BG Foods Inc

Previous wording

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 thirty-nine weeks ended September 28, 2024 (third quarter and first three quarters of 2024) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended December 30, 2023 (fiscal 2023) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2024 (which we refer to as our 2023 Annual Report on Form 10-K).

Current wording

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 weeks ended March 29, 2025 (first quarter of 2025) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended December 28, 2024 (fiscal 2024) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 25, 2025 (which we refer to as our 2024 Annual Report on Form 10-K).

Previous wording

Since 1996, we have successfully acquired and integrated more than 50 brands or businesses into our company. More recently, in an attempt to sharpen focus, improve margins and reduce our long-term debt, we have begun reshaping our portfolio through select divestitures. For example, on January 3, 2023, we completed the sale of theBack to Nature business. We refer to this divestiture in this report as the “Back to Nature sale” or “Back to Nature divestiture.” On November 8, 2023, we completed the sale of theGreen Giant U.S. shelf-stable product line. These divestitures affect comparability between periods. We have also decided to place our frozen and remaining shelf-stable vegetable businesses under strategic review and we are evaluating a possible divestiture of some or all of the assets in our Frozen & Vegetables business unit, either in a single transaction or in a series of transactions.

Current wording

Since 1996, we have successfully acquired and integrated more than 50 brands or businesses into our company. More recently, in an attempt to sharpen focus, improve margins and reduce our long-term debt, we have begun reshaping our portfolio through select divestitures. For example, on January 3, 2023, we completed the sale of theBack to Nature business. On November 8, 2023, we completed the sale of theGreen Giant U.S. shelf-stable product line. We have also decided to place our frozen and remaining shelf-stable vegetable businesses under strategic review and we are evaluating a possible divestiture of some or all of the assets in our Frozen & Vegetables business unit, either in a single transaction or in a series of transactions.

Previous wording

We experienced material net cost increases for raw materials during the last several years due to a number of factors, including the war in Ukraine and the COVID-19 pandemic. Raw material costs remained elevated in fiscal 2023 and the first three quarters of 2024 and we anticipate that certain raw material costs will remain elevated during the remainder of fiscal 2024. We are currently locked into our supply and prices for a majority of our most significant raw material commodities through the remainder of fiscal 2024.

Current wording

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 2024 and the first quarter of 2025 and we anticipate that certain raw material costs will remain elevated during the remainder of fiscal 2025. We are currently locked into our supply and prices for a majority of our most significant raw material commodities through the second or third quarter of 2025.

Previous wording

In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. Freight rates increased significantly during the fourth quarter of 2020 and throughout fiscal 2021 and fiscal 2022. We attempt to offset all or a portion of these increases through price increases and cost savings initiatives. For example, despite higher rates for freight in 2021 and 2022, we were able to offset a portion of the freight cost increases through pricing, which included both list price increases and trade spend optimization. Although freight rates began to decline in 2023, freight rates remained elevated during the first three quarters of 2024 and we expect freight rates to remain elevated during the remainder of fiscal 2024 and into fiscal 2025.

Current wording

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

Previous wording

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. Beginning in the fourth quarter of 2022 through the fourth quarter of 2023, we saw improvements in our gross profit and gross profit margins as our net pricing has to a large extent caught up with input cost increases. However, to the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost 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.

Current wording

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 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.

Previous wording

*Changing Consumer Preferences and Channel Shifts.*Consumers in the market categories in which we compete frequently change their taste preferences, dietary habits and product packaging preferences. In addition, the rapid growth of some channels and changing consumer preferences for these channels, in particular in e-commerce, which has expanded significantly following the outbreak of COVID-19, may impact our current operations or strategies more quickly than we planned for, create consumer price deflation, alter the buying behavior of consumers or disrupt our retail customer relationships. As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and new product innovation to protect or increase revenues, market share and brand significance. These expenditures may not be successful, including those related to our e-commerce and other technology-focused efforts, and might not result in trade and consumer acceptance of our efforts. If we are unable to effectively and timely adapt to changes in consumer preferences and channel shifts, our products may lose market share or we may face significant price erosion, and our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

Current wording

*Changing Consumer Preferences and Channel Shifts.*Consumers in the market categories in which we compete frequently change their taste preferences, dietary habits and product packaging preferences. In addition, the rapid growth of some channels and changing consumer preferences for these channels, in particular in e-commerce, may impact our current operations or strategies more quickly than we planned for, create consumer price deflation, alter the buying behavior of consumers or disrupt our retail customer relationships. As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and new product innovation to protect or increase revenues, market share and brand significance. These expenditures may not be successful, including those related to our e-commerce and other technology-focused efforts, and might not result in trade and consumer acceptance of our efforts. If we are unable to effectively and timely adapt to changes in consumer preferences and channel shifts, our products may lose market share or we may face significant price erosion, and our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

Previous wording

*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 three quarters of 2024 and 2023, our net sales to customers in foreign countries represented approximately 9.1% and 8.7%, respectively, of our total net sales. We also purchase a significant majority of our maple syrup requirements from suppliers located in Québec, Canada. Any weakening of the U.S. dollar against the Canadian dollar could significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars in advance of any such weakening of the U.S. dollar 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.

Current wording

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.

Previous wording

dollars for consolidation into our consolidated financial statements. For example, our results of operations from ourGreen Giantfrozen operations in Mexico were negatively impacted during fiscal 2023 as a result of the Mexican peso appreciating by approximately 15% against the U.S. dollar during that period, and have continued to be negatively impacted during fiscal 2024.

Current wording

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, our results of operations from ourGreen Giant frozen operations in Mexico were negatively impacted during fiscal 2024 as a result of the Mexican peso appreciating against the U.S. dollar.

Previous wording

In our 2023 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our unaudited consolidated interim financial statements. There have been no material changes to these policies from those disclosed in our 2023 Annual Report on Form 10-K, other than that during the first quarter of 2024, we reorganized our reporting structure, leading to a change of our operating and reportable segments. This change stemmed from our recent formation and the evolution of our four business units, which are: Specialty, Meals, Frozen & Vegetables, and Spices & Flavor Solutions. Previously, we had operated under a single operating and reportable segment. See Note 16, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report for more information about our four business segments.

Current wording

In our 2024 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our unaudited consolidated interim financial statements. There have been no material changes to these policies from those disclosed in our 2024 Annual Report on Form 10-K.

Previous wording

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 2023, resulting in an increase to taxable income of $107.7 million. We expect to continue to be subject to the interest deduction limitation in fiscal 2024 and future years. We have recorded a deferred tax asset of $46.9 million for fiscal 2023 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

Current wording

The Tax Cuts and Jobs Act of 2017, which we refer to as the “U.S. Tax Act,” limits the deduction for netinterest 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. 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, resulting in an increase to taxable income of $110.8 million. We expect to continue to be subject to the interest deduction limitation in fiscal 2025 and future years. We have recorded a deferred tax asset of $72.7 million for fiscal 2024, 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 million for fiscal 2024. We expect to continue to be unable to fully utilize interest expense deductions in fiscal 2025 and future periods, which will negatively impact our cash taxes. In addition, 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 ““—Liquidity and Capital Resources—Cash Flows–Cash Income Tax Payments.”

Previous wording

The U.S. Treasury issued several regulations supplementing the U.S. Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, application of the existing foreign tax credit rules to newly created categories and expanding details for application of the base erosion tax on affiliate payments. These regulations are to be applied retroactively and did not materially impact our tax rates in the first three quarters of 2024 or fiscal 2023.

Current wording

The U.S. Treasury issued several regulations supplementing the U.S. Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, application of the existing foreign tax credit rules to newly created categories and expanding details for application of the base erosion tax on

Previous wording

The following table sets forth the percentages of net sales represented by selected items for the third quarter and first three quarters of 2024 and 2023 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:

Current wording

The following table sets forth the percentages of net sales represented by selected items for the first quarter of 2025 and 2024 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:

Previous wording

*Net Interest Expense.*Net interest expense includes interest relating to our outstanding indebtedness, amortization of bond discount/premium and amortization of deferred debt financing costs (net of interest income).

Current wording

*Net Interest Expense.*Net interest expense includes interest relating to our outstanding indebtedness, amortization of bond discount and amortization of deferred debt financing costs (net of interest income).

Previous wording

*Other Income.*Other income includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs, and income or expense resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes.

Current wording

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

Previous wording

A reconciliation of net sales to base business net sales for the third quarter and first three quarters of 2024 and 2023 follows (in thousands):

Current wording

A reconciliation of net sales to base business net sales for the first quarter of 2025 and 2024 follows (in thousands):

Previous wording

Management believes that it is useful to eliminate these items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. We use EBITDA and adjusted EBITDA in our business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indentures contain ratios based on these measures. As a result, reports used by internal management during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity, and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity.

Current wording

operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement, our senior secured notes indenture and our senior notes indenture contain ratios based on these measures. As a result, reports used by internal management during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity, and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity.

Previous wording

Reconciliations of net income (loss) and net cash provided by operating activities to EBITDA and adjusted EBITDA for the third quarter and first three quarters of 2024 and 2023 along with the components of EBITDA and adjusted EBITDA follows (in thousands):

Current wording

Reconciliations of net income (loss) and net cash provided by operating activities to EBITDA and adjusted EBITDA for the first quarter of 2025 and 2024 along with the components of EBITDA and adjusted EBITDA follows (in thousands):

Previous wording

A reconciliation of net income (loss) to adjusted net income and adjusted diluted earnings per share for the third quarter and first three quarters of 2024 and 2023 along with the components of adjusted net income and adjusted diluted earnings per share follows (in thousands):

Current wording

A reconciliation of net income (loss) to adjusted net income and adjusted diluted earnings per share for the first quarter of 2025 and 2024 along with the components of adjusted net income and adjusted diluted earnings per share follows (in thousands):

Previous wording

*Segment Adjusted EBITDA.*For a discussion of segment adjusted EBITDA and a reconciliation of segment adjusted EBITDA to net income (loss), see Note 16, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Current wording

*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 income (loss), see Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Previous wording

Adjusted Gross Profit and Adjusted Gross Profit Percentage.* *Adjusted gross profit and adjusted gross profit percentage are non-GAAP financial measures used by management to measure operating performance. We define adjusted gross profit as gross profit adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold and adjusted gross profit percentage as gross profit percentage (i.e., gross profit as a percentage of net sales) adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold. These non-GAAP financial measures reflect adjustments to gross profit and gross profit percentage to eliminate the items identified in the reconciliation below. This information is provided in order to allow investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because we cannot predict the timing and amount of these items, management does not consider these items when evaluating our performance or when making decisions regarding allocation of resources.

Current wording

of goods sold. These non-GAAP financial measures reflect adjustments to gross profit and gross profit percentage to eliminate the items identified in the reconciliation below. This information is provided in order to allow investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because we cannot predict the timing and amount of these items, management does not consider these items when evaluating our performance or when making decisions regarding allocation of resources.

Previous wording

A reconciliation of gross profit to adjusted gross profit and gross profit percentage to adjusted gross profit percentage for the third quarter and first three quarters of 2024 and 2023, respectively, follows (in thousands, except percentages):

Current wording

A reconciliation of gross profit to adjusted gross profit and gross profit percentage to adjusted gross profit percentage for the first quarter of 2025 and 2024, respectively, follows (in thousands, except percentages):

Previous wording

Net Sales.Net sales for the first three quarters of 2024 decreased $103.3 million, or 7.0%, to $1,380.9 million from $1,484.2 million for the first three quarters of 2023. The decrease was primarily attributable to theGreen Giant U.S. shelf-stable divestiture, a decrease in unit volume, a decrease in net pricing and the impact of product mix, and the negative impact of foreign currency. Net sales of theGreen GiantU.S. shelf-stable product line, which we divested on November 8, 2023, were $48.6 million in the first three quarters of 2023.

Current wording

*Net Sales.*Net sales for the first quarter of 2025 decreased $49.8 million, or 10.5%, to $425.4 million from $475.2 million for the first quarter of 2024. The decrease was primarily attributable to a decrease in volume, a decrease in net pricing and the impact of product mix, and the negative impact of foreign currency.

Previous wording

Base business net sales for the first three quarters of 2024 decreased $54.7 million, or 3.8%, to $1,381.0 million from $1,435.7 million for the first three quarters of 2023. The decrease in base business net sales was driven by a decrease in unit volume of $38.7 million, or 2.7%, a decrease in net pricing and the impact of product mix of $15.5 million, or 1.1% of base business net sales, and the negative impact of foreign currency of $0.5 million.

Current wording

Base business net sales for the first quarter of 2025 decreased $49.9 million, or 10.5%, to $425.4 million from $475.3 million for the first quarter of 2024. The decrease in base business net sales was driven by a decrease in volume of $42.4 million, or 8.9%, a decrease in net pricing and the impact of product mix of $5.5 million, or 1.2% of base business net sales, and the negative impact of foreign currency of $2.0 million.

Previous wording

*Gross Profit.*Gross profit was $102.3 million for the third quarter of 2024, or 22.2% of net sales. Adjusted gross profit, which excludes the negative impact of $0.1 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the third quarter of 2024, was $102.4 million, or 22.2% of net sales. Gross profit was $113.8 million for the third quarter of 2023, or 22.6% of net sales. Adjusted gross profit, which excludes the negative impact of $0.3 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the third quarter of 2023, was $114.1 million, or 22.7% of net sales.

Current wording

*Gross Profit.*Gross profit was $90.1 million for the first quarter of 2025, or 21.2% of net sales. Adjusted gross profit, which excludes the negative impact of $0.5 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the first quarter of 2025, was $90.6 million, or 21.3% of net sales. Gross profit was $108.9 million for the first quarter of 2024, or 22.9% of net sales. Adjusted gross profit, which excludes the negative impact of $1.0 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the first quarter of 2024, was $109.9 million, or 23.1% of net sales.

Previous wording

*Selling, General and Administrative Expenses.*Selling, general and administrative expenses decreased $2.2 million, or 4.6%, to $46.0 million for the third quarter of 2024 from $48.2 million for the third quarter of 2023. The decrease was composed of decreases in consumer marketing expenses of $1.2 million, warehousing expenses of $0.9 million, selling expenses of $0.8 million, and acquisition/divestiture-related and non-recurring expenses of $0.6 million, partially offset by an increase in general and administrative expenses of $1.3 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 0.4 percentage points to 10.0% for the third quarter of 2024, as compared to 9.6% for the third quarter of 2023.

Current wording

*Selling, General and Administrative Expenses.*Selling, general and administrative expenses increased $0.5 million, or 1.1%, to $49.1 million for the first quarter of 2025 from $48.6 million for the first quarter of 2024. The increase was composed of increases in acquisition/divestiture-related and non-recurring expenses of $4.2 million and general and administrative expenses of $0.5 million, partially offset by decreases in consumer marketing expenses of $3.3 million and selling expenses of $0.9 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 1.4 percentage points to 11.6% for the first quarter of 2025, as compared to 10.2% for the first quarter of 2024.

Previous wording

Impairment of Goodwill. In connection with our transition from one reporting segment to four reporting segments during the first quarter of 2024, we reassigned assets and liabilities, including goodwill, between the reporting segments and completed a goodwill impairment test both prior to and subsequent to the change. The goodwill impairment test resulted in us recognizing pre-tax, non-cash goodwill impairment charges of $70.6 million within our Frozen & Vegetables reporting segment during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible Assets,” and Note 16, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report.

Current wording

Impairment of Goodwill. In connection with our transition from one reportable segment to four reportable segments during the first quarter of 2024, we reassigned assets and liabilities, including goodwill, between four reporting units (which are the same as our reportable segments) and completed a goodwill impairment test, both prior to and subsequent to the change, comparing the fair values of the reporting units to the carrying values. The goodwill impairment test resulted in us recognizing pre-tax, non-cash goodwill impairment charges of $70.6 million within our Frozen & Vegetables reporting segment during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible

Previous wording

Loss on Sales of Assets. During the first quarter of 2024, we recorded a post-closing inventory adjustment related to theGreen Giant U.S. shelf-stable divestiture and recorded an additional loss on sale of assets of $0.1 million.* During the first quarter of 2023, we completed theBack to Nature* divestiture and we recorded an additional loss on sale of assets of $0.1 million.

Current wording

Loss on Sales of Assets. During the first quarter of 2024, we recorded a post-closing inventory adjustment related to theGreen Giant U.S. shelf-stable divestiture and recorded an additional loss on sale of assets of $0.1 million.* *

Previous wording

*Operating Income (Loss).*As a result of the foregoing, operating income increased $123.7 million, or 170.7%, to an operating income of $51.2 million for the third quarter of 2024 from an operating loss of $72.5 million for the third quarter of 2023. Operating income (loss) expressed as a percentage of net sales decreased to 11.1% in the third quarter of 2024 from 14.4% in the third quarter of 2023.

Current wording

*Operating Income (Loss).*As a result of the foregoing, operating income increased $51.4 million, or 330.4%, to an operating income of $35.8 million for the first quarter of 2025 from an operating loss of $15.6 million for the first quarter of 2024. Operating income (loss) expressed as a percentage of net sales increased to 8.4% in the first quarter of 2025 from 3.3% in the first quarter of 2024.

Previous wording

Other Income. Other income for the third quarter of 2024 and 2023 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $1.0 million and $1.0 million, respectively.

Current wording

Other Income. Other income for the first quarter of 2025 and 2024 includes the expected return on pension plan assets and the amortization of unrecognized gain less the interest cost on the projected benefit obligation of $1.1 million and $1.0 million, respectively.

Previous wording

Income Tax Benefit.Income tax benefit increased $5.7 million to $6.3 million for the first three quarters of 2024 from $0.6 million for the first three quarters of 2023. In connection with our transition from one reporting segment to four reporting segments during the first quarter of 2024, we reassigned assets and liabilities, including goodwill, between the reporting segments and completed a goodwill impairment test both prior to and subsequent to the change. The goodwill impairment test resulted in us recognizing pre-tax, non-cash goodwill impairment charges of $70.6 million (or $53.4 million, net of tax) within our Frozen & Vegetables reporting segment during the first quarter of 2024. As a result of these goodwill impairment charges, we recorded a deferred tax benefit of $17.2 million during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible Assets,” and Note 16, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report. As a result of theBack to Naturedivestiture, we incurred a capital loss for tax purposes, for which we recorded a deferred tax asset during the first quarter of 2023. A valuation allowance has been recorded against this deferred tax asset, which negatively impacted our first quarter of 2023 income taxes by $14.7 million, or $0.21 per share. Our effective tax rate was 18.0% for the first three quarters of 2024 and 0.9% for the first three quarters of 2023. See “U.S. Tax Act” above for a discussion of the impact of the tax legislation on income tax expense (benefit).

Current wording

*Income Tax Benefit.*Income tax benefit decreased $10.5 million to $1.6 million for the first quarter of 2025 from $12.1 million for the first quarter of 2024. As a result of the goodwill impairment charges of $70.6 million (or $53.4 million, net of tax) within our Frozen & Vegetables reporting segment during the first quarter of 2024, as described above, we recorded a deferred tax benefit of $17.2 million during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible Assets,” and Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report. Our effective tax rate was 209.2% for the first quarter of 2025 and 23.1% for the first quarter of 2024. Our effective tax rate of 209.2% for the first quarter of 2025 is primarily due to lower pre-tax income relative to the tax benefit received during the first quarter of 2025, which was primarily driven by 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. See “Section 987 of the Internal Revenue Code of 1986” above for a discussion of the impact of the tax legislation on income tax benefit.

Previous wording

*Business Segment Operating Results.*Effective in the first quarter of 2024, we operate in four reportable business segments: Specialty; Meals; Frozen & Vegetables; and Spices & Flavor Solutions. See Note 16, “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 income (loss).

Current wording

*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 income (loss).

Previous wording

For the third quarter and first three quarters of 2024, the decrease in Specialty segment net sales was primarily due to lowerCrisco pricing, driven by decreased commodity costs, coupled with modest declines in volumes across the business unit in the aggregate. The decrease in Specialty segment adjusted EBITDA for the third quarter and first three quarters of 2024 was primarily due to lower volumes, partially offset by decreased costs in certain raw materials and improvements in freight costs.

Current wording

The decrease in Specialty segment net sales was primarily due to [lowerCrisco pricing, driven by decreased commodity costs, coupled with modest declines in volumes across the Specialty business unit in the aggregate]. The decrease in Specialty segment adjusted EBITDA was primarily due to [a decrease in net sales].

Previous wording

For the third quarter and first three quarters of 2024, the decrease in Meals segment net sales was primarily due to a decrease in volumes across the Meals portfolio in the aggregate, partially offset by an increase in net pricing and

Current wording

The decrease in Meals segment net sales was primarily due to [a decrease in volumes across the Meals business unit in the aggregate and a decrease in net pricing and product mix]. The decrease in Meals segment adjusted EBITDA was primarily due to [a decrease in net sales].

Previous wording

For the third quarter and first three quarters of 2024, the decrease in Frozen & Vegetables segment net sales was primarily due to theGreen Giant U.S. shelf-stable divestiture (which negatively impacted net sales versus the prior year period by $20.3 million and $48.7 million, respectively) and a decrease in volumes. The decrease in Frozen & Vegetables segment adjusted EBITDA was primarily due to the negative impact of foreign currency onGreen Giant raw material and manufacturing costs, theGreen Giant U.S. shelf-stable divestiture, and a decrease in net sales, partially offset by improvements in freight costs.

Current wording

The decrease in Frozen & Vegetables segment net sales was primarily due to [a decrease in net pricing and product mix and a decline in volume]. The decrease in Frozen & Vegetables segment adjusted EBITDA was primarily due to [an increase in raw material costs, a decrease in net sales and the negative impact of foreign currency onGreen Giant raw material and manufacturing costs].

Previous wording

For the third quarter and first three quarters of 2024, the increase in Spices & Flavor Solutions segment net sales was primarily due to increased volumes across the Spices & Flavor Solutions portfolio in the aggregate. The decrease in Spices & Flavor Solutions segment adjusted EBITDA was primarily due to increases in trade spending and raw material costs, and product mix, partially offset by an increase in net sales and improvements in freight costs.

Current wording

The decrease in Spices & Flavor Solutions segment net sales was primarily due to [a decline in volumes across the Spices & Flavor Solutions business unit in the aggregate, as well as lower net pricing and product mix]. The decrease in Spices & Flavor Solutions segment adjusted EBITDA was primarily due to [increases in trade spending, the impact of product mix and increases in raw material costs, and a decrease in net sales].

Previous wording

*Amortization Expense.*Amortization expense decreased $0.1 million, or 1.7%, to $5.1 million for the third quarter of 2024 from $5.2 million for the third quarter of 2023.

Current wording

*Unallocated Corporate Items.*Unallocated corporate expenses decreased $0.1 million, or 0.5% in the first quarter of 2025 to $24.2 million from $24.3 million for the first quarter of 2024.

Previous wording

*Net Cash Provided by Operating Activities.*Net cash provided by operating activities decreased $105.1 million to $50.6 million for the first three quarters of 2024, as compared to $155.7 million for the first three quarters of 2023. The decrease was due to a reduction in net sales and unfavorable working capital comparisons in the first three quarters of 2024 compared to the first three quarters of 2023, primarily comprised of inventories, accrued expenses and trade accounts receivable; partially offset by favorable working capital comparisons for prepaid expenses and other current assets, and trade accounts payable.

Current wording

*Net Cash Provided by Operating Activities.*Net cash provided by operating activities increased $17.6 million to $52.7 million for the first quarter of 2025, as compared to $35.1 million for the first quarter of 2024. The increase was due to favorable working capital comparisons in the first quarter of 2025 compared to the first quarter of 2024, primarily comprised of trade accounts receivable, trade accounts payable, and prepaid expenses and other current assets; partially offset by unfavorable working capital comparisons for inventories, accrued expenses and income tax receivable/payable, net.

Previous wording

Net Cash (Used in) Provided by Investing Activities.Net cash provided by investing activities decreased $53.7 million to $19.0 million of net cash used in investing activities for the first three quarters of 2024, as compared to $34.7 million of net cash provided by investing activities for the first three quarters of 2023. The change from net cash provided by investing activities to net cash used in investing activities was primarily attributable to theBack to Nature sale, which produced gross proceeds from the sale of assets of $51.4 million in the first three quarters of 2023. We also had higher capital expenditures in the first three quarters of 2024 compared to the first three quarters of 2023.

Current wording

*Net Cash Used in Investing Activities.*Net cash used in investing activities increased $2.2 million to $10.3 million for the first quarter of 2025, as compared to $8.1 million for the first quarter of 2024. The increase was primarily attributable to higher capital expenditures in the first quarter of 2025 compared to the first quarter of 2024.

Previous wording

*Cash Income Tax Payments.*We believe that we will realize a benefit to our cash taxes payable from amortization of our trademarks, goodwill and other intangible assets for the taxable years 2024 through 2038. See “U.S. Tax Act” above for a discussion of the impact and expected impact of the U.S. Tax Act on our cash income tax payments, including the impact the U.S. Tax Act had in fiscal 2023 and is expected to have in fiscal 2024 and beyond on our interest expense deductions and our cash taxes. If there is a change in U.S. federal tax policy or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.

Current wording

*Cash Income Tax Payments.*We believe that we will realize a benefit to our cash taxes payable from amortization of our trademarks, goodwill and other intangible assets for the taxable years 2025 through 2038. See “U.S. Tax Act” above for a discussion of the impact and expected impact of the U.S. Tax Act on our cash income tax payments, including the impact the U.S. Tax Act had in fiscal 2024 and is expected to have in fiscal 2025 and beyond on our interest expense deductions and our cash taxes. If there is a change in U.S. federal tax policy or, in the case of the

Previous wording

Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business. Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness, capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us. We have paid dividends every quarter since our initial public offering in October 2004.

Current wording

Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business. Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness, and capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us. We have paid dividends every quarter since our initial public offering in October 2004.