Table of Contents

FOREIGN CURRENCY EXCHANGE RATE RISK

We are exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U$.$S$.$ dollars and on the purchase of goods by these foreign operations that are not denominated in their local currencies. We use derivative instruments to hedge a portion of our foreign currency exchange rate risk, none of which are for trading or speculative purposes. Our foreign currency related hedging arrangements outstanding at the end of fiscal $2022$ were not material.

COMMODITY PRICE RISK

We experience inflation and deflation related to our purchase of certain commodity products. This price volatility could potentially have a material impact on our financial condition and$/$or our results of operations. In order to mitigate price volatility, we monitor commodity price fluctuations and may adjust our selling prices accordingly; however, our ability to recover higher costs through increased pricing may be limited by the competitive environment in which we operate. We currently do not use derivative instruments to manage these risks.

Item $8.$ Financial Statements and Supplementary Data.

TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders' Equity.

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Note $1.$ Summary of Significant Accounting Policies

Note $2.$ Segment Reporting and Net Sales

Note $3.$ Property and Leases

Note $4.$ Debt and Derivative Instruments

Note $5.$ Income Taxes

Note $6.$ Stockholders' Equity.

Note $7.$ Fair Value Measurements

Note $8.$ Stock$-$Based Compensation

Note $9.$ Employee Benefit Plans

Note $10.$ Weighted Average Common Shares

Note $11.$ Commitments and Contingencies

Note $12.$ HD Supply Acquisition

cal $2022$ Form $10-$K

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