Commitments and Contingencies

Purchase Obligations. There were no material changes outside the ordinary course of business during the six

months ended September 30, 2026, to the Company’s purchase obligations disclosed in Note 8, “Commitments and

Contingencies,” in the Company’s consolidated financial statements in Part IV of the 2026 Annual Report.

Contingencies. Except as described below, there were no material changes outside the ordinary course of

business during the six months ended September 30, 2026, to the Company’s contingencies disclosed in Note 8,

“Commitments and Contingencies,” in the Company’s consolidated financial statements in Part IV of the 2026

Tariff Refunds. In February 2026, the US Supreme Court invalidated tariffs imposed under the International

Emergency Economic Powers Act (IEEPA). In March 2026, the US Court of International Trade directed US

Customs and Border Protection (CBP) to refund previously collected IEEPA tariffs. In April 2026, CBP released the

Consolidated Administration and Processing of Entries (CAPE) functionality to facilitate a phased approach to

process IEEPA tariff refunds.

The Company previously paid an aggregate of approximately $119,000 in gross IEEPA tariffs. As of September 30,

2026, the Company has submitted approximately $106,000 in claims under CBP’s CAPE Phase 2 administrative

refund process and is evaluating approximately $13,000 in additional claims that may qualify for subsequent

phases. The amount and timing of future refunds remain uncertain and subject to changes in CBP’s claims process

and further legal and regulatory developments.

The Company accounts for potential refunds of previously paid tariffs as gain contingencies under Accounting

Standards Codification Topic 450, Contingencies, which recognizes gains in the condensed consolidated financial

statements when realized or realizable. As of September 30, 2026, the Company has not recognized any receivable

related to any unreceived IEEPA tariff refunds or related interest in its condensed consolidated financial statements.

During the three and six months ended September 30, 2026, the Company recorded approximately $46,000 of

IEEPA tariff net refunds as a reduction to cost of sales and approximately $3,000 of related interest as interest

income within the Company’s condensed consolidated statements of comprehensive income. The net effect of the

refunds reflects accommodations provided under cost-sharing arrangements with independent manufacturers and

other relevant factors.

Subsequent to September 30, 2026, through October 8, 2026, the Company received additional IEEPA tariff net

refunds that will be recognized in the Company’s condensed consolidated financial statements in the third fiscal

quarter, which, combined with the refunds previously received, total approximately $87,900, plus associated interest

for a total of approximately $4,700.

The Company has been named as a defendant in two purported consumer class actions relating to alleged tariff-

related pricing actions and governmental tariff reimbursements. The Company intends to defend these matters