We are a party to litigation which has arisen in the normal course of business which management currently believes will not have a material adverse effect on our financial condition or results of operations.

We self-insure, up to loss limits, certain insurable risks such as workers’ compensation, automobile, and general liability claims. Accruals for claims under our self-insurance program are recorded on a claims incurred basis. Our total recorded liability for all years’ claims incurred but not yet paid was $16.4 million and $15.3 million at June 28, 2025 and September 28, 2024, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both June 28, 2025 and September 28, 2024, we had outstanding letters of credit totaling $12.3 million.

We have a self-insured medical plan which covers approximately 1,800 of our employees. We record a liability for incurred but not yet reported or paid claims based on our historical experience of claim payments and a calculated lag time period. Our recorded liability at June 28, 2025 and September 28, 2024 was $1.7 million and $1.6 million, respectively.

On August 19, 2024, we experienced a fire at our Holly Ridge plant in North Carolina. The building was damaged as a result of the fire, and plant operations were interrupted. We maintain property, general liability and business interruption insurance coverage. Based on the provisions of our insurance policies, we record estimated insurance recoveries for fire related costs for which recovery is deemed to be probable.

In the three months ended September 28, 2024, we recorded $6.8 million of fire related costs, for all of which recovery was deemed to be probable, and we received $5.0 million of insurance proceeds for inventory, fixed asset losses, and other fire related costs. Additionally, we recorded an insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable of $1.8 million, which was recorded in prepaid expenses and other, in the Consolidated Balance Sheet as of September 28, 2024.

In the three and nine months ended June 28, 2025, we recorded an additional $0.3 million and $10.4 million of fire related costs, respectively, for all of which recovery was deemed to be probable. In the three and nine months ended June 28, 2025, we received $21.1 million and $23.6 million of insurance proceeds, respectively, for inventory, fixed asset replacement costs, and business interruption losses.

Cumulative fire related costs through June 28, 2025 were $17.2 million, for all of which insurance proceeds have been received. Cumulative Insurance proceeds as of June 28, 2025 were $28.6 million for inventory, fixed asset replacement costs, and business interruption losses. Of the $28.6 million insurance proceeds received through June 28, 2025, $10.6 million was recognized in the three- and nine-month periods ended June 28, 2025, representing gains on insurance proceeds received for damage to property, plant, and equipment. Additionally, for the nine-month period ended June 28, 2025, we recorded a gain of $0.8 million in cost of goods sold in the Consolidated Statement of Earnings representing the proceeds received in excess of operating losses recognized. No such gain was recognized in the three-month period ended June 28, 2025. There was no insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable in the Consolidated Balance Sheet as of June 28, 2025.