11. Commitments and Contingencies

Legal proceedings

The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies ("ASC 450"), the Company records a reserve for estimated losses when the loss is probable and the amount can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with ASC 450. As the Company believes, as of the date of this Quarterly Report, that it has provided adequate reserves, it anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial position, results of operations or consolidated cash flows of the Company. However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

U.S. Tariff Update

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The Court of International Trade (“CIT”) subsequently issued an interim order requiring U.S. Customs and Border Protection ("CBP") to process unliquidated entries without the unlawful tariffs and to develop a plan that could result in refunds of duties previously collected. Pursuant to this order from CIT, CBP developed and implemented a process to facilitate refunds through its Consolidated Administration and Processing of Entries (“CAPE”) system, which went live on April 20, 2026. At the time the IEEPA tariffs were ruled unconstitutional, the Company had paid approximately $192 million of IEEPA tariffs. As of the date of this Quarterly Report, the Company has submitted all refund claims eligible for refund in the amount of $189.8 million.

While the Company has taken steps to preserve its rights, no assurance can be given that refunds will be realized. As of May 2, 2026, the Company has not recorded a receivable for these refunds as ultimate collection remained uncertain. Refer to Note 14, Subsequent Events, to the Consolidated Financial Statements for additional information.