What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-29 · 256 added, 90 removed, 164 unchanged (68% of the section changed)

16 unchanged sentences

Our distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits.

Our protein and starch food ingredients are predominately wheat based and provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry.

Our protein and starch food ingredients are predominantly wheat based and provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry.

Our ingredient products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries.

2 unchanged sentences

Consolidated Results

The table below details the consolidated results for the quarters ended March 31, 2026 and 2025:

Quarter Ended March 31,

The table below details the consolidated results for the quarters ended June 30, 2026 and 2025:

Quarter Ended June 30,

2026 2025 2026 v.

5 unchanged sentences

Selling, general, and administrative (“SG&A”) expenses 20,237 23,156 (13)

Goodwill and other long-lived assets impairment 179,526 — N/A

Provision for credit loss 2,148 — N/A

Impairment and other 751 — N/A

Change in fair value of contingent consideration — 8,000 N/A

Operating loss

(173,201) (747) (23,086)

Operating income 17,652 20,318 (13)

Operating margin % 14.2 % 14.0 % 0.2 pp

Interest expense, net (2,879) (1,897) 52

Other income (expense), net (50) 215 (123)

Loss before income taxes

(174,672) (2,386) (7,221)

Income tax expense (benefit)

(39,865) 671 (6,041)

Other income, net 299 314 (5)

Income before income taxes 15,072 18,735 (20)

Income tax expense 3,063 4,308 (29)

Effective tax expense rate % 20.3 % 23.0 % (2.7) pp

$ (134,807) $ (3,057) (4,310) %

Net income $ 12,009 $ 14,427 (17) %

Net income margin % 9.7 % 9.9 % (0.2) pp

(a) Percentage points (“pp”).

Sales - Sales for the quarter ended March 31, 2026 were $106,427, a decrease of 13 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 40 percent primarily due to decreased sales of brown goods.

Sales - Sales for the quarter ended June 30, 2026 were $124,357, a decrease of 15 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 42 percent primarily due to decreased sale volume of brown goods.

Within the Branded Spirits segment, sales were down 1 percent primarily due to decreased sales volume of our private label bottled products within the other category.

Within the Ingredient Solutions segment, sales were up 29 percent, primarily due to increased sales of specialty wheat proteins and starches (see “Segment Results”).

Gross profit - Gross profit for the quarter ended March 31, 2026 was $33,582, a decrease of 22 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 Ingredient Solutions segment, sales were up 2 percent, primarily due to increased sales of biofuel and other (see “Segment Results”).

Gross profit - Gross profit for the quarter ended June 30, 2026 was $46,471, a decrease of 20 percent compared to the year-ago quarter, which was the result of decreased gross profit in each segment.

Within the Distilling Solutions segment, gross profit decreased by $7,510, or 40 percent.

Within the Branded Spirits segment, gross profit decreased $1,062, or 5 percent.

Within the Ingredient Solutions segment, gross profit increased by $1,369, or 56 percent (see “Segment Results”).

Advertising and promotion expenses - Advertising and promotion expenses for the quarter ended March 31, 2026 were $6,191, a decrease of 24 percent compared to the year-ago quarter, primarily driven by 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 March 31, 2026 were $21,066, a decrease of 1 percent compared to the year-ago quarter.

Operating income (loss) - Operating income for the quarter ended March 31, 2026 decreased to a loss of $173,201 from a loss of $747 for the quarter ended March 31, 2025, primarily due to the $179,526 goodwill and other long-lived assets impairment related to the Branded Spirits segment recorded during first quarter 2026.

Additionally, contributing to the operating loss was a decrease in gross profit in the Distilling Solutions and Branded Spirits segments.

These decreases were partially offset by an increase in gross profit in the Ingredient Solutions segment, decreases in advertising and promotion expenses and SG&A expenses as well as the change in fair value of contingent consideration.

Operating income (loss), quarter versus quarter Operating Income Change

Operating loss for the quarter ended March 31, 2025

Within the Ingredient Solutions segment, gross profit decreased by $4,018, or 53 percent.

Within the Branded Spirits segment, gross profit decreased $388, or 1 percent (see “Segment Results”).

Advertising and promotion expenses - Advertising and promotion expenses for the quarter ended June 30, 2026 were $5,683, a decrease of 18 percent compared to the year-ago quarter, primarily driven by timing of advertising and promotion spend.

SG&A expenses - SG&A expenses for the quarter ended June 30, 2026 were $20,237, a decrease of 13 percent compared to the year-ago quarter, primarily driven by our cost savings initiatives.

Operating income - Operating income for the quarter ended June 30, 2026 decreased to $17,652 from $20,318 for the quarter ended June 30, 2025, primarily due to a decrease in gross profit in each segment and an increase in provision for credit loss related to one of our significant customers filing a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code during July 2026.

These decreases were partially offset by the change in fair value of contingent consideration, as well as decreases in SG&A and advertising and promotion expenses.

Operating income, quarter versus quarter Operating Income Change

Operating income for the quarter ended June 30, 2025

Decrease in gross profit - Distilling Solutions segment (a)

(7,510) (37) %

Decrease in gross profit - Branded Spirits segment (a)

Decrease in gross profit - Ingredient Solutions segment (a)

(4,018) (20) pp (b)

Increase in gross profit - Ingredient Solutions segment (a)

Decrease in gross profit - Branded Spirits segment (a)

Decrease in advertising and promotion expenses

Decrease in SG&A expenses

Increase in goodwill and other long-lived assets impairment

(179,526) (24,033) pp

Increase in provision for credit loss (2,148) (11) pp

Increase in impairment and other (751) (4) pp

Change in fair value of contingent consideration 8,000 39 pp

Operating loss for the quarter ended March 31, 2026

Operating income for the quarter ended June 30, 2026

$ 17,652 (13) %

1 unchanged sentence

(b) Percentage points (“pp”).

Income tax expense (benefit) - Income tax benefit for the quarter ended March 31, 2026 was $39,865, for an effective tax rate of 22.8 percent.

Income tax expense for the quarter ended March 31, 2025 was $671, for an effective tax rate of (28.1) percent.

Income tax expense - Income tax expense for the quarter ended June 30, 2026 was $3,063, for an effective tax rate of 20.3 percent.

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

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

The increase in tax rate, quarter versus quarter, was primarily due to the tax impact of the goodwill and other long-lived assets impairment.

Earnings per common share (“EPS”) - Basic and Diluted EPS was $(6.30) for the quarter ended March 31, 2026, compared to $(0.14) for the quarter ended March 31, 2025.

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

The decrease in tax rate, quarter versus quarter, was primarily due to the discrete impact of a state law change on the Company’s deferred tax balances.

Earnings per common share (“EPS”) - Basic and Diluted EPS was $0.55 for the quarter ended June 30, 2026, compared to $0.67 for the quarter ended June 30, 2025.

The change in basic and diluted EPS, quarter versus quarter, was primarily due to an increase in interest expense, net and a decrease in operating income.

Change in EPS, quarter versus quarter EPS Change

Basic and Diluted EPS for the quarter ended March 31, 2025

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

Change in operating income (a)

2 unchanged sentences

(0.04) (6) pp (b)

Change in effective tax rate 0.02 3 pp

Basic and Diluted EPS for the quarter ended June 30, 2026

$ 0.55 (18) %

(a) Net of tax based on the effective tax rate for the base year (2025).

(b) Percentage points (“pp”).

The table below details the consolidated results for the year to date ended June 30, 2026 and 2025:

Year to Date Ended June 30,

2026 2025 2026 v.

Sales $ 230,784 $ 267,147 (14) %

Cost of sales 150,731 165,430 (9)

Gross profit 80,053 101,717 (21)

Gross margin % 34.7 % 38.1 % (3.4) pp (a)

Advertising and promotion expenses 11,874 15,085 (21)

SG&A expenses 41,303 44,361 (7)

Provision for credit loss 2,148 — N/A

Impairment and other 180,277 — N/A

Change in fair value of contingent consideration — 22,700 N/A

Operating income (loss) (155,549) 19,571 (895)

Operating margin % (67.4) % 7.3 % (74.7) pp

Interest expense, net (4,300) (3,751) 15

Other income, net 249 529 (53)

Income (loss) before income taxes (159,600) 16,349 (1,076)

Income tax expense (benefit) (36,802) 4,979 (839)

Effective tax expense rate % 23.1 % 30.5 % (7.4) pp

Net income (loss) $ (122,798) $ 11,370 (1,180) %

Net income margin % (53.2) % 4.3 % (57.5) pp

(a) Percentage points (“pp”).

Sales - Sales for the year to date ended June 30, 2026 were $230,784, a decrease of 14 percent compared to the year-ago period, 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 41 percent primarily due to decreased sales volume of brown goods.

Sales of Branded Spirits were down 4 percent, primarily due to decreased sales volume of our private label bottled products within the other category.

Within the Ingredient Solutions segment, sales were up 13 percent, primarily due to increased sales of specialty wheat proteins and starches (see “Segment Results”).

Gross profit - Gross profit for the year to date ended June 30, 2026 was $80,053, a decrease of 21 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 $17,565 or 47 percent.

In the Ingredient Solutions segment, gross profit decreased by $2,649, or 26 percent.

In the Branded Spirits segment, gross profit declined by $1,450, or 3 percent (see “Segment Results”).

Advertising and promotion expenses - Advertising and promotion expenses for the year to date ended June 30, 2026 were $11,874, a decrease of 21 percent compared to the year-ago period, primarily driven by timing of advertising and promotion spend.

SG&A expenses - SG&A expenses for the year to date ended June 30, 2026 were $41,303, a decrease of 7 percent compared to the year-ago period, primarily driven by our cost savings initiatives.

Operating income (loss) - Operating income for the year to date ended June 30, 2026 decreased to a loss of $155,549 from income of $19,571 for the year to date period ended June 30, 2025, primarily due to the $179,526 goodwill and other long-lived assets impairment related to the Branded Spirits segment recorded during the first quarter 2026.

Additionally, contributing to the operating loss was decreases in gross profit in each segment and an increase in provision for credit loss related to one of our significant customers filing a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code during July 2026.

These decreases were partially offset by the change in the fair value of the contingent consideration liability, as well as the reduction in advertising and promotion and SG&A expenses.

Operating income (loss), year to date versus year to date Operating Income Change

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

Decrease in gross profit - Distilling Solutions segment (a)

(17,565) (90) %

Decrease in gross profit - Ingredient Solutions segment (a)

(2,649) (14) pp(b)

Decrease in gross profit - Branded Spirits segment (a)

(1,450) (7) pp

Decrease in advertising and promotion expenses

Decrease in SG&A expenses

Increase in provision for credit loss (2,148) (11) pp

Increase in impairment and other (180,277) (921) pp

Change in fair value of contingent consideration 22,700 116 pp

Operating loss for the year to date ended June 30, 2026

$ (155,549) (895) %

(a) See “Segment Results.”

(b) Percentage points (“pp”).

Income tax expense (benefit) - Income tax benefit for the year to date ended June 30, 2026 was $36,802, for an effective tax rate of 23.1 percent.

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

The decrease in income tax expense, year to date versus year to date, was primarily due to lower income before income taxes and the tax impact of the goodwill and other long-lived assets impairment.

The decrease in tax rate, year to date versus year to date, was primarily due to the discrete impact of a state law change on the Company’s deferred tax balances.

Earnings per common share - Basic and diluted EPS was $(5.74) for the year to date ended June 30, 2026, compared to $0.53 for the year to date ended June 30, 2025.

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, 2025

Change in operating income (a)

(5.71) (1,077) %

Change in interest expense, net (a)

(0.02) (4) pp(b)

Change in other income, net (a)

2 unchanged sentences

Change in weighted average shares outstanding 0.02 4 pp

Basic and Diluted EPS for the quarter ended March 31, 2026

Basic and Diluted EPS for the year to date ended June 30, 2026

$ (5.74) (1,183) %

3 unchanged sentences

Branded Spirits

The following tables show selected financial information for the Branded Spirits segment for the quarters ended March 31, 2026 and 2025.

The following tables show selected financial information for the Branded Spirits segment for the quarters ended June 30, 2026 and 2025.

BRANDED SPIRITS SALES

Quarter Ended March 31, Quarter versus Quarter Sales Change Increase/(Decrease)

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

2026 2025 $ Change % Change

8 unchanged sentences

Other Financial Information

Quarter Ended March 31, Quarter versus Quarter Increase / (Decrease)

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

2026 2025 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Branded Spirits segment for the quarter ended March 31, 2026 decreased by $3,990, or 8 percent, compared to the prior year quarter, primarily due to a decrease in sales volume of our private label bottled products within the other category.

Sales of brands within the value price tier decreased, driven by lower sales volume and net price/mix as we continued to optimize our offerings in these price tiers.

These decreases were partially offset by increased sales volume in the premium plus price tier reflecting our continued focus on the American whiskey and tequila categories.

Total sales of the Branded Spirits segment for the quarter ended June 30, 2026 decreased by $890, or 1 percent, compared to the prior year quarter, primarily due to a decrease in sales volume of our private label bottled products within the other category.

This decrease was partially offset by increased sales volume in the premium plus price tier reflecting continued growth of our American whiskey offerings.

Gross profit decreased versus the prior year quarter by $388, or 1 percent, primarily driven by lower sales volume of private label bottled products within the other category.

Gross margin for the quarter ended March 31, 2026 increased to 47.8 percent from 46.0 percent for the prior year quarter, driven primarily by increased sales volume in the premium plus price tier.

Gross margin for the quarter ended June 30, 2026 increased to 53.0 percent from 52.8 percent for the prior year quarter, driven primarily by increased sales volume 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, 2026 and 2025.

BRANDED SPIRITS SALES

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

2026 2025 $ Change % Change

Premium plus $ 55,296 $ 53,417 $ 1,879 4 %

Mid 29,468 28,520 948 3

Value 14,827 16,277 (1,450) (9)

Other 4,276 10,533 (6,257) (59)

Total Branded Spirits $ 103,867 $ 108,747 $ (4,880) (4) %

Change in Year to Date versus Year to Date Sales Attributed to:

Net Price/Mix (c)

Total Branded Spirits (4)% (3)% (1)%

Other Financial Information

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

2026 2025 $ Change % Change

Gross profit $ 52,732 $ 54,182 $ (1,450) (3) %

Gross margin % 50.8 % 49.8 % 1.0 pp (d)

(a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars.

(b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit.

The product is then divided by prior period sales dollars.

(c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume.

The product is then divided by prior period sales dollars.

(d) Percentage points (“pp”).

Total sales of the Branded Spirits segment for the year to date ended June 30, 2026 decreased by $4,880, or 4 percent, compared to the year-ago period, primarily due to a decrease in sales volume of our private label bottled products within the other category.

Sales volume of brands within the value price tier also decreased as we continued to optimize our offerings in this price tier.

These decreases were partially offset by increased sales volume in the premium plus and mid price tiers reflecting our continued focus on the American whiskey and tequila categories.

Gross profit for the year to date ended June 30, 2026 decreased by $1,450, or 3 percent, primarily driven by lower sales volume of private label bottled products within the other category.

Gross margin for the year to date ended June 30, 2026 increased to 50.8 percent from 49.8 percent for the prior year period, driven primarily by increased sales volume in the premium plus price tier.

Distilling Solutions

The following tables show selected financial information for the Distilling Solutions segment for the quarters ended March 31, 2026 and 2025.

The following tables show selected financial information for the Distilling Solutions segment for the quarters ended June 30, 2026 and 2025.

DISTILLING SOLUTIONS SALES

Quarter Ended March 31, Quarter versus Quarter Sales Change Increase/(Decrease)

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

2026 2025 $ Change % Change

8 unchanged sentences

Other Financial Information

Quarter Ended March 31, Quarter versus Quarter Increase / (Decrease)

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

2026 2025 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Distilling Solutions segment for the quarter ended March 31, 2026 decreased by $18,943, or 40 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 continued elevated industry-wide barrel inventory levels.

Total sales of the Distilling Solutions segment for the quarter ended June 30, 2026 decreased by $20,780, or 42 percent, compared to the prior year quarter, primarily driven by lower brown goods sales volume.

Brown goods sales decreased due to reduced customer volume demand resulting primarily from continued elevated industry-wide barrel inventory levels.

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

Gross profit decreased versus the prior year quarter by $10,055, or 54 percent, primarily due to lower brown goods sales volume and decreased gross profit of white goods and other co-products.

Gross margin for the quarter ended March 31, 2026 decreased to 30.8 percent from 39.8 percent for the prior year quarter primarily due to lower brown goods sales.

Gross profit decreased versus the prior year quarter by $7,510, or 40 percent, primarily due to lower brown goods sales volume.

Gross margin for the quarter ended June 30, 2026 increased to 38.7 percent from 37.6 percent for the prior year quarter primarily due to an increase in net price/mix of brown goods and reduced distillation costs.

The following tables show selected financial information for the Distilling Solutions segment for the year to date ended June 30, 2026 and 2025.

DISTILLING SOLUTIONS SALES

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

Sales Change Increase/(Decrease)

2026 2025 $ Change % Change

Brown goods $ 29,169 $ 68,713 $ (39,544) (58) %

Warehouse services 16,914 16,078 836 5

White goods and other co-products

11,137 12,152 (1,015) (8)

Total Distilling Solutions $ 57,220 $ 96,943 $ (39,723) (41) %

Change in Year to Date versus Year to Date Sales Attributed to:

Net Price/Mix (c)

Brown goods (58)% (62)% 4%

Other Financial Information

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

2026 2025 $ Change % Change

Gross profit $ 19,927 $ 37,492 $ (17,565) (47) %

Gross margin % 34.8 % 38.7 % (3.9) pp (d)

(a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars.

(b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit.

The product is then divided by prior period sales dollars.

(c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume.

The product is then divided by prior period sales dollars.

(d) Percentage points (“pp”).

Total sales of the Distilling Solutions segment for the year to date ended June 30, 2026 decreased by $39,723, or 41 percent compared to the year-ago period, primarily driven by lower brown goods sales volume.

Brown goods sales decreased due to reduced customer volume demand resulting primarily from continued elevated industry-wide barrel inventory levels.

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

Gross profit for the year to date ended June 30, 2026 decreased by $17,565 compared to the year-ago period, primarily due to lower brown goods sales volume.

Gross margin for the year to date ended June 30, 2026 decreased to 34.8 percent from 38.7 percent for the prior year period primarily due to lower brown goods sales.

Ingredient Solutions

The following tables show selected financial information for the Ingredient Solutions segment for the quarters ended March 31, 2026 and 2025.

The following tables show selected financial information for the Ingredient Solutions segment for the quarters ended June 30, 2026 and 2025.

INGREDIENT SOLUTIONS SALES

Quarter Ended March 31, Quarter versus Quarter Sales Change Increase / (Decrease)

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

2026 2025 $ Change % Change

9 unchanged sentences

Other Financial Information

Quarter Ended March 31, Quarter versus Quarter Increase / (Decrease)

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

2026 2025 $ Change % Change

7 unchanged sentences

(d) Percentage points (“pp”).

Total sales of the Ingredient Solutions segment for the quarter ended March 31, 2026 increased by $7,707, or 29 percent, compared to the prior year quarter.

The increase was primarily driven by increased sales volume and net price/mix of specialty wheat proteins and starches due to cycling against the supply challenges resulting from adverse weather during the prior year quarter, complexities associated with the closure of the Atchison distillery, as well as cycling against the timing of commercialization of new customers during the prior year quarter.

Gross profit increased versus the prior year quarter by $1,369, or 56 percent.

Gross margin for the quarter ended March 31, 2026 increased to 11.2 percent from 9.3 percent for the prior year quarter.

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

This increase was partially offset by higher costs associated with the disposal of waste starch streams.

Total sales of the Ingredient Solutions segment for the quarter ended June 30, 2026 increased by $533, or 2 percent, compared to the prior year quarter.

The increase was primarily driven by increased sales volume of bio fuel and other byproducts and increased net price/mix of specialty wheat starches and proteins.

These increases were partially offset by a decrease in sales volume of commodity wheat proteins and a decrease in net price/mix of commodity wheat starches.

Gross profit decreased versus the prior year quarter by $4,018, or 53 percent.

Gross margin for the quarter ended June 30, 2026 decreased to 10.1 percent from 21.7 percent for the prior year quarter.

The decrease in gross profit was primarily driven by higher waste starch stream costs in biofuel and other, as well as lower net price/mix of commodity wheat starches.

This decrease was partially offset by an increase in net/price mix of specialty wheat starches and proteins.

The following tables show selected financial information for the Ingredient Solutions segment for the year to date June 30, 2026 and 2025.

INGREDIENT SOLUTIONS SALES

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

2026 2025 $ Change % Change

Specialty wheat starches $ 37,305 $ 34,327 $ 2,978 9 %

Specialty wheat proteins 25,457 19,960 5,497 28

Commodity wheat starches 5,287 5,780 (493) (9)

Commodity wheat proteins 459 1,390 (931) (67)

Biofuel and other 1,189 — 1,189 N/A

Total Ingredient Solutions $ 69,697 $ 61,457 $ 8,240 13 %

Change in Year to Date versus Year to Date Sales Attributed to:

Net Price/Mix (c)

Total Ingredient Solutions 13% 8% 5%

Other Financial Information

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

2026 2025 $ Change % Change

Gross profit $ 7,394 $ 10,043 $ (2,649) (26) %

Gross margin % 10.6 % 16.3 % (5.7) pp (d)

(a) Total sale changes is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars.

(b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit.

The product is then divided by prior period sales dollars.

(c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume.

The product is then divided by prior period sales dollars.

(d) Percentage points (“pp”).

Total sales of the Ingredient Solutions segment for the year to date ended June 30, 2026 increased by $8,240, or 13 percent, compared to the prior year period.

The increase was primarily driven by increased net price/mix and sales volume of specialty wheat proteins and starches due to cycling against the supply challenges resulting from adverse weather during the prior year, complexities associated with the closure of the Atchison distillery, as well as cycling against the timing of commercialization of new customers during the prior year.

Gross profit decreased by $2,649, or 26 percent for the year to date ended June 30, 2026 compared to the prior year period.

Gross margin for the year to date ended June 30, 2026 decreased to 10.6 percent from 16.3 percent for the prior year period.

The decrease in gross profit and margin was primarily driven by higher waste starch stream costs in biofuel and other.

This decrease was partially offset by an increase in net price/mix and volume of specialty wheat proteins and starches.

CASH FLOW, FINANCIAL CONDITION, AND LIQUIDITY

1 unchanged sentence

These sources of cash are used to fund our operating needs, capital expenditures, stockholder dividends, and other discretionary uses.

We continue to monitor market conditions which may create credit and economic challenges that could adversely impact our cash flow from operating activities and cash provided by borrowings.

We continue to monitor market conditions which have created, and may continue to create, credit and economic challenges that could adversely impact our cash flow from operating activities and cash provided by borrowings.

In the past, this has included consumer, distributor, retailer, and supplier inventory destocking, increases in our provision for credit loss, and customer contract non-performance, and we continue to face these risks (see “Operating Activities”).

Our overall liquidity reflects our effective cash management strategy that takes into account liquidity management, economic factors, and tax considerations.

2 unchanged sentences

Generally, during periods when commodity prices are rising, our operations require increased use of cash to support inventory levels.

At March 31, 2026, our current assets exceeded our current liabilities by $321,058, largely due to our inventories, at cost, of $403,107.

At March 31, 2026, our cash balance was $10,357 and we have used our various debt agreements for liquidity purposes, with $464,000 available under our credit agreement for additional borrowings and $234,800 available under the Note Purchase Agreement (see Note 4, Corporate Borrowings).

Under these agreements (including the Credit Agreement amendment and the Note Purchase Agreement amendment we entered into on February 20, 2026), we must meet certain financial covenants and restrictions, and at March 31, 2026, we met those covenants and restrictions.

At June 30, 2026, our current assets exceeded our current liabilities by $458,355, largely due to our inventories, at cost, of $408,416.

At June 30, 2026, our cash balance was $17,794 and we have used our various debt agreements for liquidity purposes, with $338,000 available under our credit agreement for additional borrowings and $236,400 available under the Note Purchase Agreement (see Note 4, Corporate Borrowings).

Under these agreements (including the Credit Agreement amendment and the Note Purchase Agreement amendment we entered into on February 20, 2026), we must meet certain financial covenants and restrictions, and at June 30, 2026, we met those covenants and restrictions.

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

We expect some holders of the Convertible Senior Notes to require the Company to repurchase the Convertible Senior Notes during the fourth quarter of 2026.

We have sufficient availability to repurchase the Convertible Senior Notes under our Credit Agreement, Note purchase Agreement, new financing instruments, or a combination thereof.

We have sufficient availability to repurchase the Convertible Senior Notes that are tendered for repurchase utilizing borrowings under our Credit Agreement, the Note Purchase Agreement, or a combination thereof.

Additionally, in accordance with the terms of the agreement, we paid out the full contingent consideration related to the Penelope acquisition on April 28, 2026.

2 unchanged sentences

Cash Flow Summary

Quarter to Date Ended March 31, Changes, year versus year Increase / (Decrease)

Net cash provided by operating activities $ 6,955 $ 44,684 $ (37,729)

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

Net cash provided by (used in) operating activities $ (40,732) $ 56,357 $ (97,089)

Net cash used in investing activities (8,397) (32,167) 23,770

Net cash used in financing activities (11,084) (30,213) 19,129

Net cash provided by (used in) financing activities 48,618 (33,103) 81,721

Effect of exchange rate changes on cash (155) 960 (1,115)

Decrease in cash and cash equivalents $ (666) $ (7,953) $ 7,287

Cash decreased $8,103 for the quarter ended March 31, 2026, compared to a decrease of $5,161 for the quarter ended March 31, 2025, for a net decrease in cash of $2,942, period versus period.

Cash decreased $666 for the year to date ended June 30, 2026, compared to a decrease of $7,953 for the year to date ended June 30, 2025, for a net decrease in cash of $7,287, period versus period.

Operating Activities.

Cash provided by operating activities for the quarter ended March 31, 2026 was $6,955.

The cash provided by operating activities resulted primarily from net loss of $134,807, adjustments for non-cash or non-operating charges of $143,619, including goodwill and other long-lived assets impairment, depreciation and amortization, and share-based compensation and cash used in operating assets and liabilities of $1,857.

The primary drivers of the changes in operating assets and liabilities were $29,441 of cash provided by decreased accounts receivables, net, due to timing of customer payments and lower sales during the quarter.

This was partially offset by $20,299 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, and $6,792 use of cash related accrued expenses and other primarily related to an incentive compensation payout during the quarter.

Cash provided by operating activities for the quarter ended March 31, 2025 was $44,684.

The cash provided by operating activities resulted primarily from cash provided by operating assets and liabilities of $26,611, adjustments for non-cash or non-operating charges of $21,130, including changes in fair value of contingent consideration, depreciation and amortization, and share-based compensation, partially offset by a net loss of $3,057.

The primary drivers of the changes in operating assets and liabilities were $40,594 of cash provided by decreased accounts receivables, net, due to the timing of customer payments and lower sales during the quarter, this was partially offset by $13,439 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate.

Cash used in operating activities for the year to date ended June 30, 2026 was $40,732.

The cash used in operating activities resulted primarily from net loss of $122,798, adjustments for non-cash or non-operating charges of $102,533, including goodwill and other long-lived assets impairment, a portion of the contingent consideration payment related to the Penelope acquisition and deferred income taxes, and cash used in operating assets and liabilities of $20,467.

The primary drivers of the changes in operating assets and liabilities were $25,631 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, and $7,001 use of cash related to accrued expenses and other primarily related to an incentive compensation payout during the year to date period.

These decreases were partially offset by $12,520 of cash

provided by decreased accounts receivables, net, due to timing of customer payments, lower sales during the quarter, and a provision for credit loss recorded during the quarter.

On July 26, 2026, one of our significant customers filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code.

As a result, we recognized an allowance for credit loss of $2,148 on the Condensed Consolidated Balance Sheet as of June 30, 2026 and in provision for credit loss on the Condensed Consolidated Statements of Income (Loss) for the quarter and year to date ended June 30, 2026.

The allowance for credit loss was recorded within the Branded Spirits segment.

We believe this allowance for credit loss is appropriate and consistent with our accounting policy and assessment of the information currently available.

We evaluate our credit losses periodically and as circumstances warrant which may result in changes to our credit loss allowance.

We are evaluating the impact of the bankruptcy on future sales and cash collections, and the ultimate amount recoverable may differ from current estimates.

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

The cash provided by operating activities resulted primarily from adjustments for non-cash or non-operating charges of $35,419, including changes in fair value of contingent consideration, depreciation and amortization, and share-based compensation, net income of $11,370, and cash provided by operating assets and liabilities of $9,568.

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

This was partially offset by $15,224 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, and $10,687 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.

Investing Activities.

Cash used in investing activities for the quarter ended March 31, 2026 was $3,773, which resulted primarily from additions to property, plant, and equipment of $5,722 (see “Capital Spending”), partially offset by distributions from equity method investments of $1,500.

Cash used in investing activities for the quarter ended March 31, 2025 was $19,926, which resulted from additions to property, plant, and equipment (see “Capital Spending”).

Cash used in investing activities for the year to date ended June 30, 2026 was $8,397, which resulted primarily from additions to property, plant, and equipment of $10,219 (see “Capital Spending”), partially offset by distributions from equity method investments of $1,500.

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”).

Capital Spending.

We manage capital spending to support our business growth plans.

We have incurred $2,003 and $8,094 of capital expenditures and have paid $5,722 and $19,926 for capital expenditures for the years to date ended March 31, 2026 and 2025, respectively.

We have incurred $6,433 and $18,691 of capital expenditures and have paid $10,219 and $32,156 for capital expenditures for the years to date ended June 30, 2026 and 2025, respectively.

The difference between the amount of capital expenditures incurred and amount paid is due to the change in capital expenditures in accounts payable.

1 unchanged sentence

Financing Activities.

Cash used in financing activities for the quarter ended March 31, 2026 was $11,084, due to net payments on debt of $7,600 (see “Long-Term and Short-Term Debt”), payments of dividends and dividend equivalents of $2,598 (see “Dividends and Dividend Equivalents”), and repurchases of Common Stock of $886 (see “Treasury Purchases” and “Share Repurchases”).

Cash used in financing activities for the quarter ended March 31, 2025 was $30,213, due to net payments on debt of $26,600 (see “Long-Term and Short-Term Debt”), payments of dividends and dividend equivalents of $2,578 (see “Dividends and Dividend Equivalents”), and repurchases of Common Stock of $1,035 (see “Treasury Purchases” and “Share Repurchases”).

Cash provided by financing activities for the year to date ended June 30, 2026 was $48,618, due to net proceeds on debt of $116,800 (see “Long-Term and Short-Term Debt”), partially offset by a portion of the contingent consideration payment of $62,100, payments of dividends and dividend equivalents of $5,196 (see “Dividends and Dividend Equivalents”), and repurchases of Common Stock of $886 (see “Treasury Purchases” and “Share Repurchases”).

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 Repurchases”).

Treasury Purchases.

107,631 RSUs vested and converted to shares of Common Stock for employees during the quarter ended March 31, 2026, of which we withheld and purchased for treasury 34,415 shares valued at $886 to cover payment of associated withholding taxes.

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

150,350 RSUs vested and converted to shares of Common Stock for employees during the year to date ended June 30, 2026, of which we withheld and purchased for treasury 34,415 shares valued at $886 to cover payment of associated withholding taxes.

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.

Share Repurchases.

2 unchanged sentences

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 quarter ended March 31, 2026 and 2025 we did not repurchase any shares of Common Stock under the share repurchase program.

As of March 31, 2026, there was approximately $53,412 remaining under the share repurchase program.

During the year to date ended June 30, 2026 and 2025 we did not repurchase any shares of Common Stock under the share repurchase program.

As of June 30, 2026, there was approximately $53,412 remaining under the share repurchase program.

Dividends and Dividend Equivalents

4 unchanged sentences

February 25, 2026 March 13, 2026 March 27, 2026 $ 0.12 $ 0.12 $ 2,564 $ 34 $ 2,598

April 29, 2026 May 15, 2026 May 29, 2026 0.12 0.12 2,565 33 2,598

$ 0.24 $ 0.24 $ 5,129 $ 67 $ 5,196

February 26, 2025 March 14, 2025 March 28, 2025 $ 0.12 $ 0.12 $ 2,553 $ 25 $ 2,578

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

$ 0.24 $ 0.24 $ 5,106 $ 50 $ 5,156

(a) Per share amount.

(b) Dividend equivalent payments on unvested participating securities.

On April 29, 2026, 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 May 29, 2026 to stockholders of record and certain RSU holders as of May 15, 2026.

On July 29, 2026, 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 August 28, 2026 to stockholders of record and certain RSU holders as of August 14, 2026.

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 $244,958 (net of unamortized loan fees of $7,492) at March 31, 2026, and $252,318 (net of unamortized loan fees of $7,732) at December 31, 2025.

We had net payments on debt of $7,600 and $26,600 for quarter ended March 31, 2026 and 2025, respectively.

Total debt was $369,596 (net of unamortized loan fees of $7,254) at June 30, 2026, and $252,318 (net of unamortized loan fees of $7,732) at December 31, 2025.

We had net proceeds on debt of $116,800 and net payment on debt of $24,200 for year to date ended June 30, 2026 and 2025, respectively.

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