What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-06 · 99 added, 77 removed, 168 unchanged (51% of the section changed)

29 unchanged sentences

We are one of the leading aftermarket suppliers of parts that were traditionally available to professional installers and consumers only from original equipment, or OE, manufacturers, or salvage yards.

These parts include, among other parts, leaf springs, intake manifolds, exhaust manifolds, oil filters and coolers, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation (EGR) coolers, driveshafts, UTV windshields, and complex electronics modules.

These parts include, among others, leaf springs, intake manifolds, exhaust manifolds, oil filters and coolers, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation (EGR) coolers, driveshafts, UTV windshields, and complex electronics modules.

We generate most of our net sales from customers in North America, primarily in the United States.

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New Product Development

New product development is an important success factor for us and has been a source of our growth.

New product development is a key success factor for us and has been a significant contributor to our growth.

We have made incremental investments to increase our new product development efforts to grow our business and strengthen our relationships with our customers.

The investments primarily have been in the form of increased product development resources, increased customer and end-user awareness programs, and customer service improvements.

The investments primarily have been in the form of increased product development resources, additional customer and end-user awareness programs, and customer service improvements.

These investments have enabled us to

provide an expanding array of new product offerings and grow revenues at levels that generally have exceeded market growth rates.

In the three months ended March 29, 2025, we introduced 1,185 new distinct parts to our customers and end-users, including 492 “New-to-the-Aftermarket” parts.

In the six months ended June 28, 2025, we introduced 2,588 new distinct parts to our customers and end-users, including 914 “New-to-the-Aftermarket” parts.

We introduced 5,335 new distinct parts to our customers and end-users in the fiscal year ended December 31, 2024, including 1,659 “New-to-the-Aftermarket” parts.

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New vehicles contain an average of approximately 100 electronic modules, with some high-end luxury vehicles exceeding that.

Our complex electronics products are designed and developed in-house and tested to help ensure consistent performance, and our product portfolio is focused on further developing our leadership position in this category.

Our complex electronics products are designed and developed in-house and tested to help ensure consistent performance.

Our product portfolio is focused on further developing our leadership position in this category.

Another area of focus has been on products we market for the heavy-duty sector.

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A key component of our strategy is growth through acquisitions.

We may acquire businesses in the future to supplement our financial growth, increase our customer base, add to our distribution capabilities, or enhance our product development resources, among other reasons.

We may acquire businesses in the future to supplement our financial growth, expand our customer base, add to our distribution capabilities, or enhance our product development resources, among other reasons.

Industry Factors

The Company’s financial results are also impacted by various industry factors, including, but not limited to, the number, age, and condition of vehicles in operation at any one time, and the miles driven by those vehicles.

The Company’s financial results are also impacted by various industry factors, including, but not limited to, the number, age, and condition of vehicles in operation at any given time, and the miles driven by those vehicles.

Vehicles in Operation

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According to data from the Auto Care Association (“Auto Care”), the US SAAR experienced a decline from 2008 to 2011 as consumers purchased fewer new vehicles as a result of the Great Recession of 2008.

We believe that the declining US SAAR during that period resulted in a follow-on decline in our primary VIO subsegment (7-to-14-year-old vehicles) commencing in 2016.

We believe that the declining US SAAR during that period led to a follow-on decline in our primary VIO subsegment (7-to-14-year-old vehicles) commencing in 2016.

However, following 2011 and the impact of the Great Recession of 2008, U.S.

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We operate in a highly competitive market.

As a result, we are continuously evaluating our approach to brand, pricing, and terms to our different customers and channels.

As a result, we continuously evaluate our approach to branding, pricing, and terms for our various customers and channels.

For example, we maintain brand protection policies, which are designed to ensure that certain of our branded products are not advertised below certain approved pricing levels.

In addition, we may pursue legal remedies when we see third parties violating our intellectual property rights, including those that violate our patents, wrongfully represent our products as their own, or use our product images for their own marketing efforts.

In addition, we may pursue legal remedies when we observe third parties violating our intellectual property rights, including those that infringe on our patents, misrepresent our products as their own, or use our product images for their own marketing efforts.

Discounts, Allowances, and Incentives

We offer a variety of customer discounts, rebates, defective and slow-moving product returns, and other incentives.

We offer a variety of customer discounts, rebates, returns for defective and slow-moving products, and other incentives.

We may offer cash discounts for paying invoices in accordance with the specified discount terms of the invoice.

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We attempt to avoid or minimize these concessions as much as possible, but we have granted pricing concessions, indemnification rights, and extended customer payment terms, and allowed a higher level of product returns in certain cases.

These concessions impact net sales as well as our profit levels and may require additional capital to finance the business.

These concessions affect both our net sales and profit levels, and may require additional capital to support the business.

We expect our customers to continue to exert pressure on our margins.

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We may incur customer acquisition costs where we incur change-over costs to induce a customer to switch from a competitor’s brand, including expanding new product lines into our existing customers.

Change-over costs include the costs related to removing the customer’s inventory of competitor products and replacing it with our products, which is commonly referred to as a stock lift.

Change-over costs include the costs associated with removing the customer’s inventory of competitor products and replacing it with our products, which is commonly referred to as a stock lift.

Customer acquisition costs are recorded as a reduction to revenue when incurred.

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In addition to warranty returns, we may permit our customers to return new, undamaged products to us within customer-specific limits if they have overstocked their inventories.

At the time products are sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature, frequency, and average cost of the claim and the probability of the customer return.

Significant judgments and estimates must be made and used in connection with establishing the sales returns and other allowances in any accounting period.

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Foreign Currency

Many of our products and related raw materials and components are purchased from suppliers in a variety of non-U.S.

The products generally are purchased through purchase orders with the purchase price specified in U.S.

Many of our products and related raw materials and components are sourced from suppliers in various non-U.S.

The products generally are sourced through purchase orders with the purchase price specified in U.S.

Accordingly, we generally do not have exposure to fluctuations in the relationship between the U.S.

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The largest portion of our overseas purchases comes from China.

The Chinese yuan to U.S.

dollar exchange rate has fluctuated over the past several years.

The exchange rate of the Chinese yuan to the U.S.

dollar has fluctuated over the past several years.

Any future changes in the value of the Chinese yuan relative to the U.S.

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Higher labor costs and material inflation resulting from geopolitical events, rising interest rates, disruptions to supply chain and logistics networks, and the trade policies of the U.S.

or the countries where we source or sell our products may negatively impact our results in the future.

or the countries where we source or sell our products may negatively impact our future results.

We attempt to offset inflationary pressures with cost-saving initiatives, price increases to customers, and the use of alternative suppliers.

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Under the terms of the credit facility, a change in interest rates affects the rate at which we can borrow funds thereunder and impacts the interest cost on existing borrowings.

Interest rates may hold steady at their current rates for prolonged periods or may increase in the future, resulting in increased costs associated with our accounts receivable sales programs and outstanding borrowings.

Interest rates remained elevated throughout much of 2024, but began to decline starting in the second half of 2024, and remained relatively stable throughout the first quarter of 2025.

Interest rates may remain steady at their current levels for prolonged periods or may increase in the future, resulting in increased costs associated with our accounts receivable sales programs and outstanding borrowings.

Interest rates remained elevated throughout much of 2024, but began to decline starting in the second half of that year.

Interest rates remained relatively stable throughout the first quarter of 2025, but declined in the second quarter of 2025.

Impact of Tariffs

We source the majority of our raw materials and parts from suppliers in a variety of non-U.S.

In 2024, approximately 72% of our products were purchased from suppliers in a variety of non-U.S.

countries, with approximately 45% of our products being purchased from third-party suppliers in China.

We source the majority of our raw materials and parts from suppliers in various non-U.S.

In 2024, approximately 72% of our products were sourced from suppliers in various non-U.S.

countries, with approximately 45% of our products sourced from third-party suppliers in China.

The current U.S.

administration recently implemented tariffs and announced the possibility of increasing current tariffs or implementing additional ones.

We expect these actions and reactionary tariff adjustments by other countries to impact our business and contribute to inflationary cost increases.

As a result, we are taking actions designed to mitigate the potential impacts of these tariffs, including, but not limited to, passing along price increases to our customers and negotiating cost concessions from our suppliers where possible.

Absent any changes in trade regulations, we anticipate inflationary cost increases due to these tariffs and any resulting impact on macroeconomic conditions and our business to continue throughout the remainder of 2025.

There can be no assurance that the recently announced tariffs or future imposition of any tariffs, changes thereto, or actions taken by countries in response to the tariffs will not have a material adverse effect on our business, results of operations, financial condition, or liquidity in any period or that any actions we take to mitigate the impact of the tariffs will be effective.

administration recently implemented new tariffs, announced additional tariffs that are expected to take effect in the coming months, and indicated that further tariff changes are possible depending on the outcome of trade negotiations with other countries.

We expect these actions and any reactionary tariff adjustments made by other countries will impact our business and contribute to inflationary cost increases.

As a result, we are taking actions designed to mitigate the potential impacts of these tariffs, including, but not limited to, diversifying our supply chain, passing along price increases to our customers, and negotiating cost concessions from our suppliers where possible.

Absent any changes in trade regulations, we anticipate inflationary cost increases due to these tariffs, as well as any resulting impact on macroeconomic conditions and our business, to continue throughout the remainder of 2025.

Starting in the third quarter of 2025, we implemented pass-through price increases to offset the dollar impact of the new tariff costs.

We expect to see a temporary increase in gross and operating margin percentages in 2025 due to the price increases taking effect before the increased cost of inventory reflecting higher tariffs is recognized as an expense in our statement of operations.

Results of Operations

The following table sets forth, for the periods indicated, the percentage of net sales represented by certain items in our Condensed Consolidated Statements of Operations:

Three Months Ended*

(in thousands, except percentage data) March 29, 2025 March 30, 2024

Three Months Ended* Six Months Ended*

(in thousands, except percentage data) June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Net sales $ 540,959 100.0 % $ 502,951 100.0 % $ 1,048,651 100.0 % $ 971,652 100.0 %

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Interest expense, net 7,182 1.3 % 10,202 2.0 % 14,540 1.4 % 20,807 2.1 %

Other (income) expense, net (1,361) (0.3) % 40 — %

Other income, net (1,544) (0.3) % (136) (0.0) % (2,905) (0.3) % (96) (0.0) %

Income before income taxes 76,843 14.2 % 62,386 12.4 % 150,920 14.4 % 106,179 10.9 %

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* Percentage of sales information may not add due to rounding

Three Months Ended March 29, 2025, Compared to Three Months Ended March 30, 2024

Net sales increased $39.0 million, or 8.3%, for the three months ended March 29, 2025, compared to the prior year period, driven by increased customer demand and sales of new products in our Light Duty segment, partially offset by soft market conditions in the heavy duty and specialty vehicle sectors.

Gross profit as a percentage of net sales increased 220 basis points compared to the prior year period, primarily due to the sales growth noted above and favorable mix from higher sales of new products, as well as productivity, automation, and supplier diversification initiatives, which delivered cost savings.

Selling, general, and administrative expenses (“SG&A”) increased $0.6 million, but decreased 200 basis points as a percentage of net sales, for the three months ended March 29, 2025, compared to the prior year period, due to favorable leverage on higher net sales in the current year period.

SG&A for the three months ended March 30, 2024, included costs incurred in connection with a reduction in workforce action that was enacted in February 2024, net of realized savings as a result of that action.

Interest expense, net, decreased $3.2 million for the three months ended March 29, 2025, compared to the prior year period.

The decrease was driven by lower outstanding principal on our revolving credit facility and term loan as a result of repayments over the last several quarters, as well as lower average Term SOFR rates in the current year period.

Our effective tax rate decreased to 22.4% for the three months ended March 29, 2025, from 25.0% for the three months ended March 30, 2024, due to tax deductions related to the vesting of restricted stock units in the current year period.

Three Months Ended June 28, 2025, Compared to Three Months Ended June 29, 2024

Net sales increased $38.0 million, or 7.6%, for the three months ended June 28, 2025, compared to the prior year period, driven by volume growth from increased customer demand and sales of new products in our Light Duty segment, and new business wins in our Heavy Duty segment, partially offset by reduced demand in our Specialty Vehicle segment impacted by soft market conditions in the specialty vehicle sector.

Gross profit as a percentage of net sales increased 100 basis points compared to the prior year period, primarily due to the sales growth noted above and favorable mix from higher sales of new products, as well as supplier diversification, productivity, and automation initiatives, that delivered cost savings.

Selling, general, and administrative expenses (“SG&A”) increased $10.1 million, or 10 basis points as a percentage of net sales, for the three months ended June 28, 2025, compared to the prior year period, as favorable leverage from higher sales was more than offset by additional investments made in the current year period.

Interest expense, net, decreased $3.0 million for the three months ended June 28, 2025, compared to the prior year period.

The decrease was driven by lower outstanding principal on our revolving credit facility and term loan, resulting from repayments over the last several quarters, as well as lower average Term SOFR rates during the current year period.

Our effective tax rate decreased to 23.6% for the three months ended June 28, 2025, from 24.0% for the three months ended June 29, 2024.

Six Months Ended June 28, 2025, Compared to Six Months Ended June 29, 2024

Net sales increased $77.0 million, or 7.9%, for the six months ended June 28, 2025, compared to the prior year period, driven by increased customer demand and sales of new products in our Light Duty segment, partially offset by reduced demand impacted by soft market conditions in the heavy duty and specialty vehicle sectors.

Gross profit as a percentage of net sales increased 150 basis points compared to the prior year period, primarily due to the sales growth noted above and favorable mix from higher sales of new products, as well as supplier diversification, productivity, and automation initiatives, that delivered cost savings.

Selling, general, and administrative expenses (“SG&A”) increased $10.7 million, but decreased 90 basis points as a percentage of net sales, for the six months ended June 28, 2025, compared to the prior year period, due to favorable leverage on higher net sales that more than offset additional investments made in the current year period.

Interest expense, net, decreased $6.3 million for the six months ended June 28, 2025, compared to the prior year period.

The decrease was driven by lower outstanding principal on our revolving credit facility and term loan resulting from repayments over the last several quarters, as well as lower average Term SOFR rates during the current year period.

Our effective tax rate decreased to 23.0% for the six months ended June 28, 2025, from 24.4% for the three months ended June 29, 2024, due to tax deductions related to the vesting of restricted stock units in the current year period.

Segment Operating Results

Segment operating results were as follows:

For the Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

For the Three Months Ended For the Six Months Ended

(in thousands) June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Light Duty $ 424,328 $ 385,358 $ 833,184 $ 744,651

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Total $ 540,959 $ 502,951 $ 1,048,651 $ 971,652

Segment income (loss) from operations

Segment Income From Operations

Light Duty $ 78,301 $ 65,912 $ 159,794 $ 123,707

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Total $ 88,261 $ 78,663 $ 174,412 $ 143,636

Light Duty net sales increased $49.6 million, or 13.8%, for the three months ended March 29, 2025, compared to the prior year period, primarily due to increased customer demand and sales of new products.

Light Duty segment income from operations as a percentage of net sales increased to 19.9% for the three months ended March 29, 2025, from 16.1% for the three months ended March 30, 2024.

This increase was primarily driven by favorable mix driven by higher new product sales, operational excellence initiatives delivering cost-savings, and favorable leverage on higher net sales.

Heavy Duty net sales decreased $6.1 million, or 10.6%, for the three months ended March 29, 2025, compared to the prior year period.

The decrease in net sales primarily reflects reduced customer demand from continued market pressures in freight transportation and the trucking aftermarket.

Heavy Duty segment income as a percentage of net sales decreased 30 basis points for the three months ended March 29, 2025, compared to the prior year period.

Three Months Ended June 28, 2025, Compared to Three Months Ended June 29, 2024

Light Duty net sales increased $39.0 million, or 10.1%, for the three months ended June 28, 2025, compared to the prior year period, primarily due to volume growth from increased customer demand and sales of new products.

Light Duty segment income from operations as a percentage of net sales increased to 18.5% for the three months ended June 28, 2025, from 17.1% for the three months ended June 29, 2024.

This increase was primarily driven by supplier diversification initiatives, favorable mix driven by higher new product sales, operational excellence initiatives delivering cost savings, and favorable leverage on higher net sales.

Heavy Duty net sales increased $0.9 million, or 1.4%, for the three months ended June 28, 2025, compared to the prior year period.

The increase in net sales primarily reflects new business wins.

Heavy Duty segment income as a percentage of net sales decreased to 0.8% for the three months ended June 28, 2025, from 4.4% for the three months ended June 29, 2024.

This decrease was primarily driven by the impact of investments we made as part of initiatives to grow sales and improve margins on a long-term basis.

Specialty Vehicle

Specialty Vehicle net sales decreased $1.8 million, or 3.2%, for the three months ended June 28, 2025, compared to the prior year period, primarily due to reduced customer demand, partially offset by price increases.

Specialty Vehicle segment income as a percentage of net sales decreased to 17.3% from 17.8% for the three months ended June 28, 2025, and June 29, 2024, respectively.

This decrease was primarily driven by the deleverage of fixed costs on lower net sales volumes.

Six Months Ended June 28, 2025, Compared to Six Months Ended June 29, 2024

Light Duty net sales increased $88.5 million, or 11.9%, for the six months ended June 28, 2025, compared to the prior year period, primarily due to increased customer demand and sales of new products.

Light Duty segment income from operations as a percentage of net sales increased to 19.2% for the six months ended June 28, 2025, from 16.6% for the six months ended June 29, 2024.

This increase was primarily driven by favorable mix from higher new product sales, operational excellence initiatives delivering cost savings, and favorable leverage on higher net sales.

Heavy Duty net sales decreased $5.3 million, or 4.4%, for the six months ended June 28, 2025, compared to the prior year period.

The decrease in net sales primarily reflects reduced customer demand from continued market pressures in freight transportation and the trucking aftermarket, partially offset by price increases.

Heavy Duty segment income as a percentage of net sales decreased to 0.3% for the six months ended June 28, 2025, from 2.3% for the six months ended June 29, 2024.

This decrease was primarily driven by the deleverage of fixed costs on lower net sales volumes and the impact of investments we made as part of initiatives to grow sales and improve margins on a long-term basis.

Specialty Vehicle

Specialty Vehicle net sales decreased $4.4 million, or 8.6%, for the three months ended March 29, 2025, compared to the prior year period, primarily due to reduced customer demand.

Specialty Vehicle segment income as a percentage of net sales decreased to 10.2% from 13.9% for the three months ended March 29, 2025, and March 30, 2024, respectively.

Specialty Vehicle net sales decreased $6.3 million, or 5.8%, for the six months ended June 28, 2025, compared to the prior year period, primarily due to reduced customer demand.

Specialty Vehicle segment income as a percentage of net sales decreased to 14.0% from 15.9% for the six months ended June 28, 2025, and June 29, 2024, respectively.

This decrease was primarily driven by the deleverage of fixed costs on lower net sales volumes.

Liquidity and Capital Resources

Historically, our primary source of liquidity has been the cash flow we generate from our operations, including accounts receivable sales programs facilitated through certain customers.

Historically, our primary source of liquidity has been the cash flow generated from our operations, including flexibility provided by accounts receivable sales programs facilitated through certain customers.

Key components of our liquidity and capital resources were as follows:

(in thousands) March 29, 2025 December 31, 2024

(in thousands) June 28, 2025 December 31, 2024

Cash and cash equivalents $ 56,845 $ 57,137

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Shareholders' equity $ 1,399,746 $ 1,293,470

Based on our current operating plan, we believe that our sources of available capital are adequate to meet our ongoing cash needs for at least the next twelve months.

However, our liquidity could be negatively affected by tariffs, extending payment terms to customers, a decrease in demand for our products, higher interest rates, the outcome of contingencies, or other factors.

Based on our current operating plan, we believe that our sources of available capital are sufficient to meet our ongoing cash needs for at least the next twelve months.

However, our liquidity could be negatively affected by higher tariffs, an extension of customer payment terms, a decrease in demand for our products, higher interest rates, the outcome of contingencies, or other factors.

See Note 7, “Commitments and Contingencies”, in the accompanying condensed consolidated financial statements for additional information regarding commitments and contingencies that may affect our liquidity.

Tariffs increase our use of cash since we pay for the tariffs upon the arrival of our goods in the United States, but we collect the cash on any pass-through price increases from our customers on a delayed basis according to the payment terms negotiated with our customers.

We currently anticipate that additional liquidity needs to pay for increased tariffs on products we import can be managed through increased use of our accounts receivable sales programs with certain customers, as well as our existing revolving credit facility.

Increases in tariffs accelerate our use of cash, as we pay for the higher costs upon arrival of our goods in the United States, but we collect the cash on any pass-through price increases from our

customers on a delayed basis, taking into account our inventory turns and payment terms negotiated with our customers.

We currently anticipate that additional liquidity needs to cover increased tariffs on imported products can be managed through additional factoring under our accounts receivable sales programs with certain customers, as well as borrowings under our existing revolving credit facility.

Payment Terms and Accounts Receivable Sales Programs

Over the past several years, we have continued to extend payment terms to certain customers as a result of customer requests and market demands.

These extended terms have resulted in increased accounts receivable levels and significant uses of cash.

Where available and when we deem appropriate, we participate in accounts receivable sales programs with several customers that allow us to sell our accounts receivable to financial institutions to offset the negative cash flow impact of these payment term extensions.

However, any sales of accounts receivable through these programs ultimately result in us receiving a lesser amount of cash upfront than if we collected those accounts

receivable ourselves in due course, resulting in accounts receivable factoring costs.

Over the past several years, we have continued to extend payment terms to certain customers in response to customer requests and market demands.

These extended terms have resulted in increased accounts receivable levels and significant cash usage.

Where available and when we deem appropriate, we participate in accounts receivable sales programs with several customers that enable us to sell our accounts receivable to financial institutions to offset the negative cash flow impact of these payment term extensions.

However, any sales of accounts receivable through these programs ultimately result in us receiving a lesser amount of cash upfront than if we collected those accounts receivable ourselves in due course, resulting in accounts receivable factoring costs.

Moreover, since these accounts receivable sales programs bear interest at rates tied to the Term SOFR or other reference rates, increases in these applicable rates increase our cost to sell our receivables and reduce the amount of cash we receive.

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Quantitative and Qualitative Disclosures about Market Risk for more information.

Further extensions of customer payment terms would result in additional uses of cash or increased costs associated with the sales of accounts receivable.

Further extensions of customer payment terms would result in additional cash usage or increased costs associated with the sales of accounts receivable.

Sales of accounts receivable under these programs, and related factoring costs, were as follows:

Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

Three Months Ended Six Months Ended

(in thousands) June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Sales of accounts receivable $ 354,904 $ 251,538 $ 689,074 $ 536,756

Factoring costs 14,566 12,622 29,154 26,232

If receivables had not been sold, $918.3 million and $853.6 million of additional receivables would have been outstanding at March 29, 2025, and December 31, 2024, respectively, based on standard payment terms.

Further extensions of customer payment terms would result in additional uses of cash or increased costs associated with the sales of accounts receivable.

If receivables had not been sold, $989.1 million and $853.6 million of additional receivables would have been outstanding at June 28, 2025, and December 31, 2024, respectively, based on standard payment terms.

Further extensions of customer payment terms would result in additional cash usage or increased costs associated with the sales of accounts receivable.

Credit Agreement

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The credit agreement matures on October 4, 2027, is guaranteed by the Company’s material domestic subsidiaries, and is supported by a security interest in substantially all of the Company’s material domestic subsidiaries’ personal property and assets, subject to certain exceptions.

As of March 29, 2025, there was $462.5 million in outstanding borrowings under the term loan.

As of June 28, 2025, there was $462.5 million in outstanding borrowings under the term loan.

Also on that date, we had outstanding letters of credit for $1.1 million in aggregate.

Net of outstanding borrowings and letters of credit, we had $598.8 million available under the credit facility at March 29, 2025.

Net of outstanding borrowings and letters of credit, we had $598.9 million available under the credit facility at June 28, 2025.

Our credit agreement contains affirmative and negative covenants.

As of March 29, 2025, we were not in default with respect to our credit agreement.

As of June 28, 2025, we were not in default with respect to our credit agreement.

Refer to Note 7, “Long-Term Debt” to the Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, for additional information.

The following summarizes the activities included in the Condensed Consolidated Statements of Cash Flows:

Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

Six Months Ended

(in thousands) June 28, 2025 June 29, 2024

Cash provided by operating activities $ 59,785 $ 115,329

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Effect of foreign exchange on cash and cash equivalents 204 (58)

Net increase (decrease) in cash and cash equivalents $ 3,475 $ (2,381)

For the three months ended March 29, 2025, cash provided by operating activities decreased $0.7 million over the prior year period.

Investing activities used cash of $11.0 million and $10.8 million during the three months ended March 29, 2025, and March 30, 2024, respectively.

Financing activities during the three months ended March 29, 2025, included $11.8 million paid to repurchase 93,800 shares of common stock under our new share repurchase plan, and the repayments of $14.0 million of outstanding borrowings under our revolving credit facility and $6.3 million of our term loan balance under our credit agreement.

During the three months ended March 30, 2024, we paid $26.9 million to repurchase 316,285 shares of common stock under our prior share repurchase plan, and the repayment of $11.6 million of outstanding borrowings under our revolving credit facility and $3.1 million of our term loan balance under our credit agreement

Net (decrease) increase in cash and cash equivalents $ (292) $ 10,653

For the six months ended June 28, 2025, cash provided by operating activities decreased $55.5 million from the prior year period as a result of cash used to fund investments in inventory to meet customer demand and to pay for increased tariffs on imports, partially offset by higher proceeds from accounts receivable.

Investing activities used cash of $19.4 million and $22.7 million during the six months ended June 28, 2025, and June 29, 2024, respectively.

Financing activities during the six months ended June 28, 2025, included $15.3 million paid to repurchase 122,923 shares of common stock and $20.2 million to repay outstanding borrowings under our credit agreement.

During the six months ended June 29, 2024, we paid $51.2 million to repurchase 581,880 shares of common stock and $29.6 million to repay outstanding borrowings under our credit agreement.

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