\nMotorcar Parts of America, Inc. (Nasdaq: MPAA<\/b>) today reported financial results for its fiscal 2027 first quarter ended June 30, reflecting timing of orders, with the company still on target to meet its expectations for the full year.<\/p>\n
Positive Drivers:<\/b><\/p>\n Three-Month Results<\/b><\/p>\n Net sales<\/b> for the first quarter of fiscal 2027 were $168.0 million, compared with $188.4 million in the prior-year period, consistent with the company’s expectations. The company is reaffirming its fiscal 2027 guidance. The year-over-year decline in net sales was primarily attributable to the anticipated timing of customer orders. In addition, certain new business opportunities were temporarily impacted as customers took advantage of inventory liquidations associated with the bankruptcy of a competitor. The company believes this dynamic has begun to reverse. Net sales during the quarter were also delayed by the planned strategic relocation of the company’s Canadian heavy-duty operations to its manufacturing facilities in Mexico.<\/p>\n Gross profit<\/b> for the fiscal 2027 first quarter was $27.2 million compared with $33.9 million a year earlier. Gross margin<\/b> for the same period was 16.2 percent compared with 18.0 percent a year ago. Gross margin was impacted by non-cash expenses of 2.4 percent and one-time items of 1.6 percent as detailed in Exhibit 2. Excluding these non-cash expenses and certain one-time cash items, gross margin was 20.2 percent. In addition, the company noted that gross margin was negatively impacted by approximately 2 percent, or $3.5 million, due to foreign currency fluctuations.<\/p>\n Operating income<\/b> for the fiscal 2027 first quarter was $3.5 million compared with $20.1 million in the prior year. Operating income was impacted by non-cash expenses of $4.7 million, and one-time items of $3.0 million as detailed in Exhibit 4. Operating income for the prior year benefited from non-cash items of $3.5 million, and partially offset by one-time cash expenses of $1.4 million, as detailed in Exhibit 4. Excluding these non-cash and certain one-time cash items, operating income was $11.2 million, which includes the $3.5 million unfavorable impact due to foreign currency fluctuations noted above, compared with $18.0 million in the prior year period.<\/p>\n \nInterest expense for the fiscal 2027 first quarter decreased by $768,000 to $12.0 million from $12.8 million a year ago, primarily due to lower sales which resulted in lower utilization of accounts receivable discount programs.<\/p>\n \nNet loss for the fiscal 2027 first quarter was $13.4 million, or $0.71 per share, compared with net income of $3.0 million, or $0.15 per diluted share, for the prior year. Net loss was impacted by non-cash expenses of $4.6 million, or $0.25 per share, and one-time items of $2.3 million, or $0.12 per share, as detailed in Exhibit 1, and other items noted above.<\/p>\n \n\u201cWe remain confident about our ability to achieve our annual guidance, notwithstanding some expected sales head winds that we and the industry experienced in the first quarter,\u201d said Selwyn Joffe, chairman, president and chief executive officer.<\/p>\n \nHe reemphasized the company\u2019s significant new business commitments and opportunities in North America — supported by strength across all product lines, in particular the additive Centric Parts brake business with estimated historical gross sales as high as $400 million at the supplier level.<\/p>\n \n\u201cWe have received considerable customer interest in Centric Parts since our recent announcement,\u201d Joffe added.<\/p>\n \nJoffe highlighted the company recently announced the renewal of its loan agreement and extension of the maturity date of the revolver credit facility to August 2031 led by PNC Bank, N.A. The renewal recognizes the company\u2019s milestones, solid position within the automotive aftermarket and management\u2019s commitment to strategic growth and profitability.<\/p>\n \nAfter share repurchases of $1.9 million for the fiscal 2027 first quarter and the recent purchase of Centric Parts brake brands, net bank debt was $99.7 million \u2013 reflecting a revolver loan of $118.8 million less cash of $19.1 million at June 30, 2026.<\/p>\n Share Repurchase<\/b><\/p>\n \nDuring the fiscal 2027 first quarter, the company repurchased 129,523 shares for $1.9 million at an average share price of $14.98 under its current authorization program. The company has $20.1 million remaining to repurchase shares under its current authorized share repurchase program.<\/p>\n \nThe company anticipates opportunities to build shareholder value through sales gains, enhanced profitability and strong cash generation.<\/p>\n Use of Non-GAAP Measure<\/i><\/b><\/p>\n This press release includes the following non-GAAP measure \u2013 EBITDA, which is not a measure of financial performance under GAAP and should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to the company\u2019s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company\u2019s business as determined in accordance with GAAP. In addition, the company\u2019s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. For a definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, see the financial tables included in this press release. Also, refer to our Form 8-K to which this release is attached, and other filings we make with the SEC, for further information regarding this measure.<\/i><\/p>\n Earnings Conference Call and Webcast<\/b><\/p>\n \nSelwyn Joffe, chairman, president and chief executive officer, and David Lee, chief financial officer, will host an investor conference call today at 10:00 a.m. Pacific time to discuss the company\u2019s financial results and operations. The call will be open to all interested investors either through a live Web broadcast via the company\u2019s investor relations site at www.motorcarparts.com<\/a> and the tab Events and Presentations<\/i><\/b> or by calling (833) 461-5787 (domestic). Meeting ID<\/b> 406 025 397.<\/p>\n \nParticipants are encouraged to pre-register<\/a> for the conference call to receive call details and faster access to the event. A listing of dial-in numbers for international participants is available via: https:\/\/help.events.q4inc.com\/eahc\/international-dial-in-numbers<\/a>.<\/p>\n \nFor those who are not available to listen to the live broadcast, a replay of the call will be archived on Motorcar Parts of America\u2019s investor relations site www.motorcarparts.com<\/a> for a seven-day period.<\/p>\n About Motorcar Parts of America, Inc.<\/b><\/p>\n \nMotorcar Parts of America, Inc. is a remanufacturer, manufacturer, and distributor of automotive aftermarket parts — including alternators, starters, wheel bearings and hub assemblies, brake calipers, brake pads, brake rotors, brake master cylinders, brake power boosters, and diagnostic testing equipment utilized in imported and domestic passenger vehicles, light trucks, and heavy-duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States, Canada, and Mexico, with facilities located in California, New York, Mexico, Malaysia, China and India, and administrative offices located in California, Tennessee, Mexico, Singapore, Malaysia, and Canada. In addition, the company\u2019s electrical vehicle subsidiary designs and manufactures testing solutions for performance, endurance, and production of multiple components in the electric power train \u2013 providing simulation, emulation, and production applications for the electrification of both automotive and aerospace industries, including electric vehicle charging systems. Additional information is available at www.motorcarparts.com<\/a>.<\/p>\n Forward-Looking Statements<\/i><\/b><\/p>\n This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, sales growth, margin improvement, operating efficiencies, customer demand, new business opportunities, capacity utilization, working capital, liquidity, debt levels, cash flow, strategic initiatives, and market conditions. These statements are based on current expectations, estimates, forecasts, and assumptions and are not guarantees of future performance. Actual results may differ materially from those expressed or implied by these forward-looking statements due to risks and uncertainties, including changes in customer ordering patterns, customer concentration, competitive conditions, supply-chain constraints, inflation, tariffs, interest rates, credit availability, labor and production costs, inventory levels, operational execution, macroeconomic conditions, and the other risks described in the company\u2019s most recent Form 10-K, Forms 10-Q, and other filings with the Securities and Exchange Commission. The company undertakes no obligation to update or revise any forward-looking statements, except as required by law.<\/i><\/p>\n MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES<\/b><\/p>\n Consolidated Statements of Operations<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n 2026<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n168,021,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n188,364,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n140,847,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n154,447,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n27,174,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n33,917,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n15,517,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n12,680,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n6,546,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n6,210,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,176,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,306,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,597,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(8,348,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n23,642,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n13,848,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,532,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n20,069,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n12,044,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n12,812,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,540,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,790,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n13,584,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n14,602,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(10,052,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n5,467,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,369,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,425,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(13,421,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n3,042,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(0.71<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.16<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(0.71<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.15<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n18,922,938<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n19,369,060<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n18,922,938<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n19,917,663<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES<\/b><\/p>\n Consolidated Balance Sheets<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n19,120,000<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n14,650,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,279,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,028,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n71,362,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n112,614,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n413,289,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n397,041,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n35,057,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n34,552,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n23,056,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n23,097,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n564,163,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n583,982,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n29,300,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n30,739,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n63,833,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n63,103,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n4,304,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,039,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n338,242,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n331,221,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n7,355,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,440,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,827,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,913,000<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n1,010,024,000<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,019,437,000<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n177,487,000<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n200,499,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n33,164,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n29,923,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n47,570,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n61,201,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n118,839,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n94,668,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n4,695,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,348,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n9,398,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n8,957,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n391,153,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n399,596,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n44,795,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n38,993,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n256,961,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n249,108,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n406,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n425,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n55,665,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n56,969,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n8,055,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n8,336,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n757,035,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n753,427,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n189,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n189,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n225,827,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n226,709,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n19,006,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n32,427,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n7,967,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n6,685,000<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n252,989,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n266,010,000<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n1,010,024,000<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,019,437,000<\/p>\n<\/td>\n<\/tr>\n Additional Information and Non-GAAP Financial Measures<\/b><\/p>\n \nTo supplement the consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the company has included the following additional information and non-GAAP financial measures for the three months ended June 30, 2026 and 2025. Among other things, the company uses such additional information and non-GAAP adjusted financial measures in addition to and together with corresponding GAAP measures to help analyze the performance of its business.<\/p>\n \nThe company believes this information helps provide a more complete understanding of the company’s results of operations and the factors and trends affecting the company’s business. However, this information should be considered as a supplement to, and not as a substitute for, or superior to, information contained in the company\u2019s financial statements prepared in accordance with GAAP. In addition, the company\u2019s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies.<\/p>\n \nThe company defines EBITDA as earnings before interest, taxes, depreciation, and amortization. A reconciliation of EBITDA to net income is provided below along with information regarding such items.<\/p>\n Items Impacting Net Income for the Three Months Ended June 30, 2026 and 2025 Exhibit 1<\/b><\/p>\n<\/td>\n<\/tr>\n 2026<\/b><\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(13,421,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(0.71<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n3,042,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.15<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,406,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.18<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2,847,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.14<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n705,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.04<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,026,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.05<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,138,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.11<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n946,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.05<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,597,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(0.08<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(8,348,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(0.42<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,540,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.08<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,790,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.09<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,548,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(0.08<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n435,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.02<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n4,644,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.25<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(1,304,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(0.07<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,014,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.16<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.07<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(754,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(0.04<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(357,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(0.02<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n2,260,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.12<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,069,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.05<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n Items Impacting Gross Profit for the Three Months Ended June 30, 2026 and 2025 Exhibit 2<\/b><\/p>\n<\/td>\n<\/tr>\n 2026<\/b><\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n27,174,000<\/p>\n<\/td>\n \n16.2<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n33,917,000<\/p>\n<\/td>\n \n18.0<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,406,000<\/p>\n<\/td>\n \n2.0<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2,847,000<\/p>\n<\/td>\n \n1.5<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n705,000<\/p>\n<\/td>\n \n0.4<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,026,000<\/p>\n<\/td>\n \n0.5<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n4,111,000<\/p>\n<\/td>\n \n2.4<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n3,873,000<\/p>\n<\/td>\n \n2.1<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,767,000<\/p>\n<\/td>\n \n1.6<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n0.8<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n2,767,000<\/p>\n<\/td>\n \n1.6<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n0.8<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \nNote: the above items impacting gross profit do not include approximately $3.5 million, or approximately 2% gross margin, unfavorable impact due to foreign currency fluctuations<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Items Impacting EBITDA for the Three Months Ended June 30, 2026 and 2025 Exhibit 3<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n 2026<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(13,421,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n3,042,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n12,044,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n12,812,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,369,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,425,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,270,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,449,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n4,262,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n20,728,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,406,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2,847,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n705,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,026,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,138,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n946,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,597,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(8,348,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,540,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,790,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n6,192,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(1,739,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,014,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,014,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Items Impacting Operating Income for the Three Months Ended June 30, 2026 and 2025 Exhibit 4<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n 2026<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,532,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n20,069,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,406,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2,847,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n705,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,026,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,138,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n946,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,597,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(8,348,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n4,652,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(3,529,000<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,014,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n3,014,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,426,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u00a0<\/p>\n\n
\n
\n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n Three Months Ended<\/b><\/td>\n<\/tr>\n \n \n \n June 30,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Net sales<\/td>\n \n \n \n \n \n \n \n \n \n Cost of goods sold<\/td>\n \n \n \n \n \n \n \n \n \n Gross profit<\/td>\n \n \n \n \n \n \n \n \n \n Operating expenses:<\/td>\n \n \n \n <\/tr>\n \n General and administrative<\/td>\n \n \n \n \n \n \n \n \n \n Sales and marketing<\/td>\n \n \n \n \n \n \n \n \n \n Research and development<\/td>\n \n \n \n \n \n \n \n \n \n Foreign exchange impact of lease liabilities and forward contracts<\/td>\n \n \n \n \n \n \n \n \n \n Total operating expenses<\/td>\n \n \n \n \n \n \n \n \n \n Operating income<\/td>\n \n \n \n \n \n \n \n \n \n Other expenses:<\/td>\n \n \n \n <\/tr>\n \n Interest expense, net<\/td>\n \n \n \n \n \n \n \n \n \n Change in fair value of compound net derivative liability<\/td>\n \n \n \n \n \n \n \n \n \n Total other expenses<\/td>\n \n \n \n \n \n \n \n \n \n (Loss) income before income tax expense<\/td>\n \n \n \n \n \n \n \n \n \n Income tax expense<\/td>\n \n \n \n \n \n \n \n \n \n Net (loss) income<\/td>\n \n \n \n \n \n \n \n \n \n Basic net (loss) income per share<\/td>\n \n \n \n \n \n \n \n \n \n Diluted net (loss) income per share<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Weighted average number of shares outstanding:<\/td>\n \n \n \n <\/tr>\n \n Basic<\/td>\n \n \n \n \n \n \n \n \n \n Diluted<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n<\/table>\n \n
\n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n June 30, 2026<\/b><\/td>\n \n March 31, 2026<\/b><\/td>\n<\/tr>\n \n ASSETS<\/b><\/td>\n \n (Unaudited)<\/b><\/td>\n \n <\/tr>\n \n Current assets:<\/td>\n \n \n \n <\/tr>\n \n Cash and cash equivalents<\/td>\n \n \n \n \n \n \n \n Short-term investments<\/td>\n \n \n \n \n \n \n \n Accounts receivable \u2014 net<\/td>\n \n \n \n \n \n \n \n Inventory \u2014 net<\/td>\n \n \n \n \n \n \n \n Contract assets<\/td>\n \n \n \n \n \n \n \n Prepaid expenses and other current assets<\/td>\n \n \n \n \n \n \n \n Total current assets<\/td>\n \n \n \n \n \n \n \n Plant and equipment \u2014 net<\/td>\n \n \n \n \n \n \n \n Operating lease assets<\/td>\n \n \n \n \n \n \n \n Long-term deferred income taxes<\/td>\n \n \n \n \n \n \n \n Long-term contract assets<\/td>\n \n \n \n \n \n \n \n Goodwill and intangible assets \u2014 net<\/td>\n \n \n \n \n \n \n \n Other assets<\/td>\n \n \n \n \n \n \n \n TOTAL ASSETS<\/td>\n \n \n \n \n \n \n \n LIABILITIES AND SHAREHOLDERS’ EQUITY<\/b><\/td>\n \n \n <\/tr>\n \n Current liabilities:<\/td>\n \n \n <\/tr>\n \n Accounts payable and accrued liabilities<\/td>\n \n \n \n \n \n \n \n Customer finished goods returns accrual<\/td>\n \n \n \n \n \n \n \n Contract liabilities<\/td>\n \n \n \n \n \n \n \n Revolving loan<\/td>\n \n \n \n \n \n \n \n Other current liabilities<\/td>\n \n \n \n \n \n \n \n Operating lease liabilities<\/td>\n \n \n \n \n \n \n \n Total current liabilities<\/td>\n \n \n \n \n \n \n \n Convertible notes, related party<\/td>\n \n \n \n \n \n \n \n Long-term contract liabilities<\/td>\n \n \n \n \n \n \n \n Long-term deferred income taxes<\/td>\n \n \n \n \n \n \n \n Long-term operating lease liabilities<\/td>\n \n \n \n \n \n \n \n Other liabilities<\/td>\n \n \n \n \n \n \n \n Total liabilities<\/td>\n \n \n \n \n \n \n \n Commitments and contingencies<\/td>\n \n \n <\/tr>\n \n Shareholders’ equity:<\/td>\n \n \n <\/tr>\n \n Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued<\/td>\n \n \n \n \n \n \n \n Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued<\/td>\n \n \n \n \n \n \n \n Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,933,207 and 18,924,818 shares issued and outstanding at June 30, 2026 and March 31, 2026, respectively<\/td>\n \n \n \n \n \n \n \n Additional paid-in capital<\/td>\n \n \n \n \n \n \n \n Retained earnings<\/td>\n \n \n \n \n \n \n \n Accumulated other comprehensive income<\/td>\n \n \n \n \n \n \n \n Total shareholders’ equity<\/td>\n \n \n \n \n \n \n \n TOTAL LIABILITIES AND SHAREHOLDERS\u2019 EQUITY<\/td>\n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n<\/table>\n \n
\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Three Months Ended June 30,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n $<\/b><\/td>\n \n Per Diluted Share<\/b><\/td>\n \n $<\/b><\/td>\n \n Per Diluted Share<\/b><\/td>\n<\/tr>\n \n GAAP net (loss) income<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Non-cash items impacting net income<\/b><\/td>\n \n \n \n \n \n \n <\/tr>\n \n Core and finished goods premium amortization<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revaluation – cores on customers’ shelves<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share-based compensation expenses<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Foreign exchange impact of lease liabilities and forward contracts<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Change in fair value of compound net derivative liability<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Tax effect (a)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total non-cash items impacting net income<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Cash items impacting net income<\/b><\/td>\n \n \n \n \n \n \n <\/tr>\n \n Transition expenses and severance (b)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net tariff costs paid for products sold before price increases were effective<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Tax effect (a)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total cash items impacting net income<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n (a) Tax effect is calculated by applying an income tax rate of 25.0% to items listed above; this rate may differ from the period’s actual income tax rate.<\/td>\n<\/tr>\n \n (b) For the three months ended June 30, 2026, consists of $2,767,000 impacting gross profit and $247,000 included in operating expenses.<\/td>\n<\/tr>\n<\/table>\n \n
\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Three Months Ended June 30,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n $<\/b><\/td>\n \n Gross Margin<\/b><\/td>\n \n $<\/b><\/td>\n \n Gross Margin<\/b><\/td>\n<\/tr>\n \n GAAP gross profit<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Non-cash items impacting gross profit<\/b><\/td>\n \n \n \n \n \n \n <\/tr>\n \n Core and finished goods premium amortization<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Revaluation – cores on customers’ shelves<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Total non-cash items impacting gross profit<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Cash items impacting gross profit<\/b><\/td>\n \n \n \n \n \n \n <\/tr>\n \n Transition expenses and severance<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Net tariff costs paid for products sold before price increases were effective<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Total cash items impacting gross profit<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n
\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Three Months Ended June 30,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n GAAP net (loss) income<\/td>\n \n \n \n \n \n \n \n \n Interest expense, net<\/td>\n \n \n \n \n \n \n \n \n Income tax expense<\/td>\n \n \n \n \n \n \n \n \n Depreciation and amortization<\/td>\n \n \n \n \n \n \n \n \n EBITDA<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Non-cash items impacting EBITDA<\/b><\/td>\n \n \n <\/tr>\n \n Core and finished goods premium amortization<\/td>\n \n \n \n \n \n \n \n \n Revaluation – cores on customers’ shelves<\/td>\n \n \n \n \n \n \n \n \n Share-based compensation expenses<\/td>\n \n \n \n \n \n \n \n \n Foreign exchange impact of lease liabilities and forward contracts<\/td>\n \n \n \n \n \n \n \n \n Change in fair value of compound net derivative liability<\/td>\n \n \n \n \n \n \n \n \n Total non-cash items impacting EBITDA<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Cash items impacting EBITDA<\/b><\/td>\n \n \n <\/tr>\n \n Transition expenses and severance<\/td>\n \n \n \n \n \n \n \n \n Net tariff costs paid for products sold before price increases were effective<\/td>\n \n \n \n \n \n \n \n \n Total cash items impacting EBITDA<\/td>\n \n \n \n \n \n \n \n \n
\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Three Months Ended June 30,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n GAAP operating income<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Non-cash items impacting operating income<\/b><\/td>\n \n \n <\/tr>\n \n Core and finished goods premium amortization<\/td>\n \n \n \n \n \n \n \n \n Revaluation – cores on customers’ shelves<\/td>\n \n \n \n \n \n \n \n \n Share-based compensation expenses<\/td>\n \n \n \n \n \n \n \n \n Foreign exchange impact of lease liabilities and forward contracts<\/td>\n \n \n \n \n \n \n \n \n Total non-cash items impacting operating income<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Cash items impacting operating income<\/b><\/td>\n \n \n <\/tr>\n \n Transition expenses and severance<\/td>\n \n \n \n \n \n \n \n \n Net tariff costs paid for products sold before price increases were effective<\/td>\n \n \n \n \n \n \n \n \n Total cash items impacting operating income<\/td>\n \n \n \n \n \n \n \n <\/p>\n