Holley Inc.

Previous wording

Central to our business and growth strategy is a commitment to innovation. We have a history of developing innovative products, including new additions to existing product families, expansions of product lines, accessory offerings, and ventures into entirely new categories. We believe this strategic approach allows us to continually adapt to evolving consumer needs. Furthermore, strategic acquisitions have played a significant role in our evolution. These acquisitions have enabled us to expand our brand portfolio, enter new product categories and consumer segments, enhance DTC scale and connection, increase market share in existing product categories, and realize valuable revenue and cost synergies. While we anticipate continued organic growth, we intend to continue evaluating opportunities for strategic acquisitions that align with our current business, expanding our reach within the target market.

Current wording

Central to our business and growth strategy is a commitment to innovation. We have a history of developing innovative products, including new additions to existing product families, expansions of product lines, accessory offerings, and ventures into entirely new categories. We believe this strategic approach allows us to continually adapt to evolving consumer needs. Furthermore, strategic acquisitions have played a significant role in our evolution. These acquisitions have enabled us to expand our brand portfolio, enter new product categories and consumer segments, enhance direct-to-consumer scale and connection, increase market share in existing product categories, and realize valuable revenue and cost synergies. While we anticipate continued organic growth, we intend to continue evaluating opportunities for strategic acquisitions that align with our current business, expanding our reach within the target market.

Previous wording

Our business and results of operations, financial condition, and liquidity are impacted by broad economic conditions including inflation, labor shortages, disruption of the supply chain, and tariffs, as well as by geopolitical events, including military conflicts (including the conflict in Ukraine, the conflict in the Middle East, and the possible expansion of such conflicts). Our operations have been adversely impacted, and may continue to be adversely impacted, by inflationary pressures primarily related to transportation, labor and component costs. In response to the global supply chain volatility and inflationary impacts, we have attempted to minimize potential adverse impacts on our business with cost savings initiatives, price increases to customers, and by increasing inventory levels of certain products and working closely with our suppliers and customers to minimize disruptions in delivering products to customers. Our profitability has been, and may continue to be, adversely affected by constrained consumer demand and a shift in sales mix to lower-margin products, which is offset by our cost cutting and operating efficiency gains. Should the ongoing macroeconomic conditions not improve, or worsen, or if our attempts to mitigate the impact on our supply chain, operations and costs is not successful, our business, results of operations and financial condition may be adversely affected.

Current wording

Our business and results of operations, financial condition, and liquidity are impacted by broad economic conditions including inflation, labor shortages, disruption of the supply chain, and tariffs, as well as by geopolitical events, including military conflicts (including the conflict in Ukraine, the conflict in the Middle East, and the possible expansion of such conflicts). Our operations have been adversely impacted, and may continue to be adversely impacted, by inflationary pressures primarily related to transportation, labor and component costs. In response to the global supply chain volatility and inflationary impacts, we have attempted to minimize potential adverse impacts on our business with cost savings initiatives, price increases to customers, and by increasing inventory levels of certain products and working closely with our suppliers and customers to minimize disruptions in delivering products to customers. Our profitability has been, and may continue to be, adversely affected by constrained consumer demand and a shift in sales mix to lower-margin products, which is offset by our cost cutting and operating efficiency gains. Should the ongoing macroeconomic conditions not improve, or worsen, or if our attempts to mitigate the impact on our supply chain, operations and costs are not successful, our business, results of operations and financial condition may be adversely affected.

Previous wording

The United States government has increased tariffs on certain goods imported from certain countries and regions, including China, Canada, Mexico, and the European Union. In response, some foreign governments implemented retaliatory measures. These developments introduced new complexities to global supply chains. As discussed in our quarterly report on Form 10-Q for the quarter ended March 29, 2026, we believe Holley's business model and sourcing strategies have positioned us to manage these challenges effectively and we have proactively developed and implemented plans to mitigate their impact.

Current wording

The United States government has increased tariffs on certain goods imported from certain countries and regions, including China, Canada, Mexico, and the European Union. In response, some foreign governments implemented retaliatory measures. These developments introduced new complexities to global supply chains. We believe Holley's business model and sourcing strategies position us to manage these challenges effectively and we continue to proactively develop and implement plans to mitigate the impact of the changing tariff landscape.

Previous wording

On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). During the 26-week period ended June 28, 2026, we received approximately $11,057 as a refund on such tariffs, of which $1,719 was recorded as a reduction of inventory, $8,863 was recorded as other income and $475 was recorded as interest income. We continue to monitor and evaluate these developments in order to analyze their impact on our business and identify possible actions to minimize adverse effects. The ultimate availability, timing and amount of any other potential refunds on such tariffs, and the extent and duration of these tariffs, as well as their broader impact on macroeconomic conditions and our business, remain uncertain and will depend on a variety of factors outside of our control. Nevertheless, we remain committed to optimizing our operations, managing costs and leveraging our diversified supply chain to minimize the impact of tariffs on our results of operations and financial condition.

Current wording

On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). During the 39-week period ended September 27, 2026, we received approximately $11.1 as a refund on such tariffs, of which $1.7 was recorded as a reduction of inventory, $8.9 was recorded as other income and $0.5 was recorded as interest income. We continue to monitor and evaluate these developments in order to analyze their impact on our business and identify possible actions to minimize adverse effects. The ultimate availability, timing and amount of any other potential refunds on such tariffs, and the extent and duration of these tariffs, as well as their broader impact on macroeconomic conditions and our business, remain uncertain and will depend on a variety of factors outside of our control. Nevertheless, we remain committed to optimizing our operations, managing costs and leveraging our diversified supply chain to minimize the impact of tariffs on our results of operations and financial condition.

Previous wording

As part of our strategic plan, we have launched a portfolio rebalance initiative through which we expect to exit non-core, low profit businesses while reinvesting in targeted mergers and acquisitions that align with our strategic priorities. During the 26-week period ended June 28, 2026, we sold three brands, ADS, Speartech, and Drake Brands, comprised of Drake Classic, Scott Drake, Drake Muscle Cars, Drake Automotive Group, Drake Auto Group, and Brothers Trucks brands. We continue to evaluate additional divestiture and acquisition opportunities that meet our strategic and financial criteria. See Note 2, "Acquisition and Divestitures" in the Notes to the condensed consolidated financial statements included in this Quarterly Report for more details.

Current wording

As part of our strategic plan, we have launched a portfolio rebalancing initiative through which we expect to exit non-core, low profit businesses while reinvesting in targeted mergers and acquisitions that align with our strategic priorities. During the 39-week period ended September 27, 2026, we sold three brands, ADS, Speartech, and Drake Brands, comprised of Drake Classic, Scott Drake, Drake Muscle Cars, Drake Automotive Group, Drake Auto Group, and Brothers Trucks brands. We continue to evaluate additional divestiture and acquisition opportunities that meet our strategic and financial criteria. See Note 2, "Acquisition and Divestitures" in the Notes to the condensed consolidated financial statements included in this Quarterly Report for more details.

Previous wording

Selling, general, and administrative costs consist of payroll and related personnel expenses, IT and office services, office rent expense and professional services. In addition, self-insurance, advertising, outgoing shipping costs, pre-production and start-up costs are also included within selling, general, and administrative. We have incurred additional expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations and other professional services.

Current wording

Selling, general, and administrative costs consist of payroll and related personnel expenses, IT and office services, office rent expense and professional services. In addition, self-insurance, advertising, outgoing shipping costs, pre-production and start-up costs are also included within selling, general, and administrative costs. We have incurred additional expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations and other professional services.

Previous wording

Loss on sale of assets relates to the loss incurred related to the sales of ADS, Speartech, and Drake Brands.

Current wording

Loss on sale of assets relates to the loss incurred related to the sales of ADS, Speartech, and Drake Brands which includes the brands Drake Classic, Scott Drake, Drake Muscle Cars, Drake Automotive Group, Drake Auto Group and Brothers Trucks.

Previous wording

Interest expense consists of interest due on the indebtedness under our credit facilities. Interest is based on SOFR or the base rate, at the Company's election, plus the applicable margin rate. As of June 28, 2026, $527.7 million was outstanding under our Credit Agreement.

Current wording

Interest expense consists of interest due on the indebtedness under our credit facilities. Interest is based on SOFR or the base rate, at the Company's election, plus the applicable margin rate. As of September 27, 2026, $501.1 million was outstanding under our Credit Agreement.

Previous wording

Change in fair value of warrant liability represents remeasurement gains or losses on outstanding warrant liabilities, driven primarily by changes in our stock price and related valuation inputs.

Current wording

Change in fair value of warrant liability reflects remeasurement gains or losses on outstanding warrant liabilities, driven primarily by changes in our stock price and related valuation inputs before the warrants expired unexercised on July 16, 2026.

Previous wording

Net sales for the 13-week period ended June 28, 2026 increased $5.3 million, or 3.2%, to $172.0 million, as compared to $166.7 million for the 13-week period ended June 29, 2025. The increase was primarily driven by $4.7 million of incremental net sales from the HRX acquisition and improved price realization of approximately $10.0 million, partially offset by lower sales volume of approximately $9.4 million compared to the prior year period.

Current wording

Net sales for the 13-week period ended September 27, 2026 increased $3.2 million, or 2.3%, to $141.6 million, as compared to $138.4 million for the 13-week period ended September 28, 2025. The increase was primarily driven by improved price realization of approximately $5.0 million and incremental net sales from the HRX acquisition of approximately $2.4 million, partially offset by lower sales volume of approximately $4.2 million compared to the prior year period primarily the result of our portfolio rebalancing efforts.

Previous wording

Cost of goods sold for the 13-week period ended June 28, 2026 increased $4.4 million, or 4.5%, to$101.5 million, as compared to$97.1 million for the 13-week period ended June 29, 2025. The increase in cost of goods sold in the second quarter of 2026, a period in which product sales increased 3.2%, was driven by higher tariff-related costs, additional costs associated with the recent HRX acquisition, and a one-time adjustment related to the prior-year capitalization of tariff costs.

Current wording

Cost of goods sold for the 13-week period ended September 27, 2026 increased $0.8 million, or 1.0%, to$79.3 million, as compared to$78.5 million for the 13-week period ended September 28, 2025. The increase in cost of goods sold in the third quarter of 2026, a period in which product sales increased 2.3%, was driven by a combination of overall inflation on input costs and the addition of the recent HRX acquisition offset by our footprint optimization strategy as a result of the portfolio rebalancing initiative.

Previous wording

Gross profit for the 13-week period ended June 28, 2026 increased$1.0 million, or 1.4%, to$70.5 million, as compared to$69.6 million for the 13-week period ended June 29, 2025. Gross margin for the 13-week period ended June 28, 2026 was 41.0% as compared to a gross margin of 41.7% for the 13-week period ended June 29, 2025. Gross profit margin decreased due to higher tariff-related costs, a one-time adjustment related to the prior-year capitalization of tariff costs, and fixed cost deleverage on lower net sales volume, partially offset by pricing actions and improvements in operating efficiency.

Current wording

Gross profit for the 13-week period ended September 27, 2026 increased$2.4 million, or 4.0%, to$62.3 million, as compared to$59.8 million for the 13-week period ended September 28, 2025. Gross margin for the 13-week period ended September 27, 2026 was 44.0% as compared to a gross margin of 43.2% for the 13-week period ended September 28, 2025. Gross profit margin increased due to increased productivity across operations and the divestitures of low margin businesses as part of the portfolio rebalancing initiative.

Previous wording

Selling, general and administrative costs for the 13-week period ended June 28, 2026 increased$7.4 million, or 22.7%, to$40.4 million, as compared to$33.0 million for the 13-week period ended June 29, 2025. Selling, general and administrative costs expressed as a percentage of sales increased to 23.5% for the 13-week period ended June 28, 2026 compared to 19.8% for the 13-week period ended June 29, 2025. The increase in selling, general and administrative costs was due to increased legal fees related to the securities class action and increased insurance expenses, salaries and wages, and consulting fees related to our ongoing portfolio rebalancing initiative.

Current wording

Selling, general and administrative costs for the 13-week period ended September 27, 2026 decreased$0.6 million, or 1.8%, to$32.9 million, as compared to$33.5 million for the 13-week period ended September 28, 2025. Selling, general and administrative costs expressed as a percentage of sales decreased to 23.2% for the 13-week period ended September 27, 2026 compared to 24.2% for the 13-week period ended September 28, 2025. The decrease in selling, general and administrative costs was due to decreased legal fees, salaries and wages, and consulting fees due to our strategic initiatives as part of our portfolio rebalancing initiative partially offset by increased freight expenses and administrative costs due to our recent acquisition.

Previous wording

Research and development costs for the 13-week period ended June 28, 2026 decreased to $3.7 million as compared to $5.1 million for the 13-week period ended June 29, 2025, primarily due to a decrease in salaries and consulting fees.

Current wording

Research and development costs for the 13-week period ended September 27, 2026 decreased to $3.6 million as compared to $4.7 million for the 13-week period ended September 28, 2025, primarily due to a decrease in salaries, consulting fees and supplies.

Previous wording

Restructuring costs for the 13-week period ended June 28, 2026 increased by $0.4 million to $0.8 million, as compared to $0.4 million for the 13-week period ended June 29, 2025, reflecting restructuring and integration activities associated with our implementation of resource allocation efforts in support of our portfolio rebalance initiative.

Current wording

Restructuring costs for the 13-week period ended September 27, 2026 increased by $1.4 million to $2.8 million, as compared to $1.4 million for the 13-week period ended September 28, 2025, reflecting restructuring and integration activities associated with our implementation of resource allocation efforts in support of our portfolio rebalance initiative.

Previous wording

During the 26-week period ended June 28, 2026, the Company recognized a loss on the sale of assets of $28.3 million related to the sales of the ADS, Speartech, and Drake Brands.

Current wording

During the 13-week period ended September 27, 2026, the Company recognized a loss on the sale of assets of $0.3 million related to the sale of Drake Brands.

Previous wording

As a result of factors described above, operating income for the 13-week period ended June 28, 2026 decreased$24.7 million, or 89.9%, to$2.8 million, as compared to$27.5 million for the 13-week period ended June 29, 2025.

Current wording

As a result of factors described above, operating income for the 13-week period ended September 27, 2026 increased$3.7 million, or 23.3%, to$19.6 million, as compared to$15.9 million for the 13-week period ended September 28, 2025.

Previous wording

For the 13-week periods ended June 28, 2026 and June 29, 2025, we recognized a gain of$1.3 million and a gain of$0.2 million, respectively. The earn-out liability reflects the fair value of the unvested Earn-Out Shares resulting from the Business Combination.

Current wording

For the 13-week periods ended September 27, 2026 and September 28, 2025, we recognized a gain of$44 thousand and a loss of$1.1 million, respectively. The earn-out liability reflects the fair value of the unvested Earn-Out Shares resulting from the Business Combination.

Previous wording

Interest expense for the 13-week period ended June 28, 2026 decreased$5.2 million, or 38.7%, to$8.2 million, as compared to$13.4 million for the 13-week period ended June 29, 2025. The decrease was primarily attributable to changes in the fair value of the interest rate collar, which decreased interest expense by $1.9 million during the 13-week period ended June 28, 2026, compared to an increase to interest expense of $1.4 million the 13-week period ended June 29, 2025. Additionally, the interest expense decrease resulted from a decrease in our outstanding debt balance.

Current wording

Interest expense for the 13-week period ended September 27, 2026 decreased$1.6 million, or 14.6%, to$9.6 million, as compared to$11.3 million for the 13-week period ended September 28, 2025. The decrease was primarily attributable to the favorable impact of the interest rate collar, which resulted in recognized interest income of $2.5 million during the 13-week period ended September 27, 2026, compared to interest expense of $1.0 million for the 13-week period ended September 28, 2025. Additionally, the interest expense decrease resulted from a decrease in our outstanding debt balance.

Previous wording

As a result of factors described above, we recognized$3.6 million ofloss before income taxes and$14.4 million of income before income taxes for the 13-week periods ended June 28, 2026 and June 29, 2025, respectively.

Current wording

As a result of factors described above, we recognized$10.4 million ofincome before income taxes and$0.5 million of income before income taxes for the 13-week periods ended September 27, 2026 and September 28, 2025, respectively.

Previous wording

Income tax expense for the 26-week period ended June 28, 2026 was$0.7 million, as compared to income tax expense of$4.6 million for the 26-week period ended June 29, 2025. Our effective tax rate for the 26-week period ended June 28, 2026 was 12.3%. The difference between the effective tax rate for the 26-week period ended June 28, 2026 and the federal statutory rate was due to permanent differences related to changes in fair value of the warrant and earn-out liabilities recognized during the period, state taxes, the impact of foreign taxes in higher tax rate jurisdictions. The effective tax rate for the 26-week period ended June 29, 2025 was 25.1%. The difference between the effective tax rate and the federal statutory rate in 2025 was due to federal research and development tax credits, the impact of foreign taxes in higher tax rate jurisdictions and excess tax deficiencies from share based compensation recognized during the period.

Current wording

Income tax expense for the 13-week period ended September 27, 2026 was $2.6 million, as compared to income tax expense of $1.3 million for the 13-week period ended September 28, 2025. Our effective tax rate for the 13-week period ended September 27, 2026 was 25.1%. The difference between the effective tax rate for the 13-week period ended September 27, 2026 and the federal statutory rate in 2026 was due to permanent differences related to changes in fair value of warrant and earn-out liabilities recognized during the period, the benefit from the foreign derived intangible income (FDII) deduction, federal research and development tax credits, state taxes, and the impact of foreign taxes in higher tax rate jurisdictions. The effective tax rate for the 13-week period ended September 28, 2025 was 274.1%. The difference between the effective tax rate for the 13-week period ended September 28, 2025 and the federal statutory rate in 2025 was due to permanent differences related to changes in fair value of the warrant and earn-out liabilities recognized during the period, state taxes, and the impact of foreign taxes in higher tax rate jurisdictions. These items had a greater impact on the effective tax rate for the 13-week period ended September 28, 2025 due to the low pre-tax net income result.

Previous wording

As a result of factors described above, we recognized net loss of $2.4 million and net income of$10.9 million for the 13-week periods ended June 28, 2026 and June 29, 2025, respectively. Additionally, we recognized total comprehensive loss of $4.3 million for the 13-week period ended June 28, 2026, as compared to total comprehensive income of $12.1 million for the 13-week period ended June 29, 2025. Comprehensive income and loss includes the effect of foreign currency translation adjustments.

Current wording

As a result of factors described above, we recognized net income of $7.8 million and net loss of$0.8 million for the 13-week periods ended September 27, 2026 and September 28, 2025, respectively. Additionally, we recognized total comprehensive income of $8.1 million for the 13-week period ended September 27, 2026, as compared to total comprehensive loss of $0.4 million for the 13-week period ended September 28, 2025. Comprehensive income includes the effect of foreign currency translation adjustments.

Previous wording

The table below presents Holley’s results of operations for the 26-week periods ended June 28, 2026 and June 29, 2025 (dollars in thousands):

Current wording

The table below presents Holley’s results of operations for the 39-week periods ended September 27, 2026 and September 28, 2025 (dollars in thousands):

Previous wording

Net sales for the 26-week period ended June 28, 2026 decreased $0.4 million, or 0.1%, to $319.3 million, as compared to $319.7 million for the 26-week period ended June 29, 2025. Lower sales volume resulted in a decrease of approximately $18.6 million, offset partially by HRX acquisition net sales and improved price realization totalling approximately $18.2 million compared to the prior year period.

Current wording

Net sales for the 39-week period ended September 27, 2026 increased $2.8 million, or 0.6%, to $460.9 million, as compared to $458.1 million for the 39-week period ended September 28, 2025. Lower sales volume resulted in a decrease of approximately $20.4 million as a result of our portfolio rebalancing efforts which included the divestitures of non-core brands during the 39-week period ended September 27, 2026, offset partially by HRX acquisition net sales and improved price realization totaling approximately $23.2 million compared to the prior year period.

Previous wording

Cost of goods sold for the 26-week period ended June 28, 2026 increased$2.0 million, or 1.1%, to$188.1 million, as compared to$186.1 million for the 26-week period ended June 29, 2025. The increase in cost of goods sold in 2026, a period in which product sales decreased 0.1%, was primarily due to additional costs associated with the recent HRX acquisition and a one-time adjustment related to the prior-year capitalization of tariff costs.

Current wording

Cost of goods sold for the 39-week period ended September 27, 2026 increased$2.8 million, or 1.0%, to$267.4 million, as compared to$264.6 million for the 39-week period ended September 28, 2025. The increase in cost of goods sold in 2026, a period in which product sales increased 0.6%, was primarily due to additional costs associated with the recent HRX acquisition and a one-time adjustment related to the prior-year capitalization of tariff costs.

Previous wording

Selling, general and administrative costs for the 26-week period ended June 28, 2026 increased$6.1 million, or 8.9%, to$75.8 million, as compared to$69.7 million for the 26-week period ended June 29, 2025. Selling, general and administrative costs expressed as a percentage of sales increased to 23.7% for the 26-week period ended June 28, 2026 compared to 21.8% for the 26-week period ended June 29, 2025. The increase in selling, general and administrative costs was mainly driven by increases in salaries and equity compensation, related to an increase in administrative costs due to our recent acquisition and portfolio rebalance initiative, and an increase to insurance costs, related to the timing of renewal.

Current wording

Selling, general and administrative costs for the 39-week period ended September 27, 2026 increased$5.6 million, or 5.4%, to$108.7 million, as compared to$103.1 million for the 39-week period ended September 28, 2025. Selling, general and administrative costs expressed as a percentage of sales increased to 23.6% for the 39-week period ended September 27, 2026 compared to 22.5% for the 39-week period ended September 28, 2025. The increase in selling, general and administrative costs was mainly driven by an increase in administrative costs due to our recent acquisition as well as legal expenses related to the class action lawsuit partially offset by actions taken related to the portfolio rebalance initiative.

Previous wording

Research and development costs for the 26-week period ended June 28, 2026 decreased to $7.7 million as compared to $9.2 million for the 26-week period ended June 29, 2025, primarily due to a decrease in salaries and consulting fees.

Current wording

Research and development costs for the 39-week period ended September 27, 2026 decreased to $11.3 million as compared to $13.9 million for the 39-week period ended September 28, 2025, primarily due to a decrease in salaries and consulting fees.

Previous wording

Restructuring costs for the 26-week period ended June 28, 2026 increased by$0.9 million to$1.7 million, as compared to$0.8 million for the 26-week period ended June 29, 2025, reflecting restructuring and integration activities associated with our implementation of resource allocation efforts in support of portfolio rebalancing.

Current wording

Restructuring costs for the 39-week period ended September 27, 2026 increased by$2.3 million to$4.5 million, as compared to$2.2 million for the 39-week period ended September 28, 2025, reflecting restructuring and integration activities associated with our implementation of resource allocation efforts in support of portfolio rebalancing.

Previous wording

During the 13-week period ended June 28, 2026, the Company recognized a loss on the sale of assets of $28.3 million related to the sales of the ADS, Speartech, and Drake Brands.

Current wording

During the 39-week period ended September 27, 2026, the Company recognized a loss on the sale of assets of $28.6 million related to the sales of the ADS, Speartech, and Drake Brands.

Previous wording

As a result of factors described above, operating income for the 26-week period ended June 28, 2026 decreased$26.6 million, or 56.7%, to$20.3 million, as compared to$46.9 million for the 26-week period ended June 29, 2025.

Current wording

As a result of factors described above, operating income for the 39-week period ended September 27, 2026 decreased$22.9 million, or 36.5%, to$39.8 million, as compared to$62.7 million for the 39-week period ended September 28, 2025.

Previous wording

For the 26-week periods ended June 28, 2026 and June 29, 2025, we recognized a gain of$1.8 million and a gain of$0.4 million, respectively. The earn-out liability reflects the fair value of the unvested Earn-Out Shares resulting from the Business Combination.

Current wording

For the 39-week periods ended September 27, 2026 and September 28, 2025, we recognized a gain of$1.8 million and a loss of$0.7 million, respectively. The earn-out liability reflects the fair value of the unvested Earn-Out Shares resulting from the Business Combination.

Previous wording

Interest expense for the 26-week period ended June 28, 2026 decreased$11.0 million, or 37.7%, to$18.1 million, as compared to $29.1 million for the 26-week period ended June 29, 2025. The decrease was primarily attributable to lower interest expense on outstanding debt due to a decrease in our debt balance as well as the favorable impact of the interest rate collar, which resulted in recognized interest income of $2.9 million and interest expense of $5.2 million related to the interest rate collar for 26-week periods ended June 28, 2026 and June 29, 2025, respectively.

Current wording

Interest expense for the 39-week period ended September 27, 2026 decreased$12.6 million, or 31.3%, to$27.7 million, as compared to $40.3 million for the 39-week period ended September 28, 2025. The decrease was primarily attributable to lower interest expense on outstanding debt due to a decrease in our debt balance as well as the favorable impact of the interest rate collar, which resulted in recognized interest income of $5.4 million and interest expense of $4.3 million related to the interest rate collar for 39-week periods ended September 27, 2026 and September 28, 2025, respectively.

Previous wording

As a result of factors described above, we recognized$5.5 million and$18.3 million of income before income taxes for the 26-week periods ended June 28, 2026 and June 29, 2025, respectively.

Current wording

As a result of factors described above, we recognized$16.0 million and$18.7 million of income before income taxes for the 39-week periods ended September 27, 2026 and September 28, 2025, respectively.

Previous wording

Income tax benefit for the 13-week period ended June 28, 2026 was $1.2 million, as compared to income tax expense of $3.5 million for the 13-week period ended June 29, 2025. Our effective tax rate for the 13-week period ended June 28, 2026 was 33.1%. The difference between the effective tax rate for the 13-week period ended June 28, 2026 and the federal statutory rate in 2026 was due to permanent differences related to changes in fair value of warrant and earn-out liabilities recognized during the period, the benefit from the foreign derived intangible income (FDII) deduction, federal research and development tax credits, state taxes, and the impact of foreign taxes in higher tax rate jurisdictions. The effective tax rate for the 13-week period ended June 29, 2025 was 24.4%. The difference between the effective tax rate for the 13-week period ended June 29, 2025 and the federal statutory rate in 2025 was due to federal research and development tax credits, the impact of foreign taxes in higher rate jurisdictions, and excess tax deficiencies from share based compensation recognized during the period.

Current wording

Income tax expense for the 39-week period ended September 27, 2026 was$3.3 million, as compared to income tax expense of$5.8 million for the 39-week period ended September 28, 2025. Our effective tax rate for the 39-week period ended September 27, 2026 was 20.7%. The difference between the effective tax rate for the 39-week period ended September 27, 2026 and the federal statutory rate was due to permanent differences related to changes in fair value of warrant and earn-out liabilities recognized during the period, the benefit from the foreign derived intangible income (FDII) deduction, federal research and development tax credits, state taxes, and the impact of foreign taxes in higher tax rate jurisdictions. The effective tax rate for the 39-week period ended September 28, 2025 was 31.2%. The difference between the effective tax rate and the federal statutory rate in 2025 was due to permanent differences related to changes in fair value of warrant and earn-out liabilities recognized during the period, state taxes, the impact of foreign taxes in higher tax rate jurisdictions, and excess tax deficiencies from share based compensation recognized during the period.

Previous wording

As a result of factors described above, we recognized net income of$4.8 million and$13.7 million for the 26-week periods ended June 28, 2026 and June 29, 2025, respectively. Additionally, we recognized total comprehensive income of$2.0 million for the 26-week period ended June 28, 2026, as compared to total comprehensive income of$14.6 million for the 26-week period ended June 29, 2025. Comprehensive income includes the effect of foreign currency translation adjustments.

Current wording

As a result of factors described above, we recognized net income of$12.7 million and$12.9 million for the 39-week periods ended September 27, 2026 and September 28, 2025, respectively. Additionally, we recognized total comprehensive income of$10.1 million for the 39-week period ended September 27, 2026, as compared to total comprehensive income of$14.2 million for the 39-week period ended September 28, 2025. Comprehensive income includes the effect of foreign currency translation adjustments.

Previous wording

The following unaudited table presents the reconciliation of net income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the 13-week and 26-week periods ended June 28, 2026 and June 29, 2025 (dollars in thousands):

Current wording

The following unaudited table presents the reconciliation of net income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 (dollars in thousands):

Previous wording

The following unaudited tables present the reconciliation of net income and net income per diluted share, the most directly comparable GAAP measures, to Adjusted Net Income and Adjusted Diluted EPS for the 13-week and 26-week periods ended June 28, 2026 and June 29, 2025 (dollars in thousands):

Current wording

The following unaudited tables present the reconciliation of net income and net income per diluted share, the most directly comparable GAAP measures, to Adjusted Net Income and Adjusted Diluted EPS for the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 (dollars in thousands):

Previous wording

We define Free Cash Flow as net cash provided by operating activities minus cash payments for capital expenditures, net of dispositions. Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations.

Current wording

We define Free Cash Flow as net cash provided by operating activities less cash payments for capital expenditures, plus proceeds from disposals of property and equipment. Free Cash Flow excludes proceeds from business divestitures. Management believes providing Free Cash Flow is useful for investors to understand our performance and results of cash generation after making capital investments required to support ongoing business operations.

Previous wording

The following unaudited table presents the reconciliation of net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the 13-week and 26-week periods ended June 28, 2026 and June 29, 2025 (dollars in thousands):

Current wording

The following unaudited table presents the reconciliation of net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 (dollars in thousands):

Previous wording

On June 28, 2026, the Company had cash of $69.0 million and availability of $97.5 million under its $100.0 million senior secured revolving credit facility. As of June 28, 2026, the Company had $2.5 million in letters of credit outstanding under the revolving credit facility. On July 13, 2026, the Company repaid $15.0 million on the outstanding principal of its first lien term loan facility.

Current wording

On September 27, 2026, the Company had cash of $49.9 million and availability of $97.5 million under its $100.0 million senior secured revolving credit facility. As of September 27, 2026, the Company had $2.5 million in letters of credit outstanding under the revolving credit facility.