What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-01-13 compared with 2025-10-14 · 61 added, 61 removed, 88 unchanged (58% of the section changed)

9 unchanged sentences

Financial Overview

The Company's net sales in the 13 weeks and 39 weeks ended November 30, 2025 were $17.3 million and $49.1 million, respectively, compared to $14.4 million and $45.1 million, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

Net sales for the 13 weeks and 39 weeks ended November 30, 2025 were higher than in the comparable periods of the prior fiscal year.

The increase for the 13 weeks and 39 week periods ended November 30, 2025 was primarily due to the robustness of the commercial and military equipment programs that the Company supplies.

The Company’s gross profits in the 13 weeks and 39 weeks ended November 30, 2025 were higher than the gross profits in the prior year’s comparable periods.

The Company’s higher gross profits during the current 13 week and 39 week periods were primarily due to higher sales volumes, increased selling prices and a more favorable product mix.

The Company’s gross profit margins, measured as percentages of sales, were 34.1% and 32.0%, respectively, in the 13 weeks and 39 weeks ended November 30, 2025, compared to 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

The Company’s higher gross profit margins for the 13 weeks and 39 weeks ended November 30, 2025 compared to the prior year’s comparable periods were primarily due to higher sales volume, increased selling prices and more favorable sales mixes in the current periods.

The Company’s earnings before income taxes and net earnings increased 86.7% and 87.1%, respectively, in the 13 weeks ended November 30, 2025, compared to the 13 weeks ended December 1, 2024, primarily as a result of higher gross profit margins mentioned above and higher interest income in the current periods.

The Company’s earnings before income taxes and net earnings increased 58.1% and 60.4%, respectively, in the 39 weeks ended November 30, 2025, compared to the 39 weeks ended December 1, 2024, primarily due to the higher gross profit margins mentioned above, the previously reported charges incurred in the prior year related to the storm damage and higher interest income.

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transited the area.

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Also, multiple specialty HVAC units were damaged or destroyed.

The Company recorded a charge of $1.1 million in the 26 weeks ended September 1, 2024 related to the damage and repair and downtime costs.

There were no corresponding charges in the 26 weeks ended August 31, 2025.

The Company's net sales in the 13 weeks and 26 weeks ended August 31, 2025 were $16.4 million and $31.8 million, respectively, compared to $16.7 million and $30.7 million, respectively, in the 13 weeks and 26 weeks ended September 1, 2024.

Net sales for the 13 weeks ended August 31, 2025 were marginally lower than in the comparable period of the prior fiscal year while net sales for the 26 weeks ended August 31, 2025 were higher than in the comparable period of the prior fiscal year.

The decrease for the 13 weeks period was due to lower sales to military markets.

Sales in the 13 weeks ended September 1, 2024 were positively impacted by shipments that were delayed in the 13 weeks ended June 2, 2024 due to the storm damage that occurred late in that period.

The increase in sales for the 26 weeks ended August 31, 2025 was due to higher sales to commercial markets offset by lower sales in the business aircraft market.

This was due to a more favorable product mix partially offset by higher overhead costs including costs related to bring up new manufacturing lines to ramp up capacity in preparation for increases in customer program volumes as well as higher freight costs.

The Company’s gross profit in the 26 weeks ended August 31, 2025 was higher than the gross profit in the prior year’s comparable period due to slightly higher sales levels and a more favorable sales mix partially offset by the higher costs noted above.

The Company’s gross profit margins, measured as percentages of sales, were 31.2% and 30.9%, respectively, in the 13 weeks and 26 weeks ended August 31, 2025, compared to 28.5% and 28.9%, respectively, in the 13 weeks and 26 weeks ended September 1, 2024.

The higher gross profit margins for the 13 and 26 weeks ended August 31, 2025 compared to the prior year’s comparable periods were primarily due to a more favorable sales mix as well as sales price increases and lower waste in the 26 weeks ended August 31, 2025 partially offset by the increased overhead costs noted above.

The Company’s earnings before income taxes and net earnings increased 14.9% and 16.4%, respectively, in the 13 weeks ended August 31, 2025, compared to the 13 weeks ended September 1, 2024, primarily as a result of higher gross profit margins mentioned above and higher interest and other income partially offset by higher selling, general and administrative costs, including higher salaries and fringe benefits, travel expenses, and professional fees.

The Company’s earnings before income taxes and net earnings increased 43.6% and 46.6%, respectively, in the 26 weeks ended August 31, 2025, compared to the 26 weeks ended September 1, 2024, primarily due to the higher gross profit margins mentioned above, the charges incurred in the prior year related to the storm damage and higher interest and other income partially offset by higher selling, general and administrative expenses.

The Company recorded a charge of $1.1 million in the 39 weeks ended December 1, 2024 related to the damage and repair and downtime costs.

There were no corresponding charges in the 39 weeks ended November 30, 2025.

The Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses.

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39 Weeks Ended

(Amounts in thousands, except per share amounts)

(Amounts in thousands, except per share

Cost of sales

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Diluted earnings per share

The Company's net sales in the 13 weeks and 26 weeks ended August 31, 2025, were $16.4 million and $31.8 million, respectively, compared to $16.7 million and $30.7 million, respectively, in the 13 weeks and 26 weeks ended September 1, 2024.

Sales for the 13 weeks ended August 31, 2025 were lower than the comparable period of the prior year, primarily due to lower sales to the military markets.

In addition, sales for the 13 weeks ended September 1, 2024 were positively impacted by delayed shipments in the first quarter of fiscal year 2025 due to the storm damage incurred to the Company’s facility in May of 2024.

Sales for the 26 weeks ended August 31, 2025 were higher than the comparable period of the prior year, primarily due to higher sales to the commercial markets partially offset lower sales to the business aircraft market.

The Company’s gross profit in the 13 weeks ended August 31, 2025 was higher than the gross profit in the prior year’s comparable period despite lower sales levels in the 13 weeks ended August 31, 2025, compared to the comparable period in the prior year due to a more favorable product mix as well as sale price increases partially offset by higher labor costs, higher freight costs and higher overhead costs related to bringing up new manufacturing lines to ramp up capacity in preparation for increases in customer program volumes.

The Company’s gross profit in the 26 weeks ended August 31, 2025 was higher than the gross profit in the prior year’s comparable period due to higher sales as well as a more favorable sales mix and sales price increases partially offset by higher labor costs and the higher overhead costs mentioned above.

The Company’s gross profit margins, measured as a percentage of sales, were 31.2% and 30.9%, respectively, in the 13 weeks and 26 weeks ended August 31, 2025, compared to 28.5% and 28.9%, respectively, in the 13 weeks and 26 weeks ended September 1, 2024.

The higher gross profit margins for the 13 and 26 weeks ended August 31, 2025 compared to the prior year’s comparable periods, were primarily due to a more favorable sales mix as well as sales price increases and lower waste in the 26 weeks ended August 31, 2025 partially offset by the increased overhead costs noted above.

The Company's net sales in the 13 weeks and 39 weeks ended November 30, 2025, were $17.3 million and $49.1 million, respectively, compared to $14.4 million and $45.1 million, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

Sales for the 13-week and 39-week periods ended November 30, 2025 were higher than the comparable period of the prior year, primarily due to higher sales to the space, commercial and military markets partially offset by lower sales in the business aircraft market.

The Company’s gross profit in the 13 weeks and 39 weeks ended November 30, 2025 was higher than the gross profit in the prior year’s comparable periods due to higher sales, sales price increases, a more favorable product mix and lower labor costs which were partially offset by higher overhead costs, including higher insurance costs, utilities, repairs and maintenance costs and salaries and fringe benefits as well as higher direct material costs.

The Company’s gross profit margins, measured as a percentage of sales, were 34.1% and 32.0%, respectively, in the 13 weeks and 39 weeks ended November 30, 2025, compared to 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

The higher gross profit margin for the 13 weeks ended November 30, 2025 compared to the prior year’s comparable period, was primarily due to a more favorable sales mix as well as sales price increases, lower labor costs and lower overhead costs as a percentage of sales partially offset by higher waste costs.

The higher gross profit margin for the 39 weeks ended November 30, 2025 compared to the prior year’s comparable period, was primarily due to a more favorable sales mix, sales price increases and lower labor costs partially offset by higher freight costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $131,000, or 6.1%, during the 13 weeks ended August 31, 2025 compared to the 13 weeks ended September 1, 2024, and these expenses, measured as percentages of sales, were 13.9% in the 13 weeks ended August 31, 2025 compared to 12.8% in the 13 weeks ended September 1, 2024.

The increase in selling, general and administrative expenses during the 13 weeks ended August 31, 2025 was primarily due to higher salaries, fringe benefits, travel expenses, research and development expenses and professional fees partially offset by lower freight out, advertising and tradeshow expenses and lower supplies expense.

Selling, general and administrative expenses increased by $413,000, or 9.9%, during the 26 weeks ended August 31, 2025 compared to the 26 weeks ended September 1, 2024, and these expenses, measured as a percentage of sales, were 14.4% in the 26 weeks ended August 31, 2025 compared to 13.5% in the 26 weeks ended September 1, 2024.

The increase in selling, general and administrative expenses during the 26 weeks ended August 31, 2025 was primarily due to the expenses noted above.

Selling, general and administrative expenses included stock option expenses of $101,000 and $189,000, respectively, for the 13 weeks and 26 weeks ended August 31, 2025, compared to stock option expenses of $101,000 and $190,000 for the 13 weeks and 26 weeks ended September 1, 2024.

Selling, general and administrative expenses increased by $277,000, or 14.0%, during the 13 weeks ended November 30, 2025 compared to the 13 weeks ended December 1, 2024, and these expenses, measured as percentages of sales, were 13.0% in the 13 weeks ended November 30, 2025 compared to 13.8% in the 13 weeks ended December 1, 2024.

The increase in selling, general and administrative expenses, in dollars, during the 13 weeks ended November 30, 2025 was primarily due to higher salaries, fringe benefits, incentive compensation, profit sharing expenses, travel expenses and professional fees partially offset by lower freight out expense.

Selling, general and administrative expenses increased by $690,000, or 11.2%, during the 39 weeks ended November 30, 2025 compared to the 39 weeks ended December 1, 2024, and these expenses, measured as a percentage of sales, were 13.9% in the 39 weeks ended November 30, 2025 compared to 13.6% in the 39 weeks ended December 1, 2024.

The increase in selling, general and administrative expenses during the 39 weeks ended November 30, 2025 was primarily due to the higher salaries, fringe benefits, incentive compensation, profit sharing expenses, travel expenses, research and development expenses and professional fees partially offset by lower freight out, advertising and trade show expenses.

Selling, general and administrative expenses included stock option expenses of $105,000 and $294,000, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to stock option expenses of $105,000 and $295,000 for the 13 weeks and 39 weeks ended December 1, 2024.

Earnings from Operations

For the reasons set forth above, the Company’s earnings from operations were $2.8 million and $5.3 million, respectively, for the 13 weeks and 26 weeks ended August 31, 2025, compared to $2.6 million and $4.7 million, respectively, for the 13 weeks and 26 weeks ended September 1, 2024.

For the reasons set forth above, the Company’s earnings from operations were $3.6 million and $8.9 million, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to $1.8 million and $6.5 million, respectively, for the 13 weeks and 39 weeks ended December 1, 2024.

Interest and Other Income

Interest and other income were $390,000 and $745,000, respectively, for the 13 weeks and 26 weeks ended August 31 ,2025, compared to $245,000 and $584,000, respectively, for the prior year's comparable periods.

Interest income increased 59.2% and 27.6%, respectively, for the 13 weeks and 26 weeks ended August 31, 2025, primarily due to interest received on tax refunds in the 13 weeks ended August 31, 2025 and a foreign exchange gain recorded related to a long-term supplier advance.

During the 13 weeks and 26 weeks ended August 31, 2025, the Company earned interest income principally from its investments, which consisted primarily of short-term instruments and money market funds as well the tax refund noted above.

Interest and other income were $343,000 and $1,088,000, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to $290,000 and $874,000, respectively, for the prior year's comparable periods.

Interest income increased 18.3% and 24.5%, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, primarily due to interest received on tax refunds in the 39 weeks ended November 30, 2025 and a foreign exchange gain recorded related to a long-term supplier advance.

During the 13 weeks and 39 weeks ended November 30, 2025, the Company earned interest income principally from its investments, which consisted primarily of short-term instruments and money market funds as well the tax refund noted above.

Income Tax Provision

For the 13 weeks and 26 weeks ended August 31 , 2025, the Company recorded income tax provisions of $831,000 and $1.5 million, respectively, which included discrete income tax provisions of $(10,000) and $(38,000), respectively, for excess tax benefits from stock option exercises offset by the accrual of interest related to unrecognized tax benefits.

For the 13 weeks and 26 weeks ended September 1, 2024, the Company recorded income tax provisions of $750,000 and $1.1 million, respectively, which included discrete income tax provisions of $22,000 and $41,000, respectively, for the accrual of interest related to unrecognized tax benefits.

The Company’s effective tax rates for the 13 weeks and 26 weeks ended August 31, 2025 were 25.7% and 25.4%, respectively, compared to 26.6% and 26.9%, respectively, in the prior year’s comparable periods.

The effective tax rates for the 13 weeks and 26 weeks ended August 31, 2025 were higher than the U.S.

For the 13 weeks and 39 weeks ended November 30, 2025, the Company recorded income tax provisions of $1.0 million and $2.6 million, respectively, which included net discrete income tax benefits of $(21,000) and $(59,000), respectively, for excess tax benefits from stock option exercises offset by the accrual of interest related to unrecognized tax benefits.

For the 13 weeks and 39 weeks ended December 1, 2024, the Company recorded income tax provisions of $559,000 and $1.7 million, respectively, which included discrete income tax provisions of $19,000 and $60,000, respectively, for the accrual of interest related to unrecognized tax benefits.

The Company’s effective tax rates for the 13 weeks and 39 weeks ended November 30, 2025 were 26.0% and 25.6%, respectively, compared to 26.2% and 26.7%, respectively, in the prior year’s comparable periods.

The effective tax rates for the 13 weeks and 39 weeks ended November 30, 2025 were higher than the U.S.

statutory rate of 21% primarily due to state and local taxes and liabilities, and the accrual of interest related to unrecognized tax benefits offset by excess tax benefits on stock option exercises.

The effective rates for the 13 weeks and 26 weeks ended September 1, 2024 were higher than the U.S.

The effective rates for the 13 weeks and 39 weeks ended December 1, 2024 were higher than the U.S.

statutory rate of 21% primarily due to state and local taxes and the accrual of interest related to unrecognized tax benefits.

For the reasons set forth above, the Company's net earnings for the 13 weeks and 26 weeks ended August 31, 2025 were $2.4 million and $4.5 million, respectively, compared to net earnings of $2.1 million and $3.1 million, respectively, for the 13 weeks and 26 weeks ended September 1, 2024.

For the reasons set forth above, the Company's net earnings for the 13 weeks and 39 weeks ended November 30, 2025 were $3.0 million and $7.4 million, respectively, compared to net earnings of $1.6 million and $4.6 million, respectively, for the 13 weeks and 39 weeks ended December 1, 2024.

Basic and Diluted Earnings Per Share

In the 13 weeks and 26 weeks ended August 31, 2025, basic earnings per share were $0.12 and $0.23, respectively, and diluted earnings per shares were $0.12 and $0.22, respectively, compared to basic and diluted earnings per share of $0.10 and $0.15, respectively, in the 13 weeks and 26 weeks ended September 1, 2024.

In the 13 weeks and 39 weeks ended November 30, 2025, basic and diluted earnings per share were $0.15 and $0.37, respectively, compared to basic and diluted earnings per share of $0.08 and $0.23, respectively, in the 13 weeks and 39 weeks ended December 1, 2024.

Liquidity and Capital Resources - Continuing Operations:

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(Amounts in thousands)

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Net cash provided by investing activities

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Cash and Marketable Securities

Of the $61.6 million of cash and cash equivalents and marketable securities at August 31, 2025, $31.7 million was owned by one of the Company’s wholly-owned foreign subsidiaries.

The change in cash and cash equivalents and marketable securities at August 31, 2025 compared to March 2, 2025 was the result of capital expenditures, the purchase of treasury shares, dividends paid to shareholders, the Company’s transition tax installment payment, and a number of additional factors.

Of the $63.6 million of cash and cash equivalents and marketable securities at November 30, 2025, $32.0 million was owned by one of the Company’s wholly-owned foreign subsidiaries.

The change in cash and cash equivalents and marketable securities at November 30, 2025 compared to March 2, 2025 was the result of capital expenditures, the purchase of treasury shares, dividends paid to shareholders, the Company’s transition tax installment payment, and a number of additional factors.

The significant changes in cash (used in) provided by operating activities was as follows:

accounts receivable decreased by 2% at August 31, 2025 compared to March 2, 2025 primarily due to lower sales in the 13 weeks ended August 31, 2025 than in the comparable period in the prior year;

inventories increased by 12% at August 31, 2025 compared to March 2, 2025 primarily due to timing of raw materials purchases;

prepaid and other current assets decreased by 25% at August 31, 2025 compared to March 2, 2025 primarily due to lower prepaid tax balances;

other assets increased $1.6 million during the 26 weeks ended August 31, 2025 due to a long-term supplier advance paid during the quarter;

accounts payable increased by 32% at August 31, 2025 compared to March 2, 2025 primarily due to timing of vendor payments;

accrued liabilities decreased by 5% at August 31, 2025 compared to March 2, 2025 primarily due to decreases in bonus, profit sharing and property tax accruals;

income taxes payable decreased by 98% at August 31, 2025 compared to March 2, 2025 due to the payment of a $4.9 million transition tax installment payment in June 2025.

In addition, the Company paid $5.0 million in cash dividends in the 26-week period ended August 31, 2025 compared to $5.1 million in the 26-week period ended September 1, 2024.

During the 26 weeks ended August 31, 2025, the Company repurchased shares of $2.2 million compared to $1.9 million of repurchases in the 26 weeks ended September 1, 2024.

accounts receivable decreased by 6% at November 30, 2025 compared to March 2, 2025 primarily due to improved collections in the 13 weeks ended November 30, 2025 than in the comparable period in the prior year;

inventories increased by 6% at November 30, 2025 compared to March 2, 2025 primarily due to timing of raw materials purchases;

prepaid and other current assets decreased by 4% at November 30, 2025 compared to March 2, 2025 primarily due to lower interest receivable balances;

other assets increased $1.6 million during the 39 weeks ended November 30, 2025 due to a long-term supplier advance paid during the first quarter of fiscal year 2026;

accounts payable increased by 30% at November 30, 2025 compared to March 2, 2025 primarily due to timing of vendor payments;

accrued liabilities increased by 2% at November 30, 2025 compared to March 2, 2025 due to higher accrued incentive compensation;

income taxes payable decreased by 87% at November 30, 2025 compared to March 2, 2025 due to the payment of a $4.9 million transition tax installment payment in June 2025 partially offset by an increase as a result of increased taxable earnings in the 39 weeks ended November 30, 2025.

In addition, the Company paid $7.5 million in cash dividends in the 39-week period ended November 30, 2025 compared to $7.6 million in the 39-week period ended December 1, 2024.

During the 39 weeks ended November 30, 2025, the Company repurchased shares of $2.2 million compared to $4.3 million of repurchases in the 39 weeks ended December 1, 2024.

The Company had proceeds from the exercises of stock options of approximately $780,000 in the 39 weeks ended November 30, 2025 compared to proceeds from the exercises of stock options of $26,000 in the 39 weeks ended December 1, 2024.

Working Capital

The decrease in working capital at August 31, 2025 compared to March 2, 2025 was primarily due to a decrease in cash as a result of the payment of the long-term supplier advance of $1.6 million, treasury share repurchases of $2.2 million and the payment of $5.0 million of dividends.

The Company's current ratio (the ratio of current assets to current liabilities) was 17.6 to 1.0 at August 31, 2025, compared to 9.7 to 1.0 at March 2, 2025.

During the 26 weeks ended August 31, 2025, the Company's net earnings, adjusted for depreciation and amortization, deferred income taxes, stock-based compensation, amortization of bond premium, provision for credit losses, loss on sale of marketable securities and changes in operating assets and liabilities, resulted in a $0.5 million operating cash outflow compared to a cash inflow of $1.0 million for the 26 weeks ended September 1, 2024.

The decrease was driven by the payment of a $1.6 million long-term supplier advance during the 26 weeks ended August 31, 2025.

During the same 26-week period, the Company expended $664,000 for the purchase of property, plant and equipment compared with $206,000 during the 26 weeks ended September 1, 2024.

The Company paid $5.0 million in cash dividends in the 26-week period ended August 31, 2025 compared to $5.1 million in the 26-week period ended September 1, 2024.

The Company purchased treasury shares of $2.2 million in the 26-week period ended August 31, 2025 compared to $1.9 million in the 26-week period ended September 1, 2024.

The decrease in working capital at November 30, 2025 compared to March 2, 2025 was primarily due to a decrease in cash as a result of the payment of the long-term supplier advance of $1.6 million, treasury share repurchases of $2.2 million and the payment of $7.5 million of dividends.

The Company's current ratio (the ratio of current assets to current liabilities) was 15.8 to 1.0 at November 30, 2025, compared to 9.7 to 1.0 at March 2, 2025.

During the 39 weeks ended November 30, 2025, the Company's net earnings, adjusted for depreciation and amortization, deferred income taxes, stock-based compensation, amortization of bond premium, provision for credit losses, loss on sale of marketable securities and changes in operating assets and liabilities, resulted in a $4.6 million operating cash inflow compared to a cash inflow of $3.7 million for the 39 weeks ended December 1, 2024.

The increase was driven by the higher earnings and improved collections of accounts receivable partially offset by a payment of a $1.6 million long-term supplier advance during the 39 weeks ended November 30, 2025.

During the same 39-week period, the Company expended $1,502,000 for the purchase of property, plant and equipment compared with $258,000 during the 39 weeks ended December 1, 2024.

The Company paid $7.5 million in cash dividends in the 39-week period ended November 30, 2025 compared to $7.6 million in the 39-week period ended December 1, 2024.

The Company purchased treasury shares of $2.2 million in the 39-week period ended November 30, 2025 compared to $4.3 million in the 39-week period ended December 1, 2024.

Other Liquidity Factors

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The Company’s financial resources are also available for purchases of the Company's common stock, cash dividend payments, and appropriate acquisitions and other expansions of the Company's business.

On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (“Needham”) and Citizens JMP Securities, LLC (“Citizens”) (the “Distribution Agreement”) under which the Company may offer and sell, from time to time, at its sole discretion, up to $50.0 million in shares of its common stock.

The issuance and sale, if any, of shares of the Company’s common stock under the Distribution Agreement will be made pursuant to a registration statement on Form S-3 that the Company expects to file with the U.S.

Securities and Exchange Commission (“SEC”) on January 13, 2026.

No sales will be made pursuant to the Distribution Agreement unless and until the registration statement on Form S-3 is declared effective by the SEC.

The Company is not aware of any circumstances or events that are reasonably likely to occur that could materially affect its liquidity.

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In March 2025, the Company entered into an agreement with a supplier, ArianeGroup SAS, under which the Company would advance funds against future purchases.

The agreement requires payments of €4,587 over three years, of which €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 (approximately $2,149 based on October 7, 2025 exchange rates) is due in the first quarter of fiscal 2027 and €1,376 (approximately $1,611 based on October 7, 2025 exchange rates) is due in the first quarter of fiscal 2028.

The agreement requires payments of €4,587 over three years, of which €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 (approximately $2,142 based on January 7, 2026 exchange rates) is due in the first quarter of fiscal 2027 and €1,376 (approximately $1,607 based on January 7, 2026 exchange rates) is due in the first quarter of fiscal 2028.

Under the agreement, the Company commits to purchase C2®B product through December 2033 at an estimated cost, in aggregate, of €36,000.

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The Company’s critical accounting policies that are important to the Condensed Consolidated Financial Statements and that entail, to a significant extent, the use of estimates and assumptions and the application of management’s judgment are described in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 2, 2025.

There have been no significant changes to such accounting policies during the 2026 fiscal year second quarter.

There have been no significant changes to such accounting policies during the 2026 fiscal year third quarter.

Contingencies:

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Quantitative and Qualitative Disclosures About Market Risk .

The Company’s market risk exposure at August 31, 2025 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 2, 2025.

The Company’s market risk exposure at November 30, 2025 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 2, 2025.

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