What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 85 added, 76 removed, 95 unchanged (63% of the section changed)

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Forward-Looking Statements

Certain statements made in this report, as well as oral statements made by the Company from time to time, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Certain statements made in this report, as well as oral statements made by Cognex Corporation ("Cognex", "we", "us", "our", or the "Company") from time to time, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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These statements are based on our current estimates and expectations as to prospective events and circumstances, which may or may not be in our control and as to which there can be no firm assurances given.

These forward-looking statements, which include statements regarding business and market trends, future financial performance, financial targets, milestones and related timing expectations, the impacts of our strategic portfolio review, the impact of tariffs, customer demand and order rates and timing of related revenue, future product or revenue mix, research and development activities, sales and marketing activities including our salesforce transformation, new product offerings, innovation and product development activities, customer acceptance of our products, commercial partnerships, capital expenditures, cost management activities including expected annualized operating expense reductions, investments, liquidity, dividends and stock repurchases, strategic and growth plans and opportunities, acquisitions, and estimated tax benefits and expenses, changes in tax legislation, and other tax matters, involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected.

These forward-looking statements, which include statements regarding business and market trends, future financial performance, financial targets, milestones and related timing expectations, the impacts of our strategic portfolio review, the impact of tariffs, customer demand and order rates and timing of related revenue, future product or revenue mix, research and development activities, sales and marketing activities including our salesforce transformation, new product offerings, innovation and product development activities, customer acceptance of our products, commercial partnerships, capital expenditures, cost management activities including expected annualized operating expense reductions, investments, liquidity, dividends and stock repurchases, strategic and growth plans and opportunities, financial and operating models, acquisitions, and estimated tax benefits and expenses, changes in tax legislation, and other tax matters, involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected.

Such risks and uncertainties include:

(1) the technological obsolescence of current products and the inability to develop new products;

(1) the technological obsolescence of current products, the inability to develop new products, and the inability to achieve growth through expanding and adjacent markets;

(2) the impact of competitive pressures;

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(7) uncertainty surrounding our future capital needs;

(8) the inability to effectively scale our operations and salesforce to support a significantly expanded customer base;

(8) the inability to effectively scale our operations and salesforce to support a significantly expanded customer base in an increasing number of geographies;

(9) information security breaches and other cybersecurity threats;

(10) the failure to comply with laws or regulations relating to data privacy, data protection, AI, or other automated technologies;

(10) the failure to comply with laws or regulations relating to data privacy, data protection, artificial intelligence, or other automated technologies;

(11) the inability to protect our proprietary technology and intellectual property;

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We are a global technology leader in industrial machine vision systems that seek to improve efficiency and help solve critical manufacturing and distribution challenges, providing support across a diverse set of industrial end markets.

In addition to revenue derived from the sale of machine vision products, the Company also generates revenue by providing maintenance and support, consulting, and training services to its customers;

however, service revenue accounted for less than 10% of total

revenue for all periods presented.

In addition to revenue derived from the

sale of machine vision products, the Company also generates revenue by providing maintenance and support, consulting, and training services to its customers;

however, service revenue accounted for less than 10% of total revenue for all periods presented.

Machine vision is used in a variety of end markets where technology is widely recognized as an important component of automated production, distribution, and quality assurance.

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This results in a broad base of potential customers across a variety of end markets, including logistics, consumer electronics, automotive, packaging, and semiconductor.

Revenue for the first quarter of 2026 totaled $268,437,000, representing an increase of 24% over the first quarter of 2025 due to broad-based strength across our major end markets, as well as the favorable impact of foreign currency exchange rate changes on revenue.

Gross margin as a percentage of revenue was 71% for the first quarter of 2026 as compared to 67% for the first quarter of 2025 due to a more favorable end-market mix and increased cost efficiencies from higher sales volume.

Operating expenses for the first quarter of 2026 increased 11% from the first quarter of 2025.

The impact of higher incentive compensation accruals due to stronger business performance, the unfavorable impact of foreign exchange rates on expenses, and higher reorganization charges incurred to further drive efficiencies across the organization were partially offset by savings from continued cost management activities.

Operating income increased to 22% of revenue for the first quarter of 2026 as compared to 12% of revenue for the first quarter of 2025 due to operating leverage achieved from revenue growth.

Net income increased to 19% of revenue, or $0.31 per diluted share, for the first quarter of 2026, as compared to 11% of revenue, or $0.14 per diluted share, for the first quarter of 2025.

Revenue for the second quarter of 2026 totaled $291,263,000, representing an increase of 17% over the second quarter of 2025 due to broad-based strength across most major end markets, as well as the favorable impact of foreign currency exchange rate changes on revenue.

Gross margin as a percentage of revenue was 71% for the second quarter of 2026 as compared to 67% for the second quarter of 2025 due to a more favorable end-market mix and higher sales volume, which improved fixed-cost absorption.

Operating expenses for the second quarter of 2026 decreased 3% from the second quarter of 2025.

The decrease was primarily due to savings from continued cost management activities and lower stock-based compensation expense, partially offset by the unfavorable impact of foreign exchange rates on expenses.

Operating income increased to 29% of revenue for the second quarter of 2026 as compared to 17% of revenue for the second quarter of 2025 due to operating leverage achieved from revenue growth.

Net income increased to 25% of revenue, or $0.43 per diluted share, for the second quarter of 2026, as compared to 16% of revenue, or $0.24 per diluted share, for the second quarter of 2025.

Results of Operations

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GAAP") and should be considered in addition to, and not a substitute for, results prepared in accordance with U.S.

Revenue increased by $52,401,000, or 24%, for the three-month period in 2026 as compared to the same period in 2025.

Changes in foreign currency exchange rates resulted in a higher level of reported revenue in 2026 as compared to 2025.

Excluding the impact of foreign currency exchange rate changes, revenue increased by 21% over the prior year.

The increase was due to broad-based demand across our major end markets, including revenue growth across our consumer electronics customer base, higher revenue from semiconductor and packaging customers, and continued growth with large logistics customers.

The following table sets forth our disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands) for the three-month periods ended April 5, 2026 and March 30, 2025.

Three-months Ended

April 5, 2026 March 30, 2025 $ Change % Change

Revenue increased by $42,170,000, or 17%, for the three-month period in 2026 and increased $94,571,000, or 20%, for the six-month period in 2026 as compared to the same periods in 2025.

Changes in foreign currency exchange rates resulted in a higher level of reported revenue in the 2026 periods as compared to the corresponding periods in 2025.

Excluding the impact of foreign currency exchange rate changes, revenue increased by 16% for the three-month period in 2026 and 18% for the six-month period in 2026 as compared to the same periods in 2025.

The increases were due to broad-based demand across most major end markets.

The following table sets forth our disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands) for the three-month and six-month periods ended July 5, 2026 and June 29, 2025, respectively.

Three-months Ended Six-months Ended

July 5, 2026 June 29, 2025 $ Change % Change July 5, 2026 June 29, 2025 $ Change % Change

(unaudited) (unaudited)

Americas $ 117,037 $ 92,137 $ 24,900 27 % $ 238,338 $ 191,867 $ 46,471 24 %

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Changes in revenue from a geographic perspective were as follows:

• Revenue from customers based in the Americas increased by 22% for the three-month period in 2026 as compared to the same period in 2025 due to stronger performance across our major end markets.

• Revenue from customers based in Europe increased by 36% for the three-month period in 2026 as compared to the same period in 2025.

Changes in foreign currency exchange rates resulted in a higher level of reported revenue in the first quarter of 2026 as compared to the same period in 2025, as the U.S.

Dollar was weaker on average versus the Euro and sales denominated in Euros were translated into U.S.

Dollars at a higher rate.

Excluding the impact of foreign currency exchange rate changes, revenue from customers based in Europe increased by 23% for the three-month period in 2026 due to stronger performance across our major end markets, with the exception of ongoing softness in the automotive end market.

• Revenue from customers based in Greater China increased by 40% for the three-month period in 2026 as compared to the same period in 2025.

Changes in foreign currency exchange rates resulted in a higher level of reported revenue in 2026, driven by a weaker U.S.

Dollar versus the Chinese Renminbi as compared to the prior year.

Excluding the impact of foreign currency exchange rate changes, revenue from customers based in Greater China increased by 36% for the three-month period in 2026 primarily due to higher revenue from customers in the consumer electronics and semiconductor end markets.

• Revenue from customers based in other countries in Asia increased by 6% for the three-month period in 2026 as compared to the same period in 2025.

Changes in foreign currency exchange rates did not have a material impact on revenue for the three-month period in 2026.

The increase was primarily due to higher revenue from customers in the consumer electronics and semiconductor end markets.

The following table sets forth our gross profit (in thousands) for the three-month periods ended April 5, 2026 and March 30, 2025.

Three-months Ended

April 5, 2026 March 30, 2025 $ Change % Change

• Revenue from customers based in the Americas increased by 27% for the three-month period in 2026 and increased by 24% for the six-month period in 2026 as compared to the same periods in 2025 due to stronger performance across most major end markets.

Revenue from customers based in the Americas also benefitted from consumer electronics customer procurement changes as purchases shifted from entities based in Europe to the Americas.

• Revenue from customers based in Europe decreased by 12% for the three-month period in 2026 and increased by 6% for the six-month period in 2026 as compared to the same periods in 2025.

Excluding the impact of foreign currency exchange rate changes, revenue from customers based in Europe decreased by 15% for the three-month period in 2026 and decreased by 1% for the six-month period in 2026.

The decrease for the three-month period was driven by the consumer electronics customer procurement shift from Europe to the Americas mentioned above, as well as ongoing softness in the automotive end market.

These decreases were largely offset by stronger performance across our other major end markets, including logistics and packaging, for the six-month period.

• Revenue from customers based in Greater China increased by 47% for the three-month period in 2026 and increased by 45% for the six-month period in 2026 as compared to the same periods in 2025.

Excluding the impact of foreign currency exchange rate changes, revenue from customers based in Greater China increased by 42% for the three-month period in 2026 and increased by 40% for the six-month period in 2026 primarily due to higher revenue from customers in the consumer electronics and semiconductor end markets.

• Revenue from customers based in other countries in Asia increased by 9% for the three-month period in 2026 and increased by 11% for the six-month period in 2026 as compared to the same periods in 2025.

Excluding the impact of foreign currency exchange rate changes, revenue from customers based in other countries in Asia increased by 14% for the three-month period in 2026 and increased by 13% for the six-month period in 2026 primarily due to higher revenue from customers in the semiconductor end market.

These increases were partially offset by a decrease in revenue from customers in the packaging end market resulting primarily from the divestiture of the Company's Japan-focused trading business on April 1, 2026 (refer to Note 13 of the Consolidated Financial Statements).

The following table sets forth our gross profit (in thousands) for the three-month and six-month periods ended July 5, 2026 and June 29, 2025, respectively.

Three-months Ended Six-months Ended

July 5, 2026 June 29, 2025 $ Change % Change July 5, 2026 June 29, 2025 $ Change % Change

(unaudited) (unaudited)

Gross profit $ 205,773 $ 167,876 $ 37,897 23 % $ 396,712 $ 312,199 $ 84,513 27 %

Percentage of total revenue 71 % 67 % 71 % 67 %

Gross margin was 71% for the three-month period in 2026 as compared to 67% for the same period in 2025.

The increase was primarily due to more favorable end-market mix and increased cost efficiencies from higher sales volume, slightly offset by the impact of tariffs.

Gross margin was 71% for the three-month and six-month periods in 2026 as compared to 67% for the same periods in 2025.

The increases were primarily due to more favorable end-market mix and higher sales volume, which improved fixed-cost absorption.

Operating Expenses

The following table sets forth our operating expenses (in thousands) for the three-month periods ended April 5, 2026 and March 30, 2025.

Three-months Ended

April 5, 2026 March 30, 2025 $ Change % Change

The following table sets forth our operating expenses (in thousands) for the three-month and six-month periods ended July 5, 2026 and June 29, 2025, respectively.

Three-months Ended Six-months Ended

July 5, 2026 June 29, 2025 $ Change % Change July 5, 2026 June 29, 2025 $ Change % Change

(unaudited) (unaudited)

Research, development, and engineering expenses $ 32,391 $ 33,102 $ (711) (2) % $ 69,416 $ 67,829 $ 1,587 2 %

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Research, Development, and Engineering Expenses

Research, development, and engineering (RD&E) expenses increased by $2,298,000, or 7%, for the three-month period in 2026 as compared to the same period in 2025.

The impact of higher incentive compensation accruals due to stronger business performance and the unfavorable impact of foreign exchange rates were partially offset by savings from continued cost management activities.

RD&E expenses as a percentage of revenue was 14% for the three-month period in 2026 as compared to 16% for the same period in 2025.

Research, development, and engineering ("RD&E") expenses decreased by $711,000, or 2%, for the three-month period in 2026 and increased by $1,587,000, or 2%, for the six-month period in 2026 as compared to the same periods in 2025.

For the three-month period in 2026, the decrease was primarily due to savings from continued cost management activities, partially offset by the unfavorable impact of foreign exchange rates.

For the six-month period in 2026, higher incentive compensation accruals due to stronger business performance and the unfavorable impact of foreign exchange rates offset savings from cost management activities.

RD&E expenses as a percentage of revenue were 11% and 12% for the three-month and six-month periods in 2026 as compared to 13% and 15%, respectively, for the same periods in 2025.

We believe that a continued commitment to RD&E activities is essential to maintain or achieve product leadership with our existing products and to provide innovative new product offerings, as well as to provide engineering support for large customers.

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Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses increased by $10,537,000, or 13%, for the three-month period in 2026 as compared to the same period in 2025.

The impact of higher incentive compensation accruals due to stronger business performance, the unfavorable impact of foreign exchange rates, higher stock-based compensation, and higher reorganization charges incurred to further drive efficiencies across the organization were partially offset by savings from continued cost management activities.

Selling, general, and administrative ("SG&A") expenses decreased by $3,476,000, or 4%, and increased by $7,061,000, or 4%, respectively, for the three-month and six-month periods in 2026 as compared to the same periods in 2025.

For the three-month period, the decrease was primarily due to savings from continued cost management activities and lower stock-based compensation expense, partially offset by the unfavorable impact of foreign exchange rates.

For the six-month period, higher incentive compensation accruals due to stronger business performance, higher reorganization charges incurred to drive efficiencies across the organization, and the unfavorable impact of foreign exchange rates offset savings from cost management activities.

Non-operating Income (Expense)

The following table sets forth our non-operating income (expense) (in thousands) for the three-month periods ended April 5, 2026 and March 30, 2025.

Three-months Ended

April 5, 2026 March 30, 2025 $ Change % Change

The following table sets forth our non-operating income (expense) (in thousands) for the three-month and six-month periods ended July 5, 2026 and June 29, 2025, respectively.

Three-months Ended Six-months Ended

July 5, 2026 June 29, 2025 $ Change % Change July 5, 2026 June 29, 2025 $ Change % Change

(unaudited) (unaudited)

Foreign currency gain (loss) $ (862) $ (1,503) $ 641 (43) % $ (2,207) $ (3,956) $ 1,749 (44) %

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Total non-operating income (expense) $ 3,783 $ 4,629 $ (846) (18) % $ 5,667 $ 6,335 $ (668) (11) %

The Company recorded foreign currency losses of $1,345,000 and $2,453,000 for the three-month periods in 2026 and 2025, respectively.

Foreign currency gains and losses in each period resulted primarily from the revaluation and settlement of assets and liabilities that are denominated in currencies other than the functional currency of the Company, which is the U.S.

The Company recorded foreign currency losses of $862,000 and $2,207,000 for the three-month and six-month periods in 2026, respectively, and losses of $1,503,000 and $3,956,000 for the same periods in 2025, respectively.

Foreign currency losses in each period resulted primarily from the revaluation and settlement of assets and liabilities that are denominated in currencies other than the functional currency of the Company, which is the U.S.

Dollar, or its subsidiaries.

Investment income increased by $846,000, or 21%, for the three-month period in 2026 as compared to the same period in 2025 primarily due to a higher invested balance.

The Company recorded other expense of $1,607,000 for the three-month period in 2026 and other income of $169,000 for the three-month period in 2025.

Other expense for the three-month period in 2026 included a pre-tax loss of $1,539,000 related to the divestiture of the Company's Japan-focused trading business (refer to Note 13 of the Consolidated Financial Statements).

Investment income increased by $1,051,000, or 26%, for the three-month period and increased by $1,897,000, or 24%, for the six-month period in 2026 as compared to the same periods in 2025 primarily due to a higher invested balance.

The Company recorded other expense of $446,000 and $2,053,000 for the three-month and six-month periods in 2026, respectively, and other income of $2,092,000 and $2,261,000 for the same periods in 2025, respectively.

Other expense for the six-month period in 2026 included a pre-tax loss of $1,539,000 related to the divestiture of the Company's Japan-focused trading business (refer to Note 13 of the Consolidated Financial Statements).

Other income for the second quarter of 2025 included a one-time, net Employee Retention Credit of $2,119,000 from the U.S.

Internal Revenue Service to refund payroll taxes paid during the COVID-19 pandemic.

Income Tax Expense

The following table sets forth income tax information (in thousands) for the three-month periods ended April 5, 2026 and March 30, 2025.

Three-months Ended

April 5, 2026 March 30, 2025 $ Change % Change

The following table sets forth income tax information (in thousands) for the three-month and six-month periods ended July 5, 2026 and June 29, 2025, respectively.

Three-months Ended Six-months Ended

July 5, 2026 June 29, 2025 $ Change % Change July 5, 2026 June 29, 2025 $ Change % Change

(unaudited) (unaudited)

Income before income tax expense $ 89,300 $ 48,062 $ 41,238 86 % $ 151,057 $ 75,860 $ 75,197 99 %

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Effective income tax rate 19 % 16 % 18 % 15 %

The Company’s effective tax rate was 16% for the three-month period in 2026 and 15% for the same period in 2025.

The Company recorded net discrete tax benefits of $1,179,000 and $307,000 for the three-month periods in 2026 and 2025, respectively.

Excluding the impact of discrete tax items, the Company's effective tax rate was 18% for the three-month period in 2026 and 16% for the same period in 2025.

The increase was primarily due to a greater portion of Company's pre-tax income being earned in higher tax rate jurisdictions.

The Company’s effective tax rate was 19% and 18% for the three-month and six-month periods in 2026, respectively, and 16% and 15% for the same periods in 2025, respectively.

The Company recorded a net discrete tax expense of $450,000 and a net discrete tax benefit of $729,000 for the three-month and six-month periods in 2026, respectively, compared to net discrete tax benefits of $211,000 and $518,000 for the three-month and six-month periods in 2025, respectively.

Excluding the impact of discrete tax items, the Company's effective tax rate was 18% for the three-month and six-month periods in 2026 and 16% for the same periods in 2025.

The increase was primarily due to a greater portion of the Company's pre-tax income being earned in higher tax rate jurisdictions.

Liquidity and Capital Resources

The Company has historically been able to generate positive cash flow from operations, which has funded its operating activities and other cash requirements and resulted in an accumulated cash and investment balance of $621,942,000 as of April 5, 2026.

The Company has established guidelines relative to credit ratings, diversification, and maturities of its investments to maintain liquidity and safety of its investment portfolio.

Operating Activities

Net cash provided by operating activities totaled $45,093,000 for the three-month period in 2026 as compared to $40,502,000 for the same period in 2025.

The increase in operating cash inflow from the prior year was primarily driven by stronger business performance, partially offset by higher Company bonus payments that are made in the first quarter of each year.

Net cash provided by operating activities totaled $114,246,000 for the six-month period in 2026 as compared to $83,127,000 for the same period in 2025.

The increase in operating cash inflow from the prior year was primarily driven by stronger business performance.

This increase was partially offset by higher working capital requirements associated with revenue growth, primarily higher accounts receivable balances and inventory purchases.

These impacts were partially offset by lower cash tax payments, driven largely by a one-time transition tax payment on unrepatriated foreign earnings made in the second quarter of 2025 that did not recur in 2026.

Investing Activities

Net cash provided by investing activities totaled $791,000 for the three-month period in 2026 as compared to $33,087,000 for the same period in 2025.

The decrease in investing cash inflow from the prior year was due to a higher level of investment maturities during the three-month period in 2025 to provide liquidity for our stock repurchase program.

Investing activities for the three-month period in 2026 included net proceeds of $11,519,000 from the divestiture of the Company's Japan-focused trading business (refer to Note 13 of the Consolidated Financial Statements).

Investing activities also included capital expenditures that totaled $2,757,000 for the three-month period in 2026 as compared to $2,501,000 for the same period in 2025.

Net cash used in investing activities totaled $69,693,000 for the six-month period in 2026 as compared to net cash provided by investing activities of $29,121,000 for the same period in 2025.

The decrease in investing cash inflow from the prior year was due to a higher level of investment maturities during the six-month period in 2025.

Investing activities for the six-month period in 2026 included net proceeds of $11,519,000 from the divestiture of the Company's Japan-focused trading business (refer to Note 13 of the Consolidated Financial Statements).

Investing activities also included capital expenditures that totaled $4,289,000 for the six-month period in 2026 as compared to $4,695,000 for the same period in 2025.

Capital expenditures in each period consisted primarily of investments in business systems, manufacturing test equipment related to new product introductions, and building and leasehold improvements.

Financing Activities

Net cash used in financing activities totaled $68,901,000 for the three-month period in 2026 and $118,370,000 for the same period in 2025.

The decrease in financing cash outflow from the prior year was due to higher proceeds from stock option exercises during the three-month period in 2026 that partially offset the impact of the Company's stock repurchase and dividend programs.

In March 2022, the Company's Board of Directors (the "Board") authorized a program providing for the repurchase of $500,000,000 of the Company's common stock (the "Program").

Under the Program, in addition to repurchases made in other periods, the Company repurchased 2,375,000 shares at a total cost of $98,995,000 during the three-month period in 2026, leaving a remaining balance of $16,025,000 as of April 5, 2026.

On February 11, 2026, the Board authorized the repurchase of an additional $500,000,000 of the Company's common stock upon completion of the Program.

Net cash used in financing activities totaled $2,138,000 for the six-month period in 2026 and $131,626,000 for the same period in 2025.

The decrease in financing cash outflow from the prior year was due to higher proceeds from stock option exercises during the six-month period in 2026.

In March 2022, the Company's Board of Directors (the "Board") authorized a program providing for the repurchase of up to $500,000,000 of the Company's common stock (the "Program").

Under the Program, in addition to repurchases made in other periods, the Company repurchased 2,501,000 shares at a total cost of $105,231,000 during the six-month period in 2026, leaving a remaining balance of $9,789,000 as of July 5, 2026.

On February 11, 2026, the Board authorized the repurchase of up to an additional $500,000,000 of the Company's common stock upon completion of the Program.

The Company may repurchase shares under these programs in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements.

The Company is authorized to make repurchases of its common stock through open market purchases, pursuant to Rule 10b5-1 trading plans, or in privately negotiated transactions.

The Board declared and paid cash dividends of $0.085 per share in the three-month period ended April 5, 2026, totaling $14,196,000.

The Board declared and paid cash dividends of $0.085 per share for the first and second quarters of 2026, totaling $28,454,000.

Future dividends will be declared at the discretion of the Board and will depend on such factors as the Board deems relevant, including, among other things, the Company's ability to generate positive cash flow from operations.

Future Cash Requirements

As of April 5, 2026, the Company had inventory purchase commitments of $50,616,000, with the majority payable within twelve months, and lease payment obligations of $90,537,000, with $16,482,000 payable within twelve months.

As of July 5, 2026, the Company had inventory purchase commitments of $66,839,000, with the majority payable within twelve months, and lease payment obligations of $88,148,000, with $16,327,000 payable within twelve months.

We believe that the Company's existing cash and investment balances, together with cash flow from operations, will be sufficient to meet its operating, investing, and financing activities for the next twelve months.

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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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis