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What changed in MARZETTI CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MARZETTI CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+198 added−196 removedSource: 10-K (2025-08-21) vs 10-K (2024-08-22)

Top changes in MARZETTI CO's 2025 10-K

198 paragraphs added · 196 removed · 150 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRetail Segment The following table presents the primary Retail products we manufacture and sell under our brand names: Products Brand Names Frozen Breads Frozen garlic breads New York BRAND Bakery Frozen Parkerhouse style yeast rolls and dinner rolls Sister Schubert’s Refrigerated Dressings and Dips Salad dressings Marzetti, Marzetti Simply Vegetable dips and fruit dips Marzetti Shelf-Stable Dressings and Croutons Salad dressings Marzetti, Cardini’s, Girard’s Croutons and salad toppings New York BRAND Bakery, Chatham Village, Marzetti 3 Table of Contents We also manufacture and sell other products pursuant to brand license agreements, including Chick-fil-A ® sauces and dressings, Olive Garden ® dressings and Buffalo Wild Wings ® sauces.
Biggest changeFurther description of each business segment within which we operate is provided below. 3 Table of Contents Retail Segment The following table presents the primary Retail products we manufacture and sell under our brand names: Products Brand Names Frozen Breads Frozen garlic breads New York Bakery TM Frozen Parkerhouse style yeast rolls and dinner rolls Sister Schubert’s ® Refrigerated Dressings and Dips Salad dressings Marzetti ® , Marzetti Simply TM Vegetable dips and fruit dips Marzetti ® Shelf-Stable Dressings and Croutons Salad dressings Marzetti ® , Cardini’s ® , Girard’s ® Croutons and salad toppings New York Bakery TM , Chatham Village ® , Marzetti ® We also manufacture and sell other products pursuant to brand license agreements, including Chick-fil-A ® sauces and dressings, Olive Garden ® dressings, Buffalo Wild Wings ® sauces, Texas Roadhouse ® steak sauces and frozen rolls, and Subway ® sauces.
The information contained on our website or connected to it is not incorporated into this Annual Report on Form 10-K. The SEC also maintains a website, https://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The information contained on our website or connected to it is not incorporated into this Annual Report on Form 10-K. The SEC also maintains a website, www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
RAW MATERIALS During 2024, we obtained adequate supplies of raw materials and packaging. We rely on a variety of raw materials and packaging for the day-to-day production of our products, including soybean oil, various sweeteners, eggs, dairy-related products, flour, various films and plastic and paper packaging materials.
RAW MATERIALS During 2025, we obtained adequate supplies of raw materials and packaging. We rely on a variety of raw materials and packaging for the day-to-day production of our products, including soybean oil, various sweeteners, eggs, dairy-related products, flour, various films and plastic and paper packaging materials.
The following table presents the primary Foodservice products we manufacture and sell under our brand names: Products Brand Names Dressings and Sauces Salad dressings Marzetti Frozen Breads and Other Frozen garlic breads New York BRAND Bakery Frozen Parkerhouse style yeast rolls and dinner rolls Sister Schubert’s Frozen pasta Marzetti Frozen Pasta 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.
The following table presents the primary Foodservice products we manufacture and sell under our brand names: Products Brand Names Dressings and Sauces Salad dressings Marzetti ® Frozen Breads and Other Frozen garlic breads New York Bakery TM Frozen Parkerhouse style yeast rolls and dinner rolls Sister Schubert’s ® Frozen pasta Marzetti Frozen Pasta ® 4 Table of Contents 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.
Although the availability and price of certain of these materials are influenced by weather, disease and the level of global demand, we anticipate that future sources of supply for 2025 will generally be available and adequate for our needs.
Although the availability and price of certain of these materials are influenced by weather, disease and the level of global demand, we anticipate that future sources of supply for 2026 will generally be available and adequate for our needs.
Our ability to compete depends upon a variety of factors, including the position of our branded goods within various categories, product quality, product innovation, promotional and marketing activity, pricing and our ability to service customers. GOVERNMENT REGULATION Our business operations are subject to regulation by various federal, state and local government entities and agencies.
Our ability to compete depends upon a variety of factors, including the position of our branded goods within various categories, product quality, product innovation, promotional and marketing activity, pricing and our ability to service customers. 5 Table of Contents GOVERNMENT REGULATION Our business operations are subject to regulation by various federal, state and local government entities and agencies.
Total Rewards We offer our employees competitive fixed and/or variable pay along with a Total Rewards package which typically includes medical, prescription, dental, vision and life insurance benefits, paid parental leave, adoption assistance, disability coverage, a 401(k) plan, and various employee assistance programs. We have undertaken external benchmarking to ensure our compensation and benefits offerings remain competitive.
Total Rewards We offer our employees competitive fixed and/or variable pay along with a Total Rewards package which typically includes medical, prescription, dental, vision and life insurance benefits, paid parental leave, adoption assistance, disability coverage, a 401(k) plan, and various employee assistance programs. We review external benchmarking annually to ensure our compensation and benefits offerings remain competitive.
As used in this Annual Report on Form 10-K and except as the context otherwise may require, the terms “we,” “us,” “our,” “registrant,” or “the Company” mean Lancaster Colony Corporation and its consolidated subsidiaries, except where it is clear that the term only means the parent company.
As used in this Annual Report on Form 10-K and except as the context otherwise may require, the terms “we,” “us,” “our,” “registrant,” or “the Company” mean The Marzetti Company and its consolidated subsidiaries, except where it is clear that the term only means the parent company.
Based upon available information, compliance with these laws and regulations did not have a material effect upon the level of capital expenditures, earnings or our competitive position in 2024 and is not expected to have a material impact in 2025. HUMAN CAPITAL As of June 30, 2024, we had 3,400 employees.
Based upon available information, compliance with these laws and regulations did not have a material effect upon the level of capital expenditures, earnings or our competitive position in 2025 and is not expected to have a material impact in 2026. HUMAN CAPITAL As of June 30, 2025, we had 3,700 employees.
The honesty, integrity and sound judgment of our people in following our Code of Business Ethics are what enable us to be successful and fulfill our company’s purpose To Nourish Growth With All That We Do .
The honesty, integrity and sound judgment of our people in following our Code of Conduct are what enable us to be successful and fulfill our company’s purpose To Nourish Growth With All That We Do .
Consistent with this purpose, our human capital management strategy emphasizes six key areas of focus: Health and Safety; Talent Acquisition; Total Rewards; Employee Engagement; Diversity and Inclusion; and Community Engagement. Our Board of Directors oversees this strategy and dedicates one Board meeting each year to a full review of talent.
Consistent with this purpose, our human capital management strategy emphasizes six key areas of focus: Health and Safety; Talent Acquisition; Total Rewards; Employee Engagement; Respect and Belonging; and Community Engagement. Our Board of Directors oversees this strategy and dedicates one Board meeting each year to a full review of talent.
We also have placement of products in grocery produce departments through our refrigerated salad dressings, licensed dressings, vegetable dips and fruit dips. Our top five Retail customers accounted for 59%, 59% and 57% of this segment’s total net sales in 2024, 2023 and 2022, respectively.
We also have placement of products in grocery produce departments through our refrigerated salad dressings, licensed dressings, vegetable dips and fruit dips. Our top five Retail customers accounted for 62%, 59% and 59% of this segment’s total net sales in 2025, 2024 and 2023, respectively.
NET SALES BY CLASS OF PRODUCTS The following table sets forth business segment information with respect to the percentage of net sales contributed by our primary classes of similar products: 2024 2023 2022 Retail Segment: Shelf-stable dressings, sauces and croutons 23% 23% 22% Frozen breads 19% 19% 20% Refrigerated dressings, dips and other 11% 11% 13% Foodservice Segment: Dressings and sauces 35% 35% 34% Frozen breads and other 12% 12% 11% MANUFACTURING As of June 30, 2024, the majority of our products were manufactured and packaged at our 13 food plants located throughout the United States.
NET SALES BY CLASS OF PRODUCTS The following table sets forth business segment information with respect to the percentage of net sales contributed by our primary classes of similar products: 2025 2024 2023 Retail Segment: Shelf-stable dressings, sauces and croutons 23% 23% 23% Frozen breads 20% 19% 19% Refrigerated dressings, dips and other 10% 11% 11% Foodservice Segment: Dressings and sauces 35% 35% 35% Frozen breads and other 12% 12% 12% MANUFACTURING As of June 30, 2025, the majority of our products were manufactured and packaged at our 14 food plants located throughout the United States.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through the Investor Relations section of our website at investors.marzetticompany.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).
Of those employees, 22% are represented under various collective bargaining contracts and 8% are represented under a collective bargaining contract that will expire within one year. 5 Table of Contents Our people are essential to our vision to be The Better Food Company — the industry leader in creating great tasting food and cultivating deep and lasting relationships with customers and consumers.
Of those employees, 18% are represented under various ongoing collective bargaining contracts and 5% are represented under a collective bargaining contract that will expire within one year. Our people are essential to our vision to be The Better Food Company — the industry leader in creating great tasting food and cultivating deep and lasting relationships with customers and consumers.
We continue to work to expand our Total Rewards program to strengthen our focus on work/life effectiveness and holistic well-being, which includes physical, financial, emotional, and social well-being. We genuinely want to help our people to thrive both personally and professionally and have cultivated a high-performing workplace built on trust, accountability and growth.
In addition to our foundational compensation and benefits offerings, we continue to expand our Total Rewards program to strengthen our focus on work/life effectiveness and holistic well-being, which includes physical, financial, emotional, and social well-being. We genuinely want to help our people to thrive both personally and professionally and have cultivated a high-performing workplace built on trust, accountability and growth.
Total net sales attributed to Chick-fil-A, including the Retail sales resulting from the exclusive license agreement and the Foodservice sales, totaled 28%, 26% and 24% of consolidated net sales for 2024, 2023 and 2022, respectively.
Total net sales attributed to Chick-fil-A, including the Retail sales resulting from the exclusive license agreement and the Foodservice sales, totaled 29%, 28% and 26% of consolidated net sales for 2025, 2024 and 2023, respectively.
Unless otherwise noted, references to “year” pertain to our fiscal year which ends on June 30; for example, 2024 refers to fiscal 2024, which is the period from July 1, 2023 to June 30, 2024. Available Information Our Internet website address is https://www.lancastercolony.com.
Unless otherwise noted, references to “year” pertain to our fiscal year which ends on June 30; for example, 2025 refers to fiscal 2025, which is the period from July 1, 2024 to June 30, 2025. Available Information Our Internet website address is www.marzetticompany.com.
A portion of our Foodservice sales represent direct sales to Chick-fil-A. Chick-fil-A is also a significant contributor to our Retail sales as we sell their sauce and dressing products into the retail channel through an exclusive license agreement.
Chick-fil-A is also a significant contributor to our Retail sales as we sell their sauce and dressing products into the retail channel through an exclusive license agreement.
Item 1. Business GENERAL DEVELOPMENT OF BUSINESS Company Overview Lancaster Colony Corporation, an Ohio corporation, is a manufacturer and marketer of specialty food products for the retail and foodservice channels. Our principal executive offices are located at 380 Polaris Parkway, Suite 400, Westerville, Ohio 43082 and our telephone number is 614-224-7141.
The Marzetti Company, an Ohio corporation, is a manufacturer and marketer of specialty food products for the retail and foodservice channels. Our principal executive offices are located at 380 Polaris Parkway, Suite 400, Westerville, Ohio 43082 and our telephone number is 614-224-7141.
In 2024, our teams mobilized to support Pelotonia, Toys for Tots, and the United Way. We regularly donate funds and volunteer time to a range of other community organizations and foundations as well, including the Children’s Hunger Alliance, National Veterans Memorial and Museum, Jobs for America’s Graduates, and local food banks.
In 2025, our teams mobilized to support Pelotonia, Ronald McDonald House Charities, and Bonzy Charities. We regularly donate funds and volunteer time to a range of other community organizations and foundations as well, including the Children’s Hunger Alliance, National Veterans Memorial and Museum, Jobs for America’s Graduates, and local food banks.
The financial information relating to our business segments for the three years ended June 30, 2024, 2023 and 2022 is included in Note 8 to the consolidated financial statements, and located in Part II, Item 8 of this Annual Report on Form 10-K. Further description of each business segment within which we operate is provided below.
The financial information relating to our business segments for the three years ended June 30, 2025, 2024 and 2023 is included in Note 9 to the consolidated financial statements, and located in Part II, Item 8 of this Annual Report on Form 10-K.
We maintain a rigorous safety training program that ensures employees throughout the organization are regularly trained in every aspect of workplace safety. Management personnel with direct responsibility for safety oversight also receive comprehensive professional training and the opportunity for certification. Talent Acquisition We strive to attract and retain talented people by providing a great place to work.
We maintain a rigorous safety training program that ensures employees throughout the organization are regularly trained in every aspect of workplace safety. Management personnel with direct responsibility for safety oversight also receive comprehensive professional training and the opportunity for certification. Talent Acquisition Our ability to attract, retain, and develop top talent is integral to our long-term success and sustainability.
We consider our owned intellectual property rights to be essential to our Foodservice business. 4 Table of Contents NET SALES ATTRIBUTED TO SIGNIFICANT CUSTOMER RELATIONSHIPS Net sales attributed to Walmart Inc. (“Walmart”) totaled 18% of consolidated net sales for 2024, 2023 and 2022. Net sales attributed to McLane Company, Inc.
We consider our owned intellectual property rights to be essential to our Foodservice business. NET SALES ATTRIBUTED TO SIGNIFICANT CUSTOMER RELATIONSHIPS Net sales attributed to Walmart Inc. (“Walmart”) totaled 19%, 18% and 18% of consolidated net sales for 2025, 2024 and 2023, respectively. Our relationship with Chick-fil-A, Inc.
The 2024 decline in sales to McLane primarily reflects certain national chain restaurant accounts shifting their purchases from McLane to other distributors or to direct purchases. Our relationship with Chick-fil-A, Inc. (“Chick-fil-A”), one of our national chain restaurant accounts, also represents a significant portion of our consolidated net sales. In Foodservice, we primarily supply Chick-fil-A indirectly through distributors, including McLane.
(“Chick-fil-A”), one of our national chain restaurant accounts, also represents a significant portion of our consolidated net sales. In Foodservice, we primarily supply Chick-fil-A indirectly through multiple distributors with the remainder supplied directly to Chick-fil-A.
Each year, we invite our employees to respond to our annual employee engagement survey and share their views on a range of workplace questions. Based on feedback from the survey, management develops and implements plans to address the primary areas of opportunity that have been identified by employees.
Each year, we invite our employees to respond to our annual employee engagement survey and share their views on a range of workplace questions.
Within our Foodservice segment, typically our largest direct customers are distributors that distribute our products primarily to foodservice national chain restaurant accounts.
Our top five Foodservice direct customers accounted for 53%, 53% and 58% of this segment’s total net sales in 2025, 2024 and 2023, respectively. Within our Foodservice segment, typically our largest direct customers are distributors that distribute our products primarily to foodservice national chain restaurant accounts.
Each of our ERGs is sponsored by a member of our leadership team to ensure top-down accountability for the associated initiatives. 6 Table of Contents Community Engagement Our volunteering and philanthropic efforts align with United Nations Sustainable Development Goals, with a particular focus on reducing poverty and food insecurity while promoting good health and quality education for all.
We measure the experiences of our employees to identify areas for improvement and assess the effectiveness of our efforts. Our goal is to continuously develop a workplace where respect and belonging define our culture. Community Engagement Our volunteering and philanthropic efforts focus on reducing poverty and food insecurity while promoting good health and quality education for all.
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Most of the products we sell in the Foodservice segment are custom-formulated sauces, salad dressings, frozen breads and yeast rolls. Our top five Foodservice direct customers accounted for 53%, 58% and 58% of this segment’s total net sales in 2024, 2023 and 2022, respectively.
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Item 1. Business GENERAL DEVELOPMENT OF BUSINESS Company Overview Reflecting the evolution and growth of our company, Lancaster Colony Corporation changed its name to The Marzetti Company effective June 27, 2025. Since the divestiture of our last non-food businesses in 2014, Lancaster Colony Corporation operated as a food-only business best-known by our customers, licensing partners, suppliers, and employees as Marzetti.
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(“McLane”), a wholesale distribution subsidiary of Berkshire Hathaway, Inc., totaled 8%, 11% and 11% of consolidated net sales for 2024, 2023 and 2022, respectively. McLane is a large, national distributor that sells and distributes our products to several of our foodservice national chain restaurant accounts, principally in the quick service, fast casual and casual dining channels.
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While Lancaster Colony Corporation will always be an important part of our heritage, changing our company name to The Marzetti Company provides a single brand identity for our business across all stakeholders. As The Marzetti Company, we are positioned for further growth in today’s food industry with an authentic brand name rooted in quality, innovation and collaboration.
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In general, these national chain restaurants have direct relationships with us for culinary research and development, menu development and production needs, but choose to buy our products through McLane, who acts as their distributor. McLane orders our products on behalf of these national chain restaurants, and we invoice McLane for these sales.
Added
Most of the products we sell in the Foodservice segment are custom-formulated sauces, salad dressings, frozen breads and yeast rolls. Finally, within this segment, for a period of up to twelve months commencing in March 2025, we are manufacturing and selling certain salad dressing and sauce products under a temporary supply agreement (“TSA”) resulting from the Atlanta plant acquisition.
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We have built a collaborative and purpose-driven culture that attracts people who share our vision to be The Better Food Company . In addition, we are committed to nourishing the growth of our employees by providing training and development opportunities to pursue their career paths and to ensure compliance with our policies.
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Our commitment to creating an environment that fosters growth, innovation, and excellence ensures that we remain well-positioned to meet both current and future business demands. We employ a strategic, inclusive approach to talent acquisition, which emphasizes the identification and recruitment of individuals whose skills, values, and expertise align with our corporate vision of becoming The Better Food Company .
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Diversity and Inclusion We foster a collaborative working environment where all our employees can thrive and feel they belong. We believe our commitment to diversity, inclusion and belonging enhances our ability to attract and retain a high-performing and diverse team. We monitor the diversity of our organization to identify areas of improvement and measure the effectiveness of our efforts.
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In order to drive our business forward, we focus on recruiting resilient, adaptable problem solvers who demonstrate the agility required to navigate an evolving industry landscape. Additionally, we seek empowered innovators who are motivated to push boundaries and engage in continuous learning, as well as collaborative team players who contribute to the strength of our organizational culture.
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Our goal is to establish a continuous improvement trend. In 2024, our workforce was 36% female and 44% of our employees represented minority races or ethnicities. In 2020, we adopted our Diversity Hiring Statement, which sets out our pledge to include women and minorities in the pool of candidates for new leadership positions.
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Through ongoing investments in learning, development, and leadership programs, we ensure that our workforce is equipped with the tools necessary to thrive in their roles. This commitment to professional development enables employees to pursue meaningful career paths while contributing to the achievement of our strategic objectives.
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We have already seen a positive impact with the percentage of women at levels of Vice President and above doubling from January 2020 to January 2024 and the percentages of non-white representation for positions of director and above nearly doubling in the same period. We encourage employee-led initiatives to promote diversity within the organization.
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Based on feedback from the survey, management develops and implements plans to address the primary areas of opportunity that have been identified by employees. 6 Table of Contents Respect and Belonging We foster a collaborative work environment where all employees can thrive and feel a sense of respect and belonging.
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Several employee resource groups (“ERGs”) have been established in the last few years. These affinity-based groups provide a support network for colleagues from diverse backgrounds.
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We honor the dignity of every individual, believing that this commitment enhances our ability to attract and retain a high-performing team. Our talent management strategy includes programs to support well-being, measure performance, encourage professional development, encourage belonging, and provide technical and leadership training to grow individual and team capability.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe food industry has been subject to negative publicity concerning the health implications of genetically modified organisms, added sugars, trans fat, salt, artificial growth hormones, ingredients sourced from foreign suppliers and other supply chain concerns. 7 Table of Contents Consumers may increasingly require that our products and processes meet stricter standards than are required by applicable governmental agencies, thereby increasing the cost of manufacturing our products.
Biggest changeCertain negative publicity regarding the food industry or our products could also increase our cost of operations. The food industry has been subject to negative publicity concerning “ultra-processed” foods and the health implications of genetically modified organisms, added sugars, trans fat, salt, artificial growth hormones, artificial colors and food additives, ingredients sourced from foreign suppliers and other supply chain concerns.
In addition, our ability to recruit and retain a highly skilled and diverse workforce at our corporate offices, manufacturing facilities and other work locations could be adversely impacted if we fail to respond adequately to rapidly changing employee expectations regarding fair compensation, an inclusive and diverse workplace, flexible working arrangements or other matters.
In addition, our ability to recruit and retain a highly skilled and diverse workforce at our corporate offices, manufacturing facilities and other work locations could be adversely impacted if we fail to respond adequately to rapidly changing employee expectations regarding fair compensation, an inclusive workplace, flexible working arrangements or other matters.
Any such negative perceptions, or any negative publicity regarding our environmental, social and governance practices, could impact our reputation with customers, consumers and other constituents, which could have a material adverse effect on our business.
Any such negative perceptions, or any negative publicity regarding our environmental, social or governance practices, could impact our reputation with customers, consumers and other constituents, which could have a material adverse effect on our business.
Increasing capacity through the use of third-party manufacturers depends on our ability to develop and maintain such relationships and the ability of such third parties to devote additional capacity to fill our orders.
Increasing capacity through the use of third-party manufacturers depends on our ability to establish, develop and maintain such relationships and the ability of such third parties to devote additional capacity to fill our orders.
Allegations, even if untrue, that we, our suppliers, third-party staffing agencies or other business partners are not complying with applicable workplace and labor laws, including child labor laws, or regarding the actual or perceived abuse or misuse of migrant workers, could negatively affect our overall reputation and brand image, which in turn could have a negative impact on our relationships with customers, consumers and our brand license partners, as well as subject us to increased regulatory and political scrutiny.
Allegations, even if untrue, that we, our suppliers, third-party staffing agencies, contract manufacturers or other business partners are not complying with applicable workplace and labor laws, including child labor and immigration laws, or regarding the actual or perceived abuse or misuse of migrant workers, could negatively affect our overall reputation and brand image, which in turn could have a negative impact on our relationships with customers, consumers and our brand license partners, as well as subject us to increased regulatory and political scrutiny.
If we do succeed in 10 Table of Contents identifying a company with such a business, we may not be able to acquire the company or an interest in the company on terms that are favorable to us for many reasons, including: • a failure to agree on the terms of the acquisition or investment; • incompatibility between us and the management of the company that we wish to acquire or invest; • competition from other potential acquirers; • a lack of capital to make the acquisition or investment; or • the unwillingness of the company to partner with us.
If we do succeed in identifying a company with such a business, we may not be able to acquire the company or an interest in the company on terms that are favorable to us for many reasons, including: • a failure to agree on the terms of the acquisition or investment; • incompatibility between us and the management of the company that we wish to acquire or invest; • competition from other potential acquirers; • a lack of capital to make the acquisition or investment; or • the unwillingness of the company to partner with us.
Because we source certain products from single manufacturing sites and use third-party manufacturers for portions of our production needs for certain products, it is possible that we could experience a production disruption that results in a reduction or elimination of the availability of some of our products.
Because we source certain products from single manufacturing sites and use third-party manufacturers for certain products, it is possible that we could experience a production disruption that results in a reduction or elimination of the availability of some of our products.
If we are not able to obtain alternate production capability in a timely 8 Table of Contents manner, or on favorable terms, it could have a negative impact on our business, results of operations, financial condition and cash flows, including the potential for long-term loss of product placement with various customers.
If we are not able to obtain alternate production capability in a timely manner, or on favorable terms, it could have a negative impact on our business, results of operations, financial condition and cash flows, including the potential for long-term loss of product placement with various customers.
Poor performance by our customers, or our inability to collect accounts receivable from our customers, could have a material adverse effect on our business, results of operations, financial condition and cash flows. 13 Table of Contents In addition, our future growth and profitability may be unfavorably impacted by recent changes in the competitive landscape for our Retail segment customers.
Poor performance by our customers, or our inability to collect accounts receivable from our customers, could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, our future growth and profitability may be unfavorably impacted by recent changes in the competitive landscape for our Retail segment customers.
The costs associated with a significant cyber attack could include increased expenditures on cybersecurity measures, lost revenues from business interruption, litigation, regulatory fines and penalties and 14 Table of Contents substantial damage to our reputation, any of which could have a material adverse effect on our business strategy, results of operations, financial condition and cash flows.
The costs associated with a significant cyber attack could include increased expenditures on cybersecurity measures, lost revenues from business interruption, litigation, regulatory fines and penalties and substantial damage to our reputation, any of which could have a material adverse effect on our business strategy, results of operations, financial condition and cash flows.
We may experience further increases in the costs of raw materials and our ability to maintain prices or effectively implement price increases, including our price increases effective in fiscal 2023, may be affected by several factors, including competition, effectiveness of our marketing programs, the continuing strength of our brands, market demand and general economic conditions, including broader inflationary pressures.
We may experience further increases in the costs of raw materials and our ability to maintain prices or effectively implement price increases may be affected by several factors, including competition, effectiveness of our marketing programs, the continuing strength of our brands, market demand and general economic conditions, including broader inflationary pressures.
The rapid ongoing evolution and increased adoption of emerging technologies, such as artificial intelligence and machine learning, may make it more difficult to avoid unauthorized disclosure and misappropriation of proprietary information and to anticipate and implement protective measures to recognize, detect, and prevent the occurrence of any of the cyber attacks.
The rapid ongoing evolution and increased adoption of emerging technologies, such as artificial intelligence and machine learning, may make it more difficult to avoid unauthorized disclosure and misappropriation of proprietary information and to 14 Table of Contents anticipate and implement protective measures to recognize, detect, and prevent the occurrence of any of the cyber attacks.
We seek to maintain and enhance our brands through a variety of efforts, including the delivery of quality products, extending our brands into new markets and new products and investing in marketing and advertising. The costs of maintaining and enhancing our brands, including maintaining our rights to brands under license 11 Table of Contents agreements, may increase.
We seek to maintain and enhance our brands through a variety of efforts, including the delivery of quality products, extending our brands into new markets and new products and investing in marketing and advertising. The costs of maintaining and enhancing our brands, including maintaining our rights to brands under license agreements, may increase.
In addition, operating facilities at or near capacity may also increase production and distribution costs and negatively affect relations with our employees or contractors, which could result in disruptions in our operations. We may require significant capital expenditures to maintain, improve or replace aging infrastructure and facilities, which could adversely affect our cash flows.
In addition, operating facilities at or near capacity may also increase production and distribution costs and negatively affect relations with our employees or contractors, which could result in disruptions in our operations. 10 Table of Contents We may require significant capital expenditures to maintain, improve or replace aging infrastructure and facilities, which could adversely affect our cash flows.
Our ability to manufacture and/or sell our products may be impaired by damage or disruption to our manufacturing or distribution capabilities, or to the capabilities of our suppliers or contract manufacturers, due to factors that are hard to predict or beyond our control, such as adverse weather conditions, natural disasters, fire, terrorism, pandemics or similar public health emergencies, strikes, geopolitical events, such as the conflict between Russia and Ukraine, or other events.
Our ability to manufacture and/or sell our products may be impaired by damage or disruption to our manufacturing or distribution capabilities, or by the capabilities or failures of our suppliers or contract manufacturers, due to factors that are hard to predict or beyond our control, such as adverse weather conditions, natural disasters, fire, terrorism, pandemics or similar public health emergencies, strikes, geopolitical events, or other events.
In addition, the impacts of a widespread public 9 Table of Contents health emergency may include, but are not limited to, a shift in demand between our Retail and Foodservice segments or a significant reduction in overall demand resulting from forced or temporary curtailment of business operations; a disruption or shutdown of one or more of our manufacturing, warehousing or distribution facilities; failure of third parties on which we rely to meet their obligations to us; disruption to or loss of essential manufacturing and supply elements; and incurrence of additional labor, operating, and administrative costs, including insurance costs.
The impacts of a widespread outbreak may include, but are not limited to, a shift in demand between our Retail and Foodservice segments or a significant reduction in overall demand resulting from forced or temporary curtailment of business operations; a disruption or shutdown of one or more of our manufacturing, warehousing or distribution facilities; failure of third parties on which we rely to meet their obligations to us; disruption to or loss of essential manufacturing and supply elements; and incurrence of additional labor, operating, and administrative costs, including insurance costs.
We believe that our labor relations with employees under collective bargaining contracts are satisfactory, but our inability to negotiate the renewal of any collective bargaining agreements, including the agreement at one of our Columbus, Ohio facilities, which is currently scheduled to expire in March 2025, or any prolonged work stoppages or other types of labor unrest could in some cases impair our ability to supply our products to customers, which could result in reduced sales and may distract our management from focusing on other aspects of our business and strategic priorities.
We believe that our labor relations with employees under collective bargaining contracts are satisfactory, but our inability to negotiate the renewal of any collective bargaining agreements, including the agreement at our Vineland, New Jersey facility, which is currently scheduled to expire in December 2025, or any prolonged work stoppages or other types of labor unrest could in some cases impair our ability to supply our products to customers, which could result in reduced sales and may distract our management from focusing on other aspects of our business and strategic priorities.
If our competitors introduce products that are more appealing to the tastes and dietary habits of consumers or considered to be of higher quality or value than our products, our sales and market share could decline, which may have a material adverse effect on our business, financial condition, and results of operations.
If we do not introduce successful product innovations, or if our competitors introduce products that are more appealing to the tastes and dietary habits of consumers or considered to be of higher quality or value than our products, our sales and market share could decline, which may have a material adverse effect on our business, financial condition, results of operations, and share price.
This conflict of interest may have an adverse effect on the price of our common stock. For instance, sales of a substantial number of shares of our common stock into the public market, particularly shares held by Mr.
The interests of Mr. Gerlach may conflict with the interests of other holders of our common stock. This conflict of interest may have an adverse effect on the price of our common stock. For instance, sales of a substantial number of shares of our common stock into the public market, particularly shares held by Mr.
Additionally, as a result of state-sponsored cyber threats, including those stemming from the Russia-Ukraine war, we may face increased risks as companies based in the United States and its allied countries have become targets of malicious cyber activity.
Additionally, as a result of state-sponsored cyber threats, we may face increased risks as companies based in the United States and its allied countries have become targets of malicious cyber activity.
For example, public allegations were recently made against several food companies, including us, regarding unlawful child labor practices.
For example, public allegations have been made against several food companies, including us, regarding unlawful child labor practices.
The termination of our brand license agreements, the failure to renew any of our significant brand license agreements or failure to renew them under terms that are similar and not materially less favorable to us, including as a result of negative publicity (whether or not warranted), adverse changes in the economic health or reputation of our brand licensors, or the impairment of our relationships with our brand licensors could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The termination of our brand license agreements, the failure to renew any of our significant brand license agreements or failure to renew them under terms that are similar and not materially less favorable to us, including as a result of negative publicity (whether or not warranted), adverse changes in the economic health or reputation of our brand licensors, or the impairment of our relationships with our brand licensors could have a material adverse effect on our business, results of operations, financial condition and cash flows. 12 Table of Contents Competitive conditions within our Retail and Foodservice markets could impact our sales volumes and operating profits.
RISKS RELATED TO INVESTMENTS IN OUR COMMON STOCK Mr. Gerlach, a member of our Board of Directors, has a significant ownership interest in our Company. As of June 30, 2024, Mr. Gerlach and the Gerlach family trusts owned or controlled approximately 28% of the outstanding shares of our common stock. Accordingly, Mr.
Gerlach, a member of our Board of Directors, has a significant ownership interest in our Company. As of June 30, 2025, Mr. Gerlach and the Gerlach family trusts owned or controlled approximately 27% of the outstanding shares of our common stock. Accordingly, Mr.
Our business operations are subject to regulation by various federal, state and local government entities and agencies. As a producer of food products for human consumption, our operations are subject to stringent production, packaging, quality, labeling and distribution standards, including regulations promulgated under the Federal Food, Drug and Cosmetic Act and the Food Safety Modernization Act.
As a producer of food products for human consumption, our operations are subject to stringent production, packaging, quality, labeling and distribution standards, including regulations promulgated under the Federal Food, Drug and Cosmetic Act and the Food Safety Modernization Act.
Epidemics, pandemics or similar widespread public health emergencies and disease outbreaks, such as COVID-19, as well as related government mandates, including the avoidance of gatherings, self-quarantine and the closure of a variety of businesses and restaurants, have negatively affected and may in the future negatively affect our business, results of operations, financial condition and cash flows.
Epidemics, pandemics or similar widespread public health emergencies and disease outbreaks, such as COVID-19, as well as related government mandates, have negatively affected and may in the future negatively affect our business, results of operations, financial condition and cash flows.
Competitive conditions within our Retail and Foodservice markets could impact our sales volumes and operating profits. Competition within all of our markets is expected to remain intense. Numerous competitors exist, many of which are larger than us in size and are engaged in the development of food ingredients and packaged food products and frequently introduce new products into the market.
Competition within all of our markets is expected to remain intense. Numerous competitors exist, many of which are larger than us in size and are engaged in the development of food ingredients and packaged food products and frequently introduce new products into the market.
As a result, such public health emergencies could have a material adverse effect on our business, results of operations, financial condition and cash flows. Our inability to successfully renegotiate collective bargaining contracts and any prolonged work stoppages could have an adverse effect on our business, results of operations, financial condition and cash flows.
Our inability to successfully renegotiate collective bargaining contracts and any prolonged work stoppages could have an adverse effect on our business, results of operations, financial condition and cash flows.
The availability and cost of transportation for our products is vital to our success, and the loss of availability or increase in the cost of transportation could have an unfavorable impact on our business, results of operations, financial condition and cash flows.
The availability and cost of warehousing and transportation for our products is vital to our success, and the loss of availability or increase in the cost of warehouse capacity and transportation could have an unfavorable impact on our business, results of operations, financial condition and cash flows. We rely on third-party carriers to transport our products.
Chick-fil-A represents a significant portion of our Foodservice segment sales. The loss of, or a significant reduction in, this national chain restaurant’s business, or an adverse change in Chick-fil-A’s financial condition, could result in a material adverse effect on our business, results of operations, financial condition and cash flows.
The loss of, or a significant reduction in, this national chain restaurant’s business, or an adverse change in Chick-fil-A’s financial condition, or in the financial condition of the distributors through which Chick-fil-A buys our products, could result in a material adverse effect on our business, results of operations, financial condition and cash flows.
The effects of the CCPA, the CPRA, and laws, rules or regulations of other jurisdictions relating to privacy, data protection and information security that apply now or in the future, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer or disclosure, are significant, may require us to modify our data processing practices and policies, and could increase our costs, require significant changes to our operations, prevent us from providing certain offerings or cause us to incur potential liability in an effort to comply with such legislation.
The effects of the CCPA, the CPRA, and laws, rules or regulations of other jurisdictions relating to privacy, data protection and information security that apply now or in the future, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer or disclosure, are significant, may require us to modify our data processing practices and policies, and could increase our costs, require significant changes to our operations, prevent us from providing certain offerings or cause us to incur potential liability in an effort to comply with such legislation. 15 Table of Contents The rapidly evolving nature of state and federal privacy laws, including potential inconsistencies between such laws and uncertainty as to their application, adds additional complexity and compliance costs and increases our risk of non-compliance.
As a result, substantial negative publicity concerning one or more of our products, or other foods similar to or in the same food group as our products, could lead to lower demand for our products, reduced prices and lost sales.
We are highly dependent upon consumers’ perception of the safety, quality and possible dietary attributes of our products. As a result, substantial negative publicity concerning one or more of our products, or other foods similar to or in the same food group as our products, could lead to lower demand for our products, reduced prices and lost sales.
Production of the agricultural commodities used in our business may also be adversely affected by drought, water scarcity, temperature extremes, scarcity of suitable agricultural land, worldwide demand, changes in international trade arrangements, livestock disease (for example, avian influenza), crop disease and/or crop pests. We purchase a majority of our key raw materials on the open market.
Production of the agricultural commodities used in our business may also be adversely affected by drought, water scarcity, temperature extremes, scarcity of suitable agricultural land, worldwide demand, changes in international trade arrangements, the imposition of tariffs by certain foreign governments, livestock disease (for example, avian influenza), crop disease and/or crop pests.
The loss of, or a significant reduction in, Walmart’s business, or an adverse change in the financial condition of Walmart, could result in a material adverse effect on our business, results of operations, financial condition and cash flows. Our net sales to Walmart represented 18% of consolidated net sales for the years ended June 30, 2024 and 2023.
The loss of, or a significant reduction in, Walmart’s business, or an adverse change in the financial condition of Walmart, could result in a material adverse effect on our business, results of operations, financial condition and cash flows.
Failure to adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, rules, regulations and policies could result in additional cost and liability to us, administrative actions, damage our reputation, inhibit growth, and otherwise adversely affect our business. 15 Table of Contents RISKS RELATED TO REGULATORY AND LEGAL MATTERS We are subject to federal, state and local government regulations that could adversely affect our business and results of operations.
Failure to adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, rules, regulations and policies could result in additional cost and liability to us, administrative actions, damage our reputation, inhibit growth, and otherwise adversely affect our business.
Gerlach’s voting power may also have the effect of discouraging transactions involving an actual or a potential change of control of our Company, regardless of whether a premium is offered over then-current market prices. 16 Table of Contents The interests of Mr. Gerlach may conflict with the interests of other holders of our common stock.
Gerlach has significant influence on all matters submitted to a vote of the holders of our common stock, including the election of directors. Mr. Gerlach’s voting power may also have the effect of discouraging transactions involving an actual or a potential change of control of our Company, regardless of whether a premium is offered over then-current market prices.
Our accounts receivable balance from Walmart as of June 30, 2024 was $26.7 million. We may not be able to maintain our relationship with Walmart, and Walmart is not contractually obligated to purchase from us.
Our net sales to Walmart represented 19% and 18% of consolidated net sales for the years ended June 30, 2025 and 2024, respectively. Our accounts receivable balance from Walmart as of June 30, 2025 was $31.1 million. We may not be able to maintain our relationship with Walmart, and Walmart is not contractually obligated to purchase from us.
We manufacture and sell numerous products pursuant to license agreements and failure to maintain or renew these agreements could adversely affect our business. We manufacture and sell numerous products pursuant to brand license agreements, including Chick-fil-A ® sauces and dressings, Olive Garden ® dressings and Buffalo Wild Wings ® sauces.
We manufacture and sell numerous products pursuant to license agreements and failure to maintain or renew these agreements could adversely affect our business.
A disruption of production at certain manufacturing facilities could result in an inability to meet customer demand for certain of our products, which could also negatively impact our ability to maintain adequate levels of product placement with our customers on a long-term basis.
Changes in global grain and commodity flows could impact the markets in which we operate, which may in turn negatively impact our business, results of operations, supply chain and financial condition. 8 Table of Contents A disruption of production at certain manufacturing facilities could result in an inability to meet customer demand for certain of our products, which could also negatively impact our ability to maintain adequate levels of product placement with our customers on a long-term basis.
If we do incur or discover any material environmental liabilities or potential environmental liabilities in the future, we may face significant remediation costs and find it difficult to sell or lease any affected properties. We may incur liabilities related to a multiemployer pension plan which could adversely affect our financial results.
If we do incur or discover any material environmental liabilities or potential environmental liabilities in the future, we may face significant remediation costs and find it difficult to sell or lease any affected properties. 16 Table of Contents RISKS RELATED TO INVESTMENTS IN OUR COMMON STOCK Mr.
If we were unable to pass higher freight costs to our customers in the form of price increases, those higher costs could have a material adverse effect on our business, results of operations, financial condition and cash flows. Increases in energy-related costs could negatively affect our business by increasing our costs to produce goods.
If we were unable to pass higher freight costs to our customers in the form of price increases, those higher costs could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, we do not own a portion of our warehouse facilities as they are leased by us from third parties.
In addition, an allegation of noncompliance with federal or state food laws and regulations could force us to cease production, delay the delivery or stop the sale of our products or create significant adverse publicity that could harm our credibility and decrease market acceptance of our products.
In addition, an allegation of noncompliance with federal or state food laws and regulations could result in production interruptions or shutdowns, delayed deliveries, discontinuation of product sales, or significant adverse publicity that could harm our credibility and decrease market acceptance of our products.
We cannot ensure that we will maintain good relationships with our brand licensors or that we will be able to renew any of our license agreements upon expiration. Our key brand license agreements can be terminated or not renewed at the option of the licensor upon short notice to us.
Our key brand license agreements can be terminated or not renewed at the option of the licensor upon short notice to us.
The success of marketing, advertising and new product innovation is subject to risks, including uncertainties about trade and consumer acceptance. As a result, any such increased expenditures may not maintain or enhance our market share and could result in lower profitability. Walmart is our largest Retail customer.
As a result, any such increased expenditures may not maintain or enhance our market share and could result in lower profitability. Walmart is our largest Retail customer.
Our failure to anticipate and respond to changing consumer preferences on a timely basis or in line with our competitors could result in reduced demand and price decreases for our products, which could have a material adverse effect on our business, financial condition, and results of operations. 12 Table of Contents In order to maintain our existing market share or capture increased market share among our retail and foodservice channels, we may decide to increase our spending on marketing and promotional costs, advertising and new product innovation.
Our failure to anticipate and respond to changing consumer preferences on a timely basis or in line with our competitors could result in reduced demand and price decreases for our products, which could have a material adverse effect on our business, financial condition, and results of operations.
Thus, unfavorable changes in the financial condition of McLane could increase our credit risk and have a material adverse effect on our business, results of operations, financial condition and cash flows.
Any of these events could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Depending on the nature of such legal requirements, we may experience significant increases in our compliance costs, production costs, capital expenditures, and other financial obligations to adapt our business and operations to meet new laws and regulations, which could materially affect our profitability.
Depending on the nature of such legal requirements, we may experience significant increases in our compliance costs, production costs, capital expenditures, and other financial obligations to adapt our business and operations to meet new laws and regulations, which could materially affect our profitability. 11 Table of Contents Further, our businesses could be adversely affected if we are unable to effectively address concerns from the media, shareholders, customers, and other stakeholders specific to our business regarding climate change and related environmental sustainability and governance matters.
Sales to Chick-fil-A in our Foodservice segment, which are primarily made indirectly through several foodservice distributors including McLane, represented 21% and 20% of consolidated net sales for the years ended June 30, 2024 and 2023, respectively. We cannot ensure that we will be able to maintain good relationships with key national chain restaurant accounts in the future.
Sales to Chick-fil-A in our Foodservice segment, which are primarily made indirectly through several foodservice distributors, represented 21% of consolidated net sales for each of the years ended June 30, 2025 and 2024.
If we fail to adequately respond to any such consumer concerns, we could suffer lost sales and damage our brand image or our reputation. Any of these events could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Any of these events could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Our ability to avoid the adverse effects of a pronounced, sustained price increase in our raw materials is limited. We have observed increased volatility in the costs of many of these raw materials in recent years. During fiscal 2023 and fiscal 2022, we faced industry-wide inflation for various inputs, including commodities, ingredients, packaging materials, transportation and labor.
We purchase a majority of our key raw materials on the open market. Our ability to avoid the adverse effects of a pronounced, sustained price increase in our raw materials is limited. We have observed increased volatility in the costs of many of these raw materials in recent years.
We rely on the performance of major retailers, mass merchants, wholesalers, food brokers, distributors and foodservice customers for the success of our business and, should they perform poorly or give higher priority to other brands or products, our business could be adversely affected.
Further, unfavorable changes in the financial condition of Chick-fil-A or any significant distributor, or other disruptions to their respective businesses, such as decreased consumer demand or stronger competition, could also have a material adverse effect on our business, results of operations, financial condition and cash flows. 13 Table of Contents We rely on the performance of major retailers, mass merchants, wholesalers, food brokers, distributors and foodservice customers for the success of our business and, should they perform poorly or give higher priority to other brands or products, our business could be adversely affected.
We do not have any long-term purchase commitments, and we may be unable to continue to sell our products in the same quantities or on the same terms as in the past. The loss of, or a significant reduction in, this business could have a material adverse effect on our sales and profitability.
We cannot ensure that we will be able to maintain good relationships with Chick-fil-A or any such distributors in the future. We do not have any long-term purchase commitments from Chick-fil-A or such distributors, and we may be unable to continue to sell our products in the same quantities or on the same terms as in the past.
During fiscal 2023 and fiscal 2022, the overall global economy experienced significant inflation in packaging materials, fuel, energy, and commodities. Inflation has and may continue to adversely affect us by increasing our costs of raw materials, packaging and freight, as well as wage and benefit costs.
Inflation has and may continue to adversely affect us by increasing our costs of raw materials, packaging and freight, as well as wage and benefit costs. Any substantial change in the prices or availability of raw materials may have an adverse impact on our profitability.
In addition, changes in the general business model of McLane, or the underlying national chain restaurants, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
In addition, our efforts to manage the impacts of any such outbreak may be unsuccessful, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We may be subject to a loss of sales or increased costs due to adverse publicity or consumer concern regarding the safety, quality or healthfulness of food products, whether with our products, competing products or other related food products. We are highly dependent upon consumers’ perception of the safety, quality and possible dietary attributes of our products.
Any potential claim under our insurance policies may exceed our insurance coverage, may be subject to certain exceptions or may not be honored fully, in a timely manner, or at all. 7 Table of Contents We may be subject to a loss of sales or increased costs due to adverse publicity or consumer concern regarding the safety, quality or healthfulness of food products, whether with our products, competing products or other related food products.
Despite our efforts to manage and remedy these impacts, their ultimate significance depends on factors beyond our knowledge or control, including the duration and severity of any such outbreak as well as third-party actions taken to contain the spread and mitigate public health effects.
The duration and severity of any such outbreak as well as third-party actions taken to contain the spread and mitigate public health effects are uncertain and difficult to predict.
Maintaining license agreements under which we market and sell certain brands is important to our business. Our brand license agreements are typically for a fixed term with no automatic renewal options or provisions.
Our brand license agreements are typically for a fixed term with no automatic renewal options or provisions. We cannot ensure that we will maintain good relationships with our brand licensors or that we will be able to renew any of our license agreements upon expiration.
In general, these national chain restaurants have direct relationships with us for culinary research and development, menu development and production needs, but choose to buy our products through McLane, who acts as their distributor. McLane orders our products on behalf of these national chain restaurants, and we invoice McLane for these sales.
Chick-fil-A, like most of the other national chain restaurants with which we work, has a direct relationship with us for culinary research and development, menu development and production needs but purchases some of our products indirectly through distributors. Those distributors order our products on behalf of Chick-fil-A, and we invoice the distributors.
In addition, the loss of, or a significant reduction in, our business with the underlying national chain restaurants, or other disruptions, such as decreased consumer demand or stronger competition, could also have a material adverse effect on our business, results of operations, financial condition and cash flows.
The loss of, or a significant reduction in, this business could have a material adverse effect on our sales and profitability.
The rapidly evolving nature of state and federal privacy laws, including potential inconsistencies between such laws and uncertainty as to their application, adds additional complexity and compliance costs and increases our risk of non-compliance. While we strive to comply with such laws, we may not be in compliance at all times in all respects.
While we strive to comply with such laws, we may not be in compliance at all times in all respects.
Removed
Any of these events could have a material adverse effect on our business, results of operations, financial condition and cash flows. Any potential claim under our insurance policies may exceed our insurance coverage, may be subject to certain exceptions or may not be honored fully, in a timely manner, or at all.
Added
Consumers may increasingly require that our products and processes meet stricter standards than are required by applicable governmental agencies, thereby increasing the cost of manufacturing our products. If we fail to adequately respond to any such consumer concerns, we could suffer lost sales and damage our brand image or our reputation.
Removed
Certain negative publicity regarding the food industry or our products could also increase our cost of operations.
Added
Changes in immigration laws and policies or the enforcement of such laws or policies could also make it more difficult for us to recruit or retain skilled employees.
Removed
Any substantial change in the prices or availability of raw materials may have an adverse impact on our profitability. For example, in recent periods we have seen significant commodity inflation in soybean oil, which has impacted both of our segments because of the significant number of our products that include soybean oil.
Added
If any of our warehouse capacity is unexpectedly decreased or compromised, particularly with respect to our frozen warehouse capacity, we could experience increased costs, decreased customer service levels, and lost revenue. Our operations are dependent on a wide array of third parties.
Removed
While we do not expect our operations to be directly impacted by the conflicts in Ukraine or the Middle East at this time, changes in global grain and commodity flows could impact the markets in which we operate, which may in turn negatively impact our business, results of operations, supply chain and financial condition.
Added
The success of our end-to-end supply chain relies on the continued performance of a wide array of third parties. Suppliers, third-party manufacturers and co-packers, IT vendors, and logistics providers are among our critical partners.
Removed
For example, the negative impacts of COVID-19 on our Company included higher hourly wage rates paid to our front-line employees, increased costs for personal protective equipment, higher expenditures attributed to incremental co-manufacturing volumes, increased complexity and uncertainty in production planning and forecasting, and overall lower levels of efficiency in our production and distribution network.
Added
Although we take steps to qualify, assess and monitor third parties with whom we do business, we cannot guarantee that all third parties will perform dependably or at all. It is possible that events beyond our control, such as operational failures, financial failure, labor issues, cybersecurity events, pandemics, or other issues could impact our unaffiliated third parties.
Removed
Further, our businesses could be adversely affected if we are unable to effectively address concerns from the media, shareholders, customers, and other stakeholders specific to our business regarding climate change and related environmental sustainability and governance matters.
Added
If our third parties fail to deliver on their commitments, introduce unplanned risk to our operations, or are unable to fulfill their obligations, we could experience manufacturing challenges, shipment delays, increased costs, or lost revenue. 9 Table of Contents Increases in energy-related costs could negatively affect our business by increasing our costs to produce goods.
Removed
Further, unfavorable changes in Chick-fil-A’s financial condition or other disruptions to its business, such as decreased consumer demand or stronger competition, could also have a material adverse effect on our business, results of operations, financial condition and cash flows. McLane is our largest Foodservice customer.
Added
We manufacture and sell numerous products pursuant to brand license agreements, including Chick-fil-A ® sauces and dressings, Olive Garden ® dressings, Buffalo Wild Wings ® sauces, Texas Roadhouse ® steak sauces and frozen rolls, and Subway ® sauces. Maintaining license agreements under which we market and sell certain brands is important to our business.
Removed
An adverse change in the financial condition of McLane could have a material adverse effect on our business, results of operations, financial condition and cash flows. Our net sales to McLane represented 8% and 11% of consolidated net sales for the years ended June 30, 2024 and 2023, respectively.
Added
Emerging science and theories regarding health are constantly evolving, and products or methods of eating once considered healthy may over time become disfavored by consumers or no longer be perceived as healthy. Approaches regarding healthy lifestyles also are the subject of numerous studies and publications, often with differing views and opinions, some of which may be adverse to us.
Removed
Our accounts receivable balance from McLane as of June 30, 2024 was $3.6 million. McLane is a large, national distributor that sells and distributes our products to several of our foodservice national chain restaurant accounts, principally in the quick service, fast casual and casual dining channels.
Added
Furthermore, if we choose or are pressured by our competitors or customers to switch to sustainable packaging or natural ingredients for our products, it may be difficult to source sufficient quantities of such sustainable or natural materials.
Removed
We cannot ensure that we will be able to maintain good relationships with McLane and the underlying national chain restaurants.
Added
In order to maintain our existing market share or capture increased market share among our retail and foodservice channels, we may decide to increase our spending on marketing and promotional costs, advertising and new product innovation. The success of marketing, advertising and new product innovation is subject to risks, including uncertainties about trade and consumer acceptance.
Removed
McLane and the underlying national chain restaurants are not typically committed to long-term contractual obligations with us, and they may switch to other suppliers that offer lower prices, differentiated products or customer service that McLane and/or the underlying national chain restaurants perceive to be more favorable.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe periodically engage third-party security firms and consultants to oversee and identify cybersecurity risks; the results of these assessments are reported to our Audit Committee. Our service providers, and third-party hardware or software applications on our networks and company-issued devices, may pose cybersecurity risks.
Biggest changeWe periodically engage third-party security firms and consultants to oversee and identify cybersecurity risks; the results of these assessments are reported to our Audit Committee. 17 Table of Contents Our service providers, and third-party hardware or software applications on our networks, may pose cybersecurity risks.
The Incident Response Policy provides organizational and operational structure, processes, and procedures to our personnel so that employees can respond to incidents that may affect the function and security of our IT assets, information resources, and business operations. We conduct periodic information security awareness training for employees and provide related educational materials.
The Incident Response Policy provides organizational and operational structure, processes, and procedures to our personnel so employees can respond to incidents that may affect the function and security of our IT assets, information resources, and business operations. We conduct periodic information security awareness training for employees and provide related educational materials.
While we have been subject to cyber attacks, the expenses (including penalties and settlements, of which there were none) related to such incidents were immaterial, and the risks related thereto have not been and are not reasonably likely to be material to our business strategy, results of operations or financial condition.
While we have been subject to cyber incidents, the expenses (including penalties and legal settlements, of which there were none) related to such incidents were immaterial. The risks related thereto have not been and are not reasonably likely to be material to our business strategy, results of operations or financial condition.
Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways. 17 Table of Contents As part of the cybersecurity program, our information systems are monitored by automated tools and the Information Technology team.
Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways. As part of the cybersecurity program, our information systems are monitored by automated tools and the Information Technology team.
Item 1C. Cybersecurity RISK MANAGEMENT AND STRATEGY We have processes to identify, assess, monitor, and manage material risks related to information technology, including cybersecurity threats, vulnerability management, incident management, data protection and retention, and fraud prevention. Our Enterprise Risk Management process evaluates and mitigates cybersecurity risks in alignment with our business objectives and operational needs.
Item 1C. Cybersecurity RISK MANAGEMENT AND STRATEGY We have processes to identify, assess, monitor, and manage material risks related to information technology, including, but not limited to: cybersecurity threats, vulnerability management, incident management, data protection and retention, recoverability, and fraud prevention. Our Enterprise Risk Management process evaluates and mitigates cybersecurity risks in alignment with our business objectives and operational needs.
This team provides periodic updates to our ERM Committee, composed of our Chief Executive Officer, Chief Financial Officer, General Counsel, and other members of our senior leadership.
This team provides periodic updates to our ERM Committee, composed of our Chief Executive Officer, Chief Financial Officer, General Counsel, and other members of our senior leadership. 18 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table summarizes our principal manufacturing locations (including aggregation of multiple facilities): Location Principal Products Produced Business Segment(s) Terms of Occupancy Altoona, IA Frozen pasta Retail and Foodservice Owned Bedford Heights, OH Frozen breads Retail and Foodservice Owned Columbus, OH Sauces, dressings, dips Retail and Foodservice Owned Horse Cave, KY Sauces, dressings, frozen rolls Retail and Foodservice Owned Luverne, AL Frozen rolls Retail and Foodservice Owned Milpitas, CA Sauces and dressings Retail and Foodservice Owned Vineland, NJ Frozen breads Retail and Foodservice Owned Wareham, MA (1) Croutons Retail and Foodservice Leased (1) Fully leased for term expiring in fiscal 2029. 18 Table of Contents The following table summarizes our principal warehouses (including aggregation of multiple facilities), which are used to distribute products to our customers: Location Business Segment(s) Terms of Occupancy Columbus, OH (1) Retail and Foodservice Leased Grove City, OH Retail and Foodservice Owned and third-party service Horse Cave, KY Retail and Foodservice Owned Tracy, CA Retail and Foodservice Third-party service Union City, GA (2) Retail and Foodservice Leased (1) Fully leased for terms expiring in fiscal 2025 and fiscal 2027.
Biggest changeThe following table summarizes our principal manufacturing locations (including aggregation of multiple facilities): Location Principal Products Produced Business Segment(s) Terms of Occupancy Altoona, IA Frozen pasta Retail and Foodservice Owned Atlanta, GA Sauces and dressings Retail and Foodservice Owned Bedford Heights, OH Frozen breads Retail and Foodservice Owned Columbus, OH Sauces, dressings, dips Retail and Foodservice Owned Horse Cave, KY Sauces, dressings, frozen rolls Retail and Foodservice Owned Luverne, AL Frozen rolls Retail and Foodservice Owned Vineland, NJ Frozen breads Retail and Foodservice Owned Wareham, MA (1) Croutons Retail and Foodservice Leased (1) Fully leased for term expiring in fiscal 2029.
Item 2. Properties We use 2.7 million square feet of space for our operations. Of this space, 0.9 million square feet are leased. These amounts exclude facilities operated by third-party service providers.
Item 2. Properties We use 2.9 million square feet of space for our operations. Of this space, 0.9 million square feet are leased. These amounts exclude facilities operated by third-party service providers.
Added
The following table summarizes our principal warehouses (including aggregation of multiple facilities), which are used to distribute products to our customers: Location Business Segment(s) Terms of Occupancy Columbus, OH (1) Retail and Foodservice Leased Grove City, OH Retail and Foodservice Owned and third-party service Horse Cave, KY Retail and Foodservice Owned Union City, GA (2) Retail and Foodservice Leased (1) Fully leased for terms expiring in fiscal 2027.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn the fourth quarter, we made the following repurchases of our common stock: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Number of Shares that May Yet be Purchased Under the Plans April 1-30, 2024 (1) 14 $ 204.17 14 1,131,676 May 1-31, 2024 (1) 26 $ 191.51 26 1,131,650 June 1-30, 2024 (1) 86 $ 188.97 86 1,131,564 Total 126 $ 191.18 126 1,131,564 (1) Represents shares that were repurchased in satisfaction of tax withholding obligations arising from the vesting of restricted stock granted to employees under the Lancaster Colony Corporation 2015 Omnibus Incentive Plan. 20 Table of Contents PERFORMANCE GRAPH COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN OF LANCASTER COLONY CORPORATION, THE S&P MIDCAP 400 INDEX, AND THE S&P 1500 PACKAGED FOODS & MEATS INDEX The graph set forth below compares the five-year cumulative total return from investing $100 on June 30, 2019 in each of our Common Stock, the S&P Midcap 400 Index and the S&P 1500 Packaged Foods & Meats Index.
Biggest changeIn the fourth quarter, we made the following repurchases of our common stock: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Number of Shares that May Yet be Purchased Under the Plans April 1-30, 2025 (1) 12 $ 189.03 12 1,123,830 May 1-31, 2025 40,000 $ 161.78 40,000 1,083,830 June 1-30, 2025 — $ — — 1,083,830 Total 40,012 $ 161.79 40,012 1,083,830 (1) Represents shares that were repurchased in satisfaction of tax withholding obligations arising from the vesting of restricted stock granted to employees under the Lancaster Colony Corporation 2015 Omnibus Incentive Plan. 20 Table of Contents PERFORMANCE GRAPH COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN OF THE MARZETTI COMPANY, THE S&P MIDCAP 400 INDEX, AND THE S&P 1500 PACKAGED FOODS & MEATS INDEX The graph set forth below compares the five-year cumulative total return from investing $100 on June 30, 2020 in each of our Common Stock, the S&P Midcap 400 Index and the S&P 1500 Packaged Foods & Meats Index.
This is not the actual number of beneficial owners of our common stock, as shares are held in “street name” by brokers and others on behalf of individual owners. We have increased our regular cash dividends for 61 consecutive years. Future dividends will depend on our earnings, financial condition and other factors.
This is not the actual number of beneficial owners of our common stock, as shares are held in “street name” by brokers and others on behalf of individual owners. We have increased our regular cash dividends for 62 consecutive years. Future dividends will depend on our earnings, financial condition and other factors.
The information regarding compensation plans under which equity securities are authorized for issuance is incorporated by reference to the information contained in our definitive proxy statement for our November 2024 Annual Meeting of Shareholders to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act.
The information regarding compensation plans under which equity securities are authorized for issuance is incorporated by reference to the information contained in our definitive proxy statement for our November 2025 Annual Meeting of Shareholders to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on The NASDAQ Global Select Market under the symbol LANC. The number of shareholders of record as of August 1, 2024 was approximately 620.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on The NASDAQ Global Select Market under the symbol MZTI. The number of shareholders of record as of August 1, 2025 was approximately 610.
Issuer Purchases of Equity Securities In November 2010, our Board of Directors approved a share repurchase authorization of 2,000,000 common shares, of which 1,131,564 common shares remained authorized for future repurchases at June 30, 2024. This share repurchase authorization does not have a stated expiration date.
Issuer Purchases of Equity Securities In November 2010, our Board of Directors approved a share repurchase authorization of 2,000,000 common shares, of which 1,083,830 common shares remained authorized for future repurchases at June 30, 2025.
Cumulative Total Return (Dollars) 6/19 6/20 6/21 6/22 6/23 6/24 Lancaster Colony Corporation 100.00 106.16 134.72 91.60 145.57 139.54 S&P Midcap 400 100.00 93.30 142.98 122.05 143.54 163.02 S&P 1500 Packaged Foods & Meats 100.00 104.53 122.55 130.26 139.03 124.49 There can be no assurance that our stock performance will continue into the future with the same or similar trends depicted in the above graph.
Cumulative Total Return (Dollars) 6/20 6/21 6/22 6/23 6/24 6/25 The Marzetti Company 100.00 126.90 86.28 137.12 131.44 122.70 S&P Midcap 400 100.00 153.24 130.80 153.84 174.72 187.87 S&P 1500 Packaged Foods & Meats 100.00 117.24 124.61 133.00 119.09 114.90 There can be no assurance that our stock performance will continue into the future with the same or similar trends depicted in the above graph.
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Purchases under the share repurchase authorization may be made from time to time in the open market, in privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or by any combination of such methods.
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The timing and amount of any repurchases pursuant to the share repurchase authorization will be determined based on market conditions, share price and other factors. This share repurchase authorization does not have a stated expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItems which could impact these forward-looking statements include, but are not limited to, those risk factors identified in Item 1A and: • efficiencies in plant operations and our overall supply chain network; • price and product competition; • changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill; • the impact of customer store brands on our branded retail volumes; • adequate supply of labor for our manufacturing facilities; • stability of labor relations; • adverse changes in freight, energy or other costs of producing, distributing or transporting our products; • the reaction of customers or consumers to pricing actions we take to offset inflationary costs; • inflationary pressures resulting in higher input costs; • fluctuations in the cost and availability of ingredients and packaging; • capacity constraints that may affect our ability to meet demand or may increase our costs; • dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business; • the impact of any regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government; • dependence on key personnel and changes in key personnel; • cyber-security incidents, information technology disruptions, and data breaches; • the potential for loss of larger programs or key customer relationships; • failure to maintain or renew license agreements; • geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy; • significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and disease outbreaks; • the possible occurrence of product recalls or other defective or mislabeled product costs; • the success and cost of new product development efforts; • the lack of market acceptance of new products; • the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives; • the effect of consolidation of customers within key market channels; • maintenance of competitive position with respect to other manufacturers; • the outcome of any litigation or arbitration; • changes in estimates in critical accounting judgments; • the impact of fluctuations in our pension plan asset values on funding levels, contributions required and benefit costs; and • certain other risk factors, including those discussed in other filings we have submitted to the Securities and Exchange Commission. 29 Table of Contents
Biggest changeItems which could impact these forward-looking statements include, but are not limited to, those risk factors identified in Item 1A and: • efficiencies in plant operations and our overall supply chain network; • price and product competition; • the success and cost of new product development efforts; • the lack of market acceptance of new products; • changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill; • the impact of customer store brands on our branded retail volumes; • the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government; • the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives; • inflationary pressures resulting in higher input costs; • fluctuations in the cost and availability of ingredients and packaging; • adverse changes in freight, energy or other costs of producing, distributing or transporting our products; • the reaction of customers or consumers to pricing actions we take to offset inflationary costs; • adverse changes in trade policies, including increased tariffs, retaliatory trade measures, or other trade restrictions; • dependence on key personnel and changes in key personnel; • adequate supply of labor for our manufacturing facilities; • stability of labor relations; • geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy; • dependence on a wide array of critical third parties to support our operations, including contract manufacturers, distributors, logistics providers and IT vendors; • cyber-security incidents, information technology disruptions, and data breaches; • the potential for loss of larger programs or key customer relationships; 29 Table of Contents • capacity constraints that may affect our ability to meet demand or may increase our costs; • failure to maintain or renew license agreements; • the possible occurrence of product recalls or other defective or mislabeled product costs; • the effect of consolidation of customers within key market channels; • maintenance of competitive position with respect to other manufacturers; • the outcome of any litigation or arbitration; • significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and disease outbreaks; • changes in estimates in critical accounting judgments; and • certain other risk factors, including those discussed in other filings we have submitted to the Securities and Exchange Commission.
Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of factors set forth under the caption “Forward-Looking Statements” and those set forth in Item 1A of this Annual Report on Form 10-K. Our discussion of results for 2024 compared to 2023 is included herein.
Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of factors set forth under the caption “Forward-Looking Statements” and those set forth in Item 1A of this Annual Report on Form 10-K. Our discussion of results for 2025 compared to 2024 is included herein.
At June 30, 2024, we were in compliance with all applicable provisions and covenants of this facility, and we exceeded the requirements of the financial covenants by substantial margins. At June 30, 2024, there were no events that would constitute a default under this facility. We currently expect to remain in compliance with the Facility’s covenants for the foreseeable future.
At June 30, 2025, we were in compliance with all applicable provisions and covenants of this facility, and we exceeded the requirements of the financial covenants by substantial margins. At June 30, 2025, there were no events that would constitute a default under this facility. We currently expect to remain in compliance with the Facility’s covenants for the foreseeable future.
Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of June 30, 2024, as well as purchase orders and longer-term purchase arrangements related to the procurement of services, including IT service agreements, and property, plant and equipment.
Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of June 30, 2025, as well as purchase orders and longer-term purchase arrangements related to the procurement of services, including IT service agreements, and property, plant and equipment.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, references to “year” pertain to our fiscal year; for example, 2024 refers to fiscal 2024, which is the period from July 1, 2023 to June 30, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, references to “year” pertain to our fiscal year; for example, 2025 refers to fiscal 2025, which is the period from July 1, 2024 to June 30, 2025.
Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt. The Facility contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage.
Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt. 26 Table of Contents The Facility contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage.
We had no borrowings outstanding under the Facility at June 30, 2024. At June 30, 2024, we had $2.2 million of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. The Facility expires in March 2029, and all outstanding amounts are then due and payable.
We had no borrowings outstanding under the Facility at June 30, 2025. At June 30, 2025, we had $2.6 million of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. The Facility expires in March 2029, and all outstanding amounts are then due and payable.
Restructuring and Impairment Charges In 2024, we committed to a plan to exit our perimeter-of-the-store bakery product lines and close our Flatout flatbread facility in Saline, Michigan and our Angelic Bakehouse sprouted grain bakery facility in Cudahy, Wisconsin.
In 2024, we committed to a plan to exit our perimeter-of-the-store bakery product lines and close our Flatout flatbread facility in Saline, Michigan and our Angelic Bakehouse sprouted grain bakery facility in Cudahy, Wisconsin.
Our business has the potential to achieve future growth in sales and profitability due to attributes such as: • leading Retail market positions in several product categories with a high-quality perception; • recognized innovation in Retail products; • a broad customer base in both Retail and Foodservice accounts; • well-regarded culinary expertise among Foodservice customers; • long-standing Foodservice customer relationships that help to support strategic licensing opportunities in Retail; • recognized leadership in Foodservice product development; • experience in integrating complementary business acquisitions; and • historically strong cash flow generation that supports growth opportunities.
Our business has the potential to achieve future growth in sales and profitability due to attributes such as: • leading Retail market positions in several product categories with a high-quality perception; • recognized innovation in Retail products; • a broad customer base in both Retail and Foodservice accounts; • well-regarded culinary expertise among Foodservice customers; • long-standing Foodservice customer relationships that help to support strategic licensing opportunities in Retail; • demonstrated success with strategic licensing programs in Retail through both new and established relationships in the foodservice industry; • recognized leadership in Foodservice product development; • experience in integrating complementary business acquisitions; and • historically strong cash flow generation that supports growth opportunities.
In the Foodservice segment, we expect sales volumes to be led by growth from select quick-service restaurant customers in our mix of national chain restaurant accounts, while external factors, including U.S. economic performance and consumer behavior, may impact demand.
In the Foodservice segment, we expect sales to be supported by select quick-service restaurant customers in our mix of national chain restaurant accounts, while external factors, including U.S. economic performance and consumer behavior, may impact demand.
See Note 3 to the consolidated financial statements for further information about our lease obligations, including the maturities of minimum lease payments. It is not certain when the liabilities for the underfunded defined benefit pension liability, other post-employment benefit obligations, tax liabilities, noncurrent workers compensation obligations, deferred compensation and interest on deferred compensation will become due.
See Note 4 to the consolidated financial statements for further information about our lease obligations, including the maturities of minimum lease payments. It is not certain when the liabilities for other post-employment benefit obligations, tax liabilities, noncurrent workers compensation obligations, deferred compensation and interest on deferred compensation will become due.
If we were to borrow outside of the Facility under current market terms, our average interest rate may increase and have an adverse effect on our results of operations. Based on our current plans and expectations, we believe our capital expenditures for 2025 could total between $70 and $80 million.
If we were to borrow outside of the Facility under current market terms, our average interest rate may increase and have an adverse effect on our results of operations. Based on our current plans and expectations, we believe our capital expenditures for 2026 could total between $75 and $85 million.
The operations of these facilities have not been classified as discontinued operations as the closures do not represent a strategic shift that would have a major effect on our operations or financial results.
The operations of these facilities were not classified as discontinued operations as the closures did not represent a strategic shift that would have a major effect on our operations or financial results.
For discussion of results for 2023 compared to 2022, see our 2023 Annual Report on Form 10-K. OVERVIEW Business Overview Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels. Our financial results are presented as two reportable segments: Retail and Foodservice.
For discussion of results for 2024 compared to 2023, see our 2024 Annual Report on Form 10-K. OVERVIEW Business Overview The Marzetti Company is a manufacturer and marketer of specialty food products for the retail and foodservice channels. Our financial results are presented as two reportable segments: Retail and Foodservice.
See Notes 7, 10 and 11 to the consolidated financial statements for further information about these liabilities. Certain other contractual obligations are not recognized as liabilities in our consolidated financial statements.
See Notes 8 and 12 to the consolidated financial statements for further information about these liabilities. Certain other contractual obligations are not recognized as liabilities in our consolidated financial statements.
Implementation of this system began in July 2022 and continued throughout fiscal 2023. Customer fulfillment levels remained strong before and after the initial system cutover with no unplanned disruptions in receiving orders, producing products or shipping orders. During fiscal 2023, we progressed through our ERP implementation with no major disruptions.
Customer fulfillment levels remained strong before and after the initial system cutover with no unplanned disruptions in receiving orders, producing products or shipping orders. During fiscal 2023, we progressed through our ERP implementation with no major disruptions.
Our balance sheet maintained fundamental financial strength during 2024 as we ended the year with $163 million in cash and equivalents, along with shareholders’ equity of $926 million and no debt. Under our unsecured revolving credit facility (“Facility”), which we renewed in March 2024, we may borrow up to a maximum of $150 million at any one time.
Our balance sheet maintained fundamental financial strength during 2025 as we ended the year with $161 million in cash and equivalents, along with shareholders’ equity of $998 million and no debt. Under our unsecured revolving credit facility (“Facility”), we may borrow up to a maximum of $150 million at any one time.
Specific to freight costs, our transportation network includes a mix of dedicated carriers, longer-term fixed-rate contracts and a small internal fleet that serve to reduce our exposure to spot freight rates. We also have a transportation management system in place to support our freight management processes and help us to secure more competitive freight rates.
Specific to freight costs, our transportation network includes a mix of dedicated carriers and longer-term fixed-rate contracts. We also have a transportation management system in place to support our freight management processes and help us to secure more competitive freight rates.
In 2024 and 2023, expenditures for Project Ascent reduced diluted earnings per share by $0.23 and $0.84, respectively.
In 2024, expenditures for Project Ascent reduced diluted earnings per share by $0.23.
Future levels of share repurchases and declared dividends are subject to the periodic review of our Board of Directors and are generally determined after an assessment is made of various factors, such as anticipated earnings levels, cash flow requirements and general business conditions.
This past fiscal year marked the 62 nd consecutive year of increased regular cash dividends. 27 Table of Contents Future levels of share repurchases and declared dividends are subject to the periodic review of our Board of Directors and are generally determined after an assessment is made of various factors, such as anticipated earnings levels, cash flow requirements and general business conditions.
These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate.
Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate.
Cash Flows Year Ended June 30, Change (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Provided By Operating Activities $ 251,553 $ 225,901 $ 101,813 $ 25,652 11.4 % $ 124,088 121.9 % Used In Investing Activities $ (67,433) $ (90,782) $ (132,240) $ 23,349 25.7 % $ 41,458 31.4 % Used In Financing Activities $ (109,150) $ (106,929) $ (97,345) $ (2,221) (2.1) % $ (9,584) (9.8) % Cash provided by operating activities and our existing balances in cash and equivalents remain the primary sources for funding our investing and financing activities, as well as financing our organic growth initiatives.
Cash Flows Year Ended June 30, Change (Dollars in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Provided By Operating Activities $ 261,496 $ 251,553 $ 225,901 $ 9,943 4.0 % $ 25,652 11.4 % Used In Investing Activities $ (148,206) $ (67,433) $ (90,782) $ (80,773) (119.8) % $ 23,349 25.7 % Used In Financing Activities $ (115,257) $ (109,150) $ (106,929) $ (6,107) (5.6) % $ (2,221) (2.1) % Cash provided by operating activities and our existing balances in cash and equivalents remain the primary sources for funding our investing and financing activities, as well as financing our organic growth initiatives.
While a summary of our significant accounting policies can be found in Note 1 to the consolidated financial statements, we believe the following critical accounting policies reflect those areas in which more significant judgments and estimates are used in the preparation of our consolidated financial statements.
While a summary of our significant accounting policies can be found in Note 1 to the consolidated financial statements, we believe the following critical accounting policies reflect those areas in which more significant judgments and estimates are used in the preparation of our consolidated financial statements. 28 Table of Contents Trade-Related Allowances Our receivables balance is net of trade-related allowances, which consist of sales discounts, trade promotions and certain other sales incentives.
The following table summarizes the sales mix over each of the last three years: 2024 2023 2022 Segment Sales Mix: Retail 53% 53% 55% Foodservice 47% 47% 45% See discussion of net sales by segment following the discussion of “Earnings Per Share” below. 23 Table of Contents Gross Profit Consolidated gross profit increased 11.3% to $432.3 million in 2024 compared to $388.6 million in 2023 as influenced by favorability in pricing net of commodity costs, our cost savings programs and the higher sales volumes.
The following table summarizes the sales mix over each of the last three years: 2025 2024 2023 Segment Sales Mix: Retail 53% 53% 53% Foodservice 47% 47% 47% See discussion of net sales by segment following the discussion of “Earnings Per Share” below. 23 Table of Contents Gross Profit Consolidated gross profit increased 5.4% to $455.6 million in 2025 compared to $432.3 million in 2024 driven by the positive impacts of our cost savings programs, volume growth and some modest cost deflation.
RESULTS OF OPERATIONS - SEGMENTS Retail Segment Year Ended June 30, Change (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net Sales $ 988,424 $ 965,370 $ 915,210 $ 23,054 2.4 % $ 50,160 5.5 % Operating Income $ 207,660 $ 139,464 $ 151,627 $ 68,196 48.9 % $ (12,163) (8.0) % Operating Margin 21.0 % 14.4 % 16.6 % In 2024, net sales for the Retail segment reached a record $988.4 million, a 2.4% increase from the prior-year total of $965.4 million, including the carryover benefit from pricing actions that were taken in 2023.
RESULTS OF OPERATIONS - SEGMENTS Retail Segment Year Ended June 30, Change (Dollars in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net Sales $ 1,003,409 $ 988,424 $ 965,370 $ 14,985 1.5 % $ 23,054 2.4 % Operating Income $ 211,695 $ 207,660 $ 139,464 $ 4,035 1.9 % $ 68,196 48.9 % Operating Margin 21.1 % 21.0 % 14.4 % In 2025, net sales for the Retail segment reached a record $1,003.4 million, a 1.5% increase from the prior-year total of $988.4 million, reflecting higher sales volumes.
While we attempt to pass through sustained increases in these costs, any such price adjustments can lag the changes in the related input costs. 27 Table of Contents Although typically less notable, we are also exposed to the unfavorable effects of general inflation beyond material and freight costs, especially in the areas of labor rates, including annual wage adjustments and benefit costs.
Although typically less notable, we are also exposed to the unfavorable effects of general inflation beyond material and freight costs, especially in the areas of labor rates, including annual wage adjustments and benefit costs.
RESULTS OF CONSOLIDATED OPERATIONS (Dollars in thousands, except per share data) Years Ended June 30, Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net Sales $ 1,871,759 $ 1,822,527 $ 1,676,390 $ 49,232 2.7 % $ 146,137 8.7 % Cost of Sales 1,439,457 1,433,959 1,320,671 5,498 0.4 % 113,288 8.6 % Gross Profit 432,302 388,568 355,719 43,734 11.3 % 32,849 9.2 % Gross Margin 23.1 % 21.3 % 21.2 % Selling, General and Administrative Expenses 218,065 222,091 212,098 (4,026) (1.8) % 9,993 4.7 % Change in Contingent Consideration — — (3,470) — N/M 3,470 (100.0) % Restructuring and Impairment Charges 14,874 24,969 35,180 (10,095) (40.4) % (10,211) (29.0) % Operating Income 199,363 141,508 111,911 57,855 40.9 % 29,597 26.4 % Operating Margin 10.7 % 7.8 % 6.7 % Other, Net 6,152 1,789 477 4,363 243.9 % 1,312 275.1 % Income Before Income Taxes 205,515 143,297 112,388 62,218 43.4 % 30,909 27.5 % Taxes Based on Income 46,902 32,011 22,802 14,891 46.5 % 9,209 40.4 % Effective Tax Rate 22.8 % 22.3 % 20.3 % Net Income $ 158,613 $ 111,286 $ 89,586 $ 47,327 42.5 % $ 21,700 24.2 % Diluted Net Income Per Common Share $ 5.76 $ 4.04 $ 3.25 $ 1.72 42.6 % $ 0.79 24.3 % Net Sales Consolidated net sales for the year ended June 30, 2024 increased 2.7% to a new record of $1,871.8 million from the prior-year record total of $1,822.5 million, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by volume gains.
We completed the final wave of the implementation phase in August 2023 as planned and have shifted our focus towards leveraging the capabilities of our new ERP system. 22 Table of Contents RESULTS OF CONSOLIDATED OPERATIONS (Dollars in thousands, except per share data) Years Ended June 30, Change 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net Sales $ 1,909,122 $ 1,871,759 $ 1,822,527 $ 37,363 2.0 % $ 49,232 2.7 % Cost of Sales 1,453,476 1,439,457 1,433,959 14,019 1.0 % 5,498 0.4 % Gross Profit 455,646 432,302 388,568 23,344 5.4 % 43,734 11.3 % Gross Margin 23.9 % 23.1 % 21.3 % Selling, General and Administrative Expenses 230,227 218,065 222,091 12,162 5.6 % (4,026) (1.8) % Restructuring and Impairment Charges 5,102 14,874 24,969 (9,772) (65.7) % (10,095) (40.4) % Operating Income 220,317 199,363 141,508 20,954 10.5 % 57,855 40.9 % Operating Margin 11.5 % 10.7 % 7.8 % Pension Settlement Charge (13,968) — — (13,968) N/M — N/M Other, Net 7,114 6,152 1,789 962 15.6 % 4,363 243.9 % Income Before Income Taxes 213,463 205,515 143,297 7,948 3.9 % 62,218 43.4 % Taxes Based on Income 46,116 46,902 32,011 (786) (1.7) % 14,891 46.5 % Effective Tax Rate 21.6 % 22.8 % 22.3 % Net Income $ 167,347 $ 158,613 $ 111,286 $ 8,734 5.5 % $ 47,327 42.5 % Diluted Net Income Per Common Share $ 6.07 $ 5.76 $ 4.04 $ 0.31 5.4 % $ 1.72 42.6 % Net Sales Consolidated net sales for the year ended June 30, 2025 increased 2.0% to a new record of $1,909.1 million from the prior-year record total of $1,871.8 million, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by increased volume and mix.
These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.42, and the inventory write-down, which reduced diluted earnings per share by $0.07. In 2023, impairment charges related to Flatout’s intangible assets reduced diluted earnings per share by $0.70.
In 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.49. These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.42, and the inventory write-down, which reduced diluted earnings per share by $0.07.
These allowances can fluctuate based on the level of sales and promotional programs as well as the timing of deductions. Goodwill Goodwill is not amortized. It is evaluated annually at April 30 by applying impairment testing procedures. We evaluate the future economic benefit of the recorded goodwill when events or circumstances indicate potential recoverability concerns.
We evaluate the adequacy of these allowances considering several factors including historical experience, specific trade programs and existing customer relationships. These allowances can fluctuate based on the level of sales and promotional programs as well as the timing of deductions. Goodwill Goodwill is not amortized. It is evaluated annually at April 30 by applying impairment testing procedures.
Nonetheless, we are subject to events and trends in the marketplace that will impact our costs for raw materials, packaging and freight.
Nonetheless, we are subject to events and trends in the marketplace that will impact our costs for raw materials, packaging and freight. While we attempt to pass through sustained increases in these costs, any such price adjustments can lag the changes in the related input costs.
Foodservice Segment Year Ended June 30, Change (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net Sales $ 883,335 $ 857,157 $ 761,180 $ 26,178 3.1 % $ 95,977 12.6 % Operating Income $ 97,094 $ 106,349 $ 82,745 $ (9,255) (8.7) % $ 23,604 28.5 % Operating Margin 11.0 % 12.4 % 10.9 % In 2024, Foodservice segment net sales increased 3.1% to a record $883.3 million from the 2023 total of $857.2 million driven by increased demand from several of our national chain restaurant account customers and growth for our branded Foodservice products.
In 2025, Retail segment operating income increased $4.0 million, or 1.9%, to $211.7 million due to the higher sales volume and more favorable sales mix, our cost savings programs and some modest cost deflation, as partially offset by higher sales and marketing costs as we invested to support the growth of our brands. 25 Table of Contents Foodservice Segment Year Ended June 30, Change (Dollars in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net Sales $ 905,713 $ 883,335 $ 857,157 $ 22,378 2.5 % $ 26,178 3.1 % Operating Income $ 111,579 $ 97,094 $ 106,349 $ 14,485 14.9 % $ (9,255) (8.7) % Operating Margin 12.3 % 11.0 % 12.4 % In 2025, Foodservice segment net sales increased 2.5% to a record $905.7 million from the 2024 total of $883.3 million driven by increased demand from several of our national chain restaurant account customers and growth for our Marzetti ® branded Foodservice products.
The vast majority of the cash used in financing activities is attributed to the payment of dividends, and the 2024 increase in cash used in financing activities primarily reflects higher levels of dividend payments, as partially offset by lower levels of share repurchases and tax withholdings for stock-based compensation.
The vast majority of the cash used in financing activities is attributed to the payment of dividends, and the 2025 increase in cash used in financing activities primarily reflects higher levels of dividend payments. The regular dividend payout rate for 2025 was $3.75 per share, as compared to $3.55 per share in 2024.
Foodservice segment operating income for 2024 also compares to a strong prior-year result. Corporate Expenses In 2024, corporate expenses totaled $90.5 million as compared to $104.3 million in 2023. This decrease reflects lower expenditures for Project Ascent, as partially offset by higher expenditures to support the continued growth of our business, including investments in personnel and IT.
Corporate Expenses In 2025, corporate expenses totaled $97.9 million as compared to $90.5 million in 2024. This increase primarily reflects investments in IT to support the continued growth of our business and $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent.
Due to a lack of scale and direct-to-store distribution capabilities for these products, we were not able to achieve the desired operational or financial performance. Production at these facilities ceased in March 2024, and we completed the divestiture of the real estate and manufacturing equipment at these locations during the quarter ended June 30, 2024.
Production at these facilities ceased in March 2024, and we completed the divestiture of the real estate and manufacturing equipment at these locations during the quarter ended June 30, 2024.
This source, combined with our existing balances in cash and equivalents and amounts available under the Facility, is expected to be sufficient to meet our overall cash requirements. 26 Table of Contents We have various contractual and other obligations that are appropriately recorded as liabilities in our consolidated financial statements, including finance lease obligations, operating lease obligations, the underfunded defined benefit pension liability, other post-employment benefit obligations, tax liabilities, noncurrent workers compensation obligations, deferred compensation and interest on deferred compensation.
We have various contractual and other obligations that are appropriately recorded as liabilities in our consolidated financial statements, including finance lease obligations, operating lease obligations, other post-employment benefit obligations, tax liabilities, noncurrent workers compensation obligations, deferred compensation and interest on deferred compensation.
Excluding the impact of last year’s shift in sales due to our ERP go-live, consolidated sales volumes increased 2.1%. The relative proportion of sales contributed by each of our business segments can impact a year-to-year comparison of the consolidated statements of income.
Excluding the impact of all sales attributed to both the exited perimeter-of-the-store bakery product lines and the TSA, consolidated sales volumes increased 0.9%. The relative proportion of sales contributed by each of our business segments can impact a year-to-year comparison of the consolidated statements of income.
Recent examples of resulting investments include: • a significant capacity expansion project for our Marzetti dressing and sauce facility in Horse Cave, Kentucky that reached substantial completion in March 2023; • a capacity expansion project for one of our Marzetti dressing and sauce facilities in Columbus, Ohio that was completed in January 2022; • a significant infrastructure improvement and capacity expansion project for our frozen pasta facility in Altoona, Iowa that was completed in March 2022; and • our enterprise resource planning system (“ERP”) project and related initiatives, Project Ascent, that reached completion of the implementation phase in August 2023. 22 Table of Contents Project Ascent entailed the replacement of our primary customer and manufacturing transactional systems, warehousing systems, and financial systems with an integrated SAP S/4HANA system.
Recent examples of resulting investments include: • the acquisition of a sauce and dressing production facility in the Atlanta, Georgia area in February 2025; • a significant capacity expansion project for our Marzetti dressing and sauce facility in Horse Cave, Kentucky that was fully operational beginning in March 2023; and • our enterprise resource planning system (“ERP”) project and related initiatives, Project Ascent, that reached completion of the implementation phase in August 2023.
Beyond the next 12 months, we expect that cash provided by operating activities will be the primary source of liquidity.
Beyond the next 12 months, we expect that cash provided by operating activities will be the primary source of liquidity. This source, combined with our existing balances in cash and equivalents and amounts available under the Facility, is expected to be sufficient to meet our overall cash requirements.
A portion of the costs classified as Project Ascent expenses represent ongoing costs that have continued subsequent to the completion of our ERP implementation. Beginning in 2025, these ongoing costs will no longer be classified separately as Project Ascent expenses.
The incremental acquisition-related expenditures were primarily comprised of legal and professional fees. Expenses attributed to Project Ascent, our ERP initiative, were included within Corporate Expenses and classified separately through 2024. A portion of the costs classified as Project Ascent expenses represent ongoing costs that have continued subsequent to the completion of our ERP implementation in 2024.
Diluted weighted average common shares outstanding for each of the years ended June 30, 2024 and 2023 have remained relatively stable. In 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.49.
Earnings Per Share As influenced by the factors discussed above, diluted net income per share totaled $6.07 in 2025, an increase from the 2024 total of $5.76 per diluted share. Diluted weighted average common shares outstanding for each of the years ended June 30, 2025 and 2024 have remained relatively stable.
Cash provided by operating activities in 2024 totaled $251.6 million, an increase of 11.4% as compared with the 2023 total of $225.9 million. The 2024 increase was primarily due to higher net income, as partially offset by the year-over-year changes in deferred income taxes and lower noncash restructuring and impairment charges in the current year.
The 2025 increase was primarily due to higher net income, the current-year noncash pension settlement charge and higher noncash depreciation and amortization expense, as partially offset by unfavorable year-over-year changes in net working capital and lower noncash restructuring and impairment charges.
This Annual Report on Form 10-K contains various “forward-looking statements” within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words.
Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information.
Excluding the impact of last year’s shift in sales due to our ERP go-live, Foodservice segment sales volumes increased 3.5%. 25 Table of Contents In 2024, Foodservice segment operating income decreased 8.7% to $97.1 million driven by higher supply chain costs, as partially offset by the beneficial impact of higher sales volumes.
Foodservice segment sales volumes, measured in pounds shipped, increased 0.9%. Excluding all TSA sales, Foodservice segment sales volumes declined 0.3%. In 2025, Foodservice segment operating income increased 14.9% to $111.6 million driven by the beneficial impact of our cost savings programs and cost deflation, as partially offset by higher supply chain costs.
RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements and their impact on our consolidated financial statements are disclosed in Note 1 to the consolidated financial statements. 28 Table of Contents FORWARD-LOOKING STATEMENTS We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”).
FORWARD-LOOKING STATEMENTS We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). This Annual Report on Form 10-K contains various “forward-looking statements” within the meaning of the PSLRA and other applicable securities laws.
Operating Income Operating income increased 40.9% to $199.4 million in 2024 compared to $141.5 million in 2023 driven by the increase in gross profit, reduced expenditures for Project Ascent and lower restructuring and impairment charges. See discussion of operating results by segment following the discussion of “Earnings Per Share” below.
Operating Income Operating income increased 10.5% to $220.3 million in 2025 compared to $199.4 million in 2024 due to the increase in gross profit and lower restructuring and impairment charges, as partially offset by the higher SG&A expenses.
LOOKING FORWARD For 2025, we anticipate Retail segment sales will continue to benefit from volume growth led by our licensing program, including increased sales from the new products, flavors and sizes we introduced in 2024 along with the recent addition of Subway ® and Texas Roadhouse ® as license partners.
LOOKING FORWARD For 2026, we anticipate Retail segment sales will continue to benefit from volume growth, with contributions from both our licensing program and our Marzetti ® , New York Bakery TM , and Sister Schubert’s ® brands.
See Note 7 to the consolidated financial statements for a reconciliation of the statutory rate to the effective rate. 24 Table of Contents We include the tax consequences related to stock-based compensation within the computation of income tax expense.
Taxes Based on Income Our effective tax rate was 21.6% and 22.8% in 2025 and 2024, respectively. See Note 8 to the consolidated financial statements for a reconciliation of the statutory rate to the effective rate.
Excluding the impact of last year’s shift in sales due to our ERP go-live, the impact of a value engineering initiative we implemented in 2024, and all sales attributed to the perimeter-of-the-store bakery product lines we exited in 2024, Retail segment sales volumes increased 1.7%. In 2024, Retail segment operating income increased $68.2 million, or 48.9%, to $207.7 million.
Our new gluten-free New York Bakery TM frozen garlic bread also added to the growth in Retail net sales. Retail segment sales volumes, measured in pounds shipped, increased 1.6%. Excluding the impact of all sales attributed to the exited perimeter-of-the-store bakery product lines, Retail sales volumes increased 2.9%.
With respect to our input costs, in aggregate we do not foresee significant impacts from commodity cost inflation or deflation in the coming year. We also expect to drive margin improvement through our cost savings programs.
With respect to our input costs, in aggregate we anticipate a modest level of inflation in fiscal 2026 that we plan to offset through contractual pricing and our cost savings programs as we remain focused on continued margin improvement in the year ahead.
Removed
We completed the final wave of the implementation phase in August 2023 as planned and have shifted our focus towards leveraging the capabilities of our new ERP system.
Added
Project Ascent entailed the replacement of our primary customer and manufacturing transactional systems, warehousing systems, and financial systems with an integrated SAP S/4HANA system. Implementation of this system began in July 2022 and continued throughout fiscal 2023.
Removed
Deflationary pricing was a headwind to Foodservice segment sales growth. Sales in the prior year were unfavorably impacted by an estimated $25 million in net sales attributed to advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live that commenced on July 1, 2022.
Added
Year-over-year comparisons for the Retail segment were unfavorably impacted by prior-year sales attributed to the perimeter-of-the-store bakery product lines we exited in March 2024. Year-over-year comparisons for the Foodservice segment were favorably impacted by a temporary supply agreement (“TSA”) resulting from our acquisition of a sauce and dressing production facility located in Atlanta, Georgia (“Atlanta plant”).
Removed
Breaking down the 2.7% increase in consolidated net sales, approximately 1.8% is attributed to volume/mix impacts, approximately 1.4% is attributed to the ERP go-live sales shift and the remaining offset is net pricing. Consolidated sales volumes, measured in pounds shipped, increased 3.7% in 2024.
Added
The acquisition was completed in February 2025. The TSA commenced in March 2025 for a period of up to 12 months.
Removed
In the prior year, gross profit was unfavorably impacted by an estimated $5 million due to the aforementioned shift of net sales into the quarter ended June 30, 2022 ahead of our ERP go-live.
Added
Breaking down the 2.0% increase in consolidated net sales as summarized in the table below, higher core volumes and product mix contributed approximately 220 basis points, as partially offset by approximately 90 basis points attributed to the exited perimeter-of-the-store bakery product lines. The incremental sales attributed to the TSA accounted for 80 basis points.
Removed
Selling, General and Administrative Expenses Year Ended June 30, Change (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 SG&A Expenses - Excluding Project Ascent $ 209,829 $ 192,225 $ 172,771 $ 17,604 9.2 % $ 19,454 11.3 % Project Ascent Expenses 8,236 29,866 39,327 (21,630) (72.4) % (9,461) (24.1) % Total SG&A Expenses $ 218,065 $ 222,091 $ 212,098 $ (4,026) (1.8) % $ 9,993 4.7 % Selling, general and administrative (“SG&A”) expenses decreased 1.8% to $218.1 million in 2024 compared to $222.1 million in 2023.
Added
Breakdown of Change in Consolidated Net Sales Year Ended June 30, 2025 Change in Core Sales Volume / Mix $ 41,722 2.2 % Net Pricing Impact (1,485) (0.1) % Perimeter-of-the-Store Bakery Product Lines Exited March 2024 (17,111) (0.9) % Incremental Sales for Temporary Supply Agreement (TSA) 14,237 0.8 % Total Change in Net Sales $ 37,363 2.0 % Consolidated sales volumes, measured in pounds shipped, increased 1.2% for the year ended June 30, 2025.
Removed
This decrease reflects lower expenditures for Project Ascent, largely offset by higher expenditures to support the continued growth of our business, including investments in personnel, a more normalized level of consumer promotions, higher brokerage costs and IT investments. Project Ascent expenses totaled $8.2 million in 2024 compared to $29.9 million in 2023. Project Ascent expenses are included within Corporate Expenses.
Added
Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses increased 5.6% to $230.2 million in 2025 compared to $218.1 million in 2024. This increase includes investments in IT to support the continued growth of our business and $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent.
Removed
In 2023, we recorded impairment charges of $25.0 million related to the intangible assets of Flatout due to lowered expectations for the projected sales and profitability of the Flatout product lines that we subsequently exited in 2024. These impairment charges were reflected in our Retail segment.
Added
Beginning in 2025, these ongoing costs are no longer classified separately as Project Ascent expenses. Restructuring and Impairment Charges In 2025, we committed to a plan to close our sauce and dressing production facility in Milpitas, California as part of our ongoing strategic initiative to better optimize our manufacturing network.
Removed
Other, Net Other, net resulted in a benefit of $6.2 million in 2024 compared to a benefit of $1.8 million in 2023. This change reflects higher interest rates for our cash holdings and increased balances of cash and equivalents. Taxes Based on Income Our effective tax rate was 22.8% and 22.3% in 2024 and 2023, respectively.
Added
Production at the facility is expected to conclude in the quarter ending September 30, 2025. In 2025, we recorded restructuring and impairment charges of $4.5 million related to this closure. These charges consisted of impairment charges for personal property and operating lease right-of-use assets, one-time termination benefits, and other closing costs.
Removed
We may experience increased volatility to our income tax expense and resulting net income dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vesting of restricted stock awards.
Added
The operations of this facility were not classified as discontinued operations as the closure did not represent a strategic shift that would have a major effect on our operations or financial results. In 2025, we transitioned our internal transportation fleet operation to an external dedicated carrier. In 2025, we recorded resulting restructuring charges of $0.6 million for one-time termination benefits.
Removed
For 2024 and 2023, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by less than 0.1% and 0.4%, respectively. Earnings Per Share As influenced by the factors discussed above, diluted net income per share totaled $5.76 in 2024, an increase from the 2023 total of $4.04 per diluted share.
Added
The following table presents a reconciliation between operating income as reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and adjusted operating income, which is a non-GAAP financial measure. Adjusted operating income excludes certain items affecting comparability that can impact the analysis of our underlying core business performance and trends.
Removed
The increase in 2024 Retail net sales also reflects that prior-year sales were unfavorably impacted by advance orders accounting for an estimated $11 million in Retail net sales near the end of fiscal 2022 ahead of our ERP go-live, which commenced on July 1, 2022. Retail segment sales volumes, measured in pounds shipped, increased 1.4% in the current year.
Added
Management uses this non-GAAP measure in preparation of our annual operating plan and for our monthly analysis of operating results. The excluded items consist of costs related to restructuring or acquisition activities.
Removed
Retail sales volume growth was driven by the continued success of our program for licensed sauces and dressings. Our New York BRAND ® Bakery frozen garlic bread products also contributed to the increase in the Retail sales volumes.
Added
Year Ended June 30, Change (Dollars in thousands) 2025 2024 2025 vs. 2024 Reported Operating Income $ 220,317 $ 199,363 $ 20,954 10.5 % Cost of Sales - Inventory Write-Down for Product Line Exit — 2,600 (2,600) (100.0) % SG&A Expenses - Acquisition Costs 3,781 — 3,781 N/M Restructuring and Impairment Charges 5,102 14,874 (9,772) (65.7) % Adjusted Operating Income (non-GAAP) $ 229,200 $ 216,837 $ 12,363 5.7 % See discussion of operating results by segment following the discussion of “Earnings Per Share” below. 24 Table of Contents Pension Settlement Charge Prior to November 30, 2024, we sponsored multiple defined benefit pension plans that covered certain former employees under collective bargaining contracts related to closed or sold operations.
Removed
Beyond the impacts of last year’s impairment charges and this year’s write-down of inventories, which combined to contribute a net increase to Retail segment operating income of $22.4 million, the growth in Retail segment operating income was driven by: favorability in our pricing net of commodity costs, including pricing impacts from investments in trade spending; our cost savings programs; and the beneficial impact of higher sales volumes.
Added
All these plans were previously frozen. In August 2024, our Board of Directors approved the merger of all five pension plans and the termination of the resulting merged plan. The merged plan was terminated effective November 30, 2024. Lump sum distributions and annuity purchases from a highly rated insurance company were completed in December 2024.
Removed
Deflationary pricing was a headwind to Foodservice segment sales growth. Sales in the prior year were unfavorably impacted by the advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live, which reduced Foodservice net sales in the prior year by an estimated $14 million.
Added
As a result of the pension termination, we incurred a one-time noncash settlement charge of $14.0 million in 2025. See further discussion in Note 11 to the condensed consolidated financial statements. Other, Net Other, net resulted in a benefit of $7.1 million in 2025 compared to a benefit of $6.2 million in 2024. This change primarily reflects higher interest income.
Removed
Foodservice segment sales volumes, measured in pounds shipped, increased 5.3% in the current year.
Added
In 2025, the pension settlement charge reduced diluted earnings per share by $0.39, restructuring and impairment charges reduced diluted earnings per share by $0.15 and costs related to the Atlanta plant acquisition reduced diluted earnings per share by $0.11.
Removed
Project Ascent expenses totaled $8.2 million and $29.9 million in 2024 and 2023, respectively.

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