MARZETTI CO

Note 1 –Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of The Marzetti Company and our wholly-owned subsidiaries, collectively referred to as “we,” “us,” “our,” “registrant” or the “Company” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and SEC Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim condensed consolidated financial statements are considered to be of a normal recurring nature. Intercompany transactions and accounts have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our 2026 Annual Report on Form 10-K. Unless otherwise noted, the term “year” and references to a particular year pertain to our fiscal year, which begins on July 1 and ends on June 30; for example, 2027 refers to fiscal 2027, which is the period from July 1, 2026 to June 30, 2027.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, except for those acquired as part of a business combination, which are recorded at fair value at the time of purchase. We use the straight-line method of computing depreciation for financial reporting purposes based on the estimated useful lives of the corresponding assets. Purchases of property, plant and equipment included in Accounts Payable and excluded from the property additions and the change in accounts payable in the Condensed Consolidated Statements of Cash Flows were as follows:

Accrued Compensation and Employee Benefits

Accrued compensation and employee benefits included in Accrued Liabilities was $22.4 million and $30.7 million at September 30, 2026 and June 30, 2026, respectively.

Earnings Per Share

Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock awards, restricted stock units, stock-settled stock appreciation rights and performance units) outstanding during each period. Unvested shares of restricted stock awards granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock awards, restricted stock units, stock-settled stock appreciation rights and performance units.

Basic and diluted net income per common share were calculated as follows:

Significant Accounting Policies

There were no changes to our Significant Accounting Policies from those disclosed in our 2026 Annual Report on Form 10-K.

Recent Accounting Standards

In November 2024, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance requiring disclosure of disaggregated income statement expenses. For each relevant expense caption presented on the face of the income statement, the following expense components must be presented in a tabular format within the notes to the financial statements at each interim and annual reporting period: purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion expense. Certain amounts already required to be disclosed under current GAAP requirements must also be presented in the same disclosure as the new disaggregation requirements. The new guidance also requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. Additionally, the total amount of selling expenses must be disclosed, and, in annual reporting periods, our definition of selling expenses must also be provided. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. This guidance will be effective for our annual disclosures in fiscal 2028 and for our interim-period disclosures in fiscal 2029. As the guidance only relates to disclosures, there will be no impact on our financial position or results of operations.

In July 2025, the FASB issued new accounting guidance related to the measurement of credit losses for accounts receivable and contract assets. In developing reasonable and supportable forecasts as part of estimating credit losses, all entities may elect a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. An entity that elects the practical expedient should apply the amendment on a prospective basis. We adopted this guidance in the first quarter of fiscal 2027, and there was no impact on our financial position or results of operations.

In December 2025, the FASB issued new accounting guidance related to the recognition, measurement and presentation of government grants. The amendments should be applied using a modified prospective approach, a modified retrospective approach or a full retrospective approach. This guidance will be effective for us in fiscal 2030, including interim periods. Early adoption is permitted. We are currently evaluating the impact of this guidance.

Note 2 –Acquisition

On May 1, 2026, we completed the acquisition of Bachan’s, Inc. (“Bachan’s”), the Japanese Barbecue Sauce brand known for its authentic, clean-label products. The transaction reinforces our expanding position in the sauce category and is expected to provide additional opportunities for growth through our retail and foodservice distribution network, supply chain capabilities, and culinary expertise. The purchase price of $399.3 million, net of cash acquired, was financed with cash on hand and a $200.0 million term loan. The results of operations for Bachan’s have been included in our condensed consolidated financial statements from the date of acquisition.

The following table summarizes the preliminary purchase price allocation based on the fair value of the net assets acquired.

Further adjustments may occur to the allocation above as certain aspects of the transaction, primarily related to income taxes, are finalized during the measurement period.

The goodwill recognized above arose because the purchase price for Bachan’s reflected a number of factors including the future earnings and cash flow potential of Bachan’s, as well as the potential to broaden distribution; realize cost synergies across procurement, manufacturing, and distribution; support product innovation; and extend the brand into new channels and adjacent categories in the future. A small amount of goodwill also resulted from the workforce acquired. As Bachan’s is expected to primarily produce products for our Retail segment, all goodwill from this acquisition was recorded to the Retail segment.

We have determined values and lives of the other intangible assets listed in the allocation above as: $84.0 million for the customer relationships with a 12-year life; $29.0 million for the proprietary recipes with a 16-year life and $14.0 million for the tradename with a 17-year life.

Pro forma results of operations have not been presented herein as the acquisition was not material to our results of operations.

Note 3 –Long-Term Debt

At September 30, 2026 and June 30, 2026, the First Amendment to our Credit Agreement (“Credit Agreement”) provided for the following:

•Revolving credit availability of $200 million with potential to expand the revolving credit availability to $400 million based on consent of the Administrative Agent and any incremental lenders and certain other conditions. All outstanding revolving loans are due and payable when the Credit Agreement expires on March 6, 2029. Revolving loans may be used for general corporate purposes.

•An additional $200 million term loan to finance our acquisition of Bachan’s. On April 29, 2026, we closed on the funding of the term loan. The maturity date for the term loan is April 29, 2031; however, the Amendment provides for a springing maturity date of March 6, 2029 if, by December 6, 2028, the Facility Termination Date has not been extended to April 29, 2031 or later with an Aggregate Revolving Commitment equal to or greater than the outstanding principal balance of the term loan (as such capitalized terms are defined in the Credit Agreement).

Interest is variable based upon formulas tied to SOFR or an alternate base rate defined in the Credit Agreement. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio.

The Credit Agreement contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires us to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires us to maintain a consolidated net leverage ratio not greater than 3.5 to 1, subject to certain exceptions. The interest coverage ratio is calculated by dividing Consolidated EBIT by Consolidated Interest Expense, and the leverage ratio is calculated by dividing Consolidated Net Debt by Consolidated EBITDA. All financial terms used in the covenant calculations are defined more specifically in the Credit Agreement.

We had the following borrowings outstanding at September 30, 2026 and June 30, 2026:

The carrying value of the long-term debt approximates its fair value because the term loan bears interest at a variable rate that reprices periodically to reflect current market rates. The estimated fair value of the term loan is classified as Level 2 within the fair value hierarchy.

At September 30, 2026 and June 30, 2026, we had $2.5 million and $2.6 million, respectively, of standby letters of credit outstanding, which reduced the amount available for borrowing under the Credit Agreement. We paid interest of $2.8 million for thethree months ended September 30, 2026. We paidno interest for the three months ended September 30, 2025.

At September 30, 2026, contractual maturities of long-term debt, excluding unamortized debt issuance costs, were as follows:

Note 4 –Commitments and Contingencies

At September 30, 2026, we were a party to various claims and litigation matters arising in the ordinary course of business. Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition is not expected to have a material effect on our consolidated financial statements.

We have a lease commitment with fixed cash payments totaling approximately $159 million for a lease that had not commenced as of September 30, 2026. This lease has an initial term of 15 years for warehousing space in Columbus, Ohio. In accordance with accounting guidance for leases, this commitment is properly excluded from the Condensed Consolidated Balance Sheet as of September 30, 2026. A right-of-use asset and lease liability will be recorded based on the present value of the lease payments when the lease commences later in fiscal 2027.

Note 5 –Goodwill and Other Intangible Assets

At both September 30, 2026 and June 30, 2026, goodwill attributable to the Retail and Foodservice segments was $435.1 million and $65.4 million, respectively.

The following table summarizes our identifiable other intangible assets:

Amortization expense for our other intangible assets, which is reflected in Selling, General and Administrative Expenses, was as follows:

Total annual amortization expense for each of the next five years is estimated to be as follows:

Note 6 –Income Taxes

Prepaid federal income taxes of $10.0 million and $4.2 million were included in Other Current Assets at September 30, 2026 and June 30, 2026, respectively. Prepaid state and local income taxes of $0.4 million and $0.8 million were included in Other Current Assets at September 30, 2026 and June 30, 2026, respectively.

Note 7 –Business Segment Information

Our financial results are presented astwo reportable segments: Retail and Foodservice. Costs that are directly attributable to either Retail or Foodservice are charged directly to the appropriate segment. Costs that are deemed to be indirect, excluding corporate expenses and other unusual significant transactions, are allocated to the two reportable segments using a reasonable methodology that is consistently applied.

Retail - The vast majority of the products we sell in the Retail segment are sold through sales personnel, food brokers and distributors in the United States. Our sauce products, which include both licensed sauces and our own branded sauces, are typically marketed in the shelf-stable section of the grocery store. Our dressings and dips, which include licensed dressings, as well as our own branded dressings, vegetable dips and fruit dips, are marketed in both the shelf-stable section and the produce department of the grocery store. Our breads and pasta products include yeast rolls, garlic breads and pasta within the frozen food section of the grocery store, as well as pasta and croutons within the shelf-stable section of the grocery store.

Foodservice - The vast majority of the products we sell in the Foodservice segment are sold through sales personnel, food brokers and distributors in the United States. Most of the products we sell in the Foodservice segment are custom-formulated sauces, dressings, pasta, frozen breads and yeast rolls. The majority of our Foodservice sales are products sold under private label to national chain restaurant accounts. We also manufacture and sell various branded Foodservice products to distributors. Finally, within this segment, we manufactured and sold certain salad dressing and sauce products under a temporary supply agreement (“TSA”) resulting from our acquisition of a sauce and dressing production facility located in Atlanta, Georgia. The TSA sales commenced in March 2025 and concluded during the quarter ended March 31, 2026.

Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. Our CODM evaluates segment performance based on net sales and operating income. On a monthly basis, our CODM reviews results in comparison to the annual operating plan (“AOP”), the latest forecast and prior-year results. Resource allocation decisions are primarily made through the forecasting process, including development of the AOP. As many of our products are similar between our two segments, our procurement, manufacturing, warehousing and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity. Consequently, we do not prepare, and our CODM does not review, separate balance sheets or property additions for the reportable segments. As such, our external reporting does not include the presentation of identifiable assets or depreciation and amortization separately by reportable segment.

The following table sets forth net sales disaggregated by class of similar products for the Retail and Foodservice segments. In fiscal 2027, we revised the product categories within each segment to better reflect how management views and manages our product portfolio. Prior-year data has been recast to conform to the current presentation. These changes had no impact on the determination of our reportable segments; the segment-level financial information regularly reviewed by our CODM; or our previously reported consolidated net sales, Retail segment net sales, or Foodservice segment net sales.

The following table provides an additional disaggregation of Foodservice net sales by type of customer:

The following tables provide financial information attributable to our reportable segments, including significant segment expenses, as well as certain amounts not allocated among our reportable segments. Net sales are predominately domestic. All intercompany transactions have been eliminated. Nonallocated corporate expenses include various expenses of a general corporate nature and costs related to certain divested or closed nonfood operations.

(1)Nonallocated restructuring, impairment and other in fiscal 2026 resulted from the closure of our Milpitas, California sauce and dressing manufacturing facility.

The following table sets forth reconciliations of our reportable segments’ total identifiable assets to the consolidated totals and our reportable segments’ total depreciation and amortization expenses to the consolidated totals:

(1)Long-lived assets are predominately domestic. Retail and Foodservice identifiable assets include those assets used in our operations and other intangible assets allocated to purchased businesses. Corporate assets consist principally of cash and equivalents, deferred software costs and prepaid income taxes. The composition of our identifiable assets at September 30, 2026 is generally consistent with that of June 30, 2026.

(2)As discussed above, we do not present identifiable assets or depreciation and amortization separately by reportable segment.

Note 8 –Stock-Based Compensation

Our shareholders previously approved the Lancaster Colony Corporation 2015 Omnibus Incentive Plan (the “2015 Plan”). As the 2015 Plan expired in November 2025, we obtained shareholder approval of The Marzetti Company 2025 Omnibus Incentive Plan (the “2025 Plan”) at our November 2025 Annual Meeting of Shareholders. The 2025 Plan did not affect any currently outstanding equity awards granted under the 2015 Plan. The 2025 Plan reserved 1,500,000 common shares for issuance to our employees and directors. All awards granted under these plans will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under these plans varies as to the type of award granted, and the maximum term of these awards isseven years.

Our restricted stock units compensation expense was $0.9 million and $0.2 million for the three months ended September 30, 2026 and 2025, respectively. At September 30, 2026, there was $10.0 million of unrecognized compensation expense related to restricted stock units that we will recognize over a weighted-average period of 2 years.

Our restricted stock awards compensation expense was $0.8 million and $1.4 million for the three months ended September 30, 2026 and 2025, respectively. At September 30, 2026, there was $1.8 million of unrecognized compensation expense related to restricted stock awards that we will recognize over a weighted-average period of 1 year.

Our performance units compensation expense was $1.1 million and $1.0 million for the three months ended September 30, 2026 and 2025, respectively. At September 30, 2026, there was $9.1 million of unrecognized compensation expense related to performance units that we will recognize over a weighted-average period of 2 years.