Item 7A Quantitative and Qualitative Disclosures About Market Risk
−Removed: The Company manufactures, markets, and sells its products throughout the world and, as a result, is subject to changing economic conditions, which could reduce the demand for its products.
+Added: The Company manufactures, markets, and sells its products throughout the world and, as a result, is subject to changing economic conditions, which could reduce the demand for its products or increase the demand for components and raw materials purchased by the Company.
Direct Material Costs
6 unchanged sentences
Consequently, it views the prospect of such changes as an outlook risk to the business.
−Removed: Significant increases in raw materials can be difficult to offset with price increases due to existing contractual agreements with customers as well as difficulty finding effective financial instruments to hedge these changes.
+Added: Significant increases in the cost of raw materials can be difficult to offset with price increases due to existing contractual agreements with customers as well as difficulty finding effective financial instruments to hedge these changes.
Our profitability could be negatively impacted in the long term if we are not able to pass along higher raw material costs to our customers.
8 unchanged sentences
The principal foreign currencies in which the Company conducts its business are the British pound sterling, euro, Canadian dollar, Japanese yen, Mexican peso, Hong Kong dollar, Chinese renminbi, and the Danish krone.
−Removed: As of June 1, 2024, the Company had outstanding 21 forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.
+Added: As of May 31, 2025, the Company had outstanding 21 forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.
(In millions, except number of forward contracts)
7 unchanged sentences
Currency Number of Forward Contracts Net Exposure
−Removed: KWN 1 2,599.6
Net Liability Exposure
Currency Number of Forward Contracts Net Exposure
−Removed: The cost of the foreign currency hedges and remeasuring all foreign currency transactions into the appropriate functional currency resulted in a net gain of $3.0 million in fiscal 2024 compared to net gain of $4.8 million in fiscal 2023 included in net earnings.
−Removed: These amounts are included in Other (income) expense, net in the Consolidated Statements of Comprehensive Income.
−Removed: Additionally, the cumulative effect of translating the balance sheet and income statement accounts from the functional currency into the United States dollar increased the accumulated comprehensive loss component of total stockholders' equity by $8.3 million compared to a decrease of $20.1 million as of the end of fiscal 2024 and 2023, respectively.
+Added: The cost of the foreign currency hedges and remeasuring all foreign currency transactions into the appropriate functional currency resulted in a net gain of $6.1 million in fiscal 2025 compared to a net gain of $3.0 million in fiscal 2024 included in net earnings.
+Added: These amounts are included in Other expense (income), net in the Consolidated Statements of Comprehensive Income.
+Added: Additionally, the cumulative effect of translating the balance sheet and income statement accounts from the functional currency into the United States dollar increased the accumulated comprehensive loss component of total stockholders' equity by $35.1 million compared to an increase of $8.3 million as of the end of fiscal 2025 and 2024, respectively.
Interest Rate Risk
11 unchanged sentences
The swap agreement was amended in February 2023 for each calculation period beginning on February 3, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 1.910% modified fixed interest rate.
+Added: In May 2025, the swap agreement was amended to remove the 0.11448% floor and related CSA.
In June 2017, the Company entered into a second interest rate swap agreement.
2 unchanged sentences
The swap agreement was amended in February 2023 for each calculation period beginning on February 3, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 2.348% modified fixed interest rate.
+Added: In May 2025, the swap agreement was amended to remove the 0.11448% floor and related CSA.
In January 2022, the Company entered into a third interest rate swap agreement.
3 unchanged sentences
The swap agreement was amended in February 2023 for each calculation period beginning on January 31, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 1.650% modified fixed interest rate.
+Added: In May 2025, the swap agreement was amended to remove the 0.11448% floor and related CSA.
In February 2023, the Company entered into a fourth interest rate swap agreement.
The interest rate swap is for an aggregate notional amount of $150.0 million with a forward start date of March 3, 2023, and a termination date of January 3, 2029.
−Removed: As a result of the transaction, under the terms of the agreement the Company effectively will convert one month Spread Adjusted Term SOFR floating interest rate plus applicable margin to 3.950% fixed interest rate and adjustment percentage plus applicable margin as of the forward start date.
−Removed: "Spread Adjusted Term SOFR" means Term SOFR plus an adjustment percentage that varies with tenor.
−Removed: The Company typically selects a one month tenor that is calculated as the one month Term SOFR rate plus 0.11448%.
−Removed: The fair market value of the effective interest rate swap instruments was a net asset of $61.7 million and $56.9 million as of June 1, 2024 and June 3, 2023, respectively.
+Added: The interest rate swap locked in the Company’s interest rate on the forecasted outstanding borrowings of $150.0 million at 3.950% exclusive of the credit spread on the variable rate debt.
+Added: As a result of the transaction, under the terms of the agreement the Company effectively will convert one month Term SOFR floating interest rate plus applicable margin to 3.950% fixed interest rate plus applicable margin as of the forward start date.
+Added: The fair market value of the effective interest rate swap instruments was a net asset of $26.1 million and $61.7 million as of May 31, 2025, and June 1, 2024, respectively.
All cash flows related to the Company's interest rate swap instruments are denominated in U.S.
14 unchanged sentences
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.