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Additional risks and uncertainties not presently known to us or risks we view as not rising to the level of being material, could also potentially impair our business, results of operations and financial condition.
−Removed: Investors should consider the following factors, in addition to the other information contained in this Annual Report on Form 10-K, including Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” before deciding to purchase our Common Stock.
+Added: Investors should consider the following factors, in addition to the other information contained in this Report, including Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” before deciding to purchase our Common Stock.
Industry Risks
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The availability and cost of raw materials for producing our products are subject to crop size and yield fluctuations caused by factors beyond our control.
−Removed: These materials include peanuts, pecans, almonds, cashews, walnuts, pine nuts and other nuts, rolled oats, dried fruits and seeds, cocoa, as well as vegetable oils and other products used in the manufacture of our products.
−Removed: The factors beyond our control include adverse weather conditions, natural disasters (including floods, droughts, frosts, earthquakes and hurricanes), changing climate patterns, plant diseases, foreign currency fluctuations, trade agreements, tariffs and embargos, import/export controls, prices of other crops, labor shortages, inflationary conditions, political change and unrest, sanctions, boycotts, revised sourcing regulations, armed hostilities, such as those in Ukraine and in the Middle East, changes in global customer demand, pandemics and disease, changes in government agricultural programs, government support of any agricultural products, federal and state government mandates related to the preceding or otherwise and purchasing behavior of certain countries, including China and India.
+Added: These materials include peanuts, pecans, almonds, cashews, walnuts, pine nuts and other nuts, rolled oats, dried fruits and seeds, cocoa, protein, as well as vegetable oils and other products used in the manufacture of our products.
+Added: The factors beyond our control include adverse weather conditions, natural disasters (including floods, torrential rain, hail, mudslides, tornados, droughts, frosts, earthquakes and hurricanes), changing climate patterns, agricultural diseases and pests, foreign currency fluctuations, trade agreements, tariffs and embargos, import/export controls, prices of other crops, labor shortages, inflationary conditions, political change and unrest, sanctions, boycotts, revised sourcing regulations, armed hostilities, such as those in Ukraine and in the Middle East, changes in fuel prices, changes in global customer demand, pandemics and disease, changes in government agricultural programs, government support of any agricultural products, federal and state government mandates related to the preceding or otherwise and purchasing behavior of certain countries, including China and India.
Additionally, any determination by the USDA or other government agencies may also reduce the supply of edible nuts and other raw materials used in our products and could (among other things) cause our costs to increase significantly.
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In addition, even if we are successful in passing across partial or full price increases, we may not be able to do so in a timely fashion.
−Removed: Our ability to raise prices and the timing of any price increases is often dependent upon the actions of our competitors, some of whom are significantly larger and more diversified than we are or own farms which produce the raw materials.
+Added: Our ability to raise prices and the timing of any price increases is often dependent upon the actions of our competitors, some of whom are significantly larger and more diversified than we are or own farms which produce the raw materials subject to such price increases.
+Added: Determining the alignment of commodity costs with customer pricing also requires significant coordination throughout our entire operations and we may not be able to successfully manage such coordination in the future to align commodity costs with customer prices.
We have observed rapid inflation with respect to packaging and other products used to manufacture and package our products and general inflationary conditions that are difficult to predict, and we may not be able to pass along such inflationary increases to our customers or may not be able to do so in a timely fashion.
−Removed: We have also observed tariffs and the threat of tariffs causing increased or uncertain prices and uncertainty in the markets in which we operate, including for the purchase of certain equipment for the manufacture of products.
+Added: We have also observed tariffs and the threat of tariffs causing increased or uncertain changes in prices and uncertainty in the markets in which we operate, including for the purchase of certain equipment for the manufacture of products.
Additionally, any such product price increase that we are able to pass along to our customers may ultimately reduce the demand for, and sales of, our products as customers reduce purchases, buy lower priced products or lower margin products.
−Removed: Alternatively, if the prices of any raw materials significantly decrease, and we have inventories of such materials on hand, we may be unable to reduce product prices without adversely impacting our gross margins or our customers will not pass along price decreases, which could impact overall demand.
+Added: Alternatively, if the prices of any raw materials significantly decrease, and we have inventories of such materials on hand, we may be unable to reduce product prices without adversely impacting our gross margins or our customers will not pass along price decreases, which could impact overall demand for such products.
Any competitors who purchase such material on the open market or own the farms which produce the raw materials may be able to reduce prices in a more timely manner, and we could lose market share to such competitors.
We are also subject to risks associated with purchasing a majority of our pecans, peanuts and walnuts directly from growers, including the risk of purchasing such products from growers at costs that later, due to altered market conditions, prove to be above prevailing market prices at time of sale.
−Removed: Accordingly, because we purchase a majority of our pecans, peanuts and walnuts directly from growers during harvest season and shell and process these nuts throughout our fiscal year, there is a possibility that, after we acquire these nuts, market conditions may change.
+Added: Accordingly, because we purchase a majority of our pecans, peanuts and walnuts directly from growers during harvest season and shell and process these nuts throughout our fiscal year, there is a possibility that, after we acquire these nuts, market conditions may adversely change.
Depending on these changing market conditions, we may be forced to sell these nuts at reduced prices relative to our acquisition cost.
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Moreover, fluctuations in the market prices of nuts may affect the value of our inventories, margins and profitability.
−Removed: We enter into fixed price commitments with a portion of our commercial ingredient customers and certain other customers.
+Added: We enter into fixed price commitments with a portion of our commercial ingredient customers.
The commitments are for a fixed period of time, typically three months to twelve months.
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(Planters brand), Diamond Brand, General Mills (Nature Valley brand), PepsiCo, Inc.
−Removed: (Quaker brand), Mondelez (CLIF brand), Kellanova (Nutrigrain brand), Mars (KIND brand), among others.
+Added: (Quaker brand), Mondelez (CLIF brand), Kellanova (Nutrigrain brand), Mars (KIND brand), and others.
Most of our competitors that sell and market the other top branded snack nut products and bars have committed more financial, marketing and other resources to such brands when compared to the resources available to or spent by us on our brands.
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Additionally, certain food retailers and internet retailers may seek to invest in companies serving certain niche markets and/or offer shelf space, added promotional activity or other marketing efforts in exchange for ownership in such companies, which we are unable to offer to such food retailers or internet companies.
−Removed: Recent consolidation and mergers and acquisitions activity in the nut and snack food market has resulted in price competition as part of such consolidation or mergers and acquisitions activity.
+Added: Recent consolidation and mergers and acquisitions activity in the nut and snack food industry has intensified competitive pricing pressures across the market.
Many of our competitors buy their nuts on the open market and are thus not exposed to the risks of purchasing inshell pecans, peanuts, walnuts and other nut types directly from growers at fixed prices that later, due to altered market conditions, may prove to be above prevailing market prices.
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Consumer preferences can quickly change based on a number of factors beyond our control.
−Removed: These preferences may include, but are not limited to, preference for branded or private brand products, options to purchase such products and the format, and various quantity or volume sizes of such products.
+Added: These preferences may include, but are not limited to, preference for branded or private brand products, the retail cost for such products, options to purchase such products and the format, various quantity or volume sizes of such products, and dietary trends and perceived nutritional or health aspects of our products.
If we fail to anticipate, identify or react quickly to these changes and are unable to develop and market new and improved products or otherwise offer products that meet consumer preferences, demand for our products could suffer.
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If we are unable to provide customers with our products outside traditional retail supermarkets, supercenters and club stores, demand for our products could suffer and/or we will be unable to grow our business.
−Removed: Customers may also use phone-based applications to determine perceived health factors of our products, which we have little to no control over.
+Added: Customers may also use phone-based applications to determine the perceived health factors of our products, which we have little to no control over.
+Added: As GLP-1 drugs and other drugs which partially reduce food consumption increase in popularity, it may negatively impact the demand for snacking and in turn the demand for our products.
Reduction in demand as a result of changing consumer preferences or inability to provide consumers with products they demand, or in the manner they demand, could materially and adversely affect our financial condition and results of operations.
We are Subject to Customer Pricing Pressures and Retail Consolidation Trends Which Could Materially and Adversely Affect Our Financial Condition and Results of Operations
−Removed: As the retail grocery trade continues to consolidate and our retail customers grow larger, become more sophisticated, use data and artificial intelligence (AI) for purchasing decisions and obtain more purchasing power, our retail customers are demanding lower pricing, especially private brand customers, and increased free or discounted promotional programs.
+Added: As the retail grocery trade continues to consolidate and our retail customers grow larger, become more sophisticated, use data and artificial intelligence (AI) for purchasing and marketing decisions and obtain more purchasing power, our retail customers are demanding lower pricing, especially private brand customers, and increased free or discounted promotional programs.
Further, these retail customers may begin to place a greater emphasis on the lowest-cost supplier in making purchasing decisions, especially during periods of increased or variable raw material acquisition costs or rapid inflation.
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If consumers in our principal markets lose confidence in the health or safety of nut and bar products, particularly with respect to peanut and tree nut allergies, food borne illnesses, processes, ingredients and packaging used in the manufacturing process or other food safety matters, this could materially and adversely affect our financial condition and results of operations.
−Removed: Individuals with nut allergies may be at risk of serious illness or death resulting from the consumption of our nut and bar products, including consumption of the products of our customers which in turn contain our products as an ingredient.
+Added: Individuals with certain food allergies may be at risk of serious illness or death resulting from the consumption of our nut and bar products, including consumption of the products of our customers which in turn contain our products as an ingredient.
Notwithstanding our existing food safety controls, we process peanuts and tree nuts on the same equipment, and there is no guarantee that our other products will not be cross-contaminated.
Concerns generated by risks of peanut and tree nut cross-contamination and other food safety matters, including food borne illnesses, may discourage consumers or our customers from buying our products, cause production and delivery disruptions or result in product recalls.
−Removed: Product safety issues concerning the products we manufacture, distribute and sell, and also concerning similar products not manufactured, distributed or sold by us, may materially and adversely affect demand for products in the nut industry as a whole, including products without actual safety problems.
+Added: Product safety issues concerning the products we manufacture, distribute and sell, and also concerning similar products not manufactured, distributed or sold by us, may materially and adversely affect demand for products in the nut and bar industry as a whole, including products without actual safety problems.
Decreases in demand for products in the industry generally could have a material adverse effect on our financial condition and results of operations.
In addition, the cooling system at our Elgin, Illinois facility utilizes ammonia.
−Removed: If a leak in the system were to occur, there is a possibility that the inventory in cold storage at our Elgin, Illinois facility could be destroyed which could have a material adverse effect on our financial condition and results of operations.
+Added: If a leak in the system were to occur, there is a possibility that the inventory in
+Added: cold storage at our Elgin, Illinois facility could be destroyed which could have a material adverse effect on our financial condition and results of operations.
Product Liability, Product Recalls, Product Labeling and Product Advertising Claims May Have a Material Adverse Effect on Our Results of Operations and Cash Flows
We face risks associated with product liability claims, product recalls and other liabilities in the event:
−Removed: (i) our food safety and quality control procedures are ineffective or fail, (ii) we procure products or packaging from third parties that are or become subject to a recall, regardless of whether or not our food safety and quality control procedures are ineffective or fail, (iii) our products or packaging cause injury or become adulterated or misbranded, (iv) our products are determined to be promoted or labeled in a misleading fashion or do not contain required labeling or notices, (v) government authorities test our products and determine that they contain a contaminant or present a food safety risk, (vi) our products are tampered with, (vii) one of our competitors is subject to claims, recalls or other liabilities involving products similar to ours or (viii) federal, state or other government agencies or courts determine that our products could pose health risks or contain potentially harmful chemicals, ingredients or other substances.
+Added: (i) our food safety and quality control procedures are ineffective or fail, (ii) we procure products, ingredients or packaging from third parties that are or become subject to a recall, regardless of whether or not our food safety and quality control procedures are ineffective or fail, (iii) our products or packaging cause injury or become adulterated or misbranded, (iv) our products are determined to be promoted or labeled in a misleading fashion or do not contain required labeling or notices, (v) government authorities test our products and determine that they contain a contaminant or present a food safety risk, (vi) our products are tampered with, or altered by our employees or third parties, (vii) one of our competitors is subject to claims, recalls or other liabilities involving products similar to ours or (viii) federal, state or other government agencies or courts determine that our products could pose health risks or contain potentially harmful chemicals, ingredients or other substances.
In recent years, the food industry has been a target of litigation over product labeling and advertising, including nut and bar products.
+Added: In addition, the snack food industry has recently been the target of consumer claims regarding ultra-processed foods and the purported negative health impacts of such ultra-processed foods.
Such litigation may result in significant costs to defend and resolve.
In addition, we do not control the labeling of the products of our customers that contain our products as an ingredient.
−Removed: A product recall of a sufficient quantity or significant adverse publicity, a significant product liability judgment against us, a significant advertising-related liability or other safety concerns (whether actual or claimed) could impact our products in a number of ways.
+Added: A product recall of a sufficient quantity or significant adverse publicity, a significant product liability judgment against us, a significant product liability judgment against a supplier which we could not recover for, a significant advertising-related liability or other safety concerns (whether actual or claimed) could impact our products in a number of ways.
These impacts could include unavailability of our product for a period of time, re-labeling or re-packaging products, loss of consumer confidence in our products and exposure to liabilities in excess of any insurance we maintain for such events, including to our private brand customers.
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Our results are dependent on controlling a variety of costs, including multiple costs related to the manufacture and production of our products.
−Removed: In the past we have experienced variability in transportation costs due to additional demand in shipping by a variety of market participants, a general shortage of drivers due to health and safety concerns, and increased fuel costs and federal regulations, which require increased monitoring of driving time using electronic monitoring technology.
+Added: In the past we have experienced variability in transportation costs due to additional demand in shipping by a variety of market participants, a general shortage of drivers due to health and safety concerns, increased fuel costs due to geopolitical issues and the impact of federal regulations, which require increased monitoring of driving time using electronic monitoring technology.
In addition to transportation costs, we have experienced (and may continue to experience) increased commodity or raw material costs, increased packaging material prices, higher general water, energy and fuel costs, increased labor costs as well as increased insurance costs, such as for property and workers’ compensation insurance.
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We depend on information technology to maintain and streamline our operations, including, among other things, (i) interfacing and communicating with our locations, customers and suppliers, (ii) complying with financial reporting, legal and tax regulatory requirements, (iii) maintaining logistics, inventory control and monitoring systems, (iv) providing us with real-time feedback about our business and our industry and (v) allowing continuity of operations.
−Removed: Like other companies, our information technology systems or information technology systems of our customers, vendors, counterparties and other third party providers may be vulnerable to a variety of interruptions due to events beyond our control, including natural disasters, terrorist attacks, government-sponsored or affiliated cyberattacks, telecommunications failures, outages during replacement or upgrades, computer viruses, phishing activity, hardware failures, cloud-based technology outages, power outages, hackers, social engineering attacks, loss or theft of hardware, ransomware attacks, cyber risks and other security issues.
−Removed: We have technology security initiatives, cyber insurance and disaster recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequate, particularly as the global dependence on technology grows, the sophistication of cyber threats increase.
−Removed: Moreover, if we are unable to prevent security breaches or disclosure of non-public information, we may suffer financial damage, in addition to litigation or remediation costs or penalties because of the unauthorized disclosure of confidential information belonging to us or to our customers, consumers, or suppliers.
+Added: Like other companies, our information technology systems or information technology systems of our customers, vendors, counterparties and other third party providers may be vulnerable to a variety of interruptions or losses due to events beyond our control, including natural disasters, terrorist attacks, government-sponsored or affiliated cyberattacks, telecommunications failures, outages during replacement or upgrades, computer viruses, phishing, vishing or smishing activities, hardware failures, cloud-based technology outages, power outages, hackers, social engineering attacks, loss or theft of hardware, ransomware attacks, cyber risks and other security issues.
+Added: We have technology security initiatives, cyber insurance and disaster recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequate, particularly as the global dependence on technology grows, the reliance on AI systems increases and the sophistication of cyber threats increases.
+Added: Moreover, if we are unable to prevent security breaches or disclosure of non-public information, we may suffer financial and
+Added: reputational damage, in addition to litigation or remediation costs or penalties because of the unauthorized disclosure of confidential information belonging to us or to our customers, consumers, or suppliers.
If we were subject to a ransomware attack, we may be required to pay ransom in amounts that could be material to our financial condition.
In addition, we have outsourced several information technology support services and administrative functions to third-party service providers.
−Removed: We may outsource other functions in the future to achieve cost savings and efficiencies, and use AI in our operations to achieve efficiencies.
+Added: We may outsource other functions in the future to achieve cost savings and efficiencies, and use AI in our operations.
If the service providers to which we outsource these functions or our AI providers do not perform effectively, we may not be able to achieve the expected cost savings and may have to incur additional costs to correct errors or mitigate the problematic actions made by such service providers or AI providers.
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Increases in Labor Costs or Work Stoppages, Strikes or Other Labor Events Could Materially and Adversely Affect Our Financial Condition and Results of Operations
−Removed: As the number of our employees has grown, personnel costs, including the costs of medical and other employee health and welfare benefits, have increased.
+Added: Personnel costs, including medical and other employee health and welfare benefits, have increased due to inflationary pressures, rising healthcare costs, and competitive labor market conditions.
These costs can vary substantially as a result of an increase in the number, mix and experience of our employees and changes in health care and other employment-related laws.
There are no assurances that we will succeed in reducing future increases in such costs, particularly if government regulations require us to change our health and welfare benefits, government regulations impose additional benefits or monitoring and compliance expenses, or we need to attract and retain additional qualified personnel or provide extra compensation due to other reasons.
−Removed: Increases in personnel costs can also be amplified by low unemployment rates, unavailability of potential workers, increased inflation, our preferences among workers in the labor market and general tight labor market conditions in any of the areas where we operate.
+Added: Increases in personnel costs can also be amplified by low unemployment rates, unavailability of potential workers, including as a result of government actions, increased inflation, our preferences among workers in the labor market and general tight labor market conditions in any of the areas where we operate.
Increases in labor costs at any of our suppliers, transportation providers, third parties that we do business with or third parties within our supply chain may also adversely impact the cost of our raw materials and other inputs and thus increase the cost of our products.
Our inability to control such costs could materially and adversely affect our financial condition and results of operations.
−Removed: Although we consider our labor relations to be good, if a significant number of our employees engaged in a work slowdown or stoppage, strike, boycott, or other type of labor unrest, it could impair our ability to source, manufacture and supply our products to customers.
+Added: Although we believe our employee relations are positive, if a significant number of our employees engaged in a work slowdown or stoppage, strike, boycott, intentional destruction of our equipment or products or other type of labor unrest, it could impair our ability to source, manufacture and supply our products to customers.
In addition, if there is a work slowdown or stoppage, strike, boycott or similar labor unrest event at a customer, supplier, transportation provider, road, port or dock, third party within our supply chain or government agency, it could similarly impact our ability to obtain raw materials, manufacture, ship, supply, or to otherwise provide our products to our customers.
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and internationally.
−Removed: These changing climate patterns have caused weather patterns to change, and we have experienced severe droughts, floods, frosts, hurricanes, tornadoes, cold and warmer temperatures, adverse air conditions and other previously abnormal natural events.
+Added: These changing climate patterns have caused weather patterns to change, and we have experienced severe droughts, fires, torrential rain, mudslides, hail, floods, frosts, hurricanes, tornadoes, cold and warmer temperatures, adverse air conditions and other previously abnormal natural events.
These weather events could impact the ability of our growers and producers to consistently provide us with the quality and quantity of nut and nut related products or other raw materials that we require and, in turn, cause the prices of certain nuts and raw materials to increase or change in unpredictable ways.
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The value of our Company and our branded products is largely based on the degree to which consumers and customers react and respond positively to our operations and our brands.
−Removed: Positive views of our Company and our brand value could diminish significantly due to a number of factors, including (i) consumer or customer perception that we have acted in an irresponsible or reckless manner, (ii) negative perception about the actions or values of our Company, our management or large stockholders, (iii) adverse publicity about our products and Company operations (whether actual or fictitious), (iv) product recalls or failure to maintain the quality of our products, (v) the failure of our products to deliver consistently positive consumer experiences, (vi) concerns about food safety, allergies, or the availability of our products, (vii) concerns about the sustainability of our operations and products, or (viii) the actual impact or perceptions about the impact that our
−Removed: operations or products have on the environment.
+Added: Positive views of our Company and our brand value could diminish significantly due to a number of factors, including (i) consumer or
+Added: customer perception that we have acted in an irresponsible or reckless manner, (ii) negative perception about the actions or values of our Company, our management or large stockholders, (iii) adverse publicity about our products and Company operations (whether actual or fictitious), (iv) product recalls or failure to maintain the quality of our products, (v) the failure of our products to deliver consistently positive consumer experiences, (vi) concerns about food safety, allergies, or the availability of our products, (vii) concerns about the sustainability of our operations and products, or (viii) the actual impact or perceptions about the impact that our operations or products have on the environment.
Customer, vendor, stockholder and government views on our sustainability and environmental practices and values can change quickly due to events beyond our control and we may not be able to effectively change or communicate our practices and values to avoid negative perceptions.
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We are dependent on a few significant customers for a large portion of our total net sales, particularly in the consumer channel.
−Removed: Sales to our five largest customers represented approximately 67%, 66% and 64% of net sales in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
+Added: Sales to our five largest customers represented approximately 67% of net sales in fiscal 2026 and fiscal 2025 and 66% of net sales in fiscal 2024, respectively.
As discussed in “Item 1- Business”, sales to Walmart and Target represented a majority of such sales to our five largest customers.
−Removed: There can be no assurance that all significant customers will continue to purchase our branded or private brand products in the same quantities, same product mix or on the same terms as in the past, particularly as increasingly powerful retailers demand lower pricing, different packaging, larger marketing support or payments for retail space, establish private brands or request other terms of sale which negatively impact our profitability or sales.
+Added: There can be no assurance that all significant customers will continue to purchase our branded or private brand products in the same quantities, same product mix or on the same terms as in the past, particularly as increasingly powerful retailers demand supplier diversification, lower pricing, different packaging, larger marketing support or payments for retail space, establish private brands or request other terms of sale which negatively impact our profitability or sales.
+Added: We have recently made equipment purchases to, among other things, better serve our most significant customers.
+Added: If our significant customers do not purchase our products for any reason, we will be required to find new customers to realize a return on our equipment purchases.
Many of our largest customers emphasize sales at physical locations and a significant shift to Internet sales may impact the amount and types of products they purchase from us.
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Our products are shelled, manufactured or otherwise processed at our various production facilities.
−Removed: However, certain nut and nut-related products, including the shelling of peanuts, walnuts and pecans and processing and packaging of certain other products, such as our bars, are conducted only at a single location.
+Added: However, certain nut and nut-related products, including the shelling of peanuts, walnuts and pecans and processing and packaging of certain other products, such as certain types of our bars, are conducted only at a single location.
If any of these production facilities experience a disruption for any reason, including a work stoppage, power failure, fire, pandemic, terrorism, cyberattack, labor event or weather or climate related condition or natural disaster, this could result in a significant reduction or elimination of the availability of some of our products.
In addition, a dispute with, or disruption at, a significant third-party supplier, service provider, distributor or customer may impact our ability to produce, package, market, transport and sell our products.
−Removed: If we were not able to obtain alternate production, shelling or processing capability in a timely manner or on satisfactory terms, this could have a material adverse effect on our financial condition and results of operations.
+Added: If we were not able to obtain alternate production, manufacture, packaging, shelling or processing capability in a timely manner or on satisfactory terms, this could have a material adverse effect on our financial condition and results of operations.
Inability to Identify, Manage and Integrate Acquisitions and Joint Ventures Could Materially and Adversely Affect Our Financial Condition and Results of Operations
−Removed: As part of our strategy, we have and intend to make capability related acquisitions and investments in and enter into strategic relationships with established products and growth-stage companies to take advantage of our manufacturing and supply chain expertise and diversify our product line, such as our acquisition of the Lakeville facility in the 2024 fiscal year.
−Removed: However, we may be unsuccessful in managing or integrating completed acquisitions, joint ventures, or investments, identifying additional acquisitions or joint ventures, or negotiating favorable financial or other terms with third parties which are attractive or advantageous to grow or otherwise supplement our existing business.
−Removed: In addition, the identification, negotiation and completion of any acquisition, joint venture, or investment may divert management’s attention from ordinary business matters, require a number of one-time or ongoing advisory costs, result in the loss of employees or customers of our business or the acquired business, involve the assumption of unknown and potentially significant liabilities or result in impairment charges or write-downs if the assumptions underlying the purchase are not satisfied or operating performance suffers.
+Added: As part of our strategy, we have and intend to make capability-related acquisitions (of companies or assets) and investments in and enter into strategic relationships with established products and growth-stage companies to take advantage of our manufacturing and supply chain expertise and diversify our product line.
+Added: However, we may be unsuccessful in managing or integrating completed acquisitions, joint ventures, and other strategic relationships or investments, identifying additional acquisitions, joint ventures or other strategic relationships, or negotiating favorable financial or other terms with third parties which are attractive or advantageous to grow or otherwise supplement our existing business.
+Added: In addition, the identification, negotiation and completion of any acquisition, joint venture, other strategic relationship, or investment may divert management’s attention from ordinary business matters, require a number of one-time or ongoing advisory costs, result in the loss of employees or customers of our business or the acquired business,
+Added: involve the assumption of unknown and potentially significant liabilities or result in impairment charges or write-downs if the assumptions underlying the purchase are not satisfied or operating performance suffers.
Due to various uncertainties inherent in such activities, we may be unable to achieve a substantial portion of any anticipated benefits or cost savings from previous acquisitions, joint ventures, or investments or other anticipated benefits in the timeframe we anticipate, or at all.
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We are Subject to Government Regulation Which Could Materially and Adversely Affect Our Results of Operations
−Removed: We are subject to extensive regulation by the FDA, the USDA, the United States Environmental Protection Agency (“EPA”) and other state, local and foreign authorities in jurisdictions where our products are manufactured, processed or sold.
−Removed: We are also subject to California’s Proposition 65, which requires that clear and reasonable warnings be given to consumers who are exposed to certain chemicals deemed by the state of California to be dangerous.
+Added: We are subject to extensive regulation by the FDA, the USDA, the United States Environmental Protection Agency (“EPA”) and other state, local and foreign authorities in jurisdictions where our products are manufactured, marketed, packaged, processed or sold.
+Added: We are also subject to California’s Proposition 65, which requires that clear and reasonable warnings be given to consumers who are exposed to certain chemicals deemed by the state of California to be dangerous, and several states are considering or have passed legislation requiring warnings for products containing certain ingredients, including ingredients generally recognized as safe by the FDA.
Among other things, these regulations govern the manufacturing, importation, processing, packaging, storage, distribution, advertising and labeling of our products.
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Amendments to existing statutes and regulations, adoption of new statutes and regulations, increased production at our existing facilities as well as our expansion into new operations and jurisdictions may require us to obtain additional licenses and permits and could require us to adapt or alter methods of operations at costs that could be substantial.
−Removed: Due to changing climate patterns and concerns over the environmental impact or sustainability of our products, we may be subject to additional governmental regulations focused on how we produce or source raw materials for our products.
+Added: Due to changing climate patterns and concerns over the environmental impact or sustainability of our products, we may be subject to additional governmental regulations focused on how we produce or source raw materials, ingredients or packaging for our products.
Compliance with applicable laws and regulations may be time-consuming, expensive or costly to us in different ways and could materially and adversely affect our results of operations.
Failure to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as possible criminal sanctions, or other litigation and claims, which could materially and adversely affect our results of operations.
−Removed: Specifically , governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives and import and export restrictions on agricultural commodities and commodity products, can influence the planting, location and size of certain crops, whether commodity products are traded, the volume and types of imports and exports, and the viability and volume of production of certain of our products.
+Added: Specifically , governmental policies affecting the agricultural and food industry, such as taxes, tariffs, duties, subsidies, incentives and import and export restrictions on agricultural commodities and commodity products, can influence the planting, location and size of certain crops, whether commodity products are traded, the volume and types of imports and exports, and the viability and volume of production of certain of our products.
In addition, international trade disputes, sanctions and armed hostilities can adversely affect commodity trade flows by limiting or disrupting trade between countries or regions.
−Removed: Future government policies may adversely affect the supply of, demand for, and prices of our products, restrict our ability to do business in its existing and target markets, and negatively impact our revenues and operating results.
−Removed: The FSMA gives the FDA expanded authorities over the safety of the national food supply, including increased inspections and mandatory recalls, as well as stricter enforcement actions, each of which could result in additional compliance costs and civil remedies, including fines, injunctions, withdrawals, recalls or seizures and confiscations.
+Added: Future government policies on packaging, advertising and marketing, how our products are manufactured or the ingredients used in our products may adversely affect the supply of, demand for, and prices of our products, require us to change the manufacture, packaging or marketing of our products, restrict our ability to do business in its existing and target markets, and negatively impact our revenues and operating results.
+Added: The FSMA and regulatory guidance gives the FDA expanded authorities over the safety of the national food supply, including increased inspections and mandatory recalls, as well as stricter enforcement actions, each of which could result in additional compliance costs and civil remedies, including fines, injunctions, withdrawals, recalls or seizures and confiscations.
The FSMA further instructed the FDA to develop new rules and regulations, including the performance of hazard analyses, implementation of preventive plans to control hazards, and foreign supplier verification provisions, mitigation strategies to protect food against intentional adulteration, sanitary transport of food and food traceability.
−Removed: We currently have food safety plans which build upon established food safety principles of “hazard analysis and critical control points” (“HACCP”) procedures and developed food defense plans that address concerns as a result of FSMA.
+Added: We currently have food safety plans which build upon established food safety principles of “hazard analysis and critical control points” (“HACCP”) procedures and developed food defense plans that address requirements as a result of FSMA.
HACCP is a management system in which food safety is addressed through the analysis and control of hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of the finished product.
5 unchanged sentences
Operational, Legal, Economic, Political and Social Risks of Doing Business in International Markets and Other Foreign Countries May Have a Material Adverse Effect on Our Results of Operations
−Removed: Approximately 28% of the dollar value of our total nut and dried fruit purchases for fiscal 2025 were made from foreign countries.
+Added: Approximately 28% of the dollar value of our total nut, dried fruit and oat purchases for fiscal 2026 were made from foreign countries.
We purchase our cashews from Vietnam and certain West African countries and some of our pecans from Mexico.
3 unchanged sentences
The existence of risks in international markets and other foreign countries could jeopardize or limit our ability to purchase sufficient supplies of cashews, pecans and other imported raw materials and limit our ability to make international sales, and may materially and adversely affect our results of operations by increasing the costs of doing business overseas.
−Removed: Litigation Could Materially and Adversely Affect Our Financial Condition and Results of Operations
−Removed: We have been the subject of litigation and investigations in the past, and we may become the subject of litigation and investigations in the future, which may include lawsuits or claims related to contracts, intellectual property, product recalls, product liability, the marketing and labeling of products, employment matters, wage and hour matters, cybersecurity matters, environmental matters, debt obligations or other aspects of our business.
−Removed: Plaintiffs or regulatory bodies could seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to lawsuits and investigations is difficult to estimate accurately.
+Added: Litigation, Investigations or Other Legal Actions Could Materially and Adversely Affect Our Financial Condition and Results of Operations
+Added: We are or may become the subject of a variety of litigation, claims, legal or regulatory proceedings, inquiries, investigations and other legal actions, which may include matters related to contracts, intellectual property, product recalls and other regulatory action, product liability, the marketing and labeling of products, employment matters, wage and hour matters, cybersecurity matters, environmental matters, debt obligations or other aspects of our business.
+Added: Plaintiffs or regulatory bodies could seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to lawsuits, investigations and other legal actions is difficult to estimate accurately.
Additionally, many of our customer contracts require us to indemnify and assume the defense of any third-party claim against the customer, increasing the risk of litigation related to our operations or products.
−Removed: Regardless of whether any claims against us are valid, or whether we are ultimately held liable, such litigation and investigations may be expensive to defend and may divert time, money and management attention away from our operations and negatively impact our financial performance.
+Added: Regardless of whether any claims against us are valid, or whether we are ultimately held liable, such litigation, investigations or other legal actions may be expensive to defend and may divert time, money and management attention away from our operations and negatively impact our financial performance.
We maintain insurance in amounts we believe to be adequate based on our business operations.
3 unchanged sentences
Inability to Protect Our Intellectual Property or Avoid Intellectual Property Disputes Could Materially and Adversely Affect Our Financial Condition and Results of Operations
−Removed: We consider our intellectual property rights, particularly and most notably our brand trademarks (such as our Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Just the Cheese trademarks), but also our patents, trade secrets, know-how copyrights and licensing agreements, to be a significant and valuable aspect of our business.
+Added: We consider our intellectual property rights, particularly and most notably our brand trademarks (such as our Fisher, Orchard Valley Harvest, Squirrel Brand, and Southern Style Nuts trademarks), but also our patents, trade secrets, know-how copyrights and licensing agreements, to be a significant and valuable aspect of our business.
We attempt to protect our intellectual property rights through a combination of patent, service mark, trademark, copyright and trade secret laws, as well as licensing agreements, third-party nondisclosure and assignment agreements and policing of third-party misuses of our intellectual property both domestically and internationally.
16 unchanged sentences
Valentine (the “Valentine Group”) owns or controls Common Stock and Class A Stock representing approximately a 23.8% voting interest in the Company.
−Removed: In addition, the Sanfilippo Group and the Valentine Group as holders of the Class A Stock are entitled to elect seven Class A Directors, or a majority of the members to the Board of Directors.
+Added: In addition, the Sanfilippo Group and the Valentine Group as holders of the Class A Stock are entitled to elect seven Class A Directors, or a majority of the members to our Board of Directors.
In addition, the Sanfilippo Group is able to exert certain influence on our business, or take certain actions, that cannot be counteracted by another stockholder or group of stockholders.
13 unchanged sentences
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.