Suja Life, Inc.: Form 10-Q for the period ended Jun 29, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to our management. Actual results could differ materially from those discussed or implied by the forward-looking statements, as a result of various factors including those discussed below and in the section entitled “Forward-Looking Statements” included in this Quarterly Report on Form 10-Q and the sections entitled “Forward-Looking Statements” and “Risk Factors” included in the Prospectus. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended the Monday closest to December 31 for that year. For example, references to “fiscal 2025” refer to the fiscal year ended December 29, 2025 and references to “fiscal 2024” refer to the fiscal year ended December 30, 2024.

Overview

Suja Life is a modern beverage platform at the forefront of one of the most powerful consumer transformations of our time: the shift toward functional, better-for-you beverages. We operate at the intersection of health, taste, and trust, offering cold-pressed juices, wellness shots, and functional sodas that have become an essential part of consumers’ everyday routines. Our three brands — Suja Organic, Vive Organic, and Slice — form a complementary portfolio that reaches consumers across multiple beverage occasions.

Notwithstanding current macro-economic and competitive pressures on consumer spending and our categories, we believe our portfolio of brands, innovation leadership, operational excellence, and strong retail partnerships position us to continue to capture significant growth in the long-term as functional beverages continue to transition from early adoption to mainstream consumption.

Initial Public Offering

On May 8, 2026, we consummated our IPO of 8,888,889 shares of our Class A common stock at a public offering price of $21.00 per share, resulting in proceeds to us of approximately $173.6 million, less $13.1 million of underwriting discounts and commissions but before offering expenses payable by us.

In connection with the IPO, the Company completed the organizational transactions described in Note 1 of the condensed consolidated financial statements included herein.

As a result of the IPO, we incurred additional compensation related costs associated with modifications to incentive units outstanding prior to the IPO, and the issuance of (i) new performance-based restricted stock, (ii) performance-based restricted stock units and (iii) time-based restricted stock units under the Suja Life, Inc. 2026 Omnibus Incentive Plan (the “Omnibus Plan”) to certain of our employees and directors. Some of these actions are described in more detail in in Note 12 of the condensed consolidated financial statements included herein.

Segments

We have two reportable segments: Suja Core and Emerging Brands. Suja Core primarily produces and distributes cold-pressed juices and wellness shots. Suja Core reflects the financial results of Suja Organic’s and Vive Organic’s operations. Emerging Brands consists of recently acquired or launched brands and products that are still in the early stages of revenue scale, market development, or distribution build-out.

The Emerging Brands segment began producing and distributing products in December of fiscal 2024. For the three and six months ended June 29, 2026 and June 30, 2025, Emerging Brands’ products consist of healthy functional sodas sold under the Slice brand.

Key Factors Affecting Our Performance

We believe that the performance of our business and our future success depend upon several critical factors. While each presents significant opportunities, they also pose important challenges that we must successfully address to sustain growth and improve our results of operations.

Accelerating Adoption of Better-For-You Products

Consumer adoption of natural healthy beverages has accelerated as wellness becomes a universal priority, although category growth has moderated more recently. According to a Company survey conducted in September 2025, approximately 80% of consumers are constantly seeking beverages that are healthier, 82% of consumers want beverages with lower sugar, 90% of consumers desire additional functional benefits from their beverages, and 77% of consumers are willing to pay more for “beverages that are better for them,” demonstrating significant demand for wellness solutions.

We believe we have substantial opportunity to expand our consumer base and increase purchase frequency through broader distribution, optimized retail placement, and focused marketing efforts that communicate our functional benefits to target consumers. We believe targeted marketing investments can effectively capture this demographic and drive increased household adoption.

Increasing Velocity Through User Growth and Purchase Frequency

Our growth strategy focuses, in part, on both expanding our user base and increasing the frequency with which existing consumers purchase our products. As consumers integrate functional beverages into their daily wellness routines, purchase occasions may multiply across different dayparts and use cases. We seek to drive velocity growth through product innovation that creates new consumption occasions, strategic merchandising that increases visibility at retail, and consumer education that reinforces habitual usage patterns. Our role as category captain enables us to optimize shelf placement and promotional strategies that drive trial and repeat purchase. Additionally, our multi-brand portfolio allows us to drive cross-purchase of brands as consumers select products and brands aligned with their specific wellness needs. For customers tracked in a Nielsen report for the thirteen weeks ended June 27, 2026 (which represent less than half of our total net sales), our velocity rates declined in Q2 relative to the prior-year period. We expect this headwind to persist in the third quarter of 2026.

Continued Expansion of Our Retail Distribution Footprint

We have significant opportunity to increase distribution reach and make our products more readily accessible by driving store penetration in existing channels and expanding into new retail formats. We maintain deep relationships with several of the largest retailers in grocery, mass, natural, and club channels, and we believe substantial runway exists to deepen our portfolio offerings within these existing customers.

Beyond current retail partners, we are increasing our distribution breadth. Within new channels, we see significant whitespace in convenience stores and the broader away-from-home category. We are executing a convenience store penetration strategy with distribution wins at key national chains. Similarly, we currently have limited presence in away-from-home channels including college campuses, fitness facilities, and airports. We believe our functional benefits align strongly with on-the-go consumer behaviors and position us to penetrate and outperform in these high-frequency, impulse-driven retail environments.

Innovation Leadership Creating New Category Opportunities

Our success depends on maintaining innovation leadership that anticipates and addresses evolving consumer wellness needs. We take a highly focused, data-driven approach to product development, identifying opportunity areas based on consumer preferences and category insights derived from our advanced analytics capabilities.

Our innovation efforts focus on three strategic priorities: enhancing formulations and nutritional profiles of existing products, creating new offerings within established categories, and expanding into adjacent wellness segments such as our endeavor with Slice. We continue investing in innovation across our portfolio, with 11.6% of net sales growth for the three months ended June 29, 2026, when compared to the three months ended June 30, 2025 coming from our new SKUs. Our vertically integrated manufacturing platform enables rapid innovation cycles, bringing new products to market in weeks rather than months while maintaining superior quality standards. This speed-to-market advantage allows us to capitalize on emerging wellness trends often ahead of competitors.

Strategic M&A Accelerating Platform Growth

We have established ourselves as a strategic acquirer of choice in the Natural Health Beverage market, with a demonstrated track record of identifying and integrating premium brands that benefit from our platform capabilities. Our acquisition strategy focuses on brands with strong consumer loyalty, differentiated positioning, and proven product-market fit that can leverage our manufacturing scale, distribution relationships, and category insights to accelerate growth while improving margins.

With a fragmented market of emerging wellness brands seeking scale and operational expertise, we are well-positioned to continue consolidating the space through strategic, accretive acquisitions. Our platform approach — combining manufacturing capacity, distribution reach, category insights, and marketing capabilities — creates substantial value for acquired brands while strengthening our competitive position and expanding our addressable market opportunity.

We strive for successfully integrated businesses complementary to our own, such as Vive Organic, to increase both our distribution reach and our product capabilities. We continuously evaluate acquisitions and intend to further pursue targeted acquisitions that complement our product capabilities or provide us access to new markets. We have previously made and intend to continue to make acquisitions with the objective of enhancing our human capital, product capabilities, entering natural adjacencies, and expanding geographic footprint. Our ability to successfully pursue strategic acquisitions is dependent upon a number of factors, including sustained execution of a disciplined and selective acquisition strategy and our ability to effectively integrate targeted companies or assets and grow our business. We do not have agreements or commitments for any significant acquisitions at this time.

Economic and Competitive Conditions

Consumer demand for our products is sensitive to a number of factors that influence consumer confidence and spending, such as general economic conditions, consumer disposable income, recession and fears of recession, unemployment, minimum wages, inflation, consumer confidence in future economic conditions and political conditions, and consumer perceptions of personal well-being and security. Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected, and economic pressures have recently caused consumers to change how and where they spend. Functional and other specialty beverages in particular may be, and have been, more susceptible to discretionary consumer spending levels. In addition, competitors have been lowering prices and increasing promotional activity as a result of shoppers seeking value, which we expect will impact our results in the third quarter of 2026.

Impact of Seasonality

Seasonality can influence our results of operations from quarter to quarter. We tend to generate a higher percentage of our annual net sales in the first and fourth quarters of each year. In the first quarter, consumers tend to focus their purchases more heavily on healthy and functional beverages to support “new year, new you” and “back to health” trends, while in the fourth quarter, consumers tend to focus their purchases more heavily on immunity and staying healthy in the cold and flu season.

Components of Our Results of Operations

Net Sales

We generate sales through the sale of functional and health-focused beverages. Our sales are predominantly made to retailers or distributors for final sale to consumers through retail channels, which include sales to traditional brick and mortar and online retailers. We also offer our products through our own website.

We offer sales incentives to our customers that are designed to support the distribution of our products to consumers. These incentives include discounts, trade promotions and price allowances. These amounts are deducted from gross sales to arrive at our net sales.

We have historically experienced substantial growth in net sales since inception. The following factors and trends in our business have driven net sales growth over this period and are expected to continue to be key drivers of our net sales growth for the foreseeable future:

• increasing sales velocity across all channels by increasing awareness, trial, and adoption of our products. Our investments in marketing and advertising help to drive awareness and trial across all points of sale;
• expanding of our retailer and distribution network across new and existing channels;
• focusing on product innovation by improving the formulations and nutrition of our existing products, creating new products within our existing categories, and expanding into new product categories; and
• continuing to assess accretive M&A opportunities to accelerate category leadership and expand reach into complementary, high growth markets.

Cost of Sales

Cost of sales includes raw materials, direct and indirect labor and other costs associated with production, such as inbound freight and plant expenses, depreciation, and amortization expense. Cost of sales are impacted by macroeconomic factors including, but not limited to, inflationary pressures and tariffs.

Gross Profit

Gross profit is net sales less cost of sales. Gross profit has been, and will continue to be, affected by various factors, including the mix of products we sell, the channel through which we sell our products, the promotional environment in the marketplace, manufacturing costs, commodity prices and freight rates.

Operating Expenses

Operating expenses include marketing expenses, sales expenses, amortization expenses, and general and administrative expenses. Selling and marketing expenses consist primarily of costs incurred marketing and ensuring on-shelf availability of our products and are primarily driven by investments to grow our business and acquire and retain customers. General and administrative expense includes payroll, employee benefits, incentive unit compensation, finance, information technology, human resources and other administrative-related personnel, as well as general overhead costs of the business, including research and development for new innovations, rent and related facilities and maintenance costs, freight costs, depreciation and amortization and legal, accounting and professional fees. We expect operating expenses to increase as we continue to scale our operations to meet our product demand, continue to build our product portfolio, and add personnel to our sales and marketing organization. We also incur additional costs associated with operating as a public company, including increased expenses related to legal, audit, accounting, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, investor and public relations costs, and other administrative and professional services.

Initial Public Offering - Transaction Costs and Loss on Debt Extinguishment

As a result of the consummation of our IPO, the Company recognized certain costs that are typically categorized as operating expenses within the Transaction costs financial statement line item. These costs consisted of non-recurring costs directly attributable to the IPO, including IPO-related professional fees and expenses, equity-based compensation costs incurred as a result of the acceleration and modification of equity awards in connection with the IPO, one-time IPO-related transaction bonuses, and investor relations and travel expenses.

Further, as part of the IPO, the Company also recognized a loss on debt extinguishment as a portion of the proceeds from the IPO were used to repay $142.6 million of outstanding borrowings under the Credit Agreement. The repayment represented a partial extinguishment of the Term Loan, including separately identified debt issuance costs and contractual prepayment premiums, and a repayment of then outstanding borrowings under the Revolver Credit Facility.

Interest Expense

Interest expense consists of interest on our financing arrangements as well as any related deferred financing costs and discounts being expensed over the life of such financing arrangements.

Provision For (Benefit From) Income Taxes

Provision for (benefit from) income taxes consists primarily of income taxes in U.S. federal, state, and local jurisdictions and certain foreign jurisdictions in which we conduct business.

Results of Operations

Comparison of the Three and Six Months Ended June 29, 2026 and June 30, 2025

The following table summarizes our unaudited condensed consolidated statements of operations for each of the periods indicated. The comparisons of our historical results are not necessarily indicative of the results that may be expected in the future, and the quarter-to-quarter comparisons are not necessarily indicative of the results to be expected for the full year or any other period. Our operations are primarily driven by the Suja Core segment given that the Emerging Brands segment has not yet had a significant impact on our overall business performance.

($ in thousands)

* Not meaningful

Net Sales

The following table provides a comparative summary of the Company’s net sales:

($ in thousands)

On a consolidated basis, net sales increased by $8.7 million, or 11.6% to $83.9 million for the three months ended June 29, 2026, from $75.2 million for the three months ended June 30, 2025. On a consolidated basis, net sales increased by $28.4 million, or 17.5% to $190.9 million for the six months ended June 29, 2026, from $162.5 million for the six months ended June 30, 2025. The increase in net sales was primarily driven by higher volumes within the Suja Core Segment and Emerging Brands Segment due to increased consumer demand.

Suja Core Segment

Net sales for Suja Core were $81.9 million for the three months ended June 29, 2026, an increase of $7.3 million, or 9.8%, from $74.6 million for the three months ended June 30, 2025. This increase was primarily driven by a 6.9% increase in selling units shipment volume attributable to growth in Suja Single Serve Juice and Suja and Vive Shots reflecting expanded distribution of new products and improved consumer takeaway across several key retail customers. In addition, multi-pack consumer purchases, particularly within the Suja and Vive Shots portfolio, grew at a faster rate than single-serve purchases, resulting in a slightly higher average price per selling unit. Growth in the quarter versus prior year was partially offset by slightly unfavorable shipment timing at the beginning of the three months ended June 29, 2026 that benefitted the previous three months ended March 30, 2026. Net sales for Suja Core were $186.9 million for the six months ended June 29, 2026, an increase of $25.9 million, or 16.1%, from $161.0 million for the six months ended June 30, 2025. This increase was primarily driven by expanded distribution of new products, improved consumer takeaway, and more effective promotional execution with key retailers.

Emerging Brands Segment

Net sales for Emerging Brands were $3.0 million for the three months ended June 29, 2026, an increase of $1.1 million, or 61.2%, from $1.9 million for the three months ended June 30, 2025. This increase was primarily driven by a 72.1% increase in selling units shipment volume, reflecting expanded distribution for new products and improved consumer takeaway across several key retail customers. Net sales for Emerging Brands were $6.1 million for the six months ended June 29, 2026, an increase of $2.0 million, or 50.0%, from $4.0 million for the six months ended June 30, 2025. This increase was primarily driven by expanded distribution and improved consumer takeaway.

Cost of Sales and Gross Profit

($ in thousands)

Cost of Sales

On a consolidated basis, cost of sales increased $5.1 million, or 13.0%, to $44.7 million for the three months ended June 29, 2026, from $39.5 million for the three months ended June 30, 2025. On a consolidated basis, cost of sales increased $12.9 million, or 15.2%, to $97.6 million for the six months ended June 29, 2026, from $84.7 million for the six months ended June 30, 2025.

Suja Core Segment

For the three months ended June 29, 2026, the increase was driven by a $5.0 million increase of Suja Core cost of sales. Suja Core cost of sales increased as a result of the 6.9% growth in selling units shipment volume. Operational efficiency gains were offset by slightly higher input and logistics costs and unfavorable absorption timing as finished goods inventory was built during the three months ended March 30, 2026 to satisfy shipment demand in the three months ended June 29, 2026, resulting in unfavorable absorption as those goods were shipped and inventory returned to historical levels in the three months ended June 29, 2026. For the six months ended June 29, 2026, the increase was driven by a $12.7 million increase of Suja Core cost of sales. Suja Core cost of sales increased as a result of the 7.7% growth in selling units shipment volume. Operational efficiency gains were partially offset by slightly higher input and logistics costs and unfavorable package mix as multi-pack consumer purchases, particularly within the Suja and Vive Shots portfolio, grew at a faster rate than single-serve purchases. Multi-packs have higher manufacturing and packaging costs than single-serve packages.

Emerging Brands Segment

Cost of sales for Emerging Brands was $1.7 million for the three months ended June 29, 2026 and $1.6 million for the three months ended June 30, 2025. Cost of sales for Emerging Brands was $3.1 million for the six months ended June 29, 2026 and $2.9 million for the six months ended June 30, 2025. In each case, lower finished goods costs per unit, driven by the absence of one-time startup costs incurred in fiscal 2025 and reduced input costs from sourcing efficiencies, nearly offset all cost increases associated with increased net sales.

Gross Profit

On a consolidated basis, gross profit increased by $3.5 million, or 9.9% to $39.2 million for the three months ended June 29, 2026, from $35.6 million for the three months ended June 30, 2025. On a consolidated basis, gross profit increased by $15.5 million, or 19.9%, to $93.3 million for the six months ended June 29, 2026, from $77.8 million for the six months ended June 30, 2025.

Suja Core Segment

For the three months ended June 29, 2026, Suja Core gross profit increased by $2.3 million, which increase was driven by an increase in Suja Core selling units volume from expanded distribution and improved consumer takeaway. Gross margin was 47.5% for the three months ended June 29, 2026 and 49.1% for the three months ended June 30, 2025 as operational efficiency gains were offset by unfavorable absorption timing and slightly higher input and logistics costs. For the six months ended June 29, 2026, Suja Core gross profit increased by $13.2 million, which increase was driven by an increase in Suja Core selling units volume and improved absorption from higher production volume. Gross margin was 49.4% for the six months ended June 29, 2026 and 49.2% for the six months ended June 30, 2025. This was due to more effective promotional execution and unfavorable multi-pack package mix as multi-packs have higher manufacturing and packaging costs than single-serve packages.

Emerging Brands Segment

For the three months ended June 29, 2026, Emerging Brands gross profit increased by $1.0 million, which increase was driven by growth in Emerging Brands selling units volume from increased distribution and improved consumer takeaway. The average cost of sales per selling unit decreased 41% from sourcing efficiencies, and one-time startup costs incurred in fiscal 2025 that were not repeated in fiscal 2026, resulting in a gross margin increase to 44.1% for the three months ended June 29, 2026, compared to 16.3% for the three months ended June 30, 2025. For the six months ended June 29, 2026, Emerging Brands gross profit increased by $1.8 million driven by growth in Emerging Brands selling units volume from increased distribution and improved consumer takeaway. The average cost of sales per selling unit decreased 55% benefitting from sourcing efficiencies and one-time startup costs incurred in fiscal 2025 that were not repeated in fiscal 2026, resulting in a gross margin increase to 48.1% for the six months ended June 29, 2026, compared to 27.1% for the six months ended June 30, 2025.

Operating Expenses, Initial Public Offering - Transaction Costs and Loss on Debt Extinguishment

($ in thousands)

Operating expenses and transaction costs for the three months ended June 29, 2026 were $59.7 million, which includes $25.1 million in one-time IPO-related transaction costs. Operating expenses were $34.6 million, an increase of $0.9 million, or 2.6% from $33.8 million for the three months ended June 30, 2025. This increase in operating expenses was primarily due to a $0.9 million increase in freight expenses, driven by increased shipment volume and a $2.9 million increase in administrative, sales, payroll, and other operating expenses primarily attributable to selling-related costs, IT efficiency project implementation costs and personnel, and public company costs, partially offset by a $3.4 million decrease in marketing spend related to general advertising, branding, shopper marketing, samples, and field marketing. Of the decrease in marketing spend, $3.2 million relates directly to the Emerging Brands segment and a $0.2 million decrease in marketing spend within the Suja Core segment.

Operating expenses and transaction costs for the six months ended June 29, 2026 were $97.5 million, which includes $25.1 million in one-time IPO-related transaction costs. Operating expenses were $72.5 million, an increase of $4.0 million, or 5.9%, from $68.4 million for the six months ended June 30, 2025. This increase in operating expenses was primarily due to a $2.5 million increase in freight expenses, driven by increased shipment volume and a $4.6 million increase in administrative, sales, payroll, and other operating expenses primarily attributable to selling-related costs, IT efficiency project implementation costs and personnel and public company costs, partially offset by a $3.5 million decrease in marketing spend related to general advertising, branding, shopper marketing, samples, and field marketing. Of the decrease in marketing spend,$3.9 million relates directly to the Emerging Brands segment, offset by a $0.4 million increase in marketing spend within the Suja Core segment.

As a result of the Company’s IPO, a total of $27.3 million costs were recognized for the three and six months ended June 29, 2026 and June 30, 2025. These costs included one-time IPO-related transaction costs of $25.1 million and loss on debt extinguishment of $2.3 million.

Interest Expense

Interest expense was $5.4 million for the three months ended June 29, 2026 compared to $7.5 million for the three months ended June 30, 2025, a decrease of $2.1 million. Interest expense was $12.9 million for the six months ended June 29, 2026 compared to $14.9 million for the six months ended June 30, 2025, a decrease of $2.0 million. Interest expense decreased between periods as IPO proceeds were used to pay down debt.

Adjusted EBITDA

Adjusted EBITDA for the three months ended June 29, 2026 was $14.6 million, an increase of $4.9 million, or 50.0%, from $9.8 million for the three months ended June 30, 2025. Adjusted EBITDA for the six months ended June 29, 2026 was $39.7 million, an increase of $14.9 million, or 59.9%, from $24.8 million for the six months ended June 30, 2025.

Suja Core Segment

Suja Core Segment Adjusted EBITDA for the three months ended June 29, 2026 was $16.0 million, an increase of $0.5 million, or 2.9%, from $15.5 million for the three months ended June 30, 2025. The increase in Suja Core Adjusted EBITDA was driven by an increase in gross profit of $2.3 million, or 6.3%, as described above, offset by a $1.9 million decrease in other segment items. Other segment items include marketing costs, personnel costs comprised of sales commissions and bonuses, logistical costs to distribute products, and other general and administrative costs.

Suja Core Segment Adjusted EBITDA for the six months ended June 29, 2026 was $42.9 million, an increase of $8.6 million, or 25.1%, from $34.3 million for the six months ended June 30, 2025. The increase in Suja Core Adjusted EBITDA was driven by an increase in gross profit of $13.2 million, or 16.6%, as described above, offset by a $4.6 million increase in other segment items. Other segment items include marketing costs, personnel costs comprised of sales commissions and bonuses, logistical costs to distribute products, and other general and administrative costs.

Emerging Brands Segment

Emerging Brands Segment Adjusted EBITDA loss for the three months ended June 29, 2026 was $1.3 million, compared to $5.8 million for the three months ended June 30, 2025, with the loss decreasing by $4.4 million period over period. The decrease in loss was driven by an increase in gross profit of $1.0 million, as described above, and a $3.4 million decrease in other segment items, driven by reduced marketing spend.

Emerging Brands Segment Adjusted EBITDA loss for the six months ended June 29, 2026 was $3.2 million, compared to $9.5 million for the six months ended June 30, 2025, with the loss decreasing by $6.3 million period over period. The decrease in loss was driven by an increase in gross profit of $1.8 million, as described above, and a $4.4 million decrease in other segment items, driven by reduced marketing spend.

Provision for Income Taxes

The Company calculates its tax provision in interim periods in accordance with ASC 740, Income Taxes, using an estimated annual effective tax rate adjusted for discrete items as applicable. The Company incurred income tax expense of $0.1 million in the pre-IPO period from December 30, 2025 through May 7, 2026. For the period from May 8, 2026 through June 29, 2026, the Company recorded income tax expense of $0.5 million. The Company’s effective tax rate differs from the U.S. statutory rate primarily due to the organizational transactions in connection with the IPO and the recording of a full valuation allowance in the second quarter of fiscal 2026.

For the six months ended June 29, 2026, the Company recorded income tax provisions of $0.6 million. For the six months ended June 30, 2025, the Company recorded income tax provisions of $1.0 million. The Company’s effective tax rate differs from the U.S. statutory rate primarily due to the organizational transactions in connection with the IPO and the recording of a full valuation allowance in the second quarter of fiscal 2026. The decrease in the tax provision was primarily due to organizational transactions in connection with the IPO and the recording of a full valuation allowance in the second quarter of fiscal 2026.

Non-GAAP Financial Measures

We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results, and provides additional insight and transparency into how we evaluate the business. We use non-GAAP financial measures to budget, make operating and strategic decisions and evaluate our performance. We have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below. We believe the non-GAAP measures should always be considered along with, and not as substitutes for, the related GAAP financial measures. These non-GAAP financial measures have limitations, including that they may be calculated differently by other companies, including companies in our industry, or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. Our non-GAAP financial measures should not be considered in isolation or as alternatives to gross profit, income (loss) from operations, net cash provided used in operating activities or any other measure of financial performance calculated and presented in accordance with GAAP. We have provided the reconciliations between the GAAP and non-GAAP financial measures below.

Our primary non-GAAP financial measures are listed below and reflect how we evaluate our current and prior-period operating results. As new events or circumstances arise, these definitions could change. When the definitions change, we will provide the updated definitions and present the related non-GAAP historical results on a comparable basis.

EBITDA, Adjusted EBITDA, EBITDA margin and Adjusted EBITDA margin

We report our financial results in accordance with GAAP, however, management believes evaluation of operating results may be enhanced by a presentation of EBITDA and Adjusted EBITDA, EBITDA margin and Adjusted EBITDA margin which are non-GAAP financial measures. We define EBITDA as net income (loss) as adjusted to exclude tax expense, net interest expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to exclude share-based compensation expense, transaction-related costs and adjustments, sponsor fees which will not recur subsequent to our initial public offering, and other non-recurring expenses.

EBITDA and Adjusted EBITDA are two of the key performance indicators we use in evaluating our operating performance and in making financial, operating and planning decisions. In particular, the exclusion of certain expenses in calculating EBITDA and Adjusted EBITDA facilitates operating performance comparability across reporting periods by removing the effect of certain expenses that are non-recurring, non-cash, or expenses that are not part of the Company’s core business operations. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. EBITDA margin and Adjusted EBITDA margin are non-GAAP financial measures that represent EBITDA and Adjusted EBITDA divided by net sales for the applicable period, expressed as a percentage. We consider EBITDA margin and Adjusted EBITDA margin to be useful measures in highlighting trends in our business.

We believe it is useful to exclude non-cash charges, such as depreciation and amortization, and share-based compensation because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude tax expense, net interest expense, sponsor management fees and non-routine items, such as transaction costs and certain other non-recurring expenses, as these items are not components of our core business operations. Moreover, EBITDA and Adjusted EBITDA are frequently used by analysts, investors and other interested parties to evaluate companies in our industry.

The following table reconciles Segment and Adjusted EBITDA to consolidated Adjusted EBITDA:

($ in thousands)

38

The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP performance measures:

($ in thousands)

(1) Non-Recurring Costs - for the three and six months ended June 29, 2026 consists of one-time costs relating to corporate strategy, executive recruiting and consulting relating to the IPO. For the three and six months ended June 30, 2025, it consists of consulting fees related to one-time system improvements, transaction bonuses, and other one-time transition costs.

(2) Sponsor Costs - Includes fees paid in cash to the Company’s sponsor which will not recur subsequent to the IPO.

(3) Transaction Costs - Consists of non-recurring costs directly attributable to the Company's IPO, including IPO-related professional fees and expenses, equity-based compensation costs incurred as a result of the acceleration and modification of equity awards in connection with the IPO, one-time IPO-related transaction bonuses, roadshow and investor relation expenses, travel and logistical expenses related to IPO launch activities including NASDAQ listing events. These items are non-recurring in nature and do not reflect the Company's ongoing operating performance.

Liquidity and Capital Resources

General

We are a holding company with no operations of our own, and as such, we will depend on our subsidiaries for cash to fund all of our operations and expenses. We will depend on the payment of distributions by our current and future subsidiaries. The terms of the agreements governing our indebtedness, including the first lien credit agreement, dated August 23, 2021 (as amended, the “Credit Agreement”), contain certain negative covenants prohibiting certain of our subsidiaries from making cash dividends or distributions to us or to Holdings LP unless certain financial tests are met. For a discussion of those restrictions, refer to the sections entitled “Description of Certain Indebtedness” and “Risk Factors” included in the Prospectus. We currently anticipate that such restrictions will not impact our ability to meet our cash obligations.

Our primary cash needs are for operating expenses, working capital and capital expenditures to support the growth of our business. Historically, we have financed our operations through sales of equity securities, the issuance of related party notes, and through sales of our products and borrowings under our term loan facilities (“Term Loan Facilities”). As of June 29, 2026, our principal source of liquidity was our cash of $20.6 million which does not include restricted cash, as well as the available balance of our revolving loan facility (“Revolving Credit Facility”). Restricted cash includes certificates of deposit with maturities of six months, which are required collateral for our credit cards.

We believe our existing cash and restricted cash, our Revolving Credit Facility and cash provided by sales of our products will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced product offerings and the continuing market acceptance of our products. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new products, manufacturing or distribution capabilities, this could reduce our ability to compete successfully and harm our results of operations. While we believe our existing cash and restricted cash, our Revolving Credit Facility and cash provided by sales of our products will be sufficient to meet our future working capital and capital expenditure needs, we can provide no assurance that our liquidity and capital resources will meet future funding requirements.

As a result of our ownership of units in Holdings LP after the IPO, we are subject to U.S. federal, state and local income taxes with respect to our allocable share of any net taxable income of Holdings LP and will be taxed on such income at the applicable corporate tax rates. In addition to tax expenses, we will incur expenses related to our operations, including obligations to make payments under the tax receivable agreement (the “Tax Receivable Agreement”) to certain existing direct or indirect owners of Holdings LP, including PSP (such persons, collectively, the “TRA Parties”). The amounts payable, as well as the timing of any payments, under the Tax Receivable Agreement are dependent upon future events and assumptions, including the timing of unit exchanges in Holdings LP, the price of our Class A common stock at the time of each exchange, the extent to which such exchanges are taxable transactions, the amount of the exchanging Holdings LP unitholder’s tax basis in its units of Holdings LP at the time of the relevant exchange, the depreciation and amortization periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future, the U.S. federal, state and local income tax rates then applicable and the portion of any payments under the Tax Receivable Agreement that constitute imputed interest or give rise to depreciable, depletable or amortizable tax basis; however, we estimate that such payments may be substantial. We currently anticipate funding any required payments to the TRA Parties under the Tax Receivable Agreement using cash flows generated from our operations. As a result, these payments may reduce the amount of overall cash flow that would otherwise be available to us for other purposes. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, and based on certain assumptions with respect to future exchanges and other items, we expect that future payments under the Tax Receivable Agreement relating to unit exchanges in Holdings LP (either in connection with the IPO or in the future) to be approximately $121.8 million and to range from approximately $0.0 million to $10.7 million per year, with estimated total payments of approximately $147.2 million. Further, assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, we expect that future payments under the Tax Receivable Agreement relating to the utilization of certain pre-IPO tax attributes acquired in the organizational transactions to be approximately $25.4 million and to range from approximately $0.0 million to $2.6 million per year. As a result, we expect that aggregate payments under the Tax Receivable Agreement over this 35-year period will range from approximately $0.0 million to $11.9 million.

Indebtedness

Credit Agreement

The Credit Agreement provides for a $120 million initial term loan facility (the “Initial Term Loan Facility”) and $25 million Revolving Credit Facility. On December 8, 2021, we entered into a first amendment to the Credit Agreement, providing for certain technical amendments to the Credit Agreement. On October 11, 2022, we entered into a second amendment to the Credit Agreement providing for an additional $42 million second amendment term loan facility (the “Second Amendment Term Loan Facility”). On October 31, 2024, we entered into a third amendment to the Credit Agreement, providing for an additional $112 million third amendment term loan facility (the “Third Amendment Term Loan Facility”) and a $15 million increase in the commitments in respect of the Revolving Credit Facility. On January 13, 2026, we entered into a fourth amendment to the Credit Agreement, providing for an additional $15 million fourth amendment delayed draw term loan facility (the “Fourth Amendment Delayed Draw Term Loan Facility”). The Initial Term Loan Facility had an upfront fee discount of 2.0% of the aggregate principal amount of the commitments and 2.0% of the aggregate principal amount of the Revolving Credit Facility as of the borrowing date. The Second Amendment Term Loan Facility had a fee discount of 2.0% of the aggregate principal amount of the commitments under the Second Amendment Term Loan Facility. The Third Amendment Term Loan Facility had an upfront fee discount of 1.50% of the aggregate principal amount of the commitments under the Third Amendment Term Loan Facility. The Fourth Amendment Delayed Draw Term Loan Facility had an upfront fee discount of 0.75% of the aggregate principal amount of the commitments under the Fourth Amendment Delayed Draw Term Loan Facility. All outstanding principal and accrued and unpaid interest on the Term Loan Facilities is due and payable on August 23, 2029. All outstanding principal and accrued and unpaid interest on the Revolving Credit Facility is due and payable on August 23, 2028. All obligations under the Credit Agreement are secured by first-priority security interests in substantially all of our assets and the assets of our domestic subsidiaries, subject to permitted liens and other exceptions.

In connection with the IPO, the Company repaid a portion of its outstanding borrowings under the Credit Agreement using the net proceeds from the offering. The Company repaid approximately $101.3 million of the principal balance outstanding under the Term Loan, and $40.0 million outstanding balance under the Revolving Credit Facility. In connection with these prepayments, the Company paid a contractual prepayment premium of approximately $1.0 million and accrued interest of approximately $0.4 million.

In accordance with ASC 470-50, Debt—Modifications and Extinguishments, the Company recognized a loss on extinguishment of debt of approximately $2.3 million in the second quarter of fiscal 2026, which consisted of the $1.0 million prepayment premium and approximately $1.3 million in unamortized deferred financing costs. The unamortized deferred financing costs written off were those attributed to the extinguished portion of the Term Loan Facility. The repayment of the Revolving Credit Facility balance did not result in a write-off of related debt issuance costs, as the facility remains available for future borrowings.

Borrowings under the Term Loan Facilities accrue daily interest at a per annum rate equivalent to, (i) a base rate plus the applicable margin set forth below under the caption “Base Rate Loan” or (ii) an adjusted term Secured Overnight Financing Rate (“SOFR”) rate plus a term SOFR adjustment equal to 0.10%, 0.15% or 0.25%, depending on the interest period of the applicable borrowing, plus the applicable margin set forth below under the caption “Term Benchmark Loan / RFR Loan,” in each case, based upon the consolidated net leverage ratio as of the most recent date of determination. The base rate is the highest of (i) the prime rate at such time, (ii) 1/2 of 1.00% in excess of the federal funds effective rate at such time and (iii) an adjusted term SOFR rate for a term benchmark loan with a one-month interest period commencing at such time plus 1.00%.

The Credit Agreement requires us to maintain a condensed consolidated net leverage ratio below 5.50 to 1.00 for each quarter from March 2026 through December 2026, 4.50 to 1.00 for each quarter from March 2027 through December 2027, and 3.50 to 1.00 for each quarter from March 2028 thereafter. We are in compliance with our debt covenant.

As of June 29, 2026, we had $164.9 million outstanding under the Credit Agreement.

Cash Flows

The following table presents the major components of net cash flows from and used in operating, investing and financing activities for the periods indicated:

($ in thousands)

Operating Activities

Net cash used in operating activities was $(5.1) million for the six months ended June 29, 2026 compared to $(3.0) million for the six months ended June 30, 2025. Operating cash flows decreased primarily due to a decrease in net income of $(13.6) million and a $(3.3) million change in working capital. The decrease in working capital was primarily attributable to a $5.7 million increase in cash provided by inventories due to improved inventory turnover driven by increased sales volumes, partially offset by increases in cash used for accounts payable of $3.5 million and cash used in accrued expenses of $6.8 million, primarily due to the timing of vendor and operating expense payments associated with increased business activities, purchases, and accrued compensation expenses. The decrease in operating cash flows was offset by an increase in stock-based compensation of $12.9 million and an increase due to loss on debt extinguishment of $1.3 million.

Investing Activities

Net cash used in investing activities was $13.9 million for the six months ended June 29, 2026 compared to $6.4 million for the six months ended June 30, 2025. The change was primarily due to an increase in purchases of property and equipment.

Financing Activities

Net cash provided by financing activities was $8.6 million for the six months ended June 29, 2026 compared to $1.7 million for the six months ended June 30, 2025. The change was primarily due to an increase in principal payments on finance lease obligations, particularly the repayment of a portion of the outstanding Term Loan and Revolving Credit Facility using the net proceeds from the IPO.

Contractual Obligations and Commitments

Contractual obligations for future payments as of June 29, 2026 primarily relate to lease commitments, raw material purchase obligations, and principal debt payments. Operating and financing leases represent minimum required lease payments during the noncancelable lease term. Most real estate leases also require payment of related operating expenses such as taxes, insurance, utilities, and maintenance, which are not included in our estimated capital lease obligation. Our total estimated finance and operating lease obligations as of December 29, 2025 were $26.7 million, of which $2.6 million is payable within 12 months. Our total estimated finance and operating lease obligations as of June 29, 2026 were $28.6 million, of which $2.8 million is payable within 12 months.

Contingencies

From time to time, we may be party to certain legal actions arising in the ordinary course of business. We accrue for losses from a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. There are inherent uncertainties in legal proceedings that make it difficult to reasonably estimate costs and effects of resolving such matters. Accordingly, actual costs incurred may differ materially from amounts accrued, may exceed applicable insurance coverage, and could materially adversely affect our business, cash flows, results of operations, financial condition, and prospects.

Indemnification Agreements

In the normal course of business, we provide indemnification of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our products, and from time to time we may be subject to claims by our customers under these indemnification provisions. Historically, costs related to these indemnification provisions have not been significant, but we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations. To the extent permitted under Delaware law, we will enter into agreements whereby we indemnify our directors and officers for certain events or occurrences while the director or officer is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that limits our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

Critical Accounting Estimates

In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of the financial statements include but are not limited to the following: inventory valuation, impairment of goodwill, intangible assets and long-life assets, share-based compensation, and useful lives of property, plant and equipment and intangible assets. Management believes these estimates and assumptions provide a reasonable basis for the fair presentation of the condensed consolidated financial statements. Actual results could differ from those estimates. There have been no material changes to our critical accounting policies and estimates as described in the Prospectus.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (the “JOBS Act”) permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies, and our condensed consolidated financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of the IPO, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years, or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Recent Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 1 to the Company’s condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure due to potential changes in inflation or interest rates.

Inflation Risk

While inflation may impact our revenue and costs of revenue, we believe the effects of inflation, if any, on our results of operations and financial condition have not been significant. However, there can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future.

Interest Rate Risk

Our exposure to interest rate risk is related primarily to our borrowing activities for our variable rate borrowing. As of June 29, 2026 and December 29, 2025, we had total outstanding debt of $164.9 million and $307.5 million under our Credit Agreement, respectively. Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a 12-month period would result in a change to interest expense of approximately $1.6 million for the six months ended June 29, 2026.

Concentration of Credit Risk

Financial instruments that potentially expose us to concentrations of credit risk consist principally of cash, restricted cash, and accounts receivable. We place our cash with financial institutions with high credit quality. As of June 29, 2026 and December 29, 2025, we had $21.6 million and $32.0 million of cash on deposit or invested with our financial and lending institutions, respectively.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 29, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 29, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 29, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Information regarding our risk factors is disclosed under the section entitled “Risk Factors” in the Prospectus, with such risk factors incorporated herein by reference. Please refer to that section for disclosures regarding the risks and uncertainties related to our business.