Financial Analysis

11. COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters. The Company believes that the ultimate disposition of such proceedings, lawsuits and claims will not have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or financial position of the Company. Environmental Contingencies The Company and certain of its subsidiaries have been named by the Environmental Protection Agency (the EPA) or a comparable state agency under the Comprehensive Environmental Response, Compensation and Liability Act (the Superfund Act) or similar state law as potentially responsible parties in connection with alleged releases of hazardous substances at three sites. Under the Superfund Act and similar state laws, all parties who may have contributed any waste to a hazardous waste disposal site or contaminated area identified by the EPA o …

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6. STOCK-BASED COMPENSATION As of May 31, 2026, the Company had a 2018 Stock Option Plan (the 2018 Plan) and no other stock-based compensation plan. The 2018 Plan was adopted by the Board of Directors of the Company on May 8, 2018, approved by the shareholders of the Company at the Annual Meeting of Shareholders of the Company on July 24, 2018, and amended by the shareholders of the Company on July 18, 2024 and provides for the grant of options to purchase up to 1,550,000 shares of common stock of the Company. Prior to the 2018 Plan, the Company had the 2002 Stock Option Plan (the 2002 Plan) which had been approved by the Companys shareholders and provided for the grant of stock options to directors and key employees of the Company. All options granted under the 2018 Plan and 2002 Plan have exercise prices equal to the fair market value of the underlying common stock of the Company at the time of grant which, pursuant to the terms of such Plans, is the reported closing price of the common stock on the New York Stock Exchange on the date preceding the date the option is granted. Options granted under the Plans become exercisable 25% one year after the date of grant, with an additional 25% exercisable each succeeding anniversary of the date of grant, and expire 10 years after the date of grant. Upon termination of employment or service as a director, all options held by the optionee that have not previously become exercisable shall terminate and all other options held by such o …

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2. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability ( i.e ., the exit price) in an orderly transaction between market participants at the measurement date. Fair value measurements are broken down into three levels based on the reliability of inputs as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability ( e.g. , interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset …

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9. INCOME TAXES For the 13 weeks ended May 31, 2026, the Company recorded an income tax provision of $1,268, which included a discrete income tax provision of $0. For the 13 weeks ended June 1, 2025, the Company recorded an income tax provision of $694, which included a discrete income tax provision of $(28). The Companys effective tax rate for the 13 weeks ended May 31, 2026 was 26.4% compared to 25.0% in the comparable prior year period. The effective tax rate for the 13 weeks ended May 31, 2026 was higher than the U.S. statutory rate of 21% primarily due to state and local taxes. The effective tax rate for the 13 weeks ended June 1, 2025 was higher than the U.S. statutory rate of 21% primarily due to state and local taxes and discrete income tax provisions for the accrual of interest related to unrecognized tax benefits. …

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5. LEASES The Company has operating leases related to land, office space, warehouse space and equipment. All of the Companys leases have been assessed to be operating leases. Renewal options are included in the lease terms to the extent the Company is reasonably certain to exercise the options. The exercise of lease renewal options is at the Companys sole discretion. The incremental borrowing rate represents the Companys ability to borrow on a collateralized basis over a term similar to the lease term. The leases typically contain renewal options for periods ranging from one year to ten years and require the Company to pay real estate taxes and other operating costs. The latest land lease expiration is 2068 assuming exercise of all applicable renewal options by the Company. The Companys existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing or exercise its available renewal options. Future minimum lease payments under non-cancellable operating leases as of May 31, 2026 are as follows: Fiscal Year: 2027 $ 44 2028 61 2029 65 2030 59 2031 16 Thereafter 127 Total undiscounted operating lease payments 372 Less imputed interest (65 ) Present value of operating lease payments $ 307 The above payment schedule includes renewal options that the Company is reasonably likely to exercise. Leases with an initial term of 12 months or less are not recorded on the Companys condensed consolidated balance sheet. The Company …

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12. OPERATING SEGMENT The Company operates in a single segment. The Companys Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM assesses the performance of this reportable segment and allocates resources on a consolidated basis using the entity-wide revenues and expense information reported on the Condensed Consolidated Statements of Operations. The primary measure of segment profit is consolidated net income as reported on the Condensed Consolidated Statements of Operations. In addition, segment assets reviewed by the CODM are reported on the Companys Condensed Consolidated Balance Sheets as total assets. …

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"8. SHAREHOLDERS EQUITY On May 23, 2022, the Company announced that its Board of Directors authorized the Companys purchase, on the open market and in privately negotiated transactions, of up to 1,500,000 additional shares of its common stock. This authorization superseded any unused prior Board of Directors authorizations to purchase shares of the Companys Common Stock. The Company purchased 0 and 166,955 shares of its common stock during the 13 weeks ended May 31, 2026 and June 1, 2025, respectively. As a result, the Company is authorized to purchase up to a total of 781,766 shares of its common stock, representing approximately 3.6% of the Companys 21,751,211 total outstanding shares as of the close of business on July 7, 2026. There is no assurance the Company will purchase any shares pursuant to this Board of Directors authorization. Shares purchased by the Company, if any, will be retained as treasury stock and will be available for use under the Companys stock option plan and for other corporate purposes. On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (Needham) and Citizens JMP Securities, LLC (Citizens) (the Distribution Agreement) with respect to an at the market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.10 per share, having an aggregate offering price of up to $50,000 through Needham and Citizens as its …

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13. SUBSEQUENT EVENT In July 2026, the Company entered into a sublease agreement covering approximately 18 acres of land in Tulsa, Oklahoma. The Company plans to build a new composites material manufacturing and development facility on the site. The facility will include full production lab facilities, office space, storage and freezer space and ancillary equipment necessary to support all planned manufacturing operations. The sublease commences on September 1, 2026 and has an initial term of 25 years with a renewal option for an additional 25 years. Annual rent under the sublease agreement for the initial five years of the sublease would be $269,469 with increases for each subsequent five-year period based upon the Consumer Price Index for All Urban Consumers, U.S,, City Average All Items as published by the United States Department of Commerce. The Company expects economic development incentives to offset a significant portion of rent expense.

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