Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is segregated into four sections, including:

Executive overview - provides a summary of our operating performance and cash flows, industry trends, and our strategic initiatives.

Critical accounting estimates - describes the accounting areas where management makes critical estimates to report our financial condition and results of operations.

Liquidity, capital resources and financial position - an analysis of cash flow, contractual obligations, and certain other matters affecting the company's financial position.

Business process improvement consulting costs $ 33,169 $ 31,293 Note 2 Plant closure costs and impairment of assets

Acquisition-related costs are recorded in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income.

Impact of the Inflationary Economic Environment, Other Macroeconomic Factors, and COVID-19 on Our Business

We continue to monitor the impact of the inflationary economic environment, supply chain disruptions, labor shortages, the conflict between Russia and Ukraine, and the COVID-19 pandemic on our business as further discussed in Item 1., Business, of this Form 10-K.

Summary of Operating Results, Cash Flows and Financial Condition:

During the second quarter of Fiscal 2022, we invested $9.0 million in Base Culture, a Clearwater, Florida-based company with one manufacturing facility. Base Culture's product offerings include better-for-you, gluten-free, and grain-free sliced breads and baked goods and are all-natural, 100% Paleo-certified, kosher-certified, dairy-free, soy-free, and non-GMO verified.

The company sponsors a defined benefit pension plan for union employees, Plan No. 2, and a frozen nonqualified plan covering former Tasty executives.

Consolidated Results - Fiscal 2022 compared to Fiscal 2021

The company's results of operations, expressed as a percentage of sales, are set forth below for Fiscal 2022 and Fiscal 2021:

NM - the computation is not meaningful

Percentages may not add due to rounding.

(The table above presents certain sales by category that have been reclassified from amounts previously reported to conform to the current period presentation.)

The change in sales was attributable to the following:

* Computations above are calculated as follows: Price/Mix $ = Current fiscal year units x change in price per unit Price/Mix % = Price/Mix $ ÷ Prior fiscal year Sales $

Volume $ = Prior fiscal year price per unit x change in units Volume % = Volume $ ÷ Prior fiscal year Sales $

Materials, Supplies, Labor, and Other Production Costs (exclusive of depreciation and amortization shown separately; as a percent of sales)

Selling, Distribution, and Administrative Expenses (as a percent of sales)

FASTER Act and Loss on Inferior Ingredients, Plant Closure Costs and Impairment of Assets, and Multi-Employer Pension Plan Withdrawal Costs

Refer to the discussion in the "Matters Affecting Comparability" section above regarding these items.

As discussed in the "Matters Affecting Comparability" section above, we recognized $0.4 million of non-cash pension plan settlement charges in Fiscal 2021 associated with Plan No. 2.

Loss on Extinguishment of Debt

In the first quarter of Fiscal 2021, we completed the redemption of the outstanding 2022 notes and incurred a loss of $16.1 million due to the make-whole provision of $15.4 million and the write-off of unamortized debt discount and debt issuance costs totaling $0.7 million as further discussed in the "Matters Affecting Comparability" section above.

The Inflation Reduction Act ("IRA") did not have a material impact on the effective tax rate for Fiscal 2022 and there is no anticipated material impact on the effective tax rate in future periods.

The increase in comprehensive income year over year resulted primarily from the increase in net earnings and changes in the fair value of derivatives.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

implementing our strategic priorities, including our transformation strategy initiatives;

paying dividends to our shareholders;

maintaining a conservative financial position;

repurchasing shares of our common stock.

On February 17, 2023, we funded the purchase price of the Papa Pita transaction with cash on hand and from our credit facilities.

On May 26, 2022, our Board of Directors increased the company's share repurchase authorization by 20.0 million shares.

Key items impacting our liquidity, capital resources and financial position in Fiscal 2022 and 2021:

Generated $360.9 million of net cash from operating activities.

Paid dividends to our shareholders of $186.5 million.

Invested in our business through capital expenditures of $169.1 million (inclusive of $61.3 million of capital expenditures, including amounts recognized in accounts payable at year end, for the ERP upgrade).

Repurchased $34.6 million of our common stock.

Generated $344.6 million of net cash from operating activities.

Paid dividends to our shareholders of $175.9 million.

Reduced our total debt outstanding $81.9 million.

Invested in our business through capital expenditures of $136.0 million (inclusive of $23.0 million of capital expenditures, including amounts recognized in accounts payable at year end, for the ERP upgrade) and purchase of leased warehouses of $64.7 million.

Cash flows provided by operating activities $ 360,889 $ 344,610 Cash disbursed for investing activities

Gain reclassified from accumulated comprehensive

Refer to the Acquisition-related costs (loss on foreign currency exchange rates) and Plant closure costs and impairment of assets discussion in the "Matters Affecting Comparability" section above regarding these items.

For Fiscal 2022 and 2021, deferred income tax activity was primarily composed of changes in temporary differences year over year.

Net cash for working capital requirements and pension plan contributions included the following items (amounts in thousands):

Hedging activities change from market movements that affect the fair value and required collateral of positions and the timing and recognition of deferred gains or losses. These changes will occur as part of our hedging program, although the degree and financial impact cannot be estimated.

Cash Flows Disbursed for Investing Activities. The table below presents net cash disbursed for investing activities for Fiscal 2022 and 2021 (amounts in thousands):

The company currently estimates capital expenditures of approximately $140.0 million to $150.0 million (inclusive of expenditures for the ERP upgrade of $20.0 million to $30.0 million) in Fiscal 2023.

As discussed in the Executive Overview section above, we invested $9.0 million in Base Culture, a Clearwater, Florida-based company with one manufacturing facility.

Cash Flows Disbursed for Financing Activities. The table below presents net cash disbursed for financing activities for Fiscal 2022 and 2021 (amounts in thousands):

(1,745 ) Net cash disbursed for financing activities $ (222,167 ) $ (274,777 )

See the discussion below under the "Capital Structure" section regarding changes in debt obligations.

Amount excludes a provision in the agreement which allows the company to request an additional $200.0 million in additional revolving commitments.

New Accounting Pronouncements Not Yet Adopted

See Note 3, Recent Accounting Pronouncements, of Notes to Consolidated Financial Statements of this Form 10-K regarding this information.

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