Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our condensed consolidated financial statements including the related notes thereto, included elsewhere in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q contains both historical information and, "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and 27A of the Securities Act of 1933, as amended. All statements other than statements of historical fact included that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements, including, in particular, the statements about our plans, objectives, strategies and prospects regarding, among other things, our financial condition, results of operations and business. We have identified some of these forward-looking statements with words like "believe," "may," "will," "should," "expect," "intend," "plan," "predict," "anticipate," "estimate" or "continue" and other words and terms of similar meaning. These forward-looking statements may be contained throughout this Quarterly Report on Form 10-Q. These forward-looking statements are based on current expectations about future events affecting us and are subject to uncertainties and factors relating to, among other things, our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Many factors mentioned in our discussion in this Quarterly Report on Form 10-Q, including the risks outlined under "Risk Factors," will be important in determining future results. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we do not know whether our expectations will prove correct. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including those described under "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A, "Risk Factors," of the Annual Report on Form 10-K. Since our actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements, we cannot give any assurance that any of the events anticipated by these forward-looking statements will occur or, if any of them does occur, what impact they will have on our business, results of operations and financial condition. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. We do not undertake any obligation to update these forward-looking statements, or the risk factors contained in this Quarterly Report on Form 10-Q, to reflect new information, future events or otherwise, except as may be required under federal securities laws.

Important factors that could cause actual results to differ materially from the forward-looking statements made in this Quarterly Report on Form 10-Q include but are not limited to: the almost exclusive focus of our business on the aerospace and defense industry; our reliance on certain customers; failure to complete or successfully integrate acquisitions; the sensitivity of our business to the number of flight hours that our customers' planes spend aloft and our customers' profitability, both of which are affected by general economic conditions; future geopolitical or other worldwide events; cyber-security threats and natural disasters; the U.S. defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; tariffs on certain imports to the United States and other potential changes to U.S. tariff and import/export regulations; our indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with our international sales and operations; and other factors. Refer to Part II, Item 1A included in this Quarterly Report on Form 10-Q and to Part I, Item 1A of the Annual Report on Form 10-K for additional information regarding the foregoing factors that may affect our business.

Overview

We specialize in the design, manufacture, and sale of niche aerospace and defense components that are essential for today's aircraft and aerospace and defense systems. We focus on mission-critical, highly engineered solutions with high intellectual property content. Furthermore, our products have significant aftermarket exposure, which has historically generated predictable and recurring revenue.

The products we manufacture cover a diverse range of applications supporting nearly every major aircraft platform in use today and include auto throttles, lap-belt airbags, two- and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions and motion and actuation devices, customized edge-lighted panels and knobs and annunciators for incandescent and LED illuminated pushbutton switches, among others.

We primarily serve three core end-markets: commercial, business jet and general aviation, and defense, which have long historical track records of consistent growth. We also serve a diversified customer base within these end-markets where we maintain long-standing customer relationships. We believe that the demanding, extensive and costly qualification process for new entrants, coupled with our history of consistently delivering exceptional solutions for our customers, has provided us with leading market positions and created significant barriers to entry for potential competitors. By utilizing differentiated design, engineering, and manufacturing capabilities, along with a highly targeted acquisition strategy, we have sought to create long-term, sustainable value with a consistent, global business model.

As a specialized supplier in the aerospace and defense component industry, we believe we are well positioned to deliver innovative, mission-critical solutions to a wide array of aerospace and defense customers. Our key competitive strengths support our ability to offer differentiated solutions to our customers. We have a portfolio of mission-critical, niche aerospace and defense components that we believe hold leading market positions. We have intellectual property-driven proprietary products and expertise in an industry with high barriers to entry. We are strategically focused on higher-margin aftermarket content. We have highly diversified revenue streams, and our diversification stretches across end-markets, customers, platforms, and product category or application. We have an established business model with a lean, entrepreneurial structure. We have a disciplined and strategic approach to acquisitions with a history of successful integration. We have a track record of strong growth, margins and cash flow generation.

Recent Developments

On March 7, 2025, following completion of the works council consultation process required under French Law, we entered into a purchase agreement to acquire 100% of the shares of LMB for €365 million (the Base Purchase Price) plus the assumption of net debt. Net debt is payable in cash at closing. Following execution of the purchase agreement, the Company has entered into agreements to extend the long stop date to December 31, 2025 and to increase the Base Purchase Price to €370 million. LMB is a global specialty player in the design and production of customized high-performance fans and motors. The transaction is expected to close in the fourth quarter of 2025 shortly after receiving requisite regulatory approvals and is subject to customary closing conditions.

The acquisition will be financed through additional borrowings under our existing Credit Agreement and cash on hand. In connection with the acquisition, we entered into the Commitment Letter (as amended and restated), pursuant to which Blackstone Credit has committed, subject to the satisfaction of customary conditions, to provide us with an Incremental Loan Facility in an amount equal to the U.S. dollar equivalent of €400.0 million. The loans under the Incremental Loan Facility will mature on the same date, will amortize, and will bear the same interest rate as the existing term loans outstanding under the Credit Agreement. Blackstone Credit is a lender under the Credit Agreement and owns approximately 8% of our common stock.

Outlook

As we look to 2026, we anticipate net sales growth to be driven by organic growth, in particular the conversion of high levels of backlog of our existing products, and the impact from strategic acquisitions. Backlog primarily consists of firm orders for products that have not yet shipped. Continued inflationary pressures and supply chain disruptions may lead to higher material and labor costs although these pressures and disruptions have not had a material effect on our year-to-date results of operations or capital resources, and we do not expect them to materially affect our outlook or business goals. So far in 2025, we have continued and plan to continue our commitment to develop new products and services, further market penetration, and pursue an aggressive acquisition strategy while seeking to maintain our financial strength and flexibility.

Results of Operations

The following table sets forth, for the three and nine months ended September 30, 2025 and 2024, certain operating data of the Company, including presentation of the amounts as a percentage of net sales (in thousands unless otherwise indicated):

Financial and Operational Highlights

Three months ended September 30, 2025 compared with three months ended September 30, 2024

Net Sales

Net sales for the three months ended September 30, 2025 increased $23.2 million, or 22.4%, to $126.8 million as compared to $103.5 million for the three months ended September 30, 2024, as discussed below.

Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior year-period. Net acquisition sales for the three months ended September 30, 2025 represent net sales from acquisitions that were completed in 2024 and 2025 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. We do not believe our net sales are subject to significant seasonal variations. See Note 3, Acquisition of the Notes to Condensed Consolidated Financial Statements for further information on the Company's acquisition activities.

Net Organic Sales

Net organic sales for the three months ended September 30, 2025 increased $11.5 million or 11.1%, to $115.0 million as compared to $103.5 million for the three months ended September 30, 2024. The increase in net organic sales was primarily related to increases in aftermarket total commercial sales ($6.0 million, an increase of 15.4%), OEM total commercial sales ($3.0 million, an increase of 8.3%), and defense sales ($2.7 million, an increase of 12.2%), partially offset by a decline in non-aerospace sales ($0.2 million, a decrease of 2.4%). The increase in aftermarket total commercial sales was primarily due to increases in global commercial air travel demand. The increase in OEM total commercial sales was driven by increases in demand to support aircraft production for general

aviation, wide-body and narrow-body aircraft. The increase in defense sales was primarily driven by increased market share due to new product launches and an increased demand for defense products globally.

Net Acquisition Sales

Net acquisition sales of $11.7 million for the three months ended September 30, 2025 is made up of AAI and Beadlight which were acquired on August 26, 2024 and July 28, 2025, respectively. This represents 11.3% of the increase in total net sales for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Gross Profit and Cost of Sales

Cost of sales for the three months ended September 30, 2025 increased $9.4 million, or 18.5%, to $60.0 million compared to $50.6 million for the three months ended September 30, 2024 as a result of the increase in sales. Cost of sales and the related percentage of net sales for the three months ended September 30, 2025 and 2024 were as follows (in thousands except for percentages):

Cost of sales for the three months ended September 30, 2025 decreased 1.6% as a percentage of net sales to 47.3% from 48.9% in the comparable period last year. This decrease is primarily attributable to our operating leverage, execution of strategic value drivers, favorable sales mix, lower acquisition and facility integration and inventory step-up amortization costs, partially offset by higher amortization expense for intangible and other long-term assets.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $5.6 millionto $35.8 million, or28.2%as a percentage of net sales, for the three months ended September 30, 2025 from $30.2 million, or 29.2% as a percentage of net sales, for the three months ended September 30, 2024. Selling, general and administrative expenses and the related percentage of net sales for the three months ended September 30, 2025 and 2024 were as follows (amounts in thousands except for percentages):

Selling, general and administrative expenses decreased by 1.0% as a percentage of net sales for the three months ended September 30, 2025 when compared to the same period in 2024. This was principally due to the leveraging of fixed costs, partially offset by higher research and development expense.

Transaction Expenses

Transaction expenses for the three months ended September 30, 2025 and 2024 were $1.8 million and $1.4 million, respectively. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.

Operating Income

Operating income for the three months ended September 30, 2025, was $29.0 million, or 22.9% as a percentage of net sales, compared to $22.8 million, or 22.0% as a percentage of net sales for the three months ended September 30, 2024. The increase in operating income is due to the factors discussed above.

Interest Expense

Interest expense for the three months ended September 30, 2025 decreased $4.0 million, or 39.7%, to $6.0 million compared to $10.0 million for the three months ended September 30, 2024. This decrease was attributable to lower average outstanding debt and lower interest rates.

Income Tax Benefit (Provision)

The income tax benefit for the three months ended September 30, 2025 was $4.6 million compared to an income tax provision $4.2 million for the three months ended September 30, 2024. The decrease in income taxeswas primarily driven by the tax impact from enactment of the OBBBA during the current year period, partially offset by taxes from the increase in the Company's earnings in 2025 compared to 2024.

Net Income

Net income for the three months ended September 30, 2025 was $27.6 million, or 21.8% as a percentage of net sales, compared to net income for the three months ended September 30, 2024 of $8.7 million, or 8.4% as a percentage of net sales. The improvement in results is primarily due to the factors discussed above.

Nine months ended September 30, 2025 compared with nine months ended September 30, 2024

Net Sales

Net sales for the nine months ended September 30, 2025 increased $72.2 million, or 24.7%, to $364.5 million as compared to $292.4 million for the nine months ended September 30, 2024, as discussed below.

Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior year-period. Net acquisition sales for the nine months ended September 30, 2025 represent net sales from acquisitions that were completed in 2024 and 2025 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. We do not believe our net sales are subject to significant seasonal variations. See Note 3, Acquisition and Note 10, Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for further information on the Company's acquisition activities.

Net Organic Sales

Net organic sales for the nine months ended September 30, 2025 increased $32.7 million, or 11.2%, to $325.1 million as compared to $292.4 million for the nine months ended September 30, 2024. The increase in net organic sales was primarily related to increases in aftermarket total commercial sales ($14.8 million, an increase of 13.4%), defense sales ($10.3 million, an increase of 17.3%), and OEM total commercial sales ($10.0 million, an increase of 10.0%), partially offset by a decline in non-aerospace sales ($2.4 million, a decrease of 10.7%). The increase in aftermarket total commercial sales was primarily due to increases in global commercial air travel demand. The increase in defense sales was primarily driven by increased market share due to new product launches and an increased demand for defense products globally. The increase in OEM total commercial sales was driven by increases in demand to support aircraft production for general aviation, wide-body and narrow-body aircraft. as an improving supply chain has allowed us to deliver parts that were previously held because our customers were experiencing bottlenecks in other areas of their supply chains.

Net Acquisition Sales

Net acquisition sales of $39.4 million for the nine months ended September 30, 2025 is made up of AAI and Beadlight which were acquired on August 26, 2024 and July 28, 2025, respectively. This represents 13.5% of the increase in total net sales for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Gross Profit and Cost of Sales

Cost of sales for the nine months ended September 30, 2025 increased $24.3 million, or 16.5%, to $171.9 million compared to $147.5 million for the nine months ended September 30, 2024 as a result of the increase in sales. Cost of sales and the related percentage of net sales for the nine months ended September 30, 2025 and 2024 were as follows (in thousands except for percentages):

Cost of sales for the nine months ended September 30, 2025 decreased 3.3% as a percentage of net sales to 47.1% from 50.4% in the comparable period last year. This decrease is primarily attributable to our operating leverage, execution of strategic value drivers, and favorable sales mix, partially offset by higher amortization expense for intangible and other long-term assets.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $25.4 millionto $105.8 million, or29.0%as a percentage of net sales, for the nine months ended September 30, 2025 from $80.4 million, or 27.5% as a percentage of net sales, for the nine months ended September 30, 2024. Selling, general and administrative expenses and the related percentage of net sales for the nine months ended September 30, 2025 and 2024 were as follows (amounts in thousands except for percentages):

Selling, general and administrative expenses increased by 1.5% as a percentage of net sales for the nine months ended September 30, 2025 when compared to the same period in 2024. This was due to additional costs associated with being a public company, including

SOX compliance and additional organizationalcosts, stock-based compensation expense,research and development expenses, and amortization of intangible and other long-term assets.

Transaction Expenses

Transaction expenses for the nine months ended September 30, 2025 and 2024 were $4.3 million and $2.5 million, respectively. During the nine months ended September 30, 2025, approximately $0.9 million of costs related to the secondary offering without proceeds to the Company were included in transaction expenses. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.

Operating Income

Operating income for the nine months ended September 30, 2025, was $82.5 million, or 22.6% as a percentage of net sales, compared to $66.4 million, or 22.7% as a percentage of net sales for the nine months ended September 30, 2024. The increase in operating income is due to the factors discussed above.

Interest Expense

Interest expense for the nine months ended September 30, 2025 decreased $19.4 million, or 50.6%, to $19.0 million compared to $38.3 million for the nine months ended September 30, 2024. This decrease was attributable to lower average outstanding debt and lower interest rates.

Income Tax Benefit (Provision)

The income tax provision for the nine months ended September 30, 2025 was $3.9 million compared to $7.9 million for the nine months ended September 30, 2024. The decrease in income taxeswas primarily driven by the tax impact from enactment of the OBBBA during the current year period, partially offset by taxes from the increase in the Company's earnings in 2025 compared to 2024.

Net Income

Net income for the nine months ended September 30, 2025 was $59.6 million, or 16.3% as a percentage of net sales, compared to net income for the nine months ended September 30, 2024 of $18.5 million, or 6.3% as a percentage of net sales. The improvement in results is primarily due to the factors discussed above.

Liquidity and Capital Resources

The following table summarizes our capitalization as of September 30, 2025 and December 31, 2024 (in thousands, unless otherwise indicated):

Our principal historical liquidity requirements have been for acquisitions, capital expenditures, servicing indebtedness and working capital needs. We fund our investing activities primarily from cash provided by our operating and financing activities. As of September 30, 2025, we had availability of $100 million of a delayed draw term loan commitment and a $50 million revolving line of credit. Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our Credit Agreement will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to expand our business, including through acquisitions we may make, we may in the future require additional working capital for increased costs. See "Credit Agreement" (below) for additional detail regarding our financing activities.

Operating Activities

Net cash provided by operating activities in the nine months ended September 30, 2025 and 2024 was $81.9 million and $34.2 million, respectively. The $47.7 million increase was primarily driven by an increase in net income of $41.1 million and the increase in non-cash operating items of approximately $8.7 million, partially offset by an increase in working capital.

Investing Activities

Net cash used in investing activities in the nine months ended September 30, 2025 and 2024 of $40.3 million and $389.3 million, respectively, was primarily due to the $32.8 million acquisition of Beadlight in July 2025 and the $383.5 million acquisition of AAI in August 2024, respectively.

Financing Activities

Net cash provided by financing activities in the nine months ended September 30, 2025 of $3.2 million was principally related to proceeds from stock option exercises of $1.9 million and the WVEDA loan of $1.5 million. Net cash provided by financing activities in the nine months ended September 30, 2024 of $388.5 million was principally related to proceeds from the August 2024 borrowing of the $360.0 million incremental term loan for the acquisition of AAI and the Company's IPO of $325.4 million, partially offset by payments on our Credit Agreement of $287.9 million.

Credit Agreement

The Company's long-term debt consists primarily of borrowings under its Credit Agreement.

On March 26, 2024, the Credit Agreement was amended to extend the termination date of the delayed draw term loan commitment by approximately nine months, extending it from April 1, 2024 to December 31, 2024.

On April 10, 2024, the Credit Agreement was amended to permit certain non-pro rata open market purchases of term loans pursuant to open market purchases. In addition, we also entered into that certain Master Open Market Purchase Agreement, by and between affiliates of lender and the Company (Master Open Market Purchase Agreement) to repurchase term loans on a non-pro rata basis subject to certain conditions as set forth therein.

On May 3, 2024, a portion of the net proceeds from the IPO was used to repay $284.6 million aggregate principal amount of
term loans under the Credit Agreement plus accrued interest of $0.3 million. We wrote-off $0.8 million in unamortized debt issuance costs and expensed $0.8 million in refinancing costs associated with the amendment of the Credit Agreement during the nine months ended September 30, 2024.

On May 10, 2024, the Credit Agreement was amended to extend the maturity date to May 10, 2030 from April 2, 2026 and reduce the applicable margin by between 2.0 and 2.5 percentage points based on the Company's leverage ratio. At our election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.75% or at the base rate plus the applicable margin of 3.75% as long as the leverage ratio of less than 5.5 to 1 is maintained. Also, the existing availability under the delayed draw term loan commitment was increased to $100 million, which terminates if not drawn upon by May 10, 2026. In addition, the existing revolving line of credit under the Credit Agreement was replaced with a new revolving credit commitment of $50 million. The unused portion of the revolving line of credit carries a commitment fee of 0.375%. Loans outstanding under the revolving line of credit, if any, mature on May 10, 2029. Debt issuance costs associated with the amendment of approximately $0.9 million were capitalized during the nine months ended September 30, 2024.

On August 26, 2024, the Credit Agreement was amended to make available an incremental term loan in an aggregate principal amount equal to $360 million for purposes of (i) paying a portion of the consideration payable by it pursuant to the terms of that certain purchase agreement (the "Purchase Agreement") pursuant to which the Company agreed to purchase from AAI Parent all the issued and outstanding equity interests of AAI, (ii) paying fees and expenses incurred in connection with the foregoing, and (iii) otherwise to fund working capital and general corporate purposes.

On December 17, 2024, the net proceeds from the Follow-on Offering and cash from operations were used to repay $330.0 million aggregate principal amount of term loans under the Credit Agreement plus accrued interest of $1.5 million. Unamortized debt issuance costs $4.8 million were written off as a result.

On March 7, 2025, in connection with the pending LMB acquisition which was expected to close in the third quarter of 2025, we entered into the Commitment Letter (as amended and restated). See above under "-Recent Developments."

On August 1, 2025, the Credit Agreement was amended to reduce the applicable margin by 0.5%. At our election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.25% or at the base rate plus the applicable margin of 3.25% as long as the Company maintains a leverage ratio of less than 5.5 to 1.

At September 30, 2025, there was $281.4 million outstanding under the Credit Agreement, and there remained availability of $100.0 million in delayed draw term loan commitments and $50.0 million in revolving line of credit.

Other Obligations and Commitments

We have future obligations under various contracts relating to debt and interest payments, finance and operating leases and our post-retirement benefit plan. During the nine months ended September 30, 2025, there were no material changes to these obligations, other than the additional borrowing we expect to incur for thepending LMB acquisition discussed under "-Recent Developments". For a description of our other obligations and commitments, see our December 31, 2024 consolidated financial statements reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 31, 2025.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements, as defined in Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, or cash flows.

Critical Accounting Estimates

Our condensed consolidated unaudited financial statements have been prepared in conformity with U.S. GAAP for interim financial statements and include the accounts of the Company and its subsidiaries. Often, management's judgment is needed in the selection and application of certain accounting policies and methods. However, investors are cautioned that the sensitivity of financial statements to these methods, assumptions and estimates could create materially different results under different conditions or using different assumptions.

A complete and comprehensive discussion of our most critical accounting policies that require management to make judgments about matters that are inherently uncertain was included in Management's Discussion and Analysis of Financial Condition and Results of Operations- Critical Accounting Estimates disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 which was filed on March 31, 2025. Refer to Note 2, Basis of Presentation, of the notes to the condensed consolidated financial statements included herein for updates to disclosures of accounting standards recently adopted or required to be adopted in the future.

Non-GAAP Financial Measures

We present below certain financial information based on our EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin. References to "EBITDA" mean earnings before interest, taxes, depreciation and amortization, references to "Adjusted EBITDA" mean EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliations of net income to EBITDA and Adjusted EBITDA, and references to "Adjusted EBITDA Margin" refer to Adjusted EBITDA divided by net sales. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of financial performance under U.S. GAAP. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we believe they are useful indicators for evaluating operating performance. In addition, our management uses Adjusted EBITDA to review and assess the performance of the management team in connection with employee incentive programs and to prepare its annual budget and financial projections. Moreover, our management uses Adjusted EBITDA of target companies to evaluate acquisitions.

Although we use EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin as measures to assess the performance of our business and for the other purposes set forth above, the use of non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:

Because of these limitations, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin should not be considered as measures of cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in isolation and specifically by using other U.S. GAAP measures, such as net sales

and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income or cash flow from operations determined in accordance with U.S. GAAP. Our calculations of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to the calculations of similarly titled measures reported by other companies.

The following table sets forth a reconciliation of net income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and nine months ended September 30, 2025 and 2024 (in thousands unless otherwise indicated):

JOBS Act Election

We are currently an "emerging growth company," as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards 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, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company's market risks are described more fully within Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 31, 2025. These market risks have not materially changed for the nine months ended September 30, 2025.