What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-06-01 compared with 2025-05-30 · 138 added, 164 removed, 441 unchanged (41% of the section changed)

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This presence, combined with our supply chain expertise, integrated processing capabilities, and commitment to sustainability, enables us to deliver high-quality, customizable, and traceable value-added agriproducts essential to our customers’ success.

We have positioned our Company for long-term success by maximizing opportunities in the leaf tobacco business and investing in the growth of our plant-based ingredients platform.

In fiscal year 2025, we continued to enhance and increase the capabilities across our two segments:

We operate in two segments:

Tobacco Operations and Ingredients Operations.

• Our Tobacco Operations segment delivered very strong results in fiscal year 2025 and maintained its position as the leading global leaf tobacco supplier.

This segment primarily focuses on procuring and processing flue-cured, burley, dark air-cured, and oriental leaf tobacco for consumer product manufacturers.

• Our Ingredients Operations segment specializes in sourcing and processing vegetable and fruit ingredients, flavorings, and botanical extracts for consumer packaged goods manufacturers, retailers, and food and beverage companies.

In fiscal year 2025, this segment continued to increase its capabilities through the growth of its sales, marketing, and product development teams and the completion of a major expansion project that furthers our ability to deliver innovative, custom products to our customers.

Our Tobacco Operations segment primarily focuses on procuring and processing flue-cured, burley, dark air-cured, and oriental leaf tobacco for consumer product manufacturers.

Our Ingredients Operations segment, through the Universal Ingredients platform, produces and supplies a broad portfolio of products, including fruit and vegetable juices and concentrates, purees, dehydrated products, botanical extracts, flavorings, colorings, and other customized, value-added ingredient solutions to the food and beverage industry.

RESULTS OF OPERATIONS

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Executive Summary

Fiscal year 2025 was an exceptional year for Universal.

Revenues and operating income increased by 7% and 5%, respectively, in fiscal year 2025, compared to a very strong fiscal year 2024.

We executed against our business plan and increased revenue and operating income on a consolidated basis and for both of our operating segments.

The improved results for our Tobacco Operations segment were driven by continued strong demand from our customers, successful global tobacco marketing and procurement efforts, as well as improved volumes and quality of burley crops in Africa.

Our Ingredients Operations segment benefited from higher sales volumes, including increases in sales of value-added products, supported by increased capabilities from the growth in our sales, marketing, and product development teams, and the completion of the expansion project at our

Lancaster, Pennsylvania facility.

We are very encouraged by the interest we are seeing from customers in our newly produced and developed value-added ingredient products.

As we move into fiscal year 2026, we foresee continued strong demand for tobacco and larger tobacco crops shifting global markets to more balanced tobacco supply positions.

We are also continuing our progress with Universal Ingredients and supporting existing and new customers with our platform resources and our expanded and enhanced ingredients facility.

We are excited about the prospects for the year ahead as we seek to further maximize and optimize our tobacco business, grow our ingredients business, and strengthen our company to drive increasing value for all Universal stakeholders.

Our fiscal year 2026 performance reflected solid execution across much of our business amid a markedly different operating environment than fiscal year 2025.

Coming off what we believe was exceptionally strong performance for our Tobacco Operations segment in fiscal year 2025, our disciplined marketplace management helped mitigate the impact of oversupply for certain tobacco styles, resulting in only slightly lower Tobacco Operations segment revenues and sales volumes in fiscal year 2026 compared to fiscal year 2025.

Our Ingredients Operations segment delivered growth in revenues and sales volumes despite persistent market headwinds.

Fiscal year 2026 results were negatively impacted by a non-cash, goodwill impairment charge related to our Shank's operation, as well as increased tobacco inventory write-downs, primarily for non-wrapper, dark air-cured tobacco.

FINANCIAL HIGHLIGHTS

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Restructuring and impairment costs 1.8 10.6 (8.7) (83) %

Goodwill Impairment 41.1 — 41.1 NA

Operating income (as reported) 168.5 232.8 (64.3) (28) %

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Consolidated Results

Revenues and operating income for fiscal year 2025, increased by 7%, or $198.7 million, and by 5%, or $10.8 million, respectively, compared to fiscal year 2024, driven by improved performance in both the Tobacco Operations and Ingredients Operations segments.

Selling, general, and administrative expenses were down by 2%, or $5.3 million, on $12.2 million of higher recoveries of farmer advances, the absence of $4.8 million in costs related to the settlement of a value-added tax settlement program in fiscal year 2024, and $3.5 million of lower compensation costs, offset in part by $8.2 million of higher legal and professional fees and $7.2 million of higher sales commissions.

Adjusted operating income was up by 6%, or $13.1 million, in fiscal year 2025, compared to fiscal year 2024, largely on strong performance in the Tobacco Operations and Ingredients Operations segments.

Adjusted net income attributable to Universal Corporation was down by 9%, or $10.8 million, for fiscal year 2025, compared to fiscal year 2024, primarily on a $14.1 million pension settlement change and a $13.4 million increase in interest expense on higher average debt balances, offset in part by $8.3 million in increased equity in pretax earnings from unconsolidated affiliates.

Revenues for fiscal year 2026, decreased by 1%, or $22.8 million, compared to fiscal year 2025, on lower tobacco sales volumes and prices.

Operating income for fiscal year 2026, decreased by 28%, or $64.3 million, compared to fiscal year 2025, driven by inventory write-downs of $52.0 million, primarily of non-wrapper, dark air-cured tobacco, an increase of $32.2 million from fiscal year 2025, and a $41.1 million non-cash, goodwill impairment charge, related to our Shank's operation.

Selling, general, and administrative expenses were down by 2%, or $4.6 million, on $8.8 million of lower sales commissions, $5.1 million of lower compensation costs, and $3.5 million of favorable foreign currency comparisons, offset in part by $4.3 million of lower recoveries on advances to suppliers and $2.0 million of higher customer claims.

Adjusted operating income was down by 13%, or $32.0 million, in fiscal year 2026, compared to fiscal year 2025, largely on the inventory write-downs.

Net income attributable to Universal Corporation was down by 66%, or $62.4 million, for fiscal year 2026, compared to fiscal year 2025, primarily on the non-cash, goodwill impairment charge and the increase in inventory write-downs.

Tobacco Operations Segment

Revenues for the Tobacco Operations segment increased by 7%, or $169.9 million, and operating income for the segment increased by 8%, or $17.8 million, in fiscal year 2025, compared to fiscal year 2024.

Customer demand continued to be strong in fiscal year 2025, and tobacco procurement and marketing efforts were successful.

Tobacco average sales prices increased 12%, and tobacco sales volumes decreased slightly, about 4%, in fiscal year 2025, compared to fiscal year 2024.

Tobacco Operations segment results reflected larger, higher quality, better yielding crops from Africa;

higher sales of carryover crops;

weather-reduced crop sizes in Brazil and the United States in fiscal year 2025;

and $13.4 million of higher tobacco inventory write-downs, compared to fiscal year 2024.

Selling, general, and administrative expenses were $0.2 million lower in fiscal year 2025, compared to fiscal year 2024, largely on $12.2 million of higher net recoveries of farmer advances and the absence of $4.8 million in costs related to the settlement of a value-added tax settlement program in fiscal year 2024, offset in part by $7.2 million of higher sales commissions and $7.2 million of higher legal and professional fees.

Revenues for the Tobacco Operations segment decreased by 1%, or $32.3 million, in fiscal year 2026, compared to fiscal year 2025, on a 2% decline in both tobacco sales volumes and average tobacco sales prices, partially offset by an increase in third-party tobacco processing revenues and product mix.

Operating income for the segment decreased by 12%, or $28.6 million, in fiscal year 2026, compared to fiscal year 2025, as lower sales of dark air-cured tobacco and inventory write-downs primarily related to non-wrapper, dark air-cured tobacco more than offset firm demand for most tobacco styles and solid results from flue-cured and burley tobaccos.

Tobacco inventory write-downs of $43.4 million in fiscal year 2026, were up $24.7 million, compared to fiscal year 2025.

Softer than anticipated customer demand for certain styles of dark air-cured tobacco coupled with longer sales and inventory cycles characteristic of this type of tobacco drove the lower sales as well as the inventory write-downs of non-wrapper, dark air-cured tobacco in fiscal year 2026.

Selling, general, and administrative expenses were up 1%, or $2.2 million, in fiscal year 2026, compared to fiscal year 2025, largely on higher compensation costs of $4.5 million and higher provisions for advances to suppliers of $4.3 million, but partially offset by lower sales commissions of $8.6 million.

Corporate overhead allocation to the segment was $3.3 million lower in fiscal year 2026, as compared to fiscal year 2025, largely on lower allocated compensation costs.

Ingredients Operations Segment

Revenues and operating income for the Ingredients Operations segment increased by 9%, or $28.8 million, and 212%, or $8.4 million, respectively, in fiscal year 2025, compared to fiscal year 2024.

Results for fiscal year 2025 for the Ingredients Operations segment reflected increased sales of new products, higher sales in the fourth fiscal quarter due to anticipated tariffs, as well as lower inventory write-downs of $2.8 million, compared to fiscal year 2024.

We also continued to see a high level of interest in our value-added products and increased sales volumes for certain new products, particularly in the beverage category in fiscal year 2025, compared to fiscal year 2024, reflecting the effectiveness of platform investments.

Revenues for the Ingredients Operations segment increased by 3%, or $9.5 million, in fiscal year 2026, compared to fiscal year 2025, on increased sales volumes.

Operating income for the segment decreased by 73%, or $ 9.1 million, in fiscal year 2026, compared to fiscal year 2025, due to product mix, high fixed costs, including additional depreciation from our expanded production facility, as well as inventory write-downs of $8.6 million.

Steady performance across much of our ingredients business was offset by slower than anticipated sales growth, high fixed costs related to our expansion investments, and inventory write-downs, at our Shank's operation.

Persistent customer market headwinds, including tariff impacts and broader softness in the

consumer-packaged-goods sector, impacted demand at Shank's for both traditional core products and new offerings in fiscal year 2026.

Selling, general, and administrative expenses were down 6%, or $3.1 million, in fiscal year 2026, compared to fiscal year 2025, largely on lower compensation costs of $1.5 million and amortization of intangibles of $1.8 million.

Corporate overhead allocation to the segment was 4%, or $0.4 million, lower in fiscal year 2026, compared to fiscal year 2025, largely on lower allocated compensation accruals.

Additional Items

Cost of goods sold increased by 8%, or $186.2 million, in fiscal year 2025, compared to fiscal year 2024, largely on higher tobacco prices and a $10.5 million increase in inventory write-downs.

Restructuring and impairment costs of $10.6 million in fiscal year 2025 were related to the previously announced consolidation of the Company’s European tobacco sheet operations.

In March 2025, we completed a pension de-risking transaction or “pension lift-out” to transfer approximately $47 million of our Company-sponsored defined benefit pension plan obligations and assets to a third-party insurer through the purchase of a non-participating annuity.

The obligations transferred to the third-party insurer covered the respective benefit obligations for a subset of retirees currently receiving benefit payments.

The transaction triggered settlement accounting that required us to immediately recognize a portion of the accumulated comprehensive losses associated with the defined benefit pension plan.

The non-cash pension settlement charge of $14.1 million was recognized in our consolidated statements of income for the fiscal year ended March 31, 2025.

Cost of goods sold increased by 1%, or $13.8 million, in fiscal year 2026, compared to fiscal year 2025, largely on a $32.2 million increase in inventory write-downs partially offset by lower tobacco prices.

A non-cash, goodwill impairment charge of $41.1 million was recognized in fiscal year 2026.

Restructuring and impairment costs of $10.6 million in fiscal year 2025 were related to the consolidation of the Company’s European tobacco sheet operations.

A non-cash pension settlement charge of $14.1 million was recognized in fiscal year 2025.

The consolidated effective tax rate for fiscal year 2026 was 45.5%.

The consolidated effective tax rate for fiscal year 2025 was 26.6%.

The consolidated effective tax rate for fiscal year 2025 was higher than the consolidated tax rate for fiscal year 2024 due to various factors, including the mix and timing of domestic and foreign earnings, discrete items, and the effect of exchange rate changes on taxes coupled with an minimal income tax benefit associated with the restructuring and impairment costs recognized for the consolidation of the sheet operations in fiscal year 2025.

The consolidated effective tax rate for fiscal year 2026 was higher than the consolidated tax rate for fiscal year 2025 due to various factors, including the mix and timing of domestic and foreign earnings, discrete items including increased withholding taxes on undistributed earnings in Brazil, and the tax deductibility of certain items.

Sustainability

Universal released its 2024 Sustainability Report in December 2024, highlighting our efforts in advancing energy efficiency, strengthening supply chain resiliency and continuing to be a strong partner for its farming communities.

Universal’s business strategy integrates responsible business practices, and we believe our commitment to sustainability is a competitive advantage in the global marketplace.

As disclosed in our 2024 Sustainability Report, we continue to support our supply chain sustainability goals and have substantially met our existing targets of zero child labor, appropriate labor accommodations, farm worker minimum wage payments, and personal protective equipment access.

Universal’s leaf technicians made over 1.8 million visits to more than 175,000 contracted farmers to maintain our visibility and traceability in our supply chain.

We also continue to enhance transparency and collaboration with our stakeholders by reporting to the Sustainable Tobacco Program.

Universal has trained over 175,000 farmers on Good Agricultural Practices and Agricultural Labor Practices to advance environmental and human rights best practices throughout our contracted farmer base.

We published our Fiscal Year 2025 Sustainability Report in January 2026, highlighting progress across key environmental and supply chain priorities.

In fiscal year 2025, Universal increased renewable electricity consumption nearly sixfold year over year, with 17.7% of global electricity sourced from renewable energy, supporting our science-based emissions targets and commitment to achieve net-zero greenhouse gas emissions across the value chain by 2050.

We also continued to enhance supply chain transparency and farmer engagement through MobiLeaf TM , our digital farm data platform, and maintained direct relationships with more than 200,000 contracted farmers worldwide.

We concluded fiscal year 2026 by further embedding sustainability across our value chain, building on the progress achieved throughout the year to support our emissions reduction targets and long‑term value creation across Universal’s global operations.

This progress was reflected in our most recent Carbon Disclosure Project (CDP) results, released in the fourth quarter of fiscal year 2026, which highlight the success of our engagement with our suppliers.

We advanced to an “A” rating in Supplier Engagement, were recognized as a CDP Supplier Engagement Leader, and named to CDP’s Supplier Engagement A List.

Reconciliation of Certain non-GAAP Financial Measures

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Consolidated operating income $ 168,451 $ 232,797

Value-added tax settlement costs (1)

Goodwill impairment (1)

Restructuring and impairment costs (1)

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Net income attributable to Universal Corporation $ 32,637 $ 95,047

Value-added tax settlement costs (1)

Goodwill impairment (1)

Restructuring and impairment costs (1)

Pension settlement charge (2)

Interest expense for value-added tax settlement (1)

Total of non-GAAP adjustments to income before income taxes 42,894 24,674

Income tax benefit from value-added tax settlement (1)(4)

Income tax benefit from goodwill impairment (1)(3)

Income tax benefit from restructuring and impairment costs (1)(3)

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Diluted earnings per share (non-GAAP) $ 2.64 $ 4.63

(1) In the fourth quarter of fiscal year 2024, the Company utilized a voluntary government-sponsored value-added tax program in Brazil to settle a previously contested assessment.

The Company ’ s participation in the settlement program eliminates any future litigation regarding the matter.

(2) Restructuring and impairment costs are included in consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income available to Universal Corporation, and Adjusted diluted earnings per share.

See Note 3 for additional information.

(1) Restructuring and impairment costs are included in Consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income attributable to Universal Corporation, and Adjusted diluted earnings per share.

The three months ended March 31, 2026, included a $41.1 impairment charge to write-off the full amount of goodwill associated with Shank's, a component of the Ingredients Operations segment.

(2) In March 2025, the Company completed a pension de-risking transaction or “ pension lift-out ” to transfer approximately $47 million of its qualified domestic pension plan obligations and assets to a third-party insurer through the purchase of a non-participating annuity.

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We continued our financial policies and disciplines and returned funds to shareholders.

Due to market conditions in Brazil, we made the strategic decision in the quarter ended March 31, 2024, to accelerate tobacco purchases there.

Therefore, some of our working capital investments for the Brazil crop that typically would have been made in our fiscal year 2025, were made in our fiscal year 2024, reducing required working capital in fiscal year 2025.

Our liquidity and capital resource requirements are predominately short-term in nature and primarily relate to working capital for tobacco crop purchases, and our primary sources of liquidity are net cash flows provided by operating activities and our committed revolving credit facility.

Our working capital requirements were higher in fiscal year 2026, compared to fiscal year 2025.

Some working capital investments expected in fiscal year 2025 were made in fiscal year 2024 due to market conditions, which reduced working capital requirements in fiscal year 2025.

Working capital needs for tobacco crop purchases are seasonal within each geographic region.

The geographic dispersion and the timing of working capital needs permit us to anticipate our general level of cash requirements, although tobacco crop size, prices paid to farmers, shipment and delivery timing, and currency fluctuations affect requirements each year.

The geographic dispersion and the timing of working capital needs permit us to anticipate our general level of cash requirements, although tobacco crop sizes, prices paid to farmers, shipment and delivery timing, and currency fluctuations affect requirements each year.

Peak working capital requirements are generally reached during the first and second fiscal quarters.

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We also periodically may have large cash balances that we utilize to meet our working capital requirements.

We believe that our financial resources are adequate to support our anticipated capital and liquidity needs for the upcoming next 12 months and beyond.

We believe that our financial resources are adequate to support our anticipated capital and liquidity needs for the upcoming 12 months and beyond.

Our seasonal borrowing requirements primarily relate to purchasing tobacco crops in South America and Africa and can increase during the buying season for those crops by up to $400 million.

The funding required can vary significantly depending upon such factors as crop sizes, the price of leaf, the relative strength of the U.S.

The funding required can vary significantly depending upon such factors as crop sizes, the price of leaf tobacco, the relative strength of the U.S.

dollar, and the timing of shipments and customer payments.

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Our operations generated about $129.1 million in operating cash flows in fiscal year 2026.

That amount was about $401.6 million higher than the $74.6 million we used in fiscal year 2024, primarily on lower working capital requirements in fiscal year 2025, due to accelerated tobacco purchasing in Brazil in fiscal year 2024.

That amount was about $197.9 million lower than the $327.0 million we generated in fiscal year 2025, primarily on lower working capital requirements in fiscal year 2025, due to certain tobacco purchases that would have typically been made in fiscal year 2025 having been made in fiscal year 2024.

During the fiscal year ended March 31, 2026, we spent $53.5 million on capital projects, and we returned $81.3 million to shareholders in the form of dividends.

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Working Capital

Working capital at March 31, 2025, was about $1.4 billion, up about $14.8 million from last fiscal year’s level, as higher cash and account receivable balances largely offset lower tobacco inventory levels.

Tobacco inventories of $806.3 million at March 31, 2025, were down $264.2 million compared to inventory levels at the end of the prior fiscal year, due to accelerated tobacco purchases in fiscal year 2024.

Advances to suppliers were up $30.3 million at March 31, 2025, from prior year levels largely on higher crop costs in fiscal year 2025.

Working capital at March 31, 2026, was about $1.4 billion, up slightly, about $1.5 million from last fiscal year’s level.

Tobacco inventories of $832.4 million at March 31, 2026, were up $26.0 million compared to inventory levels at the end of the prior fiscal year, due to larger crop sizes in certain tobacco origins in fiscal year 2026.

Other inventories were up $15.7 million at March 31, 2026, from prior year levels, largely on purchase timing and prices of tobacco crop inputs.

Accounts receivable of $563.9 million at March 31, 2026, were down $62.0 million, compared to March 31, 2025, largely due to accounts receivable factoring.

We generally do not purchase material quantities of leaf tobacco on a speculative basis.

However, when we contract directly with tobacco farmers, we are obligated to buy all stalk positions, which may contain less marketable leaf styles.

Our uncommitted tobacco inventories decreased by approximately $17.2 million to $164.0 million, or about 20% of tobacco inventory, at March 31, 2025, compared to March 31, 2024 levels.

Our uncommitted tobacco inventories increased by approximately $58.3 million to $222.3 million, or about 27% of tobacco inventory, at March 31, 2026, compared to March 31, 2025 levels.

Uncommitted inventories at March 31, 2025, were $164.0 million, which represented 20% of tobacco inventory.

While we target committed tobacco inventory levels of 80% or more of total tobacco inventory, the level of these uncommitted inventories is influenced by timing of farmer deliveries and purchases of new crops, as well as the receipt of customer orders.

Uncommitted tobacco levels were outside our target range at March 31, 2026, due to delayed customer purchase commitments, but we expect them to be within our range during fiscal year 2027.

Capital Allocation

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We have been positioning our company for the future by investing in and growing our Universal Ingredients platform, while leveraging our position as the leading global leaf tobacco supplier to maximize opportunities in the leaf tobacco business.

We intend to continue to make disciplined investments to take advantage of growth opportunities in tobacco and in our

ingredients business.

We intend to continue to make disciplined investments to take advantage of growth opportunities in tobacco and in our ingredients business.

Through these actions, we believe we will be able to deliver enhanced shareholder value through earnings growth and the generation of free cash flow despite operating in a mature tobacco industry.

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We did not repurchase any shares of common stock in fiscal year 2026.

At March 31, 2025, our available authorization under our current share repurchase program was $100 million, and approximately 24.7 million common shares were outstanding.

At March 31, 2026, our available authorization under our current share repurchase program was $100 million.

Capital Spending

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During fiscal years 2026 and 2025, we invested $53.5 million and $62.6 million, respectively, in our property, plant, and equipment.

Capital expenditures in fiscal years 2025 and 2024 included investments to expand Universal Ingredients’ manufacturing capabilities in Lancaster, Pennsylvania.

Capital expenditures in fiscal year 2025 included investments to expand Universal Ingredients’ manufacturing capabilities in Lancaster, Pennsylvania.

Depreciation expense was approximately $44.2 million and $48.7 million, respectively, in fiscal years 2026 and 2025.

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Outstanding Debt and Other Financing Arrangements

At March 31, 2025, we had $1.1 billion in total debt outstanding, an increase of $38.4 million, compared to March 31, 2024 levels.

At March 31, 2026, we had $904.3 million in total debt outstanding, a decrease of $168.7 million, compared to March 31, 2025 levels.

We consider the sum of notes payable and overdrafts, long-term debt (including any current portion), and customer advances and deposits, less cash, cash equivalents, and short-term investments on our balance sheet to be our net debt.

We also consider our net debt plus shareholders’ equity to be our net capitalization.

Net debt decreased by $179.6 million to $816.6 million during the fiscal year ended March 31, 2025.

The decrease in net debt reflects lower working capital requirements.

Net debt as a percentage of net capitalization was 36% at March 31, 2025, down from 41% at March 31, 2024.

Net debt increased by $28.9 million to $845.5 million during the fiscal year ended March 31, 2026.

The increase in net debt reflects higher working capital requirements.

Net debt as a percentage of net capitalization was 37% at March 31, 2026, up from 36% at March 31, 2025.

On December 9, 2025, we entered into a new bank credit agreement that replaced our then-existing bank credit agreement.

The new unsecured bank credit agreement established a funded $275 million five-year term loan, a funded $345 million seven-year term loan, and a five-year committed revolving loan facility of $780 million.

Both term loans were fully funded at closing, require no amortization, and are prepayable without penalty prior to maturity.

The Company may request that the lenders extend the applicable maturity date for the revolving credit facility, the five-year term loan and/or the seven-year term loan for up to two one-year extensions, subject to satisfaction of certain terms and conditions and consent of the requisite number of lenders.

A $275 million five-year term loan and a $530 million revolving credit facility, both of which would have matured in December 2027, as well as a $375 million seven-year term loan, which would have matured in December 2029, were terminated and replaced in conjunction with the execution of the new bank credit agreement.

Our obligations under the new bank credit agreement are guaranteed by our subsidiary, Universal Ingredients.

The financial covenants under the new bank credit agreement require us to maintain certain levels of tangible net worth and observe restrictions on net debt levels.

These covenants are substantially the same as the covenants in the prior bank credit agreement.

Under applicable accounting guidance, a significant portion of the replacement of the term loans was accounted for as a debt modification rather than a debt extinguishment.

As of March 31, 2026, we had $730 million available under the committed revolving credit facility that will mature in December 2030, and we, together with our consolidated affiliates, had approximately $702 million in uncommitted lines of credit, of which approximately $465 million were unused and available to support seasonal working capital needs.

The financial covenants under our committed revolving credit facility require us to maintain certain levels of tangible net worth and observe restrictions on debt levels.

Based on our March 31, 2026 financial statements, we were in compliance with all financial covenants of our debt agreements as of March 31, 2026.

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Currently, we have interest rate swap agreements that convert the variable benchmark SOFR rates on $310 million of our two outstanding term loans to fixed rates.

With the swap agreements in place, the effective interest rates on $275 million of the five-year term loan and $345 million of the seven-year term loan were 5.96% and 6.16%, respectively, as of March 31, 2025.

These agreements were entered into to eliminate the variability of cash flows in the interest payments on our variable rate five- and seven-year term loans and are accounted for as cash flow hedges.

With the swap agreements in place, the effective interest rates on the $275 million five-year term loan and the $345 million seven-year term loan were 5.57% and 6.15%, respectively, as of March 31, 2026.

These agreements were entered into to eliminate the variability of cash flows in the interest payments on our variable rate five- and seven-year term loans

and are accounted for as cash flow hedges.

Under the swap agreements, we receive variable rate interest and pay fixed rate interest.

At March 31, 2026, the fair value of our open interest rate hedge swaps was a net asset of approximately $1 million.

We also enter derivative instruments from time to time to hedge certain foreign currency exposures, primarily related to forecasted purchases of tobacco, related processing costs, and crop input sales in Brazil, as well as our net monetary asset exposure in local currency there.

We also enter derivative instruments from time to time to hedge certain foreign currency exposures, primarily related to forecasted purchases of tobacco, related processing costs, and crop input sales, as well as our net monetary asset exposure in local currency.

We generally account for our hedges of forecasted tobacco purchases as cash flow hedges.

At March 31, 2025, the fair value of those open contracts was a net liability of approximately $5.2 million.

We also had other forward contracts outstanding that were not designated as hedges, and the fair value of those contracts was a net liability of approximately $1.1 million at March 31, 2025.

At March 31, 2026, the fair value of those open contracts was a net liability of approximately $14 thousand.

We also had other forward contracts outstanding that were not designated as hedges, and the fair value of those contracts was a net asset of approximately $0.2 million at March 31, 2026.

For additional information, see Note 10 to the consolidated financial statements in Item 8.

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The ABO and PBO are calculated on the basis of certain assumptions that are outlined in Note 12 to the consolidated financial statements in Item 8.

We expect to make no contributions to our ERISA-regulated pension plan

during the next fiscal year.

We expect to make no contributions to our ERISA-regulated pension plan during the next fiscal year.

It is our policy to regularly monitor the performance of the funds and to review the adequacy of our funding and plan contributions.

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We write down inventory for changes in net realizable value based upon assumptions related to future demand and market conditions if the indicated value is below cost.

Future demand assumptions can be impacted by changes in customer sales, changes in customers’ inventory positions and policies, competitors’ pricing policies and inventory positions, and varying crop sizes and qualities.

Future demand assumptions can be impacted by changes in customer sales, changes in customers’ inventory positions and policies, competitors’ pricing policies and inventory

positions, and varying crop sizes and qualities.

Market conditions that differ significantly from those assumed by management could result in additional write-downs.

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If our estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could be impaired.

A majority of our consolidated goodwill balance relates to our reporting unit in Brazil and the acquisitions of FruitSmart, Silva, and Universal Ingredients–Shank’s.

A majority of our consolidated goodwill balance relates to our reporting unit in Brazil and the acquisitions of FruitSmart and Silva.

We review the carrying value of goodwill for potential impairment on an annual basis and at any time that events or business conditions indicate that it may be impaired.

Accounting Standards Codification Topic 350 (“ASC 350”) permits companies to base initial assessments of potential goodwill impairment on qualitative factors, and the Company elected to use that approach at March 31, 2026 for all entities with allocated goodwill with the exception of Universal Ingredients–Shank’s.

For all entities, except Universal Ingredients–Shank’s, those factors did not indicate that it was more likely than not that the fair value of any of the reporting units was less than their respective carrying value, therefore no potential impairment of the Company’s recorded goodwill was noted at March 31, 2026.

The Company elected to use the qualitative approach at March 31, 2025 for all entities.

Those factors did not indicate that it was more likely than not that the fair value of any of the reporting units was less than their respective carrying value, therefore no potential impairment of the Company’s recorded goodwill was noted at March 31, 2025.

ASC 350 also allows companies to bypass the qualitative assessment and perform a quantitative assessment.

The quantitative goodwill assessment consists of comparing the fair value of each reporting unit to the carrying value of that reporting unit.

In the event that the carrying value of the reporting unit exceeds its fair value, an impairment of the reporting unit’s goodwill is recognized, up to the amount of goodwill allocated to that reporting unit.

The Company elected to bypass the qualitative assessment and perform a quantitative assessment of goodwill impairment at March 31, 2024.

The goodwill associated with Universal Ingredients–Shank’s was tested utilizing a quantitative approach at March 31, 2026.

The quantitative approach was utilized because management determined it was more likely than not that the carrying value exceeded the fair value of the reporting unit based on management's lower internal profitability projections in future years due primarily to the impacts of persistent adverse market conditions for certain new and existing product offerings.

ASC 350 allows companies to bypass the qualitative assessment and perform a quantitative assessment.

The quantitative goodwill assessment consists of comparing the fair value of each reporting unit to the carrying value of that reporting unit.

In the event that the carrying value of the reporting unit exceeds its fair value, an impairment of the reporting unit's goodwill is recognized, up to the amount of goodwill allocated to that reporting unit.

Fair value was assessed using a discounted cash flow model, comprised of

estimates of future cash flows and discount rates.

Based on this quantitative assessment, the Company determined there was no impairment of goodwill for any of its reporting units as of March 31, 2024.

The fair value of Universal Ingredients–Shank’s at March 31, 2026 was assessed using a combination of a discounted cash flow model, comprised of estimates of future net cash flows and discount rates, as well as a market-based approach that considered a subset of peer companies.

Based on this quantitative assessment, the Company determined the carrying value of Universal Ingredients–Shank’s at March 31, 2026 exceeded the derived fair value and recognized a $41.1 million non-cash goodwill impairment charge for the fiscal year ended March 31, 2026

Significant adverse changes in our operations or our estimates of future cash flows for a reporting unit with recorded goodwill, such as those caused by unforeseen events or changes in market conditions, could result in an impairment charge.

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Leaf tobacco is sourced directly by product manufacturers, by global leaf suppliers such as ourselves, and by other smaller, mostly regional or local, leaf suppliers.

We estimate that, of the flue-cured and burley tobacco grown outside of China in countries that are key export markets for tobacco, on average about a third is purchased directly by major manufacturers.

We estimate that, of the flue-cured and burley tobacco grown outside of China in countries that are key export markets for tobacco, historically on average about a third is purchased directly by major manufacturers.

Global leaf suppliers also usually purchase about a third of the tobacco, and the remainder is sourced by the smaller regional or local suppliers.

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To assist farmers, Universal provides comprehensive training, technical support in the field, and crop analytics through ongoing research and development.

Our commitment to compliance is reinforced through MobiLeaf™, our proprietary mobile device platform that captures and shares data in real-time, embedding sustainability throughout our supply chain and providing monitoring of GAP and ALP efforts, compliance with labor standards, and opportunities to enhance efficiencies.

Our commitment to compliance is reinforced through MobiLeaf TM , our proprietary mobile device platform that captures and shares data in real-time, embedding sustainability throughout our supply chain and providing monitoring of GAP and ALP efforts, compliance with labor standards, and opportunities to enhance efficiencies.

We believe that compliant leaf will continue to grow in importance to our customers and, as a result, will favor global suppliers who are able to deliver this product.

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Leaf Tobacco Supply

Flue-cured tobacco crops grown outside of China decreased in fiscal year 2025 by about 5% to 1.8 billion kilos, compared to fiscal year 2024.

Flue-cured tobacco crops grown outside of China increased in fiscal year 2026 by about 28% to 2.4 billion kilos, compared to fiscal year 2025.

Global burley tobacco production at about 722 million kilos in fiscal year 2026, increased by about 54% compared to the burley crops grown in our fiscal year 2025.

We estimate that as of March 31, 2025, industry uncommitted flue-cured and burley inventories, excluding China, continued to be at low levels, and flue-cured and burley tobaccos were in undersupply positions.

Flue-cured tobacco production grown outside of China is projected to increase by about 20%, and the global burley tobacco crop is projected to increase by about 35% in fiscal year 2026.

If these anticipated increases in flue-cured and burley crop production are realized, we believe that both flue-cured and burley tobaccos will move to a balanced, or possibly slight oversupply position.

We estimate that as of March 31, 2026, industry uncommitted flue-cured and burley inventories, excluding China, totaled about 169 million kilos, compared to about 22 million kilos at March 31, 2025.

We believe flue-cured and burley tobaccos were in oversupply positions as of March 31, 2026.

Flue-cured tobacco production grown outside of China is projected to decrease by about 3%, and the global burley tobacco crop is projected to decrease by about 16% in fiscal year 2027.

Even if these anticipated decreases in flue-cured and burley crop production are realized, we believe that both flue-cured and burley tobaccos will remain in oversupply positions.

We also forecast that oriental tobacco production will increase by about 21% and dark air-cured tobacco production will increase by about 2% in fiscal year 2027.

As of the date of the Annual Report, we believe oriental tobaccos are currently in an undersupply position but moving towards a more balanced position, and dark air-cured tobaccos are in a slight oversupply position.

Over the long term, we believe that global tobacco production will continue to move in line with slowly declining total demand.

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Leaf Tobacco Demand

Industry data from the Nicotine Resource Consortium shows that over the five years ended in 2023, world consumption of cigarettes outside of China declined at a compound annual rate of just over 1%, and consumption of American-blend cigarettes

declined at a compound annual rate of about 2%.

Industry data from the Nicotine Resource Consortium shows that over the five years ended in 2024, world consumption of cigarettes outside of China declined at a compound annual rate of almost 2%.

We expect that near-term global demand for leaf tobacco will slowly decline in line with global cigarette consumption.

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English-blend cigarettes, which use flue-cured tobacco, are mainly smoked in the United Kingdom and Asia and other emerging markets.

Industry data shows that consumption of American-blend cigarettes was declining for the five years ended in 2023.

If demand for American-blend cigarettes declines at a higher rate than reductions in demand for English-blend cigarettes, there may be less demand for burley and oriental tobaccos and more demand for flue-cured tobacco.

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On a year-to-year basis, we are also susceptible to fluctuations in leaf supply due to crop sizes and leaf demand as manufacturers adjust inventories or respond to changes in cigarette markets.

We currently believe that the supply of flue-cured tobaccos and burley tobaccos are in an undersupply position relative to anticipated demand.

However, inventories held by our customers may affect their near-term demand for leaf tobacco.

We currently believe that the supply of flue-cured tobaccos and burley tobaccos are in an oversupply position relative to anticipated demand.

Inventories held by our customers can also affect their near-term demand for leaf tobacco.

We also sell oriental tobaccos, which are used in American-blend cigarettes, and dark tobaccos, which are used in cigars and other smokeless products.

In recent years, we have seen increased demand for natural wrapper tobacco particularly for the European and U.S.

machine-made cigar markets.

While we expect demand for dark tobaccos used in cigar filler to be generally in line with supply, we are continuing to see strong demand for wrapper tobacco.

Factors that affect green tobacco prices include global supply and demand, market conditions, production costs, foreign exchange rates, and competition from other crops, among others.

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In some areas, tobacco competes with agricultural commodity products for farmer production.

In the past, leaf shortages in specific markets or on a worldwide basis have also led to green tobacco price increases.

Global Regulation of Tobacco Products

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Since its inception, the FCTC has continued to strengthen international cooperation and collaboration in tobacco control by advancing the implementation of the treaty’s 38 articles and increasing global participation.

At the tenth Conference of the Parties held in February 2024, the FCTC considered amendments to the agreement and track progress in the treaty’s implementation, particularly as it relates to environmental impacts and novel/emerging products.

The eleventh Conference of the Parties is scheduled for November 2025.

At the eleventh Conference of the Parties held in November 2025, the FCTC considered amendments to the agreement and tracked progress in the treaty’s implementation, particularly as it relates to novel/emerging products.

The twelfth Conference of the Parties is scheduled for November 2027.

While we cannot predict the extent or speed at which the efforts of the FCTC will reduce tobacco consumption, a proliferation of national laws and regulations spurred by the recommendations of the FCTC would likely reduce demand for both tobacco products and leaf, which could have a material adverse effect on our business and results of operations.

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All submissions require manufacturers to list ingredients in their products.

In January 2025, the FDA released a proposed rule to lower nicotine levels in cigarettes and certain combusted tobacco products to minimally or nonaddictive levels.

This tobacco product standard would likely impact future leaf demand if adopted.

It is also expected that should this ban be adopted, it would be challenged in the legal system making it difficult to predict when and if this proposed rule would become effective.

Although less than 5% of cigarettes manufactured worldwide are consumed in the United States, the FDA is widely considered a global leader in the “science-driven” regulation of tobacco products.

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Global Acceptance of the Continuum of Risk in the Regulation of Novel Tobacco Products

As novel tobacco products, such as e-cigarettes and heat-not-burn devices, emerge in the global market, governments are tasked with developing the appropriate, science-driven approach to regulation.

As demand for novel tobacco products, such as e-cigarettes, heat-not-burn devices, and nicotine pouches strengthens in the global market, governments are tasked with developing the appropriate, science-driven approach to regulation.

In 2017, the FDA announced a new regulatory approach for the regulation of tobacco products that embraced the placement of each product somewhere along a “continuum of risk”.

This comprehensive plan on nicotine use sought to facilitate an adult tobacco consumer’s switch from combustible cigarettes to less risky products found lower on the continuum.

As part of this regulatory scheme, the FDA approved the first “heat-not-burn”, “very-low nicotine cigarette”, “electronic nicotine delivery system”, and “nicotine pouch” premarket tobacco applications to permit the sale of these products within the United States.

As part of this regulatory scheme, the FDA approved the first “heat-not-burn”, “very-low nicotine cigarette”, “electronic nicotine delivery system”, “flavored e-cigarette product”, and “nicotine pouch” premarket tobacco applications to permit the sale of these products within the United States.

Furthermore, the FDA approved modified risk tobacco products applications to permit certain products in the heat-not-burn and smokeless categories to make modified exposure or risk claims.

Although the WHO FCTC has not embraced the harm-reduction language in the treaty, a growing number of countries have established tobacco control strategies incorporating a continuum of risk concept.

Although the WHO FCTC has not endorsed the practical application of the harm-reduction language in the treaty, a growing number of countries have established tobacco control strategies incorporating a continuum of risk concept.

In addition, the global tobacco product market is continuously diversifying to include a wide array of novel tobacco products to serve as alternatives to combustible cigarettes.

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In some cases, proposed legislation seeks to significantly increase existing taxes on tobacco products or impose new taxes on products that have not been subject to tax (e.g., ENDS products and liquid nicotine).

Increases in product taxation could reduce the affordability of, and demand for, tobacco products, which will affect requirements for leaf tobacco by tobacco product manufacturers.

Increases in product taxation could reduce the affordability of, and demand for, tobacco products, which will affect leaf tobacco requirements by tobacco product manufacturers.

Changes in tax laws or the interpretation of tax laws can also affect our earnings.

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The WHO estimates that one in every 10 cigarettes consumed globally is illicit.

Individual governments like the United States, European Union, and Brazil have initiated substantial steps in combating illicit trade.

Individual governments including the United States, European Union, and Brazil have initiated substantial steps in combating illicit trade.

In 2012, the WHO FCTC adopted an illicit trade protocol that, to date, has been ratified by only 68 parties.

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Ingredients Operations Trends

We have made significant strategic investments in Universal Ingredients.

We acquired FruitSmart in January 2020, Silva in October 2020, and Universal Ingredients–Shank’s in October 2021.

Additionally, we made additional investments to enhance operational synergies among the businesses and drive revenue and margin expansion by growing the platform offerings, including by investing in key sales and product research and development personnel to promote and expand the full range of our capabilities across Universal Ingredients.

We have also invested in Universal Ingredients’ infrastructure with the expansion of our Lancaster, Pennsylvania facility which we completed in fiscal year 2025.

This expansion further enhances our product offerings and production capabilities.

We have been achieving operational synergies across Universal Ingredients among our businesses and have also made considerable progress on our vision for the segment, providing a total solution-based approach for our customers that utilizes our broad spectrum of capabilities in fruits, vegetables and botanical extracts and flavorings.

Our commercial sales efforts allow us to market additional innovative products from across our platform to our existing customers, while also pursuing opportunities with new customers.

We also see potential in providing our customers with product offerings that combine ingredients from across the Universal Ingredients platform;

for example, combining fruit juice, dehydrated vegetables, and botanical extracts into a new beverage concept.

Product Development

Product development for food and beverage companies is crucial as it drives innovation, meets consumer demands, and ensures competitiveness in a dynamic market.

Food and beverage companies must continuously evolve their product lines to cater to changing tastes, dietary needs, and lifestyle choices of consumers.

Moreover, product development allows companies to leverage new technologies and processes ensuring sustainability and efficiency in production.

In essence, product development is not just about creating new products;

it is also about sustaining a brand’s relevance and growth in an ever-changing industry.

We have invested in research and development staff at our Lancaster, Pennsylvania facility and are able to offer solutions for our customers’ dynamic product needs.

Through Universal Ingredients, we have been providing high-quality, specialty vegetable- and fruit-based ingredients for the food and beverage end markets, showcasing the importance of adapting to market trends and consumer preferences.

As Universal Ingredients continues to progress, we have made initial investments in market research to provide our customers with value-added trend data to help aid their strategic goals and visions.

By evaluating the food and beverage market segments, we are able to develop innovative solutions for our customers and become proactive in product solutions for market gap opportunities.

When looking at markets, we study food and beverage trends that are relevant to our portfolio, and we also analyze consumer behavior.

Consumer behavior is an indicator of how consumers act in their environments and what they value when it comes to purchasing products.

Looking ahead, we see several ways consumers are choosing to look at brands and what they value.

For example, transparency in labels is currently a leading factor in what consumers want to see in the market.

Honest messaging about product claims is also important to consumers.

Health and Wellness

One of the markets Universal Ingredients serves is the growing global health and wellness market.

Many consumers are focused on mental and physical health driving strong consumer demand for healthy foods.

Consumers are looking to understand more about where their food comes from and what exactly it contains.

They are looking for brands to help them recognize the benefits that processing can have on a product, especially if it will make it healthier and more functional.

According to industry sources, consumers are concerned with whether products are highly processed or contain high amounts of sugar, fats, or sodium.

With consumers becoming more educated within the health and well-being space, it is critical companies come to the table with full transparency on how their products are produced and what they contain.

Many of our ingredients can be used as additive components of healthy food products.

We continue to believe that there will be strong demand for healthy foods going forward and that our ingredients portfolio can provide food manufacturers with innovative ingredients solutions to support these types of products.

Another of the growing end markets for ingredients products is the global pet food market.

The global pet food market size was over $125 billion in 2024, according to industry projections.

With “family” increasingly being redefined to include pets, there are rising opportunities within the market.

We believe that consumers will value human-grade ingredients and healthy and gourmet offerings for their pets.

We believe that our platform is well positioned to take advantage of increasing demand in the pet food end market as well as for other natural and clean-label products across the end markets it serves.

The beverage category for Universal Ingredients will remain a strategic initiative moving forward within the retail and food service space.

With our significant investments in the new capabilities at our Lancaster, Pennsylvania location, we will be able to serve a broader audience of customers looking for new trends within the beverage sector.

The beverage market can be segmented into several smaller subcategories, including alcoholic beverages, non-alcoholic beverages, coffees, and juices.

Our investments in our research and development function and in our Lancaster, Pennsylvania facility expansion are intended to provide us with the capabilities to service the entire beverage market whether it is enhancing flavors, providing juice concentrates, or developing future innovations.

In addition to our product development team working with our customers, we also evaluate the market to understand what might be happening to the future of food and beverage.

In the current market, we are seeing increasing demand for functional beverages.

Brands are focusing on consumer’s health and nutritional needs whether that is sugar reduction or by providing natural sources of caffeine such as yerba mate.

Consumers are increasingly scrutinizing product labels and ingredient lists, looking for more natural and healthy options that suit their dietary needs.

The busy lifestyles of consumers have heightened awareness of the need to maintain a healthier diet.

Our strategy is to deliver functional ingredients as well as convenience to our customers through customized solutions across the entire platform.

Universal Ingredients has continued to invest in the development and expansion of its platform through a combination of prior acquisitions which included FruitSmart, Silva, and Universal Ingredients-Shank’s, as well as ongoing investments in infrastructure, product development, marketing, and commercial sales capabilities.

These investments are designed to support the integration of complementary capabilities across fruits, vegetables, and botanical extracts and flavorings and are intended to enhance the platform’s ability to deliver value-added ingredient solutions at scale.

Ongoing investments, including the expansion of our Lancaster, Pennsylvania facility, have increased production capacity and enhanced research and development and application capabilities.

Together, these investments are intended to support operational efficiencies, enable broader customer engagement across multiple end-markets, and position the platform to support long-term revenue growth and market expansion as customer demand evolves.

Product Development and Innovation

Product development represents a key driver of growth within our Ingredients Operations.

Customers across the food, beverage, and pet food markets prioritize innovation to address changing consumer preferences, improve nutritional profiles, and differentiate finished products.

As a result, ingredient suppliers are increasingly expected to produce quality inputs, in addition to formulation expertise, application support, and speed to market.

Investments in research and development, including our Applications Capabilities Lab in Lancaster, Pennsylvania, support collaboration with customers to develop and commercialize new products across a range of applications, including beverages, nutritional products, prepared foods, and pet food formulations.

These capabilities enable the platform to support customized solutions and multi-component ingredients systems that leverage technologies and expertise across our Ingredients portfolio.

Health, Wellness, and Functional Ingredients

Consumer focus on health and wellness continues to influence demand across the food and beverage industry.

Demand is increasing for products positioned around functional benefits such as energy, hydration, digestive health, and overall wellness, delivered through everyday formats such as beverages and convenient food applications.

These trends are contributing to increased use of ingredients derived from fruits, vegetables, and botanicals, including natural sources of fiber and plant-based functional compounds.

In parallel, changing consumption patterns, including greater emphasis on portion control, nutrient density, and balanced nutrition, are influencing product development strategies.

These shifts support demand for ingredient solutions that enable the development of nutrient-dense, scalable products, particularly in beverages and ready-to-consume applications.

We believe our Ingredients platform, which includes fruit-based systems, fibers, and botanical extracts, is well positioned to support these evolving requirements.

While functional ingredients continue to gain traction, consumer adoption is ultimately dictated by taste.

There is an expectation that products deliver both effectiveness and enjoyment, with minimal compromise.

As a result, food and beverage manufacturers are prioritizing solutions that address bitterness, acidity, and other off notes commonly associated with functional systems.

This is accelerating demand for flavor modulation, masking technologies, and naturally derived ingredients that enable clean label positioning while supporting a balanced, sensory profile.

Clean Label, Transparency, Ingredient Integrity

Consumers continue to place increased emphasis on ingredient transparency, product labeling, and processing methods.

Demand for clean label, minimally processed, and naturally derived ingredients remains an important trend across food and beverage categories, with consumers seeking suppliers capable of supporting clear product claims, traceability, and consistent quality.

Universal Ingredients’ focus on fruit, vegetable, and botanical-based ingredients, along with capabilities in natural extraction, dehydration, and processing aligns with these market trends.

Platform capabilities related to sourcing, quality assurance, and supply reliability support customer efforts to meet evolving expectations around ingredient integrity.

Pet Food and Adjacent Markets

The pet food market represents an additional area of growth, driven in part by the increasing “humanization” of pets and rising demand for premium, natural, and functional ingredients.

Consumers are increasingly seeking pet food products that reflect attributes associated with human food, including nutritional quality, ingredient transparency, and functional benefits.

Universal Ingredients’ platform capabilities in fruit- and vegetable-based ingredients, clean-label formulations, and functional components support opportunities in adjacent categories that prioritize natural and functional ingredient solutions, extending applicability of the Ingredients platform beyond traditional food and beverage applications.

Vertical Integration

As we continue to grow Universal Ingredients, we intend to explore and develop targeted opportunities to vertically integrate certain plant-based ingredients from our tobacco growing areas to capitalize on our strengths and capabilities there.

As we continue to grow Universal Ingredients, we intend in the future to explore the benefits and opportunities to vertically integrate certain plant-based ingredients from our tobacco growing areas to capitalize on our strengths and capabilities there.

We have established grower networks and agricultural support infrastructure in origins where we source tobacco, and we also have strong, mature sustainability programs in those origins.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis