Risk Management and Market Sensitive Financial Instruments We are exposed to many different market risks with the various industries we serve. The primary financial risk we are exposed to is foreign currency exchange, as certain operations, assets and liabilities of ours are denominated in foreign currencies. We manage these risks through normal operating and financing activities. Foreign Currency Exposure Even though we consider foreign currency exchange rates at the time an order is taken, our financial statements, denominated in a non-U.S. functional currency, are subject to foreign exchange rate fluctuations. Our foreign denominated assets and liabilities are cash and cash equivalents, accounts receivable, inventory, accounts payable and intercompany receivables and payables, as we conduct business in countries of the European Union, Asia/Pacific and, to a lesser extent, Canada and Latin America. We manage foreign exchange exposures by using currency clauses in certain sales contracts. We have not used any derivative instruments nor entered any forward contracts in fiscal 2026, fiscal 2025 or fiscal 2024. Had the U.S. dollar changed unfavorably 10% against various foreign currencies, foreign denominated net sales would have been lower by an estimated $13.0 million during fiscal 2026, an estimated $11.3 million during fiscal 2025, and an estimated $10.8 million during fiscal 2024. Total assets would have declined by an estimated $5.2 million as of the fiscal year ended May 30, 2026, and an estimated $5.4 million as of the fiscal year ended May 31, 2025, while the total liabilities would have decreased by an estimated $0.9 million as of the fiscal year ended May 30, 2026 and an estimated $1.4 million as of the fiscal year ended May 31, 2025. The interpretation and analysis of these disclosures should not be considered in isolation since such variances in exchange rates would likely influence other economic factors. Such factors, which are not readily quantifiable, would likely also affect our operations. Additional disclosure regarding various market risks is set forth in Part I, Item 1A, Risk Factors, of our Annual Report on this Form 10-K.