PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) For Q2 2025, KB Home reported **total revenues** of **$1.53 billion** and **net income** of **$107.9 million**, a decrease from **$1.71 billion** and **$168.4 million** in Q2 2024, respectively, with **total assets** at **$7.02 billion** and **Cash flow from operations** at **-$165.9 million** for the first six months of 2025 | Financial Metric | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | Six Months Ended May 31, 2025 | Six Months Ended May 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,529.6 million | $1,709.8 million | $2,921.4 million | $3,177.6 million | | **Net Income** | $107.9 million | $168.4 million | $217.4 million | $307.1 million | | **Diluted EPS** | $1.50 | $2.15 | $3.00 | $3.91 | | Balance Sheet Item | May 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $308.9 million | $598.0 million | | Inventories | $5,913.3 million | $5,528.0 million | | Total Assets | $7,017.6 million | $6,936.2 million | | Notes Payable | $1,892.9 million | $1,691.7 million | | Total Stockholders' Equity | $3,990.5 million | $4,060.6 million | | Cash Flow Activity (Six Months Ended) | May 31, 2025 | May 31, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | ($165.9 million) | $90.0 million | | Net cash used in investing activities | ($20.4 million) | ($29.0 million) | | Net cash used in financing activities | ($102.0 million) | ($144.1 million) | [Segment Information](index=8&type=section&id=2.%20Segment%20Information) The company operates through four homebuilding segments and one financial services segment, with the **West Coast segment** being the largest contributor to **revenues** (**$1.26 billion**) and **pretax income** (**$145.6 million**) for the six months ended May 31, 2025 | Homebuilding Segment (Six Months Ended May 31) | Revenues 2025 | Revenues 2024 | Pretax Income 2025 | Pretax Income 2024 | | :--- | :--- | :--- | :--- | :--- | | West Coast | $1,261.8 million | $1,256.7 million | $145.6 million | $152.9 million | | Southwest | $627.0 million | $641.8 million | $114.1 million | $110.5 million | | Central | $558.6 million | $696.3 million | $46.2 million | $85.1 million | | Southeast | $464.4 million | $568.4 million | $33.3 million | $70.8 million | - **Inventory impairment** and **land option contract abandonment charges** for the six months ended May 31, 2025, totaled **$7.0 million**, a significant increase from **$2.5 million** in the prior-year period[28](index=28&type=chunk) [Financial Services](index=9&type=section&id=3.%20Financial%20Services) The **financial services segment's pretax income** decreased by **37%** to **$15.7 million** for the six months ended May 31, 2025, compared to **$24.8 million** in the prior year, driven by lower revenues and reduced equity income from the unconsolidated mortgage joint venture (KBHS) | Financial Services (Six Months Ended May 31) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $9.6 million | $14.4 million | | Equity in income of unconsolidated joint venture | $9.2 million | $13.5 million | | **Pretax Income** | **$15.7 million** | **$24.8 million** | [Inventories](index=11&type=section&id=6.%20Inventories) **Total inventories** increased to **$5.91 billion** as of May 31, 2025, up from **$5.53 billion** at November 30, 2024, primarily due to growth in **land under development** to **$3.80 billion**, with **$55.0 million** of **interest costs** capitalized | Inventory Component | May 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | Homes completed or under construction | $2,117.7 million | $1,990.1 million | | Land under development | $3,795.7 million | $3,537.9 million | | **Total** | **$5,913.3 million** | **$5,528.0 million** | [Inventory Impairments and Land Option Contract Abandonments](index=11&type=section&id=7.%20Inventory%20Impairments%20and%20Land%20Option%20Contract%20Abandonments) The company recognized no **inventory impairment charges** in the first six months of 2025 or 2024, but **land option contract abandonment charges** significantly increased to **$7.0 million** for the six months ended May 31, 2025, from **$2.5 million** in 2024 - **Land option contract abandonment charges** were **$5.6 million** for Q2 2025 and **$7.0 million** for the six months ended May 31, 2025[41](index=41&type=chunk) - **No inventory impairment charges** were recognized for the three-month and six-month periods ended May 31, 2025 and 2024[39](index=39&type=chunk) [Debt and Financing](index=18&type=section&id=14.%20Notes%20Payable) **Total notes payable** increased to **$1.89 billion** as of May 31, 2025, from **$1.69 billion** at November 30, 2024, primarily due to drawing **$200.0 million** from the **unsecured revolving credit facility**, while remaining in compliance with all **debt covenants** | Debt Instrument | May 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | Unsecured revolving credit facility | $200.0 million | $0 | | Senior unsecured term loan | $359.2 million | $358.8 million | | Senior notes | $1,330.6 million | $1,329.7 million | | **Total** | **$1,892.9 million** | **$1,691.7 million** | - As of May 31, 2025, the company had **$881.7 million** available for cash borrowings under its **$1.09 billion** credit facility[68](index=68&type=chunk) [Commitments and Contingencies](index=20&type=section&id=16.%20Commitments%20and%20Contingencies) The company faces various commitments and contingencies, including a **warranty liability** of **$97.7 million**, approximately **280 construction defect claims** in Florida, a **subpoena from the U.S. Department of Justice** regarding ENERGY STAR homes, and **Outstanding performance bonds** totaling **$1.44 billion** - The company is addressing approximately **280** outstanding claims in Florida related to Chapter 558, alleging construction defects, primarily concerning stucco and water-intrusion issues[93](index=93&type=chunk) - On October 2, 2023, the company received a **subpoena from the U.S. Department of Justice** regarding the inspection, rating, and marketing of its ENERGY STAR certified homes. The company is cooperating with the government[96](index=96&type=chunk) - As of May 31, 2025, the company had **$1.44 billion** in **outstanding performance bonds** and **$82.7 million** in letters of credit to secure project completions[94](index=94&type=chunk) [Stockholders' Equity](index=23&type=section&id=18.%20Stockholders'%20Equity) During the first half of 2025, the company **repurchased** **4.5 million shares** of its **common stock** for **$250.0 million**, with **$450.0 million** remaining available under the current **share repurchase authorization**, and paid a **quarterly cash dividend** of **$0.25 per share** in Q2 2025 - In the first half of 2025, the company **repurchased** **4,488,614 shares** for **$250.0 million**. **$450.0 million** remains authorized for future repurchases as of May 31, 2025[100](index=100&type=chunk) - A **quarterly cash dividend** of **$0.25 per share** was declared and paid in the second quarter of 2025[102](index=102&type=chunk) [Management's Discussion and Analysis (MD&A)](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported that **market conditions softened** in Q2 2025 due to housing affordability concerns and elevated mortgage rates, leading to a **13%** year-over-year decline in **net orders**, prompting a **new pricing strategy** and a downward revision of **full-year 2025 guidance** for **housing revenues** to between **$6.30 billion** and **$6.50 billion** [Overview of Operations](index=25&type=section&id=OVERVIEW) In Q2 2025, the company faced a softer market with subdued demand, resulting in **net orders** falling **13%** year-over-year to **3,460**, a **10%** decrease in Q2 **housing revenues** to **$1.52 billion**, and **diluted EPS** falling **30%** to **$1.50** - **Market conditions softened** in Q2 2025 due to housing affordability concerns, elevated mortgage rates, and weakening consumer confidence[106](index=106&type=chunk) - **Net orders** for Q2 2025 were down **13%** year-over-year to **3,460**, with a monthly net order pace per community of **4.5**, compared to **5.5** in the prior year[107](index=107&type=chunk) - A **new pricing strategy** was implemented, reducing selling prices and other homebuyer concessions to stimulate demand. This led to an **8%** decrease in the **average selling price** of **net orders** for the quarter[108](index=108&type=chunk) [Homebuilding Operations Analysis](index=26&type=section&id=HOMEBUILDING) **Homebuilding revenues** for Q2 2025 fell **10%** to **$1.52 billion**, driven by an **11%** decrease in homes delivered, with **Operating income** dropping **30%** to **$131.5 million**, and **housing gross profit margin** contracting by **180 basis points** to **19.3%**, while **ending backlog value** was down **27%** year-over-year to **$2.29 billion** | Metric (Q2) | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Homes Delivered | 3,120 | 3,523 | -11% | | Housing Gross Profit Margin | 19.3% | 21.1% | -180 bps | | Adjusted Housing Gross Profit Margin | 19.7% | 21.2% | -150 bps | | SG&A as % of Housing Revenues | 10.7% | 10.1% | +60 bps | | Metric (Q2) | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Orders | 3,460 | 3,997 | -13% | | Net Order Value | $1.61 billion | $2.03 billion | -21% | | Cancellation Rate | 16% | 13% | +3 p.p. | | Ending Backlog Value | $2.29 billion | $3.12 billion | -27% | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q2 2025 with **$1.19 billion** in **total liquidity**, including **$308.9 million** in cash and **$881.7 million** available on its credit facility, shifting capital allocation towards **share repurchases** (**$250.0 million** in H1 2025) and scaling back **land and development investments**, resulting in a **debt-to-capital ratio** increase to **32.2%** - **Total liquidity** was **$1.19 billion** at the end of Q2 2025, consisting of cash and available credit facility capacity[159](index=159&type=chunk) - The company is scaling back **land and development investments** (down **23%** YoY in Q2) while increasing **share repurchases** (**$250.0 million** in H1 2025)[111](index=111&type=chunk)[163](index=163&type=chunk) - The **debt-to-capital ratio** increased to **32.2%** at May 31, 2025, from **29.4%** at November 30, 2024, due to **$200.0 million** in borrowings under the credit facility[169](index=169&type=chunk) - **Net cash used in operating activities** was **$165.9 million** for the first six months of 2025, a reversal from **$90.0 million** provided in the prior year, mainly due to a **$390.6 million** increase in inventories[182](index=182&type=chunk) [Outlook](index=43&type=section&id=Outlook) Due to persistent soft market conditions, KB Home has revised its **2025 full-year guidance** downwards, expecting **housing revenues** between **$6.30 billion** and **$6.50 billion**, with an **average selling price** of **$480,000** to **$490,000**, and a **housing gross profit margin** of **19.0%** to **19.4%** | 2025 Full Year Guidance | Revised Projection | Prior Year (2024) | | :--- | :--- | :--- | | Housing Revenues | $6.30 billion - $6.50 billion | $6.90 billion | | Average Selling Price | $480,000 - $490,000 | $486,900 | | Housing Gross Profit Margin | 19.0% - 19.4% | 21.1% | | Ending Community Count | Approx. 250 | 258 | | Q3 2025 Guidance | Projection | Prior Year (Q3 2024) | | :--- | :--- | :--- | | Housing Revenues | $1.50 billion - $1.70 billion | $1.75 billion | | Average Selling Price | $470,000 - $480,000 | $480,900 | | Housing Gross Profit Margin | 18.1% - 18.7% | 20.7% | - The company expects to repurchase between **$100.0 million** and **$200.0 million** of its **common stock** in the **third quarter** of 2025[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its **market risk profile** since November 30, 2024, except for increased **interest rate risk exposure** due to **$200.0 million** in cash borrowings outstanding under its **variable-rate** Credit Facility as of May 31, 2025 - The **primary change in market risk** is related to the **$200.0 million** of **variable-rate debt** drawn from the Credit Facility, which is subject to interest rate fluctuations based on SOFR[213](index=213&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's **disclosure controls and procedures** and concluded they were effective as of May 31, 2025, with no material changes in **internal control over financial reporting** during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of May 31, 2025[216](index=216&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings & Risk Factors](index=47&type=section&id=Item%201.%20Legal%20Proceedings%20%26%20Item%201A.%20Risk%20Factors) The company refers to Note 17 of the financial statements for details on **legal proceedings**, and reports **no material changes to risk factors** previously disclosed in the Annual Report on Form 10-K for the year ended November 30, 2024 - For **legal proceedings**, the report refers to Note 17 in the financial statements[217](index=217&type=chunk) - **No material changes to risk factors** were reported since the last Annual Report[218](index=218&type=chunk) [Share Repurchases](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, KB Home **repurchased** **3,734,675 shares** of its **common stock** for a **Total Cost** of **$200.0 million**, with **$450.0 million** remaining available under its **board-authorized share repurchase program** as of May 31, 2025 | Period (2025) | Total Shares Purchased | Average Price Paid per Share | Total Cost | | :--- | :--- | :--- | :--- | | March | 0 | N/A | $0 | | April | 2,072,237 | $52.56 | $108.9 million | | May | 1,662,438 | $54.79 | $91.1 million | | **Q2 Total** | **3,734,675** | **$53.55** | **$200.0 million** | - As of May 31, 2025, **$450.0 million** remained available for repurchase under the existing authorization[219](index=219&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 000-06936 Commission Company Name: WD 40 CO WD-40 COMPANY (Exact name of registrant as specified in ...

[Q2 2025 Financial Performance Overview](index=1&type=section&id=Levi%20Strauss%20%26%20Co.%20Reports%20Second-Quarter%202025%20Financial%20Results) [Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) Levi Strauss & Co. reported a **strong second quarter** for 2025, with **significant growth in revenue and profitability**, driven by the success of its strategic initiatives, particularly its DTC-first model. The company demonstrated broad-based strength, leading to an **increase in its full-year financial outlook** despite anticipated tariff impacts Q2 2025 Key Performance Indicators | Metric | Q2 2025 Performance | YoY Change | | :--- | :--- | :--- | | Reported Net Revenues | **$1.4 billion** | **+6%** | | Organic Net Revenues | - | **+9%** | | Gross Margin | **62.6%** (**Record**) | **+140 bps** | | Adjusted EBIT Margin | **8.3%** | **+190 bps** | | Adjusted Diluted EPS | **$0.22** | **+37%** | - CEO Michelle Gass stated that the **strong quarter** is **clear evidence of the company's strategic agenda gaining traction**, as it **transforms into a denim lifestyle brand and a best-in-class DTC retailer**[2](index=2&type=chunk) - CFO Harmit Singh announced an **increase in the full-year revenue and EPS forecast**, attributing the company's **inflection** to a **focus on the core Levi's® brand and its DTC-first strategy**, which is creating a **higher growth and margin profile**[2](index=2&type=chunk) [Detailed Financial Performance](index=1&type=section&id=Detailed%20Financial%20Performance) The company's revenue growth was propelled by strong performance in the Americas and Europe. The Direct-to-Consumer (DTC) channel was a **key driver**, growing **11%** and now comprising **50%** of total net revenues. Gross and operating margins **expanded significantly**, benefiting from **lower product costs and favorable channel mix** Regional and Channel Growth | Region/Channel | Reported Growth | Organic Growth | | :--- | :--- | :--- | | **By Region** | | | | Americas | **+5%** | **+9%** | | Europe | **+14%** | **+15%** | | Asia | **-1%** | **0%** | | **By Channel** | | | | DTC | **+11%** | **+10%** | | Wholesale | **+3%** | **+7%** | - The Direct-to-Consumer (DTC) channel now represents **50%** of the company's total net revenues for the second quarter[3](index=3&type=chunk) - Gross margin increased by **140 basis points** to a **record 62.6%**, primarily driven by **lower product costs and a favorable channel mix**[6](index=6&type=chunk) Operating and Net Income Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Margin | **7.5%** | **1.5%** | | Adjusted EBIT Margin | **8.3%** | **6.3%** | | Net Income (Continuing Ops) | **$80 million** | **$17 million** | | Adjusted Net Income | **$89 million** | **$65 million** | | Diluted EPS (Continuing Ops) | **$0.20** | **$0.04** | | Adjusted Diluted EPS | **$0.22** | **$0.16** | [Balance Sheet and Shareholder Returns](index=3&type=section&id=Balance%20Sheet%20and%20Shareholder%20Returns) As of June 1, 2025, the company maintained a **strong liquidity position** with approximately **$1.5 billion**. It continued to return capital to shareholders, increasing its Q2 dividend payout by **8%** year-over-year and announcing a further dividend increase for Q3 2025 - The company held **$654 million** in cash and cash equivalents and maintained total liquidity of approximately **$1.5 billion**[13](index=13&type=chunk) - Total inventories saw a **15%** increase on a dollar basis compared to the previous period[13](index=13&type=chunk) - In Q2, the company returned approximately **$51 million** to shareholders via a dividend of **$0.13** per share. For Q3, the dividend has been increased to **$0.14** per share[8](index=8&type=chunk)[9](index=9&type=chunk) - The company has **$560 million** remaining under its current share repurchase authorization, with no expiration date[9](index=9&type=chunk) [Fiscal 2025 Outlook (Updated)](index=3&type=section&id=Updated%20Fiscal%202025%20Guidance) Reflecting **strong first-half performance**, Levi Strauss & Co. has **raised its full-year 2025 guidance**. The company now expects **higher net revenue growth** and has **increased its adjusted diluted EPS range**, even after factoring in a **20 basis point** impact from tariffs Fiscal 2025 Guidance Comparison | Metric | Updated FY2025 Guidance | Previous FY2025 Guidance | | :--- | :--- | :--- | | Reported Net Revenue Growth | **1%** to **2%** | (**1%**) to (**2%**) | | Organic Net Revenue Growth | **4.5%** to **5.5%** | **3.5%** to **4.5%** | | Adjusted EBIT Margin | **11.4%** to **11.6%** | Maintained | | Adjusted Diluted EPS | **$1.25** to **$1.30** | **$1.20** to **$1.25** | - The updated guidance assumes U.S. tariffs on imports from China will remain at **30%** and from the rest of the world at **10%** for the remainder of the year[10](index=10&type=chunk) [Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=9&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of June 1, 2025, total assets stood at **$6.53 billion**, a slight increase from **$6.38 billion** at the end of fiscal 2024. This was primarily due to a rise in inventories to **$1.25 billion**. Total liabilities remained stable at **$4.44 billion**, resulting in an increase in total stockholders' equity to **$2.09 billion** Consolidated Balance Sheet Highlights | Balance Sheet Item ($ millions) | June 1, 2025 | Dec 1, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | **653.6** | **690.0** | | Inventories | **1,248.9** | **1,131.3** | | **Total Assets** | **6,533.2** | **6,375.5** | | Total current liabilities | **1,979.8** | **2,010.5** | | Long-term debt | **1,033.7** | **994.0** | | **Total Liabilities** | **4,443.2** | **4,405.0** | | **Total Stockholders' Equity** | **2,090.0** | **1,970.5** | [Consolidated Statements of Income](index=11&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the second quarter of 2025, the company reported a **significant improvement in profitability**. Net revenues grew to **$1.45 billion**, driving gross profit to **$905.8 million**. Operating income surged to **$108.0 million**, and net income from continuing operations increased more than fourfold to **$79.6 million**, or **$0.20** per diluted share Consolidated Statements of Income Highlights | Income Statement Item ($ millions) | Three Months Ended June 1, 2025 | Three Months Ended May 26, 2024 | | :--- | :--- | :--- | | Net revenues | **1,446.0** | **1,358.8** | | Gross profit | **905.8** | **832.4** | | Operating income | **108.0** | **20.9** | | Net income from continuing operations | **79.6** | **17.2** | | Diluted EPS from continuing operations | **$0.20** | **$0.04** | [Consolidated Statements of Cash Flows](index=12&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first six months of fiscal 2025, net cash from operating activities was **$238.0 million**, a decrease from **$548.8 million** in the prior-year period. The company utilized **$129.7 million** for investing activities, mainly for capital expenditures, and **$152.4 million** for financing activities, including dividends and stock repurchases Consolidated Statements of Cash Flows Highlights | Cash Flow Item ($ millions) | Six Months Ended June 1, 2025 | Six Months Ended May 26, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | **238.0** | **548.8** | | Net cash used for investing activities | (**129.7**) | (**141.4**) | | Net cash used for financing activities | (**152.4**) | (**162.9**) | | Net (decrease) increase in cash | (**36.4**) | **242.6** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=13&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES) [Overview of Non-GAAP Measures](index=13&type=section&id=Overview%20of%20Non-GAAP%20Measures) The company employs non-GAAP financial measures like Adjusted EBIT, Adjusted Net Income, and Organic Net Revenues to offer investors a clearer perspective on its **core operational performance**. These metrics, which exclude items such as restructuring charges, currency impacts, and divestiture effects, are **integral to management's financial and operational decision-making** - The company uses non-GAAP measures to supplement GAAP results, providing additional information on financial performance, enhancing understanding of past performance and future prospects, and **increased transparency**[17](index=17&type=chunk)[18](index=18&type=chunk) - Key non-GAAP measures include Adjusted SG&A, Adjusted EBIT, Adjusted Net Income, Adjusted Diluted EPS, Organic Net Revenues, and Adjusted Free Cash Flow[38](index=38&type=chunk) [Reconciliation of Adjusted EBIT and Net Income](index=15&type=section&id=Reconciliation%20of%20Adjusted%20EBIT%20and%20Net%20Income) For Q2 2025, Adjusted EBIT rose **39%** to **$119.3 million** from **$86.0 million** YoY, while Adjusted Net Income increased **35%** to **$88.5 million**. The primary adjustments from GAAP figures involved excluding restructuring charges (**$6.8 million**) and related costs (**$4.5 million**) associated with the 'Project Fuel' initiative, providing a clearer view of ongoing operational profitability Adjusted EBIT and Net Income Reconciliation | Q2 2025 Reconciliation ($ millions) | GAAP Measure | Adjustments | Non-GAAP Measure | | :--- | :--- | :--- | :--- | | Operating Income / Adjusted EBIT | **108.0** | **+11.3** | **119.3** | | Net Income (Cont. Ops) / Adjusted Net Income | **79.6** | **+8.9** | **88.5** | - Key adjustments for Q2 2025 include **$6.8 million** in restructuring charges and **$4.5 million** in restructuring-related charges, primarily related to the 'Project Fuel' initiative[46](index=46&type=chunk)[51](index=51&type=chunk)[58](index=58&type=chunk) [Reconciliation of Organic Net Revenues](index=20&type=section&id=Reconciliation%20of%20Organic%20Net%20Revenues) In Q2 2025, total organic net revenue growth was **8.8%**, outpacing the reported **6.4%** growth. This performance was driven by strong organic growth in Europe (**+14.6%**) and the Americas (**+8.9%**), as well as the DTC channel (**+10.3%**). The core Levi's® brand achieved **9.1%** organic growth. The adjustments account for currency fluctuations and prior-year divestitures Q2 2025 Growth | Q2 2025 Growth | Reported | Organic | | :--- | :--- | :--- | | **Total Net Revenues** | **6.4%** | **8.8%** | | Americas | **5.1%** | **8.9%** | | Europe | **14.0%** | **14.6%** | | Asia | (**0.9%**) | **0.2%** | | Wholesale Channel | **2.7%** | **7.3%** | | DTC Channel | **10.5%** | **10.3%** | | Levi's® Brand | **7.4%** | **9.1%** | - The variance between reported and organic revenue growth is attributed to the impact of foreign currency exchange rates and the divestitures of the Denizen® and Footwear businesses in the prior year[83](index=83&type=chunk) [Other Non-GAAP Reconciliations](index=18&type=section&id=Other%20Non-GAAP%20Reconciliations) The company's trailing four-quarter Return on Invested Capital (ROIC) improved significantly to **17.7%** from **14.0%** year-over-year, indicating **more efficient capital deployment**. Adjusted Free Cash Flow for the first six months was **$131.9 million**. On a constant-currency basis, Q2 Adjusted EBIT grew **41.9%**, demonstrating **strong underlying business momentum** - Adjusted Free Cash Flow for the six months ended June 1, 2025, was **$131.9 million**, compared to **$437.0 million** in the same period last year[76](index=76&type=chunk) - Return on Invested Capital (ROIC) for the trailing four quarters increased to **17.7%** as of June 1, 2025, up from **14.0%** a year prior[81](index=81&type=chunk) Constant-Currency Growth Rates | Q2 2025 Constant-Currency Growth | YoY Growth | | :--- | :--- | | Adjusted EBIT | **41.9%** | | Adjusted Net Income | **35.3%** | | Adjusted Diluted EPS | **37.5%** |

Part I [Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The company's financial statements for the period ending June 1, 2025, reflect revenue growth and a significant increase in net income compared to the prior year, largely driven by improved gross margins and lower restructuring charges, with total assets increasing to **$6.53 billion** and the Dockers® business classified as discontinued operations [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 1, 2025, total assets were **$6.53 billion**, an increase from **$6.38 billion** at the end of fiscal 2024, driven by higher inventories and other non-current assets; total liabilities remained relatively stable at **$4.44 billion**, while total stockholders' equity increased to **$2.09 billion** from **$1.97 billion** Key Balance Sheet Items (in millions) | Balance Sheet Item | June 1, 2025 | December 1, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $653.6 | $690.0 | | Inventories | $1,248.9 | $1,131.3 | | Total current assets | $2,929.1 | $2,851.1 | | Total assets | $6,533.2 | $6,375.5 | | Long-term debt | $1,033.7 | $994.0 | | Total liabilities | $4,443.2 | $4,405.0 | | Total stockholders' equity | $2,090.0 | $1,970.5 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) For Q2 2025, net revenues increased to **$1.45 billion** from **$1.36 billion** year-over-year, with net income from continuing operations rising substantially to **$79.6 million** from **$17.2 million**, driven by higher gross profit and lower restructuring charges Income Statement Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $1,446.0 | $1,358.8 | $2,972.8 | $2,839.0 | | Gross profit | $905.8 | $832.4 | $1,853.4 | $1,702.2 | | Operating income | $108.0 | $20.9 | $299.6 | $21.5 | | Net income from continuing operations | $79.6 | $17.2 | $219.8 | $7.3 | | Net income | $67.0 | $18.0 | $202.0 | $7.3 | | Diluted EPS (Continuing Operations) | $0.20 | $0.04 | $0.55 | $0.02 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities decreased to **$238.0 million** from **$548.8 million** in the prior year, while net cash used for investing activities was **$129.7 million** and for financing activities was **$152.4 million** Cash Flow Summary - Six Months Ended (in millions) | Cash Flow Activity | June 1, 2025 | May 26, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $238.0 | $548.8 | | Net cash used for investing activities | ($129.7) | ($141.4) | | Net cash used for financing activities | ($152.4) | ($162.9) | | Net (decrease) in cash | ($36.4) | $242.6 | | Ending cash and cash equivalents | $653.6 | $641.4 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the definitive agreement to sell the Dockers® business, now a discontinued operation, the ongoing "Project Fuel" restructuring initiative, and disaggregated revenue data showing growth in the DTC channel - The company entered into a definitive agreement to sell its Dockers® business, which is now classified as discontinued operations; the transaction is expected to close in two phases, on July 31, 2025, and January 31, 2026[27](index=27&type=chunk)[47](index=47&type=chunk) - The Denizen® brand was discontinued, with the wind-down substantially complete as of March 2, 2025[27](index=27&type=chunk) - The "Project Fuel" restructuring initiative incurred charges of **$6.8 million** and **$13.5 million** for the three and six months ended June 1, 2025, respectively[72](index=72&type=chunk) - Dividends of **$0.13 per share** were declared in both January and April 2025, with a subsequent dividend of **$0.14 per share** declared for Q3 2025[85](index=85&type=chunk)[87](index=87&type=chunk) [Management's Discussion and Analysis (MD&A)](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a **6.4%** increase in Q2 2025 net revenues, driven by growth in Americas and Europe, improved gross margin to **62.6%**, and the sale of the Dockers® brand, maintaining strong liquidity of approximately **$1.5 billion** [Overview and Key Factors](index=27&type=section&id=Overview%20and%20Key%20Factors) Levi Strauss & Co., primarily driven by the Levi's® brand, is diversified across wholesale and DTC channels, with key factors including the pending Dockers® sale, the "Project Fuel" initiative, and macroeconomic pressures - The company has entered into a definitive agreement to sell its Dockers® business, which is now reported as discontinued operations[119](index=119&type=chunk) - The "Project Fuel" initiative, a multi-year global productivity plan, is underway to optimize operations and reduce costs, resulting in restructuring charges of **$6.8 million** in Q2 2025[120](index=120&type=chunk) - Key business risks include potential tariffs on products from Asia, macroeconomic pressures affecting consumer spending, foreign currency volatility, and evolving tax legislation like Pillar Two[121](index=121&type=chunk) Revenue Mix - First Six Months of 2025 | Category | % of Net Revenues | | :--- | :--- | | International Business | 57% | | Levi's® Brand | ~94% | | DTC Channel | 51% | | Wholesale Channel | 49% | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2025 net revenues grew **6.4%** to **$1.45 billion**, with gross margin expanding to **62.6%** due to lower product costs, and operating income surging to **$108.0 million** from **$20.9 million** due to revenue growth, margin expansion, and significantly lower restructuring charges Net Revenues Growth by Segment & Channel (Q2 2025 vs Q2 2024) | Segment/Channel | Reported Growth | Organic Growth | | :--- | :--- | :--- | | **Total** | **6.4%** | **8.8%** | | Americas | 5.1% | 8.9% | | Europe | 14.0% | 14.6% | | Asia | (0.9)% | 0.2% | | Beyond Yoga® | 11.9% | 11.9% | | Wholesale | 2.7% | 7.3% | | DTC | 10.5% | 10.3% | - Gross margin for Q2 2025 increased to **62.6%** from **61.3%** year-over-year, primarily due to lower product costs, favorable channel mix, and higher full-priced sales[146](index=146&type=chunk)[147](index=147&type=chunk) - SG&A expenses increased **4.6%** to **$791.0 million** in Q2 2025, but decreased as a percentage of revenue to **54.7%** from **55.7%** year-over-year[133](index=133&type=chunk)[148](index=148&type=chunk) Operating Income by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Americas | $153.3 | $126.5 | | Europe | $69.4 | $53.3 | | Asia | $29.6 | $33.9 | | Beyond Yoga® (loss) | ($4.4) | ($2.9) | | **Total Operating Income** | **$108.0** | **$20.9** | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position of approximately **$1.5 billion**, with capital allocation priorities focused on reinvestment, dividends, and share repurchases, having paid **$102.8 million** in dividends and repurchased **$30.5 million** of stock in the first half of 2025 - Total liquidity position as of June 1, 2025, was approximately **$1.5 billion**[170](index=170&type=chunk) - Capital allocation priorities are: 1) reinvestment in the business, 2) returning capital to stockholders via dividends (target **25-35%** payout ratio) and share buybacks, and 3) pursuing strategic acquisitions[168](index=168&type=chunk) - In the first six months of 2025, the company used cash for **$102.8 million** in dividend payments and **$30.5 million** in common stock repurchases[176](index=176&type=chunk) - Cash provided by operating activities decreased to **$238.0 million** for the first six months of 2025 from **$548.8 million** in the prior year, primarily due to higher spending on inventory and incentive payments[174](index=174&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBIT and Adjusted Net Income to provide a clearer view of underlying business trends, with Adjusted EBIT increasing **38.7%** to **$119.3 million** in Q2 2025 Reconciliation of Net Income to Adjusted EBIT (Q2 2025, in millions) | Metric | Amount | | :--- | :--- | | **Net income from continuing operations** | **$79.6** | | Income tax expense | $22.9 | | Interest expense | $11.8 | | Other (income) expense, net | ($6.3) | | Restructuring charges, net | $6.8 | | Restructuring related charges and other, net | $4.5 | | **Adjusted EBIT** | **$119.3** | Reconciliation of Diluted EPS to Adjusted Diluted EPS (Q2 2025) | Metric | Amount | | :--- | :--- | | **Diluted EPS from continuing operations** | **$0.20** | | Restructuring charges, net | $0.02 | | Restructuring related charges and other, net | $0.01 | | Tax impact of adjustments | ($0.01) | | **Adjusted diluted EPS** | **$0.22** | - Organic net revenues, which exclude currency impacts and divestitures, grew **8.8%** in Q2 2025, compared to reported growth of **6.4%**[225](index=225&type=chunk) [Market Risk Disclosures](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's primary market risk exposures or their management since the 2024 Annual Report on Form 10-K disclosures - There have been no material changes in primary market risk exposures from the information disclosed in the 2024 Annual Report on Form 10-K[254](index=254&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 1, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 1, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[255](index=255&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[256](index=256&type=chunk) Part II [Legal Proceedings & Risk Factors](index=55&type=section&id=Item%201.%20Legal%20Proceedings%20%26%20Item%201A.%20Risk%20Factors) The company is involved in various ordinary course legal proceedings not expected to have a material impact, and there have been no material changes to previously disclosed risk factors - The company does not believe any pending claims, complaints, and legal proceedings will have a material impact on its financial condition, results of operations, or cash flows[258](index=258&type=chunk) - There have been no material changes to the company's previously reported Risk Factors[259](index=259&type=chunk) [Share Repurchases and Equity Sales](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during Q2 2025, with **$560.4 million** remaining under the share repurchase authority as of July 3, 2025, and no unregistered sales of equity securities occurred - No shares were repurchased during the second quarter of 2025[262](index=262&type=chunk) - The remaining share repurchase authority was **$560.4 million** as of July 3, 2025[262](index=262&type=chunk)

SAN DIEGO — July 10, 2025 — WD-40 Company (NASDAQ:WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its third fiscal quarter ended May 31, 2025. Third Quarter Highlights and Summary: "Today we reported third quarter net sales of $156.9 million — a new record high for net sales in a quarter — reflecting a modest 1 percent year-ove ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to COMMISSION FILE NUMBER 000-22793 PriceSmart, Inc. (Exact name of registrant as specified in its charter) (858) 404-8800 (Registrant's telephon ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38426 SENMIAO TECHNOLOGY LIMITED (Exact name of registrant as specified in its charter) | Nevada | 35-2600898 | | --- | --- | | (State or other juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________ FORM 10-Q _______________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 001 ...

Pure Cycle Announces Financial Results For the Three and Nine Months Ended May 31, 2025 DENVER, CO / ACCESSWIRE / July 9, 2025 – Pure Cycle Corporation (NASDAQ Capital Market: PCYO) announced its financial results for the three and nine months ended May 31, 2025. Pure Cycle reported $2.3M of net income for the three months ended May 31, 2025, which marks our twenty-fourth consecutive fiscal quarter with positive net income. Pure Cycle is continuing to develop its Sky Ranch Master Planned Community, despite ...

[Agreement Overview](index=1&type=section&id=Agreement%20and%20Plan%20of%20Merger) This section introduces the parties involved and the fundamental structure of the merger agreement, establishing WK Kellogg Co as a wholly-owned subsidiary of Ferrero International S.A. [Parties to the Agreement](index=1&type=section&id=Parties%20to%20the%20Agreement) This Agreement and Plan of Merger, dated July 10, 2025, is among Ferrero International S.A. ('Parent'), its wholly-owned subsidiary Frosty Merger Sub, Inc. ('Merger Sub'), and WK Kellogg Co ('Company'). The agreement outlines the terms for the merger of Merger Sub with and into the Company, with the Company surviving as a wholly-owned subsidiary of the Parent. - The agreement details the merger where WK Kellogg Co will become a **wholly-owned indirect subsidiary of Ferrero International S.A.**[7](index=7&type=chunk) - The Board of Directors for all parties (Company, Parent, and Merger Sub) have **approved the merger agreement**[9](index=9&type=chunk)[10](index=10&type=chunk) - Concurrently, key stockholders including the W.K. Kellogg Foundation Trust have entered into a Voting Agreement to vote in favor of the merger[11](index=11&type=chunk) [Definitions & Interpretations](index=6&type=section&id=ARTICLE%20I%20DEFINITIONS%20%26%20INTERPRETATIONS) This section defines critical terms such as "Company Material Adverse Effect," "Acquisition Proposal," and "Superior Proposal," which govern key aspects of the merger agreement. [Key Definitions](index=6&type=section&id=1.1%20Certain%20Definitions) This section provides definitions for key terms used throughout the merger agreement. Critical definitions include 'Company Material Adverse Effect,' which outlines events that would negatively impact the company's business, with specific carve-outs for general economic conditions, industry trends, and impacts from the merger announcement itself. It also defines 'Acquisition Proposal' and 'Superior Proposal,' which are central to the 'no-solicitation' clauses and the board's ability to change its recommendation. - **Acquisition Proposal:** An offer from a third party for a transaction involving more than **20%** of the Company's stock, assets, net revenue, or net income[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - **Superior Proposal:** An Acquisition Proposal (with the threshold raised to **50%**) that the Company Board determines in good faith to be more favorable to stockholders from a financial point of view than the current merger agreement[95](index=95&type=chunk) - **Company Material Adverse Effect (MAE):** Defines a material adverse effect on the business, but excludes various factors such as general economic or industry conditions, political events, impacts from the agreement's announcement, and changes in stock price, unless they disproportionately affect the Company compared to its peers[31](index=31&type=chunk)[32](index=32&type=chunk) - **Tax-Free Status of the Transactions:** Refers to the tax status of the prior separation and distribution transaction involving Kellanova, which must not be negatively affected by this merger[97](index=97&type=chunk)[98](index=98&type=chunk) [The Merger](index=26&type=section&id=ARTICLE%20II%20THE%20MERGER) This section details the mechanics of the merger, including the cash consideration for common stock, the treatment of various equity awards, and the procedures for payment and share exchange. [Merger Mechanics and Structure](index=26&type=section&id=2.1%20The%20Merger) This section outlines the fundamental mechanics of the transaction. Upon closing, Merger Sub will merge with and into the Company. The Company will continue as the surviving corporation and become a wholly-owned subsidiary of the Parent. The merger becomes effective upon the filing of a Certificate of Merger with the Secretary of State of Delaware. Following the merger, the directors of Merger Sub will become the directors of the Surviving Corporation, while the officers of the Company will remain. - Merger Sub will merge into the Company, with the Company surviving as the 'Surviving Corporation' and a **wholly-owned subsidiary of Parent**[118](index=118&type=chunk) - The merger's closing will occur no later than the **fifth business day** after all conditions in Article VII are satisfied or waived[120](index=120&type=chunk) - Post-merger, the certificate of incorporation and bylaws will be amended and restated as per Exhibits A and B[121](index=121&type=chunk)[122](index=122&type=chunk) [Consideration for Capital Stock](index=27&type=section&id=2.7%20Ef%20ect%20on%20Capital%20Stock) This section details the consideration stockholders will receive. Each share of WK Kellogg Co common stock will be converted into the right to receive a cash payment of $23.00 per share. Shares held by the Company as treasury stock or owned by Parent or its subsidiaries will be canceled without payment. Stockholders who properly exercise their appraisal rights under Delaware law will be entitled to the fair value of their shares as determined by the court. Merger Consideration | Security | Consideration per Share | | :--- | :--- | | Company Common Stock | $23.00 in cash | - Shares held by the Company, Parent, or Merger Sub (Owned Company Shares) will be **canceled without any consideration**[125](index=125&type=chunk) - Dissenting Company Shares, held by stockholders who perfect appraisal rights under Section 262 of the DGCL, will not be converted into the Per Share Price but will be entitled to payment of fair value[129](index=129&type=chunk) [Treatment of Equity Awards](index=29&type=section&id=2.8%20Treatment%20of%20Equity%20Awards) This section specifies the treatment of the Company's outstanding equity awards. Vested Restricted Stock Units (RSUs) and Deferred Share Units (DSUs) will be canceled and converted into a cash payment equal to the per-share merger price. Unvested RSUs will be converted into cash awards that maintain their original vesting schedules. Performance Stock Units (PSUs) will be converted into cash awards based on a 140% of target achievement level, payable at the end of the original performance period, subject to continued service. The Employee Stock Purchase Plan (ESPP) will be terminated, with a final purchase occurring just before the merger. - **Vested RSUs & DSUs:** Canceled and converted into the right to receive cash equal to the **$23.00 Per Share Price** multiplied by the number of shares[130](index=130&type=chunk)[136](index=136&type=chunk) - **Unvested RSUs:** Canceled and converted into a contingent cash award equal to the Per Share Price, subject to the same vesting terms as the original RSU[132](index=132&type=chunk) - **Company PSUs:** Canceled and converted into a contingent cash award based on **140% of target achievement**, payable on the original vesting date subject to continued service[134](index=134&type=chunk) - **Company ESPP:** No new offering periods will commence, the current period will have a final exercise date immediately prior to the Effective Time, and the plan will terminate[139](index=139&type=chunk) [Payment and Exchange Procedures](index=32&type=section&id=2.9%20Exchange%20of%20Certificates) This section details the process for stockholders to receive their merger consideration. Parent will appoint a Payment Agent and deposit sufficient funds to pay all stockholders. Holders of stock certificates will receive a letter of transmittal to surrender their certificates in exchange for the cash payment. Holders of uncertificated shares will receive payment automatically upon an 'agent's message' to the Payment Agent. Any funds remaining with the Payment Agent one year after the merger will be returned to Parent. - Parent will appoint a nationally recognized bank or trust company as the 'Payment Agent' to handle the exchange of shares for cash[142](index=142&type=chunk) - At the Effective Time, Parent will deposit the aggregate merger consideration into a 'Payment Fund' with the Payment Agent[143](index=143&type=chunk) - Any portion of the Payment Fund that remains undistributed **one year** after the Effective Time will be delivered to Parent, and stockholders must thereafter claim their payment from Parent[149](index=149&type=chunk) [Representations and Warranties of the Company](index=35&type=section&id=ARTICLE%20III%20REPRESENTATIONS%20AND%20WARRANTIES%20OF%20THE%20COMPANY) This section outlines the Company's assurances regarding its capitalization, financial statements, internal controls, absence of material adverse changes, tax matters, and engagement of financial advisors. [Company Capitalization](index=37&type=section&id=3.7%20Capitalization) This section provides a snapshot of the Company's capital structure as of July 7, 2025. It details the authorized and outstanding shares of common and preferred stock, as well as the number of shares reserved for issuance under various equity compensation plans. Capitalization as of July 7, 2025 | Security Type | Number | | :--- | :--- | | **Common Stock Issued & Outstanding** | **86,411,497.471** | | Preferred Stock Issued & Outstanding | 0 | | Treasury Shares | 0 | | Shares subject to outstanding RSUs | 3,231,551 | | Shares subject to outstanding PSUs (at 140% target) | 1,686,353 | | Shares subject to outstanding DSUs | 28,864 | [Financial Statements and Internal Controls](index=40&type=section&id=3.10%20Company%20Financial%20Statements%3B%20Internal%20Controls) The Company represents that its consolidated financial statements filed with the SEC were prepared in accordance with GAAP and fairly present its financial position. It also confirms the establishment and maintenance of effective disclosure controls, procedures, and internal controls over financial reporting as required by the Sarbanes-Oxley Act, with no identified material weaknesses or significant deficiencies. - The Company's consolidated financial statements fairly present its financial position in all material respects and were prepared in accordance with GAAP[177](index=177&type=chunk) - The Company maintains effective 'disclosure controls and procedures' and 'internal control over financial reporting' as defined under the Exchange Act[178](index=178&type=chunk) - No material weaknesses or significant deficiencies in internal controls have been identified, and no fraud involving management has been discovered[179](index=179&type=chunk)[180](index=180&type=chunk) [Absence of Certain Changes](index=41&type=section&id=3.12%20Absence%20of%20Certain%20Changes) The Company represents that since the date of its last audited balance sheet (December 28, 2024), it has conducted its business in the ordinary course in all material respects. Furthermore, it confirms that no event has occurred that would reasonably be expected to have a Company Material Adverse Effect. - Since December 28, 2024, the business has been conducted in the ordinary course in all material respects[182](index=182&type=chunk) - Since December 28, 2024, there has not been any change, event, or occurrence that has had or would reasonably be expected to have a Company Material Adverse Effect[183](index=183&type=chunk) [Tax Matters](index=45&type=section&id=3.18%20Tax%20Matters) The Company makes several representations regarding its tax status and compliance. Key among these is the assertion that it knows of no fact or circumstance that would cause the merger to negatively affect the 'Tax-Free Status' of its prior separation and distribution from Kellanova. It also confirms compliance with tax filing, payment, and withholding obligations, and states that representations made to tax authorities and counsel for the prior spin-off were accurate. - The Company represents that it is not aware of any fact or circumstance that would reasonably be expected to cause the merger to affect the Tax-Free Status of the prior Separation Transactions with Kellanova[210](index=210&type=chunk) - The Company confirms that representations made in its 'Company Signing Representation Letter' for tax purposes are true, complete, and accurate[211](index=211&type=chunk) - The Company and its subsidiaries have complied in all material respects with the Tax Matters Agreement from the spin-off and are not aware of any pending indemnification claims related to the tax-free status of that transaction[218](index=218&type=chunk)[219](index=219&type=chunk) [Brokers](index=53&type=section&id=3.26%20Brokers) The Company represents that it has not retained any financial advisor, broker, or finder entitled to a fee in connection with the merger, other than Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC. - The Company's financial advisors for this transaction are **Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC**[246](index=246&type=chunk) [Representations and Warranties of Parent and Merger Sub](index=55&type=section&id=ARTICLE%20IV%20REPRESENTATIONS%20AND%20WARRANTIES%20OF%20PARENT%20AND%20MERGER%20SUB) This section provides Parent's and Merger Sub's assurances concerning their financial capacity, solvency post-merger, and the transaction's impact on the Company's prior tax-free spin-off. [Sufficiency of Funds](index=57&type=section&id=4.9%20Suf%20iciency%20of%20Funds) Parent represents that it has, and will have at closing, sufficient immediately available funds to consummate the transaction. This includes funds to pay the merger consideration, repay Company indebtedness, and cover all related fees and expenses. Crucially, Parent and Merger Sub acknowledge that their obligation to close the deal is not conditioned on the receipt or availability of any financing. - Parent has sufficient funds to complete the transaction and pay all related costs[264](index=264&type=chunk) - The obligation to consummate the merger is **not subject to any financing condition**[264](index=264&type=chunk) [Solvency](index=57&type=section&id=4.12%20Solvency) Parent represents that, after giving effect to the merger and all related payments, the Surviving Corporation will be solvent. This means its assets will exceed its liabilities, it will not have unreasonably small capital for its business, and it will be able to pay its debts as they mature. - Parent asserts that the Surviving Corporation will be **solvent** immediately following the merger[267](index=267&type=chunk) - The transaction is not being made with the intent to hinder, delay, or defraud creditors[268](index=268&type=chunk) [Parent Tax Matters](index=59&type=section&id=4.15%20Tax%20Matters) Similar to the Company's representation, Parent and Merger Sub represent that they know of no fact, agreement, or plan that would reasonably be expected to cause the merger to negatively affect the 'Tax-Free Status' of the Company's prior separation from Kellanova. - Parent and Merger Sub are not aware of any fact or circumstance that would jeopardize the tax-free status of the Company's prior spin-off transaction[272](index=272&type=chunk) [Interim Operations of the Company](index=60&type=section&id=ARTICLE%20V%20INTERIM%20OPERATIONS%20OF%20THE%20COMPANY) This section specifies the Company's obligations and restrictions on its business conduct between the signing of the agreement and the merger's closing, including a "no-solicitation" clause. [Affirmative Obligations (Conduct of Business)](index=60&type=section&id=5.1%20Af%20irmative%20Obligations) During the interim period between signing and closing, the Company covenants to use commercially reasonable efforts to conduct its business in the ordinary course. This includes preserving its assets, material contracts, and significant commercial relationships, and making capital expenditures in line with its agreed-upon budget. - The Company must conduct its business in all material respects in the **ordinary course**[279](index=279&type=chunk) - The Company must use commercially reasonable efforts to preserve its material assets, contracts, and business relationships[279](index=279&type=chunk) [Forbearance Covenants (Negative Covenants)](index=60&type=section&id=5.2%20Forbearance%20Covenants) This section lists specific actions the Company is prohibited from taking during the interim period without Parent's prior written consent. These restrictions are designed to prevent significant changes to the business before the merger closes. Key prohibitions include amending organizational documents, issuing new securities, paying unapproved dividends, incurring significant debt, making large acquisitions or capital expenditures beyond the budget, and making material changes to employee compensation or benefits. - Prohibited from issuing, selling, or delivering any new Company securities, with exceptions for existing equity award settlements[281](index=281&type=chunk) - Prohibited from declaring or paying dividends, except for regular quarterly cash dividends in accordance with past practice and subject to disclosed limitations[281](index=281&type=chunk) - Prohibited from incurring new indebtedness, with exceptions for ordinary course borrowings under existing credit facilities[281](index=281&type=chunk) - Prohibited from making material changes to employee compensation, benefits, or hiring senior-level employees without consent[282](index=282&type=chunk) - Prohibited from making, changing, or revoking any material tax elections or settling material tax liabilities[282](index=282&type=chunk) [No Solicitation of Alternative Transactions](index=64&type=section&id=5.3%20No%20Solicitation) This section contains the 'no-shop' provision, which prohibits the Company from soliciting or negotiating alternative acquisition proposals. However, it includes a 'fiduciary out' allowing the Company Board to engage with an unsolicited proposal if it determines it constitutes or could lead to a 'Superior Proposal' and that failing to do so would be inconsistent with its fiduciary duties. If the Board decides to change its recommendation or terminate the agreement for a Superior Proposal, it must provide Parent with a notice period (typically 5 business days) to match the offer. - The Company is prohibited from soliciting, initiating, or knowingly encouraging any Acquisition Proposal[285](index=285&type=chunk) - The Company must cease all existing discussions with other parties regarding potential acquisitions[286](index=286&type=chunk) - A 'fiduciary out' exists, allowing the Board to engage with an unsolicited offer if it is or could reasonably lead to a 'Superior Proposal'[287](index=287&type=chunk) - Before changing its recommendation for a Superior Proposal, the Company must give Parent a **5-business-day** 'Acquisition Proposal Notice Period' to negotiate and potentially improve its offer, any material change to the competing offer requires a new **3-business-day** notice period[291](index=291&type=chunk) [Additional Covenants](index=69&type=section&id=ARTICLE%20VI%20ADDITIONAL%20COVENANTS) This section covers various commitments from both parties, including efforts to secure antitrust approvals, SEC filings, cooperation for financing, and provisions for director and officer indemnification and employee matters. [Antitrust and Regulatory Approvals](index=70&type=section&id=6.2%20Antitrust%20and%20Regulatory%20Matters) Both parties agree to use their reasonable best efforts to obtain all necessary antitrust and regulatory approvals. They must file the HSR Notification and Report Form within 25 business days and other required antitrust filings within 20 business days. Parent is responsible for all filing fees. The agreement specifies that Parent is not required to agree to any divestitures, hold separate orders, or other remedies to secure approval. Parent is obligated to oppose any legal challenges to the merger by a governmental authority, including through litigation and appeals. - Parties must file HSR Act notifications within **25 business days** of the agreement date[304](index=304&type=chunk) - Parent and Merger Sub must use reasonable best efforts to obtain all antitrust clearances[306](index=306&type=chunk) - However, Parent is not required to offer or agree to the sale, divestiture, or disposition of any assets or businesses of either Parent or the Company to secure regulatory approval[306](index=306&type=chunk) [Proxy Statement and SEC Filings](index=73&type=section&id=6.3%20Proxy%20Statement%20and%20Other%20Required%20SEC%20Filings) The Company is responsible for preparing and filing a preliminary proxy statement with the SEC as promptly as reasonably practicable, but no later than 20 business days after the agreement date. The Company must include the Board's recommendation in the proxy statement. Both parties must cooperate in preparing the filing and ensure the information provided is accurate. - The Company will prepare and file the preliminary Proxy Statement with the SEC no later than **20 business days** after the agreement date[312](index=312&type=chunk) - The Company must use reasonable best efforts to disseminate the final Proxy Statement to stockholders within **four business days** after SEC clearance[318](index=318&type=chunk) [Financing Cooperation](index=75&type=section&id=6.6%20Financing%20Cooperation) The Company agrees to use commercially reasonable efforts to provide customary cooperation for Parent to arrange its debt financing for the transaction. This includes making senior management available for meetings, assisting with the preparation of marketing materials, and providing required financial information. Parent will reimburse the Company for all reasonable out-of-pocket costs incurred in this cooperation and will indemnify the Company against any liabilities arising from it. - The Company must provide commercially reasonable efforts to cooperate with Parent's debt financing efforts[323](index=323&type=chunk) - Cooperation includes causing senior management to participate in meetings and assisting with the preparation of bank information memoranda[323](index=323&type=chunk)[324](index=324&type=chunk) - The Company is required to furnish the 'Required Financing Information,' which includes audited financials for fiscal years **2023 and 2024** and subsequent unaudited quarterly financials[87](index=87&type=chunk)[324](index=324&type=chunk) - Parent must reimburse the Company for reasonable out-of-pocket expenses and indemnify the Company for liabilities related to this cooperation[333](index=333&type=chunk)[334](index=334&type=chunk) [D&O Indemnification and Insurance](index=81&type=section&id=6.10%20Directors'%20and%20Of%20icers'%20Exculpation%2C%20Indemnification%20and%20Insurance) Parent agrees to honor all existing indemnification obligations for the Company's current and former directors and officers. For six years post-merger, the Surviving Corporation's organizational documents must contain indemnification provisions at least as favorable as the Company's current ones. The Company is required to purchase a six-year 'tail' policy for its directors' and officers' (D&O) liability insurance, with a premium not to exceed 300% of the current annual premium. - Parent and the Surviving Corporation will honor all indemnification agreements for current and former directors and officers ('Indemnified Persons') for **six years** post-merger[341](index=341&type=chunk)[342](index=342&type=chunk) - The Company will purchase a **six-year** prepaid 'tail' D&O insurance policy with coverage equivalent to the current policy[344](index=344&type=chunk) - The aggregate cost for the tail policy shall not exceed **300%** of the last full fiscal year's annual premium[344](index=344&type=chunk) [Employee Matters](index=83&type=section&id=6.11%20Employee%20Matters) Parent commits to certain protections for Company employees who continue employment after the merger ('Continuing Employees'). For a 12-month 'Continuation Period,' Parent will provide base salary, target cash incentive opportunities, and severance benefits that are no less favorable than what employees had before the merger. Target long-term incentive opportunities will also be no less favorable, though they can be substituted with cash. The agreement also details the handling of annual bonuses for the year prior to and the year of the closing. - For a **12-month** 'Continuation Period' post-closing, Continuing Employees will receive compensation and benefits that are generally comparable to their pre-merger arrangements[350](index=350&type=chunk) - Specifically, base salary, target short-term cash incentive opportunities, and severance benefits will be no less favorable[350](index=350&type=chunk) - Continuing Employees will receive credit for their service with the Company for purposes of vesting and eligibility in new benefit plans[353](index=353&type=chunk) - Unless directed otherwise by Parent, the Company will terminate its 401(k) plan immediately prior to the Effective Time[356](index=356&type=chunk) [Conditions to the Merger](index=88&type=section&id=ARTICLE%20VII%20CONDITIONS%20TO%20THE%20MERGER) This section enumerates the prerequisites that must be satisfied or waived for the merger to close, covering mutual conditions and those specific to Parent and Merger Sub. [Mutual Conditions to Closing](index=88&type=section&id=7.1%20Conditions%20to%20Each%20Party's%20Obligations%20to%20Ef%20ect%20the%20Merger) This section lists the conditions that must be met for both parties to be obligated to close the merger. These include obtaining the required stockholder approval, the expiration or termination of waiting periods under HSR and other specified antitrust laws, and the absence of any law or court order prohibiting the transaction. - The Company must have obtained the Requisite Stockholder Approval[373](index=373&type=chunk) - Antitrust waiting periods under the HSR Act and in other specified jurisdictions must have expired or been terminated[374](index=374&type=chunk) - There must be no law or final, non-appealable court order prohibiting the merger[375](index=375&type=chunk) - A key condition from the Tax Matters Agreement related to the prior spin-off must be waived pursuant to the Waiver Agreement[376](index=376&type=chunk) [Conditions to Parent's and Merger Sub's Obligations](index=89&type=section&id=7.2%20Conditions%20to%20the%20Obligations%20of%20Parent%20and%20Merger%20Sub%20to%20Ef%20ect%20the%20Merger) This section outlines the conditions that must be satisfied for Parent and Merger Sub to be obligated to close. These include the accuracy of the Company's representations and warranties, the Company's performance of its covenants, the absence of a Company Material Adverse Effect since the agreement date, and the receipt of a closing tax opinion regarding the prior spin-off transaction. - The Company's representations and warranties must be true and correct as of the closing date, subject to specified materiality standards[377](index=377&type=chunk) - The Company must have performed its covenants in all material respects[378](index=378&type=chunk) - No Company Material Adverse Effect shall have occurred since the date of the agreement[379](index=379&type=chunk) - Parent must have received the Parent Closing US Tax Opinion, confirming the merger will not affect the tax-free status of the prior spin-off, subject to certain exceptions[381](index=381&type=chunk)[382](index=382&type=chunk) [Termination](index=91&type=section&id=ARTICLE%20VIII%20TERMINATION) This section defines the circumstances under which the merger agreement can be terminated and specifies the associated termination fees payable by either the Company or Parent. [Termination Rights](index=91&type=section&id=8.1%20Termination) This article specifies the circumstances under which the merger agreement can be terminated. Termination can occur by mutual consent, if the merger is not completed by the 'Termination Date' (initially January 10, 2026, with a possible extension to July 10, 2026 for antitrust reasons), if stockholder approval is not obtained, or due to a legal prohibition. Parent can terminate if the Company's board changes its recommendation or for an uncured breach by the Company. The Company can terminate for an uncured breach by Parent or to accept a Superior Proposal, provided it pays the termination fee. - The agreement can be terminated by either party if the merger hasn't closed by the Termination Date of **January 10, 2026**, extendable to **July 10, 2026**, if regulatory approvals are pending[387](index=387&type=chunk) - Parent can terminate if the Company Board effects a 'Company Board Recommendation Change'[388](index=388&type=chunk) - The Company can terminate to enter into an agreement for a 'Superior Proposal', provided it has complied with the no-solicitation clause and pays the Company Termination Fee[388](index=388&type=chunk) [Termination Fees and Expenses](index=93&type=section&id=8.3%20Fees%20and%20Expenses) This section details the termination fees payable under certain conditions. The Company would owe a termination fee if the agreement is terminated under specific circumstances, such as the board changing its recommendation or accepting a superior proposal. Parent would owe a larger termination fee if the agreement is terminated due to the failure to obtain required antitrust approvals. These fees are presented as the sole and exclusive remedy for the specified termination events, though liability for a 'Willful and Material Breach' is preserved. Termination Fees | Fee | Amount | Payable By | Conditions | | :--- | :--- | :--- | :--- | | **Company Termination Fee** | **$73,543,400** | Company | Payable to Parent if terminated for a Board Recommendation Change, accepting a Superior Proposal, or under certain other conditions followed by the Company entering into an alternative transaction within 12 months | | **Parent Termination Fee** | **$105,062,000** | Parent | Payable to the Company if terminated due to failure to obtain antitrust approval | - Upon payment, the applicable termination fee is the sole and exclusive remedy for the receiving party, except for enforcement of confidentiality, certain expenses, and specific performance rights[398](index=398&type=chunk)[401](index=401&type=chunk) - Termination of the agreement does not relieve any party from liability for a 'Willful and Material Breach' prior to termination[391](index=391&type=chunk) [General Provisions](index=96&type=section&id=ARTICLE%20IX%20GENERAL%20PROVISIONS) This section addresses standard contractual clauses, including remedies for breach, specific performance rights, the governing law, and jurisdiction for dispute resolution. [Remedies and Specific Performance](index=99&type=section&id=9.8%20Remedies) This section establishes that remedies are cumulative. It explicitly states that the parties are entitled to seek specific performance and injunctions to prevent breaches of the agreement, acknowledging that monetary damages would be an inadequate remedy. The parties agree not to object to the granting of such equitable relief and waive any requirement for the posting of a bond. - Parties agree that irreparable damage would occur if the agreement is not performed, and that monetary damages are not an adequate remedy[418](index=418&type=chunk) - Parties are entitled to seek an injunction, specific performance, and other equitable relief to prevent breaches and enforce the terms of the agreement[418](index=418&type=chunk) [Governing Law and Jurisdiction](index=100&type=section&id=9.9%20Governing%20Law) The agreement and any related legal actions will be governed by the laws of the State of Delaware, without regard to its conflict of law principles. The parties consent to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or other state or federal courts within Delaware if necessary) for any disputes arising from the agreement. A separate provision establishes that any disputes involving debt financing sources will be governed by the law specified in the financing documents. - The agreement is governed by the laws of the **State of Delaware**[420](index=420&type=chunk) - The parties submit to the exclusive jurisdiction of the **Delaware Court of Chancery** for any disputes[423](index=423&type=chunk) - All parties irrevocably waive any right to a trial by jury for any controversy arising from the agreement[426](index=426&type=chunk)