QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: Market risk relates to the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.
−Removed: Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying financial instruments are traded.
−Removed: Sensitivity analysis measures the impact of hypothetical changes in interest rates, foreign exchange rates and other market rates or prices on the profitability of market-sensitive financial instruments and our results of operations.
−Removed: While we are exposed to market risk from foreign currency and exchange rate fluctuation, we do not have significant exposures to interest rate changes or commodity prices, nor do we expect to have significant exposure to interest rate changes or commodity prices in the foreseeable future.
−Removed: Foreign Currency Risk
−Removed: The majority of our net sales, expenses and capital purchases were transacted in U.S.
−Removed: However, exposure with respect to foreign exchange rate fluctuation existed due to our operations in Canada, the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, The Dominican Republic, Greece, New Zealand, Chile, Poland, and Dubai albeit each individually and in the aggregate to a small extent.
−Removed: As of December 31, 2024, our largest international operations were in Canada.
+Added: The Company is exposed to market risk from foreign currency and exchange rate fluctuation and interest rate changes.
+Added: The majority of the Company’s net sales, expenses and capital purchases were transacted in U.S.
+Added: However, exposure with respect to foreign exchange rate fluctuation existed due to the Company’s operations throughout the Americas, Europe, the Middle East, Asia-Pacific, and South Africa.
Based on fiscal 2025 performance, a hypothetical appreciation or decline in the value of the Canadian dollar in relation to the U.S.
dollar of 10% would have an immaterial impact on operating income.
−Removed: The individual impacts to the operating income of hypothetical currency fluctuations in the Canadian dollar have been calculated in isolation from any potential responses to address such exchange rate changes in our other foreign markets.
−Removed: Our exposures to foreign currency risk related to our other operations in our other international locations were immaterial and have been excluded from this analysis.
−Removed: Our investments in the net assets of our international operations were also subject to currency risk.
−Removed: As of December 31, 2024, the impacts of translations of foreign-denominated net assets of our international operations were immaterial to the Company’s consolidated financial statements.
−Removed: The translation impacts related to the net assets of our international operations are recorded within accumulated other comprehensive income.
−Removed: Historically, we have not hedged this exposure, although we may elect to do so in future periods.
+Added: The individual impacts to the operating income of hypothetical currency fluctuations in the Canadian dollar have been calculated in isolation from any potential responses to address such exchange rate changes in the Company’s other foreign markets.
+Added: The Company’s exposures to foreign currency risk related to its other operations in international locations were immaterial and have been excluded from this analysis.
+Added: The Company’s investments in the net assets of the Company’s international operations were also subject to foreign exchange rate risk.
+Added: As of December 31, 2025, the impacts of translations of foreign-denominated net assets of the Company’s international operations were immaterial to the Company’s consolidated financial statements.
+Added: The translation impacts related to the net assets of the Company’s international operations are recorded within accumulated other comprehensive income.
+Added: Historically, the Company has not hedged this exposure, although it may elect to do so in future periods.
+Added: The Company is also exposed to market risk for changes in interest rates on its financial instruments, which relate to the Company’s cash equivalents primarily invested in money market funds.
+Added: The Company does not use derivative financial instruments in its investing activities.
+Added: The Company places cash and cash equivalents with various major financial institutions.
+Added: The Company protects its invested principal funds by limiting default risk, market risk and reinvestment risk.
+Added: The Company mitigates against such risks by utilizing investment vehicles restricted to short-term U.S.
+Added: government and agency obligations, thereby prioritizing capital preservation and immediate liquidity.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.