BGS 10-K & 10-Q changes, risk factors and insider trading

We purchase agricultural products, including vegetables, oils and spices and seasonings, meat, poultry, ingredients, packaging materials and other raw materials from growers, commodity processors, other food companies and packaging manufacturers. Commodities, ingredients, packaging materials and other raw materials are subject to increases in price attributable to a number of factors, including changes in crop size, federal and state agricultural programs, export demand, currency exchange rates, energy and fuel costs, water supply, weather conditions during the growing and harvesting seasons, insects, plant diseases and fungi, and glass, metal and plastic prices. Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns. The cost of labor, manufacturing, energy, fuel, packaging materials and other costs related to the production and distribution of our products can from time to time increase significantly and unexpectedly. We attempt to manage these risks by entering into short-term supply contracts and advance commodities purchase agreements from time to time, by implementing cost savingcost-saving measures and by raising sales prices. During the past several years, our cost savingcost-saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient, packaging and distribution costs. Moreover, during fiscal 20252026 and possibly beyond, we expect to face continued industry-wide cost inflation for various inputs, including commodities, ingredients, packaging materials, other raw materials, transportation and labor. To the extent we are unable to offset present and future cost increases, our operating results could be materially and adversely affected.

At DecemberJanuary 28,3, 2024,2026, we had total long-term indebtedness of $2,044.3$1,968.0 million (before debt discount/premium), including $1,494.3$1,458.7 million principal amount of senior secured indebtedness and $550.0$509.3 million principal amount of senior unsecured indebtedness. Our ability to pay dividends is subject to contractual restrictions contained in the instruments governing our indebtedness. Although our credit agreement and the indentures governing our senior secured notes and senior notes (which we refer to as the senior secured notes indenture and the senior notes indenture, respectively) contain covenants that restrict our ability to incur debt, as long as we meet these covenants we will be able to incur additional indebtedness. The degree to which we are leveraged on a consolidated basis could have important consequences to the holders of our securities, including:

Our products are manufactured at many different manufacturing facilities, including our twelveten manufacturing facilities and manufacturing facilities operated by our co-packers. However, in most cases, individual products are produced only at a single location. If any of these manufacturing locations experiences a disruption for any reason, including a work stoppage, power failure, fire, or weather related condition or natural disaster, etc., this could result in a significant reduction or elimination of the availability of some of our products. If we were not able to obtain alternate production capability in a timely manner or on satisfactory terms, this could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.

In particular, our financial condition and results of operations could be materially and adversely affected by the United States-Mexico-Canada Agreement, or other regulatory and economic impact of changes in taxation and trade relations among the United States and other countries. For example, on February 1, 2025, the newWhite U.S. presidential administrationHouse announced the imposition of tariffs of up to 25% on imports from Canada and Mexico and 10% on imports from China, and those countries subsequently announced retaliatory tariffs in response. Although the imposition of such tariffs washas to a large extent been at least temporarily paused in the case of Canada and Mexico, thetariffs situationon isimports dynamic,from rapidlyChina evolvingtemporarily increased to as high as 145%, and uncertain.the Trump Administration has imposed tariffs on other countries throughout the globe. The U.S. has sincealso reinstated full 25% tariffs on steel imports and increased tariffs on aluminum imports to 25%. IfThe allowedsituation toremains becomedynamic, orrapidly remainevolving effective,and theseuncertain. orOn anyFebruary new20, or increased tariffs or resultant trade wars could lead to significant increases in2026, the costsSupreme Court of finished goods and raw materials, including finished goods produced at our Green Giant frozen vegetable manufacturing facility in Irapuato, Mexico, certain raw material vegetables we procure in Mexico for production in the United States,States and the cost of steel cans and lids used for certain of our products, which could have a material adverse effect on our business, consolidated financial position, results of operation or liquidity. Although most of the Green Giant vegetable productsruled that we sell to customers in Canada are grown and produced in Canada, any retaliatorymany tariffs imposed by Canadathe current U.S. presidential administration were unlawful. The scope, timing and practical effect of this decision, including whether and how such tariffs may be modified, refunded, replaced or anyotherwise “buyaddressed Canadian”through campaignsnew inmeasures responseand tothe U.S. tariffs could have an adversedecision’s impact on ourtariffs, salesduties toand customersbroader intrade Canadarelations forremains anyuncertain, of our products that are not produced in Canada. In addition, if allowed to become or remain effective, these or any new or increased tariffsand could also negatively affect U.S national or regional economies or lead to increased inflation or a recession, which also could have abe material adverse effect onto our business, consolidated financial position, results of operationoperations orand liquidity.financial condition.

As of DecemberJanuary 28,3, 2024,2026, approximately 51.2%48.3% of our 2,7842,497 employees were covered by collective bargaining agreements. A prolonged work stoppage or strike at any of our facilities with union employees or a significant work disruption from other labor disputes in the food or related industries could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.

OneTwo of our collective bargaining agreements expiresexpire in the next twelve months. The collective bargaining agreement covering our Ankeny,Stoughton, IowaWisconsin facility, which covers approximately 32163 employees, is scheduled to expire on AprilMarch 6,26, 2025.2026, and the collective bargaining agreement for our Roseland, New Jersey facility, which covers approximately 50 employees, is scheduled to expire on March 31, 2026.

While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate a new collective bargaining agreement for our AnkenyStoughton facilityor Roseland facilities on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. If, prior to the expiration of the collective bargaining agreement for the AnkenyStoughton facilityor Roseland facilities or prior to the expiration of any of our other existing collective bargaining agreements, we are unable to reach new agreements without union action or any such new agreements are not on terms satisfactory to us, our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

We are able to amortize goodwill and certain intangible assets in accordance with Section 197 of the Internal Revenue Code of 1986. We expect to be able to amortize for tax purposes approximately $767.0$650.7 million between 20252026 and 2038. The expected annual deductions are approximately $116.4$112.4 million for fiscal 2025, approximately $112.4 for fiscal 2026, approximately $92.8 million for fiscal 2027, approximately $91.3 million for fiscal 2028, approximately $90.7 million for fiscal 2029, approximately $84.6 million for fiscal 2030, approximately $51.9 million for fiscal 2031, approximately $34.7 million for fiscal 2032, approximately $33.7 million for fiscal 2033, approximately $30.3 million for fiscal 2034, approximately $26.7 million for fiscal 2035, approximately $1.0 million for fiscal 2036, approximately $0.5 million for fiscal 2037 and approximately $0.1 million for fiscal 2038.

We also take material annual deductions for net interest expense due to our substantial indebtedness. However, the U.S. Tax Cuts and Jobs Act, signed into law on December 22, 2017, limits the deduction for net interest expense (including the treatment of depreciation and other deductions in arriving at adjusted taxable income) incurred by a corporate taxpayer to 30% of the taxpayer’s adjusted taxable income. Even though the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025 restores the earnings before interest, taxes, depreciation and amortization (EBITDA) calculation for purposes of determining interest expense deduction limitations, we were still subject to the interest expense deduction limitation in fiscal 2025 and we expect to continue to be subject to the interest expense deduction limitation in fiscal 2026 and future years.

If we are unable to fully utilize our interest expense deductions in future periods, our cash taxes will increase. Beginning with fiscal 2022, our adjusted taxable income as computed for purposes of the interest expense deduction limitation is computed after any deduction allowable for depreciation and amortization. As a result, our adjusted taxable income (used to compute the limitation) decreased and we were subject to the interest expense deduction limitation in fiscal 2024,2025, 20232024 and 2022,2023, resulting in an increase to taxable income of $110.8$29.4 million, $107.7$110.8 million and $90.2$107.7 million, respectively. We expect to continue to be subject to the interest deduction limitation in future years. During fiscal 2025, we increased our valuation allowance by $4.6 million. We have recorded a deferred tax asset of $72.7$69.6 million and $46.9$72.7 million for fiscal 20242025 and fiscal 2023,2024, respectively, related to the interest deduction carryover, without a valuation allowance, as the disallowed interest may be carried forward indefinitely. The increase in our cash taxes resulting from the interest expense deduction limitation was approximately $19.5$6.8 million, $25.0$19.5 million and $20.6$25.0 million for fiscal 2024,2025, 20232024 and 2022,2023, respectively. There are various factors that may cause tax assumptions to change in the future, and we may have to record a valuation allowance against these deferred tax assets. See Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report.

Likewise, the ultimate impact of the U.S. Tax Cuts and Jobs Act and the One Big Beautiful Bill Act on our reported results in fiscal 20252026 and beyond may differ from the estimates provided in this report, possibly materially, due to guidance that may be issued and other actions we may take as a result of this tax law different from that currently contemplated. See Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report for information about the U.S.One TaxBig CutsBeautiful and JobsBill Act.

Other changes in tax laws in the United States or in other countries where we have significant operations, including rate changes or corporate tax provisions that could disallow or tax perceived base erosion or profit shifting payments or subject us to new types of tax, could have a material adverse effect on our effective tax rate and our deferred tax assets and liabilities. In addition, aspects of U.S. tax laws may lead foreign jurisdictions to respond by enacting additional tax legislation that is unfavorable to us. For example, numerous countries have now enacted the Organization of Economic Cooperation and Development’s model rules on a global minimum tax of 15%, with the earliest effective date being for taxable years beginning as early as 2024 and with widespread implementation of a global minimum tax expected by 2025. In addition, in December 2024, the IRS published final regulations (Treasury Decision 10016) under Section 987 of the Internal Revenue Code of 1986. The final regulations are effective December 10, 2024 and are generally applicable to tax years beginning after December 31, 2024. The final regulations provide guidance on determining income and currency gain or loss for a qualified business unit for purposes of Section 987. We haverecorded beguna tax benefit of $1.8 million in fiscal 2025 due to evaluate how the final regulations and the applicable transition rules willthat impactimpacted taxation relating to our primary operating subsidiary in Canada, which is a qualified business unit for purposes of Section 987. This increasingly complex global tax environment has existed in the past and could continue to increase tax uncertainty, resulting in higher compliance costs. Based on the guidance available thus far, we do not expect this legislation to have a material impact on our consolidated financial statements, but we will continue to evaluate it as additional guidance and clarification becomes available.

We manufacture, sell and distribute a diverse portfolio of branded, high quality,high-quality, shelf-stable and frozen foods and household products, many of which have leading regional or national market shares. In general, we position our branded products to appeal to the consumer desiring a high qualityhigh-quality and reasonably priced product. We complement our branded product retail sales with institutional and foodservice sales and private label sales.

Since 1996, we have successfully acquired and integrated more than 50 brands or businesses into our company. On MayJanuary 5,15, 2022,2026, we acquiredentered into an agreement to acquire the frozenbroth vegetableand manufacturingstock operationsbusiness of GrowersDel Express,Monte LLC.Foods Corporation II Inc. and its affiliates, including the College Inn and Kitchen Basics brands. Subject to customary closing conditions and the simultaneous closing of two other pending sales by Del Monte Foods unrelated to B&G Foods or the broth and stock business, we expect the pending acquisition to close during the first quarter of 2026. We refer to this pending acquisition in this report as the “YumaCollege Inn and Kitchen Basics acquisition.” This acquisition hasis beenexpected to be accounted for using the acquisition method of accounting and, accordingly, the assets acquired,acquired and liabilities assumed and results of operations of the acquired business arewill be included in our consolidated financial statements from the date of acquisition. This acquisition and the application of the acquisition method of accounting will affect comparability between periods.

Fluctuations in Commodity Prices and Production and Distribution Costs. We purchase raw materials, including agricultural products, oils, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in U.S.the United States and foreign locations. Raw materials and other input costs, such as fuel and transportation, are subject to fluctuations in price attributable to a number of factors, including climate and weather conditions, supply chain disruptions (including raw material shortages), labor shortages, wars and pandemics. Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly.

We attempt to manage cost inflation risks by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost savingcost-saving measures. We also attempt to offset rising input costs by raising sales prices to our customers. However, increases in the prices we charge our customers may lag behind rising input costs. Competitive pressures also may limit our ability to quickly raise prices in response to rising costs.

We experienced material net cost increases for raw materials during the last several years due to a number of factors. Raw material costs remained elevated in fiscal 20232023, fiscal 2024 and fiscal 20242025 and we anticipate that certain raw material costs will remain elevated during fiscal 2025.2026. We are currently locked into our supply and prices for a majority of our most significant raw material commodities into or through the second or third quarter of 2025.2026.

In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. We attempt to offset all or a portion of these increases through list price increases, trade spend reductions and cost savings initiatives. Although freight rates began to decline in 2023, freight rates remained elevated during fiscal 2024 and fiscal 2025 and we expect freight rates to remain elevated during fiscal 2025.2026.

We plan to continue managing inflation risk by entering into short-term supply contracts and advance commodities purchase agreements from time to time, and, when necessary, by raising prices. However, to the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost savingcost-saving measures or increasing prices to our customers, our operating results could be materially adversely affected. In addition, if input costs decline, customers may look for price reductions in situations where we have locked into purchases at higher costs. During the past several years, our cost savingcost-saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging and distribution costs.

TradeIf andwe Regulatoryare Uncertainty. On February 1, 2025, the new U.S. presidential administration announced the imposition of tariffs of upunable to 25% on imports from Canada and Mexico and 10% on imports from China, and those countries subsequently announced retaliatory tariffs in response. Although the imposition of such tariffs was temporarily paused in the case of Canada and Mexico, the situation is dynamic, rapidly evolving and uncertain. The U.S. has since reinstated full 25% tariffs on steel imports andoffset increased tariffs on aluminum imports to 25%. If allowed to becomecosts or remain effective, these or any new or increased tariffs or resultant trade wars could lead toface significant increasessales involume thedeclines, costs of finished goods and raw materials, including finished goods produced at our Green Giant frozen vegetable manufacturing facility in Irapuato, Mexico, certain raw material vegetables we procure in Mexico for production in the United States, and the cost of steel cans and lids used for certain of our products, whichthis could have a material adverse effect on our business, consolidated financial position, results of operation or liquidity. Although most of the Green Giant vegetable products that we sell to customers in Canada are grown and produced in Canada, any retaliatory tariffs imposed or threatened to be imposed by Canada or any “buy Canadian” campaigns in response to U.S. tariffs could have an adverse impact on our sales to customers in Canada for any of our products that are not produced in Canada. In addition, if allowed to become or remain effective, these recent tariffs or any newnew, replacement or increased tariffs could also negatively affect U.SU.S. national or regional economies or lead to increased inflation or a recession, which also could have a material adverse effect on our business, consolidated financial position, results of operation or liquidity. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products.

Fluctuations in Currency Exchange Rates. Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. During fiscal 20242025 and fiscal 2023,2024, our net sales to customers in Canada represented approximately 7.5%7.7% and 7.1%,7.5%, respectively, of our total net sales. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars. A weakening of the U.S. dollar against the Canadian dollar would significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. These increased costs would not be fully offset by the positive impact the change in the relative strength of the Canadian dollar versus the U.S. dollar would have on our net sales in Canada. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars, with one exception being certain purchases of raw materials in Mexico that are denominated in Mexican pesos. In addition, we operate a frozen vegetable manufacturing facility in Irapuato, Mexico and as a result are exposed to fluctuations in the Mexican peso. A weakening of the U.S. dollar in relation to the Mexican peso would significantly increase our costs relating to the purchase of raw materials and the production of frozen vegetable products to the extent we have not purchased Mexican pesos or otherwise entered into hedging arrangements in advance of the weakening of the U.S. dollar. As a result, certain revenues and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an adverse impact on operating results. For example, in recent years our results of operations from our Green Giant frozen operations in Mexico werehave been negatively impacted duringby fiscalappreciation 2023in andthe fiscal 2024 as a resultstrength of the Mexican peso appreciatingrelative againstto the U.S. dollar, and may continue to be negatively impacted during fiscal 2025.dollar.

As of DecemberJanuary 28,3, 2024,2026, we had $548.2$543.8 million of goodwill and $1,117.4$1,059.6 million of indefinite-lived intangible assets recorded in our consolidated balance sheet. Following material impairments we recorded to goodwill and indefinite-lived intangible trademark assets in fiscal 2024,2025, 20232024 and 2022,2023, none of our indefinite-lived intangible assets had a book value in excess of their calculated fair values and the percentage excess of the aggregate calculated fair value over the aggregate book value was approximately 308.9%.301.1%. As of January 3, 2026, the fair values of our indefinite-lived intangible assets exceeded their carrying amounts by margins ranging from approximately 5% to 2,498%. Five brands had fair values closest to their respective book values, defined as less than 50 percent above carrying amount, and therefore represent the assets at highest relative risk of potential future impairment. These brands were Sugar Twin at 5% above a book value of $15.5 million, Static Guard at 9% above a book value of $18.8 million, Victoria at 22% above a book value of $6.7 million, Bear Creek at 42% above a book value of $113.4 million, and B&G at 43% above a book value of $12.3 million. However, materially different assumptions regarding the future performance of our businesses or discount rates could result in significant additional impairment losses. For example, if future revenues and contributions to our operating results for any of our brands or operating segments, including recently impaired brands and newly acquired brands, deteriorate, at rates in excess of our current projections, we may be required to record additional non-cash impairment charges to certain intangible assets. In addition, any significant decline in our market capitalization or changes in discount rates, even if due to macroeconomic factors, could put pressure on the carrying value of our goodwill or the goodwill of any of our operating segments. A determination that all or a portion of our goodwill or indefinite-lived intangible assets are impaired, although a non-cash charge to operations, could have a material adverse effect on our business, consolidated financial condition and results of operations.

The table below sets forth the book value as of DecemberJanuary 28,3, 20242026 of the indefinite-lived trademarks for each of our brands whose net sales equaled or exceeded 3% of our fiscal 20242025 or fiscal 20232024 net sales and for “all other brands” in the aggregate (in thousands):

See “U.S.One TaxBig Beautiful Bill Act” below for a discussion of the U.S. TaxOne CutsBig andBeautiful JobsBill Act of 2017,2025, which we refer to as the “U.S. Tax Act,OBBBA,” and the impact it has had, and may have, on our business and financial results.

We maintain four company-sponsored defined benefit pension plans covering approximately 21.3%21.4% of our employees. Our funding policy for company-sponsored defined benefit pension plans is to contribute annually not less than the amount recommended by our actuaries. The funded status of our pension plans is dependent upon many factors, including returns on invested assets and the level of certain market interest rates, employee-related demographic factors, such as turnover, retirement age and mortality, and the rate of salary increases. Certain assumptions reflect our historical experience and management’s best judgment regarding future expectations. Due to the significant management judgment involved, our assumptions could have a material impact on the measurement of our pension expenses and obligations. We review pension assumptions regularly and we may from time to time make voluntary contributions to our pension plans, which exceed the amounts required by statute. We did not make any contributions to our company-sponsored pension plans during fiscal 2025 and we made contributions to our company-sponsored pension plans of $2.5 million in each of fiscal 2024 and fiscal 2023.2024. Changes in interest rates and the market value of the securities held by the plans could materially change, positively or negatively, the funded status of the plans and affect the level of pension expense and required contributions in fiscal 20252026 and beyond.

Our discount rate assumption for our four company-sponsored defined benefit plans changed from 4.75% - 4.81% at December 30, 2023 to 5.41% - 5.50% at December 28, 2024.2024 to 5.25% - 5.49% at January 3, 2026. As a sensitivity measure, a 0.25% decrease or increase in our discount rate would increase or decrease our pension expense by approximately $0.3$0.7 million or $0.6 million, respectively. Similarly, a 0.25% decrease or increase in the expected return on pension plan assets would increase or decrease our pension expense by approximately $0.4$0.5 million. During fiscal 20252026 we expect to make contributions of approximately $2.5 million to our four company-sponsored defined benefit pension plans.

Our withdrawal in 2021 from a multi-employer pension plan relating to a former manufacturing facility requires us to make withdrawal liability payments to the plan of approximately $0.9 million per year for 20 years, which commenced on March 1, 2022. The remaining estimated present value of that liability of $12.3$11.8 million is recorded on our consolidated balance sheet as of DecemberJanuary 28,3, 2024.2026.

Impairment of Intangible Assets. Impairment of intangible assets representsincludes apre-tax, reductionnon-cash ofimpairment thecharges carryingto value ofindefinite-lived intangible trademark assets and pre-tax, non-cash impairment charges to fairfinite-lived valueintangible whencustomer therelationship carrying value of the assets is no longer recoverable.assets.

Other Income. Other income includes the non-service portion of net periodic pension (benefit) cost and net periodic post-retirement benefit costs.

During the fourth quarter of 2023,2024, we recorded pre-tax, non-cash impairment charges of $20.5$320.0 million (or $15.5$241.6 million, net of tax) related to indefinite-lived intangible trademark assets for the Baker’sGreen Joy,Giant, MollyVictoria, McButter,Static Sugar Twin,Guard and New York FlatbreadsMcCann’s brands. We partially impaired the Baker’s Joy and Sugar Twin brands, and we fully impaired the Molly McButter and New York Flatbreads brands.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading “Forward-Looking Statements” before Part I of this report and elsewhere in this report. The following discussion should be read in conjunction with the unaudited consolidated interim financial statements and related notes for the thirteen and twenty-six weeks ended AprilJuly 4, 2026 (second quarter and first quartertwo quarters of 2026) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended January 3, 2026 (fiscal 2025) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 3, 2026 (which we refer to as our 2025 Annual Report on Form 10-K).

In addition, in an attempt to sharpen focus, improve margins and reduce our long-term debt, we have been reshaping our portfolio through select divestitures. For example, on March 2, 2026, we completed the sale of the Green Giant U.S. frozen business to Seneca Foods Corporation. On October 24, 2025, we entered into an agreement to sell our Green Giant and Le Sieur frozen and shelf-stable product lines in Canada, which we refer to in in this report as “Green Giant Canada,” to Nortera Foods Inc., which, subject to regulatory approvalreview and customary closing conditions, is expected to close during the secondthird quarter of 2026. On August 1, 2025, we completed the sale of the Le Sueur U.S. shelf-stable vegetable brand to McCall Farms. On May 23, 2025, we completed the sale of the Don Pepino and Sclafani brands of pizza and spaghetti sauces, crushed tomatoes, tomato puree and whole peeled tomatoes to Violet Foods LLC. In this report, we refer to these divestitures as the “Green Giant U.S. frozen divestiture,” the pending “Green Giant Canada divestiture,” the “Le Sueur U.S. divestiture,” and the “Don Pepino divestiture,” respectively. These divestitures affect, or will affect, comparability between periods.

We experienced material net cost increases for raw materials during the last several years due to a number of factors. Raw material costs remained elevated in fiscal 2025 and the first quartertwo quarters of 2026 and we anticipate that certain raw material costs will remain elevated during at least the remainder of fiscal 2026. We are currently locked into our supply and prices for a majority of our most significant raw material commodities through at least the end of the secondthird quarter of 2026.

In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. We attempt to offset all or a portion of these increases through list price increases, trade spend reductions and cost savings initiatives. Although freight rates began to moderate in 2023, freight rates remained elevated during fiscal 2025 and the first quartertwo quarters of 2026, and, due in part to geopolitical conflict, including the hostilities involving Iran, which have exacerbated fuel price volatility, we expect freight rates to remain elevated during at least the remainder of fiscal 2026.

Trade and Regulatory Uncertainty. In February 2025, the White House announced the imposition of tariffs on numerous countries that trade with the United States, including Canada, Mexico and China, and certain of those countries subsequently announced retaliatory tariffs in response. Although the imposition of certain of such tariffs was at least temporarily paused in the case of Canada and Mexico, and other tariffs under the International Emergency Economic Powers Act (IEEPA) were eventually struck down by a ruling issued by the United States Supreme Court in February 2026, the White House announced its intention, in response to the Supreme Court decision, to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariff. In addition, although we have begun receiving refunds from the U.S. government for certain tariffs paid, we expect that we may need to reimburse to certain customers a portion of future tariff refunds that we receive to the extent in certain cases we increased prices directly attributable to such tariffs. As the implementation of tariffs is ongoing, more tariffs may be added in the future and countermeasures may be adopted by other countries. The situation remains dynamic, rapidly evolving and uncertain.

Fluctuations in Currency Exchange Rates. Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. During the first quartertwo quarters of 2026 and 2025, our net sales to customers in foreign countries represented approximately 11.9%12.3% and 9.7%,8.9%, respectively, of our total net sales. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars. A weakening of the U.S. dollar against the Canadian dollar would significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. These increased costs would not be fully offset by the positive impact the change in the relative strength of the Canadian dollar versus the U.S. dollar would have on our net sales in Canada. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars, with one exception being certain purchases of raw materials in Mexico that are denominated in Mexican pesos.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the U.S. Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Among the tax law changes that impacted us in fiscal 2025 and the first quartertwo quarters of 20262026, and will continue to impact us in future yearsyears, relate to the timing of certain tax deductions including depreciation expense, R&D expenditures and interest expense. The OBBBA allows for 100% bonus depreciation to be taken on eligible assets, the option to immediately expense domestic R&D expenditures as well as accelerate the deduction of previously capitalized expenses, and restores the earnings before interest, taxes, depreciation and amortization (EBITDA) calculation for purposes of determining interest limitations. We implemented certain changes in fiscal 2025 and the first quartertwo quarters of 2026 related to the interest deduction limitation, bonus depreciation and the immediate expensing of R&D expenses. The OBBBA did not have a material impact on our effective income tax rate, results of operations, financial condition or liquidity for fiscal 2025 or the first quartertwo quarters of 2026. See Note 9, “Income Taxes.”

The following table sets forth the percentages of net sales represented by selected items for the second quarter and first quartertwo quarters of 2026 and 2025 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:

Base Business Net Sales. Base business net sales is a non-GAAP financial measure used by management to measure operating performance. We define base business net sales as our net sales excluding (1) the net sales offrom acquisitions until the net sales from such acquisitions are included in both comparable periods, (2) net sales of discontinued or divested brands, and (3) net sales from our Green Giant U.S. frozen co-manufacturing agreement until the net sales from the co-manufacturing agreement are included in both comparable periods. The portion of current period net sales attributable to recent acquisitions for which there is no corresponding period in the comparable period of the prior year is excluded. For each acquisition, the excluded period starts at the beginning of the most recent fiscal period being compared and ends on the first anniversary of the acquisition date. For discontinued or divested brands, the entire amount of net sales is excluded from each fiscal period being compared. We have included this financial measure because our management believes it provides useful and comparable trend information regarding the results of our business without the effect of the timing of acquisitions and the effect of discontinued or divested brands.

A reconciliation of net sales to base business net sales for the second quarter and first quartertwo quarters of 2026 and 2025 follows (in thousands):

Reconciliations of net (loss) income and net cash provided by (used in) operating activities to EBITDA and adjusted EBITDA for the second quarter and first quartertwo quarters of 2026 and 2025 along with the components of EBITDA and adjusted EBITDA follows (in thousands):

A reconciliation of net (loss) income to adjusted net income and adjusted diluted earnings per share for the second quarter and first quartertwo quarters of 2026 and 2025 along with the components of adjusted net income and adjusted diluted earnings per share follows (in thousands):

During the first two quarters of 2025, we recorded a net discrete tax benefit of $1.0 million. During the first quarter of 2025, we recorded a net discrete tax benefit of $1.4 million, primarily related to a discrete tax benefit of $2.1 million for the tax effect of a pre-transition loss related to Section 987 of the Internal Revenue Code of 1986 for the cumulative unrecognized foreign exchange loss relating to our primary operating subsidiary in Canada, which is a qualified business unit for purposes of Section 987, partially offset by discrete tax expenses of $0.7 million related to stock-based compensation and rate changes. During the second quarter of 2025, we recorded a net discrete tax expense of $0.4 million, primarily related to a settlement for FASB Interpretation No. 48: Managing Uncertain Tax Positions (FIN 48).

Segment Adjusted EBITDA and Segment Adjusted Expenses. For a discussion of segment adjusted EBITDA, segment adjusted expenses and a reconciliation of segment adjusted EBITDA to net (loss) income,loss, see Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

A reconciliation of gross profit to adjusted gross profit and gross profit percentage to adjusted gross profit percentage for the second quarter and first quartertwo quarters of 2026 and 2025, respectively, follows (in thousands, except percentages):

Acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold for the second quarter and first quartertwo quarters of 2025 of $0.5$2.1 million and $2.6 million, respectively, primarily include acquisition, integration and divestiture-related expenses for prior and potential future acquisitions and divestitures, and non-recurring expenses.

FirstSecond quarter of 2026 compared to the firstsecond quarter of 2025

Net Sales. Net sales for the firstsecond quarter of 2026 decreased $16.5$41.1 million, or 3.9%,9.7%, to $408.9$383.3 million from $425.4$424.4 million for the firstsecond quarter of 2025. The decrease was primarily attributable to the Green Giant U.S. frozen, Le Sueur U.S. and Don Pepino divestitures,divestitures partiallyand offseta by an increasedecrease in base business net sales, onepartially monthoffset by three months of net sales from the co-manufacturing agreement we entered into on March 2, 2026 with the acquirer of the Green Giant U.S. frozen business, and athree partial monthmonths of net sales for the College Inn and Kitchen Basics brands.

Net sales of ourthe Green Giant U.S. frozen business, which we no longer owned for only two months during the firstsecond quarter of 2026 after the divestiture on March 2, 2026, contributed $27.2$58.3 million lessof net sales during the first quarter of 2026 as compared to the firstsecond quarter of 2025. Net sales of the Don Pepino and Le Sueur U.S. businesses, which we divested in 2025 and are therefore not part of our firstsecond quarter of 2026 results, were $10.6$9.7 million during the firstsecond quarter of 2025. Partially offsetting the impact of these divestitures were onethree monthmonths of net sales from the new Green Giant U.S. frozen co-manufacturing agreement, which contributed $8.5$23.9 million of net sales in the firstsecond quarter of 20262026, and athree partial monthmonths of net sales for the College Inn and Kitchen Basics brands, acquired on March 19, 2026, which contributed $2.9$13.2 million to ourof net sales for the firstsecond quarter of 2026.

Base business net sales for the firstsecond quarter of 2026 increaseddecreased $9.9$10.2 million, or 2.8%,2.9%, to $365.1$346.3 million from $355.2$356.5 million for the firstsecond quarter of 2025. The increasedecrease in base business net sales was driven by ana increasedecrease in volume of $6.6$15.5 million, or 1.9%4.3% of base business net sales, partially offset by an increase in net pricing and the impact of product mix (primarily related to the Spices & Flavor Solutions business unit) of $1.6$5.1 million, or 0.5%1.4% of base business net sales,sales and the positive impact of foreign currency of $1.7$0.2 million, or 0.5%0.1% of base business net sales.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increaseddecreased $1.1$6.6 million, or 2.2%,14.0%, to $50.2$40.6 million for the firstsecond quarter of 2026 from $49.1$47.2 million for the firstsecond quarter of 2025. The increasedecrease was composed of decreases in warehousing expenses of $3.7 million, general and administrative expenses of $2.7 million, consumer marketing expenses of $1.7 million, and selling expenses of $0.8 million, partially offset by an increase in acquisition/divestiture-related and non-recurring expenses of $6.4 million, inclusive of an increase of $1.9 million for disposals and impairments of property, plant and equipment. This increase was partially offset by decreases in general and administrative expenses of $3.9 million and warehousing expenses of $1.4$2.3 million. Expressed as a percentage of net sales, selling, general and administrative expenses increasedimproved by 0.70.5 percentage points to 12.3%10.6% for the firstsecond quarter of 2026, as compared to 11.6%11.1% for the firstsecond quarter of 2025.

Amortization Expense. Amortization expense decreased $0.7$0.6 million, or 14.3%,12.6%, to $4.4$4.5 million for the firstsecond quarter of 2026 from $5.1 million for the firstsecond quarter of 2025.

Loss on Sale of Assets. During the firstsecond quarter of 2026,2025, we completed the Don Pepino divestiture and recognized a loss on sale of assets$12.6 of $36.3 million, primarily related to the Green Giant U.S. frozen divestiture.million.

Operating (Loss) Income. As a result of the foregoing, operating lossincome decreasedincreased $46.8$12.6 million, or 130.6%,57.0%, to an operating loss of $11.0$34.6 million for the firstsecond quarter of 2026 from an operating income of $35.8$22.0 million for the firstsecond quarter of 2025. Operating (loss) income expressed as a percentage of net sales decreasedincreased to 2.7%9.0% in the firstsecond quarter of 2026 from 8.4%5.2% in the firstsecond quarter of 2025.

Other Income. Other income for the firstsecond quarter of 2026 and 2025 includes the expectednon-service returnportion onof net periodic pension plan assetscost and thenet amortizationperiodic of unrecognized gain less the interest cost on the projectedpost-retirement benefit obligationcosts of $1.5 million and $1.1$1.2 million, respectively.

Income Tax Benefit.Expense (Benefit). Income tax benefitexpense increased $11.1$4.4 million to $12.7an income tax expense of $1.6 million for the firstsecond quarter of 2026 from $1.6an income tax benefit of $2.8 million for the firstsecond quarter of 2025. Our effective tax rate was 28.1%negative 68.1% for the firstsecond quarter of 2026 and 209.2%22.1% for the firstsecond quarter of 2025.

During the firstsecond quarter of 2026, we recorded a net discrete tax expensebenefit of $1.6$0.1 million, primarily related to a discretemiscellaneous tax expense related to stock-based compensation, partially offset by a discrete tax benefit related to a return-to-provision adjustment in Mexico.true-ups. We’ve recognized approximately $1.5$0.8 million of an increased valuation allowance during the firstsecond quarter of 2026, and we expect to recognize approximately $10.8$11.7 million in total during full year fiscal 2026.

During the first two quarters of 2025, we recorded a net discrete tax benefit of $1.0 million. During the first quarter of 2025, we recorded a net discrete tax benefit of $1.4 million, including a discrete tax benefit of $2.1 million for the tax effect of a pre-transition loss related to Section 987 of the Internal Revenue Code of 1986 for the cumulative unrecognized foreign exchange loss relating to our primary operating subsidiary in Canada, which is a qualified business unit for purposes of Section 987, partially offset by a discrete tax expense of $0.7 million related to stock-based compensation and rate changes. During the second quarter of 2025, we recorded a net discrete tax expense of $0.4 million, primarily related to a settlement for FASB Interpretation No. 48: Managing Uncertain Tax Positions (FIN 48).

Business Segment Operating Results. We operate in four reportable business segments: Specialty; Meals; Frozen & Vegetables; and Spices & Flavor Solutions. See Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report for a description of our business segments and for a reconciliation of the non-GAAP financial measure segment adjusted EBITDA to net (loss) income.loss.

The decrease in Specialty segment net sales for the second quarter and first quartertwo quarters of 2026 was primarily due to a decrease in volumes in the Specialty portfolio and the divestiture of the Don Pepino business, which generated $3.5$1.8 million and $5.3 million of net sales in the firstsecond quarter and first two quarters of 2025.2025, respectively.

The decrease in Specialty segment adjusted EBITDA for the second quarter and first quartertwo quarters of 2026 was primarily due to higher oil input costs for the Crisco brand, the Don Pepino divestiture,divestiture anand increasea decline in raw material costs and manufacturing expenses as a percentage of net sales and the impact of tariffs.volumes.

The increase in Meals segment net sales for the second quarter and first quartertwo quarters of 2026 was primarily due to the College Inn and Kitchen Basics acquisition on March 19, 2026,acquisition, which contributed $2.9$13.2 million and $16.1 million, of net sales for the firstsecond quarter of 2026 during ourand first two weeksquarters of ownership2026, of the brands,respectively, and an increase in net pricing and the impact of product mix, offset in part by modestly lower volumes across the Meals segment in the aggregate.aggregate, after excluding the benefit of the net sales from the College Inn and Kitchen Basics acquisition.

The increase in Meals segment adjusted EBITDA in the second quarter of 2026 was primarily due to the increase in Meals segment net sales, primarily attributable to the College Inn and Kitchen Basics acquisition. The decrease in Meals segment adjusted EBITDA in the first quartertwo quarters of 2026 was primarily due to an increase in certain raw material costs and manufacturing expenses. Meals segment adjusted EBITDA was also impacted by increases in trade spending and direct marketing expenses for certain brands. These incremental costs were offset in part by an increase in overall net pricing for the Meals segment and the impact of product mix.mix, and the College Inn and Kitchen Basics acquisition.

The decrease in Frozen & Vegetables segment net sales for the second quarter and first quartertwo quarters of 2026 was primarily due to the Green Giant U.S. frozen divestiture (which negatively impacted net sales versus the second quarter and first quartertwo quarters of 2025 by $18.7$34.5 million and $53.1 million, respectively, net of the $8.5$23.9 million and $32.5 million positive impact on net sales of our new Green Giant U.S. frozen co-manufacturing agreement) and the Le Sueur U.S. divestiture (which negatively impacted net sales versus the second quarter and first quartertwo quarters of 2025 by $7.2$7.9 million and $15.1 million, respectively). Net sales for Green Giant Canada increased by $4.2$0.5 million, or 16.4%,2.4%, and $4.8 million, or 9.8%, for the firstsecond quarter and first two quarters of 2026.2026, respectively.

The increase in Frozen & Vegetables segment adjusted EBITDA for the second quarter and first quartertwo quarters of 2026 was primarily due to a decrease in raw material and manufacturing costs, the favorableGreen impactGiant ofU.S. foreignfrozen currency on cost of goods,divestiture and the favorable impact of our new Green Giant U.S. frozen co-manufacturing agreement, offset in part by lower net sales.agreement.

The increase in Spices & Flavor Solutions segment net sales for the first quartertwo quarters of 2026 was primarily due to an increase in volumesnet acrosspricing and strong growth in the foodservice and private label channels. Spices & Flavor Solutions businesssegment unitnet insales for the aggregatesecond andquarter of 2026 were slightly higher due to an increase in net pricing and the impactcontinued ofgrowth productin mix.the foodservice and private label channels, partially offset by declines in the retail channel.

The increase in Spices & Flavor Solutions segment adjusted EBITDA for the second quarter and first quartertwo quarters of 2026 was primarily due to increased volumes and to a lessor extent an increase in net pricing, offsettariff refunds that were received from the U.S. government during the second quarter, and a reduction in part by increases in raw materialinput costs (particularly for garlicspices andrelative black pepper) andto the impactfirst two quarters of tariffs.last year.

Unallocated Corporate Items. Unallocated corporate expenses decreased $1.5$2.7 million, or 6.0%12.6% in the firstsecond quarter of 2026 to $22.7$19.1 million from $24.2$21.8 million for the second quarter of 2025. Unallocated corporate expenses decreased $4.2 million, or 9.1% in the first two quarters of 2026 to $41.8 million from $46.0 million for the first quartertwo quarters of 2025.

Net Sales by Brand. The following table sets forth net sales for each of our brands whose net sales for the first quartertwo quarters of 2026 or fiscal 2025 equaled or exceeded 3% of our total net sales for those periods, and for all other brands in the aggregate (in thousands):

Net Cash Provided by Operating Activities. Net cash provided by operating activities decreased $29.1$12.6 million to $23.6$58.0 million for the first quartertwo quarters of 2026, as compared to $52.7$70.6 million for the first quartertwo quarters of 2025. The decrease was primarily driven by lower net sales in the first quartertwo quarters of 2026 as compared to the first quartertwo quarters of 2025, and unfavorable working capital comparisons in the first quartertwo quarters of 2026 as compared to the first quartertwo quarters of 2025, primarily comprised of trade accounts receivable andreceivable, trade accounts payable and income tax receivable/payable, net, partially offset by a favorable working capital comparison for accrued expenses and inventories.prepaid expenses and other current assets.

Net Cash Used in Investing Activities. Net cash used in investing activities increased $41.1$53.4 million to $51.4$59.3 million for the first quartertwo quarters of 2026, as compared to $10.3$5.9 million for the first quartertwo quarters of 2025. The increase was primarily attributable to the $109.7 million purchase price we paid for the College Inn and Kitchen Basics acquisition, partially offset by the $61.5 million of proceeds we received from the Green Giant U.S. frozen divestiture and a $5.5$5.7 million decrease in capital expenditures in the first quartertwo quarters of 2026 as compared to the first quartertwo quarters of 2025.

Net Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities increased $68.1$598.8 million to $36.2$537.0 million of net cash provided by financing activities for the first quartertwo quarters of 2026, as compared to $31.9$61.8 million of net cash used in financing activities for the first quartertwo quarters of 2025. The increase was primarily driven by a $70.0$618.6 million increase in net cash flows from long-term debt (proceeds of borrowings, net of redemptions, repurchases and repayments)., because we received the proceeds of the issuance of our 11.00% senior notes due 2031 on June 10, 2026, but did not make the redemption payment for our 5.25% senior notes due 2027 until July 6, 2026, subsequent to the end of the second quarter of 2026.