What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-10 compared with 2023-05-11 · 165 added, 110 removed, 309 unchanged (47% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management's discussion and analysis of our financial condition and results of operations ("MD&A") should be read in conjunction with our unaudited combined interim consolidated financial statements as of and for the thirteen weeks ended April 2, 2023, together with our audited combined consolidated financial statements for our most recently completed fiscal year set forth under Item 8 of our Annual Report on Form 10-K for the year ended January 1, 2023.

The following management's discussion and analysis of our financial condition and results of operations ( " MD&A " ) should be read in conjunction with our unaudited combined interim consolidated financial statements as of and for the thirteen and twenty-six weeks ended July 2, 2023, together with our audited combined consolidated financial statements for our most recently completed fiscal year set forth under Item 8 of our Annual Report on Form 10-K for the year ended January 1, 2023 (“Annual Report on Form 10-K”).

This discussion contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those discussed below.

Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended January 1, 2023 and other filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Factors that could cause or contribute to such differences include, but are not limited to, those identified under “Cautionary Note Regarding Forward-Looking Statements” contained elsewhere in this Quarterly Report on Form 10-Q and those discussed in Item 1A "Risk Factors" of our Annual Report on Form 10-K and other filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Our fiscal year end is the Sunday closest to December 31.

5 unchanged sentences

Our iconic portfolio of authentic, craft, and "better for you" brands, which includes Utz®, ON THE BORDER® , Zapp’s®, Golden Flake®, Good Health®, Boulder Canyon®, Hawaiian® Brand, and TORTIYAHS!®, among others, enjoys strong household penetration in the U.S., where our products can be found in approximately 48% of U.S.

households as of July 2, 2023.

We operate 15 manufacturing facilities across the U.S.

with a broad range of capabilities, and our products are distributed nationally to grocery, mass merchant, club, convenience, drug and other retailers through direct shipments, distributors, and approximately 2,200 DSD routes.

with a broad range of capabilities.

As of the end of the second fiscal quarter, our products are distributed nationally to grocery, mass merchant, club, convenience, drug and other retailers through direct shipments, distributors, and approximately 2,200 DSD routes.

Our company was founded in 1921 in Hanover, Pennsylvania, and benefits from over 100 years of brand awareness and heritage in the salty snack industry.

We have historically expanded our geographic reach and product portfolio organically and through acquisitions.

Based on 2022 retail sales, we are the second-largest producer of branded salty snacks in our core geographies.

Based on 2022 retail sales, we are the second-largest producer of branded salty snacks in our core geographies and ranked number four nationally.

Key Developments and Trends

2 unchanged sentences

salty snacks category, within the broader approximately $124 billion market for U.S.

snack foods as of April 2, 2023.

Retail sales of

the salty snacks category has grown 14.8% over the thirteen weeks ended April 2, 2023.

A recent study from Circana cites that 54% of consumers eat snacks to add excitement to their daily diet, up two points versus two years ago and that 49% of consumers snack three or more times per day, up four points versus two years ago.

snack foods as of July 2, 2023.

Retail sales of the salty snacks category has grown 11.9% over the thirteen weeks ended July 2, 2023.

A 2023 study from Circana cites that 54% of consumers eat snacks to add excitement to their daily diet, up two points versus two years ago and that 49% of consumers snack three or more times per day, up four points versus two years ago.

Additionally, the salty snacks category has historically benefited from favorable competitive dynamics, including low private label penetration and category leaders competing primarily through marketing and innovation.

We expect these consumer trends to continue to drive consistent retail sales growth for salty snacks for the foreseeable future.

For the thirteen weeks ended April 2, 2023, U.S.

For the thirteen weeks ended July 2, 2023, U.S.

retail sales for salty snacks based on Circana data increased by 11.9% versus the comparable prior year period.

In the same period, our retail sales increased 9.4% over the thirteen weeks ended April 2, 2023.

In the same period, our retail sales increased 8.8% over the thirteen weeks ended July 2, 2023.

Competition – The salty snack industry is highly competitive and includes many diverse participants.

2 unchanged sentences

We believe we compete effectively with respect to each of these factors.

Operating Costs – Our operating costs include raw materials, labor, manufacturing overhead, selling, distribution, and administrative expenses.

Operating Costs – Our operating costs include raw materials, labor, manufacturing overhead, and selling, distribution, and administrative expenses.

We manage these expenses through annual cost saving and productivity initiatives, sourcing and hedging programs, pricing actions, refinancing and tax optimization.

1 unchanged sentence

Taxes – On March 27, 2020, The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted which included various tax provisions with retroactive effect.

The CARES Act is an approximately $2 trillion emergency economic stimulus package in response to the COVID-19 outbreak, which among other things contains numerous income tax provisions.

The CARES Act is an approximately $2 trillion emergency economic stimulus package in response to the coronavirus (“COVID-19”) outbreak, which among other things contains numerous income tax provisions.

Some of these tax provisions are effective retroactively for years ending before the date of enactment.

7 unchanged sentences

however, we believe it is unlikely to have a material effect on our consolidated financial position, results of operations, and cash flow.

Financing Costs and Exposure to Interest Rate Changes – As of April 2, 2023, we had $884.6 million in variable rate indebtedness, up from $867.4 million at January 1, 2023.

As of April 2, 2023 our variable rate indebtedness is benchmarked to the Term SOFR Screen Rate (‘SOFR”).

As of April 2, 2023, we have entered into interest rate hedges covering $587.3 million of debt, of which, $500.0 million is covered through September 30, 2026 and a hedge that covers the outstanding principal balance of the Real Estate Term Loan through September 2032.

Financing Costs and Exposure to Interest Rate Changes – As of July 2, 2023, we had $861.7 million in variable rate indebtedness, down from $867.4 million at January 1, 2023.

As of July 2, 2023 our variable rate indebtedness is benchmarked to the Term SOFR Screen Rate (‘SOFR”).

As of July 2, 2023, we have entered into interest rate hedges covering $586.4 million of debt, of which, $500.0 million is covered through September 30, 2026 and a hedge that covers the outstanding principal balance of the Real Estate Term Loan (defined below) through September 2032.

Our interest rate hedge strategy has limited some of our exposure to changes in interest rates.

1 unchanged sentence

We continue to use low-cost, short- and long-term debt to finance our ongoing working capital, capital expenditures and other investments and dividends.

Our weighted average interest rate for the thirteen weeks ended April 2, 2023 was 5.6%, up from 3.9% during the thirteen weeks ended April 3, 2022.

Our weighted average interest rate for the twenty-six weeks ended July 2, 2023 was 5.7%, up from 4.1% during the twenty-six weeks ended July 3, 2022.

We have used interest rate swaps to help manage some of our exposure to interest rate changes, which can drive cash flow variability related to our debt.

10 unchanged sentences

Our hedging techniques, such as forward contracts, limit the impact of fluctuations in the cost of our principal raw materials; however, we may not be able to fully hedge against commodity cost changes, where there is a limited ability to hedge, and our hedging strategies may not protect us from increases in specific raw material costs.

Toward the end of fiscal year 2020, we began to experience an increase in pricing in certain commodity costs that continued to rise throughout fiscal years 2021 and 2022, and have continued to rise in the first quarter of 2023.

Continued commodity cost increases may adversely impact our net income.

6 unchanged sentences

Independent Operator Conversions

Our DSD distribution is executed via Company-owned routes operated by route sales professionals ("RSP" or "RSPs"), and third-party routes managed by IOs.

Our DSD distribution is executed via Company-owned routes operated by route sales professionals ("RSPs"), and third-party routes managed by IOs.

We have used the IO and RSP models for more than a decade.

In fiscal year 2017, we embarked on a multi-year strategy to convert all company-owned RSP routes to the IO model.

The mix between IOs and RSPs was approximately 96% and 4%, respectively, as of April 2, 2023 versus 89% and 11% ratio for IOs and RSPs, respectively, as of April 3, 2022.

We anticipate continuing to work to complete substantially all remaining RSPs conversions during fiscal year 2023.

The mix between IOs and RSPs was approximately 93% and 7%, respectively, as of July 2, 2023 versus 91% and 9% ratio for IOs and RSPs, respectively, as of July 3, 2022.

We anticipate completing substantially all remaining RSPs conversions during fiscal year 2023.

The conversion process involves selling distribution rights of a defined route to an IO.

As we convert a large number of routes in a year, there is a meaningful decrease in the selling, distribution administrative costs that we previously incurred on RSPs and a corresponding increase in discounts paid to IOs to cover their costs to distribute our product.

As we convert a large number of routes in a year, there is a meaningful decrease in the selling, distribution, and administrative costs that we previously incurred on RSPs and a corresponding increase in discounts paid to IOs to cover their costs to distribute our product.

The net impact is a reduction in selling and distribution expenses and a decrease in net sales and gross profit.

1 unchanged sentence

Results of Operations

The following tables present selected unaudited financial data for the thirteen weeks ended April 2, 2023 and April 3, 2022.

(in thousands) Thirteen weeks ended April 2, 2023 Thirteen weeks ended April 3, 2022

The following tables present selected unaudited financial data for the thirteen and twenty-six weeks ended July 2, 2023 and July 3, 2022:

(in thousands) Thirteen weeks ended July 2, 2023 Thirteen weeks ended July 3, 2022 Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

Net sales $ 362,853 $ 350,147 $ 714,286 $ 690,914

6 unchanged sentences

(Loss) gain on sale of assets, net (279) 1,375 (787) 1,742

Loss from operations (2,098) (22,487)

Income (loss) from operations 2,661 5,292 563 (17,195)

Other (expense) income

Interest expense (15,019) (10,727) (29,397) (19,830)

Other income 1,615 520

(Loss) gain on remeasurement of warrant liability (2,232) 1,944

Other expense, net (14,995) (6,639)

Other income (expense) 272 (645) 1,887 (125)

Gain on remeasurement of warrant liability 2,808 5,760 576 7,704

Other (expense) income, net (11,939) (5,612) (26,934) (12,251)

Loss before taxes (9,278) (320) (26,371) (29,446)

Income tax (benefit) expense (2,611) 2,772

Net loss (14,482) (31,898)

Income tax benefit (725) (2,865) (3,336) (93)

Net (loss) income (8,553) 2,545 (23,035) (29,353)

Net loss attributable to noncontrolling interest 4,429 634 9,784 14,962

Net loss attributable to controlling interest $ (9,127) $ (17,570)

Thirteen weeks ended April 2, 2023 versus thirteen weeks ended April 3, 2022

Net sales was $351.4 million and $340.8 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

Net sales for the thirteen weeks ended April 2, 2023 increased $10.7 million or 3.1% over the comparable period in 2022.

The increase in net sales for the thirteen weeks ended April 2, 2023 was primarily related to the flow through of pricing action that were taken in 2022 in response to inflationary pressures accounted for a 9.7% increase in net sales, offset by volume/mix decline of 5.7%, as well as 0.9% decline in net sales related to continued IO conversions.

IO discounts increased to $42.2 million for the thirteen weeks ended April 2, 2023 from $34.2 million for the corresponding thirteen weeks ended April 3, 2022.

Excluding the impacts of increased IO discounts related to RSP to IO conversion, organic net sales increased 4.0% for the thirteen weeks ended April 2, 2023 versus the corresponding period in 2022.

Net sales are evaluated based on classification as Power and Foundation brands.

Net (loss) income attributable to controlling interest $ (4,124) $ 3,179 $ (13,251) $ (14,391)

Thirteen weeks ended July 2, 2023 versus thirteen weeks ended July 3, 2022

Net sales was $362.9 million and $350.1 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively.

Net sales for the thirteen weeks ended July 2, 2023 increased $12.7 million or 3.6%, over the comparable period in 2022.

The increase in net sales for the thirteen weeks ended July 2, 2023 was primarily related to the flow through of pricing action that were taken in 2022 in response to inflationary pressures which accounted for a 6.0% increase in net sales, offset by volume/mix decline of 1.7%, which was driven by SKU rationalization that the Company estimated impacted net sales by 3.5%, as well as 0.7% decline in net sales related to continued IO conversions.

IO discounts increased to $45.8 million for the thirteen weeks ended July 2, 2023 from $39.3 million for the corresponding thirteen weeks ended July 3, 2022.

Excluding the impacts of increased IO discounts related to RSP to IO conversion, organic net sales increased 4.3% for the thirteen weeks ended July 2, 2023 versus the corresponding period in 2022.

Net sales are evaluated based on brand classification as a Power or Foundation brand.

Power brands include our iconic heritage Utz brand and iconic ON THE BORDER® brand;

4 unchanged sentences

Garcia®, as well as other partner and private label brands.

For the thirteen weeks ended April 2, 2023 Power brand sales increased by approximately 8.7%, while Foundation brand sales decreased by approximately 4.9% from the thirteen weeks ended April 3, 2022.

The increase in Power brand sales is due primarily to favorable pricing action, offset by volume decline and continued IO conversions.

For the thirteen weeks ended July 2, 2023, Power brand sales increased by approximately 11.5%, while Foundation brand sales decreased by approximately 8.9% from the thirteen weeks ended July 3, 2022.

The increase in Power brand sales is due primarily to favorable pricing action, partially offset by continued IO conversions.

Foundation brand sales decrease was primarily driven by volume decline and continued IO conversion, partially offset by certain pricing initiatives.

The Company's volume decline for the thirteen weeks ended July 2, 2023 was driven by SKU rationalization focused on a reduction in private label and partner brand products as well as the lapping of very strong sales during the thirteen weeks ended July 3, 2022.

In addition, volume was also impacted by weight outs and changes to price pack architecture.

Cost of goods sold and Gross profit

Gross profit was $117.4 million and $111.5 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively.

The increase in gross profit for thirteen weeks ended July 2, 2023 was driven by the impact of productivity and pricing initiatives which were put in place to help reduce the impact of continued commodity and wage inflation which hindered gross profit.

Also impacting gross profit was the decline in volume which was impacted by SKU rationalization focused on a reduction in private label and partner brand products as well as by weight outs and changes to price pack architecture.

Our gross profit margin was 32.4% for the thirteen weeks ended July 2, 2023 versus 31.9% for the thirteen weeks ended July 3, 2022.

The increase in gross profit margin was primarily driven by favorable price realization from pricing initiatives and the impact of productivity initiatives, offset primarily by higher commodity and wage inflation, and transitory higher inbound freight costs and lower fixed overhead absorption due to volume decline and network optimization.

Additionally, IO discounts increased to $45.8 million for the thirteen weeks ended July 2, 2023 from $39.3 million for the thirteen weeks ended July 3, 2022.

IO conversions contributed to a gross profit decline of $2.5 million, or a gross profit margin of 0.7%, and the remaining IO discount growth was driven by pricing actions.

Selling, distribution, and administrative expense

Selling, distribution, and administrative expenses were $114.5 million and $107.6 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, resulting in an increase of $6.8 million, or 6.4% over the corresponding period in fiscal year 2022.

The increase in expenses for the thirteen weeks ended July 2, 2023 compared to the thirteen weeks ended July 3, 2022 was primarily attributable to the $7.6 million of impairment expense and the $1.3 million of severance expense related to the closure of the manufacturing operation at the Birmingham Facility as discussed in Note 3.

"Property, Plant, and Equipment, Net." During the thirteen weeks ended July 2, 2023, the Company also recognized a liability of $4.7 million related to a contract termination with a co-manufacturer, which is recorded in the administrative line on the Consolidated Statement of Operations and Comprehensive Income (Loss).

This agreement was a continuation of the Company's response to shifting production from a manufacturing facilities that was damaged by a natural disaster in 2021.

(Loss) gain on sale of assets

(Loss) gain on sale of assets was $(0.3) million and $1.4 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectivel y.

Th e Company has continued to convert company-owned routes to IO routes during the thirteen weeks ended July 2, 2023, offsetting the sales price by the respective route intangible asset.

Other (expense) income, net

Other (expense) income, net was expense of $(11.9) million for the thirteen weeks ended July 2, 2023 compared to expense of $(5.6) million for the thirteen weeks ended July 3, 2022.

The increase in other expense for the thirteen weeks ended July 2, 2023 was primarily due to a $2.8 million gain from the remeasurement of warrant liability for the thirteen weeks ended July 2, 2023 versus a gain of $5.8 million for the thirteen weeks ended July 3, 2022.

Also significant was interest expense of $15.0 million for the thirteen weeks ended July 2, 2023 compared to $10.7 million for the thirteen weeks ended July 3, 2022.

The additional increase in interest expense is primarily attributable to the additional equipment loans and the Real Estate Loans, as well as increasing interest expense rates, which impacted the portion of debt that the Company has not hedged.

Inco me tax benefit was $0.7 million and $2.9 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively.

Twenty-six weeks ended July 2, 2023 versus twenty-six weeks ended July 3, 2022

Net sales was $714.3 million and $690.9 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

Net sales for the twenty-six weeks ended July 2, 2023 increased $23.4 million or 3.4% over the comparable period in 2022.

The increase in net sales for the twenty-six weeks ended July 2, 2023 was primarily related to the flow-through of pricing actions that were taken in 2022 in response to inflationary pressures which accounted for a 7.8% increase in net sales, offset by volume/mix decline of 3.6%, as well as 0.8% decline in net sales related to continued IO conversions.

IO discounts increased to $88.0 million for the twenty-six weeks ended July 2, 2023 from $73.5 million for the corresponding twenty-six weeks ended July 3, 2022.

Excluding the impacts of increased IO discounts related to RSP to IO conversion, organic net sales increased 4.2% for the twenty-six weeks ended July 2, 2023 versus the corresponding period in 2022.

Net sales are evaluated based on brand classification as a Power or Foundation brand.

Power brands include our iconic heritage Utz brand and iconic ON THE BORDER® brand;

craft brands such as Zapp’s ®, Golden Flake ® Pork Skins, TORTIYAHS!, and Hawaiian ®;

"better for you" brands such as Good Health ® and Boulder Canyon ®;

and select licensed brands such as TGI Fridays ®.

Our Foundation brands are comprised of several regional brands, including Bachman ®, Golden Flake ® Chips and Cheese, Tim’s Cascade ® Snacks , Snyder of Berlin ®, and " Dirty" Potato Chips®, R.W.

Garcia®, as well as other partner and private label brands.

For the twenty-six weeks ended July 2, 2023, Power brand sales increased by approximately 9.8%, while Foundation brand sales decreased by approximately 7.6% from the twenty-six weeks ended July 3, 2022.

The increase in Power brand sales is due primarily to favorable pricing actions, offset by continued IO conversions.

Foundation brand sales decrease was primarily driven by volume decline and continued IO conversion, offset by certain pricing initiatives.

The Company's volume declined for the thirteen weeks ended April 2, 2023 compared to the lapping of a very strong thirteen weeks ended April 3, 2022.

In addition, volume was also impacted by weight outs and price pack architecture, as well as SKU rationalization focused on a reduction in private label and partner brand products.

The Company's volume declined for the twenty-six weeks ended July 2, 2023 compared to the lapping of a very strong twenty-six weeks ended July 3, 2022, and was impacted by significant SKU rationalization focused on a reduction in private label and partner branded products as well as by weight outs and changes to price pack architecture.

Cost of goods sold and Gross profit

Gross profit was $104.5 million and $103.8 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

The increase in gross profit for thirteen weeks ended April 2, 2023 was driven by pricing initiatives which were put in place to help reduce the impact of continued commodity, transportation, and wage inflation which hindered gross profit partially offset by volume decline.

Our gross profit margin was 29.7% for the thirteen weeks ended April 2, 2023 versus 30.5% for the thirteen weeks ended April 3, 2022.

The decline in gross profit margin was primarily driven by commodity and wage inflation and lower fixed overhead absorption, offset by the impact of productivity initiatives.

Additionally, IO discounts increased to $42.2 million for the thirteen weeks ended April 2, 2023 from $34.2 million for the thirteen weeks ended April 3, 2022.

IO conversions contributed to a gross profit decline of $3.0 million, or a gross profit margin of 0.9%, and the remaining IO discount growth was driven pricing actions.

Apart from the IO discount impact growth the Company's margins over the thirteen weeks ended April 2, 2023 was comparable to margins for the thirteen weeks ended April 3, 2022.

Gross profit was $221.9 million and $215.3 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

The increase in gross profit for the twenty-six weeks ended July 2, 2023 was driven by pricing initiatives which were put in place to help reduce the impact of continued commodity, transportation, and wage inflation which hindered gross profit partially offset by volume decline.

Our gross profit margin was 31.1% for the twenty-six weeks ended July 2, 2023 versus 31.2% for the twenty-six weeks ended July 3, 2022.

The decline in gross profit margin was primarily driven by commodity and wage inflation, transitory higher inbound freight costs and lower fixed overhead absorption due in part to our network optimization, offset by the impact of productivity initiatives.

Additionally, IO discounts increased to $88.0 million for the twenty-six weeks ended July 2, 2023 from $73.5 million for the twenty-six weeks ended July 3, 2022.

IO conversions contributed to a gross profit decline of $5.7 million, or a gross profit margin of 0.8%, and the remaining IO discount growth was driven by pricing actions.

Apart from the IO discount impact, growth of the Company's margins over the twenty-six weeks ended July 2, 2023 was comparable to margins for the twenty-six weeks ended July 3, 2022.

Selling, distribution, and administrative expense

Selling, distribution, and administrative expenses were $106.1 million and $126.7 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively resulting in a decrease of $(20.6) million or (16.2)% over the corresponding period in fiscal year 2022.

The decrease in expenses for the thirteen weeks ended April 2, 2023 compared to the thirteen weeks ended April 3, 2022 was primarily attributable to the comparable period having higher acquisition and integration costs related to the buyout of multiple distributors, which were accounted for as contract terminations, and resulted in expense of $23.0 million during the thirteen weeks ended April 3, 2022.

The thirteen weeks ended April 2, 2023 included impairments of $1.9 million related to the impairment of fixed assets that were damaged in a natural disaster.

The thirteen weeks ended April 3, 2022 included other contract termination expense and related impairments which totaled $2.6 million.

Excluding these items selling, distribution, and administrative expenses increased by 3.1% for the thirteen weeks ended April 2, 2023 compared to the corresponding period in fiscal year 2022.

Selling, distribution, and administrative expenses were $220.5 million and $234.3 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively, resulting in a decrease of $(13.7) million or (5.9)%, over the corresponding period in fiscal year 2022.

The decrease in expenses for the twenty-six weeks ended July 2, 2023 compared to the twenty-six weeks ended July 3, 2022 was primarily attributable to the comparable period having higher acquisition and integration costs related to the buyout of multiple distributors, which were accounted for as contract terminations, and resulted in expense of $23.0 million during the twenty-six weeks ended July 3, 2022.

The selling, distribution and administrative expense for the twenty-six weeks ended July 3, 2022 included other contract termination expense and related impairments which totaled $2.6 million.

The selling, distribution and administrative expense for the twenty-six weeks ended July 2, 2023 included impairments of $9.5 million related to the impairment of fixed assets, primarily related to the closing of the Manufacturing Facility.

The Company also recognized a liability of $4.7 million related to a contract termination with a co-manufacturer, which is recorded in the administrative line on the Consolidated Statement of Operations and Comprehensive Income (Loss) during the twenty-six weeks ended July 2, 2023.

This agreement was a continuation of the Company's response to shifting production from a manufacturing facilities that was damaged by a natural disaster in 2021.

Excluding these items selling, distribution, and administrative expenses decreased by 1.12% for the twenty-six weeks ended July 2, 2023 compared to the corresponding period in fiscal year 2022.

We believe that the distributor buyouts will help drive increased future profitability and allow us to better serve our customers.

1 unchanged sentence

(Loss) gain on sale of assets

(Loss) gain on sale of assets was $(0.5) million and $0.4 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectivel y.

(Loss) gain on sale of assets was $(0.8) million and $1.7 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectivel y.

Th e Company has continued to convert company-owned routes to IO routes during the first fiscal quarter of 2022, offsetting the sales price by the respective route intangible asset.

The loss during the thirteen weeks ended April 2, 2023 was primarily related to some small distributor buyouts where a buyout premium was allocated to an asset purchase and sold.

Other expense, net

Other expense, net was $15.0 million and $6.6 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

The decrease in expense for the thirteen weeks ended April 2, 2023 was primarily due to a $2.2 million loss from the remeasurement of warrant liability for the thirteen weeks ended April 2, 2023 versus a gain of $1.9 million for the thirteen weeks ended April 3, 2022.

Also significant was interest expense of $14.4 million for the thirteen weeks ended April 2, 2023 compared to $9.1 million for the thirteen weeks ended April 3, 2022.

The loss during the twenty-six weeks ended July 2, 2023 was primarily related to some small distributor buyouts where a buyout premium was allocated to an asset purchase and sold.

Other (expense) income, net

Other expense, net was $(26.9) million and $(12.3) million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

The increase in expense was driven by interest expense of $29.4 million for the twenty-six weeks ended July 2, 2023 compared to $19.8 million for the twenty-six weeks ended July 3, 2022.

The additional increase in interest expense is primarily attributable to the additional equipment loan and the Real Estate Loan.

Another significant driver increasing interest expense relates to an increase in interest rates, which impacted the portion of debt that the Company has not hedged.

Inco me tax (benefit) expense was $(2.6) million and $2.8 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

Also significant was a $0.6 million gain from the remeasurement of warrant liability for the twenty-six weeks ended July 2, 2023 compared to a gain of $7.7 million for the twenty-six weeks ended July 3, 2022.

Inco me tax benefit was $(3.3) million and $(0.1) million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

Non-GAAP Financial Measures

3 unchanged sentences

The adjustments generally fall within the categories of non-cash items, acquisition and integration costs, business transformation initiatives, and financing-related costs.

We believe the non-GAAP measures should always be considered along with the related U.S.

GAAP financial measures.

We believe the non-GAAP measures should always be considered along with the related financial measures prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

We have provided the reconciliations between the U.S.

14 unchanged sentences

We also report Adjusted EBITDA as a percentage of Net Sales as an additional measure for investors to evaluate our Adjusted EBITDA margins on Net Sales.

The following table provides a reconciliation from net (loss) to EBITDA and Adjusted EBITDA for the thirteen weeks ended April 2, 2023 and April 3, 2022:

(dollars in millions) Thirteen weeks ended April 2, 2023 Thirteen weeks ended April 3, 2022

Net loss $ (14.5) $ (31.9)

The following table provides a reconciliation from net income (loss) to EBITDA and Adjusted EBITDA for the thirteen and twenty-six weeks ended July 2, 2023 and July 3, 2022:

(dollars in millions) Thirteen weeks ended July 2, 2023 Thirteen weeks ended July 3, 2022 Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

Net income (loss) $ (8.6) $ 2.5 $ (23.0) $ (29.4)

Plus non-GAAP adjustments:

3 unchanged sentences

Interest Income (IO loans) (1)

(0.5) (0.4) (0.9) (0.9)

EBITDA 25.5 32.3 42.6 34.0

Certain Non-Cash Adjustments (2)

8.5 4.8 17.7 8.3

Acquisition and Integration (3)

3.7 7.2 7.4 36.0

Business Transformation Initiatives (4)

10.3 3.6 18.5 7.9

Financing-Related Costs (5)

Loss (Gain) on Remeasurement of Warrant Liability (6)

— 0.1 0.1 0.2

(Gain) Loss on Remeasurement of Warrant Liability (6)

(2.8) (5.8) (0.6) (7.7)

Adjusted EBITDA $ 45.2 $ 42.2 $ 85.7 $ 78.7

3 unchanged sentences

(2) Certain Non-Cash Adjustments are comprised primarily of the following:

Incentive programs – The Company incurred $4.6 million and $1.4 million of share-based compensation expense, that was awarded to associates and directors, and compensation expense associated with the employee stock purchase plan for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

Asset Impairments and Write-Offs — For the thirteen weeks ended April 2, 2023, the Company recorded an adjustment for an impairment of $1.9 million related to fixed assets.

During the thirteen weeks ended April 3, 2022, the Company recorded an impairment of $2.0 million related to the termination of distribution agreements.

Incentive programs – The Company incurred $3.4 million and $3.3 million of share-based compensation expense, that was awarded to associates and directors, and compensation expense associated with the employee stock purchase plan for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company incurred $8.1 million and $4.8 million of share-based compensation, that was awarded to associates and directors, and compensation expense associated with the employee stock purchase plan for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

Asset Impairm ents and Write-Offs — For the thirteen weeks ended July 2, 2023, the Company recorded an adjustment for an impairment of $7.6 million r elated to fixed assets.

During the twenty-six weeks ended July 2, 2023, the Company recorded impairments totaling $9.6 million.

During the twenty-six weeks ended July 3, 2022, the Company recorded an impairment of $2.0 million related to the termination of a distribution agreements.

Purchase Commitments and Other Adjustments – We have purchase commitments for specific quantities at fixed prices for certain of our products’ key ingredients.

To facilitate comparisons of our underlying operating results, this adjustment was made to remove the volatility of purchase commitment related unrealized gains and losses.

The adjustment related to Purchase Commitment and Other non-cash adjustments were $2.7 million and $0.1 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

The adjustment related to Purchase Commitment and Other non-cash adjustment (gains) losses were $(2.5) million and $1.5 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively.

The twenty-six weeks ended July 2, 2023 and July 3, 2022 also included $0.0 million and $1.5 million of unrealized purchase commitment gains, respectively.

(3) Adjustment for Acquisition and Integration Costs – This is comprised of consulting, transaction services, and legal fees incurred for acquisitions and certain potential acquisitions, in addition to expenses associated with integrating recent acquisitions.

Such expenses were $4.9 million for the thirteen weeks ended April 2, 2023, as well as $1.2 million of income for the reduction of the Tax Receivable Agreement Liability associated with the Business Combination.

Charges related to the buyout of multiple distributors, which was accounted for as a contract termination resulting in expense of $23.0 million for the thirteen weeks ended April 3, 2022, along with other acquisitions an integration cost of $5.8 million.

Such expenses were $3.4 million and $8.3 million for the thirteen and twenty-six weeks ended July 2, 2023, respectively, as well as $0.3 million of expense and $0.9 million of income for the change of the Tax Receivable Agreement Liability associated with the Business Combination for the thirteen and twenty-six weeks ended July 2, 2023, respectively.

Charges related to the buyout of multiple distributors, which was accounted for as a contract termination resulted in expense of $23.0 million for the twenty-six week period ended July 3, 2022.

Additionally, other acquisitions and integration cost of $6.2 million and $12.0 million were recorded for the thirteen and twenty-six weeks ended July 3, 2022, respectively, also included are adjustment of $1.0 million and $1.0 million of expense for the increase of the Tax Receivable Agreement Liability associated with the Business Combination for the thirteen and twenty-six week period ended July 3, 2022, respectively.

(4) Business Transformation Initiatives Adjustment – This adjustment is related to consultancy, professional, and legal fees incurred for specific initiatives and structural changes to the business that do not reflect the cost of normal business operations.

In addition, gains and losses realized from the sale of distribution rights to IOs and the subsequent disposal of trucks, severance costs associated with the elimination of RSP positions, and ERP transition costs, fall into this category.

The Company incurred such costs of $8.2 million and $4.4 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

The Company incurred such costs of $5.6 million and $3.6 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, and $13.8 million and $7.9 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

Additionally, the thirteen and twenty-six weeks ended July 2, 2023 also includes expense of $4.7 million related to a contract termination.

This agreement was a continuation of the Company's response to shifting production from a manufacturing facilities that was damaged by a natural disaster in 2021.

(5) Financing-Related Costs – These costs include adjustments for various items related to raising debt and equity capital or debt extinguishment costs.

1 unchanged sentence

Liquidity and Capital Resources

The following table presents net cash provided by operating activities, investing activities and financing activities for the thirteen weeks ended April 2, 2023 and April 3, 2022.

(in thousands) Thirteen weeks ended April 2, 2023 Thirteen weeks ended April 3, 2022

The following table presents net cash provided by operating activities, investing activities and financing activities for the twenty-six weeks ended July 2, 2023 and July 3, 2022:

(in thousands) Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

Net cash used in operating activities $ (4,315) $ (26,268)

1 unchanged sentence

Net cash provided by financing activities $ 35,825 $ 51,754

For the thirteen weeks ended April 2, 2023, our consolidated cash balance, including cash equivalents, was $57.9 million or $15.0 million lower than at January 1, 2023.

Net cash used in operating activities for the thirteen weeks ended April 2, 2023 was $8.4 million compared to $36.0 million thirteen weeks ended April 3, 2022, with the difference largely driven by the payment of $20.2 million in the first quarter of 2022 related to the buyout of multiple distributors, which were accounted for as contract terminations.

The thirteen weeks ended April 2, 2023 also included a larger cash outflow related to the building of inventory compared to the prior year comparable period.

Cash used in investing activities for the thirteen weeks ended April 2, 2023 was $14.0 million driven by purchases of property and equipment, versus cash used in investing activity of $5.1 million for the thirteen weeks ended April 3, 2022.

Net cash provided by financing activities was $7.5 million for the thirteen weeks ended April 2, 2023, driven by a draw on the line of credit of $20.0 million, offset by the payment of dividends and distribution, and repayments on term debt and notes payable, versus net cash used in financing activities of $14.1 million for the thirteen weeks ended April 3, 2022, which was primarily a result of a draw on the line of credit of $20.0 million and other borrowings offset by payments of dividends and distributions.

For the twenty-six weeks ended July 2, 2023, our consolidated cash balance, including cash equivalents, was $73.7 million or $0.7 million higher than at January 1, 2023.

Net cash used in operating activities for the twenty-six weeks ended July 2, 2023 was $4.3 million compared to $26.3 million for the twenty-six weeks ended July 3, 2022, with the difference largely driven by the payment of $20.2 million in the first quarter of 2022 related to the buyout of multiple distributors, which were accounted for as contract terminations.

During the twenty-six weeks ended July 2, 2023 the accounts receivable growth and inventory build up was lower than the build up that took place during the twenty-six weeks ended July 3, 2022, but was largely offset by a decrease of accounts payable and accrued expenses and other as well as a build up of prepaid expenses and other assets.

Cash used in investing activities for the twenty-six weeks ended July 2, 2023 was $30.8 million, driven by purchases of property and equipment, versus cash used in investing activity of $47.3 million for the twenty-six weeks ended July 3, 2022.

Net cash provided by financing activities was $35.8 million for the twenty-six weeks ended July 2, 2023, driven by a draw on the line of credit of $61.0 million, offset by the payment of dividends and distribution, and repayments on term debt and notes payable, versus net cash used in financing activities of $51.8 million for the twenty-six weeks ended July 3, 2022, which was primarily a result of a draw on the line of credit of $29.8 million, proceeds from the issuance of shares of $28.0 million, and other borrowings on term debt and notes payable of $28.9 million, offset by payments on term debt and notes as well as dividends and distributions.

Financing Arrangements

4 unchanged sentences

On September 22, 2022, the ABL facility was amended to further increase the credit limit up to $175.0 million and replaced the interest rate benchmark from LIBOR to SOFR.

As of April 2, 2023 and January 1, 2023, $20.0 million and $0.0 million, respectively, were outstanding under this facility.

Availability under the ABL facility is based on a monthly accounts receivable and inventory borrowing base certification, which is net of outstanding letters of credit.

As of April 2, 2023 and January 1, 2023, $140.8 million and $163.0 million, respectively, was available for borrowing, net of letters of credit.

The ABL facility is also subject to unused line fees (0.5% at April 2, 2023) and other fees and expenses.

Standby letters of credit in the amount of $12.0 million have been issued as of April 2, 2023 and January 1, 2023.

As of July 2, 2023 and January 1, 2023, $96.6 million and $163.0 million, respectively, was available for borrowing, net of letters of credit.

The ABL facility is also subject to unused line fees (0.5% at July 2, 2023) and other fees and expenses and was set to mature on August 22, 2024 as of July 2, 2023.

On July 20, 2023 the ABL facility was further amended to increase the credit limit to $225.0 million and extend the maturity through the earlier of July 20, 2028, or 90 days prior to the maturity of the Term Loan B, as described further with Note 7.

"Long-Term" Debt, which would be October 22, 2027.

See Note 17." Subsequent Events" for additional details regarding this amendment.

Standby letters of credit in the amount of $14.3 million and $12.0 million have been issued as of July 2, 2023 and January 1, 2023, respectively.

The standby letters of credit are primarily issued for insurance purposes.

9 unchanged sentences

2, the Company raised $720 million in aggregate principal of Term Loan B ("Term Loan B") which bore interest at LIBOR plus 3.00%, and extended the maturity of the Bridge Credit Agreement to January 20, 2028.

The proceeds were used, together with cash on hand and proceeds from our exercised warrants, to redeem the outstanding principal amount of Term Loan B and Bridge Credit Agreement of $410 million and $358 million, respectively.

The proceeds were used, together with cash on hand and proceeds from the Company's exercised warrants, to redeem the outstanding principal amount of Term Loan B and Bridge Credit Agreement of $410 million and $358 million, respectively.

The refinancing was accounted for as an extinguishment.

12 unchanged sentences

Derivative Financial Instruments and Purchase Commitments”.

The Term Loan B and the ABL facility are collateralized by substantially all of the assets and liabilities of UBH and its subsidiaries excluding the real estate assets secured by the Real Estate Term Loan, including equity interests in certain of UBH’s subsidiaries.

The Term Loan B and the ABL facility are collateralized by substantially all of the assets and liabilities of UBH and its subsidiaries, excluding the real estate assets secured by the Real Estate Term Loan and including equity interests in certain of UBH’s subsidiaries.

The credit agreements contain certain affirmative and negative covenants as to operations and the financial condition of UBH and its subsidiaries.

UBH and its subsidiaries were in compliance with its financial covenants as of April 2, 2023.

UBH and its subsidiaries were in compliance with its financial covenants as of July 2, 2023.

Debt (in thousands)

Issue Date Principal Balance Maturity Date April 2, 2023 January 1, 2023

Issue Date Principal Balance Maturity Date July 2, 2023 January 1, 2023

Term loan B (1)

4 unchanged sentences

ABL facility (3)

October-27 61,000 —

Net impact of debt issuance costs and original issue discounts (9,221) (9,672)

5 unchanged sentences

4"), which replaced the interest rate benchmark from LIBOR to SOFR.

The weighted average interest rate on the Term Loan B debt for the thirteen weeks ended April 2, 2023 was 7.61%.

The weighted average interest rate on the Term Loan B debt, without consideration of the hedge, was 8.10% for the thirteen weeks ended July 2, 2023.

(2) In July 2021, the Company entered into two separate finance lease obligations with Banc of America Leasing & Capital, LLC, which have been treated as secured borrowing.

3 unchanged sentences

The Company generally utilizes the prime rate for amounts that the Company expects to pay down within 30 days.

The interest rate on the facility as of April 2, 2023 was 8.50%, under the prime rate.

The interest rate on the facility as of July 2, 2023 would have been 8.75%, under the prime rate.

The Company elects to use the LIBOR, prior to the amendment on September 22, 2022 which changed the reference rate to SOFR as described above, for balances that are expected to be carried longer than 30 days.

The interest rate on the ABL facility as of April 2, 2023 was 6.26%.

Other Notes Payable and Capital Leases

The interest rate on the ABL facility as of July 2, 2023 was 6.75%.

Other Notes Payable and Finance Leases

During the first fiscal quarter of 2022, the Company bought out and terminated the contracts of multiple distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and resulted in expense of $23.0 million for the thirteen weeks ended April 3, 2022.

The outstanding balance of these transactions was $0.5 million as of January 1, 2023, and was paid off during the thirteen weeks ended April 2, 2023.

During the first fiscal quarter of 2020, the Company purchased intellectual property that include a deferred purchase price of $0.5 million, of which $0.2 million and $0.3 million was outstanding as of April 2, 2023 and January 1, 2023, respectively.

These transactions were accounted for as contract terminations and resulted in expense of $23.0 million for the twenty-six weeks ended July 3, 2022.

The outstanding balance of these transactions was $0.5 million as of January 1, 2023, and was paid off during the twenty-six weeks ended July 2, 2023.

During the first fiscal quarter of 2020, the Company purchased intellectual property that includes a deferred purchase price of $0.5 million, of which $0.2 million and $0.3 million was outstanding as of July 2, 2023 and January 1, 2023, respectively.

Amounts outstanding under notes payable consisted of the following:

(in thousands) As of

April 2, 2023

As of January 1, 2023

6 unchanged sentences

From time to time, the Company sells notes receivable from IOs to a financial institution.

During the thirteen weeks ended April 2, 2023, the Company sold an additional $1.0 million of notes receivable from IOs on its books for $0.9 million to a financial institution.

During the twenty-six weeks ended July 2, 2023, the Company sold an additional $2.2 million of notes receivable from IOs on its books for $2.2 million to a financial institution.

Due to the structure of these transactions, they did not qualify for sale accounting treatment and the Company has recorded the notes payable obligation owed by the IOs to the financial institution on its books;

7 unchanged sentences

Interest expense consisted of the following:

(in thousands) Thirteen weeks ended April 2, 2023 Thirteen weeks ended April 3, 2022

(in thousands) Thirteen weeks ended July 2, 2023 Thirteen weeks ended July 3, 2022 Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

Company’s term loans, ABL facility, and other long-term debt $ 14,247 $ 10,073 $ 28,389 $ 18,404

5 unchanged sentences

The Company has outstanding purchase commitments for specific quantities at fixed prices for certain key ingredients to economically hedge commodity input prices.

These purchase commitments totaled $73.1 million as of April 2, 2023.

These purchase commitments totaled $110.4 million as of July 2, 2023.

The Company accrues for losses on firm purchase commitments in a loss position at the end of each reporting period to the extent that there is an active observable market.

The Company has recorded purchase commitment (losses) gains totaling $(2.7) million for the thirteen weeks ended April 2, 2023 and $0.0 million for the thirteen weeks ended April 3, 2022, respectively.

The Company has recorded purchase commitment gains (losses) totaling $2.4 million and $1.1 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, and $(0.3) million and $1.0 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

IO Guarantees-Off-Balance Sheet

The Company partially guarantees loans made to IOs by Cadence Bank for the purchase of routes.

The outstanding balance of loans guaranteed was $1.1 million and $1.5 million at April 2, 2023 and January 1, 2023, respectively, all of which was recorded by the Company as off balance sheet arrangements.

The outstanding balance of loans guaranteed was $0.9 million and $1.5 million at July 2, 2023 and January 1, 2023, respectively, all of which was recorded by the Company as off balance sheet arrangements.

The maximum amount of future payments the Company could be required to make under the guarantees equates to 25% of the outstanding loan balance up to $2.0 million.

2 unchanged sentences

The Company partially guarantees loans made to IOs by Bank of America for the purchase of routes.

The outstanding balance of loans guaranteed that were issued by Bank of America was $40.2 million and $36.0 million at April 2, 2023 and January 1, 2023, respectively, which are off balance sheet arrangements.

The outstanding balance of loans guaranteed that were issued by Bank of America was $42.9 million and $36.0 million at July 2, 2023 and January 1, 2023, respectively, which are off balance sheet arrangements.

As discussed in Note 7.

"Long-Term Debt", the Company also sold notes receivable on its books to Bank of America during fiscal years 2019, 2021, and 2022, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at April 2, 2023 and January 1, 2023 was $16.8 million and $17.9 million, respectively.

The outstanding balance of notes purchased by Bank of America at July 2, 2023 and January 1, 2023 was $16.6 million and $17.9 million, respectively.

Due to the structure of the transactions, the sale did not qualify for sale accounting treatment, and as such the Company records the notes payable obligation owed by the IOs to the financial institution on its Consolidated Balance Sheets;

5 unchanged sentences

The agreement with M&T Bank was amended in January 2020 so that the Company guaranteed up to 25% of the greater of the aggregate principal amount of loans outstanding on the payment date or January 1 st of the subject year.

The outstanding balance of loans guaranteed was $3.1 million and $3.4 million at April 2, 2023 and January 1, 2023, respectively, all of which were included in the Company's Consolidated Balance Sheets.

The outstanding balance of loans guaranteed was $2.7 million and $3.4 million at July 2, 2023 and January 1, 2023, respectively, all of which were included in the Company's Consolidated Balance Sheets.

These loans are collateralized by the routes for which the loans are made.

46 unchanged sentences

As we have early adopted Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment, we will record an impairment charge based on the excess of a reporting unit’s carrying amount over our fair value.

ASC 350, Goodwill and Other Intangible Assets also permits an entity to first assess qualitative factors to determine whether it is necessary to perform quantitative impairment tests for goodwill and indefinite-lived intangibles.

Goodwill and Other Intangible Assets (“ASC 350”) also permits an entity to first assess qualitative factors to determine whether it is necessary to perform quantitative impairment tests for goodwill and indefinite-lived intangibles.

If an entity believes, as a result of each qualitative assessment, it is more likely than not that goodwill or an indefinite-lived intangible asset is not impaired, a quantitative impairment test is not required.

We have identified the existing snack food operations as our sole reporting unit.

For the qualitative analysis performed, which took place on the first day of the fourth quarter of 2022, we have taken into consideration all the events and circumstances listed in FASB ASC 350, Intangibles—Goodwill and Other, in addition to other entity-specific factors that have taken place.

We have determined that there was no significant impact that affected the fair value of the reporting unit through April 2, 2023 .

For the qualitative analysis performed, which took place on the first day of the fourth quarter of 2022, we have taken into consideration all the events and circumstances listed in FASB ASC 350, in addition to other entity-specific factors that have taken place.

We have determined that there was no significant impact that affected the fair value of the reporting unit through July 2, 2023 .

T herefore, we have determined that it was not necessary to perform a quantitative goodwill impairment test for the reporting unit.

10 unchanged sentences

Our policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling and administrative expenses.

As of April 2, 2023 and January 1, 2023, no liability for unrecognized tax benefits was required to be reported.

As of July 2, 2023 and January 1, 2023, no liability for unrecognized tax benefits was required to be reported.

We do not expect any significant changes in our unrecognized tax benefits in the next year.

10 unchanged sentences

For quantitative and qualitative disclosures about market risk, see Item 7A.

"Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for the year ended January 1, 2023.

"Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K.

Our exposures to market risk have not changed materially since January 1, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis