# Usana Health Sciences Inc: Form 10-Q for the period ended Mar 29, 2025

- Company: [Usana Health Sciences Inc](/companies/usna.md) (CIK 896264)
- Form: 10-Q
- Filed: 2025-05-06
- Accepted by EDGAR: May 6, 2025, 14:42 ET
- Period: 2025-03-29
- Accession: 0000896264-25-000126
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/896264/000089626425000126/usna-20250329.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/896264/000089626425000126/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-29.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-12-29 to 2025-03-29 | $249.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-12-29 to 2025-03-29 | $52.4m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-12-29 to 2025-03-29 | $197.1m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-12-29 to 2025-03-29 | $91.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-12-29 to 2025-03-29 | $15.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-12-29 to 2025-03-29 | $411.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-12-29 to 2025-03-29 | $7.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-12-29 to 2025-03-29 | $9.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-12-29 to 2025-03-29 | $0.49 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-12-29 to 2025-03-29 | $0.49 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-12-29 to 2025-03-29 | 19,085,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-12-29 to 2025-03-29 | $15.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-12-29 to 2025-03-29 | $2.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2024-12-29 to 2025-03-29 | $12.3m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-29 | $179.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-29 | $281.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-29 | $746.6m | us-gaap:Assets |
| Current liabilities | at 2025-03-29 | $137.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-29 | $162.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-29 | $529.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 26,045 characters.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide an understanding of USANA’s financial condition, results of operations and cash flows by reviewing certain key indicators and measures of performance.

The MD&A is presented in six sections as follows:

- Overview
- Products
- Customers
- Non-GAAP Financial Measures
- Results of Operations
- Liquidity and Capital Resources

This discussion and analysis from management's perspective should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and Notes thereto that are contained in this quarterly report, as well as Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 28, 2024 (“2024 Form 10-K”), filed with the SEC on March 12, 2025, and our other filings, including the Current Reports on Form 8-K, that have been filed with the SEC through the date of this report. Forward-looking statements in Part I, Item 2 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements and Certain Risks” on page 1 and the risk factors provided in Part II, Item 1A for discussion of these risks and uncertainties).

### Overview

We develop and manufacture high quality, science-based nutritional and personal care and skincare products that are distributed internationally primarily through direct selling. We use this distribution method because we believe it is more conducive to meeting our vision as a company, which is to improve the overall health and nutrition of individuals and families around the world. On December 23, 2024, we acquired a 78.85% controlling ownership interest in Hiya, a leading provider of high-quality children's health and wellness products. We believe that the addition of Hiya to our business promotes our vision and adds a diversified layer of growth in the direct-to-consumer channel. Consequently, we operate and sell products through both the direct selling and direct-to-consumer channels and organize our business into two reportable segments: direct selling and Hiya direct-to-consumer.

*Direct selling:* Direct selling is our primary business with approximately 84% of consolidated net sales. Our direct selling customer base is primarily comprised of two types of customers: “Associates” and “Preferred Customers,” referred to together as “active Customers.” Our Associates also sell our products to retail customers. Associates share in our company vision by acting as independent distributors of our products in addition to purchasing our products for their personal use. In 2023, we launched our Affiliate program in the United States, Canada, and Mexico and are evaluating introducing the program in other markets. This program offers another sales and compensation opportunity to individuals who are interested in selling USANA products. Affiliates are discussed and reported in the report as part of our Associates. Preferred Customers purchase our products strictly for personal use and are not permitted to resell or to distribute the products. We only count as active Customers those Associates and Preferred Customers who have purchased from us at any time during the most recent three-month period. As of March 29, 2025, we had approximately 459,000 active Customers worldwide in our direct selling business.

We have direct selling operations in multiple markets, with sales and expenses being generated and incurred in multiple currencies. Our reported U.S. dollar sales and earnings can be significantly affected by fluctuations in currency exchange rates. In general, our operating results are affected positively by a weakening of the U.S. dollar and negatively by a strengthening of the U.S. dollar. During the three months ended March 29, 2025, net sales outside of the United States represented 91.0% of direct selling net sales. In our net sales discussions that follow, we approximate the impact of currency fluctuations on net sales by translating current year sales at the average exchange rates in effect during the comparable periods of the prior year.

*Hiya direct-to-consumer:* Hiya operates and sells products to customers in the United States. Hiya's customers purchase Hiya products for personal use primarily through a subscription model, which is intended to provide a steady, predictable income stream for Hiya. The ongoing nature of subscriptions fosters stronger relationships with customers by making it easier for them to receive products regularly, which we believe leads to retention and loyalty. Hiya's subscription model also provides important data on customer preferences and behaviors, which enables personalized offerings, efficient marketing and data-driven innovation insights. We evaluate Hiya's customer counts and behavior through their monthly subscribers and only count as "active Monthly Subscribers" those Hiya customers who have purchased from Hiya at any time during the most recent month. As of March 29, 2025, Hiya had approximately 224,000 active Monthly Subscribers.

*Other*: The "other" category is comprised of Rise Bar Wellness, Inc. ("Rise") and Oola Global, LLC ("Oola"), which are both businesses we acquired in 2022. Rise manufactures and sells high-quality protein bars and powdered drinks that are formulated to help customers achieve their health goals through clean and simple ingredients. Oola is a direct selling company that offers a personal development framework and nutritional products that helps individuals create a life of balance, growth, and purpose.

We discuss our "other" category, which is not a reportable segment, together with our "direct selling" segment.

The following table summarizes operating results as a percentage of net sales for the current and prior-year periods, as indicated:

|  | Three Months Ended March 29, 2025 Direct selling & Other | Hiya direct-to-consumer | Consolidated | March 30, 2024 Direct selling & Other | Hiya direct-to-consumer | Consolidated |
| --- | ---: | ---: | ---: | ---: | --- | ---: |
| Net sales | 100.0% | 100.0% | 100.0% | 100.0% | N/A | 100.0% |
| Cost of sales | 18.1% | 38.0% | 21.0% | 18.9% | N/A | 18.9% |
| Gross profit | 81.9% | 62.0% | 79.0% | 81.1% | N/A | 81.1% |
| Operating expenses: |  |  |  |  |  |  |
| Associate incentives | 42.4% | 0.0% | 36.1% | 42.0% | N/A | 42.0% |
| Selling, general and administrative | 32.0% | 63.4% | 36.6% | 28.3% | N/A | 28.3% |
| Total operating expenses | 74.3% | 63.4% | 72.7% | 70.3% | N/A | 70.3% |
| Earnings (loss) from operations | 7.6% | (1.4)% | 6.3% | 10.8% | N/A | 10.8% |
| Amortization of acquired intangible assets | 0.1% | 12.0% | 1.9% | 0.1% | N/A | 0.1% |

For more information relating to our reportable segments, see Note K to our condensed consolidated financial statements.

### Products

The following table summarizes the approximate percentage of total product revenue for our direct selling segment that has been contributed by our major product lines and our top-selling products for the current and prior-year periods, as indicated:

| Product Line USANA® Nutritionals | Three Months Ended March 29, 2025 | March 30, 2024 |
| --- | ---: | ---: |
| Optimizers | 72% | 72% |
| Essentials/CellSentials(1) | 16% | 15% |
| USANA Foods(2) | 6% | 6% |
| Personal care and Skincare | 5% | 6% |
| All other | 1% | 1% |
| **Key Product** |  |  |
| USANA® Essentials/CellSentials | 9% | 10% |
| Proflavanol® | 9% | 10% |
| Probiotic | 7% | 8% |

(1) Represents a product line consisting of multiple products, as opposed to the actual USANA® Essentials / CellSentials product.

(2) Includes our Active Nutrition line.

The following table summarizes the approximate percentage of total product revenue for our Hiya direct-to-consumer segment that has been contributed by our major product lines for the current period, as indicated:

| Product Line | Three Months Ended March 29, 2025 |
| --- | ---: |
| Kids Daily Multivitamin | 52% |
| Kids Daily Greens & Superfoods | 17% |
| Kids Daily Probiotic | 14% |
| Kids Bedtime Essentials | 10% |
| Kids Daily Iron+ | 4% |
| Kids Daily Immune+ | 3% |

### Customers

#### Direct selling

Because we sell our products to a direct selling customer base of independent Associates and Preferred Customers, we increase our sales by increasing the number of our active Customers, the amount they spend on average, or both. Our primary focus continues to be increasing the number of active Customers. We believe this focus is consistent with our vision of improving the overall health and nutrition of individuals and families around the world. Increases or decreases in product sales are typically the result of variations in the volume of product sold relating to fluctuations in the number of active Customers purchasing our products. The number of active Customers is, therefore, used by management as a key non-financial indicator to evaluate our operational performance.

Sales to Associates accounted for approximately 50% of direct selling segment sales during the three months ended March 29, 2025, with the remainder of our sales generated from Preferred Customers. Associates and Preferred Customers represented approximately 40% and 60%, respectively, of the total active Customer base for the quarter in the direct selling segment. The table below summarizes the changes in our active Customer base for our direct selling segment by geographic region, rounded to the nearest thousand as of the dates indicated:

| Asia Pacific: | Total Active Customers by Region As of March 29, 2025 |  | As of March 30, 2024 |  | Change from Prior Year | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Greater China | 254,000 | 55.3% | 274,000 | 55.5% | (20,000) | (7.3%) |
| Southeast Asia Pacific | 75,000 | 16.4% | 76,000 | 15.4% | (1,000) | (1.3%) |
| North Asia | 45,000 | 9.8% | 45,000 | 9.1% | — | —% |
| Asia Pacific total | 374,000 | 81.5% | 395,000 | 80.0% | (21,000) | (5.3%) |
| Americas and Europe | 85,000 | 18.5% | 99,000 | 20.0% | (14,000) | (14.1%) |
|  | 459,000 | 100.0% | 494,000 | 100.0% | (35,000) | (7.1%) |

#### Hiya direct-to-consumer

Hiya's active Monthly Subscribers are comprised of two types: first-time customers and recurring customers. First-time customers are viewed as an investment as the customer is provided a discount, and shipping costs are higher due to the inclusion of a refillable glass bottle. Additionally, as a direct-to-consumer company, customer acquisition is heavily influenced by the level of marketing spend. Recurring customers are not provided the same discount, and shipping costs are lower on refill orders. Both gross margins as well as operating margins improve with recurring customer orders, therefore, profitability margins are affected by sales mix between these two types of customers.

### Non-GAAP Financial Measures

We believe that presentation of certain non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our operations. Management believes these measures reflect an additional way of viewing aspects of our business that, when viewed with our U.S. GAAP results, provide a more complete understanding of factors and trends affecting our business. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes. We provide such non-GAAP financial information for informational purposes only. Readers should consider the information in addition but not instead of or superior to, our Consolidated Financial Statements prepared in accordance with U.S. GAAP, accompanying this report.

In analyzing business trends and performance, management uses “constant currency” net sales, “local currency” net sales, and other currency-related financial information terms to discuss our financial results in a way we believe is helpful in understanding the impact of fluctuations in foreign-currency exchange rates and facilitating period-to-period comparisons of results of operations and providing investors an additional perspective on trends and underlying business results. Changes in our reported revenue and profits in this report include the impacts of changes in foreign currency exchange rates. As additional information to the reader, we provide constant currency assessments in the tables and the narrative information in this MD&A to remove or quantify the impact of the fluctuation in foreign exchange rates and utilize constant currency results in our analysis of performance. Our constant currency financial results are calculated by translating the current period’s financial results at the same average exchange rates in effect during the applicable prior-year period and then comparing this amount to the prior-year period’s financial results.

### Results of Operations

#### Summary of Financial Results

Net sales for the first quarter of 2025 increased 9.5% to $249.5 million, an increase of $21.7 million, compared with the prior-year quarter. The addition of Hiya was the primary catalyst to year-over-year growth in consolidated net sales while the direct selling segment experienced modest declines during the quarter. A challenging economic and operating environment contributed to a decrease in active Customers in the direct selling segment, which was a key factor in the lower year-over-year performance. Additionally, unfavorable changes in currency exchange rates negatively impacted net sales by an estimated $5.6 million in the current year quarter.

Net earnings attributable to USANA for the first quarter of 2025 were $9.4 million, a decrease of 43.1% compared with $16.5 million during the prior-year quarter. Several items contributed to lower year-over-year net earnings during the current year quarter including amortization costs of acquired intangible assets as well as lower net interest income attributable to deploying cash reserves related to the acquisition of Hiya. The impact of a strong U.S. dollar on our operating model and lower net sales in the direct selling segment also contributed to lower year-over-year net earnings.

### Three Months Ended March 29, 2025 and March 30, 2024

#### Net Sales

The following table summarizes the changes in net sales by segment for the fiscal quarters ended as of the dates indicated:

| Direct Selling: Asia Pacific | Net Sales by Region (in thousands) Three Months Ended March 29, 2025 |  | March 30, 2024 |  | Change from prior year | Percent change | Currency impact on sales | Percent change excluding currency impact |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Greater China | $118,746 | 47.6% | $127,615 | 56.0% | $(8,869) | (6.9%) | $(2,015) | (5.4%) |
| Southeast Asia Pacific | 35,720 | 14.3% | 36,065 | 15.9% | (345) | (1.0%) | (118) | (0.6%) |
| North Asia | 18,941 | 7.6% | 21,421 | 9.4% | (2,480) | (11.6%) | (1,709) | (3.6%) |
| Asia Pacific total | 173,407 | 69.5% | 185,101 | 81.3% | (11,694) | (6.3%) | (3,842) | (4.2%) |
| Americas and Europe | 37,044 | 14.8% | 41,047 | 18.0% | (4,003) | (9.8%) | (1,749) | (5.5%) |
| Direct Selling total | 210,451 | 84.3% | 226,148 | 99.3% | (15,697) | (6.9%) | (5,591) | (4.5%) |
| Hiya | 37,089 | 14.9% | — | —% | 37,089 | N/A | — | N/A |
| Other | 1,999 | 0.8% | 1,652 | 0.7% | 347 | 21.0% | — | 21.0% |
| Consolidated total | $249,539 | 100.0% | $227,800 | 100.0% | $21,739 | 9.5% | $(5,591) | 12.0% |

#### Direct Selling Net Sales

Net sales in our direct selling business for the three-month period ended March 29, 2025 were $212.5 million, down 6.7% when compared to the corresponding period of 2024. On a constant currency basis, net sales in the direct selling segment declined 4.5%. A generally lower cadence of promotional activity during the current year quarter and a decrease in active Customer counts were the primary contributors to lower net sales in the direct selling segment. This decrease was partially offset by modest price increases and higher sales per active Customer.

Asia Pacific: Net sales declined 6.3%, or 4.2% on a constant currency basis, in this region during the current year quarter. Active Customers in this region declined 5.3% year-over-year. This decline reflects a lower cadence of promotional activity that was partially offset by higher sales per active Customer and modest price increases throughout the region. This decline was primarily concentrated in China and South Korea. Local currency net sales declined 5.3% in China on a 7.4% decrease in active Customers, partially offset by an increase of 2.3% in average spend per customer. Local currency net sales declined 3.6% in South Korea that was primarily attributable to a 5.6% decrease in average spend per customer, partially offset by a 2.3% increase in active Customers.

Americas and Europe: Net sales declined 9.8%, or 5.5% on a constant currency basis, in this region during the current year quarter. Active Customers in this region declined 14.1% year-over-year. Year-over-year results in this region reflect a continued challenging environment to attract new customers as well as the variability of the timing and type of promotional activity offered during the quarter. Net sales decreased 8.2% in the United States that was attributable, in great part, to a 16.7% decrease in active Customers and was partially offset by a 10.2% increase in average spend per customer. Local currency net sales decreased 8.4% in Mexico on lower active Customer counts.

#### Hiya Net Sales

Our Hiya direct-to-consumer net sales for the three-month period ended March 29, 2025 were $37.1 million. There were no sales in the corresponding period of 2024 as the acquisition of Hiya occurred in the fourth quarter of 2024.

#### Gross Profit

Gross profit decreased 210 basis points to 79.0% of net sales, down from 81.1% in the prior-year quarter. The decrease in gross profit is largely attributed to an approximate 300 basis point unfavorable impact on consolidated results from Hiya, which carries lower gross margins relative to the direct selling business. Gross margin in the direct selling business improved 90 basis points from the prior year to 81.9% of segment net sales. The increase in gross profit for the direct selling segment can primarily be attributable to the reorganization of our commercial team, a favorable change in market sales mix, and modest price increases, partially offset by unfavorable changes in currency exchange rates.

#### Associate Incentives

Associate incentives expense is incurred only in the direct selling segment. Associate incentives within the direct selling business increased 40 basis points to 42.4% of segment net sales, up from 42.0% in the prior-year quarter. The relative increase can be attributed to increased spend on promotional incentives, partially offset by market mix and modest price increases. On a consolidated basis, Associate incentives decreased 590 basis points to 36.1% of net sales, down from 42.0% in the prior-year quarter. This decrease can be attributed to inclusion of Hiya sales where no Associate incentives are paid.

#### Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $27.1 million in absolute terms during the current year quarter, or 830 basis points relative to net sales. The increase reflects an approximate 460 basis point unfavorable impact on consolidated results from the Hiya direct-to-consumer segment, which has a higher mix of selling, general and administrative expenses compared to the direct selling segment. Hiya's first quarter reflected normal seasonality of higher marketing spend, as well as the inclusion of amortization costs of acquired intangible assets. Our direct selling segment increased 370 basis points from the prior year to 32.0% of segment net sales. The increase is primarily due to a loss of leverage on lower year-over-year net sales and also reflects the change in the activities and organization of the commercial team.

#### Income Taxes

Income taxes increased to 44.5% of pre-tax earnings from the 39.0% reported in the comparable period of 2024, or 44.9% for fiscal 2024. The higher effective tax rate can be attributed primarily to the change in market mix of pre-tax income.

#### Diluted Earnings per Share Attributable to USANA

Diluted EPS attributable to USANA decreased to $0.49 as compared to $0.86 reported in the prior-year quarter. This decrease can be attributed to lower net earnings attributable to USANA driven, in great part, by amortization costs of acquired intangible assets, lower net interest income, an unfavorable impact from currency exchange rates, and lower net sales in the direct selling segment.

### Liquidity and Capital Resources

We have historically met our working capital and capital expenditure requirements by using net cash flow from operations and by drawing on our line of credit. Our principal source of liquidity is our operating cash flow. Although we are required to maintain cash deposits with banks in certain of our markets, there are currently no material restrictions on our ability to transfer and remit funds among our international markets. In China, however, our compliance with Chinese accounting and tax regulations promulgated by the State Administration of Foreign Exchange (“SAFE”) results in transfer and remittance of our profits and dividends from China to the United States on a delayed basis. If SAFE or other Chinese regulators introduce new regulations or change existing regulations which allow foreign investors to remit profits and dividends earned in China to other countries, our ability to remit profits or pay dividends from China to the United States may be limited in the future.

We believe our current liquidity, through cash flow from operations, is adequate to meet our cash requirements and sustain our operations. Maintaining a capital structure that emphasizes sufficient liquidity and adaptability in the prevailing economic climate is our top priority. We actively assess potential acquisition opportunities and investments in complementary ventures. While we continuously aim to preserve ample liquidity and ensure business continuity amid uncertainties, we also explore initiatives such as stock repurchases. These strategic decisions have the potential to impact our liquidity and the ability to navigate these challenging times effectively.

#### Cash and Cash Equivalents

Cash and cash equivalents decreased to $179.6 million as of March 29, 2025, from $181.8 million as of December 28, 2024. Cash flow provided by operating activities was $15.5 million, offset by cash used in financing activities of $14.5 million, and cash used in investing activities of $3.9 million. Additionally, favorable changes in currency exchange rates have impacted cash and cash equivalents, and restricted cash by $0.7 million.

The table below presents concentrations of cash and cash equivalents by market for the periods indicated:

|  | Cash and cash equivalents (in millions) As of March 29, 2025 | As of December 28, 2024 |
| --- | ---: | ---: |
| United States | $18.3 | $43.0 |
| China | 123.2 | 101.2 |
| All other markets | 38.1 | 37.6 |
| Total cash and cash equivalents | $179.6 | $181.8 |

#### Cash Flows Provided by Operations

As discussed above, our principal source of liquidity comes from our net cash flow from operations.

Net cash flow provided by operating activities was $15.5 million for the first three months of 2025. Net earnings combined with adjustments of non-cash items contributed positively to our net cash flow provided by operating activities, partially offset by cash used to pay the 2024 annual employee bonus, accrued associate incentives, and the purchase of inventories.

Net cash flow provided by operating activities was $17.7 million for the first three months of 2024. Net earnings attributable to USANA combined with adjustments of non-cash items contributed positively to our net cash flow provided by operating activities, partially offset by cash used to pay the 2023 annual employee bonus, accrued associate incentives and prepaid expenses.

#### Line of Credit

Information with respect to our line of credit may be found in Note G to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

#### Share Repurchase

Information with respect to share repurchases may be found in Note J to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

#### Summary

We believe our current cash balances, future cash provided by operations, and amounts available under our line of credit will be sufficient to cover our operating and capital needs in the ordinary course of business for the foreseeable future. If we experience an adverse operating environment or unanticipated and unusual capital expenditure requirements, additional financing may be required. No assurance can be given, however, that additional financing, if required, would be available to us at all or on favorable terms. We might also require or seek additional financing for the purpose of expanding into new markets, growing our existing markets, mergers and acquisitions, share repurchase, or for other reasons. Such financing may include the use of debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders.

### Critical Accounting Policies

There were no changes during the quarter to our critical accounting policies as disclosed in our 2024 Form 10-K. Our significant accounting policies are disclosed in Note A to our Consolidated Financial Statements filed with our 2024 Form 10-K.

## Market risk

As filed, 293 characters.

We have no material changes to the disclosures on this matter made in our 2024 Form 10-K. For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in the section entitled “Quantitative and Qualitative Disclosures About Market Risk” in the 2024 Form 10-K.

## Controls and procedures

As filed, 1,968 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information that is required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods that are specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding any required disclosure. In designing and evaluating these disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a- 15(e) under the Exchange Act). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 29, 2025.

### Changes in Internal Control Over Financial Reporting

On December 23, 2024, the Company acquired Hiya. We are currently in the process of integrating Hiya's controls and processes into our control environment and will incorporate Hiya in our assessment of the effectiveness of our internal control over financial reporting as of the end of 2025. Other than the change related to the integration of Hiya, as described above, there were no changes in our internal control over financial reporting during the three months ended March 29, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 264 characters.

Our business, results of operations, and financial condition are subject to various risks. Our material risk factors are disclosed in Part I, Item 1A of our 2024 Form 10-K. The risk factors identified in our 2024 Form 10-K have not changed in any material respect.

Filed May 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000896264-25-000126. Last ingested by Listed: Nov 3, 2026, 19:18 ET. No prices; not investment advice.