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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-01 · 84 added, 56 removed, 119 unchanged (54% of the section changed)

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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 March 29, 2025 remain unchanged from December 28, 2024.

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of June 28, 2025 remain unchanged from December 28, 2024.

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 28, 2024, filed with the SEC on February 20, 2025 for details on these critical accounting policies.

Recent Accounting Standards

Please refer to the section captioned "Recent Accounting Standards" in Note 1 of our Notes to Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

Results of Operations—For the Fiscal Quarter Ended March 29, 2025, Compared to the Fiscal Quarter Ended March 30, 2024

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 28, 2025, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended June 29, 2024

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

Fiscal Quarter

2025 March 30,

Ended Fiscal Year-to-Date

2025 June 29,

2024 June 28,

2025 June 29,

Revenues 100.0 % 100.0 % 100.0 % 100.0 %

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Net income 6.5 % 3.8 % 8.2 % 5.9 %

Fiscal Quarter Ended March 29, 2025, Compared to the Fiscal Quarter Ended March 30, 2024

Revenues increased by $10.1 million, or 5.9%, to $181.9 million for the first quarter of fiscal 2025 from $171.8 million for the first quarter of fiscal 2024.

Utilization increased to 76% for the first quarter of fiscal 2025 from 73% for the first quarter of fiscal 2024, while consultant headcoun t decreased to 947 at the end of the first quarter of fiscal 2025 from 997 at the end of the first quarter of fiscal 2024.

Fiscal Quarter Ended June 28, 2025, Compared to the Fiscal Quarter Ended June 29, 2024

Rev enues increased by $15.5 million, or 9.0%, to $186.9 million for the second quarter of fiscal 2025 from $171.4 million for the second quarter of fiscal 2024.

Utilization increased to 76% for the second quarter of fiscal 2025 from 74% for the second quarter of fiscal 2024, while consultant headcount decreased to 937 at the end of the second quarter of fiscal 2025 from 968 at the end of the second quarter of fiscal 2024.

Overall, revenues outside of the U.S.

represented approxim ately 18% a nd 17% of net revenues for the first quarters of fiscal 2025 and fiscal 2024, respectively.

Revenues derived from fixed-price project s decreased to 17% o f net revenues for the first quarter of fiscal 2025 compared to 18% of net revenues for the first quarter of fiscal 2024.

represented approxim ately 19% of net revenues for each of the second quarters of fiscal 2025 and fiscal 2024.

Revenues derived from fixed-price projects decreased to 16% of net revenues for the second quarter of fiscal 2025 compared to 17% of net revenues for the second quarter of fiscal 2024.

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 $1.5 million, or 1.3%, to $120.4 million for the first quarter of fiscal 2025 from $118.9 million for the first quarter of fiscal 2024.

The increase in costs of services was due to an increase in employee and incentive compensation of $6.8 million, an increase in external consultants indirect project expenses of $0.3 million, partially offset by a decrease in forgivable loan amortization of $5.0 million and a decrease in client reimbursable expenses of $0.6 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 66.2% f or the first quarter of fiscal 2025 from 69.2% for the first quarter of fiscal 2024.

Costs of services (exclusive of depreciation and amortization) increased by $3.2 million, or 2.6%, to $128.5 million for the second quarter of fiscal 2025 from $125.3 million for the second quarter of fiscal 2024.

T he increase in costs of services was due to an increase in employee and incentive compensation of $3.7 million , an increase in client reimbursable expenses of $3.3 million, and an increase in external consultants indirect project expenses of $0.4 million, partially offset by a decrease in forgivable loan amortization of $4.2 million .

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 68.8% for the second quarter of fiscal 2025 from 73.1% for the second quarter of fiscal 2024.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $2.0 million, or 6.6%, to $32.5 million for the first quarter of fiscal 2025 from $30.5 million for the first quarter of fiscal 2024.

Within this category of expenses, there was a $0.8 million increase in employee and incentive compensation, a $0.7 million increase in legal and professional service fees, a $0.5 million increase in rent expense, and a $0.3 million increase in travel and entertainment, partially offset by a $0.4 million decrease in training and marketing expense for the first quarter of fiscal 2025 as compared to the first quarter of fiscal 2024.

As a percentage of revenues, selling, general and administrative expenses increased to 17.9% for the first quarter of fiscal 2025 from 17.8% for the first quarter of fiscal 2024.

Commissions to our non-employee experts decreased to 2.0% of revenues for the first quarter of fiscal 2025 compared to 2.1% of revenues for the first quarter of fiscal 2024.

Selli ng, general and administrative expenses increased by $3.1 million, or 9.7%, to $35.1 million for the second quarter of fiscal 2025 from $32.0 million for the second quart er of fiscal 2024.

Within this category of expenses, there was a $0.9 million increase in lega l and professional service fees, a $0.8 million increase in c ommissions to non-employee experts, a $0.6 million increase in rent expense, a $0.4 million increase in tra vel and entertainment, and a $0.6 million increase in miscellaneous and other fees, par tially offset by a $0.2 million decrease in employee and incentive compensation for the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024.

As a percentage of revenues, selling, general and administrative expenses increased to 18.8% for the second quarter of fiscal 2025 from 18.7% for the second quarter of fiscal 2024.

Commissions to our non-employee experts increased to 2.4% of revenues for the second quarter of fiscal 2025 compared to 2.2% of revenues for the second quarter of fiscal 2024.

Prov ision for Income Taxes.

The in come tax provision was $5.0 million and the effective tax rate ("ETR") was 29.2% for the second quarter of fiscal 2025 compared to $3.1 million and 32.0% for the second quarter of fiscal 2024.

The ETR for the second quarter of fiscal 2025 was lower than the second quarter of fiscal 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year as well as a less significant ETR true-up adjustment in the current period compared to the second quarter of fiscal 2024 The impact of these items were partially offset by a tax reserve recognized in the estimated annual effective tax rate of fiscal 2025.

The ETR for the first quarter of fiscal 2025 and 2024 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 related to share-based compensation and the FDII deduction.

Net income increased to $12.1 million for the second quarter of fiscal 2025 from $6.5 million for the second quarter of fiscal 2024.

The net income per diluted share was $1.79 per share for the second quarter of fiscal 2025, compared to $0.94 of net income per diluted share for the second quarter of fiscal 2024.

Weighted average diluted shares outstanding decreased by approximately 158,000 shares to approximately 6,753,000 shares for the second quarter of fiscal 2025 from approximately 6,911,000 shares for the second quarter of fiscal 2024.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since June 29, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since June 29, 2024.

Fiscal Year-to-Date Period Ended June 28, 2025, Compared to the Fiscal Year-to-Date Period Ended June 29, 2024

Revenues increased by $25.5 million, or 7.4%, to $368.7 million for the fiscal year-to-date period ended June 28, 2025 from $343.2 million for the fiscal year-to-date period ended June 29, 2024.

Utilization increased to 76% for the fiscal year-to-date period ended June 28, 2025 from 74% for the fiscal year-to-date period ended June 29, 2024, while consultant headcount decreased from 968 at the end of the second quarter of fiscal 2024 to 937 at the end of the second quarter of fiscal 2025.

Overall, revenues outside of the U.S.

represented approximately 18% of net revenues for the fiscal year-to-date periods ended June 28, 2025 and June 29, 2024.

Revenues derived from fixed-price projects decreased to 16% of net revenues for the

fiscal year-to-date periods ended June 28, 2025 compared to 17% of net revenues for the second quarter of fiscal 2024.

Costs of Services (exclusive of depreciation and amortization).

Costs of services (exclusive of depreciation and amortization) increased by $4.7 million, or 1.9%, to $248.9 million for the fiscal year-to-date period ended June 28, 2025 from $244.2 million for the fiscal year-to-date period ended June 29, 2024.

The increase in costs of services was due to an increase of $10.5 million in employee compensation and fringe benefit costs, an increase of $2.7 million in client reimbursable expenses, and an increase of $0.7 million in external consultants indirect project expenses, partially offset by a decrease in forgivable loan amortization of $9.2 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 67.5% for the fiscal year-to-date period ended June 28, 2025 from 71.1% for the fiscal year-to-date period ended June 29, 2024.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $5.1 million, or 8.2%, to $67.6 million for the fiscal year-to-date period ended June 28, 2025 from $62.5 million for the fiscal year-to-date period ended June 29, 2024.

Within this category of expenses, there was a $1.8 million increase in lega l and professional service fees, $0.9 million increase in rent expense, a $0.8 million increase in commissions to our non-employee experts, $0.6 million increase in employee compensation and fringe benefit costs, a $0.6 million increase in travel and entertainment expense, and a $0.4 million increase in miscellaneous and other fees for the fiscal year-to-date period ended June 28, 2025 as compared to the fiscal year-to-date period ended June 29, 2024.

As a percentage of revenues, selling, general and administrative expenses increased to 18.3% for the fiscal year-to-date period ended June 28, 2025 from 18.2% for the fiscal year-to-date period ended June 29, 2024.

Commissions to our non-employee experts increased to 2.3% of revenues for the fiscal year-to-date period ended June 28, 2025 compared to 2.2% of revenues for the fiscal year-to-date period ended June 29, 2024.

Provision for Income Taxes.

The income tax provision was $6.6 million and the effective tax rate ("ETR") was 27.0% for the first quarter of fiscal 2025 compared to $5.3 million and 28.0% for the first quarter of fiscal 2024.

The ETR for the first quarter of fiscal 2025 was lower than the first quarter of fiscal 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year and an increase in the tax benefit related to share-based compensation.

Net income increased to $18.0 million for the first quarter of fiscal 2025 from $13.7 million for the first quarter of fiscal 2024.

The net income per diluted share was $2.62 per share for the first quarter of fiscal 2025, compared to $1.95 of net income per diluted share for the first quarter of fiscal 2024.

Weighted average diluted shares outstanding decreased by approximately 149,000 shares to approximately 6,862,000 shares for the first quarter of fiscal 2025 from approximately 7,011,000 shares for the first quarter of fiscal 2024.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since March 30, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since March 30, 2024.

The income tax provision was $11.6 million and the ETR was 27.9% for the fiscal year-to-date period ended June 28, 2025, compared to $8.4 million and 29.3% for the fiscal year-to-date period ended June 29, 2024.

The ETR for the fiscal year-to-date period ended June 28, 2025 was lower than the fiscal year-to-date period ended June 29, 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year and an increased benefit related to share-based compensation and the FDII deduction.

The impact of these items were partially offset by a tax reserve recognized in the estimated annual effective tax rate of fiscal 2025.

The ETR for the fiscal year-to-date periods ended June 28, 2025 and June 29, 2024 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 related to share-based compensation and the FDII deduction.

Net income increased by $9.9 million to $30.1 million for the fiscal year-to-date period ended June 28, 2025 from $20.2 million for the fiscal year-to-date period ended June 29, 2024.

The diluted net income per share was $4.42 for the fiscal year-to-date period ended June 28, 2025, compared to diluted net income per share of $2.90 for the fiscal year-to-date period ended June 29, 2024.

Weighted average diluted shares outstanding decreased by approximately 154,000 to approximately 6,807,000 shares for the fiscal year-to-date period ended June 28, 2025 from approximately 6,961,000 shares for the fiscal year-to-date period ended June 29, 2024.

Liquidity and Capital Resources

Fiscal Quarter Ended March 29, 2025

Fiscal Year-to-Date Period Ended June 28, 2025

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 March 29, 2025, we had $25.6 million of cash and cash equivalents and $161.1 million of borrowing capacity under our revolving credit facility.

During the fiscal quarter ended March 29, 2025, cash and cash equivalents decreased by $1.1 million.

As of June 28, 2025, we had $19.4 million of cash and cash equivalents and $126.5 million of borrowing capacity under our revolving credit facility.

During the fiscal year-to-date period ended June 28, 2025, cash and cash equivalents decreased by $7.3 million.

We completed the period with cash and cash equivalents of $19.4 million.

The principal drivers of the decrease of cash and cash

equivalents were the payment of a significant portion of our fiscal 2024 performance bonuses in the first quarter of fiscal 2025, forgivable loan advances, and the payment of dividends, offset by net borrowings of $85.0 million.

At March 29, 2025 , $2.4 million of our cash and cash equivalents was held within the U.S.

The principal drivers of the decrease of cash and cash equivalents were the payment of a significant portion of our fiscal 2024 performance bonuses in the first quarter of fiscal 2025, forgivable loan advances, repurchase of shares, and the payment of dividends, offset by net borrowings of $120.0 million.

At June 28, 2025, $5.2 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.

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Sources and Uses of Cash.

During the fiscal quarter ended March 29, 2025, net cash used in operating activities was $80.0 million.

Net income was $18.0 million for the fiscal quarter ended March 29, 2025.

Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $81.6 million, primarily due to the payment of a significant portion of our fiscal 2024 performance bonuses, an increase of $25.2 million in unbilled receivables, a $4.7 million decrease in lease liabilities, an increase in forgivable loans for the period of $20.2 million, which was primarily driven by $26.8 million of forgivable loan issuances, net of repayments, offset by $6.6 million of forgivable loan amortization, a $0.3 million decrease in prepaid expenses and other current assets, and other assets, and a decrease of $22.5 million in accounts receivable.

Partially offsetting these uses of cash was an increase of $2.8 million in incentive cash awards payable.

During the fiscal year-to-date period ended June 28, 2025, net cash used in operating activities was $74.1 million.

Net income was $30.1 million for the fiscal year-to-date period ended June 28, 2025.

Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $80.2 million, primarily due to the payment of a significant portion of our fiscal 2024 performance bonuses, an increase in forgivable loans for the period of $26.3 million which was primarily driven by $40.3 million of forgivable loan issuances, net of repayments, offset by $14.0 million of forgivable loan amortization, an increase of $16.5 million in unbilled receivables, a $9.4 million decrease in lease liabilities, and a $0.7 million increase in prepaid expenses and other current assets, and other assets.

Partially offsetting these uses of cash was an increase of $6.0 million in incentive cash awards payable and a decrease of $5.2 million in accounts receivable.

Non-cash items included right-of-use amortization of $7.7 million, depreciation and amortization expense of $6.9 million, and share-based compensation expenses of $2.4 million.

During the fiscal quarter ended March 29, 2025, net cash used in investing activities was $1.0 million, which consisted of capital expenditures, primarily related to computer equipment.

During the fiscal quarter ended March 29, 2025, net cash provided by financing activities was $79.0 million, primarily as a result of net borrowings under the revolving credit facility of $85.0 million.

Offsetting this increase in cash provided by financing activities were payment of cash dividends and dividend equivalents of $3.5 million, and tax withholding payments reimbursed by restricted shares of $2.5 million.

During the fiscal year-to-date period ended June 28, 2025, net cash used in investing activities was $2.2 million, which consisted of capital expenditures, primarily related to computer equipment.

During the fiscal year-to-date period ended June 28, 2025, net cash provided by financin g activities was $67.2 million, primarily as a result of net borrowings under the revolving credit facility of $120.0 million.

Offsetting this increase in cash provided by financing activities were repurchases of common stock of $43.2 million, payment of cash dividends and dividend equivalents of $6.8 million , and tax withholding payments reimbursed by restricted shares on vesting o f $2.8 million.

Lease Commitments

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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 deferred compensation and other non-current liabilities on our condensed consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows.

At March 29, 2025, we expect to incur no asset retirement obligation or redecoration obligation costs over the next twelve months.

At June 28, 2025, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.2 million.

The remainder of our asset retirement obligations and redecoration obligations are approximately $3.1 million and are expected to be paid between fiscal year 2026 and fiscal year 2035 when the underlying leases terminate or when the respective lease agreement requires redecoration.

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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.

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

As of March 29, 2025, we were in compliance with the covenants of the Credit Agreement.

There was $85.0 million in borrowings outstanding under the revolving credit facility as of March 29, 2025 and no borrowings outstanding as of December 28, 2024.

As of March 29, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.9 million.

As of June 28, 2025, we were in compliance with the covenants of the Credit Agreement.

There was $120.0 million in borrowings outstanding under the revolving credit facility as of June 28, 2025 and no borrowings outstanding as of December 28, 2024.

As of June 28, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.5 million.

Forgivable Loans

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A portion of these loans is collateralized by key person life insurance.

The forgivable loans have terms that are generally between two and six years.

The forgivable loans have terms that are generally between two and eight years.

The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements.

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Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.

Our long-term incentive program, or "LTIP," is used as a framework for equity grants made under our 2006 equity incentive plan to our senior corporate leaders, practice leaders, and key revenue generators.

Our long-term incentive program, or "LTIP," is used as a framework for equity grants made under our 2006 Equity Plan to our senior corporate leaders, practice leaders, and key revenue generators.

The equity awards granted under the LTIP include stock options, time-vesting restricted stock units, and performance-vesting restricted stock units.

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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 2025, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $45.0 million of our common stock.

In February 2025, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $45.0 million of our common stock to the $13.1 million then remaining under the program.

The program has no expiration date.

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 ended March 29, 2025, we did not repurchase any shares under this share repurchase program.

During the fiscal quarter ended March 30, 2024, we repurchased and retired 65,882 shares under our share repurchase program at an average price per share of $140.29.

We had approximately $58.1 million available for future repurchases under our share repurchase program as of March 29, 2025.

During the fiscal quarter and the fiscal year-to-date period ended June 28, 2025, we repurchased and retired 230,673 shares under our share repurchase program at an average price per share of $187.06.

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.

We had approximately $14.9 million available for future repurchases under our share repurchase program as of June 28, 2025.

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

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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 ended March 29, 2025, we paid dividends and dividend equivale nts of $3.5 million.

During the fiscal quarter ended March 30, 2024, we paid dividends and dividend equivalents of $3.1 million.

During the fiscal quarter and fiscal year-to-date period ended June 28, 2025, we paid dividends and dividend equivale nts of $3.4 million and $6.9 million, respectively.

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.

Impact of Inflation

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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.

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

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.

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Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our exposure to market risk during the fiscal quarter ended March 29, 2025.

There have been no material changes in our exposure to market risk during the fiscal quarter ended June 28, 2025.

For information regarding our exposure to certain market risks, see Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk” of our 2024 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