Note 3 – Licensing Agreements

The Company has entered into licensing agreements that provide for royalty payments based on a percentage of sales of products covered by the license agreements, subject to certain minimum guaranteed amounts. Royalty expense is calculated based upon sales at contractual rates under the licensing agreements and any applicable minimum guaranteed amounts. Royalty expense is included in cost of products sold in the accompanying unaudited condensed consolidated statements of income and amounted to $1.9 million and $1.7 million for the three months ended September 28, 2025 and September 29, 2024, respectively, and amounted to $2.9 and $2.8 million for the six months ended September 28, 2025 and September 29, 2024, respectively.