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Item 2. Management’s Discussion and Analysis

2026-02-09 compared with 2025-11-07 · 322 added, 129 removed, 214 unchanged (68% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto for the period ended September 30, 2025 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto for the period ended December 31, 2025 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included in this Form 10-Q under the heading “Forward-Looking Statements” in the introduction of this Form 10-Q.

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During the fourth quarter of fiscal year 2025, we announced that our Board of Directors was conducting a comprehensive review of the Company’s portfolio with the assistance of our independent financial advisor.

The Board is considering a broad range of strategic options to enhance value.

Also, in the third quarter of fiscal year 2025, we announced that we were exploring strategic alternatives regarding our personal care business to focus on our portfolio of better-for-you food and beverages.

As part of this review, on January 30, 2026, the Company entered into a definitive agreement to sell its North American Snacks business, including Garden Veggie Snacks, Terra ® chips and Garden of Eatin’ ® snacks as well as certain private label products (the “North American Snacks Business”) for $115,000 in cash, subject to a customary inventory adjustment (the “Transaction”).

The Company will use the net proceeds from the Transaction to pay down debt.

The Transaction, which is expected to close in February 2026, represents an important first step in the Company’s broader strategic review, as it will reduce leverage while enabling the Company to focus on a more concentrated portfolio of core assets to drive growth.

See Note 19, Subsequent Event.

Further, in the third quarter of fiscal year 2025, we announced that we were exploring strategic alternatives regarding our personal care business to focus on our portfolio of better-for-you food and beverages.

Restructuring Program

During the first quarter of fiscal year 2024, we initiated a multi-year growth, transformation and restructuring program (the “Restructuring Program”) intended to drive shareholder returns.

The savings initiatives impact our reportable segments and Corporate and Other.

The program is intended to optimize our portfolio, improve underlying profitability and increase our flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth.

Implementation of the Restructuring Program is expected to be completed by the end of the 2027 fiscal year.

Cumulative pretax charges associated with the Restructuring Program are expected to be $100 million - $110 million comprised of contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses.

For the three months ended September 30, 2025, we incurred pretax charges of $14 million of expenses associated with the Restructuring Program, compared to $5 million in the prior year period.

As part of the Restructuring Program, the Company completed the sale of three non-core brands and our investment in a joint venture during fiscal 2024 and fiscal 2025.

We also announced the exit of the Yves Veggie Cuisine ® plant-based business in Canada, which was completed in the second quarter of fiscal 2026.

We initiated actions to consolidate our personal care manufacturing footprint and exit our non-strategic joint venture in India, which were substantially completed in the first quarter of fiscal 2025.

The Company also initiated actions to:

(i) simplify its distribution footprint in the U.S.;

(ii) rationalize certain product categories for greater capacity utilization, cost reduction and margin expansion;

and (iii) reduce office space.

During the first quarter of fiscal year 2024, the Company began a multi‑year restructuring program (the “Restructuring Program”), to improve profitability and support future growth and incurred charges related to contract terminations, asset write‑downs, employee‑related costs, and other transformation-related expenses.

Cumulative pretax charges associated with the Restructuring Program are expected to be $115 million - $125 million which represents an increase of $15 million from the previously reported range, primarily due to incremental restructuring actions expected to be incurred in connection with the sale of the North American Snacks Business.

The Restructuring Program is expected to conclude by fiscal year 2027.

For the three and six months ended December 31, 2025, we incurred pretax charges of $3.8 million and $17.3 million respectively, associated with the Restructuring Program, compared to approximately $7.3 million and $12.7 million respectively, in the corresponding periods of the prior year.

Annualized pretax savings are expected to be $130 million - $150 million.

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Global Economic Environment

Inflation volatility, changing consumer behavior, and geopolitical tensions, particularly the Russia-Ukraine conflict, have driven higher supply chain costs and broader business impacts.

Tariffs and potential countermeasures further contribute to industry-wide uncertainty.

Inflation volatility, shifting consumer behavior, and broader geopolitical tensions have contributed to rising supply chain costs and broader business impacts.

Ongoing economic uncertainty, driven by factors such as inflation volatility, evolving fiscal policies, global supply chain constraints, changes in interest rates, and changing U.S.

and international trade restrictions and tariffs further heightens industry-wide uncertainty.

We continually assess the nature and extent of these potential and evolving impacts on our business, consolidated operational results, liquidity, and capital resources.

Comparison of Three Months Ended September 30, 2025 to Three Months Ended September 30, 2024

Comparison of Three Months Ended December 31, 2025 to Three Months Ended December 31, 2024

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the three months ended September 30, 2025 and 2024 (dollars in thousands, other than per share amounts and percentages, which may not add due to rounding):

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the three months ended December 31, 2025 and 2024 (dollars in thousands, other than per share amounts and percentages, which may not add due to rounding):

Three Months Ended

September 30, 2025

September 30, 2024

December 31, 2025

December 31, 2024

Cost of sales

Selling, general and administrative expenses

Goodwill impairment

Intangibles and long-lived asset impairment

Productivity and transformation costs

Amortization of acquired intangible assets

Long-lived asset impairment

Operating (loss) income

Proceeds from insurance claim

Operating loss

Interest and other financing expense, net

Other (income) expense, net

Other income, net

Loss before income taxes and equity in net loss of equity-method investees

(Benefit) provision for income taxes

Provision for income taxes

Equity in net loss of equity-method investees

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* Percentage is not meaningful due to one or more numbers being negative.

Net sales for the three months ended September 30, 2025 were $367.9 million, a decrease of $26.7 million, or 6.8%, including an unfavorable impact of $12.3 million, or 2.7%, related to held for sale businesses, discontinued brands and exited product categories and a favorable impact of $6.6 million, or 1.7%, from foreign exchange, as compared to the prior year quarter.

Net sales for the three months ended December 31, 2025 were $384.1 million, a decrease of $27.4 million, or 6.7%, including an unfavorable impact of $10.2 million, or 2.2%, related to held for sale businesses, discontinued brands and exited product categories and a favorable impact of $9.0 million, or 2.2%, from foreign exchange, as compared to the prior year quarter.

The decrease in net sales reflected a decline in the North America reportable segment, partially offset by an increase in net sales in the International reportable segment.

Organic net sales, defined as net sales adjusted to exclude the impact of foreign exchange, acquisitions, divestitures, discontinued brands and exited product categories, decreased $26.2 million, or 6.7%, from the prior year quarter.

The decrease in organic net sales comprised of a 7% decrease in volume/mix, partially offset by a 1% increase in price.

The decrease in each of net sales and organic net sales was primarily due to declines in both the North America and International reportable segments.

The decrease in organic net sales was due to decline in both the North America and International reportable segments.

Additionally, the decrease in organic net sales was comprised of a 9.0% decrease in volume/mix, partially offset by a 2.0% increase in price.

Further details of changes in net sales by segment are provided below in the Segment Results section.

Gross profit for the three months ended September 30, 2025 was $68.1 million, a decrease of $13.5 million, or 16.6%, as compared to the prior year quarter.

Gross profit margin for the three months ended September 30, 2025 was 18.5% compared with 20.7% in the prior year quarter.

The decrease in gross profit was driven primarily by the International reportable segment, mainly due to lower volume/mix and cost inflation, partially offset by productivity savings and trade efficiencies.

This decline was partially offset by an increase in gross profit in the North America reportable segment, mainly driven by higher margin due to productivity savings, pricing and trade efficiencies, partially offset by lower volume/mix and cost inflation.

Gross profit for the three months ended December 31, 2025 was $74.4 million, a decrease of $19.0 million, or 20.3%, as compared to the prior year quarter.

Gross profit margin for the three months ended December 31, 2025 was 19.4% compared with 22.7% in the prior year quarter.

The decrease in gross profit was driven by both the North America and International reportable segments.

The decrease in the North America reportable segment was mainly due to lower sales volume, cost inflation and unfavorable fixed cost absorption, partially offset by productivity savings and pricing.

International reportable segment gross profit decrease was driven by cost inflation, lower volume/mix and unfavorable fixed cost absorption, partially offset by productivity savings and pricing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $65.5 million for the three months ended September 30, 2025, a decrease of $5.8 million, or 8.2%, from $71.3 million for the prior year quarter.

The decrease was due to lower employee-related and non people cost discipline, as the Company began to implement overhead reduction actions.

Selling, general and administrative expenses were $60.9 million for the three months ended December 31, 2025, a decrease of $9.3 million, or 13.2%, from $70.2 million for the prior year quarter.

The decrease was primarily due to lower compensation-related expenses and non-employee-related cost discipline, as the Company continued to implement overhead reduction actions.

Goodwill Impairment

During the three months ended December 31, 2025, the Company recognized aggregate non-cash goodwill impairment charges of $119.9 million related to its U.S.

reporting units.

During the three months ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $91.3 million within the North America segment related to its U.S.

reporting unit.

See Note 9, Goodwill and Intangible Assets, and Note 14 , Fair Value Measurements, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Intangibles and Long-Lived Asset Impairment

During the three months ended December 31, 2025, the Company recorded a non-cash impairment charge of $11.9 million within its International segment related to the Hartley’s ® jelly indefinite-lived intangible asset.

During the three months ended December 31, 2024, the Company recorded a non-cash impairment charge of $15.7 million within its North America segment related to the indefinite and definite lived intangible assets associated with its personal care brands (namely, Avalon Organics ® , JASON ® , and Live Clean ® ) and $2.3 million related to an asset group primarily comprised of certain production assets in the North America reportable segment.

See Note 9, Goodwill and Intangible Assets, and Note 14 , Fair Value Measurements, in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q

Productivity and Transformation Costs

Productivity and transformation costs were $8.2 million for the three months ended September 30, 2025, an increase of $3.2 million, or 63.8%, from $5.0 million in the prior year quarter.

Productivity and transformation costs were $5.2 million for the three months ended December 31, 2025, an increase of $1.0 million, or 24.9%, from $4.2 million in the prior year quarter.

The increase was primarily due to higher costs incurred in connection with the Restructuring Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $1.2 million for the three months ended September 30, 2025, a decrease of $1.0 million from $2.2 million in the prior year quarter, primarily reflecting reduced amortization expenses due to the impairment of the Personal Care tradenames (Alba Botanica ® , Avalon Organics ® , and JASON ® ) and Live Clean ® customer relationships recognized in the second quarter of fiscal 2025.

See Note 9, Goodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of the Form 10-K.

Operating (Loss) Income

Operating loss for the three months ended September 30, 2025 was $6.9 million compared to operating income of $3.1 million in the prior year quarter as a result of the items described above.

Amortization of acquired intangibles was $1.2 million for the three months ended December 31, 2025, a decrease of $0.6 million from $1.8 million in the prior year quarter.

Proceeds from Insurance Claim

Proceeds from insurance claim was $25.9 million for the three months ended December 31, 2025 on account of the recognition of a Representation & Warranty (“R&W”) insurance receivable related to a prior acquisition.

Operating Loss

Operating loss for the three months ended December 31, 2025 was $98.8 million compared to $91.9 million in the prior year quarter as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $15.5 million for the three months ended September 30, 2025, an increase of $1.8 million, or 12.8%, from $13.7 million in the prior year quarter.

The increase resulted primarily due to higher financing fees related to the amendment of our credit agreement.

Interest and other financing expense, net totaled $15.7 million for the three months ended December 31, 2025, an increase of $2.9 million, or 22.4%, from $12.8 million in the prior year quarter.

The increase resulted primarily from a higher interest rate spread as well as increased amortization of deferred financing fees related to the May 2025 and September 2025 amendments to our Credit Agreement, as defined below.

See Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Other (Income) Expense, Net

Other income, net totaled $0.7 million for the three months ended September 30, 2025, compared to $5.3 million of other expense, net in the prior year quarter.

The change primarily reflected the recognition of a $3.9 million pretax loss on the sale of the ParmCrisps ® business and higher net unrealized foreign currency losses in the prior year quarter.

Other Income, Net

Other income, net totaled $1.0 million for the three months ended December 31, 2025, a decrease of $3.0 million, or 75.3%, from $4.0 million in the prior year quarter.

The decrease was primarily due to a reduction in net foreign exchange gains in the prior year period.

Other income, net for the three months ended December 31, 2025 was primarily comprised of a $1.1 million aggregate pretax gain on the sale of intangible assets and certain property and equipment of the Yves Veggie Cuisine ® plant-based business in Canada.

Other income, net for the three months ended December 31, 2024 comprised net foreign exchange gains of $2.4 million and the recognition of a $1.6 million pretax gain on the sale of assets related to the Company’s former Bell, CA production facility.

Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees for the three months ended September 30, 2025 was $21.7 million compared to $16.0 million in the prior year quarter.

Loss before income taxes and equity in net loss of our equity-method investees for the three months ended December 31, 2025 was $113.5 million compared to $100.7 million in the prior year quarter.

The increase in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

(Benefit) Provision for Income Taxes

The (benefit) provision for income taxes includes federal, foreign, state and local income taxes.

Our income tax benefit was $1.3 million for the three months ended September 30, 2025 compared to expense of $3.5 million in the prior year quarter.

The effective income tax rate was a benefit of 5.8% and an expense of 22.0% for the three months ended September 30, 2025 and 2024, respectively.

The income tax benefit for the three months ended September 30, 2025 reflected foreign tax benefit in certain jurisdictions and an increase in the valuation allowance for both federal and state income taxes.

The income tax expense for the three months ended September 30, 2024 reflected foreign tax expense in certain jurisdictions and an increase in the valuation allowance for both federal and state income taxes.

Provision for Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes.

Our income tax expense was $2.4 million for the three months ended December 31, 2025 compared to $2.7 million in the prior year quarter.

The effective income tax rate was an expense of 2.1% and 2.7% for the three months ended December 31, 2025 and 2024, respectively.

The income tax expense for the three months ended December 31, 2025 reflected foreign tax expense in certain jurisdictions, recognition of the R&W insurance receivable related to a prior acquisition, impairment of goodwill, and movement in the valuation allowance for both federal and state income taxes.

The effective income tax rate for the three months ended December 31, 2024 was impacted by tax expense in certain jurisdictions, impairment of goodwill and personal care intangibles and movement in the valuation allowances for both federal and state income taxes.

Equity in Net Loss of Equity-Method Investees

Equity in net loss from our equity-method investments for each of the three months ended September 30, 2025 and September 30, 2024 was a loss of $0.2 million.

Net loss for the three months ended September 30, 2025, was $20.6 million, or $0.23 per diluted share, compared to $19.7 million, or $0.22 per diluted share, in the prior year quarter.

Equity in net loss from our equity-method investments for the three months ended December 31, 2025 was a loss of $0.1 million compared to $0.6 million in the prior year quarter.

Net loss for the three months ended December 31, 2025 was $116.0 million, or $1.28 per diluted share, compared to $104.0 million, or $1.15 per diluted share, in the prior year quarter.

The increase in net loss was attributable to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA was $19.7 million and $22.4 million for the three months ended September 30, 2025 and 2024, respectively, as a result of the factors discussed above.

Adjusted EBITDA was $24.3 million and $37.9 million for the three months ended December 31, 2025 and 2024, respectively, as a result of the factors discussed above.

See Reconciliation of Non-U.S.

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Segment Results

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the three months ended September 30, 2025 and 2024:

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the three months ended December 31, 2025 and 2024:

(Dollars in thousands)

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North America

Our net sales in the North America reportable segment for the three months ended September 30, 2025 were $203.9 million, a decrease of $27.2 million, or 11.8%, including an unfavorable impact of $12.4 million or 4.3% related to held for sale businesses, discontinued brands and exited product categories, as compared to the prior year quarter.

Our net sales in the North America reportable segment for the three months ended December 31, 2025 were $197.8 million, a decrease of $31.5 million, or 13.7%, including an unfavorable impact of $10.2 million, or 3.4%, related to held for sale businesses, discontinued brands and exited product categories, as compared to the prior year quarter.

Organic net sales decreased $21.3 million, or 10.3%, to $185.0 million from $206.4 million in the prior year quarter.

The decrease in net sales primarily reflected lower net sales in the snacks, personal care, and meal preparation categories, partially offset by higher net sales in the beverages category.

The decrease in the snacks category was due to velocity challenges and distribution losses.

The decline in the meal preparation category was primarily due to the impact of discontinued brands and exited product categories, while the decline in the personal care category was driven by portfolio simplification initiatives and distribution losses.

The decrease in organic net sales was primarily due to volume softness in the snacks category, as a result of velocity challenges and distribution losses, partially offset by growth in the beverages, baby & kids and meal preparation categories.

Adjusted EBITDA for the three months ended September 30, 2025 was $17.0 million, an increase of $4.6 million, or 36.5%, from Adjusted EBITDA of $12.5 million in the prior year quarter.

The increase was primarily driven by productivity savings, reduction in SG&A expenses, and pricing and trade efficiencies, partially offset by impact of lower volumes and cost inflation.

Adjusted EBITDA margin was 8.3%, a 290-basis point increase from the prior year period.

The decrease in net sales was primarily due to lower sales in the snacks, meal preparation, and baby & kids categories, partially offset by growth in the beverages category.

The decrease in the snacks category was driven by distribution losses and velocity declines.

The decline in the meal preparation category was primarily due to lower volume.

The decrease in organic net sales was primarily due to lower sales in the snacks and baby & kids categories, partially offset by growth in the beverages category.

The decrease in the baby & kids category was driven by lapping supply recovery from last year.

The increase in the beverage category is primarily due to lower trade spend and promotion effectiveness.

Adjusted EBITDA for the three months ended December 31, 2025 was $10.9 million, a decrease of $14.4 million, or 56.9%, from Adjusted EBITDA of $25.3 million in the prior year quarter.

The decrease was primarily driven by lower gross margins, partially offset by a reduction in SG&A.

The decrease in gross margin was driven by lower volume/mix, cost inflation and unfavorable fixed cost absorption, partially offset by productivity savings and pricing.

Adjusted EBITDA margin was 5.5%, a 550-basis point decrease from the prior year period.

International

Our net sales in the International reportable segment for the three months ended September 30, 2025 were $164.0 million, an increase of $0.5 million, or 0.3%, including a favorable impact of $6.7 million or 4.1% related to foreign exchange, as compared to the prior year quarter.

Our net sales in the International reportable segment for the three months ended December 31, 2025 were $186.3 million, an increase of $4.1 million, or 2.3%, including a favorable impact of $8.9 million, or 4.9%, related to foreign exchange, as compared to the prior year quarter.

Organic net sales decreased $4.8 million, or 2.7%, to $176.6 million from $181.4 million the prior year quarter.

The increase in net sales was primarily due to higher sales in the meal preparation and beverages categories, substantially offset by lower sales in the baby & kids category.

The decrease in organic net sales was primarily due to lower sales in the baby & kids category, partially offset by growth in the meal preparation category.

The decrease in the baby & kids category was primarily driven by industry-wide volume softness in purees in the U.K.

Adjusted EBITDA for the three months ended September 30, 2025 was $12.6 million, a decrease of $7.8 million, or 38.4%, from Adjusted EBITDA of $20.4 million in the prior year quarter.

The decrease was primarily driven by a decrease in gross profit associated with lower volume/mix and cost inflation, partially offset by productivity savings, pricing and trade efficiencies.

The increase in net sales was primarily due to higher sales in the meal preparation and beverages categories, partially offset by decline in baby & kids category.

The decrease in organic net sales was primarily due to lower sales in the baby & kids category which was primarily driven by industry-wide volume softness in purees in the U.K.

Adjusted EBITDA for the three months ended December 31, 2025 was $19.0 million, a decrease of $3.5 million, or 15.7%, from Adjusted EBITDA of $22.5 million in the prior year quarter.

The decrease was primarily driven by a decrease in gross profit associated with cost inflation, unfavorable fixed cost absorption and lower volume/mix, partially offset by productivity savings and pricing.

Adjusted EBITDA margin was 10.2%, a 220-basis point decrease from the prior year period.

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Refer to Note 18, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Comparison of Six Months Ended December 31, 2025 to Six Months Ended December 31, 2024

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the six months ended December 31, 2025 and 2024 (amounts in thousands, other than per share data and percentages, which may not add due to rounding):

Six Months Ended

December 31, 2025

December 31, 2024

Cost of sales

Selling, general and administrative expenses

Goodwill impairment

Intangibles and long-lived asset impairment

Productivity and transformation costs

Amortization of acquired intangible assets

Proceeds from insurance claim

Operating loss

Interest and other financing expense, net

Other (income) expense, net

Loss before income taxes and equity in net loss of equity-method investees

Provision for income taxes

Equity in net loss of equity-method investees

Adjusted EBITDA

Diluted net loss per common share

* Percentage is not meaningful due to one or more numbers being negative.

Net sales for the six months ended December 31, 2025 were $752.0 million, a decrease of $54.1 million, or 6.7%, including an unfavorable impact of $23.2 million, or 2.4%, related to held for sale businesses, discontinued brands and exited product categories and a favorable impact of $15.6 million, or 1.9%, from foreign exchange, as compared to the prior year period.

The decrease in net sales was due to a decline in the North America reportable segment, partially offset by an increase in the International reportable segment.

Organic net sales decreased $46.5 million, or 6.2%, from the prior year period.

The decrease in organic net sales was due to decline in both the North America and International reportable segments.

Additionally, the decrease in organic net sales was comprised of a 7.9% decrease in volume/mix, partially offset by a 1.7% increase in price.

Further details of changes in net sales by segment are provided below in the Segment Results section.

Gross profit for the six months ended December 31, 2025 was $142.5 million, a decrease of $32.5 million, or 18.6%, as compared to the prior year period.

Gross profit margin for the six months ended December 31, 2025 was 19.0% compared with 21.7% in the prior year period.

The decrease in gross profit was driven by both the North America and International reportable segments.

The decline in the North America reportable segment was due to lower sales volume, partially offset by favorable pricing and trade efficiencies.

The International reportable segment had a decrease in gross profit mainly due to cost inflation, partially offset by pricing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $126.4 million for the six months ended December 31, 2025, a decrease of $15.1 million, or 10.7%, from $141.5 million for the prior year period.

The decrease was primarily due to lower compensation-related expenses and non-employee-related cost discipline, as the Company continued implementing overhead reduction actions.

Goodwill Impairment

During the six months ended December 31, 2025, the Company recognized aggregate non-cash goodwill impairment charges of $119.9 million related to its U.S.

reporting units.

During the six months ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $91.3 million within the North America segment related to its U.S.

reporting unit.

See Note 9, Goodwill and Intangible Assets , and Note 14, Fair Value Measurements , in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Intangibles and Long-Lived Asset Impairment

During the six months ended December 31, 2025, the Company recorded a non-cash impairment charge of $11.9 million within its International segment related to the Hartley’s ® jelly indefinite-lived intangible asset.

During the six months ended December 31, 2024, the Company recorded a non-cash impairment charge of $15.7 million within its North America segment related to the indefinite and definite lived intangible assets associated with its personal care brands (namely, Avalon Organics ® , JASON ® , and Live Clean ® ) and $2.3 million related to an asset group primarily comprised of certain production assets in the North America reportable segment.

See Note 9, Goodwill and Intangible Assets , and Note 14, Fair Value Measurements , in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q

Productivity and Transformation Costs

Productivity and transformation costs were $13.5 million for the six months ended December 31, 2025, a decrease of $4.2 million, or 46.1%, from $9.2 million in the prior year period.

The decrease primarily reflected a reduction in restructuring costs incurred in connection with the Restructuring Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $2.4 million for the six months ended December 31, 2025, a decrease of $1.5 million, or 38.7%, from $3.9 million in the prior year period.

Proceeds from Insurance Claim

Proceeds from insurance claim was $25.9 million for the six months ended December 31, 2025 on account of a R&W insurance receivable related to a prior acquisition.

Operating Loss

Operating loss for the six months ended December 31, 2025 was $105.7 million compared to $88.8 million in the prior year period as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $31.2 million for the six months ended December 31, 2025, an increase of $4.6 million, or 17.4%, from $26.5 million in the prior year period.

The increase was primarily driven by a higher interest rate spread as well as increased amortization of deferred financing fees related to the amendment of our credit agreement.

See Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Other (Income) Expense, Net

Other income, net totaled $1.7 million for the six months ended December 31, 2025, compared to other expense, net of $1.3 million in the prior year period.

Other income, net for the six months ended December 31, 2025 was primarily comprised of a $1.1 million aggregate pretax gain on the sale of the intangible assets and certain property and equipment of the Yves Veggie Cuisine ® plant-based business in Canada.

Other expense, net for the six months ended December 31, 2024 was primarily comprised of pretax loss of $3.9 million on the sale of ParmCrisps ® , partially offset by a $1.6 million pretax gain on the sale of assets related to the Company’s former Bell, CA production facility and $0.8 million of foreign exchange gains.

Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees was $135.2 million for the six months ended December 31, 2025, compared to a $116.6 million loss in the prior year period.

The increase in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

Provision for Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes.

Our income tax expense was $1.1 million for the six months ended December 31, 2025 compared to income tax expense of $6.3 million in the prior year comparable period.

The effective income tax rate was an expense of 0.8% and 5.4% for the six months ended December 31, 2025 and 2024, respectively.

The income tax expense for the six months ended December 31, 2025 reflected foreign tax expense in certain jurisdictions, recognition of the R&W insurance receivable related to a prior acquisition, impairment of goodwill, and movement in the valuation allowance for both federal and state income taxes.

The effective income tax rate for the six months ended December 31, 2024 was impacted by tax expense in certain jurisdictions, the impairment of goodwill and personal care intangibles and movement in the valuation allowances for both federal and state income taxes.

Equity in Net Loss of Equity-Method Investees

Equity in net loss from our equity-method investments for the six months ended December 31, 2025 was a loss of $0.3 million compared to a loss of $0.7 million in the prior year period.

Net loss for the six months ended December 31, 2025 was $136.6 million, or $1.51 per diluted share, compared to $123.6 million, or $1.37 per diluted share, in the prior year period.

The increase in net loss was attributable to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA was $44.0 million and $60.3 million for the six months ended December 31, 2025 and 2024, respectively, as a result of the factors discussed above.

See Reconciliation of Non-U.S.

GAAP Financial Measures to U.S.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net loss to Adjusted EBITDA.

Segment Results

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the six months ended December 31, 2025 and 2024:

(Dollars in thousands)

International

Six months ended 12/31/25

Six months ended 12/31/24

Adjusted EBITDA

Six months ended 12/31/25

Six months ended 12/31/24

Adjusted EBITDA margin

Six months ended 12/31/25

Six months ended 12/31/24

See the Reconciliation of Non-U.S.

GAAP Financial Measures to U.S.

GAAP Measures following the discussion of our results of operations and Note 18, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for a reconciliation of segment Adjusted EBITDA.

North America

Our net sales in the North America reportable segment for the six months ended December 31, 2025 were $401.7 million, a decrease of $58.7 million, or 12.7%, including an unfavorable impact of $22.8 million, or 3.9%, related to held for sale businesses, discontinued brands and exited product categories, as compared to the prior year period.

Organic net sales decreased $35.8 million, or 8.8%, to $370.0 million from $405.7 million in the prior year period.

The decrease in net sales was due to lower sales in all categories except for the beverages category, which had higher net sales compared to the prior year period.

The decrease in organic net sales was primarily due to lower sales in the snacks and baby & kids categories, partially offset by growth in the beverages category.

The decrease in the snacks category was driven by distribution losses and velocity declines, while the baby & kids category net sales decline was primarily driven by volume softness in formula.

Adjusted EBITDA for the six months ended December 31, 2025 was $27.9 million, a decrease of $9.8 million, or 26.1%, from Adjusted EBITDA of $37.8 million in the prior year period.

The decrease was primarily driven by lower gross margins, partially offset by a reduction in SG&A.

The decrease in gross margin was driven by lower volume/mix, cost inflation and unfavorable fixed cost absorption, partially offset by productivity savings and pricing.

Adjusted EBITDA margin was 6.9%, a 130-basis point decrease from the prior year period.

International

Our net sales in the International reportable segment for the six months ended December 31, 2025 were $350.3 million, an increase of $4.6 million, or 1.3%, including a favorable impact of $15.7 million, or 4.5%, related to foreign exchange, as compared to the prior year period.

Organic net sales decreased $10.7 million, or 3.1%, to $332.9 million from $343.6 million in the prior year period.

The increase in net sales was primarily due to higher sales in the meal preparation and beverages categories, partially offset by decline in the baby & kids category.

The decrease in organic net sales was primarily due to lower sales in the baby & kids and snacks categories, partially offset by growth in the meal preparation category.

The decrease in the baby & kids category was primarily driven by industry-wide volume softness in purees in the U.K, while the decline in the snacks category was due to lower volumes.

Adjusted EBITDA for the six months ended December 31, 2025 was $31.6 million, a decrease of $11.3 million, or 26.4%, from Adjusted EBITDA of $42.9 million in the prior year period.

The decrease was primarily due to lower gross profit driven by cost inflation, unfavorable fixed cost absorption and lower volume/mix, partially offset by productivity savings and pricing.

Adjusted EBITDA margin was 9.0%, a 340-basis point decrease from the prior year period.

Corporate and Other

The decrease in Corporate and Other adjusted EBITDA primarily reflected a reduction in compensation-related expenses.

Refer to Note 18, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Liquidity and Capital Resources

We finance our operations and growth primarily with the cash flows we generate from our operations and from borrowings available to us under our Credit Agreement (as defined below).

We believe that our cash flows from operations and borrowing capacity under our Credit Agreement will be adequate to meet anticipated operating and other expenditures for the foreseeable future.

See Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

We believe that our cash flows from operations and borrowing capacity under our Credit Agreement will be adequate to meet anticipated operating and other expenditures.

See Note 2, Basis of Presentation and Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

As of December 31, 2025, we had $705,800 of debt obligations maturing on December 22, 2026, consisting of $454,000 of loans outstanding under the Revolver and $251,800 of Term Loans (each as defined in Note 10, Debt and Borrowings ).

As of December 31, 2025, we had cash of $68,017 and available liquidity of $143,651, subject to compliance with financial covenants, and the Company was in compliance with all associated covenants under its Credit Agreement (see Note 10, Debt and Borrowings ).

On January 2, 2026, the Company received $25,900 of proceeds from an insurance claim (see Note 18, Segment Information), which it used to repay loans outstanding under the Revolver, reducing the Company’s outstanding debt obligations.

See Note 2, Basis of Presentation , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

As discussed in Note 2, Basis of Presentation , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, we announced that our Board of Directors commenced a strategic review of the Company’s business and capital structure, in part to evaluate options to improve liquidity and reduce leverage.

As part of this review, on January 30, 2026, we entered into a definitive agreement to sell our North American Snacks Business for $115,000, the net proceeds of which will be used to repay a portion of the Term Loans.

The Company and the Board of Directors remain focused on completing the strategic review and taking decisive actions to strengthen the Company’s financial flexibility, improve performance and address the upcoming debt maturity under the Credit Agreement.

These actions include a continued review of the Company’s portfolio and the pursuit of further asset sales to refine the Company’s operating model with a focus on categories and platforms in key markets.

In addition, we are executing targeted inventory and other working capital optimization initiatives designed to improve the Company’s cash conversion and enhance liquidity.

We also continue to actively engage with our lenders, assess opportunities to refinance the Company’s debt or extend the maturity under the Credit Agreement, and evaluate potential capital raising or other strategic transactions.

We believe that the successful execution of these plans will enable us to refinance and/or retire the existing debt prior to its maturity or extend the maturity date under the Credit Agreement.

However, Accounting Standards Codification (“ASC”) 205-40, “Presentation of Financial Statements - Going Concern” requires that management not conclude that such an outcome is “probable” if, among other factors, the outcome is not within the control of the Company.

Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern for at least one year following the date of issuance of these financial statements due to the uncertainty regarding the Company’s ability to refinance or repay its debt due on December 22, 2026 because no such refinancing, retirement or extension has occurred prior to the issuance of the financial statements.

Our ability to continue as a going concern remains subject to successful execution of our strategic plan and securing additional financing, if needed.

If we are unable to execute our plans to generate sufficient liquidity, we may not have adequate resources to repay or refinance our debt, which would have a material adverse effect on our financial position and results of operations.

The consolidated financial statements have been prepared assuming that we will continue as a going concern, and no adjustments have been made to the financial statements to reflect the possibility of our inability to meet our debt obligations or continue as a going concern.

Amended and Restated Credit Agreement

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revolving credit facility reduced from $385.0 million to $330.0 million and the global revolving credit facility reduced from $315.0 million to $270.0 million.

Excluding the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2025 was 7.78%.

Excluding the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2025 was 8.26%.

The Company uses interest rate swaps to hedge a portion of the interest rate risk related to its outstanding variable rate debt.

As of September 30, 2025, the notional amount of the interest rate swaps was $400,000 with fixed rate payments of 7.12%.

Including the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2025 was 7.31%.

As of December 31, 2025, the notional amount of the interest rate swaps was $400,000 with fixed rate payments of 7.12%.

Including the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2025 was 7.71%.

Additionally, the Credit Agreement contains a commitment fee of 0.25% per annum on the amount unused under the Credit Agreement.

As of September 30, 2025, there were $464.0 million of loans outstanding under the Revolver, $253.7 million of outstanding Term Loans, and $2.7 million of letters of credit outstanding under the Credit Agreement.

As of September 30, 2025 and June 30, 2025, $133.3 million and $246.7 million, respectively, was available under the Credit Agreement, subject to compliance with the financial covenants.

As of September 30, 2025, the Company was in compliance with all associated covenants.

Cash and Cash Equivalents

Our cash and cash equivalents balance decreased by $6.5 million at September 30, 2025 to $47.9 million as compared to $54.4 million at June 30, 2025.

Our working capital was $246.2 million at September 30, 2025, a decrease of $6.7 million from $252.9 million at the end of fiscal 2025.

Additionally, our total debt increased by $11.4 million at September 30, 2025 to $716.2 million as compared to $704.8 million at June 30, 2025 as a result of an increase in net borrowings during the period.

Our cash and cash equivalents balance increased by $13.6 million at December 31, 2025 to $68.0 million as compared to $54.4 million at June 30, 2025.

Our working capital was negative $452.1 million at December 31, 2025, a decrease of $705.1 million from $252.9 million at the end of fiscal 2025.

The decrease is driven by the classification of $705.8 million of debt obligations, maturing on December 22, 2026, as current.

Additionally, our total debt balance, net of unamortized issuance costs, at December 31, 2025 has remained relatively flat as compared to June 30, 2025.

Our cash balances are held in the U.S., U.K., Canada, Western Europe, the Middle East and India.

As of September 30, 2025, substantially all cash was held outside the U.S.

As of December 31, 2025, substantially all cash was held outside of the U.S.

We maintain our cash and cash equivalents primarily in money market funds or their equivalent.

Accordingly, we do not believe that our investments have significant exposure to interest rate risk.

Cash (Used in) Provided by Operating, Investing and Financing Activities

Three Months Ended September 30,

Cash Provided by (Used in) Operating, Investing and Financing Activities

Six Months Ended December 31,

(Dollars in thousands)

Cash flows (used in) provided by:

Cash flows provided by (used in):

Operating activities

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Effect of exchange rate changes on cash

Net (decrease) increase in cash and cash equivalents

Cash used in operating activities was $8.5 million for the three months ended September 30, 2025, a decrease of $2.3 million from cash used in operating activities of $10.8 million in the prior year period.

This decrease in cash used in operating activities versus the prior year period resulted primarily from lower cash utilization of $5.0 million for our working capital accounts which was mainly due to focused inventory management, which generated year-over-year improvement of $13.9 million and resulted in an increased benefit from accounts payable and accrued expenses in the amount of $7.9 million, partially offset by a decrease in accounts receivable recovery of $11.8 million as well as an increase of $2.7 million in net loss adjusted for non-cash charges.

Cash used in investing activities was $5.2 million for the three months ended September 30, 2025, a change of $11.5 million from cash provided by investing activities of $6.3 million in the prior year period.

The net change was primarily due to the receipt of proceeds from the sale of ParmCrisps of $12.0 million in the prior year and lower capital expenditures in the three months ended September 30, 2025 due to phasing of capital projects.

See Note 5, Disposition , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Cash provided by financing activities was $9.0 million for the three months ended September 30, 2025, a change of $13.2 million compared to cash used in financing activities of $4.2 million in the prior year period.

The increase in cash used in financing activities was primarily due to higher net debt borrowings during the three months ended September 30, 2025.

Net increase in cash and cash equivalents

Cash provided by operating activities was $28.5 million for the six months ended December 31, 2025, an increase of $8.4 million from cash provided by operating activities of $20.1 million in the prior year period.

This increase in cash provided by operating activities versus the prior year period resulted primarily from a reduction of $8.4 million in net loss adjusted for non-cash charges in the six months ended December 31, 2025.

Working capital changes, versus the prior year period, resulted in slightly higher cash generation primarily due to focused inventory management, which generated year- over-year improvement of $28.0 million and an increased benefit from accounts payable and accrued expenses in the amount of $18.6 million, offset by a decrease in accounts receivable and other assets recovery of $18.1 million and $28.5 million, respectively.

The decrease in other assets primarily reflected the timing difference associated with the January 2026 collection of $25.9 million of insurance proceeds recognized in the first six months of fiscal 2026.

Cash used in investing activities was $10.4 million for the six months ended December 31, 2025, a change of $14.6 million from cash provided by investing activities of $4.2 million in the prior year period.

The change in cash used by investing activities was primarily due to decrease in proceeds from asset sales of $12.0 million, primarily related to the sale of ParmCrisps ® , and the receipt of a $2.6 million dividend from Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited, each of which were received in the prior year period.

Cash used in financing activities was $3.2 million for the six months ended December 31, 2025, a decrease of $13.8 million compared to $17.1 million in the prior year period.

The decrease in cash used in financing activities was primarily due to lower net borrowings during the six months ended December 31, 2025.

Free Cash Flow

Our free cash flow was negative $13.7 million for the three months ended September 30, 2025, an improvement of $2.8 million from negative free cash flow of $16.5 million in the three months ended September 30, 2024.

The period-over-period change resulted primarily from a decrease in cash flows used in operations of $2.3 million driven by the reasons explained above, and lower capital expenditures of $0.5 million.

Our free cash flow was $16.3 million for the six months ended December 31, 2025, an increase of $8.3 million from free cash flow of $8.0 million in the six months ended December 31, 2024.

The period-over-period change resulted primarily from an increase in cash flows from operations of $8.4 million driven by the reasons explained above, partially offset by slightly higher capital expenditures.

See Reconciliation of Non-U.S.

GAAP Financial Measures to U.S.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash used in operating activities to free cash flow.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash provided by operating activities to free cash flow.

Share Repurchase Program

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The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations.

During the three months ended September 30, 2025, the Company did not repurchase any shares under the repurchase program.

As of September 30, 2025, the Company had $173.5 million of remaining authorization under the share repurchase program.

During the six months ended December 31, 2025, the Company did not repurchase any shares under the repurchase program.

As of December 31, 2025, the Company had $173.5 million of remaining authorization under the share repurchase program.

Reconciliation of Non-U.S.

22 unchanged sentences

International

Net sales - Three months ended September 30, 2025

Net sales - Three months ended December 31, 2025

Impact of held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

Organic net sales - Three months ended September 30, 2025

Net sales - Three months ended September 30, 2024

Organic net sales - Three months ended December 31, 2025

Net sales - Three months ended December 31, 2024

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Organic net sales - Three months ended September 30, 2024

Net sales decline

Organic net sales - Three months ended December 31, 2024

Net sales (decline) growth

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

1 unchanged sentence

Organic net sales decline

Net sales - Six months ended December 31, 2025

Impact of held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

Organic net sales - Six months ended December 31, 2025

Net sales - Six months ended December 31, 2024

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Organic net sales - Six months ended December 31, 2024

Net sales (decline) growth

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

Organic net sales decline

Adjusted EBITDA

The Company defines Adjusted EBITDA as net loss before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses, certain litigation expenses, net, plant closure related costs, net, productivity and transformation costs, costs associated with acquisitions, divestitures and other transactions, (gain) loss on sale of assets, long-lived asset impairment and other adjustments.

The Company defines Adjusted EBITDA as net loss before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), proceeds from insurance claim, certain litigation expenses, net, plant closure related costs, net, productivity and transformation costs, costs associated with acquisitions, divestitures and other transactions, (gain) loss on sale of assets, impairment of goodwill, intangibles and long-lived assets and other adjustments.

The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition.

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GAAP to be recorded in our consolidated financial statements.

In addition, Adjusted EBITDA is subject to inherent limitations as this metric reflects the exercise of judgment by management about which expenses and income are excluded or included in determining Adjusted EBITDA.

In addition, Adjusted EBITDA is subject to inherent limitations as this metric reflects the exercise of judgment by management about which expenses and income are excluded or included in

determining Adjusted EBITDA.

In order to compensate for these limitations, management presents Adjusted EBITDA in connection with U.S.

1 unchanged sentence

A reconciliation of net loss to Adjusted EBITDA is as follows:

Three Months Ended September 30,

Three Months Ended December 31,

Six Months Ended December 31,

(Dollars in thousands)

2 unchanged sentences

Interest expense, net

(Benefit) provision for income taxes

Provision for income taxes

Stock-based compensation, net

Unrealized currency losses

Certain litigation expenses, net (a)

Unrealized currency losses (gains)

Proceeds from insurance claim (a)

Certain litigation expenses, net (b)

Restructuring activities

5 unchanged sentences

Impairment charges

Long-lived asset impairment

Goodwill impairment

Intangibles and long-lived asset impairment

Adjusted EBITDA

(a) Expenses and items relating to securities class action and baby food litigation and SEC investigation.

(a) Represents receivable under the Company’s R&W insurance related to one of our prior acquisitions, which was collected on January 2, 2026.

(b) Expenses and items relating to securities class action, baby food litigation and SEC investigation.

Free Cash Flow

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We do not consider Free Cash Flow in isolation or as an alternative to financial measures determined in accordance with U.S.

A reconciliation from cash flows (used in) provided by operating activities to Free Cash Flow is as follows:

Three Months Ended September 30,

A reconciliation from cash flows provided by operating activities to Free Cash Flow is as follows:

Six Months Ended December 31,

(Dollars in thousands)

Net cash used in operating activities

Net cash provided by operating activities

Purchases of property, plant and equipment

7 unchanged sentences

The application of each of these critical accounting policies and estimates is discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, from which there have been no material changes.

We are providing the below update regarding goodwill.

We are providing the below update regarding goodwill and indefinite-lived intangible assets.

In each quarter subsequent to our annual impairment assessment, we review events that occur or circumstances that change, including the macroeconomic environment, our business performance and our market capitalization, to determine if a quantitative impairment assessment is necessary.

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Impairments to goodwill and other intangible assets may be caused by factors outside our control, such as increasing competitive pricing pressures, changes in discount rates based on changes in cost of capital (i.e., as a result of changes in interest rates or other conditions), lower than expected sales and profit growth rates, changes in industry EBITDA multiples, the inability to quickly replace lost co-manufacturing business, or the bankruptcy of a significant customer, among others.

As of September 30, 2025, goodwill associated with the U.S.

reporting units had a carrying value of $312,321 and $114,021, respectively.

As of December 31, 2025, the Company performed an assessment of factors to determine whether it was more likely than not that the fair value of each reporting unit within both of the North America and International reportable segments was less than its respective carrying amount, including goodwill.

As a result of a continued decline in the projected performance and cash flows of the U.S.

reporting unit, and in connection with the pending agreement to sell its North American Snacks Business, the Company completed an interim quantitative impairment test of goodwill.

As a result of the recognition of an intangible asset impairment charge within the United Kingdom (“U.K.”) reporting unit in the International reportable segment and a continued decline in the projected performance and cash flows of the U.K.

reporting unit, the Company also completed an interim quantitative impairment test of goodwill.

For the Western Europe and Ella’s Kitchen UK reporting units, the Company performed a qualitative evaluation to assess factors to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount, including goodwill.

The Company concluded that the qualitatively tested reporting units’ estimated fair values exceeded their carrying amounts.

In performing the quantitative tests for the U.S.

and U.K., the fair values were estimated using the Discounted Cash Flow (“DCF”) method income approach as such method was determined to be more representative of future performance from a market participant point of view.

As of December 31, 2025, the U.S.

reporting unit’s carrying amount exceeded its estimated fair value of $459,000, resulting in the recognition of a non-cash impairment charge of $38,495 to reduce the carrying value of the U.S.

reporting unit goodwill to $273,826.

As of December 31, 2025, the U.K.

reporting unit’s carrying amount exceeded its estimated fair value of $270,525, resulting in the recognition of a non-cash impairment charge of $81,413 to reduce the carrying value of the U.K.

reporting unit goodwill to $32,331.

reporting unit’s impairment charge reflected the sales volume decline that the Company continued to experience.

The discount rate in both quantitative tests also reflected an increase in the small stock premium related to a decline in the Company’s market capitalization.

The goodwill related to the U.S.

reporting units are at risk of potential impairment if the fair value of these reporting units, and their associated assets, decrease in value due to the amount and timing of expected future cash flows, decreased customer demand for products, an inability to execute management’s business strategies, or general market conditions, such as economic downturns, and changes in interest rates, including discount rates.

reporting units remains at risk of potential impairment if the fair value of these reporting units, and their associated assets, decrease in value due to the amount and timing of expected future cash flows, decreased customer demand for products, an inability to execute management’s business strategies, or general market conditions, such as economic downturns, and changes in interest rates, including discount rates.

Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company’s estimates.

If the Company’s ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record additional impairment charges in future periods.

If the Company’s ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the

terminal growth rate or the weighted-average cost of capital, the Company may have to record additional impairment charges in future periods.

We monitor our reporting units at risk of impairment for interim impairment indicators.

As of September 30, 2025, we considered our market capitalization and our net book value and performed a market capitalization reconciliation with the expectation that the market capitalization should reconcile within a reasonable range to the sum of the fair values of the Company's individual reporting units.

As of December 31, 2025, we considered our market capitalization and our net book value and performed a market capitalization reconciliation with the expectation that the market capitalization should reconcile within a reasonable range to the sum of the fair values of the Company's individual reporting units.

Upon performing the market capitalization reconciliation, we noted a reasonable reconciliation between the sum of the reporting unit fair values and the Company’s market capitalization once adjusted for the impact of corporate costs not allocated to the reporting units.

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Indefinite-Lived Intangible Assets

The Sensible Portions ® and Spectrum ® intangible assets are part of the North America reportable segment and have a remaining aggregate carrying value of $8,000 and $11,800, respectively, as of September 30, 2025.

The Spectrum ® and Sensible Portions ® tradenames remain at risk of impairment in future periods in the event of unfavorable changes in assumptions, including forecasted future cashflows based on execution of strategic initiatives for increasing revenue, as well as discount rates and other macroeconomic factors.

The Company performs an indefinite-lived asset impairment test annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

In accordance with ASC 350, we may first perform a qualitative assessment to determine whether it is necessary to perform a quantitative impairment test.

If an entity elects to perform a qualitative assessment, it first shall assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired.

One procedure we perform during interim periods to determine whether indicators of impairment are present includes a comparison of net sales used in the most recent quantitative impairment tests to forecasted net sales for the same fiscal year (or balance of the fiscal year when performing an interim review) in order to identify brands for which the current fiscal year net sales are expected to be lower than the forecasted fiscal year net sales per the latest quantitative test.

The performance of these brands is then reviewed by management to determine if the shortfall to forecasted net sales was related to events and circumstances that are expected to be temporary in nature, or if it were caused by more pervasive issue that could serve as in impairment indicator (e.g., loss of key customers, discontinuance of certain product categories within a brand, etc.).

We use this risk-based approach to determine which brands we would quantitatively test for impairment, whether as part of fiscal year annual impairment testing or an interim period test.

During the second quarter of 2026, we qualitatively assessed our indefinite-lived intangible assets for impairment and determined that the Ella’s Kitchen ® baby and kids foods and Hartley’s ® jelly indefinite-lived tradenames should be quantitatively tested.

The Company’s fiscal year 2026 interim impairment testing resulted in the recognition of impairment charges for the Hartley’s ® jelly indefinite-lived tradename.

During the three months ended December 31, 2025, as a result of a continued decline in net sales driven by industry-wide volume softness for purees within the U.K., the Company conducted an interim quantitative impairment test for its Ella’s Kitchen ® baby and kids foods indefinite-lived tradename.

The Company concluded that the indefinite-lived intangible asset estimated fair value exceeded its carrying amount by 12.8%.

The intangible asset is part of the International reportable segment and had a carrying value of $35,801 as of December 31, 2025.

During the three months ended December 31, 2025, as a result of continued decline in net sales, the Company conducted an interim quantitative impairment test for the Hartley’s ® jelly indefinite-lived tradename.

The Company concluded that the indefinite-lived tradename carrying amount exceeded its estimated fair value.

During the three months ended December 31, 2025, the Company recorded a non-cash impairment charge of $11,917 which was recorded within intangibles and long-lived asset impairment on the consolidated statement of operations.

The Hartley’s ® jelly indefinite-lived intangible asset is part of the International reportable segment and had a remaining carrying value of $37,685 as of December 31, 2025.

The Ella’s Kitchen ® baby and kids foods, Hartley’s ® jelly, Sensible Portions ® , and Spectrum ® indefinite-lived tradenames remain at risk of impairment in future periods in the event of unfavorable changes in assumptions, including forecasted future cash flows based on execution of strategic initiatives for increasing revenue, as well as discount rates and other macroeconomic factors.

The Sensible Portions ® and Spectrum ® intangible assets, which were quantitatively tested in the prior year, are part of the North America reportable segment and have remaining carrying value of $8,000 and $11,800, respectively, as of December 31, 2025.

Recent Accounting Pronouncements

Refer to Note 2, Basis of Presentation , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Certain of our product lines have seasonal fluctuations in demand.

Certain of our product lines have seasonal fluctuations.

Hot tea and soup sales are stronger in colder months, while sales of snack foods are stronger in the warmer months.

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Quantitative and Qua litative Disclosures About Market Risk

There have been no significant changes in market risk from those addressed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, during the three months ended September 30, 2025.

See the information set forth in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025

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Evaluation of Disclosure Controls and Procedures

Our Interim Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Based on this evaluation, our CEO and CFO have concluded that, as of September 30, 2025, the Company’s disclosure controls and procedures were not effective due to the material weakness identified and described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Based on this evaluation, our CEO and CFO have concluded that, as of December 31, 2025, the Company’s disclosure controls and procedures were not effective due to the material weakness related to our controls to review goodwill and indefinite-lived intangible asset quantitative impairment tests that were performed throughout the prior fiscal year, identified and described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Notwithstanding the material weakness, and based on the additional analyses and other procedures to ensure that our consolidated financial statements were prepared in accordance with U.S.

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The material weaknesses will be considered remediated when the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

We anticipate that the remediation will occur by the end

of fiscal 2026.

We anticipate that the remediation will occur by the end of fiscal 2026.

We continue to monitor the design and operation of these remedial measures through the date of this report.

Changes in Internal Control Over Financial Reporting

Other than the actions taken under “Remediation Plan for Material Weaknesses in Internal Control over Financial Reporting” discussed above, there were no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than the actions taken under “Remediation Plan for Material Weaknesses in Internal Control over Financial Reporting” discussed above, there were no changes in our internal controls over financial reporting that occurred during the three months ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis