Revenue Breakdown - Approximately 57% of Fiscal 2025 net revenues were earned outside of the U.S.[168] - North America segment represented approximately 43% of Fiscal 2025 net revenues, primarily from retail and wholesale sales in the U.S. and Canada[170] - Europe segment accounted for approximately 31% of Fiscal 2025 net revenues, with sales through retail and wholesale businesses in Europe and emerging markets[170] - Asia segment represented approximately 24% of Fiscal 2025 net revenues, primarily from retail and wholesale sales in Asia, Australia, and New Zealand[170] Financial Performance - For the three months ended September 27, 2025, the company reported net revenues of $2.011 billion, a 16.5% increase compared to $1.726 billion for the same period in 2024[180] - Net income for the three months ended September 27, 2025, was $207.5 million, up from $147.9 million in the prior year, resulting in net income per diluted share of $3.32, an increase of $1.01[184] - Total net revenues increased by $491.6 million, or 15.2%, to $3.730 billion for the six months ended September 27, 2025, compared to the prior fiscal year period[223] - Net income rose to $427.9 million for the six months ended September 27, 2025, compared to $316.5 million in the prior year, marking an increase of $111.4 million[241] Cost and Profitability - Gross profit as a percentage of net revenues increased by 100 basis points to 68.0% for the three months ended September 27, 2025, driven by average unit retail growth and favorable product mix[182] - Selling, general, and administrative expenses as a percentage of net revenues declined by 160 basis points to 53.9% for the three months ended September 27, 2025, due to operating leverage on higher net revenues[183] - Operating income increased by $66.8 million, or 37.3%, to $245.7 million, with operating income as a percentage of net revenues rising to 12.2%[211] - Gross profit rose by $387.2 million, or 17.4%, to $2.609 billion, with a gross profit margin of 69.9%, up from 68.6%[231] Operational Efficiency - The company is executing a multi-year Next Generation Transformation project aimed at optimizing inventory levels and improving operational efficiency[172] - The company faces risks from inflationary pressures, including increases in raw material and transportation costs[159] - The global economic environment remains challenging, with ongoing inflationary pressures and geopolitical tensions impacting consumer sentiment and spending[175] Cash Flow and Liquidity - The company ended the second quarter of Fiscal 2026 with a net cash and short-term investments position of $407.8 million, down from $940.4 million at the end of Fiscal 2025[187] - Net cash provided by operating activities was $229.3 million during the six months ended September 27, 2025, compared to $374.5 million in the same period of 2024[188] - Cash and cash equivalents decreased by $479.5 million to $1.443 billion as of September 27, 2025, primarily due to stock repurchases and capital expenditures[244] Shareholder Returns - The quarterly cash dividend was increased from $0.825 to $0.9125 per share, reflecting the company's commitment to returning value to shareholders[267] - The remaining availability under the Class A common stock repurchase program was approximately $1.539 billion as of September 27, 2025, following an expansion allowing for an additional $1.500 billion in repurchases[265] Tax and Equity - The effective tax rate decreased to 14.6% from 21.4%, reflecting a 680 basis point improvement[197] - The company’s equity decreased to $2.582 billion as of September 27, 2025, from $2.589 billion as of March 29, 2025, due to share repurchase activity and dividends declared[189] Investment and Financing - As of September 27, 2025, the company had $750 million available under its Global Credit Facility, with the ability to expand this to $1.500 billion[262] - The company has no financial covenants under its Global Credit Facility and Pan-Asia Borrowing Facilities, providing flexibility in its financing[263] - The company recorded $243.7 million in payment obligations under its supplier finance program as of September 27, 2025, up from $181.0 million in March 2025[259] Foreign Exchange and Risk Management - The company uses forward foreign currency exchange contracts to hedge against exchange rate fluctuations, primarily related to the Euro and Japanese Yen[275] - The company has established policies for managing foreign exchange risk, including transaction limits and credit quality controls[277] - The investment objectives include diversification to minimize liquidity and credit risk while achieving maximum returns[281]

Financial Performance - Net income for the three months ended September 2025 was $12,461, compared to $8,535 for the same period in 2024, reflecting a year-over-year increase of 46.5%[9] - Net income for the nine months ended September 30, 2025, was $39,949,000, an increase from $31,558,000 for the same period in 2024, representing a growth of approximately 26.5%[13] - Earnings per share (EPS) for the nine months ended September 2025 was $1.07, up from $0.85 in the same period of 2024, indicating a growth of 25.9%[8] - Total comprehensive income for the nine months ended September 2025 was $78,129, compared to $53,161 for the same period in 2024, showing an increase of 47%[9] - Total consolidated revenues for the nine months ended September 30, 2025, were $200.1 million, an increase from $175.2 million in the same period of 2024, representing a growth of approximately 14.2%[138] Asset and Equity Growth - Total assets increased to $5,235,575,000 as of September 30, 2025, up from $5,118,924,000 on December 31, 2024, representing a growth of 2.29%[7] - Total stockholders' equity grew to $465,949,000, up from $406,028,000, a significant increase of 14.69%[7] - The total stockholders' equity as of September 30, 2025, was $465,949,000, up from $439,678,000 as of September 30, 2024, representing an increase of approximately 6%[11] - The balance of common stock as of September 30, 2025, was $366,214,000, up from $365,542,000 as of September 30, 2024[11] Loan and Deposit Activity - Net loans rose to $3,298,252,000, an increase of 2.03% from $3,232,483,000 in the previous period[7] - Total deposits reached $4,400,515,000, reflecting a 3.13% increase from $4,266,779,000[7] - The company experienced a net change in deposits of $133,736,000 for the nine months ended September 30, 2025, compared to $184,451,000 for the same period in 2024, reflecting a decrease of approximately 27.5%[13] - Total loans increased to $3,327,099, up from $3,258,121, representing a growth of 2.1% year-over-year[32] Credit Losses and Provisions - The allowance for credit losses increased to $39,528,000 from $35,863,000, indicating a rise of 7.41%[7] - The provision for credit losses for the nine months ended September 2025 was $7,932, compared to $5,109 in the same period of 2024, reflecting a rise of 55.1%[8] - The provision for credit losses for the three months ended September 30, 2025, was $1,501, compared to a provision of $6,807 for the same period in 2024, showing a decrease of 77.9%[35] - The company reported a provision for credit losses of $5,109,000 for the nine months ended September 30, 2025, down from $7,932,000 for the same period in 2024, indicating a decrease of approximately 35.5%[13] Noninterest Income and Expenses - Total noninterest income for the three months ended September 30, 2025, was $11,430 thousand, compared to $12,340 thousand for the same period in 2024, reflecting a decrease in service charges and trust fees[75] - For the nine months ended September 30, 2025, total noninterest income was $34,032 thousand, an increase from $30,302 thousand in the same period of 2024, driven by higher trust fees and debit card fees[75] - Total noninterest expenses for the nine months ended September 2025 were $87,381, an increase from $80,517 in the same period of 2024, which is a rise of 8.5%[8] Securities and Investments - The available-for-sale securities portfolio had an amortized cost of $1,497,403, with a fair value of $1,301,766, resulting in gross unrealized losses of $199,767 as of September 30, 2025[26] - The Company reported proceeds from sales of available-for-sale securities of $28,750 for the three months ended September 30, 2025, with gross losses of $960[26] - The Company has not recorded an allowance for credit losses on available-for-sale securities as of September 30, 2025, as unrealized losses are attributed to noncredit-related factors[29] Cash and Liquidity - The company has maintained a strong liquidity position with total cash and cash equivalents of $92,345,000, up from $85,738,000, an increase of 7.88%[7] - The ending cash and cash equivalents as of September 30, 2025, were $92,345,000, down from $189,136,000 as of September 30, 2024, indicating a decrease of approximately 51%[13] Mergers and Acquisitions - The Company acquired Crest Retirement Advisors, LLC for $600,000, with an additional $400,000 in contingent consideration[24] - The Company announced a definitive merger agreement with Middlefield Banc Corp., valued at approximately $299.0 million, expected to close in the first quarter of 2026[157][158] Regulatory Capital Ratios - As of September 30, 2025, the common equity tier 1 capital ratio for the consolidated entity is 11.62%, significantly above the minimum requirement of 4.5%[132] - The total risk-based capital ratio for the consolidated entity stands at 15.08%, exceeding the minimum requirement of 8.0%[132] - The bank's tier 1 leverage ratio is reported at 9.12%, well above the minimum requirement of 4.0%[132]

Financial Performance - Net income for Q3 2025 was $6,201, an increase of $338 or 5.8% from $5,863 in Q3 2024, driven by higher operating revenues and lower income taxes [81]. - For the first nine months of 2025, net income was $14,891, a decrease of $292 or 1.9% from $15,183 in the same period of 2024, impacted by higher operating expenses and interest on debt [87]. Revenue Growth - Operating revenues for Q3 2025 increased by $646 or 3.3% to $20,361, primarily due to customer base growth and a $673 increase from the distribution system improvement charge (DSIC) approved by PPUC [82]. - Operating revenues for the first nine months of 2025 increased by $1,923 or 3.4% to $58,016, driven by customer base growth and $1,590 from the DSIC [89]. Customer Base Expansion - The average number of water customers served increased by 1,101 to 73,684 in 2025, while wastewater customers rose by 530 to 7,115, mainly due to acquisitions [82]. - The Company signed agreements to acquire wastewater and water assets, expected to add approximately 100 and 140 customers respectively, with closings anticipated in Q2 2026 [98][99]. Operating Expenses - Operating expenses for Q3 2025 rose by $787 or 6.7% to $12,447, attributed to higher distribution system maintenance, depreciation, and wages [83]. - Interest on debt for the first nine months of 2025 rose by $1,006 or 15.4% to $7,555, due to increased long-term debt and higher interest rates [91]. Debt and Capitalization - Interest on debt increased by $372 or 16.6% to $2,615 in Q3 2025, primarily due to an increase in long-term debt outstanding [84]. - Common stockholders' equity as a percentage of total capitalization decreased to 50.9% as of September 30, 2025, from 52.6% as of December 31, 2024 [109]. - The Company's total long-term debt as a percentage of total capitalization was 49.1% as of September 30, 2025, up from 47.4% at the end of 2024 [115]. - The Company has a committed line of credit of $50,000, with $37,430 borrowed as of September 30, 2025, and an interest rate of 5.45% [111]. Investments and Expenditures - The Company invested $37,102 in construction expenditures for main extensions and upgrades for the nine months ended September 30, 2025 [103]. - Anticipated construction expenditures for the remainder of 2025 are approximately $10,000, primarily funded through internally-generated funds [104]. - Internally-generated funds from operations increased to $21,432 during the first nine months of 2025, compared to $20,391 in the same period of 2024 [108]. Regulatory and Environmental Factors - Effective October 1, 2025, the Company's tariff included a DSIC on revenues of 4.89% [96]. - A drought watch was declared for 29 counties in Pennsylvania, which may impact future revenues and operating expenses [129]. - The Company maintains a substantial deferred income tax asset due to accelerated depreciation from the Tax Cuts and Jobs Act of 2017 [118]. Credit Rating - Standard & Poor's affirmed the Company's credit rating at A- with a stable outlook as of July 30, 2025 [121].

Financial Results Announcement - The York Water Company announced its third quarter and first nine months 2025 financial results on November 6, 2025[5] - The press release detailing the financial results is incorporated by reference in the Current Report on Form 8-K[5] Financial Metrics - The report does not include specific financial metrics or performance indicators in the provided content[5]

Business Segments - The company operates in three business segments: Capital Markets, Asset Management, and Principal Investing, with a focus on capital markets and asset management services [363]. - The Capital Markets segment includes unrealized and realized gains and losses on investments, with a notable focus on SPAC-related activities [367][376]. - The company has established SPAC Series Funds to invest in SPACs, which have become a significant part of the Principal Investing segment [378]. Revenue Generation - Revenue generation is primarily through fixed income sales, trading, advisory services, and asset management fees, with significant reliance on market conditions and trading volumes [367][374]. - The mortgage group's revenue is highly dependent on U.S. mortgage origination volumes, which are sensitive to interest rates and economic conditions [384]. - Rising interest rates have negatively impacted the fair value of fixed income securities and reduced mortgage activity, affecting overall profitability [386]. - Management fees are contingent on the performance of Investment Vehicles, with potential declines in demand affecting future fee income [374]. Market Conditions and Competition - Recent market conditions have led to margin pressures in the fixed income brokerage business, with expectations of continued competition impacting profitability [382]. - The company's trading activities are sensitive to market movements, with proprietary trading and riskless trades contributing to revenue generation [372]. Financial Performance - Total revenues increased by $111,767, or 183%, to $172,824 for the nine months ended September 30, 2025, compared to $61,057 for the same period in 2024 [420]. - Net trading revenue rose by $6,066 to $33,528 for the nine months ended September 30, 2025, compared to $27,462 for the same period in 2024, driven by significant gains in the gestation repo segment [421]. - New issue and advisory revenue surged by $245,311 to $298,658 for the nine months ended September 30, 2025, compared to $53,347 for the same period in 2024, primarily due to CCM's activities [433]. - Operating income increased to $29,362 for the nine months ended September 30, 2025, compared to a loss of ($2,520) for the same period in 2024, reflecting a significant turnaround [419]. - Net income attributable to Cohen & Company Inc. rose to $6,330 for the nine months ended September 30, 2025, compared to $1,824 for the same period in 2024, marking a 247% increase [419]. Operating Expenses - Total operating expenses increased by $79,885 to $143,462 for the nine months ended September 30, 2025, compared to $63,577 for the same period in 2024, primarily driven by increased compensation and benefits [419]. - Compensation and benefits rose by $76,220, or 175%, to $119,673 for the nine months ended September 30, 2025, compared to $43,453 in 2024 [453]. - Business development, occupancy, and equipment expenses increased by $1,259, or 27%, to $5,858 for the nine months ended September 30, 2025, compared to $4,599 in 2024 [456]. Cash Flow and Liquidity - Cash flow from operating activities for the nine months ended September 30, 2025, was $29,405, up from $5,042 in 2024, indicating improved operational efficiency [556]. - Cash and cash equivalents increased to $54,688 as of September 30, 2025, from $19,590 at the end of 2024, demonstrating enhanced liquidity [554]. - The company reported a net cash flow of $35,098 for the nine months ended September 30, 2025, compared to $3,640 in 2024, indicating strong cash generation [556]. SPAC Activities - Columbus Circle Capital Corp I completed the sale of 25,000,000 units in its IPO, with the company acting as the lead underwriter [387][388]. - The Columbus Circle SPAC entered a definitive business combination agreement with ProCap Financial, which will become publicly traded [401]. - Proceeds from the Business Combination are expected to be used by ProCap Financial to purchase bitcoin, aligning with its business strategy [402]. Tax and Income - Income tax expense increased by $1,208 million to $1,643 million for the nine months ended September 30, 2025, compared to $435 million in 2024 [469]. - The net income before tax for the Operating LLC was $15,998 million for the nine months ended September 30, 2025 [479]. - The net income after tax for the Operating LLC was $14,397 million for the nine months ended September 30, 2025 [479]. Future Financing Needs - The company may need to raise additional debt or equity financing to capitalize on attractive investment opportunities [557]. - Future merger or acquisition activities may require additional funding through equity or debt offerings if liquidity sources are insufficient [557].

Financial Performance - As of September 30, 2025, Lipocine had $15.1 million in unrestricted cash, down from $21.6 million at December 31, 2024, representing a decrease of approximately 30.3%[7] - The net loss for the third quarter ended September 30, 2025, was $3.2 million, or ($0.59) per diluted share, compared to a net loss of $2.2 million, or ($0.44) per diluted share, for the same period in 2024, indicating an increase in loss of 45.5%[7] - For the nine months ended September 30, 2025, Lipocine reported a net loss of $7.3 million, or ($1.35) per diluted share, compared to a net loss of $1.8 million, or ($0.33) per diluted share, for the same period in 2024, representing an increase in loss of 305.6%[13] - Total revenues for the three months ended September 30, 2025, were $114,574, compared to $0 in the same period of 2024, indicating a significant increase[26] - Total revenue for the nine months ended September 30, 2025, was $831,000, a significant decrease from $7.7 million in the same period of 2024, primarily due to a drop in license revenue from $7.5 million to $500,000[14] - License revenue for the nine months ended September 30, 2025, was $500,000, down from $7,500,000 in the same period of 2024[26] - The net loss attributable to common shareholders for the three months ended September 30, 2025, was $3,186,832, compared to a loss of $2,218,818 in the same period of 2024[26] - Comprehensive loss for the three months ended September 30, 2025, was $(3,180,962), compared to $(2,199,157) in the same period of 2024[26] Expenses - Research and development expenses increased to $2.7 million for the third quarter of 2025 from $1.6 million in the same quarter of 2024, reflecting a rise of 68.8% primarily due to ongoing clinical trials[9] - Operating expenses for the three months ended September 30, 2025, totaled $3,475,614, an increase from $2,630,473 in the same period of 2024[26] - Research and development expenses for the three months ended September 30, 2025, were $2,707,777, up from $1,585,233 in the same period of 2024[26] - General and administrative expenses decreased to $0.8 million for the third quarter of 2025 from $1.1 million in the same quarter of 2024, a reduction of 27.3%[11] - General and administrative expenses for the three months ended September 30, 2025, were $767,837, down from $1,045,240 in the same period of 2024[26] Assets and Cash Position - Lipocine's total assets decreased to $16.1 million as of September 30, 2025, from $22.5 million at December 31, 2024, a decline of approximately 28.5%[24] Product Development - Lipocine is developing LPCN 1154 for postpartum depression, with top-line data expected in Q2 2026 and plans for a 505(b)(2) NDA submission in the U.S. in 2026[4] - The company is exploring partnerships for LPCN 1154 and LPCN 2401, which targets obesity management and is expected to enter a proof-of-concept Phase 2 study[10] Revenue Sources - Royalty revenue from TLANDO sales was $115,000 during the quarter ended September 30, 2025, with no royalty revenue recorded in the comparable period in 2024[8]

Regulatory Approvals and Product Launches - TLANDO received FDA approval on March 28, 2022, and was commercially launched on June 7, 2022[95][109]. - The FDA requires an efficacy and safety study of oral LPCN 1154 in the target population for 505(b)(2) NDA submission[120]. - FDA granted orphan drug designation to LPCN 1107, providing development incentives including tax credits and waiver of user fees[174]. Licensing Agreements and Financials - Verity Pharma paid an initial payment of $2.5 million upon signing the Verity License Agreement and an additional $5 million on February 1, 2024[111]. - The company is eligible to receive milestone payments of up to $259 million based on sales and development milestones under the Verity License Agreement[111]. - The company entered into multiple licensing agreements for TLANDO, including a $2.5 million initial payment from Verity Pharma and potential milestone payments of up to $259 million[208]. - Revenue generated from license fees, royalties, and milestone payments totaled $53.9 million since inception through September 30, 2025[177]. - Total revenue for the nine months ended September 30, 2025 was $831,287, a decrease of $6.9 million compared to $7.7 million in 2024[196]. Research and Development - LPCN 1154 is being developed as a fast-acting oral antidepressant for postpartum depression with a 48-hour treatment duration[103]. - The company aims to leverage its Lip'ral drug delivery technology platform to develop differentiated products for conditions with large unmet medical needs[102]. - LPCN 2101 is being evaluated for epilepsy, including drug-resistant epilepsy and women with epilepsy[103]. - LPCN 2401 demonstrated a 4.4% increase in lean mass and a 6.7% decrease in fat mass in a Phase 2 study, indicating its potential for improving body composition in patients using GLP-1 therapies[154]. - LPCN 1148 met its primary endpoint by increasing skeletal muscle index (L3-SMI) relative to placebo (P<.01) in male cirrhotic patients, showing its efficacy in managing sarcopenia[164]. Clinical Studies and Outcomes - Positive data from a qEEG study of oral brexanolone indicated robust CNS activity, suggesting effective oral delivery of endogenous GABAA receptor PAMs[118]. - As of the end of Q3 2025, one-third of planned participants have been randomized in the Phase 3 safety and efficacy study for LPCN 1154[120]. - The Phase 2 study of LPCN 1148 showed fewer occurrences of hepatic encephalopathy (OHE) events in treated patients, suggesting improved clinical outcomes[165]. Market Opportunities and Unmet Needs - Approximately 600,000 women are affected by postpartum depression (PPD) annually, with about 240,000 diagnosed and 144,000 treated with prescription medication[126]. - LPCN 1154 aims to provide rapid relief with a 48-hour duration through a convenient oral therapy, addressing the unmet need for fast-acting treatments for PPD[128]. - Drug-resistant epilepsy (DRE) affects 30-40% of epilepsy patients in the U.S., contributing to $24.5 billion in annual healthcare costs[131]. - Approximately 74% of U.S. adults aged 20 and older are either obese or overweight, highlighting a significant market opportunity for obesity management solutions[157]. Financial Performance and Expenses - Research and development expenses amounted to approximately $160.5 million since inception through September 30, 2025[178]. - Research and development expenses for the three months ended September 30, 2025 increased by $1.35 million primarily due to LPCN 1154 Phase 3 clinical trial costs[190]. - General and administrative expenses for the three months ended September 30, 2025 decreased by $277,403 compared to the same period in 2024[191]. - As of September 30, 2025, the company had $15.1 million in unrestricted cash, down from $21.6 million as of December 31, 2024[203]. Cash Flow and Liquidity - For the nine months ended September 30, 2025, net cash used in operating activities was $6.8 million, compared to $2.9 million for the same period in 2024[217]. - The company expects to continue incurring operating losses as it advances the clinical development of multiple product candidates, including LPCN 1154 and LPCN 2401[202]. - The company has sufficient liquidity to meet projected operating requirements through at least November 6, 2026, but may need to raise additional capital[214]. Market Risks and Accounting Policies - The company is exposed to various market risks, including potential losses from adverse changes in interest rates, but does not engage in derivatives for trading or speculative purposes[227]. - There have been no material changes to the company's market risk during the first nine months of 2025, as noted in the 2024 Form 10-K[228].

Revenue Growth - Total revenue for the three months ended September 30, 2025, was $131.7 million, an increase of $15.3 million or 13.1% compared to $116.4 million for the same period in 2024[128][146]. - Annual recurring revenue (ARR) as of September 30, 2025, was $528.1 million, representing a 14.2% increase from $462.4 million as of September 30, 2024[130]. - Subscription revenue for the three months ended September 30, 2025, was $130.5 million, a 13.5% increase from $115.0 million in the same period in 2024[146][147]. - Total revenue increased by $31.5 million, or 9.0%, for the nine months ended September 30, 2025, compared to the same period in 2024[162]. - Subscription revenue increased by $33.3 million, or 9.7%, for the nine months ended September 30, 2025, representing 99.0% of total revenue[163]. Customer Metrics - The number of customers with ARR over $50,000 increased by 14.8% to 2,611 as of September 30, 2025, up from 2,275 as of September 30, 2024[131]. - The annual dollar-based net revenue retention rate for subscription products was approximately 102% for the trailing twelve-month period ended September 30, 2025, down from 105% for the same period in 2024[148][164]. Operating Income and Expenses - Operating income for the three months ended September 30, 2025, was $11.6 million, down from $23.9 million for the same period in 2024[133]. - Operating expenses rose by $17.8 million, or 24.5%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by increases in sales and marketing, research and development, and general and administrative expenses[152]. - Total operating expenses for the nine months ended September 30, 2025, increased by $45.7 million, or 20.2%, to $271.6 million, representing 71.3% of revenue compared to 64.6% in 2024[167]. Net Income and Tax - Net income for the three months ended September 30, 2025, was $1.4 million, a decrease from $10.8 million for the same period in 2024, primarily due to increased expenses[133]. - The effective tax rate increased to 82.2% for the three months ended September 30, 2025, primarily due to an increase in unbenefited losses in the United States[159]. - Income tax expense decreased by $4.8 million, with an effective tax rate of 293.0% for the nine months ended September 30, 2025, primarily due to an increase in unbenefited losses in the U.S.[174]. Cash Flow and Investments - Cash flows from operations for the three months ended September 30, 2025, were $24.0 million, compared to $22.0 million for the same period in 2024[134]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $67.9 million, an increase from $53.5 million in 2024[195]. - Net cash used in investing activities increased to $22.0 million for the nine months ended September 30, 2025, compared to $15.6 million in 2024, primarily due to increased capitalized research and development costs[199]. - The company repurchased $10.0 million of common stock during the three months ended September 30, 2025, and $20.0 million during the nine months ended September 30, 2025, under its share repurchase program[192]. Acquisitions and Future Plans - The company completed the acquisition of Adlumin on November 20, 2024, contributing to revenue growth and customer expansion[130]. - The company expects to continue growing its sales and marketing organization to drive new customer additions and retain existing customers[139]. - Research and development expenses are anticipated to increase as the company brings new product offerings to market and enhances security features[140]. - The company has not entered into any material definitive agreements regarding potential investments or acquisitions but may consider such arrangements in the future[193].

Financial Performance - Net sales increased by 7.0% to $122.5 million in Q3 2025 compared to $114.6 million in Q3 2024, with growth across all reportable segments: Wholesale, Retail, and Contract Manufacturing [74]. - Year-to-date net sales for 2025 reached $342.3 million, a 5.1% increase from $325.7 million in 2024, primarily driven by growth in the Retail segment [80]. - Total net sales for the nine months ended September 30, 2025 were $342.3 million, a 5.1% increase from $325.7 million in the prior year, driven by increased demand in wholesale and retail segments [95]. - Retail net sales rose by 15.1% to $95.9 million for the nine months ended September 30, 2025, attributed to growth in the Lehigh CustomFit business and enhanced e-commerce sales [96]. - Wholesale segment net sales increased by 6.1% to $89.1 million in Q3 2025, attributed to higher demand and tariff-related price increases [84]. - Operating income for the nine months ended September 30, 2025, was $27.6 million, or 8.1% of net sales, compared to $22.6 million, or 6.9% of net sales, in the prior year [83]. Margins and Expenses - Gross margin improved by 210 basis points to 40.2% in Q3 2025, driven by favorable shifts in product mix and price increases, particularly in rubber-boot brands [74][77]. - Operating expenses increased to $37.5 million, or 30.6% of net sales, in Q3 2025, up from $33.6 million, or 29.3% of net sales, in Q3 2024, due to higher logistics and selling costs [78][91]. - Total operating expenses for the nine months ended September 30, 2025 were $112.0 million, representing 32.7% of net sales, an increase from 31.7% in the prior year [102]. - Wholesale gross margin increased to $94.8 million, or 40.0% of net sales, compared to $86.0 million, or 37.0% of net sales, for the same period last year, reflecting a favorable product mix [99]. Cash Flow and Debt - Net cash used in operating activities for the nine months ended September 30, 2025 was $1.3 million, a significant decrease from $28.4 million provided in the same period last year [111]. - An increase in inventory resulted in a cash use of $26.9 million for the nine months ended September 30, 2025, compared to $2.6 million in the prior year, driven by tariffs and anticipated demand [112]. - As of September 30, 2025, the company maintained cash and cash equivalents of $3.3 million and had $40.1 million available under its ABL Facility [106]. - Total debt decreased by 7.5% to $139.0 million as of September 30, 2025, reflecting continued debt repayments [74]. - Interest expense for the three months ended September 30, 2025 decreased to $2.5 million from $3.2 million in the prior year, a reduction of 21.6% due to lower debt levels and interest rates [92]. Tax and Legal Matters - Income tax expense increased by 25.9% to $2.0 million for the three months ended September 30, 2025, compared to $1.6 million in the same period last year [93]. - The effective tax rate decreased to 22.1% for the nine months ended September 30, 2025, down from 23.4% in the previous year, primarily due to the earnings mix between the U.S. and international subsidiaries [105]. - The Company is contingently liable for lawsuits, taxes, and other matters arising in the normal course of business, with no off-balance sheet arrangements or related party transactions affecting financial results [117]. Strategic Initiatives - The company is implementing sourcing shifts to leverage manufacturing facilities in the Dominican Republic and Puerto Rico to mitigate tariff impacts [68]. - A share repurchase program was announced on February 25, 2025, allowing for the repurchase of up to $7.5 million of the Company's outstanding common stock [116]. Accounting and Market Risk - The Company has identified critical accounting policies that impact estimates and assumptions in financial reporting, with historical results not materially differing from estimates [118]. - There have been no material changes to market risk as disclosed in the Annual Report for the year ended December 31, 2024 [121].

Financial Performance - Total revenues for the three months ended September 30, 2025, were $430,000, a decrease of 48.7% compared to $838,000 for the same period in 2024[14]. - The company reported a net income of $14,184,000 for the three months ended September 30, 2025, compared to a net loss of $1,087,000 for the same period in 2024[14]. - For the nine months ended September 30, 2025, the company reported a net income of $10.6 million compared to a net loss of $4.9 million for the same period in 2024[22]. - The company reported revenues from discontinued operations of $226,000 for the three months ended September 30, 2025, compared to $85,000 for the same period in 2024, representing a 165% increase[48]. - The company reported a net income from discontinued operations of $250,000 for the three months ended September 30, 2025, compared to a loss of $44,000 for the same period in 2024[48]. Revenue Breakdown - License fees accounted for $406,000, representing 94.4% of total revenue, down from $731,000 or 87.2% in the prior year[73]. - Net revenues from IT & Industrial in North America for the nine months ended September 30, 2025, were $329,000, down from $589,000 in 2024[36]. - In the Asia Pacific region, net revenues from Automotive for the nine months ended September 30, 2025, were $313,000, a decrease from $597,000 in 2024[36]. - Japan contributed $277,000 in revenue, accounting for 64.4% of total revenue for the three months ended September 30, 2025[62]. Expenses and Margins - Gross margin for the nine months ended September 30, 2025, was $1,518,000, down from $2,389,000 for the same period in 2024[14]. - Gross margin for the three months ended September 30, 2025, was $421,000, a decline of 48.3% from $815,000 in the same period last year[73]. - Research and development expenses for the three months ended September 30, 2025, were $794,000, slightly down from $822,000 in the same period of 2024[14]. - Research and development expenses increased by 5.6% to $2.8 million for the nine months ended September 30, 2025, compared to $2.7 million in 2024[81]. - Total costs and expenses for the three months ended September 30, 2025, were $2,127,000, compared to $2,054,000 for the same period in 2024, an increase of 3.5%[60]. Assets and Liabilities - The total current assets increased to $32,193,000 as of September 30, 2025, compared to $17,685,000 as of December 31, 2024[12]. - The company’s total liabilities were $6,016,000 as of September 30, 2025, compared to $1,939,000 as of December 31, 2024[12]. - Cash and cash equivalents decreased to $11,585,000 as of September 30, 2025, from $16,427,000 as of December 31, 2024[12]. - The accumulated deficit improved to $(213,497,000) as of September 30, 2025, from $(224,080,000) as of December 31, 2024[12]. - The company has an accumulated deficit of approximately $213.5 million as of September 30, 2025, down from $224.1 million at the end of 2024[31]. Gains and Other Income - The company recognized a gain from patent assignment of $19,389,000 for the three months ended September 30, 2025[14]. - The company recognized a gain of approximately $19.4 million from a patent assignment during the third quarter of 2025[39]. - Gain from patent assignment was $19.4 million for the nine months ended September 30, 2025[86]. Shareholder and Market Activities - The company has entered into an At The Market Offering Agreement with Ladenburg Thalmann & Co. Inc. to issue and sell up to approximately $10 million of shares of common stock[51]. - The company has an At-the-Market Offering Program allowing it to issue and sell up to $10 million of common stock, with a commission of 3.0% on gross sales price per share sold[107][108]. - No shares were sold under the Ladenburg ATM Facility during the three and nine months ended September 30, 2025, while 1,423,441 shares were sold in the same periods of 2024, generating net proceeds of $5.8 million[110]. Legal and Compliance - The company has identified material weaknesses in internal controls over financial reporting, particularly in the design and operation of controls related to income tax calculations and management override risks[119][120]. - The company is involved in ongoing legal proceedings related to patent infringement against Apple and Samsung, with a settlement reached with Samsung in August 2025[115]. Operational Considerations - The ongoing war in Ukraine may exacerbate supply chain disruptions, impacting the company's operations and financial conditions[72]. - The company has sufficient cash to meet its obligations for at least one year from the date of the financial statements, despite operating losses and negative cash flows from operations[97]. - The company may need additional capital sources beyond cash on hand and its ATM Facility if operations do not become cash flow positive, potentially leading to equity investments or debt arrangements[98].