29.8 million as of December 31, 2024.

Current wording

Our cash and cash equivalents as of September 30, 2025 increased 67%, or $20.0 million, to $49.8 million compared to $29.8 million as of December 31, 2024.

Previous wording

Net cash and cash equivalents provided by operating activities for thesix months ended June 30, 2025 was $6.3 million, comprised primarily of net income adjusted for non-cash items of $16.3 million, partially offset by changes in operating assets and liabilities of $10.0 million.

Current wording

Net cash and cash equivalents provided by operating activities for thenine months ended September 30, 2025 was $28.5 million, comprised primarily of net income adjusted for non-cash items of $24.3 million, partially offset by changes in operating assets and liabilities of $4.2 million.

Previous wording

Net cash and cash equivalents used in investing activities during the six months ended June 30, 2025 was $1.4 million purchases of fixed assets supporting our recently completed ERP project and new leasehold improvements.

Current wording

Net cash and cash equivalents used in investing activities during the nine months ended September 30, 2025 was $1.7 million, comprised primarily of purchases of fixed assets supporting our recently completed ERP project and new leasehold improvements.

Previous wording

Net cash and cash equiv alents used in financing activities during thesix months ended June 30, 2025 was $6.8 million, comprised of payments of contingent considerations of $3.6 million, purchases of treasury stock of $1.4 million, dividend payments on our Common Stock of $1.5 million and repayments of borrowings under term loan of $0.3 million.

Current wording

Net cash and cash equiv alents used in financing activities during thenine months ended September 30, 2025 was $8.0 million, comprised of payments of contingent considerations of $3.6 million, purchases of treasury stock of $1.7 million, dividend payments on our Common Stock of $2.3 million and repayments of borrowings under term loan of $0.4 million.

Previous wording

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. (“First American”) pursuant to a Master Loan and Security Agreement. The proceeds from the Term Loan was used to fund certain capital expenditures. The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026. As of June 30, 2025, the Companyhad $0.5 million outstanding under the Term Loan.

Current wording

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. (“First American”) pursuant to a Master Loan and Security Agreement. The proceeds from the Term Loan was used to fund certain capital expenditures. The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026. As of September 30, 2025, the Companyhad $0.3 million outstanding under the Term Loan.