AVIAT NETWORKS, INC.

Previous wording

Aviat is a global supplier of microwave networking and access networking solutions, backed by an extensive suite of professional services and support. Aviat sells radios, routers, software and services integral to the functioning of data transport networks. Aviat has more than 3,000 customers and significant relationships with global service providers and private network operators. Aviat’s North America manufacturing base consists of a combination of contract manufacturing and assembly and testing operated in Austin, Texas by Aviat. Additionally, Aviat utilizes a contract manufacturer based in Asia for much of its international equipment demand. Aviat’s technology is underpinned by more than 400 patents. Aviat competes on the basis of Total Cost of Ownership (“TCO”), microwave radio expertise and solutions for mission critical communications.

Current wording

Aviat is a global supplier of microwave networking and access networking solutions, backed by an extensive suite of professional services and support. Aviat sells radios, routers, software and services integral to the functioning of data transport networks. Aviat has more than 3,000 customers and significant relationships with global service providers and private network operators. Aviat’s North America manufacturing base consists of a combination of contract manufacturing and assembly and testing operated in Austin, Texas by Aviat. Additionally, Aviat utilizes a contract manufacturer based in Asia for much of its international equipment demand. Aviat’s technology is underpinned by more than 300 patents. Aviat competes on the basis of Total Cost of Ownership (“TCO”), microwave radio expertise and solutions for mission critical communications.

Previous wording

On July 2, 2024, the Company acquired 4RF Limited (“4RF”), a New Zealand company, Aviat purchased all of the issued and outstanding shares of 4RF in an all-cash transaction for $18.2 million, net of $1.2 million cash acquired. 4F is a leading provider of industrial wireless access solutions, including narrowband point-to-point/multi-point radios and Private LTE and 5G routers. The acquisition of 4RF allows Aviat to expand its product offering for the global industrial wireless access markets including Private LTE/5G. See Note 12. Acquisitions of the Notes to the consolidated financial statements in this Annual Report on Form 10-K (the “Notes”) for further information.

Current wording

On July 2, 2024, the Company acquired 4RF Limited (“4RF”), a New Zealand company, Aviat purchased all of the issued and outstanding shares of 4RF in an all-cash transaction for $18.2 million, net of $1.2 million cash acquired. 4RF is a leading provider of industrial wireless access solutions, including narrowband point-to-point/multi-point radios and Private LTE and 5G routers. The acquisition of 4RF allows Aviat to expand its product offering for the global industrial wireless access markets including Private LTE/5G. See Note 12. Acquisitions of the Notes to the consolidated financial statements in this Annual Report on Form 10-K (the “Notes”) for further information.

Previous wording

Prior to the acquisition date, NEC was a leader in wireless backhaul networks with an extensive installed base of their Pasolink series products. The completion of the NEC Transaction increases the scale of Aviat, enhances the Company’s product portfolio with a greater capability to innovate, and creates a more diversified business. Refer to Note 12. Acquisitions of the Notes to the consolidated financial statements in this Annual Report on Form 10-K for further information.

Current wording

Prior to the acquisition date, NEC was a leader in wireless backhaul networks with an extensive installed base of their Pasolink series products. The completion of the NEC Transaction increases the scale of Aviat, enhances the Company’s product portfolio with a greater capability to innovate, and creates a more diversified business. The results of operations of the NEC Transaction have been included in the consolidated financial statements since the date of acquisition.

Previous wording

The fair value of the consideration transferred at the closing of the NEC Transaction was comprised of (i) cash of $32.2 million, and (ii) the issuance of 736,750 shares or $22.3 million of Company common stock. Aggregate consideration transferred at closing was approximately $54.5 million, which is subject to certain post-closing adjustments. In fiscal 2025, the Company transferred consideration of $18.6 million to settle the post-closing working capital adjustment. The Company funded the cash portion of the NEC Transaction with Term Loan borrowings under its Credit Facility (as defined below). Refer to Note 7. Credit Facility and Debt of the Notes for further information.

Current wording

The fair value of the consideration transferred at the closing of the NEC Transaction was comprised of (i) cash of $32.2 million, and (ii) the issuance of 736,750 shares or $22.3 million of common stock of the Company. The fair value of the shares issued was determined based on the closing market price of the Company’s common stock on the acquisition date. Aggregate consideration transferred at closing was approximately $54.5 million, which was subject to certain post-closing adjustments. The Company funded the cash portion of the consideration with Term Loan borrowings under its Credit Facility. Refer to Note 7. Credit Facility and Debt of the Notes for further information.

Previous wording

The market for mobile backhaul continued to be the Company’s primary addressable market segment globally in fiscal 2025. In North America, the Company supported 5G and long-term evolution (“LTE”) deployments of its mobile operator customers, public safety network deployments for state and local governments, and private network implementations for utilities and other customers. In international markets, the Company’s business continued to rely on a combination of customers increasing their capacity to handle subscriber growth and the ongoing build-out of some large LTE and 5G deployments. Aviat’s position continues to be to support its customers for 5G and LTE readiness and ensure that its technology roadmap is well aligned with evolving market requirements. Aviat’s strength in turnkey and after-sale support services is a differentiating factor that wins business for the Company and enables it to expand its business with existing customers. Additionally, Aviat operates an e-commerce on-line platform, Aviat Store, that provides low-cost services, a simple experience, and fast delivery to mobile operators and private network customers. In 2025, new U.S. tariffs on foreign imports were proposed, and in certain cases implemented. In response, Aviat implemented mitigation strategies by optimizing its sourcing and operations to minimize the effects and took pricing actions to offset the impact of these tariffs. However, as disclosed in the “Risk Factors” section in Item 1A of this Annual Report on Form 10-K, a number of factors could prevent the Company from achieving its objectives, including ongoing pricing pressures attributable to competition and macroeconomic conditions in the geographic markets that it serves.

Current wording

The market for mobile backhaul continued to be the Company’s primary addressable market segment globally in fiscal 2026. In North America, the Company supported 5G and long-term evolution (“LTE”) deployments of its mobile operator customers, public safety network deployments for state and local governments, and private network implementations for utilities and other customers. In international markets, the Company’s business continued to rely on a combination of customers increasing their capacity to handle subscriber growth and the ongoing build-out of some large LTE and 5G deployments. Aviat’s position continues to be to support its customers for 5G and LTE readiness and ensure that its technology roadmap is well aligned with evolving market requirements. Aviat’s strength in turnkey and after-sale support services is a differentiating factor that wins business for the Company and enables it to expand its business with existing customers. Additionally, Aviat operates an e-commerce on-line platform, Aviat Store, that provides low-cost services, a simple experience, and fast delivery to mobile operators and private network customers. Recently, U.S. tariffs on certain imported goods have increased costs within parts of the supply chain. Aviat has implemented mitigation measures, including sourcing and operational initiatives and pricing actions, to reduce the impact of these tariffs on its business and results of operations. However, as disclosed in the “Risk Factors” section in Item 1A of this Annual Report on Form 10-K, a number of factors could prevent the Company from achieving its objectives, including ongoing pricing pressures attributable to competition and macroeconomic conditions in the geographic markets that it serves.

Previous wording

Revenue in Africa and the Middle East increased by $0.5 million in fiscal 2025 primarily due to increased demand of managed services and software offerings on a larger install base, which increased 36% and 42%, respectively, partially offset by a 12% decrease in equipment sales.

Current wording

Revenue in Africa and the Middle East increased by $8.5 million in fiscal 2026 primarily due to increases in demand for products and software offerings, which increased 22% and 29%, respectively.

Previous wording

Revenue in Europe increased by $7.1 million in fiscal 2025 primarily due to increased equipment sales to mobile operators in the region.

Current wording

Revenue in Europe increased by $10.3 million in fiscal 2026 primarily due to increased equipment sales of 48%.

Previous wording

Gross margin for fiscal 2025 decreased by $(5.3) million, while gross margin as a percentage of revenue reduced by 3.4 percentage points due to higher volumes on lower margin sales.

Current wording

Gross margin for fiscal 2026 decreased by $1.1 million, while gross margin as a percentage of revenue reduced by 0.6 percentage points due to lower service revenue, offset by sales volumes and the mix of product and service offerings.

Previous wording

Research and development expenses decreased by $(0.7) million in fiscal 2025 primarily due to synergies achieved leading to cost optimization from the NEC Transaction.

Current wording

Research and development expenses decreased by $7.4 million in fiscal 2026 primarily due to cost management initiatives.

Previous wording

During fiscal 2025 restructuring charges were $3.6 million, a decrease of $(0.3) million compared to fiscal 2024. Fiscal 2025 restructuring activities were primarily associated with reductions in workforce in certain of the Company’s operations to optimize skill sets and align cost structure. The prior year comparison period includes restructuring charges primarily associated with the NEC Transaction.

Current wording

During fiscal 2026, restructuring charges were $2.1 million, a decrease of $1.5 million compared to fiscal 2025. During fiscal 2026, the Company’s Board of Directors approved restructuring plans, primarily associated with reductions in workforce in certain of the Company’s operations to optimize skill sets and align cost structure. In addition, restructuring charges also consisted of a $0.3 million early lease termination charge during the year.

Previous wording

Interest expense, net increased by $3.7 million in fiscal 2025 primarily due to interest expense incurred on incremental Term Loan borrowings.

Current wording

Interest expense, net increased by $1.6 million in fiscal 2026 primarily due to interest expense incurred on incremental Term Loan borrowings.

Previous wording

Other expense, net increased by $0.8 million in fiscal 2025 primarily as a result of foreign exchange rate movement.

Current wording

Other expense, net decreased by $2.6 million in fiscal 2026 primarily as a result of foreign exchange rate movement.

Previous wording

Tax expense was $2.2 million in fiscal 2025 and $6.1 million in fiscal 2024. Tax expense in fiscal 2025 was primarily attributable to tax expense for the U.S. entity, profitable foreign subsidiaries, and withholding taxes, partially offset by a Canada valuation allowance release. Tax expense in fiscal 2024 was primarily attributable to tax expense related to U.S. and profitable foreign subsidiaries, partially offset by Canada valuation allowance release.

Current wording

Tax expense was $10.7 million in fiscal 2026 and $2.2 million in fiscal 2025. The Company’s tax expense for fiscal 2026 was primarily due to profitable U.S. and foreign subsidiaries, with no offsetting benefit recorded on losses in jurisdictions for which no benefit can be realized. The Company’s tax expense for fiscal 2025 was primarily due to profitable U.S. and foreign subsidiaries, partially offset by a partial Canada valuation allowance release.

Previous wording

As of June 27, 2025, the Company’s total cash and cash equivalents were $59.7 million. Approximately $22.2 million, or 37% was held in the United States. The remaining balance of $37.5 million, or 63% was held outside the United States. Of the amount of cash and cash equivalents held by the Company’s foreign subsidiaries on June 27, 2025, $37.1 million was held in jurisdictions where its undistributed earnings are indefinitely reinvested, and if repatriated, would be subject to foreign withholding taxes.

Current wording

As of July 3, 2026, the Company’s total cash and cash equivalents were $72.8 million. Approximately $22.6 million, or 31% was held in the United States. The remaining balance of $50.3 million, or 69% was held outside the United States. Of the amount of cash and cash equivalents held by the Company’s foreign subsidiaries on July 3, 2026, $50.2 million was held in jurisdictions where its undistributed earnings are indefinitely reinvested, and if repatriated, would be subject to foreign withholding taxes.

Previous wording

Operating cash flows is presented as net income adjusted for certain non-cash items and changes in operating assets and liabilities. Net cash provided by operating activities was $5.7 million for fiscal 2025, compared with $30.5 million in the prior year. The $(24.8) million decrease is primarily attributable to decreased net income prior to non-cash adjustments and overall decreases in the net changes in operating assets and liabilities compared to the prior year. Net changes in operating assets and liabilities resulted in $(16.8) million of cash used in operating activities for fiscal 2025, compared to $(2.5) million in fiscal 2024. The $(14.3) million increase compared to the prior year is primarily attributable to increases in inventory as well as an increase in accounts receivable which is primarily driven by increased sales in the year and timing of receiving payments. These impacts were partially offset by an increase in accounts payable due to purchasing of increased inventory as well as the timing of payments as compared to the prior year.

Current wording

Operating cash flows is presented as net income adjusted for certain non-cash items and changes in operating assets and liabilities. Net cash provided by operating activities was $13.6 million for fiscal 2026, compared with $5.7 million in the prior year. The $7.8 million increase is primarily attributable to improved working capital performance. Net changes in operating assets and liabilities resulted in $11.9 million of cash used in operating activities for fiscal 2026, compared to $16.8 million in fiscal 2025. The $4.9 million decrease compared to the prior year is primarily attributable to a smaller increase in accounts receivable, lower inventory purchases and a decrease in unbilled receivables. These impacts were partially offset by a larger decrease in accounts payable due to the timing of inventory purchases and vendor payments compared to the prior year.

Previous wording

Net cash used in investing activities was $28.5 million for fiscal 2025, compared to $35.2 million in the prior year. The $6.7 million decrease is driven by prior year cash paid for the NEC Transaction of $32.2 million compared to current year net cash paid for the 4RF acquisition of $18.2 million. This is partially offset by an increase in purchases of property, plant, and equipment of $10.3 million compared to the prior year.

Current wording

Net cash used in investing activities was $7.3 million for fiscal 2026 compared to $28.5 million in the prior year. The $21.2 million decrease is driven by the absence of acquisition payments associated with the NEC Transaction in the current year, whereas the previous year had $18.2 million of such payments.

Previous wording

Financing cash flows consist primarily of borrowings and repayments under the Company’s Credit Facility and proceeds from the exercise of employee stock options. Net cash provided by financing activities was $18.7 million for fiscal 2025, compared with $48.7 million in the prior year. The $(30.0) million decrease is primarily due to payment of deferred consideration of $18.6 million related to the NEC acquisition and repayment of $50.6 million in the current year on Term Loan borrowings compared to $1.3 million in the prior year. The decrease is partially offset by increased net borrowings of $15.0 million on the Revolver (as defined below) in the current year.

Current wording

Financing cash flows consist primarily of borrowings and repayments under the Company’s Credit Facility and proceeds from the exercise of employee stock options. Net cash provided by financing activities was $6.3 million for fiscal 2026, compared with $18.7 million in the prior year. The $12.3 million decrease is primarily due to lower net borrowings under both the Revolver and Term Loan facilities, partially offset by the absence of $18.6 million of deferred consideration payments related to acquisitions that occurred in the prior year.

Previous wording

As of June 27, 2025, the Company’s sources of liquidity consisted of $59.7 million in cash and cash equivalents, $51.3 million of available credit under its Credit Facility, and future collections of receivables from customers. The Company regularly requires letters of credit from certain customers, and, from time to time, these letters of credit are discounted without recourse shortly after shipment occurs in order to meet immediate liquidity requirements and to reduce its credit and sovereign risk. Historically, the Company’s primary sources of liquidity have been cash flows from operations and credit facilities.

Current wording

As of July 3, 2026, the Company’s sources of liquidity consisted of $72.8 million in cash and cash equivalents, $84.2 million of available credit under its Credit Facility, and future collections of receivables from customers. The Company regularly requires letters of credit from certain customers, and, from time to time, these letters of credit are discounted without recourse shortly after shipment occurs in order to meet immediate liquidity requirements and to reduce its credit and sovereign risk. Historically, the Company’s primary sources of liquidity have been cash flows from operations and credit facilities.

Previous wording

The Company entered into a Secured Credit Facility Agreement (the “Credit Facility”), dated May 9, 2023, amended as of November 22, 2023 and October 18, 2024, with Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing lender and Wells Fargo Securities LLC, Citigroup Global Markets Inc., and Regions Capital Markets as lenders. The Credit Facility provides for a $75.0 million revolving credit facility (the “Revolver”) and a $75.0 million Term Loan Facility (the “Term Loan”) with a maturity date of October 18, 2029. The $75.0 million Revolver can be borrowed with a $10.0 million sub-limit for letters of credit, and a $10.0 million swingline loan sub-limit. On August 28, 2025, the Company entered into an amendment under the Credit Facility to increase the Term Loan and Revolver commitments by $20 million for each instrument. Refer to Note 7. Credit Facility and Debt and Note 16. Subsequent Events of the Notes for further information.

Current wording

The Company entered into a Secured Credit Facility Agreement (the “Credit Facility”), dated May 9, 2023, amended as of November 22, 2023 and October 18, 2024, with Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing lender and Wells Fargo Securities LLC, Citigroup Global Markets Inc., and Regions Capital Markets as lenders. On August 28, 2025, the Company entered into an amendment under the Credit Facility to increase the Term Loan and Revolver commitments by $20.0 million for each instrument. The Credit Facility provides for a $95.0 million revolving credit facility (the “Revolver”) and a $95.0 million Term Loan Facility (the “Term Loan”) with a maturity date of October 18, 2029. The $95.0 million Revolver can be borrowed with a $20.0 million sub-limit for letters of credit, and a $10.0 million swingline loan sub-limit. The full Revolver balance will be paid on maturity. Refer to Note 7. Credit Facility and Debt and Note 16. Subsequent Events of the Notes for further information.

Previous wording

As of June 27, 2025, the available credit under the Revolver was $51.3 million, reflecting the available limit of $60.0 million less outstanding letters of credit of $8.7 million. The Company borrowed $95.0 million and repaid $80.0 million against the Revolver in fiscal 2025. The Company borrowed $75.0 million and repaid $50.6 million against the Term Loan in fiscal 2025. As of June 27, 2025, the Company had $73.1 million outstanding under its Term Loan and $15.0 million borrowings under its Revolver.

Current wording

As of July 3, 2026, the available credit under the Revolver was $76.8 million, reflecting the available limit of $95.0 million less outstanding borrowings of $10.0 million and outstanding letters of credit of $8.2 million. The Company borrowed $100.0 million and repaid $105.0 million against the Revolver in fiscal 2026. The Company borrowed $20.0 million and repaid $5.5 million against the Term Loan in fiscal 2026. As of July 3, 2026, the Company had $87.6 million outstanding under its Term Loan and $10.0 million borrowings under its Revolver.

Previous wording

Outstanding borrowings under the Credit Facility bear interest at either: (a) Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus the applicable margin; or (b) the Base Rate plus the applicable margin. The pricing levels for interest rate margins are determined based on the Consolidated Total Leverage Ratio as determined and adjusted quarterly. As of June 27, 2025, the applicable margin on Adjusted Term SOFR and Base Rate borrowings was 2.8% and 1.8%, respectively. The effective rate of interest on the outstanding Term Loan borrowings as of June 27, 2025, was 6.9%.

Current wording

Outstanding borrowings under the Credit Facility bear interest at either: (a) Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus the applicable margin; or (b) the Base Rate plus the applicable margin. The pricing levels for interest rate margins are determined based on the Consolidated Total Leverage Ratio as determined and adjusted quarterly. As of July 3, 2026, the applicable margin on Adjusted Term SOFR and Base Rate borrowings was 2.75% and 1.75%, respectively. The effective rate of interest on the outstanding Term Loan borrowings as of July 3, 2026 and June 27, 2025, was 6.5% and 6.9%, respectively.

Previous wording

The Credit Facility requires the Company and its subsidiaries to maintain a fixed charge coverage ratio to be greater than 1.25 to 1.00 as of the last day of any fiscal quarter of the Company. The Credit Facility also requires that the Company maintain a maximum leverage ratio of 3.00 times Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), with a step-down to 2.75 times EBITDA after four full quarters, and 2.50 times EBITDA after eight full quarters. The Credit Facility contains customary affirmative and negative covenants, including, among others, covenants limiting the ability of the Company and its subsidiaries to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates, in each case subject to customary exceptions. As of June 27, 2025, the Company was in compliance with all financial covenants contained in the Credit Facility.

Current wording

The Credit Facility requires the Company and its subsidiaries to maintain a fixed charge coverage ratio to be greater than 1.25 to 1.00 as of the last day of any fiscal quarter of the Company. The Credit Facility also requires that the Company maintain a maximum leverage ratio of 3.00 times earnings before interest, taxes, depreciation, and amortization (“EBITDA”), with a step-down to 2.75 times EBITDA after four full quarters, and 2.50 times EBITDA after eight full quarters. The current maximum leverage ratio requirement is 2.75 times EBITDA. The Credit Facility contains customary affirmative and negative covenants, including, among others, covenants limiting the ability of the Company and its subsidiaries to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates, in each case subject to customary exceptions. As of July 3, 2026, the Company was in compliance with all financial covenants contained in the Credit Facility.

Previous wording

The Company had liabilities for restructuring activities totaling $1.8 million as of June 27, 2025, which was classified as current and are expected to be paid in cash within the next 12 months. The Company expects to fund the future payments with available cash and cash provided by operations. Refer to Note 8. Restructuring Activities of the Notes for further information.

Current wording

The Company had liabilities for restructuring activities totaling $1.2 million as of July 3, 2026, which was classified as current and are expected to be paid in cash within the next 12 months. The Company expects to fund the future payments with available cash and cash provided by operations. Refer to Note 8. Restructuring Activities of the Notes for further information.

Previous wording

Net foreign exchange (gains) losses recorded in the consolidated statements of operations during fiscal 2025, 2024 and 2023 were $(0.8) million, $(0.3) million and $1.0 million, respectively.

Current wording

Net foreign exchange losses (gains) recorded in the consolidated statements of operations during fiscal 2026, 2025 and 2024 were $0.9 million, $(0.8) million and $(0.3) million, respectively.

Previous wording

Certain of the Company’s international business are transacted in non-U.S. dollar (“USD”) currencies. From time to time, the Company utilizes foreign currency hedging instruments to minimize the currency risk of non-USD transactions. The impact of translating the assets and liabilities of foreign operations to USD is included as a component of stockholders’ equity. As of June 27, 2025, and June 28, 2024, the cumulative translation adjustment decreased stockholders’ equity by $18.8 million and $19.3 million, respectively.

Current wording

Certain of the Company’s international business are transacted in non-U.S. dollar (“USD”) currencies. From time to time, the Company utilizes foreign currency hedging instruments to minimize the currency risk of non-USD transactions. The impact of translating the assets and liabilities of foreign operations to USD is included as a component of stockholders’ equity. As of July 3, 2026, and June 27, 2025, the cumulative translation adjustment decreased stockholders’ equity by $20.4 million and $18.8 million, respectively.

Previous wording

The Company had $59.7 million in total cash and cash equivalents as of June 27, 2025. Cash equivalents totaled $6.4 million as of June 27, 2025, and were comprised of money market funds and bank certificates of deposit. Cash equivalents have been recorded at fair value. Fair value is measured using inputs that fall into a three-level hierarchy that prioritizes the inputs used to measure fair value based on observability of such inputs. Refer to Note 6. Fair Value Measurements of Assets and Liabilities of the Notes for further information.

Current wording

The Company had $72.8 million in total cash and cash equivalents as of July 3, 2026. Cash equivalents totaled $2.9 million as of July 3, 2026, and were comprised of money market funds and bank certificates of deposit. Cash equivalents have been recorded at fair value. Fair value is measured using inputs that fall into a three-level hierarchy that prioritizes the inputs used to measure fair value based on observability of such inputs. Refer to Note 6. Fair Value Measurements of Assets and Liabilities of the Notes for further information.

Previous wording

The Company’s cash equivalents earn interest at fixed rates; therefore, changes in interest rates will not generate a gain or loss on these investments unless they are sold prior to maturity. The weighted-average days to maturity for cash equivalents held as of June 27, 2025, was approximately 27 days, and these investments had an average yield of approximately 5.0% per annum. A 10% change in interest rates on the Company’s cash equivalents is not expected to have a material impact on its financial position, results of operations, or cash flows.

Current wording

The Company’s cash equivalents earn interest at fixed rates; therefore, changes in interest rates will not generate a gain or loss on these investments unless they are sold prior to maturity. The weighted-average days to maturity for cash equivalents held as of July 3, 2026, was approximately 110 days, and these investments had an average yield of approximately 2.9% per annum. A 10% change in interest rates on the Company’s cash equivalents is not expected to have a material impact on its financial position, results of operations, or cash flows.

Previous wording

As of June 27, 2025, the Company had $73.1 million outstanding under its Term Loan and $15.0 million outstanding under its Revolver. Refer to Note 7 Credit Facility and Debt of the Notes for further information.

Current wording

As of July 3, 2026, the Company had $87.6 million outstanding under its Term Loan and $10.0 million borrowings under its Revolver. Refer to Note 7 Credit Facility and Debt of the Notes for further information.

Previous wording

The Company’s borrowings under the current Credit Facility bear interest at either: (a) Adjusted Term SOFR plus the applicable margin; or (b) the Base Rate plus the applicable margin. The pricing levels for interest rate margins are determined based on the Consolidated Total Leverage Ratio as determined and adjusted quarterly. As of June 27, 2025, the applicable margin on Adjusted Term SOFR and Base Rate borrowings was 2.8% and 1.8%, respectively. The effective rate of interest on the Company’s outstanding Term Loan borrowings as of June 27, 2025, was 6.9%.

Current wording

The Company’s borrowings under the Credit Facility bear interest at either: (a) SOFR plus the applicable margin; or (b) the Base Rate plus the applicable margin. The pricing levels for interest rate margins are determined based on the Consolidated Total Leverage Ratio as determined and adjusted quarterly. As of July 3, 2026, the applicable margin on Adjusted Term SOFR and Base Rate borrowings was 2.75% and 1.75%, respectively. The effective rate of interest on the outstanding Term Loan borrowings as of July 3, 2026 and June 27, 2025, was 6.5% and 6.9%, respectively.

Previous wording

A 10% change in interest rates is estimated to have a $0.5 million impact on annual interest expense on the Company’s outstanding long-term debt as of June 27, 2025.

Current wording

A 10% change in interest rates is estimated to have a $0.6 million impact on annual interest expense on the Company’s outstanding long-term debt as of July 3, 2026.