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.

During the three months ended June 27, 2026, an advisory jury returned a verdict in favor of the Company in connection with a long-standing legal matter. As of the date of issuance of the financial statements, final judgment has not been entered by the court, and significant uncertainty remains regarding the ultimate recovery, including the timing, amount and collectability of any proceeds that may be received. Accordingly, the Company has not recognized a gain or recorded a receivable related to this matter in the accompanying financial statements.

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 $13.7 million and $14.4 million at June 27, 2026 and September 27, 2025, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both June 27, 2026 and September 27, 2025, we had outstanding letters of credit totaling $14.8 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 27, 2026 and September 27, 2025 was $1.9 million and $2.2 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 nine months ended June 27, 2026, we recorded $0.3 million of fire-related costs, and we recognized a gain of $2.0 million for insurance proceeds received in excess of operational losses recognized, in cost of goods sold in the Consolidated Statement of Earnings. Additionally, in the nine months ended June 27, 2026, we recognized a gain of $0.8 million for insurance proceeds received for damage to property, plant, and equipment in the Consolidated Statement of Earnings and we received $3.1 million of insurance proceeds for inventory, fixed asset replacement costs, and business interruption losses. During the three months ended June 27, 2026, no additional fire-related costs or gains were recognized and no insurance proceeds were received.

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 , and we recognized a gain of $0.8 million for insurance proceeds received in excess of operational losses recognized, in cost of goods sold in the Consolidated Statement of Earnings. Additionally, in the three and nine months ended June 28, 2025, we recognized a gain of $10.6 million for insurance proceeds received for damage to property, plant, and equipment in the Consolidated Statement of Earnings and 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 recorded through June 27, 2026 were $17.5 million, for all of which recovery has been received. Cumulative insurance proceeds received as of June 27, 2026 were $34.7 million for inventory, fixed asset replacement costs, and business interruption losses.

See below for a roll forward of the insurance receivable, net of advanced proceeds received for other fire-related costs for which recovery was deemed probable in the Consolidated Balance Sheet for the three and nine months ended June 27, 2026 and June 28, 2025.