The U.S. Dollar is the functional currency for the Company and all of its subsidiaries and is also the reporting currency for the Company. By operating internationally, we are subject to foreign currency risk from transactions denominated in currencies other than the U.S. Dollar (“foreign currencies”). Such transactions include sales and operating expenses. As a result of such transactions, portions of our cash, accounts receivable and accounts payable are denominated in foreign currencies. Approximately 15% of our net sales revenue was denominated in foreign currencies during both the three and six months ended August 31, 2026, compared to 14% and 15% for the same periods last year, respectively. These sales were primarily denominated in Euros, British Pounds and Canadian Dollars. We make most of our inventory purchases from manufacturers in Asia and primarily use the U.S. Dollar for such purchases.

In our condensed consolidated statements of income (loss), foreign currency exchange rate gains and losses resulting from the remeasurement of foreign income tax receivables and payables and deferred income tax assets and liabilities are recognized in income tax expense (benefit), and all other foreign currency exchange rate gains and losses are recognized in SG&A. We recorded immaterial foreign currency exchange rate net gains, during both the three and six months ended August 31, 2026, in income tax expense (benefit), compared to net gains of $2.9 million and $9.5 million for the same periods last year, respectively. During the three and six months ended August 31, 2026, we recorded foreign currency exchange rate net losses of $0.1 million and $0.6 million, respectively, in SG&A, compared to net gains of $0.4 million and $2.1 million for the same periods last year, respectively. We mitigate certain foreign currency exchange rate risk by using forward contracts to protect against the foreign currency exchange rate risk inherent in our transactions denominated in foreign currencies. We do not enter into any derivatives or similar instruments for trading or other speculative purposes. Certain of our forward contracts are designated as cash flow hedges (“foreign currency contracts”) and are recorded on the balance sheet at fair value with changes in fair value recorded in Other Comprehensive Income (Loss) (“OCI”) until the hedge transaction is settled, at which point amounts are reclassified from Accumulated Other Comprehensive Income (Loss) (“AOCI”) to our condensed consolidated statements of income

(loss). Foreign currency derivatives for which we have not elected hedge accounting consist of certain forward contracts, and any changes in the fair value of these derivatives are recorded in our condensed consolidated statements of income (loss). These undesignated derivatives are used to hedge monetary net asset and liability positions. Cash flows from our foreign currency derivatives are classified as cash flows from operating activities in our condensed consolidated statements of cash flows, which is consistent with the classification of the cash flows from the underlying hedged item. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness.

Interest on our outstanding debt as of August 31, 2026 and February 28, 2026 is based on variable floating interest rates. If short-term interest rates increase, we will incur higher interest expense on any future outstanding balances of floating rate debt. Floating interest rates are hedged with interest rate swaps to effectively fix interest rates on a portion of our outstanding principal balance under the Credit Agreement, which totaled $676.5 million and $785.5 million as of August 31, 2026 and February 28, 2026, respectively. As of August 31, 2026 and February 28, 2026, $300 million and $325 million of the outstanding principal balance under the Credit Agreement, respectively, was hedged with interest rate swaps to fix the interest rate we pay. Our interest rate swaps are designated as cash flow hedges and are recorded on the balance sheet at fair value with changes in fair value recorded in OCI until the hedge transaction is settled, at which point amounts are reclassified from AOCI to our condensed consolidated statements of income (loss). Cash flows from our interest rate swaps are classified as cash flows from operating activities in our condensed consolidated statements of cash flows, which is consistent with the classification of the cash flows from the underlying hedged item. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness.


(in thousands)	August 31, 2026
Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- Current

Forward contracts - sell Euro	Cash flow	1/2028	€	47,600	$	969	$	200	$	59	$	—
Forward contracts - sell Canadian Dollars	Cash flow	10/2027	$	24,750	177		26		36		—
Forward contracts - sell Pounds	Cash flow	2/2028	£	24,500	—		12		861		50

Forward contracts - sell Norwegian Kroner	Cash flow	8/2027	kr	35,450	18		—		74		—
Forward contracts - sell Mexican Pesos	Cash flow	2/2028	$	125,000	—		—		159		51

Interest rate swaps	Cash flow	8/2027	$	300,000	1,896		—		—		—
Subtotal					3,060		238		1,189		101

Derivatives not designated under hedge accounting


Forward contracts - sell Euro	(1)	9/2026	€	3,094	—		—		22		—
Forward contracts - buy Pounds	(1)	9/2026	£	2,643	11		—		—		—
Subtotal					11		—		22		—
Total fair value					$	3,071	$	238	$	1,211	$	101


(in thousands)	February 28, 2026
Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities Non- Current

Forward contracts - sell Euro	Cash flow	11/2027	€	67,000	$	149	$	137	$	1,239	$	—
Forward contracts - sell Canadian Dollars	Cash flow	10/2027	$	29,600	23		8		330		—

Forward contracts - sell Pounds	Cash flow	12/2027	£	32,000	—		33		1,174		42


Forward contracts - sell Norwegian Kroner	Cash flow	2/2027	kr	30,000	—		—		156		—
Interest rate swaps (2)	Cash flow	8/2027	$	425,000	381		—		130		66
Subtotal					553		178		3,029		108

Derivatives not designated under hedge accounting
Forward contracts - sell Euro	(1)	3/2026	€	6,764	25		—		—		—
Forward contracts - buy Pounds	(1)	3/2026	£	787	—		—		13		—
Subtotal					25		—		13		—
Total fair value					$	578	$	178	$	3,042	$	108


	Three Months Ended August 31,
	Gain (Loss) Recognized in AOCI				Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2026		2025		Location	2026		2025
Foreign currency contracts - cash flow hedges	$	594	$	(2,368)	Sales revenue, net	$	101	$	(1,770)
Interest rate swaps - cash flow hedges	582		(743)		Interest expense	415		1,149


Total	$	1,176	$	(3,111)		$	516	$	(621)


	Six Months Ended August 31,
	Gain (Loss) Recognized in AOCI				Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2026		2025		Location	2026		2025
Foreign currency contracts - cash flow hedges	$	2,405	$	(12,075)	Sales revenue, net	$	(298)	$	(2,493)
Interest rate swaps - cash flow hedges	2,524		1,870		Interest expense	813		2,077


Total	$	4,929	$	(10,205)		$	515	$	(416)

We expect a net gain of $1.9 million associated with foreign currency contracts and interest rate swaps currently recorded in AOCI to be reclassified into income over the next twelve months. The amount ultimately realized, however, will differ as exchange rates and interest rates change and the underlying contracts settle. See Notes 10 and 12 for more information.

Financial instruments, including foreign currency contracts, forward contracts and interest rate swaps, expose us to counterparty credit risk for non-performance. We manage our exposure to counterparty credit risk by only dealing with counterparties who are substantial international financial institutions with significant experience using such derivative instruments. We believe that the risk of incurring credit losses is remote.