ROCKY BRANDS, INC.

Previous wording

During the second quarter of 2025, we experienced an increase in net sales over the second quarter of 2024. This increase was attributable to an increase in Wholesale and Retail net sales, partially offset by a decrease in Contract Manufacturing net sales. Overall gross margin improved over the past year, driven by an increase in Wholesale segment gross margin and the continued acceleration of growth in our Retail segment, which as noted above grew at a faster rate than our Wholesale and Contract Manufacturing segments. The increase in Wholesale gross margin as a percentage of net sales compared to the prior year period was largely due to favorable shifts in product mix, manufacturing efficiencies and strategic sourcing shifts. The favorable shift in product mix is largely attributed to an on-going shift in our branded net sales mix, with our rubber-boot brands delivering stronger growth relative to the rest of the brands under our portfolio.

Current wording

During the third quarter of 2025, we experienced an increase in net sales over the third quarter of 2024. This increase was attributable to an increase in net sales across all three of our reportable segments, Wholesale, Retail and Contact Manufacturing. Overall gross margin improved over the past year, driven by an increase in both our Wholesale segment gross margin and our Retail segment gross margin. The increase in Wholesale gross margin as a percentage of net sales compared to the prior year period was largely due to favorable shifts in product mix and price increases. The favorable shift in product mix was largely attributed to an on-going shift in our branded net sales mix, with our rubber-boot brands delivering stronger growth relative to the rest of the brands in our portfolio. The increase in Retail segment gross margin was largely driven by price increases during the third quarter of 2025.

Previous wording

Our operating expenses as a percentage of net sales increased for the three and six months ending June 30, 2025 compared to the three and six months ending June 30, 2024 due to the increase in Retail sales as well as an increase in marketing investments. Sales under our Retail segment are generally subject to higher selling and outbound logistics costs relative to those costs incurred under our Wholesale and Contract Manufacturing segments. In addition to the increased costs associated with Retail sales, we made incremental investments in traditional and digital marketing during the three and six months ended June 30, 2025 to drive sales growth.

Current wording

Our operating expenses as a percentage of net sales increased for the three and nine months ending September 30, 2025 compared to the three and nine months ending September 30, 2024 due to an increase in outbound logistics costs, an increase in Retail sales, as well as an increase in marketing investments. Sales under our Retail segment are generally subject to higher selling costs relative to those costs incurred under our Wholesale and Contract Manufacturing segments. In addition to the increased costs associated with Retail sales, we made incremental investments in traditional and digital marketing during the three and nine months ended September 30, 2025 to drive sales growth.

Previous wording

Interest expense declined for the three and six months ending June 30, 2025 compared to the same periods in 2024, due to lower interest rates following the refinancing of our debt in April 2024. Additionally, continued debt repayments over the past twelve months have reduced the overall outstanding principal balances, further contributing to the decrease in interest expense.

Current wording

Interest expense declined for the three and nine months ending September 30, 2025 compared to the same periods in 2024 due to continued debt repayments over the past twelve months, which have reduced the overall outstanding principal balances, as well as a decrease in interest rates.

Previous wording

SECOND QUARTER 2025 FINANCIAL HIGHLIGHTS COMPARED TO SECOND QUARTER 2024

Current wording

THIRD QUARTER 2025 FINANCIAL HIGHLIGHTS COMPARED TO THIRD QUARTER 2024

Previous wording

Net sales increased to $105.6 million in the second quarter of 2025 compared to $98.3 million in the second quarter of 2024. The increase in net sales in the current year quarter compared to the prior year quarter was due to an increase in both our Wholesale and Retail reporting segments, partially offset by a decrease in our Contract Manufacturing reporting segment.

Current wording

Net sales increased to $122.5 million in the third quarter of 2025 compared to $114.6 million in the third quarter of 2024. The increase in net sales in the current year quarter compared to the prior year quarter was due to an increase in net sales across all of our reportable segments: Wholesale, Retail and Contract Manufacturing.

Previous wording

Operating expenses for the second quarter of 2025 were $36.1 million, or 34.2% of net sales, compared to $33.5 million, or 34.1% of net sales, for the first quarter of 2024. The increase in operating expenses as a percentage of net sales was due to higher selling costs associated with the increase in Retail sales as well as incremental investments in marketing.

Current wording

Operating expenses for the third quarter of 2025 were $37.5 million, or 30.6% of net sales, compared to $33.6 million, or 29.3% of net sales, for the third quarter of 2024. The increase in operating expenses as a percentage of net sales was due to higher outbound logistics costs along with higher selling costs associated with the increase in Retail sales, and incremental investments in marketing.

Previous wording

Income from operations for the second quarter of 2025 was $7.2 million, or 6.8% of net sales, compared to $4.5 million, or 4.6% of net sales, in the year ago period. The increase in income from operations was primarily driven by the increase in gross margin for the three months ended June 30, 2025, compared to the year ago period.

Current wording

Income from operations for the third quarter of 2025 was $11.7 million, or 9.6% of net sales, compared to $10.1 million, or 8.8% of net sales, in the year ago period. The increase in income from operations was primarily driven by the increase in gross margin for the three months ended September 30, 2025, compared to the year ago period.

Previous wording

Net sales for the six months ended June 30, 2025 increased to $219.7 million compared to $211.2 million for the six months ended June 30, 2024. The increase in net sales was due to an increase in Retail segment net sales for the six months ended June 30, 2025 compared to the prior year period, partially offset by a decrease in Wholesale and Contract Manufacturing net sales.

Current wording

Net sales for the nine months ended September 30, 2025 increased to $342.3 million compared to $325.7 million for the nine months ended September 30, 2024. The increase in net sales was due to an increase in Retail segment net sales for the nine months ended September 30, 2025 compared to the prior year period, partially offset by a decrease in Wholesale and Contract Manufacturing net sales.

Previous wording

Gross margin in the second half of 2025 and 2024 was $90.3 million, or 41.1% of net sales and $82.1 million, or 38.9% of net sales, respectively. The increase in gross margin as a percentage of net sales was attributable to increased Wholesale segment gross margins as well as an increase in Retail net sales which carry higher gross margins than the Wholesale and Contract Manufacturing segments.

Current wording

Year-to-date gross margin for 2025 and 2024 was $139.6 million, or 40.8% of net sales, and $125.8 million, or 38.6% of net sales, respectively. The increase in gross margin as a percentage of net sales was attributable to increased Wholesale segment gross margins as well as an increase in Retail net sales which carry higher gross margins than the Wholesale and Contract Manufacturing segments.

Previous wording

Operating expenses for the six months ended June 30, 2025 were $74.4 million, or 33.9% of net sales, compared to $69.7 million, or 33.0% of net sales for the six months ended June 30, 2024. The increase in operating expenses as a percentage of net sales during the six months ended June 30, 2025 compared to the year ago period was largely attributable to an increase in selling and logistics costs associated with an increase in Retail sales as well as an increase in digital marketing.

Current wording

Operating expenses for the nine months ended September 30, 2025 were $112.0 million, or 32.7% of net sales, compared to $103.3 million, or 31.7% of net sales, for the nine months ended September 30, 2024. The increase in operating expenses as a percentage of net sales during the nine months ended September 30, 2025 compared to the year ago period was largely attributable to an increase in selling and logistics costs associated with an increase in Retail sales as well as an increase in digital marketing.

Previous wording

Income from operations for the six months ended June 30, 2025 was $15.9 million, or 7.2% of net sales, compared to $12.5 million, or 5.9% of net sales, for the same period a year ago. The increase in income from operations was primarily driven by an increase in gross margin in the current year period.

Current wording

Income from operations for the nine months ended September 30, 2025 was $27.6 million, or 8.1% of net sales, compared to $22.6 million, or 6.9% of net sales, for the same period a year ago. The increase in income from operations was primarily driven by an increase in gross margin in the current year period.

Previous wording

Wholesale net sales for the three months ended June 30, 2025 were $73.1 million compared to $68.3 million for the three months ended June 30, 2024. The increase in Wholesale net sales was due to increased demand across several key styles and brands, supported by favorable weather conditions and a stronger inventory position throughout the second quarter of 2025. Additionally, as part of a strategic initiative, we continued to build upon the lifestyle component of our outdoor category to broaden our distribution and consumer reach.

Current wording

Wholesale net sales for the three months ended September 30, 2025 were $89.1 million compared to $84.0 million for the three months ended September 30, 2024. The increase in Wholesale net sales was due to increased demand across several key styles and brands coupled with a tariff related price increase. Additionally, as part of a strategic initiative, we continued to build upon the lifestyle component of our outdoor category to broaden our distribution and consumer reach.

Previous wording

Retail net sales for the three months ended June 30, 2025 were $29.7 million compared to $26.1 million for the three months ended June 30, 2024. The increase was attributed to an increase in our Lehigh CustomFit business, third-party marketplace net sales, and our own e-commerce website net sales. The increase in our Lehigh CustomFit business was attributed to a realignment of our sales organization in the first quarter of 2024, which allowed us to expand our customer base, positioning Lehigh for long-term growth starting in the latter half of 2024. Consumer spending among Lehigh CustomFit customers has also increased with improved subsidy utilization and an increase in average subsidy dollars in the second quarter of 2025 compared to the second quarter of 2024. These factors have largely offset supply chain and tariff pressures. The increase in third-party marketplace platforms was attributed to increased presence within the marketplace space and more competitive pricing. The increase in our e-commerce websites in the second quarter of 2025 compared to the year ago period was due to increased promotions and more competitive pricing on certain products as we continue to optimize our inventory position.

Current wording

Retail net sales for the three months ended September 30, 2025 were $29.5 million compared to $26.8 million for the three months ended September 30, 2024. The increase was attributed to an increase in our Lehigh CustomFit business and third-party marketplace net sales. We experienced an increase in our Lehigh CustomFit business as we continue to make operational improvements to our CustomFit website and increase product offerings. Additionally, consumer spending among Lehigh CustomFit customers has continued to increase with improved subsidy utilization in the third quarter of 2025 compared to the third quarter of 2024. These factors have largely offset supply chain and tariff pressures. The increase in third-party marketplace platforms was attributed to increased presence within the marketplace space as well as price increases.

Previous wording

Wholesale gross margin for the three months ended June 30, 2025 was $29.5 million, or 40.3% of net sales, compared to $25.4 million, or 37.3% of net sales, for the three months ended June 30, 2024. The higher Wholesale gross margin in the second quarter of 2025 compared to the second quarter 2024 was attributable to a more favorable product mix, manufacturing efficiencies, and strategic sourcing shifts in the second quarter of 2025 compared to the prior year period. The favorable shift in product mix is largely attributed to an on-going shift in our branded net sales mix, with our rubber-boot brands delivering stronger growth relative to the rest of the brands under our portfolio.

Current wording

Wholesale gross margin for the three months ended September 30, 2025 was $35.2 million, or 39.5% of net sales, compared to $31.5 million, or 37.5% of net sales, for the three months ended September 30, 2024. The higher Wholesale gross margin in the third quarter of 2025 compared to the third quarter 2024 was attributable to a more favorable product mix and price increases in the third quarter of 2025 compared to the prior year period. The favorable shift in product mix was largely attributed to an on-going shift in our branded net sales mix, with our rubber-boot brands delivering stronger growth relative to the rest of the brands in our portfolio.

Previous wording

Contract Manufacturing gross margin for the three months ended June 30, 2025 was $0.3 million, or 12.4% of net sales, compared to $0.4 million, or 9.6% of net sales, for the three months ended June 30, 2024. The increase in Contract Manufacturing gross margin was driven by fewer contract manufacturing sales, which are typically at a lower margin than our U.S. Military sales.

Current wording

Contract Manufacturing gross margin for the three months ended September 30, 2025 was $0.3 million, or 6.9% of net sales, compared to $0.4 million, or 12.0% of net sales, for the three months ended September 30, 2024. The decrease in gross margin was driven by reduced economies of scale at our Puerto Rico manufacturing facility.

Previous wording

Operating expenses for the three months ended June 30, 2025 were $36.1 million, or 34.2% of net sales, compared to $33.5 million, or 34.1% of net sales, for the three months ended June 30, 2024. The increase in operating expenses as a percentage of net sales was due to increases in selling costs associated with a higher volume of Retail sales in the current year period as well as incremental marketing investments.

Current wording

Operating expenses for the three months ended September 30, 2025 were $37.5 million, or 30.6% of net sales, compared to $33.6 million, or 29.3% of net sales, for the three months ended September 30, 2024. The increase in operating expenses as a percentage of net sales was due to increases in outbound logistics costs and selling costs associated with a higher volume of Retail sales in the current year period as well as incremental marketing investments.

Previous wording

Interest Expense and Other - net for the three months ended June 30, 2025 was $2.5 million compared to $6.1 million in the year ago period. The decrease in interest expense was largely due to a $2.6 million loan extinguishment charge in the second quarter of 2024 associated with a prepayment penalty and accelerated amortization of deferred financing fees in connection with paying off our previous term debt. The remaining $1.0 million decrease in interest expense in the second quarter of 2025 compared to the prior year period was due to a decrease in interest rates resulting from our debt refinance that occurred in April 2024 as well as lower debt levels.

Current wording

Interest Expense and Other - net for the three months ended September 30, 2025 was $2.5 million compared to $3.2 million in the year ago period. The decrease in interest expense was due to lower debt levelsas well as a decrease in interest rates.

Previous wording

The decrease in our effective tax rate in the second quarter of 2025 compared to the same year ago period was due to changes in our projected income generated from our international business.

Current wording

The decrease in our effective tax rate in the third quarter of 2025 compared to the year ago period was primarily due to the mix of earnings between the United States and our international subsidiaries.

Previous wording

Retail net sales for thesix months ended June 30, 2025 were $66.4 million compared to $56.5 million for the six months ended June 30, 2024. The increase in Retail net sales for the first six months of 2025 was partially due to increased sales in our Lehigh CustomFit platform. The increase in our Lehigh CustomFit business was attributed to a realignment of our sales organization in the first quarter of 2024, which allowed us to expand our customer base, positioning Lehigh for long-term growth starting in the latter half of 2024. Consumer spending among Lehigh CustomFit customers has also increased with improved subsidy utilization and an increase in average subsidy dollars in the first half of 2025 compared to the first half of 2024. We also experienced an increase in sales through third-party marketplace platforms and owned e-commerce websites in the first six months of 2025 compared to the year ago period due to increased promotions and more competitive pricing on certain products as we continue to optimize our inventory position.

Current wording

Retail net sales for thenine months ended September 30, 2025 were $95.9 million compared to $83.3 million for the nine months ended September 30, 2024. The increase in Retail net sales for the first nine months of 2025 was due to increased sales in our Lehigh CustomFit business, third-party marketplace net sales, and our own e-commerce website net sales. The increase in our Lehigh CustomFit business was attributed to a realignment of our sales organization in the first quarter of 2024, which allowed us to expand our customer base, positioning Lehigh for long-term growth starting in the latter half of 2024. Consumer spending among Lehigh CustomFit customers has also increased with improved subsidy utilization and an increase in average subsidy dollars in the first nine months of 2025 compared to the year ago period. We also experienced an increase in sales through third-party marketplace platforms and owned e-commerce websites in the first nine months of 2025 compared to the year ago period due to increased promotions and more competitive pricing on certain products as we continue to optimize our inventory position.

Previous wording

Contract Manufacturing net sales for thesix months ended June 30, 2025 and 2024 were $5.5 million and $6.6 million, respectively. The decrease in sales during the current year period was due to no new contracts awarded with the U.S. Military and a decrease in our Contract Manufacturing sales.

Current wording

Contract Manufacturing net sales for thenine months ended September 30, 2025 and 2024 were $9.4 million and $10.3 million, respectively. The decrease in sales during the current year period was due to no new contracts awarded from the U.S. Military in 2025, partially offset by an increase in private label net sales.

Previous wording

Wholesale gross margin for the six months ended June 30, 2025 was $59.6 million of 40.3% of net sales, compared to $54.5 million, or 36.8% of net sales, for the six months ended June 30, 2024. The higher Wholesale gross margin in the first half of 2025 compared to the first half of 2024 was attributable to a more favorable product mix, manufacturing efficiencies, and strategic sourcing shifts in the first quarter of 2025 compared to the prior year period as well as the blanket commercial military order in the prior year period that elevated sales but carried a lower gross margin compared to other Wholesale sales. The favorable shift in product mix is largely attributed to an on-going shift in our branded net sales mix, with our rubber-boot brands delivering stronger growth relative to the rest of the brands under our portfolio.

Current wording

Wholesale gross margin for the nine months ended September 30, 2025 was $94.8 million or 40.0% of net sales, compared to $86.0 million, or 37.0% of net sales, for the nine months ended September 30, 2024. The higher Wholesale gross margin in the first nine months of 2025 compared to the first nine months of 2024 was attributable to a more favorable product mix as well as the blanket commercial military order in the prior year period that elevated sales but carried a lower gross margin compared to other Wholesale sales. The favorable shift in product mix was largely attributed to an on-going shift in our branded net sales mix, with our rubber boot brands delivering stronger growth relative to the rest of the brands in our portfolio.

Previous wording

Retail gross margin for the six months ended June 30, 2025 was $30.2 million, or 45.5% of net sales, compared to $27.0 million, or 47.8% of net sales, for the six months ended June 30, 2024. The decrease in gross margin as a percentage of net sales was attributable to a decrease in margin on our e-commerce and third-party marketplace platforms, driven by increased promotional activity and more competitive pricing as we continued to optimize our inventory position.

Current wording

Retail gross margin for the nine months ended September 30, 2025 was $44.0 million, or 45.9% of net sales, compared to $38.7 million, or 46.5% of net sales, for the nine months ended September 30, 2024. The decrease in gross margin as a percentage of net sales was attributable to a decrease in margin on our third-party marketplace platforms, driven by increased promotional activity and more competitive pricing as we continued to optimize our inventory position during the first half of 2025 prior to our price increase going into effect in the third quarter of 2025.

Previous wording

Contract Manufacturing gross margin for thesix months ended June 30, 2025 was $0.5 million, or 9.2% of net sales, compared to $0.7 million, or 10.4% of net sales, for thesix months ended June 30, 2024. The decrease in gross margin was driven by reduced economies of scale at our Puerto Rico manufacturing facility.

Current wording

Contract Manufacturing gross margin for thenine months ended September 30, 2025 was $0.8 million, or 8.2% of net sales, compared to $1.1 million, or 11.0% of net sales, for thenine months ended September 30, 2024. The decrease in gross margin was driven by reduced economies of scale at our Puerto Rico manufacturing facility.

Previous wording

Operating expenses for the six months ended June 30, 2025 were $74.4 million, or 33.9% of net sales, compared to $69.7 million, or 33.0% of net sales, for the six months ended June 30, 2024. The increase in operating expenses as a percentage of net sales was due to increases in selling and outbound logistics costs associated with a higher volume of Retail sales in the current year period as well as an increase in marketing investments.

Current wording

Operating expenses for the nine months ended September 30, 2025 were $112.0 million, or 32.7% of net sales, compared to $103.3 million, or 31.7% of net sales, for the nine months ended September 30, 2024. The increase in operating expenses as a percentage of net sales was due to increases in selling and outbound logistics costs associated with a higher volume of Retail sales in the current year period as well as an increase in marketing investments.

Previous wording

Interest Expense and Other - net for thesix months ended June 30, 2025 was $4.9 million compared to $10.8 million in the year ago period. The decrease in interest expense was partially due to a $2.6 million loan extinguishment charge during the first six months of 2024 associated with a prepayment penalty and accelerated amortization of deferred financing fees in connection with paying off our previous term debt. The remaining decrease in interest expense is due to lower interest rates resulting from our debt refinance that occurred April 2024 as well as lower debt levels.

Current wording

Interest Expense and Other - net for thenine months ended September 30, 2025 was $7.4 million compared to $14.0 million in the year ago period. The decrease in interest expense was partially due to a $2.6 million loan extinguishment charge during the first six months of 2024 associated with a prepayment penalty and accelerated amortization of deferred financing fees in connection with paying off our previous term debt. The remaining decrease in interest expense was due to lower interest rates resulting from our debt refinance that occurred April 2024 as well as lower debt levels.

Previous wording

The decrease in our effective tax rate in the first six months of 2025 compared to the same year ago period was due to changes in our projected income generated from our international businesses.

Current wording

The decrease in our effective tax rate in the first nine months of 2025 to 22.1% from 23.4%in the year ago period was primarily due to the mix of earnings between the United States and our international subsidiaries.

Previous wording

Our principal sources of liquidity are our income from operations, as well as access to the borrowing capacity under our ABL Facility. We believe that we have sufficient liquidity to support our ongoing operations and to re-invest in our business to drive future growth. As of June 30, 2025, we maintained cash and cash equivalents of $2.8 million and had $45.7 million of availability under our ABL Facility. Our primary ongoing operating cash flow requirements are for inventory purchases and other working capital needs, capital expenditures and payments on our credit facilities.

Current wording

Our principal sources of liquidity are our income from operations, as well as access to the borrowing capacity under our ABL Facility. We believe that we have sufficient liquidity to support our ongoing operations and to re-invest in our business to drive future growth. As of September 30, 2025, we maintained cash and cash equivalents of $3.3 million and had $40.1 million of availability under our ABL Facility. Our primary ongoing operating cash flow requirements are for inventory purchases and other working capital needs, capital expenditures and payments on our credit facilities.

Previous wording

In addition to our ABL Facility with outstanding borrowings of $103.6 million as of June 30, 2025, we also have a Term Facility with outstanding borrowings of $30.9 million as of June 30, 2025. Our ABL Facility and Term Facility require us to maintain a minimum fixed charge coverage ratio, as defined in the ABL Agreement. Additionally, the ABL Facility and Term Facility contain restrictions on the amount of dividend payments and the amount of share repurchases of common stock. As of June 30, 2025, we were in compliance with such covenants and restrictions under the ABL Facility and Term Facility. We may utilize portions of our excess cash to prepay certain amounts of long-term debt prior to maturity.

Current wording

In addition to our ABL Facility with outstanding borrowings of $112.1 million as of September 30, 2025, we also have a Term Facility with outstanding borrowings of $28.9 million as of September 30, 2025. Our ABL Facility and Term Facility require us to maintain a minimum fixed charge coverage ratio, as defined in the ABL Agreement. Additionally, the ABL Facility and Term Facility contain restrictions on the amount of dividend payments and the amount of share repurchases of common stock. As of September 30, 2025, we were in compliance with such covenants and restrictions under the ABL Facility and Term Facility. We may utilize portions of our excess cash to prepay certain amounts of long-term debt prior to maturity.

Previous wording

*Operating Activities.*Net cash provided by operating activities for thesix months ended June 30, 2025 and 2024 was $2.0 million and $23.9 million, respectively. Adjusting for noncash items, net income provided a cash in-flow of $16.3 million and $10.5 million for thesix months ended June 30, 2025 and 2024, respectively. The net change in working capital and other assets and liabilities resulted in cash used by operating activities of $14.2 million for thesix months ended June 30, 2025, compared to an increase in cash provided by operating activities of $13.4 million for thesix months ended June 30, 2024.

Current wording

*Operating Activities.*Net cash used in operating activities for thenine months ended September 30, 2025 was $1.3 million and cash provided by operating activities for the nine months ended September 30,2024 was $28.4 million. Adjusting for noncash items, net income provided a cash in-flow of $27.4 million and $20.0 million for thenine months ended September 30, 2025 and 2024, respectively. The net change in working capital and other assets and liabilities resulted in cash used by operating activities of $28.7 million for thenine months ended September 30, 2025, compared to an increase in cash provided by operating activities of $8.3 million for thenine months ended September 30, 2024.

Previous wording

An increase in inventory resulted in a use of cash of $20.1 million and $5.8 million for the six months ended June 30, 2025 and 2024, respectively. The increase in cash used to purchase inventory was a result of the additional tariffs imposed during 2025 as well as increased purchases in order to meet estimated demand in the second half of the year.

Current wording

An increase in inventory resulted in a use of cash of $26.9 million and $2.6 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in cash used to purchase inventory was a result of the additional tariffs imposed during 2025 as well as increased purchases in order to meet estimated demand for the fourth quarter of 2025.

Previous wording

A decrease in accounts receivable resulted in a source of cash of $6.1 million and $13.1 million for the six months ended June 30, 2025 and 2024, respectively. The change in cash provided by accounts receivable was due to an increase in sales for the second quarter of 2025 compared to the prior year period.

Current wording

An increase in accounts receivable resulted in a use of cash of $10.2 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively. The change in cash used in accounts receivable was due to an increase in sales in the third quarter of 2025 over the prior year end when compared to the third quarter of 2024.

Previous wording

Investing Activities. Net cash used in investing activities for thesix months ended June 30, 2025 and 2024 was $3.9 million and $0.4 million, respectively. We invested $3.9 million and $2.1 million in capital expenditures for our manufacturing operations and information technology during the six months ended June 30, 2025 and 2024, respectively. The use of cash for the six months ended June 30, 2024 was offset by proceeds from the sale of the Servus brand, totaling $1.7 million.

Current wording

Investing Activities. Net cash used in investing activities for thenine months ended September 30, 2025 and 2024 was $5.7 million and $1.5 million, respectively. We invested $5.7 million and $3.2 million in capital expenditures for our manufacturing operations and information technology during the nine months ended September 30, 2025 and 2024, respectively. The use of cash for the nine months ended September 30, 2024 was offset by proceeds from the sale of the Servus brand, totaling $1.7 million.

Previous wording

Financing Activities. Net cash provided by financing activities for thesix months ended June 30, 2025 was$0.9 million compared to $23.8 million in net cash used in financing activities for the six months ended June 30, 2024. The current year net source of cash primarily related to proceeds from our revolving facility offset by payments on our term loan and dividend payments. The net use of cash for the six months ended June 30, 2024 primarily related to payments on our revolving facility and term loan.

Current wording

Financing Activities. Net cash provided by financing activities for thenine months ended September 30, 2025 was$6.6 million compared to $27.7 million in net cash used in financing activities for the nine months ended September 30, 2024. The current year net source of cash primarily related to proceeds from our revolving credit facility offset by payments on our term loan and dividend payments. The net use of cash for the nine months ended September 30, 2024 primarily related to payments on our revolving credit facility and term loan offset by proceeds from our revolving credit facility and term loan.

Previous wording

This report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding our and management’s intent, belief, and expectations, such as statements concerning our future profitability and our operating and growth strategy. Words such as “believe,” “anticipate,” “expect,” “will,” “may,” “should,” “intend,” “plan,” “estimate,” “predict,” “potential,” “continue,” “likely,” “would,” “could” and similar expressions are intended to identify forward-looking statements. Investors are cautioned that forward-looking statements involve risk and uncertainties including, without limitations, dependence on sales forecasts, changes in consumer demand, seasonality, impact of weather, competition, reliance on suppliers, risks inherent to international trade, changing retail trends, the loss or disruption of our manufacturing and distribution operations, cybersecurity breaches or disruption of our digital systems, fluctuations in foreign currency exchange rates, economic changes, as well as other factors set forth under the caption “Item 1A, Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (filed March 17, 2025) and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (filed May 8, 2025), and other factors detailed from time to time in our filings with the Securities and Exchange Commission. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate. Therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. We assume no obligation to update any forward-looking statements.

Current wording

This report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding our and management’s intent, belief, and expectations, such as statements concerning our future profitability and our operating and growth strategy. Words such as “believe,” “anticipate,” “expect,” “will,” “may,” “should,” “intend,” “plan,” “estimate,” “predict,” “potential,” “continue,” “likely,” “would,” “could” and similar expressions are intended to identify forward-looking statements. Investors are cautioned that forward-looking statements involve risk and uncertainties including, without limitations, dependence on sales forecasts, changes in consumer demand, seasonality, impact of weather, competition, reliance on suppliers, risks inherent to international trade, increases or changes in duties and tariffs in countries of import and export, changing retail trends, the loss or disruption of our manufacturing and distribution operations, cybersecurity breaches or disruption of our digital systems, fluctuations in foreign currency exchange rates, economic changes, as well as other factors set forth under the caption “Item 1A, Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (filed March 17, 2025) and our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2025 (filed May 8, 2025) and June 30, 2025 (filed August 7, 2025), and other factors detailed from time to time in our filings with the Securities and Exchange Commission. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate. Therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. We assume no obligation to update any forward-looking statements.