Financial Analysis

NOTE 9FAIR VALUE MEASUREMENTS: Current accounting guidance defines fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include managements own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below. As of December 31, 2025 and 2024, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These include derivative hedging instruments r …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE 12GOODWILL AND INTANGIBLE ASSETS: All of the Companys intangible indefinite-lived assets are trademarks. The changes in the carrying amount of trademarks for 2025 and 2024 were as follows: 2025 2024 Original cost $ 193,767 $ 193,767 Accumulated impairment losses as of January 1 (18,743) (18,743) Balance at January 1 $ 175,024 $ 175,024 Current year impairment losses Balance at December 31 $ 175,024 $ 175,024 Accumulated impairment losses as of December 31 $ (18,743) $ (18,743) The fair value of indefinite-lived intangible assets was primarily assessed using the present value of estimated future cash flows and relief-from-royalty method. The Company has no accumulated impairment losses of goodwill. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 4INCOME TAXES: The domestic and foreign components of pretax income are as follows: 2025 2024 2023 Domestic $ 129,580 $ 110,569 $ 105,018 Foreign 7,656 16,302 14,876 $ 137,236 $ 126,871 $ 119,894 The provision for income taxes is comprised of the following: 2025 2024 2023 Current: Federal $ 19,148 $ 24,804 $ 21,710 Foreign 2,074 2,676 3,775 State 4,225 3,531 3,738 25,447 31,011 29,223 Deferred: Federal 10,151 6,981 (1,209) Foreign 330 1,041 658 State 1,326 1,030 (664) 11,807 9,052 (1,215) $ 37,254 $ 40,063 $ 28,008 Deferred taxes reflect temporary differences between the tax basis and financial statement carrying value of assets and liabilities. The significant temporary differences that comprised the deferred tax assets and liabilities are as follows: December 31, 2025 2024 Deferred tax assets: Accrued customer promotions $ 250 $ 218 Deferred compensation 15,233 14,886 Postretirement benefits 2,392 2,326 Other accrued expenses 3,477 993 Foreign subsidiary tax loss carry forward 6,474 4,681 Outside basis difference in foreign subsidiary 362 361 Capitalized research and development costs 9,965 Deductible state tax depreciation 1,325 1,286 Tax credit carry forward 2,855 2,565 32,368 37,281 Valuation allowances (7,630) (6,180) Total deferred tax assets $ 24,738 $ 31,101 Deferred tax liabilities: Depreciation $ 25,999 $ 26,851 Deductible goodwill and trademarks 41,098 37,902 Accrued export company commissions 5,222 5,012 Employee benefit plans 1,723 2,894 Inventory reserves …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Recent accounting pronouncements: In December 2023, the FASB issued ASU No. 2023-09, ""Improvements to Income Tax Disclosures"". The amendments in this update affect income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning after December 15, 2025. The Company has adopted this update prospectively and revised the disclosures in Note 4 Income Taxes accordingly. In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update require disclosure, in the notes to the financial statements, of specific expense categories present within expense captions presented on the face of the income statement within continuing operations of public business entities. The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently evaluating the potential effects of this amendment on its Consolidated Financial Statements and believes the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures. In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging, Hedge Accounting Improvements. The new standard is intended to better align the hedge accounting model with risk manageme …

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NOTE 7EMPLOYEE BENEFIT PLANS: Pension plans: The Company sponsors a defined contribution pension plan covering certain non-union employees with over one year of credited service. The Companys policy is to fund pension costs accrued based on compensation levels. Total expense for this plan for 2025, 2024 and 2023 approximated $2,955, $2,954 and $2,812, respectively. The Company also maintains certain defined contribution 401K profit sharing and retirement plans. Company contributions in 2025, 2024 and 2023 to these plans were $3,837, $3,336 and $3,568 respectively. The Company also contributes to a multi-employer defined benefit pension plan for certain of its union employees under a collective bargaining agreement which is as follows: Plan name: Bakery and Confectionery Union and Industry International Pension Fund (Plan) Employer Identification Number and plan number: 52-6118572, plan number 001 Funded Status as of the most recent year available: 45.2% funded as of January 1, 2024 The Companys contributions to such plan: $3,276, $3,360 and $3,530 in 2025, 2024 and 2023, respectively Plan status: Critical for the plan year beginning January 1, 2025 (most recent date information is available) Beginning in 2012, the Company has received periodic notices from the Plan, a multi-employer defined benefit pension plan for certain Company union employees, that the Plans actuary certified the Plan to be in critical status, as defined by the Pension Protection Act (PPA) and the Pension …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 8SEGMENT AND GEOGRAPHIC INFORMATION: The Company uses the management approach to determine segments by evaluating the nature of the Companys operating activities, the relative significance of operating segments to consolidated results, how management organizes the business, and by evaluating what the Companys chief operating decision maker (CODM) regularly reviews in deciding how to allocate resources and in assessing operating performance. The Company operates and manages an integrated business involved in the manufacture and sale of confectionery products with the overall objective of increasing the volume of sales and profitability of operations. The Company uses similar processes to sell products to similar classes of customers across the entire business. Certain shipping and handling activities supporting operations are integrated to maximize efficiency and productivity and are regularly reviewed separately by our CODM as a result. Those shipping and handling costs are included in selling, marketing and administrative expenses and disclosed separately in Note 1 Significant Accounting Policies. The Company has determined that it currently has one reportable segment. The Companys Chief Executive Officer, the Companys CODM, focuses on consolidated results, specifically consolidated net income (loss), in assessing operating performance and allocating resources . Its principal manufacturing operations are located in the United States and Canada, and its principal market …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing