What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-29 compared with 2025-07-31 · 137 added, 124 removed, 292 unchanged (47% of the section changed)

3 unchanged sentences

This Report may contain forward looking statements as well as historical information.

All statements, other than statements of historical facts, regarding the prospects of our industry and our prospects, plans, financial position, and strategic plan may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about our sources of cash being adequate;

our capital expenditures;

16 unchanged sentences

Consolidated Results

The table below details the consolidated results for the quarters ended June 30, 2025 and 2024:

Quarter Ended June 30,

The table below details the consolidated results for the quarters ended September 30, 2025 and 2024:

Quarter Ended September 30,

2025 2024 2025 v.

5 unchanged sentences

Selling, general, and administrative (“SG&A”) expenses 18,926 17,204 10

Impairment of long-lived assets and other — 21 N/A

Change in fair value of contingent consideration 2,800 6,400 (56)

9 unchanged sentences

(a) Percentage points (“pp”).

Sales - Sales for the quarter ended June 30, 2025 were $145,494, a decrease of 24 percent compared to the year-ago quarter, which was the result of decreased sales in the Distilling Solutions and Branded Spirits segments, partially offset by increased sales in the Ingredient Solutions segment.

Sales - Sales for the quarter ended September 30, 2025 were $130,912, a decrease of 19 percent compared to the year-ago quarter, which was the result of decreased sales in the Distilling Solutions and Branded Spirits segments, partially offset by increased sales in the Ingredient Solutions segment.

Within the Distilling Solutions segment, sales were down 43 percent primarily due to decreased sales of brown goods.

Within the Branded Spirits segment, sales were down 5 percent due to decreased sales of brands in the value and mid price tiers.

Within the Ingredient Solutions segment, sales were up 5 percent, primarily due to increased sales of specialty wheat proteins and commodity wheat proteins (see “Segment Results”).

Gross profit - Gross profit for the quarter ended June 30, 2025 was $58,387, a decrease of 30 percent compared to the year-ago quarter.

The decrease was driven by decreased gross profit in the Distilling Solutions and Branded Spirits segments, partially offset by increased gross profit in the Ingredient Solutions segment.

Within the Branded Spirits segment, sales were down 3 percent due primarily to decreased sales of brands in the value and other price tiers, partially offset by increased sales of brands within the premium plus price tier.

Within the Ingredient Solutions segment, sales were up 9 percent, primarily due to increased sales of specialty wheat proteins and starches (see “Segment Results”).

Gross profit - Gross profit for the quarter ended September 30, 2025 was $49,433, a decrease of 25 percent compared to the year-ago quarter.

The decrease was driven by decreased gross profit in each of the segments.

Within the Distilling Solutions segment, gross profit decreased by $14,444, or 50 percent.

Within the Branded Spirits segment, gross profit decreased $1,649, or 5 percent.

Within the Ingredient Solutions segment, gross profit increased by $465, or 7 percent (see “Segment Results”).

Advertising and promotion expenses - Advertising and promotion expenses for the quarter ended June 30, 2025 were $6,913, a decrease of 41 percent compared to the year-ago quarter, primarily driven by lapping elevated spend for certain advertising campaigns during the year-ago quarter, as well as realignment of our advertising and promotion spend to brands we believe have the most attractive growth opportunities.

SG&A expenses - SG&A expenses for the quarter ended June 30, 2025 were $23,156, a slight increase of 2 percent compared to the year-ago quarter, primarily driven by increased incentive compensation accrual as compared to the year-ago quarter, which was partially offset by our cost savings initiatives.

Operating income - Operating income for the quarter ended June 30, 2025 decreased to $20,318 from $43,387 for the quarter ended June 30, 2024, primarily as a result of the decrease in gross profit in the Distilling Solutions segment, the change in the fair value of the contingent consideration liability related to the improved performance of the Penelope brand, and the decrease in gross profit in the Branded Spirits segment.

These decreases were partially offset by the reduction in advertising and promotion expenses.

Within the Ingredient Solutions segment, gross profit decreased by $1,712, or 36 percent.

Within the Branded Spirits segment, gross profit decreased $226, or 1 percent (see “Segment Results”).

Advertising and promotion expenses - Advertising and promotion expenses for the quarter ended September 30, 2025 were $6,691, a decrease of 31 percent compared to the year-ago quarter, primarily driven by the realignment of our advertising and promotion spend to brands we believe have the most attractive growth opportunities.

SG&A expenses - SG&A expenses for the quarter ended September 30, 2025 were $18,926, an increase of 10 percent compared to the year-ago quarter, primarily driven by increased incentive compensation accrual as compared to the year-ago quarter, which was partially offset by our cost savings initiative.

Operating income - Operating income for the quarter ended September 30, 2025 decreased to $21,016 from $32,564 for the quarter ended September 30, 2024, primarily as a result of the decrease in gross profit in the Distilling Solutions and Ingredient Solutions segments and the increase in SG&A expenses.

These decreases were partially offset by the change in the fair value of the contingent consideration liability and reduction in advertising and promotion expenses.

Operating income, quarter versus quarter Operating Income Change

Operating income for the quarter ended June 30, 2024

Operating income for the quarter ended September 30, 2024

Decrease in gross profit - Distilling Solutions segment (a)

(14,444) (44) %

Decrease in gross profit - Branded Spirits segment (a)

Decrease in gross profit - Ingredient Solutions segment (a)

(1,712) (5) pp (b)

Increase in gross profit - Ingredient Solutions segment (a)

Decrease in gross profit - Branded Spirits segment (a)

Decrease in advertising and promotion expenses

Increase in SG&A expenses

Decrease in impairment of long-lived assets and other 21 — pp

(1,722) (5) pp

Change in fair value of contingent consideration 3,600 11 pp

Operating income for the quarter ended June 30, 2025

Operating income for the quarter ended September 30, 2025

$ 21,016 (35) %

1 unchanged sentence

(b) Percentage points (“pp”).

Income tax expense - Income tax expense for the quarter ended June 30, 2025 was $4,308, for an effective tax rate of 23.0 percent.

Income tax expense for the quarter ended June 30, 2024 was $10,108, for an effective tax rate of 24.0 percent.

The decrease in income tax expense, quarter versus quarter, was due primarily to lower income before income taxes and the proportionately larger percentage tax rate impact for tax credits related to capital investments.

Earnings per common share (“EPS”) - Basic and Diluted EPS was $0.67 for the quarter ended June 30, 2025, compared to $1.43 for the quarter ended June 30, 2024.

Income tax expense - Income tax expense for the quarter ended September 30, 2025 was $4,276, for an effective tax rate of 21.7 percent.

Income tax expense for the quarter ended September 30, 2024 was $7,554, for an effective tax rate of 24.0 percent.

The decrease in income tax expense, quarter versus quarter, was due primarily to lower income before income taxes.

The decrease in tax rate, quarter versus quarter, was primarily due to the proportionately larger impact of tax credits related to capital investments relative to income before taxes.

Earnings per common share (“EPS”) - Basic and Diluted EPS was $0.71 for the quarter ended September 30, 2025, compared to $1.07 for the quarter ended September 30, 2024.

The change in basic and diluted EPS, quarter versus quarter, was primarily due to a decrease in operating income.

Change in EPS, quarter versus quarter EPS Change

Basic and Diluted EPS for the quarter ended June 30, 2024

Basic and Diluted EPS for the quarter ended September 30, 2024

Change in operating income (a)

5 unchanged sentences

Change in effective tax rate 0.02 2 pp

Change in income allocated to participating securities 0.01 1 pp

Change in weighted average shares outstanding 0.02 2 pp

Basic and Diluted EPS for the quarter ended June 30, 2025

Basic and Diluted EPS for the quarter ended September 30, 2025

$ 0.71 (34) %

1 unchanged sentence

(b) Percentage points (“pp”).

The table below details the consolidated results for the year to date ended June 30, 2025 and 2024:

Year to Date Ended June 30,

The table below details the consolidated results for the year to date ended September 30, 2025 and 2024:

Year to Date Ended September 30,

2025 2024 2025 v.

17 unchanged sentences

(a) Percentage points (“pp”).

Sales - Sales for the year to date ended June 30, 2025 were $267,147, a decrease of 26 percent compared to the year-ago period, which was the result of decreased sales in each segment.

Sales - Sales for the year to date ended September 30, 2025 were $398,059, a decrease of 24 percent compared to the year-ago period, which was the result of decreased sales in each segment.

Within the Distilling Solutions segment, sales were down 45 percent primarily due to decreased sales of brown goods.

Within the Ingredient Solutions segment, sales were down 11 percent, primarily due to decreased sales of specialty wheat starches and proteins.

Sales of Branded Spirits were down 5 percent, primarily due to decreased sales of brands in the value and mid price tiers (see “Segment Results”).

Gross profit - Gross profit for the year to date ended June 30, 2025 was $101,717, a decrease of 30 percent compared to the year-ago period.

The decrease was driven by a decrease in gross profit in each of the segments.

Sales of Branded Spirits were down 4 percent, primarily due to decreased sales of brands in the value and mid price tiers.

Within the Ingredient Solutions segment, sales were down 5 percent, primarily due to decreased sales of specialty wheat starches (see “Segment Results”).

Gross profit - Gross profit for the year to date ended September 30, 2025 was $151,150, a decrease of 29 percent compared to the year-ago period.

The decrease was driven by decreased gross profit in each of the segments.

In the Distilling Solutions segment, gross profit decreased by $53,508 or 51 percent.

1 unchanged sentence

In the Branded Spirits segment, gross profit declined by $2,209, or 2 percent (see “Segment Results”).

Advertising and promotion expenses - Advertising and promotion expenses for the year to date ended June 30, 2025 were $15,085, a decrease of 26 percent compared to the year-ago period, primarily driven by our realignment of our advertising and promotion spend to brands we believe have the most attractive growth opportunities and lapping elevated spend for certain advertising campaigns during the year-ago quarter.

SG&A expenses - SG&A expenses for the year to date ended June 30, 2025 were $44,361, an increase of 1 percent compared to the year-ago period, primarily driven by increased incentive compensation accrual as compared to the year-ago period, which was partially offset by our cost savings initiatives.

Operating income - Operating income for the year to date ended June 30, 2025 decreased to $19,571 from $72,304 for the year to date period ended June 30, 2024, primarily due to the decrease in gross profit in the Distilling Solutions segment, the change in the fair value of the contingent consideration liability related to the improved performance of the Penelope brand, and the decrease in gross profit in the Ingredient Solutions segment.

Advertising and promotion expenses - Advertising and promotion expenses for the year to date ended September 30, 2025 were $21,776, a decrease of 27 percent compared to the year-ago period, primarily driven by the realignment of our advertising and promotion spend to brands we believe have the most attractive growth opportunities.

SG&A expenses - SG&A expenses for the year to date ended September 30, 2025 were $63,287, an increase of 4 percent compared to the year-ago period, primarily driven by increased incentive compensation accrual as compared to the year-ago period, which was partially offset by our cost savings initiative.

Operating income - Operating income for the year to date ended September 30, 2025 decreased to $40,587 from $104,868 for the year to date period ended September 30, 2024, primarily due to the decrease in gross profit in the Distilling Solutions segment, the change in the fair value of the contingent consideration liability related to the improved performance of the Penelope brand, and the decrease in gross profit in the Ingredient Solutions and Branded Spirits segments.

These decreases were partially offset by the reduction in advertising and promotion expenses.

Operating income, year to date versus year to date Operating Income Change

Operating income for the year to date ended June 30, 2024

Operating income for the year to date ended September 30, 2024

Decrease in gross profit - Distilling Solutions segment (a)

6 unchanged sentences

Increase in SG&A expenses

(2,345) (2) pp

Decrease in impairment of long-lived assets and other 137 — pp

Change in fair value of contingent consideration (9,600) (9) pp

Operating income for the year to date ended June 30, 2025

Operating income for the year to date ended September 30, 2025

$ 40,587 (61) %

1 unchanged sentence

(b) Percentage points (“pp”).

Income tax expense - Income tax expense for the year to date ended June 30, 2025 was $4,979, for an effective tax rate of 30.5 percent.

Income tax expense for the year to date ended June 30, 2024, was $16,370, for an effective tax rate of 23.7 percent.

Income tax expense - Income tax expense for the year to date ended September 30, 2025 was $9,255, for an effective tax rate of 25.7 percent.

Income tax expense for the year to date ended September 30, 2024, was $23,924, for an effective tax rate of 23.8 percent.

The decrease in income tax expense, year to date versus year to date, was primarily due to the lower income before income taxes.

The increase in the tax rate, year to date versus year to date, was primarily due to the discrete tax impact of the vesting of share based awards granted in the prior years during periods of higher stock prices.

Earnings per common share - Basic and diluted EPS was $0.53 for the year to date ended June 30, 2025, compared to $2.36 for the year to date ended June 30, 2024.

The change in basic and diluted EPS, year to date versus year to date, was primarily due to a decrease in operating income and the change in effective tax rate.

Earnings per common share - Basic and diluted EPS was $1.24 for the year to date ended September 30, 2025, compared to $3.43 for the year to date ended September 30, 2024.

The change in basic and diluted EPS, year to date versus year to date, was primarily due to a decrease in operating income.

Change in EPS, year to date versus year to date EPS Change

Basic and Diluted EPS for the year to date ended June 30, 2024

Basic and Diluted EPS for the year to date ended September 30, 2024

Change in operating income (a)

5 unchanged sentences

Change in weighted average shares outstanding 0.04 1 pp

Basic and Diluted EPS for the year to date ended June 30, 2025

Basic and Diluted EPS for the year to date ended September 30, 2025

$ 1.24 (64) %

3 unchanged sentences

Branded Spirits

The following tables show selected financial information for the Branded Spirits segment for the quarters ended June 30, 2025 and 2024.

The following tables show selected financial information for the Branded Spirits segment for the quarters ended September 30, 2025 and 2024.

BRANDED SPIRITS SALES

Quarter Ended June 30, Quarter versus Quarter Sales Change Increase/(Decrease)

Quarter Ended September 30, Quarter versus Quarter Sales Change Increase/(Decrease)

2025 2024 $ Change % Change

8 unchanged sentences

Other Financial Information

Quarter Ended June 30, Quarter versus Quarter Increase / (Decrease)

Quarter Ended September 30, Quarter versus Quarter Increase / (Decrease)

2025 2024 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Branded Spirits segment for the quarter ended June 30, 2025 decreased by $3,521, or 5 percent, compared to the prior year quarter, primarily due to lower sales volume and a decrease in net price/mix (as defined in the table above).

Sales of brands within the value and mid price tiers decreased, driven by lower sales volume and net price/mix primarily in certain tequila, liqueur, and cordial brands.

Sales within the premium plus price tier increased 1%, driven by increased sales volume reflecting our increased focus on the American whiskey and tequila categories.

The increase in sales volume within premium plus price tier was partially offset by decreased net price/mix.

Gross profit decreased versus prior year quarter by $1,649, or 5 percent, primarily driven by a decrease in net price/mix and lower sales volume within the value and mid price tiers.

Gross margin for the quarter ended June 30, 2025 increased to 52.8 percent from 52.5 percent for the prior year quarter, driven primarily by increased sales in the premium plus price tier.

The following tables show selected financial information for the Branded Spirits segment for the year to date ended June 30, 2025 and 2024.

Total sales of the Branded Spirits segment for the quarter ended September 30, 2025 decreased by $1,876, or 3 percent, compared to the prior year quarter, primarily due to a decrease in net price/mix (as defined in the table above), partially offset by increased sales volume.

Sales of brands within the value price tier decreased, driven by lower sales volume and net price/mix primarily in certain cordial brands.

Sales within the other category declined driven by decreased sales volume of our private label products.

Sales within the premium plus price tier increased 3%, driven by increased sales volume reflecting our continued focus on the American whiskey and tequila categories.

The increase in sales volume within the premium plus price tier was partially offset by decreased net price/mix.

Gross profit slightly decreased versus the prior year quarter by $226, or 1 percent, primarily driven by a decrease in net price/mix, partially offset by higher sales volume and reduced input costs.

Gross margin for the quarter ended September 30, 2025 increased to 53.0 percent from 51.8 percent for the prior year quarter, driven primarily by increased sales in the premium plus price tier.

The following tables show selected financial information for the Branded Spirits segment for the year to date ended September 30, 2025 and 2024.

BRANDED SPIRITS SALES

Year to Date Ended June 30, Year to Date versus Year to Date Sales Change Increase/(Decrease)

Year to Date Ended September 30, Year to Date versus Year to Date Sales Change Increase/(Decrease)

2025 2024 $ Change % Change

8 unchanged sentences

Other Financial Information

Year to Date Ended June 30, Year to Date versus Year to Date Increase / (Decrease)

Year to Date Ended September 30, Year to Date versus Year to Date Increase / (Decrease)

2025 2024 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of Branded Spirits for the year to date ended June 30, 2025 decreased by $5,440, or 5 percent, compared to the year-ago period, due to lower sales volume and net price/mix within the value and mid price tiers, primarily in certain tequila, liqueur, and cordial brands.

Total sales of Branded Spirits for the year to date ended September 30, 2025 decreased by $7,316, or 4 percent, compared to the year-ago period, due to lower sales volume and net price/mix within the value and mid price tiers, primarily in certain tequila, liqueur, and cordial brands.

This decrease was partially offset by increased sales volume within the premium plus price tier, reflecting our increased focus on the American whiskey and tequila categories.

Gross profit for the year to date ended June 30, 2025 decreased by $1,983, or 4 percent, primarily due to a decrease in sales volume and net price/mix within the value and mid price tiers, partially offset by increased premium plus sales volume.

Gross margin for the year to date ended June 30, 2025 increased to 49.8 percent from 49.2 percent for the prior year period, driven primarily by increased sales in the premium plus price tier.

The increase in sales volume within the premium plus price tier was partially offset by decreased net price/mix.

Gross profit for the year to date ended September 30, 2025 decreased by $2,209, or 2 percent, primarily due to a decrease in sales volume and net price/mix within the value price tier, partially offset by increased premium plus sales volume.

Gross margin for the year to date ended September 30, 2025 increased to 51.0 percent from 50.1 percent for the prior year period, driven primarily by increased sales in the premium plus price tier.

Distilling Solutions

The following tables show selected financial information for the Distilling Solutions segment for the quarters ended June 30, 2025 and 2024.

The following tables show selected financial information for the Distilling Solutions segment for the quarters ended September 30, 2025 and 2024.

DISTILLING SOLUTIONS SALES

Quarter Ended June 30, Quarter versus Quarter Sales Change Increase/(Decrease)

Quarter Ended September 30, Quarter versus Quarter Sales Change Increase/(Decrease)

2025 2024 $ Change % Change

8 unchanged sentences

Other Financial Information

Quarter Ended June 30, Quarter versus Quarter Increase / (Decrease)

Quarter Ended September 30, Quarter versus Quarter Increase / (Decrease)

2025 2024 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Distilling Solutions segment for the quarter ended June 30, 2025 decreased by $43,388, or 46 percent, compared to the prior year quarter, primarily driven by lower brown goods sales.

Brown goods sales volume and net price/mix decreased primarily due to reduced customer demand resulting primarily from elevated industry-wide barrel inventory levels.

White goods and other co-products sales decreased primarily due to a reduction in sales volume resulting from phasing out a number of white goods customer contracts following the closure of our Atchison distillery, as well as reduced production volumes of co-products, primarily dried distillers grain.

Warehouse sales were slightly down as compared to prior year quarter.

Gross profit decreased versus prior year quarter by $23,661, or 56 percent, due to lower brown goods sales volume and net price/mix, partially offset by increased gross profit in white goods and other co-products due to favorable net price/mix.

Gross margin for the quarter ended June 30, 2025 decreased to 37.6 percent from 45.5 percent for the prior year quarter.

The following tables show selected financial information for the Distilling Solutions segment for the year to date ended June 30, 2025 and 2024.

Total sales of the Distilling Solutions segment for the quarter ended September 30, 2025 decreased by $31,038, or 43 percent, compared to the prior year quarter, primarily driven by lower brown goods sales.

Brown goods sales volume decreased due to reduced customer demand resulting primarily from elevated industry-wide barrel inventory levels and the subsequent need of a number of our large customers to pause their whiskey purchases after completing their existing contracts.

This decrease was partially offset by an increase in net price/mix of brown goods compared to the prior year quarter.

White goods and other co-products sales decreased primarily due to a reduction in sales volume related to certain large customers, as well as reduced production volumes of co-products, primarily dried distillers grain.

Warehouse services sales were slightly down as compared to the prior year quarter.

Gross profit decreased versus the prior year quarter by $14,444, or 50 percent, due to lower brown goods sales volume, partially offset by increased gross profit within warehouse services.

Gross margin for the quarter ended September 30, 2025 decreased to 34.7 percent from 39.8 percent for the prior year quarter.

The following tables show selected financial information for the Distilling Solutions segment for the year to date ended September 30, 2025 and 2024.

DISTILLING SOLUTIONS SALES

Year to Date Ended June 30, Year to Date versus Year to Date

Year to Date Ended September 30, Year to Date versus Year to Date

Sales Change Increase/(Decrease)

9 unchanged sentences

Other Financial Information

Year to Date Ended June 30, Year to Date versus Year to Date Increase / (Decrease)

Year to Date Ended September 30, Year to Date versus Year to Date Increase / (Decrease)

2025 2024 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Distilling Solutions segment for the year to date ended June 30, 2025 decreased by $81,297, or 46 percent compared to the year-ago period, primarily driven by lower brown goods sales.

Total sales of the Distilling Solutions segment for the year to date ended September 30, 2025 decreased by $112,335, or 45 percent compared to the year-ago period, primarily driven by lower brown goods sales.

Brown goods sales volume and net price/mix decreased primarily due to reduced customer demand resulting from elevated industry-wide barrel inventory levels.

Warehouse sales were slightly down as compared to prior year-ago period.

Gross profit for the year to date ended June 30, 2025 decreased by $39,064 compared to the year-ago period, due to lower brown goods sales volume and net price/mix, partially offset by increased gross profit in white goods and other co-products due to favorable net price/mix as well as increased gross profit in warehouse services.

Gross margin for the year to date ended June 30, 2025 decreased to 38.7 percent from 43.0 percent for the prior year period.

Warehouse services sales were slightly down as compared to the year-ago period.

Gross profit for the year to date ended September 30, 2025 decreased by $53,508 compared to the year-ago period, due to lower brown goods sales volume and net price/mix, partially offset by increased gross profit in white goods and other co-products due to favorable net price/mix as well as increased gross profit in warehouse services.

Gross margin for the year to date ended September 30, 2025 decreased to 37.5 percent from 42.1 percent for the prior year period.

Ingredient Solutions

The following tables show selected financial information for the Ingredient Solutions segment for the quarters ended June 30, 2025 and 2024.

The following tables show selected financial information for the Ingredient Solutions segment for the quarters ended September 30, 2025 and 2024.

INGREDIENT SOLUTIONS SALES

Quarter Ended June 30, Quarter versus Quarter Sales Change Increase / (Decrease)

Quarter Ended September 30, Quarter versus Quarter Sales Change Increase / (Decrease)

2025 2024 $ Change % Change

2 unchanged sentences

Commodity wheat starches 2,317 2,611 (294) (11)

Commodity wheat proteins 827 — 827 N/A

Commodity wheat proteins 993 383 610 159

Biofuel and other 103 — 103 N/A

Total Ingredient Solutions $ 29,283 $ 26,918 $ 2,365 9 %

3 unchanged sentences

Other Financial Information

Quarter Ended June 30, Quarter versus Quarter Increase / (Decrease)

Quarter Ended September 30, Quarter versus Quarter Increase / (Decrease)

2025 2024 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Ingredient Solutions segment for the quarter ended June 30, 2025 increased by $1,598, or 5 percent, compared to the prior year quarter.

The increase was primarily driven by increased sales volume of specialty wheat proteins driven by the commercialization of new domestic customers during the quarter as well as increased sales volume of commodity wheat proteins.

The decline in specialty wheat starches was primarily due to a decrease in sales volume resulting from continued supply challenges resulting from complexities associated with the closure of the Atchison distillery, partially offset by an increase in net price/mix.

Gross profit increased versus prior year quarter by $465, or 7 percent.

Gross margin for the quarter ended June 30, 2025 increased to 21.7 percent from 21.4 percent for the prior year quarter.

The increase in gross profit was primarily driven by decreased input costs of specialty wheat protein and starches, as well as increased sales volume of specialty wheat proteins and net price/mix of specialty wheat starches.

These increases were partially offset by decreased price/mix of specialty wheat proteins.

The following tables show selected financial information for the Ingredient Solutions segment for the year to date June 30, 2025 and 2024.

Total sales of the Ingredient Solutions segment for the quarter ended September 30, 2025 increased by $2,365, or 9 percent, compared to the prior year quarter.

The increase was primarily driven by increased sales volume of specialty wheat proteins and commodity wheat proteins driven by the conversion of new domestic customers that continued during the quarter.

Additionally, the increase in sales was due to increased net price/mix of specialty wheat starches.

Gross profit decreased versus the prior year quarter by $1,712, or 36 percent.

Gross margin for the quarter ended September 30, 2025 decreased to 10.3 percent from 17.6 percent for the prior year quarter.

The decrease in gross profit was primarily driven by complexities and higher costs associated with the disposal of waste starch streams, elevated costs related to the commercialization of a new large volume textured protein customer, as well as unanticipated operational reliability challenges.

During the quarter ended September 30, 2025, the biofuel facility began operations to help mitigate the disposal costs related to the waste starch streams.

This project is one of many investments being made to reduce disposal costs and improve the overall reliability of our Ingredients Solutions operations.

However, it will take time to realize the benefits of these cost mitigation and reliability initiatives.

This decrease was partially offset by increased sales volume of specialty wheat proteins.

The following tables show selected financial information for the Ingredient Solutions segment for the year to date September 30, 2025 and 2024.

INGREDIENT SOLUTIONS SALES

Year to Date Ended June 30, Year to Date versus Year to Date Sales Change Increase/(Decrease)

Year to Date Ended September 30, Year to Date versus Year to Date Sales Change Increase/(Decrease)

2025 2024 $ Change % Change

3 unchanged sentences

Commodity wheat proteins 2,383 420 1,963 467

Biofuel and other 103 — 103 N/A

Total Ingredient Solutions $ 90,740 $ 95,859 $ (5,119) (5) %

3 unchanged sentences

Other Financial Information

Year to Date Ended June 30, Year to Date versus Year to Date Increase / (Decrease)

Year to Date Ended September 30, Year to Date versus Year to Date Increase / (Decrease)

2025 2024 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Ingredient Solutions segment for the year to date ended June 30, 2025 decreased by $7,484, or 11 percent, compared to the prior year period.

The decrease was primarily driven by decreased sales volume of specialty wheat starches and decreased net/price mix of specialty wheat proteins.

The declines in specialty wheat starches and proteins were due to supply challenges resulting from adverse weather and complexities associated with the closure of our Atchison distillery, as well as the timing of commercialization of new customers.

These declines were offset by increased sales volume of specialty and commodity wheat proteins and increased net price/mix of specialty wheat starches.

Gross profit decreased by $3,263, or 25 percent for the year to date ended June 30, 2025 compared to the prior year period.

Gross margin for the year to date ended June 30, 2025 decreased to 16.3 percent from 19.3 percent for the prior year period.

The decrease in gross profit was primarily driven by decreased net price/mix of specialty wheat proteins and decreased sales volume of specialty wheat starches.

These declines were impacted by supply challenges, additional costs resulting from adverse weather, and complexities associated with the closure of our Atchison distillery, as well as timing of commercialization of new customers.

Total sales of the Ingredient Solutions segment for the year to date ended September 30, 2025 decreased by $5,119, or 5 percent, compared to the prior year period.

The decrease was primarily driven by decreased sales volume of specialty wheat starches and commodity wheat starches as well as decreased net/price mix of specialty wheat proteins.

These declines were partially offset by increased sales volume of specialty and commodity wheat proteins and increased net price/mix of specialty wheat starches.

Gross profit decreased by $4,975, or 28 percent for the year to date ended September 30, 2025 compared to the prior year period.

Gross margin for the year to date ended September 30, 2025 decreased to 14.4 percent from 18.8 percent for the prior year period.

The decrease in gross profit was primarily driven by complexities and higher costs associated with the disposal of waste starch streams, as well as unanticipated operational reliability challenges.

During the quarter ended September 30, 2025, the biofuel facility began operations to help mitigate the disposal costs related to the waste starch streams.

This project is one of many investments being made to reduce disposal costs and improve the overall reliability of our Ingredients Solutions operations.

However, it will take time to realize the benefits of these cost mitigation and reliability initiatives.

This decrease was partially offset by increased sales volume of specialty wheat proteins.

CASH FLOW, FINANCIAL CONDITION, AND LIQUIDITY

5 unchanged sentences

Cash Flow Summary

Year to Date Ended June 30, Changes, year versus year Increase / (Decrease)

Year to Date Ended September 30, Changes, year versus year Increase / (Decrease)

Net cash provided by operating activities $ 92,449 $ 73,512 $ 18,937

Net cash used in investing activities (40,688) (53,126) 12,438

Net cash provided by (used in) financing activities (33,103) 6,721 (39,824)

Net cash used in financing activities (64,286) (18,048) (46,238)

Effect of exchange rate changes on cash 699 46 653

Increase (decrease) in cash and cash equivalents $ (11,826) $ 2,384 $ (14,210)

Cash decreased $7,953 for the year to date ended June 30, 2025, compared to an increase of $2,623 for the year to date ended June 30, 2024, for a net decrease in cash of $10,576, period versus period.

Cash decreased $11,826 for the year to date ended September 30, 2025, compared to an increase of $2,384 for the year to date ended September 30, 2024, for a net decrease in cash of $14,210, period versus period.

Operating Activities.

Cash provided by operating activities for the year to date ended June 30, 2025 was $56,357.

Cash provided by operating activities for the year to date ended September 30, 2025 was $92,449.

The cash provided by operating activities resulted primarily from adjustments for non-cash or non-operating charges of $46,344, including the change in fair value of contingent consideration, depreciation and amortization, and share-based compensation, net income of $26,799 and cash provided by operating assets and liabilities of $19,306.

The primary drivers of the changes in operating assets and liabilities were $31,103 of cash provided by decreased accounts receivables, net, due to timing of customer payments and lower sales during the quarter.

The primary drivers of the changes in operating assets and liabilities were $41,699 of cash provided by decreased accounts receivables, net, due to timing of customer payments and lower sales during the year to date period, and $7,689 related to increased accrued expenses and other, which related to an increase in our incentive compensation accrual.

This was partially offset by $19,935 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, and $8,446 use of cash related to a decrease in accounts payable due to timing of vendor payments and lower costs during the year to date period.

Cash provided by operating activities for the year to date ended June 30, 2024 was $29,582.

Cash provided by operating activities for the year to date ended September 30, 2024 was $73,512.

The cash provided by operating activities resulted primarily from net income of $76,463, adjustments for non-cash or non-operating charges of $32,845, including depreciation and amortization, the changes in fair value of contingent consideration, and share-based compensation, partially offset by cash used in operating assets and liabilities of $35,796.

The primary drivers of the changes in operating assets and liabilities were $14,766 use of cash related to increased accounts receivable, net, due to timing of sales and customer payments during the year to date period, $11,754 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, $10,738 use of cash related to accrued expenses and other, which related to the incentive compensation payout during the year to date period, and $6,345 use of cash related to a decrease in accounts payable due to timing of payments.

The primary drivers of the changes in operating assets and liabilities were $24,979 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, $10,627 use of cash related to a decrease in accounts payable due to timing of payments, $9,935 related to accrued expenses and other, which related to a decrease in our incentive compensation accrual, partially offset by $13,979 cash provided by decreased accounts receivables, net, due to timing of sales and customer payments during the year to date period as well as the closure of our Atchison distillery in December 2023.

Investing Activities.

Cash used in investing activities for the year to date ended June 30, 2025 was $32,167, which resulted primarily from additions to property, plant, and equipment of $32,156 (see “Capital Spending”).

Cash used in investing activities for the year to date ended June 30, 2024 was $33,657, which primarily resulted from additions to property, plant, and equipment of $33,397 (see “Capital Spending”).

Cash used in investing activities for the year to date ended September 30, 2025 was $40,688, which resulted primarily from additions to property, plant, and equipment of $40,674 (see “Capital Spending”).

Cash used in investing activities for the year to date ended September 30, 2024 was $53,126, which primarily resulted from additions to property, plant, and equipment of $52,850 (see “Capital Spending”).

Capital Spending.

We manage capital spending to support our business growth plans.

We have incurred $18,691 and $22,560 of capital expenditures and have paid $32,156 and $33,397 for capital expenditures for the years to date ended June 30, 2025 and 2024, respectively.

We have incurred $25,436 and $43,503 of capital expenditures and have paid $40,674 and $52,850 for capital expenditures for the years to date ended September 30, 2025 and 2024, respectively.

We expect to incur approximately $32,500 in capital expenditures in 2025, which includes capital expenditures for facility improvement and expansion, facility sustaining projects, and environmental, health, and safety projects.

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Financing Activities.

Cash used in financing activities for the year to date ended June 30, 2025 was $33,103, due to net payments on debt of $24,200 (see “Long-Term and Short-Term Debt”), payments of dividends and dividend equivalents of $5,156 (see “Dividends and Dividend Equivalents”), payments of loan fees related to borrowings of $2,712, and repurchases of Common Stock of $1,035 (see “Treasury Purchases” and “Share Repurchase”).

Cash provided by financing activities for the year to date ended June 30, 2024 was $6,721, due to net proceeds on debt of $21,800 (see “Long-Term and Short-Term Debt”), partially offset by repurchase of Common Stock of $9,735 (see “Treasury Purchases” and “Share Repurchases”) and payments of dividends and dividend equivalents of $5,344 (see “Dividends and Dividend Equivalents”).

Cash used in financing activities for the year to date ended September 30, 2025 was $64,286, due to net payments on debt of $52,800 (see “Long-Term and Short-Term Debt”), payments of dividends and dividend equivalents of $7,739 (see “Dividends and Dividend Equivalents”), payments of loan fees of $2,712, and repurchases of Common Stock of $1,035 (see “Treasury Purchases” and “Share Repurchase”).

Cash used in financing activities for the year to date ended September 30, 2024 was $18,048, due to repurchases of Common Stock of $12,235 (see “Treasury Purchases” and “Share Repurchases”), and payments of dividends and dividend equivalents of $8,013 (see “Dividends and Dividend Equivalents”), partially offset by net proceeds on debt of $2,200 (see “Long-Term and Short-Term Debt”).

Treasury Purchases.

105,776 RSUs vested and converted to shares of Common Stock for employees during the year to date ended June 30, 2025, of which we withheld and purchased for treasury 31,631 shares valued at $1,035 to cover payment of associated withholding taxes.

81,942 RSUs vested and converted to shares of Common Stock for employees during the year to date ended June 30, 2024, of which we withheld and purchased for treasury 25,521 shares valued at $2,185 to cover payment of associated withholding taxes.

Share Repurchase.

105,776 RSUs vested and converted to shares of Common Stock for employees during the year to date ended September 30, 2025, of which we withheld and purchased for treasury 31,631 shares valued at $1,035 to cover payment of associated withholding taxes.

81,942 RSUs vested and converted to shares of Common Stock for employees during the year to date ended September 30, 2024, of which we withheld and purchased for treasury 25,521 shares valued at $2,185 to cover payment of associated withholding taxes.

Share Repurchases.

On February 29, 2024, we announced that our Board of Directors approved a $100,000 share repurchase program.

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The repurchase program has no expiration date and may be modified, suspended, or discontinued at any time by the Company without prior notice.

During the year to date ended June 30, 2025, we did not repurchase any shares of Common Stock under the share repurchase program.

During the year to date ended June 30, 2024, the Company repurchased approximately 92,447 shares of Company Stock for approximately $7,500.

As of June 30, 2025, there was approximately $53,412 remaining under the share repurchase program.

During the year to date ended September 30, 2025, we did not repurchase any shares of Common Stock under the share repurchase program.

During the year to date ended September 30, 2024, the Company repurchased approximately 128,360 shares of Company Stock for approximately $10,000.

As of September 30, 2025, there was approximately $53,412 remaining under the share repurchase program.

Dividends and Dividend Equivalents

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May 1, 2025 May 16, 2025 May 30, 2025 0.12 0.12 2,553 25 2,578

July 31, 2025 August 15, 2025 August 29, 2025 0.12 0.12 2,555 28 2,583

$ 0.36 $ 0.36 $ 7,661 $ 78 $ 7,739

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May 2, 2024 May 17, 2024 May 31, 2024 0.12 0.12 2,642 30 2,672

August 1, 2024 August 16, 2024 August 30, 2024 0.12 0.12 2,639 30 2,669

$ 0.36 $ 0.36 $ 7,922 $ 91 $ 8,013

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(b) Dividend equivalent payments on unvested participating securities.

On July 31, 2025, we announced a dividend payable to stockholders of record of our Common Stock, resulting in dividend equivalents payable to certain RSU holders, of $0.12 per share and per RSU.

The dividend and dividend equivalent are payable on August 29, 2025 to stockholders of record and certain RSU holders as of August 15, 2025.

On October 29, 2025, we announced a dividend payable to stockholders of record of our Common Stock, resulting in dividend equivalents payable to certain RSU holders, of $0.12 per share and per RSU.

The dividend and dividend equivalents are payable on November 28, 2025 to stockholders of record and certain RSU holders as of November 14, 2025.

Long-Term and Short-Term Debt.

We maintain debt levels we consider appropriate after evaluating a number of factors, including cash flow expectations, cash requirements for ongoing operations, investment and financing plans (including brand development, merger and acquisition, Board-approved dividends, and share repurchase activities), and the overall cost of capital.

Total debt was $297,086 (net of unamortized loan fees of $8,164) at June 30, 2025, and $323,541 (net of unamortized loan fees of $5,909) at December 31, 2024.

We had net borrowings on debt of $24,200 for year to date ended June 30, 2025 and net proceeds on debt of $21,800 for the year to date ended June 30, 2024.

Additionally, during the year to date ended June 30, 2025, we incurred $2,712 of loan fees associated with amending and restating our credit agreement.

Total debt was $268,723 (net of unamortized loan fees of $7,927) at September 30, 2025, and $323,541 (net of unamortized loan fees of $5,909) at December 31, 2024.

We had net borrowings on debt of $52,800 for year to date ended September 30, 2025 and net proceeds on debt of $2,200 for the year to date ended September 30, 2024.

Additionally, during the year to date ended September 30, 2025, we incurred $2,712 of loan fees associated with amending and restating our credit agreement.

Financial Condition and Liquidity.

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Our principal sources of cash are product sales and borrowing on our various debt agreements.

Under our debt agreements, we must meet certain financial covenants and restrictions, and at June 30, 2025, we met those covenants and restrictions.

At June 30, 2025, our current assets exceeded our current liabilities by $341,632, largely due to our inventories, at cost, of $379,702.

At June 30, 2025, our cash balance was $17,320 and we have used our various debt agreements for liquidity purposes, with $416,000 available under our credit agreement for additional borrowings and $230,000 available under the Note Purchase Agreement (see Note 4, Corporate Borrowings).

Under our debt agreements, we must meet certain financial covenants and restrictions, and at September 30, 2025, we met those covenants and restrictions.

At September 30, 2025, our current assets exceeded our current liabilities by $326,843, largely due to our inventories, at cost, of $384,523.

At September 30, 2025, our cash balance was $13,447 and we have used our various debt agreements for liquidity purposes, with $443,000 available under our credit agreement for additional borrowings and $231,600 available under the Note Purchase Agreement (see Note 4, Corporate Borrowings).

We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations.

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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