What changed in this filing

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Item 1A. Risk Factors

2026-05-13 compared with 2025-11-05 · 15 added, 22 removed, 34 unchanged (52% of the section changed)

Item 1A – Risk Factors

Careful consideration should be given to the factors discussed in Part I, Item 1A, Risk Factors , in our Annual Report for the fiscal year ended December 28, 2024, which could materially affect our business, financial condition or future results, in addition to the information set forth in this Quarterly Report on Form 10-Q.

Careful consideration should be given to the factors discussed in Part I, Item 1A, Risk Factors , in our Annual Report for the fiscal year ended January 3, 2026, which could materially affect our business, financial condition or future results, in addition to the information set forth in this Quarterly Report on Form 10-Q.

Except for the revised risk factor below regarding " Operating globally subjects us to changes in government regulations and policies in multiple jurisdictions around the world, including those related to tariffs and trade barriers, taxation, exchange controls and political risks, " there have been no material changes from the risk factors disclosed in our Annual Report.

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For example, we operate businesses in Mexico and Canada and benefit from the United States-Mexico-Canada Agreement (USMCA).

If the United States were to withdraw from or materially modify the USMCA or impose significant tariffs or taxes on goods imported into the United States, the cost of our products

could significantly increase or no longer be priced competitively, which in turn could have a material adverse effect on our business and results of operations.

Since February 2025, the Trump administration has relied on the International Emergency Economic Powers Act (IEEPA) to impose a series of tariffs on U.S.

trading partners.

In February 2025, the Trump administration imposed a 25% tariff on Canada and Mexico for non-USMCA originating goods, and a 20% tariff on China (the trafficking tariffs).

As of October 29, 2025, the trafficking tariffs on Canada, Mexico, and China are 35%, 25% and 20%, respectively.

In addition, on April 2, 2025, President Trump announced a 10% "baseline" tariff on all U.S.

trading partners effective April 5, 2025 and higher, country-specific reciprocal tariffs on 57 countries (the reciprocal tariffs).

The reciprocal tariffs do not apply to Canada, Mexico and a few other countries.

Although the Trump administration subsequently paused the country-specific reciprocal tariffs for all countries except China, President Trump issued an executive order on July 31, 2025 imposing new country-specific reciprocal tariffs ranging from 10-41% on 69 countries, effective August 7, 2025.

Several countries, including the United Kingdom and the European Union, have reached trade agreements with the United States that include reductions in the country-specific reciprocal tariffs and other commitments.

Negotiations with numerous other countries continue.

On November 1, 2025, President Trump announced the United States and China reached a framework agreement that will result in the suspension of the country-specific reciprocal tariff on China until November 10, 2026, and reduce the trafficking tariff on China from 20% to 10%, effective November 10, 2025.

China will remain subject to a reciprocal tariff of 10%.

Our business has been negatively affected by these tariffs and may be negatively affected in the future by this quickly evolving tariff situation and the economic uncertainty created thereby.

If the United States were to withdraw from or materially modify the USMCA or impose significant tariffs or taxes on goods imported into the United States, the cost of our products could significantly increase or no longer be priced competitively, which in turn could have a material adverse effect on our business and results of operations.

In 2025, the Trump Administration imposed a series of tariffs against U.S.

trading partners pursuant to the International Emergency Economic Powers Act (IEEPA).

On February 20, 2026, the Supreme Court ruled these tariffs unlawful.

The Trump Administration immediately imposed new global tariffs pursuant to Section 122 of the Trade Act of 1974, which allows for tariffs of up to 15% for a period of up to 150 days.

The Section 122 tariffs were also challenged and held unlawful by the U.S.

Court of International Trade in a decision issued May 7, 2026.

Our business has been negatively affected by these tariffs, and the timing and availability of refunds is uncertain.

We may be negatively affected in the future by the quickly evolving tariff situation and the economic uncertainty created thereby.

Our business is also affected by various product or sector-specific tariffs that the United States imposes on trading partners.

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In addition, the U.S.

Department of Commerce has imposed tariffs of 50% on numerous categories of steel and aluminum products, under Section 232 of the Trade Expansion Act of 1962, and has expanded these tariffs to include certain derivative steel and aluminum products.

On July 30, 2025, President Trump announced the results of a Section 232 investigation on copper, imposing a 50% tariff on imports of semi-finished copper and copper derivatives, effective August 1, 2025.

Department of Commerce has imposed tariffs of 50% on numerous categories of steel, and aluminum, and copper products, under Section 232 of the Trade Expansion Act of 1962, and has expanded these tariffs to include certain derivative products subject to a 25% tariff.

We import products that are impacted by these tariffs.

While we try to mitigate the impact of the existing and other proposed tariffs by the Trump administration through pricing and sourcing strategies, we cannot be certain how our customers and competitors will react to the actions we take.

While we try to mitigate the impact of the existing and other proposed tariffs by the Trump Administration, we cannot be certain if our actions will be successful.

The tariffs have and could in the future negatively affect our ability to compete against competitors who do not manufacture in China and/or are not subject to the tariffs.

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Moreover, tensions between the United States and China have increased and future actions by the United States or Chinese governments may impact our operations in and imports from China, as well as sales to and from China.

In response, Russia and China have begun considering and, in some cases, implementing trade sanctions that could affect U.S.-owned businesses.

In response, Russia and China have begun considering and, in some cases, implementing trade sanctions that could

affect U.S.-owned businesses.

The imposition of trade sanctions has and may in the future continue to make it generally more difficult to do business in Russia and China and cause delays or prevent shipment of products or services performed by our personnel, or to receive payment for products or services.

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The conflict between Russia and Ukraine, as well as other conflicts such as those in the Middle East, may also have the effect of heightening other risks disclosed in our Annual Report, any of which could materially and adversely affect our business and results of operations.

Such risks include, but are not limited to, adverse effects on

macroeconomic conditions, including inflation and business and consumer spending;

Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation and business and consumer spending;

disruptions to our global technology infrastructure, including through cyberattack, ransomware attack, or cyber-intrusion;

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

What changed 10-Q

Item 1A. Risk Factors