The risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended January 3, 2026 filed with the Securities and Exchange Commission on February 24, 2026 (the "Form 10-K") should be considered together with information included in this Form 10-Q for the quarter ended July 4, 2026, and should not be considered the only risks to which the Company is exposed. Except as set forth below, there have been no material changes to the risk factors as disclosed in the Company’s Form 10-K. Business and Operational Risks The Company’s business is subject to risks associated with the global trade environment, including customs and trade regulations, tariffs, quotas, import taxes and international trade agreements. Substantially all of the Company's import operations are subject to customs requirements, trade restrictions and protection measures, and to tariffs, quotas and taxes on imports set by governments through mutual agreements, bilateral actions or, in some cases, unilateral action, such as tariffs implemented by the U.S. government under Section 301 of the Trade Act of 1974. In addition, the countries in which the Company’s products and materials are manufactured or imported from (including importation into the U.S. of the Company's products manufactured overseas) may from time to time impose additional quotas, duties, tariffs or other restrictions on its imports (including restrictions on manufacturing operations) or adversely modify existing restrictions or international trade agreements the impact of which the Company may be unable to correctly assess or effectively mitigate on a timely basis. Existing restrictions, adverse changes in the Company’s import costs and restrictions, or failure by the Company or its suppliers to comply with customs regulations or similar laws, could limit the Company’s ability to capitalize on current and future growth opportunities in international markets, impair its ability to expand the business by offering new products, and could adversely impact its production costs, customer demand and relationships with customers and suppliers. Any of these consequences could have a material adverse effect on the Company’s results of operations, financial condition and cash flows. Changes in governmental policy regarding international trade, including import and export regulation, sanctions, and international trade agreements, have negatively impacted the Company’s business. Beginning in 2025, the U.S. government announced a series of new tariffs on imported goods into the U.S., which prompted retaliatory actions from some of its trading partners, and in response, the Company introduced strategies to mitigate the impacts of these changes on its results of operations, including price increases and supply chain adjustments. While certain of these tariffs have been suspended, modified or invalidated, such as the invalidation of tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) by the U.S. Supreme Court, the trade policy environment continues to evolve. The Company continues to monitor the current tariff landscape, however, there is no assurance that the Company will be able to mitigate the full impact of all such tariffs, retaliatory actions or other changes in trade policies that have or may develop. While the Company has submitted refund claims, and may submit additional refund claims, for eligible IEEPA tariffs paid, the ultimate amounts the Company may recover remain uncertain, and there can be no assurance that any refunds will be available to it in amounts or within timeframes that would meaningfully offset the impact of tariffs or costs associated with tariff mitigation strategies on the Company’s business. Furthermore, the overall impact and timing of any refunds, which if received may be subject to taxes and other adjustments or further legal, regulatory, or administration developments, remain highly uncertain. Moreover, decisions made as part of the Company’s tariff mitigation strategy concerning the rationalization, restructuring or relocation of facilities, production or component sources and any similar actions could also subject the Company to additional or new tariffs or trade regulations and interpretations of those regulations, reputational risks, and other issues relating to the importation of products. For example, in 2025 the Company began shifting production of certain power tools to Mexico. As a result, these products became subject to additional tariffs on imports from Mexico in 2025. Even though the Company is taking actions to qualify for an exemption under the United States-Mexico-Canada Agreement to mitigate the additional tariff costs, there is no guarantee that the Company will be able to obtain such qualification. There is a possibility of further escalation of trade tensions, or modifications to tariffs, trade restrictions or retaliatory efforts with little or no advance notice, which may result in disruption to the Company's supply chain and an increase in supply chain costs that the Company may not be able to accurately assess and offset. This could in turn require the Company to increase its 48 Table of Contents prices and, in the event customer demand declines as a result, adversely impact the Company’s results of operations. For example, in April 2025, China imposed export restrictions on certain rare earth minerals that are used in certain components of the Company’s products, which resulted in delays and shortages of certain components. If China were to further restrict exporting, or implement burdensome and lengthy licensing processes for the export of, these materials or components, or pressure other countries to do so, the Company’s and its suppliers' ability to obtain such materials or components may be disrupted and the Company may not be able to obtain sufficient quantities, or obtain supply in a timely manner, or at a commercially reasonable cost. Certain of the Company’s competitors may be better positioned than the Company to withstand or react to these kinds of changes and other restrictions on global trade and as a result the Company could lose market share to such competitors. While the Company may be able to expand or shift sourcing options and has been focused, and continues to focus, on implementing other supply chain adjustments, such efforts are time-consuming and are, or could be, difficult or impracticable for many products and may result in an increase in its manufacturing costs, or otherwise materially and adversely impact the Company's results of operations, cash flow and financial condition. Other Risks The Company’s share repurchase program may not be fully consummated and could impact the price of the Company’s common stock and anticipated enhancements to long-term shareholder value may not be realized. Although the Company has adopted a share repurchase program, it is not obligated to repurchase a specified number or dollar value of shares under this share repurchase program or at all, and the program may be suspended or terminated at any time at the Company’s discretion and without prior notice. The timing and amount of repurchases, if any, will depend on factors such as the Company’s historical and expected business performance, its cash and liquidity positions and priorities, the price of its common stock, economic and market conditions, and corporate and regulatory requirements. The Company’s share repurchase program could also affect the price of its common stock and increase trading volatility. There is no guarantee that the share repurchase program, even if fully implemented, will enhance shareholder value. Any failure to fully implement the share repurchase program may negatively impact the Company’s reputation, investor confidence, and the price of the Company’s common stock.