Chefs' Warehouse, Inc. 10-K

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Our exposure to interest rate market risk relates primarily to our long-term debt. We have various floating- and fixed-rate debt instruments as described in Note 9 “Debt Obligations” to our consolidated financial statements. As of December 26, 2025, we had an aggregate $352.0 million of floating-rate indebtedness. A 100 basis point increase in market interest rates would decrease our after tax earnings by approximately $2.5 million per annum, holding other variables constant. 44 Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to the Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (BDO USA, P.C, Stamford, Connecticut, PCAOB ID# 243 ) 46 Consolidated Balance Sheets 48 Consolidated Statements of Operations and Comprehensive Income 49 Consolidated Statements of Changes in Stockholders’ Equity 50 Consolidated Statements of Cash Flows 51 Notes to Consolidated Financial Statements 52 45 Report of Independent Registered Public Accounting Firm Stockholders and Board of Directors The Chefs’ Warehouse, Inc. Ridgefield, Connecticut Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of The Chefs’ Warehouse, Inc. (the “Company”) as of December 26, 2025 and December 27, 2024, the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 26, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 26, 2025 and December 27, 2024, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 26, 2025 , in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 26, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 24, 2026 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Transactions As described in Note 2 to the consolidated financial statements, the Company recognizes revenue from product sales at the point at which control of each product is transferred to the customer. The Company’s total net sales were $4.1 billion for the fiscal year ended December 26, 2025. We identified the auditing of the accuracy and existence of revenue transactions as a critical audit matter. Auditing the accuracy and existence of revenue transactions was especially challenging due to the significant audit effort involved in performing procedures, given the significance of net sales and the large volume of transactions. 46 The primary procedures we performed to address this critical audit matter included: • Testing the operating effectiveness of controls, where applicable, relating to accuracy and existence of revenue transactions. • Evaluating the accuracy and existence of revenue transactions, on a sample basis, by obtaining and inspecting invoices, evidence of delivery, and cash receipts from customers, where applicable. • Recalculating sales prices on a sample basis, where applicable, based on the terms and conditions of underlying signed contracts and vendor invoices. /s/ BDO USA, P.C. We have served as the Company’s auditor since 2006. Stamford, Connecticut February 24, 2026 47 THE CHEFS’ WAREHOUSE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) December 26, 2025 December 27, 2024 ASSETS Current assets: Cash and cash equivalents $ 120,982 $ 114,655 Accounts receivable, net of allowances ($ 26,965 in 2025 and $ 22,341 in 2024) 392,374 366,311 Inventories 385,722 316,014 Prepaid expenses and other current assets 70,811 71,063 Total current assets 969,889 868,043 Property and equipment, net 342,019 275,781 Operating lease right-of-use assets 205,270 191,423 Goodwill 362,742 356,298 Intangible assets, net 137,310 160,383 Other assets 10,777 6,763 Total assets $ 2,028,007 $ 1,858,691 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 275,622 $ 266,775 Accrued liabilities 78,458 68,538 Short-term operating lease liabilities 24,832 21,965 Accrued compensation 66,350 50,078 Current portion of long-term debt 28,197 18,040 Total current liabilities 473,459 425,396 Long-term debt, net of current portion 720,333 688,744 Operating lease liabilities 201,542 187,079 Deferred taxes, net 22,424 15,891 Other liabilities 5,940 3,935 Total liabilities 1,423,698 1,321,045 Commitments and contingencies (Note 16) Stockholders’ equity: Preferred Stock - $ 0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 26, 2025 and December 27, 2024, respectively — — Common Stock - $ 0.01 par value, 100,000,000 shares authorized, 40,679,813 and 40,248,884 shares issued and outstanding at December 26, 2025 and December 27, 2024, respectively 407 402 Additional paid in capital 405,020 399,111 Accumulated other comprehensive loss ( 2,763 ) ( 3,807 ) Retained earnings 201,645 141,940 Total stockholders’ equity 604,309 537,646 Total liabilities and stockholders’ equity $ 2,028,007 $ 1,858,691 See accompanying notes to the consolidated financial statements. 48 THE CHEFS’ WAREHOUSE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Amounts in thousands, except share and per share amounts) Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Net sales $ 4,149,537 $ 3,794,212 $ 3,433,763 Cost of sales 3,145,447 2,880,065 2,619,289 Gross profit 1,004,090 914,147 814,474 Selling, general and administrative expenses 849,789 784,852 704,758 Other operating expenses, net 9,195 1,088 8,773 Operating income 145,106 128,207 100,943 Interest expense 41,564 48,675 45,474 Income before income taxes 103,542 79,532 55,469 Provision for income tax expense 31,181 24,053 20,879 Net income $ 72,361 $ 55,479 $ 34,590 Other comprehensive income: Foreign currency translation adjustments 1,044 ( 1,975 ) 353 Comprehensive income $ 73,405 $ 53,504 $ 34,943 Net income per share: Basic $ 1.87 $ 1.46 $ 0.92 Diluted $ 1.68 $ 1.32 $ 0.88 Weighted average common shares outstanding: Basic 38,719,025 37,914,060 37,633,672 Diluted 46,001,316 45,983,065 45,639,220 See accompanying notes to the consolidated financial statements. 49 THE CHEFS’ WAREHOUSE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the Fiscal Years Ended December 26, 2025, December 27, 2024, and December 29, 2023 (Amounts in thousands, except share amounts) Common Stock Additional Paid in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shares Amount Balance December 30, 2022 38,599,390 $ 386 $ 337,947 $ ( 2,185 ) $ 65,361 $ 401,509 Net income — — — — 34,590 34,590 Stock compensation 1,053,256 10 17,813 — — 17,823 Shares issued for acquisition 75,008 1 2,494 — — 2,495 Cumulative translation adjustment — — — 353 — 353 Common stock issued under stock plans, net of shares surrendered to pay tax withholding ( 61,858 ) ( 1 ) ( 2,097 ) — — ( 2,098 ) Balance December 29, 2023 39,665,796 $ 396 $ 356,157 $ ( 1,832 ) $ 99,951 $ 454,672 Net income — — — — 55,479 55,479 Stock compensation — — 15,333 — — 15,333 Conversion of debt to common stock 858,360 8 37,930 — — 37,938 Common stock retired ( 426,235 ) ( 4 ) ( 3,899 ) — ( 13,490 ) ( 17,393 ) Warrant exercises 38,904 1 ( 1 ) — — — Cumulative translation adjustment — — — ( 1,975 ) — ( 1,975 ) Common stock issued under stock plans, net of shares surrendered to pay tax withholding 112,059 1 ( 6,409 ) — — ( 6,408 ) Balance December 27, 2024 40,248,884 $ 402 $ 399,111 $ ( 3,807 ) $ 141,940 $ 537,646 Net income — — — — 72,361 72,361 Stock compensation — — 18,158 — — 18,158 Common stock retired ( 241,198 ) ( 2 ) ( 2,346 ) — ( 12,656 ) ( 15,004 ) Warrant exercises 13,339 — — — — — Cumulative translation adjustment — — — 1,044 — 1,044 Common stock issued under stock plans, net of shares surrendered to pay tax withholding 658,788 7 ( 9,903 ) — — ( 9,896 ) Balance December 26, 2025 40,679,813 $ 407 $ 405,020 $ ( 2,763 ) $ 201,645 $ 604,309 See accompanying notes to the consolidated financial statements. 50 THE CHEFS’ WAREHOUSE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Cash flows from operating activities: Net income $ 72,361 $ 55,479 $ 34,590 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 53,652 40,562 32,887 Amortization of intangible assets 24,478 24,372 22,719 Provision for allowance for credit losses 12,118 11,982 8,078 Provision for deferred income taxes 6,533 1,464 8,114 Stock compensation 21,242 17,778 20,042 Change in fair value of contingent earn-out liabilities — ( 3,266 ) 3,081 Intangible asset impairment 8,023 — 1,838 Non-cash interest and other operating activities 6,449 6,144 5,456 Changes in assets and liabilities, net of acquisitions: Accounts receivable ( 35,853 ) ( 44,812 ) ( 48,813 ) Inventories ( 67,114 ) ( 32,205 ) ( 28,759 ) Prepaid expenses and other current assets 404 ( 6,036 ) ( 7,234 ) Accounts payable, accrued liabilities and accrued compensation 31,367 87,312 19,598 Other assets and liabilities ( 4,441 ) ( 5,713 ) ( 9,958 ) Net cash provided by operating activities 129,219 153,061 61,639 Cash flows from investing activities: Capital expenditures ( 41,426 ) ( 49,506 ) ( 57,427 ) Cash paid for acquisitions, net of cash acquired ( 4,583 ) ( 315 ) ( 121,884 ) Cash paid for contingent earn-out liabilities ( 750 ) — — Net cash used in investing activities ( 46,759 ) ( 49,821 ) ( 179,311 ) Cash flows from financing activities: Payment of debt and other financing obligations ( 13,000 ) ( 22,995 ) ( 29,000 ) Payment of finance leases ( 15,566 ) ( 7,057 ) ( 4,327 ) Payment of deferred financing fees ( 658 ) — ( 1,739 ) Common stock repurchases ( 15,004 ) ( 17,393 ) — Proceeds from exercise of stock options — 175 55 Surrender of shares to pay withholding taxes ( 11,994 ) ( 7,412 ) ( 2,134 ) Cash paid for contingent earn-out liabilities — ( 3,800 ) ( 11,625 ) Borrowings under asset-based loan and revolving credit facilities — 46,430 60,000 Payments under asset-based loan and revolving credit facilities ( 20,000 ) ( 26,430 ) ( 2,220 ) Net cash (used in) provided by financing activities ( 76,222 ) ( 38,482 ) 9,010 Effect of foreign currency on cash and cash equivalents 89 19 ( 260 ) Net change in cash and cash equivalents 6,327 64,777 ( 108,922 ) Cash and cash equivalents at beginning of year 114,655 49,878 158,800 Cash and cash equivalents at end of year $ 120,982 $ 114,655 $ 49,878 See accompanying notes to the consolidated financial statements. 51 THE CHEFS’ WAREHOUSE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share and per share amounts) Note 1 - Operations and Basis of Presentation Description of Business and Basis of Presentation The Chefs’ Warehouse, Inc., and its wholly-owned subsidiaries (the “Company”), is a distributor of specialty food and center-of-the-plate products in the United States, the Middle East and Canada. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. The Company’s quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years, the Company will add a fourteenth week to its fourth quarter to more closely align its year end to the calendar year. The consolidated financial statements for each of the fiscal years presented contain 52 weeks. Consolidation The consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Adoption of New Accounting Pronouncements in Fiscal 2025 Improvements to Income Tax Disclosures : In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance designed to improve the transparency and usefulness of income tax disclosures. The amendments include provisions to address the consistency of the income tax rate reconciliation and a requirement to disaggregate income taxes paid by jurisdiction. The Company adopted the guidance, which is limited to financial statement disclosures, effective December 26, 2025 on a retrospective basis and has provided the required annual disclosures in Note 12, Income Taxes. Accounting Pronouncements Not Yet Adopted in Fiscal 2025 Targeted Improvements to the Accounting for Internal-Use Software: In September 2025, the FASB issued guidance amending the requirements for capitalizing software costs to when both the following conditions are met: (1) the funding of the project has the appropriate authorization and (2) it is probable that the project will be completed and the software will be used to perform the intended function. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within that fiscal year, and may be applied on a prospective, modified prospective or retrospective basis. Early adoption is permitted. The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements. Measurements of Credit Losses for Accounts Receivable and Contract Assets: In July 2025, the FASB issued guidance to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets to assume that current conditions as of the balance sheet date will persist through a reasonable and supportable forecast period. The Company adopted the guidance in its fiscal year 2026. The adoption did not have a material impact on the Company’s consolidated financial statements. Induced Conversions of Convertible Debt Instruments : In November 2024, the FASB issued guidance which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted the guidance in its fiscal year 2026. The impact of this guidance is dependent on future induced conversions, if any, of the Company’s convertible debt instruments. Disaggregation of Income Statement Expenses: In November 2024, the FASB issued guidance to require disclosure in the notes to the financial statements of certain categories of expenses that are included on the face of the income statement, including purchases of inventory, employee compensation and depreciation and amortization, as well as additional disclosure about selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis. Early adoption is permitted. The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures. 52 Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles requires it to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Estimates are used in determining, among other items, the allowance for credit losses, inventory valuation adjustments, self-insurance reserves for group medical insurance, workers’ compensation insurance and automobile liability insurance, future cash flows associated with impairment testing for intangible assets (including goodwill) and long-lived assets, useful lives for intangible assets, stock-based compensation, contingent earn-out liabilities and income tax reserves. Actual results could differ from estimates. Note 2 – Summary of Significant Accounting Policies Revenue Recognition Revenues from product sales are recognized at the point at which control of each product is transferred to the customer. The Company’s contracts contain performance obligations which are satisfied when customers have physical possession of each product. The majority of customer orders are fulfilled within a day and customer payment terms are typically 14 to 60 days from delivery. Shipping and handling activities are costs to fulfill the Company’s performance obligations. These costs are expensed as incurred and presented within selling, general and administrative expenses on the consolidated statements of operations. The Company offers certain sales incentives to customers in the form of rebates or discounts. These sales incentives are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and records a corresponding reduction in revenue. The Company does not expect a significant reversal in the amount of cumulative revenue recognized. Sales tax billed to customers is not included in revenue but rather recorded as a liability owed to the respective taxing authorities at the time the sale is recognized. The following table presents the Company’s net sales disaggregated by principal product category: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Center-of-the-plate $ 1,608,808 38.8 % $ 1,455,274 38.4 % $ 1,352,230 39.4 % Specialty: Dry goods 656,793 15.8 % 604,273 15.9 % 545,451 15.9 % Pastry 562,301 13.6 % 465,166 12.3 % 410,604 12.0 % Cheeses and charcuterie 292,680 7.1 % 271,612 7.2 % 253,343 7.4 % Produce 516,605 12.4 % 535,102 14.1 % 444,749 13.0 % Dairy and eggs 296,839 7.2 % 255,466 6.7 % 228,582 6.7 % Oils and vinegars 135,553 3.3 % 131,190 3.5 % 129,194 3.8 % Kitchen supplies 79,958 1.8 % 76,129 1.9 % 69,610 1.8 % Total specialty $ 2,540,729 61.2 % $ 2,338,938 61.6 % $ 2,081,533 60.6 % Total net sales $ 4,149,537 100 % $ 3,794,212 100 % $ 3,433,763 100 % The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information. Net sales by product category includes estimates of product mix for certain locations that are not yet fully integrated into the Company’s sales reporting system as of the reporting date. Deferred Revenue Certain customer arrangements in the Company’s direct-to-consumer business, prepaid gift plans and gift card purchases, result in deferred revenues when cash payments are received in advance of performance. The Company recognizes revenue on its prepaid gift plans when control of each product is transferred to the customer. Performance obligations under the Company’s prepaid gift plans are satisfied within a period of twelve months or less. Gift cards issued by the Company do not have expiration dates. The Company records a liability for unredeemed gift cards at the time gift cards are sold and the liability is reduced when the card is redeemed, any remaining value of the card is escheated to the appropriate government agency, or through breakage, as necessary. Gift card breakage is estimated based on the Company’s historical redemption experience and expected trends in redemption patterns. Amounts recognized through breakage represent the portion of the gift card liability that 53 is not subject to unclaimed property laws and for which the likelihood of redemption is remote. The Company recorded deferred revenues, reflected within accrued liabilities on the Company’s consolidated balance sheets, of $ 1,931 and $ 1,942 as of December 26, 2025 and December 27, 2024, respectively. Right of Return The Company’s standard terms and conditions provide customers with a right of return if the goods received are not merchantable. Customers are either issued a replacement order at no cost, or are issued a credit for the returned goods. The Company recorded a refund liability of $ 950 and $ 876 as of December 26, 2025 and December 27, 2024, respectively. Refund liabilities are reflected within accrued liabilities on the Company’s consolidated balance sheets. The Company recognized a corresponding asset of $ 594 and $ 521 as of December 26, 2025 and December 27, 2024, respectively, for its right to recover products from customers on settling its refund liabilities. This asset is reflected within inventories on the Company’s consolidated balance sheets. Contract Costs Sales commissions are expensed when incurred because the amortization period is one year or less. These costs are presented within selling, general and administrative expenses on the Company’s consolidated statements of operations. Cost of Sales The Company records cost of sales based upon the net purchase price paid for a product, including applicable freight charges incurred to deliver the product to the Company’s warehouse, and food processing costs. Food processing costs include but are not limited to direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities. Selling, General and Administrative Expenses Selling, general and administrative expenses include facilities costs, product shipping and handling costs, warehouse costs, and other selling, general and administrative costs. Shipping and handling costs included in selling, general and administrative expenses were $ 204,151 , $ 198,211 and $ 181,298 for fiscal 2025, 2024 and 2023, respectively. Other Operating Expenses Other operating expenses includes expenses primarily related to changes in the fair value of the Company’s contingent earn-out liabilities, gains and losses on asset disposals, asset impairments, certain third-party deal costs incurred in connection with business acquisitions or financing arrangements and certain other costs. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of less than three months to be cash equivalents. The Company periodically maintains balances at financial institutions which may exceed Federal Deposit Insurance Corporation insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. Accounts Receivable Accounts receivable consist of trade receivables from customers and are recorded net of an allowance for credit losses. The allowance for credit losses is determined based upon a number of specific criteria, such as whether a customer has filed for or been placed into bankruptcy, has had accounts referred to outside parties for collections or has had accounts significantly past due. The allowance also covers short paid invoices the Company deems to be uncollectible as well as a portion of trade accounts receivable balances projected to become uncollectible based upon historic patterns and macro-economic factors in existence as of the balance sheet date that may impact the food-away-from-home industry and/or its customers. Inventories Inventories consist primarily of finished goods, food and related food products held for resale and are valued at the lower of cost or net realizable value. The Company’s different entities record inventory using a mixture of first-in, first-out and average 54 cost, which approximates first-in, first-out. The Company adjusts inventory balances for excess and obsolete inventories to approximate their net realizable value. Vendor Rebates and Other Promotional Incentives The Company receives consideration and product purchase credits from certain vendors that the Company accounts for as a reduction of cost of sales. There are several types of cash consideration received from vendors. The purchase incentive is primarily in the form of a specified amount per pound or per case, or an amount for year-over-year growth. Recorded purchase incentives totaled approximately $ 69,817 , $ 60,378 and $ 48,026 for fiscal 2025, 2024 and 2023, respectively. Concentrations of Credit Risks Financial instruments that subject the Company to concentrations of credit risk consist of cash, cash equivalents and trade receivables. The Company’s policy is to deposit its cash and cash equivalents with major financial institutions. To reduce credit risk, the Company performs ongoing credit evaluations of its customers’ financial conditions. The Company generally does not require collateral. However, the Company, in certain instances, has obtained personal guarantees from certain customers. There is no significant balance with any individual customer. Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Property and equipment are reviewed for impairment in accordance with Accounting Standards Codification (“ASC”) 360-10-35-15, “Impairment or Disposal of Long-Lived Assets ” which only requires testing whenever events or changes in circumstances indicate that the carrying amount of the assets or asset groups may not be recoverable. If any indicators are present, a recoverability test is performed by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If the net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), an additional step is performed that determines the fair value of the asset and the Company records an impairment, if any. The Company has no t recorded any impairment of property and equipment in fiscal 2025, 2024 or 2023. Leases The Company leases various distribution centers, office facilities, vehicles and equipment. The Company determines if an arrangement contains a lease at contract inception. An arrangement is or contains a lease if the agreement identifies an asset, implicitly or explicitly, that the Company has the right to use over a period of time. If an arrangement contains a lease, the Company classifies the lease as either an operating lease or as a finance lease based on the five criteria defined in ASC 842, “Leases”. Lease liabilities are recognized at commencement date based on the present value of the remaining lease payments over the lease term. The corresponding right-of-use (“ROU”) asset is recognized for the same amount as the lease liability adjusted for any payments made at or before the commencement date, any lease incentives received, and any initial direct costs. The Company’s lease agreements may include options to renew, extend or terminate the lease. These clauses are included in the initial measurement of the lease liability when at lease commencement the Company is reasonably certain that it will exercise such options. The discount rate used is based on the Company’s incremental borrowing rate since the implicit rate in the Company’s leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term and presented within selling, general and administrative expenses on the Company’s consolidated statements of operations. Finance lease ROU assets are amortized on a straight-line basis over the shorter of the useful life of the asset or the lease term. Interest expense on the finance lease liability is recognized using the effective interest rate method and is presented within interest expense on the Company’s consolidated statements of operations. Variable rent payments related to both operating and finance leases are expensed as incurred. The Company’s variable lease payments primarily consist of real estate taxes, maintenance and usage charges. The Company made an accounting policy election to combine lease and non-lease components (maintenance, taxes and insurance) when measuring lease liabilities for vehicle and equipment leases. The Company has elected to exclude short-term leases from the recognition requirements of ASC 842. A lease is short-term if, at the commencement date, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis over the lease term. 55 Software Costs The Company capitalizes certain computer software licenses and software implementation costs that are included in software costs in its consolidated balance sheets. These costs were incurred in connection with developing or obtaining computer software for internal use if it has a useful life in excess of one year, in accordance with ASC 350-40 “Internal-Use Software.” Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task that it previously did not perform. Internal use software is amortized on a straight-line basis over a three to seven year period. Capitalized costs include direct acquisitions as well as software and software development acquired under capitalized leases and internal labor where appropriate. Capitalized software purchases and related development costs, net of accumulated amortization, were $ 14,364 at December 26, 2025 and $ 14,350 at December 27, 2024. Convertible Debt The Company evaluates debt instruments with embedded conversion features in accordance with ASC 815 “Derivatives and Hedging” and ASC 470 “Debt” both of which provide several criteria that determine whether a conversion feature must be bifurcated from its debt host and accounted as a separate financial instrument. An entity is not required to bifurcate if the conversion feature is indexed to its own stock, meets all equity classification criteria and does not contain a beneficial conversion feature. The Company determined that bifurcation of its convertible debt instruments was not required and recognized the principal amount of these instruments as debt in its consolidated balance sheets. Debt Issuance Costs Certain up-front costs associated with the Company’s asset-based loan facility are capitalized and included in other non-current assets in the Company’s consolidated balance sheets. The Company had $ 885 and $ 414 of such unamortized costs as of December 26, 2025 and December 27, 2024, respectively. Costs associated with the issuance of other debt instruments are capitalized and presented as a direct deduction from the carrying amount of the underlying debt liability. The Company had $ 10,413 and $ 13,389 of such unamortized costs as of December 26, 2025 and December 27, 2024, respectively. These costs are amortized over the terms of the related debt instruments by the effective interest rate method. Amortization of debt issuance costs was $ 3,314 , $ 3,466 and $ 3,615 fiscal 2025, 2024 and 2023, respectively. Business Combinations The Company accounts for acquisitions in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed are recorded in the accompanying consolidated balance sheets at their estimated fair values, as of the acquisition date. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred and presented in other operating expenses in the Company’s consolidated statements of operations. Results of operations are included in the Company’s financial statements from the date of acquisition. Intangible Assets The intangible assets recorded by the Company consist of customer relationships, covenants not to compete and trademarks which are amortized over their useful lives on a schedule that approximates the pattern in which economic benefits of the intangible assets are consumed. Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If any indicators are present, a recoverability test is performed by comparing the carrying amount of the asset or asset group to the net undiscounted cash flows expected to be generated from the asset. Undiscounted cash flows expected to be generated by the related assets are estimated over the assets’ useful lives based on updated projections. If the evaluation indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow model. The Company recognized customer relationships intangible asset impairment charges of $ 8,023 in fiscal 2025 and $ 1,838 in fiscal 2023 related to the loss of non-core customers, post acquisition. The impairment charges are presented within other operating expense s on the consolidated statements of operations. See Note 8 for more information. There have been no other events or changes in circumstances during fiscal 2025, 2024 or 2023, indicating that the carrying value of the Company’s finite-lived intangible assets are not recoverable. 56 Goodwill Goodwill is the excess of the acquisition cost of businesses over the fair value of identifiable net assets acquired in accordance with ASC 350, “Intangibles-Goodwill and Other.” The Company maintains four reporting units. The Company evaluates the recoverability of goodwill at each of its reporting units annually in the fourth quarter, or more frequently when circumstances indicate an impairment may have occurred. A goodwill impairment loss, if any, would be recognized for the amount by which a reporting unit’s carrying value exceeded its fair value. The Company has the option to evaluate goodwill impairment using a qualitative or quantitative analysis. For the fiscal years ended December 26, 2025 and December 29, 2023, the Company assessed the recoverability of goodwill using a qualitative analysis and determined that it is more likely than not that the fair value of its reporting units exceeded their respective carry values. The qualitative analysis considered various factors including macroeconomic conditions, market conditions, industry trends, cost factors and financial performance, among others. For the fiscal year ended December 27, 2024, the Company assessed the recoverability of goodwill using a quantitative analysis and determined that the fair value of its reporting units substantially exceeded their respective carry values. When a quantitative analysis is required, the Company estimates the fair value of its reporting units using a combination of income and market approaches. The income approach incorporates the use of a discounted cash flow model that involves many management assumptions that are based upon future growth projections. Assumptions include estimates of future revenue based upon budget projections and growth rates. The Company develops estimates of future levels of gross and operating profits and projected capital expenditures. This methodology includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. The market approach of determining fair value, which includes the guideline public company method, is based on comparable market multiples for companies engaged in similar businesses. There have been no events or changes in circumstances during fiscal 2025, 2024 or 2023, indicating that goodwill may be impaired. Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes.” Deferred tax assets or liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each year-end. These amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse. The Company estimates its ability to recover deferred tax assets within the jurisdiction from which they arise. This evaluation considers several factors, including results of recent operations, future taxable income, scheduled reversal of deferred tax liabilities, and tax planning strategies. As of December 26, 2025 and December 27, 2024, the Company did not have a valuation allowance. ASC 740, “Income Taxes” established a single model to address accounting for uncertain tax positions and clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company evaluates uncertain tax positions, if any, by determining if it is more likely than not to be sustained upon examination by the tax authorities. The Company records uncertain tax positions when it is more likely than not that such liabilities have been incurred. The Company, when required, will accrue interest and penalties related to income tax matters in income tax expense. The Company releases disproportionate tax effects from accumulated other comprehensive income as individual items are liquidated. Commitments and Contingencies The Company is subject to various claims and contingencies related to lawsuits, taxes and environmental matters, as well as commitments under contractual and other commercial obligations. The Company recognizes liabilities for contingencies and commitments when a loss is probable and can be reasonably estimated. Contingent Earn-out Liabilities The Company accounts for contingent consideration relating to business combinations as a liability and an increase to goodwill at the date of the acquisition and continually remeasures the liability at each balance sheet date by recording changes in the fair value through the consolidated statements of operations. The Company determines the fair value of contingent consideration based on future operating projections under various potential scenarios, including the use of Monte Carlo simulation models, and weighs the probability of these outcomes. The ultimate settlement of contingent earn-out liabilities relating to business 57 combinations may be for amounts which are materially different from the amounts initially recorded and may cause volatility in the Company’s results of operations. Net Income per Share Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share adjusts basic net income per share for all the potentially dilutive shares outstanding during the period. Potentially dilutive shares include unexercised stock options, unvested stock-based awards and shares related to warrants and convertible notes outstanding. The dilutive potential common shares for the Company’s stock-based awards and warrants were determined using the treasury stock method. The dilutive potential common shares for the Company’s convertible notes were determined using the if-converted method. Stock-Based Compensation The Company determines the accounting classification of stock awards as either a liability or equity in accordance with ASC 480 “Distinguishing Liabilities from Equity” and ASC 718 “Compensation - Stock Compensation.” Stock awards are classified as liabilities when, among other considerations, they require settlement by issuing a variable number of shares. Stock-based compensation for stock awards classified as liabilities is initially measured at the grant date based on the estimated fair value of the ultimate award liability and remeasured each reporting period until settlement, considering the estimable probable outcome at the end of the performance period. The Company measures stock-based compensation for stock awards classified as equity at the grant date based on the fair value of the award. Restricted stock awards (“RSAs”), restricted share units (“RSUs”) and performance share units, including performance-based restricted share units (“PRSUs”), are valued based on the fair value of the stock on the grant date. The related compensation expense is recognized over the service period on a straight-line basis and reduced by forfeitures when they occur. Stock-based compensation expense is presented within selling, general and administrative expenses on the Company’s consolidated statements of operations. Compensation expense on performance share units reflects the estimated probable outcome at the end of the performance period. The fair value of stock options, RSAs with market conditions and PRSUs is determined based on a Monte Carlo simulation model in order to simulate a range of possible future stock prices for the Company’s common stock. For awards subject to graded vesting, the Company ensures that the compensation expense recognized is at least equal to the vested portion of the award. Share Repurchases The Company had a share repurchase program that was executed through purchases made from time to time either in the open market or through private market transactions. All shares repurchased under the share repurchase program were retired and returned to the status of authorized and unissued shares. When treasury shares are retired, the Company allocates the excess of the repurchase price over the par value of shares acquired between additional paid-in capital and retained earnings. The portion allocated to additional paid-in capital is limited to the pro rata portion of additional paid-in capital for the retired treasury shares. Any further excess of the repurchase price is allocated to retained earnings. Self-Insurance Reserves The Company maintains a self-insured group medical program. The program contains individual stop loss thresholds per incident and aggregate stop loss thresholds based upon the average number of employees enrolled in the program throughout the year. The amount in excess of the self-insured levels is fully insured by third-party insurers. Liabilities associated with this program are estimated in part by considering historical claims experience and medical cost trends. Projections of future loss expenses are inherently uncertain because of the random nature of insurance claims occurrences and could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. The Company maintains an insurance program for its automobile liability and workers’ compensation insurance subject to deductibles or self-insured retentions. The amounts in excess of the deductibles are fully insured by third-party insurers. Liabilities associated with this program are estimated in part by considering historical claims experience and cost trends. Projections of future loss expenses are inherently uncertain because of the random nature of insurance claims occurrences and could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. 58 Derivatives The Company may, from time to time, enter into forward contracts to reduce the effects of currency exchange rate fluctuations. These contracts generally mature within twelve months, are carried at fair value and are not designated as hedging instruments. Changes in the fair value of these forwards are recorded in earnings. The fair value of the forward contracts and related gains or losses were not material to the Company’s consolidated financial statements for the periods presented. Assets and Liabilities Measured at Fair Value The Company accounts for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes each of its fair value measurements in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs to the valuation methodology are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the asset and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the underlying assets or liabilities. Level 3 - Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure, generally using pricing models or other valuation techniques that reflect management’s judgment and estimates. Note 3 – Net Income per Share The following table sets forth the computation of basic and diluted net income per common share: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Net income per share: Basic $ 1.87 $ 1.46 $ 0.92 Diluted $ 1.68 $ 1.32 $ 0.88 Weighted average common shares: Basic 38,719,025 37,914,060 37,633,672 Diluted 46,001,316 45,983,065 45,639,220 Reconciliation of net income per common share: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Numerator: Net income $ 72,361 $ 55,479 $ 34,590 Add effect of dilutive securities: Interest on convertible notes, net of tax 4,767 5,234 5,399 Net income available to common shareholders $ 77,128 $ 60,713 $ 39,989 Denominator: Weighted average basic common shares outstanding 38,719,025 37,914,060 37,633,672 Dilutive effect of unvested common shares 714,911 687,524 574,707 Dilutive effect of stock options and warrants 72,410 57,540 38,024 Dilutive effect of convertible notes 6,494,970 7,323,941 7,392,817 Weighted average diluted common shares outstanding 46,001,316 45,983,065 45,639,220 59 Potentially dilutive securities that have been excluded from the calculation of diluted net income per common share because the effect is anti-dilutive are as follows: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Restricted share awards and restricted share units 240,887 270,751 532,608 Stock options and warrants — — 300,000 Note 4 – Fair Value Measurements Assets and Liabilities Measured at Fair Value The Company’s contingent earn-out liabilities are measured at fair value. These liabilities were estimated using Level 3 inputs. The fair value of contingent consideration are predominantly determined based on a probability-based approach which includes projected results, percentage probability of occurrence and the application of a discount rate to present value the payments. A significant change in projected results, discount rate, or probabilities of occurrence could result in a significantly higher or lower fair value measurement. Changes in the fair value of contingent earn-out liabilities are reflected in other operating expenses on the Company’s consolidated statements of operations. The following table presents the changes in Level 3 contingent earn-out liabilities: Balance December 29, 2023 $ 9,765 Cash payments ( 5,750 ) Changes in fair value ( 3,265 ) Balance December 27, 2024 750 Acquisition value 1,350 Cash payments ( 1,500 ) Balance December 26, 2025 $ 600 The contingent earn-out liability as of December 26, 2025 is long-term and reflected as other liabilities on the Company’s consolidated balance sheets. The liability as of December 27, 2024 is short-term and reflected in accrued liabilities on the Company’s consolidated balance sheets. Contingent earn-out liability payments made soon after the acquisition date of a business combination are classified as investing activities on the Company’s consolidated statements of cash flows. Contingent earn-out liability payments not made soon after the acquisition date of a business combination that are in excess of the acquisition date fair value of the underlying contingent earn-out liability are classified as operating activities and all other such payments are classified as financing activities. Fair Value of Financial Instruments The carrying amounts reported in the Company’s consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to their immediate to short-term nature. The fair values of the asset-based loan facility and term loan approximated their book values as of December 26, 2025 and December 27, 2024 as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements. The following table presents the carrying value and fair value of the Company’s convertible notes, Italco Note and GreenLeaf Note (more fully described in Note 9). The fair value of the 2028 Convertible Senior Notes was based on bid/ask quotes as of or near the balance sheet date. The fair value of the Italco Note at December 26, 2025 and the GreenLeaf Note at December 27, 2024 was determined based upon observable market prices of similar debt instruments. December 26, 2025 December 27, 2024 Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value 2028 Convertible Senior Notes Level 2 $ 287,500 $ 442,750 $ 287,500 $ 365,556 Italco Note Level 2 $ 10,700 $ 10,768 $ — $ — GreenLeaf Note Level 2 $ — $ — $ 5,000 $ 5,070 60 Note 5 – Acquisitions Italco O n October 1, 2025, the Company entered into an asset purchase agreement to acquire substantially all of the assets of Italco Food Products (“Italco”), a specialty food distributor based in Denver, Colorado. The purchase price was $ 16,500 , consisting of $ 5,500 cash paid at closing, $ 10,700 from the issuance of an unsecured note and 4,736 shares of the Company’s common stock with an approximate value of $ 300 based on the trading price of the Company’s common stock on the date of acquisition and is subject to customary working capital true-ups. The assets acquired consist primarily of inventory, accounts receivable and goodwill and other intangibles and are not material to the Company’s consolidated financial statements. The intangible assets acquired consisted of customer relationships and trademarks and are being amortized over 10 and 5 years, respectively. The Italco acquisition was not material to the Company’s consolidated statements of operations. GreenLeaf On May 1, 2023, the Company entered into a stock purchase agreement to acquire substantially all of the equity interests of Oakville Produce Partners, LLC (“GreenLeaf”), a leading produce and specialty food distributor in Northern California. The final purchase price was $ 88,204 consisting of $ 72,157 paid in cash at closing, $ 3,551 paid upon settlement of net working capital true-ups, the issuance of a $ 10,000 unsecured note and 75,008 shares of the Company’s common stock with an approximate value of $ 2,496 based on the trading price of the Company’s common stock on the date of acquisition. The acquisition was partially funded by a $ 40,000 incremental draw on the Company’s asset-based loan facility. All of the goodwill recorded for the GreenLeaf acquisition of $ 47,235 is deductible for income tax purposes. The goodwill recorded primarily reflects the value of acquiring an established specialty produce distributor to leverage the Company’s existing products in the markets served by GreenLeaf and any intangible assets that do not qualify for separate recognition, including assembled workforce. The intangible assets acquired consisted of customer relationships, trademarks and non-compete agreements valued at $ 29,900 , $ 1,500 and $ 400 , respectively, as of the acquisition date, with an estimated weighted average life of 7.2 , 5 and 2 years, respectively. For the fiscal year ended December 29, 2023, the Company reflected net sales and income before income taxes of $ 82,917 and $ 7,039 , respectively, for GreenLeaf in its consolidated statement of operations. Hardie’s Fresh Foods On March 20, 2023, pursuant to an asset purchase agreement, the Company acquired substantially all of the assets of Hardie’s F&V, LLC (“Hardie’s”), a specialty produce distributor with operations in Texas. The final purchase price was approximately $ 41,361 , consisting of $ 38,000 paid in cash at closing, $ 639 received upon settlement of a net working capital true-up and an earn-out liability valued at approximately $ 4,000 as of the acquisition date. The payment of the earn-out liability was subject to the successful achievement of certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets. All of the goodwill recorded for the Hardie’s acquisition of $ 11,516 is deductible for income tax purposes. The goodwill recorded primarily reflects the value of acquiring an established specialty produce distributor to leverage the Company’s existing products in the markets served by Hardie’s and any intangible assets that do not qualify for separate recognition, including assembled workforce. The intangible assets acquired consisted of customer relationships and trademarks valued at $ 14,000 and $ 3,600 , respectively, as of the acquisition date. During fiscal 2023, the Company incurred a customer relationship impairment charge more fully described in Note 8 “Goodwill and Other Intangible Assets.” The remaining customer relationships and trademarks are being amortized over 10 and 5 years, respectively. For the fiscal year ended December 29, 2023, the Company reflected net sales and loss before income taxes of $ 194,776 and $ 1,116 , respectively, for Hardie’s in its consolidated statement of operations. Other Fiscal 2023 Acquisitions During the fiscal year ended December 29, 2023, the Company completed three other acquisitions for an aggregate purchase price of approximately $ 18,029 , consisting of $ 12,971 paid in cash at closing, $ 1,178 paid upon settlement of net working capital adjustments, earn-out liabilities valued at approximately of $ 1,665 as of the dates of acquisition, and $ 2,215 of deferred payments. During the fiscal year ended December 27, 2024, the Company paid $ 2,000 in contingent consideration related to the earn-out liabilities. All of the goodwill recorded for these acquisitions of $ 8,844 is deductible for income tax purposes. The intangible assets acquired consisted of customer relationships valued at $ 4,276 as of the acquisition dates. The remaining customer relationships are being amortized over 10 years. For the fiscal year ended December 29, 2023, the Company reflected net sales of approximately $ 63,369 in its consolidated statement of operations. The Company has determined that separate 61 disclosure of income before income taxes is impracticable due to the integration of these businesses into the Company's existing operations. Unaudited Pro forma Financial Information The table below presents select unaudited pro forma consolidated income statement information of the Company as if the GreenLeaf and Hardie’s acquisitions had occurred on December 25, 2021. The pro forma results were prepared from financial information obtained from the sellers of the business, as well as information obtained during the due diligence process associated with the acquisitions. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, any incremental costs for transitioning to become a public company, and also does not reflect additional revenue opportunities following the acquisitions. The pro forma information reflects amortization expense related to the acquired intangible assets and depreciation expense on the acquired fair value of property and equipment. The pro forma information also reflects additional interest expense that would have been incurred by the Company to finance the acquisitions. Pro forma interest expense was estimated based on the prevailing interest rates charged on the Company’s senior secured term loan during fiscal 2022. Fiscal Year Ended December 29, 2023 Net sales $ 3,527,947 Income before income taxes $ 58,041 Note 6 – Inventories Inventories consist primarily of finished product. Inventory is reflected net of adjustments for shrinkage, excess and obsolescence to approximate their net realizable value totaling $ 10,520 and $ 11,579 at December 26, 2025 and December 27, 2024, respectively. Note 7 – Property and Equipment Property and equipment as of December 26, 2025 and December 27, 2024 consisted of the following: Useful Lives December 26, 2025 December 27, 2024 Land Indefinite $ 5,542 $ 5,542 Buildings 15 - 20 years 66,676 63,868 Machinery and equipment 5 - 10 years 37,982 40,693 Computers, data processing and other equipment 3 - 5 years 20,897 18,407 Software 3 - 7 years 43,603 37,381 Leasehold improvements 1 - 40 years 182,439 170,153 Furniture and fixtures 7 years 2,210 2,586 Vehicles 5 - 10 years 146,135 79,511 Construction-in-process 15,466 5,542 520,950 423,683 Less: accumulated depreciation and amortization ( 178,931 ) ( 147,902 ) Property and equipment, net $ 342,019 $ 275,781 Construction-in-process at December 26, 2025 and December 27, 2024 related primarily to on-going investments in the Company’s information systems and distribution facilities, including the build-out of the Company’s Portland, OR distribution facility in fiscal 2025. The net book value of equipment financed under finance leases at December 26, 2025 and December 27, 2024 was $ 104,060 and $ 45,051 , respectively. No interest expense was capitalized during the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023. 62 The components of depreciation and amortization expense were as follows: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Depreciation expense $ 47,543 $ 35,114 $ 26,910 Software amortization $ 6,109 $ 5,448 $ 5,977 Note 8 – Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill are presented as follows: Carrying amount as of December 29, 2023 $ 356,021 Goodwill adjustments 656 Foreign currency translation ( 379 ) Carrying amount as of December 27, 2024 356,298 Acquisitions 6,208 Foreign currency translation 236 Carrying amount as of December 26, 2025 $ 362,742 The goodwill adjustments included in the table above represent measurement period adjustments related to certain acquisitions completed in prior years. Other intangible assets as of December 26, 2025 and December 27, 2024 consisted of the following: Weighted Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net Amount December 26, 2025 Customer relationships 84 months $ 259,869 $ ( 150,422 ) $ 109,447 Trademarks 134 months 57,767 ( 29,904 ) 27,863 Non-compete agreements 9,299 ( 9,299 ) — Total $ 326,935 $ ( 189,625 ) $ 137,310 December 27, 2024 Customer relationships 88 months $ 251,932 $ ( 122,619 ) $ 129,313 Trademarks 140 months 56,184 ( 25,212 ) 30,972 Non-compete agreements 11 months 9,299 ( 9,201 ) 98 Total $ 317,415 $ ( 157,032 ) $ 160,383 The Company recognized customer relationships intangible asset impairment charges of $ 8,023 in fiscal 2025 and $ 1,838 in fiscal 2023 related to the loss of non-core customers, post acquisition. The impairment charges are presented within other operating expense s on the consolidated statements of operations. Amortization expense for other intangibles was $ 24,478 , $ 24,372 and $ 22,719 for the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023, respectively. 63 As of December 26, 2025, estimated amortization expense for other intangible assets for each of the next five fiscal years and thereafter is as follows: 2026 $ 22,072 2027 20,056 2028 19,225 2029 18,909 2030 15,376 Thereafter 41,672 Total $ 137,310 Note 9 – Debt Obligations Debt obligations as of December 26, 2025 and December 27, 2024 consisted of the following: Weighted Average Effective Interest Rate at December 26, 2025 Maturity December 26, 2025 December 27, 2024 Senior secured term loans 7.66 % August 2029 $ 252,000 $ 260,000 2028 Convertible senior notes 2.77 % December 2028 287,500 287,500 Asset-based loan facility 6.04 % August 2030 100,000 120,000 Finance leases and other financing obligations 7.19 % Various 119,451 52,673 Unamortized deferred costs ( 10,421 ) ( 13,389 ) Total debt obligations 748,530 706,784 Less: current installments ( 28,197 ) ( 18,040 ) Total long-term debt $ 720,333 $ 688,744 Maturities of the Company’s debt, excluding finance leases, for each of the next five years and thereafter at December 26, 2025 are as follows: 2026 $ 8,500 2027 8,500 2028 290,500 2029 243,000 2030 100,000 Total $ 650,500 See Note 11 - Leases for finance lease maturities. Senior Secured Term Loan Credit Facility In June 2016, the Company entered into a credit agreement (the “Term Loan Credit Agreement”) with a group of lenders that provides for a senior secured term loan B facility (the “Term Loan Facility”). The Term Loan Credit Agreement has been subsequently amended to increase the aggregate principal amount to $ 300,000 , extend the maturity date to August 23, 2029 (“2029 Term Loans”) and reduce the interest rate spread, among other items. The funds from the 2029 Term Loans have been used, and are expected to be used, for capital expenditures, permitted acquisitions, working capital, and general corporate purposes of the Company. Substantially all of the Company’s assets are pledged as collateral. The amendments to the Term Loan Credit Agreement involved multiple members of a loan syndicate. For each amendment, the Company performed an analysis for each lender to determine whether the amendment resulted in a substantial change to the remaining cash flows. For the amendments occurring during fiscal 2025, 2024 and 2023, the transactions were accounted for as a modification for the existing lenders. For the lenders that exited the loan syndicate, their portion of unamortized deferred financing fees were recorded in interest expense within the Company’s consolidated statements of operations. 64 The Company also made voluntary prepayments of $ 5,000 , $ 14,000 and $ 20,000 towards the 2029 Term Loans in fiscal 2025, 2024 and 2023, respectively. In connection with these prepayments, the Company wrote-off unamortized deferred financing fees, which were included in interest expense within the Company’s consolidated statements of operations. The Company recorded the following in its consolidated statements of operations as a result of these debt amendments and prepayments: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Loss on debt extinguishment included in interest expense: Related to term loan amendments $ — $ 154 $ — Related to term loan prepayments 150 531 770 Arrangement fees included in interest expense 525 1,300 — Third-party transaction costs included in other operating expenses 49 156 319 The Term Credit Agreement includes an accordion which permits the Company to request that the lenders extend additional Term Loans based on certain performance, leverage ratio and other restrictions. The Term Loan Credit Agreement includes a springing maturity of the earlier of August 23, 2029 and the date that is 181 days prior to the schedule maturity date of any individual trance of unsecured indebtedness of which a principal amount in excess of $ 40,000 remains outstanding on such date. The interest charged on the 2029 Term Loans is equal to a spread plus, at the Company’s option, either the Alternate Base Rate or the secured overnight financing rate (“SOFR”) for one-, two-, three- or six -month interest periods chosen by the Company. The Company is required to make scheduled principal payments of 0.25 % of the original principal amount per quarter. The Term Loan Facility contains affirmative covenants, negative covenants and events of default customary for a term loan B facility of this type. Additionally, the Term Loan Facility includes covenants that restrict the Company’s ability to pay dividends subject to compliance with certain baskets and leverage ratio tests. Asset-Based Loan Facility In June 2018, the Company entered into a credit agreement (the “ABL Credit Agreement”) with a group of lenders that provides for an asset-based loan facility (the “ABL”) in the aggregate amount of up to $ 150,000 . The ABL Credit Agreement has been subsequently amended to increase the aggregate commitments to $ 300,000 , extend the maturity date to August 20, 2030, eliminate the credit spread adjustment on the interest rate charged on borrowings and increase the aggregate letters of credit to not exceed $ 50,000 , among other items. The Company incurred transaction costs of $ 658 as a result of an amendment in fiscal 2025, which were capitalized as deferred financing fees to be amortized over the term of the ABL, presented in other non-current assets in the Company’s consolidated balance sheet. Borrowings under the ABL have been used, and are expected to be used, for capital expenditures, permitted acquisitions, working capital and general corporate purposes of the Company. Availability under the ABL will be limited to a borrowing base equal to the lesser of: (i) the aggregate amount of commitments or (ii) the sum of specified percentages of eligible receivables and eligible inventory, minus certain availability reserves. The Company under the ABL is entitled on one or more occasions, subject to the satisfaction of certain conditions, to request an increase in the commitments under the ABL in an aggregate principal amount of up to $ 25,000 . The ABL includes a springing maturity date that occurs 90 days prior to the earliest maturity under the Company’s senior secured term loan facility and the date that is 181 days prior to the scheduled maturity date of any individual tranche of unsecured indebtedness of which a principal amount in excess of $ 40,000 remains outstanding on such date and the maturity date. The interest rate charged on borrowings under the ABL is equal to, at the Company’s option, either the Base Rate or a forward-looking term rate based on SOFR for one-, three-, or six-month interest periods chosen by the Company. The Company will pay certain recurring fees with respect to the ABL, including fees on unused lender commitments. The ABL Credit Agreement contains customary affirmative covenants, negative covenants and events of default as more particularly described in the ABL Credit Agreement. If the amount of availability under the ABL falls below $ 21,000 or 10 % of 65 the Line Cap, as defined as the lessor of the aggregate commitment and the borrowing base, the Company is required to comply with a minimum consolidated fixed charge coverage ratio of 1 :1. As of December 26, 2025, the Company had reserved $ 40,484 of the ABL for the issuance of letters of credit and funds totaling $ 159,516 were available for borrowing under the ABL. 2028 Convertible Senior Notes In December 2022, the Company issued $ 287,500 aggregate principal amount of 2.375 % Convertible Senior Notes (the “2028 Convertible Notes”). Net proceeds have been used, and are expected to be used, for capital expenditures, permitted acquisitions, working capital and general corporate purposes of the Company. The 2028 Convertible Notes bear interest of 2.375 % per annum payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023. The initial conversion price is approximately $ 44.27 per share together with cash in lieu of any fractional share. The conversion price is subject to adjustments upon the occurrence of certain events. The 2028 Convertible Notes will mature on December 15, 2028, unless earlier converted or repurchased in accordance with their terms. Before September 15, 2028, holders of the 2028 Convertible Notes will have the right to convert only upon the occurrence of certain events. From and after September 15, 2028, holders may convert at any time at their election until the close of business on the scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. In addition, if the Company undergoes a fundamental change, as described in the 2028 Indenture, holders may require the Company to repurchase for cash all or part of their 2028 Convertible Notes at a repurchase price equal to 100 % of the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the required repurchase date. 2024 Convertible Senior Notes On December 1, 2024, the Company’s 1.875 % 2024 Convertible Senior Notes matured and, in accordance with the exercise of its conversion rights provisions, the Company issued 858,360 shares of its common stock and paid approximately $ 2,117 , which included accrued interest on the 2024 Convertible Notes. Italco Unsecured Note In connection with the Italco acquisition, the Company issued a $ 11,000 unsecured note bearing interest of 4.5 %, at an original issue discount of $ 300 . The principal on the unsecured note is due in two equal installments on October 1, 2026 and 2027 and is presented under the caption “Finance leases and other financing obligations” in the table above. GreenLeaf Unsecured Note In connection with the GreenLeaf acquisition, the Company issued a $ 10,000 unsecured note that matured on April 20, 2025. The first installment of the principal on the unsecured note of $ 5,000 was paid in April 2024, and the second installment was paid on maturity. The unsecured note at December 27, 2024 is presented under the caption “Finance leases and other financing obligations” in the table above. Convertible Unsecured Note In 2019, as partial consideration for an acquisition, the Company issued a $ 4,000 convertible unsecured note that matured on June 29, 2023. The unsecured note and was repaid in full, including all accrued interest, for $ 4,049 in cash. 66 Convertible Notes The net carry value of the Company’s 2028 convertible senior notes as of December 26, 2025 and December 27, 2024 was: December 26, 2025 December 27, 2024 Principal Amount Unamortized Deferred Costs and Premium Net Amount Principal Amount Unamortized Deferred Costs and Premium Net Amount 2028 Convertible Notes $ 287,500 $ ( 3,438 ) $ 284,062 $ 287,500 $ ( 4,584 ) $ 282,916 The components of interest expense on the Company’s convertible notes were as follows: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Coupon interest $ 6,828 $ 7,572 $ 7,578 Amortization of deferred costs and premium 1,146 1,332 1,334 Total interest $ 7,974 $ 8,904 $ 8,912 Note 10 – Stockholders’ Equity Warrants In connection with an acquisition during fiscal 2022, the Company issued warrants with a fair value of $ 1,701 to purchase up to 150,000 shares of the Company’s common stock at an exercise price of $ 31.55 per share. The warrants have been fully exercised and there are no warrants outstanding as of December 26, 2025. 2023 Employee Stock Purchase Plan In fiscal 2023, the Company’s stockholders adopted the Company’s Employee Stock Purchase Plan (the “ESPP”), which permits eligible employees to purchase a total of approximately 793,000 shares of the Company’s common stock through payroll deductions of up to 10 % of eligible compensation. The purchase price of the shares will be 85 % of the fair market value of the common stock on the date of purchase. The plan does not include any look-back or reset provisions. The offering periods run bi-annually from January 1st to June 30th and July 1st to December 31st. At December 26, 2025, there were approximately 731,000 shares of common stock available for issuance under the ESPP. The ESPP did not have a material impact on the Company’s consolidated financial statements in the fiscal years presented. The Company may amend, suspend or terminate the ESPP at any time. Equity Incentive Plan On May 17, 2019, the Company’s stockholders approved the 2019 Omnibus Equity Incentive Plan (the “2019 Plan”). The purpose of the 2019 Plan is to promote the interests of the Company and its stockholders by (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its Subsidiaries and Affiliates; (ii) motivating such individuals by means of performance-related incentives to achieve long-range performance goals; (iii) enabling such individuals to participate in the long-term growth and financial success of the Company; (iv) encouraging ownership of stock in the Company by such individuals; and (v) linking their compensation to the long-term interests of the Company and its stockholders. The 2019 Plan is administered by the Compensation and Human Capital Committee (the “Committee”) of the Board of Directors and allows for the issuance of stock options, stock appreciation rights (“SARs”), RSAs, RSUs, performance awards, or other stock-based awards. Stock option exercise prices are fixed by the Committee but shall not be less than the fair market value of a common share on the date of the grant of the option, except in the case of substitute awards. Similarly, the grant price of an SAR may not be less than the fair market value of a common share on the date of the grant. The Committee will determine the expiration date of each stock option and SAR, but in no case shall the stock option or SAR be exercisable after the expiration of 10 years from the date of the grant. The 2019 Plan provides for 4,230,000 shares available for grant. As of December 26, 2025, there were 1,543,550 shares available for grant. 67 Stock compensation expense was $ 21,242 , $ 17,778 and $ 20,042 for the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023, respectively. The related tax (benefit) expense for stock-based compensation was $( 3,570 ), $( 211 ) and $ 580 for the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023, respectively. The following table reflects the activity of RSAs and RSUs during the fiscal year ended December 26, 2025: Time-Based Performance-Based Market-Based Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested at December 27, 2024 483,284 $ 35.68 881,500 $ 34.79 303,036 $ 30.04 Granted 219,968 63.35 740,294 63.03 35,101 61.16 Vested ( 217,915 ) 35.02 ( 164,601 ) 32.47 ( 162,351 ) 29.12 Forfeited ( 14,471 ) 42.05 ( 149,880 ) 33.52 — — Unvested at December 26, 2025 470,866 $ 48.71 1,307,313 $ 51.22 175,786 $ 37.10 The fair value of RSAs and RSUs vested during the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023, was $ 17,173 , $ 18,370 and $ 7,170 , respectively. The Company granted 995,363 RSAs and RSUs to its employees and directors at a weighted average grant date fair value of $ 63.04 during the fiscal year ended December 26, 2025. These awards are a mix of time-, market- and performance-based grants awarded to key employees and non-employee directors that generally vest over a range of periods up to five years . The market- and performance-based RSAs and RSUs generally cliff vest, if at all, after the conclusion of a three-year performance period and vesting is subject to the award recipient’s continued service to the Company as of the vesting date. The number of performance-based RSAs and RSUs that ultimately vest is based on the Company’s attainment of certain profitability and return on invested capital targets. At December 26, 2025, the total unrecognized compensation cost for the unvested RSAs and RSUs was $ 25,769 to be recognized over a weighted-average period of approximately 1.7 years. Of this total, $ 15,024 related to awards with time-based vesting provisions to be recognized over a weighted average period of 1.6 years and $ 10,745 related to awards with performance- or market-based vesting provisions to be recognized over a weighted average period of 1.7 years. The following table summarizes stock option activity during the fiscal year ended December 26, 2025: Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Outstanding December 27, 2024 100,876 $ 20.23 $ 2,870 1.1 Outstanding December 26, 2025 100,876 $ 20.23 $ 4,368 0.2 Exercisable at December 26, 2025 100,876 $ 20.23 $ 4,368 0.2 The total intrinsic value of options exercised during fiscal 2024 and 2023 was $ 194 and $ 22 , respectively. There were no option exercises in fiscal 2025. The Company issues new shares upon the exercise of stock options. No stock option expense was recognized during the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023. In connection with an acquisition, the Company issued stock awards to certain members of the acquiree’s management team which were classified as liabilities. These awards vest over a period of up to four years . Stock-based compensation expense for these awards was $ 2,634 , $ 2,175 and $ 2,175 during the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023, respectively. As of December 26, 2025 and December 27, 2024, the fair value of these awards was $ 7,347 and $ 4,712 , respectively, and they are presented within accrued liabilities on the Company’s consolidated balance sheets. Performance-Based Restricted Share Units In February 2025, the Company’s Board of Directors approved a grant of a total of 541,375 PRSUs to certain of the Company’s officers and employees under the Company’s 2019 Plan. These grants are included in the performance-based column of the RSAs and RSUs activity table above. The PRSUs, which have a four-year term from the date of grant, are subject to service and 68 performance conditions and will only become vested and payable to the extent that a qualifying change in control occurs during the four-year period. The fair value of these awards was $ 22,235 , which was determined using a Monte Carlo simulation in order to model a range of possible future stock prices for the Company’s common stock. No share-based compensation expense has been recorded in fiscal 2025 for these PRSUs. Share Repurchase Program In November 2023, the Company announced a two-year share repurchase program in an amount up to $ 100,000 . The share repurchase program ended in December 2025 with a total of 667,433 shares of the Company’s common stock repurchased for $ 32.4 million. Note 11 – Leases The components of net lease cost were as follows: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Operating lease cost $ 46,337 $ 40,782 $ 40,523 Finance lease cost: Amortization of right-of-use asset 17,886 8,065 4,173 Interest expense on lease liabilities 5,893 2,233 726 Total finance lease cost $ 23,779 $ 10,298 $ 4,899 Short-term lease cost 12,081 14,052 12,535 Variable lease cost 9,239 17,488 13,718 Sublease income ( 1,973 ) ( 1,160 ) ( 1,970 ) Total lease cost, net $ 89,463 $ 81,460 $ 69,705 The maturities of the Company’s lease liabilities for each of the next five fiscal years and thereafter at December 26, 2025 were as follows: Operating Leases Finance Leases Related Party Real Estate Third-Party Real Estate Vehicles and Equipment Total Vehicles and Equipment 2026 $ 725 $ 34,551 $ 5,122 $ 40,398 $ 26,774 2027 752 31,933 4,177 36,862 25,492 2028 580 29,715 3,485 33,780 24,584 2029 — 29,695 2,521 32,216 22,388 2030 — 28,386 1,795 30,181 17,734 Thereafter — 146,249 572 146,821 12,303 Total $ 2,057 $ 300,529 $ 17,672 $ 320,258 $ 129,275 Less imputed interest ( 93,884 ) ( 20,824 ) Present value of lease obligations $ 226,374 $ 108,451 Supplemental balance sheet information related to finance leases was as follows: Balance Sheet Location December 26, 2025 December 27, 2024 Short-term finance lease liabilities Current portion of long-term debt $ 19,554 $ 10,040 Long-term finance lease liabilities Long-term debt, net of current portion $ 88,897 $ 37,633 At December 26, 2025, the weighted-average lease term for operating and finance leases was 9.6 years and 5.2 years, respectively. At December 26, 2025, the weighted-average discount rate for operating and finance leases was 7.5 %. 69 Note 12 – Income Taxes The components of the Company’s income before income taxes consist of the following: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Domestic $ 78,902 $ 59,023 $ 40,171 Foreign 24,640 20,509 15,298 Total $ 103,542 $ 79,532 $ 55,469 The provision for income taxes consists of the following: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Current income tax expense: Federal $ 14,787 $ 13,420 $ 9,913 Foreign 3,422 2,488 838 State 6,439 6,681 2,014 Total current income tax expense 24,648 22,589 12,765 Deferred income tax expense (benefit): Federal 4,008 4,712 4,320 Foreign 332 ( 2,173 ) ( 48 ) State 2,193 ( 1,075 ) 3,842 Total deferred income tax expense 6,533 1,464 8,114 Total income tax expense $ 31,181 $ 24,053 $ 20,879 The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework under Pillar Two which includes a global corporate minimum tax rate of 15%. Some jurisdictions in which the Company operates have started to enact laws implementing Pillar Two, including Canada which enacted the rule in June 2024. The rules did not have a material impact on its consolidated financial statements in fiscal 2025 or 2024. The Company is monitoring any future developments. As a result of a five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Company carried back its 2020 federal income tax loss, which resulted in an income tax refund receivable of $ 27,140 and $ 25,945 as of December 26, 2025 and December 27, 2024, respectively. The receivable is reflected in prepaid expenses and other current assets on the Company’s consolidated balance sheets. The IRS is experiencing significant processing delays driven by an increase in net operating loss carryback requests as a result of the CARES Act, along with other factors. As a result, the processing and expected receipt of the federal income tax refund receivable has been significantly delayed. The Company is currently working with IRS Taxpayer’s Advocate Services and consultants to resolve the processing issue. While progress has been made with the IRS and the Company expects to receive the refunds within one year, the exact timing of receipt is difficult to predict. On July 4, 2025, the United States enacted tax legislation through H.R.1, also referred to as the One Big Beautiful Bill Act (“OBBBA”). OBBBA did not have a material impact on the Company’s 2025 annual effective tax rate, but impacted the split between current taxes payable and deferred taxes. 70 Income tax expense differed from amounts computed using the statutory federal income tax rate due to the following reasons: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Amount Percent Amount Percent Amount Percent U.S. federal statutory income tax $ 21,744 21.0 % $ 16,702 21.0 % $ 11,648 21.0 % Domestic federal reconciling items Nontaxable and nondeductible items, net Compensation limitation 4,276 4.1 % 2,565 3.2 % 4,040 7.3 % Stock compensation ( 2,725 ) ( 2.6 ) % ( 212 ) ( 0.3 ) % 913 1.6 % Charitable contributions 1,142 1.1 % ( 156 ) ( 0.2 ) % 467 0.8 % Cross-border taxes Net controlled foreign corporation tested income (“NCTI”), formerly known as Global Intangible Low-Taxed Income (“GILTI”) 688 0.7 % 28 — % 642 1.2 % Impact of foreign branches taxed in the U.S. ( 161 ) ( 0.2 ) % 1,776 2.2 % 277 0.5 % Other 830 0.8 % 1,320 1.7 % 559 1.0 % Domestic state and local income taxes, net of federal effect (1) 6,807 6.5 % 6,022 7.6 % 4,755 8.6 % Foreign reconciling items United Arab Emirates Rate differential ( 1,380 ) ( 1.3 ) % ( 1,261 ) ( 1.6 ) % ( 1,812 ) ( 3.3 ) % Other 459 0.4 % ( 31 ) — % 109 0.2 % Canada Rate change — — % — — % ( 869 ) ( 1.6 ) % Change in valuation allowance — — % ( 2,045 ) ( 2.6 ) % 729 1.3 % Other 162 0.2 % 79 0.1 % ( 137 ) ( 0.2 ) % Other foreign jurisdictions ( 661 ) ( 0.6 ) % ( 734 ) ( 0.9 ) % ( 442 ) ( 0.8 ) % Income tax expense $ 31,181 30.1 % $ 24,053 30.2 % $ 20,879 37.6 % (1) The states and local jurisdictions that contribute more than 50% of the tax effect in this category include New York State and New York City, California for fiscal 2025 and 2024 and Massachusetts for fiscal 2023. 71 Deferred tax assets and liabilities at December 26, 2025 and December 27, 2024 consist of the following: December 26, 2025 December 27, 2024 Deferred tax assets: Receivables and inventory $ 13,311 $ 11,753 Self-insurance reserves 6,267 4,819 Net operating loss carryforwards 2,186 3,171 Interest expense carryforward 11,066 16,955 Stock compensation 5,693 4,416 Intangible assets 6,059 4,006 Operating lease liabilities 59,829 54,272 Other 1,153 329 Total deferred tax assets 105,564 99,721 Deferred tax liabilities: Property & equipment ( 27,504 ) ( 23,627 ) Goodwill ( 39,127 ) ( 34,861 ) Intangible assets ( 2,621 ) ( 2,956 ) Prepaid expenses and other ( 4,484 ) ( 4,647 ) Operating lease right-of-use assets ( 54,252 ) ( 49,521 ) Total deferred tax liabilities ( 127,988 ) ( 115,612 ) Valuation allowance — — Total net deferred tax liability $ ( 22,424 ) $ ( 15,891 ) The deferred tax provision results from the effects of net changes during the year in deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company files Federal and various state and local income tax returns in the U.S and various foreign jurisdictions. For Federal income tax purposes, the 2022 through 2025 tax years remain open for examination. For state tax purposes, the 2021 through 2025 tax years remain open for examination. For foreign income tax purposes, the 2015 through 2025 tax years remain open for examination. The Company records interest and penalties, if any, in income tax expense. The Company’s Canada tax-effected net operating loss carryforward of $ 1,163 expires at various dates between fiscal 2037 and 2043. The Company’s state tax-effected net operating loss carryforward of $ 1,023 expires at various dates, the earliest of which expire in fiscal 2028, while others are indefinite-lived. The Company is permanently reinvesting the earnings of its foreign operations. The accumulated undistributed earnings of its foreign subsidiaries are immaterial, as a majority of such earnings have been taxed in the U.S. As of December 26, 2025 and December 27, 2024, the Company did not have any material uncertain tax positions. See Note 14 - Supplemental Disclosures of Cash Flow Information for income taxes paid. Note 13 – Segment Information The Company’s business consists of three operating segments: East, Midwest and West that aggregate into one reportable segment, foodservice distribution, which is concentrated primarily in the United States. The accounting policies of the foodservice distribution segment are the same as those described in Note 2 – Summary of Significant Accounting Policies. The Company’s chief operating decision maker, who is the Company’s chief executive officer, uses gross profit as the measure of profit or loss to assess segment performance and allocate resources. Consolidated gross profit, reported on the statement of operations and comprehensive income, is used to evaluate whether to reinvest profits into the foodservice distribution segment or into other parts of the entity, such as for acquisitions or to repurchase its common shares. Additionally, gross profit is used to monitor budget versus actual results and in competitive 72 analysis by benchmarking to the Company’s competitors. Consolidated total assets, reported on the balance sheet, is the measure of segment assets. The following table presents information about the Company’s foodservice distribution segment: Fiscal Years Ended December 26, 2025 December 27, 2024 December 29, 2023 Net sales (1) : United States $ 3,757,901 $ 3,454,355 $ 3,150,871 International 391,636 339,857 282,892 Total net sales $ 4,149,537 $ 3,794,212 $ 3,433,763 Less: Cost of sales - non-production costs (2) 3,075,675 2,805,332 2,550,995 Cost of sales - food processing costs (3)(4) 69,772 74,733 68,294 Cost of sales 3,145,447 2,880,065 2,619,289 Gross profit $ 1,004,090 $ 914,147 $ 814,474 (1) The Company’s revenue is disaggregated by geographic area based on sales office location. No country outside of the United States had revenue greater than 10% of consolidated revenue for the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023. (2) Non-production costs represent the net purchase price paid for products sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Non-production costs include purchase incentives and product purchase credits from certain vendors. (3) Food processing costs include but are not limited to, direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities. (4) Food processing costs included $ 1,011 , $ 1,240 and $ 1,466 of depreciation expense for the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023, respectively. Refer to the consolidated statements of operations and comprehensive income for the reconciliation of consolidated gross profit, which is the Company’s segment measure of profit or loss, to consolidated income before income taxes. 73 Note 14 – Supplemental Disclosures of Cash Flow Information December 26, 2025 December 27, 2024 December 29, 2023 Cash paid for income taxes, net of cash received: U.S. Federal $ 14,023 $ 13,737 $ 13,308 U.S. state and local: California * * 1,482 New York state 1,121 * 1,073 New York city 1,273 * * Other state and local 3,990 4,475 2,598 Total U.S. state and local 6,384 4,475 5,153 Foreign: United Arab Emirates 1,235 * * Other foreign 1,264 943 899 Total foreign 2,499 943 899 Cash paid for income taxes, net of cash received $ 22,906 $ 19,155 $ 19,360 Cash paid for interest $ 38,491 $ 42,756 $ 42,070 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 38,705 $ 39,051 $ 38,471 Operating cash flows from finance leases 6,055 2,240 730 ROU assets obtained in exchange for lease liabilities: Operating leases $ 39,569 $ 26,058 $ 65,601 Finance leases 84,755 33,580 13,431 Non-cash investing and financing activities: Conversion of debt into common stock $ — $ 37,938 $ — Common stock issued for acquisitions 300 — 2,496 Contingent earn-out liabilities for acquisitions 1,350 — 5,765 Unsecured notes issued for acquisitions 10,700 — 10,000 * The amount of income tax paid during the period does not meet the 5% disaggregation threshold. Note 15 – Employee Benefit Plans Employee Tax-Deferred Savings Plan The Company sponsors a defined contribution plan covering substantially all full-time employees (the “401(k) Plan”) that provides tax-deferred salary deductions for eligible employees. Employees choose to make voluntary contributions of their annual compensation to the 401(k) Plan, limited to an annual maximum amount as set periodically by the Internal Revenue Service. The Company provides discretionary matching contributions equal to 50 percent of the employee’s contribution amount, up to a maximum of six percent of the employee’s annual salary, or the annual compensation limit set by the Internal Revenue Service, whichever is lower. Matching contributions begin vesting after one year and are fully vested after five years . Employee contributions are fully vested when made. Under the 401(k) Plan, participants are not able to receive or purchase the Company’s common stock. Matching contributions under the 401(k) Plan were $ 4,159 , $ 4,378 and $ 3,500 , respectively, for fiscal 2025, 2024 and 2023. Note 16 – Commitments and Contingencies Legal Contingencies The Company is involved in various legal proceedings. The Company establishes reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also identified certain other legal matters where the Company believes an unfavorable outcome is reasonably 74 possible and/or for which no estimate of possible losses can be made. The Company does not believe that there is a reasonable possibility of material loss or loss in excess of the amount that the Company has accrued. The Company recognizes legal fees related to any ongoing legal proceeding as incurred. Audits The Company is involved in various matters, with respect to some of which the outcome is uncertain. These audits may result in the assessment of additional taxes or other costs that are subsequently resolved with authorities or potentially through the courts. Risk Management Programs The Company’s self-insurance reserves for its medical program totaled $ 2,578 and $ 2,540 at December 26, 2025 and December 27, 2024, respectively. The Company’s self-insurance reserves for its automobile liability program totaled $ 11,622 and $ 8,833 at December 26, 2025 and December 27, 2024, respectively. Self-insurance reserves for workers’ compensation totaled $ 21,808 and $ 16,888 at December 26, 2025 and December 27, 2024, respectively. These self-insurance reserves are reflected within accrued liabilities on the Company’s consolidated balance sheets. Workforce As of December 26, 2025, approximately 1 % of the Company’s employees are represented by unions, all of whom are operating under collective bargaining agreements which expire at various times between fiscal 2027 and 2028. Note 17 – Valuation Reserves The following tables summarize the activity in the Company’s valuation accounts during the fiscal years ended December 26, 2025, December 27, 2024 and December 29, 2023: Balance at Beginning of Period Additions Charged to Expense Deductions (1) Balance at End of Period Allowance for credit losses December 26, 2025 $ 22,341 $ 12,118 $ ( 7,494 ) $ 26,965 December 27, 2024 21,423 11,982 ( 11,064 ) 22,341 December 29, 2023 20,733 8,078 ( 7,388 ) 21,423 Balance at Beginning of Period Additions Charged to Expense Deductions Balance at End of Period Allowance for deferred tax assets December 26, 2025 $ — $ — $ — $ — December 27, 2024 2,119 — ( 2,119 ) — December 29, 2023 1,641 478 — 2,119 (1) With respect to the allowance for credit losses, the deductions amount are primarily composed of write-offs, less recoveries which are not material. 75 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.