What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-10-31 compared with 2024-08-01 · 71 added, 72 removed, 129 unchanged (53% of the section changed)

12 unchanged sentences

Critical Accounting Policies and Estimates

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of June 29, 2024 remain unchanged from December 30, 2023.

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of September 28, 2024 remain unchanged from December 30, 2023.

Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023, filed with the SEC on February 29, 2024 (the “2023 Form 10-K”) for details on these critical accounting policies.

1 unchanged sentence

There are no recent accounting standards that impact the unaudited condensed consolidated financial statements.

Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended June 29, 2024, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended July 1, 2023

Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended September 28, 2024, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended September 30, 2023

The following table provides operating information as a percentage of revenues for the periods indicated:

1 unchanged sentence

Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Revenues 100.0 % 100.0 % 100.0 % 100.0 %

8 unchanged sentences

Net income 6.8 % 5.8 % 6.2 % 5.8 %

Fiscal Quarter Ended June 29, 2024, Compared to the Fiscal Quarter Ended July 1, 2023

Revenues increased by $9.4 million, or 5.9%, to $171.4 million for the second quarter of fiscal 2024 from $162.0 million for the second quarter of fiscal 2023.

Utilization increased to 74% for the second quarter of fiscal 2024 from 72% for the second quarter of fiscal 2023, while consultant headcount decreased from 971 at the end of the second quarter of fiscal 2023 to 968 at the end of the second quarter of fiscal 2024.

Fiscal Quarter Ended September 28, 2024, Compared to the Fiscal Quarter Ended September 30, 2023

Revenues increased by $20.1 million, or 13.6%, to $167.7 million for the third quarter of fiscal 2024 from $147.6 million for the third quarter of fiscal 2023.

Utilization increased to 76% for the third quarter of fiscal 2024 from 66% for the third quarter of fiscal 2023, while consultant headcount decreased from 1,014 at the end of the third quarter of fiscal 2023 to 978 at the end of the third quarter of fiscal 2024.

Overall, revenues outside of the U.S.

represented approximately 19% and 22% of net revenues for the second quarters of fiscal 2024 and fiscal 2023, respectively.

Revenues derived from fixed-price projects remained unchanged at 17% of net revenues for the second quarter of fiscal 2024 compared with the second quarter of fiscal 2023.

represented approximately 19% and 20% of net revenues for the third quarters of fiscal 2024 and fiscal 2023, respectively.

Revenues derived from fixed-price projects remained unchanged at 18% of net revenues for the third quarter of fiscal 2024 compared with the third quarter of fiscal 2023.

The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization).

Costs of services (exclusive of depreciation and amortization) increased by $12.0 million, or 10.6%, to $125.3 million for the second quarter of fiscal 2024 from $113.3 million for the second quarter of fiscal 2023.

The increase in costs of services was due to an increase in employee and incentive compensation of $8.3 million attributable to salaries and benefits and an increase in forgivable loan amortization of $4.7 million, partially offset by a decrease in client reimbursable expenses of $0.9 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 73.1% for the second quarter of fiscal 2024 from 70.0% for the second quarter of fiscal 2023.

Costs of services (exclusive of depreciation and amortization) increased by $9.3 million, or 8.8%, to $115.2 million for the third quarter of fiscal 2024 from $105.9 million for the third quarter of fiscal 2023.

The increase in costs of services was due to an increase in employee and incentive compensation of $10.6 million and an increase in forgivable loan amortization of $0.5 million, partially offset by a decrease in client reimbursable expenses of $1.8 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 68.7% for the third quarter of fiscal 2024 from 71.8% for the third quarter of fiscal 2023.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $2.2 million, or 7.3%, to $32.0 million for the second quarter of fiscal 2024 from $29.8 million for the second quarter of fiscal 2023.

Within this category of expenses, there was a $1.1 million increase in employee and incentive compensation, an $0.7 million increase in travel and entertainment, a $0.4 million decrease in bad debt expense, and a $0.8 million increase in miscellaneous and other fees for the second quarter of fiscal 2024 as compared to the second quarter of fiscal 2023.

As a percentage of revenues, selling, general and administrative expenses increased to 18.7% for the second quarter of fiscal 2024 from 18.4% for the second quarter of fiscal 2023.

Commissions to our non-employee experts decreased to 2.2% of revenues for the second quarter of fiscal 2024 compared to 2.3% of revenues the second quarter of fiscal 2023.

Selling, general and administrative expenses increased by $3.4 million, or 12.2%, to $31.3 million for the third quarter of fiscal 2024 from $27.9 million for the third quarter of fiscal 2023.

Within this category of expenses, there was a $1.5 million increase in employee and incentive compensation, a $1.1 million increase in software subscription and data services, a $0.7 million increase in rent expense, a $0.4 million increase in training and marketing expense, and a $0.1 million increase in miscellaneous and other fees partially offset by a $0.4 million decrease in travel and entertainment for the third quarter of fiscal 2024 as compared to the third quarter of fiscal 2023.

As a percentage of revenues, selling, general and administrative expenses decreased to 18.6% for the third quarter of fiscal 2024 from 18.9% for the third quarter of fiscal 2023.

Commissions to our non-employee experts remained unchanged at 2.4% of revenues for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023.

Provision for Income Taxes.

The income tax provision was $3.1 million and the effective tax rate ("ETR") was 32.0% for the second quarter of fiscal 2024 compared to $4.1 million and 30.1% for the second quarter of fiscal 2023.

The ETR for the current fiscal quarter was higher than the prior year fiscal quarter primarily due to increases in estimated state apportionment and nondeductible executive compensation and a decrease in the U.S.

benefit associated with the foreign-derived intangible income (“FDII”) deduction, partially offset by having had a valuation allowance in the prior year that has now reversed.

The ETR for the second quarter of fiscal 2024 and 2023 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the FDII.

Net income decreased to $6.5 million for the second quarter of fiscal 2024 from $9.5 million for the second quarter of fiscal 2023.

The net income per diluted share was $0.94 per share for the second quarter of fiscal 2024, compared to $1.34 of net income per diluted share for the second quarter of fiscal 2023.

Weighted average diluted shares outstanding decreased by approximately 169,000 shares to approximately 6,911,000 shares for the second quarter of fiscal 2024 from approximately 7,080,000 shares for the second quarter of fiscal 2023.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since July 1, 2023, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units and the exercise of stock options since July 1, 2023.

Fiscal Year-to-Date Period Ended June 29, 2024, Compared to the Fiscal Year-to-Date Period Ended July 1, 2023

Revenues increased by $28.4 million, or 9.0%, to $343.2 million for the fiscal year-to-date period ended June 29, 2024 from $314.8 million for the fiscal year-to-date period ended July 1, 2023.

Utilization increased to 74% for the fiscal year-to-date period ended June 29, 2024 from 71% for the fiscal year-to-date period ended July 1, 2023, while consultant headcount decreased from 971 at the end of the second quarter of fiscal 2023 to 968 at the end of the second quarter of fiscal 2024.

The income tax provision was $4.6 million and the effective tax rate ("ETR") was 28.7% for the third quarter of fiscal 2024 compared to $1.9 million and 18.3% for the third quarter of fiscal 2023.

The ETR for the fiscal quarter ended September 28, 2024 was higher than the fiscal quarter ended September 30, 2023 primarily due to the release of a valuation allowance in the third quarter of fiscal 2023, partially offset by an increase in the tax benefit related to share-based compensation.

Net income increased to $11.4 million for the third quarter of fiscal 2024 from $8.6 million for the third quarter of fiscal 2023.

The net income per diluted share was $1.67 per share for the third quarter of fiscal 2024, compared to $1.21 of net income per diluted share for the third quarter of fiscal 2023.

Weighted average diluted shares outstanding decreased by approximately 240,000 shares to approximately 6,843,000 shares for the third quarter of fiscal 2024 from approximately 7,083,000 shares for the third quarter of fiscal 2023.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since September 30, 2023, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units and the exercise of stock options since September 30, 2023.

Fiscal Year-to-Date Period Ended September 28, 2024, Compared to the Fiscal Year-to-Date Period Ended September 30, 2023

Revenues increased by $48.6 million, or 10.5%, to $511.0 million for the fiscal year-to-date period ended September 28, 2024 from $462.4 million for the fiscal year-to-date period ended September 30, 2023.

Utilization increased to 75% for the fiscal year-to-date period ended September 28, 2024 from 69% for the fiscal year-to-date period ended September 30, 2023, while consultant headcount decreased from 1,014 at the end of the third quarter of fiscal 2023 to 978 at the end of the third quarter of fiscal 2024.

Overall, revenues outside of the U.S.

represented approximately 18% and 22% of net revenues for the fiscal year-to-date periods ended June 29, 2024 and July 1, 2023, respectively.

Revenues derived from fixed-price projects remained unchanged at 17% of net revenues for the fiscal year-to-date periods ended June 29, 2024 and July 1, 2023.

The percentage of revenue

derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

represented approximately 18% and 22% of net revenues for the fiscal year-to-date periods ended September 28, 2024 and September 30, 2023, respectively.

Revenues derived from fixed-price projects remained unchanged at 18% of net revenues for the fiscal year-to-date periods ended September 28, 2024 and September 30, 2023.

percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization).

Costs of services (exclusive of depreciation and amortization) increased by $23.0 million, or 10.4%, to $244.2 million for the fiscal year-to-date period ended June 29, 2024 from $221.2 million for the fiscal year-to-date period ended July 1, 2023.

Costs of services (exclusive of depreciation and amortization) increased by $32.3 million, or 9.9%, to $359.4 million for the fiscal year-to-date period ended September 28, 2024 from $327.1 million for the fiscal year-to-date period ended September 30, 2023.

The increase in costs of services was due to an increase of $27.6 million in employee compensation and fringe benefit costs, an increase in forgivable loan amortization of $4.4 million, and an increase in client reimbursable expenses of $0.3 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 71.1% for the fiscal year-to-date period ended June 29, 2024 mainly due to $8.1 million of charges associated with portfolio optimization, from 70.3% for the fiscal year-to-date period ended July 1, 2023.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 70.3% for the fiscal year-to-date period ended September 28, 2024 from 70.7% for the fiscal year-to-date period ended September 30, 2023.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $4.3 million, or 7.4%, to $62.5 million for the fiscal year-to-date period ended June 29, 2024 from $58.2 million for the fiscal year-to-date period ended July 1, 2023.

Within this category of expenses, there was a $1.9 million increase in employee compensation and fringe benefit costs, a $0.6 million increase in travel and entertainment, a $0.6 million increase in software subscriptions, a $0.3 million increase in bad debt expense, a $0.2 million increase in rent expense, a $0.2 million increase in commissions to our non-employee experts, and a $0.5 million increase in miscellaneous and other fees for the fiscal year-to-date period ended June 29, 2024 as compared to the fiscal year-to-date period ended July 1, 2023.

As a percentage of revenues, selling, general and administrative expenses decreased to 18.2% for the fiscal year-to-date period ended June 29, 2024 from 18.5% for the fiscal year-to-date period ended July 1, 2023.

Commissions to our non-employee experts decreased to 2.2% of revenues for the fiscal year-to-date period ended June 29, 2024 compared to 2.3% of revenues for the fiscal year-to-date period ended July 1, 2023.

Selling, general and administrative expenses increased by $7.7 million, or 8.9%, to $93.8 million for the fiscal year-to-date period ended September 28, 2024 from $86.1 million for the fiscal year-to-date period ended September 30, 2023.

Within this category of expenses, there was a $3.5 million increase in employee compensation and fringe benefit costs, a $1.5 million increase in software subscriptions and data services, a $0.8 million increase in rent expense, a $0.6 million increase in commissions to our non-employee experts, a $0.4 million increase in training and marketing expense, and a $0.9 million increase in miscellaneous and other fees for the fiscal year-to-date period ended September 28, 2024 as compared to the fiscal year-to-date period ended September 30, 2023.

As a percentage of revenues, selling, general and administrative expenses decreased to 18.4% for the fiscal year-to-date period ended September 28, 2024 from 18.6% for the fiscal year-to-date period ended September 30, 2023.

Commissions to our non-employee experts decreased to 2.3% of revenues for the fiscal year-to-date period ended September 28, 2024 compared to 2.4% of revenues for the fiscal year-to-date period ended September 30, 2023.

Provision for Income Taxes.

The income tax provision was $8.4 million and the ETR was 29.3% for the fiscal year-to-date period ended June 29, 2024, compared to $7.8 million and 29.7% for the fiscal year-to-date period ended July 1, 2023.

The ETR for the current fiscal year-to-date period was lower than the prior fiscal year-to-date period primarily due to having had a valuation allowance in the prior year that has now reversed.

The ETR for the fiscal year-to-date periods ended June 29, 2024 and July 1, 2023 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit for share-based compensation and the FDII.

Net income increased by $1.8 million to $20.2 million for the fiscal year-to-date period ended June 29, 2024 from $18.4 million for the fiscal year-to-date period ended July 1, 2023.

The diluted net income per share was $2.90 for the fiscal year-to-date period ended June 29, 2024, compared to diluted net income per share of $2.56 for the fiscal year-to-date period ended July 1, 2023.

Weighted average diluted shares outstanding decreased by approximately 205,000 to approximately 6,961,000 shares for the fiscal year-to-date period ended June 29, 2024 from approximately 7,166,000 shares for the fiscal year-to-date period ended July 1, 2023.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since July 1, 2023, offset in part by the vesting of restricted stock and time-vesting restricted stock units and the exercise of stock options since July 1, 2023.

The income tax provision was $13.0 million and the ETR was 29.1% for the fiscal year-to-date period ended September 28, 2024, compared to $9.7 million and 26.4% for the fiscal year-to-date period ended September 30, 2023.

The ETR for the fiscal year-to-date period ended September 28, 2024 was higher than the fiscal year-to-date period ended September 30, 2023 primarily due to the release of a valuation allowance in the prior fiscal year-to-date period, partially offset by an increase in the tax benefit related to share-based compensation.

Net income increased by $4.7 million to $31.7 million for the fiscal year-to-date period ended September 28, 2024 from $27.0 million for the fiscal year-to-date period ended September 30, 2023.

The diluted net income per share was $4.57 for the fiscal year-to-date period ended September 28, 2024, compared to diluted net income per share of $3.78 for the fiscal year-to-date period ended September 30, 2023.

Weighted average diluted shares outstanding decreased by approximately 216,000 to approximately 6,922,000 shares for the fiscal year-to-date period ended September 28, 2024 from approximately 7,138,000 shares for the fiscal year-to-date period ended September 30, 2023.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since September 30, 2023, offset in part by the vesting of restricted stock and time-vesting restricted stock units and the exercise of stock options since September 30, 2023.

Liquidity and Capital Resources

Fiscal Year-to-Date Period Ended June 29, 2024

Fiscal Year-to-Date Period Ended September 28, 2024

We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months.

As of June 29, 2024, we had $24.6 million of cash and cash equivalents and $158.5 million of borrowing capacity under our revolving credit facility.

During the fiscal year-to-date period ended June 29, 2024, cash and cash equivalents decreased by $20.9 million.

As of September 28, 2024, we had $24.5 million of cash and cash equivalents and $135.9 million of borrowing capacity under our revolving credit facility.

During the fiscal year-to-date period ended September 28, 2024, cash and cash equivalents decreased by $21.1 million.

We completed the period with cash and cash equivalents of $24.5 million.

The principal drivers of the decrease of cash and cash equivalents was payment of a significant portion of our fiscal 2023 performance bonuses in the first and second quarters of fiscal 2024, forgivable loan advances, the repurchase of shares, and the payment of dividends, offset by net borrowings of $60.0 million.

At June 29, 2024, $5.6 million of our cash and cash equivalents was held within the U.S.

At September 28, 2024, $1.7 million of our cash and cash equivalents was held within the U.S.

We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility to fund U.S.

1 unchanged sentence

Sources and Uses of Cash.

During the fiscal year-to-date period ended June 29, 2024, net cash used in operating activities was $61.4 million.

Net income was $20.2 million for the fiscal year-to-date period ended June 29, 2024.

Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $64.5 million, primarily due to the payment of a significant portion of our fiscal 2023 performance bonuses and performance awards, an increase of $19.8 million in unbilled receivables, a $9.2 million decrease in lease liabilities, an increase in forgivable loans for the period of $6.1 million, which was primarily driven by $23.9 million of forgivable loan issuances, net of repayments, offset by $17.8 million of forgivable loan amortization, and a $3.8 million increase in prepaid expenses and other current assets.

Partially offsetting these uses of cash was an increase of $4.8 million in incentive cash awards payable and a decrease of $1.3 million in accounts receivable.

During the fiscal year-to-date period ended September 28, 2024, net cash used in operating activities was $29.7 million.

Net income was $31.7 million for the fiscal year-to-date period ended September 28, 2024.

Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $24.2 million, primarily due to the payment of a significant portion of our fiscal 2023 performance bonuses and performance awards, an increase of $23.3 million in unbilled receivables, a $12.2 million decrease in lease liabilities, an increase in forgivable loans for the period of $14.0 million, which was primarily driven by $38.1 million of forgivable loan issuances, net of repayments, offset by $24.1 million of forgivable loan amortization, a $10.3 million increase in prepaid expenses and other current assets, and an increase of $9.0 million in accounts receivable.

Partially offsetting these uses of cash was an increase of $7.3 million in incentive cash awards payable

Non-cash items included right-of-use amortization of $11.3 million, depreciation and amortization expense of $8.5 million, and share-based compensation expenses of $3.8 million.

During the fiscal year-to-date period ended June 29, 2024, net cash used in investing activities was $4.5 million, which included capital expenditures, primarily related to furniture and leasehold improvements.

During the fiscal year-to-date period ended June 29, 2024, net cash provided by financing activities was $45.7 million, primarily as a result of net borrowings under the revolving credit facility of $87.0 million.

During the fiscal year-to-date period ended September 28, 2024, net cash used in investing activities was $7.5 million, which included capital expenditures, primarily related to computer equipment.

During the fiscal year-to-date period ended September 28, 2024, net cash provided by financing activities was $15.8 million, primarily as a result of net borrowings under the revolving credit facility of $60.0 million.

Offsetting this increase in cash provided by financing activities were repurchases of common stock of $33.3 million, payment of cash dividends of $8.9 million, and tax withholding payments reimbursed by restricted shares on vesting of $2.0 million.

2 unchanged sentences

Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in other liabilities on our condensed consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows.

At June 29, 2024, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.1 million.

At September 28, 2024, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.1 million.

The remainder of our asset retirement obligations and redecoration obligations are approximately $3.2 million and are expected to be paid between fiscal year 2026 and fiscal year 2033 when the underlying leases terminate or when the respective lease agreement requires redecoration.

9 unchanged sentences

dollars, a rate based on Term SOFR (as defined in the Credit Agreement) for the applicable interest period, (iii) in the case of borrowings in Euros, EURIBOR (as defined in the Credit Agreement) for the applicable interest period, (iv) in the case of borrowings in Pounds Sterling, a daily rate based on SONIA (as defined in the Credit Agreement), (v) in the case of borrowings in Canadian Dollars, Term CORRA (as defined in the Credit Agreement) for the applicable interest period, (vi) in the case of borrowings in Swiss Francs, a daily rate based on SARON (as defined in the Credit Agreement), or (vii) in the case of borrowings in any other Alternate Currency (as defined in the Credit Agreement), the relevant daily or term rate determined as provided in the Credit Agreement.

The applicable margin on borrowings based on the Base Rate varies within a range of 0.25% to 1.00% depending on our consolidated net leverage

ratio, and the applicable margin on borrowings based on any of the other rates described above varies within a range of 1.25% to 2.00% depending on our consolidated net leverage ratio.

The applicable margin on borrowings based on the Base Rate varies within a range of 0.25% to 1.00% depending on our consolidated net leverage ratio, and the applicable margin on borrowings based on any of the other rates described above varies within a range of 1.25% to 2.00% depending on our consolidated net leverage ratio.

We are required to pay a fee on the amount available to be drawn under any letter of credit issued under the revolving credit facility at a rate per annum that varies between 1.25% and 2.00% depending on our consolidated net leverage ratio.

In addition, we are required to pay a fee on the unused portion of the revolving credit facility at a rate per annum that varies between 0.175% and 0.250% depending on our consolidated net leverage ratio.

addition, we are required to pay a fee on the unused portion of the revolving credit facility at a rate per annum that varies between 0.175% and 0.250% depending on our consolidated net leverage ratio.

Under the Credit Agreement, CRA must comply with various financial and non-financial covenants.

2 unchanged sentences

Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including CRA's failure to pay principal, interest or fees, or upon the breach of any covenant.

As of June 29, 2024, CRA was in compliance with the covenants of the Credit Agreement.

There was $87.0 million in borrowings outstanding under the revolving credit facility as of June 29, 2024 and no borrowings outstanding as of December 30, 2023.

As of June 29, 2024, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.5 million.

As of September 28, 2024, CRA was in compliance with the covenants of the Credit Agreement.

There was $60.0 million in borrowings outstanding under the revolving credit facility as of September 28, 2024 and no borrowings outstanding as of December 30, 2023.

As of September 28, 2024, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.1 million.

Forgivable Loans

21 unchanged sentences

To pay for an acquisition, we may use cash on hand, cash generated from our operations, borrowings available under our revolving credit facility, or we may pursue other forms of financing.

Our ability to secure short-term and long-term debt or equity financing in the future, including our ability to refinance our credit agreement,

will depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing revolving credit facility with our bank, and the overall credit and equity market environments.

Our ability to secure short-term and long-term debt or equity financing in the future, including our ability to refinance our credit agreement, will depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing revolving credit facility with our bank, and the overall credit and equity market environments.

Share Repurchases

In February 2024, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $35.0 million of our common stock.

In February 2024, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $35.0 million of our common stock, for a total authorized amount of $46.4 million.

We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

During the fiscal quarter and fiscal year-to-date period ended June 29, 2024, we repurchased and retired 140,497 and 206,379 shares, respectively, under our share repurchase program at an average price per share of $171.58 and $161.59, respectively.

During the fiscal quarter and fiscal year-to-date period ended July 1, 2023, we repurchased and retired 31,090 and 211,971 shares, respectively, under our share repurchase program at an average price per share of $96.49 and $111.23, respectively.

As of June 29, 2024, we had approximately $13.1 million available for future repurchases under our share repurchase program.

During the fiscal quarter ended September 28, 2024, we did not repurchase any shares under this share repurchase program.

For the fiscal year-to-date period ended September 28, 2024, we repurchased and retired 206,379 shares under our share repurchase program at an average price per share of $161.59.

During the fiscal quarter ended September 30, 2023, we did not repurchase any shares under this share repurchase program.

For the fiscal year-to-date period ended September 30, 2023, we repurchased and retired 211,971 shares under our share repurchase program at an average price per share of $111.23.

As of September 28, 2024, we had approximately $13.1 million available for future repurchases under our share repurchase program.

We plan to finance future repurchases with available cash, cash from future operations, and borrowings available under our revolving credit facility.

4 unchanged sentences

Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors.

During the fiscal quarter and fiscal year-to-date period ended June 29, 2024, we paid dividends and dividend equivalents of $2.9 million and $6.0 million, respectively.

During the fiscal quarter and fiscal year-to-date period ended July 1, 2023, we paid dividends and dividend equivalents of $2.5 million and $5.2 million, respectively.

During the fiscal quarter and fiscal year-to-date period ended September 28, 2024, we paid dividends and dividend equivalents of $2.9 million and $8.9 million, respectively.

During the fiscal quarter and fiscal year-to-date period ended September 30, 2023, we paid dividends and dividend equivalents of $2.5 million and $7.8 million, respectively.

Impact of Inflation

14 unchanged sentences

Many of the other above activities are discretionary in nature.

For example, capital expenditures can be deferred, acquisitions can be forgone, and share repurchase programs and regular

dividends can be suspended.

For example, capital expenditures can be deferred, acquisitions can be forgone, and share repurchase programs and regular dividends can be suspended.

As such, our operating model provides flexibility with respect to the deployment of cash flow from operations.

Given this flexibility, we believe that our cash flows from operations, supplemented by cash on hand and borrowings under our revolving credit facility (as necessary), will provide adequate cash to fund our long-term cash needs from normal operations for at least the next twelve months.

Given this flexibility, we believe that our cash flows from operations, supplemented by cash on hand and

borrowings under our revolving credit facility (as necessary), will provide adequate cash to fund our long-term cash needs from normal operations for at least the next twelve months.

Our conclusion that we will be able to fund our cash requirements by using existing capital resources and cash generated from operations does not take into account the impact of any future acquisition transactions or any unexpected significant changes in the number of employees or other expenditures that are currently not contemplated.

11 unchanged sentences

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our exposure to market risk during the fiscal quarter ended June 29, 2024.

There have been no material changes in our exposure to market risk during the fiscal quarter ended September 28, 2024.

For information regarding our exposure to certain market risks, see Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk” of our 2023 Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis