Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to us, based on our current beliefs as well as assumptions made by us and information currently available to us. Forward-looking statements generally will be accompanied by words such as "anticipate," "if," "may," "believe," "plan,", "goals," "estimate," "expect," "project," "continue," "forecast," "intend," "may," "could," "should," "will," and other similar expressions. Statements addressing our future operating performance and statements addressing events and developments that we expect or anticipate will occur are also considered as forward-looking statements. This includes, without limitation, our statements and expectations regarding any current or future recovery in our industry (or the industries of our customers), the success of new product innovations, and the future impact of our supply chain efficiency projects, including investments in additional production capacity and logistics and warehousing operations. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the expectations of management. We intend that such forward-looking statements be subject to the safe harbor provisions of the Securities Act and the Exchange Act. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties, and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation to revise, update, add or to otherwise correct, any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. 25 Objective This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide readers of our financial statements with a narrative form from the perspective of our management regarding our financial condition and results of operations, liquidity and certain other factors that may affect our future results. The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and within the Company’s Annual Report on Form 10-K filed for the fiscal year ended September 27, 2025. Business Overview The Company manufactures and sells snack foods and distributes frozen beverages which it markets nationally to the foodservice and retail supermarket industries. The Company’s principal snack food products are soft pretzels, frozen novelties, churros and bakery products. We believe we are the largest manufacturer of soft pretzels in the United States. Other snack food products include donuts, churros, cookies, funnel cake and handheld products. The Company’s principal frozen beverage products are the ICEE brand frozen carbonated beverage and the SLUSH PUPPIE brand frozen non-carbonated beverage. The Company’s Food Service and Frozen Beverage sales are made principally to foodservice customers including snack bar and food stand locations in leading chain, department, discount, warehouse club and convenience stores; malls and shopping centers; fast food and casual dining restaurants; stadiums and sports arenas; leisure and theme parks; movie theaters; independent retailers; and schools, colleges and other institutions. The Company’s Retail Supermarket customers are primarily supermarket chains. Business Trends and Strategy Our products are generally sold for discretionary consumption. Our results are impacted by macroeconomic and demographic trends and changes in consumer behavior. The U.S. economy has experienced economic volatility and uncertainty in recent years, which has had, and we expect might continue to have, an impact on consumer behavior. Consumer spending may continue to be impacted by levels of discretionary income and the impact of that on the consumer’s decision-making around their purchases. While overall packaging and raw material inflation appears to have moderated during fiscal 2026, uncertainty within the supply chain surrounding impacts from the US government’s tariffs on imports, as well as elevated fuel and freight costs, could continue to be potential headwinds for the Company throughout the remainder of fiscal 2026 and into fiscal 2027. Tariffs and elevated fuel and freight costs may increase the cost of certain raw materials and packaging that we use in our business, as well as increase our distribution costs, and our financial performance may be adversely impacted if we are unable to pass on the cost increases in the form of price increases to our customers. Additionally, the ultimate impact of tariffs may be difficult to predict as tariff rates and duration remain uncertain, which can make our planning process more challenging. To help combat these potential headwinds, we continue to pursue operational improvements, as well as expand growth opportunities across our various channels and customers. Some recent examples of implementing these strategies include: ● Our recently completed strategic supply chain transformation in which we opened three regional distribution centers which is projected to drive cost reductions around warehousing and distribution costs. ● Many examples of successful cross-selling and leveraging our brands across customer channels, including our recent expansion of Dippin’ Dots brand into retail and further into the theater channel. ● Our recently announced transformation program, “Project Apollo,” which is anticipated to generate sustainable efficiencies and cost savings across the enterprise. 26 The above referenced Project Apollo is expected to generate approximately $25 million of run-rate operating income for the initiatives that are expected to be implemented by the end of fiscal 2026. The initial focus of the project is the consolidation and optimization of our manufacturing network. During the fourth quarter of fiscal 2025, we announced the closure of two manufacturing facilities, our plant in Holly Ridge, North Carolina, and our plant in Atlanta, Georgia. In the first quarter of fiscal 2026, we announced the closure of a third manufacturing facility, our plant in Colton, California. During the second quarter of fiscal 2026, we made the decision to close a fourth facility, our manufacturing/distribution facility in New York, New York, which closed as anticipated during our third fiscal quarter. Production from these facilities has been consolidated into various other facilities across our network, or in certain cases, has been discontinued. This consolidation was enabled by investments we have made in our plants to modernize and expand capacity for our core products, as well as our investments made to build out our three regional distribution centers. In connection with the closing of our four facilities, we recorded plant closure costs of approximately $24 million in the fourth quarter of fiscal 2025, and an additional approximately $11 million in the nine months ended June 27, 2026, the majority of which was recorded in our first and second quarters of fiscal 2026. These costs primarily related to non-cash write-downs and write-offs related to inventory and property, plant and equipment, as well as severance and benefit costs and other exit and disposal activities. In addition to plant consolidation, as part of the first phase of Project Apollo, we are continuing to work towards optimally repositioning production within our network, and to streamline our corporate functions, both of which have started to generate savings in fiscal 2026, but for which we anticipate the full run-rate benefit to begin to be seen in fiscal 2027 and beyond. RESULTS OF OPERATIONS – Three and nine months ended June 27, 2026 The following discussion provides a review of results for the three and nine months ended June 27, 2026 as compared with the three and nine months ended June 28, 2025. Summary of Results Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 % Change 2026 2025 % Change (in thousands) (in thousands) Net sales $ 425,957 $ 454,293 (6.2 )% $ 1,114,554 $ 1,172,990 (5.0 )% Cost of goods sold 274,941 304,248 (9.6 )% 768,234 833,341 (7.8 )% Gross profit 151,016 150,045 0.6 % 346,320 339,649 2.0 % Operating expenses Marketing and selling 34,627 33,847 2.3 % 96,209 91,023 5.7 % Distribution 49,621 44,685 11.0 % 129,414 126,128 2.6 % Administrative 20,068 20,028 0.2 % 61,629 58,685 5.0 % Intangible asset impairment charges - 1,500 n.m. - 1,500 n.m. Gain on insurance proceeds received for damage to property, plant, and equipment - (10,622 ) n.m. (800 ) (10,622 ) n.m. Plant closure expense (recoveries) (155 ) - n.m. 10,714 - n.m. Other general expense (income) 581 10 5710.0 % 440 76 478.9 % Total operating expenses 104,742 89,448 17.1 % 297,606 266,790 11.6 % Operating income 46,274 60,597 (23.6 )% 48,714 72,859 (33.1 )% Other income (expense) Investment income 680 622 9.3 % 2,224 2,348 (5.3 )% Interest expense (965 ) (441 ) 118.8 % (1,406 ) (738 ) 90.5 % Earnings before income taxes 45,989 60,778 (24.3 )% 49,532 74,469 (33.5 )% Income tax expense 10,657 16,531 (35.5 )% 11,640 20,255 (42.5 )% NET EARNINGS $ 35,332 $ 44,247 (20.1 )% $ 37,892 $ 54,214 (30.1 )% Comparisons as a Percentage of Net Sales Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 Basis Pt Chg 2026 2025 Basis Pt Chg Gross profit 35.5 % 33.0 % 250 31.1 % 29.0 % 210 Marketing and selling 8.1 % 7.5 % 60 8.6 % 7.8 % 80 Distribution 11.6 % 9.8 % 180 11.6 % 10.8 % 80 Administrative 4.7 % 4.4 % 30 5.5 % 5.0 % 50 Operating income 10.9 % 13.3 % (240 ) 4.4 % 6.2 % (180 ) Earnings before income taxes 10.8 % 13.4 % (260 ) 4.4 % 6.3 % (190 ) Net earnings 8.3 % 9.7 % (140 ) 3.4 % 4.6 % (120 ) Net Sales Net sales decreased by $28.3 million, or 6.2%, to $426.0 million for the three months ended June 27, 2026. Net sales decreased by $58.4 million, or 5.0%, to $1,114.6 million for the nine months ended June 27, 2026. The sales decrease was primarily driven by declines in our Food Service segment, most notably within our bakery portfolio, and the majority of which related to anticipated sales reductions in our bakery business. 27 Gross Profit Gross Profit increased by $1.0 million, or 0.6%, to $151.0 million for the three months ended June 27, 2026. As a percentage of sales, gross profit increased from 33.0% to 35.5%. The increase in gross profit as a percentage of sales was largely driven by the benefits of our previously announced plant closures as well as the favorable impact from mix improvements. These favorable tailwinds significantly offset the unfavorable impact of lower sales volumes in our Food Service segment, as well as the higher slotting fees and promotional spend within our Retail segment. Gross Profit increased by $6.7 million, or 2.0%, to $346.3 million for the nine months ended June 27, 2026. As a percentage of sales, gross profit increased from 29.0% to 31.1%. The increase in gross profit as a percentage of sales was largely driven by the benefits of our previously announced plant closures as well as the favorable impact from mix improvements. These favorable tailwinds significantly offset the unfavorable impact of lower sales volumes in our Food Service segment, as well as the higher slotting fees and promotional spend within our Retail segment. Operating Expenses Operating Expenses increased by $15.3 million, or 17.1%, to $104.7 million for the three months ended June 27, 2026. As a percentage of sales, operating expenses increased from 19.7% to 24.6%. Operating expenses in the prior year included the benefit of a $10.6 million gain on insurance proceeds received for damage to property, plant and equipment, related to the fire at our Holly Ridge plant, offset slightly by the $1.5 million intangible asset impairment charge. The net of those two items reduced prior year operating expenses as a percentage of sales by approximately 200 bps. The remaining increase in operating expenses for the three months ended June 27, 2026 primarily related to higher distribution expenses, mostly driven by elevated fuel costs due to rising oil prices and higher freight rates resulting from the constrained capacity due to regulatory and legislative changes. As a percentage of sales, distribution expenses increased from 9.8% to 11.6% and from $44.7 million to $49.6 million. As a percentage of sales, marketing and selling expenses increased from 7.5% to 8.1% and from $33.8 million to $34.6 million in the three months ended June 27, 2026, with the increase primarily attributable to increased commission costs on retail vending sales, increased spend on sponsorships, brand support and other promotional activities, and higher depreciation for customer equipment for growth. As a percentage of sales, general and administrative expenses increased from 4.4% to 4.7% and from $20.0 million to $20.1 million in the three months ended June 27, 2026. Operating Expenses increased by $30.8 million, or 11.6%, to $297.6 million for the nine months ended June 27, 2026. As a percentage of sales, operating expenses increased from 22.7% to 26.7%. Operating expenses in the nine months ended June 27, 2026 included $10.7 million of plant closure expenses and a partly offsetting $0.8 million gain on insurance proceeds received for damage to property, plant, and equipment. The net impact of these items increased operating expenses as a percentage of sales in the nine months ended June 27, 2026 by approximately 90 bps. Additionally, operating expenses in the nine months ended June 28, 2025 included a benefit of a $10.6 million gain on insurance proceeds received for damage to property, plant and equipment, related to the fire at our Holly Ridge plant, offset slightly by the $1.5 million intangible asset impairment charge. The net of the two items reduced operating expenses as a percentage of sales in the nine months ended June 28, 2025 by approximately 80 bps. The remaining increase in operating expenses in the nine months ended June 27, 2026 was driven by increases in marketing and selling expenses, distribution expenses, and general and administrative expenses. As a percentage of sales, marketing and selling expenses increased from 7.8% to 8.6% and from $91.0 million to $96.2 million in the nine months ended June 27, 2026, with the increase primarily attributable to increased commission costs on retail vending sales, increased spend on sponsorships, brand support and other promotional activities, and higher depreciation for customer equipment for growth. As a percentage of sales, distribution expenses increased from 10.8% to 11.6%, and from $126.1 million to $129.4 million in the nine months ended June 27, 2026, with the increase primarily attributable to elevated fuel costs due to rising oil prices and higher freight rates resulting from the constrained capacity due to regulatory and legislative changes, which were incurred predominantly in the three months ended June 27, 2026. As a percentage of sales, general and administrative expenses increased from 5.0% to 5.5% and from $58.7 million to $61.6 million in the nine months ended June 27, 2026. The increase was most significantly driven by non-recurring restructuring and legal expenses incurred during the first and second quarters in fiscal 2026. 28 Other Income and Expense Investment income increased slightly from $0.6 million to $0.7 million for the three months ended June 27, 2026, but decreased slightly from $2.3 million to $2.2 million for the nine months ended June 27, 2026. Interest expense increased from $0.4 million to $1.0 million for the three months ended June 27, 2026, and from $0.7 million to $1.4 million for the nine months ended June 27, 2026, respectively, due to the increase in the Company’s average outstanding borrowings under the Credit Agreement for the three and nine- month periods ended June 27, 2026, as compared to the prior year periods. Income Tax Expense Our effective tax rate decreased from 27.2% to 23.2% and from 27.2% to 23.5% for the three and nine months ended June 27, 2026, respectively. The decrease in rate between periods was primarily attributable to a change in the blended state tax rate between periods. Net Earnings Net earnings decreased by $8.9 million, or 20.1%, for the three months ended June 27, 2026, due to the aforementioned items. Net earnings decreased by $16.3 million, or 30.1%, for the nine months ended June 27, 2026, due to the aforementioned items. There are many factors which can impact our net earnings from year to year and in the long run, among which are the supply and cost of raw materials and labor, insurance costs, factors impacting sales as noted above, the continuing consolidation of our customers, our ability to manage our manufacturing, marketing and distribution activities, our ability to make and integrate acquisitions and changes in tax laws and interest rates. Business Segment Discussion We operate in three segments: Food Service, Retail Supermarket, and Frozen Beverages. The following table is a summary of sales and operating income, which is how we measure segment profit. Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 % Change 2026 2025 % Change (in thousands) (in thousands) Net sales Food Service $ 254,288 $ 277,169 (8.3 )% $ 688,109 $ 742,105 (7.3 )% Retail Supermarket 64,932 63,860 1.7 % 162,434 162,425 0.0 % Frozen Beverages 106,737 113,264 (5.8 )% 264,011 268,460 (1.7 )% Total sales $ 425,957 $ 454,293 (6.2 )% $ 1,114,554 $ 1,172,990 (5.0 )% Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 % Change 2026 2025 % Change (in thousands) (in thousands) Operating income Food Service $ 28,079 $ 27,896 0.7 % $ 49,033 $ 44,175 11.0 % Retail Supermarket 2,660 6,185 (57.0 )% 3,435 10,888 (68.5 )% Frozen Beverages 22,815 23,703 (3.7 )% 31,500 30,916 1.9 % General corporate expenses (7,435 ) (6,309 ) 17.8 % (25,340 ) (22,242 ) 13.9 % Intangible asset impairment charges - (1,500 ) n.m. - (1,500 ) n.m. Gain on insurance proceeds received for damage to property, plant, and equipment - 10,622 n.m. 800 10,622 n.m. Plant closure (expense) recoveries 155 - 0.0 % (10,714 ) - 0.0 % Total operating income $ 46,274 $ 60,597 (23.6 )% $ 48,714 $ 72,859 (33.1 )% Food Service Segment Results Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 % Change 2026 2025 % Change (in thousands) (in thousands) Food Service sales to external customers $ 254,288 $ 277,169 (8.3 )% $ 688,109 $ 742,105 (7.3 )% Food Service operating income $ 28,079 $ 27,896 0.7 % $ 49,033 $ 44,175 11.0 % Sales to food service customers decreased $22.9 million, or 8.3%, to $254.3 million for the three months ended June 27, 2026. The largest driver of the decrease was bakery product sales, which decreased by 19%, with the decrease largely attributable to the anticipated sales reductions in our bakery business. Additionally, sales of handhelds decreased by 16%, with the decrease attributable to lower comparative volumes, as well as contractual pricing true-ups on the lower costing of certain raw material ingredients. The decrease in sales within those two product categories was offset slightly by modest growth within our soft pretzel and churro product categories. 29 Sales of new products in the first twelve months since their introduction were minimal for the three months ended June 27, 2026. Low-single digit net pricing increases were more than offset by the net volume declines, primarily attributable to the anticipated sales reductions in our bakery business. Operating income in our Food Service segment increased $0.2 million, or 0.7%, to $28.1 million for the three months ended June 27, 2026, which reflected the efficiencies and benefits of the optimization of our manufacturing footprint as well as mix improvements across the portfolio more than offsetting the lower comparative sales volumes. Sales to food service customers decreased $54.0 million, or 7.3%, to $688.1 million for the nine months ended June 27, 2026. The largest driver of the decrease was bakery product sales, which decreased by 17%, with the decrease largely attributable to the anticipated sales reductions in our bakery business. Additionally, sales of handhelds decreased by 18%, with the decrease attributable to lower comparative volumes on our core handhelds, as well as contractual pricing true-ups on the lower costing of certain raw material ingredients. Somewhat offsetting these decreases were soft pretzel sales to foodservice customers, which increased by 6%, with the increase largely attributable to volume increases seen within the category on our key brands, a continuation of the trend seen in the second half of our fiscal 2025. Sales of new products in the first twelve months since their introduction were minimal for the nine months ended June 27, 2026. Low-single digit net pricing increases were more than offset by the net volume declines, primarily attributable to the anticipated sales reductions in our bakery business. Operating income in our Food Service segment increased $4.9 million, or 11.0% to $49.0 million for the nine months ended June 27, 2026, which reflected the efficiencies and benefits of the optimization of our manufacturing footprint seen within gross profit, as well as mix improvements across the portfolio, which more than offset the lower comparative sales volumes. Retail Supermarket Segment Results Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 % Change 2026 2025 % Change (in thousands) (in thousands) Retail Supermarket sales to external customers $ 64,932 $ 63,860 1.7 % $ 162,434 $ 162,425 0.0 % Retail Supermarket operating income $ 2,660 $ 6,185 (57.0 )% $ 3,435 $ 10,888 (68.5 )% Sales of products to retail customers increased $1.1 million, or 1.7%, to $64.9 million for the three months ended June 27, 2026. The net increase was primarily attributable to volume increases seen across the majority of our retail product categories, offset somewhat by the comparative increased slotting fees and promotional spend, primarily within the frozen novelties category. Sales of new products in retail supermarkets were approximately $2.4 million in the three months ended June 27, 2026, driven by the launch of new frozen novelties products. Sales in the quarter were impacted by the higher slotting fees and promotional spend, which drove high-single digit negative net pricing and mostly offset the volume increases across the retail portfolio. Operating income in our Retail Supermarket segment decreased $3.5 million in the three months ended June 27, 2026, primarily driven by the impact of the higher comparative slotting fees and promotional spend within the frozen novelties category, along with the impact of product mix on gross profit. Sales of products to retail customers remained materially flat at $162.4 million for the nine months ended June 27, 2026, with the volume increases across the majority of retail product categories offset by the increased slotting fees and promotional spend. Sales of new products in retail supermarkets were approximately $2.9 million in the nine months ended June 27, 2026, driven by the launch of new frozen novelties products. Sales in the nine-month period were impacted by the higher slotting fees and promotional spend, which drove mid-single digit negative net pricing and mostly offset the volume increases across the retail portfolio. Operating income in our Retail Supermarket segment decreased $7.5 million, or 68.5%, to $3.4 million in the nine months ended June 27, 2026, primarily driven by the impact of the higher comparative slotting fees and promotional spend within the frozen novelties category, along with the impact of product mix on gross profit. 30 Frozen Beverages Segment Results Three months ended Nine months ended June 27, June 28, June 27, June 28, 2026 2025 % Change 2026 2025 % Change (in thousands) (in thousands) Frozen Beverages sales to external customers $ 106,737 $ 113,264 (5.8 )% $ 264,011 $ 268,460 (1.7 )% Frozen Beverages operating income $ 22,815 $ 23,703 (3.7 )% $ 31,500 $ 30,916 1.9 % Frozen beverage and related product sales decreased $6.5 million, or 5.8%, in the three months ended June 27, 2026. Beverage sales increased 6% to $75.3 million, with the increase driven by a strong performance in our theater and mass merchandising channels. Gallon sales increased approximately 7% for the three months ended June 27, 2026. Service revenue decreased 14% to $21.0 million due to weakness in demand related to customer decisions to insource their maintenance. Machine revenue (primarily sales of frozen beverage machines) decreased 43% to $9.6 million, primarily the result of the lapping of the impact of a major convenience customer that had updated its equipment across its store network in the prior year. Operating income in our Frozen Beverage segment decreased $0.9 million in the quarter to $22.8 million, as the decrease in service revenue and machine revenue more than offset the strong beverage sales. Frozen beverage and related product sales decreased $4.5 million, or 1.7% in the nine months ended June 27, 2026. Beverage sales increased 6% to $166.9 million with the increase driven by strong performance in our theater channel, combined with pricing increases, a favorable sales mix and some foreign exchange-related tailwinds. Gallon sales increased approximately 2% for the nine months ended June 27, 2026. Service revenue decreased 11% to $64.5 million due to weakness in demand related to customer decisions to insource their maintenance, as well as slower restaurant traffic. Machine revenue (primarily sales of frozen beverage machines) decreased 17% to $30.3 million, primarily the result of the lapping of the impact of a major convenience customer that had updated its equipment across its store network in the prior year third fiscal quarter. Operating income in our Frozen Beverage segment increased $0.6 million in the nine months ended June 27, 2026 to $31.5 million, as strong beverage sales positively impacted leverage across the business. Liquidity and Capital Resources Although there are many factors that could impact our operating cash flow, most notably net earnings, we believe that our future operating cash flow, along with our borrowing capacity, our current cash and cash equivalent balances and our investment securities is sufficient to satisfy our cash requirements over the next twelve months and beyond, as well as to fund future growth and expansion. Nine months ended June 27, June 28, 2026 2025 (in thousands) Cash flows from operating activities Net earnings $ 37,892 $ 54,214 Non-cash items in net income: Depreciation of fixed assets 52,167 48,296 Amortization of intangibles and deferred costs 4,218 5,871 Intangible asset impairment charges - 1,500 Losses (Gains) from disposals of property & equipment 522 (394 ) Non-cash plant closure expenses 4,529 - Non-cash impairment charge 850 - Share-based compensation 4,684 4,580 Deferred income taxes 515 127 Gain on insurance proceeds received for damage to property, plant, and equipment (800 ) (10,622 ) Gain on insurance proceeds received in excess of operating losses recognized - (799 ) Other 546 212 Changes in assets and liabilities, net of effects from purchase of companies (4,680 ) (4,288 ) Net cash provided by operating activities $ 100,443 $ 98,697 ● Gain on insurance proceeds received related to insurance recoveries related to the Holly Ridge fire claim. 31 ● The net cash outflow of $4.7 million in cash flows associated with changes in assets and liabilities, net of effects from purchase of companies, in the nine months ended June 27, 2026, was primarily driven by largely offsetting impacts across working capital categories, including a $26.0 million increase in accounts receivable offset somewhat by a net $19.1 million cash inflow attributable to other operating assets and liabilities, and a $2.3 million decrease in inventories. In the prior year, the net cash outflow of $4.3 million was primarily driven by largely offsetting impacts across working capital categories, including a $21.6 million increase in inventories, a $16.5 million increase in accounts receivable, and a net $33.8 million cash inflow attributable to other operating assets and liabilities. Nine months ended June 27, June 28, 2026 2025 (in thousands) Cash flows from investing activities Purchases of property, plant and equipment $ (53,263 ) $ (61,264 ) Proceeds from disposal of property and equipment 396 1,413 Proceeds from insurance for fixed assets 800 11,421 Net cash (used in) investing activities $ (52,067 ) $ (48,430 ) ● Purchases of property, plant and equipment include spending for production growth, in addition to acquiring new equipment, infrastructure replacements, and upgrades to maintain competitive standing and position us for future opportunities. ● Proceeds from insurance for fixed assets related to insurance recoveries related to the Holly Ridge fire claim. Nine months ended June 27, June 28, 2026 2025 (in thousands) Cash flows from financing activities Payments to repurchase common stock $ (74,730 ) $ (5,000 ) Proceeds from issuance of stock 1,160 3,104 Purchase of vested employee service share units and performance share units (1,090 ) - Borrowings under credit facility 119,000 40,000 Repayment of borrowings under credit facility (91,000 ) (40,000 ) Payments for debt issuance costs (567 ) - Payments on finance lease obligations (353 ) (182 ) Payment of cash dividend (45,763 ) (45,575 ) Net cash (used in) financing activities $ (93,343 ) $ (47,653 ) ● During the nine months ended June 27, 2026, the Company repurchased 854,208 shares of common stock of the Company at an average price of $86.66 per share on the open market, pursuant to the 2025 and 2026 Share Repurchase Programs. During the nine months ended June 28, 2025, the Company repurchased 39,061 shares of common stock of the Company at an average price of $128.00 per share on the open market, pursuant to the 2025 Share Repurchase Program. ● Proceeds from issuance of stock decreased in the nine months ended June 27, 2026 as no stock options were exercised in the period as the Company began to issue service share units and performance units as forms of stock-based compensation in recent years. ● Borrowings under credit facility and repayment of borrowings under credit facility relate to the Company’s cash draws and repayments made to primarily fund working capital needs. ● The slight increase in payment of cash dividends from prior year period was due to the raising of our quarterly dividend during fiscal 2025, somewhat offset by a decrease in outstanding share count due to the share repurchases. Liquidity As of June 27, 2026, we had $63.1 million of Cash and Cash Equivalents. In December 2021, the Company entered into an amended and restated loan agreement (as amended, the “Credit Agreement”) with our existing banks which provided for up to a $50 million revolving credit facility repayable in December 2026. On June 21, 2022, the Company entered into an amendment to the Credit Agreement, (“Amendment No. 1”), which provided for an incremental increase of $175 million in available borrowings under the revolving credit facility. Amendment No. 1 also included an option to increase the size of the revolving credit facility by up to an amount not to exceed in the aggregate the greater of $225 million or, $50 million plus the Consolidated EBITDA (as defined in the Credit Agreement) of the Borrowers (as defined in the Credit Agreement), subject to the satisfaction of certain terms and conditions. 32 On June 5, 2026, the Company entered into Amendment No. 2 to the Credit Agreement (“Amendment No. 2”). Amendment No. 2 maintained the existing $225 million revolving credit facility capacity, extended the maturity date of the revolving credit facility established under the Credit Agreement to June 2031, and revised the pricing grid used to determine the Applicable Margin (as defined in the Credit Agreement). Amendment No. 2 also included an option to increase the size of the revolving credit facility by up to an amount not to exceed the greater of $200 million or the Consolidated EBITDA of the Borrowers, subject to the satisfaction of certain terms and conditions. Interest accrues, at the Company’s election at (i) the SOFR Rate (as defined in the Credit Agreement), plus an applicable margin, based upon the Consolidated Net Leverage Ratio, as defined in the Credit Agreement, or (ii) the Alternate Base Rate (a rate based on the higher of (a) the prime rate announced from time-to-time by the Administrative Agent, (b) the Federal Reserve System’s federal funds rate, plus 0.50% or (c) the Daily SOFR Rate, plus an applicable margin). The Alternate Base Rate is defined in the Credit Agreement. The Credit Agreement requires the Company to comply with various affirmative and negative covenants, including without limitation (i) covenants to maintain a minimum specified interest coverage ratio and maximum specified net leverage ratio, and (ii) subject to certain exceptions, covenants that prevent or restrict the Company’s ability to pay dividends, engage in certain mergers or acquisitions, make certain investments or loans, incur future indebtedness, alter its capital structure or line of business, prepay subordinated indebtedness, engage in certain transactions with affiliates, or amend its organizational documents. As of June 27, 2026, the Company is in compliance with all financial covenants of the Credit Agreement. As of June 27, 2026, $28.0 million was outstanding under the Amended Credit Agreement with a weighted average interest rate of 5.64%. As of June 27, 2026, the amount available under the Amended Credit Agreement was $182.2 million, after giving effect to the outstanding letters of credit. Critical Accounting Policies, Judgments and Estimates There have been no material changes to our critical accounting policies, judgments and estimates from the information provided in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies, Judgments and Estimates, in our Annual Report on Form 10-K for the year ended September 27, 2025, as filed with the SEC on November 26, 2025.