MARZETTI CO 10-K

Item 8. Financial Statements and Supplementary Data 30 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of The Marzetti Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The Marzetti Company (formerly Lancaster Colony Corporation) and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended June 30, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 21, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Trade-Related Allowances - Refer to Note 1 in the Financial Statements Critical Audit Matter Description The Company offers various trade-related allowances to their customers, which consist of sales discounts, trade promotions and certain other sales incentives. These are treated as a reduction to accounts receivable and revenue, generally when the related revenue is recognized. Depending on the specific type of trade-related allowance, the Company uses either the expected value or most likely amount method to determine the reduction to accounts receivable and revenue. The Company evaluates the adequacy of these allowances considering several factors including historical experience, specific trade programs and existing customer relationships. We identified the trade-related allowances as a critical audit matter because of the complexity and volume of the Company's activities related to trade-related allowances. This required significant audit effort due to the various types of promotional trade programs and information systems utilized to track and record the promotional activities. 31 Table of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to trade-related allowances included the following, among others: • We evaluated the design and tested the operating effectiveness of relevant controls over the trade-related allowances, including automated controls within relevant systems. • We tested the customer promotional trade programs and related deduction data underlying the trade-related allowances to validate the nature, timing, and amounts accrued as of June 30, 2025. • We tested the completeness of the trade-related allowances by performing a retrospective review of selected customer deductions taken after June 30, 2025 and comparing to the Company’s trade-related allowances recorded. • We analyzed the trade-related allowances journal entry data to confirm our understanding of the expected relationships with revenues and accounts receivable. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Columbus, Ohio August 21, 2025 We have served as the Company’s auditor since 1961. 32 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, (Amounts in thousands, except share data) 2025 2024 ASSETS Current Assets: Cash and equivalents $ 161,476 $ 163,443 Receivables 95,817 95,560 Inventories: Raw materials 42,547 38,212 Finished goods 126,754 135,040 Total inventories 169,301 173,252 Other current assets 17,037 11,738 Total current assets 443,631 443,993 Property, Plant and Equipment: Property, plant and equipment-gross 968,014 877,526 Less accumulated depreciation 433,471 399,830 Property, plant and equipment-net 534,543 477,696 Other Assets: Goodwill 222,772 208,371 Operating lease right-of-use assets 52,227 55,128 Other noncurrent assets 21,551 21,743 Total $ 1,274,724 $ 1,206,931 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 117,962 $ 118,811 Accrued liabilities 68,332 65,158 Total current liabilities 186,294 183,969 Noncurrent Operating Lease Liabilities 42,720 44,557 Other Noncurrent Liabilities 13,100 15,357 Deferred Income Taxes 34,115 37,276 Commitments and Contingencies Shareholders’ Equity: Preferred stock-authorized 3,050,000 shares; outstanding- none Common stock-authorized 75,000,000 shares; outstanding-June 30, 2025- 27,533,599 shares; June 30, 2024- 27,527,090 shares 160,886 153,616 Retained earnings 1,628,487 1,564,642 Accumulated other comprehensive income (loss) 961 ( 8,640 ) Common stock in treasury, at cost ( 791,839 ) ( 783,846 ) Total shareholders’ equity 998,495 925,772 Total $ 1,274,724 $ 1,206,931 See accompanying notes to consolidated financial statements. 33 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Years Ended June 30, (Amounts in thousands, except per share data) 2025 2024 2023 Net Sales $ 1,909,122 $ 1,871,759 $ 1,822,527 Cost of Sales 1,453,476 1,439,457 1,433,959 Gross Profit 455,646 432,302 388,568 Selling, General and Administrative Expenses 230,227 218,065 222,091 Restructuring and Impairment Charges 5,102 14,874 24,969 Operating Income 220,317 199,363 141,508 Pension Settlement Charge ( 13,968 ) — — Other, Net 7,114 6,152 1,789 Income Before Income Taxes 213,463 205,515 143,297 Taxes Based on Income 46,116 46,902 32,011 Net Income $ 167,347 $ 158,613 $ 111,286 Net Income Per Common Share: Basic $ 6.08 $ 5.77 $ 4.04 Diluted $ 6.07 $ 5.76 $ 4.04 Weighted Average Common Shares Outstanding: Basic 27,469 27,440 27,462 Diluted 27,489 27,461 27,482 See accompanying notes to consolidated financial statements. 34 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years Ended June 30, (Amounts in thousands) 2025 2024 2023 Net Income $ 167,347 $ 158,613 $ 111,286 Other Comprehensive Income: Defined Benefit Pension and Postretirement Benefit Plans: Net (loss) gain arising during the period, before tax ( 1,493 ) 554 1,859 Pension settlement charge, before tax 13,968 — — Amortization of loss, before tax 235 573 679 Amortization of prior service credit, before tax ( 181 ) ( 181 ) ( 181 ) Total Other Comprehensive Income, Before Tax 12,529 946 2,357 Tax Attributes of Items in Other Comprehensive Income: Net (loss) gain arising during the period, tax 349 ( 130 ) ( 434 ) Pension settlement charge, tax ( 3,264 ) — — Amortization of loss, tax ( 55 ) ( 133 ) ( 158 ) Amortization of prior service credit, tax 42 42 42 Total Tax Expense ( 2,928 ) ( 221 ) ( 550 ) Other Comprehensive Income, Net of Tax 9,601 725 1,807 Comprehensive Income $ 176,948 $ 159,338 $ 113,093 See accompanying notes to consolidated financial statements. 35 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended June 30, (Amounts in thousands) 2025 2024 2023 Cash Flows From Operating Activities: Net income $ 167,347 $ 158,613 $ 111,286 Adjustments to reconcile net income to net cash provided by operating activities: Impacts of noncash items: Depreciation and amortization 62,168 55,896 51,210 Deferred income taxes and other changes 495 ( 6,546 ) 9,453 Stock-based compensation expense 8,979 11,359 9,082 Restructuring and impairment charges 5,102 13,657 24,969 Gain on sale of property — ( 22 ) ( 209 ) Pension plan activity 14,253 416 ( 4 ) Changes in operating assets and liabilities: Receivables ( 257 ) 19,407 20,529 Inventories 8,016 ( 14,987 ) ( 13,563 ) Other current assets ( 3,332 ) ( 637 ) ( 1,458 ) Accounts payable and accrued liabilities ( 1,275 ) 14,397 14,606 Net cash provided by operating activities 261,496 251,553 225,901 Cash Flows From Investing Activities: Payments for property additions ( 58,000 ) ( 67,576 ) ( 90,181 ) Cash paid for acquisition ( 78,819 ) — — Proceeds from sale of property — 6,969 1,212 Other-net ( 11,387 ) ( 6,826 ) ( 1,813 ) Net cash used in investing activities ( 148,206 ) ( 67,433 ) ( 90,782 ) Cash Flows From Financing Activities: Payment of dividends ( 103,502 ) ( 97,934 ) ( 92,368 ) Purchase of treasury stock ( 7,993 ) ( 7,645 ) ( 9,201 ) Tax withholdings for stock-based compensation ( 1,709 ) ( 1,613 ) ( 3,026 ) Principal payments for finance leases ( 2,053 ) ( 1,958 ) ( 2,334 ) Net cash used in financing activities ( 115,257 ) ( 109,150 ) ( 106,929 ) Net change in cash and equivalents ( 1,967 ) 74,970 28,190 Cash and equivalents at beginning of year 163,443 88,473 60,283 Cash and equivalents at end of year $ 161,476 $ 163,443 $ 88,473 See accompanying notes to consolidated financial statements. 36 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Amounts in thousands, except per share data) Common Stock Outstanding Retained Earnings Accumulated Other Comprehensive (Loss) Income Treasury Stock Total Shareholders’ Equity Shares Amount Balance, June 30, 2022 27,520 $ 137,814 $ 1,485,045 $ ( 11,172 ) $ ( 767,000 ) $ 844,687 Net income 111,286 111,286 Net pension and postretirement benefit gains, net of $ 550 tax effect 1,807 1,807 Cash dividends - common stock ($ 3.35 per share) ( 92,368 ) ( 92,368 ) Purchase of treasury stock ( 48 ) ( 9,201 ) ( 9,201 ) Stock-based plans 56 ( 3,026 ) ( 3,026 ) Stock-based compensation expense 9,082 9,082 Balance, June 30, 2023 27,528 143,870 1,503,963 ( 9,365 ) ( 776,201 ) 862,267 Net income 158,613 158,613 Net pension and postretirement benefit gains, net of $ 221 tax effect 725 725 Cash dividends - common stock ($ 3.55 per share) ( 97,934 ) ( 97,934 ) Purchase of treasury stock ( 45 ) ( 7,645 ) ( 7,645 ) Stock-based plans 44 ( 1,613 ) ( 1,613 ) Stock-based compensation expense 11,359 11,359 Balance, June 30, 2024 27,527 153,616 1,564,642 ( 8,640 ) ( 783,846 ) 925,772 Net income 167,347 167,347 Pension settlement charge, net of $ 3,264 tax effect 10,704 10,704 Other net pension and postretirement benefit losses, net of $( 336 ) tax effect ( 1,103 ) ( 1,103 ) Cash dividends - common stock ($ 3.75 per share) ( 103,502 ) ( 103,502 ) Purchase of treasury stock ( 48 ) ( 7,993 ) ( 7,993 ) Stock-based plans 55 ( 1,709 ) ( 1,709 ) Stock-based compensation expense 8,979 8,979 Balance, June 30, 2025 27,534 $ 160,886 $ 1,628,487 $ 961 $ ( 791,839 ) $ 998,495 See accompanying notes to consolidated financial statements. 37 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Note 1 – Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of The Marzetti Company and our wholly-owned subsidiaries, collectively referred to as “we,” “us,” “our,” “registrant,” or the “Company.” Intercompany transactions and accounts have been eliminated in consolidation. Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, references to “year” pertain to our fiscal year; for example, 2025 refers to fiscal 2025, which is the period from July 1, 2024 to June 30, 2025. Subsequent Event On July 8, 2025, we entered into a new lease agreement with an initial term of 15 years for warehousing space in Columbus, Ohio with fixed cash payments totaling approximately $ 159 million. A right-of-use asset and lease liability will be recorded based on the present value of the lease payments when the lease commences in fiscal 2027. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires that we make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates included in these consolidated financial statements include allowances for customer deductions, net realizable value of inventories, useful lives for the calculation of depreciation and amortization, distribution accruals, pension and postretirement assumptions and self-insurance accruals. Actual results could differ from these estimates. Fair Value Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. GAAP sets forth a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels are as follows: Level 1 – defined as observable inputs, such as quoted market prices in active markets. Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 – defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. Our financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and equivalents, accounts receivable, accounts payable and defined benefit pension plan assets. The estimated fair value of cash and equivalents, accounts receivable and accounts payable approximates their carrying value. See Note 11 for fair value disclosures related to our defined benefit pension plan assets. Impairment charges for property, plant and equipment and intangible assets resulted from nonrecurring fair value measurements. See further discussion in Note 1. Cash and Equivalents We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The carrying amounts of our cash and equivalents approximate fair value due to their short maturities and are considered level 1 investments, which have quoted market prices in active markets for identical assets. As a result of our cash management system, checks issued but not presented to the banks for payment may create negative book cash balances. When such negative balances exist, they are included in Accrued Liabilities. Receivable Allowances Our receivables balance is net of trade-related allowances, which consist of sales discounts, trade promotions and certain other sales incentives. We evaluate the adequacy of these allowances considering several factors including historical experience, specific trade programs and existing customer relationships. These allowances can fluctuate based on the level of sales and promotional programs as well as the timing of deductions. 38 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) We also provide an allowance for doubtful accounts based on our estimate of expected credit losses, which considers the aging of accounts receivable balances, historical write-off experience and on-going reviews of our trade receivables. Measurement of expected credit losses requires credit review of existing customer relationships, consideration of historical loss experience, including the need to adjust for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates and the economic health of customers. Our allowance for doubtful accounts was immaterial for all periods presented. Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and equivalents and trade accounts receivable. By policy, we limit the amount of credit exposure to any one institution or issuer. We maintain our cash and equivalents with high credit-quality financial institutions. Deposits with these financial institutions may exceed the amounts insured by the Federal Deposit Insurance Corporation. The majority of our excess cash is invested in AAA-rated money market funds that primarily invest in U.S. government securities. Our concentration of credit risk with respect to trade accounts receivable is mitigated by our credit evaluation process and our broad Retail and Foodservice customer base. However, our accounts receivable balance attributable to Walmart Inc. (“Walmart”) as a percentage of consolidated accounts receivable was 32 % at June 30, 2025. No other customer accounted for more than 10% of our consolidated accounts receivable at June 30, 2025. Inventories Inventories are valued at the lower of cost or net realizable value and are costed by various methods that approximate actual cost on a first-in, first-out basis. Due to the nature of our business, work in process inventory is not a material component of inventory. When necessary, we provide allowances to adjust the carrying value of our inventory to the lower of cost or net realizable value, including any costs to sell or dispose. The determination of whether inventory items are slow moving, obsolete or in excess of needs requires estimates about the future demand for our products. The estimates as to future demand used in the valuation of inventory are subject to the ongoing success of our products and may differ from actual due to factors such as changes in customer and consumer demand. Property, Plant and Equipment Property, plant and equipment are recorded at cost, except for those acquired as part of a business combination, which are recorded at fair value at the time of purchase. We use the straight-line method of computing depreciation for financial reporting purposes based on the estimated useful lives of the corresponding assets. Estimated useful lives for buildings and improvements range generally from 10 to 40 years, machinery and equipment, excluding technology-related equipment, range generally from 3 to 15 years and technology-related equipment range generally from 3 to 5 years. For tax purposes, we generally compute depreciation using accelerated methods. The following table summarizes the components of gross property, plant and equipment at June 30: 2025 2024 Land, buildings and improvements $ 347,491 $ 297,907 Machinery and equipment 579,642 536,938 Construction in progress 40,881 42,681 Property, plant and equipment-gross $ 968,014 $ 877,526 Purchases of property, plant and equipment included in Accounts Payable and excluded from the property additions and the change in accounts payable in the Consolidated Statements of Cash Flows at June 30 were as follows: 2025 2024 2023 Construction in progress in Accounts Payable $ 7,220 $ 5,799 $ 8,714 The following table sets forth depreciation expense, including finance lease amortization, in each of the years ended June 30: 2025 2024 2023 Depreciation expense $ 59,078 $ 53,029 $ 46,405 39 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) In 2025, we recorded an impairment charge of $ 1.9 million for certain property, plant and equipment related to our sauce and dressing manufacturing facility located in Milpitas, California. This charge resulted from our plan to close this facility, which triggered impairment testing, and represents the excess of the carrying value over the fair value. The fair value was based on estimated selling prices for the real estate and manufacturing equipment, which represents a Level 3 measurement within the fair value hierarchy. The impairment charge was reflected in Restructuring and Impairment Charges and was not allocated to our two reportable segments due to its unusual nature. In 2024, we recorded an impairment charge of $ 9.0 million for certain property, plant and equipment related to Angelic Bakehouse (“Angelic”) and Flatout. This charge resulted from our decision to exit our perimeter-of-the-store bakery product lines, which triggered impairment testing, and represents the excess of the carrying value over the fair value. The fair value was based on actual selling prices for the real estate and manufacturing equipment at the Angelic sprouted grain bakery facility in Cudahy, Wisconsin and the Flatout flatbread facility in Saline, Michigan, which represents a Level 2 measurement within the fair value hierarchy. The impairment charge was reflected in Restructuring and Impairment Charges and was not allocated to our two reportable segments due to its unusual nature. Deferred Software Costs We capitalize certain costs related to hosting arrangements that are service contracts (cloud computing arrangements). Capitalized costs are included in Other Current Assets or Other Noncurrent Assets and are amortized on a straight-line basis over the estimated useful life. In 2025 and 2024, we capitalized $ 0.6 million and $ 1.0 million, respectively, of deferred software costs related to cloud computing arrangements. Long-Lived Assets We monitor the recoverability of the carrying value of our long-lived assets by periodically considering whether indicators of impairment are present. If such indicators are present, we determine if the assets are recoverable by comparing the sum of the undiscounted future cash flows to the assets’ carrying amounts. Our cash flows are based on historical results adjusted to reflect our best estimate of future market and operating conditions. If the carrying amounts are greater, then the assets are not recoverable. In that instance, we compare the carrying amounts to the fair value to determine the amount of the impairment to be recorded. Goodwill and Other Intangible Assets Goodwill is not amortized. It is evaluated annually at April 30, or when events or circumstances indicate potential recoverability concerns, by applying impairment testing procedures. See further discussion regarding goodwill in Note 6. Other intangible assets, which had a zero balance at June 30, 2025 and 2024, were amortized on a straight-line basis over their estimated useful lives to Selling, General and Administrative Expenses. Amortization expense for our other intangible assets was $ 0.4 million and $ 2.5 million in 2024 and 2023, respectively. We monitored the recoverability of the carrying value of our other intangible assets similar to our long-lived assets discussed above. Carrying amounts were adjusted appropriately when determined to have been impaired. In 2024, we recorded an impairment charge of $ 4.5 million to write off the net carrying value of the intangible assets related to Angelic and Flatout based on our decision to exit our perimeter-of-the-store bakery product lines. The impairment charge was reflected in Restructuring and Impairment Charges and was not allocated to our two reportable segments due to its unusual nature. In 2023, we recorded impairment charges of $ 25.0 million related to Flatout’s intangible assets due to our lowered expectations for the projected sales and profitability of the Flatout product lines. The tradename, customer relationships and technology / know-how intangible assets were written down to their fair values. These impairment charges were reflected in Restructuring and Impairment Charges and were recorded in our Retail segment. The impairment charges discussed above represent the excess of the carrying value over the fair value of estimated discounted cash flows specific to the remaining useful lives of the related intangible assets. As the fair value measurements were based on significant inputs not observable in the market, they represented Level 3 measurements within the fair value hierarchy. Leases We record right-of-use assets and lease liabilities based on the present value of the lease payments for operating leases and finance leases with an initial term in excess of 12 months. We made an accounting policy election to exclude short-term leases from our Consolidated Balance Sheets. 40 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) In evaluating our contracts to determine whether a contract is or contains a lease, we consider the following: • Whether explicitly or implicitly identified assets have been deployed in the contract; and • Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract. In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we use judgment and consistent application of assumptions to reasonably allocate the consideration. For leases containing options to extend or terminate, we determine whether the extension or termination should be considered reasonably certain to be exercised. The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We use a discount rate to calculate the present value of lease liabilities. In the development of the discount rate, we consider our internal borrowing rate, treasury security rates, collateral and credit risk specific to us, and our lease portfolio characteristics. Accrued Distribution We incur various freight and other related costs associated with shipping products to our customers and warehouses. We provide accruals for unbilled shipments from carriers utilizing historical or projected freight rates and other relevant information. Accruals for Self-Insurance Self-insurance accruals are made for certain claims associated with employee health care, workers’ compensation and general liability insurance up to stop-loss coverage. These accruals include estimates that are primarily based on historical loss development factors. Shareholders’ Equity We are authorized to issue 3,050,000 shares of preferred stock consisting of 750,000 shares of Class A Participating Preferred Stock with $ 1.00 par value, 1,150,000 shares of Class B Voting Preferred Stock with no par value and 1,150,000 shares of Class C Nonvoting Preferred Stock with no par value. Our Board of Directors approved a share repurchase authorization of 2,000,000 common shares in November 2010. At June 30, 2025, 1,083,830 common shares remained authorized for future purchase. Revenue Recognition When Performance Obligations Are Satisfied A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The singular performance obligation of our customer contracts is determined by each individual purchase order and the respective food products ordered, with revenue being recognized at a point-in-time when the obligation under the terms of the agreement is satisfied and product control is transferred to our customer. Specifically, control transfers to our customers when the product is delivered to or picked up by our customers based upon applicable shipping terms, as our customers can direct the use and obtain substantially all of the remaining benefits from the asset at this point in time. The performance obligations in our customer contracts are generally satisfied within 30 days. As such, we have not disclosed the transaction price allocated to remaining performance obligations as of June 30, 2025. Significant Payment Terms In general, within our customer contracts, the purchase order identifies the product, quantity, price, pick-up allowances, payment terms and final delivery terms. Payment terms usually include early pay discounts. We grant payment terms consistent with industry standards. Although some payment terms may be more extended, presently the majority of our payment terms are less than 60 days. As a result, we have used the available practical expedient and, consequently, do not adjust our revenues for the effects of a significant financing component. Distribution Distribution fees billed to customers are included in Net Sales. All distribution costs associated with outbound freight are accounted for as fulfillment costs and are included in Cost of Sales; this includes distribution costs incurred after control over a product has transferred to a customer, as we have chosen to use the available practical expedient to account for these costs within our cost of sales. 41 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Variable Consideration In addition to fixed contract consideration, our contracts include some form of variable consideration, including sales discounts, returns, trade promotions and certain other sales and consumer incentives, including rebates and coupon redemptions. In general, variable consideration is treated as a reduction in revenue when the related revenue is recognized. Depending on the specific type of variable consideration, we use either the expected value or most likely amount method to determine the variable consideration. We believe there will be no significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. We review and update our estimates and related accruals of variable consideration each period based on historical experience and any recent changes in the market. Warranties & Returns We provide all customers with a standard or assurance type warranty. Either stated or implied, we provide assurance the related products will comply with all agreed-upon specifications and other warranties provided under the law. No services beyond an assurance warranty are provided to our customers. We do not grant a general right of return. However, customers may return defective or non-conforming products. Customer remedies may include either a cash refund or an exchange of the product. As a result, the right of return and related refund liability is estimated and recorded as a reduction in revenue. This return estimate is reviewed and updated each period and is based on historical sales and return experience. Contract Balances We do not have deferred revenue or unbilled receivable balances and thus do not have any related contract asset and liability balances as of June 30, 2025. Contract Costs We have identified sales commissions as an incremental cost incurred to obtain a customer contract. These costs are required to be capitalized under the new revenue recognition standard. We have chosen to use the available practical expedient to continue to expense these costs as incurred as the amortization period for such costs is one year or less. We do not incur significant fulfillment costs related to customer contracts which would require capitalization. Disaggregation of Revenue See Note 9 for disaggregation of our net sales by class of similar product and type of customer. Advertising Expense We expense advertising as it is incurred. The following table summarizes advertising expense as a percentage of net sales in each of the years ended June 30: 2025 2024 2023 Advertising expense as a percentage of net sales 2 % 2 % 1 % Research and Development Costs We expense research and development costs as they are incurred. The estimated amount spent during each of the last three years on research and development activities was less than 1 % of net sales. Stock-Based Employee Compensation Plans We account for our stock-based employee compensation plans in accordance with GAAP for stock-based compensation, which requires the measurement and recognition of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost of the employee services is recognized as compensation expense over the period that an employee provides service in exchange for the award, which is typically the vesting period. See further discussion and disclosure in Note 10. Income Taxes Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in numerous domestic jurisdictions. 42 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Our annual effective tax rate is determined based on our income, statutory tax rates and the permanent tax impacts of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. A change in tax rates may result in stranded tax effects when the effect of the change is required to be included in income even when the related income tax effects of items in accumulated other comprehensive income/loss were originally recognized in other comprehensive income rather than in income. Our accounting policy is to release stranded tax effects from accumulated other comprehensive loss. Realization of certain deferred tax assets is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Although realization is not assured, management believes it is more likely than not that our deferred tax assets will be realized and thus we have not recorded any valuation allowance for the years ended June 30, 2025 or 2024. In accordance with accounting literature related to uncertainty in income taxes, tax benefits and liabilities from uncertain tax positions that are recognized in the financial statements are measured based on the largest attribute that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on our results of operations, cash flows or financial position. See further discussion in Note 8. Earnings Per Share Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock, stock-settled stock appreciation rights and performance units) outstanding during each period. Unvested shares of restricted stock granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock, stock-settled stock appreciation rights and performance units. Basic and diluted net income per common share were calculated as follows: 2025 2024 2023 Net income $ 167,347 $ 158,613 $ 111,286 Net income available to participating securities ( 455 ) ( 413 ) ( 257 ) Net income available to common shareholders $ 166,892 $ 158,200 $ 111,029 Weighted average common shares outstanding - basic 27,469 27,440 27,462 Incremental share effect from: Nonparticipating restricted stock 3 2 2 Stock-settled stock appreciation rights (1) 1 6 15 Performance units 16 13 3 Weighted average common shares outstanding - diluted 27,489 27,461 27,482 Net income per common share - basic $ 6.08 $ 5.77 $ 4.04 Net income per common share - diluted $ 6.07 $ 5.76 $ 4.04 (1) Excludes the impact of 0.1 million weighted average stock-settled stock appreciation rights outstanding in 2023 because their effect was antidilutive. 43 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Comprehensive Income and Accumulated Other Comprehensive Income (Loss) Comprehensive income includes changes in equity that result from transactions and economic events from non-owner sources. Comprehensive income is composed of two subsets – net income and other comprehensive income (loss). Included in other comprehensive income (loss) are pension and postretirement benefits adjustments. The following table presents the amounts reclassified out of accumulated other comprehensive income (loss) by component: 2025 2024 Accumulated other comprehensive loss at beginning of year $ ( 8,640 ) $ ( 9,365 ) Defined Benefit Pension Plan Items: Net (loss) gain arising during the period ( 1,549 ) 500 Settlement charge (1) 13,968 — Amortization of unrecognized net loss (1) 294 633 Postretirement Benefit Plan Items: (2) Net gain arising during the period 56 54 Amortization of unrecognized net gain ( 59 ) ( 60 ) Amortization of prior service credit ( 181 ) ( 181 ) Total other comprehensive income, before tax 12,529 946 Total tax expense ( 2,928 ) ( 221 ) Other comprehensive income, net of tax 9,601 725 Accumulated other comprehensive income (loss) at end of year $ 961 $ ( 8,640 ) (1) Included in the computation of net periodic benefit income/cost. See Note 11 for additional information. (2) Additional disclosures for postretirement benefits are not included as they are not considered material. Recent Accounting Standards In November 2023, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to the disclosure requirements for reportable segments. The new guidance requires enhanced disclosures about significant segment expenses. Additionally, all current annual disclosures about a reportable segment’s profit or loss and assets will also be required in interim periods. The new guidance also requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”) and explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We adopted this guidance for our annual disclosures in fiscal 2025, and this guidance will be effective for our interim-period disclosures in fiscal 2026. As the guidance only relates to disclosures, there was no impact on our financial position or results of operations. See segment disclosures in Note 9. In December 2023, the FASB issued new accounting guidance related to the disclosure requirements for income taxes. The new guidance requires annual disclosures in the rate reconciliation table to be presented using both percentages and reporting currency amounts, and this table must include disclosure of specific categories. Additional information will also be required for reconciling items that meet a quantitative threshold. The new guidance also requires enhanced disclosures of income taxes paid, including the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions that exceed a quantitative threshold. The amendments should be applied on a prospective basis, but retrospective application is permitted. This guidance will be effective for our annual disclosures in fiscal 2026. As the guidance only relates to disclosures, there will be no impact on our financial position or results of operations. In November 2024, the FASB issued new accounting guidance requiring disclosure of disaggregated income statement expenses. For each relevant expense caption presented on the face of the income statement, the following expense components must be presented in a tabular format within the notes to the financial statements at each interim and annual reporting period: purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion expense. Certain amounts already required to be disclosed under current GAAP requirements must also be presented in the same disclosure as the new disaggregation requirements. The new guidance also requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. Additionally, the total amount of selling expenses must be disclosed, and, in annual reporting periods, our definition of selling expenses must also be provided. 44 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. This guidance will be effective for our annual disclosures in fiscal 2028 and for our interim-period disclosures in fiscal 2029. As the guidance only relates to disclosures, there will be no impact on our financial position or results of operations. Note 2 – Acquisition On February 18, 2025, we completed the acquisition of a sauce and dressing production facility and related real estate in the Atlanta, Georgia area (“Atlanta plant”) along with certain equipment and assets contained in the facility from Winland Foods, Inc. This facility will benefit our core sauce and dressing operations through improved operational efficiency, incremental capacity, and closer proximity to certain core customers while enhancing our manufacturing network from a business continuity standpoint. The purchase price of $ 78.8 million, which included inventory adjustments and is subject to future post-closing adjustments, was funded with cash on hand. The results of operations for this facility have been included in our condensed consolidated financial statements from the date of acquisition. This acquisition is not significant to our financial position or results of operations. The following table summarizes the preliminary purchase price allocation based on the fair value of the net assets acquired. Preliminary Purchase Price Allocation Inventories $ 4,065 Property, plant and equipment 60,073 Goodwill (tax deductible) 14,401 Other noncurrent assets 301 Current liabilities ( 21 ) Net assets acquired $ 78,819 Further adjustments may occur to the allocation above as certain aspects of the transaction, most notably final inventory adjustments, are finalized during the measurement period. The goodwill recognized above arose because the purchase price for the Atlanta plant reflected a number of factors, including the production capabilities of the facility and the potential to expand production in the future. Goodwill also resulted from the workforce acquired. As this facility is expected to primarily produce products for our Foodservice segment, all goodwill from this acquisition was recorded to the Foodservice segment. We did not identify any intangible assets apart from goodwill. Pro forma results of operations have not been presented herein as the acquisition was not material to our results of operations. Note 3 – Long-Term Debt At June 30, 2025 and 2024, we had an unsecured credit facility (“Facility”) under which we could borrow, on a revolving credit basis, up to a maximum of $ 150 million at any one time, with potential to expand the total credit availability to $ 225 million based on consent of the issuing banks and certain other conditions. The Facility expires on March 6, 2029 , and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to SOFR or an alternate base rate defined in the Facility. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt. The Facility contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires us to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires us to maintain a consolidated leverage ratio not greater than 3.5 to 1, subject to certain exceptions. The interest coverage ratio is calculated by dividing Consolidated EBIT by Consolidated Interest Expense, and the leverage ratio is calculated by dividing Consolidated Net Debt by Consolidated EBITDA. All financial terms used in the covenant calculations are defined more specifically in the Facility. At June 30, 2025 and 2024, we had no borrowings outstanding under the Facility. At June 30, 2025 and 2024, we had $ 2.6 million and $ 2.2 million, respectively, of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. We paid no interest in 2025 and 2024. 45 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Note 4 – Leases We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate for some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 year to 9 years. We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. These leases are generally for manufacturing and non-manufacturing equipment used in our business and warehouse facilities. The remaining lease terms for these finance leases range from 1 year to 9 years. As of June 30, 2025 and 2024, the weighted-average discount rate of our operating leases was 5.1 % and 4.9 %, respectively. As of June 30, 2025 and 2024, the weighted-average discount rate of our finance leases was 4.5 % and 2.5 %, respectively. The components of lease expense in each of the years ended June 30 have been provided as follows: 2025 2024 2023 Operating lease cost in Cost of Sales and Selling, General and Administrative Expenses $ 14,222 $ 10,004 $ 9,702 Finance lease cost: Amortization of assets in Cost of Sales and Selling, General and Administrative Expenses $ 2,156 $ 2,056 $ 2,228 Interest on lease liabilities in Other, Net 78 66 97 Total finance lease cost $ 2,234 $ 2,122 $ 2,325 Short-term lease cost in Cost of Sales and Selling, General and Administrative Expenses 3,526 5,653 4,362 Total net lease cost $ 19,982 $ 17,779 $ 16,389 Supplemental balance sheet information related to leases at June 30 is as follows: 2025 2024 Operating Leases Operating Lease Right-Of-Use Assets $ 52,227 $ 55,128 Current operating lease liabilities in Accrued Liabilities $ 11,255 $ 10,335 Noncurrent Operating Lease Liabilities 42,720 44,557 Total operating lease liabilities $ 53,975 $ 54,892 Finance Leases Finance lease right-of-use assets in Property, Plant and Equipment-Net $ 1,560 $ 2,861 Current finance lease liabilities in Accrued Liabilities $ 463 $ 1,993 Noncurrent finance lease liabilities in Other Noncurrent Liabilities 1,115 782 Total finance lease liabilities $ 1,578 $ 2,775 46 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Supplemental cash flow information related to leases in each of the years ended June 30 is as follows: 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,532 $ 10,199 $ 9,848 Operating cash flows from finance leases $ 78 $ 66 $ 97 Financing cash flows from finance leases $ 2,053 $ 1,958 $ 2,334 Supplemental noncash information on operating lease liabilities arising from obtaining right-of-use assets $ 10,102 $ 38,318 $ 5,698 Supplemental noncash information on finance lease liabilities arising from obtaining right-of-use assets $ 854 $ 534 $ — As of June 30, 2025, the maturities of lease liabilities were as follows: Operating Leases Finance Leases 2026 $ 13,747 $ 524 2027 10,303 217 2028 7,099 217 2029 6,861 217 2030 5,713 188 Thereafter 21,028 479 Total minimum payments $ 64,751 $ 1,842 Less amount representing interest ( 10,776 ) ( 264 ) Present value of lease obligations $ 53,975 $ 1,578 As of June 30, 2025 and 2024, the weighted-average remaining term of our operating leases was 6.7 years and 7.1 years, respectively. As of June 30, 2025 and 2024, the weighted-average remaining term of our finance leases was 6.1 years and 2.7 years, respectively. Note 5 – Commitments and Contingencies At June 30, 2025, we were a party to various claims and litigation matters arising in the ordinary course of business. Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition is not expected to have a material effect on our consolidated financial statements. 18 % of our employees are represented under various ongoing collective bargaining contracts. The labor contract for our Vineland, New Jersey plant facility, which produces frozen bread products, will expire on December 31, 2025. 5 % of our employees are represented under this collective bargaining contract. There is also a labor contract for our Milpitas, California plant facility, which is expected to close in the quarter ending September 30, 2025. None of our other collective bargaining contracts will expire within one year. Note 6 – Goodwill Goodwill attributable to the Retail and Foodservice segments was $ 157.4 million and $ 65.4 million, respectively, at June 30, 2025 compared to $ 157.4 million and $ 51.0 million, respectively, at June 30, 2024. The increase in goodwill is the result of the Atlanta plant acquisition in February 2025. See further discussion in Note 2. The following table is a rollforward of goodwill by reportable segment from June 30, 2024 to June 30, 2025: Retail Foodservice Total Goodwill at beginning of year $ 157,396 $ 50,975 $ 208,371 Goodwill acquired during the year — 14,401 14,401 Goodwill at end of year $ 157,396 $ 65,376 $ 222,772 47 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Note 7 – Liabilities Accrued liabilities at June 30 were composed of: 2025 2024 Compensation and employee benefits $ 33,753 $ 31,569 Operating leases 11,255 10,335 Royalties 8,469 7,524 Distribution 6,192 7,116 Other taxes 4,250 2,868 Finance leases 463 1,993 Other 3,950 3,753 Total accrued liabilities $ 68,332 $ 65,158 Other noncurrent liabilities at June 30 were composed of: 2025 2024 Deferred compensation and accrued interest $ 4,607 $ 4,501 Workers compensation 4,330 6,681 Finance leases 1,115 782 Gross tax contingency reserve 747 802 Postretirement benefit liability 554 576 Pension benefit liability — 345 Other 1,747 1,670 Total other noncurrent liabilities $ 13,100 $ 15,357 Note 8 – Income Taxes We file a consolidated federal income tax return. Taxes based on income for the years ended June 30 have been provided as follows: 2025 2024 2023 Currently payable: Federal $ 48,714 $ 51,687 $ 20,147 State and local 3,491 5,485 3,978 Total current provision 52,205 57,172 24,125 Deferred federal, state and local (benefit) provision ( 6,089 ) ( 10,270 ) 7,886 Total taxes based on income $ 46,116 $ 46,902 $ 32,011 For the years ended June 30, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors: 2025 2024 2023 Statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes 1.1 1.9 2.4 Research and development tax credit ( 1.1 ) ( 0.7 ) ( 1.1 ) Net windfall tax benefits - stock-based compensation ( 0.1 ) — ( 0.4 ) Other 0.7 0.6 0.4 Effective rate 21.6 % 22.8 % 22.3 % 48 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Our net deferred tax liability for all periods presented has been classified as noncurrent. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of: 2025 2024 Deferred tax assets: Section 174 research and development capitalization $ 15,172 $ 11,910 Operating lease liabilities 11,820 12,245 Employee medical and other benefits 8,352 8,431 Receivables 5,086 4,202 Inventories 2,340 3,688 Intangible assets 1,932 2,185 Other accrued liabilities 960 1,161 Total deferred tax assets 45,662 43,822 Deferred tax liabilities: Property, plant and equipment ( 47,536 ) ( 49,053 ) Goodwill ( 20,650 ) ( 19,571 ) Operating lease right-of-use assets ( 11,591 ) ( 12,474 ) Total deferred tax liabilities ( 79,777 ) ( 81,098 ) Net deferred tax liability $ ( 34,115 ) $ ( 37,276 ) Prepaid federal income taxes of $ 0.1 million and $ 0.8 million were included in Other Current Assets at June 30, 2025 and 2024, respectively. Prepaid state and local income taxes of $ 0.6 million were included in Other Current Assets at June 30, 2025. Accrued state and local income taxes of $ 0.3 million were included in Accrued Liabilities at June 30, 2024. Net cash payments for income taxes for each of the years ended June 30 were as follows: 2025 2024 2023 Net cash payments for income taxes $ 52,515 $ 53,583 $ 26,327 The gross tax contingency reserve at June 30, 2025 was $ 0.7 million and consisted of estimated tax liabilities of $ 0.2 million and interest and penalties of $ 0.5 million. The unrecognized tax benefits recorded as the gross tax contingency reserve noted in the following table for June 30, 2025 and 2024 would affect our effective tax rate, if recognized. The following table sets forth changes in our total gross tax contingency reserve (including interest and penalties): 2025 2024 Balance, beginning of year $ 802 $ 858 Tax positions related to the current year: Additions — — Reductions — — Tax positions related to prior years: Additions 30 34 Reductions ( 85 ) ( 90 ) Settlements — — Balance, end of year $ 747 $ 802 We have not classified any of the gross tax contingency reserve at June 30, 2025 in Accrued Liabilities as none of these amounts are expected to be resolved within the next 12 months. Consequently, the entire liability of $ 0.7 million was included in Other Noncurrent Liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to have a significant effect on our financial position or results of operations. 49 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) We recognize interest and penalties related to these tax liabilities in income tax expense. For each of the years ended June 30, we recognized the change in the accrual for net tax-related interest and penalties as follows: 2025 2024 Benefit recognized for net tax-related interest and penalties $ ( 11 ) $ ( 10 ) We had accrued interest and penalties at June 30 as follows: 2025 2024 Accrued interest and penalties included in the gross tax contingency reserve $ 473 $ 484 We file federal and various state and local income tax returns in the United States. With limited exceptions, we are no longer subject to examination of U.S. federal or state and local income taxes for years prior to 2022. Note 9 – Business Segment Information Our financial results are presented as two reportable segments: Retail and Foodservice. Costs that are directly attributable to either Retail or Foodservice are charged directly to the appropriate segment. Costs that are deemed to be indirect, excluding corporate expenses and other unusual significant transactions, are allocated to the two reportable segments using a reasonable methodology that is consistently applied. Retail - The vast majority of the products we sell in the Retail segment are sold through sales personnel, food brokers and distributors in the United States. We have products typically marketed in the shelf-stable section of the grocery store, which include licensed sauces and dressings, along with our own branded salad dressings and croutons. Within the frozen food section of the grocery store, we sell yeast rolls and garlic breads. We also have placement of products in grocery produce departments through our refrigerated salad dressings, licensed dressings, vegetable dips and fruit dips. Foodservice - The vast majority of the products we sell in the Foodservice segment are sold through sales personnel, food brokers and distributors in the United States. Most of the products we sell in the Foodservice segment are custom-formulated sauces, salad dressings, frozen breads and yeast rolls. The majority of our Foodservice sales are products sold under private label to national chain restaurant accounts. We also manufacture and sell various branded Foodservice products to distributors. Finally, within this segment, for a period of up to twelve months commencing in March 2025, we are manufacturing and selling certain salad dressing and sauce products under a temporary supply agreement (“TSA”) resulting from the Atlanta plant acquisition. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. Our CODM evaluates segment performance based on net sales and operating income. On a monthly basis, our CODM reviews results in comparison to the annual operating plan (“AOP”), the latest forecast and prior-year results. Resource allocation decisions are primarily made through the forecasting process, including development of the AOP. As many of our products are similar between our two segments, our procurement, manufacturing, warehousing and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity. Consequently, we do not prepare, and our CODM does not review, separate balance sheets or property additions for the reportable segments. As such, our external reporting does not include the presentation of identifiable assets or depreciation and amortization separately by reportable segment. 50 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) The following table sets forth net sales disaggregated by class of similar products for the Retail and Foodservice segments in each of the years ended June 30: 2025 2024 2023 Retail Shelf-stable dressings, sauces and croutons $ 431,197 $ 424,605 $ 422,646 Frozen breads 380,601 351,063 343,450 Refrigerated dressings, dips and other 191,611 212,756 199,274 Total Retail net sales $ 1,003,409 $ 988,424 $ 965,370 Foodservice Dressings and sauces $ 664,013 $ 660,460 $ 642,153 Frozen breads and other 227,463 222,875 215,004 Other dressings and sauces for TSA 14,237 — — Total Foodservice net sales $ 905,713 $ 883,335 $ 857,157 Total net sales $ 1,909,122 $ 1,871,759 $ 1,822,527 The following table provides an additional disaggregation of Foodservice net sales by type of customer in each of the years ended June 30: 2025 2024 2023 Foodservice National accounts $ 693,583 $ 692,340 $ 676,665 Branded and other 197,893 190,995 180,492 Other dressings and sauces for TSA 14,237 — — Total Foodservice net sales $ 905,713 $ 883,335 $ 857,157 The following tables provide financial information attributable to our reportable segments, including significant segment expenses, as well as certain amounts not allocated among our reportable segments. Net sales are predominately domestic. All intercompany transactions have been eliminated. Nonallocated corporate expenses include various expenses of a general corporate nature, costs related to certain divested or closed nonfood operations, and expenditures in 2024 and 2023 for Project Ascent. For The Year Ended June 30, 2025 Retail Foodservice Total Net Sales $ 1,003,409 $ 905,713 $ 1,909,122 Cost of Sales 700,254 753,222 Selling, General and Administrative Expenses 91,460 40,912 Total Segment Operating Income $ 211,695 $ 111,579 $ 323,274 Nonallocated Corporate Expenses 97,855 Nonallocated Restructuring and Impairment Charges (1) 5,102 Operating Income $ 220,317 Pension Settlement Charge ( 13,968 ) Other, Net 7,114 Income Before Income Taxes $ 213,463 (1) Nonallocated restructuring and impairment charges in 2025 resulted from our decision to close our Milpitas, California sauce and dressing manufacturing facility, as well as our decision to transition our internal transportation fleet operation to an external dedicated carrier. 51 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) For The Year Ended June 30, 2024 Retail Foodservice Total Net Sales $ 988,424 $ 883,335 $ 1,871,759 Cost of Sales 690,247 749,210 Selling, General and Administrative Expenses 90,517 37,031 Total Segment Operating Income $ 207,660 $ 97,094 $ 304,754 Nonallocated Corporate Expenses 90,517 Nonallocated Restructuring and Impairment Charges (1) 14,874 Operating Income $ 199,363 Other, Net 6,152 Income Before Income Taxes $ 205,515 (1) Nonallocated restructuring and impairment charges in 2024 resulted from our decision to exit our perimeter-of-the-store bakery product lines. For The Year Ended June 30, 2023 Retail Foodservice Total Net Sales $ 965,370 $ 857,157 $ 1,822,527 Cost of Sales 718,878 715,081 Selling, General and Administrative Expenses 82,059 35,727 Restructuring and Impairment Charges (1) 24,969 — Total Segment Operating Income $ 139,464 $ 106,349 $ 245,813 Nonallocated Corporate Expenses 104,305 Operating Income $ 141,508 Other, Net 1,789 Income Before Income Taxes $ 143,297 (1) Restructuring and impairment charges in 2023 related to the intangible assets of Flatout due to lowered expectations for the projected sales and profitability of the Flatout product lines that we subsequently exited in 2024. These charges were reflected in our Retail segment. The following table sets forth reconciliations of our reportable segments’ total identifiable assets to the consolidated totals as of June 30 and our reportable segments’ total depreciation and amortization expenses to the consolidated totals for each of the years ended June 30: 2025 2024 2023 Identifiable Assets (1) Retail & Foodservice (2) $ 1,083,381 $ 1,015,454 $ 984,341 Corporate 191,343 191,477 128,653 Total $ 1,274,724 $ 1,206,931 $ 1,112,994 Depreciation and Amortization Retail & Foodservice (2) $ 57,095 $ 51,386 $ 47,001 Corporate 5,073 4,510 4,209 Total $ 62,168 $ 55,896 $ 51,210 (1) Long-lived assets are predominately domestic. Retail and Foodservice identifiable assets include those assets used in our operations and other intangible assets allocated to purchased businesses, most notably goodwill. The increase in Retail and Foodservice identifiable assets from June 30, 2024 to June 30, 2025 reflects the acquisition of the Atlanta plant. The increase in Retail and Foodservice identifiable assets from June 30, 2023 to June 30, 2024 reflected a new operating lease right-of-use asset for a warehouse in Union City, Georgia. Corporate assets consist principally of cash and equivalents. The increase in Corporate assets from June 30, 2023 to June 30, 2024 reflected higher cash and equivalents. (2) As discussed above, we do not present identifiable assets or depreciation and amortization separately by reportable segment. 52 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Our relationship with Chick-fil-A, Inc. (“Chick-fil-A”), one of our national chain restaurant accounts, represents a significant portion of our consolidated net sales. In Foodservice, we primarily supply Chick-fil-A indirectly through multiple distributors with the remainder supplied directly to Chick-fil-A. None of these individual customers amounts to more than 10% of our consolidated net sales. Chick-fil-A is also a significant contributor to our Retail sales as we sell their sauce and dressing products into the retail channel through an exclusive license agreement. Retail segment net sales attributed to Walmart also represent a significant portion of our consolidated net sales. Total net sales attributable to Chick-fil-A, including the Retail sales resulting from the exclusive license agreement and the Foodservice sales, and Retail segment net sales attributable to Walmart for each of the years ended June 30 were as follows: 2025 2024 2023 Net sales attributable to Chick-fil-A $ 548,222 $ 519,818 $ 480,973 As a percentage of consolidated net sales 29 % 28 % 26 % Net sales attributable to Walmart $ 367,274 $ 338,764 $ 323,718 As a percentage of consolidated net sales 19 % 18 % 18 % Note 10 – Stock-Based Compensation Our shareholders previously approved the Lancaster Colony Corporation 2015 Omnibus Incentive Plan (the “2015 Plan”). The 2015 Plan reserved 1,500,000 common shares for issuance to our employees and directors. All awards granted under this plan will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under this plan varies as to the type of award granted, and the maximum term of these awards is seven years . We recognize compensation expense over the requisite service period of the grant. Compensation expense is reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification. We estimate a forfeiture rate based on historical experience. Stock-Settled Stock Appreciation Rights Prior to 2022, we used periodic grants of stock-settled stock appreciation rights (“SSSARs”) as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized. The SSSARs we granted generally vested over a 3-year period whereby one-third vested on the first anniversary of the grant date, one-third vested on the second anniversary of the grant date and one-third vested on the third anniversary of the grant date. At June 30, 2025, there were no unvested SSSARs outstanding. The following table summarizes our SSSARs compensation expense and tax benefits recorded for each of the years ended June 30: 2025 2024 2023 Compensation expense $ — $ 1,038 $ 1,972 Tax benefits $ — $ 90 $ 216 Intrinsic value of exercises $ ( 18 ) $ 677 $ 3,873 The total fair values of SSSARs vested for each of the years ended June 30 were as follows: 2025 2024 2023 Fair value of vested rights $ — $ 1,175 $ 2,611 53 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) The following table summarizes the activity relating to SSSARs granted under the plan for the year ended June 30, 2025: Number of Rights Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding at beginning of year 39 $ 169.75 Exercised ( 20 ) $ 163.69 Granted — $ — Forfeited — $ — Outstanding at end of year 19 $ 175.76 2.56 $ 31 Exercisable and vested at end of year 19 $ 175.76 2.56 $ 31 Vested and expected to vest at end of year 19 $ 175.76 2.56 $ 31 The following table summarizes information about the SSSARs outstanding by grant year at June 30, 2025: Outstanding Exercisable Weighted Average Grant Years Range of Exercise Prices Number Outstanding Remaining Contractual Life in Years Exercise Price Number Exercisable Weighted Average Exercise Price 2021 $ 167.18 -$ 177.99 18 2.62 $ 177.40 18 $ 177.40 2020 $ 153.71 1 1.66 $ 153.71 1 $ 153.71 At June 30, 2025, there was no unrecognized compensation expense related to SSSARs. Restricted Stock We use periodic grants of restricted stock as a vehicle for rewarding our nonemployee directors and certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. In 2025, 2024 and 2023, we granted shares of restricted stock to various employees under the terms of the plan. The following table summarizes information relating to these grants: 2025 2024 2023 Employees Restricted stock granted 38 33 29 Grant date fair value $ 7,292 $ 6,076 $ 4,448 Weighted average grant date fair value per award $ 190.84 $ 185.05 $ 154.80 The restricted stock under these employee grants generally vests 3 years after the grant date. Under the terms of our grants, employees receive dividends on unforfeited restricted stock regardless of their vesting status. In 2025, 2024 and 2023, we also granted shares of restricted stock to our nonemployee directors under the terms of the plan. The following table summarizes information relating to each of these grants: 2025 2024 2023 Nonemployee directors Restricted stock granted 6 5 4 Grant date fair value $ 1,215 $ 920 $ 919 Weighted average grant date fair value per award $ 200.28 $ 165.41 $ 203.34 The restricted stock under these nonemployee director grants generally vests 1 year after the grant date. All of the shares granted during 2025 are expected to vest. Dividends earned on the stock during the vesting period are paid to the directors at the time the stock vests. 54 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) The following table summarizes our restricted stock compensation expense and tax benefits recorded for each of the years ended June 30: 2025 2024 2023 Compensation expense $ 5,673 $ 5,479 $ 4,432 Tax benefits $ 859 $ 841 $ 677 The total fair values of restricted stock vested for each of the years ended June 30 were as follows: 2025 2024 2023 Fair value of vested shares $ 5,125 $ 3,287 $ 4,996 The following table summarizes the activity relating to restricted stock granted under the plan for the year ended June 30, 2025: Number of Shares Weighted Average Grant Date Fair Value Unvested restricted stock at beginning of year 80 $ 176.21 Granted 44 $ 192.14 Vested ( 28 ) $ 183.25 Forfeited ( 6 ) $ 184.23 Unvested restricted stock at end of year 90 $ 181.33 At June 30, 2025, there was $ 7.1 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 2 years. Performance Units Beginning in 2022, we use periodic grants of performance units as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. These performance units are based on two performance metrics, with equal weightings, as follows: • a market condition based on relative total shareholder return versus the S&P 1500 Packaged Foods & Meats Index; and • a performance condition based on revenue growth over the applicable performance period. These performance units vest 3 years after the grant date and are settled in shares of common stock equal to the number of performance units granted multiplied by a percentage between 0 % and 200 % depending on the achievement of the above-noted performance metrics over the 3 -year performance period. Our policy is to issue shares upon the vesting of performance units from new shares that had been previously authorized. Dividend equivalents earned during the vesting period are paid at the time the awards vest. In 2025, 2024 and 2023, we granted performance units to various employees under the terms of the plan. The following table summarizes information relating to these grants: 2025 2024 2023 Performance units granted 25 25 26 Grant date fair value $ 5,248 $ 4,745 $ 4,572 Weighted average grant date fair value per award $ 206.54 $ 192.91 $ 173.73 For our performance units with a performance condition, the grant-date fair value is equal to the closing price of our common stock on the grant date. For our performance units with a market condition, the grant-date fair value is estimated using a Monte Carlo simulation. The assumptions used in the Monte Carlo simulation were as follows: 2025 2024 2023 Risk-free interest rate 3.72 % 4.60 % 3.18 % Dividend yield 1.98 % 1.78 % 2.08 % Volatility factor of the expected market price of our common stock 26.40 % 24.60 % 32.20 % 55 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) The following table summarizes our performance units compensation expense and tax benefits recorded for each of the years ended June 30: 2025 2024 2023 Compensation expense $ 3,306 $ 4,842 $ 2,678 Tax benefits $ 321 $ 620 $ 355 The following table summarizes information for our performance units that vested during the year ended June 30: 2025 Payout of revenue-based performance units 174 % Payout of market-based performance units 91 % Fair value of vested performance units $ 3,281 The following table summarizes the activity relating to performance units granted under the plan for the year ended June 30, 2025: Number of Units Weighted Average Grant Date Fair Value Unvested performance units at beginning of year 62 $ 188.34 Granted 25 $ 206.54 Vested ( 16 ) $ 201.70 Forfeited ( 6 ) $ 192.75 Unvested performance units at end of year 65 $ 191.72 At June 30, 2025, there was $ 4.4 million of unrecognized compensation expense related to performance units that we will recognize over a weighted-average period of 2 years. Note 11 – Pension Benefits Defined Benefit Pension Plans Prior to November 30, 2024, we sponsored multiple defined benefit pension plans that covered certain former employees under collective bargaining contracts related to closed or sold operations. All these plans were previously frozen. In August 2024, our Board of Directors approved the merger of all five pension plans and the termination of the resulting merged plan. The merged plan was terminated effective November 30, 2024. Lump sum distributions and annuity purchases from a highly rated insurance company were completed in December 2024. No additional pension plan contributions were required. As a result of the pension termination, we incurred a one-time noncash settlement charge of $ 14.0 million in 2025. Prior to the termination of the merged plan discussed above, we discounted our plan liabilities at the end of the year using an assumed discount rate. In estimating this rate, we, along with our third-party actuaries, reviewed the timing of future benefit payments, bond indices, yield curve analysis results and the past history of discount rates. The actuarial present value of benefit obligations summarized below was based on the following assumption: 2024 Weighted-average assumption as of June 30 Discount rate 5.23 % The net periodic benefit costs were determined utilizing the following beginning-of-the-year assumptions: 2025 2024 2023 Discount rate 5.23 % 5.18 % 4.52 % Expected long-term return on plan assets 5.00 % 5.00 % 5.00 % 56 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) We categorize our plan assets within a three-level fair value hierarchy, as previously defined in Note 1. The following table summarizes the fair values and levels, within the fair value hierarchy, for our plan assets at June 30, 2024: Asset Category Level 1 Level 2 Level 3 Total Cash and equivalents $ 53 $ — $ — $ 53 Money market funds 1,459 — — 1,459 Mutual funds fixed income 19,242 — — 19,242 Mutual funds equity 7,262 — — 7,262 Total $ 28,016 $ — $ — $ 28,016 The plan assets classified at Level 1 included money market funds and mutual funds. Quoted market prices in active markets for identical assets were available for investments in this category. Relevant information with respect to our pension benefits as of June 30 can be summarized as follows: 2025 2024 Change in benefit obligation Benefit obligation at beginning of year $ 26,475 $ 27,952 Interest cost 659 1,382 Actuarial gain ( 834 ) ( 660 ) Benefits paid ( 26,300 ) ( 2,199 ) Benefit obligation at end of year $ — $ 26,475 2025 2024 Change in plan assets Fair value of plan assets at beginning of year $ 28,016 $ 28,776 Actual return on plan assets ( 1,716 ) 1,215 Employer contributions — 224 Benefits paid ( 26,300 ) ( 2,199 ) Fair value of plan assets at end of year $ — $ 28,016 2025 2024 Funded status - net prepaid benefit cost $ — $ 1,541 2025 2024 Amounts recognized in the Consolidated Balance Sheets consist of Prepaid benefit cost (Other Noncurrent Assets) $ — $ 1,886 Accrued benefit liability (Other Noncurrent Liabilities) — ( 345 ) Net amount recognized $ — $ 1,541 2025 2024 Accumulated benefit obligation $ — $ 26,475 The following table discloses, in the aggregate, those plans with benefit obligations in excess of the fair value of plan assets at the June 30 measurement date: 2025 2024 Benefit obligations $ — $ 4,301 Fair value of plan assets at end of year $ — $ 3,956 57 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Amounts recognized in accumulated other comprehensive loss at June 30 were as follows: 2025 2024 Net actuarial loss $ — $ 12,713 Income taxes — ( 2,971 ) Total $ — $ 9,742 The following table summarizes the components of net periodic benefit cost for our pension plans at June 30: 2025 2024 2023 Components of net periodic benefit cost Interest cost $ 659 $ 1,382 $ 1,344 Expected return on plan assets ( 668 ) ( 1,375 ) ( 1,416 ) Amortization of unrecognized net loss 294 633 725 Settlement charge 13,968 — — Net periodic benefit cost $ 14,253 $ 640 $ 653 Note 12 – Defined Contribution and Other Employee Plans Company-Sponsored Defined Contribution Plans We sponsor four defined contribution plans established pursuant to Section 401(k) of the Internal Revenue Code. Contributions are determined under various formulas, and we contributed to three of these plans in 2025. Costs related to such plans for each of the years ended June 30 were as follows: 2025 2024 2023 Costs related to company-sponsored defined contribution plans $ 8,282 $ 6,922 $ 6,009 Multiemployer Plans In the three years ended June 30, 2025, one of our subsidiaries participated in a multiemployer plan that provides pension benefits to retiree workers under a collective bargaining contract. This plan generally provides for retirement, death and/or termination benefits for eligible employees within the collective bargaining contract, based on specific eligibility/participation requirements, vesting periods and benefit formulas. The risks of participating in a multiemployer plan are different from single-employer plans in the following aspects: (1) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (2) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers and (3) if a participating employer chooses to stop participating in the multiemployer plan, it may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Our participation in this multiemployer pension plan for the three years ended June 30, 2025 is reflected in the following table. All information in the table is as of December 31 of the relevant year, except contributions which are based on our fiscal year, or except as otherwise noted. The EIN/PN column provides the Employer Identification Number (“EIN”) and the Plan Number (“PN”). The pension protection act zone status is based on information that we received from the plan. Among other factors, generally, plans in critical status (red zone) are less than 65 percent funded, plans in endangered or seriously endangered status (yellow zone or orange zone, respectively) are less than 80 percent funded, and plans at least 80 percent funded are said to be in the green zone. The FIP/RP status pending/implemented column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented by the trustees of each plan. There have been no significant changes that affect the comparability of 2025, 2024 or 2023 contributions. Pension Protection Act Zone Status Fiscal Year Contributions Plan Name EIN/PN 2024 2023 FIP/RP Status Pending / Implemented 2025 2024 2023 Surcharge Imposed Expiration Date of Collective Bargaining Agreement Western Conference of Teamsters Pension Plan 916145047 - 001 Green 12/31/23 Green 12/31/22 No $ 277 $ 215 $ 250 No 12/15/2025 58 Table of Contents THE MARZETTI COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share data) Under this multiemployer plan and one additional multiemployer plan, we also contribute amounts for health and welfare benefits that are defined by each plan. These benefits are not vested. The contributions required by our participation in these plans for each of the years ended June 30 were as follows: 2025 2024 2023 Multiemployer health and welfare plan contributions $ 4,072 $ 3,047 $ 3,124 We also make non-elective contributions for the union employees at our Bedford Heights, Ohio plant into a union-sponsored multiemployer 401(k) plan. Our contributions totaled $ 1.0 million in 2025, 2024 and 2023. Deferred Compensation Plan We offer a deferred compensation plan for select employees who may elect to defer a certain percentage of annual compensation. We do not match any contributions. Each participant earns interest based upon the prime rate of interest, adjusted semi-annually, on their respective deferred compensation balance. Participants are paid out upon retirement or termination in accordance with their annual election. The following table summarizes our liability for total deferred compensation and accrued interest at June 30: 2025 2024 Liability for deferred compensation and accrued interest $ 4,607 $ 4,501 Deferred compensation expense for each of the years ended June 30 was as follows: 2025 2024 2023 Deferred compensation expense $ 345 $ 387 $ 311 59 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.