What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-11 compared with 2026-05-12 · 114 added, 75 removed, 77 unchanged (71% of the section changed)

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Our discussions below in this Item 2 are based upon the more detailed discussions about our business, operations and financial condition included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025, under Part II, Item 7 of that Form 10-K.

Our discussions here focus on our results during the quarter ended April 5, 2026, or as of, April 5, 2026, and the comparable periods of 2025, and to the extent applicable, any material changes from the information discussed in that Form 10-K or other important intervening developments or information since that time.

Our discussions here focus on our results during the quarter and six months ended July 5, 2026, or as of July 5, 2026, and the comparable periods of 2025, and to the extent applicable, any material changes from the information discussed in that Form 10-K or other important intervening developments or information since that time.

These discussions should be read in conjunction with that Form 10-K for more detailed and background information.

The three-month period ended April 5, 2026 includes 14 weeks, and the three-month period ended March 30, 2025 includes 13 weeks.

The six-month period ended July 5, 2026 includes 27 weeks and the six-month period ended June 29, 2025 includes 26 weeks.

The three-month periods ended July 5, 2026 and June 29, 2025 both include 13 weeks.

Forward-Looking Statements

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The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

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Executive Overview

During the quarter ended April 5, 2026, we had consolidated net sales of $331.0 million, up 11.3% compared to $297.4 million in the first quarter last year, primarily due to higher sales volume partially driven by an extra week in 2026.

The sales increase was primarily in the corporate office market segment.

Fluctuations in currency exchange rates positively impacted net sales during the first quarter of 2026, as discussed below.

Consolidated operating income was $32.3 million for the first quarter of 2026, compared to $23.2 million in the first quarter last year, primarily due to higher gross profit margin as a result of higher average sales prices and product mix, lower manufacturing costs in EAAA, partially offset by increased tariff costs.

Consolidated net income for the quarter ended April 5, 2026, was $23.6 million or $0.40 per diluted share, compared to consolidated net income of $13.0 million or $0.22 per diluted share, in the first quarter last year.

During the quarter ended July 5, 2026, we had consolidated net sales of $395.7 million, up 5.4% compared to $375.5 million in the second quarter last year, primarily due to higher customer demand— particularly in the corporate office, healthcare, and education market segments — and higher average sales prices.

Fluctuations in currency exchange rates positively impacted net sales during the second quarter of 2026, as discussed below.

Consolidated operating income was $74.9 million for the second quarter of 2026 compared to $52.0 million in the second quarter last year, primarily due to higher sales and higher gross profit margin driven by lower manufacturing costs on higher volume, production efficiencies, product mix, and IEEPA tariff refunds recognized during the current quarter as discussed below.

Consolidated net income for the quarter ended July 5, 2026, was $51.4 million or $0.88 per diluted share, compared to $32.6 million or $0.55 per diluted share in the second quarter last year.

During the first six months of 2026, we had consolidated net sales of $726.7 million, up 8.0% compared to $672.9 million in the first six months of last year, primarily due to higher customer demand partially driven by an extra week in the first six months of 2026.

Consolidated operating income was $107.2 million for the first six months of 2026, compared to $75.3 million in the same period last year, primarily due to higher sales and higher gross profit margin, driven by lower manufacturing costs and tariff refunds as discussed above.

Consolidated net income for the six months ended July 5, 2026, was $75.0 million or $1.28 per diluted share, compared to $45.6 million or $0.77 per diluted share in the same period last year.

Impact of Macroeconomic Trends

Ongoing disruptions in economic markets and global energy markets, inflation, the war between Russia and Ukraine, conflicts in the Middle East, evolving trade policies and the impact of tariffs on the demand for our products, a challenging supply chain environment, slow market conditions in certain parts of the globe, significant financial pressures in the commercial office market globally, and other geopolitical factors, all pose challenges which may adversely affect our future performance.

Ongoing disruptions in economic markets and global energy markets, inflation, the war between Russia and Ukraine, conflicts in the Middle East, evolving trade policies, impacts from government-imposed tariffs, a challenging supply chain environment, slow market conditions in certain parts of the globe and macro driven changes to customer demand for our products, significant financial pressures in the commercial office market globally, and other geopolitical factors, all pose challenges which may adversely affect our future performance.

We plan to continue evaluating our cost structure and global manufacturing footprint to identify and activate opportunities to decrease costs and optimize our global cost structure.

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As a result, the Company incurred higher tariff costs on rubber and luxury vinyl tile products imported into the U.S.

in fiscal year 2025 and in the first quarter of 2026.

in fiscal year 2025 and in the first six months of 2026.

In February 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act were invalid.

The Company believes certain tariffs previously paid may be refundable.

The Company has not yet recognized any recovery of tariffs in its consolidated financial statements.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were invalid.

During the three months ended July 5, 2026, the Company recognized approximately $15.6 million in refunds for tariffs previously paid under the IEEPA.

These refunds were recognized as a reduction to cost of sales in the consolidated condensed statements of operations.

The Company also recorded approximately $0.5 million of interest income associated with these tariff refunds, presented as a reduction to interest expense, net in the consolidated condensed statements of operations.

In the consolidated condensed balance sheets, the Company recorded $7.6 million as an accounts receivable as a portion of these tariff-related amounts recognized was not collected during the second quarter of 2026 but was realizable pursuant to the gain contingency guidance as of July 5, 2026, with the remainder of the tariff-related amounts recorded as an increase in cash.

Any outstanding requests for IEEPA tariff refunds are not material.

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Analysis of Results of Operations

Consolidated Results

The following table presents, as a percentage of net sales, certain items included in our consolidated condensed statements of operations for the three-month periods ended April 5, 2026 and March 30, 2025:

Three Months Ended

April 5, 2026 March 30, 2025

The following table presents, as a percentage of net sales, certain items included in our consolidated condensed statements of operations for the three-month and six-month periods ended July 5, 2026 and June 29, 2025:

Three Months Ended Six Months Ended

July 5, 2026 June 29, 2025 July 5, 2026 June 29, 2025

Net sales 100.0 % 100.0 % 100.0 % 100.0 %

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Consolidated Net Sales

Below is information regarding our consolidated net sales, and analysis of those results, for the three-month periods ended April 5, 2026, and March 30, 2025:

Below is information regarding our consolidated net sales, and analysis of those results, for the three-month and six-month periods ended July 5, 2026, and June 29, 2025:

Three Months Ended Percentage

April 5, 2026 March 30, 2025

(in thousands)

Change Six Months Ended Percentage

July 5, 2026 June 29, 2025 July 5, 2026 June 29, 2025

(in thousands) (in thousands)

Consolidated net sales $ 395,698 $ 375,522 5.4 % $ 726,735 $ 672,935 8.0 %

For the quarter ended April 5, 2026, consolidated net sales increased $33.6 million (11.3%) versus the comparable period in 2025, primarily due to higher sales volume (approximately 6%) and the impact of currency fluctuations, which had a positive impact on net sales of approximately $13.4 million (5%).

These currency fluctuations were primarily due to the strengthening of the Euro against the U.S.

On a market segment basis, the sales increase was primarily in the corporate office, public buildings, healthcare, and retail market segments.

For the quarter ended July 5, 2026, consolidated net sales increased $20.2 million (5.4%) versus the comparable period in 2025, primarily due to higher sales volume (approximately 3%), higher average sales prices (approximately 1%), and favorable currency fluctuations (approximately $5.8 million or 1%) from the strengthening of foreign currencies against the U.S.

On a market segment basis, the sales increase was primarily in the corporate office, healthcare, and education market segments.

For the six months ended July 5, 2026, consolidated net sales increased $53.8 million (8.0%) versus the comparable period in 2025, primarily due to higher sales volume (approximately 4%) partially driven by an extra week in the first six months of 2026, favorable currency fluctuations (approximately $19.2 million or 3%) from the strengthening of the Euro against the U.S.

dollar, and higher average sales prices (approximately 1%).

On a market segment basis, the sales increase was primarily in the corporate office, healthcare, and education market segments.

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Consolidated Cost and Expenses

The following table presents our consolidated cost of sales and selling, general and administrative expenses for the three-month periods ended April 5, 2026, and March 30, 2025:

The following table presents our consolidated cost of sales and selling, general and administrative expenses for the three-month and six-month periods ended July 5, 2026, and June 29, 2025:

Three Months Ended Percentage

April 5, 2026 March 30, 2025

(in thousands)

Change Six Months Ended Percentage

July 5, 2026 June 29, 2025 July 5, 2026 June 29, 2025

(in thousands) (in thousands)

Consolidated cost of sales $ 217,616 $ 227,545 (4.4) % $ 421,930 $ 413,995 1.9 %

Consolidated selling, general and administrative expenses 103,166 95,930 7.5 % 197,559 183,666 7.6 %

94,393 87,736 7.6 %

Consolidated Cost of Sales

For the quarter ended April 5, 2026, consolidated cost of sales increased $17.9 million (9.6%) compared to the first quarter of 2025, primarily due to higher sales volume, increased tariff costs on rubber and luxury vinyl tile products imported into the U.S., partially offset by lower EAAA manufacturing costs driven by favorable fixed cost absorption on higher volume.

Currency fluctuations had a negative impact on consolidated cost of sales for the first quarter of 2026 and partially increased our costs by approximately $8.6 million (4.6%) compared to the same period last year.

As a percentage of net sales, our cost of sales decreased to 61.7% for the first quarter of 2026 versus 62.7% for the first quarter of 2025.

For the quarter ended July 5, 2026, consolidated cost of sales decreased $9.9 million (4.4%) compared to the second quarter of 2025, primarily due to lower manufacturing costs driven by favorable fixed cost absorption on higher volume, manufacturing efficiencies, and the impact of $15.6 million in IEEPA tariff refunds recognized in the current quarter, which were recorded as a reduction to cost of sales.

These favorable impacts were partially offset by other tariff costs of $3.5 million recognized during the second quarter of 2026.

Currency translation had a negative impact on consolidated cost of sales in the second quarter of 2026 and partially increased our costs by approximately $3.8 million (1.7%) compared to the same period last year.

As a percentage of net sales, our cost of sales decreased to 55.0% for the second quarter of 2026 versus 60.6% for the second quarter of 2025.

For the six months ended July 5, 2026, consolidated cost of sales increased $7.9 million (1.9%) versus the comparable period in 2025, primarily due to higher sales partially offset by the impact of tariff refunds and lower manufacturing costs as discussed above.

Currency translation had a negative impact on consolidated cost of sales for the first six months of 2026 and partially increased our costs by approximately $12.4 million (3.0%) compared to the same period last year.

As a percentage of net sales, our cost of sales decreased to 58.1% for the first six months of 2026 versus 61.5% for the first six months of 2025.

Consolidated Gross Profit

For the quarter ended April 5, 2026, consolidated gross profit, as a percentage of net sales, was 38.3% compared with 37.3% in the same period last year.

The increase in consolidated gross profit percentage was primarily due to higher average sales prices (approximately 1%), favorable product mix (approximately 1%), partially offset by higher manufacturing costs (approximately 1%) driven by increased tariff costs that offset lower EAAA manufacturing costs.

For the quarter ended July 5, 2026, gross profit, as a percentage of net sales, was 45.0% compared with 39.4% in the same period last year.

The increase in gross profit percentage was primarily due to lower costs (approximately 5%) driven by tariff refunds recognized in the current quarter and lower manufacturing costs due to favorable fixed cost absorption and manufacturing efficiencies compared to the same period last year.

For the six months ended July 5, 2026, gross profit, as a percentage of net sales, was 41.9% compared with 38.5% in the same period last year.

The increase in gross profit percentage was primarily due to lower costs driven by the factors discussed above.

Consolidated Selling, General and Administrative (“SG&A”) Expenses

For the quarter ended April 5, 2026, consolidated SG&A expenses increased $6.7 million (7.6%) versus the comparable period in 2025.

Currency fluctuations had a negative impact on consolidated SG&A expenses of approximately $3.0 million (3.4%) in the first quarter of 2026 compared to the same period last year.

SG&A expenses were higher for the first quarter of 2026 primarily due to (i) higher variable compensation of $3.1 million;

For the quarter ended July 5, 2026, consolidated SG&A expenses increased $7.2 million (7.5%) versus the comparable period in 2025.

Currency fluctuations had a negative impact on consolidated SG&A expenses of approximately $1.1 million (1.2%) in the second quarter of 2026 compared to the same period last year.

SG&A expenses were higher for the second quarter of 2026 primarily due to higher sales commissions and variable compensation of $7.6 million on improved operating results and higher labor costs of $1.6 million.

These increases were partially offset by lower severance costs of $2.9 million due to employee reduction initiatives recognized in the comparable prior year period.

As a percentage of net sales, SG&A expenses increased to 26.1% for the second quarter of 2026 versus 25.5% for the second quarter of 2025.

For the six months ended July 5, 2026, consolidated SG&A expenses increased $13.9 million (7.6%) versus the comparable period in 2025.

Currency translation had a negative impact on consolidated SG&A expenses of approximately $4.1 million (2.3%) in the first six months of 2026 compared to the same period last year.

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SG&A expenses were higher for the first six months of 2026 primarily due to (i) higher variable compensation of $10.7 million;

(ii) higher labor costs of $4.1 million;

and (iii) higher advertising costs of $1.1 million due to a new product launch.

As a percentage of net sales, SG&A expenses decreased to 28.5% for the first quarter of 2026 versus 29.5% for the first quarter of 2025.

(iii) higher advertising costs of $1.3 million due to a new product launch;

and (iv) higher professional fees of $1.3 million.

These increases were partially offset by lower severance costs of $3.0 million due to employee reduction initiatives recognized in the comparable prior year period.

As a percentage of net sales, SG&A expenses decreased to 27.1% for the first six months of 2026 versus 27.3% for the first six months of 2025.

Interest Expense

During the quarter ended April 5, 2026, interest expense was $2.7 million, a decrease of $1.8 million from the comparable period in 2025, primarily due to lower outstanding borrowings as the senior notes were redeemed in December 2025.

During the quarter ended July 5, 2026, interest expense was $2.4 million, a decrease of $2.1 million from the comparable period in 2025, primarily due to lower outstanding borrowings as our formerly outstanding senior notes were redeemed in December 2025.

Lower interest rates on borrowings under the Facility also contributed to the decrease in interest expense.

For the six months ended July 5, 2026, interest expense was $5.0 million, a decrease of $3.8 million from the comparable period in 2025, primarily due to lower outstanding borrowings as discussed above.

Provision for Income Taxes

The effective tax rate for the three months ended April 5, 2026 and March 30, 2025, was 18.3% and 24.0%, respectively.

The decrease in the effective tax rate for the three months ended April 5, 2026, compared to the same period last year was primarily due to higher excess tax benefits related to share-based compensation.

See Note 12 entitled “Income Taxes” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

The effective tax rate for the three and six months ended July 5, 2026, was 27.4% and 24.8%, respectively, compared to 26.3% and 25.6% for the same periods in 2025.

The increase in the effective tax rate for the three months ended July 5, 2026, as compared to the same period in 2025, was primarily due to an increase in non-deductible employee compensation.

The decrease in the effective tax rate for the six months ended July 5, 2026, as compared to the same period in 2025, was primarily due to higher excess tax benefits related to share-based compensation.

Segment Operating Results

AMS Segment – Net Sales and Adjusted Operating Income (“AOI”)

The following table presents AMS segment net sales and AOI for the three-month periods ended April 5, 2026, and March 30, 2025:

Three Months Ended Percentage Change

April 5, 2026 March 30, 2025

(in thousands)

The following table presents AMS segment net sales and AOI for the three-month and six-month periods ended July 5, 2026, and June 29, 2025:

Three Months Ended Percentage Change Six Months Ended Percentage Change

July 5, 2026 June 29, 2025 July 5, 2026 June 29, 2025

(in thousands) (in thousands)

AMS segment net sales $ 247,666 $ 239,443 3.4 % $ 443,337 $ 419,380 5.7 %

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See Note 10 entitled “Segment Information” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

During the first quarter of 2026, net sales in AMS increased 8.7% versus the comparable period in 2025 primarily due to higher sales volume and average sales prices.

On a market segment basis, the AMS sales increase was primarily in the corporate office, healthcare, public buildings, and retail market segments.

AOI in AMS increased 20.3% during the first quarter of 2026 compared to the prior year period primarily due to higher sales.

Higher gross profit margin driven by higher average sales prices and product mix, partially offset by increased tariff costs, also contributed to the increase in AMS AOI.

As a percentage of net sales, AOI increased to 12.2% during the first quarter of 2026 compared to 11.0% in the same period last year.

During the second quarter of 2026, net sales in AMS increased 3.4% versus the comparable period in 2025, primarily due to higher sales volume and higher average blended sales prices on favorable price / mix.

On a market segment basis, the AMS sales increase was primarily in the healthcare, corporate office, and retail market segments.

During the first six months of 2026, net sales in AMS increased 5.7% versus the comparable period in 2025, primarily due to higher sales volume and favorable price / mix as discussed above.

On a market segment basis, the AMS sales increase was primarily in the corporate office, healthcare, and retail market segments.

AOI in AMS increased 24.9% during the second quarter of 2026 compared to the prior year period, primarily due to higher sales and gross profit margin mostly driven by tariff refunds recognized in the current quarter.

As a percentage of net sales, AOI increased to 24.6% during the second quarter of 2026 compared to 20.4% in the same period last year.

AOI in AMS increased 23.5% during the first six months of 2026 compared to the prior year period, primarily due to higher sales, higher gross profit margin as discussed above, and product mix.

As a percentage of net sales, AOI increased to 19.1% during the first six months of 2026 compared to 16.4% in the same period last year.

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EAAA Segment – Net Sales and AOI

The following table presents EAAA segment net sales and AOI for the three-month periods ended April 5, 2026, and March 30, 2025:

Three Months Ended Percentage Change

April 5, 2026 March 30, 2025

(in thousands)

The following table presents EAAA segment net sales and AOI for the three-month and six-month periods ended July 5, 2026, and June 29, 2025:

Three Months Ended Percentage Change Six Months Ended Percentage Change

July 5, 2026 June 29, 2025 July 5, 2026 June 29, 2025

(in thousands) (in thousands)

EAAA segment net sales $ 148,032 $ 136,079 8.8 % $ 283,398 $ 253,555 11.8 %

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See Note 10 entitled “Segment Information” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

During the first quarter of 2026, net sales in EAAA increased 15.2% versus the comparable period in 2025, primarily due to higher sales volume.

Currency fluctuations had a positive impact on EAAA net sales of approximately $12.8 million (10.9%) from the strengthening of the Euro and Australian dollar against the U.S.

On a market segment basis, the EAAA sales increase was most significant in the corporate office market segment.

AOI in EAAA increased 57.9% during the first quarter of 2026 versus the comparable period in 2025, primarily due to higher sales and higher gross profit margin as a result of lower manufacturing costs driven by favorable fixed cost absorption on higher production volume.

As a percentage of net sales, AOI increased to 6.5% during the first quarter of 2026 compared to 4.8% in the same period last year.

During the second quarter of 2026, net sales in EAAA increased 8.8% versus the comparable period in 2025, primarily due to higher sales volume and favorable currency fluctuations of approximately $5.8 million (4.3%) from the strengthening of foreign currencies against the U.S.

On a market segment basis, the EAAA sales increase was primarily in the corporate office and education market segments.

During the first six months of 2026, net sales in EAAA increased 11.8% versus the comparable period in 2025, primarily due to favorable currency fluctuations of approximately $18.6 million (7.3%) and higher sales volume.

On a market segment basis, the EAAA sales increase was primarily in the corporate office and education market segments.

AOI in EAAA increased 97.7% during the second quarter of 2026 versus the comparable period in 2025, primarily due to higher sales and gross profit margin driven by lower manufacturing costs and product mix.

Currency fluctuations had no material impact on EAAA AOI for the second quarter of 2026 compared to the same period last year.

As a percentage of net sales, AOI increased to 9.4% during the second quarter of 2026 compared to 5.2% in the same period last year.

AOI in EAAA increased 80.1% during the first six months of 2026 versus the comparable period in 2025, primarily due to higher sales and gross profit margin as discussed above.

Currency fluctuations had a positive impact on AOI of approximately $2.8 million (8.5%) for the first six months of 2026 compared to the same period in 2025.

As a percentage of net sales, AOI increased to 8.0% during the first six months of 2026 compared to 5.0% in the same period last year.

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Financial Condition, Liquidity and Capital Resources

At April 5, 2026, the Company had $61.2 million in cash.

At July 5, 2026, the Company had $81.5 million in cash.

At that date, the Company had $171.1 million in term loan borrowings, $33.1 million in revolving loan borrowings, and $0.6 million in letters of credit outstanding under our Facility.

As of April 5, 2026, we had additional borrowing capacity of $226.3 million under the Facility.

As of July 5, 2026, we had additional borrowing capacity of $216.3 million under the Facility.

We anticipate that our liquidity is sufficient to meet our obligations for the next 12 months, and we expect to generate sufficient cash to meet our long-term obligations.

Balance Sheet

Accounts receivable, net, were $163.3 million at April 5, 2026, compared to $174.5 million at December 28, 2025.

The decrease of $11.2 million was primarily due to customer collections in the first quarter of 2026.

Inventories, net, were $294.2 million at April 5, 2026, compared to $275.0 million at December 28, 2025.

The increase of $19.2 million was primarily due to finished goods inventory build attributable to expected higher customer demand in the remainder of 2026.

Accounts receivable, net, were $210.0 million at July 5, 2026, compared to $174.5 million at December 28, 2025.

The increase of $35.5 million was primarily due to the impact of higher net sales as a result of increased customer demand in the second quarter of 2026.

The Company also recorded a $7.6 million accounts receivable related to IEEPA tariff refunds.

Inventories, net, were $291.6 million at July 5, 2026, compared to $275.0 million at December 28, 2025.

The increase of $16.6 million was primarily due to higher work in process and finished goods inventory driven by increased production volumes and higher customer demand.

Analysis of Cash Flows

The following table presents a summary of cash flows for the three-month periods ended April 5, 2026 and March 30, 2025, respectively:

Three Months Ended

April 5, 2026 March 30, 2025

The following table presents a summary of cash flows for the six-month periods ended July 5, 2026 and June 29, 2025, respectively:

Six Months Ended

July 5, 2026 June 29, 2025

(in thousands)

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Cash and cash equivalents at end of period $ 81,528 $ 121,701

Cash provided by operating activities was $13.5 million for the three months ended April 5, 2026, which represents an increase of $1.8 million from the prior year comparable period.

The increase was primarily due to higher net income for the three months ended April 5, 2026, partially offset by a higher use of cash related to inventory build as discussed above.

Cash used in investing activities was $10.3 million for the three months ended April 5, 2026, which represents an increase of $2.9 million from the prior year comparable period, primarily attributable to a greater capital investment in manufacturing automation and robotics solutions during the three months ended April 5, 2026.

Cash used in financing activities was $12.4 million for the three months ended April 5, 2026, which represents an increase of $3.7 million from the prior year comparable period.

The year-over-year increase was primarily due to higher outstanding borrowings under the credit facility resulting in higher repayments and the repurchase of common stock, partially offset by higher proceeds from line of credit borrowings under the credit facility during the three months ended April 5, 2026.

Cash provided by operating activities was $51.9 million for the six months ended July 5, 2026, which represents an increase of $10.0 million from the prior year comparable period, primarily attributable to higher net income for the six months ended July 5, 2026, partially offset by a higher use of cash related to inventory build and accounts receivable as discussed above.

Cash used in investing activities was $22.5 million for the six months ended July 5, 2026, which represents an increase of $7.7 million from the prior year comparable period, primarily attributable to a greater capital investment in manufacturing automation and robotics solutions during the first six months of 2026.

Cash used in financing activities was $17.8 million for the six months ended July 5, 2026, which represents an increase of $4.1 million from the prior year comparable period.

The year-over-year increase was primarily due to higher outstanding borrowings under the credit facility resulting in higher repayments and increased repurchases of common stock, during the first six months of 2026 compared to the prior year.

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Share Repurchases

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The program has no specific expiration date.

During the three months ended April 5, 2026, the Company repurchased 460,882 shares of common stock at a weighted average price of $26.04 per share pursuant to this program.

We anticipate revenue growth in the second quarter of fiscal 2026 compared to the first quarter of 2026.

We anticipate that our second quarter and the remainder of fiscal 2026 will be impacted by higher raw material costs, higher energy costs, and higher costs to procure our luxury vinyl tile products amid increased global macro-economic uncertainty.

During the six months ended July 5, 2026, the Company repurchased 771,125 shares of common stock at a weighted average price of $26.90 per share pursuant to this program.

We anticipate revenue growth in the third quarter of fiscal 2026 compared to the prior year comparable period.

We anticipate that our third quarter and the remainder of fiscal 2026 will be impacted by higher raw material costs, higher energy costs, and higher costs to procure our luxury vinyl tile products amid increased global macro-economic uncertainty.

We are activating initiatives to offset these impacts through incremental pricing and productivity.

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However, the Company’s cash flows from operations can be affected by numerous factors including raw material availability and cost, and demand for our products.

As of April 27, 2026, the consolidated backlog of unshipped orders was approximately $256.6 million.

As of July 20, 2026, the consolidated backlog of unshipped orders was approximately $269.1 million.

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025, backlog was approximately $222.8 million as of February 2, 2026.

1 unchanged sentence

D isruptions in supply and distribution chains or delays in construction projects and flooring installations worldwide have caused, and may continue to cause, fluctuations in our backlog.

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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 2. Management’s Discussion and Analysis