What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-08-25 compared with 2025-08-21 · 158 added, 110 removed, 208 unchanged (56% of the section changed)

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The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto in Item 8 of this Annual Report on Form 10-K.

We prepare our consolidated financial statements in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”).

We have also presented Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income and Adjusted Net Income Per Diluted Share, each of which is considered a non-GAAP financial measure, to supplement the financial information included in this report.

Refer to the “Reconciliation of GAAP to non-GAAP Financial Measures” section below for additional information and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

The forward-looking statements in this section and other parts of this report involve risks, uncertainties and other factors, including statements regarding our plans, objectives, goals, strategies, and financial performance.

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• long-standing Foodservice customer relationships that help to support strategic licensing opportunities in Retail;

• demonstrated success with strategic licensing programs in Retail through both new and established relationships in the foodservice industry;

• demonstrated success with strategic licensing programs in Retail through both established relationships in the foodservice industry and new relationships;

• recognized leadership in Foodservice product development;

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• acquiring complementary businesses.

With respect to long-term growth, we continually evaluate the future opportunities and needs for our business specific to our plant infrastructure, IT platforms and other initiatives to support and strengthen our operations.

Recent examples of resulting investments include:

With respect to our long-term growth strategy, in addition to complementary acquisitions, we continually evaluate the future opportunities and needs for our business specific to our plant infrastructure, production capacity and IT platforms to support and strengthen our operations.

Recent examples of resulting strategic actions include:

• the acquisition of Bachan’s, Inc.

(“Bachan’s”), the rapidly growing Japanese Barbecue Sauce brand known for its authentic, clean-label products, in May 2026;

• the closure of our sauce and dressing production facility in Milpitas, California during the quarter ended September 30, 2025;

• the acquisition of a sauce and dressing production facility in the Atlanta, Georgia area in February 2025.

• a significant capacity expansion project for our Marzetti dressing and sauce facility in Horse Cave, Kentucky that was fully operational beginning in March 2023;

• our enterprise resource planning system (“ERP”) project and related initiatives, Project Ascent, that reached completion of the implementation phase in August 2023.

Project Ascent entailed the replacement of our primary customer and manufacturing transactional systems, warehousing systems, and financial systems with an integrated SAP S/4HANA system.

Implementation of this system began in July 2022 and continued throughout fiscal 2023.

Customer fulfillment levels remained strong before and after the initial system cutover with no unplanned disruptions in receiving orders, producing products or shipping orders.

During fiscal 2023, we progressed through our ERP implementation with no major disruptions.

We completed the final wave of the implementation phase in August 2023 as planned and have shifted our focus towards leveraging the capabilities of our new ERP system.

RESULTS OF CONSOLIDATED OPERATIONS

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Selling, General and Administrative Expenses 254,601 230,227 218,065 24,374 10.6 % 12,162 5.6 %

Restructuring and Impairment Charges 5,102 14,874 24,969 (9,772) (65.7) % (10,095) (40.4) %

Restructuring, Impairment and Other, Net (16,024) 5,102 14,874 (21,126) N/M (9,772) (65.7) %

Operating Income 238,711 220,317 199,363 18,394 8.3 % 20,954 10.5 %

Operating Margin 12.4 % 11.5 % 10.7 %

Pension Settlement Charge (13,968) — — (13,968) N/M — N/M

Interest Expense (1,763) — — (1,763) N/M — N/M

Pension Settlement Charge — (13,968) — 13,968 (100.0) % (13,968) N/M

Other, Net 5,022 7,114 6,152 (2,092) (29.4) % 962 15.6 %

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Diluted Net Income Per Common Share $ 6.98 $ 6.07 $ 5.76 $ 0.91 15.0 % $ 0.31 5.4 %

Consolidated net sales for the year ended June 30, 2025 increased 2.0% to a new record of $1,909.1 million from the prior-year record total of $1,871.8 million, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by increased volume and mix.

Year-over-year comparisons for the Retail segment were unfavorably impacted by prior-year sales attributed to the perimeter-of-the-store bakery product lines we exited in March 2024.

Year-over-year comparisons for the Foodservice segment were favorably impacted by a temporary supply agreement (“TSA”) resulting from our acquisition of a sauce and dressing production facility located in Atlanta, Georgia (“Atlanta plant”).

Consolidated net sales for the year ended June 30, 2026 increased 1.1% to a new record of $1,929.8 million from the prior-year record total of $1,909.1 million.

The net sales growth was driven by higher pricing in both segments in response to increased input costs, incremental sales resulting from the acquisition of Bachan’s that was completed on May 1, 2026, incremental sales from a temporary supply agreement (“TSA”), and higher sales volumes in our Foodservice segment.

These favorable factors were partially offset by the impact of lower sales volumes in our Retail segment.

The TSA sales, all of which are reported in our Foodservice segment, resulted from our acquisition of a sauce and dressing production facility located in Atlanta, Georgia (“Atlanta plant”).

The acquisition was completed in February 2025.

The TSA commenced in March 2025 for a period of up to 12 months.

Breaking down the 2.0% increase in consolidated net sales as summarized in the table below, higher core volumes and product mix contributed approximately 220 basis points, as partially offset by approximately 90 basis points attributed to the exited perimeter-of-the-store bakery product lines.

The incremental sales attributed to the TSA accounted for 80 basis points.

The TSA sales commenced in March 2025 and concluded during the quarter ended March 31, 2026.

Breaking down the 1.1% increase in consolidated net sales as summarized in the table below, lower core volumes and product mix accounted for a decrease of approximately 90 basis points, the net pricing impact accounted for an increase of approximately 90 basis points, incremental sales from Bachan’s contributed approximately 80 basis points, and incremental sales attributed to the TSA added approximately 30 basis points.

Excluding all sales attributed to the TSA, Adjusted Consolidated Net Sales for the year ended June 30, 2026 increased 0.8% to $1,909.4 million.

Breakdown of Change in Consolidated Net Sales Year Ended

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Net Pricing Impact 16,989 0.9 %

Perimeter-of-the-Store Bakery Product Lines Exited March 2024 (17,111) (0.9) %

Incremental Sales from Bachan’s 15,435 0.8 %

Incremental Sales for Temporary Supply Agreement (TSA) 6,178 0.3 %

Total Change in Net Sales $ 20,701 1.1 %

Consolidated sales volumes, measured in pounds shipped, increased 1.2% for the year ended June 30, 2025.

Excluding the impact of all sales attributed to both the exited perimeter-of-the-store bakery product lines and the TSA, consolidated sales volumes increased 0.9%.

Consolidated sales volumes, measured in pounds shipped, decreased 0.2% for the year ended June 30, 2026.

Excluding the impact of all sales attributed to the TSA, consolidated sales volumes decreased 0.6%.

The relative proportion of sales contributed by each of our business segments can impact a year-to-year comparison of the consolidated statements of income.

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See discussion of net sales by segment following the discussion of “Earnings Per Share” below.

Consolidated gross profit increased 5.4% to $455.6 million in 2025 compared to $432.3 million in 2024 driven by the positive impacts of our cost savings programs, volume growth and some modest cost deflation.

Consolidated gross profit increased 4.7% to $477.3 million in 2026 compared to $455.6 million in 2025.

Consolidated gross profit benefited from our cost savings programs, as partially offset by the unfavorable impacts of a less favorable sales mix and lower core sales volumes.

Reported gross margin improved 80 basis points while Adjusted Gross Margin increased 100 basis points.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses increased 10.6% to $254.6 million in 2026 compared to $230.2 million in 2025.

This increase includes investments in IT to support the continued growth of our business and $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent.

The incremental acquisition-related expenditures were primarily comprised of legal and professional fees.

Expenses attributed to Project Ascent, our ERP initiative, were included within Corporate Expenses and classified separately through 2024.

A portion of the costs classified as Project Ascent expenses represent ongoing costs that have continued subsequent to the completion of our ERP implementation in 2024.

Beginning in 2025, these ongoing costs are no longer classified separately as Project Ascent expenses.

Restructuring and Impairment Charges

SG&A expenses in the current year included $14.5 million in incremental expenditures attributed to the Bachan’s acquisition transaction costs in addition to $1.6 million in incremental noncash amortization expense for Bachan’s intangible assets.

SG&A expenses in the prior year included $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition.

Excluding these items, SG&A expenses grew 5.3%, or $12.0 million, in 2026 driven by $4.8 million in incremental core SG&A expenses for Bachan’s and increased investments in IT and personnel.

Restructuring, Impairment and Other, Net

In 2025, we committed to a plan to close our sauce and dressing production facility in Milpitas, California as part of our ongoing strategic initiative to better optimize our manufacturing network.

Production at the facility is expected to conclude in the quarter ending September 30, 2025.

In 2025, we recorded restructuring and impairment charges of $4.5 million related to this closure.

Production at the facility concluded in August 2025.

In 2026 and 2025, we recorded restructuring and impairment charges of $1.4 million and $4.5 million, respectively, related to this closure.

These charges consisted of impairment charges for personal property and operating lease right-of-use assets, one-time termination benefits and other closing costs.

In 2026, we also recorded a gain of $18.5 million on the sale of the related real property.

The operations of this facility were not classified as discontinued operations as the closure did not represent a strategic shift that would have a major effect on our operations or financial results.

In 2026, we also recorded a noncash impairment charge of $1.1 million related to manufacturing equipment, net of a recovery through an insurance claim.

This amount was reflected in our Foodservice segment.

In 2025, we transitioned our internal transportation fleet operation to an external dedicated carrier.

In 2025, we recorded resulting restructuring charges of $0.6 million for one-time termination benefits.

In 2024, we committed to a plan to exit our perimeter-of-the-store bakery product lines and close our Flatout flatbread facility in Saline, Michigan and our Angelic Bakehouse sprouted grain bakery facility in Cudahy, Wisconsin.

Production at these facilities ceased in March 2024, and we completed the divestiture of the real estate and manufacturing equipment at these locations during the quarter ended June 30, 2024.

The operations of these facilities were not classified as discontinued operations as the closures did not represent a strategic shift that would have a major effect on our operations or financial results.

In 2024, we recorded restructuring and impairment charges of $14.9 million related to these closures, as well as $2.6 million recorded in Cost of Sales for the write-down of inventories.

The restructuring and impairment charges, which consisted of impairment charges for fixed assets and intangible assets, one-time termination benefits and other closing costs, were not allocated to our two reportable segments due to their unusual nature whereas the $2.6 million write-down of inventories was recorded in our Retail segment.

Operating Income

Operating income increased 10.5% to $220.3 million in 2025 compared to $199.4 million in 2024 due to the increase in gross profit and lower restructuring and impairment charges, as partially offset by the higher SG&A expenses.

The following table presents a reconciliation between operating income as reported in accordance with U.S.

generally accepted accounting principles (“GAAP”) and adjusted operating income, which is a non-GAAP financial measure.

Adjusted operating income excludes certain items affecting comparability that can impact the analysis of our underlying core business performance and trends.

Management uses this non-GAAP measure in preparation of our annual operating plan and for our monthly analysis of operating results.

The excluded items consist of costs related to restructuring or acquisition activities.

Year Ended June 30, Change

(Dollars in thousands) 2025 2024 2025 vs.

Reported Operating Income $ 220,317 $ 199,363 $ 20,954 10.5 %

Cost of Sales - Inventory Write-Down for Product Line Exit — 2,600 (2,600) (100.0) %

SG&A Expenses - Acquisition Costs 3,781 — 3,781 N/M

Restructuring and Impairment Charges 5,102 14,874 (9,772) (65.7) %

Adjusted Operating Income (non-GAAP) $ 229,200 $ 216,837 $ 12,363 5.7 %

Operating income increased 8.3% to $238.7 million in 2026 compared to $220.3 million in 2025 due to the increase in gross profit and the favorable year-over-year change in Restructuring, Impairment and Other, which were partially offset by the higher SG&A expenses.

Excluding the current-year net benefit and the prior-year expense in Restructuring, Impairment and Other, the current-year and prior-year acquisition costs in SG&A and Bachan’s current-year intangible asset amortization in SG&A, Adjusted Operating Income increased $9.6 million to $238.8 million.

See discussion of operating results by segment following the discussion of “Earnings Per Share” below.

Interest Expense

Interest expense totaled $1.8 million in 2026 related to borrowings under our unsecured credit facility.

See further discussion in Note 3 to the consolidated financial statements.

Pension Settlement Charge

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As a result of the pension termination, we incurred a one-time noncash settlement charge of $14.0 million in 2025.

See further discussion in Note 11 to the condensed consolidated financial statements.

See further discussion in Note 11 to the consolidated financial statements.

Other, net resulted in a benefit of $5.0 million in 2026 compared to a benefit of $7.1 million in 2025.

This change primarily reflects higher interest income.

This change primarily reflects lower interest income.

Taxes Based on Income

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Diluted weighted average common shares outstanding for each of the years ended June 30, 2026 and 2025 have remained relatively stable.

In 2026, the benefit in Restructuring, Impairment and Other, Net increased diluted earnings per share by $0.60.

Costs related to the Bachan’s acquisition reduced diluted earnings per share by $0.41 and amortization of intangible assets reduced diluted earnings per share by $0.05.

In 2025, the pension settlement charge reduced diluted earnings per share by $0.39, restructuring and impairment charges reduced diluted earnings per share by $0.15 and costs related to the Atlanta plant acquisition reduced diluted earnings per share by $0.11.

In 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.49.

These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.42, and the inventory write-down, which reduced diluted earnings per share by $0.07.

In 2024, expenditures for Project Ascent reduced diluted earnings per share by $0.23.

Refer to the “Reconciliation of GAAP to non-GAAP Financial Measures” section below for additional information.

RESULTS OF OPERATIONS - SEGMENTS

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Operating Margin 20.3 % 21.1 % 21.0 %

In 2025, net sales for the Retail segment reached a record $1,003.4 million, a 1.5% increase from the prior-year total of $988.4 million, reflecting higher sales volumes.

Year-over-year comparisons for the Retail segment were unfavorably impacted by prior-year sales attributed to the perimeter-of-the-store bakery product lines we exited in March 2024.

Excluding the exited product lines, Retail net sales increased 3.3%.

Retail segment net sales growth was driven by our licensing program led by Texas Roadhouse TM dinner rolls, Chick-fil-A ® sauces and Subway ® sauces.

Our new gluten-free New York Bakery TM frozen garlic bread also added to the growth in Retail net sales.

Retail segment sales volumes, measured in pounds shipped, increased 1.6%.

Excluding the impact of all sales attributed to the exited perimeter-of-the-store bakery product lines, Retail sales volumes increased 2.9%.

In 2025, Retail segment operating income increased $4.0 million, or 1.9%, to $211.7 million due to the higher sales volume and more favorable sales mix, our cost savings programs and some modest cost deflation, as partially offset by higher sales and marketing costs as we invested to support the growth of our brands.

In 2026, net sales for the Retail segment totaled $1,002.8 million, a 0.1% decrease from the prior-year record of $1,003.4 million, due to a decline in sales volumes as partially offset by the incremental sales from Bachan’s and some inflationary pricing.

Sales highlights for the current-year period included continued strong growth for our category-leading New York Bakery TM frozen garlic bread products and expanding distribution for our recently introduced Texas Roadhouse ® dinner rolls.

Retail segment sales volumes, measured in pounds shipped, decreased 1.9%.

Excluding Bachan’s, Retail segment sales volumes declined 3.2%, which includes the unfavorable impact of reduced sales into the club channel..

In 2026, Retail segment operating income decreased $8.0 million, or 3.8%, to $203.7 million due to lower sales volumes and inflationary costs, as partially offset by our cost savings programs and some inflationary pricing.

Foodservice Segment

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Operating Margin 14.2 % 12.3 % 11.0 %

In 2025, Foodservice segment net sales increased 2.5% to a record $905.7 million from the 2024 total of $883.3 million driven by increased demand from several of our national chain restaurant account customers and growth for our Marzetti ® branded Foodservice products.

In the back half of the fiscal year, Foodservice segment net sales were unfavorably impacted by menu changes implemented by two of our national chain restaurant customers as they shifted their focus to value offerings.

Excluding all sales attributed to the TSA resulting from the February 2025 Atlanta plant acquisition, Foodservice segment net sales increased 0.9%.

In 2026, Foodservice segment net sales increased 2.4% to a new record of $927.1 million from last year’s record of $905.7 million driven by increased demand from several of our national chain restaurant account customers, the benefit of inflationary pricing, and the higher TSA sales.

Excluding all sales attributed to the TSA, Adjusted Foodservice Net Sales increased 1.7%.

Foodservice segment sales volumes, measured in pounds shipped, increased 0.9%.

Excluding all TSA sales, Foodservice segment sales volumes declined 0.3%.

In 2025, Foodservice segment operating income increased 14.9% to $111.6 million driven by the beneficial impact of our cost savings programs and cost deflation, as partially offset by higher supply chain costs.

Excluding all TSA sales, Foodservice sales volumes increased 0.3%.

In 2026, Foodservice segment operating income increased 17.7% to $131.3 million driven by our cost savings programs, inflationary pricing, a more favorable sales mix and the benefit of recent IT investments to support a more optimized trade spend system, as partially offset by inflationary costs.

Corporate Expenses

In 2026, corporate expenses totaled $113.4 million as compared to $97.9 million in 2025.

This increase primarily reflects investments in IT to support the continued growth of our business and $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent.

Excluding acquisition-related expenses, this increase was primarily driven by increased investments in personnel and IT.

Corporate expenses in the current year included $14.5 million in incremental expenditures attributed to the Bachan’s acquisition.

Corporate expenses in the prior year included $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition.

LOOKING FORWARD

For 2026, we anticipate Retail segment sales will continue to benefit from volume growth, with contributions from both our licensing program and our Marzetti ® , New York Bakery TM , and Sister Schubert’s ® brands.

In the Foodservice segment, we expect sales to be supported by select quick-service restaurant customers in our mix of national chain restaurant accounts, while external factors, including U.S.

economic performance and consumer behavior, may impact demand.

With respect to our input costs, in aggregate we anticipate a modest level of inflation in fiscal 2026 that we plan to offset through contractual pricing and our cost savings programs as we remain focused on continued margin improvement in the year ahead.

We also look forward to further incorporating our newly acquired Atlanta-based sauce and dressing plant into our manufacturing network.

While the current tariff environment entails some uncertainty, based on our understanding of currently available information for existing and proposed tariffs, we do not anticipate the performance of our business will be materially impacted by tariffs.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

In accordance with GAAP, the effects of changes in tax laws or rates are recognized in the period in which the legislation is enacted.

We expect the OBBBA to primarily provide cash tax timing benefits with no material impact on our effective tax rate.

We will continue to periodically reassess our allocation of capital to ensure that we maintain adequate operating flexibility while providing appropriate levels of cash returns to our shareholders.

For 2027, in addition to incremental sales attributed to the Bachan’s acquisition, we expect Retail sales will benefit from new items we recently launched or have planned for introduction in the year ahead for both our legacy brands and licensing program.

In the Foodservice segment, we expect sales to remain supported by select quick-service restaurant customers in our mix of national chain restaurant accounts.

Note that external factors, including U.S.

economic performance and consumer behavior, may impact the topline growth for both segments in the coming year.

We also continue to monitor the impact of the Cyclospora outbreak on product demand and sales.

With respect to our input costs, in aggregate we anticipate a moderate level of inflation in fiscal 2027 that we plan to offset through inflationary pricing and our cost savings programs as we remain focused on continued margin improvement.

FINANCIAL CONDITION

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We maintain sufficient flexibility in our capital structure to ensure our capitalization is adequate to support our future internal growth prospects, acquire food businesses consistent with our strategic goals, and maintain cash returns to our shareholders through cash dividends and opportunistic share repurchases.

Our balance sheet maintained fundamental financial strength during 2025 as we ended the year with $161 million in cash and equivalents, along with shareholders’ equity of $998 million and no debt.

Under our unsecured revolving credit facility (“Facility”), we may borrow up to a maximum of $150 million at any one time.

We had no borrowings outstanding under the Facility at June 30, 2025.

We ended the year with $25 million in cash and equivalents, shareholders’ equity of $1,053 million and outstanding debt of $200 million.

On May 1, 2026, we completed the acquisition of Bachan’s.

The purchase price of $399 million, net of cash acquired, is subject to future post-closing adjustments and was financed with cash on hand and a $200 million term loan.

Under our unsecured credit facility (“Facility”), which was amended in March 2026, we may borrow up to a maximum of $200 million at any one time on a revolving credit basis, as well as an additional $200 million under a term loan to finance our acquisition of Bachan’s.

At June 30, 2026, we had borrowings of $200 million outstanding under the term loan and no revolving loans outstanding.

At June 30, 2026, we had $2.6 million of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility.

The Facility expires in March 2029, and all outstanding amounts are then due and payable.

The Facility expires in March 2029, and all outstanding revolving loans are then due and payable.

The maturity date for the term loan is April 29, 2031;

however, there is a springing maturity date of March 6, 2029, if, by December 6, 2028, the Facility termination date has not been extended to April 29, 2031 or later with an aggregate revolving commitment equal to or greater than the outstanding principal balance of the term loan.

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.

Revolving loans may be used for general corporate purposes.

The Facility contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage.

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We currently expect to remain in compliance with the Facility’s covenants for the foreseeable future.

However, a default under the Facility could accelerate the repayment of any then outstanding indebtedness and limit our access to $75 million of additional credit available under the Facility.

However, a default under the Facility could accelerate the repayment of any then outstanding indebtedness and limit our access to $200 million of additional revolving credit available under the Facility.

Such an event could require a reduction in or curtailment of cash dividends or share repurchases, reduce or delay beneficial expansion or investment plans, or otherwise impact our ability to meet our obligations when due.

We believe that cash provided by operating activities and our existing balances in cash and equivalents, in addition to that available under the Facility, should be adequate to meet our liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments.

We believe that cash provided by operating activities and our existing balances in cash and equivalents, in addition to that available under the Facility, should be adequate to meet our core liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments.

If we were to borrow outside of the Facility under current market terms, our average interest rate may increase and have an adverse effect on our results of operations.

Based on our current plans and expectations, we believe our capital expenditures for 2026 could total between $75 and $85 million.

Based on our current plans and expectations, we believe our capital expenditures for 2027 could total approximately $90 million.

Beyond the next 12 months, we expect that cash provided by operating activities will be the primary source of liquidity.

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Certain other contractual obligations are not recognized as liabilities in our consolidated financial statements.

Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of June 30, 2025, as well as purchase orders and longer-term purchase arrangements related to the procurement of services, including IT service agreements, and property, plant and equipment.

The majority of these obligations is expected to be due within one year.

Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of June 30, 2026, lease commitments that have not yet commenced as of June 30, 2026, and purchase orders and longer-term purchase arrangements related to the procurement of services, including IT service agreements, and property, plant and equipment.

The majority of these obligations, other than lease commitments, is expected to be due within one year.

Year Ended June 30, Change

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Provided By Operating Activities $ 283,816 $ 261,496 $ 251,553 $ 22,320 8.5 % $ 9,943 4.0 %

Used In Investing Activities $ (148,206) $ (67,433) $ (90,782) $ (80,773) (119.8) % $ 23,349 25.7 %

Used In Financing Activities $ (115,257) $ (109,150) $ (106,929) $ (6,107) (5.6) % $ (2,221) (2.1) %

Cash provided by operating activities and our existing balances in cash and equivalents remain the primary sources for funding our investing and financing activities, as well as financing our organic growth initiatives.

Used In Investing Activities $ (470,039) $ (148,206) $ (67,433) $ (321,833) N/M $ (80,773) (119.8) %

Provided By (Used In) Financing Activities $ 49,843 $ (115,257) $ (109,150) $ 165,100 143.2 % $ (6,107) (5.6) %

Cash provided by operating activities in 2026 totaled $283.8 million, an increase of 8.5% as compared with the 2025 total of $261.5 million.

The 2025 increase was primarily due to higher net income, the current-year noncash pension settlement charge and higher noncash depreciation and amortization expense, as partially offset by unfavorable year-over-year changes in net working capital and lower noncash restructuring and impairment charges.

The unfavorable net working capital changes reflected the impact of a prior-year decline in accounts receivable and a prior-year increase in accounts payable, partially offset by a prior-year increase in inventories.

The 2026 increase was primarily due to the change in deferred income taxes resulting from tax timing benefits of the One Big Beautiful Bill Act, which was enacted in July 2025.

The unfavorable year-over-year changes in net working capital reflected the impact of a current-year increase in inventories, reflecting higher levels of finished goods on-hand, which was largely offset by a current-year increase in accounts payable.

Higher net income was offset by the impacts of the current-year gain on sale of property and the prior-year noncash pension settlement charge.

Cash used in investing activities totaled $470.0 million in 2026 as compared to $148.2 million in 2025.

The 2025 increase primarily reflects the $78.8 million of cash paid for the February 2025 Atlanta plant acquisition, as well as prior-year proceeds from the sale of property totaling $7.0 million.

Payments for property additions were $9.6 million lower in the current year.

Financing activities used net cash totaling $115.3 million and $109.2 million in 2025 and 2024, respectively.

The vast majority of the cash used in financing activities is attributed to the payment of dividends, and the 2025 increase in cash used in financing activities primarily reflects higher levels of dividend payments.

The 2026 increase primarily reflects cash paid for the May 2026 Bachan’s acquisition of $399.3 million compared to prior-year cash paid for the Atlanta plant acquisition of $78.8 million, as well as a $19.7 million increase in payments for property additions.

Partially offsetting these items were current-year proceeds from the sale of property totaling $20.3 million.

Financing activities provided net cash totaling $49.8 million in 2026 and used net cash totaling $115.3 million in 2025.

In 2026, net borrowing activities provided cash of $199.1 million and were partially offset by higher levels of cash used for share repurchases and dividend payments.

The regular dividend payout rate for 2026 was $3.95 per share, as compared to $3.75 per share in 2025.

This past fiscal year marked the 62 nd consecutive year of increased regular cash dividends.

This past fiscal year marked the 63 rd consecutive year of increased regular cash dividends.

Future levels of share repurchases and declared dividends are subject to the periodic review of our Board of Directors and are generally determined after an assessment is made of various factors, such as anticipated earnings levels, cash flow requirements and general business conditions.

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We do not have any related party transactions that materially affect our results of operations, cash flows or financial condition.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

We prepare our consolidated financial statements in accordance with GAAP.

However, from time to time, we may present in our public statements, press releases and SEC filings, non-GAAP financial measures such as Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, and Adjusted Net Income Per Diluted Share (“Adjusted Diluted EPS”).

Management considers such non-GAAP financial measures to provide useful supplemental information to investors in facilitating year-over-year comparisons by removing non-recurring items or other items that management believes do not directly reflect the underlying operations.

Management uses these non-GAAP measures in the preparation of our annual operating plan and for our monthly analysis of operating results.

Reconciliations of the non-GAAP measures to the most comparable GAAP financial measures are provided below.

Our definitions of these non-GAAP measures may differ from similarly titled measures used by other companies.

These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures that exclude non-core sales and cost of sales attributed to the TSA made in connection with our February 2025 acquisition of Winland’s Atlanta-based sauce and dressing production facility.

The TSA sales are included in the reported net sales for our Foodservice segment and did not contribute meaningfully to gross profit.

The TSA sales commenced in March 2025 and concluded during the quarter ended March 31, 2026.

The following tables present a reconciliation between net sales, cost of sales, gross profit and gross margin as reported in accordance with GAAP and Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin for the years ended June 30, 2026 and 2025.

Year Ended June 30, 2026 Year Ended June 30, 2025

(Dollars in thousands) Reported TSA-Related Adjusted

(non-GAAP) Reported TSA-Related Adjusted

Net Sales $ 1,929,823 $ 20,415 $ 1,909,408 $ 1,909,122 $ 14,237 $ 1,894,885

Cost of Sales 1,452,535 20,415 1,432,120 1,453,476 14,237 1,439,239

Gross Profit $ 477,288 $ — $ 477,288 $ 455,646 $ — $ 455,646

Gross Margin 24.7 % — % 25.0 % 23.9 % — % 24.0 %

Foodservice Segment

Foodservice Net Sales $ 927,054 $ 20,415 $ 906,639 $ 905,713 $ 14,237 $ 891,476

Adjusted Operating Income and Adjusted Diluted EPS are non-GAAP financial measures that exclude certain items affecting comparability, which can impact the analysis of our underlying core business performance and trends.

The following table presents a reconciliation between 1) operating income as reported in accordance with GAAP and Adjusted Operating Income and 2) diluted EPS as reported in accordance with GAAP and Adjusted Diluted EPS for the years ended June 30, 2026, 2025 and 2024.

For 2026, the adjustments reflect incremental SG&A expenses attributed to the Bachan’s acquisition;

incremental SG&A expenses attributed to the amortization of intangible assets resulting from the Bachan’s acquisition;

and restructuring, impairment and other, net, which consists of restructuring and impairment charges resulting from the closure of our sauce and dressing production facility in Milpitas, California, the gain on the sale of the Milpitas real property, and charges related to the impairment of manufacturing equipment, net of a recovery through an insurance claim.

For 2025, the adjustments reflect incremental SG&A expenses attributed to the Atlanta production facility acquisition;

restructuring and impairment charges primarily related to the closure of our production facility in Milpitas, California;

and the one-time noncash pension settlement charge.

For 2024, the adjustments consist of a write-down of inventories and restructuring and impairment charges, both of which resulted from our decision to exit our perimeter-of-the-store bakery product lines.

Dollars in thousands, except per share data Reported Cost of Sales - Inventory Write-Down for Product Line Exit SG&A Expenses

- Acquisition Costs SG&A Expenses

- Intangibles Amortization Restructuring, Impairment and Other, Net Pension Settlement Charge Adjusted

2026 Operating Income $ 238,711 $ — $ 14,509 $ 1,606 $ (16,024) $ — $ 238,802

2026 Diluted EPS $ 6.98 $ — $ 0.41 $ 0.05 $ (0.60) $ — $ 6.83

2025 Operating Income $ 220,317 $ — $ 3,781 $ — $ 5,102 $ — $ 229,200

2025 Diluted EPS $ 6.07 $ — $ 0.11 $ — $ 0.15 $ 0.39 $ 6.72

2024 Operating Income $ 199,363 $ 2,600 $ — $ — $ 14,874 $ — $ 216,837

2024 Diluted EPS $ 5.76 $ 0.07 $ — $ — $ 0.42 $ — $ 6.25

2026 vs 2025:

Operating Income Change ($) $ 18,394 $ — $ 10,728 $ 1,606 $ (21,126) $ — $ 9,602

Operating Income Change (%) 8.3 % N/M 283.7 % N/M (414.1) % — 4.2 %

Diluted EPS Change ($) $ 0.91 $ — $ 0.30 $ 0.05 $ (0.75) $ (0.39) $ 0.11

Diluted EPS Change (%) 15.0 % N/M 272.7 % N/M (500.0) % (100.0) % 1.6 %

2025 vs 2024:

Operating Income Change ($) $ 20,954 $ (2,600) $ 3,781 $ — $ (9,772) $ — $ 12,363

Operating Income Change (%) 10.5 % (100.0) % N/M N/M (65.7) % — 5.7 %

Diluted EPS Change ($) $ 0.31 $ (0.07) $ 0.11 $ — $ (0.27) $ 0.39 $ 0.47

Diluted EPS Change (%) 5.4 % (100.0) % N/M N/M (64.3) % N/M 7.5 %

* The sum of individual per share amounts may not add due to rounding.

IMPACT OF INFLATION

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These allowances can fluctuate based on the level of sales and promotional programs as well as the timing of deductions.

Business Combinations, Goodwill and Other Intangible Assets

We account for business combinations using the acquisition method of accounting.

Accordingly, the purchase price of an acquired business is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with any excess purchase price recorded as goodwill.

The determination of the fair values of assets acquired and liabilities assumed requires management to make significant estimates and assumptions, particularly with respect to acquired intangible assets.

These estimates and assumptions may include forecasts of future revenues and cash flows, expected growth rates, customer attrition rates, royalty rates, useful lives, and discount rates.

We generally estimate the fair value of acquired intangible assets using income-based valuation methodologies, including the relief-from-royalty method for tradenames and proprietary recipes and the multi-period excess earnings method for customer relationships.

Goodwill is not amortized.

It is evaluated annually at April 30 by applying impairment testing procedures.

We evaluate the future economic benefit of the recorded goodwill when events or circumstances indicate potential recoverability concerns.

Other finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives to Selling, General and Administrative Expenses.

We evaluate the future economic benefit of the recorded goodwill and other intangible assets when events or circumstances indicate potential recoverability concerns.

Carrying amounts are adjusted appropriately when determined to have been impaired.

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Items which could impact these forward-looking statements include, but are not limited to, those risk factors identified in Item 1A and:

• the ability to successfully integrate the acquired Bachan’s business and achieve operational and financial performance objectives;

• changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill;

• significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and foodborne outbreaks;

• efficiencies in plant operations and our overall supply chain network;

• geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy;

• inflationary pressures resulting in higher input costs;

• adverse changes in freight, energy or other costs of producing, distributing or transporting our products;

• fluctuations in the cost and availability of ingredients and packaging;

• the reaction of customers or consumers to pricing actions we take to offset inflationary costs;

• price and product competition;

• changes in our cash flow or use of cash in various business activities;

• the success and cost of new product development efforts;

• the lack of market acceptance of new products;

• changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill;

• the impact of customer store brands on our branded retail volumes;

• the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government;

• the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives;

• inflationary pressures resulting in higher input costs;

• fluctuations in the cost and availability of ingredients and packaging;

• adverse changes in freight, energy or other costs of producing, distributing or transporting our products;

• the reaction of customers or consumers to pricing actions we take to offset inflationary costs;

• the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the federal, state or local government;

• adverse changes in trade policies, including increased tariffs, retaliatory trade measures, or other trade restrictions;

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• stability of labor relations;

• geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy;

• the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives;

• dependence on a wide array of critical third parties to support our operations, including contract manufacturers, distributors, logistics providers and IT vendors;

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• the possible occurrence of product recalls or other defective or mislabeled product costs;

• the effect of consolidation of customers within key market channels;

• maintenance of competitive position with respect to other manufacturers;

• the outcome of any litigation or arbitration;

• the effect of consolidation of customers within key market channels;

• changes in estimates in critical accounting judgments;

• certain other risk factors, including those discussed in other filings we have submitted to the Securities and Exchange Commission.

• certain other factors, including those discussed in other filings we have submitted to the Securities and Exchange Commission.

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-K

Item 7. Management’s Discussion and Analysis